Supreme Court Observer Law Reports (SCO.LR)

The Supreme Court held that the Reserve Bank of India’s (RBI) power to supersede the Board of a multi-State co-operative bank under Section 36AAA of the Banking Regulation Act, 1949 (BRA) is not subject to the six-month limit under Article 243ZL(1) and can be extended beyond the term for which the board was originally elected, subject to an aggregate limit of five years.

The appellants were elected to the Board of Directors of Abhyudaya Co-operative Bank Limited for a five-year term. The RBI subsequently superseded the board under Section 36AAA of the BRA and appointed an administrator, citing the Bank’s deteriorating financial health, the need to protect depositors and the need for expert management. The appellants challenged the supersession before the Bombay High Court, contending that the RBI’s power was subject to the six-month limit under Article 243ZL. The High Court upheld the RBI’s power under Section 36AAA and dismissed the writ petitions, holding that the provision continued to apply to multi-State co-operative banks. Aggrieved, the appellants approached the Supreme Court.

The Supreme Court dismissed the appeals and held that the third proviso to Article 243ZL(1), which states that the provisions of the BRA “shall also apply” to a co-operative society carrying on the business of banking, makes the BRA applicable to multi-State co-operative banks. The six-month limit under Article 243ZL(1) does not apply to the RBI’s power under Section 36AAA. The Court further held that Section 36AAA permits the period of supersession to be extended from time to time, subject to a total period of five years, and that the expiry of the original term of the board has no consequence for the exercise of that power.

The Supreme Court held that statutory regulators possess inherent, incidental and ancillary powers to enforce or secure accountability from institutions it oversees, even in the absence of express statutory provisions. A Court must review the regulator’s actions within its wider statutory mandate, rather than viewing such measures technically or pedantically.

In February 2019, the National Council for Teacher Education (NCTE) approved a Performance Appraisal Report (PAR) system and replaced the “Annual Renewal of Recognition” regime. In September 2019, the Member Secretary of the NCTE issued a Public Notice directing all Teacher Education Institutes (TEIs) to submit their PAR with a fee, warning that non-compliance would attract action under Section 17 of the NCTE Act, 1993. An association of NCTE-approved colleges challenged the notice, arguing that the Member Secretary lacked proper delegation and authorisation from the Council to issue such a mandate. A single Judge of the Delhi High Court dismissed the challenge. A Division Bench quashed the notice, holding that the proforma had not been approved or delegated by the Council. The NCTE approached the Supreme Court.

The Supreme Court allowed the NCTE’s appeal and set aside the Division Bench’s judgement. It upheld the Public Notice, holding that the Council and its Executive Committee had ample power under Section 12(k) to call for annual PARs. The Court held that the High Court’s technical approach had impaired NCTE’s regulatory jurisdiction and its ability to enforce accountability among TEIs.

The Supreme Court held that a claim of juvenility under Section 7A of the Juvenile Justice (Care and Protection of Children) Act, 2000 can be raised before any forum and any stage of the proceedings, even after the final disposal of the case. The High Court’s inherent power Section 482 of the Code of Criminal Procedure, 1973 (CrPC) allows the High Court to recall or review decisions passed without jurisdiction or in violation of natural justice.

The Trial Court had acquitted an accused in a murder and dowry death case after prosecution witness turned hostile. The appellant was convicted for causing disappearance of evidence, sentencing him to three years of rigorous imprisonment. The High Court upheld the conviction. An appeal to the Supreme Court was dismissed as withdrawn. The appellant approached the High Court under Section 482 CrPC pleading for juvenility based on primary school records. A Juvenile Justice Board affirmed the claim. The High Court, however, dismissed his petition on the grounds that Section 482 CrPC could not be used to reopen a matter that had attained finality up to the Supreme Court.

The Supreme Court held that the matter had not reached irrevocable finality in the top court as the appeal was dismissed as withdrawn. The Court further held that the High Court erred in acting with over-cautious restraint and failing to exercise its inherent powers under Section 482 of the CrPC to recall its judgement and extend statutory juvenile protections. Consequently, the Supreme Court set aside the decisions of the trial court and High Court, quashed the conviction and sentence, and fully discharged the appellant.

The Supreme Court held that mere delay in depositing Foreign Travel Tax (FTT) to the Government does not attract a penalty for failure to pay under Section 38(3) of the Finance Act, 1979 (“Act”).

The appellant—an airline company—was issued show-cause notices seeking an explanation as to why it delayed the deposit of collected Foreign Travel Tax to the Government, as required by the Foreign Travel Tax Rules, 1979. The appellant moved the Bombay High Court challenging the imposition of penalty and the constitutional validity of Section 38(3) of the Act. The appellant argued that the delays in payment were the result of genuine administrative and security reasons, which should not be equated with absolute “failure to pay” under Section 38(3). The Bombay High Court dismissed the petition, holding that there is no distinction under the Act between “failure to pay” and “delay in payment”. Aggrieved, the appellant moved the Supreme Court

The Supreme Court set aside the High Court decision, holding that “failure to pay” under Section 38(3) implies absolute non-payment whereas belated deposits constitute delayed payment. Further, the Court held that penalty is not automatically attracted in the instance of the breach; discretion is vested on the officer of customs to adjudicate whether penalty is imposable.

The Supreme Court held that administrative authorities such as a District Magistrate (DM) do not have the power to review closure orders unless explicitly provided by a statute.

In April 2019, the Superintendent of Police, Raigarh recommended the externment of the appellant—an alleged habitual offender—directing his removal from Raigarh District for one year under Sections 5(a) and (b) of the Chhattisgarh Rajya Suraksha Adhiniyam, 1990. In October 2025, following the acquittal of the accused in several criminal cases, the DM closed pending proceedings against the appellant and let him off with a warning. Soon after the closure, fresh FIRs were registered against the appellant, including one under the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities Act), 1989. The DM recalled the closure order and passed an order of externment ex parte. The appellant moved the Chattisgarh High Court, contending that such order, being ex parte, violated the principles of natural justice. The High Court dismissed his appeal. Aggrieved, the appellant moved the Supreme Court.

The Supreme Court held that the DM exercised a jurisdiction not vested in him by law. The Court held that breach of the warning given with the closure order does not grant the DM the power to revive a closed case.

The Supreme Court held that the five-year limitation to pass an assessment order by tax authorities under Section 74 of the Central Goods and Services Tax Act, 2017 (CGST Act) can only be invoked when allegations concern fraud, wilful misrepresentation or suppression of facts. The Court held that the foundational facts supporting such an allegation must be evident from the show cause notice and cannot be established by merely reciting the statutory words.

Tata Steel challenged a show cause notice issued under Section 74 of the CGST Act for three financial years, 2018-2019 to 2020-2021, pursuant to an audit objection raised by the office of the Comptroller and Auditor General of India. Tata Steel argued that the three-year limitation under Section 73 had expired and that there was no allegation of fraud, wilful misstatement or suppression of facts to invoke the extended five-year limitation under Section 74. It further submitted that the Assessing Officer was not convinced by the audit objection and had placed the matter in the “call book” (kept in abeyance), before issuing the notice. The Department argued that the proceedings indicated suppression of material facts and wilful misrepresentation. Tata Steel approached the Supreme Court challenging the show cause notice.

The Supreme Court held that proceedings under Sections 73 and 74 can be initiated only after the Assessing Officer records satisfaction. It found that the Department’s decision to contest the audit objection before the Public Accounts Committee itself indicated that there was no such satisfaction. It noted that the show cause notice contained no foundational facts supporting the allegation of suppression and could not sustain the extended limitation under Section 74. The Court set aside the show cause notice. It granted the Department the liberty to initiate proceedings under Section 74, with foundational facts, with an order to be passed before 28 February 2027.

The Supreme Court held that the Customs Act, 1962 confers absolute and independent statutory liability upon the appointed “custodian”, in the absence of any other law pertaining to the recovery of duty leviable on pilfered goods.

In October 2000, the Commissioner of Customs (CoC) appointed the respondent as “custodian” under Section 45(1) of the Customs Act, rendering it liable to recover duty leviable on goods pilfered from its custody between 1996 and 2000. The respondents challenged the CoC’s power of appointment as it was already covered by the Major Ports Trusts Act, 1963 and thus protected by the saving clause under Section 45(1). When the CoC (Appeals) rejected its challenge against this appointment, the respondent moved the Bombay High Court in a Writ Petition. The Bombay High Court allowed the petition. Aggrieved, the Union of India moved the Supreme Court.

The Supreme Court held that the Major Port Act protects against the general destruction and deterioration of goods but does not apply to pilferage. It cannot be considered “a law in force for the time being” under Sections 45(1).

The Supreme Court held that once the wife has voluntarily relinquished all monetary claims, including maintenance, in a mutual-consent divorce, revival of such claims during subsequent proceedings cannot be permitted.

The parties obtained a mutual divorce decree after executing a settlement agreement in which the wife agreed not to make any monetary or maintenance claims. Subsequently, the wife initiated proceedings under the Protection of Women from Domestic Violence Act, 2005. The respondent sought to quash her claims as extinguished by the agreement. The wife submitted that the agreement was executed under duress and was void as it contained a waiver of statutory rights. The High Court of Kerala dismissed his appeal and he approached the Supreme Court.

The Supreme Court set aside the High Court’s decision and quashed proceedings under the DV Act. It held that proceedings must first be initiated to invalidate the settlement or set aside the divorce decree. As the daughter was not a party to the agreement, the Court clarified that she is at liberty to file fresh proceedings for monetary relief.

The Supreme Court held that an unattested copy of a Form-25 affidavit served to an election candidate for corrupt practices is not a ground to dismiss an election petition under Section 86 of the Representation of People Act, 1951, provided the original affidavit before the Court is properly attested.

The appellant approached the Supreme Court after the Gauhati High Court dismissed his election petition against the 2024 Lok Sabha Election of Kripanath Mallah. The High Court had held that the copies served to the candidate had improperly attested rubber stamps and that the Form-25 copies were unattested.

The Supreme Court set aside the High Court judgement and restored the election petition. It held that varying rubber stamps on served petition copies were sufficient and directed the High Court to examine the original court files. If the original affidavit was duly affirmed by the Commissioner of Affidavits, the High Court must hear the full petition on merits.

The Supreme Court held that liability under the polluter-pays principle requires proof of actual environmental damage and a causal link between the activity and the degradation.

Vyakti Vikas Kendra India, the Indian legal entity through which the Art of Living operates, organised the World Culture Festival from 11 to 13 March 2016 on 25 hectares of the Yamuna floodplain after obtaining permission from the Delhi Development Authority (DDA) and other authorities. Manoj Misra approached the National Green Tribunal (NGT), alleging that preparations for the event had damaged the floodplain. On 9 March 2016, the NGT permitted the event but imposed ₹5 crore as interim environmental compensation. In its final judgement of 7 December 2017, relying on expert reports, the NGT held the organiser responsible for damage and directed DDA to restore the allotted portion of the floodplain, with additional restoration costs.

The Supreme Court allowed the appeal and set aside the NGT judgement. It found that contemporaneous material showed that the site was already damaged before it was handed over to the appellant and that the evidence did not establish additional environmental damage attributable to the event. The Court also held that the NGT had wrongly treated its interim findings as conclusive and had equated restoration with the wider concept of rehabilitation. It directed DDA to refund ₹5 crore within four weeks, while leaving DDA’s responsibility for rehabilitation of the Yamuna floodplain unchanged.