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The Supreme Court has issued a notice to the CBI seeking its response to the bail application filed by Kapil Wadhawan, former promoter of Dewan Housing Finance Corporation Ltd (DHFL), accused in an alleged INR 34,926 crore bank fraud case. The Delhi High Court had earlier denied bail, citing his conduct during custody and the seriousness of charges. The agency claims Wadhawan orchestrated one of India's biggest financial frauds involving diversion of funds from 17 banks using shell companies and fake housing loan accounts.
The Supreme Court has sought a response from the Central Bureau of Investigation (CBI) on the bail plea filed by Kapil Wadhawan, former promoter of Dewan Housing Finance Corporation Ltd (DHFL), in the alleged INR 34,926 crore bank fraud case. The bench comprising Justices J.K. Maheshwari and Vijay Bishnoi has issued a notice to the agency and asked it to submit its reply. Advertisement
Earlier, the Delhi High Court had rejected Wadhawan's bail request, stating that his behaviour during custody was not satisfactory. The court noted that such large-scale financial offences affect not only specific lenders but also weaken the broader financial system. It also referred to the CBI's submission that Wadhawan continued to face several criminal proceedings across multiple jurisdictions, involving grave economic offences, undermining his claim that he posed no flight risk or threat to the investigation.
The CBI has accused Wadhawan, who was the Chairman and Managing Director of DHFL, of being the main conspirator behind a massive diversion of funds from a consortium of 17 banks. The agency has alleged that he created and operated 87 shell companies registered in the names of associates, relatives, and employees, to siphon off funds that were falsely recorded as retail housing loans. These loans were linked to a fictitious "Bandra Branch-001" in DHFL's internal records, showing over 2.6 lakh fake borrowers.
The High Court had further cited the CBI's claims that during judicial custody, Wadhawan was allegedly involved in manipulating assets and transactions, indicating he still held influence over financial matters. The order highlighted that releasing an individual "who appears to be the principal figure in a complex financial conspiracy" at an early stage of the trial could compromise the case. The court also expressed concern that many witnesses were either former employees or associates of DHFL, creating a risk of interference if bail was granted.
Wadhawan was first taken into custody in July 2022 and later granted default statutory bail in December 2022. However, the Supreme Court cancelled that bail in January 2024, observing procedural lapses. The Delhi High Court, while rejecting his latest bail application in August 2025, clarified that his effective custody period was closer to two years, not four as claimed by him. The court emphasised that the magnitude of the alleged fraud and the potential impact on public funds justified the denial of relief.
The case stems from a complaint filed by a consortium of 17 banks led by Union Bank of India, accusing DHFL and its promoters of misappropriation and falsification of accounts. Investigations by the CBI and Enforcement Directorate have since revealed large-scale fund diversion, raising concerns about regulatory oversight within India's housing finance sector.
Source PTI
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