Sahara-Adani property deal faces delay as govt seeks time in Supreme Court

The Union government has sought more time to file its response to a plea by financially-stressed Sahara India Commercial Corporation Ltd (SICCL), which is seeking the Supreme Court's nod to sell 88 properties, including Aamby Valley in Maharashtra and Sahara Shaher in Lucknow, to Adani Properties Pvt. Ltd in a ₹12,000-crore deal, and pay off its debts.

Solicitor general Tushar Mehta, appearing for the Centre, made the request on Monday before a bench of Chief Justice of India B.R. Gavai and justices Surya Kant and M.M. Sundresh. The court granted the request and adjourned the matter for six weeks. Mehta also asked that the ministry of finance and the ministry of cooperation be added as parties to the proceedings, pointing to the involvement of several cooperative societies that had invested in, or were financially liked to Sahara group entities.

The SC bench also postponed the hearing of applications filed by Sahara employees seeking release of their pending salaries. Senior advocate Shekhar Naphade, the amicus curiae, informed the court that he continues to receive claims over properties that Sahara has not disclosed. He suggested that the company be directed to publish a comprehensive list of its assets on its website. The court, however, did not pass any order on this.

At a previous hearing on 14 October, the apex court had asked the Centre and market regulator Securities and Exchange Board of India (Sebi) to file their response to Sahara’s applications. It also directed all claimants to present their claims before the amicus, who was asked to prepare a chart classifying the properties as disputed, undisputed, or unclear in terms of ownership. Sahara was told to examine the claims filed by its employees, while the Centre, Sebi and the amicus were instructed to submit their replies.

In its plea, Sahara said Sebi has not been able to sell most of its attached properties despite several attempts, and that the group’s ability to manage or dispose of assets has weakened since the death of its founder, Subrata Roy, in 2023. With many properties under restraint orders, the group has sought the court’s permission to proceed with the sales so that the funds can be used to clear its liabilities. Sahara has already signed a term sheet with Adani Properties for the proposed transaction.

During the October 14 hearing, Sahara told the Supreme Court that Adani Properties had agreed to pay about ₹12,000 crore for the 88 assets under the term sheet executed between the parties.

During that hearing, senior advocate Mukul Rohatgi, appearing for Adani Properties, said the company was willing to acquire all 88 properties in one go, even if some assets were subject to disputes, in order to avoid prolonged litigation.

The list of assets includes Aamby Valley City, Hotel Sahara Star in Mumbai, Sahara Shaher and Sahara Ganj in Lucknow, along with several large land parcels across states. Sahara has said that all sale proceeds will be deposited in the Sebi–Sahara Refund Account, as directed by the Supreme Court, to repay investors of its optionally fully convertible debentures (OFCDs) - hybrid financial instruments that combine the features of both equity and debt, and give the investors the option to convert them into shares or hold them till maturity.

A long-running dispute

The case is part of the continuing Sahara–Sebi litigation, which began more than a decade ago. In 2012, the Supreme Court ordered Sahara entities to refund over ₹24,000 crore illegally raised through OFCDs, with a 15% annual interest. Sahara says it has deposited around ₹16,000 crore so far, while Sebi maintains that more than ₹9,000 crore is still outstanding.

In September, the court allowed the release of ₹5,000 crore from the refund account to depositors, including investors in Sahara Group cooperative societies.

The Supreme Court has, over the years, permitted Sahara to sell assets to raise funds for repayments, subject to the condition that the sale price is not less than 90% of market value of the asset involved.

Sahara’s legal troubles date back to 2010, when Sebi barred Subrata Roy and his companies from raising funds through OFCDs, citing regulatory violations. Sahara initially obtained interim relief from the Allahabad High Court, but the Delhi High Court later issued a warrant against Roy over investor complaints. The Supreme Court eventually directed Sahara to disclose the details of its OFCD schemes and refund investors with interest.

Roy was arrested in 2014 for non-compliance and sent to Tihar Jail in Delhi He was released on parole in 2016, but remained under scrutiny until his death in November 2023 after a prolonged illness.