Complete Supreme Court Annual Digest 2025 [Part-IX]

One Time Settlement (OTS)Quashing of Criminal and Civil Proceedings upon Full and Final Settlement with Lender Banks – Peculiar Facts of the Case – OTS Amount Higher than FIR Allegation – Issue - Whether the Supreme Court should exercise its discretion to quash multiple criminal and civil proceedings arising from alleged loan defalcation and money laundering, in a scenario where the petitioners have agreed to deposit a substantial sum towards full and final settlement with the lender banks and investigating agencies - The Supreme Court allowed the Writ Petitions and quashed all criminal and civil proceedings against the petitioners, subject to the deposit of Rs. 5100 crores as a full and final settlement with the lender banks and investigating agencies on or before December 17, 2025 - This order was based on a consensus reached, where the petitioners agreed to deposit the amount demanded by the investigating agencies to put a quietus to the entire litigation - Held that if public money, settled in the One Time Settlement (OTS), was returned to the banks, the continuation of criminal proceedings would not serve any useful purpose - Held that the petitioners voluntarily agreed to deposit the full amount demanded to settle the matter and protect public money, the discretion to quash all related proceedings (CBI, ED, PMLA, Fugitive Act, SFIO, Black Money, and Income Tax) was deemed deserving of exercise - Held that the directions issued are strictly in the peculiar facts of this case and shall not be treated as precedent. Hemant S. Hathi v. Central Bureau of Investigation, 2025 LiveLaw (SC) 1139Partnership Act, 1932Section 14 - A contribution made by the partner to the partnership firm becomes the firm's property and neither the partner nor his legal heirs would have an exclusive right over the firm's property after the partner's death or retirement except the share in profit in proportion to the contribution made in partnership firm. No formal document is required to be made for transferring the property to the partnership firm, as the transfer occurs by virtue of the partner's contribution to the firm. However, a relinquishment deed could be made to formalise the transfer of property to the partnership firm. (Para 14 - 16) Sachin Jaiswal v. Hotel Alka Raje, 2025 LiveLaw (SC) 342 : 2025 INSC 275Section 69 - Effect of Non-Registration - A partner of an unregistered firm cannot institute a suit to enforce a right arising from a contract against another partner. The prohibition under Section 69(1) is mandatory and applies even if the partnership business has not commenced, as the partnership deed itself constitutes a contractual agreement. The appropriate legal remedy would have been to file a suit for dissolution of the partnership firm and rendition of accounts, which is permitted under the exception in Section 69(3). Section 69 is mandatory, and suits by partners of unregistered firms are void if enforcing contractual rights. The suit for recovery of money by the petitioners, being partners of an unregistered partnership firm, is not maintainable under Section 69(1) of the Indian Partnership Act, 1932. Sunkari Tirumala Rao v. Penki Aruna Kumari, 2025 LiveLaw (SC) 99Section 4 - 'Partnership', 'partner' 'firm'- Partnership is not separate juristic entity- Section 25 - partner is liable jointly and severally relation between persons acting for all - Partners are personally liable in law along with the firm- partners are jointly and severally liable - the partnership firm is a compendious term not distinct of the individuals who compose the firmPartnership is different from Company which is a separate juristic entity from its directors, having perpetual succession and limited liability of its Directors - Notice to partners could have been construed as notice to the partnership firm also - Even in absence of making a partnership firm an accused would be sufficient to make them liable - Thus, debt of the firm is the personal debt of a partner and the debt of the firm has to be incurred by each partner as a financial personal liability - There is no concept of vicarious liability of the partners - Held, no defect; complaint maintainable and permission is granted to complainant to arraign partnership firm also as an accused. Order of High Court is set aside and Appeal allowed. Held Aneeta Hada vs. Godfather Travels & Tours (P) Ltd., (2012) 5 SCC 661 not applicable to partnership firm. [Relied on Salomon vs. Salomon & Co. Ltd. [1987] AC 22 (hl); Para 6.10, 7.3, 7.5, 7.9, 7.16, 7.17, 7.19, 9.8] Dhanasingh Prabhu v. Chandrasekar, 2025 LiveLaw (SC) 708 : 2025 INSC 831Section 42 - Dissolution of firm on death of partner - Held, partnership firm with more than two partners does not dissolve upon death of one partner, provided the partnership deed contains a clause allowing firm's continuity - that principle of dissolution under section 42 is applicable where there are two partners in a partnership firm and would not apply...

Complete Supreme Court Annual Digest 2025 [Part-IX]

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Complete Supreme Court Annual Digest 2025 [Part-IX]

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