Anticipatory bail — Scope of jurisdiction while deciding bail application — Departmental enquiry against police officials — Judicial overreach. While considering application for anticipatory bail, Court is confined to question of grant or refusal of bail and cannot travel beyond scope of proceedings by directing departmental enquiry against police officials, monitoring disciplinary proceedings or passing adverse remarks unrelated to adjudication of bail application. After disposal of anticipatory bail application, Court becomes functus officio and cannot continue proceedings by calling status reports or supervising departmental action. (Paras 12 to 18)

 

Delhi High Court 

Criminal Procedure Code, 1973 — S.438 — Anticipatory bail — Scope of jurisdiction while deciding bail application — Departmental enquiry against police officials — Judicial overreach.

While considering application for anticipatory bail, Court is confined to question of grant or refusal of bail and cannot travel beyond scope of proceedings by directing departmental enquiry against police officials, monitoring disciplinary proceedings or passing adverse remarks unrelated to adjudication of bail application. After disposal of anticipatory bail application, Court becomes functus officio and cannot continue proceedings by calling status reports or supervising departmental action.
(Paras 12 to 18)

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Criminal Procedure Code, 1973 — Judicial discipline — Adverse remarks against public officials — Principles of natural justice.

Adverse or disparaging remarks against police officials cannot be made without affording opportunity of hearing, particularly where such remarks prejudge conduct of officials and affect disciplinary proceedings. Courts should refrain from unnecessary castigatory observations regarding investigation unless absolutely necessary for adjudication of lis.
(Paras 9, 15 to 17)

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Criminal Procedure Code, 1973 — Bail proceedings — Scope — Functus officio.

Once anticipatory bail application stands finally disposed of, nothing survives before Court and continuation of proceedings thereafter by summoning officials, calling explanations or monitoring disciplinary proceedings is wholly without jurisdiction.
(Paras 14 and 15)

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FACTS OF THE CASE

1. FIR was registered under Section 363 IPC concerning missing minor girl and during investigation offences under Sections 328 and 376 IPC and Section 4 of POCSO Act were added.
   
2. Investigation was conducted by different Investigating Officers from time to time and during pendency of investigation one co-accused moved application for anticipatory bail before Sessions Court.
   
3. While disposing of anticipatory bail application, Sessions Court called for status reports regarding delay in investigation and directed appearance of previous IOs and SHOs.
   
4. Subsequently, Sessions Court ordered departmental enquiry against concerned police officials and called for explanations from supervisory officers regarding alleged delay in investigation.
   
5. Petitioners challenged said orders contending that after disposal of anticipatory bail application the Sessions Court had become functus officio and exceeded jurisdiction by continuing proceedings and directing disciplinary action.
   
6. Petitioners further contended that adverse remarks and directions for departmental enquiry were issued without affording them opportunity of hearing, thereby violating principles of natural justice.
   

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ANALYSIS OF FACTS AND LAW

The High Court examined permissible scope of jurisdiction exercised by a Court while deciding an application for anticipatory bail.

The Court reiterated that while adjudicating a bail application, jurisdiction of the Court remains confined to determination whether bail ought to be granted or refused. Bail proceedings cannot be converted into supervisory proceedings concerning administration of police department or disciplinary control over investigating officials.

Relying upon decision of the Supreme Court in State v. M. Murugesan, the Court held that even laudable objectives cannot justify exercise of jurisdiction beyond statutory limits while deciding bail matters.

The Court further held that once anticipatory bail application stood finally disposed of, the Sessions Court became functus officio and no proceedings survived thereafter. Consequently, continuation of proceedings by calling status reports, summoning police officials, directing departmental enquiries and monitoring such proceedings was wholly impermissible.

The judgment also emphasized principles of natural justice governing adverse judicial remarks against public officials. The Court held that disparaging remarks affecting reputation and disciplinary prospects of officials cannot be made without giving them opportunity of hearing.

The High Court further observed that unnecessary castigatory observations against investigating officers are to be avoided, particularly where such remarks are not essential for adjudication of controversy before Court.

Accordingly, impugned orders directing departmental enquiry and all consequential proceedings were set aside and adverse remarks expunged.

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RATIO DECIDENDI

While adjudicating an application for anticipatory bail under the Code of Criminal Procedure, the jurisdiction of the Court is confined solely to consideration of grant or refusal of bail, and after disposal of the bail application the Court becomes functus officio and cannot continue proceedings by directing or monitoring departmental enquiries against police officials, calling status reports or passing adverse remarks unrelated to adjudication of bail; and disparaging remarks affecting public officials cannot be made without affording them an opportunity of hearing in conformity with principles of natural justice.
(Paras 12 to 19)

Cross-examination — Closure of opportunity — One final opportunity — Grant of costs. Where party failed to cross-examine defence witness despite earlier opportunities, High Court in exercise of supervisory jurisdiction under Article 227 granted one final opportunity for cross-examination subject to payment of costs, holding that denial of opportunity would cause grave prejudice and that interests of justice would be adequately balanced by compensating opposite party through costs. (Paras 6 to 8)

 

Delhi High Court held that 

Constitution of India — Art.227 — Supervisory jurisdiction — Cross-examination — Closure of opportunity — One final opportunity — Grant of costs.

Where party failed to cross-examine defence witness despite earlier opportunities, High Court in exercise of supervisory jurisdiction under Article 227 granted one final opportunity for cross-examination subject to payment of costs, holding that denial of opportunity would cause grave prejudice and that interests of justice would be adequately balanced by compensating opposite party through costs.
(Paras 6 to 8)

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Civil Procedure Code, 1908 — Procedural law — Opportunity to lead evidence and cross-examination — Approach of Court.

Procedural rules are intended to advance cause of justice. Opportunity to cross-examine material witness may be granted upon terms where refusal would result in prejudice and inconvenience caused to opposite party can be compensated monetarily.
(Para 8)

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FACTS OF THE CASE

1. Petitioner invoked supervisory jurisdiction of High Court under Article 227 of Constitution challenging orders passed by Trial Court dismissing applications for bringing additional documents on record and for striking off defence.
2. During hearing before High Court, petitioner confined relief only to grant of opportunity to cross-examine DW-1.
3. Petitioner contended that denial of opportunity to cross-examine defence witness would cause grave prejudice to its case.
4. Respondents opposed petition contending that sufficient opportunities had already been granted earlier and petitioner failed to avail same.
5. High Court considered rival submissions and examined whether further opportunity ought to be granted in interests of justice.

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ANALYSIS OF FACTS AND LAW

The High Court exercised supervisory jurisdiction under Article 227 of the Constitution in relation to procedural orders passed by the Trial Court.

The Court noticed that though the petitioner had earlier failed to cross-examine DW-1 despite opportunities granted by the Trial Court, complete denial of opportunity to cross-examine the witness could seriously prejudice adjudication of the petitioner’s case.

The Court adopted a balanced procedural approach by recognizing two competing considerations:

• necessity to avoid prejudice caused by denial of cross-examination; and
• need to compensate opposite party for delay and inconvenience caused by repeated defaults.

The judgment reflects settled procedural jurisprudence that rules of procedure are intended to facilitate adjudication on merits and not to defeat substantive justice.

Accordingly, while disapproving petitioner’s earlier conduct, the Court held that interests of justice would be sufficiently protected by granting one final opportunity for cross-examination subject to payment of costs to respondents.

The Court therefore granted a single effective opportunity to cross-examine DW-1 upon payment of Rs.3,000/- as costs.

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RATIO DECIDENDI

In exercise of supervisory jurisdiction under Article 227 of the Constitution, High Court may grant one final opportunity to cross-examine a witness despite earlier defaults by the party, where denial of such opportunity would cause grave prejudice to adjudication of the case, and inconvenience caused to opposite party can be adequately compensated by imposition of costs.

Civil Procedure Code, 1908 — Order XII Rule 6 — Judgment on admissions — Scope — Recovery suit — Admissions in e-mails — Refund of advance amount — Preliminary decree. Where correspondence exchanged through e-mails clearly disclosed unequivocal admission by defendant regarding refund of specified amount after agreed deductions towards modification charges, Court was justified in passing decree under Order XII Rule 6 CPC to extent of admitted liability, while leaving disputed balance claims for trial. Conditional stipulation regarding time of repayment did not dilute clear admission of liability to refund admitted amount. (Paras 51 to 56)

 

Delhi High Court held that

Civil Procedure Code, 1908 — Order XII Rule 6 — Judgment on admissions — Scope — Recovery suit — Admissions in e-mails — Refund of advance amount — Preliminary decree.

Where correspondence exchanged through e-mails clearly disclosed unequivocal admission by defendant regarding refund of specified amount after agreed deductions towards modification charges, Court was justified in passing decree under Order XII Rule 6 CPC to extent of admitted liability, while leaving disputed balance claims for trial. Conditional stipulation regarding time of repayment did not dilute clear admission of liability to refund admitted amount.
(Paras 51 to 56)

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Civil Procedure Code, 1908 — Order XII Rule 6 — Admission — Nature of admission required.

For exercise of jurisdiction under Order XII Rule 6 CPC, admission must be clear, categorical and unambiguous. Once defendant unequivocally admits liability to refund definite amount, Court can decree suit to that extent notwithstanding subsisting disputes relating to remaining claims or allegations regarding breach of contract.
(Paras 51 to 55)

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FACTS OF THE CASE

1. Plaintiff instituted suit for recovery of amounts arising out of transactions relating to supply of screen-printing and allied machinery pursuant to purchase orders issued in favour of defendant.
   
2. Plaintiff alleged delay and failure in supply of one of machines and consequently cancelled purchase order seeking refund of advance amount paid to defendant.
   
3. Defendant contended that delay occurred due to non-payment of second instalment by plaintiff and asserted that substantial expenditure had already been incurred towards manufacture and modification of machinery.
   
4. Plaintiff filed application under Order XII Rule 6 CPC relying upon e-mail correspondence wherein defendant agreed to refund advance amount after deduction of specified sum towards modification charges.
   
5. Trial Court found clear admission regarding refund of Rs.4,98,500/- and passed preliminary decree to that extent while directing trial to continue regarding remaining disputed claims.
   
6. Defendants challenged decree contending that correspondence did not constitute unequivocal admission and that several disputed questions required adjudication after full trial.
   

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ANALYSIS OF FACTS AND LAW

The High Court examined scope of Order XII Rule 6 CPC relating to judgment on admissions.

The Court undertook detailed analysis of e-mail correspondence exchanged between parties after cancellation of purchase order. The Court found that defendant had consistently acknowledged receipt of advance amount and had expressly agreed to refund the amount after deduction of Rs.2,10,000/- towards modification costs required for converting specially manufactured machinery into standard form for sale to another customer.

The Court observed that e-mail dated 14.12.2015 specifically stated that advance would be refunded after deducting Rs.2,10,000/- and thereby unequivocally admitted liability to refund balance amount of Rs.4,98,500/-.

The judgment clarifies that existence of disputes regarding breach of contract, delay in delivery or entitlement to additional claims does not preclude passing of decree under Order XII Rule 6 CPC where part liability stands clearly admitted.

The Court further held that stipulation regarding timing of repayment, namely refund upon securing another customer or before end of financial year, merely qualified the mode or timing of payment and did not dilute substantive admission of liability itself.

Accordingly, Trial Court was justified in partly decreeing suit to extent of admitted amount while leaving remaining disputed claims to be adjudicated after evidence.

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RATIO DECIDENDI

Where correspondence exchanged between parties contains clear and unequivocal admission by defendant acknowledging liability to refund a definite amount after agreed deductions, Court is empowered under Order XII Rule 6 CPC to pass decree to extent of such admitted liability notwithstanding pendency of disputes relating to remaining claims, and a stipulation regarding timing or manner of repayment does not detract from the unequivocal nature of the admission.
(Paras 51 to 56)

Civil Procedure Code, 1908 — S.20(c) — Territorial jurisdiction — Recovery suit — Part of cause of action arising within jurisdiction — Effect. Where consignments were handed over at Delhi, payments and dishonoured cheques were received and presented at Delhi, accounts were maintained at Delhi and defendant company had registered office at Delhi, part of cause of action arose within Delhi conferring territorial jurisdiction upon Delhi Courts under Section 20(c) CPC. Mere mention of administrative office at another place in invoices or airway bills, in absence of exclusive jurisdiction clause, does not oust jurisdiction of Delhi Courts. (Paras 7 to 14)

 

Delhi High Court held that 

Civil Procedure Code, 1908 — S.20(c) — Territorial jurisdiction — Recovery suit — Part of cause of action arising within jurisdiction — Effect.

Where consignments were handed over at Delhi, payments and dishonoured cheques were received and presented at Delhi, accounts were maintained at Delhi and defendant company had registered office at Delhi, part of cause of action arose within Delhi conferring territorial jurisdiction upon Delhi Courts under Section 20(c) CPC. Mere mention of administrative office at another place in invoices or airway bills, in absence of exclusive jurisdiction clause, does not oust jurisdiction of Delhi Courts.
(Paras 7 to 14)

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Civil Procedure Code, 1908 — Order VII Rule 10 — Return of plaint — Territorial jurisdiction — Scope of enquiry.

While considering question of territorial jurisdiction at stage of Order VII Rule 10 CPC, Court is required to proceed on basis of averments contained in plaint and documents relied upon by plaintiff assuming same to be correct. Unrebutted pleadings and evidence cannot be discarded on presumptions.
(Para 10)

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FACTS OF THE CASE

1. Plaintiff instituted suit for recovery of money arising out of shipment and freight forwarding transactions alleging outstanding dues against defendant company.
   
2. Trial Court returned plaint under Order VII Rule 10 CPC holding that Delhi Courts lacked territorial jurisdiction and that cause of action pertained to Mumbai.
   
3. Plaintiff contended in appeal that consignments were handed over at Delhi, payments and dishonoured cheques were received and presented at Delhi and accounts relating to transactions were maintained at Delhi.
   
4. Defendant company did not appear before Trial Court and proceedings were conducted ex parte.
   
5. Material placed on record disclosed that defendant company had its registered office at Punjabi Bagh, New Delhi, though certain invoices reflected Mumbai office address.
   
6. Plaintiff challenged order returning plaint contending that part of cause of action had arisen within Delhi attracting Section 20(c) CPC.
   

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ANALYSIS OF FACTS AND LAW

The High Court examined scope of Section 20(c) CPC governing territorial jurisdiction based upon place where cause of action wholly or partly arises.

The Court held that even partial accrual of cause of action within territorial limits of a Court is sufficient to confer jurisdiction under Section 20(c) CPC.

Upon examination of pleadings and unrebutted evidence, the Court found that substantial parts of commercial transactions occurred at Delhi. Consignments were handed over at Delhi, payments were received at Delhi, post-dated cheques were presented through Delhi bank accounts and defendant’s registered office was situated at Delhi.

The Court further held that mere mention of Mumbai administrative office in invoices or airway bills could not divest Delhi Courts of jurisdiction particularly in absence of any exclusive jurisdiction agreement between parties.

The judgment reiterates settled principle governing Order VII Rule 10 CPC that at stage of deciding territorial jurisdiction, Court must proceed on assumption that averments in plaint are correct. Since defendant remained ex parte and plaintiff’s pleadings remained unrebutted, Trial Court could not discard those assertions on presumptive reasoning.

The Court also relied upon earlier precedents holding that place where payment is received or where order is placed may constitute part of cause of action for purposes of territorial jurisdiction.

Accordingly, the High Court concluded that Delhi Courts possessed territorial jurisdiction and order returning plaint was unsustainable.

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RATIO DECIDENDI

For purposes of Section 20(c) CPC, where material parts of commercial transaction including handing over of consignments, receipt and presentation of cheques, maintenance of accounts and existence of registered office of defendant occur within territorial jurisdiction of a Court, part of cause of action arises therein conferring territorial jurisdiction upon such Court, and while deciding an application under Order VII Rule 10 CPC the Court must proceed on basis of plaint averments and unrebutted documents assuming them to be correct.
(Paras 7 to 14)

SARFAESI Act, 2002 — Security Interest (Enforcement) Rules, 2002 — Rule 9(2), Second Proviso — Public auction of secured asset — Highest bid equal to reserve price — Confirmation of sale — Consent of borrower and secured creditor — Mandatory requirement.

 AP High Court Held That 

SARFAESI Act, 2002 — Security Interest (Enforcement) Rules, 2002 — Rule 9(2), Second Proviso — Public auction of secured asset — Highest bid equal to reserve price — Confirmation of sale — Consent of borrower and secured creditor — Mandatory requirement.

When Authorised Officer conducting auction of secured asset fails to secure bid higher than reserve price and highest bid received is exactly equal to reserve price, sale cannot be confirmed without obtaining consent of borrower and secured creditor as contemplated under second proviso to Rule 9(2) of Security Interest (Enforcement) Rules, 2002. Expression “at such price” occurring in second proviso refers to reserve price itself. Confirmation of sale at reserve price without consent of borrower is contrary to statutory mandate and renders sale invalid.
(Paras 11 to 16)

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Statutory Interpretation — Proviso — Harmonious construction — Reserve price — Interpretation of “at such price”.

Rule 9(2) and both provisos appended thereto are required to be interpreted harmoniously. First proviso prohibits confirmation of sale below reserve price, while second proviso governs situation where bid received is not higher than reserve price. Interpretation that expression “at such price” means below reserve price is contrary to statutory scheme and legislative intent.
(Paras 15 and 16)

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FACTS OF THE CASE

1. Secured creditor initiated proceedings under SARFAESI Act for recovery of loan dues by bringing mortgaged secured asset to sale in public auction.
   
2. Reserve price for secured asset was fixed at Rs.3,48,00,000/- and in auction proceedings only one bidder participated.
   
3. Sole bidder offered amount exactly equal to reserve price and no bid higher than reserve price was received in auction.
   
4. Authorised Officer confirmed sale in favour of auction purchaser at reserve price without obtaining consent of borrower.
   
5. Borrower challenged validity of sale before Debts Recovery Tribunal under Section 17 of SARFAESI Act contending that second proviso to Rule 9(2) mandated borrower’s consent where sale was confirmed at reserve price after failure to secure higher bid.
   
6. Debts Recovery Tribunal accepted said contention and set aside sale. Debts Recovery Appellate Tribunal affirmed said finding.
   
7. Bank and auction purchaser separately challenged orders of DRT and DRAT before High Court.
   

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ANALYSIS OF FACTS AND LAW

The High Court examined scope and interpretation of Rule 9(2) of the Security Interest (Enforcement) Rules, 2002 along with its two provisos.

The Court noticed cleavage of judicial opinion among various High Courts regarding interpretation of the second proviso to Rule 9(2). While Madras and Delhi High Courts held borrower’s consent mandatory for confirmation of sale at reserve price, Kolkata and Kerala High Courts had taken contrary view.

After analyzing statutory scheme, the Court identified three distinct situations contemplated under Rule 9(2):
(i) where sale price exceeds reserve price;
(ii) where sale price is below reserve price; and
(iii) where sale price is exactly equal to reserve price.

The Court held that second proviso specifically governs third situation, namely where Authorised Officer fails to obtain price higher than reserve price. In such circumstances, sale may be confirmed only with consent of borrower and secured creditor.

Rejecting contrary interpretation, the Court held that expression “at such price” necessarily means reserve price itself and not a price below reserve price. Any other interpretation would conflict with first proviso which prohibits confirmation of sale below reserve price.

The Court further emphasized that statutory rules framed under SARFAESI Act possess binding statutory force and where law prescribes a particular mode for doing an act, same must be strictly complied with.

Consequently, confirmation of sale at reserve price without borrower’s consent was held invalid.

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RATIO DECIDENDI

Under the second proviso to Rule 9(2) of the Security Interest (Enforcement) Rules, 2002, where the Authorised Officer fails to obtain a bid higher than the reserve price and the highest bid received is exactly equal to the reserve price, sale of the secured asset can be confirmed only with consent of borrower and secured creditor, and confirmation of sale at reserve price without such consent is contrary to the statutory mandate and invalid in law.
(Paras 11 to 16)