Arbitration – MSMED Act – Commercial Dispute – Supply of Goods – Dispute over unpaid dues under three purchase orders raised by micro enterprise Ranjana Industries against Mahindra – Mahindra raised objections of late delivery and quality defects – Held: Objections not raised within statutory 15-day window under Section 2(e) of MSMED Act – Arbitral Tribunal rightly treated delivery as deemed accepted – No proof of return or rejection of goods shown – Finding upheld [Paras 2–16, 27–38, 44–48].

Arbitration – Scope of Judicial Review under Sections 34 & 37 – Concurrent findings of Arbitral Tribunal and District Court held not perverse or contrary to fundamental policy – Appellate court cannot reappreciate evidence – Mahindra’s claims of defects, rejection and counter-claim for damages not substantiated with proof – No ground to interfere under Section 37 – Appeal dismissed [Paras 39–41, 49–50].

Micro, Small and Medium Enterprises (MSME) – Protection of Small Suppliers – MSMED Act provides statutory framework to ensure timely payments – 15-day deadline for objections mandatory, not directory – Mahindra’s conduct amounted to unfair delay and frustration of statutory entitlements of micro supplier – Held: Deadline under Section 2(e) has substantive legal consequences including accrual of interest under Section 16 [Paras 45–46].

Evidence – Onus of Proof – Rejection of Goods – Onus on Mahindra to prove that goods were defective and returned – No debit notes, return challans, or payment proof for alternate vendor produced – Tribunal’s inference that goods were accepted and used is reasonable and based on preponderance of probability [Paras 19, 33–36, 38–39].

Corporate Litigation – Abuse of Process – Cost and Conduct – Court criticises Mahindra’s continued litigation despite two concurrent findings – Notes power asymmetry between large corporates and micro enterprises – Cost of litigation treated as “miscellaneous expense” by Mahindra – Interest and deposit provisions under MSMED Act meant to deter such conduct – Mahindra directed to pay Rs. 1.5 lakh as costs and release deposit [Paras 51–54].

Decision: Appeal dismissed – Arbitral Award and District Court order upheld – Mahindra directed to pay Rs. 16,16,950 with interest under Sections 15 & 16 of MSMED Act within one month – Costs of Rs. 1.5 lakh to be paid to Respondent within four weeks – Deposit to be released to Respondent [Paras 50–52].

Taxation Law - Goods and Services Tax – Cross-Empowerment – Jurisdiction of CGST Officers – Petitioners assigned to State Tax Authorities challenged issuance of show cause notices by Joint Commissioner, CGST – Held: Section 6(1) of CGST Act provides inherent and automatic cross-empowerment to officers of Centre and States – Notification required only when conditions are imposed – No notification necessary for activation of jurisdiction – Clarified by CBIC circular dated 22.06.2020 and upheld in Armour Security India Ltd. – Objection on jurisdiction rejected [Paras 14–32, 38].

GST – Intelligence-Based Enforcement – Petitioners alleged to have availed fraudulent ITC through paper transactions among 12 firms in a single textile park – Searches conducted and evidence revealed paper turnover without actual supply – Held: Intelligence-based action is valid ground for CGST initiation irrespective of administrative allocation – Central authority not barred from initiating action – Show cause notice upheld [Paras 4–6, 37–42].

CGST – Competence of Joint Commissioner – Petitioners argued that Joint Commissioner could not issue show cause notice for demand < Rs.1 crore – Held: Section 5(2) of CGST Act authorises senior officers to exercise powers of subordinate officers – Circular dated 09.02.2018 merely administrative – Joint Commissioner is competent to issue notice regardless of amount involved [Paras 34–36].

GST – Bunching of Multiple Financial Years – Petitioners challenged issuance of a single show cause notice for five assessment years – Held: No express bar under Section 74 against such bunching – Issue left open for adjudication by authority concerned – No interference at notice stage [Para 33].

GST – Enforcement vs Audit – Distinction clarified – Enforcement actions based on intelligence not restricted by administrative allocation – Dual proceedings not permitted on same subject matter – Intelligence-based proceedings may be initiated by either authority – Reaffirmed through Supreme Court’s ruling in M/S Armour Security India Ltd. v. Commissioner CGST Delhi East, 2025 INSC 982 [Paras 38–41].

Decision: Petitions dismissed – Section 6(1) of CGST Act provides for automatic cross-empowerment – Show cause notices valid and within jurisdiction of CGST authorities – Petitioners free to raise other defences before adjudicating authority – Interpretation of Section 6 conclusively decided; other issues left open [Para 42].

Labour Law – Unfair Labour Practice – Continuous Engagement for Over 9 Years – Denial of Permanency – Petitioners employed as Firemen and Drivers by Malegaon Municipal Corporation since 2016–17 on six-month contracts – Worked uninterruptedly, with only technical breaks – Corporation admitted continuous engagement but denied permanency citing financial constraints and staffing pattern guidelines – Industrial Court dismissed ULP Complaints citing establishment expenditure exceeding 35% ceiling – Held: Long-term engagement of workmen in essential services on daily wages amounts to unfair labour practice – Continuous temporary employment with artificial breaks amounts to exploitation – Corporation’s justification based on financial limits and staffing constraints rejected [Paras 6–14, 17–18, 21–22].

Constitutional Law – Article 14 and 21 – Arbitrary Termination During Pendency of Writ Petition – Petitioners' services were terminated on 02.07.2025 during pendency of writ petitions despite prior ad-interim protection – Held: Action of Corporation is arbitrary and high-handed – Termination orders quashed – Petitioners entitled to reinstatement with continuity and backwages – Fundamental rights to equality, fairness, and dignity in public employment violated [Paras 14, 18, 28–29].

Public Employment – Essential Services – Scope of Regularisation – Drivers and Firemen held to be part of essential service cadre – Corporation’s failure to absorb them into sanctioned posts despite staffing approvals since 2016–17 amounts to systemic neglect and inequity – Reliance on GR clause regarding 35% expenditure cap held to be insufficient to deny permanency – Reference made to SC’s rulings in Dharam Singh, Shripal, and Jaggo cases affirming protection of long-serving ad-hoc workers against exploitation [Paras 12, 20–25].

Industrial Law – Evidence and Burden of Proof – No Rebuttal by Employer – Petitioners led documentary and oral evidence proving continuous engagement and discharge of regular duties – Corporation failed to rebut evidence or show valid justification – Labour Court’s dismissal of complaints solely on administrative grounds unsustainable – Held: Petitioners entitled to permanency and benefits under MRTU & PULP Act [Paras 15–17, 24–25].

Decision:

Writ Petitions allowed – Impugned orders dated 06.05.2025 and termination orders dated 02.07.2025 quashed – Petitioners directed to be reinstated within one week with continuity in service, backwages from 02.07.2025, and all benefits of permanency from date of judgment [Paras 27–30].

Judicial Service – Premature Retirement – Validity of Notification – Petitioner, serving as Additional District Judge, prematurely retired at age 53 under Rule 21 of Gujarat State Judicial Service Rules, 2005 – Challenge on ground that Notification issued without Governor’s personal satisfaction and instead based on recommendation to Government – Held: As per Articles 163 and 166 of Constitution and relevant business rules, orders issued in the name of Governor by authorized officers are valid – No illegality found in issuance of Notification [Paras 19-31]

Judicial Review – Scope and Limits – High Court’s administrative recommendation based on Committee report assessing petitioner’s service record from 2001 to 2015 – Performance recorded as ‘just adequate’ or ‘adequate’ in several years and ‘poor’ in one quarter – Petitioner’s challenge to one ‘poor’ entry rejected – Held: Premature retirement is based on subjective satisfaction – No malafide, procedural breach, or absence of material found – No ground for judicial interference made out [Paras 32-35]

Natural Justice – Applicability – Petitioner’s plea for opportunity of hearing before compulsory retirement rejected – Held: Compulsory retirement is not a punitive action – Principles of natural justice not applicable – Even one adverse or uncommunicated entry may justify retirement in public interest [Paras 33-34]

Governor’s Role – Interpretation of Rule 21 – Petitioner’s argument that the recommendation must be addressed to the Governor personally held untenable – Held: Governor acts on aid and advice of Council of Ministers under Article 163 – Decision by High Court was forwarded to State Government in accordance with established procedure – No deviation from constitutional or statutory mandate [Paras 19-31]

Integrity and Standards of Judicial Officers – Court reaffirmed the high standards expected from members of the judiciary – Administrative Committee and Full Court entitled to assess overall performance and reputation of judicial officers and act in public interest – Held: Courts cannot interfere unless the decision is arbitrary, mala fide or based on no material [Paras 34-35]

Decision: Writ petition dismissed – Impugned Notification dated 18.07.2016 upheld – Rule discharged – No order as to costs.

Civil Law - Property Dispute – Real Brothers – Terrace and Toilet Usage – Injunction Upheld – Parties are real brothers who separately purchased different floors of the same house – Plaintiff/respondent purchased second floor with terrace rights – Petitioners/defendants purchased first floor – Dispute arose over usage of second-floor terrace and toilet – Appellate court restrained petitioners from interfering with respondent’s possession – High Court upheld appellate order, relying on sale deed recitals explicitly granting terrace rights to second-floor owner – Observed: Until final adjudication, possession of terrace shall remain undisturbed [Paras 1–20].

Civil Procedure – Interim Injunction – Possession Rights Pending Suit – Valid Restraint – Though both parties claimed usage of disputed area, the court held that interim protection was warranted in favour of the party having express terrace rights – Held: Prima facie title and peaceful possession are sufficient for ad interim injunction – Construction during pendency disallowed – Status quo ante to be restored [Paras 17–20].

Sale Deed Interpretation – Express Clause – Terrace Rights Recognised – Sale deed of second floor explicitly included “entire second floor with terrace rights” – No such clause in sale deed of first floor – Court held that express recital must be given effect unless rebutted through trial – Injunction granted accordingly [Para 18–19].

Equity – Family Dispute – Direction for Expeditious Trial – Court noted the dispute between siblings and potential escalation – Directed trial court to expedite proceedings and ensure no change to property status meanwhile – Emphasised restraint on both parties from altering structure or denying access for essential needs (e.g., water tank maintenance) [Para 20].

Decision: Revision petitions dismissed – Injunction order of Additional District Judge upheld – Petitioners restrained from interfering with respondent’s possession of second-floor terrace and toilet – Any construction raised post-injunction to be removed – Trial court directed to decide suit expeditiously without being influenced by present observations

Civil Law – Local Commissioner – Order XXVI Rule 9 CPC – Improper Rejection – Appointment Directed – Trial court dismissed plaintiff's application seeking appointment of Technical Engineer as Local Commissioner to demarcate disputed wall and report physical condition – Held: Though appointment of Commissioner is discretionary, such discretion must advance cause of justice – Where real controversy relates to physical features or encroachment, court must allow factual verification – Refusal to appoint Local Commissioner stifles adjudication of real issue – Impugned order set aside – Trial court directed to appoint Commissioner for inspection and report [Paras 1–10].

Constitution of India – Article 227 – Superintendence Over Subordinate Courts – Interference Justified – High Court invoked supervisory jurisdiction under Article 227 to correct error committed by trial court in refusing crucial procedural aid for just determination – Held: Interference under Article 227 warranted to prevent failure of justice and facilitate effective adjudication [Paras 6–10].

Commissioner Report – Scope – Not to Determine Possession or Title – Court clarified that Commissioner is to report physical condition only and not express opinion on possession or rights – Appreciation of report lies with the court – Purpose is to aid adjudication, not to substitute judicial evaluation [Para 6].

Decision: Civil Revision allowed – Impugned order dated 04.07.2024 set aside – Trial court directed to appoint Local Commissioner to inspect site and report existing physical condition – Pending miscellaneous applications also disposed of.

Service Law – Adverse Remarks in ACR – Judicial Review – Appellant, a police officer, challenged adverse remarks in his ACR for 2019–2020 describing him as “Not Reliable” and “Doubtful Honesty” – Trial court decreed suit for expungement, but first appellate court reversed decree – High Court upheld appellate judgment – Held: Adverse remarks were supported by material including findings in departmental inquiry and viral video evidence – Appellant was given full opportunity to represent and explain – No evidence of mala fides or procedural violation – Judicial interference in ACR not warranted [Paras 6–11]

Departmental Proceedings – Principles of Natural Justice – Challenge to Adverse Entries – Appellant received multiple punishments including stoppage of increments and censure – Contention that principles of natural justice were not followed was rejected – Representation against ACR was duly considered and dismissed via reasoned order – Held: Due process was followed, and bias not established – ACR remarks justified [Paras 6–10]

Reliability and Honesty – Discretion of Reporting Officer – Use of descriptors such as “Doubtful Honesty” and “Not Reliable” in ACR – Justified based on material evidence and conduct history – FIR quashed on compromise does not negate administrative findings or misconduct – Held: Reporting officer’s evaluation falls within domain of administrative discretion unless shown to be arbitrary or malafide, which was not the case here [Paras 9–10]

Decision: Appeal dismissed – Judgment and decree of District Judge, Kurukshetra dated 12.07.2024 upheld – No interference warranted with adverse ACR remarks.

Criminal Law – NDPS Act – Ganja Seizure – Enhancement of Sentence – Respondent found in alleged possession of 1.7 kg of Ganja – Seizure included seeds and leaves – FSL Report confirmed presence of flowering tops but also noted seeds and leaf matter – Held: Under Section 2(iii)(b) of NDPS Act, Ganja excludes seeds and leaves unless accompanied by flowering or fruiting tops – Absence of clear separation renders seizure weight questionable – Prosecution failed to prove quantity was above “small quantity” threshold [Paras 15-17, 22].

Sentencing – Principles – Section 377 Cr.P.C. – State Appeal on Ground of Inadequate Sentence – Trial court had sentenced accused to 1 year RI and fine, both complied with – Court reiterates settled law that appellate courts should interfere with sentencing discretion only in exceptional cases – Refers to Bed Raj v. State of U.P. – Held: Sentence imposed was not shockingly disproportionate and consistent with evidence – No ground for enhancement [Paras 1, 3.1, 23].

NDPS Act – Presumption of Possession – Burden of Proof – Alleged seizure occurred from premises under construction – Labourers present at site – Ownership and exclusive possession not proved – Accused explained house belonged to father and was under renovation – Held: Exclusive conscious possession of larger quantity not established beyond doubt – Conviction under consumption and lesser quantity held appropriate [Paras 6, 20-22].

Criminal Trial – Witness Testimony – Panch Witnesses Turned Hostile – Prosecution relied on police witnesses and FSL – Court noted contradictions and absence of corroboration from independent witnesses – Held: Trial court rightly considered benefit of doubt while determining sentence and acquitting co-accused [Paras 10-14, 21].

Sentencing Policy – Proportionality and Deterrence – Court referred to State of Rajasthan v. Mohan Lal, Soman v. State of Kerala, and Alister Anthony Pareira – Held: Sentence must balance gravity of offence, intent, and societal impact – In present case, imprisonment already undergone with fine paid found proportionate [Paras 3, 11-14].

Decision: Appeal dismissed – Sentence of 1-year rigorous imprisonment and fine of ₹15,000 upheld – No enhancement warranted – Accused had already served full sentence and paid fine – Sentence found proportionate and consistent with facts and legal standards [Para 23].

Anticipatory Bail – Forged Judicial Summons – Circulation via WhatsApp – Petitioner sought pre-arrest bail in FIR alleging conspiracy with co-accused to create and circulate forged summons purporting to be issued by Court of Additional Sessions Judge, Hisar, demanding ₹10 lakh as “maintenance” – Co-accused’s disclosure and recovered WhatsApp screenshots indicated petitioner’s active role – Held: Allegations strike at sanctity of justice system and public confidence in judiciary – Grant of anticipatory bail would impede investigation – Petition dismissed [Paras 2, 8–13].

Criminal Law – Custodial Interrogation – Necessity and Scope – Court relied on State v. Anil Sharma, (1997) 7 SCC 187 – Held: Custodial interrogation is qualitatively distinct and necessary to trace digital origin of forged summons, devices used, and wider conspiracy – Mere argument of “no need for custodial interrogation” not by itself a ground to grant pre-arrest bail [Paras 11–12].

Forgery of Judicial Process – Public Interest and Judicial Sanctity – Forging and circulating fake court summons undermines public trust in judicial institutions – Even compromise between parties cannot dilute gravity of such offence – Judicial institutions must respond firmly to preserve public faith in administration of justice [Paras 9–10].

Compromise Between Parties – Irrelevance in Offences Against Justice System – Settlement between complainant and accused held immaterial – Such offences transcend individual disputes and affect institutional credibility – Compromise cannot justify pre-arrest protection in cases of judicial impersonation [Para 9].

Prima Facie Case – Material Evidence – Disclosure statement of co-accused, recovery of screenshots showing petitioner’s number and chats, and corroborative material established prima facie involvement – False implication plea rejected as defence issue to be tested at trial [Paras 11–12].

Decision:
Anticipatory bail denied – FIR discloses grave offence involving forgery of judicial summons and impersonation of court authority – Custodial interrogation required to trace conspiracy and digital evidence – Petition dismissed – Observations confined to bail stage only [Paras 13–14].