Weekly Overview| Supreme Court Judgments: August 14 - August 18, 2023
1) Finance Act | Assessee cannot be subjected to penalty based on show cause notice containing incorrect service category
The Court dismissed the appeal filed by the Commissioner of Service Tax (Commissioner) against the order of the Custom, Excise, and Service Tax Appellate Tribunal (Tribunal). It held that the principle of natural justice requires that adjudication be made only based on the classification of the notice. Therefore, the Assessee cannot be penalized for a notice containing an entirely incorrect service category.
In this case, the Commissioner sent four show-cause notices to a software company (Assessee), wherein the first show-cause notice was marked under the wrong category.
Cause Title- Commissioner of Service Tax, Mumbai¬ v. M/s 3I Infotech Ltd.
Date of Judgment- August 14, 2023
Coram- Justice Abhay S. Oka and Justice Sanjay Karol
2) Election petition seeking only recount of votes must align with Rule 6 of Chhattisgarh Panchayat Nirvachan Niyam
The Court while dismissing an appeal filed against the order of the High Court which had allowed recounting of votes for the election of a Sarpanch observed that an Election Petition seeking only the relief of re-counting of votes, without seeking the declarations outlined in Rule 6, Chhattisgarh Panchayat Nirvachan Niyam, 1995 would not be tenable.
In this case, the appellant had filed an appeal to challenge the legality and validity of a judgment and order passed by the High Court of Chhattisgarh. The High Court, in a writ appeal, had allowed the recounting of votes for the election of a Sarpanch (village head) in the Gram Panchayat of Semarkona Block, District Mungeli, Chhattisgarh.
Cause Title- Dharmin Bai Kashyap v. Babli Sahu & Ors.
Date of Judgment- August 16, 2023
Coram- Justice Bela M. Trivedi and Justice S.V.N. Bhatti
3) Would be fair & just if appellants are meted equal treatment as other affected landowners: SC restores reference court's order in LA case
The Court upheld the order of the Reference Court, which had awarded higher compensation to the landowners of Village Nimeta whose lands were acquired for the Vadodara Branch Canal of the Narmada Project.
The landowners, whose lands were acquired under section 54 of the Land Acquisition Act, 1894 (Act) for the Vadodara Branch Canal of the Narmada Project (Project), challenged the compensation awarded by the Land Acquisition Officer (LAO), wherein the calculated market value of their land was Rs.19,000/ per hectare (i.e., Rs.1.90 per square meter).
Cause Title- Kalubhai Khatubhai Etc. v State of Gujarat & Ors.
Date of Judgment- August 16, 2023
Coram- Justice Bela M. Trivedi and Justice Dipankar Datta
4) Fact that plaintiff earned legal standing of coparcener cannot by itself would be a reason to accept prayer for partition
The Court while dealing with an appeal held that the fact that the plaintiff has earned legal standing of a coparcener cannot, by itself, would be a reason to accept the prayer for partition. The Court held this in a case relating to the amended Section 29A of the Hindu Succession Act, 1956 (Tamil Nadu Amendment Act).
In 1974, the first and second defendants entered into an agreement of sale with the third defendant and the third defendant, enforcing the rights under the agreement filed an application before the civil court for specific performance but the same was dismissed.
Cause Title- H. Vasanthi v. A. Santha (Dead) through LRS. and Others
Date of Judgment- August 16, 2023
Coram- Justice Bela M. Trivedi and Justice S.V.N. Bhatti
5) "Explanation" in Order XVII Rule 2 CPC doesn't apply to parties without substantial evidence
The Court while setting aside an ex-parte order affirmed that "explanation" in Order XVII Rule 2 CPC applies when a party that has led substantial evidence fails to appear; it doesn't apply to parties who haven't presented evidence.
The appeal challenged a judgment by a Single Judge of the Bombay High Court which had allowed a petition filed by the Maharashtra State Electricity Board (MSEB) against Miraj Electric Supply Co. Ltd. (MESC) and others. MSEB filed a suit against MESC and its directors for a monetary claim.
Cause Title- Y.P. Lele v. Maharashtra State Electricity Distribution Company Ltd. & Ors.
Date of Judgment- August 16, 2023
Coram- Justice Vikram Nath and Justice Ahsanuddin Amanullah
6) Court must be circumspect in granting relief for continuation in service unless prima facie evidence of unimpeachable character is produced
The Court in an appeal filed by the Central Council for Research in Ayurvedic Sciences (CCRAS), Ministry of Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homeopathy (AYUSH), Government of India, and its Director General held that the court or tribunal must be circumspect in granting the interim relief for continuation in service unless prima facie evidence of unimpeachable character is produced.
The two appellants challenged the judgment passed by the Orissa High Court whereby it was held that the respondent was entitled to the benefit of enhancement of retirement age from 60 to 65 years as applicable to the AYUSH doctors working under the Ministry of AYUSH.
Cause Title- Central Council for Research in Ayurvedic Sciences & Anr. v. Bikartan Das & Ors.
Date of Judgment- August 16, 2023
Coram- CJI D.Y. Chandrachud and Justice J.B. Pardiwala
7) Detention based on mere indulgence in manufacture, transport, or sale of liquor not an activity prejudicial to maintenance of public order
The Court in an appeal filed by a detenu held that if the detention is on the ground that the detenu is indulging in the manufacture, transport, or sale of liquor, then that by itself would not become an activity prejudicial to the maintenance of public order.
In this case, the said detenu was preventively detained under Section 3(2) of the Andhra Pradesh Prevention of Dangerous Activities of Boot-leggers, Dacoits, Drug Offenders, Goondas, Immoral Traffic Offenders and Land Grabbers Act, 1986 (hereinafter referred to as 1986 Act).
Cause Title- Pesala Nookaraju v. The Government of Andhra Pradesh & Ors.
Date of Judgment- August 16, 2023
Coram- CJI D.Y. Chandrachud, Justice J.B. Pardiwala, and Justice Manoj Misra
8) Assessment of market value determined does not warrant any interference: SC dismisses batch of 12 appeals in LA case
The Court dismissed a batch of twelve appeals pertaining to the compensation for land acquisition by the Hoshiarpur Improvement Trust finding that the High Court’s assessment and deductions were reasonable and did not warrant its interference through Article 136.
The case involved several appeals arising from a common judgment passed by the Punjab and Haryana High Court. The appeals pertained to the compensation for land acquisition carried out by the Hoshiarpur Improvement Trust for a development scheme.
Cause Title- Mala Etc. Etc. & Ors. v. State of Punjab & Anr.
Date of Judgment- August 17, 2023
Coram- Justice Bela M. Trivedi and Justice Dipankar Datta
9) Interest earned on bank deposits of clubs liable to be taxed under Income Tax Act; Principle of mutuality would not apply
The Court while dealing with a batch of various appeals held that the interest earned on bank deposits made by the Clubs is liable to be taxed under the Income Tax Act, 1961 (ITA) and that the principle of mutuality would not apply.
A short but interesting question of law arose in these appeals, which was, whether the deposit of surplus funds by the appellant Clubs by way of bank deposits in various banks is liable to be taxed in the hands of the Clubs or, whether, the principle of mutuality would apply and the interest earned from the deposits would not be subject to tax under the provisions of the ITA.
Cause Title- Secundrabad Club etc. v. C.I.T.-V etc.
Date of Judgment- August 17, 2023
Coram- Justice B.V. Nagarathna and Justice Prashant Kumar Mishra
10) Arbitration Act| High Court erred in re-interpreting contract clause in Section 37 jurisdiction
The Court allowed an appeal holding that the Division Bench had committed an error in re-interpreting a contractual clause while exercising jurisdiction under Section 37 of the Act.
This case involved a construction contract for a railway bridge, where the appellant, Konkan Railway Corporation Limited, challenged a High Court Division Bench decision under Section 37 of the Arbitration and Conciliation Act 1996. The dispute revolved around the respondent's claims for taxes and levies initially rejected by an Arbitral Tribunal, which was upheld by a Single Judge.
Cause Title- Konkan Railway Corporation Limited v. Chenab Bridge Project Undertaking
Date of Judgment- August 17, 2023
Coram- CJI D.Y. Chandrachud, Justice Pamidighantam Sri Narasimha and Justice J.B. Pardiwala
11) Once power of attorney is found to be invalid, any further action taken pursuant to it can’t be held as valid
The Court held that the Power of Attorney, having been found to be invalid, any further action taken pursuant to it, cannot be held as valid. The Court was deciding an appeal against the judgment passed by the Madras High Court whereby a second appeal was allowed after setting aside the judgment of the First Appellate Court and the Trial Court’s order was restored.
In this case, a dispute arose with regard to a land in the village of Tamil Nadu which originally belonged to the first plaintiff i.e., Natchimuthu who had executed a gift deed in favour of his first wife in respect of 50 cents of land. The suit was filed jointly by the said husband and wife.
Cause Title- Ramathal & Ors. v. K. Rajamani (Dead) through LRS & Anr.
Date of Judgment- August 17, 2023
Coram- Justice Vikram Nath and Justice Ahsanuddin Amanullah
12) Supreme Court emphasizes on accountability in RTI act, directs CIC and SIC to continuously monitor information disclosure
The Court, while dealing with a Public Interest Litigation seeking proactive or suo motu web-based disclosure of information as per the mandate of Section 4 of the Right to Information Act, held that the purpose and object of the statute will be accomplished only if the principle of accountability governs the relationship between ‘right holders’ and ‘duty bearers’.
In the PIL filed by the RTI Activist, Advocate and Environmentalist, Kishan Chand Jain, it was submitted to the Court that the laudable purpose of suo motu disclosures under Section 4 of the RTI Act is to place a large amount of information in the public domain on a proactive basis to make the functioning of the public authorities more transparent and also to substantially reduce the need for individual RTI applications.
Cause Title- Kishan Chand Jain v. Union of India & Ors.
Date of Judgment- August 17, 2023
Coram- CJI D.Y. Chandrachud, Justice P.S. Narasimha and Justice J.B. Pardiwala
13) Right of secured creditors u/s. 529 Companies Act unaffected by customs dues u/s. 142A Customs Act: SC while allowing IDBI's appeal
The Court allowed a Civil Appeal of the Industrial Development Bank of India (IDBI) to ascertain whether the Customs Act (CA) creates a first charge overriding the charge in favour of the secured creditor.
The Court noted that the Customs Act creates the first charge on dues 'payable' but ensures the right of third parties are unaffected in cases covered under Section 529A of the Companies Act, 1956 , the Recovery of Debts Due to Banks and the Financial Institutions Act 1993, the Securitisation and Reconstruction of Financial Assets and the Enforcement of Security Interest Act 2002, or the Insolvency and Bankruptcy Code 2016.
Cause Title- Industrial Development Bank of India (Through Stressed Assets Stabilization Fund Constituted By The Government Of India) v Superintendent of Central Excise And Customs And Others
Date of Judgment- August 18, 2023
Coram- Justice Sanjiv Khanna and Justice Sudhanshu Dhulia
14) Burden lies heavily on party who seeks to question cohabitation and to deprive relationship of a legal sanctity
The Court allowed the appeal of a wife, whose husband (who was in the army) had married her while still being legally married to another woman but had divorced that woman and the husband had named the wife as his legal heir.
The Court reiterated that there is a legal presumption in favour of a marriage when a man and woman have lived together for a significant period of time and that anyone seeking to challenge the validity of such a relationship bears a heavy burden of proof to rebut this presumption.
Cause Title- Smt. Shiramabai W/O Pundalik Bhave & Others v The Captain, Record Officer For O.I.C. Records, Sena Corps Abhilekh, Gaya, Bihar State And Another
Date of Judgment- August 18, 2023
Coram- Justice Hima Kohli and Justice Rajesh Bindal
15) Criminal justice system’s exceptionally painful episode: Apex Court convicts RJD leader & former MP Prabhunath Singh in 1995 double-murder case
The Supreme Court on Friday, pronounced its judgment convicting RJD Leader (the then ruling party) and Former Member of Parliament (MP) Prabhunath Singh in the 1995 double-murder case. The Court while convicting him, noted ‘a clear and deliberate lapse’ in the investigation and by the Prosecution. Consequentially, the bench dealt with this case as an ‘‘exceptionally painful episode of our Criminal Justice System’’.
The appeal was preferred by a victim, Harendra Rai assailing a judgment dated December 2, 2021 of a Single Judge Bench of the Patna High Court. The Court while acquitting Singh of all the charges, dismissed the review petition, and upheld the judgment of the Additional Sessions Judge, Fast Track Court III.
Cause Title- Harendra Rai v The State Of Bihar & Ors
Date of Judgment- August 18, 2023
Coram- Justice Sanjay Kishan Kaul and Justice Abhay S. Oka.
16) Reconveyance condition must reside in sale document for transaction to qualify as mortgage
The Court while dismissing an appeal upheld High Court's judgment which had established that the transaction in question constituted an absolute sale followed by an option to repurchase, rather than a mortgage.
The appellant appealed to the Supreme Court against a High Court's decision that had upheld their previous appeal against a trial Court's judgment. The case involved a property acquired in 1963 by the appellant's minor self through their father
Cause Title- Prakash (Dead) By LR. v. G. Aradhya & Ors.
Date of Judgment- August 18, 2023
Coram- Justice Hima Kohli and Justice Rajesh Bindal
17) Alleged confession was made after 2 months from incident which makes it more suspicious: SC acquits man convicted of murdering his wife
The Court allowed the Criminal Appeal of a man convicted of murdering his wife observing that the alleged confession made by him more than two months after the incident makes it more suspicious.
The case involved the murder of a woman named Shanthi, who was the appellant's wife. The prosecution alleged that the Appellant suspected that Shanthi was having an affair with another man named Peethambaram. On May 29, 2006, the Appellant took Shanthi to the bank of the Ponnai River and assaulted her with a stick. Shanthi died from her injuries, and the Appellant buried her body in the same place.
Cause Title- Moorthy v State of Tamil Nadu
Date of Judgment- August 18, 2023
Coram- Justice Abhay S. Oka and Justice Sanjay Karol
18) Arbitration Act| SC upholds damages award in favour of MMTC over breach of contract emphasizing on Section 73 Contract Act
The Court upheld the judgment of the Delhi High Court which had partly interfered in an arbitration matter of contract fulfillment. The Division Bench had upheld the award for damages granted to Minerals And Metals Trade Corporation Ltd. (MMTC) related to a specific period by the tribunal and the single bench.
The appeals were filed by two parties: MMTC and M/s H.J. Baker & Bros. INC (Baker). The case revolved around a contract dated January 14, 1986, where MMTC agreed to purchase sulphur from Baker on an annual basis. The contract was operative for three years and would be extended annually unless terminated with six months' notice.
Cause Title- H.J. Baker And Bros. Inc. v. The Minerals And Metals Trade Corporation Ltd.
Date of Judgment- August 18, 2023
Coram- Justice S. Ravindra Bhat and Justice Aravind Kumar
