PMC Bank fraud: Court rejects bail pleas of Rakesh, Sarang Wadhawan

A city civil and sessions court refused to grant bail to HDIL promoters Rakesh Wadhawan and his son Sarang who have been accused in the multi-crore Punjab and Maharashtra

A city civil and sessions court refused to grant bail to HDIL promoters Rakesh Wadhawan and his son Sarang who have been accused in the multi-crore Punjab and Maharashtra Cooperative (PMC) Bank fraud case. The court said the two accused are trying to shift the burden on bank officials and may threaten witnesses.

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The duo had approached the sessions court for bail on the grounds that the charges of cheating the bank is not applicable for the accused. As per the prosecution case, PMC Bank granted loans to realty group HDIL without following due process. The principal loan amount of ₹2,400 crore snowballed into ₹6,670 crore as HDIL failed to repay multiple loans between 2008 and 2019. However, senior management of PMC Bank covered up the irregularities to avoid scrutiny by the Reserve Bank of India.

The Economic Offences Wing (EOW), in it charge sheet, claimed that Rakesh Wadhawan is the key accused in the fraud as the ‘patriarch’ of HDIL’s business. Wadhawan plotted the fraud and obtained loans from the bank with the help of other accused, the agency alleged.

In their bail plea, Wadhawans claimed that the loan was taken in the form of overdraft and that they had submitted 32 title deeds of properties in return, which show they had intention to repay the loan. Lawyers for Wadhawans also claimed that the loan amount calculated by the prosecution is not correct and claimed that the allegations of cheating should be against bank officials.

Special public prosecutor Ajay Misar objected to the plea and submitted that Wadhawans, along with the bank’s chairman Waryam Singh and other Board of Directors are the masterminds and key beneficiaries in the ₹6,670-crore fraud. Misar further submitted that Wadhawans commanded control over the financial affairs of the PMC Bank.

The prosecution alleged that Wadhawans conspired with bank’s managing director Joy Thomas along with Singh and other Board of Directors, and did not pay outstanding dues, which is calculated as ₹2,400 crore. The prosecution further submitted that adequate properties were not mortgaged by Wadhawans and that those properties furnished as mortgage against overdraft facilities did not possess bonafide titles.

After hearing both sides, the session judge rejected Wadhawans’ plea for bail and observed, “They cannot shirk their involvement by contending that the offence is committed by the officials of PMC Bank and they have no role in it. There is evidence to infer the involvement of applicants (Wadhawans) in the offence.”