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Treat cases with high stakes on priority, SC tells ED


The Supreme Court on Friday told the Enforcement Directorate (ED) that investigation into bank frauds involving high stakes should be taken up on priority basis as it is often the case that once bail is granted to the accused, the matter becomes difficult to decide.

The Supreme Court’s observation came while hearing a bail plea filed by Yes Bank founder Rana Kapoor in a 600- crore money laundering case involving DHFL promoter Kapil Wadhawan. (File)

The observation of the court came while hearing a bail plea filed by Yes Bank founder Rana Kapoor in a 600- crore money laundering case involving DHFL promoter Kapil Wadhawan. Kapoor was allowed to withdraw his bail plea to pursue other remedies in law available to him for seeking bail.

The bench of justices Sanjiv Khanna and SVN Bhatti said, “In all such cases where heavy stakes are involved and where money is to be recovered, you (ED) have to take it up on priority basis…Once the accused get bail, the matter will never be decided in another 10 years.”

ED arrested Kapoor on March 8, 2020. His bail plea was rejected twice by the Bombay high court during his total custody period of three years and five months. He approached the top court against a May judgment passed by the high court refusing bail.

The bench said, “The period for investigation (under the Code of Criminal Procedure -CrPC-) is at the most 90 days and you have gone beyond 360 days. There is something wrong. You cannot take up the investigation in this manner.”

Senior advocate Abhishek Manu Singhvi appearing for Kapoor argued that the minimum sentence for his offence of money laundering under the Prevention of Money Laundering Act (PMLA) is already over. Section 4 of PMLA provides for a minimum sentence of 3 years and maximum of 7 years. In September, Kapoor will have undergone half the period of his maximum sentence, Singhvi said, adding that this was a fit case for bail.

The bench told Singhvi, “This is not a case for us to interfere at this stage. You can move for bail later.” The bench further observed, “The period undergone by you is substantial, but this is a case which rocked the entire banking system. It did affect Yes Bank and the Reserve Bank of India (RBI) had to step in to protect investors.”

Singhvi replied, “It is true Yes Bank went into lot of difficulty, but it is factually wrong that it rocked the banking system.” He pointed out that Kapoor demitted office in 2019 and it was in March 2020, temporary restrictions were introduced imposing a withdrawal limit of 50,000 but the money of investors remained protected. He further informed the court that the first charge sheet was filed by ED in May 2020. Since then, the investigation has become never ending with subsequent charge sheets getting filed in 2021 and 2022.

“I will have done almost 50% of maximum sentence by next month. This will automatically entitle me for bail under Section 436A of CrPC.” This provision states that if an undertrial has undergone half the maximum punishment, he shall be released by the court on bail.

The court allowed Singhvi to withdraw the plea after recording in its order, “The petitioner seeks liberty to withdraw the special leave petition and states that if so advised, the petitioner will file application in terms of Section 436A of CrPC. Taking this statement on record, the appeal is dismissed as withdrawn.”

The present case against Kapoor relates to the allegation that in 2018, Yes Bank invested around 4,000 crore in bonds issued by DHFL. In return, as a “quid pro quo” it was alleged that a loan of 600 crore was received from DHFL into companies where Kapoor’s family members held stakes. Both the Central Bureau of Investigation (CBI) and ED in their probes found that the loan received amounted to “kickbacks”.

While dismissing Kapoor’s bail, the Bombay high court in its May 4 order said, “Investment relating to exact layering of proceeds of crime is still under investigation. The applicant (Kapoor) and his family members have incorporated or have beneficial interest in various companies. These factors cannot be ignored considering the role of the applicant in the crime, the magnitude and seriousness of the crime, the applicant is not entitled for bail.”



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