DHFL case: Expeditiously decide Kapil Wadhawan bail plea, Supreme Court tells Delhi High Court

New Delhi, June 20, 2025 — The Supreme Court of India on Thursday directed the Delhi High Court to expeditiously decide on the bail plea filed by Kapil Wadhawan, the former promoter of Dewan Housing Finance Corporation Ltd (DHFL), in connection with the ongoing money laundering case being investigated by the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI).

The apex court’s direction comes amidst growing legal complexities and investor anxiety in the DHFL case, which has become one of India’s most high-profile financial fraud investigations in recent times.

Top Court Calls for Speedy Disposal

A bench led by Justice Bela M. Trivedi observed that the prolonged delay in adjudicating Wadhawan’s bail plea raises concerns over the right to speedy justice. The court refrained from expressing an opinion on the merits of the case but emphasized that the High Court must not defer the decision unduly.

“We are not inclined to comment on the merits of the case. However, given the time already consumed, we deem it appropriate to request the High Court to dispose of the bail application as expeditiously as possible,” the bench stated.

The Supreme Court’s order came in response to a special leave petition (SLP) filed by Wadhawan, seeking relief over the delay in adjudication by the Delhi High Court, where his bail plea has been pending since early 2024.

Background of the Case

Kapil Wadhawan and his brother Dheeraj Wadhawan, both former directors of DHFL, have been under investigation for allegedly orchestrating a massive financial fraud involving the diversion of over ₹34,000 crore in loans. The scandal emerged in 2020 and implicated several public sector banks and financial institutions.

The Enforcement Directorate has accused the Wadhawan brothers of creating a web of shell companies to divert funds meant for legitimate housing loans, resulting in one of the largest banking sector scams in Indian history. The CBI has also filed multiple charge sheets against them, highlighting a pattern of criminal conspiracy and misappropriation of public funds.

The case drew public attention not only due to the size of the alleged fraud but also because of DHFL’s prior reputation as a key player in India’s housing finance ecosystem.

Legal Timeline and Delays

Wadhawan has been in custody since 2020. Despite several bail applications, the courts have consistently extended judicial custody citing the gravity of the allegations and potential risk of tampering with evidence. His latest bail application filed in the Delhi High Court in January 2024 has not yet been heard conclusively.

His legal counsel argued before the Supreme Court that prolonged incarceration without a clear trial timeline constitutes a violation of fundamental rights, particularly under Article 21 of the Constitution, which guarantees protection of life and personal liberty.

Legal experts believe the Supreme Court’s nudge could hasten judicial proceedings and help establish clearer jurisprudence around the balance between investigation needs and individual rights.

Analyst Viewpoint

“The DHFL saga has been dragging for too long,” said Amit Arora, partner at a Mumbai-based legal advisory firm specializing in white-collar crimes. “The Supreme Court is sending a strong message that procedural delays cannot be a justification for prolonged custody without a hearing. This may signal a shift toward ensuring fairer bail proceedings even in high-profile cases.”

Another financial analyst, Sonia Mehra from TactFin Advisors, added: “For investors still locked into DHFL bonds or impacted by related corporate debt restructuring, the pace of legal clarity is critical. Any acceleration in the judicial process will have a positive bearing on resolution timelines.”

Market Context

DHFL, once a leading non-banking financial company (NBFC), was admitted for insolvency proceedings in December 2019. In 2021, Piramal Capital and Housing Finance acquired the company through the Insolvency and Bankruptcy Code (IBC) process, offering around ₹37,250 crore to creditors. However, multiple litigations and investigations linked to the fraud have continued to cast a shadow over the restructuring process.

Several institutional investors and bondholders have been keenly watching the progress of the legal proceedings, as delays in resolution directly impact asset recovery rates and secondary market valuations of related debt papers.

Investor Outlook

With the Supreme Court urging timely adjudication, legal experts anticipate quicker verdicts in pending applications, potentially clearing some of the logjams in the enforcement and insolvency resolution mechanisms.

However, the broader outlook remains cautious. Investor trust, once shaken, is difficult to rebuild—especially in a sector already grappling with issues of asset quality and regulatory scrutiny. Many analysts argue that while judicial acceleration is welcome, deeper reforms in NBFC oversight and forensic auditing practices are essential to restore confidence.

Meanwhile, stakeholders await the Delhi High Court’s forthcoming decision, which could set a precedent for future white-collar crime bail cases.