Arbitration – Incorporation by Reference – Section 7(5) of the Arbitration and Conciliation Act, 1996 – Appellant-developer entered into a Development Agreement dated 04.07.2012 with respondent housing society containing an arbitration clause (Clause 36) – Subsequently, Permanent Alternate Accommodation Agreements were executed with individual members, each containing Clause 14 recording that all terms and conditions of the Development Agreement shall be construed to form part of those agreements and all clauses thereof shall be binding on the parties – Respondent members filed consumer complaints; appellant invoked arbitration – High Court dismissed Section 11 applications holding that mere reference to an earlier document is insufficient to incorporate the arbitration clause into a later agreement and that individual members were not privy to the Development Agreement – Held: High Court erred; Clause 14 constituted a specific, unequivocal incorporation of the Development Agreement body and soul into the Permanent Alternate Accommodation Agreements, not a mere reference, and Clause 36 (arbitration clause) thereby formed part of the later agreements – Appeals allowed [Paras 3-4, 7-8, 11-13].

Arbitration Agreement – Distinction Between Reference and Incorporation – Section 7(5) requires a conscious acceptance of the arbitration clause from another document – A mere reference to another document adopts only specific portions; an incorporation brings the referred document in its entirety into the later contract – Where a later contract records that all terms and conditions of an earlier document shall be construed to form part of it and all clauses shall be binding on the parties, every term of the earlier document including the arbitration clause gets bodily lifted and incorporated – Clause 14 of the Permanent Alternate Accommodation Agreements satisfied this test, as distinguished from a generic or limited reference [Paras 8-12].

Decision: Appeals allowed – Common order dated 26.06.2025 of the High Court of Judicature at Bombay set aside – Mr. Vishal Kanade, Advocate, Bombay High Court, appointed as Sole Arbitrator – Arbitrator to make declaration under Section 12 of the Arbitration Act within fifteen days – Fees as per Fourth Schedule to the Arbitration Act.

Criminal Law – Murder – SC/ST Act – Acquittal – Appellant convicted under Sections 302 and 323 IPC and Sections 3(2)(v) and 3(1)(x) of the SC/ST Act by the Special Sessions Judge and sentence confirmed by the High Court of Telangana – On appeal, Supreme Court finds that the prosecution case rested on weak, contradictory and crumbling evidence – Occurrence of the incident itself not proved – Motive and genesis of crime not established – Both courts committed concurrent error in convicting the appellant – Held: Conviction and sentence set aside – Appellant acquitted [Paras 2, 10.2, 10.3].

Prosecution Case – Motive and Background – Deceased Shiva Shankar had earlier eloped with the appellant's younger sister, following which a Panchayat was allegedly held directing the deceased to leave the village – Deceased returned to the village to attend a friend's wedding and was allegedly beaten to death by the appellant with a shabad stone on 12.05.2013 – Appellant belonged to Mudiraj backward class community; deceased to the Mala Scheduled Caste community – FIR initially registered under Section 324 IPC and Section 3(1)(x) SC/ST Act; Sections 302 IPC and 3(2)(v) SC/ST Act added upon death of the deceased [Paras 3, 3.1, 3.1.3, 3.1.4].

Witness Testimony – Hostile Witnesses – Collapse of Prosecution Case – PW3 (Narendar), projected as an eyewitness and the person who allegedly informed PW1 about the incident, turned hostile and categorically denied going to PW1's house or witnessing the incident – His Section 161 CrPC statement was disowned as false – PW4 and PW5 also turned hostile and denied the holding of any Panchayat – The combined effect of hostile evidence directly contradicted and demolished the testimony of PW1 (mother of the deceased), the sole remaining eyewitness – Evidence of PW1, being that of an interested and related witness riddled with contradictions, was found unreliable [Paras 5.1.1, 7.2, 7.3, 7.4, 10].

Interested Witness – Evidentiary Standard – Court reiterated that evidence of partisan or interested witnesses must be appreciated with great care, scrutinising discrepancies, probability and genuineness of the story – When such evidence is further demolished by other reliable evidence on record, it loses all reliability to support the prosecution – Applied to hold PW1's uncorroborated testimony insufficient to sustain conviction [Paras 7.5, 7.6, 8, 8.1, 8.2].

Hostile Witness – Law Restated – Evidence of a hostile witness is admissible and can be relied upon to the extent found dependable and corroborated – Court affirmed the converse principle: evidence of a hostile witness, when credible and consistent with other evidence on record, can equally be utilised to discredit the prosecution case and support acquittal – Applied to hold that the hostile testimony of PW3, read with PW4 and PW5, demolished the fulcrum of the prosecution [Paras 8.3, 8.4, 8.4.1, 8.4.2, 9].

Medical Evidence – Postmortem Report – Evidentiary Value – Postmortem Report (Ex. P8) contained irreconcilable discrepancies as to the date and time of conclusion of postmortem – Explanation offered by PW7 (doctor) that the date was entered in error due to a 24-hour night duty was not credible – Wound Certificate (Ex. P15) did not bear any date – Court reiterated that a postmortem report is not substantive evidence by itself and requires corroboration through oral testimony of the medical expert – Absence of satisfactory explanation by PW7 reduced the evidentiary value of the medical evidence to nil [Paras 5.2.2, 5.2.3, 6, 6.1, 10.1].

Public Place – Independent Witnesses – Non-Examination – Scene of offence was on the main road frequented by quarry trucks and lorries round the clock – No independent witness from the vicinity was examined despite the incident allegedly occurring in a public place – Absence of such witnesses further reinforced the doubt cast on the very occurrence of the incident [Paras 7.1, 10].

Decision: Appeal allowed – Conviction and sentences under Sections 302 and 323 IPC and Sections 3(2)(v) and 3(1)(x) of the SC/ST Act set aside – Appellant acquitted – Appellant to be released forthwith unless required to be detained in connection with any other offence [Paras 10.2–10.4, 11].

Service Law – Appointment – Regular vs. Contractual – Discrimination – Advertisement issued for regular posts of Assistant Professor in Pay Band-III with no mention of contractual appointments – Appellant, fully qualified with Ph.D. and First Class preceding degree, shortlisted and interviewed through the same process as all other candidates – Selection Committee recommended thirteen other candidates for regular appointment while arbitrarily recommending the appellant and one other for contractual appointment at fixed pay of Rs. 40,000/- per month for one year – No reason recorded for differential treatment – Held: Denial of regular appointment patently illegal and unconstitutional – Appellant entitled to regular appointment [Paras 12, 13, 14].

Selection Committee – Scope of Judicial Review – Arbitrary Recommendation – Court acknowledged that in judicial review it does not sit as a court of appeal over views of the Selection Committee – However, the point in issue was not whether reasons recorded were right or untenable, but whether denial of regular appointment against a regular vacancy, after subjecting the appellant to the identical selection process, could be justified at all – Absence of any recorded reason for singular treatment rendered the recommendation unsustainable [Para 13].

Estoppel – Acceptance Under Economic Compulsion – Oral Protest – High Court and Division Bench held that acceptance of contractual appointment without written protest and continued service thereunder barred the appellant from challenging the appointment – Supreme Court disagreed, noting that options for the unemployed are few and acceptance on the assurance of the then Director could not operate as estoppel against an underlying illegality in the selection procedure [Paras 6, 9, 10].

Relief – Moulding of Relief – Continuity Without Financial Benefit – Court directed Respondent No. 2 to issue order of regular appointment within four weeks – Appellant to be placed last in seniority among candidates recommended by the Selection Committee resolution dated 06.04.2013 – Relief moulded to deny financial benefits for the intervening period while granting continuity of service [Para 14].

Decision: Civil Appeal allowed – Orders and judgments of the Single Judge and Division Bench set aside – Respondent No. 2 directed to issue order of regular appointment as Assistant Professor within four weeks – Appellant to be placed last in seniority among the batch recommended on 06.04.2013 – Continuity of service granted without financial benefits for the intervening period – No order as to costs [Para 15].

Motor Vehicles Act 1988 - Notional Income - Engineering Student - Determination of earning capacity - The deceased was a meritorious third-year Mechanical Engineering student with a diploma in Plastic Engineering and AutoCAD certification - Held - Notional income of an engineering student cannot be equated to minimum wages of an unskilled worker - Income assessed at 12000 per month for an accident occurring in the year 2000 - [Paras 23-26]

Motor Vehicles Act 1988 - Future Prospects - Notional Income - Denial by High Court - High Court refused future prospects on grounds that income was notional - Held - Approach is contrary to principles in Sarla Verma and Pranay Sethi - Denial of future prospects and personal/living expense deductions solely because income is notional is erroneous - 40 percent future prospects added as deceased was below 40 years - [Paras 14-15 and 27]

Motor Vehicles Act 1988 - Dependency and Multiplier - Calculation - Monthly income of 12000 plus 40 percent future prospects equals 16800 - One-half deducted for personal and living expenses as deceased was a bachelor - Monthly dependency at 8400 and annual dependency at 100800 - Multiplier of 18 applied as deceased was 22 years old - Total loss of dependency computed at 1814400 - [Paras 13 and 27]

Motor Vehicles Act 1988 - Conventional Heads - Non-pecuniary damages - Enhancement - Awarded compensation under conventional heads as per Pranay Sethi and Magma General Insurance - Sum of 15000 awarded for loss of estate - 40000 for filial consortium - 30000 for funeral expenses considering transportation of the body - [Paras 28-29]

Motor Vehicles Act 1988 - Property Damage - Motorcycle - Assessment of loss - Tribunal and High Court applied high depreciation to a two-year-old vehicle - Held - Loss to be ascertained as per the surveyor report at 25670 instead of 18000 - [Paras 30-31]

Decision: Appeal allowed – Compensation enhanced to 19,25,070 with interest at 7.5 percent per annum from the date of filing till realization – Respondents held jointly and severally liable to pay within eight weeks.

Insolvency and Bankruptcy Code 2016 - Section 61 - Condonation of Delay - Refiling of Appeal - Mandatory requirement of certified copy - Respondent filed appeal on last day of condonable period without certified copy and without applying for one - Refiled after 150 days without curing the defect - Respondent applied for certified copy only months after refiling - Held - Filing an appeal without applying for a certified copy before the limitation period runs out means there was no filing in the eyes of law - A diligent litigant is expected to apply for the copy before the period expires to seek exclusion of time - The appeal was not merely defective but wholly incompetent - NCLAT order condoning delay set aside - [Paras 1-11]

National Company Law Appellate Tribunal Rules 2016 - Rules 14 and 22 - Presentation of Appeals - Curing of defects - Rule 22(2) mandates every appeal be accompanied by a certified copy of the impugned order - Rule 14 enabling exemption does not confer an automatic right to dispense with compliance - Filing an application for a certified copy is an indication of diligence in pursuing litigation - Held - Refiling an appeal without the certified copy or an exemption application is incurably tainted - NCLAT failed to ascertain if the appeal was instituted in accordance with norms before extending indulgence - [Paras 6-10]

National Company Law Appellate Tribunal Rules 2016 - Rule 26 - Curing of defects - Time limit for refiling - Rule 26(2) stipulates 7 days for curing defects - Respondent refiled after 150 days - Held - Even after refiling the appeal remained defective beyond redemption as the certified copy of the NCLT order sought to be impugned was not filed - [Paras 3-6]

Decision: Appeals allowed – Order dated 10.11.2025 passed by the NCLAT set aside – Respondent's appeal rejected as incurably tainted at the threshold.

Criminal Law - Code of Criminal Procedure 1973 - Section 482 - Quashing of criminal proceedings - Principles and Guidelines - Bhajan Lal precedent - Held - High Court failed to exercise inherent power to quash proceedings when allegations even if taken at face value do not constitute any offence - [Paras 10-20]

Indian Penal Code 1860 - Sections 405 and 406 - Criminal Breach of Trust - Entrustment - Fiduciary obligation - Billing for diagnostic test not performed - Held - payment of hospital bill does not create a fiduciary obligation regarding handling of property - foundational ingredients of entrustment and dishonest misappropriation not satisfied - [Para 11]

Indian Penal Code 1860 - Section 420 - Cheating - Dishonest Intention - Deception from inception - Billing error corrected by hospital - Held - billing discrepancy appears to be inadvertence rather than dishonest intention - hospital communicated decision to refund amount upon mistake being pointed out - allegation of cheating misplaced - [Para 12]

Indian Penal Code 1860 - Section 120B - Criminal Conspiracy - Sustainability - Foundational offences - Held - where foundational offences of criminal breach of trust and cheating are non-existent the incidental charge of criminal conspiracy is unsustainable - [Para 13]

Indian Penal Code 1860 - Section 504 - Intentional Insult - High Court Observation - Improper conduct by hospital staff - Held - no occasion for High Court to construe general averments and elevate them to the commission of an offence under Section 504 IPC - [Paras 14-15]

West Bengal Clinical Establishments (Registration, Regulation and Transparency) Act 2017 - Sections 29 and 34 - Clinical Establishments - Service Grievances - Billing Practices - Held - legislative scheme establishes disputes concerning billing or supply of records are primarily deficiencies for which compensation is payable under Section 29 - criminal prosecution under Section 34 not permissible by merely mentioning the section without disclosing how criminal offence was committed - [Paras 16-19]

Decision: Appeals allowed – High Court order set aside – Criminal complaint in Complaint Case No C-533 of 2021 quashed – Quashing of criminal complaint to have no bearing on civil or statutory remedies.

Income Tax Act 1961 - Sections 147 and 148 - Reassessment - Reason to Believe - Tangible Material - Validity of reopening - Held - Reopening of assessment is conditional on the existence of a reason to believe that income has escaped assessment based on tangible material - The Assessing Officer cannot review an assessment or reopen it on a mere change of opinion - In the present case - the original assessment orders for AY 2007-08 and 2008-09 accepted the assessee's declaration at face value without any inquiry into the nature of receipts from the Association of Persons (AOP) - Discovery of the AOP Agreement and Director’s statement during a Survey under Section 133A provided fresh information revealing that the receipts were a share of gross revenue and not profit - This constitutes tangible material and not a change of opinion - Reopening held valid - [Paras 56-84, 106-114]

Income Tax Act 1961 - Section 148 - Validity of Reassessment - Reasons Recorded - Held - The validity of reopening must be tested solely on the basis of the reasons recorded at the time of issuing the notice under Section 148 - Documents not referred to in those reasons cannot be used to justify the reopening as it deprives the assessee of a fair opportunity to file objections - High Court erred in AY 2008-09 by relying on extraneous material (Assessment Orders of the AOP) not mentioned in the reasons recorded - However - since the recorded reasons independently established tangible material - the ultimate conclusion upholding the reopening is maintained - [Paras 85-87, 115-118]

Income Tax Act 1961 - Interpretation of Clauses - Question of Law - AOP Agreement - Share of Revenue vs Share of Profit - Held - Interpretation of a contractual clause which forms the foundation of the rights of parties is a question of law and not of fact - The Court is not bound by the interpretation adopted by the ITAT or High Court in parallel proceedings between the Revenue and the AOP - Literal reading of Clause 7 of the AOP Agreement - supported by the Director’s statement - confirms that the parties intended to share gross revenue - [Paras 93-96, 119-121]

Income Tax Act 1961 - Sections 86 and 67A - Taxability of share from AOP - Diversion of Income by Overriding Title - Held - Profit is the surplus remaining after all expenses are deducted from gross receipts - Under Clause 7 of the AOP Agreement - the assessee was entitled to 35% of gross sale proceeds upfront and insulated from all project expenses - which were burdened on the other member's 65% share - This receipt lacks the essential characteristics of profit and is a business receipt arising from the surrender of development rights - The 35% share was intercepted and diverted to the assessee by overriding title before it could assume the character of income in the hands of the AOP - Consequently - the amount is taxable in the hands of the assessee as business revenue and is not exempt under Section 86 - [Paras 97-105, 122-127]

Decision: Civil Appeal No. 19487 of 2017 (Revenue) is allowed – Civil Appeal No. 744 of 2013 (Revenue) is allowed – Civil Appeal No. 9107 of 2012 (Assessee) is dismissed – Notice for reopening of assessment for AY 2007-08 held valid – Income from AOP held taxable in the hands of the assessee for AY 2008-09 and 2009-10.

Matrimonial Law - Cruelty and Desertion - Professional autonomy of wife - Appellant a qualified dentist established her clinic in Ahmedabad while husband was posted as an Army Officer in Kargil - Family Court held that the wife's failure to reside at the husband's place of posting and opening a clinic without informing him amounted to cruelty and desertion - Held - A well-educated and professionally qualified woman cannot be expected to be confined within rigid boundaries of matrimonial obligations alone - Marriage does not eclipse her individuality nor subjugate her identity - A woman cannot be treated as a mere appendage to the household of the husband - Pursuit of professional fulfilment and responsible parenthood for a child with medical complications are legitimate choices - Characterising such conduct as cruelty or desertion reflects an archaic and regressive mindset - Findings of cruelty and desertion expunged - [Paras 3-7, 20-27, 31]

Code of Criminal Procedure 1973 - Sections 195 and 340 - Perjury - Prosecution in matrimonial disputes - Husband sought prosecution of wife for alleged false statements in maintenance proceedings - Held - Allegations appear instigated by personal vendetta and spiteful approach fuelled by matrimonial acrimony - Grievances stem from a hyper-technical dissection of the material on record - No justifiable reason to direct prosecution - [Paras 35-37]

Matrimonial Law - Irretrievable Breakdown of Marriage - Divorce - Parties living separately with intense acrimony and respondent-husband remarried - Appellant-wife not hopeful of reconciliation - Held - While findings of cruelty and desertion are expunged - the decree of divorce is maintained on the ground of irretrievable breakdown of marriage - [Paras 30-32]

Decision: Civil Appeal partly allowed – Findings of cruelty and desertion expunged – Divorce decree maintained on the ground of irretrievable breakdown – SLP(Civil) No. 28451 of 2024 dismissed.

Constitution of India - Article 145(4) - Supreme Court Rules 2013 - Order XII Rules 1 and 3 - Finality of Judgment - Dictation in Open Court versus Signed Order - Applicants sought declaration that court dictation to the Court-master was binding and the subsequent signed order was invalid - Held - The digitally signed order is the only final version of the Court's decision - Dictation to a Court-master is a rough draft or skeletal framework subject to multiple rounds of correction and refinement in chambers - Refinement of a draft prior to signing is a practical necessity due to docket explosion and does not constitute a material change requiring re-hearing - [Paras 4-9, 15, 27-29]

Practice and Procedure - Miscellaneous Applications - Maintainability - Post-disposal applications for clarification or modification - Applicants sought to rewrite the order under the garb of clarification - Held - Miscellaneous applications in disposed of matters are maintainable only for correcting clerical or arithmetical errors or in rare cases where the order is executory and impossible to implement - Registry directed not to list such applications without a specific averment on oath as required by Circular dated 03.01.2025 - Application dismissed as an abuse of process with exemplary costs - [Paras 13-19, 31]

Judicial Discretion - Power to Alter Judgment - Locus Paenitentiae - Held - A Judge has the right to change their mind and alter a draft judgment at any time until it is formally signed and delivered - Signing is not a mere formality but the act that crystallizes the decision into a full-fledged judgment - While material changes generally require re-hearing, ancillary directions like status quo or disposal of an underlying writ petition after fresh orders are passed by the State do not warrant such procedure - [Paras 10-12, 24-26, 31-32]

Decision: Miscellaneous application dismissed as not maintainable and on merits – Exemplary cost of Rs 2000 each imposed on the Applicants payable to the Supreme Court Legal Services Committee within four weeks.