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.

For Petitioner: Ashwini Kumar Upadhyay, Adv. Mr. Ashwani Kumar Dubey, AOR Mr. A.K. Upadhyay, Adv. Mr. Nikhil Upadhyay, Adv. Mr. Shorya Dasgupta, Adv.

For Respondents: Mukul Rohatgi, Sr. Adv. Mr. Shyam Divan, Sr. Adv. Mr. Aayush Agarwala, Adv. Mr. Anuj P. Agarwala,, Adv. Mr. Gaurav Verma, Adv. Ms. Mukti Heliwal, Adv. M/s. PBA Legal, AOR Mr. R. Venkataramani, Attorney General for India Mr. Ramesh Babu M.R, Sr. Adv. Ms. Nisha Sharma, Adv. Ms. Tanya Chowdhary, Adv. Ms. Charly, Adv. Ms. Ayushi Pandey, Adv. Ms. Mukti Chowdhary, AOR Mr. Tushar Mehta, Solicitor General Mr. Sanjay Kapur, AOR Mr. Surya Prakash, Adv. Mr. Kartikey Kaushik, Adv. Ms. Shristi Kundu, Adv. Ms. Anju Jain, Adv. Mr. Hitesh Sachar, Adv., Ms. Deb Deepa Majumdar, AOR Mr. Tushar Mehta, Solicitor General Mr. O. P. Gaggar, AOR Mr. Sachindra Karn, Adv. Mr. Pratap Venugopal, Sr. Adv. Mr. Ashish Prasad, Adv. Mr. Mahfooz Ahsan Nazki, AOR Ms. Mukta Dutta, Adv. Mr. Pruthvi Dhinoja, Adv. Mr. Vivek Rajan D.B., Adv. Mr. Tushar Mehta, Solicitor General Mr. K.M. Nataraj, A.S.G. Ms. Madhulika Upadhyay, AOR Mr. Saurabh Roy, Adv. Mr. Madhav Sinhal, Adv. Mr. Anuj Udupa, Adv. Mr. Mayank Pandey, Adv. Mr. Manish, Adv. Dr Abhishek Manu Singhvi, Sr. Adv. Mr. Ranjit Kumar, Sr. aDv. Ms. Shivika Mehra, Adv. Mr. Aditya Dhupar, Adv. Mr. Rohit Ojha, Adv. Mr. Ayush Shukla, Adv. Ms. Shivika Mehra, AOR Mr. Amar Dave, Sr. Adv. Mr. Suresh Dutt Dobhal, AOR Mr. Shikhar Kumar, Adv. Mr. Abhinav Sharma, Adv. Ms. Aeshana Singh, Adv. Mr. Abhishek Mishra, Adv. Mr. Rahul Malhotra, Adv. Mr. Ativ Gupta, Adv. Ms. Vagisha Kochar, AOR Ms. T. Geetha, Adv. Mr. Shyam D. Nandan, AOR Mr. Koshy John, Adv. Mr. Prateek Khanna, Adv. Mr. Gaurav Prasad, Adv. Ms. Pranjul Jain, Adv. Mr. Shashwat Anand, AOR Mr. Swastik Verma, AOR, Sinha Shrey Nikhilesh, Adv. Mr. Parth Verma, Adv.