'Deviation From 'Bail Is The Rule' Principle Constitutionally Suspect' : Supreme Court Grants Bail To Wadhawan Bros In DHFL Scam

The Supreme Court recently granted bail to Kapil Wadhawan, former Chairman and Managing Director of Dewan Housing Finance Limited, and his brother Dheeraj Wadhawan, former Director of DHFL, in the Rs 34,000 crore bank fraud case registered by the Central Bureau of Investigation on a complaint by Union Bank of India.

A bench of Justice J K Maheshwari and Justice Vijay Bishnoi noted that charges have not yet been framed and that even with day-to-day hearings, the trial is unlikely to conclude within two to three years.

“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. This rule stems from the fact that criminal law presumes a person to be innocent unless proven otherwise. Meaning that generally an under-trial prisoner ought not be placed behind bars indefinitely unless there is clear threat to society, influencing witnesses/inquiry or he is a flight risk etc. This rule also ensures that process is also not made punishment, wherein a person is jailed for very many years pending trial. Bail under the Code is a qualified right of an accused before conviction, wherein the accused is not guaranteed bail, rather it puts onus on the prosecution to establish as to why the under-trial prisoner should not be enlarged on bail. Any deviation in the above proposition is constitutionally circumspect”, the Court observed.

It added, “This brings us to the right to speedy trial which is an inseparable facet of Article 21 of the Constitution. Where delay in investigation or trial is such that incarceration becomes unduly prolonged, the constitutional guarantee of fairness is irreparably compromised.”

The Court cited the judgment in V. Senthil Balaji v. Deputy Director, Directorate of Enforcement, which granted bail to former Tamil Nadu Minister Senthil Balaji in the cash for jobs scam, observing that stringent conditions prescribed in special penal statutes such as PMLA cannot be used as tools to incarcerate an undertrial for an unreasonably long period without conclusion of trial.

The Court allowed their appeals against orders of the Delhi High Court dated August 04, 2025 and September 16, 2025, which had rejected their applications for regular bail.

The Court directed that both be released on bail on furnishing a personal bond of Rs 10 lakh each with two sureties of the like amount, subject to conditions including surrender of passports, restriction on travel outside India without prior permission, monthly reporting to the jurisdictional police station, and a direction not to influence witnesses.

The CBI has alleged that the Wadhawan brothers, along with other accused persons, entered into a criminal conspiracy to cheat a consortium of 17 banks led by Union Bank of India. It is alleged that the accused induced the banks to sanction loans of over Rs 42,000 crore to DHFL and its associated entities, causing a wrongful loss of Rs 34,615 crore to the consortium. The CBI has alleged that large amounts were siphoned off through shell companies by routing funds meant for genuine housing finance activities.

The FIR invokes offences under Sections 120B, 409, 420 and 477A of the IPC and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act.

The CBI filed its chargesheet on October 15, 2022 and subsequently filed a supplementary chargesheet, arraigning a total of 110 accused, including 40 individuals and 70 companies, and proposing to examine 736 witnesses.

The Court noted that the chargesheet runs into more than four lakh pages, apart from large volumes of digital data and unrelied documents.

While granting bail, the Court took note of the fact that Kapil Wadhawan has been in custody since April 2020 in connection with multiple cases arising out of the same set of transactions and that the appellants have been granted bail in all other connected cases, including the Yes Bank-related cases.

The Court reiterated that bail is the rule and jail is the exception, and held that prolonged pre-trial incarceration, where a speedy trial is not feasible, would violate the right to personal liberty under Article 21 of the Constitution.

It cited the Satender Kumar Antil v. CBI judgment, which observed that, all economic offences cannot be treated alike and bail should not be automatically denied in every case of economic offence.

While granting bail, the Court emphasised that it was not expressing any opinion on the merits of the allegations against the Wadhawan brothers.

Appearance –

For Petitioners: Mr. Rohan Batra, AOR Mr. Mukul rohatgi, Sr. Adv. Mr. Balbir singh, Sr. Adv. Mr. Arvind Nayar, Sr. Adv. Mr. Ashish Verma, Adv. Mr. Jai Anant Dehadrai, Adv. Mr. Prakhar Parekh, Adv. Ms. Debopriyo Moulik, Adv. Ms. Iti Agarwal, Adv.Mr. Samir Malik, AOR Mr. Lzafeer Ahmad B. F., AOR Ms. Chitra Rentala, Adv. 26 Mr. Parikshit Arvindan, Adv. Mr. Krish Parashar, Adv.

For Respondent: Mr. Suryaprakash V Raju, ASG. Mr. Mukesh Kumar Maroria, AOR Mr. Annam Venkatesh, Adv. Mr. Zoheb Hossain, Adv. Mr. Hitarth Raja, Adv. Mr. Kartik Sabharwal, Adv. Mr. Ayansh shukla, Adv.26. Mr. Shaurya Sarin, Adv. Mr. Harsh Paul Singh, Adv. Mr. O. P. Gaggar, AOR Mr. Sachindra Karn, Adv.

Case no. – SLP (Crl) No. 16953/2025

Case Title – Kapil Wadhawan v. Central Bureau of Investigation

Citation : 2025 LiveLaw (SC) 1212

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