1. ISSUES PRESENTED AND CONSIDERED

(i) Whether, under a "Standard Fire and Special Perils Insurance Policy" (a named peril policy), the insurer could repudiate a claim for loss admittedly caused by fire on the ground that the fire was triggered by an attempted burglary/theft, by invoking an exclusion located in the "Riot, Strike, Malicious and Damage (RSMD)" clause.

(ii) Whether, on a strict construction of exclusions and in light of the policy's structure (peril-specific exclusions for "Fire" and separate exclusions under "RSMD"), burglary/theft could be treated as excluding liability for damage attributable to fire where the "Fire" peril's exclusions did not include burglary/theft and the general exclusions did not expressly exclude theft preceding an insured peril.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Repudiation of fire loss on the basis that attempted burglary/theft was the proximate cause

Legal framework (as discussed by the Court): The policy was a named peril policy which indemnified loss if property was damaged by any of the specified perils. "Fire" was one such specified peril and contained its own expressly stated exclusions. The Court also considered the governing principle for fire insurance that, once loss is established to be due to fire, the cause of the fire is generally immaterial unless the policy provides a relevant exclusion or there is allegation/defence that the insured instigated the fire (fraud/wilful act).

Interpretation and reasoning: The Court treated it as undisputed that the damage to insured property occurred due to a fire incident. It held that, in such circumstances, the "cause igniting the fire becomes immaterial" for coverage under the "Fire" peril, unless the policy itself excludes such causation under the "Fire" peril exclusions or the case involves a defence that the insured caused/instigated the fire. Here, the "Fire" peril exclusions were limited (fermentation/natural heating/spontaneous combustion/heating or drying process; burning by public authority) and did not include burglary/theft. The Court further noted there was no defence taken that the insured caused the fire. Accordingly, repudiation on the basis that burglary/theft was the "proximate cause" was held unjustified, because the policy promised indemnity for loss by the specified peril of fire and did not carve out an exclusion for fire triggered by theft/burglary.

Conclusions: The insurer could not deny indemnification for fire damage by treating attempted burglary/theft as the operative basis for repudiation when the loss was caused by fire and the "Fire" peril exclusions did not exclude such circumstances and there was no case that the insured instigated the fire.

Issue (ii): Whether RSMD/general exclusions could be used to oust liability for loss attributable to fire; strict construction of exclusions and policy silence on theft preceding an insured peril

Legal framework (as discussed by the Court): The Court applied the principle that exclusion clauses in insurance contracts must be construed strictly, and where ambiguity exists, interpretation should favour the insured. The Court also examined the policy's internal structure: each specified peril had its own exclusions; additionally, the policy contained general exclusions, including an exclusion for loss by theft during or after the occurrence of an insured peril (except as provided under RSMD cover). The Court noted the policy was silent on whether theft/burglary preceding an insured peril was excluded by the general exclusions.

Interpretation and reasoning: The Court held that burglary/theft was not an exclusion within the "Fire" peril's exclusions. It further observed that the general exclusion regarding theft addressed theft "during or after" the insured peril, but the policy was silent on theft/burglary that precedes the insured peril. The insurer's repudiation was anchored to the RSMD exclusion, but the Court reasoned that an exclusion provided under the RSMD clause could not be used to "oust the liability" where the loss/damage is attributable to fire, a specified peril which has its own independent exclusions and does not include burglary/theft. On strict construction, and given the absence of an express exclusion for fire loss caused by antecedent burglary/theft within the fire coverage, the RSMD exclusion could not be extended to defeat the main fire cover.

Conclusions: Strict reading of the policy meant the RSMD exclusion did not exclude liability for damage attributable to fire; neither the fire-peril exclusions nor the general exclusions expressly excluded theft/burglary preceding the insured peril. The insurer's repudiation and the consumer tribunal's acceptance of that repudiation were therefore erroneous. The Court set aside the repudiation and the dismissal order, and remitted the matter for assessment of loss on the claim.

Issues: (i) Whether the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 could be invoked when no security interest was created in favour of the lender and the transaction documents did not establish the lender as a secured creditor; (ii) Whether the Act could be applied in Nagaland against the borrower in the absence of an applicable notification and having regard to Article 371A of the Constitution of India.

Issue (i): Whether the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 could be invoked when no security interest was created in favour of the lender and the transaction documents did not establish the lender as a secured creditor.

Analysis: The statutory scheme of the Act permits enforcement only where a security interest exists in favour of a secured creditor. A security interest under Section 2(1)(zf) presupposes a right, title, or interest created in property for securing the debt. On the facts found, the loan arrangement and guarantee documents did not create such security interest in favour of the lender, and the record did not establish any mortgage or equivalent security arrangement that could bring the lender within the definition of secured creditor. In the absence of such foundational requirement, recourse to Sections 13 and 14 of the Act could not be sustained, and the existence of an alternative remedy under Section 17 did not cure the jurisdictional defect.

Conclusion: The invocation of the Act against the borrower was unlawful and without jurisdiction.

Issue (ii): Whether the Act could be applied in Nagaland against the borrower in the absence of an applicable notification and having regard to Article 371A of the Constitution of India.

Analysis: Article 371A gives special constitutional protection in matters concerning ownership and transfer of land and its resources in Nagaland. The Act does not override the Constitution, and its operation in the State depended on the relevant notification issued much later than the transaction and recovery steps in question. The Court treated the later notification as showing that the Act became implementable in Nagaland only from that later date, which did not assist the lender for action taken earlier. The constitutional limitation, coupled with the absence of a valid security interest, reinforced the conclusion that the recovery measures under the Act were impermissible on the facts.

Conclusion: The Act could not validly be invoked in the manner attempted against the borrower in Nagaland at the relevant time.

Final Conclusion: The impugned writ relief was sustained, and the lender was left to pursue any available remedies in accordance with law against the borrower or the guarantor.

Ratio Decidendi: Enforcement under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 is maintainable only where a valid security interest exists in favour of a secured creditor, and the Act cannot be applied contrary to constitutional limitations or without the statutory preconditions for securitisation.

Issues: (i) Whether complaints under Section 138 of the Negotiable Instruments Act, 1881 survived after the corporate debtor had entered insolvency and liquidation proceedings under the Insolvency and Bankruptcy Code, 2016. (ii) Whether dishonour of cheques with the remark "ACCOUNT BLOCKED" attracted liability under Section 138 of the Negotiable Instruments Act, 1881.

Issue (i): Whether complaints under Section 138 of the Negotiable Instruments Act, 1881 survived after the corporate debtor had entered insolvency and liquidation proceedings under the Insolvency and Bankruptcy Code, 2016.

Analysis: Once the corporate debtor was admitted into CIRP, moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 came into force and management and control of the company's affairs vested in the IRP and thereafter the liquidator. The accused directors ceased to have authority over the company's bank account and could not validly issue cheques from the account after the insolvency process had taken over. In such a situation, the foundational requirement of a cheque drawn by a person maintaining the account was not satisfied, and the directors could not be fastened with liability on the basis of cheques allegedly issued after they had lost control.

Conclusion: The complaints were not maintainable against the petitioners in view of the insolvency and liquidation proceedings.

Issue (ii): Whether dishonour of cheques with the remark "ACCOUNT BLOCKED" attracted liability under Section 138 of the Negotiable Instruments Act, 1881.

Analysis: Section 138 is attracted when a cheque is dishonoured for insufficiency of funds or where the account continues to be maintained by the drawer but payment fails for a reason legally covered by the provision. Where the account is blocked because of insolvency proceedings and the drawer has already been divested of authority and control over the account, the dishonour is not attributable to insufficiency of funds in a live and operative account maintained by the drawer. The statutory ingredients of the offence therefore remain unfulfilled.

Conclusion: Dishonour for "ACCOUNT BLOCKED" in the facts of the case did not constitute an offence under Section 138 of the Negotiable Instruments Act, 1881.

Final Conclusion: The summoning orders and the connected criminal complaints were unsustainable and had to be quashed in consequence of the insolvency proceedings and the nature of the cheque dishonour.

Ratio Decidendi: Where a corporate debtor has entered CIRP and its bank accounts come under the control of the IRP or liquidator, a cheque presented thereafter cannot found prosecution under Section 138 of the Negotiable Instruments Act, 1881 if dishonour results from the account being blocked pursuant to insolvency proceedings rather than from insufficiency of funds in an account maintained by the drawer.

Issues: (i) Whether the statutory presumptions under the Negotiable Instruments Act stood rebutted by the accused; (ii) whether the complainant was required to prove financial capacity in the absence of a foundational challenge in reply to the notice; (iii) whether service of the statutory notice under the Negotiable Instruments Act was duly complied with.

Issue (i): Whether the statutory presumptions under the Negotiable Instruments Act stood rebutted by the accused.

Analysis: Once execution of the cheque and its dishonour for insufficiency of funds stood established, the presumptions under Sections 118(a) and 139 of the Negotiable Instruments Act operated in favour of the holder. The accused was required to rebut the presumptions by raising a probable defence on the touchstone of preponderance of probabilities. Mere denial, without cogent material, was insufficient to displace the presumption of a legally enforceable debt.

Conclusion: The presumptions were not rebutted and the finding of liability was upheld against the accused.

Issue (ii): Whether the complainant was required to prove financial capacity in the absence of a foundational challenge in reply to the notice.

Analysis: In a prosecution under Section 138 of the Negotiable Instruments Act, the complainant is not required in the first instance to prove financial capacity unless the accused raises a specific foundational plea at the earliest opportunity, including in reply to the statutory notice. Where no such plea is taken and no supporting material is produced, the burden does not shift back to the complainant to adduce independent proof of means.

Conclusion: The objection to financial capacity failed and the complainant was not required to prove capacity in the facts of the case.

Issue (iii): Whether service of the statutory notice under the Negotiable Instruments Act was duly complied with.

Analysis: Where notice is sent to the correct address by registered post, statutory presumptions of service arise. The drawer cannot deny service after receipt of summons with a copy of the complaint if no payment is made within the statutory period. The notice and acknowledgment placed with the complaint were treated as sufficient compliance with clause (b) of the proviso to Section 138.

Conclusion: Service of the statutory notice was duly established against the accused.

Final Conclusion: The revision failed because the conviction for cheque dishonour was supported by statutory presumptions, no probable defence was made out, and the procedural requirements of notice were satisfied; the conviction and sentence remained intact.

Ratio Decidendi: In a prosecution for cheque dishonour, once the foundational facts are proved, the presumptions under Sections 118(a) and 139 operate in favour of the complainant, and the accused must rebut them by a probable defence on preponderance of probabilities; absent a timely foundational challenge, the complainant need not first prove financial capacity, and proper dispatch of notice to the correct address satisfies the statutory requirement of service.

Issues: (i) whether the transfer of the suit property was hit by the doctrine of lis pendens under Section 52 of the Transfer of Property Act, 1882; (ii) whether the transferees could have obtained relief under Order XXI Rule 89 or Rule 90 of the Code of Civil Procedure, 1908; (iii) whether a separate suit was barred by Order XXI Rule 92(3) and Section 47 of the Code of Civil Procedure, 1908, and whether the transferees were third parties under Rule 92(4); (iv) whether relief could have been sought under Order XXI Rule 99 and, if so, whether omission to pursue that remedy affected maintainability of the suit.

Issue (i): whether the transfer of the suit property was hit by the doctrine of lis pendens under Section 52 of the Transfer of Property Act, 1882.

Analysis: The doctrine applies where a suit or proceeding in a competent court is pending and a right to immovable property is directly and specifically in question. A money suit may still attract the doctrine where the plaint and decree disclose that the mortgaged property is part of the subject matter and may be proceeded against in execution. A pendente lite transferee is bound by the result of the litigation irrespective of notice. The transfer here was made after institution of the bank's suit and during the pendency of proceedings in which the mortgaged property was directly in issue.

Conclusion: The transfer was hit by lis pendens and the transferees were pendente lite transferees.

Issue (ii): whether the transferees could have obtained relief under Order XXI Rule 89 or Rule 90 of the Code of Civil Procedure, 1908.

Analysis: Rule 89 is a concessionary remedy available to a person claiming an interest in the property sold, including a pendente lite transferee, but it must be invoked within sixty days of the sale with the prescribed deposit. Rule 90 is confined to material irregularity or fraud in publishing or conducting the sale and requires proof of substantial injury. Matters relating to the judgment-debtor's saleable interest or title are outside Rule 90 and belong elsewhere in the scheme. The alleged grievances were either time-barred, or not the kind of injury that Rule 90 addresses.

Conclusion: No relief could be sustained under Rule 89 or Rule 90.

Issue (iii): whether a separate suit was barred by Order XXI Rule 92(3) and Section 47 of the Code of Civil Procedure, 1908, and whether the transferees were third parties under Rule 92(4).

Analysis: Rule 92(3) bars a suit by a person against whom an order confirming or setting aside sale is made when the grievance is one that falls within Rules 89 to 91. Section 47 bars a separate suit between the parties to the original decree or their representatives on questions relating to execution, discharge or satisfaction. A third party under Rule 92(4) is one outside the original lis and outside the category of representatives under Section 47, who has had no effective opportunity to have title adjudicated in execution. A pendente lite transferee of a judgment-debtor is not such a third party. The transferees here were held to be representatives of the judgment-debtor, and their challenge also overlapped with matters that should have been pursued in execution.

Conclusion: The separate suit was barred and the transferees were not third parties within Rule 92(4).

Issue (iv): whether relief could have been sought under Order XXI Rule 99 and, if so, whether omission to pursue that remedy affected maintainability of the suit.

Analysis: Rule 99 is available to a person other than the judgment-debtor who has been dispossessed in execution, and the post-amendment scheme read with Rule 101 makes the executing court the forum for adjudicating all questions of right, title and interest. A transferee pendente lite is disabled by Rule 102 from obtaining relief under Rules 98 and 100, but that does not revive a separate suit; the bar under Section 52 and the purpose of the amended execution scheme prevent circumvention of execution remedies. The transferees could have proceeded in execution, but the separate suit could not be maintained as an alternative route.

Conclusion: Rule 99 did not furnish a basis to maintain a separate suit, and the suit remained not maintainable.

Final Conclusion: The suit could not be sustained in law because the transferees were pendente lite transferees and representatives of the judgment-debtor, their challenge fell within the execution framework, and the separate suit route was unavailable on the facts. The appeal was therefore allowed.

Ratio Decidendi: A pendente lite transferee of a judgment-debtor, whose grievance concerns execution-related matters or the title of the judgment-debtor to the sold property, must ordinarily pursue the remedies provided in the execution scheme and cannot bypass those remedies by filing a separate suit; where the transfer is hit by lis pendens, relief of title and possession cannot be granted in favour of such transferee.

Issues: (i) Whether Article 19 of the Agreement identified New Delhi, India as the juridical seat of arbitration or whether Singapore was the seat by reason of the ICC Court's fixation of the place of arbitration; (ii) Whether the non-disclosure by the co-arbitrator concerning his prior professional association created justifiable doubts as to independence and impartiality so as to justify an anti-arbitration injunction.

Issue (i): Whether Article 19 of the Agreement identified New Delhi, India as the juridical seat of arbitration or whether Singapore was the seat by reason of the ICC Court's fixation of the place of arbitration?

Analysis: The arbitration clause was read as a whole and harmoniously. The clause conferred exclusive jurisdiction on the courts at New Delhi, while separately providing that disputes would be arbitrated under ICC Rules and that the place of arbitration was to be mutually agreed. The reference to ICC Rules was treated as governing procedure, not seat. The use of the word "place" in the clause, and the later fixation of Singapore by the ICC Court, was held to be concerned with venue and administrative convenience rather than the juridical seat. The contractual intention, on a prima facie reading, was that the supervisory jurisdiction would remain with Indian courts.

Conclusion: New Delhi, India was held to be the juridical seat, and the fixation of Singapore as the place of arbitration did not displace that seat. The objection to Indian court jurisdiction failed.

Issue (ii): Whether the non-disclosure by the co-arbitrator concerning his prior professional association created justifiable doubts as to independence and impartiality so as to justify an anti-arbitration injunction?

Analysis: Section 12 of the Arbitration and Conciliation Act, 1996 was treated as imposing a continuing duty of disclosure and as requiring an objective assessment of whether circumstances give rise to justifiable doubts from the standpoint of a fair-minded and informed third party. The prior professional connection was found to fall within the disclosure-sensitive categories under the Fifth Schedule. The arbitrator's failure to disclose, including after becoming aware of the conflict, was treated as a material non-disclosure undermining neutrality. The Court also held that the foreign anti-suit injunction from Singapore did not operate as res judicata in India because the Indian seat court retained supervisory jurisdiction and the foreign forum was not a court of competent jurisdiction for that purpose. On the facts, the arbitral proceedings were viewed as prima facie vexatious and oppressive, and the civil suit was held maintainable.

Conclusion: The non-disclosure was held to create justifiable doubts and supported the grant of anti-arbitration relief. The foreign anti-suit injunction did not bar the suit in India.

Final Conclusion: The appeal was held to lack merit, and the injunction restraining continuation of the arbitral proceedings was left undisturbed, with the suit to be decided independently on its own merits.

Ratio Decidendi: Where the arbitration clause, read harmoniously, confers exclusive jurisdiction on Indian courts and the arbitral "place" is fixed only administratively, Indian courts may treat India as the seat; a material and continuing failure by an arbitrator to disclose a prior professional connection that gives rise to justifiable doubts as to impartiality can justify anti-arbitration injunctive relief, and a foreign anti-suit injunction will not operate as res judicata against the Indian seat court absent competent jurisdiction.

Issues: Whether, after issuance of summons in a complaint under Section 138 of the Negotiable Instruments Act, 1881, the Magistrate could discharge the accused on an application questioning the maintainability of the proceeding.

Analysis: In a summons case arising from a complaint under Section 138 of the Negotiable Instruments Act, 1881, once cognizance is taken and process is issued, the proceeding must ordinarily move in accordance with Chapter XX of the Code of Criminal Procedure, 1973. The Magistrate has no inherent power to review or recall the summons merely on reconsideration of the complaint materials. The decision to drop the proceeding after process is not available in the manner adopted by the trial court, and the earlier Constitution Bench exposition makes it clear that Section 258 of the Code of Criminal Procedure, 1973 does not apply to such complaints. The trial court therefore acted without jurisdiction in discharging the accused on the maintainability objection.

Conclusion: The discharge order was unsustainable and the petitioner succeeded on this issue.

Ratio Decidendi: After summons are issued in a complaint case under Section 138 of the Negotiable Instruments Act, 1881, the Magistrate cannot discharge the accused by recalling or reviewing the summons; the case must proceed in accordance with Chapter XX of the Code of Criminal Procedure, 1973.

Issues: (i) Whether prolonged custody and the improbability of early conclusion of trial justified grant of bail notwithstanding the seriousness of the alleged economic offences. (ii) Whether Section 479 of the Bharatiya Nagarik Suraksha Sanhita, 2023 could be construed as a mandate to continue incarceration until completion of trial in a case involving grave charges.

Issue (i): Whether prolonged custody and the improbability of early conclusion of trial justified grant of bail notwithstanding the seriousness of the alleged economic offences.

Analysis: The right to personal liberty and speedy trial under Article 21 remains available to an undertrial, and pre-trial incarceration cannot be allowed to become punishment. Seriousness of the allegation is relevant, but it does not by itself justify continued detention where the investigation is complete, the case is documentary in nature, the charge has not yet been framed, and the trial is not likely to conclude within a reasonable time. The long custody already undergone and the voluminous record, together with the large number of witnesses, weighed in favour of release on bail.

Conclusion: The issue was answered in favour of the appellants and bail was warranted on the facts.

Issue (ii): Whether Section 479 of the Bharatiya Nagarik Suraksha Sanhita, 2023 could be construed as a mandate to continue incarceration until completion of trial in a case involving grave charges.

Analysis: Section 479 was construed as a liberty-enhancing provision intended to decongest prisons, not as a restrictive mandate forbidding bail until the accused completes one-half or one-third of the sentence in every case. Its operation does not exclude the ordinary bail jurisdiction of constitutional courts, and it must be read consistently with the protection of personal liberty under Article 21. The provision therefore could not be used to deny bail merely because the alleged offences carried severe punishment.

Conclusion: The contention based on Section 479 was rejected and did not bar grant of bail.

Final Conclusion: The appeals succeeded and the appellants were directed to be released on bail subject to conditions, without any expression on the merits of the prosecution case.

Ratio Decidendi: Where an undertrial has undergone substantial incarceration and the trial is not likely to conclude within a reasonable time, continued detention offends Article 21, and even in serious economic offences the constitutional courts may grant bail notwithstanding stringent statutory thresholds.

1. ISSUES PRESENTED AND CONSIDERED

1.1. Whether the plaintiff established a prima facie case that the three impugned Memorandum of Agreements are fabricated and not duly executed loan/investment agreements.

1.2. Whether the contemporaneous email correspondence and draft Memorandum of Understanding support the plaintiff's plea that the actual agreed terms differed materially from those recorded in the impugned Memorandum of Agreements.

1.3. Whether the mention of specific cheque numbers in the impugned Memorandum of Agreements, in light of the bank certificates regarding issuance dates of the relevant cheque books, indicates fabrication of those agreements.

1.4. Whether, applying the tests of prima facie case, balance of convenience and irreparable injury, the defendants should be restrained from acting upon or enforcing the impugned Memorandum of Agreements, including for proceedings under Section 138 of the Negotiable Instruments Act, 1881.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1 - Prima facie case of fabrication of the impugned Memorandum of Agreements

Interpretation and reasoning

2.1. The Court examined the plaintiff's case that he was doing coal supply business through a partnership firm, that defendant no.2 agreed to invest in his business through defendant no.1, and that documents signed by him under coercion/misrepresentation were later misused to manufacture the impugned Memorandum of Agreements showing financial assistance of Rs. 15,00,000/-, Rs. 1,15,00,000/- and Rs. 40,00,000/-.

2.2. The Court contrasted this with the defendants' stand that the three Memorandum of Agreements were duly executed and notarized in 2019 pursuant to the plaintiff's request for financial assistance, that the plaintiff defaulted in repayment, and that subsequent dishonour of cheques led to Section 138 proceedings, to which the present suit was allegedly a counterblast.

2.3. On the material placed, the Court focused on two key aspects indicating inconsistency with the defendants' version: (i) the terms relating to interest and returns as reflected in the contemporaneous draft Memorandum of Understanding and emails, and (ii) the reference to specific cheque numbers in the impugned agreements which, according to bank certificates, could not have existed at the stated dates of execution.

2.4. These circumstances, taken cumulatively, led the Court, at the interim stage, to doubt the authenticity of the impugned Memorandum of Agreements and to treat them as prima facie fabricated or manufactured documents, allegedly deployed when the defendants decided to initiate proceedings under Section 138 of the Negotiable Instruments Act.

Conclusions

2.5. The Court held that, on a prima facie view, the plaintiff has made out a credible case that the three impugned Memorandum of Agreements appear to be fabricated and not reflective of the actual transaction or agreed terms.

Issue 2 - Effect of contemporaneous draft MOU and email correspondence on the agreed financial terms

Interpretation and reasoning

2.6. The Court scrutinized the email trail involving the plaintiff, defendant no.2 and the Chartered Accountant, Mr. Chandan Ghosh, including:

(a) Email dated 12 August 2019 from Mr. Ghosh indicating his engagement to draft the agreement on a concessional fee, showing his connection with defendant no.2.

(b) Emails where the plaintiff clearly asserted that the assured return to defendant no.1 would be a minimum of 18% per annum.

(c) Email dated 15 August 2019, by which Mr. Ghosh circulated a draft MOU dated 14 August 2019, recording that defendant no.1 would be entitled to 50% profit from the plaintiff's business, subject to a minimum of 18% per annum on Rs. 1,00,00,000/-.

(d) Email dated 16 August 2019 from a witness, also providing for interest at 18% per annum.

2.7. Clause 3(i) of the draft MOU dated 14 August 2019, as reproduced by the Court, explicitly provided for a minimum return of 18% per annum on Rs. 1,00,00,000/- or 50% of profits, whichever is higher, i.e., simple interest at 18% per annum on capital contributed.

2.8. The Court contrasted this with the clauses in the three impugned Memorandum of Agreements, which stipulate interest at 2.5% per month on a compoundable basis, along with additional specified profits, thereby drastically increasing the financial burden on the plaintiff.

2.9. The Court reasoned that, since the parties were negotiating and circulating drafts containing a term of simple interest at 18% per annum as late as mid-August 2019, it "completely defies logic" that within a day the terms would be unilaterally and drastically altered to compound interest at 2.5% per month and substantial additional profits, which materially prejudiced the plaintiff.

2.10. The Court further relied on an email dated 9 October 2019 from the plaintiff to defendant no.1 enclosing another draft MOU, again providing a guaranteed share of not less than 18% on the outstanding financial assistance, which email was duly acknowledged by defendant no.2. This indicated that the MOU was still under discussion and not executed at least till 9 October 2019, whereas the defendants' case was that the impugned Memorandum of Agreements had already been executed on 20 March 2019 and 17 August 2019.

Conclusions

2.11. The Court concluded that the contemporaneous draft MOU and email correspondence support the plaintiff's plea that the agreed terms contemplated simple interest at 18% per annum and profit sharing, not compound interest at 2.5% per month with additional profit payments, thereby reinforcing the prima facie inference that the impugned Memorandum of Agreements do not reflect the original understanding and appear suspect.

Issue 3 - Cheque numbers and bank certificates as indicators of fabrication

Interpretation and reasoning

2.12. The Court examined Clause 9 of the two impugned Memorandum of Agreements dated 17 August 2019 (with defendant no.1 and defendant no.3, respectively), which both recite that the plaintiff has "handed over" specified banker's cheques drawn on HDFC Bank Ltd., Ranchi Branch, and J&K Bank, Ranchi Branch, to secure the financial transaction and enable recovery in case of default.

2.13. The impugned clauses specifically refer to cheque numbers in the HDFC series (e.g., 000086, 000112, 000113, 000126, 000127, 000133) and J&K Bank series (e.g., 133442, 133443, 186444, 186445).

2.14. The plaintiff produced a certificate from HDFC Bank showing that cheques bearing serial numbers 000126 to 000150, including some of those mentioned in the impugned agreements, were issued only on 15 October 2020.

2.15. The plaintiff also produced a certificate dated 28 August 2023 from J&K Bank stating that cheques bearing serial numbers 186401 to 186450, which include the J&K Bank cheque numbers cited in the impugned agreements, were issued only on 4 December 2020.

2.16. The defendants argued that the cheques mentioned in the impugned documents were only recorded for security and were not actually handed over at the time of execution, and further relied on the plaintiff's admission that the cheque numbers relate to his own HDFC and J&K Bank accounts, suggesting that such details could only have come from him.

2.17. The Court held that this explanation is "plainly contrary" to the express language of Clause 9 in both agreements, which clearly states that the cheques have been "handed over" to the lenders at the time of execution, not merely noted as future securities.

2.18. At the interim stage, the Court found no reason to doubt the genuineness of the bank certificates. On the face of these certificates, the relevant cheque books were issued in October and December 2020, rendering it impossible for the plaintiff to have handed over those cheques on or before 17 August 2019 as recorded in the impugned agreements.

Conclusions

2.19. The Court held that the chronological impossibility arising from the bank certificates, when read against the clear recitals in Clause 9 of the impugned agreements, strongly supports the plaintiff's contention that the agreements were created or modified later and are prima facie fabricated.

Issue 4 - Entitlement to interim injunction restraining enforcement of the impugned Memorandum of Agreements

Legal framework (as applied by the Court)

2.20. The Court applied the settled threefold test for grant of interim injunction under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure, 1908: (i) existence of a prima facie case; (ii) balance of convenience; and (iii) likelihood of irreparable loss, harm or injury to the applicant if relief is denied.

Interpretation and reasoning

2.21. On prima facie case, the Court relied on (a) the inconsistency between the negotiated terms in the draft MOU/emails and the onerous terms in the impugned agreements, and (b) the bank certificates disproving the existence of the cheques at the time when the impugned agreements purport to record their handing over. These factors cumulatively indicated that the impugned agreements were, at least prima facie, fabricated or manufactured.

2.22. On balance of convenience, the Court noted that allowing the defendants to act upon the impugned agreements, including by relying on them in criminal complaints and other proceedings, would seriously prejudice the plaintiff, especially when the very validity and authenticity of those agreements is under substantial, prima facie supported challenge.

2.23. On irreparable loss, harm and injury, the Court held that if the defendants continued to file and prosecute cases against the plaintiff on the basis of the impugned Memorandum of Agreements pending adjudication of their validity, the plaintiff would suffer irreparable consequences that could not be adequately compensated by damages.

Conclusions

2.24. The Court concluded that the plaintiff has established a strong prima facie case, that the balance of convenience lies in his favour, and that he would suffer irreparable harm if interim protection is not granted.

2.25. Accordingly, the Court restrained the defendants, till final adjudication of the suit, from acting upon or enforcing the three impugned Memorandum of Agreements, namely:

(a) Memorandum of Agreement dated 20 March 2019 (Rs. 15,00,000/-);

(b) Memorandum of Agreement dated 17 August 2019 with defendant no.1 (Rs. 1,15,00,000/-);

(c) Memorandum of Agreement dated 17 August 2019 with defendant no.3 (Rs. 40,00,000/-).

2.26. The Court clarified that all observations are confined to the adjudication of the interim application and shall not affect the final decision in the suit.

Issues: Whether the secured creditor's prior mortgage and security interest had priority over the State's later attachment and revenue charge, and whether the Sub-Registrar could refuse registration of the SARFAESI sale deed on that basis.

Analysis: The charge in favour of the bank arose in 2013 on deposit of title deeds, whereas the State's attachment and revenue entry were created only in 2018. In the absence of any statutory first charge in favour of the State for the dues in question, the later administrative rapat entry could not defeat the earlier secured interest. The judgment relied on the priority accorded to secured creditors under the SARFAESI framework, including the overriding effect of the Act and the principle that a secured creditor's right to realise its debt prevails over competing revenue claims. The later attachment therefore could not justify refusal to register the sale deed issued pursuant to the e-auction.

Conclusion: The secured creditor's prior charge prevailed over the State's subsequent dues and attachment, and the refusal to register the sale deed was not sustainable.

Final Conclusion: Relief was granted to protect the earlier secured interest, direct registration of the auction sale deed, and set aside the later revenue charge, while leaving the State free to pursue its dues after satisfaction of the secured debt in accordance with law.

Ratio Decidendi: A later governmental attachment or revenue entry cannot override an earlier created security interest of a secured creditor, and the secured creditor's prior right to enforce its security prevails in the absence of a statutory first charge in favour of the State.

Issues: Whether, on expiry of the arbitral mandate under Section 29A of the Arbitration and Conciliation Act, 1996, the Court was required to substitute the sole arbitrator instead of extending his mandate.

Analysis: Section 29A is a remedial provision designed to secure expeditious conclusion of arbitral proceedings. Once the statutory period for making the award expired, and no further extension had been obtained, the sole arbitrator could not continue and became functus officio. Section 29A(6) expressly empowers the Court, while extending time, to substitute one or all arbitrators, and the exercise of that power is not confined by the separate remedies available under Sections 14 and 15. The prior rejection of proceedings under Sections 14 and 15 did not preclude relief under Section 29A, because the mandate had not then terminated. In the facts, the High Court ought to have acted under Section 29A(6) rather than extend the mandate of an arbitrator whose authority had already ceased.

Conclusion: The request for substitution was warranted, and the High Court's order extending the mandate was unsustainable.

Ratio Decidendi: When the arbitral mandate has expired under Section 29A, the Court may substitute the arbitrator under Section 29A(6) to advance the statute's objective of timely completion of arbitration; continuation of an expired mandate is impermissible.

Issues: (i) Whether the municipal corporation had authority to levy and enhance licence fees for sky-signs, hoardings and advertisements under the municipal law framework; (ii) whether the levy was a tax or a regulatory fee; (iii) whether the Goods and Services Tax regime and deletion of Entry 55 from List II had extinguished the power to levy such fees; and (iv) whether the enhancement to Rs. 222 per sq. ft. per annum with ex post facto approval and retrospective effect was valid.

Issue (i): Whether the municipal corporation had authority to levy and enhance licence fees for sky-signs, hoardings and advertisements under the municipal law framework.

Analysis: Sections 244 and 245 regulate erection and control of sky-signs and advertisements, while Section 386(2) authorises a fee for every such licence or written permission at a rate fixed by the Commissioner with the sanction of the Corporation. The statutory scheme and the 2003 Rules contemplate licensing, renewal, inspection and ongoing supervision, and the municipal fund provisions also recognise fees as a source of municipal revenue. The power is therefore not confined to mere issuance of a paper permission, but extends to a structured licensing regime with fee fixation and enhancement.

Conclusion: The municipal corporation had authority to levy and enhance the licence fee.

Issue (ii): Whether the levy was a tax or a regulatory fee.

Analysis: The charge was held to be connected with regulation and control of the licensed activity, not a tax under the municipal taxing provisions. The absence of a strict quid pro quo did not convert the levy into a tax, because modern fee jurisprudence recognises that a regulatory fee requires only a broad correlation between the levy and the expenses and supervision involved in regulation. The Court treated the licensing charge as a regulatory measure supporting the municipal supervisory functions attached to sky-sign and hoarding permissions.

Conclusion: The levy was a regulatory fee and not a tax.

Issue (iii): Whether the Goods and Services Tax regime and deletion of Entry 55 from List II had extinguished the power to levy such fees.

Analysis: The Court held that the GST regime did not repeal Sections 244, 245 or 386(2), and the repeal provision in the GST legislation did not touch the municipal licensing provisions. Deletion of Entry 55, which concerned advertisement tax, did not eliminate the separate power to levy a regulatory licence fee under the municipal law. The relevant constitutional support was traced to Article 243X and the legislative fields in Entries 5 and 66 of List II, which remained available for municipal regulation and fees in respect of matters within the State List.

Conclusion: The GST regime and deletion of Entry 55 did not extinguish the power to levy the licence fee.

Issue (iv): Whether the enhancement to Rs. 222 per sq. ft. per annum with ex post facto approval and retrospective effect was valid.

Analysis: The Court read Section 386(2) as using the word "sanction" without the qualifiers "prior" or "previous", and held that the provision permits ratification by the Corporation, including ex post facto sanction, where the statutory context so warrants. The Commissioner had fixed the rate after the tender-based market response and the General Body later ratified that rate with effect from 1 April 2013. In the Court's view, the approval was not invalid merely because it operated retrospectively, and the rate was not shown to be so excessive or arbitrary as to warrant interference in writ jurisdiction.

Conclusion: The enhancement and its ex post facto ratification were held valid.

Final Conclusion: The challenge to the municipal levy failed in entirety, and the statutory licensing regime for sky-signs and hoardings was upheld as a valid regulatory framework permitting fee enhancement and Corporation ratification.

Ratio Decidendi: A municipal charge imposed for grant and renewal of sky-sign and hoarding permissions under a licensing regime is a regulatory fee, not a tax, and may be fixed by the Commissioner with the Corporation's sanction, including ex post facto ratification, where the statute does not insist on prior sanction and the levy bears a broad correlation to regulation and supervision.

Issues: Whether the High Court was justified in referring the parties to arbitration under Section 11 on the footing that the respondent, a non-signatory to the principal contract, was bound by the arbitration agreement and entitled to invoke it against the appellant.

Analysis: The referral court under Section 11 is required to examine, on a prima facie basis, whether an arbitration agreement exists and whether a non-signatory can be treated as a veritable party to that agreement. That exercise is limited, but it is not illusory; the court must inspect the dealings and surrounding documents to see whether there is any real intention to bind the non-signatory to the principal contract. Mere commercial association, back-to-back arrangements, emails, or an assignment between the contractor and the respondent do not by themselves establish privity with the owner or create an arbitration agreement between them. The material showed that the appellant had contracted only with AGC, that the respondent's arrangement was only with AGC, and that the contract itself prohibited subletting or assignment without prior written consent of the owner, which was not shown. On these facts, the respondent failed even prima facie to show that it was a veritable party to the arbitration agreement between the appellant and AGC.

Conclusion: The High Court ought not to have referred the dispute to arbitration. The absence of even a prima facie arbitration agreement between the appellant and the respondent meant that the Section 11 application could not be sustained, and the appeal succeeds in favour of the appellant.

Final Conclusion: The referral order was set aside and the proceeding seeking appointment of an arbitrator was dismissed, leaving the respondent free to pursue any other remedy available in law.

Ratio Decidendi: In proceedings under Section 11 of the Arbitration and Conciliation Act, 1996, a referral court may refer a dispute involving a non-signatory only if it is prima facie satisfied that the non-signatory is a veritable party to the arbitration agreement; a mere commercial or derivative connection is insufficient without indicia of consent or intention to be bound.

Issues: (i) Whether Section 30 of the Uttar Pradesh Revenue Code, 2006 permits reopening a finally settled dispute to alter the location of a plot in the revenue map; (ii) Whether the High Court's remand for fresh consideration warranted interference.

Issue (i): Whether Section 30 of the Uttar Pradesh Revenue Code, 2006 permits reopening a finally settled dispute to alter the location of a plot in the revenue map.

Analysis: Section 30 requires maintenance of village maps and field books, recording of subsequent changes, and correction of detected errors or omissions. Its correction power does not extend to changing the location of land merely to secure a more advantageous position. The identical map-correction claim had been rejected in earlier proceedings and had attained finality; no error or omission in the revenue record was established.

Conclusion: Section 30 does not permit reopening the settled map dispute or relocating the plot; the finding is in favour of the appellant.

Issue (ii): Whether the High Court's remand for fresh consideration warranted interference.

Analysis: Although remand orders are ordinarily interlocutory, intervention was justified because the remand rested on an erroneous interpretation of Section 30 and would generate an unnecessary further round of litigation over an issue already conclusively settled.

Conclusion: The remand order was unsustainable and was liable to be set aside; the finding is in favour of the appellant.

Final Conclusion: A concluded revenue-map dispute cannot be revived under the statutory power to correct genuine errors or omissions, and an erroneous remand that prolongs such litigation must be corrected.

Ratio Decidendi: A statutory power to correct errors or omissions in revenue records cannot be used to reopen a final adjudication or to alter a plot's settled location in the absence of a demonstrable record error.

Issues: (i) Whether the freezing of the petitioner's bank account by the Cyber Cell and the Bank, without an order of the Magistrate and without following the procedure under Sections 106 and 107 of the BNSS, was lawful; and whether the bank must be directed to defreeze the account.

Analysis: The issue requires examination of the statutory framework distinguishing seizure and attachment and the procedural route for depriving a person of control over property alleged to be proceeds of crime. Under the statutory scheme referenced, seizure and attachment serve different purposes and attachment affecting the proprietary control over funds requires the Magistrate's order under the applicable provisions. The factual record shows the account was placed in lien at the request of the Cyber Cell without production of any Magistrate order authorising attachment; the Bank relied on a Cyber Cell request and its internal SOPs but did not produce judicial authorization permitting freezing. The Bank's ability to retain the lien was therefore dependent on lawful authority under the statutory procedure rather than solely on an administrative request from the Cyber Cell.

Conclusion: The freezing of the account without compliance with the statutory procedure under Sections 106 and 107 of the BNSS was not in accordance with law; the lien/freezing is set aside and the Bank is directed to allow operation of the account, subject to any future lawful action in accordance with the statutory procedure.

1. ISSUES PRESENTED AND CONSIDERED

1.1 Whether a writ petition under Article 226 challenging show cause notices and a consequential order is maintainable when an alternate and efficacious statutory appellate remedy is available.

1.2 Whether vague and cursory pleadings alleging breach of natural justice, lack of jurisdiction, and violation of constitutional rights are sufficient to invoke the recognised exceptions to the rule of exhaustion of alternate remedies.

1.3 Whether, while declining to entertain the writ petition on the ground of alternate remedy, the Court should grant liberty regarding limitation for filing appeal and keep open the challenge to the show cause notices.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Maintainability of writ petition in the presence of an alternate and efficacious statutory remedy of appeal

Interpretation and reasoning

2.1 The Court noted that the impugned order is appealable and that an appellate remedy is available to the petitioner under the statute.

2.2 The Court found from the petition that the petitioner essentially wishes to assail the impugned order on merits but has chosen not to approach the Appellate Authority, apparently to avoid the statutory requirement of pre-deposit of a percentage of the demanded amount.

2.3 The Court held that the writ jurisdiction cannot be exercised in equity to bypass clear statutory provisions providing for an appeal, nor can it be invoked to permit parties to circumvent such alternate remedies.

2.4 Relying on the reasoning in a prior decision of the Court on exhaustion of alternate remedies, and the precedents considered therein, the Court reaffirmed that deviation from the settled practice of insisting on exhaustion of alternate remedies is not warranted in the present case.

2.5 The Court further relied on the pronouncement of the Supreme Court reiterating that High Courts should not entertain petitions under Article 226 when effective statutory remedies are available, except in exceptional cases falling within recognised exceptions.

Conclusions

2.6 The writ petition challenging the impugned order was held not maintainable in view of the available and efficacious statutory appellate remedy, and the Court declined to entertain it on this ground.

Issue 2: Adequacy of pleadings to attract exceptions to the rule of alternate remedy

Interpretation and reasoning

2.7 The petitioner contended that certain submissions were not considered in the impugned order and invoked grounds including contravention of procedural fairness, lack of jurisdiction, absence of authority of law, being contrary to settled law, violation of principles of natural justice, and breach of rights under Articles 14, 265 and 300A of the Constitution.

2.8 The Court examined the pleadings, particularly the relevant paragraph, and characterised the averments as extremely vague and cursory, noting that practically all possible grounds were mechanically invoked without elaboration or supporting particulars.

2.9 The Court observed that to attract the recognised exceptions to the rule requiring exhaustion of alternate remedies, a petitioner must plead and establish an exceptional case, supported by proper pleadings and material.

2.10 It was further observed that in the present matter, an attempt was made at the stage of arguments to advance a case that was not even properly pleaded, while the case that had been cursorily pleaded was effectively given up.

Conclusions

2.11 The Court held that the vague and unsupported allegations of breach of natural justice, lack of jurisdiction, and constitutional violations did not bring the case within any recognised exception to the rule of alternate remedy.

2.12 On this basis also, no ground was made out to entertain the writ petition in preference to the statutory appellate remedy.

Issue 3: Directions on liberty to appeal, limitation, and preservation of challenge to show cause notices

Interpretation and reasoning

2.13 While declining to entertain the writ petition, the Court considered the need to ensure that the petitioner is not prejudiced on the question of limitation in availing the appellate remedy.

2.14 The Court directed that if an appeal against the impugned order is filed within four weeks from the date of the order, and all legal requirements (including pre-deposit, if any) are complied with, the Appellate Authority shall entertain the appeal on its own merits without going into the issue of limitation.

2.15 The Court also noted the existence of a separate prayer challenging the show cause notices and considered it appropriate to preserve the petitioner's right to raise that challenge in the future, depending on the outcome of the appellate proceedings under the statute.

Conclusions

2.16 Liberty was granted to the petitioner to file an appeal against the impugned order within four weeks, with a specific direction to the Appellate Authority not to reject such appeal on the ground of limitation.

2.17 The challenge to the show cause notices, as contained in the relevant prayer clause, was expressly kept open to be pursued if the petitioner does not obtain relief from the appellate authorities.

2.18 The petition was disposed of in these terms, with no order as to costs.

Issues: (i) Whether the public interest litigation challenging the revision of property tax was maintainable despite the statutory appellate remedy and the petitioner's individual grievance; (ii) Whether judicial review could invalidate the municipal corporation's policy decision revising property-tax rates.

Issue (i): Whether the public interest litigation challenging the revision of property tax was maintainable despite the statutory appellate remedy and the petitioner's individual grievance.

Analysis: The petition did not establish that the petitioner represented the city's residents, and substantially raised an individual objection to the revised assessment. Section 406 of the Maharashtra Municipal Corporations Act, 1949 provided a statutory mechanism to challenge municipal decisions. The use of a public interest proceeding to bypass that remedy was impermissible.

Conclusion: The public interest litigation was not maintainable in the circumstances. This issue is decided in favour of the Revenue.

Issue (ii): Whether judicial review could invalidate the municipal corporation's policy decision revising property-tax rates.

Analysis: Revision of property-tax rates, following a prolonged period without revision, concerned municipal revenue generation necessary for statutory functions and financial autonomy. Judicial review of an economic or fiscal policy is confined to illegality, constitutional infirmity, perversity, arbitrariness, or patent breach of the governing procedure; it does not permit reassessment of the policy's merits or substitution of judicial views. No material established such infirmity in the revision exercise.

Conclusion: The municipal corporation's property-tax revision could not be invalidated through judicial review on the facts established. This issue is decided in favour of the Revenue.

Final Conclusion: The High Court's interference with the municipal tax-revision resolutions was legally unsustainable, and those resolutions remain effective.

Ratio Decidendi: Courts cannot substitute their assessment for a competent municipal body's fiscal-policy decision unless the decision is shown to be unconstitutional, illegal, perverse, arbitrary, or in patent breach of statutory procedure.

Issues: (i) Whether the delay in filing the review petition and the civil revision petitions was sufficiently explained; (ii) whether the review petition was entertainable on merits within the limited scope of review jurisdiction; (iii) whether denatured spirit is covered by the expression "ethyl alcohol" in the notification so as to attract entry tax under the Karnataka Tax on Entry of Goods Act, 1979.

Issue (i): Whether the delay in filing the review petition and the civil revision petitions was sufficiently explained.

Analysis: The explanation consisted largely of a chronology of internal processing within the State machinery. The Court found unexplained periods of inactivity, lack of promptness, and administrative lethargy. It held that delay cannot be justified merely because the litigant is the State, and that the length of delay is not decisive if the explanation is unsatisfactory. The conduct disclosed absence of due diligence and bona fides.

Conclusion: The delay was not sufficiently explained and condonation was declined.

Issue (ii): Whether the review petition was entertainable on merits within the limited scope of review jurisdiction.

Analysis: Review jurisdiction is confined to error apparent on the face of the record, discovery of new matter, or analogous sufficient reason. It cannot be used to re-argue the case, seek rehearing, or substitute a possible alternative view. The grounds raised in review were only a repetition of submissions already considered and did not disclose any patent error.

Conclusion: The review petition was not entertainable on merits.

Issue (iii): Whether denatured spirit is covered by the expression "ethyl alcohol" in the notification so as to attract entry tax under the Karnataka Tax on Entry of Goods Act, 1979.

Analysis: The statutory schedule separately classified denatured spirit and ethyl alcohol as distinct commodities. Earlier and later notifications also treated them separately, and the later notification omitted denatured spirit while referring to rectified spirit, neutral spirit, and ethyl alcohol. The Court held that a separately identified commodity cannot be taxed by stretching the expression used in the notification, especially when the legislative and notification scheme distinguishes the two products.

Conclusion: Denatured spirit is not covered by the notification as ethyl alcohol and no entry tax could be levied on that basis.

Final Conclusion: The State's challenge failed both on limitation and on merits, while the impugned tax levy on denatured spirit was held unsustainable and the petitions were dismissed.

Ratio Decidendi: A taxing notification must be construed strictly, and where the statute and notifications separately classify two commodities, one cannot be brought within the other by interpretation unless it is expressly included.

Issues: Whether, after a criminal revision petition has been finally disposed of, the inherent powers can be invoked to quash a conviction and sentence under Section 138 of the Negotiable Instruments Act, 1881 on the basis of subsequent settlement between the parties.

Analysis: The prior decisions of the Court were examined and the controlling principle was that, once a conviction is confirmed in revision and the revision stands finally disposed of, the Court becomes functus officio and cannot use inherent jurisdiction to reopen the conviction or permit post-revisional compounding. The bar under the provision prohibiting alteration or review of a signed judgment was also treated as decisive. The later decision permitting post-revisional quashing was treated as rendered on its special facts and not as overriding the earlier authoritative line of precedent. The decision relied on by the petitioners permitting composition in a disposed revision was held not to assist them.

Conclusion: The inherent jurisdiction cannot be invoked after final disposal of the revision petition to set aside the conviction and sentence; the petitioners' request for quashing on the basis of settlement is not maintainable.

1. ISSUES PRESENTED AND CONSIDERED

1.1 Whether the Award Debtor's computation of the decretal amount, including the period for which future interest @ 12% per annum is payable under the arbitral award and additional award, correctly reflects the directions contained therein.

1.2 Whether tax was lawfully deductible at source (TDS) from the sums paid under the arbitral award and, if not, whether the Award Debtor is obliged to refund the deducted TDS amounts to the Award Holder.

1.3 Whether the Award Holder is entitled to interest on the amounts deducted as TDS and deposited with the Income Tax Department.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Correct computation of decretal amount and future interest

Interpretation and reasoning

2.1 The Court examined the arbitral award dated 24.01.2024 and the additional award dated 28.03.2024, together with the rival computation statements filed by the parties.

2.2 The original award quantified: (i) unpaid rent, (ii) unpaid mesne profits, (iii) interest @ 10% per annum on those sums from 01.07.2021 until the date of the award, (iv) unpaid Service Tax/GST, (v) costs of arbitration, and (vi) future interest @ 12% per annum in the event of non-payment within four weeks from the date of the award.

2.3 The additional award only corrected a typographical error in paragraph 16 of the original award and did not alter the operative directions.

2.4 Comparing the rival calculations, the Court found that the Award Debtor's computation correctly implemented the award, especially regarding the period of liability for future interest.

2.5 The Court held that future interest @ 12% per annum is payable only from the date of the additional award, i.e., 29.03.2024, until the date of payment of the principal sum, i.e., 23.07.2025, and not beyond.

Conclusion

2.6 The computation furnished by the Award Debtor was accepted as correctly reflecting the directions in the arbitral award and additional award, including the period for which future interest @ 12% per annum is payable.

Issue 2: Legality of TDS deduction from arbitral award sums and obligation to refund

Legal framework

2.7 The Court referred to the settled legal principle that no tax is deductible at source from amounts payable under a decree or an arbitral award unless such deduction is expressly authorised by statute.

Interpretation and reasoning

2.8 It was admitted that the Award Debtor deducted TDS of Rs. 54,06,844/- and Rs. 8,56,800/- from payments made towards the decretal sum and deposited the same with the Income Tax Department.

2.9 Applying the above legal principle, the Court held that such deduction of TDS from sums payable under the arbitral award was erroneous, as there was no statutory authority permitting such deduction in the circumstances.

Conclusion

2.10 The Award Debtor is under an obligation to refund to the Award Holder the TDS amounts of Rs. 54,06,844/- and Rs. 8,56,800/-, without interest, within four weeks.

2.11 The Award Debtor is at liberty to approach the Income Tax Authorities to seek refund/recovery of the amounts deposited with them, in accordance with law and applicable principles.

Issue 3: Entitlement to interest on the TDS component

Interpretation and reasoning

2.12 The Award Holder claimed interest on the TDS component on the footing that the decretal amount stood reduced by the deduction.

2.13 The Court noted that the deduction of TDS was a bona fide mistake by the Award Debtor, made while releasing the decretal amount, despite the legal position that no TDS is deductible from arbitral award sums.

2.14 It was undisputed that the deducted amounts were deposited with the Income Tax Department, in compliance with statutory requirements, and were not retained by the Award Debtor, who derived no benefit therefrom.

2.15 The Court held that imposing an interest burden on the Award Debtor in such circumstances would be inequitable and inappropriate, as it would penalise a bona fide procedural error when the money is already lying with statutory authorities.

2.16 The Court further held that directing payment of interest on the TDS component would be contrary to principles of equity, fairness, and restitution, since the Award Debtor had not enjoyed or utilised the deducted sums.

Conclusion

2.17 The claim for interest on the TDS component was rejected. The Award Debtor is required only to refund the TDS amounts to the Award Holder, without any interest.

2.18 With these directions, the execution proceedings were disposed of.