p. 1 Bail Appln. 3640/2024 p. 2 Bail Appln. 3640/2024 subsequently siphoned off and misappropriated large portions of the funds. Books of accounts of DHFL were allegedly falsified to conceal the fraud. The consortium suffered a wrongful loss of ₹34,926.77 crores during the period from January 2010 to December 2019. 3. Upon completion of the investigation, the CBI filed a charge sheet under Section 173 CrPC on 15.10.2022 against 18 individuals, including the present applicant, and 57 companies/entities. The p. 3 Bail Appln. 3640/2024 through acts of forgery, cheating, criminal breach of trust, and falsification of accounts. The diversion involved 87 shell companies operated in the names of employees, friends, and associates of the Wadhawan brothers. 4. It was discovered that these shell companies received funds without proper documentation, while on paper, the same funds were shown as disbursed to 2,60,315 fictitious retail borrowers. A fictitious branch termed Bandra branch-001 was virtually created in DHFLs system to execute these transactions. Manipulation of DHFLs software Fox Pro was done to create fake customers and dummy loan data. The transactions were manually fed into DHFLs Synergy system under this fake branch to fabricate accounting entries. Thus, fictitious retail loan accounts were used to mask the diversion of funds to shell companies. 5. Separate books of account, known as the Bandra Book, were maintained for these fraudulent transactions, misleading the consortium banks and the National Housing Bank. Loans were also given to various developers without following lending norms or taking adequate security, many of whom were connected to the promoters of p. 4 Bail Appln. 3640/2024 consortium of 17 banks. He is accused of creating and operating 87 shell companies in the names of associates, employees, and relatives to siphon funds, falsely recorded as retail housing loans to over 2.6 lakh fictitious customers through a non-existent Bandra Branch-001 in DHFLs internal systems. He allegedly manipulated the FoxPro and Synergy accounting software to fabricate loan accounts, maintained a parallel Bandra Book to conceal fraudulent transactions, and misled both the lending banks and the National Housing Bank. 7. Further, the petitioner is accused of misusing DHFL funds for personal and group benefit, including artificially inflating DHFLs stock price, diverting ₹7,748.75 crores sanctioned for Slum Rehabilitation projects, and routing large sums through sham transactions to settle liabilities and fund Wadhawan Group companies. Page 5 of 27 Bail Appln. 3640/2024 p. 6 Bail Appln. 3640/2024 p. 7 Bail Appln. 3640/2024 p. 8 Bail Appln. 3640/2024 under separate investigation (e.g., RC 2192020E0004, Mumbai). It was submitted that no explanation or justification has been offered for this diversion, and no repayments have been made towards this defrauded amount. Page 9 of 27 Bail Appln. 3640/2024 ₹34,926.77 crores were outstanding as per consortium records. Of the total disbursed funds, ₹33,029.17 crores were diverted and not a single rupee has been repaid. Furthermore, DHFL collected ₹2,39,491.98 crores through Non-Convertible Debentures (NCDs) and ₹5,296.03 crores through Fixed Deposits. The admitted dues at the time of the resolution process were approximately ₹90,000 crores. It was submitted that none of the orders of NCLT, NCLAT or the Supreme Court in Piramal Capital and Housing Finance Ltd. v. 63 Moons Technologies Ltd. 2025 SCC OnLine SC 690 record any settlement or repayment by DHFL or its promoters towards the diverted amount, and that the applicant is misleading this Court with distorted figures. 15. The learned Special Counsel further submitted that although the FIR named only 3 individuals and 10 entities, loans and advances to 131 entities were under scrutiny. Out of these, 49 entities were found to be genuine borrowers, and 82 entities were involved in the diversion of funds. Out of these 82 entities, 6 were already being prosecuted in other cases (notably the Yes Bank case) and thus not reinvestigated. A few were duplicate entries or in resolution proceedings or had ceased to exist. Ultimately, 69 entities, including 57 "Bandra Book" entities, have been prosecuted. In total, 137 companies were used for diversion, but only those against whom prosecutable material was available were booked. Page 10 of 27 Bail Appln. 3640/2024 crores. Notably, loans worth ₹45,000 crores were ascribed a nominal value of ₹1 due to their fraudulent nature and misappropriation by the promoters. The challenge raised by 63 Moons Technologies Limited against this ascription was dismissed by the Supreme Court. Hence, any argument advanced by the applicant relying on the value of these loans or the resolution plan is misplaced and untenable. 17. The learned Special Counsel submitted that the applicant was arrested on 19.07.2022 and that the charge sheet was filed within the stipulated period. Though initially released on statutory bail, the same was set aside by the Supreme Court upon the finding that the investigation was complete. The Court was informed that the applicant, despite being granted an opportunity to inspect unrelied documents, failed to do so within the prescribed time and sought repeated extensions. These tactics, it was argued, were employed solely to delay the proceedings. It was further submitted that in view of the gravity of allegations, the nature of the offence, and the punishment prescribed, particularly for offences under Sections 409 and 467 IPC (punishable with life imprisonment), bail is not warranted. Reliance was placed on CBI v. Subramani Gopal krishnan (2011) 3 SCC 296, to argue that volume of evidence or delay cannot, by themselves, be grounds for bail. Page 11 of 27 Bail Appln. 3640/2024 co-accused. The Special Judge, PMLA, Mumbai, had noted that hospital visits during custody were misused by the Petitioner to obstruct justice. 19. Finally, it was argued that the applicant cannot claim parity with co-accused who have been granted bail, as the circumstances in their cases were materially different. Co-accused Dheeraj Wadhawans bail was granted solely on medical grounds by this court, is under challenge before the Supreme Court, Sunny Bathijas bail was granted due to prolonged custody and not on merits and Ajay Nawandars bail was granted on medical grounds and due to his limited role. It was emphasized that the Petitioner, being CMD of DHFL, was the principal architect of the entire conspiracy and the prime beneficiary of the defrauded amounts. His custodial conduct, antecedents, and potential to tamper with evidence clearly disqualify him from the relief of bail. Reliance has been placed upon P. Chidambaram v. p. 12 Bail Appln. 3640/2024 appointed under the Insolvency and Bankruptcy Code, 2016. After due verification and scrutiny, the Administrator had admitted claims only to the tune of approximately ₹87,000 crores and rejected claims worth ₹8,000 crores, including those submitted by the consortium of banks themselves. The actual claims of the banks were adjudicated to be no more than ₹27,000 crores. Page 13 of 27 Bail Appln. 3640/2024 payments, interest entitlements, and non-convertible debentures, all of which were duly accepted by the financial creditors. Therefore, the assertion that no recovery has been made is patently false and misleading. 23. In support of the contention that the extent of fraud has been wrongly exaggerated, reliance was placed upon a categorical admission made by the CBI in its supplementary chargesheet. In paragraph 102 of the said chargesheet, the CBI has clearly acknowledged that no diversion of funds has been found in relation to loans worth ₹13,425.34 crores disbursed by DHFL. These loans were found to be legitimate, and no benefit was traced to the applicant or his associates. It was submitted that this admission itself undermines the entire foundation of the CBIs allegation of massive fraud and siphoning. 24. The learned senior counsel also brought to the Courts attention that loans worth ₹3,300 crores form the subject matter of a separate FIR registered in Mumbai, in which the petitioner has already been p. 14 Bail Appln. 3640/2024 amounting to ₹66,700 crores have either been made or are in the process of realization. 25. It was further submitted that substantial securities worth ₹30,000-₹40,000 crores have not even been valued or factored in by the CBI while presenting the financial picture. Furthermore, it was pointed out that assets worth ₹2,200 crores belonging to the petitioner and his family have been attached by investigating agencies, a fact which has been deliberately suppressed by the prosecution. In these circumstances, it was urged that the CBIs financial projections and recovery claims are not only erroneous but also unreliable. 26. The learned senior counsel next submitted that the CBI has made as many as 11 co-accused persons as approvers, including those allegedly involved in frauds of over ₹14,000 crores, without effecting any recovery from them or requiring disclosure of any benefits gained. The apparent selective approach of the CBI, while denying similar relief to the petitioner despite his cooperation and the attachment of substantial assets, is both arbitrary and unjustified. 27. On the issue of delay, as submitted earlier it was strongly contended that the delay in commencement of trial is entirely attributable to the CBI. Although the chargesheet was filed in October p. 15 Bail Appln. 3640/2024 p. 16 Bail Appln. 3640/2024 from a consortium of 17 banks. The methodical falsification of accounts, creation of fictitious retail borrowers, manipulation of internal software, and maintenance of a separate Bandra Book strongly indicate premeditated, systemic fraud. These acts, if proven, are not merely violations of penal statutes, but subvert the very p. 18 Bail Appln. 3640/2024 p. 19 Bail Appln. 3640/2024 p. 20 Bail Appln. 3640/2024 p. 21 Bail Appln. 3640/2024 p. 22 Bail Appln. 3640/2024 p. 23 Bail Appln. 3640/2024 p. 24 Bail Appln. 3640/2024 42. The petitioner was taken into custody in the present case on 19.07.2022 and was granted default statutory bail on 03.12.2022, this court upheld the bail of the petitioner but the Supreme Court cancelled his bail on 24.01.2024. So the effective custody of the applicant is of around 2 years and not 4 years as claimed. 43. The allegations against the applicant are not based on conjecture or assumptions but flow from detailed forensic audit trails, cross- verification of fictitious borrower accounts, money trail analysis, and statements of approvers. The contention that the forensic audit report is inadmissible under Section 45 of the Evidence Act is a matter for trial and cannot be decided at the bail stage. The stage of trial is precisely when the evidentiary worth of the documents relied upon by the prosecution will be determined. At this juncture, the Court is only concerned with the existence of a prima facie case, the seriousness of the offence, and the potential impact on the trial. All these factors weigh against the grant of bail in the present case. The loss of funds as shown by the CBI/respondent cannot be discarded and this is a matter of trial. 44. The argument that non-repayment or default in repayment of loans is civil in nature, and hence, the prosecution has criminalised a commercial dispute, is specious and untenable. The case of the p. 25 Bail Appln. 3640/2024 p. 26 Bail Appln. 3640/2024 p. 27 Bail Appln. 3640/2024