SC directs CBI to probe all six allegations involving Indiabulls Housing Finance

The Supreme Court on Tuesday directed the Central Bureau of Investigation (CBI) to examine all six allegations flagged by the Enforcement Directorate (ED) concerning suspected transactions involving Indiabulls Housing Finance Limited (IHFL) and related entities.

A bench comprising Chief Justice Surya Kant and Justices Joymalya Bagchi and V. Mohana was informed that Delhi Police’s Economic Offences Wing (EoW) had examined five of the allegations and found no grounds for further investigation.

The court, however, asked the CBI to conduct an independent inquiry into those five allegations without being influenced by the EoW’s findings and submit a comprehensive report.

“The CBI is directed to inquire into the five other allegations contained in the ED complaint irrespective of the opinion or report of the Delhi Police EOW and submit a comprehensive report to the court,” the bench said.

Additional Solicitor General S.V. Raju, appearing for the investigating agencies, said the sixth allegation concerned the purported routing of Rs 1,575 crore. The CBI has approached a special court under the Prevention of Money Laundering Act (PMLA) in Mumbai for permission to investigate the matter, he added.

The Supreme Court directed the special judge to decide the CBI’s application within two weeks of taking it up on 24 August. The agency must subsequently file a progress or status report before the top court.

The directions were issued while hearing a petition filed by the Citizen Whistle Blower Forum. Relying on the ED’s findings, the organisation has alleged suspicious lending transactions, diversion of funds, share-price manipulation and evergreening of loans involving entities linked to Indiabulls.

Advocate Prashant Bhushan, representing the petitioner, argued that an RBI circular required the CBI to investigate bank frauds involving more than Rs 50 crore. He claimed that the six allegations cited by the ED prima facie pointed to fraud, criminal conspiracy, fund diversion and the evergreening of loans involving public money.

One allegation relates to loans of approximately Rs 1,693 crore extended to companies belonging to the Americorp Group. Bhushan alleged that the money was subsequently routed into shares of Indiabulls-linked companies, generating profits through manipulated movements in their prices.

He also referred to the ED’s findings concerning alleged fund diversion and questionable transactions connected with the Palais Royale project.

The Supreme Court had on 28 July criticised the CBI and the Delhi Police EoW over their response to the allegations. Describing their conduct as “shocking”, the court had observed that the matter appeared to involve a possible “quid pro quo”.

In December 2025, the court directed the CBI director to decide within a week whether regular cases should be registered and to submit a fresh compliance affidavit.

A month earlier, the court had questioned the reluctance of the CBI and the Securities and Exchange Board of India (SEBI) to investigate the allegations. It directed the CBI director to hold consultations with SEBI, the Serious Fraud Investigation Office and the ED.

The petitioner has alleged widespread irregularities in IHFL’s affairs, claiming that the company and its former promoters extended questionable loans to entities owned by major corporate groups. According to the petition, some of those funds were subsequently routed back to companies controlled by the promoters for their personal benefit.

The organisation has challenged a Delhi High Court order of 2 February 2024, which declined to direct an investigation into the allegations.

With PTI inputs