Patent Law – Standard Essential Patent (SEP) – Infringement of Claim 12 – DVDs as Record Carriers – Liability Affirmed – Respondent filed suits for infringement of Indian Patent IN 218255 claiming EFM+ encoding technology used in DVD manufacturing – Appellants contended they only replicated data using stampers supplied by Moser Baer and did not engage in encoding – Trial court found that Claim 12 covered any record carrier containing modulated signal created using EFM+ coding, regardless of who performed the encoding – DVDs containing such modulated signal infringed the patent, and appellants were liable, irrespective of whether encoding was outsourced – Held: Prima facie, findings on infringement are not egregiously perverse or patently illegal to warrant stay of decree [Paras 16.2.2(i)–(xii), 16.3.3]

Patent Law – Indirect Infringement – Outsourcing of Encoding Process – Appellants Liable – Appellants sourced stampers embedded with modulated signal from third-party Moser Baer – Court held appellants liable under indirect infringement principles and vicarious liability – Claim 12 interpreted to include record carriers made through such outsourced processes – DVDs sold by appellants held to embody infringing content [Paras 204–204.3, 205]

Civil Procedure – Stay of Money Decree – Order XLI Rule 5 CPC – Presumptive Damages Estimation Flawed – Partial Stay Granted – Trial court awarded damages based on presumed replication of 10,000 DVDs per stamper, absent evidentiary basis – No factual foundation for estimate of 65 lakh DVDs for one appellant – Held: Award of damages based on presumptions without supporting material renders decree vulnerable under Lifestyle Equities principle – While findings on infringement, patent validity, and FRAND royalty rate were sustained, execution stayed upon furnishing bank guarantee [Paras 19.3.2.6–19.3.2.14, 19.3.5, 20.4–20.8]

Patent Law – Validity of Patent – Section 64 Patents Act – No Prima Facie Case Made for Revocation – Appellants raised challenges under Sections 64(1)(m), 64(1)(e), and 64(1)(j) of the Patents Act on grounds of suppression, prior art (Sony Patent), and improper divisional application – Trial court held no material suppression or anticipation proved – No prima facie case warranting stay of decree established on this ground [Paras 17.3.4, 17.4.3, 17.5.5, 17.6]

Damages – Computation – FRAND Royalty Accepted – DVD Count Based on Unsupported Assumptions – Royalty rate of US$ 0.03 per DVD not disputed – Number of DVDs presumed based on number of stampers and arbitrary 10,000 DVDs per stamper rule – Court held damages estimate to be conjectural and lacking evidentiary basis – Ordered appellants to furnish bank guarantees instead of deposit [Paras 19.2.2, 19.3.2.6–19.3.2.14, 20.6–20.8]

Decision: Execution of money decree stayed subject to appellants furnishing unconditional, irrevocable bank guarantees covering the principal damages amount within eight weeks – Appeals to proceed on merits – Applications for stay disposed accordingly.

Commercial Law – Rejection of Plaint – Compliance with Section 12-A of Commercial Courts Act – Suit filed on 31st July 2021, registered on 18th December 2021 – High Court had declared Section 12-A mandatory on 1st October 2021 in Deepak Raheja – Held: Since suit was filed prior to that date, plaint cannot be rejected for non-compliance with Section 12-A – Filing of suit is relevant date for determining compliance, not registration [Paras 8, 22(a)-(b), 31].

Civil Procedure – Order VII Rule 11 CPC – No Cause of Action – Plaint alleges plaintiffs were beneficiaries under Master Restructuring Agreement (MRA) and Trust and Retention Account (TRA) agreements – Defendant no. 1 (SBI) was account bank and allegedly withheld funds due to plaintiffs – Suit also based on representations made in Joint Lenders Forum meetings – Held: Cause of action adequately pleaded; whether it is illusory or defective is a matter for trial – Rejection under Order VII Rule 11(a) not warranted [Paras 23–29].

Limitation – Recovery Suit – Article 113 of Limitation Act – Plaintiffs claim right to sue accrued only upon discovery of facts on 21st May 2019 via NCLT proceedings – Suit filed on 31st July 2021 – Held: Cause of action within limitation as pleaded; limitation involves mixed question of fact and law to be determined at trial stage [Paras 30, 22(k), 29].

Mediation – Validity of Private Mediation – Section 12-A of Commercial Courts Act read with 2018 Rules – Pre-litigation mediation attempted privately and failed – Held: Although private mediation does not fulfil mandatory requirement under Section 12-A, since suit was filed before Section 12-A was declared mandatory, rejection not warranted on this ground [Paras 5(a)-(b), 22(c), 31].

Practice and Procedure – Abuse of Order VII Rule 11 CPC – Court discourages frivolous applications for rejection of plaint that delay commercial suits – Reiterates power to reject plaint must be used sparingly and only when clear grounds under Order VII Rule 11 CPC are satisfied [Para 32].

Decision: Application rejected – None of the grounds under Order VII Rule 11 CPC satisfied – Suit to proceed to trial [Para 33].

Service Law – Seniority – Direct Recruitment – BSF – Petitioners were declared unfit in initial medical examination and appointed after being found fit in Review Medical Examination – Claimed seniority with batchmates who joined earlier pursuant to the same selection – Held: Rule 8(2) of the 2002 Rules governs seniority and mandates it to be based on date of continuous regular appointment – Rule 8(3) regarding merit applies only when date of appointment is same – Delay, even if not attributable to petitioners, does not override the statutory mandate – Petitioners cannot claim seniority along with earlier appointees [Paras 10-14, 26-27].

Statutory Interpretation – Rule 8 of BSF Recruitment Rules, 2002 – Rule 8(2) held to apply to all appointments including direct recruitment – Interpretation in Ram Pal Deswal limiting Rule 8(2) to promotions found erroneous – Proviso cannot restrict scope of main provision – Rule 8(3) is subordinate to Rule 8(2) – Seniority must follow date of regular appointment, not merit alone [Paras 18.7-18.13, 21.1-21.6].

Conflicting Precedents – Full Bench resolves conflict – Division Bench ruling in Ram Pal Deswal overruled – Shoorvir Singh Negi approved as correct exposition of law – Other decisions like Naveen Kumar Jha, Avinash Singh, Naresh Kumar and M.V. Sheshagiri held distinguishable or not binding due to absence of Rule-based analysis – Dinesh Kumar also distinguished as dealing with different issue [Paras 7, 20-25].

Decision: Petitions dismissed – Petitioners not entitled to seniority from date of selection process – Seniority to be reckoned from date of actual appointment – No costs [Paras 26-29].

Service Law – Promotion – Non-Communication of APAR – Belated Communication in One Lot – Respondent communicated APARs for years 2008–09 to 2011–12 together in April 2013 just prior to DPC – Benchmark of 21/25 under Rules, 2012 not met – Held: Inordinate delay in communication frustrates object of APAR system – Violative of principles of natural justice and Article 14 – Action arbitrary and unsustainable [Paras 12, 17-18].

APAR – Purpose of Communication – Improvement and Representation – Supreme Court in Dev Dutt and Sukhdev Singh held every entry, whether adverse or not, must be communicated within reasonable time – Communication enables employee to improve performance and make effective representation – Belated communication defeats both objects – Sending APARs in one lot amounts to denial of reasonable opportunity [Paras 10.1-10.3, 11-14].

Benchmark for Promotion – Introduction under Rules, 2012 – 21 out of 25 for E-3 to E-4 based on last 5 years’ APARs – Though employer entitled to change rules and prescribe benchmark – However, employee cannot be prejudiced by employer’s failure to timely communicate APARs – Held: Benchmark cannot be applied to petitioner in circumstances of unfair conduct [Paras 8-8.1, 15, 18.4].

Natural Justice – Fairness in Administrative Action – Rules of natural justice flexible – Test is whether authority acted fairly – Inordinate delay without justification in communicating APARs amounts to unfair action – Right to be considered for promotion infringed due to arbitrary conduct of employer [Paras 11, 15-16].

Prejudice – Denial of Opportunity to Improve – Petitioner’s subsequent APARs (2012–13 onwards) graded ‘Very Good’/‘Outstanding’ after regular communication – Demonstrates importance of timely communication – Court held that earlier timely communication could have enabled petitioner to achieve benchmark – Employer’s lapse cannot operate to petitioner’s detriment [Paras 14, 18.2-18.3].

Right to Promotion – Distinction – No fundamental right to promotion but right to be considered is fundamental – When consideration denied due to arbitrary and unfair action of employer, Court can intervene under Article 226 – Held: Petitioner’s right to be fairly considered stood violated [Paras 15, 18.3].

Relief – Direction to DPC – Respondent directed to convene DPC within one month – Consider petitioner for promotion from E-3 to E-4 without applying benchmark under Rules, 2012 – If found eligible, grant promotion from date junior promoted with notional benefits and continuity but without monetary benefits [Paras 19-20].

Decision: Writ Petition allowed – Belated communication of APARs held arbitrary and violative of Articles 14 and principles of natural justice – Respondent directed to reconsider petitioner’s case for promotion without applying benchmark of 21/25 under Rules, 2012 – Notional benefits granted if found eligible.

Limitation – Condonation of Delay – Second Appeal – Delay of 1221 Days – Appellant sought condonation on the ground that he was residing in Dubai and was unaware of the judgment of the First Appellate Court – Affidavit silent as to the date of return to India – Appellant had earlier prosecuted first appeal from Dubai by engaging counsel – Held: Mere residence abroad without specific explanation does not constitute sufficient cause [Paras 5-7].

Limitation Act, 1963 – Section 5 – “Sufficient Cause” – Scope – Appellant pleaded ill-health as a reason for delay – No medical records or particulars of illness produced – No plea of hospitalization – Held: Bald and unsupported plea of ill-health cannot justify inordinate delay [Paras 6-7].

Delay After Obtaining Certified Copy – Conduct of Litigant – Even after receipt of certified copy of appellate judgment, appellant delayed filing second appeal by nearly one year – Lack of diligence and bona fides clearly established – Held: Negligence and inaction disentitle discretionary relief under Section 5 [Paras 6-7, 11].

Discretion of Court – Condonation of Delay – Principles – Law of limitation based on public policy – Courts cannot extend limitation on equitable grounds – Liberal approach cannot defeat statutory mandate – Held: Inordinate delay without satisfactory explanation cannot be condoned [Paras 8-11].

Decision:

Interlocutory Application No. 01 of 2018 dismissed – Delay of 1221 days not condoned – Second Appeal rejected – Interim orders, if any, stood vacated.

Criminal Law – NDPS Act – Personal Search – Non-Compliance with Section 50 – Conviction Set Aside – Accused allegedly found in possession of 450 grams of charas during personal search on a bus – IO failed to inform accused of right to be searched before Magistrate or Gazetted Officer – Held: Violation of Section 50 vitiates conviction – Recovery rendered suspect and inadmissible – Conviction set aside [Paras 16–25].

Investigation – Anticipatory Mention of FIR Details – Recovery Memo Prepared Before FIR – FIR number and NDPS section mentioned in recovery and search memos even before registration of FIR – Casts serious doubt on authenticity and timing of documents – Documents appear to be prepared post-facto – Judicial scrutiny finds prosecution version doubtful [Paras 17–22].

NDPS Act – Evidentiary Standards – Higher Degree of Proof – Supreme Court decisions in Noor Aga and Ranjan Kumar Chadha reiterated – Strict procedural compliance required due to stringent nature of punishment – Courts must ensure individual liberty and fair trial rights not compromised [Paras 18, 23].

Trial – Fairness and Procedural Safeguards – Section 50 Compliance Mandatory – Constitutional mandate of fair trial requires strict adherence to statutory safeguards – Casual or defective investigation cannot form basis of conviction under NDPS Act – Recovery held unreliable [Paras 23–24].

Decision: Appeal allowed – Judgment of conviction and sentence passed by Trial Court set aside – Accused acquitted of offence under Section 20(b)(ii)(B) of NDPS Act – Bail bonds discharged – Direction to furnish bond under Section 437-A CrPC for appearance before Supreme Court if required.

Banking Law – Freezing of Account – Dispute over Company Signatories – Axis Bank froze bank and demat accounts of appellant company citing conflicting communications and management dispute – Freeze based partly on letter from shareholder company (VTL) – Held: Axis Bank had no locus to rely on third-party communication – Bank duty-bound to act on customer’s own valid corporate resolutions – Freeze unjustified especially after ROC and MCA unmarked 'management dispute' status [Paras 31–38]

Company Law – Removal of Directors – Locus Standi – Respondents 5 to 7, erstwhile directors, not reappointed/removed validly by EGMs/AGMs – NCLT rejected their oppression and mismanagement claims under Sections 241 & 242 – Held: Absent any stay by NCLAT, respondents ceased to have locus in company affairs or writ proceedings – Cannot seek recall or impleadment post-disposal of writ petition [Paras 39–44]

Civil Procedure – Maintainability of Recall Application – Recall application and clarificatory application filed post-disposal of writ petition – Held: Such applications not maintainable when no review grounds pleaded under Order XLVII CPC – Addition of parties to disposed-of writ illegal – Order staying prior writ relief and impleading parties without deciding recall application unsustainable [Paras 45–48]

Banking Law – Bank’s Neutrality – Ombudsman and ROC Proceedings – Bank’s intervention in management dispute before NCLT and application for clarification of court’s order without locus – Letter of freeze addressed not to customer company but to M.P. Birla Group – Held: Bank failed in its duties, acted beyond its role, and supported third parties against customer’s instructions [Paras 33, 35–37, 42]

Judicial Discipline – Single Judge Order – Absence of Reasons – Impugned order stayed prior writ relief and kept contempt in abeyance without recording reasons or prima facie findings – Held: Such interim suspension without findings or re-opening writ not sustainable in law [Para 46]

Decision: Appeals allowed – Order dated 19/06/2025 in connection with CAN 1 and CAN 2 of 2025 arising out of WPA No. 6088 of 2025 and CPAN No. 933 of 2025 set aside – Learned Single Judge to first decide recall and clarification applications before hearing contempt – Stay applications also disposed – Observations tentative and not binding on pending writ applications [Paras 49–52]

Preventive Detention – Validity of Detention Order – Officer's Authority – Detention order issued under Section 3(1) of PIT NDPS Act by Additional Chief Secretary (Home) – Held: Though officer was competent by rank, order was not issued in the name of the State Government nor was it stated to be on behalf of the Government – Procedural irregularity noted but does not render detention illegal where material justifies satisfaction under the Act [Paras 25-29, 34-36].

Preventive Detention – Specification of Place of Detention – Section 5 PIT NDPS Act – No general or special order issued by the State Government specifying designated detention centres – Held: Detention in Lala Lajpat Rai District Jail not rendered illegal due to absence of such notification, but amounts to irregularity that must be rectified by the State – Directions issued accordingly [Paras 28-29, 34-36].

Illegal Detention – Detention Beyond Initial Period – Determination of Detention Period – Detention began on 09.06.2025; extension order passed on 11.08.2025 – Petitioner claimed illegal custody from 06.08.2025 to 11.08.2025 – Held: Detention period counted from actual date of detention (09.06.2025), not from date of order (05.05.2025) – No illegal detention made out, hence compensation denied [Paras 30, 36].

Language of Detention Order – Right to Effective Representation – Article 22(5) – Detention order served in English – Petitioner claimed lack of understanding – Held: While petitioner understood contents sufficiently to file writ, authorities directed to ensure future detention orders and grounds are communicated in Hindi (official language of State) and vernacular language of detenu to comply with Article 22(5) [Paras 20, 36].

Execution of Detention Order – Mode of Arrest – Detention executed while petitioner was being released on bail – Held: Execution valid under Section 4 of PIT NDPS Act read with principles governing post-conviction arrest under Cr.P.C. / BNSS – No procedural illegality [Paras 31-32].

Detention Justified – Material on Record – Multiple NDPS cases registered against petitioner with significant recoveries of contraband and assets disproportionate to known sources – Held: Satisfaction of detaining authority based on sufficient material; detention justified in facts [Paras 4-9, 35].

Directions to State Government – Compliance with Statutory Requirements –

(i) State to issue general/special order specifying detention centres under Section 5 of PIT NDPS Act.

(ii) Order to be issued by 15/01/2026.

(iii) Grounds of detention to be communicated in Hindi and, where required, in vernacular language.

(iv) Right to representation to be clearly conveyed in language known to detenu. [Para 36]

Decision: Detention upheld – Petition dismissed – No compensation awarded – Procedural irregularity in specifying place of detention noted – Directions issued to State for compliance with Section 5 of PIT NDPS Act and constitutional safeguards.

Criminal Law – Discharge – Scope at Preliminary Stage – Accused seeking discharge contending that he was neither Director nor shareholder of accused company – Magistrate relied on Registrar of Companies records showing petitioner as Director – At discharge stage, court required to see prima facie material and not conduct a roving enquiry – Held: Existence of documentary material showing petitioner as Director sufficient to proceed with trial [Paras 5–6].

Company Offences – Director’s Liability – Economic Offences – Collection of deposits without licence – CBCID final report alleging offences under IPC, RBI Act and Kerala Chitties Act – Directors responsible for management as per Articles of Association – Held: When records show accused as Director during relevant period, criminal liability cannot be ruled out at threshold [Paras 2, 5].

Effect of Writ Proceedings – Direction to Registrar of Companies – Enquiry into Directorship – Mere direction by High Court to conduct enquiry and rectify records, if mistake found – No material produced to show that enquiry concluded in favour of accused – Held: Pendency or existence of such direction does not automatically entitle accused to discharge [Para 6].

Criminal Revision – Interference with Order Refusing Discharge – Revisional court will not interfere unless order suffers from illegality or perversity – Magistrate’s order based on records and relevant considerations – Held: No ground made out for interference under revisional jurisdiction [Paras 5–6].

Liberty Reserved – Quashing Proceedings – Accused permitted to approach High Court for quashing if subsequent enquiry by Registrar of Companies establishes that his name was wrongly shown as Director during period of offence [Final Para].

Decision: Criminal Revision Petition dismissed – Order refusing discharge upheld – Liberty reserved to seek quashment on proof of favourable outcome of Registrar of Companies enquiry.