Issues: (i) Whether the digital KYC, e-KYC and V-CIP framework, as implemented by regulated entities, must be made accessible to persons with disabilities through reasonable accommodation and alternative modes of verification; (ii) Whether the respondents were required to issue or modify guidelines, directions and accessibility standards to ensure inclusive onboarding, verification and service access for persons with blindness, low vision and facial disfigurement.

Issue (i): Whether the digital KYC, e-KYC and V-CIP framework, as implemented by regulated entities, must be made accessible to persons with disabilities through reasonable accommodation and alternative modes of verification.

Analysis: The governing constitutional and statutory framework recognises equality, dignity, non-discrimination, accessibility and reasonable accommodation as enforceable obligations. The rights of persons with disabilities extend to access to financial, telecom and other essential services, and digital systems cannot be designed or implemented in a manner that excludes persons with blindness, low vision or facial disfigurement. A verification regime that depends on inaccessible visual or facial tasks, without suitable alternatives, creates barriers inconsistent with the disability rights framework and the guarantee of life with dignity.

Conclusion: The issue is answered in favour of the petitioners. Digital KYC processes must admit accessible alternatives and reasonable accommodations.

Issue (ii): Whether the respondents were required to issue or modify guidelines, directions and accessibility standards to ensure inclusive onboarding, verification and service access for persons with blindness, low vision and facial disfigurement.

Analysis: The Court found that the existing regulatory framework already contains the seeds of accessibility, but its implementation required stronger and more explicit directions. Regulated entities must follow accessibility standards, undergo accessibility audits, accommodate assistive methods, accept alternative forms of signature or thumb impression, and ensure that customer due diligence is not defeated by inaccessible design. The respondents' regulatory powers and statutory duties justified issuance of concrete directions to align digital KYC practices with accessibility obligations and to prevent exclusion from essential services.

Conclusion: The issue is answered in favour of the petitioners. The respondents were directed to issue and implement accessibility-oriented guidelines and modifications.

Final Conclusion: The writ petitions were allowed in substance by issuing binding directions to make digital KYC and related verification systems accessible, inclusive and compliant with disability rights norms.

Ratio Decidendi: Accessibility and reasonable accommodation are integral components of the right to equality and the right to life with dignity, and digital verification systems used for essential services must be designed and regulated so as not to exclude persons with disabilities.

ISSUES PRESENTED AND CONSIDERED

1. Whether the Court should direct an on-site verification of specific units allegedly delivered to purchasers and examine habitability, utility availability, existence of Occupation/Completion Certificates, and actual possession.

2. Whether officers nominated by the State Industrial Development Authority should act as officers of the Court for the purpose of inspection and reporting.

3. Whether the Authority should investigate and report on the feasibility and mechanism for execution of Tripartite Agreements among the petitioner, purchasers and the Authority, and indicate amounts, if any, payable by the petitioner to the Authority in respect of specified units.

4. Whether the petitioner must file documentary proof of refund having been paid to certain purchasers who allegedly accepted refunds in full and final settlement.

5. Whether the petitioner must file an affidavit updating the status of settlements with the remaining investors (from the total list), and the timeline for such filing.

6. Whether prospective purchasers/allottees should be permitted to be present during inspection and whether the petitioner should respond to an allottee's suggestion of settlement by refund or taking possession.

ISSUE-WISE DETAILED ANALYSIS

Issue 1 - Directing on-site verification of units (habitability, utilities, certificates, possession)

Legal framework: The Court directed fact-finding on specific aspects relating to 33 named units identified by the petitioner (serial numbers specified in annexure pages) by nominating officers to inspect the premises and verify documentary proof produced by the petitioner.

Precedent Treatment: No precedents were cited or relied upon in the order; the direction is an exercise of the Court's case-management and supervisory authority to ascertain factual circumstances.

Interpretation and reasoning: The Court ordered the Authority's nominated senior officers to visit the buildings on a fixed date/time with the petitioner's representative and produce documents such as Occupation/Completion Certificates, agreements and proof of delivery of possession. The inspection is directed to determine (a) habitability of the specific units, (b) presence of electricity and water supply, (c) existence of Occupation/Completion Certificates for the units, and (d) whether possession has in fact been handed over and to whom.

Ratio vs. Obiter: Ratio - the direction to conduct an on-site verification and specify the factual points for inquiry is an operative instruction essential to the Court's determination of settlement/possession disputes in the matter.

Conclusions: The officers must verify the listed factual aspects and submit a report to the Court by the prescribed date; the petitioner must produce and make available all relevant documents during inspection.

Issue 2 - Status of nominated officers as officers of the Court

Legal framework: The Court declared that officers nominated by the Authority will act as officers of the Court for the purpose of the inspection and report.

Precedent Treatment: No prior authority referenced; the declaration is an administrative judicial direction to ensure impartiality and court oversight.

Interpretation and reasoning: To ensure that the inspection is conducted under the Court's supervision and with an obligation of independence, officers nominated by the Authority are to act as officers of the Court rather than as mere Authority functionaries.

Ratio vs. Obiter: Ratio - this is an operative determination affecting the legal status and accountability of the inspecting officers and the admissibility/weight of their report.

Conclusions: Nominated officers will perform duties as officers of the Court; identified purchasers may be permitted to be present during inspection.

Issue 3 - Authority's duty to report on Tripartite Agreements and amounts payable

Legal framework: The Court required the Authority to file an affidavit/report stating whether it can execute Tripartite Agreements involving the petitioner, purchasers and the Authority, the manner of execution, and to indicate any amounts payable by the petitioner to the Authority in respect of the listed units.

Precedent Treatment: No precedential discussion; the order operationalizes verification and settlement logistics within the Court's supervision.

Interpretation and reasoning: The Court seeks not only fact-finding as to physical delivery and documentation but also administrative clarity on how formal transfer/settlement can be achieved through Tripartite Agreements and whether any financial obligations to the Authority remain, to enable final resolution for purchasers.

Ratio vs. Obiter: Ratio - directive is essential to enable implementation of settlement or handover and to remove barriers to registration/possession.

Conclusions: Authority must file a report addressing feasibility and mechanism for Tripartite Agreements and provide details of any sums payable by the petitioner by the specified date.

Issue 4 - Requirement of documentary proof of refund to certain purchasers

Legal framework: The Court directed the petitioner to file affidavits/documents demonstrating that specified persons (serial nos. 1-8 on annexure pages) have taken refunds in full and final settlement.

Precedent Treatment: Not addressed; the requirement is fact-specific and necessary to determine who remains aggrieved and who has been compensated.

Interpretation and reasoning: The Court distinguished between purchasers who allegedly received possession and those who allegedly received refund; documentary proof of refund is necessary to exclude refunded purchasers from further relief and to finalize accounts.

Ratio vs. Obiter: Ratio - operative requirement to establish finality of settlement for those purchasers and to narrow the scope of outstanding disputes.

Conclusions: Petitioner to file the specified affidavit proving refunds by the stated date; absence of such proof will leave those purchasers within the scope of pending relief.

Issue 5 - Filing affidavit about remaining investors and timeline

Legal framework: The Court noted an earlier reference to disputes with 103 investors and that only 41 had been addressed; it directed the petitioner to file an affidavit on progress in settlement with the remaining 62 investors by a fixed date.

Precedent Treatment: No precedent cited; procedural case-management decision to monitor progress.

Interpretation and reasoning: To ensure comprehensive resolution and Court oversight, the petitioner must report on settlements with all investors; this avoids piecemeal adjudication and promotes structured compliance with the Court's process.

Ratio vs. Obiter: Ratio - mandatory procedural direction for case management and final resolution of outstanding investor disputes.

Conclusions: Petitioner to file the affidavit regarding the remaining 62 investors by the prescribed date for consideration by the Court.

Issue 6 - Presence of allottees during inspection and petitioner's response to a purchaser's settlement option

Legal framework: The Court permitted named purchasers to be present during inspection and required the petitioner to respond to a purchaser's indication of willingness to settle either by refund or by taking possession.

Precedent Treatment: Not discussed; the direction is practical and transparency-oriented.

Interpretation and reasoning: Allowing purchasers to be present ensures transparency and that inspection findings of habitability/possession are open to those directly affected; the petitioner must address expressed settlement preferences to facilitate resolution.

Ratio vs. Obiter: Ratio - operative for the conduct of inspection and subsequent consideration of settlement proposals.

Conclusions: Purchasers named may attend inspection; the petitioner must state its position regarding any allottee's proposal to accept refund or take possession, as part of the ongoing settlement process.

Issues: Whether the High Court, in exercise of supervisory jurisdiction under Article 227 of the Constitution of India, could reject a plaint when the Civil Procedure Code, 1908 provides a specific mechanism under Order VII Rule 11 and a consequential appeal under Section 96.

Analysis: The supervisory power under Article 227 is meant to keep subordinate courts within jurisdictional bounds and cannot be used to assume original jurisdiction or bypass the statutory scheme of the Civil Procedure Code, 1908. Rejection of a plaint is specifically regulated by Order VII Rule 11 and such rejection operates as a deemed decree, attracting an appeal under Section 96. If the High Court itself rejects the plaint in supervisory jurisdiction, it displaces the trial court's original function and deprives the litigant of the appellate remedy that would otherwise follow. The principle was applied to hold that the High Court could not short-circuit the procedure by directly entertaining a prayer for rejection of plaint under Article 227.

Conclusion: The High Court lacked jurisdiction to reject the plaint in exercise of Article 227 supervisory powers, and the impugned order was unsustainable.

The core legal questions considered by the Court were:

(a) Whether Sections 34(1), 47(1)(a)(i), and 58(1)(a)(i) of the Consumer Protection Act, 2019 (hereinafter, "2019 Act"), which prescribe the pecuniary jurisdiction of the district, state, and national consumer commissions based on the value of goods or services paid as consideration rather than the compensation claimed, are constitutionally valid.

(b) Whether the shift from compensation claimed to consideration paid as the basis for pecuniary jurisdiction results in discrimination or arbitrariness violative of Article 14 of the Constitution.

(c) Whether the Parliament has legislative competence to prescribe pecuniary jurisdiction in this manner.

(d) Whether the new pecuniary jurisdictional scheme causes loss of judicial remedy or impairs access to justice for consumers.

(e) The need for and role of performance audit of the 2019 Act, including the functioning of the Central Consumer Protection Council and Central Consumer Protection Authority established under the Act.

2. ISSUE-WISE DETAILED ANALYSIS

(a) Legislative Competence to Prescribe Pecuniary Jurisdiction

The Court examined the constitutional and legislative framework underpinning the power of Parliament to enact laws prescribing jurisdiction and pecuniary limits of courts and tribunals. The relevant entries under the Union List (List I) and Concurrent List (List III) were considered, including Entry 95 of List I (jurisdiction and powers of courts except the Supreme Court) and Entries 11-A and 46 of List III (administration of justice and jurisdiction of courts).

The Court relied on authoritative precedent establishing that legislative competence to organize courts and prescribe their jurisdiction necessarily includes the power to set pecuniary thresholds. The judgment cited a foundational case wherein it was held that legislation on administration of justice would be ineffective without defining jurisdiction and powers of courts, including monetary limits.

Further, the Court referred to various statutes such as the Recovery of Debts and Bankruptcy Act, Insolvency and Bankruptcy Code, and Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, which prescribe monetary thresholds for applicability, underscoring that such legislative classification is well within Parliament's competence.

Conclusion: Parliament possesses clear legislative competence to prescribe pecuniary jurisdiction of consumer commissions based on value of goods or services paid as consideration.

(b) Validity of Classification Based on Consideration Paid vis-`a-vis Article 14

The Court examined whether the classification introduced by the 2019 Act-using the value of goods or services paid as consideration to determine pecuniary jurisdiction-is discriminatory or arbitrary under Article 14.

The Court applied the twin test from established jurisprudence: (1) the classification must be founded on an intelligible differentia distinguishing the grouped subjects, and (2) the differentia must have a rational nexus to the legislative objective.

The Court held that "consideration" is an essential element of contract formation and integral to the definition of "consumer" under Section 2(7) of the 2019 Act. Since every consumer transaction involves consideration, basing jurisdiction on the value of consideration paid is a valid and intelligible classification.

This classification has a rational nexus to the object of the Act, which is to provide timely and effective administration and settlement of consumer disputes. The Court noted that basing jurisdiction on compensation claimed previously led to inflated claims and disproportionate burden on higher commissions, whereas basing it on consideration paid creates a more predictable and administrable framework.

The Court rejected the argument that the classification arbitrarily restricts access to higher forums based on consideration paid, emphasizing that the relief or compensation claim itself remains unrestricted and courts retain power to assess over- or undervaluation of claims to prevent abuse of process.

Conclusion: Sections 34, 47, and 58 prescribing pecuniary jurisdiction based on consideration paid are constitutionally valid and not violative of Article 14.

(c) Impact on Access to Justice and Loss of Remedy

The petitioners contended that the new pecuniary jurisdictional scheme results in anomalous situations where a consumer claiming large compensation but having paid lesser consideration must approach a lower forum, potentially impairing access to justice.

The Court held that there is no absolute right to choose a forum based on compensation claimed. The jurisdictional limits are designed to prevent forum shopping and inflated claims. The courts and commissions have inherent jurisdiction to control abuse of process by reassessing claims.

Therefore, the classification does not cause loss of remedy or access to justice but streamlines the consumer dispute redressal mechanism.

(d) Performance Audit of the 2019 Act and Functioning of Statutory Authorities

The Court acknowledged concerns raised about the practical impact of the new pecuniary jurisdiction scheme, especially in cases like insurance claims where premiums paid rarely exceed Rs. 1 crore, potentially restricting access to national commissions.

The Court emphasized that such concerns relate to the working and impact of the statute rather than its constitutionality. It underscored the importance of performance audit as an integral part of the rule of law, requiring the executive to continuously monitor and assess the effectiveness of legislation.

In this context, the Court highlighted the statutory establishment of two key bodies under the 2019 Act:

• The Central Consumer Protection Council (Section 3), an advisory body comprising government officials, members of parliament, consumer representatives, and experts, tasked with advising on promotion and protection of consumer rights.
• The Central Consumer Protection Authority (Section 10), an executive agency empowered to regulate violations of consumer rights, unfair trade practices, and misleading advertisements, and to promote consumer welfare.

The Court detailed the composition, powers, and functions of these bodies, including their regulatory and advisory roles, and the rules and regulations framed thereunder.

The Court stressed the constitutional duty of the executive to ensure these bodies function effectively, efficiently, transparently, and with accountability to achieve the statute's objectives. It recognized judicial review's role in institutionalizing these authorities to ensure their proper constitution and functioning.

The Court observed that vibrant and coordinated functioning of the Council and Authority is essential to subserve the consumer protection regime and reduce unnecessary litigation.

3. SIGNIFICANT HOLDINGS

"Parliament has the legislative competence to prescribe jurisdiction and powers of courts. This power extends to prescribing different monetary values as the basis for exercising jurisdiction."

"Classification based on value of goods or services on the basis of the amount paid as consideration is valid. 'Consideration' is an integral part of forming any contract. It is also an integral part of the definition of a 'consumer'."

"Vesting jurisdiction in the district, state or national commission on the basis of value of goods or services paid as 'consideration', is neither illegal nor discriminatory."

"There is no right or a privilege of a consumer to raise an unlimited claim of compensation and thereby choose a forum of his choice for instituting a complaint."

"The relief or compensation that a consumer could claim remains unrestricted and at the same time, access to the state or the national commission is also not taken away."

"Assessing the working of the statute to realise if its purpose and objective are being achieved or not is the implied duty of the executive government. Reviewing and assessing the implementation of a statute is an integral part of Rule of Law."

"The Central Consumer Protection Council and the Central Consumer Protection Authority being statutory authorities having clear purpose and objects and vested with powers and functions must act effectively and in complete coordination to achieve the preambular object of the statute to protect the interest of consumers."

Final determination: The constitutional challenge to Sections 34, 47, and 58 of the Consumer Protection Act, 2019 is dismissed. These provisions are upheld as constitutional, neither violative of Article 14 nor manifestly arbitrary. The statutory bodies under the Act are directed to perform their functions effectively to ensure the statute's objectives are met.

Issues: Whether the plaint could be rejected under Order VII Rule 11(d) of the Code of Civil Procedure, 1908 on the ground that the suit for declaration and consequential reliefs was barred by limitation, and whether the High Court was justified in interfering in revision with the trial court's refusal to reject the plaint.

Analysis: Article 59 of the Limitation Act, 1963 governs suits for cancellation of instruments and the period runs from the date when the plaintiff first had knowledge of the facts entitling him to relief. Where the plaint specifically pleads a later date of knowledge and sets out a cause of action founded on fraud or unauthorised execution, the question whether such knowledge existed earlier cannot be decided merely from the defendant's version. At the stage of Order VII Rule 11(d), the plaint must be read as a whole and its averments taken at face value; the defence in the written statement or in the application cannot be used to non-suit the plaintiff. Limitation, in such a situation, becomes a mixed question of law and fact requiring evidence. Revisional interference is unwarranted unless the trial court's view suffers from jurisdictional error or perversity.

Conclusion: The plaint could not be rejected at the threshold on limitation, and the trial court was right in refusing to reject it.

Final Conclusion: The impugned revisional order was set aside, the trial court's order was restored, and the suit was directed to proceed to trial on merits.

Ratio Decidendi: When the plaint asserts a specific date of knowledge as the foundation of limitation, the issue cannot ordinarily be decided under Order VII Rule 11(d) without evidence, because limitation in such cases is a mixed question of law and fact and the plaint must be accepted as pleaded at the threshold.

Issues: Whether the applicant made out a case for regular bail under Section 21(4) of the Maharashtra Control of Organised Crime Act, 1999 in the absence of material showing a live nexus with the alleged syndicate after 2016 and in light of the prosecution material relied upon.

Analysis: The application was considered on the basis of the alleged confessional statements, the applicant's limited involvement in two older FIRs, and the prosecution's claim that he was a member of an organised crime syndicate. The material on record did not show any public witness, CDR, recovery of illegal wealth, or other independent evidence connecting the applicant with the alleged syndicate after 2016. The applicant's own statement was treated as exculpatory to the extent that it denied continued association with the main accused after 2016. The Court also took note of the arrest memo, which recorded that he was not dangerous, not generally armed, not known to operate with accomplices, and not likely to abscond or threaten witnesses. Applying the governing approach under Section 21(4), the Court assessed the matter on broad probabilities and considered whether the prosecution material disclosed sufficient prima facie culpability and likelihood of reoffending under the Act.

Conclusion: The applicant satisfied the requirements of Section 21(4) and was held entitled to bail.

Final Conclusion: Regular bail was granted on terms, and the bail application was disposed of accordingly.

Ratio Decidendi: For bail under Section 21(4) of the Maharashtra Control of Organised Crime Act, 1999, the Court must assess broad probabilities and prima facie nexus with the alleged organised crime, and where the record does not show a live connection, independent corroboration, or material indicating likely offending on bail, release may be granted.

Issues: (i) Whether the quashing of the FIR against the respondents was justified when the complaint, if taken at face value, disclosed cognizable offences; (ii) whether delay in lodging the complaint/FIR could justify quashing in the facts of the case; (iii) whether the pendency of civil proceedings and cross-FIRs warranted interference with investigation.

Issue (i): Whether the quashing of the FIR against the respondents was justified when the complaint, if taken at face value, disclosed cognizable offences.

Analysis: In considering a quashing petition, the allegations in the complaint must be assumed to be true at the threshold. The material showed that the receipt-cum-agreement to sell was not to be treated as a mere oral arrangement, and the allegations were that the respondents, with knowledge of the true state of affairs, allowed a false representation as to authority and title to be made, thereby inducing payment of money. The allegations were not confined to the respondents signing as witnesses; rather, they concerned their participation in the alleged misrepresentation and conspiracy from the inception.

Conclusion: The quashing of the FIR was not justified, and the allegations disclosed a prima facie cognizable case against the respondents.

Issue (ii): Whether delay in lodging the complaint/FIR could justify quashing in the facts of the case.

Analysis: Delay by itself is not a ground to stifle a criminal investigation, especially where the alleged offence is said to have been discovered only upon later disclosure of relevant facts. The complaint was filed after the applicant claims to have learned of the decisive facts, and the plea of limitation depended on when the offence came to knowledge. For offences carrying punishment of more than three years, limitation was not available as a ground to defeat the prosecution at the threshold.

Conclusion: Delay did not warrant quashing of the FIR.

Issue (iii): Whether the pendency of civil proceedings and cross-FIRs warranted interference with investigation.

Analysis: Civil and criminal remedies may proceed simultaneously, and the existence of a civil suit did not bar investigation into alleged cheating and forgery. The presence of cross-FIRs also required a comprehensive investigation so that the truth of the competing versions could be ascertained. The investigation was at a stage where it should not have been curtailed prematurely.

Conclusion: Neither the pending civil proceedings nor the cross-FIRs justified quashing; investigation ought to continue.

Final Conclusion: The order quashing the FIR was set aside and the criminal proceeding was revived for investigation, leaving the merits of the allegations to be examined in accordance with law.

Ratio Decidendi: In a quashing petition, if the complaint on its face discloses a prima facie cognizable offence and alleges deceit or conspiracy from the inception, the FIR should not be quashed merely because civil proceedings are pending or because there is delay in disclosure of the offence.

Issues: (i) Whether major married and earning children of the deceased, as legal representatives, can seek compensation under the Motor Vehicles Act irrespective of their dependency on the deceased. (ii) Whether the compensation required re-computation by adding future prospects and conventional heads such as filial consortium, loss of estate, and funeral expenses.

Issue (i): Whether major married and earning children of the deceased, as legal representatives, can seek compensation under the Motor Vehicles Act irrespective of their dependency on the deceased.

Analysis: The legal position was treated as settled that the legal representatives of a deceased victim have a right to apply for compensation. The Court preferred the later exposition that major married and earning sons and daughters, if they are legal representatives, are not excluded merely because they were earning or residing separately. The earlier view treating independent siblings as non-dependents was held not to govern the present controversy in the face of the subsequent reaffirmation of the broader entitlement to apply for compensation.

Conclusion: The right to apply for compensation was held to be available to the major married and earning children as legal representatives, irrespective of dependency status.

Issue (ii): Whether the compensation required re-computation by adding future prospects and conventional heads such as filial consortium, loss of estate, and funeral expenses.

Analysis: The Tribunal had computed compensation on the basis of the then-applicable multiplier method but had not taken future prospects into account. The Court applied the principles governing fair compensation and added future prospects to the proven income, then applied the appropriate multiplier and deductions. It further added filial consortium for the two claimants and amounts under loss of estate and funeral expenses, thereby reassessing the compensation on a fuller and more just basis.

Conclusion: The compensation was re-determined upwards by including future prospects and the permissible conventional heads.

Final Conclusion: The challenge to the award failed and the reassessed compensation, with interest and joint and several liability, was sustained in favour of the claimants.

Ratio Decidendi: Legal representatives of a deceased victim, including major married and earning children, are entitled to seek compensation, and just compensation must be assessed by including future prospects and appropriate conventional heads wherever applicable.

Issues: Whether a complaint under Sections 138, 141 and 142 of the Negotiable Instruments Act, 1881 was maintainable against an individual partner alone without impleading the partnership firm, and whether, after the death of the sole accused and abatement of the complaint, the firm and another partner could be summoned under Section 319 of the Code of Criminal Procedure, 1973 in the absence of specific allegations of liability or day-to-day control.

Analysis: The cheques were issued in the name of the firm and the legal notice was addressed to the firm as well as the deceased partner, but the complaint was instituted only against the deceased partner. Liability of partners for acts of the firm could arise only when the firm itself was arraigned as an accused. In a prosecution under Section 141 of the Negotiable Instruments Act, 1881, the firm is the principal offender and vicarious liability of partners is attracted only when the foundational requirement of impleading the firm is satisfied. The complaint was therefore defective at inception. The later attempt to implead the firm and another partner under Section 319 of the Code of Criminal Procedure, 1973 could not cure that defect after the complaint had already abated. Further, there were no specific averments that the proposed accused was in charge of or responsible for the conduct of the business of the firm, or that the cheques were issued by him or under his control.

Conclusion: The complaint was not maintainable against the partner alone, and the application to summon the firm and the other partner under Section 319 of the Code of Criminal Procedure, 1973 was rightly rejected.

1. Whether the sanctity of the auction conducted under the SARFAESI Act, 2002 was breached by the High Court in entertaining a higher bid after GBJ Hotels had emerged as the successful auction purchaser.

2. Whether the High Court was justified in permitting GRT Hotels to improve its bid and ultimately be declared the successful bidder, thereby setting aside the earlier auction result.

3. The quantum and entitlement to interest payable by Edelweiss Asset Reconstruction Company Limited (Edelweiss ARCL) to GBJ Hotels on the refundable deposit amount of Rs. 27 crore.

4. The procedural and substantive correctness of the sale process, including the issuance of the sale certificate and delivery of possession to the successful bidder.

5. The extent to which the Court should examine the quantum of debt claimed by Edelweiss ARCL vis-`a-vis the sale price realized through bidding.

Issue-wise Detailed Analysis

Issue 1 and 2: Sanctity of Auction under SARFAESI Act and High Court's Intervention to Allow Higher Bid

The relevant legal framework includes the SARFAESI Act, 2002, which governs the enforcement of security interests by secured creditors and prescribes the procedure for sale of secured assets through auction. The Act aims to provide a speedy and efficient mechanism for recovery of debts by secured creditors.

The Court noted that GBJ Hotels was declared the successful bidder in the auction conducted by Edelweiss ARCL for Rs. 108 crore. However, during the pendency of the writ petition before the High Court, the respondents informed the Court of a third party (GRT Hotels) willing to pay Rs. 120 crore, which was higher than the auction price. The High Court, exercising its discretion, directed deposit of the higher amount and allowed GBJ Hotels an opportunity to improve its bid.

The Court observed that the High Court's intervention was premised on the principle that "better the price, better it is for the creditor," reflecting the objective of maximizing recovery under the SARFAESI Act. The Court exercised its inherent power to invite sealed bids to fetch the best offer for the secured asset, given that the asset's value was reportedly higher than the initial auction price.

While GBJ Hotels contended that the sanctity of the auction was breached by reopening the bidding process, the Court held that the auction process under SARFAESI is not sacrosanct and can be revisited in exceptional circumstances to protect the interests of the secured creditor and ensure maximization of recovery. The Court emphasized that the best available offer was accepted after a transparent process of sealed bidding, thereby upholding the principles of fairness and equity.

The Court did not find any legal infirmity in the High Court's order allowing GRT Hotels to improve its bid and ultimately be declared the successful bidder at Rs. 153 crore, which was substantially higher than the original bid of Rs. 108 crore by GBJ Hotels.

Issue 3: Interest Payable by Edelweiss ARCL to GBJ Hotels on Refundable Deposit

The deposit of Rs. 27 crore was returned by Edelweiss ARCL to GBJ Hotels after GRT Hotels was declared the successful bidder. The question arose as to the rate of interest payable on this refundable amount.

The Court, exercising its discretion, awarded interest at the rate of 18% per annum on Rs. 10.80 crore from 18.05.2024 to 18.03.2025 and on Rs. 16.20 crore from 23.05.2025 to 18.03.2025. The Court directed that the interest amount be paid within seven days.

The Court accepted the submission of Edelweiss ARCL's counsel, who left the rate of interest to the Court's discretion, and fixed the rate at a commercially reasonable level to compensate GBJ Hotels for the use of its funds during the period of deposit.

Issue 4: Procedural and Substantive Correctness of Sale Process and Delivery of Possession

The Court noted that the sale certificate had been issued in favor of GRT Hotels by Edelweiss ARCL. It directed Edelweiss ARCL to take all necessary steps for delivery of peaceful and vacant possession of the secured asset to GRT Hotels within one month in accordance with law.

The Court clarified that all other questions except the confirmation of sale were left open for the parties to agitate before appropriate forums, thus limiting its intervention to confirming the sale and ensuring compliance with procedural requirements for possession delivery.

Issue 5: Examination of Quantum of Debt Claimed by Edelweiss ARCL

Edelweiss ARCL filed an affidavit claiming the outstanding debt to be approximately Rs. 186 crore, which exceeded the highest bid of Rs. 153 crore by GRT Hotels. Objections were raised regarding the adequacy of the sale price relative to the debt.

The Court expressly refrained from examining the quantum of debt or the adequacy of the sale price, holding that its role was limited to ensuring a fair sale process and accepting the best available offer. The Court left all questions relating to debt quantum and recovery to be agitated by the parties before appropriate forums in accordance with law.

Significant Holdings

"The best available offer has been accepted. We are only tasked today to determine the rate of interest payable by Edelweiss ARCL to GBJ Hotels on the sum of Rs.27 crore which has been returned to the latter by the former and to also pass consequential directions with regard to declaration of GRT Hotels as the successful bidder."

"The auction process under the SARFAESI Act is not sacrosanct and can be revisited in exceptional circumstances to protect the interests of the secured creditor and ensure maximization of recovery."

"Better the price, better it is for the creditor."

"Sale certificate having been issued, steps for delivery of peaceful and vacant possession of the assets ... shall be taken by Edelweiss ARCL in accordance with law within a month from date."

"All questions, except the sale which stands confirmed, are left open for the parties to agitate before an appropriate forum in accordance with law, if so advised."

The Court confirmed the sale in favor of GRT Hotels at Rs. 153 crore, setting aside the earlier auction result in favor of GBJ Hotels, on the ground of maximizing recovery for the secured creditor. It awarded interest at 18% per annum on the refundable deposit to GBJ Hotels and directed compliance with procedural steps for possession delivery. The Court declined to delve into the quantum of debt or adequacy of price beyond the sale confirmation, leaving such issues open for future adjudication.

Issues: Whether the High Court was justified in setting aside the arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996 and in restoring the deduction of liquidated damages for delayed performance of the construction contract.

Analysis: The arbitral tribunal had examined the contractual clauses governing liquidated damages, extension of time, and the consequences of delay, and had found that the contractor failed to complete the work within the extended period while the employer had repeatedly reserved its right to levy liquidated damages. The Court reiterated that Section 34 of the Arbitration and Conciliation Act, 1996 permits interference only on the limited grounds specified in that provision and does not authorise a reappreciation of evidence or substitution of another possible interpretation of the contract. The view taken by the arbitral tribunal was held to be a plausible view on the material before it. The learned Single Judge had exceeded the limited jurisdiction under Section 34 by re-evaluating the contractual effect of extension of time and by setting aside the award on grounds outside the statutory parameters.

Conclusion: The High Court's Division Bench was correct in restoring the arbitral award, and the challenge to the deduction of liquidated damages failed.

Issues: Whether an accused must be given an opportunity of hearing under the first proviso to Section 223(1) of the Bharatiya Nagarik Suraksha Sanhita, 2023 before cognizance is taken of a complaint for dishonour of cheque under Section 138 of the Negotiable Instruments Act, 1881.

Analysis: The Negotiable Instruments Act, 1881 prescribes a distinct and special regime for cheque-dishonour complaints, including written-complaint requirements, summary trial, expeditious disposal, service of summons and affidavit evidence. Section 5 of the Bharatiya Nagarik Suraksha Sanhita, 2023 preserves special laws unless a contrary provision is made. The pre-cognizance hearing requirement in the first proviso to Section 223(1) of that Code is therefore inapplicable to proceedings under Section 138, which are governed by the special procedure under the Negotiable Instruments Act, 1881.

Conclusion: An accused is not entitled to a pre-cognizance opportunity of hearing under the first proviso to Section 223(1) of the Bharatiya Nagarik Suraksha Sanhita, 2023 in a complaint under Section 138 of the Negotiable Instruments Act, 1881.

Ratio Decidendi: A special statutory procedure governing cheque-dishonour complaints prevails over the general pre-cognizance hearing requirement under the Bharatiya Nagarik Suraksha Sanhita, 2023.

ISSUES:

Whether a Magistrate can take cognizance of an offence under the BNSS, 2023 without giving the accused an opportunity of being heard as mandated by proviso (i) to Section 223 of BNSS'What is the correct procedural sequence for taking cognizance of an offence under Section 223 of BNSS, 2023'Whether a summoning order passed without compliance with the opportunity of hearing under Section 223 proviso (i) of BNSS is sustainable?

RULINGS / HOLDINGS:

The Court held that "no cognizance of an offence shall be taken by the Magistrate without giving the accused an opportunity of being heard" as per proviso (i) to Section 223 of BNSS, 2023, and therefore, the summoning order passed without such opportunity is liable to be set aside.The procedural sequence under Section 223 requires that upon presentation of a complaint, the Magistrate must first examine the complainant and witnesses on oath, reduce the substance to writing, and then issue notice to the accused attaching the complaint and sworn statements, thereby giving the accused an opportunity to be heard before taking cognizance.The summoning order dated 28.08.2024 was quashed and the matter was remitted back to the trial court to pass a fresh order strictly in accordance with the procedural requirements of Section 223 proviso (i) of BNSS, 2023.

RATIONALE:

The Court relied on the statutory framework of Section 223 of BNSS, 2023, which explicitly mandates examination of the complainant and witnesses on oath and requires that no cognizance be taken without giving the accused an opportunity of being heard.The Court referred to precedents including a coordinate bench decision and the Karnataka High Court judgment, which clarified the interpretation of Section 223, emphasizing that notice to the accused and opportunity to be heard must follow the recording of sworn statements before cognizance is taken.The Court identified a procedural aberration in the earlier practice of issuing notice immediately upon filing the complaint without recording sworn statements, which was held to be contrary to the statutory mandate.The decision represents a doctrinal clarification ensuring strict adherence to the procedural safeguards introduced by BNSS, 2023, reinforcing the accused's right to be heard prior to cognizance.

Issues: (i) Whether the bidder complied with the tender condition requiring submission of the income tax return of the previous financial year; (ii) Whether the bidder complied with the tender condition requiring a GST no-dues certificate and whether the High Court was justified in interfering with the tender award.

Issue (i): Whether the bidder complied with the tender condition requiring submission of the income tax return of the previous financial year.

Analysis: The bid condition was intended to assess the financial capacity of the bidder. The bidder had submitted the available return along with an explanation supported by the chartered accountant and the applicable due dates under Section 44AB of the Income-tax Act, 1961. On the material placed, the return furnished was treated as sufficient compliance with the tender requirement and was not a disqualifying defect.

Conclusion: The condition was complied with and the objection against the bidder on this score was unsustainable.

Issue (ii): Whether the bidder complied with the tender condition requiring a GST no-dues certificate and whether the High Court was justified in interfering with the tender award.

Analysis: The bidder produced a certificate from the GST jurisdictional officer showing no outstanding dues, and the attached rider did not destroy its efficacy. The rival bidder had not produced an equivalent certificate and had relied only on a portal screenshot. The tender authorities had duly examined the documents, found compliance, and awarded the lease on the basis of the highest bid. In a matter governed by tender conditions and judicial review, interference was unwarranted when the administrative decision was neither arbitrary nor illegal.

Conclusion: The GST condition was complied with by the bidder, and the High Court should not have interfered with the award of tender.

Final Conclusion: The tender authorities' decision was upheld, and the High Court's interference was held to be erroneous.

Ratio Decidendi: Where a bidder has made substantial compliance with the tender requirements and the tendering authority has reasonably satisfied itself on eligibility, judicial review will not displace the administrative decision absent arbitrariness or illegality.

Issues: (i) Whether an administrative declaration of fraud under the RBI Master Directions can be treated as the legal basis for quashing FIRs and criminal proceedings. (ii) Whether violation of the audi alteram partem rule in the administrative process necessarily nullifies the consequential criminal proceedings and bars fresh action.

Issue (i): Whether an administrative declaration of fraud under the RBI Master Directions can be treated as the legal basis for quashing FIRs and criminal proceedings.

Analysis: The administrative and criminal spheres operate on different footings. Classification of an account as fraudulent is an administrative exercise undertaken by the bank and RBI framework, whereas registration of an FIR depends on the existence of a cognizable offence and is an act within the criminal law domain. The mere fact that the underlying facts overlap does not mean that a defect in the administrative decision destroys the maintainability of the FIR or the ensuing investigation.

Conclusion: The criminal proceedings could not be quashed merely because the related administrative action was set aside.

Issue (ii): Whether violation of the audi alteram partem rule in the administrative process necessarily nullifies the consequential criminal proceedings and bars fresh action.

Analysis: The principles of natural justice apply to the administrative classification of an account as fraud because that decision carries civil and penal consequences. However, the absence of prior hearing at the administrative stage does not extend to the registration of an FIR, for no pre-FIR hearing is required. Setting aside an administrative order for breach of natural justice does not amount to an adjudication on merits, and the authority may proceed afresh in accordance with law after complying with the required procedure.

Conclusion: The violation of natural justice invalidated only the administrative classification and did not bar fresh administrative action or the criminal process.

Final Conclusion: The impugned judgments were set aside, the matters were remitted for fresh consideration where necessary, and the FIRs and criminal proceedings restored as directed in the respective categories.

Ratio Decidendi: An administrative fraud classification and a criminal investigation are distinct legal processes; therefore, invalidation of the former for breach of natural justice does not automatically vitiate the latter, and no hearing is required before registration of an FIR.

Issues: Whether the respondent committed civil contempt by wilfully disobeying the Court's order directing payment of use and occupation charges and arrears, and whether punishment was warranted.

Analysis: The Court found that the respondent had repeatedly defaulted in making payments, continued to retain possession of the property, and did not comply with the direction to pay monthly charges and arrears despite being given account details and further opportunities. The respondent's plea of financial incapacity was rejected in view of the surrounding conduct, including the attempt to secure interim benefit while not honouring the payment directions. The Court held that the conduct amounted to deliberate and intentional non-compliance, constituting civil contempt under the Contempt of Courts Act, 1971.

Conclusion: The respondent was held guilty of civil contempt and punishment of simple imprisonment for three months with fine was imposed, with a further opportunity to purge the contempt by complying with the earlier payment order within the stipulated time.

Issues: Whether the order taking cognizance was liable to be interfered with for want of detailed reasons and whether the High Court was justified in remanding the matter on that basis.

Analysis: At the stage of taking cognizance and issuing process, the Magistrate is required to examine whether the police papers and case diary disclose a prima facie case and is not bound to record elaborate reasons. The order under challenge recorded that the case diary and case record had been perused and that a prima facie case was made out. Such an order cannot be faulted merely because it is not a detailed or speaking order. The High Court, therefore, erred in setting aside the cognizance order and remitting the matter for fresh consideration on the supposed absence of disclosed prima facie material.

Conclusion: The cognizance order was valid and the High Court's remand was unsustainable.

Ratio Decidendi: At the stage of cognizance or issuance of process, the court must only satisfy itself that the materials disclose a prima facie case, and the order need not contain detailed reasons unless the statute specifically requires them.

Issues: Whether the order rejecting the petitioner's application for refund of excess registration fee, passed without reasons, was sustainable and whether the matter required fresh consideration.

Analysis: The refund application had been rejected in a cryptic manner without assignment of reasons. An order which does not disclose the basis of decision-making cannot be sustained in law, particularly where the authority is called upon to decide a refund claim affecting civil consequences. The defect in the impugned order warranted interference and reconsideration by the competent authority.

Conclusion: The impugned order was quashed and the authority was directed to decide the refund application afresh in accordance with law.

- Whether the moratorium imposed under the Insolvency and Bankruptcy Code (IBC) protects an individual director or personal guarantor from criminal prosecution under Section 138 of the Negotiable Instruments Act, 1881 (N.I. Act) for dishonour of a cheque issued in personal capacity.

- Whether the liquidation of the company relieves the appellant, a director and personal guarantor, from the liability arising under Section 138 of the N.I. Act.

- Whether the appellant was obliged to comply with the High Court's condition to deposit 25% of the cheque amount pending hearing of the revisional application, and consequences of non-compliance.

- Whether the continuation of criminal proceedings under Section 138 of the N.I. Act is permissible despite the moratorium under the IBC.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Impact of IBC Moratorium on Criminal Proceedings under Section 138 of the N.I. Act

Relevant Legal Framework and Precedents: The Insolvency and Bankruptcy Code, 2016, particularly Sections 94, 95, 96, 97 to 119, 100, and 101, provides for moratoriums during insolvency proceedings to protect debtors from legal actions related to debt recovery. Section 96 imposes an interim moratorium on legal proceedings concerning debts. However, the moratorium is not intended to shield individuals from personal criminal liabilities. The Supreme Court decision in Rakesh Bhanot v. Gurdas Agro (P) Ltd. (2025) elucidates that the moratorium under IBC applies only to legal proceedings related to debt recovery and does not extend to penal actions such as prosecution under Section 138 of the N.I. Act.

Court's Interpretation and Reasoning: The Court emphasized that the moratorium under Section 96 IBC is designed to protect corporate debtors from creditor actions related to debt recovery, but it does not cover criminal proceedings. The Court noted that the term "legal action or proceedings" in Section 96 must be read in conjunction with "in respect of any debt," implying that only debt recovery actions are stayed. Penal proceedings under Section 138, which aim to uphold commercial integrity and impose personal liability, are distinct and continue unaffected.

Key Evidence and Findings: The appellant was a director and personal guarantor who issued the cheque personally. The dishonour of the cheque triggered prosecution under Section 138. The moratorium was imposed after the appellant's conviction and did not prevent continuation of criminal proceedings. The NCLAT had expressly permitted Section 138 proceedings to continue despite the moratorium.

Application of Law to Facts: Since the appellant's liability under Section 138 is personal and separate from the corporate insolvency process, the moratorium under IBC does not bar criminal prosecution. The Court upheld that the moratorium does not protect the appellant from prosecution for dishonour of cheque issued in personal capacity.

Treatment of Competing Arguments: The appellant contended that the moratorium should protect him from prosecution due to the company's liquidation and his financial incapacity. The Court rejected this, relying on the statutory distinction between corporate insolvency and personal criminal liability, and the precedent in Rakesh Bhanot.

Conclusion: The moratorium under the IBC does not protect the appellant from criminal liability under Section 138 of the N.I. Act.

Issue 2: Effect of Company Liquidation on Liability of Director/Personal Guarantor under Section 138 N.I. Act

Relevant Legal Framework and Precedents: Section 141 of the N.I. Act provides for prosecution of persons in charge of the company's affairs, including directors. The liquidation of the company under the IBC does not extinguish personal criminal liability of directors or guarantors for offences committed in their individual capacity.

Court's Interpretation and Reasoning: The Court held that liquidation of the company does not absolve the appellant of his personal liability under Section 138. The appellant's conviction preceded the insolvency proceedings, and his role as personal guarantor further establishes personal accountability. The NCLAT's order permitting continuation of Section 138 proceedings reinforces this position.

Key Evidence and Findings: The appellant's personal issuance of the cheque and his status as director and guarantor were undisputed. The company's liquidation was subsequent to the conviction, and no statutory provision or precedent supports immunity from prosecution due to liquidation.

Application of Law to Facts: The appellant's personal liability is independent of the company's financial status or liquidation. Criminal prosecution under Section 138 is distinct from corporate insolvency and continues unaffected.

Treatment of Competing Arguments: The appellant argued that liquidation and lack of financial resources should relieve him from liability. The Court rejected this, emphasizing the personal nature of the offence and the legislative intent to hold individuals accountable.

Conclusion: Liquidation of the company does not relieve the appellant of personal criminal liability under Section 138 of the N.I. Act.

Issue 3: Obligation to Deposit 25% of Cheque Amount as Condition for Suspension of Sentence and Consequences of Non-Compliance

Relevant Legal Framework and Precedents: The High Court, exercising revisional jurisdiction, directed suspension of sentence on condition that the appellant deposit 25% of the cheque amount. Such conditional suspension is a recognized judicial practice to balance liberty and ensuring compliance with financial obligations arising from dishonoured cheques.

Court's Interpretation and Reasoning: The Court upheld the High Court's condition as lawful and binding. The appellant's failure to comply with the deposit condition justified cancellation of bail and recall of the suspension order. The Court emphasized that non-compliance with judicial conditions cannot be condoned.

Key Evidence and Findings: The appellant did not deposit any amount within the stipulated three months. The complainant filed an application for cancellation of bail on this ground, which was allowed by the High Court. The appellant's contention that he was not required to deposit was overruled.

Application of Law to Facts: The Court found no merit in the appellant's claim of exemption from the deposit condition. The judicial order was clear and binding, and failure to comply warranted revocation of bail and continuation of criminal proceedings.

Treatment of Competing Arguments: The appellant's financial incapacity was noted but not accepted as a ground to avoid compliance. The Court granted a final opportunity to deposit the amount, balancing fairness and judicial discipline.

Conclusion: The appellant was obliged to deposit 25% of the cheque amount as condition for suspension of sentence, and failure to do so justified recall of the suspension and continuation of prosecution.

Issue 4: Continuation of Section 138 Proceedings Despite Moratorium and Liquidation

Relevant Legal Framework and Precedents: The NCLAT's order explicitly permitted continuation of Section 138 proceedings despite the moratorium under the IBC. The Supreme Court's ruling in Rakesh Bhanot confirms that criminal proceedings under Section 138 are not stayed by insolvency moratoriums.

Court's Interpretation and Reasoning: The Court concurred with NCLAT's view and the Supreme Court precedent, holding that the moratorium does not bar continuation of criminal proceedings under Section 138. The legislative intent is to ensure accountability for cheque dishonour irrespective of insolvency proceedings.

Key Evidence and Findings: The appellant's conviction predated insolvency proceedings. The NCLAT's order and statutory interpretation confirm the permissibility of continuing prosecution.

Application of Law to Facts: The Court found no legal impediment to continuation of Section 138 proceedings against the appellant despite liquidation and moratorium.

Treatment of Competing Arguments: The appellant's reliance on insolvency proceedings to claim immunity was rejected.

Conclusion: Section 138 proceedings may continue notwithstanding the moratorium and liquidation of the company.

3. SIGNIFICANT HOLDINGS

"The interim moratorium under Section 96 and the moratorium under Section 101 IBC are designed to offer a breathing space to the corporate debtor, allowing them to reorganize their financial affairs without the immediate threat of creditor actions. However, this moratorium is not intended to shield individuals from personal criminal liabilities arising from their actions outside the scope of corporate debt restructuring."

"The statutory liability against the directors under Section 138 of the N.I. Act, 1881, is personal and hence, continues to bind natural persons, irrespective of any moratorium applicable to the corporate debtor."

"The acceptance of the resolution plan under Section 31 IBC or its implementation thereof will have no effect on the prosecution under Section 138 of the N.I. Act, 1881."

"The cause of action for prosecution under Section 138 of NI Act commences on the dishonour of the cheque and the failure to pay the amount unpaid because of dishonour, within 15 days from the date of receipt of notice demanding payment."

"The moratorium under the IBC does not protect the appellant from criminal liability under Section 138 of the N.I. Act."

"Liquidation of the company does not relieve the appellant of personal criminal liability under Section 138 of the N.I. Act."

"The appellant was obliged to deposit 25% of the cheque amount as condition for suspension of sentence, and failure to do so justified recall of the suspension and continuation of prosecution."

"Section 138 proceedings may continue notwithstanding the moratorium and liquidation of the company."

The Court finally granted the appellant a last opportunity to deposit 25% of the cheque amount within eight weeks, during which his liberty would not be curtailed. Failure to comply would expose him to custody, but upon deposit, the revisional application would be heard on merits.

Issues: Whether the High Court was justified in quashing the FIR under Section 482 of the Code of Criminal Procedure, 1973 on the ground that the dispute arose out of a long-standing business transaction and was essentially civil in nature.

Analysis: The High Court's power under Section 482 is to be exercised sparingly and only in exceptional cases. Quashing at the threshold is unwarranted where the allegations disclose possible cheating, criminal conspiracy, and use of shell or dummy companies to route transactions, especially when the matter is at the initial stage of investigation. The existence of earlier commercial dealings does not, by itself, negate an allegation of deceit, and economic offences require careful investigation because of their wider financial ramifications. On the material noticed, the Court found that the High Court gave undue weight to the prior business relationship and failed to appreciate circumstances pointing to a possible fraudulent design.

Conclusion: The High Court was not justified in quashing the FIR, and the quashing order could not be sustained.

Final Conclusion: The criminal proceedings were restored for investigation and trial to proceed in accordance with law, without being influenced by the observations in the judgment.

Ratio Decidendi: An FIR should not be quashed under Section 482 at the threshold where the allegations, taken with the surrounding material, disclose a possible economic fraud or conspiracy requiring investigation, even if the dispute also has a commercial backdrop.