Mumbai: The official liquidator of Sahara Group’s Aamby Valley City is ready to auction the property in June after the Supreme Court ordered the sale to recover money owed to investors, two people aware of the development said on condition of anonymity.

The funds realized from the auction has two claimants: the Securities and Exchange Board of India, and the income-tax (I-T) department. The apex court might have to step in and provide guidance, the two people added. The Sahara Group claimed the auction would not go through since it has submitted a post-dated cheque of Rs1,500 crore to the apex court.

The liquidator of the Bombay high court has submitted its report on Aamby Valley to Sebi. The value of the property is estimated at Rs43,000 crore, said one of the two people cited above. The market value of this property is likely to be higher and the auction may begin only after the next Supreme Court hearing on 19 June, this person added.

The apex court ordered the auction on 17 April after Sahara India chief Subrata Roy failed to deposit Rs5,092.64 crore with the capital markets regulator. At that time, Sahara had expressed reservations on the sale, saying that the market value of Aamby Valley was over Rs1 trillion.

“As per the order of Hon’ble Supreme Court, there is no question of auctioning of Aamby Valley as Sahara had submitted Rs. 1500/- Crore PDC (post-dated cheque) to the Hon’ble Supreme Court and the next hearing is on 19 June 2017," said a spokesperson for Sahara in an emailed response.

Sebi did not respond to an email seeking comment.

Aamby Valley is Sahara’s flagship project, comprising luxury resorts, man-made lakes and an airport. It is spread over 4,000 hectares. In January 2012, Sahara valued the property at Rs34,000 crore.

The Sahara case relates to two group firms raising Rs24,029 crore from 29.6 million investors. Sebi said this violated its public issue norms and ordered a refund in 2011. The order was upheld by the Supreme Court in 2012 and the case has been going on since then. According to Sebi, Sahara’s total dues with interest exceed Rs47,000 crore and the group has so far remitted Rs11,477 crore, said the second person cited earlier.

Now, the taxman has stepped in demanding his pound of flesh. The Times of India first reported on 25 April that the I-T department has asked Sahara’s Aamby Valley Ltd to pay tax and penalty of Rs24,646 crore after the department added over Rs48,000 crore to the group’s income for assessment year 2012-13.

The Sahara spokesperson disputed this.

“As per the orders of Hon’ble Court, Aamby Valley is not on sale. Secondly as per the Hon’ble Court’s order, any amount either from Sahara or from sales proceeds from its other properties conducted by Sahara will directly go to Sahara-Sebi Account," said the spokesperson.

To amicably settle the matter, the I-T department and Sebi may ask the Supreme Court to provide guidance, said the second person.

“In such a scenario, the first right to the assets or funds realized post-sale of these assets vests with the government, that is, the income-tax department," said Vijay Pal Dalmia, senior litigator and partner at law firm Vaish Associates.

Sahara has filed a defamation case in a Patna court against Mint’s editor and some reporters over the newspaper’s coverage of the company’s dispute with the Securities and Exchange Board of India. Mint is contesting the case.

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