Criminal Law - Quashing - Negotiable Instruments Act – Section 138 – Dishonour of Cheque – Not Negotiable Endorsement – Applicability – Petitioner sought quashing of complaint under Section 138 NI Act on ground that cheque bore "Not Negotiable" marking – Held: Endorsement “Not Negotiable” merely restricts transferee from acquiring better title under Section 130 NI Act – It does not nullify drawer’s liability or exclude application of Section 138 – Drawer remains liable if cheque issued in discharge of debt and dishonoured due to insufficient funds – Complaint maintainable – No ground to quash proceedings at preliminary stage [Paras 6–7]

Criminal Procedure – Section 482 CrPC – Inherent Powers – Scope – Petitioner challenged concurrent orders of trial and revisional court rejecting application to drop proceedings under NI Act – Held: Courts below rightly held that legality of cheque and existence of enforceable debt are triable issues requiring evidence – No jurisdictional error or abuse of process shown – Petition under Section 482 CrPC dismissed [Paras 6–7]

Interpretation of NI Act – “Not Negotiable” Endorsement – Legal Effect – Cited case Durga Shah Mohal Lal Bankers v. Governor General in Council, AIR 1952 All 590 explained – Endorsement does not destroy negotiability or legality of cheque – Trial to proceed to determine liability [Para 6]

Decision: Petition dismissed – Courts below rightly held that issue of whether cheque was issued in discharge of legally enforceable debt and applicability of Section 138 are matters of trial – “Not Negotiable” endorsement does not render Section 138 inapplicable – No interference warranted under Section 482 CrPC.

Writ Jurisdiction – Article 226/227 – Disputed Questions of Fact – Insurance Coverage Dispute – Where adjudication requires examination of terms of master insurance policy and factual issues of deficiency in service – High Court ought not to exercise writ jurisdiction – Remedy lies before Consumer Forum [Paras 5, 7].

Home Loan – Loan Linked Insurance – Expiry of Policy – Borrower’s Death After Expiry – Insurance cover limited to 15 years – Death occurred after expiry of policy period – Prima facie insurer not liable, subject to adjudication by competent consumer forum [Paras 2, 4–5].

SARFAESI Act – Sections 13(2) and 13(4) – Enforcement Proceedings – Interim Protection – Possession notice challenged on ground of pending insurance claim – Court granted interim protection but declined to adjudicate insurance liability in writ proceedings [Paras 2, 3, 6–8].

Consumer Law – Deficiency in Service – Appropriate Forum – Claim alleging wrongful denial of insurance benefit to be adjudicated by District/State Consumer Forum – Writ Court declined to record findings on merits [Paras 7–8].

Equitable Relief – Liberty with Protection – Interim Order Continued – Petitioner permitted to approach Consumer Forum within 60 days – Interim protection against dispossession to continue till disposal of consumer complaint – Failure to approach forum within stipulated period would entitle Bank to proceed under SARFAESI Act [Paras 8–8.2].

Decision: Writ Petition Disposed of – High Court declined to adjudicate disputed insurance claim under writ jurisdiction – Liberty granted to petitioner to approach jurisdictional District/State Consumer Forum within 60 days – Interim order staying dispossession to continue subject to filing of consumer complaint – No findings rendered on merits of insurance claim.

Prevention of Money Laundering Act, 2002 – Discharge and Framing of Charge – Scope of Judicial Review – Petitioner, Director of contractor company, challenged rejection of discharge and framing of charge under Section 3 PMLA – Allegations of submission of 26 fake and forged bitumen invoices leading to generation of proceeds of crime worth Rs. 1,08,95,583/- – Investigation revealing receipt, layering and investment of proceeds of crime through subsidiary and associate companies controlled by petitioner – Held: At stage of discharge and framing of charge, court required only to see existence of prima facie material and not conduct a mini trial – Strong suspicion founded on material sufficient to frame charge – No perversity or illegality in impugned orders [Paras 20–21, 56–60, 100].

Money Laundering – “Proceeds of Crime” – Interpretation of Section 2(1)(u) PMLA – Explanation inserted by Act 23 of 2019 – Scope widened to include property directly or indirectly derived or obtained from criminal activity relatable to scheduled offence – Held: Proceeds generated through fake invoices and subsequently invested in subsidiaries constitute proceeds of crime – Identification of exact amount sufficient at prima facie stage [Paras 25–29, 98–100, 114].

Offence under Section 3 PMLA – Continuing Nature – Involvement Not Limited to Predicate Offence – Petitioner not only linked with scheduled offence but also actively involved in acquisition, possession, use and projection of proceeds of crime as untainted – Held: Person need not be named as accused in predicate offence to be prosecuted under PMLA – Knowingly assisting or being party to laundering activity sufficient [Paras 102–108, 112–113].

Criminal Conspiracy – Role of Director – Vicarious Liability under Section 70 PMLA – Evidence showing petitioner as key decision-maker and controller of day-to-day affairs of parent and subsidiary companies – Statements under Section 50 PMLA and documentary evidence relied upon – Held: Prima facie case of consent, connivance and active role established against petitioner as Director [Paras 93–97].

Discharge – Legal Principles – Court Not to Act as Post Office – Defence Not to be Considered – Revisional Court’s Limited Jurisdiction – Held: Revisional jurisdiction cannot be equated with appellate power – Interference justified only in rare cases of patent illegality or jurisdictional error – No ground made out to interfere with rejection of discharge or framing of charge [Paras 117–123].

Economic Offences – Need for Full Trial – Serious Allegations of Money Laundering – Reliance on Supreme Court Precedents – Held: Economic offences having deep-rooted conspiracies and financial ramifications require thorough trial – Discharge at nascent stage impermissible [Paras 115–116].

Decision: Criminal Revision No. 648 of 2025 and Criminal Revision No. 529 of 2025 dismissed – Orders rejecting discharge and framing charge under Sections 3 and 4 PMLA affirmed – Pending interlocutory applications disposed of.

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 - Execution Proceedings – Alleged Impersonation of Surety – Offence Relating to Court Proceedings – In execution of money decree, part decretal amount disbursed on furnishing of solvent surety – Allegation that surety was furnished through impersonation and real person never stood as surety – Application filed under Section 379 BNSS seeking prosecution for offences affecting administration of justice [Paras 1–3, 7].

Sections 215 and 379 BNSS – Bar on Police Taking Cognizance – Mandatory Role of Court – Offences alleged to have been committed in relation to proceedings of Court fall within Section 215 BNSS – Police cannot suo motu register FIR for such offences – Court must first form an opinion that it is expedient in the interest of justice to inquire into the offence and then follow procedure under Section 379 BNSS [Paras 6–8].

Duty of Court – Preliminary Enquiry and Application of Judicial Mind – Executing Court directed police to investigate and register FIR if offence found, without conducting preliminary enquiry or recording prima facie satisfaction – Held: Court may seek assistance of police for enquiry, but discretion to register FIR cannot be delegated to police authorities – Registration of FIR must follow judicial determination by Court [Paras 8–9].

Modification of Order – Police Investigation Subject to Court’s Direction – Impugned order modified – Police permitted to investigate and submit report – FIR to be registered only upon express orders of Executing Court and not suo motu by police – Compliance with Sections 215 and 379 BNSS ensured [Paras 9–10].

Decision: Impugned order dated 18.11.2025 modified – Police investigation permitted subject to report before Executing Court – FIR to be registered only on direction of Court – Petition disposed of.

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.

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.