Kapil Wadhawan & Anr. v. Central Bureau of Investigation (Supreme Court) 2025 INSC 1440

Supreme Court of India
Criminal Appeal arising out of SLP (Crl.) Nos. 16953 & 17057 of 2025
Decision dated: 11 December 2025

Head Note

Criminal Law — Bail — Economic Offences — Prolonged Pre-trial Incarceration — Article 21 of the Constitution — Right to Speedy Trial — Bail as a Rule
The Supreme Court granted regular bail to the appellants accused of large-scale economic offences involving alleged bank fraud, holding that prolonged pre-trial incarceration without commencement of trial violates Article 21 of the Constitution. The Court reiterated that seriousness of allegations and magnitude of economic offences cannot justify indefinite detention of under-trial prisoners, particularly where investigation is complete, charges are yet to be framed, co-accused are on bail, and trial is unlikely to conclude within a reasonable time. The Court clarified that statutory rigours and provisions like Section 479 of the Bharatiya Nagarik Suraksha Sanhita, 2023, cannot be interpreted to mandate continued incarceration in derogation of constitutional liberty. Reaffirming that “bail is the rule and jail is the exception,” the Court held that delay attributable to the prosecution or systemic constraints cannot convert the criminal process into punishment.

Facts

The appellants, Kapil Wadhawan and Dheeraj Wadhawan, former promoters of Dewan Housing Finance Limited (DHFL), were accused in a CBI case alleging criminal conspiracy, cheating, breach of trust, falsification of accounts, and offences under the Prevention of Corruption Act. The allegations pertained to the diversion and siphoning of loans aggregating to approximately ₹57,000 crores obtained from a consortium of banks.

The appellants were arrested in April 2020. A voluminous chargesheet running into over four lakh pages was filed, proposing examination of 736 witnesses, along with supplementary chargesheets involving more than 110 accused persons and entities. Despite the passage of over two and a half years in custody in the present case (and over five years overall), charges had not yet been framed.

Notably, the appellants had already been granted bail in all other criminal proceedings arising out of the same transactions. The trial court itself observed that even with day-to-day hearings, the trial would not conclude within two to three years.

Issues

1. Whether prolonged pre-trial incarceration in a complex economic offence case violates the right to personal liberty under Article 21 of the Constitution.

2. Whether the gravity and magnitude of alleged economic offences alone justify denial of bail.

3. Whether Section 479 of the Bharatiya Nagarik Suraksha Sanhita, 2023, can be interpreted to mandate continued detention in cases punishable with life imprisonment.

Held

Allowing the appeals, the Supreme Court granted bail to the appellants subject to stringent conditions, including surrender of passports, travel restrictions, periodic reporting, and non-interference with witnesses.

Ratio Decidendi

1. Prolonged pre-trial detention violates Article 21
   The Court held that where investigation is complete, charges are not framed, and trial is unlikely to conclude within a reasonable time, continued incarceration of an under-trial prisoner amounts to an infringement of the right to personal liberty and speedy trial guaranteed under Article 21.

2. Seriousness of offence is not the sole determinant for bail
   While acknowledging that economic offences are serious, the Court clarified that no inflexible rule exists mandating denial of bail in all economic offences. Bail decisions must be based on custody period, likelihood of trial completion, parity with co-accused, and necessity of further detention.

3. “Bail is the rule and jail is the exception” applies to economic offences
   The Court reaffirmed that pre-trial detention cannot become punitive. The presumption of innocence continues until conviction, irrespective of the nature or scale of the allegations.

4. Interpretation of Section 479 BNSS must align with constitutional liberty
   The Court rejected the prosecution’s argument that offences punishable with life imprisonment automatically disentitle an accused from bail under Section 479 BNSS. Such an interpretation would defeat the purpose of the provision and undermine Article 21.

5. Systemic delay cannot prejudice the accused
   If the State lacks the capacity to ensure an expeditious trial, it cannot oppose bail on the ground of seriousness of the offence. Delay attributable to the prosecution or systemic constraints cannot justify indefinite incarceration.

Significance

This judgment is a reaffirmation of constitutional bail jurisprudence in India. It clarifies that even in large-scale economic offences, courts must guard against converting pre-trial detention into punishment. The decision strengthens the application of Article 21 in bail matters, underscores the obligation of the State to conduct timely trials, and cautions against mechanical denial of bail in complex financial prosecutions.

End Notes: Case Laws Referred

1. State of Rajasthan v. Balchand, (1977) 4 SCC 308 — Bail as the rule, jail as the exception.

2. Sanjay Chandra v. CBI, (2012) 1 SCC 40 — Bail not to be denied as punishment; seriousness alone insufficient.

3. Surinder Singh v. State of Punjab, (2005) 7 SCC 387 — Prolonged detention pending trial violates Article 21.

4. Kalyan Chandra Sarkar v. Rajesh Ranjan, (2004) 7 SCC 528 — Principles governing grant of bail.

5. Union of India v. K.A. Najeeb, (2021) 3 SCC 713 — Constitutional courts may grant bail where trial delay infringes Article 21.

6. Satender Kumar Antil v. CBI, (2022) 10 SCC 51 — Economic offences not a separate class warranting automatic denial of bail.

7. Manoranjana Sinh v. CBI, (2017) 5 SCC 218 — Presumption of innocence and limits of pre-trial detention.

8. Javed Gulam Nabi Shaikh v. State of Maharashtra, (2024) 9 SCC 813 — Speedy trial applies irrespective of gravity of offence.

9. Manish Sisodia v. Directorate of Enforcement, (2024) 12 SCC 660 — Long incarceration without trial violates Article 21 even in economic offences.

10. V. Senthil Balaji v. Deputy Director, Directorate of Enforcement, 2024 SCC OnLine SC 2626 — Stringent bail provisions cannot coexist with inordinate trial delay.