Service Law – Dearness Allowance and Dearness Relief – Differential Rates – Article 14 of the Constitution – State of Kerala enhanced DA for serving KSRTC employees by 14% (to 112%) and DR for pensioners by only 11% (to 109%) with effect from March 2021 – Pensioners challenged the differential rates as discriminatory – Single Judge dismissed the writ petitions holding serving employees and pensioners constitute different classes – Division Bench reversed, holding the differential rate violates Article 14 since the object of both DA and DR is to mitigate hardship caused by inflation which equally affects serving and retired employees – Held: Fixing different rates of enhancement of DA and DR, when both are linked to inflation and serve a common object, has no rational nexus to the object sought to be achieved and is arbitrary and discriminatory; High Court's finding upheld; appeals dismissed [Paras 20–29].

Equality – Article 14 – Twin Test of Classification – Classification is permissible only if (i) it is founded on an intelligible differentia distinguishing those grouped from others, and (ii) the differentia has a rational nexus with the object sought to be achieved – Where DA and DR both serve the common object of mitigating inflationary hardship, and inflation hits serving and retired employees with equal force, differentiation qua the rate of enhancement has no rational nexus to that object – Financial crunch may justify deferral of disbursement or separate implementation dates, but once a decision is taken to provide and increase DA/DR based on inflation, fixing a higher rate for serving employees than for pensioners is arbitrary and violative of Article 14 [Paras 22–28].

Decision: Appeals dismissed – High Court's judgment affirmed – No order as to costs.

Service Law — Daily-Wage Labourers — Regularisation — Compliance with Tribunal Directions — Appellants engaged as daily-wage gang labourers at ISRO's Mahendragiri Unit between 1991 and 1997 for sporadic work such as loading, unloading, and shifting of materials — Tribunal by order dated 9th March, 2010, directed respondents to frame a scheme or ad-hoc rules by creating requisite number of posts for engaging such persons on a permanent basis within six months — Said directions attained finality upon dismissal of challenge by High Court and this Court — Respondents framed "Gang Labourers Scheme, 2012" providing only for temporary engagement without creation of posts — Held: The Scheme is inconsistent with the Tribunal's directions; the mandate was not merely to regulate engagement but to create sanctioned posts and engage such persons on a permanent footing — Scheme set aside to that extent — Respondents directed to regularise services of appellants with effect from 9th September, 2010 within four weeks [Paras 8–25, 29(I), 29(II)].

Service Law — Scope of Judicial Review in Subsequent Round — Limits — Once directions of the Tribunal attained finality upon affirmation by High Court and Supreme Court, scope of consideration in subsequent proceedings was confined to examining compliance with those directions — Held: High Court transgressed limits of its jurisdiction by re-entering the merits of whether appellants' services could be regularised and by applying Umadevi to reopen the issue; it was wholly impermissible to revisit the question of regularisation at that stage — Impugned judgment set aside [Paras 26–27].

Service Law — State as Model Employer — Article 14 — Obligation of Fairness — Court expressed serious disapproval of the respondents' conduct in framing a scheme that effectively diluted the substance of binding judicial directions, prolonging litigation for years — Held: Obligation of the State to act as a model employer flows directly from Article 14 of the Constitution; arbitrariness and indifference towards daily-wage workers who contributed to ISRO's critical missions, including at Mahendragiri — a prohibited area under the Official Secrets Act — strikes at the root of fairness and dignity in public employment — Benefit of judgment extended to all similarly situated persons engaged under the Scheme [Paras 28–29(III)].

Decision: Appeal allowed — Judgment of the Division Bench of High Court of Judicature at Madras dated 8th July, 2024 in W.P. No. 31674 of 2019 set aside — "Gang Labourers (Employment for Sporadic Types of Work) Scheme, 2012" set aside to the extent inconsistent with Tribunal's directions — Clause 2 of the Scheme set aside — Respondents directed to regularise services of appellants with permanent status with effect from 9th September, 2010 within four weeks — Benefit extended to all similarly situated persons.

Specific Performance – Agreement to Sell – Readiness and Willingness – Extension of Time – Cash Payment to Agent – Plaintiff entered into an agreement dated 18.07.1988 for purchase of agricultural land for Rs. 15,41,000/- – Time was essence of contract; execution extended twice, last extension till 30.06.1989 – Plaintiff alleged attendance at Sub-Registrar's office on 30.06.1989 with balance consideration but defendants failed to appear – Trial court dismissed suit for specific performance finding plaintiff failed to prove continuous readiness and willingness – First Appellate Court reversed and decreed specific performance finding extension of time, cash payment of Rs. 5,00,000/- and readiness proved – High Court upheld in second appeal – Held: Findings of First Appellate Court not perverse; decree of specific performance maintained [Paras 2–10, 30, 40].

Second Appeal – Scope – Findings of Fact – Substantial Question of Law – Settled law that findings of fact, howsoever erroneous, cannot be reopened in second appeal under Section 100, CPC in the absence of a substantial question of law – High Court having found no substantial question of law had no occasion to reappreciate evidence – Argument that High Court ought to have examined evidence to ensure correctness of First Appellate Court's findings rejected [Paras 31–35].

Evidence – Non-Appearance of Plaintiff in Witness Box – Adverse Inference – Rebuttal – Plaintiff did not enter the witness box though alive during trial court proceedings – Held: Adverse presumption arising from non-appearance is a rebuttable presumption – Where Manager (PW-4), having personal knowledge of all transactions since 1988, appeared and corroborated plaint allegations including execution of agreement, payment of consideration and extension of time, adverse inference stood rebutted – Non-appearance of plaintiff not fatal to suit [Paras 41–43].

Specific Performance – Equitable and Discretionary Relief – Passage of Time – Escalation of Price – Defendants contended that decree passed after 15 years from the date of agreement was inequitable due to escalation in land prices – Held: No evidence whatsoever was brought on record to establish escalation of prices making it inequitable to grant decree – Discretion to refuse specific performance cannot be exercised in vacuum without proof of inequity [Para 44].

Lis Pendens – Section 52, TP Act – Transfers During Pendency of Litigation – Defendants transferred 60% of suit land on 12.02.2009 during pendency of litigation and remaining 40% on 27.02.2025 during pendency of this appeal – Defendants tendered unconditional apology for non-disclosure – Held: Transfers pendente lite are neither illegal nor void ab initio but remain subservient to rights of parties as ultimately determined – Sale deeds executed by defendants held non est – Plaintiff having obtained sale deed on 08.01.2010 pursuant to decree through due process, substantive rights accrued in favour of plaintiff's heirs; inequitable to dislodge them in exercise of discretionary jurisdiction [Paras 13, 17, 45–46].

Decision: Appeal dismissed – Sale deeds executed by defendants on 12.02.2009 and 27.02.2025 held non est – Decree of First Appellate Court maintained.

Insolvency and Bankruptcy Code – Section 9 – Operational Creditor – Pre-existing Dispute – Respondent-operational creditor filed application under Section 9 of the Code claiming Rs. 2,92,93,223/- as dues for chemical supplies – Appellant-corporate debtor raised pre-existing dispute alleging defective supplies, counterclaim of Rs. 70,09,430/-, and need for account reconciliation – NCLT dismissed the application finding a plausible dispute requiring detailed investigation beyond its summary jurisdiction – NCLAT reversed, holding that a credit note of Rs. 1.66 crore resolved earlier disputes and that events post demand notice could not be considered – Held: NCLT was correct; NCLAT not justified in reversing the decision – Appeal allowed [Paras 1, 7, 21–22].

Pre-existing Dispute – Test of Plausibility – Reconciliation of Accounts – The test for existence of a pre-existing dispute under Section 9 of the Code is not whether the defence would succeed on merits but whether there is a plausible contention requiring further investigation that is not spurious, hypothetical or illusory – Respondent's first written correspondence acknowledging defective supplies dated back to 10.12.2020, long prior to demand notice dated 11.11.2021 – Appellant's police complaint dated 27.09.2021 and email dated 16.10.2021 calling for reconciliation of accounts, issued prior to demand notice, clearly indicated pre-existing disputes – Respondent's demand having fluctuated from Rs. 4.60 crore to Rs. 2.92 crore with belated clarification, confusion as to the amount due itself supported need for reconciliation [Paras 15, 17–18, 21].

IBC – Section 9 – Interest at 24% per annum – Unilaterally Signed Invoices – Debit notes raised by respondent for interest at 24% per annum on alleged delayed payments dating back to 2016–17 and 2018, raised only in August and September 2021 after its reply dated 14.07.2021, are themselves open to question – Such claims based on unilaterally signed invoices in defiance of limitation constitute further aspects of the pre-existing dispute [Paras 12, 16].

IBC – Section 9 Application – Scope of Inquiry – NCLAT erroneously delved into the merits of the dispute to decide whether the appellant's defence had actual merit – What is required is only to satisfy that a plausible pre-existing dispute exists; the adjudicating authority is not required to be satisfied that the defence is likely to succeed – NCLAT also erred in refusing to consider admissions of respondent's Director in the civil suit, as those admissions related to pre-CIRP issues relevant to the case and not to post-CIRP events [Paras 16, 19–21].

Decision: Appeal allowed – Judgment dated 11.02.2025 of the NCLAT in Company Appeal (AT) (Ins) No. 157 of 2023 set aside – Order dated 16.12.2022 of the NCLT in Company Petition (IB)-792(ND) of 2021 restored – Parties to bear their respective costs.

IBC - Insolvency Law – CIRP – Eligibility of Resolution Applicant – Multi-State Co-operative Society – "Same Line of Business" – Section 64(d) MSCS Act, 2002 – Appellant, a credit co-operative society with an agro-processing vertical, submitted a resolution plan of Rs. 169 Cr. for acquisition of Morarji Textiles Ltd. (corporate debtor engaged in man-made fibre/viscose manufacturing) – RP declared appellant ineligible under Section 30(2)(e) IBC as its bye-laws did not permit investment in corporate debtor – NCLT and NCLAT affirmed ineligibility – Held: Expression "any other institution in the same line of business" under Section 64(d) requires substantial or predominant sameness in core business activities determined with reference to the bye-laws of the MSCS; appellant's predominant business is financial intermediation and member-welfare; corporate debtor's business of synthetic/man-made fibre manufacturing is distinct from appellant's agro-based processing activity; appellant not in the same line of business as corporate debtor – Appeal dismissed as withdrawn [Paras 30–51].

Statutory Interpretation – "Same Line of Business" – Section 64(d) MSCS Act, 2002 – Meaning and Scope – The expression is not defined in the 2002 Act – JPC Report dated 15.03.2023 reveals that the phrase was inserted to address misuse of the earlier open-ended provision permitting investment in "any other institution", which had enabled dubious and fraudulent investments – The amendment was intended to restrict investments to institutions whose core activities bear a substantial, predominant or closely related sameness to those of the MSCS as reflected in its bye-laws – Revenue, profit or loss figures are irrelevant for this determination; the inquiry must be confined to the objects and functions in the bye-laws of the MSCS – Reference to SEBI Delisting Regulations and NIC Codes may provide illustrative guidance but is not determinative [Paras 32–37, 46].

Bye-laws as Decisive Charter – Line of Business Determined by Object Clause – The line of business of an MSCS must be determined from a cumulative reading of the objects and functions in its bye-laws – Appellant's Clauses 5(a) to 5(r) establish that its primary business is financial intermediation and member welfare; Clause 5(s) permits agro-product processing only; Clause 5(t) restricts partnerships to other co-operative societies only – These clauses do not contemplate standalone industrial manufacturing – A mere amendment to the investment clause (Clause 52) reproducing the language of Section 64(d) cannot expand the line of business in the absence of a corresponding amendment to the object clause [Paras 38–49].

Amendment to Bye-laws – Non-Production Before Tribunals – Consequence – Certificate of registration of amendment to bye-laws dated 24.01.2024 was available with appellant but was not placed before NCLT or NCLAT despite due opportunity – Appellant cannot be permitted to rely on the same at the appellate stage – Application for production of additional documents does not satisfy requirements of Order XLI Rule 27 CPC – Even if taken on record, amendment to Clause 52 would not advance appellant's case as it does not alter the object clause [Paras 47–49].

Judgment Rendered on Issue of Law Despite Withdrawal – Court exercised its discretion to explain the position of law on the pivotal issue under Section 64(d) MSCS Act, 2002, notwithstanding the appellant's request for withdrawal, having regard to the importance of the question involved – No findings returned on the merits of the appeal [Paras 1–2].

Decision: Application for withdrawal allowed – Appeal dismissed as withdrawn – CIRP of corporate debtor to continue in accordance with IBC – Pending applications disposed of.

Execution of Decree – Compromise Decree – Jurisdiction of Executing Court – Modification of Decree – Parties entered into a compromise in a suit for specific performance resulting in a decree dated 14.07.2017 dividing 51R of land equally at 20.5R each with 10R as common land – Executing Court in Execution Petition No. 21 of 2018 passed order dated 19.07.2021 varying the areas allotted to the parties on the ground that constructions on the extreme western side were not as per sanctioned plan and that part of the area had been sold to a third party – Review petition allowed on 26.08.2021 modifying the decree further – High Court upheld the orders in writ petition – Held: Executing Court acted in excess of jurisdiction; orders set aside – Executing Court directed to execute the decree in its terms and tenor [Paras 14–16, 30–31].

Executing Court – Jurisdiction – Section 47, CPC – Settled Law – Executing Court is empowered only to decide questions relating to execution, discharge or satisfaction of the decree and has no jurisdiction to go beyond the decree – It must execute the decree as it stands without altering or substituting its own view in place of that expressed in the decree – The Executing Court cannot assume the role of a trial court – Exception only where decree is a nullity for lack of inherent jurisdiction, which was not the case herein [Paras 24–27].

Executing Court – Reciprocal Obligations – Identity of Land – Where compromise decree clearly and unequivocally describes the portions of land falling into the shares of each party, no dispute as to identity of land arises – Fact that exchange of certain portions may be impracticable due to constructions not conforming to sanctioned map or part of land having been sold is immaterial and does not empower the Executing Court to vary the decree – Reliance placed by respondent on Jai Narain Ram Lundia v. Kedar Nath Khetan rejected; said decision only permits the Executing Court to resolve disputes as to identity of the specific thing to be given under reciprocal obligations and does not authorise variation of decree terms [Paras 28–30].

Decision: Appeal allowed – Orders dated 19.07.2021 and 26.08.2021 passed by the Executing Court and consequential order dated 11.10.2021 set aside – Executing Court directed to execute the compromise decree in its terms and tenor.

Service Law – Extraordinary Pension – Death of Government Servant on Duty – Discretion of Governor – Dr. Sunil Kumar Singh, a Medical Officer, was shot dead on 20.04.2016 while discharging duties at CHC Jaspur – First respondent-widow filed writ petition before the Uttarakhand High Court seeking implementation of Chief Secretary's proposal for Rs. 50,00,000/- compensation, extraordinary pension and ancillary reliefs – Division Bench by judgment dated 12.09.2018 directed payment of compensation of Rs. 1,99,09,000/- with interest at 7.5% per annum and further directed grant of extraordinary pension under Rules of 1981 – Held: Direction for monetary compensation and other reliefs not interfered with; direction for extraordinary pension set aside as Governor had no occasion to exercise discretion under the Rules [Paras 2, 5, 9, 15–16].
Extraordinary Pension – Rules of 1981 – Sanction of Governor – Mandatory Requirement – On complete reading of Rules of 1981, it is clear that grant of extraordinary pension requires sanction of the Governor who must examine all relevant aspects before according such sanction – The Rules constitute a complete code in themselves prescribing the circumstances, procedure and determination of extraordinary pension – Governor also possesses additional discretion under Rules 14 and 15 to make awards in circumstances not covered by the Rules or exceeding admissible amounts – Where authority is conferred with discretionary powers to be exercised while taking an administrative decision and the considerations are duly enumerated, it is preferable that such authority itself takes the decision; courts should be slow to substitute their own decision [Paras 10–12].
Writ Jurisdiction – Mandamus – Premature Exercise – Court Not to Substitute for Statutory Authority – High Court cannot issue a writ of mandamus directing grant of extraordinary pension where the authority vested with discretion has not had occasion to exercise it and has not refused to take a decision – The High Court did not find that the Governor had refused to exercise discretion or that a decision was being withheld – It would have been appropriate for the High Court to first request the Governor to examine the matter rather than itself deciding the entitlement to extraordinary pension – Court ordinarily will not usurp the jurisdiction of the statutory authority and will allow it to perform its own functions [Paras 12–14].
Compensation – Interim Payments – Monetary compensation of Rs. 1,00,00,000/- paid to the first respondent pursuant to interim orders, together with compassionate appointment of son, allotment of official residence and payment of salary arrears of Rs. 10,65,000/-, held to be the monetary compensation to which the first respondent is entitled – Same shall not be recovered from her [Paras 6, 9, 16(d)].
Decision: Appeals partly allowed – Direction to pay extraordinary pension set aside – First respondent permitted to make fresh application for extraordinary pension under Rules of 1981 within four weeks; Competent Authority to consider the same in accordance with the Rules and communicate decision within twelve weeks of receipt of application, without being influenced by observations in either judgment – Monetary compensation of Rs. 1,00,00,000/- confirmed and shall not be recovered.
 

Criminal Law – Limitation for Taking Cognizance – Section 468, Cr.PC – Relevant Date for Computing Limitation – Cross-FIRs – FIR No. 121 of 2011 registered against Respondent No. 2 for offences under Sections 323 and 341 read with Section 34, IPC arising out of an altercation on 09.05.2011 – Charge-sheet filed on 29.05.2012, i.e., one year and twenty days after the incident – High Court quashed the FIR holding the bar of limitation under Section 468, Cr.PC attracted, treating the date of taking cognizance as the relevant date – Held: High Court committed a patent error; the relevant date for computing the period of limitation under Section 468, Cr.PC is the date of filing of the complaint or the date of initiation of criminal proceedings, and not the date on which the Magistrate takes cognizance – FIR/complaint lodged before the police constitutes initiation of criminal proceedings and is the starting point of limitation [Paras 2, 5.2.4, 7.2–7.4, 10].

Limitation – Section 468, Cr.PC – Date of Filing of Complaint vs. Date of Taking Cognizance – Law Settled by Constitution Bench – The issue whether limitation is to be reckoned from the date of filing of the complaint or the date of taking cognizance was no longer res integra in view of the Constitution Bench judgment in Sarah Mathew v. Institute of Cardio Vascular Diseases – Constitution Bench held that the date of taking cognizance is entirely an act of the Magistrate, liable to be delayed due to systemic or personal reasons, and cannot supply certain or definitive criteria for reckoning limitation – A diligent complainant who files the complaint within time cannot be prejudiced by the court's delay in taking cognizance – Section 473, Cr.PC postulates condonation of delay in filing the complaint, further indicating that the date of filing is the material date – Principle actus curiae neminem gravabit applied [Paras 5.3–5.8.4].

Precedent – Constitution Bench Judgment – Binding Effect – Respondent sought to distinguish Sarah Mathew (supra) on the ground that it involved a complaint filed before the Magistrate, whereas the present case involved an FIR followed by a police report under Section 173, Cr.PC – Held: Submission rejected – Whether proceedings are initiated by a complaint before the Magistrate or by an FIR before the police, in both cases the date of initiation of criminal proceedings is the relevant date – The binding effect of a Constitution Bench decision does not depend upon whether every particular argument was considered therein, so long as the point was actually decided – Stock contentions that a particular aspect was missed cannot dilute the law laid down by the Constitution Bench [Paras 7–9].

Professional Ethics – Duty of Advocates – Binding Precedent – Court observed that arguing against settled law merely to demonstrate argumentative skill, without exceptional grounds to distinguish the decision, wastes valuable court time – Giving up an argument where a point of law is already decided is a professional virtue and part of ethics in professional conduct – Lawyers, like courts, are expected to respect strong-operated precedents from binding judgments [Para 8–8.3].

Decision: Appeals allowed – Impugned order dated 30.01.2025 of the Delhi High Court in Crl. M.C. No. 1170 of 2017 and Crl. M.A. No. 7270 of 2016 set aside – Trial to expeditiously proceed in accordance with law.

Civil Law – Order 2 Rule 2, CPC – Bar on Subsequent Suit – Same Cause of Action – Parvatewwa instituted Suit-I in 2002 challenging adoption deed dated 23.03.1961 and seeking injunction simpliciter – Suit-I dismissed by Trial Court and confirmed in first appeal on limitation – During pendency of proceedings, Parvatewwa in 2007 instituted Suit-II seeking declaration of ownership and recovery of possession of the same property – Trial Court and First Appellate Court held Suit-II barred by Order II Rule 2, res judicata and constructive res judicata – High Court in second appeal reversed and decreed Suit-II – Held: High Court committed manifest error; Suit-II clearly barred by Order II Rule 2, CPC – Parvatewwa, fully aware that Channappa was asserting rights over the suit property on the basis of the adoption deed, ought to have claimed declaration of title and consequential relief of possession in Suit-I itself – Omission to do so without leave of court precludes institution of a subsequent suit for such omitted relief [Paras 20, 22–28, 41–42].

Order II Rule 2, CPC – Requirements for Bar – Identity of Cause of Action – Constitution Bench Principles – Defendant invoking bar under Order II Rule 2(3), CPC must establish: (i) second suit was in respect of same cause of action as earlier suit; (ii) plaintiff was entitled to more than one relief in respect of that cause of action; and (iii) plaintiff, without leave of court, omitted to sue for the relief claimed in the second suit – Cause of action has no relation to the defence set up by the defendant nor to the character of the relief prayed for – Test is whether the claim in the new suit is founded upon a cause of action distinct from the foundation of the former suit – Causes of action in both suits must be identical in substance and not merely technically identical [Paras 21, 26].

Constructive Res Judicata – Explanation IV to Section 11, CPC – A matter which might and ought to have been made a ground of attack or defence in the former proceedings shall be deemed to have been directly and substantially in issue therein – Parvatewwa, having omitted to seek declaration of title in Suit-I despite being aware of Channappa's claim, cannot be permitted to agitate the same issue in a subsequent suit – Adjudication is conclusive not only as to matters actually decided but also as to every other matter which the parties might and ought to have litigated as incidental to or essentially connected with the subject-matter of the litigation [Paras 29–33].

Civil Procedure – Section 105(1), CPC – Interlocutory Order – Finality – Non-Appealability – Order rejecting application under Order II Rule 2, CPC (I.A. No. 4) is not independently appealable under Section 104 read with Order XLIII, CPC – Under Section 105(1), CPC, any error, defect or irregularity in such interlocutory order affecting the decision of the case may be raised as a ground of objection in the appeal against the final decree – Such order does not amount to a final adjudication of rights and does not assume irrevocable finality so as to preclude the defendant from re-agitating the issue in appeal against the decree – To hold otherwise would defeat the very purpose of Section 105, CPC and confer upon a non-appealable interlocutory order a status which the legislature has consciously not accorded [Paras 9–14].

Second Appeal – Section 100, CPC – Scope of Interference – Concurrent Findings of Fact – High Court in second appeal is confined to cases involving a substantial question of law – Concurrent findings of fact recorded by courts below cannot be interfered with unless shown to be perverse or based on no evidence – High Court cannot conduct a "third trial on facts" – In the present case, High Court proceeded to reassess the entire factual matrix without recording any cogent reason to demonstrate that concurrent findings suffered from perversity or misapplication of settled legal principles – Such exercise exceeded the permissible limits of jurisdiction under Section 100, CPC [Paras 35–39].

Decision: Appeal allowed – Impugned judgment of the High Court set aside – Suit-II (O.S. No. 13 of 2007) dismissed – Parties to bear their own costs.