Supreme Court allows fresh release of Rs 5,000 crore from Sebi-Sahara fund for depositors; payment deadline extended to Dec 2026

The direction came in response to an application filed by the Union government in a PIL initiated by Pinak Pani Mohanty, who had sought directions for payment to depositors invested in Sahara credit firms and chit fund companies.

The Supreme Court on Friday permitted the fresh disbursal of Rs 5,000 crores from the funds deposited by the Sahara Group with the Securities and Exchange Board of India (SEBI) to repay dues of depositors in Sahara Group of Cooperative Societies, reported LiveLaw.

A bench of Justices Surya Kant and Joymalya Bagchi passed the order after hearing Solicitor General Tushar Mehta, also extending the time for release of payments to investors till December 31, 2026, covering amounts released under both the March 2023 order and the latest direction.

According to the report, counsel for SEBI appeared later in the hearing and sought time until Monday to obtain instructions. The bench clarified that the order was not a consent order, and when the counsel prayed for the order to be kept on hold till then, the court was not convinced.

In making its decision, the bench referred to the March 2023 order, when a coordinate bench had similarly directed release of Rs 5,000 crores, noting that Rs 24,979.67 crores were lying unutilized in the “Sahara-SEBI Refund Account.”

Against this backdrop, the court ordered that a fresh sum of Rs 5,000 crores be transferred from the SEBI-Sahara Refund Account to the Central Registrar of Cooperative Societies, who shall disburse the money against the legitimate dues of depositors, the report said. The transfer is to be completed within one week, under the supervision of former Supreme Court judge Justice R Subhash Reddy and in accordance with the modalities outlined in the March 2023 order.

The direction came in response to an application filed by the Union government in a PIL initiated by Pinak Pani Mohanty, who had sought directions for payment to depositors invested in Sahara credit firms and chit fund companies. As per the report, the application highlighted that the disbursal of the previously released Rs 5,000 crores was facilitated through web portals where genuine investors could file claims, using Standard Operating Procedures for identification, verification, and payment. This exercise was carried out under the supervision of Justice Reddy, assisted by Senior Advocate Gaurav Agarwal as Amicus Curiae.

The application also pointed out that the earlier disbursed amount could not be released to depositors within the prescribed timeline, leading to accrual of interest, LiveLaw reported. So far, claims totaling Rs 1,13,504.124 crores have been filed by about Rs 5.43 crore investors. Refunds amounting to Rs 5,053.01 crores have been issued to 26,25,090 genuine depositors.

Additionally, Rs 3,34,994 more investors have filed claims that remain at various stages of scrutiny, with their claims amounting to approximately Rs 27,849.95 crores and att at the current pace, about 32 lakh more investors may file claims by December 2026, it is reported.

QnA

Q: What is the total amount permitted for disbursal by the Supreme Court?

A: Rs 5,000 crores.

Q: What is the deadline for the release of payments to investors?

A: December 31, 2026.

Q: How many claims have been filed so far?

A: Claims totalling Rs 1,13,504.124 crores have been filed by 5.43 crore investors.

Q: Who supervises the transfer of funds from the SEBI-Sahara Refund Account?

A: Former Supreme Court judge Justice R Subhash Reddy.