Supreme Court Monthly Digest: February 2021

JUDGMENTS 1. Collusive Commercial Transactions With Corporate Debtor Will Not Constitute 'Financial Debt' Under IBC: Supreme Court [Case: Phoenix Arc Private Limited v. Spade Financial Services Limited; Citation: LL 2021 SC 55] A Bench comprising of Justices DY Chandrachud, Indu Malhotra and Indira Banerjee held that collusive or sham transactions with a corporate debtor will not amount to "financial debt" within the meaning of IBC. The Bench also held that a financial creditor which is not a "related party" to the corporate debtor at present can also be excluded from the Committee of Creditors if it is found that its removal of the "related party" label was a part of strategy to bypass the bar under Section 21(2), first proviso of the IBC. 2. Violation Of Fundamental Right To Speedy Trial Is A Ground For Constitutional Court To Grant Bail In UAPA Cases: Supreme Court [Case: Union of India v. KA Najeeb; Citation: LL 2021 SC 56] A bench comprising Justices NV Ramana, Surya Kant and Aniruddha Bose held that Section 43D (5) of UAPA per se does not oust the ability of Constitutional Courts to grant bail on ground of violation of Fundamental Right to Speedy Trial. It held, "Whereas at commencement of proceedings, Courts are expected to appreciate the legislative policy against grant of bail but the rigours of such provisions will melt down where there is no likelihood of trial being completed within a reasonable time and the period of incarceration already undergone has exceeded a substantial part of the prescribed sentence." The court observed thus while dismissing the appeal filed by NIA against an order of the Kerala High Court granting bail to the accused in palm chopping of Thodupuzha Newman College professor TJ Joseph in 2011. 3. 'It Provided Back Door Entry': Supreme Court Approves Scrapping Of LARSGESS Scheme For Railway Employees [Case: Manjit v. Union of India; Citation: LL 2021 SC 57] A bench comprising Justices DY Chandrachud, Indira Banerjee and Sanjiv Khanna upheld the termination of Liberalized Active Retirement Scheme for Guaranteed Employment for Safety Staff (LARSGESS) for Railway Employees. The Court was of the opinion that the Scheme provided for an avenue of a back door entry into the service of the railways. LARSGESS scheme, introduced in the year 2004 and modified in the year 2010, enabled certain category of railway employees (jobs related to safety, drivers, gangmen, etc.) to seek 'voluntarily retirement' after they reach the age group of 55-57 years or complete qualifying service of 33 years and they can seek appointment of their wards (children) in their place. 4. Corruption Is An Offence Against Society: Supreme Court Sets Aside Gujarat HC Judgment Acquitting An Accused [Case: State of Gujarat v. Bhalchandra Laxmishankar Dave; Citation: LL 2021 SC 58] A bench comprising of Justices Ashok Bhushan, R. Subhash Reddy and MR Shah observed that Offences under the Prevention of Corruption Act are offences are against the society. The bench made the observation while setting aside a Gujarat High Court judgment acquitting an accused in a corruption case. "An Appellate Court while dealing with an appeal against acquittal passed by the Learned trial Court, is required to bear in mind that in case of acquittal there is double presumption in favour of the accused. Firstly, the presumption of innocence is available to him under the fundamental principle of criminal jurisprudence that every person shall be presumed to be innocent unless he is proved guilty by a competent court of law. Secondly, the accused having secured his acquittal, the presumption of his innocence is further reinforced, reaffirmed and strengthened by the trial Court. Therefore, while dealing with the cases of acquittal by the trial Court, the Appellate Court would have certain limitations," the bench said. 5. Mere Recovery Of Currency Notes From Public Servant Does Not Constitute Offence U/s 7 Of Prevention Of Corruption Act: Supreme Court [Case: N.Vijayakumar v. State of Tamil Nadu; Citation: LL 2021 SC 59] A bench comprising Justices Ashok Bhushan, R. Subhash Reddy and MR Shah observed that mere possession or recovery of currency notes is not sufficient to constitute an offence under Section 7 of the Prevention of Corruption Act. To prove the charge, it has to be proved beyond reasonable doubt that accused voluntarily accepted money knowing it to be bribe. In this case, the accused, a Sanitary Inspector of Madurai Municipal Corporation, was acquitted in a corruption case by the Trial Court. The High Court, allowing the appeal filed by the State, reversed the Trial Court judgment and convicted the accused. In appeal, taking note of the evidence on record, the bench observed that the demand for and acceptance of bribe amount and cell phone by the appellant, is not proved beyond reasonable doubt. 6....

Supreme Court Monthly Digest: February 2021

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Supreme Court Monthly Digest: February 2021

Akshita Saxena

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