Criminal Law - Quashing of Proceedings - Code of Criminal Procedure 1973 - Section 482 - Banking Fraud and Settlement - Appellant No 2 was a proprietary firm managed by the elder brother of Appellant No 1 which availed credit facilities from UCO Bank starting in 2006 - Following the death of the elder brother in 2009 Appellant No 1 took over management - Due to financial constraints the account was declared as NPA in 2010 and SARFAESI proceedings were initiated - Bank filed an Original Application before DRT Jabalpur for recovery of Rs 6.49 crores - A compromise proposal of Rs 4.25 crores was approved by the Bank Management Committee in 2015 certifying that there were no lapses in documentation - Appellants paid the entire amount and a no dues certificate was issued - DRT recorded the settlement and dismissed the bank recovery application as withdrawn in October 2015 - After a gap of more than two years in February 2018 the Bank lodged a complaint with the CBI alleging that the Appellants in collusion with bank officials defrauded the bank by substituting valuable mortgaged property with encroached property and using forged audit reports for limit enhancement - CBI filed a chargesheet under Sections 420 and 471 IPC while dropping PC Act charges as no proactive role was found for bank officials - High Court dismissed the quashing petition holding that a triable offence was made out - Supreme Court noted that the dispute arose from banking transactions having an overwhelmingly civil flavour and had reached a voluntary and final settlement - Held - continuation of criminal proceedings after a full settlement of dues which had the imprimatur of a judicial forum like the DRT would be oppressive and would amount to an abuse of the process of the court - the possibility of conviction is remote and bleak - appeal allowed and proceedings quashed - [Paras 1-29].

Criminal Law - Inherent Power - Code of Criminal Procedure 1973 - Section 482 - Commercial Disputes - Guidelines for quashing non-compoundable offences - Distinction between compounding under Section 320 CrPC and quashing under Section 482 CrPC - Power to quash is of wide plenitude and must be exercised to secure ends of justice or prevent abuse of process - While heinous crimes like murder or rape cannot be quashed based on settlement criminal cases having a predominantly civil flavour arising from commercial or financial transactions stand on a different footing - Held - in such cases where the offender and victim have settled their dispute and the continuation of the case would cause oppression the High Court is justified in quashing proceedings - timing of the settlement is a crucial factor especially when reached after long-standing litigation - [Paras 19-21.1 and 27].

Criminal Law - Good Faith and Delay - Indian Penal Code 1860 - Sections 420 and 471 - Fraud in Banking Transactions - Bank suspected fraud in 2013 but chose to wait and maximize recovery through a compromise settlement in 2015 - Complaint was lodged with CBI only after three years of settlement - Compromise agreement itself stated no document tampering or irregularities existed - Held - the conduct of the respondent bank betrays a lack of good faith as they treated the matter as a fraud only as an afterthought after liquidating the account - permitting such prosecution would adversely impact the sanctity of banking settlements and the overall economy - [Paras 25-28].

Evidence Law - Forgery and Cheating - Indian Penal Code 1860 - Sections 415, 420, 464, 470 and 471 - Essential ingredients - Section 420 requires fraudulent or dishonest inducement leading to delivery of property - Section 471 requires use of a forged document as genuine with knowledge of it being forged - Sine qua non is the presence of fraudulence or dishonesty - Held - where the transaction was a banking one and the bank itself verified properties and audit reports before enhancement and subsequently signed an unconditional compromise the elements of cheating are not sustainable after settlement - [Paras 16-16.3 and 17].

Decision: Appeal allowed – High Court order dated 05.07.2024 set aside – Chargesheet dated 27.11.2018 and charge framing order dated 20.02.2023 quashed.

Arbitration Law - Jurisdictional Challenge - Arbitration and Conciliation Act 1996 - Sections 14 and 16 - Madhya Pradesh Madhyastham Adhikaran Adhiniyam 1983 - Sections 7 and 20 - Finality of Litigation - Appellant entered into a Concession Agreement for a road project on Build-Operate-Transfer basis - Disputes arose leading to termination of agreement by Appellant - Arbitral Tribunal constituted under 1996 Act - Appellant initially challenged jurisdiction before District Court and High Court contending that the dispute must be heard by the Tribunal under the local Adhiniyam - High Court in earlier writ proceedings held that 1996 Act applied and that the agreement was not a works contract - That order attained finality after Supreme Court dismissed SLP and Review Petition - Appellant again raised jurisdictional plea in the present appeal relying on subsequent overruling of the earlier precedent - Held - Jurisdictional issue attained finality inter-se the parties and cannot be resurrected - Doctrine of issue estoppel applies - Once appellate remedies and review jurisdiction are exhausted the dispute is settled for eternity in the eye of law even if a precedent is subsequently overruled - Plea also barred by Section 16-2 as it was raised after filing statement of defence - Appellant's conduct shows complete acquiescence to 1996 Act process - [Paras 11-14 and 41-65].

Arbitration Law - Scope of Interference - Arbitration and Conciliation Act 1996 - Sections 34 and 37 - Minimal Judicial Interference - Nature of Jurisdiction - Narrowly circumscribed grounds - Held - Jurisdiction under Section 34 is not an appellate forum - Court cannot correct errors of fact or reappreciate evidence or substitute its own interpretation of contract if the Tribunal's view is plausible - Appellate power under Section 37 is even more constrained - The structure of appeal is a narrowing pyramid where higher courts have lesser propensity to interfere - Deference must be given to the Arbitral Tribunal as the final authority on evidence and contractual interpretation - [Paras 24-40 and 74].

Civil Law - Termination Payment - Concession Agreement - Arbitration and Conciliation Act 1996 - Section 34-2-a-iv - Scope of Reference - Appellant contended that Tribunal travelled beyond scope of reference by awarding termination payment when the claim was for value of work done - Held - Harmonious construction of the Concession Agreement - The claim for termination payment was covered under the broad heads of claims raised and contested - Interpretation of Clause 32-6 by the Tribunal as an independent mandatory payment clause is a plausible view - Mere existence of a different possible view is insufficient to set aside an award - No perversity found in awarding termination payment inclusive of debt due to the respondent rather than the lender as privity of contract exists only between the parties to the agreement - [Paras 66-71].

Arbitration Law - Interest - Party Autonomy - Arbitration and Conciliation Act 1996 - Section 31 - Pre-award and Post-award Interest - Appellant challenged pre-award interest of 14-75 percent and post-award interest of 18 percent as exorbitant - Held - Pre-award interest was contractually agreed as SBI PLR plus 2 percent - Post-award interest of 18 percent was as per the statutory rate under the unamended Section 31 - Party autonomy is the backbone of arbitration - Courts must uphold the bargain between parties unless the rate is so perverse as to shock the conscience - Conduct of Appellant in delaying payments for 19 years warrants no interference with interest rates - [Paras 72-73].

Decision: Appeal dismissed – Impugned orders of High Court and District Court affirmed – Registry of High Court directed to release deposited amounts to Respondent within two weeks – Appellant directed to pay balance amount with accrued interest within three months.

Writ Law - Delay in Judgment - Constitution of India - Articles 21 and 142 - Mandatory Guidelines - Supreme Court addressed various Writ Petitions seeking the pronouncement of reserved judgments pending indefinitely in High Courts - Lead case involved life convicts whose appeals were heard in early 2022 but remained pending for years - Court noted a startling picture of delays and expanded the proceedings to frame pan-India guidelines - Identified a statutory lacuna as no specific outer limit for High Court judgments is provided in CPC or CrPC unlike Trial Courts - Observed that delay violates Article 21 rights especially for those in custody - Invoked Article 142 to provide a structured framework - Held - Binding directions issued - High Courts must endeavour to pronounce reasoned judgments within 3 months of reservation - Special promptitude required for bail and personal liberty matters - Chief Justices to exercise administrative oversight through automated monitoring - Litigants permitted to seek early pronouncement or case re-assignment after 3 to 6 months of delay - [Paras 1-26].

Constitutional Law - Personal Liberty - Constitution of India - Article 21 - Ratio Decidendi - Court held that the right to life and personal liberty extends to every stage of a proceeding including the delivery of judgment - Delay in pronouncement is as much a violation of rights as a denial of a hearing - Regularity in pronouncing judgments sustains public trust in judicial institutions - Held - Convicts or accused awaiting decisions cannot be expected to accept judicial silence with equanimity - [Paras 9-11].

Procedural Law - Judicial Accountability - Constitution of India - Article 142 - Transparency Measures - Directions issued to improve transparency and monitoring of reserved matters - Benches must seek clarifications in criminal appeals within 7 days of reservation and 1 month for other cases - Reasoned judgments must be uploaded within 24 hours of open court pronouncement - High Court websites must reflect reservation status and upload dates - Automated emails to be sent to Chief Justices regarding pending reserved judgments beyond 1 month - Held - Registrars General directed to incorporate guidelines into High Court Rules and websites - [Paras 16-17].

Decision: Writ Petitions disposed of – Comprehensive binding guidelines issued under Article 142 for all High Courts to ensure timely pronouncement of judgments and upload of orders – Registrars General directed to place guidelines before respective Chief Justices for immediate implementation.

Securities Law - Fraud and Manipulation - Securities and Exchange Board of India Act 1992 - Sections 11 and 11B - PFUTP Regulations 2003 - Regulations 2(1)(c), 3 and 4 - Appellant 1 holding 75 percent stake in subsidiary RPL decided to divest 5 percent - Took short futures positions for 9.92 crore shares through 12 agents via principal-agent agreements to hedge against expected price correction - SEBI Whole Time Member found that Appellants cornered over 93 percent of open interest in breach of position limits and depressed the settlement price by dumping 1.95 crore shares in the last 10 minutes of the settlement day - SAT majority upheld the order for disgorgement of 447.27 crore plus interest - Supreme Court found that the 2001 SEBI Circular did not ban exceeding position limits but only mandated disclosure which the appellant failed to do - Court further observed that the short positions were valid anticipatory hedges against a much larger cash segment exposure of 22.5 crore shares - Sale in last 10 minutes was a genuine commercial decision to raise funds amid an unexpected price hike and not a pre-planned strategy to depress prices - Held - Finding of fraud and manipulation unsustainable as SEBI failed to prove inducement or fraudulent intent - Disgorgement order set aside - Penalty for disclosure violation regarding position limits under 2001 SEBI Circular upheld - Appeals partly allowed - [Paras 1-231].

Securities Law - Definition of Fraud - PFUTP Regulations 2003 - Regulation 2(1)(c) - Inducement - Interpretation - Broad and inclusive definition - Inducement to deal in securities is a sine qua non for establishing fraud except where manipulation is clinchingly established - Cornering positions gives the ability to manipulate but does not by itself constitute manipulation - In a cash settlement regime no physical delivery is required and trades do not naturally induce others after positions are closed - Proof of deceitful intention becomes mandatory where injury to third parties is not established - Held - Respondent failed to discharge the higher burden of proof required to establish manipulation in the absence of evidence of inducement - [Paras 161-180].

Securities Law - Valid Hedging - Securities Contracts (Regulation) Act 1956 - Section 18A - Validity of derivatives contracts - Test for hedging vs speculation - Existence of related commercial position exposed to risk - Appellant sought to mitigate risk of price fall during sale of 22.5 crore shares - Perfect 1:1 ratio between hedge and stock is not a legal requirement - Anticipatory hedging is a valid risk mitigation tool - No statutory mandate for a written hedging policy or specific board resolution existed in 2007 - Held - Short positions of 9.92 crore shares were valid hedges and not fraudulent devices - [Paras 181-193].

Securities Law - Market Manipulation - Dumping of shares - Last 10 minutes of trading - Price discovery - Appellant sold 1.95 crore shares at prices above its historical cut-off of 208-210 rupees per share - Transaction occurred during a sudden and unknown price spurt - As a 70 percent promoter shareholder a decrease in share price would adversely impact the appellant's own valuation - Held - Motives and suspicions cannot be the basis for holding fraudulent intent - SEBI failed to prove that the sale was intended to depress prices for profits in the futures segment - [Paras 201-226].

Decision: Appeals partly allowed – Finding of fraud under PFUTP Regulations and order of disgorgement set aside – SEBI directed to refund 250 crore deposited by the appellant – Penalty for violation of disclosure requirements under 2001 SEBI Circular upheld.

Service Law - Termination of Probationer - Vijaya Bank (Officers’) Regulations 1982 - Regulation 16(3)(a) - Respondent No. 1 was appointed as Assistant General Manager (Networking) on probation - Bank suspended him on allegations of unauthorizedly taking confidential files but later revoked the suspension without prejudice to disciplinary proceedings - Probation was extended twice citing unsatisfactory performance and subsequently terminated under Regulation 16(3)(a) - High Court quashed the termination as arbitrary and based on irrelevant considerations - Bank appealed contending termination was simpliciter - Supreme Court observed that the Bank relied on three performance memos which were either factually contradicted by government appreciation letters or related to technical errors by third parties or were never communicated to the employee - Office notes revealed the Bank initially sought major penalty for misconduct but chose the probation regulation as a shortcut to avoid an onerous enquiry - Held - The alleged misconduct was the real foundation and not just the motive for termination - The Bank used unsatisfactory performance as a guise to bypass due process - What cannot be done directly cannot be done indirectly - Termination order held legally unsustainable - [Paras 1-45].

Administrative Law - Discretionary Power - Constitution of India - Articles 14 and 16 - Power of employer to terminate probationer - Bank contended absolute discretion under Regulation 16(3)(a) to terminate during probation without assigning reasons - Court held that even in contractual or probationary service of the State the discretion is not unchecked - Subjective satisfaction must be rooted in objective facts such as performance appraisals or specific assessments - Termination driven by personal bias or used to bypass a required enquiry is liable to be set aside - Held - Employer must act with fairness and transparency - Discharge was arbitrary due to lack of substantiated material on performance - [Paras 19-24].

Evidence Law - Uncommunicated Adverse Remarks - Natural Justice - Bank relied on a memo dated 31.10.2005 alleging the employee harassed a field engineer - Respondent No. 1 argued this memo was never served - Court noted that the Bank failed to demonstrate communication of the memo - Held - Uncommunicated adverse remarks or charges cannot be read to the prejudice of an employee - Reliance on such material violates principles of natural justice and lacks value in the eyes of law - [Paras 35-36].

Service Law - Backwages - Relief - Upon finding the termination order bad in law - Court considered the peculiar facts and the superannuation of the employee - Held - Respondent No. 1 entitled to 50% backwages from the date of termination until the date of superannuation with all consequential benefits notionally - [Para 46].

Decision: Appeal disposed of – Order of the High Court quashing the termination affirmed – Directions issued for 50% backwages and notional benefits to be settled by Bank of Baroda within three months.

Civil Law - Arbitration in Suits - Arbitration Act 1940 - Section 21 - Mandatory Compliance - Plaintiffs-Appellants filed a suit for possession in 1982 - During pendency the parties referred the dispute to private arbitration - An award was passed on 15.09.1983 - Trial Court and High Court dismissed the suit holding the award had attained finality - Supreme Court observed that the 1940 Act envisioned three distinct modes of arbitration under Chapters II III and IV - Once a suit is pending between the parties the only valid route for referring the matter to arbitration is Section 21 under Chapter IV which requires a written application to the court where the suit is pending - Held - Any arbitral award passed without the leave of the Trial Court when a suit is already pending is not in compliance with the provisions of the 1940 Act - The arbitral proceedings conducted sans the mandatory requirements of Section 21 are legally ineffective as a bar to the suit - [Paras 30-46].

Civil Law - Arbitration Award as Compromise - Arbitration Act 1940 - Section 47 Proviso - Post-Award Consent - The Respondents contended that the award should be treated as a compromise of the suit - Supreme Court analyzed the proviso to Section 47 which allows an award obtained otherwise than in accordance with the Act to be considered as a compromise or adjustment of a suit - The Court held that the sine qua non for invoking this proviso is the post-award consent of all interested parties - In the present case the Plaintiffs consistently opposed the award and never consented to it being treated as a compromise - Held - In the absence of post-award consent the award cannot be given effect as a compromise under Order 23 Rule 3 CPC - The award remains unenforceable and cannot be used to non-suit the Plaintiffs - [Paras 48-58].

Civil Law - Validity of Arbitration - Arbitration Act 1940 - Section 21 - Knowledge of Pendency - The Defendants-Respondents claimed they were unaware of the 1982 suit at the time of reference to arbitration - Supreme Court held that knowledge of pendency is not a condition precedent for the applicability of Section 21 - The determinative factor is the fact of institution or pendency of the suit - Even otherwise the Defendants had been served summons before the award was passed and failed to seek leave of the court - Held - The award arising out of arbitral proceedings initiated without following the mandate of Section 21 cannot operate as a valid defence - [Paras 42-43 and 63].

Civil Law - Appellate Procedure - Code of Civil Procedure 1908 - Order 41 Rule 22 - Challenge to Adverse Findings - The Trial Court found that the Plaintiffs had validly purchased the property through a court auction in 1963 but dismissed the suit based on the arbitration award - The Respondents did not challenge these favourable findings for the Plaintiffs - Supreme Court noted that while a respondent need not file cross-objections to challenge adverse findings as long as the decree is in their favour such findings stand once the legal bar of the award is removed - Held - Since the award is unenforceable and the purchase of property is proved the suit for possession must be decreed - [Paras 59-60].

Decision: Appeal allowed - Judgment of the High Court and Trial Court set aside - Arbitration award dated 15.09.1983 held unenforceable qua the Plaintiffs - Decree for recovery of possession passed in favour of the Plaintiffs - Matter remitted for enquiry into mesne profits - Costs of Rs. 1,00,000/- imposed on Respondents.

Civil Law - DNA Test - Indian Evidence Act 1872 - Section 112 - Paternity dispute - Appellant challenged concurrent orders of Trial Court and Chhattisgarh High Court directing him to undergo DNA test to determine paternity of Respondent No. 1 - Respondent No. 1 filed civil suit for declaration of paternity and one-third share in property - Appellant contended DNA test cannot be compelled and suit was barred by res judicata due to previous maintenance proceedings under Section 125 CrPC - Supreme Court observed that while DNA tests are not ordered routinely they are permissible where paternity is directly in issue and other evidence is insufficient to reach the truth - Court found that previous findings in summary maintenance proceedings did not operate as res judicata against a full-dress trial in a civil suit - Held - Balance of interests lies in favour of the child seeking to establish biological parentage over the privacy rights of the alleged father - Appeal dismissed - [Paras 1-7].

Civil Law - Right to Privacy - Constitution of India - Article 21 - Balancing of interests - Appellant claimed right to privacy against DNA sample collection - Respondent No. 1 sought closure on biological identity - Court followed Ivan Rathinam v. Milan Joseph holding that courts must assess the child's legitimate interest in knowing their biological father against the social stigma of illegitimacy - Held - Privacy is not an absolute right and must yield to the eminent need for a DNA test when paternity is the central controversy - [Paras 5-7].

Civil Law - Res Judicata - Code of Civil Procedure 1908 - Section 11 - Applicability to summary proceedings - Appellant argued that earlier maintenance proceedings under Section 125 CrPC where paternity was not established barred the current civil suit - Court held that summary proceedings for maintenance do not constitute a final finding on paternity as would a full-dress civil trial - Held - Question of res judicata closed as the current civil suit specifically addresses the core issue of paternity - [Paras 3-6].

Decision: Appeal dismissed - Order of the High Court affirmed - Matter remanded to the concerned Civil Court to fix a date for the DNA test and proceed with the suit.

Civil Law - Revocation of Probate - Indian Succession Act 1925 - Section 263 - Limitation Act 1963 - Article 137 - Right to apply - Constructive Notice - Probate of Will granted to Appellant in 1995 - Respondents filed for revocation in 2022 alleging knowledge of the Will only in 2019 - Appellant proved service of notice in mutation proceedings related to the same property in 2013 - Respondents admitted receipt of notice but chose to ignore it as they had existing entries in their favor - Single Judge dismissed revocation application as time-barred - Division Bench reversed the order - Supreme Court analyzed the doctrine of constructive notice as a deeming fiction originating from equity - Found that service of a legal notice regarding property requires a reasonably prudent man to investigate the basis of such claim - Held - Wilful abstention from inquiry into the basis of mutation proceedings initiated by a third party constitutes constructive notice - The limitation period under Article 137 began running from 2013 and not 2019 - Application filed in 2022 is hopelessly time-barred - Division Bench judgment set aside - Single Judge order restored - [Paras 1-11].

Civil Law - Limitation - Limitation Act 1963 - Article 137 - Accrual of right to apply - Knowledge of facts - The ISA provides no specific limitation for revocation of probate making Article 137 applicable - Right to apply accrues from the date of knowledge - Knowledge includes constructive notice inferred by law through gross negligence or wilful abstention - Respondents failure to act upon a Court notice in 2013 precluded them from claiming limitation from 2019 - Held - Constructive notice of probate was established in 2013 through mutation notices - [Paras 5-11].

Decision: Appeal allowed – Judgment of the learned Division Bench set aside – Order of the learned Single Judge restored – Respondents application for revocation of probate dismissed as time-barred.

Civil Law - Review Jurisdiction - Code of Civil Procedure 1908 - Order 47 Rule 1 - Scope of Review - Batch of review petitions filed against the judgment in Anjuman Ishaat-e-Taleem Trust v State of Maharashtra - Petitioners alleged erroneous interpretation of RTE Act and NCTE Act regarding TET requirements for teachers appointed prior to 2010 - Court observed that review is not an appeal in disguise and is permissible only for errors apparent on the face of record - Error must be self-evident and not requiring long-drawn reasoning - Although parameters of Section 114 CPC were not strictly met the Court allowed open court hearing to satisfy audi alteram partem and address grievances of various States and teachers associations - Held - No palpable error found in the original judgment warranting a reversal of the legal position - [Paras 1-11].

Writ Law - Right to Education - Constitution of India - Article 21-A - TET as Constitutional Necessity - Challenge to the applicability of TET to in-service teachers - Petitioners argued that subsequent imposition of TET violates service jurisprudence and causes prejudice to validly appointed teachers - Court reiterated that TET is a constitutional necessity flowing from the right to quality education under Article 21-A - Operation of a statute for public good cannot be viewed as an evil - Educational welfare of children is paramount and cannot be sacrificed for the service interests of teachers - Held - TET is a mandatory eligibility condition for continuation in service and promotion irrespective of the date of recruitment - [Paras 3, 23-25, 28].

Civil Law - Statutory Interpretation - Right of Children to Free and Compulsory Education Act 2009 - Section 23 - Prospective vs Retrospective Application - Analysis of Section 23(1) and the provisos to Section 23(2) - Distinction between usage of word any person in sub-section 1 and teacher in the provisos - Sub-section 1 governs future appointments - First proviso to sub-section 2 specifically deals with teachers already in service at the commencement of the Act - 2017 Amendment Act provided a further window for compliance until 2019 - Court found that the legislature always intended for in-service teachers to meet minimum qualifications - Subordinate legislation including NCTE notifications cannot override the clear mandate of the parent statute - Held - Provisions of Section 23 do not result in a new condition of service but reflect a time-bound mechanism for maintaining educational standards - [Paras 12-20, 25].

Writ Law - Extension of Compliance Window - Constitution of India - Article 142 - Inherent Power and Pragmatic Approach - States and petitioners sought extension of the 2-year period granted in the original judgment to acquire TET - Concern raised that mass displacement of thousands of teachers would disrupt the edifice of public education - Court applied the principle from State of Nagaland v Lipok AO emphasizing substantial justice over a technical approach - While TET rigour cannot be diluted the practical repercussions on school functioning must be considered - Held - In exercise of power under Article 142 the Court extended the timeline for acquiring TET qualification from 2 years to 3 years - In-service teachers must now obtain the qualification by 31st August 2028 - [Paras 30-36].

Decision: Review petitions dismissed with modification – Compliance period for in-service teachers to acquire TET extended to 31st August 2028 – States directed to conduct TET preferably twice a year – No further extensions to be granted.