Supreme Court Weekly Roundup: January 17 To January 23, 2022

JUDGMENTS THIS WEEK

1. If Fraudulent Affairs Of Company Are Continuing, Right To Seek Winding Up Becomes Recurring : Supreme Court In Antrix-Devas Case

Case Title: Devas Multimedia Private Ltd vs Antrix Corporation Ltd and another

Citation : 2022 LiveLaw (SC) 57

The Supreme Court has dismissed an appeal filed by Devas Multimedia challenging the orders passed by the NCLT and NCLAT allowing the winding up on a petition filed by ISRO's commercial arm Antrix Corporation Ltd. A bench comprising Justice Hemant Gupta and Justice V Ramasubramanian dismissed the appeals filed by Devas Multimedia and its shareholder Devas Employees Mauritius Pvt Ltd.

The Court undertook a detailed analysis of Rule 5 of the Companies (Winding up) Rules, 2020 and notes that the purpose of advertisement is to provide an opportunity to all the stakeholders to either support or oppose the proceedings and to serve as a warning to all those dealing with the company so that they would know there there is an element of risk involved. The Court also notes that advertisement has been said to cause more harm to the company than the benefits it brings

2. Decree For Specific Performance Can't Be Obtained Behind The Back of A Bona-Fide Purchaser: Supreme Court

Coram: Justice Sanjay Kishan Kaul; Justice M M Sundresh

Citation : 2022 LiveLaw (SC) 58

The Supreme Court has observed that a decree for obtaining specific performance of a decree cannot be obtained behind the back of a bona fide purchaser especially when the transaction has taken place prior to the institution of the suit for specific performance.

A bench of Justices Sanjay Kishan Kaul and M.M. Sundresh, setting aside a judgment of the Madras High Court, observed:

"...it is not possible for us to accept that a decree could have been obtained behind the back of a bona fide purchaser, more so when the transaction had taken place prior to the institution of the suit for specific performance".

3. ORDER XXXVII Rule 3 CPC- Grant Of Leave To Defend Is The Ordinary Rule; Denial An Exception: Supreme Court

Case Name: B.L. Kashyap And Sons Ltd. Vs JMS Steels And Power Corporation

Citation: 2022 LiveLaw (SC) 59

The grant of leave to defend (with or without conditions) is the ordinary rule; and denial of leave to defend is an exception, the Supreme Court observed in a judgment in which it discussed the scope of Rule 3 of Order XXXVII of the Code of Civil Procedure 1908.

The bench comprising Justices Vineet Saran and Dinesh Maheshwari observed that a prayer for leave to defend is to be denied in such cases where the defendant has practically no defence and is unable to give out even a semblance of triable issues before the Court.

4. 'Probability Of Reformation & Rehabilitation': Supreme Court Commutes Death Sentence Of Man Convicted Of Rape & Murder Of 11 Year Old Girl

Case name: Bhagwani vs State of Madhya Pradesh

Citation: 2022 LiveLaw (SC) 60

The Supreme Court commuted death sentence awarded on a man convicted of rape and murder of eleven year old girl.

The court, however, took into account 'the barbaric and savage manner in which the offences of rape and murder were committed', sentenced him to life imprisonment for a period of 30 years during which he shall not be granted remission.

Bhagwani was convicted and sentenced to death by the Trial Court under Sections 363, 366A, 364, 346, 376D, 376A, 302, 201 of Indian Penal Code, 1860 and Section 5(g) (m) read with Section 6 of The Protection of Children from Sexual Offences Act, 2012. The Madhya Pradesh High Court dismissed the appeal filed by him and confirmed the death sentence.

5. Subordinate Legislation/Statutory Rules Also A 'Law' Under Section 23 Contract Act: Supreme Court

Case name: G.T. Girish Vs Y. Subba Raju (D)

Citation: 2022 LiveLaw (SC) 61

The Supreme Court held that Subordinate Legislation in the form of Statutory Rules is a 'law' under Section 23 of the Indian Contract Act.

Section 23 of the Contract Act states that the consideration or object of an agreement is lawful, unless it is forbidden by law.

The court was considering an appeal that arose from a specific performance suit in which the defendant pointed out that Bangalore Rules of Allotment, 1972 Rule 18(2) had an embargo against alienation for a period of ten years and therefore the contract is not lawful. The issue raised was whether the enforcement of an agreement to sell expressly or impliedly, lead to palpably defeat this Rule. 

6. Guarantor Whose Guarantee Stands Invoked By Any Creditor Barred From Giving Resolution Plan, Though Insolvency Initiated By Another Creditor: SC On Sec 29A(h) IBC

Case Title : Bank of Baroda and another versus MBL Infrastructures Ltd and others

Citation : 2022 LiveLaw (SC) 62

The Supreme Court has delivered an important judgment interpreting the scope of Section 29A(h) of the Insolvency and Bankruptcy Code. Section 29A IBC specifies the categories of persons who are not eligible to be resolution applicants.

Sub-section (h) of Section 29A refers to persons whose guarantees stand invoked by the creditors of the corporate debtor. The exact wordings of the provision are as follows :

"has executed a guarantee in favour of a creditor in respect of a corporate debtor against which an application for insolvency resolution made by such creditor has been admitted under this Code and such guarantee has been invoked by the creditor and remains unpaid in full or part".

7. Arbitral Award Can't Be Challenged On Ground That Arbitrator Has Failed To Appreciate Facts : Supreme Court

Case Name: Atlanta Limited Thr. Its Managing Director v. Union of India Represented By Chief Engineer Military Engineering Service

Citation: 2022 LiveLaw (SC) 63

The Supreme Court reiterated that the Appellate Court exercising power under Section 30 and 33 of the Arbitration Act, 1940 ought not to reassess or re appreciate evidence or examine the sufficiency of the evidence. The Apex Court also held that the arbitral award ought not to be challenged on the ground that the arbitrator had drawn his own conclusion or had failed to appreciate facts.

A Bench comprising Chief Justice of India, N.V. Ramana and Justices A.S. Bopanna and Hima Kohli allowed an appeal assailing the order passed by the Division Bench of the Madras High Court, which had set aside the order and decree of the Single Judge upholding the arbitral award to the extent that it granted money for idle hire charges and value of tools and machineries.

8. In Judicial Review Proceedings, Courts Are Concerned With Decision-Making Process And Not The Decision Itself: Supreme Court

Case name: Sushil Kumar vs State of Haryana

Citation: 2022 LiveLaw (SC) 64

In judicial review proceedings, the Courts are concerned with the decision-making process and not the decision itself, the Supreme Court observed in a judgment this week.

In this case, the appellant, a head constable, had approached the High Court seeking retrospective promotion with effect from 21.01.2004. His grievance was that he should have been promoted in the year 2004 itself and that the delay in appointing him in 2008 is illegal and arbitrary. The Single Judge dismissed the petition on the ground that selection is not a matter of right. Writ appeal was also dismissed by the Division Bench.

In appeal, it was contended that the Inspector General of Police (IG) has no power to interfere with the recommendation of the Superintendent of Police (SP). That when the SP has forwarded the decision of the Departmental Promotion Committee (DPC), the IG does not act as the appellate authority and cannot substitute his decision to that of the DP.

9. When Defendant's Trademark Is Identical To Plaintiff's Registered Trademark & Their Goods Or Services Are Identical, Confusion In Public Shall Be Presumed : Supreme Court

Case name: RENAISSANCE HOTEL HOLDINGS INC. vs B. VIJAYA SAI

Citation: 2022 LiveLaw (SC) 65

The Supreme Court observed that, in an action for infringement, when the trade mark of the defendant is identical with the registered trade mark of the plaintiff and that the goods or services of the defendant are identical with the goods or services covered by registered trade mark, the Court shall presume that it is likely to cause confusion on the part of the public.

In an infringement action, an injunction would be issued as soon as it is proved that the defendant is improperly using the trademark of the plaintiff, the bench comprising Justices L. Nageswara Rao, BR Gavai and BV Nagarathna observed.

10. Not Necessary To Call For Handwriting Experts In Departmental Enquiry; Test Of Criminal Proceedings Not Applicable: Supreme Court

Case Name: Indian Overseas Bank And Ors. v. Om Prakash Lal Srivastava

Citation: 2022 LIVELAW (SC) 66

In a case of a bank clerk forging signatures to encash a Demand Draft, the Supreme Court held that it is not necessary to call for a handwriting expert in departmental proceedings. The Court upheld the procedure adopted by the inquiry officer to compare the signatures himself, from a "banker's eye".

The Supreme Court has held that the test of criminal proceedings ought not to be applied in departmental proceedings to call for handwriting experts to examine signatures. The Apex Court clarified that the standard of proof in departmental proceedings was based on 'preponderance of probability' and therefore somewhat lower than that of criminal proceedings based on 'proved beyond reasonable doubt'.

11. Supreme Court Grants Reprieve To A Software Developer Who Was "Hounded" By Her Employer -Read Judgment

Case Title: Ms Sarita Singh v. M/s Shree Infosoft Private Limited

Citation : 2022 LiveLaw (SC) 67

The Supreme Court has granted reprieve to a software developer who was "hounded" by her employer which instituted a suit claiming money spent on her "overseas deputation" after she resigned from the company.

The Court has affirmed that "a deputation involves a tripartite consensual agreement between the lending employer, borrowing employer and the employee", and "a transient business visit without any written agreement detailing terms of deputation will not qualify as a deputation." 

12. High Court Cannot Issue Direction To State To Form A New Policy: Supreme Court Reiterates

Case Title: Krishan Lal & Ors. V. Vini Mahajan Secretary & Anr.| Petition(s) for Special Leave to Appeal (C) No(s). 19731- 19732/2017

Citation : 2022 LiveLaw (SC) 68

The Supreme Court recently reiterated that the High Court cannot issue direction to the State to form a new policy.

The bench of Justices AM Khanwilkar, Dinesh Maheshwari and CT Ravikumar was considering SLP assailing Punjab and Haryana High Court's order dated March 27, 2017 of rejecting the contempt petition filed by the petitioners for non compliance of the direction given on August 27, 2014.

The High Court had opined that it was not a case for initiating contempt action as there was no intentional non compliance by the Department in the order dated August 27, 2014.

13. Confessional Statement Recorded Under Section 67 NDPS Act Inadmissible, Reiterates Supreme Court

Case name: State By (NCB) Bengaluru Vs Pallulabid Ahmad Arimutta

Citation: 2022 LiveLaw (SC) 69

The Supreme Court reiterated that a confessional statement recorded under Section 67 of the NDPS Act will remain inadmissible in the trial of an offence under the NDPS Act.

The bench comprising CJI NV Ramana, Justices Surya Kant, Hima Kohli was considering an appeal filed by Narcotics Control Beauro challenging the orders passed by the High Court of Karnataka released on bail the persons accused of the offences punishable under Sections 8(c), 8A read with Sections 20(b), 21, 22, 27A, 27B, 28 and 29 of the Narcotic Drugs and Psychotropic Substances Act, 1985.

The court noted that except for the voluntary statements of accused/co-accused recorded under Section 67 of the NDPS Act, there was no substantial material available with the prosecution at the time of arrest to connect the accused with the allegations levelled against them of indulging in drug trafficking. 

14. Reach Out To Children Orphaned Due To COVID To Pay Compensation : Supreme Court Directs States

Case Title: Gaurav Bansal v. Union of India

Citation : 2022 LiveLaw (SC) 70

The Supreme Court has directed the States to reach out to children who were orphaned due to COVID-19 for paying them ex-gratia compensation of Rs 50,000. The Court noted that the orphans may not be in a position to submit applications to claim compensation and hence the State authorities should reach out to them.

The National Commission for Protection of Child Rights(NCPCR) has told the Court that about 10,000 children have become orphans in the pandemic, as per the data uploaded by the States in the Bal Swaraj portal.

15. Inherited Property Of A Female Hindu Dying Issueless And Intestate Goes Back To The Source: Supreme Court

Case name: Arunachala Gounder (Dead) Vs Ponnusamy

Citation: 2022 LiveLaw (SC) 71

The Supreme Court observed that inherited property of a female Hindu dying issueless and intestate, goes back to the source.

"If a female Hindu dies intestate without leaving any issue, then the property inherited by her from her father or mother would go to the heirs of her father whereas the property inherited from her husband or father-in-law would go to the heirs of the husband", the bench comprising Justices S. Abdul Nazeer and Krishna Murari observed in a judgment arising out of a partition suit.

16. Murder Case - Head Injury Is Vital; Mere Failure To Notice Fracture Won't Take Case Out Of Sec 302 IPC: Supreme Court

Case name: State of UP vs Jai Dutt

Citation: 2022 LiveLaw (SC) 72

The mere fact that no fracture was noticed and/or found cannot take the case out of Section 302 of the Indian Penal Code when the deceased died due to head injury, the Supreme Court observed while convicting a murder accused.

The bench comprising Justices MR Shah and BV Nagarathna observed that the injury on the head can be said to be causing injury on the vital part of the body for attracting Section 302 IPC.

17. OBC Quota In PG Courses Not Prohibited; Can't Say Backwardness Will Disappear With Graduation: Supreme Court In NEET-AIQ Case

Case Title: Neil Aurelio Nunes and Ors v. Union of India & Ors| Writ Petition (C) No. 961 of 2021

Citaiton : 2022 LiveLaw (SC) 73

The Supreme Court has held that there is no prohibition for introducing reservation for socially and educationally backward classes (or the OBCs) in Post-Graduate courses.

"In our opinion, it cannot be said that the impact of backwardness simply disappears because a candidate has a graduate qualification", the Court said.

The bench of Justices DY Chandrachud and AS Bopanna was considering the writ petitions filed by NEET aspirants challenging the Central Government's decision to introduce 27% reservation for Other Backward Classes ("OBC") and 10% reservation for Economically Weaker Section ("EWS") in NEET All India Quota.

18. Conduct Of Plaintiff Crucial In A Suit Of Specific Performance: Supreme Court

Case name: Shenbagam vs KK Rathinavel

Citation: 2022 LiveLaw (SC) 74

The Supreme Court observed that the conduct of a plaintiff is very crucial in a suit for specific performance and the same has to be assessed by the Courts.

In evaluating whether the plaintiff was ready and willing to perform his obligations under the contract, it is not only necessary to view whether he had the financial capacity to pay the balance consideration, but also assess his conduct throughout the transaction, the bench comprising Justices DY Chandrachud and AS Bopanna said.

The court observed thus while allowing an appeal filed against Madras High Court judgment that had confirmed the decree for specific performance.

19. Competition Commission Can Probe Anti-Competitive Aspects Of Res Extra Commercium Businesses Like Lottery : Supreme Court

Case Name: Competition Commission of India v. State of Mizoram And Ors.

Citation: 2022 LiveLaw (SC) 75

The Supreme Court held that even though lottery is a regulated commodity under the Regulation Act, anti-competitive elements in business related to lotteries would continue to be governed by the Competition Act, 2002. The Apex Court further held that there was no bar on the Competition Commission of India to investigate anti-competitive practices like bid rigging, collusive bidding and cartelisation in the tendering process for lottery business, which is in the nature res extra commercium.

A bench comprising Justices Sanjay Kishan Kaul and M.M. Sundresh allowed an appeal assailing the order of the Gauahati High Court, which had set aside the preliminary order of the Competition Commission of India ("CCI") and the report of the Director General, primarily, on the ground that CCI had no jurisdiction to inquire into allegations of bid rigging, collusive bidding, and cartelisation in the tender process for appointment of selling agents and distributors for lotteries organised by State.

20. RFCTLARR Act Not Applicable To Acquisitions Under Bangalore Development Authority Act; LA Act 1894 Act Applies: Supreme Court

Case name: Bangalore Development Authority Vs State Of Karnataka

Citation: 2022 LiveLaw (SC) 76

The Supreme Court held that the provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 Act are not applicable for the acquisitions made under the Bangalore Development Authority Act.

The bench comprising Justices S. Abdul Nazeer and Sanjiv Khanna observed that the Land Acquisition Act, 1894, continue to apply for acquisitions made in the BDA Act so far as they are applicable as it is a legislation by incorporation.

21. Revisional Jurisdiction Of NCDRC Extremely Limited, Reiterates Supreme Court

Case name: Sunil Kumar Maity Vs State Bank Of India

Citation: 2022 LiveLaw (SC) 77

The Supreme Court observed that the revisional jurisdiction of the National Commission under Section 21(b) of the Consumer Protection Act is extremely limited.

It should be exercised only in case as contemplated within the parameters specified in the said provision, namely when it appears to the National Commission that the State Commission had exercised a jurisdiction not vested in it by law, or had failed to exercise jurisdiction so vested, or had acted in the exercise of its jurisdiction illegally or with material irregularity, the bench of Justices Sanjiv Khanna and Bela M. Trivedi observed.

22. Statement In Advertisement Contrary To Service Regulations Won't Create Right In Favour Of Applicants: Supreme Court

Case Title : The Employees State Insurance Corporation versus Union of India and others

Citation : 2022 LiveLaw (SC) 78

The Supreme Court has held that in the event of a conflict between a statement in an advertisement and service regulations, the latter shall prevail. The Court added that an erroneous advertisement would not create a right in favour of applicants who act on such representation.

The Court further held that "regulations framed by statutory authorities have the force of enacted law and in the event of a conflict between an executive instruction, an office of memorandum in this case and statutory regulations, the latter prevails."

23. Tax Exemption Notification Must Be Construed Strictly; Promissory Estoppel Not Applicable In Taxing Matters: Supreme Court

Case Name: State of Gujarat v. Arcelor Mittal Nippon Steel India Limited

Citation: 2022 LiveLaw (SC) 79

The Supreme Court reinstated the order of the Revenue levying demand of purchase tax and imposing penalty on Arcelor Mittal Nippon Steel India Limited (erstwhile Essar Steel Ltd.) for availing tax benefits without fulfilling all the eligibility criteria/condition of the Scheme For Special Incentives to Prestigious Units floated by the Gujarat Government in 1991.

The Court held that tax exemption notifications must be construed strictly( State of Gujarat v. Arcelor Mittal Nippon Steel India Limited).

"An exception and/or an exempting provision in a taxing statute should be construed strictly and it is not open to the court to ignore the conditions prescribed in industrial policy and the exemption notifications".

IMPORTANT APEX COURT UPDATES 

1. Attorney General Grants Consent To Initiate Contempt Proceedings Against Yati Narsinghanand For Remarks Against Supreme Court

The Attorney General for India KK Venugopal has granted consent to initiate contempt proceedings against the 'Dharam Sansad' leader Yati Narsinghanand over his recent 'derogatory remarks' against the Constitution and the Supreme Court of India.

The consent has been granted in response to a letter by an activist Shachi Nelli seeking to initiate contempt against Yati Narsinghanand for his statements in an interview that went viral on the social media platform Twitter on the 14th of January.

According to AG, the statements made by Yati Narsinganand would certainly amount to contempt of the Supreme Court of India.

2. Justice Nageswara Rao Recuses From Tarun Tejpal's Plea Seeking In-Camera Hearing Of Rape Case Appeal In HC

Supreme Court judge Justice L Nageswara Rao recused from hearing the special leave petition filed by journalist Tarun Tejpal challenging the order passed by Bombay High Court(Goa Bench) rejecting his application moved under Section 327 CrPC for conducting hearings in-camera in the appeal proceedings against his acquittal in a 2013 rape case.

Justice Nageswara Rao told the petitioner's counsel that he had represented the State of Goa in 2015 as a lawyer. The case against Tejpal was investigated and prosecuted by the State of Goa. The matter was therefore directed to be listed before another bench.

3. "Don't Come Up Against Adjournment Orders": Supreme Court Discourages Challenging Adjournment Orders Passed By High Courts

The Supreme Court expressed its displeasure to Counsels approaching it assailing adjournment orders passed by High Courts. The Apex Court was perturbed that everyday it comes across four to five matters challenging the adjournment orders.

A Bench comprising Justices L. Nageswara Rao and B.V. Nagarathna was hearing a challenge to the adjournment order passed by the Allahabad High Court in a matter wherein the concerned Passport Authority had declined travel clearance to Asif Idrees, who had been granted a scholarship to go to Spain to pursue his degree in M.A.

4. Supreme Court Grants Interim Protection From Arrest To Mamata Banerjee's Polling Agent Sheikh Sufiyan In Murder Case

The Supreme Court of India granted interim protection from arrest to TMC leader Sheikh Sufiyan accused in a murder case in the West Bengal post-poll violence case currently being probed by the Central Bureau of Investigation (CBI). Notably, Sufiyan was the polling agent of West Bengal Chief Minister Mamata Banerjee in Nandigram for the 2021 West Bengal Assembly elections.

A bench comprising Justice Nageswara Rao and Justice BR Gavai has issued the direction in a special leave petition filed by Sufiyan challenging the Calcutta High Court's order rejecting his anticipatory bail application.

5. UPSC Civil Services Exam : Supreme Court Refuses To Entertain Plea To Quash Select List For Violating 50% Reservation Limit

The Supreme Court refused to entertain a writ petition filed by a civil service exam candidate seeking to quash the final selection list for Union Public Services Commission(UPSC) Civil Services Examination 2020 to the extent it violates the 50% reservation ceiling.

The petitioner, Nitish Shankar, who had appeared in the 2020 civil services exam, argued that by implementing the Economically Weaker Sections (EWS) quota, the reservation has become 60% and only 40% was left for the general category. It was argued in the petition that UPSC has recommended 34.55% candidates for appointment against the general category and 65.44% against the reserved category and this sabotaged merit in selection.