CBI Court Drops Charges Against Key Accused in Yes Bank-DHFL Fraud Case Over Lack of Evidence
Mumbai , March 16 : In a major twist in one of India’s biggest financial fraud investigations, a special Central Bureau of Investigation court in Mumbai has dropped proceedings against stockbroker Sanjay Dangi and prominent real estate businessmen Shahid Balwa and Vinod Goenka in connection with the multi-crore Yes Bank-DHFL loan fraud case, citing lack of sufficient evidence.
The decision comes as a significant setback for the CBI, which had named the trio in its fourth supplementary charge sheet while investigating alleged irregularities involving massive loans sanctioned by Yes Bank to Dewan Housing Finance Corporation Limited (DHFL).
The special court observed that the evidence placed on record was not strong enough to establish criminal conspiracy or direct involvement of Dangi, Balwa, and Goenka in the alleged fraud. As a result, the court refused to summon them for trial and also declined to proceed against six other individuals and firms named in the same charge sheet.
According to the CBI’s investigation, DHFL had received loans worth ₹4,733 crore from Yes Bank, and a part of these funds—around ₹678 crore—was allegedly diverted to firms linked to builder Sanjay Chhabria. Investigators further claimed that ₹115 crore out of this amount was transferred to Mentor Capital Ltd, a company associated with stockbroker Sanjay Dangi, for the purchase of DHFL shares.
The prosecution argued that this transfer formed part of a larger conspiracy involving misuse of bank funds and financial manipulation. However, the court found several loopholes in the CBI’s case.
One of the key observations made by the court was the absence of any direct evidence connecting Sanjay Dangi to the loan approval process or the alleged diversion of funds. The court noted that merely receiving money in a transaction was not enough to establish criminal intent unless backed by concrete evidence.
The judge also pointed out inconsistencies in the timeline presented by investigators. While an earlier supplementary charge sheet showed that Yes Bank sanctioned the loan on September 28, 2018, the alleged transfer to Dangi’s company had taken place four days earlier. This contradiction weakened the prosecution’s argument and raised serious questions about the sequence of events.
In the case of Shahid Balwa and Vinod Goenka, the CBI had alleged misuse of a separate ₹350 crore loan sanctioned by Yes Bank between 2013 and 2016. But the court dismissed these allegations as well, noting that the agency’s own charge sheet admitted the loan had already been settled and repaid under a one-time settlement agreement.
The court stated that once repayment was acknowledged and no clear evidence of criminal misuse was presented, continuing proceedings against them would not be justified.
However, while granting relief to these high-profile accused, the court did find enough grounds to proceed against others.
Special Judge AC Daga issued summons to Summer Buildcorp Pvt Ltd and three individuals—Farid Sama, Rahul Shah, and Ramesh Shah—under various sections of the Indian Penal Code and the Prevention of Corruption Act.
The court noted that these individuals and entities appeared to have played a role in creating a complex web of financial transactions linked to the Avenue 54 development project. Investigators alleged these transactions were used to hide old debts and rotate funds in suspicious ways.
The order also highlighted that Sanjay Chhabria’s Radius Group allegedly used loans from Indian Home Finance Ltd (IHFL) to clear previous liabilities, adding another layer to the broader financial irregularities under investigation.
In addition to dropping charges, the court directed the CBI to withdraw Look Out Circulars (LOCs) issued against Balwa, Goenka, and Dangi, giving them significant legal relief.
The judge clearly stated in the order, “As no case for issuing process is made out, proceedings against the applicants are dropped.”
The development marks a crucial turning point in the larger Yes Bank-DHFL investigation, which has remained one of India’s most closely watched banking scam probes. The case originally revolved around allegations that Yes Bank founder Rana Kapoor had sanctioned huge loans to DHFL in return for kickbacks through companies linked to his family.
Over the years, the case has widened, bringing in several businessmen, developers, and financial entities under scrutiny.
While this order provides immediate relief to some accused, the broader investigation into the multi-thousand-crore financial dealings continues, and legal experts believe more developments could emerge as the CBI pursues the remaining accused.
For now, the court’s decision has raised fresh questions over the strength of evidence presented in complex white-collar crime cases and the challenges investigative agencies face in proving large-scale financial conspiracies in court.
News source: Information for this article was gathered from a variety of reliable news outlets.
