Criminal Law – Police Custody – Discretion of Magistrate – Learned Magistrate declined police custody after noting extensive investigation and recovery of incriminating materials – Order passed with cogent reasons – Held: Revisional Court should not ordinarily interfere with such reasoned exercise of discretion unless perversity is shown [Paras 10–14].

Police Remand – Revisional Jurisdiction – Sessions Court allowed revision and granted police custody nearly six months after Magistrate declined custody – Order passed without properly appreciating Magistrate’s reasoning – Held: Revisional interference unjustified and perverse [Paras 12–15].

Bail – Grant of Police Custody After Bail – Accused already enlarged on regular bail – Grant of police custody necessarily curtails liberty and amounts to indirect cancellation of bail – Held: Police custody cannot be granted so long as bail order remains in force [Paras 16–19].

Criminal Procedure – Proper Course – When police seek custody of accused already on bail – Investigating agency must first seek cancellation of bail in accordance with law – Scheme of criminal procedure does not permit police remand of an accused protected by a subsisting bail order [Paras 17–19].

Police Custody – Statutory Period – Section 187 BNSS – Police custody permissible only within statutory period of forty days in cases not punishable with death, life imprisonment or ten years or more – Even within statutory period, custody not automatic and must be justified by necessity [Paras 8–9].

Personal Liberty – Article 21 – Casual or mechanical grant of police remand impermissible – Liberty of an accused enlarged on bail cannot be curtailed without compelling and legally sustainable reasons [Paras 16–19].

Precedent – Reliance – Satyajit Ballubhai Desai v. State of Gujarat, (2014) 14 SCC 434 – Reiterated that police remand after grant of bail without cancellation of bail is impermissible and affects personal liberty [Para 18].

Decision: Appeal allowed – Orders dated 13.10.2025 passed by the High Court of Telangana and 26.09.2025 passed by the Sessions Judge set aside – Grant of police custody held illegal in view of subsisting bail order – Bail of appellants remains undisturbed – Pending applications disposed of.

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].

Income Tax – Amalgamation – Shares held as Stock-in-Trade vs Capital Asset – Taxability under Section 28 – Assessees, promoter investment companies, received shares of amalgamated company in lieu of shares of amalgamating company under a court-sanctioned scheme – Assessing Officer treated shares as stock-in-trade and taxed notional gains as business income – Tribunal held no income accrued in absence of sale or transfer – High Court remanded matter holding that if shares were stock-in-trade, gains would be taxable under Section 28 – Supreme Court examined whether substitution of shares itself constitutes taxable business income – Held: Mere substitution of shares on amalgamation does not automatically give rise to taxable business income – What is relevant is real commercial realisation and not notional appreciation – Taxability depends on whether shares received are immediately realisable, freely tradable, and of ascertainable market value – Matter remitted for factual determination by Tribunal [Paras 8–11, 15–18, 39–40].

Income Tax – Section 28 – Scope and Interpretation – Real Income Doctrine – Section 28 is a wide charging provision taxing real profits and gains of business whether received in cash or kind – However, income must be real, accrued or received, and commercially realisable – Hypothetical or notional gains cannot be taxed unless expressly deemed by statute – In amalgamation, unless assessee receives a real, immediately disposable commercial benefit, no income accrues at the stage of substitution – Principle of real income reiterated [Paras 13–15, 18–19].

Amalgamation – Legal Nature – Not a Sale or Exchange per se – Amalgamation results in statutory substitution of one corporate holding by another – Amalgamating company ceases to exist and shareholders receive shares by operation of law – Not a bilateral exchange in strict legal sense – However, amalgamation constitutes “transfer” for purposes of capital gains as held in Grace Collis – Distinction maintained between capital gains taxation and business income taxation [Paras 16–18].

Capital Gains – Section 47(vii) – Limited to Capital Assets – Exemption under Section 47(vii) applies only where shares are held as capital assets – If shares are stock-in-trade, exemption under Section 47(vii) is unavailable – Determination of nature of holding is foundational to deciding taxability – Tribunal directed to decide nature of holding afresh [Paras 12–13, 26].

Section 260A – High Court Jurisdiction – Incidental Questions of Law – Contention that High Court exceeded jurisdiction by addressing Section 28 rejected – Issue of business income taxability was incidental and arose directly from Tribunal’s findings – Parties were fully heard and no prejudice caused – High Court empowered to consider such incidental questions even if not formally framed – Distinguished Shiv Raj Gupta [Paras 9–9.6].

Preliminary Inquiry vs Final Tax Liability – Role of Tribunal – Tribunal erred in declining to decide whether shares were capital assets or stock-in-trade – Such determination is mandatory before applying charging provisions – High Court justified in remanding matter for fresh adjudication – Tribunal to examine commercial realisability, marketability, and nature of shares received [Paras 8.3, 11, 18.4–18.6].

Decision: Appeals dismissed – High Court judgment upheld – Matters remanded to Income Tax Appellate Tribunal to determine whether shares were held as stock-in-trade or capital assets and whether substitution on amalgamation resulted in real, taxable business income under Section 28 – No automatic taxability on mere substitution of shares.

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].

Criminal Law – Culpable Homicide – Distinction between Murder and Culpable Homicide not amounting to Murder – Sections 299, 300 and 304 Part II IPC – Appellant convicted for causing death of deceased by a single lathi blow on head during a sudden group clash – No premeditation or common object established – Incident arose out of a sudden quarrel and free fight between rival parties – Both sides sustained injuries – Held: Act attributable to appellant showed knowledge that injury was likely to cause death but no intention to cause death – Conviction rightly altered from Section 302 IPC to Section 304 Part II IPC [Paras 5–5.6].

Unlawful Assembly – Common Object – Sections 147, 148 and 149 IPC – Prosecution failed to establish existence of unlawful assembly with common object to cause death – Evidence disclosed a sudden free fight with no prior meeting of minds – Accused persons could not be held vicariously liable – Charges under Sections 147, 148 and 149 IPC not made out [Paras 5.2–5.2.1].

Evidence Appreciation – Ocular Evidence and Medical Corroboration – Eyewitnesses consistently stated that appellant struck deceased with lathi on head – Medical evidence confirmed single blunt force injury on head resulting in fracture and death – Ocular and medical evidence found consistent and reliable to fix individual liability of appellant [Paras 3.6–3.9, 5.3].

Single Blow Case – Knowledge vs. Intention – Use of lathi and injury on vital part (head) sufficient to infer knowledge of likelihood of death – Absence of intention to cause death and lack of premeditation excluded offence from Section 302 IPC – Offence squarely falls under Section 304 Part II IPC [Paras 5.4–5.5].

Sentence – Reduction on Grounds of Advanced Age and Period Undergone – Appellant more than 80 years of age – Had already undergone about six years and three months of imprisonment – Sending appellant back to prison at advanced age held harsh and unwarranted – Sentence reduced to period already undergone while maintaining conviction under Section 304 Part II IPC [Paras 6–6.1].

Decision: Appeal dismissed on merits – Conviction under Section 304 Part II IPC affirmed – Sentence modified to imprisonment already undergone considering advanced age of appellant – Bail bonds discharged – Interlocutory applications disposed of.

Criminal Law – Bail Jurisdiction – Section 439 CrPC – Scope and Limits – High Court while deciding bail application under Section 439 CrPC issued sweeping directions mandating medical age determination of victims in all POCSO cases and laid down procedural norms for investigation – Held: Jurisdiction under Section 439 CrPC is confined to consideration of grant or refusal of bail – High Court cannot issue general or policy directions unrelated to adjudication of bail – Exercise of statutory jurisdiction cannot be enlarged by invoking constitutional status of High Court – Directions issued beyond jurisdiction and liable to be set aside [Paras 10–11.5].

POCSO Act – Determination of Age of Victim – Statutory Scheme – High Court held medical age determination under Section 164-A CrPC read with Section 27 POCSO Act to be mandatory at commencement of investigation – Supreme Court held that statutory framework does not mandate compulsory medical age determination in every case – Section 94 JJ Act provides a clear hierarchy for age determination, giving primacy to documentary evidence – Medical tests are permissible only in absence of primary documents and by competent authority at appropriate stage – High Court erred in holding otherwise [Paras 12–14.5].

Bail Proceedings – Mini Trial Impermissible – High Court undertook detailed evaluation of victim’s age, documentary records and medical opinion at bail stage – Held: Bail court is required to form only a prima facie view – Detailed examination of evidence, determination of disputed facts and issuance of binding findings amounts to conducting a mini trial – Such exercise is impermissible while deciding bail [Paras 11.1.2, 14].

Juvenile Justice Act vs. POCSO Act – Distinct Fields of Operation – JJ Act primarily deals with children in conflict with law or children in need of care and protection – Victims under POCSO Act do not automatically fall within jurisdiction of JJ Board or Committee – Age determination mechanism under Section 94 JJ Act cannot be mechanically imported into bail proceedings under POCSO Act – Conflation of statutory regimes by High Court held erroneous [Paras 14.5.1–14.5.4].

Constitutional Law – Statutory Power vs. Constitutional Power – High Court justified directions on ground of being a constitutional court – Supreme Court clarified distinction between constitutional powers and statutory powers – When exercising statutory jurisdiction under Section 439 CrPC, High Court must act within limits of statute – Constitutional status cannot be used to expand statutory jurisdiction [Paras 11.3–11.4].

Decision: Appeal allowed – Impugned judgment of High Court set aside to extent it issued general and mandatory directions regarding age determination in POCSO cases – Bail order interfered with accordingly – Law clarified that such directions cannot be issued in exercise of bail jurisdiction under Section 439 CrPC.

Prevention of Corruption Act – Registration of FIR – Preliminary Inquiry – Not Mandatory in Every Case – FIRs registered by Karnataka Lokayukta Police on directions of Superintendent of Police without conducting preliminary inquiry – High Court quashed FIRs holding action to be without jurisdiction – Held: Issue no longer res integra in view of judgment in State of Karnataka v. T.N. Sudhakar Reddy – Preliminary inquiry not mandatory where source information is detailed and prima facie discloses commission of cognizable offence – High Court erred in quashing FIRs on this ground [Paras 3–6, 12].

Section 17, PC Act – Power of Superintendent of Police – Authorization of Investigation – Challenge raised that Superintendent of Police could not authorize Deputy Superintendent of Police to investigate offences under PC Act – Held: Superintendent of Police is competent to direct registration of FIR and simultaneously authorize investigation, subject to restrictions under Section 17 PC Act – Registration of FIR governed by CrPC and not fettered by Section 17 – Law settled by T.N. Sudhakar Reddy and followed in State of Karnataka v. Channakeshava H.D. [Paras 4–6, 12].

Writ Jurisdiction – FIR under PC Act – Adjudication on Merits – High Court allowed writ petitions solely on preliminary jurisdictional issues without examining other grounds touching upon merits including lack of foundational material for disproportionate assets cases – Held: Respondent deprived of adjudication on remaining grounds – Matter remitted to High Court for fresh consideration limited to grounds not earlier adjudicated [Paras 7–14].

Remand – Scope – Filing of Chargesheet During Pendency of Appeal – During pendency of appeal, chargesheets filed against respondent – Held: Respondent permitted to assail chargesheets in revived writ petitions post-remand – Liberty limited to challenge chargesheets filed during pendency of appeal – Remedies under CrPC/BNSS remain unaffected [Paras 15–16].

Interim Protection – Continuance on Remand – Respondent had interim protection during pendency of writ petitions – Held: No coercive steps to be taken against respondent till disposal of writ petitions by High Court post-remand [Para 17].

Decision: Appeal allowed – Impugned order of the High Court set aside – Writ petitions restored to file of High Court of Karnataka for fresh adjudication on merits confined to grounds not earlier decided – Interim protection to continue till disposal – Pending applications disposed of.

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].

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.