Supreme Court Dismisses PIL Seeking Probe Into ₹1,537 Crore JKM Infra Debt Settlement
The Supreme Court on Thursday dismissed a Public Interest Litigation seeking a court monitored probe into the settlement of JKM Infra Projects Ltd's ₹1,537 crore debt for ₹73.50 crore through the Asset Reconstruction Company (ARC) route.
The petitioners had alleged a wider nexus between banks, ARCs and borrowers and sought investigation by agencies including the Central Bureau of Investigation, Enforcement Directorate and Serious Fraud Investigation Office.
A bench of Chief Justice Surya Kant and Justices Joymalya Bagchi and V. Mohana dismissed the PIL, while clarifying that its non entertainment would not prevent any agency from pursuing remedies available under law.
“We are not inclined to entertain this PIL at the instance of the petitioners, who are young members of the Bar. However, these observations shall not be taken as an expression on the bona fides of the petitioners, who are young members of the Bar. Consequently, we dismiss the petition filed purportedly in public interest. At the same time, non-entertainment of this purported PIL does not preclude recourse to any remedy available under law by any agency.”, the Court said.
During the hearing, Advocate Ashwini Upadhyay, appearing for the petitioners said he was not seeking to stall the pending Corporate Insolvency Resolution Proceedings proceedings but wanted the agencies to examine the Ernst & Young forensic audit which allegedly flagged diversion of more than ₹902 crore.
He highlighted the alleged settlement of the ₹1,537 crore debt for ₹73.50 crore and argued that the case raised a larger issue concerning steep haircuts involving public money.
Upadhyay submitted, "This practice needs to be curbed, but with iron hands. That will determine whether I am right or wrong.”
He also argued that the JKM Infra matter demonstrated a broader nexus involving banks, ARCs and borrowers:
“This is not a single case. I don't want to mention individual cases. Just consider this one case and how the nexus is operating.”
He pointed out that the petitioners had already placed the relevant material before the Court:
“I have filed an affidavit. It is before the Court. Everything that the Court wanted in this matter has been mentioned.”
The Court, however, questioned whether the PIL jurisdiction should be invoked when disputes involving shareholders, CIRP proceedings and statutory remedies were already pending.
The CJI also raised concerns about the possibility that the Court's order could be perceived as shielding any underlying irregularity, asking, in substance, whether “suppose there is any gross irregularity then our order will become like a shield.”
Solicitor General Tushar Mehta, appearing for the Union, indicated that the broader issue of large haircuts was also being considered “on the legislative side.”
However, the Court dismissed the PIL as not maintainable at the instance of the petitioners, while clarifying that its non-entertainment would not prevent any agency from pursuing remedies available under law.