He is well-remembered for his defence of the three Indian National Army soldiers accused of treason during World War II, and for attempting to negotiate a secret power-sharing agreement with Liaquat Ali Khan of the Muslim League.

His connection with the Indian National Congress began when he represented the farmers of Gujarat in the inquiry by the British Government following the Bardoli Satyagraha in 1928.

The satyagraha was a campaign by the farmers of Gujarat protesting oppressive taxation policies in a time of famine, under the leadership of Sardar Vallabhbhai Patel.

Participating in the satyagraha initiated by Mohandas Gandhi, he was arrested on 10 December, under the Defense of India Act and sent to Yerwada Central Jail.

While pressing demands for the immediate release of political prisoners, Desai began secretive talks with Liaquat Ali Khan, the second-most important leader of the Muslim League.

However this assertion has been seriously challenged by other eminent people like Sir Chiman Lal Setalwad who have stated that Gandhi had full knowledge of the ongoing negotiations.

While Desai was working without the knowledge of Gandhi, Patel, Jawaharlal Nehru or any other Congress leader, Khan had kept the deal a secret from his superior, Muhammad Ali Jinnah.

While Desai presented full information to Gandhi, Jinnah and the League outrightly rejected any agreements, and Liaquat Ali Khan denied that such a pact was being negotiated.

Desai's assertion that a deal had been reached was ridiculed by the League, while Congress leaders were angry at him for conducting such negotiations without informing them.

Bhulabhai Desai would lead a major effort in March 1945 to get the House to defeat the unpopular war budget, but he had lost political standing in his own party owing to the fallout of the Desai-Liaquat pact.

When three captured Indian National Army (INA) officers, Shahnawaz Khan, Prem Kumar Sahgal and Gurbaksh Singh Dhillon were put on trial for treason, the Congress formed a Defence committee composed of 17 advocates including Bhulabhai Desai.