Tuesday, 13 October 2026

State Of Maharashtra vs Ramdas Shrinivas Nayak & Anr - The principle is well settled that statements of fact as to what transpired at the hearing, recorded in the judgment of the court, are conclusive of the facts so stated and no one can contradict such statements by affidavit or other evidence.

SCI (1982.07.28) in State Of Maharashtra vs Ramdas Shrinivas Nayak & Anr  [1982 SCC  (2) 463, Petition for Special Leave to Appeal (CRL) No. 1523 of 1982] held that; 

  • The principle is well settled that statements of fact as to what transpired at the hearing, recorded in the judgment of the court, are conclusive of the facts so stated and no one can contradict such statements by affidavit or other evidence. 

  • If a party thinks that the happenings in court have been wrongly recorded in a judgment, it is incumbent upon the party, while the matter is still fresh in the minds of the judges, to call attention of the very judges who have made the record to the fact that the statement made with regard to his conduct was a statement that had been made in error. 


Excerpts of the order;

The order of the Court was delivered by CHINNAPA REDDY, J. 


Abdul Rehman Antulay was the Chief Minister of the State of Maharashtra till January 12, 1982. While he was yet holding the office of Chief Minister one Ramdas Shrinivas Nayak, an erstwhile Member of the Maharashtra Legislative Assembly, professing a keen interest in clean administration and so keeping a watchful eye on centres of power and sources of corruption, filed a complaint against Shri Antulay, in the court of the Metropolitan Magistrate, 28th Court, Esplanade, Bombay charging him with the commission of offences punishable under ss. 161 and 185 of the Indian Penal Code and S of the Prevention of Corruption Act. The substance of the allegation was that Shri Antulay founded and controlled a number of trusts called by various names freely, and falsely making it appear that the Prime Minister and the Government of Maharashtra were either interested or had sponsored the trusts, collected contributions and donations for the alleged benefit of the Trusts by misuse of his position and power by dispensing favours and holding out threats, and, thereby placed himself in a position where he could juggle and manipulate a sum of over Rs. five crores. The learned Metropolitan Magistrate refused to entertain the complaint holding that it was not maintainable without the requisite sanction of the Government under s. 6 of the Prevention of Corruption Act. Against the order of the learned Metropolitan Magistrate, R.S. Nayak presented a Criminal Revision Application to the High Court of Maharashtra purporting to be under ss. 407 and 482 of the Code of Criminal Procedure and Art. 228 of the Constitution. The State of Maharashtra and Shri Antulay were impleaded as Respondents. During the course of the pendency of the Criminal Revision Application, Shri Antualy resigned his position as the Chief Minister of the State of Maharashtra. By an elaborate order dated April 12, 1982, Gadgil and Kotwal, JJ upheld the view that sanction was necessary and dismissed the Revision Application. While dismissing the application, the learned Judges noticed that an application had been made to the Governor of Maharashtra for grant of the requisite sanction and observed that the application should not be decided by the Law Minister or any other Minister, but that "it deserved to be decided by the Governor in his individual discretion". The State of Maharashtra though not aggrieved by the dismissal of the Criminal Revision Application, seeks special leave to appeal to this Court under Art. 136 of the Constitution against the judgment of the High Court of Maharashtra in so far as the judgment may be said to have directed the Governor of Maharashtra to exercise his individual discretion in deciding the question whether sanction should or should not be granted to prosecute Shri Antulay. The learned Attorney General, who appeared for the State of Maharashtra, raised the contention that it was not for the Court to decide whether in respect of a particular matter, the Governor should act in his discretion or with the aid and advice of the Council of Ministers and that under Art. 163(2), if any question arose whether any matter was or was not a matter as respects which the Governor was by or under the Constitution required to act in his discretion, the decision of the Governor in his discretion was final, and the validity of anything done by the Governor was not liable to be called in question on the ground that he ought not to have acted in his discretion. He also invited our attention to Art. 163 (3) which provides that the question whether any, and if so what, advice was tendered by Ministers to the Governor shall not be inquired into in any Court. The question posed by the learned Attorney General is no doubt an important question, probably worthy of serious consideration by this court under Art. 136 of the Constitution. But, in the present case, we do not propose to grant special leave under Art. 136 of the Constitution, solely in order to consider this question firstly because the Criminal Revision a Application itself has been dismissed by the High Court and secondly-and this is important-there was an express concession made in the High Court by the Respondents that in the situation presented by the facts of the present case, the Governor should act in the exercise of his individual discretion.


Gadgil, J. referred to the concession in the following words :-

"However, I may observe at this juncture itself that at one stage it was expressly submitted by the learned counsel on behalf of the respondent that in case if it is felt that bias is well apparently inherent in the proposed action of the concerned Ministry, then in such a case situation notwithstanding the other Ministers not being joined in the arena of the prospective accused, it would be a justified ground for the Governor on his own, independently and without any reference to any Ministry. to decide that question. Kotwal, J. put it even more explicitly and said:

  • "...At one stage it was unequivocally submitted by the learned counsel on behalf of the respondents in no uncertain terms that even in this case notwithstanding there being no accusation against the Law Minister as such if the court feels that in the nature of things a bias in favour of the respondent and against a complainant would be manifestly inherent, apparent and implied in the mind of the Law Minister, then in that event, he would not be entitled to consider complainant's application and on the equal footing even the other Ministers may not be qualified to do so and the learned counsel further expressly submitted that in such an event, it would only the Governor, who on his own, independently, will be entitled to consider that question."


When we drew the attention of the learned Attorney General to the concession made before the High Court, Shri A.K. Sen, who appeared for the State of Maharashtra before the High Court and led the arguments for the respondents there and who appeared for Shri Antulay before us intervened and protested that he never made any such concession and invited us to peruse the written submissions made by him in the High Court. We are afraid that we cannot launch into an inquiry as to what transpired in the High Court. It is simply not done. Public Policy bars us. Judicial decorum restrains us. Matters of judicial record are unquestionable. They are not open to doubt. Judges cannot be dragged into the arena. 

  • "Judgments cannot be treated as mere counters in the game of litigation".

  • (1) We are bound to accept the statement of the Judges recorded in their judgment, as to what transpired in court. We cannot allow the statement of the judges to be contradicted by statements at the Bar or by affidavit and other evidence. If the judges say in their judgment that something was done, said or admitted before them, that has to be the last word on the subject. The principle is well settled that statements of fact as to what transpired at the hearing, recorded in the judgment of the court, are conclusive of the facts so stated and no one can contradict such statements by affidavit or other evidence. If a party thinks that the happenings in court have been wrongly recorded in a judgment, it is incumbent upon the party, while the matter is still fresh in the minds of the judges, to call attention of the very judges who have made the record to the fact that the statement made with regard to his conduct was a statement that had been made in error. 

  • (2) That is the only way to have the record corrected. If no such step is taken, the matter must necessarily end there. Of course a party may resile and an Appellate Court may permit him in rare and appropriate cases to resile from a concession on the ground that the concession was made on a wrong appreciation of the law and had led to gross injustice; but, he may not call in question the very fact of making the concession as recorded in the judgment.


In Rev. Mellor, 7 Cox. P.C. 454 Martin was reported to have said: 

  • "we must consider the statement of the learned judge as absolute verity and we ought to take his statement precisely as a record and act on it in the same manner as on a record of Court which of itself implies an absolute verity".


In Ring Emperor v. Barendra Kumar Ghose (1): said, 

  • ".. these proceedings emphasise the importance of rigidly maintaining the rule that a statement by a learned judge as to what took place during the course of a trial before him is final and decisive; it is not to be criticised or circumvented; much less is it to be exposed to animad version".


In Sarat Chandra v. Bibhabati Debi (2) Sir Asutosh Mookerjee explained what had to be done:

  • "It is plain that in cases of this character where a litigant feels aggrieved by the statement in a judgment that an admission has been made, the most convenient and satisfactory course to follow, wherever practicable, is to apply to the Judge without delay and ask for rectification or review of the judgment"


So the judges record is conclusive. Neither lawyer nor litigant may claim to contradict it, except before the judge himself, but nowhere else.


On the invitation of Mr. Sen, we have also perused the written submissions made by him before the High Court. We have two comments to make: First, oral submissions do not always conform to written submissions. In the course of argument, counsel, often, wisely and fairly, make concessions which may not find a place in the written submissions. Discussion draws out many a concession. Second, there are some significant sentences in the written submissions which probabilise the concession. They are: 

  • "If in the existing case, the entire Council of Ministers becomes interested in the use of the statutory power one way or the other, the doctrine of necessity will fill up the gap by enabling the Governor by dispensing with the advice of His Council of Ministers and take a decision of his own on the merits of the case. Such a discretion of the Governor must be implied as inherent in his constitutional powers.. The doctrine of necessity will supply the necessary power to the Governor to act without the advice of the Council of Ministers in such a case where the entire Council of Ministers is biased. In fact, it will be contrary to the Constitution and the principles of democratic Government which it enshrines if the Governor was obliged not to act and to decline to perform his statutory duties because his Ministers had become involved personally. For the interest of democratic Government and its functioning, the Governor must act in such a case on his own. Otherwise, he will become an instrument for serving the personal and selfish interest of his Ministers." 


We wish to say no more. As we said, we cannot and we will not embark upon an enquiry. We will go by the judges' record.


We may add, there is nothing before us to think that any such mistake occurred, nor is there any ground taken in the petition for grant of special leave that the learned judges proceeded on a mistaken view that the learned counsel had made a concession that there might arise circumstances, under which the Governor in granting sanction to prosecute a Minister must act in his own discretion and not on the advice of the Council of Ministers. The statement in the judgment that such a concession was made is conclusive and, if we may say so, the concession was rightly made. [n the facts and circumstances of the present case, we have no doubt in our mind that when there is to be a prosecution of the Chief Minister, the Governor would, while determining whether sanction for such prosecution should be granted or not under s. 6 of the Prevention of Corruption Act, as a matter of propriety, necessarily act in his own discretion and not on the advice of the Council of Ministers.


The question then is whether we should permit the State of Maharashtra to resile from the concession made before the High Court and raise before us the contention now advanced by the learned Attorney General. We have not the slightest doubt that the cause of justice would in no way be advanced by permitting the State of Maharashtra to now resile from the concession and agitate the question posed by the learned Attorney General. On the other hand we are satisfied that the concession was made to advance the cause of justice as it was rightly thought that in deciding to sanction or not to sanction the prosecution of a Chief Minister, the Governor would act in the exercise of his discretion and not with the aid and advice of the Council of Ministers. The application for grant of special leave is, therefore, dismissed.

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(I) Per Lord Atkinson in Somasundaran v. Subramanian, A.I.R 1926 P.C. 136. 

(2) Per Lord Buckmaster in Madhusudan v. Chanderwati, A.I.R. 1917 P.C. 30.

Friday, 18 September 2026

Imp. Rulings - Sarfaesi Section 13(2) notice & Invocation of Guarantee.

 Imp. Rulings - Sarfaesi Section 13(2) notice & Invocation of Guarantee.

Index;

  1. NCLAT (2026.01.07) in Ujwal Gupta Vs. Union Bank of India & Anr. (Company Appeal (AT) (Ins) No. 2001 of 2024) held that; 

  2. NCLAT (2025.05.15) in Asha Basantilal Surana  Vs. State Bank of India & Ors. [(2025) ibclaw.in 359 NCLAT, Company Appeal (AT) (Insolvency) No. 84 of 2025  & I.A. No. 334 of 2025]

  3. NCLAT (2024.12.18) in Mavjibhai Nagarbhai Patel vs State Bank of India and Ors. [(2024) ibclaw.in 841 NCLAT, Company Appeal (AT) (Insolvency) No. 1702 of 2024 & Others] 

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Section 13(3) of SARFAESI reads as under;

  • # Section 13(3) The notice referred to in sub-section (2) shall give details of the amount payable by the borrower and the secured assets intended to be enforced by the secured creditor in the event of non-payment of secured debts by the borrower.


Section13(3) specifically provides that section 13(2) notice shall give details of the amount payable, meaning thereby that the amount has to be payable as on the date of section 13(2) notice. Thus recall notice/notice for invocation of guarantee must precede section 13(2) notice or section 13(2) notice, should cross‑refer the contractual basis for acceleration (e.g., “pursuant to Clause X of the Facility Agreement dated _, the entire facility has become immediately due and payable upon classification of the account as NPA”). 


Generic notice under section 13(2) of Sarfaesi is for enforcement of security interest. It cannot be a substitute of recall notice on borrower or notice of invocation of the guarantee deed unless the same is properly worded in accordance with the terms of guarantee deed.

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NCLAT (2026.01.07) in Ujwal Gupta Vs. Union Bank of India & Anr. (Company Appeal (AT) (Ins) No. 2001 of 2024) held that; 

  • “# 22. We have heard Ld. Counsel for the parties and perused the record. The question which has arisen for consideration in this Appeal is as to whether notice dated 29.02.2016 issued under Section 13(2) of the SARFAESI Act, 2002 which was addressed to the Appellant is sufficient to invoke guarantee and gives any cause of action to the financial creditor to file application under Section 95 of the Code.

  • # 27. Thus, in our considered opinion, it was a crystal clear communication not only to the Appellant but to all the addressees to discharge their liability with regard to the credit facilities extended to CD by the financial creditor and there appears no ambiguity in this. Since the appellant has extended guarantee by executing a deed and the principal borrower/ CD failed to pay the amount of credit facilities extended by the Financial Creditor and the liability of the principal borrower and guarantor is coextensive, this demand notice was sufficient communication to the appellant to discharge his liability under the guarantee deed towards the credit facility extended by the creditor to the CD and is sufficient invocation of guarantee. 

  • # 32. Thus, what has been highlighted by the aforesaid judgment is that it would be the terms and conditions of the agreement executed between the parties with regard to the guarantee which would be relevant to assess as to whether the guarantee has been sufficiently invoked or not. Therefore, whether a guarantee may be invoked by giving notice under Section 13(2) of the SARFAESI Act depends on the terms of the guarantee and the content of the notice. If the notice clearly demands payment from the personal guarantor in terms of the guarantee, it can be treated as an invocation of the guarantee. The facts and the wording of the notice are crucial in this determination. “

[ Link Synopsis ]

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NCLAT (2025.05.15) in Asha Basantilal Surana  Vs. State Bank of India & Ors. [(2025) ibclaw.in 359 NCLAT, Company Appeal (AT) (Insolvency) No. 84 of 2025  & I.A. No. 334 of 2025] held that.- 

  • # 8. The first question which has arisen for consideration in the Appeal is as to whether notice dated 09.10.2023 issued under Section 13(2) of the SARFAESI Act, 2002 which was addressed to the Appellant gives any cause of action to file application under Section 94(1).  . . . . . . 

  • # 12. Thus, the dismissal of the Appeal in the Amanjyot Singh’s case was on the facts of the said case and has no application in the facts of the present case. The invocation of personal guarantee has to be in accordance with the terms of the Guarantee Agreement which is a settled law. Clause 7 of the Guarantee Agreement does not require any particular mode and manner of the demand notice. When demand notice is issued against the personal guarantor asking the personal guarantor to discharge its liabilities, the guarantee stands invoked. Whether notice under Section 13(2) in a particular case invoked the guarantee or not depends on the words and intent of the notice. For finding out as to whether Notice under Section 13(2) invoked the personal guarantee, the letters and words of the Notice has to be looked into to come to any conclusion that whether personal guarantor has been asked to discharge its liabilities or not. In the facts of the present case, we are of the considered opinion that the Notice under Section 13(2) issued by the State Bank of India is a clear demand notice from the Appellant to pay the amount of Rs.28,56,64,336.06/-. 

  • # 14. The above judgment, thus, clearly holds that in a case where Notice under Section 13(2) makes a demand as per the Guarantee Agreement between the parties, the Notice has to be treated as notice for invocation of Bank Guarantee. We, thus, are of the view that the observation of the Adjudicating Authority made in paragraph 13 of the impugned order that application has been filed without any cause of action and is premature are unsustainable. 

[ Link Synopsis ]

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NCLAT (2024.12.18) in Mavjibhai Nagarbhai Patel vs State Bank of India and Ors. [(2024) ibclaw.in 841 NCLAT, Company Appeal (AT) (Insolvency) No. 1702 of 2024 & Others]

  • “# 16. The liability of the guarantor has to be read from the deed of guarantee. Further, the terms of the deed of guarantee are extremely material as the invocation of the guarantee was to be purely in accordance with the terms of guarantee……...It is clear from the reading of the clauses in the deed of guarantee that guarantee was given by the personal guarantor in unequivocal terms and the guarantee amount was to be paid by the guarantor once the guarantee was invoked.

  • # 18. In the present case, after the corporate debtor was admitted into the corporate insolvency resolution process …………When we see the section 13(2) notice under the SARFAESI Act as placed at pages 549 to 551 of the appeal paper book (“APB” in short) we find that there is clear indication of the names of all the personal guarantors therein which includes the present appellant (and also the other two appellants whose appeals are also under consideration before us). Paragraph 11 of section 13(2) of the SARFAESI Act addressed to the corporate debtor notice which was also forwarded to the personal guarantors including the appellant is relevant to be noticed which is as extracted below: ……

  • # 20. Since the guarantee deed specifically mentioned that the guarantee was in the nature of an on-demand guarantee, the default was to arise on the part of the guarantor only when the demand notice was issued as contemplated in the deed of guarantee. Thus, the period of limitation of the personal guarantor was to commence once the demand was made on the guarantor by respondent No. 1-bank. Hence, the notice dated June 4, 2021 issued by respondent No. 1-bank to the personal guarantor has to be treated to be notice on demand as contemplated in the deed of guarantee. The rule 7(1) notice dated June 28, 2021 had therefore rightly recorded that the debt was due on June 4, 2021 being the date of demand notice under section 13(2) of the SARFAESI Act and that the date of default occurred on August 4, 2021 on the expiry of 60 days from June 4, 2021.”

[ Link Synopsis ]

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Saturday, 12 September 2026

Strict Construction of Penal Statutes

Strict Construction of Penal Statutes


A passage from Maxwell’s The Interpretation of Statutes (12th Edition) : -

  • “The strict construction of penal statutes seems to manifest itself in four ways: in the requirement of express language for the creation of an offence;in interpreting strictly words setting out the elements of an offence; in requiring the fulfilment to the letter of statutory conditions precedent to the infliction of punishment; and in insisting on the strict observance of technical provisions concerning criminal procedure and jurisdiction.”


Key Indian case law discussing the Maxwell passage (12th Ed.) on strict construction of penal statutes


The quoted passage from Maxwell, The Interpretation of Statutes (12th Ed.) has been cited and elaborately discussed in several superior‑court judgments, particularly where the Court emphasises that penal liability must rest on clear statutory language, strict satisfaction of elements/conditions precedent, and strict adherence to procedural/jurisdictional requirements. The most significant decisions are:


1. R. Kalyani v. Janak C. Mehta, (2009) 1 SCC 516 (Supreme Court of India)

Context: Quashing of FIR under Sections 409/420/468 IPC; discussion of vicarious liability and strict construction of penal provisions.
How the passage is used: The Court quotes the Maxwell passage verbatim and uses it to reinforce that vicarious criminal liability cannot be fastened under general penal law unless the statute expressly creates it, and that all statutory conditions must be fulfilled to the letter before punishment can be imposed.api.sci.gov+1
Key takeaway: This is one of the most frequently cited Indian authorities for the four‑fold test; it treats the Maxwell extract as a governing principle for interpreting penal statutes and deeming provisions.


2. Aneeta Hada v. M/s Godfather Travels & Tours Pvt. Ltd., (2012) 5 SCC 661 (Supreme Court of India)

Context: Prosecution under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881—whether a company must be arraigned as accused before its officers/signatories can be prosecuted.
How the passage is used: The Constitution Bench relies on the Maxwell passage (via R. Kalyani) to hold that Section 141 creates a deemed/vicarious liability that must be strictly construed; hence, commission of offence by the company is a condition precedent, and the company must ordinarily be prosecuted.indiankanoon
Key takeaway: The Maxwell principle is deployed to insist on strict compliance with statutory conditions precedent before penal consequences follow—especially for deeming fiction and vicarious liability.


3. Sureshbhai Ugarchand Gadhecha v. State of Gujarat, Gujarat High Court (2018)

Context: Quashing of Section 138 NI Act proceedings against directors where the company was not arrayed as accused.
How the passage is used: The High Court reproduces the Maxwell passage and applies it to conclude that arraignment of the company is imperative because penal liability under Section 141 is vicarious and must be strictly construed.casemine
Key takeaway: Shows the Maxwell test being applied at the High Court level to quash proceedings where a condition precedent (company as accused) was not met.


4. Fuleshwar Gope v. Union of India, 2024 INSC 718 (Supreme Court of India, judgment dated 23‑09‑2024)

Context: Challenge to sanction and cognizance under UAPA; discussion of strict adherence to statutory procedure for sanction.
How the passage is used: While the primary focus is on sanction procedure, the judgment reiterates the general principle that penal statutes and their procedural conditions must be strictly followed, and cites R. Kalyani (which contains the Maxwell quote) as part of the interpretive framework.api.sci.gov
Key takeaway: Demonstrates continued reliance on the strict‑construction lineage in special penal statutes (UAPA) where procedure and jurisdiction are treated as mandatory.


5. M/s Balaji Traders v. State of U.P., Supreme Court of India, judgment dated 05‑06‑2025

Context: Quashing of summons under Section 387 IPC (putting person in fear of death/grievous hurt in order to commit extortion).
How the passage is used: The Court explicitly quotes the Maxwell passage (via R. Kalyani) to underscore that penal provisions must be strictly interpreted and no ingredient can be read in that the statute does not prescribe; however, it also clarifies that Section 387 does not require actual delivery of property (unlike Section 383/384).
Key takeaway: Illustrates the Maxwell principle being used both to confine the scope of a penal provision (no extra ingredients) and to reject a hyper‑technical reading that would defeat the plain statutory design.


How courts typically apply the four‑fold Maxwell test

Indian courts generally use the passage to support the following propositions:

  1. Express language for creation of offence

No offence/vicarious liability under general penal law unless the statute clearly provides for it.

  1. Strict interpretation of elements of the offence

Ambiguities in the definition/ingredients are resolved in favour of the accused; courts will not stretch language to create liability.

  1. Fulfilment to the letter of conditions precedent

Especially for deeming fictions (e.g., Section 141 NI Act) and sanction regimes (e.g., UAPA Section 45), courts insist on exact compliance before punishment can follow.

  1. Strict observance of technical provisions on procedure and jurisdiction

Defects in mandatory procedural steps (sanction, cognizance, jurisdiction) can vitiate proceedings, particularly where the statute uses negative/mandatory language.

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