The Bombay High Court on Thursday granted bail to Kapil and Dheeraj Wadhawan, promoters of Diwan Housing Finance Limited, in a case registered against them by the Enforcement Directorate (ED) on charges of money laundering in the multi-crore Yes Bank fraud case.
The brothers, however, will remain in Taloja jail as they have also been arrested by the Central Bureau of Investigation in the same case.
Justice Bharati Dangre granted them bail as the ED failed to file its charge sheet in the case within the stipulated 60-day period and directed the duo to furnish a surety of ₹1 lakh each. While additional solicitor general Anil Singh appeared for the ED, the Wadhawans sought mandatory default bail, through senior advocate Amit Desai, under Section 167 (2) (a) (ii) of the Code of Criminal Procedure (CrPC).
The section states: “Sixty days, where the investigation relates to any other offence, and, on the expiry of the said period of 90 days, or 60 days, as the case may be, the accused person shall be released on bail if he is prepared to and does furnish bail, and every person released on bail under this sub-section shall be deemed to be so released.”
Mr. Desai said his clients were arrested and remanded in custody on May 14, and the 60-day period to file a prosecution complaint or charge sheet in the case ended on July 12. The next day, the applicants moved an application seeking bail under Section 167(2)(a)(ii) of the CrPC. The ED then filed a prosecution complaint in the case the same evening.
On July 14, a special court under the Prevention of Money Laundering Act (PMLA) rejected their bail plea. The judge held that the Wadhawans had been charged under Sections 3 (offence of money laundering) and 4 (punishment for money laundering) of the PMLA Act, which prescribe punishment up to seven years in jail. The judge said the time limit for filing a complaint in such cases is 60 days and, with respect to the accused, it will have to be computed from May 15, excluding the day of remand. The special court then rejected their bail applications.
However, the High Court held that the special judge’s order excluding the first day of remand while computing the 60-day period cannot be sustained and has to be set aside. The court said the Wadhawans are entitled to default bail as the ED had filed the charge sheet on July 13, a day after the 60-day period had ended.
The High Court said, “There is no starting point or end point for the authorities to complete their action, but if the investigation is not completed and the charge sheet is not filed within the prescribed time, a right accrues to the accused to be released on bail.”