New Delhi, Jan 24 (IANS): The Supreme Court on Wednesday set aside the default bail granted to the former DHFL directors Kapil and Dheeraj Wadhwan in connection with the Dewan Housing Finance Corporation Limited (DHFL) loan fraud case of Rs 34,615 crore.

“The respondents-accused could not have claimed statutory rights of default bail under Section 167(2) of Criminal Procedure Code(Cr.P.C) on the ground that investigation for other accused was pending,” said a bench presided over by Justice Bela M. Trivedi.

The bench said that Wadhwan brothers will be taken into custody if they were released pursuant to the impugned orders granting default bail.

Allowing the appeal filed by CBI, the apex court said that both, the Special Court and the High Court, have committed serious errors of law.

In its May 2023 order, the Delhi High Court had upheld the order passed by the Special Judge of Rouse Avenue granting default bail to the accused under Section 167(2) Cr.P.C

The Special Judge (Prevention of Corruption Act) in December 2022 granted statutory bail to Wadhwan brothers holding that the charge sheet filed although within stipulated time is incomplete and hence Wadhwans were entitled to mandatory bail as per law.

An FIR under sections 120-B read with 409, 420, 477-A of the IPC and Section 13(2) read with sections 13(1)(d) of the Prevention of Corruption Act was lodged against DHFL, its former CMD Kapil Wadhawan, MD Dheeraj Wadhwan, and others, including public servants for inducing the consortium of 17 banks led by Union Bank of India (UBI) to sanction huge loans aggregating to Rs 42,871.42 crore.

Allegedly, the accused siphoned off and misappropriated a significant portion of the said funds by falsifying the books of the DHFL and dishonestly defaulted on repayment of the legitimate dues causing a wrongful loss of Rs 34,615 crore to the consortium lenders.