TMI Blog2021 (1) TMI 1115X X X X Extracts X X X X X X X X Extracts X X X X ..... hed by ED vide provisional attachment order dated 25th September 2020 being proceeds of crime in terms of Section 2 (1) (u) of PMLA Act. According to complainant if the applicant is released on bail, he will try to sell that property. Further investigation is still in progress. The offence is of serious nature. There is voluminous evidence showing involvement of the applicant in the crime. In the light of nature of evidence, no case for grant of bail is made out. It is settled law that while granting bail the Court has to keeping in mind the nature of accusations, evidence in support thereof. Huge loss of public fund is required to be viewed seriously. The Special Court under PMLA has analysed the material on record - there are no reason to deviate from the said observation. The applicant being MD/CEO of YES Bank has allegedly misused his position to gain undue financial gain to him and his family members. The applicant and his family earned beneficial. The statement of witnesses shows the modus operandi of the accused. Investigation revealed that YES Bank extended loans to entities despite incurring losses. These entities extended loan to company owned by family members of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same time, Mr. Kapil Wadhwan paid kick back of ₹ 600 Crores to applicant and his family members by extending loan of ₹ 600 Crores by DHFL to M/s. DOIT Urban Ventures (India) Pvt. Ltd ( DUVPL for short) a wholly owner subsidiary of M/s. RAB Enterprises (India) Private Ltd in which Bindu Kapoor, wife of applicant is a Director and 100% shareholder. Daughters of applicant Roshni Kapoor, Radha Kapoor Khanna and Rakhee Kapoor Tandon are 100% shareholders of M/s. DOIT Urban Ventures (India) Pvt. Ltd through Morgan Credit Private Ltd. The loan of 600 Crores was sanctioned by DHFL to DOIT on the basis of mortgage of sub-standard property having meagre value and by considering its future conversion from agriculture land to the residential land. M/s. DHFL has not redeemed amount of ₹ 3700 Crores invested by M/s.YES Bank in debentures. YES Bank also sanctioned loan of ₹ 750 Crores to M/s. RKW Developers which is DHFL group company for their Bandra Reclamation Project, Mumbai and whole amount was siphoned off by Kapil Wadhwan since entire amount was transferred by M/s. RKW Developers to M/s.DHFL without investment in Bandra Reclamation Project for which loan was san ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d though accused No. 6 did not have any business activity to repay the loan. Loan of ₹ 750 Crores was fraudulently given in the year 2018 from YES Bank by applicant to M/s. Belief Realtors Pvt. Ltd, which was a group company of R.K.W of Wadhwan s for SRA redevelopment of Bandra Reclamation Project. Deposits of people were used to purchase the debentures, and as such loan was given to accused No. 6 to camouflage. The amounts were further invested through subsidiary companies to divert the proceeds of crime and used for which accused No. 2 to 4 were hand in glove with applicant/accused. Wife of applicant arrayed as accused No.5, is the owner of M/s. RAB Enterprises India Pvt. Ltd., Co. which is impleaded as accused No. 8 in the complaint. The said company received a gift of ₹ 87 Crores from applicant. Wife of applicant is house-wife having no source of funds, yet her company made huge investments in its subsidiary companies, which fact was within her knowledge and thereby she had abetted commission of crime of money laundering by the applicant. The applicant illegally obtained money for accused No. 6 to 8 in connivance with Kapil Wadhwan, Dheeraj Wadhwan and others by ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case and thus, further incarceration of the applicant is unwarranted. The respondent/ED in various provisional attachment orders, have themselves attached the properties worth ₹ 600 Crores qua the applicant. Alleged proceeds of crime are not in applicant s hand. The applicant has not received money. Learned counsel adverted to averments in the application for bail with regards to grounds for bail. It is submitted that this is not a case of money laundering. The amount of ₹ 600 Crores was not a kick back but a genuine bonafide loan. Kickback is money paid to somebody illegally in return for facilitating financial advantage to another. Kickback is a bribe which is paid to facilitator of an illegal financial advantage by recipient of that financial advantage from proceeds received by him but at any rate as consideration for that financial advantage. In this case, amount of ₹ 600 Crores was disbursed to DUVPL on 8th May, 2017 pursuant to loan of 27th February, 2017. It is not money laundering but projecting the amount of ₹ 600 Crores in the balance-sheet as a loan received from DHFL, which is in fact as per the annual report audited and reflected in Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uiring antibiotics and his recent history of a bladder infection which was severe. He needs to be placed in a safe living environment at his residence in order to be protected from severe infection and high risk of death. The applicant has history of long standing bronchial asthama and seasonal allergy since childhood, that was severe. The applicant has severe hyper tension. He has major depressive disorder anxiety with panic attacks, hallucinations and amnesia since last 24 months. The depression has acutely worsened the applicant s health. The applicant has history of abnormal liver function, hiatal hernia, gastroesophageal reflux disease and elevated gastrin and chromogranin levels which needs to be closely monitored, as they are markers for developing liver failure and malignant of cancer of esophagus, stomach, small intestine or pancreas cancer. Reliance is placed on the medical case papers which are annexed to this application. The applicant need not be detained in custody. Bail can be granted on stringent conditions. The applicant has presently no connection with the YES bank and the question of tampering with the evidence does not arise. To take care of the apprehension tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent business activity and revenue. Mr. Venegaonkar then pointed the statement of applicant s wife dated 17th June 2020. She stated that she is a housewife looking after her husband and daughters. She do not have any independent source of income. She is dependent on her husband. She do not have any idea about M/s.RAB enterprise (India Private Limited). She had heard the name of the said company however, she do not have idea about the company. She do not know what type of business activities M/s. RAB Enterprises India Private Limited has been engaging in and what is the net worth of the said company. She do not know about the source of fund of M/s.RAB enterprises (India Private Limited) and its subsidiaries. Mr.Venegaonkar is relied on statement of Ajita Potdar dated 17th June 2020. She stated that M/s. DOIT Urban infrastructure was a company promoted by the applicant, and was in the business of project fit outs maintenance, administration and documentation. This company used to set up offices for the group companies promoted by applicant only. She further stated that she was transferred to DOIT on 31st May 2019. This was a group company promoted by applicant. The employees of DO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... burden of proof enumerated there is upon accused. He referred to Apex Court decision in the case of Union of India V.s. Hassan Ali 10. Mr. Venegaonkar submitted that for granting bail for the offence under Section 3 read with Section 4 of the PMLA Act, the twin conditions stipulated under Section 45 of the Act are required to be fulfilled. Even otherwise the offence is of serious nature. It is submitted that, Apex Court in the case of Nikesh Tarachand Shah Vs. Union of India and another 2018 11 SCC twin conditions under Section 45 of the Act were struck down by the Apex Court. Therefore, Section 45 has been amended by adding word under this Act . It is submitted that in view of the said amendment, the twin conditions stipulated therein, stand revived and applicable to offences under this Act. Mr. Jethmalani appearing for the applicant countered the submissions of Mr. Venegaonkar. It is submitted that in the Judgment of Nikesh Shah, the twin conditions under Section 45 of the PMLA Act, were struck down as unconstitutional. Merely adding the word under this Act to Section 45 does not revive the said conditions. He further submitted that this Court in the case of Sameer Bhujbal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noticed that simultaneously DHFL had sanctioned loan of ₹ 600 Crores to M/s.DOIT Urban Venture Limited of family Enterprise of applicant. As the said, the transactions appeared suspicious in nature, searches were conducted at the residential premises of the applicant on 06th March 2020 in connection with said transactions and crucial document were recovered. CBI registered FIR No. RC-219-2020-E0004 dated 07th March 2020 against DHFL, M/s. DOIT Urban Venture India Limited, applicant, promoter director CEO of M/s. YES Bank Limited, Kapil Wadhawan, promoter director of M/s. Diwan Housing Finance Limited, Mr. Dheeraj Wadhawan Director of RKW Developers Private Limited and others, under Section 120-B read with Section 420 IPC and Section 7, 12, 13(2) of P. C. Act. As per the FIR, the applicant had entered into criminal conspiracy with Mr. Kapil Wadhawan and others for extending financial assistance to M/s. DHFL by YES Bank Limited in lieu of substantial undue benefit to himself and his family members through the companies held by them. Investigation was initiated by respondent No.1 into offences of money laundering. The main accused applicant is the promoter of his family group ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investigation conducted so far reveals that total estimated proceed of crime is to the tune of ₹ 5050 Crore (3700+600+750). The figure has been disputed by the applicant. It is contended by the applicant that ₹ 600 Crores has been added once again. The complainant further mention that the group of companies beneficially owned by the applicant and his family members are controlled by Applicant. The modus operandi devised by the applicant, with criminal intent was to enjoy loan facility without providing proper collateral. The said money being proceeds of crime was laundered by the applicant. It is clearly established that the fund acquired by the accused were obtained without proper collaterals and as per prescribed requirement. The complainant also provides role played by each of the accused in transaction. The complainant mentioned that during the tenure of the applicant, YES Bank had extended loan to entity, despite them incurring losses and having negative net worth. There entities extended loans to the companies beneficially owned by applicant. Applicant s family members having no substantial business and on the basis of artificially inflated value of mortgage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s family members having no business which indicate the case of the Quid pro quo. According to the complainant there was no active or operating business in M/s. DUVPL at the time of proposal of loan. The loan proposal had been approved by DHFL on the basis of substandard properties furnish as security by DUVPL a company owned by daughters of applicant. The said company has no business activity and not generating any revenue. The applicant and Promoter/Director of DHFL conspired to get sanctioned loan to the respective entities from YES Bank and DHFL respectively. The Applicant was the person on ground interacting with Wadhawans. During the course of investigation, it was revealed that loan of ₹ 7500 Crores disbursed by YES Bank to M/s. Belief Realtors Private Limited. It was not utilized for the purpose to which is sanctioned. The proceeds of crime according to complainant involved in this case is ₹ 5050 Crores. It is also revealed that the applicant had siphoned off huge amount out of India through his family/group owned controlled companies. It is found that out of the proceeds of crime of ₹ 600 Crores, ₹ 378 Crores were invested overseas. The investi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in commission of offence under Section 3 of Prevention of Money Laundering which is punishable under Section 4 of the said Act. 16. I do not find any reason to deviate from the said observation. The applicant being MD/CEO of YES Bank has allegedly misused his position to gain undue financial gain to him and his family members. The applicant and his family earned beneficial. The statement of witnesses shows the modus operandi of the accused. Investigation revealed that YES Bank extended loans to entities despite incurring losses. These entities extended loan to company owned by family members of applicant. There was no active or operating business in DUVPL. The loan proposal was approved by DHFL on the basis of standard properties furnished as security by DUVPL, a company owned by daughters of applicant. DUVPL has no business activity and not generating revenue. Investigation revealed that money was laundered to buy properties at several places in India and abroad. 17. There are specific allegations against applicant that he has gained financial benefits. The submissions urged by applicant is in the nature of defense. It cannot be disputed that money lying with YES Bank is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n with regard to the gravity of offence is a factor which is in addition to the triple test or the tripod test that would be normally applied. In that regard what is also to be kept in perspective is that even if the allegation is one of grave economic offence, it is not a rule that bail should be denied in every case since there is no such bar created in the relevant enactment passed by the legislature nor does the bail jurisprudence provides so. Therefore, the underlining conclusion is that irrespective of nature and gravity of change, the precedent of another case alone will not be the basis for either grant or refusal of bail though it may have a bearing on principle. But ultimately the consideration will have to be on case to case basis on the facts involved therein and securing the presence of the accused to stand trial. Thus, even in this case it was observed that gravity of the offence is an aspect which is required to be kept in view by Court. 21. In the facts of the case, considering the magnitude of the offence, I am not inclined to grant bail in the present case. On the basis of evidence on record no case for grant of bail is made out. Order of this Court in S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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