Arbitration – Appointment of Arbitrator – Limitation and Time-barred Claims – Referral Court’s Scope – Petitioner sought appointment of an arbitrator for disputes arising from a Shareholders Agreement after the respondent’s delay in issuing shares and share certificates – Supreme Court examined whether the claims were time-barred for appointment of an arbitrator under Section 11(6) – Held: Referral courts must only examine the existence of an arbitration agreement and if an application is within the limitation period under Article 137 of Limitation Act, leaving substantive limitation issues for the arbitral tribunal [Paras 56-58, 72-75].

Limitation Period for Arbitration Petition – Applicability of Article 137 of Limitation Act, 1963 – Arbitration notice issued by petitioner on 23/01/2017; respondents’ refusal dated 07/11/2017 – Supreme Court clarified that the three-year limitation period under Article 137 starts from the date of refusal by the respondents to arbitrate – Held: The application for appointment of an arbitrator filed on 09/04/2019 was within limitation, accounting for time in earlier Bombay High Court proceedings [Paras 65, 78].

Existence of Arbitration Agreement – Section 11 Referral Limited to Existence – Respondents argued claims were time-barred and non-arbitrable – Court reasserted that at the Section 11 stage, the court need only confirm the existence of an arbitration agreement, not delve into evidentiary issues or claims’ merits – Held: Arbitral tribunal to adjudicate on limitation and merits of petitioner’s claims [Paras 63, 85].

Decision:

Petitions allowed – Supreme Court appointed Mr. Mayur Khandeparkar as sole arbitrator for both disputes under the Shareholders Agreement. Tribunal permitted to address the limitation issue as a preliminary point. Costs of arbitration to be borne by the petitioner if claims are found to be time-barred.

Arbitration – Appointment of Arbitrator – Limitation and Time-barred Claims – Referral Court’s Scope – Petitioner sought appointment of an arbitrator for disputes arising from a Shareholders Agreement after the respondent’s delay in issuing shares and share certificates – Supreme Court examined whether the claims were time-barred for appointment of an arbitrator under Section 11(6) – Held: Referral courts must only examine the existence of an arbitration agreement and if an application is within the limitation period under Article 137 of Limitation Act, leaving substantive limitation issues for the arbitral tribunal [Paras 56-58, 72-75].

Limitation Period for Arbitration Petition – Applicability of Article 137 of Limitation Act, 1963 – Arbitration notice issued by petitioner on 23/01/2017; respondents’ refusal dated 07/11/2017 – Supreme Court clarified that the three-year limitation period under Article 137 starts from the date of refusal by the respondents to arbitrate – Held: The application for appointment of an arbitrator filed on 09/04/2019 was within limitation, accounting for time in earlier Bombay High Court proceedings [Paras 65, 78].

Existence of Arbitration Agreement – Section 11 Referral Limited to Existence – Respondents argued claims were time-barred and non-arbitrable – Court reasserted that at the Section 11 stage, the court need only confirm the existence of an arbitration agreement, not delve into evidentiary issues or claims’ merits – Held: Arbitral tribunal to adjudicate on limitation and merits of petitioner’s claims [Paras 63, 85].

Decision:

Petitions allowed – Supreme Court appointed Mr. Mayur Khandeparkar as sole arbitrator for both disputes under the Shareholders Agreement. Tribunal permitted to address the limitation issue as a preliminary point. Costs of arbitration to be borne by the petitioner if claims are found to be time-barred.

Proper Officer Jurisdiction – Section 6 and Section 5 of the Customs Act, 1962 – Jurisdiction of DRI Officers to Issue Notices – Canon India Clarified - The Supreme Court clarified that DRI officers had been validly empowered to issue show cause notices under Section 28 of the Customs Act, 1962, by virtue of prior notifications and statutory provisions under Sections 2(34) and 5. The Court noted that Section 6 was not necessary for such assignments, correcting the erroneous finding in Canon India that relied on Section 6 as the sole provision for assigning customs functions – Review Petition allowed; Canon India judgment modified [Paras 117-130].

Section 28(11) – Constitutional Validity – Multiplicity of Proper Officers Addressed – Retrospective Validation Upheld - The Court upheld the constitutionality of Section 28(11) introduced by the Customs (Amendment and Validation) Act, 2011, stating it provided a clear framework for multiple officers to act as "proper officers" without creating the confusion suggested in Canon India and Mangali Impex. The Court affirmed that past actions by DRI officers were valid under Section 28(11) and Section 28(11) did not overlap with Explanation 2, avoiding any inconsistency. The potential for misuse of Section 28(11) did not render it unconstitutional [Paras 131-154].

Finance Act, 2022 – Section 97 – Constitutional Validity – Validation of Past Notices by DRI Officers - Section 97 of the Finance Act, 2022, which retrospectively validated actions of officers issuing show cause notices under Section 28, was upheld as constitutionally valid. The Court emphasized that Section 97 cured the purported defect in Canon India by clarifying that DRI officers were proper officers with authority under the Customs Act and that retrospective validation served the Act’s legislative intent without arbitrary classification or disproportional impact on taxpayers. Consequently, Section 97’s validation of show cause notices issued before the Finance Act, 2022, was held constitutional [Paras 157-167].

Canon India Decision – Review Petition Allowed – Error in Jurisdictional Interpretation Corrected - The Court allowed the review petition and set aside the erroneous jurisdictional interpretation in Canon India. The decision in Canon India had overlooked relevant circulars and notifications that empowered DRI officers under Sections 2(34) and 5, leading to an incorrect finding that DRI officers lacked jurisdiction under Section 28 of the Customs Act. This review held that the proper officer status of DRI officers was in fact valid under the legal framework existing before the Finance Act, 2022 [Paras 168(ii)(a)-(c)].

Doctrine of Harmonious Construction – Section 28(11) and Explanation 2 – Mangali Impex Set Aside; Sunil Gupta Upheld - In construing Section 28(11) and Explanation 2, the Court found no inherent conflict warranting a harmonious construction. Rejecting the Delhi High Court’s approach in Mangali Impex, which limited Section 28(11) to the period post-2011, the Court upheld the Bombay High Court’s decision in Sunil Gupta, affirming that Section 28(11) validly empowered officers retrospectively and continuously as intended by Parliament [Paras 149-150].

Policy of Exclusion of Jurisdiction – Safeguard Against Multiple Show Cause Notices - Addressing concerns about potential misuse of Section 28 by issuing multiple show cause notices, the Court observed that the Customs department’s longstanding policy of exclusion of jurisdiction once a notice was issued by a proper officer acted as a safeguard. This policy mitigated the risk of administrative chaos and misuse raised in Canon India and Mangali Impex [Paras 151-153].

Guidance for Pending Cases – Disposition and Adjudication – Eight Weeks’ Time for Appeal - The Court provided specific directions for the disposal of pending writ petitions and appeals concerning show cause notices under Section 28 issued by DRI officers. High Courts and the CESTAT were directed to restore or adjudicate the notices in line with this judgment, and eight weeks were granted to file appropriate appeals where relevant [Paras 168(vi)].

Decision – The Court allowed the review petition in favor of the Customs Department, setting aside Canon India to the extent it invalidated DRI-issued show cause notices – Held: The Finance Act, 2022's Section 97 and corresponding notifications are constitutionally valid, and the DRI officers' jurisdiction under Section 28 is restored for pending and future matters – Directions issued to High Courts and CESTAT to process pending appeals and petitions in line with this decision [Paras 170-172].
 

Criminal Law - Quashing of FIR – Absence of Specific Allegations – Investigation Necessity – Appellant’s complaints centered on family disputes and alleged forced execution of property gift deeds to family members – Supreme Court found complaints lacked specific allegations against certain respondents (4th and 5th), noting that vague claims and considerable delay in filing the FIR weakened prosecutorial validity – Held: High Court’s quashing of FIR against the 4th and 5th respondents upheld due to lack of detailed accusations and appellant’s inability to substantiate claims against them [Paras 7-12].

Delay in Filing FIR – Impact on Quashing – Significance of Specific Accusations – Complaint filed over 16 months after executing gift deeds, despite awareness of alleged coercion earlier – Court emphasized that undue delay without substantial allegations against all respondents affects the legitimacy of an FIR in family property disputes – Held: Absence of specific, timely accusations undermined the appellant's challenge against quashment [Paras 5, 10].

Decision: Criminal appeal dismissed – Supreme Court affirmed the High Court's order partially quashing the FIR for the 4th and 5th respondents, emphasizing the insufficiency of specific accusations and substantial delay in filing the complaint.

Arbitration Law – Appointment of Arbitrator – Appeal under Section 11 of the Arbitration and Conciliation Act, 1996 – Appellant (Goqii Technologies Private Limited) challenged High Court’s dismissal of arbitration application, seeking appointment of arbitrator under Clause 18.12 of Master Services Agreement (MSA) with the Respondent (Sokrati Technologies Private Limited) – High Court held no arbitrable dispute existed, as appellant’s claims lacked merit based on independent audit report – Held: High Court exceeded its jurisdiction by assessing merits and engaging in detailed factual analysis beyond prima facie review under Section 11 – Appeal allowed, and arbitrator appointed [Paras 2, 8-9, 16-18, 21-23].

Scope of Referral Court under Section 11 – Prima Facie Review – Court held that inquiry at the Section 11 stage is limited to determining the existence of an arbitration agreement – Referral court should not assess merits or dismiss claims as frivolous or dishonest unless they are ex-facie frivolous – Arbitrator can adjudicate issues of frivolity and bad faith, including awarding costs if claims are found abusive – Emphasis on arbitral tribunal’s competence to examine disputed facts rather than the referral court’s jurisdiction at Section 11 stage [Paras 10-12, 17-19].

Audit Report and Existence of Dispute – Independent audit report highlighted serious deficiencies in respondent’s services, including overcharging and poor performance – Appellant relied on audit findings to invoke arbitration – High Court erred in concluding no dispute existed based on auditor’s findings without allowing arbitration to proceed – Tribunal is better suited to review evidence and merits of claims in detailed hearings [Paras 5-6, 18].

Judicial Restraint in Arbitration Matters – Citing SBI General Insurance Co. Ltd. vs. Krish Spinning and In Re: Interplay between Arbitration Agreements and the Indian Stamp Act, Court reaffirmed limited scrutiny by referral courts under Section 11 – Referral courts should defer to arbitral tribunal on factual disputes, as tribunal possesses competence to assess merits comprehensively, thereby preserving arbitration’s role as primary dispute resolution mechanism [Paras 17, 19].

Decision: Appeal allowed – Supreme Court appointed Mr. S.J. Vazifdar, former Chief Justice of the Punjab & Haryana High Court, as sole arbitrator to adjudicate disputes under the MSA. All legal objections are preserved for consideration by the arbitrator, who may assess the merits of the appellant’s claims and impose costs if claims are found to be abusive.

Public Employment – Doctrine of “Rules of the Game” – Non-Alteration of Criteria Mid-Recruitment – High Court’s recruitment process set a 75% cutoff for selection after exams were conducted – Candidates argued this changed the criteria mid-selection, violating fairness – Supreme Court held that recruitment benchmarks cannot change once the process starts, barring specific provisions in rules or advertisements permitting such modifications – Doctrine confirmed as preventing arbitrary changes that may disadvantage candidates or affect transparency [Paras 12, 13, 14, 41].

Doctrine of Legitimate Expectation – Fairness in Public Employment – Application of Articles 14 and 16 – Candidates have a legitimate expectation that selection criteria remain consistent throughout recruitment – Supreme Court underscored that altering criteria post-facto is contrary to the expectations grounded in fairness and predictability in state conduct – Held: Adjustments to eligibility or selection rules post-application are inherently unfair, breaching the doctrine of legitimate expectation and violating Article 14’s principle of non-arbitrariness [Paras 14-16, 21, 33].

Right to Appointment from Select List – Placement in Select List Not a Right to Appointment – Article 309 and Discretion of State – Court clarified that while candidates on the select list are eligible for consideration, they do not gain an indefeasible right to appointment – State maintains discretion under Article 309 to establish qualifying benchmarks for final selection, prioritizing public service efficiency and suitability for the role – Held: Inclusion in select list does not guarantee appointment unless rules prescribe otherwise [Paras 7, 41].

Decision:

The Supreme Court ruled that benchmarks and criteria for selection cannot be altered mid-process unless expressly permitted by rules. The decision in K. Manjusree v. State of A.P. (2008) was upheld, affirming that recruitment criteria changes post-initiation violate fairness principles. Appeal allowed; referred to an appropriate Bench for final disposal in line with the above findings.

Economic Law – Royalty Computation – Writ Petition under Article 32 – Petitioners challenge the validity of Explanation to Rule 38 of the Mineral (Other than Atomic and Hydrocarbons Energy Minerals) Concession Rules, 2016 (MCR, 2016) and Explanation to Rule 45(8)(a) of the Mineral Conservation and Development Rules, 2017 (MCDR, 2017) – Contend that these provisions create a compounding effect by including previously paid royalty, District Mineral Foundation (DMF), and National Mineral Exploration Trust (NMET) contributions in the Average Sale Price (ASP) for subsequent royalty computations – Held: Mechanism of royalty computation falls within policy-making domain and does not exceed statutory authority – No basis for judicial intervention unless evidence shows clear illegality or constitutional violation – Petition dismissed, respondents directed to conclude public consultation on royalty policy reforms within two months [Paras 1, 45-61, 84-86].

Policy-Making – Judicial Restraint on Economic Decisions – Petitioners argue that compounding of royalty in ASP computation is arbitrary and contrary to Article 14 – Contention that differential treatment between coal and other minerals lacks rational basis – Court finds no intelligible differentia requiring ASP calculation to exclude royalty for coal but not other minerals – Held: Economic policy decisions warrant judicial deference unless shown to contravene statutory or constitutional boundaries – Complexity of royalty determination and fiscal impact on state revenues justify executive latitude in royalty policy – Judicial review limited to assessing legality, not merits of economic policies [Paras 46-49, 67-71].

Royalty on Royalty – Manifest Arbitrariness – Court examines whether inclusion of prior royalty payments in ASP calculation constitutes ‘royalty on royalty’ and manifestly arbitrary policy – Finds that Explanation in Rule 38 and Rule 45 clarifies computation of gross sale value and does not exceed or alter the main provisions – No statutory prescription prohibits inclusion of royalty, DMF, or NMET contributions – Explanation in Rules merely clarificatory and aligns with statutory scheme of MMDR Act, therefore, not arbitrary or unreasonable [Paras 15, 25-27, 45, 62-66].

Policy Adjustment for Minerals – Inconsistency in Treatment of Coal – Petitioners point to exclusion of royalty and contributions in ASP calculation for coal, arguing similar treatment should apply to iron ore and other minerals – Court acknowledges potential anomaly, but declines to mandate similar calculation method without statutory requirement – Observes that policy distinctions in royalty calculation may stem from fiscal considerations and economic impact assessments – Directive to respondents to complete public consultation to address compounding of royalty within two months [Paras 16, 72-76, 83-84].

Separation of Powers – Court’s Deference to Legislative and Executive in Economic Regulation – Citing established precedent, Court emphasizes deference to executive decisions in economic matters like royalty determination, especially where policy decisions involve technical expertise – Courts avoid reviewing wisdom or efficacy of such policies unless shown to breach legal or constitutional limits – Observes that courts should assume policy-makers act in good faith absent clear evidence otherwise, emphasizing judicial restraint in economic governance [Paras 46-57, 59-60].

Decision and Directions – Respondents granted 2 months to conclude public consultation on amendments to MMDR Act to address cascading royalty impact in ASP computation – Petition dismissed with liberty to petitioners to challenge final policy decision if respondents adopt revised rules – Registry to notify matter for compliance report after two months [Paras 84-86].

Land Acquisition – Determination of Compensation – Additional Compensation for Trees and Borewell – Review Jurisdiction – Appellant sought enhanced compensation for acquired land, including fruit-bearing trees and a borewell – High Court dismissed the award of compensation for these items granted by the reference court in a review application – Supreme Court upheld High Court’s decision, finding lack of admissible evidence supporting the existence of the claimed assets at the time of acquisition – Held: Compensation for the awala trees and borewell on Survey No. 17 set aside as inadmissible evidence was relied upon in review [Paras 2, 4, 6-8, 12].

Incremental Valuation – Cumulative Increase of Market Value – Applicability of Precedent – Appellant argued for a cumulative 10% annual increase in land valuation based on exemplar sale deeds from an earlier judgment – The court clarified that cumulative increase is discretionary and not an absolute rule – Held: Non-cumulative 10% increase in valuation affirmed as consistent with precedent and not arbitrary; cumulative increase was not granted in the exemplar judgment relied upon by the reference court [Paras 14-17].

Scope of Review – Limitations of Review Jurisdiction – Review as Appeal – Review court acted beyond its jurisdiction by granting compensation based on new evidence (2nd Joint Measurement Report) that was inadmissible and produced only at the review stage – Supreme Court ruled that review proceedings cannot serve as an appellate mechanism to re-evaluate facts or introduce new evidence – Held: High Court correctly quashed compensation for awala trees and borewell granted in review application as this exceeded the permissible scope of review jurisdiction [Paras 9-11].

Decision: Appeal dismissed – Supreme Court upheld the High Court’s order setting aside the compensation for awala trees and borewell granted in the review by the reference court, finding no admissible evidence to justify the claim and affirming the lower court's exercise of discretion in denying cumulative market increase – No costs awarded.

Criminal Law - Conviction Modified from Murder to Culpable Homicide – Sudden Quarrel and Lack of Premeditation – Appeal Partly Allowed – The appellants were convicted under Section 302 IPC following a violent altercation over land, during which the deceased, Bahal, was fatally injured by the appellants using agricultural tools. Held: The Court found that although the appellants caused Bahal’s death, the incident stemmed from a sudden quarrel without premeditated intent, thus qualifying for conviction under Section 304 Part I IPC. The appellants acted in the heat of passion without cruelty or undue advantage. The Court modified the conviction, sentencing the appellants to the period already served (over 12 years) [Paras 17-21].

Principles Governing Downgrade of Murder to Culpable Homicide – Sudden Fight Without Intent to Kill – Relying on Kartar Singh v. State of Punjab, Surinder Kumar v. Union Territory of Chandigarh, and Sukhbir Singh v. State of Haryana, the Court noted that spontaneous acts from sudden quarrels without premeditation are treated with reduced culpability under Section 304. The use of agricultural tools, absence of intent to kill, and lack of cruel conduct were factors supporting the modification of conviction [Paras 19-20].

Direct Eyewitness Evidence – Consistent Testimonies – Testimonies from Rajni Bai (PW-1), Dhannu Das (PW-2), and other witnesses were found credible, affirming that the appellants caused the injuries in a sudden altercation, further supporting the charge modification [Paras 11-15].

Decision: The appeal is partly allowed. The Court altered the conviction from Section 302 IPC to Section 304 Part I IPC, with the sentence adjusted to the period already undergone. Bail bonds are discharged, and the appellants are released from further sentence.