Civil Procedure – Ex-Parte Decree – Delay in Filing Application – Scope of High Court’s Revisional Jurisdiction – The appellants, as plaintiffs, obtained an ex-parte decree in a suit for specific performance – The respondents filed an application for setting aside the decree along with an application for condoning the delay of 939 days – The Trial Court refused to condone the delay, resulting in automatic dismissal of the application for setting aside the decree – The High Court, in revision, condoned the delay but erroneously set aside the ex-parte decree despite no revision being filed against its dismissal – Held: The High Court had jurisdiction to condone the delay, but it exceeded its revisional jurisdiction in setting aside the ex-parte decree when no challenge was made to the dismissal of the application for setting it aside – The order restoring the suit was set aside, and the Trial Court was directed to reconsider the application for setting aside the decree on its own merits [Paras 11-16].

Condonation of Delay – Limitation Act, 1963 – Sufficient Cause – The High Court condoned the delay on the ground that the respondents were unaware of the ex-parte decree until they received notice in execution proceedings – The Supreme Court upheld this finding, observing that while there was negligence, the property involved was of substantial value, justifying an opportunity for the respondents to contest the suit – However, condoning delay in filing an application does not automatically warrant setting aside the ex-parte decree, which must be decided independently on merits [Paras 12-14].

High Court’s Jurisdiction – Revisional Powers – Error in Directing Suit Restoration – The Supreme Court held that the High Court, while exercising its revisional jurisdiction, could only examine the issue of delay condonation and had no authority to set aside the ex-parte decree without a separate challenge to the dismissal of the relevant application – The principle that condoning delay does not automatically revive a dismissed application was reiterated – The High Court’s direction to restore the suit was set aside [Paras 15-16].

Appeal Partly Allowed – Trial Court to Decide the Application for Setting Aside the Ex-Parte Decree – The Supreme Court upheld the High Court’s order condoning the delay but set aside its order restoring the suit – I.A. No. 1163 of 2021 (application for setting aside the decree) was revived and remanded to the Trial Court for reconsideration on its own merits within two months [Para 16].

Negotiable Instruments Act – Section 138 – Vicarious Liability of Non-Executive Directors – Applicability of Section 141 – The appellants, non-executive directors of the accused company, were prosecuted for dishonour of cheques issued towards repayment of an Inter-Corporate Deposit (ICD) – The cheques were neither signed by the appellants nor were they involved in financial transactions – Held: Mere designation as a director does not create vicarious liability under Section 141 NI Act – There must be specific allegations of active participation in financial affairs – The High Court erred in refusing to quash the proceedings [Paras 16-19].

Criminal Law – Quashing of Proceedings – Section 482 CrPC – Absence of Specific Allegations – The complainant failed to establish the appellants’ direct role in the issuance or dishonour of cheques – The company’s Corporate Governance Reports (CGRs) and Registrar of Companies (ROC) records confirmed their non-executive status – Held: In the absence of specific allegations linking the accused to the transaction, prosecution is not maintainable – Proceedings quashed [Paras 17-20].

Director’s Liability – Legal Precedents on Non-Executive Directors – The Supreme Court relied on multiple decisions, reaffirming that non-executive directors cannot be prosecuted under Section 141 NI Act unless they were in charge of and responsible for the company’s business at the relevant time – The following principles were reiterated:

• Mere holding of a director’s position does not automatically attract liability.

• Vicarious liability must be specifically pleaded and proved.

• Managing directors or signatories to cheques may be presumed liable, but non-executive directors require explicit evidence.

• The complaint must demonstrate how and in what manner the accused was responsible for the company’s financial decisions.

• Attending board meetings does not imply control over financial transactions [Paras 16-18].

Decision : Appeal Allowed – Criminal Proceedings Quashed – The Supreme Court found no material evidence linking the appellants to the dishonoured cheques – The criminal proceedings before the Additional Chief Metropolitan Magistrate, New Delhi, were quashed – Appeals allowed [Paras 20-21].

Consumer Law – NCDRC Penalties – Scope of Interim Moratorium under IBC – The appellant, a real estate developer, failed to deliver possession of residential units to homebuyers, leading to multiple penalties by the NCDRC – The appellant, facing insolvency proceedings under Section 95 of the IBC, claimed that the execution of penalties should be stayed due to the interim moratorium under Section 96 – Held: The moratorium under IBC applies only to debt recovery proceedings and not to regulatory penalties imposed for consumer protection – Penalties under Section 27 of the Consumer Protection Act are not "debt" under IBC and remain enforceable despite the moratorium [Paras 27-31].

Moratorium under IBC – Distinction Between Civil and Regulatory Penalties – The IBC provides relief against debt-related claims, but penalties imposed by consumer fora serve a punitive and regulatory purpose – Held: Unlike corporate insolvency under Section 14 of the IBC, which stays all proceedings, the interim moratorium under Section 96 is limited to "debt" – The penalties under the CP Act do not fall within the scope of the moratorium and remain enforceable [Paras 28-35].

Regulatory Compliance – Public Interest in Consumer Protection – Impact of Stay on Penalties – The NCDRC penalties were imposed to deter unfair trade practices and protect homebuyers, who had suffered delays in possession – Held: Allowing a stay of consumer protection penalties would create an unfair advantage for defaulting developers and undermine consumer rights – Courts cannot permit businesses to misuse insolvency laws to evade statutory liabilities [Paras 36-37].

Distinction Between Section 138 NI Act and Section 27 CP Act – Applicability of Moratorium – The appellant relied on P. Mohanraj v. Shah Brothers Ispat Pvt. Ltd., (2021) 6 SCC 258, where the Court held that a moratorium under Section 14 of the IBC extends to criminal proceedings under Section 138 of the Negotiable Instruments Act, 1881 – Held: Proceedings under Section 27 of the Consumer Protection Act are remedial, not criminal, and do not automatically assume the existence of a debt – The analogy with cheque dishonour cases is misconceived and legally untenable [Paras 36-38].

Appeal Dismissed – NCDRC Penalties to be Paid Within Eight Weeks – The Supreme Court dismissed the appeal, holding that consumer protection penalties are not subject to the interim moratorium under the IBC – The appellant was directed to comply with the NCDRC penalties within eight weeks [Paras 40-41].

Negotiable Instruments Act – Section 138 – Dishonour of Cheques – Legally Enforceable Debt – Lease Agreement – The appellant issued four post-dated cheques amounting to ₹9,00,000/- as security deposit refund under a lease agreement – Upon dishonour, the respondent filed criminal complaints – The Trial Court convicted the appellant but awarded only ₹3,00,000/- as compensation – The appellate Court and the High Court upheld the conviction and enhanced the compensation to ₹9,00,000/- – Held: A security cheque cannot be treated as a legally enforceable debt if the underlying contractual obligation remains unfulfilled – The respondent retained possession of the rented premises for five years without paying rent, which justified deductions from the security deposit – Conviction upheld, but compensation reduced to ₹3,00,000/- as awarded by the Trial Court [Paras 16-22].

Criminal Law – Revisional Powers of High Court – Enhancement of Compensation – Whether Justified – The High Court enhanced the compensation from ₹3,00,000/- to ₹9,00,000/- without considering the appellant’s counterclaims regarding unpaid rent – Held: Compensation enhancement must be based on established liability – The High Court erred in ignoring the findings of the Trial Court regarding deductions from the security deposit – The appellate Court and High Court orders were set aside, and the Trial Court’s judgment was restored [Paras 23-26].

Landlord-Tenant Dispute – Security Deposit Refund – Impact on Cheque Dishonour Cases – The appellant had filed a separate eviction suit against the respondent, which was decreed in his favour – The respondent was evicted through execution proceedings – Held: The respondent’s continued possession without rent payment affected the refund obligation – The appellant was entitled to adjust dues before refunding the deposit – The prosecution under Section 138 of the NI Act could not override contractual claims under tenancy laws [Paras 17-21].

Appeal Partly Allowed – Conviction Maintained – Compensation Restored to ₹3,00,000/- – The Supreme Court upheld the conviction under Section 138 of the NI Act but restored the Trial Court’s compensation order of ₹3,00,000/- – Excess amount deposited pursuant to the High Court’s order to be reimbursed to the appellant – Compliance to be ensured within two months [Paras 26-27].

Decision: The appeal was partly allowed. The appellant’s conviction under Section 138 of the NI Act was upheld, but the enhancement of compensation to ₹9,00,000/- was set aside. The Trial Court’s order awarding ₹3,00,000/- as compensation was restored. Any excess amount deposited shall be reimbursed to the appellant. The Trial Court was directed to ensure compliance within two months.

Writ - Habeas Corpus - Guardianship – Intellectual Disability – Legality of High Court Decision – Parens Patriae Doctrine Applied – The appellant, Aadith Ramadorai’s mother, challenged the High Court’s decision dismissing her habeas corpus petition seeking custody – The High Court held that Aadith, being a major, was voluntarily residing with his father and paternal grandparents in India – Supreme Court held that in cases involving persons with cognitive disabilities, their capacity to make informed decisions must be assessed through expert medical evaluation – The medical reports from NIMHANS, Bengaluru, and the Evaluation Committee in the U.S. confirmed that Aadith functioned at the cognitive level of an 8 to 10-year-old child – Held: Aadith lacked the capacity to make independent decisions regarding long-term residence, and the High Court erred in disregarding expert medical opinions [Paras 7-22].

Best Interests of the Individual – Role of the Courts in Custody Matters – Repatriation Ordered – Supreme Court reaffirmed that in cases involving persons with disabilities, courts must prioritize their well-being over parental conflicts – The Court noted that Aadith had spent his entire life in the U.S. and was receiving specialized education and social security benefits – His medical needs and skill development programs were interrupted by his unexpected travel to India – Held: Aadith’s best interests lay in his return to the U.S. to resume his education, medical care, and structured support system – Repatriation directed under the Court’s parens patriae jurisdiction [Paras 24-34].

Foreign Court Orders – Comity of Courts – Recognition of U.S. Guardianship Order – The Idaho Court had already appointed the appellant as Aadith’s full and permanent guardian after considering medical evidence – Supreme Court held that while comity of courts is not absolute, foreign custody orders must be given due weight when they align with the best interests of the individual – Held: The Idaho Court’s guardianship order was consistent with Aadith’s welfare and deserved recognition in India [Paras 30-31].

Contempt of Court – Non-Compliance with Interim Orders – Strict Directions Issued – The appellant filed a contempt petition alleging that Aadith’s father, despite court directions, restricted her interaction with Aadith and refused to comply with temporary custody arrangements – Supreme Court took serious note of non-compliance and warned of strict action for future violations – Held: Aadith to be immediately placed in the appellant’s custody, and all necessary travel arrangements to be facilitated by the Indian and U.S. authorities [Paras 3.16, 3.18].

Decision: Appeal Allowed – High Court Judgment Set Aside – Aadith Ramadorai to be Repatriated to the U.S. under the Custody of His Mother – Immediate Compliance Ordered.

Service Law – Pension Entitlement – Interpretation of Retirement Benefit Schemes – University Employees’ Rights – The appellant was appointed as a Junior Scientist cum Assistant Professor in 1987 and, as per the Rajendra Agricultural University Statutes, 1976, was required to opt for the Contributory Provident Fund (CPF) scheme if he did not wish to be covered under the General Provident Fund-cum-pension-cum-gratuity scheme – The appellant never opted for CPF – Held: Under Chapter 16 of the University Statutes, non-exercise of the CPF option automatically entitled the appellant to the General Provident Fund-cum-pension-cum-gratuity scheme – High Court’s dismissal of the appellant’s claim was erroneous [Paras 9-12].

Office Order Implementation – Automatic Inclusion in Pension Scheme Upon Non-Exercise of CPF Option – The University’s Office Order dated 21.02.2008 clearly stipulated that employees who did not opt for CPF within one month would automatically be included in the pension scheme – The appellant did not exercise the option, yet the University failed to include him in the pension scheme – Held: The University's failure to include the appellant in the pension scheme violated its own statutory provisions [Paras 6-7].

Precedents from the High Court – Similarly Placed Employees Granted Pension – The Patna High Court had previously ruled in multiple cases, including Arjun Kumar v. State of Bihar & Ors. (CWJC 2041/2012), that non-exercise of the CPF option must result in automatic entitlement to pension – The Supreme Court held that the High Court’s refusal to grant the appellant similar relief was arbitrary and contrary to established precedent [Paras 11-12].

Appeal Allowed – Direction for Pension Grant Within Four Months – The Supreme Court directed that the appellant be granted retiral benefits under the General Provident Fund-cum-pension-cum-gratuity scheme, with necessary adjustments for any CPF benefits received – Computation and disbursement were ordered within four months [Para 13].
 

Criminal Law – Murder of Wife – Appeal against conviction - Dying Declaration – Reliability and Contradictions – Conviction Set Aside – The deceased initially stated to a doctor (PW-13) and police constable (PW-9) that she caught fire accidentally while cooking – Subsequently, in a statement recorded by the Judicial Magistrate (PW-12), she alleged that the appellant set her on fire after a dispute – The Trial Court and High Court convicted the appellant solely based on the dying declaration – Supreme Court held that in cases of multiple and inconsistent dying declarations, the court must scrutinize corroborative evidence – No other evidence supported the allegation against the appellant – Held: The conviction was unsafe, and the appellant was acquitted, granting him the benefit of the doubt [Paras 12-14].

Corroborative Evidence – Lack of Independent Witnesses – Mahazar Report’s Credibility in Question – The prosecution relied on the Observation Mahazar, stating that a kerosene can and matchstick were recovered from the scene – However, the witnesses to the seizure (PW-5 and PW-6) turned hostile – The doctor (PW-13) who attended the deceased immediately after the incident confirmed that there was no smell of kerosene on her body – Held: In the absence of corroborative evidence, the dying declaration alone could not be relied upon to convict the appellant [Paras 15-16].

Motive and Family Dispute – Prior Criminal Case Between Families Considered – The appellant's defense contended that a prior criminal case filed by his brother against the deceased’s father (PW-2) and brother in 2006 could have led to tutoring of the deceased to implicate him falsely – The Supreme Court acknowledged the possibility of influence but did not base its decision solely on this factor – Held: The possibility of false implication could not be ruled out, further weakening the prosecution case [Para 17].

Decision: Acquittal – Benefit of Doubt – Failure of Prosecution to Establish Guilt Beyond Reasonable Doubt – Supreme Court emphasized that in criminal trials, conviction must be based on conclusive proof – Since the dying declaration was inconsistent and uncorroborated, it could not be the sole basis for conviction – Held: The appellant was acquitted, and the High Court’s conviction order was set aside [Paras 14, 18].

Criminal Law – Conviction for Grievous Hurt – High Court’s Conviction under Section 326 IPC Modified to Section 325 IPC - The appellants were convicted under Section 307 IPC by the Sessions Court—High Court altered the conviction to Section 326 IPC but retained imprisonment—Supreme Court found doubt regarding whether the weapons used (bamboo sticks and wooden logs) were "dangerous weapons" under Section 326 IPC—Held: The evidence warranted conviction under Section 325 IPC (grievous hurt) instead—Decision: Conviction modified from Section 326 IPC to Section 325 IPC [Paras 7-11].

Sentencing – Reduction of Punishment – Period Already Undergone Considered Sufficient - The incident occurred in 1994—Appellants had already spent six months in custody and had no other criminal record—Held: Sentencing them to further imprisonment after decades would not serve justice—Decision: Sentence reduced to period already undergone, with fine imposed [Paras 12-13].

Penalty for Default – Additional Imprisonment in Case of Non-Payment of Fine - Supreme Court directed the appellants to deposit the fine within one month—Held: Failure to pay would result in an additional imprisonment of one year minus the period already served [Para 14].

Matrimonial Law - Divorce – Amicable Settlement – Invocation of Article 142 of the Constitution – Decree of Divorce by Mutual Consent - The Family Court granted divorce to the respondent-husband on the ground of cruelty—The High Court upheld the decree—During the appeal before the Supreme Court, the parties opted for mediation and reached a Final Settlement Agreement—Held: Since the parties had been living separately since 2013 and had resolved their disputes amicably, the Supreme Court invoked Article 142 to dissolve the marriage by mutual consent—Decision: Divorce granted under Section 13B of the Hindu Marriage Act; previous findings on cruelty set aside [Paras 9-14].

Child Custody and Maintenance – ₹2.11 Crores Settlement for Minor Child – Visitation Rights Granted - The parties agreed on financial terms for the minor child's maintenance—The respondent-husband paid ₹2.11 crores to the appellant-wife—Visitation rights were established, allowing the father periodic access to the child, including overnight visits—Held: The agreed settlement for maintenance and visitation was binding on both parties—Decision: Settlement upheld; visitation rights enforced as per agreement [Paras 10-18].

Quashing of Criminal and Civil Cases – Parties Barred from Future Litigation – No Further Claims - As part of the settlement, both parties agreed to withdraw all pending cases, including FIRs and domestic violence proceedings—Held: All pending litigation, including FIR No. 364/2022 under Section 498A IPC, were quashed—Decision: No future claims shall be entertained; all legal disputes between the parties stand resolved [Paras 15-18].