Landmark Constitutional Law Judgments 2024 by Supreme Court of India Part IV

This article is a roundup of all the landmark constitutional law judgments delivered and reported in the second half of 2024, inclusive of all judgments that showcased consideration, interpretation, and evolution of important constitutional law principles. Three parts of the article already stand released earlier, and the last part is the present one. The judgments in Part IV are as follows:

Abbreviations for various common terminologies in the judgments

Art. — Article	Assn. — Association
UAPA — Unlawful Activities (Prevention) Act, 1967¹	CB — Constitution Bench
COI — Constitution of India²	IPC — Penal Code, 1860³
HC — High Court	LC — lower courts
PG — postgraduate	SC — Supreme Court
SL — State Legislature	UOI — Union of India
PHHC — Punjab & Haryana High Court	SOP — State of Punjab
MCS — merit-cum-seniority	SCM — seniority-cum-merit
RS — Rajya Sabha	Govt. — Government
SG — State Government	LSA — Legal Services Authorities Act, 1987⁴
WP — writ petition	A.P. — Andhra Pradesh
PMLA — Prevention of Money-Laundering Act, 2002⁵	The VAT Act — Assam Value Added Tax Act, 2003⁶
EC — Expert Committee	NGT — National Green Tribunal
w.e.f. — with effect from	SB — Single Bench
u/s — under Section	FC Act — Van (Sanrakshan Evam Samvardhan) Adhiniyam, 1980⁷
DB — Division Bench	NCL — non-creamy layer
JB — Judge Bench	CG — Central Government
CHB — Chandigarh Housing Board	Sec. — Section
PO — Presiding Officer	Advocates Act — Advocates Act, 1961⁸
The 1949 Act — Chartered Accountants Act, 1949⁹	BC — Backward Classes
Co. — Company	CPC — Civil Procedure Code, 1908¹⁰
Commr. — Commissioner	CrPC — Criminal Procedure Code, 1973¹¹
CPDR — Committee for Protection of Democratic Rights	Daniel Latifi judgment — Danial Latifi v. Union of India¹²
IPC — Penal Code, 1860¹³	IDA — Indore Development Authority
IO — Investigating Officer	LA — land acquisition
J&K — Jammu and Kashmir	Ltd. — limited
LP — Legal Practitioners Act, 1879¹⁴	NCB — Narcotics Control Bureau
MADA — Mineral Area Development Authority	NHRC — National Human Rights Commission
MEIs — minority educational institutions	JCP — Joint Committee of Parliament
NDPS ACT — Narcotic Drugs and Psychotropic Substances Act, 1985¹⁵	Or. 7, R. 11 — Order 7, Rule 11
Or. 16 R. 6 — Order 16 Rule 6	PSU — public sector unit
PC Act — Prevention of Corruption Act, 1988¹⁶	RS — Rajya Sabha
PMC judgment — Pune Municipal Corpn. v. Harakchand Misirimal Solanki¹⁷	SCN — show-cause notice
Reliance Industries judgment — Kalpana Yogesh Dhagat v. Reliance Industries Ltd.¹⁸	SMA — Special Marriage Act, 1954¹⁹
Shah Bano judgment — Mohd. Ahmed Khan v. Shah Bano Begum²⁰	SOM — State of Maharashtra
SLP — special leave petition	SOU.P. — State of Uttar Pradesh
SOB — State of Bihar	SPF — Special Police Force
SOR — State of Rajasthan	The 1986 Act — Muslim Women (Protection of Rights on Divorce) Act, 1986²¹
SOW.B. — State of West Bengal	The 2019 Act — Muslim Women (Protection of Rights on Marriage) Act, 2019²²
TC — trial court	The UGC Act — University Grants Commission Act, 1956²³
The 2013 Act — Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013²⁴	SBC — State Bar Council
X — Appellant	UG — undergraduate
SOT.N. — State of Tamil Nadu	U.P. — Uttar Pradesh
MB — Medical Board	w.r.t. — with respect to
ME— Medical Examination	RMP — Registered Medical Practitioners
MTP Act — Medical Termination of Pregnancy Act, 1971²⁵	DJ — District Judge
SOG — State of Gujarat	A.I.J.A. case — All India Judges’ Assn. v. Union of India²⁶
CJ — Civil Judge	NJPC — National Judicial Pay Commission
% — percentage	MOLJ — Ministry of Law & Justice
The 2011 Guidelines — Anganwadi Sevika & Sahayika Guidelines, 2011²⁷	CJI — Chief Justice of India
Delhi HC — Delhi High Court	Third Judges’ case — Special Reference No. 1 of 1998, In re²⁸
Second Judges case — SC Advocates-on-Record Assn. v. Union of India²⁹	MCR, 2016 — Mineral (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016³⁰
PT warrant — prisoner transit warrant	r/w — read with
MCDR, 2017 — Mineral Conservation and Development Rules, 2017³¹	IBM — Indian Bureau of Mines
MMDR Act — Mines and Minerals (Development and Regulation) Act, 1957³²	The 1949 Act — Chartered Accountants Act, 1949³³
UDIN — Unique Document Identification Number	Model Act — Model Prisons and Correctional Services Act, 2023³⁴
ITD — Income Tax Department	JUR – judgment under review
ICAI — Institute of Chartered Accountants of India	DPSPs — Directive Principles of State Policies
NALSA — National Legal Services Authority	GoA.P. — Government of Andhra Pradesh
CFA — Court Fees Act, 1870³⁵	SCOTUS — Supreme Court of the United States
MCFA — Maharashtra Court-Fees Act, 1959³⁶	E3, LII — Entry 3, List II
E11-A, List III — Entry 11-A, List III	ICD — Inland Container Depot
PNJ — principles of natural justice	3 JB — 3-Judge Bench
ACRs — Annual Confidential Reports	A.I.J.A. case (3) — All India Judges’ Assn. (3) v. Union of India³⁷
A.I.J.A. case (1) — All India Judges’ Assn. (I) v. Union of India³⁸	A.I.J.A. case (2) — All India Judges’ Assn. (2) v. Union of India³⁹
HJS — Higher Judicial Service	E11-A, LIII — Entry 11-A, List III
Corporation Act — Mumbai Municipal Corporation Act, 1888⁴⁰	ADJs — Additional District Judges
Rules of 2005 — Gujarat State Judicial Service Rules, 2005⁴¹	GHC — Gujarat High Court
Repeal Act — Khalsa University (Repeal) Act, 2017⁴²	CA — Chartered Accountants
PDJ — Principal District Judge

The judgments are as follows:

(1) Container Corpn. of India Ltd. v. Ajay Khera⁴³

(Delivered on 11-1-2024)

Coram: 2-Judge Bench of Abhay S. Oka and Pankaj Mithal, JJ.

Authored by: HM Abhay S. Oka, J.

The respondent, a former Senior Government Officer approached the National Green Tribunal (for short, “NGT”) raising an important issue of pollution created by Inland Container Depot (for short, “ICD”) at Tughlakabad. It was alleged that ICD is used by trucks/trailers not designed for Delhi, but used for delivery/pickup from locations outside Delhi. Due to the inflow of a large number of such huge trucks/trailers, air pollution in Delhi National Capital Region (NCR) has substantially increased due to emissions from such vehicles. The inflow of such trucks/trailers be diverted to other ICDs around Delhi NCR. A collateral direction was also sought for prohibiting entry of containers/trailers at the said ICD, not bound for Delhi and a direction to the Railway Board also for shifting the operations of the said ICD of its operations relating to the said ICD outside Delhi NCR.

NGT on the aforesaid application filed by the first respondent issued various directions including shifting out of various diesel and pollution emitting vehicles in a phase wise manner. There were other directions issued for restricting the entry of such vehicles in Delhi NCR. Against the directions, the petitioner Container Corporation of India approached Supreme Court which directed the Environment Pollution (Prevention and Control) Authority (for short, “EPCA”) to file a report along with its recommendations.

Correlating air pollution as a threat to right to life guaranteed under Article 21⁴⁴ of the Constitution of India, Court held that deteriorating air quality index in the Delhi NCR region has affected citizens quality of life. The report of EPCA provided detailed statistics, facts and figures about the vehicles entering the Delhi NCR for availing the ICD facilities. Likewise, the pollution inventory prepared by Indian Institute of Technology (IIT) Kanpur in 2016 filed before the Court also revealed that half of the total pollution caused by the vehicles in the city is contributed by trucks/trailers entering Delhi NCR.

The recommendations of the EPCA revolved around three issues

(a) the feasibility of complete transition to compressed natural gas (CNG)/electric/hybrid vehicles as directed by NGT by the impugned order;

(b) the issue of restricting and reducing the entry of non-destined diesel vehicles at the said ICD and the issue of diverting non-destined diesel vehicles to nearby ICDs; and

Supreme Court accepting various set of recommendations of the EPCA directed broadly as follows

(a) The Ministry of Road Transport and Highways should come out with an effective and robust policy for the scrappage of heavy-duty diesel vehicles and their replacement with Bharat Stage 6 (BS-VI) vehicles. Better fuel sources must be utilised by substituting the current fuel sources with less pollutants like CNG/hybrid/electric for vehicles entering the ICD.

(b) The other recommendations of EPCA relating to parking, safe loading, unloading and handling and storing of the cargo were also accepted to be done in a manner towards optimal utilisation of the space available inside the depot as also holding space outside the depot.

(c) Solutions be devised and implemented in terms of the reports filed by expert agencies to persistent problem of congestion and parking inside the said ICD. The Union of India shall formulate a policy of phasing out heavy-duty diesel vehicles, replacing them with BS-VI vehicles. The Union of India shall formulate such a policy within six months.

Accordingly, the appeal was disposed of with the aforesaid directions with the Court monitoring the implementation of the same on a regular basis.

***

(2) Kavita Kamboj v. High Court of Punjab & Haryana⁴⁵

(Delivered on 13-2-2024)

Coram: 3-Judge Bench of Dr D.Y. Chandrachud, J.B. Pardiwala and Manoj Misra, JJ.

Authored by: Dr D.Y. Chandrachud, J.

Background facts

This judgment relates to controversy arising out of the recommendations made by the High Court on the administrative, for the appointment of 13 in-service candidates as Additional District and Sessions Judge (for short, “AD&SJ”) by way of promotion from the post of Senior Civil Judge (for short, “CJ”) under the 65% promotional quota governed by the Haryana Superior Judicial Service Rules, 2007⁴⁶ (for short, “the Rules”). These Rules regulate recruitment and the service conditions for appointment to the Haryana Superior Judicial Service.

The High Court on its administrative side, decided to impose the requirement to secure 50% marks in written test and viva voce individually along with aggregate of 50% marks in both the tests to render eligibility for promotion. Appellants argued that this change was issued without due consultation with the State as required by Article 233⁴⁷ of the Constitution of India and was applied arbitrarily in a discriminatory manner and without prior notice and this leads to inconsistency with not just other recruitment modes but also with the amendment to the Rules. It was also argued that this deviation from previous practice of proper notification violates candidates’ legitimate expectations and principles of natural justice.

Sources of recruitment

The Bench while taking into consideration the three distinct sources and routes of recruitment — promotion (merit-cum-seniority and suitability test), promotion via limited competitive examination and direct recruitment, stated that while the intended post is the same, the three routes serve distinct institutional purposes.

Referring to the decision in judgment of A.I.J.A. case (3)⁴⁸, and the recommendations of the First National Judicial Pay Commission, 1999, the Bench stated that the Rules preserving the three sources of recruitment have been reasonably classified, and different requirements are prescribed for each. Therefore, the principles which apply to viva voce in direct recruitments may not necessarily apply to promotions. The Bench emphasised that Higher Judicial Service require the selection of judicial officers with greater familiarity with law and procedure and requisite professional experience. While a written examination gauges legal knowledge, the viva voce assesses overall personality.

Viva voce is justified

Referring to the decision in the judgments of Lila Dhar v. State of Rajasthan⁴⁹ and Taniya Malik v. High Court of Delhi⁵⁰, the Bench reaffirmed the importance of prescribing minimum qualifying marks for interviews/viva voce. The oral interview is integral to evaluate qualities not demonstrated in written tests, such as communication and practical competency, essential for senior roles like Additional District Judge (ADJ).

Administrative instructions to fill gaps in the Rule

Referring to decision in the judgments of Sant Ram Sharma v. State of Rajasthan⁵¹ and K.H. Siraj v. High Court of Kerala⁵², the Bench observed that consideration of merit along with seniority is not violative of Articles 14⁵³ and 16⁵⁴ of the Constitution of India and is valid so long it is consistent with the Rules.

The Rules themselves are silent with respect to the determination of merit or suitability through written tests or viva voce. Therefore, the High Court in its administrative authority, was open to providing modalities for this determination.

Doctrine of legitimate expectation and natural justice

Referring to decision in the judgment of Sivanandan C.T. v. High Court of Kerala⁵⁵, wherein the scheme of the High Court along with the statutory rules generated a legitimate expectation, the Bench stated that in the present context neither the statutory rules nor the High Court provided any such assurance. Thus, candidates could not claim a legitimate expectation for continuance of any particular eligibility method. The Court also found no evidence of prejudice since the eligibility criteria were set under proper administrative authority and candidates were treated fairly.

Referring to the decisions in the judgments of State of Haryana v. Inder Prakash Anand⁵⁶ and State of Bihar v. Bal Mukund Sah⁵⁷, the Bench while reiterating that in appointment of judicial officers, the High Court’s opinion is not a mere formality, as it possesses the best knowledge about the suitability of a candidate, emphasised upon the exercise of control by the High Court upon the district judiciary. The Bench further stated that if there are specific provisions made under the Rules formed under Article 309⁵⁸, then the High Court cannot issue Full Court resolution or otherwise, that are inconsistent with the mandate of the Rules.

Consultation with the High Court is indispensable

Referring to the decision in the judgment of Chandra Mohan v. State of U.P.⁵⁹, the Bench held that the High Court is better equipped to assess suitability for District Judge appointments. It was further stated that the requirement of Articles 233⁶⁰ and 234⁶¹ of the Constitution of India is violated if in regard to such an appointment the Governor fails to consult the High Court or consults others not contemplated.

The Bench, while agreeing with the High Court that the State Government exceeded its consultation remit by referring the matter to the Union Government, stated that any issues between the High Court and State Government should have been resolved through internal consultation. The State Government was bound to consult only the High Court, and any exercise outside such consultation would constitute an indirect infringement. The Bench emphasised that the duty to consult is integral to the exercise of power; if A appoints B in consultation with C, A cannot appoint B in consultation with C and D.

Conclusion

The Supreme Court concluded that the State Government was plainly in error in faulting the High Court’s process and doubting the decision of the High Court as an arbitrary exercise of power. While the use of “arbitrary” and “betrayal of trust” was highlighted in the communication from State Government, the Bench chose to affirm the decision of the High Court stating that it does not suffer from any legal or other infirmity.

***

(3) Nirmala v. Kulwant Singh⁶²

(Delivered on 3-5-2024)

Coram: 2-Judge Bench of B.R. Gavai and Sandeep Mehta, JJ.

Authored by: B.R. Gavai, J.

Background of the case

A writ petition for habeas corpus was filed before the High Court in regard to the custody of a minor child. The dispute arose following the death of the mother of the minor child. During the police investigation into the mother’s death, the father of the child voluntarily handed over the minor child to the grandmother and executed an affidavit appointing the grandmother as guardian of the minor child and caretaker of the gifted property, since then the child had been continuously in the custody of the grandmother.

Earlier, the father applied to the Child Welfare Committee (CWC) which passed an order declaring the minor child as “a child in need of care and protection” and directed that the custody of the child be handed over to the father. Later, the order was challenged by the grandmother in an appeal under Section 101⁶³ of the Juvenile Justice (Care and Protection of Children) Act, 2015⁶⁴, through which an order was passed stating that CWC had exceeded its jurisdiction, and the child was not a child in need of care and protection (CNPC).

Aggrieved by the appellate court’s decision the father filed a criminal writ petition before the High Court under Articles 226⁶⁵/227⁶⁶ of the Constitution of India seeking a writ in the nature of habeas corpus for the release of the minor child from the alleged illegal custody of the grandmother. The High Court, using the principle of “welfare of the child being of paramount consideration”, allowed the petition and directed the grandmother to hand over the custody to the father while granting the grandparents visiting rights. This judgment was challenged by the grandmother before the Supreme Court.

Writ of habeas corpus not maintainable

Referring to the decision in the judgment of Tejaswini Gaud v. Shekhar Jagdish Prasad Tewari⁶⁷, the Bench stated that the habeas corpus is a prerogative writ and provides an extraordinary remedy, the recourse to which should not be permitted unless any ordinary remedy, if provided, has been already used and is proven to be ineffective. Further, it stated that in custody matters, the extraordinary power under this writ can be exercised by the High Court only when it is proved that detention of the minor is illegal and without any authority of law.

The Bench held that in the present matter, the ordinary remedy lies under the Hindu Minority and Guardianship Act, 1956⁶⁸ or the Guardians and Wards Act, 1890⁶⁹. To conduct an inquiry under such Acts and exercise the powers by writ court are different in nature as the inquiry needs to be comprehensive but the powers of writ court are summary in nature. Above all is the welfare of the child and the decision needs to be taken after comprehensive examination and detailed inquiry in the matter and thus the court may decline to exercise extraordinary jurisdiction in such cases and direct the respective parties to approach the civil courts.

Referring to the decisions in the judgments of Jose Antonio Zalba Diez Del Corral v. State of W.B.⁷⁰ and Rajeswari Chandrasekar Ganesh v. State of T.N.⁷¹, the Bench held that there is no hard and fast rule to decide upon the maintainability of a habeas corpus petition in custody matters and whether to exercise extraordinary jurisdiction under Article 226⁷². The High Court must examine each case on its distinct facts and circumstances. The Bench in the facts of the present case held that the custody of the minor child, as stated, has been given by the father himself upon an affidavit to the grandmother, and therefore, the custody cannot prima facie be stated to be illegal custody. The Bench further held that in such peculiar facts and circumstances, to decide upon the custody of the minor child, a detailed inquiry focusing on the welfare of the minor child and his preferences needs to be done under the provisions of the Guardians and Wards Act, 1890⁷³.

The Bench further remarked that withdrawing the custody of a 7-year-old child from the grandparents with whom he has been living for the last about 5 years may cause some psychological disturbances to the child and to protect the paramount interest of the welfare of the minor child, whether it is necessary to conduct an exercise of promoting the bond between the minor child and the father in a graded manner, and for such decision-making, the extraordinary jurisdiction under Article 226⁷⁴ of the Constitution of India is not an appropriate remedy.

Conclusion and directions

Finally, the Supreme Court held that the High Court was not justified in entertaining the petition under Article 226⁷⁵ of the Constitution. The Bench finally held that proceedings need to be decided in accordance with law on its own merits. If in the case, the father files an application under the Guardians and Wards Act, 1890⁷⁶, then the competent court shall decide the same expeditiously, while directing that at least an order for visitation rights should be provided and passed by such court within a period of four weeks upon making such application.

***

(4) Prabir Purkayastha v. State (NCT of Delhi)⁷⁷

(Delivered on 15-5-2024)

Coram: 2-Judge Bench of B.R. Gavai and Sandeep Mehta, JJ.

Authored by: HM Sandeep Mehta, J.

The appeal arose out of judgment of Delhi High Court, through which the petition of the appellant was dismissed challenging his arrest as illegal in violation of Articles 21⁷⁸ and 22⁷⁹ of the Constitution of India. The petitioner had further challenged the remand order passed by the learned Special Judge as null and void, having been passed in complete violation of all the constitutional mandates, while seeking immediate release from the custody.

Necessary facts

A raid was carried out by the Delhi Police on the residential and official premises of the appellant and his company, viz. PPK Newsclick Studio (P) Ltd., resulting into arrest under various provisions of the Unlawful Activities (Prevention) Act, 1967⁸⁰ (for short, “UAPA”) as also that of the Penal Code, 1860⁸¹. The appellant was accordingly arrested on 3-10-2023 in relation to the said first information report (FIR) vide the arrest memo, which did not specify specifically any “grounds of arrest” of the appellant. The arrest memo was one of the cardinal grounds of challenge in the petition. Thereafter at 6.00 a.m. on 4-10-2023, the appellant was produced before the Remand Judge, whereafter he was remanded to seven days police custody. This led to challenge to both the arrest as well as the remand order passed by the learned Remand Judge. It was contended that the contents of the FIR were provided to the appellant at a much later stage, which discloses a purely fictional story. The grounds of arrest were never communicated to the appellant either orally or in writing thus resulting in violation of Article 22⁸² of the Constitution of India as also Section 50 of the Criminal Procedure Code, 1973⁸³rendered grossly illegal and nullity. The appellant was intentionally deprived from information and his advocates were also prevented from opposing the prayer of police custody remand and from seeking bail.

Applicability of Pankaj Bansal judgment to the UAPA

The Court repelled the contention of the Union of India that since there were inherent differences in the provisions of Section 19 of the Prevention of Money-Laundering Act, 2002 (PMLA)⁸⁴ and Sections 43-A⁸⁵ and 43-B⁸⁶ of the UAPA, therefore the judgment of Pankaj Bansal v. Union of India⁸⁷, would not apply. It was held that since Section 19 of the PMLA and Sections 43-A and 43-B of the UAPA were verbatim the same insofar as the requirement of communication of the grounds of arrest to the person arrested was concerned, therefore the plea was untenable that the judgment of Pankaj Bansal case⁸⁸ would not apply.

Both the provisions in their respective enactments are a manifestation of constitutional safeguard enshrined under Article 22(1)⁸⁹ of the Constitution of India. Applying the golden rule of interpretation, the provisions laying down important constitutional safeguards to any person arrested on charges of committing an offence either under the PMLA⁹⁰ or under the UAPA⁹¹ have to be uniformly construed and applied. Not only this the modified application of Section 167⁹² CrPC qua the remand of the accused under Section 167 CrPC is also common to both the statutes. The Court thus held that the constitutional mandate of informing the arrest person the grounds of arrest as laid down in the judgment of Pankaj Bansal case⁹³, applies pari passu to any person arrested in a case registered under the UAPA. Any person therefore arrested on the allegations of commission of offences under the UAPA has a fundamental and statutory right to be informed about the grounds of arrest in writing, with a copy of such written grounds of arrest to be furnished to the arrested person as a matter of right at the earliest. The purpose of such communication of the grounds of arrest is salutary, as it enables the arrested person to consult his advocate and take legal advice; oppose the police custody remand and to seek bail. Referring to the judgment of Roy V.D. v. State of Kerala⁹⁴, the Court stated that life and personal liberty are the most sacrosanct fundamental rights of all. Any infringement of the fundamental right under Article 22(1)⁹⁵ would vitiate the process of arrest and remand merely because a charge-sheet has been filed in the matter, the same would not validate the illegality and the unconstitutionality attached to the arrest of the accused or his remand. Referring further to the Constitution Bench judgment in Harikisan v. ⁹⁶, the Supreme Court reiterated that the communication of the grounds of detention must not only be in writing, but also in language which the accused understands, followed by a reasonably sufficient opportunity to take legal advice or consultation in the matter. Any oral translation or explanation given by the police officer obligated to furnish grounds in writing cannot be treated as communication of the grounds. Referring further to the judgment of Lallubhai Jogibhai Patel v. Union of I⁹⁷, the Court stated that if grounds are only verbally explained to the detenu and nothing in writing is left with him in the language which he understands, then the constitutional mandate of Article 22(5)⁹⁸ is clearly infringed. The Court thus held that communication of grounds of arrest or grounds of detention in writing to any person placed under detention or subjected to arrest is sacrosanct and cannot be breached under any situation.

Applying the aforementioned principles in the case at hand, the Supreme Court found that the entire exercise of arrest of petitioner was done in a clandestine manner without informing him the grounds clearly on which he was arrested. This was done to deprive the accused of the invaluable opportunity of taking the services of the legal practitioner or legal advice, the information about the proposed remand application was also never furnished to the advocate engaged by the appellant. After examining the arrest memo, the Court also found that it was simply a pro forma memo indicating the formal reasons for which the accused was being arrested. However, the grounds of arrest which require or compel the investigating machinery to curtail the liberty of the accused must also be provided. Thus, even the remand order passed on the basis of the purported exercise of communication of the said grounds it vitiated not only the arrest, but also the subsequent remand of the appellant. Accordingly allowing the special leave petition, the appellant was directed to be released from custody immediately in light of the ratio of Supreme Court in earlier case of Pankaj Bansal⁹⁹.

***

(5) Karnail Singh v. State of Haryana¹⁰⁰

(Delivered on 16-5-2024)

Coram: 2-Judge Bench of B.R. Gavai and Sandeep Mehta, JJ.

Authored by: HM B.R. Gavai, J.

The review petition sought recalling of the judgment passed earlier by the Supreme Court which had toppled and set aside the judgment of the Full Bench of Punjab & Haryana High Court. The judgment which was sought to be reviewed shall be referred to as judgment under review.

Necessary facts

The State of Haryana had initially amended the Haryana Village Common Lands (Regulation) Act, 1961¹⁰¹ (for short, “the Haryana Act, 1961”) to insert sub-section (6) of Section 2(g)¹⁰² after receiving the presidential assent for the said amendment.

Section 2(g)(6) defines “shamilat deh” as follows:

(6) lands reserved for the common purposes of a village under Section 18 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948¹⁰³ (East Punjab Act 50 of 1948), the management and control whereof vests in the Gram Panchayat under Section 23-A of the aforesaid Act.

Explanation.— Lands entered in the column of ownership of record of rights as “Jumla Malkan Wa Digar Haqdaran Arazi Hassab Rasad”, “Jumla Malkan” or “Mushtarka Malkan” shall be shamilat deh within the meaning of this section.

The constitutionality of the aforesaid provision was challenged before the High Court, which eventually after one round of litigation before the Supreme Court was referred to the Full Bench of the High Court, which allowed the petition partly holding broadly that the amended Section 2(g)(6) was simply an elucidation and expansion of the existing provisions of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948; all such lands covered by the amended provision shall vest with the State Government or the Gram Panchayat as the case may be. Accordingly, the High Court directed for mutation entries to be consequently affected by the Revenue Authorities in pursuance of the aforesaid directions. The civil appeal preferred against the aforesaid judgment of Punjab & Haryana High Court came to be allowed by the Supreme Court and writ petition of the original writ petitioners stood consequently dismissed. The review petition sought review of the earlier judgment of the Supreme Court dated 7-4-2022 (for short, “JUR”).

Summary of principles and grounds of review

Referring to the judgment of Kamlesh Verma v. Mayawati¹⁰⁴, the Court discussed the scope of review as available to the Supreme Court or any other Constitutional Court and the circumstances that warrant review on its end. Holding that the phrase — “any other sufficient reason” occurring under Order 47 of the Civil Procedure Code, 1908¹⁰⁵, shall mean a reason sufficient on grounds at least analogous to those specified in the Rule. The Court also discussed various contingencies when the review shall not be maintainable, especially when there is a mere possibility of two views on the subject-matter. Review is permissible only if there is a mistake or error apparent on the face of the record, and review proceedings cannot be equated with the original hearing of the case. Review is permissible only if a material error, manifest on the face of the order, undermines its soundness or results in miscarriage of justice, error must be apparent on the face of the record, not an error which needs to be fished out and searched by diving deep into the pleadings.

Consideration of various judgments and precedents by the Full Bench of the Punjab & Haryana High Court

The grievance of the State before the Supreme Court in the second round of litigation after the judgment of Full Bench was limited to the issue as to whether the land which had not been contributed by the proprietors on the basis of pro rata cut on their holdings imposed during the consolidation proceedings would not vest with the Gram Panchayat or the State Government, but continue to vest with the proprietors. The JUR held that unutilised land was not available for redistribution among the proprietors and that land reserved for common purposes cannot be repartitioned. Once the land has been reserved for common purposes, it cannot be reverted to the proprietors for redistribution was so decided by the JUR. The review proceedings were therefore held to be confined to this issue as to whether the said finding is a material error or not, warranting review.

Discussion on Constitution Bench judgments of Ranjit Singh, Ajit Singh and Bhagat Ram judgment

The Constitution Bench of the Supreme Court in Ranjit Singh v. State of Punjab¹⁰⁶, had held that transfer of “shamilat deh” owned by the proprietors to the village panchayat for purposes of management and conferral of proprietary rights on non-proprietors was not ultra vires Article 31¹⁰⁷, even though no compensation was payable. However in Ranjit Singh judgment¹⁰⁸ the Court did not consider the effect of the Constitution (17th Amendment) Act, 1964¹⁰⁹, through which the second proviso was added to Article 31-A¹¹⁰ of the Constitution of India. Therefore, Ranjit Singh judgment¹¹¹ was held not to have any bearing on the present matter. Referring thereafter to the judgment of Ajit Singh v. State of Punjab¹¹², the Constitution Bench of Supreme Court held that there are two types of acquisition of estate, either whole or part of the rights in the estate. It was held that if the State has in substance acquired all rights in the land for its own purpose, but the title remains with the owner, it cannot be said that it is not acquisition. It can be treated as an acquisition within the second proviso to Article 31-A.

However, if the land is used for the common needs and benefits of the estate or the estate’s concern, wherein only a fraction of each proprietor’s land is taken and formed into a common pool so that the whole may be used for the common needs and benefit of all of the estates/single estate mentioned above. The proprietor (owners of the estate) also share in the benefits along with others. Though the proprietor/owners are deprived of a small bit of their proprietary rights, but in place thereof they are given advantages over a much larger area of land made up of the small bits as also small vacant land. A proprietor gets advantages which he could have never got apart of the scheme, for example like a threshing floor, a manure pit, land for pasture, khal, etc. which otherwise would not have been available to him on a small portion of land donated by him. In other words, the beneficiary of the modification of rights of the proprietor/owner is the community at large and not the State. Therefore, the Constitution Bench in Ajit Singh judgment¹¹³ held that acquisition by the State under Article 31-A cannot be given a technical meaning, but must be given a purposive meaning.

The third Constitution Bench judgment referred to by the Supreme Court was Bhagat Ram v. State of Punjab¹¹⁴, which also involved the issue as to whether the reservation of land for the income of the panchayat is acquisition of land by the State under Article 31-A¹¹⁵. Bhagat Ram judgment¹¹⁶ held that under the provision of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948 till possession is changed under Section 24¹¹⁷ the management and control does not vest in the panchayat, nor the rights of the tenure holders are modified or extinguished till the proprietors/owners enter into possession of the holdings allotted to them under the scheme. Bhagat Ram judgment¹¹⁸ thus held that if the land is to vest with the State or Gram Panchayat, the same would be nothing but compulsory acquisition of the land within the ceiling limit of any individual without payment of the compensation and thus would offend the second proviso to Article 31-A¹¹⁹ of the Constitution of India.

The JUR made no reference or properly consider the spirit of Bhagat Ram judgment¹²⁰, despite that it had a direct bearing on the issue in question. Thus, the findings in the JUR that vesting in the panchayat is complete on mere assignment under Section 18-C¹²¹ of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948 is totally contrary to the Constitution Bench Judgment (CBJ) of Bhagat Ram judgment¹²² of Supreme Court. Ignorance of the view and law laid down by Bhagat Ram judgment¹²³ therefore amounted to an error manifest on the face of record allowing the review petition on this short ground itself.

The Full Bench of Punjab & Haryana High Court in its judgment (assailed in the JUR) had relied on various judgments of the Supreme Court as well as other High Courts, but none of those judgments nor the applicability of the doctrine of stare decisis was ever considered by the JUR. JUR failed to consider the reasoning given by the Full Bench of Punjab & Haryana High Court was unsustainable, nor any discussion undertaken in respect thereof. Thus, for non-consideration of earlier judgments and without decision of the sustainability of observations made in the judgment of the Full Court, the JUR committed another error apparent on the face of the record.

In view of the above therefore the review petition was allowed by the Supreme Court recalling its earlier final judgment and order dated 7-4-2022 and the appeal was restored to its original file.

***

(6) Ravikumar Dhansukhlal Maheta v. High Court of Gujarat¹²⁴

(Delivered on 17-5-2024)

Coram: 3-Judge Bench of Dr D.Y. Chandrachud, J.B. Pardiwala and Manoj Misra, JJ.

Authored by: J.B. Pardiwala, J.

The writ petition under Article 32¹²⁵ was filed by two judicial officers (CJ), who contended that High Court of Gujarat had erroneously applied the principle of “seniority-cum-merit” (for short, “SCM”) in the recruitment undertaken by it in the year 2022 for promotion of CJ to the post of Additional District Judges (for short, “ADJs”) against 65% quota under Rule 5(1)¹²⁶ of the Gujarat State Judicial Service Rules, 2005 (for short, “Rules of 2005”). Rule 5(1), it was contended that ensure promotions on the principle of “merit-cum-seniority” (for short, “MCS”) whereas the High Court proceeded to prepare the final select list in accordance with the seniority of the candidates.

Factual matrix leading to reference to 3-Judge Bench

The Gujarat High Court (for short, “GHC”) issued an advertisement/recruitment notice in April 2022 notifying 68 vacancies in the District Judges cadre from amongst the 65% quota of Civil Judges, which according to Rule 5(1)¹²⁷ of the Rules of 2005, was to be affected on the basis of MCS and passing a suitability test. There were four components for assessing the suitability of judicial officer for promotion, that were prescribed in the said recruitment notice, which included a written test, evaluation of annual confidential reports (for short, “ACRs”) of last 5 years, assessment of every disposal and evaluation of judgments delivered by the judicial officer concerned. The prescribed eligibility for promotion required the aspirant concerned to obtain minimum 40% marks in each component and minimum 50% marks in aggregate of all the four components.

The GHC prepared the list of 205 eligible judicial officers falling in the zone of consideration, who were to be assessed for the purposes of promotion on the basis of aforementioned four components. After the evaluation of all the four factors/criteria, a total of 149 judicial officers were found eligible for promotion having secured a minimum of 40% marks in each of the respective component and above minimum aggregate of 50% marks in all the four components of the suitability test. The High Court accordingly prepared the final list in March 2023 wherein the senior-most 68 candidates (on the basis of their inter se seniority) amongst the aforementioned 149 eligible candidates were given promotion to the post of District Judge.

The aforementioned procedure was challenged by the writ petitioners, wherein the two-Judge Bench observed that since All India Judges’ Assn. (3) v. Union of India¹²⁸ (for short, “A.I.J.A. case (3)”). The writ petitions were heard earlier by a two-Judge Bench, which prima facie opined that the final select list of March 2023 could be in contravention of the principle of MCS as laid down under A.I.J.A. case (3)¹²⁹. Accordingly, the matter was referred to a 3-Judge Bench presided by the Chief Justice, which were accordingly so heard.

Issues and objections to maintainability of the writ petitions

The Court (3-Judge Bench) framed two pivotal questions for its consideration, which were as follows:

(i) what is the scope of principle of the MCS in service jurisprudence; and

(ii) whether promotion of Civil Judge (Senior Division) to the cadre of District Judge in accordance with Rule 5(1)¹³⁰ of the Rules of 2005 and the Recruitment Notice dated 12-4-2022 issued by the High Court of Gujarat is contrary to the principle of “MCS” as laid down in A.I.J.A. case (3)¹³¹.

Responding to and repelling the objections to the maintainability of writ petition and Article 32¹³², the Court held the same to be maintainable and not liable to be rejected on the ground of availability of efficacious alternative remedy under Article 226¹³³ of the Constitution of India. Referring to the judgments of Mohd. Ishaq v. S. Kazam Pasha¹³⁴ and Maharashtra State Judicial Service Assn. v. High Court of Bombay¹³⁵, the Supreme Court held that where the issue pertained only to the interpretation of the relevant rules and there was no dispute as regards the facts of the case by either side, the same could be entertained under Article 32 even though remedy under Article 226 is available. Where issues and interpretations involved in the case are of significant importance having a far-reaching effect, the Court would exercise its discretion and entertain writ petition under Article 32. However, the Court repelled the plea of maintainability on the ground that the decision was taken by the Full Court meeting of the High Court and therefore it was incompetent to deal with the said decision on its judicial side. The Court held that it would be erroneous to say that if any decision is taken by the High Court on its administrative side, the High Court cannot undertake judicial review of such administrative decision dispassionately on its judicial side.

Legislative history and scheme of the Rules of 2005

The Court then delved into the report of Shetty Commission on Judicial Reforms, that led to the landmark judgment of All India Judges’ Assn. (I) v. Union of India¹³⁶ (for short, “A.I.J.A. case (I)”). How the judgment of A.I.J.A. case (I)¹³⁷ highlighted the problems and issues plaguing the district judiciary throughout the country, whilst also discussing the adequate provisions for in-service training and promotions. A.I.J.A. case (1)¹³⁸ was followed by All India Judges’ Assn. (II) v. Union of India¹³⁹ (for short, “A.I.J.A. case (II)”) wherein certain directions were issued for the constitution of a National Commission for preparation of a comprehensive report recommending solutions to issues arising out of promotions, pay-scales, salary structure, etc. of the judicial officers. Accordingly, the first National Judicial Pay Commission under the chairmanship of Mr Justice K.J. Shetty (popularly known as “Shetty Commission on Judicial Reforms”) came to be constituted, which submitted its comprehensive report in November 1999. The recommendations made in the Shetty Commission report eventually culminated into the decision of the Supreme Court in A.I.J.A. case (3)¹⁴⁰, wherein essentially three ways/modes of recruitment to the Higher Judicial Service (for short, “HJS”) were evolved. These three modes of recruitment to the HJS, that is the Cadre of District Judge were as follows:

(a) 50 per cent by promotion from amongst the Civil Judges (Senior Division) on the basis of principle of merit-cum-seniority and passing a suitability test;

(b) 25 per cent by promotion strictly on the basis of merit through limited competitive examination of Civil Judges (Senior Division) having not less than five years’ qualifying service; and

(c) 25 per cent of the posts shall be filled by direct recruitment from amongst the eligible advocates on the basis of the written and viva voce test conducted by the respective High Courts.

The aforesaid compartmentalisation mentioned vide clauses (a) and (b) was directed to be altered from 50% to 65% and reduced from 25% to 10% as mentioned vide clauses (a) and (b) respectively. Accordingly, Rule 5(1)¹⁴¹ of the Rules of 2005 of the GHC enacted initially, after amendment read as follows:

5. Method of recruitment, qualification and age limit.— (3)(I) For being eligible for promotion against 65% of the total posts in the cadre of District Judges required to be filled by promotion on the basis of the principle of merit-cum-seniority, the qualifying service as Senior Civil Judge shall not be less than two years’ service in the cadre.

Thus, Rule 5(3)(I)¹⁴² of the Rules of 2005 stipulated promotion to the 65% posts to the Cadre of HJS on the basis of principles of MCS.

Evolution of principles of MCS and SCM in service jurisprudence

The Court then proceeded to discuss the meaning and origin of “seniority” and “merit” as parameters for promotion. Holding that object of promotion is to secure the best possible incumbent for higher positions, the Court referred to various places where “seniority” and “merit” had been defined respectively. Promotions based on seniority is a tried and tested method, because those who have been engaged in the employment for longer periods have had more time to refine the skills needed for the higher posts. Likewise, “merit” has multiple attributes, which is referable to character, integrity and devotion to the assigned official duties. Referring to the position prevalent in US (Federal Civil Services Act of 1871)¹⁴³, Britain, France (where the doctrine of the “Concours” or competitive examination is followed), Court stated that various modes had been employed for determining the relative excellence amongst those qualified for promotion.

Referring thereafter to the judgment of State of Kerala v. N.M. Thomas¹⁴⁴, it was reiterated that principle of SCM ensures that a senior who has the minimum requisite merit is entitled to promotion, even though there might be others who are more meritorious. However, it is open to the Selection Committee to take into consideration the performance appraisal forms to first ascertain the suitability of the candidates being considered for promotion, which makes promotion not automatic but also introduces significant role of merit. Referring further to the judgment of Kavita Kamboj case¹⁴⁵, it was stated that MCS is an approved method of selection, where the emphasis is primarily on the comparative merit of the judicial officers being considered for promotion, wherein even a junior who demonstrates greater merit than the senior can be considered for promotion. Referring to host of precedents like B.V. Sivaiah v. K. Addanki Babu¹⁴⁶, Palure Bhaskar Rao v. P. Ramaseshaiah¹⁴⁷, K. Samantaray v. National Insurance Co. Ltd.¹⁴⁸ and Sujata Kohli v. High Court of Delhi¹⁴⁹, the Court held that principle of MCS implied the following:

(A) The principle of “merit-cum-seniority” postulates that:

(i) Merit plays a predominant role in and seniority alone cannot be given primacy.

(ii) Comparative assessment of merit is a crucial, though not a mandatory, factor.

(iii) Only where merit is equal in all respects can inter se seniority be considered. Meaning that a junior candidate can be promoted over the senior if the junior is more meritorious.

Likewise, the principle of SCM postulates that—

(B) The principle of “seniority-cum-merit” postulates that:

(i) Minimum requirement of merit and suitability which is necessary for the higher post can be prescribed for the purpose of promotion.

(ii) Comparative assessment amongst the candidates is not required.

(iii) Seniority of a candidate is not a determinative factor for promotion but has a predominant role.

(iv) Upon fulfilling the minimum qualifications, promotions must be based on inter se seniority.

The Court further held that principles of “MCS” and “SCM” however are not to be treated as rigid or inflexible in nature, but only modes or methods of promotion. Over a period of time “hybrid mode of promotion” has come to be recognised, wherein it is open for the employer to specify the area and parameter of weight required to be given to merit and seniority for the purposes of promotion. Therefore “MCS” or “SCM” are always susceptible to statutory rules or policies that may be formulated by the employer, being dynamic in nature and dependent upon the method of promotion intended to be adopted by the employer. It is always open for the employer to specify the area, parameters or the weightage to be given in respect of merit and seniority separately, so long as the policy is not a colourable exercise of power, nor does it violate any statutory provision.

MCS for the purposes of promotion to HJS

Interpreting thereafter the observations and directions in A.I.J.A. case (3)¹⁵⁰, the Court held the said judgment clearly indicated that intention of the Court whilst stipulating MCS promotions to the 50% (later amended to 65% quota) was to test each candidate on their own merit by determination of suitability of the candidates and assessment of their efficiency based on whether they possess adequate knowledge of case law or not. The judgment of A.I.J.A. case (3)¹⁵¹ never intended to mandate the comparative assessment of merit in the category of regular promotions based on seniority (65% of quota). The only requirement that was imposed was possession of certain minimum objectively determined standard of suitability, wherein every candidate who scores higher than or equal to X marks in the suitability test (fixed as the minimum marks) is considered equally suitable and equally meritorious for the purposes of being promoted to the HJS cadre.

Thus, though MCS was a newly created category in A.I.J.A. case (3)¹⁵², the due weightage on seniority in the regular promotional category was never intended to be diluted in any manner, except for the introduction of the suitability test. A.I.J.A. judgment¹⁵³ never imparted any competitive or comparative character to the term MCS for the purposes of 65% promotional quota.

Accordingly, the Court held that criteria adopted by GHC for promotion of Civil Judge to the 65% promotional quota of HJS complied with the principle of MCS. The Court however made certain suggestions to make the suitability test more meaningful by issuing various directions for making it more efficacious and productive.

Conclusion

Accordingly, the Court concluded with the following observations and directions:

(a) The judgment of A.I.J.A. case (3)¹⁵⁴ never stipulated about assessment of comparative merit of the 65% promotional quota, but only mandated determination of suitability of all the candidates and assessment of their continued efficiency with adequate knowledge of case law.

(b) Once it is found that in the suitability test judicial officer concerned had secured the requisite minimum marks, the seniority had to kick in and promotions be based entirely on the basis of inter se seniority.

(c) No fault exists with the promotion process adopted by the GHC, and if the contention of the petitioners were to be accepted, then it would completely obliterate the fine distinction between the two categories of promotion stipulated under Rule 5(1) of the Rules of 2005, viz. the category of 65% promotion on the basis of MCS and 10% promotion strictly on the basis of merit.

(d) The impugned final list of March 2023 is therefore not contrary to the principle of MCS as provided under Rule 5(1)(I) of the Rules of 2005 and accordingly the writ petition was dismissed.

***

(7) Shaji Poulose v. ICAI¹⁵⁵

(Delivered on 17-5-2024)

Coram: 2-Judge Bench of B.V. Nagarathna and Augustine George Masih, JJ.

Authored by: HM B.V. Nagarathna, J.

The writ petitions were preferred by the various Chartered Accountants (for short, “CA”) who had challenged the validity of Clause 6 of Guidelines dated 8-8-2008¹⁵⁶ issued by the Institute of Chartered Accountants of India (for short, “ICAI”) in exercise of delegated powers under the Chartered Accountants Act, 1949 (for short, “1949 Act”)¹⁵⁷ wherein a mandatory ceiling limit of maximum number of audits which any CA can carry out was imposed. In this regard the Clause 6 under Chapter VI of the said Guideline was challenged. Direction was also sought for quashing/setting aside of the disciplinary proceedings initiated by ICAI for violation of the said mandatory ceiling limit by the ICAI.

Necessary facts

For tapping the circulation of black money and controlling the evasion of taxes the Parliament amended the Income-tax Act, 1961¹⁵⁸ to introduce Section 44-AB¹⁵⁹ w.e.f. 1-4-1985 providing for compulsory audit. It provided that every person carrying on business, if his total sale, turnover or gross receipts exceed Rs 40 lakhs and Rs 10 lakhs in case of a professional, then he shall be required to get his accounts audited. The ceiling however was revised from time to time regarding the necessity of audit.

In 1989, the ICAI introduced a mandatory ceiling limit of 30 tax audits to be carried out by any CA above which, if any audit is undertaken, the same shall amount to misconduct. Divergent views were taken by various High Courts. Where on one hand the Madras High Court in K. Bhagavatheeswaran v. ICAI¹⁶⁰, held the same to be violative of Article 19(1)(g)¹⁶¹ of the Constitution of India and resultantly unconstitutional, the Madhya Pradesh High Court to the contrary in Arun Grover v. ICAI¹⁶² and connected petitions affirmed the constitutionality of the same. The view of the Madhya Pradesh High Court was followed by the Kerala High Court as well. In 2007, however, the ceiling limit was increased from 30 to 45 audits per CA per year. In February 2014, the said ceiling limit was increased from 45 to 60, again.

However, the petitioner CA’s and their Association contended that ICAI had no mechanism to record exact data on number of tax audits undertaken by any CA until the same was linked with Unique Document Identification Number (for short, “UDIN”) in 2019. Large number of cases of breach of ceiling limit went unchecked and only a handful of CA’s were issued notices.

Issues for consideration

In view of the rival contentions, the Court framed following issues for its consideration:

(a) Whether the Council of the respondent Institute under the 1949 Act¹⁶³, was competent to impose, by way of guidelines, a numerical restriction on the maximum number of tax audits that could be accepted by a Chartered Accountant under Section 44-AB of the Income-tax Act, 1961¹⁶⁴, in a financial year by way of a guideline?

(b) Whether the restrictions of ceiling limit imposed are unreasonable and therefore, violative of the right guaranteed to Chartered Accountants under Article 19(1)(g)¹⁶⁵ of the Constitution?

(c) Whether the restrictions imposed are arbitrary and illegal and therefore, impermissible under Article 14¹⁶⁶ of the Constitution?

(d) Whether exceeding such specified number of tax audits can be deemed to be “professional misconduct”?

Consideration

The challenge to the guidelines was essentially mounted on three grounds, viz. firstly the manner in which the guideline was brought about was not in accordance with law and the parent legislation; secondly the guideline is violative of Article 19(1)(g), not protected by Article 19(6) thereof; and thirdly the guideline which constitutes a misconduct under clause (c) of Part II of the Second Schedule to the 1949 Act has not at all been enforced until very recently, but enforced only selectively. Therefore, by virtue of its selective enforcement, it has per se become violative of equality clause under Article 14.

Referring to the judgment of All-India Federation of Tax Practitioners v. Union of India¹⁶⁷, the Court held that any member of ICAI is conferred with the privilege of being able to practice as a Chartered Accountant, if Section 2(1)(b)¹⁶⁸ of the 1949 Act is being properly appreciated. Referring further to the judgment of Kerala Ayurveda Paramparya Vaidya Forum v. State of Kerala¹⁶⁹, the Court reiterated that right to practice a profession though a fundamental right, but is not unrestricted and always subject to law imposing regulatory measures aiming to ensure standards of the profession and nature of public interest involved in its practice.

In Re ¾ Issues 2 and 3: Competency of ICAI to impose mandatory ceiling limits through guidelines

The Court then proceeded to examine the guidelines impugned dated 8-8-2008. Referring to Sections 15¹⁷⁰ and 22¹⁷¹ and the Second Schedule¹⁷² to the 1949 Act, Court stated that the objective of 1949 Act is to ensure that CA professionals maintain high professional ethics and render quality service aiding efficiently in the efficient tax administration in the country. The role of CA becomes crucial as it leads to reduction of onerous duties cast on the assessing officer as well as the Income Tax Department (for short, “ITD”). Section 22¹⁷³ of the Act of 1949 defines “professional or other misconduct” to deem to include any act or omission provided under any of the schedules. There is no limitation of the power conferred under Section 22 and the schedules so enumerated are not exhaustive or static about the nature and type of misconducts specified there under. The deeming provision of Section 22 would imply that there could be newer misconducts, which could be included in the schedules in the form of regulations or guidelines. The delegation therefore vide Section 22 on the delegatee is to enumerate a misconduct by way of regulation or a guideline. It is the discretion of the ICAI to incorporate, define and insert any guideline or regulation, the breach of which would result in the misconduct committed by any CA. The delegation of this power under Part II of the Second Schedule on the ICAI cannot be faulted with.

The Court accordingly held that ICAI had the requisite legal competence to frame impugned guidelines putting a mandatory ceiling limit on number of tax audits that a CA could carry out which was initially 30, later in raised to 45 and thereafter to 60 in any assessment year. The arguments of the petitioner CAs therefore were repelled of guidelines being hit by the vice of excessive delegation by the Court.

In Re ¾ Issues 2 and 3: Restrictions of mandatory ceiling being unreasonable, arbitrary and therefore violative of Articles 14 and 19(1)(g)

The Court answering the second and third issue discussed the scope of restrictions that can be imposed vide various clauses of Article 19(1)¹⁷⁴. Referring to the judgments of Nagar Rice & Flour Mills v. N. Teekappa Gowda & Bros.¹⁷⁵ and Hathising Mfg. Co. Ltd. v. Union of India¹⁷⁶, the Court reiterated that fetters imposed on exercise of any fundamental right guaranteed by Article 19(1)(g)¹⁷⁷ must be adjudged not only in light of nature and incidents of the right infringed, but also the public interest sought to be secured by imposing such restriction, the reasonableness of the quality and extent of the fetter upon the right.

Referring to the letter of Central Board of Direct Taxes (CBDT) and Comptroller and Auditor General of India (CAG) Report No. 32 of 2014, Court held that there is a probable link between number of tax audits undertaken and quality thereof being maintained. It is supported by concerns and suggestions shared by experts and practitioners over a span of time over 30 years. Referring further to the Constitution Bench judgment in Saghir Ahmad v. State of U.P.¹⁷⁸, Court held that ICAI placed ample material before it to establish that legislation comes within the permissible limits of Article 19(6)¹⁷⁹. A reasonable possibility of the fall in quality owing to surfeit of tax audit assignments exists and the wisdom of ICAI must be trusted that it has acted on bona fide and genuine recommendations of the CAG report and the CBDT letters. The possibility of the conduct of tax audits in an insincere, unethical or unprofessional manner is eliminated by this endeavour of the ICAI.

The Court then undertook a comprehensive discussion on State regulation of licensed professions and professionals by referring to host of judgments, as follows:

(A) Ohralik v. Ohio State Bar Assn.¹⁸⁰, wherein it was held that State bears a special responsibility for maintaining standards amongst members of the licensed professions and State’s interest implicated in the case of regulatory restriction on the practice of a licensed professional are particularly strong.

(B) Goldfarb v. Virginia State Bar¹⁸¹, wherein the Supreme Court of the United States (for short, “SCOTUS”) held that interest of the State in regulating lawyers is especially great, since lawyers are essential to the primary governmental function of administering justice and have historically been “officers of the courts”.

(C) Referring further to the judgment of Mohd. Faruk v. State of M.P.¹⁸² and Kavalappara Kottarathil Kochuni v. State of Madras¹⁸³, the Supreme Court reiterated that reasonable restriction within Article 19(6)¹⁸⁴ must also be in the interests of the general public. Any policy or law may not be struck down at the instance of an individual alone, on the claims being made of infringement of individual’s rights and liberties, but must be affirmed if required as a matter of vital public interest. The exercise of fundamental rights under Part III has to be delicately balanced with the imminent constitutional imperative of the ordered progress of the society towards the welfare State. The Court is bound to consider the public interest involved, not only from the perspective of the CAs, but rather from the perspective of the general public and the ITD. The public interest in the present case manifests as a benefit to the public exchequer in terms of appropriate quality of tax audit reports under Section 44-AB¹⁸⁵ of the Income-tax Act, 1961. It is designed for plugging tax leakage and thereby saving the time of assessment officers on presentation of quality tax audit reports.

The privilege extended to CAs therefore has been held to be subject to such reasonable restrictions. By virtue of Section 44-AB of the Income-tax Act, 1961, a CA gets the opportunity and privilege to undertake tax audits under the set section. There is nothing wrong if the same is being regulated.

Referring further to the judgments of Sukumar Mukherjee v. State of W.B.¹⁸⁶ and P.V. Sivarajan v. Union of India¹⁸⁷, drawing analogy from restrictions on private practice of medical professionals serving as teachers in medical institutions, Court underscored that such a restriction was found to be reasonable, in the interests of general public as the ban on private practice would make available to the medical professionals (acting as teachers), the time required for reading and research for maintaining quality in their main profession as teachers in medicine. Therefore, a privilege extended to any person to practice any profession can always be regulated under the relevant Act and the Rules made thereunder and revocation of the privilege does not amount to violation of any right. When public interest was the genesis of a privilege being extended to CA (vide Section 44-AB of the Income-tax Act, 1961) it is reasonable that ICAI as an expert body would have the authority to regulate and curtail the privilege in a reasonable manner. The cap on number of tax audits is clearly permissible in view of the materials referred to and relied by ICAI. Control and regulation of any trade though reasonable within the meaning of Article 19(6) may in some cases lead to hardship to some person, not able to satisfy the regulatory rules or provisions validly introduced, however it does not allow him to challenge the validity of the set restrictive regulation or rule, otherwise justified in public interest.

The Court further referring to the judgment of Minerva Talkies v. State of Karnataka¹⁸⁸, held that reduction of income/earning cannot be a ground for holding it as a reasonable restriction on the plea of any professional. Merely because of hardships being faced by certain section of professionals, the restriction cannot be nullified once the public interest is demonstrated and restriction is shown to have a rational nexus with the object sought to be achieved.

Court referred to the Kerala High Court judgment in B.K. Kamath v. ICAI¹⁸⁹, wherein it was held that measures undertaken, intended to maintain and improve the quality of work among CAs cannot be held to be unreasonable restriction since they are necessary for maintaining the status of CAs and for also ensuring the quality of work done by them. Drawing a comparative analysis with Section 224¹⁹⁰ of the Companies Act, 1956, wherein a CA is permitted to audit only 20 companies in any financial year since 1974, the Court affirmed the same holding that in view of the onerous and time consuming nature of the work of CAs requiring accuracy and perfection, such measures have been introduced. Accordingly, the Court answered Issues 2 and 3 in favour of the ICAI.

In Re ¾ Issue 4: Exceeding the ceiling limit of tax audits “can be deemed to be a professional misconduct”

The Court then dealt with alternative plea of the petitioners that exceeding the ceiling limit of tax audits cannot automatically be treated as professional misconduct. It held that there had been uncertainty in law due to guidelines being successfully assailed in some High Courts and pending consideration of their validity before the Supreme Court. Referring to the discussion about “doubtful penalisation” in various texts, especially Halsbury Laws of England, Francis Bennion on Statutory Interpretation, Court held that person should never be penalised except under a clear law. Equitable legal system, therefore during the period of uncertainty about the validity of any rule or guideline, the principle against “doubtful penalisation” shall apply. The benefit of uncertainty will be given to those subjected to misconduct proceedings in all the writ petitions as also CAs who received notices from ICAI but did not approach the court of law. Referring to the judgments of Jindal Papers & Plastics v. Union of India¹⁹¹ and Kasinka Trading v. Union of India¹⁹², Court reiterated that when there is uncertainty about applicability of law, then interest should not be charged at penal rates, but must be charged on ordinary applicable rates. The Court thus held that due to uncertainty of the validity of the guidelines and pendency of proceedings before the Supreme Court at the instance of ICAI, disciplinary proceedings initiated for misconduct against the petitioner CAs are liable to be quashed. Out of around 12,000 CAs who had breached the mandatory ceiling, only a handful were proceeded against by the ICAI and therefore it would be unjust to subject all to adverse proceedings.

The Court however referring to its earlier judgment in Malpe Vishwanath Acharya v. State of Maharashtra¹⁹³, held that a provision which is reasonable at the time of its inception may become unreasonable with the passage of time. The ICAI was therefore directed to examine and enhance the specified number of tax audits that could be undertaken by practising CAs under Section 44-AB¹⁹⁴ of the Income-tax Act, 1961.

The Court also issued certain directions to the CA community as a whole to conform to the highest corporate governance standards and ensuring transparency in accounting. CAs were held to be gatekeepers of the new corporate world which poses challenges as well as unprecedented opportunities. Therefore, the importance of integrity of auditing functions for maintaining financial stability in the Indian economy is very necessary, the responsibility of which rests on the shoulders of the CAs.

Conclusion and final directions

The writ petitions were accordingly disposed of by the Supreme Court recording its conclusion along with directions as follows

(1) Clause 6.0, Chapter VI of the guidelines¹⁹⁵ dated 8-8-2008 and its subsequent amendment was held to be valid and is not violative of Article 19(1)(g)¹⁹⁶ of the Constitution. However, the said Clause 6.0, Chapter VI of the guidelines dated 8-8-2008 and its subsequent amendment would be applicable only from 1-4-2024.

(2) Consequently, all proceedings of misconduct initiated pursuant to the impugned guideline in respect of the writ petitioners and other similarly situated Chartered Accountants were quashed.

(3) Liberty was granted to the respondent ICAI to enhance the specified number of audits that a Chartered Accountant can undertake under Section 44-AB¹⁹⁷ of the Income-tax Act, 1961, if it deems fit.

(4) Liberty is also reserved to the writ petitioners or any other member of the respondent Institute to make a representation in the above context which may be taken into consideration in the event the respondent Institute intends to amend the guideline as per para 173.4 above.

***

(8) Right to Privacy of Adolescents, In re¹⁹⁸

(Delivered on 20-8-2024)

Coram: 2-Judge Bench of Abhay S. Oka and Ujjal Bhuyan, JJ.

Authored by: HM Abhay S. Oka, J.

The criminal appeal arose out of a judgment and order passed by the Calcutta High Court, which set aside the conviction and imprisonment of 20 years awarded to the accused. The learned Special Judge under the Protection of Children from Sexual Offences Act, 2012 (POCSO Act)¹⁹⁹ concluded that the accused was guilty of offences punishable under Section 2(n)²⁰⁰ of the POCSO Act and Section 376(3)²⁰¹ IPC. The accused took the defence that he was married to the victim, out of which wedlock a child was also born of which the accused was the biological father.

The High Court in appeal preferred against the said conviction, acquitted the accused of the offences for abduction under Sections 363²⁰² and 366²⁰³ IPC. However it proceeded to exercise its jurisdiction under Article 226 of the Constitution of India read with Section 482²⁰⁴ CrPC for setting aside the conviction of the accused for the offences punishable under Section 6²⁰⁵ of the POCSO Act read with Section 376 IPC. The High Court found that since the mother of the victim had disowned her entirely and she was continuously residing with the accused along with their minor child, therefore no purpose would be served by subjecting the accused to imprisonment. The Supreme Court took suo motu cognizance of the issue of the judgment passed by the High Court.

Analysis of evidence

Evidence of the victim revealed that though she had married the accused and had a 10-month-old daughter from the said marriage, however no evidence of any nature was produced regarding the factum of marriage between both the persons.

High Court judgment and objectionable observations contained therein

The High Court in its judgment of acquittal however passed certain observations, which were found objectionable by the Supreme Court. The Court held that the duty of the Judge is to decide a case and not preach. The judgment ought not to contain any irrelevant and unnecessary material and be not reflective of the personal opinion of the Judges advising the younger generation and the legislature.

The High Court had made certain observations, especially emphasising upon the “rights-based approach” and young adolescents entering into physical relationships at an early age. There were observations advising youngsters of controlling their sexual urge, especially females of controlling their desire to have sexual pleasure from the opposite sex. The Supreme Court held all such observations made out of context to be shocking, falling in the category of perversity. The Supreme Court further found that the High Court had invented a new concept of “non-exploitative sexual act”, a concept alien to the provisions of the IPC and the POCSO Act. Once any action falls under the category of a sexual act, being a heinous offence, it ceases to be non-exploitative.

The High Court was never called upon to make the observations referred to above. Perhaps these were the subjects on which only the experts could have debated at a different forum, and Judges ought to have avoided expressing their personal views on the same. Any act which constitutes an offence punishable under the POCSO Act cannot be described as “a romantic relationship”.

Resort to Section 482 read with Article 226 for quashing the order of conviction

The Supreme Court then proceeded to examine the decision of the High Court quashing the order of conviction. Referring to the judgment of Gian Singh v. State of Punjab²⁰⁶, the Supreme Court reiterated that in case of serious offences like murder, rape, dacoity, etc. settlement between the offender and the victim can have no legal sanction at all as such offences are offences against the State and not an individual per se. Therefore, even if the accused and the victim came out with a settlement, the High Court could not quash the prosecution after having once found the accused guilty of commission of various offences.

Helpless position of the victim of crime

Though the victim had admitted that she had married the accused and was living with him since the date and month of marriage therefore it was all the more obligatory for the State to have arranged rehabilitatory measures for the victim of the offence. Referring further to the statements of the prosecutrix vis- à-vis the statements recorded during investigation, it was found by the Court that the victim prosecutrix must have been sent the victim to the Juvenile Justice Center, she ought to have been referred to the Child Welfare Committee under Section 19(6)²⁰⁷ read with Section 29²⁰⁸ of the POCSO Act. Giving information of the commission of offence under the POCSO Act is not an empty formality, as the child becomes a child in need of care and protection. Referring further to Sections 30²⁰⁹ and 31²¹⁰ of the POCSO Act, the Court stated that it is a duty of the CWC to ensure care, protection, appropriate rehabilitation or restoration of children in need of care and protection based on the child’s individual care plan. The POCSO Act therefore has in place arrangements for fostering care of children up to the age of 18 years by facilitating their reintegration into the mainstream of society. Referring further to Section 46²¹¹, the Court stated that the Juvenile Justice (Care and Protection of Children) Act, 2015²¹² (for short, “JJ Act”) has sufficient provisions for the rehabilitation of the victim of any offence under the POCSO Act. The provisions are enacted with the objective of integrating the child into society for leading a dignified and meaningful life at a later stage of his life.

The Court held that therefore on realising the commission of heinous offence with the victim in the present case, the State ought to have stepped in and rendered all possible aid to the victim and failure to do so amounted to violation of her fundamental right under Article 21. The police is also duty-bound to strictly implement Section 19 of the POCSO Act, which is directly correlated to the constitutional guarantee of Article 21.

The Court held that even the child born to such a victim needs to be taken care of in a similar manner by the State and after the victim attains majority the State must further ensure that the victim can stand on her/his own legs. Before the Supreme Court, the State filed an affidavit undertaking and extended assurance to support the victim. The Court accordingly directed the State Government to go out of the way to help the victim especially when she was also having a child with her to be catered to.

Conclusion

Accordingly, the Court held the accused was guilty of the offences punishable under Sections 376(2)²¹³ and (3)²¹⁴ IPC and Section 6²¹⁵ of the POCSO Act. The State was directed to implement the provisions of the POCSO Act and the JJ Act pertaining to rehabilitation of the victim in the present case. The Supreme Court also issued a slew of directions for constitution of an appropriate Committee for overlooking the welfare, physical and mental well-being of the victim.

***

(9) Patna Municipal Corpn. v. Tribro Ad Bureau²¹⁶

(Delivered on 20-8-2024)

Coram: 2-Judge Bench of Vikram Nath and Ahsanuddin Amanullah, JJ.

Authored by: HM Ahsanuddin Amanullah, J.

The appeals arise out of the final judgment and order passed by the Division Bench of the Patna High Court, which set aside the judgment of the Single Bench holding that the Patna Municipal Corporation (for short, “Corporation”) cannot raise any demand of tax/fee/royalty on advertisements since it has been made without any legislative sanction and thus violative of Article 265²¹⁷ of the Constitution of India. The Division Bench of the High Court further directed that all amounts recovered by the Corporation from the parties concerned be refunded to them, also holding thereby that the penalty imposed is also unsustainable.

Necessary facts

In August 2005 the Corporation held meetings with the representatives of advertising agencies, wherein it was decided that royalty at the rate of Rs 1 per square foot per year shall be levied on hoardings, payable to the Corporation. Subsequently in January 2007 the rates of royalty were increased from Rs 1 per square foot to Rs 10 per square foot. In December 2010, the Corporation resolved to cancel the registration of advertising agencies which displayed illegal hoardings without paying the royalty dues.

The aforesaid was challenged before the High Court, wherein the learned Single Bench quashed the order of demand of penalty by the Corporation holding that it must collect the same in accordance with rates fixed in the year 2007, viz. at the rate of Rs 1 per square foot. Meanwhile, the advertisement and hoarding owners approached the Division Bench in appeal, which quashed the enhancement itself holding that the Corporation had no power to charge royalty/fee/tax under the Act without framing regulations. The existing regulations at the highest pertained to the licensing part and not the tax levy, assessment, and realisation of tax from the individuals.

Issue for consideration

The Court then held the core issue to be “whether the demand is by way of a tax/levy or simply in the nature of royalty for permission for advertising through hoardings within the limits of the Corporation”.

Consideration and resolution of the issue

Referring to the judgment of Indsil Hydro Power & Manganese Ltd. v. State of Kerala²¹⁸, especially p. 56, the Court held that royalty cannot be equated with tax/levy. Further conduct of the parties and acquiescence precludes any party from turning around and assailing a decision, except when there is inherent lack of jurisdiction. Therefore, once all the advertisement agencies had agreed for payment of royalty at the rate of Rs 1 per square foot in the year 2005 to the Corporation, then they had lost all rights to challenge the same. The Corporation had powers to revise the rates, which was so done after a period of two years.

The Court also held that royalty and tax are not one and the same. Section 431²¹⁹ of the Patna Municipal Corporation Act, 1951 therefore would not come into the picture where royalty, that too by way of an agreement/understanding is levied. In the present case charges were levied for the privilege enjoyed by the advertisers/hoardings for display of their advertisements. Such charges were therefore perfectly justified. The Court accordingly repelled the submission of the respondent advertising agencies contending the levy of advertising charges as a tax and therefore unconstitutional.

The Court further held that there is no dispute that in the meeting held in August 2005, advertising companies did not object to payment of royalty by the Corporation and therefore at a later stage a challenge could later be mounted on limited grounds only as to the quantum/rate of royalty, but not on the decision to charge royalty itself by the Corporation. Even otherwise, the action of the Corporation cannot be struck down merely on the ground of having quoted Section 431 of the Act wrongly in the order imposing the levy.

Referring to the judgments of N. Mani v. Sangeetha Theatre²²⁰ and Ram Sunder Ram v. Union of India²²¹, the Court reiterated the settled position that mere quoting of a wrong provision of law, when the authority concerned is otherwise empowered to carry out an act cannot vitiate the act on such ground alone. Therefore, merely because Section 431 was mentioned would not render the order a nullity. However, the Court held that if there is any future enhancement, the same would be operational and take effect only prospectively and not retrospectively.

However, on the question of imposition of penalty for non-payments, the Court held that the power to impose penalty does not exist and is not available with the Corporation. Though the Corporation would be entitled to charge interest over delayed payments, however the same cannot be treated as a penalty. Referring to the judgment of Alok Shanker Pandey v. Union of India²²², the Court reiterated that interest on delayed payments is not a punishment or a penalty but a normal accretion on capital. Accordingly, it was held that the enhanced rate of Rs 10 per square foot would be payable by the respective respondents from the date the same was made public and communicated to the parties concerned with simple interest at the rate of 6% per annum. The respondent advertising agencies were required to make the payment within a time-bound period, failing which the same was directed to be recoverable as arrears under the Bihar and Orissa Public Demands Recovery Act, 1914²²³.

The Court referring to 9-Judge Constitution Bench judgment of Mineral Area Development Authority v. SAIL²²⁴, summarised that royalty is an amount which generally flows from the lease deed as compared to tax which is imposed by authority of law. Royalty has consistently been treated and constitutes a compensation paid for rights and privileges enjoyed by the grantee, normally having its genesis in the agreement entered between the grantor and the grantee. Tax on the other hand is imposed under statutory power without reference to any special benefit to the conferred on the payer of the tax. It is therefore a contractual consideration.

Accordingly, the appeals were disposed of in terms of the aforesaid directions by the Supreme Court.

***

(10) Khalsa University v. State of Punjab²²⁵

(Delivered on 3-10-2024)

Coram: 2-Judge Bench of B.R. Gavai and K.V. Viswanathan, JJ.

Authored by: HM B.R. Gavai, J.

The appeal arose out of judgment of the Punjab & Haryana High Court (for short, “PHHC”) which dismissed the writ petition filed by the appellants challenging the validity and constitutionality of “the Khalsa University (Repeal) Act, 2017” (for short, “Repeal Act”)²²⁶.

Necessary facts

The appellant Khalsa College Charitable Society, Amritsar applied for setting up of a self-financing private university in the State of Punjab (for short, “SOP”) in view of the Punjab Private Universities Policy, 2010 introduced by it. On the said proposal, after necessary approvals, the Khalsa University Act, 2016²²⁷ came to be passed by the Punjab State Legislature, whereafter the Khalsa University started imparting courses in 26 programs, wherein a large number of students were admitted. However, in April 2017, the Khalsa University was restrained from effecting any admissions to it, till the statutes sent by the University for approval were actually approved by the State Government. In May 2017, the State Government eventually promulgated an ordinance thereby repealing the Khalsa University Act, 2016 followed by the impugned Repeal Act of 2017. The ordinance as well as the Repeal Act were challenged before the PHHC, which petitions were dismissed by it.

Issues for consideration

The Court framed two core issues for its consideration, viz:

(a) whether an enactment giving out a differential treatment to a single entity is valid in law or not; and

(b) whether the impugned Repeal Act is liable to be struck down on the ground of manifest arbitrariness.

In re 1st issue — Validity of enactment giving out a differential treatment to a single entity

On this issue Court referred to the judgment of Charanjit Lal Chowdhury v. Union of India²²⁸, which related to scrutiny of a legislation which was enacted solitarily for Sholapur Spinning and Weaving Company Ltd. Through the Sholapur Spinning and Weaving Company (Emergency Provisions) Act, 1950²²⁹, an enactment introduced only for the Sholapur Company, its managing agents and directors were dismissed and held to have automatically vacated their office. The Constitution Bench of 5 Judges through majority judgment rejected the argument that legislation relating to any one individual/one family/one body corporate, per se violates the guarantee of equal protection rule. There can be certainly a law applying to one person or to one group of persons, and it cannot be held to be unconstitutional if it is not discriminatory in its character. It would be bad law if it arbitrarily selects one individual or a class of individuals and visits a penalty selectively upon them, not imposed upon others guilty of like delinquency. However, if the law aimed at a single individual/entity exhibits some exceptional features, not possessed by others; based upon differentia having a rational relation to the object sought to be achieved, then it does not become discriminatory. However, in the aforesaid judgment of Charanjit Lal Chowdhury case²³⁰, there was disagreement with respect to discharge of burden. Whereas the majority held that the burden to show that the law is unconstitutional who challenges the validity thereof, the minority on the other hand held that in such cases wherein an entity has been singled out and the petitioner successfully points out that similarly circumstanced persons/entities have been left out from the legislation, then he cannot be asked to show or demonstrate any further. It shall be presumed that the petitioner had discharged his burden by pointing out the instances of similarly circumstanced individuals/persons who had been left out by the legislation under challenge.

Referring further to the judgment of D.S. Reddy v. Osmania University²³¹, wherein Section 13-A of the Osmania University (Second Amendment) Act, 1966²³² was under challenge, the Constitution Bench of the Supreme Court found the classification of a singular person (appellant therein) for an enactment as bereft of any intelligible differentia and lacking classification. The State had failed to show that grouping of such an individual as a class by himself was premised on a reasonable basis, moreover when the statute itself or the surrounding circumstances did not point out the segregation and individual classification for the purposes of legislation. Thus, referring to other host of precedents, Court held that a legislation can always be enacted affecting a single entity/undertaking/person, which is not impermissible. However, the same must always be on the basis of reasonable classification having nexus with the object sought to be achieved. There should be special circumstances requiring such an enactment, which should be gathered from the material taken into consideration by the competent legislation which includes the parliamentary/legislative debates. Wherever the Supreme Court has upheld legislations affecting a single entity/institution/undertaking, it was done in emergent and extreme circumstances preceded by enquiries, parliamentary debates, sufficient material and circumstances justifying the same, etc. It was done only when the legislature demonstrated before the Court that it took into consideration the relevant material and found it necessary and expedient to do so.

Applying the aforesaid principles, the Court then proceeded to examine the constitutionality of the Repeal Act, which was also a single entity legislation repealing the Khalsa University Act, 2016. The petitioners had pointed out that they were singularly targeted, whereas 16 other private universities were still operational and were untouched by the State. There was absolutely no reason or justification why the Khalsa University was being ordered to be shut down. However the respondents failed to justify or answer the grounds of discrimination, nor any material was placed regarding the compelling and emergent situation for enacting a single entity law repealing the Khalsa University. No material was placed, nor any discussions in the State Legislature prior to passing of the impugned Act were brought on record before the Supreme Court to answer the challenge made to the Repeal Act by the petitioners. Accordingly, answering the first issue in favour of the appellant, the Repeal Act was held to have singled out the Khalsa University among 16 other private universities of the State without any reasonable classification. It was thus discriminatory and violative of Article 14²³³ of the Constitution, liable to be struck down.

In re 2nd issue — Repeal Act being vitiated by “manifest arbitrariness”

The Court then proceeded to deal with another ground of challenge of the impugned Act being suffering from manifest arbitrariness. Referring to the judgment of Shayara Bano v. Union of India²³⁴, Court held that the test of manifest arbitrariness can be applied to invalidate both legislation as well as subordinate legislation under Article 14²³⁵. Manifest arbitrariness is something done by the legislature capriciously, irrationally and/or without any adequate determining principle. Something is done, which is excessive and disproportionate through the legislation, renders it manifestly arbitrary. Accordingly, applying the aforementioned tests, it was held that the statement of repeal of the Repeal Act simply stated that Khalsa College had over a passage of time become a significant icon of Khalsa Heritage and the University established in 2016 is likely to shadow and damage its character and pristine glory. The Court found that Khalsa College established in 1892 was not a part of the Khalsa University at all, and colleges affiliated with the Khalsa University were entirely different, in respect of which the appellant has also given a specific undertaking before the Court that Khalsa College had no correlation with the Khalsa University. The undertaking stated that the Khalsa College would not be touched or adversely affected by the establishment of the Khalsa University, nor Khalsa College would not be affiliated with the Khalsa University. The placement of Khalsa College in the campus along with other institutions was demonstrated through maps to be separate and entirely different from the buildings of the Khalsa University having no resemblance with each other. Therefore, the very foundation of the Repeal Act that Khalsa University would shadow and damage the character and pristine glory of Khalsa College was premised on a non-existent basis. The impugned enactment having been enacted for a non-existent purpose therefore fell under the ambit of manifest arbitrariness, and held to be resultantly violative of Article 14²³⁶ of the Constitution of India.

Accordingly, the appeal was allowed by the Supreme Court and judgment of the PHHC set aside. The Repeal Act was declared to be unconstitutional and accordingly struck down, holding that previously enacted and notified the Khalsa University Act, 2016 shall be deemed to be in force and status quo as it was ordered on 29-5-2017 (through the earlier interim order) would stand restored.

***

(11) Ratilal Jhaverbhai Parmar v. State of Gujarat²³⁷

(Delivered on 21-10-2024)

Coram: 2-Judge Bench of Dipankar Datta and Prashant Kumar Mishra, JJ.

Authored by: HM Dipankar Datta, J.

The issue before the Court related to judgment that had been signed by the learned Judge of the High Court after demitting office. Highlighting the necessity of promptness in delivery of judgments, especially in cases where result is already known, but not the reasons, the Supreme Court referred to Balaji Baliram Mupade v. State of Maharashtra²³⁸, holding that in such contingencies the aggrieved party is deprived of the opportunity to seek further judicial redress.

In the present case, the impugned order passed by the High Court though was titled as “oral order” (order dictated in open court), however the same was passed after more than a year, whilst being antedated as having been passed on 1-3-2023. It was revealed from the report of the Registrar General of the High Court that the learned Judge dictated the reasoned order only in April 2024, whereafter the final order was uploaded on 30-4-2024 (after more than a year). The Court held that the learned Judge ceased to retain jurisdiction over the petition, after having once pronounced that the writ petition is dismissed. Since it was not orally mentioned/expressed that “reasons would follow”, not reflected in the order reserving judgment, the learned Judge became functus officio.

The Court then proceeded to highlight the necessity of adopting a proper judicial conduct, after holding that the learned Judge failed to adhere to the highest standards of fairness, propriety and discipline. It was obligatory for the learned Judge to have brought the matter back to the Court once again, listed for rehearing, recall the verbal order for dismissal and placed before the Chief Justice of the High Court for assigning it to some other Bench for fresh consideration, instead of pronouncing or assigning reasons for dismissal after more than a year in April 2024. Observing that society expects every Judge of a High Court to be a model of rectitude, an epitome of unimpeachable integrity and unwavering principles, the conduct in question of the Judge brought disrepute to the judicial system of the country.

Referring further to Order 20 of the Civil Procedure Code, 1908²³⁹, Supreme Court held that judgment can be pronounced in an open court either at once or as soon thereafter has been practicable on a future day. If much time is likely to be consumed in dictating the order on the Board, operative part may be pronounced together with the outcome whilst expressing that “reasons would follow” of the outcomes so mentioned orally on board; thereafter concluding the exercise of pronouncing the final judgments with reasons at the earliest dispatch. If the learned Judge feels that too much of time would be consumed in authoring the final judgment, then it is advisable to reserve it finally for the detailed judgment to be pronounced at a later date.

However, at the same time, the Court held that the error of the Judge must be looked at wearing glasses of grace and compassion. Judges of the Supreme Court remain as elder brother only to the extent of exercise of appellate jurisdiction. Referring to the judgment of Tirupati Balaji Developers (P) Ltd. v. State of Bihar²⁴⁰, Court reiterated that unified hierarchical judicial structure under the Indian Constitution the Supreme Court must promote empathy and understanding by encouraging forgiveness, more so when the learned Judge has not been put on notice and provides his version. The Court then accordingly proceeded to set aside the impugned order whilst reiterating the oft quoted saying that justice must not only be done, but also must be seen to have been done. The petition of the appellant was held to have been revived with the Chief Justice of the High Court being requested to assign it to appropriate Bench as per the roster. The appeal was accordingly allowed.

***

(12) Municipal Corpn. of Greater Mumbai v. Vivek V. Gawde²⁴¹

(Delivered on 13-12-2024)

Coram: 2-Judge Bench of Dipankar Datta and Prashant Kumar Mishra, JJ.

Authored by: HM Dipankar Datta, J.

The appeal arose out of common judgment passed in a batch of writ petitions under Articles 226²⁴² and 227²⁴³ of the Constitution of India by the Bombay High Court, through which the eviction proceedings were expedited by the High Court pending before the inquiry officer under the provisions of the Mumbai Municipal Corporation Act, 1888 (for short, “Corporation Act”). The grievance however stemmed from the various points for determination in issues framed by the High Court to be adjudicated by the enquiry officer, foreclosing the right of the appellant Corporation to decipher and determine other issues. The challenge was made on the ground that High Court took upon itself the burden of framing points for determination and laid down a procedure which is ex facie contrary to provisions of Chapter V-A of the Corporation Act.

Necessary facts

The original occupants were the predecessors of the respondents who were allotted the subject premises on leave and license basis in the 1960’s owing to their employment with the Corporation. Eviction proceedings were initiated against the respondents, when they attempted to get the tenancy converted to permanent ownership, which was declined by the High Court earlier. This was followed by notices under Section 105-B(1)²⁴⁴ of the Corporation Act by the Corporation requiring them to vacate the premises immediately, which was assailed on various grounds. The primary contention of the respondents before the High Court was that principles of natural justice (for short, “PNJ”) were violated, being vitiated by elements of bias, since the enquiry officer was none else but the delegate of Municipal Commissioner, acting on behalf of the Corporation which is seeking to evict the respondent occupants. It was also contended that in the absence of regulations framed under Section 105-H²⁴⁵ of the Corporation Act, eviction proceedings cannot be initiated or continued against the occupants. There were other multiple grounds taken for assailing the eviction proceedings instituted by the Corporation.

The High Court though held that eviction proceedings can be continued even in the lack of regulations being framed in relation thereto. However, the High Court in apparent volte face framed 9 (nine) points for determination with respect to pending inquiry proceedings and remanded the matter back to the enquiry officer for adjudication afresh. The Corporation assailed the aforesaid judgment of the High Court on the ground that it gave a premium to the dilatory tactics adopted by the respondents, who were none else but admittedly unauthorised occupants of the public premises. It was thus the third round of litigation before the High Court initiated by the respondents and the second round which reached the Supreme Court.

Resolution of various issues by the court

Maintainability of a writ petition seeking writ of certiorari under Article 226 for quashing orders passed by the Principal District Judge (for short, “PDJ”): The Court proceeded to answer the issue as to whether the order passed by the Principle Judge under Section 105-F²⁴⁶ of the Corporation Act was passed by him as a persona designata, so as to be amenable to writ jurisdiction under Article 226²⁴⁷ or whether the same was passed in the capacity of a judicial authority for the same to be amenable to Article 227²⁴⁸ jurisdiction. Referring to 3-Judge Bench decision of the Supreme Court in LIC v. Nandini J. Shah²⁴⁹, Court stated that appeals before the District Judge of that district or any other judicial officer in that district are maintainable for possessing necessary qualifications who could be designated by the District Judge. Because the enactment predicates appellate officer has to be a District Judge or a judicial officer of equivalent rank, it is indicative of the fact of a pre-existing authority exercising judicial power of the State, a creature of Section 5 of the Bombay Civil Courts Act, 1869²⁵⁰. The appellate authority is undeniably the head of the district judiciary discharging judicial power of the State, expected to exercise the power of civil court in view of the above, therefore order passed by such and authority stands at par with the order of the subordinate court, the challenge thereto must ordinarily proceed only under Article 227 of the Constitution of India and not under Article 226. Referring further to the judgment of Radhey Shyam v. Chhabi Nath²⁵¹, the Supreme Court held that orders passed by a civil court cannot be challenged under a writ petition under Article 226 of the Constitution of India, as High Courts cannot issue writs to the subordinate courts. Orders of the civil court stand on different footing from orders of authorities or tribunals or courts other than judicial/civil courts. Therefore, the writ petition preferred by the respondents seeking writ of certiorari for quashing the decision of the appellate authority under Section 105-F (akin to a civil court) was never maintainable and ought to have been dismissed at the threshold with respect to its primary relief.

Scope of interference with the order passed by the enquiry officer by the High Court: Referring to the judgment of Mohd. Yunus v. Mohd. Mustaqim²⁵², the Supreme Court stated that mere wrong decision is not enough to attract High Court’s jurisdiction under Article 227. Referring further to the judgment of W.B. Central School Service Commission v. Abdul Halim²⁵³, the Court stated that where there may reasonably be two opinions, it cannot be said to be an error apparent on the face of the record. The Court can examine the reasonableness of any order passed by the authority, but cannot look into the sufficiency of grounds in support of a decision whilst examining the merits of the decision or sit as an appellate authority. Till the time the decision of the decision maker is vitiated by irrationality, and that too on the principles of Wednesbury unreasonableness or unless it is found that there has been a procedural impropriety in the decision-making process, it would be impermissible for the High Court to interfere in the decision-making process. The error must be apparent on the face of record and be self-evident. Thus, the High Court was held to have exceeded the ambit of both its writ as well as supervisory jurisdiction in the present case by framing points for determination in a summary proceeding of eviction. The High Court clearly overstepped its limits and took unto itself a duty which the Act entrusted the statutory authority to exercise. Framing of issues for the enquiry officer to determine at the initial stage when simply the notices were issued to the respondents, the High Court in a way substituted its own wisdom for that of the civil court.

The proceedings being vitiated by institutional bias, having been conducted by the officer of the Corporation: The Court then examined the crucial issue whether the eviction proceedings instituted by the delegatee of the Municipal Commissioner as the enquiry officer were vitiated on the grounds of PNJ of nemo judex in causa sua. This issue was also answered in favour of the appellant by the Court referring to judgment of Accountant and Secretarial Services (P) Ltd. v. Union of India²⁵⁴, wherein it was held that appointment of an officer of the nationalised bank in proceedings pertaining to eviction from premises of the very same bank, Article 14²⁵⁵ or PNJ would not be violated. It is only an officer or appointee of the Government, statutory authority or Corporation who can be thought of implementing the provisions of the Act and personal bias cannot always and necessarily be attributed to such officer either in favour of the bank or against any occupant being so proceeded against for eviction. The remedy of an appeal before an independent judicial officer/authority against orders passed by such enquiry officer further accords sanctity and legality to the said procedure. Referring further to the judgments of Delhi Financial Corpn. v. ²⁵⁶, Hyderabad Vanaspathi Ltd. v. ²⁵⁷ and Maganlal Chhaganlal (P) Ltd. v. Municipal Corpn²⁵⁸, the Court held that mere appointment of an officer/employee of the Corporation does not by itself bring into play the doctrine that “no man can be a Judge in his own cause”. It must be shown for attracting the said doctrine that the officer concerned has a personal bias or a personal interest or has personally acted in the matter concerned and/or has already taken a decision one way or the other which he may be interested in supporting. The availability of appellate remedy ultimately subjects the decision of the enquiry officer to the wisdom of a judicial officer trained in the art and skill of law at the appellate stage or even before the High Court under Articles 226²⁵⁹/227²⁶⁰ of the Constitution of India. The officer therefore does not act in his capacity as an executive official, but as a quasi-judicial authority. Therefore, even though he may be an officer of the Corporation whilst proceeding with the eviction and the inquiry proceedings, he is presumed to be an independent quasi-judicial officer under the enactment.

Absence of regulations being framed under Section 105-H of the Corporation Act: The Court held that absence of regulations being framed under Section 105-H of the Corporation Act does not debar the continuance of proceedings for eviction by the enquiry officer. Even in the absence of regulations, the inquiry proceedings can be carried out by reasonably adhering to PNJ. The provision nowhere places any embargo on the enquiry officer to proceed until regulations are framed, lest public premises occupied by unauthorised occupants would be lost on such technical pleas, without the backing of any imperative statutory provision. This would defeat the very purpose of the enactment, which seeks expeditious resolution of eviction proceedings and handing over of vacant possession of public premises in the hands of its original owner, viz. the Corporation.

Accordingly, the civil appeals were allowed by the Supreme Court and the enquiry officer, with the setting aside of the High Court judgment. The enquiry officer was directed to allow both the parties to lead evidence and raise whatever points are available in defence, except to the extent determined by judicial orders passed before.

***

(13) Rinku Baheti v. Sandesh Sharda²⁶¹

(Delivered on 19-12-2024)

Coram: 2-Judge Bench of B.V. Nagarathna and Pankaj Mithal, JJ.

Authored by: B.V. Nagarathna, J.

This matter is with respect to a transfer petition filed by the petitioner wife under Section 25²⁶² of the Civil Procedure Code, 1908 seeking transfer of a divorce petition. In the same proceedings, the respondent husband filed an application before the Court under Article 142(1)²⁶³ of the Constitution of India, seeking dissolution of marriage between the parties on the ground of irretrievable breakdown of marriage.

Discretion can be exercised under Article 142(1) of the Constitution of India

Referring to the decision in judgment of Shilpa Sailesh v. Varun Sreenivasan²⁶⁴, the Bench stated that the power to dissolve a marriage under Article 142(1) is exercisable when in the opinion of the Court there is complete and irretrievable breakdown of marriage, in spite of the other spouse opposing such prayer.

Referring to the decision in judgment of Rakesh Raman v. Kavita²⁶⁵, it was observed that for dissolution of marriage, irretrievable breakdown of marriage may not be a ground but allowing such a facade of marriage to continue would be an injustice to both the parties and between the parties, would only result in a more bitter and acrimonious relationship to keep this broken marriage alive would amount to cruelty on both the sides.

Referring to several decisions in judgments of Vikas Kanaujia v. Sarita²⁶⁶, Prakashchandra Joshi v. Kuntal Prakashchandra Joshi²⁶⁷ and Vineet Taneja v. Ritu Johari²⁶⁸, the Bench reiterated that irretrievable breakdown of marriage is a ground for dissolution of marriage under Section 13(1)(i-a) of the Hindu Marriage Act, 1955²⁶⁹ and while exercising its power under Article 142 of the Constitution of India, the Court had granted a decree of divorce and dissolved marriages on the ground of irretrievable breakdown of marriage.

Factors constituting irretrievable breakdown of marriage

The Bench stated that in such cases in order to consider an application under Article 142(1) of the Constitution of India, it is necessary to examine and ascertain that whether the factors constitute an irretrievable breakdown of marriage. These factors can be distinct as per facts of each and every case. The Bench further stated that where there is an irretrievable breakdown of marriage, that means it has been established that there is no scope of reconciliation between the parties. As a ground for a marriage to be dissolved under sub-section (1) of Section 13-B of the Hindu Marriage Act, 1955²⁷⁰, it has to be at least established by both the spouses that: firstly, there has been an actual separation between them for a period of one year or more; secondly, they have not been able to live together; and lastly, they have mutually agreed that the marriage should be dissolved.

Referring to the judgment of Shilpa Sailesh case²⁷¹, the Bench stated that to exercise discretion to declare dissolution of marriage on ground of irretrievable breakdown of marriage, it is necessary that both the parties satisfy and convince the Court that there is a deadlock of marriage and it would be in best interest of the related parties to allow them to move on independently putting an end to their marital ties.

The Bench noted several illustrative factors which the courts need to take into consideration before allowing dissolution of marriage on the ground of irretrievable breakdown of marriage. They can be as follows: the nature of allegations made by the parties against each other and their family members, the orders passed in the legal proceedings, the time that parties have spent together, the cumulative impact on the personal relationship, the attempts made for settlement of disputes, the period of separation between the parties, etc. These non-exhaustive factors along with socio-economic status of the parties, their educational qualifications, their age, and whether there are any children born from the wedlock and such other considerations are to be examined to ascertain whether the marriage can be dissolved on the ground of irretrievable breakdown of marriage.

Facts establish irretrievable breakdown of marriage

The Bench, in the context of the facts if the present matter, examined them relating to the time period spent together by both the parties, the quality of the relationship between them and the litigation pending between both the parties and their family members. The Bench finally stated that there was hardly any cordiality or meaningful marital relationship existed between the two parties. The Bench further stated that this is a perfect example of an irretrievable breakdown of marriage in which after a brief period of relationship both the parties have engaged in litigation against each other, having filed for divorce and contended regarding fixation of permanent alimony. In such conditions forcing the parties to move back to the Family Court and pursue the litigation further or to compel them to continue the marital bond would amount to bestowing unwarranted hardship on the parties and their family members.

Criminal complaint leads to an incurable scar

Referring to the judgments of Dara Lakshmi Narayana v. State of Telangana²⁷², Achin Gupta v. State of Haryana²⁷³ and Preeti Gupta v. State of Jharkhand²⁷⁴, the Bench observed that in most of the matrimonial disputes, the combined package of criminal proceedings invoking Sections 498-A²⁷⁵, 376²⁷⁶, 377²⁷⁷ and 506²⁷⁸ IPC and domestic violence proceedings against the spouse have become the reason behind the failure of mediations and they result in an incurable scar on the marital bond of the parties. The Bench further deprecated the practice of supplying “package litigation” in matrimonial disputes and taking it as option in the fit of rage, fueled by the emotions of marital dispute, making complaints involving serious offences and using such complaints and litigation as a platform for negotiation and a weapon against the husband and his family to get them to comply with their demands which are mostly monetary in nature.

Most contentious point is the amount of alimony

Referring to the judgments of Kiran Jyot Maini v. Anish Pramod Patel²⁷⁹, Vinny Parmvir Parmar v. Parmvir Parmar²⁸⁰, Vishwanath Agrawal v. Sarla Vishwanath Agrawal²⁸¹ and Rajnesh v. Neha²⁸², the Bench stated that to decide upon the question of amount of permanent alimony, the non-exhaustive list of factors as stated in these judgments should be taken into consideration while determining the fair amount of the one-time settlement.

The Bench noted that the petitioner wife had made demands of “equalisation” of the amount of alimony with the earlier wife in deciding upon the alimony against the respondent husband. It expressed serious reservations regarding such demands and stated that such demands of equalisation are only made in cases where the spouse is a person of means and is doing well for himself; such demands are not usually made where the wealth of the spouse has decreased since the time of separation. The Bench further observed that different approaches to seek maintenance and alimony depend on the status and income of the spouse. It was further reiterated that the law of maintenance and alimony is aimed at empowering the destitute and achieving social justice and dignity for the individual, whether it is the wife or the child of the husband. It further observed that the wife cannot claim to be maintained as per the current status of the husband in life. The claim against the husband for maintenance must be limited to the status and livelihood that the wife had enjoyed during the continuance of the marriage.

The Bench took into consideration the petitioner wife’s reasonable needs, her residential rights, and other similar factors and observed that the wife herself has a monthly income sufficient to maintain a good standard of living and she had not adduced any evidence to prove the exact standard of life that she lived in her matrimonial life. Taking into consideration the peculiar facts of the case the Bench held that the wife still requires a separate residence and reasonable monetary amount to maintain herself. The Court finally found the decision of the learned Judge of the Family Court awarding Rs 10 crore as alimony to the wife as appropriate, along with an additional amount of Rs 2 crore to be paid by the husband respondent to the wife so that she may get herself a separate residence. Along with this, the Bench also ordered the petitioner wife to vacate the premises of her father-in-law and further directed the respondent husband to not claim any prepaid amount or jewellery from the petitioner wife.

The Bench finally concluded the matter by allowing the application of the respondent husband under Article 142(1)²⁸³ of the Constitution of India and dissolving the marriage on the ground of irretrievable breakdown of marriage, whilst quashing all criminal proceedings filed by the petitioner wife against the respondent husband and all other pending litigation between the petitioner wife and the respondent husband.

***

(14) Sanjeevkumar Harakchand Kankariya v. Union of India²⁸⁴

(Delivered on 19-12-2024)

Coram: 2-Judge Bench of Sanjay Karol and C.T. Ravikumar, JJ.

Majority Opinion Authored by: Sanjay Karol, J.

Challenge was laid to a judgment of Bombay High Court (Aurangabad Bench) which rejected the writ petition seeking complete refund of court fees paid by the appellant with respect to civil proceedings, which stood settled in the mediation proceedings undertaken under Section 89²⁸⁵ of the Civil Procedure Code, 1908 and eventually amicably resolved. A compromise was entered into between the parties, presented before the Court and a civil suit was disposed of in terms of the said compromise, whereafter request for refund of court fees was allowed only to the extent of 50% (and not full refund). Referring to the provisions of Section 16²⁸⁶ of the Court Fees Act, 1870 (for short, “CFA”) read with Section 21²⁸⁷ of the Legal Services Authorities Act, 1987 (for short, “LSA”) the appellants contended primarily that whenever a matter is referred to Lok Adalat under Section 20(1)²⁸⁸, resulting into compromise or settlement, the court fees is refunded entirely. The CFA being a Central legislation would override the State enactment, since the State enactment permitted only 50% of the refund in such contingencies.

The Court framed the following questions for its adjudication and resolution:

Whether in view of the inconsistency between the CFA and the Maharashtra Court Fees Act, 1959 (for short, “MCFA”) if any, would the appellant be entitled to a complete refund of court fees per the former, since it is a Central legislation?
Whether the Maharashtra State Legislature could have enacted the provision and brought out a notification giving refunds in ways contrary to and distinct from the manner and method provided in the Central Legislation?

Court referred to Entry 3, List II²⁸⁹ and Entry 11-A, List III²⁹⁰, which read as follows:

List II — State List I.

1. …

2. …

3. (***) Officers and servants of the High Court; procedure in rent and revenue courts; fees taken in all courts except the Supreme Court.

List III — Concurrent List

* * *

(11-A. Administration of Justice; constitution and organisation of all courts, except the Supreme Court and the High Courts.)

The appellant contended that the issue of court fees was a larger facet of “administration of justice”, hence falling under Entry 11-A, List III and not falling under Entry 3, List II.

The Court referring to the doctrine of pith and substance as expounded in the judgment of Girnar Traders (3) v. State of Maharashtra²⁹¹, it was reiterated that the doctrine of pith and substance implies that the true nature and character of the legislation must be examined closely to know whether and in which entry it falls; whether it falls in a forbidden territory. It is applicable not only in cases of conflict between the powers of two legislatures, but also in any case where and whenever the question arises as to whether a legislation is covered by a particular legislative field over which the power is purported to be exercised. The substance of the legislation should be examined to arrive at a correct analysis or to adjudge the validity of law. Referring further to the judgment of Jamshed N. Guzdar v. State of Maharashtra²⁹², wherein scope of Entry 11-A, List III fell for consideration reference was further made to the judgments of State of T.N. v. G.N. Venkataswamy²⁹³ and M. Karunanidhi v. Union of India²⁹⁴, it was held that the phrase “administration of justice” pertains to conferment in all courts with general, territorial and pecuniary jurisdiction. Both State as well as the Centre are competent to make legislation on any of the covered areas under Entry 11-A. However since “court fees” as a subject finds mention also under Entry 3, List II, the territory of “court fees” shall fall within the purview and lawmaking power of the State. There is no inconsistency between the Central and the State legislation since the power to frame a legislation on “court fees” may be arising from multiple entries and not relatable only to one entry. The competence to legislate can be demonstrated from conjoint reading of multiple entries, instead of being confined and read into any one particular entry. The legislation would be a composite legislation drawing upon several entries and therefore once the legislation and legislative competence is demonstrated, it ceases to be ultra vires the legislative power of the State/Centre. It therefore cannot be argued that matter pertaining to the “court fees” would travel out of the purview of Entry 3, List II, once it is held to be falling also within the amplitude of Entry 11-A, List III. Subject of “court fees” being relatable to two different entries, one occurring in the State List and the other occurring in the Central List would not make resort to Entry 3 redundant by the State, even if the said subject can be impliedly read to be included under Entry 11-A, List III.

The Court then proceeded to examine the contention pertaining to differentiation in the refund of “court fees” as provided under the Central and the State legislation. It was argued that this differentiation defeats the overall, salutary purpose of Section 89²⁹⁵ of the Civil Procedure Code, 1908. Therefore, the Court held that refund of “court fees” either partial or complete is a benefit incidental to the resolution of dispute, it is not the object and purpose of introduction of Section 89 into the Civil Procedure Code, 1908. Also, because in case of settlement through Lok Adalat the LSA provided for full refund, the same cannot be prayed for being extended to other similar modes of dispute resolution as well (like mediation). Award of Lok Adalat cannot be equated with the resolution of dispute through mediation under Section 89 of the Civil Procedure Code, 1908. There are certain undeniable differences between Lok Adalat and mediation and simply because refund under the CFA is statutorily prescribed in case of resolution/settlement through Lok Adalat, by no stretch of imagination can the said exact situation be adopted to the settlement of a dispute by mediation.

Accordingly, the Court found no error in the reasoning of the High Court and rejected all the contentions of the appellant. It was held that Entry 11-A, List III cannot exclusively govern the refund of “court fees”, in the face of Entry 3, List II, which is a separate legislative power vested with the State. However, since the State Government had already carried out amendments to the MCFA introducing Section 16-A towards full refund of the court fees in case of settlement through mediation, the Court directed that after coming into force of the aforementioned extracted amendment parties shall receive refund of full court fees (100% refund) whenever the matter is settled through mediation under Section 89²⁹⁶ of the Civil Procedure Code, 1908. The appeal was accordingly disposed of.

*Expert in Constitutional, Civil & Commercial Laws and Practising Advocate, Supreme Court of India.

**4th year student, Dharmashastra National Law University, Jabalpur.

1. Unlawful Activities (Prevention) Act, 1967.

2. Constitution of India.

3. Penal Code, 1860.

4. Legal Services Authorities Act, 1987.

5. Prevention of Money-Laundering Act, 2002.

6. Assam Value Added Tax Act, 2003.

7. Van (Sanrakshan Evam Samvardhan) Adhiniyam, 1980.

8. Advocates Act, 1961.

9. Chartered Accountants Act, 1949.

10. Civil Procedure Code, 1908.