The
Bombay High Court has refused to grant default bail to realtor Sanjay Chhabriaa
in the Yes Bank money laundering case, observing that money laundering involves
intricate processes to make illegally-obtained money appear legitimate and
hence require in-depth investigation.
A
single bench of Justice M S Karnik on October 9 dismissed Chhabriaa's petition
seeking default bail on the ground that though the Enforcement Directorate (ED)
submitted its prosecution complaint against him within the mandatory 60-day
period, it had also sought permission from the special court to carry on
further probe in the case. The ED's case was that while the probe against
Chhabriaa was complete, the investigation regarding the case was still on.
The
high court in its order agreed with the agency and said the offence of money
laundering involves multiple interconnected transactions and the same demands
cumbersome investigation, and that the ED in the present case was investigating
an economic offence which demands in-depth and detailed investigation. "The
accused undoubtedly has the right to a fair trial which is a dimension of the
right to life and personal liberty under Article 21 of the Constitution of
India. Likewise, it is also the duty of the respondent (ED) to conduct a
comprehensive and complete investigation as regards the offence," the
order said. "Money laundering refers to the process of making
illegally-obtained money appear legitimate or clear in order to disguise its
illicit origins. The ultimate goal of money laundering is to integrate illicit
funds into the lawful financial system, making it challenging for authorities
to trace and seize the proceeds," the court said.
Money
laundering involves intricate processes designed to obfuscate the origin of
illegally-obtained funds, Justice Karnik said, adding the complexity of a money
laundering case is determined by the intricacy and sophistication of the
methods used to disguise the illicit funds. "Complex money laundering
cases, such as the one at hand, encompass multiple levels of transactions. These
cases typically involve intricate schemes and techniques aimed at creating
numerous layers of obfuscation, making it challenging for investigators to
unravel the true nature of the illicit funds," the HC said in its
order. The ED's case is that Chhabriaa had played a crucial role in
diverting funds procured illegally by Yes Bank's founder Rana Kapoor and Dewan
Housing Finance Limited (DHFL) promoter Kapil Wadhwan. Justice Karnik said
further investigation was on with regard to the larger offence of money
laundering in the case.
"There
is no embargo for conducting any further investigation in the case by the
respondent to bring any further evidence, oral or documentary, against any
accused person involved in the offence, against which the complaint has been
filed," the HC said. Chhabriaa's lawyer Vibhav Krishna said since the
investigation in the case was incomplete even after 60 days since Chhabria's
arrest in the case, the accused stands to get relief of default
bail. Chhabriaa was arrested by the ED on June 7, 2022 in connection with
the Yes Bank-DHFL money laundering case.
On
August 4, 2022, the ED submitted its prosecution complaint (chargesheet).
Krishna argued that the complaint was filed by the ED without completing its
investigation only to scuttle the indefeasible right accrued in favour of the
accused to claim default bail. He submitted to the court that Chhabriaa
was granted default bail in the CBI's corruption case related to the same
offence by the Supreme Court in April this year. Chhabriaa moved the HC
seeking bail in the ED's case after a special court rejected his plea in August
last year. Additional Solicitor General Devang Vyas opposed the plea and argued
that the investigation with respect to Chhabriaa is complete but the probe in
the whole case is still on.