Contract of Guarantee – Discharge of Surety – Variance in Terms of Contract – Section 133, Indian Contract Act, 1872 – Principal borrower sanctioned cash-credit facility of Rs.4,00,000/- – Sureties guaranteed liability to said extent – Bank permitted borrower to overdraw amounts far exceeding sanctioned limit without consent of sureties – Held: Such overdrawal constitutes variance in terms of contract – Sureties discharged only in respect of transactions subsequent to variance – Liability continues to the extent of original sanctioned amount with applicable interest – High Court erred in holding that sureties must be liable either for entire amount or not at all – Statutory bifurcation under Section 133 mandated [Paras 7-7.4].

Surety’s Liability – Co-extensive Liability – Sections 126 and 128 – Liability of surety co-extensive with that of principal debtor unless contract provides otherwise – Creditor not bound to first exhaust remedies against principal debtor before proceeding against surety – Surety can be proceeded against directly – However, liability confined to terms of guarantee and cannot extend beyond contractual undertaking [Paras 4.1, 5.2, 5.3].

Discharge of Surety – Section 139, Indian Contract Act – Scope and Applicability – Section 139 applies where creditor’s act or omission is inconsistent with rights of surety and impairs surety’s eventual remedy against principal debtor – Mere overdrawal without consent, though affecting surety’s rights, does not impair eventual remedy against principal debtor – In absence of impairment of remedy, Section 139 not attracted – Section 139 is residuary in nature and distinct from Section 133 [Paras 4.8-4.10, 6.1, 7.1].

Material Alteration – Consent of Surety – Any material variance in contract without surety’s consent discharges surety as to subsequent transactions – Surety cannot be bound to obligations beyond terms of engagement – Discharge under Section 133 is not absolute but limited to transactions post-variance – Consent for variation must be proved by party seeking enforcement of guarantee [Paras 4.4-4.7, 7].

Decision: Appeal allowed – Impugned judgment of Gujarat High Court dated 25.06.2008 in Special Civil Application No.17125 of 2007 set aside – Sureties held liable to extent of Rs.4,00,000/- with applicable interest – Not liable for excess overdrawn amounts – Parties to bear respective costs [Paras 7.2-7.4].

Criminal Law – Limitation – Sections 468, 469(1)(c) and 473 CrPC – Complaint by Drugs Inspector regarding misbranded vaccine – Identity of accused emerged during investigation – Limitation to commence from date identity of offender became known – Complaint filed within three years from such date – Bar under Section 468 not attracted – High Court erred in computing limitation from earlier date – Held: Cognizance not barred by limitation [Paras 31-36].

Section 469(1)(c) CrPC – Commencement of limitation – Where identity of offender not initially known – Period begins from first day identity becomes known to investigating authority – Investigation to ascertain supply chain justified under Section 32 of Drugs and Cosmetics Act – Time starts from 18.04.2006 when identities crystallised – Complaint filed on 20.01.2009 within limitation [Paras 33-36].

Section 202 CrPC – Mandatory inquiry where accused resides beyond territorial jurisdiction – Complaint by public servant in discharge of official duty – Harmonious construction with proviso to Section 200 CrPC – Public servant placed on different pedestal – Magistrate not required to examine complainant on oath – Object of Section 202 is to prevent harassment of innocents – Ratio of Cheminova India Ltd. applied – High Court erred in quashing complaint solely for non-compliance of Section 202 – Order taking cognizance restored [Paras 37-40].

Distinction from Private Complaints – Birla Corporation Ltd. distinguished – Where complaint filed by public servant under statutory authority, stricter view under Section 202 not warranted in same manner as private complaint – High Court’s reliance misplaced [Paras 40.2].

Drugs and Cosmetics Act – Misbranding – Discrepancy between outer carton and inner vial label – Allegation that pentavalent vaccine carton contained tetravalent vial – Prima facie offence under Sections 17(b), 17(c) read with Section 18(a)(i) punishable under Section 27(d) – Matter to proceed to trial – Observations not on merits [Paras 7-9, 42-44].

Vicarious Liability – Section 34 of Drugs and Cosmetics Act – Directors of Company – Whether “in charge of” and “responsible to” company is question of fact – High Court prematurely quashed proceedings holding bald averment insufficient – Such determination to be made at trial – Complaint not liable to be quashed at threshold [Paras 56-59].

Government Analyst Report – In connected appeal relating to “not of standard quality” syringes – Report declaring product failed sterility test – Prosecution maintainable – Section 202 objection rejected in light of earlier findings – Proceedings restored [Paras 51-58].

Result – Appeal by State allowed – Impugned orders of High Court quashing complaints set aside – Orders taking cognizance and issuing summons restored – Accused Managing Director (since deceased) to be substituted by persons in charge at relevant time – Connected appeal by accused dismissed – No order as to costs [Paras 43-44, 48, 59-60].

Insolvency and Bankruptcy – Simultaneous CIRP – Principal Borrower and Corporate Guarantor – Section 60(2), IBC – Whether creditor can initiate parallel proceedings for same debt – NCLT/NCLAT relied on Vishnu Kumar Agarwal to bar second application once first admitted – Held: Issue squarely covered by BRS Ventures Investments Ltd. – IBC permits separate or simultaneous proceedings against corporate debtor and corporate guarantor – Liability of guarantor co-extensive under Section 128, Contract Act – Section 60(2) and (3) contemplate proceedings before same Adjudicating Authority – Bar on second application not sustainable – Orders rejecting initiation solely on ground of prior admission set aside [Paras 73–79, 105–106].

IBC – Not Pure Recovery Legislation – Admission under Section 7 – Scope of Discretion – Though recovery is incidental, IBC is primarily resolution-centric – Admission under Section 7 depends on existence of debt and default – Motive of creditor irrelevant if statutory conditions satisfied – Discretion under Section 7(5)(a) not arbitrary – Simultaneous proceedings cannot be declined merely on ground that Code is not recovery mechanism [Paras 68–72, 82–86].

Doctrine of Election – Inapplicability – Whether creditor must split claim between debtor and guarantor – Held: No statutory mandate requiring election – Election applies only where remedies are inconsistent – Proceedings against principal debtor and guarantor not inconsistent but co-extensive – Forcing election may extinguish balance claim due to ‘clean slate’ principle post resolution – No judicially imposed restriction permissible in absence of statutory proscription [Paras 87–95].

Clean Slate Principle – Effect on Claims – Once resolution plan approved, undecided or unfiled claims extinguished – Compelling creditor to file partial claim may result in forfeiture of remaining debt – Supports permissibility of full claim in each CIRP subject to adjustment [Paras 91–93].

Double Recovery – Safeguards under Regulations – Apprehension of unjust enrichment – Regulation 12A mandates creditor to update claim upon part/full satisfaction – Regulation 14 obligates Resolution Professional to revise admitted claims upon new information – Same debt cannot be realised twice – Adequate statutory safeguards exist – No blanket prohibition warranted [Paras 97–100].

Group Insolvency – Judicial Restraint – Though issue of consolidation and group insolvency raised – Insolvency Law Committee Report (February 2020) acknowledged concurrent proceedings and filing of claims in both CIRPs – Held: Laying down additional modalities or guidelines amounts to legislative exercise – Matter left to wisdom of Legislature and IBBI – Court declines to frame guidelines [Paras 101–104].

Decision: Civil Appeal Nos. 6093 of 2019, 6094 of 2019 and 2715 of 2020 allowed – Orders rejecting CIRP set aside – Leave granted in SLP (C) No. 21778 of 2019 and appeal allowed – Civil Appeal Nos. 827–828 of 2021, 4018 of 2023 and 7231 of 2024 dismissed – Civil Appeal No. 40 of 2020 dismissed with liberty to pursue independent proceedings – All other contentions on merits kept open [Paras 105–110].

Criminal Law – Rape on false promise of marriage – Section 376(2)(n) IPC – Quashing of FIR – Allegation of physical relationship on promise of marriage resulting in pregnancy – Prosecutrix married with two children and no allegation of divorce or separation – Relationship continued over months in consensual circumstances – Held: No element of inducement, coercion or deception; FIR liable to be quashed [Paras 5–8]

Consent – Scope and validity – Prosecutrix admitted long-term relationship, frequent interaction and voluntary participation – Relationship initiated and continued in circumstances indicating conscious consent – Held: Consent not vitiated by misconception of fact where no real possibility of marriage exists [Paras 7–8]

Promise to marry – False pretext – Essential ingredients – Where prosecutrix is already married, promise of marriage inherently implausible and incapable of inducing consent – Held: No deception can be inferred in such circumstances; allegation of false promise unsustainable [Paras 7–8]

Application of precedent – Amol Bhagwan Nehul v. State of Maharashtra – Principles relating to consensual relationship and absence of inducement applied – Court reiterated that consensual intimacy between adults, absent coercion or misrepresentation, does not constitute rape – Held: Case squarely covered by precedent [Para 7]

Factual matrix – Timing of events – Relationship from August 2023 to March 2024 – Appellant married another woman on 12.03.2024 – FIR lodged thereafter alleging quarrel post disclosure of pregnancy – Held: Sequence of events indicates consensual relationship and subsequent dispute, not criminal offence [Para 8]

DNA/FSL Report – Relevance – Pending forensic report regarding paternity of deceased child – Held: Even if paternity established, it does not alter nature of consensual relationship or constitute rape; no need to await report [Para 9]

Quashing of proceedings – Power under Section 528 BNSS – Where allegations in FIR, even if taken at face value, do not disclose offence – Continuation of proceedings amounts to abuse of process – Held: FIR and all consequential proceedings quashed [Para 9]

Decision: Appeal allowed – Impugned High Court order set aside – FIR No.127 dated 28.03.2024 quashed – All consequential proceedings terminated – Bail bonds cancelled.

Civil Law - Lease vs Licence – Construction of Registered Instrument – Unilateral Cancellation – Lis Pendens Purchasers – High Court reversed concurrent findings holding document to be licence and not lease – Supreme Court restored Trial Court and First Appellate Court decree – Held: Ext.1 created 99-year lease – Unilateral cancellation illegal – Sale by lessor could not defeat subsisting leasehold rights [Paras 14-23].

Lease or Licence – Test of Intention – Literal Rule of Construction – Document must be read as a whole – Substance prevails over form – Where instrument uses expressions “demise”, fixed term of 99 years, yearly rent, right to construction and binding successors clause – It clearly transfers interest in immovable property – Exclusive possession to be assessed qua demised portion – Mere retention of first floor by lessor does not convert lease into licence [Paras 15-21].

Interpretation of Deeds – Literal, Golden and Purposive Construction – Ex-post facto conduct not safest guide – Courts should rely on plain and ordinary meaning when language is clear – Resort to surrounding circumstances only when ambiguity exists – High Court erred in relying on post-execution conduct to infer licence despite clear language of deed [Paras 17-21].

Transfer of Property Act, 1882 – Section 105 – Lease Defined – Essential ingredients satisfied – Transfer of right to enjoy property for certain term in consideration of rent – Lessee entitled to possession to exclusion of lessor in respect of demised premises – Ext.1 satisfied statutory ingredients – Hence created leasehold interest [Paras 15, 20].

Unilateral Cancellation of Registered Lease – Absence of cancellation clause – No proof of determination under Section 111 TPA – Rights accrued under registered lease cannot be defeated by unilateral deed of cancellation – Such cancellation illegal and non-est – Disturbance of possession without bilateral agreement impermissible [Paras 10.2, 21].

Second Appeal – Section 100 CPC – Substantial Question of Law – High Court framed question whether sale could be effected during subsistence of lease – Having wrongly construed document as licence, High Court dismissed suit – Supreme Court held construction contrary to settled principles – Interference warranted [Paras 11, 12, 21].

Rights of Subsequent Purchasers – Sale during pendency of litigation – Purchasers stepped into shoes of lessor – Rights preserved subject to subsisting lease – Sale does not extinguish lessee’s 99-year interest – Vendees entitled only to lessor’s reversionary rights [Paras 10.3, 22].

Decision: Civil Appeal allowed – Judgment of High Court set aside – Judgment and decree of Trial Court and First Appellate Court restored – 99-year lease upheld – Unilateral cancellation declared illegal – No order as to costs – Pending applications disposed of [Paras 22-23].

Constitution of India – Article 21 – Right to Life and Personal Dignity – Rights of Prisoners – Confinement and Rehabilitation – Held: Prisons are not spaces where constitutional values cease to operate. The guarantee of life and personal dignity under Article 21 extends beyond prison gates, obliging the State to ensure incarceration does not degenerate into inhumanity. Overcrowding strikes at the core of the constitutional promise. Incarceration should be viewed not merely as punitive deprivation of liberty but as an opportunity for reformation and restoration of dignity. [Paras 1, 33-34, 48]

Prison Reforms – Open Correctional Institutions (OCIs) – Reformative and Rehabilitative Penology – Overcrowding in Closed Prisons – Held: OCIs constitute one of the most effective, humane, and sustainable responses to congestion in closed prisons. They are vital mechanisms for translating the reformative ideal of punishment into institutional reality. Despite judicial exhortations since 2018, response from several States has been marked by apathy. OCIs must be firmly embedded as integral components of a humane correctional system rather than being treated as peripheral experiments. [Paras 4, 10, 45, 61]

Constitution of India – Articles 14 and 15 – Gender Discrimination – Exclusion of Women Prisoners from OCIs – Held: Empirical data reveals a deeply troubling pattern of excluding women from OCIs across several States. Systemic exclusion of women from beneficial regimes like open prisons is contrary to domestic norms and international standards (Nelson Mandela Rules and Bangkok Rules). Speculative security grounds cannot justify the denial of the right to reformation. Failure to transfer eligible women prisoners to OCIs constitutes blatant gender discrimination violative of Articles 14, 15(1), and 15(3). [Paras 49-54, 74]

Prison Administration – Fiscal Prudence – Cost-Effectiveness of OCIs vs. Closed Prisons – Comparative Study – Held: Data from Rajasthan indicates a massive cost differential; per-prisoner per-day expenditure in closed prisons is approx. Rs. 333.12 compared to approx. Rs. 49.60 in open prisons. OCIs are fiscally rational, requiring lower infrastructure costs and minimal staff (prisoner-staff ratio of 80:1 in open vs. 6:1 in closed). OCIs promote financial independence and reduce fiscal stress on the State. [Paras 4, 66-68, 71-72]

Administrative Law – Lack of Uniformity – Common Minimum Standards (CMS) – Arbitrary Eligibility Criteria – Held: Stark lack of uniformity exists among States regarding eligibility for OCI transfer, with prior incarceration requirements varying from 4 to 21 years. Such divergence results in arbitrariness and unequal access to reformative opportunities. There is a pressing necessity for the formulation of Common Minimum Standards to ensure baseline uniformity in living conditions and rehabilitative programs. [Paras 62-65]

Decision: The Supreme Court issued comprehensive operative directions including:

Constitution of a High-Powered Committee (HPC) for Reform and Governance of OCIs, chaired by Justice (Retd.) S. Ravindra Bhat, to formulate Common Minimum Standards and Standardised Eligibility Assessment Protocols;

Directing States lacking OCIs to undertake feasibility assessments and establish such facilities or open barracks within three months;

Mandating the filling of existing vacancies in OCIs within a time-bound protocol;

Directing all States to eliminate gender-based exclusion from OCIs and evolve gender-sensitive mechanisms;

Exhorting all High Courts to register suo motu writ petitions to monitor the implementation of these directions as a continuing mandamus. [Paras 73-80]

Land Law – Regularisation of Occupation – Section 123(2) U.P. Z.A. & L.R. Act – Legal fiction and non-obstante clause – Agricultural labourers belonging to SC/ST built houses on land before cut-off date 30.06.1985 – Land deemed to be settled with such house owners irrespective of consent of tenure holder – Held, statutory deeming provision operates notwithstanding declaration under Section 143 – Civil Appeal dismissed [Paras 2, 4.5, 8-10].

Declaration under Section 143 – Conversion of agricultural land to residential use – Scope and effect – Declaration excludes application of Chapter VIII but does not bar application of Chapter VII including Section 123 – Does not remove land from definition under Section 3(14) – Private respondents not parties to Section 143 proceedings – Declaration not binding on them – Proceedings under Section 123 held valid [Paras 4.3, 8-9].

Possession – Admission by Appellants – Respondents in forceful possession since 1976-1977 – Houses existing prior to 30.06.1985 as per Tehsildar’s report – Nature of possession (authorised or unauthorised) immaterial for statutory settlement – Legislature did not exclude trespassers if otherwise eligible – Deeming settlement upheld [Paras 4.4, 4.5, 8].

Transfer by Sale – Rights of purchaser – Appellants purchased land in 1984 when occupants already in possession – Purchase subject to statutory rights of occupants under Section 123 – Purchaser cannot defeat statutory regularisation by relying on title or subsequent declaration – Relief of eviction not available [Paras 8-9].

Jurisdiction – Article 227 – High Court’s suo motu power – After recognising statutory ownership of occupants from 30.06.1985, continuation of civil suits for eviction amounts to abuse of process – High Court justified in quashing pending suits – Findings affirmed [Para 4.6].

Supreme Court – Limited interference under Article 136 – Findings of fact regarding possession and eligibility concurrent – No ground to interfere – Civil Appeal dismissed – Special Leave Petitions also dismissed in view of findings confirming regularisation and disentitlement of petitioners to eviction [Paras 10; SLP Paras 1-3].

Decision: Civil Appeal No. 4587 of 2009 dismissed – Judgment of High Court dated 07.09.2007 affirmed – S.L.P. (C) Nos. 3822-3823 of 2023 dismissed – No interference warranted.

Criminal Law – Murder – Conviction under Section 302 read with Section 34 IPC – Double homicide – Four eye-witnesses consistently deposed that accused armed with deadly weapons assaulted deceased Bulaki Mandal and Hriday Mandal till death – Minor inconsistencies immaterial – Motive established from prior altercation over grazing of crops – Concurrent findings of Sessions Court and High Court upheld – Appeal dismissed [Paras 2-3, 6, 10].

Evidence – Related Witnesses – Credibility – Eye-witnesses related to deceased – Mere relationship not ground to discard testimony if otherwise trustworthy – Presence at scene natural and mutually corroborative – Cross-examination failed to elicit material contradictions – Ocular evidence found reliable [Para 6].

Recovery of Weapon – Non-recovery not fatal – Investigating Officer failed to recover weapons allegedly used – Held, recovery of weapon is not sine qua non for conviction when credible ocular evidence corroborated by medical evidence establishes assault – Omission in investigation cannot override reliable testimony – Conviction sustainable despite non-recovery [Paras 7-8].

Section 313 CrPC – Examination of Accused – Similar/general questions – Requirement of prejudice – Though questions put in general terms and similar to all accused, incriminating circumstances were put – No material prejudice demonstrated – Non-specific questioning does not ipso facto vitiate trial – Fair trial principle balanced with overall evidence – Contention rejected [Para 9].

Defence – Plea of Alibi – Not substantiated – Defence witnesses examined but Courts below found prosecution evidence cogent and trustworthy – Concurrent appreciation of evidence not warranting interference [Paras 3, 6, 10].

Supreme Court – Scope of Interference – Concurrent findings of fact – Prosecution proved guilt beyond reasonable doubt – No perversity or miscarriage of justice shown – Conviction and life sentence affirmed [Para 10].

Decision: Criminal Appeal dismissed – Conviction and sentence under Section 302 read with Section 34 IPC upheld.

Criminal Law – Quashing of FIR – Civil dispute dressed as criminal offence – Joint Venture Agreement (JVA) for property development – Allegations of false representation, non-refund of security deposit, suppression of litigation and forged document – Court must examine FIR along with admitted documents to assess whether cognizable offence made out – Where dispute essentially contractual and civil in nature, continuation of criminal proceedings amounts to abuse of process – FIR quashed [Paras 15-16, 29-30].

Cheating – Section 420 IPC – Requirement of dishonest intention at inception – JVA contained no specific representation that no litigation was pending – Assurance limited to absence of restraint order and attachment – No allegation that such representation was false – FIR lodged after 11 years of agreement – No material to show dishonest intention from inception – Offence of cheating not made out [Paras 20, 25-27].

Criminal Breach of Trust – Section 406 IPC – Security deposit under Clause 5 of JVA – Deposit not refundable but adjustable against first party’s share from sale proceeds – Non-refund per se gives rise to civil consequences and not criminal liability – Ingredients of criminal breach of trust absent [Paras 21-22, 28].

Forgery – Sections 467, 468, 471 IPC – Allegation regarding letter of Tehsildar certifying no dispute over property – Mere non-traceability of document in official records after years does not establish it as a “false document” within meaning of Section 464 IPC – No specific allegation that title documents were fabricated or dishonestly made – Offence of forgery not disclosed [Paras 23-24].

Scope of High Court’s Power – Quashing at threshold – While ordinarily allegations in FIR to be taken at face value, Court may consider admitted documents referred to therein – If FIR discloses only civil cause of action, criminal proceedings should not be permitted to continue – High Court erred in dismissing writ petition in limine without examining nature of dispute [Paras 15, 30].

Arbitration Clause – Existence of arbitration clause in JVA – Though not by itself a ground to quash criminal proceedings, relevant in assessing nature of dispute – Dispute arising from contractual terms to be resolved through civil/arbitral remedies [Paras 10, 25, 27].

Decision: Appeal allowed – Judgment of the High Court dated 30.07.2021 set aside – FIR No. 0112 of 2021 and all proceedings emanating therefrom quashed – Pending applications disposed of.