Bombay High Court.(Bhushan Koyande)
Bombay High Court.(Bhushan Koyande)

Bombay High Court refuses relief to DHFL promoter Kapil Wadhawan

Kapil Wadhawan had approached the high court on Thursday challenging the order of the special Prevention of Money Laundering Act (PMLA) court remanding him in ED custody twice since his arrest on January 27.
Hindustan Times, Mumbai | By HT Correspondent
UPDATED ON JAN 31, 2020 05:53 PM IST

Bombay high court on Friday refused to grant relief to Dewan Housing Finance Limited (DHFL) promoter Kapil Wadhawan, arrested by the Enforcement Directorate (ED) in connection with the money-laundering probe against late gangster Iqbal Mirchi.

Kapil Wadhawan had approached the high court on Thursday challenging the order of the special Prevention of Money Laundering Act (PMLA) court remanding him in ED custody twice since his arrest on January 27.

The 46-year-old DHFL promoter’s lawyer said the special court granted and extended his custody in a mechanical manner, merely after reading the remand application.

He also argued that the special court failed to comply with the guidelines laid down by the Supreme Court in Arnesh Kumar’s case.

He pointed out that the top court had mandated magistrates to examine if the arrest was necessary and justified in all cases where the maximum punishment is up to seven years.

The agency’s lawyer Hiten Venegaonkar opposed the plea and sought time to file an affidavit in reply.

Justice AM Bader accepted his plea and adjourned Wadhawan’s plea for further hearing, without an interim order. The judge said no interim order can be granted without hearing contesting respondents.

Justice Badar also noted the DHFL promoter has already moved a bail plea, which was likely to be heard on Friday, and clarified that the special court was free to pass appropriate orders on Friday on ED’s further remand application and the bail plea as well.

ED has alleged that DHFL extended loans to Sunblink Real Estate Pvt Ltd, which purportedly routed money to Mirchi, who died in the UK in August 2013. The ED accused Kapil Wadhawan of playing a very crucial role in the nefarious transactions.

DHFL came under the ED’s scanner when the agency was examining three properties linked to Mirchi, who was an aide of fugitive underworld don Dawood Ibrahim, in the prime Worli area of Mumbai.

ED has accused DHFL of creating five shell companies, which were eventually merged with Sunblink. According to the agency, the conduit of Sunblink was purposefully created by Kapil Wadhawan as CMD of DHFL and others just to obfuscate the trail of monies for the purchase of properties from Mirchi.

Sunblink is controlled by the Wadhawans.

ED has alleged that Wadhawan first diverted large funds from DHFL to shell companies. Later, these shell companies got amalgamated with Sunblink Real Estate Pvt Limited to cover the alleged diversions of loans acquired from DHFL.

The case

According to ED, Mirchi bought three properties in 1986 from the Mohammad Yusuf Trust, an organisation that Mirchi allegedly used as a front to negotiate with several developers.

In 2010, when Mirchi was based in Dubai, Sunblink Real Estate Pvt Ltd bought the three properties from him and later developed them.

ED said Mirchi signed the agreements in 2010, in which he received 90 million dirhams for the development rights of these properties. All these, the agency claimed, were proceeds of crime.

The agency started an investigation into the gangster’s assets in the city on the basis of eight cases of narcotics smuggling and extortion registered against him since 1985.

The central agency alleged in 1986 that Mirchi purchased three properties from Mohammad Yusuf Trust for Rs 6.5 lakh through his company Rockside Enterprises.

The properties – Sea View, Marium Lodge and Rabia Mansion – were bought using the proceeds of crime, ED alleged. As Mirchi subsequently left the country and was declared a proclaimed offender, the properties were confiscated by Mumbai Police under the Smugglers and Foreign Exchange Manipulators Act (SAFEMA).

However, during the court battle, the trust alleged the properties still belonged to them and not Mirchi. The court then handed over the properties to the trust in 2005.

ED claimed that Mirchi used the trust as a front.

Story Saved