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 July 2020.

Criminal Law

In Parminder Kaur @ P.P. Kaur @ Soni v. State of Punjab, the Bench reversed the concurrent findings of the courts below and acquitted the Appellant who was charged under Sections 366A and 506 IPC. While reversing the finding of conviction, the Bench cautioned everyone against making a sweeping generalization that in allegations involving sexual offences, the FIR is generally lodged belatedly to protect reputations. Castigating the police for their shoddy investigation and depreciating the courts below for not examining the glaring witness contradictions, the Supreme Court re-emphasized the importance of Section 313 CrPC and reiterated that while the prosecution needed to prove its case beyond reasonable doubt, the accused needed to only sow reasonable doubt. [Key Words: Section 313, sweeping generalization, superficial analysis, contradiction, rape, sexual offences, belated FIR] [Coram: N.V. Ramana, J., Surya Kant, J., Krishna Murari, J.]

In Prem Chand v. State of Haryana, the Bench overturned the finding of conviction by the High Court and affirmed the finding of the Trial Court and stated that no offence under Section 2(1a)(f) of the Prevention of Food Adulteration Act 1954 was made out. The Bench noted that the Medical Officer contradicted the Food Inspector inasmuch as the former did not find any worms in the haldi sample, and while the Food Inspector stated that the sample had been sent to the public analyst the day after the raid, no parcel receipt was produced- implying that the sample could have been tampered with. Even the public analyst did not mention that the sample was “insect infested” or “unfit for human consumption”. [Key Words: Delhi Administration v. Sat Sarup Sarma 1994 Supp. (3) 324, Sections 16(1A) and 16(1)(a)(ii) of the Prevention of Food Adulteration Act 1954] [Coram: N.V. Ramana, J., Surya Kant, J., Krishna Murari, J.]

In Shailendra Swarup v. The Deputy Director, Enforcement Directorate, the Bench held that sub-sections (1) and (2) of Section 141 of the Negotiable Instruments Act 1881 was pari materia to Section 68 of the Foreign Exchange Regulation Act 1973. Consequently, to proceed against the Director of a company under Section 68 of the FERA, “the necessary ingredient for proceeding shall be that at the time offence was committed, the Director was in charge of and was responsible to the company for the conduct of the business of the company” and that the “liability to be proceeded with for offence under Section 68 of FERA depends on the role one plays in the affairs of the company and not on mere designation or status”. It was further held that the expression “after giving that person a reasonable opportunity for making a representation in the matter” as occurring in Section 51 contemplates due communication of the allegations of contravention and unless allegations contains complete ingredients of offence within the meaning of Section 68 FERA, it could not be held that a reasonable opportunity for making a representation in the matter has been given to the accused. [Key Words: liability of directors, vicarious liability, criminal liability, SMS Pharmaceuticals Ltd. v. Neeta Bhalla and Another (2005) 8 SCC 89] [Coram: Ashok Bhushan, J., R. Subhash Reddy, J.]

Evidence

In V. Kalyanaswamy (D) By LRs & Anr. v. L. Bakthavatsalam (D) By LRs & Ors., while dismissing the appeals, , the Court reiterated the following legal principles:

i. Section 69 of the Evidence Act manifests a departure from the requirement embodied in Section 68 of the Evidence Act. In the case of a Will, which is required to be executed in the mode provided in Section 63 of the Indian Succession Act, when there is an attesting witness available, the Will is to be proved by examining him. He must not only prove that the attestation was done by him but he must also prove the attestation by the other attesting witness.

ii. The right of a Hindu in the coparcenary joint family is an interest. Upon disruption or division, it assumes the form of a definite share. When there is a metes and bounds partition, then the share translates into absolute rights qua specific properties.

iii. A Hindu, when he dies intestate, may have an interest in a Hindu joint family and at the same time also have separate properties. Then qua his separate properties, Section 3(1) of the Hindu Succession Act would apply, whereas in regard to his interest in the joint family, Section 3(2) would govern. Section 3(1) cannot apply as the properties in dispute were not his separate properties.

iv. Lastly, it was held that in the case of an alienation by a Hindu, even if it is of a specific property belonging to the joint property, it would be dealt with on an equitable basis, should the alienee bring an action to enforce the same in a properly constituted Suit.

[Key Words: Execution and proof of Will, Hindu Succession Act, Indian Succession Act, Coparcenary joint family] [Coram: S.K. Kaul, J., K.M. Joseph, J.]

In Arjun Panditrao Khotkar v. Kailash Kushanrao Gorantyal & Ors., the civil appeals were referred to a three-judge Bench by a Division Bench reference order dated 16.07.2019, dealing with the interpretation of Section 65B of the Indian Evidence Act 1872. In the reference order, after quoting from Anvar P.V. v. P.K. Basheer & Ors. (2014) 10 SCC 473 (three Judge Bench), it was found that the Division Bench judgment in Shafhi Mohammad v. State of Himachal Pradesh (2018) 2 SCC 801 may need reconsideration. The Court held that Shafi Mohammad was incorrect, per incuriam, and contrary to law. The judgment in (2018) 5 SCC 311, which followed the incorrect law laid down in Shafhi Mohammad, was also overruled. It was also held that though Section 65B(4) is mandatory, yet, on the facts, the Respondents having done everything possible to obtain the certificate, which was to be given by a third-party over whom the Respondents had no control, must be relieved of the said mandatory obligation. [Key Words: Section 65B Evidence Act, Reference, lex non cogit ad impossibilia, impotentia excusat legem] [Coram: R.F. Nariman, J., S. Ravindra Bhat, J., V. Ramasubramanian, J.]

Constitutional Law

In Pyare Lal v. State of Haryana, the question that arose was whether in exercise of power under Article 161 of the Constitution, a policy could be laid down setting out certain norms, on the satisfaction of which the benefit could be conferred upon the convicts by the executive without even placing the individual facts and material pertaining to the case of the convict, before the Governor, and whether such exercise can override the requirements under Section 433 of the CrPC. The Court noted that as per conclusion ‘(8)’ in Maru Ram (1981) 1 SCC 107, no separate order for each individual case would be necessary but a general order must be clear enough to identify the group of cases and indicate the application of mind to the whole group. However, in the present case, the individual facts, viz., the manner in which the crime was committed, the impact of the crime on the society, the seriousness of the crime, etc. were not even placed before the Governor. Therefore, the Court did not prima facie agree with the correctness of the decision of remission to the Appellant. However, since the observations in Maru Ram were rendered by the Constitution bench, the matter was held to be required to be placed before a larger bench. [Key Words: Remission of sentence, pardon, exercise of power by the Governor] [Coram: UU Lalit, J., Mohan M. Shantanagoudar, J., Vineet Saran, J.]

In Sunil Rathee & Ors v. The State of Haryana & Ors, the Bench distinguished the case of Commissioner of Services Tax v. Sri Selvaganapathy and Co. (2018) 4 SCC 578 and reaffirmed the view that the Court ought to exercise its powers under Article 139A if:

a) The case pending before the Supreme Court and the High Court have the same or substantially the same questions of law; and

b) The questions were substantial questions of general importance.

The satisfaction could be on the Supreme Court’s own motion, on an application made by the Attorney General or on the basis of an application made by a party to any such case. [Key Words: substantial questions of general importance, transfer petition, Indra Sawhney, vertical reservations] [Coram: Aniruddha Bose, J.]

Consumer Law

Erudhaya Priya v. State Express Transport Corporation involved a claim for compensation under Section 166 of the MV Act 1988. The Court, relying on National Insurance Company (2017) 16 SCC 680 held that in the age group of 15-20 years, the multiplier has to be 18, along with factoring in the extent of disability. Relying on Sandeep Khanuja (2017) 3 SCC 351, the Court held that future prospects of advancement in life and career must also be considered and considering that the appellant had a permanent disability of 31.1%, the quantification of loss of income must be 50% of the actual salary. [Key Words: Accident Claim, Loss of Earning Capacity, Multiplier of Income] [Coram: Sanjay Kishan Kaul, J., Ajay Rastogi, J., Aniruddha Bose, J.]

Education

Rajeev Gandhi memorial College of Engineering & Technology & Anr. v. The State of Andhra Pradesh & Ors. concerned The Andhra Pradesh Educational Institutions (Regulation of Admission and Prohibition of Capitation Fee) Act 983, which dealt with fee fixation insofar as unaided institutions were concerned. The Court held that the interim fee fixed by the Andhra Pradesh Government without following the drill of Rule 4 has correctly been found to be prima facie illegal, and has therefore, correctly been suspended by the Single Judge. The Division Bench’s interference, with the said order of the Single Judge, was set aside. [Key Words: Fee fixation, unaided institutions] [Coram: R.F. Nariman, J., Navin Sinha, J., B.R. Gavai, J.]

Civil Law

In Sri Marthanda Varma v. State of Kerala & Ors., the Court held as follows:

i. Mere factum that no emoluments are attached to the office of the Shebait would not make any difference to the character of the right and interest of Shebait (relying on Angurbala Mullick (AIR 1951 SC 293), referred to with approval in Shirur Mutt (1954) SCR 1005, and quoted in paragraph 434 of M. Siddiq (2020) 1 SCC 1.

ii. As on the day when the Covenant was entered into by the Ruler of the Covenanting State of Travancore, he was holding the office of Shebait of the Temple and represented a continuous and unbroken line of successive Shebaits, and therefore, having all rights and interests.

iii. The expression “Ruler of Travancore” used in the latter part of Article VIII(b) was only by way of reference and the purport was not to invest the said authority and power because he was the Ruler or enjoyed any official status.

iv. The relevant provisions of the Constitution of India as well as the Travancore-Cochin Hindu Religious Institutions Act, 1950 did not, in any way, upset or abridge the status enjoyed by the Ruler of Travancore as Shebait of the Temple.

v. The Constitution (Twenty Sixth Amendment) Act 1976 did not in any way impact or affect the administration and properties of the Temple, which continued to be under the control and supervision of the Ruler of Travancore.

vi. The death of Sree Chithira Thirunal Balarama Varma who had signed the Covenant, would not in any way affect the Shebaitship of the Temple held by the royal family of Travancore; and after such death, the Shebaitship must devolve in accordance with the applicable law and custom upon his successor; and that the Shebaitship did not lapse in favour of the State by principle of escheat.

vii. The bar under Article 363 of the Constitution of India would not get attracted in the present matter.

[Key Words: Right of Shebait, Devolution thereof, Ruler of Travancore] [Coram: UU Lalit, J., Indu Malhotra, J.]

Company Law

In Aruna Oswal v. Pankaj Oswal, the dispute pertained to the maintainability of applications filed before the NCLT under Sections 241 and 242 of the Companies Act, 2013, in view of Section 244 of the Act. The Court, relying on World Wide Agencies (1990) 1 SCC 536 held that a legal representative has a right to maintain an application for oppression and mismanagement without being registered as a member against the securities of a company. However, the Court, relying on Sangramsinh P. Gaekwad (2005) 11 SCC 314 held that a dispute as to inheritance of shares is a civil dispute and does not attract the Company Court’s jurisdiction and held that the matter was not maintainable before the NCLT. [Key Words: Nomination, Inheritance of Shares][Coram: Arun Mishra, J., S. Abdul Nazeer, J.]

Taxation

In M/s Ultratech Cement Ltd. & Anr. v. State of Rajasthan & Ors., the issue pertained to the extent to which the Appellant company was entitled, under the Rajasthan Investment Promotion Scheme 2003, to avail the Capital Investment Subsidy (i.e., 75% of the tax payable and deposited, or 50%). The Court held that as to whether the cement industry was to be granted 75% subsidy or not was definitely a matter of policy of the Government, and when such a Policy was not in existence at the time of consideration of the application of the Appellant, no benefit could have been claimed under a non-existent policy. On facts, the view of the SLSC, that the Appellant was entitled to 75% subsidy, was held illegal since Clause 7(vi) and 7(vii) of the Scheme had already been deleted. It was further held that if at all the doctrine of contemporanea expositio is applied, the consequence would be that howsoever erroneous a decision by the executive or administrative authority may be, once it emanates from the understanding of some of the officers or authorities, the same would acquire immunity from scrutiny for all time to come. Such has never been the intent of the said doctrine. [Key Words: Sales Tax / VAT subsidy, Doctrine of contemporanea expositio] [Coram: A.M. Khanwilkar, J., Dinesh Maheshwari, J.]

In Director of Income Tax-II (International Taxation) New Delhi & Anr v. M/s Samsung Heavy Industries Co. Ltd., the Court was concerned with ‘the taxability of income attributable to a “permanent establishment” set up in a fixed place in India, arising from the ‘Agreement for avoidance of double taxation of income and the prevention of fiscal evasion’ with the Republic of Korea’. Dismissing the appeal on the ground that the Assessee had opened merely a liason office, the Bench noted that when it came to “fixed place” permanent establishments under double taxation avoidance treaties, the condition precedent for applicability of Article 5(1) of the double taxation treaty and the ascertainment of a “permanent establishment” was that it ought to be an establishment through which the business of an enterprise is wholly or partly carried on. The profits were taxable when its core business was carried out through a permanent establishment, and a preparatory or auxiliary character in the trade or business of the enterprise would not be considered to be a permanent establishment under Article 5. [Key Words: DTAA, permanent establishment, best judgment assessment] [Coram: R.F. Nariman, J., Navin Sinha, J., B.R. Gavai, J.]

In Shiv Raj Gupta v. Commissioner of Income-Tax, Delhi-IV, the Bench allowed the appeal on the ground that under Section 260-A of the Income Tax Act 1961, the High Court could only answer substantial questions framed by it and no other. Comparing Section 260-A of the 1961 Act with Section 100 CPC, it was held that if the High Court wished to hear the appeal on any other substantial question, then the procedure under Section 260-A(4) had to be complied with. The Bench further held that the compensation received by the assessee for loss of agency was a revenue receipt whereas compensation received for refraining from carrying on competitive business was a capital receipt. [Key Words: substantial question of law, non-competition fee, commercial expediency] [Coram: R.F. Nariman, J., Navin Sinha, J., B.R. Gavai, J.]

Environment

In The Director General (Road Development) NHAI v. Aam Aadmi Lokmanch & Ors., four issues arose for consideration. Firstly, the jurisdiction of the NGT to award compensation. On this issue, the Court held that the expressions “environment” and “environmental pollution” have to be given a broader meaning, having regard to the Parliamentary intent behind the Environmental Protection Act. Therefore, the NGT correctly assumed jurisdiction having regard to the nature of the accident. Secondly, on the merits and soundness of the NGT’s decision to award compensation, the same was upheld having regard to the duty imposed on the NHAI by virtue of Sections 4 and 5 of the Highways Act, read with Section 16 of the NHAI Act, whereby NHAI was held responsible for the maintenance of the highway, including the stretch upon which the accident occurred. Thirdly, on the NGT’s wide directions with respect to the ban on construction in and around foothills, it was held that given the panoply of the NGT’s powers under the NGT Act, which include considering regulatory directions issued by expert regulatory bodies under the Water Act 1974, the Air Act 1981 and the Biodiversity Act 2002, it has to be held that general directions for future guidance, to avoid or prevent injury to the environment, can be given by the NGT. Lastly, the vires of the directions issued under Section 154, MRTP Act were set aside, since the same were not based on any expert report or input, and exhibited lack of application of mind. [Key Words: Powers of NGT to grant compensation, MRTP Act, NHAI Act] [Coram: R.F. Nariman, J., S. Ravindra Bhat, J., V. Ramasubramanian, J.]

Registration Act

In Ravinder Kaur Grewal & Ors v. Manjit Kaur & Ors, the Bench reiterated the principles in Kale v. Deputy Director of Consolidation (1976) 3 SCC 119 to hold that no registration of a document was necessary if it was merely a memorandum of family settlement recording terms arrived at in the past. The principle of estoppel was held to be applicable when parties sought to resile from family arrangements. [Key Words: Ravinder Kaur Grewal (2019) 8 SCC 729, family settlement, adverse possession, permissive possession, compulsory registration] [Coram: A.M. Khanwilkar, J., Dinesh Maheshwari, J.]

Civil Procedure Code

In Dahiben v. Arvindbhai Kalyanji Bhanusali, the dispute involved the sale and subsequent resale of land under restrictive tenure as per Section 73AA of the Land Revenue Code to the present respondents and a suit for the cancellation of the same as being illegal void and ineffective as the plaintiffs were illiterate and that the sale consideration had not been paid in entirety by the respondents. Relying on Vidyadhar (1993) 3 SCC 573, the Court held that the non-payment of a part of the sale price would not affect the validity of the sale. Relying on a catena of judgments, the Court held that such a suit being vexatious and not disclosing a right to sue, could be rejected under Order VII Rule 11(a). [Key Words: Rejection of Plaint, Cancellation of Sale Deed] [Coram: L Nageswara Rao, J., Indu Malhotra, J.]