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Sibal pleads for 6 weeks parole for Subrata 'in chains'; SC reserves order

The Supreme Court today reserved its order on Sahara group chief Subrata Roy’s plea to be released from custody for six weeks coupled with lifting of restrictions to deal with his 72 properties so that he could place before the court a plan to return investors money that two group companies had collected from three crore investors in 2007-2008.

The court also reserved order on the conditions that would accompany the acceptance of the bank guarantee of Rs.5,000 crore for the payment of the balance amount of the investors money amounting to Rs. 24,600 crore, that, according to market regulator SEBI, has swelled to Rs.39,000 crore on account of interest liabilities.

The court will also decide at what point of time, the failure of Sahara to return the investors money, would result in the encashment of the bank guarantee.

The apex court by its March 26, 2014 order had asked Sahara to deposit Rs.10,000 crore - Rs. 5,000 crore in cash and Rs.5,000 crore in bank guarantee - towards repayment of the investors money. The court had said that this was also a condition for the release of Roy and Sahara’s two directors from Tihar Jail where they are in judicial custody.

A bench of Justice TS Thakur, Justice Anil R Dave and Justice AK ,Sikri reserved the order as senior counsel Kapil Sibal urged the court to release Roy as he has already been in the lockup for 16 months and no business transactions could be carried out from the prison cell.

Noting that Roy was in “chains inside” and his business was in “chains outside”, Sibal said that Roy was in jail for 16 months and implored the court for “six weeks” after which it could send him back to jail. “Is it asking too much. (In this time) I will give scheme for the repayment.”

However, the unimpressed court told Sibal that Sahara has done “amazing things” and “your people are very efficient” that they have collected Rs.17,000 crore and disbursed it in one month. It wondered why Sahara could not undertake a transaction of its properties to raise the money while its chief was in custody.

The Rs.17,000 crore is in reference to money collected by a Sahara company in 2007-08 through optionally fully convertible debentures (OFCDs).

The apex court by its August 31, 2012 order had asked the two companies - Sahara India Real Estate Corp Ltd. (SIRECL) and Sahara Housing Investment Corporation Limited (SHICL) - to return to investors Rs.24,600 crore along with 15 percent interest.

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