The Supreme Court on Friday stayed the arrest of Sahara Group chief Subrata Roy, as directed by the Patna High Court the day before. It has suspended further proceedings against him in a fraud case where he was asked to personally explain his group company’s plan to return mature deposits to small investors.
A bench headed by Justice AM Khanwilkar, after hearing senior counsel Kapil Sibal and V Giri, stayed the order of the High Court which had issued an arrest warrant against the verdict for not appearing in court on Friday morning despite clear directions in the matter. Roy was originally scheduled to appear on Thursday but was given one more day.
The verdict or the Sahara group had nothing to do with the original criminal complaint and Sahara was not a party to the main cases, his lawyer argued, despite the fact that the High Court had issued a summons order “most arbitrarily”.
Asking the Uttar Pradesh and Delhi police to co-operate, the High Court on Friday directed the Bihar Director General of Police (DGP) to present the verdict in person on May 16 at 10.30 am.
“It simply came to our notice then. Despite giving him various opportunities, he failed to appear. There is no alternative to this court, but to direct the authorities to present the verdict … The order of this court is in the interest of justice, especially in the present case where the companies led by Roy Sahara, who was the chairman of Sahara Group, have remained silent. Billions of rupees from the citizens of Bihar, said the High Court judge.
The High Court was directed on various anticipatory bail applications filed by non-banking finance companies (NBFCs) in fraud cases. More than 600 applications are pending for the release of mature funds of Sahara Company.
In his appeal, Roy told the SC that the High Court could not exercise its powers under Section 438 of the CrPC to “recover the arrears and resolve the allegations of fraud and deception involving the public and make the advance bail process practically a universal practice.
The judgment was added as a party to the alleged power to be a director in Sahara Group of Companies, which was in fact incorrect as all the group companies were separate legal entities and governed by their respective boards, the appeal was filed through Consul Gautam.
Although the High Court had directed the RBI to create awareness about the effectiveness of the fund agencies and also directed the registration of a PIL in the case of alleged fraud by these agencies, it also accused SEBI, ROSI (Bihar), Ministry of Corporate Affairs. Department of Economic Affairs, etc., in these activities.