Citizens Whistle Blower Forum Vs Union of India And Ors. (Delhi High Court)
Summary: The Delhi High Court dismissed a public interest litigation filed by Citizens Whistle Blower Forum seeking a Special Investigation Team (SIT) investigation into alleged financial irregularities involving Indiabulls Housing Finance Limited (IBHFL), its promoters and associated companies. The petitioner alleged that substantial loans had been advanced to various corporate groups and that portions of those funds were subsequently routed back to companies connected with the promoters. The petition sought intervention by regulatory and investigative authorities, including the Ministry of Corporate Affairs, RBI, SEBI, National Housing Bank and Serious Fraud Investigation Office.
The petitioner alleged that IBHFL had extended substantial loans to companies associated with the Americorp, Reliance ADAG, Chordia, Vatika and DLF groups. According to the petitioner, certain borrowing entities had limited paid-up capital, inadequate business operations or common directors and addresses. It was further alleged that funds were routed through preference shares, compulsorily convertible debentures, advances and other financial arrangements. The petitioner also raised concerns regarding non-registration of charges under Section 77 of the Companies Act, 2013, and alleged deficiencies in financial disclosures. The petitioner’s principal contention was that the transactions indicated possible diversion and round-tripping of funds requiring an independent investigation. It argued that the magnitude of the alleged transactions, the involvement of public money and the asserted failure of regulatory authorities to take effective action justified judicial intervention. The petitioner sought a comprehensive, time-bound investigation into the affairs of IBHFL, its subsidiaries, promoters and related corporate entities.
