PMC Scam: Accused Father-Son To Be In Jail, Top Court Holds House Arrest

Promoters of the real estate firm HDIL at the centre of the massive PMC Bank scam will remain in a Mumbai jail for now. The Supreme Court on Thursday put on hold a high court order that allowed them to be placed under house arrest.

Rakesh Wadhawan and his son Sarang Wadhawan, arrested for their alleged involvement in the PMC bank scam and kept at Mumbai's Arthur Road jail should not be shifted out, the Enforcement Directorate (ED) and the Economic Offences Wing of the Mumbai police had told the Supreme Court.

Solicitor General Tushar Mehta raised the case before a bench headed by Chief Justice S A Bobde and said the Punjab and Maharashtra Cooperative (PMC) bank scam involved Rs 7,000 crore and the Bombay High Court had on Wednesday passed a very "unusual order" while hearing a public interest litigation (PIL).

Mr Mehta told the court that shifting the father and son to their residence as per the high court's order would be like bail to them and wanted only that of the ruling to be side aside.

The high court had on Wednesday set up a three-member committee for valuating and sale of encumbered assets of Housing Development and Infrastructure Limited (HDIL) to recover the money it owes to PMC bank.

The high court had directed the superintendent of Arthur Road jail to shift both the accused to their residence under the supervision of two jail guards to ensure their cooperation to the committee. The high court had passed the order while hearing a PIL seeking direction for expeditious disposal of HDIL assets and properties attached by the Economic Offence Wing and the Enforcement Directorate and repaying PMC bank depositors at the earliest.

The fraud at PMC Bank came to light in September last year after the Reserve Bank of India discovered that the bank had allegedly created fictitious accounts to hide over Rs 4,355 crore of loans extended to almost-bankrupt HDIL.

According to RBI, the PMC bank masked 44 problematic loan accounts, including those of HDIL, by tampering with its core banking system, and the accounts were accessible only to limited staff members. Mumbai Police's Economic Offences Wing and the ED registered offences against senior bank officials and HDIL promoters.

(With inputs from PTI)