The Delhi High court granted bail to Rana Kapoor, CEO of Yes Bank, and opined that the situation is different when there was no arrest made during the investigation. The rigours of Section 45 of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as “PMLA”) have to be followed only when the bail application is filed under Section 439 after arrest during an investigation or Section 438 of the Criminal Procedure Code, 1973 (hereinafter referred to as “Code”). The Court further held that when bail is sought on the grounds of observations of the Hon’ble Supreme Court in a case, then Section 45 of PMLA doesn’t have to be followed.
Brief Facts:
FIR was registered by CBI under Sections 120B, 406, 420, 468, and 471 of the Indian Penal Code, 1860 (hereinafter referred to as “IPC”) on basis of a complaint received from the Chief Vigilance Officer of Yes Bank.
Respondent also filed another case under Sections 44 and 45 of PMLA which is pending. In the complaint, it was alleged that Applicant Rana Kapoor granted various credit facilities without following the bank procedure which resulted in huge amounts of losses to Yes Bank. It was alleged that a loss to the tune of Rs. 466.51 crore has been caused to Yes Bank by committing various offences like cheating, forgery, and criminal misappropriation from 2017 to 2019.
The Applicant, however, was neither named as an accused in the FIR lodged by CBI nor was, he arrested during the investigation. The Applicant was summoned by the Learned Trial Court after taking cognizance of the case and at that time he was in judicial custody for some other case.
The present Application has been filed to seek Bail.
Brief Background:
The Applicant preferred a bail application in 2021 stating that he was not arrested during the investigation and has given his full co-operation in the investigation. The Respondent, however, contended the said bail application by arguing that the Applicant did not physically surrender to the Trial Court and hence, he is not entitled to bail. The bail application of the Applicant was dismissed, however, all other individuals who were also summoned by the Court were granted bail.
Contentions of the Applicant:
The main argument of the Applicant was that since the Applicant was not arrested during the investigation, he is entitled to bail as has been reiterated by the Supreme Court as well.
It was further argued that as per the case of Satinder Kumar Antil v. CBI (2022 SCC Online SC 825) the case of the Applicant falls under only Category C and not D and the word ‘custody’ refers to custody in the same case and cannot be perceived as custody in other cases.
Contentions of the Respondent:
It was argued that Satinder Kumar Antil case provides that the bail application should be decided on merits besides compliance with Section 45 of PMLA. It was further contended that Section 170 of the Code does not apply to the accused who is already in custody. It applies only when the accused is not arrested by the investigating agency and the charge sheet is filed without arrest. It was primarily argued that the present bail application be decided on merits.
Observations of the Court:
The Court observed that the Hon’ble Supreme Court in the case of Satinder Kumar Anil endeavored to categorize the types of offences so that Section 170 of the Code is not misinterpreted. Further, in the case of Siddharth v. State of UP (2022 1 SCC 676), it was held that the arrest before the filing of the charge sheet is not mandatory.
It was noted that the Applicant is implicated in PMLA and Section 45 of PMLA declares offences as cognizable and non-bailable. Moreover, it lays down stringent conditions for the grant of bail.
The Bench opined that as per the case of Satinder Kumar Anil if offences are punishable under Special Acts such as PMLA, Companies Act, 2013 etc., then the Bail application has to be decided on merits besides the compliance of other provisions as provided under the Special Acts.
The High Court further differentiated between the standing of co-accused Gautam Thapar and the Applicant by noting that the Applicant was named as Accused in the present criminal complaint only. The Applicant participated in the investigation as well since his statements were recorded in Section 50 PMLA. The Respondent did not file for custody of the Applicant even after filing the present complaint. The Applicant was taken into custody only because his Bail Application was dismissed.
The Delhi High Court expounded that the rigours of Section 45 PMLA would have been applicable only if the Applicant had filed bail under either Section 439 after arrest during an investigation or Section 438 of the Code. In the present case, the Applicant is seeking bail only on basis of the observations made by the Hon’ble Supreme Court in the case of Satinder Kumar Anil and hence, the Applicant is not required to pass the conditions of Section 45 PMLA.
The Court ruled that Section 170 of the Code does not suggest that the Accused can be taken into custody after his appearance in the Court especially when the Prosecution did not seek his arrest/custody.
The decision of the Court:
Considering the above-mentioned reasons, the Delhi High Court allowed the Application and granted Bail to the Applicant along with certain conditions.
Case Title: Rana Kapoor v. Directorate of Enforcement
Coram: Hon’ble Mr. Justice Sudhir Kumar Jain
Case No.: BAIL APPLN. 559/2022
Advocates for Applicant: Advs. Mr. Vikas Pahwa, Ms. Stuti Gujral, Ms. Priti Verma, Mr. Shaurya Singh, Mr. Prabhav Rali, Mr. Abhishek Pati
Advocates for Respondent: Advs. Mr. Anupam S. Sharma, Mr. Prakash Airan, Ms. Harpreet Kalsi, Mr. Ripudaman Sharma, Mr. Abhishek Batra, Mr. Nishant Chaudhary, Mr. Anurag Verma
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