Weekly Overview | Supreme Court Judgments: Aug 1 – Aug 5, 2022
|- Whether 100% Reservation can be granted to one class
1) Granting 100% Reservation To One Class Violative Of Constitution – SC Quashes Jharkhand's Decision To Grant 100% Job Quota To Locals – The Supreme Court quashed the State of Jharkhand's decision to grant 100% quota to the locals of the scheduled districts for government jobs thereby excluding those belonging to non-scheduled districts to apply for the post.
The Court also observed that citizens have equal rights and the total exclusion of others by creating an opportunity for one class is not contemplated by the founding fathers of the Constitution of India.
Cause Title – Satyajit Kumar & Ors. v. The State of Jharkhand & Ors.
Date of Judgment – Aug 2, 2022
Coram – Justice MR Shah & Justice BV Nagarathna
- Liability of directors of a company under NI Act
2) Sections 138, 141 NI Act – Liability Depends On Role Of Director In Affairs Of Co. And Not On Designation Alone – The Apex Court in a cheque dishonour case has held that the liability of directors under Section 138 read with Section 141 of the Negotiable Instruments Act would depend on the role played by the director in the affairs of the company and not on designation alone.
The Court also held that it would be a travesty of justice to drag Directors who may not even be connected with the issuance of a cheque or dishonour thereof, such as Director (Personnel), Director (Human Resources Development) etc. into criminal proceedings under the NI Act, only because of their designation.
Cause Title – Sunita Palita & Others v. M/s. Panchami Stone Quarry
Date of Judgment – Aug 1, 2022
Coram – Justice Indira Banerjee & Justice JK Maheshwari
- Property dispute over possession of land beyond entitlement
3) Possessing Land Beyond Entitlement Is Unauthorized Possession – SC Holds Possession Can Only Be Protected To Extent Of Entitlement – The Apex Court while adjudicating upon a property dispute over possession of land has held that possessing land beyond entitlement is an unauthorized possession.
The Court set aside the impugned judgment of the Kerala High Court which had held that the Plaintiffs are entitled to put up the boundary as per the Commissioner's Report beyond their entitlement i.e., in excess of 10 cents of land.
Cause Title – Raghavan Sasikumar v. Parameswaran Nadar Sathyananadhan Nadar Kanakottu Padippura Veedu and Ors.
Date of Judgment – Aug 1, 2022
Coram – Justice MR Shah & Justice BV Nagarathna
- Sudden and grave provocation – Conversion of conviction
4) Sudden And Grave Provocation Before Occurance- SC Converts Conviction From Section 302 To Part I Section 304 IPC – The Apex Court converted the conviction of the accused from Section 302 IPC to Section 304 Part I IPC holding that the accused had attacked the deceased due to grave and sudden provocation.
The Court also reduced the sentence of the accused.
In this case, the accused was convicted under Section 302 IPC for the murder of brother and was sentenced to undergo life imprisonment.
Cause Title – Dauvaram Nirmalkar v. State of Chattisgarh
Date of Judgment – Aug 2, 2022
Coram – Justice Sanjiv Khanna & Justice Bela M Trivedi
- Right of accused to cross-examine U/s. 143A NI Act
5) Failure To Deposit Interim Compensation U/s. 143A NI Act Cannot Lead To Denial Of Right To Cross Examine Witness – The Supreme Court while adjudicating upon a cheque dishonour case has held that an accused who has filed to deposit interim compensation under Section 143A of the Negotiable Instruments Act, 1881 cannot be denied the right to cross-examine the witness.
While referring to Section 143A, the Bench opined, "The concerned provision nowhere contemplates that an accused who had failed to deposit interim compensation could be fastened with any other disability including denial of right to cross-examine the witnesses examined on behalf of the complainant."
Cause Title – Noor Mohammed v. Kurram Pasha
Date of Judgment – Aug 2, 2022
Coram – Justice UU Lalit, Justice S. Ravindra Bhat, & Justice Sudhanshu Dhulia
- Reservation of posts for the disabled
6) Order Reserving Posts For Disabled Candidates Should Not Be Interfered With Unless It Is Totally Arbitrary, Irrational – The Supreme Court held hat the identification of the posts and the category of the disabled candidates is the power conferred on the appropriate Government and such exercise and the reservation of posts should not be interfered with unless such reservation is arbitrary or irrational.
In this case, an appeal was filed against an order passed by the Allahabad High Court whereby though the Government Order identifying the posts which could be manned by suitable disabled candidates under Persons with Disabilities Act, was struck down.
Cause Title – Ajay Kumar Pandey & Ors. v. State Of U.P. & Ors
Date of Judgment – Aug 1, 2022
Coram – Justice Hemant Gupta & Justice Vikram Nath
- If payment of property tax and surcharge by tenant can form part of rent amount
7) Merely Because Tenant Is Obliged To Pay Half Of Property Tax & Surcharge, It Cannot Become Part Of Rent Amount – The Supreme Court dealt with the issue whether the share of municipal tax due and payable by the tenant under Section 230 of the Kolkata Municipal Corporation Act, 1980 and Section 5(8) of the West Bengal Premises Tenancy Act, 1997 shall be included within the expression 'rent'.
The Court held merely because the obligation to pay half of the property tax and surcharge would be upon the tenant under the abovementioned statutes and the tenant is obliged to pay his share of municipal tax as an occupier of the premises and merely because for the purpose of recovery of the tax due from the tenant, such tax apportioned can be recovered as rent, such tax apportioned (half of the amount of the property tax and surcharge) cannot become part of the rent of the premises which is tenanted.
Cause Title – EIH Limited v. Nadia A Virji
Date of Judgment – Aug 1, 2022
Coram – Justice MR Shah & Justice BV Nagarathna
- Legality of action of authority exercising power beyond the jurisdiction
8) Deficiency Of Jurisdiction Of Authority Cannot Be Cured By Consent Of Parties: SC In Property Dispute – The Supreme Court observed that if an authority exercises powers despite lacking jurisdiction under a special Act, any order or decree so passed through such unlawful exercise of power, will be a legal nullity.
The Court further stated that such lack of jurisdiction of the authority cannot be cured by the consent of the parties.
Cause Title – S. Kuldeep Singh & Anr. v. Prithpal Singh
Date of Judgment – Aug 2, 2022
Coram – Justice KM Joseph & Justice Hrishikesh Roy
- Whether stay of investigation can be granted U/s. 482 CrPC
9) Stay Of Investigation Must Be Granted Only In Rarest Of Rare Cases While Exercising Power U/s. 482 CrPC – The Supreme Court while adjudicating upon appeals filed assailing the impugned judgment of the Gujarat High Court observed that grant of stay of investigation while exercising power under Section 482 CrPC can only be granted in rarest of rare cases.
In the case, the High Court while admitting the special criminal applications filed under Article 226 of the Constitution read with Section 482 of the CrPC had granted interim relief and stayed the further proceedings of respective criminal inquiry cases against the Accused.
Cause Title – Siddharth Mukesh Bhandari v. The State of Gujarat & Anr.
Date of Judgment – Aug 2, 2022
Coram – Justice MR Shah & Justice BV Nagarathna
- Whether accused has right to seek disclosure of documents used for filing complaint U/s. 77 Companies Act
10) SEBI Failed To Act Fairly – SC Directs SEBI To Disclose Documents To Reliance For Filing Complaint - The Supreme Court while allowing the appeal of Reliance Industries Limited (RIL) to gain access to certain documents used by SEBI for filing complaint against the company has held that a regulator like SEBI has a duty to act fairly.
The Bench held, "SEBI is a regulator and has a duty to act fairly, while conducting proceedings or initiating any action against the parties. Being a quasijudicial body, the constitutional mandate of SEBI is to act fairly, in accordance with the rules prescribed by law. The role of a Regulator is to deal with complaints and parties in a fair manner, and not to circumvent the rule of law for getting successful convictions. There is a substantive duty on the Regulators to show fairness, in the form of public cooperation and deference."
Cause Title – Reliance Industries Limited v. Securities and Exchange Board of India & Ors.
Date of Judgment – Aug 5, 2022
Coram – CJI NV Ramana, Justice JK Maheshwari, & Justice Hima Kohli
- Enhancing retirement age of teachers in Kerala
11) Supreme Court Refuses Plea Seeking Enhancement Of Retirement Age Of Teachers In Kerala – The Supreme Court dismissed the appeal seeking directions for the enhancement of college teachers' retirement age in Kerala in accordance with recommendations made by the University Grants Commission Regulations 2010.
The Bench upheld the order of the Kerala High Court holding that the policy of the State Government, evidenced by the statutory provisions mandating teachers of aided affiliated colleges to retire at the age of 56 years, and that of the Universities at the age of 60 years, has been crystalized by enactments under Article 309 of the Constitution of India.
Cause Title – Dr. J. Vijayan & Ors. v. The State of Kerala & Ors.
Date of Judgment – Aug 2, 2022
Coram – Justice Indira Banerjee and Justice JK Maheshwari
- Passing of order without any specific finding
12) Industrial Dispute | Order Passed Without Any Specific Findings - SC Remits Matter Back To Single Judge For Fresh Disposal – The Supreme Court while adjudicating upon an industrial dispute remitted the matter back to the Single Judge who had passed an order without any discussion or recording any specific findings on the order passed by the Labour Court.
The Court noted that that the Single Judge should have considered the writ petition preferred by the workman on merits and ought to have given some findings on the order passed by the Labour Court rejecting the 33(C) (2) application.
Cause Title – M/s Mitra S.P. (P) Ltd. & Anr. v. Dhiren Kumar
Date of Judgment – Aug 4, 2022
Coram – Justice MR Shah & Justice BV Nagarathna
- Whether entries in books of accounts of corporate debtor amount to acknowledgement under Limitation Act
13) Entries In Books Of Accounts And/Or Balance Sheets Of Corporate Debtor Would Amount To Acknowledgment U/s. 18 Limitation Act – The Supreme Court set aside the decision of the National Company Law Appellate Tribunal holding that books of account of a company could not be treated as an acknowledgment of liability in respect of debt payable to a Financial Creditor.
The Court held, "It is well settled that entries in books of accounts and/or balance sheets of a Corporate Debtor would amount to an acknowledgment under Section 18 of the Limitation Act."
Cause Title – Asset Reconstruction Company (India) Limited v. Tulip Star Hotels Limited & Ors.
Date of Judgment – Aug 1, 2022
Coram – Justice Indira Banerjee and Justice JK Maheshwari
- Filing of security documents during CIRP
14) Section 7 IBC - Security Documents Can Be Filed At Any Time Until Application For CIRP Is Dismissed – The Court while placing reliance on Dena Bank (Now Bank of Baroda) v. C. Shivakumar Reddy and Another held that documents can be filed at any time until the application for Corporate Insolvency Resolution Process is dismissed.
The Court allowed an appeal filed under Section 62 of the Insolvency and Bankruptcy Code by Kotak Mahindra Bank Limited and set aside an order of the National Company Law Appellate Tribunal and asked the NCLAT to consider Corporate Insolvency Resolution Process Application afresh.
Cause Title – Kotak Mahindra Bank Limited v. Kew Precision Parts Private Limited & Ors.
Date of Judgment – Aug 5, 2022
Coram – Justice Indira Banerjee and Justice JK Maheshwari
- Applicability of Res Judicata where cause of action is different
15) Principle Of Res Judicata Not Applicable Where Cause Of Action For Initiation Of Proceedings Is Distinctive – The Court while hearing an appeal filed against the judgment of the Madhya Pradesh High Court held that where the cause of action for initiation of proceedings is a distinctive cause of action, the principle of res judicata will not apply.
The Supreme Court noted that the issue in the earlier Petition was the legality of the award, and the issue in the later Petition was the fixation of pay and seniority, hence these were two different causes of action where the principle of res judicata would not apply and rejected the primary contention which was based on the principle and subsequently dismissed the appeal.
Cause Title – Central Bank of India & Others v. Dragendra Singh Jadon
Date of Judgment – Aug 2, 2022
Coram – Justice Indira Banerjee and Justice JK Maheshwari
- Whether under the Maharashtra Tenancy Act, the tenant can sublet, licence or assign his rights as lessee
16) Maharashtra Tenancy Act - Tenant Cannot Sublet, Licence, Assign Or Transfer Property, Subject To Contract To Contrary - While adjudicating upon a case related to tenancy rights, the Supreme Court refused to grant relief to a person seeking tenancy right over the property.
The Bench while referring to Section 26 of the Maharashtra Rent Control Tenancy Act observed that as per the general rule the tenant cannot sublet, licence, assign or transfer property subject to a contract to the contrary in which the tenant can assign, sublease or mortgage his rights as lessee.
Cause Title – Shabbir Mohammad Sayed v. Noor Jehan Mushter Shaikh & Ors.
Date of Judgment – Aug 2, 2022
Coram – Justice KM Joseph & Justice Hrishikesh Roy
- Applicability of service tax on composite works contract prior to Finance Act 2007
17) No Service Tax Can Be Levied On Composite Works Contracts Prior To Introduction Of Finance Act 2007 – The Supreme Court dealt with the issue of whether service tax could be levied on Composite Works Contracts prior to the introduction of Finance Act 2007 by which the Finance Act 1994 came to be amended to introduce Section 65(105) (zzzza) pertaining to Works Contract.
The Bench held that no service tax can be levied on composite works contract prior to the introduction of the Finance Act, 2007 by placing reliance on judgment of the Ape Court in the case of Commissioner, Central Excise and Customs, Kerala Vs. Larsen and Toubro Limited, (2016) 1 SCC 170.
Cause Title – M/s. Total Environment Building Systems Pvt. Ltd. & The Deputy Commissioner of Commercial Taxes & Ors.
Date of Judgment – Aug 2, 2022
Coram – Justice MR Shah & Justice BV Nagarathna
- Duty of Courts to consider defence of accused
18) Courts Cannot Accept/Reject Defence Of Accused Cursorily: SC While Setting Aside Conviction U/s. 307 IPC - The Supreme Court observed that lower Courts should consider the defence of an accused person with caution and further noted that the acceptance or rejection of such defence should not be done in a cursory manner.
The Bench while setting aside conviction under Section 307 IPC also noted that it is the duty of the Courts below to consider the defence of the accused and the same must be considered with caution and must be scrutinized by application of mind by the Judge.
Cause Title – Jai Prakash Tiwari v. State Of Madhya Pradesh
Date of Judgment – Aug 4, 2022
Coram – Chief Justice NV Ramana, Justice Krishna Murari & Justice Hima Kohli
- Payment of compensation over wrongful/bad recruitment
19) Supreme Court Orders Delhi Transport Corporation To Compensate Man Over Wrongful Driver Recruitment Process – The Supreme Court directed the Delhi Transport Corporation (DTC) to pay lump sum compensation to a man who was not appointed as a driver during the driver's recruitment test due to bad/wrongful recruitment process.
The Apex Court held that Respondent No. 1 be compensated by DTC for a sum of Rs, 7.5 lakhs with 6 percent interest from September 2013 till actual payments are made. The Bench also directed that the appellant may recover the compensation from Respondent No.2, but the initial liability to pay the amount would be on DTC.
Cause Title – Delhi Transport Corporation v. Sandeep Kaushik and Ors.
Date of Judgment – Aug 3, 2022
Coram – Justice MR Shah & Justice BV Nagarathna
- Levy of service tax again on CD updates
20) Once Lumpsum Is Charged And Paid For Sale Of CD, Service Tax Cannot Be Levied Again On Updates – The Supreme Court dismissed the appeal filed by the Commissioner of Service Tax, Delhi seeking payment of service tax from Quick Heal Technologies Ltd. on the consideration received for the supply of the license codes/keys of Antivirus Software to the end customers in retail packs during the period between 2011-14.
The Court referring to its judgment in the case of Bharat Sanchar Nigam Ltd. v. Union of India held thus "Once a lumpsum has been charged for the sale of CD (as in the case on hand) and sale tax has been paid thereon, the revenue thereafter cannot levy service tax on the entire sale consideration once again on the ground that the updates are being provided."
Cause Title – Commissioner of Service Tax Delhi v. Quick Heal Technologies Limited
Date of Judgment – Aug 5, 2022
Coram – Justice Abhay S. Oka & Justice J.B. Pardiwala