Public-Private Partnership – Scope of Judicial Review – The High Court directed RPPL to reimburse Rs. 42 crores spent by the State and to deposit Rs. 15 crores in advance for future events – Held: Courts cannot interfere with contractual obligations voluntarily undertaken by parties in a public-private partnership unless there is an allegation of illegality, fraud, or arbitrariness – The impugned directions interfered with a policy decision and were beyond the scope of judicial review – The High Court’s directions were set aside [Paras 19-23].

Contract Law – Freedom to Contract – Courts cannot impose new obligations on contracting parties – The MoU between RPPL and SDAT was the outcome of deliberations and specified the respective financial contributions – Held: Contractual terms cannot be unilaterally modified by judicial intervention – The High Court erred in imposing financial liabilities beyond what was agreed in the MoU [Paras 20-22].

Judicial Review – Policy Matters – The High Court directed the State to take over the responsibility of organizing future racing events instead of collaborating with private entities – Held: Such directions disregarded established principles of governance and public-private partnerships – The government has the discretion to decide whether to engage private entities in sporting events – The High Court’s interference was unwarranted [Paras 23-24].

Sports Development – Government’s Role in Infrastructure Support – The Tamil Nadu government, through SDAT, aimed to promote motorsports in Chennai as part of its broader policy of making the state a global sports hub – Held: Government support for international sporting events through financial aid and logistical support is a recognized global practice – Judicial intervention should not disrupt such initiatives unless there is manifest arbitrariness or malafide intent [Paras 10-12].

Decision – Appeal allowed – Directions of the High Court in paragraphs 22(iv), (v), (vi), and (vii) of the impugned judgment set aside – No costs awarded [Paras 24-26].
 

Criminal Law – Remission of Sentence – Power of Government – Interpretation of Section 432 CrPC and Section 473 BNSS – The Supreme Court analyzed the power of the government to remit the sentence of convicts under Section 432 of the CrPC and Section 473 of the BNSS – Held: These provisions empower the appropriate government to remit the whole or part of a sentence, with or without conditions – However, the power under Section 432 CrPC is restricted by Section 433-A, which mandates that a convict serving a life sentence for an offence punishable by death must serve at least 14 years of actual imprisonment before being considered for remission – State policies on remission must align with constitutional principles of fairness and reasonableness [Paras 1-3].

Remission Policy – Suo Motu Grant of Remission – Requirement of Application – Obligation of the State – The question arose whether remission can be granted without an application from the convict or on their behalf – Held: As per Sangeet v. State of Haryana (2013) and Mohinder Singh v. State of Punjab (2013), remission cannot be granted suo motu – However, in Rashidul Jafar v. State of Uttar Pradesh (2024), the Supreme Court ruled that if a state has a policy for remission, it must proactively consider eligible convicts without requiring an application – If a remission policy exists, the state must ensure all eligible convicts are considered without discrimination [Paras 6-8].

Premature Release – Role of Legal Services Authorities – Standard Operating Procedure (SOP) of NALSA – The court emphasized the importance of the National Legal Services Authority (NALSA) SOP on premature release, parole, and furlough – Prison authorities must prepare and forward lists of eligible convicts to the government for consideration – Failure to consider eligible prisoners for remission violates Article 14 and Article 21 of the Constitution – Directed all state legal services authorities to monitor the implementation of remission policies [Paras 9-11].

Conditional Remission – Reasonableness of Conditions – Procedural Safeguards – The government can grant remission with reasonable conditions – Held: Conditions imposed must be clear, enforceable, and not arbitrary or excessively restrictive – A convict’s rehabilitation, crime severity, and public safety must be considered – Remission cannot be revoked arbitrarily; principles of natural justice must be followed [Paras 12-14].

Cancellation of Remission – Due Process – Show Cause Notice Requirement – The government has the power to revoke remission if conditions are breached – Held: Revocation affects a convict’s liberty and cannot be done automatically – A show cause notice must be issued, the convict must be allowed to respond, and a reasoned order must be passed – A minor breach cannot justify revocation; revocation must be based on substantial grounds [Paras 15-16].

Recording Reasons for Grant or Rejection of Remission – Mandatory Requirement – The court reiterated that every order granting or rejecting remission must contain brief reasons – The order must be communicated to the convict, and the District Legal Services Authority (DLSA) must ensure convicts are informed of their right to challenge rejections – Failure to provide reasons violates Article 21 and principles of natural justice [Paras 17-18].

Decision: The Supreme Court directed all states and union territories to formulate remission policies within two months if none exist – Ordered strict compliance with the NALSA SOP on premature release – Held that remission consideration must be automatic where a policy exists, without requiring convicts to apply – Revocation of remission must follow due process – Ordered state governments to implement these directives and provide reasons for all remission decisions.

Bail – Economic Offences – Prolonged Incarceration Without Trial – Right to Speedy Trial Under Section 437(6) CrPC – The appellant was accused in a cryptocurrency scam and in custody since December 2023 – The prosecution intended to examine 189 witnesses, significantly delaying trial completion – Held: Even in economic offences, prolonged incarceration without substantial progress in trial violates the right to a speedy trial – Appellant granted bail under Section 437(6) CrPC due to unreasonable delay in trial [Paras 5-6].

Interpretation of Section 437(6) CrPC – Magistrate’s Discretion to Deny Bail – Judicial Balancing Required – The High Court denied bail citing the seriousness of the offence – Held: Section 437(6) creates a presumption in favor of bail if the trial is not concluded within 60 days of starting evidence, but the magistrate can refuse bail for recorded reasons – However, the discretion must be exercised judiciously, considering delay factors and the gravity of the offence – The High Court erred in mechanically denying bail without evaluating delay and procedural fairness [Paras 8-10].

Judicial Approach to Economic Offences – Balancing Public Interest and Individual Liberty – The prosecution argued that the case involved 2000 investors losing money and thus warranted stricter bail considerations – Held: Economic offences must be dealt with stringently, but bail cannot be denied indefinitely, especially when trials face excessive delays – Courts must ensure fair trials without violating an accused’s fundamental rights [Paras 11-12].

Bail Conditions – Financial Security for Grant of Bail – Judicial Authority to Impose Monetary Deposits – The Court imposed a condition requiring the appellant to deposit ₹35 lakh as a precondition for bail – Held: While monetary conditions in bail should not be punitive, courts may impose financial safeguards in economic offences to secure trial proceedings – Appellant directed to deposit ₹35 lakh within six months, failing which bail stands canceled [Paras 22-25].

Decision: Supreme Court allowed the appeal, setting aside the Chhattisgarh High Court’s order and granting bail to the appellant – Held that prolonged incarceration without trial progress violates the right to a speedy trial – Appellant directed to deposit ₹35 lakh within six months as a condition of bail; failure to do so will lead to automatic cancellation of bail.
 

Criminal Law – Quashing - Criminal Defamation – Liability of Editorial Directors – Absence of Specific Allegations – Proceedings Quashed – The appellant, an editorial director of the newspaper company, was implicated for defamation without specific allegations establishing his role in the publication of the alleged defamatory articles – Held: Liability under Section 499 IPC cannot be presumed merely based on designation – The Press and Registration of Books Act, 1867, creates a presumption only against the "editor" and not an editorial director – Summoning order against the editorial director quashed due to lack of specific allegations and procedural violations under Section 202 CrPC [Paras 19-19.3].

Freedom of Press – Defamation by Journalists – Requirement of Direct Imputation – News Reports Cannot be Criminalized Without Clear Malice – Several appellants, including journalists, were prosecuted for publishing reports on the authenticity of paintings auctioned by the complainant – Held: The articles merely reported opinions of experts and public concerns, without direct imputations against the complainant – Mere reference to disputed matters without personal allegations does not constitute defamation – Criminal proceedings quashed as articles were based on public discourse and journalistic investigation [Paras 20-21].

Mandatory Inquiry Under Section 202 CrPC – Summoning of Accused Residing Outside Jurisdiction Without Inquiry Invalid – The accused journalists resided outside the magistrate's jurisdiction, requiring an inquiry before issuing process – Held: The magistrate failed to conduct a mandatory inquiry under Section 202 CrPC before summoning the accused – Summoning order set aside for non-compliance with statutory procedure [Paras 13.3-13.4, 19.3].

Balancing Freedom of Speech and Defamation – Journalistic Responsibility – Presumption of Good Faith in Public Interest Reporting – The court emphasized that while the media has a duty to report responsibly, the presumption of good faith applies to journalists reporting on matters of public interest – Held: Courts must adopt a cautious approach in criminal defamation cases involving journalists to prevent stifling free speech – Criminal complaints should not be used as a tool to silence critical reporting [Para 21].

Decision: The Supreme Court allowed the appeals, setting aside the Karnataka High Court’s order and quashing the criminal defamation proceedings against all appellants – Held that the summoning order was legally unsustainable due to procedural violations and lack of specific allegations against certain accused – Reaffirmed the protection of journalistic freedom while emphasizing responsible reporting.

Family Law - Divorce – Permanent Alimony – Full and Final Settlement – Maintenance Arrears Not Included – The Court had granted a decree of divorce and awarded Rs. 50,00,000/- as permanent alimony, which was paid by the husband – The wife later filed a Miscellaneous Application seeking inclusion of maintenance arrears from Maintenance Case No. 408 of 2017 pending before the Family Court, Dwarka – Held: Once the Supreme Court had adjudicated the dispute in its entirety, including maintenance, no further claims survived – The maintenance case before the Family Court stood closed, and arrears arising from it were not included in the permanent alimony [Paras 3-4].

Family Law – Maintenance – Lump Sum Settlement Bars Future Claims – The Court reiterated that when a lump sum permanent alimony is awarded in a divorce decree, it constitutes a full and final settlement of all financial claims – The wife could not seek further amounts beyond what was adjudicated – Any pending maintenance proceedings before lower courts automatically stood closed as per the Supreme Court’s final order [Paras 4-5].

Decision – Application Dismissed – No Further Relief – The Supreme Court dismissed the Miscellaneous Application as misconceived, reaffirming that the judgment dated 06.05.2024 had conclusively settled all disputes between the parties, including maintenance – No further claims could be entertained [Para 5].

Taxation Law - Value Added Tax – Input Tax Credit – Rule 21(8) of Punjab VAT Rules introduced before statutory sanction – Held invalid – The Supreme Court upheld the Punjab and Haryana High Court's decision invalidating Rule 21(8) of the Punjab VAT Rules insofar as it sought to reduce ITC on stock-in-trade before an enabling provision in the Punjab VAT Act came into force on 01.04.2014 – The Court ruled that the amendment could not apply retrospectively to transactions concluded before 01.04.2014, as it would deprive dealers of vested ITC rights accrued under the law prior to amendment [Paras 36-42].

Legislative Competence – Rule-making power under VAT Act – Rule 21(8) introduced without statutory backing – Not sustainable – The Court emphasized that rule-making power must align with statutory provisions – At the time of its introduction on 25.01.2014, the Punjab VAT Act did not empower the State to reduce ITC already earned on stock-in-trade – The enabling amendment to Section 13(1) of the Punjab VAT Act came into effect only on 01.04.2014 – Hence, the rule could not be retrospectively applied [Paras 35-38].

Taxation – Input Tax Credit – No retrospective reduction permissible – Taxpayer’s vested rights protected – The Supreme Court reaffirmed that ITC is a statutory right granted under the law at the time of purchase – A subsequent rule reducing ITC retrospectively violates this right – The Court relied on precedents like Eicher Motors Ltd. v. Union of India (1999) and Jayam and Co. v. Asst. Commissioner (2016), which held that ITC once accrued cannot be retrospectively altered to the detriment of taxpayers [Paras 37-41].

Statutory Interpretation – Amendment reducing vested rights not presumed to be retrospective – The Court applied the settled principle that unless explicitly stated, amendments affecting substantive rights cannot operate retrospectively – Cited Sedco Forex International Drill Inc. v. Commissioner of Income Tax (2005) and Commissioner of Central Excise, Patna v. New Swadeshi Sugar Mills (2016) to support the finding that a rule cannot alter an accrued benefit retrospectively unless the parent statute expressly permits it [Paras 38-40].

Decision – Appeals dismissed – Rule 21(8) effective only from 01.04.2014 – The Supreme Court concluded that Rule 21(8) could only apply prospectively from 01.04.2014 when the statutory provision enabling it came into force – All appeals filed by the State of Punjab dismissed with no order as to costs [Paras 42-43].

Labour Law - Employee’s Compensation – Interest on Delayed Payment – Mandatory Nature of 12% Interest under Section 4A(3) – The Supreme Court ruled that under Section 4A(3) of the Employee’s Compensation Act, if an employer defaults in paying compensation within one month of it becoming due, interest at 12% per annum is statutorily mandated – The Commissioner has discretion only to increase the interest rate, subject to the lending rate prescribed for scheduled banks – Interest is payable from the date of the accident [Paras 5-6].

Insurance Law – Insurer’s Liability for Interest on Compensation – No Right to Recover from Insured – The Court held that since the insurance company had not challenged the original award, it could not now seek indemnification from the insured employer for interest payments – Once the Commissioner had directed the insurer to pay compensation, interest, and penalty, and no appeal was filed against that decision, the insurer remained liable for the interest component without any right to recover it from the employer [Paras 8-9].

Compensation – Employer-Employee Relationship – Binding Effect of Prior High Court Judgment – The Court noted that the High Court had already ruled that the deceased, who was the son of the vehicle owner, was employed as a cleaner and that the claim was maintainable – This finding, having attained finality, could not be reopened at the stage of appeal [Para 7].

Decision – Appeal Allowed – Interest Rate Enhanced to 12% from the Date of Accident – The Supreme Court modified the award, increasing the interest rate from 6% to 12% per annum, effective from the date of the accident – The insurance company was held liable to pay the revised interest amount without the right to recover it from the insured [Paras 9-10].

Administrative Law – Withdrawal of NOC – Validity of Government Decision – The Supreme Court upheld the withdrawal of the No Objection Certificate (NOC) granted to the appellant for establishing an Ayurvedic Medical College and Hospital – Held: The NOC was issued without following the Rules of Business, which required approval from the Council of Ministers – Since the initial grant itself was illegal, there was no indefeasible right created in favor of the appellant – The State was entitled to rectify its own mistake by withdrawing the NOC [Paras 5-10].

Promissory Estoppel – Not Applicable Where Government Action Was Ultra Vires – The Court rejected the appellant’s plea of promissory estoppel, holding that no legitimate expectation arose from an NOC issued without due legal authority – Relying on Jit Ram Shiv Kumar v. State of Haryana, 1980 SCC OnLine SC 145, the Court held that an ultra vires act of government officials cannot bind the State, and promissory estoppel cannot be used to perpetuate an illegality [Paras 10-11].

Natural Justice – No Right to Hearing When Government’s Decision Is Inevitable – The appellant claimed that the withdrawal of the NOC was done without affording a hearing, violating principles of natural justice – The Court rejected this argument, ruling that since the Council of Ministers had already decided against the issuance of the NOC, any hearing by the department would have been a mere formality – Held: No prejudice was caused to the appellant by the absence of a hearing [Para 12].

Fact-Based Decision – No Estoppel as Appellant Had Minimal Reliance on NOC – The appellant argued that it had made financial investments and started construction based on the NOC – The Court found that the NOC was withdrawn within 22 days of its issuance, and the appellant’s claim of having built a hospital in such a short time was unrealistic – Furthermore, a loan sanctioned in favor of the appellant was obtained after the NOC’s issuance and before its withdrawal, indicating that no significant reliance had been placed on the NOC [Para 11].

Decision – Appeal Dismissed – NOC Withdrawal Upheld – The Supreme Court affirmed the High Court’s decision, upholding the withdrawal of the NOC as valid and legal – The appeal was dismissed with no relief granted to the appellant [Paras 12-13].

Labour Law – Gratuity – Forfeiture under Section 4(6) – No Requirement of Criminal Conviction – The Supreme Court ruled that gratuity can be forfeited under Section 4(6)(b)(ii) of the Payment of Gratuity Act, 1972 if an employee is terminated for an act constituting an offence involving moral turpitude – A criminal conviction is not a precondition for forfeiture – The employer, through disciplinary proceedings, can determine whether the misconduct constitutes such an offence [Paras 8-10].

Misconduct – Forgery and Misappropriation – Valid Grounds for Gratuity Forfeiture – The Court upheld complete forfeiture of gratuity for a Public Sector Undertaking (PSU) employee who submitted a fraudulent birth certificate to obtain employment – The act constituted an offence involving moral turpitude, justifying termination and forfeiture – However, in the case of conductors of the Maharashtra State Road Transport Corporation (MSRTC) who were found guilty of misappropriating small amounts from passengers, only 25% of gratuity was forfeited as a more lenient approach was warranted [Paras 11-15].

Overruling of Precedent – Requirement of Criminal Conviction for Gratuity Forfeiture – The Court declined to follow C.G. Ajay Babu v. Union Bank of India, (2018) 9 SCC 529, which had held that forfeiture of gratuity required a criminal conviction – The Court clarified that the phrase “offence involving moral turpitude” in Section 4(6)(b)(ii) of the Act does not necessitate a criminal trial and conviction but can be determined by the employer through disciplinary proceedings – Jaswant Singh Gill v. Bharat Coking Coal Ltd., (2007) 1 SCC 663, was also distinguished on this ground [Paras 6-9].

Employment Law – Suppression of Material Facts – Forfeiture Justified – The Court relied on Devendra Kumar v. State of Uttaranchal, (2013) 9 SCC 363, which held that suppression of material information at the time of appointment constitutes an offence involving moral turpitude – The PSU employee’s misrepresentation regarding his date of birth invalidated his appointment, justifying full forfeiture of gratuity [Paras 12-15].

Decision – Appeals Allowed – Forfeiture of Gratuity Upheld with Modification for MSRTC Employees – The Court upheld 100% forfeiture of gratuity for the PSU employee who used forged documents to secure employment – However, for conductors of MSRTC who misappropriated small amounts, forfeiture was reduced to 25% of gratuity – The remaining amount was directed to be released to them [Paras 15-16].