The Supreme Court, earlier this week, refused to interfere with the Bombay High Court’s order directing the Central Bureau of Investigation (CBI) to form a Special Investigation Team (SIT) to probe allegations of financial fraud against Jai Corp Ltd, its director Anand Jain, and other entities.
The case involves the alleged misappropriation of ₹2,434 crore in public investments in real estate projects.
A bench comprising Justice J.B. Pardiwala and Justice R. Mahadevan upheld the Bombay High Court’s January order mandating a CBI investigation into the company’s financial dealings. However, the court clarified that Jai Corp and its promoters are at liberty to seek quashing of the FIR before an appropriate forum. “If an FIR has been registered, the petitioners have the right to avail appropriate remedies as per the established legal framework,” the court observed.
Jain, a close aide to Mukesh Ambani since the 1980s, was featured among Forbes’ top Indian businessmen in 2007 and has occupied key roles in the undivided Reliance Group, as well as several enterprises under Mukesh Ambani’s leadership since 2005. His diverse business portfolio spans infrastructure, real estate, and financial services.
The Bombay High Court had earlier criticized the Economic Offences Wing’s failure to conduct a proper preliminary inquiry into the complaints. The case stems from a petition filed by activist Shoaib Richie Sequeira, who alleged large-scale financial irregularities, including misuse and misappropriation of public funds, fraudulent collection of investor money, round-tripping of funds through shell companies in tax havens, and fabrication of financial records. Jai Corp, which operates in sectors including real estate, infrastructure, and manufacturing, allegedly colluded with its subsidiaries, Urban Infrastructure Venture Capital and Urban Infrastructure Trustees Ltd, to divert funds and manipulate financial statements.
Jai Corp’s counsel, senior advocate Harish Salve and advocate Mahesh Agarwal, argued that the case had already been examined by Sebi, the Securities Appellate Tribunal (SAT), and the Bombay Stock Exchange (BSE), and none of them found merit in the allegations.
However, the Supreme Court ruled that regulatory clearances do not override criminal liabilities and that the matter warranted an independent probe by the CBI. “In cases of grave financial fraud, the courts must ensure a thorough investigation. We find no reason to interfere with the High Court’s well-reasoned order,” the bench stated.
Following the High Court’s directive, the CBI’s Economic Offences Branch in Mumbai registered an FIR against Jai Corp and its associated entities.
The probe will delve into financial transactions, corporate structures, and offshore fund movements linked to the alleged fraud. With the Supreme Court’s backing, the CBI’s investigation is expected to intensify, putting Anand Jain and other key stakeholders under heightened legal scrutiny. “The scale of the allegations necessitates an impartial and detailed probe to safeguard public interest,” the bench remarked.
