The Bombay High Court on Thursday granted bail by default to DHFL promoters Dheeraj and Kapil Wadhawan, accused in the Yes Bank money laundering case, as it ruled that the Enforcement Directorate (ED) had not filed a prosecution complaint or chargesheet within the stipulated 60 days of their arrest. However, the Wadhawans will remain in jail as there is another case against them, by the Central Bureau of Investigation (CBI).
Sources in the ED said the agency will move the Supreme Court on Friday to challenge the HC order.
An ED official said that the court wrongly counted the date of remand as May 14 of Wadhawan brothers, in the 60-day period given to the agency for filing a chargesheet.
“The Supreme Court in 2015 in the case of Raviprakash Singh versus the State of Bihar has clearly said that while computing the period of 60 days or 90 days for filing of chargesheet, the day on which the accused is remanded to judicial custody should be excluded and the day on which the challan is filed in the court shall be included. Going by the SC order, the last day for filing the chargesheet by ED was July 13. The agency filed the charge sheet in the Wadhawan case on July 13,” said the official.
While CBI is investigating Wadhawans in the same case, ED is separately probing other pending cases against them.
A Special Prevention of Money Laundering Act court in Mumbai had last month denied bail by default sought by Wadhawans. Thereafter, Wadhawan moved the HC. A single judge bench of Bharati H Dangre passed an order on their pleas on Thursday.
The ED had initiated proceedings in the case after the CBI registered an FIR on March 7 in connection with Yes Bank Money laundering case under the Prevention of Corruption Act.
The Wadhawan brothers were arrested by ED on May 14 and chargesheet was filed by the probing agency on July 13 against the Wadhawans, along with Yes Bank founder Rana Kapoor, his wife Bindu Kapoor as well as daughters Roshni and Rekha, among others.
Appearing for Wadhawans, senior advocate Amit Desai and advocate Subodh Desai had submitted that the ED filed the chargesheet on the 61st day, counting from the day of arrest and remand on May 14, making Wadhawans eligible for default bail under Section 167 (2) of the Criminal Procedure Code.
The ED, through Additional Solicitor General (ASG) Anil Singh and advocate Hiten Venegaonkar, however, opposed the plea for default bail.
After hearing submissions, the court granted default bail to Wadhawans and directed the duo to deposit Rs 1 lakh bond each along with sureties and surrender their passports with the investigating agency.
Urging the court to stay the bail for two weeks, ASG Anil Singh said that what HC had ruled was a pure question of law and as various courts have taken different views pertaining to default bail, ED would like to challenge the view taken by the HC before the Supreme Court.
The court, however, refused the request and said that as per law, accused persons cannot be kept in custody once they have the indefeasible right to default bail. Justice Dangre noted that there was a period prescribed for filing of the chargesheet.
The Wadhawan brothers are accused of diverting nearly Rs 4,122 crore from the General Provident Fund and Central Provident Fund deposits of UP Power Corporation Limited to their company. They have been also accused of fraudulently diverting nearly Rs 12, 700 crore from DHFL’s accounts to companies beneficially owned by them and further diverting those funds to other companies.
It has also been alleged that Rana Kapoor, former CEO of Yes Bank, had entered into a criminal conspiracy with the Wadhawans to extend financial help to DHFL through the Yes Bank in return for “substantial undue benefits” to himself and his family members.
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