YES Bank fraud case: SC stays Bombay HC order granting bail to DHFL promoters

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September 04, 2020 1:30 AM

While the brothers were remanded to custody on May 14, the Enforcement Directorate (ED) had filed its charge sheet on July 13.

The CBI probe had revealed that YES Bank invested Rs 3,700 crore in DHFL’s short-term debentures that were not redeemed.The CBI probe had revealed that YES Bank invested Rs 3,700 crore in DHFL’s short-term debentures that were not redeemed.

The Supreme Court on Thursday stayed the bail order granted by Bombay High Court to Dewan Housing Finance Corporation (DHFL) promoters Kapil Wadhawan and Dheeraj Wadhawan till October 7 in connection with the YES Bank fraud case.

A Bench led by Justice Sanjay Kishan Kaul while staying the Bombay HC’s August 20 judgment, said that it would examine the legal issues involved in the bail plea. It said that the legal questions relating to the remand period must be examined threadbare.

“There are two issues. The first issue is whether the date on which the accused is remanded should be excluded while computing the 60 days. The second issue is whether weekends (Saturdays and Sundays) should be excluded. These are the issues we would like to examine and interpret,” Justice Kaul said.

While the brothers were remanded to custody on May 14, the Enforcement Directorate (ED) had filed its charge sheet on July 13.

The ED had approached the apex court against the HC’s bail order. Bail was granted on a technical ground after the agency failed to file its prosecution complaint (equivalent to a charge sheet) within the stipulated period of 60 days. However, the trial court directed the brothers to surrender their passports to the investigators and deposit Rs 1 lakh each as surety amount.

But, Wadhawans had not been able to come out of prison as they were booked by the Central Bureau of Investigation (CBI) in the same money laundering case registered against YES Bank co-founder Rana Kapoor.

The ED said that the day on which the accused is remanded should be excluded while calculating the 60 days. However, Wadhawans’ argued that the 60-day period would start from the day on which they were remanded to custody. The HC had accepted the brothers’ stand.

The CBI probe had revealed that YES Bank invested Rs 3,700 crore in DHFL’s short-term debentures that were not redeemed. Simultaneously, Kapil Wadhawan is said to have paid a kickback of Rs 600 crore to Kapoor and his family members in the garb of a builder loan from DHFL to DoIT Urban Ventures, which is owned by Kapoor’s three daughters.

Kapoor, then the head of Yes Bank’s management credit committee, had in 2018 also sanctioned a Rs 750 crore loan to a DHFL group company. This loan amount was given to Dheeraj Wadhwan-controlled RKW Developers, although the bank’s risk management team had pointed out multiple and serious issues in the proposal.

The ED charge sheet named 19 people and entities, including Rana Kapoor, his wife Bindu and three daughters – Rakhee, Roshni and Radha – and also Morgan Credit, YES India Capital, Wadhawans and their related companies. ED has also provisionally attached assets worth `2,203 crore of both Kapoor and the DHFL promoters in India and abroad.

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