PMLA court refuses to extend Rakesh Wadhawan’s medical bail

A special PMLA court in Mumbai rejected the application by HDIL promoter Rakesh Wadhawan for an extension of his medical bail by three months. The Enforcement Directorate strongly opposed the application, citing Wadhawan's role and conduct.

MUMBAI: A special Prevention of Money Laundering Act (PMLA) court on Tuesday rejected the application moved by Housing Development and Infrastructure Limited (HDIL) promoter Rakesh Wadhawan for an extension of his medical bail by three months.

Mumbai, India - October 18, 2019: Rakesh Wadhawan at ED office , Rakesh Kumar Wadhawan and his son Sarang Wadhawan accused in PMC bank fraud case sent to ED custody till October 22 in Mumbai, India, on Friday, October 18, 2019. (Photo by Satyabrata Tripathy/Hindustan Times) (Pratik Chorge/HT Photo)

Special judge MG Deshpande rejected Wadhawan’s plea in view of serious opposition from the Enforcement Directorate (ED).

The applicant, through his advocate, contended that the Supreme Court had granted him interim medical bail for three months in November, set to expire on February 2, 2024. He added that on February 8, 2024, the High Court (HC) extended his interim medical bail by three weeks in the predicate offence for undergoing necessary tests.

The advocate specifically submitted that since the High Court had continued the interim bail granted by the Supreme Court, the PMLA court should also continue the previously granted interim bail of three months.

The Enforcement Directorate (ED) strongly opposed the application pointing out the applicant’s role and conduct. The special public prosecutor, Sunil Gonsalves, appearing for the Ed, emphasised how the applicant had misled the court, stating that the ED was not a party to the predicate offence and the applicant’s involvement along with his status of being an undertrial prisoner was concealed before the Apex court.

Calling the original application of November 2023 a blanket and hollow prayer, the ED vehemently refused any mention of section 45 of the PMLA or section 39 of CrPC and contended that at the given time, the agency was neither before the court nor was informed by the applicant about any such application.

It was further contention of the agency that the High Court order dated February 8, 2024, confined the interim relief only to the EOW offence and not in respect of the PMLA case and that this was the first time that the accused filed an application under section 439 CrPC read with section 45 of the PMLA, seeking to prolong the interim bail granted by the PMLA court for a period of three months.

“This is misleading and solely for usurping and exploiting the benefits granted by the High Court by extending the order of the Supreme Court,” Gonsalves submitted, adding that the conduct of the accused in pressing the order in extraordinary haste was motivated, intending to prevent ED from having sufficient time to appear oppose the application, misleading the court and hence should be looked into seriously.

At the end of three months, the PMLA court, in its interim order dated February 9, 2024, noted that a similar application for extension was moved before the High Court in view of the directions given by the Supreme Court. “No such directions had even been granted by the Supreme Court. Yes, a bold submission is made as such before this court. On that day, the Enforcement Directorate had no knowledge regarding this representation made before this court by the accused, hence could not point out how this court was misled,” objected Gonsalves, appearing when the court had dictated the initial order and was about to conclude the same.

The Economic Offences Wing of the Mumbai police had on September 30, 2019, registered an offence in connection with the alleged fraud at the multi-state cooperative bank having 137 branches in six states.

According to the RBI, PMC Bank had masked 44 problematic loan accounts involving advances to the tune of ₹7,457.49 crore – mostly extended to HDIL, by tampering with its core banking system, and the accounts were accessible only to limited staff members. The bank had created 21,049 fictitious accounts to ensure its master data tallied with the loan disbursals of ₹7,457.49 crore, RBI had stated in an affidavit filed in response to some other petitions before the HC. Subsequently, the ED filed an ECIR based on the predicate offence.