Fraud Classification – RBI Master Circular – Natural Justice – The petitioner company sought to quash PNB's action of declaring its account as 'fraud' without prior notice or hearing – The court held that the declaration of the petitioner's account as fraud, without following the principles of natural justice, violated RBI guidelines – Held: The petitioner was neither given a chance to respond nor was the fraud declaration substantiated through proper procedure, making the declaration invalid [Paras 18-21].

Suspension of Credit Facilities – Illegal Action – The court quashed SBI's letter suspending the petitioner's credit facilities based on PNB's fraud classification – It was held that since the fraud declaration itself was invalid, the consequent suspension of credit facilities by SBI could not stand – Held: The suspension of credit facilities was unlawful and must be reversed [Paras 19, 22].

Compensation for Damages – Costs Imposed – The court acknowledged the financial loss and reputational damage suffered by the petitioner due to PNB's wrongful action – As compensation, PNB was ordered to pay Rs. 5,00,000 to the petitioner, failing which an 18% per annum interest would apply from the date of filing the petition [Paras 23-24].

Decision: Petition allowed – The court directed PNB to remove the petitioner's account from the fraud list and notify RBI and SBI accordingly – SBI was instructed to restore the petitioner's credit facilities [Paras 22-24].

Maintenance – Entitlement of Wife – Section 125 of Cr.P.C. – The petitioner sought reduction of the maintenance amount awarded to the respondent (wife) on the grounds that she is well qualified (M.Com. degree) and capable of earning – Held: Merely being qualified does not disentitle the wife from claiming maintenance – Financial support is required even if the wife is capable of earning – Maintenance entitlement upheld, but quantum reduced [Paras 15-18, 25].

Quantum of Maintenance – Financial Status and Socio-Economic Standard – While determining the quantum of maintenance, the court must consider the standard of living the wife was accustomed to during her matrimonial life – The maintenance amount should not be oppressive to the husband or insufficient for the wife – In this case, considering the wife's qualifications and abilities, the court reduced the maintenance amount from Rs. 25,000/- to Rs. 20,000/- per month [Paras 30-35].

Child's Maintenance – Continuance Till Majority – The maintenance awarded to the minor child (respondent No. 2) shall continue until the child attains the age of majority – No changes made to the amount of maintenance awarded for the child [Para 36].

Decision: The criminal revision is partly allowed. The maintenance awarded to the respondent-wife is reduced from Rs. 25,000/- to Rs. 20,000/- per month. The maintenance for the child remains unchanged. The remaining part of the Family Court's order remains intact.
 

Contract Law – Breach of Compromise Agreement – Liquidated Damages Awarded – The plaintiff claimed recovery of ₹3.5 crore, asserting that the defendant breached an agreement by filing a criminal complaint despite receiving ₹3 crore as part of the settlement – Held: The defendant breached the contract by filing a police complaint, violating Clause 4 of the compromise agreement, which stipulated the return of ₹3 crore in case of any action against the plaintiff – Plaintiff entitled to liquidated damages of ₹3 crore, as the breach caused inconvenience and humiliation – The sum was found to be a genuine pre-estimate of damages [Paras 46-51].

Criminal Complaint Filed Despite Settlement – Consequences on Contractual Obligations – Defendant's filing of an FIR against the plaintiff, despite receiving settlement amounts, constituted a breach of the settlement agreement – The defendant failed to appear and provide legitimate justification for filing the complaint after accepting the settlement, reinforcing the breach of contract [Paras 43-45].

Liquidated Damages – Compensation under Section 74 of the Indian Contract Act – The return of ₹3 crore was upheld as liquidated damages under Section 74 of the Indian Contract Act, as the plaintiff faced mental agony and inconvenience due to the breach – Plaintiff awarded ₹3 crore with interest at 4% per annum from the date of filing the suit till the date of recovery [Paras 47-53].

Decision: The suit is decreed in favour of the plaintiff for a sum of ₹3 crore with interest at 4% per annum from the date of filing the suit till the date of payment – The claim for ₹50 lakhs is rejected – The defendant no.2 is not held liable under the agreement – Costs awarded to the plaintiff [Paras 52-57].

Specific Performance – Agreement of Sale – Dispute over sale agreement dated 05.01.1990 – The appellants/defendants claimed that the agreement was fabricated, while the respondent/plaintiff sought specific performance, asserting full payment of sale consideration – Held: The Trial Court’s decree for specific performance was upheld – The plaintiff proved the execution of the sale agreement and payment of the full consideration, while the defendants failed to disprove the validity of the agreement – The appeal was dismissed [Paras 1-20].

Burden of Proof – The plaintiff discharged his burden by proving the sale agreement through oral and documentary evidence, including witnesses and the scribe – The defendants did not produce sufficient evidence to counter the plaintiff’s claim, relying solely on the testimony of one defendant – Held: The plaintiff is entitled to specific performance, and the defendants must execute a registered sale deed [Paras 21-30].

Section 45, Indian Evidence Act – Handwriting Expert – The appellants sought to send the sale agreement to a handwriting expert – The petition was dismissed by the Trial Court and the dismissal was upheld by the High Court in a Civil Revision Petition – Held: The appellants’ renewed request for a handwriting expert during the appeal was dismissed as it was not maintainable [Paras 31-40].

Decision: Appeal dismissed – Trial Court’s decree and judgment upheld – Appellants directed to execute a registered sale deed within two months, failing which the plaintiff may take legal steps.

Civil Law – Declaration of Title and Recovery of Possession – Plaintiff filed a suit seeking declaration of title over agricultural land and recovery of possession, challenging the proceedings under the ROR Act as null and void – Trial Court decreed in favor of the plaintiff, holding that the ROR proceedings were void as no notice was served to the plaintiff – First Appellate Court upheld the Trial Court's decision – Second Appeal preferred by the defendants challenging both judgments – Held: Suit barred by limitation as it was filed after 6 years of denial of title by the defendants in the earlier suit – Appeal allowed [Paras 8, 9, 10, 24.9].

Limitation – Suit for Declaration – Plaintiff sought declaration of title based on Article 65 of the Limitation Act (12 years), but the Court found that Article 58 (3 years) was applicable for the relief of declaration of title – Defendants denied the plaintiff's title in 1990, and the suit was filed in 1997, beyond the 3-year limitation period – Courts below erred in applying Article 65 and placing the burden of limitation on the defendants – Suit barred by limitation [Paras 24.4, 24.5, 24.9].

Record of Rights Proceedings – Nullity of ROR Proceedings – Plaintiff challenged the ROR proceedings initiated by the defendants under Section 5-A of the ROR Act – No appeal was filed by the plaintiff under Section 5-B of the Act – MRO not made a party to the suit – Courts below declared the ROR proceedings null and void without proper consideration – Second Appeal held that without joining the MRO as a necessary party, the suit could not succeed – Declaration of nullity of ROR proceedings set aside [Paras 27, 28.1, 28.2].

Possession – Plea of Dispossession – Plaintiff failed to specify the date of dispossession by the defendants – No legal action taken between 1990 and 1997 – Evidence showed inconsistency in plaintiff’s claim of dispossession – Courts below overlooked the lack of specific pleadings on dispossession – Second Appeal upheld the defendants' possession of the land under Section 53-A of the Transfer of Property Act – Relief of possession denied to the plaintiff [Paras 26, 26.4].

Decision: Second Appeal allowed – Judgments of Trial Court and First Appellate Court set aside – Suit dismissed – No costs [Paras 29].
 

SARFAESI Act – Bar under Section 34 – Fraud Allegations and Collusion – Suit Maintainable – The petitioner, a shareholder and director, alleged fraud and collusion between respondent-bank and other directors regarding the sanctioning of a loan without board authorization – The trial court and appellate court rejected the suit under Order VII Rule 11, citing the bar under Section 34 of the SARFAESI Act – Held: Section 34 does not bar the civil court's jurisdiction in cases where fraud or collusion is alleged – The allegations of fraud were sufficiently pleaded, and the suit is maintainable under Section 9 of CPC [Paras 30, 31, 44, 45].

Company Affairs – Director’s Rights – Loan Sanction without Board Resolution – Fraud Claims Established – The petitioner claimed that the loan was sanctioned by the bank without a valid board resolution – The court accepted that this amounts to collusion and fraud between the bank and other directors – The plaint contained specific averments supporting this allegation [Paras 42, 44, 45, 47].

Jurisdiction of Civil Courts – Scope of Section 34 of SARFAESI Act – Section 34 does not preclude civil courts from deciding matters involving fraud – The court emphasized that Section 34’s bar is not absolute, especially when the claim involves fraud, as held in Mardia Chemicals Ltd. v. Union of India – The civil court retains jurisdiction to adjudicate such disputes [Paras 51, 70, 71, 83].

Decision: Both the orders of the trial court and appellate court rejecting the plaint were quashed, and the plaint was restored for trial. The court held that the bar under Section 34 of the SARFAESI Act does not apply in cases of fraud and collusion.

Land Revenue Law – Validity of Sale Deed – Ownership of Tribal Land – The petitioner challenged the orders of the revenue courts declaring his sale deed null and void under Section 170(B) of the MPLR Code on the grounds that the land originally belonged to an individual from a Scheduled Tribe – Held: The petitioner failed to provide evidence of the allotment of land to Pandri, who sold the land to him – The case is remanded to the Sub-Divisional Officer (SDO) to allow the petitioner to submit the allotment proceedings and prove ownership of Pandri, which was not placed before the revenue courts earlier – Orders of the revenue courts quashed and the matter remanded for fresh consideration [Paras 10-20].

Res Judicata – Civil Court Findings on Title – The petitioner argued that a prior civil court decision granting him permanent injunction would preclude the respondents from claiming the land under Section 170(B) of the MPLR Code – Held: The civil court’s findings on ownership, while granting an injunction, do not operate as res judicata because the appellate court refused to consider the petitioner’s amendment application seeking declaration of title due to jurisdictional limitations under Section 257 of the MPLR Code – The revenue court’s decision on title must be reconsidered without being influenced by the prior civil court's findings [Paras 12-18].

Opportunity to Prove Title – Allotment Proceedings – The court allowed the petitioner to present the allotment proceedings to prove that the land was lawfully acquired by Pandri, from whom the petitioner purchased the land – The SDO is directed to reopen the case and decide on the petitioner’s claim in light of these new documents [Paras 20-21].

Decision: The writ petition is allowed – The orders passed by the SDO, Collector, and Board of Revenue are quashed – The case is remanded to the SDO, Chhindwara for fresh adjudication with directions to consider the allotment proceedings to determine whether the land falls under Section 170(B) of the MPLR Code – Parties to appear before the SDO on 13/11/2024 – No order as to costs [Paras 19-23].

Criminal Law – Relevance of Evidence from Another Crime – Section 311 CrPC – The prosecution sought to introduce evidence from a subsequent crime (Cr.No.1031 of 2021) in the ongoing trial (SC.No.113 of 2018) – Held: The evidence relating to the subsequent crime was irrelevant to the current trial, as the accused had not been charged in the latter case, and the proposed witness (Sub Inspector) was not an eyewitness – Introducing such evidence would violate fair trial principles and the accused’s right to defend against the charges solely in the ongoing trial – The impugned order permitting the evidence was set aside [Paras 1-20].

Bad Character Evidence – Sections 53 and 54 of the Indian Evidence Act – The court noted that introducing evidence of another crime could unfairly suggest the bad character of the accused – Held: Under Sections 53 and 54 of the Evidence Act, evidence of bad character is inadmissible unless the accused himself introduces evidence of good character – The prosecution’s attempt to introduce such evidence was impermissible [Paras 21-30].

Fair Trial – Prejudice Against the Accused – Allowing evidence from a separate ongoing case could force the accused to disclose his defense prematurely, prejudicing the trial process – Held: The trial court’s decision was improper and violated norms of a fair trial – The revision petition was allowed, and the trial court's order was set aside [Paras 31-40].

Decision: Criminal Revision allowed – The order dated 29.08.2024 in Crl.M.P.No.359 of 2024 was set aside – The trial court was directed to proceed with the trial in SC.No.113 of 2018 without considering evidence from the subsequent case.

Customs Law – Refund of Special Additional Duty (SAD) – Interest on Delayed Refund – The petitioner sought interest at 6% per annum on the delayed refund of SAD under Section 27A of the Customs Act, 1962 – The refund application was filed on 04 August 2014, and despite multiple remands and delays, the refund was sanctioned only in 2024 – Held: The interest should be calculated from 04 August 2014, the date of the original refund application, and not from 08 August 2022, as contended by the respondent – The petitioner is entitled to interest at 6% per annum for the delay in refund [Paras 2-5, 18-23].

Section 27A of Customs Act – Interpretation – The court rejected the respondent's argument that the interest period should begin only from the petitioner's subsequent request for refund on 08 August 2022 – Held: Section 27A provides for interest on delayed refunds starting from three months after the receipt of the original refund application, not from a later follow-up application [Paras 28-34].

Decision: Petition allowed – The respondent was directed to pay Rs. 421,940 as interest on the delayed refund within two months, failing which interest at 8% per annum would apply – Costs of Rs. 15,000 were also awarded to the petitioner [Paras 40-45].