Custodial Torture – Illegal Detention – Registration of FIR Directed – Investigation Transferred to CBI – Counter FIR Quashed – ₹50 Lakhs Compensation Awarded – In a case involving shocking custodial torture of a serving police constable, including mutilation of genitalia during illegal detention, the Supreme Court reversed the High Court’s judgment refusing to register FIR or transfer investigation – Held: In view of grave injuries, fabricated counter FIR, and institutional bias, FIR to be mandatorily registered, investigation transferred to CBI, malicious counter FIR quashed, and interim compensation of ₹50,00,000 awarded to the victim for violation of fundamental rights under Article 21 of the Constitution [Paras 1-38].

Mandatory FIR Registration – Lalita Kumari Principle – Refusal to Register FIR Invalid – The Court held that once cognizable offences such as grievous custodial torture are disclosed, FIR registration is mandatory and cannot be circumvented by ordering a preliminary inquiry – Held: High Court erred in directing inquiry by interested police officers; direction issued for immediate registration of FIR and independent investigation [Paras 10-14].

Independent Investigation – Conflict of Interest – CBI Investigation Ordered – Local police involved in the offence cannot be entrusted with investigation – Held: In cases of custodial torture implicating local police, transfer to CBI is required to ensure independence, credibility, and fair inquiry under Article 21 [Paras 15-23].

Quashing of Counter FIR – Abuse of Process – Counter FIR Quashed – FIR registered against the victim under Section 309 IPC held to be malicious and part of an institutional cover-up – Held: Counter FIR lacked credibility and was quashed under Bhajan Lal principles as an abuse of criminal justice process [Paras 28-33].

Compensation for Violation of Fundamental Rights – Interim Compensation Granted – Considering egregious violation of Article 21, gross custodial torture, and systemic apathy, Supreme Court granted ₹50 lakhs interim compensation to the appellant – Held: Compensation recoverable from erring officials post CBI probe, without prejudice to further civil remedies [Paras 34-37].

Constitutional Mandate – Custodial Violence Cases Demand Highest Judicial Vigilance – Supreme Court reiterated principles from Lalita Kumari, D.K. Basu, Nilabati Behera and others, emphasising duty to uphold human dignity and prevent misuse of state power – Held: Extraordinary jurisdiction under Articles 136 and 142 invoked to protect rule of law and constitutional rights [Paras 10-14, 24-27, 38].

Final Decision – Appeal Allowed – High Court’s Judgment Set Aside – FIR Directed, CBI Probe Ordered, Counter FIR Quashed, Compensation Granted – Supreme Court allowed the appeal, directed CBI to register FIR and conduct investigation, quashed counter FIR under Section 309 IPC, awarded ₹50 lakh interim compensation, and upheld appellant’s right to further legal remedies [Para 38].

Criminal Law - Bail Cancellation – Abuse of Official Position – Sections 376, 328 IPC and Sections 3/4 IT Act, SC/ST Act – Bail Cancelled - The Supreme Court considered an appeal filed by the victim against the grant of bail to respondent No.2, who was accused of serious offences including sexual exploitation and torture of female inmates under her care as Superintendent of a women’s protection home – The High Court had granted bail through a cryptic order without hearing the victim in violation of Section 15A(3) of the SC/ST Act – Held: The Supreme Court cancelled the bail on grounds of non-compliance with statutory rights of the victim and the gravity of allegations, noting the accused’s influence and possibility of witness tampering [Paras 8-29].

Victim's Right to be Heard – Section 15A(3) SC/ST Act – Violation of Victim's Rights – The High Court granted bail without issuing notice to the victim, violating her statutory right to be heard – Held: The Supreme Court quashed the High Court's bail order solely on this ground, emphasizing that non-compliance with Section 15A(3) invalidates bail orders [Paras 8, 25-26].

Grave Nature of Allegations – Custodian Turned Perpetrator – Sections 376, 328 IPC – Bail Cancelled Due to Serious Offences – Allegations involved sexual exploitation of helpless women by the very person entrusted with their protection – Held: Such breach of trust and abuse of official authority warranted cancellation of bail to prevent miscarriage of justice [Paras 20-22].

Societal Impact and Threat to Trial – Influence on Witnesses – Bail Revoked to Safeguard Fair Trial – The Court found a high possibility of the accused influencing witnesses, given her reinstatement in service and access to similar institutions – Held: Bail cancelled to prevent undermining public faith in judicial process and ensure fair trial [Paras 14, 22, 27].

Guiding Principles on Bail Cancellation – Reliance on Precedents – Application of Ajwar v. Waseem and Shabeen Ahmad v. State of UP – The Court reiterated parameters for bail cancellation including gravity of offence, impact on society, and risk to fair trial – Held: Unreasoned bail orders in grievous crimes merit judicial correction [Paras 23-24].

Final Decision – Appeal Allowed – Bail Cancelled – The Supreme Court quashed the High Court order dated 18/01/2024, cancelled the bail of respondent No.2, directed her surrender, and issued safeguards for victims – Held: Appellant's appeal allowed, bail of respondent No.2 stands cancelled [Paras 28-30].

Criminal Law - Anticipatory Bail – Cancellation of Pre-Arrest Bail – Sections 143, 147, 149, 323, 387, 427, 452, 504, 506, 406, 403, 420, 467, 468, 471, 120B, 34 of the IPC -Grave Offences of Property Trespass and Threatening Complainant – Anticipatory Bail Cancelled – The appeals arose from the grant of anticipatory bail to the accused, including the estranged husband of the complainant, in a case of criminal trespass, assault, and damage to property inherited by the complainant from her father – The Supreme Court found that the High Court erred in granting anticipatory bail despite serious allegations of forcible dispossession, concealment of facts, threats to witnesses, and multiple ongoing criminal proceedings against the accused – Held: Considering the gravity of allegations, concealment of facts, violation of bail conditions, and risk of tampering with evidence, the High Court’s order was quashed, anticipatory bail cancelled, and accused directed to surrender with liberty to apply for regular bail [Paras 1-22].

Concealment of Material Facts – Suppression of Crucial Developments – Bail Order Invalidated – The accused misled courts by concealing the setting aside of a civil injunction which was used to justify interim protection from arrest – Held: Deliberate suppression of material developments is sufficient ground to invalidate bail orders [Paras 9, 19].

Violation of Bail Conditions – Threatening of Witnesses and Tampering with Evidence – Bail Cancelled – The accused violated bail conditions by threatening hotel staff and attempting to intimidate witnesses, which amounted to interference with the process of justice – Held: Serious post-bail conduct justified immediate cancellation of bail [Paras 12, 20].

Grave Allegations Require Custodial Interrogation – Accusations of Forgery, Trespass, and Fraudulent Loan Transactions – Bail Denied – The accused faced allegations of property trespass, criminal intimidation, forgery of documents, and misuse of power of attorney for fraudulent financial transactions – Held: Such serious accusations necessitated custodial interrogation, and grant of anticipatory bail was unjustified [Paras 17-20].

Exceptional Remedy of Anticipatory Bail – Cautious Judicial Approach Mandated – Reliance on Srikant Upadhyay v. State of Bihar – The Court reiterated the principle that anticipatory bail is an exceptional remedy to be granted cautiously in serious offences, especially where there is risk of justice being obstructed – Held: The High Court overlooked the established cautionary standards while granting anticipatory bail [Paras 18-19].

Decision – Appeal Allowed – Anticipatory Bail Cancelled – High Court’s Order Set Aside – The Supreme Court allowed the appeals, quashed the High Court order dated 19/06/2024, cancelled anticipatory bail, and directed the accused to surrender within two weeks, permitting them to apply for regular bail as per law [Paras 21-22].

Judicial Service Law - Strictures Against Judicial Officer – Principles of Natural Justice – Unwarranted Strictures Expunged – Appeal Allowed – The appellant, a Judicial Officer in Rajasthan, challenged the adverse remarks made by the High Court against him while granting bail to an accused without considering criminal antecedents – The Supreme Court held that the High Court erred in passing personal strictures without giving the Judicial Officer an opportunity to explain – The Court reiterated that any perceived misconduct should be addressed on the administrative side by the Chief Justice and not through judicial orders – The Supreme Court found that the strictures were based on an overruled judgment and therefore unsustainable – Held: Adverse observations were uncalled for, contrary to principles of natural justice, and stood expunged – Appeal allowed and directions issued to all High Courts to consider rules mandating disclosure of criminal antecedents in bail applications [Paras 1-26].

Judicial Restraint – Adverse Remarks in Judicial Orders – Conduct of Judges – High Courts must avoid making personal criticism against subordinate Judicial Officers in judicial orders and must adopt the administrative route to address concerns – Such approach safeguards the dignity of judges, prevents demoralisation, and ensures adherence to constitutional protections for judicial officers – Held: Personal remarks against the appellant were contrary to established norms and set aside [Paras 15-19].

Reliance on Reversed Judgments – Effect on Judicial Findings – The Supreme Court held that the High Court’s reliance on the judgment in Jugal v. State of Rajasthan, which was reversed in Ayub Khan v. State of Rajasthan, rendered the basis of the strictures erroneous – Held: Orders founded on reversed precedents are unsustainable – Strictures expunged [Para 20].

Policy Direction – Criminal Antecedent Disclosure in Bail Matters – Directions for Systemic Reform – The Court directed Registrar Generals of all High Courts to consider incorporating a rule mandating disclosure of involvement in other criminal cases while applying for bail, similar to Rule 5 of Punjab and Haryana High Court Rules, to ensure full transparency in bail proceedings [Paras 22-24].

Final Decision – Appeal Allowed – Strictures Expunged – The Supreme Court allowed the appeal, expunged the strictures passed against the appellant, and directed circulation of this order for administrative action and possible procedural reforms in bail applications across all High Courts [Paras 25-26].

Criminal Law - Quashing of FIR – Abuse of Criminal Process – Civil Dispute Given Criminal Colour – FIR Quashed – The appellants challenged the High Court’s order dismissing their petition under Section 482 CrPC seeking quashing of FIR No. 771/2020 involving alleged cheating and criminal breach of trust in a land sale transaction – The Supreme Court held that the FIR was registered on false and exaggerated allegations over a failed property transaction where civil remedies had already been invoked – Held: The dispute was purely civil, and the criminal proceedings were instituted to harass the appellants; FIR and all consequential proceedings quashed [Paras 3-14, 18].

High Court’s Perfunctory Order – Failure to Consider Merits – Remedied by Supreme Court – The High Court had dismissed the quashing petition without examining the merits – Held: The High Court acted mechanically and failed to exercise jurisdiction judiciously – The Supreme Court exercised powers under Article 136 to avoid remand and deliver substantial justice [Paras 4-5, 16-17].

Inconsistent Pleadings – Contradictions Between FIR and Civil Suit – Allegations Fabricated – The complainant alleged oral agreement for Rs. 5 crore in the FIR and Rs. 5.75 crore in the civil suit, along with contradictory claims about other properties – Held: Such contradictory pleadings reinforced the conclusion of malicious prosecution without criminal intent on part of the appellants [Paras 11-12].

Protection of Vulnerable Litigants – Safeguards Against Harassment – Direction for Police Protection – Considering harassment faced by the 70-year-old widow and her daughter, the Court directed Telangana Police to provide security to appellants when visiting Hyderabad in relation to property management [Para 20].

Exemplary Costs Imposed – Misuse of Legal System – Complainant Penalised – Held: Complainant abused criminal process to exert pressure and extort settlement in a civil dispute – Exemplary cost of Rs. 10,00,000/- imposed on complainant, payable to appellants [Paras 21-22].

Decision – Appeal Allowed – Criminal Proceedings Quashed – Costs Imposed – The Supreme Court allowed the appeal, quashed the FIR and criminal case, awarded costs of Rs. 10,00,000/- to appellants, and directed police protection during visits to Telangana [Paras 23-24].

Arbitration Law – Existence of Arbitration Agreement – Clause with Directory Language – Appeal Dismissed – The appellant invoked Section 11 of the Arbitration and Conciliation Act, 1996 seeking appointment of arbitrator based on Clause 13 of the contract, which used the expression “may be sought through arbitration” – The Supreme Court held that mere inclusion of an enabling provision does not amount to a binding arbitration agreement – The Court found no consensus ad idem to refer disputes to arbitration, affirming the High Court's rejection of appointment of arbitrator – Held: Absence of binding arbitration clause precludes reference to arbitration under Section 11 [Paras 1-34].

Judicial Examination – Referral Court’s Role Under Section 11 – Prima Facie Satisfaction Required – Court Clarified – The Court reiterated principles laid down by the seven-Judge Bench in Interplay Between Arbitration Agreements, (2024) 6 SCC 1, holding that under Section 11, the Court must conduct a prima facie examination of the existence of arbitration agreement but cannot compel arbitration in absence of such agreement – Held: Referral Court’s limited examination is essential to prevent frivolous arbitration claims [Paras 14-19].

Interpretation of Contractual Clause – Directory vs Mandatory Language – Non-Existence of Binding Clause – The Supreme Court held that use of directory language like “may be sought” indicates lack of obligation to arbitrate and absence of present commitment to resolve disputes by arbitration – Held: Clause 13 lacked necessary elements of arbitration agreement under Section 7, particularly the binding nature of dispute resolution method [Paras 20-32].

Non-Applicability of Doctrine of Competence-Competence – No Need to Refer Matter to Arbitral Tribunal – The Court rejected the contention that the issue should have been left to the arbitral tribunal under the doctrine of competence-competence – Held: Where prima facie no arbitration agreement exists, the matter should not be referred to arbitration at all [Paras 16-19].

Decision – Appeal Dismissed – No Arbitration Agreement Found – The Supreme Court dismissed the appeal, upheld the High Court’s order refusing to appoint arbitrator, clarified the distinction between enabling dispute resolution clauses and binding arbitration agreements, and directed no costs [Paras 34-36].

Civil Law - Abatement of Appeal – Non-Substitution of Legal Representatives – Total Abatement of Second Appeal – Appeal Dismissed – The appellants challenged the orders of the High Court that dismissed their applications seeking condonation of delay and substitution of legal representatives of deceased co-appellant Ram Babu – The Supreme Court found that no sufficient cause was shown for the inordinate delay, especially since surviving appellants were close family members and aware of Ram Babu’s death – Held: The High Court was justified in dismissing the applications, and the Supreme Court found no reason to interfere with the finding of abatement [Paras 1-10, 38(a)].

Joint and Indivisible Decree – Whole Appeal Abated – The Court reiterated that where the decree under challenge is joint and indivisible, the failure to substitute legal representatives of one deceased co-appellant leads to total abatement of the appeal to prevent the risk of inconsistent decrees – Held: Since both defendants jointly claimed ownership of the suit property, the decree was indivisible and hence the entire second appeal stood abated [Paras 11-17, 33-37, 38(b)].

Order XLI Rule 4 CPC – Not Applicable to Joint Appeals – Appeal Could Not Continue – The Court clarified that Order XLI Rule 4 CPC applies when one of multiple parties appeals a decree based on common grounds, but it does not apply where the appeal is jointly filed and abates due to non-substitution – Held: After the death of co-appellant Ram Babu, the surviving appellants could not continue the appeal, and the appeal was rightly held to have abated [Paras 26-31, 38(c)].

Conflict of Decrees – Prevention of Inconsistent Decisions – Complete Abatement Necessary – The Supreme Court emphasized the fundamental principle against conflicting decrees in the same matter – Held: Allowing the appeal to proceed would result in conflicting outcomes, as the decree had already become final against Ram Babu, making continuation impermissible [Paras 33-37].

Decision – Appeal Dismissed – Total Abatement Affirmed – The Supreme Court dismissed the appeals, upheld the High Court’s decision, and held that the appeal had abated in entirety due to non-substitution, disallowing any relief under Order XLI Rule 4 CPC – No costs awarded [Paras 38-39].

Bail Application – Delay in Disposal – Personal Liberty – Supreme Court Displeasure – Petition for bail pending in Punjab & Haryana High Court since August 2023 adjourned over a dozen times, mainly at the instance of complainant or State – By impugned order, matter adjourned again after recusal by Judge – SC reiterated that courts must be sensitive in matters of personal liberty and avoid granting frivolous adjournments – Notice issued to ensure early hearing – Copy of order directed to be placed before Chief Justice of High Court Judicial Sensitivity – Expeditious Hearing in Liberty Matters – SC emphasized that prolonged adjournments in bail matters undermine personal liberty – Directions issued to place matter before Hon’ble Chief Justice of Punjab & Haryana High Court for appropriate listing

Civil Law - MSMED Act – Limitation Act Applicability – Conciliation and Arbitration Proceedings – Section 18 MSMED Act – Partial Applicability of Limitation Law – Supreme Court held Limitation Act applies to arbitration under Section 18(3) MSMED Act, preventing recovery of time-barred claims through arbitration – However, Limitation Act does not apply to conciliation under Section 18(2) MSMED Act – Time-barred claims can be settled through conciliation based on party agreement and Section 25(3) of Contract Act – High Court decision set aside partially to this extent [Paras 1-54].

Arbitration Proceedings – Section 18(3) MSMED Act – Section 43 ACA Applicable – Non-Applicability of Section 2(4) ACA – Supreme Court affirmed applicability of Section 43 ACA to arbitration under MSMED Act owing to special deeming provision in Section 18(3) and overriding effect under Section 24 MSMED Act – Time-barred claims held non-maintainable in arbitration proceedings [Paras 35-43].

Conciliation Proceedings – Section 18(2) MSMED Act – Time-Barred Claims Allowed – Conciliation proceedings held non-adjudicatory and voluntary in nature – Time-barred claims can be pursued for amicable settlement under conciliation proceedings despite expiration of limitation period – Settlement agreements under conciliation valid and enforceable under Section 25(3) Contract Act [Paras 25-34].

Acknowledgment of Debt – Section 22 MSMED Act – Balance Sheet Entries – Disclosure of unpaid amounts in buyer’s financial statements does not automatically amount to acknowledgment under Section 18 Limitation Act – Whether an entry amounts to acknowledgment depends on factual context and legal compliance with Section 18 Limitation Act [Paras 49-50].

Decision – Appeals Partly Allowed – Supreme Court upheld High Court’s decision on applicability of Limitation Act to arbitration proceedings – Reversed High Court’s holding on conciliation, allowing settlement of time-barred claims through conciliation – Supreme Court clarified that suppliers can seek recovery through conciliation even after expiry of limitation but arbitration remains bound by limitation period – Appeals partly allowed [Paras 51-52].