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The Bombay High Court on Thursday allowed trials in the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) cases against Yes Bank founder Rana Kapoor and Dewan Housing Finance Limited (DHFL) promoter Kapil Wadhawan to be conducted together before a special PMLA court.
A single bench of Justice RG Avachat passed an order in pleas moved by Kapoor and Wadhawan, challenging the sessions court’s order to transfer the CBI case trial to the special PMLA court. The accused had approached the Principal Judge (PJ) sessions court, urging transfer of the cases. The PJ court, however, noted that only probing agencies could make such a request or plea, and not the accused, and said ‘such a request could be made before the special CBI court judge, where the schedule or predicate offence was being tried’. The ED then approached the special CBI court seeking to transfer the trial, which the PJ court rejected in July 2021.
The accused as well as the ED then moved the HC, challenging the trial court’s orders. Kapoor and Wadhawan had claimed that the special CBI court under the Prevention of Money Laundering Act (PMLA) was competent to conduct a trial for offences registered by both the central agencies. The petitioners stated that the law provided trial of cases, under the scheduled offence and under PMLA by the same court, to avoid multiple prosecutions. Trials before two different courts would cause ‘dual agony of trial’ as the ED case is ‘nothing but an offshoot’ of the main scheduled offence registered by the CBI. Kapoor and Wadhawan, through their lawyers, said that there are common accused, witnesses, and documents in both the cases and the trial being combined before the same court ‘would save the accused an agony of dual trial’.
The ED did not object to the transfer of the trial. The CBI, however, claimed that there was no provision that permitted special PMLA courts to conduct trials in offences under the Prevention of Corruption Act. While the ED did not object to the transfer, the CBI contended that there was ‘no notification which permitted PMLA courts to try offences under the Act. Justice Avachat, meanwhile, relied on an order passed by the Supreme Court in Rana Ayyub’s case, and said that since the top court had laid down the law, it was required to be followed and thus the special PMLA court will conduct the trial together in the present case.
According to the CBI, Yes Bank invested nearly Rs 4, 727 crore in short-term non-convertible debentures of DHFL between April and June 2018, and it had also sanctioned Rs 750 crore to Belief Realtors Private Limited — owned by the promoters of DHFL — for redevelopment of slums at Bandra reclamation in Mumbai along with Radius Developers. It had alleged that Kapoor received nearly a bribe of Rs 600 crore from DHFL in the form of a loan to DoIT Urban Ventures (India) Private Limited, owned by Kapoor’s family. The ED, in its probe based on the scheduled offence lodged by the CBI, had found that of the total Rs 750-crore loan, Yes Bank charged Rs 118 crore as processing fees, and the remaining Rs 632 crore was transferred to Belief Realtors. The ED had claimed that ‘the money was immediately diverted’ to Kyta Advisers, another entity connected to DHFL promoters.
