SC seeks Maharashtra govt’s response on Sahara’s Versova land sale eligibility

New Delhi: The Supreme Court on Wednesday sought a response from the Maharashtra government on the environmental status of debt-ridden Sahara Group’s 106-acre Versova land in Mumbai. The classification of the asset as a mangrove forest could impact the land’s eligibility for sale through a bidding process.

A bench comprising Chief Justice Sanjiv Khanna and justices M.M. Sundresh and Bela M. Trivedi directed the Maharashtra state chief secretary to file an affidavit in 15 days.

The directive follows concerns raised by the Securities and Exchange Board of India (Sebi), which informed the court that, according to land records, the Versova property falls under mangrove forest regulations.

Sebi is seeking to recover ₹10,000 crore dues from Sahara by selling the land.

The court also instructed Sahara India Commercial Corp., the entity that owns the land, to discuss ways to maximize its commercial value with real estate experts and Sebii officials.

The court has scheduled the next hearing for 2 April.

In January, the Supreme Court had directed Sebi to evaluate proposals from Oberoi Realty and Valor Realty (formerly DB Realty) for developing the Versova land. Both bidders were required to deposit ₹1,000 crore each with the court.

During Wednesday’s hearing, Oberoi Realty confirmed that it had deposited the amount, while Valor Realty presented a demand draft for submission.

However, the court decided not to examine the bids at this stage and ordered the return of Oberoi Realty’s ₹1,000 crore deposit for now.

Senior advocate Kapil Sibal, appearing for Sahara, informed the court that they had received ₹8,000 crore joint venture offer from a third party. However, he did not disclose the name of the party. 

In September 2023, the Supreme Court allowed Sahara to form a joint venture to develop the Versova land, with the ₹10,000 crore proceeds to be deposited in Sebi’s Sahara refund account for investor repayments.

The court also permitted Sahara to pursue joint ventures for other properties, including Aamby Valley, but clarified that any proceeds must be deposited in the Sebi-Sahara refund account, and any sale below 10% of the circle rate would require court approval.

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Decade-long legal battle

Sahara Group’s legal troubles date back to 2010 when Sebi barred its chairman, Subrata Roy, and his firms from raising funds through optionally fully convertible debentures (OFCDs) over regulatory violations.

In 2012, the Supreme Court directed Sahara to refund ₹25,000 crore to investors with 15% annual interest. As of September 2020, Sahara had deposited ₹15,455.70 crore, which Sebi invested in fixed deposits. With interest, the refund account balance stood at ₹22,589.01 crore. However, Sebi maintains that Sahara still owes ₹10,325.62 crore in principal, accusing the group of gross violation of court orders.

In 2014, the Supreme Court ordered Sahara to disclose details of its OFCD schemes and refund investors. Roy was arrested and sent to Tihar Jail for non-compliance. He was released on parole in 2016 but remained under legal scrutiny. 

In November 2023, Roy passed away at a private hospital in Mumbai after a prolonged illness.