SCO.LR | 2025 | Volume 6 | Issue 2

Here’s the latest Issue of the Supreme Court Observer Law Reports (SCO.LR)!

SCO.LR brings you five important Supreme Court judgments each week. This week’s edition includes judgments from 1 to 15 June. The issue covers a broader time frame as the Court is observing its partial working days, delivering fewer judgements than usual. 

This week we’re looking at judgements on the right person to authorise closure of industries, the duties that building developers have towards buyers and the rights of an accused during a narco-analysis test. Scroll along this SCO.LR issue for more.

**********

The Supreme Court Observer Law Reports 2025 

SCO.LR | Volume 6 | Issue 2

1 June – 15 June 2025

**********

Defaulting Borrower Cannot Invalidate Sale by Citing Own Breach

Machhindranath v Ramchandra Gangadhar Dhamne

2 June 2025

Citations: 2025 INSC 795 | 2025 SCO.LR 6(2)[6]

Bench: Justices Sudhanshu Dhulia and Ahsanuddin Amanullah

The Supreme Court held that a loanee cannot take advantage of their own breach to nullify a transaction. Only the aggrieved party could seek to set aside such a sale.

Machhindranath secured a loan from a co-operative society by putting his ancestral land as security. During the course of the loan, he signed a formal sale agreement in favour of his nephew for another loan, alongside a private agreement promising return of the land upon repayment. The nephew sold part of the land to a third party. Machhindranath filed a civil suit claiming that the sale was a security arrangement and argued that the sale deed would be void under the Maharashtra Co-operative Societies Act, 1960. The Trial Court ruled in his favour, but the High Court reversed it.

The Supreme Court dismissed the appeal. It held that the provision on the voidability of the sale agreement could be invoked only by the aggrieved party, the co-operative society. As Machhindranath had broken the terms himself, he could not claim that the sale was void. 

Keywords/phrases: Bombay High Court—order upheld—Maharashtra Co-operative Societies Act, 1960—Section 48—defaulter may not declare sale void—society’s exclusive right to challenge—ex injuria sua nemo habere debet

Read the Judgement here.

**********

Order on Application Seeking Closure of Industry Must be Issued in 60 Days

Harinagar Sugar Mills Ltd. v State of Maharashtra 

4 June 2025

Bench: Justices Sanjay Karol and P.K. Mishra

Citations: 2025 INSC 801 | 2025 SCO.LR 6(2)[7]

The Supreme Court held that an application to close down an industrial establishment can only be approved by the Labour Minister. If no order is communicated within 60 days, closure is deemed approved. 

Harinagar Sugar Mills Limited applied for closure after its job work agreement with Britannia Industries Limited ended. They filed an application under Section 25-O of the Industrial Disputes Act, 1947. The Deputy Secretary, Government of Maharashtra, sought resubmission twice, citing incomplete details. The Bombay High Court ruled that the deeming provision under Section 25-O did not apply, as the applications lacked reasons for closure.

The Supreme Court found the applications to be complete and the closure reasons genuine. It held that the right to close a business is protected under Article 19(1)(g), subject to reasonable restrictions. The Deputy Secretary’s letters lacked independent application of mind and did not qualify as valid orders. 

Key phrases: Bombay High Court—closure application rejected—Section 25-O of the Industrial Disputes Act, 1947—deemed closure—appropriate Government—Labour Minister—application of mind—appeal allowed

Read the Judgment here.

**********

Developers Not Liable to Pay Interest on Personal Loans Taken by Buyers

Greater Mohali Area Development Authority (GMADA) v Anupam Garg

4 June 2025

Citations: 2025 INSC 808 | 2025 SCO.LR 6(2)[8]

Bench: Justices Sanjay Karol and P.B. Varale

The Supreme Court held that developers must refund the principal amount paid against a sale of property with interest for delays in delivering homes, but are not liable to pay interest on personal loans taken by buyers to finance their properties.

Anupam Garg had secured a flat allotment under the Greater Mohali Area Development Authority’s (GMADA) 2011 housing scheme. Possession was due by May 2015. As GMADA failed to deliver on time, Garg opted out and sought a refund as per the Letter of Intent, which promised the return of all deposited amounts with 8 percent compounded interest, without any further liability. Garg filed a consumer complaint. Both the State and National Commissions directed GMADA to refund the amount with interest and with interest that Garg paid on his loan. 

The Supreme Court reaffirmed that the 8 percent interest paid on the refund amount already covered the consequences of delay; additional damages under separate heads, such as loan interest, were impermissible.

Key words/phrases: Delay in possession—LOI stipulates 8% compound interest—Consumer forums grant additional compensation on loan taken by buyer—Supreme Court disallows interest on loan—no multiple heads for the same default

Read the Judgement here. 

**********

 Charge for Misdeclaration of Goods Permitted Both Before and After Delivery 

Union of India v M/S Kamakhya Transport Pvt Ltd

5 June 2025

Citations: 2025 INSC 805 | 2025 SCO.LR 6(2)[9]

Bench: Justices Sanjay Karol and P.K. Mishra

The Supreme Court held that Section 66(4) of the Railways Act 1989 permits the levy of a punitive charge against the owner/consignee, be it before or after the delivery. 

The railway authorities raised demand notices against the respondents for misdeclaration of goods with a punitive charge. The charge was imposed after the goods had been delivered. The Railway Claims Tribunal and the Gauhati High Court agreed with the respondents that a charge could not be levied after the delivery of goods.

The Supreme Court set aside the High Court’s judgement. As Section 66(4) was silent on the issue, the Court concluded that charges could be levied both before and after the delivery of goods. 

Keyphrases: Gauhati High Court—Order Set Aside—Railways Act 1989—Section 66(4) —Charge of Double Rate—Permitted Before and After Delivery of Goods—Demand Notice—Different Ground of Challenge As Charge—Not Applicable.

Read the Judgement here. 

**********

Accused Persons do not have an Absolute Right to a Narco-analysis Test

Amlesh Kumar v The State of Bihar

9 June 2025

Citations: 2025 INSC 810 | 2025 SCO.LR 6(2)[10]

Bench: Justices Sanjay Karol and P.B. Varale

The Supreme Court held that an accused person does not have an indefeasible right to seek a narco-analysis test to lead the evidence. The decision brings clarity to the law following several conflicting High Court judgements on the issue.  

The Patna High Court had allowed narco-analysis tests for all the accused persons in a dowry harassment and kidnapping case. The High Court was hearing a plea for the grant of regular bail by the accused persons. 

The Supreme Court noted that the High Court had exceeded the scope of a bail hearing by approving a narco-analysis test. Further, they reiterated Selvi v State of Karnataka (2010), where the Court had held that a narco-analysis test cannot form the sole basis of conviction.

Key words/phrases: Narco-analysis test—Patna High Court approved test in bail hearing—Supreme Court set aside HC Order—Held that narco test cannot be sole basis for conviction—no absolute right of accused to seek narco test

Read the Judgement here.