The Mumbai court has granted bail to Rana Kapoor, the founder of Yes Bank, in a money laundering case involving ₹200 crores.
The case is allegedly linked to Mack Star Market Pvt Ltd and HDIL promoter Rakesh Wadhawan. The court ruled that Kapoor’s detention without a trial in sight cannot be justified merely on the basis of his alleged involvement in a financial crime.
Special Judge MG Deshpande delivered a 53-page order, in which he observed that Kapoor was the only accused still in pre-trial detention in the present case, despite more than two years and two months having passed since the case’s initiation.
“All other accused persons in this case (some of them having similar roles), have been released on bail. This long period of undue incarceration of 2 years, 2 months and 3 days was ignored making capital of alleged gravity, magnitude and seriousness of the offence. There is no likelihood in future that trial will begin and conclude as early as possible,” the Court observed while granting bail.
However, Kapoor will remain in jail as he is in judicial custody for three other cases. The judge also noted that Kapoor would exceed the minimum sentence of three years under the Prevention of Money Laundering Act (PMLA) in nine months.
He added that Kapoor’s involvement in a financial offence does not necessitate excessive incarceration.
“Economic Offences are different in nature and have to be looked from the perspective of its gravity and magnitude, that does not mean that undertrial prisoner should be kept without trial and should be dragged to undergo minimum sentence without trial. Kapoor has already undergone 73% of sentence of minimum punishment in jail, while the trial had not even proceeded by a millimeter. After repeated directions to ED for the compliance under S.44(1)(c), whatever hurry pretended by the ED is only for the trial of cases wherein all accused have been bailed out long ago. All that was not a bonafide response given to the court in respect of undertrial prisoners, who have been languishing in jail since long,” the judge said.
The judge who granted bail to Rana Kapoor in the money laundering case observed that the Prevention of Money Laundering Act’s (PMLA) main aim is ‘confiscation’ rather than ‘unjustified incarceration’ when the objective is ‘confiscation.’
The case against Kapoor reportedly started when the Central Bureau of Investigation (CBI) filed a FIR under the Prevention of Corruption Act in September 2020. The Enforcement Directorate (ED) initiated a case based on the same violation in October 2020.
The directors of Wadhawan allegedly obtained six loans totaling 200 crores from Yes Bank from 2011 to 2016, exercising operational control of Mack Star and its bank accounts without informing investors. They transferred the loan amount between HDIL and Mack Star accounts to repay a debt owed by HDIL to Yes Bank.
Kapoor was arrested on January 27, 2021, while he was already in custody for another case. The ED opposed his bail plea, arguing that investigations in both the ED and CBI cases were still ongoing. The judge ruled that Kapoor could not be held in custody merely because the CBI investigation was ongoing, and no chargesheet had been filed.
“Already 3 years have been lapsed, CBI has not filed chargesheet. Is it lawfully permissible to allow CBI to consume 7 years for filing report and till then suspend the right of undertrial prisoner? This is serious. ED cannot make capital that applicant’s bail application was pending and therefore, trial could not begin. If the same continues, the trial will never begin and the conclusion will be only a dream,” the order asserted.
The judge ruled that the trial in the present case could proceed, as the ED failed to apply for transferring both trials to the special PMLA court. He observed that this case was a clear example of such failure.
The court also found that other defendants, including bank officials, played roles similar to Kapoor’s and were part of the alleged conspiracy. Thus, they were on par with Kapoor.
While some of the defendants, including bank officials, had already been granted bail by either a special court or the Bombay High Court, Kapoor remained in custody.
The judge noted in the order that Kapoor was in judicial custody in another case, and ED filed an application seeking Kapoor’s custody in the current case, even though Kapoor was not named in the CBI FIR or ED case.
“Without any subjective satisfaction of the ED officer, his formal arrest was effected by the earlier judge dragging the applicant in the clutch of stringent twin conditions under Sec.45(1) of the Prevention of Money Laundering Act (PMLA)”, the judge observed.
