SARFAESI Act – Statutory Appeal – Mandatory Pre-deposit – Section 18 – Borrower challenged dismissal of Securitisation Application by DRT by filing writ petition under Article 226 – Single Judge directed deposit of amounts before Bank and treated same as statutory pre-deposit – Held: Second proviso to Section 18 mandates deposit of 50% of debt due, reducible only up to 25% by DRAT for recorded reasons – Pre-deposit is a condition precedent for entertaining appeal – No provision under SARFAESI Act permitting deposit before secured creditor to be treated as statutory pre-deposit before DRAT – Deposit has to be made with Appellate Tribunal only – Direction of Single Judge treating bank deposit as statutory pre-deposit held unsustainable [Paras 10, 15-21].

Writ Jurisdiction – Alternative Statutory Remedy – SARFAESI proceedings – Borrower has efficacious remedy of appeal under Section 18 against DRT order – Writ petition filed to circumvent statutory appeal and mandatory pre-deposit – Held: High Court should not entertain writ petition under Article 226 when effective statutory remedy exists, particularly in matters relating to recovery of bank dues – None of the exceptional circumstances (lack of jurisdiction, violation of natural justice, defiance of statutory provisions, or repealed law) made out – Writ petition not maintainable [Paras 14, 22-28].

Pre-deposit – Nature and Scope – Amount to be deposited is “debt due” inclusive of interest under Section 2(g) of RDB Act – Complete waiver of pre-deposit impermissible – DRAT’s discretion limited between 50% and 25% of debt due – Amount deposited pursuant to interim orders before Bank cannot be appropriated or adjusted as statutory pre-deposit unless statute so provides – Borrower cannot claim adjustment to avoid compliance with Section 18 [Paras 16-21].

Judicial Discipline – Interference under Article 226 in SARFAESI matters – Apex Court consistently cautioned High Courts against bypassing statutory remedies under SARFAESI/RDB Acts – Held: Learned Single Judge failed to consider binding precedents and statutory scheme – Impugned judgment liable to be set aside [Paras 23-29].

Decision: Writ appeal allowed – Judgment dated 14.08.2024 in WP(C) No.21833 of 2024 set aside – Writ petition dismissed – Borrowers relegated to statutory remedy under Section 18 of SARFAESI Act [Para 29].

Criminal Law – Quashing - Cheating – Commercial Transactions – Quashing of Criminal Proceedings – Managing Director of company summoned under Section 420 IPC for alleged non-payment of dues for goods supplied – Respondent had already filed civil suit for recovery which was decreed – Criminal complaint filed belatedly after three years – Held: Dispute essentially civil in nature and criminal proceedings amounted to abuse of process [Paras 9, 44–48].

Section 420 IPC – Dishonest Intention at Inception – Essential Ingredient – Mere failure to pay outstanding dues or subsequent financial incapacity insufficient – Partial payments made and continued business dealings negate dishonest intention at inception – Admission by complainant’s witness that supplies were made to maintain business relations demolishes allegation of inducement – No offence of cheating made out [Paras 16–26].

Evidence – Admission of Complainant’s Witness – Effect – CW-3 admitted supplies were continued to preserve business relationship and not due to fraudulent representation – Such admission held fatal to prosecution case under Section 420 IPC – Inducement and deception not established [Paras 20–22, 47].

Director’s Criminal Liability – Absence of Vicarious Liability under IPC – Managing Director prosecuted after complaint against company dismissed due to striking off – IPC does not recognise vicarious liability unless statutorily provided – In absence of specific allegations of personal fraudulent intent, Director cannot be prosecuted solely for acts done on behalf of company [Paras 27–31, 36–40].

Company as Principal Accused – Effect of Dropping Proceedings Against Company – Complaint against company dismissed – Director acting only as agent of company – Held: Prosecution of Director alone unsustainable when company itself is not an accused and no independent criminality is alleged [Paras 28–33, 39–40].

Cheating vs Breach of Contract – Settled Principles – Assurance to pay in ordinary course of business does not amount to fraudulent inducement – Failure to honour promise due to financial distress or BIFR proceedings gives rise to civil liability only – Criminal law cannot be used as pressure tactic for recovery [Paras 23–25, 37–38].

Inherent Powers – Section 482 CrPC – Abuse of Process – Criminal proceedings initiated after invocation of civil remedies and during pendency of SICA proceedings – Held fit case for exercise of inherent jurisdiction to prevent abuse of process and secure ends of justice [Paras 42–49].

Decision: Petition allowed – Order on Charge dated 04/09/2018 passed by the Metropolitan Magistrate and Revisional Order dated 30/04/2019 passed by the Additional Sessions Judge quashed – Petitioner discharged from offence under Section 420 IPC – All pending applications disposed of.

Criminal Law – Quashing of FIR – Section 482 Cr.P.C. – Matrimonial Dispute – Allegations arising out of strained marital relationship – FIR lodged after initiation of divorce proceedings – Allegations found to be counterblast and motivated – High Court empowered to prevent abuse of process of law [Paras 5–10, 30].

Rape – Marital Rape Exception – Sections 375 and 376 IPC – Husband and Wife – Sexual intercourse between legally married spouses where wife is major – Covered by Exception 2 to Section 375 IPC – Held, no offence of rape under Section 376 IPC is made out even if intercourse alleged to be without consent – Continuation of prosecution under Section 376 held impermissible [Paras 23–26].

Unnatural Offence – Section 377 IPC – Applicability Between Spouses – Repugnancy with Section 375 IPC – Acts alleged between husband and wife – In light of amended definition of rape and marital exception, prosecution under Section 377 IPC for acts within marital relationship held unsustainable – Section 377 not attracted where alleged acts fall within marital domain [Paras 27–29].

Constitutional Interpretation – Effect of Navtej Singh Johar Judgment – Scope of Section 377 IPC – Acts criminalised under Section 377 substantially diluted – Certain acts now covered within expanded definition of sexual intercourse under Section 375 IPC – Section 377 rendered redundant in marital context [Paras 28–29].

Criminal Law – Bhajan Lal Principles – Malicious Prosecution – FIR lodged with ulterior motive to harass husband – Absence of medical evidence supporting allegation of unnatural sex – Allegations vague and omnibus – Case falls within categories warranting quashing under Bhajan Lal guidelines [Paras 30–31].

Cruelty – Section 498A IPC – Distinct Offence – Forced sexual acts within marriage may constitute cruelty – Such allegations to be examined at trial – No interference at quashing stage with respect to Sections 498A, 323 and 294 IPC [Paras 27, 32].

Partial Quashing – Scope – High Court may quash proceedings in part – Proceedings under Sections 376(2)(n) and 377 IPC quashed – Prosecution under Sections 498A, 323 and 294 IPC permitted to continue in accordance with law [Paras 32–33].

Decision: Miscellaneous Criminal Case partly allowed – FIR and charge sheet in Crime No. 971/2023 quashed to the extent of offences under Sections 376(2)(n) and 377 IPC – Proceedings under Sections 498A, 323 and 294 IPC to continue – Order of cognizance modified accordingly.

Banking Law – Foreclosure Charges – MSME Borrower – RBI Circular dated 07.05.2014 – Petitioner, a registered MSME, availed Term Loan and Overdraft Credit facilities – Bank levied foreclosure charges on prepayment of loans – Held: RBI Circular dated 07.05.2014 prohibits levy of foreclosure / prepayment charges on floating rate term loans to individual borrowers – Circular does not distinguish between business or personal loans [Paras 4–6, 11–12].

MSME – Medium Enterprise – Entitlement to Benefit – Bank contended that circular applies only to Micro and Small Enterprises – Reliance placed on Devendra Surana v. Bank of Baroda – Held: Even Medium Enterprises fall within ambit of “individual borrowers” under RBI Circular – No distinction carved out in circular based on size of enterprise [Paras 7, 12].

RBI Directions, 2025 – Prospective Application – Bank relied on RBI (Pre-payment Charges on Loans) Directions, 2025 repealing earlier circulars – Held: As per Clause 3(ii), Directions, 2025 apply only to loans sanctioned or renewed on or after 01.01.2026 – Loans in present case sanctioned on 30.08.2024 – Hence, Directions, 2025 not applicable [Paras 8, 13–14].

Contractual Terms vs Statutory Circular – Supremacy of RBI Directions – Though loan agreement contained clause permitting levy of prepayment penalty, same cannot override binding RBI Circular – Bank’s action in levying foreclosure charges held illegal and arbitrary [Paras 10–15].

Relief – Refund of Amount – Petitioner held entitled to refund of foreclosure charges levied on Term Loan and Overdraft facilities – Bank directed to refund Rs. 7,82,282.02 and Rs. 17,70,000/- within stipulated time [Paras 15–16].

Decision: Writ Petition Allowed – Respondent Bank directed to refund foreclosure charges – Directions issued to comply within two weeks.

Criminal Law – Quashing under Section 482 Cr.P.C. – Abuse of Process – Accused charged with offences under Sections 332, 353, 354(B), 354(A), 224 and 225(1) IPC alleging assault on woman civil police officer, attempt to disrobe her and rescue of accused from police custody – Petitioners sought quashment contending false implication and police atrocities – District Police Complaints Authority, after detailed enquiry with examination of witnesses, documents, CDs and photographs, found de facto complainant and other police officers guilty of dereliction of duty and police excesses in relation to same incident – Authority recommended disciplinary action – Order of Police Complaints Authority not shown to have been challenged – Held: Findings of competent statutory authority headed by retired District Judge cannot be ignored while considering inherent jurisdiction under Section 482 – Findings clearly disprove prosecution allegations – Continuation of criminal proceedings would amount to abuse of process of court – Ends of justice require termination of prosecution [Paras 3, 5].

Police Atrocities – Evidentiary Value of Findings of Police Complaints Authority – Where independent statutory body, after enquiry, finds police officials guilty of excesses in same transaction forming subject matter of criminal case – Such findings are relevant and persuasive for exercising inherent powers – Prosecution based on version of same police officials rendered unreliable – Proceedings liable to be quashed [Paras 3, 5].

Inherent Powers – Section 482 Cr.P.C. – Scope – High Court justified in quashing proceedings where uncontroverted material of sterling quality demonstrates that prosecution case is manifestly attended with mala fides and instituted to shield police misconduct – Preventing miscarriage of justice and abuse of judicial process [Paras 5-6].

Decision: Criminal M.C. allowed – Proceedings against petitioners/accused Nos.1 to 5 in C.C. No.310/2017 on the files of the Judicial First Class Magistrate Court, Adoor arising out of Crime No.1419/2016 of Pandalam Police Station quashed [Final Order].

Civil Suit – Declaration of Title – Burden of Proof – Plaintiffs sought declaration of title and injunction claiming ancestral ownership over suit lands – Held: In a suit for declaration, plaintiffs must succeed on the strength of their own title and not on the weakness of the defendants’ case – Failure to prove title of ancestors fatal to claim [Paras 21-23, 54(i)-(ii)].

Evidence – Revenue Records – Pattadar Passbooks and Cist Receipts – Plaintiffs relied on pattadar passbooks, cist receipts and revenue entries to establish title – Held: Revenue records and mutation entries are not documents of title and do not confer ownership – They raise, at best, a presumption of possession for fiscal purposes only [Paras 26-29, 48-53].

Possession – Presumption under Section 110 Evidence Act – “Possession Follows Title” – Scope – Presumption applies only when possession is prima facie lawful and where no party is shown to have title – Where property stands recorded in name of Endowment/Mutt, presumption cannot be invoked in favour of plaintiffs claiming declaration of title without proving ancestral ownership [Paras 38-47, 54(iv)-(v)].

Ancestral Property – Proof of Pedigree and Title – Plaintiffs claimed ancestral title based on common surname “Matam” – No documentary evidence produced to prove that their ancestors were owners of suit lands – Mere similarity of surname insufficient to establish title – Held: Ancestral title must be proved by cogent documentary evidence [Paras 26, 30-33, 54(vi)].

Pleadings – Alleged Admission – Denial by Pleading Ignorance – Defendants pleaded ignorance regarding certain revenue documents and loans – Held: Pleadings must be read as a whole – Plea of “not aware” regarding collateral facts does not amount to admission of title or possession – No admission relieving plaintiffs of burden of proof [Paras 34-36].

Endowment Property – Title of Religious Institution – Evidence showed suit lands recorded in name of Sri Pothuluri Veera Brahmendra Swamy Mutt – Plaintiffs failed to rebut revenue and endowment records – Held: Trial Court rightly held property belonged to religious institution and not to plaintiffs [Paras 28, 31-32, 54(v)].

Decision: First Appeal dismissed – Judgment and decree dated 28.07.2011 of the III Additional District Judge, Kurnool at Nandyal affirmed – Plaintiffs not entitled to declaration of title or injunction – No order as to costs.

Rent Control – Leave and Licence – Residential or Commercial Use – Registered leave and licence agreement contained multiple clauses expressly restricting use of flat to residential purpose only – Revisional Authority selectively relied on clauses permitting “residence-cum-office” use while ignoring clauses mandating residential use – Held: Licence granted for residential purpose; application under Section 24 MRC Act maintainable – Revisional finding held perverse [Paras 8–10, 17–18].

Revisional Jurisdiction – Section 44 MRC Act – Scope – Revisional Authority relied on film production contract and alleged lien/charge over flat arising therefrom – Held: Consideration of contractual liabilities, arbitral award and alleged charge over property is beyond jurisdiction under Sections 24 and 44 of MRC Act – Revisional Authority exceeded its statutory limits [Paras 11–14].

Evidence – Commercial User – Effect – Photographs, fixtures and electricity bills showing commercial use relied upon by Revisional Authority – Held: Such evidence may show occupation or user but not the authority or purpose under which premises were licensed – Commercial use cannot legalise deviation from residential licence – Reliance held erroneous [Paras 15, 20].

Possession – Undated Possession Letter – Evidentiary Value – Undated possession letter without witnesses relied upon by Respondent – Competent Authority rightly disbelieved the document – Revisional Authority’s contrary inference held unsustainable, particularly when Respondent admittedly remained in possession and avoided witness box [Paras 16, 29].

Arbitration Award – Subsequent Setting Aside – Effect – Revisional Authority relied on alleged arbitral award to hold existence of lien/charge – Award already set aside by High Court and confirmed in appeal – Reasoning based on non-existent award rendered invalid [Para 19].

Conduct of Party-in-Person – Abuse of Process – Respondent repeatedly sought adjournments before multiple Benches, consumed extensive judicial time and filed voluminous written submissions containing unverifiable and non-existent case law – Court deprecated unverified use of AI-generated material – Held: Such conduct obstructs justice delivery and warrants costs [Paras 21–22, 26].

Perjury and Contempt – Interim Application – Rejection – Allegations of perjury, suppression and forged documents not substantiated – Reliefs sought beyond scope of writ petition and Section 24 proceedings – Interim Application dismissed as vexatious and coercive [Paras 23–26, 33].

Supervisory Jurisdiction – Article 227 – Interference Justified – Though scope under Article 227 is limited, interference warranted where revisional order is perverse, ignores material clauses, relies on extraneous considerations and suffers from patent error on face of record [Paras 30–32].

Decision: Writ Petition allowed – Impugned revisional order dated 02.09.2009 set aside – Eviction order dated 15.04.2009 passed by Competent Authority restored and confirmed – Interim Application No. 6969 of 2025 dismissed – Respondent directed to hand over possession forthwith – Costs of Rs.50,000/- imposed, payable to High Court Employees Medical Fund.

Civil Law – Declaration of Title – Burden of Proof – Plaintiffs must succeed on strength of own title – Revenue Records Not Proof of Title – Appeal Dismissed – Plaintiffs sought declaration of title over agricultural lands claiming ancestral ownership based on surname “Matam”, cist receipts and pattadar passbooks – Failed to produce any documentary evidence proving title of ancestors – Trial Court rightly dismissed the suit – Held: In a suit for declaration, burden lies squarely on plaintiffs and weakness of defendant’s case is irrelevant [Paras 21–27, 54].

Declaratory Relief – Ancestral Property – Proof of Lineage and Title – Mere resemblance of surname with religious institution insufficient – Plaintiffs failed to establish pedigree linking their ancestors to ownership of suit lands – Claim that “Matam” property is ancestral property rejected [Paras 26, 31, 54(vi)].

Revenue Records – Pattadar Passbooks – Mutation Entries – Legal Effect – Cist receipts and pattadar passbooks are not documents of title – They only raise a presumption regarding possession for fiscal purposes – Cannot be basis for declaration of ownership [Paras 27, 49–53, 54(iii)].

Evidence Act – Section 110 – Presumption of Ownership from Possession – Scope and Limitations – Presumption is rebuttable and applies only when possession is lawful and no title is shown in any party – Where property stands recorded in name of Endowment/Mutt, presumption that possession follows title cannot be invoked to grant declaration [Paras 38–47, 54(iv)–(v)].

Endowment Property – Competing Claim – Mutt as Recorded Owner – Revenue records and settlement registers showed property standing in name of Sri Pothuluri Veera Brahmendra Swamy Mutt – Plaintiffs failed to rebut documentary evidence produced by defendants – Title held to vest in Endowment Institution [Paras 28, 31–33].

Pleadings – Admission by “Pleading Ignorance” – Interpretation – Pleadings must be read as a whole – Defendant’s plea of “not aware” regarding certain revenue actions does not amount to admission of plaintiffs’ title or possession – No deemed admission inferred [Paras 34–36].

Appellate Review – First Appeal – No Error of Fact or Law – Trial Court’s findings based on proper appreciation of oral and documentary evidence – No perversity or illegality shown – No interference warranted in appellate jurisdiction [Paras 54(viii), 55].

Decision: First Appeal dismissed – Judgment and decree of Trial Court affirmed – No order as to costs – Pending miscellaneous petitions closed.

Arbitration – Interim Measures – Section 9 – Attachment Before Judgment – Prima Facie Case Not Made Out – Appellant sought interim protection by attaching 1600 MT of rice and security deposit of USD 296,326.74 for demurrage claims under a charterparty agreement – Learned Single Judge vacated the ex parte order for attachment and directed return of security deposit – On appeal, Division Bench found appellant had not established a strong prima facie case as demurrage was in nature of unadjudicated liquidated damages and no enforceable debt had crystallised – Mere right to sue cannot justify interim relief [Paras 44–51]

Balance of Convenience – Delay in Seeking Relief – Appeal Dismissed – Appellant delayed for 3 years before invoking arbitration and seeking attachment – Delay unexplained – Respondents deposited security promptly and were in ordinary business course – Balance of convenience found against appellant [Paras 52–56]

Asset Dissipation – Allegations Vague – No Evidence of Intent to Defeat Arbitral Award – Court held appellant failed to show specific acts of asset dissipation or imminent risk warranting attachment – Appellant's pleadings lacked material particulars – Interim relief rightly refused by Single Judge [Paras 30, 49, 57–58]

Arbitration Act – Section 37 – Limited Appellate Jurisdiction – Perversity or Arbitrariness Absent – Division Bench held that appellate interference under Section 37 warranted only if Single Judge’s order suffered from perversity, arbitrariness or violation of legal principles – None found – Appeal dismissed [Paras 31, 61–63]

Claim Nature – Demurrage – Not Adjudicated – Right to Damages Not Actionable – Court reaffirmed that until arbitral tribunal adjudicates liability, demurrage claim remains a mere right to sue for damages – Not an actionable debt to warrant pre-award security [Paras 47–50, 59]

Decision: Appeal dismissed – Orders of learned Single Judge upheld – No costs – Pending applications closed.