TaxTMI 
TaxTMI 
2025 (8) TMI 1757
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....ections from this Court for grant of regular bail in FIR/RC No. RC2242022A0001 dated 20.06.2022, registered under Sections 120B read with 409, 420, 477A IPC, Section 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988, and subsequently added Sections 411, 424, 465, and 468 IPC. Background: 2. The present FIR/RC No. 2242022A0001 was registered by the CBI, New Delhi on 20.06.2022 under Sections 120B read with 409, 420, and 477A of the IPC and Section 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988. The case was registered against DHFL, its promoters Kapil Wadhawan (the applicant), Dheeraj Wadhawan, and others for entering into a criminal conspiracy to cheat a consortium of 17 banks led by Union Bank of India. They induced the banks to sanction loans aggregating to Rs.57,242.05 crores and subsequently siphoned off and misappropriated large portions of the funds. Books of accounts of DHFL were allegedly falsified to conceal the fraud. The consortium suffered a wrongful loss of Rs.34,926.77 crores during the period from January 2010 to December 2019. 3. Upon completion of the investigation, the CBI filed a charge sheet under Section 173 CrPC on....
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....es to siphon funds, falsely recorded as retail housing loans to over 2.6 lakh fictitious customers through a non-existent "Bandra Branch-001" in DHFL's internal systems. He allegedly manipulated the FoxPro and Synergy accounting software to fabricate loan accounts, maintained a parallel "Bandra Book" to conceal fraudulent transactions, and misled both the lending banks and the National Housing Bank. 7. Further, the petitioner is accused of misusing DHFL funds for personal and group benefit, including artificially inflating DHFL's stock price, diverting Rs.7,748.75 crores sanctioned for Slum Rehabilitation projects, and routing large sums through sham transactions to settle liabilities and fund Wadhawan Group companies. He allegedly converted unsecured debts into secured loans using complex layering, laundered proceeds of crime through high-value paintings while in custody, and continued to conceal the illicit origins of assets. The investigation portrays him as the central figure who conceived, directed, and benefited from the fraudulent scheme, causing massive loss to public funds and warranting denial of bail given the scale, gravity, and continuing nature of the offence. S....
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....of this Court, which includes P. Chidambaram v. Directorate of Enforcement (2020) 13 SCC 791, Satender Kumar Antil v. CBI (2022) 10 SCC 51 and Arvind Kejriwal v. CBI 2024 SCC OnLine SC 2550, which reaffirm that economic offences are not a distinct class and that long incarceration of undertrials without progress of trial is impermissible. It was further argued that concurrent jurisdiction under Section 439 CrPC empowers the High Court to grant bail directly and that the Applicant has already availed bail in most of the other cases pending against him. 11. Learned senior counsel highlighted that the Applicant has been granted bail in all other cases related to DHFL, including proceedings under both the IPC and the PMLA. The Applicant has been continuously in custody for over four years and ten months, with almost 3 years in the present case alone. The chargesheets cumulatively propose examination of more than 736 witnesses and rely on over 2.7 lakh pages of documents and around 2 TB of electronic data, which may translate into over a lakh additional page. It has been emphasised that this Court has already observed in the matter of co-accused, Dheeraj Wadhawan v. CBI, BAIL APPLN. ....
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.....33,029.17 crores were diverted and not a single rupee has been repaid. Furthermore, DHFL collected Rs.2,39,491.98 crores through Non-Convertible Debentures (NCDs) and Rs.5,296.03 crores through Fixed Deposits. The admitted dues at the time of the resolution process were approximately Rs.90,000 crores. It was submitted that none of the orders of NCLT, NCLAT or the Supreme Court in Piramal Capital and Housing Finance Ltd. v. 63 Moons Technologies Ltd. 2025 SCC OnLine SC 690 record any settlement or repayment by DHFL or its promoters towards the diverted amount, and that the applicant is misleading this Court with distorted figures. 15. The learned Special Counsel further submitted that although the FIR named only 3 individuals and 10 entities, loans and advances to 131 entities were under scrutiny. Out of these, 49 entities were found to be genuine borrowers, and 82 entities were involved in the diversion of funds. Out of these 82 entities, 6 were already being prosecuted in other cases (notably the Yes Bank case) and thus not reinvestigated. A few were duplicate entries or in resolution proceedings or had ceased to exist. Ultimately, 69 entities, including 57 "Bandra Book" entit....
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.... obstruct justice. 19. Finally, it was argued that the applicant cannot claim parity with co-accused who have been granted bail, as the circumstances in their cases were materially different. Co-accused Dheeraj Wadhawan's bail was granted solely on medical grounds by this court, is under challenge before the Supreme Court, Sunny Bathija's bail was granted due to prolonged custody and not on merits and Ajay Nawandar's bail was granted on medical grounds and due to his limited role. It was emphasized that the Petitioner, being CMD of DHFL, was the principal architect of the entire conspiracy and the prime beneficiary of the defrauded amounts. His custodial conduct, antecedents, and potential to tamper with evidence clearly disqualify him from the relief of bail. Reliance has been placed upon P. Chidambaram v. Directorate of Enforcement (supra), and other judgments laying down the triple test for grant of bail, to submit that the applicant fails to meet any of the established criteria. 20. Further reliance has been placed on, State of Gujarat v. Mohanlal Jitamalji Porwal AIR 1987 SC 1321, CBI v. Ramendu Chattopadhyay AIR Online 2019 SC 1516, Gulabrao Baburao Deokarv. State of Ma....
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.... 24. The learned senior counsel also brought to the Court's attention that loans worth Rs.3,300 crores form the subject matter of a separate FIR registered in Mumbai, in which the petitioner has already been granted bail. Therefore, these amounts should not be considered as part of the default in the present proceedings. It was thus urged that the actual recoveries and reductions in claims, when taken together, demonstrate that out of Rs.87,000 crores of admitted claims, recoveries amounting to Rs.66,700 crores have either been made or are in the process of realization. 25. It was further submitted that substantial securities worth Rs.30,000-Rs.40,000 crores have not even been valued or factored in by the CBI while presenting the financial picture. Furthermore, it was pointed out that assets worth Rs.2,200 crores belonging to the petitioner and his family have been attached by investigating agencies, a fact which has been deliberately suppressed by the prosecution. In these circumstances, it was urged that the CBI's financial projections and recovery claims are not only erroneous but also unreliable. 26. The learned senior counsel next submitted that the CBI has made as ma....
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.... is based entirely on documentary evidence, and no allegations have been made regarding witness tampering or non-cooperation. The petitioner has also been granted bail in a connected PMLA case. In light of the delay in trial, parity with other accused, and the need to prepare for a voluminous case, it is submitted that the petitioner is entitled to be enlarged on bail. Analysis and Conclusion: 31. After hearing the rival submissions made by the parties and perusing the documents placed on record the court is not persuaded to grant regular bail to the applicant considering the magnitude, complexity, and gravity of the economic offences alleged against him. The material placed on record prima facie reveals that the applicant, as CMD of DHFL, was at the helm of a conspiracy that resulted in the diversion and misappropriation of approximately Rs.34,926.77 crores from a consortium of 17 banks. The methodical falsification of accounts, creation of fictitious retail borrowers, manipulation of internal software, and maintenance of a separate "Bandra Book" strongly indicate premeditated, systemic fraud. These acts, if proven, are not merely violations of penal statutes, but subvert th....
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....e accused cannot be the sole factor justifying bail. In contrast, the Supreme Court in Sanjay Chandra v. CBI (2012) 1 SCC 40 wherein it was inter alia held that, "25.........It is, no doubt, true that the nature of the charge may be relevant, but at the same time, the punishment to which the party may be liable, if convicted, also bears upon the issue. Therefore, in determining whether to grant bail, both the seriousness of the charge and the severity of the punishment should be taken into consideration. The grant or refusal to grant bail lies within the discretion of the Court. The grant or denial is regulated, to a large extent, by the facts and circumstances of each particular case. But at the same time, right to bail is not to be denied merely because of the sentiments of the community against the accused. The primary purposes of bail in a criminal case are to relieve the accused of imprisonment, to relieve the State of the burden of keeping him, pending the trial, and at the same time, to keep the accused constructively in the custody of the Court, whether before or after conviction, to assure that he will submit to the jurisdiction of the Court and be in attendance t....
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....sheets of various students, letterheads and rubber stamps of several authorities, admit cards, illegal firearm, etc. were found which establishes a prima facie case against the respondent. The allegations against the respondent are very serious in nature, which are reflected from the excerpts of the case diary. We are also conscious of the fact that the offences alleged, if proved, may jeopardise the credibility of the education system of the State of Bihar. Xxx 13. We are also conscious that if undeserving candidates are allowed to top exams by corrupt means, not only will the society be deprived of deserving candidates, but it will be unfair for those students who have honestly worked hard for one whole year and are ultimately disentitled to a good rank by fraudulent practices prevalent in those examinations. It is well settled that socio-economic offences constitute a class apart and need to be visited with a different approach in the matter of bail [Nimmagadda Prasad v. CBI, (2013) 7 SCC 466 : (2013) 3 SCC (Cri) 575; Y.S. Jagan Mohan Reddy v. CBI, (2013) 7 SCC 439 : (2013) 3 SCC (Cri) 552]. Usually socio-economic offence has deep-rooted conspiracies affecting ....
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....bility of the accused committing a crime which is an offence under the Act after grant of bail." 39. The contention that the applicant has been granted bail in other related cases does not establish any right to parity in the instant matter. Parity is not a matter of arithmetical equality but is dependent on the facts, role, and circumstances of each case. As per the material filed by the CBI, the applicant played the central role in the present offence and was the principal decision-maker and beneficiary of the defrauded amounts. The role of co-accused who have been granted bail, including Dheeraj Wadhawan and others, have either been held to be of lesser magnitude or has been considered under different factual matrices such as health conditions or custody length. In contrast, the applicant's position as the architect of the entire fraudulent scheme precludes him from claiming parity with those whose involvement was tangential or derivative. 40. The applicant's submissions that a substantial portion of the claims has been recovered through the IBC resolution process or that certain loans were found to be genuine cannot dilute the seriousness of the allegations. Resolution un....
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....audit trails, cross- verification of fictitious borrower accounts, money trail analysis, and statements of approvers. The contention that the forensic audit report is inadmissible under Section 45 of the Evidence Act is a matter for trial and cannot be decided at the bail stage. The stage of trial is precisely when the evidentiary worth of the documents relied upon by the prosecution will be determined. At this juncture, the Court is only concerned with the existence of a prima facie case, the seriousness of the offence, and the potential impact on the trial. All these factors weigh against the grant of bail in the present case. The loss of funds as shown by the CBI/respondent cannot be discarded and this is a matter of trial. 44. The argument that non-repayment or default in repayment of loans is civil in nature, and hence, the prosecution has criminalised a commercial dispute, is specious and untenable. The case of the prosecution is not one of mere default but of deliberate deception, diversion of public funds, creation of fictitious accounts, forgery, and laundering of money, all of which attract penal consequences. The act of fraudulently obtaining public funds and misusing....