New Delhi, Oct 8 (PTI) The Supreme Court on Wednesday asked the Ministry of Corporate Affairs to place before it the original records of closure of illegalities pointed out by market regulator the Securities Exchange Board of India (SEBI) in the affairs of Indiabulls Housing Finance Limited (IHFL), now known as Sammaan Capital Limited.

A bench of Justices Surya Kant, Ujjal Bhuyan and N Kotiswar Singh told Additional Solicitor General SV Raju, appearing for central investigating agencies, that the court would like to know how many cases were closed.

"We would like to see in how many cases you have been so magnanimous in closing 100s of objections", Justice Kant said, as the bench directed the ministry to depute a senior official with original records of the case on next date of hearing on November 11.

The bench also asked the Enforcement Directorate to clarify its position on the stand taken by the Central Bureau of Investigation on the issue of money laundering charges against the company and what steps it has taken.

"The original records of the MCA relating to compounding of irregularities pointed out by SEBI in its report, is required to be furnished. We accordingly direct the MCA that a senior officer be present in court with original reports.

"We direct the ED to categorically clarify its stand with respect to the observation made by the CBI in its report to the effect that the allegations prima facie disclosed money laundering aspect for which the ED may continue its investigation into IHFL's affairs. The ED will also explain with respect to the steps taken by it in terms of the counter affidavit by the CBI where ED had been requested to seek registration of FIR with EoW, Delhi. The steps taken in this regard shall be placed on record," it ordered.

The top court was hearing a plea of NGO Citizens Whistle Blower Forum which alleged large scale irregularities in the affairs of Indiabulls, a non-banking financial company.

Senior advocates Harish Salve, Mukul Rohatgi, Abhishek Singhvi, appearing for the company and its promoters, said investigating agencies one after the other has not found any wrong and termed the NGO a "blackmailer".

Advocate Prashant Bhushan, appearing for the NGO, alleged that the Indiabulls was involved in large scale financial bungling, money laundering and irregularities in real estate sector.

Heated exchange followed between Salve and Bhushan when the latter while referring to the former said, a person sitting in London has the audacity to term the NGO as "blackmailer" which has former Delhi High Court chief justice AP Shah and former navymen as its members.

Salve retorted to Bhushan saying if he is so jealous of him being in London, then he too can shift to the UK.

"This is a 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 going on? Who is this stranger? I am objecting to the maintainability of this petition," Salve submitted.

Justice Kant intervened and said that the CBI has said in its report that the ED may continue its investigation into the affairs of IHFL.

"We want to know what the ED's stand is. We will hear you on maintaining Mr.Salve. Don't worry," the judge said.

Bhushan said Indiabulls have disbursed some Rs 400 crores loans to many of the real estate companies of which one company has net worth of Rs 1 lakh only and was given a loan of Rs 1,000 crore.

He referred to the finding in the SEBI's affidavit and said it was shocking and substantiated the allegations the petitioner has been making.

Raju said the Enforcement Directorate's affidavit has some serious things and are being looked into.

Justice Kant told Raju that the court would like to see the original records as the bench would also like to know in how many cases you have been so magnanimous in closing hundreds of objections.

Bhushan said hundreds of violations were compounded in one day and a penalty of only Rs 37 Crore was imposed.

Salve said the most important regulator which is the RBI has filed an affidavit in the matter and said there was nothing wrong in any of these loans. On July 30, the CBI told the top court that it was not investigating any irregularities in IHFL and has not found any wrong in the company disbursing loans to corporate entities.

On July 21, the top court pulled up the CBI for not appearing in a matter against Indiabulls despite notice.

The petitioner NGO alleged IBHFL and its owners were advancing dubious loans to companies owned by large corporate groups which in turn were routing the money back to the accounts of companies owned by the promoters of Indiabulls to increase their personal wealth.

Earlier, ASG Raju, appearing for the Enforcement Directorate, had submitted that the agency was investigating the matter and as far as CBI goes there ought to be a formal complaint and could only investigate if the states granted consent.

On May 13, the top court sought response of the CBI on the plea which has challenged the February 2, 2024 order of the high court.

The top court has noted the submission of the Ministry of Corporate Affairs and the Securities Exchange Board of India (SEBI) that irregularities were committed in IHFL.

The ED accused IHFL of committing some irregularities in the two cases it probed, including the one in Maharashtra where public money was allegedly siphoned off outside the country by cheating investors of around Rs 300 crore. PTI MNL ZMN

Production of original records ordered, compounding files to be produced and law enforcement must clarify money laundering stance. The court directed the Ministry of Corporate Affairs to produce original files relating to the compounding of irregularities identified by the securities regulator in Indiabulls Housing Finance Limited and required a senior official to attend; it also directed the enforcement agency to clarify its position and the steps taken in light of an investigative report that the allegations prima facie disclosed money laundering, seeking documentary proof of closures and investigatory actions.