Public Contracts – Letter of Intent – Legal Nature – A Letter of Intent (LoI) is not a concluded contract and does not create enforceable rights unless conditions precedent are fulfilled – In this case, the LoI expressly stated that award of contract was subject to technical compliance, demonstration, and execution of agreement – Held: No concluded contract arose – Respondent’s reliance on LoI to assert vested rights was misconceived [Paras 11–19].

Judicial Review – Scope in Tender Matters – Administrative discretion in awarding or cancelling tenders must comply with Article 14 – However, courts must not interfere unless the action is palpably arbitrary or irrational – Held: Cancellation of LoI based on justifiable concerns including vendor’s non-compliance with preconditions – No mala fides or arbitrariness established – High Court erred in interfering with executive discretion [Paras 21–24, 49–54].

Contract Law – Doctrine of Legitimate Expectation – Respondent claimed that prolonged communication and performance post-LoI created expectation of final contract – Held: Legitimate expectation doctrine does not arise where LoI is expressly conditional – Anticipated performance at bidder’s risk cannot override unfulfilled preconditions [Paras 55–56].

Administrative Law – Reasons for Cancellation – Absence of reasons in initial cancellation letter not fatal where valid justifications were contemporaneously recorded – Complaint about past blacklisting had been judicially repelled earlier and was not a valid ground – However, repeated non-compliance with key LoI requirements constituted reasonable basis for cancellation – Held: Cancellation order sustainable on second ground [Paras 26–47].

Equitable Relief – Quantum Meruit – Though cancellation upheld, Court directed State to compensate Respondent on quantum meruit basis for actual deliverables and hardware supplied during pilot stage – Held: Respondent entitled to reimbursement for equipment or services utilised – No claim for loss of profit or expectation allowed [Para 59].

Decision: Appeal allowed – High Court’s judgment dated 30.05.2024 quashed – Cancellation of LoI dated 06.06.2023 upheld – State permitted to issue fresh tender – Respondent entitled to equitable reimbursement for utilised assets – No claim for loss of profit or expectation shall lie [Paras 59–60].

Insolvency and Bankruptcy – Section 7 IBC – Procedural Compliance – Affidavit Defect – Application by HDFC Bank under Section 7 IBC was supported by an affidavit dated prior to the date of verification – NCLT rejected the application as non est for not curing defects within time – NCLAT restored the petition but failed to insist on curing the affidavit defect – Supreme Court held that such affidavit-related procedural defects are curable and do not render the application non est – Proviso to Section 7(5)(b) IBC not complied with as notice was not personally served on the applicant bank – Consolidated registry notice was insufficient under IBC standards – Held: Procedural defect did not justify rejection – Respondent to cure defect within seven days and NCLT to proceed on merits [Paras 1-3, 6-7, 10-13, 15, 17, 19-20].

Procedural Law – NCLT Rules and Service of Notice – Rules 28 and 38 – Registry issued consolidated notice listing 26 defective matters including the respondent’s – Supreme Court held that proper statutory notice under IBC must be issued to the applicant, not merely published on the notice board or website – Service on authorized representative does not meet the requirement under Section 7(5)(b) – Procedural rules cannot override the substantive law [Paras 13-16].

Curable Defect – Affidavit in Support – Supreme Court reaffirmed that procedural lapses in affidavit form or date do not automatically nullify the application – Such defects are curable in line with earlier precedents – Rules of procedure should serve justice and not defeat it – Restoration of petition was proper, but direction to cure the affidavit defect should have been made explicit at NCLAT stage [Paras 17-19].

Decision: Appeal partly allowed – Respondent-bank directed to cure defects including affidavit within seven days – NCLT to proceed on merits thereafter – No costs awarded.

Criminal Law – Quashing Of FIR - Rape – Repeated Sexual Acts – Section 376(2)(n) IPC – FIR alleged repeated sexual relations by advocate on false promise of marriage – Supreme Court held that relationship lasted three years and involved mutual affection and voluntary acts – No indication of threat, coercion, or deceit from inception – Held: FIR failed to disclose a pattern of repeated sexual assault as contemplated under Section 376(2)(n) – Allegations lacked essential ingredients of the offence [Paras 20–23, 32–34].

Consent – False Promise of Marriage – Misconception of Fact – Respondent claimed sexual relationship based on false promise to marry – Supreme Court held promise was not shown to be false from inception – Relationship was consensual, continued even after alleged refusal to marry – Court reaffirmed that failed relationship alone does not convert consensual intimacy into rape – Allegations lacked proximate nexus between promise and consent [Paras 24–28, 35–38].

Misuse of Law – Rape Allegation after Relationship Fails – Court expressed concern over trend of failed romantic relationships being retrospectively coloured as rape – Held: Criminal law cannot be used as tool for vendetta or emotional retaliation – FIR was filed months after last alleged incident and after appellant refused to pay ₹1.5 lakhs – Complaint motivated and belated – Quashing warranted to prevent abuse of process [Paras 29–30, 33–34, 40].

Quashing – Prima Facie Offence Not Made Out – Applying Bhajan Lal principles – Allegations, even if taken at face value, did not constitute offences under Sections 376 or 507 IPC – FIR and chargesheet quashed as continuation of proceedings would amount to injustice and misuse of court machinery [Paras 39–41].

Decision: Appeal allowed – High Court order refusing to quash set aside – FIR No. 294 of 2024 and Chargesheet No. 143 of 2024 quashed – Appreciation recorded for Amicus Curiae.

Criminal Law – Criminal Breach of Trust – Cheating – Quashment of Proceedings – Appellant, a former partner in a dissolved firm, sold property previously used by the firm to a third party – Respondent, a co-partner, filed a criminal complaint under Sections 406, 420 and 120B IPC alleging misappropriation and deceit – High Court refused to quash the complaint – Supreme Court held that mere sale of property after firm dissolution with mutual agreement does not constitute entrustment or dishonest misappropriation – No clear averments made in complaint on criminal intent or fraud at inception – Allegations failed to meet ingredients of Section 406 IPC [Paras 21–22].

Criminal Law – Cheating – Ingredients Not Made Out – Supreme Court held that criminal complaint lacked any material or allegations showing fraudulent or dishonest inducement at the time of partnership formation – Complaint did not disclose offence of cheating under Section 420 IPC – Mere breach of contract or civil wrong insufficient for invoking criminal prosecution [Paras 19–20].

Abuse of Criminal Process – Civil Dispute Given Criminal Colour – Complaint filed 16 years after alleged acts – Parallel civil suit already pending – Court held that continuation of criminal proceedings was an abuse of process and motivated by mala fide intent – Criminal law should not be used to settle civil or contractual disputes – Complaint quashed [Paras 24–27].

Quashing of Proceedings – Bhajan Lal Guidelines – Allegations did not disclose any offence even if taken at face value – Case squarely fell within illustrative categories laid down in State of Haryana vs. Bhajan Lal – Continuation of prosecution would amount to harassment and injustice [Paras 26–27].

Judicial Caution – Criminal Law Misuse – Citing Vishal Noble Singh v. State of U.P., Court reiterated the need for judicial vigilance against misuse of criminal justice system for private vendetta – Allegations unsupported by evidence strain judiciary and damage societal trust [Para 28].

Decision: Appeal allowed – Impugned order set aside – Complaint Case No. 3230c of 2013 and all consequent proceedings quashed.

Arbitration – International Commercial Arbitration – Jurisdiction of Indian Courts – Foreign-seated Arbitration – Section 11 Inapplicable – Petition Dismissed – Disputes between Indian petitioner and foreign respondent governed by Benin-seated arbitration under primary Buyer-Seller Agreement (BSA) – Benin designated as seat and governing law explicitly chosen – Held: Arbitration under BSA is international commercial arbitration – Part I of the Arbitration Act, 1996 excluded – Section 11(6) petition not maintainable – Indian courts lack jurisdiction to appoint arbitrator where foreign seat is chosen [Paras 2, 23–26, 30].

Arbitration – Novation and Supersession – BSA not Superseded by Subsequent Contracts – Sales Contracts and HSSAs are Independent – No Composite Agreement – Separate Arbitration Clauses Not Binding on Respondent No. 1 – Sales Contracts with Respondent No. 2 and High Seas Sale Agreements with Respondent No. 3 are limited, transaction-specific contracts – Do not replace or override BSA – No novation established – Arbitration clauses in ancillary contracts cannot be imported to override BSA terms [Paras 27–29].

Arbitration – Finality and Kompetenz-Kompetenz – Prior Benin Arbitration Culminated in Final Award – Fresh Arbitration on Same Dispute Impermissible – Parallel Proceedings Barred – Benin arbitral tribunal constituted under BSA has rendered final award – Petitioner estopped from initiating parallel arbitration in India – Permitting such effort would violate principle of finality, undermine competence of foreign tribunal, and disrupt territorial jurisdiction of seat courts [Paras 31–32].

Arbitration – Anti-Arbitration Injunction – Dismissal by High Court – Findings Operate as Issue Estoppel – Section 11(6) Petition Precluded – High Court of Delhi dismissed suit seeking to injunct Benin arbitration – Held that BSA and Addendum form principal agreement with Benin seat – Findings on separateness of contracts and lack of composite dispute operate as issue estoppel – Petitioner barred from re-litigating identical issues in Section 11 petition [Paras 33–35, 38].

Group of Companies Doctrine – Misplaced Reliance – No Common Intention or Composite Transaction – Mere Corporate Affiliation Insufficient – No evidence of mutual intention to bind non-signatory respondents to BSA – Distinct contracts, parties, and scopes – Doctrine not applicable absent direct participation or shared negotiation of arbitration clause – Mere common ownership or control through TGI Group insufficient [Paras 40–41].

Decision:

Arbitration Petition dismissed – Disputes governed exclusively by arbitration clause in BSA with seat in Benin – Indian courts have no jurisdiction to appoint arbitrator – Prior Delhi High Court findings bar re-litigation – Group of companies doctrine not attracted – No costs [Paras 42–43].

Environmental Law – River Pollution – Judicial Oversight – Massive pollution of Jojari, Bandi and Luni rivers in Rajasthan due to discharge of untreated industrial and municipal effluents – Supreme Court initiated suo moto proceedings following a documentary exposing environmental and public health catastrophe – Found sustained regulatory failure and prolonged administrative apathy – Held: Right to life under Article 21 includes right to safe water and a healthy environment – State's failure amounted to constitutional violation [Paras 1-3, 10-15, 16-19].

National Green Tribunal – Final Order – Interim Stay Modified – Directions issued by NGT on 25 February 2022, based on the P.C. Tatia Committee report, were stayed by earlier orders – Supreme Court clarified that stay shall continue only in respect of adverse remarks and compensation imposed on State entities – Substantive remedial and regulatory directions revived for immediate implementation [Paras 20-21, 27A-B].

Oversight Mechanism – High-Level Ecosystem Oversight Committee – Committee constituted under Chairmanship of Justice Sangeet Lodha (Retd.) with representatives from Pollution Control Boards, State Departments, RIICO, and District Collectors – Empowered to audit, monitor, enforce and supervise implementation of river restoration and pollution control measures – Directed to submit first report within 8 weeks and periodic reports thereafter [Paras 22-24, 27C-J].

Public Health and Constitutional Rights – Article 21 – Environmental degradation found to directly violate right to life, health, dignity and safe drinking water – Court invoked binding precedents in Subhash Kumar, Virender Gaur, M.C. Mehta and A.P. Pollution Control Board II – Held: Protection of environment is a constitutional imperative, not administrative discretion [Paras 10-15, 28].

Administrative Lapses – Accountability of Authorities – State of Rajasthan’s belated action triggered only after Court intervention – Court noted chronic under-capacity in CETPs and STPs and failure to act on years of expert reports – Directed identification of non-compliant authorities and polluting industries for potential prosecution and cost recovery [Paras 8-9, 18, 26].

Decision: Interim stay on NGT’s final order dated 25/02/2022 modified – Remedial and regulatory directions reinstated for full implementation – High-Level Oversight Committee constituted to prepare and execute river restoration blueprint – State directed to ensure logistical, financial and institutional support – Committee to submit first status report by 27/02/2026 – All state agencies, municipal bodies and industries directed to fully cooperate with the Oversight Committee.

Tenancy Law – Eviction for Non-Payment of Rent – Section 12(1) and 12(3) of Kerala Buildings (Lease and Rent Control) Act – Tenant defaulted in rent payment for over five years and failed to comply with Rent Controller's direction to deposit arrears – Appellate Authority stopped hearing of appeal under Section 12(3) – Held: Repetition of Section 12 procedure in appeal not mandatory – Appellate Authority can rely on Rent Controller's findings and is not bound to conduct fresh proceedings under Section 12(1) – High Court erred in holding otherwise – Power under Section 12(3) operates by force of law [Paras 2, 28–32, 38–42].

Rent Control – Appellate Proceedings – Section 18 – Appellate Authority not court of first instance – Not required to redetermine arrears – May exercise discretion to stay eviction or extend time for compliance – However, where tenant has defaulted persistently and no stay of decree exists, no procedural obligation to grant repeated opportunities to comply – Direction to repeat Section 12 process would frustrate object of statute [Paras 30–32, 39, 41].

Statutory Interpretation – Absurdity in Construction – Law must serve justice, not cause injustice – Interpretation requiring landlords to reinitiate eviction procedure in appeal contrary to purpose of rent control legislation – Courts must avoid interpretations producing unjust or irrational results – Procedural formalism must not override statutory objectives [Paras 33–36].

Tenant Conduct – Long-Term Default – Tenant occupying prime commercial premises in Kochi without paying rent for five years – Despite decree in recovery suit and repeated opportunities, tenant failed to deposit arrears – Procedural objections used to delay lawful eviction – Courts must prevent misuse of statutory protections to defeat landlord’s rights [Paras 45–47].

Appellate Authority – No Fixed Time to Grant Compliance – Argument that Rent Control Appellate Authority must provide four weeks to deposit rent held untenable – No such requirement in Act – Once tenant fails to comply with Rent Controller’s direction, appeal may be stopped – Delay of over seven months sufficient to justify action by Appellate Authority [Paras 43–44].

Decision: Appeals allowed – Judgment of High Court dated 22/05/2025 set aside – Orders of Rent Control Appellate Authority dated 19/03/2025 restored – Respondent-tenant directed to vacate premises by 31/12/2025 on filing undertaking within two weeks – Failing which, landlord permitted to proceed with execution forthwith [Paras 48–49].

Arbitration – Execution of Award – Objections by Legal Representatives – Arbitral award dated 12.07.2010 passed in favour of appellant was sought to be executed in Bombay against the father’s estate – Legal representatives (uncle and others) challenged execution by asserting non-party status and independent rights in the property – Held: Since the execution was sought against them as executors under the Will, they are not third parties but legal representatives – They are entitled to notice under Order 21 Rule 22 CPC and may raise objections under Rule 23(2) [Paras 14-18].

Civil Procedure – Order 21 Rule 22 CPC – Mandatory Notice – Execution against legal representatives cannot proceed without notice – Use of “shall” in Rule 22 is mandatory and incorporates principles of natural justice – Any step taken without such notice would be without jurisdiction [Paras 14-15].

Letters Patent Appeals – Maintainability – Held: Orders passed in execution proceedings of an arbitral award trace their source to the Arbitration and Conciliation Act, 1996, which is a complete code – Hence, no appeal lies under Clause 15 of the Letters Patent – Orders of Division Bench admitting and staying Single Judge’s orders are without jurisdiction and liable to be set aside [Paras 19, 22].

Execution Proceedings – Premature Observations – Single Judge made findings that arbitral award is not fraudulent, not against public policy etc., while deciding chamber summons – Supreme Court held such observations, though not determinative, may prejudice legal representatives’ right to raise objections once notice under Rule 22 is served – Execution must proceed only after issuing statutory notice [Paras 20-21].

Decision:

Letters Patent Appeals – Held Not Maintainable – Orders dated 06.03.2018 passed by Division Bench of Bombay High Court in LPAs 320 & 372 of 2015 set aside – Appeals dismissed as not maintainable as orders challenged arose from execution proceedings under Arbitration Act which bars such appeals [Para 22].

Execution Direction – Restored to Statutory Track – Supreme Court directed learned Single Judge to issue notice under Order 21 Rule 22(1) CPC to respondents – On receipt, respondents may raise objections under Rule 23(2) CPC – Such objections to be decided independently and uninfluenced by previous Single Judge’s observations in chamber summons orders [Para 22(i)-(iii)].

Debt Recovery – SARFAESI Act – Priority of Secured Creditor – Section 26E of SARFAESI Act grants statutory priority to debts owed to secured creditors post registration – However, this statutory priority does not override a statutory “first charge” under a welfare statute such as EPF&MP Act – Held: While bank’s secured dues get priority over ordinary debts, they remain subordinate to EPF dues which enjoy statutory first charge under Section 11(2) of the EPF Act [Paras 15, 22-27].

Provident Fund Dues – Statutory First Charge – Section 11(2) of EPF&MP Act creates an overriding statutory first charge on employer’s assets for PF dues including contributions, interest, damages – Court holds such first charge prevails over SARFAESI’s Section 26E priority – Welfare legislation like EPF Act must be purposively interpreted in line with Directive Principles [Paras 14, 17, 23, 26-27].

Workmen’s Dues – No Priority in Absence of Quantification – Unpaid wages of workers, not having statutory first charge and not yet quantified, cannot take precedence over registered security interest of the bank – Bank permitted to sell secured assets; only surplus (after EPF and bank dues) can be made available for workmen’s claims [Paras 28-29].

Statutory Interpretation – Harmonisation of Welfare and Recovery Laws – Though both SARFAESI and EPF Acts contain non-obstante clauses, when one creates a statutory first charge (EPF), it prevails over mere statutory priority (SARFAESI) – SARFAESI being later statute does not override first charge unless expressly stated [Paras 25-27].

Decision:

Priority of Dues – Resolved – Appeals allowed in part – Directions in impugned Bombay High Court judgment modified – Held: Appellant-bank entitled to proceed with auction of secured assets – Sale proceeds must first satisfy statutory dues under EPF&MP Act (including contributions, interest, damages), and only thereafter applied to recover bank’s secured debt [Paras 28-30].

Workmen’s Claims – Not Extinguished – Workers allowed liberty to approach appropriate authority under MRTU & PULP Act to quantify dues – Such quantified dues can be considered only if surplus remains after satisfying EPF and bank claims – Delay in filing such claims not to operate as bar [Paras 29-30].