The Supreme Court on Friday allowed Sahara chief Subrata Roy to use the conference room in Tihar jail complex for ten days from August 5 to hold negotiations with potential buyers to sell his three luxury hotels in New York and London to raise Rs 10,000 crore (Rs 100 billion) to get regular bail.
A bench headed by Justice T S Thakur asked Delhi government to issue notification by August 4 for converting the conference room into jail which can be used by Roy and two jailed directors of Sahara for 10 working days from 06:00 AM to 08:00 PM for holding negotiations with prospective buyers of hotels in New York and London.
The bench also permitted them to avail the service of three staff -- two secretarial and one technical person -- during the hours of negotiations with a clear direction that they would not be allowed to stay overnight.
It was made clear that Saharas would foot the bills for using the Wi-fi facility of the conference room and get the other gadgets like landline telephones with STD/ISD facilities on their own cost.
They were also allowed to have a mobile phone, computers -- desktop and laptop and printers.
The apex court said names of prospective buyers/visitors have to be given in advance and they would be subjected to usual security drills, including frisking and all other rules and regulations will continue to operate as per the jail manual.
The bench, also comprising justices A R Dave and A K Sikri, passed the directions after recording the agreement reached between the Saharas, Tihar jail authorities and Securities and Exchange Board of India.
The apex court had on July 25 asked the Delhi government to explore a venue within Tihar jail complex where Subrata Roy can hold negotiations with buyers.
Roy, 65, who has been in jail for the past five months, had pleaded that he was committed to follow apex court's direction and sought its permission for shifting to Tihar jail guest house for a week to enable him to hold negotiations to sell his properties in India and abroad to raise Rs 10,000 crore (Rs 100 billion) to get regular bail.
While allowing him and two others to hold negotiations from conference romm, the bench said they are still under judicial custody and "it is not a substitute for liberty".
Though the matter was listed for limited issue of allowing negotiations from jail complex, the deliberation also revolved around over Rs 10,000 crore income tax demand raised against the Saharas by the Revenue Department.
Additional Solicitor General Tushar Mehta replied in the affirmative to the question of the bench that the tax demand was raised on the amount as their source was not disclosed and the proceedings before the CIT (Appeal) was also not stayed.
He said that the tax demand was raised on the unaccounted money of Saharas.
During the deliberation on tax issue, the bench and also lawyers appearing for all sides including senior advocate Harish Salve for Sahara and Sebi's senior counsel Arvind Dattar agreed that on payment of penalty on unaccounted amount, the money remains with the tax payers.
Mehta had told the bench that a random survey was done and in many cases the tax department did not locate the investors and even if they found addresses of some they denied making any investment.
The bench also discussed on some of the orders passed by other benches on the Sebi-Sahara saga and perused the role of its former judge B N Agarwal, who was appointed to monitor the verification process for the refund.
The apex court had earlier refused to release Roy on interim bail or parole but had allowed selling of his luxury hotels in New York and London to raise money to deposit Rs 10,000 crore with SEBI as directed to get regular bail.
It had also appointed senior advocate Shekhar Naphade as amicus curiae to assist the court in dealing with the case in which the group is supposed to pay around Rs 37,000 crore (Rs 370 billion) to wind up the proceedings in the apex court.
Roy, who was sent to jail on March 4 this year for non- refund of over Rs 20,000 crore (Rs 200 billion) to depositors, was asked by the court to pay Rs 10,000 crore to get bail, out of which Rs 5,000 crore (Rs 50 billion) in cash and rest of the amount in bank guarantee.
Sahara has so far raised Rs 3,117 crore (Rs 31.17 billion) which has been deposited with the market regulator.
The group, however, has been claiming that it has already repaid money to 93 per cent investors.
Image: Subrata Roy