The Lawyer's Digest: Supreme Court Judgments passed in May 2021

The Lawyer's Digest is a collection of concise summaries of all the judgments passed by the Supreme Court of India over the course of a month.
The Lawyer's Digest: Supreme Court Judgments passed in May 2021
Supreme Court Lawyers Digest

The Lawyer's Digest is a collection of concise summaries of all the judgments passed by the Supreme Court of India over the course of a month.

Topics have been sub-divided into areas of law including arbitration, criminal law, consumer law, service and administrative law, etc. for ease of reading.

Here are the summaries of judgments passed in May 2021.

Criminal Law

In Sunil Kumar @ Sudhir Kumar & Anr. V. The State of Uttar Pradesh, the Court held that where an order of the Court does not provide that multiple sentences must run concurrently, then the sentences would run one after the other in such order as the Court may direct. The Court also held that orders passed by the Supreme Court for striking a just balance in the matter of sentencing after reversing acquittal cannot be applied to cases where the conviction recorded was not challenged. However, as there was no adverse record on the conduct of the convicts during imprisonment and as they had continuously served over 13 years in prison, the Court reduced the maximum period of imprisonment to 14 years. [Key Words: Question of Sentence, Sections 363, 366, and 376(1) IPC, Section 31 CrPC, single transaction, maximum imprisonment, Art 142 of the Constitution][Coram: Dinesh Maheshwari, J., Aniruddha Bose, J.]

In Achhar Singh v. State of Himachal Pradesh and connected appeal the appellants’ acquittal by the Additional Sessions Judge, Mandi was set aside by the High Court of Himachal Pradesh, and the two accused were convicted of offences under sections 302, 323, 326 and 452 of the Indian Penal Code, 1860, and were sentenced to imprisonment for five years and for life respectively. The question before the Supreme Court was whether the High Court while exercising its powers under section 378 of the Code of Criminal Procedure, 1973 (“CrPC”) was justified in interfering with the acquittal by the trial Court? The Court reiterated that a characteristic feature of the Common Law criminal jurisprudence is the presumption of innocence of an accused until such person is proved to be guilty by a competent Court. When a Trial Court has analysed material evidence, examined witnesses, and subsequently acquitted the accused, appellate Courts have evolved a self-restraint policy, such that when there are two reasonable and possible views, the one favourable to the accused is adopted, and the appellate Courts should refrain from interfering unless perversity is detected in the decision-making process. However, under Section 378 of the CrPC, the appeal against acquittal is not limited to determining whether or not the trial Court’s view was impossible, and the High Court is not barred from re-appreciating evidence. In the instant case, the Supreme Court held that the fact that the second accused executed an axe blow on the deceased old woman’s head knowing that an axe blow on an old woman’s vital body part would in all probability cause her death, justified his conviction for the offence under Section 302, IPC. Further, as for the first accused, the Supreme Court agreed with the view of the High Court and held that considering all the witnesses were consistent about the accused’s attack with an axe, his conviction under Sections 326 and 323 IPC deserved to be upheld. The contention that there were many people inside the small room at the time of the occurrence, and chaos was created on account of that, was rejected, holding that the eye witnesses had seen the fatal blow to the deceased and consistently deposed that the first accused had caused such blow. The fact that the witnesses’ testimony was exaggerated would unambiguously suggest that there were elements and ingredients of truth, and the reason that such statements were exaggerated could not by itself lead to the conclusion that they were false. Reliance was placed on Gangadhar Behera v. State of Orissa, (2002) 8 SCC 381, to hold that where a major portion of the evidence is found deficient, if the residue is sufficient to prove the guilt of the accused, a conviction can be based on it. It is only when the Court fails to reach a firm conclusion, despite its best efforts that the benefit of doubt is extended. In the instant case, there is no reason why the complainants would falsely implicate the appellants, whilst allowing the real culprits to go unpunished. On examination of the material on record, the Court concluded that the acquittal by the Trial Court was erroneous, and the appeals were dismissed. [Key Words: Criminal appeal, CrPC Section 378, onus on Prosecution, exaggeration of witness testimony, exaggeration vis a vis falsity ][Coram: N.V. Ramana, CJI, Surya Kant, Aniruddha Bose JJ.]

In Mallappa v. State of Karnataka the appellant and his son were tried for the murder of the appellant’s brother. The Trial Court acquitted both the accused from the charges under Section 302 read with Section 34 of the Indian Penal Code (“IPC”). In appeal before the High Court, the appellant’s acquittal was set aside and he was convicted of the offence under Section 302, IPC and sentenced to life imprisonment. The appellant approached the Supreme Court in appeal. The Supreme Court held that the High Court had erred by accepting the testimony of the widow of the deceased as there were glaring contradictions as regards her having seen the appellant at the spot of the occurrence. The Court held that certain contradictions, which would not have any material impact on the case, however the contradictory statements as regards when and where the witness saw the appellant and as to whether she saw him committing the act of assault was of significance, and the High Court having dismissed the finding of fact of the Trial Court, which was based on evidence, as being not of importance and irrelevant was incorrect. Further, the deposition by the other witnesses was silent regarding the recovery of a broken wooden club from the spot, and the seizure of a wooden club from the home of the accused could not demonstrate that the club seized was the one used to assault the deceased, as wooden clubs are common implements to be found in rural households. The Court held that the prosecution failed to establish commission of the offence by the appellant by circumstantial evidence of recovery of the weapon. Having so held, the appeal was allowed. [Key Words: criminal appeal, contradictory testimony, burden of proof, circumstantial evidence, discovery of weapon][Coram: N.V. Ramana, CJI, Surya Kant, Aniruddha Bose JJ.]

In Sanjay Kumar Rai v. State of Uttar Pradesh & Anr the High Court of Allahabad had turned down a criminal revision against the order of the Chief Judicial Magistrate, which in turn had refused to discharge the appellant against the charges framed under Sections 504 and 506 of the Indian Penal Code, 1860. The respondent no. 2/complainant, who claimed to be a newspaper correspondent, had conducted a journalistic investigation for malpractices against a gas agency and had also applied for information under the Right to Information Act 2005, so as to investigate the alleged black marketing of gas cylinders by the said agency. The appellant was a partner in the said gas agency. The appellant had allegedly threatened to kill respondent no.2. The respondent no. 2 filed an application before the concerned Chief Judicial Magistrate (“CJM”) under Section 155(2) CrPC for conducting investigation. The Court accordingly directed investigation and ordered the local police to submit its report. During the course of the investigation, the statement of the complainant was recorded. The Supreme Court was of the view that there was material change in the statement of respondent no. 2-complainant as he had for the first time introduced two witnesses. The Court further noted that even though a charge sheet came to be filed based on the statement of the complainant and affidavit of the two witnesses, the Investigating Officer did not record or consider the appellant’s version. Upon the Trial Court rejecting the appellants discharge application filed under section 279 CrPC, the appellant approached the High Court through a Criminal Revision Petition. The High Court whilst relying on Asian Resurfacing of Road Agency Pvt. Ltd. v. Central Bureau of Investigation, (2018) 16 SCC 299 observed that interference in the order framing charges or refusing to discharge is called for in rarest of rare case only to correct a patent error of jurisdiction and as no such jurisdictional error was apparent in the CJM’s order the Criminal Revision Petition was dismissed. The appellant approached the Supreme Court by Special Leave. The Supreme Court opined that the High Court under­appreciated the judgment in Asian Resurfacing (supra), as the said case dealt with a challenge to the charges framed under the Prevention of Corruption Act, 1988 (“POCA”) and the judgment itself laid down that not only is POCA a special legislation, but it also contains a specific bar under Section 19 against routine exercise of revisional jurisdiction. Furthermore, Asian Resurfacing (supra) relied on the principle laid down in Madhu Limaye v. State of Maharashtra, (1977) 4 SCC 551, which had laid down that that orders framing charges or refusing discharge are neither interlocutory nor final in nature and are therefore not affected by the bar of Section 397 (2) CrPC. In any event the High Court has inherent jurisdiction to prevent abuse of process or to secure ends of justice having regard to the facts and circumstance of individual cases. While considering a discharge application the Court has to sift through the evidence in order to find out whether there are sufficient grounds to try the accused. The court has to consider the broad probabilities, total effect of evidence and documents produced and the basic infirmities appearing in the case. The Supreme Court concluded that by not entertaining the revision petition on merits, the High Court committed jurisdictional error by not analysing the case and overlooking the fact that ‘discharge’ is a valuable right provided to the accused. The impugned order was, accordingly, set aside and the case was remanded to the High Court for its reconsideration of the revision petition afresh. [Key Words: Criminal appeal, CrPC Ss 279, 293, Discharge of accused][Coram: N.V. Ramana, CJI, Surya Kant, Aniruddha Bose JJ.]

In Jayamma & Anr. v. State of Karnataka and connected appeal was preferred against the judgment of the High Court of Karnataka, by which judgment the findings of the trial Court were reversed, the appellants’ acquittal was set aside and they were convicted for the offence punishable under Section 302 read with Section 34 of the Indian Penal Code, 1860 (“IPC”) and consequently sentenced to life imprisonment. The appellants had a long standing family dispute with the deceased. After a series of altercations, the appellants had allegedly gone to the deceased’s residence, doused her in kerosene and set her on fire. In the hospital, the deceased gave her statement to the police on the basis of which the crime was registered. However, subsequently, the deceased succumbed to her injuries. During the trial, several prosecution witnesses turned hostile, and the only material witnesses who supported the prosecution case was the policeman who recorded the deceased’s statement and the doctor who provided primary treatment to the deceased. The sole material on record before the trial Court to connect the accused with the offense was the deceased’s statement which was being treated as a dying declaration. However, the trial Court was of the opinion that upon considering the mitigating circumstances such as testimonies of the hostile witnesses, nature of burn injuries of the victim, and the lack of any corroborative evidence the prosecution had failed to prove the genuineness of the dying declaration beyond all reasonable doubt. In appeal, the High Court reversed the findings of the trial Court and held that the dying declaration was sufficiently proved. The accused were convicted and sentenced to life imprisonment. Before the Supreme Court, it was contended that while interfering with an order of acquittal section 378 CrPC, the High Court was required to scrutinize the evidence on record to return a specific finding as to why it was impossible to sustain the order of the trial Court or why it deserved interference, and in the instant case neither did the High Court evaluate the entire evidence nor did it deal with the findings of the trial Court. Further, it was submitted that in the facts and circumstances of the present case, the purported dying declaration could form the sole basis to convict the appellants, as the circumstances in which it was made were doubtful. The Supreme Court analysed several precedents regarding the evidentiary value of a dying declaration and the sustenance of conviction solely based thereupon, including Sham Shankar Kankaria v. State of Maharashtra, (2006) 13 SCC 165, in which the Supreme Court had reiterated specific principles regarding the evidentiary value of dying declarations. The Court noted that section 32 of the Indian Evidence Act, 1872 was an exception to the general rule against the admissibility of hearsay evidence, and clause (1) thereof made the statement of the deceased admissible. Reference was also made to Surinder Kumar v. State of Haryana, (2011) 10 SCC 173, in which it was held that there was neither a rule of law nor of prudence that the dying declaration could be acted upon without corroboration, however the Court must be satisfied that the dying declaration is true and voluntary, and only then could it be the sole basis for conviction without corroboration. The Court thereafter concluded that in the instant case the dying declaration of the deceased was not sufficient to convict the appellants, inter alia, because: (i) it was so accurate that even a witness in the normal state of mind would not have deposed with such precision, which indicated the dominance of the police officer who recorded the same; (ii) the deceased was illiterate and it was improbable that she would have been able to detail the event so precisely; (iii) there was sufficient material on record to show that the deceased had been administered highly sedative painkillers and the possibility of her being in a state of delusion and hallucination could not be completely ruled out, as the treating doctor made the endorsement that the victim was in a fit state of mind to make the statement ‘after’ the statement was recorded and not ‘before’ thereto which was the normal practice, and also that no Judicial or Executive Magistrate had been called to record such statement. The Court noted that not motive appeared for the accused to have committed such a crime and the deposition of the witnesses, who were the son and daughter-in-law of the deceased, that she had committed suicide, belied the prosecution case. On the basis of the above, the Court allowed the appeals and set aside the High Court order, consequently acquitting the appellants. [Key Words: criminal appeal, dying declaration, fitness or capacity of deceased to make declaration, hostile witnesses, acquittal, CrPC][Coram: N.V. Ramana, CJI, Surya Kant, Aniruddha Bose JJ.]

In Rajkumar Sabu v. M/s Sabu Trade Private Limited, proceedings had been initiated by the respondent company before the Judicial Magistrate, Salem under Section 156(3) of the Code of Criminal Procedure, 1973 alleging the petitioner’s illegal and unauthorised use of a trademark, over which the respondent claimed proprietary right. The Magistrate had directed a police enquiry to be conducted, and on the basis of the report which was subsequently filed, a criminal complaint was registered for alleged offences under section 420 of the Indian Penal Code, 1860 and section 103 of the Trade Marks Act, 1999 against the petitioner and another accused. The petitioner filed a Transfer Petition before the Supreme Court seeking transfer of the case to the Court of the Chief Judicial Magistrate, Patiala House Court, New Delhi. As the transfer petition had been filed only by one of the accused, the other accused individual filed an Intervention Application on the same grounds as the petitioner, which application was allowed by the Supreme Court. The Court noted that several proceedings had been instituted over the question of the said trademark, which litigations bore the features of a family dispute, as the two accused and the Managing Director of the respondent company were all brothers. The Court further noted that several transfer petitions had been filed by the parties earlier, and such matters had been transferred to the Delhi High Court. In the present matter, the petitioner submitted that the criminal proceedings at Salem should be conducted in New Delhi; (i) owing to the civil suits being heard in the Delhi High Court, (ii) because the proceedings in Salem were being conducted in Tamil, which the petitioner did not understand, and (iii) that as the petitioner resided in Indore, which was over 2000km from Salem, it would be more convenient. The Supreme Court held that solely because the suits being heard by the Delhi High Court would have points which could overlap with those involved in the criminal case pending in the Salem Court would not, by itself, justify transfer of the said case. Furthermore, substantial progress had been made in the complaint before the Salem Court, including the examination-in-chief of the prosecution witnesses, and the petitioner had been unable to substantiate that the trial would be influenced by the respondent. As regards the petitioner’s contention that language was a barrier, the Court opined that if a Court possesses the jurisdiction to hear a case, it would not warrant exercise of jurisdiction of the Supreme Court under Section 406 solely based on the fact that one of the parties was unable to follow the language of that Court. After referring to several precedents pertaining to transfer of cases under section 406, the Court dismissed the transfer application whilst holding that convenience of one of the parties cannot be a ground for allowing the same. [Key Words: criminal transfer petition, CrPC, Grounds for transfer of proceedings – convenience of parties insufficient][Coram: Aniruddha Bose, JJ.]

In Guru Dutt Pathak v. State of Uttar Pradesh, the Court upheld the judgment of the High Court wherein the latter had reversed the finding of acquittal under Section 378 CrPC. The Bench held that the High Court had rightly observed that when there was direct evidence in the form of eyewitnesses and the eyewitnesses were trustworthy and reliable, absence of motive was insignificant. The Bench further held that the High Court had rightly observed that when there was clinching evidence of eyewitnesses, mere non-examination of some of the witnesses/independent witnesses and/or in absence of examination of any independent witnesses would not be fatal to the case of the prosecution. [Key Words: appeal in case of acquittal] [Coram: DY Chandrachud, J., MB Shah, J.]

In Gurmeet Singh v. State of Punjab, the challenge was to the judgment passed by the High Court of Punjab and Haryana wherein the High Court had dismissed the appeal and upheld the order of the Trial Court convicting the Appellant under Section 304-B, IPC and sentencing him to undergo rigorous imprisonment for seven years with fine. It was argued, inter alia, by the appellant that the presumption u/Section 113B of the Evidence Act, 1872 was applied by the lower courts as a matter of routine since the death of the deceased had occurred within 7 years of marriage and it was further argued that a conviction under Section 304 B of the IPC cannot be sustained without a corresponding charge under Section 498A IPC. Dismissing the appeal, the Court held that the necessary ingredients of Section 304 B, IPC had been proved by the prosecution and that the Appellant failed to discharge the burden under Section 113-B since no material was brought on record to call for the interference of the Court. It was further held by the Court that offences under Section 498-A and Section 304-B, IPC are distinct in nature which are required to be proved separately and need not be alleged together. [Key Words: Sections 304 B and 498 A Indian Penal Code 1860, Section 113-B Evidence Act 1872, death within 7 years of marriage, burden of proof, conviction] [Coram: N.V Ramana, CJI., Surya Kant, J., Aniruddha Bose, J.]

In Nathu Singh v. State of UP and Ompal Singh v. State of UP, the order passed by the Allahabad High Court dismissing the anticipatory bail application of the Accused but granting them 90 days’ to surrender before the Trial Court to seek regular bail and protection from coercive action for the same period, was challenged. It was argued by the State that once the High Court had declined the final relief of prearrest bail to the Accused, it could not grant them any further protection. It was held by the Court that the proviso to Section 438(1), CrPC. does not act as a bar to the grant of additional protection to the Accused and the power to grant such additional protection flows from Section 482, CrPC. However, the Court also cautioned that such discretionary power must be reasoned and take into consideration the concerns of the investigating agency, complainant, and the society at large. Thus, the Court held that the impugned order did not meet such standards and that a period of 90 days could not be a reasonable period in the present facts and circumstances. [Key Words: Sections 438 and 482 CrPC, pre-arrest bail, protection from arrest for 90 days’ after rejection of anticipatory bail application] [Coram: N.V Ramana, CJI., Surya Kant, J., Aniruddha Bose, J.]

In Satbir Singh v. State of Haryana, the challenge was to the judgment passed by the High Court of Punjab and Haryana whereby the High Court had dismissed the appeals filed by the appellants and upheld the order of conviction and sentence passed by the Trial Court under Sections 304B and 306, IPC. The Court upheld the conviction of the accused under Section 304 B, but however set aside the conviction under Section 306, IPC since there was insufficient evidence to prove the fact of suicide without reasonable doubt by the prosecution and thus the presumption under Section 113A, Evidence Act 1872 could not be attracted. [Key Words: Sections 304 B and 306 IPC, acquittal of Accused under Section 306 IPC, presumption under Section 113A Evidence Act 1872] [Coram: N.V Ramana, CJI., Aniruddha Bose, J.]

In Gautam Navlakha v. National Investigation Agency, the immediate issue on facts was whether the period of 34 days spent in house arrest by the Appellant is to be counted towards the period of 90 days under Section 167 CrPC. It was held as follows:

  1. While the remand report is considered by the Magistrate, the application for bail may be moved under Section 439, CrPC instead of moving under Section 437 in view of the restrictions contained therein.

  2. Though an application under Section 397, CrPC would not lie against the remand, an application for bail would lie under Section 439, CrPC.

  3. If the remand is absolutely illegal or passed without jurisdiction, or in a mechanical manner, the person affected can seek the remedy of Habeas Corpus. Barring such situations, a Habeas Corpus Petition will not lie.

  4. While ordinarily, the Magistrate is the original court which would exercise the power to remand under Section 167, CrPC, the exercise of such power by the superior courts would indeed be custody for the purposes of calculating the period within which charge sheet must be filed, failing which the accused acquires the statutory right to default bail.

  5. The remand order, be it a transit remand order, is one which is passed under Section 167, CrPC and though it may be for the production of the appellant, it involved authorizing continued detention within the meaning of Section 167.

  6. If the Court purports to invoke and act under Section 167, the detention will qualify even if there is illegality in the passing of the order.

  7. The house arrest in the present case with complete prohibition on stepping out of the appellant and the injunction against interacting with persons other than ordinary residents, and the standing of the guard to enforce the said conditions, would be judicial custody, but not having been passed under Section 167.

[Key Words : House Arrest, preventive detention, police custody, judicial custody, personal liberty, default bail, fundamental right, remand, transit bail, procedure established by law, Article 21] [Coram : U.U. Lalit, J., K.M. Joseph, J.]

IBC

In India Resurgence Arc Private Limited v. M/s Amit Metaliks Limited & Anr, the Court held that review of the decision of the Committee of Creditors to approve a resolution plan is limited by Section 30(2), IBC for the adjudicating authority and Section 30(2) read with Section 61(3) for the Appellate Authority. Once all mandatory requirements had been complied with, judicial review could not be stretched to carry out quantitative analysis qua a particular creditor or stakeholder. [Key Words: IBC, NCLAT, approval of resolution plan, corporate insolvency, Section 30 IBC, Commercial Wisdom of Committee of Creditors][Coram: Vineet Saran, J., Dinesh Maheshwari, J.]

In Lalit Kumar Jain v. Union of India & Ors., the Court held that due to the non obstante clause in Section 238, IBC any proceedings initiated against personal guarantors would be adjudicated by the NCLT. The Court also held that parliamentary intent was to treat personal guarantors differently from other categories of individuals. Merely because the process of insolvency in Part III, IBC was applied to individuals whereas the process for corporate debtors was set out in Part II does not lead to an incongruity. Thus, the Court held that there was no compulsion that the IBC should at the same time be made applicable to all individuals and thus the impugned notification (Notification dated 15.11.2019 ) was not an instance of legislative exercise. Further, the sanction of a resolution plan and finality imparted to it by Section 31 does not per se discharge the guarantor’s liability. However, an involuntary act of the principal debtor leading to loss of security would not absolve a guarantor of liability. [Key Words: IBC, Art 32 of the Constitution of India, Liability of Guarantor][Coram: L Nageswara Rao, J., S Ravindra Bhat, J.]

Labour Law

In Uttar Pradesh Power Transmission Corporation Ltd. & Anr. v. CG Power and Industrial Solutions Limited & Anr., on a preliminary issue, it was held that the existence of an arbitration clause does not debar the court from entertaining a writ petition. On merits, the matter concerned a demand raised by the Petitioner on account of Labour Cess, on the Respondent purportedly under Sections 3(1), 3(2) of the Building and Other Construction Workers’ Welfare Cess Act, 1996 (Cess Act) and Section 2(1)(d), (g) and (i) of the Building and Other Construction Workers (Regulation of Employment and Condition of Service) Act, 1996 (BOCW Act). It was held that the action of UPPTCL in forcibly extracting labour cess under the Cess Act from Respondent No. 1 in respect of the first contract, solely on the basis of a CAG report, is in excess of power conferred on UPPTCL by law or in terms of the contract. Cess was held to be applicable in respect of the third contract which covered all civil works, but not the other two contracts, which covered all works other than civil works. [Key Words : Building Worker, contractor, employer, Welfare Boards, levy of cess, civil works] [Coram : U.U. Lalit, J., Indira Banerjee, J.]

Constitutional Law

In Dr. Jaishri Laxmanrao Patil v. The Chief Minister & Ors., the Court held that if reservation goes above 50% limit which is reasonable, it will be a slippery slope and political pressure will make it hard to reduce it. The cap of 50% was arrived at on the principle of reasonability and achieves equality as enshrined by Article 14 of the Constitution, of which Articles 15 and 16 are facets. The Court also upheld Indra Sawhney and held that when the Court had laid down that reservation should not exceed 50% except in extra-ordinary circumstances, all authorities including the legislature and executive were bound by law. The Court did not find any extra-ordinary circumstances to extend reservation beyond 50% and thus struck down Maratha reservation. While the Court upheld the validity of the 102nd Constitutional Amendment, a majority of judges held that only the President could identify SEBCs and notify the list under Art 342A. [Key Words: Maratha Reservation Ordinance, Indra Sawhney, Reservation, socially economically backward communities][Coram: Ashok Bhushan, J., Abdul Nazeer, J., L. Nageswara Rao, J., Hemant Gupta, J., S. Ravindra Bhat, J.]

Real Estate

In Forum for People’s Collective Efforts (FPCE) & Anr. v. The State of West Bengal & Anr., the constitutional validity of the West Bengal Housing Industry Regulation Act (WBHIRA) was challenged on various grounds by filing a Petition under Article 32. After a detailed analysis of the provisions of Real Estate (Regulation and Development) Act, 2016 (RERA) on one hand, and of WBHIRA on the other, the Court found that there was a significant and overwhelmingly large part of WBHIRA which overlaps with the provisions of RERA. It held that the State Legislature had enacted a parallel regime as had been enacted by the Parliament under RERA. Accordingly, the Court held that WBHIRA is repugnant to RERA, and hence, unconstitutional. It further held that as a consequence of the declaration of invalidity of the provisions of WBHIRA, there shall be no revival of the provisions of the (older) WB 1993 Act, since it would stand impliedly repealed upon the enactment of RERA. However, in order to avoid uncertainty and disruption in respect of actions taken in the past, the Court resorted to Article 142 to declare that the striking down of the WB-HIRA will not affect the registrations, sanctions and permissions previously granted under the legislation prior to the date of this judgment. [Key Words : Presidential assent, repugnancy, constitutional validity, Article 142, Article 32, any other law for the time being in force, homebuyers] [Coram : D.Y. Chandrachud, J., M.R. Shah, J.]

Election Law

In The Chief Election Commissioner of India v. M.R Vijayabhaskar & Ors., the Commission approached the Supreme Court on grounds that the Division Bench hearing a matter in the Madras High Court orally observed the Election Commission was “the institution that is singularly responsible for the second wave of COVID-19” and further that the Commission should be “put up for murder charges”. The Commission inter alia prayed before the Supreme Court that the media be allowed to report only on contents forming the record of the court record and nothing else. The Bench noted that the role of superior courts was to ensure that it encouraged lower courts to freely exchange their views while not breaching judicial propriety. It held that oral observations were not binding precedents but merely aided a judge in soliciting responses and were, at best, tentative views, and that the way judicial proceedings were conducted was unique to each judge. Noting that there was no question of expunging oral remarks since they did not form part of the record, the Bench cautioned the judges to exercise “caution in off-the-cuff remarks in open court, which may be susceptible to misinterpretation”. On the facts before it, the Bench resolved the controversy by stating that the High Court, “if indeed it did make the oral observations which have been alluded to - did not seek to attribute culpability for the COVID-19 pandemic in the country to the EC. What instead it would have intended to do was to urge the EC to ensure stricter compliance of COVID-19 related protocols during elections.”[Key Words: open courts, Indian judiciary, media reporting, freedom and constraints of judicial conduct, right to information of citizens and the accountability of the judiciary to the nation, purpose of media in courtroom, Chief Justice Sanjib Banerjee, Covid, election, disparaging remarks, open court, public hearings, Madrid Principles on the Relationship between the Media and Judicial Independence, evolving technology, Technology and Open Court, Public Discourse, Media Reporting and Judicial Accountability, Lokmanya Tilak, livestreaming of court proceedings, judicial restraint][Coram: DY Chandrachud, J., MR Shah, J.]

Contract Law

In Mangala Waman Karandikar (D) Tr. LRs. v. Prakash Damodar Ranade by the impugned judgment the Bombay High Court had allowed the respondent’s second appeal and had set aside the decree in favour of the appellant. The parties had entered into a contract whereby the respondent was to carry out the business of running a stationary shop belonging to the appellant. The said contract was extended from time to time. Eventually, the appellant sought to take back the business and gave the respondent notice to vacate the shop. At that stage, the respondent took that stance that the contract was a rent agreement, owing to which the appellant filed a civil suit before the Court of Joint Civil Judge, Junior Division, Pune. The Trial Court had held that the respondent had only taken over the running business from the appellant and had not taken the suit premises on lease or license basis. The appeal preferred by the respondent before the Additional District Judge was dismissed. The High Court allowed the Second Appeal holding that the respondent had entered into a license agreement which was covered under Section 15A of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (“Act”), and further that the Trial Court did not have jurisdiction to try the cases under the Act as the appropriate Court should have been the Small Causes Court established under the Provincial Small Causes Court Act, 1887. Upon a reading of the contract, the Supreme Court held that it was clear that the parties had intended to transfer only the business from the appellant to the respondent during the contractual period and the agreement was not meant to be a lease or license. The Court further held that the High Court had erred in taking into account extrinsic evidence in terms of the provisions of Section 95 of the Evidence Act, as that would render the provisions of Section 92 otiose. As the contract in the present instance was straightforward and the license was created for continuation of existing business, rather than license or lease of the shop premises, the Court held that the matter would not fall within the ambit of the Act, and accordingly allowed the appeal by setting aside the impugned order of the High Court and restoring the trial court decree. [Key Words: Contractual interpretation, Business Transfer, Indian Evidence Act – Sections 92 and 95, extrinsic evidence][Coram: N.V. Ramana, CJI, Surya Kant, Aniruddha Bose JJ.]

In Bangalore Electricity Supply Company Limited (BESCOM) v. E.S. Solar Power Pvt. Ltd. & Ors., the respondents were Special Purpose Vehicles which were awarded development of solar power plants. The parties entered into Power Purchase Agreements (PPAs) on 31.03.2016, which were approved by the Karnataka Electricity Regulatory Commission (KERC) on 17.10.2016, which was to be the “Effective Date” under the PPAs. The respondents were obligated to commission the power plants within 12 months from the Effective Date, failing which they would be liable to pay liquidated damages. Subsequently, it was undisputed that power was injected into the Grid from the solar plants on 17.10.2017. However, the appellant no. 1 took a decision to reduce the tariff payable to the respondents and also imposed damages for delay in commissioning the power plants, which was challenged by the respondents by filing Original Petitions before the KERC, which were dismissed. The Appellate Tribunal allowed the respondents’ appeals holding that even if the commencement of the Solar Plants was taken as 17.10.2017 the Scheduled Commissioning Date (SCOD) was within the time limit prescribed under the PPAs. The question before the Supreme Court was whether the respondents commissioned the solar projects before the expiry of 12 months from the date of approval of the PPAs by KERC. The appellants contended that the SCOD was 17.10.2017 and the respondents contend that it was 16.10.2017. The other issue that fell for consideration was whether injection of power into the Grid was a pre-requisite for deciding the Date of Commissioning of the Projects and whether the ‘Commercial Operation Date’ and ‘Commissioning Date’ were the same. Whilst undertaking the exercise of interpretation of the agreement, the Supreme Court reiterated the broad principles of interpretation of contracts and held that while construing a clause in a contract the exercise to be undertaken is to determine what the words used mean and the intention of the parties must be understood from the language used, considered in the light of the surrounding circumstances and object of the contract. The Court held that the KERC had erred by wrongly relying upon the definition of “month” in the PPAs, as the said definition excluded the “date of the event” (i.e. 16.10.2016). Accordingly the SCOD was held to be 17.10.2017. As there was no dispute that the power was injected into the Grid from the solar plants on 17.10.2017 the Court opined that it was not necessary to adjudicate the other issue, and accordingly dismissed the appeals. [Key Words: Electricity, Scheduled Commissioning Date, Contractual Obligation, interpretation of contracts][Coram: L. Nageswara Rao & Vineet Saran, JJ.]

Education

In Indian School, Jodhpur & Anr. v. State of Rajasthan & Ors, and connected appeals, two sets of appeals were disposed of by a common judgment. The first set of appeals was filed by Managements of private unaided schools in Rajasthan against several judgments and orders of the High Court of Rajasthan assailing the validity of the Rajasthan Schools (Regulation of Fee) Act, 2016 (“Act”) and the Rules framed thereunder, as being ultra vires and abridging the fundamental right guaranteed under Article 19(1)(g) of the Constitution. The second set of appeals was also filed by the Managements of private unaided schools in the State of Rajasthan challenging the orders passed by the State Authorities regarding deferment of collection of school fees and the reduction of fees owing to the reduction in syllabus by the respective education Boards in view of the Covid-19 pandemic. As regards the first set of appeals, the Supreme Court held that it agreed with the High Court’s conclusion that the fundamental right under Article 19(1)(g) was not absolute, and was subject to reasonable restrictions, and the petitioners challenge was to be dismissed, however as the High Court had done so in a summary manner, without analysing each contention raised against each statutory provision. The Court undertook such exercise, instead of remitting the parties to the High Court, and observed that several previous decisions of the Court had held that school managements of private unaided schools are free to devise their own fee structures, which can be regulated by the Government in the interests of the general public in order to prevent profiteering and/or charging of capitation fees. After extensively referring to the Constitution Bench decision in Modern Dental College and Research Centre & Ors. v. State of Madhya Pradesh & Ors. and the statutory provisions which were assailed, the Court held that qua the first set of appeals, the appellants had failed to substantiate the challenge to the validity of the relevant provisions of the Act. As regards the second set of appeals challenging the deferment of collection and reduction of fees charged by private unaided schools in the wake of the Covid-19 pandemic, the Court held that the impugned order passed by the State Authorities was done so without the necessary powers being vested in the State and Article 162 of the Constitution would not come to the State Government’s aid, as the impugned order was in direct contravention of various statutory provisions. The Court further held that it was not open to the State Government to issue directions in respect of commercial or economic aspects of contracts between two private parties with which the State has no causal connection. The Court further held that the provisions of the Disaster Management Act, 2005 would also not assist the State Government’s argument to uphold the impugned order, as the State could not arrogate power to issue directions to private parties pertaining to contractual matters. However, the Court observed that the Management of schools which is meant to be doing charitable activity of imparting education is expected to take remedial measure to mitigate the hardships of students and their parents. Accordingly, the Court said that it could be assumed that the schools had saved at least 15% of their operating costs on account of the closure. The Court disposed of the appeals by issuing directions, as a one-time measure, to do complete justice between the parties inter alia directing that the fees for the academic year 2020-21 shall be reduced by 15% and payable in installments. [Key Words: Education, Rajasthan Schools Regulation of Fee Act 2016, Constitutional Validity, Fundamental Rights, Art 19(1)(g) Constitution, Disaster Management Act 2005, Res Extra Commercium][Coram: A.M. Khanwilkar & Dinesh Maheshwari, JJ.]

Motor Vehicles

In Rahul Sharma & Anr. v. National Insurance Co. Ltd. & Ors. the appellants’ parents were travelling in a vehicle that met with an accident and the appellant’s parents succumbed to their injuries. At the time of the accident, the vehicle was insured by the respondent no. 1. The appellants made two separate claims before the Motor Accidents Claims Tribunal (“Tribunal”) under sections 166 and 140 of the Motor Vehicles Act, 1988 praying for compensation for the death of each parent, which claims resulted in common award dated 07.06.2016. While adjudicating the claim pertaining to the appellants’ mother, the Tribunal determined the compensation to be Rs. 41,55,235/-, which included a 50% addition towards future prospects, based on the dictum laid down in Sarla Verma v. Delhi Transport Corporation, (2009)6 SCC 121. In appeal by respondent no. 1 before the Delhi High Court, the total compensation payable towards the appellants’ mother was reduced to Rs. 21,66,000/-. The High Court held that the appellants’ mother was ineligible for the grant of future prospects, as she was self-employed, and further held that 50% of income was to be deducted towards personal and living expenses. The appellants’, aggrieved by the order of the High Court, approached the Supreme Court by Special Leave, impugning the modified compensation. The Supreme Court referred to the Constitution Bench decision in National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680 and reiterated that in case the deceased was self-employed, and below the age of 40, 40% addition would be made to their income as future prospects. In the instant case, the appellants’ mother was 37, and therefore 40% future prospects ought to have been awarded. Further, it was held that based on the aforestated precedents, deduction towards personal and living expenses for a person who was married with two dependents was to be 1/3rd and the High Court had erred by deducting 50%. In disposing of the appeal, the Supreme Court held that the total compensation payable was Rs. 38,24,890/- with interest of 9% payable per annum from the date of filing of the claim. [Key Words: motor accident death, MV Act 1988, Compensation, future prospects][Coram: N.V. Ramana, CJI, Surya Kant, Aniruddha Bose JJ.]

COVID-19

In Re: Distribution of Essential Supplies and Services During Pandemic the Supreme Court took suo motu cognizance of the management of the COVID-19 pandemic during the second wave. The Court heard the Union of India, the States/Union Territories, the Amici Curiae appointed by the Court, and some of the intervenors in the matter. The Court referred to its detailed order passed on 30.04.2021 in relation, inter alia, to the vaccination policy, supply of essential drugs, supply of medical oxygen, medical infrastructure, augmentation of healthcare workforce and the issues faced by them, and issues of freedom of speech and expression during the COVID19 pandemic. The Court noted that its observations and directions were in consonance with a “bounded-deliberative approach” and the UoI had been directed to re-consider its policies on the above issues, taking into account the Supreme Court’s observations. The Court further noted that subsequent to the order dated 30.04.2021, a Special Leave Petition had been heard by a two judge Bench against an order of the High Court of Delhi in relation to the supply of medical oxygen to the National Capital Territory of Delhi (“NCTD”). However, during the course of the proceedings in that matter, through its order dated 06.05.2021 the Bench had also constituted a National Task Force to provide a public heath response to the COVID-19 pandemic on the basis of a scientific approach. The terms of reference of the National Task Force included, inter alia, assessing and making recommendations for the need, availability and distribution of medical oxygen; devising a methodology for allocation of medical oxygen and periodical review of the allocation based on the stage of the pandemic; providing recommendations for augmenting the supplies of oxygen; facilitating audits in each State/UT to determine whether oxygen supplies had reached its destination; efficacy, transparency and efficiency of the distribution networks within the State/UT; providing recommendations for ensuring availability of essential drugs, augmentation of medical and paramedical staff, management of the pandemic and treatment of cases. The Court opined that the second wave of the COVID-19 pandemic had started receding across the nation and the situation appeared to have become more manageable, owing to which some of the issues discussed in the previous orders could await further deliberation. It was, however, expressly stated that the issue of vaccination was absolutely crucial, as globally health experts agreed that vaccination of the nation’s entire eligible population was the most important task in effectively combating the COVID-19 pandemic in the long run. Accordingly, the Court noted that it limited itself to hearing submissions on the UoI’s vaccination policy and roadmap for the future. However, the Court also abundant clarified that all of the issues contained in the Court’s previous orders would still retain their overall importance, and the Court would continue to monitor them alongside the National Task Force and intervene whenever necessary. Before, the Court, it was submitted that the vaccination drive would be completed by the end of December 2021, and the Central Government was in active talks with foreign vaccine manufacturers at the highest political and diplomatic levels, to ensure the adequate supply of vaccines. It was also submitted that it was incorrect to state that consequent to the UoI’s updated policy on vaccination of the 18-44 age group, that there will be competition amongst the States/UTs. Lastly, it was averred that everyone above the age of 45 years could continue to get vaccinated facilities through on-site registration, without having to book a prior appointment through the CoWIN platform. Several submissions were also made by the Amici including, inter alia, that foreign vaccine manufacturers were generally not receptive to dialogue with State/UT Governments since they only deal with federal governments of different nations with respect to the procurement of vaccines; the Universal Immunization Programme of the UoI had been replaced by the Liberalized Pricing and Accelerated National COVID-19 Vaccination Strategy whereby State/UT Governments or private hospitals are required to procure vaccines for persons between the ages of 18-44 years from private manufacturers on the basis of a pro rata quota set by the UoI, which had led to a situation where State/UT Governments had to fend for themselves, rather than the Central Government acting on behalf of the entire nation. Consequently, vaccine manufacturers were free to implement differential procurement prices for the UoI for vaccinating persons above 45 years of age, and for the State/UT Governments and private hospitals for vaccinating the persons between 18-44 years of age; the Liberalized Vaccination Policy was introduced to spur competitive prices, however multiple States/UTs were competing to purchase scarce vaccines from a few manufacturers leading to the manufacturers taking advantage of creating monopolies and selling at prices that they desire to private healthcare institutions. The State/UT Governments do not enjoy the unique position of the UoI, which has the advantage of negotiating appropriate prices for the vaccines on behalf of the entire population of India and this was placing a burden on those between 18-44 years, specifically those from poor socio-economic backgrounds, who have to purchase two doses of vaccines. Other submissions were made with regard to the role of State/UT Governments in vaccine procurement such as, inter alia, the contention that though public health is a subject under Entry 6 of List II (State List) of the Seventh Schedule to the Constitution, inter-State migration and inter-State quarantine was covered by Entry 81 of List I (Union List) and the prevention of extension from one State to another of infectious or contagious diseases was dealt with by Entry 29 of List III (Concurrent List) and, therefore, the management of the pandemic, control of the spread of COVID-19, vaccination policy and pricing, were the responsibility of the Central Government, which was to work in tandem with the State/UT Governments. In that light, the Liberalized Vaccination Policy, put the burden of vaccination of those between 18-44 years on the State/UT Governments, and conflicted with the constitutional balance of responsibilities between the Centre and States/UTs. The Court noted that between Phases 1 and 3 of the National Vaccination policy various steps had been taken to ameliorate the procurement process and utilization of vaccines. However, it noted that steps taken by various States/UTs were not uniform and were continent on varying factors. The Court also dealt with the overlap of roles between the executive and the judiciary and the Doctrine of Separation of Powers, and referred to decisions of the Supreme Court of the United States, to reiterate the expertise of the executive in managing a public health crisis, but also warned against arbitrary and irrational policies being excused in the garb of the “wide latitude” to the executive that is necessitated to battle the pandemic. Referring to Gujarat Mazdoor Sabha v. State of Gujarat, AIR 2020 SC 4601, whilst in the context of labour rights, the Court noted that policies to counteract the pandemic must be evaluated from a threshold of proportionality to determine if they have a rational connection with the object that is sought to be achieved and are necessary to achieve such objects. The Court then undertook a detailed analysis of various issued being faced with the Liberalised Vaccination Policy, i.e. procurement and distribution, role of private hospitals, the basis and impact of differential pricing, logistical concerns, and the digital divide amongst the population in availing of the services of the CoWIN platform, and provided various clarifications in regard to such issues. In conclusion, after making its suggestions based on the analysis undertaken, the Court directed the UoI to furnish details and data pertaining to the first 3 phases of the vaccination drive and an outline for how and when the Central Government seeks to vaccinate the remaining population in phases 1, 2 and 3. Further, since the UoI’s had stated in its affidavit dated 09.05.2021 that every State/UT Government shall provide vaccination free of cost to its population and since various State/UT Governments had taken altering stances, each of the State/UT Governments was directed to file an affidavit clarifying their position and placing on record their individual policies. [Key Words: Coronavirus, pandemic, vaccination policy of Union Government, procurement and distribution of vaccines, differential pricing][Coram: Dr Dhananjaya Y Chandrachud, L Nageswara Rao, S Ravindra Bhat JJ.]

About the authors: Subhro Prokas Mukherjee, Tanveer Oberoi and Sahil Tagotra are advocates practicing in Delhi. Abhinav Hansaraman works with a law firm in Bombay and the views expressed are personal.

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