Sahara: SC Allows Govt's Plea Seeking Allocation of Rs5,000 Crore To Repay Depositors
Moneylife Digital Team 31 March 2023
The Supreme Court on Wednesday allowed an application filed by the Union government seeking Rs5,000 crore allocation to pay back to the depositors of the Sahara group of cooperative societies out of the nearly Rs25,000 crore deposited with market regulator Securities and Exchange Board of India (SEBI).
A bench headed by justice MR Shah and comprising justice CT Ravikumar passed the direction on the application filed by the government in a public interest litigation (PIL) by one Pinak Mani Mohanty. The bench says the amount should be disbursed to depositors duped by the Sahara group of cooperative societies, and a former judge of the top court will monitor the entire process.
Mr Mohanty, in the PIL, had sought a direction to pay the depositors, who invested in several chit fund companies and Sahara credit companies.
Union ministry of cooperation had filed an application seeking directions from the apex court to transfer Rs5,000 crore out of an unutilised amount of Rs23,937 crore (lying in the Sahara-SEBI refund account) to be disbursed against the legitimate dues of depositors of Sahara group of cooperatives societies.

Solicitor general (SG) Tushar Mehta submitted that Rs24,979.67 crore is lying unutilised with the SEBI in the Sahara-SEBI refund account, which has been deposited following directions from the apex court.

He has submitted that out of the Rs15,569.27 crore deposited by Sahara India Real Estate Corp Ltd (SIRECL) and Sahara Housing Investment Corp Ltd (SHICL), Rs2,253 crore had been taken out from Sahara Credit Cooperative Society Ltd and deposited with SEBI due to the dispute of Sahara Real Estate Ltd. "Thus, the corpus which is lying in Sahara-SEBI refund account already includes the amount which belongs to the depositors of Sahara Group Cooperative Society."

"...if Rs5,000 crore is transferred to the central registrar of cooperative societies and thereafter the same is disbursed against the legitimate dues of the depositors of the Sahara Group of Cooperative Societies, it will be just, proper and equitable," the SG added.

After hearing Mr Mehta, the SG, the bench noted that Rs2,253 crore had been taken out of the Sahara Credit Cooperative Society, one of the four Sahara group multi-state cooperative societies and deposited with SEBI.

"The amount lying in the Sahara-SEBI refund account is lying unutilised and the genuine depositors of the Sahara group of cooperative societies, which otherwise, shall be entitled to get back their money, the prayer sought in the present application seems to be reasonable and which shall be in the larger public interest and interest of the genuine depositors of the Sahara group of cooperative societies," the bench noted.

It then directed to transfer Rs5,000 crore from the Rs24979.67 crore in the Sahara-SEBI refund account to the central registrar of cooperative societies to pay it to genuine depositors of Sahara group of cooperative societies.

"The disbursement shall be supervised and monitored by justice R Subhash Reddy, former judge of this court, with the able assistance of Gaurav Agarwal, advocate, who is appointed as amicus curiae to assist justice Reddy as well as the central registrar of cooperative societies in disbursing the amount to the genuine depositors of the Sahara group of cooperative societies," the SC says.
Interestingly, Moneylife Foundation had made a similar plea to SEBI in December 2020 since the regulator is sitting on Rs24,000 crore funds collected from the two Sahara realty companies which had issued optionally convertible bonds without regulatory permission over 15 years ago. A landmark order of the Supreme Court in August 2012 forced Sahara to deposit the funds collected with SEBI.
Moneylife foundation, in a representation to SEBI, had appealed to it to consider returning at least Rs3,000 crore of the Sahara Cooperative Society that was inadvertently transferred to SEBI according to an order of the central registrar of cooperative societies. SEBI did not bother to respond.
Separately, Moneylife Foundation filed three intervention applications in a civil contempt petition case ( SEBI vs Sahara No. 412 of 2012), making the same plea before the SC. The next hearing has been scheduled for the 18th, 19th and 20th of April 2023 to complete all pending interim applications and the main contempt case.
In January, the apex court had directed SEBI and Sahara India Real Estate Corp Ltd to file responses to three intervention applications filed by Moneylife Foundation.
The application has submitted investor data of 240 people collated and verified from the Telegram channel. The total amount claimed by the investors in the list submitted to the apex court is approximately Rs15 crore. These are individuals who are small-time investors who were methodically persuaded to part with their hard-earned money to contribute to various schemes under the Sahara group. The intervention application is also accompanied by affidavits from two investors whose details have been included to showcase the hardship and difficulties the aggrieved depositors face.
Moneylife Foundation has requested the apex court to direct SEBI to refund the amounts due to the investors of cooperative societies belonging to the Sahara group after due verification of their claims. (Read: Supreme Court Directs SEBI, Sahara To Respond in Interim Applications Filed by Moneylife Foundation)
Last year in August, the government told the Lok Sabha that 129.6mn (million) investors have Rs112,454.37 crore stuck in these six companies. Sahara Credit Cooperative Society owes a maximum Rs47,245 crore to investors, followed by SIRECL at Rs19,400.87 crore and Saharayn Universal Multipurpose Society at Rs18,000 crore.
"As regard Sahara India Group not being able to pay back the investors of other schemes, it is informed that the principal amount raised under RHP of OFCDs of SIRCEL and SHICL is Rs25,781.37 crores against which only Rs15,506.81 crore has been deposited in SEBI-Sahara Refund Account and SEBI has been facilitating the repayment of principal and interest to the investors who invested in OFCDs of SIRECL and SHICL," Pankaj Chaudhary, minister of state for finance, says in a written reply. (Read: Sahara India Group: Rs1.12 Lakh Crore of 129.6mn Investors Remains 'Stuck', Says Govt)
You may also want to read out detailed coverage on Sahara issue here
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