HC refuses to entertain builder Sanjay Chhabriaa’s plea due to delay

The Bombay High Court refused to entertain a plea filed by builder Sanjay Chhabriaa challenging his Enforcement Directorate remand in connection with the Yes Bank-DHFL fraud case.

MUMBAI: The Bombay high court (HC) on Thursday refused to entertain a plea filed by builder Sanjay Chhabriaa, challenging his Enforcement Directorate (ED) remand in connection with the Yes Bank – Dewan Housing Finance Corporation Ltd (DHFL) fraud case on account of inordinate delay of 416 days in filing the plea.

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Chhabriaa, the promoter of Radius Group, was first arrested by the Central Bureau of Investigation (CBI) on April 28, 2022, in connection with the case. He was later held by ED, which also initiated a money laundering probe in the case, and obtained his custody remand on June 7, 2022, based on primary evidence. The remand order was extended from time to time by the PMLA (Prevention of Money Laundering Act) court.

According to Chhabriaa’s counsel, advocate Vibhav Krishna, this transfer of his custody from CBI to ED was wholly illegal and unconstitutional as it was not in accordance with the provisions of PMLA that provide certain safeguards for arrests under the anti-money laundering law.

Further, the arrest was purely mechanical, and it was done without furnishing an arrest report stating clear grounds for arrest, he said. This has caused incredible prejudice to Chhabriaa, he claimed.

However, according to the ED, there was a clear distinction between arrest and remand. As he was already arrested by the CBI, there is no need to comply with the arrest mandate on remand, they claimed.

Chhabriaa’s Radius Group was one of the largest borrowers of DHFL, the agency claimed. His companies, according to ED, received loans worth ₹1,900 crore from DHFL for the Avenue 54 project at Santacruz (west) Mumbai. He later borrowed ₹778 crore more from the same lender for the very same project.

Later, it was found during ED’s investigation that the funds were not utilised for the purposes for which they were availed but were instead used for paying loans to other group companies and the loans were later declared non-performing assets, making him part of one of the largest NBFC frauds in the country.

Chhabriaa is lodged as an undertrial prisoner in Arthur Road.