The High Court of Delhi has observed that police cannot be allowed to file its report without completing the probe, just for the sole purpose of defeating the right to statutory bail granted to the accused under the Constitution.

The Single-Judge Bench of Justice Dinesh Kumar Sharma recently noted that the basic concept to fulfil the provision of Section 167 was that the charge sheet has to be filed upon completion of investigation. 

It said though police had a right to conduct further investigation, but merely filing the report in the garb of further probe could not fulfil the basic purpose and intention of the legislature as provided under Section 167 of CrPC.

The Single-Judge Bench further noted that the investigating agency, in its ‘anxiety’ of keeping the accused in custody, may take a plea that the probe was complete, however, the best judge should be the concerned trial court.

It said the Court was the guardian of rights bestowed upon the accused and that strict compliance of the procedure was necessary to protect the fundamental rights of an individual. 

Dismissing the petition filed by the Central Bureau of Investigation (CBI) against default bail to former Dewan Housing Finance Corporation Limited (DHFL) promoters Kapil Wadhawan and his brother Dheeraj Wadhawan in the alleged bank loan scam case, the High Court said that at this stage, it cannot minutely appreciate the evidence, so as to ascertain whether the same was ‘sufficient’ or not.

Talking about Section 167(2) of CrPC, it said the same must be interpreted bearing in mind the three-fold objectives of the legislature, which were ensuring a fair trial, expeditious investigation as well as trial and establishing a rationalised procedure that ‘protected’ the interests of the indigent strata of society.

As per the High Court, these objects essentially served as components of the overarching fundamental right guaranteed under Article 21 of the Constitution of India.

The Lucknow Bench of the Allahabad High Court has rejected the bail application of Kapil Wadhawan and Dheeraj Wadhawan, the then Managing Director and Director of DHFL, who are in jail in the PF scam case in Uttar Pradesh Power Corporation.

A Single Bench of Justice Dinesh Kumar Singh passed this order while hearing a Criminal Misc Bail Application filed by Kapil Wadhawan and Another.

The application under Section 439, read with section 167 of the Code of Criminal Procedure 1973 has been filed by the applicants, Kapil Wadhawan and Dheeraj Wadhawan, seeking default bail in Crime under Sections- 120B, 409, 420, 467, 468, 471 of the Indian Penal Code, 1860 read with Sections 7A, 8, 13(2),13(1)(d) of Prevention to the Corruption Act, 1988 Police Station- CBI/ACB, Lucknow, after their bail application for default bail bearing Bail Application got rejected by the Special Judge, Anti-Corruption, CBI (West), Lucknow, vide order dated 1st October 2022.

The facts of the case, which are relevant for the purposes of deciding the bail application are mentioned as under:

On 2nd November 2019, an FIR came to be registered at Police Station Hazratganj, Lucknow on the complaint of one I.M Kaushal, Secretary, Trust of Uttar Pradesh Power Corporation Limited (UPPCL) against Praveen Kumar Gupta, ex-Secretary (Trust) and Sudhanshu Dwivedi, who served UPPCL in the capacity of Director (Finance) from June 2016 to June 2019.

During the investigation names of several other accused came to the light as the investigating agency found these accused also involved and part of deep-rooted criminal conspiracy in the mega scam of several thousand crores Rupees. Investigation of the said case was transferred to the Central Bureau of Investigation (CBI) and CBI registered the Regular Case and undertook the investigation.

Till October 2016, Provident Fund amounts of the two Trusts were deposited in the Nationalized Banks in term deposits accruing interest.

However, in the month of December 2016 on the proposal of the then Secretary of the Trust, Praveen Kumar Gupta, after obtaining the approvals from the then Director (Finance), Sudhanshu Dwivedi, and the then Managing Director, UPPCL, A.P Mishra who was working as Managing Director, UPPCL, started investing the G.P.F and C.P.F funds in the P.N.B Housing term deposits.

In the same series, the G.P.F and C.P.F funds were invested as term deposits by Sudhanshu Dwivedi and Praveen Kumar Gupta from March 2017 in a private institution named Deewan Housing Finance Ltd (DHFL) with the approval of the Managing Director, UPPCL A.P Mishra without any authority of law in illegal and mala fide manner for personal gains.

A.P Mishra approved investing the amount of two Funds in NBFC, i.e DHFL in active connivance and furtherance of deep-rooted criminal conspiracy with the purpose and motive of earning huge illegal brokerage and misappropriation of thousand crores Rupees of the contributions made by employees in power companies by the accused. The applicants were the Managing Director and Director of DHFL and they were in complete control of the affairs of DHFL at the relevant time.

It is alleged that forged and fabricated minutes of the meeting of the Board of Trustees of the Contributory Provident Fund allegedly held on 24th March 2017 were prepared to justify the illegal investment of a huge sum of money from two funds in DHFL.

It has been alleged that as per records available in the office of trust from March 2017 to December 2018, the then Secretary (Trust) Praveen Kumar Gupta who was in charge of both C.P.F and G.P.F Trust after obtaining approval from the then Director (Finance), Sudhanshu Dwivedi and A.P Mishra who was working as Managing Director of UPPCL and transgressing the clear directives of the Government of India as contained in its notification dated 2nd March 2015 which specifically provide that the money of the employees Provident Fund should not be invested in any of the institutions other than scheduled/ unscheduled commercial banks, with ill intentions invested more than 50% of the amount of two trusts in term deposit of DHFL, in connivance and furtherance of criminal conspiracy of accused including the accused-applicants knowing fully well that it did not fall in the category of unscheduled commercial banks and, it was an unsecured private institution.

It is also alleged that according to the records available, GPF contributions amounting to Rs 2631.20 crores were invested in DHFL out of which only Rs 1185.50 crores have been received by the trust office and an amount of Rs 1445.70 crores plus interest is yet to be received. Similarly, an amount of Rs 1491.5 crores of the Contributory Provident Fund was invested in the DHFL, out of which Rs 669.3 crores have been received by the office of the trust and Rs 822.2 crores plus interest is yet to be received. Thus, the total amount of Rs 2267.90 crores (Principal Amount) and interest could not be received from the DHFL and DHFL itself has gone into liquidation.

Thus, allegations in sum and substance are that the accused in furtherance of criminal conspiracy with mala fide intention for personal gain and in violation of the relevant provisions of the law have invested a huge amount of two funds i.e. Uttar Pradesh Power Sector Employees General Provident Fund and Uttar Pradesh Power Corporation Limited Contributory Provident Fund in DHFL, a company incorporated under the Companies Act. Their mala fide decision has caused a huge loss to these funds to the extent of Rs 2267.9 crores (Principal Amount) besides interest. The investigation has revealed that the investments have been made in the DHFL by the accused for personal gain as they have received a huge amount from DHFL as a commission for making such investments.

The applicants were produced before the Special Judge, Anti-Corruption, CBI (West), Lucknow on 26.5.2022 by the CBI and they were remanded to the custody of the CBI on the same day. After custody of the applicants for 15 days got over, the accused-applicants were remanded to judicial custody on 9.6.2022 in connection with the FIR in question.

According to the applicants, 60 days expired on 24.7.2022 from the date of their custody, i.e, 26.5.2022. It is said that no charge sheet was filed against the applicants within the prescribed time of 60 days and, therefore, the applicants had preferred an application seeking default bail under section 167 of the CrPC on the said ground.

The CBI filed an objection to the said application and said that since the offence under sections 409 and 467 of the IPC had been invoked against the applicants, for which punishment provided is for life and the CBI had already filed charge sheet within the stipulated period of 90 days as per section 167(2) of the CrPC therefore, the application filed on behalf of the accused-applicants for seeking default bail was to be rejected being misconceived.

S.C Mishra and Nandit Srivastava, Senior Advocates assisted by Pranjal Krishna, Smt Janaki Garade, Smt Urvi Purve, and Samarth Agarwal, Advocates, have submitted that under the provisions of section 167 of the CrPC, if the investigating agency has failed to file a charge sheet in respect of the offences for which the accused-applicants have been charged within a period of 60 days from the date of their initial custody, they are entitled to be enlarged on default bail.

Senior Advocate further submitted that there is no dispute in respect of the fact that 60 days expired on 24.7.2022 and the CBI could not file the charge sheet within the outer limit of 60 days and, therefore, the applicants are entitled to be enlarged on default bail.

It is also submitted that it is the mandate of section 167(2)(a) (ii) of the CrPC that if the investigating agency fails to file the charge sheet for offences, where the minimum period of 10 years imprisonment as punishment is not provided, the accused is entitled to be enlarged on bail after the lapse of 60 days irrespective of maximum punishment of life.

On the other hand, Anurag Kumar Singh, counsel appearing for the CBI has submitted that the accused-applicants are charge-sheeted, inter alia, for the offences under section 407, 467, IPC and these offences entail maximum punishment up to ‘for life’.

The Court held that,

The said judgment in M Ravindran (supra) was not on the issue regarding a custody period of 90 days for offences where the maximum punishment is imprisonment ‘for life’ but the minimum punishment is not prescribed in the statute, as the issue is in the case. The language of section 167(2)(a)(i) of the CrPC is clear and while interpreting any statutory provision it is the golden rule of interpretation that the words used by the legislature should be given their natural meaning. The text of section 167 of the CrPC is explicit and needs no great interpretation.

The Court said that,

The legislature in its wisdom has extended a custody period of 90 days without filing the charge sheet in respect of the three kinds of Offences where punishment is prescribed: a. death; b. imprisonment for life; or c. minimum sentence provided is not less than 10 years.

If the punishment provided for an offence is life, then the custody period is extendable to 90 days irrespective of the fact that a minimum sentence of 10 years is not provided as in the case of an offence under section 304-B of the IPC. Any offence for which the sentence provided is more than 10 years, custody period would be extendable to 90 days.

The offences for which the accused-applicants have been charge-sheeted involve intensive and extensive investigation as mind boggling financial fraud regarding siphoning and misappropriation of public funds of thousands of crores is involved in the case.

The role of the accused-applicants was required to be investigated deeply and further, the offence is under sections 467 and 409 of the IPC provide punishment up to ‘for life’ and, therefore, I am of the view that the extended period of 90 days would be available to the investigating agency for such an offence.

“In view thereof, I do not find much substance in the submissions of S.C Mishra, Senior Advocate. The accused-applicants did not get entitled to default bail on an expiry of 60 days from the date of their custody in the case’, the Court observed while rejecting the bail application.

A local court in the national capital refused to grant statutory bail to former promoters of Dewan Housing Finance Corporation Limited, Kapil and Dheeraj Wadhawan, who were arrested by the Central Bureau of Investigation (CBI) in connection with the multi-crore Yes Bank-DHFL loan scam case.

Special Judge Vishal Gogne of Rouse Avenue Court dismissed the statutory bail application of Wadhawan brothers on September 30, while observing that the filing of charge sheet in the present investigation shall be governed by Section 167(2)(a)(i) CrPC, which provided maximum period of 90 days for the same.

Since the 90-day period was yet to expire in the current probe, which was also related to Section 409 IPC, Kapil and Dheeraj Wadhawan were not entitled to statutory bail under Section 167(2) CrPC, noted the court.

The Counsels of the accused contended that CBI had allegedly failed to file a charge sheet against the Wadhawan bothers within 60 days of their arrest, therefore, they were entitled to bail.

The default or statutory bail can be availed by an accused, if the investigation agency fails to complete the probe within a specified period in respect of a person in judicial custody.

The FIR stated that based on a complaint made by the Union Bank of India, the then CMD of DHFL Kapil Wadhawan, the then Director of DHFL Dheeraj Wadhwan, in connivance with other accused persons, entered into a criminal conspiracy to cheat the Consortium of 17 banks led by the Union Bank of India and in pursuance of the said criminal conspiracy, the accused induced the consortium banks to sanction huge loans amounting to Rs 42,871.42 crore.

It alleged that a major portion of this amount was allegedly siphoned off by DHFL and dishonest default in repayment of the legitimate dues of the said consortium banks.

The complainant further alleged that a wrongful loss of Rs 34,615 crore was caused to the consortium banks in as much as such was the quantification of the outstanding dues as on July 31, 2020, alleged the Central Bureau of Investigation.

The accused were arrested on July 19, 2021.

A bench of Justice Bharati Dangre granted bail as the ED failed to file its chargesheet against them within the stipulated 60 days. “There is a period prescribed for filing of the charge sheet. The right to default bail is for the accused if an investigating agency fails to file the charge sheet within the period prescribed under Section 167 of the Criminal Procedure Code,” the court observed.

The Court has directed both to deposit Rs 1 lakh each as surety and surrender their passports to the investigators.

However, they will remain in jail as they have also been arrested by the Central Bureau of Investigation (CBI) in the same case. ED is also separately probing other pending cases against them.

The Counsel for Applicants sought bail claiming that the ED has failed to file its charge sheet within the stipulated period of 60 days.

Additional Solicitor General Anil Singh, on the other hand, prayed before the court to stay the bail order at least for two weeks. He contended what the High Court has ruled was a pure question of law and since different courts have taken different views of the point of default bail, ED would like to test the view held by the High Court before the Supreme Court.

While refusing the aforesaid contention given by Government Counsel, Justice Dangre said that the settled legal position is, once the right of default bail is due, the accused cannot be kept in custody thereafter even for a day.

The brothers were arrested by the ED on May 14 on money laundering charges.

The ED had initiated proceedings against the Wadhawans on the basis of a case registered by CBI on March 7 against Yes Bank promoter Rana Kapoor, and his family members. They have been booked for conspiracy, cheating and also under provisions of the Prevention of Corruption Act, 1988.

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The agency has alleged that in between April and June, 2018, Yes Bank invested Rs 3,700 crore in short term non-convertible debenture of DHFL. Rana Kapoor and its family members had allegedly received Rs 600 crore as bribe from DHFL in terms of loans advanced to two firms named DOIT Urban Ventures (India) Private Limited and Morgan Credits Private Limited. While Kapoor’s three daughters hold 100 percent stakes in DOIT, Morgan Credits is controlled by his wife.

– India Legal Bureau

Kapil Wadhawan and his brother Dheeraj Wadhawa, accused in the Yes Bank and Cooperative Bank loan scams have claimed that they had traveled from Khandala to their ancestral home in Mahabaleshwar as they were genuinely concerned for the health of their family owing to the coronavirus pandemic. They had heard that there were possible coronavirus cases in Khandala, the statement says.

The brothers, along with 21 other family members and an Italian bodyguard were arrested last week for violation of lockdown regulations. In a detailed statement issued through their legal firm, the duo said they traveled because their mother aged 70 years and has a multitude of health problems, was with them, had heightened their concern for the well-being of their family, including spouses and children.

Besides, Kapil suffers from hypertension and was recently hospitalised while Dheeraj is also a heart patient who underwent emergency angioplasty in Switzerland in January 2018, and spent time in a hospital ICU in November 2019 for a severe lung infection, which the ED was aware of, the statement added.

Considering the circumstances, the Wadhawans thought it fit to travel further away from Khandala and Mumbai and thus decided to go to their ancestral residence in Mahabaleshwar.

The Wadhawans also refuted speculation that they are not cooperating with the ED and the CBI and are absconding or flouting lockdown rules. Attempting to set right the record, the Wadhawans said that within 24 hours, the CBI had issued three notices to them in March for appearance at short notice.

On March 15, in the last communication to the CBI, they referred to the advisories of the Centre and state governments asking citizens to avoid unnecessary travel in view of the rapid spread of coronavirus, making it inadvisable for them to return to Mumbai from Khandala.

The Maharashtra government had last week suspended IPS officer Amitabh Gupta who was serving as principal secretary in the state home department after it came to light that Gupta had helped the brothers . At the time of their arrest, the Wadhawans had passes issued by the IPS officer who wrote on his official letter head that “they are well known to me and are family friends” and travelling from “Khandala to Mahableshwar for a family emergency”. He called their trip a “family emergency” in an official letter.

According to the police, the Wadhawans took their cooks and servants and also an Italian bodyguard. The police have filed a case against all of them.

Brothers Kapil and Dheeraj Wadhawan had lookout notices in their name by the Central Bureau of Investigation (CBI) and are accused in the Yes Bank and DHFL fraud cases. The CBI is considering taking them into custody once their quarantine ends.

The declaration of nationwide lockdown till 14^th of April in view of outbreak of pandemic COVID-19 has led to many confined to their homes and also the person(s) engaged in providing essential services.

The local administration across states has developed a system of issuing emergency passes so as to cause less trouble to people. Though, one has to provide a genuine emergency reason before obtaining a pass. These passes are either issued by the state governments or by local police officers differing from state to state. In some states such as Delhi and Haryana the respective governments have created online portals whereby the people can apply for an e-pass along with their valid identity cards for travel during the curfew, but also has options to seek help for food and ration.

It is noteworthy that the passes will be provided only in case of unavoidable and important cases. One has to mention the purpose of his travel, and have an ID proof to justify why their travel is required during this lockdown. Similarly, in Maharashtra the Special Inspector General of Police (Spl. IGP) has issued to all police units in the state authorising the Superintendent of Police (SP) and Deputy Commissioner of Police (DCP) them to issue inter-district travel passes to citizens who are in need. Moreover, persons who wish to travel outside the state will have to Contact DGP’s office in Mumbai as the state government has sealed borders to avoid spreading of COVID-19.

Today, Maharashtra Government was left red faced when one of its IPS officer had issued emergency pass to Wadhwan brothers to travel from Mumbai to Mahabaleshwar. The brothers are accused of Rs. 7000 crore scam and had non bailable warrants issued against them by the CBI and Enforcement Directorate. Such an attempt by the IPS officer is against the very purpose for which the system of emergency passes has been put in place.

Though, on legal & technical grounds one may argue that the non bailable warrants were obtained by the agencies of central government and the state police was not bound to arrest the person as they had no authority or direction given by Court. But, then as Supreme Court in case of Daroga Singh vs. B. K. Pandey, (2004) 5 SCC 26 has held that the judiciary does not have any mechanism to enforce its orders on their own. The police being the executive authority of the state have to come in aid of the court orders to maintain rule of law.

-India Legal Bureau

The Maharashtra government has suspended IPS officer Amitabh Gupta who was serving as principal secretary in the state home department with immediate effect and an inquiry has been initiated against him.

This follows the government receiving information that Gupta had helped builders Kapil Wadhawan and Dheeraj Wadhawan who are being investigated in multiple fraud cases move from Mumbai to their farmhouse in Mahableshwar at a time of total lockdown. The two were detained at their farmhouse in the hill station after they were caught violating the coronavirus lockdown with more than 20 family members.

The Wadhawans who are at the centre of Rs 7000 crore fraud being investigated by authorities, were among a family group of 23 people who drove up. The police acted on a tip off alerted by local people and quarantined all of them there.

The family drove to the town, over 250 km from Mumbai, in five cars on Wednesday night. They had passes issued by IPS officer Gupta who wrote on his official letter head that “they are well known to me and are family friends” and travelling from “Khandala to Mahableshwar for a family emergency”. He called their trip a “family emergency” in an official letter.

According to the police, the Wadhawans took their cooks and servants and also an Italian bodyguard. The police have filed a case against all of them.

Brothers Kapil and Dheeraj Wadhawan had lookout notices in their name by the Central Bureau of Investigation (CBI) and are accused in the Yes Bank and DHFL fraud cases. The CBI is considering taking them into custody once their quarantine ends.