# SUBRATA ROY SAHARA v. UNION OF INDIA AND OTHERS

- **Citation:** [2014] 12 S.C.R. 573
- **Court:** Supreme Court of India
- **Decided:** 2014-05-06
- **Bench:** K.S. Radhakrishnan, Jagdish Singh Khehar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/subrata-roy-sahara-v-union-of-india-and-others-29583
- **Pages:** 223

## Headnote

A
B
Judiciary - Practice & Procedure - Recusal of Judges - ·
Held: Calculated psychological offensives and rnind games C
adopted to seek recusa/ of Judges, need to be strongly
repulsed - Such tactics deprecated.
Contempt of Court -
Mannerism and demeanour
exhibited by contemnor - Appreciation of - Financial crime 0
- Subscription of OFCDs - I/legality in collection of money
from investors -Directions issued by Supreme Court to the
two companies in question, to refund the moneys collected
by them from investors, who had subscribed to their OFCD's
- Non-compliance of - Arrest and detention of contemnors
for enforcement of Court directions - Leg.ality of - Challenged
E
- Writ petition - Maintainability of - Held: Not maintainable
- Disobedience of orders of a Court strikes at the very root of .
the rule of law, on which the judicial system rests - Judicial
· orders are bound to be obeyed at all costs - Judicial orders
cannot be permitted to be circumvented - In exercise of F
contempt jurisdiction - Courts have the power to enforce
compliance of judicial orders, and also, the power fo·punish
for contempt - On facts, the two companies in question of
which the petitioner is a promoter, flouted orders passed by
the· SEBI '(FTM), SAT, the High Court and of Supreme Court,
G
with impunity - Facts and information solicited were never
disclosed - Position aclopted by the two companies was
always projected on the basis of unverifiable material - The
t.wb companies remained adamant while frittering away
5n
·
H
574
SUPREME COURT REPORTS
(2014) 12 S.C.R.
A repeated opportunities granted by this Court to comply with
the orders -
The companies adopted a demeanour of
defiance constituting a rebellious behaviour, not amenable to
the rule of Jaw - Since all the efforts to cajole the two
companies and the petitioner were methodically
B circumvented, this Bench started adopting sequentially
harsher means to persuade compliance of this Court's orders,
leading finally to the passing of the impugned order -
Principles of natural justice were followed - There was no bias
- Constitution of India, 1950- Arts. 32 rlw 21, 129 and 142C Securities and Exchange Board of India Act, 1992.
Abuse of Court - Suggestion given to the legislatqre to
formulate a mechanism that· anyone who initiates and
continues a· litigation senselessly, pays for the same -
Legislature to consider introduction of a "Code of Compulsory
D Costs"
E
Dismissing the petition, the Court
HELD:
I.
Should we be hearing this case?
Would it not be better, for another Bench to
hear this case?
F
1; Though it was suggested, that this Bench should
recuse itself from hearing the case, and require it to be
· heard by another compositic;>n, not including either of the
members of this Bench, however, the oath of this office,
required to go ahead with the hearing. If it was the
counsel's posturing antics, aimed at bench-.hunting or
G bench-hopping (or should we say, bench-avoiding), that
.. · would not be allowed. [Para 2 and 11] [592-D; 597-H; 598A]
.
.
2. One of the reasons for retaining the instant petition
H fornearing with ourselves was, that this Bench had heard
SUBRATA ROY SAHARA v. U~ION OF INDIA
575
eminent Senior Counsel engaged by the two companies A
exclusively for over three weeks during the summer
vacation of 2012; had been taken through thousands of
pages of pleadings and had the occasion to watch the
demeanour and defences adopted by the two companies
and the contemnors from time to time, from close 8
quarters. Writing the judgment, had occupied the entire
remaining period of the summer vacation of 2012, as also,
about two months of further time. For any other Bench
to understand the . nuances of the controversy
determined through this Bench's order dated 31.8.2012
(whereby this Court had confirmed the directions earlier C
issued to the two companies in question, to refund the
moneys collected by them from investors, who had
subscribed to their OFCDs, by the SEBI (FTM) and by the
SAT) wou

## Text

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[2014] 12 S.C.R. 573
SUBRATA ROY SAHARA
v.
UNION OF INDIA AND OTHERS
(Writ Petition (Criminal) No. 57 of 2014)
MAY 6, 2014
[K.S. RADHAKRISHNAN AND
JAGDISH SINGH KHEHAR, JJ.]
A
B
Judiciary - Practice & Procedure - Recusal of Judges - ·
Held: Calculated psychological offensives and rnind games C
adopted to seek recusa/ of Judges, need to be strongly
repulsed - Such tactics deprecated.
Contempt of Court -
Mannerism and demeanour
exhibited by contemnor - Appreciation of - Financial crime 0
- Subscription of OFCDs - I/legality in collection of money
from investors -Directions issued by Supreme Court to the
two companies in question, to refund the moneys collected
by them from investors, who had subscribed to their OFCD's
- Non-compliance of - Arrest and detention of contemnors
for enforcement of Court directions - Leg.ality of - Challenged
E
- Writ petition - Maintainability of - Held: Not maintainable
- Disobedience of orders of a Court strikes at the very root of .
the rule of law, on which the judicial system rests - Judicial
· orders are bound to be obeyed at all costs - Judicial orders
cannot be permitted to be circumvented - In exercise of F
contempt jurisdiction - Courts have the power to enforce
compliance of judicial orders, and also, the power fo·punish
for contempt - On facts, the two companies in question of
which the petitioner is a promoter, flouted orders passed by
the· SEBI '(FTM), SAT, the High Court and of Supreme Court,
G
with impunity - Facts and information solicited were never
disclosed - Position aclopted by the two companies was
always projected on the basis of unverifiable material - The
t.wb companies remained adamant while frittering away
5n
·
H
574
SUPREME COURT REPORTS
(2014) 12 S.C.R.
A repeated opportunities granted by this Court to comply with
the orders -
The companies adopted a demeanour of
defiance constituting a rebellious behaviour, not amenable to
the rule of Jaw - Since all the efforts to cajole the two
companies and the petitioner were methodically
B circumvented, this Bench started adopting sequentially
harsher means to persuade compliance of this Court's orders,
leading finally to the passing of the impugned order -
Principles of natural justice were followed - There was no bias
- Constitution of India, 1950- Arts. 32 rlw 21, 129 and 142C Securities and Exchange Board of India Act, 1992.
Abuse of Court - Suggestion given to the legislatqre to
formulate a mechanism that· anyone who initiates and
continues a· litigation senselessly, pays for the same -
Legislature to consider introduction of a "Code of Compulsory
D Costs"
E
Dismissing the petition, the Court
HELD:
I.
Should we be hearing this case?
Would it not be better, for another Bench to
hear this case?
F
1; Though it was suggested, that this Bench should
recuse itself from hearing the case, and require it to be
· heard by another compositic;>n, not including either of the
members of this Bench, however, the oath of this office,
required to go ahead with the hearing. If it was the
counsel's posturing antics, aimed at bench-.hunting or
G bench-hopping (or should we say, bench-avoiding), that
.. · would not be allowed. [Para 2 and 11] [592-D; 597-H; 598A]
.
.
2. One of the reasons for retaining the instant petition
H fornearing with ourselves was, that this Bench had heard
SUBRATA ROY SAHARA v. U~ION OF INDIA
575
eminent Senior Counsel engaged by the two companies A
exclusively for over three weeks during the summer
vacation of 2012; had been taken through thousands of
pages of pleadings and had the occasion to watch the
demeanour and defences adopted by the two companies
and the contemnors from time to time, from close 8
quarters. Writing the judgment, had occupied the entire
remaining period of the summer vacation of 2012, as also,
about two months of further time. For any other Bench
to understand the . nuances of the controversy
determined through this Bench's order dated 31.8.2012
(whereby this Court had confirmed the directions earlier C
issued to the two companies in question, to refund the
moneys collected by them from investors, who had
subscribed to their OFCDs, by the SEBI (FTM) and by the
SAT) would require prolonged hearing of the matter.
Months of time, just in the same manner as this Bench D
had taken while passing the order dated 31.8.2012, would
have to be spent again. It was also for the sake of saving
precious time of this· Court, that this Bench decided to
bear the brunt and the rhetoric, of some of the Senior ·
Counsel representing the petitioner. Therefore, it would E
not be better, for another Bench to hear this case. [Para
14] [600-E, G; 601-A-D]
II;
Must judicial orders be obeyed at all
costs?
. F .
Can a judicial order be disregarded, if the
person concerned feels, that the order is
wholly illegal and void?
3. There is no escape from, acceptance, or G
obedience, or compliance of an order passed by the
Supreme Court, which is the final and the highest Court,
in the country. The provisions referred to in the order
dated 4.3.2014 (Articles 129 and 142 of the Constitution
H
576
SUPREME COURT REPORTS
[2014] 12 S.C.R.
A of India) vest in the Supreme Court, the power to
persuade, and if necessary, compel obedience and
observance, of judicial orders. This Court ha·s the
unlimited power (in fact, the sacred obligation), to compel
B
c
obedience and observance of its orders .. [Paras 17, 19]
Ill.
Facts reflecting the demeanour of the two
companies, the petitioner, and other directors
of SIRECL and. SHICL, in the process of
· litigation, leading upto the passing of the order
dated 31.8.2012.
4. The demeanour of defiance, adopted by SIRECL
or SHICL or their promoter and directors, which
constituted a rebellious behaviour, challenging the
· authority .of the SEBI, from investigating into the affairs
D of the two companies, brazenness, flowing from
unfathomable power and authority: The contemnors had
maintained an unreasonable stand throughout the
proceedings before the SEBI, SAT, High Court, and even
.
'
.
E
F
before this Court. [Paras 20, 38] [610-C; 623-F]
IV.
Efforts made by this Court, to cajole the
contemnors, including the petitioner - Mr.
Subrata Roy Sahara, for compliance of the
orders of this Court, dated 31.8.2.012 and
5~ 12.2012
5. Despite affording the contemnors close to 40
hearings, and despite putting them to terms which ought
to have shown them, t.hat leniency would not be extended
forever, the contemnors have remained adamant, and
G steadfast. [Para 54] [640-C-D]
H
V. · Whether there is no provision, whereunder an
order of arrest and detention can be passed for
the execution of a money-decree?
SUBRATA ROY SAHARA v. UNION OF INDIA
577
6. A perusal of Section 51 of the CPC, leaves no room
A
for any doubt, that for the execution of a· decree for
payment of money, an executing Court may order the
arrest and detention of the judgment-debtor. Section 55.
of the CPC lays down the manner and modalities to be
followed, while executing an order of arrest or detention.
B
A perusal of Section 58 of, ·the CPC postulate the
detention of a judgment-debtor for up to six weeks for the
recovery of a meager amount, of less than Rs.5,000/-.
Where the amount is in excess of Rs.5,000/-, the provision
postulates, detention for upto three months. It is · C
apparent, from the provisions of the CPC, that a Court can
order for the arrest and detention of a person, even for
the enforcement of a paltry amount of Rs.2,000/- (and also
for recovery of amounts, in excess thereof). Even under
the provisions of the Cr.P.C. there is an elaborate 0
procedure prescribed, whereunder a person can be
subjected to arrest and detention for the satisfaction of
a fine or compensation (i.e., for the recovery of a financial
liability). [Paras 58, 60] [646-G-H; 647-A-E; 664-E]
VI.
Whether it was imperative for this Court to
E
adopt the procedure prescribed under Section
51 (and other allied provisions) of the CPC?
Whether if the above procedure was not
followed, the impugned order passed by this
Court on 4.3.2014 was rendered void, and as
such, unsustainable in law?
F
7. Even though the provisions of the CPC are
inapplicable to proceedings under the SEBI Act (except
when expressly provided for), yet insofar as the present G
controversy is concerned, yet if an order is passed
keeping in mind the parameters laid down in the CPC, it
would be sufficient to conclude that the rules of natural .
justice were fully complied with. The conditions
H
578
SUPREME COURT REPORTS
[2014] 12 S.C.R.
A contemplated in Section 51 of the CPC as preconditions,
for the arrest and detention of a judgment-debtor for
executing a Court's order, can be demonstrated as having
been duly complied w!th, before'this Court passed the
impugned order dated 04.03.2014. [Para 69] (678-E-H]
B
8. The first situation contemplated by the proviso ·to
Section 51 of the CPC is, when the executing Court
entertains the view, that the judgment-debtor is likely to
abscond or leave the local jurisdiction of the Court, with
C the object of obstructing or delaying the execution of the
decree. Insofar as the instant aspect of the matter is
concerned, it is apparent that this Court actually
entertained the view, that the petitioner was "likely" to
abscond or leave the local limits of the jurisdiction of this
Court, for obstructing or delaying the execution of the
D decree. The first of the· postulated preconditions for
ordering arrest and detention of a judgment-debtor, for
the execution of the liability resting on the shoulders of
the two companies, was therefore clearly made out,
before the impugned order dated 4.3.2014 was passed.
E [Para 70] (679-B-Fl
9. Another alternative pre-condition contemplated in
the proviso to Section 51 of the CPC is, when a judgment.
debtor has the 'means to pay the ·amount of the decree
F (or some substantial part thereof), and yet refuses or
neglects to pay the same. Insofar as the instant aspect
of the matter is concerned, the two concerned companies
could have easily paid the contemplated amounts, by
selling their assets (in terms of their affidavit dated
G 4.1.2012). [Para 71] [679-F-H]
H
10. Yet another precondition contemplated under the
proviso to Section 51 postulates, that if the judgmentdebtor dishonestly transfers, conceals. or removes any
'
part of his property, or commits any act of bad faith in
-'
SUBRATA ROY SAHARA v. UNION .OF INDIA
579
relation to his property, the concerned executing Court A
can enforce a money-decree, by way of arrest and
detention. Since a farcical explanation was tendered by
the two companies in respect of receipt, payment and
transfer of thousands of crores of rupees by way of casti, ·
without reference to any banking transactions B
whatsoever, it was legitimate to infer dishonest transfers,
as well as, bad faith, on behalf of the contemnors.
Therefore, for yet another reason, it was open for this
Court, to order arrest and detention of the contemnors
(including the present petitioner), for enforcement of the C
directions issued by this Court on 31.8.2012 and
5.12.2012. [Para 72] [682-H; 683-A-C]
11. The instant determination should not be
understood to mean, that Section 51 of the CPC is
applicable to the facts and circumstances of this case. D
The instant determination should only be understood to
mean, that the parameters laid down in Section 51 of the
CPC, stood fully satisfied, before the arrest and detention
order dated 4.3.2014 was passed. It is clear, that despite
the petitioner (and the other companies) having means E
to pay, they have unfairly and willfully failed to pay.
[Paras 73, 77] [683-D-E; 690-G]
VII.
Whether the impugned order dated 4.3.2014,
was passed in violation of the rules of natural F
justice?
12. It is not possible to accept, that while passing the
above order, no opportunity was afforded to the
petitioner - Mr. Subrata Roy Sahara. Indeed every
response made by the alleged contemnors, was taken G
into consideration on each occasion. The alleged
contemnors were found ·to be playing tricks with· this
Court. Not only were counsel representing the alleged
contemnors heard from time to time, personal hearing
was also afforded to the directors and Mr. Subrata-Roy H
580
SUPREME COURT REPORTS
[2014) 12 S.C.R.
A
Sahara, the petitioner herein on 4.3.2014. In fact, Mr.
Subrata Roy Sahara, the petitioner herein, was heard
repeatedly to his heart's content, before the order dated
4.3.2014 was passed. For' the reasons recorded
hereinabove, it is not possible to accept the contention
B advanced at the hands of the 'counsel for the petitioner,
that the order dated 4.3.20:14 was passed without
following the rules of natural justice, or that, the above
order violates any of the petitioner's fundamental rights.
[Para 96] [709-F-H; 710-A-B] '
c
VIII. Whether the impugned order dated 4.3.2014, is
vitiated on account of bias?
13. The instant plea of bias, is based on the
petitioner's frustration, arising out of being cornered into
D a situation, wherefrom there is no escape. The assertion,
that this Bench would not be satisfied under any
circumstances,. with the petitioner's arguments and
submissions on merits, is clearly misconceived. The
assertion made by the petitioner, that this Bench had
E · already prejudged the matter, and no relief could be
expected from it, is likewise a total misconstruction of the
proceedings being dealt with. There is no /is pending,
wherein this Bench has to determine tile merits of the
claims raised by the rival parties. In a situation, where rival
F
claims of parties; have to be decided on merits, such a
submission could have possibly been made. On facts,
merits of the claims (and counter-claims) have already
been settled by this Court's order dated 31.8.2012. There
cannot, therefore be a prejudged mind (all that has to be
G decided, has already been adjudged). [Paras 105 and 106]
[720-C-F; 721-C]
14. It is not the case of the petitioner, that this Bench
has any connection ·with either the two companies under
reference, or any other company/firm which constitutes
H
SUBRATA ROY SAHARA v. UNION OF INDIA
581
the Sahara Group. None of the disguised aspersions cast A
by Counsel, would be sufficient to justify the invocation ·
of the maxim, that justice must not actually be done, but
must also appear to be done. Even though our
combination as a Bench, did not exist at the time, when
the present petition was filed, a Special Bench, with the
B
present composition, was constituted by Hon'bie the
Chief Justice, as a matter of his conscious determination.
No litigant, can be permitted to dissuade this Bench, in
discharging the onerous responsibility assigned to it by
Hon'ble the Chief Justice. Since this Bench is no longer C
possessed with any adjudicatory role, insofar as the
controversy on merits is concerned, the principal
allegation of bias itself pales into insignificance. In terms
of this Bench's order dated 31.8.2012, the only gainer on
the other side, is the. Government of India. If the "other 0
side", is the Government of India, there is certainly no
substance in the aspersion cast by the counsel. [Paras
107, 108 and 111] [721-E; 722-A-C, D; 726-G; 727-B]
IX.
A few words. about the defence of redemption
of OFCD's, offered by the two companies:
E
15. Viewed from any angle, there is no substance in
the contention advanced on behalf of the two companies,
that the moneys payable to the investors had been
refunded to them. Accordingly, there is no merit in the
F
prayer, that while making payments in compliance with
this Court's orders dated 31.8.2012 and 5.12.2012, the two
companies were entitled to make deductions of Rs.17,443
crores (insofar as SIRECL is concerned) and Rs.5,442
crores (insofar as SHICL is concerned). Nevertheless, this G
Bench has still retained a safety valve, inasmuch as, the
SEBI has been directed to examine the authenticity of the
documents produced by the two companies, and in case
the SEBI finds, that redemptions have actually been
made, the two companies will be refunded the amounts,
H
582
SUPREME COURT REPO.RTS
[2014] 12 S.C.R.
. A equal to the redemptions found to have been genuinely
·made. [Para 121) [754-H; 755-A-C]
X.
The maintainability of the present petition
16. The instant petition has been styled as a criminal.
B writ petition. The instant petition is not maintainable as
no fresh petition is shown to be maintainable, under the
provisions (Articles 129 and 142 of the Constitution of
India). Moreover, there is neither any jurisdictional error,
nor any error in law has been shown to be made out, from
C the impugned order dated 4.3.2014. [Para 143] [785-H;
786-A-B]
17. Conclusions
a. There is no inerit in the cont1:1ntion advanced on
D behalf of the petitioner, that this Bench should recuse
itself from the hearing of this case. Calculated
psychological offensives and mind games adopted to
seek recusal of Judges, need to be strongly repulsed.
Such tactics are deprecated and a similar approach is
E commended to other Courts, when they experience such
behaviour.
b. Disobedience of orders of a Court strikes at the
very root of the rule of law, on which the judicial system
F rests. Judicial orders are bound to be obeyed at all costs.
Howsoever grave the effect may be, is no answer for
non-compliance of a judicial order. Judicial orders cannot
be permitted to be circumvented. In exercise of contempt
jurisdiction, Courts have the power to enforce compliance
G of judicial orders, and also, the power to punish for
contempt.
c. The facts of this case reveal, that the two
·companies of which the petitioner is a promoter, flouted
orders passed by the SEBI (FTM), SAT, the High Court
H
SUBRATA ROY SAHARA v. UNION OF INDIA
583
and of this Court, with impunity. Facts and information A
solicited were never disclosed. The position adopted by
the two companies was always projected on the basis of
unverifiable material. This Court recorded in its order
dated 31.8.2012, that the factual assertions made on
behalf of the two companies seemed to be totally B
unrealistic and could well be fictitious, concocted and
made up, and also remarked, that the affairs of the two
companies seemed to be doubtful, dubious and
questionable. The above position has remained
unaltered, inasmuch as, no authentic and verifiable c
material sought has ever been furnished by the two
companies. The two companies remained adamant while
frittering away repeated opportunities granted by this
Court to comply with the orders dated 31.8.2012 and
5.12.2012. The companies adopted a demeanour of 0
defiance constituting a rebellious behaviour, not
amenable to the rule of law. ·
d. Efforts made to cajole the two companies and the
petitioner were always stonewalled and brushed off. All
intermediary means to secure compliance of this Court's
E
orders dated 31.8.2012 and 5.12.2012, were evaded and
skirted. Even proposals to secure the payments (as
against, the payment itself) to be made to the investors,
in terms of this Court's orders, were systematically
frustrated. Similar proposals made unilaterally by counsel
F
representing the two companies and the petitioner
himself, turned out to be ploys to sidetrack and derail the
process of law. Such unilateral proposals, were
unilaterally withdrawn. Since all the efforts to cajole the
two companies and the petitioner were methodically G
circumvented, this Bench started adopting sequentially
harsher means to persuade compliance of this Court's
orders dated 31.8.2012 and. 5.12.2012, leading finally to
the passing of the impugned order dated 4.3.2014.
H
•
584
SUPREME COURT REPORTS
[2014] 12 S.C.R.
A
e. The Code of Civil Procedure, 1908, which regulates
civil proceedings in India, expressly contemplates arrest .
and detention for the enforcement of a money decree.
And the Code of Criminal Procedure, 1973, which
regulates criminal proceedings in India, envisages arrest
B and detention as a mean for. enforcing financial liability.
The submission made by the Counsel for the petitioner
to the effect, that execution of a money decree or
enforcement of a financial liability by way of arrest and
detention was a procedure unknown to law, is therefore,
c wholly misconc:;eived.
·
f. The submission made by the counsel for the
. petitioner, that this Court was obliged to comply with the
procedure contemplated under Section 51, and rules 37
and 40 of Order XXI, of the Code of Civil Procedure, 1908,
D before ordering the arrest and detention of the petitioner
(and the other contemnors) is devoid of any merit,·
because Section 51 of the Code of Civil Procedure, 1908
and the other allied provisions referred to above, are not
applicable to actions emanating out of the SEBI Act. So
E also, rule 6 of Order XIII of the Supreme Court Rules,
1966, has no applicability, with reference to the SEBI Act.
Be that as it may, this Court before passing the impugned
order dated 4.3.2014 had immaculately followed the
procedure contemplated under the provisions of the
F Code of Civil Procedure, 1908, as were relied upon by the
counsel for the petitioner, before ordering the petitioner's
(and the other contemnors') arrest and detention.
g. In response to a prayer made by the SEBI (in
G Interlocutory Application nos. ~8 and 69 of 2013 in Civil
Appeal no. 9813 of 2011), inter alia, seeking the arrest and
detention of the petitioner (and two other contemnors),
the petitioner filed a personal reply by way of an affidavit.
The petitioner in his written ·reply raised all possible legal
H
SUBRATA ROY SAHARA v. UNION OF INDIA
585
and factual defences. Different orders were passed from · A
time to time in furtherance of the prayers made in the
aforementioned interlocutory applications, including the
order preventing the petitioner (and the other
contemnors) from leaving the country, as also, the order
restraining the two companies from parting with any
B
movable or immovable property. A number of
opportunities of hearing were given to the counsel
representing the two companies and the contemnors.
Finding the attitude of the contemnors defiant and noncooperative, their personal presence was ordered. The
C
petitioner, Who was directed to be present on 26.2.2014,
did not enter personal appearance. His personal
presence was enforced through non-bailable warrants on
4.3.2014. During the course of their personal presence in
Court, the petitioner and the other contemnors were o
afforded an opportunity of oral hearing. The petitioner
repeatedly addressed this Court on 4.3.2014. Only
thereafter, the impugned order dated 4.3.2014 was
passed. In view of the above facts it is not possible to
accept, that the impugned order was passed without
E
following the rules of natural justice or without affording
the petitioner an opportunity of hearing.
h. The law laid down by this Court in Jaswant Singh
case has been found to be fully applicable to the facts of
this case, particularly the mannerism and demeanour
F
exhibited by the petitioner and some of the counsel.
Recusal of this Bench from the case sought on the
ground Qf bias, has been found to be devoid of any meril
Each and every insinuation levelled by the petitioner and
his Counsel, during the course of hearing, has been
G
considered and rejected on merits.
i. The defence raised by the petitioner, that the two
companies had alrE!ltldy substantially redeemed the
OFCD's, has been examined under two different
H
586
SUPREME COURT REPORTS
[2014] 12 S.C.R.
A perspectives. Firstly, the above defence is unavailable to
the two companies in law, after the same was rejected on
5.12.2012 by a three-Judge Division Bench (in Civil
Appeal no. 8643 of 2012 and Writ Petition (Civil) no. 527
of 2012). Secondly, the said defence has been examined
B from various factual perspectives and has been· found to
be untenable. Sole reliance on general ledger entries
without any other authentication, has been held to be
insufficient proof of the refunds .claimed to have been
made by the two companies to the investors, specially
C because, such cash redemptions have not been affirmed
in the certificate issued by the firm of Chartered
Accountants, which had audited the accounts of the two
companies.
0
j. The submission advanced asserting the
maintainability of the instant petition under the maxim of
ex debito justitiae, is held to be devoid of any merit. The
contention advanced, projecting the maintainability of the
instant petition under Article 32 .read with Article 21 of.the
E Constitution of India, has been found to be unacceptable
in law. The submission advanced, supporting the
maintainability of the instant petition by placing collective
reliance on Articles 129 and 142 of the Constitution of
India, has also been found to be ill-founded. [Para 145]
[786-C-H; 787-A-H; 788-A-H; 789-A-H; 790-A-G]
F
Jolly George Varghese & Anr. v. Bank of Cochin (1980)
2 SCC 360: 1980 (2) SCR 913 - held inapplicable.
Jaswant Singh v. Virender Singh & Ors. 1995 Supp. (1)
G SCC 384: 1994 (5) Suppl. SCR 336 - held applicable.
A.R. Antu/ay v. R.S. Nayak (1988) 2 SCC 602: 1988 (1)
Suppl. SCR 1; Rupa Ashok Hurra v. Ashok Hurra (2002) 4
SCC 388: 2002 (2) SCR 1006; R.K Anand v. Delhi High
Court (2009) 8 SCC 106: 2009 (11) SCR 1026; Naresh
H Sridhar Mirajkar v. State of Maharashtra AIR 1967 SC 1; K.A.
SUBRATA ROY SAHARA v. UNIOf\:I OF INDIA
587
Ansari v. Indian Airlines Ltd. (20.09) 2 SCC 164: 2008 (16) A
SCR 780; Maninderjit Singh Bitta v. Union of India (2012) 1
SCC 273; Supreme Court Bar Association v. Union of India
(1998) 4 SCC 409: 1998 (2) SCR 795; Ku/dip Kaur v.
Surinder Singh (1989) 1 SCC 405: 1988 ( 3 ) Suppl. SCR
762; Poongodi v. Thangave/ (2013) 10 SCC 618: 2013 (9)
B
SCR 862; KA. Abbas H.S.A. v. Sabu Joseph & Anr. Etc.
(2010) 6 SCC 230: 2010 (6 ) SCR 822; P. Ramachandra
Rao v. State of Kamataka (2002) 4 SCC 578; Manak Lal v.
Dr. Prem Chand (1957) SCR 575; Frome United Breweries
Co. v. Bath Justices (1926) AC 586; Rex v. Sussex Justices, c
Ex parte McCarthy (1924) 1 KB 256; Rex v. Essex Justices,
Ex parte Perkins (1927) 2 KB 475; M.S. Ahlawat v. State of
Haryana & Anr. (2000) 1 SCC 278: 1999 (4) Suppl. SCR
160; Rehman Antu/ay v. Union of India (1988) 2 SCC 764;
Naresh Shridhar Mirajkar v. State of Maharashtra AIR 1967 0
SC 1; 1966 SCR 744; Col. Dr. B. Ramachandra Rao v. The
State of Orissa & Ors. (1972) 3 SCC 256; Manubhai Ratilal
Patel v. State of Gujarat (2013) 1 SCC 314: 2012 (8) SCR
993; Jharia S/o Maniya v. State of Rajasthan & Anr. (1983) 4
SCC 7: 1983 (3) SCR 475 and Ranjit Singh v. Union Territory E
of Chandigarh & Anr. (1991) 4 SCC 304: 1991 (3) SCR 742
- referred to.
·
Case Law Reference:
1988 (1) Suppl. SCR 1
referred to
Para 3
F
2002 (2) SCR 1006
referred to
Para 7
2009 (11) SCR 1026
referred to
Para 10
AIR 1967 SC 1
referred to
Para 18
(2009) 2 sec 164
referred to
Para 19
G
(2012) 1 sec 213
referred to
Para 19
1998 (2) SCR 795
referred to
Para 19
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588
SUPREME. COURT REPORTS
[2014] 12 S.C.R.
A
.1988 (3) Suppl. SCR 762
referred to
Para 59
2013 (9) SCR 862
referred to
Para 59
2010 (6) SCR 822
referred to
Para 60
8
(2002) 4 sec 578
referred to
Para 65
1980 (2) SCR 913
held
Para 77
inapplicable
(1957) SCR 575
referred to
Para 101
c
(1926) AC 586
referred to
Para 101
(1924) 1 KB 256
referred to
Para 101
(1927) 2 KB 475.
referred to
Para 101
D
1994 (5) Suppl. SCR 336
held applicable Para 112
1966 SCR 744
referred to
Para 141(i)
(1972) 3 sec 256
I
referred to
Para 141(ii)
1983 (3) SCR 475
~eferred to
Para 141(iii)
E
1991 (3) SCR 742
referred to
Para 141(iv)
2012 (8) SCR 993
referred to·
Para141(v)
CRIMINAL ORIGINAL JURISDICTION: Writ Petition
F (Criminal) NO. 57 of 2014
Under Article 32 of the Constitution of India.
Ram Jethmalani, Dr. Rajiv Dhawan, S. Ganesh, Gautam
Awasthi, Keshav Mohan, Gaurav Kejriwal, Simranjeet Singh,
G Gautam Talukdar, Jatin Pore, Gurpreet S. P ., Sandeep Bajaj,
Ashish Dixitfor the Petitioner.
Mukul Gupta, ASG, Aivind Datar, Pratap Venugopal,
Surekha Raman, Meenakshi Chauhan, P.K. Jha, Anuj Sarma,
H
SUBRATA ROY SAHARA v. UNION OF INDIA
589
Gaurav Nair, Debarshi Bhuyan (for K.J. John & Co.), T. A. Khan,
A
Aseem Swaroop, Suvarna Kashyap, Rishab Kaushik, B.K.
Prasad for the Respondent.
The Judgment of the Court was delivered by
JAGDISH SINGH KHEHAR, J.
I.
Should we be hearing this ~ase?
Would it not be better, for another Bench to
hear this case?
1. In the present writ petition, the petitioner has made the
following prayers:-
"(a)
Declare the order dated 4.3.2014 as void, nullity
B
c
and non-est in the eyes of law;
D
(b)
Declare that the incarceration and the custody of
the petitioner are illegal which should be terminated
forthwith;
(c)
Issue such other writ in the nature of Habeas
E
(corpus) or other writs, order or direction for release
(d)
of the petitioner from the illegal custody.
Pass such further orders as this Hon'ble Court may
deem fit and proper in the facts and circumstances
of the casec"
F
A perusal of the prayers made in the writ petition reveals,
that in sum and substance the petitioner has assailed the order
dated 4.3.2014 passed by us in Contempt Petition (Civil) nos.
412 and 413 of 2012 and Contempt Petition (Civil) no. 260 of G
2013. To understand the exact purport of the prayers made in
the writ petition, it is essential to extract herein the order dated
4.3.2014, which is subject matter of challenge through the
present criminal writ petition:-
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590
SUPREME COURT REPORTS
[2014] 12 S.C.R.
A
"1.
Contemnors are personally present in the Court,
including the fifth responctent, who has been brought
to the Court by the U.P. Police, in due execution of
our non-bailable warrant of arrest.
B
2.
We have heard the Senior Counsel on various
occasions and perused the various documents,
affidavits, etc. We have heard the learned counsel
and contemnors today as well. We are fully
convinced that the contemnors have not complied
c
with our directions contained in the judgment dated
August 31, 2012, as well as orders dated
December 5, 2012 ahd February 25, 2013 passed
in Civil Appeal no. 8643 of 2012 and I.A. no. 67 of
2013 by a three Judge Bench of this Court.
D
3.
Sufficient opportunities have been given !cf the
contemnors to fully comply with those orders and
purge the contempt committed by them but, rather
than availing of the same, they have adopted
various dilatory tactics to delay the implementation
E
of the orders of this Court. Non-compliance of the
orders passed by this Court shakes the very
foundation of our jud.icial system and undermines
the rule of law, which we are bound to honour and
protect. This is essential to maintain faith· and
F
confidence of the people of this country in the
judiciary.
4.
We have found that the contemnors have
maintained an unreasonable stand throughout the
G
proceedings before SEBI, SAT, High Court and
even before this Court. Reports/analysis filed by
SEBI on 18.2.2014 make detailed reference to the
s.ubmissions, documents, etc. furnished by the
contemnors, which indicates that they are filing and
making unacceptable statements and affidavits all
H
through and even in the contempt proceedings.
SUBRATA ROY SAHARA v. UNION OF INDIA
591
[JAGDISH SINGH KHEHAR, J.]
Documents and affidavits produced by the
A
contemnors themselves would apparently falsify
their refund theory and cast serious doubts about
the existence of the so-called investors. All the fact
finding authorities have opined that majority of
investors do ·not exist. Preservation of market
B
integrity is extremely important for economic growth
of this country and for national interest. Maintaining
investors' confidence requires market integrity and
control of market abuse. Market abuse is a serious
financial crime which undermines the very financial c
structure of this country and will make imbalance in
wealth between haves and have nots.
5.
We notice, on this day also, no proposal is
forthcoming to honour the judgment of this Court
dated 31st August, 2012 and the orders passed by
D
this Court on December 05, 2012 and February 25,
2013 by the three Judge Bench. In such
circumstances, in exercise of the powers conferred
under Articles 129 and 142 of the Constitution of
India, we order detention of all the contemnors,
E
except Mrs. Vandana Bhargava (the fourth
respondent) and send them to judicial custody at
Delhi, till the next date of hearing. This concession
is being extended towards the fourth respondent
because she is a woman Director, and "also, to
F
enable the contemnors to be in a position to
propose an acceptable solution for execution of our
orders, by coordinating with the detenues. Mrs.
Vandana Bhargava, who herself is one of the
Directors, is permitted to be in touch with the rest
G
of the contemnors and submit an acceptable
proposal arrived at during their detention, so that
the Court can pass appropriate orders.
6.
List on March 11, 2014 at 2.00 p.m. All the
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A
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592
SUPREME COURT REPORTS
[2014] 12 S.C.R.
contemnors be produced in Court on that date. Mrs.
Vandana Bhargava, the fourth respondent, to
appear on her own. However, liberty is granted for
mentioning the matters for preponement of the date,
if a concrete and acceptable prot>.osal can be ·
offered in the meantime."
2 .. When this matter came up for.hearing for the first time
on 12.3.2014, Mr. Ram Jethmalani, learned Senior Counsel
appearing for the petitioner, sought liberty to make a frank and
candid submission. He told us, that it would be embarrassing
C for him, to canvass the submissions which he is bound to raise
in the matter before us, i.e., before the Bench as it was presently
structured. It was also his submission, that hearing this matter
would also discomfort and embarrass us as well. He therefore
suggested, that we should recuse ourselves from hearing the
D case, and require it to be heard by another composition, not
including either of us.
3. Mr. Arvind Datar, learned Senior Counsel, appearing for
the respondents, vociferously implored us not ·to withdraw
E ourselves from hearing the case. It was his vigorous and
emphatic contention, that the present petition was not
maintainable, either under the provisions of the Constitution of
India, or under any other law.of the land. Inviting the Court's
attention to the heading of the petition, it was submitted, that it
F did not diselose any legal provision, whereunder the present writ
petition had been filed. He submitted, that as per its own
showing (ascertainable from the title of the petition), the present
writ petition had been filed, under the power recognized and
exercised by this Court, in A.R. Antulay v. R.S. Nayak, (1988)
2 sec 602. It was the assertion of learned counsel, that the
G above judgment, has now been clarified by this Court. According
to learned counsel, it has now been settled, that the above
judgment did not fashion or create any such power or
jurisdiction, as is sought to be invoked by the petitioner.
H
SUBRATA ROY SAHARA v. UNION OF INDIA
593
[JAGDISH SINGH KHEHAR, J.]
4. Besides the above purely legal submission, learned
A
Senior Counsel for the respondents equally candidly submitted,
that the filing of this petition was a carefully engineered device,
adopted by the petitioner as a stratagem, to seek our
withdrawal from the matter. In order to emphasise that this
Bench was being arm twisted, learned counsel invited·our
B
attention to the foot of the last page of the petition, i.e., to the
authorship of the petition, just under the prayer clause. The text,
to which our attention was drawn, is set out below:-
"Signed and approved by:-
Mr. Ram Jethmalani, Sr. Adv.
C
Dr. Rajeev Dhawan, Sr. Adv.
Mr. Rakesh Dwivedi, Sr. Adv.
Mr. S. Ganesh, Sr. Adv.
Mr. Ravi Shankar Prasad, Sr. Adv."
According to learned counsel, this is the first petition he
D
has seen in his entire professional career, which is settled by
five Senior Counsel, all of them of recognized eminence:
5. It would be relevant to mention, that when the matter was
taken up for hearing by us, for the first time on 12.3.2014 at
E
2.00 PM, it had been so listed on the directions of Hon'ble the
Chief Justice in furtherance of a "mentioning for listing·, on the
morning of the same day, i.e., 12.3.2014. ·We had therefore,
no occasion to go through the pleadings of the present writ
petition. After having heard submissions of rival counsel noticed
above, we decided not to proceed. with the matter, before
going through the pleadings of the case. We therefore directed
the posting of the case for hearing on the following day, i.e.,
13.3.2014.
F
6. By the next date, we had an opportunity to determine,
G
how exactly the matter was listed before us, as also, to
ascertain whether the pleadings of the present criminal writ
petition incorporated material which would embarrass us, as
suggested by the learned counsel for the petitioner. So far as
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594
SUPREME COURT REPORTS · [2014] 12 S.C.R.
A
the filing and listing of the present petition is concerned, it was
filed by the petitioner in the Registry of this Court on 11.3.2014.
Thereafter, learned counsel for the petitioner, appeared before
the Bench presided over by Hon'ble the Chief Justice, on the
morning of 12.3.2014 to "mention for listing", for the same day.
B
The Court Master of the Bench presided over by Hon'ble the
Chief Justice, recorded,the following note:-
"As directed list today i.e., 12.3.2014, if in order, in the
mentioning list at 2.00 PM, before appropriate Bench."
C
For the concerned Bench before which the matter was to
D
be posted, the noting file of the branch, reads as under:-
"Apprised.
May be listed before the Special Bench comprising
Hon'ble Mr. Justice K.S. Radhakrishnan and Hon'ble Mr.
Justice J.S. Khehar."
The above note was recorded on the directions of Hon'ble
the Chief Justice. A perusal of the above sequence of events
E
reveals, that even though our combination as a Bench did not
exist for 12.3.2014, yet a Special Bench was constituted for
listing the present writ petition, in its pr~sent arrangement: It is .
therefore reasonable to infer, that the present constitution of the
Bench, was a conscious determination of Hon'ble the Chief
F
Justice.
7. Now the embarrassment part. Having gone through the
pleadings of the writ petition we were satisfied, that nothing
expressed therein could be assumed, as would humiliate or
discomfort us by putting us to shame. To modify an earlier order
G passed by us, for a mistake we may have committed, which is
apparent on the face of the record, is a jurisdiction we regularly
exercise under Article 137 of the Constitution of India. Added
to that, it is open to a party to file a curative petition as held by
this Court in Rupa Ashok Hurra v. Ashok Hurra, (2002) 4 SCC
H
SUBRATA ROY SAHARA v. UNION OF INDIA
595
[JAGDISH SINGH KHEHAR, J.]
388. These jurisdictions are regularly exercised by us, when
A
made out, without any embarrassment. Correction of a wrong
order, would never put anyone to shame. Recognition of a
mistake, and its rectification, would certainly not put us to
shame. In our considered view, embarrassment would arise
when the order assailed is actuated by personal and/or
B
extraneous considerations, and the pleadings record such an
accusation. No such allegation was made in the present writ
petition. And therefore, we were fully satisfied that the feeling
entertained by the petitioner, that we would not pass an
appropriate order, if the order impugned dated 4.3.2014 was
C
. found to be partly or fully unjustified, was totaily misplaced.
8. It is therefore, that we informed learned Senior counsel,
that we would hear the matter. It seems that our determination
to hear the matter marked to us by Hon'ble the Chief Justice,
was not palatable to some of the learned counsel for the
D
petitioner. For, Mr. Ram Jethmalani, learned Senior Counsel,
was now more forthright. He told us, that we should not hear
the matter, because "his clienf' had apprehensions· of prejudice.
He would, however, not spell out the basis for such
apprehension. Dr.