Supreme Court Monthly Digest: April 2020

While interpreting the scope of Section 15 of the Terrorist and Disruptive Activities (Prevention) Act, 1987, a Supreme Court bench comprising Justice S. Abdul Nazeer and Justice Deepak Gupta held that if for any reason, a joint trial is not held, the confession of a co-accused cannot be held to be admissible in evidence against another accused who would face trial at a later point of time in the same case.

The court noted that the Section 15 of the TADA Act specifically provides that the confession recorded shall be admissible in trial of a co­accused for offence committed and tried in the same case together with the accused who makes the confession.

(Case: Raja @ Ayyappan v. State Of Tamil Nadu)

2. Consider Releasing Children From Observation Homes On Interim Bail Amid COVID-19 : SC Directs JJBs, Children's Courts

In order to de-congest child care institutions in the wake of COVID-19 pandemic, the bench of Justice L. Nageswara Rao and Justice Deepak Gupta directed the Juvenile Justice Boards and Children Courts to consider releasing all children alleged to be in conflict with law on temporary bail, unless there are clear and valid reasons for the application of the proviso to Section 12, JJ Act, 2015.

The court had taken suo moto cognizance of the conditions of children protection homes across the country in the wake of COVID-19 pandemic. It passed detailed directions to be implemented by each of Child Welfare Committees, Juvenile Justice Boards, Children Courts and Child Care Institutions.

(Case: In Re Contagion Of Covid 19 Virus In Children Protection Homes)

3. 'Ex Post Facto' Environmental Clearance Unsustainable In Law : SC

A division bench comprising Justices D Y Chandrachud and Ajay Rastogi reiterated that the concept of 'ex post facto' Environmental Clearance (EC) is against the fundamental principles of environmental jurisprudence.

"...environment law cannot countenance the notion of an ex post facto clearance. This would be contrary to both the precautionary principle as well as the need for sustainable development", the court reiterated in light of the observations made in Common Cause v. Union of India.

(Case: Alembic Pharmaceuticals Ltd. v. Rohit Prajapati & Ors.)

4. SC Allows NDTV's Appeal To Quash Income Tax Re-Assessment Notice

In a major relief to media company New Delhi Television Ltd (NDTV), the Supreme Court bench of Justices L Nageswara Rao and Deepak Gupta allowed its appeal to quash the notice issued by the Income Tax Department seeking to re-open its income assessment for the financial year 2007-08.

The assessing officer had issued notices to NDTV under Section 148 of the Income Tax Act on the ground of escapement of income from assessment and proposing a substantial addition of Rs.642 crores to its account. The SC held that these notices, which were issued in 2015, though disclosed reasons, were time-barred and hence unsustainable.

(Case: New Delhi Television Ltd. v. Deputy Commissioner Of Income Tax)

5. Person Who Takes Benefit Of A Portion Of The Will Cannot Challenge The Remaining Portion: SC

The bench of Justices L. Nageswara Rao and Deepak Gupta observed that a person who takes benefit of a portion of the Will cannot challenge the remaining portion of the Will.

"It is trite law that a party cannot be permitted to approbate and reprobate at the same time. This principle is based on the principle of doctrine of election. In respect of Wills, this doctrine has been held to mean that a person who takes benefit of a portion of the Will cannot challenge the remaining portion of the Will," the bench observed in a plea filed by the beneficiary, who later claimed that the subject property was not self acquired, but HUF.

(Case: Bhagwat Sharan v. Purushottam)

6. HC Can Only Exercise Jurisdiction Over State Of Which It Is The High Court: SC

The Supreme Court observed that the jurisdiction of a High Court is limited to the territorial jurisdiction of the State(s) of which it is the High Court.

The bench of Justices Deepak Gupta and Aniruddha Bose made the observation while considering an appeal filed by the Union of India against a Madras High Court judgment in which it issued (in a service matter) a direction which has pan India effect.

(Case: Union Of India v. R. Thiyagarajan)

Also Read: Territorial Jurisdiction Of High Court Under Article 226(2) Of Constitution [Explainer]

7. Burden To Prove That The Property Is A Joint Property Of An HUF Is On The Person Who Asserts So: SC

The bench of Justices L. Nageswara Rao and Deepak Gupta observed that merely because the business is joint would not raise the presumption that there is a Joint Hindu Family; and the burden to prove the same lies on the person who alleges that the property is a joint property of an HUF.

Not only jointness of the family has to be proved but burden lies upon the person alleging existence of a joint family to prove that the property belongs to the joint Hindu family unless there is material on record to show that the property is the nucleus of the joint Hindu family or that it was purchased through funds coming out of this nucleus, the bench observed.

(Case: Bhagwat Sharan v. Purushottam)

8. [COVID-19] SC Issues Slew Of Directions To Implement Video Conferencing In All Courts Across The Country

Highlighting the immense need to observe social distancing alongside unhindered access to justice, a bench comprising Chief Justice S A Bobde, Justices D Y Chandrachud and L Nageswara Rao issued a slew of directions in order to streamline the functioning of courts via video conferencing.

(Case: In Re: Guidelines For Court Functioning Through Video Conferencing During Covid-19 Pandemic)

9. Medical Oxygen IP And Nitrous Oxide Should Be Taxed As Per Entry 88 Of VAT Act: SC Upholds The Decision Of HC Of Andhra Pradesh & Telangana

The Division Bench of Justice DY Chandrachud and Justice Ajay Rastogi held that 'Medical Oxygen IP' and 'Nitrous Oxide IP' should be taxed as drugs under Entry 88 of the AP Value Added Tax Act, 2005, and not as 'unclassified goods' under Schedule V.

While providing the purposive interpretation to the 'similar substances' in Entry 88, the bench upheld the judgment of the High Court and observed that Section 3(b)(i) of the Drugs and Cosmetics Act 1940, the expression 'drug' covers within its ambit any substance which is used for or in the treatment, prevention and mitigation of a disease or a disorder.

(Case: The State of Andhra Pradesh v. M/s Linde India Ltd.)

Also Read: Medical Oxygen IP & Nitrous Oxide IP Are 'Drugs' Under Section 3(b)(i) Of Drugs & Cosmetics Act 1940 : SC

10. Governor Can Direct Floor Test Even While House Is In Session : SC Approves MP Governor's Decision

While hearing a petition filed by Shivraj Singh Chouhan and other BJP leaders seeking immediate floor test in the MP assembly following the resignation of 22 Congress MLAs, the bench comprising Justices D Y Chandrachud and Hemant Gupta held that a Governor can direct floor test even while house is in session.

The Court therefore affirmed its order passed on May 19 to hold floor test in the MP assembly for proving the majority of the previous government led by Kamal Nath.

(Case: Shivraj Singh Chouhan & Ors. v. Speaker Madhya Pradesh Legislative Assembly & Ors.)

Also Read: Governor's Power Not Intended To Displace Democratically Elected Government; Must Be Circumspect In Demanding Trust Vote : SC

Also Read: Law Has To Evolve To Address Poaching Of Legislators : SC

11. COVID-19 : SC Orders Release Of Persons Lodged For Over 2 Years In Assam Foreigners' Detention Centres

In the light of COVID-19 pandemic, ench comprising Chief Justice SA Bobde, LN Rao & M.M Shantanagoudar observed that detainees at detention centers of Assam who have been incarcerated for more than 2 years may be released on personal bond with two sureties.

(Case: In Re : Contagion Of Covid 19 Virus In Prisons)

Also Read: COVID-19 : SC Reduces Bond Amount For Release From Foreigners' Detention Centre As Rs 5000 From Rs 1 Lakh

12. 'Misconceived Petition' : SC Dismisses PIL Challenging PM CARES Fund

Chief Justice led bench of Supreme Court dismissed a PIL, questioning the legality of the constitution of PM CARES Fund for COVID-19 relief, with costs.

"How can PM CARES come into existence? Power is only with Parliament under Article 266 & 267 to create contingency fund", Advocate ML Sharma had submitted in the court.

(Read Report Here)

Note: The question raised by the Petitioner therein has however assumed relevance in the present context ever since the PMO refused to make disclosures relating to the Fund, under the RTI Act, 2005. A series of PILs have been filed thereafter, questioning the legality of the Fund, especially when a statutory National Disaster Relief Fund is already in place.

13. "Cannot Gag The Press": CJI On Plea Seeking Action Against Some Media Houses For Communalising Coronavirus Pandemic

The bench comprising CJI SA Bobde, Justices LN Rao & MM Shantanagoudar observed that it was not inclined to pass interim orders in a plea seeking strict action against the media for communalization of the Coronavirus pandemic, in light of the Tablighi Jamaat meeting in Delhi's Nizamuddin.

"We cannot gag the Press. We will not pass interim order/ directions," the bench observed and directed the petitioner to implead the Press Council of India in the matter.

(Case: Jamiat Ulama-I-Hind & Anr. v. Union of India & Anr.)

14. SC Rejects Plea Seeking Nationalisation Of Health Care Sector Amid COVID-19 Outbreak

The Supreme Court refused to direct the government to nationalize India's healthcare sector to combat the threat of COVID-19.

"This is not a decision the Court can ask the government to take. We cannot order nationalisation of hospitals. The government has already taken over some hospitals", said the Bench comprising of Justices Ashok Bhushan and Ravindra Bhat while hearing the plea.

(Case: Amit Dwivedi v. Union Of India)

15. Free COVID-19 Testing Only For Persons Under Ayushman Bharat Scheme And EWS Categories; SC Allows Private Labs To Charge Others

In modification of its previous order directing free testing for COVID-19 in both government and private laboratories, the SC bench comprising of Justices Ashok Bhushan and S Ravindra Bhat directed that-

free testing will be available to persons eligible under Ayushman Bharat Pradhan Mantri Jan Aarogya Yojana as already implemented by the Government of India, and any other category of economically weaker sections of the society as notified by the Government for free testing for COVID-19.

(Case: Shashank Deo Sudhi v. Union of India & Ors.)

Also Read: "Don't Create Publicity Interest Litigations" SC In Plea Seeking Free Treatment For COVID19 Patients

Also Read: SC Dismisses PIL Seeking GST Exemption For Face Masks & Sanitizers

16. Exemption Clauses In Insurance Contracts Are To Be Construed Against Insurer In Case Of Doubt : SC

In a notable judgment in a motor accident compensation case, the Supreme Court applied the well-settled principle that exemption of liability clauses in insurance contracts are to be construed against the insurance company in case of ambiguity.

Based on this principle of contra proferentum, a bench comprising Justices R F Nariman and S Ravindra Bhat restored the liability of New India Assurance Company Ltd to pay compensation of roughly Rs 37.6 lakhs and interest thereon with respect to a motor vehicle accident which took place twenty three years ago.

(Case: Sushilaben Indravadan Gandhi & Anr. v. The New India Assurance Co Ltd & Ors.)

17. Gratuity Payable On Resignation From Employment After 5 Years Of Continuous Service: SC

The Supreme Court has observed that the gratuity under the Payment of Gratuity Act shall be payable on resignation from employment after 5 years of continuous service. The observation was made while considering an appeal filed by Rajasthan State Road Transport Corporation Ltd. against the High court judgment which directed payment of retiral benefits to the wife of a former (deceased) employee, who had resigned from the position.

The bench comprising Justices R. Banumathi and AS Bopanna noted that the term 'termination' in Section 4 of the Act would include resignation as well.

(Case: Rajasthan State Road Transport Corporation Ltd. v. Smt. Mohani Devi & Anr.)

18. 'Once A Mortgage, Always A Mortgage' - Right To Redeem Mortgage Can Be Extinguished Only By Process Of Law : SC

The Supreme Court decreed a suit filed in 1978 applying the principle that right to redeem a mortgage can be extinguished only by a process known to law.

A bench comprising Justices Mohan Shantanagoudar and R Subhash Reddy explained the principle as follows :

"It is well-settled that the right of redemption under a mortgage deed can come to an end or be extinguished only by a process known to law, i.e., either by way of a contract between the parties to such effect, by a merger, or by a statutory provision that debars the mortgagor from redeeming the mortgage. In other words, a mortgagee who has entered into possession of the mortgaged property will have to give up such possession when a suit for redemption is filed, unless he is able to establish that the right of redemption has come to an end as per law".

(Case: Shankar Sakharam Kenjale (Died) through LRs v. Narayan Krishna Gade & Anr.)

19. No Reservation In Promotions Without Examining Adequacy Of Representation In Promotional Posts : SC

Following the principle that reservation in promotions cannot be granted without examining adequacy of representation in promotional posts, the Supreme Court upheld the quashing of a resolution passed by the Orissa Government, providing reservations for SC/ ST in promotional posts in Orissa Administrative Service with consequential seniority.

The bench comprising Justices Mohan M Shantanagoudar and R Subhash Reddy followed the law laid down in M Nagaraj v. Union of India, and reiterated that the State is not bound to make reservation for SCs/STs in matters of promotion. However, if they wish to do so, they have to collect quantifiable data showing backwardness of the class and inadequacy of representation of that class in public employment, keeping in mind maintenance of efficiency, as indicated by Article 335 of the Constitution of India.

(Case: Pravakar Mallick & Anr. v. State of Orissa)

20. SC Rejects Challenge Against Regularization Of Teachers In HP After 15 Years Of Service

The Court rejected the challenge against the decision of Himachal Pradesh Government to regularize teachers who were appointed under Primary Assistant Teachers (PAT) scheme, Para Teachers Policy and other schemes.

"We are of the view that when the appointees appointed under the scheme have completed more than almost 15 years of service now and also have acquired the professional qualifications, they cannot be denied regularisation at this point of time", observed a bench comprising Justices Mohan M Shantanagoudar and R Subash Reddy.

(Case: Chander Mohan Negi and others v. State of HP)

21. No Construction Allowed In Plots Left For Open Spaces/Gardens In Approved Layout Plans : SC

Affirming a Bombay High Court judgment which disallowed constriction on two plots at Mumbai that were earmarked as open area under the development plan, a bench comprising Justices Mohan M Shantanagoudar and R Subhash Reddy held that open spaces left for garden areas in approved building layout plans cannot be allowed for construction.

(Case: Anjum E Shiate Ali & Anr. v. Gulmohar Area Societies Welfare Group & Anr.)

22. Can't Direct Centre To Evacuate Indians Now : SC Disposes Of Pleas For Repatriation Of Citizens From US & Moldova

The Top Court disposed of two pleas which sought evacuation of Indians stranded in the US and in Moldova respectively, amid the COVID-19 outbreak.

A 3-judge Bench comprising of Justices NV Ramana, SK Kaul and BR Gavai decided to leave it to the discretion of the Government to take a call as to when it would be best suited to bring these people back, and refused to interfere.

(Case: Anvar Babu P. v. Union of India & Ors. and Vibha Datta Makhija & Anr. v. Union of India & Ors.)

Also Read: 'Stay Where You Are' : CJI Says Students Stranded In UK Amid COVID-19 Cannot Be Brought Back Right Now

23. SC Dismisses VVIP Chopper Scam Accused Christian Michel's Plea For Bail

A bench of Justices Sanjay Kishan Kaul & BR Gavai refused to grant bail to Christian Michel's who is accused in the Augusta Westland Chopper scam.

The bench upheld the Delhi High Court's decision of rejecting his interim bail plea which had noted that Michel's apprehension of catching COVID19 virus due to the overcrowding of prison and his vulnerable age was "unfounded".

(Case: Christian Michel James v. Central Bureau Of Investigation)

24. 100% ST Reservations For Teacher Posts In Scheduled Areas Unconstitutional: SC

A Constitution bench comprising Justices Arun Mishra, Indira Banerjee, Vineet Saran, M.R. Shah and Aniruddha Bose held that 100 per cent reservation of teachers belonging to the Scheduled Tribe category at schools situated in "Scheduled Ares" is constitutionally invalid.

The Bench also quashed the Government order issued under the hand of Governor of State of Andhra Pradesh which had affirmed absolute reservation for ST teachers and imposed costs on both Andhra Pradesh & Telangana Government's, seeking reasons from the Government's for breaching the 50% ceiling in reservations.

(Case: Chebrolu Leela Prasad Rao & Ors. v. State of A.P. & Ors.)

Also Read: [100% Reservation Unreasonable] Questions Referred And Answers Given By Constitution Bench

Also Read: Affluent & Advanced Within SC/ST Not Permitting Reservation Benefits Trickle Down To Needy : SC Calls For List Revision

25. State & Centre Have Concurrent Power To Fix Sugarcane Prices; No Conflict If State's Price Is Higher Than Centre's 'Minimum Price': SC

A Constitution bench comprising Justices Arun Mishra, Indira Banerjee, Vineet Saran, M R Shah and S Ravindra Bhat held that both Centre and State have concurrent powers to fix the prices of sugarcane and that the price' fixed by the State Government for sugarcane cannot be lower than the 'minimum price' fixed by the centre.

The Bench also put the conflict between two judgements of the same strength to rest, i.e. Ch. Tika Ramji & Others, Etc. vs. The State of Uttar Pradesh & Others [AIR 1956 SC 676] and U.P. Cooperative Cane Unions Federations vs. West U.P. Sugar Mills Association and Others [(2004)5 SCC 430], concluding thereby that there existed no conflict between these two decisions and that there was no need for reference to a 7-judge bench.

(Case: West U.P. Sugar Mills Association & Ors. v. The State of Uttar Prades & Ors.)

26. SC Upholds The Constitutional Validity Of Rule Empowering RAW To Compulsorily Retire Officers

The Court upheld the constitutional validity of Rule 135 of the RAW (Recruitment, Cadre and Services) Rules, 1975, which gave power to the Central government to voluntarily retire RAW Officers, whose identity has been exposed or compromised.

A bench of Justices AM Khanwilkar and Dinesh Maheshwari, passed the order while hearing an appeal filed by an ex-female employee of RAW, who had been compulsorily retired after she made allegations of sexual harassment against two senior officials of RAW.

(Case: Nisha Priya Bhatia v. Union of India & Anr.)

27. Arbitration Award Fixing Price Of Land Can't Be Executed Like A Decree For Specific Performance Of Sale Agreement : SC

Applying the principle that an "executing Court cannot travel beyond the relief granted in a decree", the Supreme Court held that an arbitration award fixing the price of the land cannot be executed like a decree for specific performance of sale agreement, when the reference to arbitrator was only for determining the compensation under the sale agreement.

A bench of Justices Uday Umesh Lalit and Vineet Saran further observed that for an award or instrument creating any right, title or interest in immovable property, it would be required to be compulsorily registered under the Registration Act for succesful execution.

(Case: Firm Rajasthan Udyog & Ors. v. Hindustan Engineering Industries Ltd.)

28. NDPS - Quantity Of Neutral Substances In Mixture Must Be Taken Into Account With Actual Drug Weight To Determine 'Small Or Commercial Quantity' : SC

While overruling an earlier 2008 decision titled E. Micheal Raj v. Intelligence Officer, Narcotic Control Bureau, bench of Justices Arun Mishra, Indira Banerjee and M R Shah held that the quantity of neutral substances in a mixture containing narcotic drugs or psychotropic substances must be taken into account along with the actual weight of the offending drug while determining 'small or commercial quantity' under the NDPS Act.

(Case: Hira Singh & Anr. v. Union of India & Anr.)

29. SC Upholds The Constitutional Validity of Clause(f) of Section 43B of Income Tax Act, 1961

Reversing the judgment of the Calcutta High Court, Supreme Court bench of Justices A.M. Khanwilkar, Hemant Gupta and Dinesh Maheshwari upheld the constitutional validity of clause (f) of Section 43B of the Income Tax Act, 1961. The High Court decision which had declared the aforementioned clause to be arbitrary and violative of Article 14 of the Constitution of India was thereby reversed.

(Case: Union Of India & Ors. v. Exide Industries Limited & Anr.)

30. Consent Of The State In Which Accused Resides Or Employed Not Necessary For CBI Investigation When The Offence Is Committed In NCT Of Delhi: SC

A bench of Justices A.M. Khanwilkar and Dinesh Maheshwari held that the Central Bureau of Investigation can investigate into an specified offence committed by an accused within the Union Territory, who is residing in, or employed in connection with the affairs of another State. For the said purpose, the consent of the state is also not necessary. Central issue in the case was whether the CBI was authorised to register cases against the public servants employed in connection with the affairs of the Government of Bihar which was answered by the top Court in the affirmative.

(Case: Kanwal Tanuj v. State Of Bihar)

31. Insurance Law - Storage, Unpacking, Assembly Of Helicopter Outside Scope Of 'Ordinary Course Of Transit' : SC Sets Aside Insurer's Liability To Compensate MP Government

The Top Court set aside NCDRC's order requiring Bajaj Allianz General Insurance to pay Rs. 64 lakh by way of compensation to Madhya Pradesh government, for wrongful repudiation of a claim of damages to a helicopter in transit from Canada to Bhopal.

Bench of Justices D. Y. Chandrachud and Ajay Rastogi answered the question of whether storage, unpacking and assembly of the helicopter at New Delhi would fall outside the scope of the expression "ordinary course of transit", terminating coverage under the policy in the affirmative.

(Case: Balance Allianz General Insurance Co Ltd & Anr. v. State of Madhya Pradesh)

32. Deemed University Covered Under Prevention Of Corruption Act : SC

Supreme Court held that a 'deemed university' will come under the ambit of Prevention of Corruption Act, 1988. Bench of Justices N V Ramana, Mohan M Shantanagoudar and Ajay Rastogi set aside a judgment of the High Court of Gujarat, which had allowed the discharge of trustees of a deemed university, from prosecution in a corruption case.

The Apex Court observed that the High Court was in fact incorrect in holding that a "Deemed University" is excluded from the ambit of the term "University" under Section 2(c)(xi) of the Prevention of Corruption Act.

(Case: State of Gujarat v. Mansukhbhai Kanjibhai Shah)

33. Article 30 Doesn't Prevent State From Imposing Reasonable Regulations To Make Administration Of Minority Institutions Transparent : SC

Supreme Court upheld the validity of National Eligibility Cum Entrance Test (NEET) for admissions to medical and dental courses. Bench of Justices Arun Mishra, Vineet Saran and M R Shah further re-stated principles governing minority educational institutions under Article 30 of the Constitution, noting that the right conferred on religious and linguistic minorities to administer educational institutions of their choice is not an "absolute right" and is not free of "regulation" from the State.

(Case: Christian Medical College Vellore Association v. Union of India & Ors.)

34. SC Explains Scope Of Remand Under Order XLI Rule 23A CPC; Appellate Courts Must Not Pass Orders Of Remand In A Routine Manner

Elucidating powers of "Remand" under CPC, vis-à-vis Order 41 Rule 23A, Supreme Court held that that re-trial should not be ordered in a routine manner and neither should the Appellate Court pass orders of remand in a routine manner.

Bench of Justices A M Khanwilkar, Dinesh Maheshwari and Hemant Gupta observed that the Appellate Court should ordinarily determine the suit finally when the evidence available is sufficient to dispose of the matter.

(Case: Shivakumar & Ors. v. Sharanabasappa & Ors.)

35. Tax Authorities Can't Give Their Own Interpretations To Legislative Provisions On Basis of Perception Of Trade Practices : SC

While observing that Tax Administration Authorities cannot give their own interpretation to legislative provisions basis their perception of "trade practices", Supreme Court answered the question as to when inter-state movement is to be treated as "terminated" under Section 6(2) of the Central Sales Tax Act 1956?

Bench of Justices Deepak Gupta and Aniruddha Bose held that there exists no concept of 'constructive delivery' of goods under the Act, and that the inter-state movement of goods will terminate only when the actual physical delivery is taken interpreted Section 6(2) of the Central Sales Tax Act.

(Case: Commercial Taxes Officer v. M/S Bombay Machinery Store)

36. A Citizen Must Have Some Standing Or Knowledge Before Questioning Capability & Integrity Of A Judge: SC Holds 3 People Guilty of Contempt For Making Scandalous Allegations Against Judges

The Supreme Court held that a citizen must have some standing or knowledge before questioning the capability of or integrity of a Judge of the Highest Court and cautioned that the right to criticize Judgments delivered by any court, including the Supreme Court, does not encompass the right to question the "bona fides" of a judge or to raise questions with regard to their competence.

A bench of Justices Deepak Gupta and Aniruddha Bose made these observations while holding Vijay Kurle (State President, Maharashtra & Goa, Indian Bar Association), Rashid Khan Pathan (National Secretary, Human Rights Security Council) & Nilesh Ojha (National President, Indian Bar Association) guilty of contempt.

(Case: In Re: Vijay Kurle & Ors.)

37. Non-Participation In Arbitral Proceedings Results In Waiver Of Right To Raise Objections On Jurisdiction After Award : SC

The Supreme Court held that the non participation of a party in arbitral proceedings shall result in "Waiver of Right" to raise objections on jurisdiction after award has been passed.

A bench of Justices Uday Umesh Lalit and Vineet Saran noted that technicalities surrounding the "venue" and 'place" may not necessarily be relevant in domestic arbitrations as they are in international commercial arbitrations, due to uniformity in application of the substantive and curial laws.

(Case: Quippo Construction Equipment Ltd. v. Janardan Nirman Pvt. Ltd.)

38. Payments To Non-Residents For Income Accrued In India Liable To TDS : SC Upholds Liability Of 96 Cricket WC Governing Body

Supreme Court held that payments made to non-resident Sports Associations in the instant case were liable to Tax Deduction at source in terms of Section 194E of the Income Tax Act, 1961 as the represented income which accrued or arose, was deemed to have accrued or arisen in India.

A bench of Justices UU Lalit and Vineet Saran therefore held that Pak-Indo-Lanka joint management Committee (PILCOM), set up for purposes of conducting the 1996 cricket world cup, was liable to have tax deducted at source for payments made to non-resident sports associations for the tournament as the income in question had arisen from a source of income in India, which was, playing of cricket matches in India and as such, the requirement in law as aforementioned was fully satisfied.

(Case: PILCOM v. C.I.T. West Bengal-VII)

39. Section 4(5) Of Gratuity Act Applies Only When There Are Options For The Employee Under The Act & Under Contract With Employer : SC

In a notable judgment, the Supreme Court held that Section 4(5) of the Payment of Gratuity Act, 1972 will apply only when there are "alternative options" for employee under the Act and under the terms of contract with the employee.

A bench of Justices U U Lalit and Sanjiv Khanna set aside findings of the Claim Commissioner under the Act, which were approved by the Appellate Authority and also by both, the Single Bench and the Division Bench of the Delhi High Court. Court further stated that an employee cannot choose a combination of the scheme insinuated by the employer as well as the scheme under the Act.

(Case: BCH Electric Limited v. Pradeep Mehra)

40. Service As Additional Judge On Ad-Hoc Promotion Will Not Count For Seniority Of District Judge : SC

Bench of Justices UU Lalit and Vineet Saran held that the period of service as an "ad-hoc" Judge shall not count for purposes of seniority of District Judge.

While deciding the issue raised by Rajasthan Judicial Service Officers Association against Seniority list prepared by the High Court, claiming reckoning of their service as Additional District and Sessions Judges in Fast Track Courts, the Court held that the "reckonable date" shall be date of substantive appointement and not from date of initial ad-hoc appointment or promotion while considering seniority.

(Case: Dinesh Kumar Gupta v. High Court of Judicature of Rajasthan & Ors.)

41. In Marginal Relief To Vodafone Idea, SC Allows Tax Refund Of Rs 773 Crores Against Claim Of Rs 4760 Crores

The Supreme Court directed the Income Tax authorities to refund only the amount of Rs.733 Crores for the Assessment Year 2014-15, amidst the telecom giant's claim of the Department not processing income tax refunds of Rs 4,760 crore for the AYs 2014-15 to 2017-18.

Bench of Justices UU Lalit and Vineet Saran further noted that the exercise of power under Sub-sections (2) and (3) of Section 143 of the Income Tax Act, 1961 is premised on non-acceptance of what is evident from the return itself and to ensure that there is no avoidance of tax in any manner.

(Case: Vodafone Idea Ltd. v. Assistant Commissioner of Income Tax Circle 26 (2) & Anr.)

42. Wife's Right To Reside In Matrimonial Home Can't Be Enforced Against Builder Or Development Authority Under Statutory Scheme : SC

The Supreme Court held that when a builder has discharged his obligation by accommodating the original owners in the redeveloped portion, a lady married into that family would not be entitled to invoke writ jurisdiction to enforce her right to matrimonial home citing provisions of the relevant housing and area development statute, if her husband does not permit her to reside in the allocated portion.

In the instance case, a bench of Justices Deepak Gupta and Aniruddha Bose was deciding the appeal filed by a woman, seeking right to reside in the homes allotted to her husband under the Maharashtra Housing and Area Development Act 1976. Court held that the Wife's right to reside in her matrimonial home does not flow from the MHADA Act 1976 Act.

(Case: Aishwarya Atul Pulsalkar v. Mahrashtra Housing Development Authority & Ors.)

43. SC Dismisses Review Petition Against Judgment Refusing 'Pressure Cooker' Symbol To TTV Dinakaran Faction

The Supreme Court dismissed the plea for review of its March, 2019 decision by which the political faction led by former AIADMK leader T. T. V. Dhinakaran was denied the 'pressure cooker' symbol, that it had hoped to employ exclusively for the 2019 Lok Sabha polls and the assembly bye-elections.

The bench of Chief Justice S. A. Bobde, Justices Deepak Gupta and Sanjiv Khanna dismissed the review petition filed in the name of AMMK President V. K. Sasikala, a close confidante of late Tamil Nadu Chief Minister and AIADMK chief J. Jayalalithaa. Dhinakaran had fought a long and protracted battle for the election symbol of "two leaves", which claim was rejected by the Election Commission of India, two Benches of the High Court and virtually by the Supreme Court as well, by its order of March 15, 2019, by which a limited notice was issued to explore the possibility of allotment of the symbol of "pressure cooker" to the faction.

(Case: VK Sasikala v. Election Commission of India)

44. Supreme Court Allows Parents Having Visitation Rights To Maintain Contact With Children Via Electronic Means

Keeping in view the inability of parents having visitation rights to meet their children physically due to the nationwide lockdown, the Supreme Court directed that they may resort to electronic means for the same, directing thereby that all the parents having visitation rights can now avail electronic visitations via Video Calls etc. instead of physical visitations during this period.

A bench of Justices NV Ramana, SK Kaul and BR Gavai passed the order in a PIL which raised concerns regarding the Mental Health of Children due to impossibility of maintaining contact with their parents having due visitation rights.

(Case: Tanuj Dhawan v. Courts On Its Own Motion)

45. No Income Tax Liability For UAE Exchange In India As Its Liaison Offices Are Not 'Permanent Establishments' Under DTAA : SC

In a major tax relief to UAE Exchange, the Supreme Court ruled that no income tax can be levied on its liaison offices in India in respect of the principal business carried by it in United Arab Emirates.

Dismissing an appeal filed by the Income Tax Department against a judgment of the Delhi High Court, bench comprising Justices A M Khanwilkar and Ajay Rastogi held that no income is earned by the liaison offices in India. It was further held that the liaison offices of UAE Exchange do not come within the meaning of "Permanent Establishment as per the provisions of the Income Tax Act, 1961 and the relevant Double Taxation Avoidance Agreements (DTAAs).

(Case: Union of India v. UAE Exchange)

Supreme Court Monthly Digest : March 2020