The Bombay High Court has denied bail to Yes Bank founder Rana Kapoor in the DHFL money laundering case saying that he is one of the main accused and that the charge against him is serious in nature.

A Single Bench of Justice Prakash D. Naik observed, “Applicant is one of the main accused in the complaint. He has misused his official position to gain undue financial benefit for him and his family members and associates. He is involved in bribery, corruption and money laundering activities. The POC involved in this case is to the extent of Rs.5,333 crores. … Though the applicant is in custody for three years, the involvement of public money shows that charge is serious. There is apprehension of tampering evidence. Hence, on the ground that applicant is in custody from 8th March 2020, bail cannot be granted.”

The Bench said that the applicant and his family members have incorporated or have a beneficial interest in various companies.

Senior Advocate Aabad Ponda appeared for the applicant while Special PP Hiten Venegavkar and APP Anamika Malhotra appeared for the State.

In this case, in the year 2018, Yes Bank allegedly invested Rs 3,700 crores in short-term debentures of DHFL and also sanctioned a loan of Rs 750 crores to a subsidiary of DHFL. The applicant allegedly received kickbacks of Rs 600 crores by extending a loan to DOIT Urban Ventures (India) Pvt Ltd, which was wholly owned by RAB Enterprises, a company owned by the applicant’s wife and daughters.

The first bail application of the applicant was rejected in February 2021 by the High Court. Hence, he filed the second bail application on the ground that the maximum sentence under the Prevention of Money Laundering Act (PMLA) was seven years, and he had been in custody for three years.

The High Court in the above regard asserted, “No doubt Hon’ble Supreme Court and this Court in several cases granted bail to the accused on the ground of long incarceration. However, gravity of accusations in the present case cannot be brushed aside. Hon’ble Supreme Court in the case of Y.S.Jaganmohan Vs. CBI (2013)7-SCC-439 has observed that “economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. … The Court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of punishment which conviction will entail the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing presence of the accused at the trial, reasonable apprehension of the witness being tampered with, the larger interests of public/State and other similar considerations.”

The Court also noted that the applicant is involved in seven other similar cases and that as per the prosecution case, he had entered into criminal conspiracy with others extending undue financial benefit to DHFL.

“During April-2018 and June-2018 the applicant through M/s.Yes Bank Limited got invested Rs.3,700 crores in short term non-convertible debentures of DHFL. Mr.Kapil Wadhwan through DHFL paid kick back of Rs.600 in the garb of loan to applicant’s beneficially owned companies. … It is alleged that applicant had siphoned off huge amount of POC out of India through his family group owned/controlled companies. Out of proceeds of crime of Rs.600 crores, Rs.378 crores have been invested overseas. Investment relating to exact layering of proceeds of crime is still under investigation”, said the Court.

The Court further said that such factors cannot be ignored considering the role of the applicant in the crime, the magnitude and seriousness of crime and hence he is not entitled for bail.

“The allegations against applicant is that applicant is involved in laundering of public money. He has allegedly hatched conspiracy with owners of DHFL for siphoning huge amount”, noted the Court.

Accordingly, the Court rejected the bail plea.

Cause Title- Rana Kapoor v. Directorate of Enforcement & Anr. (Neutral Citation: 2023:BHC-AS:13634)

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