FIR Quashing – False Promise of Marriage – Section 482 Cr.P.C. – FIR Quashed – The appellant sought quashing of the FIR registered under Sections 376 and 313 of IPC – High Court dismissed the petition – Supreme Court held: The FIR, even if taken at face value, does not reveal a prima facie case of rape or forced abortion – The appellant and complainant lived together for over five years, which cannot be classified as a relationship arising out of a false promise of marriage – The delay of over five years in filing the complaint further weakens the complainant’s case – FIR quashed under inherent powers of the court to prevent abuse of process [Paras 9-12, 16].

Consensual Relationship – No Misconception of Fact – Section 376 IPC – Alleged rape based on a false promise to marry – Court noted that the relationship lasted several years during which the complainant and the appellant lived as husband and wife – A consensual relationship lasting such a long period negates the claim of rape – No prima facie evidence that consent was vitiated by misconception of fact under Section 90 IPC [Paras 8-10].

Section 313 IPC – Allegation of Forced Abortion – Dropped Post Investigation – After investigation, charges under Section 313 IPC (forced abortion) were omitted as no supporting evidence was found – The lack of medical evidence or statements substantiating the claim of abortion further weakened the complainant's case – No ground to proceed with the allegation of rape under Section 376 IPC [Paras 6, 11].

Delay in Filing Complaint – Impact on Credibility – A significant delay of over five years in lodging the FIR – The court held that such delay, coupled with the consensual nature of the relationship, undermined the credibility of the allegations – FIR quashed as the allegations were inherently improbable [Paras 5, 12, 15].

Decision – The appeal is allowed – FIR No. 28/2018 dated 21.02.2018 registered at Police Station – Nandganj, Ghazipur District of Uttar Pradesh, and all proceedings based on it are quashed – Held: The High Court's refusal to quash the FIR was erroneous, and no prima facie case under Sections 376 and 313 IPC is made out – The appellant is acquitted of all charges [Para 16].

Taxation Law - Broken Period Interest – Deduction for Securities Held as Stock-in-Trade – Revenue Expenditure – The court held that broken period interest, paid when a bank purchases government securities, should be treated as a revenue expenditure when the securities are held as stock-in-trade. This is because the income from securities is chargeable under Section 28 of the Income Tax Act as business income. Therefore, the interest paid for the broken period should not be capitalized as part of the cost of the securities but should be allowed as a deduction in the profit and loss account [Paras 5-12, 20].

HTM (Held to Maturity) Securities – Treatment as Investment or Stock-in-Trade – Whether broken period interest is deductible depends on how the bank treats HTM securities. If HTM securities are held as investments, the interest will not be deductible as revenue expenditure. However, if they are held as stock-in-trade, the deduction will apply [Paras 35-40].

Application of Previous Decisions – The court ruled that the decision in Vijaya Bank Ltd. v. Additional Commissioner of Income Tax does not apply to cases after the repeal of Sections 18-21 of the Income Tax Act in 1989. This is because interest on securities, when treated as business income, falls under Section 28, not under the previously repealed provisions [Paras 25-30].

Circulars and Guidelines – RBI Circulars of 1998 and 2001, as well as the CBDT Circular No. 4 of 2007, were taken into account, affirming that broken period interest should be treated as revenue expenditure in the case of securities held as stock-in-trade. The court emphasized that the practice of treating such interest as an expense is well-settled [Paras 42-45].

Decision: The court allowed the appeals in favor of the appellant Bank of Rajasthan, setting aside the High Court's judgment. The decision of the Appellate Tribunal was restored. The court also dismissed all the other civil appeals brought by the Revenue.

Criminal Law – Murder – Death Sentence Commuted to Life Imprisonment Without Remission – The appellant was convicted of strangling his pregnant daughter due to her inter-caste marriage, a crime for which both the Trial Court and High Court imposed the death penalty – The Supreme Court, while affirming the conviction under Sections 302, 316, and 364 IPC, commuted the death sentence to 20 years of rigorous imprisonment without remission – The Court considered mitigating factors, including the appellant’s poor socio-economic background, absence of criminal antecedents, satisfactory prison conduct, and medical conditions, including cognitive impairment due to a stroke suffered in prison [Paras 29-33].

Rarest of Rare Doctrine – Mitigating Circumstances Considered – The Court reiterated the principle that death penalty should be reserved for the “rarest of rare” cases, where the possibility of reformation is absent – In the present case, the Court found that despite the gravity of the crime, there was a potential for reformation, especially given the appellant’s personal circumstances and health conditions, and thus opted for a "middle path" approach, converting the death sentence to a fixed term of 20 years without remission [Paras 24-31].

Decision: Appeal partly allowed – The conviction for murder under Section 302 IPC and related charges under Sections 316 and 364 IPC was upheld, but the death penalty was commuted to 20 years of rigorous imprisonment without eligibility for remission [Para 33].

Taxation Law - Royalty vs. Tax – Distinction between Royalty and Tax – The appellants argued that the demand was not a tax but a royalty agreed to between the parties for the right to display advertisements. The Supreme Court held that royalty and tax are distinct concepts; royalty is a payment for the privilege to use land or property, whereas a tax is a sovereign imposition. The court reiterated that the demand by the Patna Municipal Corporation was not a tax but royalty agreed upon for advertising rights [Paras 34-42].

Legislative Authority – Absence of Regulations – The respondents challenged the imposition of fees, arguing that no regulations were framed under the Bihar Municipal Act, 2007, to authorize the levy of taxes or fees on advertisements. The court ruled that while regulations under Section 147 are required for the imposition of taxes, the royalty charged in this case was pursuant to an agreement between the parties, not under statutory provisions. Therefore, the absence of regulations did not invalidate the demand [Paras 48-56].

Penalty for Non-Payment – Absence of Statutory Backing – The court found that while the corporation could charge interest on delayed payments as compensation, the imposition of a penalty for non-payment had no statutory backing. The penalty imposed by the corporation was thus quashed, but interest could be charged for late payments [Paras 65-69].

Decision:

The Supreme Court set aside the Division Bench’s judgment of the Patna High Court and upheld the imposition of royalty by the Patna Municipal Corporation. However, the penalty for non-payment was quashed, and the corporation was allowed to charge simple interest at 6% per annum on delayed payments.

Criminal Law – Bank Fraud – Discharge of Accused – Appeal against the High Court’s decision to discharge the respondent (Accused No. 7) from charges of conspiracy, cheating, and criminal misconduct related to fraudulent credit facilities granted to a company – Allegation of undue haste in sanctioning loans without proper appraisal or clearance by the relevant departments – The High Court held that mere suspicion was insufficient to proceed against the respondent – Supreme Court upheld the discharge, stating no direct evidence implicated the respondent beyond signing a memorandum approved by senior officials – Held: No scope for interference, appeal dismissed [Paras 1-17].

Conspiracy – Participation and Knowledge – Submission by the learned Additional Solicitor General that a conspiracy does not require all conspirators to know every detail, and suspicion alone can suffice for framing charges – However, the Supreme Court found that although the process was expedited, there was no material to show that the respondent actively engaged in fraudulent conduct – The Loan Advisory Committee and senior officers’ involvement minimized the respondent’s role – No direct evidence of pecuniary benefit or improper influence by the respondent – Held: Suspicion alone does not justify framing charges [Paras 5, 18].

Banking Procedure – Loan Sanctioning – Court examined the procedures followed in sanctioning loans, noting the Zonal Office, Credit Department, and Loan Advisory Committee's roles in recommending the loans – The respondent’s role was limited to signing the memorandum, and no evidence showed personal involvement in misconduct – Despite the rapid processing of the loans, this did not amount to criminality – Held: Discharge was appropriate as no criminal intent or participation in the conspiracy could be proven [Paras 16-17 ].

Decision: Appeal dismissed – High Court’s order of discharge upheld – No findings made regarding other accused persons

Decision: The appeal was dismissed, and the High Court's order discharging the respondent was upheld. The court clarified that its findings were limited to the respondent's role and did not affect the trial against the other accused.

E-Auction Sale – Issuance of Sale Certificate – Readiness to pay balance auction amount – Respondents were highest bidders in an e-auction and had deposited 25% of the sale price, but the bank refused to accept the balance amount or issue a sale certificate, citing various reasons, including an advisory by the Enforcement Directorate (ED). The High Court held that the refusal was unjustified as there was no directive from CBI or ED against the auction. Held: The bank's refusal to accept the balance amount and issue the sale certificate was unwarranted, and the sale certificate must be issued after receiving the balance auction amount [Paras 4-10].

Rule 9(4), Security Interest (Enforcement) Rules, 2002 – Extension of Time – The period for depositing the balance auction amount, while prescribed under Rule 9(4), is not sacrosanct and can be extended by mutual agreement in writing. The bank’s refusal and delay in accepting the balance amount implied consent for an extension, and hence no default could be attributed to the respondents under Rule 9(4) [Paras 13-16].

Natural Justice – Unilateral Cancellation – The bank’s cancellation of the auction sale without notice or an opportunity for the respondents to be heard was held to be a violation of natural justice principles. Such unilateral cancellation was deemed illegal [Para 20].

Article 142 – Supreme Court’s Power – Extension of statutory time – The Court clarified that while Article 142 does not override statutory provisions, Rule 9(4) of the Security Interest (Enforcement) Rules permits an extension of time with mutual consent in writing, and hence the bank’s reliance on statutory timelines was misplaced [Paras 21-22].

Auction Sale Validity – High Court’s Order Affirmed – The Supreme Court upheld the High Court's decision directing IDBI Bank to issue the sale certificate and accept the balance sale consideration within four weeks, as no fault was found with the respondents' conduct [Paras 22-23].

Auction Sale – Cancellation by Bank – Non-Issuance of Sale Certificate – The appellant bank conducted an auction where the respondents were the highest bidders. After the auction was confirmed, the bank failed to issue the sale certificate, citing the respondents’ delay in paying the balance sale consideration. The respondents challenged the cancellation, asserting they were willing to pay the amount but were obstructed by the appellant's actions. The court held that the bank’s unilateral cancellation was not justified, particularly since the bank had delayed accepting the balance amount due to internal reasons, including a complaint to the CBI and an advisory from the ED – Auction upheld, cancellation set aside [Paras 5-12].

Interpretation of Rule 9(4) of Security Interest (Enforcement) Rules, 2002 – Time for Payment Not Sacrosanct – The court clarified that Rule 9(4), which provides 15 days to pay the balance sale consideration, is not absolute. The time can be extended by agreement between the parties. In this case, the delay in payment was not the respondents’ fault but due to the bank's failure to accept the balance within the stipulated time. Therefore, Rule 9(4) did not apply to declare the respondents as defaulters [Paras 15-18].

Principles of Natural Justice – Unilateral Cancellation Without Hearing – The cancellation of the auction by the bank was made without notice or an opportunity of hearing, violating the principles of natural justice. Such cancellation was held to be illegal [Para 23].

Decision: The court dismissed the appeals and upheld the High Court's decision, directing the bank to issue the sale certificate and execute the sale deed in favor of the respondents upon payment of the balance sale amount within four weeks. The cancellation of the auction was declared illegal, and the respondents were entitled to the property.

Motor Vehicle Accident – Compensation – Assessment of Income – Future Prospects

The appellant, who sustained severe brain injuries resulting in 100% functional disability, challenged the High Court’s award of compensation – Held: The annual income of the appellant should have been enhanced considering salary progression, and future prospects were to be included – The appellant’s income was reassessed to ₹200,000 per annum with an additional 40% for future prospects, in line with Pranay Sethi [Paras 12-14, 22].

Functional Disability – Assessment of Compensation – Loss of Future Income - High Court correctly assessed the appellant's functional disability at 100%, despite a 60% physical disability, due to the mental incapacity caused by brain injuries – Compensation for loss of future income recalculated based on full functional disability [Paras 16-18].

Pain and Suffering – Enhancement of Compensation - The sum awarded for pain, suffering, and loss of amenities was enhanced from ₹50,000 to ₹100,000, acknowledging the severity and long-term impact of the injuries [Paras 20-21].

Additional Compensation – Future Attendant Charges and Loss of Marriage Prospects

The appellant was also awarded ₹100,000 each for future attendant costs and loss of marriage prospects, considering his need for long-term care and the impact of his injuries on his personal life [Paras 23-25].

Decision: Appeal allowed – The compensation awarded by the High Court was enhanced from ₹3,099,873 to ₹5,231,000, with interest at 6% per annum on the enhanced amount [Paras 28-29].

Constitutional Law – Disability Rights – Admission to Medical Course – Rights of Persons with Disabilities Act, 2016 -  appellant, diagnosed with a speech and language disability of 44%, was denied admission to the MBBS course under the PwD category due to National Medical Commission guidelines disqualifying candidates with a disability exceeding 40% – Held: The strict application of the 40% disability rule was deemed overly broad and discriminatory under Article 14, as it failed to consider individual circumstances – The Court directed the National Medical Commission to reformulate its guidelines, emphasizing reasonable accommodation under the RPwD Act [Paras 18-22, 30-35].

Reasonable Accommodation – Interpretation of Disability Regulations - Court held that mere quantification of disability at 40% or more does not automatically disqualify a candidate for admission – Disability Assessment Boards are required to assess whether the disability actually impedes the candidate's ability to pursue the course, rather than relying on blanket exclusions – The decision reinforced the need for reasonable accommodation to enable the full participation of persons with disabilities in higher education [Paras 38-40].

Directive Principles of State Policy – Right to Education – Persons with Disabilities - Article 41 of the Constitution emphasizes the State's duty to provide access to education for persons with disabilities – The Court ruled that regulations that impose blanket exclusions based on arbitrary thresholds are incompatible with this Constitutional mandate, affirming the right of persons with disabilities to be assessed individually [Paras 44-48].

Decision: Appeal allowed – The admission of the appellant to the MBBS course was confirmed, and the National Medical Commission was directed to revise its regulations in line with the Rights of Persons with Disabilities Act, 2016, by the next academic year [Paras 50-54].