Supreme Court Observer Law Reports (SCO.LR)

The Supreme Court held that imposition of high interest rates in a commercial loan transaction does not violate public policy.

Sri Lakshmi Hotel availed two commercial loans for a total of ₹1,57,25,000/- from Sriram City Union Finance in 2006 at an interest rate of 24 percent per annum. The loans were considered high-risk, as the funds were sought to clear a previously defaulted bank loan. Sri Lakshmi Hotel defaulted again and paid only ₹44,66,250/-. Sriram City Union Finance initiated arbitration proceedings and were awarded the claim amount of ₹2,21,08,244/- with 24 percent p.a. interest until realisation. Sri Lakshmi Hotel challenged the award arguing that the interest was unconscionable. A single judge and division bench of the Madras High Court both upheld the award.

The Supreme Court upheld the award and the decisions of the High Court Benches. It held that though a 24 percent interest can be considered unfair, it reflects the lender’s risk in uncertain market conditions. The Bench noted that justifiability of the rate of interest would depend on the terms and conditions entered into by the parties.

The Supreme Court held that a petition under Section 11 of the Arbitration and Conciliation Act, 1996 is not maintainable where the parties have agreed to a foreign-seated arbitration and the supervisory jurisdiction lies with the courts of the chosen seat.

Balaji Steel Trade entered into a Collaboration and Buy Back Agreement in 2018 with Fludor Benin. Subsequently, they entered into a Buyer-Seller Agreement which superseded the initial agreement, and executed a series of Sales Contracts. When a dispute arose, Balaji Steel Trade sought appointment of an arbitrator in India based on arbitration clauses in the subsequent Agreements. The sales contracts related only to individual consignments and did not replace the earlier Buyer and Seller Agreement, which provided that the seat of arbitration was in Benin. The Delhi High Court recognised the Benin arbitration noting that the dispute arose solely under the Buyer and Seller Agreement.

The Supreme Court upheld this position. It held that the Buyer and Seller Agreement was the operative contract and that Benin was the juridical seat, with Benin law governing the arbitration. Since the Benin-seated proceedings had already concluded with a final award, Indian courts had no jurisdiction to appoint an arbitrator under Section 11. The petition was dismissed.

The Supreme Court accepted the Union government’s elevation-based definition of the Aravali Hills and Ranges. The definition will be incorporated in a Court mandated study to demarcate areas in the Aravali region for sustainable mining.

The matter was taken up suo moto after the question of classification of Aravalli hills arose in two ongoing proceedings; M.C. Mehta v Union of India and T.N. Godavarman v Union of India. The study will involve a geo-referenced ecological assessment to enable development of a Management Plan for Sustainable Mining (MPSM). The Court passed its order in view of the Saranda Wildlife Sanctuary matter in which a similar MPSM was formulated.

The Court recognised the significance of the definition as the Aravali Hills and Ranges are among the oldest geological features on Earth and serve as a critical “shield” against the spread of the Thar desert. The Union’s uniform definition excludes all hills below 100 meters from the local relief. The Court ordered that no new mining lease be granted until the MPSM is finalised. The Order does not impose a ban on ongoing legal mining activities but mandates strict adherence to the Committee’s recommendations.

The Supreme Court held that retrospective Environmental Clearance (EC) can be granted in exceptional circumstances—the Environment Protection Act (EPA) 1986 does not prohibit it.

In 2017, the Union Ministry of Environment, Forests and Climate Change notified the process for the grant of EC for projects which had not obtained prior Clearance. Similar notifications had been quashed in 2014 and 2015. In 2021, the Ministry issued an Office Memorandum (OM) formulating Standard Operating Procedure (SOP) for grant of ECs in cases of violation of environment norms. In Vanashakti v. Union of India (2025) a two-Judge Bench of the Supreme Court quashed the 2017 Notification and 2021 OM, holding that a retrospective EC was alien to environmental jurisprudence. A review petition was filed against the decision.

The Court allowed the review petition against Vanashakti, holding that it is inconsistent with prior landmark decisions of the Court. The Bench held that Vanashakti’s view that despite payment of penalty, projects that violate environment norms should be demolished, contravened Section 15 of the EPA. The Bench recalled the Vanashakti decision.

The Supreme Court held that it is its duty to adopt restorative measures that mitigate environmental degradation and prioritise mitigation of future risk to the environment.

In 2024, the Supreme Court set up an Expert Committee to carry out an in-depth inquiry into the Corbett Tiger Reserve in Uttarakhand. The committee had to determine measures for the effective management of the Corbett Reserve and other Tiger Reserves in the country.

The Supreme Court granted Uttarakhand two months to submit a plan for the restoration of the Corbett Tiger Reserve, based on the Expert Committee’s recommendations . It held that Tiger Safaris cannot be conducted in a critical tiger habitat and should be on non-forest land. All state governments were directed to prepare a Tiger Conservation plan within three months and notify eco-sensitive zones around all Tiger Reserves.

The Supreme Court held that a company purchasing goods or services to streamline its business operations for efficiency and profit does so for a commercial purpose and is therefore not a consumer under Section 2(1)(d) of the Consumer Protection Act, 1986.

Poly Medicure Ltd, which imports and exports medical devices, purchased a software licence called Brillio Opti Suite for use in its documentation process. Claiming malfunction and deficiency of service, it filed a complaint before the Delhi State Consumer Commission. The complaint was dismissed as the company was not a consumer. The National Consumer Disputes Redressal Commission confirmed this decision.

The Supreme Court upheld the dismissal. The Court clarified that the statutory explanation relating to earning a livelihood by means of self-employment applies only to natural persons and cannot be invoked by corporate entities. It observed that the software purchase was directly connected to the company’s business operations and revenue generation, and therefore attracted the exclusion for commercial purposes.

The Supreme Court mandated the state government of Jharkhand to fulfil its constitutional and statutory duty of environmental protection and declare the Saranda forest as a wildlife sanctuary. This will bring the forest—the largest sal one in Asia—under the protection of the Wildlife Protection Act, 1972, (WPA).

Bihar had declared 31,468 hectares of the forest as the “Saranda Game Sanctuary” in 1968. After bifurcation, the land fell into Jharkhand’s territory. In 2022, in a case concerning overmining in the region, the Kolkata Bench of the National Green Tribunal (NGT) directed Jharkhand to consider declaring the land a sanctuary due to its ecological importance. The state denied extensive mining, and claimed that it would notify 57,519 hectares as a sanctuary. In September 2025, the Supreme Court stated that Jharkhand had no reason to ignore the NGT’s direction. During the hearing, the state retracted the 57,519 hectares figure, stating they intended to notify only 24,941 hectares, as the remaining area comprises vital public infrastructure and homes of indigenous communities.

The Court held that Jharkhand had not provided justifiable reasons to exclude certain areas from the “conservation areas/no mining zones.” Moreover, the Court found the concern about indigenous communities unsubstantiated, as the WPA and Section 3 of the Forest Rights Act, 2006 protect the rights of forest dwellers even after an area becomes a sanctuary.

The Supreme Court held that under Section 10(2)(i) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, a tenant’s default may be presumed to be wilful if it continues even after the landlord issues the statutory two-month notice contemplated in the Explanation. Where no such notice is given, the Rent Controller must independently determine whether the default was wilful.

The lessee had leased four portions of the respondent’s property between 1999 and 2001 for a total monthly rent of Rs. 48,000, though the lessee claimed it was Rs. 33,000. In 2004, the landlord initiated fair-rent proceedings, which culminated in the Rent Controller fixing the fair rent at Rs. 2,43,600 (later modified to Rs. 2,37,500). Despite these orders, and without obtaining any stay, the lessee continued to pay only the earlier contractual rent. The eviction petition filed in 2007 was initially dismissed but was allowed in appeal, and the High Court upheld the finding of wilful default.

The Supreme Court held that since the lessee never sought a stay of the fair-rent order and cleared arrears only years later, the default could not be treated as bona fide. Payments were made belatedly and only under court direction, amounting to wilful default. The Court affirmed the eviction order and reiterated that an appeal does not operate as a stay and tenants must comply with fair-rent orders unless expressly protected.

The Supreme Court held that it may exercise its curative powers to prevent arbitrary disparity of outcomes in separate cases relying on identical evidence. It found that allowing a conviction based on evidence that was rejected as inadmissible in identical cases violates Articles 14 and 21.

Surendra Koli was convicted for killing Rimpa Haldar. This was alleged to be one of the Nithari Murders in 2006. Koli’s conviction and death sentence, handed down by a Trial Court in 2009, were affirmed by the Allahabad High Court in 2009 and ultimately by a two-judge Bench of the Supreme Court in 2011. In 2014, the Supreme Court dismissed a review petition against the decision. Koli’s death sentence was later commuted to life imprisonment in 2015. In 12 other cases connected to the Nithari murders, however, Koli was acquitted by the High Court based on the same evidence. The Supreme Court had upheld these acquittals in July 2025. Koli filed a curative petition before the Supreme Court citing this judgement.

The Supreme Court noted that Koli’s conviction in the Rimpa Haldar case was based on confession and supposed discoveries. However, 12 other cases had held the evidence to be “legally unreliable”. As the two outcomes were irreconcilable, the Court found that conviction in the Haldar case would result in a grave miscarriage of justice.

The Supreme Court held that an Executing Court cannot enforce a decree unless the decree-holder proves, through clear and convincing evidence, that the judgement debtor violated its terms.

The appeals arose from a long-standing dispute between two sections of the Kuruba community concerning rotation of idols, performance of rituals and management of their shared deity. These issues had been settled through a compromise decree in 1933. Decades later, however, the appellants alleged non-compliance and sought execution. The Executing Court allowed the petition but the High Court reversed it finding no evidence of violation, leading to the present appeal.

The Supreme Court dismissed the appeal. It held that in execution proceedings, the decree-holder bears the full burden of proving a clear breach. Execution cannot proceed on presumptions. The Court found no evidence of violation. It also found that certain preconditions for enforcement had been unmet, which had rendered execution legally unsustainable.