Supreme Court Proposes Independent Panel to Verify Sahara Employees Salary Claims Before Releasing Sebi Refund Funds

• WhatsApp
• YouTube
• X
• Instagram

The Supreme Court on Monday made it clear that no money would be released immediately from the Sebi-Sahara refund account, signalling instead that the long-pending dispute over unpaid salaries of thousands of Sahara Group employees will first undergo an independent verification process. The move marks a significant step in one of India’s longest-running financial and legal battles, with the court emphasizing that only genuine claims should receive priority before any funds are disbursed.

Hearing a series of applications connected to the Sahara matter, a specially constituted three-judge bench indicated that it intends to appoint an independent committee to verify salary claims submitted by former employees of the financially distressed Sahara Group. The committee will determine whether claimants were actually employed by the company, the duration of their service, the salaries and benefits allegedly due, and the total amount payable in each case.

The special bench, comprising Justice M.M. Sundresh, Justice Prasanna B. Varale and Justice Vipul M. Pancholi, was constituted following the recommendation of Chief Justice Surya Kant to deal with the long-pending litigation involving Sahara and the funds lying in the Sebi-Sahara refund account.

During the hearing, the bench firmly ruled out the possibility of any immediate release of money.

“Now we will appoint a committee. Based upon the committee’s report, then we will pass an order,” the judges observed. “We are not going to release any amount today.”

The court’s approach reflects its concern over ensuring transparency before public funds are distributed. Instead of relying solely on documents submitted by Sahara, the judges stressed that every claim must undergo an independent verification process to establish its authenticity.

According to submissions made before the court, Sahara has already prepared detailed employee-wise records containing names, employee identification numbers, company details, employment periods and the outstanding salaries allegedly payable. However, the bench expressed reservations about accepting these records without external scrutiny, observing that an independent body must first verify every claim.

Once constituted, the proposed committee is expected to examine whether each claimant genuinely worked for Sahara, verify the length of employment, calculate pending salaries, assess gratuity and other statutory dues, and determine the final amount payable. Only after receiving this report will the Supreme Court consider whether funds from the Sebi-Sahara refund account can be released.

The matter will now return before the court on Friday, when the judges are expected to decide the committee’s composition after hearing suggestions from lawyers representing different stakeholders. The court also discussed practical aspects of the committee’s functioning, including its structure, timeline for completing the verification exercise and the expenses involved in carrying out such a large-scale review.

The issue assumes significance because thousands of former Sahara employees have been waiting for years to receive their unpaid salaries. Lawyers representing the employees told the bench that many workers have gone without payment for nearly a decade.

“People are not being paid for 10 years,” counsel appearing on behalf of the employees submitted before the court.

Responding to these concerns, the bench indicated that employee welfare would remain its immediate priority.

“Employees have to be first taken care of,” the judges remarked, suggesting that legitimate salary claims would receive precedence over other competing demands involving Sahara’s assets or financial liabilities.

The scale of the claims before the court is substantial. Sahara informed the bench that it has submitted applications covering more than 16,000 employees associated with Sahara India Commercial Corporation Ltd. and related companies. Additionally, another 9,000 employees linked to Sahara Cooperative Society have also approached the court seeking payment of outstanding dues.

If all claims are eventually found to be genuine, the verification exercise could involve nearly 25,000 former employees, making it one of the largest employee dues assessments currently before the Supreme Court.

The latest proceedings also brought renewed attention to Sahara’s continuing non-compliance with earlier directions issued by the apex court. The bench referred to its order dated September 4, 2024, which required Sahara to disclose its complete asset details and explain how proceeds from any asset sales would be utilised to repay employees and creditors.

According to the court, Sahara has yet to comply with those directions, raising further concerns over the company’s ability to satisfy outstanding financial obligations.

The Sebi-Sahara refund account itself has remained at the centre of prolonged litigation for more than a decade. The account was created after the Supreme Court directed Sahara to deposit thousands of crores collected from investors through optionally fully convertible debentures (OFCDs). Since then, the issue of refunding investors, settling legitimate claims and addressing employee dues has continued to generate legal disputes involving multiple stakeholders.

While investor refunds have dominated much of the litigation over the years, the latest hearing places renewed focus on employees who claim they continued working for the company despite its prolonged financial crisis and now seek unpaid salaries, gratuity and other employment-related benefits.

Legal experts believe the Supreme Court’s decision to insist on independent verification could establish an important precedent for handling complex corporate insolvency and compensation disputes involving thousands of claimants. Rather than relying exclusively on company records, the court appears determined to ensure that every payment is backed by independently verified evidence.

The proposed committee’s findings are expected to play a decisive role in shaping future proceedings. If the verification confirms the legitimacy of the claims, the Supreme Court may subsequently determine how much money can be released and in what manner employee dues should be settled.

For thousands of former Sahara employees who have waited years for financial relief, Monday’s hearing did not bring immediate payments. However, it did provide the clearest indication yet that the Supreme Court intends to create a structured, transparent and independently monitored mechanism before any funds leave the Sebi-Sahara refund account, ensuring that verified employees receive priority consideration under judicial supervision.