Supreme Court Observer Law Reports (SCO.LR)

The Supreme Court held that it is duty bound to interfere in a case where an authority, acting under a tender, misinterprets a tender condition which diminishes competition and deprives the state of legitimate revenue.

Shanti Construction participated in a bid for a sand quarry lease and submitted its Income Tax Returns from FY 2020-2021. At the time, the due date for filing returns for FY 2021-22 had not expired. The tender committee rejected the bid for not including the FY 2021-22 returns. The Odisha High Court upheld the tender committee’s rejection and directed the most successful bidder to match Shanti Construction’s higher quote.

The Supreme Court set aside the High Court’s judgment. It held that the Tender Committee’s interpretation of the requirement of the “previous financial year” under Rule 27(4)(iv) of the Odisha Minor Mineral Concession Rules, 2016 was unduly restrictive and reduced competition. The Court directed a fresh tender, with refund of amounts deposited by the previously declared bidder.

The Supreme Court held that an arrest is not illegal if the grounds are not communicated to an accused immediately after an arrest. A written copy of the grounds should be supplied within a reasonable time and not less than two hours before the accused’s appearance before a magistrate.

The accused was arrested for a hit and run incident in July 2024. He approached the Bombay High Court arguing that the grounds of his arrest were not communicated to him as mandated under Article 22 and Section 50 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNS). The Bombay High Court upheld his arrest. On appeal, the Supreme Court stated that it will only look into the validity of his arrest and limited itself to two issues: Whether grounds of arrest must be communicated in every offence under the IPC or BNS? Would an arrest be declared illegal if the grounds are not communicated prior to or immediately after the arrest?

The Court held that there can be no exceptions in communicating the grounds of arrest to an accused. It has to be supplied in a written format, in a language which is understandable to them. If immediate communication is not possible, it must be completed within a reasonable period of time.

The Supreme Court held that the non-disclosure of criminal antecedents is not a ground for disqualification of an election, unless it materially affected the results. The Petitioner was disqualified from holding the post of Councillor due to the non-disclosure of a previous conviction under Section 138 of the Negotiable Instruments Act, 1881.

The High Court of Madhya Pradesh dismissed her revision petition, stating that the election was rightly set aside as per Rule 24-A of the Madhya Pradesh Nagar Palika Nirvachan Niyam, 1994. The petitioner appealed to the Supreme Court, stating that her conviction was set aside and there was no basis to disqualify her.

The Supreme Court held that while the disclosure of criminal antecedents for candidates is necessary for voters to make an informed choice, non-disclosure cannot result in disqualification unless the candidate has been convicted of offences involving moral turpitude. The Court held that since the petitioner failed to disclose her conviction without any justifiable reasons, the petitioner was not entitled to relief.

The Supreme Court held that when allegations in a private complaint disclose the commission of a cognisable offence, the Magistrate may order the registration of an FIR and investigation under Section 156(3) of the Code of Criminal Procedure, 1973 (CrPC). The Court clarified that such a direction is made before taking cognisance and does not qualify as “further investigation” under Section 173(8) of CrPC.

The appellant alleged that the accused forged a rent agreement on a fake e-stamp paper and used it in civil proceedings relating to a property dispute. This attracted Sections 465, 468 and 471 of the Indian Penal Code, 1860 (IPC). The Judicial Magistrate directed registration of an FIR under Section 156(3), which was quashed by a Single Judge. Later the Division Bench of the Karnataka High Court quashed the case on the ground that the Magistrate had not demonstrated application of mind.

The Supreme Court set aside the High Court’s orders. It held that at this preliminary stage, the Magistrate is only required to ascertain whether the complaint discloses a cognisable offence. Once that threshold is met, the police must investigate, and the High Court should not interfere under Section 482 CrPC to halt the process.

The Supreme Court held that an objection petition under Section 47 of the Code of Civil Procedure, 1908 (CPC)—against execution of a decree—should not be treated as the commencement of a new trial.

The Anglo-American Metallurgical Coal Pvt Ltd (Anglo) invoked the arbitration clause in the Long Term Agreement entered into with MMTC for damages on account of unlifted quantity of coal contracted by MMTC. In the arbitration, Anglo was awarded US$78.720 million with interest and costs. A Single Judge of the Delhi High Court dismissed MMTC’s challenge to the Award. The Delhi High Court Bench allowed MMTC’s appeal and set aside the Award. The Supreme Court restored the award. Meanwhile, MMTC filed complaints against its ex-employees alleging fraud and collusion with Anglo. The CBI registered a preliminary enquiry. MMTC filed an objection against the award under Section 47 of the CPC and Order XXI Rule 29 CPC. The Delhi High Court, which is the Executing Court, dismissed the objections on the ground that there was no finding of fraud, cheating and collusion against the ex-officers of MMTC with the officers of Anglo.

The Supreme Court held that MMTC could not successfully demonstrate fraud and found no good grounds to entertain its objections. The Court held that an Executing Court must not go beyond the decree and rehear cases under Section afresh—the scope under Section 47 must be limited.

The Supreme Court held that undue delay which materially affects the finding of the award may vitiate the award on ground of public policy or patent illegality under the Arbitration and Conciliation Act, 1996.

The dispute stemmed from an agreement under which a developer was to construct a building and hand over 50 percent of the built-up area to the landowners in return for an equal share. The developer obtained a Completion Certificate in November 2008 and offered possession. Disagreement arose on whether the construction was completed in accordance with the agreement. Arbitration commenced in 2009 and in 2010, the arbitrator passed an interim order directing return of part of the deposits and possession for the landowners. This order altered the parties’ positions irreversibly and the final award in favour of the landowners, passed 3 years 8 months after the hearings concluded, proved unworkable. The award was challenged in the Madras High Court where a Single Judge partially set aside the award, only for it to be restored by a Division Bench.

On appeal, the Supreme Court set aside the award for patent illegality and held that the delay in delivering the award undermined the credibility of the arbitral process. The Court clarified that while delay alone is insufficient for invalidation, the delay in the present case resulted in a “rudderless” award which failed to finally resolve the disputes. Using its power under Article 142, the Court took an ‘equitable’ view and held that the developer would be entitled to take 50 percent possession after paying the landowner ₹10 crores.

The Supreme Court held that an investigating officer (IO) cannot directly summon a lawyer to extract details of a case in which their client is involved. The IO can summon under the exceptions of Section 132 of the Bharatiya Sakshya Adhiniyam, 2023 (BSA), which protects professional communications. The Bench held that such protection will not be available for in-house counsel as they do not fall within the definition of an “Advocate” under the Advocates Act, 1961.

A summons was issued to an advocate of the Gujarat High Court under Section 179 of the Bharatiya Nagarik Suraksha Sanhita, 2023. The advocate approached the High Court, which dismissed the petition. On appeal, a Division Bench of the Supreme Court referred two questions to a larger Bench. The Chief Justice of India set up a Bench which heard the case under its suo moto jurisdiction.

The Court set aside the summons notice and held that an IO can only issue a summons within the exceptions, if it is approved by a hierarchical superior. Further, the power to issue such a summon is not an absolute or blanket power. Moreover, the summons will be subject to judicial review. The Bench clarified that its holding will not apply to in-house counsel as they have full-time salaried employment and are likely to be influenced by the commercial and business strategies pursued by their employer.

The Supreme Court held that a fire intentionally started by another person, without the insured agreeing to it, is to be treated as an accidental fire.

The Preliminary Surveyor attributed fire to a short circuit, while the Final Surveyor concluded it was not accidental. The National Consumer Disputes Redressal Commission assessed the loss at Rs. 61,39,539, and directed the insurance company to pay the amount, along with simple interest at 9 percent per annum from the date of claim repudiation.

On appeal, the Supreme Court found the National Commission’s view of the policy not providing for coverage of FFF (furniture, fixtures and fittings) as incorrect. Therefore, the Court held that the insured party is entitled to the amounts claimed under the heads of Building, Plant and Machinery, Showroom, Electric Fittings, furniture and fixtures. The Court noted that the cause of the fire was immaterial for it to fall within the policy’s ambit, as long as there was no allegation or finding of fraud on the part of the insured.

The Supreme Court applied the ‘pay and recover’ principle while holding that denying compensation to an accident victim on the ground that it fell outside the purview of an insurance policy would be offensive to the sense of justice.

On 7 October 2014, a bus collided with a motorcycle, killing the rider on the spot. The dependents of the deceased filed a claim before the Motor Accident Claims Tribunal. Aggrieved by the amount of compensation, the dependents appealed the order of the Tribunal in the Karnataka High Court. A second appeal was filed by the insurance company, contending that the bus driver had deviated from the route covered by the policy. The High Court directed the insurance company to compensate the victim and recover dues from the driver or owner of the bus.

The Supreme Court upheld the High Court’s verdict. The Court observed that the accident was no fault of the victim and the High Court correctly balanced the needs of the deceased’s family and the interest of the insurance company. At the same time, it noted that insurance policies operate within four corners of a contract and payments to third parties outside the bounds of the agreement are liable to be made good by the party at fault.

The Supreme Court held that IP suits requiring urgent relief are not required to have a compulsory pre-institution mediation as mandated under Section 12A of the Commercial Courts Act, 2015. The urgency must be determined from the nature of the relief and the continuing harm caused by the alleged infringement.

The appellant, a Danish manufacturer of industrial fans, alleged that its Indian distributor was using its patented design to manufacture and market identical fans, in breach of their dealership agreement. A Single Judge and a Division Bench of the Himachal Pradesh High Court rejected their petition for non-compliance with Section 12A, holding that the delay of several months before filing the suit negated urgency and made mediation mandatory.

The Supreme Court set aside the High Court’s orders, and held that infringement of intellectual property rights is a wrong that causes recurring harm to goodwill, reputation and consumer trust. The Court noted that the exception for urgent interim relief under Section 12A must be applied pragmatically.