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Background of the case

  • The CBI booked Yes Bank co-founder Rana Kapur and Dewan Housing Finance Limited (DHFL) promoters Kapil Wadhawan and Dheeraj Wadhawan under sections 420 (cheating) and 120B (conspiracy) of the Indian Penal Code (IPC) and sections 7 (public servant taking gratification), 12 (abetment of offences), and 13(2) (criminal misconduct) r/w. 13(1)(d) (obtaining any valuable thing or pecuniary advantage by any corrupt or illegal means or by abusing position) of the Prevention of Corruption (PC) Act, 1988.
  • However, on July 17, the special CBI court found that the investigation agency (CBI) had not applied to obtain sanction to prosecute the accused persons under provisions of the PC Act, as required under section 19 of the said Act. It remitted the case for trial to the metropolitan magistrate concerned and observed that the charges under the IPC sections were close to being proved.
  • The special court had said that it would not be proper and legal to keep the proceedings pending for an indefinite period in the hopes that the prosecution would apply for sanction in regards to the PC act charges.
  • The Wadhawans had moved the HC, taking strong exception to the observation, contending that it was likely to cause prejudice against them.

High Court’s observation

  • Justice Anuja Prabhudessai found substance in objection raised. The judge said the observation was made without any application of mind, as on the relevant date, the special court only considered the aspect of want of sanction to prosecute and remitted the matter to the magistrate.
  • “It is thus evident that the impugned observations have been made for the purpose of remitting the proceedings to the metropolitan magistrate, and that there was no application of mind for arriving at a prima facie conclusion that offences under sections 420, 409 r/w 120B of the IPC are in fact, made out against all the accused,” said the judge in the present case.
  • Hence, the High Court of Bombay struck down observations made by the special CBI Court stating that the offences of cheating & criminal breach of trust were “made out” against all the accused in the Yes Bank fraud case.
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