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Valid Title Prevails: Supreme Court Upholds Original Allotment in Execution Proceedings

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This civil appeal challenged concurrent adverse findings by the trial court and the Karnataka High Court, which had dismissed an application filed under Order XXI, Rules 97 to 101 of the CPC by the appellant (Balakrishna) objecting to an execution proceeding. The original plaintiff (Kanniah Naidu) had secured an ex-parte or contested decree for declaration of title and possession based merely on a photocopy of an allotment certificate (Hakkupatra), claiming his original was taken back by the Tahsildar due to multiple allotments. Conversely, the objector Balakrishna produced the genuine, original Hakkupatra dated January 5, 1972, and established his actual physical possession, which the decree-holder himself admitted during cross-examination. The Supreme Court held that the lower courts completely misdirected themselves by ignoring the mandate of Order XXI Rule 101 (which bars separate suits and treats execution applications as regular suits) and disregarding vital admissions and primary evidence. Consequently, the Supreme Court allowed the appeal, set aside the lower court judgments, and declared the legal representatives of Balakrishna as the lawful owners and possessors of the property.

  • Production of Primary Evidence: The decree-holder failed to produce the original Hakkupatra and relied solely on an inadmissible photocopy, whereas the objector Balakrishna successfully placed on record the original Hakkupatra dated January 5, 1972, establishing a superior claim to title.
  • Admission of Possession: During cross-examination, the decree-holder explicitly admitted that Balakrishna had constructed a multi-story reinforced concrete (RCC) building on the suit site consisting of ground-floor shops let out to tenants, completely disproving the plaintiff’s initial theory of a recent trespass.
  • Scope of Order XXI Rules 97–101 CPC: The High Court erred in holding that the objector should have filed a separate suit to set aside the decree, ignoring the statutory mandate that execution inquiries under Order XXI Rule 101 are on par with regular suits and explicitly bar separate independent suits.
  • Final Relief Granted: The Supreme Court set aside the High Court’s judgment and the executing court’s order, declared Balakrishna’s legal representatives as the lawful owners and possessors of Site No. 261 (Munnekolala New Extension, Varthur Hobli), and set aside the contrary trial court decree passed in O.S. No. 2198 of 1987.

2026 INSC 1155

Balakrishna (Dead) Thr. LRs. v. G.N. Kanniah Naidu (Dead) Thr. LRs. and Another (D.O.J. 26.10.2026)

2026 INSC 1155 click here to view full text of judgment

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Reconciling Eelectricity Theft Assessments: Supreme Court Clarifies Interplay Between Section 126 &135 of the Electricity Act

October 27, 2026 No Comments

These civil appeals addressed common questions of law regarding the correct mechanism for assessing electricity charges and restoring power supply when a consumer is accused of theft of electricity under Section 135 of the Electricity Act, 2003. The distribution licensees argued that the summary assessment and deposit requirement for reconnection under the third proviso to Section 135(1A) are independent of Section 126 (unauthorized use) and Section 127 (appeals), and that civil liability is strictly preserved for determination by a Special Court under Section 154(5). The Supreme Court held that in the absence of a separate statutory procedure or designated assessing officer for theft under the Supply Code, the “assessed amount” required for seeking emergency restoration of supply under Section 135(1A) must be determined by adopting the procedure delineated under Section 126 (including filing objections and hearings). The Court clarified that while this assessed amount is subject to an appeal under Section 127 and acts as final for the limited purpose of reconnection, it remains ultimately subject to the final determination of civil liability by the Special Court under Section 154(5) in the event of criminal prosecution. Finding the High Court’s interim orders directing electricity restoration upon a 50% deposit to be sound, the Supreme Court dismissed both appeals with necessary legal clarifications.

  • Assessment Procedure for Electricity Theft: In the absence of a distinct statutory procedure or assessing officer for theft under the Electricity Act, 2003 or the relevant Supply Code, the assessment of energy charges for restoration of supply under Section 135(1A) must utilize the mechanism and formula prescribed under Section 126 for unauthorized use of electricity.
  • Right to File Objections and Appeals: Consumers accused of theft are entitled to file objections against a provisional assessment, ensuring natural justice, and can prefer an appeal under Section 127. However, the appellate determination remains final only for the limited purpose of securing a reconnection under Section 135(1A).
  • Prerogative of the Special Court: The assessment and appeal under Sections 126 and 127 do not override or oust the jurisdiction of the Special Court under Section 154(5). Where a criminal complaint is filed, the Special Court retains the exclusive power to determine final civil liability, and any excess amount deposited by the consumer must be refunded with interest under Section 154(6).
  • Discretion of Constitutional Courts: While electricity is an essential commodity for life and livelihood, High Courts must exercise a circumspect and cautious approach when entertaining writ petitions for restoration of power in theft cases, though ordering a deposit of not less than 50% of the assessed amount (aligned with Section 127(2)) as a condition for interim relief is legally sound.

2026 INSC 1157

Dakshin Gujarat Vij Company Limited & Anr. v. Vaibhav Metal Crusher (D.O.J. 26.10.2026)

2026 INSC 1157 click here to view full text of judgment

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Balancing Equity and Commerce: SC Settles Industrial Loan Dispute Through Final Settlement Terms

October 27, 2026 No Comments

This appeal arose from a common judgment of the Calcutta High Court’s Division Bench, which had set aside a Single Judge’s order and upheld the classification of the appellant-borrower’s loan account as a Non-Performing Asset (NPA) and its subsequent assignment to an Asset Reconstruction Company (Respondent No. 2). During the proceedings before the Supreme Court, interim arrangements were made allowing the appellant to pay the principal assignment value of Rs. 250 crores, and a committee/report was commissioned under the guidance of former Supreme Court Judge, Hon’ble Mr. Justice Anil R. Dave, to determine any reasonable return or additional liability. Balancing the equities to protect a running industrial concern and its workforce—while addressing the competing claims of the assignee—the Supreme Court exercised its powers under Article 142 to dispense with technical questions regarding the NPA classification and assignment validity. Instead, the Court accepted Justice Anil R. Dave’s report with modifications and directed the appellant to pay a final lump sum of Rs. 125 crores over and above the Rs. 250 crores already paid, bringing all pending proceedings across the NCLT and DRT to a quietus.

  • Background and Dispute over NPA Classification: The appellant company challenged the retrospective classification of its loan account as an NPA by State Bank of India amidst the COVID-19 pandemic relief circulars, as well as the subsequent assignment of its debt to an asset reconstruction company for Rs. 250 crores.
  • Expert Assessment of Additional Liability: Pursuant to interim directions, a detailed report was submitted by Hon’ble Mr. Justice Anil R. Dave evaluating a reasonable commercial return on the acquisition value, factoring in interest rates between 13% and 15% per annum alongside litigation costs.
  • Equitable Resolution and Directions: Invoking its role as a court of equity to do complete justice and save a functioning industrial unit from liquidation, the Supreme Court bypassed complex legal questions on asset classification to craft a workable solution.
  • Final Terms of Settlement:
    • The appellant must pay an additional sum of Rs. 125 crores (on top of the Rs. 250 crores already paid) within 12 weeks as a full and final settlement.
    • Upon receipt, the respondents are mandated to return all title deeds and release all securities and guarantees within four weeks.
    • All connected litigations, including the Section 7 IBC proceedings before the NCLT, Kolkata, and the recovery proceedings before DRT-1, Kolkata, stand formally disposed of.

2026 INSC 1156

Atibir Industries Co. Ltd. v. State Bank of India & Anr. (D.O.J. 26.10.2026)

2026 INSC 1156 click here to view full text of judgment

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Valid Title Prevails: Supreme Court Upholds Original Allotment in Execution Proceedings

October 27, 2026 No Comments

This civil appeal challenged concurrent adverse findings by the trial court and the Karnataka High Court, which had dismissed an application filed under Order XXI, Rules 97 to 101 of the CPC by the appellant (Balakrishna) objecting to an execution proceeding. The original plaintiff (Kanniah Naidu) had secured an ex-parte or contested decree for declaration of title and possession based merely on a photocopy of an allotment certificate (Hakkupatra), claiming his original was taken back by the Tahsildar due to multiple allotments. Conversely, the objector Balakrishna produced the genuine, original Hakkupatra dated January 5, 1972, and established his actual physical possession, which the decree-holder himself admitted during cross-examination. The Supreme Court held that the lower courts completely misdirected themselves by ignoring the mandate of Order XXI Rule 101 (which bars separate suits and treats execution applications as regular suits) and disregarding vital admissions and primary evidence. Consequently, the Supreme Court allowed the appeal, set aside the lower court judgments, and declared the legal representatives of Balakrishna as the lawful owners and possessors of the property.

  • Production of Primary Evidence: The decree-holder failed to produce the original Hakkupatra and relied solely on an inadmissible photocopy, whereas the objector Balakrishna successfully placed on record the original Hakkupatra dated January 5, 1972, establishing a superior claim to title.
  • Admission of Possession: During cross-examination, the decree-holder explicitly admitted that Balakrishna had constructed a multi-story reinforced concrete (RCC) building on the suit site consisting of ground-floor shops let out to tenants, completely disproving the plaintiff’s initial theory of a recent trespass.
  • Scope of Order XXI Rules 97–101 CPC: The High Court erred in holding that the objector should have filed a separate suit to set aside the decree, ignoring the statutory mandate that execution inquiries under Order XXI Rule 101 are on par with regular suits and explicitly bar separate independent suits.
  • Final Relief Granted: The Supreme Court set aside the High Court’s judgment and the executing court’s order, declared Balakrishna’s legal representatives as the lawful owners and possessors of Site No. 261 (Munnekolala New Extension, Varthur Hobli), and set aside the contrary trial court decree passed in O.S. No. 2198 of 1987.

2026 INSC 1155

Balakrishna (Dead) Thr. LRs. v. G.N. Kanniah Naidu (Dead) Thr. LRs. and Another (D.O.J. 26.10.2026)

2026 INSC 1155 click here to view full text of judgment

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SC Clarifies Limits on Committee of Creditors Withdrawing Approved Resolution Plans

October 27, 2026 No Comments

This civil appeal arose from a challenge to an NCLAT order which rejected the Committee of Creditors’ (CoC) attempt to withdraw its previously approved Resolution Plan on the ground that the Corporate Debtor’s (CD) financial position had vastly improved during the intervening litigation delay. The CoC, backed by the erstwhile promoters offering a One-Time Settlement (OTS), sought a fresh invitation of Expression of Interest (Form-G), whereas the Successful Resolution Applicant (SRA) opposed this, citing the binding nature of the plan under the Insolvency and Bankruptcy Code, 2016 (IBC). The Supreme Court upheld the principle that a CoC-approved resolution plan is binding inter se between the CoC and the SRA, aligning with the precedents in Ebix Singapore and Kalyani Transco. However, declining to interfere with the NCLAT’s directions, the Apex Court directed the Adjudicating Authority (NCLT) to expeditiously consider both the approval application of the Resolution Plan and the holding company’s OTS application, ensuring compliance with Section 30(2) of the IBC while emphasizing that merely improved profitability alone does not invalidate an otherwise lawful resolution plan.

  • Binding Nature of Approved Resolution Plans: Reaffirming the doctrine established in Ebix Singapore (P) Ltd. v. Educomp Solutions Ltd., the Court reiterated that once a resolution plan is approved by the CoC through its voting mechanism, neither the SRA nor the CoC can unilaterally renege from its terms or seek arbitrary withdrawal merely due to changed financial circumstances or delays.
  • Continuation of CoC Existence vs. Power to Withdraw: While the CoC maintains a vital interest in the resolution plan until its actual implementation (as held in Kalyani Transco), this continuing existence does not grant the CoC an open-ended right to bypass statutory discipline, retract its approval, and trigger fresh bidding (Form-G) simply to chase higher valuations or opportunistic settlements.
  • Statutory Mandate of NCLT Examination: The NCLT is obligated under Section 31(1) read with Section 30(2) of the IBC to evaluate whether a plan complies with statutory parameters, ensures fair and equitable distribution, and prioritizes insolvency resolution costs, rather than rejecting a plan solely on the grounds of subsequent cash surpluses or improved corporate earnings.
  • Final Directions: The Supreme Court disposed of the appeal by refusing to overturn the NCLAT’s remand order, directing the NCLT to take up both the Resolution Plan approval application and the holding company’s OTS application concurrently and decide them expeditiously.

2026 INSC 1154

Bank of India & Ors. v. S.M. Kamal Pasha & Ors. (D.O.J. 26.10.2026)

2026 INSC 1154 click here to view full text of judgment

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