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 August 2020.
In Avitel Post Studioz Limited & Ors v. HSBC PI Holdings (Mauritius) Limited, the Division Bench held that the proper measure of damages for Avitel’s fraudulent misrepresentation to HSBC, inducing the latter to invest USD 60 million in the former, was not the difference between the value of the shares on the date of making the contract and the value HSBC would have received, if it had resold those shares in the market, after the purchase. Rather, it was the measure of such damages would be to put HSBC in the same position as if the contract had never been entered into, which is, the entitlement to recover the price paid for the shares and all consequential losses.
Furthermore, it held that paragraph 27(vi) of Afcons (2010) 8 SCC 24 and paragraph 36(i) of Booz Allen (2011) 5 SCC 532 must be subject to the fact that the same set of facts may lead to civil and criminal proceedings. Furthermore, if the civil dispute involved questions of fraud, misrepresentation, etc. which can be the subject matter of such proceeding under Section 17 of the Contract Act, and/or the tort of deceit, the mere fact that criminal proceedings can or have been instituted in respect of the same subject matter would not lead to the conclusion that a dispute cannot be arbitrable. In the present case, the act of fraud/misrepresentation was said to lack a “public flavour”. [Key Words: impersonation, false representations made, and diversion of funds are all inter parties, public flavour] [Coram: R.F. Nariman, J., Navin Sinha, J.]
In Deccan Paper Mills v. Regency Mahavir Properties Limited and Ors,, the Bench held that an action under Section 31 of the Specific Relief Act 1963 was in personam and not in rem. Following its own judgment in Avitel Post Studioz Limited & Ors v. HSBC PI Holdings (Mauritius) Limited, it was reiterated that simply because the subject matter of an agreement fell within Section 17 of the Indian Contract Act 1872 or involved fraud in the performance of the contract, did not amount to deceit, would not preclude arbitrability. Furthermore, criminal overtones did not render a subject arbitrable. [Key Words: fraud, arbitration agreement, difference between in rem and in personam] [Coram: R.F. Nariman, J., Navin Sinha, J., Indira Banerjee, J.]
INSOLVENCY AND BANKRUPTCY
In Babulal Vardarji Gurjar v. Veer Gurjar Aluminium Industries, the Bench held that para 21 of Jignesh Shah (2019) 10 SCC 750 could not be read as altering the law as explained by B.K. Education AIR 2018 SC 5601. It was reiterated that “the limitation period for application under Section 7 of the Code is three years as provided by Article 137 of the Limitation Act, which commences from the date of default and is extendable only by application of Section 5 of Limitation Act…”. The reference to Section 18 of the Limitation Act 1963 at para 21 of Jignesh Shah was only by way of an illustrative example, and nothing more. [Key Words: limitation, insolvency, section 7, financial creditor] [Coram: A.M. Khanwilkar, J., Dinesh Maheshwari, J.]
In M/s Radha Exports v. Jayaram, the Court decided on an appeal under Section 62 of the IBC 2016 regarding the rejection of an application under S. 7 which was allegedly barred by limitation. The Court held that alternative defences are permissible to contest a claim. The Court, relying on Innoventive Industries held that the insolvency resolution process becomes when a debt or a part of it becomes due and payable and that the IBC is triggered the moment a default of Rupees One Lakh or above occurs. However, relying on Vashdeo Bhojwani (2019) 9 SCC 158, the Court held that it is for the applicant to show that the debt is not barred by limitation. Here, as the applicant failed to show so, the Court upheld the dismissal of the proceedings under the IBC. [Key Words: Insolvency, Limitation] [Coram: Arun Mishra, J., Indira Banerjee, J.]
In Centre for Public Interest Litigation v. Union of India, the Supreme Court held that the there was no need for a direction to the Union of India to prepare a National Plan under Section 11 of the Disaster Management Act 2005 for Covid-19 when the 2019 National Plan already existed. It was further held that the UoI was not obliged to lay down minimum standard of relief under Section 12 of the 2005 Act as the guidelines issued under Section 12 would suffice. The Supreme Court declined the Petitioner’s prayer for a direction to the GoI that all funds collected in the PM CARES Fund be transferred to the National Disaster Response Fund. Further, it was held that
(i) there was no statutory prohibition for the Union of India utilizing the NDRF for providing assistance in the fight of COVID-19 in accordance with the guidelines issued for administration of NDRF;
(ii) there was no statutory prohibition in making any contribution by any person or institution in the NDRF as per Section 46(1)(b) of the Disaster Management Act 2005.
[Key Words: Covid-19, National Policy on Disaster Management 2009, Sendai Declaration, CAG Audit] [Coram: Ashok Bhushan, J., R. Subhash Reddy, J., M.R. Shah, J.]
In Excise, Customs and Service Tax, Calicut v. M/s CERA Board and Doors, Kannur Kera Etc. Etc., the facts before the Court were such that Revenue successfully contended before the CESTAT that the assessees undervalued the goods and sole them at a much higher price than what was reflected in the invoices- thus evading excise duty. The CESTAT’s finding was not challenged by the assessees and the only determination by the Court was the manner of determining the value of the goods removed by the assessees for sale to or through dealers. Laying down elaborate guidelines on the methodology to be used for assessment, the Bench directed that the Revenue authorities investigate the “normal price” as stated in Section 4 of the Central Excise Act 1944 for all assessments prior to 01.07.2000 and “transaction value” for assessments later than 01.07.2020. [Key Words: transaction value, for any other reason, normal price] [Coram: S.A. Bobde, CJI., A.S. Bopanna, J., V. Ramasubramanian, J.]
In Raj Pal Singh v. CIT Rohtak, the Court was addressing an appeal of whether capital gains arising out of land acquisition compensation were chargeable to income-tax under Section 45 of the Income Tax Act 1961 for the previous year referable to the date of award of compensation and not the date of notification for acquisition. The Court held that for chargeability of income-tax, the income ought to have accrued and therefore, capital gains due to land acquisition are chargeable only upon making of the award of acquisition of land, in the case of ordinary acquisition under S.16 of the Land Acquisition Act 1894 and after expiration of 15 days from the publication of the notice in case of urgency acquisition under S. 17. Therefore, such income is chargeable to tax only upon the making of award. [Key Words: Accrual of Income Tax, Land Acquisition Award][Coram: A.M. Khanwilkar, J., Hemant Gupta, J., Dinesh Maheshwari, J.]
In CST, Ahmedabad v. M/s Adani Gas Ltd., the order of CESTAT setting aside the demand for payment of service tax on the charges collected by the respondent for supply of pipes and measuring equipment under Section 65(105)(zzzzj) of the Finance Act 1994 was challenged. The Court held that the test for whether said provision was attracted was whether the measurement equipment was supplied for the use of the purchaser without transferring the right of possession and effective control. As under the contract, the same was satisfied, the Court held that the same was of use to the customers and taxable under Section 65(105)(zzzzj). Further, the Court rejected the contention that as the charges were mainly in the nature of a refundable security deposit, it would not amount to payment for service as the refund was proportional to usage and hence amounted to payment for service. [Key Words: Taxation on supply of tangible goods or services]
[Coram: DY Chandrachud, J., Indu Malhotra, J., K M Joseph, J.]
In Gangadhar alias Gangaram vs. State of Madhya Pradesh, the Court set aside the conviction of the appellant under Section 8C read with Section 20(b)(ii)(c) of the Narcotics Drugs and Psychotropic Substances Act 1985. Following Noor Aga vs. State of Punjab (2008) 16 SCC 417, the Court reiterated that the presumption against the accused’s culpability under Ss. 35 and 54 of the Act to explain possession satisfactorily, are rebuttable. The Prosecution’s obligation to prove charge beyond all reasonable doubt was no dispensed with. The Court observed that the appellant along with the village chowkidar were the ones who identified and led the police to the building purported to belong to the other accused where the contraband was found. The appellant was made accused relying on the voter list although the appellant had immediately furnished the sale deed showing that he had sold the house to the other accused and the same was never examined. The prosecution had failed to examine the village chowkidar or verify the panchayat records. The Court depreciated the conviction of the appellant by the trial court and further affirmation by the High Court without proper evidence. [Key Words: presumption of guilt, onus on prosecution to prove beyond all reasonable doubt] [Coram: R.F. Nariman, J., Navin Sinha, J.]
In Mohd. Anwar v. The State (N.C.T. of Delhi), the Court held that arguments such a plea of unsoundness of mind under Section 84 IPC or mitigating circumstances like juvenility of age ought to be raised during the trial itself as belated claims “undermine the genuineness of the defence’s case”. Here, mental disorder could not be proved as it was based merely on an OPD card and the appellant’s mother’s testimony as “to successfully claim defence of mental unsoundness under Section 84 of IPC, the accused must show by preponderance of probabilities that he/she suffered from a serious-enough mental disease or infirmity which would affect the individual’s ability to distinguish right from wrong.2 Further, it must be established that the accused was afflicted by such disability particularly at the time of the crime and that but for such impairment, the crime would not have been committed”. [Key Words: insanity, unsoundness of mind, Section 84 IPC] [Coram: N.V. Ramana, J., S. Abdul Nazeer, J., Surya Kant, J.]
In Dalbir Singh v. State of NCT of Delhi, the Supreme Court refused to permit the release of compensation for custodial torture by police officials, as proceedings concerning the conviction of said officials were ongoing in the High Court, to avoid multiplicity of proceedings. [Key Words: Compensation for Torture] [Coram: Ashok Bhushan, J., R. Subhash Reddy, J.]
In Union of India v. Ashok Kumar Sharma, the Court held that under the scheme of the CrPC and the Drugs and Cosmetics Act 1940, it is not the police officers but only persons mentioned under Section 32 who may prosecute offenders committing cognizable offences under Chapter IV of the Act. However, police officers may investigate and prosecute if the offender has committed any cognizable under any other law, as provided under Section 32(3) of the 1940 Act. The Court held that as under Section 32 of the Act, it was only the Drugs Inspector empowered to investigate offences under Chapter IV, therefore, the power of arrest which is necessary for the purpose of investigation would also lie only with the Drugs Inspector. While the Drugs inspector may arrest persons in regard to cognizable offences falling under Chapter IV, the officer would be bound by the law laid down in D. K. Basu (1997) 1 SCC 416. [Key Words: Power to arrest, power to prosecute] [Coram: K. M. Joseph, J., Sanjay Kishan Kaul, J.]
In Parvinder Kansal v. The State of NCT of Delhi, the Court held that under Section 372 of the CrPC, the right of appeal of a victim is restricted only to acquittal of the accused, conviction of the accused for lesser offence, or for imposing inadequate compensation. While the state may appeal under Section 377 for enhancement of sentence, the victim does not have any such right. Therefore, the Court dismissed an appeal for enhancement of sentence filed by a victim. [Key Words: victim’s appeal against acquittal] [Coram: Ashok Bhushan, R. Subhash Reddy]
In Preet Pal Singh v. The State of Uttar Pradesh and Another, the Bench held that while considering an application for suspension of sentence, the Appellate court was to only examine if there was a patent infirmity in the order of conviction, rendering the conviction prima facie erroneous- the Appellate Court could not reassess/reanalyse evidence and take a different view when evidence had been considered by the trial court. The Bench further held that there was no question of presumption of innocence in post-conviction bail, and “strong compelling reasons for grant of bail, notwithstanding an order of conviction, by suspension of sentence, and this strong and compelling reason must be recorded in the order granting bail, as mandated in Section 389(1) of the CrPC”. [Key Word: unreasoned order, post-conviction bail, Section 389 CrPC] [Coram: Arun Mishra, J., Indira Banerjee, J.]
In Rhea Chakraborty v. State of Bihar and Others, the Single Judge held as follows on a prima facie basis:
1. Under Section 406 CrPC and following Ram Chander Singh Sagar (1978) 2 SCC 35, only cases and appeals (not investigation) can be transferred.
2. The inquiry by the Mumbai Police was conducted under Section 174 CrPC (fact of suicide) i.e. limited for a definite purpose but was not an investigation of a crime under Section 157 of the CrPC. It was further noted that though the on the basis of the court records, the Mumbai Police could not be accused of any wrongdoing on a prima facie basis, however “their obstruction to the Bihar police team at Mumbai could have been avoided since it gave rise to suspicion on the bonafide of their inquiry”.
3. Patna Police committed no illegality in registering the deceased’s father’s complaint as the complaint relates to misappropriation, breach of trust. At the stage of investigation, the Patna Police was not required to transfer the FIR to Mumbai Police. Likewise, the Government of Bihar was competent consent to a CBI Investigation.
4. Since the deceased’s father’s complaint suggests that Mumbai Police also has jurisdiction to investigate, in case the Mumbai Police registers a case, the Government of Maharashtra will also have the power to consent to a CBI investigation.
5. In the interest of a legitimate investigation, it would be appropriate for the Supreme Court to decide the matter as to whether the CBI or Mumbai Police investigate “all the attending circumstances relating to the death of the actor Sushant Singh Rajput”- a question which arises if the Mumbai Police decides to register a complaint at a later point in time. Thus, while approving the CBI investigation, the Judge invoked Article 142 to direct that “if any other case is registered on the death of the actor Sushant Singh Rajput and the surrounding circumstances of his unnatural death, the CBI is directed to investigate the new case as well”. [Key Word: Sushant Singh Rajput suicide, media trial, Sections 174, 175, 176, 177, 179, 181 and 406 CrPC, Order XXXIX of Supreme Court Rules 2013, transfer of FIR, Section 6 of the Delhi Special Police Act 1946, consent to Central Bureau of Investigation, Accidental Death Report, Lalita Kumari, federal structure] [Coram: Hrishikesh Roy, J.]
In Janhit Abhiyan vs Union of India & Ors., the petitioners challenged the validity of the Constitution (One Hundred and Third Amendment) Act 2019 by which Article 15 and Article 16 of the Constitution of India were amended. The aforesaid amendment empowered States to make special provisions for the advancement of any economically weaker sections other than the classes mentioned in clauses (4) and clauses (5) of Article 15 and in Clause (4) of Article 16, in addition to existing reservation and subject to a maximum of ten per cent of the seats and posts respectively. The Court accepted the petitioners submissions that matter involved substantial questions of law as to the interpretation of the Constitution and same must be referred to a bench of 5 judges under Article 145(3) of the Constitution and Order XXXVIII Rule 1(1) of the Supreme Court Rules. The Court observed that whether the impugned Amendment Act violates basic structure of the Constitution, by applying the tests of ‘width’ and ‘identity’ with reference to equality provisions of the Constitution was substantial question of law. [Key Words: Amendment, Constitution, Article 15, Article 16, Reservation, Basic Structure] [Coram: S.A. Bobde, CJI., R. Subhash Reddy, J. B.R. Gavai, J.]
In Punjab v. Davinder Singh, the Court decided on a referral concerning the constitutional validity of Section 4(5) of the Punjab Scheduled Caste and Backward Classes (Reservation in Services) Act 2006 and whether its decision in E.V. Chinnaiah(2005) 1 SCC 394 required revisitation. The challenge to the section was on the grounds that no sub-classification could be made within the class of Scheduled Castes or Scheduled Tribes. The Court held that its decision in EV Chinnaiah would have to be reconsidered in light of the judgment in Indra Sawhney and referred the case to a bench larger than the one in EV Chinnaiah, as the interpretation of Articles 14, 15, 16, 338, 341, 342 was of immense public importance and directed the matter to be placed before a larger bench comprising of 7 or more judges. [Key Words: Sub-classification within Scheduled Castes, Reservation, Equality][Coram: Arun Mishra J., Indira Banerjee, J., Vineet Saran, J., MR Shah. J., Aniruddha Bose, J.]
Service Law and Administrative Law
In Ajoy Debbarma and others vs. State of Tripura and others, the appellants were aggrieved by the termination of their appointment as ad-hoc teachers by the State Government. The appellants were appointed pursuant advertisements issued in the years 2002, 2006 and 2009, however the selection process came under challenge and was ultimately set-aside by the High Court of Tripura in Tanmoy Nath & others vs. The State of Tripura & Others 1 (2014) 2 TLR 731. The Supreme Court upheld the decision in Tanmoy Nath, modified the order permitting candidates whose appointments were being set-aside to participate in the fresh selection process with inter-alia a relaxation in the criteria for age. The appellants challenged their termination stating that no notice was issued to them and were not impleaded in the proceedings in Tanmoy Nath. The High Court rejected the challenge observing that the appellants were seeking a review of Tanmoy Nath which was already affirmed by the Supreme Court. The Court limited the appeals from this order to the limited question of relaxing the age criteria for such candidates in the fresh selection process. The Court noted that the relaxation afforded by the State in selections till 31.03.2023 was adequate and proper and the State had also granted alternate employment in Group C and Group D non-teaching posts and such alternate employment does not amount to degradation. [Key Words: recruitment, alternate employment] [Coram: U.U. Lalit, J., Vineet Saran, J.]
In Rama Nand and Ors. vs. Chief Secretary, Gov’t of NCT of Delhi & Anr., the appellants who were working as telephone operators with the Delhi Fire Services were deployed as Radio Telephone Operators with higher pay scale pursuant to a reorganisation scheme in 1983. The Appellants were denied the benefit of the Assured Career Progression Scheme introduced in 1999 on the grounds that the Appellants had been in fact promoted in 1983. Aggrieved, the Appellant approached CAT, which allowed their application and granted them the benefit of the ACP scheme. However, upon challenge, the High Court overturned the decision of CAT, resulting in present appeal. The Court relied on its judgement in Bharat Sanchar Nigam Limited vs. R. Santhakumari Velusamy and Ors (2011) 9 SCC 510 to note that there was a fine distinction between upgradation simplicitor and promotion, and in the present case, the appellants were selected based a criteria of minimum 5 years of service, went through the rigours of specialised training and also received higher pay scale and therefore could not be mere re-description or reorganisation of cadre. [Key Words: Promotion, Upgradation Simplicitor, Assured Career Progression Scheme/ACP] [Coram: Sanjay Kishan Kaul, J., Ajay Rastogi, J., Aniruddha Bose, J.]
In Government of India & Ors. vs. ISRO Drivers Association, the respondent association has sought to be recognised under the Central Civil Services (Recognition of Service Associations) Rules 1993 (“1993 Rules”) and the same was denied as a group of employees based on job description would not fall under ‘distinct category’ under Rule 5(c) of the 1993 Rules. The respondent challenged the same under a writ petition and the same was dismissed by the Single Judge of the High Court, and subsequently allowed by the division bench of the High Court, in the intra-court appeal. The Court allowed the appeal and set-aside the judgment of the division bench of the High Court, stating that the scheme of the 1993 Rules is to promote the common interest of its members and any association seeking recognition must represent at least 35% of the total category of employees and a second association commanding at least 15% of employees must also be recognised. The Court noted that the object was to avoid plurality of associations which would not be in the overall interest of the government servants and defeat the purpose of the Joint Consultative Machinery Scheme. The Court noted that the term ‘distinct category of government servants’ under Rule 5 (c) has been clarified by the rule making authority supplementing the scheme of rules for its effective and proper implementation which is permissible under the law unless held to the contrary. [Key Words: Rule 5 (c), the Central Civil Services (Recognition of Service Associations) Rules 1993, distinct category, association of government servants] [Coram: Sanjay Kishan Kaul, J., Ajay Rastogi, J., Aniruddha Bose, J]
In Praneeth v. University Grants Commission, notifications issued by the University Grants Commission directing Universities and Colleges to conduct final year examinations by 30.09.2020 were challenged. The Court held that under Section 12 of the University Grants Commission Act, the UGC was empowered to take decisions on examinations and that the guidelines issued were within the competence of the UGC as they related to co-ordination and determination of standards in institutions of higher education. The Court also held that various clauses of the Guidelines dated 29.04.2020 show that while the conduct of examination for other batches was optional, the conduct of examination for terminal semesters was mandatory, the mere use of the word ‘advisory’ would not render the guidelines optional, and that these guidelines would be treated as having been issued under the powers of the UGC under Section 12. As the period for completion of examination had also been extended, and as institutions would have to follow necessary protocols, the Court held that these guidelines do not violate Articles 14 and 21 of the Constitution. [Key Words: Conduct of Examinations for final year students, Covid, Powers of UGC] [Coram: Ashok Bhushan, J., R. Subhash Reddy, J., M. R. Shah, J.]
Specific Performance, Contract, CPC, Transfer of Property, and Partnership
In The Chairman Board of Trustees Cochin Post Trust vs M/s Arebee Star Maritime Agencies Pvt. Ltd. & Ors, the three judge bench dealt a reference order made by the Division Bench on the liability of steamer agents to pay ground rent or demurrages to the Port Trust. The Court observed that Section 2 (o) of the Major Port Trusts Act 1963 (“MPT Act”), defines owner inclusive including any agent for loading and unloading of goods and that would necessarily include the steamer’s agent. The Court noted that Sub-section 7 of Section 42 (2) makes it clear owner or agents of the vessel are absolved from liability for loss or damage to the goods once the Board of Port Trust has taken custody and issued receipt under the Section. The Court also noticed the scheme under Section 62 wherein a notice can be issued only to the owner or persons who are beneficially entitled to the goods to remove them from the port premises and not to the steamer agents. The Court noted that owner under Section 63 is different from that defined in Section 2 (o) as indicated by the context. The Court stated that Port of Madras v. K.P.V. Sheik Mohd. Rowther & Co. P. Ltd. (1997) 10 SCC 285(‘Rowther-II’) in so far as it states that endorsement on the bill of lading and issuance of delivery order by the steamer agent passing title of the goods to the consignee, cannot be said to be good law as it was in contradiction to .the five judge decision in Port of Madras v. K.P.V. Sheik Mohd. Rowther & Co. P. Ltd. 1963 Supp. (2) SCR 915 (‘Rowther-I’). The Court also overruled Port of Bombay v. Sriyanesh Knitters (1999) 7 SCC 228, to the limited extent that it held that consignee is the bailor and the Port Trust to be the bailee thereof. The Court also held that the view in Forbes Forbes Campbell & Co. v. Port of Bombay (2015) 1 SCC 228 (‘Forbes-II’) the liability to pay demurrage charges and port rent would accrue to the account of the steamer agent because of the statutory bailment that comes into existence under section 42(2) read with section 43(1)(ii), to be incorrect. [Key Words: bailment, Major Port Trusts Act 1963, demurrages, steamer agent] [Coram: R.F. Nariman, J. Navin Sinha, J. Indira Banerjee, J.]
In M/s Exl Careers and Another vs. Frankfinn Aviation Services Private Limited, the Court answering a reference order from a two-judge bench on the perceived conflict between Joginder Tuli vs. S.L. Bhatia (1997) 1 SCC 502 and Oil and Natural Gas Corporation Ltd. vs. Modern Construction & Co., (2014) 1 SCC 648. The Court observed that the Modern Construction, after noticing Joginder Tuli, had laid down the correct law that when a plaint is returned under Order 7 Rule 10 of CPC, the plaint upon presentation before the court of competent jurisdiction, the trial has to be conducted de novo. The Court overruled Oriental Insurance Company Ltd. vs. Tejparas Associates and Exports Pvt. Ltd. (2019) 9 SCC 435 noting that the attention of the Court had not been invited to Modern Construction. On the facts of the case, the Court reiterated the discretionary nature of relief under Article 136 as held in Penu Balakrishna Iyer vs. Ariya M. Ramasawmi Iyer AIR 1965 195 and noting that the appellants in the first instance had raised objection to the jurisdiction of the trial court without reference to the exclusive jurisdiction clause in the contract and the order rejecting their objection had attained finality. It was only an afterthought that the appellants had sought to rely on the exclusive jurisdiction clause. Noticing that the pleadings being completed and evidence led, the trial was at the stage of final arguments, the Court decline to set aside the impugned order of the High Court directing the trial be continued from its present stage. [Key Words: Order 7 Rule 10 of CPC, Return of Plaint, Article 136, discretionary relief] [Coram: R.F. Nariman, J., Navin Sinha J., Indira Banerjee, J.]
In Sri V.N. Krishna Murthy & Anr Etc. Etc. v. Sri Ravikumar & Ors. Etc. Etc., the Supreme Court held that the appellants before it were not entitled to file appeals under Sections 96 and 100 CPC as they were neither aggrieved persons nor were they bound by the trial court judgment. The Bench noted that the relief claimed in the suit was cancellation of the agreement to sell while the Appellants derived their rights from sale deeds, executed on the basis of a general power of attorney. [Key Words: aggrieved party, in rem, in personam, locus to file appeal] [Coram: L. Nageswar Rao, J., Krishna Murari, J., S. Ravindra Bhat, J.]
In Union of India & Anr. v. M/s. K.C. Sharma & Co. & Ors., the Bench held that when ascertaining whether a decree was obtained by fraud, it was necessary to examine the same on the basis of the pleadings and the evidence on record, and not merely vague pleadings. [Key Words: fraud, nullity, decree, judgment, appeal, Section 53A of the Transfer of Property Act 1882, lease, land acquisition, auction] [Coram: Ashok Bhushan, J., M.R. Shah, J., R. Subhash Reddy, J.]
In Sukumaran v. State of Kerala, the Court held that pensionary provisions must be given a liberal construction as a social welfare measure. Further, the Court held that pensionary benefits could not be denied to the appellant who had worked with the Department of Fisheries as a Casual Labour Roll worker merely because he had been appointed through a system of recruitment unlike other CLR workers whom the scheme covered and had been regularized as CLR workers from contractual employment. [Key Words: Pensionary Benefits, Liberal construction of welfare schemes] [Coram: Sanjay Kishan Kaul, J., Ajay Rastogi, J., Aniruddha Bose, J.]
Land Ceiling, Town Planning, Rent Control, and Tenancy
In Hari Krishna Mandir Trust v. State of Maharashtra and Others, the appellant had sought the modification of a scheme under the provisions Section 91 of the Maharashtra Regional and Town Planning Act, 1966 (the “Act”), where it purported that internal private road owned by the appellant was wrongly reflected to be owned by the Pune Municipal Corporation. The State of Maharashtra rejected the appellant’s request and the same was challenged by way of a Writ Petition before the High Court. The High Court dismissed the Writ Petition noting inter alia that it was basic necessity of the Town Planning Scheme to have an approach road to every adjoining plot and the land stood vested with the State under Section 88 of the Act. The Court allowed the appeal after noting that even as per the award under the Act and the title documents, the appellant was the owner of the road and furthermore, the authorities had on earlier occasions admitted that the name of Pune Municipal Corporation was wrongly recorded as the owner. The Court observed that Section 88 cannot be read in isolation but together with Section 125 to 129 relating to compulsory acquisition and Sections 59, 69 and 65. The Court reiterated that right to property is a constitutional right under Article 300A and in the admitted absence of any proceedings for acquisition or purchase, the land could not vest in the State. The Court observed that modification of the scheme to reflect the rightful owner could not be said to be substantial modification to the Scheme and was within the objects of the Act. [Key Words: Section 88, the Maharashtra Regional and Town Planning Act, 1966, land acquisition] [Coram: Indu Malhotra, J., Indira Banerjee, J.]
Law of Contempt
In Re: Prashant Bhushan and Anr., a three-judge Bench of the Supreme Court found Prashant Bhushan guilty for committing criminal contempt of the Supreme Court of India by social media messages on the platform Twitter. The unanimous judgment held that "The tweet has the effect of destabilising the very foundation of this important pillar of the Indian democracy. The tweet clearly tends to give an impression, that the Supreme Court, which is a highest constitutional court in the country, has in the last six years played a vital role in destruction of the Indian democracy." The second Respondent/contemnor Twitter was discharged due to its explanation that it was only an intermediary and had no control over the content that its users posted. [Key Words: democracy, contempt, corruption, bike, Chief Justice of India] [Coram: Arun Mishra, J., B.R. Gavai, J., Krishna Murari, J.]
PUBLIC INTEREST LITIGATION
In Ghanshyam Upadhyay v. State of U.P. and Others, the Petitioner argued that the Government of Uttar Pradesh’s Judicial Commission comprising the Chairman Dr. Justice B.S. Chauhan, Justice Shashikant Agrawal and Shri K.L. Gupta be scrapped due to conflict of interest and the Supreme Court set up a SIT to monitor the investigation. The Court stated that “likelihood of bias” was not proved as newspaper reports do not suffice as cogent evidence in PILs and further that the conclusions of a Commission of Inquiry under the Commission of Inquiries Act 1951 were not binding on a court of law. [Key Words: Vikas Dubey encounter, likelihood of bias, Uttar Pradesh, fake encounter, BJP] [Coram: S.A. Bobde, CJI., A.S. Bopanna, J., V. Ramasubramanian, J.]
In M.C. Mehta v. Union of India, the Bench noted that the “Monitoring Committee to seal the residential premises on the private land” could not exceed its powers and take action beyond its authorisation by the Supreme Court. After reproducing various orders, it was held that the Monitoring Committee was “never authorized by this Court to take action against the residential premises that were not being used for commercial purposes. It was appointed only to check the misuse of the residential properties for commercial purposes. After that, this Court directed that the Monitoring Committee should also look into the matter of “encroachment on the public land” and “unauthorized colonies” that have come up on the public land and were wholly unauthorized without sanction. At no point in time, this Court had empowered the Monitoring Committee to act vis à vis to the purely residential premises.” [Key Word: right to property, civil consequences, sealing drive, commercial purposes, residential purpose] [Coram: Arun Mishra, J., B.R. Gavai, J., Krishna Murari, J.]
In Madhya Pradesh v. Centre for Environment Protection Research and Development, an order of the NGT directing that vehicles not complying with the requirement of displaying a valid Pollution Under Control (PUC) Certificate would lead to the suspension/revocation of the Registration Certificate of the vehicle and directing State governments to issue order to petrol pumps and outlets to not supply fuel to vehicles which did not have a valid PUC certificate was challenged. The Court held that it is settled law that where a statute prescribes a penalty, no penalty not contemplated in the statue may be imposed and as the NGT Act did not contemplate debarring such vehicles from being supplied fuel, no such orders could be issued. The Court also held that the NGT did not have the power to direct appellant States to deposit money to secure compliance. [Key Words: Powers of NGT, Suspension of RC, Pollution Control] [Coram: Arun Mishra, J., Indira Banerjee, J.]
In State of Madhya Pradesh v Rakesh Sethi, a judgment of the Madhya Pradesh High Court quashing Rule 55A of the Motor Vehicles Rules, 1994 enacted by the State of Madhya Pradesh was challenged on the grounds that it was ultra vires the state’s powers vide the Motor Vehicles Act, 1988 and the Central Motor Vehicle Rules, 1989. Allowing the appeal, the Court held that the true import of the various provisions of the 1988 Act specifically empowered the state to charge amounts and levy fees. Further, the Court held that the intention of the Parliament in Section 211 was to enable the State to levy fees which entailed some activity on the part of the State. Therefore, the Court held that under Section 65(1) of the Act, the State government was authorized to prescribe a fee for reserving certain numbers or distinguishing marks to be assigned as registration numbers. [Key Words: Power of State Governments to charge fee for vehicle registration, Reserving special numbers] [Coram: L. Nageswara Rao, J., S. Ravindra Bhat, J.]
In Vineeta Sharma v. Rakesh Sharma and Others, the Court answered the reference as to the retrospectivity of Section 6 of the Hindu Succession Act 1956 as follows at para 129
i. The substituted Section 6confers status of coparcener on the daughter born, before or after amendment, in the same manner as son with same rights and liabilities.
ii. The rights can be claimed by the daughter born earlier with effect from 9th September 2005 with savings as provided in Section 6(1) as to the disposition or alienation, partition or testamentary disposition which had taken place before 20th December 2004.
iii. Since the right in coparcenary is by birth, it is not necessary that father coparcener should be living as on 9th September 2005.
iv. The statutory fiction of partition created by proviso to Section 6 of the HAS 1956 as originally enacted did not bring about the actual partition or disruption of coparcenary. The fiction was only for the purpose of ascertaining share of deceased coparcener when he was survived by a female heir, of Class-I as specified in the Schedule to the 1956 Act or male relative of such female. The substituted Section 6 are required to be given full effect. Despite the fact that a preliminary decree has been passed, the daughters are to be given share in coparcenary equal to that of a son in pending proceedings for final decree or in an appeal.
v. In view of the rigor of provisions of Explanation to Section 6(5) of the 1956 Act, a plea of oral partition cannot be accepted as the statutory recognised mode of partition effected by a deed of partition duly registered under the provisions of the Registration Act 1908 or effected by a decree of a court. However, in exceptional cases where plea of oral partition is supported by public documents and partition is finally effected in the same manner as if it had been affected by a decree of a court, it may be accepted. A plea of partition based on oral evidence alone cannot be accepted and to be rejected outrightly.
[Key Words: retrospective and retroactive, Mitakshara, Dayabhaga, Benares School, Bombay School, coparcenary, Hindu Joint Family, sapindaship, aggregate ownership, joint family property, obstructed and unobstructed marriage, partition, survivorship, statutory fiction, severance of joint status, final decree and preliminary decree, family settlement] [Coram: Arun Mishra, J., S. Abdul Nazeer, J., M.R. Shah, J.]
In Medipol Pharaceutical India Pvt. Ltd. vs. Post Graduate Institute of Medical Education & Research and Anr. the appellant medical supplier was aggrieved by order blacklisting it for a period of two years by the State Drugs Controller and Drug Inspector. The Supreme Court relied on Medicamen Biotech Ltd. v. Rubina Bose, Drug Inspector (2008) 7, Laborate Pharaceuticals India Ltd. V. State of Tamil Nadu (2018) 15 SCC 93 to state that Section 25 of the Drugs & Cosmetics 1940, grants a valuable right to a person who is sought to be penalized, to have a sample tested by the Government Analyst and to be tested by a superior or appellate authority, namely, the Central Drugs Laboratory and if there is delay predominantly attributable to the State or any of its entities, owing to which an article which deteriorates with time is tested and found to be not containing the requisite standard, then penalty for the same cannot be sustained. Noting that there was considerable delay in drawing and testing the sample and further delay of 8 months in sending another sample to the appellate lab, beyond the product’s expiry date, and the delay resulted in the appellant’s right under Section 25, the appellant could not be penalised. [Key Words: Eurasian Equipment (1975) 1 SCC 70, Section 25 of the Drugs & Cosmetics Act, delay in testing, blacklisting] [Coram: Rohinton Fali Nariman, J., Navin Sinha J.]
In Vikrant Singh Malik v. Supertech Limited, in an appeal concerning the NCDRC’s decision to decline permission to flat buyers to file a composite complaint under Section 12(1)(c) of the Consumer Protection Act 1986, the Supreme Court, relying on Rameshwar Prasad (2019) 2 SCC 417 held that a complaint under Section 12(1)(c) can be filed only with the permission of the District Forum. Further, the Court held that there must be sameness of interest for a complaint under Section 12(1)(c) and as in this matter, as the complainants were only highlighting grievance and they did not possess a representative character, an application under 12(1)(c) could not be allowed. [Key Words: Representative Complaint, Consumer Complaint][Coram: DY Chandrachud, J., KM Joseph, J.]
In Wg. Cdr. Arifur Rahman Khan v. DLF Southern Homes, an order of the NCDRC dismissing a complaint filed by 339 home buyers alleging deficiency of service due to delay in handing over possession of residential flats was challenged. The Court held that as agreement between the developer and the purchaser are not on a level platform and is not an even bargain, a clause in the agreement confining the right of the purchaser to receive compensation at the rate of Rupees 5/ square foot would be invalid. Further, the Court held that the failure of the developer to deliver possession within the contractually stipulated period would amount to a deficiency in service under the Consumer Protection Act. Additionally, the Court, relying on Lucknow Development Authority (1994) 1 SCC 243, held that the consumer forum has the jurisdiction to award just and reasonable compensation, beyond the terms of the contract and that its previous decision in Dhanda 2019 SCC OnLine SC 689 did not preclude the award of compensation. The Court also held that the execution of a deed of conveyance does not preclude the purchaser from approaching the consumer forum. [Key Words: Jurisdiction of Consumer Forums, Compensation for delay in handing over of apartments] [Coram: DY Chandrachud, J., K M Joseph, J.]
In Narasamma v. Krishnappa, the Court, relying on Ravinder Kaur Grewal (2019) 8 SCC 729 and Karnataka Board of Wakf (2004) 10 SCC 779 held that a plea claiming title to property and in the alternative, a plea of adverse possession could not be simultaneously contended from the same date. The Court further held that a claim for adverse possession and title over property are mutually inconsistent as the former does not operate till the latter is renounced. [Key Words: Simultaneous pleas of title to property and adverse possession][Coram: Sanjay Kishan Kaul, J., Ajay Rastogi, J., Aniruddha Bose, J.]
In Nazir Mohamed v. J. Kamala, in a claim over possession of immovable property, the Court held that for a question of law to be substantial under Section 100 of the CPC, the question must be debatable, not previously settled by law, and have a material bearing on the decision or rights of the parties. The Court further held that a decree of possession does not automatically follow a decree of declaration of title and ownership and that it was for the person alleging permissive possession to establish the same. [Key Words: Substantial question of law, onus on person alleging permissive possession] [Coram: Navin Sinha, J., Indira Banerjee, J.]
In UoI v. Agricas LLP, the Court held that Section 9 of the Foreign Trade (Development and Regulations) Act 1992 does not incorporate Article XI (1) of the General Agreement on Tariff and Trade and thus does not restrict the power of the Central Government to impose restrictions on imports. The Court held that according to the legislative intent, restrictions on imports could be imposed pursuant to Section 3(2) and the Central Government was not restricted due to Section 9A of the Act. While Section 9A empowered the government to impose quantitative restrictions, this would not derail the government from restricting imports under Section 3. [Key Words: Power of Central Government to impose restrictions on import][Coram: A.M. Khanwilkar, J., Dinesh Maheshwari, J., Sanjiv Khanna, J.]