New Delhi, Aug 31 (PTI) A Delhi court on Wednesday granted interim bail to businessman Ajay Ramesh Nawandar, arrested in a Rs 34,615 crore bank fraud case involving Dewan Housing Finance Limited, considering deterioration in his medical condition.

Special Judge Vishal Gogne, who had denied him bail on August 22, granted the relief for two weeks from the day of his release from the jail, saying "The detention of an accused, regardless of the gravity of an offence, cannot operate to the detriment of his basic human right and free agency in determining the nature and locus of medical care, especially when a grave risk to life and limb is more than a reasonable prospect.”

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The application seeking bail disclosed medical grounds for release which were corroborated by the report from the Medical Officer In-charge of the jail dispensary, the judge noted.

“The objections raised by the CBI with reference to the factual matrix, comprising a financial fraud and the alleged recovery of costly paintings (worth about Rs.30 crore) from the accused, are beyond the pale of consideration,” the judge said.

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The court directed advocate Hemant Shah, appearing for the accused, to immediately inform the Investigating Officer (IO) about the details of the hospital/medical facility, where the accused is to seek medical care.

“In effect, the accused has thus far been more in medical detention (at the Jail MI room or outside Government Hospitals) than in a typical jail cell,” the court said, noting that the accused was suffering from various ailments which reflected “continuous deterioration in the medical condition”.

The court had earlier denied him bail on account of his possible influence on both evidence and witnesses in the matter.

The court held he was “prima facie” complicit at some stage in the diversion of the “humongous funds” originating from the loans.

The Central Bureau of Investigation (CBI) had earlier conducted searches at Nawandar's premises and recovered a large collection of uber-luxury watches worth crores of rupees, including Rolex Oyster Perpetual, Cartier, Omega and Hublot, and two paintings worth Rs 33 crore, officials said.

The agency claimed the items belonged to former DHFL CMD Kapil Wadhawan and ex-director of the company Dheeraj Wadhawan, who allegedly defrauded banks to the tune of Rs 34,615 crore, making it the biggest bank loan fraud case probed by the agency.

These items were allegedly purchased using the proceeds of the scam and kept at Nawandar's premises to evade recovery and seizure by enforcement agencies, officials said.

The CBI had alleged that Nawandar was acting as a conspirator aiding and abetting the Dewans to hide the proceeds of the crime and was in the process to dispose these items of when he was arrested by the agency.

The CBI had registered the case on June 20 on a complaint from the Union Bank of India (UBI), the leader of a 17-member lender consortium that extended credit facilities to DHFL to the tune of Rs 42,871 crore between 2010 and 2018.

The bank has alleged that Kapil and Dheeraj Wadhawan, in a criminal conspiracy with others, misrepresented and concealed facts, committed criminal breach of trust and abused public funds to cheat the consortium to the tune of Rs 34,615 crore by defaulting on loan repayments from May 2019 onwards, the CBI said.

An audit of DHFL's account books showed the company allegedly committed financial irregularities, diverted funds, fabricated books and round-tripped funds to "create assets for Kapil and Dheeraj Wadhawan", using public money, it said.

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