Supreme Court Seeks Maharashtra Govt's Response On Whether Sahara's Versova Plot Is Within Mangrove Forest

While hearing the SEBI v. Sahara matter, the Supreme Court on Wednesday (February 12) issued notice to the Department of Forest and Urban Development and the Chief Secretary, State of Maharashtra to give clarity on whether developing Sahara's Vervosa Plot to pay back its creditors would end up intruding into reserved mangrove forest area. 

The bench of CJI Sanjiv Khanna, Justices MM Sundresh and Bela Trivedi was hearing a batch of contempt petitions against Sahara Group of Companies who were in violation of the Court's 2012 order.

On the last hearing, the Court directed the Security Exchange Board of India (SEBI) to examine Sahara Group's Joint Venture Agreement with Oberoi Realty proposed for developing Sahara's Versova land in Mumbai and file a sealed cover response before the Court. The proposed developer for the project was also ordered to deposit Rs.1000 Crores with the Court. 

Today, the bench was informed by Sr Advocate Shekhar Naphde (amicus) that as per a letter dated 28.7 1997 by the collector of Mumbai Suburban District, the Versova plot of Sahara would come under the Mangroves forest region of the State.

Considering this, the bench issued notice to the State Ministry of Forest and Urban Development and the Chief Secretary, State of Maharashtra to clarify the Court on the present status of the Versova plot. 

During the hearing, Justice Sundresh also mentioned that a challenge to the Bombay High Court's 2018 order on directions for the protection of mangroves all over Maharashtra was pending before the Apex Court. 

Notably, in 2018 the High Court bench of Justice AS Oka and RI Chagla held that there can be no construction activity within 50 m of any mangrove area as all mangrove land will fall in Coastal Regulation Zone-I category as per both the CRZ notifications of 1991 and 2011. In 2023, this decision was challenged by the Maharashtra Maritime Board before the Top Court, seeking permission to do construction within 50 meters of mangroves. 

Bench Refuses To Consider Bid Proposals; Directs SEBI Officials To Hold Joint Meeting With Sahara and Real Estate Consultants

The Court ordered the following direction to ensure viable options to monetize the Vervosa property: 

"We also deem it appropriate to direct that two officers Sahara, India Commercial Corporation, two officers of SEBI along with two property consultants nominated by SEBI from Mumbai will have a joint meeting to explore the terms and conditions on which the Versova plot can be monetized to get maximum value." 

The Bench also refused to look into the proposals made by other bidders willing to invest in Sahara and acquire a stake instead of entering into a JV agreement. The Court noted that such an issue is related to commercial dealing and would be appropriate that the issue is first resolved by the officers of SEBI along with the property consultants. The bench clarified that in such a discussion, SICCL will also be entitled to participate. 

The bench also directed that the deposited amount of Rs. 1000 Crores of Oberoi Realty will be returned in the time being along with any interest which may have been accrued. 

The other interested bidders who had moved intervention applications were permitted to file their suggestions or comments which may help in ascertaining the bench of arriving at a proper method for utilizing the land 

Background

In 2012, the Supreme Court ordered two Sahara companies to refund Rs. 25,000 crores (approx.), along with 15% interest, to over two crore small investors who invested in their debentures between 2008-2011. The deposit was directed to be made with SEBI. When the directed amount remained outstanding, pleas were filed against Sahara, alleging contempt.

Notably, the Court on September 5, 2024, directed Sahara Group to deposit Rs 1000 crores in a separate escrow account within 15 days and also allowed the cash-strapped company to enter into joint venture for developing its properties at Versova, Mumbai in order to raise the sum of Rs 10,000 crores due to be paid to its lenders.

The bench also ordered that development projects would be executed only upon the approval of the Joint Venture agreements by the Court. In case the agreement was not filed within 15 days, the Versova property would be ordered to be sold on 'as is where is' basis.

This was subsequent to its earlier direction on September 3, 2024, where the Court called on the conglomerate to place before it a scheme as to how it plans to deposit the outstanding sum in the Sahara-SEBI Refund Account. The Court also asked the company to give a list of its unencumbered properties.

Case Details: SECURITIES AND EXCHANGE BOARD OF INDIA Versus SUBRATA ROY SAHARA AND ORS. AND ORS. CONMT.PET.(C) No. 001820 - 001822 / 2017 and Connected matters.

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