The Supreme Court on Wednesday asked the Central Bureau of Investigation (CBI) and the Enforcement Directorate to drag their feet in the probe into allegations of large-scale bank fraud involving Reliance Communications and former promoter Anil Ambani, while asking the agencies and the Center to take all necessary steps to prevent Ambani from leaving the country under court probe.
Supreme Court of India. (PTI)A bench comprising Chief Justice of India Surya Kant and Justices Jayamalya Bagchi and Vipul M Pancholi expressed serious concern over the laxity of the investigating agencies, noting that despite the involvement of multiple banks and agencies, the CBI has registered only one case.
On the question of the approach adopted by the CBI, the bench observed that different transactions and entities prima facie constitute separate offenses and warrant separate preliminary investigation and registration of regular cases. “What is the problem with registering different RCs for separate offences?” the bench asked, adding that procedural requirements like authorization cannot be allowed to obstruct effective investigation.
The court also emphasized that the alleged role of bank officials must be examined. “It is essential for the CBI to investigate the conduct of the bank officials to determine whether the loans were released in compliance with the defaulters,” the bench said, rejecting the agency’s submission that further action was barred in the absence of approval.
During the hearing, petitioner EAS Sarma, represented by advocate Prashant Bhushan, flagged the delay in action despite the submission of the forensic audit report till 2020. Bhushan, assisted by advocates Pranab Sachdeva and Neha Rathi, pointed out that the arrest was made only after the Supreme Court issued a notice in this regard. Noting these submissions, the bench said it will continue to monitor the investigation and seek periodic status reports from the agencies.
Senior advocate Mukul Rohatgi, appearing for Ambani, submitted that several FIRs and ECIRs are already pending and the value of those assets ₹12,000 crore was attached. He proposed that a committee be formed to assess the total outstanding dues and explore the possibility of staggered payment. However, the bench rejected the suggestion, observing that serious economic offenses involving allegations of siphoning and fraud cannot be condoned on mere offer of repayment.
Solicitor General Tushar Mehta, appearing for the CBI and the ED, told the court that the forensic audit had revealed fraud and diversion of funds and government officials were also being probed. He assured the bench that the agencies would take all necessary preventive measures to ensure that investigations are not frustrated.
Concerns also arose over the possibility of Ambani leaving the country. Bhushan requested the court to issue a protective order in view of the scale of the alleged fraud. In response, Rohatgi said his client would not travel abroad without the court’s permission — a submission that was recorded in the order. The Center assured the bench that all preventive steps will be taken to ensure that the investigation is not disrupted.
More Read
“We want you to ensure that nothing happens which can frustrate the proceedings before this court. Take all preventive and other measures. We do not want the investigation to be hampered at any cost,” the court told Mehta.
The ED, in an affidavit filed before the court, disclosed that its investigations so far have revealed large-scale defaults by several Reliance Group entities.
According to the agency, Reliance Home Finance Limited (RHFL) has defaulted on loans worth Rs ₹7,523.46 crore from 33 banks and financial institutions, of which lenders can recover ₹2,116.28 crore after resolution, leaving a net default ₹5,407.18 crore constitutes the alleged proceeds of crime under the Prevention of Money Laundering Act (PMLA).
Similarly, Reliance Commercial Finance Limited (RCFL) defaulted on its loans ₹8,226.05 crore from 21 lenders, including recovery only ₹1,945.48 crores, thereby amounting to the alleged offence ₹6,280.57 crores.
In the RCOM case, the ED said that RCOM and its group companies – Reliance Telecom Ltd and Reliance Infratel Ltd, took total outstanding loans from 13 foreign banks and institutional investors and 26 Indian banks and financial institutions. ₹40,185.55 crore, which also constitutes the alleged proceeds of crime.
The ED informed the court that it has registered three ECIRs so far and recently arrested former RCOM director Punit Narendra Garg, who has been remanded in ED custody till February 7. The bench advised the ED to constitute a Special Investigation Team (SIT) of senior officers and take the investigation to its logical conclusion, the agency’s undisclosed section said.
