Supreme Court Adjourns Yes Bank Founder Rana Kapoor’s Bail Plea In DHFL Money Laundering Case
The Supreme Court today has adjourned Yes Bank Founder Rana Kapoor’s bail plea in a DHFL money laundering case. It is pertinent to note that the Bombay High Court earlier had denied bail observing that he is one of the main accused and that the charge against him is serious in nature.
A bench of Justice Sanjiv Khanna, Justice Bela M. Trivedi and Justice Ujjal Bhuyan pursuant to the requests of the counsels representing the parties have listed the matter on July 21, 2023.
Senior Advocate Harish Salve appeared for the petitioner, and ASG S.V. Raju appeared for the respondent.
At the outset, Salve submitted before the Court that the total sentence if Kapoor is convicted is minimum 3 years and maximum for 7 years. However, he has already been in jail for more than three years. “Surely at some point Milords, he has to be given bail”, he added
“You are right normally there could have been (bail)…but the difficulty in this matter is he rocked the entire financial credibility of the banking system in the country… What happened to thousand if not lakhs of people and the entire instability…”, Justice Khanna said.
“That was not him, he is in Yes Bank, they are other people. His allegation is that he gave them a loan...”, Salve said in response.
On that Justice Khanna further commented, “I thought you are the chairman of the Yes Bank”.
However, raising objection Salve submitted that Yes Bank never had any financial crisis to be looked into.
“Yes Bank went into a big financial crisis…SBI had to take it over…”, Justice Khanna said vehemently.
“Yes bank is private, very private, totally”, said Salve in his response.
To which the bench directed him to check up on it again and get back on the next date.
When the bench asked ASG about the factual situation, he said that investors have lost 5583 crores. “He has given loans and kickbacks in daughter’s name…”, he further added.
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.
Cause Title: Rana Kapoor v. Directorate of Enforcement and Anr.