The Complete Supreme Court Annual Digest- 2023 [Part-VII]

Consumer Law

A pedantic and hyper-technical approach would cause damage to the very concept of consumerism. (Para 23) Alpha G184 Owners Association v. Magnum International Trading Company Pvt. Ltd., 2023 LiveLaw (SC) 442 : AIR 2023 SC 2527

Amend Consumer Protection Rules on appointment process of commission members within 3 months : Supreme Court to Centre, States. In Re: Inaction of the Governments in appointing President and Members/Staff of Districts and State Consumer Disputes Redressal Commission and inadequate infrastructure across India v. Union of India, 2023 LiveLaw (SC) 201

Builder has obligation to seek completion certificate-It is no part of the flat owner's duty to apply for a completion certificate. (Para 18, 19) Debashis Sinha v. RNR Enterprise, 2023 LiveLaw (SC) 92 : AIR 2023 SC 840 : (2023) 3 SCC 195

Commercial enterprises can raise consumer disputes in relation to goods or services unconnected to profit generation. National Insurance Co. Ltd. v. Harsolia Motors, 2023 LiveLaw (SC) 313

Consumer Commissions can't decide complaints involving highly disputed facts, criminal or tortious acts. Chairman & Managing Director, City Union Bank Ltd. v. R. Chandramohan, 2023 LiveLaw (SC) 251 : AIR 2023 SC 1762

Consumer disputes are non-arbitrable, consumers can't be compelled into arbitration. M. Hemalatha Devi v. B. Udayasri, 2023 LiveLaw (SC) 902

Definition of 'Consumer' includes 'Consumers'; Joint complaint by multiple consumers need not be filed in representative capacity. Alpha G184 Owners Association v. Magnum International Trading Company Pvt. Ltd., 2023 LiveLaw (SC) 442 : AIR 2023 SC 2527

Flat owners do not forfeit the right to claim amenities promised by the developer by taking possession of the apartments- Supreme Court disapproves of NCDRC order dismissing homebuyers' claim on the ground that knowingly purchased the apartments. Debashis Sinha v. RNR Enterprise, 2023 LiveLaw (SC) 92 : AIR 2023 SC 840 : (2023) 3 SCC 195

Flat owners don't forfeit the right to claim amenities promised by builder by taking possession of apartments. Debashis Sinha v. RNR Enterprise, 2023 LiveLaw (SC) 92 : AIR 2023 SC 840 : (2023) 3 SCC 195

Flat-owners' rights - If complaints were to be spurned on the specious ground that the consumers knew what they were purchasing, the object and purpose of the enactment would be defeated-in most cases, the jurisdiction of NCDRC is invoked post-purchase-Any deficiency detected post-purchase opens up an avenue for the aggrieved consumer to seek relief before the consumer for a. (Para 11) Debashis Sinha v. RNR Enterprise, 2023 LiveLaw (SC) 92 : AIR 2023 SC 840 : (2023) 3 SCC 195

If commercial use is by purchasers themselves for earning livelihood by self-employment, they'll be 'consumers'. Rohit Chaudhary v. Vipul Ltd., 2023 LiveLaw (SC) 754 : AIR 2023 SC 4229 : (2024) 1 SCC 8

Manufacturing Defect - the Supreme Court directs Ford India Ltd. to pay Rs. 42 lakhs as compensation to a consumer who purchased a car which had manufacturing defects. Ford India Pvt. Ltd. v. Medical Eleborate Concept Pvt. Ltd., 2023 LiveLaw (SC) 515

'NCDRC acted as if they were experts' : Supreme Court sets aside order upholding insurance claim repudiation. S.S. Cold Storage India Pvt. Ltd. v. National Insurance Company Ltd., 2023 LiveLaw (SC) 619 : (2024) 2 SCC 467

Party has right to address final arguments before NCDRC despite not filing written version. ARN Infrastructure India Ltd. v. Hara Prasad Ghosh, 2023 LiveLaw (SC) 763

Party not entitled to seek relief that has not been prayed for. Rajasthan Art Emporium v. Kuwait Airways, 2023 LiveLaw (SC) 975 : (2024) 2 SCC 570

Railways not liable for theft of passenger's belongings - the theft of personal belongings of a Passenger is not “deficiency of service” by Railways. If the passenger is not able to protect his own belongings, the Railways cannot be held responsible. The Supreme court set aside orders passed by Consumer forum whereby Railways was directed to reimburse the stolen amount of cash to the Passenger. Station Superintendent v. Surender Bhola, 2023 LiveLaw (SC) 487

Rs. 2 Crore compensation for bad haircut excessive: Supreme Court asks NCDRC to decide model's claim afresh. ITC Ltd. v. Aashna Roy, 2023 LiveLaw (SC) 87 : AIR 2023 SC 827 : (2023) 5 SCC 655

SLP against NCDRC's order passed in exercise of its appellate/revisional jurisdiction cannot be entertained. Universal Sompo General Insurance Co. Ltd. v. Suresh Chand Jain, 2023 LiveLaw (SC) 567 : AIR 2023 SC 3699

Supreme Court Paves way for lawyers with 10 yrs experience to be considered for consumer commission appointments; upholds striking down of centre's rules. Ministry of Consumer Affairs v. Dr. Mahindra Bhaskar Limaye, 2023 LiveLaw (SC) 161 : AIR 2023 SC 1371

Supreme Court refuses to hold pharma company liable for not mentioning adverse reaction of vaccination, says doctor should've advised patient. Prakash Bang v. Glaxo Smithkline Pharmaceuticals Ltd., 2023 LiveLaw (SC) 764 : AIR 2023 SC 4217

Supreme Court terms Rs 2 crores compensation awarded by the NCDRC for a bad hair-cut suffered by a model at a 5-star hotel saloon as excessive and disproportionate-quantification of compensation has to be based upon material evidence and not on the mere asking. (Para 13, 15) ITC Ltd. v. Aashna Roy, 2023 LiveLaw (SC) 87 : AIR 2023 SC 827 : (2023) 5 SCC 655

Supreme Court upholds the Bombay High Court judgment which struck down provisions of the Consumer Protection Rules which excluded persons with 10 years professional experience from appointment to State Consumer Commissions and District Consumer Forums - for appointment of President and Members of the State Commission and District Commission, the appointment shall be made on the basis of performance in written test consisting of two papers. Ministry of Consumer Affairs v. Dr. Mahindra Bhaskar Limaye, 2023 LiveLaw (SC) 161 : AIR 2023 SC 1371

Supreme Court's comments on flat-owners' plight - Now-a-days, flat owners seldom purchase flats with liquid cash. Flats are purchased on the basis of finances being advanced by banks and other financial institutions. Once a flat is booked and the prospective flat owner enters into an agreement for loan, instalments fall due to be paid to clear the debt irrespective of whether the flat is ready for being delivered possession. The usual delays that are associated with construction activities result in undue anxiety, stress, and harassment for which many a prospective flat owner, it is common knowledge, even without the project/flat being wholly complete is left with no other option but to take possession. Debashis Sinha v. RNR Enterprise, 2023 LiveLaw (SC) 92 : AIR 2023 SC 840 : (2023) 3 SCC 195

Tests to determine if goods or services were purchased or availed for commercial purposes - Two fold tests- (i) whether the goods are purchased for resale or for commercial purpose; or (ii) whether the services are availed for any commercial purpose - If the goods are purchased for resale or for commercial purpose, then such consumer would be excluded from the coverage of the Act, 1986. For example, if a manufacturer who is producing product A, for such production he may be required to purchase articles which may be raw material, then purchase of such articles would be for commercial purpose. As against this, if the same manufacturer purchases a refrigerator, television or air-conditioner for his use at his residence or even for his office has no direct or indirect nexus to generate profits, cannot be held to be for commercial purpose and for afore-stated reason he is qualified to approach the Consumer Forum under the Act, 1986 - Similarly, a hospital which hires services of a medical practitioner, it would be a commercial purpose, but if a person avails such services for his ailment, it would be held to be a noncommercial purpose. (Para 39) National Insurance Co. Ltd. v. Harsolia Motors, 2023 LiveLaw (SC) 313

Consumer Protection (Qualification for appointment, method of recruitment, procedure of appointment, term of office, resignation and removal of President and Members of State Commission and District Commission) Rules, 2020

Consumer Protection (Qualification for appointment, method of recruitment, procedure of appointment, term of office, resignation and removal of President and Members of State Commission and District Commission) Rules, 2020 - Rule 3 prescribed a minimum professional experience of 20 years for consideration to appointment of members as State Consumer Commissions- Rule 4 prescribed a minimum professional experience of 20 years for consideration to appointment of members as District Consumer Commissions- Rules struck down as violative of the SC judgment in Madras Bar Association judgment which held that lawyers with 10 years of professional experience are eligible for appointment as Tribunal members -the High Court in the impugned judgment and order has rightly observed and held that Rule 3(2)(b), Rule 4(2)(c) and Rule 6(9) of the Rules, 2020 which are contrary to the decisions of this Court in the cases of State of Uttar Pradesh and Others Vs. All Uttar Pradesh Consumer Protection Bar Association; (2017) 1 SCC 444 and the Madras Bar Association Vs. Union of India and Another; (2021) 7 SCC 369 are unconstitutional and arbitrary. (Para 6.4) Ministry of Consumer Affairs v. Dr. Mahindra Bhaskar Limaye, 2023 LiveLaw (SC) 161 : AIR 2023 SC 1371

Consumer Protection (Qualification for appointment, method of recruitment, procedure of appointment, term of office, resignation and removal of President and Members of State Commission and District Commission) Rules, 2020 - Rule 6(9) lacks transparency and it confers uncontrolled discretion and excessive power to the Selection Committee. Under Rule 6(9), the Selection Committee is empowered with the uncontrolled discretionary power to determine its procedure to recommend candidates to be appointed as President and Members of the State and District Commission. (Para 6.5) Ministry of Consumer Affairs v. Dr. Mahindra Bhaskar Limaye, 2023 LiveLaw (SC) 161 : AIR 2023 SC 1371

Consumer Protection (Qualification for appointment, method of recruitment, procedure of appointment, term of office, resignation and removal of President and Members of State Commission and District Commission) Rules, 2020 - Till the amendments are made in order to do complete justice under A. 142 we direct that in future a person having Bachelor's degree from a recognised university and who is a person of ability, integrity standing and having special knowledge and professional experience of not less than 10 years in consumer affairs, law, public affairs, administration etc. shall be treated as qualified for appointment as President and member of State and District Commission. We also direct that for appointment the appointment shall be based on the performance in 2 papers. Qualifying marks in the papers shall be 50% and there must be a viva for 50 marks each. (Para 8.2) Ministry of Consumer Affairs v. Dr. Mahindra Bhaskar Limaye, 2023 LiveLaw (SC) 161 : AIR 2023 SC 1371

Consumer Protection Act, 1986

The Consumer Protection Act' is definitely a piece of welfare legislation with the primary purpose of protecting the interest of a consumer. Consumer disputes are assigned by the legislature to public fora, as a measure of public policy. Therefore, by necessary implication such disputes will fall in the category of non­arbitrable disputes, and these disputes should be kept away from a private fora such as 'arbitration', unless both the parties willingly opt for arbitration over the remedy before public fora. M. Hemalatha Devi v. B. Udayasri, 2023 LiveLaw (SC) 902

The Act, 1986 is a social benefit-oriented legislation and, therefore, the Court has to adopt a constructive liberal approach while construing the provisions of the Act - The provisions of the Act, 1986 thus have to be construed in favour of the consumer to achieve the purpose of enactment as it is a social benefit-oriented legislation. (Para 21, 24) National Insurance Co. Ltd. v. Harsolia Motors, 2023 LiveLaw (SC) 313

The proceedings before the Commission being summary in nature, the complaints involving highly disputed questions of facts or the cases involving tortious acts or criminality like fraud or cheating, could not be decided by the Forum/Commission under the said Act. The “deficiency in service”, as well settled, has to be distinguished from the criminal acts or tortious acts. There could not be any presumption with regard to the wilful fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance in service, as contemplated in Section 2(1)(g) of the Act. The burden of proving the deficiency in service would always be upon the person alleging it. (Para 12) Chairman & Managing Director, City Union Bank Ltd. v. R. Chandramohan, 2023 LiveLaw (SC) 251 : AIR 2023 SC 1762

The Supreme Court has upheld the order of the National Consumer Disputes Redressal Commission (NCDRC) where the Commission had held that no case of deficiency of service was made out against drug-manufacturer, Glaxo Smithkline Pharmaceuticals Ltd, in relation to administration of vaccine Engerix-B. The complainant had failed to prove the allegations with the minimal required evidence even on a preponderance of probability. Non-mentioning of 'myositis' as an adverse reaction in the literature accompanying the injection or on the 'vial', did not amount to 'deficiency of service' on part of the pharmaceutical company, more particularly when the adverse reaction was to the minimal level, i.e., 0.02 in one million. Prakash Bang v. Glaxo Smithkline Pharmaceuticals Ltd., 2023 LiveLaw (SC) 764 : AIR 2023 SC 4217

The Supreme Court has upheld the order of the National Consumer Disputes Redressal Commission (NCDRC) where the Commission had held that no case of deficiency of service was made out against drug-manufacturer, Glaxo Smithkline Pharmaceuticals Ltd, in relation to administration of vaccine Engerix-B. The complainant had failed to prove the allegations with the minimal required evidence even on a preponderance of probability. Non-mentioning of 'myositis' as an adverse reaction in the literature accompanying the injection or on the 'vial', did not amount to 'deficiency of service' on part of the pharmaceutical company, more particularly when the adverse reaction was to the minimal level, i.e., 0.02 in one million. Prakash Bang v. Glaxo Smithkline Pharmaceuticals Ltd., 2023 LiveLaw (SC) 764

There is no such exclusion from the definition of the term “consumer” either to a commercial enterprise or to a person who is covered under the expression “person” defined in Section 2(1)(m) of the Act, 1986 merely because it is a commercial enterprise. (Para 36) National Insurance Co. Ltd. v. Harsolia Motors, 2023 LiveLaw (SC) 313

Whether a commercial enterprise can be held to be a "consumer" in relation to dispute relating to insurance policy availed by it - Held yes in the facts of the case - hiring of insurance policy is clearly an act for indemnifying a risk of loss/damages and there is no element of profit generation - clarifies that it is not a general rule and depends on the facts of the case. (Para 44 to 47) National Insurance Co. Ltd. v. Harsolia Motors, 2023 LiveLaw (SC) 313

Consumer Protection Act, 1986; Section 12(1)(c) – Code of Civil Procedure, 1908; Order 1 Rule 8 - The need for the application of Order I Rule 8 CPC, which speaks of a plaintiff representing the other public as a whole would be required only in a case involving a complaint under Section 12(1)(c) of the 1986 Act. In other words, it does not have any application when similarly placed complainants jointly make a complaint seeking the very same relief. In such a case, there is no question of Order I Rule 8 CPC being complied with as they do not represent the others, particularly when there is no larger public interest involved. Such complainants seek reliefs for themselves and nothing beyond. (Para 17) Alpha G184 Owners Association v. Magnum International Trading Company Pvt. Ltd., 2023 LiveLaw (SC) 442 : AIR 2023 SC 2527

Consumer Protection Act, 1986; Section 2(1)(b)(i) – Definition of 'consumer' includes 'consumers' - Joint complaint by multiple consumers need not be filed in representative capacity. Consumer Protection Act, 1986; Section 13(6) – Code of Civil Procedure, 1908; Order 1 Rule 8 - When a few consumers who have the same interest seeking the same relief file a joint complaint without any larger public interest involved, it need not be filed in a representative capacity. Alpha G184 Owners Association v. Magnum International Trading Company Pvt. Ltd., 2023 LiveLaw (SC) 442 : AIR 2023 SC 2527

Consumer Protection Act, 1986; Section 2(1)(d) - 'consumer' - 'commercial purpose' - A person buying goods either for resale or for use in large-scale profit-making activity, will not be a 'consumer' entitled to protection of the Act - If the dominant purpose of purchasing the goods or services is for a profit motive and the said fact is evident from the record, such purchaser would not fall under the ambit of 'consumer', as defined under Section 2(1)(d) of the Act. However, the Explanation clarifies that even purchases in certain situations for 'commercial purposes' would not take within its sweep the purchaser out of the definition of expression 'consumer'. In other words, if the commercial use is by the purchaser himself for the purpose of earning his livelihood by means of self-employment, such purchaser of goods would continue to be a 'consumer'. Rohit Chaudhary v. Vipul Ltd., 2023 LiveLaw (SC) 754 : AIR 2023 SC 4229 : (2024) 1 SCC 8

Consumer Protection Act, 1986; Section 2(1)(d) - 'consumer' - 'commercial purpose' - A person buying goods either for resale or for use in large-scale profit-making activity, will not be a 'consumer' entitled to protection of the Act - If the dominant purpose of purchasing the goods or services is for a profit motive and the said fact is evident from the record, such purchaser would not fall under the ambit of 'consumer', as defined under Section 2(1)(d) of the Act. However, the Explanation clarifies that even purchases in certain situations for 'commercial purposes' would not take within its sweep the purchaser out of the definition of expression 'consumer'. In other words, if the commercial use is by the purchaser himself for the purpose of earning his livelihood by means of self-employment, such purchaser of goods would continue to be a 'consumer'. Rohit Chaudhary v. Vipul Ltd., 2023 LiveLaw (SC) 754 : AIR 2023 SC 4229 : (2024) 1 SCC 8

Consumer Protection Act, 1986; Section 2(1)(d) - Taking a wide meaning of the words “for any commercial purpose”, it would mean that the goods purchased or services hired should be used in any activity directly intended to generate profit. Profit is the main aim of commercial purpose, but in a case where goods purchased or services hired is an activity, which is not directly intended to generate profit, it would not be a commercial purpose. (Para 40) National Insurance Co. Ltd. v. Harsolia Motors, 2023 LiveLaw (SC) 313

Consumer Protection Act, 1986; Section 21(a)(i) - Consumer Protection Act, 2019; Section 58(1)(a)(i) or 58(1)(a)(ii) - Appeal against order of National Commission - An aggrieved party can approach the Supreme Court under Article 136 of the Constitution for grant of special leave to appeal against an order of the National Consumer Disputes Redressal Commission (NCDRC) only if it is passed by the Commission in its original jurisdiction. No further appeal will lie against the orders passed by the NCDRC in exercise of its appellate or revisional jurisdiction. (Para 17) Universal Sompo General Insurance Co. Ltd. v. Suresh Chand Jain, 2023 LiveLaw (SC) 567

Consumer Protection Act, 1986; Section 22(1) r/w. 13(4)(iv) – Insurance claim - Leakage of gas - Reports of the loss Assessor and experts – Held, NCDRC made observations in the impugned judgment as if its members were experts in the relevant field and clothed with authority to sit in appeal over the same. The leak of ammonia gas was not occasioned due to wear and tear as claimed by the insurance company but was the outcome of an accident which was not foreseen and beyond its control and not covered by any of the exceptions in the Policy so as to entitle the company to claim immunity for the ultimate purpose of repudiating the insurance claim. The NCDRC committed serious error by not giving the reports placed on record the extent of credence the same deserved. The manner in which the NCDRC dealt with such reports was not proper and legal; major part of the reports could not have been rejected and only stray observations relied upon to support the conclusions. This is one of the foremost reasons which compels to interfere with the impugned judgment and order. Repudiation of the insurance claim, on facts and in the circumstances, is held to amount to deficiency in service on its part. Therefore, see no reason to accept any of the grounds assigned by the NCDRC for rejection of the Complaint. (Para 34 – 34) S.S. Cold Storage India Pvt. Ltd. v. National Insurance Company Ltd., 2023 LiveLaw (SC) 619 : (2024) 2 SCC 467

Consumer Protection Act, 2019

Consumer disputes are non-arbitrable disputes and a party cannot be compelled into arbitration just because they are a signatory to an arbitration agreement. M. Hemalatha Devi v. B. Udayasri, 2023 LiveLaw (SC) 902

The 2019 Act facilitates the consumers to approach the forums by providing a very flexible procedure. It is meant to encourage consumerism in the country. Any technical approach in construing the provisions against the consumer would go against the very objective behind the enactment. (Para 15) Alpha G184 Owners Association v. Magnum International Trading Company Pvt. Ltd., 2023 LiveLaw (SC) 442 : AIR 2023 SC 2527

Consumer Protection Rules, 2020

Consumer Protection Rules, 2020 - Supreme Court directs Centre and States to amend the rules in terms of the directions in Secretary, Ministry of Consumer Affairs v. Dr. Mahindra Bhaskar Limaye, 2023 LiveLaw (SC) 161 within a period of three months. In Re: Inaction of the Governments in appointing President and Members/Staff of Districts and State Consumer Disputes Redressal Commission and inadequate infrastructure across India v. Union of India, 2023 LiveLaw (SC) 201

Contempt of Court

NCLAT judicial member facing Supreme Court's contempt notice resigns; SC slams tribunal for defying its direction. Orbit Electricals Pvt. Ltd. v. Deepak Kishan Chhabaria, 2023 LiveLaw (SC) 957

Supreme Court shocked at advocate telling High Court that he won't argue before particular Bench, issues contempt notice. Krishna Kumar v. State of Uttar Pradesh, 2023 LiveLaw (SC) 1053

Litigants liable for civil contempt on violating undertaking given on their behalf by advocate to court. Balwantbhai Somabhai Bhandari v. Hiralal Somabhai Contractor, 2023 LiveLaw (SC) 750 : AIR 2023 SC 4390

'Contempt petition can't be filed against registry for not listing case on date specified by Court' : Supreme Court dismisses advocate's plea. Manoj v. State of U.P., 2023 LiveLaw (SC) 677

Supreme Court closes plea challenging Calcutta HC's contempt sentence against Andaman & Nicobar LG, Chief Secretary. Admiral D.K. Joshi v. Andaman Sarvajanik Nirman Vibhag Mazdoor Sangh, 2023 LiveLaw (SC) 656

Supreme Court imposes cost on State of U.P. for delay in complying with direction for premature release of 4 convicts. Mahendra v. Rajesh Kumar Singh, 2023 LiveLaw (SC) 588

Doctor's license cannot be suspended by the Court as penalty in contempt proceedings. Gostho Behari Das v. Dipak Kumar Sanyal, 2023 LiveLaw (SC) 577

'High Court could have considered unconditional apology': Supreme Court grants relief to ntpc officers sentenced by Telangana HC for contempt. Gurudeep Singh v. Regonda Srinivas, 2023 LiveLaw (SC) 530

Supreme Court sentences NRI father to 6 months imprisonment, imposes Rs 25 lakhs fine violating directions to bring minor son to india. Meenal Bhargava v. Naveen Sharma, 2023 LiveLaw (SC) 475

Advocate making baseless allegation that another lawyer took money in judge's name; Supreme Court affirms contempt of court proceedings. Gunjan Sinha @ Kanishk Sinha v. State of West Bengal, 2023 LiveLaw (SC) 230

The Supreme Court initiates suo motu contempt proceedings against TN police officer for concealing material facts. Sundar @ Sundarrajan v. State by Inspector of Police, 2023 LiveLaw (SC) 217

Courts should not summon the appearance of officials at the “Drop of the Hat''. State of U.P. v. Prahalad Singh, 2023 LiveLaw (SC) 176

When the highest court of the country has passed an order, the collector cannot await permission to implement it. Junagadh Municipal Corporation v. Adarsh Cooperative Society, 2023 LiveLaw (SC) 103

Contempt of Courts Act, 1971

Contempt of Courts Act, 1971 - Supreme Court affirms contempt of court proceedings against advocate for raising frivolous allegation that another lawyer was taking money from clients in the name of judges - Reduces penalty from Rupees 2 lakhs to Rs 1 Lakh. Gunjan Sinha @ Kanishk Sinha v. State of West Bengal, 2023 LiveLaw (SC) 230

Contempt of Courts Act, 1971 - The Supreme Court has sentenced a non-resident Indian to six months imprisonment and imposed a fine of Rs 25 lakhs for contempt of court, for failing to bring back his minor son to India in terms of the orders passed by the top court from time to time and the undertaking given by him before the court to this effect. The acts and omissions of the contemnor, amounted to both civil and criminal contempt, calling for a strict action against him. The power of the court to punish a person for contempt is unrestricted by the Act. Meenal Bhargava v. Naveen Sharma, 2023 LiveLaw (SC) 475

Contempt of Court Act, 1971 - Supreme Court imposes cost on State of Uttar Pradesh for delay in complying with direction for premature release of 4 convicts. Mahendra v. Rajesh Kumar Singh, 2023 LiveLaw (SC) 588

Contempt of Courts Act, 1971; Section 12 - Doctor's license cannot be suspended as penalty in contempt proceedings. (Para 19 -21) Gostho Behari Das v. Dipak Kumar Sanyal, 2023 LiveLaw (SC) 577

Contempt of Courts Act, 1971 - Although the transfer of the suit property pendente lite may not be termed as void ab initio yet when the court is looking into such transfers in contempt proceedings the court can definitely declare such transactions to be void in order to maintain the majesty of law. Apart from punishing the contemnor, for his contumacious conduct, the majesty of law may demand that appropriate directions be issued by the court so that any advantage secured as a result of such contumacious conduct is completely nullified. This may include issue of directions either for reversal of the transactions by declaring such transactions to be void or passing appropriate directions to the concerned authorities to ensure that the contumacious conduct on the part of the contemnor does not continue to enure to the advantage of the contemnor or any one claiming under him. (Para 116 (iii)) Balwantbhai Somabhai Bhandari v. Hiralal Somabhai Contractor, 2023 LiveLaw (SC) 750

Contempt of Courts Act, 1971 - The apology tendered should not be accepted as a matter of course and the court is not bound to accept the same. The apology may be unconditional, unqualified and bona fide, still if the conduct is serious, which has caused damage to the dignity of the institution, the same should not be accepted. There ought not to be a tendency by courts, to show compassion when disobedience of an undertaking or an order is with impunity and with total consciousness. (Para 116 (v)) Balwantbhai Somabhai Bhandari v. Hiralal Somabhai Contractor, 2023 LiveLaw (SC) 750

Contempt of Courts Act, 1971 - The beneficiaries of any contumacious transaction have no right or locus to be heard in the contempt proceedings on the ground that they are bona fide purchasers of the property for value without notice and therefore, are necessary parties. Contempt is between the court and the contemnor and no third party can involve itself into the same. (Para 116 (iv)) Balwantbhai Somabhai Bhandari v. Hiralal Somabhai Contractor, 2023 LiveLaw (SC) 750

Contempt of Courts Act, 1971 - There exists a distinction between an undertaking given to a party to the lis and the undertaking given to a court. The undertaking given to a court attracts the provisions of the Act 1971 whereas an undertaking given to a party to the lis by way of an agreement of settlement or otherwise would not attract the provisions of the Act 1971. In the facts of the present case, we hold that the undertaking was given to the High Court and the breach or disobedience would definitely attract the provisions of the Act 1971. (Para 116 (ii)) Balwantbhai Somabhai Bhandari v. Hiralal Somabhai Contractor, 2023 LiveLaw (SC) 750

Contempt of Courts Act, 1971; Section 2 (b) - Assurance in the form of an undertaking given by a counsel / advocate on behalf of his client to the court; the wilful breach or disobedience of the same would amount to “civil contempt”. (Para 116 (i)) Balwantbhai Somabhai Bhandari v. Hiralal Somabhai Contractor, 2023 LiveLaw (SC) 750

Contract

Awarding Govt. contracts through public tenders preferable; Departure from tender route must be reasonable. Indian Medicines Pharmaceuticals Corporation Ltd. v. Kerala Ayurvedic Co Operative Society Ltd., 2023 LiveLaw (SC) 6 : AIR 2023 SC 314 : (2023) 1 SCR 473

Courts should exercise restraint while exercising judicial review in contracts involving complex technical issues. BTL EPC Ltd. v. Macawber Beekay Pvt. Ltd; 2023 LiveLaw (SC) 834

Deviation from plain terms of contract warranted only when it serves business efficacy better. Maharashtra State Electricity Distribution Company Ltd. v. Ratnagiri Gas and Power Pvt. Ltd., 2023 LiveLaw (SC) 983 : (2024) 1 SCC 333

Government Contracts - Government action must be just, fair and reasonable and in accordance with the principles of Article 14; and (ii) While government can deviate from the route of tenders or public auctions for the grant of contracts, the deviation must not be discriminatory or arbitrary. The deviation from the tender route has to be justified and such a justification must comply with the requirements of Article 14 - Government contracts involve expenditure out of the public exchequer. Since they involve payment out of the public exchequer, the moneys expended must not be spent arbitrarily. The State does not have absolute discretion while spending public money. (Para 21-22) Indian Medicines Pharmaceuticals Corporation Ltd. v. Kerala Ayurvedic Co Operative Society Ltd., 2023 LiveLaw (SC) 6 : AIR 2023 SC 314 : (2023) 1 SCR 473

Judicial review of tenders - Interpretation of tendering authority must prevail unless there malafides are alleged or proved. Sarr Freights Corporation v. Cjdarcl Logistics Ltd; 2023 LiveLaw (SC) 1006

No judicial review in commercial matters unless a case of arbitrariness, mala fide, bias or irrationality is made out. Tender / Contract - Courts not to needlessly interfere in contracts involving technical issues. The judges do not possess the necessary expertise to adjudicate technical issues beyond their domain. Restraint must be practiced in cases where the Courts are aware that their interference in technical commercial matters would incur loss to the Public Exchequer. Tata Motors Ltd. v. BrihanMumbai Electric Supply & Transport Undertaking, 2023 LiveLaw (SC) 467 : AIR 2023 SC 2717

Owner / employer who authored tender documents is the best person to understand & appreciate it. Om Gurusai Construction Company v. V.N. Reddy, 2023 LiveLaw (SC) 694 : AIR 2023 SC 4148

Party estopped from questioning the amount levied as per contract after signing it. Chief Engineer, Water Resources Department v. Rattan India Power Ltd., 2023 LiveLaw (SC) 32 : AIR 2023 SC 422 : (2023) 1 SCR 507

Principle of Estoppel - Signing the agreement and issuing an undertaking would estop Respondent No.1 from challenging the levy of Rs.1,00,000 as irrigation restoration charges- Court refuses to challenge the levy of 'irrigation restoration charges' by the Water Department from a company for supplying water for industrial purposes as per agreement. Chief Engineer, Water Resources Department v. Rattan India Power Ltd., 2023 LiveLaw (SC) 32 : AIR 2023 SC 422 : (2023) 1 SCR 507

Supreme Court imposes cost of Rs. 65 lakhs on Punjab State Power Corp Ltd for instituting multiple litigations to wriggle out of payment obligations. Nabha Power Ltd. v Punjab State Power Corporation Ltd, 2023 LiveLaw (SC) 876 : AIR 2023 SC 5033

Tenders - The process of inviting tenders ensures a level playing field for competing entities. While there may be situations which warrant a departure from the precept of inviting tenders or conducting public auctions, the departure must not be unreasonable or discriminatory. (Para 16) Indian Medicines Pharmaceuticals Corporation Ltd. v. Kerala Ayurvedic Co Operative Society Ltd., 2023 LiveLaw (SC) 6 : AIR 2023 SC 314 : (2023) 1 SCR 473

The Court should not ordinarily interfere in matters relating to tender or contract. A writ court should refrain from imposing its decision over the employer with respect to whether or not to accept the bid of a tenderer, unless something very gross or palpable is pointed out. Tata Motors Ltd. v. Brihan Mumbai Electric Supply & Transport Undertaking, 2023 LiveLaw (SC) 467 : AIR 2023 SC 2717

The courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in Judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. The courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give “fair play in the joints” to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer. Tata Motors Ltd. v. Brihan Mumbai Electric Supply & Transport Undertaking, 2023 LiveLaw (SC) 467 : AIR 2023 SC 2717

When the Court initiates fresh tender at a stage when the contract is underway, the same consumes time and incurs losses to the public exchequer. The financial burden / implications on the public exchequer that the State may have to meet with if the Court directs issue of a fresh tender notice, should be one of the guiding factors that the Court should keep in mind. Tata Motors Ltd. v. Brihan Mumbai Electric Supply & Transport Undertaking, 2023 LiveLaw (SC) 467 : AIR 2023 SC 2717

Co-operative Societies Act, 1960 (Maharashtra)

Co-operative Societies Act, 1960 (Maharashtra) - Section 81(5B) of the Act casts a positive obligation on the auditor or the Registrar to file an FIR. It does not use any negative expression to prohibit persons other than the auditor or the Registrar from registering an FIR. Therefore, it would be contrary to basic principles of statutory construction to conclude that Section 81(5B) debars persons other than the auditor or the Registrar from filing an FIR. (Para 24) Dhanraj N. Asawani v. Amarjeetsingh Mohindersingh Basi, 2023 LiveLaw (SC) 652

Copyright

In suit for passing off, the plaintiff is required to prove figures of sale/ advertisement expenses to establish goodwill. Brihan Karan Sugar Syndicate Pvt. Ltd. v. Yashwantrao Mohite Krushna Sahakari Sakhar Karkhana, 2023 LiveLaw (SC) 784 : AIR 2023 SC 4321 : (2024) 2 SCC 577

Copyright Act, 1957

Copyright Act, 1957 – Infringement - Passing-off Action - In a suit for passing off, for establishing goodwill of the product, it is necessary for the plaintiff to prove not only the figures of sale of the product but also the expenditure incurred on promotion and advertisement of the product. Though the statement of sales, advertisement and sale promotion expenses certified by a Chartered Accountant, were exhibited by the plaintiff in the suit before the Trial Court, the Chartered Accountant was not examined to prove the statements. Though the statements may constitute a material for examining whether a prima facie case was made out against the opposite party by the plaintiff, however, at the time of the final hearing of the suit, the figures must be proved in a manner known to law. (Para 13) Brihan Karan Sugar Syndicate Pvt. Ltd. v. Yashwantrao Mohite Krushna Sahakari Sakhar Karkhana, 2023 LiveLaw (SC) 784 : AIR 2023 SC 4321 : (2024) 2 SCC 577

Corporation

Any loss caused to State Corporation is loss to the public exchequer: Supreme Court directs lessee to pay conversion charges to KSEDCL. Karnataka State Electronics Development Corporation Ltd. v Kumaon Entertainment and Hospitalities Pvt. Ltd., 2023 LiveLaw (SC) 863 : AIR 2023 SC 5044

Corruption

PC Act - Once it is proved that a public servant received gratification beyond legal remuneration, statutory presumption operates. P. Sarangapani v. State of Andhra Pradesh, 2023 LiveLaw (SC) 819 : AIR 2023 SC 4739

Public servants lose immunity in pre-2014 corruption cases; Supreme Court clarifies that striking down of Sec 6A DSPE Act has retrospective effect. Central Bureau of Investigation v. R.R. Kishore, 2023 LiveLaw (SC) 770

Prevention of Corruption Act - HC cannot reverse special court findings on validity of sanction unless it finds that failure of justice had occurred. State of Karnataka Lokayukta Police v. S. Subbegowda, 2023 LiveLaw (SC) 595 : AIR 2023 SC 3770

Approver need not be examined as witness by magistrate when cognizance is taken by Special Court under PC Act. A. Srinivasulu v. State of Rep. by the Inspector of Police, 2023 LiveLaw (SC) 485

Failure to plead material facts concerning alleged corrupt practice is fatal to an election petition. Senthilbalaji V. v. A.P. Geetha, 2023 LiveLaw (SC) 471

Supreme Court acquits man accused of taking rs 300 bribe twenty years ago. Jagtar Singh v. State of Punjab, 2023 LiveLaw (SC) 232 : AIR 2023 SC 1567

PC Act - Constitution Bench Judgment allowing circumstantial evidence does not dilute requirement of proof beyond reasonable doubt. Neeraj Dutta v. State (GNCTD), 2023 LiveLaw (SC) 211 : 2023 Cri.LJ 1856 : (2023) 2 SCR 997

Desirable that FIRs in corruption cases aren't quashed at the investigation stage: Supreme Court To High Courts. State of Chattisgarh v. Aman Kumar Singh, 2023 LiveLaw (SC) 158 : AIR 2023 SC 1441

Corruption is the main reason for not achieving equal distribution of wealth; botched investigations of scams a bigger scam. State of Chattisgarh v. Aman Kumar Singh, 2023 LiveLaw (SC) 158 : AIR 2023 SC 1441

Cost

Supreme Court imposes Rs. 3 lakhs costs on Sanjiv Bhatt for petitions against trial judge in alleged drugs planting case. Sanjiv Kumar Rajendrabhai Bhatt v. State of Gujarat, 2023 LiveLaw (SC) 852

Court Deposit

Courts / Tribunals should mandatorily deposit amounts deposited by litigants with the Registry or Office in a bank account - Supreme Court issues directions - All courts and judicial forums should frame guidelines in cases where amounts are deposited with the office / registry of the court / tribunal, that such amounts should mandatorily be deposited in a bank or some financial institution, to ensure that no loss is caused in the future - These guidelines should be embodied in the form of appropriate rules, or regulations of each court, tribunal, commission, authority, agency, etc. exercising adjudicatory power. (Para 35) K.L. Suneja v. Manjeet Kaur Monga, 2023 LiveLaw (SC) 68 : AIR 2023 SC 705

The Supreme Court directs all courts/tribunals to mandatorily deposit amounts deposited by parties with registry in a bank/financial institution. K.L. Suneja v. Manjeet Kaur Monga, 2023 LiveLaw (SC) 68 : AIR 2023 SC 705

Cow

The Supreme Court expresses satisfaction with measures taken by centre & states to prevent lumpy skin disease in cows & cattle. Ashutosh Bansal v. Union of India, 2023 LiveLaw (SC) 1015

Prohibition of cow slaughter to be decided by legislature, court can't compel law making. Mathala Chandrapati Rao v Union of India, 2023 LiveLaw (SC) 535

Part 1: The Complete Supreme Court Annual Digest- 2023 [Part-I]

Part 6: The Complete Supreme Court Annual Digest- 2023 [Part-VI]