[DHFL Scam] Delhi High Court dismisses CBI’s plea seeking cancellation of bail of Wadhawan Brothers

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Court said that detention during investigation or trial cannot be turned into punitive detention.

The Delhi High Court on Tuesday dismissed the Central Bureau of Investigation’s plea seeking cancellation of bail to former Dewan Housing Finance Corporation Limited (DHFL) promoters Kapil Wadhawan and his brother Dheeraj Wadhawan in connection with a multi-crore bank loan scam case.

Upholding the bail, the bench of Justice Dinesh Kumar Sharma held that the decision to grant them bail was "based on good reasoning and logic".

Justice Sharma stated that there was 'no illegality or perversity' in the order of the Sessions Judge and the charge sheet filed by the CBI in the present case was an incomplete/piecemeal charge sheet.

"...terming the same as a 'final report' under section 173 (2) CrPC merely to ruse the statutory and fundamental right of default bail to the accused shall negate the provision under Section 167 CrPC and will also be against the mandate of Article 21 of the Constitution of India”, added the court. 

The single-judge bench said that the investigating agency in its anxiety of keeping the accused persons in custody may take a plea that the investigation is complete, however, the best judge in this regard should be the trial Court. 

“This Court considers that the learned Trial has rightly made an observation that now the time has come when the legislature will have to make certain provisions where the period of investigation for such serious offences have to be extended subject to certain limitations and restrictions”, it said.

“It has repeatedly been held that merely because cognizance has been taken, the right to statutory bail cannot be extended or defeated. The basic parameter is whether the charge sheet has been filed after the completion of the investigation or not. We have not to go by the label of the charge sheet but to examine whether actually investigation has been completed or not. If the investigation is not completed then merely because the report has been filed, the right of statutory bail cannot be defeated. Certainly, it depends upon the facts of each case and no fixed formula can be laid down in this regard,” the court added.

Furthermore, the court stated that in the report filed by the investigating agency, there should be sufficient evidence to bring home the guilt of the accused. The purpose should not be merely to detain the accused. The purpose is that if an offence has been committed it must reach its logical end.The detention during investigation or trial cannot be turned into punitive detention. It is also a settled proposition that further investigation can be conducted only after the investigation is complete”, it added.

The Wadhawan brothers were granted bail on December 3, 2022, by a Special Judge of Rouse Avenue District Courts. The Special Judge in the impugned order had observed that the "Application of the accused persons Kapil Wadhawan and Dheeraj Wadhawan under Section 167 (2) Cr.P.C. is disposed of. They are found entitled to statutory bail without discussing merits of the case because of incomplete chargesheet."

“As highlighted by the learned Special Judge in its order dated 03.12.2022, it is made clear, that this Court too, has not gone into the merits of the case and no expression made herein shall tantamount to be an expression of the merits of the case. Accordingly, the order dated 03.12.2022 passed by Ld. Special Judge, P.C. Act, Rouse Avenue District Courts, New Delhi is upheld. The present petition is dismissed”, the court ordered.

Case Title: Central Bureau of Investigation v. Kapil Wadhawan & Anr.