NEW DELHI: On Tuesday, the Supreme Court expressed strong disapproval of the Central Bureau of Investigation (CBI) and the Delhi Police’s Economic Offence Wing (EoW) for their inaction regarding allegations of dubious transactions involving Indiabulls Housing Finance Limited (IHFL). The court termed their lack of action “shocking” and indicated a possible “quid pro quo”.
A bench consisting of Chief Justice Surya Kant and Justices Joymalya Bagchi and V Mohana criticized the CBI for failing to respond to previous directives regarding the registration of a regular case and not providing a status report on the ongoing investigation.
“Due to CBI and EoW’s negligence in not filing a status report and not informing the court about steps taken to register a case for investigation, we would have summoned the heads of these agencies, but ASG SV Raju assured us that the necessary actions would be taken and a status report would be submitted within two weeks,” stated the bench.
Initially, the court had called for the presence of the CBI director and the Delhi Police commissioner, but this was postponed after ASG Raju promised that a detailed affidavit and status report would be filed promptly.
“This is quite shocking to us. The investigation agencies have remained silent regarding the status of their investigation. This indicates a clear quid pro quo. They must file a status report,” CJI Kant remarked.
Prashant Bhushan, representing the petitioner NGO Citizens Whistle Blowers Forum, noted that the last affidavit submitted by the CBI in January mentioned findings by the Enforcement Directorate (ED) and the Securities and Exchange Board of India (SEBI) concerning potential siphoning of funds.
Bhushan also pointed out that while the EoW had registered certain FIRs, the CBI was contemplating combining five cases highlighted by the ED with the Yes Bank investigation.
He mentioned that former Indiabulls promoter Sameer Gehlaut had relocated to London and argued for the need to form a Special Investigation Team (SIT) for the case.
The bench observed that no affidavits had been filed by the investigating agencies since January and inquired about their current actions in the case.
In response, Raju indicated that investigations were ongoing, with the Serious Fraud Investigation Office (SFIO) engaged in one case, while the EoW was handling four others. “Please allow me two weeks to submit a comprehensive affidavit along with a status report,” he requested, adding that it was confirmed that all loans from Sammaan Capital had been fully repaid, with interest.
CJI Kant questioned, “What has the CBI been doing from January to July? We do not wish to investigate innocent parties. They should admit that since the money was repaid, no offense occurred. What has the EoW been doing? Are they unable to file a status report? The conduct of the CBI and EoW is highly questionable.”
Senior advocate Abhishek Singhvi, representing Sammaan Capital, reaffirmed that Gehlaut held no shares in the company and had no involvement. Senior advocates Mukul Rohatgi and Nalin Kohli, alongside Singhvi, also refuted any allegations of wrongdoing.
On December 17 of the prior year, the Supreme Court directed the CBI Director to finalize the registration of regular cases within a week and to present a fresh compliance affidavit by the designated date.
Previously, on November 19, the court criticized the “reluctance” of both CBI and SEBI to address allegations concerning “dubious transactions” related to IHFL. It mandated a meeting between the agency director, SEBI, SFIO, and ED to examine the issue further.
Furthermore, the court had admonished the Ministry of Corporate Affairs for compounding multiple offenses by IHFL and criticized SEBI for the perceived “double standards” it exhibited in different cases concerning its investigative authority.
The NGO has alleged extensive irregularities involving IHFL, claiming that the company and its former promoters provided questionable loans to entities owned by major corporates, which were allegedly funneled back into the promoters’ accounts to enhance their wealth.
The NGO is contesting a February 2, 2024, high court ruling that declined to order an investigation into these matters.
