SCO.LR | 2026 | Volume 2 | Issue 4

Volume 2 Issue 4 of the Supreme Court Observer Law Reports is here! This will be the final issue of February.

In this issue, we have listed five judgements from the top court that deal with: sentencing; admissibility under the Evidence Act; corporate insolvency; termination of employment on the basis of invalid university degrees; and compensation in delayed housing projects. 

Read them all on the SCO.LR page, with mindmaps that will assist your research. 

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The Supreme Court Observer Law Reports

SCO.LR | Volume 2 | Issue 4

16 – 20 February 2026

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Validity of Section 27 Statements under Evidence Act 

Rohit Jangde v State of Chhattisgarh 

17 February 2026

Citation: 2026 INSC 162 | 2026 SCO.LR 2(4)[16]

Bench: Justices P.V. Sanjay Kumar and K.V. Chandran

The Supreme Court held that a recovery statement made under Section 27 of the Indian Evidence Act, 1872 is not admissible if the accused was not in formal custody of the police when the information was provided. 

On 5 October 2018, the appellant had a physical altercation with his second wife, resulting in her hospitalisation. An FIR was subsequently filed against him but conflicting evidence made it unclear whether he was arrested on 5 October or 6 October. A neighbour alleged that the appellant had left on a motorcycle with his stepdaughter following the incident. However, a missing report was only registered for the daughter on 11 October. An oral report claimed she disappeared at 9 pm on 6 October. On 13 October, the accused provided a Section 27 statement regarding the location of the child’s remains. From that site, the police recovered bones, ashes, a skull and teeth fragments. The vertebrae and teeth matched the child’s biological parents. The police then arrested the accused for murder that same day. The High Court upheld his conviction based on the neighbour’s statement and the DNA match.

The Supreme Court set aside the High Court verdict acquitting the appellant on the ground that the chain of circumstantial evidence was broken. The claim that the appellant had left on a motorcycle could not be corroborated as he was in police custody when the child went missing. Moreover, the neighbour’s statement was recorded seven days after the altercation. The Court did not consider the Section 27 statement as the accused was not in formal custody when it was recorded and was only arrested after the remains were found. It clarified that the adjudicating authority only checks for debt and default at the stage of initiating the corporate insolvency resolution process (CIRP) under Section 7. It does not need to determine financial viability or existence of disputes at this stage. 

Keywords/phrases: Circumstantial evidence—theory of last seen together—Section 27 of the Indian Evidence Act, 1872—information received from accused at the time of custody—corroboration of evidence—botched investigation—accused acquitted

Read the Judgement here. 

MIND MAP

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Compensation in Lieu of Sentencing in Criminal Trials 

Parameshwari v State of Tamil Nadu

17 February 2026

Citations: 2026 INSC 164 | 2026 SCO.LR 2(4)[17]

Bench: Justices Rajesh Bindal and Vijay Bishnoi

The Supreme Court held that compensation cannot always be treated as a substitute for a reduced sentence. Sentences cannot be reduced mechanically and should have a visible application of mind. 

The accused persons were convicted for offences of attempt to murder (Section 307), voluntarily causing hurt (Section 324) and grievous hurt (Section 326) under the India Penal Code, 1860. The Trial Court had ordered three years of rigorous imprisonment with a fine of ₹5,000 each. The High Court upheld the convictions and remitted the sentence to the period already undergone, with an enhanced compe of ₹50,000 each to the victim’s wife. 

The Supreme Court set aside the High Court Judgement and observed that such compensation was a kind of “blood money”. The Court recognised that Section 395 of the Bharatiya Nagarik Suraksha Sanhita, 2023 granted monetary compensation to the victim, but only in addition to the sentence awarded and not as an alternative. The Court identified proportionality, facts and circumstances, societal impact, and aggravating and mitigating factors as basic considerations to be kept in mind while imposing a sentence. 

Keywords/phrases: compensation in criminal cases—Section 395 of Bharatiya Nagarik Suraksha Sanhita, 2023—mechanical reduction of sentence—application of mind—payment of compensation not an alternative to prison sentence—compensation should consider facts and circumstances—aggravating and mitigating factors

Read the Judgement here. 

MIND MAP

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Viability Pleas in Corporate Insolvency Resolution

Power Trust v Bhuvan Madan

18 February 2026

Citation: 2026 INSC 166 | 2026 SCO.LR 2(4)[18]

Bench: Chief Justice Surya Kant and Justices Joymalya Bagchi and V.M. Pancholi

The Supreme Court held that failed restructuring proposals do not replace or novate original loan agreements. It clarified that viability and disputes cannot be looked into at the stage of initiating the Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code, 2016.

Power Trust took a loan of around ₹2000 crore from the creditor to set up a thermal power plant in Haldia, West Bengal. It was classified as a Non-Performing Asset in 2018. Loan restructuring plans were approved subject to fulfilment of pre-conditions. When Power Trust failed to fulfil these conditions, REC filed an application to initiate CIRP which was admitted by the National Company Law Tribunal, Kolkata and upheld by the National Company Law Appellate Tribunal. The appellants moved the Supreme Court, contending that the date of first default fell within the pandemic period barred under Section 10A.

Dismissing the appeal, the  Supreme Court directed the CIRP to continue. It found that the first default was made on the original contract, prior to the pandemic period and held that restructuring plans did not novate the original contract as they were underpinned to preconditions that were not fulfilled. Distinguishing between financial and operational creditors, the Court clarified that applications filed by the former do not provide for a demand notice or determination of dispute. It emphasised that the commercial wisdom of the Committee of Creditors cannot be second guessed by a court.

Keywords/phrases: Default on loan payments and non-fulfillment of restructuring plan preconditions—Financial creditors apply for Corporate Insolvency Resolution Process (CIRP)—Section 7, Insolvency and Bankruptcy Code, 2016—Not barred by pandemic period under Section 10A—Restructuring plans do not novate original contract—no scope for determination of dispute under Section 7—Commercial wisdom of CoC not to be second-guessed by court

Read the Judgement here.

MIND MAP

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Termination of Employment on Ground of Invalid Degree

Priyanka Kumari v State of Bihar

18 February 2026

Citations: 2026 INSC 167 | 2026 SCO.LR 2(4)[19]

Bench: Justices Rajesh Bindal and Vijay Bishnoi

The Supreme Court held that it is illegal to terminate services of an employee on the ground that their university degree was declared invalid after their graduation.

In 2004, the appellants graduated from the University of Technology and Science, Raipur, Chhattisgarh with a Bachelors of Library Science degree. The University was established under the Chhattisgarh Niji Kshetra Viswavidyalaya Act 2002. The statute was declared invalid by the Supreme Court in 2005, on the ground that the legislative assembly was not competent to enact it. In 2009, the appellants were recruited as librarians by the Bihar government. The challenge to their recruitment was dismissed by the Patna High Court, which was dismissed. However, the State terminated their employment in 2015. A writ petition was dismissed by the High Court, a civil appeal was filed before the Supreme Court. 

The Supreme Court reinstated employment, noting that the appellants cannot be at fault merely for studying in a university established under an Act subsequently declared ultra vires.

Keywords/phrases: Chhattisgarh Niji Kshetra Viswavidyalaya Act 2002–Declared ultra vires–Appellants completed education–Appointed as librarians–Appointment challenged–Dismissed by High Court–Service termination held invalid–Entitled to the benefit of university degree

Read the Judgement here. 

MIND MAP

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Reasonable Compensation in Delayed Housing Projects

Parsvnath Developers Ltd. v Mohit Khirbat

20 February 2026

Citations: 2026 INSC 170 | 2026 SCO.LR 2(4)[20]

Bench: Justices B.V. Nagarathna and  R. Mahadevan

The Supreme Court held that the power to award just and reasonable compensation in a deficient housing service flows from the Consumer Protection Act, 1986 and cannot be curtailed by a one-sided clause in a builder-buyer agreement. 

The disputes involved delays by a builder to hand over flats to three investors in a Gurugram project. The National Consumer Disputes Redressal Commission (NCDRC) directed the developer to complete construction and deliver possession. It also awarded interest compensation at eight percent per annum until possession, extended rebate, awarded costs and imposed post-cut-off stamp duty increases on the developer. The developer appealed, relying on the builder-buyer agreement clause which provided nominal compensation for delays and obligated buyers to pay stamp duty.

The Supreme Court upheld the NCDRC’s directions and dismissed the appeals. Further, it held that the award must be reasonable and proportionate to the delay and hardship caused, deprivation and hardship established on record. It granted the developer six months to secure the Occupancy Certificate and hand over possession in two matters. It clarified interest computation and issued directions for the supply of an Occupancy Certificate supply directions in the third.

Keywords/phrases: Statutory jurisdiction of consumer fora—Consumer Protection Act, 1986—deficiency in service—one-sided and unreasonable clauses in builder-buyer agreement—unfair trade practice—just and reasonable compensation—contractual cap on compensation for delay—consumer fora not bound by contractual clause for compensation

Read the Judgement here. 

MIND MAP