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Recent Judgments by 50th CJI DY Chandrachud (October and November)

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 31-Dec-2024

The 50th Chief Justice of India (CJI), D Y Chandrachud, retired on 10th November 2024, with his final working day on 8th November 2024. True to his illustrious career, he continued to deliver landmark judgments in the final months of his tenure. Some of these notable rulings are covered below. 

GLAS Trust Company LLC v. Byju Raveendran & Ors. 

Date of Judgment: 23rd October 2024 

Bench: CJI D Y Chandrachud, Justices J B Pardiwala and Manoj Misra 

Facts of the Case:

  • The case arises from insolvency proceedings initiated under the Insolvency and Bankruptcy Code (IBC) against Think and Learn Pvt. Ltd. (Corporate Debtor), known as Byju's, an ed-tech company. 
  • The Board of Control for Cricket in India (BCCI), an operational creditor, filed a petition under Section 9 of the IBC citing unpaid operational debts of approximately INR 158 crore. 
  • Simultaneously, GLAS Trust Company LLC (appellant), representing lenders of Byju's Alpha Inc. (a subsidiary), filed claims as a financial creditor. 
  • Controversy arose over a settlement agreement between Riju Raveendran (acting personally) and BCCI, leading to the withdrawal of insolvency proceedings by the National Company Law Appellate Tribunal (NCLAT). GLAS challenged this decision, citing potential misuse of funds and lack of transparency. 

Observations of the Case:

  • Inappropriate Use of Rule 11 by NCLAT: 
    • The Supreme Court observed that the NCLAT improperly invoked Rule 11 of the NCLAT Rules, 2016, which grants inherent powers to the tribunal. 
    • Rule 11 cannot be used to bypass the structured process outlined in Section 12A of the IBC, which mandates 90% approval from the Committee of Creditors (CoC) for withdrawal of insolvency proceedings. 
  • Supreme Court's Use of Article 142: 
    • The Supreme Court invoked Article 142 of the Constitution of India, which empowers it to ensure "complete justice" in cases where statutory provisions or lower court judgments fall short of achieving fairness. 
    • It concluded that allowing the NCLAT's judgment to stand would undermine the statutory framework of the IBC and the principle of collective decision-making by creditors. 
  • Adherence to IBC Precedents: 
    • Citing Swiss Ribbons v. Union of India (2019) and Indus Biotech v. Kotak (2021), the Court reiterated that insolvency withdrawal is subject to strict compliance with the IBC's procedural safeguards. 
    • The high threshold of 90% CoC approval under Section 12A reflects the collective nature of insolvency proceedings and the need to balance the interests of all stakeholders. 
  • Restoration of CIRP: 
    • In light of these observations, the Supreme Court overturned the NCLAT judgment and restored the corporate insolvency resolution process (CIRP), ensuring that the interests of all creditors were upheld. 

In Re: Section 6A Citizenship Act 1955 (2024) 

Date of Judgment: 17th October 2024 

Bench: Chief Justice of India (CJI) D Y Chandrachud, Justices Surya Kant, MM Sundresh, JB Pardiwala, and Manoj Misra 

Facts of the Case: 

  • The case concerns Section 6A of the Citizenship Act 1955, which was added in 1985 through the Citizenship (Amendment) Act following the Assam Accord - an agreement between the Indian government and Assam movement leaders.  
  • Section 6A added special provisions for citizenship of migrants who came to Assam from Bangladesh, dividing them into two categories:  
    • Those who entered before 1st January 1966.  
    • Those who entered between 1st January 1966 and 25th March 1971.  
  • The cut-off date of 25th March 1971 was chosen because it was when Bangladesh declared independence, leading to a significant refugee crisis.  
  • The Assam Sanmilita Mahasangha, a civil society group from Guwahati, challenged this provision in 2012, arguing that having different citizenship rules for Assam versus other states was discriminatory.  
  • The petitioners also claimed the law violated fundamental constitutional principles including the right to cultural preservation, political rights of Assam's citizens, and the basic structure of India's democracy and federal system.  
  • The legal challenge questioned whether Parliament had the constitutional authority to create special citizenship provisions for one state (Assam) that differed from the rest of India.  

Observations of the Case: 

  • The Supreme Court upheld Section 6A of the Citizenship Act, 1955 as constitutionally valid by a 4:1 majority, affirming Parliament's legislative competence to enact Section 6A.  
  • Section 6A complies with Articles 6 and 7 of the Constitution of India, 1950, as it specifically addresses migration to Assam with rational cut-off dates (1st January 1966 and 25th March 1971) based on historical events including the Bangladesh liberation movement.  
  • The Court established three distinct classifications for immigrants in Assam:   
    • Pre-1966 migrants are deemed Indian citizens.  
    • 1966-1971 migrants may seek citizenship subject to eligibility conditions.  
    • Post 25th March 1971, migrants are classified as illegal immigrants subject to deportation.  
  • The Court rejected arguments that Section 6A violates Article 29(1), finding insufficient evidence that Assamese cultural and linguistic rights were impaired by the provision's implementation.  
  • The geographic specificity to Assam was upheld as reasonable, given the state's unique demographic impact from migration despite having a smaller land area compared to other border states.  
  • The dissenting opinion (Justice J B Pardiwala) held Section 6A as unconstitutional with prospective effect, citing temporal unreasonableness and procedural defects in the detection mechanism.  
  • The Court directed strengthening of Foreigners Tribunals and related statutory machinery to ensure time-bound implementation of the law's objectives.

State Of U.P. v. M/S. Lalta Prasad Vaish   

Date of Judgment: 23rd October 2024 

Bench: Chief Justice of India (CJI) D Y Chandrachud, Justices Hrishikesh Roy, Abhay S. Oka, B.V. Nagarathna, J.B. Pardiwala, Manoj Misra, Ujjal Bhuyan, Satish Chandra Sharma And Augustine George Masih 

Facts of the Case: 

  • The case revolves around a constitutional dispute between the States and Union regarding who has the power to regulate industrial alcohol/denatured spirit.  
  • There are multiple relevant constitutional provisions :  
    • Entry 8 of List II (State List) deals with "intoxicating liquors" and gives States power over production, manufacture, possession, transport, purchase and sale  
    • Entry 52 of List I (Union List) gives Parliament power over industries declared to be under Union control  
    • Entry 33 of List III (Concurrent List) allows both State and Union to regulate trade and commerce of products from industries under Union control  
  • The Industries (Development and Regulation) Act, 1951 (IDRA) was enacted by Parliament under Entry 52 of List I. Section 18G of this Act gives the Central Government power to regulate supply and distribution of products from scheduled industries.  
  • In 2016, the First Schedule of IDRA was amended to specifically exclude "potable alcohol" from Union control, while keeping other alcohol under its purview.  
  • Main issue raised in this case:  
    • Whether Entry 52 of List I of the Seventh Schedule to the Constitution overrides Entry 8 of List II;   
    • Whether the expression ‘intoxicating liquors’ in Entry 8 of List II of the Seventh Schedule to the Constitution includes alcohol other than potable alcohol;   
    • Whether a notified order under Section 18G of the IDRA is necessary for Parliament to occupy the field under Entry 33 of List III of the Seventh Schedule to the Constitution. 

Observations of the Case: 

Majority Opinion (8:1)

  • On Entry 8 of List II (State List):   
    • The entry is both industry-based and product-based in nature.   
    • The words following "that is to say" in Entry 8 are not exhaustive of its contents.   
    • The scope extends from raw materials to consumption of 'intoxicating liquor'.  
  • On Legislative Competence:   
    • Parliament cannot occupy the entire industry field merely through a declaration under Entry 52 of List I.   
    • State Legislature's competence under Entry 24 of List II is limited only to the extent covered by Parliamentary law under Entry 52 of List I.   
    • Parliament lacks legislative competence to control the intoxicating liquor industry under Article 246 read with Entry 52 of List I.  
  • On Interpretation of 'Intoxicating Liquor':   
    • The term is not limited to its popular meaning of alcoholic beverages producing intoxication.   
    • It encompasses alcohol that could be noxiously used affecting public health.  
    • The term includes:   
      • Rectified spirit  
      • ENA (Extra Neutral Alcohol)  
      • Denatured spirit d) Excludes final products containing alcohol (e.g., hand sanitizers)  

Dissenting Opinion (Justice B V Nagarathna)  

  • On Scope of Entry 8 List II:   
    • Deals exclusively with "intoxicating liquors" in the traditional sense.  
    • Industrial alcohol falls outside its purview.  
    • Misuse potential cannot be basis for interpretation.  
  • On Regulatory Framework:   
    • Denatured alcohol belongs to the "industrial alcohol" family.   
    • Section 18G of IDRA governs industrial alcohol under Entry 33(a) List III.   
    • Parliament alone competent to legislate on articles related to scheduled industry of "Fermentation Industries." 

Tej Prakash Pathak and Ors. v. Rajasthan High Court And Ors (2024) 

Date of Judgment: 7th November 2024 

Bench: Chief Justice of India DY Chandrachud, Justice Hrishikesh Roy, Justice PS Narasimha, Justice Pankaj Mithal and Justice Manoj Misra 

Facts of the Case:  

  • The case arises from a recruitment notification issued by the Rajasthan High Court on 17th September 2009, for filling 13 posts of Translators.  
  • The eligibility criteria required candidates to have a Master's degree in English Literature along with three years of experience in the High Court, with preference given to law graduates.  
  • Initially, the qualifications and recruitment process were governed by the Rajasthan High Court Staff Service Rules, 2002, which specified different criteria.  
    • These were amended over time, and the most significant change occurred in September 2009 when the minimum qualification was updated to a postgraduate degree in English Literature. 
  • A written examination was conducted on 19th December 2009, with 21 candidates appearing.  
  • After the examination, the Chief Justice of the High Court unilaterally decided that only candidates securing a minimum of 75% marks would qualify for selection.  
  • This decision resulted in only three candidates being selected, leaving most vacancies unfilled.  
  • Several unsuccessful candidates challenged the imposition of this cutoff, claiming that it amounted to a change in the rules of the game after the process had commenced.  
  • They argued that this violated principles of fairness and transparency under Articles 14 and 16 of the Constitution. 
  • The Rajasthan High Court dismissed the writ petition, asserting that there was no indefeasible right to appointment and that the benchmark ensured the selection of competent individuals.  
    • The matter was subsequently appealed to the Supreme Court. 

Observations of the Case: 

  • The Supreme Court held that introducing a 75% cutoff after the examination had concluded amounted to altering the "rules of the game" during the recruitment process.  
  • Such a post-facto change violated the principles of fairness and transparency guaranteed under Articles 14 and 16 of the Constitution. 
  • While the Court acknowledged that public authorities have the discretion to set benchmarks to ensure the selection of competent candidates, it emphasized that these standards must be announced before the recruitment process begins. 
  • The Court concluded that procedural changes in selection processes must not disrupt the fundamental principles of equality and non-arbitrariness. 
  • It directed that the recruitment be conducted transparently and in compliance with the pre-declared rules to ensure fairness to all candidates. 

Aligarh Muslim University v. Naresh Agarwal (2024) 

Date of Judgment: 8th November 2024 

Bench: Chief Justice of India DY Chandrachud, Justices Sanjiv Khanna, Surya Kant, JB Pardiwala, Dipankar Datta, Manoj Misra and SC Sharma 

Facts of the Case:  

  • In 1968, the Supreme Court in S. Azeez Basha v. Union of India held that the Aligarh Muslim University (AMU) is not a minority institution as it was not established by the Muslim minority community.  
  • In 1981, a two-judge bench in Anjuman-e-Rahmaniya v. District Inspector of Schools questioned the correctness of the Azeez Basha decision and referred the matter to a larger 7-judge bench.  
  • In 1981, the Aligarh Muslim University (Amendment) Act was passed, amending the long title and preamble of the AMU Act by removing the words "establish and".  
  • In 2002, the 11-judge bench in TMA Pai Foundation v. State of Karnataka framed a question on the indicia for an institution to be considered a minority educational institution. However, this question was not answered in that case.  
  • Proceedings were initiated in 2005 challenging the constitutional validity of AMU's reservation policy for Muslim students, arguing that AMU is not a minority institution.  
  • The Allahabad High Court in 2005 held that AMU is not a minority institution and its reservation policy is unconstitutional. This was affirmed by the division bench of the High Court in 2006.  
  • In 2019, a 3-judge Supreme Court bench noticed that the correctness of the Azeez Basha decision was yet to be determined and referred the matter to a 7-judge bench.  
  • The current 7-judge bench is tasked with determining the essential ingredients or indicia for an educational institution to be considered a minority institution under Article 30(1) of the Constitution.  

Observations of the Case: 

CJI Dhananjaya Y Chandrachud, Justices Sanjiv Khanna, J.B. Pardiwala, and Manoj Misra 

  • Article 30(1) protects the rights of minorities in establishing and administering educational institutions. 
  • Institutions must be established by minorities and retain minority character to qualify for protection. 
  • Pre-Constitution institutions can claim protection under Article 30(1) if they meet specific criteria. 
  • Azeez Basha's ruling that minority institutions lose status through statutory incorporation is overruled. 
  • AMU’s minority status will be decided by a regular bench based on these principles. 

Justice Surya Kant 

  • There is no conflict between earlier rulings (Kerala Education Bill and Azeez Basha). 
  • Sidhajbhai Sabhai's assertion that Article 30 rights are absolute was overruled by TMA Pai. 
  • References regarding Azeez Basha's judgment require proper procedural adherence and judicial authority. 
  • Institutions claiming minority status must pass the dual tests of minority establishment and administration. 

Justice Satish Chandra Sharma 

  • Article 30 rights require the institution to be established and administered by minorities. 
  • "Establish" entails bringing the institution into existence and maintaining control over its administration. 
  • Azeez Basha does not prevent minorities from establishing universities, but legislative provisions are crucial. 
  • Minority rights under Article 30 are significant but not absolute. 

Justice Dipankar Datta 

  • AMU was neither established nor administered by a religious minority, and thus does not qualify under Article 30(1). 
  • Appeals seeking minority status for AMU are dismissed.