Supreme Court rejects Sahara's refund proposal as 'dishonest'

Sahara told the top court this morning that it will pay back investors over the next 15 months, with an initial deposit of Rs 2,500 crore in cash within three working days. The balance will be paid in installments every three months, the group told the court.

"It is a big insult. Don't make us assemble if you don't have a better offer. This is a dishonest proposal," the court said.

Sahara had also asked for Subrata Roy's release along with two other directors, saying a delay would make it difficult for the group to arrange funds. The court rejected it, saying, "He is in jail for only two days, and for one-and-a-half years he was out and you must pay."

The court had said the 65-year-old Sahara boss will remain in jail till the next hearing on March 11, though he could ask for an earlier hearing if he was ready with "a concrete proposal." (Read: What may have led to the Sahara chief's arrest)

The conglomerate, which is the country's biggest private-sector employer, has pegged the amount due at Rs 17,500 crore. It told the court it will pay this money by selling the properties whose documents are with market regulator SEBI or the Securities and Exchange Board of India.

But SEBI, which is examining Sahara's refund proposal under the court's directive, has contested that figure, pegging it at Rs 37,000 crore instead.

The court had, on Tuesday, rejected Sahara's offer of a bank guarantee for Rs 22,000 crore, while it sold property assets that it claims are worth nearly that much, an estimate rejected by SEBI as vastly exaggerated.

In 2012, the group was ordered by court to repay nearly Rs 24,000 crore to three million investors, many of them rural savers.

Sahara said it had repaid most of the money, and its remaining liability was less than the Rs 5,000 crore it has deposited with SEBI. But the company has been cagey about revealing how it funded the repayments it has allegedly made, and SEBI says the list of recipients lacks credibility.

Sahara's financial troubles began in 2008 when it shut operations as India's biggest non-bank deposit-taking firm on orders of the court, which was worried about whether its schemes were sound.