Mumbai:

A special CBI court on Thursday granted bail to Kapil Wadhawan, former director of erstwhile mortgage firm Dewan Housing Finance Corporation Ltd (DHFL), in an alleged loan fraud case linked to Yes Bank, citing delay in trial and a need for balance “between the right of individual liberty and interest of society”.

Special Judge AC Dagga, in his order in Mumbai, noted that economic offences have an adverse impact on society, but the accused cannot be “detained for years together without any ray of hope that the trial is going to start”.

Prolonged incarceration before being pronounced guilty of an offence should not be permitted as it will go against the right to life and personal liberty enshrined in the Constitution, the court observed.

Kapil Wadhawan was arrested in the fraud case on April 26, 2020, and has been in judicial custody since then. He, however, is not likely to walk out of jail as the former DHFL director is yet to secure bail in another case pending against him.

DHFL, once a leading mortgage lender, was acquired by the Piramal Group in 2021 under the Insolvency and Bankruptcy Code (IBC) after it faced debt crisis.

The case relates to the Yes Bank-DHFL scam of approximately Rs 4,000 crore where the private lender’s co-founder Rana Kapoor has been alleged to have entered into a criminal conspiracy with the then-promoters of DHFL, including Kapil Wadhawan.

The Central Bureau of Investigation (CBI) has claimed that Yes Bank had invested Rs 3,983 crore in DHFL (by way of subscription to debentures issued by the housing finance firm).

Later, the bank granted loans to DHFL in lieu of kickbacks of Rs 600 crore to be paid by it to the companies held by Kapoor and his family members, according to the central probe agency.

Besides this fraud, Kapil Wadhawan has also booked in various cases registered by the CBI and the Enforcement Directorate (ED).

Advocate Vijay Aggarwal, appearing for Kapil Wadhawan, had argued that his client deserves bail solely considering the long period in custody spent by him and there being no likelihood of trial commencing anytime soon.

Wadhawan has been in custody for more than four years and a chargesheet against him has already been filed. Subsequently, three more supplementary chargesheet were filed by the probe agency, advocate Aggarwal pointed out.

Investigation in the case is still continuing, which shows there is no likelihood of trial commencing despite a lapse of more than four years, he submitted.

Vijay Aggarwal contended that all other accused arrested earlier in the case, including real estate businessmen Sanjay Chabbaria and Avinash Bhosale, and Dheeraj Wadhawan, another DHFL promoter, have been released on bail.

Therefore, on grounds of parity, Kapil Wadhawan deserves to be released on bail, the advocate argued.

However, the CBI opposed the bail plea, saying the economic offence was of great magnitude and involved huge loss to the public.

Therefore, the matter needs to be viewed seriously as it affects the country’s economy as a whole, the agency contended.

The court, after considering all submissions, emphasised that there cannot be any dispute that economic offences have an adverse impact on the country and society.

“But at the same time, it cannot be said that the accused is required to be detained for years together without any ray of hope that trial is going to start. In that case, it will be violative of Article 21 of the Constitution (related to the protection of life and personal liberty),” the judge said.

The court said that there has to be a balance “between the right of individual liberty and interest of the society”.

Further highlighting the delay in trial, the court noted, “Fact remains that there is no hope of commencement of the trial and no likelihood of its conclusion in a stipulated time period.” The judge emphasised the accused’s right to a speedy trial.

“In this matter, the accused is in custody for around four-and-a-half years without trial being started, coupled with the fact that the co-accused having higher role in the offence namely Rana Kapoor being released on bail,” the court said.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

New Delhi:

The CBI has arrested former DHFL Director Dheeraj Wadhawan in connection with the alleged defrauding of a 17-member lender bank consortium to the tune of Rs 34,000 crore, officials said Tuesday.

Mr Wadhawan, arrested from Mumbai on Monday night, was produced before a special court here which remanded him in judicial custody on Tuesday, they said.

The former director of DHFL and his brother, Kapil, were earlier arrested in the case on July 19, 2022, they said.

The agency had filed a chargesheet against 75 entities including Kapil and Dheeraj Wadhawan on October 15, 2022.

They were granted “statutory” bail from the special court on December 3, 2022, on the grounds that the investigation was incomplete and the charge sheet filed was piecemeal. This order was upheld by the Delhi High Court as well.

The CBI had challenged the order in the Supreme Court, which set aside the bail orders noting that the Special Court as well as the High Court “committed serious error of law” in disregarding the legal position enunciated and settled by the top court.

In the meanwhile, Dheeraj Wadhawan got interim bail in a separate matter on medical grounds from the Bombay High Court as he was admitted at the Lilavati Hospital for treatment. The Bombay High Court had regularised the bail in that case on May 2 this year and had also extended his protection from CBI arrest for one week.

The CBI arrested Mr Wadhawan after the protection period was over, they said.

At present, three accused are in judicial custody – Dheeraj Wadhawan, his brother Kapil Wadhawan, and Ajay Nawandar.

The CBI had booked the Wadhawans and others on a complaint from the Union Bank of India, the leader of the 17-member lender consortium that had extended credit facilities to DHFL to the tune of Rs 42,871 crore between 2010 and 2018.

The agency in its chargesheet has alleged that Kapil and Dheeraj Wadhawan, in a criminal conspiracy with others, misrepresented and concealed facts, committed a criminal breach of trust and abused public funds to cheat the consortium to the tune of Rs 34,615 crore by defaulting on loan repayments from May 2019 onwards.

The CBI has alleged that the company committed financial irregularities, diverted funds, fabricated books and round-tripped funds to “create assets for Kapil and Dheeraj Wadhawan” using public money.

DHFL loan accounts were declared non-performing assets at different points in time by lender banks, the officials said.

When DHFL was hit by investigation in January 2019 after media reports on allegations of siphoning off funds surfaced, the lender banks held a meeting on February 1, 2019, and appointed KPMG to conduct a “special review audit” of DHFL from April 1, 2015, to December 31, 2018.

The audit pointed to the diversion of funds in the garb of loans and advances to related and interconnected entities and individuals of DHFL and its directors.

The scrutiny of account books showed that 66 entities having commonalities with DHFL promoters were disbursed Rs 29,100 crore against which Rs 29,849 crore remained outstanding, the CBI has alleged.

Most of the transactions of such entities and individuals were in the nature of investments in land and properties, it has alleged.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)