Bombay High Court Denies Bail To Sanjay Chhabria Booked In Yes Bank-DHFL Multi-Crore Scam

The Bombay High Court on Wednesday dismissed the bail application of developer Sanjay Chhabria of the Radius Group, involved in a money laundering case related to the multi-crore Yes Bank-DHFL Scam.

This is the second time that Chhabria's bail was rejected by the High Court. He was arrested in April 2022 on the allegation that a company related to him has availed a loan of ₹ 2,137 crores from DHFL. The allegation is that this amount was a 'proceed of crime' as it was part of the amount which was given to DHFL by Yes Bank, in an illegal manner. Further, he did not use the said amount for the purpose for which it was availed but instead the Enforcement Directorate (ED) alleged that most of the amount was used for personal gains through sham companies.

Single-judge Justice Manish Pitale dismissed his bail plea saying there was prima facie material to show his involvement in dealing with the proceeds of crime. The judge noted that the ED has elaborately stated in its report the money trail, showing the manner in which the amounts of loan totalling more than ₹ 2,000 crores were diverted at the behest of Chhabria, without being utilised for the purpose for which the loan was taken.

"This Court is of the opinion that the material on record, prima facie indicate the involvement of the applicant in the offence of money laundering under Section 3 of the PMLA. The manner in which the money trail is traced showing the diversion of amounts, justifies the contention raised on behalf of the ED that the involvement of the applicant in the second leg of the process of money laundering is prima facie made out," the judge said in the order.

The bench noted from the statements recorded during the course of investigation that the same make out a prima facie case against Chhabria for being involved in concealment and possession of the proceeds of crime.

"The material on record does not justify the applicant's 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," the judge held.

The judges refused to accept the argument of Chhabria, who sought "parity" citing the fact that most of the arrested accused persons including prime accused Rana Kapoor have been bailed out. The bench said that the accused played a vital role in laundering the money and parking the proceeds of crime and thus cannot claim parity as even Rana Kapoor got bail only after he spent more than three years in the jail, which is half of the maximum 7 years jail term that can be handed over to him after conviction.

The bench even refused to accept the contention of delay in commencement of trial as a ground cited by Chhabria to seek bail. It therefore, ordered the trial court to expedite the trial. With these observations, the judge dismissed the bail plea.