Supreme Court Orders Fresh ₹5,000 Crore Payout from SEBI-Sahara Fund, Extends Deadline for Depositor Refunds to December 2026

Relief for millions of Sahara investors as Court directs swift disbursal under strict supervision

Centre’s plea in long-running case leads to second major release of funds after March 2023 order

By Our Legal Reporter

New Delhi, September 13, 2025 — In a major relief for millions of small investors, the Supreme Court of India has ordered the fresh disbursal of ₹5,000 crore from the SEBI-Sahara Refund Account to repay depositors of the Sahara Group of Cooperative Societies. The Court also extended the deadline for completing these payments to December 31, 2026, giving authorities more time to process the massive volume of claims.

The order was passed by a bench of Justices Surya Kant and Joymalya Bagchi after hearing Solicitor General Tushar Mehta, who appeared for the Union Government. The decision marks the second major release of funds from the account, following a similar ₹5,000 crore disbursal ordered in March 2023.

Background: The Sahara Refund Saga

The Sahara Group has been embroiled in a long legal battle with the Securities and Exchange Board of India (SEBI) over funds collected from millions of depositors through various cooperative societies and credit firms.

In August 2012, the Supreme Court directed two Sahara companies — Sahara India Real Estate Corporation Ltd and Sahara Housing Investment Corporation Ltd — to refund money raised from investors through optionally fully convertible debentures (OFCDs), ruling that the fundraising violated securities laws.

To facilitate repayments, the Court ordered Sahara to deposit the funds with SEBI, which created the Sahara-SEBI Refund Account. Over the years, the account has grown to hold nearly ₹25,000 crore, but disbursal to genuine investors has been slow due to verification challenges.

The Latest Order

In its latest ruling, the Supreme Court directed that ₹5,000 crore be transferred from the SEBI-Sahara Refund Account to the Central Registrar of Cooperative Societies (CRCS) within one week. The CRCS will then disburse the money to verified depositors against their legitimate dues.

The process will be carried out under the supervision of former Supreme Court judge Justice R. Subhash Reddy, following the same Standard Operating Procedures (SOPs) laid down in the March 2023 order. Senior Advocate Gaurav Agarwal will continue as Amicus Curiae to assist in the process.

Why the Extension Was Needed

The Centre told the Court that the earlier ₹5,000 crore released in 2023 could not be fully disbursed within the original deadline due to the sheer scale of claims and the time required for verification.

According to official data:

• Total claims filed so far: ₹1,13,504.12 crore by approximately 5.43 crore investors.
• Refunds issued: ₹5,053.01 crore to 26,25,090 verified depositors.
• Pending claims: 13,34,994 investors, with claims worth ₹27,849.95 crore, are at various stages of scrutiny.
• Expected future claims: Around 32 lakh more investors may file claims by December 2026.

The Court agreed to extend the deadline for both the earlier and the new disbursal to December 31, 2026, ensuring that all genuine investors have time to submit and verify their claims.

SEBI’s Position

During the hearing, counsel for SEBI appeared later and sought time until Monday to obtain instructions, even requesting that the order be kept on hold until then. However, the bench clarified that the order was not a consent order and refused to delay its implementation.

How the Refund Process Works

The refund process is being conducted through dedicated web portals, where investors can file claims online. The SOPs require:

1. Submission of identity and deposit proof by claimants.
2. Verification by the CRCS and its teams.
3. Approval and transfer of funds to verified claimants’ bank accounts.

The process is designed to prevent fraudulent claims and ensure that only genuine depositors receive refunds.

Impact on Investors

For millions of small investors — many from rural and semi-urban areas — this order is a lifeline. Many have been waiting for over a decade to recover their hard-earned savings.

The Supreme Court’s intervention is expected to speed up repayments, though experts caution that the verification process will still take time given the magnitude of claims.

A Long Road Ahead

Despite the two major disbursals totalling ₹10,000 crore, the total verified claims already far exceed the available funds. With claims worth over ₹1.13 lakh crore filed so far, the gap between available funds and investor dues remains staggering.

Legal experts note that the Court’s orders are incremental steps in a much larger process that may require additional fund releases in the future, depending on the outcome of ongoing investigations and asset recoveries.

Case Details

• Case Title: Pinak Pani Mohanty v. Union of India
• Case Type: Public Interest Litigation (PIL)
• Writ Petition (Civil): No. 191/2022
• Bench: Justices Surya Kant and Joymalya Bagchi
• Supervising Authority: Justice R. Subhash Reddy (Retd.)

The PIL was filed seeking directions for repayment to depositors who had invested in Sahara credit firms and other chit fund companies.

Expert Reactions

Financial law experts have welcomed the move as a positive step for investor protection. Advocate Ramesh Gupta said, “The Court has shown that it will not allow investor money to remain idle while genuine claimants suffer. The challenge now is to ensure that the verification process is both fast and foolproof.”

Investor rights groups have urged the government and SEBI to simplify claim procedures for rural investors, many of whom face difficulties in accessing online portals.

Conclusion

The Supreme Court’s latest order is a significant milestone in the long-running Sahara refund saga. By releasing another ₹5,000 crore and extending the deadline to December 2026, the Court has given millions of investors renewed hope of recovering their money.

However, with claims far exceeding available funds, the road to full repayment remains long and uncertain. The success of this initiative will depend on efficient verification, transparent disbursal, and continued judicial oversight.

📊 Sahara Refund Process & Key Figures

💡 Key Numbers (as of Sept 2025)

🗓 Timeline of Key Court Orders

• Aug 2012 — SC orders Sahara to refund OFCD investors via SEBI.
• Mar 2023 — ₹5,000 crore released for refunds.
• Sept 2025 — Additional ₹5,000 crore released; deadline extended to Dec 2026.