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].
 

Intra-Court Appeals – Maintainability – Orders Passed by the Board of Revenue – Appeals were filed against the common and individual orders passed by the Board of Revenue in its appellate and revisional capacities, challenged through writ petitions under Articles 226 and 227 of the Constitution – The core issue was whether intra-court appeals against judgments of Single Judges exercising jurisdiction under Article 227 were maintainable – Rajasthan High Court Ordinance, 1949, initially allowed intra-court appeals under Section 18, which was repealed by the Judicial Administration Laws (Repeal) Act, 2001 – Rule 134 of the High Court Rules, substituted in 2005, excluded appeals in supervisory jurisdiction under Article 227 – Held: Appeals against orders passed by the Board of Revenue, where petitions were filed under Articles 226 and 227, are maintainable if jurisdiction under Article 226 is invoked [Paras 9-22, 81-84].

Jurisdiction – Articles 226 and 227 Distinction – Article 226 confers original jurisdiction for issuing writs, while Article 227 provides supervisory jurisdiction – Supreme Court in Umaji Keshao Meshram and Radhey Shyam clarified that judicial orders of civil courts are not amenable to certiorari under Article 226 – Orders under Article 227 do not attract intra-court appeals unless substantial relief under Article 226 is involved – High Court affirmed the distinction, asserting appeals would be maintainable if petitions included relief under Article 226, despite ancillary references to Article 227 [Paras 27-39, 47-49].

Revenue Courts vs. Civil Courts – Revenue courts are constituted under special statutes like the Rajasthan Tenancy Act, 1955, and Rajasthan Land Revenue Act, 1956, to handle specific revenue matters – They are distinct from civil courts, which exercise plenary jurisdiction and are governed by the CPC – Revenue courts are supervised by the Board of Revenue and do not constitute ordinary civil courts – High Court noted that the Board of Revenue acts as a statutory tribunal, not a civil court of plenary jurisdiction [Paras 54-66, 75-81].

Precedents and Interpretation – The court referenced decisions including Harinagar Sugar Mills and Jaswant Sugar Mills, which distinguished between judicial functions performed by tribunals and civil courts – It held that despite judicial powers, revenue courts and the Board of Revenue do not qualify as civil courts [Paras 75-77].

Decision – Intra-court appeals arising from writ petitions filed under Articles 226 and 227 challenging Board of Revenue orders are maintainable – The objection regarding non-maintainability is rejected, and the appeals are to proceed for hearing on merits – Rationale based on the conjoint reading of Rule 134 and Article 226 jurisdiction [Paras 82-84].
 

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].

Burden of Proof – Applicability of Section 106, Evidence Act – Shifting Burden on Accused in Domestic Death Cases – Not Sustained - The trial court invoked Section 106 of the Evidence Act to shift the burden of proof onto the appellant, reasoning that he should explain the circumstances surrounding the death of his wife, who was in his custody. The High Court held this improper, noting that Section 106 cannot relieve the prosecution of its fundamental duty to establish guilt beyond a reasonable doubt. The prosecution must initially prove the appellant’s presence at the scene and last-seen circumstances to justify shifting any burden under Section 106. Here, lacking evidence of the appellant’s presence at the time of death, the High Court ruled Section 106 inapplicable, with no basis to impose a reverse burden on the appellant [Paras 1, 21-24, 29].

Alteration of Charges Post Examination – Section 302 IPC – Prejudicial Conduct – Right to Fair Defense - Initially charged under Sections 498-A, 304-B IPC, and Dowry Prohibition Act provisions, the trial court subsequently altered the charge to Section 302 IPC and convicted the appellant of murder without issuing proper notice. The High Court underscored that, while Section 216 CrPC permits charge alteration, it must be exercised without prejudicing the accused’s right to a fair defense. Failure to notify the appellant about the altered charge contravened fair trial principles and caused prejudice. Held: Conviction on an altered charge without due procedural notice was unsustainable and required reversal [Paras 27-31].

Wrongful Prosecution – Compensation for Unjust Incarceration – Lack of Statutory Framework - appellant endured 13 years of incarceration before being granted bail, highlighting the absence of compensatory mechanisms for wrongfully prosecuted individuals. The High Court lamented the lack of statutory provisions in India for compensation in wrongful prosecution cases, despite recommendations in the Law Commission’s 277th report advocating for reparation. While similar frameworks exist in other jurisdictions, India’s lack of such provisions conflicts with Article 21 protections. Observed: Legislative reform is urgently needed to provide statutory relief for victims of wrongful prosecution [Paras 45-51, 56-62].

Decision: The criminal appeal is allowed. The conviction under Sections 302 and 316 IPC is set aside, and the appellant is ordered to be released forthwith. The court emphasizes the urgent need for statutory frameworks to compensate victims of wrongful prosecution, consistent with constitutional safeguards under Articles 14 and 21.

Grounds for Divorce – Desertion – Long-Term Separation Constituting Desertion - The appellant argued that the trial court erred in granting a divorce on grounds of desertion without specifically establishing intent (animus deserendi) as required under Section 13(1)(ib) of the H.M. Act – Held: The Court confirmed that the prolonged separation of over 27 years without reasonable cause, along with the wife's unwillingness to reconcile, constituted desertion. The absence of cohabitation and mutual intent to reunite justified the finding of desertion even in the absence of a detailed trial court finding on animus deserendi [Paras 1-2, 18-19].

Essence of Desertion in Matrimonial Matters – Continuing Conduct and Failure of Reconciliation Efforts - Emphasized that desertion requires continuous conduct evidencing permanent separation and a lack of intent to resume marital life – Court observed that lengthy separation and absence of attempts at reconciliation during court proceedings underscored the permanency of desertion, satisfying the statutory requirement for divorce under Section 13(1)(ib) [Paras 12-16].

Judicial Precedents – Constructive Desertion and Prolonged Separation as Basis for Divorce - Citing Bipin Chander v. Prabhavati and Savitri Pandey v. Prem Chandra Pandey, the Court reaffirmed that desertion includes long-term separation when it is shown to have no reasonable justification or attempts at reconciliation – Held: The grant of divorce by the trial court was appropriate given the unbroken separation and irreconcilable state of the marriage [Paras 15-16].

Decision - The appeal was dismissed, affirming the trial court’s decree of divorce on the ground of desertion due to prolonged and unresolved separation, which constituted permanent abandonment by the wife [Para 25].
 

Cheque Bounce - Insolvency and Bankruptcy Code, 2016 – Interim Moratorium under Section 96 – Applicability to Criminal Proceedings – Stay on Proceedings under Negotiable Instruments Act – The petitioner, a director in a company, faced proceedings under Section 138 of the N.I. Act, which he sought to stay, citing an interim moratorium declared by the NCLT under Section 96 of the IBC in a creditor-initiated insolvency action. The petitioner argued that proceedings related to any "debt" as referenced in the IBC should be stayed. The court, relying on P. Mohanraj v. Shah Brothers Ispat Pvt. Ltd., found that proceedings under Section 138 of the N.I. Act are quasi-criminal but relate indirectly to debt recovery, thus falling within the moratorium's scope [Paras 1-3, 19-21].

IBC and Criminal Proceedings – Interpretation of "Debt" and Legal Proceedings – Section 96 of the IBC – The court examined whether Section 96’s interim moratorium on "all debts" covered quasi-criminal proceedings under Section 138 of the N.I. Act. The judgment referenced P. Mohanraj to clarify that Section 96, unlike Section 14 (applicable to corporate debtors), extends to all proceedings connected to personal debt resolution, including those under Section 138 of the N.I. Act [Paras 4-7, 16-18].

Distinction between Corporate and Individual Moratoriums in IBC – Applicability of Section 96 Moratorium – Citing Ajay Kumar Radheyshyam Goenka v. Tourism Finance Corporation of India Ltd., the court acknowledged the distinct applicability of moratoriums under Section 96 (personal insolvency) and Section 14 (corporate insolvency). The court clarified that while Section 14 protects corporate debtors, Section 96 covers proceedings against individuals or personal guarantors, staying both civil and quasi-criminal proceedings [Paras 8-12, 20].

Decision – Writ Petition Allowed – Proceedings Stayed under Section 138 of the N.I. Act – The court found that the revisional court had misinterpreted the law by disregarding the moratorium imposed by the NCLT. The order was set aside, and the Section 138 proceedings against the petitioner were stayed as long as the moratorium remained in effect, upholding the primacy of the NCLT's order under the IBC [Paras 21-22].

Desertion and Cruelty – Prolonged Separation as Grounds for Divorce – Appeal Allowed - The appellant claimed that the respondent deserted him without cause, and long-term separation amounted to cruelty – Held: Continuous separation for over two decades with no genuine reconciliation efforts demonstrates desertion and mental cruelty under Section 13(1)(ia) and (ib) of the H.M. Act – Citing Rakesh Raman v. Kavita, the Court held that continued separation inflicts mental cruelty on both spouses, justifying divorce [Paras 1, 16-18].

Standard for Establishing Mental Cruelty – Irretrievable Breakdown of Marriage - The Court emphasized that the prolonged inability to reconcile and lack of cohabitation between spouses leads to an irreparable breakdown of the marital relationship, satisfying grounds for mental cruelty – Reinforced by Samar Ghosh v. Jaya Ghosh, the Court found that the nature and extent of separation constitute cruelty in cases with substantial estrangement [Paras 19-22].

Decision - The appeal was allowed, reversing the trial court’s order and granting a decree of divorce on the grounds of desertion and mental cruelty, formally dissolving the marriage [Para 25].

Dowry Death – Requirements Under Section 304B IPC – Conviction Reversed - The appellants contended that there was insufficient evidence of dowry-related harassment immediately before the deceased’s death, disputing claims of cruelty or dowry demand. The court examined evidence including witness testimony and circumstantial factors – Held: There was no concrete evidence proving sustained dowry-related cruelty or that dowry demands immediately preceded the deceased’s death. Statutory presumption under Section 113(B) of the Evidence Act could not apply due to lack of proximate evidence of harassment. The conviction was thus reversed, granting appellants the benefit of the doubt [Paras 12-16, 20].

Assessment of Evidence – Burden of Proof and Presumption of Innocence - The court underscored that the prosecution must prove dowry-related cruelty beyond reasonable doubt, with consistent testimonial support. Here, the primary witness did not establish dowry demand on the incident day, weakening the link between dowry harassment and the fatal outcome. Reinforced: The benefit of doubt is applied where evidence does not conclusively demonstrate a proximate link between alleged cruelty and the death [Paras 17-19].

Decision - The appeal was allowed, the conviction and sentence under Section 304B IPC were set aside, and the appellants were acquitted. Shashi Kala Devi’s bail bond was discharged [Para 21].
 

Child Sexual Abuse – Reliability of Victim's Testimony – Conviction Sustained - The appellants, convicted of multiple sexual offenses against a minor, challenged the victim's testimony and the reliability of investigative procedures. The Court affirmed that a victim’s testimony alone, when credible and consistent, suffices to uphold conviction in cases of sexual abuse. Held: Despite certain lapses in the investigation, the victim’s account was of sterling quality, and her consistent testimony warranted reliance. The convictions under Sections 376(1) and 109 IPC and Section 23 of the Juvenile Justice Act were sustained [Paras 25-28, 42-45].

Abetment in Sexual Offenses – Intentional Facilitation of Crime by Parent - The second accused, mother of the victim, argued that passive presence did not constitute abetment. However, the Court found that actively facilitating and ensuring her son did not interrupt during the crimes constituted abetment under Section 109 IPC. Held: Active facilitation qualifies as intentional aid, meeting abetment criteria in cases of grave offenses against children [Paras 65-69].

Reduction of Sentence – Age and Background as Mitigating Factors - Acknowledging the pre-2013 amendment provisions allowing reduced sentences, the Court considered the accused’s socioeconomic context and reduced the sentence from life to seven years for certain offenses. Held: Minimum sentencing provisions apply, but excessive sentencing was found disproportionate to the case circumstances [Paras 85-90].

Decision - Appeals partially allowed, with sentences reduced to seven years for certain appellants while upholding convictions. Crl. Appeal No. 967 of 2017 was dismissed.
 

Partition of Self-Acquired Property – Applicability of Rule Against Partial Partition – Partition Suit – Will of Late Smt. Abnash Kaur – Plaintiff sought partition based on the registered Will of late Smt. Abnash Kaur dated 06.02.1973, dividing her estate among six beneficiaries, each receiving a 1/6th share – Suit contested by Defendant No.1, who argued it constituted partial partition, contrary to law, citing Kenchegowda judgment – Held: Rule against partial partition applies primarily to joint family or coparcenary properties – As the suit property was self-acquired by Smt. Abnash Kaur and held by the parties as tenants-in-common, the rule of bar against partial partition was deemed inapplicable – Partition granted with conditions [Paras 69-82, 85-86, 161].

Will Execution – Validity and Proof Requirements – Plaintiff failed to prove the genuineness of Will of late Sh. Ajit Singh dated 21.07.1997 under Section 63 of the Indian Succession Act and Section 68 of the Evidence Act, as no issue was framed regarding the genuineness – No evidence led by the plaintiff despite the Court allowing defendants to dispute the will’s validity if evidence arose – Will deemed unproven in suit proceedings [Paras 89-92].

Necessary Parties – Non-impleadment Objections – Defendant Nos.1 and 2 raised objections concerning non-impleadment of other beneficiaries under the Will of late Sh. Ajit Singh – Supreme Court precedent in Shivshankara held that suits do not abate for non-impleadment if estate is substantially represented by other parties – Plaintiff adequately represented deceased Ajit Singh’s interest; objection of non-impleadment overruled [Paras 94-96].

Subrogation Rights – Mortgage Redemption – Defendant No.1 argued possession retention rights due to mortgage redemption as per Compromise Decree dated 20.02.1978 – Plaintiff countered this by claiming redemption was from the estate’s rental income – Held: Defendant No.1 entitled to retain possession until co-sharers pay contribution towards redemption amount; however, mortgage status does not entitle Defendant No.1 to exclusive ownership – Redemption deemed validly done by Defendant No.1 per compromise, with partition rights to plaintiff upon paying share of redemption [Paras 106-111, 121-122].

Termination of Lease – Sham Transaction Allegation – Plaintiff argued that the lease between late Smt. Abnash Kaur and Defendant No.1 was a sham, created to avoid tax liabilities and shield property from claims – Will and subsequent documents acknowledged lease as genuine, binding plaintiff – Plaintiff’s argument of termination based on lease amount was dismissed due to lack of supporting evidence and contradictory pleadings [Paras 144-155].

Limitation for Partition Suit – Plaintiff claimed partition of the suit property not barred by limitation – Citing Supreme Court precedents, Court reiterated that no limitation applies to partition suits, as partition is an incident attached to joint property rights – Plaintiff’s claim for partition sustained [Paras 135-140].

Declaratory and Injunctive Relief – Plaintiff sought declarations regarding ownership and an injunction against Defendant No.1 – Court held plaintiff entitled to permanent injunction as a co-sharer but denied declaratory reliefs, finding plaintiff’s claims unsubstantiated and contrary to pleadings on record [Paras 171, 173].

Decision: Partition granted with preliminary decree determining shares of parties in the suit property – Defendant No.1’s possession as subrogated mortgagee upheld pending payment by co-sharers of their redemption contributions – Declaratory reliefs denied; plaintiff entitled to injunctive relief as co-sharer – Suit disposed of accordingly [Paras 175-179].