Negotiable Instruments – Interim Compensation – Interpretation of ‘Drawer’ – High Court’s judgment held that authorized signatories of cheques cannot be considered as ‘drawers’ under Section 143-A, NI Act – Supreme Court affirms this interpretation, emphasizing the clear statutory language and legislative intent – Liability for interim compensation rests solely with the company as the ‘drawer’ – Directors or authorized signatories acting on behalf of the company are not personally liable [Paras 1-36].

Statutory Interpretation – Penal Provisions – Strict interpretation of penal statutes – The principle of statutory interpretation requires that penal provisions be read strictly – Extensions of liability under Sections 141 and 143-A of the NI Act must align with clear statutory language and legislative intent – Courts must avoid expansive interpretations that impose unjust liability [Paras 28-35].

Vicarious Liability – Corporate Law – Separate Legal Identity – Distinction between a company and its authorized signatories – Authorized signatories act on behalf of the company but do not assume the company’s legal identity – Vicarious liability under Section 141, NI Act is contingent on specific statutory conditions [Paras 30-34].

Decision: Appeals dismissed – High Court’s judgment upheld – Authorized signatories are not ‘drawers’ under Section 143-A, NI Act – Liability for interim compensation is confined to the company [Para 36].

Negotiable Instruments Act – Interpretation of Sections 138 and 143-A – Supreme Court affirms Bombay High Court’s interpretation that the term “drawer” in Section 143-A of the NI Act refers solely to the issuer of the cheque and does not include authorized signatories of the company. The Court held that the primary liability under Section 143-A is on the drawer, which is typically the company itself, and this liability does not extend to the individual signatories acting on behalf of the company. This interpretation aligns with the principles of vicarious liability under the NI Act and ensures that the legal status of signatories remains distinct from that of the company. [Paras 13-17, 28-34].

Vicarious Liability – Corporate Law – Supreme Court reaffirms that vicarious liability under Section 141 of the NI Act is applicable only when specific statutory conditions are met, emphasizing that the legal identity of a company is distinct from its authorized signatories. The liability of authorized signatories is secondary and contingent upon the company’s failure to fulfill its obligations. The Court applied strict interpretation of penal statutes, rejecting an unjust expansion of liability beyond what is explicitly provided by law. [Paras 28-31].

Decision – Dismissal of Appeals – Held – The Supreme Court dismissed the appeals, upholding the Bombay High Court’s judgment that the company, as the “drawer,” is the only party liable for interim compensation under Section 143-A. The Court ruled that extending liability to authorized signatories would contradict legislative intent and established judicial precedents. [Para 35].

Negotiable Instruments Act – Section 138 – Compounding of Offense – Consent Required – The High Court compounded an offense under Section 138 of the N.I. Act without the complainant's consent, invoking Section 482 Cr.P.C. and Section 147 of the N.I. Act – Held: Compounding under Section 147 of the N.I. Act requires the complainant's consent – The High Court erred in exercising its inherent powers under Section 482 Cr.P.C. to override this requirement – The consent of the complainant is a sine qua non for compounding offenses under Section 138 N.I. Act – The appeal is allowed, and the High Court's order is quashed to the extent it compounded the offense without consent​.

Criminal Procedure Code – Section 482 – Inherent Powers of High Court – Scope and Limitations – Section 482 Cr.P.C. allows the High Court to prevent abuse of the process of any Court or to secure the ends of justice – However, this power cannot be used to compound offenses under Section 138 N.I. Act without the complainant's consent – Held: The High Court wrongly invoked Section 482 Cr.P.C. to compound the offense under Section 138 N.I. Act in the absence of consent from the complainant – The inherent power of the High Court cannot be used to bypass specific legal requirements for compounding offenses​.

Decision: Appeal allowed – The impugned judgment of the High Court, which compounded the offense under Section 138 of the N.I. Act without the complainant's consent, is set aside – However, the Supreme Court, recognizing the peculiar circumstances and the fact that the respondent had deposited the cheque amount with interest, invoked its power under Article 142 of the Constitution to quash the pending proceedings – The appellant is entitled to withdraw the deposited amount​.

Customs Duty – Redemption of Confiscated Goods – Whether customs duty is payable when confiscated goods are redeemed after payment of fine under Section 125 of the Customs Act – Held, duty liability arises upon exercise of option to pay fine for redemption – Duty must be assessed under Section 28 – Interest on delayed payment under Section 28AB applicable – [Paras 8.1-8.9, 10.1].

Interpretation of Jagdish Cancer Case – Liability to pay customs duty in confiscation proceedings arises under Section 125(2) and not Section 28 – However, Section 28 procedure applies for assessment and determination of duty – Interest under Section 28AB follows – Jagdish Cancer case does not preclude assessment under Section 28 for duty liability arising under Section 125(2) – [Paras 9.1-9.6].

Confiscation and Penalty – Distinction between duty obligation and penalty/fine for confiscation – Confiscation proceedings aim to transition from illegality to compliance – Payment of fine legitimizes the importation – [Paras 5.1, 8.4-8.5].

Decision: Appeal dismissed – High Court’s judgment upheld – Appellant liable to pay customs duty and interest on delayed payment under Section 28AB – Costs not imposed – [Paras 11].

Public Trust Doctrine – Environmental Protection – Application of public trust doctrine to protect natural resources – State's duty to preserve environment for public use and enjoyment – Decision for environmental release of GM mustard hybrid DMH-11 quashed due to procedural lapses and lack of scientific certainty on impacts [Paras 42.10-42.22].

Right to Safe and Healthy Environment – Violation – Decision for GM mustard release found to violate Article 21 – Lack of comprehensive risk assessment and failure to adhere to the precautionary principle – Directions issued for future decision-making processes [Paras 43.1-44.3].

Precautionary Principle – Importance in Environmental Decisions – Emphasis on the need for anticipatory action to prevent environmental harm – Detailed examination of risk assessments and scientific studies required before environmental release of GM crops – Decision for GM mustard release quashed for not adhering to precautionary principle [Paras 45.1-47.6].

Environmental Governance – Role of Parliamentary Committees – Importance of scrutiny by legislative bodies – Recommendations of Parliamentary Standing Committees on Agriculture and on Science and Technology, Environment and Forest to be followed in GM crop regulation [Paras 48.1-48.10].

Conclusion – Writ petitions allowed – Environmental release of GM mustard hybrid DMH-11 quashed – Directions for a comprehensive national policy on GM crops and reforms in GEAC composition issued – Need for transparency, accountability, and public participation emphasized [Para 50-51].

Criminal Law – Examination Fraud – Systemic Malpractice – The petitioners alleged that the NEET 2024 examination was compromised due to widespread paper leaks and manipulation – Investigation revealed isolated incidents in Hazaribagh, Patna, and other places but no evidence of systemic malpractice affecting the overall integrity of the examination – The Supreme Court, after analyzing data and expert reports, concluded that there was no need for a re-examination as the breaches were not widespread and did not affect the overall results – The NEET 2024 results upheld with directions for recalibration of marks concerning one specific question [Paras 70-77].

Examination Law – Data Analysis and Integrity – IIT Madras report analyzed by the court showed no abnormal patterns or systemic issues in the NEET 2024 results – Court dismissed the argument of conflict of interest concerning the Director of IIT Madras who provided the data analysis, stating that the analysis was impartial and supported by data – NTA’s decision to award marks for both options in a contested question was overturned, and the correct answer was mandated based on IIT Delhi’s expert opinion [Paras 54-60].

Administrative Law – Reopening of Registration and Change of Cities – Allegations that the reopening of the registration window and changes in examination city preferences facilitated malpractice – Data analysis showed no significant increase in success rates among candidates who registered or changed cities during the extended window – Court found no basis to conclude that reopening facilitated malpractice, and the action was justified [Paras 78-80].

Decision:

Writ Petitions dismissed – NEET 2024 examination results upheld with a directive for the recalibration of marks concerning a specific question – No re-examination ordered.

Insolvency and Bankruptcy – Simultaneous Proceedings – Financial creditor filed applications under Section 7 of IBC against both the corporate debtor and corporate guarantor – Adjudicating authority admitted the application against the corporate debtor despite the approval of a resolution plan for the guarantor – Supreme Court held that the financial creditor can proceed against both simultaneously – Separate proceedings permissible under Section 60(2) and (3) of the IBC – [Paras 19-29].

Subrogation Rights – Section 140 of Contract Act – Payment by the appellant to financial creditor under the resolution plan for the corporate guarantor does not extinguish the principal borrower's liability – Subrogation rights extend only to the amount paid – Financial creditor retains right to recover balance from the principal borrower – Section 140 interpreted to provide subrogation rights proportionate to the payment made – [Paras 24-26].

Corporate Guarantor’s Liability – Approval of a resolution plan for the corporate guarantor does not discharge the principal borrower’s liability – Liability of surety and principal debtor is co-extensive under Section 128 of Contract Act – Holding company and subsidiary are distinct legal entities – Resolution plan of holding company cannot include subsidiary’s assets – [Paras 16-18, 20-21].

Decision: Appeal dismissed – NCLAT’s view upheld – Financial creditor entitled to proceed against corporate debtor despite resolution plan for corporate guarantor – No costs imposed.

Sentencing under Section 307 IPC – Limitation on Term – Convicts sentenced to 14 years rigorous imprisonment challenged the sentence – Argument that Section 307 IPC limits imprisonment to ten years unless hurt caused warrants life imprisonment – Court examined statutory interpretation of Section 307 IPC – Held that imprisonment exceeding ten years without awarding life imprisonment is impermissible – Sentence reduced to ten years rigorous imprisonment with fine maintained [Paras 1-10].

Concurrent Conviction – Upheld – The appellants' conviction under Section 307 read with Section 34 IPC supported by overwhelming evidence – Sentence modification restricted to statutory limits without altering conviction [Paras 2-3, 6].

Mens Rea and Actus Reus – Clarified the offence under Section 307 IPC constitutes attempt to murder by intention or knowledge causing hurt – Emphasized that actual hurt or bodily injury enhances the penalty to life imprisonment or up to ten years but not beyond [Paras 4-7].

Decision – Appeal allowed in part – Conviction upheld – Sentence modified from 14 years to 10 years rigorous imprisonment – Fine and default clause upheld [Paras 8-10].

Review Jurisdiction – Grounds for Review – High Court allowed review petitions reversing the decision of the original Division Bench – Review jurisdiction not properly exercised – Discovery of new evidence not sufficient to warrant review as it was not material to the contempt issue – Order set aside [Paras 10-26].

Contempt of Court – Limitation – Section 20 of Contempt of Courts Act mandates one-year limitation for initiating contempt proceedings – Court emphasizes strict adherence to limitation period – "Continuing wrong" principle clarified – High Court's decision reversed for accepting a time-barred contempt petition [Paras 28-57].

Exercise of Review Jurisdiction – High Court invoked Order XLVII Rule 1 based on discovery of new evidence – Review order found to exceed the jurisdiction – Court emphasized limits of review jurisdiction – Review jurisdiction must not substitute appellate jurisdiction [Paras 10-27].

Evidence – Additional Documents – New evidence must be materially important to the decision – Documents discovered post-judgment not considered as impacting the original decision materially – High Court’s reliance on new evidence deemed inappropriate [Paras 14-20].

Contempt Proceedings – Inherent Power – Court discussed the inherent power of High Courts under Articles 129 and 215 – Such power must align with Contempt of Courts Act – Limitation period is mandatory and cannot be overlooked based on inherent power alone [Paras 28-34].

Continuing Wrong – Concept Clarified – Continuing wrong must involve a fresh breach each day – Mere non-compliance over time does not constitute continuing wrong – Court outlined clear criteria for invoking the principle of continuing wrong in contempt cases [Paras 35-57].

Procedure for Contempt – Necessity for Due Process – Emphasis on due process and adherence to statutory requirements in contempt proceedings – Court stressed on procedural fairness and necessity of clear grounds before initiating contempt actions [Paras 28-57].

Decision – Appeal allowed – High Court’s order set aside – Division Bench’s judgment and order dated 16th August, 2018 restored – Petition for contempt dismissed as time-barred [Para 57].