Supreme Court Slams CBI’s ‘Friendly Probe’ Into Indiabulls Case

The Supreme Court on Wednesday sharply criticised the Central Bureau of Investigation (CBI) for what it described as an unusually “friendly and relaxed” approach in probing alleged financial irregularities involving Indiabulls Housing Finance Ltd (IHFL), now known as Sammaan Capital Ltd.

The court also questioned the Ministry of Corporate Affairs’ rationale for closing complaints of corporate governance violations earlier flagged by SEBI and the Enforcement Directorate (ED).

A bench comprising CJI-designate Surya Kant and Justices U. Bhuyan and N.K. Singh clarified that it had neither examined the merits of the allegations nor commented on Sammaan Capital’s current management.

“We have never seen such a cool and friendly approach in investigating suspected misuse or siphoning of public funds,” the bench observed, responding to senior advocate Mukul Rohatgi’s submission that no financial wrongdoing had been attributed to the present promoters.

The court stressed the substantial public interest involved in a detailed and transparent probe into “multi-layered transactions” and alleged round-tripping of loan amounts.

It noted that even if a fragment of the accusations is established on a prima facie basis, the matter warrants registration of an FIR and a full-fledged investigation. 

Such an FIR, the bench added, would enhance the ability of the ED, Serious Fraud Investigation Office (SFIO), and SEBI to proceed effectively.

Taking up allegations presented by advocate Prashant Bhushan on behalf of the Citizens Whistleblower Forum, the Supreme Court sought clarity from the Ministry of Corporate Affairs on its decision to close earlier complaints against IHFL. “What is the ministry’s interest in this?” the bench asked pointedly.

The ED, represented by Additional Solicitor General S.V. Raju, informed the bench that its complaint to the Delhi Police Economic Offences Wing (EOW) had been abruptly closed. The EOW had communicated that no substance was found in the allegations.

The Supreme Court directed the Delhi Police Commissioner to assign a senior officer from EOW to appear before the court with all relevant records to explain the basis of the closure.

In parallel, the court instructed the CBI director to convene a joint meeting within two weeks with senior officials of the ED, SFIO, and SEBI. 

The agencies are to outline the next steps in the inquiry and assess whether a Special Investigation Team (SIT) is required to probe what the petitioners describe as widespread financial irregularities involving IHFL, Reliance ADAG, the Chordia Group, and the family group of Rana Kapoor.

The matter will be heard again after three weeks.

Following the hearing, Rohatgi issued a statement emphasising that the petition before the Supreme Court contains no allegations against Sammaan Capital.

The court’s references, he said, relate only to concerns about former promoter Sameer Gehlaut, who no longer holds any shares or plays any role in the company.

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