Supreme Court Verdicts 2024: Landmark Decisions That Reshaped Indian Industries And Corporate Norms

As the year draws to a close, India’s corporate world stands transformed by a series of Supreme Court verdicts that rocked industries and redrew business norms.

From high-stakes showdowns in telecom and insolvency to game-changing constitutional decisions, the apex court delivered judgements that reshaped regulatory frameworks, fiscal strategies, and corporate accountability. These landmark decisions reverberated far beyond courtrooms, shaking boardrooms and influencing economic policy.

One of the most litigated issues in the telecom space finally got clarity this year when the top court rejected telecom operators' plea seeking a recomputation of their adjusted gross revenues.

This rejection exhausted the last resort of a possible relief and cemented the 2019 verdict, which said that telcos will have to include their non-core revenues while calculating their adjusted gross revenues.

Although the impact of the ruling was felt across the industry, Vodafone Idea took the biggest hit, as the debt-ridden company was going to get significant relief had the verdict gone in its favour. Vodafone Idea's AGR liability stands at Rs 70,320 crore, which makes up 33% of its gross debt.

In another pivotal ruling, the apex court ruled that telecom companies can avail themselves of tax credits accumulated for duties paid on towers, tower parts, shelters, and the like against the service tax they pay for providing cellular services.

Experts opined that the ruling is bound to have a significant impact, as taxes on towers represent a substantial expense for the industry. With the input tax credit on these costs being upheld, telecommunications companies are expected to see a notable positive impact on their profit and loss statements.

Indus Towers has stated that the top court's decision is set to reduce its contingent liability by Rs 3,704 crore.

The top court came down heavily on a few of the big corporate firms during the year and made some bold decisions during the course.

While dealing with a case that sought the revival of Vedanta’s Sterlite Copper Smelter in Thoothukudi, the top court dismissed the Anil Agarwal-led firm’s plea to restart operations at the plant.

The court said that the closure of the industry was undoubtedly not a matter of first choice, but the repeated nature of the breaches coupled with the severity of the violations had left neither the statutory authorities nor the high courts with a chance to take any other view unless they were to be oblivious of their duties. At its apex capacity, Sterlite Copper in Thoothukudi district accounted for nearly half of India's copper output.

In the infamous SEBI-Sahara case, which has been going on for over a decade now, the top court directed two Sahara India Pariwar companies—Sahara India Real Estate Corp. and Sahara Housing Investment Corp.—to deposit Rs 1,000 crore in the SEBI-Sahara Fund. The court also set a 30-day deadline for negotiating a joint venture or land development agreement for Sahara's Versova property to cover the remaining shortfall of Rs 10,000 crore.

The case is expected to be heard soon, and the outcome will determine the fate of thousands of investors who invested their hard-earned money in Sahara's schemes.

In another rare case that attained finality this year was the Delhi Metro Rail Corporation’s dispute against Anil Ambani-led Delhi Airport Metro Express Pvt., or DAMEPL. What made it rare was that the top court set aside an Rs 8,000 crore arbitral award that was affirmed in favour of DAMEPL by the top court itself! The court did so, in its own words, to prevent a ‘miscarriage of justice.’

One of the biggest IBC rulings from this year came out in the latter half of the year when the top court ordered the liquidation of Jet Airways. Calling the litigation an “eye-opener," the court reprimanded the NCLTs and the NCLAT. It said that they must seriously rethink their approach towards the admission and disposal of insolvency matters and that they should not act as mere rubber-stamping authorities.

An aviation expert opined that India should use this as an example to mend our insolvency laws, as the entire fiasco exposed numerous gaps in the country's handling of insolvency cases.

The second significant ruling occurred when the apex court ordered the continuation of Byju's insolvency, overturning an order from the National Company Law Appellate Tribunal that had terminated the ed-tech firm's insolvency process.

The court laid down the law with respect to settlements and withdrawal of an insolvency application. It clearly established that an insolvency proceeding is a proceeding in rem, and the adjudicating authorities must not let the erring parties bypass the scheme of the Insolvency & Bankruptcy Code.

Just earlier this month, the top court put an end to Bhushan Power & Steel’s insolvency resolution process by directing the Enforcement Directorate to restitute assets worth Rs 4,025 crore to JSW Steel, the successful resolution applicant of the debt-laden firm.

Although the proceedings have now come to an end, the top court has stated that it has kept the issue open with regards to ED's power to attach the properties of debtors who are undergoing the insolvency resolution process.

Two significant judgements flowing from benches comprising at least five judges of the top court were delivered this year and are bound to have a long-lasting impact on India Inc.

In February, a five-judge bench of the top court unanimously struck down the electoral bonds scheme, a scheme that fostered the practice of anonymous donations to political parties, as unconstitutional and being violative of fundamental rights.

The judgement was rooted in the voter’s right to information. Various senior counsels NDTV Profit spoke with hailed the judgement as being a historic one and said that it will have a huge impact on the way we finance our election campaigns and on the health of our democracy.

In another seminal ruling that put to rest a controversy stemming from an alleged typographical error,’ a nine-judge bench of the top court ruled that royalty paid by a mining leaseholder to the lessor is not a tax but a contractual consideration for enjoyment of mineral rights.

At the time this ruling was delivered, the apex court was informed that if it was given a retrospective effect, then mining companies would be saddled with liabilities to the tune of about Rs 70,000–80,000 crore.

The court has since then given a retrospective effect to its ruling, subject to some conditions. These conditions are likely to bring the expected liabilities down some notches.