Wadhawan is not likely to walk out of jail as he is yet to get bail in another case.
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.)