Criminal Law – Recalling Witness – Section 311 CrPC – High Court set aside Trial Court’s refusal and allowed examination of minor child (daughter of deceased) after 7 years of incident – Held: Discretion under Section 311 CrPC is wide but must be exercised sparingly – Evidence must be essential to just decision of case – In absence of proof of child being present during incident, her proposed testimony is speculative – Trial Court's rejection restored [Paras 3.4, 5, 10.1–10.3, 11–12]

Child Witness – Reliability – Memory and Suggestibility – At time of incident, child was under 5 years old and is now about 11 – No contemporaneous statement recorded – Court held that memory of such tender age is vulnerable to distortion – Continuous residence with maternal grandparents creates apprehension of tutoring – Testimony would be unreliable and prejudicial to defence [Paras 3.5, 7, 10.2]

Evidence Law – Section 118 Indian Evidence Act – Competency of minor witness – Though legally competent, credibility must be judicially assessed – Court emphasized evidentiary value and not mere admissibility – Permitting examination after 21 witnesses would cause delay and prejudice [Paras 5, 10.3]

Trial Management – Protraction of Trial – Late-stage introduction of speculative witness without disclosure in FIR or charge-sheet undermines fairness – Section 311 not intended for strategic supplementation of prosecution case – High Court erred in overruling considered Trial Court discretion [Paras 3.3, 9–11]

Decision: Appeals allowed – High Court’s order dated 27/11/2024 set aside – Trial Court’s order dated 30/03/2024 restored – Prosecution not permitted to examine minor child witness – Trial to proceed as per law.

Specific Performance – Execution of Decree – Delay in Filing Execution Petition – Trial Court decreed suit for specific performance directing execution of sale deed within two months on payment of balance consideration – Execution petition filed after expiry of two months and balance consideration deposited subsequently in instalments – High Court held decree inexecutable for failure to seek extension of time – Held: Mere delay in filing execution petition or deposit of balance consideration does not render decree inexecutable – Hyper-technical approach deprecated [Paras 7–9].

Specific Relief Act, 1963 – Section 28 – Extension of Time – Power of Court – Purchaser failed to deposit balance sale consideration within time stipulated in decree – No formal application for extension filed – Held: Court retains power to extend time even at execution stage – Non-payment within stipulated time does not ipso facto amount to abandonment or rescission of contract – Conduct of decree-holder decisive [Paras 6–8].

Readiness and Willingness – Effect at Execution Stage – Findings of readiness and willingness attained finality up to Second Appeal – Delay of 27 days in filing execution and staggered deposits held not fatal – Held: Delay did not strike at root of contract nor demonstrate refusal to perform contractual obligations [Paras 7, 12].

Doctrine of Merger – Applicability – Decree of Trial Court affirmed in Second Appeal – Trial Court decree merged with judgment of High Court – Only one operative decree subsists – Executing Court bound to execute final decree as it stands – High Court erred in treating Trial Court’s time stipulation in isolation [Paras 9–12].

Powers of Executing Court – Limits and Duties – Executing Court cannot go behind decree but is competent to proceed with execution when decree is subsisting – Dismissal of execution petition on technical grounds defeats substantive justice – Held: Executing Court rightly dismissed objections; High Court exceeded jurisdiction in interference [Paras 12–13].

Decision: Appeal allowed – Judgment of Punjab and Haryana High Court dated 08.08.2022 set aside – Order of Executing Court dismissing objections restored – Executing Court directed to proceed with execution of decree for specific performance in accordance with law – Pending applications disposed of [Paras 13–14].

Criminal Law – Quashing of FIR – Direction for Time-bound Investigation and Protection from Arrest – Legality and Justification of High Court's Order – High Court dismissed quashing petitions filed by three accused (Mohd. Arshad Khan, Sanjay Kapoor, Muhammad Zaid Khan) but simultaneously granted protection from arrest and directed investigation to be concluded within 90 days – Supreme Court held such direction impermissible in law – Protection from arrest while declining to quash FIR amounts to indirect grant of anticipatory bail without statutory satisfaction – Directions issued without proper application of mind to factual context or justification [Paras 4–7, 11–13, 15–16].

Investigation – Judicial Imposition of Timelines – Legality – Supreme Court held that although delay in investigation can justify judicial intervention in rare cases, such direction must be reactive, not prophylactic – Timelines must be imposed only where there is evident stagnation, delay, or prejudice to rights under Article 21 – In present case, no such material or justification was recorded by High Court – Hence, order directing conclusion of investigation in 90 days was unsustainable [Paras 9–11].

Protection from Arrest – Article 21 – Applicability of Precedent – High Court relied on Shobhit Nehra v. State of U.P. to grant protection from arrest – Supreme Court held that directions in Shobhit Nehra were justified based on unique facts of that case involving long-standing civil dispute – Impugned orders failed to conduct factual comparison or application of mind – Hence, reliance misplaced and protection from arrest set aside [Paras 5, 12–14].

Precedent – Binding Nature – Reiteration of Law in Neeharika Infrastructure Pvt. Ltd. v. State of Maharashtra – Supreme Court reaffirmed that High Courts cannot grant interim protection from arrest while declining to interfere under Section 482 CrPC or Article 226 – Such practice amounts to backdoor anticipatory bail – High Courts must scrupulously follow binding precedent – Impugned High Court order violated settled law and was accordingly set aside [Para 15].

Decision: Appeals allowed – Directions issued by High Court for time-bound investigation and protection from arrest set aside – Interim protection to continue for two weeks to enable respondents to seek appropriate legal remedies – All pending applications disposed of [Para 17].

Criminal Law – IPC and ITPA - Child Trafficking – Minor Victim – Commercial Sexual Exploitation – Appellant convicted for keeping minor girl in rented premises for prostitution – Decoy operation by NGO workers led to rescue of minor – Testimony of minor victim (PW-13) found credible, consistent, and corroborated by witnesses PW-8, PW-11, PW-12 and seizure of condom and marked currency – Defence’s denial of relationship with victim rejected – Held: Offences under IPC and ITPA proved beyond reasonable doubt [Paras 3–6, 8–13].

Victim Testimony – Appreciation of Evidence – Supreme Court lays out principles for evaluating testimony of trafficked minors – Emphasized need for latitude and sensitivity due to victim’s socio-economic vulnerability, fear, trauma, and organised nature of crime – Held: Victim is not an accomplice – Sole credible testimony of minor victim sufficient for conviction – Reliance placed on State of Punjab v. Gurmit Singh [Para 11].

Juvenile Justice – Determination of Age – Victim’s age proved as 16 years 6 months based on school certificate (Ex. P-3) issued by PW-7 (Headmaster) – Court reaffirmed that school records prevail over medical opinion – Ossification test not mandatory when documentary proof exists – Relied on Jarnail Singh v. State of Haryana [Para 14].

Procedural Law – ITPA – Validity of Search – Compliance with Section 15(2) – Objection raised regarding absence of respectable woman from locality during raid – Court held that decoy witnesses (PW-8 and PW-12) were credible, and PW-14 (owner’s wife) was approached – Her hostility does not vitiate compliance – Reiterated that non-compliance with S. 15(2) is irregularity, not illegality, unless it causes prejudice – Conviction sustained [Paras 15–18].

Decision: Appeal dismissed – Conviction and sentence under IPC and ITPA upheld – Statutory provisions substantially complied with – Testimony of victim reliable and corroborated – No interference warranted with concurrent findings of courts below [Para 19].

Income Tax – Non-Compete Fee – Revenue or Capital Expenditure – Section 37(1), Income Tax Act, 1961 – Assessee paid non-compete fee to joint-venture partner to restrain it from competing in electronic office products business for a fixed period – Assessing Officer and Delhi High Court held expenditure to be capital in nature – Supreme Court examined tests of enduring benefit, capital field and profit-earning apparatus – Held: Non-compete fee merely facilitates carrying on of business more efficiently and profitably – No new asset created nor any accretion to profit-earning structure – Enduring advantage, if any, not in capital field – Payment is allowable as revenue expenditure under Section 37(1) [Paras 25–29].

Capital vs Revenue Expenditure – Enduring Benefit Test – Limits – Court reiterated that enduring benefit test is not conclusive – What is material is whether advantage lies in capital field – Payments made to ward off competition without creation of capital asset or monopoly fall on revenue account – Length of restrictive period not determinative – Focus must be on commercial reality of transaction [Paras 18–28].

Non-Compete Fee – No Acquisition of Capital Asset – Payment of non-compete fee does not result in acquisition of any tangible or intangible asset nor expansion of profit-earning apparatus – Competition not eliminated altogether – Assessee only secured operational efficiency – Held not capital expenditure [Paras 26–28].

Depreciation on Non-Compete Fee – Section 32(1)(ii) – Since non-compete fee itself held to be revenue expenditure, question of allowing depreciation as intangible asset rendered redundant in case of Sharp Business System – However, appeals of other assessees involving depreciation issue remanded to ITATs to be reconsidered in light of law declared [Paras 31–34].

Judicial Discipline – Conflicting High Court Views – Resolution by Supreme Court – Delhi High Court view treating non-compete fee as capital expenditure set aside – Consistent judicial trend emphasising commercial expediency and absence of capital asset reaffirmed – Matters involving depreciation remitted for fresh adjudication consistent with this judgment [Paras 29–34].

Interest on Borrowed Funds – Investment in Subsidiary / Sister Concern – Section 36(1)(iii) – Assessee invested borrowed funds in subsidiary company to acquire controlling interest and advanced interest-free loans to sister concern and directors – Assessing Officer disallowed interest alleging non-business purpose – ITAT and High Court allowed deduction applying doctrine of commercial expediency – Supreme Court affirmed – Held: Once investment/advances are made for commercial expediency, interest on borrowed funds is allowable – Revenue cannot substitute its business judgment for that of assessee – Reliance placed on SA Builders Ltd. [Paras 35–41].

Commercial Expediency – Controlling Interest – Investment in subsidiary to obtain controlling interest constitutes business purpose – Interest deduction allowable even if immediate profit not earned – Advances to sister concern covered by commercial expediency on facts [Paras 39–40].

Decision: Civil Appeal No. 4072 of 2014 allowed – Non-compete fee held to be revenue expenditure – Delhi High Court judgment set aside – Remaining appeals relating to non-compete fee and depreciation remanded to respective ITATs for fresh consideration – Revenue appeal on interest disallowance dismissed – Deduction under Section 36(1)(iii) upheld

Bail – Grant of Bail by High Court – Annulment of Bail Order – Respondents accused of offences under Sections 147, 148, 307 IPC read with Section 3(2)(va) of the SC/ST (POA) Act – Earlier bail cancelled due to misuse of liberty and murder of prime injured witness while on bail – High Court granted bail again without considering prior cancellation and supervening circumstances – Held: Bail order vitiated by perversity, arbitrariness and non-application of mind – Ignoring prior bail cancellation and demonstrated abuse of liberty renders the order unsustainable – Bail annulled [Paras 12–12.5, 14].

SC/ST (POA) Act – Victim’s Right to be Heard – Section 15A(5) – Mandatory Nature – Appellant contended that objections of victim were not considered while granting bail – Held: Section 15A(5) mandates opportunity of hearing, not acceptance of submissions – Once victim is notified and heard, statutory requirement stands satisfied – Bail cannot be cancelled merely for absence of detailed discussion of objections – No violation of Section 15A(5) made out [Paras 11–11.10].

Criminal Law – Misuse of Bail – Witness Intimidation and Elimination – Accused, while on bail in attempt to murder case, allegedly committed murder of prime injured witness – Subsequent FIR under Section 302 IPC registered – Bail earlier cancelled on this ground – Held: Death of material witness and intimidation strike at the root of fair trial – High Court failed to evaluate this determinative factor – Serious threat to administration of justice established [Paras 10, 12.1].

Bail Jurisprudence – Cancellation vs Annulment of Bail – Distinction Explained – Cancellation based on post-bail misconduct – Annulment justified where initial bail order is illegal or perverse – Held: Present case falls within annulment category as High Court ignored gravity of offence, antecedents, prior bail cancellation and societal impact – Superior court justified in setting aside bail [Paras 12, 12.5].

Offences under SC/ST (POA) Act – Gravity and Societal Impact – Allegations of caste-based abuse and armed assault – Requirement of strict scrutiny at bail stage – High Court failed to consider seriousness of offences and impact on marginalised community – Held: Mechanical grant of bail in such cases impermissible [Paras 12.2, 12.5].

Joint Trial – Separate FIRs – Distinct Occurrences – Direction for Joint Trial at Bail Stage – Crime No. 39 of 2020 (attempt to murder) and Crime No. 202 of 2022 (murder of witness) arise from different transactions, different years and distinct factual foundations – Held: Separate trial is the rule under Section 218 Cr.P.C. and Section 242 BNSS – Joint trial permissible only if statutory conditions satisfied – High Court exceeded jurisdiction by directing joint trial at bail stage – Direction unsustainable [Paras 13–13.7].

Decision: Criminal appeals allowed – Impugned judgment of the High Court dated 09.04.2025 set aside – Bail granted to respondents/accused cancelled – Accused directed to surrender before trial Court within two weeks – Trial Court to proceed independently on merits – Direction for joint trial quashed [Paras 14–15].

Administrative Law – Creation and Naming of Revenue Villages – Notification Quashed – State Government issued notification under Section 16 of Rajasthan Land Revenue Act creating Revenue Villages ‘Amargarh’ and ‘Sagatsar’ – Names found to be derived from private individuals (Amarram and Sagat Singh) who had donated land – Held: Notification violates Clause 4 of Revenue Department Circular dated 20.08.2009 prohibiting naming of villages after persons, religions, castes, or sub-castes – Such violation renders the act arbitrary and violative of Article 14 – State bound by its own policy decisions unless lawfully amended [Paras 14-17].

Policy Implementation – Executive Instructions – Binding Nature – Circular dated 20.08.2009 was an expression of Government policy and not merely directory – Any action inconsistent with such policy must be justified by lawful amendment or necessity – Notification dated 31.12.2020 held unsustainable as it contravened unamended binding policy [Paras 16-17].

Constitutional Law – Article 14 – Arbitrariness – Naming Revenue Villages after private individuals without valid reason or general consensus found to be arbitrary – State action lacking rational basis struck down as violative of Article 14 [Paras 16-17].

Judicial Review – Reversal of Division Bench Judgment – Division Bench failed to examine the impact of the 2009 Circular and wrongly limited its analysis to precedents (Moola Ram, Joga Ram) – Supreme Court held that writ appeal was wrongly allowed – Restored Single Judge’s order quashing the village names and directed renaming in accordance with policy [Paras 9, 17-18].

Decision: Appeal allowed – Division Bench judgment dated 05.08.2025 set aside – Single Judge’s order dated 11.07.2025 restoring policy compliance reinstated – Notification creating Revenue Villages ‘Amargarh’ and ‘Sagatsar’ quashed to extent of their names – Liberty granted to rename in accordance with law.

Criminal Law – Murder – Conviction set aside – Prosecution case resting mainly on testimony of related eyewitness (mother of deceased) suffering from material contradictions – Non-examination of material witness (granddaughter who allegedly informed informant) – Independent witnesses turned hostile – Medical evidence not conclusively corroborating ocular version – Held: Prosecution failed to prove guilt beyond reasonable doubt – Accused entitled to acquittal [Paras 7–18].

Evidence – Related / Interested Witness – Mother of deceased claimed to be eyewitness – Law reiterated that testimony of related witness cannot be discarded solely on that ground but requires strict scrutiny – On facts, deposition contained serious inconsistencies regarding manner of assault, timing and presence at scene – Reliance on such testimony held unsafe [Paras 8–9, 13–15].

Evidence – Non-Examination of Material Witness – Granddaughter of informant allegedly first informant of incident not examined – Prosecution failed to explain omission – Adverse inference drawn against prosecution version [Paras 9, 14].

Witnesses – Hostile Independent Witnesses – PW-1, PW-2, PW-3 and PW-9 did not support prosecution case – Seizure and recovery of weapons through memorandum statements not proved – Recovery evidence held unreliable [Paras 10–11, 15].

Medical Evidence – Inconsistency with Ocular Testimony – Post-mortem revealed three incised wounds – Prosecution alleged use of sticks and one stone – Doctor failed to specify which injury was caused by which weapon – Improbability of incised wounds being caused by single stone – Medical evidence not supporting prosecution story [Paras 12, 16].

Common Object – Unlawful Assembly – Section 149 IPC – Mere presence of accused at spot without clear proof of participation or overt act insufficient – Failure to establish common object beyond reasonable doubt [Paras 14–16].

Standard of Proof – Criminal Trial – Benefit of Doubt – Where prosecution evidence suffers from contradictions, hostile witnesses and weak medical corroboration – Conviction cannot be sustained – Benefit of doubt must go to accused [Paras 15–17].

Decision: Appeals allowed – Judgment of Chhattisgarh High Court dated 17.02.2021 affirming conviction and sentence set aside – All appellants acquitted – Bail bonds discharged – Pending applications disposed of [Paras 18–20].

Matrimonial Law – Divorce – Ground of Desertion – Consent of Parties – Decree Modified under Article 142 – Family Court and High Court granted divorce on ground of desertion – Appellant contested desertion, but agreed to dissolution by mutual consent during Supreme Court hearing – Respondent also agreed – Supreme Court exercised powers under Article 142 to modify the decree to reflect mutual consent and not desertion – Marriage dissolved accordingly – [Paras 5–8].

Constitutional Law – Article 142 – Complete Justice – Consent Divorce Ordered by Supreme Court – Where parties unequivocally agreed to separation and reconciliation failed, Court invoked Article 142 to substitute contested decree with one based on mutual consent – Held: In view of irretrievable breakdown, ends of justice warrant such course – [Paras 7–8].

Family Law – Permanent Alimony – One-time Settlement – Both parties being financially independent – Supreme Court fixed Rs. 25 lakhs as full and final settlement – Amount to be deposited within two months and drawn by wife – All pending disputes (civil/criminal) to be closed upon compliance – [Paras 9–12].

Decision: Appeal disposed – Divorce decree based on desertion set aside – Marriage dissolved by consent under Article 142 – Rs. 25 lakhs directed as full settlement – Pending proceedings to stand closed on payment compliance – [Paras 8–13].