List of Current Affairs

Source:  Delhi High Court 

Why in News? 

Recently, Justice Ravinder Dudeja ruled that a director cannot be personally prosecuted for a company’s actions unless the company itself is made an accused. It held that failure to implead the company is a fatal defect, emphasizing that under Section 278B of the Income Tax Act, both the company and its officers must be jointly arraigned for liability. 

• The Delhi High Court held this in the matter of Rakesh Agarwal v. ITO  (2025). 

What was the Background of Rakesh Agarwal v. ITO (2025) Case ? 

• M/s SNR Buildwell Pvt. Ltd., a private company, failed to discharge its tax liabilities for the Assessment Years 2014-15, 2015-16, and 2016-17. This non-payment resulted in the Income Tax Department raising a demand for tax dues amounting to Rs. 4,44,82,912/-. During the pendency of recovery proceedings initiated by the Department, it came to light that Rakesh Agarwal, who was a Director of the company, had transferred an Audi Car bearing Registration Number UK 07 BE 2759 to his daughter-in-law without providing adequate consideration in return. 
• The Income Tax Department treated this transfer as void under Section 281 of the Income Tax Act, 1961, on the grounds that it was undertaken to frustrate the recovery proceedings. Consequently, the Department initiated criminal prosecution against both Nilesh Agarwal and Rakesh Agarwal, the Directors of the company, under Section 276 of the Income Tax Act, 1961, which pertains to the offence of removal, concealment, transfer, or delivery of property to thwart tax recovery. 
• The Principal Commissioner of Income Tax accorded sanction for prosecution of the petitioner-Directors under Section 276 of the Income Tax Act. The Income Tax Office thereafter filed complaints against the Directors before the trial court. However, notably, the company itself, M/s SNR Buildwell Pvt. Ltd., was not arrayed as an accused in the complaints. The petitioner-Directors objected to the maintainability of the prosecution on this ground, contending that in the absence of the company being made a party to the proceedings, prosecution against them as Directors alone is not permissible under law. 
• The trial court, by orders dated 06.06.2024, rejected the objections raised by the petitioner-Directors and held that the complaints were maintainable. The trial court proceeded to list the matter for framing of charges. Aggrieved by these orders, the petitioner Directors approached the High Court of Delhi. 

What were the Court’s Observations? 

• The High Court observed that Section 278B of the Income Tax Act, 1961, creates a statutory deeming fiction wherein both the company and every person in charge of and responsible for the conduct of its business are deemed to be guilty of an offence committed by the company. The legislative intent embedded in this provision is unambiguous: the company, being the principal offender, must first be arraigned as an accused in the proceedings. Only thereafter can vicarious liability be fastened upon its officers and Directors. 
• The Court noted that the jurisprudence developed under Section 141 of the Negotiable Instruments Act, which contains a similar vicarious liability provision, is directly applicable to Section 278B of the Income Tax Act.  
• The Supreme Court in Aneeta Hada v. Godfather Travels & Tours had laid down the binding principle that for maintaining prosecution against Directors under a vicarious liability provision, the arraignment of the company is imperative. The company, being a juristic person, must be impleaded as an accused, and without its impleadment, the Directors cannot be prosecuted. The foundation of such prosecution lies in the commission of the offence by the company itself, and liability can extend to its Directors only thereafter. 
• The Court observed that the complaints in the present case were entirely premised on the company's liability arising from its outstanding tax dues and the alleged transfer of company assets. No independent allegation was made against the petitioner-Directors in their personal capacity.  
• The Show Cause notice dated 31.10.2019 was addressed only to the company and explicitly stated that the prosecution of the petitioners was being undertaken "in the capacity of Director of the company," thereby making it abundantly clear that the petitioners were being prosecuted solely on the basis of vicarious liability. 
• The Court held that the omission to implead the company is therefore not a mere technical or procedural irregularity that could be cured through subsequent amendment of the complaints. Rather, this omission goes to the root of jurisdiction and renders the entire prosecution legally unsustainable.  
• The continuation of proceedings against the petitioner-Directors as Directors alone, without impleading the company as an accused, would be contrary to Section 278B of the Income Tax Act and the law declared in Aneeta Hada, thereby constituting an abuse of the process of law. 

What is Section 278B of the Income Tax Act, 1961 ? 

• Overview and Purpose: 
  • Section 278B of the Income Tax Act, 1961, establishes a framework of vicarious liability that extends criminal responsibility from corporate entities to individuals overseeing their operations.  
  • This provision ensures that individuals cannot evade accountability by sheltering behind the corporate structure.  
  • It applies to companies, firms, and any association of persons, whether incorporated or not, creating a comprehensive mechanism to hold decision-makers personally responsible for tax violations. 
• Primary Liability Framework: 
  • Section 278B(1) provides that where an offence under the Income Tax Act has been committed by a company, every person in charge of and responsible for the conduct of its business, as well as the company itself, shall be deemed guilty of the offence.  
  • Such individuals are liable to be proceeded against and punished accordingly. This provision creates a deeming fiction extending liability from the corporate entity to responsible individuals. 
  • The section incorporates a crucial safeguard. Individuals shall not face punishment if they prove that the offence was committed without their knowledge or that they exercised all due diligence to prevent its commission.  
  • This defence mechanism allows responsible individuals to escape liability by demonstrating either their lack of awareness or their proactive efforts to prevent violations. 
• Enhanced Liability for Active Involvement: 
  • Section 278B(2) imposes heightened liability on specific corporate officers. Where an offence is proved to have been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary, or other officer, such officer shall be deemed guilty.  
  • This provision targets individuals whose actions, omissions, or authorisation directly facilitated the offence. Such officers face liability without the benefit of the "due diligence" defence available under Section 278B(1). 
• Concurrent Punishment Mechanism: 
  • Section 278B(3) ensures that both the company and responsible individuals can be punished simultaneously.  
  • Where an offence carries imprisonment and fine as punishment, the company faces fine while individuals may face both imprisonment and fine. This prevents situations where only the corporate entity is punished while individuals escape consequences. 
• Scope and Definition: 
  • The Explanation to Section 278B broadly defines "company" to include any body corporate, firm, and association of persons or body of individuals, whether incorporated or not. 
  •  The term "director" is contextualised to mean a partner in firms and any member controlling the affairs of associations.  
  • This expansive definition ensures the provision applies to various business organisations. 
• Defences and Significance: 
  • An individual can defend against prosecution by proving either absence of knowledge regarding the offence or exercise of due diligence in prevention. Due diligence encompasses implementing internal compliance mechanisms, monitoring systems, and taking corrective action upon discovery of irregularities. 
  • Section 278B serves critical objectives by preventing misuse of corporate structures to evade individual accountability, encouraging compliance through personal responsibility, and promoting transparency in tax practices. By deeming individuals guilty of company offences, the provision creates a deterrent effect and ensures that senior management cannot hide behind corporate veils to escape consequences for tax violations. Companies must therefore prioritise compliance and implement robust internal controls to mitigate prosecution risks under this section. 

Source: Supreme Court  

Why in News? 

Recently, Chief Justice B.R. Gavai and Justice K. Vinod Chandran that Magistrates can direct collection of voice samples and other physical evidence from both accused and witnesses, clarifying that such material evidence does not violate the constitutional protection against self-incrimination under Article 20(3). The Court relied on the 2019 precedent in Ritesh Sinha v. State of Uttar Pradesh, extending the Magistrate’s authority to all “persons,” not just accused. 

• The Supreme Court held this in the matter of Rahul Agarwal v. The State of West Bengal & Anr.(2025). 

What was the Background of Rahul Agarwal v. The State of West Bengal & Anr.(2025) Case? 

• A young married woman, aged twenty-five years, died on the sixteenth of February, 2021. The death occasioned allegations of harassment and torture perpetrated at the matrimonial residence. Conversely, a counter-allegation was raised that the deceased woman, along with her parents, had misappropriated cash and jewellery belonging to the family of the husband. 
• A cousin of the husband of the deceased lodged a criminal complaint before the police authorities. The deceased's father and mother were arrayed as accused persons in the said complaint. 
• Upon investigation, the Investigating Officer ascertained that the second respondent had acted in the capacity of an agent on behalf of the father of the deceased. The second respondent allegedly threatened a witness who claimed to possess knowledge of an extortion demand made by the father through the agency of the second respondent. This conduct formed the basis for further investigative action. 
• The Investigating Officer, in pursuit of investigation into the alleged offence, sought collection of a voice sample from the second respondent for comparative analysis with recorded conversations. With this objective, a petition was filed before the jurisdictional Magistrate's Court. The Magistrate, by an order dated as per Annexure P13, granted permission for the collection of the voice sample from the second respondent. 
• The second respondent preferred a challenge to the Magistrate's order before the High Court of Calcutta. The High Court, by the impugned order, set aside the Magistrate's order on the ground that a similar legal question had been referred for consideration before a Larger Bench of the Supreme Court of India. The High Court declined to follow the existing precedent of the Supreme Court pending resolution of the Larger Bench reference. 
• The reference made to the Larger Bench regarding the permissibility of voice sample collection was subsequently closed on default, rendering it non-actionable. 

What were the Court’s Observations? 

• The Supreme Court observed that the High Court had entertained a purely academic question already covered by binding precedent and refused to follow such precedent on the erroneous premise that a Larger Bench reference was pending. The reference had been closed on default, thereby depriving it of legal efficacy. 
• The Court observed that furnishing a voice sample constitutes material evidence rather than testimonial evidence and is not compelled testimony in the constitutional sense. Voice samples stand on the same footing as fingerprints, handwriting, signature impressions, and DNA evidence. Such material evidence is wholly innocuous and cannot, by itself, incriminate a person; it merely serves as a basis for comparison with materials discovered during investigation. 
• The Court observed that Article 20(3) protects any person, whether accused or witness, from compulsion to be a witness against themselves. However, this protection is confined to testimonial compulsion. Furnishing physical or material evidence does not constitute testimonial compulsion and therefore does not fall within Article 20(3). Actual incrimination, if any, results from comparison of the sample with investigative materials, not from the mere furnishing of the sample itself. 
• The Court observed that Ritesh Sinha v. State of Uttar Pradesh & Anr. (2019), deliberately employed the term "a person" rather than confining the power to the accused alone. This conscious choice indicated that the rule against self-incrimination applies equally to any person, whether accused or witness. The precedent granted magistrates authority to direct voice sample collection despite the absence of explicit provisions in the Criminal Procedure Code, 1973. 
• The Court observed that the foundational principle in State of Bombay v. Kathi Kalu Oghad, (1961), determined that specimen handwriting, signatures, and finger impressions do not constitute testimony. These materials are wholly innocuous for comparison purposes and do not by themselves incriminate a person. The same reasoning applies with equal force to voice samples, particularly given technological advancement. 
• The Court observed that the magistrate's power to direct voice sample collection was subsequently addressed through the Bhartiya Nagarik Suraksha Sanhita (BNSS), 2023. Section 349 of the BNSS now specifically empowers a magistrate to direct collection of voice samples, thereby providing statutory sanction to the power previously recognised by judicial precedent. 
• The Court observed that whether the Criminal Procedure Code, 1973, or the BNSS, 2023, applies, the magistrate possesses authority to direct furnishing of voice samples. Under the Criminal Procedure Code, such authority flows from the binding precedent in Ritesh Sinha. Under the BNSS, 2023, such authority is explicitly conferred by Section 349. In either case, the direction does not infringe upon any constitutional protection against self-incrimination. 

What is Right Against Self-incrimination ? 

• Overview: 
  • The right against self-incrimination operates on the legal maxim "nemo tenetur prodere accusare seipsum," establishing that no person can be compelled to make self-incriminating statements.  
  • This fundamental legal principle protects individuals from being forced to provide information or testify against themselves in criminal cases and is enshrined as a constitutional safeguard in jurisdictions including India and the United States. 
• Article 20(3) of the Constitution of India: 
  • Article 20(3) prohibits any person accused of an offence from being compelled to be a witness against themselves.  
  • This constitutional safeguard operates as an absolute bar against testimonial compulsion resulting in self-incrimination. 
• Key Distinctions: 
  • The critical distinction determining violations of Article 20(3) lies between testimonial evidence and material evidence.  
  • Testimonial evidence comprises statements, admissions, and confessions representing the contents of a person's mind. Material evidence consists of physical manifestations such as fingerprints, handwriting samples, voice samples, and DNA profiles.  
  • Material evidence, being wholly innocuous and unchangeable, does not constitute testimony and therefore does not fall within Article 20(3)'s protection. 
• Application to Compelled Samples: 
  • Compelling a person to furnish physical samples such as voice recordings or fingerprints does not constitute a violation of Article 20(3). The furnishing itself is not self-incriminatory; incrimination occurs only upon comparison with investigative materials.  
  • The incrimination flows from independent comparative analysis, not from the compelled provision of the sample. 
  • Consequently, the protection is designed to prevent ransacking of a person's mind through forced testimony, not to prohibit production of neutral physical evidence. 
• Landmark Precedents: 
  • In Nandini Satpathy v. P.L. Dani (1978), the Supreme Court affirmed that the right extends to both accused persons and witnesses.  
  • In Ritesh Sinha v. State of Uttar Pradesh (2019), the Court held that voice samples constitute material evidence, and their compelled collection does not infringe Article 20(3) protections, establishing that the principles protecting self-incrimination are compatible with modern forensic evidence collection.

Source: High Court of Delhi 

Why in News? 

The Delhi High Court, through a Division Bench comprising Justices Harish Vaidyanathan Shankar and Anil Kshetarpal, in the case of Vivek Nagrath v. Divya Goglani (2025) delivered a significant judgment addressing matrimonial relief and the statutory framework governing Hindu marriages.  

• The court dismissed an appeal by both spouses seeking to invalidate their marriage on the grounds that it had not been solemnized in accordance with Section 7 of the Hindu Marriage Act, 1955 (HMA).  

What was the Background of Vivek Nagrath v. Divya Goglani (2025) Case? 

Factual Summary: 

• The parties, Vivek Nagrath (the husband) and Divya Goglani (the wife), had mutually decided to marry and perform a marriage ceremony at Arya Samaj Mandir on 30.01.2024. 
• A marriage certificate was issued by Arya Samaj Mandir Vivah Bandhan Trust (Registered) on 30.01.2024. 
• The couple proceeded to register their marriage with the District Magistrate, Shahdara, New Delhi on 02.02.2024, submitting affidavits confirming that the marriage had been solemnized according to Hindu rites and ceremonies. 
• The parties had initially intended to perform an elaborate wedding ceremony scheduled for 20.04.2024 with full traditional rituals and customs. 
• Before the scheduled elaborate ceremony, serious differences arose between the parties, leading them to mutually decide on 07.02.2024 to discontinue wedding preparations. 
• Citing the non-performance of Saptapadi (the seven steps ceremony mandated under Hindu tradition), both parties filed a joint petition under Section 7 of the Hindu Marriage Act on 25.07.2024 before the Family Court, Saket, seeking a declaration that their marriage was null and void. 

Lower Court's Decision: 

• The Family Court, by judgment dated 04.10.2024, dismissed the joint petition, holding that the parties could not challenge the validity of a marriage they had themselves voluntarily registered and certified as valid. 
• The court applied the doctrine of estoppel, noting that both parties had submitted sworn affidavits before the competent authority confirming the marriage had been solemnized according to Hindu rites and ceremonies. 

Reason for Appeal: 

• The parties appealed the Family Court's dismissal to the Delhi High Court, contending that the absence of Saptapadi rendered the marriage invalid ab initio (from the beginning) under Section 7 of the Hindu Marriage Act.

What were the Court's Observations?

On the Statutory Scheme of the Hindu Marriage Act: 

• The court observed that the Hindu Marriage Act contains no provision enabling parties to seek a declaration that a marriage is invalid ab initio on the ground that it was never solemnized in accordance with Section 7.  
• All provisions in the Act dealing with declarations of void, voidable, or dissolved marriages (Sections 11, 12, 13, 13A, and 13B) are applicable only to marriages that have been solemnized. The petition was therefore not maintainable under the statutory framework. 

On the Scope of Section 11 (Decree of Nullity): 

• Section 11 of the Hindu Marriage Act empowers courts to grant a decree of nullity only where a marriage, though duly solemnized, violates the essential conditions prescribed under specific clauses of Section 5 (relating to subsisting spouses, prohibited degrees of relationship, or sapinda relationships).  
• The relief sought—invalidation on grounds of non-solemnization—does not fall within the ambit of Section 11, as that provision presupposes a solemnized marriage. 

On the Doctrine of Estoppel: 

• The law of Estoppel would also be relevant in the present context which is a legal principle that prevents a person from denying or asserting something that is contrary to what they have previously stated or agreed to, when such statement or agreement has been relied upon by another party 

Solemnization as Prerequisite: 

• All remedies under the Hindu Marriage Act—whether relating to void marriages, voidable marriages, divorce, or judicial separation—presuppose the existence of a solemnized marriage. There is no statutory remedy for declaring a marriage void on the sole ground that solemnization requirements were not met. 

Strict Construction of Matrimonial Remedies: 

• The Hindu Marriage Act must be construed strictly, with matrimonial reliefs available only on grounds expressly specified in the statute. Courts cannot create new grounds or remedies not contemplated by the legislation. 

Final Decision: 

• The court dismissed the appeal in its entirety, finding it devoid of merit. It observed that both the petition before the Family Court and the appeal before the High Court were "the product of sheer ingenuity, a complete misadventure, and a misguided attempt to turn the settled law on its head."

What is Section 7 of HMA?  

• The marriage renders to be valid if it is performed between a Hindu couple according to the customary ceremony and rituals of each party or any one of them as mentioned by Section 7 of HMA.  

Section 7 - Ceremonies for a Hindu marriage —  

(1) A Hindu marriage may be solemnized in accordance with the customary rites and ceremonies of either party thereto.  

(2) Where such rites and ceremonies include the Saptapadi (that is, the taking of seven steps by the bridegroom and the bride jointly before the sacred fire), the marriage becomes complete and binding when the seventh step is taken. 

• Customary Ceremony and Rituals means that the marriage may be solemnised as per the customs of the community. For instance, a community may provide for a mere exchange of garlands, while another may require a more elaborate yajna ritual. The Act takes into account these differences