Important Supreme Court and High Court Judgments June 2024

Ambience Pvt. Ltd., New Delhi vs Income Tax Office

Citation: Ambience Private Limited, New Delhi vs Income Tax Office, Range-73, New Delhi, ITA No. 558/DEL/2022, Income Tax Appellate tribunal Delhi, Decided by Dr. B.R.R. Kumar (Accountant Member) and Hon’ble Justice Anubhav Sharma, dated 29.04.2024.

 The Income Tax Appellate Tribunal emphasized that the burden of proof lies with the taxpayer to substantiate claims for deductions with proper documentation and evidence. It clarified that mere assertions without supporting evidence are insufficient to challenge findings made by tax authorities.

The ruling reinforced the necessity of adhering to procedural norms in tax assessments, ultimately establishing that tax benefits must be clearly justified and documented to be accepted by tax authorities and appellate bodies.

Bharti Airtel Ltd. & Anr. V. Vijaykumar V. Iyer & Ors.

Citation: Bharti Airtel Limited and another vs Vijaykumar V. Iyer and Others, Civil Appeals no. 3088-89 of 2020, Supreme Court of India, decided by Hon’ble justice Sanjiv Khanna and Hon’ble Justice S.V.N. Bhatti, dated 29.04.2024.

The Supreme Court held that during the (CIRP), statutory or insolvency set-off cannot be claimed by creditors ( mutual setoffs violate the IBC’s  Section 30(2)(b)(ii), which does not allow such claims). The Court clarified that, except for contractual set-off agreed prior to the initiation of CIRP or equitable set-off arising from the same transaction, no set-off is permissible during CIRP. court further held that Regulation 29 of the Liquidation Regulations, which allows set-off during liquidation, does not apply to CIRP, and the IBC overrides any contrary provisions in other laws.

This judgment is useful as it provides clear guidance on the non-applicability of set-off rights during CIRP, thereby safeguarding the integrity of the insolvency process and ensuring that all creditors are treated equitably. It prevents individual creditors from bypassing the moratorium and depleting the debtor’s assets through unilateral set-off claims, thus supporting the collective resolution objective of the IBC. The ruling helps resolution professionals and creditors understand the strict limitations on set-off during CIRP and reinforces the importance of adhering to the IBC framework.

Essar House Pvt. Ltd. V. Arcellor Mittal Nippon Steel India Ltd.

Citation: Essar House Private Limited vs Arcellor Mittal Nippon Steel India Limited, Civil Appeal No. 6574 of 2022 (Arising out of SLP (C) No. 3187 of 2021) and Civil Appeal No. 6575 of 2022 (Arising out of SLP (C) No. 3351 of 2021), Supreme Court of India, decided by Hon’ble Justice Indira Banerjee and Hon’ble Justice A S Bopanna, dated 14.09.2022.

 The Supreme Court ruled on the enforceability of arbitration agreements, stating that courts must refer disputes to arbitration if a valid agreement exists. The court emphasized that challenges to the validity of the arbitration agreement should beresolved by the arbitral tribunal, reinforcing the principle of competence-competence in arbitration law. Ultimately, the Supreme Court upheld the arbitration agreement               and directed that dispute be resolved through arbitration, promoting alternative dispute resolution mechanisms.

This judgment is significant for expanding the scope of interim relief in arbitration, ensuring courts prioritize substantive justice over procedural rigidity. By clarifying that Section 9 applications need not comply strictly with CPC safeguards like Order XXXVIII Rule 5, it streamlines interim protections and deters parties from exploiting procedural loopholes to frustrate arbitration. The ruling reinforces the pro-arbitration ethos of the 1996 Act, enabling creditors to secure assets during disputes and promoting confidence in insolvency resolution processes. It also cautions against opaque intra-group financial adjustments that prejudice third-party rights, ensuring transparency in corporate restructuring.

Government of NCT of Delhi & Anr V. M/s BSK Realtors LLP & Anr.

Citation: Government of NCT of Delhi & Another V. M/s BSK Realtors LLP & Another, 2024 INSC 455, Civil Appel Number /2024 (Arising Out of SLP (Civil) No. …Diary No. 17623/2021), Civil Appellate Jurisdiction, Supreme Court of India, decided by Hon’ble Justice Surya Kant, Hon’ble justice Dipankar Datta and Hon’ble justice Ujjal Bhuyan, Dated on  17.05.2024.

The Supreme Court allowed the appeal, holding that the doctrine of res judicata does not bar reconsideration of land acquisition proceedings when a subsequent larger bench overrules prior precedent. The dispute arose from the Delhi High Court’s 2017 decision declaring the acquisition of BSK Realtors’ land lapsed under Section 24(2) of the 2013 Act (non-payment of compensation/non-taking of possession), The Court held that GNCTD, though not a party to the initial appeal, could challenge the High Court’s decision as public interest in land acquisition outweighs strict application of res judicata. Emphasizing Article 142, the Court remanded the matter to the High Court for fresh adjudication under Indore’s standards, which require both physical possession and compensation payment to validate acquisition. The judgment clarified that merger doctrine does not apply when a subsequent authoritative ruling fundamentally alters the legal landscape.

The Supreme Court focused on enforcing contractual obligations under public-private partnership agreements related to land use and development. The court emphasized the importance of transparency and regulatory compliance while balancing the contractual terms with public interest, particularly in real estate projects.

Harinder Bashista V. Sanjib Kumar & Ors.

Citation: Harinder Bashista V. Sanjib Kumar & Others, Company Appeal (AT) (Insolvency) No. 197 of 2023, National Company Law Appellate Tribunal, Principal Bench, New Delhi, decided by Hon’ble Justice Ashok Bhushan, Chairperson and Barun Mitra, Member (Technical), dated 31.05.2024.

 The tribunal focused on the resolution process, emphasizing that the Committee of Creditors’ (CoC) commercial wisdom, once properly exercised, should not be interfered with unless there is a clear violation of legal norms or principles of fairness. The judgment underscored that the CoC’s decision must align with the overarching goals of the IBC, including the time-bound resolution of insolvency matters. This ruling reinforced the principle that the NCLAT’s role is to ensure procedural fairness and compliance with the IBC, rather than to second-guess commercial decisions made by the CoC.

India Spinal Injuries Centre V. Galaxy India

Citation: India Spinal Injuries Centre V. Galaxy India, ARB.P. 848/2023, I.A. 15490/2023, The High Court of Delhi, New Delhi, decided by Hon’ble Justice Dinesh Kumar Sharma, dated 08.05.2024.

The court addressed the procedural aspects of invoking arbitration under the Arbitration and Conciliation Act, 1996. It reaffirmed that arbitration clauses, when validly incorporated into contracts, must be upheld unless there are compelling reasons to question the legality or fairness of the agreement.

The ruling emphasized that parties bound by such arbitration clauses must resolve their disputes through arbitration, aligning with the principle of reducing the burden on courts and promoting alternative dispute resolution mechanisms.

Jaiprakash Kulkarni & Anr. V. The Banking Ombudsman & Ors.

Citation: Jaiprakash Kulkarni & Another V. The Banking Ombudsman & Others, Writ Petition No. 1150 of 2023, The High Court of Judicature at Bombay, Ordinary Original Civil Jurisdiction, decided by Hon’ble Justice Firdosh P. Pooniwalla and Justice G.S. Kulkarni, dated 13.06.2024.

The Bombay High Court examined whether the Ombudsman’s actions and decisions were in accordance with the legal framework governing the Banking Ombudsman Scheme, 2006. The court clarified the limits of the Ombudsman’s powers, especially regarding issues that fall beyond the scheme’s purview, emphasizing that grievances must align with the procedural and jurisdictional mandates of the Ombudsman framework.

The decision reinforced that parties seeking redress under the Ombudsman must ensure that their claims fall within the legal scope of the Banking Ombudsman Scheme to maintain the integrity of the dispute resolution process.

Jayanthi Municipal Corporation & Anr. V. Bimal Kumar Shah & Ors.

Citation: Jayanthi Municipal Corporation & Another V. Bimal Kumar Shah & Others, I.A. No. 559/2023 & I.A. No. 655/2019, The National Company Law Tribunal, Bengaluru, decided by Hon’ble Justice Soumen Sen, and Justice Saugata Bhattacharyya, dated 28.03.2024.

The National Company Law Tribunal (NCLT), Bengaluru, dealt with the balance between municipal regulations and corporate insolvency procedures, particularly in the context of public infrastructure projects.

The NCLT clarified that while municipal authorities have jurisdiction over local governance and land use regulations, these powers should not impede or conflict with the broader insolvency resolution process under the IBC. The court emphasized that restructuring or liquidation proceedings must respect municipal laws, but the latter cannot delay or undermine the statutory timeframes of the IBC. The decision highlighted the need for coordination between local authorities and insolvency professionals to ensure smooth resolution of insolvency cases without violating public regulations.

Kolkata Municipal Corporation & Anr. V. Bimal Kumar Shah & Ors.

Citation: Kolkata Municipal Corporation and Another V. Bimal Kumar Shah and Others, Civil Appeal No. 4504 of 2024, Arising Out of SLP (C) No. 4504 of 2021, Civil Appellate Jurisdiction, The Supreme Court of India, decided by Hon’ble Justice Pamidighantam Sri Narasimha and Justice Aravind Kumar, dated 16.05.2024.The Supreme Court emphasized that while municipal bodies can enforce zoning and construction regulations, their actions must be fair, transparent, and consistent with the principles of natural justice. Arbitrary or unreasonable decisions impacting private development projects are subject to judicial review to ensure compliance with legal standards.

Court struck down the Kolkata Municipal Corporation’s (KMC) acquisition of the respondent’s property under Section 352 of the Kolkata Municipal Corporation Act, 1980, holding that the provision only permits identification of land for public purposes but does not confer power for compulsory acquisition. The Court clarified that compulsory acquisition must follow Section 537, which mandates state government involvement, adherence to procedural safeguards under Article 300A of the Constitution, and compliance with the seven sub-rights inherent to property deprivation: notice, hearing, public purpose validation, fair compensation, reasoned decisions, timely execution, and lawful conclusion. The KMC’s unilateral actions, including altering land records without due process, were deemed unconstitutional. Emphasizing that statutory powers cannot override constitutional mandates

Mahesh Devchand Gala V. Union of India & Ors

Citation: Mahesh Devchand Gala V. Union of India & Others, Criminal Writ Petition No. 938 of 2024, The Hight Court of Bombay, decided by Hon’ble Justice Revati Mohite Dere and Justice Manjusha Ajay Deshpande, dated 10.05.2024.

Mahesh Devchand Gala, the petitioner, filed a writ petition challenging the validity of certain actions taken by law enforcement authorities in connection with a criminal investigation. The petitioner alleged that his rights were being infringed upon, citing improper procedures and lack of due process in the investigation against him. He sought relief from the Court to ensure that his constitutional rights were upheld and that the actions of the authorities were scrutinized.

The Court ruled that law enforcement agencies must adhere strictly to legal procedures and respect the rights of individuals during investigations. It reiterated that any deviation from established procedures could lead to the violation of constitutional rights, warranting judicial intervention. The judgment underscored the balance between effective law enforcement and the protection of individual liberties, reinforcing the principle that every individual is entitled to fair treatment under the law.

Manager ICICI Bank V. Prakash Kaur & Ors

Citation: Manager ICICI Bank V. Prakash Kaur & Others, Criminal Appeal No. 267 of 2007 (Arising out of SLP (Crl.) No. 15 of 2007), decided by Dr AR. Lakshmanan & Altamas Kabir, dated 26.02.2007.

The case arose when Prakash Kaur issued cheques to ICICI Bank, which were subsequently dishonored due to insufficient funds. The bank filed a complaint under Section 138, seeking to initiate criminal proceedings against Kaur. The primary issue was whether the complaint was maintainable given that Kaur claimed she had no knowledge of the cheque being issued for a loan taken by her husband, who was the actual borrower.

The Court emphasized that, in cases involving dishonored cheques, the complainant must establish that the accused had a role in issuing the cheque and had knowledge of its issuance. The judgment clarified that mere signature on the cheque does not imply liability unless there is evidence of complicity in the transaction. This ruling reinforced the legal interpretation of liability under the Negotiable Instruments Act, promoting the protection of creditors while ensuring fairness in the penalization of dishonored cheques.

Sri C M Meer Liyakhat Ali V. Smt. Vasanthamma & Ors

Citation: Sri C M Meer Liyakhat Ali V. Smt. Vasanthamma & Others, R.S.A No. 1366 of 2018 (DEC), High Court of Karnataka, Bengaluru, decided by Hon’ble Justice M.G.S. Kamal, dated 16.04.2024.

The appellant, Sri C M Meer Liyakhat Ali, contested the decisions of lower courts regarding his claim to a property that was also claimed by Smt. Vasanthamma and others. The appellant asserted his title over the property based on ownership documents, while the respondents challenged the validity of these documents, alleging that they had superior rights over the property due to prior possession and other legal grounds. The case involved detailed examination of evidence related to property ownership and the implications of various legal principles.

The Court ruled that ownership claims must be supported by valid documents and that possession alone cannot confer title without adequate legal backing. The decision underscored the principle that the burden of proof lies on the party claiming ownership, and the need for courts to thoroughly evaluate evidence to determine rightful ownership. The ruling reinforced the importance of legal documentation and proper procedures in resolving property disputes.

 Sri. Mathikere Jayaram Shantaram V. Sri. Promod C.

Citation: Sri. Mathikere Jayaram Shantaram V. Sri. Promod C, Criminal Petition No. 2998 of 2023, High court of Karnataka at Bengaluru, decided by Hon’ble Justice M. Nagaprasanna, dated on 21.06.2024.

criminal petition seeking quashing of the FIR registered against him by Sri. Promod C, alleging that the petitioner had engaged in fraudulent activities related to a financial transaction. The petitioner contended that the allegations were baseless and that the FIR was filed with malicious intent, asserting that the matter was purely civil in nature and should not have been treated as a criminal offense.The High Court, , emphasized the distinction between civil and criminal matters, noting that not all disputes arising from financial transactions warrant criminal proceedings. The Court underscored the need for clear evidence of criminal intent to justify the initiation of criminal charges, highlighting that mere dissatisfaction with a transaction does not constitute a criminal offense. The ruling reinforced the principle that criminal law should not be invoked for disputes that can be adequately resolved through civil remedies, thereby upholding the integrity of the legal system and preventing abuse of criminal processes.

Union Bank of India V. Dinkar T. Venkatasubramanian and Ors

Citation: Union Bank of India V. Dinkar T. Venkatasubramanian and Others, I.A. No. 3961 of 2022 in Company Appeal (AT) (Ins.) No. 729 of 2020, In the National Company law Appellate tribunal, New Delhi, decided by Hon’ble Justice Ashok Bhushan (Chairperson), Justice Rakesh Kumar Jain, justice Rakesh Kumar, Dr. Alok Srivastava( Member ) and Barun Mitra( Member). dated 25.05.2023.

The appeal arose from the resolution proceedings of a corporate debtor, where Union Bank of India, as a financial creditor, challenged certain decisions made by the resolution professional and the committee of creditors. The bank contended that the resolution plan submitted by the resolution applicant did not adequately consider its claims and that there were procedural irregularities in how the resolution process was conducted. The bank sought to ensure that its dues were addressed fairly in the resolution process.

The Tribunal ruled that financial creditors, including Union Bank, must be given due consideration in the resolution plan to protect their interests. The Court highlighted that the resolution process should adhere to the provisions of the IBC, ensuring that all claims are evaluated properly and that procedural norms are followed to uphold the integrity of the process. The decision underscored the importance of equitable treatment of creditors during insolvency proceedings and reinforced the role of the NCLT and NCLAT in supervising adherence to the statutory framework of the IBC.

Vijay Raj Surana V. CBI and Anr.

Citation: Vijay Raj Surana V. CBI and Another, CRIMINAL PETITION NO. 5333 OF 2023, C/W CRIMINAL PETITION NO. 5354 OF 2023, In the High Court of Karnataka at Bengaluru, decided by Hon’ble Justice Hemant Chandangoudar, dated 15.04.2024.

Vijay Raj Surana filed the petitions challenging the FIR registered by the CBI. The petitioner contended that the allegations against him were unfounded and that the proceedings were initiated without sufficient evidence. The case involved questions related to the scope of the CBI’s authority in investigating financial irregularities and the rights of individuals under investigation. The petitioner sought quashing of the FIR on grounds of lack of merit and procedural impropriety.

The High Court, , emphasized the necessity for thorough scrutiny of the evidence presented before allowing criminal proceedings to continue. The Court ruled that mere allegations without substantial evidence should not justify the initiation of criminal investigations. It reinforced the principle that investigative agencies like the CBI must operate within the confines of the law and that individuals must be protected from arbitrary actions. The decision highlighted the importance of balancing the investigative powers of agencies with the rights of the accused to ensure fairness in the legal process