MUMBAI: Additional chief metropolitan magistrate at Esplanade court Sayali Dande rejected bail pleas by brothers Kapil and Dheeraj Wadhawan, promoters of Dewan Housing Finance Ltd (DHFL), in the multi-crore Yes Bank fraud case filed by CBI. Dande said it was an economic offence which should be viewed seriously.
Last year, Justice Sarang Kotwal of Bombay high court had rejected their plea for “default bail” and had held that CBI had filed its chargesheet properly and within the deadline. In response to their claim that it was “illegal” to file the chargesheet before the court registry, the HC said it wasn’t.
Dheeraj (42) and Kapil (46) were arrested on April 26 for alleged involvement in the Rs 3,700-crore Yes Bank fraud. CBI claimed the bank had invested the amount in a short-term debenture of DHFL between April and June 2018, and in lieu Yes Bank founder Rana Kapoor allegedly gave kickbacks to Wadhawans.
Wadhawans sought bail on merits before Esplanade court. Their counsel, Pranav Badhe, argued that “the chargesheet doesn’t contain even a whisper of any allegation of kickback or quid pro quo’’, though during arguments CBI had made “vague allegations of kickbacks,’’ he said.
Besides, offences under Prevention of Corruption Act do not arise as CBI failed to apply for and has not obtained sanction, which is a prerequisite. Hence, he said, allegations that the court could only consider are under section 409 (criminal breach of trust) and 420 (cheating) read with criminal conspiracy under section 120B of Indian Penal Code.
The chargesheet against Wadhawans and Kapoor family states that Yes Bank purchased non-convertible debentures (NCDs) of DHFL for Rs 3,700 crore between April 2018 and June 2018. It said DHFL initially gave DoIT UrbanVentures (India) Pvt Ltd a loan of Rs 300 cr and then an additional loan of Rs 300 cr, and both were repaid by sanctioning and disbursing a new loan of Rs 600 crore.
The chargesheet said a Rs 750 crore loan was sanctioned by the bank to Belief Realtors and some money was transferred through different companies, and used to settle the loan of DHFL.
Wadhawans’ bail plea said there was no allegation against them of misrepresentation or intention over issuance of NCD, hence no case of cheating was made out. There is no case made out for ‘misappropriation of any property’’ and could not have committed any breach of trust of their own property.
It argued that Supreme Court, in a ruling last year, had said that rejection of bail in economic offences was not a rule, so “mere fact that the case involves economic offence is not a valid ground for rejection of bail’’.
The defence counsel stressed that “pre-trial incarceration’’ by denying bail cannot be for punitive reasons and the ‘tripod test’’ as envisaged by the SC should be seen. The three tests are whether the accused is a flight risk, will he tamper with evidence and influence the witnesses. The lawyer said the Wadhawans satisfied the test and may be released on bail.
But the CBI prosecutor opposed their bail pleas and stressed on allegations that there were “kickbacks’’ involved, the case was serious and that the HC had rejected their default bail plea too.