‘Sitting in London’: Salve-Bhushan Spat Mars SC Hearing as Court Grills ED, MCA on Indiabulls Probe

New Delhi – A Supreme Court hearing concerning a plea for a Special Investigation Team (SIT) probe into Indiabulls Housing Finance Ltd. transformed into a theatre of pointed personal remarks on Thursday, as Senior Advocates Harish Salve and Prashant Bhushan exchanged sharp words over virtual court proceedings. While the fiery tête-à-tête captured immediate attention, it did not distract the bench, led by Justice Surya Kant, from its rigorous scrutiny of federal agencies, culminating in a directive for the Ministry of Corporate Affairs (MCA) to produce original records related to the case.

The matter, brought by the Citizens Whistle Blower Forum, alleges significant financial misconduct by Indiabulls, including siphoning of funds and round-tripping. The hearing before a bench also comprising Justices Ujjal Bhuyan and N Kotiswar Singh saw Mr. Salve, appearing virtually from London for Indiabulls, vehemently contest the petition's maintainability, labeling the petitioners "blackmailers" and strangers engaged in a "witch-hunt."

This characterization drew a swift and personal rebuke from Mr. Bhushan, representing the petitioner-forum. He highlighted the repute of the Forum's trustees, which include former Delhi High Court Chief Justice AP Shah and activist Aruna Roy, before taking a direct shot at Mr. Salve’s remote appearance. Bhushan remarked that Salve had the "audacity" to make such a claim "while sitting in London."

The exchange escalated quickly, moving from professional disagreement to personal jibes. Mr. Salve retorted, "If [Mr. Bhushan] is 'jealous', he could also shift to London." When Bhushan suggested Salve was unaware of the case's affidavits due to his location, Salve countered dryly, “one can read an affidavit written in simple English sitting in any city.”

The back-and-forth prompted a light-hearted intervention from Senior Advocate Mukul Rohatgi, who suggested that on the next date, both counsel could argue from London. The incident, however, drew criticism from other senior members of the bar present in the courtroom for subsequent matters. Senior Advocate Kapil Sibal called the exchange "unfortunate," emphasizing that seasoned lawyers should set a better example. Dr. Menaka Guruswamy noted the unique position of lawyers, observing, “If your lordships said anything, it would be on social media. So only we can say,” alluding to the liberties advocates can take in submissions compared to judges.

Court Shifts Focus to Substantive Allegations and Agency Inaction

Despite the verbal sparring, the bench remained firmly focused on the substantive legal and factual issues at the heart of the petition. Justice Surya Kant steered the proceedings towards the roles and findings of the Central Bureau of Investigation (CBI), the Enforcement Directorate (ED), and the MCA.

Earlier, the Court had expressed strong displeasure with the CBI for its failure to appear. During Thursday's hearing, the bench noted from the CBI's eventual response that allegations of money laundering against Indiabulls were prima facie well-founded and that the ED's continued probe was warranted.

This prompted the court to seek the ED's stance directly. Additional Solicitor General (ASG) SV Raju, appearing for the agency, made a telling statement: “ED affidavit will show that there is something serious.” This admission lent significant weight to the petitioner's claims and signaled potential trouble for the corporate entity.

Mr. Bhushan bolstered his arguments by referencing a recent Supreme Court order for a CBI probe into housing companies in the Delhi-NCR region, where one of the implicated firms was the Vatika Group. He alleged a direct link, stating, "Preliminary enquiry finding is that Indiabulls entered into a criminal conspiracy with this Vatika Group, in order to give loans on behalf of homebuyers... those loans have been misappropriated, the flats have not been constructed and they have therefore together defrauded 100s, 1000s of people."

He further claimed that a company with a mere share capital of Rs. 25,000 was granted a loan exceeding Rs. 1,000 crores, with funds allegedly being transferred to private companies owned by Indiabulls promoter Sameer Gehlaut. Mr. Salve countered that "every rupee has come back," but Bhushan pressed on, citing a SEBI counter-affidavit that he claimed substantiated their allegations and recommended action by the MCA.

Ministry of Corporate Affairs Under the Microscope

A particularly startling allegation raised by Mr. Bhushan was that the MCA had compounded over 200 cases of violations by Indiabulls in a single day, many of which he claimed were related to concealing "related party transactions."

This specific claim caught the bench's full attention. Turning to the ASG, Justice Surya Kant expressed the court's desire to examine the underlying records of this mass compounding. In a pointed remark, the judge said, “We would like to see in how many cases you have been so magnanimous in closing 100s of objections.”

The court concluded the hearing with a set of firm directives aimed at ensuring transparency and accountability. It ordered a senior officer from the MCA to be personally present on the next date of hearing with all original records pertaining to the compounding of the alleged violations.

Furthermore, the ED has been instructed to file an affidavit clarifying its official stand in light of the CBI's prima facie findings of money laundering. The agency must also detail the steps it has taken to investigate the matter since receiving the information from the CBI.

The hearing underscores the judiciary's increasingly assertive role in overseeing complex corporate fraud investigations and holding regulatory bodies accountable for their actions—or inaction. While the personal clash between two of the country's most prominent lawyers provided a dramatic subplot, the core of the day's proceedings was a methodical judicial inquiry into serious allegations of financial crime, with the court making it clear that it will not be swayed by personality clashes and will instead demand answers directly from the agencies tasked with upholding the law.

Case Title: CITIZENS WHISTLE BLOWER FORUM v. UNION OF INDIA, SLP(C) No. 2993/2025