Taxation Law - Recovery of Interest and Penalty – Section 11A of the Excise Act – Applicability of Natural Justice – Petitioner challenged the freezing of its bank account and demand for interest and penalty on delayed payment of excise duty, claiming that no show cause notice or opportunity to explain the delay was provided – Held: Under Sections 11AA and 11AC of the Excise Act, the issuance of a show cause notice is mandatory before imposing penalty – Principles of natural justice are inherent in recovery proceedings under Section 11AA – The action of the respondents violated the principle of audi alteram partem, and the demand and penalty were quashed [Paras 6-9].

CAG Audit Report – Scope and Limitations – Findings in a CAG audit report cannot serve as the sole basis for recovery proceedings – An audit report can only form the basis for initiating assessment, which requires issuance of a show cause notice and compliance with procedural requirements under the Excise Act – Direct recovery based on an audit report is unsustainable [Paras 1, 7].

Freezing of Bank Account – Section 11(2) of the Excise Act – Validity – The respondents froze the petitioner’s bank account without completing the process of adjudication or issuing a speaking order – Held: The freezing of the petitioner’s account under Section 11(2) is illegal, as the demand was made without compliance with statutory provisions – Actions that violate natural justice principles are invalid [Paras 9-10].

Principles of Natural Justice – Show Cause Notice Requirement – A bare reading of Sections 11AA and 11AC reflects that natural justice principles, including the opportunity to be heard, are inherent in the recovery mechanism – No demand for penalty or interest can be made without first providing the assessee an opportunity to present its case [Paras 6-7].

Supreme Court Precedent – Applicability of Madhumilan Syntex Pvt. Ltd. – The Court relied on the Supreme Court judgment in Union of India v. Madhumilan Syntex Pvt. Ltd. (1988) 35 ELT 349, holding that recovery proceedings initiated without serving a show cause notice and affording an opportunity to be heard are bad in law [Paras 8-9].

Decision – Writ petition allowed – The respondents’ action of freezing the petitioner’s bank account and imposing interest and penalty without issuing a show cause notice or providing an opportunity for hearing is declared illegal – Recovery proceedings quashed, and the freezing order set aside [Paras 9-10].
 

Civil Law – Amendment of Pleadings – Proviso to Order 6 Rule 17 CPC – Rejection of Application for Amendment After Trial Commencement – Petitioner filed applications for amendment of plaints in two civil suits and a written statement in a counterclaim – Trial court dismissed applications on grounds of lack of due diligence and contradictory pleas – Held: Applications for amendment filed after framing of issues and commencement of trial are barred by the proviso to Order 6 Rule 17 CPC unless due diligence is demonstrated – Petitioner failed to show due diligence, and amendments sought introduced contradictory claims, impermissible under law – Revision petitions dismissed [Paras 8-13].

Proviso to Order 6 Rule 17 CPC – Bar on Amendments After Trial Commences – Issues in the consolidated suits were framed on 26.05.2023, and the trial had commenced with examination of witnesses – The proposed amendments, relating to facts within the petitioner’s knowledge at the time of filing the original pleadings, lacked due diligence – The plea of being a "layman unable to convey facts to counsel" was insufficient to satisfy the due diligence requirement under the proviso to Order 6 Rule 17 CPC – Trial court rightly held amendments to be barred by the proviso [Paras 12-13].

Contradictory Pleas – Inconsistency in Original and Amended Claims – In the first suit, petitioner asserted the mother was the owner of the property via a registered sale deed – In the second suit, petitioner claimed the property was purchased using funds inherited from the father – Proposed amendments introduced a new plea that the petitioner contributed funds to purchase the property, contradicting earlier assertions – Courts cannot allow amendments that fundamentally alter or contradict prior pleadings – Amendment rightly denied [Paras 13-14].

Alleged Delay Tactics – Revision Petitions Devoid of Merit – Petitioner, in possession of a portion of the disputed property, was found to be delaying resolution of suits filed in 2019 – Amendments sought were intended to delay proceedings and were unsupported by subsequent events or new material – Revision petitions dismissed as meritless [Paras 14-15].

Decision: Revision petitions dismissed – Trial court orders rejecting amendments upheld – Amendments found to be contrary to law, lacking due diligence, and aimed at delaying proceedings [Para 15].

Civil Law - Temporary Injunction – Maintainability of Appeal – Non-Compliance with Order 39 Rule 3 CPC – Appeal against an ex parte interim injunction issued by the Trial Court restraining the appellant from proceeding with a General Body Meeting to consider expulsion of the plaintiff/respondent No. 1 – Held: Appeal maintainable under Order 43 Rule 1(r) CPC, as the Trial Court failed to assign reasons for granting an ex parte injunction as mandated under Order 39 Rule 3 CPC – Observed that courts must exercise discretion cautiously when granting interim orders, particularly without notice to the opposing party, and must comply with statutory requirements [Paras 12-18].

Procedural Compliance – Recording of Reasons for Ex Parte Injunction – Order 39 Rule 3 CPC – The Trial Court, while granting the ex parte injunction, merely noted the materials on record without recording specific reasons for dispensing with notice to the opposite party – Held: Such an omission violates the statutory mandate under Order 39 Rule 3 CPC, which requires courts to explicitly state reasons why delay in granting the injunction would defeat its purpose [Paras 13-16].

Anticipatory Relief – Prematurity of Cause of Action – Membership Expulsion – Respondent No. 1 filed a suit anticipating ratification of his membership termination at a General Body Meeting scheduled for 29/11/2024 – Held: Relief sought by the respondent for declaration was premature as the General Body Meeting had not yet taken place, and no actionable grievance had crystallized – The Trial Court should have noted this while adjudicating the application for injunction [Paras 13, 18].

Decision: Appeal allowed – Ex parte injunction order set aside – Trial Court directed to reconsider the application on merits within 30 days – Interim order of this Court to remain in force until the Trial Court's decision [Para 19].
 

Quashing of FIR – Second FIR on Same Cause of Action – Abuse of Process of Law – The petitioner sought quashing of a second FIR, which was based on the same set of allegations as the first FIR – Held: The second FIR was illegal and unsustainable as it amounted to double jeopardy – Reliance placed on T.T. Antony v. State of Kerala, (2001) 6 SCC 181 – Second FIR quashed as it violated fundamental legal principles and was an abuse of process [Paras 6.4, 9-10].

Policy Amendment – Judicial Approval Already Upheld – No Cognizable Offense Disclosed – The amendment to the Punjab Foodgrains Labour and Cartage Policy 2020-21, alleged to be made with mala fide intent, had already been judicially reviewed and upheld by Division Benches of the Court – Held: The allegations lacked merit and disclosed no cognizable offense – FIR quashed [Paras 6.2-6.3, 6.5].

Misuse of Powers by Vigilance Bureau – Criminal Prosecution as Harassment – Launching of criminal prosecution based on a contractual matter under the guise of a criminal offense was held to be a misuse of power by the Vigilance Bureau – Court noted that the complaint was made by an unsuccessful bidder as an attempt to harass the petitioner – Held: Prosecution initiated against the petitioner was unwarranted and quashed [Paras 6.6-7].

Double Jeopardy – Successive FIR Not Permissible – The Court reiterated that successive FIRs based on the same transaction or cause of action are impermissible and amount to double jeopardy – Held: The second FIR violated the legal principles laid down in T.T. Antony v. State of Kerala and was quashed [Paras 6.4, 8].

Decision – Petition allowed – FIR No. 18 dated 22.09.2022, registered under Sections 120-B, 409, 420, 467, 468, and 471 of the IPC, and Sections 7, 8, 12, and 13(2) of the PC Act, along with all consequential proceedings, quashed as being an abuse of the process of law and violative of the prohibition on successive FIRs [Paras 9-12].
 

Production of Unrelied Statements – Section 91, Cr.P.C. – Permissibility – Respondents sought unrelied-upon statements of witnesses recorded under Section 161, Cr.P.C., claiming them to be essential for cross-examination of prosecution witnesses – Held: Statements recorded under Section 161, Cr.P.C., can only be used to confront the maker of the statement and not for any other purpose, as per the statutory bar under Section 162, Cr.P.C. – Special Judicial Magistrate’s order directing production without assessing relevancy, necessity, and desirability of the statements fails the test of legality – Direction set aside [Paras 31-39].

Production of Case Diary – Section 172, Cr.P.C. – Prohibition – Trial court directed production of the police case diary and status reports submitted to the High Court – Held: Case diary is not evidence and cannot be produced for any purpose other than specified under Section 172(3), Cr.P.C. – Status reports, being informatory in nature and part of the case diary, cannot be supplied to the accused unless the conditions of Section 172(3) are satisfied – Trial court’s directions quashed [Paras 40-42].

Desirability and Relevancy – Section 91, Cr.P.C. – Fishing Inquiry Barred – Trial court allowed applications under Section 91 without evaluating the relevancy, admissibility, and necessity of the statements and documents – Held: Section 91, Cr.P.C., does not permit a roving or fishing inquiry, and the trial court erred in mechanically allowing production of all statements/documents without individual assessment – Matter remanded for reconsideration [Paras 44-46].

Judicial Guidance – Reiteration of Legal Principles – Production of unrelied-upon statements/documents under Section 91, Cr.P.C., should be allowed only after assessing their relevancy and necessity – One-time opportunity to seek disclosure suffices – Repeated applications for disclosure can be denied if perceived as dilatory tactics – Relevant legal principles reiterated [Paras 27-29].

Decision – Impugned order dated 16.02.2019 quashed – Matter remanded to the trial court for reconsideration of applications dated 25.01.2019 and 31.01.2019 in light of legal principles – Trial court directed to decide within four weeks [Paras 47-48].
 

Criminal Law - Third-Party Objections in Criminal Proceedings – Locus Standi Clarified - The Court ruled that a third-party objector must demonstrate a bona fide connection to the cause of action to intervene in a criminal case. Mere past grievances with the accused do not confer the right to file objections under Section 301(2) CrPC or Section 339 BNSS. [Paras 8-10].

Definition of Victim Under Section 2(y) BNSS Act – Narrowly Construed - The Court held that the term "victim" under Section 2(y) of the BNSS Act refers to those who suffer loss or injury due to the specific act or omission forming the subject of the prosecution. Past disputes or unrelated grievances with the accused are insufficient to establish victim status for the current proceedings. [Para 10].

Floodgate of Litigation Concern – Judicial Safeguard Emphasized - Allowing individuals with past disputes to intervene in unrelated cases against the same accused would lead to unmanageable litigation. The Court emphasized the need for a direct nexus to the cause of action to prevent misuse of legal remedies. [Para 11].

Reliance on Precedents – Objector’s Locus Standi Unsupported - The Court referred to Amanullah and Anr. v. State of Bihar and Ors. (2016 6 SCC 699), affirming that objections must be justice-oriented and supported by a genuine connection to the case at hand. The objector’s claims failed to meet this standard. [Para 9].

Decision – Application Dismissed - The objection under Section 301(2) CrPC and Section 339 BNSS was dismissed for lack of locus standi. The objector, having no nexus with the current cause of action, could not be permitted to intervene. [Para 12].

Constitutional Law – Right to Liberty – Habeas Corpus – Arrest and Remand – Petitioner challenged the arrest and judicial remand of his son (detenue) under Sections 61(2), 196, 352, 353(2) of BNSS and Section 67 of the IT Act – Grounds of arrest allegedly not furnished in writing as mandated under Article 22(1) of the Constitution and Supreme Court’s judgment in Prabhir Purkayastha v. State (NCT of Delhi) – Magistrate remanded the detenue to judicial custody without applying mind to the applicability of certain provisions of law – Writ of Habeas Corpus filed alongside bail proceedings – Held: Failure to serve grounds of arrest invalidates the arrest and remand order if established – However, remand report containing case details fulfills the requirement of “grounds of arrest” – Writ dismissed with liberty to pursue statutory remedies [Paras 39-72].

Maintainability of Habeas Corpus – Post-Remand Judicial Review – Petitioner argued remand order passed mechanically, making writ maintainable – Respondents contended statutory remedies precluded writ jurisdiction after remand – Held: Habeas Corpus is maintainable against a mechanical remand order or one lacking jurisdiction – Remand by Magistrate must reflect application of mind to prima facie applicability of invoked legal provisions – Magistrate’s satisfaction regarding arrest compliance scrutinized [Paras 31-49].

Grounds of Arrest – Constitutional Mandate – Arresting authority required to serve specific grounds of arrest in writing – Magistrate’s record of compliance through Section 47 BNSS notice and remand report examined – Held: Notice under Section 47 BNSS lacked requisite specificity, but remand report detailing allegations sufficed to inform detenue and meet constitutional standards for arrest communication [Paras 44-71].

Applicability of Provisions – Mechanical Application – Sections 111 and 308(5) of BNSS invoked by police – Petitioner argued these provisions were inapplicable as preconditions for their use were unmet – Magistrate failed to verify applicability – Held: Mechanical application of inapplicable provisions vitiated remand order – However, issue of sufficiency of allegations left for further proceedings [Paras 47-49, 54].

Victim’s Right to Participation – Presence of Complainant in Writ – Respondents argued complainant’s absence after withdrawal of writ against them invalidated challenge to arrest and remand – Held: Complainant’s absence not fatal to habeas corpus proceedings where procedural compliance is at issue – Scope of writ confined to examining legality of arrest and remand [Paras 50-53].

Decision – Writ Dismissed – Arrest upheld based on compliance with constitutional requirements through remand report – Magistrate’s remand order found to lack sufficient application of mind but upheld pending further proceedings – Petitioner granted liberty to pursue statutory remedies, including bail or quashing of proceedings [Paras 71-72].

Section 138 NI Act – Impact of Moratorium under Section 14 IBC – Proceedings Quashed - The Court held that once a corporate debtor enters Corporate Insolvency Resolution Process (CIRP) and a moratorium under Section 14 of the IBC is imposed, the control and management of the debtor’s accounts vests in the Interim Resolution Professional (IRP). Consequently, individuals, including directors and authorized signatories, cannot be held vicariously liable for cheque dishonor as they are no longer responsible for the company’s affairs. [Paras 8-10, 12].

Ingredients of Section 138 NI Act – Non-fulfillment Due to IBC Moratorium - The dishonor of the cheques occurred post imposition of the moratorium, rendering the cheques incapable of being lawfully presented or honored. Thus, the essential elements constituting an offence under Section 138 NI Act were not satisfied. [Paras 12-13].

Jurisdictional Precedent – Proceedings Against Individuals Under Section 138 Barred Post CIRP - The Court relied on Govind Prasad Todi & Anr. v. Govt. of NCT of Delhi & Anr., which clarified that Section 138 proceedings against individuals cease upon commencement of CIRP and appointment of the IRP. The management and operation of accounts become the exclusive responsibility of the IRP. [Para 11].

Decision – Summoning Orders Quashed - The summoning orders and all consequential proceedings under Section 138 NI Act were quashed. The petitions were allowed, reiterating the non-liability of the petitioners due to the statutory provisions of the IBC. [Paras 13-14].
 

Criminal Law – NDPS Act – Quashment of Proceedings – Denied – NDPS Act – Recovery of Contraband – Absence of Mentioned Quantity – Petitioner (A2) sought quashing of proceedings in CC No. 74 of 2023 under Section 482 CrPC – Contraband (10 small packets of Ganja leaves and ₹9,750) was allegedly recovered from the petitioner at the crime scene – FIR, seizure mahazar, and final report failed to specify the exact quantity of contraband seized from the petitioner – Court held that the absence of exact quantity did not vitiate the prosecution at the threshold, as the determination of charges and statutory compliance falls within the trial court's purview [Paras 12–18].

Statutory Compliance – NDPS Act Sections 52(A) and 55 – Alleged Violation – Petitioner contended that the contraband remained in police custody for over three years before being sent for sampling, violating statutory safeguards – Court observed that while delay was unexplained, the absence of specific mention of quantity in the records rendered the challenge under Sections 52(A) and 55 premature – Compliance and procedural lapses must be adjudicated at trial [Paras 14, 22–24].

Evidentiary Issues – Applicability of Precedents – Petitioner relied on Supreme Court judgments (Noor Aga v. State of Punjab [(2008) 16 SCC 417]; Union of India v. Mohanlal [(2016) 3 SCC 379]) and a Delhi High Court judgment (Kashif v. Narcotics Control Bureau [Bail Appln. 253/2023]) – Court noted that the applicability of these rulings to Tamil Nadu was disputed due to specific procedural directives in the state – Trial court was deemed appropriate to evaluate procedural lapses and evidentiary impact [Paras 21–24].

Trial and Evidence – Premature Invocation of Section 482 CrPC – The Court emphasized that whether the case involved small or commercial quantities of Ganja, the framing of charges, and the determination of statutory violations required evidence-based evaluation at trial – Quashing under Section 482 CrPC was deemed inappropriate at this stage [Paras 19–25].

Decision: Criminal original petition dismissed – Proceedings to continue in CC No. 74 of 2023 – Petitioner’s complicity to be assessed during trial – Connected miscellaneous petitions also dismissed [Paras 25–26].