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  • Bombay High Court Awards β‚Ή8.14 Lakh Compensation to Parents of Passenger Who Fell From Train

    Bombay High Court Awards β‚Ή8.14 Lakh Compensation to Parents of Passenger Who Fell From Train

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

    Date: 25.09.2026

    Bombay High Court Awards β‚Ή8.14 Lakh Compensation to Parents of Passenger Who Fell From Train

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

    The Bombay High Court has awarded β‚Ή8,14,641 as compensation to the parents of a 26-year-old railway passenger who died after falling from a local train, setting aside a Railway Claims Tribunal order that had treated the death as a case of trespassing on railway tracks.

    Justice Aarti Sathe held that entries in railway records may be admissible under Section 191 of the Railways Act, 1989, but they do not become conclusive proof merely because they form part of official railway records. Their reliability and evidentiary value must still be judicially tested, particularly when they conflict with independent evidence.

    The Court found that the Railway Claims Tribunal had ignored the inquest panchanama, relied heavily on a DRM report containing only a tentative conclusion, and reached a finding of trespassing despite there being no eyewitness or other evidence establishing that the deceased was crossing the railway tracks.

    Parents Challenge Rejection of Railway Compensation Claim

    • The appeal was filed by Waman Maruti Suryawanshi and Prabhavati Waman Suryawanshi, parents of deceased Rahul Waman Suryawanshi, challenging the Railway Claims Tribunal, Mumbai’s judgment dated 20 September 2019, which had dismissed their compensation claim.
    • The appeal was filed under Section 23 of the Railway Claims Tribunal Act, 1987.
    • At the relevant time, Rahul was employed with the Maharashtra Industrial Development Corporation (MIDC) and, according to his parents, was the sole breadwinner of the family. They claimed to have been financially dependent upon him.

    Parents Said Son Accidentally Fell From Moving Local Train

    • According to the appellants, on 22 March 2015, Rahul purchased a valid railway ticket at Ghansoli Railway Station and boarded a local train for Airoli.
    • Their case was that while the train was travelling between Ghansoli and Rabale railway stations, Rahul accidentally fell from the moving train, suffered serious injuries and died before he could be admitted to hospital.
    • The parents further claimed that a railway ticket was recovered from Rahul’s body and recorded in the inquest panchanama, though the ticket was subsequently misplaced by them.
    • They filed a compensation claim under Section 124A of the Railways Act, 1989 on 9 April 2015.

    Railways Claimed Deceased Was Trespassing

    • Central Railway disputed the claim.
    • Following a statutory investigation under the Railway Passengers (Manner of Investigation of Untoward Incident) Rules, 2003, the Divisional Railway Manager’s report concluded that Rahul had been trespassing on the railway track and was injured after being hit by a train.
    • The Railways relied, among other things, on a Station Master’s memo recording that an unknown person aged about 26 years had allegedly been hit by an unknown train while trespassing.
    • On that basis, the Railways denied that Rahul’s death constituted an β€œuntoward incident” under Section 123(c)(2) and also disputed that he was a bona fide passenger.

    Tribunal Found Him to Be a Bona Fide Passenger but Still Rejected Compensation

    • Significantly, the Railway Claims Tribunal itself found from the inquest panchanama that Rahul had been carrying a valid railway ticket and was therefore a bona fide passenger.
    • However, the Tribunal nevertheless concluded that the parents had failed to establish that Rahul had fallen from a local train.
    • It instead accepted the theory that he had been knocked down by an unknown train between Ghansoli and Rabale and consequently dismissed the compensation claim.
    • This apparent inconsistency became an important issue before the Bombay High Court.

    No Eyewitness Supported Railways’ Trespassing Theory

    • The High Court found the Tribunal’s conclusion erroneous.
    • Justice Sathe noted that there was β€œabsolutely no eyewitness” and no evidence led by the Railways to establish that Rahul was actually crossing or trespassing on the railway tracks.
    • The Tribunal had essentially relied upon the DRM report and Station Master’s memo without independently examining whether the factual conclusion recorded therein was correct.
    • More importantly, the office note forming part of the DRM report itself did not conclusively state that Rahul was trespassing. It merely stated that the incident β€œmight have taken place while the victim was crossing Railway Track.”
    • The High Court therefore found that a tentative departmental conclusion could not, without supporting evidence, establish trespassing.

    Inquest Panchanama Recorded Fall From Local Train and Recovery of Ticket

    • The High Court attached considerable significance to the inquest panchanama, which the Tribunal had failed to properly consider.
    • The document recorded that Rahul had β€œfallen down from unknown local train” and sustained injuries.
    • It also expressly recorded that when his body was checked, authorities found, among other belongings, a railway ticket.
    • The panchanama further recorded the conclusion that Rahul had died due to a fall from an unknown local train after sustaining serious injuries, subject to determination of the medical cause of death through post-mortem examination.
    • The High Court observed that the DRM report had been prepared while ignoring this crucial recording in the inquest panchanama.

    Railway Records Admissible, But Not Conclusive Proof

    • One of the most significant legal findings in the judgment concerns Section 191 of the Railways Act.
    • The Railways argued that the DRM report resulted from a statutory investigation and had sufficient evidentiary value under Section 191.
    • The High Court rejected the argument that this gave the report conclusive status.

    Justice Sathe held that Section 191 makes entries contained in railway records admissible in evidence, but:

    β€œthe same does not render them conclusive proof as facts stated therein.”

    • The credibility of such records must still be judicially tested for reliability and corroboration, particularly where the railway records conflict with independent evidence.
    • For this proposition, the Court also relied upon the Orissa High Court’s decision in Basanta Mangaraj & Anr. v. Union of India, F.A.O. No. 170 of 2025.

    Accidental Fall From Passenger Train Is an β€˜Untoward Incident’

    • Section 123(c)(2) of the Railways Act expressly includes within the definition of an β€œuntoward incident” the accidental falling of a passenger from a train carrying passengers.
    • The High Court noted that the Tribunal had already found Rahul to be a bona fide passenger carrying a valid ticket.
    • Once that finding existed, the Tribunal could not simply rely upon the Station Master’s memo and DRM report to conclude that there was no untoward incident, particularly in the absence of evidence establishing trespassing.

    Negligence of Passenger Does Not by Itself Defeat Compensation

    • The High Court relied upon the Supreme Court decisions in Jameela & Ors. v. Union of India, 2010 ACJ 2453 and Union of India v. Rina Devi, 2018 ACJ 1441.
    • The judgment reiterated that where a passenger falls from a running train during the journey, the incident constitutes an untoward incident and the Railways would be liable unless the case falls within one of the statutory exceptions under Section 124A.
    • The statutory exceptions include death or injury caused by suicide or attempted suicide, self-inflicted injury, the passenger’s own criminal act, intoxication or insanity, and specified natural or medical causes.
    • The Court referred to Jameela for the distinction between ordinary negligence and the β€œcriminal act” contemplated by the proviso to Section 124A. The Supreme Court had explained that even negligent or rash conduct, without more, does not necessarily amount to the criminal act contemplated by the statutory exception.

    Tribunal Cannot Act as Expert on Nature of Injuries

    • The High Court also criticised the Tribunal’s attempt to infer from the nature of Rahul’s injuries that he must have been knocked down or run over by a train rather than having fallen from one.
    • Justice Sathe held that the Tribunal was not an expert body competent to draw such a medical or technical conclusion without supporting evidence.
    • There was nothing on record establishing that the injuries were of a kind that could only have resulted from being struck by a train.
    • The Court therefore held that the Tribunal’s personal opinion regarding the nature of the injuries could not become the decisive basis for determining how the accident occurred.

    Railways Failed to Establish Section 124A Exception

    • The High Court further found that the Tribunal had failed to properly examine whether Rahul’s death actually fell within any of the exceptions contained in clauses (a) to (e) of the proviso to Section 124A.
    • In the absence of such a finding, denial of compensation was held to be legally unsustainable.
    • The Court accordingly concluded that the Tribunal’s judgment deserved to be set aside.

    Railways Act Is Beneficial Legislation and Must Receive Liberal Interpretation

    • Justice Sathe also emphasised the beneficial nature of the Railways Act.
    • Rahul’s father and mother were undisputedly his dependants within the meaning of Section 123(b).
    • The Court observed that where legislation is beneficial in nature, it should receive a liberal interpretation and, where two constructions are reasonably possible, the interpretation favouring the beneficiary should be preferred.
    • According to the High Court, the Tribunal had adopted a narrow and erroneous interpretation which deprived the deceased passenger’s family of the benefit intended by the legislation.

    Compensation: β‚Ή8 Lakh or β‚Ή4 Lakh Plus Interest?

    • The accident occurred on 22 March 2015, when the prescribed compensation for death was β‚Ή4 lakh.
    • However, by the time the Tribunal delivered its judgment on 20 September 2019, the Railway Accidents and Untoward Incidents (Compensation) Rules had been amended and compensation for death had been enhanced to β‚Ή8 lakh.
    • Applying the principle in Rina Devi, the High Court compared the enhanced statutory compensation with the original β‚Ή4 lakh amount together with applicable interest.
    • The Court applied interest at 9% per annum from the date of the accident, finding that β‚Ή4 lakh together with interest up to the date of its judgment came to β‚Ή8,14,641.
    • Since this was higher than the amended fixed compensation of β‚Ή8 lakh, the Court awarded the higher figure.

    Bombay High Court Awards β‚Ή8,14,641 to Parents

    • The High Court ultimately allowed the First Appeal and quashed the Railway Claims Tribunal’s judgment dated 20 September 2019.
    • The parents’ compensation claim was allowed for β‚Ή8,14,641, to be distributed equally between them.
    • Central Railway was directed to deposit the amount into their bank accounts within eight weeks from the date on which the appellants furnish their bank details to the Chief Claim Officer, Central Railway.
    • If the Railways fails to deposit the compensation within the stipulated period, the amount will carry further interest at 9% per annum until payment.

    Key Takeaway

    The judgment establishes an important evidentiary principle for railway compensation cases: departmental railway records such as DRM reports and Station Master memos may be admissible, but they are not conclusive proof of how an accident occurred.

    Where the Railways alleges trespassing, its internal records must still withstand judicial scrutiny and be tested against independent evidence. A tentative departmental statement that an accident β€œmight” have occurred while crossing railway tracks cannot automatically outweigh an inquest panchanama, the recovery of a valid railway ticket and the absence of any eyewitness supporting the trespassing theory.

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

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

    Source: Bombay High Court

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  • Karnataka High Court: Criminal Antecedents Alone Cannot Justify Rejection of Bail

    Karnataka High Court: Criminal Antecedents Alone Cannot Justify Rejection of Bail

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

    Date: 25.09.2026

    Karnataka High Court: Criminal Antecedents Alone Cannot Justify Rejection of Bail

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

    The Karnataka High Court has granted regular bail to a 23-year-old accused in a case concerning alleged preparation to commit dacoity, reiterating the Supreme Court’s principle that criminal antecedents cannot, by themselves, be the sole ground for rejecting bail when an accused is otherwise entitled to release.

    Justice S. Vishwajith Shetty allowed the petition after taking into account that the investigation had been completed, the charge sheet had already been filed, the petitioner had been granted bail in his earlier criminal cases, and he had undertaken to cooperate with the Trial Court for speedy disposal of the proceedings.

    Background of the Case

    • The petitioner, Sudeep, was arrayed as Accused No. 1 in S.C. No. 156/2025, pending before the VI Additional District and Sessions Judge, Tumakuru.
    • The proceedings arose from Crime No. 87/2025, registered by Hebburu Police Station, Tumakuru District, for offences punishable under Sections 310(4) and 310(5) of the Bharatiya Nyaya Sanhita, 2023.
    • Sudeep approached the Karnataka High Court seeking regular bail under Section 483 of the BNSS, 2023.
    • The criminal petition itself records the corresponding reference to Section 439 of the erstwhile Code of Criminal Procedure while seeking bail under the current BNSS framework.

    FIR Initially Registered Against Unknown Persons

    • The case originated from information received on 20 May 2025 from Byregowda G.S., a police officer attached to Hebburu Police Station.
    • On the basis of the information, the FIR was initially registered against four to five unknown persons.
    • Sudeep was arrested on the same day, 20 May 2025, and was thereafter remanded to judicial custody. Following completion of the investigation, police filed a charge sheet against five persons, with Sudeep shown as Accused No. 1.
    • His earlier bail application before the Trial Court in Criminal Miscellaneous No. 630/2026 was rejected on 20 May 2026, following which he approached the High Court.

    Allegation: Accused Were Preparing to Commit Dacoity

    • According to the prosecution case recorded in the order, the accused persons had allegedly prepared themselves to commit dacoity and were armed with weapons.
    • The first informant, acting upon credible information, registered the case against unknown persons. A raid was subsequently conducted at the location where the accused were allegedly preparing to commit the offence.
    • Five persons were apprehended during the raid, and Sudeep was one of them.
    • These allegations remain part of the pending criminal prosecution; the High Court’s bail order does not constitute a finding on their truth or otherwise.

    Investigation Completed and Charge Sheet Filed

    • An important consideration for the High Court was that the investigation had already been completed and the charge sheet filed.
    • The order also records that the petitioner had previous criminal cases against him. However, in those earlier cases, he was stated to have already been enlarged on bail.
    • The existence of those antecedents therefore led the High Court to consider the Supreme Court’s decision in Prabhakar Tewari v. State of Uttar Pradesh and Another, (2020) 11 SCC 648.

    Criminal Antecedents Cannot Be Sole Ground for Refusing Bail

    The Karnataka High Court specifically relied on Prabhakar Tewari for the proposition that:

    • a person’s criminal antecedents cannot be the sole ground to reject bail if the person is otherwise found entitled to it.
    • The principle was directly applied while considering Sudeep’s bail application.
    • The ruling is significant because it reiterates that the mere existence of earlier criminal cases does not automatically create an absolute bar against bail.
    • Criminal antecedents may remain a relevant consideration in deciding a bail application, but the High Court’s order makes clearβ€”following the Supreme Court precedentβ€”that they cannot operate as the sole reason for rejection where the overall circumstances otherwise justify release.

    Petitioner Undertakes to Cooperate With Trial

    • The High Court further recorded Sudeep’s undertaking that he would cooperate before the Trial Court for speedy disposal of the case.
    • Considering this undertaking along with the completion of investigation, filing of the charge sheet and the principle concerning criminal antecedents, Justice Shetty concluded that the petitioner’s prayer for regular bail deserved to be answered in the affirmative, subject to appropriate safeguards.
    • The petition was accordingly allowed.

    β‚Ή1 Lakh Personal Bond and Two Sureties

    • The High Court directed Sudeep to be released on regular bail in S.C. No. 156/2025, subject to several conditions.
    • He was required to execute a personal bond of β‚Ή1,00,000 with two sureties for the like amount to the satisfaction of the jurisdictional court.
    • The petitioner was also directed to appear regularly on all dates of hearing before the Trial Court unless his appearance was specifically exempted for valid reasons.

    Monthly Police Station Attendance for One Year

    • The High Court imposed additional safeguards while granting bail.
    • Sudeep was prohibited from directly or indirectly threatening or tampering with prosecution witnesses and was directed not to involve himself in similar offences in the future.
    • He was further prohibited from leaving the jurisdiction of the Trial Court without its permission until disposal of the criminal case.
    • Importantly, the Court directed him to appear before the Station House Officer, Hebburu Police Station, on the third Sunday of every month between 10:00 AM and 1:00 PM, and mark his attendance for one year from the date of his release.

    Supreme Court Judgment Relied Upon

    The principal judicial precedent expressly relied upon in the order is:

    • Prabhakar Tewari v. State of Uttar Pradesh and Another, (2020) 11 SCC 648 β€” cited for the proposition that criminal antecedents cannot be the sole basis for refusing bail where the accused is otherwise entitled to bail.

    Why the Decision Matters

    • The Karnataka High Court’s order reinforces an important principle in bail jurisprudence: criminal antecedents are relevant, but they are not necessarily determinative.
    • A bail court must examine the circumstances of the case as a whole. In the present matter, the Court considered the completion of investigation, filing of the charge sheet, the petitioner’s bail status in earlier cases and his undertaking to cooperate with the trial.
    • At the same time, the Court balanced the petitioner’s liberty against the interests of the prosecution by imposing stringent conditions concerning attendance, witnesses, territorial movement and monthly reporting to the police station.
    • The order should therefore not be read as holding that previous criminal cases are irrelevant to bail. Its narrower principle, drawn directly from Prabhakar Tewari, is that antecedents cannot constitute the sole ground for rejection when the accused is otherwise found entitled to bail.

    Key Takeaway

    The Karnataka High Court has reiterated that previous criminal antecedents, standing alone, cannot justify denial of regular bail. Where investigation is complete, the charge sheet has been filed and other circumstances support release, the accused may be granted bail subject to appropriate conditions designed to secure attendance and protect the trial.

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

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

    Source: Karnataka High Court

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  • Bombay HC: Section 49 Purchase Notice Cannot Be Rejected for Want of Development Application Where Landowner Invokes Clauses (a) and (e) of MRTP Act

    Bombay HC: Section 49 Purchase Notice Cannot Be Rejected for Want of Development Application Where Landowner Invokes Clauses (a) and (e) of MRTP Act

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

    Date: 24.09.2026

    Bombay HC: Section 49 Purchase Notice Cannot Be Rejected for Want of Development Application Where Landowner Invokes Clauses (a) and (e) of MRTP Act

    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 an important ruling concerning land reservation and Purchase Notices under the Maharashtra Regional and Town Planning Act, 1966 (MRTP Act), the Bombay High Court has held that a Purchase Notice issued under Sections 49(1)(a) and 49(1)(e) cannot be rejected merely because the landowner had not first submitted a development application to the Planning Authority.

    The Division Bench of Justices R.I. Chagla and Firdosh P. Pooniwalla quashed the Director of Town Planning’s order dated 9 September 2024 rejecting the Purchase Notice issued by Devi Construction LLP and directed the authority to decide the notice afresh on merits, without insisting upon an application under Section 49(2).

    Dispute Over Land Reserved for Garden

    • Devi Construction LLP owns property bearing Bhumapan No. 107/B at Village Vadgaon, measuring approximately 2.10 hectares or 21,000 sq. metres.
    • On 28 February 2024, Vadgaon Nagar Panchayat, acting as the Planning Authority under the MRTP Act, published a Draft Development Plan under Section 26. Under the draft plan, 12,290 sq. metres of the petitioner’s property was reserved for a Garden under Reservation No. 40.
    • The developer objected to the reservation through a letter dated 12 March 2024. Three days later, on 15 March 2024, it issued a Purchase Notice under Section 49, specifically invoking Sections 49(1)(a) and 49(1)(e).

    Director of Town Planning Rejected Purchase Notice

    • The Director of Town Planning rejected the Purchase Notice on 9 September 2024.
    • The rejection was based on the view that Section 49(2) required the Purchase Notice to be accompanied by a copy of an application made to the Planning Authority along with any order or decision passed on such application.
    • Devi Construction challenged this interpretation before the Bombay High Court, contending that Section 49(2) had been incorrectly applied to a Purchase Notice founded upon Sections 49(1)(a) and (e).

    What Does Section 49 of the MRTP Act Provide?

    Section 49 creates a statutory mechanism enabling a landowner or affected person, in specified circumstances, to require the appropriate authority to purchase an interest in land affected by planning restrictions.

    Among the circumstances contemplated by Section 49(1):

    • Clause (a) concerns land designated by a plan as subject to compulsory acquisition.
    • Clause (e) applies where, because of the designation or allocation of land in a plan, the owner claims that the property cannot be sold except at a price lower than what could reasonably have been obtained had the designation or allocation not existed.
    • Section 49(2), meanwhile, states that the Purchase Notice shall be accompanied by a copy of any application made by the applicant to the Planning Authority and any order or decision of that authority or the State Government in respect of which the notice is given.
    • The dispute therefore centred on whether Section 49(2) makes such a prior application mandatory in every case under Section 49(1).

    Developer: Section 49(1) Contemplates Independent Situations

    • Devi Construction argued that the various situations contemplated under Sections 49(1)(a) to (e) are mutually exclusive and independent.
    • According to the petitioner, a prior development application becomes relevant where the Purchase Notice arises from a refusal of development permission or permission granted subject to conditions, as contemplated by Section 49(1)(d).
    • But where the landowner invokes Section 49(1)(e) because the planning reservation or designation has itself depressed the property’s saleability or value, no separate development application is required.
    • The petitioner also invoked Article 300A of the Constitution, arguing that the purpose of Section 49 is to prevent a landowner from being deprived of the enjoyment and value of property merely because of a planning reservation.

    State: Prior Application Was Mandatory

    • The State authorities defended the rejection.
    • They argued that a Purchase Notice under Section 49(1) must be accompanied by the documents referred to in Section 49(2). According to the State, Devi Construction was required to lodge a claim before the Municipal Council concerning its inability to obtain a reasonable price and submit a copy along with the Purchase Notice.
    • Since this had not been done, the authorities maintained that the Purchase Notice had been correctly rejected.

    Bombay HC: Issue Already Settled by Aone Land Developers

    • The High Court rejected the State’s interpretation and held that the issue was no longer res integra.
    • The Bench relied substantially upon Aone Land Developers v. State of Maharashtra & Ors., 2019 SCC OnLine Bom 9845.
    • In Aone Land Developers, the Bombay High Court had interpreted Section 49(2) to mean that the requirement of accompanying a Purchase Notice with a prior application applies where such an application was actually made and resulted in an order or decision.
    • Section 49(2), therefore, cannot be mechanically extended to every independent contingency contained in Section 49(1).

    Each Contingency Under Section 49(1) Is Independent

    • The Court reiterated that Section 49(1) contains several independent circumstances capable of triggering the statutory right to issue a Purchase Notice.
    • The use of the word β€œor” between the different clauses supports a disjunctive reading of the provision.
    • In particular, Section 49(1)(e) creates an independent situation where the landowner claims that, because of designation or allocation under a plan, the land cannot be sold except at a lower price.
    • That situation does not depend upon the landowner first applying for development permission and having that permission refused or conditionally granted.

    Section 49(2) Does Not Create a Universal Prior-Application Requirement

    • The Court emphasized that Section 49(2) is not to be interpreted as imposing an independent requirement that every landowner must first make a development application before invoking Section 49.
    • The earlier Aone Land Developers judgment had specifically held that Section 49(2) applies to a situation where an application was made to the Planning Authority and an order or decision arose from that application.
    • It cannot be read as imposing the same requirement upon every contingency enumerated under Section 49(1).

    Court Also Relies on Gopal Kashinath Lad

    • The Division Bench also relied upon Gopal Kashinath Lad v. State of Maharashtra & Ors., in which the Aurangabad Bench of the Bombay High Court had followed Aone Land Developers.
    • That decision similarly held that where a Purchase Notice is based solely upon Section 49(1)(e), insisting upon a prior development application under Section 49(2) is unnecessary.
    • If no such application was made and consequently no decision exists, there is simply no question of annexing a non-existent application or decision to the Purchase Notice.
    • The Court quoted the earlier ruling to reiterate that the contingencies under Section 49(1)(e) and the documentary requirement under Section 49(2) operate independently in such circumstances.

    Purchase Notice Under Sections 49(1)(a) and (e) Was Maintainable Without Prior Application

    • Applying those principles to Devi Construction, the Bombay High Court noted that the Purchase Notice had specifically been issued under both Sections 49(1)(a) and 49(1)(e).
    • Section 49(1)(a) applies where land is designated by a plan as subject to compulsory acquisition, while Section 49(1)(e) addresses the situation where designation or allocation causes the owner to be unable to sell the property except at a lower price.
    • The Court held that neither situation required Devi Construction to first submit an application to the Planning Authority or obtain an order or decision on such application.
    • Accordingly, the Purchase Notice dated 15 March 2024 was not required to be accompanied by an application under Section 49(2).

    Director’s Rejection Held Incorrect

    • Since the Director of Town Planning had rejected the Purchase Notice specifically because it was not accompanied by an application contemplated under Section 49(2), the High Court held that the reason for rejection was legally incorrect.
    • The order dated 9 September 2024 was therefore quashed and set aside.

    Important: Court Did Not Itself Confirm the Purchase Notice

    • An important distinction in the judgment is that although Devi Construction succeeded in challenging the rejection order, the High Court did not itself finally confirm the Purchase Notice.
    • Instead, it directed the Director of Town Planning to reconsider and decide the Purchase Notice on its own merits under Sections 49(1)(a) and (e), without insisting upon a Section 49(2) application.
    • The authority has been directed to complete this exercise within six weeks from the date of uploading of the High Court’s order.
    • Thus, the judgment represents a clear procedural and statutory-interpretation victory for Devi Construction, while the substantive merits of its Purchase Notice remain for determination by the competent authority.

    What Happens After Confirmation of a Purchase Notice?

    • Section 49 itself contains an important consequence where a Purchase Notice is confirmed.
    • Under Section 49(7), if the appropriate authority fails within one year from confirmation of the Purchase Notice to make the required application to acquire the land under Section 126, the relevant reservation, designation, allotment, indication or restriction on development is deemed to lapse.
    • The land is then deemed released and becomes available to the owner for development otherwise permissible for adjacent land under the relevant plan.
    • That statutory consequence was part of the Section 49 framework considered by the Court; however, the present judgment does not hold that the Garden Reservation over Devi Construction’s property has already lapsed.

    Key Takeaway

    The Bombay High Court’s ruling clarifies that Section 49(2) of the MRTP Act does not impose a blanket requirement that every Purchase Notice must be preceded by a development application to the Planning Authority.

    Where a landowner invokes the independent contingencies under Sections 49(1)(a) and 49(1)(e), the Purchase Notice cannot be rejected merely because no such application or consequent order has been annexed. For landowners whose properties are affected by reservations or designations in development plans, the judgment is significant because it prevents authorities from imposing a procedural precondition that the Court found is not required by the statutory scheme.

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

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

    Source: Bombay High Court

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  • Karnataka High Court Grants Bail to Accused Who Missed Trial Dates; Says He Was β€œSufficiently Punished” by Return to Custody

    Karnataka High Court Grants Bail to Accused Who Missed Trial Dates; Says He Was β€œSufficiently Punished” by Return to Custody

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

    Date: 24.09.2026

    Karnataka High Court Grants Bail to Accused Who Missed Trial Dates; Says He Was β€œSufficiently Punished” by Return to Custody

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

    The Karnataka High Court has granted regular bail to an accused who had earlier been released on bail but was subsequently taken back into judicial custody after failing to appear before the Trial Court on regular hearing dates.

    Justice S. Vishwajith Shetty observed that the accused had already been granted bail on the merits of the criminal case and had no other criminal antecedents. Noting that he had remained in custody after his presence was secured before the Trial Court, the High Court held that β€œfor the mistake committed by the petitioner, he has been sufficiently punished” and ordered his release on bail subject to stringent conditions.

    Background of the Case

    • The petitioner, Mohammed Shahid, is Accused No. 8 in S.C. No. 5065/2025, pending before the IV Additional District and Sessions Judge, Shivamogga, sitting at Bhadravathi.
    • The prosecution arose from Crime No. 12/2025 registered by Paper Town Police Station, Shivamogga for offences punishable under Sections 132, 121(1), 109(1), 61 and 58(b) of the BNS, 2023, along with Sections 3 and 25(1B) of the Arms Act, 1959.
    • The present petition was filed under Section 483 of the BNSS, 2023, seeking regular bail. The petition’s introductory portion also records the proceeding as one under Section 439 CrPC, filed under Section 483 BNSS.

    Accused Had Already Been Granted Bail in 2025

    • A crucial factor in the High Court’s decision was that this was not the petitioner’s first application for bail on the merits.
    • Mohammed Shahid had been arrested at the crime stage on 27 February 2025. He subsequently approached the Karnataka High Court and was granted regular bail in Criminal Petition No. 9948/2025 by an order dated 20 August 2025.
    • Thus, his entitlement to bail on the merits of the underlying criminal case had already been considered by the High Court.

    Failure to Appear Before Trial Court Led to Fresh Custody

    • After obtaining bail, however, the petitioner failed to appear before the Trial Court on the regular dates fixed for hearing.
    • Consequently, coercive steps were initiated against him. His presence was ultimately secured before the Trial Court on 13 July 2026, following which he was remanded to judicial custody.
    • The petitioner then filed another bail application before the Trial Court in S.C. No. 5065/2025. That application was rejected on 11 August 2026, prompting him to once again approach the Karnataka High Court.

    No Other Criminal Antecedents

    • During the hearing, counsel appearing for Mohammed Shahid submitted that the petitioner had no other criminal antecedents.
    • Significantly, the High Court Government Pleader appearing for the State did not dispute this assertion.
    • The absence of other criminal antecedents became relevant when the Court considered whether continued incarceration was necessary merely because of the petitioner’s earlier non-appearance.

    Bail on Merits Had Already Been Granted

    • The High Court emphasised that Mohammed Shahid had already secured regular bail on the merits of the criminal case through the Court’s earlier order dated 20 August 2025.
    • His return to custody was therefore not because the Court had subsequently found him undeserving of bail on the substantive allegations. Rather, the immediate reason was his failure to attend the Trial Court regularly.

    Justice Shetty recorded:

    • β€œOnly for the reason that petitioner had not appeared before the Trial Court on the regular dates of hearing, he has now been arrested and remanded to judicial custody…”
    • The Court therefore distinguished the underlying merits of the bail claim from the petitioner’s subsequent breach concerning his appearance before the Trial Court.

    β€œFor the Mistake Committed, He Has Been Sufficiently Punished”: Karnataka HC

    • The central observation in the order came while considering whether the petitioner should continue to remain in judicial custody for his failure to appear.

    The High Court observed:

    • β€œFor the mistake committed by the petitioner, he has been sufficiently punished.”
    • On that basis, and taking into account the earlier grant of bail on merits and the absence of disputed criminal antecedents, the Court allowed the petition and directed that Mohammed Shahid be released on regular bail.
    • The ruling therefore does not excuse the petitioner’s previous failure to attend the Trial Court. Instead, the Court considered the period of renewed custody sufficient in the circumstances and restored his liberty subject to conditions specifically designed to ensure his future attendance and compliance.

    High Court Imposes β‚Ή1 Lakh Bond and Two Sureties

    • The grant of bail was accompanied by several conditions.
    • The petitioner was directed to execute a personal bond of β‚Ή1,00,000 with two sureties for the like sum, to the satisfaction of the jurisdictional court.
    • Given that his earlier non-appearance had resulted in his return to custody, the High Court expressly directed him to appear regularly on every date of hearing before the Trial Court, unless his personal appearance is exempted for valid reasons.
    • The Court further restrained him from directly or indirectly threatening or tampering with prosecution witnesses and directed that he should not involve himself in similar offences in the future.
    • Finally, he was prohibited from leaving the jurisdiction of the Trial Court without its permission until disposal of the criminal case.

    What the Order Means

    • The ruling is important in the context of bail cancellation, non-appearance and subsequent applications for restoration of liberty.
    • The order indicates that failure to attend trial dates can legitimately result in coercive steps and renewed custody. At the same time, where an accused had already been granted bail on merits, has no other criminal antecedents, and has undergone further incarceration because of the default, continued detention is not necessarily required indefinitely.
    • The High Court’s approach also shows that the consequences of earlier non-appearance can be addressed through stricter bail conditions, particularly a specific obligation to attend future hearings, restrictions on leaving the Trial Court’s jurisdiction and safeguards against witness intimidation.
    • Importantly, the order does not decide the guilt or innocence of Mohammed Shahid in the pending criminal case. The prosecution under the BNS and Arms Act continues before the Sessions Court; the High Court’s ruling is confined to his entitlement to regular bail.

    Final Order

    The Karnataka High Court allowed Criminal Petition No. 13175 of 2026 and directed that Mohammed Shahid be enlarged on bail in S.C. No. 5065/2025 arising from Crime No. 12/2025 of Paper Town Police Station. His release is subject to the β‚Ή1 lakh personal bond with two sureties and the conditions concerning regular attendance, witnesses, future conduct and restriction on leaving the Trial Court’s jurisdiction.

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

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

    Source: Karnataka High Court

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  • NPPA Cannot Apply Blanket Drug Price Ceiling Without Following DPCO Formula: Bombay HC Quashes Notifications and β‚Ή13-Crore-Plus Demand

    NPPA Cannot Apply Blanket Drug Price Ceiling Without Following DPCO Formula: Bombay HC Quashes Notifications and β‚Ή13-Crore-Plus Demand

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

    Date: 23.09.2026

    NPPA Cannot Apply Blanket Drug Price Ceiling Without Following DPCO Formula: Bombay HC Quashes Notifications and β‚Ή13-Crore-Plus Demand

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

    The Bombay High Court has delivered a significant ruling on pharmaceutical price control, holding that the National Pharmaceutical Pricing Authority (NPPA) cannot bypass the statutory mechanism prescribed under the Drugs (Price Control) Order, 1995 (DPCO 1995) and impose a ceiling price upon a formulation merely because it contains a scheduled drug as one of its ingredients.

    Allowing a writ petition filed by Pharmed Limited, the Division Bench of Justice Manish Pitale and Justice Shreeram V. Shirsat struck down NPPA’s notification dated 30 January 2009 in its entirety, while quashing the notification dated 27 September 2007 to the extent it was sought to be applied to Pharmed’s β€œCartigen Forte” formulation. Consequently, the authorities were restrained from acting upon the impugned recovery demands against the company.

    The dispute had culminated in recovery proceedings demanding amounts running beyond β‚Ή13 crore, including alleged overcharging and interest. Earlier, a recovery notice dated 21 November 2016 had sought β‚Ή13,41,06,802 under the Maharashtra Land Revenue Code, 1966.

    Dispute Over Price Control of Cartigen Forte

    • Pharmed Limited manufactures and markets pharmaceutical formulations. The dispute concerned its product β€œCartigen Forte Tablets”, a formulation used for treatment of osteoarthritis.
    • Pharmed’s central case was that the Government had never specifically fixed a ceiling price for Cartigen Forte, either for its formulation existing before January 2010 or for its altered composition thereafter.
    • The controversy arose under the DPCO 1995, issued by the Central Government in exercise of powers under Section 3 of the Essential Commodities Act. The statutory framework empowered the Government to fix, among other things, retail and ceiling prices of scheduled formulations.

    NPPA’s 2007 Notification Covered Multivitamin and Mineral Formulations

    • On 27 September 2007, NPPA issued a notification fixing ceiling prices for multivitamin and mineral tablets and capsules.
    • Pharmed contended that Cartigen Forte was not such a formulation and that the 2007 notification could not simply be extended to it. The company also challenged a subsequent NPPA notification dated 30 January 2009 as impermissibly broad and contrary to the DPCO itself.
    • The 2009 notification purported to provide that any formulation or composition not already covered in NPPA’s tables, but containing any scheduled drug as an ingredient, would become subject to the ceiling price mentioned against that ingredient in the relevant notification unless the manufacturer subsequently obtained a specific price from NPPA.
    • That blanket approach ultimately became central to the High Court’s ruling.

    Initial Overcharging Demand of β‚Ή10.97 Crore

    • NPPA issued a show-cause notice to Pharmed on 13 October 2010, alleging that Cartigen Forte had been sold above the applicable ceiling price.
    • The authority initially proposed recovery of approximately β‚Ή10.97 crore as estimated overcharging.
    • Pharmed replied on 31 January 2011, contending, among other things, that Cartigen Forte was not a multivitamin formulation, its composition had changed from January 2010, and NPPA could not impose a blanket ceiling in the manner proposed.

    Demand Continued to Escalate With Interest

    • In September 2014, NPPA recalculated the alleged overcharged amount at β‚Ή6,33,62,316 and added β‚Ή4,90,71,525 as interest, taking the amount to β‚Ή11,24,33,841.
    • A further demand dated 26 November 2014 called upon Pharmed to deposit β‚Ή11,42,82,631.
    • Subsequent recovery action under Section 267 of the Maharashtra Land Revenue Code demanded β‚Ή12,05,92,401 and threatened attachment proceedings. An earlier writ petition resulted in the matter being sent back to NPPA for reconsideration and a speaking order.
    • After remand, however, further demands followed: β‚Ή12,73,36,583 on 7 March 2016, β‚Ή12,93,41,609 on 12 May 2016, and eventually a recovery notice for β‚Ή13,41,06,802 on 21 November 2016.

    Bombay HC: Cartigen Forte Is Neither a Multivitamin Nor Mineral Tablet

    • A significant part of the Court’s analysis concerned the actual composition of Cartigen Forte.
    • Before January 2010, the formulation contained, among other ingredients, Glucosamine Sulfate Potassium Chloride, Chondroitin Sulfate Sodium, Methyl Sulfonyl Methane, Vitamin D3, Vitamin E and Vitamin C. From January 2010, its composition changed.
    • The Court observed that prior to January 2010, Vitamin C and Vitamin E were scheduled bulk drugs included in the First Schedule to DPCO 1995. However, those two ingredients were no longer present in the formulation from January 2010.
    • More importantly, the Court accepted Pharmed’s contention that the product’s active pharmaceutical ingredients for treatment of osteoarthritis were Glucosamine Sulfate Potassium Chloride, Chondroitin Sulfate Sodium and Methyl Sulfonyl Methane.
    • After examining the undisputed composition, the Bench agreed that Cartigen Forte was neither a multivitamin nor a mineral tablet/capsule.

    Presence of a Scheduled Ingredient Does Not Eliminate Statutory Price-Fixation Exercise

    • The Court did accept an important part of NPPA’s legal position.
    • It held that the authorities possess power under Paragraphs 4 and 11 of DPCO 1995 to fix a formulation’s price based on available information where a manufacturer fails to furnish the information or application required under the DPCO.
    • It also accepted that a formulation containing a bulk drug specified in the First Schedule could fall within the definition of a β€œscheduled formulation.”
    • But that did not end the statutory exercise.
    • The Court held that the Central Government or NPPA was still required to actually fix the ceiling price of the particular scheduled formulation, and while exercising power under Paragraph 9, the authority was required to do so in accordance with the formula prescribed by Paragraph 7.
    • Accordingly, merely establishing that a product contained a scheduled bulk drug could not substitute the statutory price-fixation process.

    Paragraph 7 Formula Must Be Applied

    The judgment places considerable emphasis on the pricing formula prescribed under Paragraph 7 of DPCO 1995:

    R.P. = (M.C. + C.C. + P.M. + P.C.) Γ— (1 + MAPE/100) + E.D.

    The calculation therefore required consideration of factors including:

    • Material Cost (M.C.)
    • Conversion Cost (C.C.)
    • Packing Material Cost (P.M.)
    • Packing Charges (P.C.)
    • Maximum Allowable Post-Manufacturing Expenses (MAPE)
    • Excise Duty (E.D.)

    The statutory provisions themselves contemplated that the Government would fix the retail price of a scheduled formulation in accordance with this formula.

    Similarly, Paragraph 9 contemplated fixation of a ceiling price for a scheduled formulation by notification in the Official Gazette in accordance with the Paragraph 7 formula.

    The High Court found that no such exercise had been undertaken specifically for Cartigen Forte.

    2007 Multivitamin Notification Could Not Be Applied to Cartigen Forte

    • The Court therefore rejected NPPA’s attempt to apply the notification dated 27 September 2007 to Pharmed’s product.
    • That notification had specifically fixed prices for multivitamin and mineral tablets/capsules. The Court found that Cartigen Forte was a different formulation and its ceiling price had not independently been calculated by applying the statutory formula.
    • The Court also noted the significant differences in composition. Before January 2010, Cartigen Forte contained Vitamin C and Vitamin E only in quantities lower than those specified in the multivitamin/mineral formulations covered by the 2007 notification. From January 2010, those ingredients were no longer present.
    • The High Court therefore held that the 2007 notification could not form the basis for treating Cartigen Forte as having breached a notified ceiling price.

    Specific Gazette Notification Required for the Formulation

    • The Court laid down an important principle concerning the structure of DPCO 1995.
    • Even where Paragraphs 4 and 11 empower the authorities to determine price on the basis of available information, the procedure prescribed by Paragraph 9 read with Paragraph 7 must still be followed.
    • A specific order by way of notification in the Official Gazette was required in respect of the formulation concerned before the authorities could assert that a particular ceiling price applied.
    • Since no such exercise was undertaken for Cartigen Forte, the Court found that the very foundation of NPPA’s allegation of overcharging disappeared.
    • Accordingly, the notification dated 27 September 2007 was liable to be set aside only insofar as NPPA sought to apply it to Pharmed’s Cartigen Forte formulation.

    2009 NPPA Notification Declared Ultra Vires DPCO 1995

    • The Court went considerably further with respect to the 30 January 2009 notification.
    • The notification essentially attempted to make a price ceiling fixed for a scheduled ingredient applicable to any formulation containing that ingredient, unless a specific price had subsequently been obtained.
    • The Bombay High Court found this approach fundamentally inconsistent with the DPCO 1995.
    • According to the Bench, the notification was β€œextremely widely worded” and effectively dispensed with the statutory formula under Paragraph 7.
    • The Court reasoned that if the ceiling price for a formulation could simply be deemed to exist because one of its ingredients was covered by another pricing notification, the entire statutory exercise of calculating a formulation-specific ceiling price under Paragraphs 7 and 9 would be bypassed.
    • The Court therefore held the notification dated 30 January 2009 to be ultra vires the DPCO 1995.

    Notification Was Overbroad and Beyond NPPA’s Power: Bombay HC

    • The High Court further characterised the 2009 notification as overbroad and expansive, operating contrary to the provisions of the DPCO itself.
    • The Bench found that it went beyond the power vested in NPPA and effectively amounted to an abdication of the responsibility imposed upon the Central Government and NPPA to specifically determine a ceiling price under Paragraph 9 by applying the rigorous formula prescribed under Paragraph 7.
    • The Court consequently held that NPPA’s exercise of power under Paragraphs 9 and 11 for issuing the 2009 notification was arbitrary and unsustainable.

    β‚Ή13-Crore-Plus Recovery Proceedings Lose Their Foundation

    • Once the Court found the two notifications incapable of supporting NPPA’s case, the consequential demands could not survive.
    • The Court reasoned that the very foundation of the allegation that Pharmed had overcharged customers for Cartigen Forte had been removed.
    • Consequently, the demand notices issued by NPPA and the recovery proceedings initiated by the Collector under the Maharashtra Land Revenue Code were also liable to be quashed.
    • The Court held that there was no independent basis for the Collector to pursue recovery once NPPA’s underlying demand itself became unsustainable.

    Court Also Flags Interest Calculation

    • The High Court separately found substance in Pharmed’s challenge to the huge interest component.
    • It noted that considerable time had elapsed because of delay attributable to NPPA itself in granting a hearing, while earlier demand notices had also been set aside on natural justice grounds.
    • The Court held that time consumed because of the authority’s own fault could not operate to its advantage and to Pharmed’s detriment when calculating interest.
    • Relying on Franco Indian Remedies Private Limited & Anr. v. Union of India & Anr., 2016 SCC OnLine Bom 16344, the Court observed that, at worst, interest could have been calculated from the demand notice issued after the earlier proceedings were remanded.

    Natural Justice and SSI Exemption Issues Left Open

    • Pharmed had also raised questions regarding violation of natural justice, including the alleged failure to pass a proper speaking order after remand, as well as its entitlement and that of its contract manufacturer to a small-scale industrial unit exemption.
    • However, the High Court found it unnecessary to finally determine those issues.
    • Since the notifications forming the foundation of the alleged overcharging were themselves unsustainable, the writ petition could be decided on that basis alone.

    Final Order: Pharmed Wins; NPPA Notifications and Demands Set Aside

    • The Bombay High Court ultimately allowed Pharmed Limited’s writ petition.
    • Crucially, the Court drew a distinction between the two impugned notifications:
    • Notification dated 27 September 2007 was quashed only to the extent it was sought to be applied to Pharmed’s Cartigen Forte formulation.
    • Notification dated 30 January 2009 was quashed and set aside in its entirety.
    • As a consequence, the authorities were directed not to act upon the impugned demand notices against Pharmed.
    • Thus, Pharmed Limited succeeded in eliminating the legal foundation of the substantial overcharging and interest demands raised against it.

    Why the Judgment Matters for Pharmaceutical Price Control

    The ruling is significant because it distinguishes between two separate propositions under DPCO 1995.

    A formulation may qualify as a scheduled formulation because it contains a scheduled bulk drug. But that classification does not, by itself, permit NPPA to automatically import the ceiling price of some other formulation or ingredient and impose it on the manufacturer’s product.

    Where the DPCO requires the ceiling price of a formulation to be determined under Paragraph 9 in accordance with the Paragraph 7 pricing formula, the authority cannot replace that statutory calculation with a blanket deeming mechanism.

    The judgment therefore reinforces the principle that drug-price regulation must remain within the pricing methodology and statutory powers conferred by the DPCO itself.

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

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

    Source: Bombay High Court

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  • Karnataka HC Refuses to Quash ED Proceedings

    Karnataka HC Refuses to Quash ED Proceedings

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

    Date: 23.09.2026

    Karnataka HC Refuses to Quash ED Proceedings

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

    In a significant judgment concerning homebuyer complaints, delayed real-estate projects, alleged diversion of project funds and proceedings under the Prevention of Money Laundering Act (PMLA), the Karnataka High Court has refused to terminate criminal and money-laundering proceedings concerning the Ozone Urbana project.

    Justice M. Nagaprasanna dealt together with six writ petitions filed by Ozone Urbana Infra Developers Pvt. Ltd. and its office-bearers, challenging various criminal complaints/FIRs as well as Enforcement Directorate proceedings, including ECIRs and a Provisional Attachment Order (PAO) covering properties stated to be worth β‚Ή423.38 crore.

    The Court held, in substance, that serious allegations involving multiple homebuyers, alleged diversion and siphoning of substantial funds, non-delivery of homes and complex financial transactions could not, at the threshold, simply be reduced to private contractual disputes.

    Ozone Urbana Project at Centre of Multiple Proceedings

    • Ozone Urbana Infra Developers was developing a township known as β€œOzone Urbana”, comprising 12 projects with single-unit houses, low- and mid-rise units, high-rise apartments and associated infrastructure.
    • According to the judgment, land for the development was acquired during 2006–2007 and construction commenced in 2012. The litigation involved the company, its Chairman and Managing Director Vasudevan Sathyamoorthy, other office-bearers, several homebuyers, police authorities and the Directorate of Enforcement.
    • The connected petitions arose from different complaints and investigations but involved overlapping allegations concerning the project and its financial affairs.

    Homebuyers Alleged Payment of Substantial Consideration Without Delivery of Flats

    • The judgment records several complaints by individual homebuyers and the Ozone Urbana Buyers Welfare Association.
    • One complaint concerned a senior-citizen homebuyer who allegedly paid β‚Ή64,52,418 in full for a flat in β€œOzone Urbana Pavilion”. According to the complaint, even after about 10 years from the initial booking, the construction remained incomplete and possession had not been delivered.
    • Another homebuyer alleged payment of β‚Ή1,32,10,000 towards a flat in β€œOzone Urbana Avenue”. The complaint alleged that despite payment of the entire consideration, the flat was not handed over and was subsequently sold to a third person.
    • These were allegations under investigation, not findings of guilt.

    Buyers’ Association Alleged Project Was Only 49% Complete

    • The Ozone Urbana Buyers Welfare Association also lodged a complaint.
    • According to the allegations recorded in the judgment, the Ozone Urbana Township commenced in 2012 with a projected 1,800 units and was represented as being completed by 2017. The complaint alleged that only about 49% of the construction had been completed.
    • The homebuyers further alleged that they had been induced through subvention schemes, tripartite arrangements and buy-back schemes. In some instances, banks and housing finance companies allegedly released up to 90% of the loan amount without adequately verifying construction progress, title or the project’s financial position.
    • It was further alleged that the developer had undertaken to service pre-EMI/EMI payments until possession but subsequently stopped doing so, leaving the homebuyers to service the loans themselves.

    β€œNeither the Home Nor the Money”: Allegations Before Court

    • The judgment records the complainants’ case that the affected buyers were left with β€œneither the home nor the money”, while banks had initiated proceedings under the SARFAESI Act for non-payment of loan instalments.
    • Crime No. 77 of 2024 consequently involved allegations under Sections 406, 409, 420, 120-B and 34 IPC and Section 9 of the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004 (KPIDFE Act).

    Developer: Disputes Were Civil, Contractual and Already Before RERA

    • Ozone Urbana and its office-bearers argued that the controversies were fundamentally civil and contractual disputes arising from delayed construction, payment obligations and real-estate agreements.
    • They contended that the essential ingredients of cheating and criminal breach of trust were absent because there was no fraudulent intention from the inception of the transactions.
    • The petitioners also relied on the fact that certain homebuyers had already invoked remedies under RERA, arguing that parallel criminal proceedings based on the same underlying transaction amounted to abuse of process.
    • Reliance was placed, among other authorities, on the principles governing quashing of criminal proceedings laid down in State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335.

    RERA Remedy Does Not Automatically Convert Criminal Allegations Into a Civil Dispute

    • The broader reasoning of the judgment is important for real-estate disputes.
    • The mere existence of contractual remedies, RERA proceedings or insolvency proceedings does not, by itself, require criminal allegations to be terminated where the complaint independently discloses facts capable of constituting criminal offences.
    • The Court treated the allegations in the connected homebuyer matters as requiring investigation rather than a premature determination at the quashing stage.
    • The judgment therefore underscores the distinction between an ordinary case of delayed possession or contractual breach and allegations extending to matters such as double sale of units, alleged diversion of funds, alleged misappropriation, subvention arrangements and other financial transactions.

    2022 ECIR Also Survives Despite Technical Quashing of Predicate FIR

    • A particularly significant issue concerned the 2022 ECIR β€” ECIR No. BGZO/70/2022.
    • The ED had registered the ECIR following predicate proceedings arising from complaints concerning the Ozone Urbana project. The petitioners argued that subsequent developments affecting the predicate FIRs destroyed the foundation of the PMLA proceedings.
    • The High Court rejected that contention.
    • It drew a distinction between a predicate proceeding being quashed on merits, thereby striking at the substratum of the scheduled offence, and quashing based upon a technical defect, which does not necessarily erase the underlying allegations of criminality.
    • The Court found that the underlying private complaint continued to subsist. It therefore held that the 2022 ECIR and the summons issued under Section 50 PMLA could not be treated as automatically foundationless merely because a predicate FIR had suffered quashing on a technical ground.

    Fresh 2025 ECIR and β‚Ή423.38 Crore Attachment Challenged

    • The company also challenged ECIR/BGZO/01/2025, registered by the ED in 2025.
    • The ECIR was based on multiple predicate crimes. Meanwhile, the ED conducted search and seizure proceedings on 1 and 2 August 2025, during which digital devices and books of account were collected. Section 50 summons followed on 4 August 2025.
    • A further major development arose from proceedings before the Supreme Court concerning homebuyers, builders, banks and housing finance companies operating under subvention schemes.
    • The Supreme Court proceedings eventually led to a CBI investigation and registration of an FIR alleging offences under Section 420 read with Section 120-B IPC and Sections 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988.
    • That CBI FIR was subsequently added to the 2025 ECIR.

    ED Provisionally Attached Properties Worth β‚Ή423.38 Crore

    • On 4 October 2025, the Directorate of Enforcement issued a Provisional Attachment Order under Section 5(1) PMLA.
    • According to the ED’s press release reproduced in the judgment, immovable properties valued at β‚Ή423.38 crore were provisionally attached.
    • The attached assets were stated to include unsold inventory comprising 92 flats in the Avenue project and 13 flats in Aqua 2, approximately 4.5 acres of commercial land, and personal properties of the promoter and his wife, including land at Kannehalli Village, Mudigere.
    • The ED alleged that the company and its promoter had generated proceeds of crime of approximately β‚Ή927.22 crore through alleged diversion of funds. Importantly, these figures represent the ED’s allegations recorded in the proceedings, not a final judicial determination of money laundering or the quantum of proceeds of crime.

    Karnataka HC Refuses to Quash 2025 ECIR

    • The High Court rejected the argument that the 2025 ECIR lacked a surviving predicate offence.
    • It observed that the predicate proceedings remained alive and that one of the underlying crimes arose from a CBI investigation pursuant to directions of the Supreme Court.
    • The allegations had yet to undergo investigation and trial. At this stage, the High Court said it could not presume that those proceedings had ceased to exist and, on that assumption, terminate consequential PMLA proceedings.
    • The Court accordingly held that so long as the scheduled offence subsists and the proceedings concerning it have not been obliterated, the ECIR cannot be treated as foundationless.

    Provisional Attachment Is Not Final Determination of β€œProceeds of Crime”

    • The Court also refused to interfere with the PAO at this stage.
    • An important qualification in the judgment is that a provisional attachment is not a final judicial determination that the property constitutes proceeds of crime.
    • Questions concerning the nexus between alleged criminal activity and the attached property, whether the assets satisfy the statutory definition of β€œproceeds of crime”, and whether the attachment can ultimately be sustained are matters for the adjudicatory mechanism prescribed under the PMLA.
    • The Court therefore rejected the attempt to have those questions conclusively determined in the writ proceedings at the provisional-attachment stage.

    PMLA Provides Complete Statutory Mechanism Against Attachment

    • The High Court relied upon the Supreme Court’s decision in JSW Steel Ltd. v. Enforcement Directorate, 2025 SCC OnLine SC 2150.
    • It emphasised the statutory structure under which Section 5 permits provisional attachment, Section 8 provides adjudication and confirmation before the Adjudicating Authority, and Section 26 provides an appellate remedy before the Appellate Tribunal.
    • The High Court held that interfering with a provisional attachment at its threshold would effectively short-circuit the adjudicatory mechanism established by Parliament.

    Economic Offence Allegations Cannot Be Viewed Through Narrow Contractual Lens: HC

    • One of the strongest parts of the judgment concerns the Court’s treatment of the alleged economic offences.
    • The High Court observed that the allegations were not confined to a single complainant or an isolated contractual transaction. They involved allegations of financial transactions of considerable magnitude, diversion and siphoning of funds and use of money for purposes different from those for which it had allegedly been collected.
    • The Court noted that such allegations affected numerous stakeholders, particularly homebuyers.
    • It observed that for a homebuyer, purchase of a home is often not merely an investment in property but the culmination of years of savings coupled with the continuing burden of a housing loan.
    • The allegations therefore could not, at this stage, be examined merely through the narrow prism of individual contractual disputes.

    Court Calls for β€œFull and Unhindered Investigation”

    • Considering the alleged movement and diversion of substantial funds and the number of affected persons, the Court held that the matter had wider economic and societal ramifications.
    • It found that such allegations warranted a full and unhindered investigation in accordance with law.
    • At a stage when the allegations remained to be tested through the legally prescribed process, interdiction of the proceedings was held to be inappropriate.

    Civil and Criminal Remedies Can Operate in Their Own Fields

    • The judgment is particularly relevant to developers and homebuyers because it demonstrates that resort to RERA, civil proceedings or insolvency remedies does not necessarily create immunity against criminal investigation.
    • The crucial inquiry remains whether the allegations, taken at face value, disclose ingredients of an independent criminal offence.
    • Thus, an ordinary contractual delay may stand on one footing; allegations involving dishonest inducement, double sale, diversion of money, breach of trust, conspiracy or laundering of alleged proceeds of crime may stand on another.
    • The existence of a civil remedy is therefore not, by itself, decisive of whether criminal proceedings should be quashed.

    Court Also Examines KPIDFE Act in Context of Homebuyer Funds

    • Another important question concerned the applicability of the Karnataka Protection of Interest of Depositors in Financial Establishments Act.
    • The petitioners argued that developers were not financial establishments and that purchasers of flats could not simultaneously be treated as β€œdepositors”.
    • The judgment examined authorities dealing with similarly worded depositor-protection legislation, including decisions addressing the breadth of the expressions β€œdeposit” and β€œfinancial establishment” and their potential application to money collected by builders from flat purchasers.
    • This aspect assumes particular importance where funds are collected from the public against a promise to provide property or another specified service and the transaction is alleged to have resulted in fraudulent default.

    Key Principle on PMLA Predicate Offences

    • Another significant legal principle emerging from the ruling is that quashing of a predicate FIR does not invariably and mechanically result in termination of an ECIR.
    • The reason for quashing the predicate proceeding matters.
    • Where the scheduled offence itself is extinguished on merits, the consequences under PMLA may be materially different. But where a particular FIR is quashed because of a procedural or technical defect while the underlying complaint and allegations remain alive, the Court held that PMLA proceedings cannot necessarily be treated as having lost their foundation.
    • That distinction could have wider implications for future PMLA litigation.

    Ozone Urbana’s Challenge to ED Proceedings Fails

    • Ultimately, the High Court declined to halt the ED’s investigation and refused to interfere with the provisional attachment at this stage.
    • The ruling does not amount to a finding that Ozone Urbana, its promoters or office-bearers are guilty of cheating, diversion of funds or money laundering. Those allegations remain subject to investigation, statutory adjudication and, where applicable, trial.
    • What the Court decided at this stage was that the allegations and surviving predicate proceedings provided sufficient legal basis for the investigations and statutory processes to continue, and that the High Court’s extraordinary jurisdiction could not be used to terminate them prematurely.

    Why the Judgment Matters

    The 210-page ruling is important at the intersection of RERA, criminal law, PMLA, depositor-protection legislation and insolvency law.

    For homebuyers, it reinforces that pursuing remedies under RERA or other civil/statutory forums does not necessarily prevent them from invoking criminal law where the factual allegations independently disclose criminality.

    For developers and promoters, the judgment illustrates that the defence of a β€œpurely civil dispute” will not automatically succeed at the quashing stage where allegations extend beyond mere delay in construction or contractual non-performance to alleged dishonest inducement, multiple sales, diversion of funds or other financial wrongdoing.

    For PMLA proceedings, the ruling reiterates that a provisional attachment under Section 5 is only an interim statutory measure and that disputes regarding whether the attached assets actually constitute β€œproceeds of crime” ordinarily have to travel through the statutory adjudication and appellate process.

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

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

    Source: Karnataka High Court

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  • Karnataka HC Upholds Corruption Proceedings Against Retired BBMP Engineer; Rejects Sanction Objection

    Karnataka HC Upholds Corruption Proceedings Against Retired BBMP Engineer; Rejects Sanction Objection

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

    Date: 22.09.2026

    Karnataka HC Upholds Corruption Proceedings Against Retired BBMP Engineer; Rejects Sanction Objection

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

    The Karnataka High Court has held that the 2018 amendment to Section 19(1) of the Prevention of Corruption Act, 1988, which extended the requirement of prior sanction to former public servants, cannot be invoked to reopen proceedings where the court had already taken cognizance of the alleged corruption offences before the amendment came into force on 26 July 2018.

    Justice H.P. Sandesh dismissed three criminal revision petitions filed by retired BBMP Executive Engineer B.G. Prakash Kumar, thereby allowing the criminal proceedings against him under Sections 13(1)(c) and 13(1)(d), read with Section 13(2), of the Prevention of Corruption Act to continue.

    Case Arose From Alleged Irregularities in BBMP Development Works

    • The prosecution case concerned alleged irregularities in developmental works undertaken by the Bruhat Bengaluru Mahanagara Palike (BBMP).
    • B.G. Prakash Kumar had served as an Executive Engineer, Malleshwaram Division, BBMP, and supervised road improvement and asphalting works.
    • Following allegations concerning irregularities in execution of developmental works, the BBMP Commissioner directed the Technical Investigation Cell to conduct an inquiry. A complaint was thereafter lodged by the Additional Commissioner, BBMP, leading to registration of Crime No. 4/2011 for offences under the IPC and Prevention of Corruption Act.
    • Prakash Kumar retired from service on attaining superannuation on 30 July 2017. The investigating agency subsequently filed charge sheets before the competent court in 2018.

    Cognizance Was Taken Before PC Act Amendment

    • The dates on which cognizance was taken ultimately became crucial to the High Court’s decision.
    • The Special Court took cognizance on 23 May 2018 in Special C.C. Nos. 339/2018 and 338/2018 and on 16 February 2018 in Special C.C. No. 107/2018.
    • Thus, in all three cases, cognizance had already been taken before 26 July 2018, when the Prevention of Corruption (Amendment) Act, 2018 came into force.

    Trial Court Initially Discharged Retired Executive Engineer

    • Prakash Kumar moved applications under Section 227 CrPC seeking discharge from both IPC and Prevention of Corruption Act offences.
    • The Trial Court initially discharged him and closed the proceedings by an order dated 20 September 2023, holding the prosecution case unsustainable in law.
    • However, the Karnataka High Court subsequently, by an order dated 22 March 2025, set aside that discharge order and remanded the matter to the Trial Court for fresh consideration.
    • After reconsideration, the Trial Court passed a fresh order on 24 February 2026.
    • This time, it discharged Prakash Kumar from the IPC offences under Sections 120B, 409, 465, 468 and 477A, but directed continuation of proceedings for offences under the Prevention of Corruption Act.
    • The retired officer therefore approached the High Court through the present revision petitions challenging the partial rejection of his discharge applications.

    Petitioner: Prior Sanction Mandatory Even for Retired Public Servant

    • The petitioner’s principal argument centred on the amendment made to Section 19(1) of the Prevention of Corruption Act with effect from 26 July 2018.
    • The amended provision requires previous sanction before a court takes cognizance of specified corruption offences allegedly committed by a public servant and extends the statutory language to a person who β€œwas at the time of commission of the alleged offence” employed in connection with the affairs of the Union or State, as applicable.
    • Counsel for Prakash Kumar argued that the amended provision protected retired officials as well and that sanction constituted a condition precedent for valid cognizance.
    • It was argued that after the earlier discharge order was set aside and the proceedings restored, the Trial Court was required to reconsider the matter afresh. According to the petitioner, continuation of the PC Act proceedings without a valid sanction under Section 19(1) was therefore impermissible.

    Earlier Cognizance Lost Effect After Discharge, Petitioner Argued

    • The petitioner further contended that once he had been discharged in 2023, the cognizance originally taken in 2018 had lost its legal efficacy.
    • Accordingly, after remand and restoration of proceedings, it was argued that the prosecution could not rely upon the original cognizance and continue without obtaining the sanction contemplated under the amended Section 19(1).
    • The petitioner also argued that because he was in service at the time of the alleged offences, the sanction requirement should relate back to the date of the alleged crime rather than merely the date on which cognizance was taken.

    State: Amendment Came After Cognizance Had Already Been Taken

    • The State opposed the petitions and argued that the 2018 amendment came into effect only on 26 July 2018, whereas Prakash Kumar had already retired in 2017 and cognizance had been taken before the amendment.
    • The Additional State Public Prosecutor relied, among other authorities, upon a Supreme Court decision concerning B.T. Ramesh, contending that prior sanction under the then-existing Section 19 was required only in relation to public servants who were in service when cognizance was taken and not those who had already retired.

    Karnataka HC: Amended Section 19 Protects Retired Public Servants Prospectively

    • The High Court acknowledged that after the 2018 amendment, prior sanction is required even in respect of former public servants in cases to which the amended provision applies.
    • The Court observed that subsequent to the amendment coming into force on 26 July 2018, sanction is a condition precedent for valid cognizance of the covered PC Act offences even in relation to retired public servants.
    • However, that proposition did not resolve Prakash Kumar’s case because the decisive question was whether the amended requirement could affect cognizance already taken before 26 July 2018.

    Cognizance Dates Became Decisive

    • The High Court found that the criminal cases had been registered, investigated and charge-sheeted before the amendment and, crucially, cognizance had also been taken before the amendment came into force.
    • The Court examined the cognizance orders and noted that the Special Court had considered the charge-sheet materials and taken cognizance of both IPC and PC Act offences before issuing summons to the accused.
    • Accordingly, Justice Sandesh held that the subsequent amendment β€œwill not come to the aid of the petitioner”, because cognizance had already been taken before 26 July 2018.

    What Does β€œTaking Cognizance” Mean?

    • The petitioner relied upon the Supreme Court judgment in S.K. Sinha, Chief Enforcement Officer v. Videocon International Ltd. & Others, (2008) 2 SCC 492.
    • The High Court noted the principle that β€œcognizance” means taking judicial notice of an offence and occurs when the Court or Magistrate applies its mind to the suspected commission of the offence.
    • At the cognizance stage, the court examines whether there is sufficient ground for proceeding with the matter, rather than whether sufficient material exists for conviction.

    2018 PC Act Amendment Does Not Apply Retrospectively to Completed Cognizance

    • The High Court referred extensively to precedent dealing with the temporal application of the 2018 amendments.
    • It discussed Dr. Pilli Sambasiva Rao v. State of Telangana, 2022 SCC OnLine TS 3401, which in turn considered the Supreme Court’s decision in State of Telangana v. Managipet, (2019) 19 SCC 87.
    • The judgment noted the principle that the 2018 amendment cannot retrospectively govern offences and proceedings in the manner urged where the relevant criminal process had already commenced under the pre-amendment law.
    • The Court reproduced the reasoning from Managipet that offences committed before the 2018 amendment have to be examined in light of the statutory provisions as they existed before the amendment.

    Delhi High Court’s 2026 Ruling Relied Upon

    • Significantly, the Karnataka High Court also relied upon a recent Delhi High Court judgment dated 6 August 2026 in Criminal Reference No. 1/2019.
    • The Delhi High Court had held that the amended Section 19(1) introduced a new obligation to obtain sanction in respect of former public servants. However, where cognizance had already been taken before 26 July 2018, such cognizance would not be reopened merely because of the subsequent amendment.
    • Conversely, where cognizance had not yet been taken as of 26 July 2018, the amended protection could apply even though the alleged offence related to an earlier period.
    • The Karnataka High Court reproduced the crucial distinction: where cognizance already stood taken before 26 July 2018, β€œthere would be no fresh requirement of prior sanction in such cases.”

    Benefit of Amended Section 19 Depends on Whether Cognizance Was Already Taken

    • After considering the authorities, the Karnataka High Court crystallised the applicable position.
    • It held that the benefit of the amended Section 19(1) is available where the Court had not already taken cognizance before the amendment became operative.
    • In Prakash Kumar’s cases, however, the FIRs had been registered, investigations completed, charge sheets filed and cognizance taken before the amendment.
    • The amended sanction requirement therefore could not invalidate or reopen the cognizance already taken.

    Trial Court Correctly Continued PC Act Proceedings

    • The High Court found no error in the Trial Court’s order dated 24 February 2026.
    • The Trial Court had discharged Prakash Kumar from the IPC offences but rejected his discharge plea concerning the PC Act offences. According to the High Court, the Trial Court correctly applied the governing principles because the amended Section 19 could not benefit the petitioner after cognizance had already been taken under the pre-amendment regime.
    • Accordingly, all three criminal revision petitions were dismissed.

    Key Takeaway

    The decision draws an important temporal line at 26 July 2018 for the amended sanction protection under Section 19(1) of the Prevention of Corruption Act.

    The Karnataka High Court’s reasoning indicates that while the amended provision extends sanction protection to former public servants where applicable, it does not require courts to reopen cognizance already validly taken before the amendment came into force.

    Thus, a retired public servant cannot secure discharge merely by invoking the amended Section 19(1) where cognizance of the PC Act offences had already been taken before 26 July 2018. In the present case, the High Court consequently upheld continuation of the corruption proceedings against B.G. Prakash Kumar while leaving the allegations to be determined at trial.

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

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

    Source: Karnataka High Court

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  • Bombay High Court Quashes FIR After Parties Reconcile Redevelopment Dispute

    Bombay High Court Quashes FIR After Parties Reconcile Redevelopment Dispute

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

    Date: 21.09.2026

    Bombay High Court Quashes FIR After Parties Reconcile Redevelopment Dispute

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

    The Bombay High Court has quashed an FIR arising from a dispute between a member of a co-operative housing society and persons allegedly involved with the new developer appointed for the society’s redevelopment, after the complainant and the accused reconciled their dispute and filed consent affidavits.

    Justice Milind N. Jadhav, while allowing a batch of six petitions, explained that Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) substantially reproduces the inherent powers earlier contained in Section 482 of the Code of Criminal Procedure, 1973 (CrPC) and enables High Courts to intervene to prevent abuse of process and secure the ends of justice.

    The order was passed on September 18, 2026, with the lead matter being Mohammed Jasim Bhati v. State of Maharashtra & Ors., Criminal Writ Petition No. 4532 of 2026.

    Six Petitions Sought Quashing of Same FIR

    • The High Court was dealing with six petitions arising from FIR No. 0456 of 2026 registered with Versova Police Station, Mumbai.
    • The lead petition was filed by Mohammed Jasim Bhati. The connected petitions were filed by Rajeev Narayandas Bhathija, Samina Rayees Khan, Horace Poorekhorsandi, Abdul Kader Haji Noor Mohammed and Shakeel Ahmed Bhati.
    • All the petitions were filed under Section 528 BNSS seeking quashing of the FIR.

    FIR Arose From Society Redevelopment Dispute

    • The complainant was a member of a co-operative housing society and had a dispute concerning his gala premises in relation to the redevelopment undertaken by the society.
    • According to the order, the petitioners were accused by the complainant of having colluded with the new developer appointed by the society.
    • However, the Court specifically noted that the complainant’s grievance was restricted to his own gala premises.
    • The dispute subsequently took a different course when the complainant and petitioners reconciled and jointly sought to bring the criminal proceedings to an end.

    Former Developer Seeks to Intervene

    • An additional issue arose when the society’s former developer, whose Development Agreement had been terminated, sought to intervene in the criminal writ petitions.
    • Counsel appearing for the old developer argued that the FIR concerning the complainant’s gala also affected certain substantive rights of the former developer.
    • The Court was informed that several civil proceedings relating to the parties’ substantive rights were already pending before the High Court as well as in arbitration.
    • The old developer therefore sought time to intervene in the proceedings.

    Bombay HC Rejects Old Developer’s Intervention

    • The High Court rejected the intervention request outright.
    • Justice Jadhav observed that whatever substantive rights the old developer might have against the society concerning the terminated Development Agreement could be pursued in the appropriate proceedings available under law.
    • The Court noted that the former developer had already initiated civil proceedings before the High Court and arbitration proceedings.
    • His intervention in criminal petitions which the complainant and accused themselves wanted to have quashed by consent was therefore held to be not maintainable.
    • At the same time, the High Court protected the former developer’s position by expressly keeping open any rights he might have concerning his relationship with the society, the redevelopment or the terminated Development Agreement.
    • The Court made it clear that it was expressing no opinion on the merits of those substantive rights.

    Six Consent Affidavits Filed by Complainant

    • A decisive development was the filing of six consent affidavits dated September 12, 2026, one in each of the six petitions.
    • After examining the affidavits, the High Court recorded that the parties had β€œreconciled their dispute altogether.”
    • Justice Jadhav observed that the Court needed to intervene so that the β€œignominy of the criminal proceeding” concerning the complainant’s single gala was not carried forward after the underlying dispute had been resolved.
    • The Court therefore found it appropriate to allow the petitions.

    Section 528 BNSS Carries Forward Inherent Powers Under Section 482 CrPC

    The judgment is particularly relevant because it explains the relationship between Section 482 CrPC and Section 528 BNSS.

    The High Court observed that Section 482 CrPC conferred inherent powers upon High Courts to make orders necessary to:

    • Give effect to an order of the Court, prevent abuse of the process of any Court, or otherwise secure the ends of justice.
    • The Court then noted that under the BNSS, this power has been incorporated in Section 528, which substantially reproduces the language and intent of the former Section 482 CrPC.
    • The ruling therefore reinforces that the transition from the CrPC to the BNSS has not removed the High Court’s inherent jurisdiction to quash criminal proceedings in appropriate cases.

    Section 528 BNSS Remains a Discretionary Power

    • Justice Jadhav emphasised that the inherent power is not mechanical or automatic.
    • The Court observed that High Courts may intervene where proceedings have been instituted with mala fide motives, to harass an accused, or where continuation of proceedings would result in procedural harassment.
    • The provision can also enable the Court to terminate FIRs or criminal proceedings where the circumstances justify exercise of its inherent jurisdiction.
    • Importantly, however, the High Court stated that exercise of powers formerly under Section 482 CrPC and now under Section 528 BNSS remains discretionary and depends upon the facts of each case.

    Bombay HC Relies on Supreme Court’s Bhajan Lal Judgment

    • The High Court referred to the Supreme Court’s landmark decision in State of Haryana v. Bhajan Lal, 1992 AIR 604.
    • The Court noted that Bhajan Lal laid down model categories and guidelines identifying circumstances in which FIRs may be quashed.
    • Justice Jadhav further observed that the Supreme Court had explained that the inherent power is an acknowledgment of powers already inherent in the High Court rather than the source of some additional jurisdiction.

    Even Non-Compoundable Offences May Be Quashed in Appropriate Cases

    • The Bombay High Court also reiterated an important distinction between compounding an offence and quashing criminal proceedings through the High Court’s inherent jurisdiction.
    • Referring to the principles discussed in Bhajan Lal, the Court observed that even non-compoundable offences may be quashed where necessary, with the High Court required to consider whether continuation of the prosecution would further or undermine the interests of justice.
    • At the same time, the Court specifically cautioned that grave offences such as murder, rape and dacoity ordinarily cannot be quashed merely because the parties have reached a settlement, since such offences carry wider societal implications.
    • The order therefore does not lay down that every criminal case must be quashed once the parties settle. Rather, the inherent jurisdiction remains dependent upon the nature of the controversy and the interests of justice.

    Private Nature of Redevelopment Dispute Considered

    • In the present case, the criminal proceedings arose from a dispute connected with a society member’s own gala in a redevelopment project.
    • The complainant’s allegations against the petitioners concerned their alleged collusion with the new developer, but the grievance remained confined to the complainant’s premises.
    • With the complainant and petitioners having subsequently reconciled their dispute and filed consent affidavits, the High Court concluded that continuation of the criminal proceedings was unnecessary.

    FIR No. 0456 of 2026 Quashed

    • The Bombay High Court ultimately allowed all six writ petitions in terms of their respective prayer clauses.
    • The petitions sought issuance of an appropriate writ calling for the records concerning FIR C.R. No. 0456 of 2026 registered with Versova Police Station, Mumbai, and quashing the FIR after examining its legality, validity and propriety.
    • The connected petitions contained substantially identical reliefs concerning the same FIR.
    • The High Court accordingly recorded:
    • β€œAll six Petitions are allowed and disposed.”
    • Thus, Mohammed Jasim Bhati and the petitioners in the five connected matters succeeded in having the FIR quashed.
    • What Happens to the Former Developer’s Claims?
    • The order contains an important qualification concerning the former developer.
    • Quashing of the criminal FIR does not adjudicate or extinguish the former developer’s independent civil or contractual rights.

    The High Court expressly left open whatever rights the former developer may have regarding:

    • his relationship with the co-operative housing society;
    • the redevelopment project;
    • termination of his Development Agreement; and
    • remedies otherwise available to him under law.

    Those questions may continue to be litigated in the already pending civil or arbitration proceedings, and the High Court expressly refrained from giving any opinion on their merits.

    This distinction is important: the judgment terminates the criminal proceedings arising from the complainant’s individual gala dispute, but it does not determine the broader redevelopment dispute involving the former developer.

    Why the Judgment Is Significant

    • The ruling has significance under the new criminal procedural regime introduced by the BNSS because it expressly recognises the continuity between Section 482 CrPC and Section 528 BNSS.
    • The Bombay High Court has confirmed that Section 528 substantially preserves the High Court’s inherent jurisdiction to intervene where necessary to prevent abuse of judicial process and secure the ends of justice.
    • The judgment also illustrates the distinction between criminal proceedings arising from an essentially private dispute and independent civil or contractual disputes involving third parties. Settlement of the former may justify quashing in an appropriate case, while the latter can remain open for adjudication in their proper forum.

    Key Takeaway

    The Bombay High Court’s ruling makes clear that Section 528 BNSS carries forward the inherent quashing jurisdiction previously exercised under Section 482 CrPC.

    Where a criminal proceeding arises from a private dispute, the parties have fully reconciled, and continuation of the prosecution would no longer advance the interests of justice, the High Court may exercise its inherent powers to bring the proceedings to an end. However, settlement is not an automatic ground for quashing every offence.

    The nature and gravity of the alleged offence and its impact on society remain material considerations, with serious offences ordinarily standing on a different footing.

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

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

    Source: Bombay High Court

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  • Karnataka HC: Wildlife Offence Cannot Be Prosecuted Solely on Police Charge Sheet Without Section 55 Complaint

    Karnataka HC: Wildlife Offence Cannot Be Prosecuted Solely on Police Charge Sheet Without Section 55 Complaint

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

    Date: 21.09.2026

    Karnataka HC: Wildlife Offence Cannot Be Prosecuted Solely on Police Charge Sheet Without Section 55 Complaint

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

    The Karnataka High Court has quashed criminal prosecution against four accused in a case involving the alleged hunting of a wild boar, holding that where offences under the Wild Life (Protection) Act, 1972 are invoked, the statutory requirement contained in Section 55 governing cognizance must be complied with.

    Justice H.P. Sandesh, while allowing the connected proceedings, held that although the police may register an FIR and investigate the matter, prosecution for offences under Sections 9 and 51 of the Wild Life (Protection) Act cannot proceed merely on the basis of the Investigating Officer’s charge sheet when the complaint contemplated under Section 55 has not been filed by a competent authorised person.

    The Court also dealt with the application for release of a .177 calibre air gun, holding that the air gun involved fell within a category that did not require an arms licence and directing its release subject to conditions.

    The common order was delivered on September 19, 2026, in Sri Ramesh N. v. State by Arakere Police Station, W.P. No. 9069 of 2023, connected with Criminal Petition No. 9420 of 2022.

    Allegation: Wild Boar Hunted With Sporting Rifle

    • According to the prosecution, the incident occurred during the early hours of August 25, 2019, at about 4:30 a.m.
    • The accused were alleged to have hunted a wild boar using a 30.06 sporting rifle bearing No. 176100134 RFI.IN.2017, along with cartridges, allegedly without the requisite permission.

    Following information received by the police, a raid was conducted, articles were seized and criminal proceedings were initiated. After investigation, the police filed a charge sheet alleging offences under:

    • Sections 3, 25(1) and 27 of the Arms Act, 1959;
    • Sections 9 and 51 of the Wild Life (Protection) Act, 1972; and
    • Sections 146 and 196 of the Motor Vehicles Act, 1988.

    The police also seized a goods vehicle allegedly belonging to accused No. 1, claiming that it did not have valid insurance.

    Petitioners: Sporting Rifle Was Licensed

    • The accused approached the High Court under Section 482 CrPC seeking quashing of the criminal proceedings.
    • Their principal argument under the Arms Act was that the ingredients of Sections 3, 25 and 27 were not attracted.
    • They argued that they had not engaged in the manufacture or sale of arms or ammunition and that the weapon in question was a licensed firearm.
    • The petitioners further contended that the wild boar was damaging the paddy crop of petitioner No. 2 and that the incident had taken place in a paddy field rather than a reserved forest or other restricted hunting area.
    • They also relied on Section 11(2) of the Wild Life (Protection) Act in support of their defence and referred to a notification concerning wild boars in neighbouring Ramanagara district.
    • The State opposed the petitions, arguing that even possession of a licensed weapon remains subject to the conditions attached to the licence and that there was no permission to hunt wild boar merely to protect crops.

    Karnataka HC: Sections 3, 25 and 27 Arms Act Not Properly Invoked

    • The High Court examined the statutory scheme of the Arms Act, 1959 in detail.
    • Section 3 prohibits a person from acquiring, possessing or carrying a firearm or ammunition without a licence issued in accordance with the Act and Rules.
    • However, in the present case, the Court found that a licence had in fact been issued by the competent authority for the SBBL rifle. The licence was initially within Bengaluru District and was subsequently extended to the jurisdiction of Karnataka State.
    • The High Court therefore observed that the existence of the licence was clear. Whether its conditions had been contravened was a matter to be considered separately.
    • Justice Sandesh further found that there was no allegation that the petitioners had engaged in the sale or manufacture of arms or ammunition.
    • Consequently, the Court held that there was force in the petitioners’ contention that invoking Sections 3, 25 and 27 of the Arms Act against them in the manner adopted by the prosecution was bad in law.

    Section 30 Arms Act Was Relevant to Breach of Licence Conditions

    • An important aspect of the judgment is the High Court’s reference to Section 30 of the Arms Act.
    • The Court noted that Section 30 deals with punishment for contravention of a condition of a licence, or a provision of the Act or Rules for which punishment has not otherwise been provided.
    • The High Court observed that the Investigating Agency had failed to consider Section 30 before invoking Sections 3, 25 and 27.
    • The distinction was important because the prosecution’s case involved a firearm for which a licence existed, rather than a straightforward case of possession of an unlicensed firearm.

    Section 27 Arms Act Is Confined to Contraventions of Sections 5 or 7

    • The High Court also relied upon the Supreme Court’s decision in Surinder Singh v. State (Union Territory of Chandigarh), (2021) 20 SCC 24.
    • Referring to that ruling, the Court noted that after amendment of Section 27 of the Arms Act, the provision is confined to violations connected with Sections 5 or 7 of the Arms Act.
    • The earlier concept of using a weapon for an β€œunlawful purpose” was no longer, by itself, an inseparable ingredient of Section 27 after the amendment.
    • The High Court further noted the Supreme Court’s observation that where a person is in authorised possession of a weapon, he cannot simply be treated as having used an unlicensed weapon prohibited under Section 5.
    • The Karnataka High Court also referred to the Kerala High Court’s decision in Joby and Others v. State of Kerala, where it was observed that Section 27 would be attracted where the use of arms or ammunition was in contravention of Section 5, and that use of a licensed gun for shooting a wild boar would not, merely for that reason, constitute an Arms Act offence under the provision.

    Section 55 Wildlife Act Becomes Decisive

    • The most consequential part of the ruling concerned Section 55 of the Wild Life (Protection) Act, 1972.
    • Sections 9 and 51 of the Act had been invoked against the accused. Section 9 prohibits hunting of specified wild animals except as permitted under the Act, while Section 51 prescribes penalties for contraventions.
    • Section 55, however, specifically regulates cognizance of offences under the Wildlife Act.
    • The High Court noted that a court cannot take cognizance of an offence under the Act except upon a complaint by the persons/statutory authorities specified in Section 55, including the designated wildlife authorities or other duly authorised persons.

    No Complaint Filed by Officer Specified Under Section 55

    • Applying the provision to the facts, the High Court found that no complaint had been lodged by an officer specified under Section 55.
    • Instead, the proceedings had arisen from police action, investigation and the subsequent filing of a charge sheet.
    • The Court recorded that the accused had allegedly been found in possession of wild boar meat and weapons, were arrested and subsequently released on bail. The rifle allegedly used in the incident had also already been released.
    • Justice Sandesh drew an important distinction: an FIR can be registered and the police can investigate, but when prosecution is sought for offences under Sections 9 and 51 of the special enactment, the requirement of a complaint by an authorised person under Section 55 must be satisfied.
    • The Court held that the Investigating Officer could make use of material gathered during investigation, but prosecution under the Wildlife Act could not proceed in the manner adopted without the statutorily required complaint.

    Supreme Court’s Murad Ali Khan Judgment Applied

    • The High Court relied significantly upon the Supreme Court’s decision in State of Bihar v. Murad Ali Khan & Others, (1988) 4 SCC 655.
    • In that case, the Supreme Court had examined Section 55 and held that cognizance of an offence under the Wildlife Act could be taken only upon the complaint of the statutory officer contemplated by the provision.
    • The Karnataka High Court reproduced the Supreme Court’s explanation that even if the jurisdictional police register a case concerning an alleged Wildlife Act offence, the statutory manner in which the court may take cognizance remains governed by Section 55.
    • The Court also relied on its earlier decision in Sri S. Bylaiah v. State of Bannerghatta Police, ILR 2008 KAR 1892, where proceedings had been quashed because the complainant was not an authorised person within the meaning of Section 55.
    • Ultimately, the Court found that the present proceedings had been initiated solely on the basis of registration of the police case rather than through the complaint required under Section 55.
    • It therefore held that there was a clear statutory bar to taking cognizance in the manner adopted.

    .177 Calibre Air Gun Did Not Require Licence

    • The connected writ petition raised another significant question concerning the seized PRECIHOLE SPORTS CAL. 4.5 (.177) air gun, Serial No. AH0-01581.
    • Ramesh N. sought release of the air gun, contending that it was an exempted weapon that did not require an arms licence.
    • The petitioner’s case was that an air rifle with muzzle energy below 20 joules or 15 ft-lbs and/or bore below .177 inch/4.5 mm fell within Category III(f)(ii) of the Arms Rules, 2016 and was not subject to licensing requirements.
    • The FSL examination recorded that the seized weapon was a .177 calibre air gun, was in working condition and had an effective range of approximately 25 yards.
    • The High Court ultimately found that the air gun fell within Category III(f)(ii) and therefore did not require an arms licence.
    • It also noted that the FSL report did not establish that the air gun had been used for hunting.

    Keeping Seized Air Gun Idle Would Cause Deterioration

    • The Trial Court had earlier refused release of the air gun, partly because of an apprehension that it could again be used for hunting or could be transferred or altered.
    • The High Court found this reasoning unsustainable.
    • Justice Sandesh observed that such apprehension could not by itself justify continued retention of the weapon. The Court also took into account that keeping the air gun idle could cause its condition and value to deteriorate.
    • Accordingly, it held that the Trial Court ought not to have rejected the application for release.

    Criminal Prosecution Quashed β€” But Fresh Complaint Permitted

    • The Karnataka High Court ultimately allowed Criminal Petition No. 9420 of 2022 and quashed the Trial Court’s taking of cognizance and the criminal prosecution in C.C. No. 1216/2021 because the proceedings violated Section 55 of the Wild Life (Protection) Act.
    • However, this is an important qualification: the Court did not permanently foreclose prosecution for the alleged wildlife offence.
    • The High Court expressly granted liberty to the prosecuting authority to invoke Section 55 through a competent officer and file a complaint invoking the appropriate offences.
    • Thus, the judgment is primarily a ruling on the legality of the mode of prosecution and cognizance, rather than a final factual determination that no wild boar was hunted.

    Air Gun Ordered to Be Released

    • The High Court also allowed W.P. No. 9069 of 2023, set aside the Trial Court’s order dated August 2, 2022 and allowed the application under Section 457 CrPC.
    • The Investigating Officer was directed to release the air gun after obtaining an indemnity bond of β‚Ή1,00,000 with one surety.

    The release was made subject to conditions that the petitioner:

    • must not sell the air gun;
    • must not alter its nature; and
    • must produce it whenever required by the authority or the Court.

    Important Precedents Referred to by the High Court

    • The judgment referred to several decisions concerning the Arms Act, Wildlife Act and inherent powers of the High Court, including Deomuni Sharma v. State of Jharkhand, (2009) 16 SCC 80, on Section 27 of the Arms Act; Gulam Mustafa Malik v. State of Maharashtra & Anr., 2016 SCC OnLine Bom 1577, concerning Section 55 of the Wildlife Act; Rajan & Others v. State of U.P., 2008 (2) AJHAR (NOC) 554 (All.), concerning sanction under the Arms Act; and State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335, on the scope of Section 482 CrPC.
    • It further relied on State of Bihar v. Murad Ali Khan & Others, (1988) 4 SCC 655, Surinder Singh v. State (UT of Chandigarh), (2021) 20 SCC 24, Manish Bhupendrabhai Panwala v. State of Gujarat & Another, Joby & Others v. State of Kerala and Sri S. Bylaiah v. State of Bannerghatta Police, ILR 2008 KAR 1892.

    Why the Judgment Is Significant

    • The ruling draws an important distinction between police investigation and statutory cognizance under a special enactment.
    • The High Court did not hold that police are powerless to register an FIR or investigate alleged wildlife offences. Instead, it held that where prosecution is ultimately pursued for offences under the Wild Life (Protection) Act, the special procedure prescribed by Section 55 for taking cognizance cannot be bypassed by proceeding solely on a police charge sheet.
    • The judgment is also important for firearms law because it distinguishes between the use of a licensed firearm and offences specifically contemplated by Sections 3, 25 and 27 of the Arms Act. Where the allegation may concern breach of licence conditions, the appropriate statutory provision must be identified rather than mechanically invoking provisions dealing with unlicensed possession or other distinct Arms Act contraventions.
    • Finally, the ruling provides useful clarification regarding low-powered .177 calibre air guns under the Arms Rules, 2016, with the Court holding on the facts before it that the seized air gun fell within Category III(f)(ii) and was not subject to licensing requirements.

    Key Takeaway

    The Karnataka High Court has quashed the existing prosecution arising from the alleged wild boar hunting incident because cognizance under the Wild Life (Protection) Act had been taken without the complaint of a competent person contemplated by Section 55.

    At the same time, the ruling does not amount to a final acquittal on the factual allegation of hunting. The competent prosecuting authority has expressly been given liberty to institute proceedings afresh in accordance with Section 55 and invoke appropriate offences. The Court separately ordered release of the seized .177 calibre air gun, finding it to fall within a category not requiring an arms licence and subjecting its release to safeguards against sale, alteration or non-production when required.

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

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

    Source: Karnataka High Court

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  • Bombay HC Clarifies 2026 IBC Amendment: Section 96(4) Extends to Pending Personal Insolvency Proceedings

    Bombay HC Clarifies 2026 IBC Amendment: Section 96(4) Extends to Pending Personal Insolvency Proceedings

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

    Date: 19.09.2026

    Bombay HC Clarifies 2026 IBC Amendment: Section 96(4) Extends to Pending Personal Insolvency Proceedings

    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 ruling concerning personal guarantors, secured creditors and recovery proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC), the Bombay High Court has held that the newly introduced Section 96(4) of the IBC operates retroactively and therefore applies even to applications under Sections 94 and 95 that were already pending when the amendment came into force on May 26, 2026.

    The Division Bench of Justice Manish Pitale and Justice Shreeram V. Shirsat delivered the judgment on September 18, 2026, in a batch of petitions led by Indian Bank v. Shabbir Abbas Patel & Ors., Writ Petition No. 2819 of 2026. The judgment bears neutral citation 2026:BHC-OS:20542-DB.

    The ruling has potentially wide implications for banks, financial institutions and other creditors facing recovery obstacles because of interim moratoriums triggered by personal insolvency applications against guarantors.

    The Central Question Before the Bombay High Court

    • The core issue was whether Section 96(4), introduced into the IBC with effect from May 26, 2026, applies only to fresh applications filed after that date or whether it also affects applications already filed and pending.
    • The Court framed the issue specifically as whether the amendment operates retroactively, so that the exclusion introduced by Section 96(4) applies to pending personal-guarantor insolvency proceedings as well.
    • This question arose because, before the amendment, filing an application under Sections 94 or 95 could trigger an interim moratorium under Section 96, affecting legal actions or proceedings concerning debts.
    • The petitioning creditors argued that the amendment was introduced to address misuse of this mechanism and must therefore apply to pending cases. The opposing parties contended that the amendment was prospective and could affect only applications filed after May 26, 2026.

    Why Section 96 Was Amended

    • A major part of the creditors’ case concerned what they described as the misuse of the interim moratorium by debtors and personal guarantors.
    • The petitioners relied upon the report of the Select Committee on the IBC (Amendment) Bill, 2025, contending that stakeholders, including members of the NCLT, had highlighted misuse of Sections 94, 95 and 96 by debtors to obstruct legitimate creditor action.
    • Reliance was also placed on the Bombay High Court’s earlier decision in Rozina Firoz Hajiani v. Union of India, where the Court had taken judicial notice of concerns surrounding misuse of the interim moratorium.
    • The creditors consequently argued that restricting the amendment only to future applications would allow the very problem sought to be remedied to continue in all applications that happened to be pending on May 26.

    Creditors Argue Amendment Is Curative and Retroactive

    • The banks and financial institutions argued that the amendment was remedial or curative in nature.
    • They relied upon Supreme Court authorities dealing with retrospective and retroactive operation of statutory amendments, including BCCI v. Kochi Cricket Pvt. Ltd., (2018) 6 SCC 287, and M. Rajendran v. KPK Oils and Proteins India Pvt. Ltd., (2026) 3 SCC 505.
    • It was also argued that the interim moratorium was not a vested right of the debtor or guarantor. Decisions including Vineeta Sharma v. Rakesh Sharma, (2020) 9 SCC 1 and SEBI v. Rajkumar Nagpal, (2023) 8 SCC 274 were relied upon while explaining the concept of retroactive operation.

    Personal Guarantors Oppose Retroactive Application

    • The contesting respondents argued that the normal presumption is that legislation operates prospectively unless retrospective operation is expressly stated or follows by necessary implication.
    • They emphasised the wording of Section 96(4), particularly the expression β€œshall not apply where an application is filed”, contending that it points towards prospective application from May 26, 2026.
    • The respondents further argued that an interim moratorium provides a debtor with significant statutory protection from creditor action and that this protection should not be taken away in already pending proceedings.
    • Reliance was placed, among other authorities, on Rakesh Bhanot v. Gurdas Agro Pvt. Ltd., (2025) 6 SCC 781, concerning the importance of the interim moratorium under Section 96.

    Bombay High Court: Amendment Is Retroactive

    • After examining the statutory language, legislative background, object of the amendment and principles governing retroactive legislation, the Division Bench rejected the argument that Section 96(4) could operate only against applications filed after May 26, 2026.
    • The Court held that the amendment β€œmust operate retroactively” and consequently applies not merely to proceedings initiated on or after May 26, 2026, but also to proceedings already pending on that date.
    • The Court reasoned that the purpose of the amendmentβ€”to address the identified misuse of the interim moratoriumβ€”would be fully achieved only by applying the new provision to pending proceedings as well.
    • It also concluded that the respondents did not possess a vested right to the interim moratorium during the procedural stage governed by Sections 94 to 99 of the IBC.

    Section 96(4) Applies Even to Pending Sections 94 and 95 Proceedings

    • The Court ultimately answered the central question in categorical terms.
    • It held that Section 96(4), introduced with effect from May 26, 2026, applies retroactively and therefore extends to pending proceedings. Although the amendment operates from May 26, 2026 onwards, its effect extends to proceedings under Sections 94 and 95 that were already pending on that date.
    • The Division Bench also agreed with the approach previously adopted by a Single Judge of the Bombay High Court in Tata Capital Financial Services Ltd. v. Neel Motors LLP & Ors., as well as the Delhi High Court’s order in IDBI Trusteeship Services Ltd. v. Manish Jain & Ors.
    • This ruling therefore settles, at least for the batch before the Bombay High Court, the dispute over whether pre-amendment personal-guarantor applications can continue to enjoy the earlier Section 96 interim-moratorium protection after May 26, 2026.

    Indian Bank’s Case: DRT Restraint Set Aside

    • The consequences of this interpretation were directly applied in Indian Bank v. Shabbir Abbas Patel.
    • Indian Bank had challenged orders dated October 3, 2024 and March 13, 2026 passed by DRT-I, Mumbai, restraining the Bank from proceeding with an auction. The restraint was linked to the interim moratorium arising from personal insolvency proceedings.
    • An earlier Section 95 petition had been dismissed by the NCLT on February 18, 2026. The respondents, however, relied upon a subsequent Section 95 petition filed on February 19, 2026 and registered on May 6, 2026.
    • Applying its interpretation of the amended law, the High Court held that even the interim moratorium triggered by the subsequent Section 95 proceeding ceased to operate from May 26, 2026.

    Court Finds Repeated Insolvency Proceedings Highlighted the Mischief

    • The Division Bench considered the facts of the Indian Bank matter to illustrate the problem that the legislative amendment sought to address.
    • The Court observed that allowing the interim moratorium to continue because of the subsequent Section 95 petition would be contrary to the legal position after the amendment and would permit repeated reliance on insolvency proceedings to obstruct creditor action.
    • Accordingly, Writ Petition No. 2819 of 2026 filed by Indian Bank was allowed.

    Auction and Sale Certificate Upheld

    • The High Court granted substantial relief to Indian Bank.
    • The DRT-I orders dated October 3, 2024 and March 13, 2026 were quashed and set aside, resulting in the restraint on the Bank ceasing to operate.
    • The Court further held that the Bank’s action in confirming the sale pursuant to the auction conducted on September 30, 2024, as well as issuance of the sale certificate dated February 25, 2026 and its registration on February 27, 2026, were validly taken in the circumstances.
    • The Court Commissioner was permitted to proceed in accordance with law for taking possession of the secured asset. The police authorities were directed to provide appropriate protection and assistance so that possession could be obtained and handed over to the Bank for delivery to the auction purchaser.
    • The underlying Securitisation Application No. 115 of 2024 was directed to be decided expeditiously by DRT-I, Mumbai.

    Other Banks and Financial Institutions Also Before the Court

    • The judgment did not concern Indian Bank alone. It disposed of a batch of petitions involving several secured creditors and financial institutions, including RBL Bank Ltd., Godrej Finance Ltd., Asset Reconstruction Company (India) Ltd. and Apna Sahakari Bank Ltd.
    • In the ARCIL matter, for example, the Court held that the pending Section 95 petition did not prevent the DRAT from hearing the creditors’ appeals, because Section 96(4) meant that the interim moratorium was no longer operating after May 26, 2026.
    • The judgment therefore has significance beyond the facts of a single borrower-creditor dispute.

    Significance for Banks and Secured Creditors

    • The ruling is important for secured-creditor enforcement because the Court has clarified that the May 2026 amendment cannot be avoided merely because a personal insolvency application was filed before the amendment took effect.
    • Where Section 96(4) applies to a personal guarantor to a corporate debtor, a pending Section 94 or Section 95 application cannot continue to provide the earlier interim-moratorium protection merely on the basis of its pre-May 26 filing date.
    • This can have direct consequences for SARFAESI proceedings, DRT/DRAT proceedings, auctions, recovery proceedings and possession of secured assets where creditors had previously faced objections founded upon Section 96.
    • The judgment, however, does not eliminate every remedy available to personal guarantors or decide the merits of their insolvency applications. Its central holding concerns the effect of Section 96(4) on the interim moratorium from May 26, 2026.

    Key Legal Principle

    The principle emerging from the judgment can be stated as follows:

    • Section 96(4) of the Insolvency and Bankruptcy Code, introduced with effect from May 26, 2026, operates retroactively. Therefore, its effect extends to applications under Sections 94 and 95 that were already pending on May 26, 2026, and the excluded interim-moratorium protection cannot continue merely because the personal insolvency proceeding was instituted before the amendment.
    • This interpretation, according to the Bombay High Court, gives effect to the legislative object of preventing misuse of the interim moratorium while not taking away any vested right, because no such vested right exists in the Section 96 interim moratorium during the procedural stage of Sections 94 to 99.

    Key Takeaway

    The Bombay High Court’s ruling substantially clarifies the effect of the 2026 amendment to Section 96 of the IBC. A personal guarantor cannot claim continuation of the earlier Section 96 interim moratorium after May 26, 2026 merely because the Section 94 or 95 proceeding was filed before that date.

    For Indian Bank, this meant the DRT restraint was set aside, the relevant auction and sale certificate were sustained, and steps for obtaining physical possession of the secured asset were permitted to proceed.

    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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