1. A claim severed, a clock expired
Srinivasa Reddy Velagala v. Sravanthi Infratech Pvt Ltd — 2026 INSC 835 | Civil Appeal No. 876 of 2021 | Pardiwala and Manoj Misra JJ
Subject matter. Insolvency — what qualifies as operational debt under Section 5(21) IBC, and limitation for a Section 9 application.
Facts. An EPC contract stalled after non-payment; the contractor suspended work but neither side invoked the termination clause. The Section 9 application claimed both contract dues under the payment schedule and separate sums for suspension, idling and demobilisation. Liability was acknowledged on 5 January and 3 February 2012, after which the creditor did nothing for over four years, sending legal notices in July and September 2014 and July 2015, none of which drew a reply. The NCLT admitted the application; the NCLAT affirmed on 1 February 2021.
Questions of law. Whether the contract stood frustrated by efflux of time; whether the claimed sums were operational debt; whether a pre-existing dispute barred admission; and whether the application was time-barred.
Findings. The contract subsisted — Section 56 of the Contract Act addresses supervening impossibility, and frustration cannot be self-induced by a party’s own breach. The claim was split: contract payments were operational debt as consideration for goods and services, but idling and demobilisation charges were damages, incapable of being operational debt until assessed and crystallised by a competent court. No pre-existing dispute existed; silence alone proves nothing, but seven years of total silence across repeated notices was strong evidence the claims were not disputed. The application nonetheless failed on limitation, because Section 18 of the Limitation Act requires acknowledgment by the party against whom the action lies, so the creditor’s own notices could not extend time. Both tribunal orders set aside, with liberty to pursue the contractual forum.
Significance. Tribunals now have a workable rule for mixed claims: invoice dues and damages from the same contract must be severed rather than admitted together. It restates that the IBC gives no fresh lease of life to time-barred debt, and corrects a recurring Section 18 error. The Registry was directed to circulate the judgment to every NCLT in the country, marking it as operating guidance rather than a fact-bound ruling.—
2. The clock that winding up could not stop
Mageba Bridge Products Pvt Ltd v. M/s Trade Centre — 2026 INSC 839 | Civil Appeal No. 10658 of 2026 | Pardiwala and K. Vinod Chandran JJ
Subject matter. Limitation — whether time spent in winding-up proceedings is excludable under Section 14 when a recovery suit is later filed.
Facts. A supplier sued for ₹23,41,693 on unpaid invoices, the earliest pair dated 30 January 2006 and the last 6 March 2007. A demand was raised on 3 June 2008; the buyer replied on 1 August 2008 admitting three specific invoices, one of which had already been paid in December 2007 and did not even appear in the plaint schedule. A winding-up petition was filed on 10 February 2009; the Company Court found a genuine dispute — the buyer alleged its own employee had fabricated goods-receipt documents — and relegated the creditor to civil remedy, permitting a suit within three months of disposal. The suit came on 5 June 2010. The trial court dismissed it under Section 69(2) of the Partnership Act; the first appellate court reversed and decreed ₹24,36,105 with 6% interest.
Questions of law. Whether the firm’s registration was proved so as to lift the Section 69(2) bar; whether the winding-up period was excludable under Section 14; and whether a Company Court can extend limitation for a subsequent suit.
Findings. Registration was proved — the Registrar of Firms’ memorandum showed registration number L73931 as on 14 May 2010, corroborated by a certified Form VIII admitted under Order XLI Rule 27. On limitation the Court applied Yeswant Deorao Deshmukh (1950), which refused exclusion of time in insolvency proceedings because the relief sought was different and the procedure widely divergent, and read Jignesh Shah in reverse: initiating a winding-up proceeding, which may or may not enable recovery, does not affect limitation for a money suit. The Company Court’s three-month permission gave nothing, since it neither extended limitation nor was competent to do so. The suit rested on discrete invoices rather than a running account, so payment against separately admitted bills was neither part-payment nor acknowledgment. On the two secured bills, even the company petition’s filing date fell outside limitation, making the Section 14 question academic on those facts.
Significance. It closes a gap creditors have used to bridge delay by treating the company petition as a good-faith prior proceeding that stops the clock. The sharper warning is that a Company Court’s leave to sue is not an extension of limitation — creditors relying on it may find the suit dead on arrival. Winning the threshold point can still lose the case.—
3. One judgment, one appeal
Bassanna (deceased) by LRs v. Bhimanna — 2026 INSC 838 | Civil Appeal Nos. 9923–9924 of 2026 | Ujjal Bhuyan and Atul S. Chandurkar JJ
Subject matter. Civil procedure — maintainability of a single composite appeal under Section 96 CPC against a common judgment in two consolidated suits.
Facts. The same plaintiff filed O.S. 14 of 1986 seeking a declaration that a 1977 sale deed over eight acres eleven guntas was void, and O.S. 135 of 1987 seeking a permanent injunction over four acres five guntas of adjoining land. On the common defendant’s own application under Section 151, the suits were clubbed on 16 June 1988 and common evidence recorded. Both were dismissed by a common judgment on 7 December 1990. The plaintiff filed one appeal, annexing certified copies of the judgment and both decrees, seeking dispensation under the proviso to Order XLI Rule 1(1), and paying the court fee calculated for two separate appeals. The first appellate court allowed it in 2007. The defendants raised maintainability for the first time in second appeal, and the Karnataka High Court allowed both second appeals in 2022 purely on that ground, setting aside the decree without any adjudication on merits.
Questions of law. Whether a composite appeal against a common judgment in two suits by the same plaintiff is maintainable, where both decrees were filed, dispensation sought and the full court fee for two appeals paid.
Findings. Maintainable. Every statutory ingredient of Section 96 read with Order XLI Rule 1 was satisfied; the only shortfall was a second memorandum of appeal, a deficiency of form rather than substance and curable. Res judicata attaches to a judgment and not a decree, so where there has been one trial, one finding and one decision, two drawn-up decrees do not create two independent adjudications capable of binding each other — following the Nagpur High Court in Manohar Vinayak and this Court in Narhari v. Shankar. Applying Charan Singh v. Ram Saroop, the High Court should at least have alerted the plaintiff and permitted the defect to be cured. The Court expressly preserved the categories that still require separate appeals: different plaintiffs in clubbed suits, and a suit plus counterclaim both dismissed. The Himachal Pradesh Division Bench view in Ramesh Chand was approved; the second appeals were restored for fresh decision on merits.
Significance. Read with Basudev from the previous day, both limbs of a question that has produced conflicting High Court practice for decades are now covered. The stronger point concerns consequences: a High Court that finds an appeal defective cannot use that finding to wipe out an appellate decree and leave the litigant with no adjudication at all. Procedure is the handmaid of justice, not a sword.—
4. The order that must be told
Union of India v. Sunil Biyani — 2026 INSC 849 | Criminal Appeal arising out of SLP (Crl.) No. 12535 of 2026 | Dipankar Datta and Sheel Nagu JJ
Subject matter. GST enforcement — interim protection on dismissal of a pre-arrest bail plea, and the duty to communicate an arrest authorisation under Section 69 CGST Act.
Facts. The DGGI, Mumbai Zonal Unit was investigating M/s Alphaneon Techsolutions Pvt Ltd and group entities for wrongful availment and passing of input tax credit without supply, circular invoicing and non-payment of GST on imported services. The respondent, present during inspection, received three summonses under Section 70 but sought adjournments and applied for anticipatory bail, rejected by the Sessions Court on 14 October 2025. Before the Bombay High Court the department affirmed that no Section 69 order had been passed. On 13 February 2026 the High Court rejected the application precisely because, absent such an order, no apprehension of arrest arose — yet directed that the respondent not be arrested for one week from intimation of any future Section 69 order. The Union appealed against that direction alone; the refusal of bail was never challenged.
Questions of law. Whether a court dismissing a pre-arrest bail application as not maintainable can nevertheless grant protection from arrest; and whether a Section 69 order must be communicated to the person whose arrest is authorised.
Findings. On the first, no. Interim relief is only in aid of and ancillary to the main relief — the principle from the five-judge Bench in Madan Gopal Rungta (1951), applied to criminal matters in Hema Mishra, where once a petition fails, incidental relief against arrest cannot survive. The Court extended this expressly to pre-arrest bail, whatever the ground of non-maintainability. On the second, yes. Since Radhika Agarwal holds that a person merely summoned under Section 70 is not an accused, and a Section 69 order recording reasons to believe is a precondition to maintaining a bail application, non-communication creates a catch-22: the person can neither apply before the order is passed nor learn of it in time to challenge it. Reading the requirement in through natural justice, and relying on Sushila Aggarwal and Gurbaksh Singh Sibbia against over-restricting anticipatory bail, the Court noted that Rule 8 of the CGST Rules already compels every registrant to furnish an email address and mobile number, so electronic service is available alongside BNSS modes. Without such communication, the question of arrest would not arise.
Significance. The judgment does two opposite-looking things, both consequential. It removes a device High Courts have used to soften a refusal, affecting a large volume of anticipatory bail practice well beyond GST. Simultaneously it creates a new, enforceable procedural right for taxpayers facing arrest under Section 69, making the authorisation order amenable to judicial review before arrest rather than after. The Court confined its observations to the point of law and directed the investigation to proceed uninfluenced.—
5. The accessory that served two masters
M/s Carestream Health India Pvt Ltd v. Commissioner of Customs — 2026 INSC 837 | Civil Appeal No. 3440 of 2025 | Sanjay Kumar and Sanjeev Sachdeva JJ
Subject matter. Customs classification — the reach of Rule 2(b) of the Chapter 90 Notes and when an accessory falls to residuary heading 9033.
Facts. The importer brought in Dryview 6850 Laser Imagers from China under a bill of entry dated 2 April 2013, declaring them under CTH 9018 90 19 as other diagnostic instruments and apparatus. The device is a printer using dry laser technology to develop images on film; it interfaces with MRI, CT, mammography, radiography and PACS systems but has no diagnostic capability of its own. The Assistant Commissioner reclassified the goods under residuary CTH 9033 00 00 on 24 June 2013, affirmed on appeal on 10 March 2014 and by CESTAT Chennai on 21 August 2024. The rate differential was 2.5%, producing a demand of ₹5,21,616.
Questions of law. Whether the imager is a diagnostic apparatus under CTH 9018 90 19; and whether an accessory usable with machines falling under more than one tariff heading attracts Rule 2(b) of Note 2 to Chapter 90 or is relegated to Rule 2(c).
Findings. The imager is not a diagnostic apparatus, having no diagnostic capability and depending on inputs from equipment that does. Applying the functional test from C-Net Communication, it neither aids nor augments the medical equipment feeding it; the diagnostic machine is complete without it, and the imager performs only the ancillary function of transferring data to film. It is therefore an accessory, and the three-judge decision in Annapurna Carbon confirms that the same item may be an accessory to more than one kind of instrument. On Rule 2(b), the phrase “solely or principally” distinguishes accessories tied to one heading from those usable across headings. The imager worked with ultrasound scanners, MRI and echocardiographs under 9018, but equally with CT apparatus and X-ray generators under 9022. Since those headings carried tariff duties of 7.5%, 10% and 15% respectively, clubbing a single accessory with machines attracting divergent rates defies logic and rationale. Rule 2(c) applied and residuary 9033 was correct. A belated claim under Notification No. 12/2012 failed, both because the notification lists 9018 to 9022 without mentioning 9033 and because the importer never established compliance with its conditions, raising the point for the first time in this Court.
Significance. It supplies a clean test that has been argued inconsistently before tribunals: cross-heading compatibility defeats Rule 2(b) altogether. For importers of interfacing and peripheral equipment across medical devices, instrumentation and laboratory sectors, versatility now pushes goods toward the residuary heading rather than the beneficial one — and a product catalogue advertising broad compatibility can become evidence against the classification claimed.—
6. Two records, one death
Lahra Bai Tamre v. State of Chhattisgarh — 2026 INSC 840 | SLP (Crl.) No. 728 of 2026 | Vikram Nath and Sandeep Mehta JJ
Subject matter. Custodial death — adequacy of public law compensation, and transfer of investigation where the state has failed to act on a judicial inquiry.
Facts. The deceased, aged 34, was arrested on 18 January 2024 under Section 34(2) of the Chhattisgarh Excise Act for possessing six litres of Mahua liquor valued at ₹1,200, an offence carrying up to three years. Remanded to Central Jail, Bilaspur, he was referred to hospital on 21 January and died on 22 January. The jail’s medical record attributed death to cardiopulmonary arrest with aspiration pneumonitis, diagnosing alcohol withdrawal and delirium tremens, and mentioned no injury. The post-mortem, conducted in the magistrate’s presence, recorded six external injuries and attributed death to cardio-respiratory arrest from a head injury caused by a hard blunt object, dating the injuries at roughly one day, two days, and two to six days old. A Section 176 CrPC inquiry report dated 22 July 2024 confirmed death from head injury complications. No FIR followed. The High Court, on 3 October 2024, held custodial violence had caused the death yet awarded ₹1 lakh with no direction for registration or investigation. On this Court’s order of 28 July 2026 the Principal Secretary (Home), DGP and DG (Prisons) appeared by video on 4 August; the DGP maintained no case could be registered because the inquiry report had not reached the police.
Questions of law. Whether the compensation awarded was commensurate with the established breach; whether an independent investigation was warranted given sustained state inaction; and whether the conduct of officials who withheld the inquiry report should itself be investigated.
Findings. The DGP’s explanation was held to be a cover-up story and patently false and wholly reprehensible, since the state’s own reply before the High Court had disclosed that the inquiry was instituted and its report awaited; the collective stance of the three senior officers was described as sacrilegious. The divergence between the jail medical record and the post-mortem was read as a clear attempt to mislead the inquiry, aggravated by the post-mortem report surfacing only after this Court’s direction. Given the ages of the injuries, the possibility that they were sustained across the custody period could not be ruled out. Investigation was entrusted to the CBI, with a regular criminal case to be registered forthwith by a senior officer, complete records to be transmitted by the DGP within a week through a special messenger, and the conduct of the defaulting officials made part of the same investigation. Interim compensation of ₹25 lakh was directed within four weeks, with the final quantum to be fixed when the petition is decided. Listed again on 13 October 2026.
Significance. It is a working template for what a constitutional court should do when a High Court finds custodial violence proved but stops at a token award. Three elements stand out: compensation was treated as interim and revisable, so an inadequate figure does not close the matter; failure to act on a Section 176 report was itself made a subject of criminal investigation rather than left to departmental discipline; and the divergence between a jail medical record and a post-mortem was treated as evidence of institutional cover-up. The reportable endorsement makes the ₹25 lakh interim figure citable, and it is likely to become a reference point in custodial death litigation.