DHFL scam: Supreme Court cancels default bail granted to Kapil and Dheeraj Wadhawan

The Supreme Court on Wednesday set aside a Delhi High Court order granting default bail to former promoters of Dewan Housing Finance Limited (DHFL) Kapil Wadhawan and his brother Dheeraj Wadhawan, who were arrested in a multi-crore bank loan scam case..A Bench of Justices Bela M Trivedi and Pankaj Mithal today said that the chargesheet against the two accused was filed within time, and that the relevant trial court had taken cognisance of the charges within time. As such, the Bench held that the Wadhawan brothers could not have claimed statutory bail as a right. The top court, therefore, set aside orders of the trial court and the Delhi High Court granting the duo default or statutory bail."Both, the Special Court as well as the High Court having committed serious error of law in disregarding the legal position enunciated and settled by this Court, the impugned orders deserve to be set aside and are accordingly set aside," it said..The bench made it clear that pendency of the probe against co-accused cannot be a ground to claim default bail."The pendency of the further investigation qua the other accused or for production of some documents not available at the time of filing of chargesheet would neither vitiate the chargesheet, nor would it entitle the accused to claim right to get default bail on the ground that the chargesheet was an incomplete chargesheet or that the chargesheet was not filed in terms of Section 173(2) of Cr.P.C.".Both accused were arrested by the Central Bureau of Investigation (CBI) in July 2022, on allegations that they were involved in a ₹ 34,615-crore bank fraud case.A chargesheet was filed against them and other accused in October 2022, although this final report mentioned that further investigation is continuing on certain aspects..The allegation is that Kapil Wadhawan, Dheeraj Wadhwan and other accused persons entered into a criminal conspiracy to cheat a consortium of seventeen banks led by Union Bank of India.The complaint alleged that the accused induced the consortium banks to sanction loans aggregating to ₹42,871.42 crore. Much of this amount was allegedly siphoned off and misappropriated by the alleged falsification of books of DHFL. Also alleged was dishonest default in repayment of the legitimate dues of the said consortium banks.It was further alleged that a wrongful loss of ₹34,615.00 crore was caused to the consortium banks between January 2010 and December 2019.The Wadhawan brothers eventually approached a Delhi court for bail.They argued that even though more than 60 days have passed since their arrest, the investigation into the matter was not complete.Therefore, they are entitled to statutory bail under Section 167 of the Code of Criminal Procedures (CrPC), they argued..In October 2022, a trial court in Delhi initially rejected this bail plea.In November 2022, a special court took cognisance of the charges against various persons accused in the DHFL scam, including the Wadhawan brothers.On December 3, 2022, a Delhi trial court granted the Wadhwan brothers default bail on the ground that the chargesheet filed by the CBI within the stipulated time was incomplete.This trial court order was later upheld by the Delhi High Court in May 2023, which found that the sessions court's bail order was "based on good reasoning and logic."These decisions were challenged by the CBI before the Supreme Court, which has now allowed the appeal and ordered the withdrawal of default bail to the Wadhwan brothers.The Court has, accordingly, ordered that the duo be taken into custody forthwith.Additional Solicitor General SV Raju represented the CBI while Senior Advocate Mukul Rohatgi appeared for the Wadhawan brothers. .[Read judgment]