MSME Restructuring Obligations – Notification Compliance – Appellants, registered MSMEs, challenged the High Court’s ruling which stated that Banks/NBFCs were not obliged to follow restructuring processes as per the Notification dated 29^th May, 2015, unless MSMEs applied for it – Supreme Court held that the Notification and RBI Directions have statutory force, requiring compliance before classifying MSME accounts as NPAs [Paras 1-19].

Banking Regulation Act and SARFAESI Act Interplay – Directions issued by RBI under Sections 21 and 35A of the Banking Regulation Act are mandatory – Banks must follow the RBI’s Directions and the MSMED Act Notification for MSME account classification and restructuring before initiating actions under the SARFAESI Act [Paras 13-19].

Notification and MSME Rights – Notification dated 29^th May, 2015 mandates banks to identify stress in MSME accounts and follow specific procedures for revival and rehabilitation – MSMEs must provide authenticated documents to avail benefits [Paras 10-17].

High Court Decision Overturned – High Court’s order dismissing writ petitions without addressing merits and factual aspects is set aside – Appellants may pursue alternative legal remedies [Paras 18-19].

Decision: Appeals allowed – High Court’s order set aside – Appellants granted liberty to seek alternative legal remedies.

Criminal Law – Vicarious Liability – Complaint Quashing: Complaint filed by National Housing Bank alleging violations under Section 29A of the National Housing Bank Act against the company and its directors – High Court quashed the complaint for non-compliance with the requirements similar to those in Section 141 of the Negotiable Instruments Act – Supreme Court held that the complaint lacked specific averments regarding the directors’ responsibility for the company’s conduct, as required under Section 50 of the National Housing Bank Act – Complaint quashed against directors but maintained against the company and its managing director [Paras 1-9].

Interpretation of Statutes – Section 50 of the National Housing Bank Act – Pari Materia with Section 141 of the NI Act: Court emphasized that specific averments must be made in the complaint to establish that directors were responsible for the conduct of the business at the time of the offence – Absence of such averments renders the complaint insufficient to attract vicarious liability [Paras 4-7].

Managing Director’s Liability: Complaint upheld against the managing director based on his position and inherent responsibilities for the company’s business – Managing director’s role assumes responsibility, thereby meeting the statutory requirements [Para 8].

Decision: Appeal partly allowed – Complaint quashed against directors (third to seventh accused) but maintained against the company and its managing director (first and second accused) – Complaint to proceed according to law against the remaining accused [Para 9].

Legal Profession – Enrolment Fees – Challenge to State Bar Councils (SBCs) charging fees in excess of the statutory enrolment fee prescribed under Section 24(1)(f) of the Advocates Act – Supreme Court held that miscellaneous fees charged by SBCs in addition to enrolment fees are part of the enrolment fee and cannot cumulatively exceed the amount specified in Section 24(1)(f) – Declared all fees charged at the time of enrolment, including application, processing, postal, police verification, ID card, administrative, and photograph fees, must be within the prescribed enrolment fee limits [Paras 1-67].

Delegated Legislation – SBCs and Bar Council of India (BCI) rule-making powers – Supreme Court reiterated that SBCs and BCI cannot invoke rule-making powers to prescribe fees beyond those stipulated by substantive provisions of the Advocates Act – BCI resolution fixing revised enrolment fees for general and SC/ST candidates was held to be devoid of legal authority [Paras 30-67].

Constitutional Law – Right to Practice – Article 19(1)(g) – Imposition of exorbitant enrolment fees by SBCs constitutes an unreasonable restriction on the right to practice law – Declared such fees manifestly arbitrary and violative of Article 14 and 19(1)(g) of the Constitution – Directed SBCs and BCI to devise methods to charge reasonable fees for services rendered post-enrolment rather than burdening law graduates at the entry stage [Paras 60-100].

Decision: Writ Petition allowed – Orders of SBCs charging fees in excess of those stipulated under Section 24(1)(f) set aside – Directed SBCs to adhere strictly to statutory enrolment fee limits – Judgment to have prospective effect, no refund required for fees collected before the date of judgment [Para 108-111].

Real Estate Development – Slum Rehabilitation – Appeal against termination of development agreement for slum redevelopment project – Appellant failed to complete project within stipulated time – Prolonged delays attributed to litigation, environmental clearance, non-cooperation of slum dwellers, and financial instability – Supreme Court upheld termination – Emphasized statutory duty and accountability of authorities under Section 13 of the Maharashtra Slum Areas Act – Directed performance audit of statute [Paras 1-30].

Delays and Justifications – Breakdown of Delays – Delay from 2003-2011 due to litigation with competing developer – Delay from 2011-2014 attributed to obtaining environmental clearances – Delay from 2014-2019 caused by non-cooperation of slum dwellers and issues with draft development plan – Supreme Court rejected justifications for delays, holding appellant accountable [Paras 16-21].

Statutory Duty and Accountability – Sections 12 and 13 of Maharashtra Slum Areas Act – Duty of SRA and CEO to ensure timely completion of slum rehabilitation projects – Accountability of authorities emphasized – Supreme Court directed performance audit to assess and improve implementation [Paras 7-13, 23-27].

Financial and Technical Capabilities – Appellant’s Financial Instability – Examination of financial agreements with third parties – High Court and AGRC findings on financial instability upheld – Supreme Court found financial instability detrimental to project completion [Paras 20-22, 28-30].

Maintainability of Proceedings – Complaints and Show Cause Notice – Withdrawal of complaints by some members of managing committee – Issue of authorisation for filing appeal – Supreme Court held proceedings maintainable despite withdrawal of complaints – AGRC and SRA’s suo motu power under Section 13(2) upheld [Paras 21-22, 29-31].

Judicial Review – Facilitating Access to Justice – Role of Judiciary in Ensuring Effective Functioning of Statutes – Supreme Court highlighted need for judicial facilitation of systemic reforms – Directed Bombay High Court to initiate suo motu performance audit of Maharashtra Slum Areas Act [Paras 31-42].

Decision: Appeal dismissed – Conviction and sentence affirmed – Costs quantified at Rs. 1,00,000/- payable to Supreme Court Mediation and Conciliation Project Committee – Directed Bombay High Court to constitute a bench for performance audit of statute.

Consumer Law – Real Estate – Refund of Deposited Amount – The appeal arose from an order directing the respondent-developer to refund the entire sum deposited by the appellants with interest – Commission initially ordered 9% interest – Supreme Court modified the interest rate to 12% per annum from the date of deposit till refund – Developer's claim of force majeure due to delay in sanctioning plans rejected – Developer directed to pay within three months [Paras 1-11].

Consumer Protection – Interest Rate on Refund – Appellant argued that interest rate disparity was unjust – Agreement allowed 24% interest for delayed payment by buyer and 12% for delayed construction by developer – Supreme Court found Commission's award of 9% insufficient, increased to 12% in accordance with the agreement's terms [Paras 6-10].

Decision: Appeal partly allowed – Refund with interest at 12% per annum from deposit date till refund – Payment to be made within three months [Para 10].

Pension Eligibility – Appellants, former employees of Uttar Pradesh Roadways, claimed pension rights post-absorption into the UPSRTC – Initial rulings denied pension citing their non-pensionable status at the time of absorption – Supreme Court analyzed the application of various government orders (GOs) and service regulations – Rejected appellants’ claims based on lack of pensionable status under GO dated 28.10.1960 and adherence to the provident fund scheme.

Service Conditions Post-Absorption – Examined GOs dated 07.06.1972 and 05.07.1972 regarding absorption terms – Determined these GOs did not alter pension eligibility, maintaining distinction between State Government employees and Roadways employees – Pension rights for State Government employees absorbed in UPSRTC reaffirmed, excluding non-pensionable Roadways employees.

Non-Pensionable Post Service – Noted that appellants were not on pensionable posts as per Article 350 of U.P. Civil Service Regulations and relevant GOs – Highlighted that they received provident fund benefits upon retirement, thus not entitled to subsequent pension claims – Emphasized the finality of provident fund as substitution for pension benefits.

Decision – Appeals dismissed – Upheld High Court’s decision denying pension to appellants based on consistent application of service regulations and GOs – Confirmed that appellants not holding pensionable posts at time of absorption and retirement could not retroactively claim pension.

Negotiable Instruments – Interim Compensation – Interpretation of ‘Drawer’ – High Court’s judgment held that authorized signatories of cheques cannot be considered as ‘drawers’ under Section 143-A, NI Act – Supreme Court affirms this interpretation, emphasizing the clear statutory language and legislative intent – Liability for interim compensation rests solely with the company as the ‘drawer’ – Directors or authorized signatories acting on behalf of the company are not personally liable [Paras 1-36].

Statutory Interpretation – Penal Provisions – Strict interpretation of penal statutes – The principle of statutory interpretation requires that penal provisions be read strictly – Extensions of liability under Sections 141 and 143-A of the NI Act must align with clear statutory language and legislative intent – Courts must avoid expansive interpretations that impose unjust liability [Paras 28-35].

Vicarious Liability – Corporate Law – Separate Legal Identity – Distinction between a company and its authorized signatories – Authorized signatories act on behalf of the company but do not assume the company’s legal identity – Vicarious liability under Section 141, NI Act is contingent on specific statutory conditions [Paras 30-34].

Decision: Appeals dismissed – High Court’s judgment upheld – Authorized signatories are not ‘drawers’ under Section 143-A, NI Act – Liability for interim compensation is confined to the company [Para 36].

Negotiable Instruments Act – Interpretation of Sections 138 and 143-A – Supreme Court affirms Bombay High Court’s interpretation that the term “drawer” in Section 143-A of the NI Act refers solely to the issuer of the cheque and does not include authorized signatories of the company. The Court held that the primary liability under Section 143-A is on the drawer, which is typically the company itself, and this liability does not extend to the individual signatories acting on behalf of the company. This interpretation aligns with the principles of vicarious liability under the NI Act and ensures that the legal status of signatories remains distinct from that of the company. [Paras 13-17, 28-34].

Vicarious Liability – Corporate Law – Supreme Court reaffirms that vicarious liability under Section 141 of the NI Act is applicable only when specific statutory conditions are met, emphasizing that the legal identity of a company is distinct from its authorized signatories. The liability of authorized signatories is secondary and contingent upon the company’s failure to fulfill its obligations. The Court applied strict interpretation of penal statutes, rejecting an unjust expansion of liability beyond what is explicitly provided by law. [Paras 28-31].

Decision – Dismissal of Appeals – Held – The Supreme Court dismissed the appeals, upholding the Bombay High Court’s judgment that the company, as the “drawer,” is the only party liable for interim compensation under Section 143-A. The Court ruled that extending liability to authorized signatories would contradict legislative intent and established judicial precedents. [Para 35].

Public Trust Doctrine – Environmental Protection – Application of public trust doctrine to protect natural resources – State's duty to preserve environment for public use and enjoyment – Decision for environmental release of GM mustard hybrid DMH-11 quashed due to procedural lapses and lack of scientific certainty on impacts [Paras 42.10-42.22].

Right to Safe and Healthy Environment – Violation – Decision for GM mustard release found to violate Article 21 – Lack of comprehensive risk assessment and failure to adhere to the precautionary principle – Directions issued for future decision-making processes [Paras 43.1-44.3].

Precautionary Principle – Importance in Environmental Decisions – Emphasis on the need for anticipatory action to prevent environmental harm – Detailed examination of risk assessments and scientific studies required before environmental release of GM crops – Decision for GM mustard release quashed for not adhering to precautionary principle [Paras 45.1-47.6].

Environmental Governance – Role of Parliamentary Committees – Importance of scrutiny by legislative bodies – Recommendations of Parliamentary Standing Committees on Agriculture and on Science and Technology, Environment and Forest to be followed in GM crop regulation [Paras 48.1-48.10].

Conclusion – Writ petitions allowed – Environmental release of GM mustard hybrid DMH-11 quashed – Directions for a comprehensive national policy on GM crops and reforms in GEAC composition issued – Need for transparency, accountability, and public participation emphasized [Para 50-51].