Criminal Procedure – Quashing of Summons under Prevention of Money Laundering Act (PMLA) – Appellants sought quashing of summons issued by Directorate of Enforcement (ED) under Section 50 PMLA – Supreme Court held that the provisions of PMLA, being a self-contained code, prevail over the Code of Criminal Procedure (CrPC) – Summons issued under Section 50 are valid, and appellants are bound to appear – No territorial jurisdiction limit under Section 50, PMLA [Paras 1-3, 13-21].

Jurisdiction and Procedure – ED’s Summons – Appellants challenged summons requiring them to appear in Delhi despite their domicile being Kolkata – Court held that Section 50 PMLA does not provide for territorial limitations, and proceedings under PMLA are governed by special procedure overriding CrPC – Summons for personal appearance in Delhi upheld – Appellants required to comply [Paras 5-10, 20-21].

Constitutional Law – Right to Life and Liberty under Article 21 – Challenge to Summons under PMLA based on violation of Article 21 rejected – Court found procedure under PMLA to be fair and reasonable – Summons for personal appearance in inquiry does not violate rights under Article 20(3) or Article 21 of the Constitution [Paras 18-19].

Decision – Dismissal of Appeals – Held – Appeals dismissed as meritless – Summons issued under Section 50 PMLA are legally valid, and appellants are bound to comply – No constitutional rights violated, and procedural safeguards under PMLA upheld [Paras 22-23].

Company Law – Appeal under Section 423 of the Companies Act, 2013 – Rectification of the Register of Members – Allegation of Oppression and Mismanagement – The Supreme Court set aside the dismissal of the appellants’ claims by the NCLT and NCLAT. The appellants had sought rectification of the Register of Members under Sections 59 and 88 of the Companies Act, 2013, alleging fraud and oppression in the company's management by erasing their shareholding. The Court emphasized that the NCLT and NCLAT failed to properly examine the documentary evidence, including share certificates and financial transactions, requiring further inquiry into factual issues. [Paras 1-37]

Jurisdiction – Scope of NCLT’s Summary Jurisdiction – Adjudication of Fraud Claims – Powers under Section 59 of the Companies Act, 2013 – The Court reiterated that while NCLT has summary jurisdiction, it must thoroughly examine factual disputes, especially where claims of fraud and fabricated documents are involved. The case law under Section 59 allows NCLT to adjudicate fraud issues when clear factual evidence is presented. Ignoring material evidence without full inquiry was deemed improper. [Paras 23-35]

Limitation – Mixed Question of Fact and Law – The Court held that the question of limitation, being a mixed question of law and fact, must be fully examined in light of the events and the date of knowledge of the appellants regarding the alleged fraudulent exclusion of their names from the Register of Members. NCLAT’s summary dismissal of the claim as time-barred was erroneous. [Paras 12, 18]

Decision – Appeal Allowed – The Supreme Court restored the appellants' Company Petition to the NCLT for fresh consideration on merits, directing that proper inquiry into the evidence be undertaken. The judgments of both the NCLT and NCLAT were set aside. [Paras 34-37]

Arbitration – Application under Section 11(6) of the Arbitration and Conciliation Act, 1996 – Appointment of Arbitrator – Group of Companies Doctrine – Scope of Court's powers at referral stage under Section 11(6) – Prima facie determination of arbitration agreement – Non-signatory respondent – Referral of complex issues to arbitral tribunal for final determination – Court appointed arbitrator to adjudicate disputes arising from multiple interlinked agreements despite objections on jurisdiction and involvement of a non-signatory party. [Paras 18-35]

Referral to Arbitration – Section 11(6) of Arbitration Act – Supreme Court held that at the stage of appointing an arbitrator, the court's role is limited to ascertaining prima facie existence of an arbitration agreement – Any objections regarding the involvement of non-signatory parties to be determined by the arbitral tribunal – Principle of "competence-competence" reaffirmed. [Paras 31-34]

Impleadment of Non-Signatory – Complex issues of joinder of non-signatory party referred to arbitral tribunal – Prima facie determination of the existence of an arbitration agreement – Tribunal to decide the extent of involvement of the non-signatory respondent, applying legal doctrines and considering the available evidence. [Paras 34-35]

Decision – Appointment of Sole Arbitrator – Petition allowed – Held – Justice Mohit S. Shah, former Chief Justice of Bombay High Court, appointed as the sole arbitrator to adjudicate the disputes – All rights and contentions of the parties, including the jurisdictional objections regarding non-signatory respondents, left open for the arbitral tribunal to decide. [Paras 35-36]

Service Law – Termination – Probationer – Whether termination of a judicial officer during probation can be retrospectively reinstated – Held, once the termination order is set aside, the employee is deemed to be in service and is entitled to reinstatement and back wages – Supreme Court directs the High Court and the State to reinstate the appellant into service and award full salary from April 20, 2022, to the date of fresh termination on April 2, 2024, along with 50% back wages for the period from December 17, 2009, to April 19, 2022 – [Paras 1-45].

Judicial Process – Delay in Compliance with Court Orders – The Supreme Court expressed concern over the delayed action taken by the High Court and the State in not reinstating the appellant after its earlier judgment, despite setting aside his termination – Court notes that no decision was taken to reinstate the appellant or pay arrears during this period, warranting relief – [Paras 12-22].

Administrative Action – Reconsideration by the Full Court – The Full Court of the High Court, when reconsidering a termination, must offer detailed reasoning rather than reiterating prior conclusions – The lack of a speaking order and failure to give proper consideration are noted as serious lapses – [Paras 23-30].

Back Wages – Entitlement of Employee after Set-Aside of Termination – The Supreme Court clarifies that while reinstatement entitles an employee to salary from the date of the Court’s judgment, partial back wages (50%) are appropriate for the period preceding the judgment, reflecting fairness and balancing of interests – [Paras 33-44].

Consumer Law – Deficiency in Service – Real Estate Dispute – The appellant sought a refund for failure by the Agra Development Authority (ADA) to provide possession of a residential apartment due to construction deficiencies, including the absence of a completion certificate and firefighting clearance. The NCDRC granted a partial refund but limited interest to the date of filing the complaint. The Supreme Court held that ADA's failure to obtain the necessary certificates rendered its offer of possession legally invalid, and thus the appellant was entitled to further compensation for the delay in possession [Paras 1-20].

Limitation and Jurisdiction in Consumer Disputes – ADA argued that the complaint was time-barred and beyond the pecuniary jurisdiction of the NCDRC. The Court rejected these arguments, applying Sections 18 and 19 of the Limitation Act, which extended the limitation period due to ADA's acceptance of payments and issuance of reminders. Further, the Court held that the NCDRC had pecuniary jurisdiction as the claim, including compensation for mental agony and harassment, exceeded Rs. 1 crore [Paras 21-40].

Compensation for Delay in Possession – The Court found that both the appellant and ADA were responsible for delays in the transaction. While the appellant delayed in making payments, ADA failed to provide the completion certificate, making its offer of possession invalid. As such, the Court awarded additional compensation of Rs. 15,00,000 to the appellant, in addition to the refund and interest from the date of the complaint [Paras 41-50].

Decision: Appeal of the appellant partly allowed – Refund of the deposit along with 9% interest per annum from the date of the complaint, plus additional compensation of Rs. 15,00,000.

ADA's appeal dismissed – The arguments regarding limitation and pecuniary jurisdiction were found to be without merit.

Judicial Appointments – Elevation to High Court – Writ petition under Article 32 challenging the process of reconsideration for elevation of two senior-most District and Sessions Judges in Himachal Pradesh High Court – Petitioners argued against the appointment of officers junior to them without reconsideration of their names as directed by the Supreme Court Collegium – High Court Chief Justice's individual decision found inconsistent with collective decision-making required by Collegium system – Court emphasized the necessity of plurality in decision-making for judicial appointments – Writ petition allowed, directing fresh reconsideration of petitioners' names for elevation as Judges of the High Court [Paras 1-32]. 

Judicial Review – Limited scope – Court reaffirmed the limited scope of judicial review in matters of judicial appointments – Distinction between 'eligibility' and 'suitability' emphasized – Judicial review limited to assessing 'eligibility' and 'lack of effective consultation' while 'suitability' remains non-justiciable [Paras 11-17]. 

Collegium Process – Collective Decision-Making – Supreme Court reiterated that elevation for judgeship in a High Court requires collective decision-making by the High Court Collegium – Chief Justice acting alone cannot make decisions regarding reconsideration for elevation – Lack of plurality in the reconsideration process vitiated the decision [Paras 18-32]. 

Decision – Petition Allowed – Held – The High Court Collegium to reconsider the names of the petitioners for elevation to the High Court in compliance with the Supreme Court Collegium’s decision and the Law Minister’s communication – The individual decision of the Chief Justice found procedurally and substantially flawed – Writ petition allowed [Para 32]. 

Child Custody – Habeas Corpus Petition – Custody of Minor Child under Article 226 – Supreme Court’s Decision to Restore Custody to Maternal Family – Custody to be decided under Guardians and Wards Act (GW Act) – The Supreme Court held that the Madhya Pradesh High Court erred in ordering the custody of a minor child (2 years, 7 months old) to her father and paternal grandparents through a Habeas Corpus petition, without considering the child’s welfare. The Court stressed that such matters should be decided under the GW Act through appropriate proceedings. Interim custody remained with the maternal family pending further orders from a competent court. Access was granted to the father and grandparents under supervised conditions [Paras 1-16].

Welfare of the Child – Best Interest Doctrine – The Court reiterated that the welfare of the minor child should be the paramount consideration in custody disputes. The High Court’s focus on the father’s right as the natural guardian, without considering the child’s welfare, was set aside. The Court stressed that child custody could not be mechanically determined based on legal rights alone, and humanitarian considerations must guide the Court’s decision-making [Paras 6, 9-10].

Decision – Remand and Dismissal of Habeas Corpus Petition – The Supreme Court dismissed the Habeas Corpus petition but allowed the appeal partially by restoring interim custody to the maternal family and directing the parties to seek appropriate remedies under the GW Act. Access to the father and grandparents was allowed under the supervision of the District Legal Services Authority. The arrangement was made flexible to ensure the best interests of the child and would be subject to modification by the competent court [Paras 14-16].

Appeal partly allowed; High Court's order set aside. The Court directed the concerned parties to file custody petitions under the GW Act, while maintaining interim arrangements for supervised access to the child by her father and grandparents [Para 15].

Service Law – Repatriation of Employees – After the bifurcation of Andhra Pradesh, APSRTC employees were repatriated to their parent zones under TSRTC – High Court quashed the repatriation orders and directed permanent allocation to deputational posts – Supreme Court held that the High Court’s reliance on Section 77 of the Andhra Pradesh Reorganisation Act, 2014 was misplaced – Section 82 governs the allocation of employees of Public Sector Undertakings (PSUs), and guidelines for allocation had already been finalized [Paras 9-14].

Section 82 of the Andhra Pradesh Reorganisation Act – Governs allocation of PSU employees post-bifurcation – APSRTC’s Agenda Note of August 2017 clarified that Class III and Class IV employees should be allocated to the respective corporations where the region falls – Supreme Court affirmed that the respondents, who were deputed temporarily, should report to their parent zones under TSRTC as per these guidelines [Paras 11-13].

Judicial Review – High Court erroneously applied principles related to government employees under Section 77 to PSU employees – Supreme Court set aside the High Court’s judgment and directed that the employees continue their service in their parent zones [Paras 10-17].

Decision: Appeal allowed – High Court judgment dated November 21, 2019, quashed – Repatriation orders upheld – Respondents to report to their parent zones under TSRTC as per the finalized guidelines [Paras 17-18].

Suo Motu Criminal Revision – High Court Powers Under Section 397 CrPC – The petitioner challenges the Madras High Court’s decision, which invoked its suo motu criminal revision powers under Section 397 of the CrPC, to interfere with a final closure report filed by the DVAC – Held: The High Court overstepped by effectively directing the framing of charges, a power that lies with the Special Judge under Section 227 CrPC – The closure report should be weighed along with earlier investigation reports, and the Special Judge is to decide whether to proceed with the trial or discharge the accused [Paras 2, 7-10].

Assignment of Case – Violation of Madras High Court Rules – The petitioners argued that, as per Rule XIV of the Madras High Court Rules, the suo motu revision should have been assigned to a Division Bench, but it was handled by a Single Judge – Held: This alleged violation must be addressed, as the Chief Justice is the Master of the Roster and assignment to the Division Bench would be necessary for MPs/MLAs cases [Paras 4-5].

Section 227 CrPC – Powers of the Special Judge – The petitioners submitted that the Special Judge is required to consider whether sufficient grounds exist to frame charges based on the materials presented, including the closure and earlier investigation reports – Held: The High Court's direction to the Special Court to frame charges bypassed this procedure, undermining the Special Judge’s role under Section 227 CrPC [Para 6].

Reports Under Section 173(8) CrPC – Reliance on Vinay Tyagi Precedent – The petitioners relied on the Vinay Tyagi v. Irshad Ali decision, which held that all investigation reports, including supplementary reports under Section 173(8), must be considered cumulatively before framing charges – Held: The High Court erred by treating the final closure report as a supplementary report and directing the Special Court to frame charges without proper consideration of the reports [Paras 9-10].

Decision:

Notice issued, returnable in four weeks. Dasti notice to be served on the Standing Counsel for the State. In the meantime, the operation of the impugned judgment of the Madras High Court is stayed.