Civil Law - Jurisdiction of Civil Courts - Andhra Pradesh Civil Courts Act 1972 - Sections 1, 2(a), 3 - Scheduled Areas - Partition Suit - Non-Tribal Parties - The Supreme Court addressed a jurisdictional challenge in a partition suit involving non-tribal parties over land in Scheduled Areas - The Trial Court initially dismissed the suit finding a prior family partition and the suit to be time-barred - The First Appellate Court reversed this holding the properties were joint family properties and that Civil Courts had jurisdiction in Scheduled Areas - However the High Court in Second Appeal set aside the First Appellate Court's judgment concluding that Civil Courts lacked jurisdiction in Scheduled Areas relying on Nagarjuna Gramin Bank v. Medi Narayana and the exclusion of the Andhra Pradesh Civil Courts Act, 1972 from Scheduled Areas via a 1972 notification - The Supreme Court critically analyzed the precedent value of Nagarjuna Gramin Bank v. Medi Narayana determining it did not lay down a binding proposition of law but represented a judicial deference to executive/legislative action lacking a legal analysis of the Act's provisions - Emphasizing that the fundamental intent behind notifying Scheduled Areas and excluding the 1972 Act was to protect vulnerable tribal populations and preserve their customs - the Court reasoned that extending this protective mechanism to subject exclusively non-tribal parties to special procedures not intended for them would demonstrably lack a rational nexus with the stated object and constitute a violation of Article 14 of the Constitution - Held - the Civil Court possessed the requisite jurisdiction to entertain the partition dispute between the non-tribal parties - the High Court's finding to the contrary was erroneous and is hereby set aside - the second appeal is restored to the High Court for decision on its merits in a manner consistent with this judgment - This ruling unequivocally applies to all pending and future cases - It is clarified that if one party to a dispute is a tribal residing in the Scheduled Areas then the Agency Courts would retain jurisdiction - Nagarjuna Gramin Bank v. Medi Narayana is unequivocally not a binding precedent on this point - [Paras 3-7, 9-10, 12-15].

Civil Law - Precedent - Ratio Decidendi - Interpretation - The Court reiterated principles for identifying binding precedent - drawing from Read and others v. The Bishop Of Lincoln Respondent - Abdul Kayoom v. CIT - and State of Gujarat v. Utility Users' Welfare Assn. (Wambaugh's Inversion Test) - a decision constitutes a binding precedent only if its conclusion relies on a legal analysis of statutory provisions - not merely a deference to executive or legislative actions - Held - Nagarjuna Gramin Bank v. Medi Narayana was not a binding precedent for the proposition that Civil Courts lacked jurisdiction over non-tribal disputes in Scheduled Areas as its basis was a high-powered committee's decision not a legal analysis of the Andhra Pradesh Civil Courts Act, 1972 - [Paras 9-9.5, 9.7, 10, 15].

Constitutional Law - Article 14 - Equality before law - Rational Nexus - Scheduled Areas - The exclusion of Civil Courts from Scheduled Areas by the Andhra Pradesh Civil Courts Act, 1972 was intended to protect tribal populations and preserve their customs - When a dispute for partition involves exclusively non-tribal parties in a Scheduled Area applying special procedures meant for tribal protection to them would lack rational nexus with the object sought to be achieved by the law - Such an application would violate the principle of equality before law under Article 14 of the Constitution - Held - in disputes exclusively between non-tribal parties over land in Scheduled Areas Civil Courts retain jurisdiction as the rationale for tribal protection does not extend to non-tribals - [Paras 12.5-13, 13.4, 15].

Civil Law - Limitation - Limitation Act - Article 110 - Partition Suit - The Trial Court dismissed the partition suit citing a bar of limitation under Article 110 which mandates filing after the manager of the family attains majority - but the First Appellate Court found the trial court came to a wrong conclusion - The Supreme Court's decision primarily focused on jurisdiction and restored the appeal for decision on merits by the High Court - implying that limitation and other merits need re-evaluation consistent with the jurisdictional finding - Held - the jurisdictional finding allows for the re-examination of other aspects of the case including limitation by the High Court - [Paras 3-5, 15].

Decision: Appeal allowed – Impugned High Court judgment set aside – Second appeal restored to the file of the High Court for decision on the merits in a manner consistent with this judgment – Parties to appear before the High Court on 24.08.2026 – Hearing expedited

Civil Law - Service Tax - Finance Act 1994 - Sections 65(105)(zzd), 66, 67, 65(105)(zzzza) - Indivisible Turnkey Contracts - Commissioning or Installation Service - Artificial Vivisection - Constitutional Limitations - Respondent-assessee engaged in supplying, installing and commissioning ATMs under indivisible turnkey contracts for a composite consideration - Revenue sought to levy service tax on 33% of the gross consideration, classifying it as "commissioning or installation" service under Section 65(105)(zzd) of the Finance Act, 1994 for the period July 2003 to April 2006 - CESTAT allowed the assessee's appeals, holding that the contracts were indivisible, with the dominant object being the supply of ATMs, and installation/commissioning activities being merely incidental, thus no part of the consideration could be segregated and subjected to service tax without specific statutory authority, relying on Daelim Industrial Co. Ltd. (supra) - Supreme Court examined the statutory framework of the Finance Act, 1994, emphasizing that liability to tax must flow from the charging statute itself - Court noted the constitutional position after Article 366(29A)(b) which allowed segregation of goods component for sales tax in works contracts but not services - Court relied on Commissioner, Central Excise and Customs, Kerala vs. Larsen and Toubro Limited (2016) which held that prior to 01.06.2007, the Finance Act, 1994, lacked both the charging provision and the machinery to vivisect and tax the service element of indivisible composite works contracts - Revenue's administrative attribution of 33% value for "commissioning or installation" without statutory foundation was rejected - Held - The contracts were indivisible turnkey contracts and in the absence of an express legislative mandate in the Finance Act, 1994, during the relevant period (July 2003-April 2006), to vivisect such contracts and tax a notional service component, the levy of service tax was unsustainable - CESTAT's order was correct and consistent with settled legal principles - [Paras 1-10, 18-27, 28-35, 37-40].

Civil Law - Service Tax - Finance Act 1994 - Sections 65(105)(zzd), 66, 67 - Composite Contracts - Legislative Authority - Charging Mechanism - During the period July 2003 to April 2006, the Finance Act, 1994, did not contain any express provision authorizing the vivisection of an indivisible composite turnkey contract to isolate and tax a service element like "commissioning or installation" - A taxing statute admits of neither intendment nor equity, and the existence, extent, and incidence of a tax must be discernible from the language employed by the legislature - Machinery or valuation provisions cannot create or enlarge a charge not enacted by the charging provision - The subsequent introduction of a distinct taxable entry for "works contract service" (Section 65(105)(zzzza)) with effect from 01.06.2007, coupled with a specific valuation mechanism, constitutes a clear legislative recognition that prior existing taxable entries were insufficient to encompass indivisible composite works contracts - Held - No service tax could be levied on a notional portion of an indivisible turnkey contract under the Finance Act, 1994, as it stood prior to 01.06.2007, due to the absence of statutory authority for vivisection and a corresponding charging mechanism - [Paras 20-22, 28-29, 31, 34-36, 39].

Decision: Appeals dismissed.

Civil Law - Compulsory Retirement - Fundamental Rules - Rule 56(j) - Compulsory retirement of a CISF Inspector at 50 years of age - Internal Screening Committee and Review Committee found appellant unfit for retention due to slackening efficiency - High Court upheld the decision - Supreme Court affirmed that compulsory retirement is not punitive, serves public interest, and is based on subjective satisfaction - Judicial review is limited to cases of malafide, no evidence, arbitrariness, or perversity - Entire service record, including uncommunicated adverse remarks and pre-promotion adverse material, must be considered, with greater weight accorded to performance in the immediate preceding years - Appellant's ACRs showed a discernible decline from "Good" to "Average" in the two years preceding retirement, coupled with minor penalties and warnings for negligence and lethargy - The "washed-off theory" (adverse entries prior to promotion losing relevance) does not apply to assessment for compulsory retirement, only for promotion - Standards of efficiency, vigilance, and discipline are paramount for a disciplined force like CISF - Held - No infirmity in the decision to compulsorily retire the appellant - appeal dismissed - [Paras 1-16].

Service Law - Compulsory Retirement - Fundamental Rules - Rule 56(j) - Applicability of "washed-off theory" - Appellant contended that pre-promotion adverse material should not be considered for compulsory retirement - Supreme Court held that the "washed-off theory" where adverse entries prior to promotion are treated as wiped off, applies only to considerations for further promotion and not for assessing suitability for retention in service via compulsory retirement - For compulsory retirement, the entire service record, including old adverse entries, is relevant, though the immediate past record is to be given due credence - Held - Committee was justified in considering the appellant's entire service record including adverse material preceding his promotion - [Paras 10-11].

Service Law - Compulsory Retirement - Judicial Review - Scope - The object of compulsory retirement is to weed out deadwood to maintain high standards of efficiency and integrity in public service - It is not punitive, implies no stigma, and is in public interest - Principles of natural justice have no application - Scope for judicial review is extremely narrow and restricted, limited to grounds of arbitrariness, capriciousness, mala fides, or overlooking relevant materials - Court cannot act as an appellate authority over subjective satisfaction of the employer - Held - The High Court and Supreme Court would not examine the matter as an Appellate Court but can interfere if the order is malafide, based on no evidence, or arbitrary and perverse - [Paras 5-7].

Decision: Appeal dismissed – No specific directions.

Civil Law - Arbitration - Micro, Small and Medium Enterprises Development Act 2006 and Arbitration and Conciliation Act 1996 - Appellant buyer challenging initiation of arbitration - Respondent MSME agreeing during proceedings to appointment of an arbitrator through the Delhi International Arbitration Centre with venue fixed at New Delhi - Supreme Court accepting the fair offer and disposing of the appeal without deciding the question of law - Held - appeal disposed of by referring disputes to arbitration under the Delhi International Arbitration Centre - [Paras 1-6].

Decision: Appeal disposed of – Delhi International Arbitration Centre requested to appoint a suitable arbitrator to resolve the disputes between the parties under the Arbitration and Conciliation Act 1996 – Venue fixed at New Delhi – Appellant to approach the Centre within two weeks – Question of law left open to be considered in an appropriate future case.

Civil Law - Arbitration - Arbitration and Conciliation Act 1996 - Section 11 - Reference to arbitration - Appellants intended to take over Sensorise Digital Services Private Limited and its sister concern under a Memorandum of Settlement dated 09.05.2022 - Respondent No. 1 Ashiesh Shukla was not a signatory to the MoS but executed a Share Purchase Agreement on the same date as a consultant shareholder - Delhi High Court refused to refer disputes against Ashiesh Shukla to arbitration holding that Clause 16 of his Share Purchase Agreement separated his sale of shares from the MoS - Supreme Court found that identically situated parties who executed similar share purchase agreements containing the same clause were referred to arbitration - Held - the performance of obligations under the Share Purchase Agreement was fundamental to the completion of the MoS making the non-signatory a veritable party - appeal allowed - [Paras 1-21].

Civil Law - Non-signatory parties - Arbitration and Conciliation Act 1996 - Section 11 - Doctrine of veritable parties - Conduct role and involvement in the underlying contract - Principles laid down in Cox and Kings Limited and Discovery Enterprises Private Limited - Participation of a non-signatory in the performance of the underlying contract as an indicator of intention to be bound - Held - composite nature of transactions and commonality of subject matter render the claims against the non-signatory interlinked with the issues under arbitration - [Paras 19-20].

Decision: Appeal allowed - Judgment dated 21.10.2024 set aside in so far as it related to Ashiesh Shukla - Disputes pertaining to Ashiesh Shukla referred to the same learned Arbitrator - [Paras 21-23].

Civil Law - Central Excise - Central Excise Act 1944 - Section 2(f) - Central Excise Tariff Act 1985 - Note 6 to Section XVI - Whether kitting and grouping of imported photocopier modules in CKD or SKD condition amounts to manufacture - Assessee imported parts and modules under Tariff Heading 8471 paying customs duty and countervailing duty as complete machines - Assessee performed kitting and grouping at warehouses in Hyderabad and Rampur according to customer specifications - Revenue issued SCN demanding excise duty alleging manufacturing activity under Section 2(f) read with Note 6 to Section XVI - Commissioner confirmed demand - CESTAT set aside order holding that no physical assembly or conversion of incomplete machines took place at warehouses as goods were imported and cleared as complete machines in original packing - Supreme Court dismissed Revenue appeals holding that Revenue failed to establish transformation of goods into a new and distinct commercial product - Held - activity of kitting and pinning different parts together does not amount to manufacture under Section 2(f) or Note 6 to Section XVI - [Paras 1-21].

Civil Law - Interpretation of Statutes - Central Excise Tariff Act 1985 - Rule 2(a) of General Rules for the Interpretation of the Schedule - Scope and applicability - Revenue contended that Rule 2(a) and Note 6 to Section XVI render imported parts equivalent to completed machines - Supreme Court held that Rule 2(a) is merely a rule of classification for incomplete or unassembled articles and does not determine whether a process performed upon an article amounts to manufacture - Held - Rule 2(a) does not answer the question of manufacture - [Paras 10.1, 18, 23].

Civil Law - Burden of Proof - Central Excise Act 1944 - Section 2(f) - Requirement of establishing excisable activity - Revenue levied duty and issued SCN without inspecting assessee premises or capturing any evidence of manufacturing activity - Supreme Court observed that Revenue failed to discharge its burden of proof by presenting best evidence to establish transformation - Held - findings of fact recorded by CESTAT are not perverse and are supported by evidence - [Paras 11.5, 19, 24].

Decision: Appeals dismissed - Orders of the CESTAT setting aside the central excise duty demands and penalties affirmed - [Paras 21-22].

Civil Law - Education Law - T.M.A. Pai Foundation Principles - Subvention Scheme - Unconstitutionality and Retrospective Application - The Single Bench and Division Bench of the High Court of Karnataka had quashed a Central Government communication denying subvention for academic year 2002-03 onwards and directed payment of subvention amounts to the respondent medical college for students admitted up to academic year 2002-03 for the entire 5-year course or till course completion - The High Court based its decision on the subvention scheme floated pursuant to an interim order in TMA Pai Foundation case (1995) which aimed to eliminate capitation fee and promote merit and a clarificatory decision (2003) which it interpreted as giving prospective effect to the final TMA Pai Foundation judgment (2002) - The Supreme Court observed that the 11-Judge Bench in TMA Pai Foundation (2002) had implicitly declared the subvention scheme unconstitutional and overruled Unni Krishnan's case - Such schemes were explicitly made subject to the final outcome of the case - The Supreme Court reiterated that unless expressly stated otherwise, its decisions have retrospective application, and the clarificatory order only addressed statutory enactments needing conformity, not executive schemes - The subvention scheme, being based on executive instructions, ceased to exist upon the pronouncement of the final judgment in TMA Pai Foundation on 31.10.2002 - The obligation for subvention payment was annual, not a lump sum for the entire course - Furthermore, the respondent college failed to provide any pleadings or data to substantiate whether its revenue from tuition fees and other sources was insufficient to cover its expenses after academic year 2002-03 - Held - The orders of the Single Bench and Division Bench of the High Court of Karnataka are set aside to the extent they directed payment of the subvention amount for the entire course of 5 years for students admitted in 2002-03 - The payment of subvention amount beyond the academic year 2002-03 is denied - [Paras 1-4, 8-13.1, 14, A].

Civil Law - Judicial Precedent - Retrospective Application of Supreme Court Judgments - The Single Bench and Division Bench of the High Court held that the Supreme Court's 11-Judge Bench decision in TMA Pai Foundation (2002), which implicitly declared a subvention scheme unconstitutional and overruled earlier precedent, was prospective based on a subsequent clarificatory order (2003) - Held - A decision of the Apex Court, unless it expressly provides its application to be prospective, is settled law to be retrospective in application - The clarificatory decision only required statutory enactments to conform to the final judgment, not executive schemes - The subvention scheme, being an executive instruction, stood nullified from the date of the TMA Pai Foundation judgment - [Paras 9-12.3].

Civil Law - Writ Law - Pleading and Proof - Bharat Singh and Ors. v. State of Haryana and Ors. (1988) 4 SCC 534 - Necessity of Factual Substantiation in Writ Petitions - The respondent-college sought payment of subvention amounts but failed to provide any data or pleadings regarding its financial position, specifically whether its revenues covered its expenditures for the relevant academic years - Held - When a point, even if ostensibly a point of law, requires factual substantiation, the party raising it in a writ petition or counter-affidavit must plead not only the facts but also the evidence in proof of such facts - In the absence of such pleadings, the court cannot adjudicate on the financial need for the subvention and is unable to subscribe to the view of payment beyond the scheme's constitutional validity - [Paras 5, 6-6.2, 7, 13.1].

Decision: Appeal partly allowed – The orders of the Single Bench and Division Bench of the High Court of Karnataka are set aside to the extent they directed payment of the subvention amount for the entire course of 5 years for students admitted in 2002-03 – Payment of subvention amount beyond academic year 2002-03 denied – Leave granted in Civil Appeal No.... of 2026 (arising out of SLP (C) No.9079 of 2011), and its disposal shall be governed mutatis mutandis by this order.

Environmental Law - Solid Waste Management - Solid Waste Management Rules, 2026 - Rules 17, 18 - Institutionalization of Solid Waste Management - Constitutional Courts' role in ensuring effective enforcement of environmental laws - Supreme Court noted its ongoing endeavour to institutionalize solid waste management in India, emphasizing the need for robust enforcement of the Solid Waste Management Rules, 2026 - Court directed the constitution and effective functioning of the Central Implementation Committee as mandated by Rule 18 of the SWM Rules, 2026, to monitor implementation and recommend measures to MoEF&CC - Court observed that environmental governance requires constitutional courts to provide hand-holding to regulatory bodies for their evolution with discipline, creativity, expertise, efficiency and fairness - It specifically noted the mandate of the Central Implementation Committee under Rule 17(2) to prepare guidelines for the imposition and collection of environmental compensation - Held - The Central Implementation Committee has been constituted under Rule 18 read with Rule 38(3) of the SWM Rules, 2026, with the duty to monitor and implement the rules and its decisions having the force of law - The MoEF&CC is directed to take into account judicially evolved principles and existing rules to formulate necessary guidelines for environmental compensation under Rule 17(2) of the Solid Waste Management Rules, 2026 - [Paras 1-8, 24-25].

Environmental Law - Environmental Compensation - Environment (Protection) Act, 1986 - Section 15 - Principles for determination and collection of environmental compensation - Supreme Court examined judicial precedents including M.C. Mehta, Vellore Citizens' Welfare Forum, M.C. Mehta v. Kamal Nath, Research Foundation for Science, Vellore District Environment Monitoring, Delhi Pollution Control Committee, Sterlite Industries (India) Ltd., and Rhythm County - Court formulated eight guiding principles: 1) Compensation is restitutionary, in addition to penalties; 2) Payment continues until damage is reversed; 3) State authorities must value damage and collect compensation; 4) Both tangible and intangible damage must be considered; 5) Liability applies even for imminent harm; 6) Financial capacity, assessment, and restoration costs are factors; 7) Compensation must be proportionate with a rational nexus to pollution; and 8) Courts/tribunals must record reasons - Held - These principles, along with existing rules like Plastic Waste Management Rules, 2016, Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016, and Environment Protection (Manner of Holding Inquiry and Imposition of Penalty) Rules, 2024, shall guide the MoEF&CC in formulating comprehensive guidelines for environmental compensation - [Paras 7-17, 24].

Decision: Appeals listed for further hearing on 29/09/2026 – MoEF&CC directed to file an affidavit on the progress in making and issuing regulations.

Criminal Law - Murder - Indian Penal Code 1860 - Section 302 - Delay in Appeal - Access to Justice - Appeal against conviction for murder resulting in life imprisonment - High Court dismissed 'Jail Memo of Appeal' due to 3157 days delay, despite convict having served 12 years at that time and a total of 22 years currently - Supreme Court expressed deep dismay at High Court's lack of liberal and pro-active approach in condoning delay for marginalized and imprisoned convicts - Coordinate Bench had previously condoned a delay of 3703 days in the Special Leave Petition - Court examined the merits and found a 'pall of incredulity' in the evidence - Eyewitness (PW3) testimony was shaky, highly improbable, and suffered from serious discrepancies, not being recorded under Section 161 CrPC in crucial aspects - Contradictions existed regarding the presence of other bodies and the sequence of events - Investigating Officer (PW13) failed to prepare a scene of crime sketch for three bodies, offered no explanation for accused's arrest, and relied on a confession extracted using "third-degree methods" which is inadmissible under Section 25 of the Evidence Act - Recovery of alleged weapons (stones and brick) by I.O. was rejected by the trial court due to absence of bloodstains and negative FSL report, further contradicted by mahazar witnesses (PW1, PW3, PW8, PW9) who stated items were found in plain view near bodies - No examination of deceased's relatives/co-inhabitants - Post-mortem revealed blunt object injuries - Prosecution failed to prove guilt beyond reasonable doubt - Held - The judgment of the trial court is set aside, and the accused is acquitted - [Paras 2-18].

Criminal Law - Access to Justice - Condonation of Delay - Code of Criminal Procedure 1973 - Section 379 - Appeal against conviction - High Court dismissed 'Jail Memo of Appeal' due to a delay of 3157 days, for a convict who had already undergone 12 years of sentence at the time of impugned order and a total of 22 years - Supreme Court emphasized that Constitutional Courts must adopt a liberal and pro-active approach to condone delay, however large, when a convict challenges an order of conviction and sentence that deprives them of liberty - Delay occasioned in filing an appeal by marginalized sections must be viewed sympathetically - Held - Access to justice must not elude marginalized sections, especially convicted and imprisoned persons - [Paras 2-4].

Evidence Law - Eyewitness Testimony - Indian Evidence Act 1872 - Section 3 - Reliability of testimony - Sole eyewitness (PW3) testimony for murder conviction found shaky, highly improbable, and contradictory - Key details mentioned in deposition (e.g., accused screaming 'to kill somebody', taking a pot, witnessing one murder) were not recorded in her statement under Section 161 CrPC - Discrepancies regarding informing others, immediate report of incident, and seeing other dead bodies - Other 'res gestae' witnesses (PW1, 2, 4, 7, 9) had different versions of hearing PW3's account - Held - Eyewitness testimony, though capable of sustaining conviction alone, must be believable, credible, consistent, and inspire confidence, not when serious discrepancies raise reasonable doubt - [Paras 10, 14-15, 17].

Evidence Law - Confession - Indian Evidence Act 1872 - Section 25, 27 - Admissibility and reliability - Investigating Officer (PW13) spoke of a confession made by the accused after arrest - Witness (PW8) stated police beat the accused to extract confession - Recovery of alleged weapons (stones, brick) from accused found unreliable as trial court rejected it due to lack of bloodstains and negative FSL report - Mahazar witnesses (PW1, PW3, PW8, PW9) contradicted I.O. on the location of recovered items, stating they were in plain view near bodies, not pointed out by accused - Held - Confession to police is inadmissible under Section 25 of the Evidence Act; recovery under Section 27 cannot be relied upon if extracted through "third-degree methods" and lacking corroboration - [Paras 12-13].

Criminal Law - Remission Policy - Premature release - Appellant's application for remission rejected six times, with the last rejection on 19.09.2025, after 22 years of actual imprisonment - Both Policy for 2000 and current Policy (2022) were beneficial for his premature release - Deputy I.G. of Prisons noted that reconsideration by State Sentencing Review Board (SSRB) would only be after one year from the last consideration - Prior rejections cited apprehension of law and order situation - Held - Apprehension of law and order cannot, in every circumstance, be a cause not to judiciously exercise the power of remission - [Paras 6-7].

Decision: Appeal allowed – Judgment of the trial court set aside, and the accused is acquitted – The personal bond on which the accused was released stands cancelled – District Legal Services Authority, Koraput, State of Odisha, directed to attempt rehabilitation or resettlement for the appellant, with assistance from the District Administration headed by the District Collector.