Sahara case: SEBI asks SC to throw book at directors

The Securities and Exchange Board of India on Tuesday pleaded before the Supreme Court to throw the book at Sahara India Group head Subrata Roy and three other directors of its companies for contempt of court by not complying with an order of the court to deposit with SEBI Rs24,000 crore for repayment to duped investors.

The market regulator had moved the court seeking action against Sahara India Real Estate Corp and Sahara Housing Investment Corp Ltd and their directors for not having complied with the orders of 31 August 2012, 5 December 2012, and 25 February 2013, directing it to deposit the amount with SEBI.

"Here is a case where contempt was committed not once, not twice but three times," senior counsel Arvind Datar told a bench of Justices K S Radhakrishnan and Jagdish Singh Khehar. "These directors and officers should be given maximum imprisonment," Datar demanded.

Describing Sahara's non-compliance with the SC verdict as "brazen and blatant", Datar urged the court to ask Roy and the other directors to appear before the court and deposit their passports.

Datar reminded the judges that it was just 21 days away from the first anniversary of their 31 August 2012 judgment asking the Sahara companies to deposit the due money.

Opposing SEBI's plea, senior counsel Ram Jethmalani told the court that the law of contempt has assumed constitutional dimensions and since the market regulator has not mentioned any name other than two companies in its petitions, "it is not permissible for the court to travel to any piece of paper that is not before it".

Jethmalani said the onus was on SEBI to prove its case beyond doubt, and this is more so because the issue also involves a threat to liberty.

The bench posted the matter up for further hearing on 13 August.