New Delhi, Aug. 1: The Supreme Court today allowed Sahara chief Subrata Roy to stay in a Tihar jail conference hall for “10 working days” so he can hold negotiations for the sale of his properties to raise Rs 10,000 crore for bail.
But Roy’s woes don’t seem over yet, with the income-tax department claiming in court that the Rs 20,000 crore the group owes investors is “unaccounted money”.
Roy can stay in the conference room starting August 4 and speak between 8am and 6pm through video-conferencing to prospective buyers of his properties, mainly based in Britain and America.
During the 10-day period —which will exclude weekends and public holidays — Roy and two jailed Sahara directors will have to sleep in the hall. They would not be allowed to go back for the night to the barracks where they have been lodged so far, the bench of Justices T.S. Thakur, A.R. Dave and A.K. Sikri said.
The order came over a week after the bench rejected Roy’s plea for parole to sell his properties and raise the Rs 10,000 crore fixed by the court to be considered for bail.
But more trouble loomed on the Sahara chief, who has been in jail since March 4 for defying the orders of the court as well as market regulator Sebi to refund Rs 20,000 crore allegedly raised from the public in violation of rules.
Additional solicitor-general Tushar Mehta, appearing on behalf of the income-tax department, said its investigations had revealed that “there are no investors by the name given by the company, and in some cases the addressees (investors) had said they had not invested. In effect, the entire money according to us is unaccounted.”
Justice Thakur, heading the bench, recalled Sebi having told the court that if the “addressees (investors)” were not traced, the money should be “escheated”.
“Escheat” refers to appropriation of money/property by the government when there are no claimants or owners.
Mehta, the additional solicitor-general, contended that if the money was eventually found to be unaccounted, the department must be allowed to impose a penalty on the company.
At this, Roy’s counsel Harish Salve and his colleague Gaurav Bhatia pointed to a contradiction between the arguments of Sebi and the tax authorities.
If the tax department claims the sum is unaccounted, it is free to impose a penalty under the law, Salve argued. But once a penalty is levied, the amount cannot be “escheated” and would revert to Sahara. The court said it would consider the issue later.