IBC - Insolvency and Bankruptcy Code – Section 7 – Application by Assignee Creditor – Rejected – UV Asset Reconstruction Company filed a Section 7 application against Electrosteel Castings Ltd. (ECL), asserting it was a guarantor for debt availed by Electrosteel Steels Ltd. (ESL) – Application rejected by NCLT and NCLAT on grounds that Clause 2.2 of Deed of Undertaking did not constitute a contract of guarantee – Supreme Court upheld rejection – Held: Clause 2.2 merely obligated ECL to arrange infusion of funds into borrower ESL and lacked elements of a guarantee under Section 126 of the Indian Contract Act – There was no unambiguous promise to the creditor to discharge the debt upon default [Paras 17–25, 1–16].

Contract Law – Guarantee – Requirements under Section 126 ICA – Clause 2.2 of the Deed of Undertaking did not fulfill essential ingredients: no direct promise to creditor, no liability to discharge borrower’s debt – Payment of ₹38 crores by ECL held voluntary, not pursuant to a contractual obligation – Held: “See to it” obligations are not sufficient to constitute a statutory guarantee under Indian law [Paras 19–24].

Insolvency Resolution – Effect of Resolution Plan – Residual Debt – Claim against Third Parties – SREI had accepted Resolution Plan and received equity in lieu of balance debt – Argument that debt stood extinguished rejected – Clause 3.2(ix) of Resolution Plan specifically preserved rights of financial creditors against third parties including existing promoters – Reduction in share value post-resolution led to significant haircut, affirming residual unsatisfied debt – Held: Resolution Plan did not extinguish liability of third-party sureties or security providers [Paras 18–24].

Decision: Appeal dismissed – Deed of Undertaking did not constitute a guarantee – No bar on claims against ECL due to approval of Resolution Plan – Findings of NCLT and NCLAT affirmed – No costs awarded [Paras 25–26].

Family Law – Transfer of Proceedings – Allegation of Bias – Transfer Not Justified – Appellant-wife challenged High Court’s ex parte order transferring proceedings in C.C. No. 136/2023 from Sangareddy to Hyderabad – Transfer sought by husband on grounds that wife’s relatives were employed as Head Constable and Junior Assistant in local police station and District Court respectively – Supreme Court held that such employment by itself did not establish bias or influence on judicial process – Observed that judicial independence cannot be presumed to be compromised by mere proximity of litigant’s relatives in administrative roles – High Court erred in granting transfer without hearing the wife – Held: Order of transfer unsustainable and directed restoration of case to Sangareddy Court [Paras 2-10].

Family Law – Divorce Decree – Suppression and Deceit – Allegation of Husband – Divorce obtained ex parte by husband in 2013 without informing wife despite settlement and compromise application under Section 482 CrPC filed days later – Wife became aware only in 2022 – Delay of 2709 days in filing appeal against divorce decree condoned by High Court – Supreme Court noted husband’s conduct could not be ignored while considering transfer – Held: Circumstances did not justify transfer sought by husband [Paras 4-7].

Security Concerns – Accused’s Apprehension of Threat – Remedy – Supreme Court held that husband-accused can seek permission to appear through counsel or via video conferencing – If personal appearance needed, application for protection to be considered by Magistrate – Transfer not warranted solely based on perceived threats without objective basis [Para 9].

Decision: Appeal allowed – High Court’s order set aside – Case to be restored to Additional Judicial Magistrate First Class, Sangareddy – If closed due to complainant’s non-appearance, to be restored by Magistrate and taken up afresh – Directions to appear on 16.02.2026, including via counsel [Paras 10, 12-13].

Motor Accident Claim – Compensation – Assessment under Section 166 MV Act – Appellant injured in a motor accident originally claimed under Section 163A – Tribunal and High Court awarded Rs.2,12,800 and Rs.2,23,000 respectively – Supreme Court held that despite reference to Section 163A, pleadings and claim amount established the claim was under Section 166 – Hence, just compensation principles to apply [Paras 2, 5].

Income Computation – Minimum Income – Appellant claimed Rs.8,000/month as a salesman but failed to produce proof – Court relied on Ramachandrappa v. Royal Sundaram to fix income at Rs.5,000/month for 2005 accident, considering inflation and self-employment – Future prospects at 40% and multiplier of 17 (age 27) applied – Total loss of income recomputed accordingly [Paras 3, 6, 8].

Disability Assessment – Improper Reduction by High Court – Disability assessed at 60% by medical expert and accepted at 50% by Tribunal – High Court reduced to 40% without appeal by Corporation – Supreme Court held reduction unjustified and restored 50% disability as assessed by Tribunal [Para 7].

Decision: Appeal allowed – Compensation recomputed to ₹7,14,000 for loss of income – Additional conventional heads as per Tribunal/High Court upheld – Interest at 7.5% p.a. – Respondent to pay within 3 months [Paras 8–10].

Judicial Service – Misconduct – Bail Orders – Appellant, a judicial officer with 27 years of unblemished service, dismissed solely on basis of four bail orders under Excise Act allegedly passed without referring to Section 59-A – Held: Mere omission to cite statutory provision does not amount to misconduct – Orders contained legal reasoning and were supported by material – No evidence of corrupt motive – Dismissal unsustainable [Paras 2–3, 9–16, 40]

Disciplinary Proceedings – Standards for Judicial Officers – Supreme Court reiterates that mere erroneous orders or different conclusions are not sufficient to infer misconduct – Strong protection must be extended to trial judges from frivolous or motivated complaints – Perversity, mala fides, or extraneous considerations must be clearly established before taking punitive action [Paras 18, 27–30, 33–39]

Natural Justice – Flawed Inquiry – Complainant not examined – Stenographer allegedly involved not examined – Departmental witnesses did not support charges – Inquiry officer acted like appellate authority reviewing correctness of bail orders – Findings held perverse and unsustainable [Paras 10, 14–16, 40]

Judicial Independence – Protection of Trial Judiciary – Court cautions against chilling effect of unjustified disciplinary action – Emphasizes need to insulate judicial officers from fear and external pressure – High Court directed to protect upright officers and act only on credible, proven misconduct [Paras 27–29, 36–37, 43–44]

Decision: Appeal allowed – Orders of removal and rejection of appeal set aside – Appellant deemed to have continued in service until superannuation – Directed to be paid full back wages and consequential benefits with 6% interest – Judgment to be circulated to all High Courts.

Contempt of Court – Compliance – Supreme Court in earlier judgment directed Agra Development Authority to return ₹3,99,100 worth of non-judicial stamp papers – Respondent returned expired original stamp papers but did not refund the monetary value – Held: Act amounts to non-compliance in spirit, even if not in letter – Contempt petition maintainable [Paras 2-3]

Stamp Duty – Refund – Rejection by Registration Department – Department cited Rule 218 of U.P. Stamp Rules, 1942, which bars refund of physical stamp papers after eight years – Petitioner’s application rejected on limitation grounds – However, Court found that directions in earlier order warranted refund [Paras 4-5, 7]

Equity and Justice – Bonafide Interpretation and Apology – State of U.P. impleaded later and admitted mistake – Offered unconditional apology and stated readiness to comply with Court's order – Supreme Court inclined not to pursue contempt but to ensure compliance [Para 7]

Relief – Refund Ordered – Without entering into merits of limitation, Court directed State of U.P. to refund ₹3,99,100 to petitioner upon return of original stamp papers – Time of two months granted for compliance – Contempt petition against Agra Development Authority closed [Paras 8-9]

Decision: Contempt petition partly allowed – Respondent No. 2 (State of U.P. through Collector, Agra) directed to refund ₹3,99,100 to the petitioner within two months – Contempt proceedings against Agra Development Authority closed – Pending applications disposed.

Civil Law – Impleadment – Necessary and Proper Party – Order 1 Rule 10 CPC - Appellant sought impleadment in a suit for recovery of service charges against respondent No.3, claiming to be its successor under Part IX of Companies Act, 1956 – Trial Court allowed impleadment – High Court reversed under Article 227 – Held: Appellant failed to establish valid succession or extinguishment of respondent No.3 – Respondent No.3 continued to exist as partnership firm – Appellant not a necessary or proper party [Paras 29–31, 37–38].

Civil Procedure – Dominus Litis – Plaintiff is dominus litis and cannot be compelled to implead a party unless such person proves to be a necessary party – No relief sought against the appellant – Decree would not bind non-party – Plaintiffs’ autonomy in choosing parties upheld [Paras 25, 39–40].

Impleadment – Delay and Knowledge – Appellant had knowledge of suit since 2008 through summons acknowledgment bearing its seal – Application for impleadment filed after nearly 9 years in 2018 – Held: Delay unjustified – Application rightly dismissed by High Court [Paras 42].

Supervisory Jurisdiction – Article 227 – Although High Court’s jurisdiction under Article 227 is limited, once it has intervened to correct an erroneous impleadment order, Supreme Court declined to reverse it – Held: Interference by High Court not illegal or perverse [Paras 20, 43].

Civil Procedure – Successorship – Mere production of certificate of incorporation does not prove legal succession to a partnership firm – No proof of compliance with requirements under Part IX of Companies Act – Appellant failed to prove conversion or continuity from respondent No.3 [Paras 29–30].

Decision: Appeal dismissed – High Court’s order refusing impleadment upheld – Clarified that any decree in the suit will not be enforced against the appellant – No order as to costs.

Arbitration – Section 11(6A) – Arbitrability of Disputes – Leave and License Agreement – Monetary Claims – Arbitrator Appointment – Exclusive Jurisdiction of Small Causes Court under Section 41 of 1882 Act – Valid Arbitration Clause Not Rendered Inoperative by Statutory Bar – Clause 33 of Agreement Held to Exist and Operative – High Court Rightly Appointed Arbitrator – Appeal Dismissed – Dispute arose from a Leave and License Agreement for premises in Malad, Mumbai – Appellant terminated the agreement and claimed refund of security deposit – Respondent claimed arrears of license fees for the lock-in period – Arbitrator appointed under Section 11, Arbitration Act – Appellant objected citing Section 41 of the Presidency Small Cause Courts Act, 1882, contending exclusive jurisdiction of Small Causes Court – Held: Court under Section 11(6A) to only examine the existence of arbitration agreement – Clause 33 validly provides for arbitration – Dispute on nature of claim (debt vs. license fee) to be determined by arbitral tribunal under Section 16 – Reliance on Central Warehousing judgment distinguished based on facts – Arbitration clause not rendered non-existent by Section 41 of 1882 Act – Appeal dismissed – Arbitrator to conclude proceedings in 6 months [Paras 1-28].

Criminal Law – Bail – Unlawful Activities (Prevention) Act, 1967 (UAPA) – Section 43D(5) – Prolonged Incarceration – Article 21, Constitution of India – Bail Declined for Sharjeel Imam and Umar Khalid – The Supreme Court held that while prolonged incarceration implicates Article 21, it does not automatically displace the statutory embargo under Section 43D(5) of UAPA. The Court found that the prosecution material, taken at face value, disclosed a prima facie attribution of a central and formative role by Sharjeel Imam and Umar Khalid in the alleged conspiracy, involving planning, mobilisation, and strategic direction beyond episodic or localised acts. The complexity of the prosecution, nature of evidence, and stage of proceedings did not justify their enlargement on bail at this juncture. The Court directed the Trial Court to proceed with the matter expeditiously and ensure timely examination of protected witnesses. The appeals for Sharjeel Imam and Umar Khalid were dismissed, and their prayers for bail rejected [Paras 24, 25, 28, 31, 32, 35, 36, 41, 43, 45, 47, 48, 52, 54, 56, 58, 59, 61, 62, 67, 68, 70, 71, 72, 75, 76, 77, 78, 80, 81, 82, 91, 92, 95, 97, 98, 99, 100, 101, 102, 103, 104, 105, 108, 109, 110, 136, 137, 138, 139, 140, 151, 154, 155, 156, 157, 158, 159, 160, 161, 162, 163, 164, 165, 166, 167, 168, 169, 170, 171, 173, 174, 175, 193, 194, 195, 196, 209, 210, 211, 212, 213, 214, 215, 216, 217, 218, 219, 220, 221, 222, 223, 224, 225, 226, 227, 228, 229, 230, 231, 232, 233, 234, 235, 236, 237, 238, 239, 240, 241, 242, 243, 244, 245, 246, 430, 431, 432].

Criminal Law – Bail – Unlawful Activities (Prevention) Act, 1967 (UAPA) – Section 43D(5) – Prolonged Incarceration – Article 21, Constitution of India – Bail Granted for Gulfisha Fatima, Meeran Haider, Shifa-ur-Rehman, Mohd. Saleem Khan, and Shadab Ahmed – The Supreme Court allowed the appeals for these appellants, holding that their continued incarceration was not indispensable for a fair trial, given their attributed roles, the nature of material relied upon, and the current stage of proceedings. The Court found that their roles were primarily operational or facilitative, distinct from the conceptual and directive roles attributed to the principal conspirators. The Court emphasized that while the gravity of the incidents was serious, it could not eclipse the constitutional demand for individualized assessment of necessity in pre-trial detention. Stringent conditions were imposed to secure their presence, prevent witness interference, and restrain public commentary. The Court clarified that the grant of bail did not reflect any dilution of the seriousness of allegations or amount to a finding on guilt, but represented a calibrated exercise of constitutional discretion. The appeals were allowed, and bail granted subject to conditions [Paras 248, 250, 251, 252, 253, 272, 273, 274, 275, 276, 277, 278, 279, 280, 282, 283, 284, 285, 287, 288, 313, 314, 315, 316, 317, 318, 319, 320, 321, 324, 325, 326, 327, 328, 329, 330, 332, 352, 353, 354, 355, 356, 357, 358, 359, 360, 362, 363, 364, 382, 383, 384, 385, 386, 387, 388, 389, 390, 391, 392, 393, 394, 395, 396, 416, 417, 418, 419, 420, 421, 422, 423, 424, 425, 433].

Criminal Law – Bail – Woman Accused – Article 21, Constitution of India – The Court also considered Gulfisha Fatima's status as a woman as a relevant factor in the proportionality assessment under Article 21 [Paras 248, 250, 251, 252, 253, 272, 273, 274, 275, 276, 277, 278, 279, 280, 282, 283, 284, 285, 287, 288, 313, 314, 315, 316, 317, 318, 319, 320, 321, 324, 325, 326, 327, 328, 329, 330, 332, 352, 353, 354, 355, 356, 357, 358, 359, 360, 362, 363, 364, 382, 383, 384, 385, 386, 387, 388, 389, 390, 391, 392, 393, 394, 395, 396, 416, 417, 418, 419, 420, 421, 422, 423, 424, 425, 433].

Criminal Law – Bail – Parity – Article 14, Constitution of India – The Court noted that the prosecution's evidentiary foundation against Gulfisha Fatima, including witness statements and electronic evidence, mirrored that against co-accused Natasha Narwal and Devangana Kalita, who were already on bail, thus invoking the principle of parity. The Court found that denying bail to Gulfisha Fatima in the absence of distinguishing material would constitute hostile discrimination, offending Article 14 [Paras 248, 250, 251, 252, 253, 272, 273, 274, 275, 276, 277, 278, 279, 280, 282, 283, 284, 285, 287, 288, 313, 314, 315, 316, 317, 318, 319, 320, 321, 324, 325, 326, 327, 328, 329, 330, 332, 352, 353, 354, 355, 356, 357, 358, 359, 360, 362, 363, 364, 382, 383, 384, 385, 386, 387, 388, 389, 390, 391, 392, 393, 394, 395, 396, 416, 417, 418, 419, 420, 421, 422, 423, 424, 425, 433].

Criminal Law – Conspiracy – UAPA – Individualized Assessment – The Court emphasized that in conspiracy cases, particularly under special statutes like UAPA, an individualized assessment of each accused's role, nature of involvement, and necessity of further detention is crucial. Differentiation is intrinsic to criminal adjudication and operates irrespective of the uniformity of charges framed. The Court must distinguish between conspiratorial centrality and mere association or peripheral presence. The law does not demand that every conspirator execute the terminal act; it demands a prima facie nexus between the accused and the unlawful design, inferred from cumulative conduct [Paras 74, 75, 76, 77, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 210, 211, 214, 215, 216, 217, 218, 219, 220, 222, 223, 224, 225, 226, 230, 231, 232, 233, 234, 235, 236, 237, 238, 239, 240, 241, 242, 243, 244, 262, 266, 267, 268, 270, 271, 272, 273, 277, 278, 280, 290, 291, 292, 293, 294, 295, 296, 297, 301, 302, 304, 306, 307, 308, 309, 310, 311, 312, 313, 314, 315, 317, 321, 325, 334, 335, 336, 337, 339, 341, 342, 345, 346, 347, 348, 349, 350, 351, 352, 353, 354, 356, 357, 358, 360, 365, 366, 367, 368, 369, 371, 373, 375, 376, 377, 378, 379, 380, 381, 382, 383, 387, 390, 392, 397, 398, 399, 400, 401, 402, 403, 405, 407, 409, 410, 411, 412, 413, 414, 415, 416, 417, 421, 423, 424, 429, 430, 433, 437].

Criminal Law – Bail Conditions – UAPA – Safeguards – The Court imposed stringent conditions for the release on bail, including personal bonds, restrictions on leaving Delhi without permission, surrender of passports, furnishing residential and contact details, prohibition on contacting witnesses or participating in related activities, and abstention from public commentary on the case. These conditions were deemed substantive safeguards for national security, public order, and trial integrity [Paras 434, 435].

Decision: Appeal allowed for Gulfisha Fatima, Meeran Haider, Shifa-ur-Rehman, Mohd. Saleem Khan, and Shadab Ahmed – Appeal dismissed for Sharjeel Imam and Umar Khalid – [Paras 431, 433].

Civil Law - Specific Relief – Specific Performance – Readiness and Willingness – Plaintiff failed to prove financial capacity to pay balance sale consideration of ₹5.21 crores on due date – Did not appear before Sub-Registrar on date fixed for execution – Held: Plaintiff failed to establish readiness and willingness under Section 20 of the Specific Relief Act – Decree rightly set aside [Paras 5-6]

Equity – Delay and Laches – Seventeen years had elapsed since agreement to sell – Both parties found to be at fault – Court held that specific performance not an equitable remedy in present case – Restoration of parties to original position preferred over enforcing contract [Paras 6-7]

Restitution – Refund and Compensation – Earnest money of ₹60 lakhs and further ₹30 lakhs paid – High Court permitted forfeiture of earnest money – Supreme Court held forfeiture inequitable – Directed payment of ₹3 crores by respondents to appellant to fully compensate and bring quietus to dispute [Paras 7-8]

Civil Procedure – Modification of High Court Decree – Supreme Court exercised powers under Article 142 of Constitution to do complete justice – Modified High Court judgment and directed lump sum compensation in lieu of specific performance [Para 8]

Decision: Appeal partly allowed – Decree of specific performance denied – Respondents directed to pay ₹3,00,00,000/- to appellant within four weeks – High Court judgment modified accordingly.