25 July 2025 Legal Updates

S.482 CRPC | SECOND QUASHING PETITION ON GROUNDS AVAILABLE EARLIER NOT MAINTAINABLE: SUPREME COURT

(a) Case Title:

• M.C. Ravikumar v. D.S. Velmurugan & Ors.

(b) Court:

• Supreme Court of India

(c) Date of Decision:

• July 23, 2025

(d) Bench:

• Justice Vikram Nath and Justice Sandeep Mehta

Facts of the Case

The appellant (M.C. Ravikumar) was engaged in travels and finance business and had entered into loan transactions with the respondents (money lenders) during 2005-2008. As security for these loans, he provided original property deeds of his properties in Thanjavur and Chennai. After clearing all outstanding amounts totalling Rs. 1,65,98,000/, he requested return of the original documents. When the respondents failed to return them, he alleged that they fraudulently executed a sham sale deed of his Thanjavur property. The complainant filed Criminal Complaint against the accused for offences under Sections 193, 406, 418, 420, 423, 468, 469 read with 34 and 120 of the Indian Penal Code.

Procedural History

• First Quashing Petition: The accused filed a petition to quash the criminal complaint, which was dismissed by the Madras High Court on December 22, 2021.
• Second Quashing Petition: After waiting 6 months, the accused filed another quashing petition based on the same grounds. This time, the High Court allowed the petition and quashed the entire criminal complaint on September 13, 2022.
• The complainant appealed to the Supreme Court against this order.

Legal Issue

"Whether a second quashing petition under Section 482 CrPC would be maintainable on the grounds/pleas that were available to be raised even at the time of filing/decision of the first quashing petition?"

Supreme Court's Decision

The Supreme Court allowed the appeal and held that:

• No New Grounds: The second quashing petition raised no new grounds that were unavailable during the first petition. All pleas were available to the accused at the time of the first petition.
• Bar Against Review: The High Court's action amounted to a review of its earlier order, which is expressly prohibited under Section 362 CrPC (now Section 403 of BNSS 2023).
• Inherent Powers Cannot Override Statutory Bar: Courts cannot use their inherent jurisdiction under Section 482 CrPC (now Section 528 BNSS) to circumvent the specific prohibition against review.
• Abuse of Process: Allowing successive petitions on the same grounds would enable accused persons to stall proceedings indefinitely.

Key Legal Principles

• Section 362 CrPC (Section 403 BNSS): Bars review of judgments except for clerical/arithmetical errors.
• Section 482 CrPC (Section 528 BNSS): Inherent powers cannot override specific statutory prohibitions.
• Second Quashing Petitions: Not completely barred but maintainable only when there are changed circumstances or new grounds that weren't available earlier.
• Burden of Proof: The petitioner must demonstrate changed circumstances warranting a fresh petition.

Outcome

The Supreme Court set aside the High Court's order quashing the criminal complaint and restored the original Criminal Complaint to the trial court

FOREIGN ENTITY DOING BUSINESS THROUGH TEMPORARY PREMISES IN INDIA LIABLE TO TAX : SUPREME COURT REJECTS HYATT INTERNATIONAL'S APPEAL

(a) Case Title:

• Hyatt International Southwest Asia Ltd. v. Additional Director of Income Tax

(b) Court:

• Supreme Court of India

(c) Date of Decision:

• July 24, 2025

(d) Bench:

• Justice J.B. Pardiwala and Justice R. Mahadevan

Key Facts

The Appellant Hyatt International Southwest Asia Ltd. - a company incorporated in Dubai, UAE was a Hotel consultancy and advisory services. They had a Strategic Oversight Services Agreement (SOSA) with Asian Hotels Limited, India for 20 years. The assessment years in consideration are 2009-10 to 2017-18 and the Tax Dispute Amount was approximately ₹24 crores across all assessment years.

Legal Issue

Whether Hyatt International Southwest Asia Ltd. has a "Permanent Establishment" (PE) in India under the India-UAE Double Taxation Avoidance Agreement (DTAA), making its income taxable in India.

Arguments

Appellant's Contentions (Hyatt): They had no fixed office or designated space in India exclusively for Hyatt’s use. The employees visited India only occasionally and temporarily. Their day-to-day hotel operations were handled by Hyatt India Pvt. Ltd., a separate Indian entity. Services were purely consultancy based, not operational control. There was no excusive right to use hotel premises for business activities.

Respondent's Contentions (Income Tax Department)

Hyatt exercised substantial control over hotel operations through SOSA. Hotel premises were used to carry on Hyatt's business. The long-term agreement (20 years) demonstrated permanence and stability. Compensation based on hotel performance showed active business involvement. The aggregate presence of employees constituted continuous business operations.

Legal Principles Applied

Permanent Establishment Test (From Formula One Case)

A Permanent Establishment requires:

1. Fixed Place of Business:

• Specific physical location

2. At Disposal Test:

• Enterprise must have right to use premises for business

Three Core Attributes:

• Stability: Enduring presence
• Productivity: Income-generating activities
• Dependence: Reliance on local infrastructure

DTAA Provisions

• Article 5(1): Defines PE as "fixed place of business through which business is wholly or partly carried on"
• Article 7(1): Business profits taxable only in residence state unless carried through PE in source state

Court's Analysis and Reasoning

1. Powers Under SOSA

The Court found that Hyatt had extensive control including: Appointing General Manager and key personnel, Implementing HR and procurement policies, Controlling pricing, branding, and marketing, Managing operational bank accounts and assigning personnel without owner's consent.

2. Key Findings

Hyatt's functions were core operational, not merely consultancy. Legal separation from Hyatt India Pvt. Ltd. didn't negate economic control. The hotel premises were effectively at Hyatt's disposal for business. The aggregate employee presence constituted permanent business operations. Profit-linked fees demonstrated active business participation.

Supreme Court's Decision

Appeals dismissed - Hyatt has PE in India. Hotel premises constitute a "fixed place of business" under Article 5(1) of India-UAE DTAA. Income from SOSA is attributable to Indian PE and taxable in India.

'NEGLECT & CRUELTY TOWARDS ELDERLY PARENTS A VIOLATION OF ARTICLE 21': ALLAHABAD HC SLAMS SONS' CONDUCT AFTER GOVT ASSESSES COMPENSATION TO FATHER

(a) Case Title:

• Ram Dular Gupta v. State of U.P. and 2 Others

(b) Court:

• Allahabad High Court

(c) Date of Decision:

• July 18, 2025

(d) Bench:

• Hon'ble Justice Mahesh Chandra Tripathi and Hon'ble Justice Prashant Kumar

Facts of the Case

The Petitioner Ram Dular Gupta (75+ year old senior citizen). Land acquisition compensation of Rs. 21,17,758/- was quantified but not released due to family dispute. Petitioner's two sons (Vijay Kumar Gupta and Sanjay Gupta) claimed rights to compensation, leading to a bitter family dispute. Sons allegedly subjected their elderly father to physical and emotional abuse, including physical assault (biting), after compensation was announced. Petitioner filed police complaint against his sons for atrocities.

Legal Issues

• Primary Issue: Release of land acquisition compensation
• Constitutional Issue: Elder abuse and violation of Article 21 (Right to Life with Dignity)
• Social Justice: Rights of elderly persons in Indian society

Court's Observations and Reasoning

1. On Elder Abuse

The Court made strong observations about elder abuse: Termed it a "grave concern" and "moral bankruptcy" of society. Stated that neglect, cruelty, or abandonment of elderly parents violates Article 21 of the Constitution. It emphasized that caring for aging parents is both a "sacred moral duty" and "statutory obligation" and called courts the "last bastion of compassion" when filial duty collapses.

2. Constitutional Perspective

The Court referenced Ashwani Kumar v. Union of India (2016) where the Supreme Court recognized:

• Rights of elderly persons as an "emerging situation" under Article 21
• Social justice as a "touchstone of nation building"
• Need for innovative application of constitutional principles to new challenges

Key Legal Principles Established

• Article 21 Protection: Elder abuse constitutes violation of right to life with dignity
• Judicial Intervention: Courts must protect vulnerable elderly when family fails
• Social Justice: Elder care is fundamental to constitutional values
• No Family Privacy Defense: Courts won't allow elder abuse under "family privacy" garb

Court's Decision

Directed release of entire Rs. 21,17,758/- to the petitioner (father). Sons tendered unconditional apology and assured no future misconduct. Despite abuse, petitioner agreed to voluntarily share portion with sons. Court warned of "stringent orders" if sons cause future problems.