నల్లనివాడు కలువ కన్నులవాడు — నిలువెత్తు నిండైన విగ్రహంబు కలవాడు
ధవళవస్త్రం మెండుగ ధరించిన వాడు — శంఖచక్రాభయహస్తుని శ్రీహరి నాదుడు
శ్రీ కస్తూరి తిరునామముధరించిన వాడు — విశాల వక్షస్థలమున శ్రీని నిలిపిన వాడు
ఎత్తైన ఏడు కొండలపై కొలువైయున్న వాడు — శ్రీ వెంకటేశ్వరుని వేడుకొంటిని తనివితీరా
Motor Vehicles Act, 1988 — Section 166 — Claim for compensation — Standard of proof — Involvement of alleged offending vehicle — Concurrent findings — Appreciation of evidence — Interference under Article 136. Claim petitions for compensation arising from a road accident which resulted in two deaths were dismissed by the Motor Accident Claims Tribunal; the High Court affirmed on the ground that claimants failed to establish involvement of the alleged offending vehicle. On appeal, this Court held that concurrent findings of fact recorded by the Tribunal and affirmed by the High Court would not be disturbed unless the appreciation of evidence was perverse or wholly unsatisfactory. The court observed: (i) the relevant standard in civil claims is preponderance of probabilities; (ii) documentary and oral evidence must nonetheless be cogent and consistent to link the offending vehicle to the accident; (iii) material contradictions in witness testimony, absence of independent eye‑witnesses, delayed preparation of spot mahazar, and a Motor Vehicle Inspector's report showing no damage to the recovered vehicle undermine the claim; and (iv) filing of a chargesheet, while relevant, is not conclusive of civil liability. Finding no perversity in the concurrent findings and no exceptional circumstances warranting interference, the appeals were dismissed.
• On 14.08.2013, a motorcycle carrying two young men (Sunil Singh — 26 years; Shivu — 22 years) met with a fatal accident near Sugur village. Both occupants died — one on the spot, the other subsequently in hospital.
• Legal representatives of each deceased filed separate claims under Section 166 MV Act against the owner/driver of an allegedly involved canter lorry and its insurer.
• The Claims Tribunal dismissed both petitions; the High Court dismissed the appeals. Primary reasons were unreliability and contradictions in oral testimony, absence of reliable eye‑witnesses positively identifying the offending vehicle at the time of accident, delayed spot mahazar, and a Motor Vehicle Inspector report (dated 05.10.2013) indicating no damage to the vehicle recovered thereafter.
Whether the appellants proved on preponderance of probabilities that the identified canter lorry was involved in the accident and that its driver acted rashly/negligently.
Whether the concurrent findings of the Tribunal and High Court suffer from perversity or are based on palpably erroneous appreciation of evidence such as to warrant interference under Article 136.
Concurrent findings of fact: Interference under Article 136 in relation to concurrent findings of the Tribunal and the High Court is exceptional; this Court will not disturb such findings unless the appreciation of evidence is manifestly perverse or wholly unsatisfactory (see Collector Singh v. L.M.L. Ltd.).
Standard of proof: Civil claims under Section 166 are governed by the standard of preponderance of probabilities. However, preponderance requires credible, cogent and coherent evidence linking the vehicle and its driver to the accident. The absence of registration particulars in the first complaint is not conclusive, but must be read with the totality of evidence.
Infirmities in the appellants' case:
Key witnesses (P.W.1 and P.W.2) admitted they were not eye‑witnesses and derived their knowledge from police or hearsay; they had not visited the spot and were unfamiliar with other witnesses claimed to have seen the incident.
Witnesses P.W.3 and P.W.4 who purportedly narrated confessional statements by the driver gave inconsistent testimony and materially contradicted their examination‑in‑chief during cross‑examination, weakening the reliability of their accounts.
The spot mahazar(s) were prepared several days after the incident; provenance and basis for entries were not satisfactorily demonstrated.
The Motor Vehicle Inspector's report noted no damage to the vehicle recovered 1.5 months later — a circumstance inconsistent with a collision causing two fatalities.
The chargesheet, though relevant, cannot substitute for cogent civil proof; a police charge is not conclusive of civil liability and must be weighed with other materials.
Taken cumulatively, these infirmities support the concurrent conclusion that connection between the accident and the alleged offending vehicle was not established on a preponderance of probabilities.
The appeals are dismissed for lack of merit.
The concurrent findings of the Tribunal and the High Court that the appellants failed to establish the involvement of the alleged offending vehicle are not vitiated by perversity or manifest error of appreciation.
No order as to costs.
Compassionate appointment — Nature and object — Whether a matter of right — Second/alternative claim after having accepted first appointment — Delay and laches — Negative discrimination. Appointment on compassionate grounds is a humanitarian concession and an exception to the ordinary rule of public employment; it is not a vested right. The core objective is to relieve the immediate financial distress of the deceased employee's family by providing a source of livelihood, ordinarily in the lower rungs of public employment. Once a dependent has been offered and has accepted employment on compassionate grounds and has joined the post, the purpose is ordinarily fulfilled and a second claim for appointment to a higher post is not maintainable — lest compassion become an open‑ended entitlement. Prolonged delay in pursuing a belated claim dilutes the immediacy which is the essence of compassionate relief; delay and laches may disentitle the claimant to discretionary relief. A plea of parity with other beneficiaries who may have been irregularly benefitted cannot be sustained as negative equality; courts will not perpetuate illegality by directing comparable unlawful relief to others. High Court orders directing appointment to a higher post and backdated salary, where based on such impermissible re‑consideration long after consummation of compassionate appointment, are liable to be set aside.
The appeals arise from a Division Bench judgment of the Madras High Court and subsequent review order directing appointment of certain respondents (dependents of deceased employees) as Junior Assistants instead of the Class‑IV posts (sweepers) to which they had been appointed on compassionate grounds.
Respondents were initially appointed as sweepers on compassionate basis following the deaths of their fathers (employees). They joined the posts. Years later they filed writ petitions seeking appointment to the higher post of Junior Assistant on the ground of possessing requisite qualifications and alleged non‑uniformity with other beneficiaries.
The Single Judge granted relief, directing appointment to the higher post and backdating salary; the Division Bench upheld that order and review was dismissed. The appellants challenge those orders before this Court.
Whether compassionate appointment is a matter of right or a concession requiring scrutiny and satisfaction of policy norms.
Whether a dependent who has accepted and joined a compassionate post can, subsequently and after delay, claim appointment on a higher post on the basis of eligibility.
Whether delay and laches in seeking relief for higher appointment disentitle claimants to discretionary relief.
Whether a claim based on negative discrimination (i.e., others having been irregularly benefited) can sustain a direction to perpetuate the illegality in favour of the claimant.
• Compassionate appointment is a humanitarian exception to normal recruitment rules — aimed at preventing destitution after the sudden death of an earning family member. It is not a substantive component of the employment contract of the deceased, nor an absolute right of the dependent. Courts have consistently held that the grant is a concession and must be administered on the basis of stated policy, statutory prescriptions and reasoned assessment of the family's financial needs.
• Where a dependent applies for compassionate appointment, accepts the post offered and joins service, the object of alleviating immediate financial distress is ordinarily fulfilled. Judicial authorities have held that a second recourse to seek a higher post on compassionate grounds after acceptance would amount to "endless compassion" and is impermissible. Eligibility for a higher post (on academic or other qualifications) does not, by itself, translate into an entitlement to be placed on that post by way of compassionate concession.
• The element of immediacy is central to compassionate relief. Significant delay by the applicant in pursuing a higher claim — particularly after having taken up employment on the initial compassionate posting — weakens the claim and may indicate changed family circumstances or alternative sources of livelihood having arisen. Courts exercise discretion to refuse belated claims where delay is unexplained or unreasonable.
• A claimant cannot invoke Article 14 to compel the perpetuation of an illegality earlier committed in favour of another; negative equality is not a permissible ground to extend unlawful advantage. Courts will not order repetition of an earlier irregularity simply because a third party benefited improperly.
The respondents applied for compassionate appointment and were offered the post of Sweeper (Class IV), which they accepted and joined (dates recorded). Thereafter, after a gap of years (three years in one case; nine years in another), they sought judicial relief for appointment to the higher post of Junior Assistant.
The High Court directed appointment to the higher post with backdated effect. On the established principles above, the High Court erred in permitting a post‑consummation re‑consideration and in effectively converting a humanitarian concession into a substantive recruitment avenue.
The respondents' delay in approaching the court, their prior acceptance of the compassionate appointment, and the absence of any demonstration that the immediate financial exigency persisted or that statutory policy mandated reconsideration, render their claims unsustainable.
The invocation of parity with other beneficiaries cannot validate the claim, since courts must not perpetuate or clone irregularities.
Appeals allowed.
The impugned judgments of the Madras High Court dated 3.7.2018 and the subsequent review order dated 31.1.2023 are set aside to the extent they direct appointment of the respondents on the post of Junior Assistant and grant any consequential monetary relief from the date of judgment.
Consequential writ petitions (W.P. Nos. 16758‑16759 of 2015) filed by the respondents in the High Court are dismissed.
No order as to costs.
Municipal Law — Revision of property tax — Procedural challenge by writ petitioner in the guise of PIL — Locus and maintainability — Scope of judicial review — Doctrine of judicial restraint. A writ petition filed as a public interest litigation by a corporator challenging the municipal corporation's resolution revising property tax rates for 2017–18 to 2021–22 was held to be an impermissible attempt to substitute judicial scrutiny for administrative policy. The court emphasised that municipal tax policy and revenue measures are matters of executive/administrative prerogative, and judicial interference is permissible only where there is illegality, perverse decision-making, or patent non-compliance with statutory procedure. Where petitioner did not demonstrate authorization to represent public interest, and statutory remedies existed (appeal under Section 406, Maharashtra Municipal Corporations Act, 1949), the High Court erred in re‑examining the merits of the tax revision. The Division Bench’s order quashing the municipal resolutions was set aside; appeals allowed. Judicial review was confined to examining whether the procedure was followed and whether the decision was arbitrary or illegal; absent such infirmity, courts must defer to policy decisions of municipal bodies.
Akola Municipal Corporation (AMC) revised property tax assessment methodology and rates for the five‑year period 2017–18 to 2021–22 by resolutions dated 3 April 2017 and modified 19 August 2017.
The revision followed a door‑to‑door survey and engagement of a technical consultant (tender floated; Sthapatya Consultancy Pvt. Ltd. awarded work) to prepare an integrated GIS‑based database and assessment software, addressing a long gap in reassessments since circa 2001.
Dr. Zishan Hussain (a corporator), filed PIL No. 42 of 2018 in the Bombay High Court (Nagpur Bench) seeking quashing of the revision on grounds of procedural irregularity and arbitrariness; he did not claim to represent the entire citizenry and had statutory remedies under Section 406 MMA.
The High Court allowed the PIL, quashed the municipal resolutions and orders, and directed relief in favour of the writ petitioner; AMC appealed to this Court.
Whether the writ petition filed as a PIL by a corporator was maintainable to challenge AMC’s tax revision, given the existence of statutory remedies and absence of public‑authorisation.
Whether the High Court exceeded its jurisdiction by reassessing the merits of AMC’s policy decision increasing property tax rates, rather than confining review to procedural legality.
Whether the municipal corporation’s act of revising taxes after a long interregnum was per se arbitrary or unreasonable, warranting judicial intervention.
• The petition was filed as a PIL but the petitioner was a corporator who did not assert authorization to represent the public at large. The Court treated the filing as raising primarily a private grievance masked as PIL. Where a petitioner lacks proper locus or authority and statutory remedies are available, courts must scrutinise maintainability. Section 406 MMA offers an efficacious remedy against tax assessments/revisions.
• The Court observed the possibility that the writ petition may have been motivated by business or personal interest, particularly given challenge to the tender and award to the consultant.
• The jurisprudence of this Court establishes that economic and fiscal policy decisions (including tax fixation) lie within the domain of the legislature/executive/municipal authority; courts must exercise restraint and cannot substitute their view of policy or economics where decision‑making is within statutory authority and the procedure followed is lawful (citations: Shri Sitaram Sugar Co. Ltd. v. Union of India; BALCO Employees' Union v. Union of India; Kirloskar Ferrous Industries Ltd. v. Union of India).
• Judicial interference in PILs is warranted only where there is demonstrable dereliction of constitutional or statutory obligations, perversity, or manifest illegality. Courts should limit review to legality and reasonableness of the process adopted — not to the substantive wisdom of the policy.
• AMC had not revised property taxation since circa 2001; a robust revenue‑generation need existed to fund municipal functions. AMC procured expert assistance, carried out survey and valuation exercises, and formulated a resolution to revise ratable/expected letting values for the 2017–22 period.
• The petitioner did not adduce material showing the procedure adopted was ex facie arbitrary, perverse, or contravened statutory provisions. The High Court, however, substituted its own view and conducted a merits‑based reappraisal of the policy choice — beyond permissible judicial review.
• Given the admitted existence of statutory remedies and the limited grievance confined to procedure, the appropriate course was to confine review to whether statutory mandates were ignored in a manner that vitiates the exercise. No such showing was made.
The appeals are allowed.
The judgment of the High Court dated 9 October 2019 in PIL No. 42 of 2018 and the Review order dated 24 January 2020 are set aside.
The Court held that: (i) the writ petition filed as a PIL by the corporator was not a proper vehicle to displace the statutory remedies and to review economic policy; (ii) the High Court exceeded the scope of judicial review by reassessing the wisdom of AMC’s tax revision; and (iii) absent material demonstrating procedural illegality, perversity or arbitrariness, the municipal decision must stand.
No order as to costs. Pending applications, if any, stand disposed of.
Municipal Law — Revision of property tax — Procedural challenge by writ petitioner in the guise of PIL — Locus and maintainability — Scope of judicial review — Doctrine of judicial restraint. A writ petition filed as a public interest litigation by a corporator challenging the municipal corporation's resolution revising property tax rates for 2017–18 to 2021–22 was held to be an impermissible attempt to substitute judicial scrutiny for administrative policy. The court emphasised that municipal tax policy and revenue measures are matters of executive/administrative prerogative, and judicial interference is permissible only where there is illegality, perverse decision-making, or patent non-compliance with statutory procedure. Where petitioner did not demonstrate authorization to represent public interest, and statutory remedies existed (appeal under Section 406, Maharashtra Municipal Corporations Act, 1949), the High Court erred in re‑examining the merits of the tax revision. The Division Bench’s order quashing the municipal resolutions was set aside; appeals allowed. Judicial review was confined to examining whether the procedure was followed and whether the decision was arbitrary or illegal; absent such infirmity, courts must defer to policy decisions of municipal bodies.
Akola Municipal Corporation (AMC) revised property tax assessment methodology and rates for the five‑year period 2017–18 to 2021–22 by resolutions dated 3 April 2017 and modified 19 August 2017.
The revision followed a door‑to‑door survey and engagement of a technical consultant (tender floated; Sthapatya Consultancy Pvt. Ltd. awarded work) to prepare an integrated GIS‑based database and assessment software, addressing a long gap in reassessments since circa 2001.
Dr. Zishan Hussain (a corporator), filed PIL No. 42 of 2018 in the Bombay High Court (Nagpur Bench) seeking quashing of the revision on grounds of procedural irregularity and arbitrariness; he did not claim to represent the entire citizenry and had statutory remedies under Section 406 MMA.
The High Court allowed the PIL, quashed the municipal resolutions and orders, and directed relief in favour of the writ petitioner; AMC appealed to this Court.
Whether the writ petition filed as a PIL by a corporator was maintainable to challenge AMC’s tax revision, given the existence of statutory remedies and absence of public‑authorisation.
Whether the High Court exceeded its jurisdiction by reassessing the merits of AMC’s policy decision increasing property tax rates, rather than confining review to procedural legality.
Whether the municipal corporation’s act of revising taxes after a long interregnum was per se arbitrary or unreasonable, warranting judicial intervention.
• The petition was filed as a PIL but the petitioner was a corporator who did not assert authorization to represent the public at large. The Court treated the filing as raising primarily a private grievance masked as PIL. Where a petitioner lacks proper locus or authority and statutory remedies are available, courts must scrutinise maintainability. Section 406 MMA offers an efficacious remedy against tax assessments/revisions.
• The Court observed the possibility that the writ petition may have been motivated by business or personal interest, particularly given challenge to the tender and award to the consultant.
• The jurisprudence of this Court establishes that economic and fiscal policy decisions (including tax fixation) lie within the domain of the legislature/executive/municipal authority; courts must exercise restraint and cannot substitute their view of policy or economics where decision‑making is within statutory authority and the procedure followed is lawful (citations: Shri Sitaram Sugar Co. Ltd. v. Union of India; BALCO Employees' Union v. Union of India; Kirloskar Ferrous Industries Ltd. v. Union of India).
• Judicial interference in PILs is warranted only where there is demonstrable dereliction of constitutional or statutory obligations, perversity, or manifest illegality. Courts should limit review to legality and reasonableness of the process adopted — not to the substantive wisdom of the policy.
• AMC had not revised property taxation since circa 2001; a robust revenue‑generation need existed to fund municipal functions. AMC procured expert assistance, carried out survey and valuation exercises, and formulated a resolution to revise ratable/expected letting values for the 2017–22 period.
• The petitioner did not adduce material showing the procedure adopted was ex facie arbitrary, perverse, or contravened statutory provisions. The High Court, however, substituted its own view and conducted a merits‑based reappraisal of the policy choice — beyond permissible judicial review.
• Given the admitted existence of statutory remedies and the limited grievance confined to procedure, the appropriate course was to confine review to whether statutory mandates were ignored in a manner that vitiates the exercise. No such showing was made.
The appeals are allowed.
The judgment of the High Court dated 9 October 2019 in PIL No. 42 of 2018 and the Review order dated 24 January 2020 are set aside.
The Court held that: (i) the writ petition filed as a PIL by the corporator was not a proper vehicle to displace the statutory remedies and to review economic policy; (ii) the High Court exceeded the scope of judicial review by reassessing the wisdom of AMC’s tax revision; and (iii) absent material demonstrating procedural illegality, perversity or arbitrariness, the municipal decision must stand.
No order as to costs. Pending applications, if any, stand disposed of.
Prevention of Corruption Act, 1988 — Section 18A; Code of Criminal Procedure, 1973 — Section 102 — Seizure v. Attachment — Distinction — Applicability. Where investigation under the Prevention of Corruption Act, 1988 ("PC Act") disclosed alleged disproportionate assets held by a public servant and his relatives, police exercised powers under Section 102 CrPC to freeze bank accounts and seize certain monetary instruments. The High Court set aside the seizure, relying on earlier pronouncements treating the PC Act as a self-contained code governing attachment/confiscation under Section 18A and the Criminal Law Amendment Ordinance, 1944. Held: The power to seize under Section 102 CrPC and the power to attach/confiscate under Section 18A read with the Ordinance are distinct in purpose, scope and procedure; they are not mutually exclusive. Section 102 CrPC is an investigative power available to police to secure property that may be evidence or alleged to be proceeds/linked with an offence; Section 18A/Ordinance prescribes a separate, judicially supervised procedure for attachment/confiscation with substantive consequences. A prior decision (Ratan Babulal Lath) which summarily characterized the PC Act as a complete code without detailed factual analysis does not constitute binding ratio on the narrow question of seizure under Section 102. Where seizure under Section 102 was exercised in aid of investigation and reported as required, the action is sustainable, subject to assessment of whether retention remains necessary following completion of investigation. De-freezing orders granted without addressing statutory safeguards and post-investigation consequences are liable to be set aside with directions calibrated to the status of investigation and present position of funds. Appeal allowed in part.
A preliminary enquiry by the Anti-Corruption Branch (ACB), West Bengal, targeted the accused Prabir Kumar Dey Sarkar. Material alleged substantial unexplained assets vis-à-vis declared income for the check period (2007–2017).
FIR No. 09/19 registered; investigation revealed numerous fixed deposits and bank deposits in the names of the main accused and relatives including the respondent (father).
Police froze several fixed deposits and bank accounts under Section 102 CrPC. Application to de-freeze was rejected by the City Sessions Court (28.03.2023); subsequently, the Calcutta High Court set aside the freezing order (04.10.2024) holding that Section 102 could not be invoked where the PC Act and Section 18A governed attachment.
Sanction for prosecution against the main accused was granted (22.04.2024) and chargesheet filed (13.05.2024). The State challenged the High Court order by way of this appeal.
Whether the power of seizure under Section 102 CrPC can be lawfully exercised by investigative authorities in proceedings initiated solely under the Prevention of Corruption Act, 1988.
Whether Section 18A of the PC Act and the procedural regime under the Criminal Law Amendment Ordinance, 1944 are mutually exclusive of the investigative powers under Section 102 CrPC.
Whether the decision in Ratan Babulal Lath v. State of Karnataka (2022) constitutes a binding precedent to the effect that the PC Act is an exhaustive code precluding recourse to Section 102 CrPC.
Textual and functional distinctions: Section 102 uses the language of seizure and empowers any police officer to take possession of property alleged or suspected to have been stolen or found under suspicious circumstances. The Ordinance/Section 18A contemplates attachment and confiscation by an expressly judicial process (application to a District Judge/Special Judge, affidavits, ad-interim attachment, show-cause, hearing and opportunity to furnish security).
Comparative statutory practice: Parallel statutes (PMLA, Income-tax Act) evidence that attachment/confiscation is a consequence requiring structured, deliberative and judicially supervised steps. Seizure under Section 102 is immediate and investigative in character, often aimed at securing evidence and preventing tampering or dissipation in the course of a criminal probe.
Precedent: This Court's jurisprudence recognises that police may seize bank accounts/passports under Section 102 where the property is related to the commission of an offence (see Tapas D. Neogy, Suresh Nanda, Teesta Setalvad). Freezing under Section 102 must be to aid investigation; it is not in itself an attachment yielding final proprietary consequences.
Reporting requirement: Section 102(3) mandates that the seizure be reported to the Magistrate "forthwith" — meaning as soon as reasonably possible given context and investigatory exigencies (Shento Varghese). Delay, if satisfactorily explained, does not automatically vitiate seizure; unreasonable delay may invite departmental consequences but does not necessarily undo valid investigative acts.
Investigative adequacy: The sustaining of a Section 102 action requires demonstration that retention served investigatory needs — e.g., risk of evidence loss, likelihood of dissipation, or direct nexus to offence. Where investigation is complete, continued retention must be justified; affected parties may seek release or be directed to offer security/bank guarantees.
What constitutes ratio decidendi: Precedent binds where the court lays down legal principles tied explicitly to material facts and reasoning; obiter or perfunctory formulations lack binding force. A "code in itself" conclusion requires careful enquiry into whether the statute comprehensively regulates the field and excludes operation of other laws.
Ratan Babulal Lath: The Court finds that in that decision the statement that the PC Act is a complete code was not accompanied by a full exposition of facts and a reasoned comparison of the procedural provisions; hence it lacks the necessary elements of a binding ratio on the narrow question at hand. The present bench therefore treats Ratan Babulal Lath as not determinative for the question whether Section 102 CrPC may be used for seizure in aid of investigation under the PC Act.
Investigation and sanction were obtained; charges were framed and the chargesheet presented. Initial seizure/freeze of fixed deposits took place during the investigation. The Trial Court rejected the de-freezing application; the High Court inverted that view on the premise that Section 102 could not be used where Section 18A applies.
Having found the two regimes distinct, and the investigative power under Section 102 available, the present appeal determines that the High Court erred in setting aside the seizure on the sole ground that attachment procedure was not followed. The seizure was an investigatory step — not an attachment under the Ordinance — and thus permissible if reported/justified.
However, completion of the investigation and presentation of the chargesheet changes the calculus. Continued freezing must be re-examined: if funds have already been released or investigation yields no continuing need for retention, equitable remedies (re-deposit, security/bank guarantee, or release) become appropriate.
The appeal is allowed in part.
Holding: The powers under Section 102 CrPC and the powers under Section 18A of the Prevention of Corruption Act (via the Criminal Law Amendment Ordinance, 1944) are distinct and not mutually exclusive. Section 102 CrPC may be lawfully invoked by police in the course of investigation under the PC Act to seize or freeze bank accounts and other movable properties where there exists a nexus to the alleged offence or a risk to the investigation, subject to the safeguards and reporting obligations provided under law.
On the facts of this case: Given that investigation has concluded and a chargesheet has been filed, the court directs as follows:
If the frozen amounts have already been released pursuant to the High Court order, the respondent shall either re-deposit the said amount or furnish tangible security/bank guarantee for the like amount within three weeks from the date of this order.
If the amounts have not been released, the status quo as preserved by the stay of the High Court order shall be governed by the directions above and parties retain the right to pursue appropriate proceedings before the competent court to determine proprietary rights and the necessity of continued retention/attachment.
The rights and remedies of the parties under the PC Act, Ordinance and CrPC (including appeals and applications for release on furnishing security) are kept open.
Pending applications, if any, are disposed of in the terms above.
The 1996 Act employs the expression “terminate the proceedings” in multiple provisions (Ss. 25(a), 30(2), 32(2), 38(2)). Each provision embodies an independent statutory source of termination. The Act does not create a single, unified termination mechanism under S. 32, but contemplates different situations in which proceedings may be brought to an end. The power, preconditions, and consequences of termination differ in each section. Harmonious construction does not justify collapsing all forms of termination into S. 32(2)(c).
Under S. 25(a), if the claimant fails to file the statement of claim within the time under S. 23(1) without showing sufficient cause, the tribunal shall terminate the proceedings. Termination under S. 25(a) is pre-adjudicatory, arises before commencement of the hearing, and does not per se extinguish the tribunal’s mandate.
By virtue of SREI Infrastructure and Sai Babu, sufficient cause shown even after termination may permit recall, because S. 25 lacks the phrase used in S. 32(3) that “the mandate of the arbitral tribunal shall terminate”. Hence, termination under S. 25(a) does not operate as termination of mandate in the S. 32 sense.
Where respondent fails to file the statement of defence (S. 25(b)) or a party fails to appear or produce documents (S. 25(c)), the tribunal must continue with the proceedings. These provisions confer no termination power; they strengthen the legislative intent that tribunal must proceed toward adjudication.
If parties settle, the tribunal must terminate the proceedings under S. 30(2). Settlement award under S. 30(3)-(4) is treated as a final arbitral award with all statutory consequences.
S. 32(1) contemplates termination either (i) by final award or (ii) by an order under S. 32(2).
S. 32(2)(a)-(c) provides three situations: withdrawal of claim; termination by consent; and situations where continuation becomes “unnecessary or impossible”.
S. 32(3) provides that termination under S. 32(1)-(2) extinguishes the tribunal’s mandate, subject only to Ss. 33 and 34(4). This consequence is unique to termination under S. 32 and does not attach automatically to termination under S. 25 or S. 38.
The words “unnecessary” and “impossible” cannot be interpreted to include defaults already governed by S. 25. They address post-initiation circumstances making continuation futile, redundant, or incapable of completion.
Abandonment under S. 32(2)(c) requires conduct so “clinching and convincing” that it leads to only one conclusion: the claimant has given up the claim (Dani Wooltex). Mere non-appearance, absence of request for fixing hearings, or inertia does not constitute abandonment.
The tribunal must record reasoned satisfaction before invoking S. 32(2)(c); casual exercise defeats the object of the Act.
Under S. 38(2), failure of parties to deposit fees may lead the tribunal to suspend or terminate proceedings qua claim or counter-claim. This is a textually independent statutory termination.
Unlike S. 32(2)(c), S. 38(2) does not require satisfaction that continuation is unnecessary or impossible. Termination arises directly from statutory non-payment of costs.
Some High Courts (Delhi, Bombay, Telangana) had read S. 38 termination as falling within S. 32(2)(c). The Court rejects the conflation: S. 38 termination does not ipso jure extinguish tribunal’s mandate under S. 32(3) unless the statutory conditions of S. 32(2) are independently met.
Tribunal’s fee must be fixed with consent of parties. Unilateral fixation contrary to Fourth Schedule principles cannot constitute a lawful basis for invoking S. 38(2). Where fee determination was defective or contrary to ONGC v. Afcons Gunanusa JV, non-deposit cannot lawfully trigger suspension or termination.
Tribunal’s mandate terminates only upon:
(i) final award (S. 32(1)), or
(ii) termination under S. 32(2), or
(iii) circumstances under S. 14 (de jure/de facto inability).
Statutory terminations under S. 25 or S. 38 do not automatically extinguish mandate.
Revival after S. 32(2) termination is not permissible; revival after S. 25(a) is permissible on sufficient cause; revival after S. 38 depends on validity of underlying fee-fixation and statutory compliance.
Where termination is not under S. 32(2), S. 32(3) consequences do not ensue. Hence, a second petition under S. 11(5)/(6) for appointment of a substitute arbitrator is not automatically maintainable after a S. 38 termination.
If the dispute relates to legal termination of mandate, remedy lies under S. 14(2).
If the dispute relates to substitution of arbitrator upon valid termination of mandate, remedy lies under S. 15(2).
Maintainability depends on the true legal character of the termination order.
Parliament consciously enacted multiple termination points to ensure procedural efficiency while preserving tribunal’s duty to adjudicate. Imported UNCITRAL concepts do not mandate a single termination mechanism.
One line: all terminations ultimately traceable to S. 32(2)(c) (Datar Switchgear, Neeta Lalitkumar, PCL Suncon).
Other line: S. 25, S. 30, S. 38 operate independently; S. 32(2)(c) applies only when its specific preconditions are met (SREI Infrastructure, Sai Babu, Dani Wooltex).
The Court endorses the latter view: termination regimes are distinct; S. 32(2)(c) is not a residuary provision absorbing all termination scenarios.
Tribunal cannot adopt a passive role. Even absent party requests, tribunal must fix hearings, progress the matter, apply S. 25 where necessary, and cannot treat inaction as abandonment unless criteria of S. 32(2)(c) are strictly satisfied.
Factual snapshot. — Operational creditor (a registered partnership firm) served demand notice under Section 8 IBC (25.08.2021) for ₹1,79,93,691 (plus interest). The corporate debtor’s own ledger (communicated by CD on 04.08.2021) showed a closing debit balance of ₹2,49,93,690.80 and, after admitted payments, an outstanding ₹1,79,93,690.80. CD paid further ₹61 lakh after the demand notice. A separate CIRP against the CD was already pending (order dated 06.09.2021) when the Technical Director (suspended) addressed a reply on 20.11.2021 alleging short/faulty supply, two invoices not supplied and counterclaims; those allegations were not supported by contemporaneous documentary proof and the suspended director lacked authority. NCLT admitted the firm’s Section 9 petition (06.12.2023). NCLAT set aside the admission on the ground of a pre-existing dispute and delay; this Court restored the NCLT order.
Held (concise). — NCLAT’s order set aside. Where the corporate debtor’s own ledger and conduct (continued supplies/payments including ₹61 lakh after demand notice) demonstrate no bona fide pre-existing dispute, the adjudicating authority under Section 9 IBC is entitled to admit the petition; spurious or belated counter-assertions (especially by an unauthorized/suspended director) do not defeat the claim. Delay in filing Section 9 was not imputable to the operational creditor while an earlier CIRP against the CD was pending and an IRP was in place.
Legal principles applied.
The NCLT must determine (i) existence of operational debt, (ii) that debt was due and payable and (iii) whether a pre-existing dispute or pending suit/arbitration existed on the date of receipt of the demand notice — per Mobilox and subsequent authorities.
The adjudicating authority must separate “grain from chaff”: reject moonshine, spurious or tactical defences but not examine merits in depth; a defence must be bona fide and supported by credible material to displace admission.
Ledger entries, admissions and subsequent payments by the corporate debtor are material indicia that negate a pre-existing dispute.
Replies made by persons without authority (e.g., a suspended director) are of limited evidentiary value.
Delay in filing Section 9 may be excused where an earlier CIRP was pending and the operational creditor reasonably awaited the outcome (or learned of withdrawal) before filing its own petition.
Adjudicatory test under Section 9 (practical application).
At the admission stage under Section 9 IBC the adjudicating authority must satisfy itself that (a) an operational debt exists; (b) evidence shows the debt was due and unpaid; and (c) no real, bona fide pre-existing dispute or pending suit/arbitration existed on the date of receipt of the demand notice. In performing this function the authority must separate real disputes from spurious or tactical defences without conducting a full-blown trial of the merits.
Ledger and post-notice conduct as decisive indicia.
Where the corporate debtor’s own ledger/account statements record the debt (including a certified closing debit balance) and the corporate debtor continues supplies and makes payments even after correspondence complaining of defects, those facts constitute powerful evidence negating the existence of a bona fide pre-existing dispute — such ledger entries and payments may justify admission of a Section 9 petition.
Evidentiary weight of belated or unauthorized replies.
A belated reply asserting counterclaims or defects — especially when addressed by an officer who is, on record, suspended or otherwise unauthorised — is of limited probative value at the admission stage and cannot be allowed to defeat an operational creditor’s otherwise well-evidenced claim.
Delay excuse where an earlier CIRP existed.
An operational creditor is not to be prejudiced for not filing its own Section 9 while a separate CIRP against the corporate debtor is subsisting and an IRP is in place; reasonable delay to monitor or react to developments (e.g., withdrawal of the earlier CIRP) is not a ground, by itself, to infer the existence of a pre-existing dispute.
Rejection of moonshine defences.
The adjudicating authority must reject ‘moonshine’ defences — i.e., fictitious, speculative, unparticularised or inflated counterclaims — and admit an operational creditor’s petition where the defence lacks credible documentary foundation and appears designed only to delay or defeat recovery.
Operative consequence in the present case. — NCLAT erred in treating formulaic/alleged defects and an unauthorised, belated rebuttal as a bona fide dispute. The NCLT’s admission order (06.12.2023) is restored; the corporate debtor’s ledger, subsequent payments and absence of credible contemporaneous counter-evidence made the Section 9 admission appropriate.
Facts. — Appellants purchased/held title to a parcel of land (sale deed 2020; vendor’s title traceable to 2014). On 25.01.2022 the informant (a member of a Scheduled Caste) filed a civil suit seeking reliefs including recovery of possession and, on the same date, an FIR was registered alleging that appellants had (i) fabricated documents to dispossess the informant and (ii) on 21.01.2022 had come to the land and started building a boundary wall and that two accused hurled caste-based abuses. The High Court refused to quash the FIR. On appeal to this Court the FIR was quashed.
Held. — Quashed FIR No.18 of 2022 (P.S. Kanke, Ranchi) and directed no further police proceedings against the accused named therein.
Points of decision / reasoning.
A criminal prosecution is not to be used as a tool for abuse of process; when the First Information Statement (FIS) and contemporaneous civil pleadings on the same date are inconsistent in material particulars, the criminal case may be prima facie shown to be mala fide or an abuse.
The plaint filed by the informant on the same date traced cause of action to earlier dates (Sept. 2020 — Dec. 2021) and made no reference to the alleged occurrence of 21.01.2022 as narrated in the FIS; that inconsistency undermines the truth of the FIS at the stage of considering quashing.
On the record the land was held under a sale deed in favour of the first appellant (2020) and the earlier title of the vendors was recorded (order of Deputy Collector, 2012); there was no pleading in the civil suit to set aside those sale deeds — hence there was no prima facie allegation of wrongful dispossession under Section 3(1)(g) SC/ST (PoA) Act.
The allegation of a casteist slur did not, on the material before the Court, raise an offence under Section 3(1)(s) of the SC/ST (PoA) Act because there was no averment that the slur was made in public view or in presence of the public (required to attract that provision on the facts).
In the totality of circumstances the FIR constituted an abuse of process; the High Court should have exercised its power to quash the FIR at the threshold.
Ratio decidendi.
Where contemporaneous documents (e.g., plaint filed the same day) are materially inconsistent with the allegations in the First Information Statement, and those inconsistencies demonstrate that the criminal complaint is manifestly untenable or mala fide, a court exercising jurisdiction under its inherent/quashing powers may set aside the FIR to prevent abuse of the criminal process.
A prima facie case for an offence under the SC/ST (Prevention of Atrocities) Act, 1989 — e.g., wrongful dispossession (s.3(1)(g)) or a casteist slur attracting s.3(1)(s) — must be shown on the record; if the pleadings and documents on file do not support the essential ingredients (e.g., dispossession, public character of abuse), the FIR may be quashed.
The coexistence of civil and criminal remedies does not preclude quashing of criminal proceedings where the criminal complaint is an evident misuse of process; the power to quash is appropriately exercised where prosecution is shown to be vexatious, mala fide or unsupported by even prima facie material.
Result. — Appeal allowed; FIR quashed; no order as to costs stated (Court directed that police take no further proceedings pursuant to the quashed FIR).
Contempt — Criminal contempt — Publication imputing improper motives to judiciary — Ingredients. — A publication which scandalises the Court or imputes improper motives to Judges can satisfy the ingredients of criminal contempt under the Contempt of Courts Act, 1971. The circular issued by the contemnor contained statements defeating public confidence in the judicial process and therefore prima facie attracted Section 2(c) and Section 12 of the Contempt Act.
Contempt — Proceedings — Show-cause and apology — Statutory discretion to remit. — Section 12(1) of the Contempt Act contemplates both punishment and remission. The proviso and Explanation thereto entitle the Court, if satisfied that an apology is bona fide, to discharge the contemnor or remit the punishment even after conviction. An apology shall not be rejected merely because it is qualified or conditional if the accused makes it bona fide.
Contempt — Acceptance of apology — Judicial approach. — Where the contemnor promptly appears on the show-cause, tenders an explanation and an unconditional apology at the earliest stage, the Court must examine the bona fides of the apology before proceeding to punish. If there is no material to show the apology lacks sincerity, the statutory discretion to remit should ordinarily be exercised in favour of mercy.
Contempt — Precedents — Ratio decidendi must be applied to materially similar facts. — Decisions holding that criticism imputing improper motives is not fair criticism (e.g., Rajendra Sail; D.C. Saxena; Roshan Lal Ahuja; Perspective Publications) must be applied with regard to their factual matrices. Observations in prior judgments which turn on particular facts do not constitute an inexorable ratio applicable in different circumstances.
Contempt — Remission warranted where apology is genuine on facts. — Where the contemnor promptly explains circumstances, accepts error, tenders an unqualified apology and there is no material to demonstrate bad faith, the ends of justice may be met by remitting the sentence imposed by the High Court rather than enforcing short custodial sentence and fine.
Result. — Conviction may stand where publication amounts to contempt, but exercise of discretion under Section 12(1) to remit punishment is appropriate where apology is bona fide and there is no material to impugn its genuineness.
Statutory balance between vindication of judicial dignity and mercy: Section 12(1) of the Contempt of Courts Act, 1971, read with its proviso and Explanation, creates a statutory balance: the judiciary retains power to punish conduct that scandalises the court, but also retains a discretion to remit punishment where the contemnor tendered a bona fide apology. The apology’s sincerity is the touchstone for exercising the remedial discretion.
Duty to scrutinise apology, not to reject mechanically: When an apology is tendered in response to a show-cause notice, the Court must inquire into its bona fides and not reject it simply because the impugned publication satisfied the ingredients of contempt. If the contemnor promptly appears, explains circumstances and makes an unqualified apology, and there is no material showing mala fides, the Court should ordinarily consider remission of the sentence.
Application of precedent requires factual parity: The applicability of earlier decisions which refused to accept apologies or which treated similar publications as unforgivable must be tested against their factual matrices. Isolated observations in prior rulings are not binding where the facts differ materially; only the ratio decidendi extracted from comparable factual situations binds.
Remission consistent with judicial prudence and public interest: Mercy and the power to remit are instruments of judicial prudence. Where apology is genuine, remission furthers the interests of justice while preventing the contempt jurisdiction from becoming an instrument to silence criticism rather than to uphold the rule of law.
Arbitration — Time-limit for arbitral award — Section 29A — Arbitrator becomes functus officio on expiry of statutory period — Under Section 29A(1) read with Section 23(4), pleadings must be completed within six months of entering reference; award must follow within twelve months thereafter. Parties did not seek extension under Section 29A(3). Upon expiry of the statutory period (28.02.2023), the sole arbitrator’s mandate stood terminated by operation of law and he became functus officio, subject to any extension ordered by the Court under Section 29A(4).
Section 29A(6) — Power to substitute arbitrator is independent of Sections 14 and 15 — Remedy under Sections 14 and 15 is distinct and operates on different grounds (de jure / de facto inability). Expiry of mandate under Section 29A(4) furnishes an independent statutory basis for substitution. Rejection of earlier petitions under Sections 14 and 15 (when mandate had not expired) does not bar substitution under Section 29A(6).
Extension of mandate impermissible when mandate has already terminated — High Court erred in extending the mandate of an arbitrator whose mandate had already expired under Section 29A(4). Upon termination of mandate, continuation of the same arbitrator is impermissible; substitution becomes obligatory.
Purport of Section 29A — Remedial provision — Applies to all pending arbitrations — Section 29A is remedial and ensures time-bound dispute resolution, in consonance with the object of the Act; it applies even to arbitrations pending on 30.08.2019 (Tata Sons Pvt. Ltd. v. Siva Industries, (2023) 5 SCC 421).
Covid-19 exclusion applies — Period from 15.03.2020 to 28.02.2022 excluded per In re Cognizance for Extension of Limitation (2022) 3 SCC 117.
Substituted arbitrator appointed — Mandate of sole arbitrator terminated; Court appoints Justice Najmi Waziri (Retd.) as substituted sole arbitrator; proceedings to continue from stage already reached; award to be rendered within six months.
Expiry of mandate under Section 29A(4) results in automatic termination, rendering the arbitrator functus officio, unless the Court extends the period. Since pleadings were completed on 19.11.2020 and the Covid-19 exclusion applied until 28.02.2022, the arbitrator was required to make the award by 28.02.2023. No extension was sought. Therefore, his mandate stood terminated by operation of law.
Section 29A(6) confers a substantive and distinct power on the Court to substitute the arbitrator whenever it extends time under Section 29A(4). This power does not depend on, nor is it limited by, the grounds for termination under Sections 14 and 15. Earlier dismissal of proceedings under Sections 14 and 15—when the mandate was still alive—has no bearing once the mandate expires under Section 29A.
Once the mandate has expired, continuation of the same arbitrator is impermissible, and the High Court’s extension of mandate was contrary to the statutory scheme. The legislative mandate of ensuring expeditious resolution (object of the Act) requires substitution when mandate ceases.
Section 29A is remedial and time-disciplining, applying even to pending arbitrations, and must be enforced strictly to prevent delay contrary to the Act’s object.
Arbitral proceedings must continue from the stage already reached upon substitution, ensuring continuity as mandated by Section 29A(6) and (7).
Workplace sexual harassment — Jurisdiction of Internal Complaints Committee (ICC) — Under the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (POSH Act), an ICC constituted at the workplace of the aggrieved woman may entertain a complaint against a “respondent” who is employed in a different department or workplace; the phrase “where the respondent is an employee” in Section 11(1) is a procedural trigger (directing application of the service rules applicable to that respondent) and does not operate as a jurisdictional bar requiring co-employment of the parties.
Statutory interpretation — Text, context and purpose — The POSH Act must be interpreted purposively as social-welfare legislation enacted to secure women’s right to a safe workplace (Articles 14, 15, 21); definitions of “workplace”, “employee” and “employer” are wide (notably Section 2(o)(v) covering places visited in course of employment) and a narrow, place-bound reading of Section 11 would frustrate the Act’s object and create practical and psychological barriers to access to remedies.
Procedure versus punitive authority — Two-stage scheme — The Act contemplates a two-stage process for government employees (investigation/fact-finding by the ICC and, if warranted, formal disciplinary action by the employer/disciplinary authority). An ICC’s fact-finding inquiry at the aggrieved woman’s workplace may form the basis for disciplinary action by the respondent’s employer under service rules; the ICC need not itself be the disciplining authority.
Interplay with CCS rules and administrative instructions — The statutory scheme accords with prior judicial directions (Vishaka; Medha Kotwal Lele) and administrative instruments (CCS (CCA) Rules, Rule 14(2) proviso and DoPT Office Memorandum dated 16.07.2015), which envisage that Complaints Committees can act as fact-finding/inquiring authorities and the disciplinary authority must act on ICC recommendations; cooperation by the respondent’s employer (Section 19(f)) is mandatory.
Prejudice and relief at interim stage — Where an aggrieved woman’s ICC has conducted only a preliminary/fact-finding inquiry, and no prejudice to the respondent is shown, courts should avoid interfering with ICC jurisdictional validity; disciplinary and other defenses remain available to the respondent in subsequent service/disciplinary proceedings and appeals.
Non-jurisdictional reading of “where the respondent is an employee” (Section 11(1))
The expression “where the respondent is an employee” in Section 11(1) functions as a conditional/procedural clause — it prescribes the procedure to be followed (i.e., apply service rules applicable to the respondent or the prescribed manner where no service rules exist) and does not restrict the competence of the ICC to entertain complaints merely because the respondent is employed in a different workplace. The section must be read as a whole; isolated reading of the word “where” to infer a territorial or workplace-based jurisdictional limitation would be contrary to the statutory scheme.
Purposive construction required by the POSH Act
The POSH Act is social-welfare legislation aimed at removing barriers to remedy for women subjected to sexual harassment. Its definitions of “workplace”, “employee” and “employer” are deliberately expansive (including places visited during course of employment) and require a purposive construction that allows the aggrieved woman to bring complaints before the ICC of her workplace where the incident occurred or is connected to, even if the respondent is employed elsewhere. A restrictive construction would defeat the legislative purpose and produce absurd and impracticable results.
Two-stage investigatory and disciplinary architecture; role of employer
Section 11 and Section 13 together envisage a two-stage process: (i) ICC performs preliminary/fact-finding inquiry and issues a report/recommendation, and (ii) the respondent’s employer/disciplinary authority acts on those recommendations (including initiating formal disciplinary proceedings under applicable service rules). The ICC’s inquiry is thus investigatory; final disciplinary sanctions are the responsibility of the employer — an ICC at the aggrieved woman’s workplace can validly perform the first stage even when the respondent is from another department.
Statutory duty of cooperation and safeguards against prejudice
The Act imposes on employers duties (Section 19) to cooperate with ICC inquiries and to act upon ICC reports (Section 13). Where the respondent alleges lack of access to material or procedural prejudice because the inquiry is being conducted outside his department, the proper remedy lies in raising those contentions during disciplinary proceedings or by invoking appellate remedies under the Act; absence of demonstrable prejudice at the interim stage is a reason to uphold the ICC’s proceedings.
Complementarity with CCS/administrative framework
The statutory scheme aligns with prior judicial directions and administrative rules (e.g., Medha Kotwal Lele, amendment to CCS (CCA) Rules, and DoPT OM of 16.07.2015) that treat Complaints Committees as appropriate fact-finding/inquiring authorities and prescribe mechanisms to ensure fairness in transition from fact-finding to formal disciplinary inquiry. These integrated instruments support the validity of ICC inquiries conducted at the aggrieved woman’s workplace against respondents from other departments.
Criminal — Bail — Applicability of statutory maximum-undertrial detention (s.436-A CrPC) — Section 436-A CrPC provides that where an undertrial has undergone detention for a period extending up to one-half of the maximum period of imprisonment specified for the offence, the accused shall be released on personal bond (subject to provisos) — but the statutory entitlement excludes “an offence for which the punishment of death has been specified” — accordingly, where the charges include offences for which death is a possible punishment, Section 436-A cannot be invoked to compel release; reliance by a court upon s.436-A in such circumstances is legally unsustainable.
Constitutional law — Article 21 — Speedy trial and prolonged pre-trial incarceration — The right to life and personal liberty (Art.21) embraces the right to a speedy trial; unduly protracted incarceration of undertrials engages Art.21 and, in appropriate cases, may justify enlargement on bail even in serious offences — but the entitlement is not absolute and must be balanced against the gravity of the offence, risk of abscondence, tampering/witness influence and national/public interest considerations.
Special/terror-laws — Reverse burden statutes (UAPA) and fairness — Where a statute imposes a reverse burden or creates presumptions adverse to the accused (e.g., UAPA), prolonged delay in trial prejudices the accused disproportionately because incarceration restricts access to means of rebuttal; the State and courts must ensure effective, practical safeguards — speedy trial, adequate prosecutorial resources, access to material and legal aid — so that presumptions do not ossify into de facto convictions.
Appellate interference — SLP against High Court grant of bail — Supreme Court ordinarily will not interfere with a High Court’s discretionary grant of bail unless there is perversity, illegality, failure to consider relevant factors, or other grounds demonstrating that discretion has been exercised improperly; mere heinousness of the offence or public outcry is not by itself a sufficient basis for interference if the High Court has balanced competing considerations and the accused has not misused liberty.
Remedial and administrative directions — Expeditious trial in long-pending matters — Where long delays have occurred, courts may issue prospective in-personam and in-rem administrative directions: trial courts to take daily listing, minimise adjournments, record reasons for past delay; High Courts to review lists of reverse-burden cases, ensure sufficient special courts/prosecutors and prompt assignment of legal-aid counsel; periodic reports to administrative judges to be furnished — such directions are appropriate to protect Art.21 rights and the integrity of criminal adjudication.
Statutory exclusion — s.436-A is not available where death is a possible punishment. The Court construed Section 436-A CrPC (and its successor provision in BNSS) strictly: the statute explicitly excludes offences for which death is one of the prescribed punishments; therefore a person prosecuted for such offences cannot claim release under Section 436-A as of right. This legal construction of the statute is determinative and obligatory.
Balance between Article 21 and public interest — proportionality governs bail in grave offences. While the right to a speedy trial and liberty under Article 21 may compel release of undertrials who have suffered prolonged incarceration, the grant of bail in offences that gravely affect national security or public order requires a calibrated balancing exercise — considering (inter alia) gravity of charges, punishment on conviction, prima facie evidence, risk of absconding, likelihood of tampering, stage of trial and whether the accused has suffered manifest prejudice from delay. Where the balancing favours liberty because of inordinate delay and absence of evidence of misuse of bail, enlargement may be warranted notwithstanding the seriousness of the allegations.
Procedural fairness in reverse-burden regimes — State must provide practical avenues for defence. The imposition of reverse legal burdens (as in UAPA) imposes a correspondingly heightened duty on the State and courts to ensure that accused persons have realistic and effective means to rebut statutory presumptions. Prolonged pre-trial detention severely handicaps an accused’s ability to marshal evidence, witnesses and expert assistance; consequently, when delays are endemic, courts must take remedial steps — administrative and procedural — to protect the accused’s right to a fair contest.
Standard for appellate interference with bail orders. The Supreme Court will intervene against a High Court’s grant of bail only upon demonstrable illegality, perversity, failure to apply relevant legal principles, or where the bail order undermines public interest in a manner not justifiable on the record. A mere reiteration of the heinousness of the charge is insufficient absent a showing that the High Court misapplied legal standards or overlooked material considerations.
Criminal law — Trial / Appeal — Assault / outraging modesty / offences under SC/ST (Prevention of Atrocities) Act — Convictions under Sections 354, 323, 294, 34 IPC and Section 3(1)(xi) SC/ST Act by trial court; appeal dismissed by High Court — Whether prosecution proved offences beyond reasonable doubt — Material contradictions in FIR, depositions and medical evidence; lack of independent / post-occurrence witnesses though many said to be present; hostile witness gave statements favourable to accused which had been ignored by High Court — Medical evidence showed only simple injuries consistent with fall or dragging; no evidence that accused targeted victim because she belonged to Scheduled Caste — Held: Prosecution case suffers from major contradictions and improbabilities; the appellate court should have weighed hostile witness evidence and the inconsistencies; convictions are unsafe and set aside. Appeal allowed; appellants acquitted and discharged.
Standard of proof and appellate scrutiny: Conviction must rest on evidence proving guilt beyond reasonable doubt. Appellate courts must test prosecution testimony for internal consistency, corroboration and probability; they must not ignore material inconsistencies or favourable portions of testimony of hostile witnesses.
Material contradictions in versions (FIR v. court deposition): The FIR alleged that both accused were present and that the male accused teased and abused the victim knowing her caste. At trial the victim’s version differed as to whether the second accused accompanied the first or was called by phone. Discrepancies as to how PW-2 (the brother) came to know of the incident (he said he was informed; victim said he ran after hearing her scream) were material and undermined credibility.
Absence of independent witnesses despite claimed public presence: PW-2 asserted that many locality persons had seen the incident (Ganesh Puja pandal nearby), yet no independent public witness was produced. The non-production of other witnesses when many were allegedly present is a circumstance militating against prosecution story and weakens reliance on oral testimony of interested witnesses.
Medical evidence did not support prosecution’s embellished narrative: Medical officer (PW-5) recorded only simple injuries (scratch marks) on the victim and PW-2; these injuries were consistent with falling or dragging and were simple in nature. The prosecution’s claims of nail-marks, bleeding from nose and mouth, and serious assault were not borne out by the medical report; such divergence is fatal to the prosecution case.
Hostile witness whose portions favour defence must be considered: PW-4 turned hostile and deposed to a scuffle at the pandal and that defendants may merely have stepped on feet, provoking an altercation. The High Court erred in disregarding this evidence entirely: portions of a hostile witness’s testimony that are consistent with defence or prosecution deserve close scrutiny and may be accepted in whole or part.
Lack of proof of motive under SC/ST Act / statutory ingredients not established: There was no testimony in court that the assault/teasing was committed because the victim belonged to Scheduled Caste; the High Court’s conclusion that offence under SC/ST Act was committed for that reason was perverse and unsupported by the record.
Appellate conclusion — acquittal justified: Given the cumulative contradictions, omissions, absence of independent corroboration and medical findings consistent with an alternative hypothesis (scuffle / fall), the convictions were unsafe. The Supreme Court set aside the convictions and sentences of both appellants, ordered their release and discharged them from bail.
Insolvency and Bankruptcy Code, 2016 — Liquidation — Private sale under Regulation 33(2) of the Liquidation Process Regulations, 2016 — Distinction between Reg. 33(2)(c) (private sale at price higher than reserve of failed auction) and Reg. 33(2)(d) (private sale with prior NCLT approval) — Whether sale to appellant constituted a contractual arrangement attracting Section 74, Contract Act — Forfeiture of deposit / payments upon failure to adhere to extended timelines — Power of NCLT under Rule 15 of the NCLT Rules, 2016 to impose conditions including forfeiture when extending time — Appellant’s conduct including suppression before High Court — Applicability of approbate–reprobate principle — Held: Sale was under Reg. 33(2)(d), not Reg. 33(2)(c); transaction not a private commercial contract but one supervised by NCLT; forfeiture clause validly imposed under Rule 15; appellant accepted benefits of extension but defaulted; no relief available; Section 74 Contract Act inapplicable. NCLAT majority correctly upheld forfeiture and dismissal of appeals. Appeals under Section 62 IBC dismissed.
Nature of sale — Regulation 33(2)(d), not 33(2)(c):
The auction process for Raichur assets had fully failed by July 2021; SCC had shifted to scrap-sale valuation. Therefore, the appellant’s offer of 09.09.2021 was not an offer higher than a reserve price in a failed auction under Reg. 33(2)(c) but a private sale requiring prior NCLT approval under Reg. 33(2)(d). The liquidator correctly approached NCLT, and the approval order dated 22.03.2022 governed the transaction.
Sale not a ‘contract’ under the Contract Act:
When sale occurs under NCLT supervision, pursuant to IBC and Liquidation Regulations, terms of sale emanate from the Adjudicating Authority, not from consensual contractual stipulations. Thus, Section 74 of the Contract Act (liquidated damages/penalty) does not apply. The forfeiture clause was an NCLT-imposed condition, not a term of a commercial bargain.
NCLT’s power to impose terms when granting extension:
Under Rule 15 of the NCLT Rules, NCLT may extend time “upon such terms as justice may require.” Extension granted on 29.06.2022 was accompanied by an explicit forfeiture clause—failure to meet the new deadlines would result in forfeiture of the entire amount paid. NCLT had jurisdiction to impose such condition, especially given the delays and IBC’s time-bound liquidation mandate.
Appellant’s own commitments and failure to honour them:
The appellant’s offer expressly promised to pay the entire balance within 15 days from NCLT approval (i.e., from 22.03.2022). It failed. SCC showed leniency by granting extension till 30.05.2022; NCLT later extended time further but subject to forfeiture. Appellant paid only part amounts (₹1.50 crore thereafter) and failed to comply with extended deadlines. Its default triggered the forfeiture as per the NCLT order.
Approbate and reprobate — conduct disentitles relief:
The appellant accepted the benefit of the extension by making further payments after 29.06.2022, but simultaneously attempted to challenge the very order and its forfeiture condition. A party cannot take advantage of an order and later repudiate the conditions attached to it.
Suppression and abuse of process before High Court:
The appellant filed a writ petition on 05.09.2022 suppressing the fact that an appeal against the 29.06.2022 order had already been filed before NCLAT (on 13.08.2022). This conduct demonstrated lack of bona fides and justified refusal of equitable relief.
Stakeholders’ interest and IBC time-sensitivity:
Delay in liquidation erodes asset value and defeats IBC’s objectives. The Court reiterated Kridhan Infrastructure v. Venkatesan Sankaranarayan (2021): time is essential in IBC proceedings. The forfeiture clause and rejection of further indulgence were justified to ensure timely conclusion of liquidation.
Subsequent resale irrelevant to forfeiture question:
Even though Raichur assets ultimately sold for ₹145.38 crore (higher than appellant’s ₹105.21 crore offer), the financial creditors still suffered haircuts. Forfeiture is assessed vis-à-vis breach of NCLT’s stipulated timelines, not subsequent market appreciation.
Final holding:
NCLAT’s majority correctly dismissed the appellant’s appeals. No jurisdictional or legal error exists in upholding forfeiture. Appeals under Section 62 IBC lie only on questions of law; none were made out. Supreme Court dismissed the appeals.
Constitutional / Statutory Interpretation — Public Premises (Eviction of Unauthorised Occupants) Act, 1971 (“PP Act”) vis-à-vis State Rent Control enactments — Whether PP Act (a central statute) overrides State rent control laws in respect of premises which fall within definition of “public premises” under s.2(e) — Whether two-Judge decision in Suhas H. Pophale (2014) drawing a prospective-only application and exempting tenants in occupation prior to 16-9-1958 (or prior to date premises became ‘public premises’) was correct — Held: Ashoka Marketing (Constitution Bench, 1990) and subsequent three-Judge authority(s) correctly decide law; PP Act is a special enactment whose object and policy demonstrate overriding operation over State Rent Control Acts to the extent premises fall within s.2(e); Suhas H. Pophale is overruled to the extent inconsistent. The PP Act applies to tenancies created either before or after coming into force of PP Act provided (i) the premises fall within s.2(e) and (ii) occupation is unauthorised (including where tenancy is terminated under s.106 T.P. Act). “Occupation” (continuous concept) and not merely “possession” is the relevant test.
Primary holding: Where premises fall within the definition of “public premises” under Section 2(e) of the PP Act, and occupation of such premises is “unauthorised” within the meaning of Section 2(g) (for example, after termination of tenancy under Section 106, T.P. Act), the statutory machinery of the PP Act applies and will, by reason of its object, policy and later legislative will, override inconsistent provisions of State Rent Control legislation.
Status of Suhas H. Pophale (2014): The two-Judge Bench decision in Suhas H. Pophale, insofar as it held that PP Act applies only prospectively (i.e., excluding occupants in possession prior to 16-9-1958 or prior to date premises became public premises), stands in conflict with the Constitution-Bench decision in Ashoka Marketing (1990) and the three-Judge precedent in M/s. Jain Ink. The court holds Suhas H. Pophale incorrect and overrules it to the extent inconsistent.
Precedential hierarchy & stare decisis: A Bench of lesser strength cannot override or depart from law laid down by a larger Bench. Where the two-Judge view conflicts with earlier Constitution-Bench / three-Judge authorities on materially similar facts, the larger-Bench jurisprudence prevails.
Principles of statutory interpretation applied: Both PP Act and State Rent Control Acts are “special” enactments. When two special statutes overlap, conflict must be resolved by reference to (i) legislative purpose, (ii) policy and object, and (iii) clear intendment of the statutory language. The PP Act — designed to provide a special, speedy regime for eviction from public premises — must be given overriding effect to carry out its purpose.
Occupation vs. possession; continuity of occupation: The material inquiry for applicability of PP Act is whether the person was in “occupation” of the public premises when the PP Act was enacted and, later, whether occupation became “unauthorised.” The term “occupation” is continuous in nature and not limited to a discrete moment of entry or “possession.”
Two conditions for PP Act to apply: (i) the tenanted premises must fall within the scope of s.2(e) (i.e., belong to or be taken on lease by a Central Government entity or specified companies/corporations), and (ii) the occupation must have become unauthorised (e.g., upon expiry/termination of tenancy, including after issuance of a s.106 T.P. Act notice).
Termination of tenancy as a mode of rendering occupation “unauthorised”: Determination of tenancy (e.g., by notice under Section 106 T.P. Act) is one statutory mode which can render continued occupation “unauthorised” and thus attract PP Act eviction procedure.
Non-dependence on mere physical possession: Invocation of PP Act does not depend exclusively on the moment of taking physical possession; rather, the test is whether occupation is unauthorised within the statutory definition and the premises are public premises as defined.
Practical consequence: Where both statutes arguably cover the same premises, occupants in unauthorised occupation of public premises cannot successfully invoke protections of State Rent Control Acts against eviction under the PP Act; the Estate Officer’s summary machinery under PP Act is available to central/public entities for recovery of possession.
Scope preserved: The judgment preserves that the PP Act operates only when both statutory conditions are met and leaves open other remedies where PP Act is inapplicable (e.g., proceedings under Rent Control Act or Small Causes Court where appropriate).
