The Supreme Court saw a fiery exchange between Senior Advocates Harish Salve and Prashant Bhushan during the hearing of the Indiabulls Housing Finance fraud case. Heated words flew over alleged fund diversion, with Bhushan accusing Salve of being out of touch from London.
New Delhi: In a dramatic hearing on Wednesday, the Supreme Court saw a sharp exchange of words between Senior Advocates Harish Salve and Prashant Bhushan over a petition seeking an investigation into alleged financial irregularities and diversion of funds by Indiabulls Housing Finance Ltd (IHFL), which has now been renamed Sammaan Capital Ltd.
The matter, filed by the NGO Citizens Whistleblower Forum (CWBF).
A bench comprising Justices Surya Kant, Ujjal Bhuyan, and N.K. Singh was hearing the plea, in which CWBF demanded a court-monitored probe into alleged round-tripping of funds and money laundering by IHFL and its promoters.
At the start of the hearing, Prashant Bhushan, representing CWBF, submitted that the company and its promoters had extended huge loans to shell entities and then diverted the money back into promoter-linked companies.
He emphasized that these claims were backed by affidavits from the Securities and Exchange Board of India (SEBI).
Bhushan further explained the scale of the alleged transactions.
Bhushan said,
“Indiabulls, now known as Sammaan Capital, has given some Rs 400 crores of loans to many of these companies. One company of net worth of Rs 1 lakh was given a loan of Rs 1,000 crore. Sameer Gehlaut (founder and chairman of IHFL) had fled the country and is living in London. He didn’t answer multiple summons issued by CBI in the Yes Bank case. Just see the findings in the SEBI affidavit. They are shocking. They substantiate the allegations we had made,”
Opposing the petition, Senior Advocate Harish Salve, representing IHFL founder Sameer Gehlaut, strongly argued that the plea was an example of misuse of public-interest litigation.
Salve said,
“This is such blackmail litigation. If an investigation is needed, it is into these NGOs. All the agencies have filed affidavits and nothing has come out. What is this kind of witch-hunting? Who is this stranger? I am objecting to the maintainability of this petition,”
As the discussion grew intense, Bhushan accused Salve of being unaware of the case details because he was not present in India.
Senior Advocate Kapil Sibal, former President of the Supreme Court Bar Association, appearing in a subsequent matter, called the exchange between Salve and Bhushan unfortunate, saying that seasoned lawyers should set a better example for others.
Bhushan said,
“Mr Salve doesn’t even know what the affidavits are. He is sitting in London,”
Salve replied sharply,
“Whichever city you are sitting in, you can read an affidavit written in simple English.”
Bhushan repeated his point, stating,
“Mr Salve doesn’t even know what the affidavits are. He’s sitting in London.”
Salve responded with characteristic wit,
“Where I sit is not his problem. If he is jealous, he can also move to London.”
Senior Advocate Mukul Rohatgi, appearing for another promoter, added his comments, saying,
“Some blackmailer in Bombay filed the complaint.”
Bhushan strongly objected, highlighting the credibility of the CWBF.
Bhushan said,
“Justice Shah, former Navy Chief, several Secretaries to the Government of India, and Ms Aruna Roy, all of them are trustees of the Citizens Whistleblower Forum. They are saying we are blackmailers,”
Salve responded curtly with a simple,
“Yes.”
Bhushan immediately countered,
“The audacity of the gentleman who sits in London.”
Rohatgi then added in a lighter tone,
“Mr Bhushan should also go to London next date both of you do it from London. We will be here.”
Justice Surya Kant, with a brief smile, quickly brought the courtroom back to focus, saying,
“We will not comment on all this. We will hear it on the 19th.”
Bhushan then stressed that the next hearing should proceed in an orderly manner without interruptions.
He said,
“Yes, let there be an orderly hearing. Let them not go on interrupting us by saying blackmailer, blackmailer,”
Salve shot back simply,
“You are.”
Bhushan responded humorously,
“Mr. Salve, you have tea with all these fellows.”
Justice Kant intervened again to ensure the proceedings remained on track, assuring,
“We will provide you uninterrupted hearing on the next date.”
Beyond the verbal exchanges, the hearing also raised larger concerns about regulatory oversight. The Bench noted that the Central Bureau of Investigation (CBI) had indicated that the Enforcement Directorate (ED) could continue probing IHFL’s affairs. The Court sought clarity from the ED on this matter.
When informed that most regulatory bodies had given a clean chit to IHFL, the Court asked Additional Solicitor General S.V. Raju, representing the Union of India, to submit a detailed report.
Justice Kant emphasized,
“Mr. Raju we would like to see the original report. And we would also like to know in how many cases you have been so magnanimous in closing hundreds of objections. We would like to see that original report.”
The Court directed the Union Ministry of Corporate Affairs (MCA) to present the original records concerning the compounding of irregularities flagged by SEBI. It also required a senior officer to appear in court with the relevant reports.
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Additionally, the Bench asked the ED to file an affidavit explaining the steps taken following CBI’s request to register a case with the Economic Offences Wing in Delhi.
This hearing, marked by pointed exchanges and humor amidst serious allegations, highlights the complexities of corporate oversight and the role of public-interest litigation in India, with the Supreme Court now set to continue its examination on October 19.
Read Live Coverage:
Case Title:
Citizens Whistleblower Forum vs. Union of India & Ors.
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