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SEBI Moves Contempt Plea Against Sahara For Obstructing Aamby Valley Auction

Prabhati Nayak Mishra
10 Oct 2017 10:35 AM GMT
SEBI Moves Contempt Plea Against Sahara For Obstructing Aamby Valley Auction
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The Securities and Exchange Board of India (SEBI) on Tuesday moved the Supreme Court with a contempt petition against Sahara group for allegedly obstructing the board from carrying out the auction of Aamby Valley property in Pune, as directed by the court.

Mentioning for an urgent hearing of the contempt plea, SEBI counsel Pratap Venugopal informed the bench headed by Justice Ranjan Gogoi that the auction process was to start from today but Sahara has been “obstructing” by suspending the operation of day-to-day business activities in the project, which would create law and order problem in the area and cause difficulties to carry on the auction.

“Respondents (Sahara and its directors), knowing fully well the various orders passed by this court, have taken such steps without seeking leave of this court, clearly with the intent to frustrate and subvert the auction of Aamby Valley property ordered by this Court, thereby seeking to subvert, hinder, thwart and derail the due process of law,” SEBI, in its contempt plea, said.

On September 28, in a communication to police and the official liquidator, appointed by the court, Sahara had suspended the business operations in Aamby Valley area, citing the deteriorating situation of the company due to SEBI-Sahara litigation in the court. The suspension began on October 3, and would subsequently announce lockout of their establishment from October 19, 2017.

“The business of Aamby Valley and its subsidiaries/associate companies has reduced due to the auction and sale of Aamby Valley. In the constantly deteriorating business environment, we have no option but to announce suspension of business activities of Aamby Valley,” as per Sahara’s communication to police. It was also requested to depute police force keeping in mind the law and order situation in the valley.

The SEBI alleged that the communications dated 28.09.2017 addressed by the authorised officer of Aamby Valley (Contemnor/ Respondent No.9) to the official liquidator, except for a bald statement that “conducting day-to-day operations of Aamby Valley have become absolutely impossible……”, sets out no reason(s) for this sudden decision to suspend operations.

The letter was addressed to the Superintendent of Police, Pune Rural, with copy marked to (i) Official Liquidator, Bombay High Court (ii) Office of Hon’ble Chief Minister, GOM, Mantralaya, Mumbai (iii) Additional Chief Secretary Home, Mantralaya, Mumbai, (iv) Inspector General of Police, Kolhapur range, and (v) Senior Inspector, Paud Police Station.

“It is therefore clear that the so-called decision of the Contemnor /Respondent No.10, admittedly with  the approval of its Board of Directors (Contemnors/ Respondents 1 to 8) as communicated by the Contemnor/ Respondent No.9, to suspend operations and declare a lock out is a motivated attempt to disrupt the auction process being conducted in pursuance of the directions of this Hon’ble Court contained in various orders passed from time to time including the order dated 11.09.2017, referred to herein above, in as much as the provisions of the Industrial Disputes Act and in particular Sections 25FF and 33-C thereof, could apply, thereby frustrating the auction sale of the Aamby Valley property. It is obvious that no prospective purchaser would make a bid when there is a lock out and the Police has taken control of the property,” SEBI informed the apex court in its letter.

Justice Gogoi said the plea would be listed for hearing before the Special bench in consultation with Chief Justice of India Dipak Misra, who is heading the bench comprising Justice AK Sikri.

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