The Supreme Court has directed the Central Bureau of Investigation to inquire into five sets of financial-irregularity allegations concerning the erstwhile promoters of Indiabulls Housing Finance Limited, now known as Sammaan Capital Limited, regardless of the opinion or report submitted by the Economic Offences Wing of the Delhi Police.

A Bench comprising Chief Justice of India Surya Kant, Justice Joymalya Bagchi and Justice V. Mohana passed the directions in Citizens Whistle Blower Forum v. Union of India & Others, arising from a public interest litigation containing allegations of round-tripping, siphoning of funds and violations of company law.

The Court has not recorded any finding that the company or its erstwhile promoters committed wrongdoing. Its August 18 order is confined to requiring a comprehensive investigation into allegations that remain untested.

The CBI had filed a compliance affidavit pursuant to the Court’s July 28 order, explaining the coordination meetings held among investigating agencies, the Serious Fraud Investigation Office and the Reserve Bank of India.

According to the affidavit, the first five sets of allegations contained in the Enforcement Directorate’s complaint had already been investigated by the EOW. It was submitted that a parallel investigation by another agency might not be advisable.

The Supreme Court, however, directed the CBI to independently inquire into those five allegations notwithstanding the EOW’s findings.

“The CBI is further directed to inquire into the aforementioned five allegations, regardless of the opinion/report of EOW, Delhi Police. A comprehensive report, accordingly, shall be filed by the CBI,” the Court ordered.

The Bench noted that it had considered the EOW’s status report but refrained from expressing any opinion on the portion reportedly giving a clean chit to certain transactions, particularly because it had separately ordered the CBI inquiry.

Separate direction in alleged ₹1,574-crore transaction

The sixth allegation concerns an alleged quid-pro-quo transaction involving approximately ₹1,574 crore. The CBI informed the Supreme Court that it had sought permission from the Special Judge under the Prevention of Money Laundering Act in Mumbai to undertake further investigation.

The application was stated to be listed before the Special Court on August 24. The Supreme Court directed the Special Judge to decide the application in accordance with law and pass an appropriate order within two weeks from August 24. The CBI must thereafter submit a fresh status report before the Supreme Court.

The Delhi Police EOW was also directed to complete its pending investigation concerning the sixth transaction and file a fresh status report. The case has been posted for further consideration on September 29, 2026.

Arguments before the Court

Appearing for the petitioner forum, Advocate Prashant Bhushan argued that the EOW was not competent to conduct the investigation. Referring to an RBI circular, he submitted that bank frauds involving more than ₹50 crore were required to be investigated by the CBI.

Bhushan also questioned the basis of the EOW’s reported exoneration, arguing that it rested upon a report prepared by the company’s own chartered accountant and the fact that the original loans had been repaid. Repayment of a loan, he contended, would not by itself absolve the company of the allegations.

Additional Solicitor General S.V. Raju, appearing for the investigating agencies, submitted that the EOW had investigated five of the six allegations and that two agencies could not ordinarily investigate identical allegations simultaneously.

Regarding the sixth allegation, the Court was informed that a chargesheet had already been filed and that the CBI had approached the Special Court for permission to investigate further.

Senior Advocate Narendra Hooda opposed the petitioner’s submissions and argued that there was no bank fraud, pointing out that no bank had approached the Court claiming that its money had not been repaid.

During the hearing, Justice Bagchi observed that the EOW appeared to have submitted a substantially exonerating report. On the petitioner’s allegation concerning evergreening, the extension of fresh credit to enable repayment of existing debt, Justice Bagchi also observed that evergreening of loans was not, by itself, a crime.

The observations underscore the limited nature of the present order: the Court has required a deeper investigation by the country’s premier investigative agency but has neither accepted nor rejected the underlying allegations.

Background of the dispute

The proceedings originated from a PIL filed by Citizens Whistle Blower Forum and concern alleged financial misconduct connected with the former promoters of Indiabulls Housing Finance. The housing-finance company was subsequently renamed Sammaan Capital following changes in its ownership and promoter structure.

Multiple agencies, including the EOW, CBI and Enforcement Directorate, have figured in the proceedings. The six sets of allegations identified in the ED’s prosecution complaint became central to the dispute over which agency should investigate the transactions.

The Supreme Court’s order now requires a CBI inquiry into the first five allegations independent of the EOW’s opinion, while allowing the EOW to complete its pending work on the sixth transaction. Further investigation by the CBI into the sixth allegation will depend upon the Special PMLA Court’s decision on the agency’s application.

Advocate Prashant Bhushan appeared for the petitioner along with Advocate-on-Record Neha Rathi and Advocates Kajal Giri, Somya Kumari, Prateek Yadav and Niharika Rathi Chaturvedi.

The respondents and other parties were represented by, among others, Solicitor General Tushar Mehta; Additional Solicitor General S.V. Raju; Senior Advocates Dr Abhishek Manu Singhvi, Mukul Rohatgi, Nalin Kohli, Ramesh Babu M.R., Pratap Venugopal, Rakesh Dwivedi, Narendra Hooda, Mandeep Singh Sachdev and Pradeep Kumar Rai; and their respective legal teams.

The matter arises from SLP (C) No. 2993 of 2025 against the Delhi High Court’s February 2, 2024 order in W.P. (C) No. 9887 of 2019.