Bombay HC Expresses Disappointment Over CBI, EOW's Reluctance to Probe Multi-Crore Fraud

The Bombay High Court has expressed disappointment with the Central Bureau of Investigation (CBI) and the Economic Offences Wing (EOW) of the Mumbai Police for their reluctance to investigate complaints of a multi-crore fraud allegedly involving Jai Corporation Ltd. and its subsidiaries, both in India and overseas.

A Division bench comprising Justice Revati Mohite Dere and Justice Prithviraj Chavan, noted: “both the EOW as well as the CBI, for the reasons best known to these Agencies, are reluctant to inquire/investigate into the complaints made by the petitioner having such large scale alleged misappropriation of public funds as well as laundering…”

In its order dated January 31, 2025, the court directed the Zonal Director of the CBI to constitute a Special Investigation Team (SIT) to probe the allegations, ruling that an independent probe to uphold the integrity of the justice system was necessary.

The case stemmed from complaints filed by the petitioner and social activist, Shoaib Sequeira, who alleged that Anand Jain, the Director/Promoter of Jai Corporation Ltd, orchestrated a ₹3,000 crore investor fraud through various associates and subsidiaries. The petitioner cited a January 1, 2021, SEBI order imposing a penalty of ₹20 crore and ₹10 crore on two companies owned by Jain. Following an independent analysis over eleven months, the petitioner claimed to have uncovered a scheme in which public funds were illegally funnelled and routed back for personal gain. He lodged complaints with the EOW on December 22, 2021, and April 3, 2023. The petitioner further alleged that the scam involved multiple nationalized banks (Union Bank, IDBI Bank, IDFC Bank), a Mauritius-based private equity fund, and trans-border transactions linked to the United States, Australia, and the United Arab Emirates. The petitioner also contended that the investigating agencies were deliberately evading their responsibility, leading to a lack of progress in the probe. It was argued that the complexity and international ramifications of the case required a dedicated investigation team, free from external influences.

The respondents, including the EOW and the CBI, attempted to justify their inaction by citing jurisdictional challenges and procedural constraints. The EOW had referred the matter to SEBI, citing jurisdictional issues. When a second complaint was filed, the EOW transferred it to the CBI. In its internal notings dated November 4, 2024, the EOW acknowledged the magnitude of the scam and recommended that the matter be handled by the CBI and the Serious Fraud Investigation Office (SFIO). The CBI, however, sent the matter back to SEBI, effectively stalling the investigation.

The court found the arguments of the respondents unconvincing, noting a clear pattern of delay and inefficiency. “We have no words to demonstrate the conduct of the Investigating Agencies viz: EOW as well as CBI. We may say, we are disappointed. We feel that there will be no fair and impartial investigation into the alleged crimes either by the EOW or by the Superintendent of Police, CBI, EOW and hence, a special team needs to be constituted by the Zonal Director CBI to ensure efficient investigation into the offences of such magnitude. The need to instill confidence in the investigations and consequently, in the administration of justice, is of utmost concern. The case in question, has national and international ramifications,” the court said.

Underscoring the necessity of ensuring public confidence in the investigation and the administration of justice, the court stated,“Looking to the conduct of both the EOW and CBI, we as Constitutional Court cannot remain a mute spectator when it becomes apparent that the Agencies are passing the buck from each other.”

The court further observed: “Our justice system will acquire credibility only when the people at large will be convinced that the justice is based on the foundation of truth, provided the investigation is carried out impartially, fairly and in an unbiased manner. It is also equally important to strengthen the faith and confidence of the people in the law enforcing agency and also in the institution for administration of justice, else, it would be shaken.”

The court expressed confidence that the SIT would diligently uncover the truth and take the case to its logical end. However, it clarified that the transfer of investigation to the SIT does not imply any determination of guilt concerning the accused, as such an adjudication fell beyond the scope of the present petition.

 

Cause Title: Shoaib Richie Sequeira vs State of Maharashtra [Criminal Writ Petition 4248 of 2024]