Supreme Court Observer Law Reports (SCO.LR)

The Supreme Court held that a judicial decision relying, even partly, on fake, non-existent or AI-hallucinated precedents must be set aside. The Court adopted a zero-tolerance standard for the bar and the bench against citing unverified material, while permitting responsible, human-controlled AI assistance.

Jammu and Kashmir Bank initiated insolvency proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016 against Essel Infraprojects over defaulted credit facilities secured by a corporate guarantee. The National Company Law Tribunal (NCLT) admitted the application, appointed an Interim Resolution Professional and declared a moratorium under Section 14. The appellant,a suspended director of the corporate debtor, appealed on the ground that a demerger and subsequent amalgamation transferred the liabilities and extinguished the guarantee. The National Company Law Appellate Tribunal (NCLAT) dismissed the appeal. Subsequently, the appellant moved the Supreme Court, where it emerged that the NCLT had relied on non-existent authorities and fabricated passages had been falsely attributed to genuine citations.

The Supreme Court set aside the NCLT and NCLAT judgements and restored the Section 7 application for fresh adjudication on merits. It directed the NCLT to dispose of the application expeditiously,and ordered the parties to maintain status quo in the interim. The Court directed the Bar Council of India to constitute a committee to formulate disciplinary guidelines for advocates submitting fake or hallucinated legal precedents.

The Supreme Court held that the Indian Banks’ Association’s (IBA) Caution List is confined to fraud and cannot be used to address cases of professional negligence by advocates, which falls within the exclusive disciplinary jurisdiction of Bar Councils under the Advocates Act, 1961.

In 2018, Canara Bank panel advocate, Ajay Vijh, was blacklisted for professional negligence, alleging that a 2015 title opinion rendered by him for a ₹2 crore loan overlooked prior sale deeds. The bank reported him to the IBA, which placed him on the Caution List under “Third Party Entities Involved in Fraud”. The Allahabad High Court dismissed Vijh’s writ petition on maintainability, holding the IBA does not constitute “State” under Article 12.

The Supreme Court held that while the writ petition is maintainable under Article 226, relevant material implying professional negligence by an advocate must be taken to the State Bar Council for necessary action. It directed the Bar Council of India to audit its disciplinary mechanism and consider establishing a National Legal Academy.

The Supreme Court held that an uncle-in-law cannot validly adopt a niece’s husband as ghardamad (son-in-law) within Oraon customary law. It ruled that custom must be clearly proved, courts cannot infer rights from silence, and the nearest male agnate succeeds to the property.

Sukhu Oraon had three sons: Dhungru, Ledura, and Bhoula. The plaintiff, Dhungru’s son also named Sukhu, claimed sole entitlement to all ancestral land. Bhoula’s daughter Budhain and husband Punai resisted the claim, asserting that childless Ledura had adopted Punai as a ghardamad, relying on a partition deed dated 27 February 1975. Trial Courts dismissed the Plaintiff’s suit citing ethnographer S.C. Roy’s account of Oraon customs. The respondents moved the Patna High Court, which upheld the Trial Court’s judgement. Aggrieved, the petition moved the Supreme Court in a civil appeal.

The Supreme Court set aside the concurrent findings, holding that Roy’s ethnographic authority confined ghardamad status to adoptions by the last male owner or his widow, meaning Ledura, lacked authority to adopt Punai. The plaintiff, as the nearest male agnate, was held entitled to inherit the property.

The Supreme Court held that Section 19(1) of the Protection of Children from Sexual Offences Act, 2012 (POCSO Act) requires any person with ’knowledge’ of an offence to report it. Such knowledge includes credible information received directly from a child victim.

The victim, an eight year old girl, allegedly told her elder sister that a senior student had sexually assaulted her at school. The sister informed the Head Girl, who informed Linda Sema, the Headmistress. Linda Sema conducted a personal physical examination of the victim, concluded there were no signs of assault, and chose not to report the matter. The petitioner, mother of the victim, learned of the incident five months later and filed an FIR. Police chargesheeted several staff for failing to report. However, the Trial Court discharged them for the lack of prima facie case being made out, which the Gauhati High Court affirmed. Aggrieved, the petitioner moved the Supreme Court.

The Supreme Court held that Linda Sema, who had received direct information from the victim, possessed ‘knowledge’ under Section 19(1) and was wrongly discharged. It restored proceedings against her under Section 21 of the POCSO Act and Section 176 of the Indian Penal Code, 1860 (IPC), but upheld the discharge of staff who had no direct information from the victim.

The Supreme Court has held that suitability for promotion must be left to the determination of domain experts and, in absence of rules, a degree of latitude must be provided to them. Domain experts retain discretion to determine whether a scientist is ‘fit for promotion’.

Paragraph 3(b) of a 2011 Circular issued by the Council of Scientific and Industrial Research (CSIR) mandated evaluating candidates based on his Annual Performance Report/Performance Mapping Scheme along with Work Report scores for the period for promotion. The Assessment Committee denied a promotion to Dr Anil Earnest, a scientist at CSIR-National Aerospace Laboratories, Bangalore, who was awarded three per cent less than the 85 per cent screening threshold. Therefore, it did not recommend him for promotion. The Central Administrative Tribunal (CAT) and the Karnataka High Court held that the committee should have adopted the process of averaging of APRs/PMS marks and marks obtained on the Work Report and considered him eligible for promotion.

The Supreme Court set aside the CAT and High Court decisions, and dismissed Earnest’s application. It found that Paragraph 3(b) did not permit averaging of marks. It ruled that Paragraph 3(b) did not permit score-averaging, and because there were no allegations of malafides or challenges to the circular’s validity, the judiciary must respect the expert committee’s autonomy to score parameters independently.

The Supreme Court held that a remission policy issued under the Governor’s power in exercise of Article 161 of the Constitution cannot be superseded by a subsequent statutory policy.

The appellant, convicted of murder in 2009, sought premature release under Haryana’s 2002 remission policy, after completing 14 years of imprisonment. His representation was rejected based on a 2008 policy, requiring 20 years of imprisonment. He approached the High Court arguing that the 2002 Policy had been brought in exercise of Article 161 of the Constitution. The High Court dismissed his writ petition, relying on State of Haryana v Raj Kumar, which held that both the 2002 Policy and the 2008 Policy were in exercise of power traceable to the provisions of the Code of Criminal Procedure (CrPC). The appellant challenged this before the Supreme Court, arguing that Raj Kumar conflicted with the earlier ruling in State of Haryana v Jagdish, which held that the Governor’s powers under Article 161 are untrammeled and unaffected by the provisions of the CrPC.

The Court held Raj Kumar per incuriam. It ruled that the constitutional origin of the 2002 policy was like its predecessor—the 1993 policy, which was brought in exercise of Article 161. It directed the Haryana government to decide the appellant’s remission application under that policy within four weeks.

The Supreme Court held that non-filing of additional chargesheet copies under Section 193(8) of the Bharatiya Nagarik Suraksha Sanhita, 2023 does not entitle an accused to default bail, since that right ceases once a compliant chargesheet is filed within the statutory period.

The appellant was arrested in a cyber-fraud investigation involving mule bank accounts used to launder proceeds of digital-arrest and phishing frauds. The Central Bureau of Investigation (CBI) filed a chargesheet within 90 days but did not supply accompanying document copies, as was required under Section 193(8) of the BNSS. He sought default bail, contending that supply of copies was mandatory. The Special Judge, CBI and the Bombay High Court of Judicature rejected the plea.

The Supreme Court upheld the rejection, holding Section 193(8) to be directory rather than mandatory. It clarified that the appellant’s separate application for regular bail remained open for consideration on its own merits.

The Supreme Court held that a candidate’s election affidavit disclosing assets must include property owned solely by the spouse.

The appellant, a Councillor candidate in Gujarat’s 2015 municipal elections, was accused of omitting her husband’s landed properties from her nomination affidavit under the Gujarat Municipalities Act, 1963. A Magistrate issued a summons under Section 125A of the Representation of the People Act, 1951 (RPA), based on a private complaint. She approached the Gujarat High Court seeking that the summons order be quashed, arguing that the disclosure rules did not cover the spouse’s own property. The High Court declined to quash the proceedings.

The Supreme Court held the disclosure obligation extended to the spouse’s separate properties. It noted that declarants were mandated “to give details of the property held by them, their spouse and their dependents, including what is held by them jointly”.

The Supreme Court laid down a standard methodology under the Motor Vehicles Act, 1988, for assessing an injured or deceased claimant’s annual income based on income tax returns. It distinguished salaried claimants from the self-employed for the purpose of computing “just and fair compensation” under Section 166 of the Act.

Manoranjan Pandey, a 39-year-old construction contractor, was granted a compensation of Rs. 2,27,00,064/- based on his income and most recent tax returns. He died after a truck struck his vehicle near Behrampur, Odisha, in May 2018. Pandey had his own construction business with an annual income of Rs. 15,00,000/-. The Orissa High Court averaged two returns and reduced the award to Rs. 1,87,75,150/- after an appeal was filed by the insurance company.

The Supreme Court held that a salaried claimant’s income should be assessed from the immediately preceding year’s return alone, while a self-employed claimant’s income should be averaged over up to three preceding years, weighed against business nature, growth pattern and any negative-income years. Applying this, it fixed the deceased’s annual income at Rs. 14,00,000/- and enhanced the compensation to Rs. 1,97,81,505/-.

The Supreme Court held that compensation granted to a disabled accident victim should be determined on the basis of functional disability and not the medically certified figure. The Court must gauge the injury’s effect on the victim’s occupation and earning capacity.

The appellant, a carpenter, had his right leg amputated above the knee after he got into an accident with a jeep in November 2004. The Claims Tribunal awarded Rs. 4,77,823/- as compensation. This was enhanced to Rs. 11,51,423/- by the Uttarakhand High Court, fixing monthly income at Rs. 5000/- and disability at 70 percent. He sought further enhancement under the Motor Vehicles Act, 1988.

The Supreme Court held that an amputee carpenter, unable to sit or stand to work, suffers 100 percent functional disability. It raised notional monthly income to Rs. 9000/- and enhanced his total compensation to Rs. 35,95,923/-. It further awarded the appellant Rs. 10,00,000 for the prosthetic leg and its lifelong replacement.