LI Network
Published on: February 14, 2024 at 12:10 IST
The Supreme Court overturned the interim protection granted to officers of Indiabulls Housing Finance Ltd. in connection with an FIR filed by the Director of Shipra Estate and the subsequent investigation by the Enforcement Directorate.
Last year, the Allahabad High Court had stayed the criminal proceedings, providing protection against arrest for the officers.
A Division Bench comprising Justices Bela M. Trivedi and Prasanna B. Varale strongly rebuked the High Court for halting the investigation, expressing dissatisfaction with the orders that were deemed to be in violation of guidelines set in the case of M/s Neeharika Infrastructure Pvt. Ltd. vs. State of Maharashtra.
The Supreme Court had cautioned against courts preventing arrests or taking coercive steps during investigations, as outlined in the Neeharika case.
The Court emphasized the importance of judicial comity and discipline, stating that higher courts must adhere to established legal principles. It clarified that the Court’s inherent powers do not grant arbitrary jurisdiction to act on whims and caprice.
The allegations against Indiabulls Housing Finance Ltd. involve the sanctioning of 16 loan facilities totaling Rs. 2,801 crores to the Shipra Group/Borrowers between 2017 and 2020.
When the Shipra Group defaulted on loan payments, IHFL auctioned Shipra Mall, with Himri Estate emerging as the successful bidder. Subsequently, multiple FIRs were filed by Mohit Singh, a Shipra Group representative, alleging illegal sale and causing a substantial loss to the State.
The Enforcement Directorate registered an ECIR to investigate money laundering offenses based on these FIRs. Indiabulls officers sought relief from the High Court, arguing for the quashing of the FIR and related proceedings.
The High Court, considering the financial nature of the case, granted interim protection to the petitioners. However, the Supreme Court criticized this decision, stating that such blanket orders against arrest should not have been passed when anticipatory bail was not sought by the accused.
Referring to the State of Telangana vs. Habib Abdullah Jeelani and Others, the Supreme Court highlighted that directions not to arrest amount to an order of anticipatory bail.
The Court found the impugned order to be contrary to established legal principles and set it aside.
The judgment clarified that these observations do not delve into the merits of the ongoing case before the High Court. The case title is “DIRECTORATE OF ENFORCEMENT vs. NIRAJ TYAGI,”