Delhi High Court Rejects Plea for Investigation into Indiabulls Housing Finance

Delhi High Court, on February 2, dismissed a plea filed in 2019 by the NGO Citizens Whistle Blower Forum, linked to lawyer Prashant Bhushan, seeking an inquiry into alleged fund siphoning by the promoters of Indiabulls Housing Finance Limited (IBHFL) and its subsidiaries.

The court, headed by Justices Suresh Kumar Kait and Neena Bansal Krishna, emphasized that the balance sheets and relevant documents are already publicly accessible on the companies' websites. The Public Interest Litigation (PIL) aimed at directing a Special Investigation Team (SIT) to conduct a thorough investigation into various financial irregularities committed by IBHFL's promoters, subsidiaries, and associated entities.

Dismissing the PIL, the court stated, "Finding no merit in the present petition, it is accordingly dismissed. Pending applications are disposed of as infructuous." It emphasized the established legal principle that the jurisdiction of investigation rests with the investigating agency, and courts should intervene only in cases of grave miscarriage of justice or misuse of the legal process.

The court clarified that exceptional circumstances warrant the transfer of an investigation to entities like the Central Bureau of Investigation (CBI) or Special Investigation Team (SIT). In this case, it highlighted that the National Housing Bank (NHB) has already conducted necessary investigations, and the Ministry of Corporate Affairs is actively pursuing further inquiries.

Responding to the court's decision, the Board of Directors of IBHFL expressed solidarity with innocent shareholders who suffered losses due to the "unsubstantiated, false, and malafide PIL filed with ulterior motives." The court's ruling has brought relief to the company, emphasizing the need for credible evidence before initiating legal proceedings against corporations and their promoters.