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Supreme Court Summary 9th September

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Market Manipulation: Supreme Court Clarifies Escrow Release Does Not Bar Fraud Probes, Remands Vedanta Buyback Case

This statutory appeal by the Securities and Exchange Board of India (SEBI) challenged an order of the Securities Appellate Tribunal (SAT) which had set aside penalties imposed on Vedanta Limited and its directors for allegedly making a misleading share buyback announcement. The Supreme Court held that releasing an escrow account under Regulation 15B(8) of the Buyback Regulations does not automatically grant immunity or act as a statutory bar against independent investigations and proceedings for fraud under the PFUTP Regulations. However, because both the Adjudicating Officer and SAT failed to properly scrutinize crucial discrepancies in historical trading data and internal investigative reports, the Supreme Court partly allowed the appeal and remanded the matter back to SAT for a fresh adjudication strictly on the question of fraud.

2026 INSC 978 : Securities and Exchange Board of India v. Vedanta Limited & Ors. (D.O.J. 09.09.2026)

Retiring Partners in Dissolved Firms Entitled to Current Market Value of Property, Not 1983 Rates

This civil appeal arose from a long-standing property and accounts dispute stemming from the dissolution of a partnership at will, M/s Viraj Constructions, originally formed in 1964. After the original plaintiff (Kasireddy Lakshmi Narayana Reddy) issued a notice of dissolution on October 18, 1983, protracted litigation ensued regarding whether his 25 percent share in a valuable land asset located in Begumpet, Hyderabad, should be valued based on its worth as of the 1983 dissolution date or at its current market value. The Supreme Court held that while profits and losses must be calculated up to the date of dissolution (October 18, 1983), the valuation of immovable partnership assets for final distribution must reflect contemporary market realities rather than frozen historical rates. Consequently, the Court dismissed the appeal and upheld the High Court’s directive for the Advocate Commissioner to auction the property and distribute 25 percent of the sale proceeds to the legal representative of the original plaintiff.

2026 INSC 979 : V. Sumitra Reddy & Anr. v. K. Ranganadha Reddy & Ors. (D.O.J. 09.09.2026)

Service Law : Quashing Arbitrary Compulsory Retirement

The Supreme Court of India set aside the compulsory retirement of an Indian Trade Service officer, declaring the government’s order under Fundamental Rule 56(j) as arbitrary, perverse, and vitiated by malice in law. The Court admonished the reviewing authorities for ignoring the officer’s consistently outstanding service record and recent merit-based promotion, emphasizing that a flawless career cannot be negated by unsubstantiated allegations to unfairly label a dedicated official as dead wood.

2026 INSC 980 : S.S. Das v. Union of India (D.O.J. 09.09.2026)

Quashing of FIR : Supreme Court Quashes Criminal Proceedings Under Section 69 BNS

The Supreme Court addressed whether a broken promise of marriage can automatically constitute an offence under Section 69 of the Bharatiya Nyaya Sanhita (BNS). The appellant challenged a Gujarat High Court decision that refused to quash an FIR registered against him for sexual relations under the pretext of a marriage promise. The Court allowed the appeal and quashed the criminal proceedings, ruling that a consensual relationship where a marriage proposal later falls through due to family disapproval does not amount to a deceitful promise or a misconception of fact.

2026 INSC 987 : Kunal Rameshbhai Kalyani v. The State of Gujarat & Anr. (D.O.J. 07.09.2026)

Supreme Court Mandates Full Payment of Provident Fund and Gratuity by Resolution Applicants Amid Insolvency

This batch of civil appeals challenged orders passed at the instance of the Central Board of Trustees under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (EPF & MP Act), which mandated that the share of workmen’s dues—specifically Provident Fund (PF) and Gratuity (GF)—must be kept outside the liquidation estate and paid in full by Successful Resolution Applicants (SRAs). The Supreme Court reaffirmed that statutory first charges and worker dues override standard resolution waterfalls and non-obstante clauses under frameworks like the SARFAESI Act and the Insolvency and Bankruptcy Code (IBC). Furthermore, because of conflicting views regarding whether the imposition of penalties under Section 14B of the EPF & MP Act is strictly mandatory or leaves room for quasi-judicial discretion, the Court referred the specific question regarding Section 14B to a larger Bench.

2026 INSC 990 : M/s Kerala Industrial Infrastructure Development Corporation v. Central Board of Trustees and Anr. (D.O.J. 09.09.2026)

Supreme Court Sets Aside High Court Interference with Public Examination Answer Key

This appeal arose from a judgment passed by the Division Bench of the High Court of Allahabad in a review application, which had set aside concurrent dismissal orders and directed the appellant-Commission to award a mark to the respondent-writ petitioner and grant him appointment. The dispute centered around a multiple-choice question in a recruitment examination regarding book-author/subject matching. The Supreme Court allowed the appeal and set aside the High Court’s order, holding that constitutional courts must exercise extreme judicial restraint and should not interfere with the evaluation of answer keys by examining bodies unless a glaring, patent mistake is demonstrated without requiring any inferential reasoning.

2026 INSC 991 : Uttar Pradesh Subordinate Service Selection Commission v. Ashok Yadav & Ors.

(D.O.J. 09.09.2026)

Admissibility at the Threshold: Can an Unregistered Document Ground the Rejection of a Plaint?

In this civil appeal, the Supreme Court of India considered whether the non-admissibility or lack of registration of a document relied upon by a plaintiff can serve as a valid ground to reject a plaint under Order VII Rule 11(a) and (d) of the Code of Civil Procedure, 1908. The Court held that the issue of admissibility of a document is a matter of trial and cannot be used to non-suit a plaintiff at the threshold stage. Because an application under Order VII Rule 11 must rely solely on the averments made in the plaint and its accompanying documents—taking them at face value—a defense concerning a document’s registration or inadmissibility is premature and irrelevant for plaint rejection.

2026 INSC 1011 : Sheo Kumar Singh and Others v. M/S Sharda Educational Society and Others (D.O.J. 09.09.2026)

Principal-Employer Immunity: Controlling Authority Lacks Jurisdiction to Determine Gratuity Liability for Contractor Employees

This appeal addressed whether a principal employer (ONGC) can be held directly liable to pay gratuity under the Payment of Gratuity Act to workers deployed through a contractor, and whether the Controlling Authority possesses the jurisdiction to adjudicate such a question of liability. The Supreme Court held that the Controlling Authority’s statutory power is strictly limited to computing the amount of gratuity payable to an actual “employee,” and it has no jurisdiction to decide or fasten liability onto a principal employer where no direct employer-employee relationship exists. Consequently, the Supreme Court set aside the High Court’s order and restored the Appellate Authority’s decision in favor of ONGC, while protecting the workers from any recovery of amounts already paid.

2026 INSC 1019 : M/s Oil and Natural Gas Corporation Ltd. v. Suryakand D. Lad & Ors. (D.O.J. 09.09.2026)

 

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Supreme Court Summary 13th Oct, 2026

October 29, 2026 No Comments

                        Supreme Court Judgment Summary

                                                   13th Oct, 2026

Service Law: Absorption: Supreme Court Sets Aside High Court Mandate While Granting Ex-Gratia Relief

In this case, the Supreme Court addressed the legal validity of a High Court order directing the State to absorb a terminated lecturer from a “no grant-in-aid” educational institution and award substantial compensation. The respondent-lecturer had been terminated in 1999 following a departmental inquiry, a decision initially upheld by the University and College Tribunal but later reversed by the Bombay High Court. The Supreme Court allowed the State’s appeal, holding that the High Court committed a fundamental procedural error by issuing a mandamus fastening financial and administrative liability upon the State without the State of Maharashtra ever being formally impleaded as a party respondent. On merits, the Court reiterated that teachers from unaided institutions are excluded from the State’s surplus absorption policies, and Article 14 cannot be invoked to claim negative equality based on inadvertent benefits granted to others. However, recognizing that the lecturer had fought litigation for decades and retired during the pendency of the appeal, the Supreme Court invoked its extraordinary powers under Article 142 of the Constitution to award a consolidated ex-gratia compensation of ten lakh rupees in full and final settlement.

2026 INSC 1118: State of Maharashtra v. Sudhir S/o Motiramji Hiwarkar & Ors. (D.O.J. 13.10.2026)

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Multiple Life Sentences Cannot Run Consecutively

October 29, 2026 No Comments

In this criminal appeal arising from the conviction of the appellant for the rape and murder of a 12-year-old victim, the Supreme Court examined whether multiple life sentences imposed in a single trial can be directed to run consecutively. A Bench led by Justice K.V. Viswanathan, relying on the Constitution Bench precedent in Muthuramalingam v. State, held that since a human being has only one life, life sentences awarded for multiple offences cannot run consecutively. Instead, multiple life sentences must run concurrently by being superimposed over each other. This ensures that any remission or commutation granted by the competent authority for one sentence does not ipso facto result in the remission of the other. Consequently, the Court set aside the consecutive nature of the sentences and modified them to superimposed life sentences.

1. Factual Matrix & Background

  • Arrest & Trial: The appellant was arrested on April 30, 2010, for the rape and murder of a 12-year-old victim committed on April 29, 2010. He faced trial in Sessions Case No. 282/2010 before the Additional Sessions Judge, Thane.
  • Trial Court Conviction: On September 27, 2013, the Trial Court convicted the appellant under Section 302 IPC (imprisonment for life with a fine of ₹5,000) and under Section 376 read with Section 342 IPC (imprisonment for life with a fine of ₹5,000). Crucially, the Trial Court ordered that these substantive life sentences run consecutively (one after the other).
  • High Court Confirmation: On June 10, 2016, the Bombay High Court confirmed the conviction and the consecutive nature of the sentences.
  • Appeals Before the Supreme Court: The appellant approached the Supreme Court challenging both the High Court’s refusal to direct concurrent sentences via a writ petition and the substantive legality of imposing consecutive life sentences.

2. Key Legal Issues & Supreme Court Findings

  • legality of Consecutive Life Sentences:
    • Holding: Multiple sentences of imprisonment for life awarded in a single trial cannot be directed to run consecutively.
    • Reasoning: Relying on the Constitution Bench ruling in Muthuramalingam v. State Represented by Inspector of Police, the Court reiterated that life imprisonment means imprisonment for the remainder of the offender’s natural life. Because human beings have only one life to live, any direction requiring an offender to undergo life imprisonment “twice over” is legally impossible, anomalous, and irrational.
  • Concept of “Superimposition” of Life Sentences:
    • Holding: When multiple life sentences are awarded, they do not run consecutively; rather, they superimpose over each other.
    • Reasoning: Superimposition means that the life sentences run concurrently in practice, but with a crucial legal caveat: if the prisoner is granted the benefit of remission or commutation by a competent authority for one sentence, that benefit does not ipso facto extend to the other sentence.
  • Disposal of Connected Matters:
    • Since the main appeal challenging the sentence was entertained and heard on merits, the separate criminal appeal (arising from SLP (Crl.) No. 8535 of 2025) seeking a direction from a writ court for concurrent sentences was disposed of as having become infructuous.

3. Final Operative Directions

  1. Partial Allowance: The criminal appeal is partly allowed. The lower court directions ordering the life sentences under Section 302 and Section 376/342 IPC to run consecutively (or concurrently) are set aside.
  2. Superimposition Ordered: The dual life sentences shall superimpose over each other, ensuring that remission or commutation granted for one does not automatically apply to the other.
  3. Sentence Integrity Maintained: The conviction, fine defaults, and statutory set-off (under Section 428 CrPC for the period already undergone since April 30, 2010) remain intact.

2026 INSC 1161

Raju Shantaram Koli v. The State of Maharashtra (with Criminal Appeal No. 5073 of 2026) (D.O.J. 27.10.2026)

2026 INSC 1161 click here to view full text of judgment

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Unpaid Excise Duty on Bonded Closing Stock Cannot Be Added to Taxable Income

October 29, 2026 No Comments

The Supreme Court of India allowed the civil appeal preferred by the assessee (M/s. Lakshmi Sugar Mills Co. Ltd.), setting aside the judgment of the Delhi High Court and restoring the concurrent findings of the CIT (Appeals) and the Income Tax Appellate Tribunal (ITAT). A Division Bench comprising Hon’ble Mr. Justice S.V.N. Bhatti and Hon’ble Mr. Justice N.V. Anjaria held that unpaid excise duty on uncleared closing stock remaining inside a bonded warehouse—which was neither debited to the Profit & Loss account nor claimed as an allowable expenditure by the assessee—cannot be added back to the value of closing stock or added to taxable income under Section 43B read with Section 145A of the Income Tax Act, 1961. The Court highlighted that the High Court proceeded on an erroneous factual assumption that the goods had been removed, and emphasized that disallowing an expense which the assessee never actually claimed as a deduction is legally impermissible under the Act.

1. Factual Matrix & Background

  • Assessee & Business: The appellant manufactures crystal sugar via the vacuum pan process, producing molasses as a by-product. It follows the standard mercantile accounting system and the exclusive method under Accounting Standard (AS)-2.
  • Assessment Year 2005-06: The assessee filed its return declaring a net loss of ₹28,36,167/-. The Tax Auditor’s Report (Form 3CD, Annexure-A) noted that total excise duty leviable on closing stock was ₹2,80,56,430/-, of which ₹2,10,64,447/- was paid by the due date, leaving an unpaid balance of ₹69,91,983/-.
  • Assessee’s Stand: The assessee explained that under the Central Excise Act, 1944, liability to pay excise duty crystallizes only upon the removal/clearance of goods from factory/bonded premises. Since the sugar stock remained in bonded godowns under Government control, duty had not accrued or become payable. Furthermore, because it followed the exclusive method and did not debit the ₹69,91,983/- to its P&L account, it never claimed any deduction.
  • Assessing Officer (AO) Addition: The AO rejected the assessee’s explanation and added ₹69,91,983/- to the returned taxable income under Section 43B read with Section 145A of the Income Tax Act.
  • Appellate History:
    • CIT (Appeals): Deleted the addition, holding that since no expenditure was claimed in the P&L account and the net profit impact under Section 145A was Nil, Section 43B was inapplicable.
    • ITAT Delhi Bench: Affirmed the CIT(A) order, noting that both opening and closing stocks would have to be adjusted on the same basis, giving a Nil impact on profit, and duty arises only upon removal.
    • Delhi High Court: Reversed the CIT(A) and ITAT orders, holding that Section 145A overrides other provisions, and erroneously assumed that the goods were “admittedly removed”.

2. Key Legal Issues & Supreme Court Findings

A. Erroneous Factual Finding by the High Court
  • Finding: The High Court erred fundamentally by proceeding on the premise that the goods were “admittedly removed”.
  • Reasoning: The records, including the AO’s Remand Report and the findings of CIT(A) and ITAT, explicitly confirmed that the uncleared closing stock remained inside the assessee’s bonded warehouse. The High Court’s core premise for duty payability was contrary to the record.
B. Interplay Between Section 43B and Section 145A
  • Finding: Section 43B regulates disallowances of unpaid statutory liabilities claimed as deductions/expenses. It cannot be invoked to disallow an amount that was never claimed as an expense or debited to the P&L Account.
  • Reasoning:
    1. Under Section 43B, statutory payments are allowable as deductions in the year paid (or if paid before the tax return filing date for accrued liabilities).
    2. If an assessee routes indirect taxes through the balance sheet without charging them to the P&L Account (exclusive method under AS-2) and does not claim any deduction for unaccrued excise duty, there is no “allowance” or “deduction” to disallow.
    3. Disallowing an amount that the assessee never claimed as a deduction/allowance in its books of account is legally impermissible under the Income Tax Act, 1961.
C. Impact of Valuation on Taxable Income
  • Finding: When opening and closing stocks are valued consistently by inclusive tax adjustments under Section 145A, the net effect on the assessee’s profitability is Nil.
  • Reasoning: The Revenue failed to demonstrate how the books of account or return of income were negatively impacted or how taxable income was reduced by the entry. The Tax Auditor had duly certified a Nil impact on profitability. Relying on the Bombay High Court precedent (CIT v. Loknete Balasaheb Desai S.S.K. Ltd.), the Court affirmed that unaccrued excise duty on bonded closing stock cannot enhance taxable income.

3. Conclusion

The Supreme Court held that the AO’s addition was illegal and that the High Court erred in reversing the well-reasoned orders of the CIT(A) and ITAT. The High Court judgment was set aside, and the assessee’s Civil Appeal was allowed. All pending applications were disposed of.

2026 INSC 1162

M/s. Lakshmi Sugar Mills Co. Ltd. v. Commissioner of Income Tax, Delhi-II (D.O.J. 27.10.2026)

2026 INSC 1162 click here to view full text of judgment

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Liberty Overruled by Legal Limits: SC Affirms High Court Order Restoring Default Bail Under UAP Act

October 29, 2026 No Comments

The Supreme Court of India dismissed the appeal filed by the Union of India challenging the Madras High Court’s judgment, which had set aside the trial court’s order cancelling the default bail granted to the respondent. The Apex Court held that Section 43D(7) of the Unlawful Activities (Prevention) Act, 1967 (UAP Act), which bars bail to non-Indian citizens who enter the country unauthorizedly or illegally, requires the initial entry itself to be illegal—subsequent overstay on an expired visa does not trigger this statutory bar. Furthermore, the non-obstante clause in Section 43D(7) overrides sub-sections (5) and (6) but does not exclude statutory default bail governed by Section 43D(2) read with Section 167(2) of the Cr.P.C. Finding no strong grounds or satisfactory explanation for the prolonged delay in seeking bail cancellation, the Supreme Court upheld the High Court’s decision protecting the personal liberty of the accused.

  1. Factual Matrix & Background
  • Initial Arrest & Default Bail: The respondent was arrested on April 2, 2018, in connection with an FIR registered under IPC and UAP Act provisions relating to alleged conspiracies promoting communal disharmony. On July 5, 2018, the Sessions Court granted him statutory default bail under Section 167(2) of the Cr.P.C. because the prosecution failed to file a chargesheet within the statutory period.
  • Transfer of Investigation & Subsequent FIR: In January 2019, the investigation was handed over to the National Investigation Agency (NIA). Later, in November 2019, a separate FIR was registered against the respondent under the Foreigners Act and Passport Rules based on an alleged confession to a Village Administrative Officer claiming he was a Sri Lankan national who overstayed his visa and obtained an Indian Voter ID, Aadhaar Card, and Ration Card.
  • Chargesheet & Cancellation Proceedings: The NIA filed a chargesheet in January 2021. Subsequently, in April 2022, the Union of India moved an application under Section 439(2) Cr.P.C. seeking cancellation of the 2018 bail, alleging suppression of nationality. The trial court cancelled the bail on July 5, 2022, relying on Section 43D(7) of the UAP Act.
  • High Court Order: On appeal, the Madras High Court set aside the cancellation order, prompting the Union of India to appeal before the Supreme Court.
  1. Key Legal Issues & Supreme Court Findings
  • Interpretation of Section 43D(7) of the UAP Act (Foreign Nationals Bar):
    • Holding: Section 43D(7) does not apply where a foreign national entered India legally on a valid visa and subsequently overstayed.
    • Reasoning: The Court analyzed the three conjunctive ingredients of Section 43D(7): (1) accused of a UAP Act offence, (2) non-Indian citizen, and (3) entered the country unauthorizedly or illegally. Because the conjunction “and” mandates that the entry itself must be unauthorized or illegal at the inception, a lawful entry followed by an expired visa or illegal stay does not attract the statutory bar.
  • Default Bail (Section 43D(2) vs. Section 43D(7)):
    • Holding: The overriding non-obstante clause in Section 43D(7) is restricted to sub-sections (5) and (6) and does not override statutory default bail under Section 43D(2) (which modifies Section 167 Cr.P.C.).
    • Reasoning: Default bail is a statutory right accruing when investigation is delayed. Section 43D(7) does not whittle down or bar the grant of default bail under Section 43D(2).
  • Admissibility of Extra-Judicial Confession to a Village Administrative Officer (VAO):
    • Holding: An extra-judicial confession made to a Village Administrative Officer is not barred by Section 25 of the Evidence Act (or Section 23(1) of the Bharatiya Sakshya Adhiniyam, 2023), provided the VAO is not acting under police authority and the confession is voluntary and credible.
    • Reasoning: While differing slightly from the High Court’s strict dismissal of the confession, the Supreme Court clarified that a VAO is not a police officer under Section 25, though its ultimate probative value remains subject to trial evaluation.
  • Parameters for Cancellation of Bail & Delay:
    • Holding: Cancellation of bail requires strong, compelling grounds (such as post-bail misconduct, witness tampering, or vital suppressed facts) or a legally perverse initial grant.
    • Reasoning: The prosecution failed to explain an inordinate delay of over a year in moving for bail cancellation after filing the chargesheet in January 2021. Mere administrative verification delays regarding nationality cannot justify disrupting an individual’s liberty after years of enjoying bail without misuse.
  1. Conclusion

The Supreme Court concluded that the appeal was devoid of merit. The judgment of the Madras High Court setting aside the cancellation of bail was affirmed, and the appeal filed by the Union of India was dismissed.

2026 INSC 1160

Union of India v. Mohamed Rifas @ Mohamed Rigbas (D.O.J. 27.10.2026)

2026 INSC 1160 click here to view full text of judgment

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