"It would, besides everything else, reduce frivolous litigation. When the litigating party understands that it would have to compensate the party which succeeds, unnecessary litigation will be substantially reduced."
New Delhi, May 6 - The Supreme Court Tuesday rejected Sahara chief Subrata Roy's plea challenging its March 4 order sending him to judicial custody for not complying with the verdict to return investors' money routed through SEBI.

Roy and two Sahara directors Ashok Roy Choudhary and Ravi Shankar Dubey were sent to judicial custody for failure of Sahara Group's companies SIRECL and SHICL to comply with the court's order to return Rs.24,000 crore collected from investors through optionally fully convertible debentures -.

Of the sum ordered to be returned, Sahara deposited Rs.5,210 crore with the Securities and Exchange Board of India in December 2012.

Roy will continue to remain in custody as the court has asked his counsel to make a revised proposal to return investors' money to secure his release.

Holding there was no merit in Roy's plea and same is dismissed, a bench of Justice K.S. Radhakrishnan and Justice Jagdish Singh Khehar in their judgment said: Disobedience of orders of a court strikes at the very root of the rule of law, on which the judicial system rests. Judicial orders are bound to be obeyed at all costs.

Howsoever grave the effect may be that is no answer for non-compliance of a judicial order. Judicial orders cannot be permitted to be circumvented, said Justice Khehar speaking for the bench.

Rejecting Roy's contention that Justice Radhakrishnan and Justice Khehar should recuse from hearing his plea, the court said: Calculated psychological offensives and mind games adopted to seek recusal of judges need to be strongly repulsed. We deprecate such tactics and commend a similar approach to other courts, when they experience such behaviour.

Addressing Roy's contention that the court had no power to send him to judicial custody for non-compliance of its order, the bench said: In exercise of contempt jurisdiction, courts have the power to enforce compliance of judicial orders, and also, the power to punish for contempt.

Holding that Sahara India Real Estate Corp Ltd. - and Sahara Housing Investment Corp. Ltd. - promoted by Roy had flouted the orders of SEBI -, SEBI Appelate Tribunal, the high court and that of apex court with impunity, the court referred to its Aug 31, 2012, judgment where it had said that the factual assertions made on behalf of the two companies seemed to be totally unrealistic and could well be fictitious, concocted and made-up.

Stressing that the position taken in the Aug 31, 2012, judgment remained unaltered, the court Tuesday said: The two companies remained adamant while frittering away repeated opportunities granted by this court to comply with the orders dated Aug 31 and Dec 5, 2012. The companies adopted a demeanour of defiance constituting a rebellious behaviour, not amenable to the rule of law.

The court also brushed aside as devoid of merit the contention that no procedure was followed and Roy was not given opportunity of being heard before he was sent to judicial custody, saying it immaculately followed the procedure under provisions of the Code of Civil Procedure, 1908.

Recording its repeated efforts to secure compliance of its orders, the court said that during the hearing March 4, Roy and two other directors were afforded an opportunity of oral hearing and Roy repeatedly addressed the court before his detention order was passed.

Referring to the time-consuming and frivolous litigation that this case saw even after the final order was passed, the court said: Even after the matter had concluded, after the controversy had attained finality, the judicial process is still being abused for close to two years. A conscious effort on the part of the legislature in this behalf, would serve several purposes.

It would, besides everything else, reduce frivolous litigation. When the litigating party understands that it would have to compensate the party which succeeds, unnecessary litigation will be substantially reduced.

At the end of the day, court time lost is a direct loss to the nation. It is about time that the legislature should evolve ways and means to curtail this unmindful activity. We are sure that an eventual determination, one way or the other, would be in the best interest of this country, as also its countrymen, the court said.


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