Institute of Legal and Management Studies

At the request of the Union government, the Supreme Court today permitted fresh disbursal of Rs.5,000 crores out of the funds deposited by the Sahara group with the Securities and Exchange Board of India (SEBI) to repay the dues of the depositors of the Sahara Group of Cooperative Societies.

A bench of Justices Surya Kant and Joymalya Bagchi passed the order, after hearing Solicitor General Tushar Mehta. It further extended till December 31, 2026 the time period for disbursal to the investors of amounts released pursuant to a March 2023 order, as well as today's order.

Notably, a counsel appeared for SEBI at a later stage and requested time till Monday to obtain instructions. However, the bench clarified that it has not passed a consent order. The counsel prayed that the order may be kept on hold till Monday, but the bench was not convinced.

In passing the order, the bench observed that an amount of Rs.5000 crores was similarly directed to be released by a coordinate bench of the Court in March, 2023 order, after noting that a total of Rs. 24,979.67 crores were lying unutilized in the “Sahara-SEBI Refund Account”.

In this backdrop, it ordered that fresh amount of Rs. 5000 crores shall be transferred from the SEBI-Sahara Refund Account to the Central Registrar of Cooperative Societies (who, in turn, shall disburse the same against legitimate dues of depositors). The transfer shall be effected within 1 week under the supervision of former Supreme Court judge-Justice R Subhash Reddy and in the manner as outlined in the Court's March, 2023 order.

The direction was passed on an application filed by the Centre in a PIL initiated by a person named Pinak Pani Mohanty, who sought a direction for payment to the depositors who invested in several chit fund companies and Sahara credit firms.

The application mentioned that the process of disbursal of earlier released Rs.5000 crores was carried out through web portals for genuine investors to file their claims and according to Standard Operating Procedures developed for identification, verification and disbursal of claims. The entire exercise was undertaken under the supervision of Justice Reddy (assisted by Senior Advocate Gaurav Agarwal, who was appointed as Amicus).

The application further stated that the amount released earlier could not be disbursed to depositors within the prescribed timelines and interest was accrued thereupon. As per the averments, total amount claimed so far came to Rs.1,13,504.124 crores (by approx. 5.43 investors). Refunds have been issued to 26,25,090 genuine depositors totaling to Rs.5,053.01 crores. 13,34,994 more investors have filed claims on the portal, which are at different stages of scrutiny. Total claim by these investors comes to approx. Rs.27,849.95 crores. It is estimated that at the current rate, approx. 32 lakh more investors may file claim by December 2026.

Case Title: Pinak Pani Mohanty v. Union of India, WRIT PETITION (C) No. 191/2022