In a recent development, the Delhi High Court has granted bail to Dheeraj Wadhawan, the former director of Dewan Housing Finance Limited (DHFL), who was involved in a large bank loan fraud case. This decision comes as a relief for Wadhawan, as the court allowed the bail based on his health condition.
Dewan Housing Finance Corporation (DHFL), a well-known housing finance company in India, is caught up in a huge financial scandal involving over Rs 34,000 crore (about $4.3 billion). The company is accused of loan fraud, money laundering, and creating fake borrowers and shell companies to cover up the scam.
The scam resulted in a loss of over Rs 34,000 crore (approximately $4.3 billion) to the consortium of banks that had loaned money to DHFL. DHFL is accused of being involved in multiple financial scams, with the key accusations being:
- Manipulation of Loans: DHFL allegedly gave over Rs 29,000 crore in loans to 66 entities linked to its promoters, the Wadhawan brothers, without proper checks or security. These loans were given to companies controlled by the Wadhawans, raising concerns of self-dealing.
- Shell Companies: The investigation found 87 fake companies created by the Wadhawan brothers, which had no real business activities. These companies were used to siphon off more than Rs 11,000 crore from the fraudulent loans, which the promoters allegedly used for personal purchases, including expensive artwork.
- Fake Branch: A fake “Bandra Branch” was found in DHFL’s software system, used to funnel money to these shell companies, showing the elaborate nature of the scam.
- Fake Borrowers and Government Scheme Misuse: DHFL is accused of creating fake borrowers using real customer information to secure over Rs 14,000 crore in loans. They also allegedly misused the Pradhan Mantri Awas Yojana (PMAY) scheme, illegally claiming Rs 1,880 crore in interest subsidies from the government meant for affordable housing.
- Money Laundering: The money from these fraudulent activities is suspected to have been laundered for investments in real estate and other assets.
Court’s Decision on Health Grounds
The High Court made its decision citing Wadhawan’s serious health issues, specifically his recovery after spinal surgery. The court stated that his bail request fell under the category of a “sick person,” setting aside the earlier decision made by the trial court. However, the court did impose certain conditions for his release on bail.
Previous Bail Rejection
Back in May, Wadhawan’s request for bail was denied by the Rouse Avenue Court. The court had rejected his application on technical grounds, stating that it was not maintainable at the time. Following this rejection, Wadhawan decided to take his case to the Delhi High Court, seeking bail on medical grounds.
Wadhawan’s Plea and Legal Proceedings
Wadhawan, who is currently recovering at his home in Mumbai after spinal surgery, filed a plea in the Delhi High Court. Justice Jyoti Singh, who was handling the case, issued a notice to the Central Bureau of Investigation (CBI) to respond to Wadhawan’s request. The CBI was given instructions to provide a reply, with Advocate Anupam Sharma representing the investigation agency.
On the other side, Wadhawan was represented by well-known senior advocates N Hariharan and Amit Desai, who argued in favor of his bail due to his medical condition.
Earlier Court Rulings and Arrest Order
Previously, in an earlier ruling at the Rouse Avenue Court, Special Judge A K Sarpal had dismissed Wadhawan’s bail application, calling it premature. The court had also directed the CBI to arrest Wadhawan after May 11 and present him before the CBI court. This was in line with an order from the Supreme Court, issued on January 24, regarding his involvement in the DHFL fraud case.
With this recent ruling, Wadhawan has now been granted temporary relief in light of his health condition, although the investigation and legal proceedings in the case will continue.
