Liberty Cannot Wait for Endless Trials: Supreme Court Grants Bail to Wadhawan Brothers in ₹57,000 Crore DHFL Scam

“Prolonged Incarceration Without Trial Is Punishment Without Conviction” – Supreme Court of India delivered a decisive ruling in Kapil Wadhawan & Dheeraj Wadhawan vs. Central Bureau of Investigation, releasing the accused on bail in the massive ₹57,252 crore financial fraud linked to Dewan Housing Finance Corporation Ltd. (DHFL). The Bench comprising Justice J.K. Maheshwari and Justice Vijay Bishnoi observed that despite the seriousness of the allegations, the accused could not be kept in jail indefinitely as “the trial is nowhere near commencement”.

Terming the continued pre-trial incarceration as “constitutionally impermissible”, the Court held that “bail cannot be denied solely on the gravity of the offence when the trial is indefinitely delayed and similarly situated co-accused are already enlarged on bail”.

“Bail Is the Rule, Jail the Exception” – Apex Court Reasserts Bedrock Principle of Criminal Law

Highlighting the foundational principle of criminal jurisprudence, the Court declared:

“There is no gainsaying that under Indian law ‘bail is the rule and jail is an exception’ is etched in the ethos of criminal jurisprudence.”

The judgment categorically emphasized that the presumption of innocence is not a hollow principle, and that accused persons cannot be jailed endlessly before their guilt is adjudicated.

The Court condemned the misuse of pre-trial custody as a punitive tool, stating:

“Pre-trial incarceration cannot be allowed to degenerate into punishment without adjudication.”

In clear terms, the bench held that courts must not become complicit in a system where “the process itself becomes the punishment.”

The Wadhawan brothers, Kapil and Dheeraj, were accused of orchestrating one of India’s largest financial frauds by allegedly siphoning off over ₹34,000 crores out of ₹57,252 crores borrowed by DHFL from a consortium of 17 public and private sector banks, using a web of 81 shell companies.

They were booked under Sections 120-B, 409, 420, and 477-A of the Indian Penal Code and Section 13 of the Prevention of Corruption Act, 1988, with further proceedings under the new Section 479 of the Bharatiya Nagarik Suraksha Sanhita, 2023.

The CBI filed its chargesheet on October 15, 2022, naming 110 accused and citing 736 witnesses, along with a documentary record stretching across over 4 lakh pages. Despite the passage of years, charges had not yet been framed, and the trial court observed that the trial could not conclude in even three years, even if conducted on a day-to-day basis.

The appellants had already been granted bail in 10 other cases arising from the same transaction. In the present case, they had remained in custody for over two and a half years, and for more than five and a half years cumulatively.

The central issue before the Court was whether the accused, facing grave economic offences, could be granted bail given the inordinate delay in trial, and whether Section 479 BNSS restricts such bail.

While the State argued that “the gravity of the offence and the possibility of life imprisonment disentitles them from bail,” the Court rejected such reasoning as antithetical to fundamental rights.

“To say that every person accused of an offence punishable with life imprisonment must remain in jail till the conclusion of trial is to turn bail law on its head.”

On Section 479 BNSS, which replaced Section 436A CrPC, the Court clarified:

“The provision cannot be construed to mean that an undertrial must complete one-half or one-third of the maximum sentence before being considered for bail... Such interpretation would violate Article 21 and defeat the purpose of decongesting prisons.”

In fact, the Court held that provisions like Section 479 BNSS are supplementary, and do not override the constitutional protection of liberty. The judges found the prosecution’s stand to be “an illiberal and dangerous interpretation that undermines the very goal of criminal justice.”

“The State Cannot Oppose Bail If It Cannot Ensure a Speedy Trial”

Quoting the recent decision in Javed Gulam Nabi Shaikh v. State of Maharashtra, the Court cautioned:

“If the State or any prosecuting agency lacks the wherewithal to ensure a speedy trial, it should not oppose bail on the ground that the offence is serious.”

In a powerful indictment of the prolonged detention, the bench remarked:

“The right of the accused to have a speedy trial could be said to have been infringed thereby violating Article 21 of the Constitution.”

“Economic Offences Not an Exception to Liberty” – Court Rejects One-Size-Fits-All Approach

The judgment repudiated the argument that economic offences, by themselves, justify continued incarceration, citing the Constitution Bench judgment in Satender Kumar Antil v. CBI. The Court stated:

“All economic offences cannot be treated alike... After all, an economic offence cannot be classified as such, as it may involve various activities and may differ from one case to another.”

The Court noted that the investigation was complete, the evidence is documentary, and bail had already been granted to all co-accused. Thus, continuing to detain the appellants, while others in the same case were free, would violate the principle of parity and equality before law.

Without venturing into the merits of the allegations, the Court granted regular bail to Kapil and Dheeraj Wadhawan with stringent conditions, including surrender of passports, monthly police reporting, and a bar on international travel. The appellants were directed to furnish a personal bond of ₹10 lakh each with two sureties.

The Court warned:

“Any violation of the conditions shall be treated as valid ground for cancellation of bail.”

The Court further observed:

“While bail must be granted in view of prolonged incarceration, the liberty so granted cannot be misused. Any interference with evidence or intimidation of witnesses will result in immediate revocation.”

This decision stands as a resounding reaffirmation of the constitutional centrality of personal liberty, especially in an era of complex, large-scale economic offences. The Supreme Court has made it unambiguously clear: no one, not even an accused in a ₹57,000 crore fraud case, can be subjected to punishment by delay.

“Punishment in Indian criminal jurisprudence begins only after conviction. An accused, until then, is entitled to every safeguard the Constitution provides.”

The judgment is a reminder to all courts and investigating agencies — seriousness of crime is not a license to hold liberty hostage.

Date of Decision: December 11, 2025