Indiabulls PIL

SYNOPSIS
The Petitioner organisation has filed the instant writ petition under
Article 226 of the Constitution of India seeking direction for an in-depth,
thorough and time bound investigation by a SIT into various serious
illegalities, violations and siphoning committed by the promoters of
Indiabulls Housing Finance Limited (IBHFL), its subsidiaries and their
promoters. The petitioner has further sought directions to the Ministry
of Corporate Affairs, Registrar of Companies (ROC), Serious Fraud
Investigation Office (SFIO), National Housing Bank (NHB), Reserve
Bank of India (RBI), Securities and Exchange Board of India (SEBI) to take
action against IBHFL and its promoters/owners. As of date, there has
been complete inaction of the respondent authorities against IBHFL.
IBHFL through its promoters and their various group companies and
subsidiary companies has been advancing dubious loans to companies
owned by large corporate groups which in turn have been routing the
money back to the accounts of companies owned by the promoters of
Indiabulls, so as to increase their personal wealth.
IBHFL has in the past many years taken huge sums of loans from various
public and private banks which means that public money is at stake,
along with the money invested in IBHFL by its shareholders and
investors. The financial details of Indiabulls Housing Finance Ltd, with
details of borrowings inter alia show that hundreds of companies are
registered at the same address as that of Indiabulls thereby suggesting a
staggering number of dummy companies having been created by
Indiabulls.
According to its annual report for the fiscal year 2017–18, IBHFL has
disbursed loans totaling a sum of Rs. 1,22,578 crore, registering a 34.3%
growth over the previous year. The company saw its revenues grow by
25.1% to Rs. 14,640 crore in the period, enabling it to earn Rs. 3847 crore
in profit after tax, a 32.4% growth. But post this phenomenal growth,
IBHFL has a total outstanding debt of Rs. 96,204.58 crore and its liabilities
stand at Rs. 113,463.50 crore as in March 2019, against Rs. 1,00,356.45
crore a year before, about six times more than reserves and net worth,
which stand at Rs. 17,173.44 crore and Rs. 17,258.92 crore, respectively.
There are many newspaper reports, primary documents such as balance

sheets, ROC records which are available in the public domain which
show the irregularities and illegalities committed by the IBHFL. These
documents show that IBHFL and companies owned by its promoters
have been involved in round tripping of funds in violation of the relevant
laws and policy guidelines and they have also not disclosed sources
thereof and their books of account also did not show the true state of
affairs. However, the authorities concerned have failed to do any
investigation into these allegations/reports and take required action
against them, which poses serious risk and threat to the public interest.
The inaction of the respondent authorities results in undermining of the
law and the regulatory structure. In light of the above, the petitioner is
moving the instant writ petition in public interest.
The instant petition shows an analysis of 5 companies to which IBHFL

has given huge loans. Some of the findings of the analysis are:
i. Out of a total loan of Rs. 1580 crores that five Reliance ADAG
companies received from IBHFL in loans, Rs. 570 crores were
invested back in nine Indiabulls subsidiaries through debentures.
ii. Three Chordia Group companies received Rs. 1209.50 crores from
IBHFL in loans. This loan was squared up through money
diverted from Mahalunge Land Developers (group Company of
Chordia) from the amount borrowed from IBHFL. In addition tRs.
50 crores was paid as professional fee to Indiabulls Real Estate
Limited.
iii. IBHFL loaned about Rs. 4600 crores to 51 companies of Vatika
Group, many of which were pass-through companies, with a
paid-up capital of barely Rs. 1 lakhs. Agnes Developers, one of
the Vatika Group companies, ploughed back Rs. 200 crores each
in Karkinos Constructions and India Best Buy in the form of
debentures.
iv. Similarly, IBHFL has put in more than Rs. 1705 crores in 48
companies of DLF Group, many of which have negative worth.
Interestingly, three DLF group companies have invested Rs. 66
crores back in EMU Realcon, an Indiabulls subsidiary.
v. Four Americorp Group companies received about Rs. 151
crores from IBHFL, which is invested back in four Indiabulls
Group companies, including IBHFL.
vi. Many Indiabulls promoter group companies have been found to
have been indulging in various malpractices, such as round-
tripping, kickbacks and tax evasion, involving several thousand
crores of rupees.
The aforesaid activities of IBHFL and its promoters are in violation of

various statutes and polices like evasion of Income Tax, violation of rules
and regulations of Reserve Bank of India (RBI), SEBI, National Housing
Bank and other laws. The central government, ROC or the Ministry of
Corporate affairs ought to have filed a complaint and taken action on the
violation of Section 77 (creating of charge with the ROC) by the
borrowing companies as laid down in Section 86 of the Companies Act
2013. ROC ought to have further exercised powers under Section 206 to
call for further information, inspection of books and conducted inquiries.
Central Government ought to have further entrusted the investigation of
the murky deals of IBHFL to the SFIO. National Housing Bank, under
the National Housing Bank Act 1987, ought to have exercised its powers
to inspect the records, to collect information from HFCs. NHB ought to
have further directed a special audit of the accounts of IBHFL by
appointing its own auditors as envisaged in Section 33 of the NHB Act,
1987. The NHB should have further made a complaint about the
irregularities of the dealings of IBHFL as per procedure laid down in
Section 50 of the NHB Act, 1987. SEBI should have also taken action inter
alia under Section 11, 11A, 11B, 11C and 11D to investigate into the affairs
of IBHFL.
The petitioner submits that the instant scam follows close to the heels of
scams such as those perpetrated by ICICI Bank, IL&FS and Dewan
Housing Finance Limited. It illustrates how promoters and persons in
charge of large NBFCs have looted public monies invested in them and
diverted them to their own companies using shell companies. In this
process, huge amount of public money involving lakhs of crores is being
looted. It is submitted that the clout of the promoters of these companies
is such that the regulators have closed their eyes to these frauds
happening right under their noses. Hence, the instant writ petition.
LIST OF DATES
DATES PARTICULARS
1999-2004 Indiabulls (Respondent No.8 herein), a leading finance

company and now an NBFC, was founded by Sameer
Gehlaut in 1999. The company went public with listing in
Bombay Stock Exchange (BSE) in 2004.As per its website, the
group has a net worth of over Rs. 75,838 crores. Apart from
Indiabulls Housing Finance Limited (IBHFL), the group
owns Indiabulls Real Estate, Indiabulls Commercial Credit,
Indiabulls Ventures, Indiabulls Infra & Power and scores of
other privately held companies, with their ownership
divided between partners. IBHFL contributes to
approximately 80% of the Indiabulls group’s turnover.
2013-14 IBHFL advanced loans to various companies belonging to

Vatika Group such as Garin Developers, Felisa Developers
etc.
2014-15 IBHFL advanced loans to various companies belonging to
Vatika Group such as Misaki Developers, ZIna Developers
etc.
2015-16 IBHFL advanced loans to companies belonging to Vatika
Group such as Shivsagar Builders
2016-17 • IBHFL extended loans to the tune of Rs. 151.90 crores
to subsidiaries of Americorp Group.
• IBHFL extended loans to the tune of Rs. 1580 crores to
various group companies of Reliance ADAG.
• IBHFL advanced loans to various companies
belonging to Vatika Group.
• IBHFL advanced loans to various companies
belonging to Vatika Group such as Haben Developers
Pvt. Ltd, Haldis Developers Pvt. Ltd.
2017-18 • The money loaned to Americorp Group companies

was ploughed back to IBHFL through Jasol
Investment and Trading Pvt. Ltd and Joindre Finance
Pvt. Ltd. Infact, total of Rs. 254 crores was invested
back by Americorp group companies to IBHFL
subsidiaries.
• The money loaned by IBHFL to Reliance ADAG was
invested back in Indiabulls group companies owned
by Sameer Gehlaut.
• IBHFL extended loans to the tune of 1209.50 to various
group companies of Chordia Group. In the same year,
50 crores was paid to IB Real Estate Ltd. as
professional fees. 43.88 lakhs was paid to Deloitte.
• IBHFL extended loans to various DLF group
companies.
2017–18 • According to its annual report, for the fiscal 2017–18

IBHFL has disbursed loans totaling a sum of Rs.
1,22,578 crores, registering a 34.3% growth over the
previous year. The company saw its revenues grow by
25.1% to Rs. 14,640 crores in the period, enabling it to
earn Rs. 3847 crores in profit after tax, a 32.4% growth.
• IBHFL has been extending huge loans to various
companies and these companies in turn are routing a
substantial part of the money back as investment in
equities to companies apparently belonging to the
key-shareholders/promoters of IBHFL including
Sameer Gehlaut, the founder and Chairman of IBHFL
and his family members. In other words, borrowing
companies bestow huge benefits to the key
shareholders and Chairman of IBHFL for the favour
they get in the form of loans from IBHFL.
• IBHFL extended loans to various DLF group
companies.
• DLF Group Companies such as Malayeka Builders,
Cotys Buildcon and Naja Builders invest 66 crores by
way of preference shares in EMU Realcon owned by
Sameer Gehlaut.
• Agnes Developers (Vatika group company) invested
in debenture of Karkinos for Rs. 200 crores
• Agnes Developers (Vatika Group Company) invested
in debentures of India Best Buy for Rs. 200 crores.
24.11.2017 In April 2016, Sameer Gehlaut’s name appeared in the leaked

documents of Panamanian law firm Mossack Fonseca, better
known as the Panama Papers. It was found that Sameer
Gehlaut had bought three top London properties through a
web of intermediary companies all leading to SG Family
Trust owned by the parents of Divya Gehlaut, wife of Sameer
Gehlaut. A news report, dated 24.11.2017, published in
Indian Express described the surreptitious route taken by
Sameer Gehlaut for the purchase of top properties in
London.
11.12.2018 SEBI has also in the past probed the violations of take-over
regulations by Indiabulls. In December 2018, Indiabulls paid
Rs. 48 lakh as settlement fees to settle this case. As per the
media report, dated 11.12.2018, published in Economic Times,
“The regulator agreed to settle proposed adjudication proceedings
in the case after it was approached by Gehlaut, Orthia Properties,
Orthia Constructions, Zelkova Builders, Innus Properties and
Innus Developers with a plea to settle the matter "without
admitting or denying the findings of fact and conclusions of law"
through a settlement order.”
March 2019 IBHFL has a total outstanding debt of Rs. 96,204.58 crores
and its liabilities stand at Rs. 113,463.50 crores as in March
2019, against Rs. 1,00,356.45 crores a year before, about six
times more than reserves and net worth, which stand at Rs.
17,173.44 crores and Rs. 17,258.92 crores, respectively.
14.06.2019 In July 2016, suspecting tax evasion by Indiabulls, the Income

Tax Department carried out massive raids at 20 premises of
the company in Mumbai and Delhi. Thereafter, in June 2019,
the Income Tax Settlement Commission issued order
directing Indiabulls to pay 300 crores as tax and interest
charges on the undisclosed income detected during the IT
raid on the company. As per the news report, dated
14.06.2019, published in Business Standard, IT department
had unearthed 800 crores of undisclosed income during the
search operation carried out in 2016.
28.07.2019 Dr. Subramanian Swamy, Member of Parliament submitted

a letter/complaint, dated 28.07.2019, against IBHFL to the
Prime Minister.
10.06.2019- As per news reports, a writ petition was filed on the issue in
13.06.2019 the Hon'ble Supreme Court by one Abhay Yadav (Writ
Petition (Criminal) Diary (Nos.) 20710/2019 before the vacation
bench on 10.06.2019. However, as per the media reports the
same was withdrawn two days later on 13.06.2019.
07.08.2019 A number of financial institutions that IBHFL has taken

loans are Public Sector Undertakings. The financial details of
Indiabulls Housing Finance Ltd, with details of borrowings
as on 07.08.2019, inter alia show that hundreds of companies
are registered at the same address as that of Indiabulls
thereby showing a staggering number of dummy companies
having been created by Indiabulls.
04.09.2019 The Petitioner filed the instant writ petition before this
Hon’ble Court.
IN THE HIGH COURT OF DELHI, AT NEW DELHI
CIVIL ORIGINAL JURISDICTION
WRIT PETITION (C) NO.______________ OF 2019
(UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA)
Public Interest Litigation:
IN THE MATTER OF:
CITIZENS WHISTLE BLOWERS FORUM …PETITIONER
VERSUS
UNION OF INDIA &ORS. …RESPONDENTS
PAPERBOOK
(FOR INDEX KINDLY SEE INSIDE)
ADVOCATE FOR THE PETITIONER: KAMINI JAISWAL

IN THE MATTER OF:
CITIZENS WHISTLE BLOWERS FORUM …PETITIONER
VERSUS
UNION OF INDIA &ORS. …RESPONDENTS
NOTICE OF MOTION
Sir,
Please find enclosed herewith a complete set of Writ Petition which is
being filed by the Petitioner and the same is likely to be listed on
___________________ or soon thereafter.
Filed Through:
(KAMINI JAISWAL)
COUNSEL FOR PETITIONER
43, LAWYERS’ CHAMBERS,
SUPREME COURT OF INDIA
NEW DELHI-110001
MOB NO. 9818572400, 9810238874
Date:
Place: New Delhi

(UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA)
Public Interest Litigation:
IN THE MATTER OF:
CITIZENS WHISTLE BLOWER FORUM

THROUGH ITS SECRETARY
6/6, BASEMENT, JUNGPURA B,
NEW DELHI-110014 …THE PETITIONER
VERSUS
1. UNION OF INDIA
THROUGH ITS SECRETARY
MINISTRY OF CORPORATE AFFAIRS
SHASTRIBHAWAN, NEW DELHI – 110001 …. RESPONDENT NO. 1
2. NATIONAL HOUSING BANK

THROUGH ITS MANAGING DIRECTOR
CORE 5-A, INDIA HABITAT CENTRE,

LODHI ROAD, NEW DELHI-110003 …. RESPONDENT NO. 2
3. RESERVE BANK OF INDIA

THROUGH ITS GOVERNOR
OFFICE, MUMBAI - 400 001 …. RESPONDENT NO. 3
4. THE REGISTRAR OF COMPANIES - KOLKATA,

NIZAM PALACE,
2ND MSO BUILDING,
2ND FLOOR, 234/4 A.J.C.B. ROAD,
KOLKATA - 700020 …. RESPONDENT NO. 4
5. SERIOUS FRAUD INVESTIGATION OFFICE

THROUGH ITS DIRECTOR
2ND FLOOR, PARYAVARANBHAWAN,
CGO COMPLEX, LODHI ROAD,
NEW DELHI, DELHI-110003 …. RESPONDENT NO. 5
6. SECURITIES AND EXCHANGE BOARD OF INDIA

THROUGH ITS CHAIRMAN
5TH FLOOR, BANK OF BARODA, BUILDING 16,

SANSADMARG, NEW DELHI, DELHI …. RESPONDENT NO. 6
7. INDIABULLS HOUSING FINANCE LTD.

THROUGH ITS MANAGING DIRECTOR,
INDIABULLS HOUSE, 448-451,
UDYOGVIHAR, PHASE - V,
GURUGRAM-122001,
HARYANA …. RESPONDENT NO. 7
8. SAMEER GEHLAUT
INDIABULLS HOUSE, 448-451,
UDYOGVIHAR, PHASE - V,
GURUGRAM-122001,
HARYANA …RESPONDENT NO. 8
A WRIT PETITION IN PUBLIC INTEREST UNDER ARTICLE 226 OF

THE CONSTITUTION OF INDIA FOR ISSUING APPROPRIATE
WRIT FOR INITIATION OF INDEPENDENT INVESTIGATION BY
AN SIT AND OTHER AUTHORITIES INTO THE FINANCIAL
ILLEGALITIES AND IRREGULARITIES COMMITTED BY INDIA
BULLS
TO
THE HON’BLE CHIEF JUSTICE AND
HIS LORDSHIP’S COMPANION JUSTICES OF
THE HON’BLE HOGH COURT OF DELHI
THE HUMBLE PETITION OF THE

PETITIONER ABOVENAMED
MOST RESPECTFULLY SHEWETH:
1. That the Petitioner is filing the instant Writ Petition in public
interest. The Petitioner has no personal interest in the litigation and
the petition is not guided by self-gain or for gain of any other person
/ institution / body and that there is no motive other than of public
interest in filing the Writ Petition.
2. That the Petitioner has based the instant writ petition on official
documents and correspondence which are part of official record.
3. That the petition, if allowed, would benefit the public exchequer
and which in turn would benefit the citizens of this country. Since
these persons are too numerous and have no direct personal interest
in the matter, they are unlikely to approach this Hon’ble Court on
this issue. Hence, the Petitioner has preferred this PIL.
4. That the Petitioner by way of the present PIL highlights the
complete inaction of the respondent authorities against Indiabulls
Housing Finance Limited (IBHFL). IBHFL through its promoters
and their various group companies and subsidiary companies has
been advancing dubious loans to companies owned by large
corporate groups which in turn have been routing the money back
to the accounts of companies owned by the promoters of Indiabulls,
so as to increase their personal wealth. The primary documents
such as balance sheets, ROC records which are available in the
public domain suggest a vast web of companies involved in various
dubious deals, loans, investments, round tripping of funds to
benefit the companies owned by the promoters of Indiabulls. The
Respondent No. 1 herein is Union of India through the Secretary,
Ministry of Corporate Affairs. The Respondent No. 2 herein is
National Housing Bank (NHB), which is the regulatory body for all
housing finance companies. Respondent No. 3 is the Reserve Bank
of India (RBI) through its Governor. Respondent No. 4 is Registrar
of Companies, Respondent No. 5 is Serious Fraud Investigation
Office (SFIO). Respondent No. 6 Securities and Exchange Board of
India (SEBI), Respondent No. 7 is Indiabulls Housing Finance Ltd.
through its Managing Director. Respondent No. 8 is Sameer
Gehlaut, the founder and chairman of Indiabulls Group.
5. To the best of the knowledge of the Petitioner, no other persons /
bodies / institutions is likely to be affected by the orders sought in
the writ petition. The petitioner herein has filed limited documents
in the instant writ petition to show the illegalities and irregularities
committed by the Respondent company. The petitioner seeks leave
of this Hon’ble Court to file more documents as and when deemed
necessary.
6. That the Petitioner herein, Citizens Whistle Blower Forum (CWBF),
is a registered organisation working to provide a platform to
whistleblowers across to country and to take up litigation on their

behalf in order to provide them anonymity and to instill in them the
necessary confidence to make disclosures without fear, arrange for
their objective and impartial investigation and help to take such
cases to their logical conclusions in a time bound manner. The
forum consists of eminent members of civil society such as Justice
(Retd.) A P Shah, former Chief Justice, High Court of Delhi and
High Court of Chennai; Admiral (Retd.)L Ramdas, former Chief of
Naval Staff; Ms. Aruna Roy, former IAS officer and founder of the
National Campaign for People’s Right to Information; Mr. Wajahat
Habibullah, former Secretary Government of India and First Chief
Information Commissioner of the Central Information
Commission; Mr. E A S Sarma, Former Secretary to the Government
of India; Mr. Jagdeep S Chhokar, founder of Association of
Democratic Reforms; and Mr. Prashant Bhushan, lawyer. The
Petitioner organization has in the past brought to light various
issues of public concern by way of holding press conferences and
public meetings. The petitioner has means to pay the cost, if any
imposed by this Hon’ble Court.
7. That the petitioner has not filed any representation on the said issue
to any authority because already several complaints have been
made against IBHFL, one notably by Dr. Subramanian Swamy,
Member of Parliament. A copy of the letter dated 28.07.2019
submitted by Dr. Subramanian Swamy to the Prime Minister is
annexed herewith as Annexure P1. As per news reports, a writ
petition was filed on the issue in the Hon'ble Supreme Court by one
Abhay Yadav (Writ Petition (Criminal) Diary (Nos.) 20710/2019

before the vacation bench on 10.06.2013. However, as per the media
reports the same was withdrawn two days later on 13.06.2019. That
all the facts mentioned in the instant writ petition are based on the
documents which are already in public domain like Balance Sheets,
Auditors’ Reports, ROC documents and Media reports etc.
8. That the petitioner organization has not filed any PIL in the past. It
has however, campaigned and held press conferences on issues
such as the irregularities and violations of FERA and FEMA by
Multi National Accounting Firms in India.
FACTS IN BRIEF
9. That the Petitioner organisation has filed the instant writ petition
under Article 226 of the Constitution of India seeking direction for
an in-depth, thorough and time bound investigation into the
various illegalities and violations committed by the promoters of
IBHFL, its subsidiaries and their promoters.
10. That the aforesaid activities of IBHFL and its promoters are in
violation of various statutes and polices relating to Companies Act,
2013, rules and regulations of Reserve Bank of India (RBI), SEBI,
National Housing Bank and other laws. The violations of various
aforesaid regulations, policies and statues, prima-facie, make a fit
case for thorough investigation into the affairs of IBHFL and any
inaction of the relevant authorities to investigate could result in
jeopardizing and undermining of public interest, rule of the law and
the regulatory structure besides probable loss to the public
exchequer.
11. That the documents available with the petitioner organization show
that IBHFL and companies owned by its promoters have been
involved in round tripping of funds in violation of the relevant laws
and policy guidelines and they have also not disclosed sources
thereof and their books of account also did not show the true state
of affairs. However, the authorities concerned have failed to do any
investigation into these allegations/reports and take required
action against them, which poses serious risk and threat to the
public interest. The inaction of the respondent authorities results in
undermining of the law and the regulatory structure. In light of the
above, the petitioner is moving the instant writ petition in public
interest.
12. That Indiabulls, a leading finance company and now an NBFC was
founded in 1999. The company went public with listing in Bombay
Stock Exchange (BSE) in 2004 and the group has in a span of about
two decades grown into a well-known diversified group with
interests in housing finance, consumer finance, real estate, securities
and power, among other. As per its website, the group has a net
worth of over Rs. 75,838 crore. Apart from IBHFL, the group owns
Indiabulls Real Estate, Indiabulls Commercial Credit, Indiabulls
Ventures, Indiabulls Infra & Power and scores of other privately
held companies, with their ownership divided between partners.
13. Indiabulls Housing Finance Limited (IBHFL), the group flagship,
has emerged as one of the largest housing finance companies
among non-banking finance companies (NBFCs), with over 220

branches in 110 cities across India. It is the 2nd largest housing
finance company in India and is regulated by the National Housing
Bank (NHB). IBHFL contributes to approximately 80% of the
Indiabulls group’s turnover. According to its annual report for the
fiscal year 2017–18, IBHFL has disbursed loans totaling a sum of Rs.
1,22,578 crore, registering a 34.3% growth over the previous year.
The company saw its revenues grow by 25.1% to Rs. 14,640 crore in
the period, enabling it to earn Rs. 3847 crore in profit after tax, a
32.4% growth. But post this phenomenal growth, IBHFL has a total
outstanding debt of Rs. 96,204.58 crore and its liabilities stand at Rs.
113,463.50 crore as in March 2019, against Rs. 1,00,356.45 crore a
year before, about six times more than reserves and net worth,
which stand at Rs. 17,173.44 crore and Rs. 17,258.92 crore,
respectively. A copy of relevant pages of IBHFL Annual Report for
FY 2017-18 are annexed herewith as Annexure P2.
14. That a number of financial institutions that IBHFL has taken loans
are Public Sector Undertakings. A copy of financial details of
Indiabulls Housing Finance Ltd with details of borrowings as
available with the MCA and in public domain from website names
Zauba Corp is annexed herewith as Annexure P3 (colly). The said
document from Zauba Corp. also shows that hundreds of
companies are registered at the same address as that of Indiabulls
thereby showing a staggering number of dummy companies
having been created by Indiabulls.

15. That IBHFL has been extending huge loans to various companies
and these companies in turn are routing a substantial part of the
money back as investment in equities to companies apparently
belonging to the key-shareholders/promoters of IBHFL including
Sameer Gehlaut, the founder and Chairman of IBHFL and his
family members. In other words, borrowing companies bestow
huge benefits to the key shareholders and Chairman of IBHFL for
the favour they get in the form of loans from IBHFL.
16. A substantial part of the money loaned by IBHFL to various
companies has been invested/ploughed back into companies
owned by promoters/owners of Indiabulls, either directly or
indirectly through subsidiaries. The intent of all these methods is to
create private wealth out of public money. The mode of investing
this money back to IB promoter companies is in the following three
ways:
a. By investing in Preference Shares of IB group subsidiaries:
These are shares which entitle the holder to a fixed dividend, whose
payment takes priority over that of ordinary share dividends. This
has been done in the case of India Best Buy.
b. By investing Compulsory Convertible Debentures. CCD is a
type of debt instrument, to be returned to the holder after a certain
period of time. These debentures have been issued to the investing
companies at a ridiculous rate of interest of 0.01%. There is no
reason why any company would invest so much money at such a

low rate of interest. This is a clear case of round tripping or
kickback. Two glaring instances of the same are two Indiabulls
Group Companies Karkinos Constructions and India Best Buy
which got Rs. 200 crores each from Agnes Developers (a subsidiary
of Vatika). In this way Indiabulls group companies are also able to
raise a huge amount of interest income by way of investing the same
in other companies.
c.)By receipt of Mobilization Advance: Mobilization advance
means an advance paid to a contractor for mobilization of resources
for a project. A glaring case of this kind of malpractice is that of
Myrina Real Estate, a subsidiary of Indiabulls.
17. That many of the companies to which IBHFL has extended these
loans have a small paid up capital, do not have any fixed assets and
are not even engaged in any business activities. The directors and
office addresses of many of these companies are also common. A
majority of these borrower companies have also failed to file charge
with the Ministry of Corporate Affairs (MCA). However, after a PIL
was filed on the issue (subsequently withdrawn), many of the
borrower companies hurriedly filed charge with the MCA.
18. Companies Act, 2013 defines “charge” as an interest or lien created
on the property or assets of a company or any of its undertakings
or both as security and includes a mortgage. Section 77 of the
Companies Act, 2013, under which the borrowing companies are
required to file Charge document with the Ministry of Corporate

Affairs showing the amount borrowed and security given to the
lender company within 30 days of the transaction.
19. Hence, charge is a type of security created on some property of the
company to secure a loan. It is the duty of every company to register
with the Registrar of Companies specific charge created by the
company on its assets. The purpose of registration of charge is to
provide public notice to those who contemplate giving credit to the
company on how far the property of the company is encumbered.
20. The petitioner organization has identified 5 groups of companies,
which have been extended huge sums of loans by IBHFL. In a
typical instance of quid pro quo, a good part of the loaned money
has been ploughed back into various Indiabulls Group companies
owned or promoted by Sameer Gehlaut. These include Americorp
Group, Reliance ADAG, Chordia Group, Vatika Group and DLF
Group, apart from Indiabulls’ promoter group companies. A
flowchart illustrating overall scheme of flow of money to and fro
Indiabulls and its subsidiaries is annexed herewith as Annexure
P4.
Case Analysis of five Group Companies engaged in round
tripping of funds with IBHFL
I.) Americorp Group

21. In a clear case of round-tripping, IBHFL has been found extending
loans of Rs. 151.90 crore to the Americorp Group, promoted by
Harish Fabiani, an NRI based in Madrid, Spain. The money thus
availed through loans has been ploughed back into Indiabulls
Group companies through equity investment. These are
Transpacific Business Services, Americorp Business Services,
Americorp Capital and Chennai Business Park, which IBHFL has
lent Rs. 30 crore, Rs. 30 crore, Rs. 40 crore and Rs. 30 crore,
respectively. These loans have been concealed, however.
Interestingly, Fabiani invested Rs. 254.87 crores back into
Indiabulls Group companies through his company Jasol
Investment & Trading. A flowchart showing how the round
tripping of funds with Americorp has taken place is annexed
herewith as Annexure P5 (page______to______).
a. A table showing details of loans advanced by IBHFL to

Americorp Group
S. Name of the Company Address Amount

No. loaned
(Rs. in
crore)
1. Transpacific Business Services Pvt. Ltd. 1607, 16th Floor, 30.50
Lodha Supremus,
A copy of Balance Sheet of the Opp.
Transpacific Business Services Pvt. Kamala Mills
Ltd. for the FY 2016–17 is annexed Compound,
herewith as Senapati Bapat
Annexure P6. Marg, Lower
Parel, Mumbai
2. Americorp Business - 32.40
Services Pvt. Ltd. do-
A copy of Balance Sheet of the
Americorp Business Services Pvt. Ltd.
for the FY 2015-16 is annexed herewith
as Annexure P7.
3. Chennai Business Park New No. 57, 50.00

Pvt. Ltd. Second Floor,
A copy of Balance Sheet of the Chennai Bazullah Road, T.
Business Park Pvt. Ltd. for the FY Nagar, Chennai
2017-18 is annexed as
Annexure P8.
4. Americorp Capital Pvt. - 39.00

Ltd. do-
A copy of Balance Sheet of the
Americorp Capital Pvt. Ltd. for the FY
2015-16 is annexed as Annexure P9.
Total 151.90
b. A table depicting how this money found its way back to Indiabulls
S. Name of the Investee Company Name of the Investor Invested

No. Company Amount
(Rs. in
crore)
1. Indiabulls Ventures Limited Jasol Investment & Trading 19.73
A copy of Annual Report of the Co. Pvt. Ltd.
Indiabulls Ventures Limited for A copy of Financial
the FY 2017-18 is annexed as Statement of Jasol Investment
(Annexure P10: page - & Trading Co. Pvt. Ltd. for
___to___) the FY 2016-17 are annexed
as Annexure P11.
Joindre Finance
Pvt. Ltd.
A copy of Financial
Statement of the Joindre
Finance 19.85
Pvt. Ltd. for the FY 2017-18
are annexed Annexure P12.
2. Indiabulls Housing Finance Jasol Investment & Trading 22.88
Co.Ltd. Co. Pvt. Ltd.
A copy of Balance Sheet of the (see Annexure P11)

Indiabulls Housing Finance Co.
Ltd. for the FY 2017-18 is
annexed as Annexure P13.
3. Myrina Builders Pvt. Ltd. Jasol Investment & Trading 31.00

A copy of Balance Sheet of the Co. Pvt. Ltd.
(See Annexure P11)
A copy of balance sheet of
Myrina Builders Pvt. Ltd. for the
FY 2017-18 is annexed as
Annexure P14.
4. Iphito Real Estate Pvt. Ltd. Joindre Finance 44.00

Pvt. Ltd.
A copy of relevant pages of (See Annexure P12)

Annual Report of the
Iphito Real Estate Pvt. Ltd. for the
Annexure P15.
5. Indiabulls Real Estate Co. Ltd. Jasol Investment & Trading 62.28
Co. Pvt. Ltd.
A Copy of Standalone Financial (See Annexure P11)

Statement of the Indiabulls Real
Joindre Finance 55.13
Estate Co. Ltd. for the FY 2017-18
Pvt. Ltd.
is annexed as Annexure P16.
(See Annexure P12)
Total 254.87
II.) Reliance ADAG
22. At least five companies of Reliance ADAG, owned by Anil Ambani
received a sum of Rs. 1580 crore from IBHL. As per documents, out
of this, Rs. 570 crore was ploughed back into nine companies
owned or promoted by Sameer Gehlaut directly or through group
subsidiaries. This has been done using optionally convertible
debentures, at a nominal interest of 0.01%.
a.) A table with details of loans granted by IBHFL to Reliance
ADAG companies:
S. Name of the Company Address Loaned

No. Amount
(Rs. in
crore)
1. Reliance Inceptum Pvt. 502, Plot No. 91/94, Prabhat Colony, 106
Ltd. Santacruz (East), Mumbai
A Copy of Financial
Statement of Reliance
Inceptum Pvt. Ltd. for the
Annexure P17.
2. Zapak Digital 8th Floor, 803/804, Lotus Grandeur, 156

Entertainment Limited Veera Desai Extension Road, Off Link
Road, Andheri (West), Mumbai
A Copy of Financial
Statement of Zapak
Digital Entertainment
Limited for the FY 2017-
18 is annexed as
AnnexureP18
3. Reliance Big 502, Plot No 91/94, Prabhat Colony, 210

Entertainment Pvt. Ltd Santacruz
A Copy of Financial (East), Mumbai
Statement of Reliance Big
Entertainment Pvt.
Ltd for the FY 2016-17
is annexed as Annexure
P19
4. Reliance 502, Plot No. 91/94, Prabhat Colony, 200
Communications Santacruz
Enterprises Pvt. Ltd. (East), Mumbai
5. Reliance Interactive 502, Plot No 91/94, Prabhat Colony, 908

Advisors Pvt. Ltd. Santacruz
(East), Mumbai
A copy of details of
charges registered with
ROC of Reliance
Interactive Advisors Pvt.
Ltd. for the FY 2017-18
is annexed as Annexure
P20
Total 1580
b.) A table depicting how Rs. 570 crore was invested back to
Indiabulls Group Companies
S. Name of the Name of the Lender Loaned
No. Borrower Amount (Rs.
in crore)
1. Iphito Properties Pvt. Reliance Capital Limited 10
Ltd. (a subsidiary of
Indiabulls Pvt. Ltd)
A copy of Index of
Charge of Iphito
Properties Pvt. Ltd. is
annexed as
Annexure P21.
2. Iphito Real Estate Reliance Capital Limited 20
Pvt. Ltd. (a subsidiary
of Indiabulls Pvt. Ltd)
A copy of index of
charges of Iphito Real
Estate Pvt. Ltd. is
annexed as
Annexure P22.
3. Myrina Real Estate Reliance Capital Limited 10

A copy of Index of
Charges with ROC of
Myrina Real Estate is
annexed as Annexure
P23.
4. Myrina Builders Pvt. Reliance Capital Limited 10

Ltd. (a subsidiary of
5. Orthia Real Estate Reliance Capital Limited 35

A copy of Index of
Charges showing
Orthia Real Estate Pvt.
Ltd. is annexed as
Annexure P24.
6. EMU Constructions Reliance Capital Limited 50

A copy of index of
charges of EMU
Constructions
is annexed as
Annexure P25.
7. Galax Minerals Pvt. Reliance Corporate 50
Ltd. (a subsidiary of Advisory Pvt. Ltd.
A copy of index of
charges Galax
Minerals Pvt. Ltd. is
annexed as
Annexure P26.
8. Meru Minerals Pvt. Reliance Corporate 185

Ltd. (a subsidiary of Advisory Pvt. Ltd.
A copy of index of
charges of Meru
Minerals Pvt. Ltd. is
annexed as Annexure
P27.
9. Paidia Conconnection Reliance Corporate 200

Pvt. Ltd. (a subsidiary Advisory Pvt. Ltd.
A copy of index of
charges of Paidia
Conconnection Pvt.
Ltd. is annexed as
Annexure P28.
Total 570
23. Details of how part of the money loaned by IBHFL found its way
into Galax Minerals (owned by Sameer Gehlaut): This company is
fully owned by Sameer Gehlaut, the promoter of IBHFL. A copy of
the Balance Sheet of Galax Minerals for FY 2017–18 is annexed hereto
and marked as Annexure P29. A flowchart demonstrating the flow of
money to and fro Galax Minerals is annexed herewith as Annexure
P30.
24. As the chart shows, the company has received Rs. 726.50 crore, from
Reliance Corporate, Myrina Real Estate and Iphito Real Estate (Rs. 50
crore, Rs. 589 crore and Rs. 87.5 crore, respectively). A copy of the
Balance Sheet of Myrina Real Estate for FY 2017–18, is annexed hereto
and marked as Annexure P31. A copy of the Balance Sheet of Iphito
Real Estate for FY 2017–18 is annexed hereto and marked as
Annexure P32. The loan from Reliance Corporate Advisory, like in
other cases, is in the form of debentures carrying 0.01% interest per
annum. The loan is secured by hypothecation of current assets.
However, Galax Minerals’ books of accounts show there are no
current assets or insignificant current assets available except for
investment which is not charged. Thus, the security is an eye wash
leading one to the conclude that the transaction is round tripping and
accommodation entry.
25. The fund invested by Myrina Real Estate is from the following
sources:
S. Name of Instrument/Mo Investmen Remarks

No the de ts (Rs. in
. Company crore)
(31 Mar
2018)
1. Karkinos 0.01% 847.13
Constructi Debentures
on Pvt. Ltd.
2. Source Mobilization 114.25 Facts
unknown advance concealed as
there is no
business
activity in the
company, the
receipt of the
mobilization
advance is an
accommodati
on entry to
avoid
incidence of
interest.
3. EMU 0.01% 56.39
Constructi Debentures
on Pvt. Ltd.
Total 1017.77
26. The funds invested by Iphito Real Estate were from Joindre Finance,
which belongs to Americorp Fund owned by Mr. Fabiani. Again,
the funds have been invested with the help of CCDs, which are
contrary in their nature as they can be redeemed by their holder.
III. Chordia Group companies
27. The Pune-based real estate group had its three companies: AC
Realty Spaces LLP, Built To Live Realty LLP and Mahalunge Land
Developers LLP receive huge loans from IBHFL. It is surprising to
note that IBHFL granted loans of 1209.50 crore to these companies
which came into existence between 2016 and 2017, each with a
measly paid-up capital of Rs. 50,000. While Built To Live Realty LLP
and Mahalunge Land Developers LLP are owned by Atul Chordia
and Ashok Chordia in partnership, AC Realty Spaces has Atul
Chorida and Ashok Chordia as partners, among others.
28. A table with details of loans given to Chordia Group companies by
IBHFL.
S. Name of the Address Year Loaned Current Status

No. Company Amount
(Rs. in
crore)
1. AC Realty Solitaire World, 2017–18 19.50 A copy of balance
Spaces LLP Level 8, S. No. sheet FY 2017-18
36/1/1, Opp. of AC Realty
Regency Classic, Spaces is annexed
Mumbai– herewith as
Bangalore Annexure is
Highway, Baner, annexed herewith
Pune as Annexure P33.
2. Built To Live -do- 2017–18 450 This loan was

Realty LLP repaid with
money
Mahalunge
Land
Developers
borrowed from
IBHFL.
A copy of
Balance Sheet of
Built To Live
Realty FY 2017–
18 is annexed
herewith as
Annexure P34.
3. Mahalunge -do- 2017–18 740 A copy of
Land Balance Sheet of
Developers LLP Mahalunge Land
Developers FY
2017–18 is
annexed herewith
as Annexure P35.
Total 1209.50

29. As shown in the table annexed, a sum of Rs. 450 crore that Built To
Live Realty had taken from IBHFL in 2017–18 was repaid the same
year from Rs. 740 crore that IBHFL advanced in loans to sister
concern Mahalunge Land Developers. All these limited liabilities
partnership firms of the group use a common e-mail
ID: accounts@chordiagroup.co.in.
30. It is submitted that apart from the questionable advance extended to
Built To Live Realty, these companies have indulged in other
malpractices of serious nature. For instance, Built To Live Realty has

paid Rs. 50 crore to Indiabulls Real Estate Limited as professional
fee. The company has, however, made no disclosures in this regard
in its annual report.
31. Further, Deloitte, a global auditing firm that has been in news lately
for all the wrong reasons, has been extended a hefty sum of Rs. 43.88
lakh by Built To Live Realty. AC Realty Space and Built to Live
Realty have not filed any charges with the MCA for the loans availed
by them.
32. A snapshot of irregularities observed in case of Chordia Group
companies.
S. Name of the Irregularities

No. Company
1. AC Realty • Concealment of facts by not disclosing the
Spaces LLP loan in annual report of Built to Live Realty
LLP.
2. Built To Live • A fixed capital contribution of Rs. 50,000
Realty LLP only.
• Rs. 50 crore paid to Indiabulls Real Estate
Ltd., out of the total professional fees of Rs.
117.31 crore, on September 15, 2017.
• Loaned money used to pay Pune-based
Kumar Urban Development Pvt. Ltd.,
owned by Lalit Kumar Jain, who also heads
the CREDAI, an association of real estate
developers.
• Rs. 43.88 lakh paid to Deloitte.
• Wrong disclosures on loan from IBHFL.
(See Balance Sheet Built To Live Realty for the

FY 2017–18)
3. Mahalunge • A fixed capital contribution of Rs. 50,000
Land only.
Developers LLP • Loaned money used to repay loans and
invest in shares.
• Rs. 543.79 crore withdrawn by nominee of
partner Ashok Dhanraj Chordia to repay
the existing loan of Built to Live Realty
availed from IBHFL.
• Rs. 99.21 crore given to Riverview
Properties Pvt. Ltd. (Lalit Jain).
• Rs. 15.22 crore paid to San Finance
Corporation, a stock broker, for trading in
shares.
(See Balance Sheet for FY 2017-18 of Mahalunge

Land Developers)
33. Details delineated in the table above reveal some more facts. Apart
from paying the commission to IBHFL for the favour, the loaned
money has been used to pay others. In case of Mahalunge Land
Developers, we find Rs. 543.79 crore to have been withdrawn by the
nominee of Ashok Dhanraj Chordia, a partner in the company. As
already discussed, this amount was used to repay the loan Built to Live
Realty had availed from IBHFL. Out of the loan Mahalunge Land
Developers received from IBHFL, Rs. 99.21 crore was given to
Riverview Properties, whereas Rs. 15.22 crore was paid to San Finance
Corporation for trading in shares.

IV. Vatika Group Companies
34. Details of IBHFL Loan to Vatika Group Companies: There are 51
companies of Vatika Group, most with a paid-up capital of Rs. 1
lakh, which the IBHFL has given a huge loan of whopping Rs. 4600
crore, in a dubious manner. Vatika Group is owned by Gautam
Bhalla. There are 40 companies among these with a paid up capital
of Rs. 1 lakh, and all of these companies have been granted loans
ranging from Rs. 16 crores in case of Garin Developers Pvt. Ltd. to
Rs. 184.50 crore in case of Timor Developers. Most shocking is the
case of Shivsagar Builders. Though the company has a paid-up
capital of Rs. 25 lakh only, IBHFL found it worthy of granting a loan
of Rs. 1575 crore.
35. A table with details of 51 companies of Vatika Group is given below:
S. Name of the Company Address Paid-up Loaned

No. capital Amount (Rs. in
(Rs. in crore)
crore)
1. Garin Developers Pvt. Ltd. A-20, 0.01 16

Lajpat
Nagar II,
New Delhi
2. Felisa Developers Pvt. Ltd. -do- 0.01 22
3. Valda Developers Pvt. Ltd. -do- 0.01 23
4. Valonia Developers Pvt. Ltd. -do- 0.01 27
5. Fonzell Developers Pvt. Ltd. -do- 0.01 28
6. Uland Developers Pvt. Ltd. Flat No. 0.01 25

621-A, 6th
Floor,
Devika
Towers 6,
Nehru
Place, New
Delhi
7. Misaki Developers Pvt. Ltd. -do- 0.01 41.50
8. Zina Developers Pvt. Ltd. -do- 0.01 43.30
9. Myrica Developers Pvt. Ltd. -do- 0.01 46
10. Carney Developers Pvt. Ltd. -do- 0.01 48
11. Agnes Developers Pvt. Ltd. -do- 0.01 31
12. Cebu Developers Pvt. Ltd. -do- 0.01 41
13. Acklin Developers Pvt. Ltd. -do- 0.01 21.50
14. Capparis Developers Pvt. Ltd. -do- 0.01 19
15. Jurgen Developers Pvt. Ltd. -do- 0.01 39
16. Islay Developers Pvt. Ltd. -do- 0.01 26
17. Iestin Developers Pvt. Ltd. -do- 0.01 24
18. Hadar Developers Pvt. Ltd. -do- 0.01 42
19. Bellium Developers Pvt. Ltd. -do- 0.01 46
20. Bacon Developers Pvt. Ltd. -do- 0.01 34
21. Edrea Developers Pvt. Ltd. -do- 0.01 30
22. Hagrid Developers Pvt. Ltd. -do- 0.01 29
23. Sirius Developers Pvt. Ltd. -do- 0.01 41
24. Kelsey Developers Pvt. Ltd. -do- 0.01 29

25. Polillo Developers Pvt. Ltd. -do- 0.01 19
26. Perseus Developers Pvt. Ltd. -do- 0.01 46
27. Persea Developers Pvt. Ltd. -do- 0.01 46.50
28. Quon Developers Pvt. Ltd. -do- 0.01 41.50
29. Pemba Developers Pvt. Ltd. -do- 0.01 85.50
30. Obira Developers Pvt. Ltd. -do- 0.01 45
31. Nias Developers Pvt. Ltd. -do- 0.01 41
32. Ambrym Developers Pvt. Ltd. -do- 0.01 31.50
33. Derica Developers Pvt. Ltd. -do- 0.01 42
34. Enlai Developers Pvt. Ltd. -do- 0.01 45
35. Yapen Developers Pvt. Ltd. -do- 0.01 35
36. Galicia Developers Pvt. Ltd. -do- 0.01 30
37. Gabby Developers Pvt. Ltd. -do- 0.01 32.50
38. Bioko Developers Pvt. Ltd. -do- 20.00 29
39. Haben Developers Pvt. Ltd. -do- 0.01 148
40. Haldis Developers Pvt. Ltd. -do- 0.01 159
41. Aplin Developers Pvt. Ltd. -do- 0.01 104
42. Timor Developers Pvt. Ltd. -do- 0.01 184.50
43. Shivsagar Builders Pvt. Ltd. -do- 0.25 1575

(Net amount
after discount)
44. Salton Developers Pvt. Ltd. -do- 5.00 175.50
45. Ignacio Developers Pvt. Ltd. -do- 0.01 178.50

46. Velte Developers Pvt. Ltd. -do- 0.01 28
47. Kepa Developers Pvt. Ltd. Pratisha 1.01 185

Building, 1,
Ansari
Road,
Darya
Ganj, New
Delhi
48. Aspire Promoters Pvt. Ltd. Flat No. 0.02 100
224A, 2nd
Floor,
Devika
49. Fermina Developers Pvt. Ltd. -do- 148.91
50. Sh Tech Park Developers Pvt. -do- 0.13 222.50

Ltd. (Rs. 32 crore
received from
Indiabulls
Infrastructure)
51. Sahar Land & Housing Pvt. -do- 50.30
Ltd.
Total 4601.01
A copy of the balance sheet of Garin Developers Pvt. Ltd. for FY year
2013-14 is annexed hereto and marked as Annexure P36.
A copy of the financial statement of Agnes Developers Pvt. Ltd. for FY
year 2016-17 is annexed hereto and marked as Annexure P37.
A copy of the balance sheet of Fonzell Developers Pvt. Ltd. for FY year
A copy of the balance sheet of Haben Developers Pvt. Ltd. for FY year
A copy of the balance sheet of Aplin Developers Pvt. Ltd. for FY year
A copy of the balance sheet of Timor Developers Pvt. Ltd. for FY year
A copy of the balance sheet of Shivsagar Builders Pvt. Ltd. for FY year
A copy of the financial statement of Haldis Developers Pvt. Ltd. for FY
year 2013-14 is annexed hereto and marked as Annexure P43.
A copy of the balance sheet of Ignacio Developers Pvt. Ltd. for FY year
A copy of the balance sheet of Kepa Developers Pvt. Ltd. for FY year
A copy of the financial statement of Sahar Land & Housing Pvt. Ltd.
Promoters Pvt. Ltd. for FY year 2017-18 is annexed hereto and marked
as Annexure P46.
A copy of the financial statement of Fermina Developers Pvt. Ltd. for
FY year 2014-15 is annexed hereto and marked as Annexure P47.
36. That out of fifty-one companies, 40 companies work out of Flat No.
621-A, 6th Floor, Devika Towers 6, Nehru Place, New Delhi. Other
big beneficiaries among these companies with a paid-up capital of
Rs. 1 lakh are Haldis Developers which got Rs. 159.00 crore, Aplin
Developers Rs. 104 crore, Timor Developers Rs. 184.50
crore, Ignacio Developers Rs. 178.50 crore and Kepa Developers
Rs. 185 crore. Similarly, Aspire Promoters Pvt. Ltd. with a paid-up
capital of Rs. 2 lakh was given a loan of Rs. 100 crore, whereas Sh
Tech Park Developers with a paid-up capital of Rs. 13 lakh only, was
granted a loan of Rs. 222.50 crore. It is clear from this that IBHFL did
not do any due diligence and went about giving huge loans for
reasons known only to the promoters.
37. Another question is whether all the money received in loans used to
fulfill the intended purpose for which it was borrowed. An analysis
of companies produced in table below shows that the answer is no.
All the 35 companies of Vatika Group analyzed were incorporated
in 2012–13 and 2013–14 with a paid-up capital of a paltry 1 lakh,
perhaps, only to avail loans and divert the funds to the parent
company Vatika Ltd., which could ever-green the huge loans it has
borrowed from various financial institutions. None of these pass-
through companies has filed charges with the MCA. Many of these
companies’ ownership was transferred after availing loans and in
some cases to even employees. There has been an apparent attempt
to omit the name of IBHFL from the notes in their balance sheets. It
is surprising that IBHFL gave such huge loans to all these pass-
through companies without bothering how it would recover all the
money, unless there was a tacit understanding between the lender
and the borrower. A table depicting how Vatika Group companies
deployed money loaned by IBHFL is annexed as Annexure P48.
38. Details of how Vatika Group Company (Agnes Developers) has
invested back in Karkinos Constructions (owned by Sameer
Gehlaut): Karkinos Constructions is 100% owned by EMU
Construction, which is 100% subsidiary of Mugwort Real Estate and
which in turn is 100% owned by Sameer Gehlaut. A copy of the
Balance Sheet of Karkinos Construction for FY 2017–18 is annexed
hereto and marked as Annexure P49. A copy of the annual report of
Mugwort Real Estate for FY 2017–18 is annexed hereto and marked
as Annexure P50.
39. Karkinos Constructions received Rs. 200 crore from Agnes
Developers owned by Vatika Group as investment in debentures in
the year 2014-2015. A copy of the Annual Report of Agnes
Developers for FY 2014–15 is annexed hereto and marked as
Annexure P51. Apparently, this loan was doled out of advance of
Rs. 4601.01 crore that the company had received from IBHL. Agnes
Developers has also received a substantial amount in loan from
IBHL, but the company has filed no charge with the MCA.
40. Karkinos Constructions, which has no significant assets on record is
reported to have recorded Rs. 724 crore in security deposits in 2017–

18 under the head “Long Term Loan”, a wrong classification and
clear departure from standard accounting procedures. It is
submitted that this security deposit is purely an accommodation
entry to avoid disclosure of terms of loan and incidental interest. In
addition, the source of this deposit is unknown, raising questioning
about its legitimacy. In addition, an amount of Rs. 199.61 crore is
appearing as bank temporary overdrawn without any credit facility
availed by the company from any bank. The huge bank overdraft is,
perhaps, representing an accommodation entry to avoid disclosure
of a transaction which may be outstanding on the reporting date of
the balance sheet.
41. As the chart annexed shows, Rs. 1316 core has been invested in
various subsidiary companies promoted by Sameer Gehlaut. Here
again, CCDs used to raise funds are with no or insignificant interest
which can be redeemed by the holder. A copy of the flowchart
showing the flow of money to and fro Karkinos Constructions is
annexed herewith as Annexure P52.
42. Agnes Developers invested Rs. 200 crore in debentures in 2014–15
and the same were redeemed in 2017–18. The interest of 0.01% on
these debentures is ridiculously insignificant and if one has to take
a market rate of interest at 10%, the favour returned in
consideration of the illicit loan advanced by IBHFL to Vatika
Group works out to be Rs. 60 crore in three years.

V.) DLF Group Companies
43. As in the case of Vatika Group, IBHFL has given as loans more than
Rs. 1705.54 crore in 48 companies of DLF Group, the real estate
major, owned and promoted by K.P. Singh. Many of these
companies have negative worth, and all are pass-through
companies which have been used to garner huge sums of loans and
use them for purposes other than intended ones. As per information
of the petitioner, these companies have not filed any charges with
the MCA. As the table produced below illustrates, the most curious
case is that of Felicite Builder & Constructions. Despite a negative
worth, IBHFL gave the company a loan of Rs. 173.40 crore to
Atherol Builders & Developers Pvt. Ltd, subsidiary of Felicite
Builder & Constructions. Interestingly, Felicite Builder &
Constructions is also holding company for 30 subsidiaries of the
group and all have taken loans from IBHFL. The loan money was
used to buy land and give loans to group companies. A part of this
land is acquired by the government on a higher compensation.
After the scam surfaced in public domain, it was found that many
of the companies in question started to file charges with the MCA.
A table with details of IBHFL loans advanced to DLF group
companies is annexed herewith as Annexure P53.
44. Details of how DLF group companies (Cotys Buildcon Pvt. Ltd.,
Malayeka Builders and Developers and Naja Builders and
Developers) transfer a substantial part of the money loaned by
IBHFL to EMU Realcon (owned by Sameer Gehlaut): It is a 100%
step-down subsidiary of Mugwort Real Estate (Mugwort) through

EMU Construction Private Limited. Mugwort is, in turn, 100%
owned by Sameer Gehlaut. The shareholding of EMU Construction
in Emu Realcon was transferred in 17–18 to Cleta Buildtech Pvt.
Ltd., a 100% subsidiary of Inuus Land Development Pvt. Ltd.
which, in turn, is 100% owned by Sameer Gehlaut. A copy of
Annual Report of Inuus Land Devlopment for FY 2017–18 is
annexed hereto and marked as Annexure P54. A copy of the
Annual Report of Cleta Buildtech for FY 2017–18 is annexed hereto
and marked as Annexure P55. A copy of the Annual Report of
EMU Realcon for FY 2017–18 is annexed hereto and marked as
Annexure P56.
45. Remarkably, there are two pass-through companies between
Sameer Gehlaut and EMU Realcon, the names of which are
changed with the passage of time by transferring the entire
shareholding of these pass-through companies to a new set of
companies, with Sameer Gehlaut being the ultimate beneficiary.
The transaction is done at face value, without appreciating and
determining the fair value of the transferred shares, causing
substantial loss to the government exchequer in the form of capital
gains tax. It is submitted that the layering at three levels might have
been done to deceive the regulatory authorities. A flowchart
depicting the flow of money to and fro Emu Realcon is annexed
herewith as Annexure P57.
46. EMU Realcon has received an infusion of Rs. 66 crore in the form
of preference shares from the following three companies:

S. Name of the Company Amount
No. Received
(Rs. in
crore)
1. Cotys Buildcon Pvt. 22.00 (See Annual
Ltd. (DLF group Report of
company EMU
2. Malayeka Builders & 22.00 Realcon)
Developers Pvt. Ltd.
(DLF group company)
3. Naja Builders & 22.00
Developers Pvt. Ltd
(DLF Group
Company).
A copy of relevant
pages of Annual Return
of Naja Builders &
Developers for FY
2017–18 is annexed
herewith as Annexure
P58.
The amount given in

2014–15 and is still
outstanding.
A copy of relevant of
pages of Balance Sheet
for FY 2014-15 of Naja
Builders & Developers
Pvt. Ltd. Is annexed
herewith as Annexure
P59.
Total 66.00
47. That all these companies are owned by the DLF Group and have
received huge loans from IBHFL. Naja Builders & Developers still has
an outstanding loan of Rs. 49.32 crores as on March 31, 2018. This is
yet another case where charge has not been filed at the ROC.
48. That the investments made by EMU Realcon have been made using
Compulsory Convertible Debentutes (CCDs), at almost nil rate of
interest. But the terms of using this vehicle is contrary to and in
violation of standard practices. Although these debentures are

compulsory in principle, the holder of these CCDs has the liberty to
exercise the option of redeeming them. The money is being moved
from one company to another without any encumbrances, such as
payment of interest and taxes chargeable thereupon.
49. The above analysis can be summed up as follows:
i. Four Americorp Group companies received about Rs. 151
crores from IBHFL, which is invested back in four Indiabulls
Group companies, including IBHFL.
ii. Out of a total loan of Rs. 1580 crore that five Reliance ADAG
companies received from IBHFL in loans, Rs. 570 crores was
invested back in nine Indiabulls subsidiaries through debentures
iii. Three Chordia Group companies received Rs. 1209.50 crores from
IBHFL in loans. This loan was squared up through money
diverted from Mahalunge Land Developers (group Company of
Chordia) from the amount borrowed from IBHFL. In addition tRs.
50 crores was paid as professional fee to Indiabulls Real Estate
Limited.
iv. IBHFL loaned about Rs. 4600 crore to 51 companies of Vatika
Group, many of which were pass-through companies, with a
paid-up capital of barely Rs. 1 lakh. Agnes Developers, one of
the Vatika Group companies, ploughed back Rs. 400 crores in
Karkinos Constructions and India Best Buy in 2014-15 in the form
of debentures.
v. Similarly, IBHFL has put in more than Rs. 1705 crore in 48
companies of DLF Group, many of which have negative worth.

Interestingly, three DLF group companies have invested Rs. 66
crore back in EMU Realcon, an Indiabulls subsidiary.
vi. Many Indiabulls promoter group companies have been found to
have been indulging in various malpractices, such as round-
tripping, kickbacks and tax evasion, involving thousands of crores
of rupees.
Other malpractices by IBHFL
50. That apart from the above, there are various irregularities committed
by companies promoted by Indiabulls Group or its chairman Sameer
Gehlaut. These companies are EMU Realcon, Galax Minerals,
Karkinos Constructions, India Best Buy, Myrina Real Estate, Myrina
Builders, Karanbhumi Estate, Meru Minerals, Mugwort Real Estate,
Indiabulls Distribution Services, Indiabulls Infraestate, Indiabulls
Properties, Selene Constructions, Airmid Developers, Selene Estate,
Lucina Land Development, Varali Properties and Athena
Infrastructure. One of the main irregularities, used to plough public
money into private equity, is issuance of Compulsory Convertible
Debentures (CCDs) Though these debt instruments are not generally
redeemable, in the case of Indiabulls group companies redeemable
CCDs have been used. The total amount of money involved in all
these malpractices runs into thousands of crores, which is a matter of
investigation. A list of companies with Sameer Gehlaut as Director as
available on MCA website is annexed herewith as Annexure P60. A
list of companies with Divya Sameer Gehlaut as Director as available
on MCA website is annexed herewith as Annexure P61.

51. Some other companies where malpractices are apparent are given
below. The petitioner seeks liberty of this Hon’ble Court to supply
details of other such companies as and when deemed necessary.
52. Myrina Real Estate: This company is a fully owned subsidiary of
EMU Construction, which is owned by Sameer Gehlaut through
Mugwort Real Estate Limited. A copy of the Balance Sheet of Myrina
Real Estate for FY 2017–18 is annexed hereto and marked as
Annexure P62. A copy of the flowchart depicting the flow of money
to and fro Myrina Real Estate Private Ltd. is annexed herewith as
Annexure P63. The chart illustrates the capital structure of the
company and deployment of money. The chart clearly shows how a
huge sum of Rs. 1142 crores has been used out of the capital resources
thus raised to buy shares of IBHFL and Indiabulls Real Estate and
make investments in other subsidiary companies through Myrina
Real Estate.
53. It is submitted that apart from round tripping, the chart shows a
mobilization advance of Rs. 114.25 crores. Mobilization advance
means an advance paid to a contractor for mobilization of resources
for a project. However, the company has no work history in the past
and does not have any resources disclosed in the financial statement.
Also, the mobilization advance is pending since long. Above all, the
same is shown as long-term borrowing in the financial statement,
which is a material departure from accounting norms. The
transaction appears to be a sham transaction or accommodation entry
to avoid levy of interest or to avoid disclosure of name in the financial

statement. CCDs used to raise funds have the same character as
discussed above.
54. Myrina Builders: The company is a fully owned subsidiary of EMU
Construction, which in turn is owned by Sameer Gehlaut through
Mugwort Real Estate Limited. A copy of the relevant pages of Annual
Report of Myrina Builders for FY 2017–18 is annexed hereto and
marked as Annexure P64. As the chart produced here illustrates the
capital raised and deployed, we see an investment of about Rs. 614
crore in India Best Buy and another subsidiary by Myrina Builders. A
flowchart showing flow of money to and fro Myrina Builders Pvt Ltd.
is annexed herewith as Annexure P65. Here again, CCDs used to raise
funds are contrary in character, which though compulsory can be
redeemed by the holder of the instrument.
55. Mugwort Real Estate: The company is fully owned by Sameer
Gehlaut, has no work history in the past and does not have any
resources shown in the financial statement, either. Also, the
mobilization advance is pending since long. Above all, the same is
shown as long-term borrowing in the financial statement, which is a
material departure from accounting norms. It appears to be a sham
transaction or accommodation entry to avoid levy of interest or to
avoid disclosures of beneficiaries in the financial statement. The
proceeds of mobilization advance have been used to acquire equity
shares of Gloxina Infrastructure, EMU Construction and Keysha
Mining. It is submitted that all these companies are owned and
managed by Sameer Gehlaut.

56. That in April 2016, Sameer Gehlaut’s name appeared in the leaked
documents of Panamanian law firm Mossack Fonseca, better known
as the Panama Papers. It was found that Sameer Gehlaut had bought
three top London properties through a web of intermediary
companies all leading to SG Family Trust owned by the parents of
Divya Gehlaut, wife of Sameer Gehlaut. A copy of news report dated
24.11.2017 describing the surreptitious route taken by Sameer
Gehlaut for the purchase of top properties in London published in the
Indian Express is annexed herewith as Annexure P66.
57. In July 2016, suspecting tax evasion by Indiabulls, the Income Tax
Department carried out massive raids at 20 premises of the company
in Mumbai and Delhi. Thereafter, in June 2019 the Income Tax
Settlement Commission issued order directing Indiabulls to pay 300
crores as tax and interest charges on the undisclosed income detected
during the IT raid on the company. As per news reports, IT
department had unearthed 800 crores of undisclosed income during
the search operation carried out in 2016. A copy of news report dated
14.06.2019 published in Business Standard is annexed herewith as
Annexure P67.
58. That SEBI has also in the past probed the violations of take-over
regulations by Indiabulls. In December 2018, Indiabulls paid Rs. 48
lakh as settlement fees to settle this case. As per media reports, “The
regulator agreed to settle proposed adjudication proceedings in the
case after it was approached by Gehlaut, Orthia Properties, Orthia

Constructions, Zelkova Builders, Innus Properties and Innus
Developers with a plea to settle the matter "without admitting or
denying the findings of fact and conclusions of law" through a
settlement order.” A copy of news report dated 11.12.2018 published
in Economic Times is annexed herewith as Annexure P68.
59. Statutory provisions and Laws violated
• Section 77 of the Companies Act 2013 under which the borrowing
companies are required to file Charge document with the Ministry
of Corporate Affairs showing the amount borrowed and security
given to the lender company within 30 days of the
transaction. Section 77 of the Companies reads as under:
“77. Duty to register charges, etc.—

(1) It shall be the duty of every company creating a charge within or
outside India, on its property or assets or any of its undertakings, whether
tangible or otherwise, and situated in or outside India, to register the
particulars of the charge signed by the company and the charge-holder
together with the instruments, if any, creating such charge in such form,
on payment of such fees and in such manner as may be prescribed, with
the Registrar within thirty days of its creation:
Provided that the Registrar may, on an application by the company, allow
such registration to be made within a period of three hundred days of such
creation on payment of such additional fees as may be prescribed:
Provided further that if registration is not made within a period of three
hundred days of such creation, the company shall seek extension of time
in accordance with section 87:
Provided also that any subsequent registration of a charge shall not
prejudice any right acquired in respect of any property before the charge
is actually registered.
(2) Where a charge is registered with the Registrar under sub-section (1),
he shall issue a certificate of registration of such charge in such form and
in such manner as may be prescribed to the company and, as the case may
be, to the person in whose favour the charge is created.
(3) Notwithstanding anything contained in any other law for the time
being in force, no charge created by a company shall be taken into account
by the liquidator or any other creditor unless it is duly registered under
sub-section (1) and a certificate of registration of such charge is given by
the Registrar under sub-section (2).
(4) Nothing in sub-section (3) shall prejudice any contract or obligation
for the repayment of the money secured by a charge.”
• Section 129 of Companies Act, 2013 (Financial Statement) for
deviation in disclosure in financial statements. Section 129 of the
Companies reads as under:
129. Financial statement—

(1) The financial statements shall give a true and fair view of the state of
affairs of the company or companies, comply with the accounting
standards notified under section 133 and shall be in the form or forms as
may be provided for different class or classes of companies in Schedule III:
Provided that the items contained in such financial statements shall be in
accordance with the accounting standards:
Provided further that nothing contained in this sub-section shall apply to
any insurance or banking company or any company engaged in the
generation or supply of electricity, or to any other class of company for
which a form of financial statement has been specified in or under the Act
governing such class of company:
…..
(2) At every annual general meeting of a company, the Board of Directors
of the company shall lay before such meeting financial statements for the
financial year.
(3) Where a company has one or more subsidiaries, it shall, in addition to
financial statements provided under sub-section (2), prepare a
consolidated financial statement of the company and of all the subsidiaries
in the same form and manner as that of its own which shall also be laid
before the annual general meeting of the company along with the laying
of its financial statement under sub-section (2):
Provided that the company shall also attach along with its financial
statement, a separate statement containing the salient features of the
financial statement of its subsidiary or subsidiaries in such form as may
be prescribed:
Provided further that the Central Government may provide for the
consolidation of accounts of companies in such manner as may be
prescribed.
Explanation— For the purposes of this sub-section, the word
―subsidiary‖ shall include associate company and joint venture.
(4) The provisions of this Act applicable to the preparation, adoption and
audit of the financial statements of a holding company shall, mutatis
mutandis, apply to the consolidated financial statements referred to in
sub-section (3).
(5) Without prejudice to sub-section (1), where the financial statements of
a company do not comply with the accounting standards referred to in
sub-section (1), the company shall disclose in its financial statements, the
deviation from the accounting standards, the reasons for such deviation
and the financial effects, if any, arising out of such deviation.
(6) The Central Government may, on its own or on an application by a
class or classes of companies, by notification, exempt any class or classes
of companies from complying with any of the requirements of this section
or the rules made thereunder, if it is considered necessary to grant such
exemption in the public interest and any such exemption may be granted
either unconditionally or subject to such conditions as may be specified in
the notification.
(7) If a company contravenes the provisions of this section, the managing
director, the whole-time director in charge of finance, the Chief Financial
Officer or any other person charged by the Board with the duty of
complying with the requirements of this section and in the absence of any
of the officers mentioned above, all the directors shall be punishable with
imprisonment for a term which may extend to one year or with fine which
shall not be less than fifty thousand rupees but which may extend to five
lakh rupees, or with both.
Explanation. —For the purposes of this section, except where the context
otherwise requires, any reference to the financial statement shall include
any notes annexed to or forming part of such financial statement, giving
information required to be given and allowed to be given in the form of
such notes under this Act.”
`
• Section 447 of the Companies Act, 2013 (Fraud, to injure the
interest of the company/shareholders) This provision is
applicable since the companies have committed fraud in relation to
affairs of a company or corporate, which includes any act,
omission, concealment of any fact or abuse of position committed
by any person or any other person with the connivance in any
manner, with intent to deceive, to gain undue advantage from, or
to injure the interests of, the company or its shareholders or its
creditors or any other person, whether or not there is any wrongful
gain or wrongful loss. Section 447 of the Companies reads as under:
“447. Punishment for fraud—

Without prejudice to any liability including repayment of any debt under
this Act or any other law for the time being in force, any person who is
found to be guilty of fraud, shall be punishable with imprisonment for a
term which shall not be less than six months but which may extend to ten
years and shall also be liable to fine which shall not be less than the amount
involved in the fraud, but which may extend to three times the amount
involved in the fraud: Provided that where the fraud in question involves
public interest, the term of imprisonment shall not be less than three years.
Explanation—For the purposes of this section—
(i) “fraud” in relation to affairs of a company or any body corporate,
includes any act, omission, concealment of any fact or abuse of position
committed by any person or any other person with the connivance in any
manner, with intent to deceive, to gain undue advantage from, or to injure
the interests of, the company or its shareholders or its creditors or any
other person, whether or not there is any wrongful gain or wrongful loss;
(ii) “wrongful gain” means the gain by unlawful means of property to
which the person gaining is not legally entitled;
(iii) “wrongful loss” means the loss by unlawful means of property to
which the person losing is legally entitled.
• Section 420 of the Indian Penal Code, 1860 (Cheating) - This
provision is applicable as the company has disbursed loan to the
borrower companies to divert part of the loan amount to the
promoter of the company. Section 420 of the Indian Penal Code
reads as under:
“420.Cheating and dishonestly inducing delivery of property-

Whoever cheats and thereby dishonestly induces the person deceived to
deliver any property to any person, or to make, alter or destroy the whole
or any part of a valuable security, or anything which is signed or sealed,
and which is capable of being converted into a valuable security, shall be
punished with imprisonment of either description for a term which may
extend to seven years, and shall also be liable to fine.”
• Section 403 and 406 of the Indian Penal Code, 1860
(Misappropriation of Property, Breach of trust)- These provisions
are applicable since these companies have dishonestly
misappropriated and loans advanced to borrower companies to
divert part of it to interested parties and have inasmuch also
committed criminal breach of trust of the banks. Section 403 and
406 of the Indian Penal Code read as under:
“403. Dishonest misappropriation of property-

Whoever dishonestly misappropriates or converts to his own use any
movable property, shall be punished with imprisonment of either
description for a term which may extend to two years, or with fine, or with
both.”
“406. Punishment for criminal breach of trust-

Whoever commits criminal breach of trust shall be punished with
imprisonment of either description for a term which may extend to three
years, or with fine, or with both.”
18. Violation of various provisions and regulations made by the
Reserve Bank of India and National Housing Bank, SEBI
etc under the RBI Act, National Housing Bank Act, 1987,
pertaining to the liability of HFCs, auditors and powers of NHB
to act: The affairs of the HFC have to be conducted in compliance
of Section 29A of the National Housing Bank Act, 1987, at all times
keeping in mind Public Interest (even after registration). There is
a duty on the HFC and the Auditors to certify the same by
providing requisite information to the NHB that in turn has to
satisfy itself that the HFC is conducting its affairs in consonance
with Public Interest generally and interests of the Depositors
specifically. Violation thereof is a criminal offence under Sections
49 & 50. Further, NHB has been given powers inter alia to inspect
(Section 34), direct special audit (Section 33), or even direct
winding off of the company (Section 33B).
Directions have also been issued by NHB casting an obligation on
the Board of Directors and each director individually to ensure
maintenance of Corporate Governance Standards. It would

appear that the Board of Directors has failed to comply with the
same given the nature of the facts brought out in the petition.
The relevant provisions of the National Housing Bank Act, 1987,
are as under:
49. Penalties.—(1) Whoever is any return, balance sheet, or

other document or in any information required or furnished by or
under or for the purposes of any provision of this Act, wilfully
makes a statement which is false in any material particular,
knowing it to be false, or wilfully omits to make a material
statement, shall be punishable with imprisonment for a term
which may extend to three years and shall also be liable to fine.
(2) If any person fails to produce any book, account or other
document, or to furnish any statement or information which, under the
provisions of this Act, it is his duty to produce or furnish, he shall be
punishable with fine which may extend to two thousand rupees in respect
of each offence and in the case of a continuing failure, with an additional
fine which may extend to one hundred rupees for every day during which
the failure continues after conviction for the first such failure.
[(2-A) If any person contravenes the provisions of sub-section
(1) of Section 29-A, he shall be punishable with imprisonment for
a term which shall not be less than one year but which may extend
to five years and with fine which shall not be less than one lakh
rupees but which may extend to five lakh rupees.
(2-B) If any auditor fails to comply with any direction given or
order made by the National Housing Bank under Section 33, he
shall be punishable with fine which may extend to five thousand
rupees.
(2-C) Whoever fails to comply with any order made by the authorised
officer under sub-section (2) of Section 36-A, shall be punishable with
imprisonment for a term which may extend to three years and shall also
be liable to a fine of not less than rupees fifty for every day during which
such non-compliance continues.]
(3) If any person [other than an auditor]—
(a) receives any deposit in contravention of any direction given or order
made under Chapter V; or
[(aa) fails to comply with any direction given or order made by the National
Housing Bank under any of the provisions of Chapter V; or]
(b) issues prospectus or advertisement otherwise than in accordance with
Section 35 or any order made under Section 30, as the case may be;
he shall be punishable with imprisonment for a term which may extend
to three years and shall also be liable to fine which may extend,—
(i) in the case of a contravention falling under clause (a), to twice the amount
of deposit received; and
(ii) in the case of a contravention falling under clause (b), to twice the
amount of the deposit called for by the prospectus or advertisement.
(4) If any other provision of this Act is contravened or if any
default is made in complying with any other requirement of this
Act, or of any order, regulation or direction made or given or
condition imposed thereunder, any person guilty of such
contravention or default shall be punishable with fine which may
extend to two thousand rupees and where a contravention or default is a
continuing one with further fine which may extend to one hundred
rupees for every day, after the first, during which the contravention or
default continues.
50. Offences by Companies.— (1) Where an offence has been

committed by a company, every person who, at the time the
offence was committed, was in charge of, and was responsible to,
the company for the conduct of the business of the company, as
well as the company, shall be deemed to be guilty of the offence
and shall be liable to be proceeded against and punished
accordingly:
Provided that nothing contained in this sub-section shall render any
such person liable to any punishment provided in this Act, if he proves
that the offence was committed without his knowledge or that he had
exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1),
where an offence under this Act has been committed by a company
and it is proved that the offence has been committed with the
consent or connivance of, or is attributable to any neglect on the
part of any director, manager, secretary or other officer of the
company, such director, manager, secretary or other officer shall
also be deemed to be guilty of that offence and shall be liable to
be proceeded against and punished accordingly.
Explanation.—For the purposes of this section—
(a) “company” means any body corporate and includes a firm or other
association of individuals; and
(b) “director”, in relation to a firm, means a partner in the firm.
[29-A. Requirement of registration and net owned fund.—
(4) The National Housing Bank, for the purpose of considering the
application for registration, may require to be satisfied by an inspection
of the books of such housing finance institution or otherwise that the
following conditions are fulfilled:—
(a) that housing finance institution is or shall be in a position to pay
its present or future depositors in full as and when their claims
accrue;
(b) that the affairs of the housing finance institution are not being or
are not likely to be conducted in a manner detrimental to the
interest of its present or future depositors;
(c) that the general character of the management or the proposed
management of the housing finance institution shall not be
prejudicial to the public interest or the interests of its depositors;
(d) that the housing finance institution has adequate capital
structure and earning prospects;
(e) that the public interest shall be served by the grant of certificate of
registration to the housing finance institution to commence or to carry
on the business in India;
(f) that the grant of certificate of registration shall not be prejudicial
to the operation and growth of the housing finance sector of the
country; and
(g) any other condition, fulfilment of which in the opinion of the
National Housing Bank, shall be necessary to ensure that the
commencement of or carrying on the business in India by a
housing finance institution shall not be prejudicial to the public
interest or in the interests of the depositors.
(6) The National Housing Bank may cancel a certificate of

registration granted to a housing finance institution under this section
if such institution—
(i) ceases to carry on the business of a housing finance institution in India;
or
(ii) has failed to comply with any condition subject to which the certificate
of registration had been issued to it; or
(iii) at any time fails to fulfil any of the conditions referred to in
clauses (a) to (g) of sub-section (4); or
(iv) fails
(a) to comply with any direction issued by the National Housing Bank
under the provisions of this Chapter; or
(b) to maintain accounts in accordance with the requirement of any
law or any direction or order issued by the National Housing
Bank under the provisions of this Chapter; or
(c) to submit or offer for inspection its books of account and other relevant
documents when so demanded by an inspecting authority of the National
Housing Bank; or
(v) has been prohibited from accepting deposit by an order made by the
National Housing Bank under the provisions of this Chapter and such
order has been in force for a period of not less than three months:
[30-A. Power of National Housing Bank to determine policy

and issue directions.—(1) If the National Housing Bank is satisfied
that, in the public interest or to regulate the housing finance system of
the country to its advantage or to prevent the affairs of any housing
finance institution being conducted in a manner detrimental to the
interest of the depositors or in a manner prejudicial to the interest of the
housing finance institutions, it is necessary or expedient so to do, it may
subject to the provisions of sub-section (5) of Section 5, determine the
policy and give directions to all or any of the housing finance
institutions relating to income recognition, accounting
standards, making of proper provision for bad and doubtful debts,
capital adequacy based on risk weights for assets and credit
conversion factors for off balance sheet items and also relating to
deployment of funds by a housing finance institution or a group
of housing finance institutions or housing finance institutions
generally, as the case may be, and such housing finance institutions
shall be bound to follow the policy so determined and the direction so
issued.
(2) Without prejudice to the generality of the powers vested under
sub-section (1), the National Housing Bank may give directions to
housing finance institutions generally or to a group of housing finance
institutions or to any housing finance institution in particular as to—
(a) the purpose for which advances or other fund-based or non-fund-
based accommodation may not be made; and
(b) the maximum amount of advances or other financial
accommodation or investment in shares and other securities
which, having regard to the paid-up capital, reserves and deposits
of the housing finance institution and other relevant
considerations, may be made by that housing finance institution
to any person or a company or to a group of companies.]
33. Powers and duties of auditors.—(1) The auditor of every
housing finance institution shall enquire whether or not the housing
finance institution has furnished to the National Housing Bank such
statements, information or particulars relating to or connected with
deposits received by it, as are required to be furnished under this Chapter,
and the auditor shall, except where he is satisfied on such enquiry that
the housing finance institution has furnished such statements,
information or particulars, make a report to the National Housing Bank
giving the aggregate amount of such deposits held by the housing finance
institution.
[(1-A) The National Housing Bank may, on being satisfied that it

is necessary so to do, in the public interest or in the interest of the
depositors or for the purpose of proper assessment of the books of
account, issue directions to any housing finance institution or
any group of housing finance institutions or housing finance
companies generally or to the auditors of such housing finance
institution or institutions relating to balance sheet, profit and
loss account, disclosure of liabilities in the books of account or
any matter relating thereto.]
(2) Where, in the case of a housing finance institution, being a

company, the auditor has made, or intends to make a report to the
National Housing Bank under sub-section (1), he shall include in his
report under [sub-section (2) of Section 143 of the Companies Act, 2013
(18 of 2013)], the contents of the report which he has made, or intends to
make to the National Housing Bank.
[(3) Where the National Housing Bank is of the opinion that it
is necessary so to do in the public interest or in the interest of the
housing finance institution or in the interest of the depositors of
such institution, it may at any time by order, direct that a special
audit of the accounts of the housing finance institution in relation
to any such transaction or class of transactions or for such period
or periods, as may be specified in the order, shall be conducted and
the National Housing Bank may appoint an auditor or auditors
to conduct such special audit and direct the auditor or the
auditors to submit the report to it.
(4) The remuneration of the auditors as may be fixed by the National

Housing Bank, having regard to the nature and volume of work involved
in the audit and the expenses of or incidental to the audit, shall be borne
by the housing finance institution so audited.]
[33-A. Power of National Housing Bank to prohibit acceptance

of deposit and alienation of assets.— (1) If any housing finance
institution violates the provisions of any section or fails to comply with
any direction or order given by the National Housing Bank under any of
the provisions of this Chapter, the National Housing Bank may prohibit
the housing finance institution from accepting any deposit.
(2) Notwithstanding anything to the contrary contained in any
agreement or instrument or any law for the time being in force, the
National Housing Bank on being satisfied that it is necessary so to do in
the public interest or in the interest of the depositors, may direct, the
housing finance institution against which an order prohibiting from
accepting deposit has been issued, not to sell, transfer, create charge or
mortgage or deal in any manner with its property and assets without
prior written permission of the National Housing Bank for such period
not exceeding six months from the date of the order.
33-B. Power of National Housing Bank to file winding-up

petition.—(1) The National Housing Bank, on being satisfied that a
housing finance institution which is a company,—
(a) is unable to pay its debt; or
(b) has by virtue of the provisions of Section 29-A become disqualified to
carry on the business of a housing finance institution; or
(c) has been prohibited by the National Housing Bank from receiving deposit
by an order and such order has been in force for a period of not less than
three months; or
(d) the continuance of the housing finance institution is detrimental to the
public interest or to the interest of depositors of the company,
may file an application for winding up of such housing finance
institution under the [Companies Act, 2013 (18 of 2013)].
34. Inspection.—(1) The National Housing Bank may, at any time,

cause an inspection to be made by one or more of its officers or employees
or other persons (hereafter in this section referred to as the inspecting
authority) of any housing finance institution accepting deposits, for the
purpose of verifying the correctness or completeness of any statement,
information or particulars furnished to the National Housing Bank or for
the purpose of obtaining any information or particulars which the housing
finance institution has failed to furnish on being called upon to do so.
(2) It shall be the duty of every director or member of any committee or
other body or any person for the time being vested with the management of
the whole or part of the affairs of every housing finance institution
accepting deposits or other officer or employee thereof to produce to the
inspecting authority all such books, accounts and other documents in his
custody or power and to furnish that authority with any statement and
information relating to the business of the institution as that authority may
require of him, within such time as may be specified by that authority.
(3) The inspecting authority may examine on oath any director or
member of any committee or body or any other person for the time being
vested with the management of the affairs of the housing finance
institution, accepting deposits, or any officer or employee thereof, in
relation to its business.
55. That in exercise of powers under the Act, the National Housing
Bank issued “Housing Finance Companies – Corporate
Governance (National Housing Bank) Directions, 2016, which
contains, inter alia, directions to HFCs pertaining to disclosure,
transparency and loans advancement by all HFCs. The said
directions were published in public interest and for the purpose of
enabling NHB to regulate housing finance system in the country.
56. That the central government, ROC or the Ministry of Corporate
affairs ought to have filed a complaint and taken action on the
borrowing companies as laid down in Section 86 of the Companies
Act 2013. ROC ought to have further exercised powers under
Section 206 to call for further information, inspection of books and
conducted inquiries. Central Government ought to have further
entrusted the investigation of the murky deals of IBHFL to the
SFIO. National Housing Bank under the National Housing Bank

Act 1987, ought to have exercised its powers to inspect the records,
to collect information from HFCs. NHB ought to have further
directed a special audit of the accounts of IBHFL by appointing its
own auditors as envisaged in Section 33 of the NHB Act, 1987. The
NHB should have further made a complaint about the
irregularities of the dealings of IBHFL as per procedure laid down
in Section 50 of the NHB Act, 1987. SEBI should have also taken
action inter alia under Section 11, 11A, 11B, 11C and 11D to
investigate into the affairs of IBHFL. However, as per information
of the petitioner, no substantive action has been taken to
investigate the massive irregularities and illegalities being
committed by IBHFL by any of the respondent authorities.
57. Since this is an important public interest matter and there is a large
number of documents, the Petitioner seeks liberty from this
Hon’ble Court to produce other documents and records as and
when they become available to the Petitioner and/or are required
in the course of the proceedings.
58. That the Petitioners have not filed any similar Petition before any
other High Court, Hon’ble Supreme Court of any other court of
India seeking the same or similar relief. That the annexures are true
copies of their respective originals. That only relevant and limited
documents have been annexed in the instant writ petition to avoid
the petition getting too bulky. The petitioner seeks liberty from this
Hon’ble Court to present the complete set of documents available
in public domain as and when the need arises.

59. The petitioner is therefore seeking an indepth investigation into the
murky deals and affairs of Indiabulls by the Respondent
authorities on the following grounds:
GROUNDS:
A. Because there has been complete inaction of the respondent
authorities against Indiabulls Housing Finance Limited (IBHFL).
IBHFL through its promoters and their various group companies
and subsidiary companies has been advancing dubious loans to
companies owned by large corporate groups which in turn have
been routing the money back to the accounts of companies owned
by the promoters of Indiabulls, so as to increase their personal
wealth. The primary documents such as balance sheets, ROC
records which are available in the public domain suggest a vast
web of companies involved in various dubious deals, loans,
investments, round tripping of funds to benefit the companies
owned by the promoters of Indiabulls. As per the documents
available in the public domain, the advancement of dubious loans
and misappropriation of funds has been done to the tune of
several thousand crores with an aim to amass personal wealth to
the promoters of Indiabulls at the cost of huge loss to the public
exchequer, investors (including banks) and shareholders.
B. According to its annual report for the fiscal year 2017–18, IBHFL
has disbursed loans totaling a sum of Rs. 1,22,578 crore,

registering a 34.3% growth over the previous year. The company
saw its revenues grow by 25.1% to Rs. 14,640 crore in the period,
enabling it to earn Rs. 3847 crore in profit after tax, a 32.4%
growth. But post this phenomenal growth, IBHFL has a total
outstanding debt of Rs. 96,204.58 crore and its liabilities stand at
Rs. 113,463.50 crore as in March 2019, against Rs. 1,00,356.45 crore
a year before, about six times more than reserves and net worth,
which stand at Rs. 17,173.44 crore and Rs. 17,258.92 crore,
respectively.
C. Because IBHFL has in the past many years taken huge sums of
loans from various public and private banks which means that
public money is at stake, along with the money invested in IBHFL
by its shareholders and investors. The financial details of
Indiabulls Housing Finance Ltd, with details of borrowings inter
alia show that hundreds of companies are registered at the same
address as that of Indiabulls thereby suggesting a staggering
number of dummy companies having been created by Indiabulls.
D. Because the aforesaid activities of IBHFL and its promoters are in
violation of various statutes and polices like evasion of Income
Tax, violation of rules and regulations of Reserve Bank of India
(RBI), SEBI, National Housing Bank and other laws. The
violations of various aforesaid regulations, policies and statues,
prima-facie, makes a fit case for thorough investigation into the
affairs of IBHFL and any inaction of the relevant authorities to

investigate could result in jeopardizing and undermining of
public interest, rule of the law and the regulatory structure
besides probable loss to the public exchequer.
E. Because the central government, ROC or the Ministry of Corporate
affairs ought to have filed a complaint and taken action on the
borrowing companies as laid down in Section 86 of the
Companies Act 2013. ROC ought to have further exercised powers
under Section 206 to call for further information, inspection of
books and conducted inquiries. Central Government ought to
have further entrusted the investigation of the murky deals of
IBHFL to the SFIO. National Housing Bank under the National
Housing Bank Act 1987, ought to have exercised its powers to
inspect the records, to collect information from HFCs. NHB ought
to have further directed a special audit of the accounts of IBHFL
by appointing its own auditors as envisaged in Section 33 of the
NHB Act, 1987. The NHB should have further made a complaint
about the irregularities of the dealings of IBHFL as per procedure
laid down in Section 50 of the NHB Act, 1987. SEBI should have
also taken action inter alia under Section 11, 11A, 11B, 11C and
11D to investigate into the affairs of IBHFL.
F. The documents available with the petitioner organization show
that IBHFL and companies owned by its promoters have been
involved in round tripping of funds in violation of the relevant

laws and policy guidelines and they have also not disclosed
sources thereof and their books of account also did not show the
true state of affairs. However, the authorities concerned have
failed to do any investigation into these allegations/reports and
take required action against them, which poses serious risk and
threat to the public interest. The inaction of the respondent
authorities results in undermining of the law and the regulatory
structure.
G. Because in the last few years several instances of financial fraud of
similar kind have come to light. The instant scam follows close to
the heels of scams such as those perpetrated by ICICI Bank, IL&FS
and Dewan Housing Finance Limited. It illustrates how
promoters and persons in charge of large NBFCs have looted
public monies invested in them and diverted them to their own
companies using shell companies. In this process, huge amount of
public money involving lakhs of crores is being looted. It is
submitted that the clout of the promoters of these companies is
such that the regulators have closed their eyes to these frauds
happening right under their noses.
H. That the rampant corruption and crime in the field of finance and
accounting in the country, and the manifest unwillingness of the
authorities to take requisite action in order to ensure that the
culprits are punished, gravely impairs the right of the people to
live in a corruption and crime free society. This violates Articles

14 and 21 of the Constitution. The right to life guaranteed to the
people also includes in its fold the right to live in a society that is
free from crime and corruption and upholds the rule of law.
PRAYERS
In light of the facts, circumstances and submissions laid out above,
it is most respectfully prayed that this Hon’ble Court may
graciously be pleased to:
a. Issue an appropriate writ, order or direction for an in-depth,
thorough and time bound investigation by and SIT comprising
expert members of respondent authorities into the various
illegalities and violations committed by the promoters of IBHFL, its
subsidiaries and their promoters, as is highlighted in this petition.
b. Issue an appropriate writ, order or direction to the Ministry of
Corporate Affairs to conduct an investigation through the Serious
Fraud Investigation Office (SFIO) into the irregularities into the
financial affairs of Indiabulls and companies involved in
transactions with Indiabulls.
c. Issue an appropriate writ, order or direction to the Reserve Bank of
India (RBI) and National Housing Bank (NHB) to investigate the
financial affairs of IBHFL and to direct a special audit of IBHFL.

d. Issue an appropriate writ, order or direction to the Securities and
Exchange Board of India (SEBI) to conduct a thorough enquiry and
investigation into the affairs of IBHFL.
e. Pass such further and other order/s as the facts and circumstances
of the case may require.
FILED BY:
KAMINI JAISWAL
COUNSEL FOR THE PETITIONER
DRAWN AT & FILED ON: SEPTEMBER 2019

NEW DELHI

Indiabulls PIL

Enviado por

Dados do documento

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

Indiabulls PIL

Enviado por

Direitos autorais:

Formatos disponíveis

SYNOPSIS

There are many newspaper reports, primary documents such as balance

The instant petition shows an analysis of 5 companies to which IBHFL

The aforesaid activities of IBHFL and its promoters are in violation of

1999-2004 Indiabulls (Respondent No.8 herein), a leading finance

2013-14 IBHFL advanced loans to various companies belonging to

2017-18 • The money loaned to Americorp Group companies

2017–18 • According to its annual report, for the fiscal 2017–18

24.11.2017 In April 2016, Sameer Gehlaut’s name appeared in the leaked

14.06.2019 In July 2016, suspecting tax evasion by Indiabulls, the Income

28.07.2019 Dr. Subramanian Swamy, Member of Parliament submitted

07.08.2019 A number of financial institutions that IBHFL has taken

IN THE MATTER OF:

CITIZENS WHISTLE BLOWERS FORUM …PETITIONER

UNION OF INDIA &ORS. …RESPONDENTS

ADVOCATE FOR THE PETITIONER: KAMINI JAISWAL

IN THE MATTER OF:

CITIZENS WHISTLE BLOWERS FORUM …PETITIONER

UNION OF INDIA &ORS. …RESPONDENTS

Please find enclosed herewith a complete set of Writ Petition which is

being filed by the Petitioner and the same is likely to be listed on

___________________ or soon thereafter.

MOB NO. 9818572400, 9810238874

Place: New Delhi

IN THE MATTER OF:

CITIZENS WHISTLE BLOWER FORUM

2. NATIONAL HOUSING BANK

CORE 5-A, INDIA HABITAT CENTRE,

3. RESERVE BANK OF INDIA

4. THE REGISTRAR OF COMPANIES - KOLKATA,

5. SERIOUS FRAUD INVESTIGATION OFFICE

NEW DELHI, DELHI-110003 …. RESPONDENT NO. 5

6. SECURITIES AND EXCHANGE BOARD OF INDIA

5TH FLOOR, BANK OF BARODA, BUILDING 16,

7. INDIABULLS HOUSING FINANCE LTD.

A WRIT PETITION IN PUBLIC INTEREST UNDER ARTICLE 226 OF

THE HUMBLE PETITION OF THE

MOST RESPECTFULLY SHEWETH:

1. That the Petitioner is filing the instant Writ Petition in public

interest. The Petitioner has no personal interest in the litigation and

/ institution / body and that there is no motive other than of public

interest in filing the Writ Petition.

documents and correspondence which are part of official record.

3. That the petition, if allowed, would benefit the public exchequer

in the matter, they are unlikely to approach this Hon’ble Court on

this issue. Hence, the Petitioner has preferred this PIL.

4. That the Petitioner by way of the present PIL highlights the

complete inaction of the respondent authorities against Indiabulls

Housing Finance Limited (IBHFL). IBHFL through its promoters

and their various group companies and subsidiary companies has

been advancing dubious loans to companies owned by large

so as to increase their personal wealth. The primary documents

such as balance sheets, ROC records which are available in the

public domain suggest a vast web of companies involved in various

dubious deals, loans, investments, round tripping of funds to

benefit the companies owned by the promoters of Indiabulls. The

Respondent No. 1 herein is Union of India through the Secretary,

Ministry of Corporate Affairs. The Respondent No. 2 herein is

housing finance companies. Respondent No. 3 is the Reserve Bank

of India (RBI) through its Governor. Respondent No. 4 is Registrar

of Companies, Respondent No. 5 is Serious Fraud Investigation

Office (SFIO). Respondent No. 6 Securities and Exchange Board of

India (SEBI), Respondent No. 7 is Indiabulls Housing Finance Ltd.

through its Managing Director. Respondent No. 8 is Sameer