Cheque Bounce Judgment July 2024: Section 138 NI Act Explained
Table of Contents
Civil Suit Pending Does Not Bar Criminal Proceedings Under Section 138 NI Act
Mahaveer Prasad Suman v. Lalit Mohan Sharma
Mahaveer Prasad Suman v. Lalit Mohan Sharma, S.B. Criminal Miscellaneous (Petition) No. 5796/2019, In the High Court of Rajasthan (Jaipur Bench), decided by Hon’ble Justice Anil Kumar Upman, dated 24.04.2024.
https://www.livelaw.in/high-court/rajasthan-high-court/rajasthan-high-court-quarterly-digest-272256
The Rajasthan High Court held that criminal proceedings under Section 138 of the Negotiable Instruments Act, 1881, for dishonour of a cheque cannot be quashed merely because a civil remedy is available or a civil suit is pending. The Court emphasized that the remedy under Section 138 is in addition to, and not in derogation of, any civil remedy for recovery of the cheque amount. The petitioner’s argument that the case was of a civil nature and did not warrant criminal prosecution was rejected. The Court clarified that the very purpose of Section 138 is to provide a speedy remedy and deter dishonour of cheques, and the availability of a civil remedy does not bar criminal prosecution.
The case arose from a dispute where the petitioner issued a cheque which was dishonoured, leading to a complaint under Section 138. The petitioner sought to quash the criminal proceedings, contending that a civil suit for recovery was pending. The High Court’s decision reinforces the legislative intent behind Section 138, ensuring that cheque dishonour is treated as a serious offence warranting criminal consequences. This judgment is significant for banking and commercial transactions, as it clarifies the independent nature of criminal liability for dishonour of cheques, irrespective of ongoing civil proceedings, and strengthens the deterrent effect of the Negotiable Instruments Act.
Gireesh Kumar Sanghi v. Sanghi Industries Ltd. & Ors.
Gireesh Kumar Sanghi v. Sanghi Industries Ltd. & Ors., Company Appeal (AT) (CH) No. 95/2023 (IA Nos. 1195, 1196 & 1197/2023), National Company Law Appellate Tribunal at Chennai, decided by Hon’ble Justice Rakesh Kumar Jain (Judicial Member) and Hon’ble Ms. Shreesha Merla (Technical Member), dated 01.12.2023.
The National Company Law Appellate Tribunal (NCLAT) held that the National Company Law Tribunal (NCLT) has jurisdiction under Section 59 of the Companies Act, 2013, to adjudicate applications for rectification of the register of members even when there are contested facts and disputed questions. The NCLAT emphasized that Section 430 of the Companies Act, 2013, bars civil courts from entertaining matters falling under the NCLT’s jurisdiction, including disputes over share transfers. Tribunal ruled that the NCLT must decide such cases on merits, regardless of factual complexities, as the legislative intent is to centralize corporate disputes under the NCLT. The NCLAT set aside the NCLT’s order dismissing the petition as non-maintainable and remanded the matter for fresh adjudication.
The case arose from a dispute over the alleged unauthorized transfer of shares in Sanghi Industries Ltd., where Gireesh Kumar Sanghi sought rectification of the company’s register under Section 59. The NCLT had dismissed the petition, citing contested facts, but the NCLAT reversed this, affirming the NCLT’s statutory mandate to resolve such disputes. This judgment is significant for corporate law, as it clarifies that the NCLT’s jurisdiction under Section 59 is not limited by factual disputes and prevents parallel litigation in civil courts, ensuring efficient resolution of shareholder disputes under the Companies Act framework.
Shri Admar Mutt Kaliya Mardana Krishna v.
Shri Admar Mutt Kaliya Mardana Krishna v. Smt Vishalakshi, CRP No. 12 of 2024, In the High Court of Karnataka at Bengaluru, decided by Hon’ble Justice Suraj Govindaraj, dated 24.06.2024.
The Karnataka High Court held that a written statement cannot be considered while deciding an application under Order VII Rule 11 of CPC for rejection of a plaint. The Court emphasized that the scope of Order VII Rule 11 is confined to examining the plaint’s averments alone, and reliance on the defendant’s written statement or other materials is impermissible. The Bench clarified that even if the written statement raises factual disputes or defenses, such as adverse possession, these cannot justify rejecting the plaint at the threshold stage. The plaint must be read as a whole, without adding or subtracting any content, to determine if it discloses a cause of action.
The case arose from a property dispute where the plaintiff sought a declaration of title and injunction, while the defendant sought rejection of the plaint under Order VII Rule 11(a), (b), and (c) of the CPC. The Trial Court had erroneously dismissed the plaint by relying on the defendant’s written statement. The High Court’s judgment reinforces the procedural discipline under the CPC, ensuring that plaintiffs are not non-suited prematurely based on unproven defenses. This decision is significant for civil litigation, as it safeguards the plaintiff’s right to a full trial and prevents defendants from derailing proceedings through procedural objections at the initial stage.
Har Narayan Tewari v. Cantonment Board, Cantonm
Har Narayan Tewari (D) Thr. Lrs v. Cantonment Board, Ramgarh Cantonment, Civil Appeal No. 8829 of 2010, In the Supreme Court of India, decided by Hon’ble Justice Pankaj Mithal and Hon’ble Justice Abhay S. Oka, dated 08.07.2024.
The Supreme Court held that the principle of res judicata under Section 11 of the Code of Civil Procedure, 1908, does not apply between co-defendants unless three conditions are met: (i) a conflict of interest between co-defendants, (ii) a necessity to resolve the conflict to grant relief to the plaintiff, and (iii) a final adjudication of the conflict in the earlier suit. The Court ruled that the appellant’s claim over 0.30 acres of land was not barred by res judicata, as the prior suit (Title Suit No. 8/1964) did not adjudicate the specific dispute between the appellant and the Cantonment Board. The appellant’s ownership was validated through documentary evidence, including the Amin Report (1942) and Hukumnama (1943), which proved settlement and possession. The Court reinstated the trial court’s decree in favor of the appellant, emphasizing that procedural bars like res judicata cannot override substantive rights without specific adjudication.
The case arose from a land dispute where the appellant claimed title to 0.30 acres settled by the Raja of Ramgarh, contested by the Cantonment Board. The High Court had dismissed the appellant’s second appeal, erroneously applying res judicata based on the prior suit. The Supreme Court clarified that res judicata applies only when co-defendants’ conflicting claims are directly adjudicated, which was absent here. This judgment is pivotal for property law, as it safeguards parties from procedural misuse and underscores the necessity of robust evidence to establish title.
State of West Bengal v. Rajpath Contractors & Engineers Ltd.
State of West Bengal v. Rajpath Contractors and Engineers Ltd., 2024 INSC 477, In the Supreme Court of India, decided by Hon’ble Justice Pankaj Mithal and Hon’ble Justice Abhay S. Oka, dated 08.07.2024.
The Supreme Court held that arbitration agreements in unstamped contracts are enforceable and cannot be invalidated solely due to non-payment of stamp duty. The Court clarified that insufficient stamping is a curable defect under the Indian Stamp Act, 1899, and does not render the arbitration clause void ab initio. Relying on the Constitution Bench’s decision in N.N. Global Mercantile Pvt. Ltd. v. Indo Unique Flame Ltd. (2023), the Bench emphasized that Section 11(6A) of the Arbitration and Conciliation Act, 1996, mandates courts to confine their examination to the existence of an arbitration agreement, not its enforceability. The Court directed the parties to impound the unstamped document under Section 33 of the Stamp Act but affirmed that arbitrators can adjudicate disputes once stamp duty is paid.
The case arose from a dispute over a work order issued by the State of West Bengal, which was unstamped. The State contested arbitration proceedings, arguing the agreement was unenforceable due to non-compliance with stamp laws. The Supreme Court’s ruling reinforces the separability doctrine (arbitration clauses are independent of the main contract) and prioritizes the resolution of disputes through arbitration, even if technical stamp defects exist. This judgment is pivotal for commercial contracts, as it curbs delays caused by stamping technicalities and aligns with India’s pro-arbitration framework under the 1996 Act, ensuring that parties are not denied access to arbitration for procedural lapses.
Variant commercial Pvt. Ltd. V. Indian mining works Pvt. Ltd.
Variant Commercial Pvt. Ltd. v. Indian Mining Works Pvt. Ltd., I.A. (IB) No. 1132/KB/2022 in Company Petition (IB) No. 1852/KB/2019, In the National Company Law Tribunal, Division Bench, Court No. II Kolkata, decided by Hon’ble Smt. Bidisha Banerjee (Judicial Member) and Hon’ble Shri D. Arvind (Technical Member), dated 01.07.2024.
The NCLT, Kolkata Bench, held that the Adjudicating Authority (NCLT) is not a “rubber stamp” and must rigorously scrutinize resolution plans under the Insolvency and Bankruptcy Code, to ensure compliance with statutory requirements and procedural fairness. The Tribunal emphasized that while commercial wisdom of the Committee of Creditors (CoC) is paramount, the NCLT must independently verify whether the resolution plan meets the criteria under Section 30(2) of the IBC, including feasibility, viability, and conformity with the law. The Bench rejected the argument that the NCLT must mechanically approve CoC-approved plans, stressing that the tribunal’s role includes safeguarding the interests of all stakeholders and preventing resolutions tainted by irregularities or illegalities.
The case arose from a challenge to the approval of a resolution plan for Indian Mining Works Pvt. Ltd., where the applicant alleged that the plan violated the IBC’s provisions and favored certain creditors disproportionately. The NCLT’s decision underscores its duty to act as a judicial check on the CIRP, ensuring that resolution plans adhere to legal standards and do not undermine the rights of dissenting stakeholders. This judgment is significant for insolvency law, as it reaffirms the NCLT’s responsibility to scrutinize resolutions beyond mere procedural compliance, thereby preventing misuse of the IBC framework and upholding the balance between commercial discretion and judicial oversight.
R Shankar v. E Rammohan Chowdary
Shankar v. E. Rammohan Chowdary, WRIT PETITION NO. 100487 OF 2022, IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH, decided by YAN, dated 24.06.2024.
The Karnataka High Court held that under Order XIII Rule 9 of the Code of Civil Procedure, 1908, the rightful owner is entitled to the return of original documents produced in court, regardless of which party physically produced them during trial. In this case, the petitioner sought the return of original title documents that were produced by the respondent-plaintiff in a suit for specific performance. The trial court had denied the petitioner’s application for return of documents solely on the ground that the documents were produced by the respondent, not the petitioner. The High Court clarified that Order XIII Rule 9 should not be narrowly interpreted to restrict the return of documents only to the party who produced them, but must be applied to recognize the rightful owner’s entitlement. The Court found that the petitioner was the rightful owner of the documents and that the respondent, having lost the suit for specific performance, had no legitimate claim to retain them. Accordingly, the High Court set aside the trial court’s order and directed the return of the original documents to the petitioner.
This judgment is significant as it clarifies the correct interpretation of Order XIII Rule 9 CPC, ensuring that courts recognize and protect the rights of the true owner of documents, rather than adhering to a rigid procedural approach. It prevents injustice that could result from a purely literal reading of procedural rules and promotes substantive justice in the administration of civil trials.
Sandip Kumar Kejriwal (Resolution Professional of Indian Mining Works Pvt. Ltd.) v. Committee of Creditors & Ors.
https://ibclaw.in/has-adjudicating-authority-nclt-been-established-to-function-as-a-mere-rubber-stamp-affixing-authority-to-allow-all-commercial-decisions-wherein-the-irregularities-or-illegalities-committ/
citation: Sandip Kumar Kejriwal (RP of Indian Mining Works Pvt. Ltd.) v. Committee of Creditors & Ors., I.A. (IB) No. 1132/KB/2022 in Company Petition (IB) No. 1852/KB/2019, National Company Law Tribunal, Kolkata Bench, decided by Hon’ble Smt. Bidisha Banerjee (Judicial Member) and Hon’ble Shri D. Arvind (Technical Member), dated 01.07.2024.
The National Company Law Tribunal (NCLT), Kolkata Bench, held that the Adjudicating Authority (NCLT) is not a “rubber stamp” and must rigorously scrutinize resolution plans under the Insolvency and Bankruptcy Code (IBC), 2016, even if approved by the Committee of Creditors (CoC). The Tribunal emphasized that while the CoC’s commercial wisdom is paramount, the NCLT is obligated under Section 30(2) of the IBC to ensure that resolution plans are feasible, viable, and compliant with statutory requirements. The Bench rejected the resolution plan for Indian Mining Works Pvt. Ltd., citing irregularities and illegalities in the CoC’s decision-making process, and underscored that the NCLT’s role includes safeguarding stakeholder interests and preventing resolutions tainted by procedural or substantive flaws.
The case arose from challenges to a resolution plan approved by the CoC, which allegedly favored certain creditors and disregarded statutory mandates. The NCLT’s rejection of the plan highlights its duty to act as a judicial check on the Corporate Insolvency Resolution Process (CIRP), ensuring transparency and fairness. This decision is pivotal for insolvency law, as it reaffirms that the NCLT must independently verify compliance with the IBC’s provisions, preventing mechanical approvals of CoC decisions and upholding the balance between commercial discretion and legal accountability. The judgment reinforces the integrity of the insolvency framework by curbing misuse and ensuring equitable outcomes for all stakeholders.
Shri Admar Mutt Kaliya Mardana Krishna v. Smt Vishalakshi
Citation: Shri Admar Mutt Kaliya Mardana Krishna v. Smt Vishalakshi, CRP No. 12 of 2024, In the High Court of Karnataka at Bengaluru, decided by Hon’ble Justice Suraj Govindaraj, dated 24.06.2024.
The Karnataka High Court held that an application under Order VII Rule 11 of the Code of Civil Procedure (CPC) for rejection of a plaint cannot be dismissed on the ground that the defendant failed to file a written statement. The Court emphasized that clauses (b) and (c) of Order VII Rule 11 do not require a written statement, as the examination is confined to the plaint’s averments alone. The Bench outlined a two-stage process for assessing court fees: (i) determining the proper fee and allowing the plaintiff to pay it, and (ii) rejecting the plaint if unpaid. The Court clarified that the trial court’s reliance on the Karnataka Court Fees and Suit Valuation Act to mandate a written statement was erroneous, as Order VII Rule 11 prohibits considering defenses at this stage.
The case arose from a property dispute where the petitioner sought rejection of the plaint under Order VII Rule 11, alleging improper valuation and insufficient court fees. The trial court dismissed the application, erroneously insisting on a written statement. The High Court’s reversal reinforces procedural discipline in civil litigation, ensuring that plaintiffs are not non-suited prematurely and defendants cannot derail proceedings through procedural objections. This judgment is significant for clarifying that applications under Order VII Rule 11 must be decided solely on plaint contents, safeguarding the right to a full trial and preventing misuse of procedural technicalities.
State of West Bengal v. Rajpath Contractors and Engineers Ltd.
Citation: State of West Bengal v. Rajpath Contractors and Engineers Ltd., 2024 INSC 477, In the Supreme Court of India, decided by Hon’ble Justice Pankaj Mithal and Hon’ble Justice Abhay S. Oka, dated 08.07.2024.
The Supreme Court held that Section 4 of the Limitation Act, 1963, which allows for the exclusion of holidays/vacations when computing limitation periods, is applicable to applications under Section 34 of the Arbitration and Conciliation Act, 1996. The Court clarified that if the three-month limitation period for filing a Section 34 application expires on a day when the court is closed (e.g., during vacations or holidays), the application can be filed on the next reopening day. However, the Court reiterated that Section 5 of the Limitation Act (condonation of delay) remains explicitly excluded for Section 34 applications, meaning delays beyond the statutory three-month period (plus a 30-day grace period under the proviso to Section 34(3)) cannot be condoned.
The case arose from a dispute over an arbitral award, where the State of West Bengal sought to challenge the award under Section 34. The judgment clarifies the interplay between the Limitation Act and the Arbitration Act, affirming that while courts must exclude holidays when calculating the three-month period under Section 34, the strict statutory timeline cannot be relaxed beyond the 30-day grace period. This ruling is significant for arbitration practice, as it balances procedural rigor with practical realities, ensuring parties are not unfairly prejudiced by court closures while upholding the Arbitration Act’s objective of timely dispute resolution.
Gireesh Kumar Sanghi v. Sanghi Cements Limited and Another
Citation: Gireesh Kumar Sanghi v. Sanghi Cements Limited and Another, CP No. 5/59/HDB/2020, National Company Law Tribunal (Hyderabad Bench), decided by Hon’ble Justice Dr. Venkata Ramakrishna Badarinath Nandula (Judicial Member) and Shri Charan Singh (Technical Member), dated 07.06.2024.
The National Company Law Tribunal (NCLT), Hyderabad Bench, held that while tribunals have jurisdiction under Section 59 of the Companies Act, 2013 to rectify a company’s register of members, they must refer cases involving seriously disputed questions of fact (e.g., allegations of fraud, illegal share transfers, or complex family settlements) to civil courts for detailed adjudication. The Tribunal emphasized that its jurisdiction under Section 59 is summary and rectificatory in nature, and it cannot conduct exhaustive investigations into contentious factual disputes. NCLT clarified that civil courts remain the appropriate forum for resolving intricate issues requiring evidence-led examination, such as forgery, non-payment of consideration, or violations of status quo orders.
The case arose from a dispute over the alleged illegal allotment of 85 lakh shares to Respondent No. 2 (Ravi Sanghi), which increased his stake in Sanghi Cements Ltd. to 94.61%, diluting the petitioner’s shareholding. The petitioner alleged fraud, lack of board meetings, and violations of the Companies Act, 1956. The NCLT dismissed the petition, noting that the issues involved—such as disputed family settlements, financial losses, and unauthorized share transfers—warranted a civil court’s thorough inquiry. This decision underscores the jurisdictional limits of the NCLT under Section 59 and reinforces the principle that tribunals must prioritize efficiency in rectification matters while deferring complex factual disputes to civil courts.
Jyoti Mehta (Widow of Harshad Mehta) v. Kishore Janani & Federal Bank
Citation: Jyoti Mehta v. Kishore Janani & Federal Bank, Special Court (Securities Scam Cases), Mumbai, decided by Hon’ble Justice Shalini Phansalkar Joshi, dated
The Special Court for Securities Scam Cases held that the law of limitation does not apply to claims arising from the 1992 securities scam, where accounts were seized by authorities, delaying the filing of claims. The Court ruled that Jyoti Mehta’s claim for ₹6 crore (with 18% interest since 1992) against broker Kishore Janani and Federal Bank was valid, as the delay in filing (until 2014) was justified due to the seizure of financial records. The Court emphasized that the claimants could only act after receiving the seized account books in 2014, making the delay unavoidable and non-malicious.
The case arose from the 1992 stock market scam involving Harshad Mehta, where funds were allegedly siphoned off. Jyoti Mehta, representing her late husband’s estate, sought recovery of dues from Janani and Federal Bank. The judgment is significant for its interpretation of limitation laws in cases involving systemic fraud and prolonged investigations. It underscores that statutory limitation periods may be relaxed when external factors (e.g., seizure of evidence by authorities) prevent timely legal action, ensuring justice in complex financial frauds. This precedent aids claimants in similar scenarios where regulatory actions delay access to critical evidence.
R. Shankar v. E. Rammohan Chowdary
Citation: R. Shankar v. E. Rammohan Chowdary, In the High Court of Karnataka at Dharwad Bench, decided by Hon’ble Justice Sachin Shankar Magadum, dated
The Karnataka High Court held that Order XIII Rule 9 of the Code of Civil Procedure (CPC) mandates the return of original documents to their rightful owner, irrespective of which party physically produced them during trial. The Court emphasized that the provision’s purpose is to ensure fair administration of justice by recognizing rightful ownership, not merely rewarding the party that submitted the documents. The Bench quashed the trial court’s order denying the petitioner’s request for return of title documents (sale deed and Will) produced by the respondent in a dismissed specific performance suit. The Court clarified that the respondent, having lost the suit, had no legitimate claim to retain documents belonging to the petitioner, even if they were submitted as evidence.
The case arose from a dispute where the petitioner sought the return of original title documents after the respondent’s specific performance suit was dismissed. The trial court had denied the request, erroneously relying on the literal interpretation of Order XIII Rule 9. The High Court’s judgment reinforces that procedural rules must serve substantive justice, ensuring rightful owners reclaim their documents even if produced by the opposing party. This decision is significant for civil litigation, as it prevents unjust retention of critical documents by losing parties and clarifies that courts must prioritize ownership rights over procedural technicalities under the CPC
Mala Roy and Ors. v. M/s Jai Balaji Industries Ltd.
https://ibclaw.in/mala-roy-and-ors-vs-jai-balaji-industries-ltd-calcutta-high-court/
Citation: Mala Roy and Ors. v. M/s Jai Balaji Industries Ltd., AP/152/2021, In the High Court of Calcutta, decided by Hon’ble Justice Sabyasachi Bhattacharyya, dated 25.06.2024.
The Calcutta High Court held that a forum selection clause in an agreement must be read harmoniously with the arbitration clause, as the former supplements and does not supplant the latter. The Court emphasized that the parties’ intention to resolve disputes through arbitration remains paramount, and the forum selection clause merely guides procedural aspects (e.g., venue or jurisdiction for arbitration-related proceedings). The Bench clarified that such clauses cannot override the arbitration agreement or dilute the statutory mandate of the Arbitration and Conciliation Act, 1996, which prioritizes arbitration as the primary dispute resolution mechanism.The case arose from a contractual dispute where the respondent sought to enforce a forum selection clause to bypass arbitration. The petitioners argued that the arbitration clause was independent and enforceable. The High Court’s judgment reinforces the principle of party autonomy in arbitration agreements, ensuring that ancillary clauses do not undermine the binding nature of arbitration.
State Bank of India v. Abhijeet Ferrotech Ltd.
https://ibclaw.in/state-bank-of-india-vs-abhijeet-ferrotech-ltd-nclat-new-delhi
Citation: State Bank of India v. Abhijeet Ferrotech Ltd., (2024) ibclaw.in 428 NCLAT, In the National Company Law Appellate Tribunal (NCLAT), New Delhi, decided by Hon’ble Justice Ashok Bhushan (Chairperson) and Hon’ble Mr. Barun Mitra (Technical Member).
The NCLAT held that proceedings under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, cannot be barred by pending proceedings under Section 19 of the Recovery of Debts and Bankruptcy Act (RDB Act), 1993. The Tribunal emphasized that Section 238 of the IBC grants overriding effect to insolvency proceedings, making them independent of debt recovery actions. The Bench clarified that Section 10 of the Code of Civil Procedure (CPC)—which mandates the stay of subsequent suits involving the same matter—does not apply to IBC proceedings, as their purpose (insolvency resolution) is distinct from recovery under the RDB Act. The NCLAT further ruled that rejection of recovery proceedings under the RDB Act does not create issue estoppel for Section 7 applications, as the two regimes operate in separate legal spheres.
The case arose from the State Bank of India’s Section 7 application, which the NCLT rejected due to pending RDB Act proceedings. The NCLAT reversed this, underscoring that the IBC’s objective of corporate insolvency resolution is unaffected by parallel recovery actions. This judgment is pivotal for insolvency law, as it reaffirms the supremacy of the IBC over other statutes and prevents delays in insolvency proceedings caused by overlapping debt recovery mechanisms. It ensures that financial creditors can initiate timely resolution processes, aligning with the IBC’s goal of maximizing asset value and promoting economic efficiency.
Mohd Abdul Samad v. The State of Telangana
Citation: Mohd Abdul Samad v. The State of Telangana, Special Leave to Appeal (Criminal) No. 1614 of 2024, In the Supreme Court of India, decided by Hon’ble Justice B.V. Nagarathna and Hon’ble Justice Augustine George Masih, dated 10.07.2024.
The Supreme Court held that divorced Muslim women are entitled to claim maintenance under Section 125 of the Code of Criminal Procedure (CrPC), 1973, irrespective of the provisions of the Muslim Women (Protection of Rights on Divorce) Act, 1986. The Court emphasized that Section 125 CrPC is a secular, gender-neutral provision applicable to all women, including Muslim women, and cannot be overridden by personal laws. The Bench clarified that the 1986 Act operates in addition to, not in derogation of, Section 125 CrPC, allowing divorced Muslim women to choose between the two regimes. The Court underscored that maintenance is a fundamental right under Articles 14, 15, and 21 of the Constitution, ensuring financial security and gender equality.
The case arose from a challenge by Mohd Abdul Samad against a Telangana High Court order directing him to pay interim maintenance to his divorced wife. The appellant argued that the 1986 Act excluded Section 125 CrPC’s applicability. Rejecting this, the Supreme Court reaffirmed that divorced Muslim women retain the right to seek maintenance under secular law, aligning with precedents like Shah Bano (1985) and Danial Latifi (2001). This judgment is pivotal for women’s rights, as it eliminates ambiguity and ensures Muslim women are not denied equitable access to maintenance. It reinforces the judiciary’s commitment to constitutional principles over regressive interpretations of personal laws, empowering women to secure financial independence post-divorce.
Shashank J Rai v. National Anti Doping Agency-India & Others
Citation: Shashank J Rai v. National Anti Doping Agency-India & Others, 025 LiveLaw (Kar) 193, Writ Petition No. 4710 of 2024, In the High Court of Karnataka, decided by Hon’ble Justice M. Nagaprasanna, dated 31.05.2025.
The Karnataka High Court quashed a 4-year suspension imposed on Shashank J Rai, a national basketball player, for alleged doping, finding that the disciplinary process was vitiated by a breach of sample integrity, non-consideration of vital material, lack of reasoned adjudication, and a palpable violation of the principles of natural justice. The Court noted that the petitioner’s plea was supported by credible biochemical explanations (notably, the presence of 19-NA in his sample was attributed to consumption of non-castrated male pig meat, a staple in his native coastal Karnataka, and not to deliberate doping). The Appellate Authority failed to consider this plausible explanation or the supporting documentation, and neither called for further investigation nor provided reasoned rejection of the petitioner’s defense. The Court emphasized that while anti-doping adjudication operates on strict liability, procedural fairness and reasoned orders are foundational and cannot be sacrificed for administrative expediency. The Court also observed that the sample handling was flawed, with the sample being opened and resealed without proper documentation, in violation of Section 21 of the National Anti-Doping Agency Act and Article 6.4 of the World Anti-Doping Code. Given that three-fourths of the suspension period had already passed and the petitioner’s career had suffered significant harm, the Court declined to remand the matter and instead set aside the suspension entirely, allowing the petitioner to resume his sporting career.
The case arose from a 2022 out-of-competition test, where Rai’s urine sample revealed the presence of 19-NA, leading to a provisional suspension and a formal notice of charge. Despite Rai’s detailed defense and expert opinions, the Disciplinary and Appellate Panels upheld the suspension. The High Court’s judgment highlights the importance of strict adherence to procedural safeguards in anti-doping cases, especially given the severe personal and professional consequences faced by athletes accused of doping. The decision underscores that even in a strict liability regime, authorities must ensure fairness, consider all relevant material, and provide reasoned decisions.
Jaiprakash Agarwal v. Alka Prakash Agarwal & Anr.
https://ibclaw.in/jaiprakash-agarwal-vs-alka-prakash-agarwal-and-anr-nclat-new-delhi
Citation: Jaiprakash Agarwal v. Alka Prakash Agarwal & Anr., (2024) ibclaw.in 420 NCLAT, National Company Law Appellate Tribunal, New Delhi, decided by Hon’ble Justice Ashok Bhushan (Chairperson) and Hon’ble Mr. Barun Mitra (Technical Member), dated 21.07.2024.
The NCLAT held that Form 26AS can serve as credible evidence to prove the existence of a financial debt under the Insolvency and Bankruptcy Code, 2016, when it reflects payments of interest from the corporate debtor that correspond to the claimed financial debt. The Tribunal emphasized that if the entries in Form 26AS (a tax document that records tax deducted at source on interest payments) match the creditor’s claim regarding the financial transaction, such documentation substantiates the creditor’s assertion of a financial debt. The NCLAT clarified that while a written financial contract is not always necessary, documentary evidence such as Form 26AS, which is maintained by the Income Tax Department and reflects actual transactions, can be relied upon to establish the debt.
The case arose from a dispute where the respondent claimed to be a financial creditor based on alleged loans advanced to the corporate debtor. The NCLAT noted that the presence of interest payments recorded in Form 26AS, corresponding to the claimed financial debt, supported the creditor’s case. The Tribunal’s judgment is significant for insolvency law, as it expands the range of admissible evidence for proving financial debts beyond traditional contracts and loan agreements. This approach ensures that creditors are not disadvantaged by the absence of formal documentation, provided they can present credible and verifiable records such as Form 26AS. The decision reinforces the principle that substance and actual transaction records, rather than mere form, should guide the determination of financial debts under the IBC.
State of West Bengal v. Rajpath Contractors and Engineers Ltd.
Citation: State of West Bengal v. Rajpath Contractors and Engineers Ltd., 2024 INSC 477, In the Supreme Court of India, decided by Hon’ble Justice Abhay S. Oka and Hon’ble Justice Pankaj Mithal, dated 08.07.2024.
The Supreme Court dismissed the appeal filed by the State of West Bengal against an arbitral award, holding that the petition under Section 34 of the Arbitration and Conciliation Act, 1996, was filed beyond the statutory limitation period and could not be saved by Section 4 of the Limitation Act, 1963. The Court clarified that the three-month limitation period for filing a Section 34 application had expired before the court vacation began and, therefore, the appellant was not entitled to the benefit of Section 4, which allows filing on the next working day if the limitation period expires during a court closure. The Court also reaffirmed that Section 5 of the Limitation Act (condonation of delay) is expressly excluded for applications under Section 34 of the Arbitration Act, as per the proviso to Section 34(3). The Court further noted that, as per Section 12(1) of the Limitation Act, the day on which the award is received must be excluded when calculating the limitation period, but this did not assist the appellant in this case.
The case arose from a dispute over a bridge construction contract, where the Arbitral Tribunal awarded ₹2.11 crore to the contractor. The State of West Bengal sought to challenge the award under Section 34 of the Arbitration Act but filed its petition after the statutory three-month period had expired. The State argued that the court vacation and limitation rules should have extended the filing period. The Supreme Court rejected this argument, emphasizing that strict adherence to the limitation period is essential in arbitration matters to ensure finality and efficiency.
New Okhla Industrial Development Authority (NOIDA) v. Harnand Singh & Ors.
Citation: NOIDA v. Harnand Singh & Ors., 2024 INSC 509, In the Supreme Court of India, decided by Hon’ble Justice Vikram Nath and Hon’ble Justice Satish Chandra Sharma, dated 18.07.2024.
The Supreme Court held that sale deeds executed by landowners themselves cannot be the sole basis for determining the market value of acquired land under the Land Acquisition Act, 1894. The Court emphasized that such transactions often reflect undervalued prices to evade stamp duty and lack transparency. Instead, the Bench applied the principle of “guesstimation” to enhance compensation by 30% over the value determined by the High Court. The Court relied on the location, potential, and surrounding development of the acquired land (Sector 122, NOIDA) and referenced awards for similarly situated lands. The case arose from the acquisition of land in 1997 for planned industrial development. The landowners contested the compensation awarded by the Reference Court, which the High Court later enhanced.
The Supreme Court’s ruling underscores the judiciary’s role in ensuring fair compensation by rejecting self-serving sale deeds and adopting a pragmatic approach to valuation. This decision is significant for land acquisition disputes, as it prevents landowners from manipulating sale records to inflate claims and ensures compensation reflects the land’s true market potential. It balances the interests of acquiring authorities and landowners, promoting equity in eminent domain cases.
Kotak Mahindra Bank Limited v. Shalibhadra Cottrade Pvt. Ltd. & Ors.
Citation: Kotak Mahindra Bank Limited v. Shalibhadra Cottrade Pvt. Ltd. & Ors., Execution Case No. 193 of 2019, In the Calcutta High Court, decided by Hon’ble Justice Sabyasachi Bhattacharyya, dated 02.07.2024.
The Calcutta High Court held that unilateral appointment of an arbitrator by one party, even without specific allegations of bias, renders the arbitrator ineligible under Section 12(5) of the Arbitration and Conciliation Act, 1996, read with the Seventh Schedule. The Court emphasized that such unilateral appointments inherently compromise neutrality and are grounds for disqualification. However, the Bench clarified that this ineligibility does not automatically invalidate the arbitral award or void the proceedings ab initio. The Court reasoned that Section 12(5) allows parties to waive disqualifications post-dispute through a written agreement, implying that ineligibility is not an absolute jurisdictional defect but a procedural flaw that can be waived. Consequently, since the award-debtor did not challenge the arbitrator’s mandate during the proceedings, the award remained enforceable under Section 36 of the Act.
The case arose from an enforcement petition filed by Kotak Mahindra Bank to execute an ex parte arbitral award. The award-debtor contested enforcement, arguing that the arbitrator’s unilateral appointment invalidated the award. The High Court rejected this, citing Supreme Court precedents, which established that unilateral appointments violate neutrality but do not automatically nullify awards if unchallenged during arbitration. This judgment clarifies that while unilateral appointments are impermissible, parties must raise objections during proceedings to invalidate awards. It balances procedural fairness with finality in arbitration, ensuring that awards are not overturned on technical grounds during enforcement if parties acquiesced to the arbitrator’s mandate.
Pydi Ramana @ Ramulu v. Davarasety Manmadha Rao
Citation: Pydi Ramana @ Ramulu v. Davarasety Manmadha Rao, 2024 INSC 507, In the Supreme Court of India, decided by Hon’ble Justice Pamidighantam Sri Narasimha and Hon’ble Justice Aravind Kumar, dated 10.07.2024.
The Supreme Court reiterated that continuous readiness and willingness under Section 16(c) of the Specific Relief Act, 1963, is a mandatory condition precedent for granting specific performance. The Court distinguished between “readiness” (financial capacity to fulfill contractual obligations) and “willingness” (conduct demonstrating intent to perform the contract). The Bench emphasized that mere payment of an advance or filing a suit at the fag end of the limitation period, without consistent efforts to enforce the agreement, does not satisfy this requirement. The trial court had rightly denied specific performance due to the plaintiff’s unexplained three-year delay in taking legal action and failure to prove sustained intent to perform. The Supreme Court restored the trial court’s decision, ordering a refund of the advance with interest instead of specific performance.
The case arose from a 1993 agreement for the sale of land, where the plaintiff paid an advance but delayed filing the suit until 1997 without justifying the inaction. The Court’s ruling underscores that plaintiffs must actively demonstrate their readiness and willingness throughout the contractual timeline, not just at the time of filing the suit. This judgment is pivotal for contract law, as it prevents misuse of specific performance claims by parties who fail to act diligently, ensuring equitable relief is granted only to those who proactively uphold their contractual commitments.
The State of Punjab & Ors. v. Bhagwantpal Singh alias Bhagwant Singh (Deceased) Through LRs
Citation: The State of Punjab & Ors. v. Bhagwantpal Singh alias Bhagwant Singh (Deceased) Through LRs, 2024 INSC 518, In the Supreme Court of India, decided by Hon’ble Justice Vikram Nath and Hon’ble Justice K.V. Viswanathan
The Supreme Court held that mere continuation of a plaintiff’s name in revenue records does not confer title to the property. The Court clarified that revenue records (such as Jama Bandis) are maintained only for the purpose of realizing land revenue or municipal taxes and do not establish ownership. The Court emphasized that, for a suit for possession based on title, the limitation period is 12 years under Article 65 of the Limitation Act, 1963, and for a suit for declaration, the limitation is three years under Article 58. In this case, the plaintiff failed to claim a declaration of title, and the suit for possession was filed well beyond the limitation period, making it not maintainable.
The Court also noted that the State had constructed a Veterinary Hospital on the land in 1958–59 after the original owner (predecessor of the plaintiff) donated it for public use, and the hospital had been functional ever since, without any objection from the donor. The Supreme Court found that the plaintiff’s suit, filed after 43 years of possession by the State, was barred by limitation and was an abuse of process. The Court further observed that the burden of proof regarding ownership lies on the person challenging the ownership of the person in possession (Section 110 of the Evidence Act, 1872), and the lower courts had wrongly shifted this burden onto the State.
PCIT v. G.K. Developers
Citation: PCIT v. G.K. Developers, ITA No. 1345 of 2018, In the Bombay High Court, decided by Hon’ble Justices G.S. Kulkarni and Somasekhar Sundaresan, dated 24.07.2024.
The Bombay High Court held that the definition of “built-up area” under Section 80IB(14)(a) of the Income Tax Act, 1961, introduced via the Finance (No. 2) Act, 2004 with effect from 01.04.2005, cannot be applied retrospectively. The Court ruled that prior to this amendment, the term “built-up area” excluded balcony space, as per municipal development control regulations. The Bench emphasized that legislative amendments introducing new definitions are presumed to apply prospectively unless expressly stated otherwise. The Court affirmed the Income Tax Appellate Tribunal’s decision to grant deductions under Section 80IB(10) to the assessee (a developer) for a housing project where balcony areas were excluded from the built-up area calculation for pre-2005 projects.
The case arose from a dispute over deductions claimed by G.K. Developers for their “Roseland Residency” project. The Assessing Officer (AO) disallowed the deduction, relying on the post-2005 definition of “built-up area” (which includes balconies) to reject the claim. The High Court rejected this approach, noting that the amended definition was introduced to resolve ambiguity and could not retroactively alter eligibility criteria for projects approved before 01.04.2005. This judgment is significant for real estate developers, as it clarifies that pre-2005 housing projects must adhere to the “built-up area” definition prevailing at the time of approval, ensuring tax benefits are not denied based on retrospective application of amended provisions.
Forever Glory Trading Limited v. Global Powersource (India) Limited
Citation: Forever Glory Trading Limited v. Global Powersource (India) Limited, In the National Company Law Tribunal (NCLT), Mumbai Bench, dated 03.07.2020.
The NCLT Mumbai Bench held that a foreign operational creditor is entitled to initiate a Corporate Insolvency Resolution Process (CIRP) against an Indian corporate debtor under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016. The Tribunal relied on the definitions of “person” and “person resident outside India” under Sections 3(23)(g) and 3(25) of the IBC, which expressly include foreign entities. The NCLT rejected the argument that only domestic creditors can file such petitions, thereby supporting the IBC’s objective of promoting ease of doing business and not discriminating against foreign creditors.
This judgment is significant as it ensures a level playing field for all creditors, regardless of their origin, and aligns with India’s intent to strengthen its insolvency resolution framework. However, the decision has been critiqued for its limited legal reasoning, as it did not extensively analyze or refer to relevant Supreme Court and earlier NCLT Chennai precedents. The case also highlights the need for India to develop a more comprehensive cross-border insolvency regime, as current provisions under the IBC are considered insufficient for robust international insolvency cooperation.
Ekanek Networks Pvt. Ltd. v. Aditya Mertia
Citation: Ekanek Networks Pvt. Ltd. v. Aditya Mertia, CS No. 143/2023, In the High Court of Delhi, decided by Hon’ble Justice Dharmesh Sharma, dated 28.05.2024.
The Delhi High Court clarified that disputes arising from employment contracts do not qualify as commercial disputes under the Commercial Courts Act, 2015. The case involved a civil suit filed by the respondent seeking recovery of unpaid salary and damages, alleging constructive dismissal due to the employer’s failure to secure a proper work permit. The Court held that employment contracts are ‘contracts of service’ and thus fall outside the ambit of the Commercial Courts Act, which is intended to address commercial disputes involving contracts for sale of goods or provision of services. The Court emphasized that employment disputes must be filed as ordinary civil suits and cannot be treated as commercial disputes merely because of the high value involved. The judgment reinforces the distinction between contracts of service and contracts for service, ensuring that commercial courts are not burdened with employment-related litigation. This decision provides clarity for employers, employees, and legal practitioners regarding the appropriate forum for resolving employment disputes.
