List of Current Affairs

Source: Supreme Court 

Why in News? 

The bench of Justices Sanjay Karol and Nongmeikapam Kotiswar Singh in the case of Neeraj Kumar @ Neeraj Yadav v. State of U.P. & Ors. (2025) set aside the High Court's order and allowed the summoning of additional accused under Section 319 of the Criminal Procedure Code, 1973 (CrPC) (Section 358 of Bharatiya Nagarik Suraksha Sanhita, 2023) based on evidence that emerged during trial. 

What was the Background of Neeraj Kumar @ Neeraj Yadav v. State of U.P. & Ors. (2025) Case? 

• On 25th March 2021, appellant Neeraj Kumar lodged FIR No. 187 of 2021 under Section 307 IPC alleging that his sister Nishi had been shot by her husband Rahul at her matrimonial home. 
• The FIR was registered based on information received from his nine-year-old niece Shristi, who informed him that her father had shot her mother. 
• The deceased was taken to Government Hospital, Bulandshahar, and then to Kailash Hospital, Noida, where she underwent treatment for firearm injuries. 
• During treatment, the deceased's statements were recorded under Section 161 CrPC on two occasions - 25th March 2021 and 18th April 2021, both video recorded. 
• In her first statement dated 25th March 2021, she named her husband Rahul as the person who shot her. 
• In her second statement dated 18th April 2021, she further alleged that her husband had shot her at the instigation of his mother Rajo @ Rajwati, brother Satan @ Vineet, and brother-in-law Gabbar. 
• On 15th May 2021, the deceased succumbed to her injuries. 
• On 20th May 2021, the appellant made another complaint before the SHO requesting legal action against the instigators (relatives of the husband) whom the deceased had named in her statements. 
• The chargesheet filed on 16th July 2021 only named Rahul (the husband) under Sections 302 and 316 IPC, exonerating the other family members. 
• During trial, the appellant was examined as PW-1 on 28th March 2022, and the minor daughter Shristi was examined as PW-2 on 12th July 2022. 
• PW-2 testified that her father shot her mother at the instigation of her grandmother, uncle, and aunt's husband. 
• Based on these testimonies and the deceased's statements, the prosecution moved an application under Section 319 CrPC to summon the additional accused. 
• The Trial Court dismissed the application on 3rd August 2023, holding that the material on record was insufficient to exercise the extraordinary power under Section 319 CrPC. 
• The appellant filed Criminal Revision No. 4729 of 2023 before the High Court, which was also dismissed on 22nd April 2024. 
• The High Court held that the deceased's statements could not be treated as dying declarations since death occurred after substantial time, PW-1 was not an eyewitness, and PW-2 admitted in cross-examination that she reached the scene only after hearing gunshots. 

What were the Court's Observations? 

• The Supreme Court emphasized that Section 319 CrPC is an extraordinary power to ensure no guilty person escapes justice, and requires cogent evidence indicating prima facie involvement, with satisfaction higher than framing charges but short of conviction standard. 
• The Court found that PW-1's testimony prima facie indicated active participation and instigation by the respondents, and clarified that an FIR is not an encyclopedia requiring every minute detail.
• On PW-2's testimony, the Court held that the High Court erred in conducting a mini-trial by relying on cross-examination to conclude she was not an eyewitness, stating this approach was impermissible at the summoning stage. 
• The Court rejected contentions that PW-2 was tutored, noting she had categorically named the respondents even in her Section 161 statement, and clarified that whether she actually witnessed the firing or arrived immediately thereafter are matters to be determined at trial. 
• On the deceased's statements, the Court held they clearly fall within Section 32(1) of the Evidence Act as dying declarations, rejecting the High Court's reasoning that death occurring after substantial time disqualifies them as such. 
• The Court reiterated that dying declarations need not be recorded before a Magistrate, lack of doctor's certification does not render them unacceptable, and any inconsistencies are matters to be examined at trial, not at preliminary summoning stage. 
• The Court found that the material on record - depositions of PW-1 and PW-2 along with the deceased's statements - prima facie suggested complicity of the respondents, and there existed sufficient ground to summon them under Section 319 CrPC. 
• The appeal was allowed, the High Court's judgment was set aside, and parties were directed to appear before the Trial Court on 8th January 2026 for expedited trial. 

What is Section 319 of CrPC? 

• This provision provides for power to proceed against other persons appearing to be guilty of an offence. 
• This is contained in Section 358 of Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS). 
• It is based on the doctrine judex damantur cum nocens absolvitur which means Judges condemned when guilty is acquitted. This section states that- 
  • Where, in the course of any inquiry into, or trial of, an offence, it appears from the evidence that any person not being the accused has committed any offence for which such person could be tried together with the accused, the Court may proceed against such person for the offence which he appears to have committed. 
  • Where such a person is not attending the Court, he may be arrested or summoned, as the circumstances of the case may require, for the purpose aforesaid. 
  • Any person attending the Court, although not under arrest or upon a summons, may be detained by such Court for the purpose of the inquiry into, or trial of, the offence which he appears to have committed. 
  • Where the Court proceeds against any person under sub-section (1), then— 
    • The proceedings in respect of such person shall be commenced afresh, and the witnesses re-heard; 
    • Subject to the provisions of clause (a), the case may proceed as if such person had been an accused person when the Court took cognizance of the offence upon which the inquiry or trial was commenced. 
• Essential Elements of Section 319: 
  • There is any enquiry or trial of an offence. 
  • It appears from the evidence that any person, not being an accused has committed any offence for which, the person to be tried together with the accused. 

Source: Orissa High Court 

Why in News? 

The bench of Dr. Justice Sanjeeb K Panigrahi in the case of Maa Tarini Poultries Pvt. Ltd. v. Indian Bank, Main Branch, Berhampur & Ors. (2025) held that the levy of foreclosure charges on MSME loans with floating interest rates is illegal, arbitrary, and contrary to binding RBI directives, and directed the immediate release of mortgaged property documents without insisting on such charges.

What was the Background of Maa Tarini Poultries Pvt. Ltd. v. Indian Bank and Ors. (2025) Case? 

• The petitioner, Maa Tarini Poultries Pvt. Ltd., was a registered MSME bearing Registration No. UDYAM-OD-11-0003310, engaged in the poultry sector. 
• In September 2020, the petitioner approached Indian Bank, Berhampur seeking financial assistance of Rs. 1.80 crores under the MSME Scheme for establishing an agro-based industrial unit. 
• In February 2022, Indian Bank sanctioned a loan of Rs. 1.80 crores comprising a Term Loan of Rs. 1.45 crore and a Cash Credit facility of Rs. 35 lakhs, subject to creation of equitable mortgage over the petitioner's immovable properties. 
• The petitioner alleged that bank officials coerced them to purchase an SBI Life Personal Insurance policy valued at Rs. 1.53 lakh per annum, and upon refusal, the bank dishonoured cheques and obstructed NEFT transactions during 2023. 
• On 22 May 2023, the petitioner's poultry farm suffered severe damage due to a Kala Baisakhi storm. Despite immediate approach to the bank for insurance claim processing, no effective steps were taken for over a year, causing grave financial strain. 
• Due to persistent difficulties, the petitioner approached HDFC Bank for loan takeover. After clearing all outstanding dues with Indian Bank through cheques dated 22 May 2024 and 26 May 2024, the loan was taken over by HDFC Bank on 26 May 2024. 
• Despite complete repayment and takeover, Indian Bank raised a demand for foreclosure charges at 4% of the outstanding amount, contrary to RBI guidelines prohibiting such charges on MSME floating-rate loans. 
• The bank refused to return the petitioner's original title deeds and property documents despite full loan repayment, including a residential property valued at approximately Rs. 2 crores and 5.9 acres of Garabari land near NH-16. 
• The petitioner approached the RBI Ombudsman on 4 July 2025 with Complaint No. N2025260030026, but the grievance remained unresolved as the mechanism did not provide for personal hearings. 
• With no efficacious remedy available through banking authorities, the petitioner filed a writ petition before the Orissa High Court.

What were the Court's Observations? 

• The Court observed that banking contracts operate within public regulatory norms, and when RBI prescribes protections for MSMEs, contractual terms inconsistent with such prescriptions cannot be enforced. 
• Relying on Central Bank of India v. Ravindra (2002), the Court held that RBI circulars are binding on commercial banks, and contractual terms cannot override RBI directives as per ICICI Bank v. Official Liquidator (2010). 
• The Court found that the substance of a charge, not its label, determines legality—disguised prepayment fees like "processing fee on prepayment" or "switchover charge" are illegal foreclosure charges. The bank's subsequent reduction from 4% to 2% cannot cure the original illegality. 
• Citing LIC of India v. Consumer Education & Research Centre (1995), the Court observed that unfair contract terms in "dotted line contracts" where weaker parties lack bargaining power can be struck down. 
• The Court held that foreclosure penalties constitute anti-competitive practices under Section 3 of the Competition Act, 2002, stifling competition and limiting consumer choice in the credit market. 
• The Court observed that even if the loan sanction contained foreclosure charge stipulations, such clauses would collide with binding RBI mandates under Sections 21 and 35A of the Banking Regulation Act, 1949, and stand ipso jure nullified. 
• The Court held that the bank's refusal to release original title deeds based on statutorily prohibited demands amounts to abuse of authority, violating Articles 14 and 300-A of the Constitution. 
• The Court directed Indian Bank to forthwith release the petitioner's property documents without insisting on foreclosure charges, and ordered filing of a compliance affidavit within one month. 

What are Foreclosure Charges? 

About: 

• Foreclosure charges, also known as prepayment penalties, are fees levied by banks when a borrower repays a loan before its scheduled maturity date. 
• These charges were historically justified as compensation to banks for loss of anticipated interest income from the remaining loan tenure. 
• Banks argued that when borrowers prepay loans, particularly to switch to competing lenders offering better rates, it disrupts their revenue projections and cash flow planning. 
• However, such charges operate as a deterrent to early repayment and loan refinancing, restricting borrower mobility and consumer choice in the credit market. 
• The levy of foreclosure charges has been progressively prohibited by RBI through various circulars to promote credit mobility and prevent anti-competitive practices. 

Statutory Framework Supporting MSME Protection: 

• Section 10 of the Micro, Small and Medium Enterprises Development Act, 2006 enjoins formulation of progressive credit policies for MSMEs in consonance with RBI guidelines to ensure timely and unhindered flow of credit. 
• Section 21 of the Banking Regulation Act, 1949 confers upon RBI the power to regulate lending and credit practices of banking companies, and Section 21(3) mandates that every banking company shall comply with all directions issued by RBI. 
• Section 35A of the Banking Regulation Act, 1949 gives RBI wider powers to intervene in banking operations in public interest. 
• The Banking Codes and Standard Board of India (BCSBI) has formulated a Code of Bank's Commitment to Micro and Small Enterprises prescribing minimum standards of fair and transparent banking practices. 

Anti-Competitive Nature of Foreclosure Charges: 

• Section 3(1) of the Competition Act, 2002 prohibits agreements which cause or are likely to cause an appreciable adverse effect on competition. 
• Under Section 3(3)(b), a presumption of anti-competitive effects arises where there is any practice resulting in limitation or control in provision of services. 
• Foreclosure penalties stifle competition by compelling borrowers to remain tied to particular institutions, imposing unwarranted restrictions on freedom of trade and consumer choice.