Supreme Court Weekly Digest With Subject /Statute Wise Index [March 25 to 31]

Citations 2024 LiveLaw (SC) 256 to 2024 LiveLaw (SC) 268

Arbitration and Conciliation Act, 1996

Arbitration and Conciliation Act, 1996; Section 48 – Enforcement of foreign award in India challenged on grounds of arbitral bias – In India, courts must adopt an internationally recognized narrow standard of public policy, when dealing with the aspect of bias. Refusal of enforcement of foreign award should only be in a rare case where, non- adherence to International Standards is clearly demonstrable. Held, cannot infer bias or likelihood of bias of the Presiding Arbitrator, hence there is no violation of the public policy, which would render the foreign award unenforceable in India. The award debtors have failed to substantiate their allegation of bias, conflict of interest or the failure by the Presiding Arbitrator to render disclosure to the parties, as an objection to the enforcement of the award. Courts across the world have applied a higher threshold of bias to prevent enforcement of an Award than the standards set for ordinary judicial review. The award debtors have failed to meet the high threshold for refusal of enforcement of a foreign award under Section 48 of the Indian Arbitration Act. The decision given by the High Court for enforcement/execution of the foreign award stands approved. (Para 22, 25, 36, 42 & 43) Avitel Post Studioz Ltd. v. Hsbc Pi Holdings (Mauritius) Ltd., 2024 LiveLaw (SC) 267

Arbitration and Conciliation Act, 1996; Section 48 – Challenge of Arbitral bias raised at the enforcement stage – Held, challenge of arbitral bias is raised at the enforcement stage, must be discouraged by Courts to send out a clear message that Indian Courts would ensure enforcement of a foreign Award unless it is demonstrable that there is a clear violation of morality and justice. No setting aside challenge based on bias was raised before the Singapore Courts by the appellants within the limitation period. Since the objection of bias was not raised in appropriate proceedings it could not be raised at the post-award Stage. Held, the Award Debtors should have applied for setting aside of the Award before the Singapore Courts at the earliest point of time. (Para 27, 29 & 42) Avitel Post Studioz Ltd. v. Hsbc Pi Holdings (Mauritius) Ltd., 2024 LiveLaw (SC) 267

Bail

Bail condition restraining political activities violates fundamental rights, can't be imposed. Siba Shankar Das v. State of Odisha, 2024 LiveLaw (SC) 259

Code of Criminal Procedure, 1973

Code of Criminal Procedure, 1973; Section 242(3) and Indian Evidence Act, 1872; Section 138 – The general rule is that witnesses shall be examined in the order laid down in Section 138 of the Indian Evidence Act, 1872. An exception to this rule is Section 242(3) Code of Criminal Procedure, 1973 under which, in a warrant case, the learned Magistrate, by recording reasons, can permit cross-examination of a witness to be postponed till a particular witness or witnesses are examined. Held, recording only the examination-in-chief of 12 prosecution witnesses without recording cross-examination is contrary to the law. (Para 6 & 7) Ekene Godwin v. State of Tamil Nadu, 2024 LiveLaw (SC) 261

Constitution of India

Constitution of India – Right to legal aid – When the examination-in-chief of a prosecution witness is being recorded, the presence of the Advocate for the accused is required, as the advocate has a right to object to a leading or irrelevant question being asked to the witness. The report of trial court records that the evidence of prosecution witnesses was recorded in the presence of the appellants, but their Advocate was not present as they had not engaged any Advocate. Held, after finding that the appellants-accused had not engaged any Advocate, the Trial Court ought to have provided a legal aid Advocate to the appellants accused so that the evidence of the prosecution witnesses could have been recorded in the presence of the Advocate representing the appellants-accused. Recording of evidence in this fashion is not justified even if the High Court had fixed a time-bound schedule for disposal of the case. The trial court could have always sought an extension of time from the High Court. (Para 5 & 6) Ekene Godwin v. State of Tamil Nadu, 2024 LiveLaw (SC) 261

Criminal Law

Criminal Law – Quashing of Charge – Appellants have not made out a case for interference with the order on charge and the order of framing charge. The Court is only required to consider judicially whether the material warrants the framing of charge without blindly accepting the decision of the prosecution. (Para 43) Puneet Sabharwal v. CBI, 2024 LiveLaw (SC) 260

Criminal law – Framing of charge – Even a strong suspicion founded on material on record which is ground for presuming the existence of factual ingredients of an offence would justify the framing of charge against an accused person. (Para 43) Puneet Sabharwal v. CBI, 2024 LiveLaw (SC) 260

Criminal Law – Power of constitutional courts to transfer case to CBI – The powers of the Supreme Court for directing further investigation regardless of the stage of investigation are extremely wide. This can be done even if the chargesheet has been submitted by the prosecuting agency. Held, unresolved crimes tend to erode public trust in institutions which have been established for maintaining law and order. In the present case the investigation has been ineffective is self-evident. Hence, this case needs to be handed over to CBI, for a proper investigation and also to remove any doubts in the minds of the appellants, and to bring the real culprits to justice. Case shall be transferred from SIT to the CBI. (Para 14 & 16) Awungshi Chirmayo v. Government of NCT of Delhi, 2024 LiveLaw (SC) 263

Custodial Death

It is a fact that, in ordinary circumstances, we ought not to invoke our jurisdiction under Article 136 of the Constitution of India to invalidate an order granting bail to an accused. But this criteria, while dealing with the question of granting bail, would not apply in a case of custodial death, where police officials are arraigned as accused. Such alleged offences are of grave and serious nature. Ajay Kumar Yadav v. State of Uttar Pradesh, 2024 LiveLaw (SC) 266

Customs Act, 1962

Customs Act; Section 28AB, 71 & 72 – Applicability of custom duty – In 264 cases which were never placed inside the notified public bonded warehouse, custom duty is no applicable. Since the imported goods (264 cases) were never warehoused inside the notified public bonded warehouse but were unloaded outside the notified area but within the factory premises of the appellant and kept under a shed on permission granted by the Superintendent which permission was neither cancelled nor revoked, question of warehousing the goods covered by the 264 cases within the notified public bonded warehouse did not arise. As a corollary, the further question of improperly or unauthorisedly removing the 264 cases from the notified warehouse to outside the said area but within the factory premises of the appellant attracting Section 71 and the consequences following the same did not arise. Held, the demand raised by the respondent against the appellant as affirmed by the CESTAT qua the 264 cases including levy of customs duty and interest (under section 71 & 28AB) cannot be sustained. (Para 53, 58) Bisco v. Commissioner of Customs and Central Excise, 2024 LiveLaw (SC) 257

Customs Act; Section 28AB, 71 & 72 – Applicability of custom duty – In respect of the missing 27 cases which were found neither inside nor outside the notified warehouse and for which no explanation was given by the Appellant, the CESTAT had correctly held that those 27 cases were improperly or unauthorisedly removed from the notified public bonded warehouse. The demand of customs duty and interest (under section 71 & 28AB) on the 27 cases has been sustained. (Para 54, 58) Bisco v. Commissioner of Customs and Central Excise, 2024 LiveLaw (SC) 257

Drugs and Cosmetics Act, 1940

Drugs and Cosmetics Act, 1940 - Proceedings under the Act initiated on the basis of the complaint of the Police Inspector is legally invalid. Accordingly, the cognizance order is found to be unjustified and is set aside. (Para 9) Rakesh Kumar v. State of Bihar, 2024 LiveLaw (SC) 264

Evidence Act, 1872

Indian Evidence Act, 1872 – Conclusive Evidence – The accused persons had sought to place reliance on income tax returns and income tax assessment orders. Held, income tax returns and orders may be admissible as evidence but are not themselves conclusive proof of lawful source of income under Section 13 of the Prevention of Corruption Act and that independent evidence to corroborate the same would be required. The probative value of value of the Orders of the Income Tax Authorities, including the Order of the Income Tax Appellate Tribunal and the subsequent Assessment Orders, would depend on the nature of the information furnished and findings recorded in the order, and would not ipso facto either conclusively prove or disprove a charge. The High Court has rightly not discharged the appellants based on the Orders of the Income Tax Authorities. (Para 29 & 32) Puneet Sabharwal v. CBI, 2024 LiveLaw (SC) 260

Evidence Law

Evidence Law – Burden of Proof – The threshold of the 'burden of proof' required to be discharged, when challenging a particular charge as an “illegal charge”, is only on the preponderance of probabilities, upon which the onus will shift on the authorities to establish how the particular charge is valid. Railways failed to establish that 444 kms was the correct chargeable distance, hence, it was declared that the said computation was illegal. (Para 121) Union of India v. Indian Oil Corporation Ltd., 2024 LiveLaw (SC) 256

Insolvency and Bankruptcy Code, 2016

Resolution plans are not prepared and submitted by lay persons. They are submitted after the financial statements and data are examined by domain and financial experts, who scan, appraise evaluate the material as available for its usefulness, with caution and scepticism. Inadequacies and paltriness of data are accounted and chronicled for valuations and the risk involved. It is rather strange to argue that the superspecialists and financial experts were gullible and misunderstood the details, figures or data. The assumption is that the resolution applicant would submit the revival/resolution plan specifying the monetary amount and other obligations, after in-depth analysis of the fiscal and commercial viability of the corporate debtor. (Para 15) Deccan Value Investors L.P. v. Dinkar Venkatasubramanian, 2024 LiveLaw (SC) 265

Pointing out the ambiguities or lack of specific details or data, post acceptance of the resolution plan by the Committee of Creditors, should be rejected, except in an egregious case were data and facts are fudged or concealed. Absence or ambiguity of details and particulars should put the parties to caution, and it is for them to ascertain details, and exercise discretion to submit or not submit resolution plan. (Para 15) Deccan Value Investors L.P. v. Dinkar Venkatasubramanian, 2024 LiveLaw (SC) 265

Records of corporate debtor, who are in financial distress, may suffer from data asymmetry, debatable or even wrong data. Thus, the provision for transactional audit etc, but this takes time and is not necessary before information memorandum7 or virtual data room is set up. Financial experts being aware, do tread with caution. Information memorandum is not to be tested applying “the true picture of risk” obligation, albeit as observed by the NCLAT the resolution professional's obligation to provide information has to be understood on “best effort” basis. (Para 16) Deccan Value Investors L.P. v. Dinkar Venkatasubramanian, 2024 LiveLaw (SC) 265

Interpretation of Statutes

Interpretation of statutes – In interpreting a statute or a rule, the court must bear in mind that the legislature does not intend what is unreasonable or impossible. The expression reasonable means rational, according to the dictate of reason and not excessive or immoderate. If a rule leads to an absurdity or manifest injustice from any adherence to it, the court can step in. A statute or a rule ordinarily should be most agreeable to convenience, reason and as far as possible to do justice to all. A law/rule should be beneficial in the sense that it should suppress the mischief and advance the remedy. (Para 80) Union of India v. Indian Oil Corporation Ltd., 2024 LiveLaw (SC) 256

Interim Relief

Interim Relief – Test for grant of interim injunction – The three-fold test is establishing (i) a prima facie case, (ii) balance of convenience and (iii) irreparable loss or harm. This three-fold test must not be applied mechanically, to the detriment of the other party and in the case of injunctions against journalistic pieces, often to the detriment of the public. While granting interim relief, the court must provide detailed reasons and analyze how the three-fold test is satisfied. Merely recording that a prima facie case exists, that the balance of convenience is in favour of the grant of injunction and that an irreparable injury would be caused, would not amount to an application of mind to the facts of the case. The three-fold test cannot merely be recorded as a mantra without looking into the facts on the basis of which an injunction has been sought. (Para 5 & 13) Bloomberg Television v. Zee Entertainment, 2024 LiveLaw (SC) 258

Interim Relief – Interim injunction against publication of journalists – The grant of a pre-trial injunction against the publication of an article may have severe ramifications on the right to freedom of speech of the author and the public's right to know. Courts should not grant ex-parte injunctions except in exceptional cases. In all other cases, injunctions against the publication of material should be granted only after a fullfledged trial is conducted or in exceptional cases, after the respondent is given a chance to make their submissions. An additional consideration of balancing the fundamental right to free speech with the right to reputation and privacy must be borne in mind. (Para 7 & 9) Bloomberg Television v. Zee Entertainment, 2024 LiveLaw (SC) 258

Power of appellate court to interfere in interim injunction – The grant of an interim injunction is an exercise of discretionary power and the appellate court will usually not interfere with the grant of interim relief. However, appellate courts must interfere if the discretion has been exercised “arbitrarily, capriciously, perversely, or where the court has ignored settled principles of law regulating the grant or refusal of interlocutory injunctions. The grant of an ex parte interim injunction by way of an unreasoned order, definitely falls within the above formulation, necessitating interference by the High Court. (Para 12) Bloomberg Television v. Zee Entertainment, 2024 LiveLaw (SC) 258

Juvenile Justice (Care and Protection of Children) Act, 2015

Juvenile Justice (Care and Protection of Children) Act, 2015; Section 15(1) & 19(1) – The procedure provided under Sections 15 and 19 has been held to be mandatory by this Court in the case of Ajeet Gurjar v. State of Madhya Pradesh. Held, there has been a flagrant violation of the mandatory requirements of Sections 15 and 19 of the JJ Act. Neither was the charge sheet against the accused appellant filed before the Board nor was any preliminary assessment conducted by the Board under Section 15, so as to find out whether the accused appellant was required to be tried as an adult. In absence of a preliminary assessment being conducted by the Board under Section 15, and without an order being passed by the Board under Section 15(1) read with Section 18(3), it was impermissible for the trial Court to have accepted the charge sheet and to have proceeded with the trial of the accused. All the proceedings taken against the accused appellant are vitiated as being in total violation of the mandatory procedure prescribed under the JJ Act. (Para 37 & 38) Thirumoorthy v. State, 2024 LiveLaw (SC) 262

Juvenile Justice (Care and Protection of Children) Act, 2015; Section 15(1), 18(3) & 19(1) – Section 15(1) provides that in case where a heinous offence/s (defined under Section 2(33) of the JJ Act) are alleged to have been committed by a child who has completed or is above the age of sixteen years, the Board shall conduct a preliminary assessment with regard to his mental and physical capacity to commit such offence, ability to understand the consequences of the offence and the circumstances in which he committed the offence. Section 18(3) provides that where the Board after preliminary assessment under Section 15 opines that there is a need for the said child to be tried as an adult, then the Board may order transfer of the trial of the case to the Children's Court having jurisdiction to try such offences. By virtue of Section 19(1), the Children's Court, upon receiving such report of preliminary assessment undertaken by the Board under Section 15 may further decide as to whether there is a need for trial of the child as an adult or not. (Para 32, 33 & 34) Thirumoorthy v. State, 2024 LiveLaw (SC) 262

Mines and MInerals

The Supreme Court directed a survey of Karnataka mines for which rehabilitation and reclamation plans are not in place. Samaj Parivartana Samudaya v. State of Karnataka, 2024 LiveLaw (SC) 268

Railways Act, 1989

Railways Act, 1989; Section 106(3) – Applicability of Section 106(3) – Whether the present case is one of 'Overcharge' or 'Illegal Charge'? – Primary challenge is to the chargeable distance of 444 km in itself. The case of the respondent company is not that it has paid anything in excess of what was at the time of booking of the consignment required by law, rather, the respondent's case is that the charge which was required to be paid by the law as prevailing at the time of booking of the consignment was wrong. Held, as the same was admittedly charged as per the prevailing law and not due to any misapplication or mistake i.e., as per the old local distance table, this clearly is not a case of overcharge and would not fall within the four corners of Section 106(3) of the Act, 1989. Further held, the chargeable distance of 444 km was illegal. No infirmity with the impugned judgement and order passed by the High Court. The freight had been paid as per the notified chargeable distance which was later found to be incorrect, it was a case of “illegal charge” and not that of “overcharge”. (Para 105 & 107) Union of India v. Indian Oil Corporation Ltd., 2024 LiveLaw (SC) 256

Railways Act, 1989; Section 106 and Railways Act, 1890; Section 78B – Scope of Section 106(3) – Section 106 deals with notice for claim of compensation and refund of overcharge. Under Section 106(3) a statutory time-period of 6-months has been provided for making a notice of claim for a refund of an 'overcharge' and if the notice of claim is not made within the stipulated period, then the claim becomes time-barred. The rigours of Section 106(3) of the Act, 1989 will only be applicable where the claim is for a refund of an 'overcharge'. (Para 59) Union of India v. Indian Oil Corporation Ltd., 2024 LiveLaw (SC) 256

Railways Act, 1989; Section 106(3) – Condition for Notice for Claim for Refund of Overcharge is: Claim must be for refund of an 'Overcharge', Overcharge must have been paid to the Railway Administration in respect of the goods carried by the railway, notice must be issued within 6-months from the date of payment or delivery of goods for which overcharge was paid, and Notice must be served to the concerned railway administration to whom the overcharge was paid. (Para 43) Union of India v. Indian Oil Corporation Ltd., 2024 LiveLaw (SC) 256

Railways Act, 1989 – Difference between 'overcharge' and 'illegal charge' – An 'overcharge' is any sum charged in excess or more than what was payable as per law. Whereas, for an illegal charge, the sum must not have been payable by law. An Overcharge is effectively concerned with the error in the quantum of what was or should be payable, whereas an illegal charge is solely concerned with whether a particular thing was payable by the law / in conformity with the law or not. (Para 60, 70 & 74) Union of India v. Indian Oil Corporation Ltd., 2024 LiveLaw (SC) 256