Umashankar Yadav & Anr. v. State of Uttar Pradesh Through Chief Secretary & Anr.

Date of Judgement/Order – 08.05.2025 

Bench Strength – 2 Judges 

Composition of Bench – Justice PS Narsimha and Justice Joymalya Bagchi 

Case In Brief: 

• Guria is a well-known NGO in Uttar Pradesh that works against human trafficking and commercial sexual exploitation of girls and children. 
• Umashankar Yadav, a Project Coordinator at Guria, submitted an application to the District Magistrate of Varanasi alleging that bonded and child labourers were engaged at a brick kiln in Varanasi. 
• The District Magistrate directed the Assistant Labour Commissioner to take necessary action, who assembled a team of Labour Employment Officers and police personnel. 
• On 6th June 2014, this team, accompanied by the appellants (NGO workers), proceeded to inspect the brick kiln. 
• During the inspection, a disagreement arose between the appellants and the officials regarding how to conduct the investigation. 
• The appellants wanted the labourers and children to be brought to the police station for interrogation, while the officials intended to record their statements at the site. 
• The appellants allegedly put the labourers and children in a dumper and took them away from the site before their statements could be recorded. 
• Raja Ram Dubey (a Labour Employment Officer) filed an FIR against the appellants under Sections 186 (obstructing public servant in discharge of public functions), 353 (assault or criminal force to deter public servant from discharge of duty), and 363 (kidnapping) of the Indian Penal Code. 
• Section 363 was later dropped based on the statement of one of the labourers. 
• Criminal proceedings continued against the appellants under Sections 186 and 353 IPC. 
• The appellants approached the High Court to quash the FIR, but the court refused, stating that the issues involved disputed questions of fact which could not be adjudicated under Section 482 CrPC. 
• Aggrieved by the High Court's decision, the appellants approached the Supreme Court. 

Verdict: 

• The Supreme Court criticized the High Court's order as "cryptic" for not addressing the facts of the case or the contentions raised by the appellants. 
• The Court observed that summoning an accused is a serious matter affecting liberty and dignity of the individual concerned. 
• The Court stated that judicial intervention under Section 482 CrPC to weed out vexatious proceedings is of pivotal importance to protect individuals from untold harassment. 
• The Court noted that the inherent power of the High Court to prevent abuse of process is much wider in amplitude than discharge powers. 
• The Court held that the physical movement of labourers would not amount to use of force, far less criminal force on a public servant. 
• Regarding Section 186 IPC, the Court observed that obstruction to a public servant must be done with the requisite mens rea (intention) to prevent discharge of official duty. 
• The Court identified procedural flaws: Section 186 is a non-cognizable offence requiring prior permission from a Magistrate under Section 155(2) CrPC to register an FIR, which was not obtained. 
• The Court emphasized that cognizance of an offence under Section 186 IPC can only be taken on a complaint in writing by the aggrieved public servant or their superior, not on a police report as was done in this case.

Relevant Provision

• Section 186 of IPC: Obstructing public servant in discharge of public functions-
  Whoever voluntarily obstructs any public servant in the discharge of his public functions, shall be punished with imprisonment of either description for a term which may extend to three months, or with fine which may extend to five hundred rupees, or with both.  

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M/s Jindal Steel And Power Ltd. &  Anr.  v. M/s Bansal Infra Projects Pvt. Ltd. 

Date of Judgement/Order – 07.05.2025 

Bench Strength – 2 Judges 

Composition of Bench – Justice R Mahadevan and Justice JB Pardiwala 

Case In Brief: 

• The appellants issued a work order to Respondent No. 1 (M/s. Bansal Infra Projects Private Limited) on 24th January 2022, for construction of 400 flats at Jindal Nagar, valued at Rs. 43,99,46,924.13. 
• The appellants provided an advance of Rs. 3,73,95,490, which was secured by a bank guarantee (No. 32700IGL0001122) dated 8th March 2022, from Respondent No. 1. 
• The original project completion deadline was set for 30th September 2022, but was later extended to 30th June 2023, and then further extended by 60 days. 
• The project deadline was extended again to 30th September 2023, with the condition that retention money would be forfeited if the project extended beyond this date. 
• Due to quality deficiencies, missed deadlines, and non-compliance with contractual obligations, the appellants terminated the work order in accordance with several clauses in the contract. 
• On 21st February 2024, the appellants sent a letter to Respondent No. 1 highlighting the disregard for construction norms that compromised standards and posed safety risks. 
• When Respondent No. 1 failed to take corrective action, the appellants sent a letter on 25th March 2024, requesting refund of Rs. 4,12,54,904 (attributed to unadjusted advances and other deductions) by 30th April 2024, failing which the bank guarantee would be encashed. 
• Respondent No. 1 filed an Arbitration Petition (No. 14 of 2024) under Section 9 of the Arbitration and Conciliation Act, 1996 (A & C Act), seeking an interim order to restrain the appellants from proceeding with the termination notice and encashing the bank guarantee. 
• When the Commercial Court rejected the application for ex parte injunction, Respondent No. 1 filed a writ petition (W.P.(C) No. 11848 of 2024), in which the High Court granted a status quo order regarding the encashment of the bank guarantee. 
• Respondent No. 1 also invoked arbitration proceedings as per Clause 58.3 of the Work Order/Contract dated 24th January 2022. 
• On 20th August 2024, the High Court passed an order continuing the stay on encashment of the bank guarantee until disposal of Arbitration Petition No. 14 of 2024, which is now being challenged by the appellants. 

Verdict: 

• The appeal challenges the High Court's interim order restraining the appellants from invoking the bank guarantee during the pendency of proceedings. 
• The Court acknowledges the established legal principle that courts should refrain from interfering with bank guarantee invocation except in cases of egregious fraud or where encashment would result in irretrievable injustice. 
• The Court notes that the High Court disposed of the writ petition with the consent of both parties, stating that allowing the appellants to invoke the bank guarantee would likely render the Section 9 arbitration petition infructuous. 
• The Court observes that the High Court's order is merely an interim measure intended to protect the interests of both parties. 
• The Court recognizes that Respondent No. 1 has initiated arbitration proceedings, and pursuant to the High Court's order dated 6th November 2024, an Arbitral Tribunal was constituted. 
• The Court finds it imperative to maintain the existing position regarding the bank guarantee until the final outcome of the Section 9 arbitration petition, given the ongoing arbitration proceedings concerning the matter. 
• The Court notes that Respondent No. 1 has extended the bank guarantee until 30th June 2025 and has given an undertaking to further extend it until the disposal of the Section 9 arbitration petition. 
• The Court decides not to rule on the legal issues raised and leaves them open for future consideration. 
• The Court directs the parties to advance all their contentions with necessary documents before the Commercial Court, which shall pass appropriate orders within eight weeks. 
• The Court orders that the bank guarantee shall be kept alive and subject to the outcome of the Section 9 arbitration petition. 
• It was finally held that the High Court in exceptional circumstances can exercise it’s supervisory jurisdiction under Article 227 of the Constitution of India, 1950 (COI) to grant interim relief.

Relevant Provision: 

Article 227 of the COI: Power of superintendence over all courts by the High Court- 

(1) Every High Court shall have superintendence over all courts and tribunals throughout the territories in relation to which it exercises jurisdiction. 

(2) Without prejudice to the generality of the foregoing provision, the High Court may—  

(a) call for returns from such courts;  

(b) make and issue general rules and prescribe forms for regulating the practice and proceedings of such courts; and  

(c) prescribe forms in which books, entries and accounts shall be kept by the officers of any such courts.  

(3) The High Court may also settle tables of fees to be allowed to the sheriff and all clerks and officers of such courts and to attorneys, advocates and pleaders practicing therein: 

Provided that any rules made, forms prescribed, or tables settled under clause (2) or clause (3) shall not be inconsistent with the provision of any law for the time being in force and shall require the previous approval of the Governor.  

(4) Nothing in this article shall be deemed to confer on a High Court power of superintendence over any court or tribunal constituted by or under any law relating to the Armed Forces. 

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Renuka Prasad v. The State Represented by Assistant Superintendent of Police 

Date of Judgement/Order – 09.05.2025 

Bench Strength – 2 Judges 

Composition of Bench – Justice Sudhanshu Dhulia and Justice K Vinod Chandran 

Case In Brief:

• This case involves a murder where 71 out of 87 prosecution witnesses turned hostile, including key eyewitnesses who failed to identify the assailants. 
• The victim was an employee who had resigned from an institution managed by A1 (first accused) and joined an institution managed by PW4 (brother of A1). 
• According to the prosecution, A1 harbored enmity toward the deceased because the deceased actively supported PW4 in a sibling rivalry over the division of family assets. 
• The prosecution alleged that A1, along with his employees (A2 to A4), engaged two contract killers (A5 and A6) through an advocate (A7) to murder the deceased. 
• The deceased was allegedly hacked to death in front of his son (PW8) at 7:45 PM on April 28, 2011, and died at 8:40 PM the same day. 
• PW8, who filed the First Information Statement, failed to identify the assailants or weapons at trial despite initially claiming ability to do so. 
• The Trial Court acquitted all accused due to insufficient evidence as most witnesses turned hostile. 
• The High Court reversed the Trial Court's decision and convicted A1 to A6 under Section 302 read with Section 120-B of the Indian Penal Code, while upholding A7's acquittal. 
• The case was appealed to the Supreme Court, where the appellants challenged the High Court's reversal of the acquittal. 

Verdict: 

• The High Court improperly relied on testimony from Police Officers regarding statements made during investigation, which cannot be treated as gospel truth without witness corroboration at trial. 
• Section 162 of the Criminal Procedure Code, 1973 (CrPC) clearly establishes that statements made to police officers during investigation (Section 161 statements) can only be used for contradicting witnesses, not as substantive evidence. 
• The Court found that witnesses turning hostile either means they were persuaded/coerced into changing their statements or they never made such statements to police officers in the first place. 
• The seizures and recoveries relied upon by the High Court were not valid as evidence since independent witnesses who attested to the mahazars (records of seizure) turned hostile. 
• Cash recovered from the accused (A2 to A6) had no proven connection to the crime and was not a recovery under Section 27, making it inadmissible as evidence. 
• The confession under Section 27 could not be relied upon to implicate other accused as it violated Sections 25 and 26 of the Indian Evidence Act, 1872 (IEA). 
• The High Court's reversal of the Trial Court's acquittal was based on mere surmises and conjectures, improperly relying on the testimony of Investigating Officers reciting Section 161 statements. 
• The High Court's assumption that mass witness hostility was due to influence wielded by the accused was deemed presumptuous and fallacious by the Supreme Court. 
• Despite sharing the High Court's consternation over the cold-blooded murder, the Supreme Court could not rely on inadmissible Section 161 statements, unproven voluntary statements, or recoveries not connected to the crime. 
• The Court acknowledged that witness hostility could stem from various factors including fear, political pressure, family pressure, societal pressure, or monetary considerations. 
• Thus, the Court acquitted the accused persons and reversed the judgment of the High Court. 

Relevant Provision: 

Section 162 of CrPC: Statements to police not to be signed: Use of statements in evidence. — 

(1) No statement made by any person to a police officer in the course of an investigation under this Chapter, shall, if reduced to writing, be signed by the person making it; nor shall any such statement or any record thereof, whether in a police diary or otherwise, or any part of such statement or record, be used for any purpose, save as hereinafter provided, at any inquiry or trial in respect of any offence under investigation at the time when such statement was made:  

Provided that when any witness is called for the prosecution in such inquiry or trial whose statement has been reduced into writing as aforesaid, any part of his statement, if duly proved, may be used by the accused, and with the permission of the Court, by the prosecution, to contradict such witness in the manner provided by section 145 of the Indian Evidence Act, 1872 (1 of 1872); and when any part of such statement is so used, any part thereof may also be used in the re-examination of such witness, but for the purpose only of explaining any matter referred to in his cross examination.  

(2) Nothing in this section shall be deemed to apply to any statement falling within the provisions of clause (1) of section 32 of the Indian Evidence Act, 1872 (1 of 1872); or to affect the provisions of section 27 of that Act. 

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Vijaya Bank & Anr. v. Prashant B Narnaware 

Date of Judgement/Order – 14.05.2025 

Bench Strength – 2 Judges 

Composition of Bench – Justice PS Narasimha and Justice Joymalya Bagchi 

Case In Brief:

• In 1999, Mr. Prashant B Narnaware joined Vijaya Bank as a Probationary Assistant Manager, was confirmed in 2001, and later promoted to Middle Management Scale II. 
• In 2006, Vijaya Bank issued a recruitment notification for 349 officers across different grades, stipulating that selected candidates must execute an indemnity bond of ₹2 lakhs payable if they left service before completing 3 years. 
• Mr. Narnaware applied for the post of Senior Manager-Cost Accountant with a basic pay of ₹18,240/-, was selected, and received an appointment letter containing clause 11(k) requiring minimum service of 3 years with execution of the ₹2 lakh indemnity bond. 
• Accepting these conditions, Mr. Narnaware voluntarily resigned from his previous post as Manager (MMG-II), joined as Senior Manager (MMG-III) on 28th September 2007, and executed the required indemnity bond. 
• On 17th July 2009, before completing the stipulated three-year period, Mr. Narnaware tendered his resignation to join IDBI Bank. 
• Upon acceptance of his resignation, Mr. Narnaware paid ₹2 lakhs to Vijaya Bank under protest on 16.10.2009, in accordance with the indemnity bond. 
• Subsequently, Mr. Narnaware filed a writ petition before the High Court challenging clause 9(w) of the recruitment notification and clause 11(k) of the appointment letter as violations of Articles 14 and 19(1)(g) of the Constitution and Sections 23 and 27 of  the Indian Contract Act, 1872 (ICA). 
• The High Court allowed Mr. Narnaware's petition, which was subsequently upheld by its Division Bench, leading Vijaya Bank to appeal to the Supreme Court. 

Verdict: 

• The Supreme Court observed that restrictive covenants operating during the subsistence of an employment contract do not amount to a restraint of trade under Section 27 of ICA as they are in furtherance of the employment relationship rather than restricting future employment. 
• The Court noted that public policy considerations in employment contracts must be viewed through the lens of technological advancements affecting work nature, re-skilling requirements, and preservation of specialized workforce in a free market economy. 
• The Court observed that following liberalization, public sector undertakings like Vijaya Bank needed to compete with efficient private players, necessitating review and recalibration of policies to enhance efficiency and rationalize administrative costs. 
• The Court held that ensuring retention of efficient and experienced staff contributing to managerial skills was inalienable to the interest of such undertakings, and a covenant prescribing minimum service tenure to reduce attrition was neither unconscionable nor contrary to public policy. 
• The Court remarked that as a public sector undertaking, Vijaya Bank could not resort to private or ad-hoc appointments and an untimely resignation would necessitate a prolix and expensive recruitment process involving open advertisement and fair competitive procedure to satisfy the constitutional mandate under Articles 14 and 16. 
• The Court determined that the quantum of liquidated damages (₹2 lakhs) was not disproportionate considering the respondent's senior managerial position with a lucrative pay package, and did not render the possibility of resignation illusory, as evidenced by the respondent's actual resignation after paying the stipulated amount. 
• The Court concluded that the High Court erred in mechanically applying precedent without considering the restrictive covenant in its proper perspective within the specific factual matrix of the case. 

Relevant Provision: 

Section 27 of ICA: Agreement in restraint of trade, void. — 

Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void. 

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State Represented by Inspector of Police, CBI, ACB v. Eluri Srinivasa Chakravarthi and Ors. 

Date of Judgement/Order – 22.05.2025 

Bench Strength – 2 Judges 

Composition of Bench – Justice Pankaj Mithal and Justice SVN Bhati 

Case In Brief:

• Between November 1994 and May 2006, Rayapati Subba Rao (A-1) served as Cotton Purchase Officer in the Cotton Corporation of India (CCI), Guntur Branch. 
• CBI registered an FIR in 2006 alleging a conspiracy where A-1 and his son A-3 purchased cotton from farmers at lower market prices before the government announced Minimum Support Price (MSP). 
• The accused allegedly hoarded the cotton and later resold it to CCI at higher MSP rates using benami farmers (A-4 to A-47) as fronts. 
• Many of the alleged farmers had insufficient or no agricultural land to produce the large quantities of cotton they purportedly sold to CCI. 
• Bank accounts were opened in these farmers' names, often introduced by A-3 or his employees, and payments were allegedly diverted through forged signatures. 
• The prosecution claimed a wrongful loss of Rs. 21,19,35,646/- to CCI and corresponding wrongful gain to the accused persons. 
• CCI responded to CBI's inquiry in 2007 stating that no rules were violated, no loss was caused, no complaints were received, and all purchases were made as per MSP guidelines.

Verdict: 

• The Special Court and High Court discharged the accused primarily based on CCI's letter dated 31st January 2007, which contradicted the prosecution's allegations of loss and rule violations. 
• The Supreme Court held that the lower courts committed a fundamental legal error by considering documents summoned by the defense at the discharge stage. 
• Under Section 239 of Criminal Procedure Code, 1973 (CrPC), courts can only consider the chargesheet and documents filed by the prosecution under Section 173, not additional material brought by the accused. 
• The Court ruled that allowing accused persons to file additional documents at the discharge stage would amount to a "mini-trial" and permit them to present their defense prematurely. 
• The Supreme Court emphasized that the magistrate's role under Section 239 is to examine only the prosecution's material to determine if charges are groundless, not to conduct a detailed examination of defense evidence. 
• The orders of discharge were set aside as they exceeded the statutory limits of discretionary jurisdiction under Section 239 of CrPC. 
• The case was remanded to the Special Court to decide on discharge/framing of charges based solely on the chargesheet and accompanying prosecution documents, without considering the CCI correspondence relied upon earlier.

Relevant Provision: 

Section 239 of CrPC: When accused shall be discharged.— 

If, upon considering the police report and the documents sent with it under section 173 and making such examination, if any, of the accused as the Magistrate thinks necessary and after giving the prosecution and the accused an opportunity of being heard, the Magistrate considers the charge against the accused to be groundless, he shall discharge the accused, and record his reasons for so doing. 

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