‘Claims Of Rs 2983 Crores Against ADAG Companies Were Extinguished For A Total Settlement Of Rs 26 Crores': ED Report In SC

New Delhi: The Supreme Court on Monday, based on an Enforcement Directorate (ED) report, noted that claims of about Rs 2,983 crores were extinguished for a total settlement of Rs 26 crores, and also directed the central agencies to conduct a "fair, dispassionate, transparent, and time-bound" investigation into the alleged large-scale banking fraud involving the Anil Dhirubhai Ambani Group (ADAG) and its firms.

The matter came up before a bench comprising Chief Justice Surya Kant and Justices Joymalya Bagchi and Vipul M Pancholi. The bench directed all concerned financial institutions to "render full cooperation to the ED". The bench permitted the central agencies to approach it if there is any reluctance from other government bodies in extending cooperation. The bench also expressed displeasure over the "reluctance" shown by the Central Bureau of Investigation (CBI) and the ED in probing the alleged large-scale banking fraud involving the ADAG and its firms.

The bench was hearing a PIL filed by former bureaucrat E A S Sarma seeking a court-monitored investigation into alleged loan frauds exceeding Rs 40,000 crore by Anil Dhirubhai Ambani Group (ADAG) firms led by Anil Ambani.

Solicitor General Tushar Mehta, representing ED and CBI, said as per the court's last order, a Special Investigating Team of ED officials has been constituted and the investigation is ongoing.

Mukul Rohatgi, representing Anil Ambani and ADAG, said his clients are not opposing any investigation. He stated that he has a representation to make to these banks to enter into a dialogue to explore a fruitful resolution, but they are unwilling to have a dialogue due to the pendency of the case.

"Mr Rohatgi, we have not stopped anyone…they will happily enter into (the dialogue) because now…that will be another way to wriggle out of the consequences, if any," observed the CJI.

The CJI said the first report submitted by Mehta only discusses the composition of the SIT and the issues that need investigation. Mehta said the second updated report is also filed, and possibly it may not have been placed before the court, and added, for CBI, "we have constituted 3 transaction auditors to go into the audit transactions, as there may be or not be collusion".

Advocate Prashant Bhushan, representing E A S Sarma, said SEBI has already provided a detailed investigation report stating this is a scheme to siphon off money from these companies, orchestrated by Anil Ambani and ADAG, yet the CBI has not made any arrests so far.

Mehta said four individuals have been arrested so far, and there cannot be any random arrests. Bhushan said some lowly officials have been arrested, but not the main person.

"Your investigating agencies, the way they have shown a kind of reluctance or whatever that things have been allowed to go in the way they want, is not acceptable. They should come out in a time-bound manner in a transparent and fair manner, as this is what we have concluded after holding the investigation. Your investigation must inspire confidence. Not only the confidence of the court, the confidence of every stakeholder," said the CJI, adding that people should feel there has been a fair and independent investigation.

Mehta said he would convey the court's concern in a harsher term personally to the directors of ED and CBI. “We have attached property worth Rs 15,000 crores, but the investigation is ongoing; I may not say much," said Mehta.

The bench referred to certain facts disclosed in the fresh status reports of the probe agencies and noted that the CBI and ED are presently probing seven and eight FIRs, respectively.

The bench noted that an investigation into 8 cases has commenced, and some documents have been seized. The bench also observed that claims of about Rs. 2,983 crores were extinguished for a total settlement of Rs. 26 crores, and all these acquisitions were facilitated by 8 Non-Banking Finance Companies through "Project Help".

The bench observed that there is a reference to a project, which is said to have revealed how insolvency petitions were deliberately initiated through unrelated lenders.

The bench stated that, according to the report, all funding by IBC acquisitions was arranged through a group of 8 NBFCs. "On an illustrative basis, it is pointed out that claims approx. Rs 2983 crores were extinguished for a total settlement of Rs 26 crores," the order observed

The bench noted that CBI’s status report claims that seven cases are under active investigation, and the roles of public servants are under the scanner. "The total loss by the complainant bank runs into Rs 2223 crores…and total loss being approximately Rs. 73,000 crore," noted the bench.

"Senior functionaries of the investigating agencies must join hands and make vigorous attempts to unearth the irregularities/illegalities or the connivance of public functionaries, especially the financial institutions, if any, in giving undue benefit to the…. While we do not express any opinion on the merits of the allegations, all that we wish to observe is that it is imperative upon the CBI and the ED to complete the investigation in a most dispassionate, fair, transparent and independent manner and take the ongoing investigations to a logical conclusion in a time-bound manner," said the apex court.

The bench noted that Mehta assured that no stone shall be left unturned to unearth the truth and that an endeavour shall be made to complete the investigation in 4 weeks.

The bench further ordered all banks and agencies to cooperate with the investigation by giving the necessary information to the ED. "In the event of any reluctance, resistance or delay, ED to submit a report to this court, said the bench.

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