Code of Criminal Procedure, 1973 – s. 482 – Powers of the High Court under – Banking financial institution sanctioned loan facilities to the borrowers, however, the borrowers defaulted – Banking institution auctioned the property and sold the shares of the borrowers for the recovery of its dues – Registration of FIR by the borrowers against the Banking institution and its officers, and investigation by the Enforcement Directorate – Writ petition before the High Court by the officers seeking quashing of FIR and as also consequential proceedings arising therefrom – Orders passed by the High Court staying the investigations of the FIRs and ECIR and restrained the investigating agencies from investigating into the cognizable offences as alleged in the FIRs and the ECIR – Propriety:Held: Inherent powers u/s. 482 do not confer any arbitrary jurisdiction on the High Court to act according to whims or caprice – Statutory power has to be exercised sparingly with circumspection and in the rarest of rare cases – Said order passed in utter disregard of the settled legal position – Without undermining the powers of the High Court u/s. 482 to quash the proceedings if the allegations made in the FIR or complaint prima facie do not constitute any offence against the accused, or if the criminal proceedings are found to be manifestly malafide or malicious, instituted with ulterior motive etc., the High Court could not have stayed the investigations and restrained the investigating agencies from investigating into the cognizable offences as alleged in the FIRs and the ECIR, particularly when the investigations were at a very nascent stage – In a way, by passing such orders of staying the investigations and restraining the investigating agencies from taking any coercive measure against the accused pending the petitions u/s. 482, the High Court granted blanket orders restraining the arrest without the accused applying for the anticipatory bail – Thus, the impugned orders passed by the High Court being not in consonance with the legal position, set aside – Impugned interim orders passed by the High Court qua the accused stands vacated. [Paras 20, 23-25] Judicial discipline – Principle of:Held: Judicial discipline and Judicial comity and demands that higher courts should follow the law – Extraordinary and inherent powers of the court do not confer any arbitrary jurisdiction on the court to act according to its whims and caprice. [Paras 24, 25]

* Author

[2024] 2 S.C.R. 311 : 2024 INSC 106

Directorate of Enforcement

v.

Niraj Tyagi & Ors.

(Criminal Appeal No. 843 of 2024)

13 February 2024

[Bela M. Trivedi* And Prasanna B. Varale, JJ.]

Issue for Consideration

Interim orders passed by the High Court staying the investigations

of the FIRs and the Enforcement Directorate, if justified.

Headnotes

Code of Criminal Procedure, 1973 – s. 482 – Powers of the

High Court under – Banking financial institution sanctioned

loan facilities to the borrowers, however, the borrowers

defaulted – Banking institution auctioned the property

and sold the shares of the borrowers for the recovery of

its dues – Registration of FIR by the borrowers against

the Banking institution and its officers, and investigation

by the Enforcement Directorate – Writ petition before the

High Court by the officers seeking quashing of FIR and as

also consequential proceedings arising therefrom – Orders

passed by the High Court staying the investigations of the

FIRs and ECIR and restrained the investigating agencies

from investigating into the cognizable offences as alleged

in the FIRs and the ECIR – Propriety:

Held: Inherent powers u/s. 482 do not confer any arbitrary

jurisdiction on the High Court to act according to whims or caprice

– Statutory power has to be exercised sparingly with circumspection

and in the rarest of rare cases – Said order passed in utter

disregard of the settled legal position – Without undermining the

powers of the High Court u/s. 482 to quash the proceedings if

the allegations made in the FIR or complaint prima facie do not

constitute any offence against the accused, or if the criminal

proceedings are found to be manifestly malafide or malicious,

instituted with ulterior motive etc., the High Court could not have

stayed the investigations and restrained the investigating agencies 

312 [2024] 2 S.C.R.

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from investigating into the cognizable offences as alleged in the

FIRs and the ECIR, particularly when the investigations were at a

very nascent stage – In a way, by passing such orders of staying

the investigations and restraining the investigating agencies from

taking any coercive measure against the accused pending the

petitions u/s. 482, the High Court granted blanket orders restraining

the arrest without the accused applying for the anticipatory bail

– Thus, the impugned orders passed by the High Court being

not in consonance with the legal position, set aside – Impugned

interim orders passed by the High Court qua the accused stands

vacated. [Paras 20, 23-25]

Judicial discipline – Principle of:

Held: Judicial discipline and Judicial comity and demands that

higher courts should follow the law – Extraordinary and inherent

powers of the court do not confer any arbitrary jurisdiction on the

court to act according to its whims and caprice. [Paras 24, 25]

Case Law Cited

Neeharika Infrastructure Pvt. Ltd. vs. State of

Maharashtra and Others, [2021] 4 SCR 1044 : (2021)

SCC Online SC 315 – relied on.

K. Virupaksha and Another vs. State of Karnataka and

Another, [2020] 2 SCR 1020 : (2020) 4 SCC 440; A.P.

Mahesh Cooperative Urban Bank Shareholders Welfare

Association vs. Ramesh Kumar Bung and Others, [2021]

6 SCR 850 : (2021) 9 SCC 152; State of Telangana

vs. Habib Abdullah Jeelani and Others, [2017] 1 SCR

141 : 2017 (2) SCC 779 – referred to.

List of Acts

Code of Criminal Procedure, 1973; Prevention of Money Laundering

Act, 2002.

List of Keywords

Quashing of FIR; Staying the investigations; Powers of the High

Court; Malafide or malicious criminal proceedings; Investigating

agencies; Enforcement Directorate; Inherent powers; Judicial

comity; Judicial discipline; Extraordinary powers; Money

laundering.

[2024] 2 S.C.R. 313

Directorate of Enforcement v. Niraj Tyagi & Ors.

Case Arising From

CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No.843

of 2024

From the Judgment and Order dated 13.07.2023 of the High Court of

Judicature at Allahabad in CRMWP No.10893 of 2023

With

Criminal Appeal Nos. 844 And 845 of 2024

Appearances for Parties

S.V. Raju, ASG, Siddhartha Dave, Sr. Adv., Udai Khanna, Rudra

Pratap, Talha Abdul Rahman, M Shaz Khan, Tushar Randhawa,

Rahul Sharma, Nandini Singh, Adnan Yousuf, Mukesh Kumar Maroria,

Advs. for the Appellant.

 Ardhendumauli Kumar Prasad, Sr. Adv./A.A.G, Ranjit Kumar, Dhruv

Mehta, Sr. Advs., Mahesh Agarwal, Rishi Agrawala, Ankur Saigal, Mr.

Ankit Banati, Kajal Dalal, E. C. Agrawala, Ms. Fauzia Shakil, Rajat

Singh, Ms. Rukhmini S. Bobde, Vivek Narayan Sharma, Sarthak

Chandra, Akshay Kumar, Ms. Ananya Sahu, Deepesh Singh, Arun

Pratap Singh Rajawat, Tishampati Sen, Ms. Riddhi Sancheti, Anurag

Anand, Mukul Kulhari, Anubhav Ray, Advs. for the Respondents.

Judgment / Order of the Supreme Court

Judgment

Bela M. Trivedi, J.

1. Leave granted.

2. The appellants being aggrieved by the interim orders dated

13.07.2023, 08.08.2023 and 13.09.2023 passed by the High Court

of Judicature at Allahabad in Criminal Misc. Writ Petition Nos.

10893/2023, 11837/2023 and 14053/2023 respectively, have preferred

the instant appeals. Vide the impugned orders, the High Court has

stayed the proceedings of the FIRs registered against the concerned

respondents-accused as also stayed the proceedings of ECIR No.-

ECIR/HIU-I/06/2023 registered by the Directorate of Enforcement

against the concerned respondents, and further directed not to take

any coercive action against the said respondents pending the said 

314 [2024] 2 S.C.R.

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writ petitions. All the appeals being interconnected with each other,

they were heard together and it would be appropriate to decide them

by this common judgment.

3. The respondent India Bulls Housing Finance Limited (IHFL) is a nonbanking financial institution incorporated under the provisions of the

Companies Act. IHFL deals with the public money. The major source

of funds for the loans to be advanced by IHFL, is either the loans

from the other banks or from the public in the form of non-convertible

debentures. The respondents Niraj Tyagi is the President (Legal) and

Reena Bagga is the authorized officer of the IHFL.

4. M/s Kadam Developers Pvt. Ltd. (hereinafter referred to as M/s

Kadam) was one of the Shipra Group entities. M/s Kadam had

a sub-lease of a parcel of land admeasuring 73 acres in Sector

128, Noida, which was allotted to it by the predecessor of Yamuna

Expressway Industrial Development Authority (hereinafter referred to

as the YEIDA). The 100% equity shares of M/s Kadam were held by

Shipra Estate Limited (98%); Mohit Singh (1%) and Bindu Singh (1%).

5. Between 2017-2020, IHFL had sanctioned 16 loan facilities to the

tune of Rs. 2,801 crores to the Shipra Group/ Borrowers comprising

of Shipra Hotels Ltd., Shipra Estate Ltd. and Shipra Leasing Pvt.

Ltd. for the purposes of the construction and/or development of

Housing/Residential Projects. Against the said sanctioned loan, a

sum of approximately 1995.37 crores was disbursed. The financial

assistance was secured by the Shipra Group by executing 22

pledge agreements whereby the shares of various companies were

pledged in favour of IHFL. A pledge agreement was also entered

into by Shipra Groups and M/s Kadam with IHFL pledging 100%

equity shares (dematerialized) of M/s Kadam to secure the loan. The

mortgaged properties also included 73 acres of land at Noida that

had been sub-let to M/s Kadam by YEIDA, and the property called

‘Shipra Mall’ in Ghaziabad.

6. There being defaults in the repayment of loan amount, IHFL had

issued notices recalling all the loans advanced to the Shipra Group

amounting to Rs. 1763 crores (approx.). The said notices came to

be challenged by the Shipra Group before the Delhi High Court, by

filing FAO(OS) COMM 59/2021. The Delhi High Court vide order

dated 16.04.2021 recorded that IHFL could proceed further with the

recovery proceedings, however the sale of shares should be done 

[2024] 2 S.C.R. 315

Directorate of Enforcement v. Niraj Tyagi & Ors.

at a fair market value and in a transparent manner. It appears that

a series of litigations under the SARFAESI Act before the DRT and

High Court had ensued between the parties.

7. IHFL on 01.07.2021 ultimately sold the shares of M/s Kadam pledged

with it to one Final Step Developers P. Ltd., a subsidiary of M3M India

P. Ltd. for Rs. 750 crores. Since Final Step Developers (earlier known

as M/s Creative Soul Technology P. Ltd) had no source of funds of its

own, the funds to purchase the shares of M/s Kadam were provided

to the Final Step Developers by the M3M India, which managed to

take loan from the IHFL on the same day i.e. 03.07.2021. Thus, the

purchase of shares of M/s Kadam by Final Step from the IHFL was

funded by the IHFL itself. The mortgaged properties-Shipra Mall at

Ghaziabad and the parcel of law admeasuring 73 acres at Noida

also eventually came to be sold by the IHFL towards the recovery

of its dues from the Shipra Group.

8. On 09.04.2023, an FIR being No. 427 of 2023 came to be filed by

one Amit Walia, a Director of Shipra Hotels, against IHFL and its

officers for the offences under Sections 420, 467, 468, 471, 120-B

IPC, 323, 504 & 506 at Police Station Indirapuram, alleging inter alia

that IHFL had illegally showed the Shipra group to be the defaulters,

so that they may misappropriate the properties owned by the Group

through illegal means. The FIR also alleged that IHFL had conspired

with M3M India, and by forging and fabricating the documents sold

73 acres of land of M/s Kadam to M3M India, for a sum of 300

crores when the market value of the same was about 4000 crores.

IHFL had also undervalued the shares and securities on the basis

of false and forged documents and had caused great loss to the

Shipra Estate Company and its Directors.

9. On 15.04.2023, another FIR being No. 197 of 2023 came to be filed

by YEIDA against IHFL, M3M India, M/s Kadam and M/s Beacon

Trusteeship Ltd. for the offences under Sections 420, 467, 468, 471

and 120-B at Police Station Beta-2, Greater Noida alleging inter

alia that the first charge of YEIDA was preserved in the permission

issued on 09.01.2018 for pledging the shares to IHFL however, the

IHFL neither informed nor sought any permission of YEIDA before

transferring the shares of M/s Kadam to M3M India. Thus, the terms

and conditions contained in the permission letter, indemnity certificate

and sub-lease document were violated by the financial institution and 

316 [2024] 2 S.C.R.

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the sub-lessee, due to which the YEIDA had suffered a financial loss

of about Rs. 200 crores.

10. On 22.07.2023, yet another FIR being No. 611 of 2023 came to be

filed by one Mohit Singh, authorized representative of Shipra Group,

against Reena Bagga in her capacity as an authorized officer of IHFL

and others for the offences under Section 420, 120B IPC and 82 of

Registration Act at Police Station Kavi Nagar, Ghaziabad, alleging

therein that “Shipra Mall”, which formed a part of the properties

mortgaged with IHFL, had been sold in pursuance of recovery

proceedings on the basis of false and fabricated documents, for a

sum of Rs. 551 Crore to Himri Estate Pvt. Ltd. although the actual

value of the land was over 2000 crore. It has been alleged that

illegalities were committed by the said accused, by not showing the

actual value of Shipra Mall and thereby had caused huge loss to

the Shipra Group.

11. Since various FIRs came to be registered against the IHFL and its

officers, the same came to be challenged by them by filing the W.P.

(Crl) being no. 166 of 2023 before this Court (Gagan Banga and

Anr. vs. State of West Bengal and Ors.).

12. Pending the said W.P. No.166/2023, the Directorate of Enforcement

(ED) on the basis of the said FIR nos. 197/2023 and 427/2023

registered an ECIR bearing no. ECIR/HIU-I/06/2023 in Delhi on

09.06.2023, to investigate into the offences of money laundering

under the Prevention of Money Laundering Act, 2002.

13. According to the appellant-ED, this Court without giving the appellant

any opportunity of hearing, passed the following order on 04.07.2023

while disposing off the W.P. (Crl) No. 166/2023 and connected

Contempt Petition.

“1 to 3.……

4. Vide order dated 28.04.2023 passed in W.P. (Crl.)

No. 166/2023, criminal proceedings in three such FIRs

instituted by borrowers in different States, namely FIR No.

646/2022 dated 26.10.2022 registered at P.S. Titagarh,

FIR No. 427/2023 dated 09.04.2023 registered at P.S.

Indirapuram and FIR No. 25/2021 dated 27.01.2021

registered at P.S. EOW, Delhi were stayed.

[2024] 2 S.C.R. 317

Directorate of Enforcement v. Niraj Tyagi & Ors.

5. Further FIR No. 197/2023 dated 15.04.2023 was filed

by YEIDA at PS Beta-2, Greater Noida, UP, which also

refers to the aforesaid FIR No. 427/2023 dated 09.04.2023

registered at P.S. Indirapuram with some overlapping facts.

It is stated that on the basis of these two connected FIRs

namely FIR No. 427/2023 and 197/2023, now the ED

has registered ECIR bearing No. ECIR/HIU-I/06/2023 in

Delhi. The petitioners have now challenged the said FIRs

and ECIR.

6. In the circumstances, as it may also involve adjudication

on facts, we deem it appropriate to permit the petitioners

to approach the respective jurisdictional High Courts to

challenge all four FIRs and the ECIR within two weeks

from today, with a request to the respective High Courts

to consider and decide the petitions expeditiously, not later

than six months of their presentation.

7. We also direct DGPs of respective States to look into

the matter, examine the contentions of the petitioners in

respect of the contents of FIRs, and to take appropriate

measures in accordance with law within a period of one

month.

8. Till final disposal of the respective petitions, interim order

dated 28.04.2023 passed in W.P.(Crl.) No. 166/2023 would

continue in the three FIRs mentioned therein.

9. In so far as the further FIR No. 197/2023 dated

15.04.2023 filed by YEIDA and ECIR bearing No. ECIR/

HIU-I/06/2023 are concerned, no coercive steps would

be taken against the petitioner financial institution and its

officers, representatives and managers till final disposal of

such petitions by the High Court, and it would be open for

the petitioners to seek stay of proceedings which would be

considered by the High Court on its own merits. It is clarified

that this interim protection would only be applicable to the

petitioner financial institution and its officers, representatives

and managers, and not to any other person.”

14. The respondent-Niraj Tyagi and IHFL thereafter filed a writ petition

in the High Court being Criminal Misc. Writ Petition No. 10893/2023 

318 [2024] 2 S.C.R.

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seeking issuance of appropriate writ, order and direction for declaring

Section 420 of IPC as arbitrary and ultra vires to the Constitution

of India and seeking quashing of the FIR No.197 of 2023 dated

15.04.2023 as also the consequential proceedings arising therefrom

as initiated by the ED in ECIR bearing No. ECIR/HIU-I/06/2023.

Similarly, the respondent Reena Bagga and IHFL filed another writ

petition being Criminal Miscellaneous Writ Petition No. 11837/2023

seeking quashing of the FIR being No.611/2023 registered against

them as also all the consequential actions taken by any authority/

agency in pursuance to the said FIR. The respondent M3M India

Pvt. Ltd. and Kadam Developers Pvt. Ltd. also filed a writ petition

being Criminal Misc. Writ Petition No.14053/2023 seeking the reliefs

similar to the reliefs prayed for in the Writ Petition No.10893/2023.

15. The High Court passed the following impugned Order on 13.07.2023

in Criminal Misc. Writ Petition No.10893 of 2023: -

“19. In view of the above, we are of the opinion that the

petitioners have made out a case for grant of the interim

as relief prayed for. Accordingly, in furtherance of the

protection granted by the Apex Court to the petitioners

by the order dated 4th July, 2023, while disposing of the

Contempt Petition (Civil) No. 774 of 2023, it is provided

that further proceedings, including summoning of the

officers, consequent to the F.I.R. No. 197 of 2023 dated

15.4.2023 under Sections 420, 467, 468, 471 and 120-B

- IPC, Police Station Beta-2, Greater Noida, Gautam Budh

Nagar, registered by Respondent No.2 and consequent

ECIR No. ECIR/HIU-I/06/2023 registered by Respondent

No. 4, shall remain stayed so far as it confines to the

petitioners only and no coercive action shall be taken

against them.”

16. The High Court passed the other impugned orders on 08.08.2023 in

Criminal Miscellaneous Writ Petition No.11837/2023 and on 13.09.2023

in Criminal Miscellaneous Writ Petition No.14053/2023, following the

order dated 13.07.2023 passed in Writ Petition No.10893/2023.

Consequently, the proceedings of the FIR No.197/2023, FIR

No.611/23 as also the ECIR No. ECIR/HIU-I/06/2023 have been

stayed qua the concerned respondents herein pending the said three

writ petitions before the High Court, and the concerned respondents 

[2024] 2 S.C.R. 319

Directorate of Enforcement v. Niraj Tyagi & Ors.

who are the accused in the said FIRs have been protected from any

coercive action being taken against them. The present appeals stem

out of the aforesaid impugned orders passed by the High Court.

17. The ASG, Mr. Raju appearing for the appellant ED in all the three

appeals vehemently submitted that this Court had passed the order

dated 04.07.2023 in Gagan Banga’s case staying the proceedings

of ECIR and the FIRs registered against the concerned respondents

without hearing the ED, and therefore the ED has filed a Review

Petition, which is pending before this Court. He further submitted

that the High Court also without assigning any cogent reasons in

the impugned orders stayed the said proceedings of ECIR and FIRs

under the guise of following the said order dated 04.07.2023 passed

by this Court. Placing heavy reliance on the decision of the ThreeJudge Bench in Neeharika Infrastructure Pvt. Ltd. vs. State of

Maharashtra and Others1

, he submitted that this Court has strongly

deprecated the practice of the courts granting interim orders staying

the investigation or directing the investigating agencies not to take

coercive actions against the accused. The impugned orders passed

by the High Court therefore being in the teeth of the said settled legal

position, the same deserve to be quashed and set aside forthwith.

18. However, the learned Senior counsels appearing for the respondents

in the respective appeals, taking the Court to the proceedings which

had taken place under the SARFAESI Act and before the High Court

and this Court, submitted that the respondent-complainant Shipra

Group having failed in all the said proceedings had taken recourse

to the criminal proceedings to create a fear amongst the financial

institution and its officers. They further submitted that the High Court

taking into consideration the order passed by this Court in Gagan

Banga’s case had rightly protected the financial institution and its

officers who had discharged their duties for the recovery of the dues

from the borrowers. Reliance is placed on the decision of this Court in

K. Virupaksha and Another vs. State of Karnataka and Another2

and in A.P. Mahesh Cooperative Urban Bank Shareholders Welfare

Association vs. Ramesh Kumar Bung and Others3

, to submit that

1 [2021] 4 SCR 1044 : (2021) SCC Online SC 315

2 [2020] 2 SCR 1020 : (2020) 4 SCC 440

3 [2021] 6 SCR 850 : (2021) 9 SCC 152

320 [2024] 2 S.C.R.

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even in case of Neeharika Infrastructure (supra), the discretion

has been conferred on the High Court to pass the interim orders in

exceptional cases for not taking coercive steps against the accused

pending the proceedings, particularly when the proceedings under

the SARFAESI Act were initiated against the borrowers. According

to them, bypassing the statutory remedies available to the borrowers

or having failed in such proceedings, the borrowers should not be

permitted to prosecute the financial institution or its officers or the

purchasers just to instill a fear in their mind, which otherwise would

have the potentiality to affect the marrows of economic health of

the nation.

19. At the outset, it may be noted that the impugned interim orders have

been passed by the High Court under the umbrella of the order

dated 04.07.2023 passed by this Court in Gagan Banga’s case,

creating an impression that the impugned orders were passed in

furtherance of the said order, though this Court had passed the said

order leaving it open to the High Court to decide the writ petitions

on their own merits.

20. In our opinion, it’s a matter of serious concern that despite the legal

position settled by this Court in catena of decisions, the High Court

has passed the impugned orders staying the investigations of the

FIRs and ECIR in question in utter disregard of the said settled legal

position. Without undermining the powers of the High Court under

Section 482 of Cr.PC to quash the proceedings if the allegations made

in the FIR or complaint prima facie do not constitute any offence

against the accused, or if the criminal proceedings are found to be

manifestly malafide or malicious, instituted with ulterior motive etc.,

we are of the opinion that the High Court could not have stayed

the investigations and restrained the investigating agencies from

investigating into the cognizable offences as alleged in the FIRs and

the ECIR, particularly when the investigations were at a very nascent

stage. It hardly needs to be reiterated that the inherent powers under

Section 482 of Cr.PC do not confer any arbitrary jurisdiction on

the High Court to act according to whims or caprice. The statutory

power has to be exercised sparingly with circumspection and in the

rarest of rare cases. In a way, by passing such orders of staying the

investigations and restraining the investigating agencies from taking

any coercive measure against the accused pending the petitions

under Section 482 Cr.PC, the High Court has granted blanket orders 

[2024] 2 S.C.R. 321

Directorate of Enforcement v. Niraj Tyagi & Ors.

restraining the arrest without the accused applying for the anticipatory

bail under Section 438 of Cr.PC.

21. This Court in State of Telangana vs. Habib Abdullah Jeelani and

Others4

, while dealing with the contours of Section 482 and 438

Cr.PC had emphasized that the direction not to arrest the accused

or not to take coercive action against the accused in the proceedings

under Section 482 Cr.PC, would amount to an order under Section

438 Cr.PC, albeit without satisfaction of the conditions of the said

provision, which is legally unacceptable.

22. Recently, a Three-Judge Bench in Neeharika Infrastructure (supra)

while strongly deprecating the practice of the High Courts in staying

the investigations or directing not to take coercive action against the

accused pending petitions under Section 482 of Cr.PC, has issued

the guidelines, which may be reproduced hereinbelow for ready

reference:-

“Conclusions

33. In view of the above and for the reasons stated above,

our final conclusions on the principal/core issue, whether

the High Court would be justified in passing an interim

order of stay of investigation and/or “no coercive steps

to be adopted”, during the pendency of the quashing

petition under Section 482CrPC and/or under Article 226

of the Constitution of India and in what circumstances and

whether the High Court would be justified in passing the

order of not to arrest the accused or “no coercive steps

to be adopted” during the investigation or till the final

report/charge-sheet is filed under Section 173CrPC, while

dismissing/disposing of/not entertaining/not quashing the

criminal proceedings/complaint/FIR in exercise of powers

under Section 482CrPC and/or under Article 226 of the

Constitution of India, our final conclusions are as under:

33.1. Police has the statutory right and duty under the

relevant provisions of the Code of Criminal Procedure

contained in Chapter XIV of the Code to investigate into

a cognizable offence.

4 [2017] 1 SCR 141 : 2017 (2) SCC 779

322 [2024] 2 S.C.R.

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33.2. Courts would not thwart any investigation into the

cognizable offences.

33.3. It is only in cases where no cognizable offence or

offence of any kind is disclosed in the first information report

that the Court will not permit an investigation to go on.

33.4. The power of quashing should be exercised sparingly

with circumspection, as it has been observed, in the “rarest

of rare cases” (not to be confused with the formation in

the context of death penalty).

33.5. While examining an FIR/complaint, quashing of which

is sought, the court cannot embark upon an enquiry as to

the reliability or genuineness or otherwise of the allegations

made in the FIR/complaint.

33.6. Criminal proceedings ought not to be scuttled at the

initial stage.

33.7. Quashing of a complaint/FIR should be an exception

rather than an ordinary rule.

33.8. Ordinarily, the courts are barred from usurping the

jurisdiction of the police, since the two organs of the State

operate in two specific spheres of activities and one ought

not to tread over the other sphere.

33.9. The functions of the judiciary and the police are

complementary, not overlapping.

33.10. Save in exceptional cases where non-interference

would result in miscarriage of justice, the Court and

the judicial process should not interfere at the stage of

investigation of offences.

33.11. Extraordinary and inherent powers of the Court

do not confer an arbitrary jurisdiction on the Court to act

according to its whims or caprice.

33.12. The first information report is not an encyclopaedia

which must disclose all facts and details relating to the

offence reported. Therefore, when the investigation by the

police is in progress, the court should not go into the merits

of the allegations in the FIR. Police must be permitted 

[2024] 2 S.C.R. 323

Directorate of Enforcement v. Niraj Tyagi & Ors.

to complete the investigation. It would be premature to

pronounce the conclusion based on hazy facts that the

complaint/FIR does not deserve to be investigated or that

it amounts to abuse of process of law. After investigation, if

the investigating officer finds that there is no substance in

the application made by the complainant, the investigating

officer may file an appropriate report/summary before the

learned Magistrate which may be considered by the learned

Magistrate in accordance with the known procedure.

33.13. The power under Section 482CrPC is very wide,

but conferment of wide power requires the court to be

more cautious. It casts an onerous and more diligent duty

on the court.

33.14. However, at the same time, the court, if it thinks

fit, regard being had to the parameters of quashing and

the self-restraint imposed by law, more particularly the

parameters laid down by this Court in R.P. Kapur [R.P.

Kapur v. State of Punjab, 1960 SCC OnLine SC 21 : AIR

1960 SC 866] and Bhajan Lal [State of Haryana v. Bhajan

Lal, 1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426] , has

the jurisdiction to quash the FIR/complaint.

33.15. When a prayer for quashing the FIR is made by the

alleged accused and the court when it exercises the power

under Section 482CrPC, only has to consider whether the

allegations in the FIR disclose commission of a cognizable

offence or not. The court is not required to consider on

merits whether or not the merits of the allegations make

out a cognizable offence and the court has to permit the

investigating agency/police to investigate the allegations

in the FIR.

33.16. The aforesaid parameters would be applicable and/

or the aforesaid aspects are required to be considered

by the High Court while passing an interim order in a

quashing petition in exercise of powers under Section 482

CrPC and/or under Article 226 of the Constitution of India.

However, an interim order of stay of investigation during

the pendency of the quashing petition can be passed with

circumspection. Such an interim order should not require 

324 [2024] 2 S.C.R.

Digital Supreme Court Reports

to be passed routinely, casually and/or mechanically.

Normally, when the investigation is in progress and the

facts are hazy and the entire evidence/material is not

before the High Court, the High Court should restrain

itself from passing the interim order of not to arrest or “no

coercive steps to be adopted” and the accused should

be relegated to apply for anticipatory bail under Section

438CrPC before the competent court. The High Court

shall not and as such is not justified in passing the order

of not to arrest and/or “no coercive steps” either during

the investigation or till the investigation is completed and/

or till the final report/charge-sheet is filed under Section

173 CrPC, while dismissing/disposing of the quashing

petition under Section 482CrPC and/or under Article 226

of the Constitution of India.

33.17. Even in a case where the High Court is prima

facie of the opinion that an exceptional case is made

out for grant of interim stay of further investigation, after

considering the broad parameters while exercising the

powers under Section 482CrPC and/or under Article 226

of the Constitution of India referred to hereinabove, the

High Court has to give brief reasons why such an interim

order is warranted and/or is required to be passed so that

it can demonstrate the application of mind by the Court

and the higher forum can consider what was weighed

with the High Court while passing such an interim order.

33.18. Whenever an interim order is passed by the High

Court of “no coercive steps to be adopted” within the

aforesaid parameters, the High Court must clarify what

does it mean by “no coercive steps to be adopted” as the

term “no coercive steps to be adopted” can be said to be

too vague and/or broad which can be misunderstood and/

or misapplied.”

23. The impugned orders passed by the High Court are in utter disregard

and in the teeth of the said guidelines issued by the Three-Judge

Bench of this Court. It was sought to be submitted by the Learned

Counsels for the respondents-accused that the allegations made

in the FIRs are of civil nature, and have been given a colour of 

[2024] 2 S.C.R. 325

Directorate of Enforcement v. Niraj Tyagi & Ors.

criminal nature. According to them, as discernible from the record,

number of proceedings had ensued between the parties pursuant to

the actions taken by the IHFL against the complainant-borrower for

the recovery of its dues under the SARFAESI Act, and the borrower

M/s Shipra after having failed in the said proceedings had filed the

complaints with ulterior motives. We do not propose to examine

the merits of the said submissions as the writ petitions filed by the

concerned respondents-accused seeking quashing of the FIRs on

such grounds are pending for consideration before the High Court.

It would be open for the High Court to examine the merits of the

petitions and decide the same in accordance with law.

24. Without elaborating any further, suffice it to say that judicial comity

and judicial discipline demands that higher courts should follow

the law. The extraordinary and inherent powers of the court do not

confer any arbitrary jurisdiction on the court to act according to its

whims and caprice.

25. The impugned orders passed by the High Court being not in

consonance with the settled legal position, the same deserve to be

set aside and are hereby set aside. The impugned interim orders

passed by the High Court qua the concerned respondents-accused

in the present appeals stand vacated forthwith.

26. We may clarify that we have not expressed any opinion on the merits

of the Writ Petitions which are pending before the High Court, and

that it would be open for the concerned respondents-accused to

take all legal contentions or take recourse to the legal remedies as

may be available to them in accordance with law.

27. The appeals stand allowed accordingly.

Headnotes prepared by: Nidhi Jain Result of the case:

Appeals allowed.

913 * Author [2024] 1 S.C.R. 909 : 2024 INSC 23 Jaipur Vidyut Vitran Nigam Ltd. & Ors. v. MB Power (Madhya Pradesh) Limited & Ors. (Civil Appeal No. 6503 of 2022) 08 January 2024 [B. R. Gavai* and Prashant Kumar Mishra, JJ.] Issue for Consideration State Commission held that the tariffs offered by the L-4 and L-5 bidders were not aligned to the prevailing market prices. In appeal by L-5, APTEL held that the State Commission had to necessarily adopt the tariff and had no power to consider whether the tariff was aligned to market prices. Impugned judgment of the High Court relying on the said judgment of the APTEL and the earlier orders of this Court concluded that applying the test of “filling the bucket”, the procurers were bound to take supply from the respondent No.1 at the rates quoted by it and it had a right to supply power since there was a gap of 300 MW between the power procured by the procurers and the ceiling of 906 MW determined by this Court. High Court whether justified in issuing mandamus directing the appellants to take supply of 200 MW power from the respondent No.1 at the rates quoted by it. Power of the State Commission to go into the question as to whether the prices quoted are market aligned or not and to take into consideration the aspect of consumers’ interest.

913

* Author

[2024] 1 S.C.R. 909 : 2024 INSC 23

Jaipur Vidyut Vitran Nigam Ltd. & Ors.

v.

MB Power (Madhya Pradesh) Limited & Ors.

(Civil Appeal No. 6503 of 2022)

08 January 2024

[B. R. Gavai* and Prashant Kumar Mishra, JJ.]

Issue for Consideration

State Commission held that the tariffs offered by the L-4 and L-5

bidders were not aligned to the prevailing market prices. In appeal

by L-5, APTEL held that the State Commission had to necessarily

adopt the tariff and had no power to consider whether the tariff was

aligned to market prices. Impugned judgment of the High Court

relying on the said judgment of the APTEL and the earlier orders

of this Court concluded that applying the test of “filling the bucket”,

the procurers were bound to take supply from the respondent No.1

at the rates quoted by it and it had a right to supply power since

there was a gap of 300 MW between the power procured by the

procurers and the ceiling of 906 MW determined by this Court. High

Court whether justified in issuing mandamus directing the appellants

to take supply of 200 MW power from the respondent No.1 at the

rates quoted by it. Power of the State Commission to go into the

question as to whether the prices quoted are market aligned or not

and to take into consideration the aspect of consumers’ interest.

Headnotes

Electricity Act, 2003 – ss.63, 86 – Rajasthan Rajya Vidyut

Prasaran Nigam Limited (RVPN) filed Petition before the State

Commission seeking approval for procurement of 1000 MW

of power by a competitive bidding process – RFP was issued

– Eventually, in consonance with the LoI, PPAs were signed

with the L-1, L-2 and L-3 bidders – State Commission held that

the quantum of only 500 MW power was liable to be approved

considering the demand in the State as recommended by the

EAC and it approved the tariff quoted by the L-1 to L-3 bidders

– Appeals filed by L-2 and L-3 bidders before APTEL, allowed

– Challenged by the appellants – Subsequently, Civil Appeals

were filed by L-5 bidder also– Disposing of the appeals, State

Commission was directed to go into the issue of approval for

adoption of tariff with regard to L-4 and L-5 bidders– Further,

910 [2024] 1 S.C.R.Digital Supreme Court Reports

vide order dtd.19.11.18, State Commission was directed to

go into the issue of adoption of tariff – State Commission

held that the tariffs offered by the L-4 and L-5 bidders were

not aligned to the prevailing market prices – Appeal filed by

L-5 bidder, allowed by APTEL – Writ petition was filed by the

respondent No.1 – Allowed by impugned judgment:

Held: Unlike s.62 r/w ss.61 and 64, under the provisions of s.63,

the appropriate Commission does not “determine” tariff but only

“adopts” tariff already determined u/s.63 – Such “adoption” is only

if such tariff has been determined through a transparent process

of bidding, and this transparent process of bidding must be in

accordance with the guidelines issued by the Central Governments

– s.86(1)(b) gives ample power to the State Commission to regulate

electricity purchase and procurement process of distribution

licensees – It also empowers the State Commission to regulate

the matters including the price at which electricity shall be procured

from the generating companies, etc. – Further, orders relied upon

by the APTEL, specifically the order dtd. 19.11.2018, clarified

that the State Commission was to decide the tariff u/s.63 having

regard to the law laid down both statutorily and by this Court – As

such, the State Commission was bound to take into consideration

the Bidding Guidelines notified by the Central Government, and

specifically clause 5.15 thereof – State Commission justified in

considering the Clause 5.15 of the Bidding Guidelines which

specifically permits to reject all price bids if the rates quoted are

not aligned to the prevailing market prices – APTEL grossly erred

in holding that the State Commission has no power to go into the

question, as to whether the prices quoted are market aligned or not

and also not to take into consideration the aspect of consumers’

interest – It cannot be read from the orders of this Court that the

State Commission was bound to accept the bids as quoted by

the bidders till the bucket was filled – No such direction can be

issued by this Court de hors the provisions of ss.63 and 86(1)(b)

and the Bidding Guidelines – Since the decision-making process

adopted by the Bid Evaluation Committee approved by the State

Commission, was in accordance with the law laid down by this

Court, the same ought not to have been interfered with by the

APTEL – High Court could not have issued a mandamus to the

instrumentalities of the State to enter into a contract harmful to the

public interest inasmuch as, if the power was to be procured by

the procurers at the rates quoted by the respondent No.1, which

was even higher than the rates quoted by the L-5 bidder, then the

[2024] 1 S.C.R. 911Jaipur Vidyut Vitran Nigam L t d . & O r s . v.

M

B

P

o

w

e

r

(Madhya P r a d e s h ) L i m i t e d & O r s .

State would have to bear financial burden in thousands of crore

rupees, which in turn would have passed on to the consumers

– Impugned judgment quashed and set aside – Cost imposed.

[Paras 67, 71, 73-75, 78, 83, 104, 105]

Electricity – Competitive Bidding Guidelines notified by the

Government of India u/s.63 – Respondent No.1 contended

that the procurer is bound to accept all the bids emerged in

a competitive bidding process once the bidding process was

found to be transparent and in compliance with the Bidding

Guidelines:

Held: If the contention is to be accepted it will do complete violence

to clause 5.15 of the Bidding Guidelines itself – If that view is

accepted, the DISCOMS will be compelled to purchase electricity

at a much higher rate as compared with other suppliers – The

said higher rate will be passed on to the consumers – As such,

accepting the contention of the respondent No.1 would result in

adversely affecting the interests of the consumers and, in turn,

would be against the larger public interest. [Para 77]

Electricity Act, 2003 – s.63 – General Clauses Act – s.13(2)

– “all”, “any” – Principle of literal interpretation – Principle

of purposive construction – “all” used in clause 5.15 of

the Bidding Guidelines r/ws.86(1)(b) – Competitive Bidding

Guidelines notified by the Government of India u/s.63 – It was

contended that the power under clause 5.15 of the Bidding

Guidelines can be exercised only when the bidding process

is found to be not in compliance with the Bidding Guidelines

and is not transparent in respect of all the bidders and not in

respect of some of the bidders is concerned:

Held: The contention is without substance – Words “all” or “any” will

have to be construed in their context taking into consideration the

scheme and purpose of the enactment – What is the meaning which

the legislature intended to give to a particular statutory provision

has to be decided by the Court on a consideration of the context

in which the word(s) appear(s) and in particular, the scheme and

object of the legislation – The word “all” used in clause 5.15 of

the Bidding Guidelines, read with the legislative policy for which

the Electricity Act was enacted and r/ws.86(1)(b), will have to be

construed to be the one including “any” – Applying the principle of

literal interpretation, the evaluation committee/BEC would be entitled

to reject only such of the price bids if it finds that the rates quoted

912 [2024] 1 S.C.R.Digital Supreme Court Reports

by the bidders are not aligned to the prevailing market prices – It

does not stipulate rejection of all the bids in the bidding process

– If the contention that clause 5.15 of the Bidding Guidelines will

come into play, which permits the Evaluation Committee to reject

“all” price bids and not “any” one of them is accepted, it will lead

to absurdity – The Court, while interpreting a particular provision,

will have to apply the principles of purposive construction – Such

an interpretation would result in defeating one of the main objects

of the enactment, i.e., protection of the consumer. [Paras 84, 87,

88 and 91]

Interpretation of Statutes – Principle of purposive construction

– Discussed.

Electricity Act, 2003 – ss.62, 63, 79(1)(b):

Held: The non-obstante clause advisedly restricts itself to s.62,

there is no reason to put s.79 out of the way altogether – Either

u/s.62, or 63, the general regulatory power of the Commission

u/s.79(1)(b) is the source of the power to regulate, which includes

the power to determine or adopt tariff – ss.62 and 63 deal with

“determination” of tariff, which is part of “regulating” tariff – In a

situation where the guidelines issued by the Central Government

u/s.63 cover the situation, the Central Commission is bound by

those guidelines and must exercise its regulatory functions, albeit

u/s.79(1)(b), only in accordance with those guidelines. [Para 68]

Alternate remedy – Electricity Act, 2003 – Constitution of

India – Article 226 – Judicial review – Scope:

Held: The Electricity Act is an exhaustive code on all matters

concerning electricity – Under the Electricity Act, all issues dealing

with electricity have to be considered by the authorities constituted

under the said Act – The State Electricity Commission and the

APTEL have ample powers to adjudicate in the matters with

regard to electricity – These Tribunals are tribunals consisting of

experts having vast experience in the field of electricity – In the

present case, the High Court erred in directly entertaining the writ

petition when the respondent No.1-the writ petitioner before the

High Court had an adequate alternate remedy of approaching the

State Electricity Commission – Although, availability of an alternate

remedy is not a complete bar in the exercise of the power of judicial

review by the High Courts but, recourse to such a remedy would

be permissible only if extraordinary and exceptional circumstances

are made out – While exercising its power of judicial review, the

[2024] 1 S.C.R. 913Jaipur Vidyut Vitran Nigam L t d . & O r s . v.

M

B

P

o

w

e

r

(Madhya P r a d e s h ) L i m i t e d & O r s .

Court can step in where a case of manifest unreasonableness or

arbitrariness is made out – There was not even an allegation with

regard to that effect – In such circumstances, recourse to a petition

under Article 226 of the Constitution of India in the availability of

efficacious alternate remedy under a statute which is a complete

code in itself was not justified. [Paras 93-95]

Contract – Award of contract, a commercial transaction –

Judicial Scrutiny – Scope:

Held: The award of a contract, whether by a private party or by

a public body or the State is essentially a commercial transaction

– In arriving at a commercial decision, considerations which are

paramount are commercial considerations – State can choose its

own method to arrive at a decision – It can fix its own terms of

invitation to tender and that is not open to judicial scrutiny – State

can enter into negotiations before finally deciding to accept one of

the offers made to it – Price need not always be the sole criterion

for awarding a contract – State may not accept the offer even

though it happens to be the highest or the lowest – However, the

State, its corporations, instrumentalities and agencies are bound

to adhere to the norms, standards and procedures laid down

by them and cannot depart from them arbitrarily – Though that

decision is not amenable to judicial review, the court can examine

the decision-making process and interfere if it is found vitiated by

mala fides, unreasonableness and arbitrariness – Only when the

Court comes to a conclusion that overwhelming public interest

requires interference, the court should intervene. [Para 102]

Case Law Cited

PTC India Limited v. Central Electricity Regulatory

Commission, Through Secretary [2010] 3 SCR 609 :

(2010) 4 SCC 603; Vivek Narayan Sharma and others

v. Union of India and others [2023] 1 SCR 1 : (2023)

3 SCC 1 – followed.

Energy Watchdog v. Central Electricity Regulatory

Commission and others [2017] 3 SCR 153 : (2017)

14 SCC 80; GMR Warora Energy Limited v. Central

Electricity Regulatory Commission (CERC) & Ors. [2023]

8 SCR 183 : 2023 SCC Online SC 464 – relied on.

R.Viswanathan and others v. Rukn-ul-Mulk Syed Abdul

Wajid since deceased and others [1963] 3 SCR 22 :

914 [2024] 1 S.C.R.Digital Supreme Court Reports

AIR 1963 SC 1; Deccan Paper Mills Company Limited

v. Regency Mahavir Properties & Ors. [2020] 13 SCR

427 : (2021) 4 SCC 786; Tata Power Company Limited

Transmission v. Maharashtra Electricity Regulatory

Commission & Ors. [2022] 19 S.C.R. 620 : 2022 SCC

Online 1615; Tata Cellular v. Union of India [1994]

2 Suppl. SCR 122 : (1994) 6 SCC 651; Rajasthan

Housing Board and another v. G.S. Investments and

another [2006] 7 Suppl. SCR 868 : (2007) 1 SCC 477;

Laxmikant and others v. Satyawan and others [1996] 3

SCR 532 : (1996) 4 SCC 208; Reliance Infrastructure

Limited v. State of Maharashtra and others [2019] 1 SCR

886 : (2019) 3 SCC 352; Radha Krishan Industries v.

State of Himachal Pradesh and others [2021] 3 SCR

406 : (2021) 6 SCC 771; South Indian Bank Ltd. and

others v. Naveen Mathew Philip and another [2023] 4

SCR 18 : 2023 SCC OnLine SC 435; Air India Ltd. v.

Cochin International Airport Ltd. and others [2000] 1

SCR 505 : (2000) 2 SCC 617 – referred to.

List of Acts

Electricity Act; RERC (Power Purchase & Procurement Process

of Distribution Licensee) Regulations 2004; Constitution of India;

General Clauses Act.

List Keywords

Electricity; State Electricity Regulatory Commission; Appellate

Tribunal for Electricity; Bid Evaluation Committee; Request for

Proposal; Power Purchase Agreement; Reduction of quantum of

power; Test of filling the bucket; Tariffs not aligned to the prevailing

market prices; Consumers’ interest; Competitive Bidding Guidelines/

Process; Approval for adoption of tariff; Determination of tariff

by bidding process; Functions of State Commission; Functions

of Central Electricity Regulatory Commission; Bid Evaluation

Committee; Mandamus; Contract harmful to the public interest;

Interpretation of Statutes; Principle of literal interpretation; Principle

of purposive construction; Determination of tariff, Regulating

tariff; Alternate remedy; Judicial review; Unreasonableness

or arbitrariness; Award of contract; Commercial transaction;

Commercial considerations; Judicial Scrutiny.

Partition suit-Proof of marriage-Insanity-Lucid interval-A person ad· judged insane whether continues to be so till proved to the contrary. The plaintiff who is son of defendant No. 3's mother's brother filed a suit for • partition of properties which belonged to the mother and father of defendant No. 3. Defendant Nos. 1 and 2 are the sons of brothers of defendant No. 3's mether. Defendant No. 4 is the son of defendant No. 3's father's brother. Defendant No. 3 died duri'ng the pendency of the suit. Thereafter, defendant No. 1 filed his additional written statement and claimed' half share in the property of defendant No. 3 on the ground that defendant No. 3 married defendant No. 1 after the suit was instituted. The Trial Court allotted different shares to various defendants in the properties left by defendants No. 3 's mother and father which are nd longer in dispute. The U"ial Court found that defendant No. 4 alone was entitled to the share of defendant No. 3 on the ground that the marriage of defendant No. 3 with defendant No. 1 was not proved. The trial Court also found that defenJdant No. 3 was mentally unsound to enter into any marriage. f' E F On appeal, the High Court held that defendant No. 1 was married to defendant No. 3 ancl defendant No. 3 was in a lucid interval at the time of marriage. On an appeal by certificate to this Court, the counsel for the appellant contended : (I) that the finding of the High Court both with regard to the fact of marriage and that the marriage took place during a !Ucid interval were erroneous; (2) that defendant No. 3 was not a sane person as is clear first from an order declaring defendant No. 3 to be a person of unsound mind, whereby defendant No, 4 was appointed guardian of the property of defendant No. 3 and defendant No. 1 was appointed guardian 9f the person of defendant No. 3. Secondly the application of defendant No. 3 to be declared herself as a person of sound mind was rejected by the District Judge. Thirdly, in the present suit defendant No. 3 was impleaded as a person of unsound mind; and (3) that once a person is adjudged insane it is presumed that state of unsoundness would continue until proved to the contrary.

85 8

A MAHAMMADUNNl'S SON KAPPATTA KATHOKANDATH

B

c

D

BAVA

, v.

KUNHOOSA'S SON AMPALATH VEETTIL KUNNATHODATH

MAHAMMADUNNI & ORS.

December 1, 1975

[A. N. RAY, C.J., M. FL BEG, R. S. SARKARIA AND P. N. SHINGHAL, JJ.J

Partition suit-Proof of marriage-Insanity-Lucid interval-A person ad·

judged insane whether continues to be so till proved to the contrary.

The plaintiff who is son of defendant No. 3's mother's brother filed a suit for • partition of properties which belonged to the mother and father of defendant

No. 3. Defendant Nos. 1 and 2 are the sons of brothers of defendant No. 3's

mether. Defendant No. 4 is the son of defendant No. 3's father's brother.

Defendant No. 3 died duri'ng the pendency of the suit. Thereafter, defendant

No. 1 filed his additional written statement and claimed' half share in the property of defendant No. 3 on the ground that defendant No. 3 married defendant

No. 1 after the suit was instituted.

The Trial Court allotted different shares to various defendants in the properties left by defendants No. 3 's mother and father which are nd longer in

dispute. The U"ial Court found that defendant No. 4 alone was entitled to the

share of defendant No. 3 on the ground that the marriage of defendant No. 3

with defendant No. 1 was not proved. The trial Court also found that defenJdant No. 3 was mentally unsound to enter into any marriage. f'

E

F

On appeal, the High Court held that defendant No. 1 was married to

defendant No. 3 ancl defendant No. 3 was in a lucid interval at the time of

marriage.

On an appeal by certificate to this Court, the counsel for the appellant

contended : (I) that the finding of the High Court both with regard to the

fact of marriage and that the marriage took place during a !Ucid interval were erroneous; (2) that defendant No. 3 was not a sane person as is clear first from an order declaring defendant No. 3 to be a person of unsound mind, whereby

defendant No, 4 was appointed guardian of the property of defendant No. 3

and defendant No. 1 was appointed guardian 9f the person of defendant No. 3.

Secondly the application of defendant No. 3 to be declared herself as a person

of sound mind was rejected by the District Judge. Thirdly, in the present

suit defendant No. 3 was impleaded as a person of unsound mind; and (3)

that once a person is adjudged insane it is presumed that state of unsoundness

would continue until proved to the contrary.

Dismissing the appeal,

HELD : ( 1) The documents relied op by the appellant do not rule out

G lucid interval at the time of marriage. The High Court relied on the evidence

of D.W. 4, a teacher, who attended the marriage. He deposed that defendant

No. 3 gave her consent to the marriage and was in her lucid interval at that

time. The High Court rightly found that defendant No. 3 gave her consent

to the marriage and was in her lucid interval. The conclusion of the Higlot

Court on both the questions, is based on evidence and is correct. [860E-H]

u

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1268 of

1970.

From the Judgment and order dated 17th July 1969 of the Kerala

High Court in A.S. No. 217 of 1964.

jr1

MAHAMMADUNNI V. KUNHOOSA (Ray, C.J.) 859

T. S. Krishnanworthy Iyer, N. Sudhakaran and P. K. Pillai for the A

Appellant.

A. S. Narnbiyar for Respondent No. 2.

(Appeal set down ex-parte against respondents 1 and 5-21 Respondent 4 expired : Name of respondent 3 deleted).

The Judgment of the Court was delivered by

RAY, C.J. This is an appeal by certificate from the judgment dated

17 July 1969 of the High Court of Kerala.

B

The question in this appeal is whether defendants No. 1 and 4 are

each entitled to share in the property allotted to defendant No. 3 in a

partition decree. Defendant No. 4 is the appellant. C

This appeal arises out of a suit instituted on 19 November, 1957

for partition of properties. Properties mentioned in Schedule A and

B to the plaint belonged to the mother of defendant No. 3. Properties

mentioned in Schedule C to the plaint were joint properties of the father

and the mother of defendant No. 3.

The plaintiff and defendant No. 2 are the sons of one of the

brothers of the mother of defendant No. 3. Defendant No. 1 is the son

of another brother of the mother of defendant No. 3. Defendant No. 4

is the son of defendant No. 3's father's brother.

Defendant No. 3 died during the pendency of the suit. Thereafter

defendant No. 1 filed his additional written statement and claimed half

share in the property of defendant No. 3 on the ground that defendant

No. 1 had married defendant No. 3 -0n 30 August, 1959.

The Trial Court allotted to defendant No. 3 3/6th share in properties mentioned in Schedules A and B to the plaint. The plaintiff and

Defendant No. 1 and defendant No. 2 were each given 1/6th share in

properties in Schedules A and B to the plaint. With regard to Schedule

C properties the plaintiff and defendant No. 1 and defendant No. 2

were each given 9 /96th share and defendant No. 3 was given 51/96th

share and defendant No. 4 was given 18/96th share.

The Trial Court found that defendant No. 4 was alone entitled to

the share of defendant No. 3 on the ground that marriage of defendant

No. 3 with defendant No. 1 was not proved. The Trial Court also

found that defendant No. 3 was mentally unsound to enter into any

marriage.

Defendant No. 1 preferred an appeal. The High Court set aside

the judgment of the Trial Court and held that defendant No. 1 was

married to defendant No. 3 and defendant No. 3 was in a lucid interval

at the time of marriage. ,

Counsel for the appellant defendant No. 4 impeached the finding of

the High Court both with regard to the fact of marriage and the finding

that defendant No. 3 was married in a lucid interval.

D

E

F

G

H 

A

B

860 SUPREME COURT REPORTS [1976] 2 S.C.R.

Defendant No. 4 relied on three documents in support of the submission that defendant No. 3 was not a sane person to enter into

marriage with defendant No. 1. The first document iS Exhibit B-34

which is an order dated 8 November, 1958 declaring defendant No. 3

to be a person of unsound mind. In that order defendant No. 4 was

appointed guardian of the property of defendant No. 3 and defendant

No. 1 was appointed guardian of the person of defendant No. 3. The

second document is Exhibit B-8 dated 7 September 1959. The appellant submitted that on 7 September 1959 defendant No. 3 wanted to

get herself declared as a person of sound mind. By an order dated

5 February 1960 being Exhibit B-31 the District Judge dismissed the

application of defendant No. 3. The third document on which the

appellant relied is the suit in this appeal where defendant No. 3 on 19

~ovember, 1957 was impleaded as a person of unsound mind.

The appellant contended that though Exhibit B-34. namely, order

dated 8 November 1958 declaring defendant No. 3 as a person of unsound mind was not a judgment in rem but it was a judgment interparties and it would, therefore, be admissible under sections 11 and

13 of the Evidence Act. The appellant also contended relying on the

decision in Amanchi Seshamma v. Amanchi Padmanabha Rao(1)

D that once a person is adjudged insane it is presumed that state of unsoundness will continue until proved to the contrary.

E

F

Counsel for the appellant therefore contended that the conclusion of

the High Court that defendant No. 3 was in a lucid interval at the time

of marriage was against the overwhelming documentary evidence.

The documents relied on by the appellant do not rule out lucid interval at the time of marriage on 30 August 1959. The High Court

relied on the evidence of D.W. 4 who attended the marriage. D.W. 4

was a teacher. His evidence was that defendant No. 3 at the time of

marriage talked with Musaliar. His further evidence was that Musaliar

called defendant No. 3 and she went near him and told him that he was

being authorised by her to give her in marriage to defendant No. 1.

The High Court rightly found that defendant No. 3 gave her consent

to the marriage and was in her lucid interval.

The High Court reversed the finding of the Trial Court and held

that the marriage took -place. The High Court relied on the oral

evidence and found that marriage in fact was held. The conclusion of

the High Court on both the questions is correct. The appeal is therefore dismissed. No order as to costs.

P.H.P. Appeal dismissed.

(I) I.LR. 40 Mad. 660.

ir