SC appoints official receiver to manage Aamby Valley

Topics Supreme Court

The Supreme Court on Thursday ordered the official receiver at the Bombay High Court to take over the management of affairs of luxury township Aamby Valley (near Pune), amid fear of encroachment and the possibility of not finding any bidder for it.

The official receiver is different from the official liquidator, earlier appointed by the court to conduct the auction of the township. The move will end control and possession of the Sahara group over the Rs 37,000-crore property, spread across 43 sq km off Lonavla, on the Mumbai-Pune Highway. 

In an order, the bench of Chief Justice Dipak Misra and judges Ranjan Gogoi and A K Sikri said: “The duty of the receiver is to see the valuation is not reduced and the property is maintained.”

The Court had ordered the township’s auction earlier this year, after the group failed to pay the Securities and Exchange Board of India (Sebi) sums due by the court’s 2012 order. The SC had originally ordered Sahara India Real Estate and Sahara Housing Invest Corp to refund Rs 24,029 crore raised from 29.6 million investors, along with an interest of 15 per cent. Sahara initially repaid only Rs 5,120 crore and claimed the rest was refunded to the investors directly. The court did not buy this argument and sent group chief Subrata Roy to Delhi’s Tihar jail in 2014. 

Roy was released on parole in 2016 and some installments have been paid. However, the delay has caused total dues to balloon to over Rs 40,000 crore, with accruing interest. The court ordered the auction of Aamby Valley as the final option to end the proceedings that have dragged on for seven years.

On Thursday, on reports of obstruction by the group, the chief justice said, “if the man has to be sent to jail” to end the matter, it would happen. Mukul Rohatgi, appearing for the Sahara group, objected to the proposal to appoint a receiver, saying there was no such move at the time the auction was ordered initially and a separate application had to be filed. Rohatgi added the group was operating a school, hospital and other facilities. Misra said, “Why are you in? You are in means you are obstructing.”

The bench seemed convinced at the recommendations of amicus curiae Shekhar Naphade and Sebi counsel Arvind Datar. Naphade said there were complaints from some of the township’s residents that their water supply had been cut, and there were concerns over day-to-day running of the place. 

The bench also empowered the Bombay HC to take whatever steps were necessary for orderly conduct of the auction. It also released a sum of Rs 84 lakh for advertisement of a new auction. The second attempt to auction the property is likely to commence soon and is likely to take eight weeks. The bench posted the matter for early February and asked the official liquidator, Venod Sharma, to ensure the auction was completed. Sharma replied that the the size and scale of the operation was unprecedented and he was putting in his best efforts. The first auction got a lukewarm response; Sebi claimed the Sahara group had obstructed the process. 

Meanwhile United Capital, a real estate fund based in New York, said it wanted to buy the group’s stake in New York-based luxury hotels Plaza and Dream Downtown. The fund’s lawyer said it was ready to pay $793 million (about Rs 5,000 crore) for the assets and asked the court to consider the application. But, Rohatgi said the group was not inclined, since the Aamby Valley auction would take care of the dues. The bench also observed that since the Aamby Valley auction is currently on, the group could not be forced to sell other assets if it did not intend to.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel