Negotiable Instruments Act – Section 138 – Dishonour on Ground of Signature Mismatch – Whether Offence – Appellant supplied chemicals to respondent-company and 117 post-dated cheques issued by the company's authorised signatories were dishonoured by the bank on the ground that drawers' signatures were incomplete, no image was found, or signatures did not match – High Court quashed 40 complaints relying on Vinod Tanna, holding that Section 138 is attracted only in the two contingencies of insufficiency of funds or exceeding arranged amount – Held: High Court erred; dishonour on the ground of signature mismatch constitutes an offence under Section 138; the expression "amount of money is insufficient" is a genus and dishonour for reasons such as account closed, payment stopped, referred to drawer, or signatures not matching are all species of that genus [Paras 7, 8, 15].

Section 138 NI Act – Purposive Interpretation – Penal Provisions Also Remedial – Section 138 being a penal provision which is also remedial in nature must not be given a narrow or literal interpretation that would defeat the legislative object of inculcating faith in the efficacy of banking operations and credibility of negotiable instruments – A construction that would render Section 138 a dead letter or otiose must be eschewed; if more than one construction is possible, the Court must choose that which preserves the workability and efficacy of the statute – Relied upon: NEPC Micon Ltd. v. Magma Leasing Ltd., (1999) 4 SCC 253; Modi Cements Ltd. v. Kuchil Kumar Nandi, (1998) 3 SCC 249 [Paras 8, 9, 10].

Section 138 – Deliberate Acts of Omission or Commission – Change of Mandate – Where after issuance of cheques the company changes the mandate of authorised signatories resulting in dishonour, there is no qualitative difference between such dishonour and dishonour due to account closure, stop payment instructions, or change of specimen signatures – So long as the change is brought about with a view to preventing the cheque from being honoured, the dishonour constitutes an offence under Section 138, subject to the other prescribed conditions – However, dishonour on account of ordinary changes in the course of business does not by itself constitute an offence; the drawer must thereafter fail to pay despite statutory notice [Para 15].

Section 138 – Overruling of Vinod Tanna – The High Court's reliance on Vinod Tanna & Anr. v. Zaher Siddiqui & Ors., (2002) 7 SCC 541 was misplaced as that decision was itself founded on Electronics Trade & Technology Development Corporation Ltd. v. Indian Technologists (1996) 2 SCC 739, which had been specifically overruled by the three-Judge Bench in Modi Cements Ltd. v. Kuchil Kumar Nandi, (1998) 3 SCC 249 – The net effect is that dishonour on account of stopped payment, regardless of whether with or without notice, attracts Section 138 [Para 16].

Liability of Authorised Signatories – Section 141 NI Act – Signatories who had resigned from their positions before dishonour cannot escape prosecution merely by taking a different line of defence from the company – The authorised signatory of a cheque which is dishonoured is clearly responsible for the incriminating act and is covered under Section 141(2) – Relied upon: National Small Industries Corporation Ltd. v. Harmeet Singh Paintal, (2010) 3 SCC 330; S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla & Anr., (2005) 8 SCC 89 [Para 18].

Section 139 NI Act – Statutory Presumption – Rebuttable – Stop Payment Cases – Concurring judgment (Gyan Sudha Misra, J.) – Section 139 raises a rebuttable presumption in favour of the holder that the cheque was received for discharge of a debt or liability – In cases of stop payment where the drawer had sufficient funds, the offence under Section 138 is made out but is subject to rebuttal under Section 139; the accused must show that stop payment instructions were issued for valid causes including absence of any existing debt or liability – Sections 138 and 139 must be given harmonious construction; stop payment cases where sufficient funds exist are a special category where the burden of rebuttal lies on the accused and the standard of proof is preponderance of probabilities – Relied upon: Rangappa v. Sri Mohan, (2010) 11 SCC 441; M.M.T.C. Ltd. v. Medchl Chemicals and Pharma (P) Ltd., (2002) 1 SCC 234; Goaplast (P) Ltd. v. Chico Ursula D'souza, (2003) 3 SCC 232 [Paras 1–10 of concurring judgment].

Decision: Appeals allowed – Orders of the Gujarat High Court set aside – Special criminal applications filed by respondents dismissed – Trial Court directed to proceed with trial of complaints expeditiously – Nothing in the judgment to be taken as expression of final opinion on merits.

Constitution of India - Article 145(4) - Supreme Court Rules 2013 - Order XII Rules 1 and 3 - Finality of Judgment - Dictation in Open Court versus Signed Order - Applicants sought declaration that court dictation to the Court-master was binding and the subsequent signed order was invalid - Held - The digitally signed order is the only final version of the Court's decision - Dictation to a Court-master is a rough draft or skeletal framework subject to multiple rounds of correction and refinement in chambers - Refinement of a draft prior to signing is a practical necessity due to docket explosion and does not constitute a material change requiring re-hearing - [Paras 4-9, 15, 27-29]

Practice and Procedure - Miscellaneous Applications - Maintainability - Post-disposal applications for clarification or modification - Applicants sought to rewrite the order under the garb of clarification - Held - Miscellaneous applications in disposed of matters are maintainable only for correcting clerical or arithmetical errors or in rare cases where the order is executory and impossible to implement - Registry directed not to list such applications without a specific averment on oath as required by Circular dated 03.01.2025 - Application dismissed as an abuse of process with exemplary costs - [Paras 13-19, 31]

Judicial Discretion - Power to Alter Judgment - Locus Paenitentiae - Held - A Judge has the right to change their mind and alter a draft judgment at any time until it is formally signed and delivered - Signing is not a mere formality but the act that crystallizes the decision into a full-fledged judgment - While material changes generally require re-hearing, ancillary directions like status quo or disposal of an underlying writ petition after fresh orders are passed by the State do not warrant such procedure - [Paras 10-12, 24-26, 31-32]

Decision: Miscellaneous application dismissed as not maintainable and on merits – Exemplary cost of Rs 2000 each imposed on the Applicants payable to the Supreme Court Legal Services Committee within four weeks.

Motor Vehicles Act 1988 - Notional Income - Engineering Student - Determination of earning capacity - The deceased was a meritorious third-year Mechanical Engineering student with a diploma in Plastic Engineering and AutoCAD certification - Held - Notional income of an engineering student cannot be equated to minimum wages of an unskilled worker - Income assessed at 12000 per month for an accident occurring in the year 2000 - [Paras 23-26]

Motor Vehicles Act 1988 - Future Prospects - Notional Income - Denial by High Court - High Court refused future prospects on grounds that income was notional - Held - Approach is contrary to principles in Sarla Verma and Pranay Sethi - Denial of future prospects and personal/living expense deductions solely because income is notional is erroneous - 40 percent future prospects added as deceased was below 40 years - [Paras 14-15 and 27]

Motor Vehicles Act 1988 - Dependency and Multiplier - Calculation - Monthly income of 12000 plus 40 percent future prospects equals 16800 - One-half deducted for personal and living expenses as deceased was a bachelor - Monthly dependency at 8400 and annual dependency at 100800 - Multiplier of 18 applied as deceased was 22 years old - Total loss of dependency computed at 1814400 - [Paras 13 and 27]

Motor Vehicles Act 1988 - Conventional Heads - Non-pecuniary damages - Enhancement - Awarded compensation under conventional heads as per Pranay Sethi and Magma General Insurance - Sum of 15000 awarded for loss of estate - 40000 for filial consortium - 30000 for funeral expenses considering transportation of the body - [Paras 28-29]

Motor Vehicles Act 1988 - Property Damage - Motorcycle - Assessment of loss - Tribunal and High Court applied high depreciation to a two-year-old vehicle - Held - Loss to be ascertained as per the surveyor report at 25670 instead of 18000 - [Paras 30-31]

Decision: Appeal allowed – Compensation enhanced to 19,25,070 with interest at 7.5 percent per annum from the date of filing till realization – Respondents held jointly and severally liable to pay within eight weeks.

Matrimonial Law - Cruelty and Desertion - Professional autonomy of wife - Appellant a qualified dentist established her clinic in Ahmedabad while husband was posted as an Army Officer in Kargil - Family Court held that the wife's failure to reside at the husband's place of posting and opening a clinic without informing him amounted to cruelty and desertion - Held - A well-educated and professionally qualified woman cannot be expected to be confined within rigid boundaries of matrimonial obligations alone - Marriage does not eclipse her individuality nor subjugate her identity - A woman cannot be treated as a mere appendage to the household of the husband - Pursuit of professional fulfilment and responsible parenthood for a child with medical complications are legitimate choices - Characterising such conduct as cruelty or desertion reflects an archaic and regressive mindset - Findings of cruelty and desertion expunged - [Paras 3-7, 20-27, 31]

Code of Criminal Procedure 1973 - Sections 195 and 340 - Perjury - Prosecution in matrimonial disputes - Husband sought prosecution of wife for alleged false statements in maintenance proceedings - Held - Allegations appear instigated by personal vendetta and spiteful approach fuelled by matrimonial acrimony - Grievances stem from a hyper-technical dissection of the material on record - No justifiable reason to direct prosecution - [Paras 35-37]

Matrimonial Law - Irretrievable Breakdown of Marriage - Divorce - Parties living separately with intense acrimony and respondent-husband remarried - Appellant-wife not hopeful of reconciliation - Held - While findings of cruelty and desertion are expunged - the decree of divorce is maintained on the ground of irretrievable breakdown of marriage - [Paras 30-32]

Decision: Civil Appeal partly allowed – Findings of cruelty and desertion expunged – Divorce decree maintained on the ground of irretrievable breakdown – SLP(Civil) No. 28451 of 2024 dismissed.

Insolvency and Bankruptcy Code 2016 - Section 61 - Condonation of Delay - Refiling of Appeal - Mandatory requirement of certified copy - Respondent filed appeal on last day of condonable period without certified copy and without applying for one - Refiled after 150 days without curing the defect - Respondent applied for certified copy only months after refiling - Held - Filing an appeal without applying for a certified copy before the limitation period runs out means there was no filing in the eyes of law - A diligent litigant is expected to apply for the copy before the period expires to seek exclusion of time - The appeal was not merely defective but wholly incompetent - NCLAT order condoning delay set aside - [Paras 1-11]

National Company Law Appellate Tribunal Rules 2016 - Rules 14 and 22 - Presentation of Appeals - Curing of defects - Rule 22(2) mandates every appeal be accompanied by a certified copy of the impugned order - Rule 14 enabling exemption does not confer an automatic right to dispense with compliance - Filing an application for a certified copy is an indication of diligence in pursuing litigation - Held - Refiling an appeal without the certified copy or an exemption application is incurably tainted - NCLAT failed to ascertain if the appeal was instituted in accordance with norms before extending indulgence - [Paras 6-10]

National Company Law Appellate Tribunal Rules 2016 - Rule 26 - Curing of defects - Time limit for refiling - Rule 26(2) stipulates 7 days for curing defects - Respondent refiled after 150 days - Held - Even after refiling the appeal remained defective beyond redemption as the certified copy of the NCLT order sought to be impugned was not filed - [Paras 3-6]

Decision: Appeals allowed – Order dated 10.11.2025 passed by the NCLAT set aside – Respondent's appeal rejected as incurably tainted at the threshold.

Criminal Law - Code of Criminal Procedure 1973 - Section 482 - Quashing of criminal proceedings - Principles and Guidelines - Bhajan Lal precedent - Held - High Court failed to exercise inherent power to quash proceedings when allegations even if taken at face value do not constitute any offence - [Paras 10-20]

Indian Penal Code 1860 - Sections 405 and 406 - Criminal Breach of Trust - Entrustment - Fiduciary obligation - Billing for diagnostic test not performed - Held - payment of hospital bill does not create a fiduciary obligation regarding handling of property - foundational ingredients of entrustment and dishonest misappropriation not satisfied - [Para 11]

Indian Penal Code 1860 - Section 420 - Cheating - Dishonest Intention - Deception from inception - Billing error corrected by hospital - Held - billing discrepancy appears to be inadvertence rather than dishonest intention - hospital communicated decision to refund amount upon mistake being pointed out - allegation of cheating misplaced - [Para 12]

Indian Penal Code 1860 - Section 120B - Criminal Conspiracy - Sustainability - Foundational offences - Held - where foundational offences of criminal breach of trust and cheating are non-existent the incidental charge of criminal conspiracy is unsustainable - [Para 13]

Indian Penal Code 1860 - Section 504 - Intentional Insult - High Court Observation - Improper conduct by hospital staff - Held - no occasion for High Court to construe general averments and elevate them to the commission of an offence under Section 504 IPC - [Paras 14-15]

West Bengal Clinical Establishments (Registration, Regulation and Transparency) Act 2017 - Sections 29 and 34 - Clinical Establishments - Service Grievances - Billing Practices - Held - legislative scheme establishes disputes concerning billing or supply of records are primarily deficiencies for which compensation is payable under Section 29 - criminal prosecution under Section 34 not permissible by merely mentioning the section without disclosing how criminal offence was committed - [Paras 16-19]

Decision: Appeals allowed – High Court order set aside – Criminal complaint in Complaint Case No C-533 of 2021 quashed – Quashing of criminal complaint to have no bearing on civil or statutory remedies.

Income Tax Act 1961 - Sections 147 and 148 - Reassessment - Reason to Believe - Tangible Material - Validity of reopening - Held - Reopening of assessment is conditional on the existence of a reason to believe that income has escaped assessment based on tangible material - The Assessing Officer cannot review an assessment or reopen it on a mere change of opinion - In the present case - the original assessment orders for AY 2007-08 and 2008-09 accepted the assessee's declaration at face value without any inquiry into the nature of receipts from the Association of Persons (AOP) - Discovery of the AOP Agreement and Director’s statement during a Survey under Section 133A provided fresh information revealing that the receipts were a share of gross revenue and not profit - This constitutes tangible material and not a change of opinion - Reopening held valid - [Paras 56-84, 106-114]

Income Tax Act 1961 - Section 148 - Validity of Reassessment - Reasons Recorded - Held - The validity of reopening must be tested solely on the basis of the reasons recorded at the time of issuing the notice under Section 148 - Documents not referred to in those reasons cannot be used to justify the reopening as it deprives the assessee of a fair opportunity to file objections - High Court erred in AY 2008-09 by relying on extraneous material (Assessment Orders of the AOP) not mentioned in the reasons recorded - However - since the recorded reasons independently established tangible material - the ultimate conclusion upholding the reopening is maintained - [Paras 85-87, 115-118]

Income Tax Act 1961 - Interpretation of Clauses - Question of Law - AOP Agreement - Share of Revenue vs Share of Profit - Held - Interpretation of a contractual clause which forms the foundation of the rights of parties is a question of law and not of fact - The Court is not bound by the interpretation adopted by the ITAT or High Court in parallel proceedings between the Revenue and the AOP - Literal reading of Clause 7 of the AOP Agreement - supported by the Director’s statement - confirms that the parties intended to share gross revenue - [Paras 93-96, 119-121]

Income Tax Act 1961 - Sections 86 and 67A - Taxability of share from AOP - Diversion of Income by Overriding Title - Held - Profit is the surplus remaining after all expenses are deducted from gross receipts - Under Clause 7 of the AOP Agreement - the assessee was entitled to 35% of gross sale proceeds upfront and insulated from all project expenses - which were burdened on the other member's 65% share - This receipt lacks the essential characteristics of profit and is a business receipt arising from the surrender of development rights - The 35% share was intercepted and diverted to the assessee by overriding title before it could assume the character of income in the hands of the AOP - Consequently - the amount is taxable in the hands of the assessee as business revenue and is not exempt under Section 86 - [Paras 97-105, 122-127]

Decision: Civil Appeal No. 19487 of 2017 (Revenue) is allowed – Civil Appeal No. 744 of 2013 (Revenue) is allowed – Civil Appeal No. 9107 of 2012 (Assessee) is dismissed – Notice for reopening of assessment for AY 2007-08 held valid – Income from AOP held taxable in the hands of the assessee for AY 2008-09 and 2009-10.

Canara Bank Officer Employees’ (Discipline and Appeal) Regulations 1976 - Regulation 10 - Common Proceedings - Statutory Interpretation - Interpretation of the word may - Held - The word may in Regulation 10 is directory and not mandatory - Construing may as shall would remove management discretion in dynamic situations where roles of charge-sheeted employees differ - Regulation 10 is a facilitative provision and does not vest any right in a delinquent officer to insist on joint or common proceedings - Failure to hold a joint enquiry does not vitiate individual disciplinary proceedings - [Paras 15-17]

Service Law - Disciplinary Proceedings - Judicial Review - Natural Justice - Reliance on unexamined witnesses - Enquiry Officer relied on statements of co-accused recorded during preliminary investigation without examining them as witnesses in the departmental enquiry - Respondent provided no opportunity to rebut such material - Held - Findings of the Enquiry Officer were vitiated for want of evidence and violation of natural justice - Scope of judicial review allows interference when findings are based on no evidence or material errors apparent on the face of the record - High Court order setting aside the punishment affirmed on merits - [Paras 9-14]

Interpretation of Statutes - Enabling Words - May vs Shall - Construction of permissive language - Held - May is not understood as must so long as the English language retains its meaning - Enabling words are construed as compulsory only when the object is to effectuate a legal right - In the context of Regulation 10 of 1976 Regulations the provision is directory - [Paras 15-16]

Decision: Civil Appeal disposed of – High Court judgment setting aside the punishment order dated 31.05.2006 affirmed on merits – View taken by High Court regarding Regulation 10 being mandatory is set aside – Appellant directed to settle the account of the Respondent within six weeks.

Criminal Law - Bharatiya Nagarik Suraksha Sanhita (BNS) - Section 193(3) - Police Report - Stay on filing charge sheet - High Court directed investigation to continue but restrained the submission of the police report till pendency of the writ petition - Held - A blanket interim order staying the filing of the charge sheet affects the statutory right and duty of the police to investigate cognizable offences - Such direction is unsustainable and set aside - [Paras 11-16]

Bharatiya Nagarik Suraksha Sanhita 2023 - Section 528 - Constitution of India - Article 226 - Writ Jurisdiction - Quashing of FIR - Distinction between Article 226 and Section 528 BNSS - Writ or order to quash FIR could be issued under Article 226 before cognizance is taken - Once judicial order of taking cognizance intervenes the power under Article 226 is not available but quashing can be sought under Section 528 BNSS or Section 482 CrPC - [Paras 10-15]

Criminal Procedure - Special Investigation Team - SIT - Land Scam - Organized Crime - Society land sold repeatedly by unauthorized persons on forged documents across different states - Held - To foil organized crime perpetrated by land mafia an SIT to be constituted under the supervision of the Chief Secretary of Uttar Pradesh - Fact-finding enquiry to be conducted regarding land alienation without permission of the society - [Paras 17-18]

Indian Penal Code 1860 - Sections 420 467 468 and 471 - Forgery and Cheating - Fraudulent sale of land belonging to Spiritual Regeneration Movement Foundation of India - Dispute between management groups resulting in multiple FIRs and civil litigations - Held - Land scams involving fraudulent practices and illegal activities related to land acquisition erode public trust and hinder socio-economic progress necessitating unimpaired investigation - [Paras 3-12]

Decision: Appeal disposed of - High Court direction staying the filing of the police report under Section 193(3) BNSS set aside - Investigating Officer directed to complete investigation and file report - Special Investigation Team (SIT) to be constituted under the supervision of the Chief Secretary of Uttar Pradesh - SIT to include the Registrar of Societies and submit a report within three months - No coercive action against Respondent No 2 until the SIT report is submitted.