ALS

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Category: LEGAL

  • Supreme Court: Being a B.Tech Graduate Does Not Entitle an NDPS Accused to Bail

    Supreme Court: Being a B.Tech Graduate Does Not Entitle an NDPS Accused to Bail

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 27.10.2026

    Supreme Court: Being a B.Tech Graduate Does Not Entitle an NDPS Accused to Bail

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Supreme Court of India cancelled the bail granted to Prateek Shukla, holding that the Allahabad High Court had not properly applied the stringent bail standards required under the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act).

    Background of the case

    The case arose from an investigation by the Narcotics Control Bureau (NCB) into suspected diversion of acetic anhydride, a controlled substance that can be used in the illicit manufacture of narcotic drugs. In October 2018, the NCB received information that Altruist Chemicals Private Limited had purchased a substantial quantity of acetic anhydride but had not filed the required quarterly returns for two reporting periods.

    During searches connected with the company, the NCB alleged that it recovered 896 grams of acetic anhydride and 1.885 kg of amphetamine from the company’s registered premises. Investigators also found documents relating to Griffin International, of which Prateek Shukla and Afghan national Bismillah Khan Ahmadzai were stated to be directors.

    The investigation subsequently extended to a godown in Karheda village, Ghaziabad, where the NCB alleged that it recovered 9,650 kg of acetic anhydride along with empty drums. A search of Shukla’s residence allegedly yielded company stamps, banking documents, business papers and other material said to connect multiple entities and co-accused persons.

    Allegations and prosecution case

    The NCB’s complaint alleged that the accused were part of an international drug syndicate involved in the diversion, storage, sale, purchase and export of the controlled substance. Shukla was arrested on 22 October 2018 and was charged under Sections 8, 9A, 25A, 23 and 29 of the NDPS Act.

    The prosecution argued that the material recovered during the investigation established a prima facie connection between Shukla and the alleged conspiracy. It also contended that, given the gravity of NDPS offences, the High Court had granted bail without adequate reasons or proper consideration of the statutory restrictions in Section 37 of the NDPS Act.

    Defence raised by the respondent

    Shukla maintained that he had resigned as a director of Altruist Chemicals on 4 May 2018, after joining the company earlier that year. He argued that the relevant purchases and deliveries of acetic anhydride took place after his resignation and that he had informed the NCB of his departure from the company on 22 May 2018.

    He further contended that he could not be held responsible for the company’s later failure to submit quarterly returns. The High Court accepted his bail plea, observing prima facie that he may not be guilty, while also referring to his clean background and educational qualification.

    Why the Supreme Court intervened

    The Supreme Court found that the High Court’s reasoning did not demonstrate judicial consideration of the seriousness of the allegations or the legal test governing bail under Section 37 of the NDPS Act. It emphasized that merely noting the parties’ submissions is not enough; a bail order must show a reasoned application of the statutory standards.

    The Court specifically criticized the High Court’s reliance on Shukla being educated and holding a Bachelor of Technology degree as a reason to conclude that he was unlikely to commit an offence in the future. It held that this was an extraneous consideration in an NDPS bail decision.

    The Supreme Court also noted that the prosecution’s materials showed Shukla as a director of Altruist Chemicals, while his own bail application referred to transferring 99% of his shareholding to Bismillah Khan Ahmadzai. The Court observed that the respondent’s materials appeared to suppress more than they disclosed, though it did not decide the criminal charges at this stage.

    Supreme Court’s decision

    Allowing the Union of India’s appeal, the Supreme Court set aside the Allahabad High Court’s order dated 7 May 2019. Shukla’s bail was cancelled, and he was directed to surrender immediately.

    Legal significance

    The ruling underscores that bail in serious NDPS cases cannot rest on general observations about an accused person’s education, background or future conduct. Courts must apply the specific statutory safeguards under Section 37 and give reasons that engage with the allegations, the evidence and the gravity of the offence.

    The decision reinforces the Supreme Court’s expectation that bail orders in narcotics cases reflect a careful and legally grounded assessment rather than a cursory evaluation.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Supreme Court

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    Ravi Shekhar Jha – Advocate, Bar Council of Delhi

  • Supreme Court: Narcotics Need Not Be Recovered from Accused’s Body to Establish Conscious Possession

    Supreme Court: Narcotics Need Not Be Recovered from Accused’s Body to Establish Conscious Possession

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 26.10.2026

    Supreme Court: Narcotics Need Not Be Recovered from Accused’s Body to Establish Conscious Possession

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Supreme Court of India upheld Jeet Ram’s conviction for possessing 13 kg of charas under the NDPS Act, while reducing his sentence from 15 years’ rigorous imprisonment to 10 years because of the case’s age and his advanced age.

    Background of the case

    The case arose from an operation by officers of the Narcotics Control Bureau (NCB), Chandigarh, on 18 June 2001 near the Nangala Devi Temple in Himachal Pradesh. According to the prosecution, NCB officers stopped at a roadside dhaba while travelling from Shimla to Theog. They said they detected the smell of charas and questioned Jeet Ram, who was present at the establishment.

    The officers alleged that Jeet Ram became nervous and attempted to flee. A gunny bag found beneath the dhaba counter was searched, and it was found to contain 13 kg of charas. The contraband was divided into two parcels of 6.5 kg each, with samples drawn, sealed and sent for chemical analysis. The chemical analyst confirmed that the samples were charas.

    Jeet Ram was prosecuted under Section 20 of the Narcotic Drugs and Psychotropic Substances Act, 1985.

    Trial court acquittal and High Court reversal

    The Sessions Court in Shimla acquitted Jeet Ram in 2003. It identified several weaknesses in the prosecution’s case, including:

    • the absence of independent witnesses;
    • doubts over whether the charas was recovered from Jeet Ram’s dhaba or from his conscious possession;
    • alleged non-compliance with Section 50 of the NDPS Act;
    • concerns about the handling of seals and possible tampering of samples; and
    • the perceived improbability of leaving a large quantity of charas in an accessible gunny bag.

    The NCB appealed. The Himachal Pradesh High Court reappraised the evidence, overturned the acquittal and convicted Jeet Ram. It imposed 15 years’ rigorous imprisonment, a fine of Rs. 2,00,000, and one additional year of imprisonment in default of payment.

    Supreme Court’s findings

    The Supreme Court held that the High Court was entitled to review the evidence and reverse the acquittal because the trial court’s conclusions were contrary to the record. It reiterated that an appellate court has broad authority to review, reappreciate and reconsider evidence in an appeal against acquittal.

    However, the Court also restated an important safeguard: when two reasonable conclusions are genuinely possible on the evidence, an appellate court should ordinarily not disturb an acquittal. In this case, it found that the trial court’s view was not a reasonably possible one on the evidence presented.

    Why the Court accepted the prosecution case

    Section 50 did not apply to the bag search. The Court held that Section 50 safeguards apply to a personal search, not to the search of a bag or other object. Therefore, the trial court was wrong to treat the alleged non-compliance with Section 50 as a reason for acquittal.

    No adverse inference from lack of independent witnesses. The recovery allegedly occurred around 10:30 p.m. at a dhaba away from the village. The persons present were either linked to Jeet Ram or employed at the dhaba. The Court held that the lack of an independent witness, by itself, did not undermine credible official testimony.

    Conscious possession was established. Jeet Ram was present at the counter, where the gunny bag was found. The dhaba stood on land owned by his wife, and there was evidence that he described himself as its owner. The Court concluded that he had physical control over the contraband and knowledge of its presence and character.

    Tampering concerns were unsupported. A Judicial Magistrate had signed the samples and bulk parcels on 19 June 2001. The Court also noted that no suggestion of tampering had been put to the relevant NCB witnesses during the proceedings.

    The statutory presumption applied. The Court stated that, once possession was established and Jeet Ram did not adequately explain it, the presumption under Section 54 of the NDPS Act operated against him. It also noted that his version in his Section 313 CrPC statement was not supported by the witnesses he referred to or by defence evidence.

    Sentence reduced from 15 to 10 years

    Although the conviction was maintained, the Court found the original sentence excessive in the particular circumstances. The incident was nearly two decades old by the time of judgment, and Jeet Ram was about 65 years old. He had also claimed to be a priest at the nearby temple.

    The Court therefore reduced the custodial sentence to 10 years’ rigorous imprisonment. The fine of Rs. 2,00,000 was retained.

    Legal significance

    The ruling reinforces two significant principles in criminal appeals and NDPS prosecutions:

    1. Appellate courts may reverse an acquittal after a full review of the evidence when the trial court’s findings are unsupported or unreasonable. But they should not interfere merely because a second reasonable view is available.
    2. Conscious possession may be inferred from the facts and surrounding circumstances, including control over the premises and proximity to the contraband. A search of a bag is not treated as a personal search requiring Section 50 compliance.

    The judgment ultimately confirms that procedural concerns must be assessed against the complete evidentiary record, while sentencing may still be tailored to the individual circumstances of the accused.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Supreme Court

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    Ravi Shekhar Jha – Advocate, Bar Council of Delhi

  • CESTAT Kolkata: Foreign Origin and Smuggled Character Are Two Distinct Questions Under Customs Law

    CESTAT Kolkata: Foreign Origin and Smuggled Character Are Two Distinct Questions Under Customs Law

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 26.10.2026

    CESTAT Kolkata: Foreign Origin and Smuggled Character Are Two Distinct Questions Under Customs Law

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata has allowed nine connected appeals concerning the seizure of 39.156 metric tonnes of betel nuts, ruling that Customs did not establish that the goods were of foreign origin or had been smuggled into India.

    In Final Order Nos. 76499-76507/2026, pronounced on 15 October 2026, the Tribunal set aside the confiscation order and all related penalties. The decision underscores an important principle in customs law: for non-notified goods such as betel nuts, the burden remains on the Revenue to prove smuggling with reliable evidence rather than assumptions, inconclusive reports, or uncorroborated statements.

    Background: Two Trucks Intercepted Near Siliguri

    The case arose from a Directorate of Revenue Intelligence (DRI) operation on 3 March 2019. Acting on intelligence that allegedly smuggled betel nuts from Myanmar were being transported through the Siliguri area, officers intercepted two trucks at Goaltuli More on the Fulbari-Ghoshpukur Bypass Road in Darjeeling district, West Bengal.

    The trucks, bearing registration numbers AP-27TX-6129 and WB-65C-5608, were carrying betel nuts stated to have been loaded at Vairengte, Mizoram, for delivery to consignees in Hooghly and Nabadwip, West Bengal. The drivers produced transport documents, tax invoices, consignment notes and e-way bills. One consignment was documented as supplied by M/s A.D. Store to M/s Papai Traders, while the other was documented as supplied by M/s Zotei Enterprise to Shri Narayan Karmakar.

    Following a search at the DRI office in Siliguri, officers found:

    • 209 bags weighing 16.302 MT in truck AP-27TX-6129;
    • 293 bags weighing 22.854 MT in truck WB-65C-5608; and
    • A combined quantity of 39.156 MT, valued by Customs at Rs. 1,07,67,900.

    Customs seized the goods, the two carrier vehicles, related documents and two mobile phones. The department alleged that the betel nuts had been smuggled from Myanmar through the Indo-Myanmar border and were therefore liable to confiscation under Sections 111(b) and 111(d) of the Customs Act, 1962.

    Customs Case and Earlier Orders

    The Revenue relied mainly on statements recorded from the truck drivers and helpers, investigation into the consignors and consignees, call-detail records, and a report from the Arecanut Research and Development Foundation (ARDF), Mangalore.

    The ARDF report stated that the samples β€œseems to be of North-East including Myanmar region.” It also noted mould infestation and non-compliance with BIS standards. Customs treated this report, along with the statements and surrounding circumstances, as support for the allegation that the consignments were of Myanmar origin and had entered India illegally.

    On 28 August 2020, the adjudicating authority ordered absolute confiscation of the betel nuts and imposed penalties on the persons connected with the consignments. The Commissioner of Customs (Appeals) upheld that order on 23 February 2022.

    The affected parties, including Debasish Saha of M/s Papai Traders, Dipak Saha, Narayan Karmakar, Sujit Mitra, Md. Shamim Uddin, Zoramthari, Nilkamal Saha, Anjan Kumar Paul and Lalenkawli, then appealed to CESTAT.

    Tribunal’s Findings: Evidence Did Not Prove Smuggling

    The Tribunal found that the department’s evidence was insufficient to establish either foreign origin or illegal importation.

    1. The ARDF opinion was not conclusive

    CESTAT noted that the ARDF report did not say the goods were of Myanmar origin. Its wordingβ€”that the samples β€œseems to be of North-East including Myanmar region”—was held to be inconclusive. A reference to a broad region that includes Myanmar could not, by itself, prove that the goods originated in Myanmar.

    The Tribunal also relied on judicial precedents that question the evidentiary value of such reports where there is no recognised scientific or objective test capable of determining the territorial origin of betel nuts.

    2. Betel nuts are non-notified goods

    A central point in the ruling was that betel nuts are not notified under Section 123 of the Customs Act. As a result, the statutory burden does not shift to the person from whom the goods are seized. Instead, Customs must prove that the goods are smuggled.

    The Tribunal held that the Revenue could not meet this burden merely by relying on suspicion, a tentative expert opinion, or statements. Even if goods were assumed to be of foreign origin, that alone would not establish illegal importation; positive evidence of smuggling was still required.

    3. The seizure location and accompanying documents mattered

    The goods were intercepted in West Bengal, not at the Indo-Myanmar border. The trucks also carried invoices and other commercial transport documents identifying Mizoram-based suppliers and West Bengal consignees.

    The Tribunal held that these facts did not permit an automatic inference that the goods had crossed the border illegally. The documentary trail could not be displaced without cogent contrary evidence.

    4. Precedents required proof, not presumption

    The order relied on the Calcutta High Court’s ruling in Commissioner of Customs, Central Excise and Service Tax, Siliguri v. Subodh Das, which was subsequently affirmed by the Supreme Court. That line of authority establishes that, for non-notified betel nuts, Customs must discharge the burden of proving foreign origin and smuggled character.

    The Tribunal also referred to Maqsood Alam v. Commissioner of Customs, Lucknow and Maa Kamakhya Trader v. Commissioner of Customs (Preventive). These decisions emphasise that visual assessments, inconclusive opinions and strong suspicion cannot replace objective evidence of smuggling.

    Outcome: Confiscation and Penalties Quashed

    CESTAT concluded that the Revenue had failed to prove that the seized betel nuts were smuggled goods. It therefore set aside the confiscation of the 39.156 MT consignment and held that no penalties could be imposed on the appellants.

    The Tribunal allowed all connected appeals and overturned the Order-in-Appeal dated 23 February 2022.

    Key Legal Significance

    This ruling reinforces that customs enforcement actions involving non-notified goods must rest on clear, affirmative and legally reliable evidence. In particular:

    • A tentative report suggesting a possible regional origin is not proof of foreign origin.
    • Foreign origin, even if established, does not automatically prove that goods were illegally imported.
    • For non-notified goods, Customs bears the burden of proving smuggling.
    • Confiscation and penalties cannot be sustained on presumptions, suspicion or inadequately supported statements.

    The decision provides a significant restatement of evidentiary standards in betel-nut smuggling cases, particularly where seizures occur away from an international border and goods are accompanied by commercial documentation.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: CESTAT Kolkata

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    Ravi Shekhar Jha – Advocate, Bar Council of Delhi

  • Bombay HC: Trademark Registration Does Not Automatically Protect a Pharma Company from Infringement Proceedings

    Bombay HC: Trademark Registration Does Not Automatically Protect a Pharma Company from Infringement Proceedings

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 26.10.2026

    Bombay HC: Trademark Registration Does Not Automatically Protect a Pharma Company from Infringement Proceedings

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Bombay High Court granted Franco Indian Pharmaceuticals Pvt. Ltd. an interim injunction restraining Corona Remedies Pvt. Ltd. from using the mark STIMULET for pharmaceutical products, finding it deceptively similar to Franco Indian’s long-standing STIMULIV mark.

    The dispute at a glance

    The case concerned two pharmaceutical companies and competing marks:

    • Franco Indian Pharmaceuticals: owner of STIMULIV, an Ayurvedic liver-related preparation sold as syrup and tablets.
    • Corona Remedies: user of STIMULET, an allopathic product used in treatments relating to breast cancer disorders and infertility.

    Although the medicines served different therapeutic purposes, the Court held that the similarity of the names created an unacceptable risk in the pharmaceutical context.

    Why the Court found the marks similar

    The Court treated similarity as the threshold issue. Visually, the two marks share the same dominant portion, β€œSTIMUL,” and differ only in their last two letters: β€œIV” versus β€œET.” The Court concluded that this was not enough to create a reliable phonetic distinction, particularly in India, where English pronunciation may vary widely.

    The Court also rejected the argument that the products’ distinct uses eliminated the risk of confusion. Instead, it emphasized that even slight confusion should be avoided when medicines are involved, especially where one product concerns sensitive treatments such as cancer and infertility.

    Franco Indian’s stronger prior rights

    Franco Indian adopted STIMULIV on 28 June 1974 and obtained registration in 1976 for pharmaceutical preparations related to liver and allied disorders. Its mark was registered in Part A of the old trade mark register, which required distinctiveness.

    The Court found prima facie evidence of sustained and substantial use:

    • Invoices and documentation traced use of STIMULIV back decades.
    • STIMULIV sales reached Rs. 1,311.70 lakhs in 2019–20.
    • Franco Indian’s sales had continued without interruption and showed growth over time.

    By contrast, Corona Remedies claimed adoption of STIMULET in 2010. Its own records showed a multi-year gap in use after 2011–12, before sales resumed. The Court noted that Corona’s 2019–20 sales of approximately Rs. 346.51 lakhs were materially lower than Franco Indian’s sales.

    This evidence supported Franco Indian’s claim to stronger goodwill, reputation, and common-law rights as the prior and continuous user.

    Registration did not end the dispute

    Corona Remedies argued that, because both marks were registered, Franco Indian could not pursue an infringement action. The Court rejected that position.

    It held that a defendant’s registration does not bar an infringement suit. In a conflict between registered proprietors of similar marks, the Court may assess which party has better rights under common law, including priority, continuity of use, sales, and goodwill.

    On those factors, the Court found that Franco Indian’s position was substantially stronger: it had earlier registration, earlier use by decades, continuous sales, and a stronger commercial presence.

    A key inconsistency in Corona Remedies’ defence

    Corona Remedies contended that β€œSTIMUL” or similar expressions were common to the trade. But it had also sought registration for STIMULET and asserted that its own mark was distinctive and capable of identifying its goods.

    The Court found this position difficult to sustain. A party claiming distinctiveness for its own STIMULET mark could not persuasively deny the distinctiveness of the earlier STIMULIV mark on the basis that the shared element was generic or widely used.

    The Court’s order

    The Court made Franco Indian’s interim application absolute and restrained Corona Remedies from using STIMULET in relation to pharmaceutical products. It also dismissed Corona Remedies’ application seeking rejection of Franco Indian’s plaint, finding no fraud, suppression, or material concealment.

    No order as to costs was made.

    What this decision means

    The ruling reinforces the heightened caution applied to pharmaceutical trade marks. Differences in medical use, patient category, or prescription status may not defeat an injunction where the names are visually and phonetically close. In such disputes, priority of use, continuity, sales evidence, and goodwill can outweigh a later user’s registration of a similar mark.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Bombay High Court

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    Ravi Shekhar Jha – Advocate, Bar Council of Delhi

  • Delhi HC: Invalid Arbitrator Appointment Clause Does Not Invalidate Arbitration Agreement

    Delhi HC: Invalid Arbitrator Appointment Clause Does Not Invalidate Arbitration Agreement

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 26.10.2026

    Delhi HC: Invalid Arbitrator Appointment Clause Does Not Invalidate Arbitration Agreement

    This Short Article has been prepared & written by Arbitrator Shobhit Mallik. The views expressed are based on his interpretation of the law. He can be reached at his email id shobhit.Ica23@gmail.com .

    The Delhi High Court has referred a payment and performance dispute between Greentree Building Energy Private Limited and the Bureau of Energy Efficiency (BEE) to arbitration, holding that BEE could not unilaterally appoint the sole arbitrator under the contract.

    Background of the dispute

    The dispute arose from a government engagement for conducting refresher courses for Energy Auditors and Energy Managers across India. BEE issued a request for proposal in December 2023, and Greentree’s bid was accepted through a Letter of Award dated 15 February 2024. The parties then entered into a Memorandum of Agreement/Service Agreement on 29 February 2024.

    Under the arrangement, Greentree was to provide refresher training to about 2,000 candidates through workshops held nationwide. The agreement included an arbitration clause providing that unresolved disputes would be referred to a sole arbitrator appointed by BEE, with New Delhi as the seat and venue of arbitration.

    Greentree’s claims

    Greentree contended that its work was hampered because BEE did not provide a functioning portal, candidate database, and necessary instructions or approvals concerning registration, payment verification and certification. According to Greentree, it had to deploy its own staff and technical resources to establish an alternative portal.

    The contract period was extended twice: first until 14 May 2025 and then until 1 October 2025. Greentree stated that it trained 636 candidates, exceeding the first milestone requirement of 600 candidates.

    For that milestone, Greentree issued an invoice of Rs. 46,11,204, inclusive of IGST, representing 30% of the total contract value of Rs. 1,53,70,680. It said that only Rs. 15,53,350 was released.

    BEE’s payment calculation treated Rs. 44,19,071 as payable but deducted:

    • Rs. 11,52,801 for alleged shortfalls in the minimum number of participants at six workshops; and
    • Rs. 15,37,068 as an alleged maximum 10% penalty on the total contract value.

    Greentree challenged these deductions as unilateral, arbitrary and inconsistent with the agreement. It also claimed a further Rs. 5,14,918 relating to 67 additional candidates trained under the same work order.

    BEE’s position

    BEE disputed Greentree’s claims. It maintained that Greentree had repeatedly failed to perform according to the agreed milestones and timelines, despite earlier communications. BEE also asserted that the deductions from the invoice were justified under the contractual framework.

    The Court did not decide these factual and contractual disputes. It held that questions relating to delay, performance, deductions and payment entitlement must be determined by the arbitral tribunal.

    Why the Court intervened

    Greentree invoked arbitration in April 2026 and asked BEE to agree to an independent and impartial sole arbitrator. While BEE responded to the notice, it did not concur with such an appointment.

    The Court found that the contractual provision allowing BEE to appoint the sole arbitrator could not be enforced. Relying on Supreme Court precedent, the Court reaffirmed that a party interested in the outcome of a dispute cannot unilaterally appoint the sole arbitrator. Such a process creates justified concerns regarding the arbitrator’s independence and impartiality and conflicts with the requirement of equal treatment of parties.

    Importantly, the Court clarified that an invalid appointment procedure does not invalidate the arbitration agreement itself. The parties’ clear intention to resolve disputes through arbitration remained effective; only the agreed method of appointment had failed.

    The Court’s decision

    The Delhi High Court appointed Ms. Manini Brar, Advocate, as the sole arbitrator to decide the disputes arising from the work order and service agreement.

    The arbitration will proceed under the aegis and rules of the Delhi International Arbitration Centre (DIAC). The parties must make the disclosures required under Section 12 of the Arbitration and Conciliation Act, 1996. BEE may raise any preliminary objections concerning jurisdiction or arbitrability before the arbitrator.

    All claims, counterclaims and substantive defences remain open for decision on their merits. The Court expressly stated that its order should not be treated as a view on the correctness of either party’s case.

    Legal significance

    The ruling reinforces a central principle of Indian arbitration law: a party to a dispute cannot retain exclusive control over the appointment of a sole arbitrator. Where such a clause exists, courts can preserve the arbitration agreement while replacing the defective appointment mechanism with an independent judicial appointment.

    For government bodies, contractors and commercial parties, the decision highlights the need to draft arbitration clauses that provide a neutral, balanced and legally sustainable appointment process.

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    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Delhi High Court

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  • Bombay High Court Upholds Maha RERA Appellate Tribunal’s Power to Restore Defaulted Proceedings

    Bombay High Court Upholds Maha RERA Appellate Tribunal’s Power to Restore Defaulted Proceedings

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 26.10.2026

    Bombay High Court Upholds Maha RERA Appellate Tribunal’s Power to Restore Defaulted Proceedings

    This Short Article has been prepared & written by Advocate Narendra Singh. The views expressed are based on his interpretation of the law. He can be reached at his email id amitnaren@outlook.com .  

    The Bombay High Court has held that the Maharashtra Real Estate Appellate Tribunal may restore proceedings dismissed for non-prosecution when sufficient cause is shown, even though RERA does not expressly state that power.

    Background of the dispute

    Hubtown Ltd. challenged an order of the Maharashtra Real Estate Appellate Tribunal that revived an allottee’s delayed appeal. The allottee had originally filed a complaint under Section 18 of the Real Estate (Regulation and Development) Act, 2016, seeking relief from Maha RERA. Maha RERA dismissed that complaint on 23 April 2024.

    The allottee then appealed to the Appellate Tribunal, accompanied by an application seeking condonation of a 25-day filing delay. On 3 July 2025, the application was dismissed for want of prosecution because the allottee did not appear. As a consequence, the appeal was also disposed of.

    The allottee subsequently sought restoration of both the delay-condonation application and the appeal, along with condonation of the delay in making the restoration request. The Appellate Tribunal allowed those applications, relying in part on its inherent powers under Regulation 25 of the Maharashtra Real Estate Appellate Tribunal Regulations, 2019.

    The promoter’s challenge

    Hubtown argued that the Appellate Tribunal, as a statutory body, could exercise only those Civil Court powers expressly specified in Section 53(4) of RERA. While that provision permits dismissal for default or ex parte proceedings, it does not specifically confer a power to restore a matter dismissed in default.

    The promoter also contended that Regulation 25 could not enlarge the Tribunal’s jurisdiction beyond RERA and its rules, and that the allottee had not shown adequate cause for delay.

    High Court’s reasoning

    Justice N. J. Jamadar rejected the narrow reading of Section 53. The Court emphasized three connected principles:

    • Natural justice governs the Tribunal’s procedure. Section 53(1) states that the Appellate Tribunal is not bound by the strict procedure of the Code of Civil Procedure and must be guided by natural justice.
    • The Tribunal can regulate its own procedure. Section 53(2) authorizes it to do so, subject to RERA.
    • Necessary incidental powers are implied. A tribunal must possess powers that are ancillary and essential to perform its statutory functions effectively, unless the statute expressly prohibits their use.

    The Court found that the power to restore a case dismissed for default is a natural counterpart to the power to dismiss it for non-appearance. A tribunal may dismiss a matter when a party does not appear, but fairness may require it to restore the matter if the party later establishes good cause for the absence.

    Supreme Court precedents relied upon

    The judgment drew support from established Supreme Court decisions:

    • In New India Assurance Co. Ltd. v. R. Srinivasan, the Supreme Court recognized that a judicial or quasi-judicial body which may dismiss a proceeding for non-prosecution also has inherent jurisdiction to restore it upon a showing of good cause.
    • In Union of India v. Paras Laminates (P) Ltd., the Court held that statutory tribunals have powers expressly granted as well as powers necessarily incidental to making their jurisdiction effective.
    • In Grindlays Bank Ltd. v. Central Government Industrial Tribunal, the Supreme Court held that a tribunal may set aside an ex parte award in the interests of justice even without an express provision, absent any statutory prohibition.

    Applying these principles, the Bombay High Court held that the Appellate Tribunal’s restoration power exists independently of Regulation 25 because it is essential to achieving RERA’s purpose and to deciding matters fairly.

    Limited scope for interference with delay condonation

    The Court also declined to interfere with the Tribunal’s decision to condone delay. It observed that once the first adjudicatory forum has exercised positive discretion to condone delay after assessing the explanation and supporting documents, an appellate or supervisory court should not lightly overturn that decision.

    Interference would generally be justified only where the order is perverse or where delay has been condoned without any reasons. The Court found neither circumstance present and held that no substantial question of law arose.

    Outcome and legal significance

    The Bombay High Court dismissed Hubtown’s second appeal and disposed of the related interim application. The ruling confirms that the Maha RERA Appellate Tribunal is not confined to a mechanical reading of its expressly listed powers. Consistent with natural justice, it may restore a proceeding dismissed in default where sufficient cause is established and no statutory prohibition applies.

    This ensures that procedural lapses do not automatically defeat a party’s substantive right to have a real-estate dispute adjudicated on its merits.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Bombay High Court

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  • Bombay HC: Criminal Proceedings Cannot Be Used to Settle Purely Civil Disputes

    Bombay HC: Criminal Proceedings Cannot Be Used to Settle Purely Civil Disputes

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 26.10.2026

    Bombay HC: Criminal Proceedings Cannot Be Used to Settle Purely Civil Disputes

    This Short Article has been prepared & written by Advocate Madhumita Jha. The views expressed are based on her interpretation of the law. She can be reached at her email id jhamadhumita27@gmail.com .  

    The Bombay High Court has quashed criminal proceedings against M/s. Akansha Developers, holding that the dispute over an Aundh redevelopment project was fundamentally civil and did not disclose a prima facie case of cheating or criminal breach of trust.

    Background of the dispute

    The case arose from a redevelopment arrangement involving properties bearing CTS Nos. 773, 774, 776 and 784 at Mouje Aundh, Taluka Haveli, Pune. The complainant claimed ownership rights in the ancestral properties and asserted that CTS No. 784 had been purchased by his grandfather through a registered sale deed dated 6 May 1955.

    The parties had entrusted development of the property to M/s. Akansha Developers. Under the development arrangement, the developer was to carry out the project and provide compensation along with an allotted flat and shop. A dispute later emerged over the inclusion of CTS No. 784 in the project. The complainant contended that certain family members had no right, title or possession authorising them to execute a development agreement concerning that parcel.

    Criminal complaint and earlier proceedings

    In 2012, the complainant initiated RCC No. 581 of 2012 before the Judicial Magistrate First Class, Pune, alleging offences including cheating, breach of trust and other provisions of the Indian Penal Code.

    The Magistrate issued process on 9 August 2012 for offences under Sections 403, 406, 420, 423, 504 and 506 read with Section 34 of the IPC. Other allegations, including those under Sections 404, 426, 447 and conspiracy-related provisions, were rejected on the ground that no offence was made out. A revision challenge before the Sessions Court was dismissed on 28 October 2014.

    Akansha Developers then approached the Bombay High Court seeking to quash the remaining criminal proceedings.

    Developer’s case: a contractual dispute already addressed in civil court

    The developer argued that the same dispute had already been the subject of civil proceedings since 2009. According to the developer, the civil suit was decreed on 27 April 2012, before the criminal complaint was filed, and the complaint was therefore a retaliatory attempt to reopen issues already considered in the civil litigation.

    It was also submitted that the development agreement and power of attorney authorised the developer to undertake the project and negotiate matters connected with possession of CTS No. 784. The developer maintained that it remained willing to provide the complainant’s earmarked flat and shop.

    The civil court had concluded that cancellation of the development agreement was not appropriate because the project had been completed, the agreement had been acted upon and third-party rights had crystallised. Instead, it awarded damages of Rs. 5 lakh to the complainant. The decree was under challenge in a first appeal.

    Complainant’s allegations

    The complainant opposed the petition, alleging that CTS No. 784 was not covered by an earlier civil decree and that the family members who executed the development agreement lacked ownership rights in that property. It was alleged that the developer acted in concert with them, incorporated the disputed parcel into the larger project and failed to pay amounts promised under the development agreement.

    High Court’s reasoning

    Justice Milind N. Jadhav held that the parties’ rights and obligations were governed by executed and registered documents, including the development agreement, power of attorney and revenue records. The Court noted that the civil court had already ruled that the development agreement could not be cancelled, while the complainant’s appeal against that decision remained pending.

    The Court found that the dispute was amenable to civil adjudication and that parallel criminal proceedings could not be sustained on the same facts without a prima facie showing of criminal intent. It specifically held that there was no element of cheating in the circumstances of the case.

    The judgment also observed that, once allegations under certain related provisions had not been made out, the cheating charge under Section 420 was unsustainable on the facts presented.

    Outcome

    By its judgment dated 22 October 2026, the Bombay High Court quashed the Sessions Court’s order of 28 October 2014 and set aside the Magistrate’s order issuing process dated 9 August 2012. The writ petition filed by M/s. Akansha Developers was allowed.

    Key legal takeaway

    The decision reinforces that a property-development dispute governed by contractual and title documents will ordinarily remain a civil matter. Criminal proceedings for cheating or breach of trust require clear, prima facie allegations of criminal intent; they cannot be used merely because a party disputes contractual performance or property entitlements already being litigated before a civil court.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Bombay High Court

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  • Karnataka High Court Declines to Quash Disproportionate-Assets Cases Against Retired Officials

    Karnataka High Court Declines to Quash Disproportionate-Assets Cases Against Retired Officials

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 26.10.2026

    Karnataka High Court Declines to Quash Disproportionate-Assets Cases Against Retired Officials

    This Short Article has been prepared & written by Advocate G Sridharamurthy. The views expressed are based on his interpretation of the law. He can be reached at his email id sriadv3@gmail.com . 

    The Karnataka High Court has dismissed two petitions seeking to halt corruption prosecutions against retired public officials, holding that disputed evidence on alleged disproportionate assets must be assessed at trial rather than through quashing proceedings.

    Court’s decision

    In a common order dated 17 October 2026, Justice H.P. Sandesh rejected:

    • Criminal Petition No. 3849 of 2019 filed by H.M. Khyum Ali, a retired Deputy Director in the Department of Mines and Geology; and
    • Writ Petition No. 48145 of 2018 filed by M.K. Baldevakrishna, formerly Managing Director of the Dr. Ambedkar Development Corporation.

    Both petitioners faced proceedings under Section 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act, 1988, concerning assets alleged to be disproportionate to their known sources of income.

    Allegations in the two cases

    H.M. Khyum Ali case

    The Lokayukta police registered a suo motu case in 2008. The prosecution alleged that, during the check period from 11 February 1974 to 27 June 2008, Ali had assets valued at Rs. 62.76 lakh and expenditure of Rs. 53.24 lakh against an income of Rs. 67.89 lakh. The charge sheet assessed the alleged disproportionate assets at approximately Rs. 48.11 lakh, or 70.81% above known income.

    Ali argued that the investigation was incomplete because documents and explanations relating to several asset schedules had not been considered before the charge sheet was filed. He also contended that salary, rental income, fixed-deposit interest, advances, and tuition income were omitted from the calculation.

    The Court found that these assertions involved disputed facts and matters of defence that must be tested during trial. It noted that charges had already been framed and six prosecution witnesses had been examined and cross-examined.

    M.K. Baldevakrishna case

    Baldevakrishna’s case arose from a 2008 raid and investigation. The prosecution alleged assets of about Rs. 2.69 crore, expenditure of about Rs. 1.64 crore, and income of about Rs. 2 crore during the relevant period. The final report alleged disproportionate assets of 116.41% above known income.

    He argued that sanction for prosecution had not been validly obtained and that authorities had delayed proceedings until after his retirement. He also challenged the order taking cognizance, arguing that it did not demonstrate sufficient judicial application of mind.

    The Court held that the sanction issue did not justify quashing the prosecution because the matter had been referred for consideration while he was in service, and he retired during that process. It also ruled that the allegation of disproportionate assets and the adequacy of the petitioner’s explanations were matters for evidence at trial.

    Why the Court refused to intervene

    The Court emphasized three central reasons:

    • Disputed factual questions cannot be resolved in quashing proceedings. Claims about omitted income, asset valuations, explanations for property, and the correctness of the disproportionate-assets calculation require evidentiary scrutiny.
    • The cases had progressed substantially. In Ali’s matter, charges had been framed and prosecution evidence had begun, making intervention under Section 482 of the Criminal Procedure Code inappropriate.
    • Retirement did not require the cases to be terminated. Relying on recent Supreme Court authority, the Court held that the 2018 amendment to Section 19 of the Prevention of Corruption Act could not be used retrospectively to invalidate proceedings initiated under the earlier legal position where the accused had retired.

    Cognizance orders upheld

    Both petitioners challenged brief cognizance orders stating, in substance, that the final report had been perused, cognizance taken, and summons issued. The High Court held that these orders were not mechanical merely because they were concise.

    According to the Court, the reference to having perused the final report showed that the trial court had considered the charge-sheet material before taking cognizance. A detailed order was not necessary at that stage.

    Legal significance

    The ruling reinforces that High Courts will ordinarily not use their inherent or writ jurisdiction to conduct a β€œmini-trial” in disproportionate-assets cases. Where the prosecution presents material supporting the allegation and the defence depends on competing calculations, documents, or explanations, those issues are to be decided through the regular trial process.

    The Court therefore dismissed both petitions, allowing the respective criminal proceedings to continue.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Karnataka High Court

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  • Bombay HC: Section 27A NDPS Cannot Be Invoked Merely for Paying for Drugs Intended for Personal Consumption

    Bombay HC: Section 27A NDPS Cannot Be Invoked Merely for Paying for Drugs Intended for Personal Consumption

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 24.10.2026

    Bombay HC: Section 27A NDPS Cannot Be Invoked Merely for Paying for Drugs Intended for Personal Consumption

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Bombay High Court granted bail to actor Rhea Chakraborty on 7 October 2020, holding that the material then available did not show her involvement in commercial-quantity drug offences or in financing illicit drug trafficking under Section 27A of the NDPS Act.

    Background of the case

    Rhea Chakraborty was arrested by the Narcotics Control Bureau (NCB) on 8 September 2020 in connection with Crime No. 16/2020. The case arose from an NCB investigation into an alleged drug-supply network. The agency alleged that Chakraborty had helped procure drugs for Sushant Singh Rajput, managed or contributed to payments, and was connected to deliveries involving his associates and her brother, Showik Chakraborty.

    The NCB relied on statements of co-accused persons, alleged WhatsApp communications, and claimed financial transactions. It argued that Chakraborty had facilitated drug deliveries and payments and was therefore liable for offences including financing illicit traffic and harbouring offenders under Section 27A of the Narcotic Drugs and Psychotropic Substances Act, 1985.

    Chakraborty denied that Section 27A applied. Her defence emphasized that no contraband was recovered from her or from Rajput’s residence, that the allegations concerned procurement for alleged personal consumption, and that she had no connection with the commercial quantity of LSD recovered from another accused, Anuj Keshwani.

    NCB investigation was separate from the death investigation

    One preliminary issue was whether the NCB had authority to investigate because the Supreme Court had directed the CBI to investigate the death of Sushant Singh Rajput and related circumstances.

    The High Court rejected the challenge to the NCB’s jurisdiction. It found that the NCB inquiry began independently after information led to the arrest of Abbas Lakhani and later expanded through disclosures and recoveries involving multiple alleged drug suppliers. The court held that the drug-trafficking investigation was distinct from the inquiry into Rajput’s death, even though allegations regarding Rajput’s alleged drug use emerged during the investigation.

    All NDPS offences are non-bailable, court says

    The judgment examined whether offences involving small quantities under the NDPS Act could be treated as bailable under the Criminal Procedure Code.

    The court concluded that all offences under the NDPS Act are non-bailable. It relied on the Supreme Court’s interpretation in State of Punjab v. Baldev Singh, which described Section 37 as making all NDPS offences cognizable and non-bailable. The court distinguished between two issues:

    • Whether an offence is bailable: The court held that NDPS offences are non-bailable.
    • Whether Section 37’s stricter bail conditions apply: Those special restrictions apply to offences under Sections 19, 24 and 27A, and to offences involving commercial quantities.

    This distinction was important because a non-bailable offence does not automatically trigger the stringent β€œtwin conditions” of Section 37.

    What the court said about financing and harbouring

    The High Court’s central legal finding concerned Section 27A, which punishes financing illicit traffic and harbouring persons engaged in it.

    The court held that β€œfinancing” means more than paying money for a particular drug purchase. In its interpretation, financing requires providing funds or financial support that makes an illicit drug trade or business operational or sustains it. Treating every payment connected with a drug transaction as financing would erase the NDPS Act’s separate punishment framework based on quantity.

    Similarly, the court found that β€œharbouring” requires more than allowing a person to reside somewhere or providing ordinary support. It involves sheltering or concealing a person engaged in the prohibited activity, with the necessary mental element and in a manner connected to avoiding apprehension.

    Applying these principles, the court held that allegations that Chakraborty spent money to procure drugs for Rajput’s alleged consumption did not, by themselves, amount to financing illicit traffic. It also found no basis to say that she harboured him: he lived in his own house, no criminal case was pending against him at the relevant time, and there was no indication that he was being concealed from law enforcement.

    Why bail was granted

    The court noted that no contraband was recovered from Chakraborty or from Rajput’s residence. It also found that the investigation had not produced material showing that her alleged conduct involved a commercial quantity of narcotic drugs or psychotropic substances.

    The court further observed that:

    • Chakraborty had no criminal antecedents.
    • The available allegations did not show that she was part of a chain of drug dealers.
    • There was no allegation that she forwarded drugs to others for monetary or other gain.
    • The NCB did not seek her custodial interrogation at her first remand, which the court treated as relevant to whether continued custody was necessary.
    • The concern that she would alert others or cause destruction of evidence had no identified factual basis.

    The court also rejected the argument that a celebrity or public figure should face a harsher approach to bail. It stated that everyone is equal before the law and that neither special privilege nor special liability should follow from a person’s status.

    Bail conditions

    The court directed Chakraborty’s release on a personal-recognizance bond of Rs. 1 lakh with one or two sureties of the same amount. It imposed several conditions, including:

    • depositing her passport with the investigating agency;
    • not leaving India without prior permission from the NDPS Special Court;
    • informing the investigating officer in advance before travelling outside Greater Mumbai;
    • reporting monthly to the investigating agency for six months;
    • attending court proceedings unless prevented by reasonable cause; and
    • not tampering with evidence or the investigation.

    She was initially allowed to furnish cash bail of Rs. 1 lakh for one month while arranging sureties. The court also required her to report to the nearest police station for ten days after release.

    Significance of the ruling

    The ruling is significant for its detailed interpretation of Section 27A of the NDPS Act. It draws a clear legal boundary between an allegation of paying for or arranging drugs for consumption and the far more serious accusation of financing an illicit drug-trafficking operation. The decision also reinforces that Section 37’s strict bail restrictions apply independently to Section 27A and commercial-quantity offences.

    However, the prosecution must first show material capable of connecting the accused to those specific offences. In Chakraborty’s case, the High Court found that threshold was not met at the bail stage, while making clear that its observations were confined to deciding bail rather than determining guilt at trial.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Bombay High Court

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    Ravi Shekhar Jha – Advocate, Bar Council of Delhi

  • Calcutta HC: Patent Applications Cannot Be Rejected on Public Health Grounds Without Scientific Evidence

    Calcutta HC: Patent Applications Cannot Be Rejected on Public Health Grounds Without Scientific Evidence

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 24.10.2026

    Calcutta HC: Patent Applications Cannot Be Rejected on Public Health Grounds Without Scientific Evidence

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Calcutta High Court has set aside the Patent Controller’s rejection of ITC Limited’s application for a β€œHeater Assembly to Generate Aerosol,” holding that the decision under Section 3(b) of the Patents Act lacked adequate reasons, misconstrued the invention, and breached principles of natural justice.

    Background of the dispute

    ITC’s patent application concerns a heater assembly designed for handheld aerosol-generating devices. Its stated technical purpose is to provide uniform heat distribution across an aerosol-forming substrate. The substrate may be solid or liquid and may, but need not, contain tobacco compounds.

    On 21 August 2024, the Controller of Patents rejected the application under Section 3(b) of the Patents Act, 1970. That provision excludes inventions whose primary or intended use, or commercial exploitation, would be contrary to public order or morality or seriously prejudice human, animal or plant life, health, or the environment.

    The Controller treated the invention as one exclusively connected with tobacco-containing substrates and concluded that it was harmful to human life and health. ITC appealed this decision before the Intellectual Property Rights Division of the Calcutta High Court.

    What the High Court decided

    In its judgment dated 20 May 2025, Justice Ravi Krishan Kapur set aside the rejection order and remanded the application to the Controller for a fresh decision. The Controller must reconsider the matter in accordance with law, after giving the parties a hearing, within three months of communication of the Court’s order.

    The Court did not grant the patent or decide the application’s merits. Instead, it found that the earlier decision-making process and reasoning were legally deficient.

    Key findings

    1. Section 3(b) requires an assessment of the invention’s actual primary or intended use

    The Court emphasized that Section 3(b) focuses on the primary or intended use or commercial exploitation of the specific invention. The inquiry cannot rest on an assumption that every possible use of a product associated with tobacco necessarily makes the invention unpatentable.

    The heater assembly was not limited to tobacco substrates. By treating the invention as necessarily and exclusively tobacco-based, the Controller fundamentally misunderstood its scope.

    2. A patent does not give permission to commercialize an invention

    A central point in the ruling is the distinction between a patent right and regulatory permission. A patent is an exclusionary or negative right: it enables the patentee to prevent others from making, using, selling, or exploiting the claimed invention without consent. It does not itself authorize the patent holder to manufacture, sell, market, or use the invention.

    The Court held that the Controller’s reasoning wrongly assumed that granting a patent would automatically permit commercialization of the product. Whether a product may lawfully be made, marketed, or sold is governed by other applicable laws and regulations, not by the patent grant alone.

    3. Health and morality objections need cogent reasoning and evidence

    The Court found that the conclusion that the invention caused serious prejudice to human life and health was unsupported by reasons or justification. Tobacco-related products are not, by themselves, categorically unpatentable in India.

    A refusal under Section 3(b) must show a clear connection between the invention’s actual intended use and the alleged harm, supported by cogent reasoning. The Court rejected a subjective or preconceived view that all tobacco-related products necessarily fall within the statutory exclusion, particularly where there is no independent scientific or technical evidence supporting the conclusion.

    4. β€œPublic order” and β€œmorality” cannot be applied as vague objections

    The Court held that the Controller’s finding that the invention was contrary to public order and morality was cryptic and unreasoned. It noted that Section 3(b) should not become a vehicle for refusing patents based solely on broad, subjective concerns about morality, public order, or health.

    In interpreting the provision, the Court referred to international patent-law concepts, including the notion of ordre public in TRIPS and the European Patent Convention. These materials indicate that the exclusion is directed at inventions likely to induce riot, public disorder, criminal conduct, or generally offensive behaviour, rather than at every invention that may raise a policy concern.

    5. New materials could not be relied on without giving ITC an opportunity to respond

    The Controller relied on three additional documents in the rejection order even though those documents had not been disclosed in the First Examination Report or hearing notices. ITC was therefore denied the opportunity to address them.

    The Court treated this as a serious procedural defect and a violation of natural justice. A patent applicant must have a fair opportunity to respond to material relied upon in a decision against it.

    6. The e-cigarette prohibition law did not justify the rejection order

    During the appeal, the Controller relied on the Prohibition of Electronic Cigarettes Act, 2019. However, the Court noted that this ground was not part of the original rejection order or the pleadings.

    The Court further observed that the 2019 legislation regulates activities such as production, manufacture, import, export, sale, distribution, storage, and advertising. It does not itself determine whether a patent should be granted. The Controller could not defend the rejection by adding new grounds after issuing the decision.

    7. Constitutional and public-health provisions were improperly invoked

    The Controller had relied on Article 47 of the Constitution, which directs the State to improve public health. The Court held that this reliance was misplaced in deciding patentability under Section 3(b). It also found that Section 83(e) of the Patents Act had been incorrectly applied on the assumption that a patent grant necessarily results in commercialization and public-health consequences.

    Why the ruling matters

    The decision reinforces several important limits on patent examination in India:

    • Patentability must be assessed on the claimed invention, not on assumptions about a particular product category.
    • Section 3(b) demands evidence-based and reasoned analysis, especially where an objection concerns health, public order, or morality.
    • A patent is not a regulatory licence. Granting a patent does not authorize commercial activity prohibited or regulated under other laws.
    • Procedural fairness is essential. Applicants must be informed of and allowed to answer the material used against their applications.
    • Post-hoc reasons cannot repair an invalid order. The Controller’s decision must stand or fall on the reasons contained in the order itself.

    Outcome

    The High Court set aside the Controller’s rejection of ITC’s patent application and returned the matter for fresh consideration. All substantive questions remain open, meaning the Controller must now reassess the application independently, give the parties a proper hearing, and issue a reasoned decision based on the law and the record.

    The ruling clarifies that Section 3(b) is a narrow, evidence-based safeguard against genuinely harmful or morally impermissible inventions, not a blanket basis for rejecting inventions merely because they may be associated with tobacco or aerosol-generating products.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Calcutta High Court

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