CBI Court Gives Relief to Balwa, Goenka and Dangi in Yes Bank-DHFL Case, Finds No Strong Evidence
In a major development in one of India’s most talked-about banking fraud investigations, a special Central Bureau of Investigation court in Mumbai has dropped proceedings against stockbroker Sanjay Dangi and real estate businessmen Shahid Balwa and Vinod Goenka in connection with the high-profile Yes Bank-Dewan Housing Finance Corporation Limited (DHFL) fraud case, stating that there was not enough evidence to support the allegations against them.
The decision has come as a major legal relief for the three accused, who were named in the CBI’s fourth supplementary charge sheet as part of the ongoing investigation into the multi-crore loan fraud case. The court observed that the prosecution failed to establish a clear and direct connection between the accused and the alleged criminal conspiracy involving the sanctioning and diversion of huge loans.
Apart from Dangi, Balwa and Goenka, the court also refused to summon six other individuals and firms named in the same charge sheet, further indicating that the evidence submitted by investigators did not meet the threshold required for criminal proceedings.
The Yes Bank-DHFL case has remained under the spotlight for years due to its massive scale and the involvement of some of the country’s biggest financial and business names. The case revolves around allegations that DHFL received huge financial assistance from Yes Bank in exchange for kickbacks and suspicious financial dealings involving multiple companies and individuals.
According to the CBI’s latest findings, DHFL had secured loans worth ₹4,733 crore from Yes Bank. Out of this massive amount, around ₹678 crore was allegedly diverted to firms linked to builder Sanjay Chhabria. Investigators claimed that a part of these funds—₹115 crore—was later transferred to Mentor Capital Ltd, a company associated with Sanjay Dangi, allegedly for the purchase of DHFL shares.
The CBI argued that this financial trail indicated a larger conspiracy involving misuse of banking funds and deliberate diversion of money for personal and corporate gains. However, the court was not convinced by the prosecution’s claims.
While examining the charge sheet, the court found that there was no direct evidence linking Sanjay Dangi to the process of sanctioning the loans or the alleged diversion of funds. The judge observed that merely receiving funds or being involved in related financial transactions was not enough to establish criminal intent without concrete proof of conspiracy.
The court also highlighted major contradictions in the timeline submitted by the investigating agency. In one supplementary charge sheet, the CBI stated that Yes Bank approved the loan on September 28, 2018, but records showed that the transfer to Dangi’s company took place four days before the actual sanction. This discrepancy significantly weakened the prosecution’s narrative.
In the case of Shahid Balwa and Vinod Goenka, the allegations were linked to an earlier ₹350 crore loan provided by Yes Bank between 2013 and 2016. The CBI had alleged misuse of those funds, but the court noted that its own documents acknowledged the loan had already been settled and repaid under a one-time settlement arrangement.
The judge observed that once the loan had been repaid and no fresh material suggested criminal misconduct, continuing proceedings against Balwa and Goenka would not be legally justified.
However, while granting relief to these key accused, the court did not close the door on the larger investigation.
Special Judge AC Daga found sufficient grounds to proceed against Summer Buildcorp Pvt Ltd and three individuals—Farid Sama, Rahul Shah, and Ramesh Shah—for their alleged role in a separate network of suspicious loan transactions connected to the Avenue 54 development project.
According to the court, the financial dealings linked to Avenue 54 appeared to involve a complex structure of transactions allegedly created to hide older debts and rotate funds across multiple entities.
The court also took note of allegations that Sanjay Chhabria’s Radius Group had used loans from Indian Home Finance Ltd (IHFL) to settle earlier liabilities, adding another layer of financial complexity to the broader case.
Judge Daga issued summons against Summer Buildcorp and the three individuals under several sections of the Indian Penal Code, including criminal conspiracy, cheating, and provisions under the Prevention of Corruption Act.
In another major relief for Balwa, Goenka and Dangi, the court directed the CBI to immediately withdraw the Look Out Circulars (LOCs) issued against them. LOCs are generally issued to prevent accused persons from leaving the country during investigation or trial.
The court made it clear in its order that since no prima facie case was made out against the three accused, there was no legal basis to continue restrictions or criminal proceedings against them.
Legal experts say this order could have a significant impact on the broader Yes Bank-DHFL investigation, as it raises important questions about the quality of evidence collected by investigative agencies in large-scale white-collar crime cases.
The Yes Bank-DHFL case originally came into focus after allegations surfaced that Yes Bank co-founder Rana Kapoor sanctioned large loans to DHFL in return for kickbacks routed through companies linked to his family. Over time, the case expanded, bringing several businessmen, developers and financial intermediaries under investigation.
While this latest order gives immediate relief to some of the high-profile names, the larger investigation into the alleged financial irregularities, loan diversions and corruption remains active.
For now, the court’s ruling marks a significant turning point in the case—offering relief to some accused while reinforcing that the broader probe into one of India’s biggest banking scandals is far from over.
News source: Information for this article was gathered from a variety of reliable news outlets.
