Criminal Law - Companies Act, 2013 – Fraud – Cognizance on Private Complaint – Bar under Section 212(6) – Special Court took cognizance of offences under Sections 448 and 451 of the Companies Act on a private complaint alleging falsification of company records and fraudulent filings – Section 448 provides no independent punishment and makes the accused “liable under Section 447” – Held: Offence under Section 448 is an offence “covered under Section 447” and therefore attracts the statutory bar under the second proviso to Section 212(6) – Cognizance cannot be taken except on a complaint by the Director, SFIO or authorised Central Government officer – Cognizance under Sections 448 and 451 on a private complaint is without jurisdiction [Paras 21–35, 41–45].

Statutory Interpretation – Companies (Amendment) Act, 2015 – Meaning of ‘offence covered under Section 447’ – Post-2015 amendment, Section 212(6) substituted earlier enumeration of sections by expression “offence covered under Section 447” – Legislative intent was to confine stringent bail conditions to fraud, not to dilute safeguard against frivolous prosecutions – Expression includes offences which, upon proof, entail punishment under Section 447 – Section 448 being inextricably linked to Section 447 cannot be read in isolation [Paras 27–34].

Quashing of Proceedings – Section 451, Companies Act – Section 451 applies only in case of repeated default of a substantive offence – Once cognizance under Section 448 itself is barred and quashed, offence of repeated default under Section 451 cannot survive – Proceedings under Sections 448 and 451 liable to be quashed in entirety [Paras 46–47].

Judicial Discipline – Coordinate Bench Decisions – Earlier judgment of the same High Court holding that private complaint for offences attracting Section 447 is barred was not noticed in impugned order – Failure to follow judicial comity and stare decisis deprecated – High Court ought to have followed earlier view or referred matter to larger Bench [Paras 36–38].

Companies Act and IPC – Jurisdiction of Special Court – Section 436(2) – Special Court may try IPC offences only when it is trying an offence under the Companies Act – Once Companies Act offences are quashed, Special Court ceases to have jurisdiction to try IPC offences – Complaint to be transferred to court of competent territorial jurisdiction – Distinction from cases under Companies Act, 1956 noted [Paras 48–54].

Criminal Proceedings vis-à-vis Civil/Corporate Disputes – Pendency of civil suits and proceedings before NCLT relating to management and control of company does not ipso facto bar criminal prosecution – Allegations disclose prima facie criminality under IPC – No ground to quash IPC offences at threshold – Criminal proceedings for IPC offences to continue independently [Paras 55–57].

Decision – Appeals partly allowed – Impugned judgment of High Court set aside – Cognizance and proceedings under Sections 448 and 451 of the Companies Act quashed – Proceedings under IPC to continue before court of competent jurisdiction after transfer – No opinion expressed on merits of IPC offences – No order as to costs [Paras 59–61].

POCSO Act – Bail – Cancellation – Heinous Sexual Offences against Minor – Grant of Bail by High Court set aside – Accused granted bail by High Court in a case involving allegations of repeated aggravated penetrative sexual assault, gang rape, abduction and intimidation of a minor girl aged about 14 years – Charges attracted punishment of life imprisonment and death under BNSS and POCSO Act – Victim’s statement under Section 183 BNSS disclosed repeated sexual assault under threat with firearm and recording of acts for blackmail – Medical and counselling reports corroborated trauma and gravity of offence – Held: Grant of bail was manifestly perverse and legally unsustainable – High Court ignored material evidence and statutory rigour of POCSO Act – Bail cancelled [Paras 11–17].

Bail Jurisprudence – Relevant Factors Ignored – Miscarriage of Justice – High Court failed to consider nature and gravity of offence, severity of punishment, vulnerability of minor victim, and likelihood of witness intimidation – Undue reliance placed on delay in FIR and speculative observations regarding victim’s age – Bail order suffered from material non-consideration and misdirection in law warranting interference by Supreme Court [Paras 12–16].

Consent – Minor Victim – Irrelevance under POCSO Act – Victim’s date of birth established through school records and medical opinion – Victim undisputedly a minor at the time of offence – Statutory presumption under POCSO Act applies – Plea of consensual relationship wholly untenable in law and liable to be rejected at threshold [Paras 5.3–5.4, 11].

Delay in FIR – Sexual Offences against Children – Not Fatal – Delay in lodging FIR sufficiently explained by intimidation, threats and psychological trauma suffered by minor victim – Delay by itself cannot dilute seriousness of offence or justify grant of bail in POCSO cases at the bail stage [Paras 13, 16].

Cancellation of Bail – Principles Reiterated – Bail can be cancelled not only on proof of supervening circumstances but also where the order granting bail is perverse, ignores relevant material or results in miscarriage of justice – Absence of misuse of liberty is not decisive where bail order itself is legally infirm [Paras 16–17].

Witness Protection – Victim Safety – Paramount Consideration – Victim and accused residing in same locality – Post-bail intimidation alleged, resulting in victim discontinuing school due to fear – In offences involving sexual assault on children, protection of victim and preservation of fair trial assume overriding importance [Paras 9.2, 15].

Decision: Criminal appeal allowed – Impugned order dated 09.04.2025 granting bail set aside – Bail granted to Respondent No. 2 cancelled – Accused directed to surrender within two weeks, failing which coercive steps to be taken – Trial Court directed to conduct trial expeditiously [Paras 17–19].

Negotiable Instruments Act – Section 138 – Multiple Cheques – Same Underlying Transaction – Distinct Causes of Action – Complainant entered into Agreement to Sell with accused firm – On failure to execute sale deed, multiple cheques issued by firm and proprietor from different accounts on different dates – Each cheque presented separately and dishonoured independently – High Court quashed one complaint holding parallel prosecution impermissible – Held: Each dishonour of a cheque gives rise to an independent cause of action – Merely because cheques arise from same transaction does not bar multiple complaints – Quashing amounted to premature adjudication of disputed facts – Complaint restored [Paras 33–35].

Criminal Procedure Code – Section 482 – Inherent Powers – Limits on Quashing – Mini Trial Impermissible – High Court examined whether personal cheques were issued in substitution of firm’s cheques – Determination involved disputed questions of fact regarding intention and understanding between parties – Held: High Court exceeded jurisdiction by evaluating factual controversies – Such issues must be left for trial – Quashing at threshold not justified where ingredients of offence are disclosed [Paras 26–29, 34–35].

Cheque Dishonour – Presumption of Legally Enforceable Debt – Section 139 NI Act – Accused contended that no liability subsisted and excess amounts were claimed – Statutory presumption operates once issuance and dishonour of cheque established – Burden lies on accused to rebut presumption during trial – High Court rightly refused to quash remaining complaints – Defence cannot be examined under Section 482 CrPC [Paras 40–44].

Multiplicity of Proceedings – Estoppel – Not Applicable at Threshold – Argument that complainant exhausted remedy by presenting one set of cheques rejected – Presentation of different cheques drawn on different accounts does not attract estoppel – Whether cheques were alternative securities or supplementary assurances is a mixed question of fact – To be adjudicated in evidence [Paras 34–35].

Decision – Appeal by complainant allowed – High Court order quashing Complaint Case No. 3298 of 2019 set aside – Complaint restored for trial – Appeals by accused dismissed – All complaints under Section 138 NI Act to proceed independently – Observations not to prejudice trial [Paras 45–46].

Taxation - Motor Vehicles Act – Section 2(28) – Definition of “Motor Vehicle” – Construction Equipment Vehicles – Exclusion Clause – Dumpers, loaders, excavators, dozers, surface miners and similar heavy earth moving machinery used exclusively within factory or enclosed premises – Though mechanically propelled and capable of movement, vehicles designed and adapted only for off-road industrial use – Second part of Section 2(28) expressly excludes vehicles of special type adapted for use only in factory or enclosed premises – Held: Such construction equipment vehicles stand excluded from definition of “motor vehicle” [Paras 36–39].

Constitution of India – Entry 57, List II – Power to Tax Vehicles – “Suitable for Use on Roads” – Taxing power confined to vehicles suitable for use on public roads – Vehicles not plying on roads and not deriving benefit from public road infrastructure cannot be subjected to motor vehicle tax – Gujarat Tax Act cannot travel beyond constitutional limitation under Entry 57 – Levy on off-road vehicles held unconstitutional [Paras 26–31, 44–45].

Gujarat Motor Vehicles Tax Act, 1958 – Section 3 – Charging Provision – Schedule I – Though Section 3 authorises levy on “all motor vehicles”, Schedule I does not prescribe any rate of tax for construction equipment vehicles – Absence of charging rate indicates legislative intent not to tax such vehicles – Tax demand unsustainable in absence of statutory rate [Paras 42–44].

Construction Equipment Vehicles – Rule 2(cab), Central Motor Vehicles Rules, 1989 – Statutory recognition of construction equipment vehicles as a distinct class – Designed for off-highway operations in mining, industrial and construction activities – Merely having “on or off highway capability” does not convert them into ordinary motor vehicles – Nature, design and actual use decisive [Paras 40–41].

Motor Vehicle Tax – Registration under MV Act – No Estoppel Against Law – Mere registration of vehicles under Motor Vehicles Act does not create liability to pay road tax – If vehicles are otherwise excluded from tax under statute and Constitution, registration cannot validate illegal levy [Paras 45–46].

Precedent – Bolani Ores Ltd. v. State of Orissa – Continued Applicability – Phrase “adapted for use upon roads” interpreted as “suitable for use on roads” – Vehicles used exclusively within enclosed premises not taxable – Principle reaffirmed – Later decisions distinguished for failure to consider exclusionary clause in Section 2(28) MV Act [Paras 45–52].

Distinction from Contrary Authorities – Decisions in Natwar Parikh, Western Coalfields, Jagannath Area etc. distinguished – Those cases did not examine statutory exclusion for special-type vehicles adapted for factory or enclosed premises – Not applicable to pure off-road construction equipment vehicles [Paras 47–53].

Decision – Appeals allowed – Judgments of Gujarat High Court set aside – Heavy earth moving machinery and construction equipment vehicles used exclusively within factory/enclosed premises held not liable for registration or road tax – Liberty reserved to authorities if such vehicles are found plying on public roads [Paras 55–56].

Criminal Law - Preventive Detention – Drug Offender – Public Order vs. Law and Order – Detention based on three criminal cases under NDPS Act alleging possession and peddling of Ganja – Mere registration of offences and pendency of bail applications insufficient to establish disturbance of “public order” – Absence of material showing harm, danger, alarm or widespread impact on public health – Held: Activities at best affect “law and order” and not “public order” as required under Section 2(a) of the Act [Paras 8, 10].

Preventive Detention – Subjective Satisfaction – Requirement of Relevant Material – Detaining authority relied upon criminal antecedents from 2016–2023 and apprehension of future offences upon grant of bail – No analysis as to insufficiency of bail conditions or actual breach thereof – Mechanical reproduction of statutory language without demonstrating nexus to public order – Detention order vitiated for non-application of mind [Paras 8–10].

Preventive Detention – Bail – Detention Not Substitute for Cancellation of Bail – Detention order passed primarily due to apprehension that detenu would be released on bail and continue illegal activities – Failure of State to seek cancellation of bail or show violation of bail conditions – Preventive detention cannot be used to circumvent ordinary criminal law or frustrate bail orders [Paras 8–9].

Extraneous Considerations – Intention to Detain “At Any Cost” – Detention order revealed predisposition of detaining authority to keep detenu in custody irrespective of available remedies under ordinary law – Reliance on antecedents without proximate live link to public order – Consideration of extraneous factors renders detention illegal [Paras 8–9].

Preventive Detention – Strict Construction – Exceptional Nature of Power – Law of preventive detention being a hard and extraordinary law must be strictly construed – Liberty cannot be curtailed unless case squarely falls within statutory framework – Ordinary criminal law to be preferred where sufficient to deal with alleged conduct [Paras 9–10].

Precedents – Application – Principles in Rekha v. State of Tamil Nadu and Ameena Begum v. State of Telangana applied – Preventive detention cannot be invoked merely because prosecution under ordinary law may not secure continued custody – Detention to be quashed where ordinary law remedies exist [Paras 5–6, 9].

Decision – Appeal allowed – Order of detention dated 10.03.2025 quashed – Judgment of Telangana High Court dated 28.10.2025 set aside – Detenu directed to be released forthwith unless required in any other case [Para 11].

Criminal Procedure Code – Section 482 – Quashing of Proceedings – Scope and Limits – High Court quashed prosecution holding dispute to be purely civil and relying on prior civil decree upholding settlement deeds – Supreme Court reiterates that inherent powers cannot be used to conduct a mini-trial or evaluate credibility of allegations – At quashing stage, allegations in FIR/complaint must be taken at face value – Where factual foundation discloses commission of cognizable offences, proceedings must be permitted to continue [Paras 22–25, 30–31].

Civil Dispute and Criminal Offence – Coexistence – Not Mutually Exclusive – Allegations of cheating, forgery and use of forged documents in execution of settlement deeds – Mere existence or conclusion of civil proceedings does not bar criminal prosecution – Civil adjudication does not determine criminal intent or culpability – Pendency or dismissal of civil suit cannot by itself justify quashing of criminal case [Paras 26–28].

Settlement Deeds – Alleged Fraud and Forgery – Triable Issues – Complaint alleged abuse of advanced age and medical vulnerability of executants, misuse of Power of Attorney and fabrication of documents – Such allegations disclose dishonest intention at inception – Whether settlement deeds were fraudulently obtained is a matter requiring evidence – Issues to be decided in trial and not under Section 482 CrPC [Paras 25, 31].

Delay in Lodging Complaint – Not a Ground for Quashing – High Court relied on six-year delay and conduct of complainant in remaining ex parte in civil proceedings – Held: Delay by itself is not a valid ground for quashing criminal proceedings at threshold – Effect of delay and conduct of complainant is a matter of appreciation of evidence during trial [Paras 29–30].

Power of Attorney – Alleged Misuse – Criminal Liability – Allegation that PoA conferred limited authority but was misused to secure settlement deeds in favour of attorney holder – Such misuse, if proved, may attract offences under IPC – Requires adjudication on evidence and cannot be pre-judged at quashing stage [Paras 14–16, 31].

Abuse of Process – Test Misapplied by High Court – High Court erred in treating criminal proceedings as misuse solely on basis of civil decree and complainant’s conduct – Criminal law cannot be short-circuited where allegations disclose offences requiring trial – Findings of High Court amounted to impermissible appreciation of facts [Paras 30–31].

Decision – Appeal allowed – Order of Madras High Court quashing proceedings set aside – Criminal Case No. 2 of 2023 restored for trial – All defences left open – Observations not to prejudice trial [Paras 32–33].

Criminal Law – FIR – Jurisdiction of Police Station – Anti-Corruption Bureau – High Court quashed FIRs registered under PC Act on ground that ACB Central Investigation Unit, Vijayawada was not notified as police station under Section 2(s) CrPC – Held: Approach hyper-technical and unsustainable – Declaration of ACB offices as police stations under G.O.Ms. No.268 dated 12.09.2003 continued to operate post bifurcation by virtue of Andhra Pradesh Reorganisation Act, 2014 [Paras 3, 21–24].

Police Station – Meaning – Section 2(s) CrPC – Definition of “police station” includes any post or place declared by State Government – A post held by police officer itself sufficient – No requirement of rigid or ritualistic notification if substance of declaration satisfied – Held: High Court erred in insisting on formal gazette notification ignoring statutory scheme [Paras 4, 22–24].

State Reorganisation – Continuity of Laws – Legal Fiction – Notifications, Government Orders and circulars having force of law prior to appointed day continue to apply to successor States unless altered or repealed – Sections 100–102 of AP Reorganisation Act create statutory continuity to avoid legal vacuum – Held: No fresh adoption required for Andhra Pradesh post bifurcation [Paras 7–10, 26].

Anti-Corruption Bureau – Jurisdiction after Bifurcation – Office of Joint Director, Central Investigation Unit, ACB, Hyderabad earlier had jurisdiction over undivided State – Upon relocation to Vijayawada, jurisdiction deemed to extend to residual State of Andhra Pradesh – Clarificatory G.O.Ms. No.137 dated 14.09.2022 only reiterated existing legal position – Held: FIRs validly registered [Paras 6, 16, 24].

Clarificatory Government Orders – Retrospectivity – Government Order issued by way of clarification does not operate retrospectively but merely explains existing law – High Court’s view that 2022 G.O. cannot cure defect held erroneous – Held: Clarification cannot invalidate earlier lawful actions [Paras 24–25].

Judicial Review – Quashing FIRs – Limits – FIRs quashed solely on technical jurisdictional objection without indicating competent forum – Resulted in stalling of anti-corruption investigations – Held: Such approach amounts to travesty of justice and defeats object of PC Act [Paras 21–24].

Prevention of Corruption Act – Public Interest – Interpretation – Construction leading to vacuum in investigation of corruption offences impermissible – Courts must adopt pragmatic and purposive interpretation to advance anti-corruption regime – Held: Hyper-technical view undermines rule of law [Paras 22–26].

Decision: Appeals allowed – Impugned judgment of High Court set aside – FIRs restored – Appellants permitted to proceed with investigation – No further challenge to FIRs maintainable before High Court – Investigation to be completed within six months – No coercive steps against respondents during investigation – Liberty granted to challenge charge-sheets on other grounds after investigation.

Service Law – Appointment to Public Post – Ayurvedic Staff Nurse – Legitimate Expectation – Mere admission to training course not conferring right to appointment – Respondents completed Ayurvedic Nursing Training from Government institutions and claimed appointment as a matter of right based on past practice – High Court directed consideration of candidature on doctrine of legitimate expectation – Held: Advertisement and Government Orders never assured automatic appointment – Bond condition applied only if candidate was selected and appointed – No vested right accrued merely on completion of training [Paras 19–21].

Service Jurisprudence – Policy Change – Expansion of Training Institutions – Increased availability of candidates – Initially only one Government institution with 20 seats and appointments were given due to surplus vacancies – Subsequent policy change permitting private institutions resulted in exponential rise in trained candidates – Held: Past practice based on old factual matrix cannot create enforceable expectation after substantial policy shift [Paras 18, 20–21].

Doctrine of Legitimate Expectation – Scope and Limitations – Legitimate expectation is not a legal right but an expectation based on consistent promise or practice – To succeed, claimant must establish legitimacy of expectation and violation of Article 14 – Respondents failed to show any promise of appointment or discriminatory treatment – Doctrine held inapplicable in changed policy regime [Paras 21, 25–27].

Equality Clause – Article 14 – No Discrimination Established – No candidate admitted after 2010–11 was granted appointment under old system except pursuant to court orders – Respondents unable to point out any similarly situated person appointed directly – Held: No unequal treatment of equals and no arbitrariness by State [Paras 22, 27].

Recruitment Process – Statutory Rules and Selection Authority – Post of Ayurvedic Staff Nurse brought under UPSSSC after notification dated 15.12.2014 – Statutory service rules notified only in 2021 – Recruitment thereafter to be only through prescribed selection process – Direct appointment without selection impermissible [Paras 8, 22, 27].

Precedent – Distinction from N. Suresh Nathan Case – Earlier decision dealt with interpretation of service rules based on consistent departmental practice – Present case involved absence of statutory rules earlier and complete policy shift – Reliance held misplaced [Paras 23–24].

Decision: Appeals allowed – Impugned judgments of the High Court set aside – No direction for appointment – Respondents may participate in future selection subject to eligibility – Pending applications disposed of [Para 28–29].

Arbitration – Scope of Judicial Interference – Sections 34 and 37 of the Arbitration Act – Arbitral award granting idle time compensation for Backhoe Dredger (BHD) was upheld under Section 34 by Single Judge – Division Bench under Section 37 reversed award interpreting contract differently – Supreme Court held that appellate jurisdiction under Section 37 is narrower and cannot extend beyond Section 34 – Reversal of award unsustainable [Paras 20–22, 30–32, 36–38, 50–52].

Arbitration – Contract Interpretation – Tribunal’s view prevails – Tribunal interpreted Clauses 38, 41.1, 41.2, and 51.1 of License Agreement to uphold idle time claim for BHD – Court reiterated that tribunal's interpretation, when reasonable and accepted under Section 34, cannot be revisited under Section 37 – Deployment of BHD not contrary to contract terms – Award is a speaking award without patent illegality [Paras 29, 39–49].

Arbitration Law – Public Policy and Patent Illegality – No violation of public policy or fundamental principles of justice found – Arbitral award not suffering from patent illegality – Respondent’s reliance on Ssangyong Engineering misplaced – Award based on valid reasoning and evidence [Paras 28, 41–44].

Arbitration – Contractual Compensation – Clause 38 not exhaustive – Tribunal rightly found that BHD, even if not classified as major dredger, was entitled to idle time compensation under Clause 51.1 – Licensing terms did not bar such claims for minor equipment – Tribunal's view held as plausible and within its jurisdiction [Paras 42–48].

Decision: Appeal allowed – Division Bench judgment under Section 37 set aside – Arbitral award in favour of appellant-Dredging India restored – No order as to costs.