New Delhi: The Delhi High Court, on Friday, rejected a Public Interest Litigation (PIL) that sought an inquiry into the purported diversion of funds by the promoters of Indiabulls Housing Finance Limited (IBHFL), its subsidiaries, and their promoters.

Justice Suresh Kumar Kait, heading the bench, stated that the PIL filed by the NGO 'Citizens Whistle Blower Forum' lacked merit, as the allegations were unsubstantiated by evidence.

The petitioner claimed that IBHFL and its proprietors were providing questionable loans to companies affiliated with major corporate groups, with the funds allegedly being redirected to accounts owned by the promoters of Indiabulls to augment their personal wealth.

"This Court is of the opinion that the allegations levelled by the petitioner are not substantiated as these are not supported by any evidence. The balance sheets or other material placed on record is already available on the website of these companies and is thus already in public domain. Not only a large portion of alleged loans were repaid by the respondent companies but also the loans were advanced against mortgages and securities furnished by the borrowers," said the bench, also comprising Justice Neena Bansal Krishna.

"There is no dispute to the position that necessary investigation in the present case has already been carried out by NHB (National Housing Bank) and also the Ministry of Corporate Affairs is in the process of further investigation. Finding no merit in the present petition, it is accordingly dismissed," the court said.

The court observed that the petitioner based its argument on specific news reports, with one of them acknowledged to be "erroneous."

"In the considered opinion of this Court, due to articles published in magazine and newspaper, the tweets made by member of the petitioner-firm or a Member of Parliament, the share holders of accused-companies were jolted and they were made to suffer huge losses," the court remarked.

"It is settled position of law that the jurisdiction of investigation lies within the realm of investigating agency and a Court has no authority to interfere in the investigation until and unless there is grave miscarriage of justice or misuse of process of law," stated the court.

The PIL, filed in 2019, claimed that Indiabulls had established an overwhelming number of fake companies and accused the company's officials of diverting substantial amounts of money running into thousands of crores.

The petition requested the Delhi High Court to instruct the Ministry of Corporate Affairs to initiate an inquiry, utilizing the Serious Fraud Investigation Office (SFIO), to probe the purported irregularities.

The plea sought directives for the Reserve Bank of India (RBI) and the National Housing Bank (NHB) to examine the financial dealings of IBHFL and conduct a special audit of its accounts.