Complex money laundering cases such as Yes Bank - DHFL case encompass multiple levels of transactions and 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, observed the Bombay High Court while rejecting bail plea of realtor Sanjay Chhabriaa.
Justice MS Karnik dismissed the bail plea filed by Chhabriaa on October 9, observing that although the Directorate of Enforcement (ED) has filed a chargesheet against Chhabriaa, further investigation was on with regard to the larger offence of money laundering in the case.
Chhabriaa had approached the HC after the special court rejected his bail plea in August 2022. He had sought bail on the ground that though the ED submitted its prosecution complaint against him within the mandatory 60-day period but it had also sought permission from the special court to carry on further probe in the case.
Additional solicitor general Devang Vyas had submitted that the ED had completed its probe against the realtor, but the probe in the case was ongoing.
"Multiple interconnected transactions demand cumbersome investigation"
Agreeing with the ED, the HC said that 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.
“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,” Justice Karnik said in a detailed 42-page order.
The court added: “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.”
Entitled to default bail: Chhabriaa’s lawyer
Chhabriaa’s lawyer Vibhav Krishna submitted that he is entitled to default bail since the investigation in the case was incomplete even after 60 days of his arrest.
Disagreeing, justice Karnik said: “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 court added: “The accused undoubtedly has the right to a fair trial which is a dimension of the right to life and personal liberty… Likewise, it is also the duty of the respondent (ED) to conduct a comprehensive and complete investigation as regards the offence.”
According to ED, Chhabriaa 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.
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).
He has been granted default bail in the CBI’s corruption case related to the same offence by the Supreme Court in April this year.