Case BriefsHigh Courts

Karnataka High Court: A Division Bench of B. Veerappa and V. Srishananda, JJ., allowed the appeal in part and confirmed impugned judgment of conviction and order of sentence.


The instant case is about the accused throwing acid on a girl as she refused to marry him. It caused grievous corrosive injuries on her face, back, hands and caused and thus, disfigured her face and body. A case was registered under Sections 326A, 326B and 307 of Penal Code, 1860 i.e. IPC. The Sessions Judge considered the oral and documentary evidence on record held that the accused is guilty beyond a reasonable doubt, convicted the accused and sentenced him to undergo life imprisonment. Assailing this, the instant present appeal was filed.


The Court noting the increase in number of acid attack crimes and absence of suitable legislation in this regard in the  Penal Code, 1860 observed that the provisions of Section 326A of IPC came to be introduced by the Legislature by Act 13 of 2013, with effect from 03.02.2013. The object of the amendment is to provide stringent punishment for crimes against women and also to provide more victim-friendly procedure in the trial of such cases and the Committee recommended making a specific provisions to award adequate punishment for such offences which cause grievous hurt by acid attack and also attempt thereof.

The Court observed under the Constitution of India, which is called ‘Bhagavad Gita’, ‘right to life’ is the fundamental right guaranteed and it is the fundamental duty of the State to protect it. An ‘acid attack’ by the accused not only caused physical injuries, but left behind a permanent scar. It is a crime against basic human rights and also violates the most cherished fundamental rights guaranteed under Article-21 of the Constitution of India.

The Court quoted the great saint and scholar of our country – Swami Vivekananda stating “the best thermometer to the progress of a nation is its treatment of its women

The Court observed that the Court cannot shut its eyes to obnoxious growing tendency of young persons like accused resorting to use corrosive substances like acid for throwing on girls, causing not only severe physical damage, but also mental trauma to young girls. In most of the cases, the victim dies because of severe burns and septicemia or even if luckily survives, it will only be a grotesque disfigured person, who even if survives, lives with mangled flesh, “hideous zombie-like appearance and often blind if acid is splashed on face and suffer a fate worse than death”. The imposition of appropriate punishment is the manner in which the Court responds to society’s cry for justice against such criminals. Justice demands that the Courts should impose punishment befitting the crime so that the Courts reflect public abhorrence of the crime.

The Court observed that In the case on hand, when the accused is tried for specific offence carved out under the Indian Penal Code for the offence of acid attack, trial Court resorted to Section 307 of IPC, having regard to gravity of offence especially after effects of the acid attack cases discussed supra. The Legislature in its wisdom carved out a separate and distinct offence punishable under Section 326A of IPC., for an action wherein the acid is used as a weapon for attacking the innocent, as is referred to supra and prescribed suitable punishment. Therefore, the action of the accused can be traced to and punished only under Section 326A of IPC and the said action of the accused cannot be tried and punished under Section 307 of IPC along with Section 326A of IPC.

The Court held “learned Sessions Judge is not justified in convicting the appellant/accused for the offence punishable under Section 307 of IPC and sentencing him to undergo imprisonment for life and to pay a fine of Rs.50, 000/- with default clause in the facts and circumstances of the case.”

The Court held “learned Sessions Judge under Section 326A of IPC and sentencing him to undergo imprisonment for life and to pay a fine of Rs. 10, 00,000/- with default clause in the facts and circumstances of the case.”

[Mahesha v. State, Criminal Appeal No. 512/2016(C), decided on 22-07-2021]

Arunima Bose, Editorial Assistant has reported this brief.


For appellants – Mr S G RAJENDRA REDDY

For Respondent- Mr S.RACHAIAH

Case BriefsSupreme Court

Supreme Court: A Division Bench of Sanjay Kishan Kaul and Hemant Gupta, JJ. reiterated that a Letter of Intent merely indicates a party’s intention to enter into a contract with the other party in future. No binding relationship between the parties at this stage emerges and the totality of the circumstances have to be considered in each case.  

The Court was deciding whether, in the facts of the case, the respondent−successful bidder who was awarded a tender by the appellant−South Eastern Coalfields Ltd., was liable for the execution of work by another contractor at the risk and cost of the successful bidder.

Factual Matrix

South Eastern Coalfields Ltd. (“Company”) floated a tender for certain works in June 2009. Bids were received and the respondent was the successful bidder. A Letter of Intent (“LoI”) was issued by the Company in October 2009 awarding the contract for a total work of over Rs 3.87 crore. In pursuance of the LoI, the successful bidder mobilised resources at site. On 28-10-2009, the Company issued a letter of site handover/acceptance certificate, which was to be taken as the date of commencement of the work.

Sometime in December 2009, the machinery deployed by the successful bidder suffered major breakdown and the work had to be suspended. After this, contractual relationship deteriorated and the Company alleged breach of contractual terms and rules and regulations applicable. The Company brought to successful bidder’s notice that they failed to submit the performance security deposit which was required to be submitted within 28 days from the date of receipt of LoI as per the terms of the tender.

The Company issued a show cause notice that they were left with no option except to terminate the work awarded to the successful bidder and get it executed by another contractor at the risk and cost of the successful bidder in terms of Clause 9 of the General Terms and Conditions of the Notice Inviting Tenders (“NIT”). Ultimately, final termination of work was carried out in April, 2010. Thereafter, the work was awarded to another contractor at a higher price and on account thereof a letter was issued by the Company to the successful bidder seeking an amount of over Rs 78 lakh being the difference in the contract value between the successful bidder and the new contractor.


The successful bidder filed a writ petition before the Chhattisgarh High Court seeking quashing of the termination letter as well as the recovery order. The High Court held that the Company was within their rights to cancel the award of work and forfeit the bid security. However, endeavour of the Company to recover the additional amount in award of contract to another contractor as compared to the successful bidder was held not recoverable. Aggrieved, the Company approached the Supreme Court.

Analysis and Observations

The task before the Court was to decide whether there was a concluded contract between the parties, the breach of which will make the successful bidder liable for execution of work by another contractor at the risk and cost of the successful bidder. Considering the conspectus of pleas put forward by the parties, the Court was of the view that it could not be said that a concluded contract had been arrived at inter se the parties.

Perusing the terms of the LoI and what it mandated the successful bidder to do, the Court concluded that none of the mandates were fulfilled except that the successful bidder mobilised the equipment at site, handing over of the site and the date of commencement of work was fixed vide letter dated 28-10-2009. The successful bidder neither submitted the Performance Security Deposit nor signed the Integrity Pact as required. Consequently, the work order was also not issued nor was the contract executed.

The Court stated that the issue of whether a concluded contract had been arrived at inter se the parties is in turn dependent on the terms and conditions of the NIT, the LoI and conduct of the parties. It reiterated the proposition that an LoI merely indicates a party’s intention to enter into a contract with the other party in future. No binding relationship between the parties at this stage emerges and the totality of the circumstances have to be considered in each case. The Court further observed:

It is no doubt possible to construe a letter of intent as a binding contract if such an intention is evident from its terms. But then the intention to do so must be clear and unambiguous as it takes a deviation from how normally a letter of intent has to be understood.

Turning then to the NIT, the Court noted that Clause 29.2 clearly stipulated that the notification of award will constitute the formation of the contract “subject only” to furnishing of the Performance Security/Security Deposit. Thus, it was clearly put as a pre-condition and that too to be done within 28 days following notification of the award. The failure of the successful bidder to comply with the requirement “shall constitute sufficient ground for cancellation of the award work and forfeiture of the bid security” as per Clause 30.2. Further, in terms of Clause 34 dealing with the Integrity Pact, the failure to submit the same would make the tender bid “as not substantially responsive and may be rejected.”


Holding that there was no concluded contract inter se the parties, the Supreme Court affirmed the High Court’s decision that all that the Company can do in the instant case is to forfeit the bid security amount and it was so directed. [South Eastern Coalfields Ltd. v. S. Kumar’s Associates AKM (JV), Civil Appeal No. 4358 of 2016, decided on 23-7-2021]

Tejaswi Pandit, Senior Editorial Assistant has reported this brief.

Case BriefsHigh Courts

Patna High Court: The Division Bench of Sanjay Karol, CJ., and S. Kumar, J., passed strict directives to complete proceedings under Section 58 of Bihar Prohibition and Excise Act, 2016 within a period of ninety days from the date of appearance of the parties.

The Bihar Prohibition and Excise Act, 2016 (Act, 2016) prohibits the manufacture, storage, distribution, transportation, possession, sale, purchase and consumption of any intoxicant or liquor, unless so allowed in terms of the Act. (Section 13). In addition to the penalty imposed for committing such an offence, Section 56 of the Act lays down the procedure for confiscation of “things” used for in the commission of such an offence.

Further, under section 58 power to issue an order of confiscation vests with the District Collector/Authorized officer, who upon receipt of the report of the seizing officer detaining such property (“things”) is required to pass an order.

Noticeably, the Court had been flooded with several petitions solely on account of non-initiation of such proceedings of confiscation or passing of illegal orders with respect thereto and also, on account of lack of parties pursing the remedies so provided under the Act, consequently, the Court was faced with following situations:-

  1. Where despite seizure, no proceedings for confiscation under Section 58 were initiated;
  2. Where such proceedings were initiated but not concluded within a reasonable time;
  3. Where the parties after obtaining interim relief for release of “things” under orders passed in different set of writ petitions, did not participate in the confiscatory proceedings;
  4. Where the order of confiscation was neither communicated nor the parties made aware of such fact, thus precluding them from filing appeal under Section 92 and Revision under Section 93 of the Act;
  5. Where proceedings initiated under Section 92/93 were not concluded within a reasonable time either on account of inaction on the part of the authority(s) or on account of non-cooperation of the private parties, be it for whatever reason.

In Md. Shaukat Ali v.  State of Bihar, (2020) 3 PLJR 927, the Court had issued the following directions to address the issues mentioned above: –

  1. The appropriate authority shall positively conclude the confiscation proceeding within next thirty days on appearance of the petitioner.
  2. If for whatever reason, such proceeding could not be concluded, in that event it shall be open for the authority to take such measures, as are permissible in law, for release of the vehicle in question by way of interim measure, on such terms as may be deemed appropriate, considering the attending facts and circumstances of the case.
  3. If eventually, the appropriate authority arrives at a conclusion that the property was not liable to be confiscated, it shall be open for the petitioner to seek damages in accordance with law and have appropriate proceedings initiated against the erring officials/officers.

The expression “reasonable delay” used in Section 58 of Chapter VI of the Act, in our considered view, necessarily has to be within a reasonable time and with dispatch, which period, in our considered view, three months time is sufficient enough for any authority to adjudicate any issue, more so, when we are dealing with confiscatory proceedings.”

In Bunilal Sah v. State of Bihar, (2020) 3 PLJR 935, the Court took notice of non-compliance of its orders by the authority concerned and had asked the State to file an affidavit as to why proceedings for contempt be not initiated. The Bench had noticed,

“It is seen that despite our order in Md. Shaukat Ali v. State of Bihar, (2020) 3 PLJR 927, and in Umesh Sah v. State of Bihar, (2020) 3 PLJR 931, the State has not initiated proceedings under the provisions of the Bihar Prohibition and Excise Act, 2016. It is a matter of record that this legislation has generated huge litigation. The docket of the Court, be it the trial court or the High Court, is now choked solely on account of such legislation. This, perhaps, is done only to protect the property from being destroyed, for there is no mechanism under the Statute or with the administration for protecting the property seized in relation to the crime registered under the said Statute…Property is left to the vagaries of weather, resulting into national loss. This we say for the reason that proceedings for confiscation, as envisaged under Section 58, were never initiated by the authority, which under the Act is the District Magistrate/Collector. It is only as a result of inaction on the part of such authorities that the owners of the vehicles/properties are constrained to approach this Court for its release.” 

Again in Diwakar Kumar Singh v. State of Bihar, 2018 SCC OnLine Pat 462, the Court directed the confiscating authority to take not of the provisions of Section 56 of the Act, 2016 and record a positive finding after hearing the petitioner as to whether when the petitioner was found or the vehicle was found to be used by a person in drunken condition and no liquor was seized from the vehicle or when the vehicle was not used for transportation of liquor, whether the provision of Section 56 of the Act would apply. The Bench stated that it shall be mandatory for the confiscating authority to decide this issue before passing any order on the confiscation proceedings. The confiscating authority shall consider the provision of Section 56 of the Act, apply his mind and pass a speaking order with regard to confiscation initiated. Without deciding the aforesaid issue as a preliminary issue, further proceedings in the confiscation proceedings shall be prohibited.

Hence, noticing that in large number of cases, position about the conclusion of the proceedings, be it under Section 58, 92 or 93 remains the same, the Bench directed that all proceedings under Section 58 must positively be initiated/concluded within a period of ninety days from the date of appearance of the parties. Further, the Bench directed:

  1. Appeal/Revision, if any, be also decided within a period of thirty days from the date of initiation, failing which the “things” (vehicle/property/ etc.) shall be deemed to have been released in terms of several orders passed by this Court.
  2. Wherever confiscatory proceedings stand concluded and parties could not file the appeal/revision within the statutory period of limitation, as already stands directed in several matters, if they were to initiate such proceedings within next thirty days, the plea of limitation would not come in their way of adjudication of such proceedings on merit.
  3. The Bench clarified that convenience of parties, especially during the time of Pandemic Covid-19 is of prime importance and it shall be open for the authority to hear the parties with the use of technology, i.e. Video Conferencing facility etc.

The Court further directed that no certified copy of the order shall be required to be placed on the file of proceedings pending or initiated under the Act, for such order is available on the official website of the High Court & can be downloaded and/or verified from there, in the times of current Pandemic Covid-19. Lastly, the Bench stated that if the authorities concerned fail to take appropriate action at the earliest and in accordance with law, within the time schedule, the vehicle/property/things liable for confiscation shall be deemed to have been released without any further reference to this Court. [Abhishek Kumar v. State of Bihar, Civil Writ Jurisdiction Case No.9247 of 2021, decided on 01-07-2021]

Kamini Sharma, Editorial Assistant has reported this brief.


For the Petitioner/s: Mr Arbind Kumar Singh, Advocate

For the Respondent/s: Mr Kumar Manish, SC-5

Case BriefsHigh Courts

Madras High Court: V. Bhavani Subbaroyan, J., while addressing the allegations of defamation, held that,

While printing and publishing matters with regard to the leaders of the Country or State, the petitioners (Newspaper) are supposed to give respect and address them accordingly.

Instant petition was filed to quash the proceedings initiated against the petitioners for an offence punishable under Sections 500, 501 of Penal Code, 1860.

Petitioner’s counsel submitted that even if the allegations made in the complaint were taken as it is, the same does not constitute defamatory allegations with respect to the act or conduct of the then Chief Minister in the discharge of her public functions and at the best, it can only be treated as personal defamation.

Hence the counsel submitted that such a complaint cannot be maintained through the City Public Prosecutor, and it does not satisfy the requirements under Section 199 (2) CrPC.

Further, the Counsel for the Government submitted that the petitioner indulged in making wild allegations against the then Chief Minister and thereby defamed her name in the eyes of the general public.

Adding to the above submission, it was stated that in the name of freedom of press, petitioners cannot make defamatory and derogatory allegations against the former Chief Minister.

Analysis, Law and Decision

Bench stated Section 199(2) of CrPC provides a special procedure with regard to the initiation of proceedings for prosecution for defamation of a public servant.

 If the defamatory statement is personal in nature, this special procedure will not apply, and it is only the concerned person who has to file the complaint in his or her individual capacity.

In Court’s opinion, the allegations based on which the criminal complaint was filed did not in any way touch upon the conduct of the aggrieved person in discharge of her public function. The said allegation can only be construed as personal defamation.

Hence the said complaint cannot be maintained since it did not satisfy the requirements of Section 199(2) of CrPC.

High Court quashed the proceedings in view of the above discussion.

While concluding the matter, the petitioner’s newspaper was directed to refrain from printing matters in a disrespectful manner.[Dr R. Krishnamurthy v. City Public Prosecutor, Crl. OP No. 3817 of 2016, decided on 12-07-2021]

Advocates before the Court:

For Petitioners: Mr S.Elambharathi

For Respondent: Mr E.Raj Thilak, Counsel for Government (Crl Side)

Case BriefsHigh Courts

Orissa High Court: A Division Bench of S. Muralidhar, CJ and S.K. Panigrahi, J., directed to ascertain the actual living conditions and medical facilities available to the leprosy patients in the State.

The instant petition under Article 226 of the Constitution of India was filed in the nature of public interest litigation seeking inter alia directions to the Opposite parties – State authorities for effective implementation of the National Leprosy Eradication Programme (NLEP) and to give directions for composite post-management treatment and eradication of leprosy form the State.


  1. Despite interventions through the National Leprosy Eradication Programme (NLEP) and integrating it with the general health system, the incidence of leprosy has not gone down.
  2. While the State of Odisha was quick to declare Odisha as leprosy free State in 2006-07, it dismantled several posts of paramedical workers and field officers that earlier existed to deal with the situation.
  3. There is a callous neglect by the State authorities to the medical and health care needs of leprosy patients as training program of a three day training program is devised to train Multi-Purpose Health Workers (MPHW) and 2 days’ training given to Block Nodal Leprosy Worker (BNLW) to convert them to LTPWs which is inadequate.
  4. Not even single counselor, dresser or health care staff has been appointed by the Government of Odisha to provide counseling services to the victims of leprosy and their family members.

The Court relied on Pankaj Sinha v. Union of India, (2014) 16 SCC 390 as the facts and prayers are very similar and laid down extensive directions

  • The Union and the States are to undertake periodical national surveys for determining the prevalence rate and new cases detection rate of leprosy and, at the same time, publish and bring the reports of the National Sample Survey of Leprosy conducted in 2010-11 and subsequent thereto into the public domain. That apart, the activities of the National Leprosy Eradication Programme (NLEP) must be given wide publicity
  • On leprosy day which is internationally observed every year on the last Sunday of January, the Union of India along with all State Governments should organize massive awareness campaigns to increase public awareness about the signs and symptoms of leprosy and the fact that it is perfectly curable by the Multi Drug Therapy (MDT). Awareness should also be spread about the free availability of MDT at all government health care facilities in the country, the prescribed course for MDT treatment and all other relevant information related to MDT. The content and information contained in the awareness programmes should discontinue to use frightening images of people disabled with leprosy and instead use positive images of cured persons sharing their experiences of being cured of leprosy;
  • The Union and the States are to ensure that drugs for management of leprosy and its complications including the MDT drugs are available free of cost and do not go out of stock at all Primary Health Centres (PHCs) or, as the case may be, public health facilities in the country;
  • All-year awareness campaigns should also be run, by the Union as well as the States, to inform the citizenry that under the National Leprosy Eradication Programme (NLEP), treatment is provided free of cost to all leprosy cases diagnosed through general health care system including NGOs
  • The Union and the States must organize seminars at all levels which serve as platforms to hear the views and experiences directly from the former patients and their families as well as doctors, social workers, experts, NGOs and Government officials;
  • The awareness campaigns must include information that a person affected by leprosy is not required to be sent to any special clinic or hospital or sanatorium and should not be isolated from the family members or the community. The awareness campaigns should also inform that a person affected with leprosy can lead a normal married life, can have children, can take part in social events and go to work or school as normal. Acceptability of leprosy patients in the society would go a long way in reducing the stigma attached to the disease;
  • Health care to leprosy patients, at both Government as well as private run medical institutions, must be such that medical officials and representatives desist from any discriminatory behaviour while examining and treating leprosy patients. Treatment of leprosy should be integrated into general health care which will usher in a no-isolation method in general wards and OPD services. In particular, it must be ensured that there is no discrimination against women suffering from leprosy and they are given equal and adequate opportunities for treatment in any hospital of their choice. To this effect, proactive measures must be taken for sensitization of hospital personnel;
  • Patients affected with leprosy, for whom partial deformity can be corrected by surgery, should be advised and provided adequate facility and opportunity to undergo such surgeries;
  • The possibility of including leprosy education in school curricula so as to give correct information about leprosy and leprosy patients and prevent discrimination against them should be explored;
  • The Union and the State Governments must ensure that both private and public schools do not discriminate against children hailing from leprosy affected families. Such children should not be turned away and attempt should be made to provide them free education;
  • Due attention must be paid to ensure that the persons affected with leprosy are issued BPL cards so that they can avail the benefits under AAY scheme and other similar schemes which would enable them to secure their right to food;
  • The Union and the States should endeavour to provide MCR footwear free of cost to all leprosy affected persons in the country;
  • The States together with the Union of India should consider formulating and implementing a scheme for providing at least a minimum assistance, preferably on a monthly basis, to all leprosy affected persons for rehabilitation;
  • The Union and the State Governments must proactively plan and formulate a comprehensive community-based rehabilitation scheme which shall cater to all basic facilities and needs of leprosy affected persons and their families. The scheme shall be aimed at eliminating the stigma that is associated with persons afflicted with leprosy.
  • The Union Government may consider framing separate rules for assessing the disability quotient of the leprosy affected persons for the purpose of issuing disability certificate in exercise of the power granted under the Rights of Persons with Disabilities Act, 2016

The Court directed “Director, Health Services, Odisha should specifically address the above issues and place before this Court by the next date by way of an affidavit the complete up to date statistics regarding (a) prevalence of leprosy of both varieties (b) status of compliance with each of the directions issued in Pankaj Sinha as far as Odisha is concerned (c) Status of availability of treatment, beds, drugs (including MDT) at the various hospitals, PHCs, health care centres in urban and rural locations (d) status of filling up of vacant posts of medical officers and staff.”

 The case was next listed for 02-09-2021.[Bipin Bihari Pradhan v. State of Odisha, W.P.(C) No.13403 of 2015, decided on 14-07-2021]

Arunima Bose, Editorial Assistant has reported this brief.


For Petitioner- Mr B.K. Ragada

Opposite Parties- Mr M.S. Sahoo

Case BriefsHigh Courts

Gujarat High Court: The Division Bench of Bela M. Trivedi and Bhargav D. Karia, JJ., dismissed a petition which was filed with the sole purpose of securing an appropriate order, direction and/or writ directing the authority to permit the petitioners and its members to perform Dokhmenashini/last rites in Dokhmas of its member having died due to Covid 19, in accordance with their religious practices which is duly protected by the Constitution of India.

It was the case of the petitioners that for the last more than 3000 years the Parsee community as per their religious mandate, laid out the deceased in a secluded place known as “Dakhmas” (the Tower of Silence). Respondent 1 had issued guidelines on 15-3-2020, namely “Covid-19 Guidelines on Dead Body Management”, whereby two modes i.e. either cremation or burial were identified for the disposal of the dead body, who died due to Covid-19.

As regards the religious practices of “Dokhmenashini”, it has been stated that the Parsees across India since several centuries have practised “Dokhmenashini”, wherein the dead body is kept at a height in a structure known as “Well/Tower of Silence” to be eaten by vultures and the remains being exposed to the Sun to be decomposed. The well is situated at secluded place and would be accessible to “Nasheshalars”, who handle the dead body and place it in the well. Most of the Parsees prefer Dokhmenashini for the final disposal of their dead bodies following their religious faith, however, on account of the Covid-19 Guidelines for the management of dead bodies, the Parsees are not allowed to perform their last rites Dokhmenashini as per their religious faith.

Counsel for the petitioner, Mr Asim Pandya along with Mr Manan Bhatt submitted that Dokhmenashini is an integral part of the religious practices of the Parsee community, who are in a very miniscule minority, and that it is their fundamental right to practice their religion in accordance with their faith and belief. He further submitted that under the pretext of the impugned guidelines on Dead Body management during the Covid-19 Pandemic, the Parsees are deprived from practising their religion by not permitting the Dokhmenashini, which action is violative of the fundamental rights guaranteed to the Parsees under Articles 14, 19,21, 25, 26, and 29 of the Constitution.

Sr. Advocate Mr.Perci Kavina, who belongs to the Parsee community, was incidentally present during the course of hearing through the video conferencing and with the permission of the Court, he sought to put forth certain facts. He submitted that since last 100 years, the means of disposal of dead bodies of the Parsees is burial only. He further elaborated that the burial is neither unknown to the Parsees, nor it is considered anathematic or sacrilegious to be buried.

Advocate General Mr Kamal Trivedi for the respondent-State, ASG Mr Devang Vyas for the respondent Central Government and the Advocate Mr Dhaval Nanavati for the respondent Corporation, submitted that said guidelines were issued in the larger interest of the public to ensure that the Covid-19 Pandemic was not further spread, and the Court may not entertain such petition.

The Court clarified that it does not undertake to decide an issue unless it is a living issue. The Court explained that the impugned guidelines have been issued by the Ministry of the Health and Family Welfare Department in the wake of Covid-19 Pandemic on the management of dead bodies, in order to prevent the further spread or covid related infection. Such guidelines issued in the larger public interest considering extraordinary circumstances prevailing in the country, would take precedence over the individual interest as also over the religious faith and belief of a particular class of community.

The safety and the welfare of the State is the supreme law as comprehended in the legal maxim – “salus populi suprema lex”. Even the fundamental rights to profess, practice or propagate religion, and the right to manage religious affairs, as enshrined under Articles 25 and 26 of the Constitution of India, are subject to public order, morality and health.

The Court quoted part of the latest Supreme Courts ruling in Suo Moto case relating to holding of annual Kanwar Yatra amid Covid-19 Pandemic dated 16-07-2021 where it was held that “The health of the citizenry of India and their right to “life” are paramount. All other sentiments, albeit religious, are subservient to this most basic fundamental right”.

The Court while dismissing the petition went on to hold that impugned Guidelines issued by the Ministry of Health and Family Welfare considering the prevailing situation of Covid-19, in the larger public interest for the disposal of dead bodies by cremation or burial, could not be said to be violative of any fundamental rights of the Parsees, more particularly when such means of disposal of dead bodies is also in vogue in all parts of the country and when it is not anathematic and sacrilegious to the religious practices being followed by the Parsees.[Surat Parsi Panchayat Board v. Union of India, R/Special Civil Application No. 7585 of 2021, decided on 23-07-2021]

Suchita Shukla, Editorial Assistant has reported this brief.

Case BriefsTribunals/Commissions/Regulatory Bodies

National Company Law Tribunal, Mumbai: Coram of H.V. Subba Rao, Judicial Member and Chandra Bhan Singh, Technical Member dismissed an interlocutory application filed against a personal guarantor under Section 95 (“application by creditor to initiate insolvency resolution process”) of the Insolvency and Bankruptcy Code, 2016, finding that the Corporate Debtor concerned was not under Corporate Insolvency Resolution Process.

The instant Interlocutory Application was filed by the Financial Creditor under Section 95 of the Insolvency and Bankruptcy Code against the personal guarantor.

Further, on an enquiry from the Bench, it came out that the Corporate Debtor for which the personal guarantee had been given was not under Corporate Insolvency Resolution Process.

Hence, the present Interlocutory Application cannot be prosecuted and therefore the IA was disposed of. [Altico Capital India Ltd. v. Rajesh Patel, IA 1062 of 2021, decided on 9-07-2021]

Advocates before the Tribunal:

For the Personal Guarantor: Nausher Kohli and Yash Dhruva i/b DSK Legal

For the Creditor: Faizan Mithaiwala

Case BriefsSupreme Court

Supreme Court: A Division Bench of Dr D.Y. Chandrachud and M.R. Shah, JJ. declared that  SEBI’s consent is not mandatory for compounding of offence under Section 24-A of the Securities and Exchange Board of India Act, 1992. However, the view of the Securities and Exchange Board of India (“SEBI”) as an expert regulator must necessarily be borne in mind by the Securities Appellate Tribunal and the Court before deciding an application to compound the offence. The Court also elucidated certain guidelines for compounding under Section 24-A.

The Court was dealing with a case which concerned alleged acts of price rigging and manipulation of share prices. The task before the Court was to interpret Section 24-A in a manner that furthers the statutory role of SEBI.

The Appeal

The appellant was being prosecuted for an offence under Section 24(1) of the Securities and Exchange Board of India Act, 1992 (“SEBI Act”). The appellant sought compounding of the offence under Section 24-A. The trial court rejected the application, upholding SEBI’s objection that the offence could not be compounded without its consent. The Delhi High Court also affirmed the judgment of the trial court. Aggrieved, the appellant approached the Supreme Court.

Backdrop and Timeline

The appellant is the director and promoter of Ideal Hotels & Industries Limited (“Company”). In 1995, the Company made an Initial Public Offer (“IPO”). In June 1996, SEBI received a complaint alleging that certain Delhi/Bombay based brokers had, on the instructions of the Company, purchased its shares and that huge deliveries were kept outstanding in the grey market. Again in October 1996, a complaint alleging price rigging and insider trading in the scrip of the Company was received. After a preliminary inquiry, SEBI initiated an investigation against the Company. SEBI identified six entities who were responsible for upward movement in the scrip. These entities were directly/indirectly related to the Company and its directors, and the appellant managed their day-to-day affairs.

In November 1999, the Chairperson of SEBI appointed an Adjudicating Officer to adjudicate upon the allegations. Prior to Adjudicating Officer’s decision, SEBI also filed a criminal complaint in March 2000 before the Additional Chief Metropolitan Magistrate, Tis Hazari Court, Delhi, alleging violation of certain provisions of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995 and SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

While the proceedings were pending before the Adjudicating Officer, SEBI’s Chairperson passed an order in September 2000 under Section 11-B read with Section 4(iii) of the SEBI Act accepting the proposal of the appellant and others to make an offer to purchase the shares owned by the shareholders of the Company who are not its promoters. In compliance of the order, the promoters/directors of the Company acquired equity shares which raised their holding to the extent of about 95% of the Company (post-IPO). Thereafter, the Company also got its shares delisted from various stock exchanges.

In June 2001, the Adjudicating Officer determined, among other things, that the appellant had failed to comply with the 1997 Takeover Regulations. Penalty was accordingly levied on the appellant.

Application for compounding of offence

In October 2013, an application under Section 24-A of the SEBI Act was filed by the appellant before the trial court, seeking compounding of offence in the criminal complaint filed by SEBI since they had already purchased the shares from the public in accordance with the order of SEBI Chairperson and had paid the penalty levied by the Adjudicating Officer.

The High Powered Advisory Committee (“HPAC”) of SEBI recommended that the offence should not be compounded. By an order passed in November 2018, the trial court dismissed the compounding application. A revision petition was filed by the appellant before the Delhi High Court to challenge the order of the trial court which was dismissed in April 2019.

Analysis and Observations

Compounding of offences under S. 24-A of SEBI Act

The Court noted that Section 24-A, which provides for the compounding of certain offences, contains certain characteristic features which need to be understood while interpreting its provisions:

(i) Section 24-A begins with a non-obstante clause, “notwithstanding anything contained in the Code of Criminal Procedure 1973”;

(ii) any offence punishable under the SEBI Act can be compounded, provided it is not an offence which is punishable only with imprisonment or with imprisonment and fine. Therefore, only where a fine is an alternative to imprisonment does the provision apply;

(iii) the offence may be compounded either before or after the institution of any proceeding; and

(iv) the offence may be compounded by Securities Appellate Tribunal (“SAT”) or by a Court, before which such proceedings are pending.

The Court further recorded that Section 24-A provides for the compounding of an offence either before or after the institution of any proceeding. It was observed:

[O]nce a proceeding has been instituted before a Court which is seized of it, it is the imprimatur of the Court that is required in such a situation. The expression ‘or a court before which such proceedings are pending’ would indicate that once proceedings have been instituted before it, the Court has exclusive jurisdiction to compound offences.

For a better understanding of practical implications of the language of Section 24-A, the Court referred to certain circulars issued by SEBI. After so referring, the Court concluded that:

(i) A party can seek compounding under Section 24-A at any stage once the criminal complaint has been filed by SEBI;

(ii) the party shall have to file the application for compounding before the Court where the criminal complaint is pending;

(iii) a copy of the application for compounding must also be sent to SEBI, which will place it before the High Powered Advisory Committee (“HPAC”); and

(iv) the HPAC’s decision on the application, be it an acceptance or an objection, shall be placed by SEBI before the appropriate court, which will have to pass appropriate orders.

The Court was of the opinion that:

Hence, this makes it abundantly clear that while the HPAC’s decision on a party’s application for compounding under Section 24-A must be placed before the appropriate Court, the final decision must remain in the domain of the Court.

However, since SEBI argued that its consent must be deemed mandatory for compounding an offence under Section 24-A, the Court also independently evaluated the argument on its merits.

24-A of SEBI Act not trammeled by S. 320 CrPC

Section 320 CrPC permits compounding of offences. The Court highlighted that Section 24-A of the SEBI Act commences with a non-obstante provision which operates notwithstanding anything contained in CrPC. Sub-sections (1) and (2) of Section 320 CrPC deal with compounding of offences under IPC, while sub-section (9) stipulates that no offence shall be compounded except as provided in the Section. However, the stipulation contained in sub-section (9) of Section 320 ceases to have effect in relation to the compounding of offences under the SEBI Act by virtue of a specific non-obstante provision contained in Section 24-A providing for the compounding of offences punishable under that legislation. Section 24-A, by incorporating a non-obstante provision indicates a legislative intent to the effect that the power to compound offences punishable under the SEBI Act is not trammeled by the provisions of Section 320 CrPC.

Consent of SEBI not mandatory

Noting that the plain language of Section 24-A does not provide for the consent of SEBI, the Court observed that:

The issue is whether this Court should read the requirement of the consent of SEBI into the provision, on the ground that this is a casus omissus.

The Court was of the clear opinion that this would amount to rewriting the statutory provision by introducing language which has not been employed by the legislature. Reliance was placed on Union of India v. Rajiv Kumar, (2003) 6 SCC 516.

It is evident, said the Court, that Section 24-A does not stipulate that the consent of SEBI is necessary for the SAT or the Court before which such proceedings are pending to compound an offence. Where Parliament intended that a recommendation by SEBI is necessary, it has made specific provisions in that regard in the same statute. The Court held that:

Hence, it is clear that SEBI’s consent cannot be mandatory before SAT or the Court before which the proceeding is pending, for exercising the power of compounding under Section 24-A.

While so declaring, the Court observed that it is also important to remember that proceedings for the trial of offences under the SEBI Act are initiated on a complaint made by SEBI by virtue of Section 26 of the SEBI Act. SEBI is a regulatory and prosecuting agency under the legislation. Hence, while the statutory provisions do not entrust SEBI with an authority in the nature of a veto under the provisions of Section 24-A, it is equally necessary to understand the importance of its role and position.

Interpretation of S. 24-A that furthers statutory role of SEBI

The Supreme Court referred to a consistent line of precedent, where the Court has been mindful of the public interest that guides the functioning of SEBI and has refrained from substituting its own wisdom over the actions of SEBI. Its wide regulatory and adjudicatory powers, coupled with its expertise and information gathering mechanisms, imprints SEBI’s decisions with a degree of credibility. The Court was of the view that:

The powers of the SAT and the Court would necessarily have to align with SEBI’s larger existential purpose.

Therefore, the task before the Court was to interpret Section 24-A in a manner that furthers the statutory role of SEBI, rather than one which thwarts its considered course of action.

In Court’s opinion, while the statute has entrusted the powers of compounding offences to the SAT or to the Court, as the case may be, the view of SEBI as an expert regulator must necessarily be borne in mind by the SAT and the Court, and would be entitled to a degree of deference. It was held:

[B]efore taking a decision on whether to compound an offence punishable under Section 24(1), the SAT or the Court must obtain the views of SEBI for furnishing guidance to its ultimate decision. These views, unless manifestly arbitrary or mala fide, must be accorded a high degree of deference. The Court must be wary of substituting its own wisdom on the gravity of the offence or the impact on the markets, while discarding the expert opinion of the SEBI.

Guidelines for Compounding under S. 24-A of SEBI Act

The Court noted that Section 24-A only empowers the SAT or the Court before which proceedings are pending with the power to compound the offences, without providing any guideline as to when should this take place. Hence, the Court deemed it necessary to elucidate upon some guidelines which the SAT or such Courts must take into account while adjudicating an application under Section 24-A:

(i) They should consider the factors enumerated in SEBI’s circular dated 20-4-2007 and the accompanying FAQs, while deciding whether to allow an application for a consent order or an application for compounding.

(ii) According to the circular dated 20-4-2007 and the accompanying FAQs, an accused while filing their application for compounding has to also submit a copy to SEBI, so it can be placed before the High Powered Advisory Committee. The recommendation of the HPAC is then filed before the SAT or the Court, as the case may be. As such, the SAT or the Court must give due deference to such opinion. The opinion of HPAC and SEBI indicates their position on the effect of non-prosecution on maintainability of market structures. Hence, the SAT or the Court must have cogent reasons to differ from the opinion provided and should only do so when it believes the reasons provided by SEBI/HPAC are mala fide or manifestly arbitrary.

(iii) The SAT or Court should ensure that the proceedings under Section 24-A do not mirror a proceeding for quashing the criminal complaint under Section 482 CrPC, thereby providing the accused a second bite at the cherry. The principle behind compounding is that the aggrieved party has been restituted by the accused and it consents to end the dispute. Since the aggrieved party is not present before the SAT or the Court and most of the offences are of a public character, it should be circumspect in its role. In the generality of instances, it should rely on SEBI’s opinion as to whether such restitution has taken place.

(iv) Finally, the SAT or the Court should consider whether the offence committed by the party submitting the application under Section 24-A is private in nature or it is of a public character, the non-prosecution of which will affect others at large. As such, the latter should not be compounded even if restitution has taken place.


The Court was of the view that the nature of allegations in the instant case involved serious acts which impinged upon the protection of investors and the stability of securities’ market. Alleged acts of price rigging and manipulation of prices of shares have a vital bearing on investors’ wealth and orderly functioning of securities market.

It was held that SEBI was justified in opposing the request for compounding of offences. The decision which has been taken by SEBI was not mala fide nor did it suffer from manifest arbitrariness. Having due regard to the nature of the allegations, the Court held that an order for compounding was not warranted. Therefore, judgment of the Delhi High Court was affirmed, though for different reasons as discussed above. [Prakash Gupta v. SEBI, Criminal Appeal No. 569 of 2021, decided on 23-7-2021]

Tejaswi Pandit, Senior Editorial Assistant has reported this brief.

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): Dr S.M. Kantikar (Presiding Member) while addressing an allegation of medical negligence, remarked that,

At times, the professional is confronted with making a choice between the devil and the deep sea and he has to choose the lesser evil.

The medical professional is often called upon to adopt a procedure that involves a higher element of risk, but which he honestly believes as providing greater chances of success for the patient rather than a procedure involving lesser risk but higher chances of failure.


Patient, the wife of the complainant was under regular observation in Civil Hospital during her pregnancy. On her complaint of labour pains, she was admitted to the Kalka Nursing Home and remained under observation and then was referred to OP-1. OP-2 performed a caesarean section and a baby girl was delivered.

Complainant submitted that after her operation, the patient developed pain and she and she became critical and unconscious; therefore, the OP-2 referred the patient to PGI Chandigarh without providing any medical attendant. The patient died on the way, and she was brought back to the OP-1 hospital.

Complainant filed a consumer complaint while alleging that medical negligence on the part of the OP-1 and OP-2 caused the death of his wife.

District Forum had allowed the complaint and ordered the OPs to pay jointly and severally a lump sum compensation of Rs 5,00,000.

State Commission also upheld the District Forum’s decision.

Being aggrieved with the above decision, OPs 1 and 2 filed the revision petition.

Main allegation of the Complainant was that the cause of death of his wife was either due to spinal shock because of excessive anaesthesia or mismanagement while applying anaesthesia or excessive bleeding at the time of delivery which the OP-2 failed to control.

Coram relied on the decision of Supreme Court in Jacob Mathew v. State of Punjab, (2005) 6 SCC 1.

The medical practitioner faced with such an emergency always tries his best to redeem the patient out of his suffering. No sensible professional would intentionally commit an act or omission which would result in loss or injury to the patient. 

Commission observed that a mere deviation from normal professional practice is not necessarily evidence of negligence. Also, mere accident is not evidence of negligence. So also, an error of judgment on the part of a professional is not negligence per se.

In view of the facts and circumstances of the present matter, Coram held that merely because the medical practitioner chose to follow one procedure and not another and the result was a failure cannot be held as a negligent act.

Commission opined that the patient was in an advanced stage of labour and it was an emergency, so OP-2’s decision was correct to perform an emergency Caesarian operation to save the life of the patient and foetus.

The duty of treating doctor is to decide the method of treatment depending upon the condition of the patients and the circumstances of each case, thus it cannot be construed as medical negligence.

The commission while concluding the decision set aside the orders of both the lower fora and revision petition was allowed. [J.N. Shori multi-speciality Hospital v. Krishan Lal, Revision Petition No. 2988 of 2012, Decided on 23-07-2021]

Advocates before the Court:

For Petitioners: Mr Abhineet Taneja, Advocate
For Respondent 1: Mr Bharat Swaroop Sharma, Advocate

For Respondent 2: Dr Sushil Kumar Gupta, Advocate

Case BriefsHigh Courts

Calcutta High Court: Rajasekhar Mantha, J., held that,

To compel a senior citizen to approach either a civil court (the jurisdiction of which is any way barred under Section 27 of the 2007 Act) or take recourse to a special Statute like the 2007 Act would in most cases be extremely erroneous and painful for a person in the sunset days of life.

It is well settled that children and their spouses living in the senior citizen’s house are at best “licensees”. It is also stated that the said license comes to an end once the senior citizens are not comfortable with their children and their families.

The above-said principle was followed by the Delhi High Court in Sandeep Gulati v. Divisional Commissioner, WP (C) 2761 of 2020 and Punjab and Haryana High Court in Manmohan Singh v. UT Chandigarh, Case No. 1365 of 2015; Samsher Singh v. District Magistrate, U.T. Chandigarh (Case No. 2017 CWP 6365) and Gurpreet Singh v. State of Punjab, Case No. 2016 (1) RCR (Civil) 324.

Issues for consideration:

  • Availability of alternative remedy under the provisions of the Maintenance and Welfare of Parents Senior Citizens Act, 2007.
  • Right of a daughter-in-law of residence to be provided by either the husband or the father-in-law, if directed by a competent court under the provisions of the Domestic Violence Act, 2005.

Supreme Court in S. Vanitha v. Deputy Commissioner, 2020 SCC OnLine SC 1023, expressed that since both, the Senior Citizens Act, 2007 as also the Domestic Violence Act, 2005 are special legislations, the two must be construed harmoniously and applied suitably by a writ court hearing a plea of the senior citizens that they do not want their children to live with them. In the said decision, Supreme Court elaborately dealt with the principle under the headline “E. Harmonising competing reliefs under the PWDV Act 2005 and Senior Citizens Act 2007”.

In the present matter, since no right of residence was sought by the daughter-in-law, the Court opined that there was no impediment in allowing exclusive residentiary rights to the senior citizens to direct eviction of son and daughter-in-law.

Therefore, while concluding, the High Court stated that the right of a senior citizen to exclusively reside in his own house, must be viewed from the prism of Article 21 of the Constitution of India.

Further, the Court added that the principle of alternative remedy cannot be strictly applied to Senior Citizens and a Writ Court must come to the aid of a Senior Citizen in a given case.

A nation that cannot take care of its aged, old and infirm citizens cannot be regarded as having achieved complete civilization.

In view of the above discussion, petition was disposed of.[Ramapada Basak v. State of West Bengal, WPA 10835 of 2021, decided on 23-07-2021]

Advocates before the Court:

Mr. Sobhan Majumder
… … for the petitioners

Mr. Raja Saha Mr. Simanta Kabir

… for the State

Case BriefsSupreme Court

Supreme Court: A 3-Judge Bench of L. Nageswara Rao, S. Abdul Nazeer and M.R. Shah, JJ. dismissed a batch of miscellaneous applications filed by Telecom Service Providers (“TSPs”) for allowing rectification of clerical/arithmetical errors in computation of Adjusted Gross Revenue dues (“AGR dues”).

The instant applications were filed for modification of Court’s earlier judgment in Union of India v. Assn. of Unified Telecom Service Providers of India, (2020) 9 SCC 748.


In Union of India v. Assn. of Unified Telecom Service Providers of India, (2020) 3 SCC 525, the Supreme Court considered the definition of “gross revenue” as defined in Clause 19.1 of the license agreements between the Government of India and TSPs. In Mandar Deshpande, In re, 2020 SCC OnLine SC 758, the Court observed that an attempt was made by TSPs to wriggle out of the judgment in Assn. of Unified Telecom Service Providers of India, (2020) 3 SCC 525 in the guise of seeking reassessment and recalculation of AGR dues. The Court was of the firm opinion that there was no scope for raising any further dispute with respect to AGR dues. It was also mentioned that the calculations made and the amount to be recovered as stated in the earlier judgment shall be treated to be final and no recalculation and self-assessment can be undertaken.

In Union of India v. Assn. of Unified Telecom Service Providers of India, (2020) 9 SCC 748, among other things, it was directed that:

That for the demand raised by the Department of Telecom in respect of the AGR dues based on the judgment of this Court, there shall not be any dispute raised by any of the Telecom Operators and that there shall not be any reassessment.


The grievance of the applicants was that the judgment in Assn. of Unified Telecom Service Providers of India, (2020) 9 SCC 748, needs clarification as even calculation errors cannot be rectified by the Union of India in view of that judgment. It was submitted that a scrutiny of the accounts revealed that certain arithmetical errors have arisen due to inadvertence on the part of the Department of Telecommunications while computing these dues. It was contended that even as per directions made in the earlier judgment, there is no prohibition from seeking rectification of inadvertent errors committed in calculation of AGR dues; and that the applicants should not be made to suffer for certain calculation errors made by the Union of India.


The Supreme Court was of the view that though the instant applications appeared to be innocuous at first blush, the end result of the relief sought by the applicants in the guise of correction or rectification of the defects or arithmetical errors in calculation of AGR dues, would be recalculation which would amount to alteration in AGR dues as specified in Mandar Deshpande, 2020 SCC OnLine SC 758.  It was observed:

The dispute relating to AGR dues had remained pending in courts for a very long period of time and bearing this in mind, this Court was at pains to emphasize, at the cost of repetition, that the AGR dues payable by TSPs cannot be the subject matter of any future litigation. The order in Mandar Deshpande, 2020 SCC OnLine SC 758 makes it clear that there is no scope for any recalculation/re-computation of AGR dues.

Opining that there was no room for any doubt so as to warrant a modification in its earlier judgment, the Supreme Court said that the instant miscellaneous applications were misconceived and therefore dismissed. [Union of India v. Assn. of Unified Telecom Service Providers of India, MA No. 83 of 2021, decided on 23-7-2021]

Tejaswi Pandit, Senior Editorial Assistant has reported this brief.

Case BriefsTribunals/Commissions/Regulatory Bodies

Appellate Tribunal for Electricity (APTEL): The Coram of Manjula Chellur (Chairperson) and Ravindra Kumar Verma, Technical Member (Electricity) allowed an appeal which was filed against the Order of Karnataka Electricity Regulatory Commission (Commission) whereby, the Commission has held that the Applicant/Appellant was not entitled to extension of time for commissioning of solar power project in terms of the Power Purchase Agreement and Supplementary power Purchase Agreement.

Two applications, one for condonation of delay in re-filing the Appeal and the other for condonation of delay in filing the Appeal were filed.

The Applicant/Appellant submitted that during the pendency of the petition before the Commission, the Solar Power Developers (SPD) had formed an Association i.e., “Land Owned Farmers Solar Power Plants, Karnataka” with the aim of addressing the grievances of the SPD’s who were all part of the Land Owning Farmer scheme introduced by the State of Karnataka and he was the member of the said association. After the impugned order was passed on 28-08-2018, the said Association followed up the matter with the Central and State Governments seeking their intervention in the matter as the Commission had reduced the tariff to Rs.4.36/- from Rs.8.40/- in a few of the petitions disposed by the Commission. The Applicant/Appellant further submitted that he approached a Chennai based Advocate, who took five months time to look into the matter i.e., from September 2018 to January 2019. The said Advocate first suggested to file first appeal and later suggested to file a review petition before the Commission with other documents. Thereafter, he approached Advocate in Bangalore to file a review petition before the Commission, which again took two months of time. Finally, on 08.03.2019, when the Applicant/Appellant approached the Bangalore based Senior Advocate, he was advised by the Senior Advocate to file an appeal before this Tribunal instead of the review petition before the Commission. Thereafter, it took four months time to prepare the appeal and to procure additional documents as suggested by the Advocate. Appeal was finalised, on 27-07-2019 the appeal was sent to the practicing advocate in New Delhi, who filed the appeal before this Tribunal on 23-08-2019. The delay in filing the appeal was explained as above.

The Tribunal observed that this was not an Appeal against rejection of total claim of the Appellant. According to Appellant, on account of reason of force majeure, i.e. reasons beyond the control of the applicant/Appellant, there was delay in filing the Appeal, since they were hoping to get a favourable response from the authorities to resolve the problems faced by the Appellant like other project proponents.

The Tribunal noticed that since the power plant of the Appellant was commissioned with some delay, which according to Appellant amounts to force majeure, there is reduction of tariff that was agreed to be paid in terms of PPA. The Tribunal was of the opinion that delay of 106 days in re-filing as well as 315 days in filing the Appeal can be condoned. The Tribunal set aside the impugned order stating that no prejudice would be caused to the parties as the matter will ultimately be decided on merits.[Anjinamma v. Bangalore Electricity Supply Co. Ltd., DFR No. 2267 of 2019 & IA Nos. 1592 & 1594 of 2019, decided on 16-07-2021]

Suchita Shukla, Editorial Assistant has reported this brief.

Case BriefsHigh Courts

Uttaranchal High Court: Ravindra Maithani, J., decided on a petition which was filed seeking transfer of investigation in the case arising out from FIR No. 261 of 2021, under Section 302 Penal Code, 1860, Police Station Haldwani, District Nainital from Police to Central Bureau of Investigation (“CBI”).

The petitioner, on 03-03-2021, had lodged a report under Sections 323, 504, 345 IPC and Section 9 read with 10 of the Protection of Children from Sexual Offences Act, 2012 (POCSO) against her husband and pursuant to which he was arrested and lodged at Police Station. He was remanded to judicial custody on 05-03-2021 by the court of Additional District Judge/FTC/Special Judge, POCSO. On 06-03-2021, in the hospital of Sub-Jail, Haldwani, in its OPD register an entry was made that he suddenly fell down on the ground and he was referred to Base Hospital and later it was recorded that he was brought dead. His post mortem report suggested that there were ten injuries on his body which was not the case when he was taken into custody.

The petitioner was informed about the death but the reason for injury was not explained to her.

Petitioner thereafter moved an application to the Secretary, District Legal Services Authority (for short, “DLSA”), Nainital giving details as to how her husband died in judicial custody, who killed him and how the petitioner came to know about it. The Secretary, DLSA forwarded the application to SSP for taking necessary action at the earliest. Instead of lodging an FIR, the SSP, Nainital got an inquiry conducted by Circle Officer Police, Haldwani and thereafter, informed the Secretary, DLSA that since Magisterial inquiry is underway, any further action may be taken only after the perusal of the Magisterial inquiry.

The petitioner again approached the Magistrate of competent jurisdiction under Section 156 (3) of the Code of Criminal Procedure, 1973 and an order was passed, thereafter, FIR under Section 302 IPC at Police Station has been lodged against four named Guards of Sub-Jail, Haldwani. In this case, the petitioner seeks transfer of the investigation to CBI.

Advocate General argues that there is no provision of law that authorizes SSP to get an enquiry conducted by C.O. Haldwani. He further argued that investigation in accordance with law is underway, therefore, the Court should be slow in interfering at this stage and after the outcome of the investigation, if occasion arises, the matter may be considered.

The Court observed that the FIR in the instant case was lodged after directions under Section 156 (3) of the Code on 26.05.2021. More than 45 days after death of a person in judicial custody. How can a fair investigation be ensured?

Fair investigation and fair trial are necessary ingredients of right to life. It is true that a party may not choose investigating agency at the drop of a hat.

The Court in this aspect relied on the Supreme Court rulings of State of M.P. v. Shyamsunder Trivedi, (1995) 4 SCC 262, D.K. Basu v. State of West Bengal, (2015) 8 SCC 744, Sube Singh v. State of Haryana, (2006) 3 SCC 178, Lalita Kumari v. Government of Uttar Pradesh, (2014) 2 SCC 1 and Mehboob Batcha v. State, (2011) 7 SCC 45.

The Court stressed that it was needless to say that incidences of custodian violence and deaths have come up again and again for adjudication before the higher Courts.  The Court quoted the part of judgment in the case of Inhuman Conditions in 1382 Prisons, In Re., (2017) 10 SCC 658.

“Like most societies, we are not strangers to custodial violence and unnatural deaths but our vibrant democracy permits us to debate and discuss these issues with rational arguments. However, right sounding noises critical of custodial violence (in any form) cannot achieve any useful purpose unless persons in authority hear the voices of the victims or the silence of the dead and act on them by taking remedial steps. There must be a greater degree of sensitivity among those in authority with regard to persons in custody and it has been the endeavour of the constitutional courts in our country, over several decades, to consistently flag this issue.”

The Court relying on Dr Naresh Kumar Mangla v. Anita Agarwal, 2020 SCC OnLine SC 1031 stated that the power which is vested in the superior court to transfer the investigation to another agency, such as the CBI, must be wielded with caution.

The Court finally opined that the instant case was not an ordinary case. Allegations were of custodial death. Having considered the manner in which police proceeded in the case, the Court found that it is a case in which definitely investigation should be transferred to CBI. The Court further issued some directions:

  • Investigation in FIR No.261 of 2021 under Section 302 IPC, Police Station Haldwani, District Nainital be immediately transferred to S.P., Central Bureau of Investigation, Dehradun.
  • The Investigating Officer shall ensure that all the documents relating to investigation are handed over to S.P., CBI, Dehradun within a period of three days.
  • The named accused Devendra Prasad Yadav – Head Guard, Kriti Nainwal – Guard, Devendra Rawat – Guard, Harish Rawat – Guard, at Sub-Jail Haldwani be immediately transferred from Sub-Jail Haldwani to some place outside the district, so as to ensure fair investigation otherwise within those four walls of Sub-Jail Haldwani perhaps nobody would dare to speak the truth and only witness would be those stone walls which unfortunately cannot speak as to what had happened on 06.03.2021, which resulted in the death of deceased Pravesh Kumar.
  • SSP Nainital and CO Police Haldwani be considered for their transfer immediately from district Nainital.
  • Departmental action, as may be deemed appropriate, be considered to be taken against SSP Nainital who despite under legal obligation to lodge an FIR promptly did not lodge FIR and also without any authority under law directed an enquiry by CO Haldwani in a case of ‘custodial death’.

[Bharti v. State of Uttarakhand, Writ Petition (Criminal) No.924 of 2021, decided on 22-07-2021]

Suchita Shukla, Editorial Assistant has reported this brief.

Advocates before the Court:

Advocate for the petitioner: Mr Sanjay Kumar

Advocate for the respondent: Mr S.N. Babulkar, Advocate General

Case BriefsSupreme Court

Supreme Court: The Bench of Uday Umesh Lalit, Hemant Gupta and S. Ravindra Bhat, JJ., while giving major relief to homebuyers, held that rights of purchasers are the same as that of original allottees.

Appellant (builder) was aggrieved by the order of the National Consumer Disputes Redressal Commission (NCDRC).

Respondent (Purchaser) sought a direction against the builder, for a refund of the consideration amount of Rs 1,93,70, 883 received by the latter as consideration for the sale of a flat along with interest from the date different instalments were paid as well as compensation and costs.

Factual Matrix

As per the allotment letter, the possession of the flat was to be handed over within 36 months. The original allottee made payment to the tune of ₹1,55,89,329/-, for the first seven instalments as demanded by the builder.

After noticing the slow pace of construction, the original allottee decided to sell the flat. The purchaser who was in search of a residential flat was approached by her through a broker. He was assured that the possession of the flat would be delivered on time, and he agreed to purchase the flat and paid an amount of 1,00,000/- as advance towards the total sale consideration of ₹1,55,89,329/.

Further, it was submitted that the purchaser alleged that possession was not delivered in October, 2015 as promised (in the allotment letter).

Purchaser decided to wait for the possession and not to make any payment towards the sale; however, the original allottee insisted upon the execution of an agreement to sell and demanded payment of instalments, which she had made to the builder, stating that she could not wait for any further and she would forfeit the earnest money and cancel the deal.

The purchaser alleged that he made enquiries from the officials of the builder, who assured that the possession would be delivered by June 2016. Therefore, the purchaser, on 17.02.2016, entered into an agreement of sale with the original allottee, and paid an amount of ₹1,85,00,000/-.

Later, original allottee requested the builder to transfer the flat in favor of the respondent. Purchaser visited the site to acquaint himself with the extent of construction but he was denied entry by the builder’s employees citing security reasons and was informed that the possession would be delivered shortly.

But till the end of the year 2017, possession of the said flat was not delivered.

In view of the above-stated facts, the purchaser sought a refund of the amount, but was in vain. Purchaser expressed his shock on receiving the demand letter for the 11th instalment. But on refusal for the same, builder’s officials threatened the purchaser of cancellation and forfeiture of the amounts paid.

Hence, the appellant had approached the NCDRC for a direction to the builder to refund the entire amount with interest at the rate of 24%.

NCDRC ordered the following:

“…we direct the Developer to refund the amount deposited with the developer.”

Analysis, Law and Decision

Bench noted that the builder’s principal argument was that the rights of a purchaser were not the same as the original allottee.

Supreme Court expressed that the builder did not deny that upon issuance of the endorsement letter, the purchaser not only stepped into the shoes of the original allottee but also became entitled to receive possession of the flat.

Whether a subsequent purchaser is not entitled to similar treatment as the original allottee, and can be denied relief which otherwise the original allottee would have been entitled to, had she or he continued with the arrangement?

Purchasers step into the shoes of Original Allottees

An individual such as the original allottee, enters into an agreement to purchase the flat in an ongoing project where delivery is promised.

The terms of the agreement as well as the assurance by the builder are that the flat would be made available within a time- frame.

It is commonplace that in a large number of such transactions, allottees are not able to finance the flat but seek advances and funds from banks or financial institutions, to which they mortgage the property. The mortgage pay-outs start initially after an agreed period, commencing in a span of about 15 to 24 months after the agreement. This would mean that in most cases, allottees start repaying the bank or financial institutions with instalments (mostly equated monthly instalments) towards the principal and the interest spread over a period of time, even before the flats are ready.

Bench in view of the above-stated expressed that,

“…prolongation of the project would involve serious economic repercussions upon such original allottees who are on the one hand compelled to pay instalments and, in addition, quite often -if she or he is in want of a house -also pay monthly rents. Such burdens become almost intolerable.”

 Hence, allottees cannot indefinitely wait and prefer to find purchasers who might step into their shoes.


Supreme Court on perusal of the facts and circumstances of the case decided that the nature and extent of relief, to which a subsequent purchaser can be entitled to, would be fact dependent.

Adding to the above, Court elaborated that, it cannot be said that a subsequent purchaser who steps into the shoes of an original allottee of a housing project in which the builder has not honoured its commitment to deliver the flat within a stipulated time, cannot expect any – even reasonable time, for the performance of the builder’s obligation. Such a conclusion would be arbitrary, given that there may be a large number- possibly thousands of flat buyers, waiting for their promised flats or residences; they surely would be entitled to all reliefs under the Act.

Since the purchaser agreed to buy the flat with a reasonable expectation that delivery of possession would be in accordance within the bounds of the delayed timeline that he had knowledge of, at the time of purchase of the flat.

Therefore, in the event the purchaser claims refund, on an assessment that he too can (like the original allottee) no longer wait, and face intolerable burdens, the equities would have to be moulded. Hence, it would be unfair to assume that the purchaser had knowledge of the delay.

The equities, in the opinion of this court, can properly be moulded by directing refund of the principal amounts, with interest @ 9% per annum from the date the builder acquired knowledge of the transfer, or acknowledged it.

In view of the above discussion, the order of the NCDRC was modified. [Laureate Buildwell (P) Ltd. v. Charanjeet Singh, Civil Appeal No. 7042 of 2019, decided on 22-07-2021]

Case BriefsHigh Courts

Rajasthan High Court: Dinesh Mehta, J., dismissed a petition which was filed aggrieved by the denial of compassionate appointment by communication dated 07-01-2020, as he had fathered a third child after the cut-off date i.e. 01-06-2002.

The petitioner’s father was working with the respondent – department and had died in harness on 29-06-2019. In the month of July, 2019 the petitioner had applied for an appointment on the compassionate ground under Rajasthan Compassionate Appointment of Dependents of Deceased Government Servant Rules, 1996 (‘Rules of 1996’).

His request for a compassionate appointment had been turned down by the respondents as the petitioner had more than two children after the cut off date (01-06-2002).

Mr Anil Vyas, counsel for the petitioner, argued that the respondents had erred in rejecting petitioner’s candidature, as the ineligibility based on number of children has not been provided in the Rules of 1996. he further added that the Rules of 1996 have an overriding effect on all other rules and thus, disqualification on account of birth of third child after the cut off date cannot be an impediment in petitioner’s way of getting an appointment under the Rules of 1996. It was further argued by Mr Vyas that the petitioner had given one of his children in adoption on 04-12-2019 and thus, the disqualification, if any, does not continue anymore.

The Court slashed down the second contention of petitioner’s child been given in adoption stating that the same had been done on 04-12-2019, concededly after the death of deceased – employee and that too after submitting an application under the Rules of 1996 and this was nothing but an attempt to overcome the disqualification/ineligibility, which was attached with the petitioner. The Court further opined that petitioner having been given one child in adoption does not obliterate or remove the disqualification. The disqualification is based on the event or incident of giving birth to a third child. It is not based on number of living/existing children on the date of submitting application.

The Court perused Rule 7 of the Rules of 1996 and firmly held that a dependent has to fulfil general conditions prescribed in the relevant service rules to be eligible for appointment and since the petitioner has given birth to a third child after the cut off date, he fails to satisfy general conditions of the Rules of 2014.

The Court dismissed the petition holding that no illegality had been committed by the respondents rejecting the petitioner’s candidature for appointment on the compassionate ground under the Rules of 1996.[Shankar Lal Meena v. State of Rajasthan, S.B. Civil Writ Petition No. 7256 of 2021, decided on 20-07-2021]

Suchita Shukla, Editorial Assistant has reported this brief.

Case BriefsSupreme Court

Supreme Court: The Division Bench of Dhananjaya Y Chandrachud* and M R Shah, JJ., affirmed the judgment of Bombay High Court wherein the Single Judge had held that where the suit appears from the statements in the plaint to be barred by any law, the defects are not curable.

Background Facts

The case of the appellant-plaintiff was that he had purchased the suit property by obtaining loans from defendant 1 and defendant 2 on the condition that the sale deed for plot 23A and 24 would be executed and registered in the names of the first and second defendants, while the sale deed for the remaining plots would be in the joint names of the first and second defendants and the plaintiff. The plaintiff claimed to have been placed in exclusive possession of the entire suit property and it was his case that the names of the first and second defendants were incorporated in the sale deed only for security for the repayment of the loan. According to the plaintiff, the defendants had illegally given beat/assault and had interfered with peaceful possession of the plaintiff. It was contended that though certain amounts were paid to the first and second defendants pursuant to a compromise, they had refused to execute a sale deed in return and had recovered an amount of Rs. 50 lacs from him under the garb of a compromise.

Rejection of Suit under Order 7 Rule 11 (b) and (d)

The suit instituted by the appellant-plaintiff before the Trial Court had been rejected under clauses (b) and (d) of Order 7 Rule 11 of the CPC on the ground that the plaintiff had admitted the execution of sale deeds in favour of the first and second defendants. Despite this, no declaration of invalidity had been sought in regard to the sale deeds as the plaintiff did not seek the cancellation of the sale deeds on the ground that they were executed only as a security for the loan transaction. Further, no declaration was sought by the plaintiff to the effect that the sale deeds did not confer any right, title or interest on the defendants. Hence, the suit would be barred by Section 34 of the Specific Relief Act 1963.

The moot issue of the case was, though the Trial Court allowed the application filed by defendant 1 under clauses (b) and (d) of Order 7 Rule 11 of the CPC, however, while doing so, the appellant was “directed to seek proper relief and pay court fee thereon within 15 days, otherwise appropriate order will be passed”.

Findings of the High Court

The impugned order of the Trial Judge, insofar as it permitted the appellant to carry out an amendment for seeking appropriate reliefs was assailed before the High Court of Judicature at Bombay in a revision application by the defendants. Also, the plaintiff-appellant had challenged the order of the Trial Court allowing the application under Order 7 Rule 11 of the CPC by a writ petition.

The High Court decided both the civil revision application and the writ petition by a common judgment. The Single Judge held that since the plaint was rejected under Order 7 Rule 11(d) there was no occasion to direct that an amendment be made to the plaint. Therefore, the revision application was allowed and the writ petition filed by the appellant was held to be an “after thought and belated” and no relief was granted to the appellant. The High Court,  by its impugned judgment and order held that:

  1. “It was necessary for the plaintiff to seek a declaration that the sale deeds were executed merely as a security for the repayment of the loan and a failure to seek such a declaration would come within the purview of the proviso to Section 34 of the Specific Relief Act 1963;
  2. The Trial Court having allowed the application under Order 7 Rule 11(d) of the CPC committed an error in granting time to the plaintiff to amend the plaint to seek proper relief and pay court fees. Where the rejection of the plaint takes place under Order 7 Rule 11(d), there would be no question of granting time to the plaintiff to rectify the defects in the plaint. Where the suit appears from the statements in the plaint to be barred by any law, the defects are not curable; and
  3. The challenge by the plaintiff to the order rejecting the plaint under Order 7 Rule 11(d) is without substance.”

 Whether Mere Consequential Reliefs can be sought in a Property Suit without Claiming Declaration of Title?

Pointing out Section 342 of the Specific Relief Act which indicates that, “under the proviso, no court shall make any such declaration where the plaintiff being able to seek further relief than a mere declaration of title omits to do so; the appellant contended that the proviso to Section 34 applies to a situation where a plaintiff has sought a mere declaration of title but omits to seek further or consequential relief. Therefore, when the suit had been instituted to protect his possession without claiming a declaration of title, the same should not be rejected as seeking a declaration of title is not mandatory: the appellant contended that the proviso to Section 34 provides that seeking a mere declaration of title without seeking further relief is impermissible.

Therefore, the appellant urged that the suit could not be held to be barred by Section 34 of the Specific Relief Act. It was further urged by the appellant that whether the suit would be maintainable in the absence seeking a declaration of title was a distinct question, but it could not be held to be barred by any law within the meaning of Order 7 Rule 11(d).

Analysis and Findings by the Court

Proviso of Order 7 Rule 11 provides that,

“Provided that the time fixed by the Court for the correction of the valuation or supplying of the requisite stamp-paper shall not be extended unless the Court, for reasons to be recorded, is satisfied that the plaintiff was prevented by any cause of an exceptional nature from correcting the valuation or supplying the requisite stamp-paper, as the case may be, within the time fixed by the Court and that refusal to extend such time would cause grave injustice to the plaintiff.”

Opining that the proviso of Order 7 Rule 11 deals with a situation where time has been fixed by the Court for the correction of the valuation or for supplying of the requisite stamp paper and that it evidently covers the cases falling within the ambit of clauses (b) and (c) but has no application to a rejection of a plaint under Order 7 Rule 11(d); the Bench stated that in such  circumstances, the High Court was justified in coming to the conclusion that the further direction that was issued by the Trial Judge was not in consonance with law. Accordingly, the Bench affirmed the judgment of the High Court and rejected the writ petition.

However, taking note of Order 7 Rule 13, which provides that the rejection of the plaint “on any of the grounds hereinbefore mentioned shall not of its own force preclude the plaintiff from presenting a fresh plaint in respect of the same cause of action” and that the definition of “decree” in Section 2(2) deemed to include the rejection of a plaint, the Bench held that the the order of the Trial Court rejecting the plaint is subject to a first appeal under Section 96 of the CPC. Hence, the Bench left it open for the appellant to pursue the remedy available in law.[Sayyed Ayaz Ali v. Prakash G Goyal, Civil Appeal Nos 2401-2402 of 2021 (SLP Nos. 29975-29976 of 2018, decided on 20-07-2021]

Kamini Sharma, Editorial Assistant has reported this brief.

*Judgment by: Justice Dhananjaya Y. Chandrachud

Know Thy Judge| Justice Dr. DY Chandrachud

Appearance by:

For the Appellant: Sr. Adv. Vinay Navare

For the Respondents: Adv. Pankaj

Case BriefsHigh Courts

Madras High Court: Sanjib Banerjee, J., addressed whether this Court is the appropriate forum to decide the quantum that can be forfeited and elaborated more of right to forfeit.

Instant petition was filed for issuance of a Writ of Certiorarified Mandamus calling for the records of the impugned letter issued by the respondent under Rule 9 (5) of the Security Interest (Enforcement) Rules, 2002 and quash the same and reasonable time frame to be fixed by this Court for paying the balance amount towards 75% of the balance purchase price by the petitioner.

Petitioner’s grievance was that the respondent secured creditor did not inform the petitioner of certain encumbrance pertaining to the asset sold under the Securities and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

At the bid, the petitioner had deposited only 25% of the consideration and did not pay any further.

Further, the petitioner’s case was that she tried to obtain loans to finance the purchase but was impeded by the property standing encumbered in some third party’s favour.

Another grievance of the petitioner was that the bank had purported to forfeit the consideration tendered without affording the petitioner a chance to pay the balance amount, particularly since the second surge of the pandemic stood in the way of the petitioner arranging for money.

Secured Creditor submitted that, notices were issued to the petitioner, and they had no authority to extend the payment period beyond 90 days from the date of the auction.

Adding to the above, secured creditor submitted that it had duly forfeited the amount which has been tendered by the petitioner and no question arises of the sale going through or of the consideration being returned.

Bench stated that, writ court is not the appropriate forum to adjudicate as to whether the forfeiture or the quantum thereof is appropriate and as to whether the secured creditor in this case is obliged to extend the time for making the balance payment by the petitioning-auction purchaser.

Right to Forfeit

Right to Forfeit has to be balanced against the rule against unjust enrichment.

Merely because there is a forfeiture clause does not imply that the entire amount deposited has to be forfeited.

Further, the High Court elaborating more, added that,

Forfeiture clause, like an earnest money deposit clause or a liquidated damages clause, has to be regarded as a genuine pre-estimate of the loss that may have been incurred, but when a forfeiture clause does not indicate an amount but provides that the entire amount tendered would be forfeited, it may not be permissible to forfeit, say 99% of the payment made for the default in depositing the balance 1%.

Thus, the quantum that can be forfeited will depend on the extent of the loss or damage suffered by the party, not in breach and this is, essentially, a question of fact that has to be adjudicated by an appropriate forum. The High Court, in exercise of the jurisdiction under Article 226 of the Constitution, is not such forum.

In view of the above, petition was disposed of.[Rubina v. Axis Bank Ltd., 2021 SCC OnLine Mad 2349, decided on 2-07-2021]

Advocates before the Court:

For Petitioner: Mr. Adithya
For Respondent: Mr. R. Sreedhar

Case BriefsHigh Courts

Uttaranchal High Court: The Division Bench of Raghvendra Singh Chauhan, CJ. and Alok Kumar Verma, J., decided on a petition which was in relation to the deprivation of salaries of the employees of Transport Corporation.

The Court on 29-06-2021 had issued an order asking the respondents to submit an affidavit regarding the same.

According to the said affidavit, Rs 23.00 crores were released to the Transport Corporation on 29-06-2021. Using the said amount, the salaries of the employees for the month of February, 2021, and the salaries of the “contractual employees” for the month of March, 2021 have been disbursed.

Dr. Ranjit Sinha (Transport Secretary) informed the Court that in the last meeting of the Board of Directors, a decision was taken to defer 50% of the employees’ salary for the coming months. The Court asked a pointed query to Dr. Sinha as to under what law, such a decision could be taken to defer the salaries of the employees? To this query, Dr. Sinha could not point out any provision of law that permits the Board of Directors to defer the salaries of its employees. The Court found it disturbing that a decision had been taken by the Board of Directors, which was per se contrary to and violative of Articles 21, 23 and 300A of the Constitution of India.

The Court questioned the Chief Secretary and the Transport secretary to explain as to why the State of Uttarakhand was not negotiating with the U.P. Government with regard to the amount owed by the U.P. Government to the Transport Corporation.

The Court was surprised to witness that the employee of the Transport Corporation continue to be denied their rightful monthly salaries. The Court considered the fact that these employees do not belong to the upper echelon of the Corporation, and were mere workers, as most of them happened to be drivers, conductors, and other employees, and that both the Corporation, and the State Government have abandoned them out in the cold.

The Court opined that deprivation of the salary was violative of Articles 21, 23 and 300-A of the Constitution of India. Thus, neither the Corporation nor the State Government can be permitted to deprive the employees of their rightful salaries, that too, month after month.

The Court also relied on the Supreme Court judgment in Kapila Hingorani v. State of Bihar, (2003) 6 SCC 1 where it was clearly held that the State cannot be permitted to violate the fundamental rights and the human rights of the employees. It cannot be permitted to hide behind the fig leaf to claim that the responsibility of paying the salaries of their employees is that of the Corporation, and not of the State Government. When such a contention was raised before the Apex Court, the Apex Court rejected the same. Therefore, it does not lie in the mouth of the State to claim that it will not rush to the rescue of the employees of the Corporation.

[Roadways Karamchari Sanyukt Parishad Uttarakhand v. State of Uttarakhand, WPSS No. 3735 of 2018, decided on 20-07-2021]

Suchita Shukla, Editorial Assistant has reported this brief.

Advocates before the Court:

Counsel for the petitioners: Mr M.C. Pant and Mr Shobhit Saharia

Counsel for the respondents: Mr S.N. Babulkar, Advocate General

Case BriefsTribunals/Commissions/Regulatory Bodies

Securities Exchange Board of India (SEBI): Madhabi Puri Bach, Whole Time Member, considering the alleged violations committed, issued directions restraining Global Infratech and Finance Ltd (GIFL), its two directors and 12 other individuals from the securities market for their roles in a fraudulent scheme of trading in the firm’s shares and for price manipulation.

In the instant case, upon analysis, it was observed that the Noticees were part of an alleged manipulative scheme to make preferential allotment and manipulate the benefit connected to the preferential allottees, promoters of the company and promoter related entities. In the show-cause notice, it was further alleged that there was an established nexus and meeting of minds between the noticees to inflate the price of the scrip of  GIFL and thus violated the provisions of Regulation 3(a),(b),(c),(d) and Regulation 4(1),4(2) (a), (e) of PFUTP Regulations. Furthermore, the other 33 Noticees were alleged to be connected with GIFL and were a part of the scheme to make preferential allotment, manipulate the price of the scrip and get benefit by selling the shares at an artificially inflated price. And had thus, violated the provisions of Regulation 3(a), (b), (c), (d) and Regulation 4(1) of PFUTP Regulations, 2003. GIFL and directors of GIFL at the time of preferential allotment were alleged to have violated the provisions of Regulation 3 (a), (b), (c) and (d) and Regulation 4(1) of PFUTP Regulations, since a company cannot act by itself, but only through its directors who are expected to exercise their powers on behalf of the company with utmost care, skill and diligence.

Some of the Noticees had contended that it is a well-settled law that the taint of  fraud cannot be attached or charged on preponderance of probability, and compelling evidence should be brought on record for a person/entity to be held liable for fraud

The Tribunal while assessing the preliminary objection of the Noticees, that SEBI did not provide crucial details, documents and records for the proceedings, and that the were not inspection of documents

Further, upon perusal of the SCN, I find that there is no allegation against Noticee No. 13 to 41 that the trades of Noticee No. 13 to 41 had resulted into LTP contribution, price manipulation, volume manipulation, circular trades, reversal trades, synchronized trades, etc. The only allegation in the SCN against Noticee No. 13 to 41 is that they are connected to GFIL and LTP contributors and sold shares at artificially inflated prices and thereby involved in the fraudulent schemes.

After considering a catena of SAT orders, it was of the opinion that, “there is no ‘single’ or ‘only’ test to determine the charge of price manipulation in cases wherein the primary charge is emanating from miniscule trading by the sellers over a period of time at the highest possible price on each day”. While substantiating the definition of fraud under regulation 2(1)(c), it pointed out various acts and omissions which do not presume the connection of the person committing the same with another, but are still clear violations. It stated, “… Further, regulations 3 and 4 of the PFUTP Regulations also use phrases such as no person shall use or employ, no person shall indulge, etc. and do not, at all places, stipulate the requirement of a connection between two parties to a transaction in order to establish a violation. Further, the prohibition of fraudulent dealing in securities includes an act of fraudulent buying or selling. It may be noted that the unilateral act of fraudulent buying or selling is also included in the definition of fraud under FUTP Regulations. There can be instances where artificial demand and price rise can be created choosing to buy unilaterally. Therefore, the Regulations make it clear that unilaterally by virtue of fraudulent selling alone, a person can manipulate the price of a security”. And highlighted the fact that steep price rise with meager volume followed by a sudden increase in volume at high price is not a normal market trend.

Therefore, it was held that the connected preferential allottees had sold the shares at inflated price and received substantial benefit and the directors have acted in a fraudulent manner in furtherance of a larger scheme and their acts are attributed to the Company. Resultantly, the Company and the Directors were restrained for two years and other allottees for a period of six months from accessing the securities market and buying, selling or dealing in securities, either directly or indirectly, in any manner for the period mentioned below against their name from the date of this order. Also, further restrained them from associating themselves with any listed public company and any public company which intends to raise money from the public or any intermediary.[Global Infratech and Finance Limited, In re, WTM/MB/IVD/ID6/ 12613 /2021-22, decided on 16-07-2021]

Case BriefsHigh Courts

Kerala High Court: Ashok Menon, J., directed release of a 60-year-old man convicted in 14 criminal cases taking into account that the convict had already undergone 15 years of imprisonment and would have to be in jail for more than 18 years since sentence in all the cases were running consecutively.


The petitioner, convicted in 14 criminal cases pertain to offences like theft, housebreaking, lurking house trespass by night, theft of property from inside the house, etc had approached the Court seeking order to direct his punishments run concurrently. It was the case of the petitioner that he had pleaded guilty and was convicted in all the cases for a period ranging between 6 months imprisonment to 5 years imprisonment and had been in prison since 10-04-2003.

The petitioner contended that being indulged in different cases committed at different periods of time and pending before different courts, none of the courts exercised the discretion under Section 427 CrPC to order the sentences to run concurrently. In such case, the sentences were to run consecutively one after the other, thus, he would has to remain behind bars for 30 years and 6 months. Stating his old age and ill health the petitioner stated that his continued detention was illegal and therefore, specific orders may be made directing the jail authorities to release him.

Reliance was placed by the petitioner on the decision of Supreme Court in State of Maharashtra v. Najakat, (2001) 6 SCC 311 wherein it was observed that for granting the benefit of set-off under Section 428 of the CrPC, the pre-trial detention of the accused has to be in the same case and not in a different case as is held by the Supreme Court. It was the case of the petitioner that he had pleaded guilty in all the cases and in consequence that he was awarded different sentences ranging from six months to five years of imprisonment and had been in custody now for a period of more than 15 years.

As per the report filed by the Superintendent of Central Prison & Correctional Home, after adjusting the set off granted by the Court, the remaining sentences would have to run consecutively and under those circumstances, the petitioner had not completed his term of imprisonment in all the cases.

Observation and Decision

Opining that the very fact that power under Section 482 of the CrPC is vested only in the High Court is a safeguard for the power being not abused, the Bench expressed that utmost care and caution is required while invoking the powers. Quoting its decision in Moosa v. Sub Inspector of Police, 2005 SCC OnLine Ker 605, the Bench stated, the object of exercise of power being to prevent abuse of process of court and also to secure the ends of justice, it follows that ends of justice are higher than the ends of mere law.

Reliance was placed by the Court on the Supreme Court’s decision in Benson v. State of Kerala, (2016) 10 SCC 307 wherein the Court had held that the normal rule regarding consecutive running of sentence is subject to a qualification and it is within the power of the Court to direct that the subsequent sentence shall run concurrently with the previous sentence. Accordingly, the Supreme Court had directed that sentences imposed in different theft cases should run concurrently.

Noticing that in Benson’s case the Supreme Court considered the fact that the petitioner was involved in several cases and that he would has to undergo imprisonment for three decades in case the sentences were to be undergone consecutively, the Bench opined that in the instant case, the facts were almost similar and the petitioner had already undergone more than 15 years imprisonment and the maximum imprisonment that was awarded to him in one case was only 5 years. Therefore, considering the fact that the petitioner had not even contested the cases and had pleaded guilty, in consequence of which he was sentenced to imprisonment and that he was more than 60 years old and would has to be in prison for more than 18 years, the Bench exercised jurisdiction under Section 482 of the CrPC and directed to release the accused recording that he had undergone the sentence in all the crimes in which he was convicted.[Sivanandan v. State Of Kerala, WP(C) NO. 27959 of 2017, decided on 20-07-2021]

Kamini Sharma, Editorial Assistant has reported this brief.

Appearance by:

For the petitioner: Adv.V.John Sebastian Ralph, Adv. Jefrin Manuel, Adv. K.J.Joseph Ernakulam And Adv. V.John Thomas

For the Respondent: Pp. C.S.Hritwik