Service Law - Seniority – Surplus Railway Employees – Fixation at Recruitment Grade – Upheld – Appellants, railway guards transferred from Bhavnagar Division to newly formed Ahmedabad Division due to surplus posts, challenged fixation of their seniority at the bottom of the recruitment grade – Supreme Court upheld Tribunal and High Court rulings applying Paragraph 313A of the Railway Establishment Manual and Circular dated 25.05.2004 – Held: Surplus employees must be treated as fresh entrants in the new unit with no claim over past seniority [Paras 5-13].

Voluntary Option – Consequence of Transfer – Binding Effect – Guards in higher ranks who were not formally declared surplus but opted to be transferred to Ahmedabad Division were treated similarly – Held: Voluntary acceptance of transfer with condition to take bottom seniority binds the employees – No repatriation or preferential seniority claim maintainable [Paras 5, 15].

Retrospective Application – Circular of 2004 Applied – No Reopening – Tribunal rightly held that since seniority list was first published in November 2004, Circular RE 106/2004 and Para 313A were applicable – Past cases already decided not reopened – Contention of limitation also rejected [Paras 12-13].

Decision – Appeals Dismissed – Concurrent findings of Tribunal and High Court affirmed – No ground to interfere with seniority fixation policy for surplus employees [Para 16].

Custom Taxation Law - Customs Valuation – Charges to Indian Agent – Part of Assessable Value – Appellant imported shovel spare parts from a foreign supplier through its Indian distributor, Voltas Ltd. – An additional 8% of FOB value was payable to Voltas as engineering and technical service charges – Supreme Court held that these charges were a condition of sale and formed part of the import transaction – As such, they were rightly included in the assessable value under Rule 9(1)(e) of the Customs Valuation Rules, 1988 [Paras 8-21].

Post-import Services – Distinction Not Applicable – Charges Related to Import Process – Appellant argued that services were post-import maintenance assistance and not dutiable – Court found that services like identifying spare parts, assisting in customs clearance, and coordinating replacements were directly linked to the sale and import process – Held: Charges were pre-import and condition of sale; Note to Rule 4 inapplicable [Paras 19-21, 33].

Agency Relationship – Indian Agent as Seller’s Obligation – Payments to Agent Deemed Seller’s Responsibility – Voltas acted on behalf of the foreign supplier, not as independent service provider – Appellant had no separate agreement with Voltas – Therefore, payments to Voltas were made to satisfy an obligation of the seller, falling squarely under Rule 9(1)(e) [Paras 20, 25].

Decision – Appeal Dismissed – Inclusion of 8% service fee in assessable value upheld – Orders of Assistant Commissioner, Commissioner (Appeals), and CESTAT affirmed – Court found no merit in appeal [Para 34].

Arbitral Award – Modification by Section 34 Court – Not Permissible – Section 34 Does Not Confer Power to Modify – The Court held that the statutory language of Section 34 of the A&C Act permits only “setting aside” of arbitral awards and not “modification,” distinguishing it from appellate jurisdiction under the CPC – The qualitative difference between modification and setting aside was highlighted, and the doctrine of “implied powers” or “inherent powers” under Section 151 CPC was held inapplicable – Held: The Section 34 court cannot modify an arbitral award in absence of express legislative mandate [Paras 70-91, 94-96].

Judicial Review – Article 142 of the Constitution – Power to Modify Award Not to be Exercised – The Court reiterated that Article 142 cannot be used to circumvent express statutory provisions – In the context of the A&C Act, modification under Article 142 would conflict with the core statutory prohibition – Held: The Supreme Court will refrain from using Article 142 to modify arbitral awards arising under Section 34 of the A&C Act [Paras 108-115].

Interest Awarded in Arbitral Award – Courts Cannot Modify – Section 34(4) Applicable – Held: Courts cannot vary or reduce the rate of interest granted by arbitrators under Section 34 – In cases of excessive or ultra vires interest, the Court should remit the issue to the arbitral tribunal under Section 34(4) – This ensures course correction without rewriting the award [Paras 135].

Hakeem Case – Not Per Incuriam – The Constitution Bench held that the decision in M.Hakeem v. NHAI, (2021) 9 SCC 1 correctly interpreted Section 34 and is not per incuriam – Earlier judgments did not discuss the issue of modification explicitly, and hence, Hakeem is affirmed to have correctly stated the law – Held: Hakeem (supra) remains binding and correctly decided [Paras 126-127].

Severability – Power to Partially Set Aside Award Permissible – The Court held that where individual claims within an award are distinct and separable, the defective part may be set aside without affecting the valid part – Severability must meet the test of independence and non-interdependence between claims – Held: Section 34 Court has power to sever awards partially, provided the bad portion is not inseparably intertwined with the valid part [Paras 142-153].

Computational/Clerical/Typographical Errors – Correction Permissible – Limited Exception to Hakeem – Based on the maxim actus curiae neminem gravabit, the Court held that Section 34 Courts can correct errors of computation, clerical or typographical nature without altering the merits of the award – Held: Section 34 Court may correct such errors, creating a limited exception to Hakeem (supra) [Paras 137-141].

Section 34(4) – Oral Request Permissible – Suo Moto Exercise Permissible – The Court clarified that a written request is not mandatory under Section 34(4) and courts can exercise power suo moto if appropriate – Kinnari Mullick (2018) held not good law on this point – Held: Oral or even implied requests under Section 34(4) are valid; court may exercise discretion to remit to tribunal even without party application [Paras 130-133, 136].

Differential Interpretation for Statutory Arbitrations – Rejected – Held: Interpretation of Section 34 cannot differ for statutory or compulsory arbitrations like those under the National Highways Act – Uniformity of interpretation essential across types of arbitration [Paras 118-120].

Legislative Silence – Role of Judiciary – Power to Modify is Legislative Function – The Court held that in the absence of statutory sanction (unlike in UK and Singapore laws), courts cannot fill gaps by creating powers to modify – Held: It is for the legislature to confer such power; courts cannot judicially legislate [Paras 93, 94, 121-124].

Separate Opinion: Hon’ble Chief Justice SANJIV KHANNA, CJI.

Modification of Post-Award Interest – Permissible in Narrow Context – His Lordship took a slightly different view on the issue of interest – Held that the power to modify post-award interest may be exercised in exceptional cases by the court, notwithstanding the general prohibition on modification – This view is limited to interest component and not the main award [As per opinion of SANJIV KHANNA, CJI.].

Exercise of Article 142 – Permissible with Caution – His Lordship held that in rare and exceptional circumstances, the Supreme Court may exercise Article 142 to modify arbitral awards, especially in cases involving equitable considerations – However, such exercise must be cautious and within constitutional limits [As per opinion of SANJIV KHANNA, CJI.].

Decision: Held – Section 34 of the A&C Act does not empower courts to modify or vary arbitral awards – The only power is to set aside the award in whole or in part, subject to statutory conditions – Severability and correction of clerical errors are permissible exceptions – The ruling in Hakeem (2021) is upheld with one limited clarification [Paras 157-159].

Criminal Law – Quashing - Abetment of Suicide – Suicide Note and Delay – Charges Quashed – Appellants were accused of instigating the deceased’s suicide based on torn diary pages produced as a suicide note – The alleged harassment occurred on 10.11.2013 while the suicide took place a month later on 09.12.2013 – Held: No proximate act of instigation or continuous harassment proved; essential ingredients of Section 306 IPC not fulfilled [Paras 1-9, 14].

Section 107 IPC – No Mens Rea or Instigative Conduct – Requirement Not Met – Court held there was no evidence of intention, instigation, conspiracy, or aid from appellants under Section 107 IPC – Suicide note did not reflect inducement or irresistible provocation to commit suicide – Held: Mere past insult or harassment not sufficient to attract Section 306 without direct incitement [Paras 13-15].

Quashing of Criminal Proceedings – Abuse of Process – Proceedings Terminated – Court emphasized that in the absence of foundational allegations to constitute abetment of suicide, continuation of trial amounts to misuse of judicial process – Proceedings under S.C. No. 9 of 2016 quashed [Paras 17-20].

Decision – Appeals Allowed – Judgment of High Court dated 13.04.2018 set aside – Chargesheet and trial proceedings against the appellants under Section 306 IPC quashed – No active inducement or sustained harassment proved [Paras 20-21].

Criminal Law – Rape & Abduction  – Inconsistencies in Victim Testimony – Conviction Set Aside – Appellants convicted of rape and abduction based solely on statements of PWs 2 and 3, two women who left their matrimonial homes and later alleged rape – Court found contradictions in their account regarding journey, stay at Parbhani, and absence of complaint for over 15 days – Held: Testimony lacked “sterling quality” and failed to inspire confidence – Conviction overturned [Paras 4-10].

Medical Evidence – No Signs of Forceful Intercourse – Doubt Created – Medical examination conducted 15 days post-incident revealed no signs of repeated or forceful intercourse – Doctor (PW9) testified that injuries, if any, would still be detectable – Absence of physical corroboration added to doubts over prosecution story [Para 11].

Principle of Reasonable Doubt – Contradictions and Lack of Corroboration – Benefit Given to Accused – Applying precedents from State of Punjab v. Gurmit Singh and Raju v. State of M.P., Court held that uncorroborated and unbelievable victim testimony cannot be the sole basis for conviction – Inconsistencies raised reasonable doubt – Acquittal ordered [Paras 9-13].

Decision – Appeals Allowed – Conviction under rape and abduction set aside – Accused acquitted of all charges – Judgment of High Court (02.07.2024) and Trial Court (02.07.2003) quashed – Accused ordered to be released forthwith if not required in other cases [Para 13].
 

Criminal Law - Criminal Misappropriation – Forgery – Bitumen Supply Scam – Conviction Upheld – Appellant, proprietor of M/s Cosmo Transport, found guilty of misappropriating bulk bitumen meant for Saharsa Division using forged supply orders and CRCs – Approver (PW-5) testified that documents were forged under appellant’s instructions – Evidence established forgery and non-delivery of material to the intended destination – Conviction under Sections 407, 420, 465, and 471 IPC upheld [Paras 1-25].

Criminal Trial – Evidentiary Value of Approver – Prosecution Proved Case Beyond Doubt – Court held that evidence of approver (PW-5), corroborated by testimonies of co-accused and documentary proof, was sufficient to sustain conviction – Cross-examination failed to dent prosecution case – Bitumen was diverted and sold in Kolkata; delivery to Saharsa never occurred [Paras 10-20].

Sentencing – Mitigating Factors – Sentence Reduced – Considering appellant’s age (71), poor health, and passage of over 30 years since offence, Court reduced sentence from 5 years to 2 years and 6 months under Sections 407 and 420 IPC – Fine and default terms left unchanged – Ordered appellant to surrender within 4 weeks to serve remaining sentence [Paras 27-31].

Decision – Appeal Partly Allowed – Conviction affirmed; sentence reduced – Leniency shown only on humanitarian grounds owing to age and health; offence found fully established [Paras 30-32].
 

Civil Writ - Digital Inclusion – Accessibility in Digital KYC – Petition Allowed in Part – Petitioners, including acid attack survivors and a blind individual, challenged the inaccessibility of digital KYC systems requiring blinking or facial recognition, which they could not comply with – Supreme Court emphasized the need for reasonable accommodations under the RPwD Act, and the duty of State and private actors to ensure accessible technology – Held: Inaccessibility of digital KYC violates Article 21 and mandates under RPwD Act; directions issued to regulators for implementing inclusive standards [Paras 3-13, 34-44].

Right to Dignity and Equality – Digital Infrastructure and Fundamental Rights – Violated – Court held that excluding persons with disabilities from accessing essential services such as banking, telecommunications, and pensions due to inaccessible digital procedures infringes their constitutional rights under Article 21 – Emphasized India's obligations under the UNCRPD and Incheon Strategy – Directed all regulators to comply with accessibility mandates and facilitate inclusive KYC processes [Paras 14-16, 44].

Regulatory Oversight – KYC Compliance and Accessibility – Gaps Identified – Court found several authorities including RBI, SEBI, PFRDA, IRDAI, and DoT had partially implemented accessibility features but failed to adopt uniform reasonable accommodations – Emphasized need for eliminating eye-blinking as sole liveness check and inclusion of thumb impressions, voice recognition, offline alternatives – Directed issuance of unified guidelines within stipulated timeframe [Paras 9-13, 44].

Decision – Directions Issued to Ensure Inclusive KYC – Writ Petitions Allowed in Part – Supreme Court directed the Central Government, RBI, SEBI, PFRDA, IRDAI, and DoT to formulate inclusive, accessible digital KYC norms within 3 months – Ordered compliance audits, training of officials, and allowance for offline KYC in exceptional cases – Court retained jurisdiction for compliance monitoring [Para 44].
 

Motor Accident Compensation – Child Victim – Permanent Disability – Enhancement Denied – The minor victim, aged 4, suffered 55% disability due to below-knee amputation in a bus accident – Tribunal awarded Rs. 20,03,328/- including compensation for loss of future earnings, marriage prospects, pain and suffering – High Court enhanced compensation by Rs. 7 lakhs considering inadequacy under various heads – Held: Compensation of Rs. 27,03,328/- with 6% interest is reasonable; no further enhancement warranted [Paras 1-4, 8-10].

Judicial Precedents – Reference to Mallikarjun and Kumari Kiran – Supreme Court considered guidelines in Mallikarjun v. Divisional Manager (2014) 14 SCC 396 and Kumari Kiran v. Sajjan Singh (2015) 1 SCC 539 which set indicative compensation for child disability – Held: Present compensation substantially exceeds amounts granted in those cases; enhancement rightly limited by High Court [Paras 5-7].

Final Relief – SLP Dismissed – No further enhancement – Total compensation of Rs. 27,03,328/- inclusive of enhanced Rs. 7 lakhs and interest @ 6% p.a. upheld – Special Leave Petition dismissed [Paras 9-10].
 

Motor Vehicle Accident Claim – Contributory Negligence – Equal Apportionment – Modified – The High Court had found 70% negligence on the deceased car driver based on FIR and sketch evidence – The Supreme Court found FIR unreliable as it was based solely on the lorry driver’s version and no further investigation was conducted – Statement of PW-1 under Section 161 CrPC held inadmissible, as she was neither eyewitness nor present at the scene – Supreme Court held both drivers equally negligent, with apportionment fixed at 50% each [Paras 2-6].

Fatal Motor Accident – Quantum of Compensation – Recalculated – High Court assessed income at Rs. 4,50,000 annually with 40% future prospects – Deductions made for personal expenses and appropriate multiplier applied – Consortium awarded to all dependents including children and mother as per precedent – Loss of estate and funeral expenses also awarded – Total compensation fixed at Rs. 72,77,500/- [Para 7].

Decision – Modified Apportionment and Interest – 50% deduction made for contributory negligence, entitling claimants to Rs. 36,38,750/- – Interest at 7% p.a. granted from date of claim petition with proportionate costs – Interim compensation under Section 140 MV Act to be deducted – Appeal allowed with modification [Para 8-9].