Rana Kapoor granted bail in Yes Bank-DHFL money-laundering case

Former Yes Bank CEO Rana Kapoor has been granted bail in a money-laundering case involving Dewan Housing Finance Corporation Ltd (DHFL). Kapoor's lawyers argued that the delay in framing charges was not his fault, and the trial had not yet begun. The court criticized the lackadaisical approach of the Enforcement Directorate (ED) and noted that if such a scenario continued, no money-laundering trial would reach its conclusion. The ED intends to challenge the bail order in the high court.

MUMBAI: A special Prevention of Money Laundering Act (PMLA) court on Thursday granted bail to former Yes Bank CEO Rana Kapoor in a money-laundering case involving Dewan Housing Finance Corporation Ltd (DHFL).

Yes Bank founder Rana Kapoor. (Satish Bate/HT Photo)

Kapoor prayed for bail on the grounds that the delay in framing charges had not been caused due to delay in proceedings on his part and that considering the present status of the case, there was no likelihood that in future the trial would begin and conclude within a particular time frame.

While granting bail to the accused, special judge M G Deshpande said that the applicant, a senior citizen (66), had been in judicial custody for over three years and had already undergone half the maximum imprisonment possible in the case. Secondly, the trial, sans any mistake or delaying tactics on the part of the applicant, had yet not begun.

Kapoor’s lawyers Aabad Ponda, Rahul Agarwal and Jasmin Purani, relied on Section 436A of the Code of Criminal Procedure, which determines the maximum period for which an applicant can be detained. They further referred to a Supreme Court judgement that laid down that if the trial could not proceed even after the accused had undergone half the maximum period of imprisonment provided by law, there was no reason to deny him bail.

Special public prosecutor Sunil Gonsalves, representing the ED, contended that Kapoor was the MD-cum-CEO of Yes Bank and had misused his position to gain undue financial benefit. He further argued that huge public money of Yes Bank was involved in this crime, and it should be dealt with sternly. The merit of the case, he said, did not permit any relief to the applicant under Section 436A of the CrPC.

The court slammed the ED’s lackadaisical approach and noted that the agency did not initiate proceedings even in a single case without the court’s intervention. It added that if such a scenario continued, no PMLA trial would reach its finality.

Subsequently, the ED prayed for a stay on the bail order for one month on the grounds that it intended to challenge the order in the high court. The ED held that the bail was not granted on merits but on technical points. However, the PMLA court rejected the order.

According to the ED, Yes Bank had between April and June 2018 invested ₹3,700 crore in DHFL’s short-term debentures and subsequently also sanctioned a loan of ₹750 crore to a DHFL subsidiary. In return, DHFL gave Kapoor ₹600 crore in kickbacks in the forms of a loan to Do It Urban Ventures Pvt Ltd, a firm controlled by Rana Kapoor and his family members.

Only ECIRs, no trials

In his order, special judge M G Deshpande cited information available on the ED’s website, noting that the agency had registered 5,906 Enforcement Case Information Reports (ECIRs) ever since PMLA came into force in 2005, and prosecution complaints or chargesheets had been filed in 1,142 cases but trials were concluded in only 25 cases so far. However, it was not clear how many of these 25 cases were tried jointly along with the predicate case as mandated under the PMLA, said the court.