Criminal Law – Quashing - Section 138 of the NI Act  - Vicarious Liability of Non-Signatory Directors – Liability Under Section 141 NI Act – Petition Dismissed – The petitioner, a company director, sought quashing of a summoning order under Section 138 NI Act, contending she had no role in financial transactions or issuance of the dishonored cheque. Held: Under Section 141 NI Act, vicarious liability extends to all individuals in charge of a company’s operations. Here, the petitioner failed to provide conclusive evidence negating her involvement. Summons upheld on the grounds that the complainant’s averments and the petitioner’s role as one of three directors in the accused company warranted trial on responsibility for company affairs, despite her non-signatory status [Paras 16-17, 69:15].

Principles for Quashing Proceedings under Section 482 CrPC – High Threshold for Quashing – Emphasizing caution in quashing at preliminary stages, the Court applied precedents from S.P. Mani & Mohan Dairy v. Snehalatha Elangovan and Zandu Pharmaceutical Works Ltd. v. Mohd. Sharaful Haque. The Court ruled that quashing requires clear, incontrovertible evidence proving the director’s lack of involvement, which was absent here [Paras 10-14, 69:8].

Decision: The petition is dismissed. The High Court ruled that the trial court’s summoning order should stand, allowing the petitioner’s role and responsibility in company affairs to be assessed at trial. The petitioner’s inability to provide unassailable proof of non-involvement barred quashing at this stage.
 

Dishonor of Cheque – Acquittal - Presumption Under Section 139 NI Act – Leave to Appeal Denied – The petitioner appealed an acquittal in a Section 138 NI Act case, asserting that the respondent issued a dishonored cheque to repay a loan. Held: Section 139 of the NI Act creates a presumption in favor of debt or liability. However, this presumption is rebuttable, and the accused need only raise a defense on the balance of probabilities. The trial court found credible inconsistencies in the petitioner’s financial capacity, deeming her claim improbable and allowing the respondent to rebut the presumption sufficiently, leading to acquittal [Paras 6-8].

Financial Capacity and Rebuttal of Presumption – Burden of Proof – Referencing Basalingappa v. Mudibasappa and Rajaram Through LRs v. Maruthachalam Through LRs, the Court emphasized that an accused can counter the presumption under Section 139 by presenting a probable defense or challenging the complainant's financial capacity. The respondent successfully highlighted discrepancies in the petitioner’s evidence, raising a plausible defense that negated the presumption of liability without needing to establish conclusive proof [Paras 9-10].

Scope of Appellate Review on Acquittal – Section 378(4) CrPC – The Court affirmed that revisional jurisdiction demands restraint in appeals against acquittal, barring evidence of perverse findings. The trial court’s findings were grounded in a rational assessment of the petitioner’s claims and did not warrant appellate interference, upholding the respondent’s acquittal [Para 11].

Decision: The petition is dismissed. The High Court upheld the trial court's acquittal, finding that the respondent had successfully rebutted the presumption under Section 139 NI Act. Consequently, the court denied leave to appeal, concurring with the trial court’s assessment of the petitioner’s inconsistent evidence.

Criminal Law - Criminal Conspiracy – Standard of Proof – Acquittal of Accused – The prosecution’s case alleged a conspiracy to facilitate a jailbreak by smuggling explosive materials into Burail Jail. Witnesses turned hostile, key incriminatory evidence such as communication devices were unrecovered, and contradictions in arrest dates created doubt. Held: Prosecution failed to establish the conspiracy beyond a reasonable doubt, warranting acquittal for multiple co-accused [Paras 16-20, 47].

Section 27, Indian Evidence Act – Disclosure Statements and Recoveries – Legal Standards for Credibility – The court assessed the evidentiary value of disclosure statements and recoveries under Section 27 of the Evidence Act. It held that while disclosure statements led to explosive material recovery, inconsistencies regarding arrest timing discredited the prosecution’s evidence. Held: Disclosure statement's evidentiary value was diminished, leading to acquittal [Paras 42-43].

Explosive Substances Act, Sections 4, 5, and 6 – Applicability of Charges – Conspiracy and Incrimination – Without credible witness corroboration or recovery of alleged conspiratorial devices, charges under Sections 4, 5, and 6 of the Act were unsubstantiated. Held: Accusations of explosive-related offenses under the Act remained unproven, justifying acquittal on these grounds [Para 22].

Forgery – Handwriting Evidence – Conviction Upheld – Accused Balwinder Singh was charged with forgery (Section 468, IPC) for using a false identity in prison registers. A handwriting expert’s report confirmed matching signatures, and no contrary evidence was presented by the defense. Held: Conviction under Section 468 was upheld based on credible handwriting evidence [Para 49].

Decision  – Acquittal and Dismissal of Appeal – The court dismissed the appeal filed by U.T. Chandigarh seeking the conviction of all accused and upheld the acquittal of various respondents. It also dismissed the appeal of Balwinder Singh, affirming his conviction under Sections 419, 468, and 471 IPC [Paras 50-51].

Jurisdiction of Telangana Women’s Commission – Validity of Summons – Writ Petition Dismissed – The petitioner, an astrologer, challenged the summons issued by the Telangana State Women's Commission following a complaint by the Telugu Film Journalists Association. The complaint alleged that the petitioner’s predictions about women celebrities were defamatory and derogatory. Held: Under Section 16(1)(b) of the Act, the Commission is empowered to issue summons based on information concerning unfair practices against women, without requiring a preliminary investigation when acting on information from an external source. The summons was deemed procedurally valid as the Commission acted within its statutory powers [Paras 15-18, 21].

Non-Mandatory Preliminary Investigation Under Section 16(1)(b) – Discretionary Power of the Commission – Citing the judgments in N. Mani v. Sangeetha Theatre and B.S.E. Brokers’ Forum v. SEBI, the Court held that an error in citing the correct statutory provision does not invalidate action if the statutory power exists. Here, no preliminary investigation was required, as the complaint fell under Section 16(1)(b), permitting the Commission to proceed based on external information [Paras 10, 16, 20].

Limitations on Challenging Show-Cause Notices – Relying on Union of India v. Kunisetty Satyanarayana, the Court emphasized that judicial intervention is generally premature in cases involving show-cause notices unless a fundamental right is infringed. The writ petition was dismissed on grounds that procedural compliance by the Commission sufficed to sustain the summons, rendering the petitioner’s objections premature [Para 22].

Decision:

The petition is dismissed. The Court upheld the Telangana Women’s Commission’s authority to issue summons, directing the Commission to provide the petitioner with a copy of the complaint and proceed per statutory requirements and natural justice principles. Interim relief granted earlier is vacated.

Compassionate Appointment – Eligibility of Married Daughter – Petition Dismissed – The petitioner, a married daughter, sought compassionate appointment following her brother’s death in harness. The Tribunal had denied her application, ruling that as a married daughter, she was ineligible under the rules in effect at the time of her brother’s death. Held: The compassionate appointment scheme is regulated by the 1996 Karnataka Civil Services Rules, which did not recognize married daughters as eligible dependents at the relevant time. Amendments extending eligibility to married daughters in 2021 apply prospectively, and therefore cannot grant rights retroactively. The Tribunal’s reliance on this interpretation was upheld [Paras 2-2.3, 3].

Prospective Application of Amendments in Compassionate Appointment Rules – The Court referenced Hitendra Vishnu Thakur v. State of Maharashtra, emphasizing that substantive law changes affecting eligibility must be applied prospectively unless explicitly stated otherwise. The petitioner’s claim that the 2021 amendment should apply retrospectively was rejected, as compassionate appointments are exceptions to equality and only apply within the rule framework active at the time of the death in harness [Paras 2.2, 3].

Public Policy and Judicial Restraint in Expanding Definitions for Compassionate Grounds – Citing prior Karnataka High Court decisions in Mrs. Megha J v. LIC of India and Smt. Priyanka Halamani v. The State of Karnataka, the Court underscored that compassionate appointments are a policy matter and not a right. Judicial expansion of eligibility to include married daughters beyond legislative intent would infringe on legislative domain [Para 2.4].

Decision: The writ petition is dismissed. The High Court upheld the Tribunal’s decision denying compassionate appointment, ruling that eligibility is determined by the rules at the time of the employee’s death. The subsequent rule amendment extending eligibility to married daughters cannot apply retroactively.

POCSO Act – Credibility of Minor Victim's Testimony – Sufficiency of Sole Testimony – The Trial Court questioned the credibility of the child victim’s statements due to minor contradictions and presumed tutoring – On appeal, the High Court found the victim’s statements under Section 164 Cr.P.C. and in court to be consistent, detailed, and free from contradictions – Held: Child victim’s consistent testimony alone suffices for conviction in sexual assault cases, negating the presumption of innocence established by acquittal [Paras 5-8, 11-14].

Appellate Review of Acquittal – Reversal Criteria – The High Court clarified its appellate powers in reversing acquittals, emphasizing that it must only interfere if the lower court’s findings are perverse or against the evidence weight – Held: Trial Court’s findings disregarded the consistency of key witness testimony and thus warranted reversal to prevent miscarriage of justice [Paras 21-24].

POCSO Conviction Adjustment – Reclassification to Sexual Assault under Section 7 – While upholding the charge, the High Court observed no evidence of penetrative assault, modifying the conviction to sexual assault under Section 7, POCSO Act, with corresponding penalties under Section 8 [Paras 29-32].

Decision: The appeal is allowed. The Trial Court’s acquittal is set aside, and the respondent is convicted under Section 7 of the POCSO Act, with sentencing to be addressed subsequently.
 

Criminal Law - Section 307 IPC – Acquittal Set aside - Requirement of Grievous Injury – Not Essential – The trial court's view that grievous injury is an essential requirement for conviction under Section 307 IPC is incorrect – Held: To convict under Section 307 IPC, it is not necessary that the injury should be capable of causing death. The intent or knowledge with which the act was committed and overt acts demonstrating such intent are sufficient. The evidence showed repeated assaults by the respondents, supporting a conviction under Section 307 IPC [Paras 33-38].

Assessment of Medical and Eyewitness Evidence – Consistent Testimonies – The trial court erred in overlooking the consistent and credible testimonies of the informant and supporting witnesses – Held: The informant's testimony, corroborated by medical evidence (Exhibit-2), confirmed repeated blows and significant injuries. The minor discrepancies did not affect the overall credibility of the prosecution's case [Paras 20-27].

Nature of Injury – Impact on Conviction – Even Simple Injuries Sufficient – The informant's injuries were simple yet inflicted with a weapon capable of causing serious harm (farsa) – Held: The use of a potentially lethal weapon and the infliction of repeated blows indicate an intention that satisfies Section 307 IPC. The nature of the injuries alone is not decisive [Paras 16, 33-38].

Compensation to Victim – Section 357 CrPC – Courts' Duty – The trial court failed to award compensation to the victim despite a conviction under Sections 323, 341, 447/34 IPC – Held: Awarding compensation is a duty of the court to ensure victim relief. The appellant is entitled to compensation from the convicted respondents [Paras 43-45].

Appellate Review – Conviction for Lesser Offences – Court's Role – The appellate court can review and modify judgments when the evidence on record supports a higher conviction – Held: The respondents' actions warranted conviction under Sections 307 and 324 IPC. The trial court's acquittal for these charges was set aside [Paras 39-42].

Decision: The trial court's acquittal of the respondents for offences under Sections 307 and 324 IPC was overturned. Respondent No. 2 was convicted under Sections 307/34 and 324 IPC, and Respondent Nos. 3 and 4 were convicted under Section 307/34 IPC. The appeal was allowed to this extent. The respondents were taken into custody, and the case was scheduled for sentencing and compensation orders on 30/10/2024 [Paras 46-49].
 

Taxation Law - Faceless Scheme of Assessment – Legislative Intent and Evolution – With the advent of technological advancements, the Revenue aimed to modernize the tax assessment process by reducing direct taxpayer-officer interaction to prevent undesirable practices – Budget Speech 2019 underscored these issues, advocating for the faceless scheme to enhance transparency and efficiency – The scheme was formalized with the E-assessment Scheme, 2019 and expanded through amendments in 2020 and the Finance Act 2022, which included reassessment and recomputation under Sections 143(3), 144, and 147 [Paras 46-54].

Technological Infrastructure – RMS, CASS, and Insight Portal – The Revenue implemented sophisticated data tools like RMS, CASS, AIR, and Insight Portal to aggregate, cross-check, and analyze taxpayer information – RMS used for automated case selection based on risk parameters to minimize human bias – Insight Portal provided JAOs with comprehensive data for informed preliminary evaluations [Paras 57-64].

JAO's Concurrent Jurisdiction and Role – Despite the faceless assessment framework, the Jurisdictional Assessing Officer (JAO) retains concurrent jurisdiction – This allows the JAO to verify data and initiate reassessment based on gathered information – Sanjay Gandhi Memorial Trust case reinforced that the JAO's powers coexist with NFAC’s automated system, ensuring comprehensive assessments [Paras 82-85].

Reassessment Procedure – Beyond Faceless Allocation – The reassessment process under Sections 147, 148, and 148A involves JAO's discretion to act on data from RMS, audit reports, or court directives – The Gujarat High Court in Talati and Talati LLP confirmed that the JAO’s role in initiating reassessment is essential and distinct from the automated allocation for final assessments under Section 144B [Paras 86-103].

Conclusion – Complementary Framework – The faceless scheme does not eliminate JAO’s role but supplements it, providing a dual-layered system ensuring transparency and efficiency – Petitions challenging reassessment by JAOs were dismissed, affirming that JAOs maintain lawful authority for initial reassessment actions [Paras 104-105].
 

Banking Law - Fraud Classification - Principles of Natural Justice – The petitioner, Ratul Puri, sought quashing of the Bank of Baroda's decision to classify him as a "fraud" under the RBI's Master Directions on Frauds. The Court found that the classification without prior notice or opportunity for the petitioner to be heard was in violation of principles of natural justice. Held: Actions lacking in procedural fairness and natural justice are unsustainable [Paras 12-14, 20-22].

Legal Obligations of Banks under RBI Fraud Directions – Audi Alteram Partem – The Court reaffirmed that the doctrine of audi alteram partem applies even under RBI's Master Directions on Frauds. Serious consequences of fraud classification, such as credit denial and business restrictions, necessitate a fair hearing. Banks must provide borrowers with notice, an opportunity to respond to forensic audit findings, and reasoned decisions before classifying accounts as fraudulent [Paras 49, 62].

Reliance on Rajesh Aggarwal Case - Classification as Fraud and Civil Consequences – The Court referenced State Bank of India v. Rajesh Aggarwal and highlighted that the RBI’s Master Directions entail significant civil repercussions on individuals classified as "fraud," equating it to "civil death" in credit terms. Consequently, natural justice mandates procedural safeguards to prevent arbitrary exclusions from institutional finance [Paras 14, 49, 57, 62].

Decision – Petition Allowed – The impugned classification of the petitioner as “fraud” by Bank of Baroda was set aside due to procedural lapses in the application of natural justice. The Court directed Bank of Baroda to remove the petitioner’s “fraud” status from the Central Fraud Registry within 15 days, underscoring that no factual grounds warranted such classification [Para 14, 57, 62].