E-Auction – Earnest Money Deposit – Validity of Auction Process – Petitioner challenged the auction conducted by HSVP, particularly the demand of 25% EMD of the reserve price, contrary to the policies that fixed EMD at 5%. The petitioner contended that this violated the applicable policy and was tailored to favor certain bidders. The Court held that the auction process, including the Swiss challenge method and the EMD requirement, was within the administrative discretion of HSVP, provided it did not violate statutory provisions or exhibit mala fide intent. The Court dismissed the petition, finding no evidence of arbitrariness or bias in the HSVP's conduct [Paras 1-37].

Judicial Review – Administrative Discretion – Scope – The Court reiterated the limited scope of judicial review in commercial matters, particularly in policy decisions involving tenders or auctions by state instrumentalities. Interference is warranted only in cases of manifest illegality, arbitrariness, or mala fide. The decision to adopt the Swiss challenge method and the higher EMD was based on administrative considerations and aimed at ensuring a transparent and competitive bidding process [Paras 22-32].

Decision:

Petition dismissed – The Court upheld the auction process and directed that the HSVP’s decisions regarding the auction terms and conditions were justified and in line with established legal principles governing state auctions and tenders [Para 37].

Civil Law - Section 16(c) of the Specific Relief Act, 1963 - Specific Performance – Validity of Sale Agreement – Readiness and Willingness – Agreement Upheld – The defendant denied execution of the written sale agreement alleging fabrication using blank signed stamp papers – Held: Oral and documentary evidence, including testimonies of attesting witnesses and the document writer, establish the genuineness of the agreement and endorsements – Defendant’s admission of an oral sale arrangement further corroborates the plaintiff’s case – The plea of fabrication is unsustainable [Paras 2-9].

Specific Relief – Readiness and Willingness – Non-denial Equals Admission – The plaintiff pleaded that he was always ready and willing to perform the contract – Held: As per Order VIII Rule 5 CPC read with Section 58 of the Indian Evidence Act, absence of specific denial in the written statement amounts to deemed admission – Therefore, the statutory requirement under Section 16(c) of the Specific Relief Act stands satisfied – Lack of bank statements to show funds during the contractual period is irrelevant where financial capacity is otherwise undisputed [Paras 11-13].

Income Tax Act – Section 269ST – Applicability – Cash Payments Not Fatal to Contract – Held: Violation of Section 269ST of the Income Tax Act, which restricts large cash transactions, does not invalidate the contract for sale in a civil suit – Such violation may invite penal consequences under the Income Tax Act but does not affect enforceability of the agreement under the Specific Relief Act [Para 14].

Market Value – Challenge to Price – No Proof of Higher Rate – Defendant’s assertion that the prevailing market rate was ₹60,000 per cent is unsupported by evidence – The agreed price of ₹43,000 per cent recorded in the written agreement (Ext.A1) is accepted – Plaintiff deposited the balance consideration before the trial court – Held: The trial court rightly decreed specific performance [Para 15].

Decision – Appeal Dismissed – The High Court upheld the decree for specific performance passed by the Sub Court, Ottappalam – The appeal is dismissed with no order as to costs [Conclusion].

Matrimonial Law – Validity of Marriage – Prior Subisting Marriage – Declaration and Partition Denied – The petitioner claimed marital status and sought partition of properties belonging to the deceased Madhuprasannan – Held: The evidence conclusively proved that the deceased was already married to the first respondent (Jayasree) on 21.08.1989 at the Mishra Vivaha Samithi, followed by a customary marriage on 01.10.1989 – The marriage was supported by documentary evidence including marriage register (Ext.X1), maintenance proceedings, birth certificate of son (Akhil), property documents, and identity documents – Consequently, the petitioner’s marriage with the deceased cannot be recognized – The prayer for declaration and partition rightly declined by the Family Court [Paras 6-14].

Matrimonial Law – Recovery of Medical Expenses – Relief Granted Partly – The petitioner’s claim for recovery of ₹16 lakhs towards medical expenses incurred for the treatment of the deceased was partly allowed – Held: The Family Court rightly decreed the claim limited to the amounts supported by original bills produced (Ext.A4 series) – The High Court found no error in the appreciation of evidence on this issue [Paras 15-16].

Family Law – Customary Marriage – Proof and Validity – The Court reaffirmed that the absence of marriage registration does not invalidate a marriage if it is otherwise solemnized in accordance with customary rites – The unchallenged oral testimony of the first respondent and corroborative documentary evidence were sufficient to establish a valid marriage [Paras 8-14].

Decision – Appeals Dismissed – The Kerala High Court upheld the Family Court’s decree – Reliefs of declaration of marital status and partition stand rejected – The decree for medical expenses based on original bills is affirmed – Both appeals fail and are dismissed [Paras 17].

Tenancy Law – Inheritability of Tenancy – Section 5 of Karnataka Rent Act – Eviction Confirmed – The petitioners, being legal representatives of the original tenant under a moolageni lease, contested the eviction ordered under Section 5 of the Karnataka Rent Act – Held: The tenancy rights under Section 5 devolve upon legal representatives only for a period of five years from the death of the original tenant – The lease was forfeited due to continuous default in rent payment for over five years as per the lease deed – The Courts below rightly ordered eviction under Section 5 – Order upheld [Paras 35-43].

Rent Control – Personal Requirement – Bonafide Need Claim Fails – Section 27(2)(r) and 31(1)(a) of Karnataka Rent Act – The original petitioner sought eviction on the ground of personal use – Held: The right to claim bonafide requirement becomes infructuous due to the death of the petitioner during the pendency of proceedings – In the absence of amended pleadings by other family members asserting personal requirement, eviction on this ground cannot be sustained – The Rent Revision Court erred in allowing eviction on this ground – Trial Court order rejecting eviction under this ground restored [Paras 23-24].

Rent Control – Valuation of Improvements – Jurisdiction of Rent Court – Rent Court Cannot Adjudicate Disputes Regarding Valuation of Improvements – The Trial Court had erroneously directed ascertainment of the value of improvements by four gentlemen as a precondition for eviction – Held: Such matters are beyond the jurisdiction of the Rent Court and should be addressed in separate proceedings – Rent Revision Court rightly set aside this direction – Finding affirmed [Paras 24-26].

Tenancy – Moolageni Lease – Applicability of Karnataka Rent Act – Moolageni Tenant Covered under Definition of Tenant – Despite being a permanent lease by nomenclature, the tenancy is governed by the Karnataka Rent Act as clarified in Section 3(n) – The argument that Rent Act does not apply to moolageni leases is untenable – The law provides for termination based on forfeiture clauses and statutory provisions of Section 5 governing inheritability after the tenant's death – Held: Lease rightly determined on grounds of forfeiture and expiry of rights under Section 5 [Paras 32-43].

Decision – Revision Petition Partly Allowed – Eviction on grounds of bonafide personal requirement under Section 27(2)(r) and 31(1)(a) is set aside – Eviction under Section 5 of the Karnataka Rent Act confirmed – Petitioners granted two months time to vacate the premises – Directions regarding valuation and payment for improvements set aside as beyond the jurisdiction of Rent Court [Para 44].

Criminal Law – Quashing of FIR - Gangsters Act – Procedural Non-compliance – FIR Quashed – Sections 2(b)(i), 3 of the Gangsters Act – Petitioners sought quashing of FIR based on gang chart prepared without recording proper satisfaction by competent authorities – Held: The District Magistrate failed to conduct a valid joint meeting and merely approved the proposal using vague language like “discussed with Superintendent of Police and Committee and proposal approved” – Such mechanical endorsement is contrary to the mandates of Rule 16 and Rule 5(3)(a) of the Rules, 2021 and violates settled law – FIR and gang chart quashed [Paras 3-6, 12-14].

Satisfaction Requirement – Rule 16 of Gangster Rules – Strict Compliance Mandated – Approval of gang chart must reflect actual application of mind by forwarding and approving authorities – Held: Satisfaction must be recorded in clear terms, not by signing pre-typed or vague text – Any failure renders the FIR invalid under law [Paras 7-9].

Judicial Precedents – Binding Nature – Failure to Follow High Court and Supreme Court Guidelines – FIR Quashed – Authorities ignored repeated judicial directions requiring due process in preparing gang charts – Held: Despite previous rulings in Sanni Mishra, Abdul Lateef, and Vinod Bihari Lal, authorities failed to apply mind or conduct proper joint meetings – Repeated defiance of such binding judgments led to quashing of proceedings [Paras 8-10, 13].

Fundamental Rights – Article 21 – Protection Against Arbitrary Invocation of Extraordinary Statutes – Supreme Court’s Caution – Held: Gangsters Act significantly restricts personal liberty; hence, must be invoked only after thorough compliance with procedural safeguards – Approval process must be fair, reasoned, and evidence-backed – The impugned FIR failed on these counts [Paras 10, 23-25].

Government Guidelines – Non-Compliance with State Circulars Dated 02.12.2024 – FIR Quashed – Despite clear administrative instructions regarding maintenance of registers, satisfaction recording, and documentation of joint meetings, officials continued to act mechanically – Held: The District Magistrate, Kheri ignored directions, necessitating judicial intervention – Chief Secretary directed to reinitiate training for authorities [Paras 11, 15-17].

Final Relief – FIR and Gang Chart Quashed – Authorities Permitted to Reinitiate Proceedings if Rules Are Followed – Held: The entire FIR and gang chart stand vitiated due to procedural illegality – However, fresh action under Gangsters Act may be taken in accordance with prescribed rules and judicial guidelines [Paras 14, 16].

Criminal Breach of Trust – Acquittal – Appeal by Association – The Association alleged that its former Honorary Secretary had embezzled funds, forged documents, and falsified accounts during his tenure – Trial Court acquitted the accused, finding no cogent evidence of embezzlement or forgery – High Court upheld the acquittal, ruling that the prosecution failed to prove its case beyond a reasonable doubt – The audit report presented by the prosecution was rejected as it was not properly proved under the Indian Evidence Act [Paras 1-19].

Forgery and Falsification of Accounts – Lack of Evidence – The court noted that the mere suspicion of the complainant was insufficient to prove the charges – The alleged forged documents were found to be related to a dispute over the election of the Association, not a criminal act – No direct evidence was provided to support claims of falsification or misappropriation of funds [Paras 12-15].

Appeal Against Acquittal – High Threshold – Court reiterated that appeals against acquittals are to be treated with caution and can only succeed if the judgment of acquittal is perverse or legally flawed – The application for additional evidence under Section 391 Cr.P.C. to prove the audit report was denied as an attempt to fill lacunae in the prosecution’s case [Paras 16-18].

Decision:

Application for leave to appeal dismissed. The High Court found no reason to interfere with the Trial Court’s judgment acquitting the respondent.

Preventive Detention – Detention under Goondas Act – Validity – Habeas Corpus Petition Dismissed – The detenue was involved in multiple serious offences including attempt to murder, extortion, sexual offences under POCSO, drug trafficking, and violation of bail conditions – The detaining authority after subjective satisfaction found that the detenue's activities were prejudicial to public order and passed the detention order dated 16.01.2025, which was subsequently confirmed by the State Government after following the procedure including the Advisory Board's opinion – Held: The detention is lawful and does not suffer from procedural irregularities or violation of Article 22(5) of the Constitution – Preventive detention is a precautionary measure to prevent further criminal activity rather than punitive action – Habeas Corpus Petition dismissed [Paras 2-5, 14-19].

Preventive Detention – Power of State Government – Maximum Period – Detention for 12 Months Valid – As per Section 3 read with Section 13 of the Goondas Act, the State Government is competent to pass a detention order for a maximum period of 12 months – The restriction of three months applies only to the delegation of powers to District Magistrates or Commissioners of Police under Section 3(2) – Held: The contention that detention cannot exceed three months is misconceived – Confirmed by the Court that the detention order for 12 months is valid in law [Paras 15(i)].

Preventive Detention – Subjective Satisfaction – Judicial Review Limited – Scope Explained – The Court reiterated that it cannot substitute its own opinion for the subjective satisfaction of the detaining authority – Judicial review is limited to checking procedural compliance and whether relevant materials were considered – The sufficiency of the material cannot be questioned by the Court – Held: Subjective satisfaction was properly recorded by the detaining authority based on credible material evidencing the detenue's continuous engagement in criminal acts affecting public order [Paras 14-18].

Preventive Detention – Bail in Criminal Cases – Not a Bar to Preventive Detention – Held: The pendency of prosecution or grant of bail is no bar to preventive detention if the detenue continues to engage in criminal activities prejudicial to public order – Preventive detention operates independently of criminal trials – Supported by Haradhan Saha v. State of West Bengal, (1975) 3 SCC 198 and Union of India v. Dimple Happy Dhakad, (2019) 20 SCC 609 [Paras 14-18].

Decision – Writ Petition Dismissed – The Court upheld the detention order dated 16.01.2025 passed by the Commissioner of Police and confirmed by the State Government on 22.01.2025 and 13.02.2025 – The detention was held to be lawful and justified under the Goondas Act – No procedural irregularity or violation of constitutional rights found [Paras 18-20].

Foreign Exchange Violation – Residency under Section 2(p) and 2(q) of FERA – Appeals Dismissed – The Appellants including three daughters of the Shroff family, their mother as legal heir of Kishor Shroff, and Sujay Trading Corporation Pvt. Ltd., challenged penalty orders passed by the Enforcement Directorate and confirmed by the Tribunal for purchase of shares in an Indian company without RBI approval – Core issue was whether the daughters were ‘persons resident in India’ or ‘persons resident outside India’ under FERA during their stay in the USA – Held: Appellants were rightly classified as ‘persons resident outside India’ based on long-term stay, marriage to US residents, and absence of intent to return – Violation of Sections 9, 19, and 29 read with Section 68 FERA proved – No grounds to interfere with concurrent findings – Appeals dismissed [Paras 1-9, 30-41, 48-50].

Burden of Proof – Presumption under FERA Sections 59 and 71 – Application of Section 114 Evidence Act – Held: Presumption of culpable mental state applies in economic offences under FERA – Burden to prove lawful residence status and RBI permission lay upon the appellants – Failure to discharge burden led to adverse inference under Section 114(g) Evidence Act – Tribunal justified in relying upon presumptions – Contentions regarding improper burden shifting rejected [Paras 37-41, 45-46].

Interpretation of ‘Person Resident in India’ – Criteria of Intention to Stay – Held: The key legal test is whether the person had intention (animus manendi) to stay outside India for an uncertain period – Prolonged stay abroad, marriage to persons settled in the USA, absence of material indicating a return to India, and long gaps in travel cumulatively show intention to stay abroad indefinitely – RBI v. Jacqueline Chandani distinguished – Definitions under Section 2(p) and 2(q) applied strictly – Appellants classified as persons resident outside India [Paras 27-36, 42-44].

Penalty – Proportionality – No Mitigating Grounds – Held: No merit in arguments about disproportionality of penalty – Penalties imposed are reasonable and justified given the magnitude of the violations, deliberate avoidance of RBI permissions, and economic impact – No basis for interference in penalty amounts [Paras 24, 47].

Decision – Appeals Dismissed – Findings of the Special Director, ED, and Appellate Tribunal upheld – Appellants failed to rebut presumption of intention to stay outside India – Share transactions conducted without mandatory RBI permission were in contravention of FERA – No merit in appeals – Dismissed without costs – Interim reliefs vacated [Paras 48-50].

Criminal Law - Quashing of Charges – Interception of Calls – Section 5(2) of Telegraph Act – Petition Dismissed – The petitioner challenged charges framed under Section 120B IPC read with Section 9 of the PC Act alleging unlawful interception of calls and lack of prima facie evidence – The High Court upheld the legality of interceptions based on public safety and confirmed their admissibility – Held: The allegations pertain to economic offences involving high-value public contracts and satisfy the threshold for interception – Sufficient grave suspicion exists to justify framing of charges [Paras 1–3, 18–20, 28–30, 40–52, 54–55].

Lawful Interception – Public Safety – Review Committee – Interceptions Validated – The Court accepted CBI’s argument that corruption undermines public safety and economic stability – Orders of interception were passed in the interest of public safety and reviewed by the Review Committee as required by Rule 419A – Held: Interception orders are legal and justified under Section 5(2) of Telegraph Act – No case for destruction of intercepted call records [Paras 24–33, 36–37].

Admissibility of Evidence – Illegally Obtained Evidence – Not a Bar if Relevant – The Court relied on precedents including Navjot Sandhu and R.M. Malkani to hold that even unlawfully obtained evidence may be admissible if relevant – Held: Even if calls were intercepted illegally (which they were not), recordings showing transfer of bribe would still be admissible [Paras 38–39].

Prima Facie Case – Grave Suspicion – Framing of Charges Justified – The Court found that recorded calls and corroborating witness statements, including that of petitioner’s driver, raised grave suspicion against the petitioner – Held: Delivery of motorcycle as bribe and petitioner's awareness of transaction satisfies the threshold under Sections 227 and 228 CrPC – Charges were rightly framed [Paras 42–52].

Final Decision – Petition Dismissed – The Court found no ground to interfere with the impugned order framing charges or to order destruction of call recordings – Held: Petition stands dismissed with liberty to raise all contentions at trial [Paras 53–55].