SC slams CBI, Delhi Police over silence in Indiabulls probe

The Supreme Court on Tuesday pulled up the CBI and Delhi Police’s Economic Offence Wing (EoW) for being silent on allegations of dubious transactions involving Indiabulls Housing Finance Limited (IHFL), terming their conduct “shocking” and saying it appeared to be a “case of quid pro quo”. In July 2024, the tainted company changed its name to Sammaan Capital Limited and changed the shareholding pattern.

A bench of Chief Justice Surya Kant and Justices Joymalya Bagchi and V Mohana criticised the Central Bureau of Investigation (CBI) for neither taking a final call on registering a regular case despite earlier directions nor filing a status report on the investigation carried out so far.

“Owing to the negligence of CBI and EoW of Delhi Police in not even filing a status report and total failure to apprise this court about steps taken for registration of RC (Regular Case) for investigation, we would have summoned the heads of these agencies but for the persuasion of ASG SV Raju, who assures that needful will be done and status report will be filed within two weeks,” the bench said in its order.

The bench had initially directed the presence of the CBI director and Delhi Police commissioner in the court but deferred the move after Additional Solicitor General (ASG) Raju assured the court that a comprehensive affidavit and a status report would be filed within two weeks.

“This is a case which is very shocking to us. Investigating agencies are keeping silent on the status of investigation in the case. Definitely this is a case of quid pro quo. They are completely silent... file a status report,” CJI Kant said.

Appearing for petitioner NGO Citizens Whistle Blowers Forum, advocate Prashant Bhushan said the last affidavit filed by CBI in January had referred to the Enforcement Directorate (ED) and the Securities and Exchange Board of India (SEBI) finding instances of siphoning of funds.

He pointed out that the EoW had registered certain FIRs and the CBI was considering clubbing five cases flagged by the ED with the Yes Bank investigation.

Bhushan also informed the court that former Indiabulls promoter Sameer Gehlaut had moved to London and argued that the matter warranted the constitution of a Special Investigation Team (SIT).

The bench noted that no affidavit had been filed by the investigating agencies since January and asked the ASG what the probe agencies were doing in the case.

Raju said the investigation was continuing and that the Serious Fraud Investigation Office (SFIO) had taken up one case while the EoW was investigating four cases.

“Please give me two weeks to file a comprehensive affidavit in the matter along with a status report,” the ASG said, adding that it has been found that all loans extended by Sammaan Capital have been repaid in full, with interest.

The CJI said, “What has the CBI been doing from January to July? We don’t want to hold an investigation against innocent persons. Let them have the courage to say that because money was returned, no offence was made out. What was EoW doing? Does it not have the guts to file a status report in the case? In this case, the conduct of CBI and EoW was highly questionable.”

Senior advocate Abhishek Singhvi, appearing for Sammaan Capital, said Gehlaut has no shareholding in the company and has nothing to do with it. Senior advocates Mukul Rohatgi and Nalin Kohli, appearing along with Singhvi, also denied any wrongdoing.

On December 17 last year, the top court directed the CBI Director to take a final call within a week on the registration of regular cases and file a fresh compliance affidavit on the date fixed.

Earlier, on November 19, the court had questioned the “reluctance” of the CBI and SEBI to probe the allegations of “dubious transactions” against IHFL. It ordered the agency director to hold a meeting with SEBI, the SFIO and the ED to look into the matter.

It had also pulled up the Ministry of Corporate Affairs for the compounding of multiple offences committed by IHFL, and came down heavily on SEBI over the “double standards” adopted by the market regulator in different cases over its jurisdiction to probe into illegalities.

The NGO has alleged large-scale irregularities in the affairs of IHFL, claiming that the company and its erstwhile promoters advanced dubious loans to entities owned by large corporate groups, which then allegedly routed the funds back into the accounts of companies owned by the promoters to increase their personal wealth.

The NGO has challenged the February 2, 2024, order of the High Court refusing to order an investigation into the matter.