List of Current Affairs

Source: Supreme Court  

Why in News? 

Recently, the bench of Justices Vikram Nath and Sandeep Mehta  has held that vehicle owners cannot be denied interim custody of their vehicles seized under the NDPS Act if they prove the vehicle was used for transporting narcotics without their knowledge or involvement. The Court clarified that the 2022 Disposal Rules cannot override the NDPS Act or restrict Special Courts from granting interim release when the owner is found unconnected to the offence. 

• The Supreme Court held this in the matter of Denash Versus The State Of Tamil Nadu (2025). 

What was the Background of Denash v. The State Of Tamil Nadu (2025) ? 

• The appellant was the registered owner of a lorry bearing registration number TN 52 Q 0315 (Ashok Leyland, 14 wheeler), which was lawfully engaged in commercial transportation activities. 
• The vehicle had been hired for transporting 29,400 metric tonnes of iron sheets from M/s S.S. Steel and Power, Chhattisgarh to Ashok Steels, Ranipet, Tamil Nadu, demonstrating legitimate business purpose. 
• The vehicle was assigned to four persons for the transit journey: driver Kannan @ Venkatesan (accused No. 1), Deva (accused No. 2), Senthamalivalavan (accused No. 3), and Tamil Selvan (accused No. 4). 
• On 14th July 2024, during transit, officers of Police Station Neyveli Township intercepted and conducted a search of the vehicle at their checkpoint. 
• Upon search, 1.5 kilograms of Ganja were discovered concealed beneath the driver Kannan's seat, and an additional 1.5 kilograms each was recovered from the personal possession of the other three accused persons, totaling 6 kilograms of contraband. 
• All four accused persons present in the vehicle were immediately arrested at the scene, and First Information Report No. 220 of 2024 was registered at Police Station Neyveli Township, District Cuddalore, for offences punishable under Sections 8(c), 20(b)(ii)(B), 25 and 29(1) of the Narcotic Drugs and Psychotropic Substances Act, 1985. 
• Following completion of investigation, a chargesheet was filed against the four accused persons for the offences under the NDPS Act, and significantly, the appellant-owner was not arraigned as an accused in the report filed under Section 173(2) of the Code of Criminal Procedure. 
• Being aggrieved by the continued detention of his valuable commercial transport vehicle, the appellant filed Criminal Miscellaneous Application No. 5495 of 2024 under Section 497 of the Bharatiya Nagarik Suraksha Sanhita (erstwhile Section 451 CrPC) before the Additional District Judge/Presiding Officer, Special Court under Essential Commodities Act, Thanjavur, seeking interim release of the seized vehicle on supurdagi pending the conclusion of the criminal trial. 

What were the Court’s Observations? 

• Lower Court Observation  
  • The Special Court, vide order dated 9th September 2024, dismissed the appellant's application for interim custody, holding that vehicles seized under the provisions of the NDPS Act were not amenable to release on supurdagi by invoking Sections 451 and 452 of CrPC (Sections 497 and 498 BNSS), as the same was liable to confiscation under Section 63 of the NDPS Act. 
  • The Madras High Court, in its impugned judgment dated 20th December 2024, held that pursuant to the introduction of the Rules of 2022, the Drug Disposal Committee alone possessed exclusive authority and jurisdiction to adjudicate upon the disposal of property including seized conveyances, thereby divesting all other forums including the Special Court of such jurisdiction. 
  • The High Court further observed that since the Rules of 2022 vested exclusive jurisdiction with the Drug Disposal Committee, it could be presumed that the Committee was empowered to consider requests for interim release of seized conveyances, and accordingly dismissed the appellant's revision petition, compelling him to approach the Supreme Court by way of special leave petition. 
• Supreme Court Judgment  
  • The Supreme Court held that the Narcotic Drugs and Psychotropic Substances (Seizure, Storage, Sampling and Disposal) Rules, 2022 are merely supplemental to the parent NDPS Act and cannot override or divest the Special Courts of their jurisdiction to entertain applications for interim custody or release of seized conveyances under Sections 451 and 457 of CrPC (Sections 497 and 503 of BNSS). 
  • The Court observed that Sections 60(3) and 63 of the NDPS Act create a statutory framework wherein the power to determine confiscation vests exclusively in the Special Court, and where an owner proves absence of knowledge or connivance in the transportation of contraband, the vehicle cannot be confiscated merely because it was used in the commission of an offence under the Act. 
  • The Court held that confiscation being a measure resulting in deprivation of property must conform to the basic tenets of natural justice and must be preceded by a prior hearing, and any interpretation that deprives a bona fide owner of judicial scrutiny would be wholly inconsistent with the statutory scheme of the NDPS Act and contrary to fundamental principles of natural justice. 
  • Upon examining the peculiar facts of the case, the Court noted that the appellant was the lawful owner whose vehicle was commercially engaged in transporting 29,400 metric tonnes of iron sheets, he was not arraigned as an accused, and the chargesheet contained no material suggesting his knowledge or connivance in the offence, thereby establishing his bonafides. 
  • The Court concluded that it would be highly improbable that the appellant would knowingly jeopardize his costly vehicle, valuable consigned goods, and business goodwill by permitting transportation of 6 kilograms of Ganja, and it can safely be presumed that the contraband was procured by the drivers and khalasis without the appellant's knowledge or connivance. 
  • Drawing upon the precedents in Bishwajit Dey v. State of Assam (2025) and Tarun Kumar Majhi v. State of West Bengal (2025), the Court held that the provisions of the NDPS Act do not bar the concerned Court from exercising its discretion to release the vehicle in interim custody where circumstances warrant such relief to a bona fide owner. 
  • Accordingly, the Court set aside the impugned judgment and directed that the seized vehicle bearing Registration No. TN 52 Q 0315 shall be released on supurdagi to the appellant on such terms and conditions as the Special Court may impose, while clarifying that trial Courts retain flexibility to take different views if the facts of a case so warrant. 

What is Section 60 of the NDPS Act ? 

• Overview 
  • Section 60 of the Narcotic Drugs and Psychotropic Substances Act, 1985 deals with the liability of illicit drugs, substances, plants, articles and conveyances to confiscation when any offence punishable under the NDPS Act has been committed. 
• Section 60(3): Protection for Bona Fide Owners  
  • Section 60(3) provides a statutory defence and protection mechanism for innocent owners of conveyances (vehicles) used in drug trafficking. 
  • The provision establishes that any animal or conveyance used in carrying narcotic drugs, psychotropic substances, or controlled substances shall ordinarily be liable to confiscation as it facilitated the commission of the offence under the NDPS Act. 
  • However, Section 60(3) creates a critical exception by providing that confiscation can be avoided if the owner of the conveyance proves three essential conditions: firstly, that the conveyance was used for transporting contraband without his knowledge or connivance; secondly, that it was used without the knowledge or connivance of his agent (if any) and the person-in-charge of the conveyance; and thirdly, that each of them had taken all reasonable precautions against such use. 
  • This provision places the burden of proof on the owner to demonstrate his innocence and due diligence, effectively creating a "reverse burden" whereby the owner must affirmatively establish lack of involvement rather than the prosecution having to prove his complicity. 
  • The legislative intent behind Section 60(3) is to balance two competing interests: on one hand, ensuring that instrumentalities used in drug offences are confiscated to deter crime; and on the other hand, protecting bona fide owners whose property may have been misused by employees, agents, or third parties without their knowledge or consent. 
  • The requirement of proving "reasonable precautions" implies that owners must demonstrate active steps taken to prevent misuse, such as proper verification of drivers, monitoring of cargo, maintaining records, and implementing security protocols in their transportation business. 
  • Where the owner successfully discharges this burden by establishing absence of knowledge, connivance, and exercise of due diligence, the conveyance cannot be confiscated merely because it was mechanically used in the commission of an offence, thereby safeguarding the property rights of innocent owners from arbitrary deprivation. 

Source: Supreme Court  

Why in News? 

Recently, the bench of Justices Sanjay Kumar and Alok Aradhe has held that The Supreme Court ruled that the mandatory pre-institution mediation under Section 12A of the Commercial Courts Act does not apply to cases involving continuing intellectual property infringements, such as trademark or patent violations. The Court clarified that requiring mediation in such cases would leave plaintiffs without effective remedies against ongoing infringement. 

• The Supreme Court held this in the matter of Novenco Building and Industry A/S v. Xero Energy Engineering Solutions Private Ltd. & Anr. (2025). 

What was the Background of Novenco Building and Industry A/S v. Xero Energy Engineering Solutions Private Ltd. & Anr. (2025)? 

• The appellant, Novenco Building and Industry A/S, is a Danish company engaged in manufacturing highly efficient industrial fans marketed under the brand 'Novenco ZerAx', developed after investing approximately 3.66 million euros between 2007 and 2015, with several patents and design registrations secured in India and abroad. 
• A dealership agreement was executed on 1st September 2017 between the appellant and respondent No.1, Xero Energy Engineering Solutions Private Limited, Hyderabad, for marketing and sale of Novenco ZerAx fans across India. 
• The appellant discovered in July 2022 that Xero Energy's Director, in violation of the distribution agreement, had incorporated respondent No.2, Aeronaut Fans Industry Private Limited, for manufacturing and selling identical fans under deceptively similar name and appearance. 
• The appellant sent multiple communications to Xero Energy on 22nd August 2022, 30th August 2022, and 14th October 2022 seeking clarification, but no satisfactory explanation was offered, leading to termination of the dealership on 14th October 2022. 
• A cease-and-desist notice was sent to Aeronaut Fans on 23rd December 2022, which replied on 1st February 2023 and 3rd March 2023, and subsequently filed a petition under Section 148A of the Code of Civil Procedure before the Madras High Court. 
• The appellant's technical expert inspected the fans installed by Aeronaut Fans at Cavendish Industries and Hero Moto Corp, Uttarakhand, on 6th December 2023 and submitted an affidavit on 6th February 2024 confirming the alleged infringement. 
• The appellant filed a commercial suit on 4th June 2024 before the High Court of Himachal Pradesh alleging infringement of its patent and design rights, along with applications seeking ad interim injunction and exemption from pre-institution mediation under Section 12A of the Commercial Courts Act. 
• The respondents filed applications for return and rejection of the plaint under Order VII Rules 10 and 11 of the Code of Civil Procedure, contending that no urgency was involved and there was a delay of six months between the inspection and filing of the suit, making non-compliance with Section 12A fatal to the suit. 

What were the Court’s Observations? 

• The requirement of pre-institution mediation under Section 12A of the Commercial Courts Act cannot be mechanically applied in cases involving continuing infringement of intellectual property rights, as insisting on mediation would effectively leave the plaintiff remediless, allowing the infringer to continue profiting under procedural formalities. 
• In actions alleging continuing infringement of intellectual property rights, urgency must be assessed in the context of the ongoing injury and the public interest in preventing deception, and mere delay in institution of a suit by itself does not negate urgency when the infringement is continuing. 
• Each act of manufacture, sale, or offer for sale of an infringing product constitutes a fresh wrong and recurring cause of action, and the urgency is inherent in the nature of the wrong and does not lie in the age of the cause but in the persistence of the peril. 
• Intellectual property disputes are not confined to the private realm, as when imitation masquerades as innovation, it sows confusion among consumers, taints the marketplace, and diminishes faith in the sanctity of trade, making public interest the moral axis upon which urgency turns. 
• The High Court erred in construing the test for urgent relief by examining the entitlement to urgent relief based on the merits of the case rather than looking at the urgency as evident from the plaint and documents from the standpoint of the plaintiff. 
• The appellant's prayer for injunction cannot be characterised as mere camouflage to evade mediation, as it is a real grievance founded on the continuing nature of infringement and irreparable prejudice likely to be caused by delay. 
• A plaintiff can be exempted from the requirement of Section 12A only when the plaint and documents clearly show a real need for urgent interim intervention, and the court is not concerned with the merits of the urgent relief but whether it seems plausibly urgent from the plaintiff's standpoint. 
• Section 12A of the Commercial Courts Act was not intended to achieve the anomalous result of rendering the plaintiff remediless by allowing the infringer to continue profiting under the protection of procedural formality in cases of ongoing intellectual property infringement. 

What is the Commercial Courts Act? 

• The Commercial Courts Act, 2015 is a legislation enacted to establish specialized Commercial Courts, Commercial Appellate Courts, Commercial Divisions and Commercial Appellate Divisions in High Courts for adjudicating commercial disputes of specified value. 
• The Act extends to the whole of India and came into force on 23rd October 2015, creating a dedicated judicial framework for resolution of commercial disputes including intellectual property rights, construction contracts, joint ventures, shareholders agreements, and various business transactions. 
• A "commercial dispute" under the Act encompasses disputes arising from ordinary transactions of merchants, bankers, financiers, traders, and matters relating to intellectual property, franchising, distribution agreements, and other commercial matters as notified by the Central Government. 
• The "Specified Value" threshold for jurisdiction under the Act is not less than three lakh rupees or such higher value as may be notified by the Central Government. 

Purpose of the Act  

• The Act aims to ensure early resolution of commercial disputes to create a positive image amongst investors about India's strong and responsive legal system and facilitate ease of doing business. 
• The legislation provides a specialized and expedited mechanism for adjudication of high-value commercial disputes through dedicated courts staffed with judges experienced in commercial matters. 
• The Act seeks to reduce disposal time through streamlined procedures, case management hearings, strict timelines, and tailored amendments to the Code of Civil Procedure for commercial disputes. 
• The objective is to enhance India's competitiveness in global commerce by establishing efficient judicial infrastructure for handling complex commercial disputes, thereby boosting investor confidence and supporting economic growth. 

What is Section 12A?  

Section 12A - Pre-Institution Mediation and Settlement 

• Section 12A of the Commercial Courts Act, 2015, introduced by Amendment Act No. 28 of 2018, mandates compulsory pre-institution mediation for commercial disputes before filing suit in court. A suit which does not contemplate any urgent interim relief shall not be instituted unless the plaintiff exhausts the remedy of pre-institution mediation in the prescribed manner. 
• The Central Government authorizes bodies under the Legal Services Authorities Act, 1987 to conduct such mediation, which must be completed within three months, extendable by two months with parties' consent. The period spent in mediation is excluded from limitation period computation. If settlement is reached, it carries the same status as an arbitral award under the Arbitration and Conciliation Act, 1996. 
• The critical exception is for suits "contemplating urgent interim relief" where parties are exempted from mandatory mediation. This recognizes that in situations involving continuing wrongs or irreparable harm, insisting on mediation would render the plaintiff remediless. The Supreme Court clarified that this exception must apply meaningfully in cases of continuing intellectual property infringement, where each day of delay aggravates injury and public interest demands immediate intervention, as mechanical application would allow infringers to profit under procedural protection.