Supreme Court Setback For DHFL's Kapil Wadhawan In Bank Fraud Case

In a significant development in the DHFL loan scam case, the Supreme Court today ordered the immediate arrest of former company promoters Kapil Wadhawan and his brother Dheeraj, setting aside a Delhi High Court order granting them statutory bail.

Noting that the lower courts had made an "error", the Supreme Court said in its ruling that the accused cannot seek statutory bail after the chargesheet in the case had been filed and taken cognizance of. The court asked the lower court to hear the bail petition afresh.

"We have no hesitation that the charge sheet having been filed and cognisance being taken in due time, respondents could not have claimed statutory bail as a right," the bench of Justices Bela M Trivedi and S C Sharma said.

Under the Code of Criminal Procedure (CrPC), an accused is entitled to statutory bail if the probe agency fails to file the charge sheet on conclusion of the investigation in a criminal case within 60 or 90 days. In this case, the CBI filed the chargesheet on the 88th day after registration of the FIR. The trial court granted default bail to the accused, and the Delhi High Court upheld the order.

The Wadhawan brothers were arrested in this case on July 19 last year. The FIR is based on a complaint by the Union Bank of India. It alleges that DHFL, its then CMD Kapil Wadhawan, then Director Dheeraj Wadhawan and the other accused entered into a criminal conspiracy to cheat a consortium of 17 banks led by the Union Bank of India. The FIR says the accused induced the consortium to sanction huge loans. Much of the amount was allegedly siphoned off and misappropriated by alleged falsification of the books of DHFL, the CBI has claimed. The complainant has alleged that a wrongful loss of Rs 34,615 crore was caused to the consortium banks.