Indian Judgements

Indian Judgements

Child witness : Evidentiary value – Summarised

The case concerns the murder of Birendra Kumari,Balveer Singh’s wife, and the subsequent cremation of her body. The core of the appeal centers on the admissibility and reliability of child witness testimony, particularly that of the deceased’s seven-year-old daughter, Rani (PW6), and the application of circumstantial evidence and Section 106 of the Evidence Act in proving guilt. Supreme Court’s analysis of legal principles before ultimately restoring the Trial Court’s conviction.

(A) Penal Code, 1860, Section(s) 302, 201 and 34 – Evidence Act, 1872, Section 118 – Murder – Child witness – Appeal against acquittalAppreciation of evidence – High Court, while setting aside the conviction, found the testimony of the child witness, Rani (PW6), to be unreliable and tutored –  there is nothing on record to indicate that PW6 was a tutored witness – One finding of the Trial Court recorded in its judgment, wherein it has been noted that PW6 was cross examined at length for approximately 1.5 hours, and her demeanour throughout the same was believable, with nothing to indicate that she had been tutored or was deposing falsely – It also has taken note of the fact that in the entire cross examination no significant contradictions were found – Held that the High Court committed an egregious error in discarding the testimony of PW6.

(Para 25, 59)

(B) Penal Code, 1860, Section(s) 302, 201 and 34 – Evidence Act, 1872, Section 118, 165 – Murder – Child witness – Appeal against acquittalDelay in examination u/s 161 Cr.P.C. – Tutoring of witness – Appreciation of evidence – High Court held that the police statement of the child witness, (PW6) under Section 161 of the Cr.P.C. had been recorded after a delay of more than 18-days, due to which the possibility of tutoring could not be ruled out, more particularly because PW6 at the time of recording of her statement was residing with PW3 i.e., the Complainant who was at inimical terms with the accused – No question in this regard was put to the IO so as to give him an opportunity to explain the reason for such delay – Even if the accused had failed in putting a question in regards to delay in examination of PW6, the presiding judge was duty bound to put this question to the IO in exercise of his powers under Section 165 of the Evidence Act – Since in the present case no question whatsoever was put to the IO to explain the reason for the delay in examination of PW6, we should not willingly jump to discard the testimony of PW6 on the ground of delay alone, and ought to be circumspect while scrutinizing the effect of such delay – There is nothing on record that would lead to the inference that the delay in recording the statement of PW6 was done deliberately in order to manipulate or concoct the case against the respondent accused herein, and rather such delay appears to be inadvertent with no sinister motive or design in mind – Statement of PW6 had been recorded on the same date as the statement of PW5 – If at all the investigating agency intended to allow the doctoring of the testimony of PW6 then it would have only delayed the examination of the child witness, (PW6) and not of PW5 as-well, thus this delay in examination appears to be attributable to the routine manner in which the IO proceeded with the course of investigation and the overall investigation inertia and not to give effect to any unfair practice – Impugned judgment and order of acquittal passed by the High Court liable to be set aside, and that of trial Court restored.

(Para 38,39, 43, 44 and 91)

(C) Evidence Act, 1872, Section 118 – Evidence – Child witness – Appreciation of evidenceEvidentiary valued – On the basis of case conclusion summarised as under: –

(I) The Evidence Act does not prescribe any minimum age for a witness, and as such a child witness is a competent witness and his or her evidence and cannot be rejected outrightly.

(II) As per Section 118 of the Evidence Act, before the evidence of the child witness is recorded, a preliminary examination must be conducted by the Trial Court to ascertain if the child-witness is capable of understanding sanctity of giving evidence and the import of the questions that are being put to him.

(III) Before the evidence of the child witness is recorded, the Trial Court must record its opinion and satisfaction that the child witness understands the duty of speaking the truth and must clearly state why he is of such opinion.

(IV) The questions put to the child in the course of the preliminary examination and the demeanour of the child and their ability to respond to questions coherently and rationally must be recorded by the Trial Court. The correctness of the opinion formed by the Trial Court as to why it is satisfied that the child witness was capable of giving evidence may be gone into by the appellate court by either scrutinizing the preliminary examination conducted by the Trial Court, or from the testimony of the child witness or the demeanour of the child during the deposition and cross-examination as recorded by the Trial Court.

(V) The testimony of a child witness who is found to be competent to depose i.e., capable of understanding the questions put to it and able to give coherent and rational answers would be admissible in evidence.

(VI) The Trial Court must also record the demeanour of the child witness during the course of its deposition and cross-examination and whether the evidence of such child witness is his voluntary expression and not borne out of the influence of others.

(VII) There is no requirement or condition that the evidence of a child witness must be corroborated before it can be considered. A child witness who exhibits the demeanour of any other competent witness and whose evidence inspires confidence can be relied upon without any need for corroboration and can form the sole basis for conviction. If the evidence of the child explains the relevant events of the crime without improvements or embellishments, the same does not require any corroboration whatsoever.

(VIII)Corroboration of the evidence of the child witness may be insisted upon by the courts as measure of caution and prudence where the evidence of the child is found to be either tutored or riddled with material discrepancies or contradictions. There is no hard and fast rule when such corroboration would be desirous or required, and would depend upon the peculiar facts and circumstances of each case.

(IX) Child witnesses are considered as dangerous witnesses as they are pliable and liable to be influenced easily, shaped and moulded and as such the courts must rule out the possibility of tutoring. If the courts after a careful scrutiny, find that there is neither any tutoring nor any attempt to use the child witness for ulterior purposes by the prosecution, then the courts must rely on the confidence-inspiring testimony of such a witness in determining the guilt or innocence of the accused. In the absence of any allegations by the accused in this regard, an inference as to whether the child has been tutored or not, can be drawn from the contents of his deposition.

(X) The evidence of a child witness is considered tutored if their testimony is shaped or influenced at the instance of someone else or is otherwise fabricated. Where there has been any tutoring of a witness, the same may possibly produce two broad effects in their testimony; (i) improvisation or (ii) fabrication.

(i) Improvisation in testimony whereby facts have been altered or new details are added inconsistent with the version of events not previously stated must be eradicated by first confronting the witness with that part of its previous statement that omits or contradicts the improvisation by bringing it to its notice and giving the witness an opportunity to either admit or deny the omission or contradiction. If such omission or contradiction is admitted there is no further need to prove the contradiction. If the witness denies the omission or contradiction the same has to be proved in the deposition of the investigating officer by proving that part of police statement of the witness in question. Only thereafter, may the improvisation be discarded from evidence or such omission or contradiction be relied upon as evidence in terms of Section 11 of Evidence Act.

(ii) Whereas the evidence of a child witness which is alleged to be doctored or tutored in toto, then such evidence may be discarded as unreliable only if the presence of the following two factors have to be established being as under: –

▪ Opportunity of Tutoring of the Child Witness in question whereby certain foundational facts suggesting or demonstrating the probability that a part of the testimony of the witness might have been tutored have to be established.

This may be done either by showing that there was a delay in recording the statement of such witness or that the presence of such witness was doubtful, or by imputing any motive on the part of such witness to depose falsely, or the susceptibility of such witness in falling prey to tutoring. However, a mere bald assertion that there is a possibility of the witness in question being tutored is not sufficient.

▪ Reasonable likelihood of tutoring wherein the foundational facts suggesting a possibility of tutoring as established have to be further proven or cogently substantiated. This may be done by leading evidence to prove a strong and palpable motive to depose falsely, or by establishing that the delay in recording the statement is not only unexplained but indicative and suggestive of some unfair practice or by proving that the witness fell prey to tutoring and was influenced by someone else either by cross-examining such witness at length that leads to either material discrepancies or contradictions, or exposes a doubtful demeanour of such witness rife with sterile repetition and confidence lacking testimony, or through such degree of incompatibility of the version of the witness with the other material on record and attending circumstances that negates their presence as unnatural.

(XI) Merely because a child witness is found to be repeating certain parts of what somebody asked her to say is no reason to discard her testimony as tutored, if it is found that what is in substance being deposed by the child witness is something that he or she had actually witnessed. A child witness who has withstood his or her cross-examination at length and able to describe the scenario implicating the accused in detail as the author of crime, then minor discrepancies or parts of coached deposition that have crept in will not by itself affect the credibility of such child witness.

(XII) Part of the statement of a child witness, even if tutored, can be relied upon, if the tutored part can be separated from the untutored part, in case such remaining untutored or untainted part inspires confidence.

The untutored part of the evidence of the child witness can be believed and taken into consideration or the purpose of corroboration as in the case of a hostile witness.

(Para 58)

(D) Circumstantial evidence – Appreciation of evidence – Held that although there can be no straight jacket formula for appreciation of circumstantial evidence, yet to convict an accused on the basis of circumstantial evidence, the Court must follow certain tests which are broadly as follows: –

(i) Circumstances from which an inference of guilt is sought to be drawn must be cogently and firmly established;

(ii) Those circumstances must be of a definite tendency unerringly pointing towards guilt of the accused and must be conclusive in nature;

(iii) The circumstances, if taken cumulatively, should form a chain so complete that there is no escape from the conclusion that within all human probability the crime was committed by the accused and none else; and

(iv) The circumstantial evidence in order to sustain conviction must be complete and incapable of explanation of any other hypothesis than that of the guilt of the accused but should be inconsistent with his innocence. In other words, the circumstances should exclude every possible hypothesis except the one to be proved.

(Para 61)

(E) Penal Code, 1860, Section(s) 302, 201 and 34 – Evidence Act, 1872, Section 106 – Murder – Circumstantial evidence – Appeal against acquittalAppreciation of evidence – following circumstances emerging from evidence on record: –

a. The failure on the part of the respondent accused in not explaining in any manner as to what had actually happened to his wife i.e., the deceased or how she died on the fateful night of the incident, more particularly when he did not dispute that he was in the company of his wife at the relevant point of time. Though the respondent accused in his statement under Section 313 of the Cr.P.C. admitted that at the time of the incident everyone was sleeping in the house, yet, surprisingly, he maintained a complete silence in regards to the cause of death of the deceased.

  1. The unnatural conduct of the respondent accused in not informing the family members either about the death of their daughter or the cremation of her body, despite the fact that her family members were residing in the very same village.The fact that the respondent-accused after clandestinely cremating the deceased’s body fled away and could not be found either at the house or in the field where the body had been burnt as stated by PW3 and PW6, respectively, again raises suspicion about the cause of death of the deceased.
  1. The suspicious circumstances under which the deceased died coupled with the fact that the accused had a fight with the deceased two to three days before the incident; their strained relationship and the accused frequently treating the deceased cruelly, as deposed by PW3, PW4, PW5, and PW6, respectively, further raise concerns and points towards the involvement of the respondent accused in the alleged crime. This is corroborated by the certified copies of the maintenance case and the complaint lodged by the deceased, which were exhibited and read into evidence.
  1. It is also not the case of the respondent accused that the deceased was suffering from any ailment nor is there any evidence worth the name to suggest the possibility of her death occurring due to any health issue. Thus, in this regard, it was all the more important for the respondent accused to explain in what circumstances and in what manner his wife suddenly died on the fateful night of the incident. (Para 65)

(F) Evidence Act, 1872, Section 106 – Evidence – Burden of proving fact especially within knowledge –  Held that Section 106 of the Evidence Act  provides that when any fact is especially within the knowledge of any person, the burden of proving that fact is upon him – The word “especially” means facts that are pre-eminently or exceptionally within the knowledge of the accused – The ordinary rule that applies to the criminal trials that the onus lies on the prosecution to prove the guilt of the accused is not in any way modified by the rule of facts embodied in Section 106 of the Evidence Act – Section 106 of the Evidence Act is an exception to Section 101 of the Evidence Act.

(Para 68)

(G) Evidence Act, 1872, Section 106 – Evidence – Burden of proving fact especially within knowledge – Held that the court should apply Section 106 of the Evidence Act in criminal cases with care and caution – It cannot be said that it has no application to criminal cases. The ordinary rule which applies to criminal trials in this country that the onus lies on the prosecution to prove the guilt of the accused is not in any way modified by the provisions contained in Section 106 of the Evidence Act – Section 106 cannot be invoked to make up the inability of the prosecution to produce evidence of circumstances pointing to the guilt of the accused – This section cannot be used to support a conviction unless the prosecution has discharged the onus by proving all the elements necessary to establish the offence – It does not absolve the prosecution from the duty of proving that a crime was committed even though it is a matter specifically within the knowledge of the accused and it does not throw the burden on the accused to show that no crime was committed – To infer the guilt of the accused from absence of reasonable explanation in a case where the other circumstances are not by themselves enough to call for his explanation is to relieve the prosecution of its legitimate burden- So, until a prima facie case is established by such evidence, the onus does not shift to the accused – Section 106 obviously refers to cases where the guilt of the accused is established on the evidence produced by the prosecution unless the accused is able to prove some other facts especially within his knowledge which would render the evidence of the prosecution nugatory – If in such a situation, the accused offers an explanation which may be reasonably true in the proved circumstances, the accused gets the benefit of reasonable doubt though he may not be able to prove beyond reasonable doubt the truth of the explanation – But if the accused in such a case does not give any explanation at all or gives a false or unacceptable explanation, this by itself is a circumstance which may well turn the scale against him.

(Para 75 to 77)

(H) Evidence Act, 1872, Section 106 – Penal Code, 1860, Section(s) 302, 201 and 34 – Murder – Burden of proving fact especially within knowledge – Prime facie case – Held that the following foundational facts, duly established by the prosecution, justify the invocation of the principles enshrined under Section 106 of the Evidence Act: –

  1. a) The offence took place inside the four walls of the house in which the respondent accused, the deceased and their 7-year-old daughter were living. The respondent accused has not disputed his presence in the house at the time of the alleged incident.
  1. b) The failure on the part of the accused to inform the family members about the death of their daughter and the clandestine manner in which her body was cremated, more particularly when her family members were residing in the very same village. By the time the Investigating Officer reached the place of incident the body of the deceased was fully burnt.
  1. c) The dubious conduct of the respondent accused in fleeing away from home leaving behind his minor daughter of seven years age all alone.
  1. d) The untimely death of the deceased in suspicious circumstances, occurring shortly after a fight with the respondent-accused two to three days before the incident, coupled with evidence of their strained relationship.
  1. e) The respondent accused maintained complete silence. In other words, has failed to explain any of the incriminating circumstances pointing a finger against him.

Aforementioned circumstances constitute more than a prima facie case to enable the prosecution to invoke Section 106 of the Evidence Act and shift the burden on the accused husband to explain what had actually happened on the day & date his wife died.

(Para 88)

(I) Evidence Act, 1872, Section 106 – Evidence – Burden of proving fact especially within knowledge – What is “prima facie case” (foundational facts) in the context of Section 106 of the Evidence Act? – The Latin expression prima facie means “at first sight”, “at first view”, or “based on first impression” – According, to Webster’s Third International Dictionary (1961 Edn.), “prima facie case” means a case established “prima facie” by evidence which in turn means “evidence sufficient in law to raise a presumption of fact or establish the fact in question unless rebutted” – In both civil and criminal law, the term is used to denote that, upon initial examination, a legal claim has sufficient evidence to proceed to trial or judgment. In most legal proceedings, one party (typically, the plaintiff or the prosecutor) has a burden to prove, which requires them to present prima facie evidence for each element of the case or charges against the defendant – If they cannot present prima facie evidence, the initial claim may be dismissed without any need for a response by other parties – Section 106 of the Evidence Act would apply to cases where the prosecution could be said to have succeeded in proving facts from which a reasonable inference can be drawn regarding guilt of the accused – The presumption of fact is an inference as to the existence of one fact from the existence of some other facts, unless the truth of such inference is disproved.

(Para 81 to 83)

State Of Madhya Pradesh V. Balveer Singh

Supreme Court: 2025 INSC 261: (DoJ 24-02-2025)

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Delayed Death: When ‘Attempted Murder’ Becomes More

Maniklall Sahu, the appellant, along with three co-accused, trespassed into the house of Rekhchand Verma, assaulted him with sticks and fisticuffs, and flung him from a terrace. The injured person, Rekhchand Verma, initially survived but was in a critical condition. He eventually succumbed to his injuries approximately nine months after the incident, dying on 8th November 2022 due to septicaemia and pneumonia, leading to cardiorespiratory arrest. The trial court had initially convicted the appellant under Section 302 of the Indian Penal Code (IPC) for murder. However, the High Court altered this conviction to Section 307 IPC for attempt to murder, sentencing the appellant to 7 years of rigorous imprisonment and a fine of Rs. 1,000/-. The appellant subsequently filed this appeal challenging the Section 307 IPC conviction.

Law Involved The primary legal provisions under consideration are Sections 299, 300, 302, and 307 of the Indian Penal Code (IPC).

Section 307 IPC (Attempt to Murder): This section deals with acts done with the intention or knowledge that it might cause death, and if death occurs, the act would be murder.

Section 299 IPC (Culpable Homicide): Defines culpable homicide.

Section 300 IPC (Murder): Specifies when culpable homicide amounts to murder, including acts done with the intention of causing death, or causing bodily injury sufficient in the ordinary course of nature to cause death, or knowing the act is so imminently dangerous that it will most probably cause death.

Section 302 IPC (Punishment for Murder): Prescribes the punishment for murder. The core legal question revolves around the “Application of Theory of Causation where death ensues after some delay” and whether the High Court correctly applied Section 307 IPC despite the victim’s eventual death.

Reasoning The Supreme Court critically analysed the High Court’s decision to alter the conviction from Section 302 IPC to Section 307 IPC, especially given the victim’s death.

  1. Medical Evidence and Causation: The Court reviewed extensive medical evidence, which consistently showed that the deceased, Rekhchand Verma, suffered severe injuries, including a head injury, spinal cord injury leading to paraplegia, and multiple complications such as infected bedsores, septic shock, and bilateral pneumonia. Medical experts testified that these complications were a direct result of the initial injuries sustained during the assault and were sufficient in the ordinary course of nature to cause death. The Court highlighted that the injured person received medical treatment for nine months before his demise. The Court concluded that the injuries suffered were grievous and that the death was a consequence of these injuries, with complications like septicaemia and pneumonia not breaking the chain of causation.
  2. High Court’s Error: The Supreme Court determined that the High Court committed a serious error in bringing the case under the ambit of “attempt to commit murder” (Section 307 IPC) on the premise that the victim survived for about nine months, and his death was due to complications during treatment and not directly from the initial injuries. The Supreme Court stressed that if the injury was fatal and intended to cause death, or if death occurred after some delay due to septicaemia or other complications stemming from the injury, the offence would fall under the first limb of Section 300 IPC (murder) [36a]. Furthermore, if the injuries were sufficient in the ordinary course of nature to cause death and death occurred due to septicaemia or other complications, the act would amount to culpable homicide punishable under Section 302 IPC, falling under the third limb of Section 300 IPC [36b, 37c, 37d].
  3. Jurisprudence on Delayed Death: Drawing on various precedents, the Court reiterated that delayed death or intervening medical conditions (like septicaemia or pneumonia) do not automatically absolve an accused of murder charges if the initial injuries were the proximate cause of death. The Court concluded that the cause of death was indeed due to the injuries suffered, and the contention that the death resulted from a lack of proper treatment or was disconnected from the initial assault was unfounded.

Holding The Supreme Court dismissed Maniklall Sahu’s appeal . While the appellant’s conviction under Section 307 IPC (attempt to murder) as altered by the High Court stands affirmed due to the dismissal of his appeal, the Supreme Court clearly stated that the High Court committed a serious error in altering the conviction from Section 302 IPC to Section 307 IPC . The Supreme Court’s detailed reasoning underscored that given the medical evidence and the established chain of causation, the offence should have been considered murder or culpable homicide amounting to murder, punishable under Section 302 IPC, because the injuries were sufficient in the ordinary course of nature to cause death.

Maniklall Sahu Vs State of Chhattisgarh

Supreme Court: 2025 INSC 1107: (DoJ 12-09-2025)

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Tender Troubles: Supreme Court Upholds Bid Sanctity, Overturns Rectification

The case originated from an electronic bid (No. 7 of 2023-24) issued by the Superintending Engineer and Project Director, Project Implementation Unit – I, Public Works (Roads) Directorate, Government of West Bengal, on 17.10.2023. The tender was for collecting Road User Fee (RUF) from commercial vehicles for 1095 days. The earnest money deposit was fixed at Rs. 25,00,000.00. Seven bidders participated. The technical bids were evaluated, and four bidders were technically qualified, including Prakash Asphaltings and Toll Highways (India) Limited (appellant) and Mandeepa Enterprises (respondent No. 1).

Financial bids were opened on 08.12.2023. The appellant, Prakash Asphaltings, was found to be the highest bidder (H1) with a quoted amount of Rs. 91,19,00,000.00 for 1095 days. Respondent No. 1, Mandeepa Enterprises, was the lowest bidder (H4) with an offered amount of Rs. 9,72,999.00 per day.

Respondent No. 1 subsequently claimed a typographical error in their financial bid, stating they intended to quote Rs. 106,54,33,905.00 for the entire contract period instead of Rs. 9,72,999.00 per day. They requested the tendering authority to treat the figure of Rs. 9,72,999.00 as a typographical error and read it as Rs. 106,54,33,905.00. The tendering authority rejected this request on 20.12.2023, stating that correction of a financial bid after opening was not possible and would impeach the sanctity of the tender process.

Aggrieved, Respondent No. 1 filed a writ petition (WPA No. 29001 of 2023) before a Single Judge of the High Court, which was dismissed on 03.01.2024, as the Single Judge found no scope for interference. Respondent No. 1 then filed an intra-court appeal (MAT No. 93 of 2024). A Division Bench of the High Court allowed the appeal on 23.02.2024, observing that the error in quoting the figure by respondent No. 1 was inadvertent. The Division Bench directed the tendering authority to evaluate Respondent No. 1’s BOQ at Rs. 106,54,33,905.00 and offer other bidders the opportunity to match this figure. This civil appeal was directed against the Division Bench’s judgment and order.

Law Involved

Clause 4(g) of the Notice Inviting Electronic Bid: This clause specifically states that any change in the template of the Bill of Quantity (BOQ) will not be accepted under any circumstances.

Clause 5B(v) of the Instructions to Bidders: This clause outlines that during bid evaluation, if bidders fail to submit supporting documents or original hard copies within the stipulated timeframe, their proposals will be liable for rejection.

Article 226 of the Constitution of India: Pertains to the High Court’s jurisdiction to issue writs.

Principles of Equity and Natural Justice in Tender Processes: The judgment refers to the importance of these principles in tender and contract awards, but also emphasises that these principles should be kept at a distance when there is a violation of rules.

Judicial Review of Administrative Action: The Court reiterated that judicial review in administrative action, particularly tenders, is limited to preventing arbitrariness, irrationality, bias, and mala fides. Courts should not interfere with a decision unless it is “unlawful” or “unsound”.

Public Interest: Tenders are a cornerstone of governmental procurement processes, aiming for competitiveness, fairness, and transparency in resource allocation. Adherence to rules and conditions and the sanctity of the tender process are paramount.

Reasoning The Supreme Court reasoned that the Division Bench’s interpretation was erroneous for several key reasons:

Sanctity of Tender Process: The Court held that allowing rectification of financial bids after they have been opened would impeach the sanctity and integrity of the entire tender process.

Strict Adherence to Tender Conditions: Clause 4(g) explicitly prohibits any change in the BOQ template under any circumstances. The Division Bench’s broad interpretation of “bona fide mistake” to allow rectification was held to be incorrect and would put “shackles on the functioning of the tendering authority”.

Nature of the Mistake: While Respondent No. 1 claimed an inadvertent mistake, it was effectively a unilateral or systematic computer typographical transmission failure, not one attributable to the tendering authority. Such a mistake, even if unintentional, cannot be a ground to allow post-bid modifications that would undermine the competitive bidding process.

Adverse Consequences to Public Exchequer: The Division Bench’s decision to re-evaluate Respondent No. 1’s bid at a significantly higher amount (Rs. 106,54,33,905.00) meant that the appellant, who was originally the H1 bidder, would be displaced. This would lead to a considerable loss of revenue to the state exchequer (approximately 15 crores) by not accepting the higher bid of the appellant and giving an opportunity to Respondent No. 1 to correct its bid post-opening.

Limited Scope of Judicial Review: The Court reiterated that interference by a writ court in ongoing tender processes is not permissible unless there is a clear violation of principles of natural justice, or the decision is arbitrary or mala fide. The Division Bench’s decision was deemed a clear violation of natural justice principles.

Non-Joinder of Party: The appellant (Prakash Asphaltings), as the highest bidder and a directly affected party, was not made a party respondent in the intra-court appeal before the Division Bench, which was viewed as prejudicial and a violation of natural justice.

Holding The Supreme Court allowed the civil appeal, thereby setting aside and quashing the judgment and order dated 23.02.2024 passed by the Division Bench of the High Court at Calcutta in MAT No. 93 of 2024. The Court sustained the order of the learned Single Judge dismissing the writ petition. Consequently, Prakash Asphaltings and Toll Highways (India) Limited (the appellant), being the H1 bidder, is to be awarded the contract in terms of the notice inviting electronic bid dated 17.10.2023. The Court also ruled that there shall be no order as to costs.

Prakash Asphaltings And Toll Highways (India) Limited Vs Mandeep Enterprises And Others

Supreme Court: 2025 INSC 1108: (DoJ 12-09-2025)

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“Speculative Investors” Barred from IBC Relief: Supreme Court Upholds Homebuyer Protections

Four appeals were heard together, arising from orders of the National Company Law Appellate Tribunal (NCLAT). The key appellants, Mansi Brar Fernandes and Sunita Agarwal, had entered into agreements with developers (Gayatri Infra Planner Pvt. Ltd. and Antriksh Infratech Pvt. Ltd., respectively) for property units. Both agreements included buy-back clauses and involved advance payments. The developers defaulted, and the appellants initiated proceedings under Section 7 of the Insolvency and Bankruptcy Code (IBC). The NCLAT reversed the admission of these applications, branding the appellants as “speculative investors” rather than genuine homebuyers or financial creditors.

Law Involved: The central legal framework is the Insolvency and Bankruptcy Code, 2016 (IBC), specifically Section 7, which governs the initiation of the Corporate Insolvency Resolution Process (CIRP) by financial creditors. The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2019, and the subsequent Amendment Act, are also critical. These amendments introduced a threshold requirement for allottees to file a Section 7 application (requiring at least 10% of allottees or 100 allottees). The Court frequently referenced its earlier judgment in Pioneer Urban Land and Infrastructure Ltd v. Union of India, which distinguishes between genuine homebuyers and speculative investors. The judgment also emphasizes the Right to Shelter as a fundamental right under Article 21 of the Constitution and the role of the Real Estate (Regulation and Development) Act, 2016 (RERA).

Reasoning: The Supreme Court deliberated on the distinction between “speculative investors” and “genuine homebuyers” within the context of the IBC. It observed that the IBC is intended as a collective mechanism to revive viable projects and safeguard the fundamental right to shelter of genuine homebuyers, not as a recovery tool or a bargaining chip for individuals. The legislative intent behind recognizing allottees as financial creditors was to protect genuine homebuyers, while simultaneously preventing misuse by speculative investors seeking premature exits or exorbitant returns, which had burdened the real estate sector and the adjudicatory machinery.

The Court provided criteria to identify speculative investors, including: agreements that substitute possession with buy-back or refund options, insistence on refunds with high interest, purchase of multiple units (especially in double digits), demanding special rights or privileges, deviations from the RERA Model Agreement, and unrealistic interest rates or promises of returns. The transaction entered into by Mansi Brar Fernandes, involving a buy-back clause and the pursuit of commercial returns rather than possession, led the Court to conclude that she was indeed a speculative investor. Similarly, Sunita Agarwal’s agreement for an “investment” with a 25% per annum return over 24 months, coupled with a buy-back clause, indicated a speculative intent.

While affirming the NCLAT’s finding that the appellants were “speculative investors,” the Supreme Court clarified that the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2019, was indeed applicable to the facts of the present case, correcting the NCLAT’s reasoning on this point [19, 20, 35, 36, 48(ii)]. The Court applied the doctrine of Actus Curiae Neminem Gravabit (an act of the Court shall prejudice no one) to address the procedural issues related to the Ordinance’s applicability and the delay it caused.

Holding: The Supreme Court affirmed the NCLAT’s findings that Mansi Brar Fernandes and Sunita Agarwal were “speculative investors” and therefore not entitled to initiate proceedings under Section 7 of the IBC [25, 34, 48(i)]. Consequently, the Court upheld the NCLAT’s orders setting aside the admission of their Section 7 applications by the NCLT [48(i)]. However, the Court clarified that the Ordinance/Amendment Act was applicable to the case, although this correction in reasoning did not alter the ultimate outcome given the appellants’ status as speculative investors [48(ii)]. The appellants remain free to pursue their remedies through other appropriate legal forums, without being barred by limitation [48(i)].

Mansi Brar Fernandes Vs Subha Sharma And Anr.

Supreme Court: 2025 INSC 1110: (DoJ 12-09-2025)

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