SC Stays HC Order To Shift Accused From Jail To Residence

The Supreme Court has stayed a Bombay High Court order which had directed the shifting of HDIL promoters Rakesh Wadhawan and Sarang Wadhawan, who were arrested for their alleged involvement in the Punjab & Maharashtra Co-operative (PMC) Bank scam, from Mumbai's Arthur Road Jail to their residence in Bandra.

Earlier, Solicitor General Tushar Mehta mentioned the matter before a Supreme Court bench stating that the PMC Bank scam involved Rs 7,000 crore and the Bombay High Court had passed a very “unusual order” after hearing a public interest litigation (PIL).

Mehta stated that the Supreme Court that if the fraud accused Wadhwan father and son duo are shifted to their Bandra residence from judicial custody in Mumbai’s Arthur Road jail, as per the Bombay High Court’s “unusual order”, it would be as good as giving bail to them.

It may be recalled that the Bombay High Court recently set up a three-member committee to value and sell off encumbered assets of the Wadhwan family-owned Housing Development & Infrastructure Limited (HDIL) in order to speed up recovery of dues payable by that company to PMC Bank which it had allegedly defrauded.

The Bombay High Court had directed the Arthur Road jail superintendent to shift both the accused to their Bandra residence under the supervision of two jail guards, apparently to ensure their co-operation to the three-member committee.

The Bombay High Court passed the order after hearing a public interest litigation (PIL) which had sought a direction for quick disposal of HDIL’s assets attached by the Economic Offence Wing of the Mumbai police and the Enforcement Directorate (ED) in order to repay PMC bank depositors as soon as possible.

The fraud at PMC Bank came to light in September last year after the Reserve Bank of India (RBI) discovered that the bank had allegedly created fictitious accounts to hide over Rs 4,355 crore of loans extended to almost-bankrupt HDIL.