Bank Fraud Case: CBI Court Grants Bail To Kapil Wadhawan, Cites Delay In Trial

Bank Fraud

A special CBI court on Friday has granted bail to Kapil Wadhawan, the former director of the now-defunct mortgage firm DHFL, in a loan fraud case connected to Yes Bank.

The court’s decision, delivered by Special Judge A.C. Dagga in Mumbai, cited the prolonged delay in the trial and emphasized the need to balance individual liberty with societal interests.

Judge Dagga acknowledged that economic crimes can significantly affect society. However, he asserted that the accused should not be held in custody for an extended period without any clear indication that the trial is forthcoming.

He stated, “Prolonged incarceration before being pronounced guilty should not be permitted, as it contradicts the right to life and personal liberty enshrined in the Constitution.”

Wadhawan was arrested on April 26, 2020, and has since remained in judicial custody. While he has secured bail in this case, he is not expected to be released immediately due to pending charges in another case against him.

The case pertains to the Yes Bank-DHFL scam, which involved an alleged fraud amounting to approximately ₹4,000 crore. The co-founder of Yes Bank, Rana Kapoor, is accused of conspiring with the former promoters of DHFL, including Wadhawan. The CBI claims that Yes Bank invested ₹3,983 crore in DHFL through debentures, and subsequently extended loans to DHFL in exchange for kickbacks totaling ₹600 crore, meant for Kapoor and his family’s companies.

In addition to this case, Wadhawan faces multiple charges filed by both the CBI and the Enforcement Directorate (ED). His lawyer, Advocate Vijay Aggarwal, argued that Wadhawan deserved bail due to the lengthy period he has already spent in custody and the lack of progress in the trial.

Aggarwal noted that Wadhawan has been in detention for over four years, during which a chargesheet was filed, followed by three supplementary chargesheets. He highlighted that investigations are ongoing, indicating no imminent start to the trial.

Aggarwal also pointed out that other co-accused individuals, such as real estate businessmen Sanjay Chhabria and Avinash Bhosale, as well as Dheeraj Wadhawan, had already been granted bail. He contended that, for reasons of parity, Wadhawan should similarly be released.

The CBI opposed the bail application, arguing that the magnitude of the economic offense and the significant loss to the public necessitate serious consideration. The agency emphasized that such crimes have broader implications for the country’s economy.

After reviewing all arguments, the court underscored the serious impact of economic offenses but reiterated that the accused should not be held indefinitely without a trial. The judge stressed the importance of a timely trial, stating, “In this matter, the accused is in custody for around four-and-a-half years without the trial having started.”

He also noted that co-accused with more significant roles in the crime, such as Rana Kapoor, had already been released on bail.

In conclusion, the court recognized the necessity of balancing the rights of the individual with societal interests, ensuring that justice is served without unnecessary delays.