Indian Judgements

Indian Judgements

Majority decision of the trustees is valid and binding—unanimity or total consonance is not required.

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Judgments Online

The primary dispute concerned rival claims of internal authority within three registered societies (Hindustan Medical Institution, Eastern India Educational Institution, and Belle Vue Clinic) regarding who was legally authorized to cast electronic votes on behalf of the societies’ corporate shares at the Annual General Meetings of Birla Corporation Limited (BCL).

The Supreme Court set aside the judgments of the Division Bench and Single Judge of the Calcutta High Court. It ruled that under the specific by-laws of these societies, a majority decision of the trustees is valid and binding—unanimity or total consonance is not required. Furthermore, the Court struck down the High Court’s direction that the “vote cast first” in point of time should automatically prevail, clarifying that statutory corporate voting laws demand verification of lawful authority rather than chronological speed.

1. Background and Context

The controversy arose among three societies registered under the West Bengal Societies Registration Act, 1961, all of which hold substantial shares in Birla Corporation Limited (BCL). Following the demise of Priyamvada Devi Birla in 2004, an Administrators Pendente Lite Committee (APL Committee) was established by the Calcutta High Court to preserve her estate during pending testamentary proceedings.

Subsequently, deep internal governance fractures developed within the three societies. Competing factions emerged, with each claiming the sole right to issue authorization letters and cast remote e-votes at BCL’s annual general meetings. In the 2021 meeting, the corporate scrutinizer invalidated the societies’ electronic votes due to these conflicting claims. Ahead of the September 27, 2022 Annual General Meeting, the societies filed suits on the Original Side of the Calcutta High Court seeking interim injunctions to ensure their designated proxies could vote without BCL interfering.

2. Lower Courts’ Rulings

  • Single Judge of the High Court: On September 16, 2022, the Single Judge refused to grant ad interim reliefs, stating that BCL had no business resolving the internal power struggles of the shareholder societies and that a scrutinizer cannot be forced at an interim stage to choose between rival authorizations.
  • Division Bench of the High Court: On appeal, the Division Bench affirmed the refusal of interim relief but introduced a significant legal caveat. Relying broadly on Section 48 of the Indian Trusts Act, 1882, the Bench concluded that trustees must act in total consonance; if even one trustee dissents, the decision fails. It then directed that whichever vote was cast first in point of time by a society (whether by the Board of Trustees or the Managing Committee) must be accepted by the scrutinizer, effectively ignoring any subsequent conflicting updates.

3. Key Legal Issues and Findings of the Supreme Court

Issue I: Requirement of Unanimity among Trustees

The Division Bench had ruled that the absence of absolute unanimity defeats any decision of a Board of Trustees. The Supreme Court textually analyzed Clause 24 of the societies’ constitutive by-laws, which explicitly allows delegation via written resolutions signed by a majority of the trustees.

The Court highlighted that Section 48 of the Indian Trusts Act explicitly accommodates exceptions “where the instrument of trust otherwise provides.” Because the societies’ own internal by-laws explicitly permitted majority-backed authorizations, the High Court erred by forcing a general rule of total consensus, which stripped the express text of Clause 24 of its functional utility. A majority-backed decision is legally effective despite a lack of total unanimity.

Issue II: Authority of the Board of Trustees vs. Managing Committee

The High Court’s directive had treated the Board of Trustees and the Managing Committee as normatively interchangeable entities for the purpose of voting.

The Supreme Court rejected this alignment by looking at the Memorandums of Association, which dictate a strict two-tier governance structure: all movable and immovable properties (including corporate shares) vest securely in the trustees. The Managing Committee is merely a subordinate, delegated administrative branch possessing only the specific operational powers delegated to it by the trustees. Therefore, the High Court was wrong to treat the two bodies as interchangeable categories standing on the same plane.

Issue III: The “Vote Cast First” Chronological Rule

The core operational issue was whether the High Court could create a rule prioritizing whichever vote hit the electronic system first.

The Supreme Court held that neither Section 108 of the Companies Act, 2013, nor Rule 20 of the Companies (Management and Administration) Rules, 2014, treats chronology as a stamp of validity. Corporate e-voting laws protect a vote against duplication only if it is fundamentally a lawful vote of that juristic member. For non-individual shareholders (like societies), scrutiny rules mandate that the corporate scrutinizer verify actual board resolutions and authorization letters. The High Court impermissibly substituted “chronology for authority,” creating a race to vote that is completely alien to statutory corporate frameworks. An unauthorized vote cannot be validated simply because it was submitted fast.

4. Conclusion and Directions

The Supreme Court set aside the judgments of both the Division Bench and the Single Judge of the Calcutta High Court. The Court legally established that:

  1. Written actions backed by a majority of the trustees constitute valid authorization under Clause 24 of these by-laws.
  2. Voting validity must firmly rest on lawful authority traceable to governing documents and company law, rather than chronological priority.

The Court expressly noted that it did not pass judgment on the ultimate factual validity of the underlying resolutions, appointments, or removals within the societies. The suits and interlocutory applications were restored to the file of the Calcutta High Court for fresh consideration on their merits by the Single Judge.

2026 INSC 554

Hindustan Medical Institution  V. Birla Corporation Limited & Ors. (D.O.J. 26.05.2026)

2026 INSC 554 click here to view full text of judgment

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Admissibility of Deceased Witness Testimony Against Absconding Accused

July 18, 2026 No Comments

Supreme Court allowed the appeals filed by the State of West Bengal, ruling that the deposition of a deceased witness recorded in an earlier trial is admissible in a subsequent trial against an absconding accused, provided the requirements of Section 299 of the Code of Criminal Procedure (CrPC) are met. The Court clarified that the provision serves to preserve evidence when an accused deliberately absconds, preventing them from benefiting from the unavailability of material witnesses due to the passage of time. The Court set aside the High Court’s order, which had denied the admission of the victim’s testimony, confirming that the statutory preconditions—the accused absconding and no immediate prospect of arrest—were satisfied at the time the witness deposed.

  • Background: In a 2012 gang-rape case, the respondent and another accused were absconding while three others were tried and convicted. The victim, a key witness, testified in the first trial but passed away in 2015. After the respondent was arrested in 2016, the prosecution sought to admit the victim’s earlier deposition as evidence under Section 33 of the Indian Evidence Act read with Section 299 of the CrPC.
  • High Court Order: The High Court of Calcutta had rejected the application, observing that the prosecution had a duty to obtain a specific direction from the Trial Court to record evidence against the absconder during the first trial, and thus the earlier deposition could not be used against the respondent.
  • Interpretation of Section 299 CrPC: The Supreme Court held that Section 299 CrPC acts as an exception to the general rule requiring a witness to be examined in the presence of the accused. It does not mandate a formal, prior order from a Magistrate to record that the accused is absconding; rather, what is relevant is whether the conditions—that the accused is absconding and there is no immediate prospect of arrest—were established at the time the evidence was recorded.
  • Preventing Misuse of Process: The Court reasoned that taking a restrictive view of Section 299 would jeopardize the criminal justice system by incentivizing accused persons to wilfully abscond and await the death or unavailability of material witnesses.
  • Application to Facts: The Court noted that the respondent was a declared absconder when the victim’s testimony was recorded (2013), and he remained at large until his arrest in 2016. As the two essential conditions of Section 299(1) were met, the deceased victim’s evidence is admissible in the trial against the respondent.

Legislative Continuity: The Court noted that the legislature has maintained this principle in Section 335 of the recently enacted Bharatiya Nagarik Suraksha Sanhita, 2023, reinforcing the intent to ensure evidence is preserved against those who evade trial.

2026 INSC 718

The State of West Bengal v. Kader Khan – (D.O.J. 17.07.2026)

2026 INSC 718 click here to view full text of judgment

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Insolvency and Bankruptcy: Finality of Resolution Plans and Extinguishment of Sub-judice Claims

July 18, 2026 No Comments

Supreme Court allowed the appeals filed by the Successful Resolution Applicant (Appellant-SRA), ruling that upon the approval of a Resolution Plan under the Insolvency and Bankruptcy Code, 2016 (IBC), all claims—including those pending adjudication (sub-judice)—that are not specifically provided for in the plan stand extinguished. The Court held that the “clean slate” doctrine is fundamental to the IBC, preventing unresolved or contingent claims from resurfacing and undermining the revival of the corporate debtor. Consequently, the Court set aside the High Court orders and dismissed the civil suit and arbitration proceedings initiated by operational creditors, affirming that they are bound by the terms of the approved Resolution Plan.

  • Background: The Appellant-SRA challenged Bombay High Court orders that allowed a civil recovery suit and arbitration proceedings to continue against the corporate debtor (Bhushan Steel Limited) despite the approval of its Resolution Plan. The respondents, operational creditors, sought to pursue claims that were pending at the time of the Corporate Insolvency Resolution Process (CIRP).
  • Treatment of Claims: During the CIRP, the Resolution Professional admitted the respondents’ disputed claims at a notional value of Rupee One (1) each. The approved Resolution Plan stipulated that because the liquidation value was NIL, no amounts were due to operational creditors; however, a settlement fund was provided for those with admitted claims.
  • The “Clean Slate” Doctrine: The Court emphasized that a successful resolution applicant must start on a “clean slate,” free from “hydra-headed” surprise claims. Once a Resolution Plan is approved under Section 31(1) of the IBC, it becomes binding on all stakeholders, and claims not incorporated therein are deemed extinguished, withdrawn, or abated.
  • Finality of the Plan: The Court noted that the Final List of Creditors attained finality, and the respondents could not seek to reopen or question the commercial wisdom of the Committee of Creditors after the plan’s approval. The Court found no merit in the allegations of fraud, noting that no proceedings had been initiated under Rule 11 of the NCLT Rules to challenge the plan’s integrity.
  • No Express Carve-out: Upon a harmonious reading of the Resolution Plan, the Court concluded there was no express “carve-out” protecting sub-judice claims from extinguishment. The plan explicitly mandated that all legal proceedings relating to the period prior to the effective date stand extinguished, except to the extent of the specific settlement amount provided.
  • Observation on MSMEs: In an “Afterword,” the Court observed that the current insolvency framework does not adequately account for the position of small operational creditors and MSMEs, who are often placed at the bottom of the repayment waterfall. The Court suggested that the Legislature and Law Commission examine this to ensure a more balanced repayment mechanism.
  • Outcome: The Court allowed the appeals, set aside the contrary High Court orders, and dismissed the pending civil suit and arbitration proceedings, enforcing the finality of the Resolution Plan.

2026 INSC 717

M/S Tata Steel Ltd. v. Varsha & Anr. (D.O.J. 17.07.2026)

2026 INSC 717 click here to view full text of judgment

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Excluding Nominated Members from Local Authority Elections

July 18, 2026 No Comments

The Supreme Court upheld the High Court of Karnataka’s decision to exclude nominated members of Town Panchayats from participating in Legislative Council elections for Local Authorities’ Constituencies. The Court ruled that under the constitutional framework established by the 74th Amendment (Part IX-A), nominated members, who serve only in an advisory capacity, lack the democratic mandate of elected representatives. Consequently, their inclusion in the electoral roll was declared unconstitutional, and the Court affirmed the direction to conduct a recount of votes after segregating the invalid votes cast by these nominated members.

  • Background: The election to the Karnataka Legislative Council (Chikkamagaluru Local Authorities Constituency) was challenged because 12 nominated members from four Town Panchayats were included in the electoral roll and participated in the voting. The appellant, who won by a narrow margin of 6 votes, contended that the electoral roll’s finality should be respected.
  • Constitutional Interpretation: The Court held that while Article 171(3)(a) mentions “members” of local authorities, this must be interpreted through the lens of the 74th Constitutional Amendment. Article 243-R establishes that while nominated members may be appointed for their expertise, they are expressly barred from voting in municipal meetings, underscoring their advisory rather than representative role.
  • Democratic Representation: The Supreme Court emphasized that allowing nominated members to vote in Legislative Council elections would undermine the democratic nature of the electoral process, as they are not democratically elected. The Court affirmed that “members” in the context of electoral colleges refers to democratically elected representatives.
  • Finality of Electoral Rolls: While acknowledging the principle that electoral rolls typically attain finality, the Court distinguished this case by noting that the inclusion of the nominated members was void ab initio and unconstitutional. Therefore, the finality of the roll could not be used to validate an illegality that strikes at the core of the electoral college’s composition.
  • Secrecy of the Ballot: The Court rejected the argument that segregating these votes would violate the secrecy of the ballot. It maintained that the higher constitutional goal of preserving free and fair elections and ensuring the purity of the electoral process outweighs the requirement for absolute secrecy in this specific context.
  • Outcome: The Supreme Court dismissed the appeals and affirmed the High Court’s orders. The Court directed the authorities to proceed with the consequential actions based on the recount results already obtained, ensuring that the election outcome reflects only the valid votes cast by elected representatives.

2026 INSC 716

Pranesh M.K. v. Shanthegowda & Ors. – (D.O.J. 16.07.2026)

2026 INSC 716 click here to view full text of judgment

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Railway: Establishing Liability in Untoward Railway Incidents

July 18, 2026 No Comments

The Supreme Court set aside the concurrent dismissal of a compensation claim by the Railway Claims Tribunal and the High Court of Madhya Pradesh. The Court held that when a passenger dies in an “untoward incident” (falling from a running train), the absence of a recovered ticket does not automatically negate the status of a bona fide passenger. Emphasizing the “no-fault liability” principle under Section 124A of the Railways Act, 1989, the Court ruled that once the claimant establishes the foundational facts through an affidavit, the burden shifts to the Railways. Technical lapses and the inability to recover personal belongings should not defeat the humanitarian and welfare objectives of the legislation.

  • Background: The appellant filed a claim for compensation following the death of her husband, who fell from a running train while traveling from Raipur to Ahmedabad. The Railway Claims Tribunal and the High Court previously rejected the claim, citing a lack of proof regarding the deceased being a bona fide passenger (specifically due to the missing ticket).
  • Legal Principle (No-Fault Liability): The Court reiterated that Section 124A of the 1989 Act is a beneficial, “no-fault” provision. It is designed to provide expeditious relief to victims of untoward incidents without requiring proof of negligence by the Railway Administration.
  • Burden of Proof: Relying on Union of India v. Rina Devi and Doli Rani Saha v. Union of India, the Court clarified that:
    • The mere absence of a ticket does not disprove that a person was a bona fide
    • The initial burden is on the claimant, which is sufficiently discharged by filing an affidavit stating the facts.
    • Once this is done, the burden shifts to the Railways to disprove the claim based on attending circumstances.
  • Operational Concerns: The Court highlighted the critical issue of chronic overcrowding in Indian Railways. It noted that while the Railway Manuals contain detailed safety and ticketing protocols, the execution often fails. The Court suggested that Railways should increase manpower to better manage safety and ticketing, which could simultaneously reduce such tragedies and provide employment.
  • Constitutional Perspective: The Court observed that using terms like “second class passenger” is outdated and potentially offensive to the spirit of the Constitution of India; it suggested that class designations should refer to the “coach” rather than the “passenger.”

Decision: The Supreme Court allowed the appeal and set aside the lower court judgments. It ordered the Railways to pay compensation of ₹8,00,000 to the appellant within four weeks, failing which the amount would attract interest at 8% from the date of the original claim filing.

2026 INSC 715

Lata v. Union of India & Anr. – (D.O.J. 17.07.2026)

2026 INSC 715 click here to view full text of judgment

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