On Wednesday, The Supreme Court overturned the statutory bail previously granted to former partners of Dewan Housing Finance Corporation Limited (DHFL), Kapil Wadhawan and Dheeraj Wadhawan, who are implicated in a bank loan fraud scheme worth millions.
The apex court commanded that the initial bail petition is reconsidered by the trial court. Citing the timely filing and cognizance of the charge sheet, the court explained that the respondents didn’t have the right to claim statutory bail. [Connect with us on WhatsApp]
Both the trial court’s and the Delhi High Court’s decisions granting the Wadhawans’ statutory bail were dismissed by the top court. The court pointed out the errors made by the High Court and the lower court, instructing the trial court to reevaluate the regular bail request.
Statutory bail, by definition, is granted when an unfinished police investigation concerning an individual in judicial custody extends beyond a specified period.
In July 2022, the Central Bureau of Investigation (CBI) filed charges against the Wadhawan brothers and 13 others in relation to the case based on a grievance from the Union Bank of India (UBI).
UBI furnished DHFL with credit facilities amounting to Rs 42,871 crore during 2010-2018. As the leader of a 17-bank consortium, UBI mentioned that Rs 34,615 crore remains unpaid as of July 31, 2020. The loan was deemed as a non-performing asset (NPA) in 2019 and declared a fraud in 2020.
According to the CBI FIR, the dishonest acts started to occur between April and June 2018, when Yes Bank acquired Rs 3,700 crore in short-term DHFL debentures.
The Wadhwan brothers were apprehended in July 2022 and brought up on charges under Sections 120-B, 409, 420, 477A of the Indian Penal Code and Sections 13 (1) and (2) of the Prevention of Corruption Act.
The trial court’s statutory bail verdict for the Wadhwan brothers was supported by the Delhi High Court in May 2023. The CBI then contested it in the Supreme Court.
The Wadhawans contended that since proper investigations were not concluded even 60 days after their arrest, they should have been allowed statutory bail under CrPC’s Section 167.
According to the CrPC, if an investigation isn’t completed over a 60- or 90-day period (varying as per the offence), the right to bail must be accorded to the defendant.
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Frequently Asked Questions
What is Statutory Bail?
Statutory bail is essentially a legally mandated right to bail that accrues when police investigations concerning a person held in judicial custody aren’t concluded within a predefined period.
What transpired in the DHFL Case?
Ex-promoters of DHFL, Kapil and Dheeraj Wadhawan, were implicated in a multi-crore bank loan scam. They were initially given statutory bail, but this was cancelled by the Supreme Court which ordered a fresh hearing on the plea for regular bail.
On what grounds was the statutory bail revoked?
The Supreme Court stated that since the charge sheet had been filed and cognizance taken in due time, the defendants could not claim statutory bail. As a result, the bail orders previously granted by the trial court and the Delhi High Court were set aside.
