The Supreme Court of India on Tuesday heard a high-profile plea seeking a probe into alleged financial irregularities and fund diversion by Indiabulls Housing Finance Ltd (IHFL) and its promoters, including founder and chairman Sameer Gehlaut.
A bench comprising Justices Surya Kant, Ujjal Bhuyan directed the Ministry of Corporate Affairs (MCA) to produce original records concerning the compounding of irregularities highlighted by SEBI and asked that a senior officer be present in court with these records. The ED was also directed to clarify its position on the CBI’s observation that the allegations prima facie disclosed a money laundering aspect and to indicate whether it had taken steps to register an FIR with the Economic Offences Wing, Delhi, as requested by the CBI.
Senior Advocate Harish Salve, representing Gehlaut, described the plea as “blackmail litigation” and “witch hunting,” contending that all investigative agencies had filed affidavits indicating no irregularities and questioning the maintainability of the petition. Justice Surya Kant noted that the CBI had indicated that the ED could continue its investigation into IHFL, and the Court sought clarity on the ED’s stance. ASG S.V. Raju highlighted that the ED affidavit contained “serious” observations.
Bhushan told the Court that a preliminary enquiry had recently been ordered into several housing companies, including the Vatika Group, and claimed that IHFL, now operating as Samman Capital, had extended loans totaling around ₹400 crores to various companies, including cases where the loan amount far exceeded the net worth of the recipient. He also alleged that Gehlaut had evaded multiple CBI summons in the Yes Bank case and cited SEBI findings that substantiated claims of irregularities. Salve countered that SEBI’s communications were merely show-cause notices and emphasized that the RBI, as the regulator, had cleared the loans. He also noted that the Prevention of Money Laundering Act (PMLA) applies only after a predicate offence is established.
The hearing saw sharp exchanges between counsels, with Bhushan accusing the promoters of evading accountability and Salve stressing legal technicalities. Senior Advocate Mukul Rohatgi intervened, pointing out that multiple affidavits indicated no irregularities and dismissing the claims as blackmail. Justice Kant observed that the Court would examine all affidavits and original reports before taking any further step and refrained from commenting on personal jabs exchanged between the counsels. The matter will now proceed with submissions from the MCA and the ED, after which the Court will decide whether a full-fledged investigation into IHFL’s affairs is warranted.
