Criminal Law – Quashing – Offence under Sections 379 and 411 IPC – Petitioner allegedly misused relationship with complainant’s wife to misappropriate cheque, hundis, and gold necklace belonging to complainant’s mother – Police report and private complaint led to cognizance only under Section 420 IPC – Sessions Court modified order and directed Magistrate to reconsider applicability of Sections 379 and 411 IPC – Supreme Court held that the question of taking cognizance under Sections 379 and 411 IPC must be considered afresh by the Magistrate uninfluenced by the Sessions Court’s observations – Held: Trial Magistrate to independently assess whether ingredients for theft and receipt of stolen property are made out – SLPs disposed of with liberty to Magistrate [Paras 5–7].

Arbitration – Appointment of Arbitrator – Scope of Judicial Interference under Section 11(6) – Appellant suffered an arbitral award in dispute with third-party contractor – Based on contract clause shifting liability for award to respondent, appellant sought arbitration – High Court rejected application holding that liability arises only upon payment of award and cause of action had not arisen – Supreme Court held that existence of arbitration agreement was undisputed – Whether claim is arbitrable or cause of action has arisen is matter for arbitral tribunal to decide – Reiterated limited scope of judicial scrutiny under Section 11(6) as clarified in Office for Alternative Architecture and In Re: Interplay – Held: High Court erred in refusing to refer dispute to arbitration – Appeal allowed – Justice Bhaskar Bhattacharya (Retd. C.J., Gujarat High Court) appointed as sole Arbitrator [Paras 8–14].

Insolvency and Bankruptcy Code – Maintainability of Section 7 IBC Petition – Preference Shareholders – Financial Debt – Appellant, a preference shareholder, filed Section 7 petition for non-payment of redemption amount of CRPS – NCLT and NCLAT dismissed petition, holding CRPS did not constitute financial debt – Supreme Court upheld dismissal – Held: Preference shares are part of share capital, not debt – Redemption contingent on company having profits or proceeds of fresh issue – Appellant ceased to be creditor upon accepting preference shares in lieu of receivables – No default under IBC established – Petition under Section 7 IBC not maintainable [Paras 1, 2, 19, 20, 24-26, 29-34, 36, 38-39, 46-47, 50].

Company Law – Nature of Preference Shares – CRPS do not constitute debt – As per Section 55 of Companies Act, redemption of preference shares only permissible from profits or fresh share issue – Preference shareholders are not creditors – Preference shares are part of capital structure – Non-redemption does not convert them into debt – Held: Even after maturity, preference shares remain share capital, not enforceable debt – No right to initiate insolvency proceedings arises [Paras 19-24, 26-27].

Interpretation of IBC – Financial Debt – Essential elements – For a claim to be financial debt under Section 5(8) IBC, there must be disbursal against consideration for time value of money – CRPS not disbursed amount – No loan or borrowing established – No commercial effect of borrowing under Section 5(8)(f) IBC – Held: Preference share capital lacks foundational elements of financial debt – Conversion of receivables into CRPS extinguished earlier debt – CRPS issuance was an equity infusion, not a debt transaction [Paras 28-31, 46-48].

Default under IBC – Applicability of Section 3(12) – Default requires due and payable debt that remains unpaid – Redemption of CRPS not due as company had no profits or fresh issue proceeds – No default within meaning of Section 3(12) IBC – Petition under Section 7 rightly rejected on this ground [Paras 34-36].

Corporate Insolvency – Entries in Books of Account – Not conclusive – Treatment of CRPS in financial statements as unsecured loan or financial liability irrelevant – Accounting treatment cannot override statutory provisions or alter legal nature of transaction – Entries in accounts do not determine existence of financial debt under IBC [Paras 43-45].

Distinction between Creditor and Shareholder – Redeemable Preference Shareholder cannot be equated with creditor – Supreme Court reiterated that redemption obligation does not create creditor-debtor relationship – Conversion of outstanding receivables into CRPS amounted to capital restructuring, not a borrowing – No right to recover via insolvency proceedings [Paras 38-39, 49].

Precedents Distinguished – Case law cited by appellant including Sanjay D Kakade, Global Credit Capital, and Pioneer Urban Land held inapplicable – Each case turned on distinct facts or involved different forms of debt – Present case involved clear and conscious conversion of dues into equity capital – Earlier receivables stood extinguished – No underlying intent to mask borrowing established [Paras 38, 41-42, 49].

Decision: Appeal dismissed – Application under Section 7 IBC held not maintainable – Appellant, being a preference shareholder, is not a financial creditor – No order as to costs [Para 50].

Criminal Law – Threatening Witness to Give False Evidence – Section 195A IPC – Legislative Intent – Section 195A IPC (introduced by Act 2 of 2006) created a distinct offence of threatening or intimidating a witness to induce false evidence – Classified as a cognizable offence in the First Schedule of CrPC – Unlike Sections 193–196 IPC which are non-cognizable – Held: The offence under Section 195A IPC stands outside the procedural fetters of Section 195(1)(b)(i) CrPC – Police can register FIR and investigate under Sections 154 and 156 CrPC without prior complaint from the court [Paras 17–20, 28–30].

Criminal Procedure – Section 195A CrPC – Additional Remedy, Not a Restriction – Section 195A CrPC (introduced by Act 5 of 2009) allows a witness or any other person to file a complaint for the offence under Section 195A IPC – It provides an optional route and does not preclude registration of FIR by police – The word “may” in Section 195A CrPC denotes discretion and not compulsion – Both mechanisms (police FIR and complaint before Magistrate) coexist harmoniously [Paras 19–21, 29].

Interpretation of Statutes – Harmonious Construction – Section 195A IPC and Section 195A CrPC to be construed together to give full effect to legislative intent – Court held that omission to specifically exclude Section 195A IPC from Section 195(1)(b)(i) CrPC was not a casus omissus – Judicial interpretation should not add words but reconcile provisions logically – Harmonious construction ensures that threat to witness is actionable immediately, preserving the deterrent purpose of the amendment [Paras 27–29].

Cognizable Offence – Registration of FIR – Validity – As Section 195A IPC is cognizable, police officers are empowered under Section 154 CrPC to register FIR and investigate without Magistrate’s order – Filing of court complaint is not mandatory – Delay in registering FIR or confusion among authorities cannot curtail this power – Held: High Courts erred in insisting on procedure under Section 195(1)(b)(i) CrPC [Paras 28–30].

Doctrine – Casus Omissus – Not Applicable – Laxity in legislative drafting cannot justify judicial legislation – Court cannot rewrite statute to create two classes of offences under Section 195A IPC depending on whether threat occurs in relation to court proceedings or outside – Clear statutory language and structure show legislative intent to treat Section 195A IPC independently [Paras 26–27].

Precedents – Divergent High Court Views Resolved – Delhi, Madhya Pradesh, and Calcutta High Courts correctly held that Section 195A IPC is cognizable and police can register FIR – Gauhati and Kerala High Courts wrongly applied Section 195(1)(b)(i) CrPC – Conflict resolved in favour of wider interpretation recognizing police power to act directly [Paras 21–24, 30].

Statutory Scheme – Historical Context – Chapter XI IPC (“Offences against Public Justice”) includes Sections 191–195A – While Sections 193–196 IPC were non-cognizable and required court complaint, Section 195A IPC, inserted in 2006, was deliberately made cognizable to prevent intimidation of witnesses before or during judicial proceedings – Legislative purpose was to enable swift protection of witnesses through immediate police intervention [Paras 3–10, 17–19, 28].

Case Law – Application of Prior Rulings – Reliance on Union of India v. Ashok Kumar Sharma (2021) 12 SCC 674 rejected as inapplicable; statutory context under Drugs & Cosmetics Act, 1940 distinguished – Followed Salib @ Shalu v. State of U.P. (2023) 20 SCC 194 to clarify that Section 195 CrPC does not control Section 195A IPC [Paras 18, 25].

Constitutional Law – Judicial Restraint – Court reiterates principle that interpretation must give effect to legislative intent without creating procedural barriers defeating substantive justice – Harmonization of CrPC and IPC provisions ensures effective protection of witnesses, fulfilling constitutional obligation under Article 136 jurisprudence [Paras 27–30].

Decision: Appeals allowed – Orders of Kerala and Karnataka High Courts set aside – FIRs and cognizance orders restored – Offence under Section 195A IPC held cognizable and independently triable – Police empowered to investigate without complaint under Section 195(1)(b)(i) CrPC – Accused Suni @ Sunil directed to surrender; liberty to seek bail on other grounds – Proceedings against Basayya Thirakaya Hiremath restored before Trial Court [Paras 30].

Public Interest Litigation – Unauthorized Constructions – Right of Hearing – High Court, in a PIL, directed closure of 172 civil suits and removal of unauthorized constructions in Gurugram, citing violations of planning norms – Appellants (landowners/occupiers) were not parties to the writ petition – Supreme Court held: Directions issued without impleading affected parties and affording hearing violate principles of natural justice – Order liable to be set aside [Paras 2, 6, 9]

Urban Development – Jurisdiction of Civil Courts – Section 15 of HDRUA Act – High Court directed closure of pending civil suits citing bar on jurisdiction under Section 15 – Held: Civil court jurisdiction cannot be conclusively ousted without adjudication – Affected persons entitled to be heard before such directions are passed [Paras 5, 6, 9]

Administrative Law – Due Process – Mandamus issued by High Court for demolition/removal of constructions – Held: Authorities must afford opportunity to affected owners/occupiers before enforcing such actions – Determination of illegality must follow due process [Paras 8–10]

Procedural Directions – Appeals Allowed – High Court’s order dated 13.02.2025 set aside – Writ Petitions (CWP Nos. 1528 and 2106 of 2021) restored – Appellants allowed to file appropriate applications within 2 weeks – High Court to re-decide the matter after hearing all affected parties, preferably within 6 months – State directed to give wide publicity to facilitate impleadment of affected persons [Paras 10–12]

Decision: Appeals allowed – High Court order set aside – Writ Petitions restored for fresh adjudication after affording hearing to all affected persons – Pending applications disposed of.

Practice and Procedure – Adverse Remarks Against Counsel – Modification of Order – Supreme Court had imposed Rs. 2 lakh costs and made adverse observations against State Election Commission’s counsel for persistent insistence despite repeated disinclination expressed by the Bench – Counsel filed Miscellaneous Application seeking expungement and waiver of cost – Held: Once Court indicates its mind, further insistence by counsel is inappropriate and undermines courtroom decorum – However, considering unqualified apology and first-time conduct, adverse remarks and cost are deleted with caution against future recurrence [Paras 3, 6–9].

Advocacy – Duty Towards Court vs Client – Counsel must strike balance between duty to client and maintaining decorum of court – Persistent submissions after clear judicial indication disturb dignified functioning of Court – Assurances from senior bar members considered in granting relief [Paras 6–7].

Decision: Application allowed – Remarks against counsel expunged – Cost of Rs. 2,00,000 deleted – Counsel cautioned not to repeat such conduct [Para 9].

Service Law – Departmental Enquiry – Proof of Charges – TTE dismissed for alleged demand of illegal gratification and possession of excess cash – Primary complainant not examined and his written statement relied upon without opportunity for cross-examination – Other complainants did not support prosecution version – Held: Non-examination of key witness and contradictions in other testimonies vitiate findings – Enquiry Officer’s report perverse and unsustainable – CAT rightly set aside dismissal – High Court erred in reversing CAT [Paras 17.1, 18]

Departmental Proceedings – Evidence – Reliance on Unexamined Witness – Placing reliance on written complaint of unexamined person constitutes denial of fair hearing – Finding based on such evidence is perverse – Violation of principles of natural justice [Paras 17.1, 18]

Possession of Excess Cash – No Rule fixing ceiling on cash carried by TTE – Amount deposited in Railway Sundry Accounts on same day – Circular relied on by department issued after date of incident – Charge unsustainable [Para 17.2]

Failure to Recover Fare Difference – Rs.18 difference allegedly not recovered – No receipt book produced and passenger not examined – Finding based solely on vigilance officer’s statement – Charge not proved [Para 17.3]

Forgery of Duty Card Pass – No handwriting expert opinion obtained – Enquiry Officer himself found charge unproved – No evidence to establish forgery – Charge fails [Para 17.4]

Judicial Review – CAT’s interference justified when findings are perverse or based on no evidence – High Court cannot reappreciate evidence mechanically to sustain dismissal – High Court’s reversal of CAT order unsustainable [Para 18]

Service Benefits – Employee deceased during litigation – Consequential monetary and pensionary benefits to be released to legal heirs within three months [Para 18-19]

Decision: Appeal allowed – High Court’s judgment dated 21.09.2017 set aside – Order of CAT dated 21.03.2002 restoring reinstatement upheld – All consequential monetary and pensionary benefits directed to be released to legal heirs within three months.

NDPS Act – Confiscation of Vehicle – Interim Release – Jurisdiction of Special Court – Rules of 2022 do not divest the Special Court of power to order interim custody of a seized conveyance – Subordinate legislation cannot override parent statute – Power under Sections 451 & 457 CrPC [497 & 503 BNSS] remains intact – High Court’s contrary view unsustainable [Paras 13, 22, 29-30]

NDPS Act – Sections 60(3) & 63 – Confiscation of Conveyance – Burden of proof on owner to show lack of knowledge or connivance – Confiscation can only follow judicial determination by Special Court after hearing claimant – Drug Disposal Committee cannot decide ownership or confiscation of vehicle – Violation of natural justice if deprived without hearing [Paras 19-22]

Subordinate Legislation – NDPS (Seizure, Storage, Sampling and Disposal) Rules, 2022 – Rules merely procedural and supplemental – Cannot curtail substantive rights of owner or judicial power of Court – Administrative Committee cannot substitute judicial adjudication under NDPS Act [Paras 13, 15-17, 27-30]

Interim Custody – Vehicle Seized under NDPS Act – Where owner not arrayed as accused and prima facie shows bona fides and absence of knowledge, Special Court empowered to release vehicle on supurdagi – Principle from Bishwajit Dey v. State of Assam, 2025 INSC 32 applied – Case fits within fourth category in Bishwajit Dey

(contraband recovered from third party without owner’s connivance) [Paras 31-35]

Presumption – Owner’s Knowledge – Mere presence of contraband in transport vehicle not sufficient to presume complicity of owner where no material indicates knowledge or connivance – Bonafide transporter carrying lawful goods entitled to interim release [Paras 31-33, 35]

Principles of Natural Justice – Property rights of innocent owner protected – Confiscation entails deprivation of property and must follow judicial process with opportunity of hearing – Rules of 2022 cannot override this constitutional safeguard [Paras 22, 27, 29]

Decision: Appeal allowed – Judgment of Madras High Court dated 20.12.2024 set aside – Vehicle bearing Registration No. TN 52 Q 0315 directed to be released to appellant on supurdagi subject to conditions imposed by the Special Court – Interpretation of Rules of 2022 clarified – Special Court retains jurisdiction to grant interim custody of seized conveyances [Paras 36-37].

Commercial Courts Act, 2015 – S.12A – Urgent interim relief – IP infringement – Delay per se does not negate urgency where infringement is continuing – High Court orders rejecting plaint set aside – Suit restored to be decided on merits [Paras 20-26, 27-28]

Commercial Law – Pre-Institution Mediation – Section 12A – Meaning of “contemplates any urgent interim relief” – Test reiterated that courts examine plaint, pleadings and annexed documents to see if urgent interim relief is genuinely required from the standpoint of the plaintiff – Court is not to decide merits at this stage – Pro forma/anticipatory prayers to bypass mediation to be ignored [Paras 18-20]

Intellectual Property – Continuing Infringement – Urgency – Each act of manufacture/sale/offer for sale is a fresh wrong creating a recurring cause of action – Mere delay in filing suit does not legalise infringement nor defeat the right to injunction against a dishonest user – Urgency may be inherent where ongoing acts cause immediate and irreparable harm to goodwill, reputation and proprietary rights [Paras 22-23]

Public Interest – IP disputes implicate consumer confusion and market integrity – Preventing deception and confusion furnishes an additional element of immediacy for interim protection – Section 12A not intended to render a plaintiff remediless during ongoing infringement [Paras 16, 24]

Procedure – Section 12A v. Ongoing IP Infringement – Courts below erred by treating lapse of time as negating urgency and by evaluating entitlement to interim relief on merits rather than the plaintiff’s stand-point and material on record – Rejection of plaint under Order VII Rule 11 CPC for non-compliance with Section 12A set aside [Paras 25, 27-28]

Principles Culled Out – (i) Section 12A is mandatory; violation ordinarily renders institution defective – (ii) Exemption lies only where plaint and documents disclose a real need for urgent interim intervention – (iii) Look for immediacy of peril/irreparable harm/risk to rights/perishable subject-matter/time sensitivity – (iv) Sham/anticipatory prayers to skip mediation to be ignored – (v) Court is concerned with plausibility of urgency, not its eventual success [Para 20]

Decision: Appeal allowed – Orders dated 28.08.2024 (Single Judge) and 13.11.2024 (Division Bench, HP High Court) set aside – Commercial Suit No. 13 of 2024 restored for decision on merits in accordance with law [Paras 27-28]