The Supreme Court on Wednesday came down hard on the CBI, SEBI and the Ministry of Corporate Affairs (MCA) over what it described as an inexplicable reluctance to investigate allegations of large-scale dubious transactions involving Indiabulls Housing Finance Limited (IHFL), now operating as Sammaan Capital Limited.
A bench of Justices Surya Kant, Ujjal Bhuyan and N Kotiswar Singh directed the CBI director to convene a joint meeting with senior officials of SEBI, the Serious Fraud Investigation Office (SFIO) and the Enforcement Directorate (ED) to examine the allegations raised by NGO Citizens Whistle Blower Forum. Advocate Prashant Bhushan appeared for the petitioner.
The bench expressed strong displeasure over what it saw as a surprisingly “friendly attitude” by the CBI.
Justice Kant, who is set to take over as Chief Justice of India, remarked,
“We are surprised to see that the CBI has adopted a very cool kind of attitude. We have never seen such a friendly approach in any matter. We are sorry to observe this.”
The judges stressed that the allegations concern public money, not private funds casually moved around.
“Even if ten percent of the allegations are correct, there are some large-scale transactions that can be called dubious,” the court said, adding that once a reasonable doubt arises, the CBI “has to register an FIR”.
The court questioned why the MCA had compounded several offences instead of pursuing them, and asked the Centre’s law officer, ASG S V Raju, what “interest” the Ministry had in closing the matter so easily.
The bench made it clear that any previous closure by the MCA shall not restrict the new examination by the CBI, SEBI, SFIO and ED.
“All allegations must be looked into,” the order said.
The court also directed the Delhi Commissioner of Police to produce original records of ED complaints that sought an EOW probe but were declined. A senior EOW officer must be present with the records on December 3.
SEBI came under particularly sharp criticism after its counsel claimed a lack of jurisdiction to investigate.
Justice Kant said SEBI routinely asserts exclusive jurisdiction when it comes to seizing or auctioning properties, but conveniently declines jurisdiction when investigation is required.
“Every day we are seeing double standards of SEBI,” Justice Kant said.
“You say you don’t have power. Why are your officers getting a salary if you do not have power?”
He cited a previous matter where, despite claiming sole auctioning rights, SEBI allegedly sold a property valued at ₹30 crore for only ₹2 lakh.
Bhushan alleged that IHFL and its former promoters extended questionable loans to corporate entities that then round-tripped funds back to companies linked to promoter Sameer Gehlaut. He claimed Gehlaut had left the country, was now living in London and purchasing luxury assets.
Senior advocates Abhishek Manu Singhvi and Mukul Rohatgi, appearing for the company and for Gehlaut respectively, strongly denied the allegations. Singhvi stated that Gehlaut exited the company in 2022–23 and no longer holds any shares. The company, now renamed Sammaan Capital, has significant foreign shareholding.
The NGO has challenged a February 2, 2024 order of the Delhi High Court refusing to direct an investigation. IHFL has repeatedly maintained that all relevant regulators — RBI, MCA, SEBI, ED, CBI and the Economic Offences Wing — have examined the allegations and found no substance.
However, in July, the CBI had informed the Supreme Court that it was not investigating any irregularities and had detected no wrongdoing in IHFL’s loan disbursals. Wednesday’s hearing indicated the bench’s dissatisfaction with that stand.
The CBI director must now file an affidavit detailing the deliberations of the multi-agency meeting. The matter will be heard next on December 3, when the court will also scrutinise the original EOW records.
The bench clarified that it has not examined the truth of the allegations, but only directed institutional coordination to ensure that no investigative gaps remain.
