Constitution of SIT – High Court Order Modified – Investigation Entrusted to SIT of IPS Officers from Tamil Nadu Cadre - High Court directed the CBI to investigate FIR No. 33/2024 registered at All Women Police Station, Anna Nagar, Chennai – Supreme Court modified the order, constituting a SIT of three IPS officers belonging to Tamil Nadu cadre but hailing from other states – Directed the SIT to conduct an objective and impartial investigation, submitting weekly reports to a Bench assigned by the Chief Justice of Madras High Court [Paras 2-5].

Administrative Directions – Relieving SIT Members from Additional Responsibilities – State Cooperation Mandated - Tamil Nadu government and its DGP instructed to ensure SIT members are relieved of other significant responsibilities to allow uninterrupted investigation – SIT tasked with receiving the case records promptly [Para 6].

Compensation – Interim Litigation and Miscellaneous Expenses Granted - Respondent (victim’s mother) awarded ₹50,000 for litigation expenses and ₹25,000 for miscellaneous expenses – Directed payment within one week, with compliance to be reported to the High Court [Para 7].

Decision: Appeals allowed in part. High Court’s order for CBI investigation modified to entrust the case to a SIT. Directions issued for compliance by the State of Tamil Nadu and the SIT. Pending applications disposed of [Paras 6-8].

Service Law – Proficiency Step-up Scheme – Differential Treatment – Relief Granted – Appellants sought benefits under the Proficiency Step-up Scheme, 1988, counting service in the work-charged establishment before regularisation – High Court upheld denial of benefits by the Single Judge, equating the Proficiency Step-up Scheme, 1988, with the Assured Career Progression Scheme (ACPS), 1998 – Supreme Court observed that the Proficiency Step-up Scheme was distinct, with a clear mandate in the regularisation policy to count work-charge service for pensionary and other benefits – Differential treatment of appellants was held unjustified, as other similarly situated employees had been granted benefits – Held: Appellants entitled to inclusion of work-charge service for Proficiency Step-up(s) under the 1988 Scheme – Monetary benefits directed to be paid within six months [Paras 8–14].

Constitutional Law – Article 14 – Hostile Discrimination – Appellants alleged violation of Article 14 of the Constitution due to denial of benefits granted to similarly situated employees – Court agreed, holding that differential treatment lacked justification, particularly when appellants were part of the same establishment and similarly situated – Circulars and earlier decisions by courts and tribunals supported inclusion of work-charge service for the 1988 Scheme – Denial of benefits violated principles of equality [Paras 2, 11, 13].

Policy Interpretation – Regularisation and Service Counting – Policy Circular dated 13th March 1996 explicitly mandated that work-charge service would qualify for pensionary and other consequential benefits – Tribunal decisions and subsequent court orders consistently affirmed this interpretation – Supreme Court emphasized that the High Court erred in equating distinct schemes (Proficiency Step-up, 1988, and ACPS, 1998) to deny benefits – Directed implementation of the Proficiency Step-up Scheme for appellants [Paras 9–12].

Decision: Appeals allowed – Impugned judgments set aside – Appellants entitled to benefits under the Proficiency Step-up Scheme, 1988 – Monetary benefits to be disbursed within six months – No order as to costs [Paras 14–15].
 

Service Law – Disciplinary Proceedings – Violation of Rule 7(3) – Inquiry Invalidated – Relief Granted - Appellant faced disciplinary proceedings resulting in major penalties, including censure entry and withholding of increments with cumulative effect. Tribunal quashed the penalty order, finding the inquiry officer failed to record oral evidence, violating Rule 7(3) of the Uttar Pradesh Government Servants (Discipline and Appeal) Rules, 1999. High Court reversed this decision. Supreme Court held that absence of oral evidence renders the inquiry report invalid. Held: Inquiry proceedings quashed; penalties set aside; appellant entitled to consequential benefits [Paras 10–16].

Natural Justice – Evidence in Disciplinary Proceedings – Mandatory Recording of Oral Evidence - The Court reaffirmed that oral evidence is indispensable in disciplinary inquiries proposing major penalties. Inquiry officer’s failure to call witnesses and provide cross-examination opportunities contravened principles of natural justice. Reference made to Roop Singh Negi v. Punjab National Bank and Nirmala J. Jhala v. State of Gujarat [Paras 12–15].

Tribunal’s Findings Restored – Procedural Defects in Inquiry – Penalty Unsustainable - Supreme Court noted that the Tribunal correctly quashed the penalty as the inquiry findings were irrational and unsupported by evidence. High Court erred in interfering with the Tribunal’s decision without addressing these procedural deficiencies. Order of the Tribunal restored, granting all consequential benefits [Paras 9–13, 16–18].

Decision: Appeals allowed – High Court judgment quashed – Tribunal’s decision restored – Appellant entitled to all consequential benefits within two months, with interest at 6% per annum for delays – No order as to costs [Paras 16–19].
 

Property Law – Nature of Deed – Distinction between "Gift" and "Settlement" – Property Share Upheld – The deed executed in 1963 by two coparceners in favor of Govindammal was challenged as a gift deed lacking adequate consideration, contending it did not confer the claimed rights over 2/3rd of the property – Held: The deed constituted a valid settlement under family arrangements as consideration included care and support provided by Govindammal – High Court's judgment reversing concurrent findings of the lower courts was unjustified – Original decree restored [Paras 13-16].

Scope of Second Appeal – Section 100 of CPC – Limitations on Reversal of Concurrent Findings – The High Court erred in overturning findings of fact by the Trial and First Appellate Courts which had determined the validity of the deed and entitlement to property shares – Held: The jurisdiction under Section 100 CPC requires identification of a substantial question of law which was absent in this case [Paras 16-16.4].

Family Arrangements – Interpretation of "Consideration" in Settlement Deeds – Validity Affirmed – Consideration need not be monetary under family arrangements – Acts of service, care, and future obligations can constitute valid consideration for property transfer within families – High Court’s restrictive interpretation of "consideration" rejected [Paras 15-15.5].

Decision: The appeal was allowed, the impugned judgment of the High Court was set aside, and the findings of the Trial and First Appellate Courts awarding a 2/3rd share to Govindammal's heirs were restored.
 

Demolition of Properties – Arbitrary Action – Violation of Rule of Law - Writ petitions filed under Article 32 challenge demolition of residential and commercial properties of persons accused in criminal cases without adherence to due process – Court finds such demolitions to be violative of the principles of rule of law and separation of powers – Executive cannot impose penalties such as demolition without judicial adjudication – Held: State officials are bound to follow established legal procedures [Paras 12, 14-33].

Right to Shelter – Fundamental Aspect of Article 21 - Right to shelter is integral to the right to life under Article 21 of the Constitution – Demolition impacts not only accused persons but also innocent family members – State actions depriving individuals of shelter without lawful justification are unconstitutional – Right to shelter includes dignity, security, and socio-economic stability – Held: Arbitrary demolitions infringe upon fundamental rights [Paras 76-86].

Principles of Natural Justice – Due Process Mandatory - Held: No property, even that of an accused or convict, can be demolished without observing principles of natural justice – Prior show cause notice, opportunity for a personal hearing, and appellate scrutiny are mandatory – Absence of these safeguards renders demolitions arbitrary and illegal – Court notes that executive action bypassing judicial review amounts to abuse of power [Paras 63-75].

Collective Punishment – Prohibited by Law - Demolition of structures occupied by multiple residents as punishment for one person’s alleged crime amounts to collective punishment – Such actions contravene the presumption of innocence and the principle of individual culpability – Constitution and criminal jurisprudence prohibit imposing penalties on uninvolved persons – Held: Arbitrary demolitions violate the criminal justice system and constitutional scheme [Paras 87-89].

Separation of Powers – Executive Overreach - Judiciary exclusively empowered to determine guilt and impose penalties – Executive cannot assume adjudicatory powers by punishing accused persons through demolition – Court observes that such overreach undermines the constitutional framework and democratic governance – Held: Executive actions contrary to the principles of separation of powers are unconstitutional [Paras 34-44].

Directions Issued by the Court:

Notice Requirements: No demolition without prior show cause notice – Minimum 15 days for reply – Notice to be served by registered post and conspicuously affixed on the property – Digital records of notices to be maintained by municipal authorities [Para 91(A)].

Personal Hearing: Designated authority to provide opportunity for personal hearing – Minutes of the hearing to be recorded [Para 91(B)].

Final Order: Final order to specify reasons for demolition – Authority to examine if construction is compoundable or partially violative – Demolition to be the last resort, and only if alternative remedies are unavailable [Para 91(C)].

Appellate and Judicial Scrutiny: Implementation of demolition orders stayed for 15 days to allow appeals – Unauthorized constructions to be demolished only after appellate or judicial remedies are exhausted [Para 91(D)].

Demolition Process: Demolition to be videographed, and detailed reports to be prepared and submitted to municipal authorities – Reports to be uploaded on designated digital portals [Para 91(E)].

Accountability of Officials: Violation of directions to attract contempt proceedings and personal liability – Erring officers responsible for restitution of demolished properties at their personal cost, in addition to paying damages [Paras 93-94].

Decision: Guidelines issued under Article 142 to ensure fair process in demolition cases – Officials directed to comply with constitutional principles, and arbitrary demolitions held impermissible – Registrar to circulate judgment to all States and High Courts for implementation [Paras 90-99].

House-Trespass – Section 451 IPC – Conviction Sustained - The appellant was convicted for committing house-trespass with intent to commit an offence punishable with imprisonment. Based on the testimonies of PWs 4 and 5, the concurrent findings of guilt were upheld. The Court observed that the appellant's intent to commit an offence punishable under Section 354 IPC justified the conviction under Section 451 IPC – Held: Conviction and sentence of one-year rigorous imprisonment (R.I.) upheld [Paras 4-8].

Outraging Modesty – Section 354 IPC – Reduction of Sentence - The Appellate Court had modified the original conviction under Section 376 IPC to Section 354 IPC, sentencing the appellant to two years R.I. The Supreme Court, considering the appellant’s young age at the time of the offence, absence of criminal antecedents, and the lapse of over 25 years since the incident, reduced the sentence to one-year R.I. The fine imposed by the lower courts was maintained – Held: Sentence reduced in the interest of justice [Paras 6-9].

Concurrent Sentences – Rationale for Reduction - The Court emphasized proportionality in sentencing, considering the nature and gravity of the offences and mitigating factors, including the appellant's age and long passage of time since the incident. The Court maintained that sentences under both Sections 451 and 354 IPC would run concurrently – Held: Modified sentence strikes balance between deterrence and reform [Paras 7-9].

Direction to Appellant – Compliance and Custodial Surrender - The Court directed the appellant to surrender before the Trial Court within four weeks to serve the remaining sentence. Non-compliance would result in the appellant being taken into custody – Held: Directions issued for execution of sentence [Para 10].

Decision:

The appeal is partly allowed. The conviction and sentence under Section 451 IPC are confirmed. The conviction under Section 354 IPC is also upheld, but the sentence is reduced from two years to one year of rigorous imprisonment. Both sentences will run concurrently, and the fine imposed is maintained.

Civil Law - Specific Performance – Validity of Agreement to Sell – Appeals Allowed – High Court’s Judgment Set Aside – Trial Court Judgment Restored – Plaintiffs filed six suits for specific performance of Agreement to Sell dated 30.08.1990 executed by Sushila Devi – High Court reversed the Trial Court’s decree and dismissed the suits – Supreme Court held the Agreement to Sell valid and binding – Defendants’ plea of fraud and forgery unsubstantiated – Suit filed within limitation as per Article 54 of the Limitation Act – Appeals allowed, High Court judgment set aside, Trial Court decree restored [Paras 1–37].

Agreement to Sell – Validity and Execution – Proof Sufficient to Establish Agreement – Agreement to Sell executed by Sushila Devi after receiving full consideration – Possession of original title deed of 1966 and Rin Pustika corroborated plaintiffs’ case – Evidence by attesting witness (PW-2) and General Power of Attorney holder (PW-3) supported plaintiffs – Defendants’ handwriting expert failed to disprove authenticity of signatures – Held: Agreement to Sell dated 30.08.1990 duly proved, and High Court’s contrary findings erroneous [Paras 25–27].

Limitation – Suit Within Time – No date fixed for performance in the Agreement to Sell – Limitation started from the date of refusal in 1994 – Suit filed in May 1995 held within limitation as per Article 54 of the Limitation Act – High Court’s finding of the suit being barred by limitation rejected [Paras 30].

Absence of Plaintiffs from Witness Box – No Adverse Inference – Plaintiffs represented by Power of Attorney holders with personal knowledge of the transaction – Plaintiff K.D. Maheshwari testified as PW-1 and established the facts – High Court’s adverse inference misplaced – Held: Plaintiffs adequately proved execution of Agreement to Sell through competent witnesses [Paras 28].

Possession – Plaintiffs in Possession Since Agreement – Plaintiffs took possession after paying full consideration – Rin Pustika and revenue records corroborated possession – High Court’s finding of non-possession overturned – Readiness and willingness to perform obligations adequately established by plaintiffs [Paras 32, 34.5].

Fraud and Forgery – Onus on Defendants – Defendants alleged fraud but failed to present credible evidence – Defendants’ handwriting expert could not conclude forgery – Key defendant Kailash Aggarwal did not testify, weakening defense – Trial Court rightly held allegations of forgery unproven [Paras 27, 34.1].

Violation of Injunction – Defendants’ Conduct Undermined Their Defense – Interim injunction prohibited alienation of the property – Defendants executed sale deeds in violation of injunction – Sale deeds declared void – High Court failed to consider this conduct of defendants [Paras 33].

Subsequent Purchasers – Doctrine of Lis Pendens Applied – Purchasers during pendency of litigation bound by its outcome – Transfers during litigation in violation of court orders are void – Subsequent purchasers could not claim superior rights over plaintiffs [Paras 36].

Decision: Appeals allowed – High Court judgment set aside – Trial Court decree restored – Defendants and subsequent purchasers directed to execute sale deeds in favor of plaintiffs – Plaintiffs entitled to specific performance and other reliefs as per Trial Court judgment [Paras 37].
 

Partnership Law – Dissolution of Partnership – Rights of Outgoing Partner – Suit for Settlement of Accounts – Original plaintiff filed Suit No. 286 of 1978 seeking dissolution and settlement of accounts of a partnership firm, Crystal Transport Service, alleging improper conduct by other partners in diverting firm assets – Trial court's preliminary decree dissolved the firm and acknowledged the plaintiff's one-fourth share, directing a Commissioner to take accounts – First appellate court further reinforced that the assets taken over by the appellant company (defendant no. 4) must be accounted for in determining the plaintiff’s share – Held: Plaintiff entitled to seek accounts and share in profits generated post-dissolution by appellant company from firm assets till final settlement [Paras 2-8, 19-21].

Accounting Post-Dissolution – Section 37 of the Indian Partnership Act, 1932 – Entitlement to Profits – Section 37 mandates that, absent an alternative contract, an outgoing partner retains a right to profits derived from their share in firm assets or to interest at 6% per annum until accounts are settled – In this case, appellant company continued the business with firm assets, necessitating accounting of profits derived from these assets in favor of the plaintiff – Court upheld that extent of appellant's use of firm assets would be determined through evidence during final decree proceedings [Paras 20-22].

Remand Order – Opportunity to Lead Evidence – Cross-Examination of Receiver – High Court’s order remanded the matter to trial court to allow parties to present additional evidence and cross-examine the Receiver and authors of financial documents to substantiate their respective accounts – Trial court directed to reassess and ascertain amount payable to the plaintiff in light of this additional evidence – Held: No interference with remand order warranted as it provides necessary procedural safeguards for a fair determination of parties’ rights [Paras 11, 14, 16, 23].

Decision: Appeal Dismissed – Remand Confirmed – Supreme Court confirmed the High Court’s remand order, directing that trial court should proceed to take evidence and cross-examination as required – No opinion expressed on merits of the claim, reserving final assessment for trial court based on evidence led – Parties to bear their own costs [Paras 23-25].

Arbitration Agreement – Assignability and Privity of Contract – The petitioner, a U.S.-incorporated entity, invoked the arbitration clause in the agreements initially made by Cryobank International, Inc. with the respondent companies, claiming an assignment of rights due to a public asset purchase. The respondent contested, arguing a lack of privity with the petitioner and that the agreements were non-assignable without consent. The Court cited Khardah Company Ltd. v. Raymon & Co (India) Pvt. Ltd., emphasizing that obligations are generally non-assignable without the promisee’s consent, while rights may be assigned unless restricted by law or contract [Paras 7-9].

Scope of Section 11(6A) – Limited Judicial Examination – The Court, aligning with DLF Power Ltd. v. Mangalore Refinery & Petrochemicals Ltd., held that the judiciary's role under Section 11(6A) of the Act is confined to ascertaining the existence of an arbitration agreement, not determining the validity of assignments or deeper contractual issues. The Court therefore referred the matter to arbitration without delving into privity or assignment issues, leaving these for arbitral resolution [Paras 10-11].

Referral to Arbitration – Delhi International Arbitration Centre – Recognizing the existence of arbitration clauses in the agreements, the Court referred the matter to the Delhi International Arbitration Centre to appoint a sole arbitrator, emphasizing that all contentions, including the arbitrability of claims, remain open for determination before the arbitral tribunal [Paras 12-13].

Decision: Petition Allowed – The Court referred the dispute to the Delhi International Arbitration Centre for the appointment of a sole arbitrator to resolve the matter. It clarified that this referral does not imply any judgment on the merits of the case, including issues of privity or assignment validity. All pending applications were disposed of.