Motor Accident Compensation – Notional Income – Reduction of Compensation Reversed – The High Court reduced the compensation awarded by the Motor Accident Claims Tribunal (MACT), applying minimum wage rates instead of the special Deputy Commissioner rates for calculating the deceased’s notional income – Held: There was no evidence to support the High Court’s finding that the special rates did not apply to the deceased – The MACT’s use of the special rates was reinstated [Paras 4-8].

Age Determination – Conflict Between Documents – Section 94 of the Juvenile Justice Act, 2015 – School Leaving Certificate Prevails – The deceased’s age was disputed based on the Aadhar Card and School Leaving Certificate – Held: As per Section 94 of the Juvenile Justice Act, statutory recognition is given to School Leaving Certificates for determining age – The School Leaving Certificate, recording the deceased’s date of birth as 7th October 1970, was accepted, and the multiplier was adjusted accordingly [Paras 9-12].

Interest on Compensation – Increase Ordered – The High Court reduced the interest on compensation from 7.5% to 6% – Held: In the context of compensation claims for death, the interest rate must be just and reasonable – The rate was increased to 8%, payable from the date of filing the claim [Paras 14-16].

Decision: The appeals are allowed, and the compensation amount is recalculated to Rs.15,00,000 with 8% interest.

Arbitration Award - Stay of Execution - Section 36 of the Arbitration Act - The appellant challenged the High Court's order granting a stay of the arbitral award, conditional on furnishing a bank guarantee instead of requiring a deposit of the awarded amount - Held: Under Section 36(3), the Court should prioritize conditions to protect the decree-holder’s rights, generally requiring a deposit rather than a bank guarantee to secure awarded amounts [Paras 8-11, 15-17].

Government Entities and Arbitral Award Security - Equal Treatment - The High Court’s reasoning for accepting a bank guarantee based on the respondent's status as a statutory authority was incorrect - Public and private entities in arbitration are subject to similar conditions for stays, without privilege based solely on government or statutory status [Paras 13-15].

Modification of Stay Conditions - The Supreme Court directed the respondent to deposit 75% of the award amount, including interest, by 30 November 2024 to sustain the stay on enforcement - Failure to comply would result in immediate enforceability of the award in favor of the appellant [Para 17].

Civil Law - Co-Tenancy Rights – Uttar Pradesh Consolidation of Holdings Act, 1953 – Share of Land Modified – The appellants challenged the order allotting them a reduced share in Khata Nos. 98 and 99 – Held: The High Court correctly found that principles of Hindu law could not be applied to determine shares among Mohammedan parties – The appellants are entitled to only a 1/12 share, not 1/2 as claimed, in the disputed plots [Paras 14-17].

Relinquishment Deed – Registered Document – Presumption of Genuineness – The appellants disputed the relinquishment deed executed by their predecessor – Held: The relinquishment deed, being a registered document and not contested by Zahoor Ahmed during his lifetime, was valid and upheld by the High Court – The plots covered by the deed were rightly excluded from the appellants' share [Paras 10-12].

Application of Hindu Law – Error in Applying Hindu Principles to Mohammedans – The authorities below erroneously applied Hindu law regarding joint family property to the parties, who were Mohammedans – Held: The High Court correctly set aside this approach and re-determined shares based on Muslim law, limiting the appellants’ share to 1/12 [Paras 18-19].

Decision: The appeals are dismissed, and the appellants are entitled to 1/12 share of Khata Nos. 98 and 99, excluding certain plots. No order as to costs.
 

Suspension of Sentence – Section 389 of the CrPC – Suspension of Fine Allowed – The respondent’s sentence, including a fine of Rs.95,00,000, was suspended by the High Court pending appeal – Held: Section 389 of the CrPC empowers the appellate court to suspend both the sentence of imprisonment and the fine – The High Court’s suspension of the fine was valid, but the respondent’s deposit of Rs.15,00,000 would be treated as a condition for suspension of the fine [Paras 5-12].

Imprisonment for Non-Payment of Fine – Section 64 of the IPC – Fine Constitutes Part of Sentence – The court emphasized that the imposition of a fine is a form of punishment under Section 64 of the IPC, and non-payment can result in additional imprisonment – The respondent’s partial payment of Rs.15,00,000 would not exempt him from serving the sentence in default of the remaining fine [Paras 13-18].

Power of Appellate Court – Conditional Suspension of Fine – Judicial Discretion – While the appellate court can suspend fines, it must ensure that any conditions imposed for suspension are reasonable and do not violate the appellant's right to appeal or fundamental rights under Article 21 of the Constitution – The court modified the High Court’s order to make the deposit of Rs.15,00,000 a condition for suspending the sentence of fine [Paras 19-22].

Decision: The appeal is disposed of with a modification to treat the deposit of Rs.15,00,000 as a condition for suspending the fine. The remaining amount of Rs.15,00,000 shall be transferred to the Delhi High Court and invested until the appeal is decided.

Gift Deed – Validity and Acceptance – Section 126 of the Transfer of Property Act, 1882 – Gift Deed Upheld – The appellant challenged the validity of a registered gift deed dated 05.03.1983 executed in favor of the respondent – The appellant revoked the gift on 17.08.1987, claiming non-acceptance – Held: The gift deed was validly executed and accepted as it was acted upon, evidenced by possession and construction on the suit property by the respondent – The donor had no right to revoke the gift in the absence of any clause permitting revocation [Paras 6-12].

Revocation of Gift – Section 126 of the Transfer of Property Act, 1882 – Revocation Denied – The court examined whether the revocation of the gift deed was valid under Section 126 – Held: Revocation can occur only under specified contingencies agreed upon by the donor and donee or as per rescission conditions akin to a contract – As none of these conditions applied, the revocation deed was declared void ab initio [Paras 13-18].

Limitation Act – Article 65 of the Limitation Act, 1963 – Recovery of Possession – Suit Within Limitation – The appellant argued that the suit was barred by limitation – Held: A suit for recovery of possession based on title falls under Article 65 of the Limitation Act, which provides for a limitation period of 12 years – The suit was filed within the permissible period [Paras 19-24].

Decision: The appeal is dismissed as devoid of merit.

Constitutional Law – Right to Legal Aid – Fundamental Right under Article 21 – Writ Petition under Article 32 filed seeking humane treatment for prisoners, decongestion of jails, and access to legal aid – NALSA's efforts in ensuring legal aid for prisoners emphasized – Court acknowledges the importance of legal aid in ensuring equal justice as per Article 39-A of the Constitution – Held: Right to legal aid for indigent prisoners is a fundamental right under Article 21 of the Constitution – Ensuring this right is not merely a formality but must be actively implemented through effective legal representation [Paras 5, 7, 8, 10, 11].

Overcrowding in Prisons – Degrading Treatment of Prisoners – Issue raised regarding overcrowded prisons leading to inhumane conditions – Petitioner sought relief for prisoners facing overcrowded and unhygienic conditions – Court stressed the importance of addressing the issue through systemic reforms, including the establishment of Open Correctional Institutions – Held: The matter of overcrowded prisons will be addressed separately [Paras 1, 3].

Role of Legal Aid Clinics in Prisons – NALSA SOP-2022 – Legal aid provided through Prison Legal Aid Clinics (PLACs) established by NALSA across 1265 prisons – Detailed functions of PLACs outlined, including providing legal representation, bridging communication gaps between prisoners and courts, and facilitating the filing of appeals – Held: PLACs play a crucial role in ensuring prisoners' access to justice, particularly for vulnerable groups such as women and foreign nationals [Paras 11-13].

Jail Visiting Lawyers and Paralegal Volunteers – Role and Responsibilities – Jail Visiting Lawyers (JVLs) and Paralegal Volunteers (PLVs) designated to provide legal assistance to prisoners, including filing bail applications, parole, and other petitions – Their role extends to monitoring prison conditions and ensuring the rights of prisoners are upheld – Held: The roles of JVLs and PLVs are vital in bridging the information gap and ensuring that prisoners are not left without legal representation [Paras 13-14].

Statistical Data on Legal Aid Services – NALSA’s Performance – Court reviewed the statistical data on the number of prisoners who received legal aid – 324,867 inmates assisted in 2023-24 – Emphasis placed on continuing to address the gaps between those eligible for legal aid and those receiving it – Held: NALSA’s performance is commendable, but gaps in service provision must be addressed for effective implementation [Paras 15-16].

Pre-Litigation Assistance – NALSA’s Early Access to Justice Framework – NALSA introduced measures to provide legal assistance to suspects at the pre-arrest, arrest, and remand stages – Court emphasized the importance of legal representation at these crucial stages to prevent unlawful detention – Held: NALSA’s pre-litigation assistance is crucial for safeguarding the rights of suspects and arrestees, and its implementation should be diligently pursued [Paras 24-26].

Recommendations and Directions – Court issued detailed directions to NALSA, SLSAs, and DLSAs to ensure the efficient operation of PLACs and legal aid systems – Regular monitoring and audits of Legal Aid Defence Counsels, periodic interaction with convicts, and increased awareness campaigns were emphasized – Steps to strengthen the infrastructure and service conditions of legal aid lawyers were recommended – Held: Legal aid should not merely be available in theory but must be accessible and effective in practice, ensuring that the right to legal representation for indigent prisoners is realized [Paras 34-35].

Decision: Petition disposed of – Directions issued to NALSA, SLSAs, DLSAs, and relevant authorities to ensure efficient implementation of legal aid services – High Courts directed to issue practice directions to inform convicts of their right to legal aid when furnishing judgments – Appreciation expressed for the contributions of the Amicus Curiae and NALSA representatives in advancing the case [Paras 34-36].

Insolvency Law – Corporate Insolvency Resolution Process (CIRP) – Appellant challenged the settlement approved by the NCLAT under Rule 11 of the NCLAT Rules, 2016, which set aside the CIRP initiated against the Corporate Debtor under Section 9 of the Insolvency and Bankruptcy Code (IBC) – The appellant, a financial creditor, raised concerns about the legality of the settlement and its source of funds, contending that the NCLAT should not have used its inherent powers, bypassing the prescribed procedure for settlement under Section 12A of the IBC – Held: Rule 11 could not be invoked, as the legal framework under Section 12A and Regulation 30A of the CIRP Regulations 2016 provides an exhaustive procedure for withdrawal or settlement of CIRP post-admission [Paras 77-80].

Settlement of Claims – Inherent Powers of NCLAT – Rule 11 of the NCLAT Rules – The NCLAT invoked its inherent powers to approve the settlement despite the admitted CIRP and the absence of a formal application through the IRP – The Supreme Court held that Rule 11 could not be used to bypass Section 12A and Regulation 30A, which provides a detailed process for withdrawal or settlement after the initiation of CIRP – The Court noted that once the CIRP is admitted, the proceedings become in rem, and all creditors, including financial creditors like the appellant, become stakeholders whose interests must be considered – The NCLAT failed to adequately address the appellant's objections regarding the source of funds used in the settlement and potential violations of Delaware Court orders concerning fraudulent transfers [Paras 79-81].

Withdrawal of CIRP – Procedural Infirmities – Appellant raised concerns over the NCLAT’s approval of the settlement without following the due process laid out under Section 12A of the IBC and Regulation 30A – The Supreme Court emphasized that the proper procedure for withdrawal of CIRP includes filing an application through the IRP and placing it before the NCLT for approval, which was not followed in this case – The use of Rule 11 in this context was unwarranted and bypassed the prescribed legal process [Paras 79, 80].

Locus Standi of Financial Creditor – Appellant’s standing – The appellant, a financial creditor whose claims had been verified by the IRP, challenged the NCLAT’s decision to approve the settlement – The Supreme Court held that the appellant, as a necessary stakeholder in the CIRP, had locus standi to raise objections and challenge the settlement – The interests of all creditors must be protected in insolvency proceedings, and the appellant's grievances were validly raised [Paras 75, 76].

Decision: Appeal allowed – The NCLAT’s order approving the settlement and setting aside the CIRP is set aside – The parties are at liberty to seek withdrawal or settlement through the appropriate procedure under Section 12A of the IBC – The escrow amount of Rs 158 crore to be deposited with the CoC until further directions from the NCLT [Paras 86-88].

Corporate Insolvency - Initiation of CIRP – Application under Section 7 of the IBC – Acknowledgment of Debt in Balance Sheet – Validity of Application Confirmed – The appellant challenged the initiation of CIRP on the grounds that the Section 7 application was barred by limitation, and the debt owed to UCO Bank was not specifically acknowledged in the Corporate Debtor's balance sheet. The Supreme Court held that the entries in the balance sheets of the Corporate Debtor for the years 2017 and 2019, along with the One-Time Settlement (OTS) proposal, amounted to a valid acknowledgment of debt under Section 18 of the Limitation Act, thereby extending the limitation period. The CIRP initiation was upheld as being within the limitation period [Paras 3-6, 10-13].

Acknowledgment of Debt – Balance Sheets and OTS Proposal – Section 18 of the Limitation Act – Extension of Limitation Period – The Court observed that the balance sheet entries and the OTS proposal issued by the Corporate Debtor acknowledged the existence of a debt, even without the specific mention of UCO Bank's name. Citing the judgment in Asset Reconstruction Company (India) Ltd. v. Bishal Jaiswal, the Court affirmed that balance sheet entries, coupled with an auditor’s note on outstanding liabilities, can serve as acknowledgment of debt sufficient to extend the limitation period under Section 18 of the Limitation Act [Paras 7, 10-11].

Corporate Debtor’s Liability – OTS Proposal Constitutes Acknowledgment – The Corporate Debtor’s proposal for a One-Time Settlement (OTS) to UCO Bank was found to be a clear acknowledgment of a subsisting debt. The Court held that the OTS proposal indicated the existence of a debtor-creditor relationship and reaffirmed the Corporate Debtor's liability, further supporting the application of Section 18 of the Limitation Act to extend the limitation period [Paras 11-12].

Decision – The appeal was dismissed, affirming the orders of the Adjudicating Authority and NCLAT. The Court found no merit in the appellant’s arguments concerning the limitation and acknowledgment of debt [Paras 13-14].

Service Law - Disciplinary Proceedings – Procedural Lapses – Quashing of Dismissal Order – The respondent, a storekeeper implicated in a misappropriation case involving government rations, was dismissed following departmental proceedings – The CAT found procedural deficiencies in the inquiry and set aside the dismissal, allowing for fresh proceedings – The High Court upheld the CAT's decision but denied the appellants the right to reinitiate proceedings – Held: The High Court erred in removing the liberty to conduct a fresh inquiry, as the gravity of the charges justified such action [Paras 11-13, 18-19].

Non-payment of Subsistence Allowance – Impact on Disciplinary Proceedings – The respondent claimed prejudice due to non-payment of subsistence allowance – Reiterated that non-payment does not inherently vitiate proceedings unless specific prejudice is shown – Reference made to Indra Bhanu Gaur and Ghanashyam Das Srivastava – Held: Proceedings were to resume from the stage where they stood vitiated, and allowance was ordered to be released with interest [Paras 10, 19-21].

Principles of Natural Justice – Right to Fair Inquiry – Inquiry Officer's adherence to procedural fairness is paramount in disciplinary proceedings – Departure from prescribed procedures can invalidate proceedings but allows for fresh inquiry depending on the misconduct's severity – Reinforced in Chairman, LIC of India & Ors. v. A. Masilamani [Paras 14-17].

Directive for Fresh Inquiry – Court's Powers and Time-bound Inquiry – Appellants permitted to resume disciplinary inquiry from the vitiated stage – Directions issued for a detailed procedure, including evidence submission, respondent's rights, and time frame for completion – Held: Appeal partially allowed, reinstatement ordered for limited inquiry purposes [Paras 24-25].

Decision: The Supreme Court partially allowed the appeal, granting the appellants the right to resume the inquiry from where it was vitiated. The respondent was to be reinstated solely for conducting the inquiry and placed under suspension, with entitlements to subsistence allowance and half salary for a specified period [Paras 23-26].