2024 Round-Up| Constitution Bench Decisions Of Supreme Court

1. Electoral Bonds Scheme Declared Unconstitutional [5-judge bench]

The Supreme Court in Association for Democratic Reforms & Anr. v. Union of India & Ors. (February 15, 2024) held that anonymous electoral bonds are violative of the right to information under Article 19(1)(a) of the Constitution. Accordingly, the scheme has been struck down as unconstitutional.

The Court considered two key questions, namely, first, whether the non-disclosure of information on voluntary contributions to political parties according to the electoral bond scheme and the amendments to Section 29C of Representation of the People Act, Section 183(3) of the Companies Act, Section 13A(b) of the Income Tax Act are violative of the right to information under Article 19(1)(a) of the Constitution, and second, whether unlimited corporate funding to political parties as envisaged by the amendment to Section 182(1) of the Companies Act violates the principles of free and fair elections.

The Court dealing with a batch of petitions challenging the electoral bonds scheme, introduced through amendments in the Finance Act 2017. The petitioners, including the Association for Democratic Reforms (ADR), the Communist Party of India (Marxist), and Congress leader Jaya Thakur, argued that the anonymity associated with electoral bonds undermines transparency in political funding and encroaches upon voters' right to information. They further contend that the scheme facilitates contributions through shell companies, raising concerns about accountability and integrity in electoral finance.

Bench: CJI DY Chandrachud [authored majority judgment], and Justices Sanjiv Khanna [concurring opinion], BR Gavai, JB Pardiwala, and Manoj Misra

2. No Automatic Vacation Of HC Stay Orders [5-judge bench]

The Supreme Court in High Court Bar Association Allahabad v. State Of Uttar Pradesh & Ors. (February 29, 2024) overturned its 2018 Asian Resurfacing judgment which mandated the interim orders passed by High Courts staying trials in civil and criminal cases will automatically expire after six months from the date of the order, unless expressly extended by the High Courts.

The five-judge bench also held that constitutional courts should refrain from laying down time-bound schedules for cases pending before any other courts. The pattern of pendency of cases in every court including the high court is different and giving out-of-turn priority for certain cases is best left to the concerned judge, who is aware of the the grassroots situation of the court.

Bench: CJI DY Chandrachud, and Justices Abhay S Oka [authored majority judgment], JB Pardiwala, Pankaj Mithal [concurring opinion], and Manoj Misra.

3. Legislative Privileges Of MPs/ MLAs Don't Protect Them From Bribery [7-judge bench]

In Sita Soren vs Union Of India (March 4, 2024), the Supreme Court overturned the 1998 PV Narasimha Rao judgment which held that members of Parliament and legislative assemblies could claim immunity under Articles 105(2) and 194(2) of the Constitution for receiving a bribe in contemplation of a vote or speech in the legislature.

The Court held that the offence of bribery as per the Prevention of Corruption Act is complete the moment the illegal gratification is taken and it is immaterial whether the legislator votes or gives a speech later in the house in terms of the bribe.

"The offence of bribery is agnostic to the performance of the aggrieved action and is crystallised on the exchange of illegal gratification. It does not matter whether the vote is cast in the aggrieved direction or if the vote is cast at all. The offence of bribery is complete at the point in time when the legislator accepts the bribe," the judgment authored by CJI DY Chandrachud stated.

The Court also held that the PV Narasimha judgment resulted in a paradoxical situation where a legislator, who accepts a bribe and votes accordingly is protected whereas a legislator, who despite taking a bribe votes independently is prosecuted. This interpretation is against the letter and spirit of Articles 105 and 194 of the Constitution.

Bench: CJI DY Chandrachud [authored majority judgment], Justices AS Bopanna, MM Sundresh, PS Narasimha, JB Pardiwala, Sanjay Kumar, and Manoj Misra.

4. State's Power To Tax Mineral Rights [9-judge bench]

In Mineral Area Development Authority v. M/S Steel Authority Of India & Ors (July 25, 2024), the Supreme Court held by an 8:1 majority that States have the power to levy tax on mineral rights and that the Union law - Mines and Minerals (Development and Regulation) Act 1957 - do not limit such power of the States.

The key questions that the court examined were (1) whether royalties on mining leases be considered as tax and (2) whether the States have the power to levy royalty/tax on mineral rights after the enactment of Parliamentary law Mines and Minerals (Development and Regulation) Act 1957.

Justice Nagarthna, disagreeing with the majority, held that royalty is in the nature of a tax. Hence, the provisions of the MMDR Act regarding the levy of royalty denude the States of their power to levy taxes on minerals.

Later, the 8-judge bench which constituted the majority rejected the plea of the Union and mining companies to make the judgment apply only prospectively and allowed the States to recover the past dues up to April 1, 2005.

Bench: CJI DY Chandrachud [authored majority judgment], Justices Hrishikesh Roy, Abhay Oka, BV Nagarathna [dissented], JB Pardiwala, Manoj Misra, Ujjal Bhuyan, SC Sharma and AG Masih.

5. Permissibility Of Sub-Classification Within Scheduled Castes For Reservations [7-judge bench]

In the State Of Punjab And Ors. v Davinder Singh And Ors (August 1, 2024): The Supreme Court (by 6-1) held that sub-classification of Scheduled Castes is permissible to grant separate quotas for more backwards within the SC categories.

The States can identify more backwards among the SC categories and can sub-classify them for separate quotas within the quota. The Court clarified that while allowing sub-classification, the State cannot earmark 100% reservation for a sub-class. Also, the State has to justify the sub-classification on the basis of empirical data regarding the inadequacy of representation of the sub-class.

The 7-judge Constitution Bench was considering essentially two aspects: (1) whether sub-classification with the reserved castes be allowed, and (2) the correctness of the decision in E.V.Chinnaiah v. State of Andhra Pradesh, (2005) 1 SCC 394, which held that 'Scheduled Castes' (SCs) notified under Article 341 formed one homogenous group and could not be sub-categorized further.

Four judges of the majority also opined that the 'creamy layer' among the Scheduled Castes and Scheduled Tribes must be identified and excluded from quotas.

In her dissent, Justice Trivedi stated that the Presidential list of Scheduled Castes notified under Article 341 cannot be altered by the States. Castes can be included or excluded from the Presidential list only by a law enacted by the Parliament. Sub-classification will amount to tinkering of the Presidential list. The object of Article 341 was to eliminate any political factors playing a role in the SC-ST list

Bench: CJI DY Chandrachud [concurring opinion for Misra and himself], Justices BR Gavai [concurring opinion], Vikram Nath [concurring opinion], Bela M Trivedi [dissented], Pankaj Mithal [concurring opinion], Manoj Misra and Satish Chandra Sharma [concurring opinion]

6. Validity Of S.6A Of Citizenship Act Recognizing Assam Accord [5-judge bench]

In Re: Section 6A Citizenship Act 1955 (October 17, 2024), the Supreme Court upheld the constitutional validity of Section 6A of the Citizenship Act 1955, which recognized the Assam Accord, by a 4:1 majority.

The majority held that the Parliament had the legislative competence to enact the provision. It held that Section 6A was enacted to balance the humanitarian concerns with the need to protect the local population. It held that the Assam Accord was a political solution to the problem of illegal migration and Section 6A was the legislative solution.

The majority held that Section 6A was enacted to balance the humanitarian concerns with the need to protect the local population.

The majority also held that the cut-off date of March 25, 1971, was rational, as it was the date when Pakistan started Operation Searchlight against the Bangladesh movement in East Pakistan. The objective of the provision must be seen in the backdrop of the Bangladesh war. The majority was of the view that Section 6A was "neither over-inclusive nor under-inclusive."

Justice Pardiwala's line of reasoning was that a piece of legislation may be valid at the time of enactment but by afflux of time, it has become temporarily flawed.

Bench: CJI DY Chandrachud [concurred], Justices Surya Kant [authored majority judgment], MM Sundresh, JB Pardiwala [dissented], and Manoj Misra

7. Power Of States To Regulate Industrial Alcohol Under Term 'Intoxicating Liquor' [9-judge bench]

In State of U.P. v. M/S Lalta Prasad Vaish (October 23, 2024), the Supreme Court held by 8:1 majority, held that the States have the power to regulate 'denatured spirit or industrial alcohol'.

The bench was considering whether 'denatured spirit or industrial alcohol' can be considered 'intoxicating liquor' under State legislation's law-making powers.

The majority concluded by holding that the term "intoxicating liquor" in Entry 8 of List II (State List) of the Seventh Schedule of the Constitution will include industrial alcohol. The majority held that the term "intoxicating liquor" cannot be interpreted narrowly to include only alcohol which is fit for human consumption. It was held that liquids which contain alcohol which can be used or misused for human consumption can be included within the term "intoxicating liquor".

Justice Nagarathna, in her dissent, held that 'industrial alcohol' means alcohol which is not fit for human consumption. An artificial interpretation cannot be adopted to give a different meaning to the term 'intoxicating liquor' which is contrary to the intention of the framers of the Constitution. What is required to be seen is the nature of the product which leads to the intoxicating effect in humans- it is only by the direct consumption of alcohol.

Bench: CJI DY Chandrachud [authored majority judgment], Justices Hrishikesh Roy, Abhay S. Oka, B.V. Nagarathna [dissented], J.B. Pardiwala, Manoj Misra, Ujjal Bhuyan, Satish Chandra Sharma And Augustine George Masih.

8. Not All Private Property Is 'Material Resource Of Community' Which State Must Equally Distribute As Per Article 39(b) [9-judge bench]

In Property Owners Association v. State of Maharashtra (November 5, 2024), the Supreme Court held by a majority of 7:2 that all private properties cannot form part of the 'material resources of the community' which the State is obliged to equitably redistribute as per the Directive Principles of State Policy under Article 39(b) of the Constitution. The Court held some private properties may come under Article 39(b) provided they meet the qualifiers of being a 'material resource' and 'of the community'.

The bench was considering whether material resources of the community under Article 39(b) (one of the Directive Principles of the State Policy), which states that the government should create policies to share community resources fairly for the common good, includes privately owned resources.

Justice Nagarathna in her dissent held that “Material resources” can in the first instance be divided into two basic categories, namely, (i) State-owned resources which belong to the State and are essentially material resources of the community, held in public trust by the State; and (ii) privately owned resources. However, the expression “material resources” does not include “personal effects” or “personal belonging” of individuals, such as, clothing or apparel, household articles, personal jewellery and other articles of daily use belonging to the individuals of a household and which are intimate and personal in nature and use.

Justice Dhulia in his dissent observed that the incorporation of Article 38 as well as Article 39(b) and (c) in Part IV of our Constitution was based on the prevalent philosophy of the time and the path of development India chose to follow. He held that there is today political equality and there is also equality in law, yet the social and economic inequalities continue as cautioned by Dr. Ambedkar in his speech in the constituent Assembly on November 25, 1949.

Bench: CJI DY Chandrachud[authored majority opinion], Justices Hrishikesh Roy, B.V. Nagarathna [partially concurred], Sudhanshu Dhulia [dissented], J.B. Pardiwala, Manoj Misra, Rajesh Bindal, Satish Chandra Sharma and Augustine George Masih.

9. Holder Of LMV Driving License Doesn't Need Separate Authorisation To Drive Transport Vehicle Weighing Less Than 7500 KG [5-judge bench]

In M/S. Bajaj Alliance General Insurance Co. Ltd. v. Rambha Devi & Ors (November 6, 2024), the Supreme Court held that a person holding a driving license for a light motor vehicle(LMV) can, without any specific endorsement, drive a transport vehicle having an unladen weight of less than 7500 kg. If the gross weight of the vehicle is within 7500 kg, the driver with an LMV license can drive such a transport vehicle. The 5-judge Constitution Bench noted that no empirical data has been brought before it to show that LMV license holders driving transport vehicles are a significant cause of road accidents.

Bench: CJI DY Chandrachud, Justices Hrishikesh Roy [authored the judgment], PS Narasimha, Pankaj Mithal and Manoj Misra

10. Eligibility Criteria Can't Be Changed After Commencement Of Recruitment Process Unless Rules Permit So [5-judge bench]

In Tej Prakash Pathak And Ors. v. Rajasthan High Court And Ors ( November 7, 2024), the Supreme Court Constitution Bench held that the "rules of the game" cannot be changed midway after the selection process for posts has begun unless the relevant rules expressly permit so.

The judgment stated that the appointing authority, in the absence of rules to the contrary, can devise a procedure for the selection of a candidate suitable to a post. it may also set benchmarks for different stages of the recruitment process. If any such benchmark is set, the same is to be stipulated before the commencement of that recruitment process.

The bench dealing with the reference issue in the case Tej Prakash Pathak and others v. Rajasthan High Court and others(2013) 4 SCC 540. In Tej Prakash, the bench doubted the correctness of an earlier decision K. Manjusree v. State of Andhra Pradesh and another(2008) 3 SCC 512, where it was held that the selection criteria cannot be changed midway through the process as "it would amount to changing the rules of the game after the game was played which is clearly impermissible". The Manjusree case held as invalid a subsequent introduction of cut-off for the interview marks, which was not originally stipulated in the notification.

Bench: CJI DY Chandrachud, Justice Hrishikesh Roy, Justice PS Narasimha, Justice Pankaj Mithal, and Justice Manoj Misra [authored]

11. Minority Status Of Aligarh Muslim University [7-judge bench]

In Aligarh Muslim University Through Its Registrar Faizan Mustafa v. Naresh Agarwal (November 8, 2024)a 7-judge bench of the Supreme Court (by 4:3 majority), overruled the 1967 judgment in S. Azeez Basha vs. Union Of India to the extent it held that an institution incorporated by a statute cannot claim to be a minority institution. A detailed video explainer on the verdict can be viewed here.

The issue of whether Aligarh Muslim University is a minority institution as per Article 30 of the Constitution is now left to be decided by a regular bench based on this view of the majority.

The key issue of reference for deliberation was: "What are the indicia for treating an educational institution as a minority educational institution? Would an institution be regarded as a minority educational institution because it was established by a person(s) belonging to a religious or linguistic minority or its being administered by a person(s) belonging to a religious or linguistic minority?"

The majority held that the words 'incorporation' and 'establishment' cannot be used interchangeably. Merely because the AMU was incorporated by imperial legislation would not mean that it was not 'established' by a minority. It cannot be argued that the University was established by the Parliament merely because the statute says it was passed to establish the University. Such a formalistic reading will defeat the objectives of Article 30. Formalism must give way to actuality. To determine who established the institution, the Court must trace the genesis of the institution and identify who was the "brain" behind it. The proof of ideation must point towards a member of the minority community. It has to be seen who got funds for the land and if the minority community helped.

It is not necessary that the institution was established only for the benefit of the minority community but must be predominantly for its benefit.

Justice Surya Kant partially dissented, observing that. Minority institutions, to get Article 30 protection, must satisfy the conjunctive tests of "established" and "administered" by a minority. The legislative intent behind a statute incorporating a university or institution would be necessary to decide its minority status.

Justice Dipankar Datta is complete dissent made a categorical declaration that AMU is not a minority institution. While Justice SC Sharma in his dissent held that the minority community should be controlling the administration of the institution without any help from outside forces. The minority institution must also give the option of secular education.

Bench: CJI DY Chandrachud [authored majority judgment], Justices Sanjiv Khanna, Surya Kant [partially dissented] JB Pardiwala, Dipankar Datta [dissented], Manoj Misra and Satish Chandra Sharma [dissented]

12. Unilateral Arbitrator Appointment Clauses In Public-Private Contracts Are Invalid [5-judge bench]

In Central Organisation For Railways Electrification v. M/S ECI Spic Smo MCML (JV) A Joint Venture Company (November 8, 2024), the Supreme Court ruled against clauses allowing Public Sector Undertakings to unilaterally appoint arbitrators to decide disputes with private contractors.

The Constitution Bench held that while PSUs can maintain a panel of potential arbitrators, they cannot compel the other party to select its arbitrator from the panel.

The bench was considering the validity of an arbitration clause which prescribes that the appointment of the arbitrator will happen from a panel of arbitrators curated by one of the parties, which is mostly a public sector undertaking (PSU) in majority of the cases.

Justice Hrishikesh Roy in a partial dissent held that unilateral appointments must not be declared invalid. Justice Roy's judgment emphasised on party autonomy. An eligible arbitrator not disqualified under schedule 7 can be appointed unilaterally and courts must refrain from interfering, he held.

Bench: CJI DY Chandrachud [authored majority judgment], Justices Hrishikesh Roy [partially dissented], PS Narasimha, JB Pardiwala, and Manoj Misra