Indian Judgements

Indian Judgements

Forfeiture of Earnest Money Deposit Validated: SC Dismisses Bidder’s Plea in IBC Liquidation Auction

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In this judgment delivered by Justice K. Vinod Chandran, the Supreme Court of India upheld the National Company Law Appellate Tribunal’s (NCLAT) decision, which had affirmed the forfeiture of the Earnest Money Deposit (EMD) and additional deposits made by a successful auction bidder under the Insolvency and Bankruptcy Code, 2016 (IBC). The appellant had failed to deposit the balance sale consideration within the stipulated 90-day period. The Supreme Court ruled that explicit terms in the e-auction notice mandating forfeiture upon default override general regulations, and dismissed the appellant’s attempt to use pending title deed disputes and an alleged “Triple Test” as excuses for its wilful default.

  • Nature of Dispute: The appellant emerged as the successful bidder for Lot No.5 (land in Sonepat, Haryana) in an e-auction conducted during the liquidation process of the corporate debtor, with a reserve price of ₹56 crores.
  • Default in Payment: While the appellant deposited 10% EMD and a portion of the balance consideration (totaling ₹39 crores) without demur, it failed to remit the remaining balance within the initial 30 days or within the extended 90-day window (expiring February 14, 2022) with 12% interest.
  • Bona Fide Excuse Rejected: The appellant claimed it withheld payment due to a pending writ petition and litigation initiated by a third party (M/s Agarwal Trading Company) concerning title deeds. The Court rejected this, noting that the auction notice explicitly stated the sale was on an “as is where is” basis and highlighted the pending civil disputes with open eyes.
  • Inapplicability of Triple Test: The Supreme Court agreed with the NCLAT’s reversal of the NCLT order, holding that the “Triple Test” (assessing hidden agenda, financial capacity, or external prevention) did not absolve the appellant of its default, as the appellant failed to substantiate true financial capability to pay on time.
  • Validity of Forfeiture Clause: Addressing the argument that the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 do not explicitly provide for forfeiture, the Court held that the explicit terms of the e-auction notice—which clearly threatened forfeiture of the EMD and any other deposits upon failure to pay the balance—are binding on a bidder who participated voluntarily.
  • Final Ruling: The Supreme Court dismissed the civil appeal, confirming that forfeiture is a necessary legal consequence of the appellant’s wilful default and upholding the NCLAT’s judgment.

2026 INSC 1062

M/s ASJ Finsolutions Pvt. Ltd. v. Vikram Bajaj (D.O.J. 28.09.2026)

2026 INSC 1062 click here to view full text of judgment

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Resolving Decades of Deferred Dues: Supreme Court Directs Payment of Interest and Compensation for Defunct Corporation Employees

September 29, 2026 No Comments

In this judgment authored by Justice Sandeep Mehta, the Supreme Court of India addressed residual issues arising from the long-standing statutory reorganisation of the erstwhile State of Bihar and the subsequent closure of five State-owned inter-State corporations. Building upon an earlier final report and order, the bench adjudicated three unresolved matters: the verification of remaining untraced workers, the entitlements of daily-wage employees, and the computation of interest on delayed salaries and provident fund dues. The Court concluded a multi-decade saga by setting a 12-month window for unverified claimants, awarding a one-time lump-sum compensation of ₹1,00,000 to daily-wage workers, and mandating statutory interest of 12% per annum on delayed Employees’ Provident Fund (EPF) dues and 6% per annum on delayed salary arrears from the respective States of Bihar and Jharkhand.

  • Background and Context: The litigation stems from the Bihar Reorganisation Act, 2000, and involves unpaid service dues, salary arrears, and provident fund contributions for employees of five defunct State-owned inter-State corporations (including BSCCL, BSIDC, BSEDC, BSFDC, and BPRFC).
  • Identification of Remaining Employees: While out of 2,274 verified workers, approximately 2,074 have been traced and paid principal dues, around 200 cases remained pending due to missing documentation or untraceable claimants. The Court closed the general verification exercise but granted a final 12-month window for untraced employees or their legal heirs to approach designated Nodal Officers.
  • Transparency and Publication Mandate: The States of Bihar and Jharkhand were directed to compile and publish updated particulars online within four weeks regarding paid, pending, and unverified claims to ensure transparency.
  • Relief for Daily-Wage Workers: Dismissing the rigid application of a static daily wage of ₹50 across decades, the Court directed the respondent States to pay a one-time sum of ₹1,00,000 to each eligible daily-wage worker engaged during the relevant period to balance equities.
  • Interest on EPF Dues: Invoking Section 7-Q of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, the Court mandated the payment of simple interest at the statutory rate of 12% per annum on delayed EPF contributions from the date they became due until actual payment.
  • Interest on Salary Arrears: Acknowledging the profound financial prejudice caused by decades of withholding wages, the Court awarded simple interest at 6% per annum on delayed salary and non-EPF monetary entitlements, to be disbursed within three months.
  • Apportionment of Liability: The financial liabilities between the States of Bihar and Jharkhand are to be governed and calculated in accordance with the inter-se mechanism previously approved by the Court on May 29, 2026.

2026 INSC 1061

Bihar State Ardh Sarkari Arajpati Karamchari Maha Sangh and Others v. State of Bihar and Others (D.O.J. 28.09.2026)

2026 INSC 1061 click hereb to view full text of judgment

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Supreme Court Dissolves Matrimonial Discord via Mutual Consent and Quashes Multi-City Litigations

September 29, 2026 No Comments

In this judgment delivered by Justice B.V. Nagarathna, the Supreme Court of India exercised its extraordinary powers under Article 142 of the Constitution of India to dissolve a marriage by mutual consent. Faced with a complete breakdown of marital ties and a web of 18 multi-city civil and criminal litigations spanning several years between the couple and their families, the Court stepped in to achieve complete justice. Noting that the parties willingly agreed to part ways and that the husband had paid a mutually agreed enhanced permanent alimony of ₹35,00,000, the bench dissolved the marriage, quashed all pending inter se proceedings, and barred the parties from initiating any fresh cases against each other.

  • Background and Petitions: The wife filed transfer petitions seeking to transfer criminal proceedings and a Domestic Violence case from Cuttack, Odisha, to Mumbai, Maharashtra.
  • Invocation of Article 142: During the pendency of the petitions, the husband filed an application under Article 142 of the Constitution of India seeking a decree of divorce and the quashing of all pending litigations.
  • Consent to Divorce & Alimony: With the effective assistance of counsel and the Supreme Court Mediation Centre, the wife expressed her willingness to accept a decree of divorce by mutual consent, provided adequate permanent alimony was granted to support her medical needs.
  • Financial Settlement: The Supreme Court enhanced the permanent alimony to ₹35,00,000, which was fully paid by the husband via an immediate part-payment and two demand drafts handed over during the hearings.
  • Legal Precedents Followed: The Court relied on established precedents including Shilpa Sailesh v. Varun Sreenivasan and Rinku Baheti v. Sandesh Sharda, affirming that the Supreme Court can grant a divorce on the ground of irretrievable breakdown to achieve complete justice without relegating parties to trial courts.
  • Comprehensive Quashing: A comprehensive table containing 18 distinct criminal cases, domestic violence applications, writ petitions, and family court matters filed by both sides was reviewed, and all such pending or connected proceedings were ordered to be quashed.
  • Final Directions: The transfer petitions were disposed of, the marriage solemnized on December 4, 2016, was dissolved, the Registry was directed to draw up a formal decree, and the parties were strictly prohibited from filing any fresh cases against each other.

2026 INSC 1060

Shikha w/o Varun Surekha @ Shikha d/o Sharadkumar Raniwala v. State of Odisha & Others (With Transfer Petition (D.O.J. 28.09.2026)

2026 INSC 1060 click here to view full text of judgment

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Consensual Appointment of Sole Arbitrator and Modification of Interim Injunctions

September 26, 2026 No Comments

This civil appeal arose from an interim order passed by the Division Bench of the Karnataka High Court, which had stayed a Commercial Court’s Section 9 injunction order restraining the respondent from manufacturing and marketing certain electric vehicles in an ongoing commercial dispute. During the proceedings before the Supreme Court, both parties concurred in requesting the appointment of a sole arbitrator to resolve all disputes arising from their three core agreements executed on August 26, 2025. The Supreme Court appointed Justice R.V. Raveendran (former Judge of the Supreme Court) as the sole Arbitrator and granted liberty to the parties to file an interim relief application under Section 17 of the Arbitration and Conciliation Act, 1996. Consequently, the Supreme Court set aside the High Court and Commercial Court orders, substituting a targeted interim restriction against the launch or manufacture of specific agreement-defined vehicles to operate strictly until the arbitral tribunal decides the Section 17 application.

  • Consensual Appointment of Sole Arbitrator: Upon joint request of the parties, the Supreme Court superseded the multi-member tribunal originally contemplated and appointed Justice R.V. Raveendran as the sole Arbitrator to adjudicate all disputes arising out of the manufacturing, distribution, and IP agreements.
  • Transition to Section 17 Applications: Once an arbitral tribunal is constituted, parties are expected to seek interim protections directly before the arbitrator under Section 17 of the Arbitration and Conciliation Act, 1996, rather than prolonging appellate litigation over Section 9 orders.
  • Modification of Interim Restraints: The Supreme Court modified the High Court’s interim order, specifically directing that the respondent shall not launch or manufacture the vehicles described in Annexures A and B of the August 26, 2025 agreement read with Clause 1.1 specifications.
  • Uninfluenced Adjudication: The interim arrangement ordered by the Supreme Court is strictly temporary, and the learned Arbitrator is directed to examine the Section 17 application entirely uninfluenced by any observations made in the prior Commercial Court or High Court orders.

2026 INSC 1057

Kinetic Green Energy and Power Solutions Limited v. Saera Electric Auto Limited (D.O.J. 24.09.2026)

2026 INSC 1057 click here to view full text of judgment

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Beyond the Ticketless Travel Myth: Restoring Railway Compensation for Untoward Incidents

September 26, 2026 No Comments

This civil appeal arose from a judgment of the Gujarat High Court, which had set aside a Railway Claims Tribunal award granting compensation to the parents of a young man who tragically died after falling from a crowded train. The High Court had rejected the claim primarily because the travel ticket was lost and specific train details were missing. The Supreme Court allowed the appeal and restored the Tribunal’s award of 8 lakhs along with interest. The Court reaffirmed that under Section 124-A of the Railways Act, 1989, the initial burden discharged by the claimants through a sworn affidavit regarding a lost ticket shifts the onus onto the Railways. Because the railway officials failed to search the victim’s pockets and delayed mandatory investigations by seven months, the absence of a physical ticket cannot defeat a bona fide claim for strict liability compensation.

  • Initial Burden and Shift of Onus: Mere absence of a ticket with an injured or deceased victim does not negate their status as a bona fide passenger; filing an affidavit on relevant facts discharges the initial burden, shifting the onus onto the Railways.
  • Principle of Strict Liability: Compensation under Section 124-A of the Railways Act, 1989 operates on the principle of strict liability, where accidental falls from crowded trains qualify as untoward incidents irrespective of fault.
  • Consequences of Hospitalization and Lost Belongings: When a victim suffers grievous injuries and remains hospitalized for over a month before succumbing, the loss of personal belongings like travel tickets and cash is natural and cannot be held against the claimants.
  • Laches in Statutory Investigations: Delayed preparation of investigation reports under Rule 6 of the Railway Passengers (Manner of Investigation of Untoward Incidents) Rules, 2003 cannot be leveraged by the Railways to prejudice genuine claimants.
  • Failure of Official Duties: Where railway witnesses admit they did not search the victim’s pockets for a ticket at the scene, the Railways fail to rebut the presumption of bona fide travel.

2026 INSC 1056

Sukhabhai Nanjibhai Makwana and Another v. Union of India (D.O.J. 25.09.2026)

2026 INSC 1056 click here to view full text of judgment

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