Bombay High Court rules trial in CBI and PMLA cases against Rana Kapoor and Kapil Wadhawan be heard together in Special ED Court

Bombay High Court rules trial in CBI and PMLA cases against Rana Kapoor and Kapil Wadhawan be heard together in Special ED Court

Allows petitions by the two accused facing criminal proceedings in corruption and money laundering cases

The Bombay High Court has ruled that the trials against Yes Bank founder Rana Kapoor and DHFL promoter Kapil Wadhawan in cases probed by the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) could be conducted together in a special ED court.

The bench of Justice RG Avachat passed the order citing the Supreme Court ruling in the Rana Ayyub case.

The court stated that since the highest court laid down the law in such matters, it was to be followed.

The CBI's case was that between April-June 2018, Yes Bank invested Rs.4,727 crores in short-term non-convertible debentures of DHFL. Subsequently, the bank sanctioned a term loan of Rs.750 crores to DHFL's group firm Do It Urban Ventures (India) Private Limited.

The CBI alleged that Kapoor received a kickback of Rs.600 crores from DHFL in the form of a loan to his family firm.

Both Kapoor and Wadhawan had then approached the principal sessions judge seeking a transfer of the case.

However, the judge held that since Kapoor and Wadhawan were the accused, they could not file such a request with the court. It could be made the ED before the CBI judge where the scheduled offences were being tried.

Thereafter, in 2021, the ED filed an application before the CBI court, but it was rejected.

The two accused then approached the high court challenging the order of the sessions court refusing to transfer the CBI trial to the Prevention of Money Laundering Act (PMLA) court. They claimed that the PMLA court was competent to try offences alleged by the CBI and the ED.

The accused-petitioners stated, "The intention of the legislature in contemplating trial of the cases under the scheduled offence and the offence under the PMLA by the same court is that the accused should not face multiple prosecutions and the dual agony of trial as the case registered by the ED is nothing but an offshoot of the main scheduled offence case and the substratum of both the cases remain the same."

The petitioners further contended that it would save them the agony of dual trial if both trials were combined, considering that there were a number of common persons accused, common witnesses, and common documents in both cases.

While the ED had no objection, the CBI contended there was no notification permitting PMLA courts to try offences under the Prevention of Corruption Act. 1988.