SARFAESI Act - Assignment of Overdraft Facility – Compliance with RBI Master Directions – Validity of Assignment – The appellants argued that their overdraft facility account was not a “Stressed Loan” as it had not been declared as a Special Mention Account (SMA) under the RBI’s Master Directions – Court held: Continuous breach of the sanctioned overdraft limit for 35 days (SMA-1) and 83 days (SMA-2) justified the classification of the account as a “Stressed Loan” and its assignment to the ARC was valid – No violation of Master Directions by the bank [Paras 8.2, 10, 13].

Remedy under Section 17 of SARFAESI Act – Limited Scope – Applicability to ARC – The appellants contended that Section 17 of the SARFAESI Act would not provide them with an effective remedy, as it applies to "Secured Creditors" and not ARCs – Court held: The appellants had alternative remedies available under Section 17 once their account was declared a Non-Performing Asset (NPA) – The writ petition was correctly dismissed by the learned Single Judge [Paras 15-18].

Delay in Challenging the Assignment – Inaction of the Appellants – Despite being informed of the assignment on 2 April 2024, the appellants failed to take timely action – The appellants waited until September 2024 to file the writ petition, by which time the account had already been declared an NPA – Court found the appellants negligent and dismissed the appeal [Paras 25-27].

Decision – Appeal dismissed – The assignment of the overdraft account to the ARC was valid, and the appellants were negligent in challenging the assignment and failed to act in a timely manner – Appellants are directed to seek remedies under Section 17 of the SARFAESI Act [Para 27].

Insolvency Law – Suspension of Resolution Professional – Failure in Duties – The petitioner, a Resolution Professional (RP) in the Corporate Insolvency Resolution Process (CIRP) of M/s. Transparent Energy System Pvt. Ltd., was suspended by the Disciplinary Committee of the IBBI for one year for failing to exercise due diligence in verifying the Resolution Plan and non-intimation of a creditor’s (KCIL) claim – Held: The petitioner failed in his duty by not raising objections regarding the arbitration award comments in the Resolution Plan and did not communicate the precise admitted claim of KCIL – The Disciplinary Committee's action was justified based on NCLAT findings and the petitioner’s lack of challenge to those findings – Writ petition dismissed [Paras 9-15].

Principles of Natural Justice – No Violation in Disciplinary Proceedings – The petitioner did not raise any challenge to the compliance of natural justice in the proceedings, as he was given due notice, provided with all relevant materials, and granted an opportunity to be heard – Held: The impugned order was passed after full compliance with the principles of natural justice [Para 8].

Proportionality of Punishment – One-Year Suspension Not Disproportionate – The petitioner argued that the one-year suspension was disproportionate to his conduct – Held: The period of suspension falls within the Disciplinary Committee's jurisdiction under the Insolvency and Bankruptcy Code, and the deficiencies noted were significant – The court found no reason to reduce the suspension period, as it did not shock the judicial conscience [Paras 17-21].

Decision:

The writ petition is dismissed – The order of suspension dated 12th August 2024 is upheld – No continuation of interim protection granted to the petitioner [Paras 21-23].

Anticipatory Bail – Prima Facie Case – Applicability of Section 18 of SC/ST (POA) Act – The appellant, charged with offences under IPC and SC/ST (Prevention of Atrocities) Act, sought anticipatory bail – Court held: The prosecution failed to prima facie establish the ingredients of the offences under the SC/ST Act – No satisfactory explanation was provided for the two-month delay in lodging the FIR, and the parties had prior enmity – Applying the principles from Prathvi Raj Chauhan and Subhash Kashinath Mahajan, the bar under Section 18 of the Act was not attracted, as no prima facie case was made out [Paras 6-10].

Delay in Filing FIR – Effect on Credibility – The delay of two months in lodging the FIR raised doubts about the credibility of the allegations – The incident took place within the confines of a private residence, and the lack of prompt action by the complainant further weakened the case against the appellant [Paras 8-9].

Principles of Anticipatory Bail – Mala Fide Allegations – Judicial Scrutiny – Citing the Supreme Court's ruling in Gurbaksh Singh Sibbia and Siddharam Satlingappa Mhetre, the Court emphasized that anticipatory bail should be granted when the proposed accusation stems from ulterior motives – The appellant was entitled to anticipatory bail, given the absence of any material suggesting malafides or intention to flee from justice [Paras 11-12].

Decision – Criminal appeal allowed – The order dismissing the anticipatory bail was set aside – The appellant was granted anticipatory bail with conditions: to appear before the Investigating Officer and execute a bond of Rs. 10,000 with two solvent sureties [Paras 14-16].

Criminal Law – Application Under Section 91 CrPC – Timing of Application – Respondents sought production of request letters sent by CBI to the Ministry of Home Affairs for call interception before charges were framed – Held: The accused cannot invoke Section 91 CrPC at the pre-charge stage for production of documents – The Supreme Court has held that Section 91 can be invoked by the accused only after the stage of framing of charges and when necessary for defense – Petition allowed, orders directing production of documents set aside [Paras 1, 25-30].

Interception of Phone Calls – Privilege and Confidentiality – Sections 123 and 124 of the Indian Evidence Act – CBI asserted that its request letters for interception of calls were privileged communications under Sections 123 and 124 of the Indian Evidence Act – Held: The CBI’s communications seeking permission for interception were confidential and privileged, and cannot be disclosed at the pre-charge stage – The respondents may apply for such documents at a later stage, subject to court review – Petition allowed [Paras 25-30].

Right to Privacy – Interception of Phone Calls – Section 5(2) of the Indian Telegraph Act – The respondents’ argument of privacy violation was rejected – Held: The interception orders were issued as per Section 5(2) of the Indian Telegraph Act, and reviewed by the competent authority without adverse findings – The right to privacy is not absolute and is subject to lawful restrictions – No violation of privacy found [Paras 25-30].

Decision:

The petition is allowed – The impugned orders dated 20.12.2022 and 16.01.2023 are set aside – Respondents are at liberty to file an application under Section 91 CrPC at the appropriate stage – The CBI is directed to preserve the request letters/communications sent to MHA – No order as to costs [Paras 25-30].

Delay Condonation – Liberal Approach – Sufficient Cause – The petitioners sought condonation of a delay of 443 days in filing applications to set aside the default order dismissing their objections to attachment in execution proceedings – The Court held: The cause shown, supported by medical certificates of the petitioner's husband and the petitioner herself, constituted sufficient cause – Courts should adopt a liberal approach in condonation matters, as the refusal to condone delay would deprive the petitioners of a chance to be heard on merits, which would cause injustice – The delay was condoned on payment of costs [Paras 15-19, 22].

Failure to Adduce Evidence – Importance of Substantial Justice – The petitioners failed to appear and adduce evidence in the claim petition due to medical reasons – The Court observed that while the Executing Court took a technical view, sufficient cause was shown – Courts must prioritize substantial justice over technicalities, particularly when no negligence or malafides were proven against the petitioners [Paras 20-24].

Decision – The civil revision petitions and appeals were allowed – The delay in filing the application to set aside the default order dated 26.04.2018 was condoned – The default order was set aside, and the matter was remanded back to the Executing Court for fresh adjudication – Costs of Rs. 10,000 were imposed, payable to the respondent/decree holder [Paras 25-27].

Criminal Law – Identification of Accused in Poor Lighting – Doubts on Accuracy – The incident took place during the dark night of 24/25 May 2004, and the prosecution relied on eyewitnesses who claimed to have identified the accused in the light of torches and a lantern – The Court found that the lantern was not recovered, and torches were not produced before the trial court – Held: The identification of the accused in such conditions is highly doubtful and cannot be solely relied upon for conviction [Paras 45-50].

Non-production of Seized Articles – Impact on Credibility of Prosecution – The prosecution failed to produce critical evidence such as the torches that were allegedly used to identify the accused – Held: The non-production of these seized articles raises serious doubts about the credibility of the prosecution’s case [Paras 51-53].

Motive – Illicit Relationship Insufficient to Prove Motive for Murder – The prosecution suggested that the murders were motivated by opposition to an illicit relationship – Held: The alleged motive was not strong enough to justify the brutal killing of four persons, and this alone does not substantiate the guilt of the accused [Paras 54-56].

Recovery of Weapons – FSL Report Contradicts Prosecution's Case – The firearms recovered from the accused were examined, and the forensic report did not support the prosecution’s claims – Held: The recovery of weapons does not conclusively link the accused to the murders [Paras 57-60].

Decision: The appeals are allowed. The judgment and order dated 30.06.2007 of the trial court convicting and sentencing the appellants are set aside. The appellants are acquitted of all charges, and their bail bonds are discharged [Paras 61-63].

Labour Law – Termination of Services – Reinstatement with Full Back Wages – Section 25F of ID Act – Illegal Termination – The Labour Court ordered reinstatement with full back wages for the workman Manoj Kumar, who was engaged on an ad-hoc basis as a sweeper and terminated without following the proper procedure under Section 25F of the ID Act – Held: The termination violated Section 25F, but reinstatement is not automatic. The High Court set aside the reinstatement and instead awarded monetary compensation of ₹2,50,000 in lieu of reinstatement with full back wages [Paras 50-64].

Compensation in Lieu of Reinstatement – Jurisprudence on Relief for Procedural Defects – While reinstatement generally follows a finding of illegal termination, courts have increasingly awarded monetary compensation where reinstatement is deemed inappropriate, especially for casual or ad-hoc workers – Manoj Kumar’s appointment as an ad-hoc worker and the violation of Section 25F warranted monetary compensation rather than reinstatement [Paras 53-64].

Regularization of Services – Non-Entitlement – The Labour Court denied regularization as Manoj Kumar was not appointed through due process, and there was no sanctioned post for the position – The High Court upheld this decision, citing that mere continuation in service for 1553 days does not confer a right to regularization under the principles laid out in Uma Devi – Further, there were no grounds to claim discrimination as the other regularized employees were either seniors or in different circumstances [Paras 65-93].

Decision:

The writ petition filed by Punjab National Bank is allowed – Reinstatement with full back wages set aside – Compensation of ₹2,50,000 awarded to the workman in lieu of reinstatement – The writ petition filed by the workman for regularization is dismissed.

Criminal Law – Bail – Presumption of Innocence – The petitioner sought regular bail, contending that he had been falsely implicated based on the disclosure of a co-accused and had already been in custody for over 2 years and 7 months – Held: The court recognized the fundamental principle of criminal jurisprudence that the accused is presumed innocent until proven guilty, and lengthy pre-trial detention infringes upon the right to a speedy trial under Article 21 of the Constitution – The petitioner was granted bail as the trial was likely to take considerable time, with only 3 of 16 prosecution witnesses examined so far, and no substantial progress made [Paras 4-5].

Judicial Discretion – Grant of Bail – While opposing the bail, the State highlighted the petitioner’s involvement in other criminal cases – The court held that though criminal antecedents must be considered, bail should not be denied solely on this ground – Instead, each case should be evaluated on its own merits, and the pendency of other cases cannot preclude the petitioner’s right to bail in the present case [Paras 5-6].

Decision: Petition allowed – The petitioner was directed to be released on bail upon furnishing bonds to the satisfaction of the trial court – The court clarified that the observations made herein are not to be construed as an expression of opinion on the merits of the case [Para 5].
 

Execution Proceedings – Resistance under Order 21 Rule 97 CPC – Joint Tenancy Rights – Appeal Dismissed – The appellant filed objections under Order 21 Rule 97 CPC to resist execution of an eviction decree drawn in Original Suit No. 323 of 1977 against his brother, Prem Chandra. The appellant asserted independent rights under a separate decree in Original Suit No. 216 of 1996. Both the Executing Court and First Appellate Court rejected the objections, holding that the appellant had inherited joint tenancy rights along with Prem Chandra. The High Court upheld these findings, affirming that the appellant's claim did not override the joint tenancy rights established through the earlier decree – Held: The second appeal is dismissed, and the execution of the decree against the joint tenants is upheld [Paras 12-17].

Execution of Decree – Finality of Joint Tenancy Findings – Cross-Objections Not Filed – Appeal Dismissed – The appellant did not challenge the findings of joint tenancy rights in Civil Appeal No. 104 of 2000 through cross-objections in Second Appeal No. 891 of 2002. The appellant’s failure to contest these findings prevents him from disputing the execution proceedings under Order 21 Rule 97 CPC. The Court noted that joint tenancy rights had devolved on all legal heirs, and no separate appeal or objections were raised by the appellant at the appropriate stage – Held: The appeal lacks merit and is dismissed [Paras 15-17].

Adjudication of Independent Rights under Order 21 Rule 97 CPC – Joint Tenants Bound by Eviction Decree – The Court emphasized that the provisions of Order 21 Rule 97 CPC allow adjudication of independent claims in execution proceedings. However, since the appellant’s status as a joint tenant was previously determined, the eviction decree against his brother, Prem Chandra, applies to the appellant as well. Rejection of the appellant’s claim by the lower courts was upheld, confirming that he cannot avoid eviction based on his asserted independent decree – Held: The objections were rightly rejected by the lower courts, and the eviction decree is enforceable against all joint tenants [Paras 10-13].

Decision: The second appeal was dismissed at the admission stage. The Court affirmed the execution of the decree against all joint tenants, including the appellant, finding no merit in the appellant's objections under Order 21 Rule 97 CPC [Paras 17].