Civil Law - Power of Attorney – Nature and Revocability – Section 202 of the Contract Act – GPA Not Coupled with Interest – The appellants contended that a GPA coupled with an Agreement to Sell constituted an irrevocable agency under Section 202 of the Indian Contract Act – Held: A power of attorney is an instrument of agency and does not by itself create an interest in the property unless explicitly stated – The agent’s right to remuneration or commission does not amount to an interest in the property – The High Court correctly held that the GPA terminated upon the death of the principal, and any subsequent transfer was void [Paras 35-38].

Property Law – Transfer of Immovable Property – Sections 54, 55 of Transfer of Property Act – Agreement to Sell Does Not Confer Title – The appellants relied on an Agreement to Sell executed alongside a GPA to claim ownership – Held: An agreement to sell does not constitute a conveyance under the Transfer of Property Act – Mere possession under such an agreement does not create ownership rights – A registered sale deed is required for transfer of title in immovable property [Paras 47-48].

Registration Act – Compulsory Registration of Documents – Sections 17, 49 of the Registration Act – Unregistered Agreement to Sell and GPA Insufficient – The court emphasized that documents affecting immovable property valued over Rs. 100 must be registered to have legal effect – The unregistered documents relied upon by the appellants were legally insufficient to claim ownership or execute a subsequent sale deed [Paras 50-53].

Limitation – Adverse Possession – Article 65 of Limitation Act – Twelve-Year Period for Possession Claims – The appellants' suit for declaration and possession was filed long after the contested sale transactions – Held: Under Article 65 of the Limitation Act, a suit for possession based on ownership must be filed within twelve years from the date the plaintiff’s possession was disturbed – The claim was time-barred [Paras 56-58].

Suit for Injunction – Title in Question – Declaratory Relief Necessary – A finding on title is necessary for an injunction suit where possession is disputed – Held: Where possession is to be determined based on title, a suit for mere injunction without a declaration of ownership is not maintainable – In the present case, title was directly in issue, and the findings of the lower courts on ownership were upheld [Paras 57-61].

Decision: The appeals were dismissed – The High Court's judgment upholding the dismissal of the appellant's suit was affirmed.

Criminal Law - Criminal Proceedings – Quashing of Summoning Order – Section 482 CrPC – Lack of Sanction for Prosecution – The appellant, a government officer, was accused of wrongful representation and intimidation in a workplace sexual harassment case – She was neither named in the initial FIR nor part of the original complaint – Sanction for prosecution was sought but denied by the competent authority (Bureau of Indian Standards - BIS) – Held: The Magistrate erred in taking cognizance without prior sanction under Section 197 CrPC – Absence of valid sanction vitiates criminal proceedings – Summoning order and chargesheet quashed [Paras 32-33].

Public Servant – Requirement of Sanction – Section 197 CrPC – Protection from Prosecution – The appellant, as a public servant, was performing her official duties as Presiding Officer of an Internal Complaints Committee (ICC) – Held: Since her actions were connected to official duties, prior sanction from BIS was mandatory before prosecution – BIS explicitly refused sanction – Proceedings against the appellant unsustainable without proper sanction [Paras 23-25].

Deemed Sanction – No Concept Under Section 197 CrPC – Respondents contended that failure to grant sanction within the stipulated time amounted to deemed sanction – Held: Section 197 CrPC does not recognize the concept of deemed sanction – Reliance on Vineet Narain v. Union of India and Subramanian Swamy v. Manmohan Singh misplaced – Parliament has not incorporated deemed sanction into law, and courts cannot read such a mandate into the statute [Paras 30-31].

Official Duty and Criminal Intent – Filing of Counter Affidavit in Tribunal – Appellant Filed Counter Affidavit Defending ICC’s Report – Complainant Later Alleged It Was Done Without Consent – No Malicious Intent Found – Appellant Respected Complainant’s Wish to Represent Herself and Filed an Application to Amend the Affidavit – Held: No prima facie case of misconduct or wrongful intent – Allegations do not warrant prosecution [Paras 21-22].

Decision: Criminal appeal allowed – Chargesheet, summoning order, and all criminal proceedings against the appellant quashed – Magistrate erred in taking cognizance without prior sanction – Section 197 CrPC prohibits prosecution of public servants for actions connected to official duties without proper sanction – No "deemed sanction" concept applies under CrPC – No case for wrongful representation or intimidation made out against the appellant [Para 32].
 

Civil Writ - Challenging the expulsion of the Petitioner from the Bihar Legislative Council - Judicial Review – Scope under Article 212 – Legislative Privilege Not Absolute – Maintainability of Writ Petition – The Respondents contended that the proceedings of the Bihar Legislative Council are immune from judicial review under Article 212(1) of the Constitution – Held: The bar under Article 212 applies only to procedural irregularities and does not preclude scrutiny of legislative decisions that impact fundamental rights – The Ethics Committee’s decision, being administrative rather than legislative, is amenable to judicial review – The Writ Petition is maintainable [Paras 10-23].

Doctrine of Proportionality – Expulsion of Legislator – Applicability of Judicial Review – The Court examined whether the punishment imposed was proportionate to the offence – Held: The doctrine of proportionality is a well-established principle in Indian and international jurisprudence, ensuring that punitive measures are rational and balanced – Constitutional Courts have the authority to assess whether the punishment imposed on a legislator is excessive and interferes with democratic representation – Expulsion, being the severest form of disciplinary action, must be reserved for grave misconduct [Paras 24-45].

Legislative Punishment – Expulsion as Disciplinary Action – Alternative Measures Available – The Bihar Legislative Council’s Ethics Committee recommended the Petitioner’s expulsion while only suspending another legislator, Md. Sohaib, for two days for similar conduct – Held: The Ethics Committee failed to adopt a graded approach in awarding penalties, thereby violating the principle of fairness – The House, as a constitutional institution, should exercise restraint and avoid excessive punitive measures that undermine representative democracy – The Petitioner’s expulsion was excessive and required reconsideration [Paras 46-76].

Article 142 – Power of the Supreme Court to Ensure Complete Justice – Reinstatement of Petitioner – The Petitioner had already suffered seven months of expulsion and had missed a legislative session – Held: In light of proportionality and fairness, the Court invoked its powers under Article 142 to substitute the punishment – The period of expulsion shall be deemed as suspension, and the Petitioner is directed to be reinstated as a Member of the Bihar Legislative Council with immediate effect – However, he shall not be entitled to remuneration for the period of expulsion [Paras 77-87].

Bye-Election Notification – Quashed Due to Reinstatement of Petitioner – During the pendency of the petition, the Election Commission announced a bye-election for the Petitioner’s vacant seat – Held: Since the Petitioner’s expulsion has been reversed, the Election Commission’s notification declaring a bye-election is quashed, and all actions taken pursuant to it are annulled [Paras 88-90].

Decision – Expulsion Set Aside – Petitioner Reinstated with Modified Punishment – The Supreme Court quashed the expulsion order, holding it excessive and disproportionate – The Petitioner is reinstated as a Member of the Bihar Legislative Council, but his expulsion period shall be treated as suspension – The Election Commission’s bye-election notification is annulled, and all related proceedings are set aside – However, the Petitioner shall not be entitled to any salary or benefits for the period of expulsion – Held: Writ petition allowed, expulsion set aside, and Petitioner reinstated.

Tenancy Law - Eviction Suit – Bona Fide Need – Landlord's Right to Choose Property for Use – The appellant-landlord sought eviction of the tenant for the purpose of establishing an ultrasound business for his two unemployed sons – The trial court decreed the suit, holding that the bona fide need was established based on financial capacity and suitability of the premises – However, the First Appellate Court and High Court reversed the decision, citing lack of proof of expertise by the sons – Held: A landlord is the best judge of his needs and cannot be compelled to choose another property – The absence of technical expertise in the sons does not negate the bona fide requirement – Eviction decree restored [Paras 10-12].

Compromise Decree in Earlier Eviction Suit – No Perpetual Bar on Future Eviction – The respondents argued that a previous compromise in 1988 granted them perpetual tenancy rights, making fresh eviction proceedings barred – Held: The compromise only confirmed tenancy over specific rooms but did not prevent future eviction suits for legitimate reasons – No agreement can permanently override statutory eviction rights under rent control laws – Fresh eviction suit maintainable [Paras 13-14].

Landlord’s Need and Tenant’s Objection – No Dictation by Tenant on Property Use – The respondents claimed that the landlord had other properties available and should not seek eviction from the suit premises – Held: The tenant cannot dictate which property the landlord should use – The property’s proximity to a medical clinic and pathology lab made it the most suitable for the ultrasound business – Tenant’s objections cannot override the landlord’s rights [Paras 11-12].

Effect of Past Eviction Proceedings – Prior Use of Evicted Property Does Not Affect Present Claim – The respondents argued that in a previous eviction case, the landlord did not use the vacated premises for the stated purpose but instead rented it out – Held: The need for eviction must be assessed as of the date of the present suit – Past use of other properties is irrelevant to the current bona fide need – Eviction claim stands independently justified [Paras 15-16].

Decision: Civil appeal allowed – First Appellate Court and High Court orders set aside – Eviction suit decreed – Respondents directed to vacate premises within three months – Landlord’s bona fide need recognized – No perpetual right of tenancy arises from past compromise decree [Paras 16-17].
 

Service Law - Government Service – Unauthorized Absence – Denial of Pension – Absence Regularized as Extraordinary Leave – Tribunal’s Direction for Inquiry Ignored – The appellant, a government employee, remained absent from service from 1987 to 2007 – The Tribunal directed the authorities to conduct an inquiry into her claim that she was wrongfully prevented from working – No inquiry was conducted, and her absence was later treated as extraordinary leave – Held: Since the appellant’s service was regularized without a break, she cannot be denied pension on the ground of unauthorized absence – Authorities’ failure to conduct an inquiry cannot shift the burden on the appellant to prove she was prevented from working – Appellant entitled to pension [Paras 11-12].

Pension Eligibility – Regularization of Service – No Break in Service – West Bengal Service (Death-cum-Retirement Benefit) Rules, 1971 – Appellant’s service was regularized, and she was allowed to rejoin without disciplinary action – Rule 175 and Rule 176(4) provide that an employee on extraordinary leave is not entitled to salary but does not prohibit pension eligibility – Held: Having regularized the service, the authorities cannot now treat the period as a break in service to deny pension – Appellant entitled to pension but not arrears [Paras 12-13].

Failure to Hold Inquiry – Violation of Natural Justice – Tribunal’s Order Not Complied With – The Tribunal had directed a departmental inquiry to determine whether the appellant was unlawfully prevented from performing her duties – Authorities failed to conduct such an inquiry and directly denied pension – Held: Denial of pension must be based on proven misconduct, not mere absence – Authorities cannot refuse pension without establishing unauthorized absence through due process [Paras 11-12].

Decision: Civil Appeals allowed – Authorities directed to finalize the appellant’s pension within three months – No arrears payable – Denial of pension without inquiry was unjustified – Once service is regularized, absence cannot be treated as break in service [Para 13].

Civil Writ – Tender - Public Procurement – Rights of Micro and Small Enterprises – 25% Procurement Mandate – Enforceability of Procurement Policy – The petitioners, an MSE engaged in pharmaceutical manufacturing, challenged government tenders requiring high minimum turnover thresholds, preventing their participation – Contended that the Public Procurement Policy, 2012 mandates 25% procurement from MSEs, and such turnover clauses defeat the policy’s purpose – Held: The Procurement Order, 2012 has the force of law, and government agencies have a statutory duty to implement the 25% procurement mandate – However, this does not create an individual enforceable right for MSEs to demand procurement – Government instrumentalities must ensure compliance through their Review Committees and Grievance Cells [Paras 21-22].

Judicial Review – Ensuring Effective Implementation of Procurement Policy – Role of Review Committees and Grievance Cells – Courts Must Focus on Institutional Integrity – Petitioners sought court intervention to strike down tender conditions as unconstitutional – Held: Judicial review should primarily ensure effective functioning of statutory bodies like the Review Committee and Grievance Cell under the MSMED Act – Court directed authorities to verify whether procurement targets are being met independently of reserved categories – Duty-bearers must be held accountable, and failure to comply can be judicially reviewed [Paras 23-24].

Minimum Turnover Clauses – Discriminatory Impact on MSEs – Proportionality Test – Petitioners argued that high turnover thresholds violate Articles 14 and 19 of the Constitution by unfairly excluding smaller enterprises – Government defended the requirement, citing quality control and financial stability concerns – Held: Turnover is not always an accurate indicator of manufacturing capability – Such clauses must be proportionate to the contract value and should not override the statutory procurement mandate – Court directed Review Committee and Grievance Cell to define limits on turnover clauses and issue guidelines within 60 days [Paras 32-34].

Government Accountability – Monitoring Compliance with Procurement Mandate – Role of Comptroller and Auditor General (CAG) – Data provided by the Union of India showed that procurement from MSEs exceeded 25% in recent years – However, CAG audit reports revealed lapses in monitoring compliance, with some Public Sector Undertakings (PSUs) failing to justify deviations – Held: The Review Committee must assess whether reserved categories and the general 25% procurement mandate are being treated separately – Government agencies directed to submit compliance reports within 60 days [Paras 26-28].

Decision: Writ petition disposed of with directions – The Public Procurement Policy, 2012 has the force of law and must be implemented – Government authorities directed to: (i) Ensure compliance with the 25% procurement mandate independent of reserved categories, (ii) Review the impact of minimum turnover clauses and issue guidelines to prevent discrimination against MSEs, and (iii) Strengthen the Grievance Cell to address procurement-related complaints – Review Committee and Grievance Cell to submit reports within 60 days [Para 39].
 

Civil Law - Insurance Law – Non-Disclosure of Existing Policies – Material Suppression – Repudiation of Claim – The appellant’s father obtained a life insurance policy but failed to disclose multiple existing policies from other insurers – Insurer repudiated the claim on the ground of material suppression – National Commission upheld repudiation relying on Reliance Life Insurance Co. Ltd. v. Rekhaben Nareshbhai Rathod and Satwant Kaur Sandhu v. New India Assurance Co. Ltd. – Held: Mere non-disclosure of other policies, without evidence that it influenced the insurer’s risk assessment, does not justify repudiation – Insurer had access to records to verify policyholder’s financial standing – No fraudulent intent proven – Repudiation held to be unjustified [Paras 15-18].

Utmost Good Faith – Duty of Disclosure – Life Insurance Policy – The principle of uberrima fides (utmost good faith) requires the policyholder to disclose material facts – However, disclosure is required only for information that would affect the insurer’s decision to issue or price the policy – Held: In this case, the insured disclosed a higher-value policy but omitted lower-value policies – Insurer’s risk was not materially affected – Suppression must be deliberate and fraudulent to justify repudiation [Paras 19-20].

Materiality of Non-Disclosure – Test of a Prudent Insurer – Courts Must Assess If Non-Disclosure Would Affect Risk Assumption – The test is whether the insurer would have altered its decision had it known the omitted fact – Held: Since the insured disclosed a Rs. 40 lakh policy but omitted smaller-value policies, the insurer had no basis to assume increased risk – Non-disclosure did not constitute material suppression – Repudiation held to be improper [Paras 17-18].

Consumer Protection – Insurance Claim Rejection – Jurisdiction of Consumer Fora – The claim was initially rejected by the State Commission and upheld by the National Commission – Supreme Court emphasized that consumer forums must apply strict scrutiny in insurance repudiation cases to prevent arbitrary claim denials – Held: Courts must balance insurer’s right to risk assessment with policyholder’s right to fair adjudication – Rejection of claim set aside [Paras 14-16].

Decision: Civil appeal allowed – Orders of National and State Commissions set aside – Repudiation of claim declared invalid – Insurer directed to release full policy benefits with 9% interest per annum from due date until realization – Insurance contracts must be interpreted in favor of policyholders unless fraud is proven [Paras 20-21].

Property Law - Land Reservation – Lapse of Reservation – Section 49(7) of the MRTP Act – No Acquisition Within Prescribed Timeline – The property in question was originally designated as reserved for a private school under the development plan of Amravati – The original owners served a purchase notice under Section 49 in 2006, requiring acquisition within one year – No acquisition was undertaken by the authorities, and the land was subsequently sold to the appellants in 2015 – Held: By operation of Section 49(7), reservation lapsed as acquisition proceedings were not initiated within the prescribed period – Land deemed de-reserved and free for development [Paras 36-37].

Failure to Acquire Land – Section 127 of the MRTP Act – No Action for 10 Years – The development plan came into effect in 1993, and no steps for acquisition were taken for over 20 years – Original owners issued a second purchase notice under Section 127 in 2014, but authorities again failed to act within the statutory one-year period – Held: Reservation deemed to have lapsed under Section 127 as well, reinforcing the de-reservation of the land – Subsequent purchasers entitled to utilize the land as per law [Paras 44-45].

Rights of Subsequent Purchasers – Whether Purchaser Can Claim De-Reservation – The High Court held that de-reservation benefits under Section 49 do not extend to subsequent purchasers – However, the Supreme Court disagreed, holding that once reservation lapses under law, the land is free from restrictions irrespective of ownership changes – Held: Appellants, as purchasers, can claim de-reservation and develop the land legally [Paras 46-47].

Excessive Delay in Acquisition – Article 142 of the Constitution – Supreme Court’s Power to Do Complete Justice – The land had remained reserved for 33 years without acquisition – Prolonged inaction deprived both original owners and purchasers of their rights – Held: Continuing reservation without acquisition is arbitrary and unconstitutional – Supreme Court invokes Article 142 to hold that the land is free from reservation with immediate effect [Paras 40-41].

Decision: Civil Appeals allowed – Land reservation deemed to have lapsed under Sections 49(7) and 127 of the MRTP Act – Appellants entitled to develop the land as per permissible use – Authorities directed to issue necessary approvals within three months – Supreme Court invokes Article 142 to put an end to prolonged litigation [Paras 48-50].

Criminal Law - Criminal Conspiracy – Banking Fraud – Telegraphic Transfer Scam – Sections 120B, 403, 409, 420 IPC – Acquittal of Bank Officials – Conviction of Accused No. 3 Set Aside – The case involved fraudulent remittance of Rs. 6.7 crores through fake TTs and subsequent withdrawals – Accused No. 1 (Branch Manager) and Accused No. 2 (Officer) were initially convicted but later acquitted by the High Court – Accused No. 3 (Nandkumar Babulal Soni) was convicted under Sections 120B and 411 IPC for allegedly receiving stolen property – Held: No sufficient evidence to link Accused No. 3 with the original conspiracy of fraudulent remittance – Prosecution failed to establish beyond reasonable doubt that seized gold bars were the same as those obtained through fraud – Conviction of Accused No. 3 set aside [Paras 25-30].

Possession of Stolen Property – Burden of Proof – Section 411 IPC – Prosecution Failed to Prove Stolen Nature of Seized Gold – Appellant Entitled to Return of Property – The Trial Court and High Court relied on circumstantial evidence and applied Section 106 of the Evidence Act to hold that Accused No. 3 failed to prove lawful acquisition of gold bars – However, prosecution could not establish that the seized gold bars were the same as those fraudulently obtained from Vijaya Bank – Held: Mere possession of gold does not establish guilt under Section 411 IPC unless knowledge of stolen nature is proven – Seized gold bars ordered to be returned to Accused No. 3 [Paras 31-35].

Application of Presumptions – Section 106 of Evidence Act – Burden of Proof Misapplied – The High Court relied on Section 106 of the Evidence Act to shift the burden on Accused No. 3 to explain the source of gold bars – However, legal principles dictate that prosecution must first establish theft before requiring the accused to prove lawful acquisition – Held: Since prosecution failed to prove that seized gold bars were stolen, Section 106 could not be applied against the accused – Prosecution failed to close the chain of circumstantial evidence beyond reasonable doubt [Paras 36-37].

Return of Gold Bars – Vijaya Bank’s Claim Rejected – Bank Not Entitled to Possession – Vijaya Bank sought possession of the seized gold bars on the ground that they were acquired through fraudulent transactions – However, since the prosecution failed to establish that the specific gold bars were the proceeds of crime, Vijaya Bank’s claim was rejected – Held: In absence of proof of stolen nature, the seized gold bars must be returned to Accused No. 3 – Appeals by Vijaya Bank and co-appellant for gold bars dismissed [Paras 38-39].

Decision: Criminal Appeal Nos. 581-583 of 2012 filed by Accused No. 3 (Nandkumar Babulal Soni) allowed – Conviction under Sections 120B and 411 IPC set aside – Seized gold bars ordered to be returned to Accused No. 3 – Criminal Appeal No. 584 of 2012 filed by Vijaya Bank dismissed – Vijaya Bank not entitled to possession of the seized gold bars – Criminal Appeal Nos. 579-580 of 2012 filed by Hiralal Babulal Soni seeking return of gold bars dismissed – Findings are for the purpose of criminal proceedings and do not affect other legal remedies available to the parties [Para 39].