1). Supreme Court Directs Magistrates to Verify Truth of Complaints Before Summoning Accused Under S.200 CrPC/S.227 BNSS

Case Background

The Supreme Court quashed a complaint filed under Section 138 of the Negotiable Instruments Act, 1881 (NI Act)related to cheque dishonour. The Court found that the complainant had suppressed key facts and misled the legal process by not disclosing loan documents.

The case involved a loan dispute between the appellant (borrower) and the respondent (Cooperative Society). The appellant had taken a loan and given blank security cheques. In 2016, the respondent deposited one of the cheques (₹27.27 lakh), which bounced. The respondent then sent a legal notice (dated November 11, 2016), demanding payment.

The appellant denied liability and requested loan documents to verify the debt. However, the respondent refused to provide the documents and instead filed a complaint in December 2016, without disclosing the appellant’s request for the documents. A Magistrate issued summons in March 2017. The Madras High Court refused to quash the complaint, leading the appellant to approach the Supreme Court.

Issues in the Case

1. Whether the complaint under Section 138 NI Act was valid, given that the complainant had suppressed material facts.
2. Whether the Magistrate had correctly issued summons despite the lack of disclosure by the complainant.
3. Whether criminal law can be set in motion when material facts are concealed.

Court Observations and Ruling

Bench Composition

The case was heard by a bench of Justice Abhay S. Oka and Justice Ujjal Bhuyan.

Key Observations by the Supreme Court

1. Suppression of Material Facts is Abuse of Law
   • The Court ruled that criminal proceedings cannot be initiated by concealing important facts. The respondent failed to provide loan documents and suppressed the appellant’s letters demanding those documents.
   • The Court held that such suppression misled the Magistrate into issuing summons, which was an abuse of the legal process.
2. Duty of Magistrate Before Issuing Summons
   • The Court emphasized that before issuing a summons, a Magistrate must apply their mind and ensure there are sufficient grounds to proceed.
   • Simply recording the complainant’s statement under Section 200 CrPC is not enough. The Magistrate must question the complainant to ascertain the truth.
3. Litigants Who Suppress Facts Cannot Seek Justice
   • The Court reaffirmed that anyone who hides material facts or misleads the court cannot claim justice.
   • The law must be fair, and those who misuse it should not be allowed to proceed with their cases.

Final Ruling

• The Supreme Court quashed the complaint and set aside the High Court’s order, ruling in favour of the appellant.
• The pending criminal proceedings were dismissed because the complaint was based on misrepresentation and non-disclosure.

Legal Provisions 

• Section 138 of the NI Act – Deals with cheque dishonour due to insufficient funds.
• Section 200 of the CrPC – Requires the Magistrate to examine the complainant before issuing summons.
• Section 204 of the CrPC – Specifies conditions under which a Magistrate can issue summons.

Significance of the Judgment

• Prevents misuse of cheque bounce cases by ensuring that complainants disclose all relevant facts.
• Reinforces the duty of Magistrates to carefully scrutinize complaints before issuing summons.
• Strengthens legal safeguards against the abuse of criminal law for financial disputes.

The Supreme Court’s ruling protects individuals from wrongful criminal prosecution in cheque bounce cases. It highlights that justice should not be based on misleading or incomplete information. The judgment serves as a reminder that criminal law should be used fairly, and suppression of facts will not be tolerated.

Case Title: REKHA SHARAD USHIR versus SAPTASHRUNGI MAHILA NAGARI SAHKARI PATSANSTA LTD.

2). Supreme Court Rules Machine Used by Employees Can't Be Considered Purchase for 'Self-Employment' Under Consumer Protection Act"

Case Background

The Supreme Court recently clarified the definition of 'consumer' under the Consumer Protection Act, 1986. The case involved a petitioner who purchased a Laser Cutting and Bending Machine to improve the precision and cost-effectiveness of manufacturing dies.

However, after experiencing defects and operational difficulties with the machine, the petitioner filed a consumer complaint before the State Consumer Disputes Redressal Commission (Uttar Pradesh). The complaint was dismissedon the grounds that the machine was used for commercial purposes, making the petitioner ineligible to be considered a 'consumer' under Section 2(1)(d) of the Consumer Protection Act, 1986.

The petitioner then approached the National Consumer Disputes Redressal Commission (NCDRC), which upheld the dismissal. The petitioner challenged this decision before the Supreme Court.

Issues in the Case

1. Whether a person who buys a product for a business venture operated by employees, and not personally, can be considered a ‘consumer’ under the Consumer Protection Act?
2. Whether the petitioner’s purchase of the machine qualifies as ‘self-employment’ or a ‘commercial purpose’?

Court Observations and Ruling

Bench Composition

The case was heard by Justice AS Oka and Justice Ujjal Bhuyan.

Key Observations by the Supreme Court

1. Definition of 'Consumer' and Commercial Use
   • Under Section 2(1)(d) of the Consumer Protection Act, 1986, a buyer is not a consumer if the product is purchased for a commercial purpose.
   • However, an exception exists for buyers who use the product for self-employment.
2. Distinguishing the Present Case from Paramount Digital Colour Lab Case
   • The petitioner relied on Paramount Digital Colour Lab v. Agfa India, where the Supreme Court ruled that a machine used for self-employment could still fall within the definition of a consumer.
   • In that case, two unemployed graduates bought a machine for their own self-employment, which was considered non-commercial.
   • In contrast, in the present case, the petitioner was already running a business and purchased the machine to expand the business, not for self-employment.
   • The petitioner was not personally using the machine, but rather his employees were operating it, making it a commercial use.
3. Final Decision
   • Since the petitioner’s business was already established, and he did not personally use the machine, the Court ruled that he cannot be considered a consumer.
   • The Special Leave Petition (SLP) was dismissed, and the orders of the State Commission and NCDRC were upheld.
4. Option for Civil Suit
   • The Court allowed the petitioner to file a civil suit within four weeks and stated that he could rely on Section 14 of the Limitation Act, 1963, which allows the exclusion of time spent in pursuing other legal remedies.

Legal Provisions 

• Section 2(1)(d) of the Consumer Protection Act, 1986 – Defines who qualifies as a ‘consumer’ and excludes those purchasing goods for commercial purposes, except for self-employment.
• Section 14 of the Limitation Act, 1963 – Allows a litigant to exclude time spent in the wrong legal forum when calculating limitation periods for filing a case in the correct forum.

Significance of the Judgment

• Clarifies that buyers using products for a commercial venture operated by employees are not 'consumers'.
• Distinguishes between ‘self-employment’ and ‘commercial purposes’ under the Consumer Protection Act.
• Encourages businesses to seek remedies in civil courts instead of consumer forums if the purchase is for commercial purposes.
• Ensures that consumer protection laws are not misused by business entities to bypass normal commercial dispute resolution methods.

The Supreme Court ruled that a person who buys a product for business expansion and employs others to use it cannot claim to be a consumer under the Consumer Protection Act, 1986. This judgment sets an important precedent in determining who qualifies as a consumer, reinforcing that only individuals using products for self-employment can seek remedies under consumer law.

Case Details: VIRENDER SINGH v. M/S. DARSHANA TRADING CO. THR. ITS PROP. SANJAY SETH (DEAD) & ANR.| Special Leave to Appeal (C) No(s). 5510/2020

3). Kerala High Court Rules Order Under Section 263 of Income Tax Act Is Not a Closed Remand, No Need for Separate Challenge

Case Background

• The case revolves around Section 263 of the Income Tax Act, 1961, which allows the Principal Commissioner of Income Tax to revise an order if it is found to be erroneous and prejudicial to the interests of the revenue.
• In this case, the assessee’s assessment was completed under Section 143(3) read with Section 147 of the IT Act. However, the Commissioner of Income Tax (CIT) invoked Section 263 and held that the Assessing Officer had not conducted proper inquiries regarding the assessee’s claim for set-off of carry-forward depreciation while computing book profits under Section 115JB of the IT Act.
• The Commissioner set aside the assessment order and remanded the case back to the Assessing Officer for fresh assessment.
• The Assessing Officer then passed a revised order, which was challenged by the assessee before the Commissioner of Income Tax (Appeals). The appeal was dismissed.
• The assessee then appealed before the Income Tax Appellate Tribunal (ITAT), which dismissed the appeal on the grounds that the assessee should have challenged the Section 263 order separately before questioning the revised assessment.

Issues in the Case

1. Was the remand order passed by the Commissioner under Section 263 a "closed remand" or an "open remand"?
2. Did the assessee need to challenge the order under Section 263 separately, or could he challenge the revised assessment directly?
3. Did the ITAT err in dismissing the appeal for lack of maintainability?

Court Observations

• The Division Bench of Justices A.K. Jayasankaran Nambiar and Easwaran S. noted that the remand order under Section 263 was not a "closed remand".
• The Commissioner of Income Tax (CIT) had exercised suo moto revisional powers under Section 263, found errors in the assessment, and remanded the case for fresh consideration on merits.
• Since the revised assessment was made on remand, the assessee had the right to challenge it without separately contesting the Section 263 order.
• The ITAT made a mistake in holding that the assessee should have separately challenged the Section 263 orderbefore appealing against the revised assessment.

Court Ruling

1. The High Court ruled that the ITAT was wrong in dismissing the appeal on the ground of maintainability.
2. The order under Section 263 was an open remand, not a closed remand. This means the assessee was not required to challenge it separately.
3. The assessee had the right to challenge the revised assessment order without challenging the Section 263 order.
4. The High Court allowed the appeal in favor of the assessee and directed the ITAT to decide the appeal on merits.

Legal Provisions

• Section 263 of the Income Tax Act, 1961 – Allows revision of an assessment order if it is erroneous and prejudicial to revenue.
• Section 143(3) & Section 147 of the IT Act – Relate to regular assessment and reassessment.
• Section 115JB of the IT Act – Deals with book profit computation for Minimum Alternate Tax (MAT).

Significance of the Ruling

• Clarifies that remand orders under Section 263 should not be assumed to be closed unless explicitly stated.
• Protects taxpayers from unnecessary procedural burdens by ensuring they don’t need to challenge a Section 263 order separately before appealing the revised assessment.
• Ensures that ITAT properly considers appeals on merits instead of dismissing them on technical grounds.

The Kerala High Court ruled in favor of the assessee, emphasizing that a remand under Section 263 is an open remand, meaning that the assessee was not required to challenge it separately. The ITAT was wrong in dismissing the appeal, and the case must be heard on merits instead of being rejected on technical grounds. This judgment reinforces taxpayers' rights in appeal proceedings and prevents procedural hurdles from obstructing access to justice.

Case Title: Malabar Institute of Medical Sciences Ltd. v. The Deputy Commissioner of Income Tax

Case Number: ITA NO. 11 OF 2025

4). Supreme Court Supreme Court Criticizes HC Order Quashing Case Under S.482 CrPC, Says Sanction Validity Must Be Decided in Trial Court |PC Act

Case Background

• The case involved a disproportionate assets allegation against a bureaucrat who was accused of acquiring assets worth ₹26,88,057/- beyond his known sources of income between 2001-2008.
• An FIR was registered under Sections 13(2) read with 13(1)(e) of the Prevention of Corruption Act, 1988 (PC Act).
• The accused filed a discharge application before the trial court, which was rejected, as the court found a prima facie case against him.
• The accused then approached the High Court with a revision petition, which was also dismissed, confirming the trial court’s decision.
• Finally, the accused filed a quashing petition under Section 482 of the CrPC before the Madras High Court, arguing that:
  1. The sanction to prosecute him was invalid.
  2. The likelihood of conviction was low ("bleak conviction prospects").
• The Madras High Court quashed the FIR, accepting these arguments.
• The State appealed to the Supreme Court, challenging the High Court’s decision.

Issues in the Case

1. Did the High Court exceed its jurisdiction under Section 482 CrPC by quashing the case at the pre-trial stage?
2. Is the validity of the prosecution sanction a matter to be decided during the trial rather than at the pre-trial stage?
3. Can an FIR be quashed based on the assumption that conviction is unlikely?

Court Observations

• The Supreme Court bench comprising Justices P.S. Narasimha and Manoj Misra held that the Madras High Court acted improperly by conducting a mini-trial at the pre-trial stage.
• The High Court should have only determined whether a prima facie case existed, rather than predicting the chances of conviction.
• The Court noted that questions about invalid sanction and conviction prospects should be decided during the trial, not at the FIR stage.
• The Supreme Court criticized the High Court for considering factual disputes (e.g., the accused’s wife's real estate income, daughter’s gift, and errors in the sanction order), which were issues for the trial court.
• The Court reiterated a key principle from State of T.N. v. N. Suresh Rajan (2014) 11 SCC 709, stating:

  “A court should not appraise evidence and discharge an accused at the pre-trial stage as if it were passing an order of acquittal.”

Court Rulings and Decisions

1. The Supreme Court overturned the Madras High Court’s decision, holding that the quashing of the case was legally incorrect.
2. The trial should proceed, and any issues regarding sanction validity should be decided during the trial.
3. Delays in granting prosecution sanction do not automatically invalidate a criminal case.
4. The Court directed the trial to resume immediately, emphasizing that the case had already been delayed for 17 years.

Legal Provisions

• Section 482 of the Criminal Procedure Code (CrPC) – High Court’s power to quash criminal proceedings.
• Sections 13(2) read with 13(1)(e) of the Prevention of Corruption Act, 1988 – Governs disproportionate assets cases against public officials.
• State of T.N. v. N. Suresh Rajan (2014) 11 SCC 709 – Supreme Court ruling on limitations of pre-trial case quashing.

Significance of the Ruling

• Reaffirms that High Courts should not conduct mini-trials at the FIR stage.
• Clarifies that issues like invalid sanction and conviction likelihood must be determined during the trial.
• Prevents accused individuals from escaping prosecution based on premature legal arguments.
• Ensures that corruption cases against public officials proceed to trial instead of being dismissed on technical grounds.

The Supreme Court ruled in favor of the State, setting aside the Madras High Court’s decision to quash the FIR. The Court ordered an expedited trial, noting the unjustified 17-year delay. This judgment reinforces judicial discipline in pre-trial proceedings, ensuring that corruption cases are decided on their merits rather than being prematurely dismissed.

Case Title: STATE Vs. G. EASWARAN

5). Supreme Court Clarifies No Absolute Bar on HC Interference in S.482 CrPC Petition at Preliminary Investigation Stage

Case Background

• The case involved a criminal complaint against the petitioners for allegedly misappropriating funds of the Coimbatore Education Foundation Trust for personal use.
• The petitioners were accused of collecting ₹4,30,00,000/- from students in the name of the trust and misusing the money.
• Meanwhile, a civil dispute between the petitioners and the complainant was already pending before a court.
• The petitioners filed a petition under Section 482 of the CrPC before the Madras High Court, seeking to quash the FIR.
• The High Court dismissed the petition, stating:
  1. There was some material to proceed with the investigation.
  2. The matter was of a civil nature.
  3. The petitioners could submit documents to law enforcement authorities to prove their innocence.
• The petitioners challenged the High Court’s decision before the Supreme Court.

Issues in the Case

1. Can the High Court interfere in a criminal investigation at the preliminary stage under Section 482 of CrPC?
2. Did the Madras High Court correctly decide the quashing petition?
3. Should the case be reconsidered based on its merits?

Court Observations

• The Supreme Court bench, comprising Justices A.S. Oka and Ujjal Bhuyan, disagreed with the High Court’s approach.
• The Supreme Court clarified that there is no absolute rule that prevents a High Court from interfering with an investigation at an early stage.
• The Court stated:

  "There is no absolute rule that even if the investigation is at a preliminary stage, the Court exercising jurisdiction under Section 482 of the CrPC cannot interfere."

• The Court noted that the High Court failed to examine the petition on its merits and did not properly consider the plea for quashing the FIR.
• The Supreme Court criticized the High Court’s reasoning in Paragraph 7 of its order, stating that:
  • The High Court’s approach was flawed.
  • It did not conduct a proper hearing on whether the FIR should be quashed.
  • It merely suggested that the petitioners submit documents to law enforcement instead of deciding on the quashing petition.

Court Rulings and Decisions

1. The Supreme Court set aside the High Court’s order dismissing the petition under Section 482 CrPC.
2. The case was remitted back to the High Court for fresh consideration on merits.
3. The Supreme Court directed the High Court Registry (Judicial) to ensure that the petition is properly listed and heard again.

Legal Provisions 

• Section 482 of the Criminal Procedure Code (CrPC) – High Court’s power to quash FIRs and prevent abuse of the legal process.

Significance of the Ruling

• Clarifies that High Courts can interfere with investigations at an early stage in appropriate cases.
• Emphasizes that quashing petitions must be decided on merits, not dismissed based on procedural reasoning.
• Prevents wrongful criminal prosecution in cases that are primarily civil disputes.
• Ensures that High Courts properly exercise their jurisdiction under Section 482 CrPC.

The Supreme Court ruled in favor of the petitioners, setting aside the Madras High Court’s dismissal of their quashing petition. The case was sent back to the High Court for reconsideration on its merits, reinforcing the principle that High Courts can intervene in investigations even at an early stage when justified.

Case Details : KULANDAISAMY & ANR. v. STATE REPRESENTED BY ITS INSPECTOR OF POLICE & ANR.| Special Leave to Appeal (Crl.) No(s). 14318/2024