Search Judgments

Reserve Bank of India (RBI) Guidelines on Wilful Defaulters – This case involves a writ petition filed by the petitioners challenging an order declaring them wilful defaulters. The petitioners, related to M/s. Cethar Limited, were served a show-cause notice regarding their wilful defaulter status due to alleged financial irregularities. They submitted an explanation, but were subsequently declared wilful defaulters.

Arbitration and Conciliation Act, 1996 – Section 11 – This case revolves around an insurance policy dispute between an Insurer (Petitioner) and an Insurance Company (Respondent) following a fire incident at the Petitioner’s plant in 2020. The Petitioner sought arbitration, as per the policy terms, to resolve disputes over material damage and business interruption claims. The Respondent admitted part of the material damage claim but repudiated the business interruption claim, arguing it was not subject to arbitration due to a clause stating that arbitration isn’t applicable if liability isn’t accepted.

The Petitioner contended that the business interruption claim was directly linked to the material damage, making it arbitrable.

Criminal Procedure Code, 1973 (Cr.PC) – Section 227 – Discharge of Accused – Scope of Judicial Review at Charge Framing Stage – Mini Trial – Conspiracy The Supreme Court re-emphasizes that at the stage of framing charges, a “mini-trial” is not contemplated, and suspicion (even strong suspicion) is generally sufficient for framing a charge. However, in cases of alleged conspiracy, mere suspicion without concrete material linking an accused to the alleged criminal acts, especially concerning high-ranking officials whose role is supervisory, may warrant discharge.

Prevention of Corruption Act, 1988 (PC Act) – Section 13(2) read with 13(1)(d) – Criminal Misconduct by Public Servant – Abuse of Official Position The Court examines allegations of criminal misconduct against a public servant (Chairman and MD of a bank) in sanctioning credit facilities. It clarifies that while abuse of official position without direct pecuniary gain can constitute an offense, the prosecution must still demonstrate complicity through concrete evidence, beyond mere procedural swiftness, for a charge to be framed.

(Interim Measures and Stay of Arbitral Award Enforcement)

The Arbitration and Conciliation Act, 1996Sections 9 and 36 - concerning interim measures to secure an arbitral award and the conditions for staying its enforcement. An Appellant (a Chinese entity) challenged an arbitral award of approximately Rs. 142 Crores under Section 34 and sought a stay under Section 36(2).

The Respondent (an Indian company) subsequently filed a Section 9 application for security.

Recovery of Debts and Bankruptcy Act, 1993 (RDB Act) – Section 19(8) – Jurisdiction of Debt Recovery Tribunal (DRT) to adjudicate counterclaims for damages.

The central issue revolves around whether DRT has the jurisdiction to entertain counterclaims for damages, especially those founded on tort, under Section 19(8) of the RDB Act. INMA International Limited faced financial difficulties after a contractor delayed payments, leading to loan defaults and classification as a Non-Performing Asset (NPA) by Indian Overseas Bank (IOB). IOB initiated recovery proceedings before the DRT, and INMA filed a counterclaim seeking damages for the bank’s alleged erroneous reporting to CIBIL, impacting their credit rating and business prospects. The DRT partially allowed the counterclaim by waiving interest, a decision modified by the Debt Recovery Appellate Tribunal (DRAT).

(Real Estate (Regulation and Development) Act, 2016 - Scope of Authority and 'Ongoing Project' Determination)

This judgment primarily addresses the scope and powers of authorities under the Real Estate (Regulation and Development) Act, 2016 (RERA Act), specifically Sections 3, 2(zk), 35, 36, 37, 38(2), 53(1), 88, 89, and relevant Tamil Nadu Real Estate (Regulation and Development) Rules, 2017 (Rule 2(h)(i), 2(h)(ii), 2(h)(iii)). It also touches upon the Code of Civil Procedure (Order XLI Rule 27) and the Insolvency and Bankruptcy Code. The case originated from a homebuyer's (PIP) complaint against M/s IVR Hotels and Resorts Limited (IVR) for sub-standard construction and incomplete amenities. Initially, the Tamil Nadu Real Estate Regulatory Authority (TNRERA) dismissed the complaint, deeming the project completed before RERA.

This judgment addresses a batch of writ petitions filed under Article 32 of the Constitution of India, concerning the demolition of residential and commercial properties of individuals accused of criminal offenses. The Supreme Court examined whether the executive branch can demolish properties of accused individuals without due process, considering principles such as the rule of law, separation of powers, public trust, and constitutional rights. The court emphasized that the rule of law is foundational to democratic governance, ensuring fairness, preventing abuse of power, and protecting human rights.

The judgment highlights that everyone is equal before the law, and no one should be punished without a fair trial.

Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) – Section 18 –  The Supreme Court addressed whether the Limitation Act, 1963, applies to conciliation and arbitration under Section 18 of the MSMED Act. The appeals challenged a High Court decision that barred time-barred claims in conciliation and applied the Limitation Act to arbitration under the MSMED Act.

The Court distinguished conciliation from arbitration, noting that conciliation is non-adjudicatory and settlement-based, not bound by the Limitation Act. It highlighted that a time-barred debt can still be subject to a settlement agreement under Section 25(3) of the Contract Act.

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) – Sections 13(2), 13(4), 14, 17, 34 – Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) – UDHAYAM scheme – This Civil Revision Petition challenged the Principal District Munsif’s inaction on an interim injunction application (I.A.No.2 of 2025) in O.S.No.118 of 2025. The petitioners, borrowers under the MSMED Act, sought to restrain the respondents (bank) from selling properties. They argued the civil court had jurisdiction, their MSME status provided protection, and the bank failed to form a rehabilitation committee as mandated.

The respondents contended the civil suit was barred by Section 34 of the SARFAESI Act, which ousts civil court jurisdiction over matters determinable by the Debts Recovery Tribunal (DRT).

• SARFAESI Act, 2002 – Section 34 – Bar to Civil Court Jurisdiction: A civil suit challenging a sale deed executed by a mortgagor during ongoing SARFAESI proceedings and seeking declarations of invalidity for subsequent transactions falls outside the bar under Section 34 of the SARFAESI Act, as the issues cannot be adjudicated by the Debts Recovery Tribunal.
• SARFAESI Act, 2002 – Section 13(8) – Right of Redemption & Sale Confirmation: Once an auction sale under the SARFAESI Act is confirmed and a sale certificate issued, the right to redemption is extinguished. Subsequent payments or offers for settlement by the mortgagor or third parties do not invalidate a completed sale, especially when challenges to the SARFAESI proceedings have failed up to the Supreme Court.
• SARFAESI Act, 2002 – Effect of Sale Certificate – Transfer of Title: The issuance of a sale certificate after auction confirmation vests the property rights in the auction purchaser, irrespective of actual physical possession being handed over. Subsequent transactions by the mortgagor or their transferees concerning the secured asset are void if initiated after SARFAESI proceedings commenced and symbolic possession was taken.
• Property Law – Lis Pendens & Void Transactions: Any sale deed, power of attorney, or subsequent transaction concerning a property subject to ongoing SARFAESI proceedings (after symbolic possession) is void as against the secured creditor’s rights and the subsequent auction purchaser’s title.

Final Decision:   The High Court dismissed both appeals, upholding the Single Judge’s judgment and decree. It confirmed that the civil court had jurisdiction, the mortgage was not discharged by the third defendant’s payment, and the auction sale in favor of the plaintiff was valid, regardless of the interest arrangements on the 25% bid amount.