Arbitration and Conciliation Act, 1996 — Ss.34 and 37 — Scope of interference with arbitral award — Re-appreciation of evidence — Computational objection — Adjustment of mobilization advance. Jurisdiction under Section 37 being narrower than jurisdiction under Section 34, appellate Court cannot undertake fresh factual determination or re-appreciation of evidence relating to computation and reconciliation of accounts between parties. Where arbitral award and material on record disclosed that mobilization advance and recoveries thereof had been duly accounted for, challenge alleging excess award on account of non-adjustment, founded merely on speculative apprehension and not on demonstrable patent illegality, does not warrant interference under Sections 34 or 37. (Paras 23 to 40)

 Delhi High Court held that 

Arbitration and Conciliation Act, 1996 — Ss.34 and 37 — Scope of interference with arbitral award — Re-appreciation of evidence — Computational objection — Adjustment of mobilization advance.

Jurisdiction under Section 37 being narrower than jurisdiction under Section 34, appellate Court cannot undertake fresh factual determination or re-appreciation of evidence relating to computation and reconciliation of accounts between parties. Where arbitral award and material on record disclosed that mobilization advance and recoveries thereof had been duly accounted for, challenge alleging excess award on account of non-adjustment, founded merely on speculative apprehension and not on demonstrable patent illegality, does not warrant interference under Sections 34 or 37.
(Paras 23 to 40)

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Arbitration and Conciliation Act, 1996 — Ss.34 and 37 — Patent illegality — Scope.

Interference with arbitral award under Sections 34 and 37 is confined to cases involving patent illegality, perversity, jurisdictional error or violation of fundamental legal principles. Appellate Court under Section 37 does not sit in appeal over findings of arbitral tribunal and cannot substitute its own view on facts or computation.
(Paras 23 to 29, 42)

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FACTS OF THE CASE

1. Disputes arose between parties out of contract agreement relating to execution of works and same were referred to arbitration in terms of arbitration clause contained in contract.
   
2. Arbitral Tribunal passed award granting various claims in favour of claimant including Claim No.6 relating to wrongful encashment of Performance Bank Guarantee (PBG).
   
3. Employer challenged arbitral award under Section 34 of Arbitration and Conciliation Act contending that while awarding amount under Claim No.6, Arbitrator failed to account for adjustment of mobilization advance, thereby resulting in excess payment.
   
4. Learned Single Judge dismissed Section 34 petition holding that plea regarding adjustment had not been raised before Arbitrator and that findings of Arbitrator did not warrant interference under Section 34.
   
5. In appeal under Section 37, challenge was confined only to Claim No.6 and appellant contended that amount awarded suffered from computational illegality due to alleged duplication and non-adjustment of mobilization advance.
   
6. Respondent asserted that mobilization advance had already been fully adjusted and accounted for in arbitral award including through recoveries made from running account bills and encashment of bank guarantee.
   

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ANALYSIS OF FACTS AND LAW

The Division Bench undertook detailed examination of the limited scope of appellate interference under Section 37 of the Arbitration and Conciliation Act.

The Court reiterated settled principle that jurisdiction under Section 37 is even more circumscribed than jurisdiction under Section 34 and does not permit appellate Court to reassess evidence or substitute its own factual conclusions for those of arbitral tribunal.

Relying upon precedents including MMTC Ltd. v. Vedanta Ltd., UHL Power Co. Limited v. State of Himachal Pradesh and NHAI v. M. Hakeem, the Court held that interference is permissible only in cases involving patent illegality, perversity or jurisdictional infirmity.

The Court then examined contention relating to alleged non-adjustment of mobilization advance. It noted that Claim No.6 related to wrongful invocation of Performance Bank Guarantee whereas Claim No.7 independently dealt with recovery and adjustment of mobilization advance.

The Court found from arbitral award and affidavit filed by respondent that recoveries towards mobilization advance, including recoveries through running account bills and encashment of bank guarantee, had already been taken into account by Arbitrator while computing amounts payable.

The Division Bench held that appellant’s plea essentially invited Court to undertake fresh reconciliation of accounts and re-appreciation of computation, which is impermissible within narrow scope of Sections 34 and 37.

The Court further observed that challenge rested merely on speculative apprehension regarding duplication and not upon any demonstrable patent illegality apparent on face of award. Consequently, no ground for interference was made out.

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RATIO DECIDENDI

In proceedings under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996, Court cannot undertake fresh factual determination, re-appreciation of evidence or reconciliation of accounts relating to arbitral computation, and where arbitral award together with material on record demonstrates that recoveries and adjustments have been duly accounted for, a challenge alleging excess award founded only on speculative apprehension and not on demonstrable patent illegality, perversity or jurisdictional error, does not warrant interference with the arbitral award.
(Paras 23 to 42)

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)

---

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)

SARFAESI Act, 2002 — Security Interest (Enforcement) Rules, 2002 — R.9(2), Second Proviso — Sale of secured asset — Reserve price — Authorised Officer failing to secure bid higher than reserve price — Confirmation of sale exactly at reserve price — Consent of borrower — Mandatory requirement.

 AP High Court Held that 

SARFAESI Act, 2002 — Security Interest (Enforcement) Rules, 2002 — R.9(2), Second Proviso — Sale of secured asset — Reserve price — Authorised Officer failing to secure bid higher than reserve price — Confirmation of sale exactly at reserve price — Consent of borrower — Mandatory requirement.

Where Authorised Officer in public auction fails to obtain bid higher than reserve price and sole bid received is exactly equal to reserve price, sale of secured asset cannot be confirmed without consent of borrower and secured creditor as mandated 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 and not a price below reserve price. 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 — SARFAESI Rules.

Rule 9(2) and both provisos appended thereto are required to be read harmoniously. First proviso prohibits confirmation of sale below reserve price, while second proviso governs situation where no price higher than reserve price is obtained. Statutory proviso being mandatory in nature must be strictly complied with.
(Paras 13 to 16)

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FACTS OF THE CASE

1. Secured creditor initiated proceedings under the SARFAESI Act against secured asset belonging to borrower consequent upon default in repayment of loan advanced to partnership firm.
   
2. Secured asset was brought to sale in public auction after fixation of reserve price at Rs.3,48,00,000/-.
   
3. In auction proceedings, only one bidder participated and offered bid exactly equal to reserve price. There was no bid higher than reserve price.
   
4. Authorised Officer confirmed sale in favour of sole bidder at reserve price without obtaining consent of borrower.
   
5. Borrower challenged validity of sale before Debts Recovery Tribunal contending that under second proviso to Rule 9(2) of the Security Interest (Enforcement) Rules, consent of borrower was mandatory where Authorised Officer failed to secure price higher than reserve price.
   
6. Debts Recovery Tribunal accepted contention and set aside sale. Appeal before Debts Recovery Appellate Tribunal was dismissed affirming said view.
   
7. Bank and auction purchaser separately approached High Court challenging legality of orders passed by DRT and DRAT.
   

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ANALYSIS OF FACTS AND LAW

The principal issue before the High Court concerned interpretation of the second proviso to Rule 9(2) of the Security Interest (Enforcement) Rules, 2002.

The Court noticed divergence of judicial opinion amongst various High Courts regarding meaning of expression “at such price” used in second proviso to Rule 9(2).

The Court analyzed Rule 9(2) and identified three distinct situations contemplated by statutory scheme:

1. where sale price obtained is higher than reserve price;
2. where sale price is below reserve price;
3. where sale price obtained 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, confirmation of sale at reserve price can be effected only with consent of borrower and secured creditor.

Rejecting contrary interpretation adopted by Kolkata High Court and Kerala High Court, the Court held that expression “at such price” necessarily refers to reserve price itself and not to any amount below reserve price.

The judgment emphasized that statutory rules framed under SARFAESI Act possess mandatory force and where statute prescribes that a thing shall be done in a particular manner, it must be done strictly in that manner alone.

The Court therefore concluded that confirmation of sale at reserve price without borrower’s consent was contrary to mandatory statutory requirement and consequently 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 conducting auction of secured asset fails to obtain a bid higher than the reserve price and the highest bid received is exactly equal to the reserve price, confirmation of sale can be effected only with consent of borrower and secured creditor, and any confirmation of sale at reserve price without such consent is invalid and contrary to the statutory mandate.
(Paras 11 to 16)

ADVOCATEMMMOHAN: Tender — Government Contracts — Earnest Money Depo...

ADVOCATEMMMOHAN: Tender — Government Contracts — Earnest Money Depo...: advocatemmmohan APEX COURT HELD THAT  Tender — Government Contracts — Earnest Money Deposit — Tender conditions — Interpretation — Out-of-St...

Tender — Government Contracts — Earnest Money Deposit — Tender conditions — Interpretation — Out-of-State bidder furnishing Fixed Deposit Receipt instead of Demand Draft — Tender clauses employing expression “may submit” — Condition held directory and not mandatory — Fixed Deposit Receipt constituting approved interest-bearing security — Disqualification of bidder by treating Demand Draft as compulsory — Unsustainable.

Tender conditions provided different approved modes for furnishing Earnest Money Deposit. Clause relating to out-of-State bidders employed expression “may submit” Demand Draft. Bidder furnished Fixed Deposit Receipt/interest-bearing security in favour of Tendering Authority. High Court treated furnishing of Demand Draft as mandatory and disqualified bidder. Supreme Court held that tender clauses were merely enabling and directory in nature and not mandatory. Fixed Deposit Receipt constituted an approved interest-bearing security within meaning of tender conditions. Court cannot import technical disqualifications not expressly contained in tender document. Disqualification set aside and qualification restored.
(Paras 7 to 10)

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FACTS OF THE CASE

1. A tender was floated by the Water Resources Department for execution of a construction project of substantial value. The tender process contemplated submission of bids in three envelopes, including technical and financial qualifications.
   
2. Under the tender conditions, Earnest Money Deposit (EMD) was required to be furnished in approved forms specified in Clause 2.13 of the tender document.
   
3. The bidder, being an out-of-State participant, furnished a Fixed Deposit Receipt/interest-bearing security in favour of the Executive Engineer concerned instead of a Demand Draft.
   
4. The Tendering Authority initially found the bidder qualified. However, the High Court subsequently disqualified the bidder holding that out-of-State bidders were mandatorily required to furnish EMD only through Demand Draft.
   
5. Before the Supreme Court, it was contended that the tender conditions used permissive language and recognized alternative approved interest-bearing securities, thereby making submission of Demand Draft optional and not mandatory.
   
6. During pendency of proceedings, a subsequent disqualification relating to another stage of technical scrutiny also arose, though the same was not directly under challenge before the Supreme Court.
   

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ANALYSIS OF FACTS AND LAW

The Supreme Court undertook a textual interpretation of the tender conditions governing submission of Earnest Money Deposit. The Court focused particularly upon Clauses 2.13 and 2.15 of the tender document.

The Court observed that the clause applicable to out-of-State bidders repeatedly employed the expression “may submit” while referring to submission of Demand Draft. The use of permissive language indicated that the provision was enabling and directory rather than compulsory.

The Court further noticed that the tender conditions themselves recognized “Approved Interest Bearing Security” as one of the valid forms of EMD. A Fixed Deposit Receipt clearly possessed the character of an interest-bearing security and therefore substantially satisfied the tender requirement.

The judgment emphasizes that in tender jurisprudence, Courts cannot create additional disqualifications by interpretative expansion when the tender document itself does not prescribe such mandatory exclusion. Judicial review must remain confined to the actual stipulations contained in the contract.

The Supreme Court therefore held that the High Court erred in converting an optional mode of payment into a compulsory condition and thereby illegally excluding the bidder from consideration.

The Court also adopted an equitable approach regarding the subsequent disqualification arising at Envelope-B stage by permitting the bidder to approach the authorities afresh after restoration of qualification under Envelope-A.

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RATIO DECIDENDI

Where tender conditions governing Earnest Money Deposit employ permissive language such as “may submit” and simultaneously recognize multiple approved forms of security, furnishing of Fixed Deposit Receipt/interest-bearing security by an out-of-State bidder constitutes substantial compliance with the tender conditions, and Courts cannot treat submission of Demand Draft as a mandatory requirement by importing a disqualification not expressly contained in the tender document.
(Paras 7 to 10)

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HELD

• Judgment of the High Court set aside.
• Bidder’s qualification with respect to Envelope-A restored.
• Liberty granted to approach Tendering Authority regarding subsequent Envelope-B disqualification.
• Supreme Court refrained from adjudicating merits of Envelope-B disqualification.

Where disputes concerning immovable property substantially involve contested questions of title, ownership and possession, and no prima facie cognizable criminal offence is disclosed upon preliminary enquiry, police authorities may legitimately treat the matter as civil in nature, and the High Court in exercise of jurisdiction under Article 226 ordinarily will relegate the parties to appropriate civil remedies rather than compel initiation of criminal proceedings.

 

AP HIGH COURT HELD THAT 

Constitution of India – Article 226 – Writ of Mandamus – Police inaction complaint – Land dispute involving allegations of trespass and crop destruction – Distinction between civil dispute and cognizable criminal offence – Scope of judicial interference in police enquiry where title and possession are disputed.

The petitioner claimed ownership and possession over Ac.2.74 cents of agricultural land in Survey No.43/23 and alleged forcible interference, trespass and destruction of Eucalyptus crop by unofficial respondents. Complaints were submitted to police authorities seeking initiation of criminal proceedings. The police conducted preliminary enquiry and opined that the dispute pertained to title, ownership and possession, and was civil in nature. The High Court disposed of the writ petition granting liberty to approach the competent civil court.

Held:

A. Where dispute substantially relates to title, ownership and possession of immovable property, police authorities may treat matter as civil dispute in absence of prima facie cognizable offence.

The respondent authorities, upon preliminary enquiry, found pending civil disputes regarding possession and title over the subject property and therefore declined criminal intervention. Paras 4-5.

B. Writ jurisdiction under Article 226 is ordinarily not invoked for adjudication of disputed questions relating to possession and title over immovable property.

The Court accepted the submission that adjudication of competing rights over land falls within domain of competent civil court. Para 5.

C. Mere allegations of interference in property disputes do not automatically warrant criminal prosecution when underlying dispute is essentially civil.

The Court did not find grounds to compel initiation of criminal proceedings merely because complaints alleging trespass and interference were submitted. Paras 2 and 4.

D. Liberty reserved to seek appropriate civil remedies.

While disposing of the writ petition, the Court expressly preserved liberty of the petitioner to approach the competent civil court in case of interference with possession. Para 5.

---

ANALYSIS OF LAW

1. Scope of Mandamus Against Police Authorities

The petitioner sought:

• direction to police authorities,
• initiation of criminal proceedings,
• protection of possession.

The High Court examined whether:

• police inaction amounted to arbitrary refusal,
  or
• matter primarily involved civil adjudication.

The Court accepted the State’s position that:
the dispute related to:

• title,
• ownership,
• possession.

Thus:
criminal process could not be mechanically invoked.

Paras 1 and 4.

---

2. Civil Dispute versus Criminal Proceedings

The judgment reiterates the settled principle that:
property disputes involving competing claims over possession and ownership ordinarily require civil adjudication.

The Court noted:

• mutation proceedings were pending,
• earlier writ proceedings existed,
• parties disputed possession and entitlement.

Therefore:
the police were justified in treating the matter as predominantly civil.

Important principle:

Criminal law cannot become substitute for civil adjudication of land disputes.

Paras 2 and 4.

---

3. Limited Scope of Article 226 in Property Disputes

The Court refrained from:

• adjudicating title,
• deciding possession,
• granting substantive injunctive relief.

Instead, the Court relegated parties to:

• competent civil court.

Jurisdictional principle:

Disputed questions of fact concerning immovable property are generally unsuitable for determination under Article 226.

Para 5.

---

4. Police Enquiry and Prima Facie Satisfaction

The State authorities submitted that:

• preliminary enquiry was conducted,
• no prima facie cognizable offence emerged,
• matter required civil adjudication.

The Court recorded and accepted this submission.

Legal significance:

Police are not bound to register criminal proceedings in every property-related complaint where essential dispute concerns civil rights.

Para 4.

---

ANALYSIS OF FACTS

1. Petitioner’s Claim

The petitioner claimed:

• ownership through registered sale deed,
• possession for nearly 50 years,
• cultivation of commercial crops.

Para 2.

---

2. Alleged Interference

According to petitioner:

• unofficial respondents trespassed,
• destroyed Eucalyptus crop,
• attempted forcible dispossession,
• threatened petitioner repeatedly.

Complaints dated:

• 10.12.2025,
• 21.12.2025,
• 27.03.2026

were allegedly ignored.

Para 2.

---

3. State’s Stand

The State submitted:

• preliminary enquiry was conducted,
• civil disputes were pending,
• no prima facie cognizable offence was disclosed,
• dispute involved title and possession.

Para 4.

---

4. Court’s Final Course

The High Court:

• disposed of writ petition,
• declined coercive direction against police,
• reserved liberty to seek civil remedies.

Para 5.

---

RATIO DECIDENDI

Where disputes concerning immovable property substantially involve contested questions of title, ownership and possession, and no prima facie cognizable criminal offence is disclosed upon preliminary enquiry, police authorities may legitimately treat the matter as civil in nature, and the High Court in exercise of jurisdiction under Article 226 ordinarily will relegate the parties to appropriate civil remedies rather than compel initiation of criminal proceedings.

---

Final Holding

The High Court disposed of the writ petition after recording the State’s submission that the dispute was civil in nature and granted liberty to the petitioner to approach the competent civil court for appropriate relief in the event of interference with possession.

Criminal Law – Bail under UAPA and NDPS Act – Long incarceration – Speedy trial under Article 21 – Scope of Section 43-D(5) UAPA and Section 37 NDPS Act – Binding effect of larger Bench precedents – Whether statutory embargo overrides constitutional liberty – Grant of bail despite serious allegations of narco-terrorism.

 apex court held that 

Criminal Law – Bail under UAPA and NDPS Act – Long incarceration – Speedy trial under Article 21 – Scope of Section 43-D(5) UAPA and Section 37 NDPS Act – Binding effect of larger Bench precedents – Whether statutory embargo overrides constitutional liberty – Grant of bail despite serious allegations of narco-terrorism.

The appellant was prosecuted under the provisions of the Unlawful Activities (Prevention) Act, 1967, NDPS Act and IPC on allegations of narco-terrorism, terror funding and association with proscribed terrorist organisations. He remained in custody from 11.06.2020. Chargesheet was filed in 2020, charges were framed in 2023 and more than 350 prosecution witnesses remained to be examined. Bail was denied by the Special NIA Court and High Court primarily relying upon Section 43-D(5) UAPA. The Supreme Court examined the constitutional limitations on statutory restrictions governing bail under special statutes.

Held:

A. Constitutional courts retain power to grant bail notwithstanding statutory embargo under Section 43-D(5) UAPA.

The restrictions imposed by Section 43-D(5) UAPA do not oust the jurisdiction of constitutional courts to grant bail where continued incarceration and delay in trial infringe Article 21 of the Constitution. Paras 21-24.

B. Right to speedy trial is integral facet of Article 21 even in cases involving terrorism and national security.

Seriousness of allegations cannot justify indefinite incarceration of an undertrial where trial is unlikely to conclude within a reasonable period. Delay resulting in prolonged pre-trial detention converts detention into punishment. Paras 19, 21-25.

C. Rigours of special statutes “melt down” where trial is unlikely to conclude within reasonable time.

Reaffirming Union of India v. K.A. Najeeb, the Court held that statutory restrictions under special enactments cannot be used to effect wholesale denial of constitutional guarantees. Paras 21-23.

D. Smaller Benches cannot dilute or circumvent binding larger Bench precedents.

The Court criticised attempts by smaller Benches to narrow the effect of larger Bench rulings without express disagreement or reference to larger Bench. Judicial discipline requires adherence to binding precedent. Paras 2, 26-27.

E. Bail jurisprudence under UAPA must harmonise national security concerns with constitutional liberty.

Though allegations relating to terrorism and narco-funding are grave, constitutional courts are required to balance:

• societal security,
• prosecutorial interests,
• personal liberty,
• speedy trial guarantees.

Paras 19-24.

F. Long incarceration coupled with uncertain completion of trial justifies grant of bail.

The Court noted:

• custody exceeding five years and nine months,
• framing of charge after substantial delay,
• over 350 witnesses yet to be examined,
• absence of likelihood of early conclusion of trial.

Such circumstances justified constitutional intervention. Paras 9, 21-25.

---

ANALYSIS OF LAW

1. Constitutional Override over Statutory Bail Restrictions

The judgment is a major reaffirmation of constitutional supremacy in bail jurisprudence under special criminal statutes.

The Court examined:

• Section 43-D(5) UAPA,
• Section 37 NDPS Act,
• Article 21.

The Court held:
statutory restrictions do not eclipse constitutional guarantees.

The Court reaffirmed:
constitutional courts retain power to grant bail where:

• incarceration becomes oppressive,
• trial is unduly delayed,
• Article 21 stands violated.

Central constitutional principle:

Procedure established by law cannot become mechanism for indefinite pre-trial punishment.

Paras 21-24.

---

2. Reaffirmation of K.A. Najeeb

The Court strongly reaffirmed:
Union of India v. K.A. Najeeb

The judgment emphasised the famous principle from Najeeb:

“the rigours of such provisions will melt down…”

where:

• trial is unlikely to conclude within reasonable time,
• incarceration already undergone is substantial.

The Court clarified:
this was not:

• equitable relaxation,
• fact-specific indulgence,
  but
• binding constitutional doctrine.

Paras 21-23.

---

3. Criticism of Judicial Dilution by Smaller Benches

A striking feature of the judgment is its discussion on precedent discipline.

The Court specifically examined:
Gurwinder Singh v. State of Punjab

and observed that:
a smaller Bench cannot:

• dilute,
• distinguish away,
• circumvent

binding larger Bench precedent without reference.

Important doctrinal observation:

Judicial discipline forms part of rule of law.

The Court held:
if disagreement exists,
proper course is:

• reference to larger Bench,
  not
• indirect narrowing.

Paras 2, 26-27.

---

4. Article 21 and Speedy Trial

The Court reiterated:
speedy trial is inseparable from:

• personal liberty,
• fair procedure,
• constitutional dignity.

The Court recognised that:
undertrials under special statutes often suffer:

• indefinite incarceration,
• procedural stagnation,
• delayed evidence,
• prosecutorial delay.

Important holding:

Gravity of accusation cannot indefinitely suspend Article 21 protections.

Paras 19-25.

---

5. Bail under UAPA and NDPS Act

The judgment harmonises:

• national security concerns,
  with
• constitutional limitations.

The Court did not dilute seriousness of:

• terror allegations,
• narco-terrorism,
• terror funding.

However, it held:
severity of offence alone cannot justify endless custody where:

• trial remains distant,
• prosecution cannot conclude evidence promptly.

Jurisprudential significance:

Preventive detention through delayed trial is constitutionally impermissible.

Paras 20-25.

---

ANALYSIS OF FACTS

1. Allegations Against Appellant

The appellant was accused of:

• narco-terror funding,
• heroin smuggling,
• terror financing,
• links with LeT/HM operatives,
• conspiracy under NDPS and UAPA.

Paras 5-6.

---

2. Custody and Delay

The appellant remained incarcerated since:
11.06.2020.

Chargesheet:

• filed in 2020.

Charges:

• framed only in 2023.

Witnesses remaining:

• more than 350.

The Court treated these factors as constitutionally significant.

Paras 9, 21-25.

---

3. Bail Granted to Co-accused

The appellant relied upon:

• bail granted to co-accused,
• parity principle,
• similar accusations against others already enlarged on bail.

Paras 9.5, 11.1-11.3.

---

4. Prosecution Stand

NIA opposed bail on grounds:

• gravity of allegations,
• terror links,
• recovery of narcotics and cash,
• linkage with Pakistan-based operatives.

Paras 10-10.15.

---

5. Supreme Court’s Constitutional Concern

The Court ultimately focused on:

• prolonged incarceration,
• absence of near possibility of trial completion,
• constitutional protection of liberty,
• binding nature of K.A. Najeeb.

Paras 21-27.

---

RATIO DECIDENDI

The statutory restrictions on grant of bail under Section 43-D(5) of the Unlawful Activities (Prevention) Act, 1967 and similar special enactments do not extinguish the constitutional power of courts to grant bail where prolonged incarceration and undue delay in trial result in violation of the fundamental right to personal liberty and speedy trial guaranteed under Article 21 of the Constitution. A smaller Bench cannot dilute or circumvent binding larger Bench precedent governing such constitutional principles without reference to a larger Bench.

---

Final Holding

The Supreme Court held that prolonged incarceration and absence of realistic possibility of early completion of trial warranted constitutional scrutiny notwithstanding statutory embargo under UAPA and NDPS Act. The Court reaffirmed the binding constitutional principles laid down in Union of India v. K.A. Najeeb concerning grant of bail in cases of delayed trial under special statutes.

Civil Procedure – Partition Suit – Preliminary Decree and Final Decree – Executability – Whether decree can be both preliminary and final – Partition by metes and bounds impossible – Sale of property and apportionment of sale proceeds – Scope of Order XX Rule 18 CPC – Execution proceedings wrongly terminated. The appellant obtained a decree declaring half share in a flat jointly purchased with her estranged husband. The decree also granted possession, mesne profits, appointment of Advocate Commissioner for division by metes and bounds, and in default contemplated sale of the property and division of sale proceeds. The Advocate Commissioner later reported that physical division was impossible. Execution proceedings initiated for sale and apportionment were repeatedly obstructed. The High Court held that the decree was only a preliminary decree and directed the decree-holder to seek a separate final decree before execution. The Supreme Court reversed.

 

Civil Procedure – Partition Suit – Preliminary Decree and Final Decree – Executability – Whether decree can be both preliminary and final – Partition by metes and bounds impossible – Sale of property and apportionment of sale proceeds – Scope of Order XX Rule 18 CPC – Execution proceedings wrongly terminated.

The appellant obtained a decree declaring half share in a flat jointly purchased with her estranged husband. The decree also granted possession, mesne profits, appointment of Advocate Commissioner for division by metes and bounds, and in default contemplated sale of the property and division of sale proceeds. The Advocate Commissioner later reported that physical division was impossible. Execution proceedings initiated for sale and apportionment were repeatedly obstructed. The High Court held that the decree was only a preliminary decree and directed the decree-holder to seek a separate final decree before execution. The Supreme Court reversed.

Held:

A. A decree may simultaneously possess characteristics of both preliminary and final decree.

Though ordinarily a preliminary decree merely declares rights and leaves further proceedings to follow, in appropriate circumstances a decree may be partly preliminary and partly final depending upon the nature of adjudication and executable directions contained therein. Paras 11-13.

B. Substance of decree and not nomenclature determines executability.

The High Court erred in proceeding merely on the nomenclature of the decree dated 13.04.2012 as a “preliminary decree”. Courts must examine the operative clauses and ascertain whether executable rights and remedies have already been conclusively determined. Paras 14-16.

C. Where decree itself contemplates sale in default of partition by metes and bounds, separate final decree may become unnecessary.

The decree:

• determined shares,
• granted possession,
• awarded mesne profits,
• appointed Advocate Commissioner,
• provided for sale and apportionment if partition by metes and bounds was impossible.

Once the Advocate Commissioner reported impossibility of physical partition, the executing court was justified in proceeding with auction and distribution of sale proceeds. Paras 15-17.

D. Termination of execution proceedings amounted to illegal exercise of jurisdiction.

The High Court wrongly interdicted execution proceedings and unnecessarily directed filing of fresh proceedings for passing of final decree despite substantial adjudication already existing within decree itself. Para 16.

E. Court reiterated that final decree proceedings need not be separately instituted.

Relying upon Kattukandi Edathil Krishnan v. Kattukandi Edathil Valsan, the Supreme Court reiterated that after passing preliminary decree, trial court should suo motu proceed towards final decree and separate proceedings are unnecessary. Para 16.

---

ANALYSIS OF LAW

1. Distinction Between Preliminary and Final Decree

The judgment revisits settled principles under:

• Section 2(2) CPC,
• Order XX Rule 18 CPC.

The Court reiterated:

Preliminary decree:

• determines rights/shares,
• leaves further proceedings pending.

Final decree:

• completely disposes of suit,
• works out rights by actual division or executable relief.

However, the Court emphasised that:
a decree may be:

• partly preliminary,
• partly final.

The Court relied upon:

• Shankar Balwant Lokhande v. Chandrakant Shankar Lokhande
• Bimal Kumar v. Shakuntala Debi

Paras 11-13.

---

2. Executability Depends on Substance of Adjudication

The Supreme Court strongly criticised the High Court for mechanically relying upon nomenclature.

The Court held:
the determining factor is:

• contents of decree,
• operative directions,
• extent of adjudication.

The decree in present case had already:

• determined shares,
• granted possession,
• quantified mesne profits,
• provided execution mechanism,
• prescribed alternative mode through sale.

Thus, executable rights already crystallised.

Important principle:

Courts must examine substance and practical effect, not merely label assigned to decree.

Paras 14-16.

---

3. Partition Decrees and Impossibility of Division by Metes and Bounds

The Advocate Commissioner reported:

• flat was incapable of physical division.

The decree itself anticipated such eventuality and directed:

• sale of property,
• apportionment of consideration.

The Supreme Court held:
once impossibility of partition was established,
auction became natural culmination of decree.

Therefore:
separate “formal” final decree became unnecessary ritualistic exercise.

Legal significance:

Procedure cannot override substantive justice or frustrate executable rights.

Paras 15-17.

---

4. Order XX Rule 18 CPC and Suo Motu Duty of Court

The Court reaffirmed the principle from:
Kattukandi Edathil Krishnan v. Kattukandi Edathil Valsan

that:

• partition suits continue till final decree,
• separate final decree proceedings are unnecessary,
• trial courts should suo motu proceed further after preliminary decree.

The Supreme Court observed that:
despite this settled position,
the High Court paradoxically directed filing of another application.

The Court termed the entire litigation history a:
“Comedy of Errors”.

Paras 2, 16.

---

5. Execution Jurisdiction and Judicial Error

The Supreme Court characterised the High Court’s interference as:

• legally unsustainable,
• contrary to decree itself,
• illegal exercise of jurisdiction.

The judgment demonstrates judicial preference for:

• practical justice,
• expeditious enforcement,
• avoidance of procedural multiplicity.

The Court also reiterated the classic observation:

“the difficulties of a litigant in India begin when he has obtained a decree.”

Para 2.

---

ANALYSIS OF FACTS

1. Nature of Dispute

The appellant and her husband jointly purchased the flat from combined income.

After judicial separation:

• appellant sought partition and possession.

Paras 3-4.

---

2. Terms of Decree Dated 13.04.2012

The decree:

• declared ½ share each,
• granted possession rights,
• awarded mesne profits,
• appointed Advocate Commissioner,
• contemplated sale if physical partition impossible.

Para 4.

---

3. Advocate Commissioner’s Report

The Commissioner reported:

• flat could not be divided by metes and bounds.

Executing Court therefore initiated:

• auction process,
• inter se bidding.

Paras 5-6.

---

4. Repeated Obstruction of Execution

The respondent repeatedly approached High Court challenging:

• impleadment,
• execution process,
• auction proceedings.

Ultimately High Court terminated execution proceedings altogether and directed decree-holder to seek final decree afresh.

Paras 5-7.

---

5. Supreme Court’s Final Directions

The Supreme Court:

• restored execution proceedings,
• directed fresh auction,
• permitted parties to participate in bidding,
• directed adjustment of mesne profits,
• ordered completion within two months considering appellant’s advanced age.

Paras 17-18.

---

RATIO DECIDENDI

In a partition suit, executability of a decree depends upon its substantive adjudicatory content and not merely its nomenclature as a “preliminary decree”. Where the decree itself determines shares, grants consequential reliefs, appoints a commissioner, and further provides for sale and apportionment in the event partition by metes and bounds becomes impossible, such decree may operate as both preliminary and final to the extent necessary for execution, and separate formal final decree proceedings need not be insisted upon mechanically.

---

Final Holding

The Supreme Court set aside the High Court orders terminating execution proceedings, restored Execution Case No. EX-A-1600007/14, and directed auction and apportionment of sale proceeds in accordance with decree and Commissioner’s report. Civil appeals allowed.

Criminal Procedure – Bail Jurisdiction – Scope of powers under Section 483 BNSS, 2023 – Whether High Court while exercising bail jurisdiction can issue general administrative directions governing criminal justice administration – Distinction between constitutional and statutory powers – Limits of judicial directions in bail proceedings.

apex court held that 

Criminal Procedure – Bail Jurisdiction – Scope of powers under Section 483 BNSS, 2023 – Whether High Court while exercising bail jurisdiction can issue general administrative directions governing criminal justice administration – Distinction between constitutional and statutory powers – Limits of judicial directions in bail proceedings.

The Supreme Court considered legality of directions issued by the Allahabad High Court while rejecting a bail application, whereby the High Court directed trial courts and State authorities to implement systemic measures regarding execution of summons, coercive processes and witness production. The impugned directions were founded upon earlier bail orders in Bhanwar Singh and Jitendra, wherein extensive directions had been issued to State authorities regarding departmental accountability and criminal process administration. The Supreme Court examined whether such directions could validly be issued while exercising jurisdiction under Section 483 BNSS, 2023.

Held:

A. Jurisdiction under Section 483 BNSS is confined to consideration of grant or refusal of bail.

While exercising powers under Section 483 BNSS, the High Court or Sessions Court is concerned only with the question whether the accused should be released on bail or continue in custody. The provision does not authorise issuance of wide-ranging administrative or policy directions unrelated to adjudication of bail. Paras 5-7.

B. High Court exercising statutory bail jurisdiction cannot enlarge scope of proceedings by invoking constitutional status.

Though High Court is a constitutional court, when exercising powers under a statute, its authority remains confined to statutory contours. Constitutional powers and statutory powers are distinct and cannot overlap so as to enlarge statutory jurisdiction beyond legislative limits. Para 7.

C. Constitutional powers cannot overshadow statutory limitations.

The Supreme Court reiterated that constitutional powers emanate directly from the Constitution, whereas statutory powers are derivative and confined to the four corners of the enabling enactment. Exercise of statutory jurisdiction contrary to statutory limits constitutes jurisdictional error. Para 7.

D. Administrative directions issued in earlier bail proceedings were unsustainable.

Directions concerning:

• departmental accountability,
• witness production,
• summons execution,
• police monitoring mechanisms,
• process registers,
• nodal officers,
  issued during bail proceedings exceeded permissible scope of bail jurisdiction and were liable to be set aside. Paras 4, 7-8.

E. However, administrative measures already undertaken by State may continue independently.

The Court clarified that although judicial directions were set aside for want of jurisdiction, administrative mechanisms already evolved by State authorities may continue independently subject to applicable law. Para 8.

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ANALYSIS OF LAW

1. Scope of Bail Jurisdiction under Section 483 BNSS

The central legal issue concerned:

• limits of bail jurisdiction,
• extent of judicial authority in bail proceedings.

The Supreme Court held that Section 483 BNSS is narrowly structured.

The provision authorises the Court only to:

• grant bail,
• refuse bail,
• impose conditions,
• modify bail conditions,
• cancel bail.

The Court categorically held:
bail jurisdiction cannot become a platform for:

• criminal justice reform,
• police administration restructuring,
• procedural governance directions,
• statewide administrative mandates.

Principle laid down:

Jurisdiction must remain confined to statutory subject matter.

Paras 5-6.

---

2. Distinction Between Constitutional and Statutory Powers

The judgment contains an important exposition on:

• constitutional powers,
• statutory powers,
• institutional competence.

The Court explained:

Constitutional powers:

• flow directly from Constitution,
• are sovereign in nature,
• cannot be curtailed by ordinary legislation.

Examples:

• Article 32,
• Article 85,
• Article 200.

Statutory powers:

• are delegated and derivative,
• exist only within statute,
• are confined by legislative intent.

The Court emphasized:
even constitutional courts must respect statutory boundaries while exercising statutory jurisdiction.

Key doctrinal holding:

Possession of constitutional status does not automatically constitutionalise every exercise of jurisdiction.

Para 7.

---

3. Jurisdictional Error Doctrine

The Court characterised the High Court’s action as:

• jurisdictional overreach,
• exercise beyond statutory competence.

The Court relied upon:
State of U.P. v. Anurudh

In Anurudh, the Supreme Court had similarly disapproved far-reaching directions issued in bail proceedings concerning age determination under POCSO matters.

The Court reaffirmed:
statutory jurisdiction cannot be expanded by invoking:

• Article 21,
• constitutional values,
• public interest concerns.

unless law itself permits such enlargement.

Important principle:

Good intentions cannot validate jurisdictional excess.

Paras 7-8.

---

4. Separation Between Adjudicatory and Administrative Domains

The judgment draws a clear boundary between:

• adjudicatory functions,
  and
• executive administration.

The impugned directions included:

• creation of nodal officers,
• process monitoring systems,
• accountability mechanisms,
• departmental disciplinary frameworks,
• maintenance of witness registers,
• statewide police supervision.

The Supreme Court held:
such governance structures fall primarily within executive/administrative sphere and cannot be judicially legislated in collateral bail proceedings.

Jurisprudential importance:

The judgment reinforces:

• separation of powers,
• institutional discipline,
• procedural restraint.

Paras 4-8.

---

5. Limited Preservation of Administrative Measures

Interestingly, despite setting aside judicial directions, the Court preserved:

• administrative systems voluntarily evolved by State authorities.

The Court allowed:

• summons monitoring systems,
• nodal mechanisms,
• process execution structures

to continue independently.

Thus, the Court distinguished:

• invalidity of judicial mandate,
  from
• possible administrative validity of executive action.

Para 8.

---

ANALYSIS OF FACTS

1. Bail Proceedings Before Allahabad High Court

The appellant’s second bail application was rejected.

While dismissing bail, the High Court:

• directed trial courts to issue summons/coercive processes,
• ordered compliance with earlier judicial directions,
• incorporated executive circulars as judicial mandates.

Paras 2-4.

---

2. Earlier Bail Orders in Bhanwar Singh and Jitendra

In earlier bail matters, the High Court:

• expressed concern regarding delay in criminal trials,
• sought affidavits from Home Secretary and DGP,
• framed extensive procedural accountability mechanisms.

The State thereafter issued:

• nodal officer systems,
• monitoring protocols,
• process registers,
• supervisory structures.

Paras 4.

---

3. Supreme Court Interim Bail

The Supreme Court initially granted interim bail and confined consideration to:

• legality of directions issued under bail jurisdiction.

Para 3.

---

4. Supreme Court’s Final Finding

The Court held:

• High Court exceeded jurisdiction,
• directions were unsustainable,
• statutory bail power was improperly expanded.

However:
existing executive measures were permitted to continue independently.

Paras 7-9.

---

RATIO DECIDENDI

While exercising statutory bail jurisdiction under Section 483 BNSS, 2023, the High Court or Sessions Court cannot issue broad administrative, executive or systemic directions concerning criminal justice administration unrelated to adjudication of bail. Constitutional status of the High Court does not enlarge the scope of statutory jurisdiction, and constitutional powers cannot be invoked to override or expand statutory limits while exercising powers derived solely from statute.

---

Final Holding

The impugned directions issued by the Allahabad High Court in bail proceedings were set aside as suffering from jurisdictional error. However, administrative measures independently evolved by State authorities were permitted to continue subject to law. Bail granted earlier by interim order was confirmed. Appeal allowed.