Supreme Court Modifies Orders for Sahara Companies: Property Sales, SEBI Deposits, Bank Guarantee, Offshore Sales

The Supreme Court partially modified its orders to allow Sahara India Real Estate Corporation Limited and Sahara Housing Investment Corporation Limited to deposit the maturity value/sale consideration of financial instruments with SEBI. The court permitted the sale of properties within India to meet bail requirements and allowed charging immovable property to furnish a bank guarantee. Permission to sell offshore properties was granted, subject to conditions on sale price and depositing proceeds with SEBI. Requests for temporary release on parole were dismissed. The court clarified that property sales should not be less than the estimated value with a maximum 5% reduction.

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Issues Involved:
1. Modification of interim bail terms.
2. Permission to sell offshore properties.
3. Request for temporary release on parole.
4. Clarification of the order regarding sale price.

Detailed Analysis:

Modification of Interim Bail Terms:
By the order dated 4th June 2014, the Supreme Court partially modified its previous orders to allow Sahara India Real Estate Corporation Limited (SIRECL) and Sahara Housing Investment Corporation Limited (SHICL) (referred to as 'Saharas') to deposit the maturity value/sale consideration of FDs, bonds, and securities with SEBI. The court also permitted the sale of nine properties within India to meet the bail requirement of Rs. 5,000 crores. Additionally, Saharas were allowed to charge immovable property in Aamby Valley (Pune) to furnish a bank guarantee of Rs. 5,000 crores. The court left the decision on selling three offshore hotel properties for later, pending necessary documentation from the Bank of China.

Permission to Sell Offshore Properties:
Saharas sought permission to leverage three overseas hotel properties by sale or mortgage, with the Bank of China's consent, to secure a bank guarantee of Rs. 5,000 crores. The Bank of China confirmed its consent to the sale, provided the sale proceeds were used to repay the outstanding loans. The bank also confirmed the valuation reports prepared by CBRE and JLL, which were accepted for loan security purposes. The court found merit in allowing the sale of these properties, emphasizing that the sale should be at the market value indicated by the valuation reports, with a permissible margin of 5% less than the estimated value.

Request for Temporary Release on Parole:
Shri Subrata Roy Sahara requested temporary release on parole to meet his ailing mother and negotiate property sales. The court found no substantial medical grounds for his release and noted the absence of concrete proposals for property sales requiring his negotiation. The court maintained that negotiations could be facilitated if necessary in the future but did not justify parole at this stage.

Clarification of the Order Regarding Sale Price:
The court clarified that the sale of properties should not be less than the estimated value provided by Saharas, with a reduction margin of up to 5%. This clarification was based on the actual market value being significantly higher than the circle rates, as evidenced by the sale of the Ahmedabad property at three times the circle rate.

Conclusion:
1. The applications for temporary release on parole (I.As. No.8-9 of 2014) were dismissed.
2. The applications for permission to sell offshore properties (I.As. No.10-12 of 2014) were allowed, subject to conditions regarding the sale price and deposit of proceeds with SEBI.
3. The court clarified that the sale of properties should be at the estimated value minus a maximum of 5%, and any lower offer would require prior court approval.
4. The court appointed Shri Shekhar Naphade, Senior Advocate, as Amicus Curiae in place of Shri F.S. Nariman, who had appeared for Saharas previously.

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