SC slams Sahara for delaying Aamby Valley auction; orders go-ahead

The Supreme Court on Thursday asked the official liquidator of the Bombay High Court to continue the auction of the Sahara Group's Aamby Valley property near Pune, and warned that those trying to obstruct the process will be hauled up for contempt and ''sent to jail''.

The apex court asked the Maharashtra Director General of Police to hand over Sahara's flagship project to the official liquidator after the Securities and Exchange Board of India (Sebi) blamed the company for the failure of the first round of bidding for the project.

''If any impediment is caused in the auctioning process by anyone, he shall be liable of contempt of this court and sent to jail,'' a bench of Chief Justice of India Dipak Misra and Justices Ranjan Gogoi and A K Sikri ordered.

The court was hearing a petition filed by Sebi, which alleged that the group had obstructed the auction process by writing a letter to the Pune police raising the issue of law and order at the site.

Taking exception to this, the court said the group should not have communicated with Pune's Superintendent of the Police (Rural) on the issue as the auction was ordered by the top court.

Appearing for Sebi, senior advocate Arvind P Datar told the bench that no bidders appeared after the Aamby Valley Board declared a lockout and handed over the property to the state police.

Sahara lawyer Kapil Sibal, who had initially resisted the auction to recover dues from the company, had at the last hearing said there were only two prospective bidders for the project.

The court had, however, shrugged off the Sahara plea for more time to gather funds to pay off dues and asked the market regulator to go ahead with the scheduled auction.

The auction, Datar told the court on Thursday, failed after Sahara wrote to police to take over the administration of the project. Datar, assisted by Sebi standing counsel Pratap Venugopal, sought contempt action against the company and its directors.

The top court did not for the time being take any contempt action against the company or its directors, but ordered the Maharashtra DGP to hand over the project to the liquidator, who will function under the Company Law Board judge and a High Court judge. Sebi will then attempt to auction it again.

The Sahara Group owes Rs37,000 crore along with interest thereon to the market regulator to be paid back to investors in two of the group's schemes.

On Sebi's allegation that the police had taken custody of the property due to which no bidder was willing to take part in the auction process, the bench asked the Director General of Police, Maharashtra, to ensure that the property was handed over to the liquidator within 48 hours.

On 10 August, the SC had rejected Sahara chief Subrata Roy's plea to stay the auction and said that the process will proceed as per schedule, though if Rs1,500 crore is paid by Roy in the Sebi-Sahara refund account by 7 September, then it may pass an appropriate order.

Roy has spent almost two years in jail, and has been out on bail since 6 May last year.

The parole was first granted to enable him attend the funeral of his mother. It has been extended from time to time since then.