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Delhi HC refuses to let Sahara, JVG, Kuber have their way

The Delhi high court on Friday refused to revoke the order restraining certain companies of the Sahara, JVG and Kuber groups from disposing of their assets, except in the normal course of business.

However, it clarified that the order did not cast any reflection on any of the companies.

Justice Anil Dev Singh declined to accept the application moved by the Sahara group for lifting the stay, and directed it to file its reply within two weeks. The stay order would continue till the next date of hearing on October 14.

Sahara had in its application stated that it was ready to constitute a cell to address the grievances of its investors.

The court was hearing a petition filed by the investors of these companies seeking a Central Bureau of Investigation inquiry into the alleged 'fraud' committed by non-banking financial companies and rural non-banking companies to swindle billions of rupees from them.

The judge had on August 13 passed the restrain order while issuing notices to the Reserve Bank of India governor, the finance ministry, Securities and Exchange Board of India, Company Law Board and 40 others.

The RBI on Friday filed a provisional status report, as directed by the court, regarding the financial activities of the non-banking financial firms, including those of the Sahara, JVG and Kuber groups.

Finding the information made available in the report as the status before the court order, the judge directed the RBI to put in an affidavit within three weeks placing the latest financial status of the companies.

Regarding Sahara Airlines, which did not fall under the RBI, the court ordered the SEBI to place the status report within two weeks.

The petitioners had alleged that the Sahara Airlines had issued bonds which were not under its power. They also wanted to ascertain whether the SEBI had cleared the bonds.

The judge had in his August 13 order also asked for the names of the managing directors or partners of the JVG Finance Ltd, JVG Departmental Stores Ltd, Hoffland Finance Ltd, Hoffland Investments Ltd, Sahara India Airlines, Sahara India Services and Investments Ltd, Sahara India Financial Corporation Ltd, Sahara India Commercial Corporation Ltd, Asia Television Network Ltd, Arihant Credit Capital Ltd, Crystal Credits Corporation Ltd, JVG Investments, Rapti Growth Fund Ltd, Krishi Export Commercial Corporation Ltd and Kuber Mutual Benefits Ltd.

The court had directed the companies not to dispose of or transfer their assets except in the normal course of business.

The judge had taken a very serious view of the RBI, SEBI and Company Law Board allowing the NBFCs and RNBCs to carry out 'fraud' financial activities without any check.

"When investors are losing money, why is the RBI not keeping a check on banking corporations, which are required to keep some money in the bank as security?'' the judge asked the RBI counsel.

Among the others named in the petition are the secretaries in the department of company affairs and the ministry of law and company affairs, the chairman of the Central Board of Direct Taxes, the Commissioner of Income Tax, the Delhi Police Commissioner, the CBI director, the Union Cabinet secretary, the chief secretaries of Madhya Pradesh, Delhi and Uttar Pradesh, the secretary of the Monopolies and Restrictive Trade Practices Commission, Institute of Chartered Accountants of India and NBFCs, RNBCs and their representatives.

UNI