Supreme Court Reserves Judgment In Wadhawan Brothers' Plea For Bail In DHFL Scam Case; Questions CBI Over National Housing Bank's Role

The Supreme Court recently reserved orders on the bail pleas of Kapil Wadhawan, ex-Chairman and Managing Director of Dewan Housing Finance Limited (DHFL), and his brother Dheeraj Wadhawan, ex-Director of DHFL, in the Rs.34000 crores bank fraud case registered by CBI on complaint of Union Bank of India.To recap, in the aforesaid 'scam', 17 banks were allegedly defrauded out of more than Rs 34,000 crores by DHFL. The Wadhawan brothers were first arrested in April 2020 by the Central Bureau of Investigation (CBI) in connection with a Yes Bank Mumbai case. In 2022, the agency arrested them in the present case by UBI.A bench of Justices JK Maheshwari and Vijay Bishnoi heard the matter. Senior Advocates Mukul Rohatgi and Balbir Singh appeared for the Wadhawan brothers. Additional Solicitor General SV Raju represented CBI.Rohatgi, arguing Kapil Wadhawan's case, said that the petitioner has spent over 5 years in custody and there are about 625 witnesses. Out of 110 accused, only 2 remain incarcerated; the others have been granted bail. It was also his contention that CBI caused delay (of over 1 year) in commencement of the trial, as it failed to comply with an order allowing inspection of relied-upon documents.It was further contended that as per the RBI appointed Administrator, the actual claim of the banks is to the tune of Rs.27000 crores and not Rs.34000 crores. Balbir Singh, on behalf of Dheeraj Wadhawan, pressed medical grounds for bail.ASG Raju opposed both bail pleas, pointing to the gravity of the allegations and amount allegedly involved in the scam. He also raised contentions on the conduct of the brothers. Opposing Dheeraj Wadhawan's plea, the ASG alleged that he was proposed to be be taken by the jail authorities to a hospital, but denied.Notably, during the hearing, Justice Maheshwari questioned the CBI about role of officers of the banks and as to what government-owned National Housing Bank, a regulatory body set up by an Act of Parliament, was doing when such huge loans were transacted. On the judge questioning whether officers of NHB were accused in the case, the ASG replied in the negative. "Why not? We have to look into where the fault lies" said Justice Maheshwari. "If their involvement is found, we will make them [an accused]," responded the ASG.On a contention that irregularities were reported by NHB officials in annual inspection of DHFL, but fraud could not be detected certain documents were not supplied and it is not a forensic audit body, Justice Maheshwari remarked, "then there is no purpose of NHB...everybody's keeping their eyes shut, can it be permitted? This transaction is coming digitally everywhere, you feel it can be done by one man?"."It has been done and it has been done successfully...one would not notice the employees, drivers, etc. Maybe NHB has not done its job, but that does not mean he has not done a fraud" replied the ASG. "We are not saying that. We are saying that investigation must meet a logical end. Everybody must be dealt with in the right way", retorted Justice Maheshwari.In general as well, Justice Maheshwari questioned why bank officers are not looked into and enquired from in bank fraud cases. Answering in context of the present case, the ASG clarified that a Chairman and Managing Director is being prosecuted, but Justice Maheshwari highlighted that it was a case of consortium of 17 banks.Subsequently, the ASG submitted that the present case was not a case of clear-cut fraud apparent on the face of documents. Rather, it was camouflaged and only when CBI took over the investigation, it was found that money was not coming back because fictitious loans were diverted through shell companies.Ultimately, the bench reserved its judgment.To recap, in 2022, an FIR was registered on the basis of a complaint filed by Union Bank of India alleging that Kapil Wadhawan, Dheeraj Wadhawan and other accused persons entered into a criminal conspiracy of cheating the consortium of 17 banks. It was alleged that the accused persons induced the consortium banks to sanction huge loans of over Rs. 42,000 crores. The Union Bank of India claimed that a wrongful loss of Rs. 34,615 crore was caused to the consortium banks.In September 2024, the Delhi High Court granted medical bail to Dheeraj Wadhawan. However, in August, 2025, the same was cancelled by the Supreme Court, which ordered Dheeraj Wadhawan's surrender in 2 weeks.Case Title: KAPIL WADHAWAN Versus CENTRAL BUREAU OF INVESTIGATION, SLP(Crl) No. 16953/2025 (and connected cases)

Supreme Court Reserves Judgment In Wadhawan Brothers' Plea For Bail In DHFL Scam Case; Questions CBI Over National Housing Bank's Role

Debby Jain

Tags