Yes Bank-DHFL loan fraud: HC rejects builder Sanjay Chhabriaa’s bail plea

ED arrested Chhabriaa on June 7, 2022, and filed the prosecution complaint against him a day ahead of the stipulated deadline. However, the builder claimed that the chargesheet was incomplete and was filed on the 59th day of his arrest only to scuttle the indefeasible right accrued in his favour to claim the default bail

Mumbai: The Bombay high court has rejected the default bail plea of builder Sanjay Chhabriaa in an alleged money laundering case related to Yes Bank-DHFL loan fraud, observing that a specific stand had been taken by the Enforcement Directorate (ED) that the investigation regarding Chhabriaa was complete and further investigation is going on as regards other accused.

Mumbai, India - July 11, 2022: The Economic Offences Wing (EOW) of the Mumbai police has registered a fresh criminal case against builder Sanjay Chhabria of Radius Group for allegedly cheating Yes Bank to the tune of ₹52.12 crore. (Photo : Facebook) (Hindustan Times)

ED arrested Chhabriaa on June 7, 2022, and filed the prosecution complaint against him a day ahead of the stipulated deadline. However, the builder claimed that the chargesheet was incomplete and was filed on the 59th day of his arrest only to scuttle the indefeasible right accrued in his favour to claim the default bail.

He had moved the high court after his plea was rejected by the special PMLA (Prevention of Money Laundering Act) court on August 25, 2022. Before the high court, the ED, however, claimed that when the chargesheet was filed on August 4, 2022, the agency’s investigation against Chhabriaa was complete and therefore he could not have sought default bail.

Justice MS Karnik accepted ED’s stand and rejected the builder’s plea. “There is no embargo for conducting any further investigation in the case by the respondent (ED) to bring any further evidence against any accused person involved in the offence, whether named in the original complaint or not,” justice Karnik said while dismissing Chhabriaa’s plea.

The builder was booked in a money laundering case related to the Yes Bank-DHFL loan fraud. The agency has taken up the probe based on an FIR registered by CBI, New Delhi, alleging that Rana Kapoor, then chief executive officer of the Yes Bank, had connived with Dewan Housing Finance Corporation Limited (DHFL) promoters Kapil Wadhawan and his brother Dheeraj Wadhawan, and under the conspiracy, Yes Bank had allegedly extended financial assistance to DHFL in lieu of substantial undue benefit to Kapoor and his family members.

In terms of the conspiracy, the agency claimed that Yes Bank invested ₹3,700 crore in the short-term non-convertible debentures of DHFL and ₹283 crore in Masala Bonds of the tainted firm. Simultaneous to this investment, Kapil Wadhawan through DHFL paid a kickback of ₹600 crore, in the garb of a loan, to one of Rana Kapoor’s beneficially owned companies namely DOIT Urban Ventures (India) Pvt Ltd.

ED claimed that immediately after the transfer of funds to the tune of ₹3,983 crore by Yes Bank, DHFL sanctioned loans to Radius Group of Sanjay Chhabria and transferred ₹2,317 crore as loan from DHFL for their project “Avenue 54” at Santacruz, which the builder allegedly diverted for unscheduled purposes.

Chhabriaa was first arrested by the CBI in the loan fraud case on April 28, 2022, and was granted bail by the Supreme Court on August 8, 2022.