SC lauds Bombay HC order for SIT probe against Indian businessman Anand Jain in fraud case

The Supreme Court of India has hailed the Bombay High Court for its “courage” to order a Special Investigation Team (SIT) probe against Anand Jain, a prominent businessman considered a close aide of Mukesh Ambani.
In an order dated March 17, an apex court bench of Justices J.B. Pardiwala and R. Mahadevan lauded the Bombay HC’s courage for ordering an SIT probe against Jain in an alleged case of financial fraud worth Rs 2,400 crore. “We admire and appreciate the courage with which the High Court has passed the order. This is what is expected of any High Court,” the SC order stated.

SIT probe against Anand Jain

In January this year, the Bombay High Court had directed the zonal director of the Central Bureau of Investigation (CBI) to form an SIT for conducting a thorough investigation of multiple complaints of financial fraud against Anand Jain.
A bench of Bombay HC Justices Revati Mohite-Dere and Prithviraj K. Chavan had issued the directive on a plea by Mumbai-based businessman Shoaib Richie Sequeira, who had also filed complaints against Jain with the Economic Offences Wing (EOW) of the Mumbai Police in December 2021 and April 2023.
In his plea to the top court, Sequeira had accused the Mumbai Police of not conducting a proper or impartial investigation into the allegations against Jain, which made him approach the high court.

According to the complaints filed against Jain, the businessman and his company Jai Corp, are accused of defrauding investors, misappropriation of public funds for personal gain, round-tripping of funds through shell companies based in tax havens, and creation of dubious and fictitious invoices—all serious offenses of financial fraud and money laundering.

SC turns down plea challenging HC order

Following the Bombay HC ruling, Anand Jain had challenged the order in the Supreme Court by filing a Special Leave Petition (SLP), but the apex court refused to intervene in the matter while lauding the HC’s judgemnt.
“It is the least that the High Court could have done in the peculiar facts and circumstances of the case. The Zonal Director, CBI, Mumbai, shall now proceed to comply with the directions issued by the High Court and undertake the investigation in accordance with law. Therefore, we need not interfere with the impugned order,” the apex court said.
Senior Advocate Amit Desai, who represented Jai Corp, argued that the original plea had only requested a preliminary inquiry not a full-scale investigation, contending that the petition was an abuse of legal processes, while urging the SC to examine the bona fides of the complainant.
However, the apex court dismissed the arguments and said, “Having heard the learned counsel appearing for the parties and having reviewed the materials on record, we find no reason to interfere with the impugned order. We leave it open for the parties to avail appropriate legal remedies available to them, including challenging the legality and validity of the FIR.”

CBI lodges FIR against Jain

Acting on the directive of the Bombay High Court, the CBI registered an FIR against Jain and his company for allegedly committing fraud to the tune of Rs 2,434 crore. 

The central agency’s investigation in the case also involves two firms floated by sister companies of Jai Corp, and their associated partners.

As per the FIR, Anand Jain and his associates, acting as directors and promoters of Jai Corp Ltd, conspired to float two firms, Urban Infrastructure Venture Capital and Urban Infrastructure Trustees Ltd, and raised Rs 2,434 crore from the public under the pretext of investing in the Urban Infrastructure Opportunities Fund for real estate development in Mumbai and other locations.
Further, on January 31, 2006, an Indenture of Trust (IoT) was registered with the Mumbai registrar of assurances by the two firms as settlor and trustee to establish a venture capital fund, which was later registered by Securities and Exchange Board of India (SEBI).
As per the IoT, no transaction or investment would be made with any entity that had a conflicting interest with the directors, officers, or employees. However, in violation of this clause, Jain and his associates allegedly misappropriated public funds by making investments and issuing unsecured loans to sister concerns.

The CBI has also accused these sister companies of Jai Corp of falsely recording unsecured loans as losses over several years, using fabricated documents to justify construction projects. The accused entities allegedly executed forged agreements to justify advance payments for benami land purchases, further supporting the fraudulent activities.

Jai Corp is also accused of fraudulently exporting goods to Sarbags PTY Ltd in New South Wales, Australia, and Assurance Products Corporation in California, USA, using fictitious invoices and documents, thereby diverting funds for their own benefit.

Anand Jain is Jai Corp Limited chairman and was once ranked 11th on the Forbes’ list of 40 richest Indians. His son Harsh Jain is the co-founder and CEO of fantasy sports platform Dream 11.

According to Forbes, Ambani and Jain had planned to develop several special economic zones (SEZs) and a port but faced setbacks in land acquisition. Jain has investments in 33 real estate projects across 14 cities in India.