Supreme Court Accuses SEBI Of 'Double Standards' In Indiabulls Probe, Questions CBI's Calm Approach

New Delhi: During the hearing of the Citizens Whistle Blower Forum’s plea seeking a Special Investigation Team (SIT) probe into alleged financial irregularities at Indiabulls Housing Finance Ltd. (now Sammaan Capital), the Supreme Court sharply rebuked the Securities and Exchange Board of India (SEBI). Justice Surya Kant questioned why SEBI was unwilling to investigate when empowered by law, pointing out what he termed as 'double standards.'

He emphasised that while SEBI claims exclusive authority when it comes to taking over or selling properties, it suddenly cites lack of power when an investigation is required. The court further criticised SEBI’s track record of auctioning properties worth crores at extremely low prices, questioning the accountability of its officers.

Questions Over CBI’s ‘Cool Attitude’ and MCA’s Swift Compounding

Justice Surya Kant also expressed concern over the Central Bureau of Investigation’s (CBI) unusually passive stance in the matter. He noted that despite allegations involving public money and potentially dubious transactions, the CBI appeared unusually 'friendly' and non-aggressive. The bench also flagged the Ministry of Corporate Affairs (MCA) for allegedly compounding nearly 100 violations within just two days, questioning the reason behind closing the matter so hastily.

The court stressed that even if a small portion of the allegations holds truth, it warrants at least the registration of an FIR to empower agencies like the ED, SFIO and SEBI to act effectively.

Case Background and Legal Developments

The case involves allegations of round-tripping of funds, violations of the Companies Act, and siphoning of money by promoters of Indiabulls and its subsidiaries. An earlier CBI submission had acknowledged prima facie material supporting money laundering allegations, allowing the Enforcement Directorate (ED) to continue its investigation. However, the absence of a registered FIR concerning the predicate offence remained a central concern before the court.

Court Pushes for Coordinated Agency Action

ASG SV Raju informed the bench that attempts under Section 156(3) CrPC and efforts before the EOW had not yielded results. Advocate Prashant Bhushan urged the court to direct the CBI to file an FIR and proposed the formation of a multi-agency SIT. The court was informed that the CBI Director would convene a meeting with senior officials from CBI, SFIO, ED and SEBI. SEBI’s reluctance to join this coordination triggered further sharp remarks from Justice Kant. The court also instructed the CBI to file a fresh affidavit and directed Delhi Police’s EOW to produce records of its inquiry into the ED’s complaint.