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Relief for Sahara chief Subrata Roy, Supreme Court accepts bank guarantee

June,19,2015: Release from jail is subject to furnishing Rs. 5,000 crore in cash and Rs. 5,000 crore in bank guarantee, the Supreme Court ruled.

Sahara chief Subrata Roy has been in jail since March 4, 2014 for not complying with the court's order to return investors' Rs 24,000 crores that two group companies SIRECL and SHFCL had collected in 2007-2008.
Sahara chief Subrata Roy has been in jail since March 4, 2014 for not complying with the court’s order to return investors’ Rs 24,000 crores that two group companies SIRECL and SHFCL had collected in 2007-2008.

In a big reprieve for Sahara India chief Subrata Roy, the Supreme Court on Friday accepted bank guarantee format submitted by the troubled company. The apex court, however, is yet to decide on the date on which Roy will walk out of the jail.

The Supreme Court has asked Sahara to pay Rs 36,000 crore in 9 installments. It has also directed the Sahara chief and other top officials of his company to submit their passports. Failure to pay installments will lead to their arrest, the court said. The court also asked Subrata Roy and others to keep the nearest police station posted about their whereabouts.

Sahara has to pay Rs 5000 crore bank guarantee and 5000 crore of cash deposit and the market regulator SEBI can encash bank guarantees for non-compliance of court orders.

Roy has been in jail since March 4, 2014 for not complying with the court's order to return investors' Rs 24,000 crores that two group companies SIRECL and SHFCL had collected in 2007-2008.
 
The apex court on March 4 had sent Roy and directors Ravi Shankar Dubey and Ashok Roy Choudhary to custody for not complying with its orders of August 31, 2012 and others to return investors money.
 
Today's decision by the Supreme Court brings some respite to a corporate group fighting one of the most bitter battles against regulators and for Roy who has been incarcerated for close to 16 months now.

During the last hearing, a battery of senior lawyers led by Kapil Sibal sought release of Roy from jail saying that he will be submitting a scheme on repayment in July and he can be sent back he defaults.

“As a goodwill gesture, please release him. Please give six weeks time to him and he be sent back to jail if he does not do the needful,” Sibal said, adding “keeping him in jail does not serve any body’s purpose”.

“Please do not feel that we are insensitive… and for last 16 months, we had been asking your client about the payment of money. This is not an ordinary case and its a case of its own kind. This man is in jail for the last 16 months…how do you ensure that money is recovered…,” the Bench had responded during the hearing.

 
On May 14, the apex court had deferred a decision on Subrata Roy's bid for bail in his long-running dispute over illegal bonds. Senior counsel Kapil Sibal, who appeared for Roy, had told the court that Roy was in "chains inside" and his business was in "chains outside".
 
A bench of Justice T.S. Thakur, Justice Anil R. Dave and Justice A.K. Sikri had reserved its order on Roy's plea to be released from custody for six weeks coupled with the lifting of restriction to deal with his 72 properties so that he could place before court the plan for the return of investors' money.
 
The Sahara Group had failed to comply with a court order to refund money it had raised from millions of small investors by selling bonds that were later ruled to be illegal.
 
The apex court on August 31, 2012 had said the group was required to refund Rs 24,000 crore with 15 per cent interest in three months to the depositors.
 
The court on March 26, 2014 had asked Roy, to pay Rs 10,000 crore to get bail, out of which Rs 5,000 crore should be paid in cash and rest in bank guarantees.
 
The company had informed the Supreme Court that it was ready to comply with the court's order of paying Rs 10,000 crore for Roy's bail including a bank guarantee of Rs 5,000 crore.

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