Arrest under PMLA – Legality – Appeal against the High Court’s rejection of a criminal writ petition challenging the arrest by the Directorate of Enforcement (DoE) – Supreme Court examines compliance with statutory preconditions under Section 19 of the PMLA – Emphasizes mandatory recording and furnishing of ‘reasons to believe’ – Judicial scrutiny of the validity of arrest under Section 19(1) upheld – Arrest found non-compliant with statutory requirements, deemed illegal [Paras 1-40].

Statutory Safeguards – Compliance – DoE’s argument of non-furnishing of ECIR and grounds of arrest distinguished – Court mandates that arrestee must be provided with reasons to believe and grounds of arrest for judicial review – Ensures the balance between investigation requirements and protection of personal liberty [Paras 22-38].

Judicial Review – Scope – Court delineates scope of judicial review in matters of arrest under PMLA – Establishes that judicial scrutiny must confirm compliance with statutory conditions and constitutional rights – Prevents arbitrary exercise of power by enforcing stringent safeguards against pre-trial arrest [Paras 39-43].

Constitutional Mandate – Article 22(1) – Court reiterates the importance of informing the arrested person of the grounds of arrest as per Article 22(1) – Emphasizes that the power to arrest must be exercised with care and accountability to uphold the constitutional rights [Paras 10-12, 15-16].

Preconditions for Arrest – Interpretation of Section 19(1) of PMLA – Court interprets the expressions “reason to believe”, “guilty of an offence punishable under this Act”, and “material” – Highlights the necessity for objective assessment of material before forming ‘reason to believe’ – Specifies that mere suspicion is insufficient for arrest under PMLA [Paras 9, 24-28, 31-36].

Comparison with Cr.P.C. – Distinction between Sections 41 and 167 of Cr.P.C. and Section 19 of PMLA – Court notes stricter safeguards under PMLA – Emphasizes that judicial scrutiny is necessary to ensure compliance with higher standards set by PMLA for arrest [Paras 40-42].

Decision:

Appeal allowed – Arrest declared illegal due to non-compliance with Section 19(1) of PMLA – Orders of arrest and remand set aside – Appellant granted liberty to seek appropriate relief for damages and other consequences arising from the illegal arrest [Para 44-45].

Criminal Law – Demand and Acceptance of Bribe – Appellant, a Forest Section Officer, convicted for demanding and accepting bribe – Prosecution alleged that the appellant demanded Rs. 5,000 as bribe from the complainant, a saw-mill operator, to refrain from booking a case for illegal possession of teakwood – The complainant's testimony contradicted by call detail records – High Court's affirmation of trial court’s judgment found unsustainable due to lack of credible evidence supporting demand and acceptance of bribe [Paras 1-55].

Procedural Lapses – Trap Proceedings – DySP, ACB, failed to verify the demand of bribe independently before organizing the trap – No telephonic conversation recorded between the appellant and complainant – No recording device placed on the complainant during the trap – Absence of independent shadow witnesses undermined the integrity of the trap proceedings – High Court overlooked these procedural deficiencies [Paras 30-33, 47-48].

Evidentiary Gaps – Reliability of Witness Testimony – Sole eyewitness, the complainant’s friend, declared interested witness due to close association – Complainant's version contradicted by call detail records which showed no calls exchanged between appellant and complainant post-17th January 2023, refuting the demand of bribe on 21st, 22nd, and 23rd January 2023 – Prosecution failed to present corroborative evidence from an independent witness [Paras 34-41, 49-51].

Defence of Planting Evidence – Defence claimed that the tainted money was planted in appellant’s bag by the complainant – Cross-examination revealed complainant handled appellant’s bag, providing opportunity for planting – Appellant’s hand wash not tested for phenolphthalein, failing to confirm handling of tainted money – Defence’s alternative hypothesis found plausible, creating reasonable doubt [Paras 54-55].

Circumstantial Evidence – Proof of Demand – Constitution Bench ruling in Neeraj Dutta v. State (Govt. of NCT of Delhi) followed – Demand and acceptance of bribe can be proved by circumstantial evidence in the absence of direct evidence – Prosecution’s circumstantial evidence insufficient to prove demand – Allegations by complainant unsupported by independent verification or tangible evidence [Paras 26-28, 52-55].

Decision: Appeal allowed – Conviction and sentence set aside – Appellant acquitted of all charges – Court emphasized the necessity of independent verification and reliable evidence in corruption cases [Para 55].

Water Sharing Dispute – Writ Petition under Article 32 – Petitioner, Government of NCT of Delhi, requested directions for the release of surplus water from Hathni Kund Barrage by Haryana and Himachal Pradesh to alleviate acute water shortage in Delhi – UYRB convened an emergent meeting and discussed the MoU between Delhi and Himachal Pradesh and the additional water required by Delhi – Himachal Pradesh initially agreed to release 137 cusecs of surplus water but later retracted – Haryana contended similar water scarcity and inability to provide additional water – Court acknowledged the complexity of inter-state water sharing and emphasized resolution through UYRB – Directed the Delhi Government to formally request Haryana for 150 cusecs of additional water on humanitarian grounds and UYRB to decide expeditiously [Paras 1-13].

Inter-State Water Dispute – Supreme Court's Jurisdiction – Court expressed limitations in expertise to adjudicate complex inter-state water disputes – Referred the matter to UYRB, emphasizing the necessity for a specialized body to handle such issues – Highlighted past orders and developments regarding water treatment and distribution in Delhi and Haryana – Recommended Delhi Government to take measures to prevent wastage of water during the crisis period [Paras 11-12].

Decision: Writ Petition disposed of – Directed UYRB to convene a meeting to address Delhi's formal request for additional water and decide by 14th June 2024 – All interim applications disposed of [Paras 12-13].

Civil Procedure - Indigent Person Status - Filing of Appeal - The appellant, injured in a motor accident, was awarded compensation by the Motor Accident Claims Tribunal but had not received the amount. The High Court dismissed her application to file an appeal as an indigent person based on the awarded compensation. The Supreme Court held that the actual receipt of the compensation amount is essential for determining indigency status. The Court underscored the principle that lack of monetary capability should not preclude access to justice. The High Court's order was set aside, and the appellant was granted permission to appeal as an indigent person. [Paras 1-20]

Eligibility to File as Indigent - Analysis - It was observed that the High Court erred in rejecting the appellant's application without conducting the necessary inquiry to verify her indigency status at the time of filing the appeal. The statutory requirements under Order XLIV, Rule 3(2) of the Code of Civil Procedure were not met. [Paras 15-18]

Decision - Grant of Indigent Status for Filing Appeal - The Supreme Court allowed the appeal, set aside the High Court’s order, and permitted the appellant to file the appeal as an indigent person. The High Court was requested to expedite the disposal of the appeal within six months. [Paras 19-20]

Labour Law – Coverage under Employees’ State Insurance Act, 1948 – Appeal against High Court decision exempting Nagar Nigam Allahabad from coverage under ESI Act – Appellant Corporation contended that the workshop run by Nagar Nigam engaged in repairs and maintenance of vehicles is a 'factory' under the Act – High Court quashed recovery notice issued by ESI Corporation – Supreme Court held that the workshop is indeed a factory under the Act – Appeal allowed, High Court order set aside – Respondent directed to approach the Insurance Court for resolution. [Paras 1-28]

Definition of ‘Factory’ – Applicability – Held – Workshop carrying out repairs and maintenance of vehicles with more than 10 employees is a ‘factory’ under Section 2(12) of the ESI Act – Respondent’s failure to comply with ESI contributions from 1978 onwards without seeking exemption under Section 90 of the Act – Supreme Court observed that respondent’s participation in prior statutory contributions affirmed the applicability of the Act. [Paras 19-23]

Judicial Review – Writ Jurisdiction – Exercise of writ jurisdiction under Article 226 – Supreme Court found High Court erred in entertaining writ petition without directing respondent to seek remedy before Insurance Court – Extraordinary writ jurisdiction not justified where factual disputes require examination by Insurance Court. [Paras 24-25]

Decision – Appeal allowed – High Court order quashed – Respondent directed to seek remedy under Section 75 of the ESI Act – Pending applications disposed of. [Paras 26-28]

Industrial Law – Application of Conferment Act – Civil Appeals against High Court decision affirming the conferment of permanent status to workmen – Tamil Nadu Medical Services Corporation claimed exemption from the Act – High Court and Supreme Court analyzed the applicability of the Act – Held, Tamil Nadu Medical Services Corporation qualifies as an industrial establishment under the Act and its employees are entitled to permanent status – Supreme Court dismissed the Corporation's appeal and allowed the employees' appeal – Directed compliance with the Inspector of Labour's order. [Paras 1-29]

Industrial Establishments – Definition and Applicability – Analysis – Held – Tamil Nadu Medical Services Corporation is an industrial establishment as per Section 2(3)(e) of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 – Activities of the Corporation deemed commercial – Employees met the continuous service requirement – Act applicable to Corporation and employees – No exemption under Section 7 applicable. [Paras 18-27]

Decision – Compliance with Labour Inspector's Order – High Court's limited scope on remand – Held, Inspector of Labour's order conferred permanent status to eligible employees – High Court should have enforced compliance instead of suggesting raising an industrial dispute – Supreme Court directs compliance with Labour Inspector's order. [Paras 28-29]

Termination of Dealership - Procedural Compliance - Appeal against High Court order affirming the quashing of dealership termination for violation of procedural norms during sample collection - Appellants contended that the dealership was terminated due to violations of the dealership agreement clauses and that SGS India, the agency appointed for sample collection, was authorized under Marketing Discipline Guidelines - Respondent challenged the validity of the sample collection process by SGS India, arguing it violated Clause 7 of the Control Order, which mandates sample collection by specific authorized officers - Single Judge and Division Bench upheld the respondent's contention, finding procedural lapses in sample collection and testing.

Procedural Lapses - Clause 7 of Control Order - The High Court found that SGS India lacked authority under Clause 7 of the Control Order to collect samples and the entire process was flawed as the required authorized officers were not involved - The Division Bench upheld the Single Judge’s decision, emphasizing the need for compliance with statutory procedures.

Sample Collection Authority - The appellants argued that the Marketing Discipline Guidelines permitted third-party agencies to collect samples - Supreme Court held that while the guidelines allowed administrative convenience, they could not override statutory provisions - The respondent was not prosecuted under the Control Order, rather the dealership was terminated for breach of contractual terms.

Judicial Discipline - Supreme Court noted adherence to principles laid down in prior judgments - Held that dealership termination must strictly comply with procedural rules and guidelines - Following the precedent in R.M. Service Centre, termination was justified if based solely on contractual breaches without violating statutory procedures.

Decision - Appeals allowed - Supreme Court found the dealership termination valid as per the terms of the agreement and procedural compliance under Marketing Discipline Guidelines - Noted no prosecutable offense under the Control Order, thus adherence to its procedural requirements was unnecessary for this case.

Specific Performance – Suit for specific performance of agreement to sell land – Appellant/plaintiff entered agreement with respondent no. 4, the Power of Attorney holder of other respondents, for purchase of land – Initial agreement dated 26.09.1995 with earnest money paid and extensions granted – Sale deed executed in favor of other respondents during the extension period – Plaintiff sued for specific performance after discovering the sale – Trial Court decreed in favor of plaintiff – High Court reversed, dismissing the suit – Supreme Court upheld High Court’s decision.

Agreement Validity – Assessment – Held – Initial agreement not executed by all co-owners – Defendant no. 1 signed as Power of Attorney holder but the agreement did not specify this role clearly – Power of Attorney not produced or proved in Trial Court – High Court correctly found that agreement was not binding on all co-owners. [Paras 6-7]

Plaintiff's Non-Appearance – Legal Implication – Held – Plaintiff did not appear as a witness, instead Power of Attorney holder deposed – Legal position prohibits Power of Attorney holder from testifying on matters requiring principal's personal knowledge and cross-examination – Non-appearance of plaintiff in specific performance suits seen as detrimental – High Court rightly disallowed deposition of Power of Attorney holder in place of plaintiff. [Paras 8-13]

Delay and Limitation – Suit for specific performance filed on last day of limitation – Cited legal precedents stress prompt action in specific performance suits – Delays viewed unfavorably – Supreme Court found suit was filed with unreasonable delay despite knowledge of adverse sale – Specific performance denied. [Paras 14-18]

Decision: Appeal dismissed – High Court's judgment and decree upheld – Suit for specific performance denied due to lack of valid agreement by all co-owners, plaintiff's non-appearance, and delay in filing suit. [Paras 19-20]

Electricity Law – Deemed Distribution Licensee Status for SEZ Developer – Appeal under Section 125 of the Electricity Act, 2003 – Appellant SEZ developer challenges orders requiring additional capital infusion for deemed distribution licensee status – Court held that SEZ developers automatically gain deemed distribution licensee status under 2010 Notification, without needing further application – Additional capital infusion requirement imposed by TSERC and upheld by APTEL found unjustified and contrary to statutory scheme – Condition for capital infusion excluded – Appeal partly allowed. [Paras 1-38].

Statutory Interpretation – Applicability of Capital Adequacy Rules to Deemed Licensees – Court held that 2005 Rules and regulation 12 of the 2013 Regulations do not apply to SEZ developers deemed to be distribution licensees under the 2010 Notification – Emphasized that reading up of regulation 12 to include deemed licensees is impermissible – Distinction maintained between regular applicants and deemed licensees. [Paras 26-36].

Decision – Appeal Partly Allowed – Held – TSERC and APTEL's orders are set aside to the extent they require additional capital infusion by appellant – TSERC’s grant of deemed licensee status to appellant upheld, excluding condition of additional capital infusion – Appeal allowed in these terms. [Paras 37-38].