The Supreme Court on Monday directed the Reserve Bank to give a fresh hearing to Sahara India Financial Corporation Ltd, while keeping in abeyance the action against the company including the ban on it from taking fresh deposits.
Disposing an appeal filed by RBI against the Allahabad High Court's interim stay on the action it took against SIFCL, the Supreme Court said: "Since the entire matter is disposed by this court there will be no need for the High Court to deal with it". Accordingly, a bench comprising Justices Arijit Pasayat and P P Naolekar said SIFCL will now appear before the RBI on June 12 for a personal hearing.
"Till the matter is disposed afresh by RBI, its order of June 4 will not be given effect and at the same time interim protection granted to Sahara
At the outset, the Bench said the nature of the controversy involved in the matter warranted that another opportunity be given to the para-banking company to respond elaborately to the show cause notice issued by RBI.
The court said it would be open for the SIFCL to appear before the RBI with all materials to substantiate the reply given by it to the show cause notice and the authorities will consider them before passing fresh order.
"We are of the view that in view of peculiar facts involved in the matter, RBI should give opportunity to SIFCL for personal hearing," the Bench said. RBI had approached the Supreme Court on June 6, challenging the Allahabad High Court stay on its order banning
Senior advocate Mukul Rohatgi, appearing for Sahara, contended that it was not given a fair opportunity to explain its case on the show cause notice issued by the RBI.
However, senior advocate T R Andhyarujina, appearing for RBI, said that ample opportunity was granted to the para-banking company to present its case and it was in fact the High Court, which without giving chance to the apex bank, passed an interim order on the issue that was tantamount to a final relief sought by SIFCL.
He said the issue involved money running into crores of rupees of the people. Rohatgi countered him, saying that there was no complaint from any of the investors.
The Bench cautioned them against going into the merits of the case. "We are not going into the merits of the case," the bench said and added that "till SIFCL is heard afresh, the RBI will not implement its order... If we look into the facts much can be said." When Rohatgi was submitting about the company's business, the Bench interrupted him, and said.
