Recent SCI Actions: Bhutan MoU, Chadar Dismissal, Adani Exemption - 2026-01-05

Recent Supreme Court Developments: Bridging Borders, Defining Boundaries, and Easing Economic Burdens

In a series of significant moves that underscore the Supreme Court of India's (SCI) pivotal role in fostering international judicial ties, upholding constitutional restraint, and shaping economic policy, the court has issued rulings and initiatives with far-reaching implications. On one front, Chief Justice Surya Kant welcomed two Bhutanese law clerks under a landmark Memorandum of Understanding (MoU) with the Supreme Court of Bhutan, signaling strengthened bilateral collaboration. In another, a bench led by the CJI dismissed a petition challenging the Prime Minister's traditional offering of a 'chadar' at the Ajmer Sharif Dargah, deeming the relief non-justiciable and reinforcing judicial limits on cultural state practices. Finally, in a victory for corporate interests, Justices Aravind Kumar and N.V. Anjaria allowed Adani Power Limited's appeal, exempting the company from customs duties on electricity supplied from its Special Economic Zone (SEZ) unit to the Domestic Tariff Area (DTA), while criticizing prior high court inconsistencies. These actions, unfolding amid India's evolving legal landscape, highlight the SCI's commitment to diplomacy, secularism, and fiscal fairness, offering valuable precedents for legal practitioners across domains.

Welcoming Bhutanese Law Clerks: Strengthening Judicial Ties Through Collaboration

The SCI's embrace of international judicial exchange took a concrete form with the onboarding of two Bhutanese law clerks, a direct outcome of an MoU signed between the Supreme Court of India and the Supreme Court of Bhutan. This initiative, announced during Justice B.R. Gavai's visit to Bhutan in October 2023, represents a strategic step in enhancing cross-border legal capacity-building and fostering goodwill between the two nations, which share deep historical and cultural bonds under India's 'Neighbourhood First' policy.

Chief Justice Surya Kant personally introduced the clerks during a court session, emphasizing their integration into the SCI's operations. He detailed the terms, stating verbatim: "We have entered into an MOU with the Supreme Court of Bhutan, on the basis of which there will be two law clerks who will be paid based on our honorarium and will be there for a period of 3 months. We will be taking care of their travelling, both will be working in different courts, and both are very bright." This arrangement ensures parity with Indian law clerks, who typically assist judges in research, drafting, and case management for one-year terms post-LL.M. The Bhutanese clerks, fresh graduates selected for their merit, will contribute to diverse benches, gaining exposure to India's apex judicial processes while aiding the SCI's workload.

Historically, judicial exchanges have been rare at the supreme court level in South Asia, though lower courts and bar councils have pursued similar programs. The MoU builds on broader India-Bhutan cooperation, including legal aid under the 2020 Treaty of Friendship and joint training via the India International Law Centre. For legal professionals, this opens avenues for reciprocal programs, potentially extending to other SAARC countries like Nepal or Maldives, amid calls for a regional judicial forum.

The initiative's legal underpinnings lie in administrative discretion under Article 145 of the Constitution, which empowers the SCI to regulate its procedures. No statutory hurdles impede such exchanges, as they align with the court's goal of efficient justice delivery. However, practitioners should note potential challenges in harmonizing work ethics, confidentiality protocols, and visa formalities, which the MoU likely addresses through mutual recognition clauses.

This development not only enriches the SCI's diversity but also positions India as a leader in judicial diplomacy. As Bhutan, a constitutional monarchy since 2008, navigates its young democracy, exposure to India's federal system could inform its jurisprudence, while Indian judges benefit from fresh perspectives on environmental and Himalayan law issues.

Dismissing the Chadar Offering Challenge: A Matter of Justiciability and Secular Restraint

Shifting to constitutional frontiers, the SCI on Monday dismissed a petition by Jitender Singh, president of Vishwa Vedic Sanatan Sangh, and Vishnu Gupta, president of Hindu Sena, who sought to halt the Union government's extension of "state-sponsored ceremonial honour" to Sufi saint Khwaja Moinuddin Chishti via the Prime Minister's 'chadar' offering at Ajmer Sharif Dargah. The bench of Chief Justice Surya Kant and Justice Joymalya Bagchi ruled the plea non-justiciable, refusing to intervene in what they viewed as symbolic tradition rather than enforceable rights violation.

The petitioners argued that the practice, initiated by Prime Minister Jawaharlal Nehru in 1947, lacks historical or constitutional basis and offends India's sovereignty and secular ethos. They invoked the 1961 Constitution Bench decision in Dargah Committee, Ajmer v. Syed Hussain Ali , which held that the Ajmer Dargah does not qualify as a religious denomination under Article 26, thereby questioning state patronage. Further, they contended that such offerings by the head of government contravene the people's will, with one petitioner having directly urged PM Narendra Modi to desist. The plea, drafted by Advocate Barun Kumar Sinha and filed through Advocate-on-Record Anantha Narayana MG (Diary No. 74179/2025), also referenced a pending civil suit claiming the dargah was built over a Shiva temple ruins.

CJI Surya Kant, while acknowledging the arguments, maintained judicial restraint: "the relief sought is not justiciable." The bench clarified that the dismissal would not prejudice the ongoing trial court suit, preserving parallel civil remedies. This stance echoes precedents like S.R. Bommai v. Union of India (1994), where the SCI limited review of executive religious policies absent fundamental rights breaches.

For legal scholars, the ruling delineates the boundaries of Article 25 (freedom of religion) and Article 14 (equality), affirming that ceremonial acts, even if state-involved, fall outside writ jurisdiction unless they foster discrimination. Critics may decry it as evading secular scrutiny, but it prevents the floodgates of PILs on every cultural ritual, from Diwali lighting to Christmas greetings by officials. In practice, this could deter similar challenges to interfaith state gestures, stabilizing political traditions while upholding the essential religious practices doctrine from Shirur Mutt (1954).

The decision arrives amid heightened debates on state-religion interplay, post the 2024 Ayodhya verdict, reminding advocates to ground pleas in tangible harms rather than ideological grievances.

Granting Relief to Adani Power: Navigating SEZ Customs Duties and Taxation Precedents

In the economic sphere, the SCI delivered a landmark win for Adani Power Limited, setting aside a 2019 Gujarat High Court order that denied exemption from customs duties on electricity generated in its Mundra SEZ and supplied to the DTA. The January 5 ruling by Justices Aravind Kumar and N.V. Anjaria addressed core questions on levy validity, judicial consistency, and restitution, reinforcing SEZ incentives under the 2005 Act.

Adani, a major player in thermal power, faced retrospective customs duty imposition from June 26, 2009, via notifications like No. 25/2010 (initial levy), No. 91/2010 (10 paisa/unit), and No. 26/2012 (3 paisa/unit). The Gujarat HC in 2015 struck down the 2009 levy as arbitrary, citing no charging provision under Section 12 of the Customs Act, 1962, double taxation (duties already paid on coal imports), and Article 265's bar on unparliamentary exactions. However, in 2019, a coordinate bench refused extension to post-2010 periods, insisting on fresh challenges to later notifications.

The SCI framed issues around the 2015 judgment's scope, statutory changes, and bench discipline. Allowing the appeal in Adani Power Ltd. & Anr. v. Union of India & Ors. (SLP(C) No. 24729/2019), the court held the 2015 declaration broadly invalidated such levies absent a valid Section 12 event, unaffected by rate tweaks in subsequent notifications. It rebuffed the state's plea, observing: “The argument that no relief could be granted in the absence of a fresh and specific challenge to each later notification is untenable.” Emphasizing SEZ Act Section 30's parity mandate and constitutional constraints, the bench ruled no material law/fact shift justified deviation.

Critically, the SCI underscored judicial hierarchy: The 2019 HC bench, being coordinate, was bound by 2015 or should have referred doubts to a larger bench, not narrowed scope artificially. Deeming the levy unlawful, it ordered refund of duties paid under protest, directing the Commissioner of Customs to verify and process within eight weeks. This includes periods from September 2010 to February 2016, averting double taxation on electricity – a processed good where raw material duties suffice.

Tax lawyers will find this persuasive on SEZ-DTA clearances, aligning with Mafatlal Industries (1997) on refunds and Union of India v. ITC (1993) on levy authority. For the energy sector, it preserves fiscal predictability, boosting investments in export-oriented units amid India's net-zero goals.

Legal Implications and Precedents Set

These rulings weave a tapestry of judicial philosophy: The Bhutan MoU exemplifies administrative innovation under Article 145, promoting global legal norms without statutory amendment. The Chadar dismissal sharpens justiciability under Article 32, confining writs to rights-based claims per Bandhua Mukti Morcha (1984), and interprets Article 26 narrowly post- Ajmer Dargah . In Adani, the emphasis on coordinate bench discipline invokes Central Board of Dawoodi Bohra (2003), while voiding levies under Article 265 echoes Godfrey Philips (1985) on prospective taxation.

Collectively, they affirm the SCI's restraint in non-core areas while assertively safeguarding economic rights, potentially influencing upcoming SEZ policy reviews and bilateral judicial pacts.

Broader Impacts on Legal Practice and the Justice System

For practitioners, the Bhutan initiative invites bar associations to explore exchange visas and ethics harmonization, enriching international law practices. Constitutional litigators must recalibrate PIL strategies post-Chadar, focusing on empirical harms to evade dismissal. Tax counsels gain ammunition for SEZ disputes, streamlining refunds and deterring arbitrary levies, which could save billions for exporters.

Systemically, these bolster India-Bhutan ties, countering regional geopolitical fluxes; preserve secular pluralism by non-interference; and sustain SEZ viability, fostering 2.5% GDP contribution via jobs and FDI. As India's economy grows, such precedents ensure judicial efficiency, urging reforms like digital MoU frameworks.

Conclusion

The SCI's recent actions – from clerk welcomes to plea dismissals and duty exemptions – illuminate its role as a guardian of law, diplomacy, and equity. By bridging borders with Bhutan, respecting ceremonial traditions, and rectifying tax overreach, the court navigates India's pluralistic democracy with nuance. Legal professionals must heed these signals, adapting strategies to this evolving jurisprudence for effective advocacy in an interconnected world.