Important Supreme Court and High Court Judgments in India – May 2024

Bar of Indian Lawyers through its President Jasbir Singh Malik and Ors. v. D.K. Gandhi PS National Institute of Communicable Diseases.

Citation: Bar of Indian Lawyers through its president Jasbir Sign Malik and Ors. V. D.K. Gandhi PS National Institute of Communicable Diseases., (2024) 8 SCC 430, Civil Appeal No. 2646-2449 of 2009, Hon’ble Supreme Court of India, decided by Hon’ble Justice Bela M. Trivedi and Hon’ble Justice Pankaj Mithal, dated 14.05.2024.

The National Consumer Disputes Redressal Commission (NCDRC) passed an Order that if there was any deficiency in service rendered by the Advocates/Lawyers, a Complaint under the Consumer Protection Act is maintainable. The NCDRC held that a lawyer may not be responsible for the favourable outcome of a case as the result does not depend on only the lawyer’s work. However, if there was a deficiency in rendering services promised, for which he receives consideration in the form of a fee, then the lawyers can be prosecuted under the Consumer Protection Act (Act). Aggrieved by the said Order, the Appeal was preferred before the Hon’ble Apex Court.

The Apex Court held that the services rendered by the Advocates to their clients does not come under the meaning of consumer and professionals must be treated differently from persons carrying out business and trade. Further, the Apex Court held that Advocates cannot be held liable under the Act for deficiency of services. The Judgment highlighted that “A professional requires high level of education, skill and mental labour, success of a professional is dependent on various factors which are beyond their control. Therefore, a professional cannot treated at par with businessmen under the Consumer Protection Act.” and thus cannot be brought under the Act.

Bank Of Baroda v. Union Of India (through the Ministry of Corporate Affairs & Anr.)

Citation: Bank of Baroda v. Union of India through the Ministry of Corporate Affairs & Anr, Writ Petition (L) No. 34152 of 2023, Hon’ble High Court of Bombay, decided by Hon’ble Justice Somasekhar Sundaresan and Hon’ble Justice B.P. Colabawalla, dated 03.05.2023.

Several matters against the Petitioner was pending before the Hon’ble National Company Law Tribunal under Section 94 & 95 of the Insolvency and Bankruptcy Code which are at the stage of lodging number for an unreasonable amount of time and due to the Interim Moratorium granted in the said matters, the Petitioner is unable to enforce their right as available under the Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act). Hence, they have filed the present Petition seeking direction to the NCLT Registrar, to comply with provisions of Rule 28 of NCLT Rules.

The Court directed the Registrar to notify the objections in accordance with Rule 28(2) within a period of seven days from the filing of the Section 94 or Section 95 applications. Additionally, the Registrar was instructed to issue a monthly notice under Rule 28(2) for matters where the objection has not been resolved within the specified seven-day period. The Registrar will also issue a notice under Rule 28(3) and Rule 28(4), indicating that matters where compliance has not been met will be addressed according to Rule 28(4). The notice will provide a compliance timeframe of 30 days from the date of the notice, and affected parties have a right to appeal under Rule 63 of the NCLT Rules within the stipulated timeframe. It was held that any application previously dismissed and refiled without following the proper legal process should not be considered valid and will not be counted as ‘filed’ for the purposes of Section 96 of the IBC.

Tarsem Lal V. Directorate of Enforcement Jalandhar Zonal Office

Citation: Tarsem Lal V. Directorate of Enforcement Jalandhar Zonal Office, (2024) 7 SCC 61, Criminal Appeal No. 2604 of 2024, Hon’ble Supreme Court of India, decided by Hon’ble Justice Abhay S. Oka and Hon’ble Justice Ujjal Bhuyan, dated 16.05.2024.

The Appellants are arrayed as accused in money laundering cases. The Appellants were not arrested by the Directorate of Enforcement post the registration of the case, however the cognizance against the Appellants were taken by the Special Court and since the Appellant did not appear before the Court on Summons, the Special Court issued warrants for procuring the presence of the Appellants. Appellants thus filed the anticipatory bail, which was rejected by the Special Court. The Apex Court ruled that once the Special Court takes cognizance of an offence under the PMLA, the ED cannot arrest the accused without applying for custody from the Special Court. The Court must issue summons, not warrant, and if the accused fails to appear, a bailable warrant may be issued. If the accused still does not appear, a non-bailable warrant can be issued. If the accused responds to the summons, the Court may grant an exemption from personal appearance under Section 205 of the Code of Criminal Procedure. In this case, the appellants were granted anticipatory bail.

Krishan Chand V. Mahindra And Mahindra Financial Services Ltd.

Citation: Krishan Chand V. Mahindra And Mahindra Financial Services Ltd., MANU/HP/0931/2024, CrMP No. 4301 of 2023, Hon’ble High Court of Himachal Pradesh at Shimla, decided by Hon’ble Justice Virendra Singh, dated 25.04.2024.

The Himachal Pradesh High Court, in this case, addressed the issue of whether the time allowed for depositing the compounding fee in cheque dishonour matters under Section 147 of the Negotiable Instruments Act, 1881, could be extended and whether such a fee is to be treated as a statutory fine. The Court clarified that the compounding fee, which is imposed for late compounding of offences, is not a “fine” within the meaning of the Act and does not form part of the substantive adjudication of the dispute. The judgment emphasized that compounding is a voluntary settlement mechanism between parties, and the compounding fee serves as a deterrent to discourage delayed settlements, being a form of atonement rather than a penalty. The Court further held that the requirement to deposit this fee is not a mandatory bar to compounding, and technicalities regarding its payment should not hinder the substantive resolution of disputes under the NI Act.

S. Shivraj Reddy v. S. Raghuraj Reddy and ors.

Citation: S. Shivraj Reddy V. S. Raghuraj Reddy and Others, MANU/SC/0443/2024, Civil Appeal No. 6459 of 2024, Hon’ble Supreme Court of India, decided by Hon’ble Justice B. R. Gavai and Hon’ble Justice Sandeep Mehta dated 16.05.2024.

The Respondent along with others had constituted a partnership firm. A suit was instituted seeking relief of dissolution of the firm and rendition of accounts, and the same was allowed by the Trial Court. The Firm preferred an appeal before the High Court and the Single Judge allowed it on the ground that the original suit was barred by limitation as one of the partners in subsisting partnership firm expired in 1984 and therefore, the Firm stood dissolved immediately on his death. Since the original suit was filed in 1996, it was barred by limitation. Aggrieved by the decision of the Single Judge, the plaintiff approached the Division Bench, which allowed the appeal and set aside the judgment of the Single Judge. It observed that the plea of limitation was never raised during the pleadings in the Trial Court and the Single Judge ought not to have dealt with that issue at all. Hence, the appellants preferred an appeal before the Apex Court.The Apex Court reiterated that it is settled law that even if the plea of limitation is not set up as a defence, the Court has to dismiss the suit if it is barred by limitation. Further, it was observed that the Firm (Defendant No. 1) namely “M/s Shivraj Reddy & Brothers”, was a partnership at will, is not in dispute. It is also not disputed that one of the partners of the firm, namely, Shri M. Balraj Reddy expired in the year 1984. Hence, the event leaves no room for doubt that the partnership would stand dissolved automatically on the death of the partner as per Section 42(c) of the Indian Partnership Act.

 Rajesh Kumar V. Anand Kumar & Ors.

Citation: Rajesh Kumar V. Anand Kumar and Ors, MANU/SC/0459/2024, Civil Appeal No. 7840 of 2023, Hon’ble Supreme Court of India, decided by Hon’ble Justice Pankaj Mithal and Hon’ble Justice Prashanth Kumar Mishra, dated 17.05.2024.

The appellant entered into an Agreement to Sale with the respondent i.e., authorised Power of Attorney in their favour for the purchase of land. Earnest money was paid on the date of the Agreement, and the balance amount was to be paid on the date of registration of the sale deed which was to be done within 6 months. In 1996, an additional amount was paid for which an endorsement was made on the backside of the agreement. Thereafter, another agreement was executed between the parties extending the execution of the sale deed. The POA executed the sale deed of the land in favour of the respondents even though they were aware of the earlier sale agreement and its extensions. A suit was filed, and the Trial Court decreed the same, which was set aside by the High Court. Aggrieved, the present Appeal is filed.

The Apex Court held that in view of Section 12 of the Specific Relief Act of 1963, in a suit for specific performance wherein the plaintiff is required to prove that he has performed or has always been ready and willing to perform the essential terms of the contract. The Court clarified that a Power of Attorney holder cannot depose in lieu of the plaintiff or the principal for acts carried out solely by the principal, nor can the POA provide testimony on matters for which only the principal possesses personal knowledge and should be subject to cross-examination. Accordingly, the Apex Court upheld the High Court’s order, reinforcing the principle that in matters of specific performance the personal knowledge and direct testimony of the principal are indispensable to the judicial process.

Bhikchand S/O Dhondiram Mutha through LRS. V. Shamabai Dhanraj Gugale through LRS.

Citation: Bhikchand S/O Dhondiram Mutha through Lrs. V. Shamabai Dhanraj Gugale through Lrs., 2024 SCC OnLine SC 927, Civil Appeal No. 5026 of 2023, Hon’ble Supreme Court of India, decided by Hon’ble Justice Hrishikesh Roy and Hon’ble Justice Prashant Kumar Mishra, dated 14.05.2024.

A decree against the Appellant was passed by the Trial Court and the same was varied by the Appellant Court. After the decree was varied, the Appellant’s property was put in auction, as such the Appellant applied for restitution by invoking Section 144 of the Civil Procedure Code (CPC). This was rejected by the Trial Court and Appellate Court on the ground that the modified original decree to the extent of interest was not paid by the Appellant. Meanwhile, the decree was executed by sale of the Appellant’s property.

The Apex Court held that the Appellant through the Application under Section 144 of CPC, is not seeking for modification of the decree, however, is merely seeking for restitution of his property which was sold at a lower price. While allowing the application of the Appellant, the Apex Court observed that execution of the decree by attachment of whole property was not necessary when part of the property could have satisfied the decree. It held that the Courts must examine the extent of injury that would be caused due to the sale of the entire property when part of it was sufficient to satisfy the decree. The Apex Court held that a decree for realization of a sum in favor of the Plaintiff should not amount to exploitation of the Judgment Debtor by selling his entire property.

M/S Geo Miller & CO. Pvt. Ltd. V. UP Jal Nigam & ors.

 Citation: M/S Geo Miller & Co. Pvt. Ltd. V. UP Jal Nigam and Others, Civil Misc. Arbitration Application No. 4 of 2024, the Hon’ble High Court of Judicature at Allahabad, decided by Hon’ble Justice Shekhar B. Saraf, dated 17.05.2024.

The Applicant Geo Miller & Co. Pvt. Ltd. filed an application under Section 11 of the Arbitration and Conciliation Act (Act) seeking the appointment of an arbitrator to resolve disputes arising from its contract with UP Jal Nigam. Accordingly, the Application was allowed, and the Arbitrator was appointed. However, the time for making the Arbitral Award as provided under Section 29A of the Act expired and the Arbitrator could not publish his award within the statutory limit. Therefore, the parties filed the present application seeking extension of time in accordance with law.

The Court held that when faced with conflicting judgments—one asserting that an application for extension is maintainable only before the Court under Section 2(1)(e) of the Act, and the other contending that such an application is maintainable before the High Court (given that the Arbitrator was appointed by the High Court under Section 11 of the Act)—the earlier judgment delivered by the larger bench, which resolved the differences among the co-ordinate benches on the issue of law, should prevail.