Taxation Law - Corporate Insolvency – Resolution Plan and Tax Demands – Binding Effect under Section 31 of IB Code – Tax Demands Set Aside - The Supreme Court held that once a resolution plan is approved by the Adjudicating Authority (NCLT), all claims not part of the plan stand extinguished – Income tax demands for AYs 2012-13 and 2013-14, which were not submitted prior to approval and were not part of the resolution plan, were thus invalid – Held: Demands raised by the Income Tax Department post-approval are extinguished and unenforceable under Section 31(1) of the IB Code as interpreted in Ghanashyam Mishra [Paras 5-9].

Binding Nature of Resolution Plan – Extinguishment of Undisclosed Claims – Fresh Start Doctrine – Tax Claims Invalid - Court reinforced that successful resolution applicants are entitled to a “fresh slate” – The inclusion of belated or undisclosed claims would undermine certainty and business revival under the IB Code – Held: All statutory dues not claimed before CIRP and not part of the approved plan are extinguished [Paras 7-13].

Failure of NCLT and NCLAT – Ignorance of Binding Precedent – Orders Set Aside - The NCLAT erroneously refused to consider binding precedent from the Supreme Court merely because it was not cited before the NCLT – Supreme Court rebuked this approach as perverse and unjustified – Held: Orders of both NCLT and NCLAT set aside; costs imposed by NCLT also quashed [Paras 9-10, 14].
 

Motor Accident Compensation – Enhancement of Award – The claimants, legal heirs of the deceased, sought enhancement of the compensation awarded by the Motor Accident Claims Tribunal (MACT) and partially increased by the High Court – The Supreme Court found that the High Court underestimated the deceased’s income, failed to apply an appropriate multiplier, and did not adequately compensate for future prospects – Held: Compensation revised based on Sarla Verma and Pranay Sethi principles, increasing the award from Rs.5,96,761/- to Rs.13,82,500/- [Paras 10-15].

Calculation of Monthly Income – Inclusion of Pension and Notional Wages – The High Court determined the deceased’s monthly income as Rs.5,819/-, excluding certain pension components – The Supreme Court found that the pension and homemaker services should be considered together, revising the monthly income to Rs.7,000/- – Held: When assessing loss of dependency for a deceased homemaker receiving pension, the combined value of pension and notional wages should be used [Paras 11-12].

Future Prospects – Application of Pranay Sethi Standard – The Court held that loss of future prospects should be granted at 25%, considering the deceased’s age of 45 years – Held: Future prospects of Rs.1,750/- per month added, following the standard laid down in Pranay Sethi [Paras 14].

Multiplier and Deduction for Personal Expenses – Correction of Errors – The High Court applied a multiplier of 9 and deducted 1/5^th of the income for personal expenses – The Supreme Court corrected the multiplier to 14 and the personal expenses deduction to 1/4^th, per Sarla Verma – Held: The correct application of the multiplier and deductions resulted in a higher loss of dependency calculation [Paras 15].

Loss of Love and Affection – Application of Magma General Insurance Standard – The Court increased compensation for loss of love and affection to Rs.2,40,000/-, applying Magma General Insurance Co. Ltd. V. Nanu Ram – Held: Compensation should be granted per claimant, considering familial relationships [Paras 15].

Just Compensation – Beneficial and Welfare Legislation – The Court emphasized that the Motor Vehicles Act, 1988 is a welfare legislation and that courts must award ‘just compensation’ – Held: Courts must ensure that compensation adequately reflects the loss suffered by claimants while adhering to settled legal principles [Para 14].

Decision: Appeal allowed. Compensation increased to Rs.13,82,500/- with 7.5% interest per annum from the date of claim petition.

Recording of Advocate Appearances – Restriction to Arguing and Assisting Counsel – The applicants sought modification of para 42 of the Supreme Court’s judgment dated 20.09.2024, which directed that only the names of arguing counsel and one assisting Advocate-on-Record (AOR) be recorded in the court proceedings – The Court clarified that the appearance slip should reflect only those advocates who are physically present and actively participating in the case – Held: The practice of marking multiple advocates in proceedings without verification undermines judicial discipline; Court Masters must ensure compliance with the amended rules [Paras 20-22].

Advocate-on-Record’s Role – Responsibility in Filing Vakalatnama and Representation – The Court reiterated that an Advocate-on-Record (AOR) is responsible for certifying that the Vakalatnama was executed in their presence or properly verified – Held: An AOR must remain accountable for filings, and Senior Advocates cannot appear in the Supreme Court without an AOR [Paras 14-16].

Judicial Oversight on Legal Ethics – Curbing Abuse of Process – The Court observed that the previous system allowed misuse, with advocates being listed in proceedings despite not appearing in court – The new system ensures transparency and accountability – Held: AORs must inform the Court Master of any changes in representation via a fresh appearance slip, preventing fraudulent claims of participation [Paras 24-26].

Impact on Bar Elections and Professional Growth – No Adverse Effect on Rights – The applicants argued that restricting recorded appearances would negatively impact junior advocates’ career progression, chamber allotments, and SCBA voting rights – The Court rejected this claim, stating that statutory rules must take precedence over unwritten practices – Held: The allocation of chambers and voting rights remain subject to established SCBA rules, and professional advancement should not depend on inflated appearance records [Paras 22-23].

Decision: Miscellaneous Applications partially allowed. The directions in para 42 of the judgment dated 20.09.2024 were modified to clarify that:

1. Only advocates physically present and arguing, along with one assisting AOR, shall be recorded.

2. AORs must verify and endorse Vakalatnamas properly.

3.Senior Advocates must always appear with an AOR in Supreme Court proceedings.

4. Court Masters shall strictly implement these directions.

Motor Accident Compensation – Enhancement of Award – Future Prospects Considered – The appellant suffered quadriplegia (100% disability) due to a motor accident and sought enhancement of the compensation awarded by the High Court – The Supreme Court found that the High Court erred in not considering future prospects while calculating loss of income – Held: Future prospects should be added at 40%, increasing the loss of income calculation – Compensation enhanced from ₹15,25,600/- to ₹36,84,000/- [Paras 10-12].

Income Assessment – Minimum Wages as Basis for Calculation – Proper Multiplier Applied – The High Court assessed the income at ₹5,600/- per month, which was below even the minimum wage for an unskilled worker (₹6,447.75/- per month in 2014) – The Supreme Court corrected this and set income at ₹7,500/- per month, applying multiplier of 18 – Held: Revised loss of income calculation: ₹22,68,000/- [Paras 9-10].

Pain and Suffering – Compensation for Special Diet, Attendant Charges, and Future Medical Expenses – The appellant, a state-level volleyball player, required lifelong assistance and continuous medical care – The Supreme Court enhanced compensation for pain and suffering from ₹15,000/- to ₹1,00,000/-, special diet from ₹25,000/- to ₹1,00,000/-, and awarded ₹5,00,000/- for attendant expenses and ₹2,00,000/- for future medical expenses – Held: Compensation for permanent disability must reflect actual suffering and lifelong dependency [Paras 10-12].

Physiotherapy and Loss of Marriage Prospects – Judicial Recognition of Life Altering Impact – The appellant required continuous physiotherapy, but lacked documentary proof – The Court took judicial notice of the need for physiotherapy and granted ₹50,000/- in lump sum – Additionally, ₹2,00,000/- awarded for loss of marriage prospects due to permanent disability – Held: Disability compensation must account for social and emotional impact on life [Paras 11-12].

Digital Payment System for Compensation – Direct Bank Transfers Ordered – The Supreme Court issued landmark directions for reforming compensation disbursement – Held: Motor accident compensation must be directly transferred to claimants' bank accounts instead of being deposited with tribunals, avoiding unnecessary delays and procedural hassles – Directed all tribunals to collect bank details at the time of filing claims and mandate direct transfers – Held: The new system ensures faster and more efficient disbursal of compensation [Paras 17-20].

Decision: Appeal Allowed – Compensation enhanced to ₹36,84,000/- with interest at the same rate as awarded by the High Court – Insurance company directed to transfer the enhanced amount directly to the appellant’s bank account within six weeks – Directions issued for nationwide implementation of direct bank transfer of accident compensation [Paras 12-13, 17-21].

International Arbitration – Conflicting Jurisdiction and Arbitration Clauses – Applicability of Indian Law – Arbitration in India Ordered – The petitioner sought appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, invoking Clauses 16.5 and 18 of the Distributor Agreement – The respondent contended that arbitration should take place in Colombia under the Conciliation and Arbitration Centre of the Chamber of Commerce of Bogotá – The Supreme Court held that Clause 16.5, which stipulates Indian law and exclusive jurisdiction of Gujarat courts, prevails over Clause 18, which designates Bogotá as the arbitration venue – Held: Indian courts have jurisdiction over the arbitration agreement, and an arbitrator was appointed to conduct the proceedings in India under Delhi International Arbitration Centre rules [Paras 25-36].

Conflict of Laws – Lex Arbitri, Lex Contractus, and Seat of Arbitration – Indian Law Governs Arbitration Agreement – The Supreme Court applied the three-step test from Sulamérica Cia Nacional De Seguros S.A. v. Enesa Engenharia S.A., distinguishing between lex contractus (law governing the contract), lex arbitri (law governing arbitration), and seat of arbitration – The Court held that Indian law applies to the arbitration agreement, despite Bogotá being designated as the arbitration venue – The arbitration agreement’s validity, scope, and interpretation are governed by Indian law [Paras 13-16, 31].

Interpretation of Contracts – Harmonization of Conflicting Clauses – Exclusive Jurisdiction Clause Prevails – The Court emphasized that in cases of inconsistent contractual clauses, interpretation must strive to give effect to all provisions rather than rejecting any clause outright – Following Milford Capital Partners v. Digby and Arnold v. Britton, the Court held that Clause 16.5 (exclusive Indian jurisdiction) and Clause 18 (arbitration in Bogotá) can be harmonized by treating Bogotá as the arbitration venue while retaining the Gujarat courts’ supervisory jurisdiction [Paras 26-29].

Appointment of Arbitrator – Consensus of Parties – Arbitration to be Conducted in India – During proceedings, both parties consented to arbitration in India under an Indian arbitral institution – The Supreme Court appointed Justice S.P. Garg (Retd.) of Delhi High Court as the sole arbitrator, with the venue to be decided mutually by the parties – The arbitration will be conducted under the Delhi International Arbitration Centre rules, applying the fee schedule for international arbitrations [Paras 34-36].

Decision: Appeal Allowed – The Supreme Court held that the arbitration agreement is governed by Indian law, and Indian courts have jurisdiction to appoint an arbitrator – Justice S.P. Garg (Retd.) appointed as the sole arbitrator – Arbitration shall be conducted in India, with the venue to be mutually decided by the parties – Proceedings to be governed by the Delhi International Arbitration Centre rules, applying the international arbitration fee schedule.
 

Criminal Law – Challenge Summoning under Section 319 CrPC – Duty to Consider Entire Evidence – Supplementary Report Ignored – Trial Court erred in not considering supplementary investigation report which exonerated the appellant and her father-in-law – Material collected post-application under Section 319 CrPC cannot be overlooked – Trial Court and High Court failed to apply settled principles of Section 319 – Orders liable to be set aside [Paras 15-22].

Distinction between Accused – Husband and Wife Treated Differently – Court found that unlike the appellant’s husband (absconding), there was a clear finding in the supplementary report absolving the appellant and her father-in-law – The absence of such findings regarding the husband distinguishes the appellant's case – Objection on maintainability rejected [Para 14].

Scope of Section 319 CrPC – Requirement of Stronger Evidence than Prima Facie Case – Reaffirmation of Hardeep Singh and Juhru Principles – The power under Section 319 is extraordinary and must not be invoked casually – The Court reiterated that evidence must disclose more than a mere probability to summon additional accused – Mere reliance on initial deposition without considering fresh material violates due process [Paras 17-19].

Procedural Safeguard – Supplementary Report Must Be Evaluated – Supplementary report under Section 173(8) CrPC is part of the record and must be considered before summoning – Trial Court’s omission to evaluate supplementary report held to be impermissible – Matter remanded for reconsideration [Paras 20-22].

Decision – Summoning Order Set Aside – Matter Remanded – Appeal Partly Allowed – The Trial Court and High Court orders were quashed – Trial Court directed to decide the Section 319 CrPC application afresh considering all materials on record – Trial to be expedited within two months [Paras 22-25].

Education Law – Eligibility Criteria for Admission – Subsequent Fulfillment of Requirements – Relief Granted – The appellant secured admission to a B.A.M.S. course despite not meeting the eligibility requirement of passing English in the 10+2 examination – His college was later de-recognized, and students were transferred, but he was denied transfer on eligibility grounds – The appellant, acting on a provisional admission letter, reappeared for the 12th class examination, passed English, and completed almost the entire B.A.M.S. course – Held: Given the peculiar facts, including the appellant's substantial completion of the course and compliance with eligibility criteria during his studies, he should be allowed to complete the course and internship, and be issued his degree [Paras 7-9].

Doctrine of Actus Curiae Neminem Gravabit – Court Should Not Prejudice a Party Due to Its Own Actions – The appellant pursued the course under interim orders for nearly six years and completed part of his mandatory internship – The High Court's decision to deny relief disregarded the principle that a court’s action should not cause undue hardship to a litigant (actus curiae neminem gravabit) – Held: Since the appellant had substantially complied with the eligibility requirements and invested significant time and effort, denying him relief would be unjust [Para 8].

Judicial Review – Power to Intervene in Academic Matters – Exceptional Circumstances Justifying Relief – Courts generally do not interfere in academic matters unless there is manifest injustice – The appellant’s admission was initially irregular, but subsequent compliance with eligibility norms and completion of studies justified intervention – Held: Exceptional circumstances warranted setting aside the High Court’s order, ensuring that the appellant is not unfairly deprived of his degree [Para 9].

Decision: Appeal Allowed – The Supreme Court set aside the Madhya Pradesh High Court’s orders dated 18.06.2014 (W.P. No. 10267 of 2012) and 01.08.2014 (Review Petition No. 236 of 2014) – The appellant shall be allowed to complete his course and internship at Shaskiya Swasashi Dhanwantari Ayurvedic Medical College, Ujjain – The concerned authorities shall issue the appellant his B.A.M.S. degree upon completion – No order as to costs [Para 9].

Service Law – Seniority Dispute – Promotion vs. Direct Recruitment – Applicability of Special Rules, 1960 and Subordinate Service Rules, 1966 – Seniority Upheld for Promoted Engineers – The dispute pertained to the seniority of Assistant Engineers in the Kerala Water Authority, where the appellants, promoted from Draftsman-Grade I, challenged the High Court's decision granting seniority to directly recruited engineers – The High Court erred in applying Rule 4(b) of the Special Rules, 1960 at the stage of appointment to Assistant Engineer, as the rule only applies for further promotions – The Supreme Court clarified that once an individual becomes an Assistant Engineer, they can opt for either the degree or diploma quota for further promotion – The seniority list prepared by the Kerala Water Authority was held to be valid – Appeals allowed, and the High Court's judgments set aside [Paras 16-27].

Statutory Interpretation – Avoidance of Absurdity – Harmonious Construction – The interpretation by the High Court created an anomalous situation where a junior employee with a diploma who later acquired a degree could leapfrog a senior employee with both qualifications – The Supreme Court applied the presumption against absurdity, holding that statutory provisions must be construed to avoid irrational results – The Court reiterated that the legislature's intent must be honored through a rational and just interpretation [Paras 28-30].

Precedents – Inapplicability of Chandravathi P.K. Case (2004) 3 SCC 734 – The respondents relied on the Supreme Court's ruling in Chandravathi P.K., which dealt with weightage for service before acquiring a degree – The Court held that the ruling was not relevant to the present case, as it addressed a different issue – The private respondents' reliance on the case was misplaced [Paras 31].

Decision – Appeals Allowed – High Court Judgment Overturned – The Supreme Court ruled in favor of the appellants, restoring their seniority as per the original list prepared by the Kerala Water Authority – The judgments of the Single Judge and the Division Bench were set aside [Para 32].

Criminal Law - Rape – Child Victim – Conviction Restored – Acquittal by High Court Set Aside – The appellant-State challenged the High Court’s decision acquitting the respondent-accused of rape charges – The Trial Court had convicted the accused based on medical evidence and eyewitness testimony but was overturned by the High Court on grounds of contradictions in witness statements – The Supreme Court held that minor inconsistencies in witness statements do not vitiate the prosecution case, especially in cases of child sexual assault – The doctrine of actus curiae neminem gravabit was invoked, emphasizing that delays in legal proceedings should not prejudice the victim – Held: The Trial Court’s conviction is restored, and the respondent-accused is directed to surrender and serve the sentence [Paras 17-22].

Child Witness – Competency and Reliability – Need for Cautious Evaluation – The Supreme Court reaffirmed that child witnesses can be competent if they understand the duty to speak the truth – The victim was unable to testify due to trauma, but her silence and tears were noted as significant indicators of distress – The Court cited Hemudan Nanbha Gadhvi v. State of Gujarat (2019) 17 SCC 523, holding that the inability of a minor victim to testify does not automatically discredit the prosecution case – Held: The testimony of a traumatized child victim cannot be disregarded, especially when corroborated by medical and circumstantial evidence [Paras 12-14, 17].

Medical Evidence – Injuries Indicating Sexual Assault – Corroboration with Circumstantial Evidence – The medical report confirmed fresh injuries to the victim’s private parts consistent with sexual assault – The accused had injuries on his genitalia, supporting the prosecution’s claim of forced intercourse – The defense's argument that the injuries were caused by a nail was dismissed as unsubstantiated – Held: Medical evidence strongly supports the prosecution case, affirming the guilt of the accused [Paras 10, 20].

Circumstantial Evidence – Chain of Events Leading to Conviction – The presence of bloodstains, the victim’s unconscious state, and the accused fleeing the scene corroborated the prosecution's case – The Supreme Court applied the Sharad Birdhichand Sarda v. State of Maharashtra (1984) 4 SCC 116 test for circumstantial evidence, holding that the established facts were consistent only with the guilt of the accused – Held: The circumstantial evidence formed a complete chain pointing to the accused's guilt beyond reasonable doubt [Paras 15-16].

Reversal of Acquittal – Failure of High Court to Apply Settled Principles of Law – The Supreme Court criticized the High Court for failing to independently assess the evidence and merely dismissing the prosecution’s case based on minor discrepancies – Citing State of U.P. v. Krishna Gopal (1988) 4 SCC 302, the Court emphasized that reasonable doubt must be substantial, not speculative – Held: The High Court’s reasoning was legally flawed, and its order of acquittal is set aside [Paras 6, 19].

Decision: Appeal Allowed – The Supreme Court set aside the High Court’s judgment dated 12/07/2013, which had acquitted the accused – The Trial Court’s judgment dated 19/11/1987 convicting the accused under Section 376 IPC is restored – The accused is directed to surrender within four weeks to serve the sentence – No order as to costs [Para 22].