Indian Judgements

Indian Judgements

Revival of Corporate Debtor and the Fresh Slate Principle:

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This petition under Section 34 of the Arbitration and Conciliation Act, 1996 was filed by M/s McNally Bharat Engineering Company Limited (petitioner/corporate debtor) to challenge an arbitral award dated May 5, 2018, which had directed the petitioner to pay Rs. 5,52,00,000/- along with post-award interest to Metso India Pvt. Ltd. (respondent). During the pendency of the challenge, the petitioner was admitted to the Corporate Insolvency Resolution Process (CIRP) by the NCLT, Kolkata, and a resolution plan submitted by BTL EPC Limited was subsequently approved. Because the respondent failed to lodge its claim before the Resolution Professional (RP), the petitioner moved an application seeking dismissal of the Section 34 petition as infructuous and requested the refund of the awarded amount deposited as a Fixed Deposit Receipt (FDR) with the Registry of the High Court pursuant to an earlier stay order.

Upon reviewing the matter, the High Court of Delhi dismissed the Section 34 petition as having been rendered infructuous and allowed the petitioner’s application for a refund. Relying on landmark precedents including Ghanashyam Mishra & Sons and Tata Steel Ltd. v. Varsha, the court reaffirmed that upon the approval of a resolution plan under Section 31 of the Insolvency and Bankruptcy Code (IBC), all unsubmitted and unquantified claims stand extinguished, and the corporate debtor starts on a “fresh slate”. The court rejected the respondent’s contention that depositing money in court amounts to direct payment to a decree-holder, clarifying instead that court-deposited funds remain assets of the corporate debtor held as security pending litigation. Consequently, the petition was dismissed, and the Registry was directed to release the deposited amount along with accrued interest to the petitioner.

  • Factual Background and Dispute Origin:
    • The petitioner (MBECL) entered into an agreement with the respondent on July 12, 2011, for the design, manufacture, supply, and supervision of two barrel type blender reclaimers for BHEL.
    • Following disputes, MBECL terminated the agreement on November 21, 2011, prompting the respondent to invoke arbitration under Section 21 of the Act.
    • The arbitral tribunal passed an award on May 5, 2018, accepting the respondent’s claim of Rs. 5,52,00,000/- with post-award interest at 12% per annum.
    • MBECL challenged the award under Section 34 (O.M.P. (COMM) 362/2018) and, pursuant to a court order dated August 23, 2018, deposited the awarded amount as an FDR with the Registrar General on September 1, 2021.
  • Insolvency Proceedings (CIRP):
    • On April 29, 2022, MBECL was admitted to CIRP by the NCLT, Kolkata.
    • The resolution plan submitted by BTL EPC Limited was approved on December 19, 2023.
    • The respondent failed to file or submit its claim before the Resolution Professional (RP) during the CIRP.
  • Petitioner’s Contentions:
    • Following the approval of the resolution plan, the respondent’s claim no longer survives and stands extinguished by operation of law under Section 31 of the IBC.
    • The Section 34 petition has been rendered infructuous, and the amount deposited in court as a security asset must be refunded to the corporate debtor.
  • Respondent’s Contentions:
    • Depositing the awarded amount in court tantamounts to payment made to the decree-holder, meaning no claim was required to be filed before the RP.
    • The deposited amount was not reflected in the information memorandum or the balance sheet as an asset, and grievances regarding the plan should be addressed under the IBC rather than Section 34.
  • Court’s Analysis and Findings:
    • Extinguishment of Claim: Under Section 3(6), 3(10), and Section 31 of the IBC, once a resolution plan is approved, all claims not part of the plan stand frozen and extinguished to ensure the corporate debtor starts on a “fresh slate” (Ghanashyam Mishra, Tata Steel v. Varsha). The respondent’s failure to lodge a claim before the RP renders the underlying arbitral claim non-existent, making the Section 34 challenge purely academic.
    • Nature of Court Deposit: Relying on the Bombay High Court rulings in Siti Networks Limited and Reliance Naval and Engineering Ltd., the court held that cash deposited in court by a corporate debtor as security to stay execution remains an asset of the corporate debtor and does not constitute unconditional payment to the decree-holder. No vested right is created for the decree-holder to receive court deposits unconditionally if insolvency intervenes.
  • Final Order:
    • The petition under Section 34 of the Act was dismissed as having been rendered infructuous.
    • The application (I.A. 30842/2024) filed by the petitioner was allowed, and the Registry was directed to release the deposited amount along with accrued interest to MBECL.

2026 DHC 6218

M/s McNally Bharat Engineering Company Limited v. Metso India Pvt. Ltd. (D.O.J. 03.08.2026)

2026 DHC 6218 click here to view full text of judgment

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Supreme Court Judgment Summary 15th Sep, 2026

September 18, 2026 No Comments

Supreme Court Judgment Summary 15th Sep, 2026

A Definitive Review on Disability Pension Rights for Ex-Servicemen

This landmark batch of appeals brought by the Union of India challenged various orders passed by the Armed Forces Tribunal (AFT) and High Courts, which had granted the disability element of service pensions to ex-servicemen. These former personnel had been assessed by Release Medical Boards (RMB) as having disabilities that were “Neither Attributable Nor Aggravated” (NANA) by military service. The Supreme Court addressed the core tension between the protective, beneficial jurisprudence established in Dharamvir Singh v. Union of India (governed by the Entitlement Rules 1982) and the restrictive framework introduced by the subsequent Entitlement Rules 2008. Crucially, the Court undertook a deep constitutional and administrative review of the legitimacy of the 2008 rules, evaluating whether they possessed binding legal force and whether they could dilute established beneficial entitlements.

2026 INSC 993 : Union of India & Ors. v. Col. NC Isaac (Retd.) and Connected Appeals (D.O.J. 15.09.2026)

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Setting Aside Ineligible Selection to Protect Merit

September 18, 2026 No Comments

The Supreme Court of India dismissed the civil appeal filed by Sunita Lahu Panchpande, upholding the Bombay High Court’s judgment that had set aside her appointment as an Anganwadi Supervisor in Nashik District. The appellant, who originally served as an Anganwadi Sevika in Jalgaon District, applied for and was appointed to the post in Nashik despite an express restriction in the advertisement and the governing Government Resolution (G.R.) dated November 17, 2001, mandating that applicants must possess ten years of work experience specifically within Nashik District. Although the Divisional Commissioner had erroneously issued a clarification stating that experience from other districts was acceptable, the Supreme Court ruled that a subordinate administrative official cannot issue clarifications contrary to statutory G.R.s and recruitment advertisements. Citing the doctrine that appointments made in disregard of advertised qualifications amount to a fraud on the public, the Supreme Court affirmed the High Court’s order directing the appointment of the eligible wait-listed candidate (the sixth respondent) in her place, while acknowledging the compassionate observation permitting the appellant’s accommodation in her home district.

  • Core Issues Addressed: The Supreme Court evaluated whether a candidate lacking the mandatory territorial work experience stipulated in a recruitment advertisement and government resolution can retain public employment based on an erroneous administrative clarification.
  • Mandatory Territorial Eligibility: A conjoint reading of the 2001 Government Resolution and the specific conditions of the advertisement clearly established that applicants must have accumulated their ten years of qualifying experience as an Anganwadi Sevika within the same district (Nashik).
  • Incompetence of Administrative Clarifications: The Divisional Commissioner lacked the legal authority to issue a clarification that ran completely contrary to the explicit text of the 2001 G.R.; any genuine doubt ought to have been referred back to the State Government.
  • Fraud on Public Aspirants: Reaffirming the principle laid down in Tripura Sundari Devi, the Court emphasized that appointing ineligible candidates in violation of advertised terms without an express relaxation clause constitutes a fraud on public candidates who possessed better qualifications but refrained from applying.
  • Final Outcome: The appeal was dismissed, the High Court’s judgment was upheld, the sixth respondent was awarded the rightful appointment with benefits to be disbursed within two months, and the appellant was granted time until September 30, 2026, to transition out of the post.

2026 INSC 1002

Sunita Lahu Panchpande v. The District Collector & Ors. (D.O.J. 16.09.2026)

2026 INSC 1002 click here to view full text of judgment

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Acquittal Under NDPS Act Due to Flawed Sampling and Unproven Contraband

September 18, 2026 No Comments

The Supreme Court of India allowed the criminal appeals filed by the appellants Abdul Rajik and Govind, setting aside the concurrent judgments of the Trial Court and the High Court of Madhya Pradesh which had convicted them under Section 8 read with Section 20 of the Narcotic Drugs and Psychotropic Substances (NDPS) Act, 1985. The appellants had been sentenced to rigorous imprisonment for 10 years and 8 years respectively, following allegations that they were caught carrying charas. The Supreme Court held that the prosecution fundamentally failed to establish an unbroken chain of custody for the seized samples, pointing out severe lapses, including the total non-compliance with Section 52-A of the NDPS Act (drawing samples without a Magistrate), missing entries in the malkhana register regarding the exit of samples, a silent carrier constable, and an unexplained five-day delay before the samples reached the Forensic Science Laboratory (FSL). Consequently, the FSL report became untrustworthy, and with no other reliable scientific proof that the recovered material was actually charas, the Court granted the appellants the benefit of the doubt and acquitted them.

  • Core Issues Addressed: The Supreme Court examined the validity of convictions under the NDPS Act concerning the integrity of link evidence, the absolute necessity of maintaining a secure chain of custody for seized contraband samples, and the legal consequences of failing to comply with Section 52-A of the NDPS Act.
  • Breach in Link Evidence and Custody: The prosecution failed to prove the safe transit of the samples from the malkhana to the FSL. Crucially, the forwarding letter from the Superintendent of Police was dated December 1, 2004, whereas the FSL recorded receipt on December 6, 2004, leaving an unexplained five-day gap with zero evidence as to whose custody the samples remained in during this period.
  • Non-Compliance with Section 52-A: The investigating officer completely omitted the mandatory statutory safeguard of drawing representative samples in the presence of an Executive or Judicial Magistrate, which severely dented the integrity of the seizure and sampling process.
  • Exclusion of the FSL Report: Due to the shattered chain of custody and procedural flaws, the FSL report (Exhibit P-46) lost its evidentiary value and had to be discarded. Furthermore, the informal spot-testing method (burning a small piece of the substance) was deemed unscientific and insufficient to prove the material was charas.
  • Final Outcome: The appeals were allowed, the judgments of conviction and sentences were set aside, and the appellants were acquitted of all charges with their bail bonds discharged.

2026 INSC 1001

Abdul Rajik v. State of M.P. (D.O.J. 16.09.2026)

2026 INSC 1001 click here to view full text of judgment

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The Finality of Tax Settlements: Barring Reassessment After ITSC Orders

September 18, 2026 No Comments

The Supreme Court of India dismissed the civil appeal filed by the Revenue (Income Tax Department), upholding the judgment of the Delhi High Court which had quashed a reassessment notice and order issued against the respondent-assessee, M/s. Omaxe Limited. The core controversy revolved around whether the Assessing Officer (AO) retained the jurisdiction to reopen a concluded assessment under Section 148 of the Income Tax Act, 1961, to disallow housing project deductions under Section 80IB(10) after the Income Tax Settlement Commission (ITSC) had already passed a final settlement order under Section 245D(4). The Supreme Court ruled that Chapter XIX-A of the Income Tax Act is a self-contained code. Once an application for settlement is admitted and a final order is issued, it attains absolute finality under Section 245-I, and the regular assessment machinery cannot be invoked to bypass this conclusiveness. The Court clarified that if the Revenue wishes to challenge a settlement order on grounds of fraud or misrepresentation, its sole exclusive remedy is to approach the ITSC directly under Section 245D(6)—not to initiate parallel reassessment proceedings.

  • Core Issue Addressed: The Supreme Court examined whether an Assessing Officer can independently issue a reassessment notice under Section 148 to disallow deductions (such as under Section 80IB(10)) that were part of the total income considerations during a concluded proceeding before the Settlement Commission.
  • Exclusive Jurisdiction of the ITSC: The Court reaffirmed that upon the admission of a settlement application, the ITSC assumes exclusive jurisdiction over the case for that assessment year, placing the regular assessment machinery under statutory abeyance pursuant to Section 245F(2).
  • Conclusiveness of Settlement Orders: Under Section 245-I, orders passed by the ITSC under Section 245D(4) are final and conclusive on the matters stated therein, barring the Revenue from splitting an assessment to re-litigate items through standard reassessment channels.
  • Exclusive Remedy for Fraud or Misrepresentation: If the Revenue discovers that a settlement order was obtained through misrepresentation or concealment, Section 245D(6) provides the exclusive statutory pathway to declare the settlement void by moving the ITSC directly, a route the Revenue unsuccessfully attempted and exhausted in this very case.
  • Final Outcome: The appeal filed by the Revenue was dismissed, confirming that the regular tax authorities cannot initiate parallel reassessments once an ITSC settlement order has attained finality.

2026 INSC 1000

Assistant Commissioner of Income Tax & Another v. M/s. Omaxe Limited (D.O.J. 16.09.2026)

2026 INSC 1000 click here to view full text of judgment

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