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  • Bombay High Court Lays Down Landmark Principles for Deemed Conveyance and Proportionate Land Division Under MOFA

    Bombay High Court Lays Down Landmark Principles for Deemed Conveyance and Proportionate Land Division Under MOFA

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

    Date: 17.09.2026

    Bombay High Court Lays Down Landmark Principles for Deemed Conveyance and Proportionate Land Division Under MOFA

    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 .  

    In a significant judgment affecting cooperative housing societies, developers and redevelopment projects across Maharashtra, the Bombay High Court has laid down detailed principles governing proportionate division and deemed conveyance of land in multi-building layouts, particularly where different buildings have consumed different amounts of base FSI, TDR or additional development potential.

    In Satellite Garden I Cooperative Housing Society Ltd. v. State of Maharashtra & Ors. and connected petitions, Justice Sandeep V. Marne held that a housing society’s entitlement to proportionate layout land crystallises and freezes when the statutory period for conveyance under Section 11 of the Maharashtra Ownership Flats Act, 1963 (MOFA), read with Rule 9 of the MOF Rules, 1964, expires. Subsequent revision of building plans cannot, by itself, reduce that crystallised entitlement.

    The 170-page judgment, pronounced on September 16, 2026, arose from three connected writ petitions concerning societies in a Goregaon, Mumbai layout.

    Bombay HC Addresses Long-Standing Problem of Land Division in Large Layouts

    • At the outset, the Court identified a recurring difficulty in real-estate development: while conveyance of land for a standalone building is relatively straightforward, disputes become considerably more complicated when several housing societies occupy different buildings within a common layout.
    • The problem becomes particularly acute where buildings are constructed at different times, revised plans are sanctioned, TDR is subsequently loaded, or different FSI regimes apply.
    • Justice Marne observed that organisations of flat purchasers in the first building need not indefinitely wait for the developer to complete the entire layout. Their right to obtain conveyance of a proportionate share in the land is recognised in law. The real difficulty is determining how much land should be conveyed to each society.
    • The Court therefore used the three petitions not merely to resolve the individual disputes, but also to formulate broader principles for proportionate land division in layout developments.

    Dispute Involved Four Constructed Buildings and One Proposed Building

    • The case concerned a larger property at A.K. Vaidya Marg, Goregaon (East), Mumbai, originally measuring approximately 55,696.70 sq. metres.
    • Development rights were granted to BPM Industries, later known as Satellite Developers Ltd. The relevant Sub-Plot A was initially approximately 16,855.47 sq. metres and was later realigned to approximately 21,807.18 sq. metres.
    • Satellite Garden I CHSL was formed in respect of the first building in October 2002. Further buildings were subsequently constructed, leading to the formation of Sadguru Complex 1 (AB) CHSL, Sadguru Complex 1 (CD) CHSL and Satellite Tower CHSL. A fifth building was contemplated but remained unconstructed.
    • The societies had significantly different built-up areas. According to the last sanctioned plan referred to in the judgment, Satellite Garden I had BUA of 11,186.41 sq. metres, Sadguru AB 3,936.31 sq. metres, Sadguru CD 3,917.76 sq. metres, and Satellite Tower 20,728.06 sq. metres.

    Competent Authority Applied Different Standards to Different Societies

    • A major reason for the litigation was the lack of a uniform approach in the deemed-conveyance orders.
    • Satellite Tower CHSL had been granted only 4,864.21 sq. metres, corresponding to its building’s plinth area. Sadguru Complex 1 (AB) CHSL was granted just 643.81 sq. metres, even though its plinth itself measured approximately 959.69 sq. metres.
    • In contrast, Sadguru Complex 1 (CD) CHSL was granted 2,134.15 sq. metres, including a proportionate share in the recreational-ground area, after applying a BUA-based calculation.
    • The High Court noted that the Competent Authority had therefore failed to apply a uniform yardstick to societies situated within the same layout.

    TDR Created an Unusual Land-Sharing Problem

    • The case became more complex because TDR had not been uniformly used across the buildings.
    • Satellite Garden I had no TDR loaded on it. Sadguru AB had 720 sq. metres of TDR, Sadguru CD had 3,086.08 sq. metres, while Satellite Tower had a massive 14,949.6 sq. metres of TDR, over its base BUA of 5,778 sq. metres.
    • The Court explained that blindly dividing land according to the final total BUA would create an anomalous result. Satellite Tower, whose base BUA represented only about 25% of the base BUA, could end up receiving more than 50% of the layout land because of the later loading of substantial TDR.
    • The Court described this as a potential windfall and noted that Satellite Garden I, where no TDR had been used, would consequently be disadvantaged.

    Society’s Right to Land Crystallises Four Months After Formation

    • The most important part of the judgment is the set of principles formulated by the High Court for future deemed-conveyance disputes.
    • Justice Marne held that the right to obtain conveyance of land and building accrues to the organisation of flat purchasers upon expiry of the statutory period prescribed by Section 11 of MOFA read with Rule 9 of the MOF Rules.
    • Accordingly, in a layout development, the proportionate land that ought to have been conveyed to a society crystallises and freezes when four months expire from the society’s formation.
    • This means that a developer cannot ordinarily reduce the society’s proportionate land entitlement simply by obtaining revised plans at a later stage.

    Subsequent Revised Plans Cannot Automatically Reduce Earlier Society’s Share

    • The Court held that proportionate land division should ordinarily be determined with reference to either the first sanctioned plan or the plan existing when the society’s right crystallised upon expiry of the Rule 9 period.
    • The Competent Authority must therefore consider the sanctioned plan existing when four months expired from formation of the organisation of flat purchasers.
    • This principle has considerable practical importance in phased developments where developers continue construction for several years and repeatedly revise the sanctioned layout.
    • An earlier society’s entitlement cannot simply continue shrinking every time another building is introduced or additional development potential is subsequently loaded onto the plot.

    Written Consent Can Alter the Position

    • The Court, however, created an important exception.
    • Where flat purchasers of an earlier building or their society have given written consent to modification or revision of the layout plan, proportionate land division may be undertaken by considering the plan carrying such consent.
    • Thus, the Court did not impose an inflexible first-plan rule. The relevant plan would ordinarily be the plan existing when the statutory right crystallised, or a subsequent plan supported by the requisite written consent, whichever is later.

    Developers Must Warn Buyers About TDR and Incentive FSI

    • The judgment also places an important disclosure responsibility on promoters and developers.
    • The Court held that developers and promoters must give adequate notice to flat purchasers where buildings are proposed to be constructed using incentive FSI or TDR, including warning purchasers of the potential risk that the land ultimately conveyed to their society may be less than the BUA consumed by their building.
    • This observation strengthens the importance of disclosures in agreements for sale and sanctioned layout plans in phased developments.

    Use of TDR Does Not Always Mean Conveyance Must Be Restricted to Plinth Area

    • The Court also examined the Maharashtra Government’s GR dated June 22, 2018, which contains guidelines for deemed conveyance.
    • The GR provides, among other things, that where TDR is utilised in a layout, conveyance may be made according to the plinth and appurtenant area.
    • However, the High Court noted that its earlier ruling in Neelkanth Mansion and Infrastructure Pvt. Ltd. had already clarified that use of TDR does not mean that proportionate land division must be abandoned in every case.
    • Where difficulties arise because of unequal TDR loading during an incomplete layout development, plinth-and-appurtenant-area conveyance can operate as a transitional mechanism. It is not necessarily an immutable rule for final division of layout land.

    Deemed Conveyance Is Not Final Determination of Title

    • Another important clarification concerns the jurisdiction of the Competent Authority.
    • The High Court observed that deemed conveyance granted under Section 11 of MOFA is not finally determinative of all competing rights and title claims in the land.
    • If a developer or another society believes that it has an entitlement contrary to the land division determined by the Competent Authority, it can approach the Civil Court.
    • At the same time, a society seeking application of the crystallisation/freezing principle should not itself be forced into civil litigation merely to obtain its proportionate deemed conveyance.

    Court Rejects 2010 Plan as Basis for Land Distribution in Present Case

    • Applying these principles to the societies before it, the High Court held that the land distribution could not properly be based upon the revised sanctioned plan dated July 9, 2010, under which substantial slum TDR had been loaded on Sadguru CD and Satellite Tower.
    • The deemed conveyance granted to Sadguru CD based upon that revised plan was therefore found unsustainable. Similarly, the conveyances restricting Satellite Tower and Sadguru AB merely to plinth areas were also liable to be set aside.
    • Instead, the Court directed that the exercise should be undertaken by reference to the BUA figures reflected in the layout plan dated March 10, 2005.

    Court Identifies BUA Figures for Fresh Land-Division Exercise

    For purposes of the fresh exercise, the High Court identified the following BUA figures:

    • Satellite Garden Phase I โ€” 11,186.41 sq. metres
    • Sadguru AB โ€” 3,126.32 sq. metres
    • Sadguru CD โ€” 830.92 sq. metres
    • Satellite Tower โ€” 5,778 sq. metres

    The Court directed that these figures be used as the basis for proportionate division of the entire Sub-Plot A.

    Significantly, the Court explained that this is essentially a notional subdivision of layout land. Physical division may not always be possible because internal roads, amenities and other common spaces are spread across the layout.

    Three Deemed-Conveyance Orders Set Aside

    • The Bombay High Court ultimately set aside all three impugned orders passed by the Competent Authority:
    • the October 31, 2025 order concerning Sadguru Complex 1 (CD) CHSL; the May 16, 2024 order concerning Satellite Tower CHSL; and the March 6, 2025 order concerning Sadguru Complex 1 (AB) CHSL.
    • All three applications were remanded to the Competent Authority for fresh adjudication.
    • The Competent Authority was directed to obtain a fresh certificate from architect Aniket Mathakar showing distribution of the entire 21,807.18 sq. metres of Sub-Plot A on the basis of the BUA figures identified by the Court.
    • The authority must then freshly determine each society’s land entitlement while applying the principles laid down in the judgment.
    • All three writ petitions were accordingly disposed of, with no order as to costs.

    Seven Principles Laid Down by Bombay High Court

    For housing societies, developers and conveyancing authorities, the judgment can be distilled into seven major rules:

    • The right to conveyance accrues upon expiry of the Section 11/Rule 9 period.
    • the society’s proportionate land entitlement then crystallises and freezes
    • later plan revisions cannot ordinarily diminish that entitlement.
    • land division should generally follow the sanctioned plan existing at crystallization.
    • a later plan may be considered where the earlier purchasers or society have given written consent.
    • parties asserting contrary title rights can approach the Civil Court.
    • developers must adequately disclose the use of TDR/incentive FSI and the consequent risk to land entitlement.

    Why the Judgment Matters

    The ruling has potentially wide significance for deemed conveyance and redevelopment of multi-building housing layouts in Maharashtra.

    The central principle is that an earlier society’s land rights cannot remain indefinitely fluid while a developer repeatedly changes plans, introduces new buildings or loads additional TDR over several years.

    By fixing the relevant point at which the society’s proportionate entitlement โ€œcrystallises and freezes,โ€ the judgment provides a framework for balancing the rights of earlier flat purchasers against subsequent lawful development within the same layout.

    At the same time, the Court has preserved the jurisdiction of civil courts where complicated questions of title or competing substantive rights require a full evidentiary adjudication.

    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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  • Supreme Court Acquits Two in NDPS Case Over Broken Chain of Custody: Says FSL Report Cannot Survive Serious Gaps in Sample Integrity

    Supreme Court Acquits Two in NDPS Case Over Broken Chain of Custody: Says FSL Report Cannot Survive Serious Gaps in Sample Integrity

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

    Date: 17.09.2026

    Supreme Court Acquits Two in NDPS Case Over Broken Chain of Custody: Says FSL Report Cannot Survive Serious Gaps in Sample Integrity

    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 has acquitted two persons convicted in a narcotics case after finding serious deficiencies in the prosecution’s evidence concerning the identification, sealing, safekeeping and movement of samples allegedly drawn from the seized contraband.

    In Abdul Rajik v. State of M.P. along with Govind v. State of M.P., 2026 INSC 1001, a Bench of Justice Sandeep Mehta and Justice Manmohan held that the link evidence had been completely breached, undermining the sanctity and integrity of the samples. Once the Forensic Science Laboratory (FSL) report was excluded, there was no legally admissible evidence establishing that the seized substance was charas.

    Background of the NDPS Case

    • The prosecution alleged that on November 29, 2004, police in Jabalpur received information that two persons were carrying charas in bags. A raiding team intercepted Abdul Rajik and Govind at Bandariya Tiraha.
    • According to the prosecution, 1 kilogram of suspected charas was recovered from Abdul Rajik’s bag and 800 grams from Govind’s bag. Samples were drawn and the accused were arrested. The FSL subsequently reported that the samples were charas.
    • The Special NDPS Court convicted both accused. Abdul Rajik was sentenced to 10 years’ rigorous imprisonment with a fine of โ‚น1 lakh, while Govind was sentenced to eight years’ rigorous imprisonment with a fine of โ‚น80,000. The Madhya Pradesh High Court dismissed their appeals in November 2010 and affirmed the convictions.
    • The matter ultimately reached the Supreme Court.

    Sections 42 and 50 Not Applicable to Search of Bags in Public Place

    • The accused argued, among other things, that the mandatory requirements of Sections 42, 50 and 52A of the Narcotic Drugs and Psychotropic Substances Act, 1985 had not been complied with.
    • The Supreme Court, however, did not accept the challenge based on Sections 42 and 50.
    • It observed that the alleged recovery was from bags being carried by the accused when they were apprehended in an open public place. Consequently, the Court held that neither Section 42 nor Section 50 applied to the search and seizure in the circumstances of the case.
    • The acquittal instead turned principally on the failure to establish reliable link evidence and chain of custody, considered alongside total non-compliance with Section 52A.

    Supreme Court Finds Serious Problems With Identification of Samples

    • The Court closely examined the evidence of the seizure officer regarding the manner in which representative samples were drawn and sealed.
    • It found that the officer did not state that the sample packets themselves had been sealed by him or that identifiable markings โ€” such as signatures or thumb impressions of the accused, panch witnesses or seizure officer โ€” had been placed on those packets.
    • The sample packets were also not separately produced and exhibited when the muddamal articles were produced before the trial court.
    • The Court further examined the sample panchnamas and found no indication that the packets had been secured with signatures or identifiable chits enabling the samples subsequently tested by the FSL to be correlated with the contraband allegedly recovered from each accused. Even the FSL report did not refer to signatures or thumb impressions on the sample packets.

    Missing Link Between Maalkhana and FSL

    • Another major deficiency concerned the prosecution’s failure to establish the movement and safe custody of the samples.
    • Although the maalkhana register recorded the deposit of samples on November 29, 2004, the Supreme Court noted that there was no corresponding entry recording their exit from the police station for transportation to the FSL.
    • The prosecution also failed to prove documents such as the police station forwarding letter and road certificates that could establish the link between seizure, storage and delivery to the laboratory.
    • The Court stressed that evidence regarding safe custody is crucial because the prosecution must demonstrate that the very samples drawn from the seized substance reached the forensic laboratory without substitution, interference or unexplained gaps.

    Unexplained Five-Day Gap Further Breaks Chain of Custody

    • The Court identified another material discrepancy.
    • The forwarding letter from the Office of the Superintendent of Police was dated December 1, 2004, whereas the FSL report recorded that the samples were received through Constable Ramkrishna on December 6, 2004.
    • The prosecution provided no explanation as to where the samples remained and in whose custody they were kept during this five-day period. The carrier constable was also not examined.
    • The Supreme Court described this unexplained five-day gap as a grave discrepancy that completely breached the link in the chain of custody.

    Chain of Custody Essential Before FSL Report Can Be Relied Upon

    • The Supreme Court laid down an important evidentiary principle for NDPS prosecutions: the prosecution must establish through proper link evidence that samples extracted from the alleged contraband were properly sealed and remained in a safe and secure condition from seizure until receipt by the FSL.
    • For an FSL report to be relied upon, the prosecution must establish through credible oral and documentary evidence a complete chain of custody preserving the integrity and sanctity of the samples.
    • This assumes particular significance in NDPS prosecutions because the chemical analysis ordinarily provides the scientific foundation for establishing whether the recovered material was in fact a prohibited narcotic drug or psychotropic substance.

    Total Non-Compliance With Section 52A

    • The Supreme Court also considered compliance with Section 52A of the NDPS Act, which provides safeguards relating to inventory, photographs and representative sampling of seized narcotic substances.
    • The Court clarified that mere non-compliance with Section 52A or the applicable Standing Orders/Rules does not automatically vitiate every trial or result in acquittal. The relevant question includes whether and to what extent the non-compliance caused prejudice to the accused.
    • However, the Court distinguished minor procedural lapses from complete non-compliance. It found that in the present case no effort whatsoever was made to undertake the Section 52A procedure for drawing representative samples in the presence of a Magistrate, amounting to total non-compliance.

    Supreme Court Relies on Earlier NDPS Precedents

    • The Court referred to Narcotics Control Bureau v. Kashif, (2024) 11 SCC 372, and Bharat Aambale v. State of Chhattisgarh, (2025) 8 SCC 452, while explaining that Section 52A non-compliance does not by itself automatically lead to acquittal and that prejudice and evidentiary consequences must be examined.
    • It also relied upon Nadeem Ahamed v. State of West Bengal, 2025 SCC OnLine SC 1779, where failure to draw representative samples before a Magistrate and absence of a certified inventory were held to undermine the integrity of the seizure and sampling process.
    • The Court further referred to State of Rajasthan v. Tara Singh, (2011) 11 SCC 559, which emphasised the significance of accounting for the custody of seized samples between dispatch and receipt at the laboratory, particularly given the stringent penalties under the NDPS Act.

    FSL Report Discarded

    • Applying these principles, the Supreme Court concluded that the link evidence had been totally breached, resulting in the collapse of the sanctity and integrity of the samples.
    • Consequently, the FSL report could no longer safely be relied upon and had to be discarded.
    • Once the FSL report was excluded, there was no other legally admissible evidence proving that the substance allegedly recovered from Abdul Rajik and Govind was charas within Section 2(iii)(a) of the NDPS Act, an essential foundational fact for attracting penal consequences under Section 20.

    Burning Suspected Substance Is Not Scientific Proof of Charas

    • The Supreme Court also rejected the seizure officer’s assertion that the suspected substance had been tested by burning a portion of it and could therefore be identified as charas.
    • The Court found no scientific material demonstrating that a substance could reliably be identified as charas merely by burning it. Accordingly, such testimony could not substitute for reliable scientific evidence establishing the identity of the alleged contraband.

    Supreme Court Acquits Both Accused

    • The Court ultimately held that the prosecution had failed to prove that the substance recovered from the accused was charas.
    • It therefore found the convictions recorded by the Special NDPS Court and affirmed by the Madhya Pradesh High Court unsustainable in law and extended the benefit of doubt to both appellants.
    • The Supreme Court set aside the conviction and sentence and acquitted Abdul Rajik and Govind of all charges. Since both were already on bail, the Court directed that they need not surrender and discharged their bail bonds. The appeals were accordingly allowed.

    Key Legal Takeaway

    The judgment reinforces that in NDPS prosecutions, an FSL report cannot be viewed in isolation from the evidentiary chain connecting the tested sample with the substance allegedly seized from the accused. While every procedural irregularity under Section 52A does not automatically result in acquittal, total non-compliance coupled with serious defects in identification, sealing, safekeeping and movement of samples can destroy the prosecution’s link evidence.

    Where that breakdown makes it impossible to establish that the substance scientifically tested was the same substance allegedly recovered from the accused, the forensic report may lose its evidentiary foundation.

    Connected Matter

    Supreme Court Acquits Man Sentenced to 10 Years; Finds Serious Lapses in NDPS Sampling Procedure

    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

  • Gujarat High Court: Raiding Officer Cannot Himself Be the Gazetted Officer Offered for Search Under Section 50 NDPS Act

    Gujarat High Court: Raiding Officer Cannot Himself Be the Gazetted Officer Offered for Search Under Section 50 NDPS Act

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

    Date: 16.09.2026

    Gujarat High Court: Raiding Officer Cannot Himself Be the Gazetted Officer Offered for Search Under Section 50 NDPS Act

    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 Gujarat High Court has suspended the 15-year rigorous imprisonment imposed on two persons convicted in a commercial-quantity NDPS case and granted them bail pending their criminal appeals, after finding a prima facie issue of non-compliance with Section 50 of the Narcotic Drugs and Psychotropic Substances Act, 1985.

    A Division Bench comprising Justice Ilesh J. Vora and Justice R.T. Vachhani, in Moneshkumar Sukhenbhai Garange v. State of Gujarat, passed the common interim order on 29 April 2026 in Criminal Misc. Application No. 1 of 2026 in Criminal Appeal Nos. 408 and 685 of 2026.

    The Court found substance, at the prima facie stage, in the contention that the raiding officer could not have offered the accused an option of being searched before himself, in addition to the statutory alternatives of a Magistrate or Gazetted Officer. The Bench accordingly suspended the sentence during pendency of the appeals.

    Importantly, the order is not a final acquittal. The High Court expressly clarified that its observations are tentative and prima facie and will not affect the final hearing of the criminal appeals.

    Two Accused Sentenced to 15 Years in Mephedrone Case

    • The applicants, original Accused Nos. 1 and 2, had been convicted under Sections 8(c), 22(c) and 29 of the NDPS Act by the Additional Sessions Judge, Ahmedabad, in Special NDPS Case No. 42 of 2023.
    • By judgment dated 25 November 2025, they were sentenced to 15 years’ rigorous imprisonment and a fine of โ‚น2 lakh. They subsequently filed criminal appeals before the Gujarat High Court and sought suspension of sentence and bail during pendency of those appeals.

    Prosecution Alleged 118.240 Grams of Mephedrone Was Recovered

    • According to the prosecution, SOG Ahmedabad received secret information on 5 February 2023 that the accused had travelled to Rajasthan to obtain MD drugs and were returning to Ahmedabad in a Ford car.
    • Police recorded the information, transmitted it to a superior officer and intercepted the vehicle while it was allegedly entering Ahmedabad from the Gandhinagar-Koba Circle side towards Indira Bridge.
    • During the personal search, police claimed to have recovered 59.150 grams of mephedrone from Himesh Garange and 59.090 grams from Monesh Garange, making a total alleged recovery of 118.240 grams.
    • The prosecution examined 15 witnesses and produced 51 documents during trial. Accused Nos. 1 to 3 were eventually convicted under Sections 8(c) and 22(c) read with Section 29 of the NDPS Act.

    Accused Challenge Search Under Section 50 NDPS Act

    • Senior Advocate Yatin Oza, appearing for the applicants, raised several objections to the conviction.
    • A principal contention was that there had been non-compliance with Section 50 of the NDPS Act, which provides safeguards when an authorised officer is about to search a person.
    • The accused had allegedly been told that they could be searched before a Gazetted Officer, the nearest Magistrate, or before PW-8 B.P. Chaudhary himself, who was the raiding officer and a Gazetted Officer.
    • The defence argued that Section 50 does not contemplate such a โ€œthird optionโ€ and that the raiding officer could not simultaneously offer himself as the Gazetted Officer before whom the accused could choose to be searched.
    • Other arguments were also raised concerning Sections 42 and 43 and the handling and custody of samples, including alleged inconsistencies concerning the colour of the contraband, dispatch particulars and non-examination of the person who carried the samples to the FSL.
    • The High Court, however, primarily focused on the Section 50 issue while considering whether the sentence should be suspended.

    State Invokes Commercial Quantity and Section 37 Rigours

    • The State opposed the applications, arguing that the trial court had correctly convicted the applicants on the basis of the evidence.
    • It maintained that the police officers were duly empowered to conduct the search and seizure and that the accused had been informed of their rights under Section 50 before consenting to the search.
    • The prosecution also relied upon the presumptions under Sections 35 and 54 of the NDPS Act and emphasised that the case involved commercial quantity. It therefore contended that the stringent requirements of Section 37 of the NDPS Act should apply even at the stage of considering suspension of sentence and bail pending appeal.

    Appellate Court Must Examine Whether Conviction Has Fair Chance of Being Set Aside

    • The Gujarat High Court referred to the Supreme Court’s decision in Om Prakash Sahni v. Jai Shankar Chaudhary & Anr., (2023) 6 SCC 123 on the principles governing suspension of sentence pending appeal.
    • The Court noted that, while deciding such an application, the appellate court may examine whether there is something apparent or gross on the face of the record that gives rise to a prima facie conclusion that the conviction may ultimately not be sustainable.
    • The Bench was conscious that the evidence could not be fully re-analysed at the interim stage. However, because the conviction was based upon the contraband allegedly recovered during the applicants’ personal searches, the Court considered compliance with Section 50 to be particularly significant.

    Section 50 Safeguard Must Be Properly Communicated

    • The High Court referred to the Constitution Bench judgment in State of Punjab v. Baldev Singh, (1999) 6 SCC 172.
    • The Constitution Bench had explained that an accused about to be personally searched must be informed of the existence of the right under Section 50(1) to be searched before the nearest Gazetted Officer or Magistrate. Failure to observe the statutory safeguard can render recovery from the personal search suspect and affect a conviction based upon that recovery.
    • The Gujarat High Court then considered the more specific issue of whether the searching officer could introduce a third alternative.

    Supreme Court’s Parmanand Judgment: โ€œThird Optionโ€ Can Vitiate Section 50 Compliance

    • The Bench placed significant reliance on State of Rajasthan v. Parmanand & Anr., (2014) 5 SCC 345.
    • In Parmanand, the Supreme Court emphasised that communication of the right under Section 50 must be clear, unambiguous and individual, because the safeguard is intended to protect an accused against the possibility of false implication in cases carrying stringent punishments.
    • More importantly, the Supreme Court had disapproved of an accused being told that, besides the nearest Magistrate or Gazetted Officer, he could be searched before a senior police officer who was himself part of the raiding party.
    • The Supreme Court reasoned that the statutory safeguard is intended to give the accused the opportunity of a search in the presence of an independent officer. Providing a third option not contemplated by Section 50 could frustrate that protection.

    Searching Officer Cannot Act in Dual Capacity

    • The Gujarat High Court also discussed State of Rajasthan v. Ram Chandra.
    • The Supreme Court had explained that if the officer proposing to conduct the search is himself a Gazetted Officer and gives the accused the option of being searched in his own presence, the requirement of Section 50 would not be satisfied because the searching officer cannot act in a dual capacityโ€”both as the officer conducting the search and as the Gazetted Officer before whom the accused is offered the statutory choice of search.
    • This distinction became central to the Gujarat High Court’s consideration of the present applications.

    Raiding Officer Offered Himself as an Option: Gujarat High Court

    • On examining the evidence of PW-8 and the written notices at Exhibits 80 and 82, the High Court found that PW-8, who was himself the raiding officer, had informed the accused that they could be searched before him, a Magistrate or any Gazetted Officer.
    • The Bench consequently recorded a prima facie view that the raiding officer could not have given the accused an option to be searched before himself.
    • Relying on Parmanand and the Supreme Court’s decision in State of Himachal Pradesh v. Surat Singh, the High Court held that there was substance in the applicants’ argument concerning non-compliance with Section 50 of the NDPS Act.

    15-Year Sentence Suspended; Accused Granted Bail

    • Without undertaking an extensive examination of the merits, the Division Bench held that the circumstances justified exercise of discretion in favour of the applicants.
    • The Court therefore suspended the 15-year sentence imposed by the Special NDPS Judge during pendency of the criminal appeals and directed that the applicants be released on bail upon furnishing a personal bond of โ‚น10,000 each with one surety each of the like amount.
    • The accused were directed not to leave India without prior permission of the High Court, to appear when the appeals are taken up for final hearing and to intimate any change in address to the concerned police station and the Court.

    Bail Order Does Not Set Aside NDPS Conviction

    • The legal effect of the order needs to be distinguished from a final decision on the appeals.
    • The Gujarat High Court has not acquitted the applicants or finally declared the search illegal. Their convictions remain under challenge in the pending criminal appeals.
    • The Court specifically stated that the observations in the suspension-of-sentence order are โ€œtentative and prima-facie in natureโ€ and shall not come in the way when the appeals are heard finally.

    Why the Order Is Significant

    The order reiterates the importance of strict adherence to procedural safeguards in cases involving personal search under the NDPS Act, particularly where the alleged recovery forms the principal basis of conviction.

    It also highlights a crucial distinction under Section 50: merely informing an accused about a Gazetted Officer or Magistrate may not necessarily cure the process if the notice simultaneously introduces a legally impermissible option that could dilute or confuse the statutory right.

    The Gujarat High Court’s prima facie reasoning therefore reinforces the proposition that the officer proposing to conduct the personal search cannot present himself as the independent Gazetted Officer contemplated by the Section 50 safeguard.

    At the same time, because the present order concerns only suspension of sentence pending appeal, the final determination of the legality of the search, conviction and evidentiary issues remains open.

    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: Gujarat High Court

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  • Gujarat High Court: Trademark Application Cannot Be Denied Advertisement Merely Due to Section 11(1) Objection

    Gujarat High Court: Trademark Application Cannot Be Denied Advertisement Merely Due to Section 11(1) Objection

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

    Date: 16.09.2026

    Gujarat High Court: Trademark Application Cannot Be Denied Advertisement Merely Due to Section 11(1) Objection

    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 Gujarat High Court has allowed an appeal filed by Lincoln Pharmaceuticals Private Limited against the rejection of its trademark application for โ€œGLYPANTAโ€, holding that Section 20 of the Trade Marks Act, 1999 permits advertisement of a trademark application despite objections under Section 11(1).

    Justice Mauna M. Bhatt, by an order dated 20 November 2025 in Lincoln Pharmaceuticals Private Limited v. Registrar of Trade Marks & Anr., R/Civil Appeal No. 7 of 2025, quashed the Trade Marks Registry’s rejection order dated 11 August 2025 and directed the Registry to proceed with advertisement of the application within three months.

    The ruling does not amount to final registration of โ€œGLYPANTA.โ€ The Court directed advertisement of the application, leaving any opposition to be considered independently on its merits.

    Lincoln Pharmaceuticals Sought Registration of โ€˜GLYPANTAโ€™

    • Lincoln Pharmaceuticals had filed an application on 22 August 2023 under Section 18(1) of the Trade Marks Act, 1999, seeking registration of the mark โ€œGLYPANTA.โ€
    • The application was examined by the Trade Marks Registry, which issued an examination report raising objections. Lincoln Pharmaceuticals responded through a detailed reply dated 30 October 2023, raising various grounds in support of registration.
    • According to the pharmaceutical company, however, the grounds raised in its response were not properly considered before the application was ultimately rejected on 11 August 2025.
    • The rejection prompted Lincoln Pharmaceuticals to approach the Gujarat High Court under Section 91 of the Trade Marks Act.

    Section 11(1) Objection Raised Over Similar Trademark

    • The principal objection before the Registry arose under Section 11(1) of the Trade Marks Act, which deals with relative grounds for refusal of trademark registration, including situations where similarity with an earlier trademark may create a likelihood of confusion.
    • Lincoln Pharmaceuticals argued that the objection was unsustainable and that its detailed response to the examination report had not been properly considered.
    • One of the company’s key arguments was that even where competing pharmaceutical trademarks fall within the same class, differences in the composition of the respective pharmaceutical products may constitute an additional mitigating factor while assessing likelihood of confusion.

    Delhi High Courtโ€™s Elyon Pharmaceuticals Decision Cited

    • To support this argument, Lincoln Pharmaceuticals relied upon the Delhi High Court’s decision in Elyon Pharmaceuticals Pvt. Ltd. v. Registrar of Trademarks, C.A. (COMM.IPD-TM) 153/2021, decided on 23 August 2023.
    • In that case, the Delhi High Court had considered the marks โ€œELEMENTALโ€ and โ€œELMENTINโ€ and observed that differences in the pharmaceutical composition of products could provide an additional mitigating consideration when examining the possibility of public confusion.
    • Lincoln Pharmaceuticals relied on this reasoning to argue that the Registry’s Section 11(1) objection against โ€œGLYPANTAโ€ should not have resulted in rejection of its application in the manner adopted.

    Company Says โ€˜GLYPANTAโ€™ Was Already in Use Since 2023

    • Another argument raised before the High Court was that the Registry had relied upon trademarks that were proposed to be used, whereas Lincoln Pharmaceuticals claimed that โ€œGLYPANTAโ€ had been in use since 2023 and had acquired a substantial market for the product.
    • The company also objected to the fact that its application had been rejected before publication in the Trade Marks Journal.
    • Its contention was that publication would enable the statutory process to proceed and, if any third party wished to oppose the application, such opposition could thereafter be considered in accordance with law.

    Section 20 Permits Advertisement Despite Section 11 Objections: Lincoln Pharmaceuticals

    • Lincoln Pharmaceuticals placed particular reliance upon Section 20 of the Trade Marks Act, 1999.
    • It argued that even where objections under Sections 11(1) or 11(2) exist, the statutory framework permits advertisement of a trademark application.
    • The company therefore sought an opportunity for its application to be advertised rather than being rejected outright before publication.
    • The Registry’s counsel also raised an issue concerning non-joinder of the opposition party. Lincoln Pharmaceuticals responded that no private respondent was required at that stage because the challenge concerned rejection of the application before publication.
    • The High Court recorded that counsel appearing for the respondents could not dispute the provisions of Section 20.

    Gujarat High Court Relies on Section 20

    • After considering the submissions, Justice Mauna M. Bhatt noted that Section 20 permits advertisement despite objections under Section 11(1).
    • On that basis, the Court allowed Lincoln Pharmaceuticals’ appeal and quashed and set aside the Trade Marks Registry’s order dated 11 August 2025.
    • The Registry was then specifically directed to proceed with advertisement of the subject trademark application in accordance with the proviso to Section 20 of the Trade Marks Act.
    • The Court directed that the exercise be completed within three months from receipt of its order.

    Any Opposition to โ€˜GLYPANTAโ€™ Must Be Decided on Its Own Merits

    • Significantly, the High Court did not direct the Registry to grant final registration of โ€œGLYPANTA.โ€
    • Instead, the Court restored the application to the stage of advertisement. It expressly provided that if any opposition is filed against the trademark application after advertisement, such opposition must be decided on its own merits.
    • Thus, Lincoln Pharmaceuticals succeeded in having the rejection order set aside and obtaining publication of its application, but the ultimate registrability of โ€œGLYPANTAโ€ remains subject to the statutory process, including any opposition that may be filed.

    Why the Judgment Matters for Trademark Applicants

    • The order is significant for trademark prosecution because it highlights the distinction between an examination-stage objection and the subsequent advertisement/opposition process.
    • In the circumstances before it, the Gujarat High Court relied on Section 20 to permit the application to proceed to advertisement despite the Section 11(1) objection, rather than allowing the pre-publication rejection to stand.
    • The decision is particularly relevant to pharmaceutical trademark applications, where the Registry frequently examines competing marks closely because of concerns regarding similarity and confusion. The case also demonstrates that factors such as the nature and composition of competing pharmaceutical products may be raised by an applicant while responding to relative-ground objections, though the Gujarat High Court did not finally adjudicate the merits of the โ€œGLYPANTAโ€ mark’s registrability in this order.

    Key Legal Takeaway

    The immediate principle emerging from the order is that the existence of a Section 11(1) objection does not, by itself in the circumstances considered by the Court, prevent the application from being advertised under Section 20.

    At the same time, advertisement should not be confused with registration. Publication gives third parties an opportunity to oppose the mark, and the Registry retains the responsibility to determine any such opposition on its merits.

    Connected Matter

    Delhi High Court Sets Aside Rejection of โ€œELMENTINโ€ Trademark; Says Phonetic Similarity Must Be Assessed by Look, Sound and Surrounding Circumstances

    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: Gujarat High Court

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  • Bombay HC Quashes Upa-Lokayukta Order Cancelling 1984 Mutation Entry; Holds Recommendatory Powers Cannot Replace Statutory Appellate Jurisdiction

    Bombay HC Quashes Upa-Lokayukta Order Cancelling 1984 Mutation Entry; Holds Recommendatory Powers Cannot Replace Statutory Appellate Jurisdiction

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

    Date: 16.09.2026

    Bombay HC Quashes Upa-Lokayukta Order Cancelling 1984 Mutation Entry; Holds Recommendatory Powers Cannot Replace Statutory Appellate Jurisdiction

    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 .  

    โ€‹โ€‹โ€‹The Bombay High Court, Nagpur Bench, has set aside an order of the Upa-Lokayukta, Maharashtra, which had recommended cancellation of a decades-old mutation entry and recovery of possession of agricultural land, holding that the Upa-Lokayukta had exceeded the jurisdiction available under the Maharashtra Lokayukta and Upa-Lokayuktas Act, 1971.

    Justice Pravin S. Patil, deciding Rajendra s/o Bhagirath Bansile & Ors. v. The Up Lok-Ayukta, Maharashtra State & Anr., Writ Petition No. 5794 of 2013, 2026:BHC-NAG:11956, held that while the Upa-Lokayukta possesses recommendatory jurisdiction, such powers cannot be exercised as a substitute for the statutory powers vested in authorities under the Maharashtra Land Revenue Code.

    The Court ultimately restored Mutation Entry No. 97 relating to Survey No. 84/3, Gat No. 216, in favour of the petitioners.

    Dispute Over Agricultural Land and Mutation Entry

    • The petitioners claimed to be co-owners of agricultural land bearing Gat No. 216, Old Survey No. 84/3, situated at village Pimpalgaon (Chilamkha), Tahsil Deulgaon Raja, District Buldhana.
    • According to them, Bhagirath Ramdas Bansile, father of the first two petitioners, had been cultivating and possessing approximately 5.05 hectares of land out of Survey No. 84/3, with his name appearing in the crop statement since 1973-74.
    • In March 1989, the land was partitioned between Bhagirath Bansile and his four sons, following which their names were mutated in the revenue records. Petitioners 3 to 5 subsequently purchased 3.05 hectares through a registered sale deed dated 5 February 2009 and their names were also entered in the revenue records.

    Complaint Before Upa-Lokayukta Questioned 1984 Revenue Entry

    • The controversy began when the second respondent lodged a complaint before the Upa-Lokayukta on 7 August 2009.
    • The complaint alleged, among other things, that certain lands had wrongly been reflected as Occupant Class-I instead of Class-II, and that the sale in favour of some of the petitioners had been effected without obtaining the Collector’s permission or depositing the alleged unearned income.
    • It was further alleged that Survey No. 84/3 had not been allotted to Bhagirath Bansile during consolidation proceedings in 1984 and that the Consolidation Officer had allegedly extended undue favour by causing the land to be mutated in his name.
    • Following the complaint, the Upa-Lokayukta initiated an inquiry and sought reports from revenue officers.

    SDO Had Already Ordered Regularisation in 2013

    • During the pendency of the Upa-Lokayukta proceedings, the Sub-Divisional Officer, Buldhana, by an order dated 24 May 2013, granted permission for regularisation of the land in the petitioners’ names and forwarded the matter to the Tahsildar, Deulgaon Raja for further action.
    • The revenue authorities also placed this development before the Upa-Lokayukta.
    • Nevertheless, on 7 August 2013, the Upa-Lokayukta passed the impugned order recommending cancellation of the mutation entries in favour of the petitioners and steps for recovery of possession.
    • The petitioners consequently approached the Bombay High Court.

    Three-Year Limitation Under Section 8(5)

    • One of the central issues before the High Court concerned Section 8(5) of the Maharashtra Lokayukta and Upa-Lokayuktas Act, 1971.
    • The provision distinguishes between a complaint involving a โ€œgrievanceโ€ and one involving an โ€œallegation.โ€
    • Under Section 8(5), a complaint involving an allegation cannot be investigated if it is made after three years from the date on which the complained-of action is alleged to have taken place. The statutory proviso permitting consideration of sufficient cause applies to the period concerning a โ€œgrievance,โ€ rather than providing a similar extension for an allegation beyond the prescribed three-year period.
    • The Act defines an โ€œallegationโ€ in relation to a public servant to include assertions involving abuse of position to obtain gain or favour, improper or corrupt motives, corruption or lack of integrity. A โ€œgrievance,โ€ on the other hand, concerns a claim of injustice or undue hardship resulting from maladministration.

    Complaint Was an โ€œAllegationโ€, Not Merely a โ€œGrievanceโ€: High Court

    • After examining the complaint, the High Court held that it fell within the category of an โ€œallegation.โ€
    • The complaint accused the authorities of extending undue favour to Bhagirath Bansile while effecting the revenue entry. Consequently, the applicable limitation period was three years from the complained-of action.
    • The impugned Mutation Entry No. 97 was dated 30 April 1984, whereas the complaint before the Upa-Lokayukta was lodged only on 7 August 2009.
    • The High Court therefore found that the complaint was prima facie barred by limitation and held that, in view of the mandate of Section 8(5), the Upa-Lokayukta could not investigate the complaint.

    Upa-Lokayukta Has Recommendatory, Not Appellate, Jurisdiction

    • The second major issue concerned the nature and extent of the Upa-Lokayukta’s powers.
    • The State relied upon the Supreme Court’s decision in Additional Tahsildar & Anr. v. Urmila G. & Ors., (2023) 20 SCC 642, contending that the Lokayukta/Upa-Lokayukta exercises recommendatory jurisdiction.
    • The High Court accepted the principle that the Upa-Lokayukta can make recommendations to the competent authorities. However, Justice Patil emphasised that a Lokayukta or Upa-Lokayukta cannot act as an appellate authority over decisions of competent forums created under other statutes.
    • Where a statute creates its own appeal or revision mechanism, an aggrieved party must pursue those statutory remedies.
    • The Court succinctly observed that โ€œRecommendatory powers cannot take place of statutory powers.โ€

    Upa-Lokayukta Effectively Exercised Land Revenue Powers

    • Although the impugned order was styled as a recommendation under Section 12 of the 1971 Act, the High Court examined its substance rather than merely its title.
    • The Court found that the Upa-Lokayukta had directed the Collector, Buldhana, to cancel Mutation Entry No. 97, forfeit the land to the Government and initiate disciplinary proceedings against the concerned officers.
    • According to the High Court, this demonstrated that the Upa-Lokayukta had effectively exercised powers of an appellate authority under the Maharashtra Land Revenue Code.
    • The Court consequently held that the order was unsustainable in law because the Upa-Lokayukta had exceeded the limits of its statutory jurisdiction.

    Failure to Consider SDO’s Regularisation Order

    • The High Court also took note of the fact that the SDO’s 24 May 2013 regularisation order had been brought to the notice of the Upa-Lokayukta before the impugned order was passed.
    • Despite this, the Upa-Lokayukta’s order did not consider the regularisation decision, even though the High Court regarded it as a fact capable of materially affecting the decision.
    • Thus, apart from the jurisdictional and limitation issues, the Court found that relevant factual and legal aspects had not been appropriately considered.

    Bombay High Court Restores Mutation Entry

    Allowing the writ petition, the Bombay High Court:

    1. quashed and set aside the Upa-Lokayukta’s order dated 7 August 2013 in Case No. ULA/COM/104/2010 (T-15); and
    2. directed restoration of Mutation Entry No. 97 concerning Survey No. 84/3, Gat No. 216, Mouza Pimpalgaon Chilamkha, Taluka Deulgaon Raja, District Buldhana, in favour of the petitioners.

    The Court made no order as to costs.

    Significance of the Judgment

    The judgment draws a clear institutional boundary around the powers of the Lokayukta and Upa-Lokayukta. Their statutory role may include investigation and recommendations, but that role cannot be transformed into an appellate or supervisory jurisdiction over authorities exercising powers under separate enactments.

    The ruling is also significant on limitation under Section 8(5) of the Maharashtra Lokayukta and Upa-Lokayuktas Act, 1971. Where a complaint falls within the statutory category of an โ€œallegation,โ€ the High Court’s reasoning confirms the importance of the prescribed three-year period. Accordingly, the case reinforces two distinct safeguards: statutory limitation on the investigation of stale allegations and jurisdictional limits on recommendatory authorities interfering with decisions governed by separate statutory appeal or revision mechanisms.

    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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  • CESTAT Delhi- Packaging Material Cannot Be Treated at Par with Imported Input Under Advance Authorisation

    CESTAT Delhi- Packaging Material Cannot Be Treated at Par with Imported Input Under Advance Authorisation

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

    Date: 16.09.2026

    CESTAT Delhi- Packaging Material Cannot Be Treated at Par with Imported Input Under Advance Authorisation

    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 & Service Tax Appellate Tribunal (CESTAT), New Delhi has allowed an appeal filed by M/s N.V. Distilleries and Breweries Ltd., setting aside an adjudication order that had sought recovery of customs duty on the allegation that the company violated the conditions of Notification No. 96/2009-Cus dated 11 September 2009 while fulfilling export obligations under the Advance Authorisation Scheme.

    The Principal Bench comprising Dr. Rachna Gupta, Officiating President, and Ms. Hemambika R. Priya, Member (Technical) delivered Final Order No. 51464/2026 on 15 September 2026 in Customs Appeal No. 50064 of 2020.

    The Tribunal drew an important distinction between an input physically incorporated in the exported product and packaging materials used for packing that product, holding that bottles, caps and labels could not be placed at par with the imported Vatted Malt Scotch used in manufacturing Indian Made Foreign Liquor (IMFL).

    The Dispute: Advance Authorisation and Rule 19(2) Benefits

    • N.V. Distilleries was engaged in the manufacture of Indian Made Foreign Liquor (IMFL), Country Liquor, PET bottles and un-denatured spirit. The dispute originated from intelligence received by the Directorate of Revenue Intelligence (DRI), Chandigarh Regional Unit concerning alleged violation of the conditions governing Advance Authorisations.
    • The Department alleged that the appellant had violated the condition contained in Notification No. 96/2009-Cus because, while using duty-free imported inputs under Advance Authorisations, it had also used domestically procured bottles, caps and labels under Rule 19(2) of the Central Excise Rules, 2002 in the exported IMFL.
    • According to the Department, exports manufactured using such domestically procured duty-free materials could not be counted towards discharge of the export obligation under the Advance Authorisations.

    Show Cause Notice Proposed Substantial Customs Duty Recovery

    • A Show Cause Notice dated 20 October 2016 proposed, among other things, recovery of โ‚น1,93,62,179 in customs duty by invoking the bonds executed at the time of duty-free imports and Section 28(4) of the Customs Act, 1962, along with interest under Section 28AA.
    • A further customs duty demand of โ‚น94,20,905 was proposed in respect of two Advance Authorisations on the allegation of failure to fulfil export obligations. The notice also proposed appropriation of amounts already deposited and penalties under Sections 114A and 114AA of the Customs Act, 1962.
    • The proposals in the Show Cause Notice were subsequently confirmed through Order-in-Original No. 14/2019 dated 30 August 2019, leading N.V. Distilleries to approach CESTAT.

    Appellant: Imported VMS and Domestic Packaging Were Different Materials

    • The appellant’s central argument was that the essence of the Advance Authorisation Scheme is that the imported input must be physically incorporated in the resultant export product.
    • In the present case, the appellant had imported Vatted Malt Scotch (VMS) under Advance Authorisation, which was incorporated into the IMFL subsequently exported.
    • However, the bottles, caps and labels were domestically procured under Annexure-45 and Rule 19(2) of the Central Excise Rules. Therefore, according to the appellant, there was no overlapping or double benefit because the imported material and the domestically procured materials were entirely different.
    • The appellant further argued that the Government’s export incentive framework is intended to neutralise domestic taxes and duties so that taxes are not exported. According to it, Advance Authorisation was availed for imported VMS, whereas Annexure-45 was utilised for domestically procured glass bottles, caps and labels, with the duty benefit being claimed only once in each case.
    • Reliance was placed upon the Punjab and Haryana High Court’s decision in R.P. International v. Union of India, 2017 (353) E.L.T. 307 (P&H).

    Revenue: Exemption Notification Must Be Strictly Construed

    1. The Revenue defended the adjudication order by contending that Condition (viii) of Notification No. 96/2009-Cus prohibited counting exports involving inputs sourced under Annexure-45 towards fulfilment of Advance Authorisation obligations.
    2. It alleged that the appellant had simultaneously used domestically sourced duty-free goods and imported duty-free material and had therefore breached the exemption conditions.
    3. The Department also relied upon the Supreme Court decisions in CCE, Chandigarh-I v. Mahaan Dairies, (2004) 11 SCC 798 and Commissioner of Customs (Import), Mumbai v. Dilip Kumar & Company, 2018 (361) E.L.T. 577 (S.C.) to argue that exemption notifications must be strictly interpreted and their conditions strictly complied with.

    CESTAT Examines Meaning of โ€œMaterialsโ€

    • The Tribunal identified the principal question as whether the importer had failed to fulfil its export obligations and violated Notification No. 96/2009-Cus, thereby attracting customs duty, interest and penalties under Sections 114A and 114AA.
    • CESTAT examined the Advance Authorisation framework and noted that the scheme permits duty-free import of inputs physically incorporated in the manufactured or resultant product that is required to be exported.

    Significantly, the Tribunal examined the definition of โ€œmaterialsโ€ under the notification. It noted that the definition separately identifies:

    • raw materials, components, intermediates, consumables, catalysts and parts required for manufacture of the resultant product; and
    • packaging materials required for packing the resultant product.

    This statutory distinction became central to the outcome.

    Packaging Material Is Different From Manufacturing Input: CESTAT

    • CESTAT held that the notification itself differentiates between goods required for manufacture of the resultant product and goods merely used for packaging.
    • In this case, the raw material imported for manufacture of the resultant IMFL was VMS. Bottles, caps and labels, on the other hand, constituted packaging materials domestically procured under Annexure-45.
    • The Tribunal therefore held that the relevant condition of Notification No. 96/2009-Cus would apply to the imported material used in manufacturing the resultant product and that the packaging materials could not simply be equated with VMS.

    R.P. International Decision Relied Upon

    • CESTAT also relied on R.P. International v. Union of India to explain the distinction between the DFIA Scheme and the Advance Authorisation Scheme.
    • The Punjab and Haryana High Court had explained that while DFIA permits duty-free import of inputs โ€œrequired for production of export productโ€, Advance Authorisation concerns inputs that are โ€œphysically incorporated in the export product.โ€
    • Applying that distinction, CESTAT found that in the case of Advance Authorisation, the relevant imported input was the material physically incorporated into the resultant exported product.
    • The Tribunal consequently held that the packaging material had been wrongly placed at par with the imported VMS used in manufacturing IMFL. Since the packaging material was not physically incorporated in the IMFL itself, the exports were wrongly alleged to violate the Advance Authorisation conditions. The findings contained in the Order-in-Original were therefore liable to be set aside.

    DRI Jurisdiction Objection Rejected

    • The appellant also challenged the jurisdiction of DRI officers to initiate proceedings under Section 28 of the Customs Act.
    • CESTAT referred to the Supreme Court litigation concerning the competence of DRI officers to issue demand notices. It noted that although the earlier Supreme Court decision had held against DRI’s jurisdiction, the subsequent review judgment held that DRI officers, when appointed as customs officers and assigned the relevant functions of a โ€œproper officer,โ€ are competent to issue Show Cause Notices under Section 28.
    • The Tribunal therefore rejected N.V. Distilleries’ jurisdictional objection.
    • This aspect of the decision is important: the importer did not succeed on the DRI jurisdiction ground. Its appeal succeeded on the substantive merits of the Advance Authorisation dispute.

    CESTAT Sets Aside Order-in-Original and Allows Appeal

    Ultimately, CESTAT held that although the preliminary issue concerning DRI jurisdiction was decided against the appellant, the appellant succeeded on merits.

    The Tribunal accordingly set aside the Order-in-Original dated 30 August 2019 and allowed the appeal of N.V. Distilleries and Breweries Ltd.

    Significance for Advance Authorisation Holders

    The ruling is significant for exporters operating under the Advance Authorisation Scheme because it emphasises that the nature and role of each material must be examined before alleging violation of an exemption condition.

    The Tribunal’s reasoning distinguishes an imported input that is physically incorporated into the resultant export product from materials used for its packaging.

    The mere use of domestically procured packaging materials under another duty-relief mechanism cannot, on the reasoning adopted in this case, automatically justify treating those packaging materials at par with the imported manufacturing input. At the same time, the decision should not be read as permitting non-compliance with conditions attached to Advance Authorisations generally.

    The ruling turns on the wording of Notification No. 96/2009-Cus and the Tribunal’s finding that VMS and the domestically procured bottles, caps and labels occupied materially different roles in relation to the exported IMFL.

    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 Delhi

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  • Delhi High Court Acquits NDPS Accused Over Three-Month Delay in Sending Drug Sample for Testing; Raises Doubt Over Safe Custody

    Delhi High Court Acquits NDPS Accused Over Three-Month Delay in Sending Drug Sample for Testing; Raises Doubt Over Safe Custody

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

    Date: 15.09.2026

    Delhi High Court Acquits NDPS Accused Over Three-Month Delay in Sending Drug Sample for Testing; Raises Doubt Over Safe Custody

    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 Delhi High Court has held that an unexplained delay in sending a seized narcotic sample for forensic examination can prove fatal to the prosecution where the evidence fails to establish that the sample remained in proper and safe custody during the intervening period.

    In Rishi Dev @ Onkar Singh v. State (Delhi Administration), CRL.A. No. 757 of 2000, the High Court set aside the appellantโ€™s conviction under Section 21 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act) and acquitted him after finding serious deficiencies in the prosecutionโ€™s handling and preservation of the seized sample. The judgment was delivered by Justice S. Muralidhar on 1 May 2008.

    The Court held that where there is doubt whether the sample ultimately tested by the forensic laboratory was the very sample recovered from the accused, the benefit of that doubt must necessarily go to the accused.

    Trial Court Had Sentenced Accused to 10 Yearsโ€™ Rigorous Imprisonment

    • The appeal arose from a judgment dated 25 November 2000 passed by the Additional Sessions Judge, Delhi, convicting Rishi Dev in FIR No. 290/90 for allegedly possessing 300 grams of smack.
    • The trial court had sentenced him to 10 yearsโ€™ rigorous imprisonment and imposed a fine of โ‚น1 lakh, with a further six monthsโ€™ rigorous imprisonment in default of payment.
    • According to the prosecution, police personnel were checking passers-by near Tejab Mill, Bhola Nath Nagar, Shahdara, when the appellant allegedly attempted to move away and subsequently ran on being asked to stop.
    • After he was apprehended, the police claimed to have recovered a packet containing brown-coloured powder from his clothing. The substance was allegedly weighed at the spot and found to be 300 grams, from which a 50-gram sample was separated for forensic testing. The laboratory report subsequently stated that the sample tested positive for smack.

    Accused Challenged Chain of Custody and Delay in Forensic Testing

    • Before the Delhi High Court, the appellant raised several objections to the prosecution case.
    • These included alleged non-compliance with Section 50 of the NDPS Act, absence of independent public witnesses, questions regarding the weighing of the contraband, handling of seals, the presence of the FIR number on documents allegedly prepared before registration of the FIR, and significant delay in sending the sample for forensic analysis.
    • A particularly serious objection concerned the delay between seizure and forensic examination.
    • The sample had been collected in December 1999, but the first attempt to send it to the forensic laboratory was made only on 1 March 2000. The appellant argued that there was no satisfactory explanation for what happened to the sample during this lengthy intervening period.

    Delhi HC Notes NCBโ€™s 72-Hour Requirement

    • The High Court referred to Parminder Singh v. State of Haryana, in which the Punjab and Haryana High Court had considered the Narcotics Control Bureau instructions requiring sealed sample parcels to be deposited with the Chemical Examiner within 72 hours.
    • Justice Muralidhar described the requirement as salutary because tampering with a sample recovered from an accused can have fatal consequences for the prosecution case.
    • The Court stressed the need for strict compliance with safeguards concerning the preservation and prompt forwarding of samples.
    • The Court also referred to Matloob v. State (Delhi Administration) and the Delhi High Court Rules requiring articles intended for chemical examination to be forwarded without the least possible delay.

    Evidence Raised Serious Doubts About What Happened to Sample

    • After examining the prosecution witnesses, the High Court found considerable uncertainty regarding the handling of the seized material.
    • The Court observed that for more than two months no attempt was made to send the sample for chemical examination. The first attempt occurred on 1 March 2000 when the sample was taken to Chandigarh.
    • It was subsequently returned and redeposited in the malkhana on 3 March. Another entry indicated that the sample was eventually sent to the FSL at Malviya Nagar on 15 March 2000.
    • More importantly, the evidence indicated that the investigating officer had put the FIR number on the parcels and recovery memo at the police station, but no entry was made regarding removal of the case property from the malkhana for that purpose.
    • These circumstances assumed particular importance because the sample remained within the control of police authorities for a considerable period before forensic testing.

    Delay Alone Is Not Always Fatal

    • The Delhi High Court clarified an important legal distinction: mere delay in sending a narcotic sample for testing is not automatically fatal in every NDPS prosecution.
    • Referring to the Supreme Court decision in Valsala v. State of Kerala, the Court explained that a delayed sample can still be relied upon if the prosecution satisfactorily proves that the seized material remained in proper custody and proper form throughout the intervening period.
    • What is critical is the integrity of the chain linking the seized substance with the sample ultimately examined by the forensic laboratory.
    • The Court also referred to State of Gujarat v. Ismail U Haji Patel, where the Supreme Court emphasised that the decisive question is not simply delay but whether the prosecution establishes that the seized articles remained in proper custody and that the samples examined by the chemical analyst actually related to the seized articles.

    Prosecution Failed to Establish Safe Custody

    • Applying these principles, the High Court found that the prosecution evidence merely disclosed dates on which the sample entered or left the malkhana.
    • It did not satisfactorily explain the nearly three-month delay or establish what happened to the sample during the intervening period.
    • The Court therefore concluded that it was not satisfied that the sample remained in proper and safe custody or that the material eventually sent for forensic testing was necessarily the same sample recovered from the appellant.

    Trial Courtโ€™s โ€˜Practical Approachโ€™ Rejected

    • The trial court had sought to explain the forensic delay by referring generally to the heavy workload of laboratories and the possibility that laboratory officials might refuse to accept samples because of overcrowding.
    • The Delhi High Court expressly disagreed with that approach.
    • It held that the case record should contain written entries demonstrating that an attempt was made to send the sample for testing within the prescribed period. Strict compliance was important because a sample retained in a police malkhana under seals belonging to police officers remained under police control, giving rise to the possibility of tampering and resealing.
    • The Court further held that where the prosecution seeks to explain a delay on the ground that the forensic laboratory could not accept the sample, the record must demonstrate a genuine attempt to dispatch it promptly and its return for reasons beyond the prosecution’s control.

    Such a deficiency in the documentary record cannot subsequently be cured merely through oral evidence.

    Doubt Over Sample Integrity Must Benefit Accused

    • The High Court emphasised that the reliability of a forensic report ultimately depends upon proof that the sample examined was actually the sample recovered from the accused.
    • Where safe custody itself becomes doubtful, the evidentiary value of the laboratory result is correspondingly undermined.

    The Court held:

    โ€œIf there is doubt as to the safe custody of the sample that is recovered from the accused, then the benefit of such doubt, must obviously enure to the accused.โ€

    Three-Month Delay Held Fatal; Accused Acquitted

    • On the facts of the case, the Delhi High Court found that the prosecution had โ€œfailed miserablyโ€ to satisfy the legal requirements concerning preservation and safe custody of the sample.
    • The nearly three-month delay was held fatal because the prosecution failed to establish that the seized sample had been properly preserved throughout that period and that the sample eventually tested was the same material originally seized.
    • Since the appeal succeeded on this ground alone, the High Court found it unnecessary to examine the appellant’s remaining objections.
    • Accordingly, the Court set aside the conviction dated 25 November 2000 and sentence dated 27 November 2000, acquitted Rishi Dev of the offence under Section 21 of the NDPS Act and directed that he be released forthwith unless required in another case.

    Significance of the Judgment

    The judgment is an important authority on the chain of custody and forensic integrity of seized narcotic samples in NDPS prosecutions.

    It does not establish that every delay beyond 72 hours automatically invalidates an NDPS prosecution. Rather, its central principle is that where there is substantial delay, the prosecution must be able to demonstrate through reliable evidence and contemporaneous records that the seized sample was properly sealed, preserved and safely kept and that the sample ultimately tested was the same sample recovered from the accused.

    In prosecutions carrying severe penal consequences, the forensic chain cannot rest upon assumptions. If an unexplained gap creates reasonable doubt about the identity or integrity of the sample, that doubt may go to the root of the prosecution case.

    Connected Matter

    Delhi High Court Grants Bail Under NDPS Act Over 51-Day Delay in Sampling

    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.

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    Source: Delhi High Court

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  • Delhi HC Cancels Deceptively Similar โ€˜ROCKPAPAโ€™ Trademark; Holds Prior User Has Superior Rights Over Registered Proprietor

    Delhi HC Cancels Deceptively Similar โ€˜ROCKPAPAโ€™ Trademark; Holds Prior User Has Superior Rights Over Registered Proprietor

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

    Date: 15.09.2026

    Delhi HC Cancels Deceptively Similar โ€˜ROCKPAPAโ€™ Trademark; Holds Prior User Has Superior Rights Over Registered Proprietor

    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 Delhi High Court has ordered removal of a deceptively similar โ€˜ROCKPAPAโ€™ device mark from the Trade Marks Register, holding that the rights of a prior user can prevail over those of a subsequent user even where the latter has obtained trademark registration.

    In Kia Wang v. Registrar of Trade Marks & Anr., C.O. (COMM.IPD-TM) 2/2021, Justice Jyoti Singh allowed a rectification petition filed by Kia Wang and directed the Registrar of Trade Marks to remove the impugned device mark registered under Trademark No. 4400360 in Class 09. The judgment was delivered on 15 September 2023.

    The Court found the rival marks strikingly similar and concluded that the respondent’s adoption was tainted by bad faith and dishonest intention, aimed at encashing upon the goodwill associated with the petitioner’s mark.

    Dispute Over โ€˜ROCKPAPAโ€™ Device Mark

    • Kia Wang claimed that he and his wife founded the ROCKPAPA brand in 2014, primarily for products aimed at children, including headphones, pencil boxes and school bags, as well as audio-related products such as headphones, earphones, loudspeakers and portable media players.
    • According to the petition, the brand operated internationally, including in Australia, Canada, Europe, the United States and India. The domain name for ROCKPAPA was registered on 9 April 2014, and the products were also marketed through e-commerce platforms.
    • The petitioner also relied upon trademark registrations obtained abroad, including in the United Kingdom, Australia, United States, Japan and Canada.

    Respondent Obtained Registration in India in 2020

    • Respondent No. 2, Sachin Garg, proprietor of Pooja Creations, applied for registration of the impugned device mark on 7 January 2020. It was subsequently registered in Class 09 for mobile phones and accessories, including chargers, adaptors, batteries, screen protectors, power banks, mobile covers, memory cards, card readers and handsfree devices.
    • Kia Wang claimed that he discovered the registration only in June 2021 and thereafter approached the Delhi High Court seeking rectification of the Register under Sections 47, 57 and 125 of the Trade Marks Act, 1999.
    • Respondent No. 2 did not appear despite service and was eventually proceeded against ex parte. The Registrar did not file a counter-affidavit, though written submissions were placed before the Court.

    Prior User Rights Can Override Subsequent Registration

    • One of the central issues before the Court was the petitioner’s claim of being the prior adopter and prior user of the ROCKPAPA mark.
    • The Court relied upon the Supreme Court decisions in Milmet Oftho Industries v. Allergan Inc., (2004) 12 SCC 624; S. Syed Mohideen v. P. Sulochana Bai, (2016) 2 SCC 683; and Neon Laboratories Ltd. v. Medical Technologies Ltd., (2016) 2 SCC 672.
    • Referring to these authorities, the High Court reiterated that the โ€œfirst in the marketโ€ test assumes significance where competing trademarks are similar.

    It observed that the โ€œfirst userโ€ rule is a seminal feature of trademark law and held that:

    A prior user’s rights will override those of a subsequent user even though the subsequent user’s trademark may have obtained registration.

    On the evidence before it, the Court accepted Kia Wang’s claim of use since 2014. His prior use, overseas registrations and continuous use of the mark established that the trademark had become distinctive of his goods and associated with him.

    Court Finds Rival Marks Strikingly Similar

    • The judgment contains a side-by-side visual comparison of the two device marks on page 15. Both use a substantially similar stylised face/hair/moustache device together with the word โ€œRockpapaโ€.
    • The Court observed that the similarity between the two marks was โ€œwrit large on a bare perusal.โ€
    • It held that the similarity of the marks, coupled with identity of the competing goods, created a likelihood of consumer confusion and could adversely affect the petitioner’s reputation and goodwill.

    Bad-Faith Trademark Registration Can Be Cancelled

    • The Court then examined Section 11(10)(ii) of the Trade Marks Act, 1999, which requires the Registrar to take into consideration the bad faith involved either on the part of the applicant or opponent while dealing with trademark registration.
    • Relying particularly upon BPI Sports LLC v. Saurabh Gulati, 2023 SCC OnLine Del 2424, the Court explained that โ€œbad faithโ€ essentially involves the absence of honest intention and may include dishonest commercial conduct, fraud, deception or an attempt to appropriate another party’s trademark.
    • Applying this principle, the Court found โ€œlittle doubtโ€ that Respondent No. 2 had acted with dishonest intention in adopting a similar mark for identical goods, including copying important visual characteristics of the petitioner’s device mark.
    • The Court concluded that the intention was to encash upon the goodwill of the petitioner’s trademark. It also noted that Respondent No. 2 had chosen not to contest the proceedings or rebut the petitioner’s claim of prior use.

    Maintaining โ€˜Purity of the Registerโ€™ Is a Matter of Public Interest

    • The High Court went beyond the private dispute between the parties and emphasised the broader public-interest function of trademark rectification.
    • It referred to Khoday Distilleries Ltd. v. Scotch Whisky Association, (2008) 10 SCC 723, where the Supreme Court stressed the importance of maintaining the purity of the Trade Marks Register and considering the likelihood of deception or confusion.
    • The Court also relied on Hardie Trading Ltd. v. Addisons Paint & Chemicals Ltd., (2003) 11 SCC 92, while considering who qualifies as a โ€œperson aggrievedโ€ entitled to seek rectification.
    • The Court held that Kia Wang qualified as a โ€œperson aggrievedโ€ because the respondent’s registration operated as a restraint upon legal rights flowing from the petitioner’s prior, long, continuous and uninterrupted use of the mark.

    Important Finding on Section 11(1) and Well-Known Trademark Claim

    • An important nuance in the judgment is that the Court did not accept every ground advanced by the petitioner.
    • Kia Wang had argued that the impugned registration violated Sections 11(1) and 11(2) because ROCKPAPA was an earlier and well-known trademark.
    • The Court rejected this particular argument. It observed that, for purposes of Section 11, the petitioner’s mark did not qualify as an โ€œearlier trade markโ€ because it was neither registered in India nor covered by the specified categories of Indian/international/convention applications. The Court also found that the material and pleadings were insufficient to classify ROCKPAPA as a well-known trademark under Section 2(1)(zg) read with Section 11(6).
    • This makes the judgment particularly significant: the petition succeeded principally on prior-user rights, deceptive similarity, bad-faith adoption and the need to maintain purity of the Registerโ€”not because ROCKPAPA was judicially declared a well-known trademark.

    Delhi High Court Orders Trademark Removed Within Four Weeks

    • Ultimately, the Court allowed the rectification petition and directed the Registrar of Trade Marks to remove Trademark No. 4400360, registered on 7 January 2020 in Class 09, from the Register.
    • The Registrar was directed to complete the rectification within four weeks from receipt of the judgment.

    Key Legal Principle

    The judgment reinforces three significant principles of Indian trademark law: prior user rights may prevail over subsequent registration; bad-faith adoption of a deceptively similar mark can justify cancellation; and rectification jurisdiction serves the wider public interest of maintaining the purity of the Trade Marks Register.

    At the same time, the decision demonstrates that foreign registrations or international popularity alone do not automatically make a mark an โ€œearlier trade markโ€ or a โ€œwell-known trademarkโ€ in India for the purposes of Section 11.

    Connected Matter

    Delhi High Court: Prior Formal Declaration Not Required to Claim Protection as a Well-Known Trademark Under Section 11(2)

    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 HC Grants Regularisation to Nine ONGC Workers After 10 Years of Service; Modifies CGITโ€™s 240-Day Permanency Award

    Bombay HC Grants Regularisation to Nine ONGC Workers After 10 Years of Service; Modifies CGITโ€™s 240-Day Permanency Award

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

    Date: 15.09.2026

    Bombay HC Grants Regularisation to Nine ONGC Workers After 10 Years of Service; Modifies CGITโ€™s 240-Day Permanency Award

    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 .  

    Mumbai, 9 September 2026: The Bombay High Court has granted significant relief to nine long-serving workers of Oil & Natural Gas Corporation Ltd. (ONGC), holding that they cannot be denied regularisation after having continuously served the public sector undertaking for more than two decades following a selection process through the Employment Exchange.

    Justice Sandeep V. Marne, in Oil & Natural Gas Corporation Ltd. v. Central Government Industrial Tribunal-II & Anr., Writ Petition No. 13673 of 2025, partly allowed ONGCโ€™s petition but modified, rather than set aside, the Central Government Industrial Tribunalโ€™s award. The judgment bears neutral citation 2026:BHC-AS:37194.

    The High Court held that the workers should be treated as being in regular service of ONGC from the date on which each completed 10 years of service, with consequential benefits to be granted within eight weeks.

    CGIT Had Granted Permanency After 240 Days

    • The dispute originated from the employment of Field Operators/Assistant Rigmen by ONGC for its offshore exploration and production operations.
    • In 2000-01, ONGC sought candidates through the Employment Exchange for fixed-tenure engagements. Candidates were required to possess prescribed technical qualifications and were subjected to a written test, interview and medical examination before appointment. Their engagement was nevertheless expressly structured as fixed-term employment.
    • In 2008, a total of 79 workmen raised an industrial dispute seeking regularisation. During the lengthy proceedings, 55 were appointed on a regular basis through recruitment exercises, while 15 dropped out due to retirement, death or resignation. The dispute eventually survived in respect of nine workers.
    • On 24 April 2025, CGIT-II, Mumbai held that the nine employees were entitled to permanency and directed ONGC to make them permanent from the date of completion of 240 days of service, together with financial benefits.
    • ONGC challenged that award before the Bombay High Court.

    ONGC: Fixed-Term Employees Cannot Claim Permanency

    • ONGC argued that the workers were consciously engaged on fixed tenure because oil exploration was uncertain and manpower requirements could not be predicted permanently.
    • It relied substantially upon the Constitution Bench judgment in Secretary, State of Karnataka v. Umadevi (3), (2006) 4 SCC 1, contending that long service by itself cannot create a right to regularisation where appointments do not conform to the constitutional requirements governing public employment under Articles 14 and 16 of the Constitution.
    • ONGC further argued that granting permanency merely after completion of 240 days effectively amounted to the Tribunal creating posts on ONGCโ€™s establishment, which an industrial adjudicator could not do.

    ONGC Also Questioned Application of Industrial Disputes Act to Offshore Rigs

    • A significant jurisdictional argument was raised by ONGC.
    • It contended that the workers were deployed on oil rigs located beyond 12 nautical miles from the Indian coastline, and therefore the Industrial Disputes Act, 1947 did not apply to them. ONGC relied upon the Supreme Court judgment in Aban Loyd Chiles Offshore Ltd. v. Union of India, (2008) 11 SCC 439.
    • The Bombay High Court firmly rejected this contention.
    • The Court noted that the workersโ€™ appointments were made in Mumbai and that decisions concerning their service conditions were also taken in Mumbai. Disciplinary proceedings concerning employees working on the rigs were conducted within Indian territory under Indian law.
    • The High Court therefore held that ONGCโ€™s objection to the applicability of the Industrial Disputes Act and the CGITโ€™s jurisdiction was baseless.

    Aban Loyd Judgment Distinguished

    • The Court specifically distinguished Aban Loyd Chiles Offshore.
    • It observed that the Supreme Court case concerned the applicability of customs duty to spare parts required for oil rigs situated outside territorial waters but within Indiaโ€™s Exclusive Economic Zone. In that case, the Supreme Court had held customs duty applicable by virtue of extension of Indian territory to designated areas in the EEZ.
    • The Bombay High Court held that this principle had no application to the present industrial dispute concerning workers who were merely deployed on offshore rigs while their appointments and service-related decisions were made in Mumbai.

    Workers Were Not โ€˜Backdoor Entrantsโ€™: High Court

    • A crucial finding in favour of the workers was that their appointments could not be characterised as classic โ€œbackdoor entries.โ€
    • ONGC itself admitted that the workers had been sponsored by the Employment Exchange. Eligibility requirements were prescribed, and the candidates underwent a written test, interview and medical fitness examination before being selected.
    • The High Court therefore observed that their appointments could, at the highest, be characterised as irregular rather than appointments completely dehors the constitutional scheme of public employment.
    • The Court further noted that the nine employees had continued working without any real break for over a quarter of a century. Repeated issuance of fresh fixed-tenure appointment orders did not, in the Courtโ€™s view, constitute an actual break in their service.

    25 Years of Continuous Service Showed Continuing Need for Workers

    • The High Court attached considerable importance to the factual reality of the employment relationship.
    • It observed that the nine workers had remained in continuous service for over 25 years, making it difficult to accept that their engagement was exclusively for a short-term or specific project or that ONGC had no continuing requirement for their services.
    • The evidence instead suggested that the workers had become an asset to ONGC and had continued to work in adverse conditions on offshore oil rigs for more than two decades.
    • The Court also rejected the contention that the workers had lost their right to seek regularisation merely because they had participated in subsequent regular recruitment exercises. Their participation in such selection processes did not estop them from pursuing their pending claim.

    High Court Applies Exception Under Paragraph 53 of Umadevi

    • While recognising the general rule laid down in Umadevi (3) against regularising appointments made outside the constitutional scheme, the High Court relied upon the important exception recognised in paragraph 53 of that judgment.
    • Paragraph 53 contemplates consideration of regularisation in cases involving irregular, as distinguished from illegal, appointments of duly qualified persons who have served for 10 years or more, subject to the conditions explained by the Supreme Court.
    • In the present case, the High Court noted that the workers were qualified and had undergone a selection process after sponsorship through the Employment Exchange.
    • Their continued engagement for over 25 years also gave rise, in the Courtโ€™s assessment, to an inference regarding ONGCโ€™s continuing requirement for their services.
    • Accordingly, the Court held that the benefit of regularisation could not be denied to them.

    Industrial Tribunal Cannot Grant Permanency Merely After 240 Days

    • The High Court, however, did not fully approve the CGITโ€™s award.
    • It held that the Tribunal had erred in directing that the workers be made permanent merely upon completion of 240 days of service.
    • The Court reasoned that such a direction would effectively amount to creation of posts on the establishment of ONGC, a power that an industrial adjudicator does not possess in relation to a State instrumentality.
    • The Court relied upon Municipal Council Tirora v. Tulsidas Baliram Bindhade, 2016 (6) Mh.L.J. 867, where it had been held that completion of 240 days by itself cannot confer a right to permanency in the absence of the necessary legal conditions concerning posts and recruitment.
    • The High Court also referred to Maharashtra State Road Transport Corporation v. Casteribe Rajya P. Karmachari Sanghatana, (2009) 8 SCC 556 and Hari Nandan Prasad v. Employer I/R to Management of FCI, (2014) 7 SCC 190, while considering the applicability of Umadevi principles to industrial adjudication involving government entities and instrumentalities.

    Regularisation From Completion of 10 Years, Not 240 Days

    • The Court ultimately struck a balance between the constitutional restrictions governing public employment and the peculiar facts of the workersโ€™ long-standing engagement.
    • It held that while permanency merely upon completion of 240 days was legally impermissible, the nine workers could receive the benefit of regularisation after completing 10 years of service, applying the exception recognised in Umadevi.
    • The Court also rejected ONGCโ€™s contention that such relief necessarily amounted to impermissible retrospective regularisation. Since the industrial reference itself had been made in 2008 and the workers would complete 10 years around or after 2011, the Court observed that the relief would operate after the reference and could not, in that sense, be characterised as retrospective.

    Bombay High Court Modifies CGIT Award

    • Accordingly, the High Court partly allowed ONGCโ€™s writ petition and modified the CGIT award dated 24 April 2025.
    • Instead of granting permanency from completion of 240 days, the Court directed that all nine workers be treated as being in regular service of ONGC with effect from the date on which they completed 10 years of service from their initial engagements.
    • ONGC was further directed to grant them all consequential benefits within eight weeks. No order as to costs was passed.

    Key Legal Principles Emerging From the Judgment

    The judgment draws an important distinction between illegal/backdoor appointments and irregular appointments. While long continuation alone does not create a right to regularisation, employees who entered service through a genuine selection mechanism and whose appointments are irregular rather than illegal may, in appropriate circumstances, fall within the Umadevi paragraph 53 framework.

    At the same time, the judgment makes clear that completion of 240 days does not automatically create a right to permanency in a State instrumentality, particularly where doing so would effectively require an industrial adjudicator to create posts.

    The decision is also significant for offshore employment disputes. Merely because employees are physically deployed on offshore installations beyond 12 nautical miles does not, on the facts of this case, displace Indian labour law where their appointments and service conditions are fundamentally administered within India.

    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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  • Delhi High Court Quashes โ‚น76.72 Lakh Excise Demand; Holds Adjudicating Authority Cannot Disregard Binding CESTAT Order

    Delhi High Court Quashes โ‚น76.72 Lakh Excise Demand; Holds Adjudicating Authority Cannot Disregard Binding CESTAT Order

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

    Date: 15.09.2026

    Delhi High Court Quashes โ‚น76.72 Lakh Excise Demand; Holds Adjudicating Authority Cannot Disregard Binding CESTAT Order

    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 Delhi High Court has ruled in favour of Wellspring Universal, setting aside a โ‚น76.72 lakh demand raised by the Central GST authorities after finding that the adjudicating authority had failed to give effect to an earlier CESTAT order which had already upheld the taxpayerโ€™s entitlement to refund.

    A Division Bench comprising Justice Anil Kshetrapal and Justice Shail Jain, in Wellspring Universal v. Additional Commissioner of Central GST, W.P.(C) 11957/2025, set aside both the Demand-cum-Show Cause Notice dated 10 December 2019 and the consequential Order-in-Original dated 24 March 2025. The judgment was pronounced on 14 September 2026.

    The Court also directed refund of the petitionerโ€™s โ‚น7,67,200 statutory pre-deposit with applicable interest.

    Background of the Dispute

    • Wellspring Universal is a partnership firm engaged in manufacturing engineering products, particularly in the welding sector. It was registered as a 100% Export Oriented Unit (EOU) and also as a private bonded warehouse under Sections 58 and 65 of the Customs Act, 1962.
    • The dispute had a lengthy history involving CENVAT credit, excise duty paid on exports and subsequent refund proceedings.
    • Between April and December 2007, Wellspring exported goods through 36 consignments after paying excise duty of โ‚น76,72,000. It initially sought rebate under Rule 18 of the Central Excise Rules, 2002. After the Department took the position that the EOU was not required to pay duty on exported goods, the petitioner repaid rebate already sanctioned and subsequently pursued its claim through the CENVAT credit/refund mechanism.
    • Earlier proceedings eventually culminated in an Order-in-Original dated 21 March 2017, whereby proceedings against the petitioner were dropped. That order was accepted by the competent reviewing authority and was not challenged.

    โ‚น76.72 Lakh Refund Sanctioned

    • Following these proceedings, Wellspring filed a refund claim for โ‚น76,72,000, which was sanctioned by the Assistant Commissioner, CGST, Janakpuri through Refund Order dated 6 May 2019.
    • The authority found, among other things, that the refund claim was within limitation and that the necessary documents evidencing export had been furnished.
    • The Department, however, reviewed the refund order and filed an appeal before the Commissioner (Appeals). During the pendency of that appeal, a separate Demand-cum-Show Cause Notice dated 10 December 2019 was issued alleging that the โ‚น76.72 lakh refund had been erroneously sanctioned and proposing recovery with interest.
    • The Commissioner (Appeals) subsequently allowed the Departmentโ€™s appeal on 16 December 2019, including on the ground that the credit ought to have been transitioned through TRAN-1 and that cash refund could not be sustained.

    CESTAT Ultimately Upheld Wellspringโ€™s โ‚น76.72 Lakh Refund

    • Wellspring challenged the Commissioner (Appeals)โ€™ order before CESTAT.
    • In Final Order No. 56215/2024 dated 1 August 2024, CESTAT allowed Wellspringโ€™s appeal and set aside the Commissioner (Appeals)โ€™ order.
    • Significantly, CESTAT did not decide the matter merely on a technical ground. It expressly held that Wellspring was entitled to refund of โ‚น76,72,000 under Rule 5 of the CENVAT Credit Rules, 2004.
    • CESTAT further held that a substantive benefit could not be denied merely because the petitioner had quoted the wrong rule while claiming refund or because the Assistant Commissioner had sanctioned it with reference to an incorrect rule.
    • CESTAT also specifically examined the Departmentโ€™s limitation objection and held that the refund claim was not barred by limitation.

    Department Still Confirmed โ‚น76.72 Lakh Demand

    • Despite the CESTAT decision, the Additional Commissioner passed an Order-in-Original on 24 March 2025, confirming the โ‚น76.72 lakh demand against Wellspring.
    • Among the grounds adopted were that earlier refund claims had been rejected and not challenged, that the subsequent refund applications constituted fresh claims barred by limitation, and that the 2019 Refund Order had been set aside by the Commissioner (Appeals).
    • This prompted Wellspring to approach the Delhi High Court.

    Delhi High Court: CESTATโ€™s Operative Order Could Not Be Ignored

    • The High Court found a fundamental flaw in the Departmentโ€™s approach.
    • It observed that the Commissioner (Appeals)โ€™ order dated 16 December 2019, on which the Additional Commissioner had relied, had itself already been set aside by CESTAT on 1 August 2024.
    • Therefore, the adjudicating authority could not proceed in March 2025 as though the Commissioner (Appeals)โ€™ order continued to remain an operative determination against Wellspring.

    The Court emphasised a significant principle governing departmental adjudication:

    An adjudicating authority exercising statutory powers must take into account operative orders passed by appellate authorities having appellate jurisdiction over it and cannot disregard a subsequent appellate determination directly bearing upon the issue under adjudication.

    Limitation Issue Could Not Be Reopened Contrary to CESTAT Finding

    • The High Court also rejected the Departmentโ€™s attempt to once again treat the refund as time-barred.
    • CESTAT had already specifically considered the limitation issue and decided it in Wellspringโ€™s favour. The Additional Commissioner, therefore, could not simply treat the refund as a fresh application and reach a conclusion directly contrary to the Tribunalโ€™s determination.
    • The High Court observed that the petitioner had specifically communicated CESTATโ€™s 2024 decision to the adjudicating authority on 24 February 2025. Thus, this was not a situation where the authority was unaware of the appellate decision.
    • Nevertheless, the Order-in-Original was passed on 24 March 2025 without dealing with its effect.

    Substantive Refund Benefit Cannot Be Denied Merely for Quoting Wrong Rule

    • Another important aspect of the case is CESTATโ€™s underlying finding, which the High Court treated as operative.
    • CESTAT had held that Wellspring was substantively entitled to the โ‚น76.72 lakh refund under Rule 5 of the CENVAT Credit Rules, 2004, and that the benefit could not be denied merely because an incorrect rule had been quoted while filing or sanctioning the refund claim.
    • The High Court clarified that CESTATโ€™s order had not merely removed the Commissioner (Appeals)โ€™ order on a procedural or technical basis; the Tribunal had actually examined and upheld Wellspringโ€™s substantive entitlement to the refund.

    Delhi High Court Quashes SCN and Order-in-Original

    • The Court ultimately found that the Additional Commissioner had committed a โ€œmanifest errorโ€ in confirming the โ‚น76.72 lakh demand.
    • It held that the impugned adjudication was fundamentally unsustainable because it failed to give effect to CESTATโ€™s subsequent Final Order and proceeded on the basis of an appellate order that had already ceased to exist.

    Accordingly, the High Court:

    • allowed Wellspring Universalโ€™s writ petition;
    • set aside the Demand-cum-Show Cause Notice dated 10 December 2019;
    • set aside the Order-in-Original dated 24 March 2025 confirming โ‚น76.72 lakh demand; and
    • directed refund of โ‚น7,67,200 deposited as statutory pre-deposit, together with applicable interest in accordance with law.

    Why the Judgment Is Significant

    • The ruling reinforces judicial and quasi-judicial discipline within the tax adjudication hierarchy. Once a competent appellate tribunal has conclusively decided an issue and its order has neither been stayed nor set aside, a subordinate adjudicating authority cannot effectively nullify that decision by deciding the same issue on a contrary premise.
    • The High Court specifically recorded that CESTATโ€™s Final Order dated 1 August 2024 had not been shown to have been stayed or set aside in subsequent proceedings.
    • The judgment is also significant for legacy Central Excise/CENVAT disputes transitioning into the GST era. It demonstrates that the existence of a separate demand proceeding cannot justify ignoring an operative appellate determination that directly decides the taxpayerโ€™s entitlement and limitation issues.

    Key Legal Principle

    A statutory adjudicating authority cannot disregard an operative decision of the appellate authority having jurisdiction over it. Where CESTAT has already adjudicated the taxpayerโ€™s substantive entitlement to refund and limitation, the adjudicating authority cannot subsequently confirm a demand on premises directly contrary to that binding appellate determination.

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    Source: Delhi High Court

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