Environmental Law – Forest (Conservation) Act, 1980 – Deemed Forest – Statutory Master Plan – Primacy – Subject land acquired in 1986 as agricultural land, allotted to Railways in 2008 for development of Bijwasan Integrated Metropolitan Passenger Terminal, incorporated in Master Plan of Delhi 2021 for mixed-use development – RFP issued in 2022 – Challenged before NGT on the ground that approximately 1100 trees on subject land make it deemed forest requiring prior Central Government approval under Section 2 of 1980 Act – NGT dismissed OA – Held: Land earmarked under a duly approved statutory Master Plan, which was not forest land or deemed forest at the time of its coming into force, cannot subsequently be declared a deemed forest overriding the statutory binding force and sanctity of such Master Plan – Subsequent growth of vegetation or increase in tree cover does not alter the legal character of land for purposes of 1980 Act – Relevant date for determining nature of land as deemed forest is the date of coming into force of the Master Plan – Appeal dismissed [Paras 25, 47, 60, 65].

Deemed Forest – Definition and Scope – T.N. Godavarman Principle – The word "forest" must be understood in its dictionary meaning and the 1980 Act applies to areas recorded as forest in government records irrespective of ownership – Concept of deemed forest evolved to extend protection beyond formally notified forests – However, mechanical application of T.N. Godavarman without regard to historical land use and contemporaneous official records is impermissible – Determination of whether land is deemed forest must take into account historical character, revenue records, and the planning framework within which land is situated – Subject land was recorded as agricultural land at time of acquisition and was not treated as deemed forest at time of Master Plan formulation – Subsequent proliferation of vegetation, especially invasive species, cannot alter legal status [Paras 27-32, 44-48, 58-60].

Master Plan – Statutory Force and Finality – A Master Plan is not a mere policy document but a statutory planning instrument with binding force on all stakeholders once approved and notified by competent authority – Development projects under a Master Plan are conceived based on conditions prevailing at time of its formulation – If subsequent natural changes in vegetation were to unsettle operation of a Master Plan, it would introduce perpetual instability into statutory planning – Courts and tribunals cannot mandate fresh plans or interfere with implementation of a finalised Master Plan under guise of applying environmental principles – Sanctity and statutory binding force of Master Plan shall prevail – No permission under Section 2 of 1980 Act required where land was not forest or deemed forest at time of Master Plan's coming into force [Paras 38-48, 60].

Invasive Species – Ecological Character of Land – Mere presence of vegetation, particularly invasive alien species introduced through historical human intervention, does not signify the presence of a natural forest ecosystem – Approximately 70% of trees on subject land comprise invasive species such as Vilayati Kikar (Prosopis juliflora) and Subabul – Invasive species displace indigenous vegetation, reduce biodiversity, disrupt food chains and alter soil and hydrological conditions – In assessing whether land possesses forest ecosystem character, distinction must be drawn between naturally evolved indigenous vegetation and invasive species which may signify ecological disturbance – Directions issued to plant native/indigenous trees and replace invasive species [Paras 49-54, 66-67].

Environmental Safeguards – Undertakings – Respondents RLDA and Ministry of Railways undertook to obtain all necessary permissions including under 1980 Act for patches identified as deemed forest before carrying out any work – RFP mandates obtaining all statutory clearances – 20% of project area to be maintained as green land – Tree transplantation and compensatory afforestation to be undertaken strictly in accordance with applicable provisions – All implementing agencies directed to ensure transplantation of native/indigenous trees to maximum extent possible [Paras 61-63, 67].

Decision: Appeal disposed of – NGT order upheld – Land earmarked under Master Plan held not to be deemed forest – Relevant date for determination is date of coming into force of Master Plan – Respondents directed to obtain all statutory permissions for identified patches and to carry out compensatory afforestation before commencement of work – Native tree plantation directed – Contempt Petition (C) No. 860 of 2024 also disposed of – No order as to costs [Paras 64-71].

Insolvency and Bankruptcy Code, 2016 – Resolution Plan – Extinguishment of Claims – Clean Slate Principle – Arbitration – Set-off as Defence – Appellant-corporate debtor admitted into CIRP in 2020 – Arbitration invoked by resolution professional – Respondent filed counterclaim before Tribunal but failed to raise its claim before the Resolution Professional during CIRP – Resolution plan approved by NCLT on 13/10/2023 – Tribunal allowed appellant's application under Section 31(6) of A&C Act and rejected counterclaim vide interim award – Single Judge upheld – Division Bench set aside and directed Tribunal to continue proceedings including counterclaim – Held: On approval of resolution plan, all claims not forming part thereof stand extinguished; respondent cannot pursue counterclaim independently or seek affirmative relief – However, respondent permitted to raise plea of set-off as a defence, to the limited extent of defending against appellant's claim, and not to recover any surplus – Appeal partly allowed – Impugned order of Division Bench modified [Paras 8-27].

Clean Slate Principle – Section 31(1), IBC – Effect of Approval of Resolution Plan – Once resolution plan is approved by adjudicating authority, it is binding on all stakeholders and all claims not forming part of resolution plan stand extinguished – Respondent's counterclaim, raised before Tribunal but not lodged before Resolution Professional and not included in resolution plan, held extinguished – Respondent cannot seek any affirmative or independent relief from Tribunal on the basis of such counterclaim [Paras 10-13].

Set-off – Plea of Defence – Paragraph 12.4.1 of Resolution Plan – Resolution plan bars all "payments/settlements" in respect of claims not raised before Resolution Professional, including counterclaims in pending arbitration – However, plain language of Paragraph 12.4.1 does not expressly bar a plea of set-off raised purely as a defence – Applying maxim expressio unius est exclusio alterius, intention to exclude defensive plea of set-off cannot be inferred where it is neither expressly included nor expressly barred – Respondent permitted to raise set-off as defence only; no affirmative or surplus recovery permissible – If arbitration withdrawn by appellant, counterclaim/defence of respondent also fails [Paras 20-27].

Clarifications – (a) If amount in counterclaim found due and exceeds amount awarded to appellant, surplus not recoverable by respondent – (b) If any amount remains payable to appellant after adjustment, same recoverable by appellant – (c) Judgment limited to facts and terms of Paragraph 12.4.1 of the resolution plan [Paras 27-28].

Decision: Appeal partly allowed – Impugned order of Division Bench of Calcutta High Court modified – Respondent not entitled to independently pursue counterclaim but permitted to raise plea of set-off as defence before Arbitral Tribunal on terms specified – Parties to bear their own costs [Paras 30-32].

Service Law – Disciplinary Proceedings – Post-Retirement Punishment – Validity – Reduction of Pay Scale – Appellant, a Punjab & Sind Bank officer, was served a charge sheet on 30.09.2011, the same date he superannuated – Charge No. 2 (failure to ensure end-use of loan) found partly proved – Punishment of reduction by three stages in pay scale on permanent basis imposed vide order dated 15.06.2013 – Appellate Authority dismissed appeal – Single Judge of High Court set aside punishment holding post-retirement penalties under Service Regulations impermissible – Division Bench reversed, relying on Regulation 20(3)(iii) and Mahanadi Coalfields Ltd. – Held: Where extant Service Regulations permit continuance of disciplinary proceedings initiated before superannuation, such proceedings can be continued and concluded post-retirement, and appropriate punishment including reduction of pay scale is permissible – Appeal dismissed [Paras 3–39].

Misconduct – Bank Officer – Failure to Ensure End-Use of Loan – Charge Proved – Appellant allowed cash withdrawals of several lacs without supporting bills, resulting in account turning NPA – Inquiry Officer found Charge No. 2 partly proved – Appellant's comments to Inquiry Report did not challenge the finding regarding absence of bills – Held: A bank officer holds a position of trust dealing with public funds; failure to ensure end-use of loan constitutes financial irregularity exposing the Bank to risk; penal action on proof of such charge cannot be questioned merely because no loss was suffered – Finding neither perverse nor disproportionate [Paras 14–22].

Disciplinary Proceedings – Post-Superannuation – Regulation 20(3)(iii) – Deeming Fiction – Regulation 20(3)(iii) of the Service Regulations provides that an officer against whom disciplinary proceedings have been initiated shall cease to be in service on the date of superannuation but proceedings will continue as if he was in service until conclusion and final order – Held: This deeming fiction permits the proceedings to be continued and brought to logical conclusion; where penalty imposed results in reduction of pay scale, pension can be computed accordingly and such punishment is implementable post-retirement [Paras 25–38].

Distinction Between Penalties – Dismissal vs. Reduction of Pay – Pension Regulations – Where ultimate penalty is dismissal, it may result in forfeiture of pension and retiral dues under Regulation 22 of Pension Regulations, raising no technical difficulty – Where punishment results in mere reduction or adjustment of pension rather than forfeiture in entirety, Court must examine implementability – In present case, reduction in pay scale relates back to date of superannuation and pension is computable accordingly – Held: Punishment is implementable [Paras 36–37].

Precedents Reconciled – Prabhakar Sadashiv Karvade Distinguished – Ramesh Chandra Sharma and Mahanadi Coalfields Ltd. Followed – In Prabhakar Sadashiv Karvade, charge sheet was served after retirement; hence substantive penalties under Service Regulations held impermissible – Distinguished on facts as in the present case charge sheet was served while appellant was in service – Ramesh Chandra Sharma approved; Mahanadi Coalfields Ltd. (three-Judge Bench) followed – Jaswant Singh Gill not followed as overruled by Mahanadi Coalfields Ltd. [Paras 27–34].

Decision: Appeal dismissed – Punishment of reduction of three stages in pay scale on permanent basis upheld – Division Bench order affirmed – No order as to costs.

Criminal Law – Cheating – Section 420 IPC – Movie Investment – Quashing of Proceedings – Appellant, a movie producer, borrowed money from de-facto complainant on promise of 30% share in profits, later 47%, and issued two post-dated cheques of Rs. 24 lacs each towards principal repayment, which were dishonoured – High Court quashed proceedings under Section 406 IPC but declined to quash under Section 420 IPC – Held: Movie was completed and released; initial promise to make the movie was not false; no allegation that movie earned profits; nature of transaction was a high-risk investment with inherent uncertainty; dishonest intention from inception not established – Criminal proceedings under Section 420 IPC quashed – Appeal allowed [Paras 3–21].

Cheating – Ingredients – Dishonest Intention at Inception – Section 415 IPC – Deception as Necessary Ingredient – Section 415 IPC has two parts, both requiring deception – The complainant must show that inducement to part with property was caused by deception of the accused – Mere failure to keep a promise subsequently cannot be the sole basis to presume dishonest intention existed from the very beginning – Where fulfilment of the promise is not entirely in the control of the promisor or there is an inherent risk, the High Court may, in exercise of inherent powers or under Article 226, examine whether dishonest intention existed at the time of making the promise and may quash proceedings accordingly [Paras 12–15].

Movie Production – High-Risk Business – Civil vs. Criminal Liability – Investment on Profit-Sharing Basis – Where money is advanced for a movie project on promise of a share in profits, and the movie is in fact made and released, and there are no allegations that it earned profits, the failure to share profits does not disclose dishonest intention – Movie making is a high-risk business where no certainty of profit exists – An investor who agrees to share profits takes the risk of a possible zero return – The dispute in such circumstances discloses only a civil cause of action [Paras 16–17, 20].

Post-Dated Cheques – Dishonour – Section 138 NI Act – No Presumption of Cheating – Post-dated cheques issued not as inducement to obtain money but to discharge an existing obligation at a future date do not constitute inducement for the purpose of Section 420 IPC – Dishonour of such cheques may give rise to proceedings under Section 138 of the NI Act but does not ipso facto amount to cheating – At the time of issuance, the drawer may have reason to believe sufficient funds would be available by the due date; dishonour of a post-dated cheque by itself is insufficient to presume dishonest intention [Paras 18–20].

Criminal Breach of Trust – Section 406 IPC – No Entrustment – High Court rightly quashed proceedings under Section 406 IPC as there was no entrustment of property by the complainant to the accused [Para 10].

Decision: Appeal allowed – Impugned judgment of the High Court set aside to the extent it declined to quash proceedings under Section 420 IPC – Criminal proceedings under Section 420 IPC quashed.

Consumer Law – Definition of 'Consumer' – Body Corporate – Fixed Deposit – Commercial Purpose – Dominant Object Test – Appellant, a State undertaking, deposited Rs. 9 crores as FDR with respondent-bank; bank subsequently adjusted FDR proceeds against overdraft allegedly sanctioned fraudulently without appellant's sanction – NCDRC dismissed complaint holding deposit was for commercial purpose – Held: Merely because a fixed deposit earns interest does not mean banking service was availed for a commercial purpose; the identity or status of the depositor (individual or body corporate) is not the determining factor; the dominant object and purpose of the transaction must be examined – NCDRC's blanket holding that the deposit was for commercial purpose is not entirely correct – However, in the present case, serious disputed questions of fact regarding alleged fraud and pledge exist which cannot be adjudicated in summary consumer proceedings – Appeal dismissed [Paras 1–33].

Consumer – 'Commercial Purpose' – Test of Dominant Intention – Principles Summarised – No straitjacket formula exists; commercial purpose ordinarily includes manufacturing/industrial activity or business-to-business transactions – Purchase of goods or services must have close and direct nexus with profit-generating activity – Identity of purchaser or value of transaction not conclusive – Dominant intention or purpose must be to facilitate profit generation – Parking of surplus funds by a body corporate with a bank for safe custody or statutory compliance is not per se reflective of a commercial purpose – Deposit made to leverage credit facility for business use, however, may amount to availing banking service for commercial purpose [Paras 14–26].

Consumer Complaint – Maintainability – Fraud and Forgery – Summary Proceedings – Allegations of fraudulent hypothecation and forged FDR – Complaint alleged that FDR was pledged without appellant's consent for overdraft of Rs. 8.10 crores and maturity proceeds were adjusted against overdraft dues; bank claimed original FDR was with it and the document in appellant's possession was forged – Held: Where complaint allegations involve highly disputed questions of fact pertaining to criminal or tortious liability such as fraud or forgery, the same cannot be adjudicated in summary proceedings under the 1986 Act and must be addressed before an appropriate civil or criminal court – Deficiency in service is distinct from criminal or tortious acts of the service provider [Paras 28–32].

Burden of Proof – Deficiency in Service vs. Commercial Purpose – Burden of proving that goods purchased or services availed were for a commercial purpose lies on the respondent and not the complainant – Burden of proving deficiency in service lies on the complainant [Para 19].

Decision: Appeal dismissed – NCDRC order of dismissal affirmed, though not entirely for the same reasons – Dismissal shall not bar the appellant from pursuing appropriate proceedings before a civil or criminal court – No order as to costs.

Motor Accident Compensation – Functional Disability vs Physical Disability – Determination of loss of earning capacity – Medical Board assessed 63% permanent disability – High Court reduced functional disability to 30% without proper reasoning – Held: Functional disability must reflect actual impact on earning capacity considering nature of work – Reduction without cogent reasons unsustainable [Paras 21–22]

Appellate Interference – Reappreciation of Evidence – Duty of High Court – High Court modified MACT findings without detailed analysis of medical and neuropsychological evidence – Held: Appellate court must assign clear and cogent reasons while reversing factual findings – Failure renders judgment unsustainable [Paras 22–23, 35]

Functional Disability – Neurological Impairment – Cognitive deficits – Appellant suffered head injury leading to memory loss, frontal lobe impairment and IQ of 65 – Held: Injuries had severe impact on managerial functions requiring cognitive ability – Functional disability assessed at 100% [Paras 26–30]

Principles for Assessment – Raj Kumar v. Ajay Kumar – Physical disability not equivalent to economic loss – Tribunal must assess real impact on earning capacity based on profession and abilities – Held: Structured approach required; in appropriate cases functional disability may equal or exceed physical disability [Paras 27–28]

Compensation – Enhancement – Multiplier Method – MACT awarded Rs.65,53,811/- – High Court reduced to Rs.35,61,000/- – Supreme Court reassessed compensation considering 100% functional disability – Enhanced to Rs.97,73,011/- with interest @ 7.5% [Paras 31–32]

Just Compensation – Beneficial Legislation – Motor Vehicles Act – Courts must ensure fair and reasonable compensation considering long litigation and victim’s condition – Remand avoided to prevent delay – Supreme Court itself determined compensation [Paras 24, 35]

Decision: Appeal allowed – High Court judgment set aside – Functional disability assessed at 100% – Compensation enhanced to Rs.97,73,011/- with 7.5% interest – Insurer directed to pay with right of recovery – Directions issued for deposit within six weeks

Remission of Sentence – Life Convict – Applicable Policy – Governing Date – Petitioner, a life convict sentenced under Section 302 IPC, sought remission of sentence – State rejected the representation relying on G.O.Ms. No. 71 dated 17.04.2025, which bars life convicts convicted for kidnapping and related offences under Sections 363-A, 364, 364-A, 366–369, 372 and 373 IPC from grant of special remission – Held: The relevant date for determining the applicable remission policy is the date on which the court holds the convict guilty, subject to a more beneficial regime in a subsequent policy – Since the Trial Court convicted the petitioner in 2005 (affirmed by the Supreme Court in 2008), the 2004 policy of the State Government shall govern the plea for remission – The 2004 policy contained no bar against the petitioner's category – State directed to re-examine the remission plea under the G.O. dated 07.08.2004 and pass fresh orders [Paras 13–21].

Remission Policy – Exclusionary Clauses – Retrospective Application – State contended that the 2013 and subsequent policies, which excluded kidnapping-related convicts from remission, justified rejection of the petitioner's representation – Court found that the 2013 policy revision cannot be applied retrospectively to a convict whose guilt was determined in 2005 – Held: Application of a harsher subsequent policy to an earlier convict, in the absence of a beneficial provision, would be impermissible – State bound by the policy in force at the time of conviction [Paras 16–18].

Parole – Humanitarian Grounds – Ramadan Eid – Petitioner's counsel made a fervent appeal for release on parole for 15 days on account of the approaching Ramadan Eid – Court noted petitioner's good jail conduct and his continued engagement at a petrol pump outside the jail premises under authority permission – Held: Petitioner permitted to prefer an application for parole before the competent authority, which shall pass appropriate orders on the very same day of receipt of the application [Paras 25–27].

Decision: Writ petition kept pending – State Government directed to reconsider remission representation under the 2004 policy and place fresh order on record – Petitioner permitted to seek parole forthwith – Matter listed for further hearing on 06.04.2026.

Gratuity – Withholding and Adjustment – Non-vacation of company quarters – SAIL withheld gratuity of retired employees who continued in occupation – High Court directed release relying on Ram Naresh Singh – Held: Rule 3.2.1(c) permits withholding of gratuity for non-compliance including failure to vacate – Management entitled to adjust dues including penal rent – Action valid [Paras 11, 19]

Precedent – Binding nature – Whether order constitutes precedent – High Court relied on order dated 31.03.2017 in Ram Naresh Singh – Held: Said order passed on facts and equitable considerations – Not a binding precedent under Article 141 – Reliance misplaced [Paras 16–18]

Penal Rent – Adjustment against gratuity – Validity – Three-Judge Bench order dated 15.12.2020 clarifies law – Unauthorized retention attracts penal rent – Such rent can be adjusted against gratuity and other dues – Supported by ONGC v. V.U. Warrier – Held: Adjustment permissible [Paras 8, 17]

Reciprocal Obligations – Employer and employee – Vacation of quarters and payment of gratuity – Held: Obligations are mutual and simultaneous – Employee must vacate accommodation – Employer to release gratuity after deductions – Neither enforceable independently [Para 19]

Interest on Gratuity – Withheld amount – Unauthorized occupation – Held: No interest payable for period of unauthorized occupation as per Rules – Employees having retained quarters cannot claim interest – Grant of interest would reward wrongful occupation [Paras 20, 22]

Equitable Relief – Fixation of penal rent – Supreme Court exercised equitable jurisdiction – Considering hardship, penal rent fixed at Rs. 1,000 per month – Balance struck between employer rights and employee hardship – Clarified: Not a precedent [Para 21]

Decision: Civil Appeals allowed – Impugned High Court orders set aside – Withholding and adjustment of gratuity upheld – Interest denied – Penal rent fixed at Rs. 1,000 per month (case-specific) – Directions issued for simultaneous discharge of obligations – Judgment not to be treated as precedent

Securities Law – Preferential Allotment – Diversion of Proceeds – PFUTP Regulations – Fraud – SAT Order Set Aside – Respondent-company raised Rs. 15,87,50,000/- through preferential allotment to 42 entities disclosing objects including capital expenditure, working capital, marketing and setting up offices abroad – From the very next day of receipt of funds, proceeds were diverted to purchase shares of other companies and extend loans and advances to various entities – Adjudicating Officer imposed penalties of Rs. 70 lakhs on the company and Rs. 25 lakhs each on the Managing Director and Director for violations of Regulations 3(a), 3(b), 3(c), 3(d), 4(1), 4(2)(f), 4(2)(k) and 4(2)(r) of the PFUTP Regulations and Section 21 of SCRA read with Clause 43 of the Listing Agreement – SAT set aside the penalties holding that a shareholder resolution dated 29.09.2017 ratifying the diversion was valid – Held: SAT order unsustainable; AO order restored [Paras 1–2, 16–22, 79].

Fraud under PFUTP Regulations – Expanded Definition – Diversion of Preferential Allotment Proceeds – Regulations 3 and 4 of PFUTP Regulations – Under the PFUTP Regulations, fraud is broadly defined and is not confined to its ordinary meaning – Fraud includes any act, expression or concealment committed whether in a deceitful manner or not, to induce any person to deal in securities, and includes a promise made without any intention of performing it – Diversion of funds raised through preferential allotment to objects not disclosed in the EoGM notice, immediately upon receipt, clearly constitutes violation of Regulations 3 and 4(2)(f), 4(2)(k) and 4(2)(r) – The speed of diversion establishes that from inception the respondents had no intention to use the funds for the stated objects – Held: Diversion of preferential allotment proceeds to undisclosed objects constitutes fraud under the PFUTP Regulations [Paras 33–51].

Ratification – Illegality Cannot Be Ratified – Section 27 of the Companies Act – PFUTP Regulations – Public Interest – SAT had exonerated respondents solely on the ground that a shareholder resolution dated 29.09.2017 ratified the variation in utilization of proceeds – Held: Section 27 of the Companies Act applies only to variation of objects in a prospectus and has no application to preferential allotment made through private placement – Even if Section 27 read with Section 62(1)(c) were applied analogously, ratification could only operate where there are unutilised funds, whereas here the entire amount stood diverted – SEBI regulations protect multiple stakeholders and have public law dimensions; liability crystallized under such regulations cannot be wiped off by a shareholder resolution – Illegality cannot be ratified; only an irregularity can be – A private resolution cannot condone acts contrary to public policy [Paras 52–66].

Disclosure Obligations – Objects of Preferential Issue – Regulatory Significance – Regulation 73 of ICDR Regulations, Clause 43 of Listing Agreement – Objects stated in the explanatory statement appended to the EoGM notice are statutorily mandated disclosures under Regulation 73 of the ICDR Regulations – Investors and stakeholders adjust their conduct based on such disclosures, whether or not they subscribe to the shares – Clause 43 of the Listing Agreement requires quarterly reporting of variations between projected and actual utilisation of funds – LODR Regulations 32 and 35 further mandate reporting of deviations – A conspectus of the SEBI Act, PFUTP Regulations, SCRA, ICDR Regulations and the Listing Agreement shows that stated objects of a preferential issue are of utmost significance and cannot be casually compromised [Paras 33–49].

Parallel Jurisdiction – WTM and Adjudicating Officer – Section 11B and Section 15HA of SEBI Act – Validity of Separate Proceedings – Amicus contended that the AO proceedings were impermissible since the WTM had already adjudicated the same facts – Held: The two proceedings operate in separate fields – The WTM exercises powers under Sections 11(1), 11(4)(b) and 11B to restrain market access and order disgorgement, whereas the AO exercises power under Section 15(I) to impose monetary penalties under Section 15HA – Prior to the Finance Act 2018, the WTM had no power to levy penalty under Section 15HA – Having imposed only market restraint, the WTM left the field of penalty open for the AO – Two authorities vested with different powers operating in separate fields can exercise jurisdiction on the same underlying facts without conflict – Judgments in Ram Kishori Gupta and Nirmal N. Kotecha distinguished [Paras 67–77].

Decision: Appeals allowed – Order of the Securities Appellate Tribunal in Appeal Nos. 116, 114 and 115 of 2021 set aside – Order of the Adjudicating Officer dated 29.04.2020 imposing monetary penalties on the respondent-company and the individual directors restored.