Constitution Bench - The Legal Chamber

Supreme Court Revives Cheque Bounce Cases, Says ‘Sick Company’ Status is Not a Get-Out-of-Jail Card

9Oct

By The Legal ChamberNo Comments

Supreme Court

Supreme Court Revives Cheque Bounce Cases, Says ‘Sick Company’ Status is Not a Get-Out-of-Jail Card

The Supreme Court held that proceedings under Section 138 of the Negotiable Instruments Act are not automatically barred against a company declared sick under SICA, even if a restraint order under Section 22A exists. The nature of the restraint and the purpose of the cheque issuance are mixed questions of law and fact to be decided during trial based on evidence. Furthermore, a Magistrate lacks the inherent power to review or recall the issuance of summons. Facts Of The Case: The appellant, Shree Nagani Silk Mills Pvt. Ltd., supplied goods to the first respondent, L.D. Industries Ltd., which was declared a sick company by the BIFR. Towards the payment for these supplies, the accused company issued several cheques in 2001, which were subsequently dishonoured due to "insufficient funds"....

Supreme Court Strikes Down Unilateral Arbitration Clauses, Upholds Neutral Appointments

19Sep

By The Legal ChamberNo Comments

Supreme Court

Supreme Court Strikes Down Unilateral Arbitration Clauses, Upholds Neutral Appointments

This Supreme Court judgment affirms that a unilateral arbitration clause granting one party the sole power to appoint an arbitrator is invalid. Following the Constitution Bench in CORE, the Court held that an ineligible person (such as a Managing Director) cannot nominate a sole arbitrator, as it raises justifiable doubts regarding impartiality under Section 12(5) of the Arbitration and Conciliation Act, 1996. Facts Of The Case: The appellant, Bhayana Builders Pvt. Ltd., filed petitions before the Delhi High Court under Section 14(2) of the Arbitration and Conciliation Act, 1996, seeking to terminate the mandate of a sole arbitrator. This arbitrator had been unilaterally appointed by the Managing Director of the respondent, Oriental Structural Engineers Pvt. Ltd., pursuant to Clause 9.03...

Supreme Court Seeks Larger Bench’s View :Can a Serving Judicial Officer Apply as a “Fresh” Judge?

14Sep

By The Legal ChamberNo Comments

Supreme Court

Supreme Court Seeks Larger Bench’s View :Can a Serving Judicial Officer Apply as a “Fresh” Judge?

The Supreme Court referred to a 5-Judge Constitution Bench the interpretation of Article 233(2) of the Constitution. It identified two substantial questions of law concerning the eligibility of judicial officers with prior bar experience for direct recruitment as District Judges, and the relevant time for determining such eligibility. Facts Of The Case: The present batch of petitions primarily sought a review of the Supreme Court's 2020 judgment in Dheeraj Mor v. Hon’ble High Court of Delhi. In that decision, a three-judge bench had upheld rules that barred members of the state judicial service from applying for the posts of District Judges reserved for direct recruitment from the bar under Article 233(2) of the Constitution. The review petitioners, along with other connected writ petiti...

Supreme Court Settles the Law: A Person Not Named in Police Report Can Still Be Summoned to Face Trial

6Sep

By The Legal ChamberNo Comments

Supreme Court

Supreme Court Settles the Law: A Person Not Named in Police Report Can Still Be Summoned to Face Trial

The Supreme Court held that under Section 193 CrPC, a Sessions Court is empowered to summon additional accused persons not named in the police report upon committal of a case, as cognizance is taken of the offence—not the offender—and such power is incidental to the court’s original jurisdiction post-committal. This does not amount to taking "fresh cognizance. Facts Of The Case: The case originated from an FIR registered at Police Station Shivali, Kanpur Dehat, concerning the murder and rape of a woman. The initial investigation named one Ajay as the suspect. However, during the probe, the petitioner's name surfaced based on witness statements and an alleged extra-judicial confession. Despite this, the Crime Branch gave the petitioner a clean chit, and a chargesheet was filed solely agai...

Supreme Court Reinstates Drug Case: Acquittal Based on “Same Informant-Investigator” Rule Overturned

26Aug

By The Legal ChamberNo Comments

Supreme Court

Supreme Court Reinstates Drug Case: Acquittal Based on “Same Informant-Investigator” Rule Overturned

The Supreme Court held that an investigation is not automatically vitiated solely because the informant and investigator are the same. This procedural irregularity must be examined on a case-specific basis for bias. The Court overruled the contrary precedent in Mohan Lal and restored the matter for a merits-based hearing. Facts Of The Case: Based on the secret information received on September 20, 2009, police intercepted a truck. The respondent, Gurnam @ Gama, was found sitting on a stack of bags in the cargo area, while the other respondent, Jaswinder Singh, was driving the vehicle. Upon search, the authorities recovered a significant quantity of 750 kilograms of poppy husk along with two motorcycles. Consequently, FIR No. 221 of 2009 was registered under the relevant sections of the N...