Section 13(2), 13(4), 14, 17(4A), 18 and 35 of the of the SARFAESI Act - SARFAESI Proceedings – Tenant’s Rights and Restoration of Possession – Unregistered Lease – Appeal Allowed - The appellant, a secured creditor, took possession of a secured asset under Section 13(4) of SARFAESI Act following borrower’s default – Respondent claimed tenancy under unregistered lease from 1987 – High Court restored possession to respondent citing tenancy rights under rent laws – Held: High Court erred in entertaining challenge under Article 227 of Constitution despite availability of statutory remedy under Section 18 SARFAESI; tenancy claims must be adjudicated by DRT as per amended Section 17(4A) – Appeal allowed, possession retained by secured creditor pending DRT decision [Paras 11-13, 26].

Tenant Claims – Requirement of Documentary Evidence – Protection Limited for Unregistered Lease – The respondent failed to produce rent receipts, tax records, or electricity bills prior to issuance of demand notice under Section 13(2) SARFAESI Act – Reference to tenancy in sale deed or attornment letter insufficient without corroborative evidence – Citing Bajarang Shyamsunder Agarwal v. Central Bank of India, held unregistered tenancy not protected beyond one year from notice under SARFAESI – Mandatory order restoring possession unjustified – Appeal allowed [Paras 23-25].

High Court Jurisdiction – Alternate Remedy and Misapplication of Pre-Amendment Law – Error Noted – The High Court misapplied the ratio of Harshad Govardhan Sondagar v. International Assets Reconstruction Co. Ltd., which was based on pre-2016 SARFAESI Act and did not consider introduction of Section 17(4A) post-amendment – SARFAESI provides complete statutory remedy, writ jurisdiction not to be invoked – Appeal rightly entertained and allowed [Paras 11-13].

Non-Obstante Clause in SARFAESI – Applicability over Rent Control Act – Clarified – Following Bajarang Shyamsunder Agarwal, Court reiterated non-obstante clause under Section 35 SARFAESI overrides inconsistent tenancy claims unless validly established – Precedents in Vishal N. Kalsaria and V. Dhanapal Chettiar limited to legally protected tenancies and do not protect unregistered undocumented occupation in secured assets recovery proceedings [Paras 17-19, 23].

Conduct of Respondent – Delay in Asserting Rights – No Equitable Relief – Respondent failed to contest symbolic possession despite newspaper notice in 2021, approached DRT only after physical possession in 2023 – Collusive litigation with borrower not ruled out – Absence of proactive assertion of rights bars relief under equitable jurisdiction – Appeal allowed, possession retained by secured creditor [Paras 24-25].

Decision of the Case – Appeal Allowed – High Court’s direction restoring possession set aside – Status quo maintained with secured creditor till DRT adjudication within two months – No costs awarded [Paras 26-27].

Labour Law - Employees’ Provident Fund – Clubbing of Establishments – Functional Integrality Justified – Authorities Clubbed Units for EPF Act Coverage – Appellant and Vindas Chemical Industries Pvt. Ltd. owned by related family members, operating from adjacent plots, with common management, shared administrative setup, common telephone, e-mail, website, financial interlinking, and common security services – Held: Despite separate company registration, both units functioned as an integrated establishment – Authorities rightly clubbed appellant with Vindas for EPF Act applicability from 1995 onwards [Paras 1-35].

Separate Incorporation – Separate Legal Identity No Bar to Clubbing – Section 2A of EPF Act – Establishments Constituting Integrated Whole Covered as Single Unit – Mere existence of two separate juristic entities does not preclude clubbing under Section 2A if entities are shown to operate as a cohesive establishment – Court reiterated that beneficial legislation like EPF Act cannot be defeated by corporate formalities if functional unity exists – Appellant’s argument rejected [Paras 12-13, 30-31].

Functional Integrality – Comprehensive Tests Applied – Court Applied Multiple Factors Including Common Ownership, Management, Finance, Premises, Administration and Business Type – Noted common ownership under family, shared infrastructure, overlapping directors, common industrial activity (pharmaceutical manufacturing), and geographical proximity – Court emphasised no single test is determinative; cumulative assessment essential [Paras 11-35].

Burden of Proof – Employer Must Prove Lack of Functional Unity – Court Held Appellant Failed to Establish Independent Functioning – Court reiterated that when authorities establish prima facie clubbing, burden shifts to employer to rebut with substantive evidence, which appellant failed to produce [Para 32].

Infancy Protection – Rejected Due to Clubbing – Section 16(1)(d) EPF Act – Court Rejected Claim of New Establishment Protection – Held: Once clubbed with existing covered establishment (Vindas), appellant cannot claim infancy protection for avoiding EPF dues [Para 36].

Retrospective Application – Liability from 1995 Upheld – Despite Initial Inspection Mentioning 2004, Court Validated Liability from 1995 Based on Continuous Functional Integration – Court held authorities not restricted by initial show-cause period where broader investigation justifies earlier coverage [Paras 2.4, 36].

Labour Court Award Irrelevant for Clubbing – Labour Court’s Decision Refusing Employee Transfer Rights Not Binding – Court Clarified Labour Court’s finding on employment transfer is irrelevant for EPF clubbing based on functional integrality [Paras 15-16].

Decision – Appeal Dismissed – Supreme Court Affirmed Findings of EPF Authorities, Appellate Tribunal, and High Court – Dismissed Appeal with No Order as to Costs [Paras 37].

Family Law - Child Custody Dispute – Review Jurisdiction – Welfare of Child Paramount – Judgment Recalled - The petitioner-mother sought review of Supreme Court judgment transferring permanent custody of the minor child to the biological father, citing drastic deterioration in child’s mental health supported by psychological evaluations post-decision – The Court acknowledged the post-decision change in circumstances adversely affecting the child’s well-being, and held such new developments to be valid grounds under Article 137 for reviewing its judgment, thereby recalling the previous judgment and restoring permanent custody with the mother [Paras 1-25].

Child Custody – Psychological Welfare – Stability in Environment – Child’s Welfare Upheld - Expert reports from Clinical Psychologists at CMC, Vellore confirmed high levels of anxiety and separation distress in the minor child due to impending change of custody – Court emphasized the child's continued attachment to the mother and settled family environment with her current family – Held, child's stability and psychological well-being necessitate continuance of custody with mother while providing gradual reconnection with father through structured visitation [Paras 18-29].

Parens Patriae Doctrine – Balancing Statutory Finality with Child’s Welfare – Flexible Approach Adopted - Supreme Court reiterated limited scope of review jurisdiction but carved an exception in custody matters where dynamic child welfare needs demand judicial flexibility – Observed that hyper-technical adherence to finality of judgments is unsuitable in sensitive custody cases – Held: Courts must intervene to protect child welfare overriding strict procedural limitations [Paras 11-17].

Visitation Rights – Gradual Reintegration with Biological Father – Weekly Physical and Virtual Access Granted - Court crafted a balanced visitation arrangement ensuring weekly in-person interaction of biological father with minor child under supervised conditions, along with virtual interactions twice a week, reserving liberty for future relaxation of visitation norms subject to psychological assessments and child’s comfort level [Paras 35-36].

Foreign Travel – Restrictions on Relocation – Protective Measures – Relocation Regulated - Court restrained petitioner-mother from relocating child abroad permanently, permitting foreign travel only during vacation periods with prior intimation to father and Family Court, to prevent abrupt disruption in child’s environment while maintaining opportunities for travel [Para 36].

Final Decision – Judgment Dated 22.08.2024 Recalled – Custody Restored to Mother - Supreme Court allowed the review petition, recalled its earlier judgment, set aside the High Court’s order, restored permanent custody of the child to the mother with modified visitation arrangements in favour of the father to secure the holistic welfare of the minor [Paras 40-41].

Divorce – Irretrievable Breakdown of Marriage – Dissolution of Marriage Granted under Article 142 of the Constitution – Appellant-husband filed for divorce citing cruelty but failed to establish the allegations before the Family Court and High Court – Supreme Court, considering 16 years of separation, cessation of cohabitation, and acquittal of appellant in related criminal cases, held marriage had broken down irretrievably – Exercised power under Article 142 to dissolve marriage in interests of justice [Paras 1-27].

Cruelty Allegations – Failure to Prove Cruelty by Husband – Dismissal of Divorce on Ground of Cruelty – Appellant-husband alleged physical abuse by wife towards himself and his ailing mother and illicit relationships – Family Court and High Court found allegations unsubstantiated and unworthy of acceptance – Supreme Court did not interfere with these concurrent findings but granted divorce on broader equitable grounds [Paras 4-10, 17].

False Criminal Proceedings – Impact on Matrimonial Relationship – Husband Acquitted under IPC Sections 498A/406/34 – Supreme Court observed appellant and his family members’ acquittal in dowry harassment case established falsity of allegations – Contributing factor for irretrievable breakdown and hostile matrimonial environment – Considered relevant while granting divorce under Article 142 [Paras 15, 21, 24].

Lengthy Separation – Prolonged Estrangement Indicative of Dead Marriage – Court noted couple had lived separately since 2009 for over 16 years with no cohabitation, making marriage dysfunctional – Cited multiple precedents recognizing long separation as valid consideration for granting divorce – Marriage held defunct for all practical purposes [Paras 13-16, 22-25].

Maintenance – Enhanced Maintenance Directed – Wife Taking Care of Minor Child – Considering the financial condition of parties and child’s welfare, Supreme Court enhanced maintenance amount to ₹15,000 per month payable by appellant towards wife and child – Previous maintenance under Section 125 CrPC revised to ensure adequate support for wife and child post-dissolution [Paras 19, 26-27].

Decision – Divorce Granted – Marriage Dissolved under Article 142 – Maintenance Enhanced – Supreme Court allowed appeal, set aside High Court judgment, dissolved marriage, and directed enhanced monthly maintenance to respondent-wife and child – No order as to costs [Paras 27-30].

Criminal Law – Section 13(1)(d), 13(2) of the PC Act - Appeal Against Dismissal of Quashing - Criminal Conspiracy and Abuse of Building Permission – Illegal Construction in Violation of Municipal Rules – Prosecution Upheld – The appellant-owner, in conspiracy with municipal corporation officials, obtained a renovation permit, despite there being no requirement under Kerala Municipality Building Rules, 1999 for such renovations, and used it to demolish an old building and construct a four-storeyed commercial building in a prohibited zone – Even after the Vigilance Department issued a stop memo, construction continued in defiance – Held: Prima facie case established for offences under Section 120B IPC and Section 13(1)(d) read with Section 13(2) of PC Act – High Court rightly dismissed quashing petition under Section 482 CrPC – No case for interference by Supreme Court [Paras 12-15, 18].

Regularisation of Illegal Construction – No Erasure of Criminality – The appellant’s contention that payment of compounding charges for regularisation extinguished criminal liability was rejected – Held: Regularisation demand raised by officials was part of a conspiratorial design and does not cure the illegality committed – The existence of regularisation proceedings does not negate criminal conspiracy or corruption charges [Paras 5, 14, 15].

Parity with Co-Accused Architect – Distinction Recognised – The appellant relied on quashing of proceedings against the architect (A7) claiming parity – Held: Architect was only a professional without evidence of collusion or criminal intent; appellant was principal conspirator and beneficiary of illegal construction – Parity not applicable, quashing rightly denied to appellant [Para 16].

Framing of Charges – Sufficient Material Against Appellant – Trial Court had already rejected discharge application and directed framing of charges – Held: Absence of challenge to prosecution by co-accused municipal officials reflects seriousness of allegations – Continuation of proceedings against appellant justified [Para 16].

Direction for Administrative Action – Supreme Court directed authorities to proceed with appropriate administrative actions against illegal construction uninfluenced by extraneous factors – Appeal dismissed with costs quantified at Rs.50,000/- [Para 17].

Decision – Appeal Dismissed – The Supreme Court dismissed the appeal, upheld High Court’s order refusing to quash the prosecution, and confirmed continuation of trial proceedings against the appellant and concerned officials – No error found in High Court’s reasoning [Paras 18-19].

Recovery Proceedings under SEBI Act – Liability to Pay Interest on Unpaid Penalty – Appeals Dismissed – The appellants, promoter-directors of a listed company, challenged SEBI’s recovery proceedings including attachment of accounts for non-payment of penalties imposed for insider trading violations – SEBI issued demand notices in 2022 with interest calculated from the date of adjudication orders in 2014 – Held: Once adjudication orders specifying a payment period attain finality, statutory interest accrues from expiry of such period, not from the date of subsequent demand notice – The Supreme Court dismissed the appeals and upheld SEBI’s action of recovering penalty along with interest from the date of adjudication orders [Paras 1-2, 6-7, 11.7].

SEBI Act – Interpretation of Section 28A – Incorporation of Income Tax Recovery Provisions – Legal Position Clarified – Section 28A of SEBI Act incorporates Sections 220 to 227 of the Income Tax Act for recovery proceedings, making interest under Section 220(2) applicable to SEBI dues – The Court clarified that this is legislation by reference, meaning amendments and explanations (including Explanation 4 inserted in 2019) are applicable, making interest payable from the date penalty became payable – Explained: adjudication orders themselves constitute enforceable demand, no separate demand notice under Section 156 IT Act is necessary for SEBI recovery [Paras 9.4, 9.7-9.9].

Commencement of Interest – Rejection of Demand Notice Argument – The Court rejected the appellants’ argument that interest should run only from the demand notice of 2022 – It was held that interest liability arises from non-payment post the period mentioned in adjudication orders – The demand notice was merely a reminder, and allowing interest to run from demand notice would incentivize defaults – The Court held the adjudication order is sufficient statutory trigger for interest accrual [Paras 11.1-11.3].

Nature of Interest on Penalty – Compensatory, Not Penal – The Court emphasized that interest on unpaid penalty is compensatory in nature, designed to compensate the exchequer for delayed payment – Held: even without explicit mention in the original order, liability for interest arises statutorily under Section 28A SEBI Act read with Section 220 IT Act, thus negating arguments of retrospective imposition [Paras 10, 11.5].

Decision – Appeals Dismissed – The Supreme Court upheld the validity of SEBI’s attachment and recovery actions including levy of interest at 12% per annum from the date of expiry of payment period stipulated in adjudication orders – Appeals dismissed with direction to appellants to pay the balance interest within 15 days [Paras 11.6-11.7].

Service Law - Pension Reduction – Regulation 33 of Pension Regulations – Requirement of Prior Consultation – Decision Quashed – The appellant was compulsorily retired and granted only two-thirds pension without consulting the Board of Directors as mandated under Regulation 33 of the Pension Regulations, 1995 – Supreme Court held that prior consultation with the Board of Directors is mandatory before reducing pension from full to partial entitlement – Reduction of pension without such consultation is illegal and violates pensioner’s rights – Appeal allowed – Held: Direction issued to the Bank to reconsider the pension entitlement after prior consultation within two months, failing which the appellant shall be entitled to full pension [Paras 11-19, 24].

Right to Property – Pension as Property – Article 300A of Constitution – Curtailment of Pension Illegal – Supreme Court reiterated that pension constitutes a property right under Article 300A and any reduction without lawful procedure amounts to deprivation of property without authority of law – Held: Reduction of pension without adherence to Regulation 33(2), which mandates prior consultation with Board of Directors, is unconstitutional and violative of Article 300A [Paras 9, 17-19].

Disciplinary Proceedings – Scope of Authority in Imposing Penalty – Consultation Not Dispensable – The contention that appellate authorities need not consult the Board while imposing punishment under disciplinary proceedings was rejected – Held: Even when punishment is imposed in appeal, prior consultation with the Board is mandatory under Regulation 33 and failure to do so renders the order illegal [Paras 19-21].

Exercise of Article 142 – Post Facto Justification Declined – Supreme Court declined to invoke Article 142 to regularise the reduction of pension in absence of proper consultation and hearing – Held: No valid justification was given by the Bank to deprive the appellant of pension without following mandatory legal requirements – Appeal allowed with restoration of rights [Paras 22-23].

Decision of the Judgment – Appeal Allowed – Order Reducing Pension Set Aside – Supreme Court set aside the orders of the High Court and the Bank reducing the appellant’s pension – Directed reconsideration with proper consultation and hearing within two months, failing which the appellant would receive full pension from the date of superannuation – Liberty granted to challenge fresh order if adverse [Para 24].

Human Rights Violation – Compensation and Systemic Reforms – Disability Rights in Prisons – The Supreme Court examined the appeal by a disabled advocate who was falsely implicated, illegally arrested, and incarcerated without adequate medical care and reasonable accommodations – The Court upheld the enhancement of compensation to ₹5,00,000/- for custodial torture by police, dismissed claims of deliberate neglect by prison authorities due to absence of specific evidence, and issued comprehensive directions for systemic prison reforms under Articles 14 and 21 of the Constitution, Rights of Persons with Disabilities Act, 2016, and UNCRPD – Held: While monetary compensation remains at ₹5,00,000/-, systemic institutional reforms are directed to ensure humane treatment and accessibility for prisoners with disabilities across Tamil Nadu – Referred and applied important precedents including Arnesh Kumar v. State of Bihar, Vikash Kumar v. UPSC, Jeeja Ghosh v. Union of India, Rajiv Raturi v. Union of India, Re: Inhuman Conditions in 1382 Prisons, Shri Rama Murthy v. State of Karnataka, People’s Watch v. Home Secretary, Sunil Batra v. Delhi Administration, Sanjay Suri v. Delhi Administration, D.K. Basu v. State of West Bengal – Detailed multi-level reforms, institutional accountability, and access audits were ordered to advance rights of disabled prisoners [Paras 16-36].

Custodial Torture – Illegal Arrest – Violation of Disability Rights – Compensation Upheld - The appellant was arrested in a false case driven by property disputes, subjected to custodial torture, and deprived of disability-sensitive care – Held: Arrest was illegal and in violation of Arnesh Kumar guidelines, entitling the appellant to enhanced compensation; ₹5,00,000/- compensation upheld with disciplinary action against erring police officer [Paras 16-21].

Inadequate Prison Facilities – Deficiencies Not Amounting to Direct Liability – Institutional Reform Ordered - Despite evidence of insufficient accommodations, no direct mala fide found against prison authorities – Held: Prisons failed systemic obligations under RPwD Act, 2016 and UNCRPD; High Court's dismissal of claims against prison authorities affirmed; however, detailed remedial directions issued for accessibility, reasonable accommodations, and healthcare within prisons [Paras 21-22].

Prison Reforms – Comprehensive Systemic Directions Issued – Constitutionally Mandated Dignity for Disabled Prisoners - The Court issued wide-ranging directions for mandatory disability identification, access audits, infrastructural reforms, healthcare facilities, training for prison staff, grievance mechanisms, amendment of outdated prison manuals, maintenance of disaggregated data, and regular compliance reports to the State Human Rights Commission – Held: Disabled prisoners are entitled to equitable treatment, dignity, and healthcare under domestic and international law; systemic transformation ordered to prevent future violations [Paras 23-35].

Decision – Appeal Disposed of – Monetary Relief Upheld – Extensive Structural Reforms Mandated - Appeal dismissed regarding further compensation but allowed with respect to systemic prison reforms; compliance to be monitored via SHRC, marking a judicial step towards disability-inclusive prison environments [Paras 35-36].

Quashing of Criminal Proceedings – Section 376 IPC – Exception in Peculiar Circumstances – Continuation Unnecessary – The appeals arose from refusal by High Court to quash criminal cases including Section 376 IPC despite mutual settlement – Supreme Court noted second FIR (376 IPC) was lodged immediately after first FIR by opposite side and complainant categorically expressed no intention to pursue case – Held: Though ordinarily Section 376 IPC cases are not quashed on settlement, facts justified exercise of inherent powers to prevent abuse of process [Paras 3, 5-8].

Settlement After Serious Allegations – Consent of Complainant Considered – Complainant affirmed before Court, through affidavit, that she is settled post-marriage and further prosecution would disrupt personal life – Supreme Court recognized the voluntary, consistent, and unambiguous stand of complainant to withdraw from prosecution as a decisive factor – Held: Court's powers under Section 482 CrPC remain flexible to secure ends of justice in special facts [Paras 5-8].

Second FIR Lodged as Retaliation – Contextual Consideration – The second FIR, containing graver charges, followed a first FIR filed against complainant’s side alleging assault – Supreme Court inferred possible retaliatory motive and concluded continued trial would cause harassment without achieving justice – All proceedings quashed [Paras 3, 7-9].

Final Relief – Quashing Allowed – Supreme Court quashed both FIR No. 302/2023 and FIR No. 304/2023, including Sessions Case No. 29/2024 – High Court’s order refusing quashment set aside – Reaffirmed that inherent powers should be exercised prudently to prevent misuse of criminal law machinery [Paras 9].