The top court asked what stopped the authorities from filing an FIR and investigating the allegations. It said that in the meeting to be held by the CBI Director with officials of SEBI, SFIO and the ED, closure of cases by the MCA will not be a hindrance and all allegations leveled by the NGO ‘Citizens Whistle Blower Forum’, represented by advocate Prashant Bhushan, will be looked into.The top court also asked the Delhi Police Commissioner to furnish original documents of the complaints filed by the Enforcement Directorate (ED) for investigation into the allegations against the IHFL and the basis on which the said complaint was refused to be investigated by the Economic Offense Wing (EOW).
It directed that a senior officer of the EOW of Delhi Police should be physically present with all the original documents at the next hearing on December 17.
During the hearing, Chief Justice-designate of India Justice Kant said, “We are surprised to see that the CBI has adopted a very cool attitude and approach in this case. We have never seen such a friendly attitude as in this case. We are sorry to note this.” The bank further said: “This is ultimately public money, it is not someone’s private self-earned money being circulated here and there. There is a strong element of public interest involved. Even if 10 percent of the allegations are true, there are some large-scale transactions that could be labeled as dubious.” It added that once doubt arises, the Central Bureau of Investigation (CBI) should register an FIR, which may not be against ‘A’ person or ‘B’ person.
“During the investigation, someone may or may not be found involved. But registering an FIR will strengthen the hands of the ED, SFIO and SEBI. What is really holding the authorities back? Why is the MCA indulging in closing the case this way? What is their interest in this?” The bench told Additional Solicitor General SV Raju, who appeared for the Center and the investigating agencies.
Alleging large-scale irregularities in the affairs of Indiabulls, a non-banking financial company, Bhushan alleged that IHFL and its former promoters extended dubious loans to companies owned by major corporate groups, who in turn returned the money to the accounts of companies owned by Indiabulls promoters to increase their personal wealth.
During the hearing, Bhushan claimed that former promoter Sameer Gehlaut had fled the country and was now living in London and bought a plane, yacht and a bungalow.
Senior advocate Abhishek Singhvi said Gehlaut had already left the company in 2022-23 and does not own any share in it. The company is now called ‘Sammaan Capital’ where several foreign companies have their interests.
Later, senior lawyer Mukul Rohatgi, appearing for the company, refuted Bhushan’s allegations.
The bench said it had not gone into the merits of the allegations and had only asked the CBI director to hold a meeting with officials of other agencies to look into the matter.
When the order was dictated by the court, a counsel appearing for SEBI showed reluctance in investigating the allegations, citing lack of jurisdiction.
Justice Kant observed: “When the question of taking over properties and selling them comes up, you say that we are the only authority in the country that has jurisdiction. But when the question of investigation comes up, you show reluctance and shy away. Why, because your officers have a vested interest? If we grant you jurisdiction, what is the problem?”.
The judge further said, “Every day we see double standards at SEBI. In one of the cases where I formed a high-powered committee, your stand was that only SEBI has the right to auction the properties. And what you have auctioned, we know! A property worth Rs 30 crore was sold for just Rs 2 lakh.”
The bench said that when the court assigned the responsibility to it, the market regulator had to fulfill its legal duty.
‘You say you have no power. Why do your officers get paid if you have no power?’ Judge Kant noted.
The bench asked the CBI director to file an affidavit regarding the deliberations to be held by officials of other agencies.
On October 8, the top court asked the MCA to produce to it the original documents of termination of the illegalities pointed out by SEBI in the IHFL cases.
The company has refuted the allegations in the petition and said that all of them have been investigated by all relevant regulators and investigative agencies such as RBI, MCA, SEBI, ED, CBI, EOW etc. and none of the claims have been substantiated.
On July 30, the CBI told the top court that it was not investigating any irregularities in the IHFL and that it had not found any lapses in the company’s disbursement of loans to corporate entities.
The NGO has challenged the Supreme Court’s February 2, 2024 order refusing to order an inquiry into the matter. PTI
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