UChicago Center in Delhi
About the speaker
Mr. Arvind Datar is a senior advocate in the High Court of Madras. He also regularly appears before the Supreme Court of India. Mr. Datar has appeared in leading cases such as the National Company Law Tribunal case, the National Tax Tribunal case, and the landmark National Judicial Appointments Commission case. He was also appointed to the committee formed by the Supreme Court for collecting public views on reform of the collegium system of appointment of judges. Mr. Datar has also co-authored the book ‘Nani Palkhivala: The Courtroom Genius’, apart from writing the multi-volume ‘Datar Commentary on the Constitution of India’, published by LexisNexis.
In the Sahara India Real Estate Corporation Limited v. Securities and Exchange Board of India (Sahara v. SEBI) case, Mr. Datar appeared on behalf of SEBI.
About the case and the talk
The origins of Sahara v. SEBI lie in a complaint filed in 2010 against two companies of the Sahara Group. The complaint was against housing bonds issued by these two companies allegedly in violation of the relevant rules and norms issued by the Reserve Bank of India, the Ministry of Corporate Affairs, and the National Housing Board. The complaint was forwarded to the SEBI, the markets regulator in India. Investigations by SEBI revealed that the issuance of bonds and the raising of funds by the Sahara Group companies were in violation of the applicable rules. Consequently, in November 2010, SEBI passed an interim order against these companies, asking them to refund the money collected from the investors. In 2011, the Securities Appellate Tribunal upheld SEBI’s order, and asked both Sahara companies to refund over Rs. 25,781 crore to over 3 crore investors who had procured those bonds.
In response, the Sahara Group moved the Supreme Court, which also passed an order asking Sahara to deposit over Rs. 24,000 crore to SEBI in three instalments. The Sahara Group failed to make these payments which led to SEBI issuing orders for attachment of bank accounts and other properties of the group. Later, SEBI also issued summons for personal appearance of Sahara chief Mr. Subrata Roy, and three directors of the Sahara Group.
In 2013, SEBI approached the Supreme Court against the Sahara Group for non-compliance with the court’s directions prompting the Court to also ask Roy to appear personally before it. Upon his failure to do so, the Court issued a non-bailable warrant to ensure his personal appearance. He was ultimately committed to judicial custody on March 4, 2014 due to non-compliance with the order of the Supreme Court directing payment of nearly Rs. 17,000 crore to SEBI. Roy has been under incarceration ever since, because on June 19, 2015, the Supreme Court refused to grant bail to Roy until Rs. 10,000 crore were paid to SEBI by the Sahara Group.
At the Great Cases talk, Mr. Datar shared his insights from appearing for SEBI in the Sahara v. SEBI case. The case raised important questions relating to securities and company law. At the same time, pertinent issues on law relating to contempt of the Supreme Court’s orders, as well as the personal liberty of an incarcerated individual have also arisen in this case.