NEW DELHI: Indiabulls Housing Finance Ltd on Friday told the Delhi High Court the PIL by an NGO alleging financial irregularities against the company has led to a situation where no one was lending it money and urged the court to observe that the litigation should not come in the way of its normal business.
A bench of Chief Justice DN Patel and Justice C Hari Shankar, however, declined to make any such observation, saying "no-no". The court issued fresh notices to the National Housing Bank (NHB) and Registrar of Companies as neither had they filed their response to the petition nor were they represented by any lawyer.
The bench also gave more time to Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI) and Serious Fraud Investigation Office (SFIO) to file their replies and listed the matter for hearing on February 28.
Senior advocate Rajiv Nayar, appearing for IBHFL, told the bench the latest affidavit by the Ministry of Corporate Affairs (MCA) indicates loans granted by it have been repaid and the suspicions raised by the NGO in its petition have been addressed.
He said the inspections mentioned in the affidavit of MCA pertained to routine and nothing serious. He also told the court the company has received communications from RBI and NHB informing it that they have initiated special audit of Indiabulls and NHB was also carrying out an inspection of IBHFL.
In view of the actions being taken by all these authorities, the plea of the NGO - Citizens Whistle Blower Forum - claiming inaction has been addressed and the court need not monitor the inspection and audit processes, he said.
During pendency of the litigation, the company was not being lent money by any bank on the ground it was under scanner of the high court and, as a result, it was unable to lend to anyone leading to its business coming to a standstill, Nayar claimed.
Refuting the contentions on behalf of Indiabulls, the NGO, represented by senior advocate Arvind Nigam and advocate Prashant Bhushan, told the court the MCA -- in its earlier affidavit of October and the latest one in November -- has said it will file a report on the inspections carried out, but it has not been done.
They urged the bench to call for the inspection reports. In its latest affidavit has said it was examining the violations pointed out in two inspection reports with regard to Indiabulls Venture Ltd (IBVL) and IBHFL and the report regarding Indiabulls Real Estate Ltd (IBREL) was awaited.
On the loans given by IBHFL to five companies, as mentioned in the petition, the ministry citing the report said the loans given to three companies have been repaid and loans given to other two entities are reported to be 'standard accounts'.
The affidavit further said remaining issues/ violations reported in the inspection report are under examination and it will be dealt as per law. Subsequent to issuance of notices to the Centre and IBHFL in the matter, the company had moved an application alleging that the NGO and one of its members - Bhushan -- have made false statements in the PIL.
It had also moved a separate application seeking recall of the notice claiming that everyday the matter was pending, it was suffering huge financial losses as its share value was dipping day-by-day. According to the PIL, monies loaned by Indiabulls to various companies were routed back to its promoters through other entities.
The NGO, whose members also include former Delhi High Court chief justice A P Shah, former chief of naval staff Admiral L Ramdas and former IAS officer Aruna Roy, has sought a direction to the MCA to order an investigation by SFIO into the alleged irregularities by Indiabulls.
The petition has also sought a direction to the RBI and the NHB to investigate the financial affairs of IBHFL and to direct a special audit of the company.
IBHFL has contended that the NGO was making allegations against it without doing proper research and was relying on a letter written by BJP leader Subramanian Swamy to Prime Minister Narendra Modi accusing Indiabulls of misappropriation of funds.
Swamy has publicly released the letter he sent to Modi in June, accusing Indiabulls of embezzling Rs 1 lakh crore from the NHB. Indiabulls has opposed the plea saying it was a "malicious" and "mala fide" petition which was causing loss to its business and reputation.