Tag: #SupremeCourtofIndia

-Report by Shweta Sabuji

The recent case of PANCHAM LAL PANDEY versus NEERAJ KUMAR MISHRA & ORS., talks about the Uttar Pradesh High Schools and Intermediate Colleges (Payment of Salaries of Teachers and other Employees) Act, 1971 and how section 9, read along with section 10 of the act comes into being.

FACTS: 

Tripathi Ramroop Sanskrit Vidyalaya, located in Jogapur, Kaushambi, Uttar Pradesh, is an established school that provides Sanskrit education from Class I to XII, or what is also known as Uttar Madhyama. The school was granted permanent recognition on February 22, 1999. The Government of Uttar Pradesh has decided to include Sanskrit Vidyalayas and Mahavidyalayas on its Grant-in-Aid List, and has laid out specific criteria for institutions to be included in this list in a G.O. dated February 7, 2014. The State Government has notified a list of institutions that have been included in the Grant-in-Aid List, including Tripathi Ramroop Sanskrit Vidyalaya which is listed as Serial No.47. In relation to the aforementioned institution, the State Government approved five positions for salary payment from the State Exchequer, one for the Headmaster and four for the

Assistant professors. In a circular dated 01.01.2016, the Principal Secretary of the Government of Uttar Pradesh approved the payment of salaries to all instructors at institutions receiving Grant-in-Aid who were actively employed previous to the institution’s inclusion on the Grant-in-Aid list. A different circular, dated 18.03.2016, outlined how the reserve policy should be applied. One of the professors, Satya Prakash Shukla, filed Writ Petition No. 29784 of 2016 before the Lucknow bench of the Allahabad High Court since the aforementioned Circulars were having an impact on some of the teachers.

On the grounds that the Joint Secretary of the Department of Secondary Education had stated that “the payment of salary to the teachers shall be made on the basis of seniority of teachers as disclosed in the Manager’s Return,” the aforementioned Writ Petition was granted by order dated December 21, 2016. Unfortunately, by order dated March 28, 2017, the Director of Secondary Education divided the positions of Assistant Teachers, disregarding the Joint Secretary’s testimony before the High Court, and ordered that Neeraj Kumar Mishra, who was nearly five years younger than Pancham Lal Pandey, be paid a salary. In light of this, the aforementioned Pancham Lal Pandey chose

As a result, the aforementioned Pancham Lal Pandey filed Writ Petition No. 19709 of 2017 to contest the Director of Secondary Education’s order from March 28, 2017. Following a hearing with the parties, the aforementioned writ petition was granted by decision and order dated 15.04.2019, nullifying the order dated 28.03.2017 and directing the authorities to declare Pancham Lal Pandey entitled to payment of salary from the State Exchequer.

PLAINTIFF’S CONTENTION: 

The argument made by the knowledgeable attorney representing the appellant in this case, Pancham Lal Pandey, in challenging the aforementioned order is that the Review Application was not maintainable because Neeraj Kumar Mishra’s Special Appeal was dismissed with no apparent error on the face of the record, and that the review was approved without taking his objections to the maintainability of the application into account.

DEFENDANT’S CONTENTION: 

On the other side, Mr. V.K. Shukla, learned Senior Counsel defended the order on the grounds that the learned Single Judge had made a clear legal error in granting the writ petition and that if the order is left in place, it will continue criminal activity, which is against the law. In light of Section 9 read with Section 10 of the Uttar Pradesh High Schools and Intermediate Colleges (Payment of Salaries of Teachers and other Employees) Act, 1971, the institution is not permitted to create any new post of a teacher or any employee without the prior approval of the Director, so the review petition was properly allowed because there was an apparent error in the order of the Division Bench dismissing the Special Appeal.

JUDGEMENT: 

The Joint Secretary of the Department of Secondary Education stated that teachers’ salaries would be paid based on seniority, therefore the question of teaching was irrelevant. In light of this declaration, the Single Judge granted the writ petition. The institution’s decision to divide the authorized Assistant Teacher positions into subject-based groups is purely an internal decision that imposes no additional burden on the State. Since the school was placed on the Grant-in-Aid list with a Headmaster and four Assistant Teachers in order of seniority, allowing just five people to earn compensation from government funds is legal. The Court did not establish a new position for an assistant teacher at the institution. Because of this, the Writ Court correctly granted the writ petition, and the Division Bench did nothing wrong by rejecting the Special Appeal. We believe that, given the facts and circumstances of the case, the contested ruling, dated February 5, 2021, enabling the review, is illegal and must be reversed.

READ FULL JUDGEMENT: https://bit.ly/3jZEE97

–Report by Arun Bhattacharya

The honourable Supreme Court of India in HAJI ABDUL GANI KHAN & ANR. V UNION OF INDIA & ORS. on Monday 13th of January, 2023 observed that “A Constitutional Court cannot casually interfere with legislation made by a competent Legislature” while dismissing the writ petition filed under Article 32 of the Constitution of India.

FACTS

The legality of the action of forming a Delimitation Commission for the rearrangement of constituencies in the Union territories of Jammu & Kashmir and Ladakh was challenged.
On 5th of August, 2019 a Presidential Order was issued under the powers provided in clause (1) of Article 370 of the Indian Constitution with the objective of application of the Constitution along with its amendments in the state of Jammu & Kashmir. Application of all provisions of Article 370 was discontinued by a subsequent Presidential declaration.

PETITIONER’S CONTENTION

The petitioners’ primary objection was to the increased number of Assembly seats and the subsequent challenge was that the constitution of the Delimitation Commission was in complete violation of the order passed by the Election Commission of India in 2008 (Delimitation of Parliamentary and Assembly Constituencies Order,2008). The petitioners mainly relied on Article 170 of the Indian Constitution which restrained any rearrangement of assembly seats before the first census after the year 2026. Certain other violations by Articles 330,332, 82 and 83 have also contended which may be read in the original judgment but the essential focus was on the violation of the jurisdiction of the Election Commission of India due to the noncompliance with the order of 2008. Further, sections 59 to 63 were also challenged on the ground of contradiction.

RESPONDENT’S CONTENTION

The Union of India represented by the learned Solicitor General highlighted the delay since the delimitation order had already been passed and the said order of the Delimitation Commission was operative from 20th March 2022 and that such an order by a Delimitation commission stands beyond the purview of court’s review jurisdiction according to Section 10 (2). The validity of sections 60 and 62 was highlighted because the Election Commission had already notified the Government of India of the non-necessity of its interference with the rearrangement of constituencies since the same had already been directed to the Delimitation Commission by a letter proving the sections’ non-contradictory nature.

COURT’S CONSIDERATION

The honourable Supreme Court observed a lack of specificity of allegations and since the grounds on which the said Act’s constitutionality may be verified is not mentioned, it fell short of gaining an in-depth reply from the respondent as well as it did not provide the honourable court with enough room for a constitutionality check. The honourable court denied the validity check of the J&K Reorganisation Act and the Presidential Order of 2019 since they were not at all challenged by the petitioners. The Supreme Court observed the legislative action of constituting the Delimitation Commission in compliance with Articles 3, 4 and 239A and pointed out that the argument on Article 170 does not stand since it dealt with the Legislature of a State and not a Union territory. Applying similar legal analogies the sections 60 and 62 of the J&K Reorganisation Act, the apex court completely refuted the question of legality raised about the exercise of delimitation conducted by the Delimitation Commission.
On the question of the legality of the Order of 6th March 2020 the apex court weighed on the fact that statutory interpretation must be by the legislative intent and that a practical approach must be adopted to “make it workable”.

JUDGMENT

Considering all other legal points and dogmas the apex court stated that the petition lacked merits and that it was a ‘vague attempt’ to portray the exercise of delimitation as an illegal affair. Pointing out the non-bearing of this judgment’s observations on other matters which are subject to judicial scrutiny, the court intentionally refrained from weighing on the validity of the exercise of Parliamentary powers and dismissed this petition.

READ FULL JUDGEMENT: https://bit.ly/3Kd0twu

Case Number

Criminal Appeal No. 34 of 2015 (Arising out of Special Leave Petition (Crl.) No. 2961 of 2013), Criminal Appeal No. 35 of 2015 (Arising out of Special Leave Petition (Crl.) No. 3161 of 2013) and Criminal Appeal Nos. 36-37 of 2015 (Arising out of Special Leave Petition (Crl.) No. 3326-3327 of 2013)

Citation

AIR 2015 SC 923 or (2015) 4 SCC 609 

Forum

Supreme Court of India

Bench

H L Dattu CJI., Madan B Lokur, A K Sikri JJ.

Decided on

January 9, 2015

Introduction

The criminal liability of directors is a core concept in corporate criminal law; it helps regulatory authorities and courts control, prosecute and punish crimes of a corporate nature. Given the artificial nature of companies and corporates, it is the employees and executives of the company that act as its agents. Executives are the ones who take the major decisions on behalf of the company. They can easily control the acts and omissions of the company on a short and long-term basis. Given the enormous controlling power that executives possess, it is vital to have laws, regulations and principles governing the actions of these executives. This ensures that they do not violate the law without fear of repercussions and do not use certain concepts of law to evade punishment. 

In the case discussed below, there is a clear explanation of the requirements for holding executives responsible for the acts of their companies, especially in the context of the executives’ names being unlisted in the charge sheet. 

Rule of Law decided upon by the Bench

The rule of law in this case is: 
Section 120-B of the Indian Penal Code, 1860, read with Sections 13(2) and 13(1)(d) of the Prevention of Corruption Act, 1988. 

Facts & Procedural History of the case

The central allegation, in this case, was regarding the 2G spectrum case. An additional spectrum that was beyond the usual spectrum that the Telecom Ministry approves. This approval of an additional spectrum was done with a 1% additional revenue share. Multiple cases had been registered, coupled with investigations by authorities. This transaction caused losses to Government Revenue. It was alleged in multiple investigations that this plan resulted from a conspiracy between Mr Ghosh, the then Telecom Minister and certain Cellular Operators.

The case in question is an appeal against an impugned order by a Special Judge, which had issued a summons to the accused in a charge sheet. This order, passed in March 2013, mentioned that the Special Judge was satisfied with the incriminating material recorded so that a summons could be issued against the accused. The Special Judge also stated that the summons was being issued to three executives – Mr Sunil Mittal of Bharti Cellular Ltd., Mr Asim Ghosh of Hutchison Max Telecom Ltd., and Mr Ravi Ruia of Sterling Cellular Ltd. 

The Special Judge went on to specify the doctrine of ‘alter ego’ and applied the same to this case. He held that these executives (the appellants in the case) are the alter ego of their companies. So through vicarious liability, they shall be prosecuted for the crimes of their companies. It is pertinent to note that the Special Judge mentioned that their state of mind is the companies’ state of mind, and any acts of the companies shall be attributed to them. Notably, he had not mentioned the reasons for issuing an order of summons to the three executives. 

The order was sought to be challenged by two of the three executives, to the extent of the order implicating them as the accused. 

Issues raised in the Court of law

A singular issue was raised. However, the Court opined on a variety of topics concerning the issue below: 

Is the impugned order of the Special Judge, which stated that the Appellants were not named in the charge sheet, valid in law?

The decision of the Court on the issues drafted

The Court decided that the order must be set aside, given the ambiguity in the impugned order and the wrongful application of a principle to the issue at hand. They had also mentioned clearly that they were not stating that the executives were free of guilt; they merely quashed the impugned order. It is up to the Special Judge to review the incriminating material again and issue fresh summons to the Appellants. Based on the evidence uncovered, the Special Judge may apply Section 319 of the Indian Penal Code, 1860, to include the Appellants in the proceedings to prosecute them further. 

Analysis of the judgement

The judgement, which Justice A K Sikri wrote, was systematic in its breakdown of the facts and circumstances of the case, along with an analysis of the principle of alter ego and criticism of its application in the present case. 

Initially, the counsel for the Appellants contended that the impugned order was erroneous in two parts. The first three paragraphs of the order are regarding Mr Ghosh and the cellular companies involved. The Special Judge had perused all the documents submitted on record to conclude that these accused persons can be further proceeded against. In paragraph four, the Judge detailed the principle of alter ego and stated that the executives of the three cellular companies were responsible for the acts of their respective companies. The Judge had connected these paragraphs to conclude that the three executives (two of whom are appellants) must be issued a summons. Explaining all this, Senior Advocate Salve (counsel for the Appellant) stated that the Judge’s order was erroneous and did not hold good in law. 

Continuing, he detailed that the doctrine of ‘alter ego’ has been applied in reverse and that the companies were accused first rather than the directors. For the doctrine to apply, the directors must be held guilty, and so they shall be deemed guilty for the acts of the corporate body. Only when the principle is correctly applied can the agency mode of liability also be applied. For the same, he relied on Iridium India Telecom Ltd. v. Motorola Inc.¹, Maharashtra State Electricity Distribution Co. Ltd. v. Datar Switchgear Ltd.², and Aneeta Hada v. Godfather Travels and Tours Ltd.³, which are all landmark judgements by the Supreme Court of India. 

Sr. Adv. Salve closed his arguments by pointing out that the CBI had investigated and concluded that there was no information or submitted material to implicate the Appellant. 

Other counsels for the Appellants seconded these arguments and mentioned that some of the appellants were not mentioned in the charge sheet in the first place. 

In terms of the arguments for the respondents, Senior Counsel K K Venugopal refuted the appellants’ submissions by bringing to the forefront the reasoning behind the decision to implicate the appellants. He stated that once companies are charged with mens rea offences, they need to be punished for the same, and the only way to do that is to punish their Directors or Officers. He then pointed out the actions of these executives on behalf of their companies, which had resulted in the 2G Scam. In a nutshell, Sr. Adv. Venugopal has reinforced the human agency doctrine and stated that, despite the omission of appellants’ names in the charge sheet, the Special Judge had powers to make an order such as the one in question. 

In support of his arguments, the cases of M C Mehta v. Union of India (Taj Corridor Scam)⁴, Kishun Singh v. State of Bihar⁵ and Dharam Pal v. State of Haryana⁶ were used.  

In a rejoinder, counsel for the Appellant, Mr Fali Nariman, argued that for vicarious liability to be applied, there is a need for a statutory provision or something to be imputed. Therefore, the Special Judge has wrongfully applied the principle of alter ego. 

After listening to the extensive arguments and contentions of the parties, the Court began examining the order and applying the principle of alter ego. 

The Bench refused to discuss the comments made by the appellants concerning the 2G scam itself, making it clear that the matter is beyond the scope of their appeals. 

Firstly, the impugned order was dissected. At the outset, the Court admitted the trial courts could issue that summons to persons not mentioned as accused in the charge sheet. The only requirement is that there must be sufficient incriminating material on record to empower the Judge to issue a summons. The question, in this case, is not about the incriminating material; instead, it is about the lack of a convincing reason behind the Judge’s decision to issue a summons. The Judge has not clearly stated why he had decided to implicate the three executives as accused and issue summons. He had merely stated that the executives were or are in control of their company’s affairs – this makes them the mind and will of the companies and that this makes them the alter ego of their companies. 

Secondly, the doctrine of alter ego was dealt with. The Court reiterated a landmark Judgement from 2005 – Standard Chartered v. Directorate of Enforcement⁷, and explained that the Bench, in that case, opined that companies could be prosecuted and punished for offences with mandatory imprisonment. Then, the Iridium Infra case was discussed, wherein the same subject was discussed, with the addition of mens rea element. The judgement held that the criminal intent would be imputed to the corporate body. That is to say, the group of people controlling the company must have criminal intent, which will implicate the company to have criminal intent and therefore be punished. 

In the case at hand, the company was first held guilty of criminal intent, following which the executives were held to have criminal intent. The Special Judge had applied the principle in reverse – the company’s criminal intent had been established first, and then its executives were implicated. Thus, applying this principle in this manner makes it erroneous to apply the theory of vicarious liability to the case. 

Thirdly, the Court discussed the circumstances when the company is accused, and its executives can also be prosecuted. It is mainly concerning intent that the decision is made. There must be sufficient evidence for the same. In other cases, the statute in question must refer to the vicarious liability of the company’s executives. Cases discussed included Jethsur Surangbhai v. State of Gujarat.⁸, Sham Sunder v. State of Haryana⁹, Hira Lal Hari Lal Bhagwati v. CBI¹⁰ and Sharon Michael v. State of TN¹¹ among others. 

Based on these discussions, the Court concluded that the Special Judge had used an inaccurate principle of law. It is essential to the case that the Judge mention the reasons for his satisfaction with the incriminating material. However, the Judge failed to do the same. 

After making a brief statement on the powers of the Special Judge to issue summons when the accused is not on the charge sheet, the Court went on to conclude its analysis of the case. They held the impugned order invalid in law as the Special Judge failed to adequately explain the reasons or grounds behind his act of proceeding with the case by issuing a summons. Therefore, the impugned order was quashed and set aside, and the appeal was allowed. However, the Special Judge does have the power to revisit the case, review the documents, and prepare a fresh order that lists the reasons for the satisfaction of incriminating material clearly and in a prima facie manner.    

Conclusion

As seen from the case analysis above, Judges and legal professionals must be careful in their acts and omissions, as an error may lead to the entire proceedings being vitiated. While everything else on the part of the Special Judge’s order was abiding by the law, two points left the entire order of a significant financial scandal quashed. Therefore, it is vital that essential points are included in documents and that the law is followed to a T. 

On the other hand, it is equally essential to ensure that executives of companies do not evade punishment on procedural or theoretical grounds. In order to recover money from white-collar crimes, theories of vicarious liability should be prudently applied in relevant circumstances. 

---

Citations

1. Iridium India Telecom Ltd. v. Motorola Inc., (2011) 1 SCC 74 (India)
2. Maharashtra State Electricity Distribution Co. Ltd. v. Datar Switchgear Ltd., (2010) 10 SCC 479 (India)
3. Aneeta Hada v. Godfather Travels and Tours Ltd., (2012) 5 SCC 661 (India)
4. M C Mehta v. Union of India, (2007) 1 SCC 110 (India)
5. Kishun Singh v. State of Bihar, (1993) 2 SCC 16 (India)
6. Dharam Pal v. State of Haryana, (2014) 3 SCC 306 (India)
7. Standard Chartered v. Directorate of Enforcement, (2005) 4 SCC 530 (India)
8. Jethsur Surangbhai v. State of Gujarat, (1984) Supp. SCC 207 (India)
9. Sham Sunder v. State of Haryana, (1989) 4 SCC 630 (India)
10. Hira Lal Hari Lal Bhagwati v. CBI, (2003) 5 SCC 257 (India)
11. Sharon Michael v. State of TN, (2009) 3 SCC 375 (India)

This case analysis is authored by Vibha Chinni Krishnan, a student of Symbiosis Law School, Hyderabad.

–Report by Sneha Sakshi

In Writ Petition (C) No. 740 of 1986, the initial question is whether a Constitution Bench of this Court should re-examine the position it took in Sardar Syedna Taher Saifuddin Saheb v. State of Bombay. The Bombay Protection of Excommunication Act, 1949 (also known as “the Excommunication Act”) was being challenged as being unconstitutional.

FACTS

On the grounds that it violates the fundamental rights protected by Articles 25 and 26 of the Indian Constitution, Sardar Syedna Taher Saifuddin Saheb challenged the Excommunication Act. Excommunication, according to the Constitution Bench, is an essential component of the Dawoodi Bohra community’s management, and interfering with this prerogative constitutes interfering with the community’s freedom to manage its own affairs in issues of religion. As a result, the Act is null and void and violates Article 26(b) of the Constitution.

No excommunication of a member of any community shall be valid or have any effect, according to Section 3 of the Act. Excommunication is defined in Section 2 of the Act as the removal of a person from any society in which he or she is a member, depriving that person of rights and privileges that are legally attainable through a civil lawsuit.

CONTENTIONS OF PETITIONER:

➢ After taking into account the ruling of the Supreme Court in the matter of Sardar Syedna, the Central Board of the Dawoodi Bohra Community petitioned for the issuance of a writ of mandamus ordering the State Government to implement the Ex-communication Act’s provisions. 

➢ A Division Bench ordered that the case be placed before a Bench of seven Judges after issuing “Rule Nisi” in the petition on August 25, 1986.

CONTENTIONS OF RESPONDENT:

➢ Syedna Mufaddal (53rd Daial Mutlaq) submitted a request for a directive requesting that the petition be listed before a Division Bench. ➢ A Constitution Bench received the writ petition. 

➢ The application submitted by the second respondent was partially approved by the Constitution Bench by judgement and order dated December 17, 2004.

JUDGMENT

The petitioners’ knowledgeable senior lawyer, Shri Siddharth Bhatnagar, contended that the Dawoodi Bohra community’s practise of Baraat/ex-communication falls under the definition of “matters of religion” as stated in clause (b) of Article 26 of the Indian Constitution. Additionally, he claimed that even if the Ex-communication Act were to be repealed, it would still be necessary to determine whether the practise of ex-communication is regarded as a matter of religion because the 2nd Respondent, Syedna Mufaddal, serves as both the religious Head and the Trustee of the community property. Finally, he claimed that morality affects the rights protected by Article 26 and that this Court’s decisions have helped to clarify what morality is.

The case Indian Young Lawyers Association & Ors. v. Sabrimala Temple, concluded that the excommunication practise in the Dawoodi Bohra community violates Articles 17, 19, 21, and 25 of the Indian Constitution and cannot, therefore, be protected by Article 26 of the Constitution.

In the Sardar Syedna case, the Constitution Bench did not attempt to strike a balance between the rights under Article 26(b) and other rights under Part III, particularly Article 21.

The Sabrimala Temple Review ­a bench of nine judges is debating this matter in large part. Additionally, as the practise of excommunication is subject to morality, it is important to determine if Article 26(protection)’s of it may be put to the test. To do this, it is important to use the concept of constitutional morality as a yardstick. This is an urgent, crucial problem. The abovementioned judgement may need to be reviewed by a larger Bench on these two key grounds.

In light of the situation, it is believed that the current writ petition merits being included in the Review Petition (Civil) No.3358 of 2018 that is currently being heard by a bench of nine honourable judges. As a result, it is directed that the Registry ask the Honorable Chief Justice for the necessary instructions in this regard.

READ FULL JUDGEMENT: https://bit.ly/3Iitbuz

-Report by Saloni Agarwal

The Supreme Court of India recently in the case of Gas Authority of India Limited v Indian Petrochemicals Corp. Ltd. & Ors concluded the dispute between parties relating to the contract signed for natural gas supply. The case was in favour of IPCL as its claim was just.

Facts:

The Ministry of Petroleum and Natural Gas provided a letter for the allocation of a Natural Gas Pipeline to IPCL. The contract was to be signed with GAIL and the pipeline would be from Hazira to the Gandhar unit carrying semi-rich gas. IPCL was asked to lay down the plant and a pipeline of its own which would be used to transport the gas. GAIL claimed that it was being charged with transportation costs. The clauses of the contract were clear that the buyer has to bear all the charges of transportation for himself and the seller. The main point of argument is the transportation cost dispute.

Appellant’s Contention:

IPCL claimed that the price of natural gas should be fixed as mentioned in the contract. Earlier the High Court had charged IPCL to pay for the loss of transportation charges which was unfair as IPCL was asked to set up its own pipeline. Even after incurring a huge cost for the establishment, it would otherwise be unjust to pay for the transportation cost. The IPCL also claimed that it had no bargaining power and was asked to accept the contract within 60 days by the Authorities i.e., comes within the ambit of Article 12. Due to time constraints and unrestricted power possessed by GAIL, it dominated the clauses of the contract. Hence the writ petition is maintainable.

Respondent’s Contention:

The GAIL challenged the petition and claimed that the clauses were not unjust. It also claimed that it did not possess any dominating position and that equal rights were provided to both parties. It further said that the contract was a mutual one and was carefully discussed before the implementation.

Judgement:

The Court after hearing about the sides came to the conclusion that the writ petition was maintainable. It also said that there was unjust and unfairness in the contract and asked GAIL to refund the loss of transportation charges within two months failing which interest amounting to 8 per cent per annum will be charged. The IPCL had incurred huge costs in building the pipeline which was mandated in the contract and now cannot be burdened with the establishment cost and transport cost even when it is not using the HBJ Pipeline.

READ FULL JUDGEMENT: https://bit.ly/3YwTTou

–Report by Shweta Sabuji

The appeal in the case of ITC LIMITED Vs. AASHNA ROY was made under Section 23 of the Consumer Protection Act of 1986. It questions the validity of the decision made by the National Consumer Disputes Redressal Commission in Consumer Complaint No.1619/18 between Aashna Roy and Yogesh Deveshwar and another in which the consumer’s rights were communicated.

FACTS:

On April 12, 2018, the respondent went to the ITC Maurya Hotel’s saloon for hair styling so that she would look presentable and well-groomed when she appeared before the interview panel a week later. She asked for Ms Alem, the hairdresser who had previously cut her hair on several occasions when she had visited the saloon. Since Ms Alem was unavailable, the respondent’s hair was styled by Ms Christine, a different hairstylist. The respondent, who had previously expressed dissatisfaction with Ms Christine’s services, agreed to hire her after the saloon’s manager assured her that Ms Christine had significantly improved her performance over some time.

The reply specifically instructed the mentioned hair stylist to “length flicks/layers covering her face in the front and at the back and 4-inch straight hair trim from the bottom,” using those exact words. The respondent was told to keep her head down since she was wearing high-powered glasses, which were taken off for the hairstyling process, and she was unable to view herself in the mirror to see what the hairdresser was doing. The respondent claimed that the directions were straightforward and would not require much time, but when the hair stylist spent more than an hour styling the subject’s hair, the respondent questioned why.

The hairstylist responded by telling her that she was giving her “the London Haircut.” When the hair styling was finished, she was shocked to see that the hair stylist, Ms Christine, had completely chopped off her hair, leaving only 4 inches from the top and barely brushing her shoulders, which was quite the opposite of what she had requested. She voiced her complaint to Mr Gurpreet Acharya, the saloon manager, right away. The Manager did not present a bill because she had complained, so she did. She was, however, so irritated and angry that she left the saloon.

Later, the saloon offered the respondent services for free treatment and hair extensions for the interview, and it appears that she accepted both offers. To extend its offerings, the salon hired an outside technical hair specialist from MoeHair (an international brand). She was instructed to repeat the procedure two to three more times. On March 5, 2018, the respondent underwent hair treatment once more. She was told that Ms Alem would supervise Mr Vicky, the on-staff hairdresser, as he performed the procedure. The respondent was informed that Mr Vicky was a highly skilled hair stylist with training. It ends up being a disaster for the respondent once more. Her hair and scalp were severely damaged during the treatment because too much ammonia was utilized, which caused intense scalp burning and irritation.

PLAINTIFF’S CONTENTIONS

The appellant, who was positioned as Opposite Party No. 2 before the NCDRC, raised several issues in separate written objections, including doubting the respondent’s status as a consumer given the free services provided; the compensation claim was extremely excessive; no documentary evidence had been presented to support such a large claim; and the complaint should be dismissed for lack of pecuniary jurisdiction. The appellant presented its argument even on the merits. The respondent also submitted a response affidavit to the NCDRC. Affidavits were used to present the evidence by both parties. Additional photos, CCTV footage, social media talks, and other materials were also included in the package.

DEFENDANT’S CONTENTIONS

The NCDRC determined that the respondent’s hair had been cut shorter than she had requested. Additionally, it noted a conclusion that the respondent’s appearance may have changed as a result of poor hair styling. The NCDRC further determined that the appellant had been careless in how it treated the respondent’s hair and had also damaged the respondent’s scalp. After then, the NCDRC handled the quantification of the compensation.

JUDGEMENT

In the aforementioned ruling, the National Consumer Disputes Redressal Commission accepted the solitary respondent’s complaint and ordered the present appellant, who is Opposite Party No. 2, to pay compensation in the amount of Rs. 2 crores to the NCDRC.

READ FULL JUDGEMENT: https://bit.ly/3DRwsOU

As the definition of the word says, defamation is hurt to a person’s reputation caused by a false statement. A man’s reputation is recognized as his property, and anyone who causes property damage is liable under the law; similarly, anyone who harms a person’s reputation is equally liable under the law. According to Black’s Law Dictionary, defamation means the offence of injuring a person’s character, fame, or reputation by false and malicious statements. The term includes both libel and slander. Defamation is a statement published that negatively affects a person’s reputation and tends to reduce his reputation among generally right-thinking members of society or to cause people to avoid or shun him.[1]

In English law, there is a distinction between the forms under the categories of criminal defamation and civil defamation. Under criminal law, libel is an offence. Slander is not an offence under criminal law. Slander is a crime when supported by evidence, unlike libel, which is a crime under civil law but not under criminal law.

In Indian law, both slander and libel are recognized as criminal offences under Section 499 of IPC and no distinction is maintained between them[2]. In the law of torts, libel is actionable per se and slander is actionable. It implies that there must be evidence of defamation in a suit for slander.

In the case of D.P. Choudhary v Kumari Manjulata, defamatory news about Manjulata, a 17-year-old girl from a prominent family, eloping with a neighbour was published in the daily newspaper “Dainik Navjyoti”. As a result, her reputation was damaged and she experienced great humiliation because this information was recklessly and falsely reported. The Court held that the words published were defamatory and actionable per se and thus she was entitled to damages of Rs. 10000 [3].

ESSENTIAL CHARACTERISTICS OF DEFAMATION

1. The argument made or published must be defamatory.

The statement made or published must be defamatory i.e. which tends to lower the plaintiff’s reputation. Whether or whether a comment is defamatory will rely on how the general public, who are right-thinking people, are likely to interpret it.

In Arun Jaitley v Arvind Kejriwal,[4] the court held the statement by Arvind Kejriwal and his 5 other leaders to be defamatory.

In Ram Jethmalani v Subramanian Swamy,[5]the court determined that Dr Swamy was responsible for defaming Mr Jethmalani by alleging that Mr Jethmalani had accepted money from a prohibited organisation to defend the then-chief minister of Tamil Nadu in the Rajiv Gandhi assassination case.

2. It must refer to the plaintiff.

In a defamation lawsuit, the plaintiff must show that the comment in question referred to him; whether or not the defendant intended to defame the plaintiff is irrelevant. The defendant shall be held accountable if the person to whom the statement was published may reasonably infer that the statement was addressed to him.

In the case of T V Ramasubha Iyer v A.M.A Mohindeen,[6] The court found the defendants guilty of publishing a statement that was not intended to disparage them. According to the statement, a specific person transporting Agarbattis goods to Ceylon was detained for smuggling. The plaintiff was also one of the people carrying on a similar business, and due to this statement, his reputation was also severely damaged.

3. The imputation must have been made with the intent to injure and with understanding or reason to believe it would harm the person’s credibility.

The essence of the offence of defamation is the harm caused to a person’s reputation. In Sunilakhya v H M Jadwet,[7] the Court stated that the intention to cause harm to the reputation of a person is the sine qua non of the offence of defamation.

In Wahid Ullah Ahrari v Emperor,[8] the appellant was responsible for publishing two articles in a paper called the “University Punch”, Aligarh which contained scandalous accusations against the girls of the Girls’ Intermediate College of Aligarh. For solace and enjoyment, it was claimed that the college’s female students frequented the broad Marris Road, green meadows, and canal banks. It was also claimed that the Meena Bazar Exhibition was held within the college’s grounds and that university students, professors, Muslim and non-Muslim members of the local gentry, as well as gay officers, visited the location after purchasing tickets to go shopping with the female students. The essence of the offence of defamation is the publication of imputation with the knowledge that it will harm the reputation of the person defamed, and as these articles do beyond question imply that the girls of the college are habitually guilty of the misbehaviour described in the articles, the inevitable effect on the reader must be to make him believe that it is habitual with the girls of college to behave in this way. Thus, the Appellate Court upheld the order of the Lower Court and held the appellant guilty of defamation.

4. The statement must be made public, meaning it must be shared with at least one person other than the applicant.

The publication of defamatory statements to someone other than the individual who has been defamed is crucial in holding someone accountable. Without it, no defamation case will be possible. If a third party reads a letter intended for the plaintiff incorrectly, the defendant will likely be held accountable. However, there will be a legal publication if the defamatory letter written to the plaintiff is likely to be read by others.

In the case of Mahendra Ram v Harnandan Prasad,[9] the plaintiff filed a suit for the realization of Rs. 500/- as damages for defamation of the plaintiff by the defendant. The plaintiff’s case is that he is a respectable man and a man of substantial means and is held in esteem and regard by the public. He lived in a rented house belonging to the defendant who mainly resided in Sultanpur. The defendant sent a registered notice in Urdu from Sultanpur to the plaintiff at Siwan. The plaintiff was not conversant with Urdu and, therefore, got the notice read over by one Kurban Ali in the presence of several other persons. The notice contained defamatory and false allegations against him. The defamatory statement lowered the plaintiff’s estimation of the public and harmed his reputation. The plaintiff’s inability to read Urdu, which required that he have the letter read to him by someone else, was not enough to hold the defendant directly or constructively liable for publishing. Because it was unproven that the defendant intended to harm the plaintiff’s reputation and that he was aware that the plaintiff did not speak Urdu, the court determined that the defendant was not responsible for any damages.

When a passage appears to be innocent prima facie, the complaint can demonstrate that it disparages him by pointing to the context and nature of the publication. Innuendo is the justification given for why a statement is considered defamatory.[10]

Innuendo is a way to speak negative sentences in a very sarcastic or ironic way, which may appear to be positive but is not.

Illustration: X asks Z, “Do you know who stole B’s watch?

Z in return pointed at C and said, “well you know, who can”. This is innuendo as it was sarcastically said by Z while pointing at C. Under Section 499, defaming any person by innuendo is a form of criminal defamation.

Intention to defame is not necessary- Though the person about whom the statement is made thinks it is defamatory, even if the person making the statement thinks it is not, there has been defamation. The fact that the defendants were unaware of the circumstances giving rise to the accusations of defamation despite the statements’ innocence is irrelevant.

In Morrison v. Rithie & Co.,[11] in good faith, the defendants falsely reported that the plaintiff had given birth to twins. The plaintiff had only recently been married. The defendants were held liable even though they were unaware of this fact.

In another case,[12] the plaintiff filed a suit seeking a declaration that the resolution passed by the defendants with regard to the management of the affairs of a school was illegal. The statement also insulated that there was a doubtful relationship between ‘K’ and the plaintiff. According to the Karnataka High Court, the plaintiff’s moral character was attacked by the statements because they implied that she had engaged in dishonourable conduct by engaging in dubious relationships and activities with another person.

REMEDIES TO DEFAMATION

Every infringement of rights gives rise to a remedy. The Latin maxim ubi jus ibi remedium enunciates this. There are three defences available to defamation. These are as follows:

1. Justification or Truth

Simply demonstrating the veracity of a claim is not a valid defence in criminal law, but it is so in civil law. In Alexander v. N.E. Rly,[13] the plaintiff had been found guilty of boarding a train out of Leeds without possessing a valid ticket. If he did not pay the fine, he was subject to a fine and a fourteen-day jail sentence. However, after the verdict, the defendant published a notice stating that the plaintiff had been found guilty and given a fine or three weeks in imprisonment in the event of default. The plaintiff claimed that the defendant had lied by falsely reporting the punishment given to him.

In Radheshyam Tiwari v. Eknath,[14] the plaintiff, a block development officer, was the subject of several articles written by the defendant, a newspaper publisher, editor, and printer, alleging that the plaintiff had used unethical and corrupt tactics in a range of cases, including issuing false certificates, taking bribes, and accepting bribes. The defendant was found responsible for defamation because he could not prove that the information he published was truthful.

2. Fair Comment

The comment must be an opinion rather than an assertion of fact. The comment must be fair i.e., without malice. The matter commented upon must be of public interest. It is also essential that the facts commented upon must be either known to the audience addressed or the commentator should make it known along with his comment.

In R.K. Karnajia v. Thackersey,[15] the court held that if the defendant cannot establish the accuracy of a statement of facts published in a newspaper and makes significant accusations of dishonesty and corruption against the plaintiff, the defence of fair comment is predicated on those inaccurate facts, will also fail.

3. Privilege

Privilege confers exceptional status. When the law accepts that the plaintiff’s right to free expression surpasses his or her right against defamation, a defamatory statement uttered on such an occasion is not actionable. There are two categories of privileges.

1. Absolute privilege: In some instances, the individual speaking is given immunity, and no defamation action can be brought against him. It has three components.

• Parliamentary proceedings: Article 105(2) of the Indian Constitution grants parliamentarians immunity from prosecution if they talk freely during the parliamentary business.
• Judicial proceedings: Judges are protected under the Judicial Officers Protection Act of 1850. It also applies to attorneys, witnesses, and defendants in a lawsuit.

In T.G. Nair v. Melepurath Sankunni,[16] Whether a petition to the Executive Magistrate for the purpose of initiating legal proceedings under section 107 of the Criminal Procedure Code and simultaneously sending a copy to the Sub-Inspector of Police for the purpose of taking executive action fell under the purview of the defence of absolute privilege arose. The plaintiff sued the defendant for defamation. The court held that the statements made by the defendant in the petition presented to the magistrate and in the copy thereof which he presented to the Sub-Inspector of Police are both privileged.

2. Qualified privilege: This privilege is also available, but it requires that the statement be made without malice, i.e., without a wrongful intention. It is further necessary that there must be an occasion for making the statement.

ANALYSIS OF ARTICLE 19: FREEDOM OF SPEECH AND EXPRESSION

Freedom of Speech and Expression is one of the most fundamental aspects of a democratic democracy because it allows citizens to participate fully and effectively in the country’s social and political activities. People can share their thoughts and political perspectives due to freedom of speech and expression. It eventually leads to societal and economic well-being.

In the State of West Bengal v Subodh Gopal Bose, the court determined that the State has a responsibility to protect itself against unlawful activities and, as a result, can enact laws to that end. Article 19(1)(a) establishes a limited privilege. There cannot be any liberty that is unrestricted in nature and unregulated in practice to confer an unrestricted right.[17]

In the case of S Rangarajan v Jagjivan Ram,[18] it was held that the Court should bear in mind that restriction should be founded on the principle of least invasiveness, i.e. the restriction should be imposed in a manner and that an individual has the right to a good reputation and should not be subjected to a defamatory circumstance.

Subramanian Swamy v Union of India[19]

Justice Dipak Mishra and Justice P.C. Pant of the Supreme Court upheld the constitutional validity of the country’s criminal defamation laws enshrined under Sections 499 and 500 of the Indian Penal Code, saying that they do not interfere with the right to free expression. Several leaders and media houses suggested that it would limit freedom of expression. There is enough evidence to believe that the ruling is a blatant violation of free expression. Article 19 (2) of the Indian Constitution set reasonable limits on freedom of expression to prevent defamation. However, whether the provision covers criminal and civil defamation is unclear.

R Rajagopal v. State of Tamil Nadu[20]

This case dealt with the constitutionality of civil defamation. The Supreme Court of India cited a historic US Supreme Court ruling in New York Times v. Sullivan [21]in this case, which stated that a government official on duty can only recover damages if the truth argument is false and there is a willful disregard for the truth. The court considered the relationship between free speech and civil defamation in this decision. In view of the court, Article 19(1) of the Constitution imposes an unfair restriction on common law defamation.

CONCLUSION

After evaluating all of the significant features of defamation, we observe that the essence of defamation is the injury to a person’s reputation, and he has a good argument against the defendants for this injury. Libel and slander are the two types of defamation. Under Indian law, both are considered criminal offences. Certain privilege exceptions to this rule can protect the defendant from criminal liability.

It signifies that the Indian Constitution has given citizens certain rights, which they should exercise in moderation so as not to infringe on the rights of others. Defamation provisions operate as a check on Article 19 of the Constitution to protect people’s reputations.

---

References

[1] Peel W.E. & Goudkamp J., Winfield & Jolowicz on Tort 360 (Sweet & Maxwell, 19th edn., 2014).
[2] Parvathi v. Mannar, (1884) ILR 8 Mad 175.
[3] AIR 1997 Raj 170.
[4] CS(OS) 236/2017.
[5] A.I.R. 2006 Delhi 300.
[6] A.I.R. 1972 Mad 398.
[7] A.I.R. 1968 Cal 266.
[8] A.I.R. 1935 All 743.
[9] A.I.R. 1958 Pat 445.
[10] PILLAI PSA & VIBHUTE K I, CRIMINAL LAW  1050 (LexisNexis, 14th ed. 2019).
[11] (1902) 4 F. 654.
[12] B.M. Thimmaiah v. T.M. Rukimini, A.I.R. 2013 Kar. 81.
[13] (1865) 6 B&S 340.
[14] A.I.R. 1985 Bom. 285.
[15] A.I.R. 1970 Bom. 424.
[16] A.I.R. 1971 Ker. 280.
[17] A.I.R. 1954 S.C. 92.
[18] (1989) S.C.C. 2 574.
[19] WRIT PETITION (CRIMINAL) NO. 184 OF 2014.
[20] A.I.R.1995 S.C. 264.
[21] 376 U.S. 254 (1964).

This article has been written by Nashrah Fatma, a third-year law student at the Faculty of Law, Jamia Millia Islamia.

–Report by Eshna Ray

The petitioner in the case of Ashwini Kumar Upadhyay Vs. Union of India and Another, challenged the constitutional validity of Section 33(7) of the Representation of the People Act 1951, which allows a person to contest an election for the same office from more than one constituency simultaneously. The petition seeks direction from the court to the Central government and the Election Commission to take appropriate steps to prevent this practice. The basis for the challenge is the Chief Election Commissioner’s request to the Prime Minister in 2004 to amend the act and the Law Commission’s 255th Report opinion that the act should be amended to restrict a person from contesting from multiple seats at a time. The petition is filed under Article 32 of the Constitution.

Facts:

The petitioner filed a petition to challenge the validity of Section 33(7) of the Representation of the People Act 1951, which allows a person to contest from more than one constituency for the same office simultaneously. The Law Commission in its 255th Report recommended amending the act to prevent this. The Election Commission of India and the Union of India filed counter-affidavits. The court heard arguments from both parties and the Attorney General for India. The court noted that the provision falls under the legislative domain and can only be challenged if there is a violation of a Fundamental Right or if the legislature lacks the competence to enact a law. Permitting a candidate to contest from more than one seat in a Parliamentary or State Legislative Assembly election is a matter of legislative policy, determined by Parliament. The court found no manifest arbitrariness in the provision or violation of Article 19 and concluded that the provision cannot be struck down as unconstitutional. The petition was therefore dismissed.

Plaintiff’s Contention:

The petitioner argues that contesting from multiple constituencies for the same office undermines the right of citizens to know about a candidate’s character, qualifications, and criminal record, as stated in Article 19 of the Constitution. When a candidate is elected from multiple seats, they have to vacate one, leading to a financial burden on the public and depriving the electorate of representation. The petitioner contends that this deprives the electorate of their right to know, as stated in Article 19(1)(a), and that this legislative issue should be addressed to prevent a drain on public resources through bye-elections. The contention is that the current provision allowing multiple constituencies is invalid.

Defendant’s Contention:

The defendant argues that the provision in the Representation of the People Act 1951 that allows a person to contest from more than one constituency for the same office simultaneously is a matter of legislative policy. It is within the legislative authority of Parliament to make the decision and enact or amend legislation. The defendant argues that unless there is manifest arbitrariness or a violation of a Fundamental Right in the provision, the Court cannot strike it down as unconstitutional. The defendant also mentions that Parliament has already intervened in the form of Act 21 of 1996 which restricts a candidate’s choice for an electoral contest to two seats in one and the same election.

Judgment:

The petition challenging the validity of Section 33(7) of the Representation of the People Act 1951, which permits a candidate to contest from more than one constituency in the same election, has been dismissed by the court. The court held that this provision, allowing a candidate to contest from multiple seats, is a matter of legislative policy and within the discretion of Parliament. The court stated that a statutory provision can only be struck down if it is made by a legislature lacking the competence to enact a law or if there is a violation of a fundamental right. In this case, the provision does not violate any fundamental rights, and therefore, the court cannot interfere with it. The Parliament has the authority to make legislative choices, and it has intervened in the past by restricting the choice of a candidate to two seats in the same election.

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–Report by Umang Kanwat

Issues only arise when one party affirms and the other party disputes a crucial truth or legal premise. The legal or factual assertions are considered material propositions. Such essential claims must be made by the plaintiff to establish his legal standing. Similarly, the defendant must allege to support his defence. A distinct issue won’t arise unless each relevant statement is supported by the plaintiff and refuted by the defendant.

The Court may revise already-framed questions, frame new issues, recast matters as may be necessary to resolve a dispute before it, or strike out concerns that have been improperly brought or formed, according to Order XIV Rule 5 of the CPC. As a result, the Court has the power to alter or eliminate the concerns as necessary.

The case of PRIME TIME INDIA Vs. SOMNATH VIJ revolves around Order XIV Rule 5 of the CPC, wherein the court tries to evaluate if the contentions on which the applicant argues are satisfactory or not. The word “issue” has not been defined in the CPC, however, Order XIV Rule 1 of the CPC indicates that “issues arise when a material proposition of fact or law is affirmed by one party and denied by the other”.

Facts: 

The applicant in the present case filed an application requesting the Honourable Supreme Court of India to remove certain legal issues framed by the defendants in the case considering them to be baseless and motionless under Order XIV Rule 5 of CPC. The application is based on a previous case over a disputed property where the present applicant was the defendant and the case ended with a settlement between the parties.

Applicant’s Contentions:

The applicant has filled out this application regarding striking off certain issues that were framed in the case over a property dispute. According to the applicant they agreed on the settlement and hence these issues in the aforementioned suit consequently sabotaged the interest of the applicant. Based on the joint application filed dismissing the objections to the settlement terms, this was done with malice aforethought. 

Defendant’s Contentions:

The defendant argued that the applicant filed the case even though it is unauthorized to do so. The defendants acknowledged that their culpability for the applicant’s claim had been reduced, and they would not object if the settlement included a decision granting the applicant’s request for specific performance. The present application under Order XIV Rule 5 read with Section 151 CPC was not submitted with a board resolution and was not embossed with the company’s seal; as a result, it is subject to being rejected simply on this basis. The applicant also violated the court’s order by adding construction to the disputed property and so the defendant has a right to take legal action against the applicant. 

The court made no mistake in the framing of the issues the issues were framed by the applicant who was previously the defendant’s pleadings.

JUDGEMENT:

The application was rejected because it had no merit. 

This was because the court believed that the legal concerns or issues raised by the Defendants’ arguments, which were requested to be deleted through the present application, were relevant for the adjudication of the current lawsuit.

Furthermore, an issue is a topic of contention between the parties in a civil lawsuit. Additionally, when parties differ on “material propositions” of truth or law, a problem arises. An issue that can limit the scope of disagreement may be presented to identify the genuine dispute and resolve it. In this instance, it was clear that the Court’s prior bench had given proper consideration to all pertinent arguments, including the compromise decree while framing the problems.

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-Report by Kontheti Subrahmanya Sai Lakshmi Anuhya 

In the recent judgment of K. L. SUNEJA & ANR. Vs. DR. (MRS.) MANJEET KAUR MONGA (D) THROUGH HER LR & ANR., issued by a two-judge bench of the Supreme Court, an order was passed directing all courts and judicial bodies to establish rules to guarantee that sums paid to the office or registry of the courts or tribunals be invariably deposited in a bank or other financial institution. The directive was given to ensure that litigants would never lose interest in money deposited with courts or tribunals in the future.

Facts

1. In the current case, Smt. Gursharan Kaur (Complainant) was pursuing a case against a Developer for delaying the allotment of a property to the Complainant. After paying up to six instalments, the Complainant declined to pay additional instalments, citing a delay in completion progress. The Developer revoked the allotment on April 30, 2005. Along with the Cancellation Letter, the Developer encloses a Pay Order dated 30-04-2005 for Rs. 4,53,750/- issued by Citibank in the full repayment of the Complainant’s payments.
2. Dissatisfied with the withdrawal of the allocation, the Complainant filed a Complaint under Section 36 of the then Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) before the previous Monopolies and Restrictive Trade Practices (MRTP) Commission insinuating unfair trade practices by the Developer and seeking custody of the flat. The Complainant declined the reimbursement and did not cash the Pay Order. The Pay Order was also included in the Petition lodged with MRTP.
3. However, while the case was pending, the Competition Act 2002 went into effect on September 1, 2009, thus repealing the MRTP Act. As a result, the MRTP Commission’s cases were transferred to the previous Competition Appellate Tribunal (COMPAT).

PLAINTIFF’S CONTENTIONS

• It was argued that NCLAT erred in failing to recognize that as the complainant’s legal team did not receive the reimbursement of the amount of 4,53,750/- from the developer until 7th May 2016, the interest on the said principal amount should have operated from 4th October 1993 until the date of implementation of the amount, which was 7th May 2016.
• It was asserted that after the Tribunal determined that the developer was at fault. a decision upheld by this court, which held that the complainant was obligated to compensation in the form of compound interest.
• It was argued that the developer’s claim that the money had been taken from its account and that it was unaware of the initial Pay Order filing could not be accepted. Furthermore, learned counsel stated that the developer took full advantage of the complainant’s deposits and, after cancelling the sale, quickly assigned the property to another customer for a significantly greater sum of 21 lakhs. 

 DEFENDANT’S CONTENTIONS

• The developer argued, both in answer to the complainant’s appeal and in its own appeal, that no blame could be assigned to it and that it could not be held liable once the complainant got the Pay Order dated 30th April 2005. Senior attorney for the developer argued that the inquiry was strictly limited to whether any obligation arose owing to any fault or shortcoming on its part after April 2005, given that the Pay Order was not encased by the complaint. In this regard, it was asserted that Citibank had unequivocally stated that the money was withdrawn from the developer’s account after the Pay Order was placed.
• It was contended that the Pay Order was in the MRTP Commission’s file and so authorized its recertification. In these instances, the developer addressed the Commission, leading in the instrument’s verification and eventual giving over to the complainant.
• Legal representatives for the developer claimed that once the money in dispute was settled through the bank (i.e., through an instrument payment, such as a Pay Order, the responsibility would stop. The developer’s counsel relied on the rulings in Hindustan Paper Corporation Ltd vs. Ananta Bhattacharjee.

Judgment/Conclusion:

Accordingly, the Apex Court said that the Complainant should have taken either of the following actions given the observations mentioned above:

She may have asked to deposit the Pay Order earnings in an account handled by the MRTP Commission Registrar. She may have asked for a “without prejudice” order, allowing her to cash the money and preventing the denial of her claim.

She might have also sought appropriate directions that the Developer keep the sum, who could then be instructed to pay the principal plus such interest as the MRTP Commission or the Tribunal judged reasonable and in the interests of justice. As none of these options was chosen, and because the money in question was unquestionably deducted from the Developer’s Current Account, the Apex Court ruled that the Developer cannot be held accountable for paying interest on the Pay Order amount of Rs. 4,53,750/- beyond 30-04-2005. As a result, the Developer’s Appeal was granted, while the Complainant’s Appeal was denied.

All these data made it abundantly evident that the developer was not at fault; in fact, the complaint confirmed receiving the Pay Order that the developer had returned in a letter dated September 26, 2005. The complaint’s database and the evidence presented with it include no mention of or reference to the original Pay Order, according to learned counsel who cited the pleadings before the MRTP Commission.

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