In this series, Bar & Bench will bring you the top 15 judgments/orders delivered by the Supreme Court of India every two weeks.Below are our picks for the first two weeks of January 2023..1. Pleas challenging 2016 demonetisation dismissed; Justice BV Nagarathna dissentsCase Title: Vivek Narayan Sharma v. Union of India and OthersA Constitution bench of Justices S Abdul Nazeer, BR Gavai, AS Bopanna, V Ramasubramanian and BV Nagarathna recently dismissed petitions challenging the Central government's 2016 decision to demonetise currency notes of ₹1,000 and ₹500.Delivering the majority opinion, Justice Gavai stated that "there was consultation between the Centre and the RBI for a period of 6 months. We hold that there was a reasonable nexus to bring such a measure, and we hold that demonetisation was not hit by doctrine of proportionality."Justice Gavai also concluded that the RBI has no independent power to bring in demonetisation.In her lone dissent, Justice Nagarathna, however, differed on the answers of each of the questions framed by the majority and held that the Central government's 2016 exercise was unlawful.She noted that there was no application of mind on the part of the Reserve Bank of India (RBI) while considering the demonetisation proposal sent by the Central government.Though she delivered a dissenting verdict in the case, Justice Nagarathna said no relief could be granted in individual matters since status quo cannot be restored due to passage of time.“The declaration of law made herein would apply prospectively and would not affect any action taken by the Central Government or the Bank pursuant to the issuance of the Notification dated 8th November, 2016,” her judgment stated..2. Additional restrictions cannot be imposed on freedom of speech of ministers, MPs/ MLAsCase Title: Kaushal Kishore v. State of Uttar Pradesh and OthersA Constitution bench of Justices S Abdul Nazeer, AS Bopanna, BR Gavai, V Ramasubramanian and BV Nagarathna ruled that ministers, Members of Parliament (MPs) and Members of Legislative Assembly (MLAs) enjoy freedom of speech in equal measure as other citizens under Article 19(1)(a) of the Constitution and greater/ additional restrictions cannot be imposed on the fundamental right of free speech of such public functionaries.The Court also held that statement made by a minister related to the government or its affairs cannot be vicariously attributed to the government.Importantly, the Court held that the right to freedom of speech lies not only against the State but also against non-State actors.Justice BV Nagarathna, in a separate judgment, held that the Court cannot impose any greater/additional restrictions on the fundamental right of free speech of such public functionaries.It is for the parliament, in its wisdom, to enact a law to restrain public functionaries from making disparaging remarks against fellow citizens, bearing in mind Articles 19(1)(a) and 19(2) of the Constitution, she ruled.Justice Nagarathna, however, added that while freedom of speech and expression is a much needed right so that citizens are well informed and educated on governance, it cannot turn into hate speech.On the question of whether the right to free speech can be exercised against non-State actors, she dissented from the majority and held that the remedy for the same cannot be through writ jurisdiction..3. Cinema halls, multiplexes have right to regulate movie goers from carrying food and beverage from outsideCase Title: KC Cinema v. State of Jammu and KashmirA division bench of Chief Justice of India DY Chandrachud and Justice PS Narasimha held that an owner of a cinema hall has the right to regulate movies goers from carrying food and beverages from outside into the movie hall.The Court underlined that a cinema hall is the private property of the owner of such hall and he is entitled to put terms and conditions as he deems fit, provided the same are not contrary to public interest or safety."A cinema hall owner has the right to regulate the entry of food and beverage. Whether to consume what is available is entirely upon the choice of the movie goer. Viewers visit hall for entertainment," the Court said.If a viewer enters a movie hall, he/ she has to adhere to the rules of the cinema hall owner and it is evidently a matter of commercial decision of the theatre owner, the Court added.The top Court conceded that the rules framed by the government did not prohibit bringing food into cinema halls from outside. However, a cinema hall owner has the right to carry on his trade and occupation by laying down terms and conditions, the Court said..4. Awarding government contracts through public auction/tenders preferable; deviations should comply with Article 14 Case Title: M/S Indian Medicines Pharmaceuticals Corporation Ltd. v. Kerala Ayurvedic Co-operative Society Ltd. and OthersA division bench of Chief Justice of India DY Chandrachud and Justice Hima Kohli held that inviting tenders and conducting public auctions are the preferred methods for awarding government contracts.The Court, however, observed that if the purpose of allocation by the State is not revenue maximization, the State could award contracts through other methods, provided it is non-arbitrary and meets the requirements of Article 14 of the Constitution."Government contracts involve expenditure out of the public exchequer. Since they involve payment out of the public exchequer, the moneys expended must not be spent arbitrarily. The State does not have absolute discretion while spending public money. All government actions including government contracts awarded by the State must be tested on the touchstone of Article 14," the Court said in its judgment.The bench further explained that the preference for public auctions and tenders exists so that procurement can be made at the best price and to ensure transparency in the allocation process..5. In a suit of specific performance no adverse inference can be drawn merely for not producing passbookCase Title: Basavaraj v. Padmavathi and AnotherA division bench of Justices MR Shah and BV Nagarathna observed that no adverse inference can generally be drawn against a party on whether he is ready and willing to perform his side of an agreement to buy property merely for not producing his passbook.The Court clarified that such adverse inferences cannot be drawn unless the failure to produce the passbook was despite a direction by the Court or a prayer by the opposing party for the production of the passbook.The Court relied on the case of Indira Kaur and Others v. Sheo Lal Kapoor to hold that no adverse inference can be drawn against the appellant as to whether he had the means to pay the balance consideration on the grounds of non-production of passbook, accounts or other documentary evidence..6. Bengaluru a warning, make Environmental Impact Assessment compulsory before urban developmentCase Title: Residents Welfare Association Chandigarh v. Union Territory of ChandigarhA division bench of Justices BR Gavai and BV Nagarathna urged policy-makers to consider the adverse environmental impact stemming from haphazard urbanisation while citing the example of the city of Bengaluru.“The warning flagged by the city of Bengaluru needs to be given due attention by the legislature, executive and the policy makers. It is high time that before permitting urban development, Environmental Impact Assessment (EIA) of such development needs to be done,” said the Court.The Court found that the fragmentation or apartmentalization of single dwelling units in Chandigarh would injure its ‘lungs’ as conceptualised by Le Corbusier, the city’s designer.Therefore, to protect the heritage status of Corbusian Chandigarh, the Court issued a slew of directions preventing the fragmentation of single-dwellings.Lastly, the Court also underscored on the need for governments to take note of the damage caused to the environment in haphazard developments.“It is necessary that a proper balance is struck between sustainable development and environmental protection,” the judgment stated..7. Pendency of divorce petition between parties not ground to quash criminal case for dowry demandCase Title: Sunita Kumari @ Gudiya v. State of Uttar Pradesh and OthersA division bench of Justices MR Shah and CT Ravikumar held that criminal proceedings for demand of dowry cannot be quashed merely because of pendency of divorce petition between the husband and wife."Merely because the wife was suffering from the disease AIDS and/or divorce petition was pending, it cannot be said that the allegations of demand of dowry were highly/inherently improbable and the said proceedings can be said to be bogus proceedings. Therefore, the reasoning given by the High Court while quashing the criminal proceedings are not germane," the Court observed.The Court also observed that:"Once the charge sheet was filed after the investigation having been found prima facie case, it cannot be said that the prosecution was bogus. Under the circumstances, the impugned judgment and order passed by the High Court quashing the criminal proceedings is unsustainable.".8. Income Tax exemptions: Court strikes down provisions excluding "old settlers", Sikkimese women married to non-SikkimeseCase Title: Association of Old Settlers of Sikkim and Others v. Union of India and AnotherA division bench of Justices MR Shah and BV Nagarathna struck down the exclusion of Sikkimese women who married persons from outside the State after April 1, 2008, and old settlers in the State whose names had not been recorded in a Sikkim Subjects Register, from availing exemptions under the Income Tax Act, 1961 granted to all Sikkimese individuals.The Court concluded that these two categories of persons are also “Sikkimese” in terms of Section 10(26AAA) of the Act, which deals with income tax exemptions for Sikkimese individuals.In her concurring opinion, Justice Nagarathna invoked the top court's powers under Article 142 of the Constitution to rule that a proviso including "old settlers" in the definition of Sikkimese individuals must be read into the provision dealing with exemptions for the Sikkimese (Section 10 (26AAA), Income Tax Act, 1961).In this regard, the judge directed the addition of the following proviso in reading the said provision, until an amendment for the same was passed by the Parliament:"... any other individual, whose name does not appear in the Register of Sikkim Subjects but it is established that such individual was domiciled in Sikkim on or before 26th April, 1975.".9. Sentencing Court should give adequate reasons while giving opinion on grant of remission under Section 432, CrPCCase Title: Jaswant Singh and Others v. State of Chhattisgarh and AnotherA division bench of Justices Dinesh Maheshwari and Bela M Trivedi observed that while giving an opinion on the grant of remission of a sentence under Section 432(2) of the Code of Criminal Procedure (CrPC), the presiding officer of the sentencing court must give adequate reasons.The Court reiterated that such an opinion should only be given after taking into consideration the relevant factors laid down in Laxman Naskar v. Union of India (2002), which include:- whether the offence affects the society at large;- the probability of the crime being repeated;- the potential of the convict to commit crimes in future;- if any fruitful purpose is being served by keeping the convict in prison; and- the socio-economic condition of the convict’s family.The Court further observed:"... If the opinion of the presiding judge does not comply with the requirements of Section 432 (2) or if the judge does not consider the relevant factors for grant of remission that have been laid down in Laxman Naskar v. Union of India (supra), the government may request the presiding judge to consider the matter afresh.".10. Non-production of original power of attorney and its effect on validity of sale: Court passes split verdictCase Title: Manik Majumder and Others v. Dipak Kumar Saha (Dead) through Lrs. & OthersA division bench of Justices MR Shah and BV Nagarathna delivered a split verdict in a case involving the question of whether non-production of a deed of power of attorney, on the strength of which a sale deed is executed, is fatal to a suit.While Justice MR Shah found that the execution of the sale deed was not established since the respondent did not produce the power of attorney on record, Justice BV Nagarathna, was of the view that non-production of the deed of power of attorney was not fatal to the case of the respondent.The disagreement between the judges, in this case, was not on a point of law, but largely on the factual circumstances and appreciation of evidence.Justice Shah took note of the fact that if the power of attorney was executed outside India, then as per Section 33(1)(c) of the Registration Act 1908, a power of attorney executed before and authenticated by a notary or any court, Indian consul, vice-consul, or representative of the Central government shall be valid. However, the judge was of the view that the requirements of Section 33(1)(c) of the 1908 Act has not been satisfied at all in the present case.Taking a divergent view from Justice Shah, Justice Nagarathna was of the opinion that the conditions of Section 33(1)(c) of the 1908 Act have been complied with inasmuch as the power of attorney was executed before a magistrate in erstwhile East Pakistan.She further held that production of a power of attorney is not a necessary requirement to prove a sale deed executed through a power of attorney before a court of law..11. NCLT does not exercise parallel jurisdiction with SEBI for violations of insider trading regulationsCase Title: IFB Agro Industries Limited v. SICGIL India Limited and OthersA division bench of Justices AS Bopanna and PS Narasimha ruled that it is not permissible to circumvent the role of the Securities and Exchange Board of India (SEBI) by asking for a rectification from the National Company Law Tribunal (NCLT) under Section 111A of the Companies Act, 1956, when examining a transaction for alleged insider trading.The Court made it clear that the NCLT under Section 59 of the Companies Act, 2013 does not exercise a parallel jurisdiction with SEBI for addressing violations of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.The judges explained that transactions falling within the jurisdiction of regulatory bodies created under statutes must necessarily be subjected to their ex-ante scrutiny, enquiry and adjudication.Outlining the many powers and responsibilities of the SEBI, the bench stated that,"...procedure cannot be short-circuited by making an application under Section 111A of the 1956 Act on the ground that there exists parallel jurisdiction with the SEBI and CLB/Tribunal. The transaction complained of must suffer scrutiny by the regulator, and it is only for the regulator to determine a violation of the provisions of the SEBI Act and the Regulations...the Appellant is not justified in invoking the jurisdiction of the CLB [Company Law Board] under Section 111A of the Act for violation of SEBI regulations.".12. High Court not allowed to make any comment on merits of case once Supreme Court confirms convictionCase Title: State of Rajasthan v. Komal LodhaA division bench of Justices MR Shah and S Ravindra Bhat observed that it is not open for the High Court to make any comment on the merits of the case when the conviction was confirmed by the Supreme Court."When this Court earlier confirmed the conviction of the accused for the offence under Section 302 IPC and that too after hearing the learned Senior Advocate on behalf of the accused, thereafter, it was not open for the High Court to make comments upon the investigation and/or on the merits of the case," the Court observed.The Court also noted that the High Court should have limited itself to the aspect of sentencing for which the matter was remanded to it and not anything else.On this aspect, the Court observed:"Judicial Discipline requires that once the conviction was confirmed by this court that too after hearing the accused, the High Court should not have therefore made any comment on the merits of the case, more particularly, when the conviction was specifically confirmed by the Court and the matter was remitted to the High Court only for the purpose of considering the sentence, namely, whether death penalty and/or life sentence or any other appropriate sentence.".13. Court upholds Section 3A(3) of Himachal Pradesh Motor Vehicles Taxation Act imposing Special Road TaxCase Title: State of Himachal Pradesh and Others v. Goel Bus Service Kullu Etc.A three-judge bench of Justices Sanjay Kishan Kaul, Abhay S Oka and Vikram Nath upheld the constitutional validity of special road tax levied under Section 3A(3) of the Himachal Pradesh Motor Vehicles Taxation Act of 1972 (Act).The Court was of the view that the tax levied under Section 3A(3) of the 1972 Act was introduced as a compensatory measure. It has a regulatory character and cannot be categorized as penalty, the Court said."Imposition of such additional special road tax was only to keep a check or a discipline on the transport vehicle operators to use their vehicles in accordance with the statutory provisions. This could work as a deterrent for the transport operators to not commit any breach and to follow the mandate of the law," the Court observed.With regard to the power of imposition of this tax, the Court noted that the State not only has the power to make laws on the taxation to be imposed on motor vehicles but also has the power to lay down principles on which taxes on vehicles are to be levied.It also noted that the imposition of special road tax by the provision is completely regulatory in nature and such imposition of tax was only to keep a check or a discipline on the transport vehicle operators to use their vehicles in accordance with the statutory provisions.The Court further observed that since there is no Central enactment laying down principles for levy of taxes, it was open for the State to lay down the principles under Entry 35 of List III of the Constitution..14. Court holds parole cannot be counted as part of sentence served when considering remissionCase Title: Rohan Dhungat v. State of Goa and OthersA division bench of Justices MR Shah and CT Ravikumar ruled that periods of parole availed by a prisoner cannot be counted as part of the duration of sentence while considering the minimum imprisonment of 14 years required for premature release from prison under the 2006 Goa Prison Rules.The Court made it clear that even under Section 55 of the 1984 Prisons Act, release on parole is not counted while computing the sentence period."If the submission on behalf of the prisoners that the period of parole is to be included while considering 14 years of actual imprisonment is accepted, in that case, any prisoner who may be influential may get the parole for number of times as there is no restrictions and it can be granted number of times and if the submission on behalf of the prisoners is accepted, it may defeat the very object and purpose of actual imprisonment. We are of the firm view that for the purpose of considering actual imprisonment, the period of parole is to be excluded," the Court said.The Court further noted that parole is conditional release."Parole can be granted in case of short-term imprisonment. Duration of parole extends to one month. Parole is granted by the State Government. For parole, specific reason is required. Parole can be granted for number of times ... The term of imprisonment is not included in the computation of term of parole", the judgment stated..15. Recoveries under SARFAESI for secured assets prevail over recoveries under MSMED ActCase Title: Kotak Mahindra Bank Limited v. Girnar Corrugators Private LimitedA division bench of Justices MR Shah and Krishna Murari held that recoveries under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest (SARFAESI) Act towards secured assets would prevail over recoveries under the Micro, Small and Medium Enterprises Development (MSMED) Act which are mandated by awards decreed by the Facilitation Council.The Court reiterated that the MSMED Act does not provide for any priority over debt dues of the secured creditor unlike Section 26E of the SARFAESI Act. It also stated that it is a settled position of law that among two statutes, if one has a non-obstante clause, it means that the legislature wanted the same to prevail over the other.The Court also underscored that the SARFAESI Act was a a special legislation for the enforcement of security interest created in favour of secured creditors/financial institutions..1. Supreme Court stays Allahabad High Court direction allowing urban local body polls sans OBC reservationCase Title: State of Uttar Pradesh v. Vaibhav Pandey and AnotherA division bench of Chief Justice of India DY Chandrachud and Justice PS Narasimha stayed the Allahabad High Court's direction to the Uttar Pradesh government to hold pending urban local body elections without any reservation for Other Backward Classes (OBCs).The Court remarked that holding elections without reservation for OBCs would not be correct. It also issued notice on all the applications, including one by the Uttar Pradesh State Election Commission..2. Court stays Uttarakhand High Court order on Haldwani evictionCase Title: Abdul Mateen Siddiqui v. Union of India and OthersA division bench of Justices Sanjay Kishan Kaul and AS Oka stayed the Uttarakhand High Court order directing removal of encroachments on Indian Railways' land in Uttarakhand's Haldwani, which would have led to eviction of more than 4,000 families who are residing on land.The Court disapproved the manner in which eviction was sought to be carried out by the Indian Railways.It also said that there shall be no further construction or development on the disputed land."What is troubling us is how do you deal with a situation where people bought in auction and took possession after 1947 and acquired title? You may acquire the land, but what to do now? People lived for 60-70 years some rehabilitation has to be done. There must be a culmination to the issue and we do not encourage what is going on," Justice Kaul had said during the hearing..3. Supreme Court stays Kerala High Court ban on Ads on KSRTC BusesCase Title: Kerala State Road Transport Corporation v. State of Kerala and OthersA division bench of Justices Surya Kant and JK Maheshwari issued a stay on a Kerala High Court order calling for action against KSRTC buses that display advertisements.The Court had asked Kerala State Road Transport Corporation (KSRTC) to come up with a mechanism to regulate advertisements displayed on its buses in a phased manner..4. Supreme Court lifts Meghalaya High Court stay on MoU demarcating Assam-Meghalaya boundaryCase Title: State of Meghalaya v. R Hamberly Wahlang and OthersA three-Judge bench of Chief Justice of India DY Chandrachud, PS Narasimha and JB Pardiwala lifted the stay imposed by the Meghalaya High Court on a memorandum of understanding (MoU) between Assam and Meghalaya with respect to demarcation of physical land boundaries between the two States.The Meghalaya High Court had, in December, stayed the physical demarcation and erection of posts pursuant to the land-boundary agreement..5. Supreme Court quashes Uttarakhand High Court order directing CBI probe against former CM Trivendra RawatCase Title: Trivendra Singh Rawat v. Umesh SharmaA division bench of Justices MR Shah and CT Ravikumar set aside a 2020 Uttarakhand High Court order that had directed a Central Bureau of Investigation (CBI) probe into allegations of corruption levelled by two journalists against the State's then Chief Minister, TS Rawat.The Court noted that no such prayers had been made in the petition before the High Court and that the plea by the journalists was filed only for quashing a first information report (FIR) against them.Pertinently, the Court also noted that Rawat was not made a party to the proceedings or heard by the High Court before the order was passed.
