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  • Bombay HC: Builders Cannot Collect More Than 10% of Flat Price Without Registered Sale Agreement β€” RERA Section 13 Compliance Mandatory

    Bombay HC: Builders Cannot Collect More Than 10% of Flat Price Without Registered Sale Agreement β€” RERA Section 13 Compliance Mandatory

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

    Date: 17.10.2026

    Bombay HC: Builders Cannot Collect More Than 10% of Flat Price Without Registered Sale Agreement β€” RERA Section 13 Compliance Mandatory

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

    The Bombay High Court has directed Rare Townships Pvt. Ltd. to execute and register a RERA-compliant agreement for sale within four weeks, while treating 4 October 2024 as a tentative possession date pending final determination by the Maharashtra Real Estate Appellate Tribunal.

    Background of the dispute

    The dispute concerns a residential flat in the developer’s Ghatkopar project, originally marketed as β€œRising City” and later registered under RERA as β€œNorth Sea Heights (A-1).”

    The buyers initially received a holding receipt in January 2011 for a different flat. The parties subsequently changed the unit, and a provisional allotment letter dated 30 November 2014 was issued for Flat No. 805 in Building A-1, with a stated consideration of Rs. 1.248 crore.

    The parties ultimately agreed that the buyers had paid Rs. 38.47 lakh by 2016. Despite this payment, no registered agreement for sale was executed. The core disagreements included the unpaid balance, the agreement’s terms, the possession timeline, parking and amenities, and each side’s liability for delay.

    RERA authority’s earlier directions

    In July 2025, MahaRERA partly allowed the buyers’ complaint. It required the developer to execute a registered agreement for sale under Section 13 of the Real Estate (Regulation and Development) Act, 2016, based on the allotment letter.

    MahaRERA also held that:

    • The buyers would pay the outstanding consideration and any applicable interest for delayed payments under the statutory framework.
    • The developer would pay interest for delayed possession from 4 October 2024 until it offered possession with an Occupation Certificate.
    • The parties’ respective payment obligations could be adjusted and set off when possession was delivered.

    The buyers appealed for a more complete RERA-compliant agreement, including parking, amenities, model-agreement protections and safeguards against payment demands or termination before registration.

    Interim tribunal order and developer’s challenge

    The Appellate Tribunal initially directed the developer to provide and execute a RERA-compliant agreement. It also restrained the developer from demanding further money or issuing termination notices until the agreement was executed and registered. A review order corrected the buyers’ payment figure to Rs. 38.47 lakh and corrected the allotment-letter date.

    Rare Townships challenged the interim order in the High Court. Its principal objection was that the Tribunal had effectively decided disputed issues at an interim stage, particularly by requiring the agreement to state a possession date and by excluding interest for alleged payment delays before the agreement’s execution.

    High Court’s reasoning

    The Court emphasized that a registered agreement for sale is not optional once substantial sums have been accepted from a buyer. It noted that both the earlier Maharashtra Ownership Flats Act framework and RERA seek to prevent promoters from accepting significant advances without documenting the parties’ rights and obligations in a registered agreement.

    Under Section 13 of RERA, a promoter cannot accept more than 10% of an apartment’s cost before entering into a registered written agreement for sale. The agreement must cover key matters, including project specifications, payment schedules, the possession date and default interest.

    Here, the Court found that the developer had accepted more than 30% of the agreed consideration without executing the agreement. It therefore upheld the essential requirement to execute a registered, RERA-compliant agreement.

    The Court drew a distinction, however, between requiring an agreement and conclusively determining the contractual possession date. The possession date remained an issue in the buyers’ pending appeal before the Appellate Tribunal. The High Court therefore modified the interim arrangement rather than treating that issue as finally settled.

    Final directions

    The Court disposed of the second appeal with these principal directions:

    • Tentative possession date: The agreement must record 4 October 2024 as the possession date.
    • No final determination: That date is tentative, without prejudice to either side, and remains subject to final adjudication by the Appellate Tribunal.
    • Rectification if required: If the Tribunal changes the possession date, the parties’ rights and liabilities will follow that determination and they must execute a deed of rectification.
    • RERA-compliant agreement: The agreement must comply with Section 13 of RERA and the prescribed model agreement under Maharashtra’s 2017 RERA Rules.
    • Time limit: The developer must execute and register the agreement within four weeks of the judgment.
    • Issues kept open: All remaining disputes, including payment, interest, parking, amenities, compensation and the final possession timeline, remain open before the Appellate Tribunal.

    Why the decision matters

    The ruling reinforces that developers cannot retain substantial buyer payments while postponing the registered agreement for sale. It also confirms that a RERA-compliant agreement must transparently state essential commercial terms, including payment obligations, possession and default consequences.

    At the same time, the judgment preserves procedural fairness: an interim order can secure the statutory agreement and protect buyers from premature demands or termination, but contested issues such as the final possession date must remain available for full appellate adjudication.

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

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

    Source: Bombay High Court

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  • Bombay High Court Holds That Non-Recovery of a Journey Ticket Does Not Defeat Railway Accident Compensation Claim

    Bombay High Court Holds That Non-Recovery of a Journey Ticket Does Not Defeat Railway Accident Compensation Claim

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

    Date: 17.10.2026

    Bombay High Court Holds That Non-Recovery of a Journey Ticket Does Not Defeat Railway Accident Compensation Claim

    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‚Ή8,00,438.36 to the parents of a man who died after falling from a crowded local train, holding that the absence of a ticket for one leg of his journey did not by itself disprove that he was a bona fide passenger.

    Background of the case

    Bhaskar Kandh Panda and Prafulla, also known as Pranita Bhaskar Panda, sought compensation following the death of their son, Sandeep P. Panda, on 1 September 2015. According to their case, Sandeep travelled from Kurla to Belapur for personal work and later boarded a local train from Belapur toward Chhatrapati Shivaji Maharaj Terminus (CSMT) to meet a friend.

    The parents said that the train was heavily crowded and that Sandeep, who was standing near the door, was pushed and fell between Kurla and Chunabhatti stations. He suffered severe head injuries and later died at Sion Hospital.

    A railway ticket for the Kurla-to-Belapur journey was recovered from his wallet during the inquest. However, the ticket for the later Belapur-to-CSMT journey was not found.

    Why the Railway Claims Tribunal rejected the claim

    The Railway Claims Tribunal initially dismissed the parents’ compensation application in March 2020. Although it accepted that Sandeep had fallen from a train and died in an untoward incident, it concluded that he was not a bona fide passenger because the ticket for the Belapur-to-CSMT leg was missing.

    Central Railway defended that conclusion, arguing that the deceased’s account of travel was unreliable and that standing near a train door amounted to negligence. It also contended that there was no eyewitness to establish the alleged fall.

    High Court’s findings

    Justice Aarti Sathe found the Tribunal’s reasoning internally inconsistent. The Tribunal had already accepted the police material, inquest panchanama and railway records showing that Sandeep fell from a train between Kurla and Chunabhatti and died from the resulting injuries. It could not, the High Court held, deny compensation solely because one ticket was not recovered.

    The Court relied on the Supreme Court’s ruling in Union of India v. Rina Devi, which clarifies that a missing ticket does not automatically defeat a railway accident claim. A claimant may meet the initial burden by filing an affidavit setting out relevant facts, after which the burden shifts to the Railways to rebut the case through the surrounding evidence.

    In this case, the parents had produced an affidavit and supporting records, while a valid one-way ticket was recovered from the deceased. The Railways did not produce sufficient evidence to establish that the death fell within any statutory exception under Section 124A of the Railways Act, 1989.

    Key legal principles reaffirmed

    • A missing ticket is not conclusive: The absence of a ticket after a fatal railway accident cannot, by itself, establish that the deceased was travelling without authority.
    • Evidence must be assessed as a whole: The Court considered the recovered ticket, inquest record, police report, affidavit and finding that the death resulted from a train fall.
    • Negligence does not automatically bar compensation: The Railways did not prove that the case fell under an exception to statutory liability merely because the deceased was allegedly near the door of a crowded train.
    • Beneficial legislation requires a liberal approach: The Railways Act’s compensation provisions are intended to protect victims and dependants. Where two reasonable interpretations are possible, the one favouring the beneficiary should be preferred.

    Compensation awarded

    The High Court set aside the Tribunal’s dismissal and allowed the claim. It noted that compensation for death under the applicable rules had increased from β‚Ή4 lakh to β‚Ή8 lakh after the 2016 amendment.

    Applying the principle that claimants should receive the higher of the applicable amounts, the Court awarded β‚Ή8,00,438.36. This amount reflects the original β‚Ή4 lakh compensation with interest at 9% per year from the accident date, which marginally exceeded the revised fixed compensation of β‚Ή8 lakh.

    The award is to be divided equally between the deceased’s father and mother. Central Railway must deposit the amount within eight weeks after receiving their bank details; any delay will attract further interest at 9% per annum.

    Significance of the ruling

    The decision reinforces that railway compensation claims cannot be rejected on technical grounds when the overall evidence supports an untoward railway incident. It also underscores the Railway Administration’s obligation to rebut a credible claim rather than relying only on the non-recovery of a ticket after an accident.

    For families pursuing compensation after railway accidents, the judgment highlights the importance of preserving available documents, filing a clear affidavit describing the journey and accident, and relying on inquest, police and railway records to establish the circumstances of the incident.

    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 Quashes ITP Act Proceedings

    Karnataka High Court Quashes ITP Act Proceedings

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

    Date: 17.10.2026

    Karnataka High Court Quashes ITP Act 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 . 

    The Karnataka High Court has quashed two criminal cases against Maxim K. Kurian after the State failed to show that the officers who conducted the raids were legally appointed as Special Police Officers under the Immoral Traffic (Prevention) Act, 1956.

    The order, delivered by Justice H.P. Sandesh on 15 October 2026, disposed of Criminal Petition Nos. 5994 of 2019 and 272 of 2020. The cases arose from separate police cases in Mangaluru but involved the same legal issue: whether the investigating officers had the statutory authority required to investigate offences under the ITP Act.

    The two cases

    In the first petition, Kurian, identified as accused No. 5, sought to quash proceedings in C.C. No. 3260/2017. The case stemmed from Crime No. 8/2017 registered at Barke Police Station and alleged offences under Sections 3(1), 4, 5 and 8 of the ITP Act.

    The second petition concerned C.C. No. 2311/2019, arising from Crime No. 73/2017 registered at Mangaluru East Police Station. In that case, Kurian was accused No. 1 and faced allegations under Sections 4 and 5 of the Act.

    Although the cases originated at different police stations, the Court heard them together because both turned on the same legal question concerning the authority of the officers involved.

    Central legal issue: appointment of Special Police Officers

    Kurian argued that the raids and investigations did not comply with Sections 13 and 15 of the ITP Act. Section 13 provides for the appointment of Special Police Officers to deal with offences under the statute, while Section 15 regulates searches conducted in connection with such offences.

    The petitioner’s counsel contended that:

    • No government notification was produced showing that the investigating officers had been appointed as Special Police Officers under the Act.
    • The officers therefore lacked the specific statutory authority needed to conduct raids and investigate the alleged offences.
    • No search warrant had been obtained before the raids.
    • Even where a warrantless search may be permitted, it must be carried out by an authorized Special Police Officer and the legal safeguards must be followed.

    The State submitted that the officer who conducted the raid held the rank of Inspector of Police. However, it did not rely on or produce a notification showing that the officer had been specially appointed by the State to deal with offences under the ITP Act.

    Why the Court quashed the proceedings

    The Court found that the State had not established that the investigating officer was an authorized Special Police Officer. Justice Sandesh noted that earlier Karnataka High Court decisions had treated compliance with the relevant ITP Act provisions as mandatory.

    The Court relied on the principle from previous rulings that, where there is no notification demonstrating that an investigating officer qualifies as a Special Police Officer under the Act, the investigation cannot be sustained in law.

    The decision underscores that an officer’s general police rank alone does not establish the special authorization required for investigations under a statute with its own procedural framework. For ITP Act cases, the State must be able to show the officer’s appointment under the Act when that authority is challenged.

    The ruling

    The High Court allowed both petitions and quashed the proceedings against Kurian in:

    • C.C. No. 3260/2017, arising from Barke Police Station Crime No. 8/2017; and
    • C.C. No. 2311/2019, arising from Mangaluru East Police Station Crime No. 73/2017.

    Broader significance

    The ruling reinforces the importance of procedural compliance in criminal investigations under special laws. It confirms that, in ITP Act prosecutions, the State must demonstrate that the officer conducting the raid or investigation was validly appointed under the statutory scheme.

    Where that foundational requirement is not met, proceedings may be vulnerable to being quashed. The decision is based on the procedural validity of the investigations and does not determine the underlying factual allegations on their merits.

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

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

    Source: Karnataka High Court

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  • Rajasthan HC Grants Bail Where Samples Were Drawn from Just One of Five Bags

    Rajasthan HC Grants Bail Where Samples Were Drawn from Just One of Five Bags

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

    Date: 26.09.2026

    Rajasthan HC Grants Bail Where Samples Were Drawn from Just One of Five Bags

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

    The Rajasthan High Court has granted bail to an accused in an NDPS case involving an alleged recovery of 79.400 kg of Doda Chura (poppy straw), after finding that samples for forensic examination were taken from only one out of five bags allegedly recovered from him.

    Justice Ganesh Ram Meena held that since no samples were drawn from the remaining four bags, only the material contained in the sampled bag could, at this stage, be treated as the alleged contraband. That bag weighed 19.80 kg, which was below the commercial quantity threshold. Consequently, the stringent restrictions governing bail under Section 37 of the Narcotic Drugs and Psychotropic Substances Act, 1985 were not attracted in the circumstances considered by the Court.

    Case Arose From Alleged Recovery of 79.400 Kg Doda Chura

    • Sitaram alias Udham Meena filed his second bail application under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS).
    • The proceedings arose from FIR No. 94/2025, registered at Police Station Harnavda Shahji, District Baran, Rajasthan, for offences under Sections 8, 15 and 25 of the NDPS Act.
    • The petitioner’s first bail application had earlier been dismissed as withdrawn by the High Court on 8 May 2026.
    • According to the FIR, the alleged contrabandβ€”Doda Churaβ€”was recovered from the petitioner’s possession in five separate bags, having a combined weight of 79.400 kg.

    Samples Drawn From Only Bag β€˜C’

    • The petitioner’s principal argument concerned the manner in which the samples were drawn.
    • According to the inventory report prepared before the Judicial Officer, two samples were taken only from the packet/bag marked β€˜C’. No samples were taken from the remaining four bags for examination by the Forensic Science Laboratory (FSL).
    • The defence therefore argued that there was no forensic material to establish that the substances contained in bags A, B, D and E were also contraband.
    • It was submitted that only the contents of bag C could be treated as alleged contraband for the purpose of considering bail.
    • Crucially, bag C weighed only 19.80 kg. The petitioner argued that this was below commercial quantity and hence the restrictions contained in Section 37 of the NDPS Act would not apply.

    State: All Five Bags Contained Similar Material

    • The Public Prosecutor opposed the second bail application.
    • The State argued that samples were taken from only one bag because the material found in the other bags appeared to be the same or similar.
    • It further contended that the total alleged recovery was above commercial quantity and therefore the restrictions under Section 37 of the NDPS Act continued to apply.
    • The High Court, however, did not accept that contention for the purpose of deciding the bail application.

    Court Examines Inventory and Judicial Officer’s Certificate

    • The High Court examined the record and found that the alleged recovery made on 31 May 2025 had been packed in five separate bags marked A, B, C, D and E.
    • The inventory report and certificate issued by the Additional Chief Judicial Magistrate No. 2, Chhabra, Baran on 6 June 2025 showed that only two samples, marked F and G, were drawn from bag C.
    • No sample was drawn from bags A, B, D or E.
    • This factual circumstance became decisive for the bail determination.

    Unsampled Bags Could Not Be Treated as Contraband at Bail Stage

    • The High Court held that in the absence of samples from the other four bags, the material contained in bag C alone could be treated as the alleged contraband for the purpose under consideration.

    The Court recorded:

    • β€œthe material which has been found to be in bag marked as-C can only be treated to be alleged contraband”
    • Since bag C weighed 19.80 kg, the quantity attributable to the sampled material was below commercial quantity.
    • The ruling is significant because the total physical recovery alleged by the prosecution was 79.400 kg. However, for the bail assessment, the Court did not aggregate the contents of the four bags from which no sample had been taken with the sampled bag merely because the substances appeared similar.

    Rajasthan HC Relies on Hariram v. State of Rajasthan

    • The petitioner relied upon the Rajasthan High Court’s recent order in Hariram v. State of Rajasthan, S.B. Criminal Miscellaneous Bail Application No. 741/2026, decided on 20 April 2026.
    • In Hariram, six bags were allegedly recovered containing Doda Chura. However, samples had been drawn from only two bagsβ€”marked A and E.
    • The combined weight of those two sampled bags was 45.400 kg, below the commercial quantity of 50 kg applicable to poppy straw.
    • The Court in Hariram observed that because no samples had been taken or sent to the FSL from the remaining bags, those bags could not be treated as containing contraband merely on assumption, particularly when there was nothing on record showing that the entire recovered material had first been mixed and thereafter sampled.
    • The same reasoning was applied in Sitaram’s case.

    Supreme Court’s Puranmal Jat Decision Considered

    The Hariram order, reproduced in the present judgment, also relied upon the Supreme Court’s decision in:

    • Puranmal Jat v. State of Rajasthan, Criminal Appeal No. 3394/2023 arising out of SLP (Crl.) No. 10670/2023, decided on 2 November 2023.
    • In that case, the alleged recovery was approximately 35 kg and 150 grams of Doda Posh/poppy straw, while the commercial quantity was 50 kg.
    • The Supreme Court observed that because the recovered quantity was below commercial quantity, the restriction on grant of bail under Section 37 of the NDPS Act did not apply. The accused had also remained in custody for more than seven months and the charge sheet had already been filed.

    Section 37 NDPS Act Not Attracted to 19.80 Kg Sampled Bag

    • Applying the above reasoning, the Rajasthan High Court treated 19.80 kg in bag C as the relevant alleged contraband quantity for the bail consideration.
    • Because this was below commercial quantity, the defence contention was that the special restrictions under Section 37 were not attracted, and the Court’s reasoning proceeded on that basis.
    • This distinction was particularly important because Section 37 imposes stringent conditions for release on bail in cases involving commercial quantity.
    • The order, however, is a bail-stage determination and does not finally adjudicate the nature or quantity of the entire seized material.

    More Than One Year in Custody

    • The Court also took into consideration the period of incarceration.
    • Sitaram had remained in custody since 31 May 2025, meaning that by the date of the order on 25 September 2026, he had spent more than one year in custody.
    • Considering the sampling issue, the quantity of the sampled bag and the period of custody, the High Court found it just and proper to enlarge him on bail.
    • Importantly, the Court expressly stated that it was doing so without expressing any opinion on the merits or demerits of the case.

    Second Bail Application Allowed

    • The Rajasthan High Court accordingly allowed the second bail application.

    The Court directed Sitaram alias Udham Meena to be released upon furnishing:

    • a personal bond of β‚Ή1,00,000; and
    • two sureties of β‚Ή50,000 each,

    to the satisfaction of the Trial Court.

    He was also directed to remain present before the Trial Court, or any court to which the proceedings may be transferred, on subsequent hearing dates and whenever required.

    Bail Can Be Cancelled for Similar Future Offence

    • The High Court imposed an additional safeguard.
    • It directed that if the petitioner is found involved in any other criminal case of a similar nature in the future, the prosecution would be at liberty to move an application seeking cancellation of his bail. Sitaram Alias Udham Meena RHC
    • Thus, the order grants liberty to the accused pending trial but leaves the prosecution free to seek cancellation if the stipulated condition is breached.

    Cases Referred

    Two decisions were central to the reasoning recorded in the order:

    1. Hariram v. State of Rajasthan, S.B. Criminal Miscellaneous Bail Application No. 741/2026, decided on 20 April 2026 β€” relied upon for the principle that where multiple bags are separately seized but only some are sampled, unsampled bags cannot automatically be treated as contraband in the absence of FSL examination or evidence that the entire material was mixed before sampling.
    2. Puranmal Jat v. State of Rajasthan, Criminal Appeal No. 3394/2023 arising from SLP (Crl.) No. 10670/2023, decided on 2 November 2023 β€” Supreme Court decision noting that where recovered poppy straw was below the stipulated commercial quantity, the Section 37 restriction did not apply.

    Key Takeaway

    The ruling underscores the importance of representative sampling and forensic examination in multi-bag NDPS recoveries, particularly when the prosecution seeks to rely upon the combined weight to invoke the stringent commercial-quantity bail restrictions under Section 37.

    Where five separate bags were allegedly recovered but the inventory showed that samples were taken from only one bag, the Rajasthan High Court treated only the 19.80 kg contained in that sampled bag as the alleged contraband for the purpose of deciding bail. Since that quantity was below commercial quantity and the accused had spent more than a year in custody, the Court granted bail.

    The ruling should nevertheless be read in its procedural context: the High Court did not acquit the accused or finally hold that the remaining four bags contained no contraband.

    Its determination was confined to the second bail application, and the Court expressly refrained from expressing any opinion on the merits of the prosecution case.

    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: Rajasthan High Court

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    Ravi Shekhar Jha – Advocate, Bar Council of Delhi

  • CESTAT Mumbai Allows Customs Duty Exemption on Dowtherm Heat Transfer Fluid Under SHIS Scheme

    CESTAT Mumbai Allows Customs Duty Exemption on Dowtherm Heat Transfer Fluid Under SHIS Scheme

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

    Date: 26.09.2026

    CESTAT Mumbai Allows Customs Duty Exemption on Dowtherm Heat Transfer Fluid Under SHIS Scheme

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

    The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai has held that Dowtherm RP Heat Transfer Fluid/Dowtherm A Heat Transfer Fluid, used for the initial charging and continuous operation of a Continuous Polycondensation (CP) Plant for manufacturing polyester products, falls within the definition of β€œcapital goods” and is consequently eligible for Customs duty exemption under Notification No. 104/2009-Customs dated 14 September 2009.

    Setting aside the Commissioner’s order, the Tribunal held that the thermic fluids fulfilled the statutory requirements of the Status Holders Incentive Scrip (SHIS) Scheme under the Foreign Trade Policy and that Customs was not justified in denying the exemption merely because the goods were chemicals falling under Chapter 29 or were described as inputs under SION.

    Background of the Dispute

    • Wellknown Polyesters Limited was engaged in manufacturing Polyester Filament Yarn (PFY), Polyester Oriented Yarn (POY), Fully Drawn Yarn (FDY), Draw Textured Yarn (DTY) and polyester chips at its Daman manufacturing facility.
    • For its manufacturing operations, the company had imported a Continuous Polycondensation Plant from Oerlikon Barmag under an EPCG authorisation during April–July 2012. The plant was imported without thermic fluid.
    • Subsequently, the company imported 3,01,296 kg of Dowtherm RP Heat Transfer Fluid/Dowtherm A Heat Transfer Fluid, valued at approximately β‚Ή9.86 crore, through Bills of Entry filed in October 2012. Customs duty involved was approximately β‚Ή2.55 crore.
    • Instead of paying the duty in cash, Wellknown Polyesters utilised eight SHIS scrips issued by the DGFT under the Status Holders Incentive Scrip Scheme and claimed exemption under Notification No. 104/2009-Customs. The goods were initially cleared by Customs extending the exemption.

    DRI Objects to SHIS Benefit

    • The Directorate of Revenue Intelligence (DRI), Ahmedabad Zonal Unit subsequently initiated an investigation on the ground that Notification No. 104/2009-Customs permitted duty-free import of capital goods, whereas Dowtherm heat-transfer fluid was, according to the Department, not capital goods.
    • DRI also relied upon the Standard Input Output Norms (SION), under which Dowtherm/Therminol and heat-transfer oil were identified as permitted inputs for manufacture of Polyester Partially Oriented Yarn and Polyester Filament Yarn. The Department therefore treated the material as an input rather than capital goods.
    • A Show Cause Notice dated 14 May 2013 consequently demanded approximately β‚Ή2.55 crore Customs duty with interest under Section 28(1) of the Customs Act, 1962, besides proposing confiscation under Section 111(o) and penalty under Section 112(a).
    • The Commissioner confirmed the duty demand and interest but refrained from confiscating the goods because they were no longer physically available and did not impose the proposed penalty. Wellknown Polyesters challenged that order before CESTAT.

    Appellant: Thermic Fluid Was Integral to Continuous Polycondensation Plant

    • The appellant argued that although the CP Plant and thermic fluid had been imported separately, both were required to operate together.
    • The thermic fluid was charged into the heaters, piping and vessels and thereafter continuously circulated in a closed loop between the heaters and reactors. The polyester polycondensation process required temperatures of approximately 270Β°C–300Β°C under high vacuum, making the thermic fluid critical for providing precise high-temperature heat while maintaining low system pressure.
    • The appellant relied upon the definition of β€œcapital goods” under the Foreign Trade Policy and Notification No. 104/2009-Customs, arguing that it was broad enough to cover goods required directly or indirectly for manufacture, including items necessary for the initial setting up and functioning of plant and machinery.
    • It also relied upon CBEC’s earlier clarification concerning transformer oil, under which oil required for filling/topping up a transformer was considered part of the equipment because the transformer could not function without it.

    Revenue: Chemical Falling Under Chapter 29 Cannot Be Capital Goods

    • The Department maintained that the imported thermic fluid was a chemical classifiable under Chapter 29 and therefore could not be regarded as plant, machinery, equipment or an accessory.
    • The Commissioner’s reasoning was that even though the chemical was indirectly used in manufacturing, its nature did not change into that of plant, machinery, equipment or accessories. The Department also relied upon the fact that SION treated Dowtherm as an input/raw material for polyester production.
    • CESTAT was therefore required to decide whether denial of the exemption under Notification No. 104/2009-Customs for the October 2012 imports was legally sustainable.

    CESTAT Examines SHIS Scheme and Definition of β€˜Capital Goods’

    • The Tribunal examined the Foreign Trade Policy 2009–2014 and observed that the objective of the SHIS Scheme was to promote investment in technology upgradation.
    • Paragraph 3.17.5 of the FTP permitted Duty Credit Scrips to be used for import of inputs or goods, including capital goods, subject to the stipulated conditions. More importantly, the FTP defined β€œcapital goods” broadly as plant, machinery, equipment or accessories required directly or indirectly for manufacture or production, including specified items such as refractories for initial lining and catalysts for initial charge.
    • Notification No. 104/2009-Customs, issued under Section 25(1) of the Customs Act, 1962, similarly exempted capital goods and specified components/spares/parts imported against SHIS Duty Credit Scrips from Customs duties, subject to its conditions.
    • CESTAT found the definition of β€œcapital goods” under the Customs notification and the FTP to be substantially identical.

    Thermic Fluid Critical to Functioning of CP Plant

    • The Tribunal accepted the technical evidence concerning the role played by Dowtherm in the Continuous Polycondensation Plant.
    • It observed that the thermic fluid enabled the plant to provide precise high-temperature heat while maintaining low pressure, thereby permitting efficient continuous polycondensation and energy-efficient manufacture of high molecular weight polyester.
    • On that basis, CESTAT concluded that the imported goods fulfilled the statutory requirements of the SHIS Scheme.
    • A particularly important factual finding arose from the Chartered Engineer’s Certificate. Out of the total 3,01,296 kg of imported thermic fluid, 2,92,920 kgβ€”approximately 97.2%β€”was used as a one-time/initial charge in the CP Plant’s Electric Thermal Oil Heater Boiler.
    • The fluid thereafter enabled continuous high-temperature operation at very low pressure for the polycondensation process.
    • The technical diagrams reproduced on pages 13–15 of the order further illustrate the closed-loop recirculation of Dowtherm between the thermic-fluid heater and CP Plant, the stages of polyester manufacture where heat transfer is required, and the Electric Thermal Oil Heater Boiler arrangement.

    Capitalisation in Books Also Supported Appellant

    • CESTAT additionally noted that the imported thermic fluid had been capitalised in Wellknown Polyesters’ books of account, as certified by its Chartered Accountants on 29 May 2026.
    • The Tribunal regarded this financial treatment as further evidence supporting the appellant’s case that the imported goods were treated as capital goods.

    Accordingly, the Bench held:

    • β€œthe impugned goods are covered under the definition of β€˜capital goods’”
    • and were therefore eligible for exemption under Notification No. 104/2009-Customs.

    CESTAT Relies on Reliance Communications Infrastructure

    • The Tribunal found support in Reliance Communications Infrastructure v. Commissioner of Customs, 2009 (240) E.L.T. 461 (Tri.-Bang.).
    • In that case, a Gas Suppression System included HFC 227 EA gas. The Tribunal had held that Customs could not dissect an integrated system and treat the gas required for its functioning as a mere consumable when the EPCG licence covered the complete system.
    • CESTAT applied the same reasoning to the thermic fluid, observing that where a material is essential to the functioning of the plant, its character cannot be determined merely by isolating it from the system in which it operates.

    Transformer Oil Analogy Applied to Dowtherm

    • CESTAT also referred to CBEC Circular No. 344/60/97-CX dated 22 October 1997, concerning transformer oil.
    • The circular recognised that a transformer cannot function without transformer oil and that the equipment cannot be regarded as complete without the oil filled into it.
    • Applying the same analogy, CESTAT held that if the Continuous Polycondensation Plant cannot function without thermic fluid, the fluid has to be treated as part of the plant, notwithstanding the absence of a specific Customs clarification concerning thermic fluid.

    Cases Cited by Wellknown Polyesters

    The appellant relied upon several judicial authorities in support of its interpretation of capital goods:

    S. No.CaseCitation
    1Reliance Communications Infrastructure v. Commissioner of Customs2009 (240) E.L.T. 461 (Tri.-Bang.)
    2Commissioner of Central Excise, Coimbatore v. Jawahar Mills2001 (132) E.L.T. 3 (S.C.)
    3Bharti Airtel Limited v. Commissioner of Central Excise, Pune2025 (391) E.L.T. 3 (S.C.)
    4Chief Commissioner of Central Goods and Service Tax & Ors. v. Safari Retreats Private Limited & Ors.2024 SCC OnLine SC 2691
    5Scientific Engineering House (P) Ltd. v. Commissioner of Income Tax, Andhra Pradesh(1986) 1 SCC 11
    • These authorities are expressly recorded in the appellant’s submissions.
    • Of these, the final reasoning expressly discusses and applies Reliance Communications Infrastructure.

    Final Decision: Wellknown Polyesters Wins Appeal

    CESTAT concluded that the Commissioner’s order denying the benefit of Notification No. 104/2009-Customs dated 14 September 2009 by refusing to treat Dowtherm RP/Dowtherm A Heat Transfer Fluid as capital goods β€œdoes not stand the scrutiny of law.”

    The Tribunal consequently set aside the Order-in-Original dated 7 October 2016 and allowed Wellknown Polyesters’ appeal in its favour.

    The ruling is significant for the interpretation of capital goods under export-promotion schemes, particularly where a material may chemically resemble an input or consumable but is technically required as an initial charge and thereafter continuously circulates as an integral part of plant operation.

    It also demonstrates that classification of an item as a chemical under Chapter 29, or its description as an β€œinput” under SION for a different regulatory purpose, is not by itself determinative of whether it can qualify as capital goods under the specific language and objective of an exemption notification.

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

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

    Source: CESTAT Mumbai

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  • Punjab & Haryana HC: Development Authority Is a β€˜Promoter’ Under RERA and Liable for Delayed Possession

    Punjab & Haryana HC: Development Authority Is a β€˜Promoter’ Under RERA and Liable for Delayed Possession

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

    Date: 26.09.2026

    Punjab & Haryana HC: Development Authority Is a β€˜Promoter’ Under RERA and Liable for Delayed Possession

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


    The Punjab and Haryana High Court has held that a Development Authority falls within the definition of β€œpromoter” under the Real Estate (Regulation and Development) Act, 2016 (RERA) and cannot escape the statutory consequences of delayed possession merely because a commercial site was auctioned on an β€œas is where is” basis or because the allotment terms contained a deemed-possession clause.

    Dismissing two appeals filed by the Bathinda Development Authority, Justice Harkesh Manuja upheld the order of the Real Estate Appellate Tribunal, Punjab granting interest under Section 18 of the RERA Act to allottee Leela Gupta for delayed possession of two SCO sites.

    Background: SCO Sites Purchased Through Auction and Transfer

    • The dispute concerned two SCO sites situated at Civil Lines, Power House Road, Bathinda.
    • Leela Gupta purchased SCO Site No. 1 through an open auction conducted by the Bathinda Development Authority on 5 August 2015. An allotment letter was issued on 1 December 2015 after payment of 20% of the principal amount along with 2% cancer cess.
    • Under the allotment letter, possession was required to be delivered within 90 days.
    • SCO Site No. 2 was not originally allotted to Gupta. She subsequently acquired it by transfer from the original allottees on 4 August 2017. Her grievance was that despite payment according to schedule, possession of the sites was not handed over in time because the necessary development work had not been completed.

    Earlier Proceedings Before PUDA and RERA

    • Gupta initially sought relief from the Estate Officer, Bathinda, contending that interest should not be charged for the period during which the sites were not ready for possession.
    • After her representation was rejected, she approached the High Court through CWP No. 24881 of 2018. The High Court permitted her to submit an appeal-cum-representation to the Chief Administrator, PUDA for a speaking decision.
    • The Chief Administrator subsequently rejected her claim for waiver of interest on instalments but extended the moratorium period for construction, noting that development works in the commercial pocket had been completed on 16 June 2017.
    • Gupta thereafter approached the Real Estate Regulatory Authority, Punjab seeking three reliefs: refund of interest charged on instalments, extension of the non-construction period, and interest under Section 18 of RERA.
    • The Authority dismissed her complaints. On appeal, however, she restricted her claim only to interest for delayed possession under Section 18.

    RERA Appellate Tribunal Awards Interest for Delayed Possession

    • The Real Estate Appellate Tribunal, Punjab allowed Gupta’s appeals on 12 May 2022.
    • For SCO Site No. 1, it awarded interest for delayed possession from 1 March 2016 to 19 October 2017.
    • For SCO Site No. 2, it awarded interest from 4 August 2017 to 19 October 2017 on the amount deposited up to that date, applying Rule 16 of the Punjab State Real Estate (Regulation and Development) Rules, 2017.
    • Bathinda Development Authority challenged those orders before the Punjab and Haryana High Court.

    Development Authority Questions Maintainability of RERA Proceedings

    • The Authority argued that the dispute arose from allotments governed by the Punjab Regional and Town Planning and Development Act, 1995 (PRTPD Act).
    • According to it, after the Chief Administrator passed the order dated 27 May 2019 in exercise of appellate powers under Section 45 of the PRTPD Act, Gupta’s appropriate remedy was to file a revision before the State Government under Section 45(8) rather than initiating proceedings under RERA.
    • The High Court rejected this contention.
    • It noted that Gupta had relinquished her other claims and restricted the dispute before the RERA authorities to the statutory remedy of interest under Section 18 of RERA. Her claim was therefore independently founded on the RERA Act.
    • The Court also noted that the maintainability objection had not been raised by the Development Authority before either the RERA Authority or the Appellate Tribunal and was being advanced for the first time at a belated stage.

    Section 18 RERA Creates Statutory Right to Interest for Delay

    • The High Court examined Section 18 of the RERA Act, which provides remedies where a promoter fails to complete or give possession of an apartment, plot or building according to the agreed terms.
    • Where the allottee does not wish to withdraw from the project, the proviso to Section 18(1) requires the promoter to pay interest for every month of delay until possession is handed over, at the prescribed rate.
    • The issue therefore turned on whether Bathinda Development Authority was a β€œpromoter” and whether there had actually been delay in making the sites ready for possession.

    Development Authority Expressly Covered by Definition of β€˜Promoter’

    • The High Court referred to Section 2(zk)(iii) of the RERA Act, which expressly includes a development authority or other public body within the definition of β€œpromoter” in relation to specified buildings, apartments and plots.
    • The Court therefore held that there was β€œno doubt” that Bathinda Development Authority was covered within the statutory definition of promoter.
    • This finding is important because it confirms that a public development authority cannot seek exemption from RERA’s promoter obligations merely because it is a statutory or State authority rather than a private developer.

    β€˜As Is Where Is’ Clause Does Not Excuse Delayed Development

    • Bathinda Development Authority relied heavily on two provisions in the allotment letter.
    • First, the plot had been offered on an β€œas is where is” basis. Second, the allotment letter stated that possession would be given within 90 days and, if the allottee did not take possession within that period, possession would be deemed to have been handed over on the due date.
    • The High Court was not persuaded.
    • It reasoned that if the β€œas is where is” clause completely absolved the Authority from carrying out development, there would have been no reason for the Authority itself to spend resources and time undertaking development work.
    • The record showed that development of the site was, in fact, the Authority’s responsibility.

    The Court importantly observed that:

    • β€œMere physical possession without any basic amenities would serve no purpose”
    • because construction and commercial activity could not practically be carried out without the necessary basic infrastructure.

    Electricity Is a Basic Amenity; Site Was Ready Only on 19 October 2017

    The date on which the sites could genuinely be treated as ready for possession became a central issue.

    An RTI response showed that:

    • civil and public health works were completed on 16 June 2017;
    • electrical works were completed on 28 April 2017;
    • transformers were installed on 1 March 2017; and
    • electricity supply became available only on 19 October 2017.
    • The Chief Administrator had treated 16 June 2017 as the completion date, apparently without treating actual electricity supply as essential.
    • The High Court disagreed.
    • It held that electricity was a basic amenity necessary for construction activity, particularly because machinery used at a construction site requires power. It therefore affirmed the Appellate Tribunal’s conclusion that the sites were actually ready for possession only on 19 October 2017.

    Extension of Construction Moratorium Was an Indirect Admission of Delay

    • The Court also identified what it considered an inconsistency in the Authority’s stand.
    • The Chief Administrator had extended the three-year moratorium period for construction on the ground that the commercial pocket became ready only after development work was completed.
    • According to the High Court, if there had genuinely been no delay on the Authority’s part, there would have been no need to extend the construction moratorium.
    • The extension was therefore treated as an indirect admission through the Authority’s own conduct that delay had occurred.

    Allottee Cannot Face Penalty for Delay While Promoter Faces No Consequence

    • The High Court also addressed the imbalance that would arise if the Authority’s interpretation were accepted.
    • It observed that an allottee could be required to pay penalty charges for failing to complete construction within the stipulated period. It would therefore be anomalous if there were no corresponding consequences for the promoter’s delay in providing possession, especially when Section 18 of RERA expressly provides a statutory remedy for such delay.

    Supreme Court’s Arifur Rahman Khan v. DLF Southern Homes Applied

    The High Court relied on the Supreme Court’s judgment in:

    Wg. Cdr. Arifur Rahman Khan and Aleya Sultana v. DLF Southern Homes Pvt. Ltd., (2020) 16 SCC 512.

    • The Court referred to the Supreme Court’s recognition that agreements between developers and purchasers often do not operate on an equal footing: stringent obligations imposed on purchasers are frequently not mirrored by equivalent obligations on developers to meet timelines.
    • Bathinda Development Authority argued that Gupta had participated in the auction with her β€œeyes wide open.”
    • The High Court rejected this reasoning, observing that participation in an open auction could not mean that the allottee should have anticipated that the Authority itself would delay development work.
    • The fact that the site had been allotted through an auction did not confer any right upon the Authority to delay development. Once delay occurred, the statutory consequences under RERA had to follow.

    State Development Authority Cannot Claim Preferential Treatment Over Private Promoter

    • The High Court made another significant observation concerning public development authorities.
    • It held that no concession could be claimed by a State Development Authority merely because it was a public body rather than a private promoter.
    • Indeed, the Court observed that the obligation upon the State was greater because it was itself a law-enforcement agency, particularly where it had maximised revenue by disposing of property through an open auction.
    • The ruling therefore places public development authorities squarely within the accountability framework established by RERA where the statutory definition of promoter is attracted.

    Earlier PUDA Order Did Not Bar Section 18 Claim

    • The Authority further argued that the Chief Administrator’s order dated 27 May 2019 had never been challenged and continued to remain in force.
    • The High Court rejected this objection because the earlier proceeding concerned a different relief.
    • The Chief Administrator had rejected Gupta’s request that interest should not be charged on her instalments during the development period.
    • The RERA proceedings, by contrast, concerned her affirmative statutory entitlement to receive interest from the promoter for delayed possession under Section 18.
    • The two issues were therefore legally distinct.

    Other Allottees Taking Possession Earlier Does Not Defeat Statutory Right

    • The Authority also claimed that similarly situated allottees had taken possession earlier.
    • The High Court noted that no material had been placed on record to substantiate this assertion. More importantly, even assuming it to be factually correct, the conduct of other allottees could not extinguish Gupta’s rights arising from the statutory provisions.

    Final Decision: Bathinda Development Authority’s Appeals Dismissed

    • The Punjab and Haryana High Court found no reason to interfere with the Real Estate Appellate Tribunal’s order.
    • Both RERA Appeal No. 6 of 2023 and RERA Appeal No. 12 of 2023 filed by Bathinda Development Authority were dismissed.

    Consequently, Leela Gupta succeeded, and the Appellate Tribunal’s award of delayed-possession interest remained intact:

    SCO SitePeriod for Which Interest Was Awarded
    SCO Site No. 11 March 2016 to 19 October 2017
    SCO Site No. 24 August 2017 to 19 October 2017
    • The interest was to operate on the deposited amount in accordance with the applicable RERA framework and Rule 16 of the Punjab State Real Estate (Regulation and Development) Rules, 2017.

    Key Takeaway

    The judgment establishes three important RERA principles. A Development Authority is expressly covered within the definition of β€œpromoter” under Section 2(zk); an β€œas is where is” or deemed-possession clause cannot automatically defeat the statutory entitlement under Section 18 where the site was not practically ready for possession; and essential infrastructure such as actual electricity supply may be relevant in determining when a commercial site became genuinely ready for possession.

    Most importantly, the High Court made clear that State development authorities cannot claim a more favourable standard than private promoters when RERA obligations apply.

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

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

    Source: Bombay High Court

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  • Supreme Court: Contractual Bar on Interest Cannot Be Invoked Belatedly After Consenting to Arbitration

    Supreme Court: Contractual Bar on Interest Cannot Be Invoked Belatedly After Consenting to Arbitration

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

    Date: 26.09.2026

    Supreme Court: Contractual Bar on Interest Cannot Be Invoked Belatedly After Consenting to Arbitration

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

    The Supreme Court has held that a party cannot ordinarily raise a contractual or legal plea at a later stage of arbitration proceedings when it had the opportunity to raise the plea before the Arbitral Tribunal but failed to do so. Such conduct can amount to waiver or abandonment of the plea, particularly where allowing it later would prejudice the opposite party.

    In Union of India v. M/s Susaka Pvt. Ltd. & Ors., the Supreme Court dismissed the Union of India/Railways’ appeal challenging an arbitral award of interest, holding that the Railways could not rely for the first time before the Supreme Court upon a contractual clause prohibiting interest when it had failed to properly raise and pursue that objection before the Arbitral Tribunal and the courts below.

    Dispute Arose From Railway Works Contract

    • The dispute arose from a works contract awarded by the Union of India (Railways) to M/s Susaka Pvt. Ltd. on 19 December 1994 for repair work relating to 25 stators of TAO-659 Traction Motors of Electric Locomotives, Type WCAMI, at Electric Loco Shed, Valsad.
    • Disputes subsequently arose during execution of the contract. Since Clause 56(1) of the General Conditions of Contract (GCC) contained an arbitration mechanism, Susaka invoked arbitration and approached the Bombay High Court under Section 11(5) of the Arbitration and Conciliation Act, 1996 for constitution of an Arbitral Tribunal.
    • By an order dated 27 July 2001, the High Court, with the consent of the parties, referred the claims to a three-member Arbitral Tribunal consisting of Railway officials. Significantly, the reference expressly stated that the arbitrators would also be free to decide pre-reference interest, pendente lite interest, further interest and costs, considering the agreement.

    Arbitral Tribunal Awards β‚Ή27.62 Lakh

    • The Arbitral Tribunal delivered a unanimous reasoned award dated 11 September 2002, partly allowing Susaka’s claims.
    • The award covered, among other things, loss due to under-utilisation of equipment, material purchased but not utilised, loss of profit, overheads, payment under the price-variation clause and interest.
    • The table reproduced on pages 5 and 6 of the Supreme Court judgment records a total award of β‚Ή27,62,214, including β‚Ή12,89,033 towards interest.
    • The central issue that eventually reached the Supreme Court concerned the Tribunal’s power to award interest for different periods. The award provided for pre-reference interest at 15% per annum, pendente lite interest at 12% per annum and post-award interest at 18% per annum.

    Railways Challenges Award Under Section 34

    • Aggrieved by the award, the Union of India filed proceedings under Section 34 of the Arbitration and Conciliation Act, 1996 before a Single Judge of the Bombay High Court.
    • The Single Judge partly interfered with the award by modifying the date from which interest would be payable in relation to two claims. However, the Railways’ objections concerning the remaining claims were rejected and the award was otherwise upheld.
    • Susaka challenged the limited interference before the Division Bench. The Railways, however, did not file an appeal against the part of the Single Judge’s order rejecting its other objections. Consequently, that part of the award attained finality.
    • The Division Bench subsequently allowed Susaka’s appeal, holding that no ground under Section 34 had been established for modifying the award in relation to interest. This effectively restored the arbitral award in its entirety.
    • The Union of India then approached the Supreme Court.

    Railways Relies on Clause 13(3) to Challenge Interest

    • Before the Supreme Court, the Railways relied heavily upon Clause 13(3) of the GCC.
    • According to the Railways, Clause 13(3) stipulated that no interest would be payable on earnest money, security deposit or amounts payable to the contractor under the contract, except Government securities.
    • It therefore argued that the Arbitral Tribunal had acted contrary to the contract in awarding interest and that the award was liable to be set aside under Section 34.
    • Susaka opposed the argument on a fundamental procedural ground: the Railways had not raised and pursued the Clause 13(3) objection before the Arbitral Tribunal or the courts below and therefore could not introduce it for the first time before the Supreme Court under Article 136 of the Constitution.

    Supreme Court: Railways Had Consented to Arbitration of Interest Claim

    • The Supreme Court accepted Susaka’s objection.
    • The Court found that the Railways had not raised the plea based on Clause 13(3) in its reply before the Arbitral Tribunal. More importantly, during the Section 11(5) proceedings, the Railways had expressly consented to referring the question of interest to arbitration.
    • The Court observed that if the Railways intended to rely on Clause 13(3), it could have raised the objection when the dispute was referred to arbitration or expressly reserved its right to raise the objection before the Tribunal.
    • It did neither.
    • The Railways thereafter participated in the arbitration and allowed the Tribunal to adjudicate the interest issue on merits without specifically pleading Clause 13(3).

    Raising a Ground in Section 34 Petition Is Not Enough If It Is Not Pressed

    • The Supreme Court also noticed an important procedural aspect.
    • Although the Railways included the Clause 13(3) objection as a ground in its Section 34 proceedings before the Single Judge, the ground was not pressed during arguments. It was also not subsequently raised before the Division Bench.

    The Supreme Court therefore described the case as one of:

    β€œwaiver or/and abandonment of a plea at the initial stage itself.”

    Pleas Must Be Raised at the Appropriate Stage

    • The judgment lays down an important litigation and arbitration principle: where a pleaβ€”whether based on fact or lawβ€”is available to a party, it must be raised at the appropriate stage in accordance with law.
    • If a party fails to raise the plea, or gives it up by consent, it may subsequently be precluded from resurrecting it on the principle of waiver, particularly where doing so would prejudice the opposite party.
    • The Court referred to the maxim β€œCuilibet licet renuntiare juri pro se introducto”, explaining that a person may waive the advantage of a law made solely for his or her individual benefit and protection, provided no public right or public policy is infringed. Susaka Pvt. Ltd. & Ors.

    Failure to Appeal Against Rejection of Other Claims Also Proved Fatal

    • There was another reason why the Railways’ challenge failed.
    • The Single Judge had substantially rejected the Railways’ Section 34 challenge except in relation to two interest claims. Yet the Railways did not appeal against the portion of the order rejecting its objections.
    • The Supreme Court held that this part of the Single Judge’s decision had therefore attained finality.
    • Had the Railways wished to keep those issues alive, it was required to challenge that portion before the Division Bench. Only thereafter could an adverse determination potentially have been pursued before the Supreme Court under Article 136.

    Arbitral Tribunal Has Power to Award Interest

    • The Supreme Court also made important observations concerning an arbitrator’s power to award interest.
    • It held that an award of interest on arbitrable claims is not inherently illegal, contrary to public policy, per se bad in law or beyond the powers of an Arbitral Tribunal.
    • The Court specifically referred to Section 31(7)(a) and (b) of the Arbitration and Conciliation Act, 1996, observing that these provisions empower an Arbitral Tribunal to award interest on the awarded sum, although that power remains subject to the agreement between the parties.
    • This qualification is important: the Supreme Court did not hold that an arbitrator can disregard an express contractual prohibition on interest. Rather, the decision turned substantially on the Railways’ failure to timely raise and preserve its contractual objection.

    Courts Should Not Lightly Interfere With Arbitral Awards

    • The Supreme Court further reiterated the limited nature of judicial interference with arbitral awards.
    • Once parties have chosen their arbitrators and authorised them to adjudicate specified disputes, their decision should ordinarily be respected. Courts should interfere only where the award falls within one of the grounds prescribed under Section 34 of the Arbitration and Conciliation Act, 1996.
    • This part of the judgment reinforces the principle that Section 34 proceedings are not intended to provide parties with an unrestricted opportunity to reargue matters already submitted to arbitration.

    Supreme Court Refers to Firm Kaluram Sitaram v. Dominion of India

    The judgment expressly refers to the Bombay High Court decision in:

    Firm Kaluram Sitaram v. The Dominion of India, AIR 1954 Bombay 50.

    • The Supreme Court recalled former Chief Justice M.C. Chagla’s observations concerning the State’s reliance on technical defences against citizens.
    • Applying that principle, the Supreme Court criticised the Railways for pursuing a technical legal argument up to the Supreme Court even though the plea had not been properly raised at the relevant stages of the proceedings.

    Final Decision: Union of India’s Appeal Dismissed

    • The Supreme Court ultimately found no merit in the Union of India’s appeal and dismissed it.
    • Accordingly, M/s Susaka Pvt. Ltd. succeeded before the Supreme Court, and the Railways’ attempt to challenge the award of interest by relying upon Clause 13(3) of the GCC failed.
    • The judgment is particularly significant for arbitration proceedings because it demonstrates that a potentially available contractual defence can be lost if it is not specifically pleaded, pressed and preserved at the appropriate stage.
    • It also makes an important distinction between the substantive contractual limitation on an arbitrator’s power to award interest and the procedural question of whether a party has preserved its right to invoke that limitation.

    Key Takeaway

    A party cannot participate in arbitration without raising an available contractual objection, allow the Tribunal to decide the issue on merits, fail to press the objection in Section 34 proceedings, and then seek to revive it for the first time before the Supreme Court.

    The decision in Susaka therefore stands as an important authority on waiver and abandonment of pleas in arbitration proceedings, while also recognising that Section 31(7) empowers arbitrators to award interest subject to the parties’ agreement.

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

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

    Source: Supreme Court

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  • Bombay High Court: Railway Board Circular Cannot Override 2013 Land Acquisition Act

    Bombay High Court: Railway Board Circular Cannot Override 2013 Land Acquisition Act

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

    Date: 26.09.2026

    Bombay High Court: Railway Board Circular Cannot Override 2013 Land Acquisition 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 .  

    The Bombay High Court has held that tenants whose structures are acquired for a public project fall within the definition of β€œaffected family” under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, and are entitled to statutory rehabilitation and resettlement benefits.

    The Division Bench rejected an attempt by the Dedicated Freight Corridor Corporation of India Limited (DFCCIL) to rely upon a Railway Board-approved Entitlement Matrix to restrict the tenants’ entitlement to merely three months’ notice and β‚Ή10,000 as shifting allowance.

    The Court categorically held that administrative instructions issued by the Ministry of Railways cannot override the statutory provisions of the 2013 Land Acquisition Act. It directed payment of β‚Ή14.17 lakh to each petitioner, together with statutory interest under Section 80β€”9% per annum for the first year from taking possession and 15% per annum from the second year onwards.

    Dispute Arose From Dedicated Freight Corridor Project in Raigad

    • The petitioners were tenants occupying structures acquired by DFCCIL for the Dedicated Freight Corridor passing through Alibag, District Raigad.
    • Their grievance was that although competent authorities had already confirmed their eligibility and quantified the monetary compensation payable to them, DFCCIL subsequently prevented the amounts from being disbursed.
    • The petitioners had approached the Appellate Authority for Rehabilitation in 2021 as members of affected families/project-affected persons. Possession of their structures was admittedly taken during 2021–2022.

    Appellate Authority Had Already Declared Tenants Eligible for Compensation

    • On 16 June 2022, the Deputy Commissioner (Rehabilitation), Konkan Division, acting as the Appellate Authority, allowed the petitioners’ appeals and held that they were eligible to receive compensation.
    • Those orders referred to the Maharashtra Government Resolution dated 22 May 2018, which provided the mechanism for payment of compensation to affected persons.
    • DFCCIL filed review applications challenging the petitioners’ eligibility, but the review applications were rejected. Consequently, the orders confirming their eligibility remained undisturbed.

    β‚Ή14.17 Lakh Compensation Determined for Each Petitioner

    • Following the determination of eligibility, the District Rehabilitation Officer submitted a proposal to the State Government seeking approval for payment.
    • Eventually, on 6 November 2025, the Deputy Collector (Rehabilitation), acting as Administrator for Rehabilitation for the project, passed a reasoned order determining compensation of:

    β‚Ή14,17,000 for each petitioner

    • DFCCIL and the rehabilitation authority thereafter informed the concerned bank regarding payment. In fact, instructions were issued on 6 November 2025 for transferring a substantial portionβ€”β‚Ή10 lakh to each petitioner through RTGS.
    • The dispute took a different turn shortly thereafter.

    DFCCIL Suddenly Halts Compensation

    • On 24 November 2025, the Project Manager of DFCCIL wrote to the District Rehabilitation Officer taking a position contrary to the steps already undertaken for payment.

    DFCCIL asserted that because the petitioners were merely tenants, they were entitled only to:

    • three months’ written notice; and
    • β‚Ή10,000 towards shifting allowance.

    For this position, DFCCIL relied upon an Entitlement Matrix based on its September 2012 Relief and Rehabilitation Plan.

    The District Rehabilitation Officer responded on 8 December 2025, pointing out that the State Government had already approved the petitioners’ eligibility and their entitlement to the compensation.

    Despite this, DFCCIL did not release the amounts. The petitioners issued a legal notice on 5 March 2026 and thereafter approached the Bombay High Court in April 2026.

    DFCCIL Relies on Railway Board’s 2015 Entitlement Matrix

    • Before the High Court, DFCCIL relied principally on a letter dated 23 May 2015 issued by the Director Planning (Special), Ministry of Railways, Railway Board, to the Managing Director of DFCCIL.
    • The communication approved an Entitlement Matrix for Dedicated Freight Corridor projects based on DFCCIL’s September 2012 Rehabilitation and Resettlement Plan.
    • DFCCIL argued that the Matrix governed compensation payable to lessees and tenants.
    • It also contended that compensation had already been paid to the owners of the structures occupied by the petitioners and, therefore, the tenants could not separately claim the β‚Ή14.17 lakh quantified by the rehabilitation authority.
    • Another argument was based on the Maharashtra Government Resolution dated 22 May 2018. DFCCIL claimed that since the structures stood on Gaothan land, the second schedule to the Government Resolution applied and only owners were entitled to compensation.

    Tenants Expressly Included in Definition of β€˜Affected Family’

    • The High Court examined Section 3(c) of the 2013 Act, particularly Section 3(c)(ii).
    • The provision includes within β€œaffected family” a family that does not own land but whose member or members may be:
    • β€œagricultural labourers, tenants including any form of tenancy…”
    • subject to the statutory requirements concerning the impact of acquisition on livelihood.
    • The Court found that it was undisputed that the petitioners were tenants in the structures acquired by DFCCIL.
    • It consequently held that the petitioners were covered by the statutory definition and were entitled to compensation under the 2013 Act by applying Schedule II.

    Section 31 Requires Rehabilitation and Resettlement Award for Affected Families

    • The Division Bench also examined Section 31 of the 2013 Act, which requires the Collector to pass a Rehabilitation and Resettlement Award for each affected family in accordance with the entitlements under the Second Schedule.
    • Such an award may contain rehabilitation and resettlement amounts, bank account details, house sites, land allotments, subsistence and transportation allowances, amounts for cattle sheds and petty shops, benefits for artisans and small traders, employment-related entitlements, annuity and other statutory benefits.
    • Reading Section 31 together with Section 3(c) and Schedule II, the Court concluded that the petitioners’ status as tenants did not exclude them from the statutory rehabilitation framework.

    Railway Board’s Administrative Instructions Cannot Override Statute

    • The most significant legal finding concerns the relationship between the Railway Board’s administrative instructions and the 2013 Act.
    • The High Court rejected DFCCIL’s reliance on the Railway Board letter dated 23 May 2015 and the corresponding Entitlement Matrix.

    The Bench held:

    • β€œSuch instructions cannot prevail upon the statutory provisions”
    • and found that the Railway Board communication could not override the statutory provisions of the 2013 Act.
    • Thus, an administrative compensation policy or departmental entitlement matrix cannot be invoked to reduce or take away a benefit that the governing legislation confers upon an eligible affected family.

    DFCCIL’s Objection Was Raised at a Belated Stage

    • The High Court also found DFCCIL’s conduct significant.
    • The petitioners’ eligibility had already been determined by the Appellate Authority in June 2022. DFCCIL’s review applications had failed. The competent authority subsequently quantified compensation at β‚Ή14.17 lakh each.
    • More importantly, the Chief General Manager of DFCCIL had itself joined the competent authority in directing the bank to transfer β‚Ή10 lakh to each petitioner.
    • Only thereafter did the Project Manager issue the communication dated 24 November 2025 objecting to payment and invoking the 2015 Entitlement Matrix.
    • The Court characterised this objection as belated.

    Government Resolution Also Could Not Reduce Statutory Benefits

    • DFCCIL’s reliance on the Maharashtra Government Resolution dated 22 May 2018 also failed.
    • The High Court noted that paragraph 6 of the Government Resolution itself recognised that where the compensation or relief available under the 2013 Act was higher, the higher statutory benefit would prevail.
    • The Bench connected this principle with Section 108 of the 2013 Act, which gives affected families the option to avail themselves of better compensation and rehabilitation and resettlement benefits.
    • Consequently, DFCCIL could not rely upon the second schedule to the Government Resolution to reduce the petitioners’ statutory entitlement.

    Bombay HC Orders β‚Ή14.17 Lakh Compensation to Each Tenant

    • The Court rejected the grounds advanced by DFCCIL and allowed all the connected writ petitions.
    • It held that each petitioner was entitled to:
    • β‚Ή14,17,000 as compensation, along with statutory interest
    • The principal amount had already been deposited by DFCCIL. The Court therefore ordered that β‚Ή14.17 lakh be disbursed to each petitioner within two weeks.

    9% Interest for First Year and 15% Thereafter

    • The petitioners had sought interest at 18% per annum.
    • The High Court did not grant the claimed 18% rate. Instead, it applied the statutory interest mechanism contained in Section 80 of the 2013 Act.
    • According to the judgment, delayed payment attracts:
    • 9% per annum for the first year from the date possession was taken, and 15% per annum from the second year onwards.
    • The Court considered statutory interest appropriate because DFCCIL had taken an β€œunreasonable stand belatedly” and had deprived the petitioners of their rightful dues without justification.
    • It particularly noted that DFCCIL had initially directed substantial payment of β‚Ή10 lakh each through RTGS and then suddenly reversed its position and objected to the disbursement.

    Time-Bound Directions for Payment of Interest

    • The High Court laid down a specific schedule for implementation.
    • The competent authority was directed to calculate the interest payable to each petitioner within four weeks.
    • It must thereafter communicate the calculation to the Chief General Manager and Project Manager of DFCCIL within one week.
    • DFCCIL must then deposit the interest amount with the competent authority within two weeks, following which the authority must disburse it to the petitioners within one further week.

    Final Decision

    • The Bombay High Court made the rule absolute and allowed all seven connected writ petitions.

    The petitioners were:

    • Sanjay Baban Girhe, Heena Suhas Niromkar, Vijaykumar Subedar Mourya, Rajendra Muktaji Shinde, Vandana Ulhas Girhe, Mahesh Mahillappa Kallure and Sambhaji Shivhar Mule.
    • Each petitioner is to receive β‚Ή14.17 lakh plus statutory interest under Section 80 of the 2013 Act.

    Key Takeaway

    The judgment establishes an important principle for land acquisition and infrastructure projects: tenancy does not by itself exclude a person from rehabilitation and resettlement benefits under the 2013 Land Acquisition Act.

    Where a tenant satisfies the statutory definition of an β€œaffected family” under Section 3(c), the entitlement must be determined under the Act, including Section 31 and Schedule II. An internal policy, project-specific Entitlement Matrix, Railway Board instruction or State Government resolution cannot be used to dilute a superior statutory entitlement.

    The ruling is particularly significant for infrastructure projects undertaken by government corporations because the Court made clear that administrative instructions must yield to the governing legislation, while Section 108 protects an affected family’s entitlement to opt for better compensation and rehabilitation benefits.

    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: Civil Suit Cannot Be a Ground to Discharge Accused When Criminal Acts Are Alleged

    Karnataka High Court: Civil Suit Cannot Be a Ground to Discharge Accused When Criminal Acts Are Alleged

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

    Date: 26.09.2026

    Karnataka High Court: Civil Suit Cannot Be a Ground to Discharge Accused When Criminal Acts Are Alleged

    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 mere existence of an earlier civil suit arising from the dispute cannot be a ground to discharge an accused where the complaint and charge-sheet materials disclose prima facie allegations of independent criminal acts such as creation of documents, forgery and use of allegedly fabricated documents.

    Allowing a petition filed by M/s Varsha Cables Private Ltd. and its Chairman and Managing Director Puttaraju P. Gowda, Justice H.P. Sandesh set aside an order of the Revisional Court which had discharged the accused and restored the Trial Court’s order rejecting the discharge application under Section 239 of the Code of Criminal Procedure, 1973.

    The High Court emphasised that disputed defences cannot be adjudicated at the discharge stage and that questions surrounding allegedly created documents must be tested during trial.

    Background of the Dispute

    • The proceedings originated from a private complaint filed by the complainants alleging criminal acts against the second respondent, B. Kumar, proprietor of M/s Varsha Industries.
    • The private complaint was referred for investigation under Section 156(3) CrPC, following which the Vijayanagara Police registered an FIR, investigated the allegations and filed a charge sheet. An additional charge sheet was also filed invoking offences relating to forgery and use of forged documents. VARSHA CABLESL PRIVATE LTD. KHC
    • The dispute had its background in the relationship between the parties concerning Varsha Cables Private Ltd. According to the complaint, the accused had previously been a Director of the company and later started carrying on business through Varsha Industries.
    • The complainants alleged that Varsha Industries began manufacturing and dealing in products including PVC insulated copper conductors and PVC/rubber insulated and non-insulated products, replicating the business being carried on by Varsha Cables.

    Allegation of Misrepresentation to Customers

    • The complaint alleged that the accused represented to customers of Varsha Cables that the company had been restructured as M/s Varsha Industries and that its management had also been restructured.
    • Customers were allegedly requested to amend their vendor-registration records and direct fresh enquiries to Varsha Industries.
    • The complaint specifically referred to communications dated 24 October 2009 sent to customers including Cipla Limited, Goa and Jubilant Organosys Ltd., Mysore. According to the complainants, these representations resulted in prominent customers of Varsha Cables being diverted to Varsha Industries.
    • These remained allegations requiring adjudication at trial; the High Court did not make a final finding that the alleged acts had been proved.

    Alleged Fabrication of Board Meeting Minutes and Use of Company Letterhead

    • A significant aspect of the case concerned documents allegedly created after an agreement dated 9 October 2009 between the parties.
    • The additional charge sheet alleged that Varsha Cables’ letterhead was used in a communication dated 21 October 2009 for changing a Bureau of Indian Standards (BIS) licence and that minutes of a purported Board meeting were created despite the allegation that no such meeting had taken place.
    • According to the additional charge sheet, the accused allegedly used the company’s letterhead after ceasing to be its Director with an intention to divert clients. The additional charge sheet consequently invoked Sections 468 and 471 IPC.
    • The High Court also recorded that letters dated 21 October and 4 November 2009 addressed to the Bureau of Indian Standards and minutes dated 12 October 2009 were among the documents relied upon by the complainants.

    Trial Court Refuses to Discharge Accused

    • The accused sought discharge under Section 239 CrPC.
    • The Trial Court rejected the application on 23 December 2017 after taking note of allegations contained in the original as well as additional charge sheets.
    • Among other things, it considered the allegation that Board resolutions had been created and used for changing BIS licences standing in the name of Varsha Cables. It also noted allegations concerning duplicate letterheads and changes relating to the company’s telephone number.
    • The accused thereafter approached the Revisional Court.

    Revisional Court Discharges Accused

    • The VII Additional Sessions Judge, Mysuru allowed Criminal Revision Petition No. 313 of 2018 on 21 March 2019 and discharged the accused.
    • The Revisional Court substantially treated the controversy as a civil dispute between the parties, taking into consideration the agreement and related civil proceedings.
    • Varsha Cables and its CMD then approached the Karnataka High Court under Section 482 CrPC, seeking restoration of the Trial Court’s refusal to discharge the accused.

    Accused Argues Criminal Complaint Was Replica of Civil Suit

    • Before the High Court, the accused argued that a civil suit had already been instituted and that the allegations in the private criminal complaint substantially replicated those made in the civil proceedings.
    • It was submitted that the civil suit had been dismissed and that first appeals were pending. The accused therefore maintained that the controversy was essentially civil in character and that criminal prosecution should not be used to pursue the same dispute.
    • The complainants, on the other hand, argued that specific allegations of forgery, cheating, criminal breach of trust, fabrication and use of documents had been investigated and formed part of the charge-sheet materials. They contended that the Revisional Court had effectively evaluated the defence at a stage when only a prima facie assessment was permissible.

    Karnataka HC: Revisional Court Went Beyond Scope of Discharge Proceedings

    • The High Court found fault with the manner in which the Revisional Court approached the case.
    • Justice Sandesh observed that the Revisional Court had extensively considered the terms of the agreement between the parties but had failed adequately to examine the allegations in the complaint, charge sheet and particularly the additional charge sheet concerning alleged creation and use of documents.
    • According to the High Court, the Revisional Court had effectively considered the accused’s defence while deciding whether discharge was justified.
    • That approach exceeded the permissible scope of the proceedings.

    Evidentiary Value Cannot Be Decided at Discharge Stage

    • The High Court relied on the Supreme Court’s decision in State by Karnataka Lokayukta Police Station, Bengaluru v. M.R. Hiremath, (2019) 7 SCC 515, noting that entering into questions concerning the evidentiary value of prosecution material at the stage of deciding a discharge application is impermissible.
    • It also relied upon Srilekha Sentilkumar v. Deputy Superintendent of Police, CBI, ACB, Chennai, (2019) 7 SCC 82, where the Supreme Court recognised that disputed factual issues may be more appropriately adjudicated at trial after evidence is led by the parties.
    • In the present case, the High Court found sufficient charge-sheet material to permit the prosecution to proceed, particularly in relation to the accusations concerning creation of documents and alleged forgery.

    Civil Proceedings Do Not Automatically Wipe Out Criminal Allegations

    • One of the most important findings of the judgment concerns the overlap between civil and criminal proceedings.
    • The High Court acknowledged that the civil suit had been filed before the criminal complaint and that the contents of the civil plaint and complaint were alleged to overlap.
    • However, it noted that the criminal complaint contained allegations concerning conduct after the agreement dated 9 October 2009, including alleged creation of documents, purported Board meeting minutes and transfer of records. These matters had also been considered during police investigation and in the additional charge sheet.

    The Court therefore held that:

    • β€œthe very contention that civil suit was filed earlier and subsequently, criminal complaint was filed cannot be a ground to discharge”
    • where the record contains allegations of criminal acts that require adjudication.
    • Importantly, this does not amount to a finding that the accused committed forgery. The High Court held only that the allegations and materials were sufficient to require adjudication at trial.

    Defence Cannot Be Adjudicated Under Section 239 CrPC

    • The High Court reiterated that, while considering an application under Section 239 CrPC, the court must determine whether there is material to frame charges or whether the accusations are groundless.
    • The Revisional Court had, in the High Court’s view, gone beyond this exercise by evaluating the defence based on the parties’ agreement while failing adequately to account for the accusations regarding creation of documents.
    • The Court therefore concluded that the Revisional Court had exercised its revisional powers beyond their permissible limit.

    Complainant Has Right to Be Heard When Discharge May Terminate Criminal Proceedings

    • Another significant issue concerned the locus of the de facto complainant.
    • The accused relied upon M/s Kerala Transport Co. v. D.S. Soma Shekar & Others, arguing that after investigation and filing of the charge sheet, prosecution was primarily the responsibility of the State and the private complainant could not independently use criminal proceedings to pursue private vengeance.
    • The Karnataka High Court rejected the objection in the circumstances of this case.
    • It relied upon Sundeep Kumar Bafna v. State of Maharashtra & Another, (2014) 16 SCC 623, observing that while a complainant or informant does not have a vested right to directly conduct the prosecution, the complainant’s interest cannot simply be ignored when proceedings are likely to be terminated.
    • The Court also relied on J.K. International v. State (Govt. of NCT of Delhi), (2001) 3 SCC 462, which recognised the complainant’s right to be heard when criminal proceedings initiated on the complaint are sought to be quashed.
    • The High Court reasoned that allowing a revision seeking discharge could effectively terminate the proceedings initiated by the first informant, making an opportunity of hearing material to the complainant’s interests.

    Supreme Court Precedents Considered

    The judgment discusses several authorities concerning discharge, revision and participation of a complainant, including:

    CaseCitation / ReferencePrinciple Discussed
    Madhu Limaye v. State of Maharashtra(1977) 4 SCC 551Nature of orders concerning charge/discharge and revisional jurisdiction
    Union of India v. Prafulla Kumar Samal(1979) 3 SCC 4Scope of judicial scrutiny at charge/discharge stage
    Pranab Kumar Mitra v. State of West BengalAIR 1959 SC 144Revisional jurisdiction
    Thakur Ram v. State of BiharAIR 1966 SC 911Role of State and private parties in criminal prosecution
    Sundeep Kumar Bafna v. State of Maharashtra & Anr.(2014) 16 SCC 623Role and hearing of complainant/private party
    State by Karnataka Lokayukta v. M.R. Hiremath(2019) 7 SCC 515Evidentiary value cannot be assessed at discharge stage
    Srilekha Sentilkumar v. Deputy Superintendent of Police, CBI(2019) 7 SCC 82Disputed facts appropriately determined at trial
    J.K. International v. State (Govt. of NCT of Delhi)(2001) 3 SCC 462Complainant’s opportunity of hearing where criminal proceedings are sought to be terminated
    Sanjay Kumar RaiCriminal Appeal No. 472/2021, decided 07.05.2021Scope of revision against charge/discharge orders

    These authorities were considered in determining the permissible scope of discharge/revisional proceedings and the complainant’s participation.

    Final Decision: Varsha Cables’ Petition Allowed

    • The Karnataka High Court ultimately allowed the criminal petition.
    • It set aside the order dated 21 March 2019 passed by the VII Additional Sessions Judge, Mysuru in Criminal Revision Petition No. 313/2018 and restored the Trial Court’s order dated 23 December 2017 in C.C. No. 126/2014 rejecting the accused’s discharge application under Section 239 CrPC.
    • Accordingly, the accused was not discharged and the criminal proceedings are to continue.
    • The High Court expressly clarified that the observations made while deciding the petition shall not influence the Trial Court when considering the matter on merits. Therefore, the ruling does not determine the guilt or innocence of the accused; those issues remain for trial.

    Key Takeaway

    The ruling reinforces that the existence of a civil dispute or even an earlier civil suit does not automatically justify discharge from criminal proceedings where the complaint and investigation disclose separate prima facie allegations of criminal conduct.

    At the Section 239 CrPC stage, courts are not expected to conduct a full trial, adjudicate disputed defences or finally determine the evidentiary worth of competing documents.

    Where allegations concerning forgery, fabrication or use of allegedly created documents require evidence, those questions should ordinarily be determined during trial rather than through a discharge application.

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

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

    Source: Karnataka High Court

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  • Delhi High Court: Trademark Refusal Must Be Based on Reasoned Analysis, Not Mere Similarity of Marks

    Delhi High Court: Trademark Refusal Must Be Based on Reasoned Analysis, Not Mere Similarity of Marks

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

    Date: 25.09.2026

    Delhi High Court: Trademark Refusal Must Be Based on Reasoned Analysis, Not Mere Similarity of Marks

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

    The Delhi High Court has set aside the refusal of Lucy Group Ltd.’s application for registration of the trademark β€œGEMINI” in Class 09, holding that the Registrar of Trademarks failed to consider crucial factual and legal submissions placed before it.

    Justice Jyoti Singh held that the Registrar’s order was β€œunreasoned, non-speaking and reflects non-application of mind”, observing that a quasi-judicial authority is legally required to consider all relevant contentions and issues raised by the parties before arriving at its decision.

    The High Court, however, did not decide whether GEMINI was ultimately entitled to registration. Instead, it remanded the trademark application to the Registrar for fresh consideration and directed a decision within 10 weeks after hearing Lucy Group.

    Background: Lucy Group’s β€˜GEMINI’ Trademark Application

    • Lucy Group Ltd. filed the appeal under Section 91 of the Trade Marks Act, 1999, challenging the Registrar’s order dated 17 April 2025, which had refused registration of its trademark under Application No. 5247072 dated 14 December 2021 in Class 09.
    • According to the company, it first used the GEMINI mark in India at the Elecrama trade event in Bengaluru on 13 February 2016, where it promoted and displayed products to potential customers and business associates.
    • Lucy Group subsequently filed a convention trademark application in Great Britain on 16 June 2021 and, on 14 December 2021, applied to register GEMINI in India as a convention application.

    Trademark Registry Cites Four Earlier β€˜GEMINI’ Marks

    • On 4 January 2022, the Registry issued an Examination Report raising an objection under Section 11(1) of the Trade Marks Act.
    • Four earlier marks were cited on the ground that Lucy Group’s proposed GEMINI mark was identical or similar to marks already appearing on the Register in respect of identical or similar goods.
    • Following hearings and written submissions, the Registrar refused registration on 17 April 2025. Lucy Group thereafter filed Form TM-M on 15 May 2025 seeking detailed grounds for refusal, but according to the appeal, those grounds were never supplied.

    Lucy Group: Registrar Failed to Compare the Actual Goods

    • Lucy Group’s principal grievance was that the Registrar had merely noted the existence of four earlier registrations and concluded that there was a likelihood of confusion because of the allegedly similar goods.
    • The company argued that the Registrar had failed to undertake a meaningful comparative analysis of the nature and function of the goods, their trade channels and the relevant consumers.
    • It also challenged the Registrar’s finding that adoption of GEMINI was not bona fide, arguing that this was not a ground of refusal under Section 11(1).

    Lucy Group’s GEMINI Products Are Industrial SCADA and RTU Systems

    • A central aspect of Lucy Group’s case was the highly specialised nature of the products for which registration was sought.
    • The application covered industrial-grade products including SCADA (Supervisory Control and Data Acquisition) systems and GEMINI RTUs (Remote Terminal Units).
    • The RTUs were described as multipurpose units intended for advanced feeder automation and for controlling and monitoring pole- and ground-mounted medium-voltage switchgear.
    • Lucy Group relied on product catalogues, technical specifications and its corporate profile to show that it operated in the specialised field of power automation, grid monitoring and infrastructure control systems.
    • The company also claimed continuous and extensive use of GEMINI in India since February 2016 and argued that the specialised nature, application and trade channels of its goods distinguished them from the products covered by the cited registrations.

    Cited Mark 1: β€˜Wires and Cables’

    • The first cited GEMINI registration, No. 728627 in Class 09, covered β€œwires and cables.”
    • Lucy Group argued that wires and cables were basic electrical transmission components, whereas its SCADA systems, RTUs and industrial switchgear were advanced control systems integrated with software and supplied as part of specialised engineering projects.
    • It further claimed that the two marks had co-existed in the Indian market since 2016 without reported confusion and that GEMINI had acquired secondary distinctiveness among its customers.

    Cited Mark 2: Television Broadcasting and Entertainment Products

    • The second cited registration, No. 953168, was also for GEMINI in Class 09 and belonged to Sun TV Network Limited.
    • Lucy Group argued that the goods associated with this registration related to the television broadcasting and entertainment sector, whereas its own products concerned industrial power-distribution and control solutions.
    • According to Lucy Group, the nature, purpose and consumer base of the respective goods were entirely different. It also informed the Court that it had filed a rectification petition on the ground of non-use against the second cited mark on 30 July 2022, which remained pending.

    Third Mark Abandoned; Fourth Filed on β€˜Proposed to Be Used’ Basis

    • Lucy Group also raised specific objections regarding the remaining two cited marks.
    • It submitted that Registration No. 3164101 for GEMINI in Class 09 had been abandoned before the date of the impugned order.
    • As regards the fourth mark, Application No. 3939124, Lucy Group pointed out that it had been filed on a β€œproposed to be used” basis and that its filing was later than Lucy Group’s claimed first use of GEMINI.
    • The detailed comparison reproduced on pages 5–9 of the High Court order further contrasted Lucy Group’s specialised industrial products with the goods associated with each cited mark, including wires and cables, broadcasting/electronic goods, consumer electronics and portable spectroscopic instruments.

    Same Trademark Class Does Not Automatically Mean Goods Are Similar: Lucy Group’s Argument

    • Lucy Group argued that goods cannot be treated as similar merely because they fall within the same Nice Classification class.
    • According to the company, the correct enquiry was whether the respective goods were commercially and functionally similar, rather than whether there was a theoretical or broad overlap in their classification.
    • It also emphasised that Section 11 requires consideration of likelihood of confusion β€œon the part of the public”, yet the Registrar had not identified the relevant public or adequately examined the consumers involved.

    Registrar Defends Refusal Under Section 11

    • The Registrar defended the order, arguing that the GEMINI application was barred by earlier identical marks appearing on the Trade Marks Register.
    • It contended that Lucy Group’s mark was phonetically, visually and structurally identical to the cited marks and that the relevant goods were similar or identical, creating a likelihood of confusion under Section 11(1).
    • In particular, the Registrar argued that electrical goods such as wires, cables and switchgear may travel through the same trade channels and reach common classes of consumers such as electricians, contractors and engineers.
    • According to the Registrar, treating specialised industrial products as wholly different from cables created an artificial distinction because cables and switchgear could be closely connected in the modern electrical industry.

    Delhi High Court Finds Crucial Submissions Were Ignored

    • After examining the Examination Report, Lucy Group’s reply and its detailed written submissions, the High Court found a fundamental defect in the Registrar’s decision-making process.
    • Justice Jyoti Singh observed that none of the crucial submissions had been considered.
    • The registration had essentially been refused because the applied-for mark was considered phonetically and visually similar to the cited marks and the goods were treated as similar.
    • However, the Registrar had not examined the distinctions Lucy Group sought to establish regarding the nature and function of the competing goods.

    Registrar Failed to Consider Abandoned and Later-Filed Marks

    The Court specifically noted that the Registrar had also failed to consider Lucy Group’s submissions that:

    • the third cited mark had been abandoned; and
    • the fourth cited mark was filed on a β€œproposed to be used” basis much after Lucy Group’s claimed first use.

    The High Court observed that these crucial facts and legal issues were not even referred to in the impugned order.

    Significantly, the Court stated that had these matters been considered and adjudicated, the decision might have been different.

    Quasi-Judicial Authorities Must Deal With Relevant Contentions

    • The Court then reiterated an important principle governing administrative and quasi-judicial decision-making.
    • It held that even a quasi-judicial authority is under a legal obligation to consider all contentions and issues raised by the parties, insofar as they are relevant, before taking a decision.

    Viewed against that requirement, the Registrar’s order was held to be:

    • β€œclearly unreasoned, non-speaking and reflects non-application of mind.”
    • This became the decisive basis for judicial interference.

    High Court Does Not Decide Trademark Registration on Merits

    • Importantly, the Delhi High Court expressly stated that it was not entering into the merits of Lucy Group’s claim for registration.
    • The Court therefore did not finally rule that the cited GEMINI marks were dissimilar, that there was no likelihood of confusion, or that Lucy Group was necessarily entitled to registration.
    • Instead, it remanded the matter to the Registrar for a fresh decision.
    • This distinction is significant because Lucy Group secured a procedural appellate victory, while the substantive question of whether GEMINI should ultimately be registered remains for reconsideration by the Trademark Registry.

    Fresh Decision Within 10 Weeks

    The High Court directed the Registrar to freshly consider Application No. 5247072 after hearing Lucy Group and taking into account all the points raised in response to the Examination Report.

    The Registrar was specifically directed to consider documents already on record, including the:

    • priority documents;
    • user affidavit;
    • written submissions dated 6 August 2024;
    • written submissions dated 17 February 2025; and
    • written submissions dated 15 March 2025.

    The fresh decision must be taken within 10 weeks from 27 March 2026. The Court also directed that no new documents would be permitted before the Registrar during the reconsideration.

    The appeal was accordingly allowed and disposed of.

    Why the Judgment Matters for Trademark Examination

    • The ruling highlights an important procedural safeguard in trademark registration proceedings. The existence of an identical or similar earlier mark may trigger scrutiny under Section 11, but a refusal order must still demonstrate that the Registrar has considered the material factual and legal submissions placed by the applicant.
    • Where an applicant specifically distinguishes the competing goods by their function, market, consumer base and trade channelsβ€”or raises issues concerning abandonment, priority and claimed prior useβ€”those contentions cannot simply be ignored.
    • At the same time, the judgment should not be understood as establishing a general rule that goods within the same class are necessarily dissimilar merely because their applications differ. The High Court deliberately left the merits open for the Registrar’s fresh determination.

    Key Takeaway

    The Delhi High Court’s decision reinforces that trademark refusal orders must be reasoned, speaking orders reflecting consideration of relevant evidence and contentions.

    A mechanical conclusion based on similarity of marks and broadly stated similarity of goods, without addressing material objections raised by the applicant, may not withstand appellate scrutiny.

    For Lucy Group, the judgment reopens the path to registration of GEMINI in Class 09, but does not itself grant the trademark registration. The Registrar must now reconsider the application on its merits within the timeline fixed by the Court.

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

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    Source: Delhi High Court

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    Ravi Shekhar Jha – Advocate, Bar Council of Delhi