The Sahara Group on Wednesday got nine weeks time from the Supreme Court to pay back Rs 24,000 crore (Rs 240 billion) with 15 per cent interest to over three crore (30 million) investors in its two companies, with an immediate upfront payment of Rs 5,120 crore (Rs 51.2 billion).
A bench headed by Chief Justice Altamas Kabir directed the Sahara Group to immediately hand over a demand draft of Rs 5,120 crore to market regulator SEBI and said the balance amount shall be deposited with the market regulator in two instalments to be cleared by early February.
The bench also comprising justices S S Nijjar and J Chelameswar directed that the first instalment of Rs 10,000 crore (Rs 100 billion) has to be paid by the first week of January 2013 and the remaining by the first week of February 2013.
Strong objections over the court order were raised by SEBI and an association of investors, which said the directions were being given without hearing their submissions.
During the hearing, the bench said that at the moment, it appears that the Sahara group was not in a position to make the entire payment as directed by the apex court by the August 31 verdict.
"We have taken a slightly liberal view with the concern of depositors and not with the company," it said.
With today's order, the court modified the August 31 verdict, which had set a three-month deadline ending November to the Sahara group to make the refund.
The order was passed on an appeal filed by the Sahara group against a November 29 order of the Securities Appellate Tribunal (SAT), which had refused to entertain their plea and asked them to approach the Supreme Court which had directed them to refund the amount by November 30.
SEBI's counsel Arvind Dattar strongly opposed the order dictated by Justice Kabir and said that it was not right to modify the earlier verdict given by a different bench.
He submitted that Sahara's plea must be heard by a bench of justices K S Radhakrishnan and J S Khehar, which had passed the verdict against the Group's two companies.
At one stage, the Chief Justice ticked off Dattar for insisting that the court must record his statement in its order that the case must be heard by justices Radhakrishnan and Khehar.
"We will record what we feel to record. We cannot record what you say," the Chief Justice shot back.
An association of investors, who had put in their money in Sahara Group, objected to the order, saying that it was pronounced without hearing their arguments.
Appearing for the association, senior advocate Vikas Singh said while the court has remarked that it will pass order to protect interest of the investors, it was giving the direction without hearing them.
"You are saying that the order is being passed to protect the investors and you are passing the order in the guise of protecting the investors, but what is there for them if investors are not heard. It is not fair," an upset Singh said, immediately after the order was dictated by CJI.
He said that his petition should not be disposed of along with Sahara's petition, but CJI retorted, "No, sorry".
The Supreme Court had on Monday rapped the Sahara group for not implementing its order to refund the amount to investors.
It had asked the two Sahara firms - Sahara India Real Estate Corporation and Sahara Housing Investment Corporation - to explain if the entire amount can be refunded within a week.
"Your intention is very shaky. Your every step is shaky," the court had said.
The Sahara group had yesterday sought more time to furnish the details of the refund of the investors' money it had mopped up through optionally fully convertible debentures (OFCD), following which the case was adjourned till today (Wednesday).
Under the scheme scrapped by the apex, the two Sahara firms had offered bonds to small investors promising huge returns.
The court had also said that SEBI can attach properties and freeze bank accounts of the companies if they fail to refund the amount.
It had appointed one of its retired judges Justice B N Aggarwal to oversee the action taken by SEBI against the two companies.