Criminal Law – Quashing - Prevention of Money Laundering Act, 2002 – Predicate/Scheduled Offence – Closure Report Accepted – Effect – Continuation of PMLA Proceedings – ECIR registered by ED, Kolkata was admittedly founded on two Kolkata FIRs treated as scheduled offences – Both FIRs culminated in final/closure reports on the ground of mistake of fact and such closure reports were accepted by the jurisdictional Magistrate – Held: Once the scheduled offence stands negated by acceptance of closure report, the very foundation of “proceeds of crime” under Section 2(1)(u) PMLA disappears and PMLA proceedings cannot survive so long as such acceptance is not set aside [Paras 19–21, 30–32, 36–41].

Money Laundering – Proceeds of Crime – Meaning and Scope – Section 2(1)(u) PMLA – Proceeds of crime must be property derived or obtained “as a result of” criminal activity relating to a scheduled offence – Explanation added in 2019 is clarificatory and does not enlarge the scope of the main provision – In absence of a subsisting scheduled offence, attached/freezed properties cannot continue to be treated as proceeds of crime [Paras 21–22, 43–45].

PMLA Proceedings – Dependency on Predicate Offence – Reiterating Vijay Madanlal Choudhary v. Union of India, held that PMLA is not a stand-alone regime divorced from the scheduled offence – Acceptance of closure report stands on the same footing as quashing, discharge or acquittal for the purpose of survival of PMLA proceedings – Liberty to revive proceedings can be granted only if the predicate offence is revived in accordance with law [Paras 30–31, 55].

ECIR – Nature – Internal Document – Limits of ED’s Power – Though ECIR is an internal administrative document and multiple FIRs may be investigated under one ECIR, ED cannot continue or resurrect an ECIR when its sole predicate offences have ceased to exist – Inclusion of a different predicate offence at a later stage, when original scheduled offences stand closed, is impermissible [Paras 32–33, 54].

Multiple PMLA Proceedings – Same Predicate Offence – Bar – Kochi CBI charge-sheet (DV-1/2014) was already the subject-matter of an independent ECIR and prosecution complaint pending before the Special PMLA Court at Kochi – Attempt to rely upon the same CBI charge-sheet to sustain a separate PMLA prosecution in Kolkata amounts to impermissible second cognizance on the same predicate offence – Such dual proceedings are barred in law [Paras 41–47].

Section 66(2) PMLA – Scope – Section 66(2) contemplates sharing of information for registration of a new scheduled offence or further investigation – Mere sharing of information does not crystallize a scheduled offence nor revive a non-existent predicate offence – Unless property qualifies as “proceeds of crime”, Section 66(2) cannot sustain PMLA action [Paras 49–53].

Reason to Believe – Provisional Attachment – Formation of “reason to believe” under Section 5 PMLA must be founded on tangible material and a live nexus with a subsisting scheduled offence – After acceptance of closure report, belief regarding existence of proceeds of crime becomes untenable and cannot be sustained on suspicion or conjecture [Paras 37–39].

Decision – Quashment – ECIR No. KLZO-I/22/2021 and ML Case No. 15 of 2023 quashed – Liberty reserved to ED to seek revival if closure reports in predicate FIRs are set aside or fresh legitimate grounds arise in accordance with law [Para 55].

Criminal Law - NIA Act – Section 21 – Appeal against order framing charge – Maintainability – Held: order framing charge is interlocutory for purposes of appeal under NIA Act – appeals dismissed as not maintainable – remedy lies under Section 482 CrPC / Section 528 BNSS [Paras 1–20].

Criminal Procedure – National Investigation Agency Act – Section 21 – Appeal – Scope – Expression “judgment, sentence or order, not being an interlocutory order” – Interpreted in light of scheme and object of NIA Act – Held: “order” refers to final orders capable of appellate scrutiny on facts and law – Not intermediate orders such as framing of charge [Paras 15–18].

Charge – Framing of – Nature of order – Though treated as “intermediate order” for purposes of revision under Section 397 CrPC, such classification not applicable while interpreting appellate provision under Section 21 NIA Act – Order framing charge does not finally determine rights and proceedings continue till conviction or acquittal – Hence interlocutory for appeal under NIA Act [Paras 11–12, 16–18].

Statutory Interpretation – Purposeful interpretation – NIA Act enacted to ensure expeditious investigation and trial of scheduled offences affecting national security – Bar on revisions and limited appellate remedy intended to avoid delay – Permitting appeals against charge-framing orders would defeat legislative intent [Paras 13–16].

Appeal vs. Revision – Distinction – Jurisprudence on “intermediate orders” developed in context of revisional jurisdiction under CrPC (Amar Nath; Madhu Limaye) – Same concept cannot be bodily imported into appellate jurisdiction providing appeal “on facts and law” – At stage of charge, factual adjudication impermissible [Paras 8–12, 16].

Remedy of Accused – Availability – Though appeal under Section 21 NIA Act not maintainable, accused not remediless – Inherent jurisdiction of High Court under Section 482 CrPC / Section 528 BNSS remains available to challenge framing of charge on limited grounds of abuse of process, lack of jurisdiction or manifest injustice [Paras 16–18].

Precedent – V.C. Shukla v. State – Constitution Bench – Order framing charge held interlocutory under Special Courts Act – Principles applied while interpreting Section 21 NIA Act – Appeal against charge-framing order not envisaged [Paras 11–12].

Decision: Appeals dismissed on ground of maintainability – All pending applications disposed of [Paras 19–20].

Arbitration Law – Section 34 – Scope of Interference – Limited Judicial Review – Petition seeking setting aside of arbitral award directing borrower and guarantor to jointly and severally pay amounts exceeding Rs.43 crores with interest – Court reiterated that Section 34 does not permit reappreciation of evidence or appellate review – Award to be interfered with only if grounds under Section 34 are strictly made out [Paras 20, 39–40].

Arbitration Law – Proof of Debt – Alleged Dispensation with Burden of Proof – Challenge based on arbitral finding that borrower had “almost admitted” the claim – Court held that award must be read holistically – Statement of Defence of borrower admitted sanction of facilities, execution of guarantee and liability to repay – Use of expression “almost admitted” not perverse – Debt duly established on record – No patent illegality found [Paras 21–23].

Arbitration Law – Delay in Pronouncement of Award – Effect on Validity – Award challenged on ground of inordinate delay between conclusion of arguments and pronouncement – Court relying on Lancor Holdings Ltd. v. Prem Kumar Menon held that mere delay is not a standalone ground under Section 34 – Delay must be unexplained and must adversely reflect on findings – Petitioner himself contributed to delay by filing multiple applications – No prejudice demonstrated – Award not vitiated [Paras 24–33].

Arbitration Law – Guarantee – Novation / Variation of Contract – Plea that enhancement of credit limits discharged guarantor rejected – Arbitral Tribunal found that petitioner, as Director, himself signed applications for enhancement – Deed of Guarantee expressly covered enhanced limits and was unconditional, continuing and irrevocable – No novation or material alteration without consent established – Findings neither perverse nor contrary to law [Paras 34–38].

Arbitration Law – Reasoned Award – Adequacy of Reasons – Contention that arbitral tribunal adopted a casual and cavalier approach rejected – Court held that adequacy or elaborateness of reasons cannot be examined under Section 34 – As long as reasons are discernible and conclusions are intelligible, award cannot be set aside – Arbitral Tribunal is not required to write a judgment like a court [Paras 39–43].

Arbitration Law – Interim Applications – Non-decision – Natural Justice – Allegation that several interim applications were not decided rejected – Court found that applications related to belated and inconsistent plea of forgery after admission of guarantee – Applications either expressly dealt with in the award or implicitly rejected – Petitioner responsible for procedural delays – No violation of natural justice made out [Paras 44–53].

Arbitration Law – Conduct of Party – Abuse of Process – Court noted repeated attempts by petitioner to delay proceedings and evade liability after actively invoking arbitration – Filing of Section 34 petition held to be another attempt to avoid repayment of admitted dues [Paras 30, 52–54].

Decision: Arbitration Petition dismissed – Arbitral Award dated 4 April 2024 upheld – No further costs imposed considering award of arbitral costs and interest already granted – Petition dismissed accordingly [Paras 54–56].

Motor Vehicles Act – Fatal Accident – Multiple Claims from Same Accident – Common Judgment – Appeals arising out of a single accident dated 24.09.2021 involving collision between TATA Ace (mini truck) and Maruti Swift car – Deaths of Kuldeep Kaur, Surinder Singh and Chhinder Kaur – Separate claim petitions decided by MACT – All connected appeals disposed of by common judgment [Paras 1–7].

Assessment of Income – No Documentary Proof – Minimum Wages as Guiding Factor – Tribunal assessed income at Rs.15,000/- per month on assumption of daily wages – High Court held that in absence of documentary evidence, minimum wages notified under Minimum Wages Act constitute primary guiding factor – Minimum wages for unskilled workers in Punjab as on 01.09.2021 fixed at Rs.9,400/- per month – Income reassessed accordingly for all deceased persons [Paras 13–18, 28–30, 41–43].

Future Prospects – Self-Employed / Daily Wage Earners – Tribunal erred in denying future prospects – Following National Insurance Co. Ltd. v. Pranay Sethi – Addition of future prospects mandatory even for self-employed or fixed salary persons – 10% addition where age between 50–60 years and 25% where age between 40–50 years – Applied uniformly in all three cases [Paras 19–20, 32–33, 44–45].

Multiplier – Correct Application – Multiplier applied by Tribunal based on age of deceased upheld – No interference warranted on this aspect [Paras 21, 34, 46].

Conventional Heads – Consortium, Funeral Expenses, Loss of Estate – Standardisation – Compensation under conventional heads revised in line with Pranay Sethi, Magma General Insurance Co. Ltd. v. Nanu Ram and N. Jayasree v. Cholamandalam MS – Consortium enhanced to Rs.48,000/- per claimant – Funeral expenses and loss of estate fixed at Rs.18,000/- each [Paras 21–22, 34–35, 46–47].

Kuldeep Kaur (Age 60) – Reassessment of Compensation – Income reassessed at Rs.9,400/- per month – Future prospects @10% added – Deduction of 50% – Multiplier of 9 applied – Total compensation recalculated at Rs.6,42,360/- with interest @7.5% per annum – Tribunal award reduced [Paras 8–22].

Surinder Singh (Age 40) – Reassessment of Compensation – Income reassessed at Rs.9,400/- per month – Future prospects @25% added – Deduction of 1/4th – Multiplier of 15 applied – Consortium granted to four dependents – Total compensation recalculated at Rs.18,14,250/- with interest @7.5% per annum – Tribunal award reduced [Paras 23–35].

Chhinder Kaur (Age 60) – Reassessment of Compensation – Income reassessed at Rs.9,400/- per month – Future prospects @10% added – Deduction of 1/3rd – Multiplier of 9 applied – Consortium granted to three children – Total compensation recalculated at Rs.9,24,480/- with interest @7.5% per annum – Tribunal award reduced [Paras 36–47].

Decision: Appeals filed by Insurance Company (FAO Nos.2791, 2794 & 2797 of 2025) partly allowed – Appeals filed by claimants (FAO Nos.593, 733 & 644 of 2025) dismissed – Impugned awards dated 29.10.2024 modified to the extent of recalculation of compensation – Pending applications disposed of [Paras 48–49].

Professional Misconduct – Chartered Accountant – Disciplinary Proceedings – Reference to High Court – Reference made by Council of Institute of Chartered Accountants of India seeking action under Section 21(6) of the Chartered Accountants Act, 1949 – Allegations based on SEBI investigation relating to manipulation of public issue of Bharthari Financial Services Ltd. – Disciplinary Committee after detailed enquiry held respondent guilty of “other misconduct” – Council accepted findings and recommended removal of name – Held: Due process duly followed and findings well supported by evidence [Paras 1, 4, 11, 14–17].

Professional Misconduct – Other Misconduct – Ante-dated Stock-Invests – Irregular Allotment of Shares – Respondent, Chairman and Whole Time Director of BFSL, conspired with another Chartered Accountant in arranging finance and obtaining ante-dated stock-invests after closure of public issue – Despite withdrawal of applications, shares allotted and certificates issued without receipt of funds – Acts held detrimental to general investing public – Constitutes “other misconduct” under Section 22 read with Section 21 of the Act [Paras 5, 11, 18].

Professional Ethics – Role of Chartered Accountants – Integrity and Fiduciary Responsibility – Chartered Accountants expected to maintain highest standards of integrity as custodians of financial markets – Manipulation of public issues and connivance with promoters strikes at root of market probity – Conduct of respondent held unbecoming of a Chartered Accountant [Paras 18–19].

Disciplinary Jurisdiction – Effect of SEBI and SAT Findings – Findings of SEBI under Section 11B and affirmation by Securities Appellate Tribunal relied upon by Disciplinary Committee – Non-challenge to SAT order by respondent reinforces culpability – Parallel disciplinary proceedings under the Chartered Accountants Act sustainable [Paras 8, 11].

Disciplinary Proceedings – Non-Contest by Delinquent Member – Despite service of notice and opportunity, respondent failed to contest reference before High Court – Allegations remained unrebutted – Court entitled to proceed on basis of record and disciplinary findings [Paras 10, 14].

Penalty – Suspension from Membership – Costs – In exercise of powers under Section 21(6) of the Act, respondent directed to be suspended from membership of ICAI for one year – Restrained from rendering services as a Chartered Accountant during suspension – Costs of Rs.10,000/- imposed on respondent payable to petitioner [Paras 20–21].

Decision: Reference accepted – Respondent suspended from membership of the Institute of Chartered Accountants of India for a period of one year – Restrained from rendering services as a Chartered Accountant – Costs imposed – Reference disposed of accordingly.

Civil Law - Compromise Decree – Corporate authority – Alleged transfer of control under Share Purchase Agreement – Fraud on Court pleaded after decade-long delay – Prior execution findings negating fraud and collusion – Compromise lawful and binding – Recall rightly refused – Appeal dismissed [Paras 16–50].

Company Law – Corporate Control – Share Purchase Agreement – Mere execution of SPA does not effect transfer of management or control – Statutory compliances under Companies Act and actual assumption of management essential – Absence of Form 32 filings, failure to convene meetings or take charge negates plea of transfer of control – “Alter ego” doctrine applied – Persons in de facto and de jure control bind the company [Paras 17–26].

Civil Procedure – Compromise Decree – Order XXIII Rule 3 CPC – Authority to compromise – Where statutory records and conduct show continuance of existing management, compromise entered by such management valid and binding – Subsequent claim of lack of authority by alleged transferee not accepted in absence of statutory recognition [Paras 25–29].

Fraud on Court – High threshold – Allegations of fraud must be clear, specific and supported by cogent evidence – Subsequent police report or speculative assertions regarding consideration insufficient to vitiate judicially recorded compromise – Earlier execution court findings rejecting plea of fraud and collusion carry significant weight [Paras 30–35, 43–44].

Execution Proceedings – Obstructionist claims – Failure to prove possession, mortgage or charge – Absence of books of account, balance sheets or statutory compliance under Companies Act and Transfer of Property Act – Obstructionist deriving claim from judgment debtor must “go with” judgment debtor – Compromise decree not undermined on such basis [Paras 35–42].

Delay and Acquiescence – Recall of compromise decree – Knowledge of decree and participation in execution proceedings through related entity – Recall application filed more than a decade later – Long acquiescence and repeated failed challenges undermine bona fides – Recall barred by limitation and conduct [Paras 45–49].

Appellate Interference – Scope – Where Single Judge has considered statutory records, prior adjudications and applied settled principles on fraud and corporate authority, no perversity or illegality warranting interference found [Paras 44–50].

Decision: Appeal dismissed – Order dated 17.03.2025 upheld – Compromise decree dated 28.03.2003 held lawful and binding – All pending applications dismissed [Paras 49–50].

Writ of Mandamus – Matching Grant to Bar Association – Policy Decision of State – Petitioner-Bar Association at Sub-Division level sought release of ₹50 lakhs for lawyers’ chambers and ₹20 lakhs for library under 2009 policy – State admitted entitlement but withheld grant citing non-submission of vetted estimate – Held: Objection technical in nature – State cannot deny benefit of policy when entitlement undisputed – Direction issued to verify estimates through PWD and release grant – Petition allowed [Paras 15-18].

Government Policy – Financial Assistance to Bar Associations – Notifications dated 11.11.2002 and 06.08.2009 provided for matching grant for construction of lawyers’ chambers and library – Grant for Sub-Division level Bar clarified as ₹50 lakhs for chambers and ₹2 lakhs for library – Court held petitioner entitled subject to compliance with policy conditions [Paras 4, 14, 16].

Technical Objection – Non-Vetting of Estimate – State pleaded estimate not prepared or vetted by PWD – Court observed Executive Engineer of PWD could have deputed officer for site visit and preparation/vetting of estimate – Administrative inaction cannot defeat substantive right under policy – Direction for spot inspection and cross-verification issued [Paras 14, 16-17].

Parity and Non-Discrimination – Similar Grants to Other Bars – Petitioner pleaded similar grants released to other Bar Associations – No denial by State of policy applicability – Withholding grant held unjustified once eligibility established [Paras 10, 15-16].

Directions: Respondent-State directed to release ₹50 lakhs as matching grant for construction of lawyers’ chambers and ₹2 lakhs for library fund – Prior to release, Executive Engineer, PWD (B&R), Amritsar to depute engineer to inspect site, verify estimates and expenditure and submit report by 15.01.2026 – Grant to be released by 10.02.2026 upon receipt of report – Bar Association directed to cooperate and furnish account details – Writ petition allowed [Paras 17-19].

Civil Law – Specific Performance – Proof of Agreement – Plaintiff claimed agreement for sale dated 14/12/1990 and power of attorney dated 04/12/1990 executed by defendant – Court held that agreement for sale not required to be attested under Section 68 of Evidence Act – However, execution not proved as per Section 67 – Admitted absence of signatures of executant and attorney holder – Held: Plaintiff failed to prove execution of agreement; First Appellate Court right in holding trial court erred in accepting unproven document [Paras 10.3–10.10].

Remand – Power under Order XLI Rule 23A CPC – First Appellate Court remanded suit for de novo trial framing additional issues of fraud and sham transaction – Plaintiff argued no plea of fraud or prayer for additional evidence existed – Held: Defendant had specifically pleaded forgery and fabrication; trial court failed to frame necessary issues or decide counterclaim and key issues – Twin conditions for remand under Order XLI Rule 23A satisfied – No infirmity in remand [Paras 11.3–11.14].

Counterclaim – Non-Filing of Written Statement – Defendant sought declaration of forgery and eviction of plaintiff through counterclaim – Plaintiff failed to file written statement against counterclaim – Trial Court failed to decide counterclaim issues properly – First Appellate Court held remand justified – Held: Pleadings of fraud were not vague; trial court’s failure to adjudicate essential issues warranted open remand [Paras 13.1–13.6, 14.5–14.6].

Evidence – Admissibility – Power of attorney holder of defendant gave evidence (DW1) – Objection raised that she had no authority to depose on behalf of original defendant – Court held issue not examined as remand justified – Observed that admissibility to be considered by trial court afresh [Para 11.17].

Limitation – Article 54, Limitation Act – Plaintiff failed to show continuous cause of action or legal notice in 1990 – Held: Court refrained from expressing views, as First Appellate Court did not conclusively decide maintainability on this ground [Para 12.2].

Fraud – Order VI Rule 4 CPC – Whether counterclaim pleadings on fraud lacked particulars – Held: Defendant’s counterclaim specifically alleged forgery and fabrication – Adequate to put plaintiff on notice – Pleading not defective in law [Para 14.4–14.6].

Decision: Appeals dismissed – Judgment and decree dated 29/02/2024 of First Appellate Court affirmed – Suit remanded to Trial Court for fresh consideration on all framed and additional issues – No order as to costs – Interim orders vacated.

Arbitration – Appointment of Arbitrator – Section 11 of Arbitration Act – Scope of Court’s Inquiry – At referral stage, Court is confined to examining prima facie existence of arbitration agreement – Issues of arbitrability, oppression and mismanagement, or maintainability to be decided by arbitral tribunal – No mini trial permissible [Paras 14–18].

Company Law – Shareholder Disputes – Articles of Association – Arbitration Clause – Clause 67 providing arbitration of disputes touching affairs of company, construction of Articles, and inter se disputes between members – Held: Clause constitutes valid and binding arbitration agreement under Section 7 of the Act [Paras 8–9].

Arbitration Agreement – Competence-Competence – Section 16 – Doctrine of Separability – Arbitration agreement survives despite allegations of non-arbitrability or availability of remedies under Companies Act – Arbitrator empowered to rule on jurisdiction and arbitrability [Paras 14–16].

Section 9 Proceedings – Effect on Section 11 Petition – Prior dismissal of Section 9 application and disposal of appeal on petitioner’s statement does not bar invocation of Section 11 – Division Bench clarified that arbitrability issue left open – Held: No estoppel or bar against appointment of arbitrator [Paras 10–11].

Non-Arbitrability Objection – Oppression and Mismanagement – Mere availability of remedy under Companies Act does not oust arbitration at reference stage – Whether dispute falls exclusively within company law jurisdiction is matter for arbitral tribunal [Paras 13–14].

Precedents – Referral Court’s Limited Jurisdiction – Reliance on SBI General Insurance Co. Ltd. v. Krish Spinning, In Re: Interplay between Arbitration Act and Stamp Act, and Office for Alternative Architecture v. Ircon Infrastructure – Held: Court must examine only prima facie existence of arbitration agreement and leave all other objections to arbitrator [Paras 15–17].

Decision: Petition Allowed – Hon’ble Mr. Justice Harinder Singh Sidhu (Former Judge, Punjab & Haryana High Court) appointed as Sole Arbitrator – Arbitrator to comply with Section 12 of the Act – Fee to be fixed as per Section 31-A – Proceedings to be completed within time prescribed under Section 29-A – Parties directed to appear before Arbitrator on date fixed by him [Paras 18–22].