Supreme Court Orders CBI Probe into Indiabulls Financial Irregularities

The Supreme Court has directed the Central Bureau of Investigation (CBI) to conduct an independent investigation into allegations of financial irregularities against Indiabulls Housing Finance Ltd and its associated entities. This directive specifically includes transactions previously examined by the Delhi Police Economic Offences Wing (EOW).

The Court explicitly stated that the CBI must not be influenced by the EOW’s prior conclusions regarding these matters. This ruling follows a Public Interest Litigation (PIL) filed by the Citizens Whistleblower Forum.

Allegations and Prior Scrutiny

The PIL detailed several serious allegations against Indiabulls-linked entities. These include suspicious loan transactions, the diversion of funds, manipulation of share prices, and the practice of evergreening loans.

The petitioner specifically questioned the EOW’s decision not to pursue five of these transactions previously. Senior Advocate Prashant Bhushan, representing the Citizens Whistleblower Forum, highlighted an RBI circular that mandates CBI investigation for bank frauds exceeding ₹50 crore.

Bhushan argued that the EOW lacked the proper authority for such high-value cases. He cited allegations involving approximately ₹1,693 crore in loans provided to Americorp Group entities.

These funds were purportedly routed back into Indiabulls-linked shares to manipulate prices. Furthermore, the petition referenced Enforcement Directorate (ED) findings concerning alleged fund diversion related to the Palais Royale project.

Defense and Judicial Scrutiny

Respondents, including former Indiabulls promoter Sameer Gehlaut, countered these claims by stating that all loans had been repaid and no bank had reported defaults. They also argued that evergreening itself does not constitute a criminal offense.

However, Justice Bagchi raised questions regarding the evergreening defense. This inquiry was made in light of an affidavit submitted by the ED.

CBI’s Mandate and Next Steps

The CBI informed the Court that the ED complaint encompassed six distinct allegations. Five of these had been previously examined by the EOW.

A chargesheet had been filed for the sixth allegation, which involved approximately ₹1,574 crore. This specific aspect requires permission from the Special Judge, PMLA, Mumbai, for further investigation.

The Supreme Court has ordered the Special Judge to decide on the CBI’s application within two weeks from August 24, 2026. Following this, the CBI is required to submit a progress report to the Court.

For the other allegations, the CBI is mandated to conduct a completely independent inquiry. A comprehensive report must then be submitted, explicitly disregarding the EOW’s previous findings on those matters.

The Delhi Police EOW also received a directive to complete its investigation into the sixth transaction. They must file a fresh status report on this progress.

The Court clarified that its directive did not imply an endorsement of any prior