Land Acquisition – Compensation Determination – Appeals against High Court’s judgment reducing compensation for acquired land from Rs. 112,000 per acre to Rs. 88,400 per acre – Notification under Section 4 issued on 06.06.1988 for acquiring land for a spinning mill – Reference Court considered sale deed dated 24.05.1979 and added 12% annual increase with a 25% cut, determining compensation at Rs. 112,000 per acre – High Court reduced cut to 15% and recalculated compensation – Supreme Court upheld High Court's determination, emphasizing the caution needed when relying on old sale deeds and justified applying a 10% annual increase due to regional instability and militancy [Paras 1-7]​​.

Cumulative vs. Flat Rate Increase – Court emphasized cumulative rate increase should generally be applied when determining compensation based on past transactions, but noted exceptions due to local circumstances such as prolonged regional instability affecting land prices [Para 6.3]​​.

Deduction for Development – Supreme Court upheld 15% deduction for development charges due to the agricultural nature of the land and its location, deeming it appropriate given the size and intended industrial use of the acquired land [Para 6.5]​​.

Decision – Appeals dismissed – Supreme Court found no reason to interfere with the High Court’s judgment – Compensation determined at Rs. 88,400 per acre upheld – No order as to costs [Paras 7]​​.

Administrative Law – Jurisdiction – Appeal against High Court of Uttarakhand’s dismissal of writ petition challenging Labour Court's award – Respondent's termination deemed illegal by Labour Court with reinstatement and back wages ordered – Writ petition originally filed in High Court of Allahabad – Post-creation of State of Uttarakhand, jurisdiction transferred to Uttarakhand High Court – Allahabad High Court allowed withdrawal of writ petition with liberty to file fresh writ in Uttarakhand High Court – Uttarakhand High Court dismissed fresh writ on grounds of jurisdiction and laches – Supreme Court held Allahabad High Court's order permitting withdrawal and refiling in appropriate jurisdiction was valid – High Court of Uttarakhand directed to hear the case on merits [Paras 1-5]​​.

Jurisdiction and Transfer of Cases – Judicial Orders vs. Administrative Orders – Supreme Court noted judicial propriety demands respect for orders of Coordinate Benches – Observed that judicial orders permitting transfer or refiling of cases should be respected unless explicitly challenged and set aside – Emphasized administrative orders for transfer of cases under Section 35 are distinct from judicial orders addressing procedural aspects [Paras 3.1-3.3, 4]​​.

Decision – Appeal allowed – Impugned judgment of Uttarakhand High Court set aside – Writ petition restored for hearing on merits – Directed High Court of Uttarakhand to expedite hearing and disposal within six months [Paras 5]​​.

Family Law – Divorce on Grounds of Cruelty – Appeal against High Court’s order setting aside the decree of divorce and allowing the wife’s petition for restitution of conjugal rights – Marriage remained unconsummated and parties lived separately since the wedding day – Wife repeatedly filed cases against the husband, including criminal complaints and RTI queries aimed at his professional downfall – Supreme Court held repeated legal actions amounted to mental cruelty – Marriage irretrievably broken down – Decree of divorce passed on grounds of cruelty and irretrievable breakdown of marriage [Paras 1-20]​​.

Judicial Precedent and Article 142 – Irretrievable Breakdown of Marriage – Supreme Court exercised its powers under Article 142 to dissolve the marriage due to irretrievable breakdown – Recognized that while irretrievable breakdown is not a statutory ground under the Hindu Marriage Act, the court has exercised such power in the past to do complete justice between the parties [Paras 5-11, 21]​​.

Decision – Appeals allowed – Decree of divorce granted – Marriage between the appellant and respondent dissolved – Supreme Court directed that each party bear their own costs [Paras 21-23]​​.

Criminal Law – Summoning of Additional Accused – Appeal against the order summoning the appellant under Section 319 CrPC – FIR lodged by the second respondent alleged that the deceased, her husband, was murdered by the appellant, his employer – Police investigation led to chargesheet against three persons – During trial, the second respondent testified implicating the appellant – Prosecution filed an application under Section 319 CrPC based on her deposition – Sessions Judge invoked Section 319 CrPC and summoned the appellant – High Court upheld the order – Supreme Court held that the power under Section 319 CrPC is discretionary and extraordinary, to be exercised sparingly and only when strong and cogent evidence is present – Directed Sessions Judge to reconsider the matter in light of the principles laid down in Hardeep Singh v. State of Punjab (2014) and Labhuji Amratji Thakor v. State of Gujarat (2019) [Paras 1-12]​​.

Discretionary and Extraordinary Power – Application of Section 319 CrPC – Supreme Court emphasized the necessity for strong and cogent evidence before exercising the power under Section 319 CrPC – Power should not be used in a casual or cavalier manner – The evidence must be more than prima facie but short of that required for conviction [Paras 105-106 of Hardeep Singh case]​​.

Decision – Appeal allowed – Impugned judgment and order summoning the appellant set aside – Sessions Judge directed to reconsider the application under Section 319 CrPC in light of the principles laid down by the Supreme Court – Directed to call the case on September 30, 2021, and pass appropriate orders thereafter [Paras 9-12]​​.

Taxation Law – Refund of Unutilised Input Tax Credit – Challenge to Section 54(3) – Appellant contested the constitutional validity of Section 54(3) of the CGST Act, which restricts refund to unutilised ITC on inputs in cases of inverted duty structure – Gujarat High Court held the exclusion of input services from refund as ultra vires – Madras High Court upheld the exclusion as valid – Supreme Court held that refund is a statutory right and restricted to the specific conditions laid down in the statute – Held that Parliament has the legislative competence to confine refund only to ITC accumulated on inputs, excluding input services – Upheld the validity of Section 54(3) [Paras 1-10, 93-101]​​.

Legislative Discretion – Policy and Classification – Court emphasized that the classification under Section 54(3) is valid and within legislative competence – Judicial intervention not warranted in policy decisions involving economic and fiscal measures unless classification is palpably arbitrary – Highlighted legislative discretion in framing tax policies and provisions for refunds [Paras 11-25, 94-108]​​.

Decision – Appeals dismissed – Supreme Court upheld the constitutional validity of Section 54(3) of the CGST Act, affirming that refunds for inverted duty structure are limited to unutilised ITC on inputs, excluding input services – Clarified that any alteration to this structure would require legislative amendment rather than judicial interpretation [Paras 102-108]​​.

Taxation Law – Disallowance under Section 14A – Appeal against High Court’s order endorsing disallowance of proportionate interest for investments in tax-free bonds and securities – Supreme Court held that proportionate disallowance under Section 14A is not warranted where the assessee has sufficient interest-free funds exceeding the investments – Reiterated that tax-exempt income investments made from mixed funds should be presumed to have come from interest-free funds if available – Emphasized clarity and non-arbitrariness in taxation [Paras 1-30]​​.

Interpretation of Section 14A – Investment from Mixed Funds – Court noted that in the absence of separate accounts for interest-free funds and borrowed funds, the presumption should favor the assessee if interest-free funds exceed investments – Highlighted that there is no statutory requirement for maintaining separate accounts for different types of funds [Paras 17-20, 22-23]​​.

Decision – Appeals allowed – Supreme Court set aside High Court’s judgment endorsing proportionate disallowance – Held that investments in tax-free securities by banks with sufficient interest-free funds should not attract disallowance under Section 14A – Directed that the disallowance is impermissible without establishing a direct nexus between expenditure and exempt income [Paras 27-30]​​.

Arbitration – Setting Aside of Award – Patent Illegality and Public Policy – The Supreme Court held that the Division Bench of the High Court erred in setting aside the arbitral award. It emphasized that the High Court's intervention was based on reappreciation of evidence, which is impermissible under Section 34 of the Arbitration and Conciliation Act, 1996. The court clarified that the grounds for setting aside an award on the basis of patent illegality must involve an error that goes to the root of the matter and not mere erroneous application of law. The High Court's categorization of the award as perverse or patently illegal was found to be incorrect as it did not appreciate the contours of these expressions appropriately [Paras 17, 24, 36]​​ .

Public Policy – Fundamental Policy of Indian Law – The Supreme Court reiterated that an award could only be set aside if it contravenes the fundamental policy of Indian law, which includes principles of natural justice or if it shocks the conscience of the court. The concept of "public policy of India" was narrowly interpreted to avoid excessive judicial interference in arbitration awards, thus preserving the object of minimal interference under the 1996 Act [Paras 14, 27, 38]​​ .

Decision- Appeal allowed – The Supreme Court set aside the judgment of the Division Bench of the High Court and restored the arbitral award. The court highlighted the importance of adhering to the principles of minimal judicial interference in arbitration matters, as envisaged under the Arbitration and Conciliation Act, 1996 [Para 39] .

Civil Law – Second Appeal – High Court's Jurisdiction – Appeals against High Court's judgment reversing first appellate court’s decree on examining disputed documents – High Court considered substantial question of law on genuineness of sale agreement – Supreme Court upheld High Court's jurisdiction to review facts under Section 103 CPC when findings of fact by lower courts are perverse or lack logic – Validated High Court’s approach in rectifying erroneous factual conclusions to prevent injustice [Paras 14-18]​​.

Power of High Court under Section 103 CPC – Limited Factual Review – High Court justified in examining evidence when lower courts overlook material evidence or reach findings defying logic – Section 103 CPC empowers High Court to determine facts if evidence on record is sufficient and findings are palpably perverse – Upheld High Court’s detailed scrutiny of sale agreement and related documents to correct erroneous appreciation of facts by first appellate court [Paras 15-18]​​.

Decision – Appeals dismissed – Supreme Court affirmed High Court’s decision and methodology in exercising factual review under Section 103 CPC – Held High Court’s intervention appropriate and necessary to correct substantial errors by first appellate court – No order as to costs [Paras 18-19]​​.

Arbitration Law – Appointment of Arbitrator – Appeal against High Court’s order appointing an arbitrator other than the Chairman as per the distributorship agreement – Supreme Court held that the High Court correctly applied Section 11 and Section 14 of the Arbitration and Conciliation Act, 1996 – Chairman deemed ineligible under Section 12(5) read with Seventh Schedule due to lack of neutrality – Upheld High Court’s decision to appoint an independent arbitrator [Paras 1-12, 9.1]​​.

Interpretation of Section 12(5) and Seventh Schedule – Neutrality of Arbitrators – Court emphasized independence and impartiality as fundamental principles of arbitration – Noted that despite prior agreement, disqualification applies to ensure neutral arbitrators – Previous contractual terms cannot override statutory provisions ensuring fairness in arbitration [Paras 6-9, 7.1]​​.

Conflict with Rajasthan Co-Operative Societies Act – Section 58 – Supreme Court held that the Arbitration and Conciliation Act, 1996 being a special Act prevails over the Rajasthan Co-Operative Societies Act, 2001 – Arbitration agreement and statutory provisions of the Arbitration Act take precedence [Para 7.1]​​.

Decision – Appeals dismissed – Supreme Court upheld the High Court's appointment of an independent arbitrator – Reiterated the importance of neutrality in arbitration and confirmed that statutory amendments ensuring impartial arbitrators supersede prior agreements [Paras 12]​​.