As a diploma course, it tends to provide a practical insight for solving a problem relating to the subject matter by providing real life or hypothetical situations where the student has to, based on the concept and previous judgements, solves these situations. Here, in this situation, a company, Savdhaan insurance brokers limited having its registered office in Mumbai is looking to receive foreign direct investments from InsureWel Inc. having its registered office in New York. Its share capital consists of INR 2 crores consisting of 20 lacs equity shares.
Investor
InsureWel Inc, NY
Investee
Savdhaan insurance brokers ltd, MUM
Capital
INR 2 crores/ 20 lacs equity shares
Sector
Insurance
What is the sectoral cap to which InsureWel will be the subject for investment in Savdhaan?
When the foreign investor is interested to invest in an Indian company, it is important to examine all the issues related to particular sector/activity the investee company is involved in. Is investor allowed to invest in that industry at all? If he is allowed, can he invest without limit or there are certain restrictions? The sectoral cap is the limit which represents the maximum shareholding percent foreign investor can acquire through FDI. In some cases, the sectoral cap is set in a way that it marks the point starting from which the government approval is needed, e.g. in brownfield pharmaceutical sector 100% FDI is allowed, but up to 74% under the automatic route, and above 74% under the approval route. However, in other cases sectoral cap is restrictive, which means that it marks the limit above which the FDI is prohibited. Detailed provisions on FDI guidelines can be found in Consolidated FDI Policy from August 28, 2017.
In this case, the foreign investor is interested to invest in an Indian company, which, according to its name, is operating in the insurance sector. Aforementioned FDI Policy contains detailed provisions on insurance sector investments under point 5.2.22. According to it, an investment in the insurance sector has a sectoral cap of 49%, meaning that a foreign direct investment up to 49% is allowed through automatic route, without government approval. Above this limit, an investment in this sector is prohibited. In terms of this particular investment, it means that investee can automatically issue 49% of its shares to the investor, but larger shareholding percentage than this cannot be acquired or held through FDI.
How to determine the price at which the shares can be issued?
In case the investee’s shares are issued to the investor under the FDI policy, the price is determined differently depending on whether the investee company is listed or unlisted. If the investee company is listed, the share price is determined in accordance with the SEBI guidelines. If the investee company is unlisted, as it is the case with Savdhaan, share price is determined by a SEBI registered Category I Merchant Banker or a Chartered Accountant, and it shall represent a fair valuation of shares which is made based on internationally accepted pricing methodologies on arm’s length basis (same as it would be on open market).
How exactly should they receive the amount of investment? Which formalities are required to be completed for receiving the investment amount?
The consideration received through investment shall be remitted into India through normal banking channels, and the receiving bank must be an Authorised Dealer Category I Bank. The receiving bank must check the transaction through KYC (know your customer) process. In case that two different banks are handling the transfer transaction and receiving the consideration, KYC check shall be done by receiving bank, while the KYC report and FC-TRS form are submitted by the customer to the bank which is handling the transfer transaction.
The receiving bank further issues a document which serves as a proof of foreign transfer to India called FIRC – Foreign Inward Remittance Certificate. This document is issued to investee company, which through the Authorised Dealer Bank should report details of such transfer to Regional Office of the RBI. The report is submitted in a prescribed form, with a copy of FIRC and KYC report. This report shall be acknowledged by the Office of RBI by an identification number which is given to reported amount.
What is the compliance required after allotment of shares?
Within 30 days deadline from the day the shares are issued, the investee company must file the FC- GPR form through its authorized dealer, and signed by its managing director or company secretary. This submission must also contain:
– a certificate of compliance provided by company’s full time or practicing secretary,
– certificate issued by Statutory Auditor or Chartered Accountant indicating the manner of arriving at the price of the shares issued to the investor,
– the report of receipt of consideration
It is important to mention that under the currently applicable Consolidated FDI Policy, FDI in insurance sector shall be subject to compliance with Insurance Act from 1938, as well as the condition that companies from this sector which are receiving FDI shall obtain necessary license/approval from the Insurance Regulatory and Development Authority for undertaking insurance and related activities.
Can the dividend on shares invested by the foreign investor be repatriated?
In case there is no lock-in, net dividends can be repatriated through automatic route, without restriction, after dividend distribution tax (DDT) is deducted at its current rate, with applicable surcharge, if any. Since the dividend is to be paid to foreign investor by the Indian investee, the dividends do not create the obligation to withhold tax but are rather taxed in the country where the dividends are being received (in this case the US). There is a number of bilateral Double Tax Avoidance Agreements which exempt foreign-source income from taxation. Also, it is important to examine if the tax of capital gains can be applied in any of the countries.
Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skills.
This article written by Saumya Sinha, a student of RGNUL, is a good read on the practical aspects of the implementation of the provision on cruelty inserted by an amendment in the IPC, and penetrates into the veil created by S.498A.
Section 498A of Indian Penal Code, 1860 was inserted by the Criminal Law (Second Amendment) Act, 1983. Before the insertion of this section, such cases of cruelty were dealt with by general provisions such as assault, grievous hurt, etc. This section has opened the doors of justice for women who suffer cruelty at the hands of her husband or relatives. The offence under this section is cognizable, non-bailable and non-compoundable offence. The explanation to the section also defines the meaning of cruelty.
It means any wilful conduct which is of such a nature as is likely to drive the woman to commit suicide or to cause grave injury or danger to life, limb or health (whether mental or physical) of the woman; or
Harassment of the woman where such harassment is with a view to coercing her or any person related to her to meet any unlawful demand for any property or valuable security or is an account of failure by her or any other person related to her to meet such demand.[1]
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The explanation defines the limits of the meaning of cruelty so as the section is not misused for frivolous cases by the women. However, the precautions taken by the legislator has not stopped the filing of false cases by women and though the section has helped a number of women facing cruelty, it has also been misused by a number of them. It is in this light that this article brings forth the view of the Supreme Court on the misuse of Section 498A, IPC.
Arnesh Kumar v. State of Bihar
Facts
The wife alleged that dowry was demanded from her and that she was driven out of the matrimonial home on non-fulfilment of such demands. The husband applied for anticipatory bail which failed. Therefore, by special leave petition, the husband approached the Supreme Court.
Decision
In this case, the Court observed that the fact that Section 498A, IPC is a cognizable and non-bailable offence, it is more often than not is used as a weapon rather than shield by disgruntled wives. It results in harassing the husband and his relatives by getting them arrested under this Section and it is more disturbing to see bedridden grandfathers and grandmothers being arrested without a prima facie case. Thus, the Court laid down certain guidelines which the police officer must follow while arresting under Section 498A, IPC or Section 4 of the Dowry Prohibition Act, 1961 and that such arrest must be based on a reasonable satisfaction with respect to genuineness of the allegation. Moreover, even the Magistrates must be careful enough not to authorise detention casually and mechanically.
Manju Ram Kalita v. State of Assam (2009) 13 SCC 330
Facts
The wife alleged physical and mental cruelty at the hands of the husband and accused him under Section 498A, IPC. The husband, however, denied all the charges.
Cases referred
The Court referred to the case of S. Hanumantha Rao v. S. Ramani [2] for the meaning of mental cruelty. The Court also referred to other cases for gauging the scope of cruelty such as Mohd. Hoshan v. State of A.P[3], Raj Rani v. State[4], Sushil Kumar Sharma v. Union of India[5], etc.
Decision
The Court held that “Cruelty” for the purpose of Section 498-A IPC is to be established in the context of Section 498-A IPC as it may be different from other statutory provisions. It should be determined by considering the conduct of the man, weighing the gravity or seriousness of his acts and to find out as to whether it is likely to drive the woman to commit suicide, etc. It is to be established that the woman has been subjected to cruelty continuously or at least in close proximity of time of lodging the complaint. The Court further held that petty quarrels cannot be termed as “cruelty” to attract the provisions of Section 498-A IPC.
Bibi Parwana Khatoon v. State of Bihar (2017) 6 SCC 792
Facts
Similar to previous cases, the facts of this case are that the wife was killed by setting her up on fire by her husband and her relatives. The sister-in-law and brother-in-law of the deceased wife challenged the conviction in the Supreme Court.
Decision
The Court brought under notice the facts that the appellants in the case did not even reside at the place of mishap. There was no evidence to prove their charge beyond reasonable doubt. Therefore, the Court acquitted them and held that the Court must guard against false implication of the relatives.
Rajesh Kumar & Ors v. Sate of U.P. (2017 SCC OnLine SC 821)
Facts
In the present case, the husband, along with other relatives, was accused for causing cruelty to the wife in lieu of demand for dowry. However, the other relatives demanded that there should be certain guidelines to prevent over-implication. Thus, in most of the cases the relatives of the husband are also being dragged into Courts in cases of Section 498A. However, it is not necessary that they have been party to the offence. Thus, a question with respect to the need for directions to prevent misuse of Section 498A, IPC was raised in the appeal.
Cases and Reports referred
The cases such a Sushil Kumar Sharma v. Union of India[6], Preeti Gupta v. State of Jharkhand[7], Ramgopal v. State of Madhya Pradesh[8] and Savitri Devi v. Ramesh Chand[9] were referred wherein the misuse of Section 498A and the need to adopt measures for prevention of such misuse has been acknowledged. The division bench also referred 243rd Law Commission Report and 140th report of the Rajya Sabha Committee.
Decision
The Supreme Court laid down comprehensive directions to prevent the misuse of the provision of Section 498A, IPC.
Family Welfare Committee
The constitution of one or more Family Welfare Committees in every district which shall preferably consist of three members. Such a constitution is to be made by the District Legal Services Authorities.
The members may be volunteers/social workers/retired persons/wives of working officers/other citizens or anyone who may be found suitable and willing.
Frequent review of constitution and working of such committees in addition to the yearly review which is a minimum requirement. Such review shall be done by the District and Session Judge of the district who is also ex-officio chairman of the District Legal Services Authority.
The Committee members will not be called as witnesses.
Every complaint has to be referred to the Committee and the committee has to submit the report to the authority who referred to such complaint. The report may be then considered by the Investigating Officer or the Magistrate on its own merit.
The work of the committee includes looking into every complaint under Section 498A received by the police or the Magistrate.
No arrest should normally be effected till report of the committee is received.
Investigating Officer
Investigating Officers to be designated within a month from the delivery of judgment to investigate the complaints under Section 498A and other connected offences.
Such designated officer may be required to undergo training for such duration (not less than one week) as may be considered appropriate. The training may be completed within four months from the date of delivery of the judgment.
Settlement
In cases where a settlement is reached, the District and the Sessions Judge to dispose of the proceedings. Such disposal also includes the closing of the criminal case if the dispute primarily relates to matrimonial discord. The District and Sessions Judge may also nominate any other senior Judicial Officer to do the same.
Bail Matters
Cases where a bail application is filed with at least one clear day’s notice to the Public Prosecutor or the complainant, the same may be decided on the same day.
Recovery of disputed dowry items may not by itself be a ground for denial of bail if maintenance or other rights of wife or minor children can otherwise be protected.
Further, in dealing with bail matters, certain things such as individual roles, the prima facie truth of the allegations, the requirement of further arrest or custody and interest of justice must be carefully weighed.
Issuance of Red Corner Notice
In respect of persons ordinarily residing out of India, impounding of passports or issuance of Red Corner Notice should not be a routine.
Clubbing of cases
It will be open to the District Judge or a designated senior judicial officer nominated by the District Judge to club all connected cases between the parties arising out of matrimonial disputes so that a holistic view is taken by the Court to whom all such cases are entrusted.
Personal appearance
Personal appearance of all family members and particularly outstation members may not be required.
Further, the trial court ought to grant exemption from the personal appearance or permit appearance by video conferencing without adversely affecting the progress of the trial.
However, the Court further said that these directions will not apply to the offences involving tangible physical injuries or death. The Court also said that the National Legal Services Authority may submit a report after a trial of 6 months of such arrangement and latest by March 31, 2018, for any change in the directions issued or for any further directions.
Social Action Forum for Manav Adhikar v. Union of India
Facts
The petition was filed under Article 32 of the Constitution. The petitioners contended that it is not untrue that there are a number of women suffering from violence at the hands of husband and his relatives and that the accusation that Section 498A is being misused is not supported from any concrete date on such misuse. It was further argued that the social purpose behind Section 498-A IPC is being lost as the rigour of the said provision has been diluted and the offence has practically been made bailable by reason of various qualifications and restrictions prescribed by various decisions of this Court including Rajesh Sharma v. State of U.P.
Cases referred
The Court referred to the principles stated in Joginder Kumar v. State of U.P.[10], D.K. Basu v. State of W.B.[11], Lalita Kumariv. Government of Uttar Pradesh[12] and Arnesh Kumarv. State of Bihar[13] and directed that the investigating officers be careful and be guided by the same.
Decision
After referring to the directions, the Court concluded that the direction with respect to Family Welfare Committees and their duties are not in accordance with any provision of Code of Criminal Procedure, 1973. The offence of cruelty is non-bailable and cognizable offence but due to the direction making it impossible to arrest before the report of such committee has made this ineffective. Thus the directions given in Rajesh Sharma case has been modified by Court as further explained.
The direction with respect to constitution and duties of Family Welfare Committee has been declared impermissible.
Further, direction pertaining to the settlement has been modified to include that it if a settlement is arrived at, the parties can approach the High Court under Section 482 of the Code of Criminal Procedure. The High Court, keeping in view the law laid down in Gian Singh v. State of Punjab[14], shall dispose of the same.
Written by Rajeshwari Inna, pursuing Certificate Course in Insolvency and Bankruptcy Code offered by Lawsikho as part of her coursework. Rajeshwari works with Basis Points Consultancy Services (OPC) Ltd which deals with Foreign Exchange as a Senior Manager and plans to become a member of insolvency professionals.
Importance of Sec 12A of IBC 2016
Insolvency and Bankruptcy Code is an evolving judiciary tool and the name itself was given as Code only because it was nothing but a Codification of Sections of various Acts which were framed for dealing with problems came in between the Creditors, particularly Financial Creditors and the Debtors to them. So, from the very beginning, it was going through various tests.
When it comes to a question of Principles of Law, it was left to the highest judiciary of the land, the Supreme Court of India. The test was that when IBC has not provided for withdrawal of an application after admitted by the court (which is normally permitted in any civil or criminal case matters subject to certain provisions) what the procedure to be followed is.
The case details are that Nisus Finance and Investment Pvt Ltd (Financial Creditor) files an application seeking admission of an Insolvency Resolution Process on Lokhandwala Kataria Construction Pvt Ltd (Corporate Debtor) with NCLT Mumbai.
After due process, NCLT Mumbai admits the petition and orders initiation of Corporate Insolvency Resolution Process. Thereafter, Nisus Finance and Management approached NCLAT (since as per the code, against orders of NCLT, an application can be preferred with only the Appellate Tribunal) seeking quashing of orders of NCLT Mumbai admitting the CIRP petition since a compromise had been reached between them and Lokhandwala Kataria Construction Pvt Limited.
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NCLAT ruled that under IBC such withdrawal is permitted only before the admission of the petition and not afterward.
As it was a question of law, the parties had to approach the Supreme Court, which allowed a settlement to be considered under Article 142 of the Indian constitution which reads as under:
The Supreme Court in the exercise of its jurisdiction may pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it, and any decree so passed or order so made shall be enforceable throughout the territory of India in such manner as may be prescribed by or under any law made by Parliament and, until provision in that behalf is so made, in such manner as the President may by order prescribe.
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A Brief on Sec 12 and why no provision was thought of for withdrawal of an admitted application?
This is the section of IBC which clearly talks about time limit for completion of CIRP. But it was silent about what if the Debtor and Creditor agreed to settle the matters out of CIRP and the applicant wanted to withdraw his application.
The policy underlying IBC as already stated above is to allow other creditors to join the action. In that context, after a petition has been filed in NCLT by one or only by a set of creditors, then a public announcement is made, giving a timeline for any other aggrieved party to file their claim which is meant as the collective action. An Interim Resolution Professional or a Resolution Professional is the person who carefully processes the Corporate Debtors books and arrives at a total amount of liability and is prepared to handle all the claims. Further, claims can be filed with permitted exceptions up to the time of preparation of Information Memorandum (a memorandum with details about the company and its financial position etc for the purpose of inviting Resolution Plans) by the Resolution Personnel. In case if the Corporate Debtor is found unfit for a revival and hence declared Insolvent and Liquidation is suggested as the only way, then at that time also claims from creditors can be admitted by the Liquidator.
From the above, it could be confirmed that the intent of the purpose of IBC was not to just act on one or set of applications and dispose of the Insolvency petition. So, if a settlement is permitted between such applicant(s) and the corporate debtor, then the true position of such Corporate Debtors and their financial strength to continue in business will not come out and the delinquencies cannot be brought out. Hence the IBC did not have such a provision.
But many such cases came in the first one year of IBC. But because the Act was silent, every such case had to go to Supreme Court which is the appellate court after NCLAT as it became a question of law. For Supreme Court also there was no section under which they can entertain these applications. Then they had to invoke Article 142 of the Constitution which gave the extra power to Supreme Court to deal with any matter which does not fall under any law or regulation which is in force. Then, on the advice of Supreme Court IBC was amended to include Section 12A and Regulation 30A and 36A.
How Section 12A is built to take care of the IBC’s policy of withdrawal?
The Section 12A of IBC, 2016 is as follows:
The Adjudicating Authority may allow the withdrawal of application admitted under Section 7 or Section 9 or Section 10, on an application made by the applicant with the approval of ninety percent. Voting share of the committee of creditors, in such manner, as may be specified.”
Section 239 and Section 240 deals with the powers to make rules by the Central Government and regulations by IBBI respectively for amplifying the sections of the IBC for further implementation of the provisions. Wherever it is stated as “as may be prescribed” then the intent was that a rule needs to be issued under Sec 239 by Central Government. Where the words “as may be specified “(as in the present case) then a regulation is to be notified by the IBBI.
Hence regulation 30A was notified by IBBI which laid down the procedure for making an application for withdrawal and handling the same by the involved parties including the Adjudicating Authority.
Procedure for Withdrawal of Application
An application for withdrawal shall be submitted to the Interim Resolution Professional – IRP-(within 30 days of application for CIRP – that is Corporate Insolvency Resolution Processor before the appointment of RP) or the Resolution Professional (RP) after his appointment, as the case may be.
An application shall be in Form FA of the Schedule.
In the case of the application to RP it shall be before the issue of invitation for Expression of Interest (after Information Memorandum)
The above said application shall be accompanied by a bank guarantee towards estimated cost incurred for purposes of expenses incurred on or by the interim resolution professional to the extent ratified by the committee of creditors as laid down under Regulation 33 of IBC and expenses incurred on or by the resolution professional fixed by the Committee of Creditors under the Regulation 34 of IBC.
(Explanation: For the purposes of Regulation 33 and 34, expenses include fee to be paid to the IRP/RP, fee to be paid to the Insolvency Professional Entity (IPE), if any, and fee to be paid to the professionals, if any, appointed by the IRP/RP and other expenses to be incurred by the IRP/RP. The total amount is treated as Insolvency Process Costs.)
The IRP /RP after necessary scrutiny will place the application before the Committee of Creditors (CoC) who shall consider the application within seven days of its constitution by the IRP which will be the first meeting of the CoC or seven days of receipt of the application by the RP, whichever is later.
Within 3 days of approval of the application by Committee of Creditors with 90% voting share, the Resolution Professional on behalf of the applicant, shall submit the same before the Adjudicating Authority.
The Adjudicating Authority (NCLT) may, by order, approve the application submitted by the Resolution Professional.
Salient Points
First of all the application has to be filed with the IRP or the RP only. This is very appropriate because they are the people who have already studied the Corporate Debtor and they can smell any foul play being carried out by one or a set of creditors colluding with the Corporate Debtor. Thus the policy of transparency in handling the matters under IBC will seem to be implemented both in letter and spirit. Also, it will give the proof that all creditors, be it the ones who initiated the insolvency process or not have been treated equally.
Secondly, all the application for withdrawal by any one applicant or a set of applicants has to be known to all the creditors who have filed their claims. Hence the same will be put to discussion in the meeting of Committee of Creditors and it should be approved by 90% of the CoC.
What if the CoC could not be formed at all by IRP or RP as no other claims were filed except by the person who first initiated the CIRP? In a recent judgment by NCLT Mumbai the Bench was of the view that due to the above facts if no committee of creditors could be formed, the settlement between such a corporate debtor and the creditor(s) who filed the application is seemingly not affecting any other creditor(s). As the policy of IBC is not getting tampered, such settlements can be allowed as legally permitted.
Thirdly, expenses would have been incurred up to this stage by the IRP or RP for carrying out the CIRP and some of them might not have been reimbursed to the IRP or RP. To safeguard against this problem, a bank guarantee has been provisioned.
Fourthly, a detailed form has been in the form of Schedule FA and the same along with its enclosures take care of the process of withdrawal being transparent.
Fifthly, there are restrictions up to which time such withdrawal application can be filed has also been specified.
Last but not the least, as usual, timelines have been laid down as to how the IRP/RP, CoC.and the AA (NCLT) should dispose of the application.
Thus it is clear that the amendment to IBC by way of introduction of Sec 12A and related Regulations has taken care to ensure the basic policy of IBC itself.
Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skills
Simply speaking “Mediation” is a process of dispute resolution in which one or more impartial third parties with his specialized communication skills and negotiation techniques intervenes in a conflict or dispute with the consent of the participants and assists them in negotiating a consensual and informed agreement. From Lord Krishna mediating between Kauravas and Pandavas in the Mahabharata, to family elders resolving domestic issues, to panchayats providing community mediation, there exists a strong culture of mediation in India. Mediation is, in fact, the oldest and historically most effective way that societies have resolved their differences outside of resorting to the courts or violence. Today, it is has become the new buzzword in law.
Development and Evolution of Mediation in India
The first mediation training session was conducted in Ahmedabad in the year 2000 by the Institute for the Study and Development of Legal Systems (ISDLS), a non-governmental organization based in San Francisco, California, USA. It was followed by a few advanced training workshops conducted by a public charitable trust “Institute for Arbitration Mediation Legal Education and Development”, settled by two senior lawyers In Ahmedabad.
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The Chief Justice of India formally inaugurated the Ahmedabad Mediation Centre on 27th July 2002. The importance of mediation and the need to implement Sec. 89 of Civil Procedure Code, 1908 was the agenda. These conventions and training sessions continued in order to get the concept of mediation and arbitration in the main stream for dispute resolution.
In order to be formally trained as a mediator in India, an individual must undergo a 40-hours’ training programme and conduct 20 mediation sessions under the Mediation and Conciliation Project Committee (MCPC). Since the early 2000s, 52 judicial mediation training programmes have been facilitated in various parts of the country. About 869 members of the judiciary have undergone the 40 hours of training.
Types of Mediation
Mediation in India is divided into three categories which are commonly followed:
Court annexed mediation
This applies to cases which are filed in the court or are pending in the court.The mediation services are provided by the court as a part and parcel of the same judicial system.The Rules framed by Supreme Court and High Courts in pursuance of Section 89 of Civil Procedure Code, 1908 deal with Court-annexed mediation. The mediation centres have been established by the Supreme Court, High Courts and several district courts in the country and services provided to the litigants is either free of charge or minimally charged. The process of mediation is conducted within the court complex.The settlement arrived at are recorded in a compromise document and then sent back to the Court for a final decree and no appeal lies through Court-annexed mediation.2
Court referred mediation
It applies to cases which the Court would refer for mediation and aregoverned by the rules framed by High Courts in pursuance of Section 89 of Civil Procedure Code, 1908 and the Legal Services Authorities Act, 1987 (LSA). In terms of legal position laid down by Hon’ble Supreme Court of India in 3Afcons Infrastructure Ltd. and Anr. V. Cherian Varkey Construction Co. Pvt. Ltd. and Ors., (2010) 8 SCC 24, a dispute referred for mediation by the court will be deemed to be a reference to Lok Adalat and the provisions of LSA shall apply as if the dispute were referred to a Lok Adalat under the provisions of LSA. The control and jurisdiction over the matter is retained with the court and the mediation settlement reached before mediator is placed before the court for recording the settlement and disposal of matter. Court applies the principles of Order XXIII Rule 3 of CPC and pass decree/order in terms of the settlement in regard to the subject-matter of the suit/proceedings.In regard to the matters/disputes which are not subject-matter of suit/proceedings, the court will direct that the settlement shall be governed by Section 21 of Legal Services Authority Act, 1987and shall be final and binding on all the parties to the dispute and no appeal lies to any court against the award.This type of mediation is frequently used in Matrimonial disputes, particularly divorce cases.
Private Mediation
When the parties undertake mediation individually, independent of Court proceedings, it is termed private mediation which can be used for disputes pending in Court as well as pre-litigation disputes. There is no law governing private mediation in India. 1In private mediation, qualified mediators provide their services on fee-for-service basis to the various stakeholders viz., the Court, the governmental sector, members of the public and business houses. Private mediations are being availed of by parties to settle high value commercial and family disputes. As legislation is not currently available to provide enforceability to a settlement at private mediation, the settlement terms are executed as a contract u/s 74 of the Arbitration and Conciliation Act, 1996 which are binding and has the same validity as an arbitral award. In case the dispute is pending in Court, parties have the option to file the settlement in court for a decree and in case of pre-litigation mediation, parties have the option to name the mediation process as a‘conciliation’.4 & 5
Legislative Recognition
The law relating to mediation in India is incorporated in the following legislations:
Industrial Disputes Act 1947, which provides for mediation of industrial disputes by officers appointed by the government;
Section 89 of the Code of Civil Procedure, 1908;
Arbitration and Conciliation Act 1996 (specifically Part III);
Hindu Marriage Act 1955, the Special Marriages Act 1954 and the Family Courts Act 1984, which require the court in the first instance to attempt mediation between parties;
Legal Services Authorities Act 1987, which provides for setting up Lok Adalats;
Section 442 of the Companies Act 2013, which provides for referral of company disputes to mediation by the National Company Law Tribunal and Appellate Tribunal read with the Companies (Mediation and Conciliation) Rules, 2016 (notified on 09thSeptember, 2016); and
Section 12A of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015, which provides for mandatory pre-institution mediation in those cases where no urgent interim relief (such as an injunction) is being sought by the parties to the dispute.
Section 32(g) of the Real Estate (Regulation and Development) Act, 2016, which provides for amicable conciliation of disputes between the promoters and allottees through dispute settlement forum set up by consumer or promoter associations.
The Consumer Protection Bill, 2018 passed by Lok Sabha on December 20, 2018 provides for reference of a dispute to Mediation as an ADR Mechanism and settling up of a Consumer Mediation Cell. The District, State or the National commission may direct the parties to give a written consent to settle their dispute by mediation, if there is any element of a settlement between the parties.6
Mediation Institutions
The court-annexed mediation centres are the most prominent mediation institutions in India. The Supreme Court, almost all 24 High Courts and district courts in India have mediation centres. These courts exercise original and appellate jurisdiction across the entire range of litigation. The country’s first court-annexed mediation centre was set up in the Madras High Court in 2005, and soon this model was emulated in other high courts. The courts have given the lead in institutionalizing mediation, providing training, certification, referrals, etc.1
The establishment of court-annexed mediation centres has led the path for emergence and growth of private mediation institutes throughout the length and breadth of the country viz.:
ASSOCHAM International Council of Alternative Dispute Resolution (AICADR), New Delhi
International Centre for Alternative Dispute Resolution (ICADR), New Delhi
Centre for Advanced Mediation Practice (CAMP), Bangalore
Centre for Alternative Dispute Resolution, Mumbai
Indian Institute of Arbitration & Mediation (IIAM), Cochin
India International ADR Association (IIADRA), Cochin
Mediators India, Chennai
Foundation for Comprehensive Dispute Resolution (FCDR) , Chennai
Meta – Culture Consulting, Bangalore
Prachi Mediation Chamber, Mumbai
Bangalore International Mediation, Arbitration and Conciliation Centre (BIMACC), Bangalore
Institute for Arbitration, Mediation, Legal Education and Development (AMLEAD), Ahmedabad
Alternative Dispute Resolution(ADR) Centre, Kerala (an initiative of the Centre for Public Policy Research)
Areas of dispute for mediation
Mediation is used in virtually the entire range of business and commercial disputes, employment and workplace disputes, housing and property disputes, family disputes, technology and intellectual property disputes, company and shareholder disputes, disputes relating to sports and media laws.
The Supreme Court of India in 3Afcons Infrastructure Ltd. and Anr. V. Cherian Varkey Construction Co. Pvt. Ltd. and Ors. (2010) 8 SCC 24, held that the following categories of cases/disputes are normally considered unsuitable for ADR process
(i) Representative suits involving public interest
(ii) Election to public offices
(iii) Suits for grant of probate or letters of administration
(iv) Allegations of fraud, fabrication of documents, forgery, etc
(v) Protection of courts (claims against minors, deities and mentally challenged)
(vi) Suits for declaration of title against the Government
(vii) Cases involving prosecution for criminal offences.
The following categories of cases (whether pending in civil courts or other special tribunals/forums) are normally suitable for ADR processes:
(i) Trade, commerce, contracts, corporations, property, construction, banking/financial, shipping and real estate;
(ii) Matrimonial disputes, custody cases, maintenance, partition or division of family property;
(iii) Disputes between neighbours, employers and employees;
(iv) All cases relating to tortious liability;
(v) All consumer disputes
The above categorization of cases as “suitable” and “unsuitable” is not exhaustive or rigid. They are illustrative in referring a dispute/case to an ADR process.
Developments in Online Dispute Resolution (ODR)
Online dispute resolution (ODR) is the modern and digitized iteration of the traditional ADR with the major noticeable difference only being the use of machines and networking for communication.With the rapid development of the Internet and electronic commerce, Online Disputes Resolution has been labeled “a logical and natural step” as it facilitates expeditious resolution of disputes. 7
Mediation in consumer disputes and online dispute resolution in general, has seen some progress with the Online Consumer Mediation Centre (OCMC) being set up and other Online Dispute Resolution (ODR) initiatives viz. Techno Legal Centre of Excellence for Online Dispute Resolution in India (TLCEODRI), Perry4law, ODR India, Myshikayat, Yessettle, Grievancesolutions, Consumer Online Resource and Empowerment Center (CORE), ODRways, Presolv360 mushrooming. There is no legislation on ODR in India. 8&9
Notable cases
In Salem Advocate Bar Association, Tamil Nadu vs Union of India (2003) 1 SCC 4910[Salem Bar-(I)], the Supreme Court held that Section 89 of Civil Procedure Code, 1908 introduced by Civil Procedure Code (Amendment) Act, 1999 was constitutionally valid and would help in expeditious disposal of cases in the trial
courts and the appellate courts and established a committee to, inter alia, draft rules on mediation and create a report on effective case management and be followed while taking recourse to the Alternate Disputes Resolution (ADR) referred to in Section 89to reduce the burden on courts and the Committee was requested to file its report within a period of fourmonths for consideration. It was also observed that the formulated model rules may be adopted by the concerned High Courts to give effect to Section 89(2)(d) of the Code.
The Committee filed its reports on the issues identified in Salem Bar – (I). Another Supreme Court Bench, comprising Justice Y.K. Sabharwal, Justice D.M. Dharmadhikari, and Justice Tarun Chatterjee, extensively reviewed the submitted reports in Salem Advocate Bar Association, Tamil Nadu vs Union of India, (2005) 6 SCC 34411 [Salem Bar-(II)] and observed that Civil Procedure Alternative Dispute Resolution and Mediation Rules, 2003 and Model Case Flow Management Rules will facilitate in dispensation of effective administration of justice and directed the Registrar Generals, Central Government and State/Union Territories to file a progress report with respect to adoption of the rules developed in the Salem Bar I Committee reports, within four months of the date of the judgment.
The Supreme Court in K. Srinivas Rao v. D.A. Deepa (2013) 5 SCC 22 12 decided on 22ndFebruary, 2013held that the criminal courts dealing with the complaint under Section 498-A IPC should refer the parties to mediation centrebefore they take up the complaint for hearing, if they feel that there exist elements of settlement and both the parties are willing.
The Supreme Court in State of Madhya Pradesh v Madan Lal (2015) SCC OnLine SC 57913decided on 01.07.2015held that there could be no mediation between the accused and the victim in cases of rape.
The Delhi High Court in the case of Division Bench of Delhi High Court in Turning Point vs. Turning Point Pvt. Ltd FAO (OS) 263/2017 & CM Nos. 35553-54/201715, pronounced on August 2, 2018, expressed its view that the Appellant and the Respondent ideally should negotiate their differences by mediation.
The Supreme Court of India in Moti Ram (D) Thr. L.Rs. and Anr. vs. Ashok Kumar and Anr. (2011) 1 SCC 46616 stressed that mediation proceedings are strictly confidential and observed that the mediator should send the settlement agreement signed by the parties to the Court without mentioning what transpired during the mediation proceedings,when successful and in other cases .e., when unsuccessful the mediator should simply state that mediation has been unsuccessful.
Mediation in India: Recent developments
The Ease of Doing Business Task Force at the Central Government has asked the Ministry of Law and Justice to take necessary steps to introduce a stand-alone law to regulate pre-litigation voluntary mediation in May 2017. In February 2016, the law ministry had mooted a note on similar lines, backing a new law on mediation17.
Mediation was central to the discussions at the recent three day (12th to 14th May, 2017) event Global Pound Conference Series India 2016 – 201718 titled “Shaping the Future of Dispute Resolution and Improving Access to Justice” held at the Judicial Academy, Chandigarh.Familiarity with the dispute resolution process was identified as the biggest influencer when lawyers make recommendations to parties about procedural options for resolving commercial disputes. 19
The Two-day conference (27th-28thJuly, 2018) on National Initiative to Reduce Pendency and Delay in Judicial System20 was organized by Supreme Court of India in collaboration with the Indian Law Institute, New Delhi to deliberate on the issue of pendency and delay in the judicial system.
The panel of eminent legal luminaries headed by Hon’ble Shri Justice Dipak Misra, the then Chief Justice of India deliberated on the concept of ‘case and court management system’, ‘methods of promoting Alternative Dispute Resolution’, ‘greater use of technology to endeavour to plug the gaps in justice delivery’ by taking immediate appropriate measures of identifying the cases which need urgent attention and quick disposal and suggested to strive for more alternative methods of dispute resolution in various forms like arbitration, mediation, pre-litigation mediation, negotiation, Lok Adalats, etc., and employ ADR methods through courts as courts are empowered to do so under section 89 of Civil Procedure Code, 1908 and urged the judicial officers to interact with the parties diligently to explore the possibility of ADR, wherever possible and advocated that subordinate judiciary should be trained on these aspects during their induction training days itself and highlighted that ADR mechanism can be taken online via use of technology in making justice dispensation system more efficient and fast.
Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skills.
Confused about how to get the best out of your legal career?
Do you want to get guidance directly from legal stalwarts about how to take your career forward?
JRTC Intern in association with LawSikho.com and iPleaders will be holding the first annual career development summit for law students. The summit will consist of a seminar and panel discussion series on Saturday, April 20, 2019 (10:30 AM to 02:00 PM). Please come and participate in the conversation about “SKILLS REQUIRED TO BE A SUCCESSFUL LAW PROFESSIONAL”.
Hon’ble Mr Justice K.G. Balakrishnan, Former Chief Justice of India will preside over the Seminar as the Chief Guest & Key Note Speaker and Dr. Adish C Agarwalla, Senior Advocate, President International Council of Jurists will be the Guest of Honour.
The discussion pertaining to skills required to be a successful legal-professional in the seminar shall cover the following areas of law practice:
Civil
Corporate
Criminal
Judiciary
All the students, researchers, and faculties are invited to attend the seminar, which will be followed by High Tea.
Date of the Seminar: Saturday, April 20, 2019
Last date to Register: Thursday, April 18, 2019
Who is it for?
This is primarily for law students. Law students from all years will tremendously benefit, though in different ways. However, young law graduates may also get tremendous value. Especially if you are working on making a good CV or finding a direction in your career.
What is in it for you?
Ask your questions directly to successful lawyers and stalwarts
Discover a direction in your legal career
Get inspired and find your path of growth
Expand your understanding and perspective of the legal industry
Network with lawyers who can help you in your career journey
Venue: Indian Society of International Law, New Delhi
The seminar shall be comprised of two sessions
Inaugural Session (11:00 AM to 12:00 PM)
Technical Session (12:15 PM to 02:00 PM)
About the organization
JRTC Intern is a subsidiary of JRTC Consultancy which is incorporated as a Private Limited Company and is recognized as a startup by the Department of Industrial Policy and Promotions, Ministry of Commerce & Industry, Government of India. JRTC intends to create a win-win scenario for both the students as well as firms by its initiative through General law internships test (GLIT).
LawSikho.com is India’s leading online legal courses platform.
About the seminar
This seminar is a 4 hours event being curated by JRTC Intern in association with iPleaders and LawSikho.com, with an audience of about 200 in the Auditorium of Indian Society of International Law, New Delhi. Our goal is to bring together bright minds to give talks that are idea-focused, and on a wide range of subjects, to foster learning, inspiration and wonder – and provoke conversations that matter.
Legal education is, in fact, a multi-disciplined, multi-use arena of education, which can highly develop the human resources and idealism needed to strengthen the country. A law graduate, a product of such education, should be able to contribute to national advancement and social change in a much more constructive and better manner. However, most law students today are struggling to discover a direction in their career, and this event is an effort to provide them with the direction and inspiration to succeed.
Through this seminar, one can acquire and learn the most essential key that a legal professional must have – Skill Sets. This seminar will create new possibilities in your life as a law student and you will be left with a clear plan about how you will achieve your dreams.
Please be informed, due to limited seats, we will be accepting only 200 applications on the first come, first serve basis. Selected people will duly receive invitation cum entry pass & other necessary details by April 19, 2019 (05:00 PM)
Chief Guest & Keynote Speaker
Chief Guest
Hon’ble Mr. Justice K.G. Balakrishnan, Former Chief Justice of India
Guest of Honour
Dr. Adish C Aggarwala, Senior Advocate, President, International Council of Jurists
Distinguished Speaker
Ms. Geeta Luthra, Senior Advocate, Supreme Court of India
Mr. Ashvani Kumar Upadhyay, Advocate, Supreme Court of India
Mr. Vivek Narayan Sharma, Joint Secretary, Supreme Court Advocates on Record Association
A creditor is a person/entity to whom a debt is owed. IBC categorizes creditors into:
i. Financial Creditors; and
ii. Operational Creditors.
Financial Creditor is defined under IBC as a person to whom a Financial debt is owed and includes any person to whom debt has been legally assigned or transferred. Financial Debt is defined under Section 5(8) of IBC to mean a debt which is disbursed against the consideration of time value of money and inter alia includes money borrowed against payment of interest etc.
An operational Creditor is a person under IBC as a person to whom an Operational Debt is owed and includes any person to whom debt has been legally assigned or transferred. Operational Debt has been defined as a debt in respect of the provision of goods and services including employment or a debt in respect of repayment of dues arising under any law for the time being in force and payable to Central government, State Government or any other local authority.
Constitution of Committee of Creditors
Committee of Creditors is formed by the Interim Resolution Professional once the Corporate Insolvency Resolution Process is initiated against a Corporate Debtor.
Committee of Creditors (CoC) is a committee consisting of Financial Creditors of the Corporate Debtor. This body forms the decision-making body in the Corporate Insolvency Resolution Process (CIRP)
As per section 18 of the IBC, 2016, it is the duty of the Interim Resolution Professional (IRP) to constitute the Committee based on all the claims received against the Corporate Debtor and determination of the financial position of the corporate debtor. It shall consist of those financial creditors whose claims have been received within the stipulated time.
Section 24(6) of the Code provides that each Creditor shall vote in accordance with the voting share assigned to it based on financial debts owed to such creditor.
Who can be a Member of CoC?
1. As per the IBC, only the Financial Creditors can be a part of the CoC. Operational creditors cannot be a part of the CoC. However, Operational Creditors whose claims amount to ten percent of the Total debt can be allowed to attend the meeting, however, they shall have no voting rights.
2. The voting power of the CoC is based on the amount of admitted claim in that respect.
3. A financial creditor shall be deemed to be the member of CoC from the date his claim is admitted by the IRP.
4. Inclusion of a Financial Creditor in CoC as a member subsequent to constitution of the CoC, shall not affect any decision taken by the CoC prior to its inclusion.
5. Directors of the Company cannot be a member of the CoC, however, they can be present without having any voting rights.
6. The related party shall not be representing the committee of creditors.
Meeting of CoC and its Quorum
The first meeting of the CoC shall be held within seven days of forming of the COC. As per Regulation 22 of the CIRP Regulations, the quorum of the CoC shall be thirty-three percent (33%) voting and present either in person or through video conferencing.
Voting Rights
To approve a resolution plan at least 66% of the Creditors should vote in favour of the plan. The Financial Creditor who does not become a part of the CoC have no voting rights. The calculation of 66% votes should be on the basis of CoC members who have come forward and whose claims have been admitted.
For the approval of other routine decisions, the voting threshold is 51% or more of the voting share of the financial creditor. The Creditors can vote through video conferencing, emails or through an authorized representative of a class of financial creditors.
Operational Creditors v. Financial Creditors
The IBC confers certain privileges on the Financial Creditors as against the Operational Debtors. The Bankruptcy Law Reforms reasoned that the members of the creditors’ committee have to be both with the capability to assess the viability, as well as be willing to modify terms of existing liability in negotiations. Typically, operational creditors are neither able to decide on matters regarding insolvency nor ready to take the risk of postponing payments for better future prospects of the entity. The committee concluded that, for the process to be rapid the creditors’ committee should be restricted to financial creditors only.
This differential was challenged on the ground that it is discriminatory and violative of Article 14 of the Constitution of India. However, the Supreme Court of India in the Swiss Ribbon Pvt Ltd v. Union of India upheld the constitutional validity of the IBC and held that classification between financial and operational creditor is neither discriminatory, nor arbitrary nor violative of Article 14 of the Constitution of India and there is an intelligible differentia between the two classes of the creditors which has a direct relation to the objects sought to be achieved by the Code.
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Should lawyers be allowed to accompany the Creditor in Committee of Creditors?
In India, under the IBC, there is no provision which allows the lawyer to accompany his client in the Committee of Creditors. However, the IBC provides that where the creditor is unable to attend the meeting, he has the power to authorize any agent or any other person to go on his behalf. However, there is no provision which allows the corporate debtor to take the lawyer along with him in the meeting. Thus, the IBC, IBBI and the Courts rules are silent on this.
Whether the lawyer should or should not be allowed to accompany his client in the committee of creditors is a debatable issue. As discussed earlier, Financial Creditors are only given the power to vote in the CoC in proportion to their claim. The Financial Creditor includes both secured as well as unsecured creditors. Issues are decided by a majority of votes. The goal of the CoC is to maximize the value for the creditors. What constitutes maximum value may differ from one creditor to another creditor. One creditor may prefer immediate liquidation, while the other creditor may prefer a reorganization to ensure a continuous business relationship with the debtor. The challenge is to reconcile these differences.
It is clear, the secured creditor is at a better footing than the unsecured creditor. The reason for the same is:
1. The debtor has already provided security to the creditor against the debt. As a result, the Financial Creditor being a financial institution has other remedies to get back its debt. The Financial Creditor still has the remedy to approach the court under SARFAESI and recover its debt by auctioning the security provided by the debtor.
2. Once the liquidation process is initiated by the National Company Law Tribunal on the failure of CIRP, due to any reason, the Secured Creditor’s debt will be satisfied before the satisfaction unsecured debtor’s debt.
Thus, the Secured Financial Creditor’s and his debt are sufficiently secured under various laws.
The interest of the secured creditor is significantly different from the interest of an unsecured creditor and their ability to participate in and potentially alter the outcome of decisions by the creditors may not be in the best interest of all creditors. The Creditors are nowhere obligated under the IBC to take such decision, which protects the interest of all shareholders.
Since the unsecured creditor is at a lower pedestal, the IBBI should allow them to be represented by their lawyer. This will help the creditor to secure his interest. The lawyer will have the required technical knowledge, which the creditor might not have. The lawyer would be in a better position to negotiate the restructuring plan, assess whether any fraudulent or preferential transfers are taking place and whether or not litigation is commenced. The lawyer can help the creditor suggest a viable plan protecting his interest and assuring the recovery of his money or reducing the risk. The lawyer can effectively assist the creditor in restructuring the business entity to maximize recovery in an expeditious manner.
Further, while litigating for his client, the lawyer would have a better insight about the proceedings in the CoC and would exactly know why his client did not get relief and represent him accordingly before the adjudicating authorities.
Bankruptcy often involves hundreds of directly interested parties. The counsel can assess and coordinate the host of divergent interests.
The lawyers can also act as mediators since they are adept at negotiations, they can navigate smoothly through the potential roadblocks.
Thus, this will ensure that the interest of unsecured creditors is also represented effectively and will mitigate the disputes as well as future litigations.
However, the only disadvantage that can be in this arrangement is that this may scuffle the whole process of Corporate Insolvency Resolution Process. It may cause unnecessary delay, and there may arise a situation where there is no consensus on a single plan.
Thus, Insolvency and Bankruptcy Board of India should devise a way wherein, it allows the advocate to allow them to accompany the creditor to the Committee of Creditors, and at the same time make such rules and regulations which assures that the entire purpose of CoC and IBC is not defeated.
Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.
This article is written by Parshav Gandhi, a 3rd-year student, Indore Institute of Law. This article mainly discusses how the tort gets discharged i.e. how the right/liability of parties in the suit of a tort, comes to an end.
Meaning of Tort
The word “Tort” is derived from the French word “Tortum” which means “Twisted”.
A tort is an act/conduct that is twisted. It means the violation of a legal right of a person by the act of the other person, i.e. the breach of the legal right of the other person.
The tort is a civil wrong, but all the civil wrong doesn’t come under the ambit of tort. If one person does any civil wrong to another person, and that wrong comes under the ambit of tort then the person against whom the wrong has been done is entitled to get remedy in form of unliquidated damages.
But the law of tort also discusses various methods by which the act of tort gets discharged.
Discharge of Tort
There are seven different modes through which tort is discharged and no remedy will lie for tort. It is a process through which the tort comes to an end. A wrongdoer is not liable for his actions.
Following are the methods of discharge of torts.
Death of the parties
Here the maxim ‘actio personalis moritur cum persona’ applies which means if the person dies his personal right of action dies with him.
Actio personalis moritur cum persona this is the important maxim, it means if the person who commits a tort or the person against whom the tort is committed dies, the personal right or the right to receive the damages or the right of action dies with the person.
There are two situations where this maxim applies
Death of the person against whom tort was committed i.e., Petitioner.
when the person against whom the tort was committed i.e. the plaintiff who approached the court and filed a case died, so his personal right of action dies with him only.
Illustration
If A files a case against the act of tort done by B. If A dies during the course of trial and the case is still pending before the court. Due to the death of the A, the tort gets discharged, as the right of action of A dies with him only.
Exceptions to the maxim of ‘Actio personalis moritor cum persona’ with respect to Petitioner
In India there are laws which constitute the exception to the above maxim like;
The Legal Representative Suits Act, 1885
As per this Act, the legal representative or the executors of any person, after his death can represent the deceased person in the court of law.
Illustration
If A died during the procedure of trial of court. His legal heir or representative can represent him in the court of law.
Similarly, in different laws/act like Fatal accident act, the Indian Succession Act, Workmen Compensation Act etc. the representative of the plaintiff can represent him in the court of law.
Death of the person who commits tort i.e. Defendant
It means the person who commits the act of tort against any other person i.e. the defendant dies, the tort gets discharged.
Illustration
If Ram commits the act of tort against Geeta, if Geeta files a complaint against Ram, but if during the course of trial Ram died, then his right of action also dies with him i.e. the discharge of tort.
In this case, the defendant received some amount by misrepresentation of fact, but the defendant died. The High Court of Orissa held that where a money decree was passed against a person in respect of the amount received by him from the decree-holder by misrepresentation of the facts, the liability would be personal and could not be extended to his son under the law, as whatever the relief a decree-holder has against the father ended with the father’s death.
Exceptions to the maxim of ‘Actio personalis moritor cum persona’ with respect to Defendant.
In India there are various laws which constitute the exception to the above maxim like;
The Legal Representative Suits Act, 1885-
As per this act, if any person involved in any type of tortious act, died during the course of the trial. The right of action passes to the legal representative of that person.
Illustration
If A does an act of trespass to the good against B in past. Now if A dies and it is proved that he was liable for damaging B’s good. So the damages for damaging B’s good has to be paid by his legal representative.
Similarly, in different laws/act like the Fatal Accident Act, Indian Succession Act, Workmen Compensation Act etc. The representative of the defendant has to represent him in the court of law
By Waiver
The second method of discharge of tort is by the waiver. The concept of waiver is when a person has more that one remedy available to him, as a result, he has to elect one of them. He cannot apply for both the remedy except in the case of defamation and assault.
Illustration
If A files a case against B that B has committed a tort against A. If A has right to get more than one remedy he has to choose any one of them, i.e. if he has the remedy in both tort and contract law, now he has to choose one between them.
The main two principles lying in the doctrine of Waiver are:
The person has to choose any one remedy.
If the person fails to get the remedy he chooses, the court of law does not allow him to go back to an alternative remedy.
Illustration
If A files a case against Z and has two remedies for which he can approach the court of law. If he chooses the first remedy and loses the case. A cannot approach to the court for the alternate remedy i.e., remedy number 2.
The Waiver can be Implied or Express
In Express waiver, the person expressly communicates about his choice in the court of law.
Illustration
If A file a case and he has the remedy in both, contract as well as Tort. When the court asks him he has to communicate his choice to the court.
In the Implied form of waiver, the person impliedly communicates about his choice for which remedy he is applying.
Illustration
If A has two remedies available to him like one under contract and one under Tort. if he applies for Contract, it becomes clear, he elects the remedy under the contract.
Accord and Satisfaction
Concept of accord means when the parties of the tort i.e. the person who commits the tort and the person against whom the tort has been committed, come to an agreement and settle the dispute. Such an agreement is known as Accord. In general term, it means settling the issue by accepting some consideration in lieu of the right of action.
Satisfaction means the actual payment of consideration agreed by both, the person who commits a tort and the one against whom the tort committed.
When both the accord and satisfaction once completed, it results in the discharge of tort and the dispute does not proceed in a court of law.
Illustration
If A dies due to injury caused by B’s car. If A’s family comes to an agreement that B will pay Rs. 1,50,000 as compensation to them, that’s the situation of Accord. When they received the actual payment of 1,50,000 Rs. from B, that’s the situation of Satisfaction. So, by settling the issue and accepting some consideration A’s family lost their right of action and the act of tort discharged.
The only condition in the concept of Accord and Satisfaction is the consent of the party should be free and not from fraud, coercion or undue influence.
Illustration
If A, a son of a successful businessman brutally hit one of his servant i.e. trespass to the body and if A tries to make his servant enter into accord by using some type of undue influence on him. Due to that influence, the servant gave his consent, this is not considered as free consent and the accord and satisfaction are not valid.
Release
A Release means giving up the right to the action. It means when a person by his own choice discharged the tort. This right is only provided to the person against whom the wrong has been done.
Illustration
Situation 1: A is the person against whom B does any act of Tort and if A, by his free consent want to release B from the liability, he can do so.
Situation 2: A is the person against whom B and C both commit an act of tort and A by his choice release B from the liability, this does not mean that C is also released from his liability.
The release should be voluntary and given by free consent from the injured person. If the consent is taken by coercion, undue influence, or any other unlawful means then that release should not be counted as a release and the tort is not discharged.
Illustration
If a person is a police inspector, commits an act of tort against another person. By using his position and by threat, take the consent of the injured person and release himself from the liability, that release is not a valid release.
Judgement
In this method, the discharge of tort happens by the judgement given by the court. If once the court gives judgement on the matter, the tort gets discharged, no appeal for the same act of tort can be claimed for the same remedy in the court of law.
The concept of this method of discharge of tort is based on the legal maxim of Res-Judicata, it means, if any cause of action decided previously by the court, the same cause of action should not be entertained by the court twice.
Illustration
If A gets the remedy against B for the accident committed by him previously by the judgement of the court. Later he found that he needs to go through a further operation. He cannot claim another remedy for the same again in the court of law.
In Fitter v. Veal, (1701 12 Mod. Rep. 542)
In this case, the plaintiff files a case against the defendant demanding damages against the act of assault by the defendant and finally he gets the remedy from the defendant as the court of law allows the remedy to him. Later he discovered that he has to go through a number of surgeries. He filed another petition against the defendant demanding more remedy against the act of assault again in the court of law.
The court denied the petition and state that, If once court gives judgement on the matter, no further appeal for the same act of tort can be filed in the court of law as the tort gets discharged.
Exceptions
If the petition was between the same party but is for different remedy or the action taken in respect to the violation of another right. Then the petition can be allowed.
In this case, the plaintiff was a cab driver and already received compensation against the damage to his cab. Later discovered, due to the injury caused in the accident, he got a fracture in his hand. He has the right to apply for the remedy against the trespass to his body as well.
If the person who is liable for the act previously does the same act another time.
Illustration
If A commits the tort of trespass against B previously and held liable by the court of law. If he again commits the same crime against B. If A plea defence that the court cannot punish him for the same offence twice. The defence is not valid because this case was considered as a fresh one.
Acquiescence
In this method, the tort gets discharged because of the incapacity of the plaintiff himself i.e. if he has no time to go to court, no money to pay the court fees, or any other incapacity. When any person is entitled to enforce his right, and he doesn’t enforce his right for a long time, this makes other party waived from his liability.
Illustration
if A is entitled to enforce his right against B. If A neglects to enforce his right for a long time, it automatically waived B from his liability.
Law of limitation
Under this method the tort gets dismissed due to the limitation i.e. when the prescribed time limit to file the case gets over, in this situation the tort gets dismissed and no person is entitled to enforce his right.
Like, in the case of false imprisonment or libel the limit to file a case is 1 year, in case of trespass to immovable property, the limit set is 3 years etc after the time limit gets over, no person can enforce his/her right.
Illustration
If a tort of trespass to the property has been committed by B against A, if A fails to apply against it within 3 years in the court of law, then he cannot apply as he lost his right to apply due to limitation.
Conclusion
A tort is an act/conduct that is twisted. It means the violation of a legal right of a person by the act of the other person i.e. the breach of the legal right of the other person. But the right of action of the party can become discharged in certain conditions like the death of any of the party, by Waiver, by Accord and Satisfaction, by Release, or by the judgement of the court of law. Through the above methods, the tort becomes discharge and no remedy will lie for tort.
This Article is written by Khushi Agrawal, a student of Symbiosis Law School, Noida. She has discussed the concepts of recession of a contract in detail.
Introduction
The word rescind means an express cancellation of the contract by one party. The recession must be communicated in the same manner as to offer. It is available where consent is caused by fraud, misrepresentation, coercion and undue influence. The right to rescind the contract in the case of undue influence is given under Section 19A of The Indian Contract, 1872.
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What are the different modes of recession?
Recession by notice
No form is required by Section 19 of the Indian Contract Act, 1872 for recession. It is sufficient under Section 66 that the communication is communicated in the same manner and is subject to the same rule as if it were a proposal. Notice of recession to an agent is notice to the principal. A declaration of recession before commencing any proceedings is not necessary as a matter of law, though, generally speaking, the prudent course is to repudiate as soon as possible after knowing the facts and rights to rescind else, the contract remains valid, and may expose such party to damage for breach of contract.
Setting aside by the contract
The process of recession is essentially the act of the party rescinding, and not of the court, although, it is common to speak of a court ‘setting aside’ or rescinding a contract. A decree of recession brings a suit to set aside the contract. A decree of a recession may become essential where a property has been transferred on the execution of a deed. The Specific Relief Act, 1963 provides Section 27 to Section 30 for a recession by the court.
Recession as a defence
The will to rescind may also be declared by way of defence to an action brought on the contract. If a suit is brought by a party to enforce a contract, the defrauded party can pray for avoiding the contract in his written statement being well within the period of limitation, and it is not necessary for him to bring the suit to avoid the contract. His defence cannot be defeated by lapse of time. The innocent party may raise the defence of entitling him to recession in a suit for specific performance, which is enabled by Section 9 of the Specific Relief Act.
Who can rescind the contract?
The option of avoiding a contract is mentioned under Section 19 and Section 19A of the Indian Contract Act, 1872. Once affirmed by the person entitled to rescind the contract, it cannot be questioned by a third party.
Guilty Party
If only one party acts fraudulently, he cannot be allowed, as plaintiff or defendant,to plead, or adduce evidence in support of his fraud. Where one party forms an agreement erroneously, and the other party, knowing of the error, acts fraudulently, the latter cannot be allowed to take advantage of the error and enforce it. Where both the parties have acted fraudulently, the courts will refuse to enforce the fraudulent transaction. Here, the plaintiff’s suit will be dismissed; and the defendant who suppresses the fraud, cannot plead and prove it to defeat the plaintiff’s claim.
Recession of part of the contract
A person entitled to rescind a contract cannot rescind a part only. When he decides to repudiate it all together. Section 26(2)(d) of the Specific Relief Act 1963 gives the power to the court to rescind the contract if only a part is sought to be rescinded, and such part is not severable from the rest of the contract. This appears to suggest that the recession of a part of the contract can be severed from the rest of the contract. This would be a power with the court, and not the right of a party. The High Court of Australia has also decided that equity permits a court to order partial rescission of a contract induced by fraudulent misrepresentation.
In contrast, under the UNIDROIT principles, where the ground of avoidance affects only individual terms of the contract, the effect of avoidance can be limited to individual terms of the contract, unless it would, in the circumstances, be reasonable to uphold the remaining contract. The test is not just of severability but also of reasonableness.
What are the grounds for rescission of contract?
The recession may take place only after the contract has been fully established and thus no legal agreement has been entered into if a party is not aware of or intended, and recession is, therefore, neither necessary nor possible. Recession is a complete cancellation of the contract, which means all provisions will be terminated. Contracts are cancelled on a variety of grounds. Common withdrawal reasons include:
Mutual Consent
If the parties agree to rescind the contract, a separate written document should indicate their intent and consent. In cases where only one party wishes to withdraw from the contract, it must give the appropriate written notification of the legal ground on which the withdrawal will be requested and a court may have to determine if the withdrawal can be done.
What is the process for rescinding a contract?
First, it must be determined whether the contract can be rescinded. This can be done by reviewing the contract and its clauses to see if it contains rescission instructions. If there is no such clause in the contract, the person seeking recession should contact an attorney or check the statutes in their state.
If the contract cannot be rescinded under state or federal law, the person may attempt to negotiate a rescission with the other party. Any contract may be rescinded by mutual agreement, even if it is not allowed by the contract itself.
The rescinding party must determine whether there are legal grounds for rescission, such as error, fraud, or coercion. Finally, a written rescission notice must be given to the other party, after which the parties may negotiate a mutual rescission, or either party may file a civil lawsuit.
What are the problems faced in contract formation?
.All agreements shall be concluded by legal means and under legal conditions. No consent may be obtained by force or intimidation. All parties must understand clearly what they have entered. Problems with contract formation may include issues such as:
Mistake
If a party has entered into the agreement on the grounds of reliance on or belief in an erroneous fact or a mistake of law, a contract may be rescinded. Rescission based on the error of fact may be permitted if the effect of the error causes a change in the intent of the contractor, making the enforcement of the contract unconscionable.
Rescission from an error of law may be granted if a party is aware of the true facts of the contract, but is mistaken as to the legal ramifications of those facts. There is an error of law only if
all parties believe that they know the law as it relates to the contract but are mistaken, or
one party misunderstood the law at the time it is entered into the contract and the other party fails to correct the other party’s misunderstanding.
Fraud
Some types of fraud support a recession and the fraud can be real or constructed. Real fraud occurs where one party misrepresents something to mislead the other party. Constructive fraud occurs when one party engages in misleading behavior without attempting to defraud the other party. When fraud of either type occurs, the innocent party may terminate the contract as it enters into the contract on the basis of facts that were not true.
Duress, Coercion, or Undue Influence
An individual can not be forced under threat of harm, coercion, or other hostile influence to enter into a contract. When considering whether to grant a rescission on the basis of force, coercion or undue influence, the adequacy of the consideration granted to the rescinding party shall be taken into account.
A contract is valid until avoided
Rescission may take place if one of the contracting parties lacks the ability to legally enter into a contract. For instance, when a party is under 18 years of age, intoxicated, mentally incompetent, or ill, a party cannot enter into a contract.
The judgment of the Madras High Court, on the contrary, held in SNR Sundara Rao v Income Tax Commissioner[1] that the invalid contract, when avoided in the case of the party affected by it, took effect from the date of the transaction and not when it was avoided, was not in the case of a contract involving third party rights. The question under the Income Tax Act 1961 was whether tax was payable from the date on which the father’s trust deeds as a Karta of joint properties were declared void by a court decree or from the date on which the transaction took place. It was held that from the later stage it was so. An alienation that is perfect until it is set aside.
What is the effect of the recession of the contract?
The election of the party rescinding relieves the other party from any further obligation under the contract and enables both the parties to make arrangement for the future on the footing that the contract has been once for all broken and is at an end.
There is a substitution by implication of law for the primary obligation of the party in default, which remains unperformed, where there is a secondary obligation to pay monetary compensation to the other party for the loss sustained by him in consequence of non-performance in the future. The unperformed primary obligation of the other party is discharged.
Under the Contract Act, a voidable contract, when avoided, has been held to become void. When a voidable contract is rescinded, the other party need not perform his outstanding obligation under the contract. The party rescinding the contract must restore the benefit received under the contract to the other party. Any party receiving anything under the contract is liable to restore it or make compensation for it to the other person from whom it has been received.
Damages and Rescission
Under the English law, a person induced to enter into a contract by a fraudulent misrepresentation is entitled to rescind the contract or claim damages, or both; and the measure of damages is applicable under the law of torts. Under The Misrepresentation Act 1967, in force there, damages can also be claimed in a similar manner for negligent misrepresentation.
Under this Act, the party is entitled to avoid, but insisting on performance, can be awarded damages, in lieu of performance or enforcement and is entitled to restitution under Section 65, if he elects to rescind it. It does not expressly provide for damages on a recession unless the provisions of Section 75 are interpreted to extend the contracts voidable under Section 19 and 19A, but damages have been awarded under the law of torts.
When is recession not available?
There are situations where rescission as a remedy is not available and the decision is at the court’s discretion as an equitable remedy. A judge may deny rescission on the basis of certain facts, including:
One party has substantially fulfilled its part of the contract
A third party has already received some benefit from the contract
The requesting party has committed some mistake in relation to the contract (referred to as “unclean hands”)
The requesting party has unnecessarily delayed the request for rescission, resulting in some prejudice to the other party
The requesting party has already requested damages.
After requesting a monetary award, a contract withdrawal cannot be obtained.
Conclusion
The other party is legally entitled to have the contract terminated between two or more persons when there is a misrepresentation by one party. A contract can be rescinded either by release or by agreement. Certain provisions of the Specific Relief Act, 1963 provide the aggrieved party with a mode of judicial redress against the opposite party. Rescission is fundamentally a method of undoing the injustice to a party.
This Article is written by Khushi Agrawal, a student of Symbiosis Law School, Noida. She has discussed the concepts of agreements in restraint of legal proceedings in detail.
Introduction
An agreement is void if it restricts any person from enforcing his contractual rights through ordinary court proceedings or if it limits the time within which he may enforce his rights. The agreement is void if it extinguishes the right of any party to it, or releases any party thereof from liability, in respect to any contract on the expiry of a specified period so as to restrict any party from enforcing its rights, is void to that extent.
Exception
A contract may be referred to arbitration for any disputes that may arise. When two or more persons decide to resolve the matter that may arise through arbitration then it shall not render the contract void.
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Impact of Indian Contract Act of 1996
The first paragraph of Section 28 of the Indian Contract Act has been replaced with a new paragraph. The new paragraph changes the entire base of the original Section 28. Therefore, it is clear that the purpose of this new paragraph in Section 28 is to state that if any clause in an agreement not only bars a remedy but also extinguishes the right, it will be void to that extent. It will, therefore, make a substantial change in contract law.
In Vulcan Insurance Co. Ltd v. Maharaj Singh[1], the Supreme Court held that a clause in an insurance policy to the effect that the insurer will not be liable for any loss if the claim is made 12 months after the loss is not void as it only provides for the right accruing under the contract to a party to be forfeited and does not attract the mischief of Section 28 of the Contract Act. This new provision which does not provide for any retrospective effect would render this decision not a good law from the date when this amendment comes into force. In this respect, another decision of the Supreme Court may be looked into.
In Food Corporation of India v. New India Assurance Co.Ltd.[2], the Supreme Court, also considering a clause in the fidelity insurance bond, held that it was clear from the agreement that it did not contain any clause which was found to be contrary to Section 28 of the Contract Act because it did not impose any restriction on filing a suit within six months of the date of termination of the contract as claimed by the insurance company, but what was agreed was that after the expiry of six months from the date of termination of the contract, Food Corporation would have no right under this bond and this clause could not be construed as curtailing the normal limitation period for filing the suit.
In National Insurance Corporation Ltd. v. Sujir Ganesh Nayak and CO.[3], it was held that the condition in an insurance policy relieving the insurer from liability for loss and damage unless the claim was raised before the expiry of the specified period from the beginning of the loss or damage, such a condition even if the period specified therein was shorter than that prescribed by the statute for filing a suit for that purpose is not hit by Section 28 of the Contract Act.
The impact of the above amendment is that, since the amendment has come into force, the principle laid down in the above decision of the Supreme Court would no longer be treated as good law in the light of Section 28 of the Indian Contract Act as amended by the Amendment Act of 1997. Since the date of the amendments coming into force, any condition of the contract, in which a stipulation is made that the right to the claim would be barred, if the claim was not raised before the expiry of the specified period from the incurring of the loss or damage would be void under the amended Section 28 of the Indian Contract Act, because of the first paragraph of the amended Section 28 of the India Contract Act.
Amended Section 28 not retrospective
Section 28 is not retrospective. A contract specifies that if within the stipulated period the arbitration is not claimed, the party will lose the right to claim relief under arbitration. In a contract of Insurance, the policy provides that the claim under the insurance has to be made within the period stipulated therein. Otherwise, the benefits flowing from the policy would stand extinguished. The period specified less than the period of limitation provided in the Limitation Act for a suit under the contract. But such extension of right is impermissible under the amended Section 28 of the Contract Act. But considering the fact that the amendment was prospective in nature and the contract was entered prior to the amendment, the condition in the policy was held to be valid in the light of the provisions of Section 28 prior to its amendment in 1996 as happened in Oriental Insurance Co. Ltd v. Karur Vysya Bank Ltd[4].
Unilateral covenant depriving another party to enforce its right under the contract.
A contract entered into by the parties is stated as an international commercial contract and Clause 13 of the agreement provides a unilateral covenant by which the sellers alone would have the right to refer any dispute to the arbitration and to institute any suit against the buyers in any court of competent jurisdiction. Such clause being in the nature of unilateral covenant depriving the plaintiff buyer to enforce the rights under the contract, either through the arbitration or through ordinary civil court is barred under Section 28 of the Indian Contract Act as amended by 1996 Amendment – Emmsons International Ltd. v. Metal Distributors (U.K.)[5].
Limitation of time to enforce rights under a contract- Section as stood prior to the 1997 Amendment
Under Section 28, an agreement which limits the time within which a party to the contract may enforce its rights is void to that extent. Therefore, under this provision, an agreement which provides that a suit should be brought for breach of an agreement within a period of time shorter than that provided in the Limitation Act is void to that extent. This is because the effect of such an agreement is absolute to restrict the parties from enforcing their rights after the expiry of the period specified in the agreement, even though it may be within the limitation period prescribed by the Limitation Act.Such an agreement must, however, be distinguished from those which do not limit the period within which a party may enforce its right, but which provides for the release or forfeiture of rights if no suit is brought within the period specified in the agreement.
Agreement invalid under Section 28
Agreements provide that a person in whose favour a provision for maintenance has been made is not entitled to sue for arrear maintenance for more than one year, is held to be void- Swaraj Bandhu v. Gyanada Sundari.[6]Framed under Section 35 of the Post Office Act by which the liability in respect to sums specified by a remittance has been limited unless a claim is preferred within one year from the date of posting of the article is not only beyond the powers conferred by the Act, but also violative of Section 28 of the Contract Act- Union of India v. Mohd. Nazim[7].
On the contrary, a contract which does not limit the time within which the insured could enforce his rights and only limits the time during which the contract shall remain alive doesn’t offend Section 28- Pearl Insurance Co v. Atmaram[8]. It is clear that an agreement providing for relinquishment of rights and remedies is not valid, but an agreement for the relinquishment of the agreement is valid under Section 28. Therefore, a clause in an insurance policy making an award by an arbitrator as a condition precedent to the right of action against the insurer does not attract Section 28-National Insurance Co. Ltd v. Calcutta Dock Labour Board[9].
Limiting Jurisdiction of one or more Competent Courts
This section nullifies only that agreement which absolutely restricts a party to a contract from enforcing the rights under that contract in ordinary tribunals. It does not apply where a party agrees not to restrict the enforcement of its right in ordinary tribunals but only agrees to a selection of one of those ordinary tribunals where a lawsuit would normally be tried. The validity of an agreement whereby the parties prefer one of the two courts depends on the fact that both courts must have jurisdiction in deciding the matter. Where two or more courts have jurisdiction to try a lawsuit, there is no opposition to public policy or contravention of Section 28 of the Contract Act to the agreement between the parties limiting jurisdiction to one court.
Agreements extending the period of limitation
So far as Section 28 of the Contract Act is concerned, there is no doubt that this section has no application agreements extending the period of limitation. Such type of agreements by which the limitation period is extended contrary to that provided in the Limitation Act would be void under Section 23 of the Contract Act as it would have the effect of defeating the provisions of the Limitation Act- Jawaharlal v. Mathura Prasad.[9] There is a clear mandate in Section 3 of the Limitation Act that every suit instituted after a period of limitation prescribed by the Act shall be dismissed although limitation has not been set up as a defence.
Restraint of Legal Proceeding
No one can exclude themselves from the protection of the court by contract. The citizen has the right to have his legal position determined by the ordinary tribunals, except, subject to contract When there is an arbitration clause that is valid and binding under the law; when the parties to a contract agree on the jurisdiction to which the dispute relating to the contract shall be discharged.
Absolute Restriction
If the limitation is not absolute, this section will not apply. Where one of two competent jurisdictions is excluded by agreement, that does not affect the absolute removal of jurisdiction and a clause does not infringe Section 28.
Agreement Restraining the Enforcement of Right
An agreement to not to sue for wrongful dismissal by a servant is invalid. Under this section, a special agreement was held void between a barrister-advocate and his clients that the latter would not be charged for fees. In Hyman v Hyman, a separation act covenant provided that the wife would not apply for maintenance to the divorce court and it was held that it was null and void as being contrary to public policy. But in a later case, the covenant of the wife not to invoke the divorce jurisdiction over maintenance for the child and herself was completely void. The agreement could be enforced in a case where the spouses agreed to a financial arrangement after the nisi decree, provided that the marriage houses be given to the wife, and she agreed to waive and relinquish all maintenance claims. The rule in Hyman v Hyman does not apply where the arrangement was brought before the court and the court passed an arrangement order.
Agreement not to appeal
An agreement where the parties to the lawsuit bind themselves before a judgment is passed in the court of the first instance to abide by that court’s decree and forgo their right of appeal is valid and binding. By the agreement not to appeal, for which the indulgence granted by the respondents was a good consideration, the appellant did not restrict itself entirely from enforcing a right under or in respect of any contract.
Agreements Prescribing Jurisdiction
Parties cannot confer jurisdiction on a court that they do not possess through private agreements, nor can they divest a court of jurisdiction that they have under ordinary law. The principle that parties cannot, by consent, confer jurisdiction on a court or deprive a court of jurisdiction has been stated to apply to cases of a court’s inherent jurisdiction over the subject matter of the suit, and the issue of territorial jurisdiction as not a matter of inherent jurisdiction.
This Article is written by Khushi Agrawal, a student of Symbiosis Law School, Noida. She has discussed the scope and nature of The Indian Partnership Act, 1932 in detail.
The Indian Partnership Act, 1932 defines a partnership as a relationship between two or more individuals who agree to share the profits of a business run by them all or by one or more individuals acting for them all. Individuals who have entered into a partnership with each other are called “partners” and collectively a “company,” and the name under which their business is carried on is called the “company name.”
Illustrations
X and Y purchase 100 bales of cotton that they agree to sell on their shared account. For the sale of such cotton, X and Y are partners. X and Y purchase 100 bales of cotton and agree to share. X and Y are not partners.
X agrees with Y, a goldsmith, to purchase and furnish gold to Y, to be processed, sold and to share the profit or losses that result. X and Y are partners.
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Background of The Indian Partnership Act,1932
The Indian Partnership Act, 1932 came into effect on the 1st day of October 1932 and was passed in 1931. This Act replaces the previous Indian Contract Act, Chapter XI, 1872.
It’s not comprehensive legislation. It is aimed at defining and amending the law of partnership. A partnership arises from a contract and thus the partnership agreement is not only governed by the provisions of The Indian Partnership Act, 1932 in that context, but also by general contract law in cases where no specific provision is made under The Indian Partnership Act, 1932. The Indian Partnership Act, 1932 expressly provides that unrepealed provisions of the Indian Contract Act, 1872, remain in force except in cases where it is inconsistent with express provisions under this Act. The provisions of the Indian Contract Act also apply for a partnership contract, hence the provisions on offer and acceptance, consideration, free agreement, legality, etc. On the other hand, the minor’s position is governed by the provisions of The Indian Partnership Act, 1932, a special provision is contained in Section 30 of the Indian Partnership Act, 1932.
What is the scope of The Indian Partnership Act, 1932?
The scope of a partnership is primarily a matter of partners’ intentions. The application of the powers it chooses to exercise at any time is not restricted except prohibition on illegal, immoral or fraudulent behavior that applies equally to individuals.
If consent is given by the constituent company’s partners, a partner may itself be a member of another company.
If the contract appears to be authorized or ratified by all partners, there usually is no further question as to its validity.
The cases where the partnership contract validity issue arises is where one partner made the contract without specific authority from his co-partners. Their implicit scope of partnerships may be divided into non-trading and commercial classes. Partners of either type can exercise certain powers in partnership. A partner can thus retain a lawyer to safeguard the interests of the company.
What are the essential elements of a partnership?
The essential elements of a partnership are the features that must be present to validate a partnership:
Association of two or more persons
To form a partnership, there must be at least two people. All partners must be contractually competent. Therefore, the company is said to be dissolved if the number of partners in a company is reduced to one.
There are no limitations on the maximum number of companies in The Indian Partnership Act, 1932. Nevertheless, the Indian Companies Act 2013 establishes a limit on the number of partners in a company as follows:
For banking business, partners must be less than equal to 10.
For any other enterprise, partners must be less than equal to 20.
The partnership becomes illegal if the number of partners exceeds the limit.
Agreement among the Partners
Section 5 of The Indian Partnership Act, 1932 states that “The partnership does not arise from the status of the law or the operation of the law but is the result of the agreement”.
The partnership is established by an agreement between two or several persons, i.e. a partnership agreement. An agreement may be either express (oral or written) or implied. Therefore, a partnership does not exist by status but by agreement. Rights and Duties of partners are defined as per agreement.
Existence of Business Activity
The business has to be ongoing and legally binding. The partnership’s main motto is to operate and make profits. Partnerships are therefore not considered for people who work together for social or charitable work.
Sharing of Profits
The main goal of a company is to earn a profit. These profits are shared in a pre-decided ratio among the partners.
If a person is not entitled to share income, he cannot be called a partner. But a partner is not liable according to an agreement to share the losses.
Mutual Agency
Relations with a mutual agency means that all or any partner must conduct a company’s business. A partner is an agent of the other partner and can thus bind another partner through his act. A partner is also principally responsible for the actions of the other partners of the company.
What are the different types of partnership?
Partnership at Will
If there is no clause to establish a partnership at the expiry of such a partnership, it is referred to as a partnership at will. In accordance with Section 7 of The Indian Partnership Act, 1932, two conditions have to be met for a partnership to be a partnership at will and they are:
There is no agreement on a fixed period for the existence of a partnership.
No provision is made for establishing a partnership.
If a partnership has been established and continues to operate beyond the fixed period, the partnership will become a partnership at will after the end of that term.
Particular Partnership
A partnership can be formed for ongoing business or for a particular purpose. If the partnership is only formed to carry out one company or complete one undertaking, it is known as a particular partnership.
The partnership will be dissolved after the completion of the said venture or activity. The partners may, however, come to an agreement to continue the said partnership. But in the absence of this, when the task is complete, the partnership ends.
Partnership for a Fixed Term
Now, during the establishment of a partnership, the partners may agree on the duration of this arrangement. This would mean that the partnership was established for a fixed period of time.
Therefore, such a partnership will not be called a partnership at will, it will be a partnership for a fixed term. The partnership ends after the expiration of such a duration.
However, there may be cases where the partners continue their business even after the expiry of the duration. They continue to share profits and there is a component of a mutual agency. Then in such a case, the partnership will be at will.
General Partnership
When the purpose of forming the partnership is to carry out the business in general, it is said to be a general partnership.
Unlike a particular partnership, in a general partnership, the scope of the business to be carried out is not defined, so all the partners are accountable for all the actions of the partnership.
How to test the existence of a partnership?
All the elements mentioned above must be present in a partnership. Although profit sharing is strong evidence of the existence of a partnership, the true test is the element of the agency. For this reason, a creditor who advances money on the understanding that he would have a share in business profits instead of interest is not a partner. Similarly, an employee receiving a share of profits as a part of his remuneration, or the seller of the business goodwill receiving a portion of the profits, is not a partner. The element of the partnership, namely the agency, is absent in all these cases. A creditor or an employee or the seller of the goodwill cannot bind the firm by their actions, they can be called partners. Thus, in the absence of a definite partnership agreement, in order to determine the existence of a partnership, the Court must take into account all relevant circumstances, such as the conduct of the parties; manner of doing business; who controls the property; manner of holding accounts; manner in which profits are distributed; evidence of employees and correspondence.
To sum up, for determining the existence of a partnership, the following must be considered:
There must be an agreement- oral or written
Having formulated the provisions of Section 4, the Supreme Court observed that a partnership agreement is a basis for a partnership and also refers to the other ingredients defining the partnership establishing the agreed undertaking, the person actually engaged in the business, the shares in which the profit is shared and several other considerations. A partnership agreement, therefore, identifies the firm and a separate and distinct partnership may be created in each partnership agreement. That is not to say that a firm is a corporate entity or in that sense enjoys a legal personality. However, each partnership is a separate relationship. The partners can be different, but the nature of the enterprise can be the same, the enterprise can be different and yet the partners can be the same. It may be intended to form two separate partnerships and therefore two separate companies or simply to extend a partnership originally established for the purpose of carrying on one enterprise to another. The partners’ intention must be decided in accordance with the terms and circumstances of the agreement, including evidence that the company’s management, finance, and other incidents have been interlaced or interlocked.
Partnership Agreement does not need to be expressed, but it can be inferred from the parties’ conduct. The firm rule is that once the parties to the partnership are clearly described in the instrument, there is no scope for further investigation to be carried out by some process or casuistry if any of the parties have an obligation to others to introduce into the partnership arena those others to whom any of the parties may be legally accountable and to treat them as part of the partnership. If the parties to an agreement have not agreed on the start date of the partnership, it can not be said that they have become partners.
The agreement must be to share the profits;
The profits must come from the undertaking, and
The undertaking must be carried on by all or any of them acting for all
Partnership not created by status
The partnership is based on a contract and not on status: in particular, members of an undivided Hindu family carrying on family business, or a Buddhist Burmese husband and wife carrying on business as such, are not partners.
Conclusion
All members’ joint efforts result in the successful completion of tasks and that task or job can be easily done. Work division leads to increased work efficiency among different partners.
If some work is done through the consent of all members and some profits are earned, then they are shared between the various partners. And likewise, if there is some loss then it is borne by all members and not just one has to take responsibility or compensate for it. The partnership is, therefore, a good way to do business in my view than a single person owned company.
A partnership is one of the oldest business forms. While limited liability companies have replaced partnership enterprises in complex enterprises, professional and small companies continue to prefer partnerships in India and overseas.
The Indian Partnership Act, 1932 provides for a common type of company that is the most prevalent in India, but over time, due to its inherent disadvantages, a common form of partnership has lost its charm, the main aspect of which, is the unlimited liability for business debts and the legal consequences for all partners regardless of their holdings, since the company is not a legal entity.
General partners are also jointly and severally liable for tortious acts of co-partners. Each partner has the exposure of appropriating and liquidating their personal assets to meet partnership dues. These are statutory positions that can not be altered by contract inter-se, although unscrupulous partners sometimes resort to subterfuges to avoid personal liability.
This Article is written by Khushi Agrawal, 1st-year student, Symbiosis Law School, Noida. She has discussed the concepts of capital punishment and Article 21 of the Indian Constitution in detail.
What is capital punishment?
Capital Punishment is also known as a death penalty, execution of an offender sentenced to death after conviction of a criminal offence by a court of law. Indian Criminal justice system is one of the important parts of capital punishment.
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Evolution of Capital Punishment in India
India retained the 1861 Penal Code at independence in 1947, which provided for the death penalty for murder. The idea of abolishing the death penalty expressed by several members of the Constituent Assembly during the drafting of the Indian Constitution between 1947 and 1949, but no such provision was incorporated in the Constitution. In the next two decades, to abolish the death penalty, private members bills were introduced in both Lok Sabha and Rajya Sabha, but none of them were adopted. It was estimated that between 1950 and 1980, there were 3000 to 4000 executions. It is more difficult to measure the number of people sentenced to death and executed between 1980 and the mid-1990s. It is estimated that two or three people were hanged annually. In the 1980 Bachan Singh judgment, the Supreme Court ruled that the death penalty should only be used in the “rarest of rare” cases, but it is not clear what defines the rarest of the rare.
Position in India
India opposed a UN resolution calling for a moratorium on the death penalty because it goes against the Indian statutory legislation as well as against each country’s sovereign right to establish its own legal system.
In India, it is awarded for the most serious of crimes. It is awarded for heinousness and grievous crimes. Article 21 says that no person shall be deprived of ‘right to life’ which is promised to every citizen in India. In India, various offences such as criminal conspiracy, murder, war against the government, abetment of mutiny, dacoity with murder, and anti-terrorism are punishable with death sentences under Indian Penal Code (IPC). The president has the power to grant mercy in a case of death penalty. Bachan Singh vs State of Punjab,[1] the Court held that capital punishment will only be given in rarest of rare cases.
Only the president has the power to confer mercy in cases related to death sentences. Once a convict has been sentenced to death in a case by the Sessions Court, it must be confirmed by the High Court. If the appeal to the Supreme Court made by the convict fails then he may submit a ‘mercy petition’ to the President of India. Detailed instructions on the procedure are to be followed by States to deal with petitions for mercy from or on behalf of death-sentenced convicts. Appeals to the Supreme Court and requests for special leave to appeal to that court by such convicts shall be set out by the Ministry of Home Affairs. Under Article 72 of the Constitution of India, the President has the power to grant pardon, reprieves, respites or remissions of punishment or to suspend, remit or reduce the sentence of any person who has been convicted of an offence.
What are the execution methods followed in India?
There are two methods of execution in India and they are:
Hanging
All the death penalties in India are carried out by hanging. After independence, Godse was the first person to be executed in India by the death penalty in the case of Mahatma Gandhi. India’s Supreme Court suggested the death penalty should only be imposed on the rarest of rare cases in India.
Shooting
Under the 1950 Army Act, both hanging and shooting are listed in the military court-martial system as official methods of execution.
What are the Death Penalty crimes?
The crimes and offences which are punishable by death are:
Aggravated murder
It is punishable by death in accordance with Section 302 of the Indian Penal Code, 1860. In Bachan Singh v. State of Punjab,[2] the Court of India held that the death penalty is constitutional only when applied as an exceptional penalty in “the rarest of the rare” cases.
Other offences resulting in death
In the Indian Penal Code, the death penalty is given to a person who commits murder during an armed robbery. The abduction of the victim for the money is punishable with the death penalty if the victim is killed. Organized crime involvement, if it leads to death, is punishable by death. Committing or helping to commit Sati to another person is also punishable by the death penalty.
Terrorism-related offences not resulting in death
Muhammad Afzal was executed by hanging on 9th February 2013. He was executed of the December 2001 attack on India’s parliament in which nine people got killed by five gunmen armed with guns and explosives. Mohammad Ajmal Amir Qasab, the only surviving shooter in 2008, was hanged on 21 November 2012 for various crimes, including waging war on India, murder and terrorist acts.
The use of any special category of explosive to cause an explosion that could endanger life or cause serious damage to property is punishable by the death penalty.
Rape not resulting in death
A person who inflicts injury in a sexual assault which results in death or is left in a “persistent vegetative state” may be punished with death under the Criminal Law Act, 2013.
Gang rapes are punishable with death penalties. These changes were imposed after medical student Jyoti Singh Pandey’s 2012 gang rape and death in New Delhi.
According to the 2018 Criminal Law Ordinance, a person who is liable for raping a girl who is below 12 years of age may be sentenced to death or sent to prison for 20 years along with fine. The 2018 amendment also specifies the death penalty or life imprisonment for a girl’s gang rape under the age of 12. These changes to criminal law followed an eight-year-old girl’s rape and murder, Asifa Bano, who triggered a lot of political unrest in Jammu and Kashmir State and across the country.
Kidnapping not resulting in death
According to Section 364A of Indian Penal Code, 1860, kidnapping not resulting in death is an offence punishable by death. If any person detaining anybody and threatens to kill him or harm him during which the kidnapper’s act actually resulted in the death of the victim, will be liable under this section.
Drug trafficking not resulting in death
If a person convicted of a commission or attempt to commit, abet, or criminal conspiracy to commit any of a range of drug trafficking offences, or financing of certain types and amounts of narcotic and psychotropic substances, he or she can be sentenced to death.
Treason
The death penalty is given to any person who is waging or trying to wage war against the government and helping Navy, Army, or Air Force officers, soldiers, or members to commit a mutiny.
Military offences not resulting in death
Abetment of assault, mutiny or attempting to seduce airman, soldier, the sailor from his duty and various other offences are punishable by death if committed by a member of the Army or Navy or Air Force.
Other offences not resulting in death
If a person is a party to criminal conspiracy to commit a capital offence is punishable by death.
Attempts to kill those sentenced to life imprisonment are punishable by death if the victim is harmed by the attempt.
If a person provides false evidence with the knowledge that it can lead to the conviction of a person belonging to scheduled caste or tribe for committing a capital offence on the basis of such evidence, will be punished with the death penalty if it results in the conviction and execution of an innocent person.
Which category of offenders are excluded from Capital Punishment?
Minor
According to the law in India, a minor who is under the age of 18 at the time of committing a crime is not executed.
Pregnant Women
Clemency must be granted to a pregnant woman sentenced to death according to a 2009 amendment.
Intellectually Disabled
According to the Indian Penal Code, a person while committing a crime who was mentally ill or is not able to understand the nature of the act or the act is wrong, then that person can be held liable under the law and can be punished with the death penalty.
Constitutional Law
Article 21 of the Constitution guarantees the right to life and personal freedom to all, including the right to live with human dignity. The state may take away or abridge even the right to live in the name of law and public order. But this procedure must be “due process” as held in India’s Maneka Gandhi v. Union.[3] The procedure that takes away a human being’s sacrosanct life must be just, fair and reasonable. Our constitutional principle can be stated as follows
Only in rarest of rare cases, the death penalty should be used.
Only on special grounds, the death penalty can be sentenced and should be treated as exceptional punishment.
The accused shall have the right to hear.
In the light of individual circumstances, the sentence should be individualized.
The death penalty shall be confirmed by the High Court. Under Article 136 of the Constitution and under Section 379 of the Cr.P.C., there is a right to appeal to the Supreme Court.
The accused may pray for forgiveness, commutation, etc. of sentence under Sections 433 and 434 of the Cr.P.C. and to the President or the Governors under Articles 72and 161. Articles 72 and 161 contain, apart from the judicial power, discretionary power for the President and governor to interfere with the merits of the matter; however, there is a limited authority for judicial authorities to review it and it must ensure that the President or the governor has all relevant documents and material before them.
However, the essence of the governor’s power should not rest on race, religion, caste or political affiliations, but on a rule of law and rational issues.
In accordance with Articles 21 and 22 of the Constitution, the accused has the right to a prompt and fair trial.
The accused is not entitled to be tortured under Article 21 and 22.
Under Articles 21 and 19 of the Constitution, the accused has freedom of speech and expression under custody.
The accused is entitled to be presented by duly qualified and appointed lawyers.
Case Laws
In Jagmohan v. State of U.P,[4] the Supreme Court held that Articles 14, 19 and 21 did not violate the death penalty. The judge was said to make the choice between the death penalty and life imprisonment based on circumstances, facts, and the nature of the crime recorded during the trial. The decision to award the death penalty was therefore made in accordance with the procedure laid down by law as required by Article 21.
But, in Rajendra Prasad v. State of U.P,[5] the judge held that unless it was shown that the criminal was dangerous to society, capital punishment would not be justified. The learned judge pleads that the death penalty is abolished and said that it should be retained only for “white collar crimes”. It was also held that the death penalty for the murder offence awarded pursuant to I.P.C. Section 302 did not violate the constitution’s basic feature.
But, in Bachan Singh, v. State of Punjab,[6]explained that, in accordance with an equitable, fair, and reasonable procedure laid down by law, the constitutional bench of the Supreme Court has recognized Article 21 the State’s right to deprive a person of his life. In addition, there was no violation of the basic character of the Constitution by the death penalty for the murder offence granted under Section 302 I.P.C.
Conclusion
It is a controversial topic which is related to social and moral aspect. The Court expanded the range of “alternative options” to be exhausted before the death sentence was chosen and the Supreme Court ruled in favour of the conviction in the case of Bachan Singh. By retaining the death penalty, we may execute someone to death who turns out to be innocent.
This article is written by Heba Ali, a BBA LLB Student at Symbiosis Law School, Noida. This article talks about Armed Forces Special Powers Act, 1958 in detail, specifically the violence carried on in different parts of the country where the act has been enforced in the past and the urgent need to repeal AFSPA.
Introduction
Armed Forces Special Powers Act (AFSPA), 1958 has been a controversial act over the years and has been criticized by different sections of the society since its enactment. This act gives unfettered powers to people deployed in armies to shoot and kill any person if they have any doubt that the person is a threat in any manner. This law has been and still continues to be misused by the armed forces which is a sheer violation of Article 21. The law enacted even gives immunity or protection to the armed personnel against any type of prosecution. AFSPA has been a topic of debate since its inception and it should be struck down because it is misused by the people to a great extent.
Armed Forces Special Powers Act, 1958 had its roots in the Lord Linlithgow Ordinance 1942 which was enacted to curtail the Quit India movement and Nagaland was one of the first former states to demand the withdrawal of itself from India. After this, the government enforced AFSPA which is a law that was used back then by the Britishers to curb the movement of struggle for freedom because of which many Indians were killed, imprisoned and many families were destroyed. AFSPA is same as other colonial laws which were enacted and enforced onto the people before independence. Now, it is even more arbitrary in nature than it was before because earlier the power to shoot was given to only the officers who were of the rank of captain in 1942 before independence. But, now it is extended to even the non-commissioned officers and thus making it arbitrary in nature.
AFSPA gives power to the people who are in the army to shoot a person if they believe or have any thought that the concerned person may cause a threat. The law even gives immunity to the armed personnel before getting prosecuted along with other types of immunity. AFSPA has been enforced in different parts of India after it has come into force in different states of India like in almost all the Northeastern States, Punjab and also many times in the state of Jammu & Kashmir. AFSPA is often referred to as a bad law since the time it was enacted because of its arbitrary nature. People in the past as well as now have many times protested against this law especially because of the problems and incidents of human rights violation in the states like Kashmir, Nagaland, Manipur and other northeastern states. It has been over 60 years since this act came into being in India but the conflicts related to the law have not changed and have remained the same till now. There have been incidents like in Kashmir where a large number of civilians were injured and many were killed and blinded for their whole life because of the use of pellet guns in the year 2016 and because of this people have been agitated of the government at the Centre than ever before because of their inability to take strict actions against such offences which outrageous in their nature.
If one go through the data and situation prevailing then will notice that there are people as young as between the age group of 12-17 years who have been booked under the Public Safety Act, 1978 which is a state law that gives powers to the police to detain any person for months without taking his case to trial. Like, there has been a number of cases of fake encounters in Manipur as it was claimed in the case of Extra-Judicial Execution Victim Families Association and Anr. vs Union of India. Rapes and other incidents of sexual harassment have become common and even though such incidents are happening then also the voices of people in the region of Kashmir and Northeast have not been heard and taken into account by the concerned people.
The Supreme Court in its decision in the case of Naga People’s Movement of Human Rights v Union of India upheld the constitutional validity of AFSPA but laid down certain guidelines in the form of do’s and don’ts. The do’s and don’ts are a range of duties and responsibilities such as a person should not be detained for more period than what is required and then he should be handed over to the nearest police station and no force should be used on that person who is arrested except when he is trying to escape. No persons are allowed to use third-degree torture on the person arrested or against the person who is under suspicion that will cause pain to him in order to get information or make the person confess and only the armed personnel are allowed to arrest the person.
There have been many human rights activists who have protested against such acts like Irom Sharmila where she followed the example of Mahatma Gandhi. She is a 39-year old activist who was on hunger strike from November 2000. She is protesting against this most controversial law in India which is AFSPA which was enforced in Manipur in the late 1980s, after the incident when several groups in Manipur began a movement to free themselves from the Indian subcontinent. There has been conflict of interest with people residing in Manipur because of the political propaganda, which had eventually impaired the former princely state of Manipur when it was merged with India in the year 1949. Many people see the union of India be flawed and would prefer independence from it. There were several other ethnic groups which were fighting for independence from India like in the states of Nagaland, Assam, Tripura and some parts of Kashmir which are under the control of India. AFSPA is considered as bad law and criticized so much because it indemnifies the Indian soldiers who are deployed to fight battles.
Need For A Transformative Law
Now, its high time to change this law which does flagrant misuse of powers which in turn violates human rights. Also, the jurisprudence has also changed on the fundamental rights given to us by the constitution itself. The rights guaranteed under Article 21 has been extended and now it includes multiple rights in it like Right to privacy as held in the case of KS Puttaswamy and Anr. v Union of India. The Supreme Court in India in various cases over the years has made it important for human rights protection in India as well as under International law.
The important thing to note is that the reports do not include the atrocities and violence committed by the militants. In the case of Extra-Judicial Execution Victim Families Association v. Union of India, where the court had laid down the guidelines regarding the enquiry to be conducted for the fake encounters in the state of Manipur. The Supreme Court held in its decision that the decisions taken by the Manipur Police in the exercise of force on to the people are not permissible even in the areas which were declared to be disturbed region and under Armed Forces Security Act in the state of Manipur. Also, directions were given to conduct an enquiry regarding the encounters resulting in deaths of persons which were carried on by the police of Manipur and by the armed personnel deployed in Manipur.
The judgement given by the Supreme Court was largely celebrated by the families of the victims as well as by the human rights activists. This decision was given despite the fact of Section 6, AFSPA, 1958 the courts gave this decision because they had to enquire that whether there was an abuse of power by the people in the armed forces or not and whether the encounters done were genuine or fake. This is not the first instance where the courts have taken such a decision because it was taken earlier by the Supreme Court in the Naga People’s Movement Of Human vs Union Of India. This decision taken was necessary to check the facts that the government in power had continued to deny any such allegation made on the armed forces relating to the encounters done in the state of Manipur and flagrant violation of human rights.
Apart from conducting the enquiries related to the death due to misuse of power by the police officials, the court also stressed on the issue of re-affirming whether we need this act by going for the judicial review of AFSPA. Reports have been submitted to the Supreme Court on fake encounters committed in the state of Manipur since 1979 which includes nearly 1,528 cases. If one goes through the reports on the number of innocent people killed then will notice that nowhere people in Manipur are actually safe. Especially the data shows that most young men are killed because they are suspected as militants. The sad part is that these reports were submitted by the government only to the judges and a copy of the report was not given to the petitioners who were an important part of these cases. So they were unable to follow their case and know the status of the case. In spite of all this order was passed that the strength of the team investigating the case should be increased. It was also directed that the National Human Rights Commission (NHRC) should be involved as a part of the team doing the investigation.
In the Naga People’s Case, the courts looked at different issues specifically on the point of arbitrariness and the unconstitutional powers as declared by the courts under AFSPA. Many contentions were raised against the power to shoot under AFSPA, the immunity given under AFSPA and the powers granted by the Centre for prosecuting the armed personnel. But even after so many criticisms surrounding this act, there were no arguments related to the rights of people in such areas except that it should be less stringent so that people are not harassed. AFSPA needs to be looked from the point of view of constitutional morality also taking into account other approaches available that the Supreme Court has made important in a democracy. This eventually means that under AFSPA the governor of the state and the central government has the power to declare any part of the state or any small part of the state as a disturbed area. AFSPA was held constitutionally valid in this case by the Supreme Court of India. Parliament in all its way is competent to enact the act in the view of Entry 1 of State List and Article 248 which is read with Entry 97 and Entries 2 and 2-A of Union List and by this Parliament had the power to enact this in the year 1958.
In another famous case of Indrajit Barua v The State Of Assam And Anr, where the court found and declared that it is the duty of the state to assure the protection its citizens and their rights guaranteed under Article 21 which is also given to people where the AFSPA is enforced. The people in those area which is assigned as ‘disturbed areas’ are denied any type of protection of their lives and liberties including protection of the Criminal Procedure Code and even the right to approach the courts and seek redressal which in turn has violated Article 14 that is given by the makers of the constitution and is guaranteed to its citizens. By looking at the situation in the Northeastern side of India it could be concluded that people living over there are eventually under army rule.
In other cases like the Shopian Case, two women went missing while they were returning home from the orchards and the next day their dead bodies were found and it was alleged that they were raped and killed by the armed forces who were deployed nearby. Eventually what happened was that the injuries that were on the private parts of the girls that were supposed to be mentioned in the post-mortem reports were cleared off, so that the armed forces could not be blamed and questioned or brought into the matter, even no FIR was registered in this case where such horrifying incident took place. Then in case of Luithukla v. Rishang Keishing where a writ of habeas corpus was filed and the court ordered that the army should follow the rule of Code of Criminal Procedure but there was enforcement and nobody paid attention to the sayings of the Guwahati High Court. In return, the army officers had accused the judges of the High Court for weakening the powers of the military forces deployed in the northeastern part of the country.
Campaigns to repeal AFSPA
There have been campaigns organized by people and human rights activists to repeal this abusive act which is known as AFSPA. Despite the campaigns organized by various international human rights activists as well as domestic ones, the Indian government is not willing to repeal the act. There have been committees in the past which were set-up in 2004 to repeal the act like the Justice Jeevan Reddy Committee which was set-up and Dr. Manmohan Singh formally agreed to review the AFSPA after the killing of Thangjam Manorama Devi in the year 2004. It was a committee set-up with Justice Jeevan Reddy, a retired Supreme Court judge as its head to review Armed Forces Special Powers Act, 1958. It was set to see whether it should be replaced with a more humane act while taking into account the duty of government to protect the basic human rights guaranteed of its citizens.
The reports were submitted by the committee to the Home Ministry on 6th June, 2005. But, an accident occurred when the report which was not made available to the public was leaked and was available to the general public on the Internet. The reports showed that they had recommended to repeal the act and also made a conclusion that it was a bad act. And now when it has been enforced in so many parts of the country it has turned into a tool of discrimination and violence. The committee even recommended that some of the provisions should be transferred to Unlawful Activities (Prevention) Act, 1967 and even asked to set up an independent cell which will be called as ‘grievance cell’ that will do the work to enquire into the complaints filed for violation of basic human rights. It is not only this committee which has recommended to repeal Armed Forces Special Powers Act,1958 but committees like Justice Verma Commission in the year 2013 had also reported that there has been an abuse of powers by the armed forces. Other reports show that the killing of Thangjam Manorama Devi by Assam Rifles in the year 2004 was not disclosed by the government.
AFSPA and International Law
India is often considered as a country around the world that gives significance to the rights and liberties of its citizens. But, what is happening in the states of Manipur, Jammu & Kashmir, Nagaland looks like the law is making a mockery of the human rights which are guaranteed to its citizens. In the recent past, the violence which had occurred in Jammu & Kashmir has made people start to think that we really need AFSPA and now it has turned into a hot topic for a national debate.
The first state where Armed Forces Special Powers Act, 1958 was enforced was the state of Arunachal Pradesh then it went on and was also enforced in the state of Assam, Manipur, Meghalaya, Mizoram, Tripura and Nagaland and later in July 1990 it was enforced in the state of Jammu and Kashmir. It is a type of law that gives excessive power to the armed forces and the people who are suffering because of it consider it a draconian law. Over the years, people have campaigned to repeal the act and even international organizations like Amnesty International have asked the courts in India to look into the matter deeply and conduct investigations regarding rampant misuse of powers by armed forces as well as by other government officials that led to a number of cases where reports show violations of human rights.
Many people even compare the Armed Forces Special Powers Act, 1958 to the Rowlatt Act, where the Britishers gave themselves unbridled powers to imprison any person on the basis of any suspicion of them being involved in any terrorist activity against British India for up to 2 years without giving them a chance for a trial. Another important thing to note is that the Indian Army which is the organization being accused by the people for committing horrifying acts that were being carried on in the state over the years never came in front of the public to express their views and take a stand on this important issue. And data shows that the army is never called into question except in situations where it is beyond their capacity of administration, the police and other officials.
AFSPA and Human Rights Violations
It’s high time that AFSPA should be looked into seriously by the government and repealed because of the incidence of violence that had happened in the past and continues to take place even now. One of the incidences showcasing violence is theOperation Bluebird which was also reported by some of the prominent international organizations which happened in the month of January in 1987 at a place called Oinam in the state of Manipur where almost 30 villages occupied by the nagas were covered for committing violence that included torture, killing people in masses which also added to heinous acts of sexual harassment, theft and other criminal activities which were carried on for many days.
It is also important to note that even the authorities were not allowed to move into the areas where such activities were carried on.AFSPA is inhumane as it had made the lives of people as if they were in curfew-like conditions for their entire lives. This act overall does not abide by the principle of constitutional morality and is arbitrary in nature. The decisions of the government taken in cases that relate to the disturbed areas cannot be questioned in any court of law. And because of this many incidences that relate particularly to these areas where such activities are being carried on is not reported and justice is not given to the victims. So, it will be good for everyone if AFSPA is looked through the same perspective and constitutional morality and non-arbitrariness are taken into consideration with other modern approaches which the Supreme Court considers important for a democracy.
Basically, it would mean that AFSPA needs to be repealed because of the reports submitted by various committees and incidence happened from the early 1990s. This way only the morale of the armed forces will be broken if they are held accountable for actions they had taken under AFSPA. The important thing to take into account is that just amending the act will not solve the problem as there are many gaps which cannot be filled up by amending the act. It is important for the government to know that the rights of the people are to be protected and for that AFSPA needs to be repealed. It is not only that the fundamental rights of the citizens are violated but also it is against the Universal Declaration of Human Rights which India has signed. Also, what has happened in Kashmir has also highlighted the situation prevalent in the state from July in the year 2016 to April 2018. It also raises serious concerns about the activities that Pakistan carries on in the parts of Kashmir.
Conclusion
It is now very important to note that time has come and there is an urgent need to take into account the human rights violation happened in the past and is still being carried because of conflict of interest. And any decisions taken to resolve the situation prevalent in Kashmir should lead to the end of violence in Kashmir especially keeping in view the political conflict. Office of the United Nation Human Commissioner(OHCHR) reports also shows the increase in violence like shooting that has led to the casualties that eventually injure the civilians and has displaced many people that lived across theLine of Control. The experts on human rights including the experts from OHCHR say that the restrictions imposed on having access to Kashmir imposed by the government of India and government of Pakistan has led to hindrance in the work of the journalist and other organizations that are working for the good. And removing the restrictions imposed by the government in parts of Kashmir would lead to development in Kashmir and will give more transparency which would eventually lead to the growth.
This article is written by Richa Goel of Banasthali Vidyapith. In this article, she has discussed the scope, nature of Partnership Act, 1932 and various provision related to admission, death, the retirement of a partner.
An Act was enacted in 1932 and it came into force on the 1st day of October 1932. The present Act superseded the earlier law, which was contained in Chapter XI of the Indian Contract Act, 1872.
This Act is not complete and has the intention to define and amend laws relating to Partnership.
Introduction
Partnership results from a contract and is governed by the Partnership Act 1932. The partnership is also governed by the general provision of the Indian Contract Act on such matters where the Partnership Act is silent. It is expressly mentioned that the provision of India Contract Act which is not repealed will be applicable on Partnership until and unless such provision is in contrary to any provision of Partnership Act, 1932. The rules of contract regarding the capacity to contract, offer, acceptance etc will also be applicable to the partnership. But the rules regarding the status of minor will be governed by the Partnership Act, 1932 since Section 30 of the Act talks about the position of the minor.
click the above picture
Nature of business
It is a business organization where two or more persons agreed to join together to carry out the business for the purpose of earning the profits. It is an extension of a sole proprietorship. It is better than sole proprietorship because in sole proprietorship the business is carried out by the individual with limited capital and limited skill. Due to the limited resources of a single individual carrying a sole proprietorship, a larger business requiring more resources and investment than available to the sole proprietor cannot be thought of such business. On the other hand in partnership, a number of partners join together with their capital to form an agreement and carry out a business jointly.
Meaning
According to Section 4 of the Partnership Act,1932
“Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any one of them acting for all”.
Essential requirements of a partnership
There must exist an agreement between the partners.
The motive is to earn the profit and share between the partners.
The agreement must be to carry out the business jointly or by any of them acting on the behalf of all.
Examples:
A and B buy 100 tons of oil which they agree to sell for their joint account. This forms a partnership and A and B are considered as partners.
A and B buy 100 tons of oil and agreed to share it among them. It does not form a partnership as they had no intention to carry out business.
Number of members
Any two or more persons may form a partnership. There is no limit imposed on the minimum and the maximum number of partners under the Partnership Act,1932. According to Companies Act 2013, the maximum number of 100 must not exceed in case of partnership and minimum is 2 partners.
If in any case, it exceeds the maximum limit then it will amount to the illegal association under Section 464 of Companies Act,2013. According to Section 11 of Companies Act the maximum number of partner in case of:
Banking purpose-10 persons
Other purposes- 20 persons
Agreement
The partnership is an agreement in which two or more person has decided to carry out business and share the profit and losses equally. To create a legal relationship it is necessary to form a partnership agreement.
The partnership agreement becomes the foundation or the basis on which it is based. It can be either written or oral. The written agreement is known as a partnership deed. Partnership deed mainly consists of the following details:
Name and address of its firm and business
Name and address of its partner
Capital contributed by each partner
Profit and loss sharing ratio
Rate of interest on capital, loan, drawings etc
Rights, duties and obligation of partners
Settlement of accounts on the dissolution of the firm
Salaries, commission payable to partners
Rules to be followed in case of admission, retirement and death of a partner
The partnership must be created for the purpose of carrying the business which is legal in nature. Co-ownership of property does not amount to the partnership.
The business is to be carried by all of them or by any one of them on behalf of all. It gives two assumptions
Each partner is entitled to carry out the business. The mutual agency exists between the partners. Each partner is a principal as well as an agent for the other partners.he is bound by the acts of other partners as well as can bind others by his own act.
Sharing of profit
The agreement is to share profit and losses among the partners. The sharing of profit and losses can be according to the ratio of the capital contributed or equally.
It helps to distribute the burden among the partners in the case when the partnership suffers losses.
Liability of partnership
All the partners are jointly liable for paying the debts of the firm. The liability is unlimited which means that the partner’s private assets can be disposed of for the purpose of paying the debts of the firm.
Kinds of partnership
The various types of partnership are based on two different criteria.
With regard to the duration of the term of partnership:
Partnership at will
when no fixed period is prescribed for the expiration of partnership then it is a partnership at will. According to Section 7 two conditions need to be fulfilled:
No agreement about the determination of the fixed period of partnership
No clause with respect to the determination of partnership.
Partnership for a fixed period
When the partners fixed the duration of the partnership firm then after the expiration of the fixed period the partnership comes to an end. When the partners decided to continue with the partnership even after the expiry of the fixed period then it becomes a partnership at will.
On the basis of the extent of the business carried by a partnership
When the partnership is created for completing any project or undertaking. When such an undertaking or project have been completed then partnership comes to an end. The partners have a choice to continue with the firm.
General Partnership
when the partnership is created for the purpose of carrying out the business. There is no particular task that has to be completed. The task is general in nature.
The partnership arises from the contract but not from the status. The intention of partners is a question of the partnership. the partners may exercise any of its power at time but must not exercise in the pursuance of illegal, fraudulent or misconduct.
If any of the partners have made the contract without the consent of all other partners then the question as to the validity of such contract arises. If all the partners have accepted or ratified the contract then no question as to the validity of such contract arise.
With the consent of all the partners, the partnership can become a member of another firm.
Partners
The member of a partnership is called partners.it is not mandatory that all the partners are the same or all the partners participate in the conduct of the business or share the profit or losses equally. The partners are classified depending on the nature of work, the extent of liability, etc. There are basically six types of partner:
Active/managing partner: The partner who takes participation in the conduct of the business daily. This partner is also called an ostensible partner.
Sleeping/Dormant: He does not participate in the conduct of the business but he is bound by the conduct of all the partners.
Nominal partner: He is a partner to the firm only by his name. In reality, he has no significant or real interest in the firm.
Partner in profit only: The partner who agrees to share the profit but does not suffer losses. He is not liable for any liabilities in case of dealing with the third party.
Minor partner: A minor cannot be a partner according to the Indian Contract Act, but he can be admitted to get the benefit of all the partners gives the consent. His will share the profit equally but his liability will be limited in case of loss of the firm.
Partner by estoppel: it means when the person is not a partner but he has represented himself by conduct, or words to another person to be the partner then he cannot deny afterwards. Even though he is not a partner but he becomes the partner by holding out or by estoppel.
Relation of partner with one another
All the partners have a right to create their own terms and condition with regard to the affairs of the business in the partnership deed. The Indian Partnership Act has prescribed the provision to govern the relation of partners and this provision is applicable in case when there is no deed. The various rights of the partners are explained below:
Right to determine the relationship by contract (Section 11)
The partnership deed determines the general administration of the partnership like what will be the profit-sharing ratio, who will do what work etc. The partnership contains the rights and duties of the partners.
Such a deed can be made either expressly or by necessary implication. For example, if one partner looks into sales daily and other partners do not object to it, his conduct will be presumed as the right of all the partners in the absence of written agreement. So it can be concluded that all partners create a right for their own.
All the agreements which restrain the person from carrying any lawful profession, trade or business are void.
But Section 11of the Partnership Act states that the partners can restrain each other from carrying a business other than the firm. but such restraint must contain in the partnership deed.
Rights of the Partners
Right to participate in the conduct of business (Section 12(a)): each partner has a right to participate in the conduct of the business. A partner right to participate in business is curtailed in a case where some of them only participate in the business affairs of the firm. this right can be curtailed only when the partnership deed states so.
Rights to access and inspect books and accounts (Section 12(d)): This right is also given to the active and dormant partner. Each partner has a right to access and inspect the book of account of the firm. In case of death of a partner, his legal heir can inspect the copies of accounts.
Right to be indemnified: The partners have a right to be indemnified for the decision taken in the course of the business. But such a decision is to be taken in the case of urgency and should be of such nature that the ordinarily prudent person would take.
Rights to expresshis opinion (Section 12(c)): Each partner has a right to express his opinion with regard to the business affairs. They also have the right to participate in the decision-making process.
Rights to get interested on capital or advances: Generally, partners are not entitled to get any interest on the capital that they invest .but when they agree to give interest, then such interest would be paid from the capital. They are also entitled to 6%interest on the advances made towards the business of the firm.
Right to share profit and loss: The partners share the profit and losses equally in the absence of any deed. But when there is a partnership deed prescribing the ratio of profit and losses it will be shared in accordance with the partnership deed.
Relations of partners to third parties
Section 18 to 22 of the Act talks about the relation of partners third parties
Section 18 prescribes that the partners are an agent of the firm for the purpose of conducting the affairs of the business. The partners act as the principal and agent as well. when he performs the act in his own interest he is the principal and when he does in the interest of another partner then he is an agent. He is not an agent for the dealings or the transactions between the partners themselves.
Section 19 states that any act which is performed by the partners in the usual course of its business binds the firm itself. The authority to bind the firm is implied authority
Section 20 states that partners can make a contract to restrict or expand the implied authority of a partner.
Section 21 states that if any act is done by any partners in case of an emergency which a prudent man would do, then such acts need to bind the firm.
Section 22 specifies that if any act is done by any partner then it must be done in the name of the firm or in such manner which binds the firm.
Duties of partners
The rights and duties are correlated with each other. When the rights are given to the partners then there must be some which the partners should perform..the various duties of partners are as follows:
Duty to act diligently (Section 12(b)): It is the duty of the partners to act with due care and diligence because his actions will affect all other partners. If his wilful act causes a loss or injury to other partners he is entitled to pay compensation to the affected partners.
Duty to indemnify fraud (Section 10): whenever any fraud is committed by partners then every partner is liable to indemnify the firm for losses because the firm is liable for the wrongful acts of the partners. If the fraud causes the losses to other partners he is entitled to indemnify for the loss caused.
Duty to use the firm property exclusively for the purpose of business (Section 15): The partners can use the firm property for the purpose of the business but not for its personal purpose. The partner must use the property in a lawful manner. they must not earn a person gains from such property.
Duty to hand over personal gains (Section 16): All the partners should act towards achieving the common goal. they must not engage in other profession or engage in any competitive business venture. If they earn any personal gains from the conduct of business then they should hand over to all the partners.
General duties (Section 9): It is the duty of all partners to make all the efforts to achieve a common goal, to render a true account and provides all the information affecting a firm to partners, or his representative
When do Rights and Duties change?
The existing relationship between the partners come to an end when there is a change in the constitution of the firms. Such changes in the constitution of the firm may occur due to the following reasons (Section 17)
Expiration of term of the firm.
Carrying out the additional business other than agreed upon.
Changes in the composition of members due to admission, retirement or the death of a partner.
The duties and rights of partners remain the same until there is any change in agreement but such right and duties may vary or modified by creating a fresh agreement.
Status of a minor
Section 30 states the legal provision related to the minor according to Section 18 of the Indian Contract act 1872, no person below the age of 18 years can enter into the contract which implies that no minor can enter into a contract. But Section 30 states that the minor cannot be a partner in a partnership firm but he can be admitted to benefit from the partnership firm. The minor will be liable to get only the benefits from the partnership but is not liable for any losses or liability. The minor can be admitted to the partnership only with the consent of all the partners.
There are various rights that are granted to the minor.
Various rights are as follows:
Right to inspect the books of account
Rights to share the profits from the firm
Rights to sue any partner or all for his share of benefit or profit
He has a limited liability which means his personal assets may not be disposed of to pay the firm debts
A minor has a right to become a partner on attaining the age of 18 years.
Liabilities of a minor
A minor has Limited liability. If minor is declared as insolvent his share will be kept in the possession of official liquidator.
If after attaining the age of 18 years he decided to become the partner then he has to give public notice within 6 months of attaining the majority. If notice not given then minor will become liable for all the acts of others until the notice is given
When a minor partner becomes the major he will be liable for the acts of all partners to the third parties.
If he decided to become a full-time partner then he will be considered as a normal partner and will take part in the conduct of the business.
Liabilities
Liability of partners for the acts of the firm (Section 25): All the partners is jointly and severally liable for the acts of the firms. He is liable only for those acts which are done at the time he is a partner.
Liability of a firm for the wrongful act of partner (Section 26):When any wrongful act or omission is done by any of its partners in the ordinary course of its business or with the consent of others partners then the firm is liable to the same extent as a partner.
Liability of a firm for the misapplications by partner (Section 27): when any partner acting as an agent receives the money from the third party and misapplies it or the firm receives the money and money are misappropriated by any of its partners then the firm is liable to pay for the loss suffered.
How is registration done?
Section 58 explains the procedure of the registration of a partnership firm.
Making an application to Registrar: Any of its partners can send an application along with the prescribed fee and copy of partnership deed o the registrar of the area in which any place of business is proposed to be situated or is situated. Such a statement shall be signed by all of its partners. Such a statement should contain:
Name of the firm
Principal place of business
Any other place where the business is carried on
Duration of partnership firm
Name and address of all partners of a firm
The date on which each partner joined the firm
Verification: Each partner who has signed the statements needs to be verified.
The name of the firm shall not contain any name resembling the name of Crown, Emperor, king, Royal, Emperors’, or any other words implying or expressing the sanction of the government.
Section 59states that when the Registrar is satisfied that the conditions of Section 58 are complied with then he shall record an entry of the statement in a register called the Register of Firms, and shall file the statement.
Non- registration of partnership firm
In India, it is not compulsory to register the partnership and no penalty is being imposed for non-registration but if we talk about English law it is compulsory to register partnership firm and if it is not registered then the penalty is imposed. Non-registration leads to a certain disability in accordance with Section 69 of the Act.
No suit can be initiated in civil court by the firm or other co-partners against the third party
In case of breach of contract by the third party; the suit cannot be brought in any civil suit. The suit must be filed by the one whose name is registered as a partner in a register of the firm.
No partners can claim a relief of set-off.
Any action which is brought out by the third party against the firm having a value of Rs 100 cannot be set off by the firm or any of its partners.
An aggrieved person cannot sue against firms or other partners
Generally, no action can be brought against the firm or the partners but there is an exception to it. In a case when the firm is dissolved it can bring a suit for the realization of his share in the firm’s property.
Non-registrations do not affect the following rights
A third party can bring a suit against the firm
Right of the partners or firm to claim a relief of set off the claim for the value which does not exceed Rs 100
Power of official liquidator, official assignees to release the property of insolvent partners and brings a legal action
Partner right to claim for the realization of his share in case of dissolution of the firm
A new partner may be admitted into partnership firm only with the consent of all the partners. A new partner admitted will not be liable for any acts of other partners or firms before his admission.
What are the rights and liabilities of a new partner?
The liabilities of new partner commences from the date when he is admitted as a partner in a partnership firm.
After the admission of a new partner, the new firm is liable for the debts of the old firm and the creditor has to discharge the old firm and accept a new firm as its debtor. It can be called as a novation. It can be done only when the creditor gives the consent to it.
Section 32 of Act talks about the retirement of partners. When the partner withdraws from the partnership by dissolving it then it is dissolution but not a retirement.
Any partner may retire:
When there is a partnership at will, by serving a notice to all the existing partners
When there is an express agreement among the partners
When the consent of all the partners is given
Liabilities of retired partner
A retired partner continues to be liable for the acts of firms and other partners till he or any other partners give public notice about his retirement. When the third party does not know that he was a partner and deals with the firm; then in such case a retired partner is not liable. if it is a partnership at will then there is no requirement to give public notice about his retirement.
The outgoing partner may enter into an agreement to not carry similar business or activities within a specified period of time.
When a partner is declared as insolvent by the court, it leads to the following consequences:
He ceases to be the partner of a partnership firm from the date of adjudication
His estate which is in possession of official liquidator ceases to be liable for any acts of the firm whether the partnership subsequently dissolves or not
Partnership ceases to be liable for any act of insolvency partner
Liability of estate of a deceased person (Section 35)
Generally, the partnership comes to end on the death of a partner but if there is a contract between partners to continue with the partnership on the death of a partner then surviving partner continues with the business after clearing the deceased partner estate from any liability for the future acts of the firms.
The outgoing partner is restricted to perform acts like:
Using the name of the firm
Representing himself as a partner
Make the customer of the firm in which he was a partner as its own.
The outgoing partner may enter into an agreement not to carry similar business or activities within a specified period of time. After the specified period, the outgoing partner is allowed to carry on a similar business or advertise it.
Liabilities of outgoing partner to subsequent profits (Section 37)
When the any of the partners ceases to be a partner or dies and remaining partner continues with the business without settling the accounts then the outgoing partner is liable to get a share from the profit earned by the firm since the date he ceases to be a partner.
The share may be attributable to the use of a share of his property or 6% interest per annum on the amount of share in his property.
The surviving partner has the option to purchase the share of the deceased partner and if they purchase it then the deceased partner has no right to get the profit derived from such property.
Dissolution of a firm
Section 39 to 44 deals with the Dissolution of a firm.
Sometimes circumstances arise when the firm gets dissolved. Sometimes a firm is dissolved voluntary or by the order from the court. There are various modes prescribed under Section 39 to 44 for the dissolution of a partnership firm. Even when the partnership is dissolved then it gives certain rights and liabilities to the partners.
Lets us understand the concept of dissolution in detail throughthe Powerpoint Presentation given below.
Liabilities of partners after the dissolution of the partnership firm (Section 45)
The partners are liable for the acts of the firm to the third party until public notice is given. A partner who is declared as insolvent, or who is retired, the estate of a person who dies, or who was not known as a partner at the time of dealing with the third party will not be liable for the act.
Wind up the Business Post-Dissolution (Section 46)
When the firm is dissolved every partner has a right to apply for the firm’s property in the payment of debts and liabilities. If there is any surplus it needs to be distributed among the partners.
The partners have mutual obligations and rights until the affairs of the firm is wound up.
When the partnership has dissolved the accounts of the partners needs to be settled under the usual course of business. Various modes can be used for the settlement of accounts.
If there is a deficiency in capital or loss is incurred when it is paid out of profit. If profit is not sufficient or no profit is earned then it is paid out by the capital and by the partners if necessary. The partners contribute to the proportion of the profit sharing ratio.
The asset of the firm and the capital contributed by the partners to meet up the deficiency in the capital is applied in the following order:
Repayment to third parties
The amount which is due to him from the capital
The amount which is due to him on account of capital
And if any amount is left then it is distributed among all the partners in their profit sharing ratio.
In a case when there are joint debts from the firm and the separate debts from the partner then joint debts from the firm is given priority and if any surplus is left then separate debts from the partner is to be paid off.
The property of the individual partners is applied firstly for the payment of separate debts.
When the firm is dissolved by the death of the partner and business is carried out by the existing partners or his legal heirs then they have to account for the personal benefit earned before winding up the partnership.
Section 53 states that if there is no contract the partner can restrain other partners from carrying similar activities, or using the firm’s name or firm’s property for their own benefit until the winding up process is complete.
Return of Premium on the Premature Dissolution of the firm (Section 51)
When the firm is dissolved before the expiry of a fixed period, then a partner paying a premium can receive a return of a reasonable part of the premium. Such rules are not applicable in a case when the partnership is dissolved by:
Misconduct of partner paying a premium (Section 52)
Post an agreement in which there is no clause for return of premium.
Contract Rescinded for Fraud or Misrepresentation
When the partnership arising from the contract is rescinded due to fraud and misrepresentation then the party who has rescinded the contract will be liable as:
After the debt of the firm is paid the lien on remaining assets. He will be treated as a creditor for the payment of any debts made by him.
An indemnity from the partners guilty of misrepresentation or fraud against all debts of firms.
Sale of Goodwill After Dissolution of Firm (Section 55)
The goodwill is treated as an asset. The goodwill is included in the assets while settling the account after the dissolution of the firm. The goodwill may be sold separately or with other assets. Once the firm is dissolved and goodwill is sold then any partners can carry on a similar business or advertise a business competing with the buyers of the goodwill. The partners are prohibited from doing the following acts:
To use the name of the firm
To represent himself as carrying the business
To solicit the customers of the firm dealing before dissolution.
Conclusion
Partnership is a very common type of business which is prevailing in the country. It has many advantages for the company. This Act is a complete Act as it covers all the aspect related to the partnership.
This article is written by Diganth Raj Sehgal, Student, School of Law, Christ University, Bangalore. The author in this article discusses capital punishment in India and modes of execution in India and around the world.
Introduction
Capital punishment or death penalty or death sentence is a form of punishment which allows for the person who is convicted to be killed by the state. Such punishment has to be sanctioned by the government and is an extension of the deterrence theory of punishment which aims at deterring the commission of crime by imposing severe punishments as consequences. The crimes that are punishable by death are serious and heinous offences such as murder, terrorism, mass killings, treason and espionage, war crimes and crimes against humanity or against the state.
Under the Indian Penal Code, death sentence as a punishment is given under Section 53. But such punishment is very scantily used in India. In the case of Bachan Singh vs. State of Punjab (1980) (2 SCC 684), among other cases, it was made clear by the courts that Capital punishment in India can be given only in the rarest of rare cases. These precedents of Capital punishment law have also laid down the aggravating and mitigating factors to be considered before awarding a death sentence.
Even though this punishment is rarely executed, it is still awarded more often than expected. Often people of different classes, castes, genders, social status are treated differently. On several accounts, it can be seen that person from a lower socio-economic background, who cannot afford proper legal services are at the receiving end of such punishment.
Position of the Indian law on capital punishment
It was famously said by Emperor Ashoka “State should not punish with vengeance“. It is said that by killing a person who is convicted of murder, the state is in a way avenging the death of the victim, which is not the purpose of punishments.
Death penalty has been a mode of punishment since time immemorial. There are several contradicting opinions in the modern world on capital punishment and its place in the legal system. Some argue on religious grounds claiming that humans cannot take life of another, a person’s sins will be acknowledged by God. Others look at it in light of humanity and morality claiming that everyone has the right to life and the state should not be allowed to have a say in whose right to life can be waived.
In India, the punishment system followed is primarily a combination of reformation (aims at reformation of the convict through the punishment so as to make them contributing members of the society) and deterrence (aims at stopping the commission of the crime due to the heavy consequences which follow it). This is where the concept of capital punishment is questioned claiming that capital punishment is a form of retribution that is the idea of ‘an eye for an eye’ and so by killing the person who has killed, the system is not in concurrence with the theories it aims to follow.
The Law Commission of India also took up this subject suo moto and discussed that the death sentence must be abolished and laid down the exception of cases of terrorism. Further, when such recommendations were not heeded to, the Law Commission report stated that looking at the present technological and medical advancements, at the least, the mode of execution must be changed from the present mode of hanging.
“We find that there is a considerable body of opinion which would like hanging to be replaced by something more humane and more painless…in carrying out this task the Commission did not confine itself to the four main methods of execution, (lethal gas, shooting, electrocution, guillotine). It persuaded enquiry whether there was any method still untried that would inflict death as painless and certain as hanging but with greater decency and without the degrading and barbarous association with which hanging is tainted…”
The commission report also mentioned the 1949-1953 report of the Royal Commission on Capital Punishment which stated the three conditions which should be fulfilled in executing the death sentence, which are-
it should be as less painful as possible;
it should be as quick as possible;
there should be the least mutilation of the body
At present, the death penalty as a punishment, as discussed above, is awarded only in the rarest of the rare cases. If the lower courts award a death sentence, the same has to be confirmed by the High Court. The decision can be appealed to the Supreme Court, then a review petition can be filed, followed by a curative and mercy petitions. The Supreme Court has also laid down that the order for the execution of a person cannot be given before the person has exhausted all available remedies.
Prisoners under death row are persons and have a right to dignity under article 21 of the Constitution. They also hold the right to study while in custody and it is mandatory for them to get regular health check-ups. They also have a right to defence and if they cannot afford a lawyer, it is the duty of the state to appoint a counsel. Therefore, it is important, in keeping with their fundamental rights that the execution of the sentence awarded to them is quick and simple and after allowing them to employ all legal resources.
Arguments for and against capital punishment
Arguments for capital punishment
Prevents convicted killers from killing again
The death penalty guarantees that convicted murderers will never kill again. There have been countless cases where convicts sentenced to life in prison have murdered other inmates and/or prison guards.
Maintains justice
This type of punishment maintains justice in society. It is said, “life is sacred and innocent lives should be valued over the lives of killers.” Innocent victims who have been murdered and in some cases, tortured, had no choice in their untimely and cruel death should be given justice by punishing the offenders.
Historically recognized
Historians, Jurists and constitutionalists agree that the death penalty was an acceptable and permissible form of punishment for premeditated murder and should be given to the offenders who commit murders of innocent people
Offenders are Beyond Reform
If the offenders such as terrorists etc who, by their acts, inflict harm on a large number of people on the society and the community has a possibility of any future harm or threat, then the concept of capital punishment is justified.
There’s no concrete evidence showing that the death penalty actually deters crime. Some people do not have any deterrence by the death of those who have given capital punishment. In such a case, capital punishment has no benefit.
Retributive idea
There is an idea of ‘eye for an eye’ that if a person commits a murder, then he also should be murdered but if reformation is the aim, then the capital punishment is of no use.
More expensive than imprisonment
Contrary to popular belief, the death penalty is actually more expensive than keeping an offender in prison, even for life. While the cost of the actual execution may be minimal, the overall costs surrounding a capital case (where the death penalty is a potential punishment) are enormously high.
Does not bring closure
Studies show that capital punishment does not bring comfort to those affected by violent and fatal crimes. Giving capital punishments does not provide any relief to the victim or victim’s family
Execution and its modes
The sentence that someone should be punished with death is referred to as a death sentence whereas the act of carrying out the sentence is known as an execution. In India, the primary and only mode of execution is by ‘Hanging by neck till death’. Hanging is execution by strangling or breaking the neck by a suspended noose. Hanging is an ancient mode of execution and it was a part of the Roman law, Anglo-Saxon laws, English Laws and well as German Laws. Hanging as a punishment was the prevalent and the standard mode of execution until the abolition of capital punishment in Great Britain in 1965.
This traditional method of execution may involve suspending the victim from a gallows or crossbeam until he has died of asphyxiation, or it may be that the condemned person stands on a trapdoor and when the trap is released he falls several feet until stopped by the rope tied around his neck or a knot in the noose helps jerk back the victim’s head sharply enough to break the neck. Now, the mode of execution in most countries has moved from hanging to other methods such as lethal gas, lethal injection, electrocution, firing squad. At times, it may even be the option of the person who is being executed to choose how he is executed.
Further, countries such as Afghanistan, Bangladesh, Barbados, the Democratic Republic of the Congo, Egypt, Ghana, Iran, Japan, North Korea, Pakistan, Singapore, Sri Lanka, Sudan, Swaziland, United States of America, etc. also authorize hanging as a method of execution.
In the United States, both electrocution and gas chamber are authorised methods of execution, while in Iran the mode of execution used is pushing individuals from an unknown height. Sudan uses a method which calls for retributive sentences to be carried out in the same manner in which the offender caused death. Some countries use hanging as a mode only in military court. There are twenty-eight countries that authorize shooting by firing squad as a method of execution and twenty-two more that authorize shooting.
In India, the only exception to execution by hanging is given under The Army Act, The Navy Act and The Air Force Act which allows death by shooting. Section 34 of the Air Force Act, 1950 empowers the court-martial to impose the death sentence for the offences mentioned in section 34(a) to (o) of The Air Force Act, 1950. Such execution is on the discretion of the Court Martial to determine whether the mode would be by hanging or by being shot to death. The Army Act, 1950, and The Navy Act, 1957 also provide for similar provisions as in The Air Force Act, 1950. Section 163 of the Act provides for the form of the sentence of death as;
“In awarding a sentence of death, a court-martial shall, in its discretion, direct that the offender shall suffer death by being hanged by the neck until he be dead or shall suffer death by being shot to death.”
In the case of Rishi Malhotra v. Union of India, a writ petition was filed by Advocate Rishi Malhotra. He challenged the method of Execution of Death sentence in India i.e. by hanging by neck till the prisoner is dead. It said execution as contemplated u/s 354(5) CrPC is not only barbaric, inhuman and cruel but also against the resolutions adopted by the United Nations Economic & Social Council (ECOSOC), which had categorically resolved by way of safeguard, which state that “where the capital punishment occurs it should be carried out so as to inflict minimum suffering”. It states that execution should be as quick and as simple as possible and should produce immediate unconsciousness passing quickly into the death.
Malhotra cited the Law Commission reports of 1967 and 2003 which stated that there was an increase in the number of countries where hanging to death had been abolished or substituted by different modes of execution such as lethal injections, shooting and electrocution. It also relied on the dissenting judgment of former Justice P.N. Bhagwati who had observed that most of the developed and developing countries had replaced execution by hanging by intravenous lethal injection or by shooting which would be a more humane method of executing a death sentence, involving less pain and suffering. So, the petitioner wanted the court to quash the relevant provisions under the criminal and declare them to be ultra vires of Article 21 of the Constitution.
Landmark judgments
Deena v Union of India:In this case, the Supreme Court adjudicated upon the constitutional validity of execution of death penalty by hanging by as contemplated under section 354 (5) Cr.P.C 1973. It was challenged on the grounds that such execution was barbarous and inhuman and so, violative of Art. 21. The court held that section 354(5) of the I.P.C., which prescribed hanging as mode of execution as fair, just and reasonable procedure within the meaning of Article 21 and hence is constitutional.
Mithu v. State of Punjab: In this case, Section 303 of the Indian Penal Code which provided for a mandatory death sentence for offenders serving a life sentence was declared to be unconstitutional. The section was based on the logic that any criminal who has been convicted for life and still can kill someone are beyond reformation. It was held that Section 303 violated the Articles 14 and 21 of the Constitution and it must be repealed. The court discussed that;
“23. On a consideration of the various circumstances which we have mentioned in this judgment, we are of the opinion that Section 303 of the Penal Code violates the guarantee of equality contained in Article 14 as also the right conferred by Article 21 of the Constitution that no person shall be deprived of his life or personal liberty except according to procedure established by law. The section was originally conceived to discourage assaults by life convicts on the prison staff, but the legislature chose language which far exceeded its intention.”
Santosh Kumar Bariyar v. State of Maharashtra: This case may be considered to be a step towards the abolition of death penalties in India. The bench comprising Justices S.B. Sinha and Cyriac Joseph ruled that previous judgments of the Court, in which 13 death sentences were validated, were per incuriam, i.e. were rendered in ignorance of the law laid down in Bachan Singh’s case.In this case, four persons were accused of, kidnapping a person and demanding ransom, followed by killing him and cutting his body into pieces to dispose it. In spite of the brutal execution of the murder, the judges were convinced that the ‘mitigating circumstances’ in this case were sufficient to exclude it from the bracket of “rarest of rare” cases.It was observed by the court that the accused were not professional criminals with a long past criminal record and they committed the act with the sole motive of collecting money. The court discussed that
“112. We are also aware that on 18-12-2007, the United Nations General Assembly adopted Resolution 62/149 calling upon countries that retain the death penalty to establish a worldwide moratorium on executions with a view to abolishing the death penalty. India is, however, one of the 59 nations that retain the death penalty. Credible research, perhaps by the Law Commission of India or the National Human Rights Commission may allow for an up-to-date and informed discussion and debate on the subject.”
Conclusion
The debate on the morality of death sentence is an ongoing one. There are several countries that have already abolished capital punishment and there are some, like India, who have an elaborate process of deciding whether death sentence should be awarded or not. The Indian Law Commission recommended the abolition of this punishment but such recommendation was not heeded to.
At present, the law prevailing is the law laid down by the Supreme Court, that is the doctrine of the Rarest of the rare case. This along with a list of aggravating and mitigating factors is used to determine whether a person should be given such sentence or not. Even the mode of execution that must be used by the state is a matter of debate and such mode which is decided must be as per the International norms ‘quick and painless’.
Lastly, proper scrutiny must be undertaken before awarding an order of execution of a person, such punishment is permanent in nature and irreversible and therefore it is important that all relevant materials are accounted for before such decision and if there is even a smallest of doubt, such punishment should not be awarded.
This article is written by Tanya Bharti, Student, School of Law, Christ University, Bangalore. The author has analysed the position of UK and India with respect to Constructive notice under corporate law and also seeks to discuss the reasons why such principle is no longer a part of the English law and the legal consequences of it being a part of the Indian Corporate laws.
Introduction
A Constructive notice may be defined to be “the knowledge of a fact or facts which the law imputes to a person and in respect to which all questions of actual knowledge thereof is excluded”. The Indian Contract Act defines it as “a person is deemed to have actual knowledge of the fact if she willingly abstains from acquiring the knowledge or is grossly negligent.” In other words, having constructive notice of something means that even if there is no actual knowledge of the facts, it is determined by law that such knowledge is there.
Doctrine of Constructive Notice was first propounded in the 1850s under the English Law with respect to Deed of Settlement, which discussed that if a person is dealing with a company, it would be deemed that such person has notice of that company’s registered constitutional documents. In furtherance to this, such notice also included that the person would be deemed to have also understood the provisions of these documents. Though the ambit of constructive notice included the articles and the memorandum of association, but also special resolutions, it did not cover matters filed by a company to disclose the financial information and other information, in order to assist the shareholder to make an informed judgement. So, the scope of this doctrine remained uncertain.
Even though the Principle originated from the common law, is no longer a part of the English Corporate laws. Nevertheless, the doctrine of Constructive notice is still a part of the Indian laws. It is not in its original form but remains, in essence, the same doctrine.
What is Constructive Notice?
Constructive notice, in its technical signification, is the legal cognizance of a fact or facts which the law imputes to a party. This means that the knowledge of facts is deemed by the law and may or may not be actually present. So, there is no reliance on evidence or proof of whether there was actual knowledge or not and this makes this doctrine contrary to the doctrine of evidence. Here, the party is accountable even if it is evident that they did not have actual knowledge.
According to this theory, the law does not presume that the party has knowledge but it lays down that by intendment of law, he has knowledge. This means that in the eyes of law, he occupies the same position as if he had knowledge. It is thus a matter of legal intendment, rather than of legal presumption, or inference.
The characteristic feature of constructive notice is, that it will not admit of rebuttal. This means that a person who is said to have constructive notice, cannot try to prove that there was no actual knowledge. This is because when a person has such notice, it is irrelevant if they did or did not have actual knowledge and therefore they cannot rebut such application of this doctrine.
The above definitions make it evident that a constructive notice is enough proof that the person had the knowledge and such proof is “conclusive unless disproved,” and “in most cases insusceptible of explanation or rebuttal”. Though this does not mean that there can be no contradiction at all about whether there was constructive notice in the first place or not.
Background of constructive notice
The Doctrine of Constructive Notice to be studied in depth requires a preliminary study of various doctrines that have together blended in to create the situation that in turn led to the inception of the Doctrine of Constructive notice. These doctrines are The doctrine of Apparent authority of an agent on one hand and the doctrine of Ultra vires on the other. This area of company law represents its blend with the law of agency. The company, as is clear to us, only acts through its agents. Hence, the law of agency is applicable to the acts of the company’s agents who enter into contractual relationships on behalf of the company.
An agent may possess two kinds of authorities, actual or apparent. While actual authority indicates factual conferment of authority on an individual, apparent authority should first be taken to mean that there is no real authority but a kind of presumed authority due to suggestive circumstances. This principle was suitably defined inFreeman and Lockyer’s case, but it is still often confused with implied authority. But it must be remembered that apparent authority is nothing but the impression in the mind of the third party. The crucial distinction between the two lies in the fact whether there exists a relationship between the principal or the agent.
The Doctrine of Apparent authority was also elaborated in Lockyer and Freeman’s Case by Diplock L.J. The requirements that he puts forth for the existence of actual authority clearly highlight that the basis of such an authority is not the existence of any such authority but a representation by the principal. This kind of authority is treated distinct from the person and depends on the representation made by the principal to the world at large. This representation maybe through expression or direct implication of the principal’s conduct, or through the principal’s general treatment of the agent, say by giving him a particular position, the outcome of which would ordinarily include bestowal of such authority on the agent.
Such emphasis on representation then brings apparent authority to be further grounded in the rule against estoppel. The former conduct of the principal is more easily linked to the rule of estoppel but the latter, general, conduct of the principal is a link made more artificially. Often the two categories overlap as every representation, as a matter of practice has some elements of both generality and specificity. However, it must be kept in mind that the representation should have the credibility to be reliable. Thus, for this purpose, the principal, who makes the representation should have actual authority to do that act, otherwise, it may not be tenable to assume that one may create a chain of agents and sub-agents with no actual authority at the root of such ostensible authority. This rule was applied to company law as well in Hely-Hutchinson case wherein it was held that de facto discharge of duties of a position results in ostensible authority.
Now we must look at the issue of the agent exceeding his/her authority. The agent of a company may exceed his/her authority in two ways. Firstly, the act of the agent may be ratified by the Company and secondly, the act may be outside the legal capacity of the company to ratify. We shall deal with the latter case first while we elucidate the doctrine of Ultra vires vis-à-vis the authority of an agent.
Now turning to company law, this general rule of agency has to be more specifically applied. The authority of an agent here, actual or apparent, are both hit by the Doctrine of Ultra vires. Here, the company is not bound by a contract or any other act of its agent, in the exercise of his/her agency, that the company, by virtue of its Articles or the memorandum, had no legal capacity to enter. Such an act may not be binding on the company whether the authority of the agent is actual or apparent.
However, sometimes while the act may not be ultra vires the company’s legal authority, it may still not be in the agent’s power to perform that act in the course of his/her agency. In case he/she still goes ahead to perform that act, the question of the authority of an agent becomes applicable in the company law. The negative application of the wider Doctrine of Apparent Authority came to be known as the Doctrine of Constructive notice.
The problems with constructive notice
There has been considerable judicial debate in cases, where the company itself has made representations of apparent authority or the belief of the third party in the authority of the agent stems from some other source than a reading of the Articles of the company, can the third party allege that upon reading the articles of association of the company, such authority of the agent would have been apparent and thus the third party must be assumed to have constructive notice of the articles? The judicial opinion on the question is largely divided as to whether the doctrine may operate for the third party or not.
The doctrine itself creates an unfavourable climate for business as it creates a disproportionate burden on part of the third party, which was, in turn, impeding smooth trading. This perception of the doctrine is strongly criticized, unanimously by the jurists as well as writers. It is not at all a logical chain of reason that, because the law gave everyone the opportunity to find out about a company’s registered documents, there was a corresponding duty on part of the third party to peruse through these documents.
One justification of having this rule in place was that limited liability companies did not exist at that point of time and the risk was always on the unwitting shareholder. Thus, the effort of the third party was counterbalanced by the risk on part of the shareholder. However, once limited liability became the general norm in company law, the real risk shifted from the shareholder to the creditor and the rule ceased to have such a justification. Moreover, in modern times, the business decisions must be made promptly and the registered documents may only be obtained from the registrar’s office at great expense of time and effort.
Even before the Limited Liability company was in existence, the Doctrine of Constructive notice had the potential of creating an unnecessary risk in the minds of the Third party. Hence, as early as 1856, legal measures were taken to mitigate the worst of the implications of the constructive notice rule.
Position of Indian Law on constructive notice
Since the early times, the Indian courts have shown a certain degree of caution and reluctance in applying this doctrine to the detriment of the third party. The first application of the doctrine of constructive notice was in the Charnock Collieries case in 1912. The judge in this case simply holds that the stranger to the company has an obligation to read the articles of the company, but nothing beyond.
However, the mode of application is typically the position before the Kreditbank and the Houghton cases in the common law. The judge in this case, simply holds that the stranger has an obligation to read the articles of the company, but nothing beyond. Since the articles of the company give the borrowing power to managing agents along with providing security on the company, the judge holds that the company is bound by the agent’s acts. As early as 1924, the court inMufassil Bank case, held that so long as the power of delegation exists in the articles and the act of the agent is not hit by the doctrine of ultra vires, the company is estopped from denying its obligations under the contract in question. The same was continued in other cases.
The first negative application of the Doctrine of Constructive Notice is found in the case of Kotla Venkataswamy v. Rammurthy, where the doctrine was applied in its usual sense and the third party mortgagee was denied relief on account of the transaction being irregular in nature.
Indian law on agency and contracts has evolved differently from the Common law. One of the most important reasons as to why the doctrines of Constructive notice does not gain a substantial foothold in the Indian Jurisprudence can be attributed to the Indian Contract Act, 1872, that also deals with the law of agency in India.
Conclusion
The doctrine of Constructive Notice has been needlessly complicated. The problem that the doctrine aims to resolve could have easily been resolved by a simple application of the rule of Ostensible authority which has been elaborated and disguised under this doctrine. The approach of Constructive Notice is so radically inclined to support the Company that the reactions to it all came to support the third parties. The rule of Constructive Notice blindly supports the company to an illimitable extent.
The law of agency was needed so as to repair the damage which was seen in various cases where ostensible authority became a prerequisite for the application of the doctrine. This was the position of common law until the enforcement of Companies act of 1989. This act introduced several conflicting provisions in order to abolish constructive notice.
Contrasting this common law concept with the Indian law, we see that the Companies act of 1913 expressly endorsed the doctrine. Later, although the 1956 act did not contain any such analogous principles, the Indian law continued to treat the directors as fiduciaries or trustees of the company and as long as the acts of the directors were for the benefit of the company, they would bind the company.
This principle was further enforced by the provisions relating to agency in the Indian Contract Act, where it is laid down that an agent’s’ power is to do anything lawful to achieve the object of agency and also that agents can do any legal thing they like, if there is an emergency, to prevent losses to the principle. Thus, except for a rare breed of cases where the constructive notice was applied, Indian courts have been immune to useless complications in the form of constructive notice.
This article is written by Khushi Agrawal, a student of Symbiosis Law School, Noida. In this article, she has discussed the concepts of insanity as a defence under IPC in detail.
Introduction
In India, IPC Section 84 describes the defences available to the unsound person. Persons of unsound minds are vulnerable in nature. There is a complete chance of their exploitation in a situation where they are not being sought protection. The law that protects an unsound minded person and provides defence from criminal liability to the unsound minded person is known as the Law of Insanity. Whenever an insane person commits a crime due to the effect of his insanity, he does not have a guilty mind to understand that what he is doing is something that is prohibited by law. The insanity law has proven to be of practical importance in understanding the situation and the mental position of an insane person and in certain reasonable circumstances granted them exemption from criminal liability.
Origin of the Rules on the Insanity Plea
According to the rule of the M’Naghten, it must be clearly demonstrated, in order to establish the defence of insanity, that the accused worked under a fault at the time of the act so much as to be unaware of the nature and quality of the act he was doing. This explanation cannot be taken as a full definition of proof, as it fails to explain various aspects of insanity.
It is therefore imperative to note that the term “insanity” has a particular meaning in criminal law. It is not necessarily used in its medical sense, but its legal significance must be understood. Therefore, insanity as a defence refers to legal insanity and not medical insanity. The concept of ‘legal insanity’ refers to certain requirements to be met by the accused according to the rules laid down in the law. Legal insanity is a narrower concept than medical insanity. Legal insanity is a concept narrower than medical insanity. For example, some mental illnesses such as schizophrenia, paranoia or lunacy may overlap with the legal and medical conceptions of insanity and may also be protected against insanity or insanity of mind when the other conditions are fulfilled in order to satisfy legal insanity criteria.
English Law on the Defence of Insanity
English criminal law considers insanity a valid defence of crime. The fundamental definition of insanity is based on the M’Naghten Rules. These rules are not about insanity medical definitions. In M’Naghten’s case, the judges declared the following insanity principles:
All are presumed to be sane and to have enough reason, until proved contrary, to be responsible for their crimes.
It must be clearly demonstrated in order to establish the defence of insanity that at the time of the act, the accused was working under such a defect of reason, from mental illness, as
He didn’t know the nature and the qualities of the act he was doing or
He did not know what he was doing was wrong.
The accused must, therefore, prove on the basis of the facts that he was suffering from a defect of reason caused by mental illness in an effort to argue insanity, because either he was unaware of the nature and quality of the act, or he had not realized that his actions were wrong.
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Indian Law on the Defence of Insanity
Insanity is provided in accordance with Section 84 of the Indian Penal Code as a defence under Indian Law. However, the term “insanity” is not used under this provision. The Indian Penal Code uses the sentence “mental soundness.” In accordance with the code, the defence of insanity, or that can also be called defence of mental insanity, comes from M’Naghten’s rule.
In Article 84 of the Indian Penal Code, an unsound person shall act- Nothing is an offence committed by someone who is currently unable to know the nature of the act or does what is wrong or contrary to legislation due to a lack of a sound mind.
Nevertheless, it should be noted that the coders preferred to use the expression “insanity of mind” instead of the term “insanity.” Insanity’s scope is very limited, while the mind’s insanity covers a large area.
For this defence, the following elements are to be established-
The accused was in a state of unsoundness of mind at the time of the act.
He was unable to know the nature of the act or do what was either wrong or contrary to the law. The term ‘wrong’ is different from the term ‘contrary to the law.’
If anything is ‘wrong’, it is not necessary that it would also be ‘contrary to the law.’ The legal conception of insanity differs significantly from medical conception. Not every form of insanity or madness is recognized as a sufficient excuse by law.
Legal but not Medical Insanity: Distinction
Section 84 of the Indian Penal Code sets out the legal responsibility test as distinguished from the medical test. It can be observed that the absence of will arises not only from the absence of understanding maturity but also from a morbid state of mind. This morbid mind condition, which provides an exemption from criminal responsibility, differs from the medical and legal point of view. According to the medical point of view, it is probably correct to say that every person, when committing a criminal act, is insane and therefore needs an exemption from criminal responsibility; while it is a legal point of view, a person must be held to be the same as long as he is able to distinguish between right and wrong; as long as he knows that the act carried out is contrary to the law.
It has been ruled by the Supreme Court that “mentally ill” people and psychopaths are unable to seek immunity from a criminal case, as it is their responsibility to demonstrate insanity at the time the crime was committed. So in practice, not every person who is mentally ill is exempt from criminal liability. There has to be a distinction between legal insanity and medical insanity. “Arijit Pasayat and the Bench of Justices, DK Jain, stated while upholding the life conviction of a man who cut off his wife’s head. The mere abnormality of mind, partial delusion, irresistible impulse or compulsive behavior of a psychopath does not provide protection from criminal prosecution as provided by the apex court held Section 84 of the Indian Penal Code (IPC). The Bench stated that Section 84 of the IPC, which provides immunity from criminal prosecution to persons of unsound mind, would not be available to an accused, as the burden of proving insanity would lie with them, as provided in Section 105 of the Indian Evidence.
In the case of Hari Singh Gond v. State of Madhya Pradesh[1], the Supreme Court observed that Section 84 sets out the legal test of responsibility in cases of alleged mental insanity. There is no definition of ‘mind soundness’ in IPC. However, the courts have mainly treated this expression as equivalent to insanity. But the term ‘insanity’ itself does not have a precise definition. It is a term used to describe various degrees of mental disorder. So, every mentally ill person is not ipso facto exempt from criminal responsibility. A distinction must be made between legal insanity and medical insanity. A court is concerned with legal insanity, not medical insanity.
In the case of Surendra Mishra v. State of Jharkhand[2], It was pointed out that ‘every person suffering from mental illness is not ipso facto exempt from criminal liability.’ Furthermore, in the case of Shrikant Anandrao Bhosale v. State of Maharashtra[3], the Supreme Court, in determining the offense under Section 84 of the IPC, held that’ it is the totality of the circumstances seen in the light of the recorded evidence’ that would prove that the offense was committed.’ It was added: “The unsoundness of the mind before and after the incident is a relevant fact.”
Unsoundness of mind must be at the time of the commission of the Act.
The first thing a court to be considered when defending insanity is whether the accused has established that he was unsound at the time of committing the act. The word “insanity” is not used in Section 84 of the penal code.
In Rattan Lal v. State of M.P[4], it was well established by the court that the crucial point of time at which the unsound mind should be established is the time when the crime is actually committed and whether the accused was in such a state of mind as to be entitled to benefit from Section 84 can only be determined from the circumstances that preceded, attended and followed the crime. In other words, it is the behavior precedent, attendant and subsequent to the event that may be relevant in determining the mental condition of the accused at the time of the commission of the offense but not those remote in time.
In Kamala Bhuniya v. West Bengal State,the accused was tried for her husband’s murder with an axis. A suit was filed against the accused, she alleged to be insane at the time of the incident, the investigating officer recorded at the initial stage about the accused’s mental insanity. The prosecution’s duty was to arrange for the accused’s medical examination, it was held that there was no motive for murder. The accused made no attempt to flee, nor made any attempt to remove the incriminating weapon Failure on the part of the prosecution was to discharge his initial responsibility for the presence of mens-rea in the accused at the time of the commission of the offence. The accused was entitled to benefit from Section 84. And hence accused was proved insane at the time of the commission of the offence and was held guilty of Culpable Homicide and not of Murder.
Incapacity to know the nature of the Act
The word “incapacity to know the nature of the act” embodied in Section 84 of the Indian Penal Code refers to that state of mind when the accused was unable to appreciate the effects of his conduct. It would mean that the accused is insane in every possible sense of the word, and such insanity must sweep away his ability to appreciate the physical effects of his acts.
Incapacity to know right and wrong
In order to use the defence of insanity under the latter part of Section 84, namely “or to do what is either wrong or contrary to the law,” it is not necessary that the accused should be completely insane, his reason should not be completely insane, his reason should not be completely extinguished. What is required, is to establish that although the accused knew the physical effects of his act, he was unable to know that he was doing what was either “wrong” or “contrary to the law.” This part of Section 84 has made a new contribution to criminal law by introducing the concept of partial insanity as a defence against criminal insanity. However, as a practical matter, there would probably be very few cases in which insanity is pleaded in defence of a crime in which the distinction between “moral” and “legal” error would be necessary. In any crime, insanity can undoubtedly be pleaded as a defence, yet it is rarely pleaded except in murder cases. Therefore, in a case, this fine distinction may not be very useful for the decision. The Indian penal code has advisably used either “wrong or contrary to the law” in Section 84, perhaps anticipating the controversy.
Conclusion
It is suggested that there should be a well-defined definition of the term ‘mental insanity’ to avoid the various controversies and confusions that arise in understanding and differentiating between the ‘mental disease’ and the actual insanity of mind sought by the Code or the so-called ‘legal insanity’ in order to make the defence available to the accused.
Section 84 of the Code should be amended to incorporate the partial defence of diminished responsibility for murdering insane persons. This change shall be made on an equal footing with the defence of diminished responsibility as accepted under the defence of insanity as specified by English criminal law.
The scope of Section 84 should be expanded to incorporate the defence of automatism under the defence of an unhealthy mind, just as it is recognized by the English criminal law system.
This article is written by Tanya Bharti, Student, School of Law, Christ University, Bangalore. The author discusses the meaning, scope and application of Res Judicata and Res Sub Judice in court proceedings.
Introduction
In the common law, several principles have been laid down which formed the foundation of the present legal system in India. The purpose of such doctrines is to assess the Judicial Efficiency and ensure that the productive pace of getting justice in the court is achieved and maintained. Two of these principles are discussed in this article, namely, the Doctrine of Res Sub Judice and Res Judicata.
In Latin, Res Judicata means a matter that has been judged. When a case has already been decided and the final judgement been given such that the matter is no longer subject to appeal, the doctrine of res judicata bars or precludes continued litigation of such matter between the same parties.
On the other hand, Sub Judice means ‘under judgment’. It implies that a matter is being considered by court or judge. In a scenario when two or more cases are filed between the same parties on the same subject matter, the competent court has the power to stay proceedings. So, the doctrine of Res Sub Judice means stay of suit.
In order to ensure that the courts’ time is effectively used as well as justice for all is obtained, these doctrines play an important role. They do this by ensuring that a suit ends after the judgment is passed and that the same suit on the same subject matter is not filed multiple times. This ensures smooth functioning of the judiciary.
Res Judicata
In case of Res Judicata, a matter once decided cannot be raised again, either in the same court or in a different court. This is why it is also called as ‘claim preclusion’ as it precludes or prohibits any further claims after the final judgment. It is a common law practice meant to bar re-litigation of cases between the same parties in the court.
The doctrine of Res Judicata come from the full maxim ‘Res judicata pro veritate accipitur’. The concept of Res Judicata evolved from the English Common Law system, and was derived from the overriding concept of judicial economy, consistency, and finality. From the common law, it got included in the Code of Civil Procedure, which was later as a whole was adopted by the Indian legal system.
Purpose of Res judicata
Res Judicata aims to prevent;
Injustice to the parties of a case that has been supposedly concluded by providing closure to a judgment and precluding any further claims
Unnecessary waste of court resources
Multiplying of judgments as further claims would lead to several varied judgements on the same matter which will lead to confusion
Recovery of damages from the defendant twice for the same injury
Res judicata includes
Claim preclusion: it focuses on barring a suit from being brought again on a legal cause of action, that has already been, finally decided between the parties.
Issue preclusion:bars the re-litigation of factual issues that have already been necessarily determined by a judge as part of earlier claim.
Though it must be noted that, this doesn’t include the process of appeal, as an appeal is considered the appropriate way to challenge a judgement. Once the appeal process is exhausted or barred by limitation, the res judicata will apply to the decision. Therefore, its application is only on the final decision post appeals.
Doctrine of res judicata or rule of conclusive judgement is based on the following three maxims:
Nemo debet lis vexari pro eadem causa– no man to be vexed twice for the same cause.
Interest republicae ut sit finis litium– it is in the interest of the state that there should be end to litigation.
Re judicata pro veritate occipitur– a judicial decision should be accepted as correct.
In the case of Ashok Kumar v National Insurance Company 1998, the Supreme Court observed that the first legal maxim takes care of the private interest and the next two of the larger interest of the society.
Res Judicata under Indian law
Res judicata or the rule of conclusiveness of the judgment has been embodied in the Indian law under Section 11 of the code of Civil Procedure, 1908. It enacts that once a matter is finally decided by a competent Court, no party can be permitted to reopen it in a subsequent litigation. Section 11 states that;
“No Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court.”
“The principle of res judicata is based on the need of giving a finality to judicial decisions. What it says is that once a res is judicata, it shall not be adjudged again. Primarily it applies as between past litigation and future litigation. When a matter, whether on a question of fact or a question of law, has been decided between two parties in one suit or proceeding and the decision is final, either because no appeal was taken to a higher Court or because the appeal was dismissed, or no appeal lies, neither party will be allowed in a future suit or proceeding between the same parties to canvass the matter again.”
Ingredients and essentials of section 11
According to this section, no court shall try any suit or issue in which:
The matter in issue (directly and substantially)has been directly and substantially in issue in a former suit
Such matter in the former suit had been between the same parties or between parties claiming under them
The matter must be litigated under the same title in a court competent to try such suit or a suit in which the matter has been subsequently raised and has been heard and finally decided by such court
Mandatory Provision:
Further, it must be noted that Section 11 is a mandatory provision and not directory in nature. The only exception in which a former suit can be avoided is by taking recourse of Section 44 of the Indian Evidence Act, 1872 on grounds of fraud or collusion.
The same was discussed in the case of Beli Ram and Brothers v Chaudri Mohammad Afzal, where the court held that when it was established that the guardian of the minor had acted in collusion with the defendant, it doesn’t operate as res judicata and can be set aside by invoking Section 44 of the Indian Evidence Act.
Further, in the case of Jallur Venkata Seshayya v. Tahdaviconda Koteswara Rao, 1937 the court held that, gross negligence in former suit doesn’t amount to fraud or collusion and thus acts as bar to subsequent suit.
The following are also to be taken into account:
former suit denotes a suit which has been decided prior to the suit in question, and not if it was prior to this suit. i.e. The cut-off is date of judgement and not the date of institution of the suit.
competency of a court is to be decided, irrespective of the right to appeal from a former suit.
the matter referred to in this suit must have been alleged by one party and either accepted or refused by the other party (expressly/impliedly).
any matter which might or ought to have been made ground of attack/defence in such former suit shall be deemed to have been a matter directly and substantially in issue in such suit (constructive res judicata).
if any relief was claimed in plaint and was not granted expressly, it would be deemed to have been refused in such former suit.
when persons litigate bonafide in respect of a public/private right claimed in common for themselves and others, all persons interested for the purpose of section 11 , will be deemed as claiming under persons litigating,
it is also to be remembered that, a court of limited jurisdiction where the former suit was instituted and decided upon, shall operate as res judicata, even if the court of limited jurisdiction is not competent to try the subsequent suit.
this section 11 applies to execution proceedings also.
Public Interest Litigations:
In case of res judicata, a Public Interest Litigation can be applicable only when the former suit was bonafide in nature and that it will not act as a shield in cases where public good is threatened or questioned.
In the case ofRural litigation and Entitlement Kendra v State of Uttar Pradesh, the Supreme Court observed that the writ petition before them was not an inter-party dispute and the controversy in it was whether mining was to be allowed or not. Thus it was a matter that decided the social safety and providing hazardous free environment. It was further discussed by the court that this matter was of grave public importance and therefore, res judicata could not be used as a shield.
Further in the case of Ramdas Nayak v Union of India, court observed that, by invoking re judicata, it was high time for the court to end repetitive litigations coming under the grab of public interest litigations.
Cases
InSlochana Amma v. Narayana Nair 1994, the court held, the doctrine of res judicata applies to quasi judicial proceedings before tribunals also.
In the case ofGovindaswamy v. Kasturi Ammal 1998, it was held by the court that, the doctrine of res judicata applies to the plaintiff as well as the defendant.
The court held in the case of Umayal Achi v MPM Ramanathan Chettiar that the correctness or otherwise of a judicial decision has no bearing upon whether or not it operates as res judicata.
Applications of res judicata
The doctrine of res judicata can be invoked even in the subsequent stage of the same proceedings. In the case of Y.B. Patil v. Y.L.Patil, the court held that once an order is made in the course of the proceedings, it becomes final and therefore would be binding upon the parties at any subsequent stages of the same proceedings.
This doctrine can also apply against co-defendants. In the case of Mahaboob Sahab v Syed Ismail, the court held the following four conditions must be satisfied for the application of res judicata:
there must be a conflict of interest between the defendants concerned.
it must be necessary to decide such conflicts, in order to give relief to the plaintiff
the questions between the defendants to be finally decided.
co-defendants to be necessary and proper parties to the suit.
Further, this doctrine can be applied even between co-plaintiffs. In the case of Iftikhar Ahmed v. Syed Meharban Ali, the court held that if the following four conditions are satisfied res judicata will be applicable:
there must be a conflict of interest between the co-plaintiffs
it must be necessary to decide such conflicts, in order to give relief to the plaintiff
the questions between the plaintiffs to be finally decided.
Non-application of res judicata
Habeas corpus petitions: In the case of Sunil Dutt v Union of India, it was held that habeas corpus, filed under fresh grounds and changed circumstances will not be barred by a previous such petition.
Dismissal of writ petition in limine: In Pujari Bai v Madan Gopal, it was held res judicata not applicable when dismissed in limine ( without speaking orders) or on grounds of laches or availability of alternate remedies.
Matter collaterally and incidentally in issue doesn’t operate as res judicata as discussed in the case of Sayed Mohammad v Musa Ummer
Res judicata not applicable to it proceedings or fixing of fair rent proceedings
Res Sub Judice
When two or more cases are filed between the same parties on the same subject matter, in two or more different Courts, the competent court has power to “Stay Proceedings” of another Court. The doctrine of res sub judice aims to prevent courts of concurrent jurisdiction from simultaneously entertaining and adjudicating upon two parallel litigations with respect to the same cause of action, same subject matter and same relief claimed.
Application of Res Sub Judice in India
Section 10 of Civil Procedure Code defines ‘Stay of suit’ as follows:
“No Court to proceed with trail of any suit in which the matter in issue, is also directly and substantially in issue. In previously instituted suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, where such suit is pending in same or any other Court, in India, Having jurisdiction to grant relief claimed. Explanation: The pendency of a suit in a Foreign Court doesn’t preclude the Courts in India from, trying a suit founded on same cause of action.”
Scope and Objective of section 10
Scope: Section 10 deals with the concept of Res Sub Judice.
Objective: The object of Section 10 is to prevent Courts of concurrent jurisdiction from simultaneously, trying two parallel cases, in respect of same matter in issue. The two fold objects are:
Avoid wasting Court Resources.
Avoid Conflicting decisions.
Conditions or essentials
The matter in issue in both the cases are to be substantially the same
Previously instituted suit must be pending in the same or any other court competent to grant:
Relief claimed in the suit.
Relief claimed in subsequent the suit.
Suits to the parties are to be the same or between parties under whom they or any of them claim, litigating under the same title.
Pendency of suit in Foreign Court doesn’t activate Section 10 CPC.
If suit is pending before a Court and subsequently an application is filed before a Thasildhar, it doesn’t invoke Section 10 as Thasildhar is not a “Court”
For purpose of institution, the date of presentation of plaint and not the date of admission is considered. The term suit includes appeal.
Any decree passed in violation of Section 10 is null and void.
Illustration: Papita, an agent of Babita at Delhi agreed to sell Babita’s goods in Chennai. Papita, the agent files suit for balance of accounts in Chennai. Babita sues the agent Papita for accounts and his negligence in Delhi; while case is pending in Chennai. In this case, Delhi Court is precluded from conducting trail and Papita can petition Chennai Court to direct stay of proceedings against Delhi Court.
Facts: The defendant had filed for stay of present suit, an application u/s 10 CPC, on ground that the matter in controversy is pending in Jamshedpur Court also. This was opposed by plaintiff on ground that, the defendants had raised issue of jurisdiction of Jamshedpur Court to entertain same suit; and that application u/s 10 CPC can be filed in the present suit, only if objection with respect to lack of jurisdiction was withdrawn in Jamshedpur Court.
Judgment: Court held that the conditions requisite to invoke S.10 CPC are:
Matter in issue in both the suits to be substantially the same.
Suit to be between the same parties or parties litigating under them
Previously instituted suit to be in the same Court or a different Court, which has jurisdiction to grant the relief asked.
There is nothing to the effect that defendant should not question the competency of previously Court in the previously instituted suit, and there remains the fact that the plaintiff in their defense against S.10 CPC, had not stated the Jamshedpur Court is competent. Thus relief was granted to the defendant.
Dees Piston Ltd V State Bank of India 1991: In this case, it was held that. when a matter is before a competent Civil Court, the National Commission will not entertain a petition in respect of identical subject matter under Consumer Protection Act.
Indian Bank V Maharashtra State Co-Operative Marketing Federation 1998: The court in this case held that, the object of prohibition in S.10 CPC, is to, prevent courts of concurrent Jurisdiction from simultaneously trying two parallel cases avoid inconsistent findings on the matter in issue.
Conclusion
With the ever-increasing cases in the courts and the heightened burden on the courts because of several frivolous and repetitive suits, it is inevitable that to ensure smooth functioning of the judicial system as well as for providing justice to needy parties that these two doctrines are rigorously implemented. These doctrines are not and must not be used for the purpose of avoidance of justice. Rather, the purpose is to make the judiciary more efficient.
The doctrine of Res Sub Judice operates as a stay from the same subject matter in issue being parallel instituted in two different Courts and the twin objectives of Section 10 CPC are, Avoiding conflicting decisions and findings. Avoiding wastage of Court resources and time.
The doctrine of Res Judicata, on the other hand, aims to ensure that a matter once closed after exhaustion of all remedies is not re-opened. This is important as if it were not in place, the cases would go on in perpetuity and there would be no conclusion in any matter.
This article has been written by Diva Rai, 1st year student, Symbiosis Law School, Noida. In this article she discusses the evolution of res gestae, scope of Section 6 of the Evidence Act, transaction with it’s working test, relevance of evidence, and the principle of admissibility of declarations accompanying acts
Evolution of Res Gestae
Originally the Romans used Res gestae to mean acts are done or actus. It was described by the English and American writers as facts forming the same transaction. Res gestae are the facts that form a part of the same transaction automatically or naturally. They are the acts that speak for themselves. Due to their association with the main transaction, these facts become relevant in the nature of the fact in question. Circumstantial facts are admitted to be part of res gestae, i.e. it is part of the original evidence of what happened. Statements can also accompany physical events such as gestures. Things said or acts done in course of transaction amounts to res gestae.
Scope and ambit of Section 6 of the Indian Evidence Act, 1872
Facts that are so linked to a fact in question that they form part of the same transaction, although not in question, are relevant, whether they occurred at different times and places at the same time.
The principle embodied in law in Section 6, is usually referred to as the res gestae doctrine. The facts that can be proved as a part of res gestae must be facts other than those in question but must be linked to them. Although hearsay evidence is not admissible, it may be admissible in a court of law when it is res gestae and may be reliable proof. The reason behind this is the spontaneity and immediacy of such a statement that for concoction there is hardly any time. Such a statement must, therefore, be concurrent with the acts that constitute the offense or at least immediately thereafter.
Res gestae contains facts that are part of the same transaction. It is, therefore, appropriate to examine what a transaction is, when it begins and when it ends. If any fact does not connect to the main transaction, it is not a res gestae and therefore inadmissible. Res gestae includes elements that completely fall outside the definition of modern hearsay, such as circumstantial evidence of a state of mind, so-called “verbal acts“, verbal parts of acts, and certain non-verbal behavior.
Because excited utterances are closely connected with the event in time and the excitement flows from the event, excited utterances have been considered part of the action and therefore admissible despite the rule of hearsay. The hearsay exceptions were also hired by Res gestae for present-sense impressions, excited utterances, direct evidence of a state of mind, and statements made to doctors.
Illustrations:
An injured or injured person’s cry.
The witness’s cry to see a murder happen.
The sound of a shot of a bullet.
The person being attacked is crying for help.
Gestures made by the person dying etc.
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Definition of Transaction
A transaction, as the term used in this section, is defined as a crime, contract, error, or any other subject of inquiry that may be in question by a single name. It includes both the immediate cause and effect of an act or event and the other necessary antecedents of its occurrence at a reasonable distance of time, pace and cause and effect.
Working test for deciding a Transaction
A good working test of deciding what is a transaction is:
Unity or proximity of place,
Proximity of time,
Continuity of actions, and
Community of purpose.
Continuity of action and community of purpose must be the key test. The condition for admissibility of a statement made by a person at the occurrence scene is time proximity, police station proximity, and continuity of action. The expression does not necessarily suggest time proximity as much as action and purpose continuity.
A transaction may be a single incident occurring for a few moments or it may be spread across a variety of acts, statements, etc. All of these constitute incidents that accompany and tend to explain or qualify the fact in question, although not strictly constitute a fact in the matter. All these facts are only relevant when they are connected by time proximity, unity or location proximity, continuity of action and community of purpose or design.
Relevance of Evidence
As one and the same part of the transaction, evidence relating to the main subject matter is relevant. Two separate offenses may be so inseparably linked that the proof of one necessarily involves proving the other, and in such a case proving that one cannot be excluded from prosecution, as the other proves.
Proof of other offenses by the accused would be relevant and admissible if a nexus existed between the offense charged and the other offenses or the two acts formed part of the same transaction to fall within Section 6. Simply because it occurred at or about the same time as the Trial offense res gestae, an offense that is completely separate and disconnected is not allowable.
Relevance of Facts
Facts which are, immediately or otherwise, the occasion, cause or effect of relevant facts or facts in question, or which constitute the state of affairs under which they occurred, or which provided an opportunity for their occurrence or transaction, are relevant. Facts forming part of the same transaction are admissible in the previous section. Evidence relating to collateral facts is admissible where such facts occur, where reasonable presumption as to the disputed matter has been established, and where such evidence is reasonably conclusive. The section provides for the admission of several classes of facts related to the transaction under inquiry which are-
As being the occasion or cause of a fact,
As giving an opportunity for its occurrence,
As being its effect, and
As constituting the state of things under which it happened.
Test for Admission of Evidence under Res Gestae
First, the judge must take into consideration the circumstances in which the particular statement was made to satisfy him that the event was as unusual or beginning or fanatical as it was to dominate the victim’s thoughts, so that his statement was an instinctive reaction to that event, thus giving no real opportunity for reasoned reflection.
The statement must be so closely associated with the event that aroused the statement that it can be fairly stated that the declaring mind was still dominated by the event in order to be sufficiently spontaneous. Therefore, the judge must be satisfied that the event providing the trigger mechanism for the statement was still in operation.
With regard to the possibility of reporting facts narrated in the statement if only the ordinary error of human recollection is relied on, this goes to the weight to be attached and not to the admissibility of the statement and is therefore a matter for the jury.
The test to be used in deciding whether a statement made by a bystander or a victim indicating an attacker’s identity is admissible can be submitted as-
Was that spontaneous?
Was the identification relevant?
Has there been any real possibility of error?
Was there a concoction opportunity?
Where does the jury stand?
The admissibility test is based on the exact contemporary approach set out in the case of Bedingfield, as opposed to the flexible and accommodating approach set out in the case of Foster. It was precisely in order to resolve this ambiguity that the Privy Council gave up the test of contemporaneity in Ratten’s case and adopted the test of “spontaneity and involvement.”
In Ratten’s case, Lord Wilberforce argued that the test should not be uncertain whether making the statement was part of the transaction in some sense. This can often be hard to establish, which is why he emphasized spontaneity as the basis of the test. He said that hearsay evidence may be admitted if the statement providing it is made under conditions of involvement or pressure (always of approximate but not exact contemporaneity) that exclude the possibility of concoction or distortion to the advantage of the manufacturer or the disadvantage of the accused.
Principle of Admissibility of Declarations Accompanying Acts
The statement (oral and written) must relate to the act in question or relevant to it; it is not admissible simply because it accompanies an act. Moreover, the statement must relate to and explain the fact that it accompanies, and not independent facts previously or subsequently unless such facts form part of a continuous transaction.
The statement must be substantially at the same time as the fact and not just the narrative of the past.
The statement and the act may be made by the same person, or they may be made by another person, e.g. victim, assailant, and bystander statements. In conspiracy, it is admissible to riot the statements of all concerned in the common object.
Although it is admissible to explain or corroborate or to understand the meaning of the act, a declaration is not proof of the truth of the stated matters.
Cases
The test applied to make the evidence admissible in all the following cases was to consider that the statement was made in the spur of the moment without an opportunity to concoct and do anything. Where the judges are satisfied that the reaction was the most immediate result of the facts concerned being relevant to the circumstances, they have allowed such evidence to be admitted.
His wife and daughter were killed by the accused. Deposition of the deceased’s father that the father of the accused made a telephone call to him, saying his son had killed the deceased was not found admissible. The question before the court was that it was possible to admit the deposition of the accused father under Section 6 and is Res Gestae going to be a hearsay exception?
Failing to find out whether the information given by the accused father to the deceased’s father who killed his wife and daughter was refused to accept the evidence as relevant under Section 6 either at the time of the crime being committed or immediately thereafter to form part of the same transaction.
Both witnesses arrived in an unconscious state immediately after the incident and found the dead body of Prankrishna and wounded Nepal. One of them found Prannkrishna’s and Nepal’s mother weeping and heard from an eyewitness that their testimony was admissible under Section 6 of the Evidence Act about the whole incident and the role played by each of the appellants.
Expansion of the Doctrine of Res Gestae
Slowly, courts have extended the scope of this section to cases like domestic violence, child witness, etc. Domestic violence and cases of assault necessarily involve a surprising event, often involving the issue of excited utterances. In these cases, only victims can identify the alleged culprit. Therefore, such testimony of victims must be admitted. Cases of rape usually occur in isolation. There is therefore no eye witness to an event like this. Cases of rape and domestic violence differ from any other crime.
Conclusion
Usually, evidence is brought to res gestae if it can not be brought to any other section of the Indian evidence act. The intention of lawmakers was to avoid injustice where cases are dismissed due to lack of evidence. If any statement under Section 6 is not admissible, it may be admissible in accordance with Section 157 as corroborative evidence.
Court has always believed that this doctrine should never be unlimitedly extended. For this reason, the “continuity of transaction” test was always considered by Indian courts. Any statement made following a long gap that was not a response to the event is not admissible under Section 6 of the Evidence Act. But courts allowed some statement that was spoken after a long gap from the occurrence of the transaction because there was enough evidence that the victim was still under the stress of excitement and so everything that was said was a reaction to the occurrence.
The strength of Section 6 is its vagueness. There is no distinction in this section between the word transaction used. It varies from case to case. Every criminal case on its own merit should be judged. The evidence is admissible under Section 6 if it is proven to be part of the same transaction, but whether it is reliable or not depends on the discretion of the judge.
In this article, Akanksha Yadav, a student at Dr. Ram Manohar Lohiya National Law University, gives an overview of the right to Free and Compulsory education available under the Constitution of India. The post also suggests solutions for obstacles that are coming in the way of implementation of the right to Free and Compulsory education.
What is the importance of Free and Compulsory education?
Education is the basic requirement for the overall development of a human being. A nation can never develop without its citizens being educated as citizens play a major role in the growth of the country.
In India, a large population does not know how to read and write their own name. According to the 2004 Global Education Report released by UNESCO, India has got the largest number of illiterates with illiteracy rate being 34%. The reason for such a huge rate of illiteracy is poverty and unavailability of opportunities for the poor and needy who do not have access to education. The implementation of Free and Compulsory Education was the best initiative that could be given to the poor and needy children who are unable to get education due to the lack of resources.
Legal provisions and case laws dealing with right to Free and Compulsory Education in India
Under the Constitution of India, Right to Education was not given as a fundamental right but was included as a DPSP under Part IV of the Constitution. Article 45 of the Constitution of India which was enacted after the independence, stated that the State shall provide early childhood care and Education to all the children below six years. In February 2010 giving effect to the 86th Amendment Act, the article was substituted. The substituted article states that for a period of 10 years, the State shall provide Free and Compulsory Education to all children below 14 years.
This case has lead to the foundation of the Right to Education. In this case, Mohini Jain, a medical student filed a petition, challenging the action of a private institute which was charging higher fees from students who did not get admitted to a government seat. One of the issues raised before the Supreme Court was whether the Right to Education is guaranteed to the people by the Indian Constitution or not.
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The Court in the absence of any Constitutional Provision for the Right to Education held that ‘right to life and personal liberty’ under Article 21 includes ‘Right to Education’ as education is required for the overall development of personality without which one would not be able to enjoy one’s right to life. The purpose of the right to life is baseless without the Right to Education.
The decision given in the Mohini Jain’s case was challenged in the Supreme Court.
The Supreme Court restricted the view given in Mohini Jain’s case and held that every child has a fundamental Right to Free Education till 14 years of age after which it is limited by the State’s economic capacity and development.
Due to Unni Krishnan’s decision, Article 45 of the Constitution of India has acquired the Status of Fundamental right. It is not necessary that every fundamental right is mentioned in Part-III of the chapter.
In 2002, the 86th Constitutional Amendment Act was enacted which embarked the step towards Free and Compulsory Education in the Constitution of India. Following changes were brought by the amendment:
It inserted Article 21A which mandated the State to provide Free and Compulsory Education to children belonging to the age group of six to fourteen years.
There was substitution of Article 45 which provided that the State shall provide early care and education to all the children below 6 years.
It amended Article 51A by adding clause j to Article 51A which made it obligatory for a parent to provide education to his ward or child between 6 to 14 years.
On 1st April 2010, the legislation came into force.
Why Right of Children to Free and Compulsory Education Act, 2009 was enacted?
Right of Children to Free and Compulsory Education Act, 2009 is the enabling legislation i.e. it was enacted to give effect to Article 21A of the Constitution.
What does Right of Children to Free and Compulsory Education Act, 2009 provide for?
Right of Children to Free and Compulsory Education Act, 2009 provides for:
Free and compulsory full-time Elementary Education to a child who is below 14 years of age.
A child’s admission to an appropriate class depending on his/her age, if a child has never been admitted to any school. For keeping the child at par with other students, it also provides for special training.
Duty and Responsibility of the Government, local authority and Parents for providing Free and Compulsory Education to a child.
Norms and Standards for the school consisting capacity of children, pupil-teacher ratios, teaching hours.
Prohibition on physical punishment, mental harassment, screening procedure for qualifying the admission, any kind of fees, private tuition by the teachers and running unrecognised schools.
What is meant by ‘Free and Compulsory’ education under the Right of Children to Free and Compulsory Education Act, 2009?
Right of Children to Free and Compulsory Education Act, 2009 specifies that:
Compulsory education means the obligation of the government not only to provide Free and Elementary education to a child but also the responsibility of the Government to ensure compulsory attendance, admission and completion of elementary education of every child from 6-14 years.
Free education means that no child shall be liable to pay any kind of fees or charges which might prevent the child from attending and finishing elementary school. There shall be no direct or indirect charges on the child or his/her parents for elementary education. It is the responsibility and duty of the government to incur all the expenses for providing the elementary education to a child.
What is meant by ‘Elementary’ education under the Right of Children to Free and Compulsory Education Act, 2009?
Clause 2(f) of the Act defines ‘Elementary’ education as the education given in a school from the first to the eighth class.
Are there any special provisions for a child with disabilities?
What mechanism has been provided if there is a violation of the Right of Children to Free and Compulsory Education Act, 2009?
Under Section 13 of the Act, if any person or school:
Receives any kind of fees from the child or his guardian, will be subjected to a fine which may extend up to ten times of the fees demanded.
Makes child go through a screening procedure for the admission will be liable to pay Rs. 25,000 on the first contravention and Rs 50,000 on every subsequent contravention.
Under Chapter VI of the Right of Children to Free and Compulsory Education Act, 2009, a mechanism for the protection of rights of children has been provided. National Commission for Protection of Child Rights and the State Commission for Protection of Child Rights has been given power:
To examine, review and provide recommendations to safeguard the rights and effective implementation of the Right of Children to Free and Compulsory Education Act, 2009.
To inquire into complaints and have powers as that of Civil Courts to take necessary steps for the redressal of complaints.
Are government schools only responsible for providing Free and Compulsory Education under the Right of Children to Free and Compulsory Education Act, 2009?
No. Though major provisions have burdened the government schools with the responsibility of providing Free and Compulsory Education to the children, under Section 12(1)(c) of Right of Children to Free and Compulsory Education Act, 2009, private schools also share the responsibility. Private Schools are mandated to reserve 25% of the seats for disadvantaged children from its neighbourhood.
A writ petition was filed for bringing a common curriculum and Uniform System of Education in the state of Tamil Nadu.
The Supreme Court read Article 21A along with Article 14 and 15 and affirmed the requirement of a common syllabus and curriculum. The Court held that “under the Right to Education, right of a child need not be restricted to Free and Compulsory Education but right also extends to getting a quality education without any biases on the basis of economic, social and cultural background.”
What are the provisions in other countries for the right to Free and Compulsory Education?
China
Germany
USA
All children from 6 to 19 years mandated to attend the school.
Primary education:
6-9 years
Secondary education: 12-18 years
All children from 6 to 16 years mandated to attend the school.
Optional Kindergarten: 2-6 years
Secondary education: 6-16 years
All children from 5 to 18 years mandated to attend the school.
According to age group, a child has to attend: elementary, middle and high school.
Run by the ministry of education.
Run by the States and the federal government has a little role.
Run by both public and private schools.
Provided under Article 19, 24 and 26 of the Constitution.
Provided under Article 3,5,6,7,9,19,91b of the Constitution.
Provided under the provisions of the Human Rights Act.
What was the main goal behind the implementation of the Right to Free and Compulsory Education?
The main goal was to provide free and quality of Elementary Education to children by making it an obligation for the State and parents.
Up to what extent is the Government able to conquer the goals?
According to All India (rural report), there has been an increase in enrollment. Report facilitated by the NGO Pratham found out that there has been 96% enrollment for the age group from 6 to 14 years of age every year since 2010. The attendance patterns in the school vary from state to state. Attendance patterns based on a random visit are as follows according to the state:
What are the obstacles in achieving the goals successfully?
Quality education is not being provided in the majority of the schools that provide Free and Compulsory Education.
Though the government is providing Free and Compulsory Education, there are other expenses like transportation charges in case school is not near in the neighbourhood. Such expenses serve as a hurdle in the way of children’s education.
Many schools do not follow the stringent rule of noscreening procedure. This leads poor children to a more disadvantageous position as they are unable to compete with other able students who have received every facility since their childhood.
Even after there is a provision of 25% reservation of seats in the private schools for poor students, much effect has not been given to this provision. Many schools don’t provide admissions according to the prescribed quota. According to the Annual Status Education Report-2018, there has been no overall increase in the stats of enrollment in private schools since the year 2014.
Mainly, the focus is in the rural area and much attention is not provided for uplifting the poor and weaker children of the urban area. According to a study conducted by the Centre for Social Equity and Inclusion (Marginalised Children and their Right to Education in Delhi: A study of five communities), urban children face more deprivation from the access to education even in the presence of so many education provisions and schemes.
What can be done to overcome the obstacles?
There is a difference between being literate and being educated. The government should focus on the quality of education so that there is better development of the overall personality of children in India. According to the Annual Status Education Report -2018, the majority of children who in Standard III or above require assistance in developing foundational skills in literacy and numeracy.
The government should formulate policies for testing whether students are able to apply whatever they are taught in the schools. The government should also try to give bonus and reward points to teachers to lure them to teach better, the government could try enacting competitive policies amongst the teaching staff.
The government should focus on establishing more schools providing good education in each and every neighborhood. This will enable children to attend school without any fear of transportation charges.
The general public should try to bring to notice if any school violates the no screening procedure for the admission procedure. The government should provide reward schemes for such a revelation to the general public. Such revelations would encourage notification of such schools which violate the rule of no screening procedure given under the Right to Free and Compulsory Education Act, 2009.
The government should implement schemes and policies for ensuring that 25% of quota seats are given to the poor and weak children in private schools. The government should make a regulatory mechanism for keeping a check on private schools. For example, the government should take yearly reports and other major data of admission and education being provided under the 25% of quota and also check that such admissions are not on the basis of the screening procedure.
The government needs to put an equal check upon the urban areas and put as many efforts as it tries to uplift the rural kids.
Conclusion
After so many years of the enactment of the RTE Act, the government has failed to achieve its goal of providing elementary education to each and every child of the age group between 6-14 years of age.
I’ve visited so many places which include both urban and rural places and have seen small children working everywhere or begging for making a livelihood. Such children who don’t even have the basic requirements i.e. food, clothes and shelter, how can one suppose that they are availing the benefit of Free and Compulsory Elementary education. Though there are many welfare laws like the Juvenile Justice Act for such poor and needy children, the number of children that can be found begging on the roads or working for livelihood depicts the true picture. Until and unless the government does not ensure that other welfare legislation is being implemented in totality, the Right to Education cannot be given the full effect.
This article has been written by Diva Rai, 1st year student, Symbiosis Law School, Noida. In this article she discusses protective discrimination, it’s constitutional provisions and exceptions to it, employment discrimination law in the private sector and the concept of equality for Indian citizens.
Meaning of Discrimination
The act of differentiating between two individuals is termed as discrimination. It is the granting of some favorable position to a specific segment of a social class above others. The weaker section remained cold for a considerable length of time as nothing more than garbage in the general public. Taking one’s measure from the class or caste to which individual belongs amount to discrimination.
Protective Discrimination
The oppression of the weaker segment in the society is a well known fact to all people. The subjection of the weaker segment of the society to one or the other kind of discrimination and suppression at the hands of the advanced and the society’s dominant sections are as old as Adam. They had been suffering a lot in each and every day throughout their lives. They had been made subject to discrimination in one way or the other at stages in their life. This evil had to be nipped in the bud, however now as aftermath, it has ended up a massive tree with its roots deeply buried in the Indian society. The higher crust rules and regulations of democracy are everywhere.
The framers and makers of our constitution were thoroughly conscious about the distressed condition of these weaker sections. They tried to put their best foot forward to lift the weaker segment by offering a few special provisions within the constitution like Equality under Article 14 and Article 15 prohibiting discrimination and many more. In a number of the Articles, the framers of our constitution have provided additional privileges in favor of the weak and backward segment of the society. In other words, it means that the makers of the constitution have provided protective discrimination within the constitution.
Meaning of Protective Discrimination
The term protective discrimination implies that a right or privilege is provided in favour of those who have been oppressed and discriminated since ages. Discrimination against discrimination is based on the widely known quote “iron cuts iron”. It is clear from history that one type of discrimination is negative and destructive in nature whereas the other type is curative and protective.
Now the question arises that what constitutes the weaker section of the society? It not only includes the scheduled caste, the scheduled tribes, the other backward classes but also the female section of the society as well. Either from the high class or the low class, they have been continually facing partiality and injustice. Women have been subjected to hardships and discrimination along with the backward class. The same status as that of men in society has also not been granted to them.
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Weaker Section and Minorities
The discrimination suffered by the oppressed sections of the society such as the SC and STs over a great time period has caused the concept of protecting discrimination to protect their interests. The essential reason behind defensive discrimination is to offer essential facilities to the disadvantaged sections and to bring them to the mainstream society.
There are positive clauses in the constitution with the objective to offer equal opportunity to all by prohibiting discrimination and to taking away disparities between the privileged and underprivileged classes. However, the nation faced with the quandary that this would suggest that in the society characterised through the distinctions on the idea of caste, religion simplest who are higher positioned than the rest could get all of the benefits and the backward and repressed lessons will remain sidelined. In order to overcome this, the nation has a special duty to provide identical rights to the communities through protecting discrimination. The vulnerable section of the society includes-
Article 15 states that discrimination among the citizens on the basis of race, caste, religion, place of birth, sex or any other grounds shall not be done by the state.
Discrimination among citizens cannot be done by the state is its general principle.
Equality of opportunity for all citizens is guaranteed in the matters of appointment or employment to any post under the state.
Under the State no citizen should be discriminated on the basis descent, religion, caste, race, place of birth, sex or residence and be ineligible for or against any office or employment as stated in Clause(2).
This article forbids untouchability and its practice in any form.
Enforcement of a disability that arises due to untouchability with accordance to law is a punishable offense.
Exceptions
The above mentioned constitutional provisions offer for a general rule that the State cannot discriminate amongst its residents. But as we all are aware that the weaker sections were left miles behind because they were forced to suffer discrimination. Some articles of the Constitution provide for the exceptions to non-discrimination general rules so as to bring the weaker sections at par with the other sections of society. In a number of the articles, protective discrimination has been furnished in the constitution.
Added by the 93rd Constitution Amendment Act, 2006 provides that nothing in Article 15 or in sub-clause (g) of Article 19 shall prevent the State from making any special provision, by regulation, for the advancement of any socially and educationally backward lessons of citizens or for scheduled caste or scheduled tribes. Such unique provisions relating to admission to an educational institution and are inclusive of non-public educational establishments, whether or not aided or unaided by using the state, other than the minority educational establishments referred to in clause (1) of Article 30.
This article allows the State to make certain provisions for the reservation of posts in government jobs in favor of any backward training of citizens which, in the State’s opinion, is not always competently represented within the State’s services.
Article 16(4-A)-
This article introduced by means of the 77th Amendment, 1995 empowering the State to make any reservation provision in matters of promotions for SC and ST that, in the State’s opinion, are not accurately represented within the State’s services.
This article gives reservation of seats for the scheduled caste and the scheduled tribes in legislative assemblies of all the states except the scheduled tribes that are within the autonomous district of Assam.
Protective Discrimination under DPSPs
Articles 40, 42, and 45 under the Directive Principles of State Policy, strive to provide numerous benefits to the weaker sections. These include reservation in panchayats for ladies and backward classes, prevention of exploitation of children and free pregnancy care and delivery. Taking unique care in the promotion of social and academic hobbies of the weaker sections mainly the SCs and STs enjoins the State by Article 46 so as to protect them from injustice.
No provision made underneath Article 46 may be challenged because it violates the Fundamental Rights given in Part III of the Indian Constitution. The Supreme Court has directed the States to attempt and strive to enforce Article 44 ensuring identical treatment of women under all religions.
Employment Discrimination Law in the Private Sector
Zeeshan Khan a Muslim MBA student had been refused employment by Hari Krishna Exports Pvt. Ltd. which is a private company on the grounds that he is a Muslim. On the grounds of religious discrimination, a case was registered by the police. This case attracted a lot of media attention.
The question that arises is whether or not the law in opposition to nonsecular or religious discrimination be applicable to a private agency. Also, whether an offense could be registered against the said private business enterprise on the basis of religious discrimination?
(i)- No Constitutional Protection: Under Article 14 of the Indian constitution, it is emphatically said that “the State shall not deny to any person equality before the law or the equal protection of the laws”. Discrimination on the basis of religion alone is prohibited by the state in Article 15. In matters of employment under the state, discrimination on the basis of religion is prohibited by Article 16, so as to protect Indian citizens.
As defined by Article 12, the term “State”, of the Constitution, includes “the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India”. Therefore the fundamental rights as contained in Articles 14, 15 and 16 cannot be applied in cases of a private company.
(ii)- Criminal Sanctions: Under the provisions of IPC (Indian Penal Code), 1860 to publish in written form is an offense that a person ought to be deprived of their rights as citizens of India with a motive in their being a member of a specific spiritual institution or religious group.
New Concept of Equality for Indian citizens
In the case of the Air India v. Nargesh Meerza, Regulation 46 of the Indian Airlines regulations gives that an air hostess may resign from the transporter after accomplishing the age of 35 years or on marriage inside four years of administration or on first being pregnant, whichever happens prior. Regulation 47 Of Air India Employees Service Regulations 47 demonstrates the managing director had the attentive to extend the time of retirement 365 days on end past the period of retirement as much as the age of 45 years at his option if an air entertainer was found restoratively fit. It was held by the court that an air hostess on the grounds of pregnancy, transformed into arbitrary and discretionary, it become the infringement of Article 14. There was no ground why the first pregnancy should remain in the way of her services. The court said that the end of services on the grounds of pregnancy was extremely outlandish and self-assertive on the possibility of this it becomes an infringement of Article 14 the Constitution.
The Court expressed its opinion on the subject of the Uniform Civil Code in John Vallamattom v. Union of India. Section 118A’s constitutional validity was challenged by a 1925 Indian Succession Act Christian priest. He claimed it was unfairly discriminatory against Christians for placing unreasonable restrictions on their ability to remove land for religious and charitable purposes as donations. A Supreme Court tri-judicial bench consisting of Chief Justice V.N. Khare and A.R. Lakshmanan and S.B. Justices. Sinha, the provision was found to be in breach of Article 14 of the Constitution.
Chief Justice Khare commented that Article 44 provides that the State shall endeavor to ensure a uniform civil code for all citizens throughout India. It is a matter of great regret that Article 44 of the Constitution has not been implemented. The Parliament has yet to take steps to frame the country’s common civil code. By removing contradictions based on ideologies, the Common Civil Code will help the cause of national integration.
Conclusion
Though the general rule laid down in the Indian constitution provides and presents that each and every resident of India is the same and he/she cannot be discriminated on the basis of race, caste, sex or location of birth. Some of the exceptions are also provided as to that general rule that speaks of protective discrimination. Weaker section of the society has been lagging in the race of life, so for their upliftment and safety and to bring them at the equal fame with different sections of society protective discrimination is the primary requirement of our democracy. Since the country has attained independence, there has been a great change in the condition of the weaker sections but the ultimate destination still remains miles away.
As a diploma course, it tends to provide a practical insight for solving a problem relating to the subject matter by providing real life or hypothetical situations where the student has to, based on the concept and previous judgements, solves these situations. Here, in this situation, a company, Savdhaan insurance brokers limited having its registered office in Mumbai is looking to receive foreign direct investments from InsureWel Inc. having its registered office in New York. Its share capital consists of INR 2 crores consisting of 20 lacs equity shares.
Introduction
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