NDPS Act – Appeal Against Acquittal – Acquittal Upheld – Prosecution case based on recovery of 1 kg 50 grams charas from each accused – Trial court acquitted accused due to contradictions in evidence – High Court found inconsistencies in timing of arrest, packing and sealing procedure, and absence of independent witnesses – Held: Prosecution failed to establish conscious possession and failed to maintain chain of custody – Suspicion, however strong, cannot replace proof beyond reasonable doubt [Paras 35–44]

Criminal Procedure – Scope of Appeal Against Acquittal – Principles Reiterated – Appellate Court has power to reappreciate evidence, but interference is justified only where acquittal is perverse or unreasonable – Trial court’s view held to be plausible based on evidence – Appeal dismissed [Paras 31–34, 45–47]

Evidence – Contradictions – Credibility of Prosecution Witnesses – Conflicting testimony regarding time of departure and arrest (2:35 PM vs 4:50 PM), and material discrepancies in packaging (matchboxes vs cigarette packets) – Variance in sample weights noted in FSL report – Held: Serious contradictions undermine prosecution’s credibility [Paras 35–38]

Chain of Custody – Missing Links – Samples Not Traced Reliably to FSL – No proper explanation for delay or method of deposit at FSL – Constable who allegedly carried rukka and samples not examined – Prosecution failed to prove unbroken chain of custody [Paras 40–43]

Independent Witness – Non-examination – Effect – Prosecution failed to associate any local witness during alleged recovery – Statements of officials contradictory on efforts to secure independent witness – Held: Non-association of public witness creates doubt in prosecution version [Paras 35–36]

Decision: Appeal dismissed – Acquittal upheld – Bail bonds discharged.

Criminal Law – Quashing of Criminal Proceedings – Fraudulent Loan Disbursement – Complaint case based on FIR alleging misappropriation of ₹8 lakhs through fraudulent withdrawal by bank officials, including Branch Manager, Loan Manager, Deputy Manager, Head Cashier and Peon – Applicants sought quashing of proceedings under Section 482 CrPC, claiming lack of direct role and clean chit in police final reports – Court held: Detailed and specific allegations made by complainant under Sections 200 and 202 CrPC supported by witnesses – Final reports have no bearing once complaint is registered and cognizance is taken [Paras 5–7, 25–27, 29]

Banking Fraud – Role of Bank Officials – Complainant alleged he was misled into opening an account and made to sign blank documents – Loan of ₹8 lakhs sanctioned without proper signatures and withdrawn in violation of bank norms through loose cheque exceeding ₹25,000 limit – RTI replies and documentary annexures reveal absence of due process and support fraud allegations – Involvement of sanctioning and disbursing authorities, including Ayushi Mishra, Rajesh Kumar and Brijesh Kumar @ Brijesh Kumar Kashyap, prima facie evident [Paras 17–18, 26–27]

Criminal Procedure – Section 482 CrPC – Scope – Summoning Order – Court reiterates settled law that at quashing stage, evidence cannot be evaluated – Magistrate’s summoning order based on specific statements under Sections 200 and 202 CrPC and supported by documents and witnesses – Held: Magistrate applied mind to material and exercised discretion properly – No interference warranted at pre-trial stage [Paras 14, 26–29]

Complaint Proceedings – Relevance of Final Report – Twice police submitted final reports giving clean chit – Complainant filed protest petition, converted into complaint case – Court holds: Once complaint is registered and Magistrate takes cognizance after examining complainant and witnesses, findings of police investigation lose relevance – Statements under Sections 200 and 202 CrPC form basis for summoning [Paras 7, 23–24]

Forgery and Economic Offence – Prima Facie Case – Allegations involve forging documents, unauthorized withdrawal, and misuse of public trust in banking system – Supreme Court precedents cited (Dharambeer Kumar Singh, Aryan Singh, Parbatbhai Aahir) emphasise that economic offences with social impact warrant trial – Court finds material sufficient to proceed – Quashing rejected [Paras 20–22, 26–28]

Decision: Applications under Section 482 CrPC dismissed – Summoning orders upheld – Allegations disclose commission of cognizable offences – Sufficient prima facie material available – Trial required to adjudicate facts – No costs imposed.

Civil Law – Execution of Ex Parte Decree – Stay of Execution – Petitioner/Judgment Debtor challenged execution of decree passed ex parte on 11.07.2024 – Application under Order IX Rule 13 CPC for setting aside the decree filed on 04.03.2025 remained pending – Respondent/decree holder failed to file reply despite multiple opportunities but pressed for execution – Held: Proceeding with execution without adjudicating the application under Order IX Rule 13 CPC would cause irreparable prejudice – Execution to remain stayed until disposal of said application [Paras 1–11]

Order IX Rule 13 CPC – Purpose – Execution Stayed – Court emphasised that pending adjudication of application to set aside ex parte decree, execution of such decree should ordinarily be withheld – Otherwise, application under Order IX Rule 13 would be rendered infructuous and cause injustice – Stay of execution warranted to balance equity and prevent misuse of process [Paras 5–10]

Judicial Coordination – Same Court to Hear Application and Execution – Court directed District and Sessions Judge to ensure that application under Order IX Rule 13 CPC and connected execution petition be heard by the same Presiding Officer – Held: Judicial consistency and administrative convenience require matters arising from same decree to be tried together [Para 12]

Decision: Execution of ex parte decree stayed until disposal of application under Order IX Rule 13 CPC – District and Sessions Judge, Ferozepur, directed to ensure that both proceedings are handled by the same Court – Application under Order IX Rule 13 to be decided within six months.

Criminal Law – Quashing of FIR – Civil Dispute Allegedly Converted into Criminal Case – FIR Discloses Prima Facie Cognizable Offences – Petition Dismissed – Petitioner approached for quashing of FIR under Sections 451, 504, and 34 IPC alleging false implication in a dispute over car repair charges – Held: FIR allegations show petitioner, along with co-accused, forcibly entered garage with sticks and assaulted complainant – Ingredients of Section 451 IPC satisfied as garage used for custody of property – Civil nature of dispute does not bar prosecution for acts involving violence and criminal trespass – FIR discloses cognizable offences warranting trial – Petition dismissed [Paras 2, 14, 19–21]

Section 482 CrPC – Scope and Principles – No Interference Unless Exceptional Case Made Out – Framing of Charges Not Challenged – Trial Court to Proceed – High Court reiterates that extraordinary jurisdiction under Section 482 CrPC must be exercised sparingly and only in rare cases of abuse of process – Petitioner did not challenge framing of charges and no exceptional circumstances shown to justify quashing – Disputed facts require trial – Held: Mere delay in FIR or lack of medical evidence not sufficient grounds for quashing when allegations disclose cognizable offences [Paras 11–13, 15–18, 22–24, 27–29]

House Trespass – Section 451 IPC – Garage Held to be Place of Property Custody – Entry with Preparation for Assault Constitutes Offence – Petitioner argued that garage being a public place could not attract Section 451 IPC – Rejected – Court held that garage qualifies as place used for custody of property and unlawful entry with intent to assault satisfies ingredients of Section 451 IPC – Cited Karnataka HC decision in State of Karnataka v. Richard supporting interpretation [Paras 19–21]

Evidentiary Issues – Alleged Falsehood or Omissions in FIR – No Ground for Quashing – Discrepancy in FIR regarding mention of sticks and lack of medical evidence does not invalidate proceedings – Allegations if taken at face value disclose offences – Court held that appreciation of truthfulness and sufficiency of evidence is within trial court’s domain – False in part does not vitiate entire statement [Paras 23–26]

Delay in Lodging FIR – Not a Ground to Quash Criminal Proceedings – Submission regarding delayed complaint held untenable – Delay properly explained and not unusual in inter-personal disputes – Whether explanation is plausible is a matter for trial, not for quashing under Section 482 CrPC [Para 22]

Decision: Petition dismissed – FIR and consequential proceedings to continue – Trial Court to proceed uninfluenced by observations in this judgment.

Matrimonial Law – Divorce – Mental Cruelty – Vague Allegations and Police Cases – Divorce Denied – Appellants, two brothers, filed separate divorce petitions under Section 13(1)(ia) of HMA alleging cruelty by their wives who are sisters – Alleged incidents included quarrels, assaults, poisoning, FIRs and refusal to attend last rites – All FIRs ended in acquittal or compounding – No medical or independent evidence produced – Held: Allegations were vague, general and unsupported – Mere registration of FIRs without conviction or supporting proof cannot constitute cruelty – Appeals dismissed [Paras 6–9, 18–29].

Cruelty – Evidentiary Threshold – Section 13(1)(ia) HMA – Proof Required – Family Court rightly held that allegations of cruelty must be specific and substantiated – No evidence of poisoning or Kalendra proceedings produced – FIR-based allegations unsupported by medical records or independent testimony – Respondents acquitted, and allegations found to be part of domestic discord – Held: Standard of proof is preponderance of probabilities, but even that not satisfied in present case [Paras 21–25].

Separation – Long Duration Alone Not Cruelty – No Irretrievable Breakdown Proven – Appellants relied on prolonged separation of over 13 years to seek divorce – Held: Long separation, in absence of intent to reconcile or abusive conduct by respondent, cannot per se constitute cruelty – Appellants themselves unwilling to resume cohabitation – Reliance on Samar Ghosh v. Jaya Ghosh and Naveen Kohli v. Neelu Kohli found misplaced [Paras 27–28].

Burden of Proof – Non-Examination of Key Witness – Adverse Inference – Appellants failed to examine any independent witness or produce credible documentary evidence – Plaintiff Devender Kumar admitted in cross-examination unwillingness to live with respondent – Held: Mere allegations without proof cannot sustain divorce on grounds of cruelty [Paras 21–23, 26].

Decision: Divorce appeals dismissed – Family Court judgment upheld – No credible evidence of cruelty – Long separation without cohabitation not a standalone ground for divorce – Parties left to bear their own costs [Paras 29–30].

Civil Law – Agreement to Sell – Refund of Earnest Money – Specific Performance Not Pressed – Plaintiff claimed refund of Rs.46.38 lakhs as part of Rs.85.78 lakhs allegedly paid under agreement to sell dated 04.12.2007 – Both Trial Court and First Appellate Court rejected claim as agreement did not mention payment of any earnest money and lacked clarity on sale consideration – Held: Plaintiff failed to establish payment of any specific amount towards earnest money through cogent evidence – No refund could be granted in absence of proof of consideration or admission by seller [Paras 4, 7].

Civil Procedure – Limitation of Challenge – Scope of Appeal – Before First Appellate Court, plaintiff did not press for specific performance and restricted challenge to refund claim only – First Appellate Court rightly limited its findings to Issue No.3 regarding refund – No error found in courts below in rejecting plaintiff’s restricted claim [Paras 4, 7].

Second Appeal – Substantial Question of Law – Concurrent Findings – Both courts below rejected plaintiff’s case on facts and evidence – No substantial question of law arising from concurrent findings – Held: Second appeal not maintainable under Section 100 CPC where no perversity or legal infirmity shown [Paras 8-9].

Decision:   Appeal dismissed – No merit found – No substantial question of law arises.

Motor Accident Claim – Delay in FIR – Explanation Accepted – Accident on 11.08.2010, FIR registered on 18.08.2010 – Delay explained as due to communication lapse between hospital and police – Supported by Medico Legal memo – Held: Explanation plausible – FIR and medical records sufficiently establish accident and manner of occurrence [Paras 15–17].

Negligence – Proof of Involvement of Vehicle – Though owner and driver initially disowned accident by letters (Ex.R1, R2), both admitted involvement during cross-examination – FIR, medical evidence, and testimony of motorcycle rider (PW-2) corroborate accident – Held: Auto driver negligent – Insurer liable to indemnify owner [Paras 17–18].

Causation – Contributory Factors – Medical evidence revealed deceased had chronic liver disease, obesity, smoking history – Death resulted from “complications of head injury” – Held: Though contributory factors existed, accident remained proximate cause of death – No deduction warranted solely on that basis [Para 18].

Non-joinder of Parties – Motorcycle Not Insured – Deceased was pillion rider – Motorcycle owner not impleaded – However, since offending auto caused accident, insurer’s liability unaffected [Para 19].

Compensation – Salary Components – Inclusion of Allowances – Deceased was Senior Manager at Motorola earning ₹1,96,173.35 per month – Held: HRA, LTA, Medical and Car Lease Allowances to be included in income – Special/Conveyance Allowance excluded as reimbursement – Income tax and professional tax deducted – Monthly income fixed at ₹1,60,000 [Paras 27–30].

Future Prospects and Multiplier – Deceased aged 37 years – 50% added towards future prospects – 1/4th deducted for personal expenses – Multiplier ‘15’ applied – Loss of dependency computed at ₹3.24 crore [Paras 31–33].

Medical Expenses – Medi-claim Policy – Reimbursement proved – Premium paid by employer through salary deduction – Only ₹200 per month deductible considered – No separate compensation allowed for reimbursed medical expenses [Paras 21–23].

Quantum – Modified Award – Tribunal’s award of ₹2.99 crore enhanced to ₹3.26 crore – Apportionment revised – Wife ₹1 crore, two minors ₹75 lakh each, parents ₹38.18 lakh each – Interest at 7.5% p.a. maintained – Insurer directed to deposit within 8 weeks [Paras 33–35].

Decision: Appeal by Insurance Company dismissed – Appeal by Claimants partly allowed – Compensation enhanced to ₹3.26 crore with 7.5% interest – Apportionment and deposit directions as per Court’s order.

Criminal Law – Anticipatory Bail – Companies Act Offences – Bail Granted – Chartered Accountants facing prosecution under Sections 143 r/w 147 and 448 of the Companies Act, 2013 and related provisions for allegedly auditing falsified financial statements of SRS Group companies and concealing related party transactions – Petitioners had not been arrested during investigation – Trial court had issued summons and later warrants, prompting petitions under Section 438 CrPC – High Court held there was no material to show petitioners received disproportionate payments or undue favors in lieu of favorable audit reports – No evidence of complicity in the loan fraud or siphoning of funds – Bail granted as custodial interrogation not required [Paras 1, 3, 24, 29, 30]

Companies Act – Section 212(6) – Twin Conditions for Bail – Applicability – Court held that in absence of prima facie material indicating conspiracy or intent to commit fraud, statutory rigors of Section 212(6) would not preclude grant of bail – Reverse burden clause under Section 212(6) must be triggered only after primary burden is discharged by the prosecution – Held: Petitioners satisfied both limbs of Section 212(6) – Not guilty of offence and unlikely to commit any offence while on bail [Paras 31-33]

Audit Practice – Professional Negligence vs. Criminal Conspiracy – Distinction Drawn – Allegations primarily relate to failure in following auditing standards and non-reporting of circular transactions and related party dealings – Court observed no direct evidence of quid pro quo, criminal intent, or conspiracy with SRS Group controllers – Case does not exceed beyond dereliction of duty – Held: Auditors’ acts, even if deficient, did not amount to criminal complicity in financial fraud [Paras 24, 28-30]

Bank Lending – Role of Auditors – Scope of Responsibility – Consortium of banks (led by SBI) granted large-scale loans to SRS Group – Court found that banks did not rely upon audited financial statements while sanctioning credit – Held: No causal link between auditors' conduct and grant of loans – Bail granted as no complicity established [Paras 26-27]

Decision:

Anticipatory bail granted to all petitioners – Conditions imposed to ensure presence before trial court – Court clarified that mere professional lapses without quid pro quo or mens rea do not satisfy threshold under Section 212(6) Companies Act, 2013.

Civil Law – Interim Injunction – Violation of Status Quo Order – Plaintiffs filed suit for declaration and permanent prohibitory injunction with application under Order 39 Rules 1 and 2 CPC – Trial Court granted injunction on 30.12.2019 directing parties to maintain status quo – Local Commissioner’s report confirmed ongoing construction by defendants in breach of order – Appellate Court partially allowed defendants’ appeal permitting them to complete construction on existing structure citing equity and investment – Held: Appellate Court erred in rewarding violation of trial court’s injunction by allowing construction completion – Such use of Local Commissioner’s report to justify continued breach undermines sanctity of interim orders – Appellate Court’s order modified – Respondents restrained from further construction, alienation, or creation of charge over suit land during pendency of suit – Trial Court’s interim directions restored [Paras 2-9].

Decision: Petitions allowed – Order of Appellate Court modified – Parties directed to maintain status quo regarding possession and nature of suit land – Respondents restrained from further construction, alienation, or creating any charge over the property without leave of the Trial Court.