Arbitration Law – Expiry of Arbitrator’s Mandate – Substitution of Arbitrator – Section 29A(6) – Arbitrator became functus officio upon expiry of statutory period under Section 29A – Despite failure to make award within prescribed time, High Court erroneously extended mandate – Held: Mandate of sole arbitrator had already terminated by operation of law under Section 29A(4) – Court is obligated to substitute arbitrator in such cases – New arbitrator to continue from existing stage [Paras 11–14].

Statutory Interpretation – Independent Remedies under Arbitration Act – Sections 14, 15 vs. 29A – Rejection of petitions under Sections 14 and 15 does not preclude substitution under Section 29A(6) – Section 29A operates independently to address delay and ensure time-bound arbitration – Mandate can be terminated and fresh arbitrator appointed even if prior termination petitions have failed [Paras 12–13].

Arbitration – Delay in Proceedings – Effect of COVID-19 on Limitation – Delay period between 15.03.2020 and 28.02.2022 excluded due to pandemic – On calculation, arbitrator was bound to render award by 28.02.2023 – Failure to do so without extension rendered arbitrator’s mandate terminated – Held: Continuation of arbitrator after expiry of mandate without valid extension is impermissible [Paras 11–12].

Judicial Power – Court’s Role under Section 29A(6) – Scope – Section 29A(6) grants discretion to substitute arbitrator once mandate ceases – High Court erred in merely extending time without addressing termination – Substitution necessary to uphold intent of time-bound arbitration regime – Appellate Court appoints former High Court judge as substituted arbitrator [Paras 13–14].

Decision: Appeals allowed – High Court order dated 22.04.2025 set aside – Mandate of arbitrator Mr. Anjum Javed stands terminated – Justice Najmi Waziri (Retd.), Former Judge of Delhi High Court appointed as substituted sole arbitrator – Proceedings to continue from prior stage and conclude within six months [Paras 14–15].

Criminal Procedure Code, 1973 – Section 102 – Prevention of Corruption Act, 1988 – Section 18A – Freezing of Bank Accounts – Mutually Exclusive Powers – The High Court held that freezing of accounts for PC Act offences can only be done via the attachment procedure in Section 18A (applying Ordinance of 1944) and not Section 102 CrPC – Held: The powers under Section 102 CrPC (Seizure) and Section 18A PC Act (Attachment) are distinct and not mutually exclusive – Seizure under Section 102 is an investigative power to secure evidence or prevent disposal of suspect property, whereas Attachment under the Ordinance is a judicial process leading to confiscation – Police can exercise power under Section 102 CrPC to freeze accounts during investigation of PC Act offences - [Paras 11, 17]

Judicial Precedent – Binding Nature – Ratio Decidendi – High Court relied on Ratan Babulal Lath v. State of Karnataka to hold PC Act is a complete code excluding CrPC Section 102 – Held: Ratan Babulal Lath does not constitute binding precedent as it did not discuss the facts, the scheme of the Act, or its interaction with procedural laws – A decision is authority only for what it actually decides based on facts – The PC Act is not a self-contained code to the exclusion of Section 102 CrPC regarding seizure - [Paras 12, 15]

Criminal Procedure Code, 1973 – Section 102(3) – Reporting Seizure to Magistrate – The requirement to report seizure "forthwith" to the Magistrate is to ensure judicial oversight – However, delay in reporting does not ipso facto vitiate the seizure if the delay is explained or not wanton – The power of seizure is wide to facilitate investigation - [Paras 28 (citing Shento Varghese), 11]

Decision: Appeal allowed - Impugned judgment of the High Court set aside - Respondent directed to re-deposit released amount or furnish security.

Insolvency and Bankruptcy Code, 2016 – Section 9 – Operational Creditor vs Corporate Debtor – Pre-existing Dispute – Moonshine Defence – The NCLAT set aside the NCLT's admission order on the ground of pre-existing disputes regarding short supply and faulty cables raised in 2018-2019 – The Appellant (Operational Creditor) relied on the Corporate Debtor's own email from 2021 confirming the ledger balance and subsequent payments made even after the demand notice – Held: The defence of pre-existing dispute was mere moonshine and had no credible basis – The minor issues raised by the Corporate Debtor did not stop further supplies or payments, as evidenced by the ledger account – The NCLAT failed to attach requisite importance to the Corporate Debtor's admission of liability and the payments made after the alleged dispute – Order of admission restored - [Paras 19-21]

Insolvency and Bankruptcy Code, 2016 – Section 9 – Adjudicating Authority’s Duty – The Adjudicating Authority must determine if the dispute truly exists in fact and is not spurious, hypothetical, or illusory – Where the Corporate Debtor continued to make payments and confirmed the debt balance in writing after the alleged correspondence regarding faulty goods, the dispute cannot be termed as a genuine pre-existing dispute warranting dismissal of the Section 9 application - [Paras 15, 20]

Decision: Appeal allowed - Judgment of NCLAT set aside - Order of admission by NCLT restored.

Tax Law – Deduction under Section 36(1)(viii) – Interpretation of "Derived From" – The appellant claimed deduction on various income streams, arguing they were part of an integrated business of providing finance. The Revenue disallowed this, citing the strict "derived from" requirement introduced by the Finance Act, 1995. – Held: The phrase "derived from" connotes a direct, first-degree nexus between the income and the specific business activity. It is significantly narrower than "attributable to." The 1995 amendment intended to "ring-fence" the fiscal benefit to profits arising strictly from the core activity of providing long-term finance, explicitly excluding ancillary or incidental income. The "integrated business" theory cannot expand the scope of a specific incentive deduction. - [Paras 13-20, 33].

Tax Law – Dividend Income on Redeemable Preference Shares – Appellant claimed deduction on dividends received from investments in redeemable preference shares, arguing they were effectively loans. – Held: Dividend income is not deductible under Section 36(1)(viii). Dividends arise from a contractual relationship of shareholding (ownership), not from the business of providing loans (creditor relationship). Under Section 85 of the Companies Act, 1956, preference shares are share capital. A shareholder cannot sue for debt like a creditor. The immediate source is the investment in shares, not the activity of lending. - [Paras 21-23].

Tax Law – Interest on Short-Term Bank Deposits – Appellant earned interest on idle funds parked in short-term deposits and claimed it was "business income" eligible for deduction. – Held: Not eligible for deduction. While such interest may be classified as "Business Income" generally, it does not satisfy the specific species of "profits derived from the business of providing long-term finance." The immediate source is the bank deposit, which is a step removed from the core activity of long-term lending. Allowing deduction here would create a perverse incentive to park funds rather than lend them for agricultural development. - [Paras 24-28].

Tax Law – Service Charges on Sugar Development Fund (SDF) Loans – Appellant received service charges for monitoring loans funded by the Government of India, acting as a nodal agency. – Held: Not eligible for deduction. The funds belonged to the Government, and the appellant bore no risk and utilized no capital of its own. The income is a fee for agency/administrative services, not profit derived from the business of providing long-term finance. - [Paras 29-31].

Decision: Appeals dismissed - The appellant is not entitled to deductions under Section 36(1)(viii) for the disputed heads of income - Paras [35-36].

Criminal Law – Quashing of FIR – Abuse of Process – Contradictory Civil Suit – Appellants sought quashing of FIR alleging offences under SC/ST Act regarding a property dispute – Complainant filed a civil suit on the very same day the FIR was lodged (25.01.2022) – The FIR alleged a specific incident of trespass and abuse on 21.01.2022, but the plaint in the civil suit made no mention of this incident and traced the cause of action to earlier dates – Held: The FIR based on the First Information Statement (FIS) is a clear abuse of process of law – The allegations in the FIS are unbelievable when compared to the clear averments in the suit filed simultaneously – High Court erred in not quashing the FIR – [Paras 7-10].

SC/ST Act – Section 3(1)(g) – Wrongful Dispossession – Appellants held title to the land via a registered sale deed from 2020 – Complainant sought recovery of possession in the civil suit – Held: Since the land is covered by a sale deed in favour of the first appellant and the complainant herself sought recovery of possession in the civil suit, there can be no question of an offence of wrongful dispossession under Section 3(1)(g) of the Act – [Para 10].

SC/ST Act – Section 3(1)(s) – Casteist Slur – Public View Requirement – Allegation that appellants hurled abuses using the caste name – Held: Offence under Section 3(1)(s) is not made out as there is no allegation that the casteist slur was made in a place within public view or that there was any member of the public present at the spot – [Para 10].

Decision: Appeal allowed - Order of the High Court set aside - FIR No. 18 of 2022 registered in Police Station Kanke, Ranchi quashed - [Para 10].

Arbitration Law – Section 11 – Joinder of Non-Signatories – Scope of Referral Court’s Inquiry – Held: The Referral Court under Section 11 is required to prima facie rule on the existence of the arbitration agreement and whether the non-signatory is a "veritable party". While the Court should not conduct a laborious inquiry, it cannot mechanically refer the matter to the Arbitral Tribunal. If there is no prima facie evidence to show the non-signatory is a veritable party, the Court must reject the referral. The "hands-off" approach does not mean the Referral Court is a "monotonous automation" where absolute strangers can compel arbitration. [Paras 24-28, 33-35]

Arbitration Law – Veritable Party Doctrine – Sub-Contractors – Context: Respondent (BCL) was a sub-contractor to AGC, who had the main contract with Appellant (HPCL). HPCL’s contract prohibited subletting without written consent. BCL claimed to be a veritable party based on back-to-back agreements with AGC and assignment of receivables. – Held: Mere commercial relationship or back-to-back agreement between a contractor and sub-contractor does not make the sub-contractor a veritable party to the arbitration agreement in the main contract. The parties operated on "separate orbits". There was no privity of contract between HPCL and BCL, nor any intention by HPCL to be bound by BCL. [Paras 30-32, 36]

Arbitration Law – Claiming "Through or Under" – Assignment of Rights – Context: Respondent relied on a Settlement-cum-Assignment Agreement with AGC to claim rights against HPCL. – Held: Mere legal or commercial connection is insufficient for a non-signatory to claim "through or under" a signatory. Assignment of obligations requires consent (novation). Since the main contract expressly prohibited assignment without written consent, and no such consent was obtained from HPCL, the assignment was not valid to bind HPCL to arbitration with BCL. [Paras 37-40]

Decision: Appeal allowed. Judgment and order of the High Court dated 07.04.2025 set aside. Arbitration Application dismissed. [Para 43]

Service Law – Pension – Forfeiture of Past Service on Resignation – Context: The deceased employee, a conductor with DTC, resigned after 29 years of service. The resignation was accepted, but a subsequent request to withdraw it was declined. The legal heirs claimed pension, arguing the resignation should be treated as voluntary retirement given the length of service – Held: Under Rule 26 of the CCS Pension Rules, 1972, resignation entails forfeiture of past service unless allowed to be withdrawn in public interest. The Court refused to re-classify the resignation as voluntary retirement, noting that doing so would obfuscate the legal distinction between the two concepts and render Rule 26 nugatory. Consequently, the employee is not entitled to pensionary benefits – Paras 9.1, 9.6, 17.

Labour Law – Payment of Gratuity – Entitlement upon Resignation – Context: The Corporation denied gratuity to the resigned employee, relying on the forfeiture clause in the Pension Rules – Held: Section 4 of the Payment of Gratuity Act, 1972 mandates that gratuity is payable to an employee on termination of employment after rendering continuous service of not less than five years, including cases of resignation. As the Corporation failed to produce any exemption notification under Section 5 of the 1972 Act, the employee is entitled to gratuity despite the resignation – Paras 10, 10.1, 10.2.

Service Law – Leave Encashment – Concession by Employer – Context: Claim for leave encashment by the legal heirs of the resigned employee – Held: The Counsel for the Respondent fairly submitted that there is no bar to releasing leave encashment. The Court directed the release of the same to the family members – Para 11.

Decision: Appeal partly allowed - The Appellants are entitled to Gratuity and Leave Encashment with interest @ 6% p.a. from the date of resignation till payment. The claim for Pension is dismissed - Paras 12.

Revenue Law – Correction of Revenue Map – Jurisdiction under Section 30 of U.P. Revenue Code – Challenge to remand order by High Court – Application by private respondents for map correction dismissed in 1998 and affirmed in appeal in 2001 – After more than 17 years, same issue re-agitated under new Code – Authorities again dismissed application and appeal – High Court wrongly set aside those orders and remanded for fresh consideration – Held: High Court misinterpreted Section 30 – Jurisdiction under Section 30 available only for correction of clerical errors or omissions, not for re-opening settled location of plots – Appeal allowed – High Court order set aside [Paras 2, 4, 5.1, 8, 10, 12–15, 18]

Finality of Orders – Bar on Re-litigation – Private respondents’ application for correction of plot location under 1901 Act dismissed in 1998 and upheld in appeal in 2001 – Order attained finality – No subsequent challenge made – Held: Private respondents were barred from raising same issue after 17 years under new Code – Such attempt amounted to forum shopping and abuse of process – No cause of action arose post purchase as sale was with knowledge of location – Re-agitating same issue impermissible [Paras 3, 3.1, 4, 9, 14]

Interpretation of Section 30, U.P. Revenue Code, 2006 – Scope Limited to Error/Omission Correction – Section empowers Collector to maintain and annually update maps and correct errors or omissions – Not intended to permit re-allocation or change of location of plots already finalised – Word “also” in provision indicates limited scope for correction, not reopening concluded disputes – High Court misread provision by allowing substantive change under guise of correction – Held: Change of location of plot does not fall within ambit of Section 30 – Application rightly dismissed by revenue authorities [Paras 12, 13, 14]

Judicial Discipline – Remand Orders – Interference by Supreme Court – High Court remanded matter on misinterpretation of statute – Held: Though normally Supreme Court does not interfere with remand orders, in cases where remand causes multiplicity of litigation due to erroneous legal understanding, interference is warranted – Courts must avoid unnecessary remands – Reference to Satyadhyan Ghosal, M.C. Mehta, Sudhir Kumar Singh, and Krishnadatt Awasthy – Remand in present case based on flawed legal premise, hence liable to be set aside [Paras 6, 16, 17]

Decision: Appeal allowed – Impugned order dated 21.09.2023 of High Court set aside – Orders dated 15.01.2020 (by Respondent No.4) and 25.04.2023 (by Respondent No.5) restored – Private respondents’ attempt to reopen settled issue disallowed – No further relief to be granted to them [Para 18]

Criminal Law – Anticipatory Bail – Cancellation – Factors to be Considered – The Appellant (Complainant) challenged the High Court's grant of anticipatory bail to the Respondent (Accused), a Senior Accountant alleged to have embezzled over Rs. 3 Crores – Held: The High Court erred by taking a mechanical route and failing to consider the investigation status report which categorically stated the accused was on the run and custodial interrogation was necessary to recover embezzled amounts and identify accomplices – The High Court's reasoning that the accused returned half the amount and was willing to declare assets was insufficient to override the requirements of a fair investigation – Order granting bail set aside. [Paras 9-13]

Criminal Law – Custodial Interrogation – Impact of Chargesheet – The accused contended that since the chargesheet had been filed (on 22.05.2025), custodial interrogation was no longer warranted – Held: Even if a chargesheet is filed, the judgment granting bail is vitiated if it suffers from non-consideration of essential facts at the time of passing the order – The initial failure to consider the gravity of the offence and the conduct of the accused (absconding) renders the bail order legally untenable. [Para 12]

Criminal Law – Principles for Cancellation of Bail – Distinction between Appeal against Grant of Bail and Application for Cancellation – Reiterated principles from Ashok Dhankad v. State (NCT of Delhi) and Vipan Kumar Dhir v. State of Punjab – An appellate court can interfere if the order granting bail suffers from perversity, illegality, or non-application of mind to relevant factors such as the gravity of the offence and the impact on society. [Paras 7-8]

Decision: Appeal allowed. Impugned order dated 02.04.2025 set aside. Accused directed to surrender before the Trial Court within two weeks. [Paras 13, 15]