Weekly Overview| Supreme Court Judgments: Sept 5 - Sept 9, 2022
1) Prevention of Corruption Act - Onus is on accused and not on Prosecution to account for and explain assets – The Court while adjudicating upon a case filed under the Prevention of Corruption Act observed that the onus is on the accused and not on the Prosecution to account for and explain assets.
The Bench further also touched upon the expression 'known sources of income' as referred to in Section 13(1)(e) of the 1988 Act and observed that the expression has a legal connotation which means the sources of income known to the Prosecution and not sources relied upon and known to the accused.
Cause Title – State Through Deputy Superintendent of Police v. R. Soundirarasu Etc.
Date of Judgment – September 5, 2022
Coram – Justice Dinesh Maheshwari & Justice J.B. Pardiwala
2) Person alleging that property is benami has to displace initial burden of proving it through evidence/circumstances – The Court held that one who alleges that a property is benami and is held, nominally, on behalf of the real owner - in cases which form the exception, under Section 4 (3) of Benami Transaction (Prohibition) Act, 1988 – has to displace the initial burden of proving that fact through evidence, or cumulatively through circumstances.
The High Court had declined plaintiffs' appeal holding that the first plaintiff himself intended for the first defendant to be the absolute owner, and it was not a benami transaction.
Cause Title – Pushpalata v. Vijay Kumar (dead) Thr. LRs. & Ors.
Date of Judgment – September 5, 2022
Coram – CJI UU Lalit, Justice S. Ravindra Bhat & Justice Sudhanshu Dhulia
3) Value of returned goods is to be considered for refund U/s. 173L of Central Excise Act - The Court held that the value of returned goods has to be considered for the purpose of determining the value of refund under Section 173L of the Central Excise Act.
The Bench further rejected the contention of the Appellant-assessee that as the returned goods can be reusable for the manufacture of the products, therefore the value of the raw material can be considered for the purpose of determination of the value for refund.
Cause Title – M/s. Peacock Industries Ltd. v. Union of India and Ors.
Date of Judgment – September 5, 2022
Coram – Justice MR Shah & Justice Krishna Murari
4) Tenant in possession of property after expiry of lease shall be liable to pay mesne profits – The Court observed that that the tenant who continues to be in possession of the property even after the expiry of the lease shall be liable to pay mesne profits to the landlord.
The Bench further held that the tenant continuing in possession after the expiry of the lease may be treated as a tenant at sufferance, which status is higher than that of a mere trespasser.
Cause Title – Indian Oil Corporation Ltd. v. Sudera Realty Pvt. Ltd.
Date of Judgment – September 6, 2022
Coram – Justice KM Joseph & Justice PS Narasimha
5) Compassionate appointment cannot be extended to heirs of employees on superannuation or retirement – The Bench held "No one can claim to have a vested right for appointment on compassionate grounds. Therefore, appointment on compassionate grounds cannot be extended to the heirs of the employees on their superannuation and/or retirement."
The Court also observed that such an appointment to the heirs of the employees on their retirement and/or superannuation shall be contrary to the object and purpose of appointment on compassionate grounds and violative of Article 14 of the Constitution.
Cause Title – Ahmednagar Mahanagar Palika v. Ahmednagar Mahanagar Palika Kamgar Union
Date of Judgment – September 5, 2022
Coram – Justice MR Shah & Justice BV Nagarathna
6) IBC 2016- Liability of the guarantor is co-extensive with that of the principal borrower – The Court reiterated that the liability of the guarantor is co-extensive with that of the Principal Borrower under the Insolvency and Bankruptcy Code, 2016.
In this case, the Appellant was the promoter of the Maharaja Theme Parks and Resorts and Respondent had advanced credit facilities to three entities for which the Appellant was the guarantor for the loans availed by the three borrowers. The borrowers had failed to repay the debts payable by them to the Financial Creditor, subsequent to which the creditor filed an application under Section 7 of IBC initiating CIRP against the guarantor.
Cause Title – K. Paramasivam v. Karur Vysya Bank Ltd. & Anr.
Date of Judgment – September 6, 2022
Coram – Justice Indira Banerjee & Justice JK Maheshwari
7) Royal Property Dispute Of 1989 - Faridkot Ruler's daughters to get majority share in father's property – SC upholds HC's order – In the 33-year-old royal property dispute pertaining to Ruler Raja Harinder Singh of Faridkot, the Supreme Court has upheld the Punjab and Haryana High Court's order granting the ruler's daughters Rajkumari Amrit Kaur and Rajkumari Deepinder Kaur majority of the share in their father's property.
The Bench further directed for the dissolution of the Maharwal Khewaji Trust which was taking care of the property since 1989.
Cause Title – Maharani Deepinder Kaur (Since Deceased) Through Lrs. and Ors. V. Rajkumari Amrit Kaur and Ors.
Date of Judgment – September 7, 2022
Coram – CJI UU Lalit, Justice S. Ravindra Bhat, & Justice Sudhanshu Dhulia
8) Resolution plan bound to be rejected if it ignores statutory demands payable to state govt. or legal authority – The Court has observed that the Adjudicating Authority is bound to reject the Resolution Plan, which ignores the statutory demands payable to any State Government or a legal authority.
The Bench emphasized that if a company is unable to pay its debts, which should include its statutory dues to the Government and/or other authorities and if there is no plan which contemplates dissipation of those debts in a phased manner, uniform proportional reduction, the company would necessarily have to be liquidated and its assets sold and distributed in the manner stipulated in Section 53 of the Insolvency and Bankruptcy Code 2016.
Cause Title – State Tax Officer (1) v. Rainbow Papers Limited
Date of Judgment – September 6, 2022
Coram – Justice Indira Banerjee & Justice AS Bopanna
9) Initial possession of stolen goods may not be illegal but retaining it knowing that it was stolen makes it culpable – The Court held that the initial possession of stolen goods may not be illegal but retaining it with the knowledge that it was a stolen property, makes it culpable under Section 411 IPC.
The Court also held, ""…the disclosure statement of one accused cannot be accepted as a proof of the appellant having knowledge of utensils being stolen goods."
Cause Title – Shiv Kumar v. State of Madhya Pradesh
Date of Judgment – September 7, 2022
Coram – Justice KM Joseph & Justice Hrishikesh Roy
10) Termination of agreement by Vishakhapatnam Port Authority shall not disqualify Adani Ports from participating in future tenders – While providing a major relief o Adani Port SEZ Ltd. concerning their disqualification to participate in future tender processes floated by public bodies, the Court held that the termination of the agreement by Vishakhapatnam Port Authority shall not be treated as disqualification of Adani Port to participate in future tenders floated by public bodies.
APSEZ was disqualified from bidding in the Jawaharlal Nehru Port Authority (JNPA) tender for the upgradation of the Container Terminal in Navi Mumbai based on a clause in JNPA tender that stated that the disqualification/termination of a contract with a public entity in the past three years would automatically disqualify a bidding party from future tenders.
Cause Title – Adani Ports and Special Economic Zone Limited v. The Board of Trustees of Jawaharlal Nehru Port Authority & Ors.
Date of Order – September 5, 2022
Coram – Justice MR Shah & Justice Krishna Murari
11) Claimant suffered serious injuries, prolonged hospitalization & trauma – SC enhances compensation in motor accident case – While enhancing the amount of compensation in motor accident case, the Bench noted that the claimant had suffered serious injuries, prolonged hospitalization and trauma.
The Court held that the High Court erred in awarding the future economic loss treating the income of the claimant at Rs. 3,000/- per month only.
The Bench further noted that the claimant was working as a mason and the permanent disability assessed by the High Court was at 100%. Therefore, even considering the minimum wages payable to mason and future rise in income, the claimant shall be entitled to economic loss past as well as future considering the income of the claimant at Rs. 5,000/- per month.
Cause Title – Velayudhan v. National Insurance Co. Ltd. & Anr.
Date of Judgment – September 7, 2022
Coram – Justice MR Shah & Justice Krishna Murari
12) No evidence to prove appellants instigated labourers – SC acquits men convicted for murder of employer – The Court acquitted two men who were convicted for causing the death of the Managing Director of a company where they were employed.
The Bench observed that there was no evidence to prove that the Appellants had instigated labourers to attached the deceased MD or cause any injury to him.
Cause Title – Chaitu Gowala and Another v. The State of Assam
Date of Judgment – September 7, 2022
Coram – Justice MR Shah & Justice Krishna Murari
13) Annulment of arbitration clause can't be legitimized by deficiency of words in agreement indicating intention to arbitrate – The Court observed, ""The deficiency of words in agreement which otherwise fortifies the intention of the parties to arbitrate their disputes, cannot legitimise the annulment of arbitration clause."
It was the Developer's case before the Court that the contract lacked the express wording necessary for it to be considered a valid and binding agreement to refer the disputes to arbitration.
Cause Title – Babanrao Rajaram Pund v. M/s. Samarth Builders & Developers & Anr.
Date of Judgment – September 7, 2022
Coram – Justice Surya Kant & Justice Abhay S. Oka
14) Delivering defective car despite payment in full tantamounts to dishonesty & unfair trade practice – The Court observed that not delivering a new car despite the payment of full sale consideration and/or to deliver the defective car can be said to be unfair trade practice.
The Court also directed the car dealer to deposit costs to the tune of 1 Lakh rupees with the Registry of the Supreme Court.
Cause Title – Rajiv Shukla v. Gold Rush Sales and Services Ltd. & Anr.
Date of Judgment – September 8, 2022
Coram – Justice MR Shah & Justice Krishna Murari
15) Policy must be implemented in transparent manner without violating Articles 14 & 21 – SC issues directions to UP govt. on premature release – The Court issued slew of directions to Uttar Pradesh Government on premature release of convicts sentenced to life imprisonment.
The Court held that the implementation of the policy regarding premature release should be implemented in an objective and transparent manner as otherwise, it would impinge upon constitutional guarantees under Articles 14 and 21 of the Constitution.
Cause Title – Rashidul Jafar @ Chota v. State of Uttar Pradesh & Anr
Date of Judgment – September 6, 2022
Coram – Justice DY Chandrachud & Justice Hima Kohli
16) Courts should be slow in quashing complaints based on settlement between parties when offences have impact on others – The Court has observed that the Court has to go slow even while exercising jurisdiction under Section 482 CrPC or Article 226 of the Constitution in the matter of quashing criminal proceedings on the basis of a settlement reached between the parties when offences have impact on others.
Three SLPs were preferred before the Supreme Court out of which two challenged an order passed by the Madras High Court quashing the criminal complaint under Section 482 CrPC related to the Members of Parliament and Members of Legislative Assembly of Tamil Nadu on the ground that all the victims have compromised their claims with the accused.
Cause Title – P. Dharamaraj v. Shanmugam & Ors.
Date of Judgment – September 8, 2022
Coram – Justice S. Abdul Nazeer & Justice V. Ramasubramanian
17) Compensation amount cannot be enhanced in absence of any cogent reasons: SC in medical negligence case – The Court while adjudicating upon a medical negligence case has held that the amount of compensation cannot be enhanced without any cogent reasons and/or material.
In this case, a minor girl had filed a consumer complaint before the District Forum through her father alleging medical negligence against the appellants-Nursing home, as she had suffered from wrong diagnosis and wrong treatment, which led to rashes on her body.
It was alleged that the doctor, who treated her was not competent to prescribe allopathic medicines, which amounted to medical negligence.
Cause Title – Chandigarh Nursing Home and Anr. v. Sukhdeep Kaur
Date of Judgment – September 9, 2022
Coram – Justice MR Shah & Justice Krishna Murari
18) High Court has not at all considered gravity of offences: SC quashes bail granted to two murder accused – The Court quashed the bail granted to two murder accused while observing that the Karnataka High Court had not considered the gravity of offences.
The Court set aside the order of the High Court holding that the High Court did not consider the gravity of the offence while granting bail to the accused.
Cause Title – Joseph Johnson N. Maithkuri v. Subrahmanya & Another with Anr.
Date of Judgment – September 9, 2022
Coram – Justice MR Shah & Justice Krishna Murari
19) Appellant has right to point out that ex parte order was illegal from record of trial court – SC reiterates: The Court held, ""the appellant can always urge in an appeal against the decree that an interim or interlocutory order passed during the pendency of the suit affecting the decision of the case was illegal. Therefore, the appellant, while challenging ex parte decree by filing an appeal, can always point out from the record of the trial court that the order passed to proceed with the suit ex parte against him was illegal."
While accepting the prayer for remand of the suit, the Court noted that the suit was instituted in the year 2014 and as a result of the order of remand, the suit instituted by the First Respondent will be delayed, therefore the Court imposed a cost of Rs. 2 lakhs on the Appellant to be paid to the First Respondent.
Cause Title – G.N.R. Babu @ S.N. Babu v. Dr. B.C. Muthappa & Ors.
Date of Judgment – September 6, 2022
Coram – Justice Ajay Rastogi & Justice Abhay S Oka
