The main legal point established in the judgment is that the custody and remand of the petitioner were found to be legal and in compliance with the law, including the Arnesh Kumar case guidelines and the High Court order.

JUDGMENT

PRAKASH D.NAIK, J. - The petitioner has preferred this petition by invoking Article 227 of Constitution of India and Sec. 482 of Code of Criminal Procedure challenging the impugned order dtd. 14/8/2021 passed by Special Court (CBI) on Remand Application No.868 of 2021 and Exhibits 3 and 6 filed by petitioner seeking compliance of order dtd. 12/8/2021 passed by this Court in Writ Petition No.2846 of 2021 and granting police custody remand of petitioner. The petitioner also seeks declaration that CBI remand and custody and all subsequent proceedings including further custody of petitioner as illegal, non est and void ab initio in law.

2. The brief factual matrix relevant for adjudicating the issue in this petition is as follows :-

(a) The FIR bearing No.RC BA1/2020/A0004 was registered by CBI/ACB, Mumbai on 12/3/2020 for offence under Sec. 120B r/w 420 of Indian Penal Code and under Ss. 7, 11 and 12 of Prevention of Corruption Act, 1988 ('P.C.Act ' for short); (b) It is alleged that the applicant was the Managing Director and Chief Executive Officer of YES Bank Limited ('YBL '). He had obtained illegal gratification in the form of property in prime location in New Delhi at much less then realizable market value belonging to M/s.Avantha Reality Limited ('ARL ') for a loan taken by ARL from YBL for extending concessions, relaxations and waivers in the already existing credit facilities provided to Avantha Group ('AG;) Companies and for advancing new/additional loans to them. The petitioner entered into criminal conspiracy with his wife Smt.Bindu Kapoor and Mr.Gautam Thapar-Promotor of AG Companies, for the purpose of obtaining illegal gratification; (c) Information reveals that M/s.Avantha Holding Limited had obtained credit facilities from ICICI Bank Ltd and Development Credit Bank ('DCB ') against collateral security of the immovable property at 40, Amrita Shergil Marg, New Delhi. This property is owned by ARL and is lavish bungalow spread over an area of 1.2 acres approximately in prime location in Delhi. The valuation of the property in the loan books of ICICI Bank was done at Rs.550.00 crores. M/s.Avantha Holding Ltd and ARL are part of AG Companies;

(d) Information reveals that there was principal outstanding of Rs.350.00 crores to ICICI Bank and Rs.30.00 crores to DCB in March-2016 against charge of the above property;

(e) As a part of conspiracy, YES Bank sanctioned loan of Rs.400.00 crores to ARL in March-2016 as lease rental discounting (LRD) for a period of ten years. In lease rental discounting, the discounted values of future lease rentals proposed to be received by the borrower by leasing its properties are sanctioned as loan amount. For this purpose ARL is stated to have entered into lease rental agreement with M/s.BILT Graphics Paper Pvt.Ltd ('BGPPL '), another AG Company. As per agreement, lease rental of Rs.65.00 crore per annum was payable by BGPPL to ARL. The lease rental agreement was executed on 22/3/2016, just two days prior to sanction of loan of Rs.400.00 crores by YES Bank to ARL; (f) Earlier the aforesaid property was leased to M/s.Ballarpur Industries Ltd (BILT) on a lease rent. The proposed increase of rent of Rs.1.02 crore per annum to Rs.65.00 crores per annum was high and intentionally done to deceive YBL to make the loan approval look justifiable without reasonable basis. This appears to have been done with intention to get the loan account become stressed for justifying sale of the charged property at 40, Amrita Shergil Marg by ARL to Mr.Rana Kapoor in the name of BAPL. Wife of Rana Kapoor is Director in BAPL; (g) ARL was not eligible for loan. It had outstanding liability of Rs.690.00 crore and Rs.643.00 crore with YBL and reporting losses;

(h) Rana Kapoor as MD and CEO of YBL was head of Management Credit Committee of the Bank, which approved the loan of Rs.400.00 crores to ARL as well as release of property against repayment of loan; (i) Instead of initiating transparent process of sale