The Supreme Court has directed the Central Bureau of Investigation to conduct an independent probe into six financial irregularity allegations raised by the Enforcement Directorate against Indiabulls Housing Finance Limited and its associated entities.
During Tuesday’s proceedings, a three-judge bench comprising Chief Justice Surya Kant, Justice Joymalya Bagchi, and Justice V. Mohana instructed the agency to submit a comprehensive report covering all aspects of the complaint, overriding a previous clean chit given by local investigators.
Directions for Dual Probes and Court Deadlines
The court mandate addresses two separate tracks of the Enforcement Directorate complaint. Five of the six allegations were previously examined by the Delhi Police Economic Offences Wing, which concluded that further probe was unadvisable and cleared the company. However, the top court instructed the Central Bureau of Investigation to investigate these five matters afresh, without relying on the conclusions or report of the local police.
The sixth allegation concerns the alleged routing of 1,575 crore rupees. Additional Solicitor General S.V. Raju, representing the investigative agencies, informed the bench that the federal agency has sought permission for a further probe through an application before a special Prevention of Money Laundering Act court in Mumbai. The apex court ordered the Mumbai judge to decide on this application within two weeks after taking up the matter on August 24, after which the agency must submit a progress report to the Supreme Court.
Details of Alleged Financial Irregularities
The directions stem from a petition filed by the NGO Citizen Whistle Blower Forum, represented by advocate Prashant Bhushan. The NGO is appealing a February 2, 2024 High Court order that declined to mandate an inquiry into the financial practices of the housing finance company and its former promoters.
According to the petition, the firm and its earlier promoters engaged in large-scale irregularities by granting dubious loans to entities connected with major corporate groups. These funds were allegedly routed back into promoter-owned companies to inflate personal wealth.
Key allegations highlighted during the hearing include:
- The advancing of approximately 1,693 crore rupees in loans to Americorp Group entities, which were allegedly funneled back into shares of Indiabulls companies to profit from manipulated stock movements.
- Suspicious transactions and fund diversions associated with the Palais Royale project.
- Systemic evergreening of loans, criminal conspiracy, and fraud involving public money.
Advocate Bhushan emphasized that Reserve Bank of India regulations require banking fraud cases exceeding 50 crore rupees to be investigated by the federal probe agency.
Prior Judicial Scrutiny and Criticism
The Supreme Court had previously expressed strong dissatisfaction with the handling of the case by regulatory and investigative authorities. On July 28, the bench criticized the Central Bureau of Investigation and the Delhi Police Economic Offences Wing for failing to act, describing their inaction as shocking and suggesting it appeared to be a case of quid pro quo.
Earlier, on November 19, 2025, the court questioned the reluctance of both the federal agency and the Securities and Exchange Board of India to investigate the matter. At that time, the court ordered the agency director to hold a joint meeting with officials from the market regulator, the Serious Fraud Investigation Office, and the Enforcement Directorate. The bench also censured the Ministry of Corporate Affairs for compounding multiple offences by the company and criticized the market regulator for applying double standards regarding its jurisdictional scope.
Furthermore, on December 17 last year, the top court ordered the agency director to decide within a week whether to register regular cases and submit a fresh compliance affidavit.
