Mumbai: The Bombay High Court has rejected the bail plea of developer Sanjay Chhabria of the Radius Group, who is accused in the multi-crore Yes Bank-DHFL Scam in which several persons including Yes Bank founder Rana Kapoor and DHFL promoters Dheeraj and Kapil Wadhawan are arrested by the Directorate of Enforcement (ED).
The court noted that, prima facie, there is enough material against Chhabria to indicate his involvement in the offence of money laundering under the Prevention of Money Laundering Act (PMLA). Chhabria approached the HC after his bail was rejected by the special court on February 13.
Chhabria was arrested by ED on April 28, 2022. Initially an offence was registered by the Central Bureau of Investigation (CBI) on March 7, 2020 against Rana Kapoor and Wadhawans under the provisions of the IPC and Prevention of Corruption Act. They allegedly hatched a conspiracy, whereby Kapoor made Yes Bank Ltd to invest a huge amount of Rs 3,700 crores in DHFL, in lieu of kickback of Rs 600 crores paid to Kapoor, his companies, as also his family members.
Since it involved proceeds of crime, ED registered an offence under the PMLA. Chhabria’s name cropped up while probing the role of Pune businessman Avinash Bhosale.
According to the ED, the loan amount taken by Chhabria from DHFL to the tune of more than Rs 2,000 crores was ostensibly taken for a project ‘Avenue 54’ of his Company. But, actually the said amount was diverted for other purposes, including payment to Bhosale’s companies under such suspicious loan agreements, ED counsel Hiten Venegavkar argued.
Chhabria’s advocate Vikram Nankani sought bail, submitting that he was behind bars since his arrest on April 28, 2022 and the trial will take a long time as the ED has said it will examine more than 70 witnesses. Also, if convicted, the punishment is three to seven years. Also, Bhsoale and Chhabria are the only ones in custody in the case, rest are either on bail or not arrested.
Also, the amount disbursed by DHFL to the company of the applicant i.e. Radius Estate Projects Private Limited and other group of companies, was a pure and simple loan transaction. The court, however, noted that statements of witnesses and the money trail do raise a prima facie case against Chhabria being involved in concealment and possession of the proceeds of crime.
“The material on record does not justify the applicant’s (Chhabria) claim that this is a pure and simple loan transaction, the repayment of which was delayed. Instead, the material on record prima facie shows the money trail and flow of funds indicating that the proceeds of crime indeed found their way to the applicant, who not only came in possession of the same, but he acted in a manner so as to conceal such proceeds of crime,” Justice Manish Pitale observed on Thursday.
The judge, however, said that the court cannot ignore the right of the applicant for a speedy trial. Hence, Justice Pitale asked the special court to expedite the trial.
