Supreme Court facilitates Sahara's Rs150-cr property auction

Courtroom number 2 of the Supreme Court turned into a virtual auction house on Monday with the bench headed by Justice T S Thakur hearing the Sahara-Sebi case taking upon itself the task of auctioning Sahara Group's 140-acre land at Gorakhpur in Uttar Pradesh.

While the original buyer, Samriddhi Developers, had offered to buy the land from the Sahara group for Rs64 crore, another buyer, Gorakhpur Real Estate Developers, approached the court offering to pay Rs110 crore for the property,  forcing a competitive bidding.

The Supreme Court bench, hearing the Sahara investors refund case-involving the Group's chairman Subrata Roy-virtually turned into an auction venue when a competitive bidding took place before a the bench headed by Justice TS Thakur during the hearing on the issue related to arranging the money for release of Roy.

The two real estate firms tried to match each other by hiking their bids for the 140-acre land, with both the parties saying they are ready to fork out Rs150 crore.

The money so raised will go to a Rs10,000-cr pool that will be used to bail out Sahara chief Subrata Roy and later repay investors of Shara group real estate firms that have collected over Rs20,000 crore in optionally fully convertible debentures.

Ray has been lodged in Delhi's Tihar jail for the last one year and three months after he was incarcerated for not repaying Rs20,000 crore worth of investors' money. This money has grown to Rs36,000 crore by now.

The bidding started when the lawyer of Samriddhi Developers agreed to match the Rs110-crore offer made by Gorakhpur Real Estate Developers Private Limited. Subsequently, Gorakhpur Real Estate raised it to Rs115 crore and the judges sought the rival's response.

Senior advocate Paras Kuhat, appearing for Samriddhi, took instructions from one of the partners present in the court and jacked up the bid to Rs125 crore. Gorakhpur Real Estate then took it up to Rs140 crore, added Rs5 crore more and then finally settled at Rs150 crore.

Samriddhi matched this with a similar offer of Rs150 crore. The SC bench then asked both the parties to show their bona fides by depositing 25 per cent of the amount by 31 July in the Securities and Exchange Board of India (Sebi)-Sahara account and rest of the money in three equal installments by 31 October.

The bench, also comprising Justices AR Dave and AK Sikri, however, said that failure of any of them to meet the deadline would result in forfeiture of the 25 per cent bid amount deposited by them.

The court had, earlier, declined to relax the conditions for Roy's interim bail and insisted on depositing Rs5,000 crore in cash and a bank guarantee of equal amount and repayment of the entire Rs36,000 crore in 18 months.

Sahara's counsel Kapil Sibal reiterated his earlier stance that no business group in the world would be able to pay Rs36,000 crore in such a short period.