Mumbai Court Rejects CBI Plea for Further Probe into Indiabulls in Yes Bank Case
A special court in Mumbai on Monday rejected the Central Bureau of Investigation's request for permission to conduct a further investigation into Indiabulls Housing Finance Ltd and IVL Finance Ltd in connection with the Rs 4,733-crore Yes Bank-DHFL loan fraud case. The court ruled that the central probe agency had failed to produce sufficient material to justify a fresh investigation.
The judge noted that the CBI had previously submitted an affidavit before the Supreme Court affirming that there was no direct allegation of diversion or siphoning of funds by Indiabulls Housing Finance Ltd or its erstwhile promoters. Relying on the agency's own statements, the court observed that the CBI had stated there was no loss of public money and no prima facie criminal act disclosed from the material on record.
The case centres on allegations that Rana Kapoor, the former managing director and chief executive officer of Yes Bank, entered into a criminal conspiracy with other accused persons to siphon off Rs 4,733 crore. The initial complaint was registered against Dewan Housing Finance Ltd and 11 others, leading to the first chargesheet on June 25, 2020. Subsequent supplementary chargesheets were submitted in July 2021, June 2022, and July 2022 before a fourth supplementary chargesheet was filed on October 24, 2024, which named Indiabulls Housing Finance Ltd and IVL Finance Ltd as accused.
The special court had previously declined to take cognisance against Indiabulls and IVL Finance Ltd upon examining the fourth supplementary chargesheet. The CBI challenged that decision before the Bombay High Court, where the matter remains pending.
In its plea seeking a further probe, the CBI argued that an audit by the Reserve Bank of India in January 2017 brought Yes Bank's exposure to entities linked to developer Sanjay Chhabaria under scrutiny. The agency alleged that loans sanctioned by Indiabulls helped adjust Yes Bank's loan exposure and that Rs 19.3 crore was diverted to IVL Finance. It also pointed to loans granted by Yes Bank to companies allegedly linked to Indiabulls, including Rs 290 crore each to Tupelo Constructions Pvt Ltd and Tupelo Land Development Pvt Ltd, Rs 85 crore to Paidia Connection Pvt Ltd, and Rs 2,100 crore across two financial years to IVL Finance.
Dhani Loans and Services Ltd, formerly known as IVL Finance Ltd, had filed an application to intervene, arguing that no further investigation should be allowed without sufficient basis. The court held that because the plea for a further investigation was rejected, the company's intervention plea was redundant.
