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Synopsis

A single judge bench of the Bombay High Court comprising Justice RG Avachat on Thursday said that the trials of Yes Bank founder Rana Kapoor and DHFL promoter Kapil Wadhawan in cases registered by the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) will be held together in the special PMLA court.

Justice RG Avachat referred to a previous order passed by the Supreme Court in the case of Rana Ayyub and emphasized the need to follow the law set by the highest court.

Both Kapoor and Wadhawan had challenged an order passed by the sessions court which refused to transfer the CBI case trial in PMLA case. The sessions court had rejected their request, stating that only the agency could file such a request and that it must be made before the CBI judge.

The ED then filed an application, which was also rejected by the court. As a result, both the accused and the ED approached the high court to challenge the orders.

Kapoor and Wadhawan argued that the PMLA court had the authority to try both CBI and PMLA offenses.

The Enforcement Directorate did not oppose the transfer of the trials, but the Central Bureau of Investigation (CBI) argued that there was no notification authorizing the PMLA courts to hear cases related to the Prevention of Corruption Act.

The petitioners stated that: “The intention of legislature in contemplating trial of the cases under the scheduled offence and the offence under Section 4 PMLA by the same court is that accused should not face multiple prosecutions and the dual agony of trial as the case registered by the Enforcement Directorate is nothing but an off shoot of the main scheduled offence case and the substratum of the both the cases remain the same”.

According to the CBI, Yes Bank invested roughly ₹4,727 crores in short-term non-convertible debentures of DHFL between April and June 2018. In addition, the bank granted a term loan of ₹750 crores to a DHFL group company. The CBI has claimed that Kapoor received a ₹600 crore kickback from DHFL in the form of a loan to his family's business, Do It Urban Ventures Private Limited.

It was also contended that since there were multiple common accused, witnesses, and documents in both cases, combining the trials would spare them the burden of undergoing two separate trials.