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.

Tenancy Law — Rent Default — Striking Off Defence — Order XV Rule 5 CPC — Remand — Appellants/landlords filed eviction suit for recovery of arrears of rent from November 2020 to June 2021 (Rs. 2,00,000/-) after respondent/tenant defaulted despite revision of rent to Rs. 25,000/- per month — Trial Court struck off defence of tenant for non-compliance with Order XV Rule 5 CPC — High Court allowed revision, granted opportunity to deposit rent at Rs. 1,500/- per month, but subsequently extended time when respondent failed to comply within deadline — Supreme Court finds both courts failed to comprehensively address all relevant aspects — Matter remanded for fresh adjudication [Paras 2–28].

Order XV Rule 5 CPC — Nature of Power — Discretionary, Not Mechanical — Mandatory Provision vs. Judicial Discretion — Power to strike off defence, though couched in mandatory terms, is not to be exercised mechanically — Court must consider whether default is wilful or contumacious, whether there has been substantial compliance, and whether foundational aspects such as the "first date of hearing" have been conclusively determined before invoking penal consequences — Trial Court proceeded in mechanical manner without addressing these aspects [Paras 15–20, 24].

First Date of Hearing — Meaning and Significance — Under Order XV Rule 5 CPC, the "first date of hearing" is not a mere formal or procedural date but the date on which the Court applies its mind to the contentions in the pleadings for the purpose of framing issues — In absence of clear determination of such date, the very foundation for invoking Order XV Rule 5 CPC becomes uncertain — Trial Court failed to conclusively determine this threshold question [Paras 19–20].

Procedural Law — Handmaid of Justice — Extension of Time — Discretion of Court — High Court exercised discretion to extend time for compliance, taking into account the bona fide explanation that respondent's counsel had gone abroad — Delay of seven days found neither gross nor wholly unexplained — Procedural provisions must be construed to advance the cause of justice and not to defeat it — However, High Court erred in not reconciling its conditional earlier order with the subsequent indulgence granted [Paras 21–24].

Remand — Directions to Trial Court — Trial Court directed upon remand to: (i) determine the "first date of hearing" in accordance with law; (ii) examine whether there has been due or substantial compliance with Order XV Rule 5 CPC; (iii) consider whether the default, if any, is wilful or bona fide; and (iv) pass a reasoned order after affording adequate opportunity to both parties — Matter to be disposed of expeditiously, preferably within six months — No opinion expressed on merits [Paras 26–29].

Decision: Appeal disposed of — Impugned orders of the Allahabad High Court set aside — Matter remanded to the Trial Court for fresh adjudication of the application under Order XV Rule 5 CPC in light of observations made by the Supreme Court — Trial Court to dispose of the matter preferably within six months from receipt of order.

Criminal Law — Premature Release — Remission — Non-Speaking Order — MHA Rejection — Petitioner convicted under Sections 120-B/302 IPC for murder and sentenced to life imprisonment — Conviction affirmed by High Court of Uttarakhand and SLP dismissed by Supreme Court — After over twenty-two years of incarceration, State of Uttarakhand recommended premature release — Ministry of Home Affairs by impugned letter rejected the recommendation without assigning any reason — Held: Impugned letter is arbitrary, non-speaking, and unsustainable in law — Set aside and quashed — Petitioner treated as having been prematurely released [Paras 5, 9, 10].

Non-Speaking Order — Natural Justice — Requirement of Reasons — Any order affecting rights of a person, particularly his liberty, must be supported by reasons and must reflect due application of mind — Recording of reasons is not an empty formality but a safeguard against arbitrariness ensuring transparency, fairness, and accountability — Absence of reasons renders an order bald and makes it impossible to ascertain whether relevant factors were duly considered — Impugned letter merely stated that Competent Authority "does not concur" with the proposal without disclosing any basis — No discussion of petitioner's conduct, applicable remission policy, or specific adverse material — Fails minimum requirement of a reasoned order and amounts to complete non-application of mind — Cryptic rejection violates principles of natural justice and frustrates right to seek effective judicial review [Paras 5, 5.1, 5.2].

Remission — Nature and Scope — Distinction from Pardon, Commutation and Reprieve — Remission merely reduces period of sentence without altering its character — Neither the conviction nor the guilt of the offender is affected — Sentence imposed by court remains intact except to the extent convict is relieved from undergoing entire term — Distinct from pardon which affects the guilt itself, amnesty which is a general pardon, reprieve which is a stay of execution, respite which substitutes a lesser sentence, and commutation which substitutes one form of sentence with a lighter one — Executive power of remission abridges enforcement of judgment but does not alter the judgment itself — No convict can claim remission as an absolute constitutional right except under Articles 72 and 161 — Existence of remission policy confers legal entitlement to be considered in terms of that policy — All persons falling within its ambit are entitled to equal treatment [Paras 6, 6.1, 6.2, 6.3].

Remission — Grounds for Grant — Relevant Considerations — Heinousness of Offence Cannot Be Sole Ground for Denial — Factors governing grant of remission: (i) whether offence is an individual act without affecting society at large; (ii) whether there is chance of future recurrence; (iii) whether convict has lost potentiality of committing crime; (iv) whether any fruitful purpose is served by continued confinement; (v) socio-economic condition of convict's family — Denial of remission cannot rest solely on heinousness of crime — Gravity of offence stands exhausted at stage of sentencing — Remission is not an extension of the sentencing process but a distinct executive function concerned with prisoner's present conduct, evidence of reformation, and prospects of reintegration — Assessment of likelihood of reoffending must be founded on antecedents and conduct in custody and not merely on nature of offence — Emotive retribution is incompatible with constitutional values [Paras 7, 7.1, 8].

Remission — Parity — Co-accused Released — Differential Treatment — One co-accused Amarmani Tripathi granted premature release by Government of U.P. after undergoing approximately seventeen years of actual imprisonment and twenty years with earned remission — Petitioner having undergone over twenty-two years denied similar relief — Once a co-accused in the same offence has been granted premature release after undergoing a lesser period, denial of similar consideration to the petitioner requires cogent, rational, and clearly discernible distinguishing circumstances — In absence of such reasons, differential treatment falls foul of constitutional requirement of fairness and non-arbitrariness — No such reasons forthcoming [Para 8.3].

Remission — Reformative Theory — Object of Punishment — Good Conduct During Custody — Object of punishment is not merely retribution but also reformation and rehabilitation of offender to enable eventual reintegration into society — Petitioner's custody certificate dated 16.05.2025 records good conduct during incarceration — State Government's recommendation for premature release indicates satisfactory conduct and rehabilitation — Continued incarceration contrary to reformative object underlying remission policies — Constitutional Court exercising judicial review may itself intervene and secure compliance through mandamus where executive authorities fail to discharge statutory obligations despite judicial directions [Paras 6.4, 8.4].

Decision: Writ Petition allowed — Impugned letter dated 09.07.2025 of the Ministry of Home Affairs set aside and quashed — Petitioner treated as having been prematurely released — Surrender not required as petitioner already on interim bail — Miscellaneous Applications disposed of.

Civil Law - Hindu Succession — Daughters' Right in Intestate Father's Property — Second Order VII Rule 11 Application — Res Judicata — Section 6(5) as Saving Clause — Independent Right under Section 8 — Propositus died intestate in 1985 leaving three daughters and four sons — Daughters filed suit in 2007 for partition claiming 1/8th share each — First plaint rejection application dismissed by High Court in 2013 holding suit maintainable on ground that daughters had right in father's share under Section 8 — Second application filed in 2021 by legal representatives of one defendant relying on Vineeta Sharma to contend Section 6(5) operates as a complete bar — Trial Court dismissed second application on ground of res judicata — High Court allowed revision and rejected plaint — Held: High Court erred on all three counts; impugned order set aside and plaint restored [Paras 3, 70, 71].

Res Judicata — Interlocutory Res Judicata — Second Order VII Rule 11 Application — Same Issue — Common Interest of Defendants — Section 11 Explanation VI CPC — Issue whether plaint disclosed cause of action notwithstanding registered Partition Deed was directly and substantially decided by High Court in RFA No. 168 of 2009 in 2013 and attained finality — Second application raising identical issue barred by principle of interlocutory res judicata — High Court's reasoning that res judicata did not apply as first application was by Defendants 1 to 3 while second was by legal representatives of Defendant 4 rejected — All defendants share common interest, defend same Partition Deed, assert same plea and litigate under same title within meaning of Explanation VI to Section 11 CPC — Mere invocation of additional sub-clauses of Order VII Rule 11 in second application does not take matter outside scope of res judicata [Paras 35–42].

Change in Law — Vineeta Sharma — Res Judicata Exception — Whether Applicable — Exception that subsequent change in law can render earlier decision on pure question of law ineffective as res judicata applies only where legal basis of earlier decision is undermined — 2013 order proceeded on independent right of daughters as Class I heirs under Section 8, not on coparcenary rights under 2005 Amendment — Vineeta Sharma deals with scope of 2005 Amendment and coparcenary rights; does not alter settled position that upon intestate death of Hindu male property devolves under Section 8 on all Class I heirs including daughters — Basis of 2013 order wholly undisturbed by Vineeta Sharma — High Court's reasoning that Vineeta Sharma constituted change in law overriding res judicata rejected as erroneous [Paras 40–42].

Section 6(5) Hindu Succession Act — Nature — Saving Clause, Not Jurisdictional Bar — Scope of Order VII Rule 11 — Section 6(5), read with its Explanation, saves from retroactive reach of 2005 Amendment only those partitions effected before 20.12.2004 by registered deed or court decree — Does not create jurisdictional bar to institution of suit for partition — Distinction between a bar and a saving clause legally significant: bar prevents court from entertaining suit at all; saving clause provides defence on merits to be proved by party asserting it — Whether a valid partition within meaning of Section 6(5) has been effected and is binding on daughters who were not parties to it are contested questions of fact and law requiring trial — Conflating existence of registered deed with conclusion that partition is valid and binding on all persons impermissible at Order VII Rule 11 stage [Paras 43, 53–58].

Section 8 Hindu Succession Act — Independent Right of Daughters as Class I Heirs — Unaffected by Section 6(5) — Proviso to Erstwhile Section 6 — Upon intestate death of propositus in 1985 leaving behind daughters as Class I heirs, proviso to erstwhile Section 6 attracted — Notional partition deemed to have taken place immediately before death — Deceased's undivided share devolved by intestate succession under Section 8 on all Class I heirs including daughters — This right accrued in 1985 under unamended Act, wholly independent of and predating 2005 Amendment — Section 6(5) saves pre-2004 partitions from retroactive reach of new coparcenary rights under Section 6(1) only; does not and cannot extinguish pre-existing rights of Class I heirs accrued under Section 8 — Plaint need not recite specific section number; suffices that bundle of facts pleaded brings case within Section 8 [Paras 59–67].

Revisional Jurisdiction — Section 115 CPC — Scope — High Court exceeded permissible scope of revisional jurisdiction by conducting independent and de novo appraisal of merits of dispute, scope of Partition Deed and rights of parties under Section 6(5) at threshold stage — Trial Court's order dismissing second application was reasoned, correctly applied res judicata and rightly held Section 6(5) does not bar suit — High Court's interference therewith unwarranted [Para 68].

Decision: Appeal allowed — Impugned judgment and order dated 29.08.2024 of the High Court of Karnataka in CRP No. 144 of 2023 set aside — Order dated 15.11.2022 of the Trial Court dismissing I.A. No. IV restored — Plaint in O.S. No. 5352/2007 restored to file — Status quo with respect to subject properties to continue until further orders of Trial Court — Trial Court to proceed expeditiously — No order as to costs.

Motor Accidents Claims – Mediclaim/Medical Insurance – Deductibility from MACT Compensation – Conflicting High Court Views – Settled by Supreme Court – Claimant received medical expense reimbursement under a Mediclaim policy and also claimed the same head of loss before the MACT – Three-Judge Bench of the Bombay High Court held that Mediclaim amounts are not deductible from MACT compensation – Insurer appealed – Supreme Court examined conflicting views across multiple High Courts and settled the law – Held: Amount received under a Mediclaim/medical insurance policy is not deductible from compensation awarded under the Motor Vehicles Act, 1988 including under the head of medical expenses – The two operate on entirely different footings, one being a statutory entitlement and the other a contractual benefit flowing from premiums paid – Appeal dismissed — Matter remanded [Paras 2–3, 15–16].

Double Benefit – Principle Against – Scope and Limits – Just Compensation – The principle against double benefit mandates that a claimant cannot recover twice for the same loss, as that would amount to unjust enrichment – Compensation under the MVA must be "just compensation" and not a windfall – However, where the additional benefit is independent in nature — arising from a contract supported by consideration and not merely triggered by the accident — it cannot be treated as a substitute for the same loss and thus is not liable for deduction – Employment-related benefits such as provident fund, gratuity and pension, being accrued entitlements, are similarly not deductible [Paras 7–7.2.1].

Statutory Benefit vs. Contractual Benefit – Distinction – A statutory benefit flows from legislation enacted by the State and is available to all persons meeting its prerequisites — it requires no negotiation or consent and can only be altered by amending the law – A contractual benefit, on the other hand, flows from private agreement between parties and is enforceable under the law of contract — it is limited to parties to the contract and depends on consent – A Mediclaim policy is purchased voluntarily by a person against the uncertainties of life and is not confined to accidental coverage alone — the contractual reimbursement thereunder is independent of and not eclipsed by the MACT claim – Compensation under the MVA, being beneficial legislation guided solely by the principle of just and fair compensation without strict monetary limits, stands on a higher pedestal than the contractual benefit under a Mediclaim policy [Paras 7.3.1–7.3.3, 9–11].

Helen Rebello – Patricia Jean Mahajan – Shashi Sharma – Sebastiani Lakra – Swaminathan – Considered and Distinguished – In Helen Rebello, life insurance proceeds were held not deductible as they bore no correlation to the accidental death – In Patricia Jean Mahajan, social security and insurance proceeds were held not deductible in the absence of nexus with accidental death – In Shashi Sharma, where both compensation grounds had statutory force, deduction was directed to avoid double payment under the same head – In Sebastiani Lakra, benefits under the Employees Family Benefit Scheme were held not deductible as they were not statutory – In Swaminathan, deduction of medical expenses reimbursed by an employer was affirmed on its specific facts — Court held that Swaminathan does not aid the insurer as its observation arose in a specific context and a Mediclaim policy was not involved therein [Paras 8.1–8.5].

Judicial Inconsistency – Duty of Bar and Bench – The Court noted with concern that single judges and division benches of the same High Court had taken diametrically opposite views on the deductibility of Mediclaim amounts — illustrated with tabular reference to conflicting decisions across the Bombay, Delhi, Kerala, Punjab & Haryana, Madhya Pradesh and Madras High Courts – Judicial inconsistency and uncertainty impede counsel, burden courts and undermine definitive outcomes – Counsel have a duty to bring to the Court's notice judgments both favourable and adverse to their case — the Court itself bears an independent tri-fold duty to apply correct law, ensure consistency with precedent, and avoid per incuriam decisions – Both Bar and Bench are jointly responsible for minimising problems arising from inconsistent judicial opinion [Paras 12–14].

Decision: Appeal dismissed as meritless — Mediclaim/medical insurance amounts not deductible from MACT compensation — Matter remanded to the High Court for fresh determination consistent with the judgment — Pending applications disposed of [Paras 15–16].

Rent Law – Eviction – Bona Fide Need – Co-Landlord – Sufficiency of Pleadings and Proof – Appellant filed eviction suit against tenants' legal heirs in respect of Flat No.2, Memorare Building, Chembur, Bombay on grounds of bona fide need under Section 13(1)(g) read with Section 13(2), availability of alternative accommodation under Section 13(1)(l) and change of user under Section 13(1)(k) of the Bombay Rent Act – Small Causes Court decreed the suit; Appellate Bench affirmed – High Court, in revision, set aside concurrent findings holding pleadings insufficient and that no landlord-tenant relationship was established – Held: Plaint contained all material facts establishing co-landlordship and statutory grounds for eviction; evidence adduced by way of affidavit of examination-in-chief constituted proof of facts pleaded and was not required to be independently pleaded – Both tests of pleading and proof stand satisfied – High Court erred in interfering with concurrent findings – Appeal allowed [Paras 35–40, 61].

Pleadings – Distinction Between Pleading and Proof – Facta Probanda and Facta Probantia – Pleading denotes formal assertion of material facts; proof is adduction of evidence to establish those facts – Material facts on which a party relies (facta probanda) must be stated in pleadings; evidence or facts by which material facts are proved (facta probantia) need not be pleaded – Share certificates, family arrangement and related documents tendered in evidence constituted facta probantia and were admissible to prove facts already pleaded in the plaint – No defect in pleadings on that count [Paras 26–34, 40].

Deficiency in Pleadings – Cannot Be Raised for First Time in Appeal – Where parties, despite deficiency in pleadings, knew the case and proceeded to trial by adducing evidence on the issues involved, it is not open to raise the question of absence of pleadings in appeal – Parties were fully aware of the case throughout trial; objection to pleadings first raised before High Court was, therefore, not entertainable [Para 41].

Share Certificate – Interest in Land Includes Building – Section 8, Transfer of Property Act – Share certificate pertaining to the land of the Suit Building conveys interest in the building constructed thereon as well, unless a contrary intention appears – Appellant held share certificates jointly with her siblings; DW-1 admitted the building was constructed by the Appellant's father – Appellant conclusively proved her status as co-owner of the Suit Building and co-landlord within Section 5(3) of the Bombay Rent Act as on the date of filing the suit [Paras 42–46].

Oral Family Arrangement – Reliance Permissible – Subsequent Events – Family arrangement can be entered into by unregistered oral agreement and is enforceable on principles of special equity – Appellant's deposition regarding the family understanding that flat Nos.5 and 6 were earmarked for her brothers and the Suit Premises for her exclusive use upon eviction was a subsequent development that the Court was entitled to take cognisance of, provided rules of fairness were observed – Technical considerations must yield to peace and harmony in enforcement of family arrangements [Paras 47–50].

Bona Fide Need – Temporary Occupation of Another Flat Does Not Negate Need – Comparative Hardship – Appellant's temporary co-occupation of flat Nos.5 and 6 during pendency of the suit did not negate her bona fide need for the Suit Premises – Said flats were insufficient to accommodate the Appellant's family and her brothers' families in light of the oral family arrangement – Tenants' legal heirs had acquired alternative accommodation; Defendant No.2's sale of alternative flat during pendency of suit indicated deliberate attempt to defeat eviction – Respondent No.1 resides and owns property in Pune; his wife resides in Norway; no genuine need for the flat in Chembur established – Greater hardship lies with the Appellant who has no accommodation in Mumbai [Paras 51–60].

Decision: Appeal allowed – Impugned judgment dated 23.06.2025 of the High Court of Bombay in Civil Revision Application No. 308 of 2019 set aside – Judgment and decree dated 14.09.2007 of the Small Causes Court, Bombay in Rent and Eviction Suit No. 411/861 of 1996 restored.

Taxation — Inter-State Sale of Natural Gas — Constitutional Competence — VAT — CST Act — Reliance Industries Limited extracted natural gas from the KG-D6 basin off the coast of Andhra Pradesh under a Production Sharing Contract with the Government of India — Gas was delivered to buyers at Gadimoga, Andhra Pradesh, under Gas Sales and Purchase Agreements (GSPA), whereafter it was transported through common carrier pipelines operated by RGTIL and GAIL to buyers' facilities in Uttar Pradesh — State of Uttar Pradesh levied VAT treating the transaction as an intra-State sale on the ground that goods were unascertained until receipt at Auraiya — High Court quashed assessment orders — Held: Sale of natural gas concluded at Gadimoga where title and risk passed to buyers; movement of gas from Andhra Pradesh to Uttar Pradesh occasioned by the contract of sale constituted an inter-State sale under Section 3(a) of the CST Act; the State of Uttar Pradesh lacked legislative competence to impose VAT on such transactions [Paras 3, 18, 77–89].

Federalism — Fiscal Federalism — Taxing Powers of Union and States — Mutual Exclusivity — The Constitution of India maintains a scheme of mutual exclusivity in the allocation of taxing powers between Parliament and State Legislatures — Entry 92-A of List I and Entry 54 of List II, read with Articles 269 and 286, exclusively vest in Parliament the power to levy tax on sales or purchases in the course of inter-State trade or commerce — States cannot by legislative fiction or contractual stipulation convert an inter-State sale into an intra-State sale or create territorial nexus to tax such transactions — Any construction leading to overlapping of taxation is to be eschewed [Paras 26–57].

CST Act — Section 3 — Explanation 3 — Clarificatory Nature — Retrospective Operation — Parliament inserted Explanation 3 to Section 3 of the CST Act by Finance Act, 2016 (Act 28 of 2016) to clarify that gas transported through a common carrier pipeline, co-mingled and fungible, introduced in one State and taken out in another, constitutes inter-State movement — Held: Explanation 3 was clarificatory in nature, added ex abundanti cautela pursuant to the Cabinet Committee on Economic Affairs decision dated 25.03.2015 and Office Memorandum dated 21.07.2015 — It did not alter the existing legal position and operates retrospectively from the date the main provision came into force — Argument that it applies only prospectively repelled [Paras 61–66].

CST Act — Section 3 vis-à-vis Section 4 — Precedence — Co-mingling of Gas in Common Carrier Pipeline — Unascertained Goods — The State of Uttar Pradesh contended that gas co-mingled in the common pipeline became unascertained goods, appropriated only at Auraiya, making the sale an intra-State sale under Section 4(2) of the CST Act — Held: Section 4 is expressly subject to Section 3 — Once a transaction satisfies the conditions of inter-State sale under Section 3, Section 4 has no independent application — For purposes of Section 3(a), there is no distinction between ascertained and unascertained goods if the goods have come into actual physical existence at the time of sale — Co-mingling of gas in a common carrier pipeline, being a statutory obligation under the PNGRB Regulations, 2008, does not affect the inter-State character of the concluded sale [Paras 67–86].

GSPA and GTA — Delivery Point — Title and Risk — Passing of Property — On a detailed examination of the GSPA and GTA, the delivery point of natural gas is unambiguously at Gadimoga in Andhra Pradesh — Title and risk pass to buyers at Gadimoga upon delivery to the transporter — The seller's role concludes at Gadimoga — The GTA is an agreement solely for carriage and not for sale — Transporter acquires no title in the gas — Re-metering at Auraiya is a mere incident of transportation attendant upon a sale already fully completed in another State and cannot create a fresh occasion for levy of VAT in Uttar Pradesh [Paras 78–86].

Estoppel — Approbate and Reprobate — Form-C — The State of Uttar Pradesh itself recognised the transactions as inter-State sales by issuing Form-C to buyers under Rule 12 read with Section 8(4) of the CST Act — Having acknowledged the inter-State character of the transaction, the State cannot approbate and reprobate by subsequently seeking to impose VAT on the same transactions [Para 83].

Public Trust Doctrine — Scope and Limits — The State of Uttar Pradesh argued that Reliance Industries acted as agent of the Union of India under the Public Trust Doctrine, making the sale complete only at the terminating point in Uttar Pradesh — Held: The Public Trust Doctrine, rooted in environmental jurisprudence under Articles 21, 48-A and 51-A(g), is concerned with normative standards of resource management and governance — It does not override the constitutional scheme of legislative competence or create taxing jurisdiction where the Constitution has not conferred any — The doctrine cannot be expanded to enable multiple taxation by a State upon a single inter-State transaction [Para 88].

Decision: Civil Appeal No. 3910 of 2016 dismissed — High Court's order quashing assessment order dated 11.06.2010 and directing refund of tax affirmed — Civil Appeal Nos. 3913, 3914 and 3915 of 2016 dismissed in terms of the reasoning in Civil Appeal No. 3910 of 2016.

Criminal Law - MPID Act – Scope of "Deposit" – "Financial Establishment" – Loan Nomenclature Irrelevant – Appellants advanced Rs.2.51 crore to respondents for a resort project with a promise of 24% per annum interest payable quarterly – Respondents failed to repay principal or interest – High Court dismissed the Criminal Revision Application holding the transaction to be a "loan" outside the ambit of the MPID Act and that respondents were not a "Financial Establishment" – Held: Definition of "deposit" under Section 2(c) of the MPID Act is wide and inclusive, encompassing any receipt of money to be returned after a specified period with or without interest – Nomenclature of the transaction as "loan" is irrelevant; what matters is whether the essential ingredients of "deposit" are satisfied – All three ingredients of "deposit" satisfied in the present case – Respondents, as recipients of such amounts, qualify as "Financial Establishment" under Section 2(d) of the MPID Act – Appellants entitled to invoke Section 3 and proceed under the MPID Act [Paras 5.2–6.8].

Definition of "Financial Establishment" – Wide Amplitude – Any Person Accepting Deposit – Section 2(d) of the MPID Act defines "Financial Establishment" to mean "any person accepting deposit under any scheme or arrangement or in any other manner" – Private individuals accepting money to be returned with interest fall squarely within this definition – Repeated use of the word "any" in both Sections 2(c) and 2(d) reflects legislative intent to cast the regulatory net broadly and comprehensively – Individual respondents accepting deposits and fraudulently defaulting thereon are "Financial Establishments" within the Act [Paras 5.2.3–5.2.4, 6.2].

IPC Proceedings – Non-Applicability – Independent Remedy under MPID Act – Appellants had earlier failed to secure registration of FIR for offences under Sections 420, 409 and 405 IPC, courts holding no cognizable offence was disclosed – High Court erroneously held that failure under IPC proceedings operated as an embargo against invoking the MPID Act – Held: IPC proceedings and MPID Act operate in distinct statutory fields – Non-establishment of IPC offences cannot be equated with non-applicability of MPID Act – A complaint under Section 3 of the MPID Act is an independent recourse under a special law and is not barred by outcome of IPC proceedings – Plea of civil nature of dispute equally irrelevant once the ingredients of Section 2(c) read with Section 2(d) are satisfied [Paras 6.4–6.7].

Decision: Appeal allowed – Judgment and order dated 14.08.2025 passed in Criminal Revision Application No. 64 of 2024 set aside – Appellants held entitled to invoke Section 3 of the MPID Act and avail remedies thereunder.

Medical Education – Student Relocation – Fee Liability – Equitable Apportionment – Students admitted to SRMCH for MBBS batches 2013-14 and 2014-15 were compelled to relocate to three private transferee colleges (KIMS, IMS & SUM Hospital, and Hi-Tech Medical College, Bhubaneswar) following non-renewal of recognition by MCI on account of serious infrastructural and faculty deficiencies – This Court regulated relocation through interim orders and permitted students to pay fees at Government rates – 122 students were ultimately relocated, 41 each to KIMS and IMS and 40 to Hi-Tech – Transferee colleges filed interlocutory applications seeking payment of fees for education imparted – Held: Primary financial liability must be fastened upon SRMCH/Selvam Trust, and the funds secured by the Trust — Rs.10 crores by way of bank guarantee with MCI/NMC and Rs.2 crores deposited with the Registry — shall be distributed equally among the three transferee colleges [Paras 4-6, 11-12, 42-46].

Defaulting Institution – Principle Against Unjust Enrichment – Latin Maxim – SRMCH/Selvam Trust failed to maintain prescribed standards for imparting MBBS education despite collecting substantially higher fees than Government colleges – Writ Petition No. 681 of 2014 filed by the college was dismissed in limine, affirming MCI's findings of deficiency – Applying the maxim commodum ex injuria sua nemo habere debet (no one should derive benefit from their own wrong), neither the students can claim a windfall from interim arrangements nor can the defaulting institution escape liability for its own defaults – Trust directed to pay outstanding amounts to transferee colleges from the funds secured before MCI/NMC and this Court [Paras 36-38, 42-46].

Fee Structure – Government Rate vs. Private Rate – Quota Classification – Students transferred to the three private transferee colleges were accommodated against management/private quota seats, as no material on record demonstrated the existence of vacant Government quota seats in any transferee college – Accordingly, the fee structure applicable to private/management quota was held to be the relevant benchmark – Transferee colleges, however, fairly conceded that they would be satisfied with reimbursement at SRMCH rates rather than their own higher rates; total aggregate liability computed at approximately Rs.16.2 crores – Even applying SRMCH rates, the funds available (approximately Rs.14 crores) would not fully meet the dues of the transferee colleges [Paras 26, 33, 49].

Liability of Students – Undertakings Furnished – Recovery Mechanism – Students who had completed the MBBS course had furnished undertakings acknowledging that fee liability remained pending adjudication and undertaking to abide by the final directions of this Court – Students who paid fees at Government rates (approximately one-eighth of SRMCH fee per semester) cannot claim the benefit of that interim subsidised arrangement as a windfall at the final stage – Transferee colleges permitted to approach MCI/NMC with details of shortfall of fees due from each student (at SRMCH rates), and NMC directed to provide redressal for recovery of deficit – Amounts initially paid by students at the time of admission to SRMCH shall be duly adjusted – Students complying with fee liability entitled to receive academic and course-completion documents forthwith [Paras 48, 52-54].

Decision: I.A. Nos. 73763 of 2019, 69514 of 2019 and 151684 of 2022 disposed of – MCI/NMC directed to release approximately Rs.10 crores (bank guarantee) to the three transferee colleges in equal proportions within three months – Rs.2 crores deposited with the Registry along with accrued interest to be similarly disbursed – Bank details to be furnished within two weeks – Appeals closed.