The Supreme Court on Wednesday saw sharp exchanges between senior advocates Harish Salve and Prashant Bhushan during the hearing of a petition seeking a court-monitored probe into alleged large-scale financial irregularities by Indiabulls Housing Finance Ltd (IHFL), now known as Sammaan Capital Ltd.
A Bench of Justices Surya Kant, Ujjal Bhuyan and N.K. Singh was considering a plea filed by the Citizens Whistleblower Forum (CWBF), an NGO, which has alleged that IHFL and its promoters engaged in round-tripping of funds, diversion of loans to shell entities, and money laundering.
Allegations of Massive Loan Diversion
Appearing for CWBF, Prashant Bhushan alleged that the company had extended loans running into hundreds of crores to shell companies, which were later routed back to promoter-linked firms. He relied on affidavits submitted by SEBI to support these claims.
“One company with a net worth of only ₹1 lakh was given a loan of ₹1,000 crore. Sammaan Capital (earlier Indiabulls) advanced around ₹400 crore to several such entities. Sameer Gehlaut has left the country and is in London. He ignored repeated CBI summons in the Yes Bank case. The SEBI affidavit corroborates our allegations,” Bhushan submitted.
Salve Calls Plea “Blackmail Litigation”
Representing IHFL founder Sameer Gehlaut, Harish Salve pushed back strongly, accusing the petitioners of misusing public interest litigation.
“This is blackmail litigation. If anyone needs to be investigated, it’s these NGOs. Every agency has filed affidavits, and nothing has emerged. This is pure witch-hunting. I object to the maintainability of this petition,” Salve told the Bench.
This triggered a heated back-and-forth between the two lawyers. Bhushan remarked that Salve was unaware of the case details because he was “sitting in London.” Salve shot back, “Whichever city you are sitting in, you can read an affidavit written in simple English.”
Senior Advocate Mukul Rohatgi, appearing for another promoter, joined the debate and referred to a similar complaint filed earlier in Mumbai, calling it the work of a “blackmailer.” Bhushan objected, pointing out that the Forum included former judges, senior bureaucrats, and public figures. “They are calling Justice Shah, former Navy Chief, several Secretaries to the Government, and Aruna Roy blackmailers,” he said. Salve replied curtly, “Yes.”
The exchange escalated further with Bhushan calling Salve’s stance “audacious,” and Salve responding, “Where I sit is not his problem. If he is jealous, he can also move to London.” Rohatgi quipped that Bhushan should join Salve in London for the next hearing.
Justice Surya Kant, smiling briefly at the repartee, intervened to restore order. “We will not comment on all this. We will hear it on the 19th,” he said. Bhushan then urged for a more structured hearing without interruptions, to which Salve interjected, “You are [a blackmailer].” Bhushan replied, “Mr Salve, you have tea with all these fellows.” The Bench assured Bhushan of an uninterrupted hearing next time.
Court Seeks ED’s Stand and MCA Records
Beyond the dramatic exchanges, the Bench turned its attention to the regulatory aspects of the case. It noted that the CBI had said the Enforcement Directorate (ED) could continue probing IHFL’s affairs, and sought the ED’s clear position.
When told that various regulatory bodies had given the company a clean chit, the Bench directed Additional Solicitor General S.V. Raju to produce the original report and explain the basis for closing objections. “We would like to see the original report and understand in how many cases you have been so magnanimous in closing hundreds of objections,” Justice Kant observed.
In its order, the Court directed the Ministry of Corporate Affairs to produce original records regarding the compounding of irregularities flagged by SEBI and to ensure a senior officer is present in court with the relevant reports. The ED was also instructed to file an affidavit explaining what steps it had taken on the CBI’s request to register a case with the Economic Offences Wing, Delhi.
