Criminal Law – Quashing of Criminal Proceedings – Settlement Between Parties – FIR registered against appellants for offenses under Sections 409, 420, 120B IPC, and Section 13(2) r/w Section 13(1)(d) of the Prevention of Corruption Act, 1988 – Alleged fraud, cheating, and diversion of loan funds causing public exchequer losses – Settlement and closure of DRT proceedings relied upon by appellants – Held: Settlement does not absolve criminal liability in offenses involving public interest and economic crimes – High Court rightly refused to quash proceedings under Section 482 CrPC [Paras 12-15, 18].

Economic Offenses – Distinctive Nature – Wider Ramifications – Appellants sought quashing of criminal proceedings, citing consent terms and settlement with the bank – Held: Economic offenses involving financial misconduct or fraud impact societal and financial health – Cannot be viewed as private disputes – Public interest outweighs private settlement – No justification for quashing proceedings under PC Act or IPC [Paras 16-18].

Delay in Lodging FIR – Impact on Criminal Proceedings – Appellants argued delay in FIR registration affected merits of the case – Held: Mere delay in lodging FIR does not dilute seriousness of allegations, especially in economic offenses or corruption cases – FIR delay not a ground for quashing proceedings [Paras 9, 18].

Conclusion – Appeals Dismissed – High Court justified in refusing to quash FIR and chargesheet under Section 482 CrPC – Continuation of criminal proceedings in public interest upheld [Paras 19-20].

Family Law – Visitation Rights – Welfare of Minor Child – Appeal against High Court’s order directing mother to facilitate visitation between father and minor child at a location 150 km from her residence – High Court observed that the father, as the natural guardian, is entitled to visitation rights but dismissed the appellant-mother’s objections regarding the difficulty of travel and safety concerns – Supreme Court modified the visitation arrangement, emphasizing the paramount importance of the child’s welfare – Held: Visitation should occur at a location near the child’s residence to avoid undue travel and ensure the child’s health and well-being [Paras 6-7, 12, 16-17].

Parental Rights – Custody and Visitation – Matrimonial Disputes – Supreme Court acknowledged the respondent-father’s right to visit and maintain a relationship with the child, despite the matrimonial discord between the parents – Allegations of domestic violence and threats to life raised by the appellant-mother require examination during trial and cannot solely determine interim visitation rights – Held: While both parents’ rights are to be considered, the child’s interests take precedence, requiring a balanced and empathetic approach [Paras 13-14].

Child Welfare – Venue for Visitation – Best Interest Standard – The Court found that the lower courts’ orders directing visitation at a distant location lacked justification and failed to prioritize the child’s welfare – Held: Interim visitation must align with the child’s age, health, and well-being, ensuring minimal disruption – Visitation was directed to occur at a location in Madurai, near the appellant-mother’s residence, with safeguards to ensure the child’s comfort and security [Paras 15-17].

Modified Directions by Supreme Court –

• Respondent-father allowed visitation rights every Sunday from 10:00 AM to 02:00 PM at a public park or temple in Madurai.

• Appellant-mother required to be present during visitation, maintaining a distance of approximately 10 feet for the child’s comfort.

• Child to be handed over to the respondent at 10:00 AM and returned to the appellant by 02:00 PM at the same location.

Decision – Appeal Partly Allowed – Modification of High Court Order – The Supreme Court allowed the appeal to the extent of modifying the visitation venue, aligning the arrangement with the best interest of the child – High Court’s judgment was upheld in principle but revised for practical execution to prioritize the child’s welfare [Paras 18-19].

Transfer of Property Act – Protection Under Section 53-A – Prerequisites Unmet – The defendants sought protection under Section 53-A of the Transfer of Property Act based on an unregistered sale agreement and possession – Held: Protection under Section 53-A is available only when the transferee fulfills all conditions, including written contract, part performance, and readiness to perform contractual obligations – Defendants failed to prove execution of the sale agreement or part performance, making the claim untenable [Paras 10-14].

Specific Relief Act – Readiness and Willingness to Perform Contractual Obligations – Mandatory Compliance – Defendants did not establish compliance with Section 16 of the Specific Relief Act, which requires proof of readiness and willingness to perform contractual obligations – Their claim for part performance was thus unsustainable [Paras 10-13].

Judicial Review – No Substantial Question of Law – The High Court rightly dismissed the second appeal for lack of a substantial question of law, affirming concurrent findings of the Trial and First Appellate Courts [Paras 8-9].

Decision: The Special Leave Petition was dismissed. The dismissal by the High Court of the claim under Section 53-A of the Transfer of Property Act was upheld.

Criminal Procedure – Anticipatory Bail – Factors to Consider – High Court granted anticipatory bail to respondents accused under Sections 302, 341, 323, 307, 504, and 34 of IPC – Appellant challenged the order, citing specific allegations in FIR and chargesheet indicating respondents’ involvement in setting the deceased ablaze with intent to kill – Supreme Court held: High Court failed to consider the nature and gravity of the offence, role of the accused, and materials on record – Anticipatory bail granted in a cryptic and mechanical manner without application of judicial mind – Impugned order set aside [Paras 6, 12-14].

Criminal Law – Murder – Anticipatory Bail Rejected – Respondents accused of pouring kerosene oil on the deceased and setting him on fire, resulting in death – Investigation found allegations true, with chargesheet naming all accused – Supreme Court held: Such heinous crimes necessitate careful judicial scrutiny before granting anticipatory bail – High Court’s order quashed, and respondents directed to surrender – Liberty granted to seek regular bail before Trial Court [Paras 4-7, 13-15].

Judicial Discretion – Grant of Bail – Application of Law – Supreme Court reiterated principles laid down in Sushila Aggarwal v. State (NCT of Delhi) regarding the exercise of discretion in granting anticipatory bail – Nature and gravity of the offence, specific allegations, and evidence must guide judicial decisions – Cryptic or mechanical orders undermine justice delivery [Paras 12-14].

Decision – Appeal Allowed – High Court’s order granting anticipatory bail set aside – Respondents directed to surrender within four weeks – Trial Court to consider applications for regular bail on their merits, uninfluenced by observations in this judgment [Para 15].
 

Civil Law - Limitation Act – Suit for Possession – Applicability of Article 58 vs. Article 65 – Suit originally filed for declaration of title and permanent injunction – Amendment at appellate stage to include recovery of possession – Appellants argued that the suit was barred under Article 58 of the Limitation Act (three years from when the right to sue first accrued) – Held: The relief for possession is governed by Article 65, which allows a 12-year limitation period when possession becomes adverse to the plaintiff – Appellants did not plead or prove adverse possession – Suit not barred by limitation [Paras 10-18, 21, 31-32, 39].

Amendment of Pleadings – Doctrine of Relation Back – Plaintiff amended plaint during first appeal to include recovery of possession – Appellate court allowed the amendment – Held: Amendment of pleadings relates back to the date of the original suit unless directed otherwise – Appellate courts have the same powers as trial courts to allow amendments for effective adjudication – No mala fides or prejudice found in the amendment – Amendment was necessary to resolve the dispute and did not change the nature of the suit [Paras 23-30, 39].

Possession and Title – Adverse Possession Not Proved – Title of plaintiff established by concurrent findings of all courts – Appellants in possession since 1981-82 but failed to plead or prove adverse possession – Mere possession without hostile intent or overt acts does not constitute adverse possession – Plaintiff entitled to possession based on title [Paras 9, 18, 21, 31, 33-38].

Decision – Appeal Dismissed – High Court and First Appellate Court judgments upheld – Plaintiff’s suit for possession, based on title, held to be within the limitation period under Article 65 of the Limitation Act – Appellants directed to hand over possession of the suit property [Paras 31, 39].
 

Restoration of Suit – Delay in Filing – Applicability of Section 5 of the Limitation Act – Restoration Application Allowed - Supreme Court addressed whether a restoration application under Order IX Rule 13 CPC, filed five months after the ex-parte decree, required a separate condonation of delay application under Section 5 of the Limitation Act. It held that the restoration application itself contained sufficient explanation of delay and condonation could be inferred without a separate application – Emphasis on substantive justice over procedural technicalities – Held: Restoration allowed, ex-parte decree set aside, and the case remanded for hearing on merits [Paras 6-13].

Counsel Negligence – Trust in Legal Representation – Order IX Rule 13 CPC – Restoration Upheld - Court reiterated that litigants should not be penalized for the negligence or misconduct of their counsel – Reliance placed on Rafiq v. Munshilal to emphasize that procedural lapses by an advocate should not result in injustice to an innocent party – Held: Restoration upheld as the appellant’s reliance on his counsel was bona fide and any fault lay with the counsel [Paras 9-10].

Fraud and Procedural Injustice – Restoration of Hearing Opportunity – High Court’s View Overruled - Supreme Court criticized the High Court’s hypertechnical approach in dismissing the restoration plea without considering the bona fide efforts and illiteracy of the appellant – Emphasis on the principle that procedural rules should not obstruct access to justice – Held: High Court’s order set aside; Trial Court’s decision to restore the case upheld [Paras 11-13].

Insolvency and Bankruptcy – Financial Creditors – Classification under Section 5(7) and Section 5(8) of IBC – Appellants claimed status as Financial Creditors of Reliance Infratel Limited (RITL) based on Deeds of Hypothecation (DoH) – NCLAT denied the status, holding that DoH did not create a contract of guarantee – Held: Clause 5(iii) of DoH creates a guarantee by Corporate Debtor to discharge liabilities of other Reliance entities in case of default – Appellants qualify as Financial Creditors under Section 5(8)(i) IBC – NCLAT’s judgment set aside, NCLT’s order upheld [Paras 46-68].

Contract Law – Guarantee under Section 126 of Indian Contract Act, 1872 – Contract to discharge liability of third party – Deeds of Hypothecation executed by Corporate Debtor included covenant to pay shortfall after realization of hypothecated assets – Held: Such covenant constitutes a guarantee under Section 126 of the Contract Act – Corporate Debtor becomes liable for defaults of Reliance Communications and Reliance Telecom [Paras 57-59].

IBC – Definition of Financial Debt – Contingent Claims – Default Not a Prerequisite – Financial debt defined under Section 5(8) IBC includes liabilities arising from guarantees – Claim submission under CIRP not contingent on default – Held: Financial Creditors need not demonstrate default to assert claims – Appellants’ claims validly included in CIRP [Paras 61-63].

IBC – Moratorium under Section 14 – Extinguishment of Claims – Scope – Moratorium prohibits recovery actions but does not extinguish creditor claims or liabilities under guarantee – Held: Appellants’ claims remain valid and enforceable despite moratorium – Provisions of Deeds of Hypothecation upheld [Paras 63-66].

Interpretation of Contracts – Title of Document – Relevance – Deeds titled as hypothecation documents interpreted holistically – Held: Title of contract not determinative – Substantive clauses creating guarantee obligations take precedence [Paras 52-53].

Decision – Appellants’ Status as Financial Creditors Upheld – NCLAT order quashed – NCLT order restored – Appeals allowed [Paras 67-68].

Consumer Law - Banking Regulation – Section 21A – Statutory Bar on Judicial Review of Interest Rates – The National Commission’s decision to cap interest rates charged by banks at 30% p.a. interfered with the Reserve Bank of India’s exclusive regulatory jurisdiction – Held: The NCDRC exceeded its powers, violating Section 21A of the Banking Regulation Act, which bars courts from adjudicating interest rates as excessive unless they breach RBI guidelines [Paras 48-54].

Consumer Protection Act – Scope of Unfair Trade Practices – Allegation of unfair trade practices for charging high interest rates on credit card dues was unsupported by evidence – Held: Transparency in terms and conditions, as required under RBI circulars, negated claims of unfairness. Banks’ actions were compliant with RBI's liberalized interest policies [Paras 63-70].

Contracts – Terms of Credit Agreements – Judicial Non-Interference – Terms governing credit card operations, including interest rates, are contractual and cannot be re-written by courts unless arbitrary or illegal – Held: The Commission erred in attempting to impose new contractual terms without authority [Paras 62-66].

Regulatory Oversight – RBI as Sole Arbiter of Financial Prudence – Directives to RBI to impose ceilings on interest rates fall outside the National Commission’s jurisdiction – Held: Regulatory decisions under RBI’s purview are not subject to judicial intervention absent demonstrable illegality or unreasonableness [Paras 55-59, 71].

Decision: The appeals were allowed. The NCDRC judgment capping interest rates and directing remedial measures against banks was set aside.

Civil Procedure Code, 1908 – Order VII Rule 11(d) – Rejection of Plaint – Bar of Limitation – Appellants sought rejection of the plaint in Special Civil Suit No. 133 of 2009 under Order VII Rule 11(d) CPC, contending that the suit was barred by limitation – Respondent No. 1 claimed title to the suit lands through ancestral rights and filed the suit for declaration, possession, and setting aside compromise decrees – Trial Court rejected the application, holding that limitation was a mixed question of fact and law – High Court affirmed, leaving the limitation issue open for trial – Held: Limitation is apparent from the plaint averments – Cause of action alleged by Respondent No. 1 was illusory and fictional – Reliefs sought were hopelessly barred by Articles 58, 59, and 65 of the Limitation Act, 1963 – Plaint liable to be rejected at the threshold under Order VII Rule 11(d) CPC [Paras 12-27].

Limitation Act, 1963 – Articles 58, 59, and 65 – Declaratory Reliefs and Possession Claims – Relief of declaration barred by limitation as the right to sue first accrued upon registration of sale deeds in 1938 and 1952 – Plaint filed in 2009, beyond the prescribed limitation period of three years under Articles 58 and 59 – Possession claims barred under Article 65 as possession of suit properties was adverse to Respondent No. 1 and predecessors for over 12 years – No evidence produced to support claims – Held: All reliefs in the suit are time-barred [Paras 14-23].

Fraud Allegations – Pleadings and Proof – Fraud alleged by Respondent No. 1 against compromise decrees obtained by the defendants – Allegations found to be vague, unsubstantiated, and crafted to overcome limitation bar – Fraud not connected to the character of the documents but only to their contents, rendering the transactions voidable and not void – Held: Fraud plea unsustainable, and limitation period under Article 59 applies [Paras 19-20, 25].

Specific Relief Act, 1963 – Section 31 – Cancellation of Instruments – Relief of cancellation not sought despite adverse registered documents – Registered sale deeds deemed valid until proved otherwise – Plaintiff’s failure to challenge the documents within the limitation period fatal to the claim – Held: Relief of cancellation not maintainable [Paras 19-20, 23].

Civil Procedure Code, 1908 – Order XXIII Rule 3A – Bar Against Challenging Compromise Decrees – Respondent No. 1, a third party to the decrees, sought to set them aside – Held: Bar under Order XXIII Rule 3A CPC applicable to third parties – Suit to challenge decrees unsustainable – Remedy, if any, was to approach the same court, subject to limitation [Para 25].

Doctrine of Constructive Notice – Registered Instruments – Section 3, Transfer of Property Act, 1882 – Registered sale deeds of 1938 and 1952 deemed constructive notice to all persons acquiring interest in the property – Plaintiff and predecessors presumed to have knowledge – Limitation commences from the date of registration – Held: Plaintiff’s plea of lack of knowledge rejected [Paras 15-16].

Decision: Appeal allowed – Orders of the High Court and Trial Court set aside – Application under Order VII Rule 11(d) CPC allowed – Plaint rejected – No costs awarded [Paras 26-27].