The Lucknow Bench of the Allahabad High Court has rejected the bail application of Kapil Wadhawan and Dheeraj Wadhawan, the then Managing Director and Director of DHFL, who are in jail in the PF scam case in Uttar Pradesh Power Corporation.
A Single Bench of Justice Dinesh Kumar Singh passed this order while hearing a Criminal Misc Bail Application filed by Kapil Wadhawan and Another.
The application under Section 439, read with section 167 of the Code of Criminal Procedure 1973 has been filed by the applicants, Kapil Wadhawan and Dheeraj Wadhawan, seeking default bail in Crime under Sections- 120B, 409, 420, 467, 468, 471 of the Indian Penal Code, 1860 read with Sections 7A, 8, 13(2),13(1)(d) of Prevention to the Corruption Act, 1988 Police Station- CBI/ACB, Lucknow, after their bail application for default bail bearing Bail Application got rejected by the Special Judge, Anti-Corruption, CBI (West), Lucknow, vide order dated 1st October 2022.
The facts of the case, which are relevant for the purposes of deciding the bail application are mentioned as under:
On 2nd November 2019, an FIR came to be registered at Police Station Hazratganj, Lucknow on the complaint of one I.M Kaushal, Secretary, Trust of Uttar Pradesh Power Corporation Limited (UPPCL) against Praveen Kumar Gupta, ex-Secretary (Trust) and Sudhanshu Dwivedi, who served UPPCL in the capacity of Director (Finance) from June 2016 to June 2019.
During the investigation names of several other accused came to the light as the investigating agency found these accused also involved and part of deep-rooted criminal conspiracy in the mega scam of several thousand crores Rupees. Investigation of the said case was transferred to the Central Bureau of Investigation (CBI) and CBI registered the Regular Case and undertook the investigation.
Till October 2016, Provident Fund amounts of the two Trusts were deposited in the Nationalized Banks in term deposits accruing interest.
However, in the month of December 2016 on the proposal of the then Secretary of the Trust, Praveen Kumar Gupta, after obtaining the approvals from the then Director (Finance), Sudhanshu Dwivedi, and the then Managing Director, UPPCL, A.P Mishra who was working as Managing Director, UPPCL, started investing the G.P.F and C.P.F funds in the P.N.B Housing term deposits.
In the same series, the G.P.F and C.P.F funds were invested as term deposits by Sudhanshu Dwivedi and Praveen Kumar Gupta from March 2017 in a private institution named Deewan Housing Finance Ltd (DHFL) with the approval of the Managing Director, UPPCL A.P Mishra without any authority of law in illegal and mala fide manner for personal gains.
A.P Mishra approved investing the amount of two Funds in NBFC, i.e DHFL in active connivance and furtherance of deep-rooted criminal conspiracy with the purpose and motive of earning huge illegal brokerage and misappropriation of thousand crores Rupees of the contributions made by employees in power companies by the accused. The applicants were the Managing Director and Director of DHFL and they were in complete control of the affairs of DHFL at the relevant time.
It is alleged that forged and fabricated minutes of the meeting of the Board of Trustees of the Contributory Provident Fund allegedly held on 24th March 2017 were prepared to justify the illegal investment of a huge sum of money from two funds in DHFL.
It has been alleged that as per records available in the office of trust from March 2017 to December 2018, the then Secretary (Trust) Praveen Kumar Gupta who was in charge of both C.P.F and G.P.F Trust after obtaining approval from the then Director (Finance), Sudhanshu Dwivedi and A.P Mishra who was working as Managing Director of UPPCL and transgressing the clear directives of the Government of India as contained in its notification dated 2nd March 2015 which specifically provide that the money of the employees Provident Fund should not be invested in any of the institutions other than scheduled/ unscheduled commercial banks, with ill intentions invested more than 50% of the amount of two trusts in term deposit of DHFL, in connivance and furtherance of criminal conspiracy of accused including the accused-applicants knowing fully well that it did not fall in the category of unscheduled commercial banks and, it was an unsecured private institution.
It is also alleged that according to the records available, GPF contributions amounting to Rs 2631.20 crores were invested in DHFL out of which only Rs 1185.50 crores have been received by the trust office and an amount of Rs 1445.70 crores plus interest is yet to be received. Similarly, an amount of Rs 1491.5 crores of the Contributory Provident Fund was invested in the DHFL, out of which Rs 669.3 crores have been received by the office of the trust and Rs 822.2 crores plus interest is yet to be received. Thus, the total amount of Rs 2267.90 crores (Principal Amount) and interest could not be received from the DHFL and DHFL itself has gone into liquidation.
Thus, allegations in sum and substance are that the accused in furtherance of criminal conspiracy with mala fide intention for personal gain and in violation of the relevant provisions of the law have invested a huge amount of two funds i.e. Uttar Pradesh Power Sector Employees General Provident Fund and Uttar Pradesh Power Corporation Limited Contributory Provident Fund in DHFL, a company incorporated under the Companies Act. Their mala fide decision has caused a huge loss to these funds to the extent of Rs 2267.9 crores (Principal Amount) besides interest. The investigation has revealed that the investments have been made in the DHFL by the accused for personal gain as they have received a huge amount from DHFL as a commission for making such investments.
The applicants were produced before the Special Judge, Anti-Corruption, CBI (West), Lucknow on 26.5.2022 by the CBI and they were remanded to the custody of the CBI on the same day. After custody of the applicants for 15 days got over, the accused-applicants were remanded to judicial custody on 9.6.2022 in connection with the FIR in question.
According to the applicants, 60 days expired on 24.7.2022 from the date of their custody, i.e, 26.5.2022. It is said that no charge sheet was filed against the applicants within the prescribed time of 60 days and, therefore, the applicants had preferred an application seeking default bail under section 167 of the CrPC on the said ground.
The CBI filed an objection to the said application and said that since the offence under sections 409 and 467 of the IPC had been invoked against the applicants, for which punishment provided is for life and the CBI had already filed charge sheet within the stipulated period of 90 days as per section 167(2) of the CrPC therefore, the application filed on behalf of the accused-applicants for seeking default bail was to be rejected being misconceived.
S.C Mishra and Nandit Srivastava, Senior Advocates assisted by Pranjal Krishna, Smt Janaki Garade, Smt Urvi Purve, and Samarth Agarwal, Advocates, have submitted that under the provisions of section 167 of the CrPC, if the investigating agency has failed to file a charge sheet in respect of the offences for which the accused-applicants have been charged within a period of 60 days from the date of their initial custody, they are entitled to be enlarged on default bail.
Senior Advocate further submitted that there is no dispute in respect of the fact that 60 days expired on 24.7.2022 and the CBI could not file the charge sheet within the outer limit of 60 days and, therefore, the applicants are entitled to be enlarged on default bail.
It is also submitted that it is the mandate of section 167(2)(a) (ii) of the CrPC that if the investigating agency fails to file the charge sheet for offences, where the minimum period of 10 years imprisonment as punishment is not provided, the accused is entitled to be enlarged on bail after the lapse of 60 days irrespective of maximum punishment of life.
On the other hand, Anurag Kumar Singh, counsel appearing for the CBI has submitted that the accused-applicants are charge-sheeted, inter alia, for the offences under section 407, 467, IPC and these offences entail maximum punishment up to ‘for life’.
The Court held that,
The said judgment in M Ravindran (supra) was not on the issue regarding a custody period of 90 days for offences where the maximum punishment is imprisonment ‘for life’ but the minimum punishment is not prescribed in the statute, as the issue is in the case. The language of section 167(2)(a)(i) of the CrPC is clear and while interpreting any statutory provision it is the golden rule of interpretation that the words used by the legislature should be given their natural meaning. The text of section 167 of the CrPC is explicit and needs no great interpretation.
The Court said that,
The legislature in its wisdom has extended a custody period of 90 days without filing the charge sheet in respect of the three kinds of Offences where punishment is prescribed: a. death; b. imprisonment for life; or c. minimum sentence provided is not less than 10 years.
If the punishment provided for an offence is life, then the custody period is extendable to 90 days irrespective of the fact that a minimum sentence of 10 years is not provided as in the case of an offence under section 304-B of the IPC. Any offence for which the sentence provided is more than 10 years, custody period would be extendable to 90 days.
The offences for which the accused-applicants have been charge-sheeted involve intensive and extensive investigation as mind boggling financial fraud regarding siphoning and misappropriation of public funds of thousands of crores is involved in the case.
The role of the accused-applicants was required to be investigated deeply and further, the offence is under sections 467 and 409 of the IPC provide punishment up to ‘for life’ and, therefore, I am of the view that the extended period of 90 days would be available to the investigating agency for such an offence.
“In view thereof, I do not find much substance in the submissions of S.C Mishra, Senior Advocate. The accused-applicants did not get entitled to default bail on an expiry of 60 days from the date of their custody in the case’, the Court observed while rejecting the bail application.