New Delhi: The amicus in the Sahara-SEBI case has flagged his objections to the Sahara India Commercial Corporation Limited’s plea for permission to sell its 88 properties, including Aamby Valley in Maharashtra and Sahara Shahar in Lucknow, to Adani Properties Private Limited. The court has asked both the Centre and Sahara to file a response to the objections within six weeks.
In a detailed report running to 65 pages and his 10-page response to the application, senior advocate Shekhar Naphade disclosed that 63 properties mentioned in the list are subject to attachment orders by the Income-Tax department, status of which is not known at present.
The report was given to the Supreme Court Monday when a three-judge bench led by Chief Justice B.R. Gavai took up Sahara’s application for a hearing. It was prepared following SC’s order of 14 October, asking the senior advocate to assist the court in the matter.
According to Naphade’s assessment, presented in his report, many of Sahara’s properties are either encumbered, subject of dispute or seized under attachment proceedings.
To clear sale of such properties, the senior advocate pointed out, would amount to conferring a clean title in favour of the proposed purchaser.
Naphade’s note discouraged the top court from intervening in the matter under Article 142, in view of the pending third-party claims over properties of Sahara. Article 142 of the Constitution allows SC to invoke its extraordinary jurisdiction to deliver justice. According to the senior advocate, the claims have to be settled by the jurisdictional court or tribunal and not the SC.
Further, some of Sahara’s properties are part of proceedings under the anti-money laundering law. These attachment orders can only be passed upon completion of the proceedings under the law and not by the direction of the top court, the senior advocate advised.
Besides, he pointed out that 20 of the 88 properties that Sahara is keen to sell to Adani are under dispute, some of which are pending litigation in different courts. There are 77 properties where title of the land is unclear.
Though Sahara has filed a list of properties with clean and clear titles, Naphade’s report submitted that the amicus was not in a position to ascertain the correctness of Sahara’s claims.
However, he disclosed that he has received claims and objections in respect to at least 27 properties and highlighted them in his report. Ambiguity with regard to the description, address and area with respect to 15 properties is also noted in the report.
Besides, the amicus highlighted, there is no clarity on whether properties are wholly owned subsidiaries of Sahara, or are partially owned by the company and in case of the second situation whether Sahara’s share is demarcated to be sold independently.
So far, the amicus has been able to identify 29 such properties, based on the claims made by third parties. Out of them, the amicus could confirm part ownership of 12 properties. However, his report said, the identity of these part owners is unknown and their relationship with Sahara is not clear.
Naphade’s report also recalled a public notice that was issued by Sahara, inviting objections to their title with respect to a few properties. As per his report, responses were received in five properties, which Sahara has claimed before the top court to have clean and clear titles. The company has not revealed whether the objections were resolved or not, pointed out the report.
On Monday, Naphade made brief submissions during the hearing. He told the bench about his preliminary findings and suggested the court direct SEBI to issue a public notice regarding Sahara’s proposal to sell its properties to Sahara.
On the request of the Centre, represented by solicitor general Tushar Mehta, and Sahara, which senior advocate Kapil Sibal represented, the court posted the matter after six weeks. Within this period, it said, both Centre and Sahara will file their response to Naphade’s report.
“It is submitted that most of the properties that Sahara is proposing to sell are part of projects that have been in operation for a significant period of time and it is reasonable to assume that Sahara has created third party interests and may have entered into sale, agreement to sell or mortgage etc. and have hence been classified in Category C (properties which are under the shadow of doubt),” Naphade stated in his report.
For example Sahara’s prime property—Aamby Valley—has been cited in the category of free and clean title. But Naphade’s report marked it as a disputed property owing to the Enforcement Directorate’s attachment order and litigation by third parties.
Similarly, Sahara Shahar and Sahara Bazar in Lucknow fall within the disputed category owing to a pending court case. The amicus report also raises doubts over Hotel Sahara Star in Mumbai. Though it has been shown as an unencumbered property, Naphade’s report said the consortium of banks claim that Sahara has executed a mortgage in respect to this property.
The report also recalled SC’s 11 July 2016 order, which restrained Sahara from selling its properties at a rate not less than 90 percent of the circle rate. To sell it at a lower price, the order gave Sahara liberty to seek court’s permission. The price recovered from these sales would be deposited in the SEBI-Sahara refund account, the order said,
Naphade’s note said on the basis of the claims received by the amicus, it appeared that Sahara had entered into sale agreements, creating third-party rights in its properties. But it is not clear whether the sale considerations were as per the SC orders of July 2016 and if money had been deposited in the refund account.
The amicus report also highlighted that the property number 88 in Sahara’s list simply said “other land parcels”. No information was provided to Naphade, he said.
More importantly, the senior advocate said that claimants have written to him, seeking their right over some other properties of Sahara that have not been disclosed by the company before the SC. The amicus has given examples of such claims in his report, raising scepticism over the disclosure made by Sahara in its application.
(Edited by Viny Mishra)