Civil Law - Partition Suit – Rejection of Plaint Under Order VII Rule 11 CPC – Grounds Must Be Apparent from the Plaint Itself – The defendants sought rejection of the plaint, arguing that the suit was barred by limitation and lacked a cause of action – The High Court held that under Order VII Rule 11 CPC, rejection of the plaint is permissible only if the defect is apparent from the plaint itself – Held: Where issues require examination of evidence, the plaint cannot be rejected summarily [Paras 6-10].

Mutation Entries – Do Not Confer Ownership – Cannot Be Sole Basis for Dismissing Suit – The defendants argued that the suit properties had already been partitioned and transferred through mutation entries, negating the plaintiffs’ claim – The High Court ruled that mutation entries are only for fiscal purposes and do not create or extinguish ownership rights – Held: The question of ownership and partition requires trial and evidence, and mutation entries alone cannot bar a suit for partition [Paras 12-15].

Limitation in Partition Suits – Article 110 of the Limitation Act – Knowledge of Exclusion is Key – The defendants contended that the suit was barred by limitation, as the alleged partition occurred in 1976 and subsequent mutations were recorded in 2003 and 2008 – The Court clarified that under Article 110 of the Limitation Act, 1963, the period of 12 years begins from the date the plaintiff becomes aware of the exclusion from joint family property – Held: Mere existence of old mutation entries does not establish knowledge of exclusion, and this issue must be decided at trial [Paras 15-16].

Cause of Action – Cannot Be Considered Illusory Without Evidence – Plaint Must Be Examined in Entirety – The Court rejected the argument that the cause of action was fictitious or illusory, holding that cause of action is a bundle of facts requiring evaluation of surrounding circumstances – Held: A suit cannot be dismissed at the threshold unless it is manifestly vexatious, meritless, or an abuse of process [Paras 17-18].

Decision – Civil Revision Applications Rejected – Suit to Proceed to Trial – The High Court upheld the Trial Court’s decision and dismissed both civil revision applications – Held: The partition suit must proceed to trial, as issues of limitation, title, and cause of action require factual determination [Paras 18-19].

NDPS Act – Bail Application – Prima Facie Violation of Section 50 Found – Bail Granted – The trial court found a prima facie violation of Section 50 of the NDPS Act and reasonable grounds to believe that the accused was not guilty – However, bail was denied on the ground of past involvement in another NDPS case – The High Court held that mere antecedents cannot be the sole ground for rejection of bail, especially when procedural lapses exist – Held: Bail granted with conditions [Paras 7-8].

Prolonged Incarceration – Right to Speedy Trial – Bail Allowed – The accused had been in custody for over 1 year and 3 months – The Sessions Court report indicated that trial completion was unlikely in the near future – Relying on Supreme Court judgments emphasizing the right to speedy trial, the High Court held that prolonged detention without trial violates Article 21 of the Constitution – Held: Bail cannot be denied indefinitely on mere allegations [Paras 9-10].

NDPS Act – Section 37 – Rigour Relaxed in Certain Cases – Bail Not to be Withheld as Punishment – The court referred to precedents where rigour under Section 37 of the NDPS Act was relaxed in cases of prolonged detention – Held: Bail is the rule and jail is the exception, subject to fulfillment of reasonable conditions [Paras 10-11].

Decision – Bail Granted with Stringent Conditions – The High Court allowed bail on the execution of a bond with sureties and imposed restrictions on travel, communication with witnesses, and reoffending – Held: Any violation of these conditions will result in cancellation of bail [Paras 12-16].

Service Law - Termination of Service – Reliance on Police Verification Report Despite Acquittal – Order Set Aside – The petitioner was appointed as a Shikshan Sevak in a municipal school but was terminated based on a pending criminal case, despite being acquitted before the termination order was issued – The Court held that once the petitioner was acquitted, reliance on a past police verification report was unjustified – Held: Termination order quashed, and petitioner reinstated [Paras 6-7].

Back Wages – Grant of 50% Considering Litigation Concession – The petitioner, though entitled to full back wages due to wrongful termination, voluntarily agreed to accept 50% back wages to settle the matter – The Court directed that if the Corporation further litigates, the petitioner’s right to claim full back wages will stand revived – Held: 50% back wages granted, to be paid within 60 days, failing which interest at 6% p.a. will apply [Paras 8-11].

Seniority and Continuity of Service – Benefits Restored – The petitioner’s subsequent reappointment as Shikshan Sevak in 2024 was deemed inconsequential, as his original appointment was wrongfully terminated – Held: Petitioner entitled to be treated as continuously employed, with all consequential service benefits including pay scale differences [Paras 11].

Writ Petition Partly Allowed – The impugned termination order was quashed, 50% back wages were granted, and all service benefits were restored – Rule made partly absolute [Paras 12].

Jurisdiction of Sessions Court – Power to Order Re-Investigation – Distinction between Further Investigation and Re-Investigation – The petitioner-hospital challenged the order passed by the Additional District & Sessions Judge-II/Special Judge (SC/ST Act), Gautam Buddha Nagar, directing re-investigation into its role while granting anticipatory bail to an accused doctor – Held: The Sessions Court has no power to direct re-investigation – Re-investigation can only be ordered by constitutional courts, namely the High Court or Supreme Court – Further investigation under Section 173(8) Cr.P.C. is distinct from re-investigation and can only be conducted under appropriate circumstances – The impugned direction for re-investigation was beyond the jurisdiction of the Sessions Court and is liable to be set aside [Paras 15-21].

Scope of Anticipatory Bail Proceedings – Limited Jurisdiction of Sessions Court – The anticipatory bail application was filed by a co-accused doctor, and there was no occasion for the Sessions Court to pass directions regarding re-investigation of the petitioner-hospital – Held: The Sessions Court while dealing with an anticipatory bail application cannot pass orders beyond granting or rejecting bail – Any observation made regarding the role of the petitioner-hospital was uncalled for and beyond jurisdiction – The order directing re-investigation against the hospital is quashed [Paras 20-21].

Judicial Precedents – Vinay Tyagi vs. Irshad Ali (2013) 5 SCC 762 – The Supreme Court has clearly distinguished between further investigation and re-investigation – Re-investigation requires explicit court orders with proper reasoning and is rarely permitted – Sessions Court exceeded its jurisdiction by ordering re-investigation without legal authority [Paras 7, 15-16].

Decision:   The order of the Sessions Court directing re-investigation into the role of the petitioner-hospital is quashed as being beyond jurisdiction. The petitioner-hospital shall not be subjected to re-investigation unless ordered by a constitutional court.
 

Civil Law - Property Dispute – Will Execution – Proof of Attestation – Sections 63 of Succession Act and 68 of Evidence Act – The plaintiff claimed ownership based on a 1936 Will executed by his grandfather, while the defendant contended that the property was ancestral and he had equal rights – Trial Court decreed ownership in favor of the plaintiff – Held: Under Section 63 of the Indian Succession Act, a Will must be attested by at least two witnesses and proved by examining at least one attesting witness under Section 68 of the Evidence Act – Since no attesting witness was examined, the Will was not duly proved – Trial Court’s decree set aside only on the issue of proving the Will [Paras 15-18].

Adverse Possession – Claim Not Established – No Evidence of Hostile Possession – The defendant also claimed that he had acquired ownership by adverse possession – Held: For a valid adverse possession claim, the occupant must acknowledge ownership of another party and establish hostile possession for the statutory period – Defendant failed to prove continuous, exclusive, and hostile possession – Claim of adverse possession rejected [Paras 19-21].

Presumption Under Section 90 of the Evidence Act – Inapplicable to Wills – The plaintiff argued that since the Will was over 30 years old, it should be presumed valid under Section 90 of the Evidence Act – Held: Presumption of regularity under Section 90 does not apply to Wills – A Will must be proved strictly under Section 63 of the Succession Act and Section 68 of the Evidence Act – No presumption of authenticity can arise unless statutory proof is satisfied [Paras 22-24].

Remand for Fresh Consideration – Requirement to Prove Will Through Attesting Witness – Since the Trial Court failed to insist on statutory compliance while admitting the Will, the High Court remanded the matter for limited reconsideration – Held: The matter is remitted back to the Trial Court for fresh findings on whether the Will is duly proved in accordance with legal requirements – If proven, the decree for declaration and possession shall stand affirmed; otherwise, relief cannot be granted based on the Will [Paras 25-27].

Decision: Appeal allowed in part – Trial Court’s judgment and decree dated 07/11/2007 in O.S. No. 3163/1990 set aside only for the limited issue of proving the Will – Matter remanded to Trial Court for fresh consideration of whether the Will is duly proved – Trial Court directed to decide the issue within four months from 25/03/2025 – Parties directed to appear before the Trial Court without awaiting fresh notice – Adverse possession claim rejected [Paras 28-30].
 

Civil Procedure – Exercise of Inherent Powers – Section 151 CPC – No Illegality in Trial Court’s Order – The Trial Court allowed the defendant's application under Section 151 CPC for repairing a dilapidated pillar supporting an extended roof – The Court reasoned that failure to undertake such repairs could cause irreparable loss to both parties – Held: The exercise of inherent power under Section 151 CPC was justified as it was in the interest of justice and did not cause any prejudice to the plaintiff [Paras 1-4].

Appointment of Advocate Commissioner – Ensuring Fairness – No Prejudice to Any Party – The Trial Court appointed an Advocate Commissioner to oversee the repair work to ensure fairness – The commissioner reported that the repairs were completed in the presence of police personnel – Held: The trial court’s approach was balanced and aimed at preventing any undue advantage to either party [Paras 3-5].

Revisional Jurisdiction – Scope of Article 227 – No Manifest Injustice or Perversity – The High Court reiterated that intervention under Article 227 is warranted only in cases of serious dereliction of duty, fundamental violation of justice, or manifest illegality – No such exceptional circumstances were present in this case – Held: No interference was required as the impugned order did not suffer from any illegality, irrationality, or procedural impropriety [Paras 6-7].

Petition Dismissed – No Grounds for Interference – The High Court dismissed the civil revision petition, holding that the Trial Court’s decision was fair, balanced, and did not warrant interference – Urgent certified copies of the judgment were directed to be provided upon compliance with necessary formalities [Paras 6-7].

Anticipatory Bail – Grant of Bail for Non-Bailable Offenses – Violation of Supreme Court Precedent – Bail Upheld – The petitioner challenged the order granting anticipatory bail to respondent no. 2 despite bailable warrants being issued against him – Contended that the order violated the Supreme Court's ruling in Srikant Upadhyay v. State of Bihar, 2024 (3) SCR 421 – Held: Bail under Section 438 CrPC was granted within legal parameters, and no valid grounds were presented to justify cancellation [Paras 3-6].

Bail Cancellation – Section 439(2) CrPC – Appropriate Forum for Cancellation – Petition Dismissed – The petitioner sought cancellation of bail through a petition under Article 227, arguing that anticipatory bail was improperly granted – The Court held that cancellation of bail can only be sought under Section 439(2) CrPC and that Article 227 is not the correct forum for such relief – The petition was found to be legally untenable and dismissed accordingly [Paras 12-14].

Grounds for Cancellation of Bail – No Violation of Conditions or Misuse of Liberty – Bail Sustained – The Court reiterated that bail can only be canceled if the accused misuses liberty, tampers with evidence, or poses a risk of absconding – No such grounds were established in this case – Reference made to Abdul Basit v. Mohd. Abdul Kadir Chaudhary, 2014 (10) SCC 754, and Raghubir Singh v. State of Bihar, (1986) 4 SCC 481 – Held: The anticipatory bail granted to respondent no. 2 cannot be revoked merely on procedural objections [Paras 7-9].

Jurisdiction under Article 227 – Improper Invocation for Bail Cancellation – Petition Dismissed – The Court emphasized that petitions under Article 227 cannot be used as an alternative to remedies explicitly provided under CrPC – Held: The petitioner’s attempt to challenge part of the order while seeking to retain certain directions was legally impermissible, leading to outright dismissal of the petition [Paras 11-13].

Decision: The petition was dismissed as legally unsustainable, reaffirming that bail cancellation must follow proper legal procedures under CrPC [Para 14].
 

Taxation Law - Fixed Place Permanent Establishment (PE) – Business Connection – No Fixed Place PE Established – Test of Disposal Not Satisfied – The Revenue contended that Nokia OY had a Fixed Place PE in India through its subsidiary, NIPL – The Court examined whether a fixed place of business was at the disposal of the assessee for conducting its business – Held: Mere use of administrative support facilities such as telephone, fax, and car for visiting employees does not establish a Fixed Place PE – Further, the liaison office (LO) did not conduct any core business activities of Nokia OY, and its functions were preparatory and auxiliary in nature, falling under Article 5(4) of the DTAA – No Fixed Place PE was established [Paras 26-28].

Fixed Place PE – Test of "At the Disposal of" – No Fixed Place PE Established – The Revenue argued that Nokia OY had a Fixed Place PE in India due to administrative support provided by NIPL, such as access to telephones, faxes, and conveyances – The Court held that these services did not meet the "disposal test" as established in Formula One World Championship Ltd. v. CIT and e-Funds IT Solutions – There was no evidence that any physically located premise was at the disposal of Nokia OY in India – Held: NIPL did not constitute a Fixed Place PE of Nokia OY in India [Paras 25-28, 36-38].

Dependent Agent PE (DAPE) – No Authority to Conclude Contracts – No DAPE Established – For a DAPE to exist under Article 5(5) of the DTAA, it must be shown that NIPL had the authority to conclude contracts on behalf of Nokia OY – The Court found that NIPL was conducting independent business with Indian telecom operators, and there was no evidence of it binding Nokia OY to contracts – The revenue earned by NIPL from installation activities was independently taxed in India and was not attributable to Nokia OY – Held: NIPL did not qualify as a DAPE of Nokia OY in India [Paras 27-28, 40-42, 48].

Vendor Financing – Notional Interest Cannot Be Taxed – No Real Income Accrued – The Revenue sought to tax notional interest on vendor financing under the contracts signed between Nokia OY and Indian cellular operators – The Court held that taxation under the Income Tax Act applies only to real income and not hypothetical accruals – No evidence was presented to show that Nokia OY had actually charged or received interest from Indian customers – Held: The addition of notional interest was unsustainable and was deleted [Paras 29-30, 60-61].

DTAA Interpretation – Business Connection vs. Permanent Establishment – Subsidiary Not Automatically a PE – The Revenue relied on the business connection test to assert that NIPL constituted a PE – The Court emphasized that under Article 5(8) of the DTAA, a subsidiary does not automatically become a PE of its parent – The “virtual projection” test was rejected in favor of an evidence-based approach – Held: Mere business connection is insufficient to establish a PE unless the specific conditions under Article 5 of the DTAA are satisfied [Paras 44-46].

Preparatory and Auxiliary Services – No Fixed Place PE Due to Limited Business Activities – The Tribunal correctly classified the administrative and support services provided by NIPL as preparatory and auxiliary under Article 5(4) of the DTAA – The Court held that activities like telephone access, conveyance, and office support did not constitute core business functions of Nokia OY in India – Held: Such ancillary functions do not result in a Permanent Establishment [Paras 26, 39, 98-102].

Minority Opinion – Business Connection Theory and Alter Ego Doctrine Rejected – The minority opinion argued that NIPL was an alter ego of Nokia OY and should be deemed a PE based on its deep business integration – The majority rejected this view, clarifying that business connection alone does not establish a PE and that the alter ego doctrine is not applicable where the subsidiary operates as an independent legal entity – Held: The minority opinion was unsustainable in law [Paras 49-57].

Arm’s Length Principle – No Income Attribution to Nokia OY – The Court noted that NIPL was compensated for its services at arm’s length and no transfer pricing adjustment had been made – The absence of any profit shifting meant that there was no basis to attribute NIPL’s income to Nokia OY – Held: The Tribunal’s findings on arm’s length pricing were upheld [Paras 58-59].

Precedents – Taxability of Offshore Sales – Settled Law Under Ishikawajima-Harima Case – The taxability of offshore supply contracts was already settled in Ishikawajima-Harima Heavy Industries Ltd. v. DIT – Since Nokia OY’s offshore contracts were executed on an FOB (Free on Board) basis from Finland, no portion of the revenue could be attributed to India – Held: Offshore supply contracts of Nokia OY were not taxable in India [Paras 48, 58].

Taxability of Software – Covered by Supreme Court Decision in Engineering Analysis Case – The Revenue conceded that the issue of software taxation was covered by the Supreme Court ruling in Engineering Analysis Centre of Excellence Pvt. Ltd. v. CIT – Held: No additional tax liability on software transactions [Para 61].

Final Decision – Appeal Dismissed – No Permanent Establishment of Nokia OY in India – The Tribunal’s order was upheld – The Court found no Fixed Place PE, no DAPE, and no justification for notional interest taxation – Held: Appeals dismissed, ruling in favor of Nokia OY [Para 62].
 

Civil Law - Partition Suit – Ancestral Property – Plaintiff's Right Established – The plaintiff sought partition of joint family property, claiming a 1/3rd share – Defendants contended that the plaintiff had relinquished her rights through an unregistered relinquishment deed – The Trial Court held that the plaintiff had not relinquished her rights and decreed the suit – The First Appellate Court upheld the decision – Held: The plaintiff was entitled to partition and a 1/3rd share in the property [Paras 6, 18-20].

Bona Fide Purchaser – No Protection When Seller Lacks Absolute Title – Defendant Nos. 4 and 5 purchased the property from Defendant No. 3, who had acquired it through a sale deed executed by Defendant Nos. 1 and 2 – The Court held that Defendant Nos. 1 and 2 could only alienate their own shares and could not transfer the plaintiff’s undivided share – Held: The purchasers did not acquire a valid title over the plaintiff’s share [Paras 9, 20].

Scope of Second Appeal – No Substantial Question of Law – Dismissal at Admission Stage – The appellants challenged the concurrent findings of the lower courts – The Court emphasized that a second appeal under Section 100 CPC is maintainable only if it involves a substantial question of law – Held: Since no substantial question of law arose, the second appeal was dismissed at the admission stage [Paras 15-23].

Relinquishment Deed – Absence of Proof – No Bar on Plaintiff’s Rights – The defendants claimed that the plaintiff had relinquished her share through an unregistered relinquishment deed executed at the time of her marriage – The Court found no evidence of such a document and held that the plaintiff retained her rights in the ancestral property – Held: The claim of relinquishment was not proved [Paras 19-20].