Quashing of FIR - Criminal Misconduct – Misappropriation of SGRY rice – Sections 13(1)(c), 13(1)(d) P.C. Act and Sections 465, 471, 409, 120B IPC – Quashment and discharge denied – Petitioners accused of conspiring with Panchayat Secretary to forge beneficiary committee minutes, create fictitious beneficiary lists, and obtain sanction for release of 46,573 kg of rice under SGRY project, later misappropriated without executing works – FSL report indicated forged signatures and handwriting attributable to 2nd petitioner – Court held prosecution materials disclose prima facie case warranting trial; quashing/discharge cannot be granted on conjectures or witness silence in 164 Cr.P.C. statements [Paras 6-7].

Role of Accused – FSL evidence – Handwriting match sufficient for prima facie case – Even if petitioner’s name absent in some annexures, evidence of his role as Standing Committee Chairman who obtained sanction and forged records links him to offence; individual participation in conspiracy need not be proved at pre-trial stage [Paras 9-15].

Decision – Petitions dismissed; interim order vacated; Special Court directed to conclude trial within four months [Paras 7-8].

1984 Anti-Sikh Riots – Suo Motu Revisional Jurisdiction – Section 401 CrPC – Acquittal Set Aside – The High Court initiated suo motu revision against the acquittal of four accused persons in a 1984 riots case involving the murder of Harbhajan Singh – Held: The Sessions Judge’s decision suffered from manifest legal error and serious lapses in trial and investigation – Acquittal set aside – Matter remanded for retrial [Paras 8–11, 20–21, 34–36, 38–44, 52, 68(a)-(b)].

Contradictory Testimony – Section 145 Evidence Act – Contradiction Not Proved – The Sessions Court relied on an unproven contradiction between the complainant’s written statement and oral deposition without confronting her as required under Section 145 – Held: The contradiction was not established per law and should not have formed the basis of acquittal [Paras 41–44].

Delay in Lodging Complaint – Explained Circumstantially – The Court held that the 14-day delay in filing the complaint was justified in light of the large-scale displacement, violence, and trauma faced by the complainant – Held: Delay not fatal to the prosecution’s case [Para 45].

Testimony of Sole Eyewitness – Conviction Possible – No Rule Requiring Corroboration – The trial court erred in disbelieving the sole eyewitness without lawful basis – Held: Conviction can be based on a solitary witness if credible – Lack of corroboration not sufficient to discredit testimony [Paras 47–48].

Defective Investigation – No Ground for Acquittal – The Court found grave lapses in police investigation including failure to trace natural witnesses or collect material evidence – Held: Lapses in investigation cannot be taken advantage of by accused if other evidence supports conviction [Paras 49–51].

Revisional Powers – Power to Order Retrial – The Court clarified that while it cannot convert acquittal into conviction under Section 401(3) CrPC, it can order retrial in exceptional cases – Held: This was an exceptional case of manifest miscarriage of justice warranting retrial [Paras 52–58].

Further Investigation – CBI Directed – The Court exercised inherent and constitutional powers to direct the CBI to conduct further investigation due to shoddy and compromised initial probe – Held: CBI to proceed on a best-effort basis; Delhi Police to cooperate [Paras 59–67].

Decision – Acquittal Set Aside – Retrial Ordered – Further Investigation Directed – The Sessions Court judgment dated 28.05.1986 was set aside – Retrial ordered – Evidence recorded earlier to stand, but parties allowed to lead further evidence – Trial Court directed to decide case afresh uninfluenced by this judgment – CBI to conduct further investigation – Trial to conclude expeditiously [Paras 68–69].

Criminal Law – Appeal Against Conviction - Robbery – Contradictions in Prosecution Evidence – Benefit of Doubt – Conviction Set Aside – Acquittal -Appellants convicted for robbery under Sections 395/34 IPC challenged conviction citing discrepancies in witness testimonies regarding place, time of arrest, and recovery of stolen items – Court found material contradictions in statements of key witnesses, inconsistencies on recovery sources, non-sealing of seized articles, and non-joining of public witnesses despite availability – Such lapses undermined authenticity of prosecution case – Held: Prosecution failed to prove guilt beyond reasonable doubt – Conviction and sentence set aside – Appellants acquitted [Paras 13-14, 17-18].

Criminal Trial – Non-Joining of Public Witnesses – Effect – Failure to associate independent witnesses, despite availability, throws doubt on fairness of investigation – Cited Pawan Kumar v. Delhi Administration (1987) CC 585 DHC – No plausible explanation offered – Adverse inference drawn against prosecution [Para 14].

Standard of Proof – Suspicion Cannot Replace Proof – Reiterated Supreme Court rulings in Wahid v. State (Cr. A. No. 201/2020) and Ashish Batham v. State of M.P. (2002) 7 SCC 317 – Mere suspicion, however strong, is not a substitute for proof beyond reasonable doubt – Benefit of doubt must go to accused [Paras 16-18].

Decision – Appeal allowed – Conviction and sentence under Sections 395/34 IPC quashed – Bail bonds cancelled, sureties discharged [Paras 18-19].

Electricity Law - Electricity Undertaking Acquisition – Depreciation on Consumer-Funded Assets – Section 7-A(2) of Indian Electricity Act – Claim Rejected – The petitioner Board sought deduction of depreciation on works constructed at consumer/local body expense – Held: Such assets not funded by the licensee are excluded from book value for compensation; thus, depreciation on them also cannot be claimed – In line with Pilibhit Electric Supply Co. and other precedents [Paras 4-10].

Stores and Spare Parts – Independent Valuation Under Section 7-A(2)(iii) – Inclusion Justified – The Special Officer rightly considered value of spare parts separately based on physical verification and store records – Claim of double inclusion by Board not substantiated – No interference warranted [Para 11].

Advance Collections – Rs. 2,50,000 Collected Revenue Not Deductible – Amount was not an advance from Board to Ex-Licensee but revenue collected on its behalf – Properly excluded from deductions under Section 7-A(5)(a) – Board’s objection rejected [Para 12].

Railway Siding Charges – Challenge Not Pressed – Petitioner waived argument on this head – Findings of Special Officer on this issue upheld without detailed discussion [Para 13].

Consumer Advances – Claim of Rs. 8,75,393.59 – Already Reflected as Contribution – Amount adjusted in accounts as consumer contribution and excluded from book value – Not separately deductible – Special Officer’s finding upheld [Para 13].

Employee Dues – Gratuity, Leave, SC Awards – Not Payable Absent Actual Disbursement – Gratuity or leave encashment claims not substantiated with proof of payment – Special Officer correctly held no deferred liability existed at takeover date – Claim rightly disallowed [Paras 14-15].

Development Reserve – No Deduction When Utilized in Undertaking – Section 7-A(5)(h) – Special Officer found entire reserve invested in fixed assets transferred to Board – Nothing remained in balance with Ex-Licensee – No error in denying further deduction – Supported by SC precedent in Tinsukhia Electric Supply Co. [Paras 16-17].

Final Decision – Writ Petition Dismissed – Challenge against specific components of Award dated 12.07.1982 found without merit – Award upheld – Petitioner directed to pay interest on principal amount as per statute within 6 months [Para 18].

Anticipatory Bail – Maintainability Despite Section 35 BNSS – Sessions Court Erred in Disposing Petition – Petitioner sought anticipatory bail in a case under the Bharatiya Nyaya Sanhita and Arms Act – Sessions Judge declined to decide the bail plea, instead referring petitioner to approach the police citing a prior High Court judgment – Held: Such abdication of judicial responsibility is impermissible – Anticipatory bail is maintainable even with existence of Section 35 of BNSS/Section 41A CrPC [Paras 1–3, 8–9, 27–29].

Right to Life and Liberty – Fundamental Nature – Court Emphasises Judicial Duty – The High Court strongly reiterated that the right to liberty under Article 21 cannot be subjected to arbitrary police discretion – Sessions Courts cannot refuse to decide anticipatory bail pleas merely because a notice under Section 35 BNSS may be issued – Such refusal undermines constitutional rights and statutory remedies [Paras 15–18].

Judicial Accountability – Dereliction by Sessions Court – The Court held that the Sessions Judge’s failure to decide the anticipatory bail application amounted to dereliction of duty – Such acts defeat the purpose of pre-arrest bail provisions and constitutional guarantees – Directions issued for judicial education and circulation of judgment [Paras 29, 32].

Doctrine of Co-existence – Section 35 BNSS and Section 438 CrPC – Harmonised Interpretation – The Court clarified that the statutory scheme contemplates simultaneous applicability of safeguards under Section 35 BNSS and remedies under Section 438 CrPC – Issuance of notice under Section 35 does not extinguish the apprehension of arrest [Paras 21–23].

Decision – Anticipatory Bail Granted – The High Court allowed the petition and granted anticipatory bail to the petitioner with conditions – Directed dissemination of judgment to all Judicial Officers and Police Officers in Bihar for compliance and training [Paras 30–33].

Criminal Law  – NDPS Act s.20(b)(ii)(B) – 810 g charas recovery – Hostile panch witnesses – Contradictions and seal/link-evidence objections – Appeal Dismissed – Held: Recovery proved through consistent police testimony – chain of custody intact – minor discrepancies immaterial – conviction and sentence under s.20(b)(ii)(B) sustained [Paras 2, 4, 12–21, 30–41, 43–44].

Hostile Witnesses – Effect – Signatures on Seizure Memo – Prosecution Not Derailed – Independent witnesses (PW-1, PW-2) turned hostile yet admitted signatures on seizure memo – Held: hostility by itself insufficient; dependable parts can be relied upon when corroborated – Hanif Khan; Sat Paul applied [Paras 12–16, 18].

Police Witness Credibility – No Presumption of Unreliability – Consistent Recovery Evidence – Sole/official testimony, if cogent and credible, can sustain conviction; presumption of regularity of official acts applies – testimonies of PW-3, PW-13, PW-14 found reliable [Paras 19, 25–29].

Contradictions/Discrepancies – Passage of Time – Not Material – Differences arose given statements recorded years after incident; only material contradictions matter – Goverdhan reiterated [Paras 20–21].

Chain of Custody – Non-Production of Physical Seal Not Fatal – Intact Seals, Matching Impressions, FSL Report – Specimen seal impressions and NCB-I form available; FSL noted seals intact; law does not mandate producing the sealing device – Frederick George; Varinder Kumar; Surinder Kumar followed [Paras 30–35, 38–40].

Sentencing – Adequacy – No Enhancement Absent State Appeal – 5 years RI for 810 g charas considered inadequate on proportionality, yet no enhancement without State’s appeal [Para 41].

Decision – Appeal Dismissed – Conviction and Sentence Upheld under Section 20(b)(ii)(B) NDPS Act [Paras 43–44].

Criminal Procedure – Anticipatory Bail – Compliance with Supreme Court Directions – Accused not arrested during investigation – Charge-sheet filed without custodial interrogation – Applicant seeks protection from judicial remand on appearance before trial court – Held: In line with settled law in Gurbaksh Singh Sibbia, Sushila Aggarwal, Siddharth, Satender Kumar Antil, and Musheer Alam, accused not arrested during investigation cannot be remanded to custody merely upon filing of charge-sheet or issuance of summons – Trial court shall permit appearance and acceptance of bail bond without insistence on anticipatory or regular bail application [Paras 1, 2, 6, 15, 16, 21, 33.1, 38(i)-(iii), 50].

Judicial Trends – Misuse of Remand Process – High Court censures routine insistence by trial courts in Uttar Pradesh on judicial custody for accused not arrested during investigation – Judicial system burdened by repeated bail applications and unwarranted incarceration – Supreme Court directions flouted despite clear rulings and repeated compliance orders [Paras 9 to 18, 33.2 to 33.10, 34, 36, 37].

Bail Conditions – Requirement of Two Sureties – Constitutionality and Practicality – High Court reviews historical circulars mandating two sureties and finds them inconsistent with present legal framework – Supreme Court judgments emphasize that inability to furnish sureties must not result in prolonged incarceration – Held: Accused shall be released on a single surety considering socio-economic condition – If surety not arranged within 7 days, Jail Superintendent to inform DLSA to assist in release [Paras 39 to 46].

Legal Awareness and Compliance Mechanism – Directions Issued – District Judges to ensure accused not arrested during investigation are not remanded upon appearance – Personal bond to suffice – Trial court must inform accused of such right – Monthly compliance reports required – Training for judicial officers and legal awareness programs mandated – Registry to review and revise outdated circulars on sureties [Paras 38(i)-(xi), 47, 52].

Decision – Application allowed with directions – Applicant permitted to appear before trial court and furnish bail bond without being remanded – Non-bailable warrants, if issued, to be set aside – Applicant may raise all legal contentions before trial court at appropriate stage [Paras 50, 53].

Civil Law  – Recovery Suit – Bonds – Jurisdiction, Limitation & Interest – OSA No. 3/2016 allowed; OSA No. 5/2015 dismissed – Plaintiffs (H.P. State Co-operative Bank) subscribed to UPSFC SLR Restructured Bonds worth Rs.9.5 crores in 2005 with 8% p.a. interest, guaranteed by the State of U.P. – Interest of Rs.76 lakhs for Aug 2006 and Feb 2007 instalments unpaid – Trial Court partly decreed suit for Rs.76 lakhs without pendente lite interest – Jurisdiction objection rejected as part of cause of action arose at Shimla where interest was earlier remitted – Limitation plea rejected, suit held within 3 years under Art. 25, Limitation Act – Held: Plaintiffs entitled to pendente lite and future interest @ 8% p.a. on Rs.76 lakhs from date of suit (07.04.2009) till realisation – Defendant’s appeal dismissed [Paras 23-40].

Jurisdiction – Section 20(c) CPC – Place of Payment – Part of cause of action arose at Shimla – Even though bonds mentioned “interest payable at Kanpur”, no exclusive jurisdiction clause ousting other courts – Cheques for interest earlier sent to plaintiff’s Shimla office – Held: HP High Court had jurisdiction to entertain suit [Paras 23-33].

Limitation – Article 25 Limitation Act – Suit for recovery of money payable as interest – Period of limitation is three years from when interest becomes due – Unpaid instalments of Aug 2006 and Feb 2007 formed cause of action – Suit filed on 07.04.2009 within limitation – Acknowledgment letters further extended limitation under Section 18 Limitation Act [Paras 34-35].

Interest – Section 34 CPC – Commercial Transaction – Interest on principal sum adjudged – Plaintiffs entitled to pendente lite and future interest @ 8% p.a. on Rs.76 lakhs from date of suit till realisation – Reliance placed on Central Bank of India v. Ravindra – V. Kala Bharathi distinguished [Paras 36-40].

Decision: OSA No. 3 of 2016 (Plaintiff’s appeal) allowed – decree modified to grant pendente lite and future interest @ 8% p.a. on Rs.76 lakhs – OSA No. 5 of 2015 (Defendant’s appeal) dismissed – Amount deposited to be released to plaintiffs along with interest as directed.

Banking Law - Wilful Default – RBI Master Circular – Borrowed Funds Requirement – Appeals Dismissed – Appellant banks challenged Single Judge orders setting aside wilful-defaulter declarations against respondents – Allegations centred on diversion/siphoning through investments in subsidiaries – Court held that the Master Circular applies only if borrowed funds are involved; lenders’ own Final Restructuring Scheme recorded investments were from internal cash surpluses/FCCB proceeds, not borrowings – Forensic Audit Reports admitted non-verification of source of funds – No evidence of intentional default – Appeals dismissed [Paras 38-44, 47].

Procedural Non-Compliance – Identification and Review Committees – Clauses 2.1.3 and 2.2 of the Master Circular require objective determination based on track record and intent – Committees relied entirely on unverified forensic audit material and ignored contemporaneous lender records – Such non-application of mind vitiates the entire process [Paras 26(viii)-(x), 33-36, 41-42].

Corporate Debt Restructuring Context – Lenders’ Knowledge of Investments – At the CDR stage, lenders acknowledged investments as strategic and funded from surpluses; borrower classified in Category B (no diversion) – No change of management or forensic audit ordered then; later allegations of diversion inconsistent with the record [Paras 40, 43(i)-(ii)].

Mens Rea – Requirement of Intentional, Deliberate, Calculated Default – Multiple audits, monitoring through TRA accounts, and criminal court discharge of respondents negate any finding of wilfulness [Paras 36-37, 43(iii)-(vi), 45].

Decision – Division Bench affirms Single Judge’s reasoning – LPA 396/2024 dismissed with no order as to costs – All connected appeals (LPA 294/2024, LPA 357/2024, LPA 398/2024) also dismissed with no orders as to costs [Paras 47, 113].