Court To Examine Indiabulls Plea For Perjury Proceedings Against Prashant Bhushan

The Delhi High Court Tuesday asked a non-governmental organisation which alleged financial irregularities against Indiabulls Housing Finance Ltd. to respond to the company’s plea seeking proceedings against advocate Prashant Bhushan for allegedly making false statements against it in a public interest litigation.

A bench of Chief Justice DN Patel and Justice C Hari Shankar issued notice to Citizens Whistle Blower Forum and Bhushan, one of the members of the organisation, seeking their stand on the perjury application and a separate plea by the company for dismissing the PIL with costs.

The court listed the applications for hearing on Oct. 24, after senior advocate Mukul Rohatgi urged the bench for an early date as each day the PIL was pending, the company was suffering financial losses.

Rohatgi told the court that subsequent to the filing of PIL, the company's share value has dropped from around Rs 450 to Rs 210 which has not only affected Indiabulls Housing Finance but also lakhs of its investors.

He also said that if Indiabulls Housing was able to show that the NGO and Bhushan made false statements before the court and in their petition, then it should be dismissed with costs.

In its application under section 340 of Criminal Procedure Code, the company has sought initiation of prosecution against Bhushan for "having made irresponsible and false statements to his own knowledge".

Indiabulls has claimed that the NGO and Bhushan made allegations against the company without doing necessary research or verifying the facts from statutory authorities.

Rohatgi said that of the five companies Indiabulls Housing had loaned money to, four have repaid and the fifth -- Vatika -- has to pay back Rs 600 crore out of the Rs 4,600 crore loaned to it.

He said the PIL has "lifted portions" of a petition moved against the company in the Supreme Court that was later withdrawn by the petitioner.

The application has contended that none of the borrowers had invested or loaned funds to Indiabulls Housing group chairman Sameer Gehlaut or any of his companies as alleged by the NGO.

The PIL has alleged that monies loaned by Indiabulls to various companies were routed back to its promoters through other entities.

The NGO, whose members include former Delhi High Court Chief Justice AP Shah, former Chief of Naval Staff Admiral L Ramdas, former Indian Administrative Service officer Aruna Roy and Bhushan, has sought a direction to the Ministry of Corporate Affairs to order an investigation by Serious Fraud Investigation Office into the irregularities alleged against Indiabulls.

The petition has also sought a direction to the Reserve Bank of India and National Housing Bank to investigate the financial affairs of Indiabulls Housing and to direct a special audit of the company.

Indiabulls Housing has claimed that the PIL was filed "with the intent of stalling and blocking" its merger with Laxmi Vilas Bank.

In its other application, Indiabulls Housing has sought "summary dismissal" of the NGO's plea with "exemplary cost" and to debar the organisation and its members from filing PILs for allegedly moving the court with "false, frivolous and motivated petitions in the garb of public interest litigation".

It has also sought directions restraining the NGO and its members from making or publishing statements, in newspapers or social media platforms, regarding the PIL and allegations made in its while the matter was pending adjudication before the court.

Indiabulls Housing has claimed in both applications that the NGO without making any representation to any statutory authority, has alleged inaction against them.

On the last date of hearing, Indiabulls Housing had contended that the NGO was making allegations against it without doing proper research and was relying on a letter of Bharatiya Janata Party leader Subramanian Swamy to Prime Minister Narendra Modi accusing Indiabulls group of misappropriation of funds.

Swamy has publicly released a letter he had sent in June to the Prime Minister, accusing the Indiabulls group of embezzling Rs 1 lakh crore from the National Housing Bank .

Indiabulls had earlier opposed the plea saying it was "malicious" and "mala fide" petition which was causing loss to its business and reputation.