The Lawyer's Digest is a collection of concise summaries of all the judgments passed by the Supreme Court of India over the course of a month.

Topics have been sub-divided into areas of law including arbitration, criminal law, consumer law, service and administrative law, etc. for ease of reading.

Here are the summaries of judgments passed in February 2020.

Arbitration

In Shakti Nath v. Alpha Tiger Cyprus Investment Ltd. & Ors., the issue concerned challenge to an award passed in an ICC arbitration seated in New Delhi. The Court rejected the challenge to the ICC Award, and upheld the judgment of the High Court passed under Section 37 of the Arbitration and Conciliation Act 1996. However, with respect to the amount awarded towards interest and penal interest, the same was modified by consent of the parties, as a prudent commercial decision. [Keywords: Challenge to an ICC Award under the Arbitration and Conciliation Act 1996] [Coram: U.U. Lalit, Indu Malhotra, JJ.]

In Chandigarh Construction Co. Pvt. Ltd. v. State of Punjab & Anr., the proceedings arose in respect of an Award passed under the Arbitration Act 1940. The issue was whether the Award of the amount at the premium of 93.12% would be justified, particularly without assigning reasons for such Award. The Court noted that Clause 63 of the Contract between the parties required that the Award shall state the reasons for the amount awarded. Since the reasons were not provided in the Award for certain claims, the appropriate course ought to have been to set aside and remit the matter to the Arbitrator for fresh consideration, but since the claims were of the year 1994, the Court proceeded to decide the same itself. On the question of interest, the Court upheld reduction of the rate from 18% to 12%. [Keywords: requirement of stating reasons, setting aside] [Coram: R. Banumathi, A.S. Bopanna, JJ.]

In Balwant Singh (D) Thr. LRs. v. Dungar Singh (D) Thr. LRs., the disputes regarding partition of family properties between the parties, who were real brothers, were mutually agreed to be amicably decided by arbitration proceedings conducted by a panel of three arbitrators who were also close relatives of the parties. The District Judge refused to make the award rule of the court. On appeal, the High Court, under Section 39(1)(6) of the Arbitration Act 1940, upheld the Award on the ground that the same was given unanimously, and no misconduct was found on the part of the arbitrators. The Supreme Court held that since the parties had agreed by mutual consent that the award would be passed unanimously by the arbitrators and the same would bind the parties, the award deserved to be upheld. However, a partial modification to the award by way of settlement between the parties was permitted by the Supreme Court. [Keywords: Challenge under Section 39(1)(6) of the Arbitration Act 1940] [Coram: R. Banumathi, A.S. Bopanna, JJ.]

In Vijay Karia & Ors. v. Prysmian Cavi E Sistemi SRL & Ors., relying inter alia on Renusagar (1994) Supp 1 SCC 644 and Shri Lal Mahal (2014) 2 SCC 433, the Court held that enforcement of a foreign award under Section 48 may be refused only if the party resisting enforcement furnishes proof that any of the stated grounds has been made out to resist enforcement. It further held that:

a. The word “may” in Section 48 can, depending upon the context, mean “shall” or as connoting that a residual discretion remains in the Court to enforce a foreign award, despite grounds for its resistance having been made out.

b. The expression “was otherwise unable to present his case” in Section 48(1)(b) cannot be given an expansive meaning, and would amount to a breach only if a fair hearing was not given by the arbitrator to the parties, or if a party was unable to present his case for reasons outside his control.

c. A rectifiable breach under FEMA can never be held to be a violation of the fundamental policy of Indian law.

Upholding the enforcement of foreign award, the Court held that all pleas taken by the Appellant are, in reality, pleas going to the unfairness of the conclusions reached by the award, which is plainly a foray into the merits of the matter, which is proscribed by Section 48 read with the New York Convention. [Keywords: International Arbitration, Recognition and enforcement of foreign award in India, Section 48 of the Arbitration and Conciliation Act 1996, New York Convention 1958] [Coram: R.F. Nariman, Aniruddha Bose, V. Ramasubramanian, JJ.]

In M/s Dharmaratnakara Rai Bahadur Arcot Narainswamy Mudaliar Chattram & Other Charities & Ors. v. M/s Bhaskar Raju & Brother & Ors., the question was whether clause 36 in the lease deed, which was neither registered nor sufficiently stamped, could be acted upon to enforce the arbitration clause contained therein. The Court relied upon SMS Tea Estates (2011) 14 SCC 66, to hold that when an instrument is relied upon as containing the arbitration agreement, the Court is required to consider at the outset whether it is properly stamped or not, even if such objection is not raised. If the instrument is not properly stamped, is should be impounded and dealt with in terms of Section 38 of the Stamp Act 1988, and the court cannot act upon the arbitration clause therein. If the deficit duty and penalty is paid, such instrument can then be acted upon. In the facts, since the Respondent failed to pay the deficit duty, the arbitration clause in the lease deed could not be acted upon. [Keywords: insufficiently stamped] [Coram: S.A. Bobde, CJI, B.R. Gavai, Surya Kant, JJ.]

Criminal Law

In Chhota Ahirwar v. State of Madhya Pradesh, where there was an altercation between the accused appellant and the complainant, in which the main accused intervened and took out his pistol, aimed it at the complainant at the spur of the moment without being instigated by the accused appellant, the Court set aside the judgments of the courts below and acquitted the accused appellant. It held that any common, premeditated or prearranged intention jointly of the accused appellant and the main accused to kill the complainant, on the spot or otherwise was not established. It further held that the prosecution failed to prove that the pistol was fired at the exhortation of the accused appellant. [Keywords: exhortation, premeditation, Sections 34, 307 IPC] [Coram: Indira Banerjee, S. Ravindra Bhat, JJ.]

In Prem Chand Singh v. State of U.P., an FIR was registered against the appellant alleging that Power of Attorney was forged by him to sell certain lands owned by the complainant. When the appellant got acquitted in trial as charge could not be established, a second FIR was registered using the route of Section 156(3) of CrPC. on the same allegations. On application for discharge under Sections 419, 420 CrPC. the Judicial Magistrate Class II simplicitor rejected the application on the ground that earlier acquittal order was not brought on record. Revision against the same was also dismissed holding that the grounds urged could more appropriately be urged at the time of framing of charges. In appeal the Supreme Court while setting aside the impugned order and the subsequent FIR held that the substratum of the two FIRs were the same and mere additions of different sections in the subsequent FIR could not be considered as different ingredients to justify the latter FIR as being based on different materials, allegations and grounds. It further held that since the appellant already stood acquitted earlier of the similar charge which was concealed by the complainant, the latter FIR was unsustainable. [Keywords: Discharge Application] [Coram: Navin Sinha, Krishna Murari JJ.]

In Arun Singh v. State of U.P. while relying on the principles laid down in Gian Singh (2012) 10 SCC 303, Parbatbhai Aahir (2017) 9 SCC 641 and Narinder Singh (2014) 6 SCC 466 the Court held that the appellants were charged with Section 493 IPC and Sections 3, 4 of the Dowry Prohibition Act 1961 which are not only non-compoundable and non-bailable offences but are in fact offences against the society and therefore, in such cases, settlement even if arrived at between the complainant and the accused, the same cannot constitute a valid ground to quash the F.I.R. or the charge sheet. [Keywords: compromise, settlement, quashing] [Coram: Navin Sinha, Krishna Murari JJ.]

In Mukul Agrawal v. State of U.P., a suit for permanent injunction was filed by the complainant-respondent against the appellant restraining him for evicting the respondent from a disputed shop. The appellant relied upon an agreement entered into between the parties to submit that the respondent was not a tenant. During the pendency of the suit a complaint was filed by the respondent against the appellant under Sections 420, 467, 468, 471 IPC alleging that the agreement was forged. The trial court held that the agreement was forged. In appeal against the same the agreement was held to be genuine. The Court in a criminal appeal against the impugned order, whereby an application under section 482 CrPC. by the appellant for quashing the aforesaid complaint case was dismissed, held that in view of the conclusive finding of the appellate court that agreement not being forged, the very substratum of the criminal complaint vanishes and therefore the complaint needed to be quashed. [Keywords: Section 482, forgery] [Coram: Navin Sinha, Krishna Murari JJ.]

In Rajeshbhai Muljibhai Patel v. State of Gujarat the Court held that when the issue as to the genuineness of the receipts is pending consideration in the civil suit for recovery of money, the FIR ought not to have been registered based on the sole opinion of the handwriting expert as under Section 45 of the Indian Evidence Act the opinion of handwriting expert is a relevant but inconclusive evidence. It is always open to the party to adduce appropriate evidence to disprove the opinion of the handwriting expert. Further, Section 73 of the Act empowers the Court to compare the admitted and disputed writings for the purpose of forming its own opinion.

On the issue of quashing the complaint filed under Section 138 N.I. Act the Court held that the accused raised the defence that there was no legally enforceable debt and he issued the cheques to help the complainant for purchase of lands. The burden lied upon the accused to rebut the presumption by adducing evidence. The High Court did not keep in view that until the accused discharges his burden, the presumption under Section 139 of N.I. Act will continue to remain. It held that when disputed questions of facts are involved which need to be adjudicated after the parties adduce evidence, the complaint under Section 138 of the N.I. Act ought not to have been quashed by the High Court by taking recourse to Section 482 CrPC. [Keywords: handwriting expert, legally enforceable debt, presumption under Sections 138, 139 NI Act 1881] [Coram: R. Banumathi, A.S. Bopana JJ.]

In Santosh Prasad @ Santosh Kumar v. The State of Bihar, the Court was confronted with a question as to whether it was permissible to convict the accused under Sections 376 and 450 of the IPC, solely on the solitary evidence of the prosecutrix, and whether the evidence of the prosecutrix inspires confidence and is of sterling quality. The Court found that the prosecutrix / witness failed to pass the test of “sterling witness” since there were material factual contradictions in her evidence, and therefore, the conviction was set aside in the absence of any other supporting evidence. [Keywords: solitary evidence of the prosecutrix, sterling witness] [Coram: Ashok Bhushan, M.R. Shah, JJ.]

In The State of Punjab v. Jasbir Singh, the Supreme Court held that upon a reading of Section 340 CrPC, it was clear that it was open for the Court to conduct (or not) a preliminary inquiry into the matter before lodging a complaint in respect of an offence mentioned in Section 195(1)(b). However, the Court found that there were conflicting decisions of the Supreme Court inasmuch as three Judges in Sharad Pawar (2010) 15 SCC 290 did not assign any reason for departing from another three-judge decision in Pritish (2002) 1 SCC 353 as also the Constitution Bench in Iqbal Singh Marwah (2005) 4 SCC 370. Thus, the Court referred the matter before the Chief Justice for the constitution of a larger bench [Keywords: prosecution for contempt] [Coram: Ashok Bhushan, Mohan M. Shantanagoudar, JJ.]

In Rajeev Kourav v. Baisahab and Ors., the Court relied upon Rajendra Singh (2007) 7 SCC 378 to hold that statements of witnesses recorded under Section 161 CrPC being wholly inadmissible in evidence, cannot be taken into consideration by the Court, while adjudicating a petition filed under Section 482 CrPC. The Court further held that the High Court ought not to have quashed the proceedings, scuttling a full-fledged trial in which the accused would have a fair opportunity to prove their innocence. [Keywords: quashing petition, statement before police] [Coram: L. Nageswara Rao, Deepak Gupta, JJ.]

Consumer Law

In Canara Bank v. M/s United India Insurance Co. Ltd., the Court noted that unambiguous terms of the tripartite agreement between the Bank, farmers and the Cold Storage bound the Cold Storage to store the goods, to indemnify the produce of farmers, to cover the risk and cover the loan amount. The Court observed that the insurance policy taken by the Cold Storage has to be taken at the cost of the second party, i.e. farmers and therefore, it upheld the finding of the NCDRC that farmers are consumers under Section 2(1)(d)(ii) of the Consumer Protection Act 1986 as they are beneficiaries under the policy. It held that for the farmers to be consumers under the Act, there was no requirement of a privity of contract between the insurance company and the farmers. [Keywords: privity of contract, consumer] [Coram: S. Abdul Nazeer, Deepak Gupta JJ.]

In Hemiben Ladhabhai Bhanderi v. Saurashtra Gramin Bank, the Supreme Court. held that there was concurrent finding of facts insofar as the deficiency of service on part of the Bank is concerned in failing to forward the application form to the insurer and in deducting the insurance premium on time. The Court while holding that there was no justification for the NCDRC to reduce the award of compensation against the Bank observed that had the Bank not been deficient in the performance of its services, the deceased would have been entitled to an insurance cover in the same terms as was provided by the insurer to all other account holders desirous of obtaining insurance. [Keywords: deficiency of Service] [Coram: D. Y. Chandrachud, Hemant Gupta JJ.]

In Sobha Hibiscus Condominium v. MD, M/s Sobha Developers Ltd. & Anr., In Civil Appeal No. 1118 of 2016, the issue was as regards the locus standi of the Appellant Condominium to file the complaint before the NCDRC, since it was neither a ‘consumer’, nor a ‘recognised consumer association’ within the meaning of Section 12 of the Consumer Protection Act, 1986. It was held that on a conjoint reading of Section 3(j) read with Section 13 of the Karnataka Apartment Ownership Act, 1972 and Bye-Laws there under, and Sections 2(1)(d) and 12(1) of the 1986 Act, the appellant cannot be said to be a ‘voluntary’ registered association for the purposes of filing a complaint under the 1986 Act, and was not ‘consumer’ as defined under Section 2(1)(d). In Civil Appeal Nos. 9961-9962 of 2017 and 9959-9960 of 2017, the Court held that it is clear from a reading of Section 12(1)(b) read with the Explanation to Section 12, that the finding of the NCDRC that recognised consumer association can file complaint on behalf of single consumer, but not on behalf of several consumers in one complaint, is erroneous. [Keywords: maintainability of complaint, locus standi, flat owners’ association, recognized consumer association] [Coram: Mohan M. Shantanagoudar, R. Subhash Reddy, JJ.]

In Bank of India v. M/s Brindavan Agro Industries Pvt. Ltd., the Supreme Court overruled the orders of the SCDRC and NCDRC on the ground of patent illegality. In the present case, the Consumer sought a refund of the amounts debited by the Bank in lieu of processing fees so as to ascertain the credit worthiness of the Respondent on account of suffering losses, owing to the alleged delay of the Bank in sanctioning the credit facilities leading to the Respondent/Consumer availing the credit facilities from other banks at better rates. It pleaded ignorance regarding the Bank’s policy about additional processing charges i.e. charges for appraisal, TEV etc. Allowing the appeal, the Court held that the Consumer was admittedly an old customer of the Bank and it was inconceivable that it did not know of the Bank’s procedure in terms of its circulars when its loan requirement was over INR 40 crores. [Keywords: processing charges, loan sanction] [Coram: D.Y. Chandrachud, Hemant Gupta, JJ.]

Labour law, Service Law and Administrative Law

In Oil and Natural Gas Corporation v. Krishan Gopal & Ors. the Court observed that the decision in Oil and Natural Gas Corporation Limited v. Petroleum Coal Labour Union, (2015) 6 SCC 484 needed reconsideration more specifically on the following issues:

(i) The interpretation placed on the provisions of clause 2(ii) of the Certified Standing Orders;

(ii) The meaning and content of an unfair labour practice under Section 2(ra) read with Item 10 of the Vth Schedule of the ID Act; and

(iii) The limitations, if any, on the power of the Labour and Industrial Courts to order regularisation in the absence of sanctioned posts.

[Keywords: Regularization of Service; Unfair Labour Practice; Sections 2(ra), 25(T), Item 10 of Schedule V of the Industrial Disputes Act, 1947, Clause 2(ii) of the Certified Standing Orders] [Coram: D Y Chandrachud, Ajay Rastogi JJ.]

In Nitesh Kumar Pandey v. State of M.P., selected candidates to the post of Gram Rojgar Sahayak as per the Guidelines issued by the Madhya Pradesh State Employment Guarantee Parishad were removed from the select list based on the result of the computer efficiency test which was not contemplated as a criteria for the selection under the Guidelines. In a challenge to such removal from the select list by the candidates, the High Court held that the selection method was altered after the process had commenced which is not permissible. In appeal by candidates who had benefitted in the selection process due to the holding of computer efficiency test, the Supreme Court while upholding the impugned decision held that since the scheme applicable to the entire State was made under a common guideline, the alteration of the requirement by prescribing an additional criteria only in respect of one District without such authority do so would not be sustainable. [Keywords: selection to the post of Gram Rojgar Sahayak] [Coram: R. Banumathi, A.S. Bopanna JJ.]

In Shri Govinda Chandra Tiria v. Sibaji Charan Panda, the Court noted the fact that it was at the insistence of Respondent Officer that the department (SSC) absorbed him as Lower Divisional Clerk (LDC) on transfer basis inter alia with terms and conditions that his seniority would be counted from the date of absorption. Respondent No.1 accepted the same. This absorption was never challenged until the seniority list was circulated. The Court while relying on Mrigank Johri & Ors. v. Union of India & Ors. (2017) 8 SCC 256 set aside the impugned judgment and held that where the conditions were categorically stated that the absorption would be “deemed to be new recruitment” and the previous service would be counted for all purposes “except his or her seniority in the cadre”, Respondent Officer having accepted it without any demur, the seniority list prepared as a sequitur to the terms and conditions of the absorption could not be faulted with. [Keywords: Staff Selection Commission, LDC, transfer on deputation basis, fixation of seniority] [Coram: Sanjay Kishan Kaul, K.M. Joseph JJ.]

In Parmeshwar Nanda v. State of Jharkhand, the Court while upholding the impugned judgment held that since the appellants were appointed under a specific scheme which was neither a permanent establishment of the Government nor was the appointment under the project/scheme a part of any cadre of the State Government and furthermore, the appointment of the appellants under the project was not in a pay scale nor was it sanctioned without a time limit, all the conditions of Rule 58 of the Bihar Pension Rules were not satisfied to make the appellant eligible for pensionary benefits. It further held that since appellants were never appointed either on a temporary basis or on permanent basis, the benefit of the Circular dated 12.08.1969 to grant pensionary benefit to a temporary government servant could not be claimed by the appellants either. [Keywords: Pensionary benefits Rule 59 of Bihar Pension Rules 1950 and Circular dated 12.08.1969] [Coram: L. Nageshwar Rao, Hemant Gupta JJ.]

In Md. Ali Imam v. State of Bihar, the Court reiterated that even if no particular reasons are given for the cut-off date by the Government in a Benefit Scheme, the choice of cut-off date cannot be held to be arbitrary unless it is shown to be totally capricious or whimsical. [Keywords: Benefit Scheme, Cut-off Date] [Coram: Sanjay Kishan Kaul, K M Joseph JJ.]

In Brahma Singh v. Union of India, the Court held that the services of the officers and employees of the Supreme Court Legal Services Authority (SCLSA) were governed by Section 3A of the Legal Services Authority Act 1987 and after 2000, they are governed by the Supreme Court Legal Services Committee Regulations 2000. They have been rendering service uninterruptedly as employees of the Supreme Court Legal Services Committee (SCLSC) and no distinction can be made between the service prior to 03.07.2000 and the service rendered thereafter. The entire service rendered by the petitioners in the Supreme Court Legal Aid Committee and the SCLSC shall be treated as qualifying service for the purpose of pension and shall be taken into consideration for calculating their retiral benefits. [Keywords: pension, Determination of service period as qualifying period] [Coram: L. Nageswara Rao, Deepak Gupta JJ.]

In M/s Bharat Coking Coal Limited v. Shyam Kishore Singh, the Court found that as on the date of joining and as also when the respondent employee had an opportunity to fill up the Nomination Form and rectify the defect if any, he had indicated a particular date of birth and had further reiterated the same when Provident Fund Nomination Form was filled. It is only after more than 30 years from the date of his joining service, for the first time he had made the representation for correction in his date of birth. Further the respondent did not avail the judicial remedy immediately thereafter, before retirement. The Court while relying on a well established principle that if a particular date of birth is entered in the service register, a change sought cannot be entertained at the very end of service after accepting the same to be correct during entire service, set aside the impugned order of the HC. [Keywords: age proof, correction in Date of Birth entered in Service Register] [Coram: R Banumathi, A S Bopanna JJ.]

In Union of India v. Federation of Self Financed Ayurvedic Colleges Punjab & Ors., the validity of the Notifications issued by the Central Council of Indian Medicine, Central Council of Homeopathy prescribing an all-India National Eligibility cum Entrance Test (NEET) for admission to Homeopathy and Ayurveda Under Graduate courses, and minimum qualifying marks, was called into question. The Central Council had introduced the Indian Medical Central Council (Minimum Standards of Education in Indian Medicine) Amendment Regulations, 2018. Holding that Veterinary Council of India (2000) 1 SCC 750, was squarely applicable, the Court found that Section 22 of the Indian Medical Central Council Act 1970 covers the topic of an all Indian common entrance exam. Therefore, the prescription of NEET, and of the minimum qualifying marks, was upheld for maintaining the standards of education. [Keywords: Homeopathic and Ayush Under Graduate courses, NEET requirement] [Coram: L. Nageswara Rao, Deepak Gupta, JJ.]

In Kerala State Electricity Board v. Principal Sir Syed Institute for Technical Studies & Anr., the question involved the legality of a part of a tariff Notification segregating Self-Financing Educational Institutions (SFEI) from Government run and Government aided private educational institutions, and subjecting the former to a higher category of tariffs. In so deciding, the Court was called upon to pronounce on the scope of Section 62(3) of the Electricity Act 2003, and in particular, the word “purpose” therein. The argument that the ‘purpose’ of both categories of educational institutions is imparting education, and therefore, different tariffs could not be charged, was rejected on the basis that who is serving the ‘purpose’ and for whom such ‘purpose’ is being served have to be factored in. The Notification was upheld on a finding that the purpose of SFEIs could be differentiated from the Government run and Government aided private educational institutions [Keywords: discrimination in tariffs] [Coram: Deepak Gupta, Aniruddha Bose, JJ.]

In Dheeraj Mor v. Hon’ble High Court of Delhi, the three-Judge Bench decided a reference from a batch of cases where the Petitioners were in judicial service. The Petitioners sought to argue that if a candidate had completed seven years of practice as an advocate before joining judicial service, or combined with service as judicial officer, such candidate is eligible under the direct recruitment quota earmarked for the Advocates, notwithstanding that such candidate was in judicial service on the date of such application or appointment. The reference was answered as follows:

i. The members in the judicial service can be appointed as District Judges by way of promotion or limited competitive examination.

ii. The Governor of a State is the authority for the purpose of appointment, promotion, posting and transfer, the eligibility is governed by the Rules framed under Articles 234 and 235.

iii. Under Article 232(2), an Advocate with 7 years of practice can be appointed as District Judge by way of direct recruitment in case he is not already in judicial service.

iv. An Advocate has to be continuing in practice for not less than 7 years as on the cut­off date and at the time of appointment as District Judge. Judicial officers having 7 years’ experience of practice before they joined the service or 7 years as lawyer and member of judiciary, are not eligible to apply for direct recruitment as a District Judge.

v. The rules framed by the High Court prohibiting judicial officers from staking claim to the post of District Judge against the posts reserved for Advocates by way of direct recruitment, is not ultra vires to Articles 14, 16 and 233.

vi. The decision in Vijay Kumar Mishra (2016) 9 SCC 313 providing eligibility, of judicial officer to compete as against the post of District Judge by way of direct recruitment, was overruled.

[Keywords: Article 233, Vijay Kumar Mishra, eligibility for direct recruitment for District Judges] [Coram: Arun Mishra, Vineet Saran, S. Ravindra Bhat, JJ. (concurring opinion)]

In Dr. Hira Lal v. State of Bihar & Ors., the Court was confronted with a question as to whether the State of Bihar was justified in withholding 10% pension and full gratuity of the Appellant on the ground of pending criminal proceedings. It was held that pension is ‘property’ within the meaning of Article 300A of the Constitution, and cannot be taken away by mere executive instructions. Withholding of 10% pension from the date of superannuation till 19.07.2012 (i.e., the date on which Rule 43(c) was inserted under Bihar Pension Rules empowering State to legally withhold 10%), and full gratuity amount, was held illegal. However, withholding of 10% pension and gratuity was held permissible from 19.07.2012, subject to the outcome of the criminal proceedings. [Keywords: Withholding of pension and gratuity] [Coram: U.U. Lalit, Indu Malhotra, JJ.]

In Gelus Ram Sahu & Ors. v. Dr. Surendra Kumar Singh & Ors., the High Court had allowed the Writ Petition filed by the Respondent seeking a declaration that a doctorate is an essential qualification for the post of Principal at the Polytechnic colleges, and consequently the appointment of the appellants were quashed for want of the said qualification. The Court held that the AICTE Regulations of 2010 do not make doctorates mandatory for appointment to the post of principal, although a doctorate afforded a five years eligibility relaxation for such appointment. It was further held that the AICTE Regulations of 2016 were not clarificatory, and could not be applied retrospectively. [Keywords: AICTE Regulations, Eligibility for appointment as Principal, Retrospectivity of Regulations] [Coram: S.A. Bobde, CJI, B.R. Gavai, Surya Kant, JJ.]

In The Secretary, Ministry of Defence v. Babita Puniya & Ors., the challenge concerned equality of opportunity for women seeking Permanent Commissions (PC) in the Indian Army. Sections 10 and 12 of the Army Act 1950 and various Notifications issued thereunder were analysed, and it was held that the policy decision by the Union Government allowing for the grant of PCs to SSC women officers is accepted subject to the following directions:

a) All serving women officers on SSC shall be considered for the grant of PCs irrespective of any of them having crossed fourteen years or, as the case may be, twenty years of service;

b) The option shall be granted to all women presently in service as SSC officers;

c) Women officers on SSC with more than fourteen years of service who do not opt for being considered for the grant of the PCs will be entitled to continue in service until they attain twenty years of pensionable service;

d) As a one-time measure, the benefit of continuing in service until the attainment of pensionable service shall also apply to all the existing SSC officers with more than fourteen years of service who are not appointed on PC;

e) The expression “in various staff appointments only” in para 5 and “on staff appointments only” in para 6 shall not be enforced;

f) SSC women officers with over twenty years of service who are not granted PC shall retire on pension; and

g) At the stage of opting for the grant of PC, all the choices for specialisation shall be available to women officers on the same terms as for the male SSC officers.

The SSC women officers, who had moved the Delhi High Court by filing the Writ Petitions and those who had retired during the pendency of the proceedings, were held entitled to all consequential benefits including promotion and financial benefits. [Keywords: Equality of opportunity for women seeking Permanent Commissions (PC) in the Indian Army, Sections 10 and 12 of the Army Act 1950] [Coram: D.Y. Chandrachud, Ajay Rastogi, JJ.]

In The State of Karnataka & Anr. v. N. Gangaraj, the issue concerned the legality of Deparment’s order of dismissal of the Respondent from service, under the Prevention of Corruption Act 1998. The Tribunal set aside the said punishment, and the High Court upheld the order of the Tribunal. Relying on S. Sree Rama Rao (AIR 1963 SC 1723), B.C. Chaturvedi (1995) 6 SCC 749, Shashikant S. Patil (2000) 1 SCC 416 and Nemi Chand (2011) 4 SCC 584, the Court held that once the disciplinary authority has agreed with the findings of the enquiry and the appeal before the State Government was also dismissed, the High Court could not interfere with the findings of facts by re-appreciating evidence as if the Courts are the appellate authority [Keywords: Dismissal from service, scope of judicial review] [Coram: S. Abdul Nazeer, Hemant Gupta, JJ.]

In Vinod Ravjibhai Rajput v. State of Gujarat, the Court was considering whether the Appellant was entitled to reinstatement including continuity of service and the benefits flowing therefrom. It was held that the Appellant having been appointed full time Gallery Attendant Group-IV with the approval of the Director, his services could not have been terminated after two years, on the purported ground of a Government policy keeping permanent employees in abeyance. The judgment in Uma Devi (2006) 4 SCC 1 or the Resolution dated 01.05.2007 adopted pursuant thereto, were held to not apply to the Appellant retrospectively. Therefore, the Appellant was directed to be reinstated with continuity of service from the date of initial appointment but without back wages for the period that he had not worked. [Keywords: Reinstatement including continuity of service, back wages, Uma Devi] [Coram: Indira Banerjee, A.S. Bopanna, JJ.]

In Vinod Giri Goswami & Ors. v. The State of Uttarakhand, relying on Direct Recruit Class II Engineering Officer’s Asso. (1990) 2 SCC 715, as considered in Aghore Nath Dey (1993) 3 SCC 371, it was reiterated that where the initial appointment is only ad hoc and not according to Rules, and made as a stop gap arrangement, the officiation in such post cannot be taken into account for determining seniority. Since the promotees in the present case were appointed on ad hoc basis in the year 2004 without following the procedure prescribed under the Uttaranchal Promotion by Selection in Consultation with Public Service Commission (Procedure) Rules 2003, the promotees are not entitled to claim seniority from the dates of initial appointment as Deputy Collectors. [Keywords: Inter se seniority dispute between Direct Recruits and promotees] [Coram: L. Nageswara Rao, Deepak Gupta, JJ.]

In K Sivaraman & Ors. v. P Sathishkumar & Anr., the question was whether the benefit of Workmen’s Compensation (Amendment) Act 2009, deleting the deeming provision in Explanation II which capped the monthly wages of an employee at Rs. 4,000, would also apply to accidents which took place prior to the coming into force of its provisions, i.e., 18.01.2010 and where final adjudication is pending. The Court, relied upon Valsala (1999) 8 SCC 254 and Pratap Narain Singh (1976) 1 SCC 289 to hold that though the Workmen’s Compensation Act 1923 was a beneficial legislation, since the 2009 amendments, while enhancing the compensation confer a benefit upon the employees, impose a corresponding burden on employers to pay a higher rate of compensation, the amendment cannot have retrospective application. [Keywords: Amendment Act 2009– Retrospective or prospective application] [Coram: D.Y. Chandrachud, Ajay Rastogi, JJ.]

In ONGC Employees Mazdoor Sabha v. ED, Basin Manager, ONGC (India) Ltd., the issue concerned as to the date to treat the concerned workmen, who were initially appointed on a term basis for four years, to be on regular appointment. The Court held in the facts of the case that the Corporation must treat the concerned workmen to be in regular employment on and from the date on which the industrial dispute was referred, i.e., 21.12.2004 and grant all actual benefits from the said date till 01.04.2013 [Keywords: Regularisation of appointment to term based employees, Industrial Dispute] [Coram: R.F. Nariman, S. Ravindra Bhat, V. Ramasubramanian, JJ.]

In Arun Kumar Gupta v. State of Jharkhand, the Court dealt with the Petitioners’ ‘washed off theory’ which stipulated that since the Petitioners had been promoted to various higher posts within the judicial hierarchy, their record prior to the promotion will lost its sting and has no value. Culling out relevant case laws on the issue of compulsory retirement in general, and of judicial officers in particular, the Court summarised the law as under:

(i) An order directing compulsory retirement of a judicial officer was not punitive in nature;

(ii) An order directing compulsory retirement of a judicial officer had no civil consequences;

(iii) While considering the case of a judicial officer for compulsory retirement, the entire record of the judicial officer ought to be considered, though the latter and more contemporaneous record must be given more weightage;

(iv) Subsequent promotions do not mean that earlier adverse record cannot be looked into while deciding whether a judicial officer should be compulsorily retired;

(v) The ‘washed off’ theory does not apply in case of judicial officers specially in respect of adverse entries relating to integrity;

(vi) The courts should exercise their power of judicial review with great circumspection and restraint keeping in view the fact that compulsory retirement of a judicial officer is normally directed on the recommendation of a high-powered committee(s) of the High Court.

[Keywords: judicial service, compulsory retirement, Rule 74(b)(ii) of Jharkhand Service Code 2001, Rule 56(j) of Fundamental Rules, Articles 235 and 310 of the Constitution of India, pleasure doctrine, washed off theory] [Coram: L. Nageswara Rao, Deepak Gupta, JJ.]

In Life Insurance Corporation of India v. Mukesh Poonamchand Shah, the Court clarified that the power of suspend the sentence during the pendency of a criminal appeal was not akin to suspension of conviction during the pendency of a criminal appeal. The latter as an exceptional power. The Bench reiterated that there was nothing precluding LIC from taking departmental action to dismiss the employee when only the sentence has been suspended and not conviction. [Keywords: Regulation 39(4) of the Life Insurance Corporation of India (Staff) Regulations 1960, Section 398 CrPC] [Coram: D.Y. Chandrachud, Hemant Gupta, JJ.]

In Shri Maruti Tukaram Bagawe & Others v. The State of Maharashtra, the Court allowed the excess monies paid to the Appellants to be recovered from 04.12.2014 (day on which the State Administrative Tribunal declared that the State Resolution dated 11.09.2008 allowing the recoveries was legal and valid) and not 05.12.2009 (date on which the High Court allowed the Appellants to agitate their rights before the Administrative Tribunal) as the undertaking furnished by the Appellants only stated that if the High Court upheld the Government Resolution dated 11.09.2008, they shall refund the amount received. [Keywords: undertaking, excess payment, recovery] [Coram: Ashok Bhushan, Mohan M. Shantanagoudar, JJ.]

In Brig. Nalin Kumar Bhatia v Union of India and Ors., the question which arose was whether non-empanelment of the Appellant for promotion to the rank of Major General was contrary to the promotion policy. Rejecting the submissions of the Respondent that the Selection Board can recommend non-empanelment of an officer on the basis of their value judgment without reference to the other marks that are allotted to him, the Court held that the Appellant could not have been deprived on the basis of value judgment, and that his non-empanelment for promotion was contrary to the promotion policy. The Court further held that there is no presumption that a decision taken by persons occupying high posts is valid, and that judicial scrutiny of a decision does not depend upon the rank of the decision maker. [Keywords: Non-adherence to the Promotion Policy in denying consideration of promotion to the Appellant] [Coram: L. Nageswara Rao, Hemant Gupta, JJ.]

In Government of India and Ors. v. Sitakant S. Dubhashi and Anr., the issue was whether the Respondent, a participant of Goa Liberation Movement, Phase-II, was entitled for grant of pension under Swatantrata Sainik Samman Pension (SSSP) Scheme, 1980 and whether the cut-off date as fixed in the order dated 17.02.2003, that the applicant should be in receipt of State Pension by 01.08.2002, is a valid condition. The Court held that the extension of the SSSP Scheme by relaxing the Scheme to Goa Liberation Movement Phase-II, by fixing a cut-off for consideration under the Scheme, was permissible. When a benefit is granted in relaxation of Scheme, it is open for the Government to put conditions for eligibility. The mere fact that a person is entitled to a State pension does not ipso facto make him eligible for the SSSP Scheme [Keywords: Claim for pension] [Coram: Ashok Bhushan, Navin Sinha, JJ.]

Constitutional Law

In Mukesh Kumar v. State of Uttarakhand, the Supreme Court set aside the High Court order stating that no mandamus can be issued by the Court to the State to collect quantifiable data relating to adequacy of representation of the Scheduled Castes and Scheduled Tribes (SC & ST) in public services even if the underrepresentation of SC & ST in public services is brought to the notice of the Court.

It further held that “the State Government is not bound to make reservations. There is no fundamental right which inheres in an individual to claim reservation in promotions. No mandamus can be issued by the Court directing the State Government to provide reservations.” It held that Articles 16(4) and 16 (4-A) were enabling provisions and the collection of quantifiable data showing inadequacy of representation of SC & ST in public service was only the sine qua non for providing reservation in promotion, thus the aforesaid collection of data not required when the State Government decided not to provide reservations. [Keywords: Articles 16(4) and 16 (4-A) of the Constitution of India, quantifiable data, reservation in promotion, scheduled tribes] [Coram: L. Nageshwar Rao, Hemant Gupta JJ.]

In Kantaru Rajeevaru v. Indian Young Lawyers Association, a nine-judge bench was constituted to answer in a reference the questions of law framed by a Constitution Bench in review petitions filed against the Sabarimala judgment. A preliminary issue was raised before the nine-judge bench as to whether the Supreme Court can refer questions of law framed in a review petition to a larger bench. The Court while holding that questions of law can be referred to a larger bench in a review petition, construed Order XLVII Rule 1 of the Supreme Court Rules 2013 to hold that there was no limitation for the exercise of power by the Court in review petitions filed against judgments and orders in proceedings other than civil proceeding or criminal proceedings. It held that since the review petitions had arisen from a judgment in a Writ Petition filed under Article 32, the provisions of Order XLVII, Rule 1 of CPC were not applicable.

On the issue of whether a reference can be made only after the grant of review and not in a pending review petition the Court held that reference to a larger bench can be made in any cause or appeal as well as in any ‘other proceeding’ under Order VI Rule 2 of the 2013 Rules. The term ‘proceeding’ is a very comprehensive term and generally speaking, means a prescribed course of action for enforcing a legal right. It is a term giving the widest freedom to a Court of law so that it may do justice to the parties in the case. There cannot be any doubt that the pending review petition falls within the purview of the expression “other proceeding”. It further held that there is no fetter on the exercise of discretion of the Court in referring questions of law to a larger bench in review petitions. Being a superior Court of record, it is for the Supreme Court to consider whether any matter falls within its jurisdiction or not. It held that undoubtedly there is no bar on the exercise of jurisdiction for referring questions of law in a pending review petition. Therefore, the reference cannot be said to be vitiated for lack of jurisdiction. Furthermore, the Court adverted to Article 142 to support the reference. The Court held that the expression ‘cause’ or ‘matter’ under Article 142 would include any proceeding pending in Court and it would cover almost every kind of proceeding pending in this Court including civil or criminal proceedings. As such, the expression ‘cause or matter’ surely covers review petitions without any doubt. Order LV Rule 6 makes it crystal clear that the inherent power of this Court to make such orders as may be necessary for the ends of justice shall not be limited by the Rules. [Keywords: review, reference, questions of law, Sabarimala] [Coram: S. A. Bobde CJI., R. Banumathi, Ashok Bhushan, L. Nageswara Rao, Mohan M. Shantanagoudar, S. Abdul Nazeer, R. Subhash Reddy, B.R. Gavai , Surya Kant JJ.]

In State of Meghalaya v. Melvin Sohlangpiaw, the central issue was whether the criminal case against the Respondent, a tribal from a notified autonomous district, was exclusively triable by the District Council Court, as against the Court of Sessions Judge, having regard to paragraphs 4 and 5 of the Sixth Schedule to the Constitution. The State sought to argue that all of the parties to a suit or case must necessarily belong to Scheduled Tribes within such areas for the District Council Court to have exclusive jurisdiction, and given that a criminal case is always prosecuted by the State, this dispute was not one between two tribals. The Court held that the term “suits and cases” does not preclude criminal cases, and that reference to “suits and cases between the parties all of whom belong to Scheduled Tribes” was in fact to the affected party and the accused party. Therefore, the District Council Court had the exclusive jurisdiction to entertain such a case. [Keywords: Exclusive jurisdiction of the District Council Court to try disputes between tribals in terms of paragraphs 4, 5 of the Sixth Schedule to the Constitution] [Coram: Mohan M. Shantanagoudar, R. Subhash Reddy, JJ.]

Environmental Law, Heritage and Archaeological Conservation

In Sakkubai Etc. Etc. v. State of Karnataka and Ors. Etc. Etc., the issues which arose for consideration were whether the commercial constructions raised in a village declared as one of the “protected areas” under the Mysore Ancient and Historical Monuments and Archaeological Sites and Remains Act 1961, and the demolition notices issued by the Authority under the Hampi World Heritage Area Management Authority Act 2002, were lawful. On the first issue, placing reliance on Section 20(1) of the 1961 Act, it was held that the owners / occupiers of the protected areas could not construct any building or utilize such areas in any manner other than cultivation, without the permission of the State Government. The restrictions on construction under Section 20(1) came into operation from 22.10.1988 itself, which was when the Notification to that effect was issued. Therefore, the construction of huts, hotels and restaurants, and the licenses issued therefor by the Panchayat, were unlawful. On the second issue, it was held that there was a common underlying object between the 1961 Act and the Hampi Act, and therefore, under Sections 11 read with 14(1) of the Hampi Act, the action of the Authority in issuing demolition notices is sustainable. [monument conservation, archaeological sites, heritage conservation] [Coram: Mohan M. Shantanagoudar, R. Subhash Reddy, JJ.]

Insurance Law

In Bharti AXA General Insurance Co. Ltd. v. Priya Paul the Court while relying on United India Insurance Co. Ltd. v. Pushpalaya Printers, (2004) 3 SCC 694 upheld the impugned judgment on the issue that insurer did not exclude gliding activity from the purview of the policy like it excluded other activities. Similarly, the term ‘standard type of aircraft’ could have been defined for the purpose of the policy and in absence of such ambiguity the insurance policy must be construed liberally to benefit the insured in a claim arising out of glider accident. The Court held that the accident was completely covered under the ambit of the policy, since the deceased was travelling in a duly licensed standard type of aircraft and was travelling as a fare paying passenger in a flight of an air charter company which brings him out of the exclusion Clause. [Keywords: Aviation Accident, Smart Personal Accident Individual Insurance Policy] [Coram: Mohan M. Shantanagoudar, R. Subhash Reddy JJ.]

In M/s Baspa Organics Ltd. v. United India Insurance Co. Ltd., it was held that in terms of either Article 3 or 7 of the Petroleum Rules, 1976, the Appellant was required to obtain a license for the purposes of storing Hexane in excess of 20 kilolitres. In the absence of such a license, the Appellant could not have lawfully stored Hexane. Non-disclosure of the non-possession of a license was of a material nature, and constituted a violation of Condition 1 of the Insurance Policy. Therefore, the Court upheld the NCDRC’s affirmation of the repudiation of the claim on this ground. [Keywords: Repudiation of Insurance Claim, suppression of material fact] [Coram: Mohan M. Shantanagoudar, R. Subhash Reddy, JJ.]

In Oriental Insurance Co. Ltd. v. National Bulk Handling Corporation Pvt. Ltd., the Respondent had taken a Fidelity Guarantee Insurance Policy in respect of pledged commodities stored in warehouses. One of the stored commodities was unauthorisedly removed from the godown, and as per the report of the investigating agency, the same happened due to certain acts by the concerned employees of the Respondent itself in connivance with the borrowers. The Court held that the fidelity guarantee was in force during the relevant time, and therefore, it indemnified the Respondent against loss arising from the breach of honesty or fidelity of an employee. Since the Survey Report itself indicated the involvement of the employees of the Respondent, the insurance claim allowed to the Respondent by the National Commission was upheld. [Keywords: unauthorized, Consumer Protection Act 1986] [Coram: Mohan M. Shantanagoudar, R. Subhash Reddy, JJ.]

In Kajal v. Jagdish Chand, the Court held that in motor accident claim petitions, the Court must award just compensation, and, in case, the just compensation is more than the amount claimed, that must be awarded especially where the claimant is a minor. It opined that the courts or the tribunals assessing the compensation in a case of 100% disability, especially where there is mental disability also, should take a liberal view of the matter when awarding compensation. The Court further held that cases where minors, claimants under disability, widows and illiterate victims are involved, the MACT as well the High courts must ensure that investments are made in nationalised banks to get a high rate of interest. It held that only if the appeal is filed after an inordinate delay by the claimants, or the decision of the case has been delayed on account of negligence of the claimant, in such exceptional cases the interest may be awarded from a later date. However, while doing so, the tribunals/High Courts must give reasons why interest is not being paid from the date of filing of the petition. [Keywords: just Compensation, Motor Accident Claims, 100% Disability] [Coram: L. Nageswara Rao, Deepak Gupta JJ.]

In M/s Rajankumar and Brothers (Impex) v. Oriental Insurance Company Ltd., the Court while upholding the decision of NCDRC held that where a vessel was not classed with a recognized classification society in terms of the ICC (Institute Classification Clause), any loss incurred by the cargo owner would be excluded from the scope of the insurance cover. Further, the cargo owner was required to immediately notify the underwriters and negotiate an additional premium if the vessel was not classed in accordance with the ICC. The Court held that in the instant case neither was the subject vessel in compliance with the ICC clause, nor had the Appellant Cargo Owner given prompt notification to the Respondent Insurer about such non-compliance. Consequently, the Appellant was found committed breach of the warranty contained in the Marine Insurance Policy requiring the subject vessel to be classed in accordance with the ICC and such a breach of warranty discharged the liability of the insurer under Section 35(3) of the Marine Insurance Act 1963. On the issue of the waiver of breach of warranty stipulated in the ICC, the Court held that Respondent Insurer through its conduct or in any of its communications did not waive the requirement of compliance of the subject vessel with the classification requirement of the ICC. [Keywords: Marine Insurance, Warranty, Breach and Waiver, Sections 35 and 36 of the Marine Insurance Act 1963] [Coram: Mohan M. Shantanagoudar, K.M. Joseph JJ.]

In State Bank of India v. New India Assurance Company Limited, the borrower entered into a loan agreement with the Bank. Under the terms of the agreement the assets of borrower were charged to the Bank was covered by insurance. On a claim made by the borrower against the insurer due to break of a fire at its premises, SCDRC directed the Bank to forward the claim to the insured without fastening any liability upon it. The insurer was directed to process the claim. NCDRC in an appeal filed by the insurer held that the Bank was liable to pay the claim along with interest. The Supreme Court in appeal by the Bank held that the borrower and the Bank having accepted the order of SCDRC and both having entered into a One Time Settlement later to close the loan account in terms of the Settlement, there was no justification for NCDRC to foist any liability on the Bank. [Keywords: Loan, Insurance, Liability to pay] [Coram: D Y Chandrachud, Indu Malhotra JJ.]

Specific Performance, Contract, Code of Civil Procedure, Transfer of Property, Limitation, Court Fee

In Vundavalli Ratna Manikyam v. V.P.P.R.N. Prasada Rao, the Court upheld the impugned judgment on the ground that execution of the agreement to sell as well as handing over the possession of the property was admitted by the original vendor. In the facts and circumstances of the case it also confirmed the finding that the suit for specific performance of agreement to sell was not barred by limitation under Article 54 of the Limitation Act 1963 but was within the limitation period under Article 113 of the Act. [Keywords: Specific Performance of Agreement to Sell, Articles 54, 113 of Limitation Act] [Coram: Arun Mishra, Vineet Saran, M.R. Shah JJ.]

In C.S. Venkatesh v. A.S.C. Murthy (D) by LRS. & Ors. the Court held that since the sale deed and the deed of reconveyance were executed on the same day, the transaction cannot be a mortgage by way of conditional sale in view of the express provisions contained in Section 58(c) of the Transfer of Property Act, 1882. It further held that perusal of all the clauses of the sale deed and the evidence on record would clearly show that the intention of the parties was to make the transaction a sale. On the question of whether the plaintiff was ready and willing to perform his part of the contract the Court held that to decide the same, it must take into consideration the conduct of the plaintiff prior, and subsequent to the filing of the suit along with other attending circumstances. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. The Court while setting aside the impugned judgment held that the plaintiff was not ready and willing to perform his part of the contract. [Keywords: mortgage, readiness and willingness] [Coram: S. Abdul Nazeer, Deepak Gupta JJ.]

In Atma Ram v. Charanjit Singh, the Court held that the conduct of a plaintiff was very crucial in a suit for specific performance. A person who issues a legal notice claiming readiness and willingness, but who institutes a suit only after three years and that too only with a prayer for a mandatory injunction carrying a fixed court fee relatable only to the said relief and chose to pay proper court fee after being confronted with an application for the dismissal of the suit, will not be entitled to the discretionary relief of specific performance under Section 20 of the Specific Relief Act 1963. [Keywords: readiness and willingness] [Coram: N.V. Ramana, V. Ramasubramanian JJ.]

In Mohammad Yusuf v. Rajkumar, the Court while deciding whether a compromise decree in a declaratory suit was required to be registered under Section 17 of the Registration Act 1908 or not, set aside the impugned judgment while holding that the compromise decree was with regard to property, which was subject matter of the suit, hence not covered by exclusionary clause of Section 17(2)(vi) of the Act but covered by the main exception under Section 17(2)(vi), i.e., “any decree or order of a Court”. It further held that when registration of an instrument as required by Section 17(1)(b) is specifically excluded by Section 17(2)(vi) by providing that nothing in clause (b) and (c) of sub-section (1) applies to any decree or order of the Court, the compromise decree did not require registration. [Keywords: compromise decree] [Coram: Ashok Bhushan, M R Shah JJ.]

In Agra Diocesan Trust Association v. Anil David & Ors., the issue was with respect to valuation for the purposes of court fee. Since the Plaintiff sought, in addition to a declaration, the decrees of cancellation, the question arose as to what the correct value for the purposes of court fee was. Taking into account Section 7(iv-A) of the UP Court Fees Act 1870, and the Explanation thereto, the Court held that there was no compulsion for the Plaintiff to, at the stage of filing the suit, prove or establish the claim that the suit lands were revenue paying, and the details of such revenue paid. The question of what is the market value, based on the revenue payable, would be an issue to be tried in the suit. Therefore, the valuation on the basis of revenue, which according to the Plaintiff was payable, was correct. [Keywords: undervaluation of suit, insufficient court fees] [Coram: Arun Mishra, M.R. Shah, S. Ravindra Bhat, JJ.]

In The Idol of Sri Renganathaswamy v. PK Thoppulan Chettiar, Ramanuja Koodam AnandhanaTrust, the Court was considering whether the Deed of Settlement of 1901, prohibiting the future sale or mortgage of the suit property, created a specific endowment, regulated by the Tamil Nadu Hindu Religious and Charitable Endowments Act 1959. Firstly, it was held that the Deed of Settlement states that the charity is to be carried for the benefit of the ‘devotees’ who visit during certain Hindu festivals. The charity benefits the public, since ‘devotees’ as a class of beneficiaries are not definitive, and therefore, the Respondent Trust is a Public Trust. Secondly, applying Thulasiraman (2019) 8 SCC 689, it was held that where the money or property is endowed for the performance of a religious charity, a “specific endowment”, as defined under Section 6(19), is created. The said specific endowment was held to be an absolute endowment in favour of the ‘religious charity’, and therefore, the provisions of the 1959 Act were held applicable. [Keywords: Tamil Nadu Hindu Religious and Charitable Endowments Act 1959] [Coram: D.Y. Chandrachud, Ajay Rastogi, JJ.]

In Suresh Chand and Anr. v. Suresh Chander (D) Thr LRs & Ors., the issue was whether the right of pre-emption was available to a person named Beni Prasad, who was alleged to be a joint owner in possession of the disputed courtyard, which was sought to be sold by his brother to one Devicharan. This was in the context of Rajasthan Pre-emption Act 1966. It was held that in view of Section 5(1)(c), a right of pre-emption does not accrue, on a transfer to any person mentioned in Section 6, to any person who has an equal or inferior right of pre-emption, but only if the claimant had a superior right. Relying on Section 6(3), which stated that even among persons of the same class, the nearer in relationship to the person whose property is transferred excludes the more remote, it was held that Devicharan’s right under Section 6(ii) was subject to a superior right of Beni Prasad by virtue of Section 6(3). [Keywords: Pre-emption] [Coram: D.Y. Chandrachud, Ajay Rastogi, JJ.]

In Assistant Engineer, Ajmer Vidyut Vitran Nigam Ltd. & Anr. v. Rahamatullah Khan alias Rahamjulla, the issue was as regards the meaning ascribed to the term ‘first due’ in Section 56(2) of the Electricity Act 2003, and the period of limitation in case of a wrong billing tariff on account of a mistake. The Court held that by virtue of Section 17(1)(c) of the Limitation Act 1963, the period of limitation would commence from the date of discovery of mistake. Section 56(2) did not preclude the licensee company from raising an additional or supplementary demand after the expiry of limitation period in case of a bona fide error. However, that did not empower it to take recourse to the coercive measure of disconnection of electricity. [Keywords: first due, limitation] [Coram: U.U. Lalit, Indu Malhotra, JJ.]

In C. Doddanarayana Reddy (Dead) by LRs & Ors. v. C. Jayarama Reddy (Dead) by LRs & Ors., the question was as regards the proof of date of birth of the Plaintiff as on the School Leaving Certificate. Whereas the Trial Court and the First Appellate Court disbelieved the said document, the High Court, in second appeal, reversed such findings. Relying on Karnataka Board of Wakf (1999) 6 SCC 343, Kondiba Dagadu Kadam (1999) 3 SCC 722 and Shiv Dayal (2019) 8 SCC 637, it was held that in the second appeal, the High Court was bound by the inferences drawn by the lower appellate court and it could not re-appreciate the evidence, and that illegality on account of alleged improper consideration does not give rise to a substantial question of law. [Keywords: Reversal of concurrent findings in Second Appeal, Substantial Question of Law] [Coram: S. Abdul Nazeer, Hemant Gupta, JJ.]

In M/s Z. Engineers Construction Pvt. Ltd. & Anr. v. Bipin Bihari Behera & Ors., the issue pertained to deficiency in stamp duty of a power of attorney, in an application filed under Order XIII Rule 8 of the CPC. The Trial Court as well as the High Court found on the bare reading of the power of attorney and observed that since it is a registered document, therefore, it is properly stamped. The Court remanded the matter to the trial court since the question whether possession was transferred at the time or after execution of power of attorney, was required to be adjudicated after the evidence was led, and not merely on the basis of recitals in the power of attorney, in terms of the Indian Stamp (Orissa Amendment) Act 2001. [Keywords: Admissibility of document – Deficiency in Stamp Duty of power of Attorney] [Coram: S. Abdul Nazeer, Hemant Gupta, JJ.]

In Malluru Mallappa (D) Thr. LRs. v. Kuruvathappa and Ors., the issue was whether the High Court was correct in summarily upholding the decree passed by the Civil Court in a suit for specific performance. Relying upon Vinod Kumar (2015) 1 SCC 391 and Shasidhar (2015) 11 CC 269, it was held that the first appellate court, even while affirming the judgment of the Trial Court, is required to comply with the requirement of Order XLI Rule 31 of the CPC, setting out the points for determination, record the decision thereon and give its own reasons, and non-observance of this requirement leads to infirmity in the judgment of the first appellate court. Since the High Court had neither appreciated evidence, nor passed a reasoned order, the matter was remanded to the High Court for fresh disposal. [Keywords: First appeal under Order XLI Rule 31 CPC] [Coram: S. Abdul Nazeer, Sanjeev Khanna, JJ.]

In M/s Zee Telefilms Limited v. Suresh Productions and Others, the Supreme Court dismissed the appeal by stating that there was no question of the limitation period running our as cause of action to a plaintiff to file a suit accrues when ‘there is a clear and unequivocal threat to infringe a right’. On facts, it was stated that the plaintiff assigned its right for 9 years in 1994 and hence could not have claimed a cause of action till 2003. [Keywords: limitation, cause of action] [Coram: Ashok Bhushan, Navin Sinha, JJ.]

In Sridhar & Anr. v. N. Revanna & Ors., the question before the Court was whether a condition in a gift deed, that the donee or his younger brothers who may be born thereafter, shall not be eligible to alienate the property, was void. Relying on Section 10 of the Transfer of Property Act 1882, the Court held that such a condition or limitation in the gift deed, restraining the transferee or any person claiming under him from disposing of his interest in the property, was void. Reliance on the judgments in Brij Devi (AIR 1939 All 221) and Prem Kali 2016 (116) ALR 794, on the same issue, was upheld. Further, Section 13 of the Transfer of Property Act 1882, was held inapplicable to the facts since the gift was not made in favour of any unborn person, but in favour of the minor grandson, who was five years old. [Keywords: Sections 10 and 13 of the Transfer of Property Act 1882] [Coram: Ashok Bhushan, Navin Sinha, JJ.]

Practice and Procedure

In District Bar Association, Dehradun through its Secretary v. Ishwar Shandilya and Others, the Supreme Court lamented that despite its directions in Ex. Capt. Harish Uppal (2003) 2 SCC 45, Common Cause (2006) 9 SCC 295, Krishnakant Tamrakar (2018) 17 SCC 27, strikes were continued unabated by the Bar in various states and the Bar Councils were not taking any action whatsoever. Refuting the Petitioner’s argument of strike being embodied in Article 19(1)(a), the Court stated that such a right could not exercised at the cost of the litigants and/or justice delivery, especially when speedy justice was guaranteed under Articles 14 and 21. [Keywords: contempt of court, lawyers’ strike, bar council, right to strike, speedy justice] [Coram: Arun Mishra, M.R. Shah, JJ.]

In Canara Bank v. P. Selathal and Others etc. etc., the Supreme Court had to answer as whether in light of Sections 18, 19 and 20 of the RDDBFI Act, the plaintiffs/subsequent purchasers’ suits challenging the DRAT’s orders ought to have been rejected under Order 7 Rule 11(d). In the present case, the plaintiffs (subsequent purchasers) filed a suit praying that the DRT and DRAT’s orders be declared as non est which were passed against the vendor (who sold the properties to the subsequent purchasers and stood as guarantor to the principal borrowers), principal borrowers and in favour of the bank. The Court allowed the appeal and overturned the orders of the courts below stating that the highly belated suit (without any adequate reasons stated for the delay) pleading fraud was instituted only with a view to challenge the DRAT/DRT order on the ground even though the allegation was levelled against the principal borrower by the vendor and not in re the guarantee deed. [Keywords: Order 7 Rule 11(d) of the Code of Civil Procedure 1908, RDDBFI Act, fraud, cause of action] [Coram: Uday Umesh Lalit, Indira Banerjee, M.R. Shah, JJ.]

Family Law

In Kalindi Damodar Garde (D) by LRs. v. Manohar Laxman Kulkarni (D) by LRs., the issue was whether the sons of the adoptee born before adoption were entitled to inherit the property of the adoptee in the adoptive family after his death. The Court held that the Indian Succession Act 1956 would be applicable in terms of its overriding effect under Section 4. The Court while upholding the impugned judgment held that the provisions of the Act do not make any distinction between the son born to a father prior or after adoption of his father and that there is no provision which bars the natural born son, who are agnates and class-I heirs under the Act, to inherit the property of his natural father. [Keywords: Rights of a natural son born from an adoptee father, the Hindu Succession Act 1956] [Coram: L. Nageshwar Rao , Hemant Gupta JJ.]

In Krishnaveni Rai v. Pankaj Rai & Anr., the question was whether the Appellant could have been denied maintenance under Section 125 CrPC on the ground that her marriage was a nullity, since such marriage had taken place while an appeal against the decree of dissolution of marriage with her first husband was still pending. After considering Sections 5, 11 and 15 of the Hindu Marriage Act 1955, it was held that when a marriage has been dissolved by a decree of divorce, and there is no right of appeal, or the time for appealing has expired without the appeal having been preferred, or an appeal has been presented by dismissed, it shall be lawful for either party to marry again. Had it been the legislative intent that a marriage during the pendency of an appeal is void, Section 11 would have expressly provided so. Accordingly, the application under Section 125 CrPC was held maintainable. [Keywords: Sections 5, 11, 15 of the Hindu Marriage Act 1955, nullity of marriage] [Coram: Indira Banerjee, M.R. Shah, JJ.]

In Sanjeev Kapoor v. Chandana Kapoor & Ors., the issue concerned the power of the District Judge, Family Court under Section 362 Cr.P.C. to set aside, alter or review an earlier order passed by that Family Court on an application filed under Section 125 Cr.P.C. It was held that Section 125(1) uses the expression “as the Magistrate may from time to time direct”, and therefore, the Magistrate does not become functus officio after passing an order under Section 125. In fact, by Section 125(5), the Magistrate has been expressly empowered to cancel an order in certain conditions. Similarly, under Section 127(2), the Magistrate is also empowered to cancel or vary an order under Section 125. Therefore, the subsequent order passed by the Family Court reviving the maintenance application of the wife, by setting aside the earlier order passed on settlement, is not hit by the embargo contained in Section 362. [Keywords: Power to review an order passed under Section 125, Revival of the application for maintenance] [Coram: Ashok Bhushan, R. Subhash Reddy., JJ.]

In Soumitra Kumar Nahar v. Parul Nahar, it was held that the Courts should decide the issue of custody on a paramount consideration which is in the best interest of the child. Even if there is breakdown of marriage, it does not signify the end of parental responsibility. In the circumstances, the Court maintained the direction that both the children be placed in a boarding school since it was not in their interest to continue with either parent. [Keywords: Custody of children, welfare of the child is paramount consideration] [Coram: A.M. Khanwilkar, Ajay Rastogi, JJ. ]

Land Ceiling, Town Planning, Rent Control and Tenancy

In Sitabai Shantaram Talawnekar & Others v. Custodian of Evacuee Property & Others, the Court allowed the appeal stating that an alleged oral compromise could not have been the basis for the statutory authorities to hold that the second Respondent [private respondent] was a tenant without examining the provisions of the Goa, Daman and Diu Agricultural Tenancy Act 1964 as well as the Goa Administration of Evacuee Property (Amendment) Act 1989. [Keywords: tenancy, Goa, Daman and Diu Agricultural Tenancy Act 1964 as well as the Goa Administration of Evacuee Property (Amendment) Act 1989] [Coram: L. Nageswara Rao, R. Subhash Reddy, JJ.]

In Vithaldas Jagannath Khatri (Dead) Through LRs. & Ors. v. The State of Maharashtra, Revenue & Forest Department & Ors., a three-judge Bench was called upon to resolve a difference of opinion between two learned Judges of the Court. The issue was whether transfers or partitions of land held by a family, made in anticipation of or in order to avoid the 1972 Amendment to the Maharashtra Agricultural Lands (Ceiling on Holdings) Act 1961, were valid. The Court held that such transfers were to be ignored in calculating ceiling limits under the Act. The Amending Act made 26.09.1970 to be the cut-off date after which such transfers became suspect. It held that the 1961 Act did not declare such transfers to be void, but if a bona fide transfer or partition was in fact effected after the cut-off date, the person affected would be out of the clutches of Sections 10 or 11. It further held that the Collector has the jurisdiction under Section 13 to state that a partition deed entered into after the cut-off date has been suppressed, but such jurisdiction does not extend to conducting an enquiry as to whether such partition deed is or is not a sham document. [Keywords: land Ceiling] [Coram: R.F. Nariman, S. Ravindra Bhat, V. Ramasubramanian, JJ.

Insolvency

In Rajendra K. Bhutta v. Maharashtra Housing and Area Development Authority & Anr., the issue involved the correct interpretation of Section 14(1)(d) of the Insolvency and Bankruptcy Code 2016. The Developer was the Corporate Debtor. The Court first held that if there is any clash between the Maharashtra Housing and Area Development Act 1976 and the Code, on the plain terms of Section 238 of the Code, the Code must prevail. Secondly, the expression “occupied by” would mean being in actual possession of or being actually used by, as against the expression “possession”, which would connote constructive or actual possession. Since the Agreement granted a license to the Developer to enter upon the property to do all things mentioned in it, it is obvious that after such entry, the property would be “occupied by” the developer. Therefore, the bar of Section 14(1)(d) would apply to such property. [Keywords: inconsistency between state legislation and the Code] [Coram: R.F. Nariman, S. Ravindra Bhat, V. Ramasubramanian, JJ.]

In Anuj Jain Interim Resolution Professional For Jaypee Infratech Limited v. Axis Bank Limited Etc., the Supreme Court was asked to answer as to whether Jaypee Infrastructure Limited’s (JIL) act of creating a security interest by mortgaging properties in favour of the lenders of its holding company Jaypee Associates Limited (JAL) was liable to be avoided as being preferential under Section 43 of the Insolvency and Bankruptcy Code, 2016 (‘IBC’). Secondly, the Supreme Court was asked to ascertain as to whether JAL’s lenders could qualify as financial creditors vis-à-vis JIL. In an elaborate 174 page judgment, the Court summarized its findings as follows:

1. Section 43 of the IBC, on a purposive interpretation, was violated as the transactions had been of transfers for the benefit of JAL, who is a related party of the corporate debtor JIL as also its creditor, surety by virtue of antecedent operational debts as also other facilities extended by it. JIL’s acts put JAL in a beneficial position than it would have been in the event of distribution of assets being made in accordance with Section 53 of the Code. Thus, the corporate debtor JIL has given a preference in the manner laid down in sub-section (2) of Section 43 of the Code.

2. The impugned transactions in question had been of deemed preference to related party JAL by the corporate debtor JIL during the look-back period of two years and have rightly been held covered within the period envisaged by sub-section (4) of Section 43 of the Code. The look-back period would be counted from date of commencement of insolvency.

3. If a corporate debtor has given its property in mortgage to secure the debts of a third party, it may lead to a mortgage debt and, therefore, it may fall within the definition of ‘debt’ under Section 3(10) of the Code. However, it would remain a debt alone and not a ‘financial debt’ under Section 5(8) of the Code.

4. JAL’s lenders, on the strength of the mortgages in question, may fall in the category of secured creditors, but such mortgages being neither towards any loan, facility or advance to the corporate debtor nor towards protecting any facility or security of the corporate debtor, it cannot be said that the corporate debtor owes them any ‘financial debt’ within the meaning of Section 5(8) of the Code.

[for a more detailed discussion on the judgment, please visit

https://www.barandbench.com/news/litigation/anuj-jain-irp-for-jaypee-infratech-vs-axis-bank-clearing-the-air-qua-preferential-transactions-and-third-party-mortgages-under-ibc]

[Keywords: preferential transactions, third party mortgages, statutory interpretation, purposive interpretation, UNCITRAL Legislative Guide on Insolvency Law, preferential transactions, “relevant time”, Sections 3(11), 5(7), 5(8), 25, 43, 44 of the IBC 2016, construction of a deeming fiction, look back period, Section 126 of the Indian Contract Act, financial debt, contract of guarantee, Section 58 of the Transfer of Property Act, ‘means and includes’, inclusive and exhaustive definitions, ‘or’ and ‘and’] [Coram: A.M. Khanwilkar, Dinesh Maheshwari, JJ.]

Taxation

In Maruti Suzuki India Ltd. v. Commissioner of Income Tax, Delhi, the Assessee Company was engaged in manufacturing and sale of various cars for which it acquired excisable raw materials and inputs. The assessee had also been taking benefit of MODVAT credit on the raw material and inputs used in the manufacturing. In return, the assessee claimed deduction under Section 43B of Central Excise Act 1944 for an amount which was left as unutilized MODVAT credit. The Assessing Officer disallowed the deductions claimed which was upheld throughout till the High Court. In appeal the Supreme Court while upholding the impugned order held that the appellant was not an assessee within the meaning of the Act with reference to raw materials and inputs manufactured by the entities from which the appellant had purchased the raw materials and inputs as the Excise Duty was leviable on the manufacture of raw materials and inputs. It further held that the Excise Duty leviable on the appellant on manufacture of vehicles was already adjusted in the concerned Assessment Year from the credit of Excise Duty under the MODVAT scheme. The unutilised credit in the MODVAT scheme cannot be treated as sum actually paid by the appellant in terms of Section 43B to be eligible for the claim of deduction. [Keywords: R.2(3) of Central Excise Rules 1944, Section 43B of Central Excise Act 1944, Deductions] [Coram: Ashok Bhushan, Navin Sinha JJ.]

In M/s Oudh Sugar Mills Ltd. v. UOI, the appellant sought parity to be put in the same zone with other sugar factories for fixation of price for levy sugar. The Court held that the other units were transferred to a different zone on merits adjudged by the State Government and BICP (Bureau of Industrial Cost & Prices) and levy prices are fixed for zones and not for each factory. Merely because there was a difference in price in two different zones, the appellant cannot claim, as a matter of right that its unit was to be placed in the other zone during the relevant crushing years. It further held that the price of levy sugar was fixed by the Central Government, having regard to various factors, including the basis of basic–cost schedules drawn and recommended by the expert body. The conclusions reached by the Central Government in exercise of statutory power cannot be said to be either discriminatory or unreasonable. [Keywords: fixation of price for levy sugar in different zones, Essential Commodities Act 1955] [Coram: Mohan M. Shantanagoudar , R. Subhash Reddy JJ.]

In M/s Ananda Social and Educational Trust v. CIT, the issue was whether a newly registered Trust is entitled to registration under Section 12AA of the Income Tax Act 1961 on the basis of its objects, without any activity having been undertaken. Answering the issue in the affirmative, it was held that since Section 12AA pertains to registration of the Trust and not to assess what a Trust has actually done, the term ‘activities’ in the provision includes ‘proposed activities’. Therefore, the Commissioner is bound to consider whether the objects of the Trust, and the activities which it proposed to carry on, are in line with those Objects. [Keywords: objects of trust, Section 12AA] [Coram: S.A. Bobde, CJI, B.R. Gavai, Surya Kant, JJ.]

Electricity

In Maharashtra State Electricity Distribution Co. Ltd. v. Union of India and Other, the Court set aside the orders of the Maharashtra State Electricity Commission as well as APTEL on the ground the circulars and policy decisions issued before the establishment of the Commission itself could not have been set aside by it. The circulars, issued between 1998 and 2001, pertained to minimum Take or Pay obligations in re Captive Power Plants. The Court held that as far as the circulars issued after the establishment of the Commission were concerned, the Commission ought to have judged each circular on their individual merits as the end result of merely dismissing them without reasoning was that the liability was passed on to the buyer/end consumer. This was even more so because the Commission vide its own order dated 10.01.2002 had stated that Captive Power Plants were a policy matter within the domain of State of Maharasthra and did not decide the issue on merits. [Keywords: policy decision, captive power plants] [Coram: Arun Mishra, M.R. Shah, B.R. Gavai, JJ.]

Government Contract/Tenders/Public Procurement

In Adani Gas Limited v. Petroleum and Natural Gas Regulatory Board (PNGRB) & Ors., the Court dismissed the Appeal and upheld the PNGRB’s decision to grant authorisation for implementation of city gas distribution networks in five geographical areas. It was held that the assessment of the reasonability of the bid was a matter solely between the highest bidder and the Board, and the Board had the power to determine such reasonability under Clause 14.2 of the Bid Document. Calling of bidders with the highest composite score to explain reasonableness of their bid cannot be faulted as being in violation of the principles of natural justice. It further held that to disqualify a bidder on the basis of a criterion which was not notified and of which bidders had no knowledge, would be arbitrary and constitute an infraction of Article 14. [Keywords: City Gas Distribution Networks, Disqualification of bidder, Natural Justice] [Coram: D.Y. Chandrachud, Hemant Gupta, JJ.]

Customs Act

In Union of India & Ors. v. Associated Container Terminal Ltd., the issue was whether the calculation of the custom duty is to be assessed as on the date of the deemed removal of goods from the warehouse in terms of Section 61 of the Customs Act 1962 as interpreted by the Supreme Court in Kesoram (1996) 5 SCC 576, or on the date of sale for the reasons that the importer had failed to seek clearance of goods imported. Distinguishing Kesoram as inapplicable, it was held that the present case was not a case of levy of custom duty on the importer and the importer had not sought the release of goods within the permitted period of warehouse. It was held that in terms of the Circular dated 20.11.2011, the custom duty was to be paid on the basis of sale proceeds realised from the sale of goods kept in the warehouse, and not on the basis of the custom duty payable at the time of filing the Bill of Entry. [Keywords: calculation of customs duty, Sections 59, 61, 63, 68, 72 and 150 of the Customs Act 1962] [Coram: A.M. Khanwilkar, Hemant Gupta, Dinesh Maheshwari, JJ.]

In Commissioner of Customs and Central Excise, Goa v. M/s Adani Exports Ltd., the issue was whether in a case where the Commissioner of Customs, or the other party, makes an application to the High Court under Section 130A of the Customs Act, to direct the Appellate Tribunal to refer to the High Court any question of law arising from such order of the Tribunal, it was mandatory for the High Court to call for a statement from the Tribunal in every case. Answering the issue in the negative, the Court held Section 130A(4) opens with the word “if”, and therefore, there was nothing in the language of Section 130A which first mandatorily obliges the High Court to call for a statement from the Tribunal before deciding any such application. The judgment in Commissioner of Customs, Bangalore v. Central Manufacturing Tech. Institute 2002 (146) ELT 27, which held otherwise, was overruled. [Keywords: Section 130A(1), (4) of the Customs Act 1962] [Coram: R.F. Nariman, S. Ravindra Bhat, V. Ramasubramanian, JJ.]

Company Law and Securities Law

In Osians Connoisseurs of Art Pvt. Ltd. v. SEBI & Anr., the issue revolved around a Show Cause Notice issued by SEBI as to why the Yatra Art Fund should not register itself with SEBI, as otherwise the collective investment scheme carried out by the Trust would be illegal. Relying upon Sections 11(2)(c) and 12(1B) of the SEBI Act, the argument of the Appellant that it won’t fall foul of law since Section 11AA uses the word “company” and not “person”, and the Appellant was a Trust, was rejected. The statutory scheme is that if a collective investment scheme is to be floated by a person, it could only be done in the form of a collective investment management company, and in no other form. [Keywords: Collective Investment Scheme] [Coram: R.F. Nariman, S. Ravindra Bhat, V. Ramasubramanian, JJ.]

In Usha Ananthasubramanian v. Union of India, the Appellant was the former MD and CEO of the Punjab National Bank, against whom the charge was that she omitted to take preventive steps to prevent the fraud perpetrated by Nirav Modi. The issue was whether the NCLT had the jurisdiction to freeze the assets of the Appellant in exercise of powers under Section 241 of the Companies Act 2013. Relying on Sections 241(2), 242, read with Sections 337 and 339, the Court held that the persons referred to in Section 339(1) are persons who are other than the parties “to the carrying on of the business in the manner aforesaid”, which again refers to the business of the company which is being mismanaged, and not to the business of another company or other persons. Therefore, the powers under these Sections cannot be utilized in order that a person who may be the head of some other organisation be roped in, and his or her assets be attached. [Keywords: Nirav Modi, PNB Scam, assets freeze] [Coram: R.F. Nariman, S. Ravindra Bhat,, V. Ramasubramanian, JJ.]

Writs

In Union of India v. Deepak Niranjan Nath Pandit where a transfer order was challenged by an officer of Customs, GST and Central Excise, the Court held that the High Court was not justified in taking recourse to its extraordinary jurisdiction under Article 226 of the Constitution to pass an order of injunction to stay the transfer. It further held while setting aside the impugned order that the High Court did not even find a prima facie case to the effect that the order of transfer was made either mala fide or in breach of law and therefore such interference with an order of transfer was in excess of jurisdiction and an improper exercise of judicial power. [Keywords: transfer order] [Coram: D. Y. Chandrachud, Indu Malhotra JJ.]

In Popatrao Vyankatrao Patil v. The State of Maharashtra & Ors., it was held that when a petition involves disputed questions of fact and law, the High Court would be slow in entertaining a petition under Article 226. However, it was held to be a rule of self-restraint and not a hard and fast rule. The Court relied upon ABL International (2004) 3 SCC 553, to hold that even if there are disputed questions fact, but they do not require elaborate evidence to be adduced, the High Court is not precluded from entertaining a Petition under Article 226. However, such a plenary power has to be exercised by the High Court in exceptional circumstances. [Keywords: Maintainability of Writ Petition under Article 226, Disputed questions of fact] [Coram: S.A. Bobde, CJI, B.R. Gavai,Surya Kant, JJ.]

In Padma Mishra v. State of Uttarakhand and Anr., the Court held that in proceedings under Article 226 of the Constitution of India, the High Court does not adjudicate the correctness of the allegations in the FIR. The Court may only intervene in exceptional cases, if the allegations made in the FIR ex facie do not disclose any offence at all. Upholding the refusal of the High Court to quash the FIR, it was held in the facts that it could not be said that the allegations in the FIR did not disclose any act warranting penalisation under the Gangsters Act. [Keywords: Quashing of FIR] [Coram: Indira Banerjee, Aniruddha Bose, JJ.]

In Vinay Sharma v. Union of India and Ors., the Petitioner, a death row convict, had filed a Writ Petition under Article 32 challenging the rejection of his mercy petition by the President and seeking commutation of his death sentence. Relying on Narayan Dutt (2011) 4 SCC 353 and Epuru Sudhakar (2006) 8 SCC 161, as upheld in Shatrughan Chauhan (2014) 3 SCC 1, it was held that when the highest constitutional authority, upon perusal of various documents, has taken a decision to reject the mercy petition, challenge to such exercise of power under Articles 72 and 161 of the Constitution, cannot be on the ground of non-application of mind. Further, relying upon Maru Ram (1981) 1 SCC 107 and Bikas Chatterjee (2004) 7 SCC 634, it was held that where the power is vested in a very high authority, it must be presumed that the said authority would act carefully after an objective consideration. [Keywords: Challenge to rejection of mercy petition, Articles 72 and 161, death row] [Coram: R. Banumathi, Ashok Bhushan, A.S. Bopanna, JJ.]

Election Law

In Laxmibai v. The Collector, Nanded & Ors., the challenge was to dismissal of a writ petition against an order of disqualification under Section 14B of the Maharashtra Village Panchayats Act 1959 on account of non-submission of election expenses within the period prescribed. The Court held that Section 14B of the Act was merely directory and not mandatory. Further, the disqualification has to be proportional to the offence, and though the Election Commission has the power to disqualify for a period not exceeding five year, to pass an order of disqualification for five years, which may disqualify him from next elections, requires cogent reasons. [Keywords: Disqualification by State Election Commission] [Coram: A.M. Khanwilkar, Hemant Gupta, Dinesh Maheshwari, JJ.]

In Rambabu Singh Thakur v. Sunil Arora & Ors., the issue regarding criminalisation of politics in India and disregard of the directions of a Constitution Bench in Public Interest Foundation & Ors. v. Union of India & Anr. (2019) 3 SCC 224, was raised. The Court held as follows:

1. It shall be mandatory for political parties to upload on their website information regarding individuals with pending criminal cases who have been selected as candidates, along with reasons for such selection, as also why other individuals without criminal antecedents could not be selected as candidates.

2. The reasons as to selection shall be with reference to the qualifications, achievements and merit of the candidate concerned, and not mere “winnability” at the polls.

3. This information shall also be published in: (a) One local vernacular newspaper and one national newspaper; (b) On the official social media platforms of the political party, including Facebook & Twitter.

4. These details shall be published within 48 hours of the selection of the candidate or not less than two weeks 4 before the first date for filing of nominations, whichever is earlier.

5. The political party concerned shall then submit a report of compliance with these directions with the Election Commission within 72 hours of the selection of the said candidate.

6. If a political party fails to submit such compliance report with the Election Commission, the Election Commission shall bring such non-compliance to the notice of the Supreme Court as being in contempt of this Court’s directions.

[Keywords: Criminalisation of Politics in India, Selection of individuals with pending criminal cases, contempt] [Coram: R.F. Nariman, S. Ravindra Bhat, JJ.]

Negotiable Instruments

In APS Forex Services Pvt. Ltd. v. Shakti International Fashion Linkers & Ors. relying on K.N.Beena (2001) 8 SCC 458, Rangappa (2010) 11 SCC 441, Kishan Rao (2018) 8 SCC 165, it was held that once the accused has admitted the issuance of cheque which bears his signature, there is presumption that there exists a legally enforceable debt or liability under Section 139 of the Negotiable Instruments Act. However, such a presumption is rebuttable in nature, for which the accused needs to lead evidence. In the present case, since no such evidence was led, the Court held the accused to be guilty under Section 138 of the Act. [Keywords: presumption of liability] [Coram: Ashok Bhushan, M.R. Shah, JJ.]

Evidence

In Shri Pratap Singh (Dead) Through LRs & Ors. v. Shiv Ram (Dead) Through LRs., it was held that the presumption of truth attached to the record-of-rights can be rebutted only if there is a fraud in the entry, or if the entry was surreptitiously made (as in Vishwa Vijai (1976) 3 SCC 642), or if the prescribed procedure was not followed (as in Bhimappa Channapa (2012) 13 SCC 739). Further, it can be rebutted only on the basis of evidence of impeccable integrity and reliability. Reliance on oral evidence to rebut the statutory presumption is improper since the credibility of oral evidence vis-a-vis documentary evidence is at a much weaker lever. [Keywords: Section 54, Himachal Land Revenue Act 1954, oral evidence vis-a-vis documentary evidence, statutory presumption] [Coram: L. Nageswara Rao, Hemant Gupta, JJ.]

SC & ST (PREVENTION OF ATROCITIES) ACT 1989

In Prithvi Raj Chauhan v. UOI, Section 18A of the SC & ST (Prevention of Atrocities) Act, 1989 was challenged which had been enacted to nullify the judgment in Subhash Kashinath Mahajan, (2018) 6 SCC 454 where the Court held that absolute bar to obtain anticipatory bail for offences committed under the Act was being misused and the same was arbitrary, unjust, irrational and violative of Article 21 of the Constitution. Therein the Court directed that prior investigation and scrutiny were necessary before arrest of an accused under the Act. In review by Union of India against the aforesaid judgment, the direction qua prior investigation and scrutiny was recalled. In the instant case the Court while referring to the judgment rendered in the review petitions reiterated that a preliminary inquiry for registration of FIR under Section 18A of the Act was permissible only in the circumstances as laid down in Lalita Kumari (2014) 2 SCC 1. It was held that provisions of section 438 Cr.PC shall not be applicable to the cases under the Act. However, if the complainant fails to make out a prima facie case for applicability of the provisions of the Act, the bar created by Sections 18 and 18A (i) shall not apply. It was further held that the court can, in exceptional cases, exercise power under Section 482 Cr.PC for quashing the cases to prevent misuse of provisions on settled parameters. [Keywords: prior investigation and scrutiny] [Coram: Arun Mishra, Vineet Saran JJ.]

In a separate but concurring opinion Ravindra Bhat J. opined that while considering application for anticipatory bail, the High Court needed to sparingly exercise its jurisdiction under Section 482 Cr.P.C. and such orders had to be made in very exceptional cases where no prima facie offence was made out as shown in the FIR. Further the High Court needed to make sure that if such orders were not made in those classes of cases, the result would inevitably be a miscarriage of justice or abuse of process of law.

Miscellaneous

In M/s Oudh Sugar Mills Ltd. v. UoI, the appellant sought parity to be put in the same zone with other sugar factories for fixation of price for levy sugar. The Court held that the other units were transferred to a different zone on merits adjudged by the State Government and BICP (Bureau of Industrial Cost & Prices) and levy prices are fixed for zones and not for each factory. Merely because there was a difference in price in two different zones, the appellant cannot claim, as a matter of right that its unit was to be placed in the other zone during the relevant crushing years. It further held that the price of levy sugar was fixed by the Central Government, having regard to various factors, including the basis of basic–cost schedules drawn and recommended by the expert body. The conclusions reached by the Central Government in exercise of statutory power cannot be said to be either discriminatory or unreasonable. [Keywords: Fixation of price for levy sugar in different zones, Essential Commodities Act 1955] [Coram: Mohan M. Shantanagoudar, R. Subhash Reddy JJ.]

In The State of Maharashtra & Ors., v. Pan India Paryatan Ltd. & Anr, the question revolved around interpretation of Sections 3(1)(b), 3(2) and sub-sections 5(a) and (b) of the Bombay Entertainments Duty Act 1923 as regards the rate of tax payable. The Respondent owned and ran an amusement park in which they charged a lump sum amount for admission and entertainment, whereon they were required to pay entertainment duty. The Court held that the admission to entertainment in terms of Section 2(d) includes all rides and games which are provided by the service provider. The series of entertainment under Section 3(2) does not mean that on a single day ticket for one entry, it can be treated to be a series of entertainments. Once an admission ticket is granted, it is not in terms of Section 3(2) but of Section 3(1)(b), and therefore, the Respondent was not entitled to rebate of 50% under Section 3(2). [Keywords: Entertainment Duty] [Coram: Deepak Gupta, Hemant Gupta, JJ.]

In Narayan Yadav (D) Through LRs v. The State of Bihar & Others, the Court set aside the order of the Single Judge as also the Division Bench on the ground that Section 28 of the Bihar and Orissa Public Demands Recovery Act 1914 was not strictly complied with that there was no discretion left with judges to extend the time period. The Court confirmed the order of the Board of Revenue passed in 1987 insofar as the revenue authorities had stated Section 28 stipulated that the certificate-debtor, or any person whose interests are affected by the sale, could, within thirty days from the date of the auction sale, make an application to the Certificate Officer to set aside the sale by depositing the amount specified in the proclamation of sale, along with interest at six and a quarter per centum per annum, and with penalty, a sum equal to ten percent of the purchase money. The Court said that an application under Section 28 was valid only if it was accompanied with the deposit so stated. [Keywords: auction, judicial discretion] [Coram: L. Nageswara Rao, R. Subhash Reddy, JJ.]

In M/s Nola Ram Dulichand Dal Mills & Anr. v. Union of India & Ors., the challenge was to a Circular dated 21.01.2009 on the ground that it is contrary to the Foreign Trade Policy (FTC) 2004-2009, which was issued under Section 5 of the Foreign Trade (Development and Regulation) Act 1992. The Scheme in question was “Vishesh Krishi Upaj Yojna” for giving incentives to promote export of fruits, vegetables, flowers, dairy, poultry, etc. In the Scheme notified for 2005-06, certain exports were not to be taken into account for duty credit entitlement. However, in the Scheme notified for 2006-07, the said restrictions were amended by way of the Circular in question. It was held that under Section 5 of the Act the Central Government had the power to formulate a FTC, and to amend it. The Circular was upheld on the ground that it does not amend the Scheme, but only clarifies the position, and that it was modification or amendment of the Scheme which required publication in the official gazette, but not the clarification to remove ambiguity in the existing Scheme. [Keywords: Foreign Trade Policy 2004-2009, Vishesh Krishi Upaj Yojna] [Coram: Deepak Gupta, Hemant Gupta, JJ.,]