Commercial Law – Contracts – Suit for Recovery of Money – Breach of Contract – Demurrage and Excess Freight Charges – The plaintiff/appellant filed a suit for recovery of Rs. 1,18,70,115/- (principal and interest) against the defendant/respondent regarding a contract for transportation services – Defendant contended that plaintiff breached the contract by failing to place trailers at the designated time, forcing the defendant to hire alternate transporters and incur demurrage charges imposed by port authorities – Defendant recovered Rs. 29,61,000/- by encashing bank guarantee, retaining EMD, and from pending bills – Held: Trial Court correctly concluded that plaintiff failed to prove the basis of its claim, having produced no supporting documents like invoices – Defendant produced adequate material, including bills from port authorities, to justify deductions made strictly in accordance with the contract terms – Dismissal of suit upheld [Paras 15, 20, 23, 30–34].

Evidence – Burden of Proof – Claim for outstanding dues – Plaintiff claimed a specific sum but failed to enumerate details or produce any material/invoices to substantiate the claim other than a statement of accounts and a demand letter – PW1 admitted no separate bills were raised – Held: Plaintiff failed to discharge the burden of proving the amount due and payable – Defendant justified its deductions with documentary evidence (Ex. D28) which went unimpeached in cross-examination – Appeal dismissed [Paras 20, 26, 32–34].

Decision: Appeal dismissed as being devoid of merit with costs. All pending applications disposed of.

Criminal Law – Interim Custody of Property – Freezing and Defreezing of Bank Accounts – Sections 451, 457 and 102 Cr.P.C. – The complainant transferred Rs. 1.17 crores, including amounts to the petitioner's account, for the procurement of a fluid which was never supplied – The Investigating Officer froze the petitioner's bank account containing Rs. 1,12,15,884/- – The Magistrate allowed the complainant's application for interim custody upon execution of an indemnity bond and rejected the petitioner's application to defreeze the account – The Revisional Court affirmed both orders – Held: The email communications placed on record indicate that the amount was transferred to the petitioner's account at the behest of the main accused – The petitioner being an associate of the main accused, the possibility of the deposited amount being proceeds of crime cannot be ruled out prior to a full-fledged trial – The Magistrate rightly released the amount in favour of the complainant who actually lost the money due to the alleged fraudulent act – Petitions rejected [Paras 4–10].

Inherent Jurisdiction – Section 482 Cr.P.C. – Scope of Interference with Concurrent Findings – The High Court was approached to undo the concurrent orders passed by the Magistrate and the Revisional Court – Held: In the exercise of inherent or revisional jurisdiction under Section 482 of the Cr.P.C., the High Court does not upset concurrent factual findings in the absence of perversity, nor does it re-analyse or re-interpret evidence on record – The lower courts validly safeguarded the funds by imposing a condition that the complainant shall re-deposit the entire amount if he loses the case – The complainant having prima facie shown entitlement to the amount, the impugned orders are based on cogent reasons and do not warrant interference – Petitions rejected [Paras 11–12].

Decision: Petitions rejected – The orders of the Magistrate and the Revisional Court allowing the complainant's application for interim custody and rejecting the petitioner's application for defreezing the bank account are affirmed.

Criminal Law - Negotiable Instruments Act, 1881 - Sections 138 and 141 - Vicarious Liability of Directors - Quashing of Summoning Orders - Petitioner sought quashing of summoning orders and criminal proceedings arising from dishonoured cheques issued by the company - Petitioner contended that he was an Independent Director (Non-Executive), not a signatory to the cheques, and not involved in the day-to-day affairs of the company - Complaints alleged generally that the petitioner was personally responsible for the day-to-day management - Held: Vicarious liability under Section 141 of the NI Act must be strictly construed. Mere designation as a director is not sufficient to establish liability. The complaint must contain specific averments demonstrating the director's direct involvement in the affairs of the company at the relevant time. A non-executive or independent director who has not signed the cheques cannot be held liable based on bald, cursory statements. The petitioner was an Independent Director and had resigned before the summoning orders were issued. In the absence of foundational averments establishing a direct nexus to the financial transactions, the petitioner cannot be held vicariously liable. Summoning orders set aside and criminal proceedings quashed [Paras 7-15].

Decision: Petitions disposed of - Summoning orders dated 22.05.2017 and 01.07.2017 set aside qua the petitioner, and all criminal proceedings arising therefrom are quashed.

Civil Law – Territorial Jurisdiction – Waiver of Objection – Section 21 and Order VII Rule 10 CPC – Suit for recovery of Rs. 10 lacs where Trial Court allowed the respondent's application under Order VII Rule 10 CPC to return the plaint for lack of territorial jurisdiction – Appellant contended that the respondent did not object to territorial jurisdiction in the written statement and no issue was framed on this aspect – Held: In terms of Section 21 CPC, an objection to territorial or local jurisdiction must be taken at the earliest possible opportunity, and in any case at or before the settlement of issues – If not taken at the earliest, the objection is deemed to be waived – Territorial jurisdiction can be assumed by the Court upon waiver, as it does not go to the root of the matter unlike inherent lack of subject-matter jurisdiction – Since the respondent raised no objection at the first instance or at the stage of framing issues, the objection stands waived – Impugned order returning the plaint is set aside and the suit is restored [Paras 3–10].

Decision: Appeal succeeds and is disposed of – Impugned order dated 23.07.2022 is set aside – Suit is restored to its original number and directed to be listed before the concerned Trial Court on 30.03.2026.

Drugs and Cosmetics Act, 1940 — Section 18(a)(i) and (vi) read with Section 16(1)(a) punishable under Section 27(d) — Section 34 — Vicarious Liability of Managing Director — Quashing — Complaint Allowed — Drug "Oflox OZ Suspension 30 ML" (Ofloxacin & Metronidazole Suspension, Batch No. CLOF14014) manufactured by M/s Crest Lifesciences Pvt. Ltd. and marketed by M/s Cipla Limited was found "Not of Standard Quality" by both RDTL, Chandigarh and Central Drugs Laboratory, Kolkata — Prosecution sanctioned by Drugs Controller General (India) — Managing Director of the marketer company (petitioner/accused No.5) challenged complaint and summoning order contending he had no role in day-to-day affairs of the company, which had appointed an authorized representative (accused No.6) — Held: Section 34 of the Drugs and Cosmetics Act fastens vicarious liability only on persons who, at the time of the offence, were in charge of and responsible to the company for conduct of its business — Complaint completely silent on petitioner's role in day-to-day working — No specific averment that Managing Director was responsible for manufacturing or marketing operations — Though position of Managing Director may raise a presumption of responsibility, complaint must specifically aver how and in what manner the Managing Director was in charge — Absence of such averment is fatal — Complaint and summoning order quashed qua petitioner [Paras 28, 29, 37, 38, 39, 41].

Section 482 CrPC / Section 528 BNSS — Inherent Powers — Scope — Quashing of Proceedings — The High Court may quash criminal proceedings where allegations, even if accepted in their entirety, do not prima facie constitute any offence or make out a case against the accused, or where continuation of proceedings would be an abuse of process of court — Power must be exercised sparingly, with caution and circumspection — Where prosecution is bound to fail in all probabilities and continuance would subject the accused to unnecessary ordeal of protracted trial, quashing is appropriate [Paras 20-26, 39, 40].

Decision: Petition allowed — Complaint No. 15 of 2024 and consequent proceedings before ACJM, Nalagarh quashed and set aside qua the petitioner (accused No.5) — Petitioner discharged.

Criminal Procedure – Anticipatory Bail – Maintainability of direct approach to High Court – Concurrent Jurisdiction – Section 482 BNSS gives concurrent powers to the High Court and Sessions Court to entertain anticipatory bail applications – Normal rule requires approaching the Sessions Court first, but High Court can entertain directly in special or extra-ordinary circumstances – FIR was lodged on the direction of Special Judge (POCSO) under Section 173(4) BNSS – Special Judge acts in dual capacity as Magistrate and Sessions Court – Held: The present application comes within the purview of special/extra-ordinary circumstances; preliminary objection of the State against direct maintainability before the High Court is rejected [Paras 26–32].

Criminal Law – POCSO Act – Section 29 Presumption of Guilt – Applicability at pre-arrest bail stage – State opposed anticipatory bail relying on the statutory presumption under Section 29 of the POCSO Act – Held: Presumption under Section 29 of the POCSO Act cannot be invoked at the stage of pre-arrest bail before the framing of charges – Requiring an accused to rebut the presumption of guilt before foundational facts are established and charges are framed would do violence to fundamental criminal jurisprudence and Article 21 of the Constitution – Grant or refusal of bail at this stage is to be decided on usual and ordinary settled principles [Paras 40–45].

Criminal Procedure – Anticipatory Bail – Factual Matrix and Conduct of Parties – Delay in FIR and unnatural conduct – FIR lodged after 6 days delay by a stranger claiming to be the guardian of the victims – Victims did not inform their natural parents but confided in a stranger – Material improvements in victims' statements regarding date and place of incident – Victims were interviewed by media in violation of POCSO and Juvenile Justice Act protocols – Dispute regarding bathing rights in Magh Mela coincided with the date the informant allegedly received information of the offence – Medical report noted no external injuries and only stated sexual assault cannot be ruled out – Held: Considering the factual matrix, discrepancies, and unnatural course of human conduct, a case for grant of anticipatory bail is made out [Paras 33–39, 51–52].

Procedural Law – Filing of Affidavit – Defective Affidavit – State objected that the affidavit in support of the anticipatory bail application was not sworn by Applicant No.1 but by Applicant No.2 and a stranger (pairokar), allegedly violating Rule 18-A of Allahabad High Court Rules – Held: Procedural laws are handmaids of justice and not meant to defeat the ends of justice – Hyper-technical approach cannot be adopted to throw out the application when Applicant No.2 explicitly stated he is doing pairavi on behalf of Applicant No.1 [Para 46].

Decision: Anticipatory bail application allowed – In the event of arrest, applicants are directed to be released on anticipatory bail on furnishing a personal bond of Rs. 50,000/- with two sureties each, subject to conditions including not tampering with evidence, not leaving India without permission of the Court, and all parties refraining from giving media interviews regarding the present case during the pendency of the investigation/trial.

Stamp Act – Recovery Against Legal Representatives – Liability Limited to Inherited Estate – Section 48, Indian Stamp Act, 1899 read with Section 181, U.P. Revenue Code, 2006 – Petitioners, sons of the deceased purchaser against whom deficiency and penalty were imposed under Section 47-A of the Stamp Act, challenged recovery certificate issued against them after their father's death – Contended that they inherited no property from their father and that since the sale deeds were declared null and void by civil court, no property stood transferred – Held: Under Section 2(14) of the Stamp Act, chargeability of duty is referable to the date of execution and the instrument includes every document which purports to create any right or liability; consequently the civil court's declaration of the sale deed as null and void is wholly irrelevant for determining liability under the Stamp Act – Legal representatives fall within the category of "defaulters" under Section 181 of the Code, 2006 and recovery proceedings may be continued against them as if they themselves are defaulters – However, proviso to Section 181(1) limits their liability strictly to the extent of the property of the deceased which has come to their hands [Paras 12–25].

Stamp Duty – Legal Representatives – Mode of Recovery – Inquiry Before Execution – Section 48 of the Stamp Act permits recovery by any mode prescribed for recovery of arrears of land revenue and the Collector may adopt any one or more modes under Section 170(1) of the Code, 2006 including arrest and detention, attachment of movable or immovable property, attachment of bank account, or appointment of receiver – The explanation to Section 170(1) permits simultaneous enforcement of two or more processes – Held: The respondents are well within their rights to give effect to the recovery certificate but must do so keeping in mind the mandate of the proviso to Section 181(1) which confines liability to the inherited estate – Whether the petitioners have inherited property from their father is a pure question of fact requiring investigation and cannot be accepted at the writ stage on the basis of affidavits – Collector directed to conduct inquiry after receiving petitioners' objections along with Income Tax Returns [Paras 15–27, 33].

Instrument – Definition – Declaration of Null and Void by Civil Court – Irrelevance for Stamp Liability – Section 2(14) of the Stamp Act defines instrument to include every document by which any right or liability is or purports to be created, transferred, limited, extended, extinguished or recorded – Held: The expression "purports to be created" ensures that even if a right or liability is not actually created but the document purports to create the same, it falls within the definition of instrument – Subsequent declaration of sale deed as null and void by the civil court has no bearing on the question of chargeability to stamp duty [Paras 12–14].

Decision: Writ petition disposed of — Petitioners directed to file objections before Collector, Agra within one month along with Income Tax Returns — Collector to conduct inquiry into extent of inherited estate and decide objections within four months by reasoned order — Petitioners restrained from creating third party rights over movable and immovable properties and from withdrawing amounts from bank accounts in excess of the impugned levy, until decision on objections — No coercive action, arrest or detention against petitioners till decision on objections or four months whichever is earlier.

Revenue Law - Eviction from Gram Sabha Land - Procedure under Section 67 - Statutory Rules vs. Court Guidelines - Petitioners evicted and penalized for constructing a mosque on Gram Sabha land (Khalihan) - Assailed for denial of opportunity to cross-examine the Lekhpal, relying on guidelines in Rishipal Singh v. State of U.P. - Held: Proceedings under Section 67 read with Section 225-A of the Code and Rules 66, 67, and 192 of the Rules are strictly summary in nature, to be decided upon affidavits - The guidelines framed in Rishipal Singh recommending a detailed procedure were meant for the State to "adopt" by suitably amending the Rules - Until the State Government amends the Rules, the existing statutory summary procedure shall prevail - Eviction order passed in compliance with existing Rules is valid [Paras 13-19, 27-30].

Statutory Interpretation - Enforceability of Court Guidelines - Existence of Statutory Rules - Held: While courts may frame guidelines to fill a legislative vacuum (as in Vishaka v. State of Rajasthan), where specific, valid, and enforceable statutory rules exist, there is no occasion to exercise extraordinary powers to formulate new enforceable guidelines unless the existing rules are struck down - Directions in Rishipal Singh requiring mandatory oral evidence and cross-examination amount to converting a summary procedure into a regular procedure and cannot be enforced prior to formal adoption by the State via amendment of Rules [Paras 27-29].

Revenue Law - Imposition of Penalty - Proof of Occupation or Construction - Eviction upheld but penalty set aside - Held: There was no material on record to link the petitioners to either the construction or the occupation of the mosque - Imposition of penalty of Rs. 36,000/- by the Tehsildar set aside [Para 25].

Decision: Writ petition dismissed - Order of eviction upheld - Imposition of penalty against the petitioners set aside due to lack of linking material.

Civil Procedure – Second Appeal – Section 100 CPC – Substantial Question of Law – Perversity – Respondent contractor awarded a work order by ONGC in September 1995 for completion within one month six days — contract rescinded on 13.11.1995 by a letter which the respondent received only on 18.11.1995 — no inquiry conducted prior to rescission to verify the respondent's claim that 97% work was completed — trial court dismissed the suit; First Appellate Court reversed and decreed — in second appeal, question was whether the First Appellate Court committed perversity in holding that 97% work was completed ignoring the time stipulation — Held: Finding of First Appellate Court based on uncontroverted documentary evidence (Exhibits 8, 11, 21 to 527) and absence of any rebuttal evidence by ONGC is not perverse — a finding based on acceptable evidence, howsoever compendious, cannot be interfered with in second appeal [Paras 20–27].

Contract Law – Rescission of Contract – Reasonable Opportunity of Hearing – ONGC rescinded the contract alleging that the respondent had failed to start work, while the respondent had written letters on 10.11.1995 and 13.11.1995 informing about completion of 90-97% of work — notice calling for joint inspection sent on 16.11.1995 and contract rescinded by letter dated 13.11.1995 received by respondent on 18.11.1995, before he could respond — no inquiry conducted by ONGC to verify the extent of work done — Held: Contract rescinded without affording reasonable opportunity of hearing and without verifying the respondent's claims — rescission illegal [Para 24].

Evidence – Adverse Inference – Party Failing to Enter Witness Box – ONGC as defendant did not adduce any evidence to contradict the plaintiff's case — no witness was examined on behalf of ONGC — Held: When a party does not appear into the witness box and state its own case on oath, a presumption may be drawn that the case set up by it is not correct — uncontroverted evidence of plaintiff stands accepted [Para 17, relying on Vidyadhar v. Manikrao].

Civil Procedure – Second Appeal – Scope – Probative Value of Documents – Questions regarding probative value of documents admitted in evidence are essentially factual — First Appellate Court is the final court on facts — in second appeal, this Court cannot re-examine factual findings unless perversity is established — questions regarding probative value not being substantial questions of law, not gone into [Para 28].

Decision: Second appeal dismissed with costs — Judgment and decree of the First Appellate Court (Additional District Judge, Cachar, Silchar) in Title Appeal No. 35/2006 dated 29.08.2011 decreeing the suit in favour of the respondent, confirmed — records of trial court and First Appellate Court to be sent back along with copy of judgment.