Yes Bank-DHFL Loan Fraud: PMLA Court Denies Bail To Sanjay Chhabria

Yes Bank-DHFL Loan Fraud: PMLA Court Denies Bail To Sanjay Chhabria

Chhabria was arrested on June 7, 2022 by the Enforcement Directorate and the bail plea was filed on March 24 last year.

Charul Shah JoshiUpdated: Wednesday, February 14, 2024, 01:22 AM IST
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The special Prevention of Money Laundering Act (PMLA) court on Tuesday rejected the bail plea of Sanjay Chhabria booked in connection with the Yes bank-DHFL bank loan case. 

The court said that the builder “miserably failed to prove that he is not involved in money laundering” and the modus operandi deployed reflects that he may commit offence after being released on bail. Calling the offence “serious”, special Judge MG Deshpande said that its “gravity and magnitude cannot be overlooked”. 

Court highlights misuse of funds

The judge noted that soon after DHFL received Rs2,700 crore from Yes Bank in the first week of June 2018, DHFL sanctioned loans of Rs1,100 crore and Rs439 crore to Radius Estate Projects Pvt Ltd (REPPL) and Sumer Radius Realty Pvt Ltd – both controlled by Chhabria, who also availed loans of Rs678 crore and Rs100 crore for the same project in Flag Industries India Pvt Ltd. and Radius Estates Projects Pvt Ltd, respectively.

The court noted that the loan of Rs678 crore was obtained for developing a club house in the said project but wasn’t used for that purpose; in fact, the club work has not even started. It said that the entire loan was nothing but a part of proceeds of crime. “Taken as a loan, the amount was diverted by DHFL for various other purposes, turning the loan account into a non-performing asset,” the court said.

Chhabria was arrested on June 7, 2022 by the Enforcement Directorate and the bail plea was filed on March 24 last year. 

Chhabria’s lawyer Vibhav Krushna contended that no case of money laundering is made out and that the loan was taken in routine course of action. He said that DHFL was authorised to grant loan and thus the transaction between DHFL and Chhabria’s firm cannot come under the ambit of proceeds of crime.

The Enforcement Directorate, while referring to the transaction between Chhabria’s firms and DHFL had claimed that the latter had no instances of similar fund transfers to other service providers or entities without receiving any services from them or based on payments to be adjusted in future projects.

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