Common Law

Specific Relief Act, 1963, a Quick Summary

2012-01-22T02:39:00.000-08:00

DISPUTES
ARISING IN THE REGULAR COURSE OF ANY BUSINESS ACTIVITY / TRADE RELATIONSHIP;
IN THE PERFORMANCE / EXECUTION OF CONTRACTS / AGREEMENTS / OTHER BUSINESS OBLIGATIONS.

(i) Where a person, who is entitled to the possession of any specific movable property, by virtue of being a owner of such specific movable property or by virtue of having a special or temporary right to possess such specific movable property, and who is unlawfully refused / denied to the possession of such specific movable property, may by virtue of Section 7 of the Specific Relief Act, 1963, recover the said specific movable property, by filing a Suit for the recovery of said specific movable property. [Movable property will include all kinds of goods, things – valuable and invaluable]

(ii) The Principal may compel the Agent to deliver any movable property, which is held by the Agent on behalf of the Principal; or a person who is holding any movable property as a trustee of another, by virtue of Section 8 of the Specific Relief Act, may be compelled by that another to deliver that movable property, by filing a Civil Suit in this regard.

(iii) Where any movable property is wrongly transferred to some other person, the same may be recovered, by virtue of Section 8 of the Specific Relief Act, by filing a Civil Suit.

(iv) Where a person against whom a Suit is filed, is making frivolous defences / defences untenable in law, he may be stopped / precluded from taking any such defences, by virtue of Section 9 of the Specific Relief Act, 1963.

(v) Where a party to the Contract is evading in performing his part of the Contract, thereby seriously prejudicing the other contracting party, the said other contracting party, by virtue of Sections 10, 12, 14(3), 19, 21, 22, 23, 42 and subject to Sections 14, 16, 17, 18, 20, 24, may by filing a Suit for Specific performance,

(a) cause the said defaulting party to perform his part of the contract; and
(b) may also seek damages in addition to Specific performance; or
(c) may seek damages in lieu of Specific performance; and
(d) can also seek additional damages for breach of Contract.
(e) The party enforcing specific performance of the contract, by virtue of Section 29 of the Specific Relief Act, in the alternative of specific performance, may seek rescission (cancellation) of the contract in case specific performance is refused by the court.

(vi) Where a person, who has purchased goods / movable property, from a person who has no title or has imperfect title to the said goods / movable property, the said purchaser, by virtue of Section 13 of Specific Relief Act, 1963, has a right and he –
(a) May compel the said other person to make good the title where in future the said other person acquired the title to such goods / movable property;
(b) May compel the said other person to procure the concurrence of a person whose concurrence will validate the title of the purchaser;
(c) Where in a case, the Seller had filed the Suit for Specific performance of the contract, and his said Suit is dismissed for want of title or imperfect title, the purchaser in the said Suit, (a) can claim the refund of his amount paid over said goods / movable property and (b) can also recover interest on the said amount paid including costs of the Suit.

(vii) Where the contracting parties find, that, either due to mutual mistake or due to fraud of one of the party, the contract entered into between them, in effect and in scope, does not convey the true purport it was intended and the contract is very different from what they had really agreed to, then, either of the contracting parties, by virtue of Section 26 of the Specific Relief Act, may institute a Suit for rectification of said defective instrument / contract, or the parties may in any existing Suit pray for such rectification.

The court may in its discretion, direct the rectification of the instrument so as to express that intention, so far as this rectification can be done without prejudice to the rights acquired by third party in good faith and for value.

Once the instrument is duly rectified by the Order of the Court, then, the said instrument may be specifically enforced by any of the contracting party.

(viii) Where consent to an agreement is obtained by coercion, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so obtained; and where both the parties to an agreement are under a mistake of fact essential to the agreement, the agreement is void. In such situation the defrauded party, by virtue of Section 27(1), subject to Section 27(2), has three remedies open to him, namely –
• He may rescind the contract absolutely and sue to recover the consideration parted with upon the fraudulent contract; or
• He may bring an action to rescind the contract and in that action have full relief; or
• He may retain what he has received and bring an action to recover the damages sustained.

The rescission of contract can also be sought of unlawful and terminable contracts.

(ix) Where written instruments / contracts, partially or wholly, originally valid, becomes inefficacious by subsequent events, such as, by satisfaction or payment, or other causes; and its existence casts either a cloud upon the title of the party or subject him to the danger of some future litigation; under such and like circumstances, the said party, by virtue of Section 31 and 32 of the Specific Relief Act, may file a Suit to declare the said whole or partial of the Written Instrument / contract, as void or voidable and get it cancelled.

(x) Where a person is entitled to a legal character (Director of a Company) or to any right as to any property and any person is denying or interested to deny such entitlement, then, by virtue of Section 34 of the Specific Relief Act, the said aggrieved person may file a Suit for declaration by the Court that he is entitled for said legal character or is entitled to that property.

(xi) Where a person who has invaded or is threatening to invade the rights, legal or equitable, of another, the aggrieved person, by virtue of Section 36, 37, and 38 and subject to Section 41, of the Specific Relief Act, may file a Suit for temporary and permanent injunction.

By virtue of Section 40 of the Specific Relief Act, 1963, the aggrieved person, in addition to or in lieu of aforesaid injunction, may seek damages.

Injunction is a form of relief given, to prevent a party from doing which he is under an obligation not to do, or called upon to do a certain act, which he is under an obligation to do.

(xii) Where to prevent the immediate and imminent breach of an obligation, the obligation whether arising from contract or Statute, and where it is necessary to compel the performance of certain acts, which the court is capable of enforcing its performance, then, by virtue of Section 39 of the Specific Relief Act, a Suit for Mandatory injunction may be filed for the issuance of said injunction.

DISPUTES RELATING TO IMMOVABLE PROPERTIES, i.e. Land, flats etc.

The obligations of Seller and the buyer of immovable property are set forth in Section 55 of the Transfer of Property Act, 1888.

Under the law, three distinct actions could be brought for the recovery of specific immovable property, namely –
1. A Suit based on title by Ownership;
2. A Suit based on possessory title;
3. A Suit based on the strength merely of previous possession, in the case of a wrongful ouster, i.e. without following the due process of law, of a person without his consent.

I. When a cloud is raised over a person’s title and he does not have a possession, a Suit for declaration and possession, with or without a consequential injunction is the remedy;
II. Where a person’s title is not in dispute but he is out of possession, he has to sue for possession and consequential injunction;
III. Where there is merely an interference with a person’s lawful possession or where there is a threat of dispossession, it is sufficient to sue for an injunction simpliciter. Anathula Sudhakar versus P Buchy Reddy – AIR 2008 SC 2033 (2039).

(1) WHERE THE BUILDER / DEVELOPER IS EVADING IN PERFORMING HIS PART OF THE CONTRACT, thereby seriously prejudicing the interests of the Purchaser, the Purchaser, by virtue of Sections 10, 12, 14(3), 19, 21, 22, 23, 42 and subject to Sections14, 16, 17, 18, 20, 24 of the Specific Relief Act, 1963, may by filing a Suit for Specific performance, cause the said Builder / Developer to perform his part of the contract and may also seek damages in addition to Specific performance, or may seek damages in lieu of Specific performance; and can also seek additional damages for breach of Contract.

Where despite a decree for specific performance, the purchaser fails to pay the purchase money, or any other sum which the court has ordered him to pay, the Builder / Developer, by virtue of Section 28 of the Specific Relief Act, may apply in the same Suit to declare the contract rescinded.

The party enforcing specific performance of the contract, by virtue of Section 29 of the Specific Relief Act, in the alternative of specific performance, may seek rescission of the contract in case specific performance is refused by the court.

(2) WHERE ONE IS FORCIBLY / UNLAWFULLY DISPOSSESSED FROM HIS LAWFUL POSSESSION –A civil suit u/s 6 of Specific Relief Act, 1963, may be filed before the District Court / High Court for immediate restoration of possession to the person who was in lawful possession.
(3) WHERE ONE IS ANTICIPATING FORCIBLE / UNLAWFUL DISPOSSESSION FROM HIS LAWFUL POSSESSION / OR TO PREVENT TRESSPASS OF IMMOVABLE PROPERTY –
(i) A Civil Suit u/s 35 of the Specific Relief Act, 1963 may be filed thereby seeking declaration to the effect that the person in possession is entitled to the present possession;

(ii) A Civil Suit u/s 39 of Specific Relief Act, 1963 may be filed for Mandatory Injunction against the person who intends to unlawfully dispossess.

(4) IN AN AGREEMENT FOR SALE / PURCHASE OF IMMOVABLE PROPERTY, WHERE ANY PARTY REFUSE TO PERFORM HIS PART OF PROMISE SO MADE IN THE AGREEMENT / CONTRACT.
(i) Where the Seller is evading in performing his part of the Contract, thereby seriously prejudicing the interests of the Purchaser, the Purchaser, by virtue of Sections 10, 12, 14(3), 19, 21, 22, 23, 42 and subject to Sections14, 16, 17, 18, 20, 24 of the Specific Relief Act, 1963, may by filing a Suit for Specific performance, cause the said Seller to perform his part of the contract and may also seek damages in addition to Specific performance, or may seek damages in lieu of Specific performance; and can also seek additional damages for breach of Contract.

Where despite a decree for specific performance, the purchaser fails to pay the purchase money, or any other sum which the court has ordered him to pay, the Seller, by virtue of Section 28 of the Specific Relief Act, may apply in the same Suit to declare the contract rescinded.

The Purchaser enforcing specific performance of the contract, by virtue of Section 29 of the Specific Relief Act, in the alternative of specific performance, may seek rescission of the contract in case specific performance is refused by the court.

(ii) A Suit comprehensive, Suit for the Registration of the Sale Deed and for recovery of possession, is not barred on the ground that a statutory alternative remedy of registration is available under section 77 of the Registration Act. An Agreement for transfer of property implies a contract not only to execute the deed of transfer but also to appear before the Registering Officer and to admit execution thereby facilitating the registration of the document wherever it is compulsory. AIR 1999 SC 2958 (2961).

(iii) Where a person, who has purchased goods / movable property, from a person who has no title or has imperfect title to the said goods / movable property, the said purchaser, by virtue of Section 13 of Specific Relief Act, 1963, has a right and he –
(a) May compel the said other person to make good the title where in future the said other person acquired the title to such goods / movable property;
(b) May compel the said other person to procure the concurrence of a person whose concurrence will validate the title of the purchaser;
(c) Where a mortgaged property is sold as a unencumbered property, the purchaser may compel the Seller to redeem the mortgage and obtain a valid discharge, and if necessary, a conveyance from the mortgagee;
(d) Where in a case, the Seller had filed the Suit for Specific performance of the contract, and his said Suit is dismissed for want of title or imperfect title, the purchaser in the said Suit, can claim the refund of his amount paid over said goods / movable property and can also recover interest on the said amount paid including costs of the Suit.

(iv) Where consent to an agreement is obtained by coercion, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so obtained; and where both the parties to an agreement are under a mistake of fact essential to the agreement, the agreement is void. In such situation the defrauded party has three remedies are open to him, namely –
• He may rescind the contract absolutely and sue to recover the consideration parted with upon the fraudulent contract; or
• He may bring an action to rescind the contract and in that action have full relief; or
• He may retain what he has received and bring an action to recover the damages sustained.

(v) Where written instruments / contracts, partially or wholly, originally valid, becomes inefficacious by subsequent events, such as, by satisfaction or payment, or other causes; and its existence casts either a cloud upon the title of the party or subject him to the danger of some future litigation; under such and like circumstances, the said party, by virtue of Section 31 and 32 of the Specific Relief Act, may file a Suit to declare the said whole or partial of the Written Instrument / contract, as void or voidable and get it cancelled.

(vi) Where a person is entitled to an immovable property and any person is denying or interested to deny the such entitlement, then, by virtue of Section 34 of the Specific Relief Act, the said aggrieved person may file a Suit for declaration by the Court that he is entitled for said immovable property.

(vii) Where to prevent the immediate and imminent breach of an obligation, the obligation whether arising from contract or Statute, and where it is necessary to compel the performance of certain acts, which the court is capable of enforcing its performance, then, by virtue of Section 39 of the Specific Relief Act, a Suit for Mandatory injunction may be filed for the issuance of said injunction.

SANDEEP JALAN
MUMBAI.

Power of Attorney - Some aspects

2012-01-12T20:17:00.000-08:00

POWER OF ATTORNEY [POA]

A person who authorizes another to act in his behalf is said to grant that another a “power of Attorney”. POA is a written agreement establishing a relationship between two persons, allowing the latter to act on behalf of the former. POA is a written authority, executed by a person, empowering the person named therein, to do some positive acts on behalf of the executor, such acts which otherwise could be done by executor only. The person who gives the power is called the “Donor” or “Principal” and to whom the power is given is called the “Donee” or the “Attorney”.

Black’s dictionary: the instrument by which a person is authorized to act as an agent of the person granting it.

POA holder is in fact an agent of the “Donor” of the power, as defined u/s 182 of the Indian Contract Act, 1872 and Section 182 to 238 of the said Act are applicable to issues related to POA.

POA ordinarily are of two types – General and Special. A General POA authorizes the Attorney to act on behalf of his Principal in all matters of a particular nature, or generally in respect of a particular business. A Special POA authorizes the Attorney to represent his Principal only in respect of some particular specified acts mentioned in the document so executed in that behalf.

INTERPRETATION OF POA
Like any other document, a POA may also need judicial interpretation in the facts and circumstances of each case. In order to ascertain the extent of power give, one has to look at the manner in which the power is given to the Attorney and the purpose for which the power is given. Syndicate Bank, Bangalore versus Amitha – AIR 1985 Karn 213.

Justice Subba Rao in Dasappa Nayanim versus Rabha Kula Ramiah – AIR 1952 Mad 559 – referred to with approval, the principle governing construction of POA as stated in “Bowstead on Agency” reading as follows – “POA must be strictly perused, and are construed as giving only such authority as they confer expressly or by necessary implication. The following are the most important rules of construction –
(i) The operative part of the deed is controlled by the recitals.
(ii) Where authority is given to do particular acts, followed by general words, the general words are restricted to what is necessary for the proper performance of the particular acts.
(iii) General words do not confer general powers, but are limited to the purpose for which the authority is given, and are constructed as enlarging the special powers when necessary and only when necessary for that purpose.
(iv) The deed must be constructed so as to include all medium powers necessary for its effective execution.

Also See –
(1968) MLJ 574;
Ramanathan Chetty versus Bank of Bengal – (1914) 23 Ind Cas 516;
Devakushai N Mankar versus Rajesh Builders – AIR 1997 Bom 142.

Donee’s acts in excess of power given does not bind the principal. Malaiperumal Chettiar versus Arunachalla Chettiar – (1917) 14 Ind Cas 225.

Power to execute Sale Deed, admit execution does not include power given to enter into Agreement to Sell. Thakur Prasod Singh versus Syed Yahya Hossain – (1912) 16 CLJ 119.

Power to borrow does not give power to mortgage. Narayandas versus Chandrabhan – (1918) 48 Ind Cas 959; Solema Bibi versus Hafez Mohammed Hossein – AIR 1927 Cal 836.

REVOCABILITY OF POA
The mere use of the word “Irrevocable” in the POA will not make the POA irrevocable, unless its terms disclose that it created an agency coupled with interest in favour of the Attorney. Corporation Bank, Bangalore versus Lalitha H Holla – AIR 1994 Karn 133 (139); AIR 1985 AP 30.

Irrevocable POA cannot be revoked if consideration is paid. H L Malhotra versus Nanak Jai Singhani – 1986 RLR (note) 89; Harbans Singh versus Shanti Devi – 1976 RLR 487 (DB).

The revocation may be express or may be proved by conduct. Whenever it is claimed that POA was revoked, the burden of proving is on the Principal to satisfy the court that the person who is relying on the POA had sufficient knowledge of the revocation of the said POA.

RETROSPECTIVE RATIFICATION OF ACTS BY POA
When certain acts are done by a person on behalf of another, but without his knowledge and authority, he may elect to ratify or to disown such acts. If he ratifies them, the same effect will follow as if they had been performed by his authority. Section 196 of Indian Contract Act, 1872.

The ratification may be express or may be inferred from the conduct of the principal on whose behalf such acts are done. Section 197 of Indian Contract Act, 1872.

CANCELLATION OF POA:
Clara Auroro de Branga nca versus Sylvia Angela Alvares – AIR 1985 Bom 372 – Section 31 of Specific Relief Act may be resorted to.

Repeal of previous POA: Section 207 of the Indian Contract Act, 1872 – Amrit Singh versus Soham Singh – (1988) 93 Punj LR 541.

ROLE OF POA IN LITIGATIONS
In T C Mathai versus Dist and Sessions Judge, Thiruananthpuram – AIR 1999 SC 1385 – it was held that a POA holder cannot become a pleader for the party in criminal proceedings, unless the party secures the permission of the court to act in such proceedings.

Defects in POA: it was held that even assuming that there is any defect in POA, since it is a curable defect, it does not warrant the rejection of the Plaint under O.7 R.11 of CPC – S C Bose & Co versus G Srikanth – AIR 2006 AP 337.

A POA holder cannot give evidence on behalf of his principal – Mahendra Pratap Singh versus Padam Kumari Devi – AIR 1993 All 143;

Shantidevi Agarwal versus V H Lulla – AIR 2004 MP 58 – it was a case where the court held that the old age of the Plaintiff is a good ground that her son, the POA holder should have been allowed to tender evidence on her behalf.

Pleadings can be very much signed by the Bank through its officer and not through its Attorney. Union Bank of India versus Naresh Kumar – AIR 1997 SC 3 – O.6 R.14 and O.29 R.1 when read together, it would appear that even in the absence of any formal letter of authority or POA, by virtue of the office which the Bank officer holds, he can sign and verify pleadings on behalf of the corporation. A corporation can ratify the said action of its officer. Such ratification can be express or may be implied.

Section 138 and POA: Examination of POA holder u/s 200 of CrPC – Section 142 of NI Act 1881 – K M Moregowda versus S H ex- Import Corporation – 2004 CrLJ 4119 – paras 21 and 22 very imp –

In the case of Bhimappa versus Allisab – ILR 2006 Karn 3129 – a learned Single judge of the Karnataka HC has observed thus – while dealing with the competence of a person to testify as a witness before court as a POA holder.

There is no merit in the submission that a POA holder cannot file a complaint or enter the witness box to depose onm behalf of the complainant – A sathyanarayanan versus Sri K Selvan – ILR 2008 Karn 2650.

REGISTRATION OF POA
A POA is A document within the meaning of Section 17 of the Indian Registration Act, 1908 which provides certain kinds of documents must be registered before the competent Registrar to get its validity and sanctity in the eyes of law. Therefore, all POA which falls within the subjects of Section 17 of said Act would required to be registered, failing which they are not valid.

When the POA is not registered the holder is not competent to execute Regd Sale deed - Manjunath Anandaapa versus Tannensesa – AIR 2003 SC 1391.

Plaintiff cannot be granted injunction against defendant. (sale of Immovable Property by way of POA). Ajit Narain versus Aarti Singh – 81 (1999) DLT 355.

POA must be executed in favour of a single person. It cannot be executed in favour of several persons. Chandigarh Administration versus Johnson Paints & Varnish Company – AIR 1996 SC 3318.

POA cannot personally sue or be sued when he is acting on behalf of the Principal or the donor. Principal s liable for all lawful acts of the POA holder. (1986) 1 Cutt LJ 46.

EXECUTION OF POA
Photograph of both the donor and donee is to be affixed and they both has to put their left thumb impression along with the signature.

A POA needs to be attested by two witnesses.

Usual mode of execution of POA is that the donor of power execute the document in the presence of two witnesses and then the Donee accepts the power and signs it.

A POA is to be executed on Stamp paper of Rs.100 or 500 depending on the nature of power given to the attorney. In Maharashtra, such rate is governed by Bombay Stamp Act, 1958, Schedule 1, Serial No.48.

A foreign national or an Indian living outside India and who wish to execute a POA, may execute the same by – (a) the “donee” (receiver) of power residing in India, will, according to the instructions of the “Donor”, prepare the POA on the Stamp paper of Rs.100 or 500, affix his photo, send the document to the person living abroad; (b) the person living abroad may execute the said POA by affixing his photograph and sign the said POA and left thumb impression, in the presence Indian Consul or representative of the Central Govt, and in the presence of two witnesses; (c) and send back said POA to the “donee”; (e) the donee on receiving the said POA, may execute the same before Notary, by signing and putting his/her left thumb impression.

A perusal of Section 85 of Indian Evidence Act, 1872, shows that the court must presume that a POA duly authenticated by a Public Notary or any court, Indian Consul or representative of the Central Govt was validly executed and authenticated.

Sandeep Jalan
Mumbai.

Stare decisis and Precedent value of a Judgment

2011-11-29T19:00:00.000-08:00

Stare decisis is a latin phrase which means “to stand by decided cases”. Stare decisis embodies an important social policy of certainty and continuity. The practice of following precedents enables citizens to plan their conduct in the expectation that past decisions will be honoured in the future.

The burden of stare decisis doctrine is that a judge in a later case is bound by the ratio decidendi of the earlier decision. The distinction between ratio and obiter is undoubtedly of great importance. If the court thinks that an issue does not arise, than any observation made with regard to such an issue would be purely obiter dictum.

The Apex court in the case of Govt of AP versus A P Jaiswal emphasized upon the need for courts to follow the principles of stare decisis and observed – consistency is the cornerstone in the administration of justice. The doctrine of binding precedent has the merit of promoting certainty and consistency in judicial decisions and enables organic development of law, besides providing assurance to the individuals as to the consequence of transaction forming part of his daily affairs. (2001) 1 SCC 748.

In order to understand and appreciate the binding force of a decision, it is always necessary to see what were the facts in the case in which the decision was given and what was the point which had to be decided. An isolated sentence in a judgment cannot be regarded as a full exposition of law. A decision cannot be relied upon in support of a proposition that it did not decide.

There appears to be some controversy as to what is meant in legal parlance when it is said that a case is binding. In B Shama Rao versus UT of Pondocherry, AIR 1967 SC 1480 at page 1487, Justice Shelat observed that a decision is binding in subsequent cases, not because of its conclusion but in regard to its ratio and the principles laid down therein.

In order to have a correct perception of the ratio decidendi of a case, it is necessary to have a close look at the structure of the judgment itself. It is not everything said by a judge has the force of a precedent. Ratio decidendi of a case is the principle of law that decided the dispute in the facts of the case, i.e. the reasons advanced by the court for its decision.

In Sanjay Singh versus U P Public Service Commission – (2007) 3 SCC 720 – the SC held that broadly speaking every judgment of a Superior court has three segments namely -
• The facts and the point at issue;
• The reason for the decision;
• The decision.

It is said that a decision should be read with reference to and in the context of the particular statutory provisions interpreted by the court – MCGB versus BPCL – (2002) 4 SCC 219.

A classic case on the subject of ratio decidendi is an English case of Harper versus National Coal Board. Lord Denning M R observed – We can only accept a line of reasoning which supports the actual decision of the House of Lords.

In U P Gram Panchayat Adhikari Sangh versus Dayaram Saroj – the SC held that judicial discipline is self discipline. Judicial discipline demands that when the decision of a coordinate bench of the same HC is brought to the notice of the Bench, it is to be respected and binding, subject of course, to the right to take a different view or to doubt the correctness of the decision and the permissible course then open is to refer the question or the case to a larger bench. This is the minimum discipline and decorum to be maintained by judicial fraternity. (2007) 2 SCC 138.

If a HC judge is referred to a relevant decision of the SC, the strict doctrine of precedent would oblige him to ascertain the ratio decidendi and apply it to the operative facts on hand. A judgment of the HC which refuses to follow the decision and direction of the SC, is a nullity. Director of Settlements, AP versus M R Apparao; UOI versus Kantilal H pandya – (1995) 3 SCC 17; (2002) 4 SCC 638.

In the case of Dr Dinesh Kumar versus Motilal Nehru Medical college (1990) 4 SCC 627 – the SC said – the directions of the SC are not intended to be brushed aside and overlooked or ignored. Meticulous compliance is the only way to respond to directions of this court.

Yet the SC is not bound by their own decisions. The clearest pronouncement of the Supreme Court on the subject of precedent is the Bengal immunity case wherein it unanimously ruled that in constitutional matters SC would not consider itself bound by the orthodox doctrine of precedent. Consequently it was held in that case that Article 141 of the Constitution of India cannot be interpreted in the narrow sense so as to make decision of the SC binding upon itself.

Keeping in view judicial discipline and propriety, if two judge bench finds a judgment of three judge bench to be so incorrect in cannot be followed in any circumstances, the proper course would be to refer the matter before it to another bench of three judges. Pradip Chandra Parija versus Pramod Chandra Patnaik – (2002) 1 SCC 1.

In the case of Vineet Narain, the Hon’ble SC held that in the absence of appropriate legislations and executive orders, in matters of public importance and urgency, the SC can issue orders and directions to fill the gap for enforcement of the fundamental rights and doing complete justice in the cause. (1998) 1 SCC 226.

JUDICIAL DIRECTIONS CANNOT BE ANNULLED BY AN ACT.
S S Bola versus B D Sardana – (1997) 8 SCC 522
PUCL versus UOI – (2003) 4 SCC 399
M C Mehta versus UOI – (2002) 4 SCC 356

Privy council decisions are binding on the HC as long as the SC does not overrule them – Pandurang Kalu Patil versus State of Maharashra (2002) 2 SCC 490.

However, fraught with daily crop of sometimes inconsistent judicial affirmations, the HC judges are sometimes called upon to undertake what at times proves to be impossible or illusory task of ascertaining the ratio decidendi of SC decisions in order to be bound by them. Though as a matter of strict legal theory, a HC judge is obliged to adopt and apply ratio decidendi of a precedent decision, in actual practice the things are not so simple. The authority may overlap, or even conflict with another of equal weight.

In Haryana financial corp versus Jagdamba Oil Mills, the Hon’ble SC held that courts should not place reliance on the decision without discussing as to how the situation fits in with the factual situation. (2002) 3 SCC 496 : AIR 2002 SC 834.

In Sumtibai versus Paras Finance Co – (2007) 10 SCC 82 – the SC held that “what is of the essence in a decision is its ratio and not every observation found therein nor what logically follows from the various observations made in it.

In the case of Girnar Traders versus State of Maharashtra – (2007) 7 SCC 555 – the SC further held that only the ratio decidendi can act as the binding or authoritative precedent and reliance placed on mere general observations or casual expressions of the court is not of much avail.

General observation in decision of the SC: should be confined to the facts of those cases. Any general observation cannot apply in interpreting the provision of an Act unless the SC has applied its mind to and analysed the provisions of that particular Act.
Raval & Co versus K G Ramachandran – AIR 1974 SC 818 at p. 821: (1974) 1 SCC 424.

Landmark decisions on judicial exposition of law –
Gregg versus Georgia – 49L Ed 2d 859.
Coker versus Georgia
Director of Public prosecutions versus Lynch

Sandeep Jalan
Advocate
Mumbai.

How to deal with whims and fancies of Managing Committee of Coop Hsg Societies

2011-11-14T20:49:00.000-08:00

This Blog has originated in the backdrop of ensuing dispute between the Managing Committee of a Coop Hsg Society and one of my client and letter recorded by me to the said Managing Committee. It may be beneficial to read this Blog, so as to effectively deal with all the fanciful behaviour of Managing Committee of Coop Hsg Societies.

Date: …………..

To,
Shri ………….,
Hon. Secretary
…………. Apartment Co-operative
Housing Society Limited,
……………………………,
Mumbai – ……………...

Reference
Society letter dated ……………..

Subject
Transfer of Shares and interest of the deceased member ………………… , in the name of Mr…………., the legal heir of the said deceased Member of the Society.

Schedule of property
Share Certificate No…, distinctive Nos……….., …………. Apartment, A-Wing, Flat No……, ….. floor, …………. Road, ……………, Mumbai – ………….

Dear Sir,

I am writing to you under authority and instructions & information received from my client Mr………….., permanently residing at Apartment, Mumbai – , one of the nominee and the uncontested legal heir of the deceased Member…………… of the Society.

My client has placed on my hand, inter alia, the copy of legal opinion dated ……….., obtained by the Managing Committee from Learned Advocate / Solicitor ………. The said legal opinion was obtained by Managing Committee in consequent to Application dated ……….. submitted by my client being a legal heir, for the transfer of shares and interest of the deceased member in his name.

And so as to have very clear understanding of every issue involved in the case at hand, and so that the main points emphasized in this long letter is not lost sight of, I have penned an Index wherein each issue separated with appropriate heading. Every sentence is employed with great care and caution and the Managing Committee is therefore requested and strongly advised to read every part and every sentence of this long letter very carefully so as to have the correct picture of the whole case and thus can adopt the correct course of action.

INDEX

SR.NO. PARTICULARS
PAGE NO.
1 RELEVANT PROVISIONS OF LAW ENSHRINED UNDER MCS ACT 1960, MCS RULES 1961 AND THE BYE LAWS 3 TO 6
2 FACTS OF THE CASE 7 TO 8
3 INFIRMITIES IN THE LEGAL OPINION 9 TO 10
4 JUDGMENT ON SOCIETY ASKING FOR SUCCESSION CERTIFICATE / PROBATE / LETTERS OF ADMINISTRATION 11
5 ILLEGALITIES COMMITTED BY THE MANAGING COMMITTEE 12 TO 14
6 JUDGMENT ON “A SOCIETY CANNOT ARBITRARILY REFUSE TO MAKE PERSON A MEMBER
15
7 RECORDING OF REASONS / INTERPRETATION OF LAWS 16 TO 24
8 SUBMISSIONS 25 TO 26
9 JUDGMENTS ON COMPULSORY TRANSFER OF SHARES AND INTEREST OF THE DECEASED TO THE NOMINEE 27
10 LEGAL EXPECTATIONS FROM THE MANAGING COMMITTEE 28
11 CONSEQUENCES THAT MAY FOLLOW IF LEGAL EXPECTATIONS ARE NOT COMPLIED WITH 29
12 JUDGMENTS ON WHO TRY TO MISLEAD THE COURT AND WHO PROLONG THE LITIGATION 30 TO 32
13 JUDGMENTS ON IMPOSITION OF HEAVY COSTS ON LITIGANTS TAKING FALSE DEFENSES / PLEAS 33
14 MY CLIENT’S FINAL WORDS 34
15 ANNEXURE “A” TEXT OF MCS ACT, RULES AND BYE LAWS 35 TO 43
16 ANNEXURE “B” COPY OF JUDGMENT ON SUCCESSION CERTIFICATE

RELEVANT PROVISIONS OF LAW
AT THE OUTSET, my client says and submits that all the issues that arises in the present case are adequately, sufficiently and in very clear language answered in various provisions of Maharashtra Cooperative Societies (MCS) Act, 1960, the Rules and the Bye laws made under the said MCS Act, 1960. They are as follows:

• Section 22(1) read with Bye Laws 17 and 19 prescribe the qualifications needed and conditions to be complied with by a person who is desirous to be admitted as a Member of CHS;

• Section 30, Bye law No.35 enshrines the illuminating legislative command relating to transfer of shares and interest of the deceased member of the Society to the legal heir of the deceased.

• Section 22(2), 23(1), Bye law No.65 and Bye law No.139(8) prescribe the procedure to be adopted by the Managing committee in dealing and disposing the application submitted to it for transfer of shares and interest of the deceased member of the Society to the legal heir.

• Section 23(2) read with Rule 19A provides a redressal mechanism wherein any person who is aggrieved by the decision of a society, refusing him admission to its membership, may appeal to the Registrar.

• Section 25 enshrines the conditions under which a member ceases to be a member of the Society.

• Section 25-A casts a positive obligation and responsibility upon the Managing Committee of the Society to remove from the register of its members the name of a person who has ceased to be a member.

• Section 38 casts a positive obligation and responsibility upon the Managing Committee of the Society, inter alia, to keep and maintain a register of its members, incorporating therein particulars of the members.

• Section 73(1) states that the management of every Society is vested in the Managing Committee and the said section commands that the Managing Committee shall exercise the powers conferred upon them and the Managing Committee shall also perform such duties as is imposed upon them under the MCS Act, Rules and Bye Laws.

• Section 73 (1AB) further provides that the Members of the Managing Committee will be individually and collectively responsible for all the decision taken by the Managing Committee.

• Section 78(1) read with Rule 64 empowers the Registrar to remove any member of the Managing Committee or the entire Managing Committee, if in the opinion of the Registrar, the said Managing Committee or any of its Member, is negligent in the performance of the duties imposed on them by this Act or the rules or the bye-laws; or commits any act which is prejudicial to the interests of the society or its members etc.

• Section 79(2) empowers the Registrar to take action against the erring and defaulting Managing committee of the Society in cases where the Managing committee is not taking action in accordance with the mandate of MCS Act, Rules and the Bye laws of the Society.

• Section 79A(1) empowers the State Govt of Maharashtra to issue necessary directions to any Managing Committee of the Society, inter alia, to secure the proper management of the business of the society generally, or for preventing the affairs of the society being conducted in a manner detrimental to the interests of the members of the Society.

• Section 89(1)(a) empowers the Registrar to inspect the working of any society to ensure that the provisions of the Act, rules and bye-laws of the society are being properly followed by the society;

• Rule 32. Register of Members:- The register of members to be kept by every society under sub section (i) of Section 38 shall be in Form ‘I’.

• Rule 33. List of Members:- The list of members to be kept by every society under Section 39 shall be in Form ‘J’.

• Bye law No.34 provides the provisions with respect to transfer of shares and interest of the deceased member to the Nominee / Nominees of the deceased member.

• Bye law No.35 provides the provisions with respect to transfer of shares and interest of the deceased member to the legal heir of the deceased member.

• Bye law No.39(a) commands that the Committee shall strictly follow the procedure laid down under Bye law No.65 for disposal of Application received by it for transfer of shares and interest of members in the capital / property of the Society.

• Bye law No.39(b) further commands that the Managing Committee shall not refuse any application for admission to membership of transfer of shares and interest in the capital / property of the Society except on the ground of non compliance of the provisions of the Act, Rules and the Bye laws of the Society, or non compliance to any other law or order issued by the Govt of Maharashtra.

• Bye law No.39(c) further provides that if the Managing Committee fails to communicate its decision, on application for admission to membership of transfer of shares and interest in the capital / property of the Society, within 3 months of its receipt of said Application, the application shall be deemed to have been accepted and the transferee shall be deemed to have been admitted as a member of the Society as provided under section 22(2) of the Act.

• Bye law No.61 casts a positive obligation and responsibility upon the managing Committee to record the fact of cessation of membership of any member in the minutes of its meeting and also inform the same to the concerned member within 7 days of its said decision of cessation of membership.

• Bye law No.65 provides the procedure to be followed by the Managing committee / Society whenever they are in receipt of any Application, including Application for transfer of shares and interest of the deceased member to the Nominee / legal heir.

• Bye law No.113 provides that the Managing Committee shall exercise all powers, expressly conferred on it, and discharge all functions entrusted to it under the Bye law No.139.

• Bye law No.138: The Members of the Committee shall be jointly and severally liable for making good any loss which the Society may suffer on account of their negligence or omission to perform any of the duties and functions cast on them, under the Act, Rules, and the bye law of the Society.

• Bye law No.139: Power, duties and functions of the Committee: Subject to the Bye law No.113, the Committee shall exercise the powers and discharge the functions and duties as mentioned hereunder: 139(8) To consider and decide the applications for various purposes received by the Society.

• Bye law No.139 (37) To take the decision on the complaint application in the coming Committee meeting and inform the concerned member of its decision accordingly.

• Bye law No.141: Functions of the Secretary: The functions of the Secretary of the Society shall be those mentioned below: (8) To deal with the applications for various purposes received by the Society. (13) To record the minutes of all the meetings of the general body. (22) To discharge such other function under the Act, the Rules and the Bye laws of the Society and directions of the Committee, as are not expressly not mentioned hereinabove. (23) To place the complaint application with facts, before the Committee in the coming meeting.

• Bye law No 144 casts a positive obligation and responsibility upon the Secretary of the Society to maintain and keep up to date the account books, registers, and other records mentioned under Bye laws Nos 142 and 143. The records will include the Register of members and List of members.

My client says and submits that the Members of the Managing Committee, despite being well acquainted with all aforesaid provisions of MCS Act, the Rules and the Bye laws, are knowingly, deliberately and mischievously acting in manifest breach of Sections 22(2), 23(1), 30, 73(1); and Bye law Nos.35, 39(b) and 65(f), with the sole intention to harass my client.

My client is constrained to say that a simple and straight forward case, of transfer of shares and interest of deceased member of the Society, is deliberately made complex by the Managing Committee.

FACTS OF THE CASE
NOW MY CLIENTS, SO AS TO PUT THINGS IN PERSPECTIVE, PLACE ON RECORD THE MAIN FACTS OF THE CASE:

• On ………….. Smt ………………. was admitted as a Member of the Society and was the owner of flat No. ……….. in the building known as …………………………………………. Thereby holding 5 Shares distinctive Nos…………….

• On ………….. Shri ……………………., the Son of the aforesaid Member was admitted as a Associate Member of the Society.

• On ……………. Nomination was filed in favour of Shri …………

• On …………..: Smt executed a Will, wherein she has bequeathed all her title, Share and interest in respect of the said shares and said flat of the Society to her ………………..

• On …………., Smt. expired leaving behind her last Will dated …………

• On ……… the Associate Member Shri …………… informed to the Society about the death of Smt………………, the member of the Society.

• On…………. As per the advise and instructions of Managing committee of the Society, the legal heir of the deceased Member caused to issue a Public Notice in ………………. thereby invited objections to the proposed transfer of said Shares and said Flat in his name.

• It is stated that no objections has been received by the Society in pursuant to said Public Notice. It is a matter of record that no person has approached to the Society claiming himself / herself to be the legal heir of the deceased Member and claiming share in the estate of the deceased Member of the Society. It is further stated that no person has recorded any objection whatsoever to the proposed transfer of said Shares and said Flat to the legal heir of the deceased Member before the Society.

• On ………….., as per the advice and instructions of Managing Committee members, and in compliance to Maharashtra Cooperative Societies Act, Rules and Bye-laws, in particularly, Section 22(1), and Bye law No.65, the said legal heir submitted an Application alongwith requisite documents, to the Society, for the transfer of said Share and said Flat in his name.

• On ……………, the Society vide its letter, informed my client that the said Application was put before the Managing Committee in its meeting held on ………….. and it is stated that “after elaborate discussion”, the Managing Committee unanimously decided to seek a legal opinion in the matter and accordingly it was sent for a legal opinion to Mr. ……….., Advocate & Solicitor. The society has annexed the copy of the legal opinion obtained from the Learned Solicitor.

• The Society has in its aforesaid letter dated ………., inter alia, informed and instructed my client to comply with the requirements as stated in the legal opinion given by Learned Solicitor dated …….., and Society will then transfer the Shares of deceased Member in the name of the Applicant.

INFIRMITIES IN THE LEGAL OPINION

NOW CRAVE I LEAVE TO POINT OUT THE INFIRMITIES IN THE LEGAL OPINION GIVEN BY THE LEARNED SOLICITOR.

1. The Learned Solicitor, in the light of documents submitted to him, has posed a question to himself – Whether the Application submitted by the legal Heir of the deceased Member, is in compliance to Maharashtra Cooperative Societies Act, Rules and Bye-laws, so as to entitle him for the Transfer of said Share; and while answering the aforesaid question, the learned Solicitor was to advise and give opinion to the Society.

2. The learned Solicitor, inter alia, dealt with and perused all the documents submitted by the Heir of the deceased member and in his legal opinion the Learned Solicitor, inter alia, advised the Society to obtain Letters of Administration from the legal heir.

3. Further, from the perusal of the elaborate legal opinion forwarded by the Learned Solicitor, it is abundantly clear that (a) the Society has not received “any second claimant” in respect of the said Shares and said Flat; (b) the Society has not received any objection whatsoever from any other legal heir of the deceased Member with respect to the proposed transfer of said Shares and said Flat in the name of Shri ……………..

4. The Learned Solicitor has nowhere in his legal opinion pointed out any lacunae in the said application of the legal heir of the deceased member. The Learned Solicitor has nowhere in his legal opinion stated that the Application submitted by the legal heir is not in accordance with Maharashtra Co-operative Act, Rules and Bye-laws. The said legal opinion of the learned Solicitor does not in any word say that there was any infirmity of any nature whatsoever in the application submitted by the legal heir of the deceased member.

5. Thus, despite full knowledge of aforesaid background and that there is no second claimant, the learned Solicitor, without stating the basis for caution, and in manifest breach of Bye-law No.35 of the Society, advises the Society to obtain, inter alia, Letters of Administration from the legal heir of the deceased Member.

6. More strangely, the learned Solicitor is asking the Society to direct the Applicant to obtain fresh NOC from the legal heirs and also obtain Letters of Administration. My client says that if learned Solicitor is asking for fresh NOC from legal heirs then what is the point in seeking Letters of Administration; and if the learned Solicitor is asking for Letters of Administration (LoA), then what is the point in asking for NOC from legal heirs. The LoA duly covers the NOC part of legal heirs. The Managing Committee should seek explanation and justification from the Leaned Solicitor for this contradicting opinion and giving cautious advice to obtain Letters of Administration. The explanation and justification from Learned Solicitor is necessary because the Society itself is under legal obligation to adduce reasons in its decision for refusal to admission as a Member.

7. The learned Solicitor, so as to show of his wisdom, has unnecessarily travelled into the provinces of Indian Succession Act and the Bombay High Court Rules to which the case at hand has nothing to do with it.

May please refer JUDGMENT ON SOCIETY ASKING FOR SUCCESSION CERTIFICATE / PROBATE / LETTERS OF ADMINISTRATION.

My client invites the attention of the Managing Committee to a case wherein the Hon’ble The Maharashtra State Co-operative Appellate Court, Bombay, did justified the stand of Managing Committee / Society to seek Succession Certificate from the Applicant. In the said case of Sadashiv Vinayak Godbole versus The Panvel Co-op Hsg Society, 1985 C.T.J. 485, the Learned Bench of Shri M.H. Jadhav (President) and Shri S P Ghogre however justified the aforesaid stand of Managing Committee on the ground that the Society had received application from two persons for the transfer of share and interest of the deceased member. My client herewith annexes the copy of said judgment for the reference of the Managing Committee. (Para 7 of the judgment), Annexure B.

THE ILLEGALITIES COMMITTED BY THE MANAGING COMMITTEE WHILE PROCESSING MY CLIENT’S APPLICATION

1. At the outset my client is constrained to say that, either knowingly or unknowingly, the managing committee has misled my clients, for, in the light of the fact that there exists a valid nomination in the records of the Society, the Managing Committee should have advised my client to make Application as a nominee so that the Records of the Society can be maintained upto date, as required and mandated under MCS Act, Rules and Bye laws, more particularly Bye law No.144, Rule 32 and 33 read with Section 38 of the Act. Instead the Managing Committee ill advised my client to make Application being a legal heir.

2. My client further says and submits that the Managing Committee, in the light of express wordings of Bye law No.35, are fully conscious and aware that the Succession certificate / Probate / Letters of Administration is sought from an applicant legal heir only in cases where there are “claimants” other than the applicant, and when both claimants fails to reach any agreement as who will be the member; and there is existence of dispute between the legal heirs of the deceased, then only as a matter of abundant caution, the Managing Committee seeks Succession Certificate / Letters of Administration / Probate from the legal heir who is desirous of to be admitted as a Member of the Society. Yet, only to harass the applicant i.e. my client, the Managing Committee is seeking Letters of Administration from my clients, despite fully knowing that there are no claimants in his case and there is not an iota of dispute among the legal heirs of the deceased with respect to transfer of shares and interest of the deceased member in the name of my client. Moreover, my client has executed an Indemnity Bond in favour of Society to protect the interest of the Society.

3. My client submits that from the bare reading of Section 22(2), Section 23(1), Section 30, Bye law No.35, 39(b) and 65(f) will go on to show that the Managing Committee, in the guise and pretence of legal opinion, are knowingly, deliberately and blatantly acting in clear breach of aforesaid provisions MCS Act and Bye laws made under the MCS Act.

4. My client points out the gross procedural impropriety being committed by the Managing Committee in disposing of my client’s Application. My client invites the attention of the Managing Committee to Bye law No.39(b), and at the cost of repetition, reproduces the same.

Bye law No.39(b) commands that the Managing Committee shall not refuse any application for admission to membership of transfer of shares and interest in the capital / property of the Society except on the ground of non compliance of the provisions of the Act, Rules and the Bye laws of the Society, or non compliance to any other law or order issued by the Govt of Maharashtra.

My client says that the Managing Committee has by its letter dated 04-10-2011 refused my client’s Application. However, the Managing Committee in its said letter did not stated anything about “non compliance” by my client with respect to MCS Act, Rules and Bye laws and “non compliance” by my client with respect to the order or law made by the Govt of Maharashtra.

4. My client says that Bye Law No.65 lays down the procedure to be followed by Society whenever it is in receipt of an Application.

The said Bye law No.65(a)(ii) provides that an applications for transfer of shares and interest in the capital / property of the Society shall be addressed to the Secretary of the Society. Every application received by the Secretary shall be acknowledged by him;

Bye law 65(d) provides that the Committee or the general body as the case may be, shall consider all such applications at its meeting and take decisions thereon; The Society in its meeting held on ………….., took the decision to seek legal opinion with respect to my client’s Application.

Bye law 65(f) If the Committee or the general body, as the case may be, rejects any application, it shall record, in the minutes of its meeting, the reasons for rejection of the application;

HERE COMES THE ILLEGALITY OF MANAGING COMMITTEE:
5. My client says that, by merely applying common sense it can be said that every “decision” of the Managing committee presupposes a meeting of the Managing committee wherein the Managing Committee decides the fate of the Application submitted to it. The Learned Solicitor gave his legal opinion on or about …………. However, it is not known that in which Managing Committee meeting, the Society took the decision to adopt the said legal opinion and thereby rejecting my client’s Application. The Society letter dated ………… is completely silent with respect to the date on which the Managing Committee meeting was held wherein the decision was taken to adopt the said legal opinion and decision was taken to reject the Application and thereby directing the Applicant, i.e. my client to comply with the legal opinion given by the Learned Solicitor.

6. Therefore, on the face of the records, it can safely be inferred that the said legal opinion obtained from the learned Solicitor was not discussed in any of the Managing Committee meeting.

7. It is strange to see that the members of the Managing Committee have blindly adopted the said legal opinion without discussing the same in the Managing Committee meeting and disregarded its statutory obligation as mandated and manifested in Bye law No.39 and 65. Also, my client would be interested to know as which member of the Managing Committee took the decision to adopt the legal opinion and took decision to reject my client’s application.

8. My client therefore says that the Managing Committee’s decision to reject my client’s Application was not taken in any Managing Committee meeting. My client therefore says that the said letter dated ………… of the Society cannot be said to be a decision of the Managing Committee.

9. Therefore, my client says and submits that my client’s Application was not rejected in any of the Managing Committee meeting, as contemplated and mandated under the Bye law No.65(f).

10. My client further submits that despite the fact that the letter of the Society dated ……… was not a “decision” per se, yet assuming that it was a decision, than the Managing Committee manifestly did violence to section 22(2) and 23(1) of the Maharashtra Co-operative Societies Act, 1960. The said two sections unambiguously and in express terms provide that the Society SHALL record its reasons for its (refusal) decision. aforesaid sections, it can be inferred that whenever the Society intends to refuse admission to a person, its decision shall carry “Reasons therefor” and further that society shall not refuse admission to membership to any person duly qualified therefor under the provisions of this Act and its by-laws, “without sufficient cause”.

11. The recording of reasons by Society as contemplated under the Act entails that the Society has given due consideration to the Application submitted to it and that decisions of the Society on the Application have been reached according to law. The State legislature has specifically inserted words “Reasons therefor” and “without sufficient cause” so as to prevent the likelihood of arbitrary exercise of wide powers conferred upon the managing committee.

12. The reasons adduced must not only be intelligible but which will also deal with the substantial points which has been raised therein in the said application. A statement of reasons promote “thought” by the Society and compel it to cover the relevant points and eschew irrelevancies and assures careful & due consideration.

13. In order to satisfy the test of Section 22(2) and 23(1), every decision of Society must be informed by reasons and that an act uninformed by reasons is arbitrary, and arbitrariness is the very negation of the Rule of Law.

JUDGMENT ON “A SOCIETY CANNOT ARBITRARILY REFUSE TO MAKE PERSON A MEMBER”

My client invites the attention of Managing Committee to the remarkable observations made by Hon’ble Bombay High Court in the case of Gopal Vishnu Ghatnekar vs Madhukar Vishnu Ghatnekar on 24 June, 1981 Equivalent citations: AIR 1982 Bom 482, (1982) 84 BOMLR 41; Bench: Mody

Para 8. …….However, the right of a society to admit a person of its choice as a member cannot be exercised arbitrarily and so as to deprive a person of his right to the shares or property of a deceased member. The law does not give a right to the society to continue as member or to refuse membership to a person who is entitled to become a member. To put it differently, a society cannot arbitrarily refuse to make person a member.

New Sion Co-Operative Housing ... vs State Of Maharashtra And Ors. on 13 October, 2006; Equivalent citations: 2007 (4) Bom CR 421; Author: C D.Y.; Bench: C D.Y.
Para 5. Sub-section (1) of Section 23 of the Maharashtra Cooperative Societies' Act, I960, provides that no Society shall, without sufficient cause, refuse admission to membership to any person duly qualified therefor under the provisions of the Act and its bye-laws, observed thus, it was necessary for the authorities below to consider as to whether within the meaning of Sub-section (1) of section. 23, the Co-operative Society, had a sufficient cause for declining membership. This in the very nature of things ought to have been considered by the authority constituted to decide the issue under the Maharashtra Co-operative Societies' Act, 1960.
BEYOND CONTROVERSY IT CAN BE STATED THAT THE MANAGING COMMITTEE IS NOT AT LIBERTY TO IGNORE THE CATEGORICAL AND UNAMBIGUOUS MANDATE OF SECTION 22(2) AND SECTION 23(1) OF THE ACT; AND ALSO THE MANDATE OF BYE-LAW NO.35, 39(b)65(f).

MOREOVER, THE STATE LEGISLATURE HAS IN SECTION 73 IMPOSED A HEAVY AND POSITIVE DUTY UPON THE MANAGING COMMITTEE TO EXERCISE THEIR POWERS AND PERFORM THEIR DUTIES IMPOSED UPON THEM UNDER THE ACT, RULES AND BYE-LAWS.

RECORDING OF REASONS / INTERPRETATION OF LAWS

MY CLIENT SAYS AND SUBMITS THAT EVEN THE HIGHEST COURT OF THE COUNTRY, HIGH COURTS AND EVERY COURT OF THE COUNTRY, EVERY PUBLIC / ADMINISTRATIVE AUTHORITY ARE UNDER LEGAL OBLIGATION TO RECORD REASONS FOR THEIR DECISION. MY CLIENT OUTLINES HEREINAFTER MANY OF THE JUDGMENTS OF SC/HC EMPHASIZING THE NECESSITY OF REASONS IN THE DECISION MAKING PROCESS.

• The question as to whether an administrative authority should record reasons for its decisions has however come up for consideration before the Supreme Court in number of cases. Underlying the need the SC in Travancore Rayons Ltd Vs Union of India AIR 1971 SC 862 observed that the necessity to give sufficient reasons which disclose proper appreciation of the problem to be solved and the mental process by which the conclusion is reached where a non judicial authority exercises a judicial function is obvious. Here in this case the order of the Central Govt in rejecting a Revision u/s 36 of the Central Excises & Salt Act 1944 merely stated that the Govt having carefully considered the points made by the Applicant saw no reason to interfere with the order. The order of the Central Govt being laconic (brief) was held to be vitiated.

• The Supreme Court in Binapani Dei's case observed that if “there is power to decide and determine to the prejudice of a person, duty to act judicially is implicit in the exercise of such power. If the essentials of Justice be ignored and an order to the prejudice of a person is made, the order is a nullity. State of Orissa V Dr(miss) Binapani Dei AIR 1967 SC 1269;

• In Srilekha Vidyarthi versus State of UP reported in AIR 1991 SC 537, it was held by the Hon'ble SC that in order to satisfy the test of Article 14, every State action must be informed by reasons and it follows that an act uninformed by reasons, is arbitrary and arbitrariness is the very negation of the Rule of Law.

• Reasons must be recorded for exercising the powers even if the statute does not expressly enjoin upon the authority to do so. Consumer Action Group versus State of Tamilnadu, AIR 2000 SC 3060.

• In Schedule Caste and Weaker Sections Welfare Association (Regd) versus State of karnataka AIR 1991 SC 1117, it was observed by the SC that it is one of the fundamental rules of our constitutional set up that every citizen is protected against exercise of arbitrary authority by the State or its officers. An order becomes arbitrary when there is absence of adequate reasons for such decision.

• In M Krishna Swamy versus UOI (1992) 4 SCC 605 the SC held that non-recording of reasons by Statutory / public authority / functionary would render the decision arbitrary, unfair and unjust violating article 14 & 21 of the COI.

• A right to reason is an indispensable part of a sound system of judicial review. Anusayaben versus Jt CIT 256 ITR 685.

• Recording of reasons and disclosure thereof are not a mere idle formality.
Ajantha versus CBDT 102 ITR 281 (SC)

• The assessing, appellate, Revisional, and enforcement authorities must pass speaking orders giving the basis for their decision.
Gautam versus UOI ITR 530 (SC);
Ajantha versus CBDT 102 ITR 281 (SC);
Cf CIT versus Pillah 63 ITR 411, 415 (SC);
TRO versus gangadhar 234 (ITR) 188 (SC);

• The statutory authority must apply their mind to the case.
Bharat Nidhi versus UOI 92 ITR 1.

• Again, in the cases of Gautam versus reported in UOI ITR 530 (SC); Cf CIT versus Pillah reported in 63 ITR 411, 415 (SC); TRO versus gangadhar reported in 234 (ITR) 188 (SC), the Hon’ble Supreme Court said that the Assessing, Appellate, Revisional, and Enforcement authorities must pass speaking orders giving the basis for their decision. Without reasons, a party may speculate why the tribunal made an adverse decision and may have difficulty in deciding whether to appeal or otherwise challenge the decision. Similarly the Reviewing or Appellate Court may have difficulty in understanding rational for a decision without reasons. Absence of reasons may create disturbing impression of injustice.

• In the case of Rasiklal versus CWT reported in 121 ITR 219, it was held that the statutory authority must observe this rule (of giving reasons) in its proper spirit; mere pretence of compliance with it would not satisfy the requirement of law.

• The Hon’ble Supreme Court in the case reported in AIR 1979 SC 429, quoting Lords Halsbury – said, Discretion means when it is said that something is to be done within the discretion of the authorities, and that something is to be done according to the rules of reason and justice, and not according to private opinion, but according to law and not by humour.

• In an English case Associated Provincial Picture House Ltd Vs Wednesbury Corp, LORD GREENE, MR observed that it is an established law that a Person entrusted with a discretion must direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his considerations matters which are irrelevant to the matter that he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting unreasonably.

• An American Supreme Court Justice B. CARDOZO in his book The Growth of the Law, opined – Complete freedom- unfettered and undirected- that never is. A thousand limitations- the product some of statute, some of precedent, some of vague tradition or of an immemorial technique- encompass and hedge us even when we think of ourselves as ranging freely and at large.

• Justice RAND in a Canadian case observed that in Public Regulations there is no such thing as absolute and untrammeled discretion, that is that action can be taken on any ground for any reason that can be suggested to the mind of the administrator.

• In the case of Ramdas Shriniwas Nayak V Union of Union reported in AIR 1995 BOM 235, the Hon’ble Bombay high Court, quoting the words of LORD CAIRNS, said, “Where a power is deposited with a Public officer for the purpose of being used for the benefit of persons who are specifically pointed out, and with regard to whom a definition is supplied of the condition upon which they are entitled, the power ought to be exercised, and the court will require it to be exercised.

• In the case of U.P. State Road Transport Corporation V Mohd Ismail reported in (1991) 3 SCC 239, the Hon’ble Supreme Court viewed that when statute confers discretion on a holder of public office that should be exercised reasonable and rationally.

• In the case of Ajantha versus CBDT reported in 102 ITR 281 (SC), the Hon’ble Supreme Court held that Recording of reasons and disclosure thereof are not a mere idle formality.

• In the case of The Siemens Engineering & Manufacturing Co. of India Ltd Vs The Union of India reported in AIR 1976 SC 1785, the Hon’ble Supreme Court held and said that due to proliferation of administrative law, administrative authorities are in some kind of cases replacing courts of law and that has made all the more necessary that such authorities should accord fair and proper hearing to the persons sought to be affected by their orders and give sufficiently clear and explicit reasons in support of the orders made by them.

• In the case of Maneka Gandhi Vs Union of India reported in AIR 1978 SC 597 at page 613, the Hon’ble Supreme Court held that the reasons if disclosed would be open to judicial scrutiny for ascertaining their nexus with the order, the refusal to disclose the reasons would equally be open to the scrutiny of the Court.

• In the case of Madhya Pradesh Industries Ltd Vs Union of India reported in AIR 1966 SC 671, the Hon’ble Supreme Court, Justice SUBBA RAO in a dissenting judgment once observed that if tribunals can make orders without giving reasons, the said powers in the hands of unscrupulous or dishonest officers may turn out to be a potent weapon for abuse of power. But if reasons for an order are given it will be an effective restraint on such abuse.

• In the case of Harinagar Sugar Mills Ltd Vs Shyam Sunder Jhunjhunwala reported in AIR 1961 SC 1669, the Hon’ble Supreme Court held that the quasi judicial authorities are enjoined with the duty and responsibility to see to it that in adjudicating upon proceedings which come up before them they pass properly reasoned orders so that those who are affected by such orders are assured that their case have received proper consideration at the hands of the said authorities and that such decisions have been reached according to law and have not been the result of caprice, whim or fancy and have been reached on ground of policy or expediency.

• In the case of Govt of India Vs Maxim A Lobo reported in (1991) 190 ITR 101, it was held that an order of Quasi Judicial nature without reasons is a wholly defective order in the eyes of law.

• In the case reported in AIR 1983 P & H 87., the Punjab High Court observed that abuse has an element of lack of bonafides so as to cause harm to one or undeservedly benefiting another.

• In the case of Balraj Taneja V Sunil Madan, it was observed that a Judgment/ Order must be a self contained document from which it should appear as to what were the facts of the case and what was the controversy which was tried to be settled by the Court. The process of reasoning by which Court came to a particular conclusion and decreed or dismissed the suit should clearly be reflected in the Judgment/Order.

• In the case of Maharashtra State Board of Secondary and Higher Education versus K S Gandhi reported in (1991) 2 SCC 716, it was held by Hon’ble Supreme Court that the reasons are harbinger between the mind of the maker of the order to the controversy in question and the decision or conclusion arrived at. Reasons exclude the chances to reach arbitrary, whimsical or capricious decision or conclusion. The reasons assure an in-built support to the conclusion/decision reached. When an order affect the right of a citizen or a person irrespective of fact whether it is quasi judicial or administrative order and unless the rule expressly or by necessary implication excludes recording of reasons, it is implicit that the principles of natural justice or fair play require recording of germane and precise relevant reasons as a part of fair procedure. Recording of reasons is also an assurance that the authority concerned has applied its mind to the facts on record. Reasons also aids the Appellate or Revisional Authority to see whether the maker of the order, Judgment, decree has justly meet out justice to the aggrieved person.

• In the case of Consumer Action Group versus State of Tamilnadu, reported in AIR 2000 SC 3060, the Hon’ble Supreme Court said that Reasons must be recorded for exercising the powers even if the statute does not expressly enjoins upon the authority to do so.

• There is some Australian authority to support the need to give reasons. In 1949, the High Court of Australia held that if a Minister was under a duty to act in a quasi judicial manner in revoking a license the minister would have to disclose to the licensee his reasons for wishing to do so. Election Importing Co. Pty Ltd versus Courtice (1949) 80 CLR 657

• English Judge LORD HUDSON in the landmark Padfield’s Case was of the view that although it is true that the Minister is not bound to give his reasons for refusing to exercise his discretion, yet when the circumstances indicates a genuine complaint for which the appropriate remedy is provided, the Minister would not escape from the possibility of control by Mandamus (a Writ) for adopting a negative attitude without explanation. Padfield Vs Minister of Agriculture, Fisheries and Food [1968] AC 997; [1968] 1 ALL ER 694.

• Reasons disclose how the mind is applied to the Application submitted for a decision and reveal a rational nexus between the Application considered and conclusions reached.

• Discretion in reality means a power given to a person with the authority to choose between two or more alternatives or possibilities each of which is lawful and permissible. The concept of discretion imports a duty to be fair, candid and unprejudiced; not arbitrary, capricious or biased; much less, warped by resentment or personal dislike.

• Recording of reasons will show application of mind and probably this recording of reasons is the only remaining visible safeguard against possible misuse of powers conferred upon those who manage the affairs of the Society.

IN THE LIGHT OF AFORESAID DISCUSSION ON REASONS AND STATUTORY PROVISIONS DISCUSSED HEREINBEFORE, IT IS BENEFICIAL TO THROW LIGHT AS HOW THE PROVISIONS OF LAW ARE INTERPRETED AND APPLIED.

The intention of the legislature is manifested in the language which the legislature has chosen to employ. If the words of a statute are clear or unambiguous, such words must be given their ordinary, natural and recognized meaning attributed to them unless they have acquired a technical or special legal meaning.

The meaning of the statute is to be gathered from the words used in the statute itself. If the intention of the legislature is clear, that intention constitutes the law. An statute is the authentic repository of the legislative will and the function of the court is to interpret it according to the intent of the legislature.

Each word, phrase or sentence in a Statute is to be considered in the light of the general purpose of the Act itself. The Legislature indicates its intention by the language it chooses to employ.

The factors which can be taken into consideration to ascertain the intention of the legislature are – the history of the Act, the reasons which led to the passing of the Act, the mischief which had to be cured and other provisions of the statute. In order to find out the legislative intent, we have to find out what was the mischief that the legislature wanted to remedy.

The Legislature is deemed not to waste its words or to say anything in vain. It should not be assumed that the Legislature used language without any purpose. It is a settled principle of construction that every word in a Statute is employed with some purpose in order to further the objectives laid down in the preamble of the Act itself. We must assume that the Legislature deliberately used that expression. The words in an Act of Parliament must be construed in such a manner as to give them a sensible meaning.

It is the duty of the Court to make such construction of a Statute which shall suppress the mischief and advance the remedy. The courts must in general must take it absolutely for granted that the Legislature has said what it meant and meant what it has said. It is a settled principle of construction that every word in a Statute is employed with some purpose in order to further the objectives laid down in the preamble of the Act itself.

I crave leave to cite here few judgments of Supreme Court which speaks about as how the provisions of a Statute are to be understood and dealt with.

• The dominant purpose in construing the statute is to ascertain the intention of the legislature. This intention, and, therefore, the meaning of the statute, is primarily to be sought in the words used in the statute itself., which must, if they are plain and unambiguous be applied as they stand, however strongly it may be suspected that the result does not represent the real intention of the legislature. In approaching the matter from this angle, it is a duty of the court to give fair and full effect to statute which is plain and unambiguous without regard to particular consequence in a special case. Harchand Singh versus Smt Shivarani, 1981 All WC 273 (SC) (per D A Desai J.).

• The Court endeavours to interpret the provision of a statute in a manner that will achieve the object of the provision, avoid mischief and advance the cause of justice, make the law workable, enforceable and best harmonize with and effectuate the object of the legislation.

• Each word, phrase, or sentence is to be considered in the light of the general purpose of the Act itself. That is the rule of purposive legislation. AIR 1953 SC 274.

• A provision has to be read and understood in the context of the entire scheme of the enactment. AIR 1995 SC 2329.

• Subha Rao, C.J. speaking for the Bench in Chandra Mohan v. State of UP, has pointed out that the fundamental rule of interpretation is that in construing the provisions of the Constitution or the Act of Parliament, the Court "will have to find out the express intention from the words of the Constitution or the Act, as the case may be.

• In the case of Nothman versus Barnet Council, [1978] 1 WLR 220, quoting Lord Denning, in all cases now in interpretation of statutes, we adopt such a construction as will “promote the general legislative purpose” underlying the provision. There is no reason why we should not follow it at once without waiting for a statute to tell us.

• The observation of Justice Das Gupta also deserves to be noted. The intention of the legislature has always to be gathered by words used by it, giving to the words- plain, normal, grammatical meaning.

• In the field of Interpretation of Statutes, the Court always presume that the legislature inserted part of it with a purpose and the legislative intention is that every part of the statute should have effect. [ Sankar Ram & Co. V Kasi Naikar, (2003) 11 SCC 699]

• Interpretation should make sense and not nonsense of the legislation, AIR 1954 Nag 43.

• Where the language of the section clearly expresses the intention of the Legislature, it must be given effect to. State versus Ramjivan Kaluram, AIR 1962 Bom 8, 12; State of Punjab versus Ajaib Singh, 1953 SCR 254, 264 (Das J.); Mysore State Electricity Board versus Bangalore Woolen etc mills Ltd AIR 1963 SC 1128.

• In the field of Interpretation of Statutes, the Court always presume that the legislature inserted part of it with a purpose and the legislative intention is that every part of the statute should have effect. [ Sankar Ram & Co. V Kasi Naikar, (2003) 11 SCC 699]

• Justice Gajendragadkar said in a case that the first and primary rule of interpretation is that the intention of the Legislature must be found in the words used in the Legislation itself. [ kanailal Sur V Paramnidhi Sadukan, AIR 1957 ]

• When a language is plain and unambiguous and admits of only one meaning no question of construction of a statute arises for the Act speak for itself. [St of UP V Vijay Anand Maharaj, AIR 1963] ; It is not open to first create an ambiguity and then look for some principles of Interpretations. [ Patangrao Kadam V Prithviraj S Deshmukh]

• When the words are capable of giving a plain meaning, it is said that the Courts should not busy themselves with supposed intention or with the policy underlying the Statute. [Pakala NArayaanaswamy V Emperor, AIR 1939 PC 47]; Justice Gajendragadkar in Gurmej Singh V Pratap Singh Kairon, AIR 1960.]

• When the Word SHALL is used in a statute the presumption is that its use is imperative and not merely directory, particularly when it is addressed to a court or to a public servant and when a right or benefit depends on its imperative use.[ CPC 1908- Order 14, Rule 2.]

SUBMISSIONS: IN THE LIGHT OF AFORESAID ALL DISCUSSIONS, MY CLIENT SUBMITS THAT –

1. The “decision” communicated by the Society vide its letter dated ……….. to my client Mr. ……… does not have the requisite elements of Section 22(2) and Section 23(1) and Bye law Nos.39(b) and is in manifest breach of Bye law No.65(f) and therefore said letter is not a “decision of the Society / Managing Committee” in the eyes of law.

2. And therefore, whereas the Society has failed to communicate its “decision” within three months, contemplated and mandated under Section 22(2) and Bye law no.39(c), to the applicant, i.e. to my client the applicant herein, my client is deemed to have been admitted as Member of the Society, as contemplated and directed under section 22(2) of the Act and Bye law no.39(c).

3. My client further submits that, my client is not only entitled to the transfer of shares and interest of the deceased member of the Society and be admitted as a member of the Society for being a legal heir of the deceased, but my client is also entitled to the transfer of shares and interest of the deceased member of the Society and be admitted as a member of the Society being also 1st Nominee of the said deceased member of the Society in the nomination so filed before the Society.

4. My client says that conjoint reading of Section 25, 25-A, 30, 38, Rule 32 and 33 and Bye law Nos. 61 and 144 obliges the Managing Committee of the Society that in the event of death of a member of the Society, the nominee/s of the deceased member immediately takes place in the list of Members, maintained by the Society in Form ‘J’.

5. Notwithstanding the “decision” of the Society, my client is within his right to make an application for to be admitted as a member of the Society being a lawful nominee of the deceased member and then in that situation by virtue of Section 30, Bye law No. 34 and all other enabling provisions of MCS Act, the Rules and the Bye laws and the Judicial pronouncements stated hereinafter, the Managing committee will have no option but to transfer the shares and interest of the deceased member in the capital / property of the Society to my client.

6. However, whereas my client so as to avoid unwarranted conflict with the Managing committee, in the exercise of his aforesaid right, is making Application as a Nominee, and, my client, submits his Application under Form ……… and all requisite documents, for transfer of shares and interest of the deceased member of the Society in my client’s name, being a lawful one of the nominee. The Original Share certificate and NOC of the legal heirs are already lying with the Society. The Society, in the backdrop of my client’s this Application, may withdraw previous application of my client dated ……………

JUDGMENTS ON COMPULSORY TRANSFER OF SHARES AND INTEREST OF THE DECEASED TO THE NOMINEE

Om Siddharaj Co-Operative ... vs The State Of Maharashtra & Others on 24 June, 1998 Equivalent citations: 1998 (4) Bom CR 506; Author:B Saraf; Bench: . B Saraf, A Sakhare

Para 4. On a plain reading of section 30, it is clear that on death of a member of the society, it is incumbent on the society to transfer the share or interest of the deceased member to" a person or persons nominated in accordance with the Rules". It is only in the event of there being no nomination of any person, the society can transfer the share or interest of the deceased member to "such person as may appear to the committee to be the heir or legal representative" of the deceased member. The language of the section is clear and unambiguous. If a person is nominated in accordance with the Rules, the society is obliged to transfer the "share and interest of the deceased member" to such nominee. It is no part of the business of the society in that case to find out the relation of the nominee with the deceased member or to ascertain and find out the heir or legal representatives of the deceased member.

Para 5. It was, therefore, incumbent upon the society, after the death of the member, to transfer his share and interest to the nominee and to deal with him for all purposes in place of the deceased member. We are in agreement with the conclusion of the teamed Single Judge in the above decision that once there is a valid nomination, the society is obliged to deal with the nominee.

Chitra Haldipur vs Shahid Bhagat Singh CHS Ltd. And ... on 7 October, 2006. Equivalent citations: 2007 (4) Bom CR 432; Bench: D.Y. Chandrachud.

There can be no dispute about the principle of law that on the death of the member of the society, the society is required to transfer the share or interest of the deceased member to the person who is nominated in accordance with the rules. If no person is nominated the Society has to transfer the share or interest to an heir or to the legal representative of the deceased member.

LEGAL EXPECTATIONS FROM THE MANAGING COMMITTEE: In the aforesaid background, I on behalf of my client, call upon the Managing Committee of the Society that –

1. The Managing Committee to transfer shares and interest of the deceased member in my client’s name for being a lawful nominee, by scrupulously following the due process of law stipulated under the MCs Act, Rules and the Bye laws.

CONSEQUENCES THAT MAY FOLLOW IF MANAGING COMMITTEE DOESN’T COMPLY TO LEGAL EXPECTATION STATED HEREINBEFORE:

1. My client under the empowering Section 79A of the MCS Act, will make a Complaint to the State Govt of Maharashtra, to exercise its such powers as specifically conferred upon it under the said Section;

2. My client under the empowering Section 78 of the MCS Act, will also make a Complaint to the Registrar / Dy Registrar, for the removal of Managing Committee, for being negligent in the performance of the duties imposed on it by this Act, the rules and the bye-laws; and committing acts which is prejudicial to the interests of its members, and are not discharging its functions properly and diligently, as mandated under Section 73 of the MCS Act.

3. My client will file a Writ Petition in the High Court if necessary, for appropriate relief.

4. Needless to say, my client, in addition to aforesaid steps, is at liberty to adopt all Civil and Criminal proceedings against the Managing Committee members as permissible under the laws of the land, entirely at the cost and consequences of Society and all such costs shall be ultimately recovered from every Managing Committee member.

JUDGMENTS ON WHO TRIES TO MISLEAD THE COURT AND WHO PROLONG THE LITIGATION

WHEREAS IT IS SEEN THAT ERRING PARTY TO THE LITIGATION TAKES FOR GRANTED THE MACHINERY AND THE AUTHORITY OF LAW AND ADOPT MANY DILATORY TACTICS TO PROLONG THE LITIGATION BY BLATANTLY MISREPRESENTING FACTS, MAKES INCONSISTENT STATEMENTS ETC. Nevertheless, my clients may inform you that there are ample provisions in Indian Penal Code 1860 to deal with whoever interferes in the administration of justice and provides for both imprisonment and fine for such interference. Sometime Courts invoke its Contempt jurisdiction to punish those who mislead the court by filing false affidavit. My clients will not hesitate to invoke applicable provisions of law if mischief with the administration of justice is undertaken.

PLEASE FIND BELOW SOME OF THE PROVISIONS DEALING WITH ADMINISTRATION OF COURT PROCEEDINGS.

Section 181 of Indian Penal Code declares that- when a person, who is under legal obligation, knowingly make any statement, on Oath, or by affirmation, before a Public Servant, statement which he knew that it is false or statement which he believes that it is not true, and when he is bound to state the truth, commits the offence under this section.

The punishment for this offence is imprisonment which may extend to three years, and will also be fined.

Section 191 of Indian Penal Code declares that when a person, who is under legal obligation, either on oath or under any provision of law, to state the truth, to declare upon any subject, knowingly makes false statement, the statement which he believes that it is false or he believes that it is not true, commits the offence under this section.

The punishment for this offence is imprisonment which may extend to Seven years, and will also be fined.

Case Laws: Offences relating to making false statement in the sworn Affidavits comes within the purview of this section.
Kori Gope versus Manmohan Das, AIR 1928 Pat 161 : 29 CrLJ 111 : 106 IC 703
Ranjit Singh versus State of PEPSU, AIR 1959 SC 843 : 1959 CrLJ 1124

Written statements and applications: A person filing a written statement is bound by law to state the truth and if he makes a statement which is false to his knowledge or belief, or which he believes not to be true, he is guilty of this offence. Mehrban Singh (1884) 6 All 626, Padam Singh, (1930) 52 All 856.

Section 196 of Indian Penal Code declares that when a person give or attempt to give any evidence as true or genuine evidence, knowing that the evidence he is giving is false or fabricated, to obstruct in the course of justice, commits the offence under this section.

The punishment for this offence is imprisonment which may extend to Seven years, and will also be fined.

Section 199 of Indian Penal Code declares that when a person voluntarily makes a declaration to a Court or to any public Servant, who are bound to take such declaration as evidence, and the person knowingly makes false statement in such declaration, the statement which he believed it to be false or he believed it to be not true. Also, the false statement so made must touch a point material to the object of such declaration, commits the offence under this section.

The punishment for this offence is imprisonment which may extend to Seven years, and will also be fined.
Case Laws: False Affidavit: M S Jaggi 1983 CrLJ 1527 (Ori)
Deputy GM Inter State Bus Terminal versus Smt Sudarshan Kumari, 1997 CrLJ 1931 (SC) : AIR 1997 SC 1902 : 1997 (3) SCC 496 : Gadhi versus Krishnaraja, 2000 CrLJ 1590 (Mad)
Baddu Khan versus Emperor, AIR 1928 All 182 : 29 CrLJ 336

Criminal Contempt of Courts: In the case of Dhananjay Sharma v State of Haryana & Ors., (1995) 3 SCC 757, the Supreme Court has held, inter alia, as- The filing of false affidavits in judicial proceedings in any court of law exposes the intention of the concerned party in perverting the course of justice. The due process of law cannot be permitted to be slighted nor the majesty of law be made a mockery by such acts or conduct on the part of the parties to the litigation or even while appearing as witnesses.

Filing of false affidavits or making false statement on oath in Courts aims at striking a blow at the Rule of Law and no court can ignore such conduct which has the tendency to shake public confidence in the judicial institutions because the very structure of an ordered life is put at stake." [See also, Rita Markandey v Surjit Singh Arora, (1996) 6 SCC 14]

In the case of Murray & Co. vs Ashok Kr. Newatia & Anr, AIR 2000 SC 833, 10. The right to inflict punishment for contempt of Court in terms of the Act of 1971 on to the Law Courts has been for the purposes of ensuring the rule of law and orderly administration of justice. This is a special Jurisdiction conferred on to the law courts to punish an offender for his contemptuous conduct or obstruction to majesty of law. Litigant public ought to be extremely careful and cautious in the matter of making statements before Courts of Law.

In the case of Afzal v. State of Haryana 1995 Supp (2) SCC 388 wherein this Court observed: It cannot be lightly brushed aside and the tendency to file false affidavits or fabricated documents or forgery of the document and placing them as part of the record of the Court are matters of grave and serious concern.

JUDGMENTS ON IMPOSITION OF HEAVY COSTS ON LITIGANTS TAKING FALSE DEFENSE / PLEAS

LITIGANT TAKING FALSE DEFENSE – DIRECTED TO PAY COST OF RS.50,000/ AS COST – (2004) 2 SCC 278

AWARD OF COSTS WHERE THE LITIGANT WAS UNNECESSARILY DRAGGED TO COURT – (2003) 7 SCC 270, 180

THE PRIMARY OBJECT OF LEVYING COST UNDER SECTION 35, 35A CPC IS TO RECOMPENSE A LITIGANT FOR THE EXPENSES INCURRED BY HIM IN LITIGATION TO VINDICATE OR DEFEND HIS RIGHTS – (2009) 2 SCC 656, 659.

LITIGANT TAKING FALSE PLEA – PUNITIVE COSTS – 2001 AIHC 3500, 3509 (BOM)

WHENEVER ANY PERSON WITH MALAFIDE INTENTION AND DILATORY TACTICS TRIED TO DELAY JUSTICE, THEN IN SUCH CIRCUMSTANCES, HEAVY COST COULD BE IMPOSED UPON THE SAME.
• NATWAR TEXTILES PROCESSORS PVT LTD VERSUS UOI AIR 1995 SC 2256;
• M/S SRF LTD V. M/S GARWARE PLASTICS & POLYESTERS LTD AIR 1995 SC 2228;
• SALEM ADVOCATE BAR ASSOCIATION V. STATE OF UOI AIR 2005 SC 3353.

COST AWARDED SHOULD NOT BE NOMINAL BUT SUFFICIENT TO MEET THE EXPENSES INCURRED BY THE SUCCESSFUL PARTY – 2004 AIHC 2693 (RAJ) (DB)

RS.5.00 LACS IMPOSED AS COSTS ON THE ERRING OFFICIALS OF THE DEVELOPMENT AUTHORITY FOR HARASSING THE PETITIONER – A 2005 DEL 150 (DB)

COSTS AWARDED THROUGHOUT FOR PROLONGING THE LITIGATION – ANGUISH EXPRESSED BY SC – (2004) 1 SCC 287; (2005) 5 SCC 375; (2005) 5 SCC 543; (2005) 5 SCC 527

PROLONGING LITIGATION – IMPOSITION OF HEAVY COSTS – (2005) 1 SCC 705

THE COURT MAY AWARD COSTS BY WAY OF COMPENSATION – A 2005 NOC 193 (KER) (DB)

NO LIMIT FIXED FOR IMPOSING EXAMPLARY COSTS – 2001 AIHC 3500, 3508 (BOM)

COSTS IMPOSED SHOULD BE ACTUALLY INCURRED BY THE SUCCESSFUL PARTY – (2005) 6 SCC 344, 369

MY CLIENT’S FINAL WORDS

1. My client requests the members of Managing Committee to shun the path of conflict and adopt the spirit of co-operation and do what is lawful, failing which the ………… Apartment Co-operative Housing Society Ltd will be thrown into unwarranted and unnecessary litigation.

2. The Managing committee members may be empowered to spend lacs of rupees on court litigations, but every penny spend by the Society on aforesaid unwarranted and unnecessary litigation will sought to be recovered personally from every Managing Committee Member, for the said litigation had ensued on account of negligence and omission to perform duties and functions cast upon the Managing committee members, under the Act, Rules, and the bye law of the Society; and despite being well aware that they are manifestly acting illegally, they are acting against the mandate of MCS Act, MCS Rules and the Bye laws of the Society, and yet they have deliberately thrown the Society into unwarranted and unnecessary litigation.

Thanking you in anticipation of your effective action in this regard.

Yours faithfully,

Sandeep Jalan
Advocate.

ANNEXURE A

MCS Act, 1960

Section 22(1) - Person who may become member: Subject to the provisions of section24, no person shall be admitted as a member of a society except the following, that is to say-- (a)an individual, who is competent to contract under the Indian Contract Act, 1872;

Section 22(2) Where a person is refused admission as a member of a society, the decision (with the reasons therefor) shall be communicated to that person within fifteen days of the date of the decision, or within three months 5 [from the date of receipt of the application for admission, whichever is earlier. If the society does not communicate any decision to the applicant within three months from the date of receipt of such application the applicant shall be deemed to have been6 [admitted] as a member of the society.] 7 [If any question arises whether a person has become a deemed member or otherwise, the same shall be decided by the Registrar after giving a reasonable opportunity of being heard to all the concerned parties.]

Section 23 - Open membership
(1) No society shall, without sufficient cause, refuse admission to membership to any person duly qualified therefor under the provisions of this Act and its by-laws.

Section 23(2) Any person aggrieved by the decision of a society, refusing him admission to its membership, may appeal to the Registrar. 3[Every such appeal, as far, as possible, be disposed of by the Registrar within a period of three months from the date of its receipt:
Provided that, where such appeal is not so disposed of within the said period of three months, the Registrar shall record the reasons for the delay.]
(3) The decision of the Registrar in appeal shall be final and the Registrar shall communicate his decision to the parties within fifteen days from the date thereof.

Section 25: Cessation of Membership: A person shall cease to be a member of a society on his resignation from the membership thereof being accepted, or on the transfer of the whole of his share or interest in the society to another member, or on his death, or removal or expulsion1[from the society, or where a firm, company, any other corporate body, society or trust is a member, on its dissolution or ceasing to exist.]

Section 25A - Removal of names of members from membership register
The committee of a society shall remove from the register of its members the name of a person who has ceased to be a member or who stands disqualified by or under the provisions of this Act for being the member or continuing to be the member of a society:
Provided that, if the society does not comply with the requirement of this section, the
Registrar shall direct such society to remove the name of such person, and the society shall be bound to comply with such direction.

Section 30 - Transfer of interest on death of member:
(1) On the death of a member of a society, the society shall transfer of the deceased member to a person or persons nominated in or, if no person has been so nominated to such person as may be the heir or legal representative of the deceased member.

Section 38 - Register of members
(1) Every society shall keep a register of its members and enter therein the following particulars, that is to say,--
(a) the name, address and occupation of each member;
(b) in the case of a society having share capital, the share held by each member;
(c) the date on which each person was admitted a member;
(d) the date on which any person ceased to be a member; and
(e) such other particulars as may be prescribed:
Provided that, where a society has by or under this Act, permitted a member to transfer his share or interest on death to any person, the register shall also show against the member concerned the name of the person entitled to the share or interest of the member, and the date on which the nomination was recorded.

(2) The register shall be prima facie evidence of the date on which any person was admitted to membership, and of the date on which he ceased to be a member.

Section 73 - Committee, its powers and functions
1 [(1)] The management of every society shall vest in a committee, constituted in accordance with this Act, the rules and by-laws, which shall exercise such powers and perform such duties as may be conferred or imposed respectively by this Act, the rules and the by-laws.

[(1AB) The members of the committee shall be jointly and severally responsible for all the decisions taken by the committee during its term relating to the business of the society. The members of the committee shall be jointly and severally responsible for all the acts and omissions detrimental to the interest of the society. Every such member shall execute a bond to that effect within fifteen days of his assuming the office, in the form as specified by the State Government by general or special order. The member who fails to execute such bond within the specified period shall be demand to have vacated his office as a member of the committee]:

Section 78.1 [Power of removal of committee or member, thereof]
2 [(1) If, in the opinion of the Registrar, the committee of any society or any member of such committee makes default, or is negligent in the performance of the duties imposed on it or him by this Act or the rules or the bye-laws, or commits any act which is prejudicial to the interests of the society or its members, or willfully disobeys directions issued by the State Government, or by the Registrar for the purposes of securing proper implementation of co-operative policy and development programme approved or undertaken by the State Government or is otherwise not discharging its or his functions properly and diligently 3 [or where a situation has arisen in which the committee or any member of such committee refuses or has ceased to discharge its or his functions] and the business of the society has or is likely to come to a stand-still or where any member of such committee stands disqualified by or under this Act for being a member, the Registrar may, after giving the committee or the member, as the case may be, an opportunity of stating its or his objections, if any, within 15 days from the date of receipt of notice and after consultation with the federal society to which the society is affiliated, by order--
(a) (i) remove the committee, and

Section 79 - Registrar's power to enforce performance of obligations
(2) Where any society is required to take any action under this Act, the rules or the byelaws, or to comply with an order made under the foregoing sub-section, and such action is not taken--
(a) within the time provided in this Act, the rules or the bye laws, or the order as the case may be, or
(b) where no time is so provided, within such time, having regard to the nature and extent of the action to be taken, as the Registrar may specify by notice in writing. the Registrar may himself, or through a person authorized by him, take such action, at the expense of the society; and such expense shall be recoverable from the society as if it were an arrear of land revenue.

Section 79A - Government's power to give directions in the public interest, etc.
(1) 3 [If the State Government, on receipt of a report from the Registrar or otherwise, is satisfied] that in the public interest or for the purposes of securing proper implementation of co-operative production and other development programmes approved or undertaken by Government, or to secure the proper management of the business of the society generally, or for preventing the affairs of the society being conducted in a manner detrimental to the interests of the members or of the depositors or the creditors thereof, it is necessary to issue directions to any class of societies generally or to any society or societies in particular, 4 [the State Government may issue] directions to them from time to time, and all societies or the societies concerned, as the case may be, shall be bound to comply with such directions.

Section 89A - Power to inspect working of society
(1) It shall be competent for the Registrar to inspect or cause to be inspected the working of any society to ensure that--
(a) The provisions of the Act, rules and bye-laws of the society are being properly followed by the society;

MCS Rules, 1961

Rule 19A: Procedure for tendering application to the Registrar for membership under section 23(1 A):- (1) Where a society has refused to accept the application for membership from eligible person, such person shall tender an application to the Registrar in Form 4H-T together with requisite share money and entrance fee

(2) The Registrar, on receipt of such application, shall forward the same to the society concerned together with requisite share money and entrance fee within thirty days from the date of its receipt.
(3) The Society shall take the decision and communicate the same to the applicant within sixty days from the date of receipt of such application as provided in sub-rule (2) and if no decision is communicated to the applicant within the said period of sixty days, the applicant shall be deemed to have been admitted as a member of such society.
(4) In case the society refuses to admit the applicant as its member, it shall communicate the decision within the period of sixty days mentioned in sub-rule (3) with reasons therefor and refund the share money and entrance fee with such communication. If the society fails to refund the said amount, it shall be liable to pay interest at 15% per annum on the said amount from the date of such communication and the said amount if not paid, shall be recovered as an arrears of land revenue.]

Rule 32. Register of Members:- The register of members to be kept by every society under sub section (i) of Section 38 shall be in Form ‘I’.

Rule 33. List of Members:- The list of members to be kept by every society under Section 39 shall be in Form ‘J’

Rule 64. Procedure for appointment, suspension, and removal of members of the committee and other officers, etc:- (J) Notwithstanding anything contained in the by-laws of a society but subject to the provisions of Section 78, the Registrar may l[by an order stating the reasons therefor;]
(a) Remove the committee of a society and appoint a new committee in its place consisting of three or more members of the society to manage the affairs of the society; or
(b) Remove the committee and appoint one or more administrators, who need not be members of the society, to manage the affairs of the society; or
(c) Remove any member of the committee of a society and appoint in his place such other member as he may deem fit.
(2) Before making any order under sub-rule (I), the Registrar shall consult the federal society to which the society is affiliated and give an opportunity to the committee or the member concerned to show cause, within fifteen days from the date of issue of notice, why such an order shall not be made.
(3) The member appointed under clause (c) of sub-rule (J) shall hold office so long as the member in whose place he is appointed would have held office, if the vacancy had not occurred.
(4) Notwithstanding anything contained in the by-laws regarding holding any meeting of the society, the Registrar may, by special or general order specify the procedure for holding meetings of the Committee appointed by him under clause (a) of sub-rule (J).
(5) Immediately after the appointment of a new committee or an administrator or administrators under sub-rule (I), the committee in whose place such appointment is made and officers of the society shall give the new committee or the administrator or administrators, as the case may be, the of the property, documents and accounts of the society .

Bye Laws

Bye law No.17: Eligibility of individuals for membership of the Society – (a) No individual shall be admitted as a member of a Society except the following: (1) who is competent to contract under the Indian Contract Act, 1872;

Bye law No.19: Conditions for individuals desiring to be members of the Society – (A) An individual who is eligible to the member of the Society and who has applied to the membership of the Society in the prescribed form, may be admitted as member by the Committee on complying with the following conditions:-
(i) he has fully paid the value of at least five shares of the Society, alongwith his application for membership;
(ii) he has paid the entrance fee of Rs.100/- alongwith the application for membership;
(iii) he has given the application, as prescribed the particulars in regard to any house, plot or flat owned by him or any of the members of his family, anywhere in the area of operation of the Society;
(iv) he has given the undertaking in the prescribed form to the effect that he shall use the flat for the purpose for which it was purchased by him;
(v) he has furnished an undertaking in the prescribed form, if he has no independent source of income;
(vi) he has sent, alongwith the application for membership of the Society a certified copy of the agreement, duly stamped entered into by him with the promoter (Builder) or Transferor under Section 4 of the Ownership Flats Act;
(vii) he has furnished such other undertakings / declarations, in the prescribed forms as are required under any law for the time being in force and such other information as is required under the bye laws of the Society alongwith the application for membership.

Bye law No.34: Subject to the provisions of the Section 30 of MCS Act, 1960, Bye law No.17A, or 19, on the death of a member, the Society shall transfer the shares and interest of the deceased member in the capital / property of the Society to the nominee / nominees and in proportion with the shares and interest held by the deceased member, in case the property is purchased by member and associate member jointly.

In the event of death of a member, Nominee / Nominees shall submit the application for membership within six months from the death of a member.

If there are more than one nominee, on the death of a member, such Nominees shall make joint application to the Society and indicate the name of the Nominee who should be enrolled as a member. The other Nominees shall be enrolled as Joint / Associate members unless the nominees indicate otherwise.

The Nominees shall also file an indemnity Bond in the prescribed form indemnifying the Society against any claims made to the Shares and interest of the deceased member in the capital / property of the Society, by any of them, in case only one Nominee is indicated by the Nominees for membership of the Society.

Bye law No.35: Transfer of Shares and interest of the deceased member in the capital / property of the Society to the heir – Where a member of the Society dies without making a nomination, or no nominees comes forward for transfer, the Society shall invite within one month from the information of his death, claims or objections to the proposed transfer of shares and interest of the deceased member, in the capital / property of the Society, by a Public Notice, in the prescribed form, exhibited on the Notice Board of the Society. It shall also publish such Notice in at least two local newspapers, having wide circulation. The entire expenses of publication of the Notice shall be recoverable from the value of shares and interest of the deceased member in the capital / property of the Society. After taking into consideration the claims or objections received, in response to the said Notice, and after making such inquiries as the Committee considers proper in the circumstances prevailing, the Committee shall decide as to the person, who in its opinion is the heir or legal representative of the deceased member. Such a person will be eligible to be a member of the Society subject to the provisions of the Bye-laws Nos. 17(a) or 19, provided that he gives an Indemnity Bond alongwith his application for membership in the prescribed form, indemnifying the Society against any claims made to the shares and interest of the deceased member in the capital / property of the Society, at any time in future by any person.

If there are more claimants than one, they shall be asked to make the affidavit as to who should become a member of the Society and such person, named in the affidavit shall furnish the indemnity Bond as indicated above alongwith application for membership, referred to above. If however, the Committee is not able to decide as to the person who is the heir / legal representative of the deceased member or the claimant do not come to the agreement, as to who should become the member of the Society, the Committee shall call upon them to produce Succession certificate from the competent court. If however, there is no claimant, the shares and interest of the deceased member in the capital / property of the Society shall vest in the Society.

Bye law No.39:
(a) The procedure for disposal of Applications for transfer of shares and interest of members in the capital / property of the Society as laid down under the Bye law No.65 shall be followed by the Secretary and the committee of the Society.
(b) A meeting of the Committee or the General body, as the case may be, shall not refuse any application for admission to membership of transfer of shares and interest in the capital / property of the Society except on the ground of non – compliance of the provisions of the Act, Rules and the Bye laws of the Society, or any other law or order issued by the Govt in exercise of the statutory powers vested in it.
(c) If the decision of the Committee /General body meeting, as the case may be, on the Application for transfer of shares and interest in the capital / property of the Society is not communicated to the Applicant within 3 months of its receipt, the transfer application shall be deemed to have been accepted and the transferee shall be deemed to have been admitted as a member of the Society as provided under section 22(2) of the Act.

Bye law No.61: The Committee shall record the fact of cessation of member’s membership of the Society under the Bye law No.57 and of associate and nominal member’s membership respectively under the Bye laws Nos. 58, 59 and 60 in the minutes of its meeting and accordingly the Secretary of the Society shall inform the concerned member in writing within 7 days of the date of such decision of the committee.

Bye law No.65: Disposal of applications:
(a) All the applications for (i) admission to membership of the Society, including Associate and Nominal membership, (ii) approval to the transfer of shares and interest in the capital / property of the Society, (iii) permission for sub-letting or giving flats or parts thereof on leave and license or care taker basis, (iv) permission for additions and alterations in the flat, (v) allotment of parking space and stilts, (vi) permission for exchange of flats, (vii) permission for holding additional flats, (viii) permission for assigning, mortgaging or creating charge or interest in flats, (ix) permission for use of terrace, (x) for any other purpose provided under the bye law but not specifically mentioned above, shall be addressed to the Secretary of the Society. Every application received by the Secretary shall be acknowledged by him;

(b) on receipt of the applications, the Secretary of the Society shall scrutinize them and bring any shortcoming therein to the notice of the member concerned within 7 days of their receipt for compliance;

(c) The Secretary shall place all the applications, complete in all respects, or incomplete, before the meeting of the Committee or the general body, as the case may be, held next after receipt of the applications;

(d) The Committee or the general body as the case may be, shall consider all such applications at its meeting and take decisions thereon;

(e) The Committee shall ensure that all the applications received by the Secretary of the Society are disposed off within the maximum period of 3 months from the date of their receipt;

(f) If the Committee or the general body, as the case may be, rejects any application, it shall record, in the minutes of its meeting, the reasons for rejection of the application;

(g) The Secretary of the Society shall communicate the decision of the Committee or the general body as the case may be, to the applicant concerned, within 15 days of the decision of the Committee or the general body as the case may be. If the Society does not communicate the decision to the applicant within three months from the date of receipt of application for membership, including nominal or associate membership, the applicant shall deemed to have been admitted as a member as provided under section 22(2) of the Act.

Bye law No.113: Exercise of powers by the Committee: subject to the direction given or regulation made by a meeting of the general body of the Society, the Committee shall exercise all powers, expressly conferred on it, and discharge all functions entrusted to it under the Bye law No.139.

Bye law No.138: The Members of the Committee shall be jointly and severally liable for making good any loss which the Society may suffer on account of their negligence or omission to perform any of the duties and functions cast on them, under the Act, Rules, and the bye law of the Society.

Bye law No.139: Power, duties and functions of the Committee: Subject to the Bye law No.113, the Committee shall exercise the powers and discharge the functions and duties as mentioned hereunder: (8) To consider and decide the applications for various purposes received by the Society.

Bye law No.139(37) To take the decision on the complaint application in the coming Committee meeting and inform the concerned member of its decision accordingly.

Bye law No.141: Functions of the Secretary: The functions of the Secretary of the Society shall be those mentioned below: (8) To deal with the applications for various purposes received by the Society. (13) To record the minutes of all the meetings of the general body. (22) To discharge such other function under the Act, the Rules and the Bye laws of the Society and directions of the Committee, as are not expressly not mentioned hereinabove. (23) To place the complaint application with facts, before the Committee in the coming meeting.

Bye Law No.144: Unless otherwise decided by the Committee, it shall be the responsibility of the Secretary of the Society to maintain and keep up to date the account books, registers, and other records mentioned under Bye laws Nos 142 and 143.

http://commonlaw-sandeep.blogspot.com/2011/11/how-to-deal-with-whims-and-fancies-of.html

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a Catalogue of Legal solutions

2011-06-01T19:43:00.000-07:00

Jalan’s
Legal Referencer

Dear Citizens of India,

Our Life security and progress are sought to be secured through enacted Laws and its enforcement and, I felt the need to throw some light on laws of the land which are enacted to secure our life and property, and the enforcement machinery available, to enforce said laws of the land.

This is a Legal Referencer wherein most pressing / critical and common issues of our society have been identified, with all probable legal remedy which may be pursued to redress the issue is suggested herein in this Referencer; and insight to the suggested legal remedy and the procedure to pursue the legal remedy is provided in the respective chapter and in the standard draft.

Before I begin with, it may be useful to trace the roots of historical relationship between State & Citizens, and may be essential to understand and to trace the evolution and development of law, the emergence of concept of democracy, and to trace the origin of today's concept of “Citizens” & the “State”.

“State” in legal parlance implies the Nation; and the Constitution of India in Article 12 defines the “State” as every Public Authority / State Govts / Central Govts / Local Bodies / any other instrumentality of aforesaid Govts / Statutory Corporations, including private entities but discharging functions of keen public importance.

At the advent of Human Civilization, ‘Men’ were Sovereign in their own, in the sense that, they were free and were not subject to or bound by any law. Then, men were Ruled by their own conscience and not by codified laws and were even free to the extent of inflicting violence at their will & strength, i.e. Might is right was the scene. Men were guided by own conscience and greed. An action not emanating from reason and the freedom to do as one pleases.

Great Philosopher Thomas Hobbes (1588- 1671) says that prior to concept of Statehood, the man lived in chaotic conditions of constant fear. The life in the state of nature was solitary, poor, nasty, brutish and short. For getting self protection and avoiding misery and pain, man voluntarily entered into a contract and surrendered their part of freedom to some might authority, who could protect their lives and property, which emerged later on as the ruler and which ultimately culminated into the shape of the State.

With the great passage of time and centuries together, codified laws evolved and were introduced in human life. Men came together, they voluntarily surrendered their individual sovereignty to State sovereignty, and opted to subject themselves to laws of the land, however, they were promised, in return, the governance by codified laws. The governance by codified laws sought to promise the safety of their life & their property and also sought to guarantee the general dignity inherent in human person alongwith guarantee that he will not be discriminated. This is how the ancient Social contract between Men & State came into being.

Main thrust of the legal brains emphasizing on codification of laws has been firstly, as a means of attainment of human perfection and secondly to secure liberty to individuals in the society. They all considered liberty as the first pre-requisite for the development of human personality. In their view, a State is like a family to which the interests of its members are always dear at heart, like a family which would not be happy if its members are in difficulty, want or trouble, like a family which would not interfere unnecessarily with the free choice of its members.

And therefore, in the backdrop of ancient social contract, every Society & every Individual Citizen has certain basic assumptions to take it for granted from the State that-

(i) His Life & Property will be protected and his liberty will be secured;
(ii) He can appropriate for his own use what he has created by his own labour and what he has acquired under the existing economic order;
(iii) That others will act with due care and will not cast upon him an unreasonable risk of injury;
(iv) That others will not commit any intentional aggression upon him;
(v) That people with whom he deals will carry out their undertakings and will act in good faith;
(vi) That he will have security as a job holder;
(vii) That State will bear the risk of unforeseen misfortune;
(viii) That State will bear the burden of supporting him when he becomes aged;
(ix) That complaints made to “State” will be attended with due care and attention and is duly replied.

Among various definitions of “State” given by Scholars of law and by Philosophers, this appears to be more satisfactory and convincing. It is by professor Goodhart. He defines State in terms of its purpose. He states that the purpose of society which we call a State is to maintain peace and order within a demarcated territory. THE MINIMUM AND ESSENTIAL PURPOSE OF THE STATE IS TO MAKE LIFE POSSIBLE

Hugo Grotius (1583-1645) is regarded as the father of philosophical jurisprudence. He said- it is the first duty of the Sovereign State to safeguard the citizen because State was given power only for that purpose.

Good governance signifies the way “State” ameliorates the standard of living of the members of its society by creating, and making available, the basic amenities of life; providing its Citizens security and the opportunity to better their lot; instills hope in their hearts for a promising future; providing, on an equal & equitable basis, access to opportunities for personal growth; affording participation and capacity to influence, in the decision-making in public affairs; sustaining a responsive judicial system which dispenses justice on merits in a fair, unbiased and meaningful manner; and maintaining accountability and honesty in each wing or functionary of the “State”.

In a democracy, forms and degree of accountability may vary but the basic idea remains the same that the holders of Public Office must be publicly able to justify their exercise of power not only as legally valid but also socially wise just and reasonable, chiefly designed to add something more to the quality of life of its Citizens.

In many respects, we now live in a society that is only formally democratic, as the great mass of citizens has minimal say on the major public issues of the day, and such issues are scarcely debated at all in any meaningful sense in the electoral arena and where critical decisions are taken in closed chambers of Ministers & Bureaucrats.

Just because we cannot see clearly the end of the road, that is no reason for not setting out on the essential journey of law towards justice. The law is not dead, is only slept.

AN AGGRIEVED'S ACT OF SEEKING “COURTS' INTERVENTION”, IN FACT, IS AN APPEAL TO THE JUDICIAL CONSCIENCE OF THE SITTING JUDGE, TO DO THAT - WHICH ALL PRUDENT MAN WILL DO, IN THE FACTS OF THE CASE. DISPENSING JUSTICE IS NO ROCKET SCIENCE.

DISCLAIMER
Though due care has been observed in framing this WRITE UP, yet some discrepancies may have certainly entered in. This write up is framed with the limited understanding of the author. There is every likelihood that the suggestions made by author and legal views contained in CHAPTERS / STANDARD DRAFT, may turn out to be inappropriate / incorrect. This Write up will be regularly updated with the development of law and better understanding of the author.

In the circumstances, it is expressly agreed between Readers and this author that this author incurs no liability of whatsoever nature, if a reader claims to have incurred any loss of any nature, while using this Referencer. It is a criminal offence for making false charge / claim against any person or institute false criminal proceedings, in the court of law and is punishable under section 209 and 211 of Indian Penal Code(IPC), 1860, respectively; and whoever will make any such false charge / claim or institutes false criminal proceedings against the Author herein, shall be deemed to have committed the offence contemplated under aforesaid section 209 or 211 of IPC, 1860. A person may also be subject to damages for instituting false claim in the Court of law.

The readers are clearly and strongly advised to obtain guidance of Legal experts or of any other person as they think fit, before they act upon the suggestions made in this write up. It is also requested that if a reader finds any discrepancy, or has any suggestion to improve upon this, may please kindly mail me at legallyspeaking.jalan@gmail.com

ALL RIGHTS RESERVED.

SUBJECT TO EXCLUSIVE / ONLY MUMBAI JURISDICTION.

AND, IF YOU FIND THIS USEFUL, CONSIDER IT TO SHARE WITH YOUR DEAR ONES.
Thanks.
Sandeep Jalan, Advocate,
32 Rajpuria Baug,
N P Thakkar Road,
Vile Parle East,
Mumbai – 400057.
India.

(AA)
WHEN GRIEVANCE IS AGAINST ANY GOVT / STATUTORY / MUNICIPAL AUTHORITY / ANY PUBLIC AUTHORITY / PUBLIC OFFICER / TO ENFORCE THEIR LEGAL OBLIGATIONS – depending upon the nature of one’s case, the likely Remedies may be –

(i) Subject to availability of statutory remedy provided under the law, a complaint / Notice may be recorded to the concerned Public authority OR to its Regulating Authority / to the “State”, followed by filing Writ Petition in the respective High Court.
[PLEASE REFER CHAPTER 14; STANDARD DRAFT 1, 2, 3, 3A, 4, 5, 6, 7, 8, 9, 10, 11]

(ii) In the alternative of pursuing aforesaid Writ remedy, or those who have not immediate access to High Court, may file a Civil Suit before the District Court, for the relief of Mandatory Injunction, as defined under Section 39 read with Section 2(a) of the Specific Relief Act, 1963, or Declaration as contemplated under section 34 of the Specific Relief Act, 1963, seeking necessary reliefs. But before filing Civil Suit against any Public authority / officer, one is obliged to give notice under section 80 of CPC, 1908, to the concerned Public authority / officer. However, in urgent situation, one can file the Suit without issuing the said notice, specifying therein the reasons for urgency in filing the Suit.
[PLEASE REFER CHAPTER 2 & 15; STANDARD DRAFT 1 & 12]

(iii) Where it is alleged that a Public Officer is occupying a Public Office although he/she does not satisfy the qualifications prescribed for holding that Public office, then a Writ of Quo Warranto may be filed in the respective High Court for the removal of that Public Officer.
[PLEASE REFER CHAPTER 14; STANDARD DRAFT 13]

(iv) A complaint may be recorded to Anti corruption agencies like CBI, ACB, CVC, followed by a Writ Petition in the respective High Court if these aforesaid Agencies doesn’t act on the Complaint.
[PLEASE VISIT RESPECTIVE WEBSITE] [PLEASE REFER STANDARD DRAFT 1 & 2]

(v) A complaint may be recorded to Human Rights Commission, followed by a Writ Petition in the respective High Court if the said Human Rights Commission doesn’t act on the Complaint.
[PLEASE REFER CHAPTER 16; STANDARD DRAFT 14, 2]

(vi) Where grievance is against a particular Public servant, then depending upon the nature of alleged illegal acts of said Public Servant, FIR to Police under Section 166, 167, 217, 218, 221, 409 or under any other Section of IPC 1860 may be made, or an Application u/s 156(3) to the Magistrates Court or a Complaint may be made before competent Magistrates Court under section 200 of CrPC, 1973.
[PLEASE REFER CHAPTER 3 & 17; STANDARD DRAFT 15 & 16]

(vii) Where the grievance is in particularly relating to “Public Nuisance”, then a complaint may be recorded to District Magistrate (Collectorate of the District) / Commissioner of Police (in Metropolitan areas), under section 133 of CrPC, 1973. Refer Landmark SC Judgment - Ratlam Municipality versus Vardichand, year 1980.
[PLEASE REFER CHAPTER 3; STANDARD DRAFT 17]

(viii) An RTI application may be made, thereby seeking information as what action has been taken on the complaint made, so as to compel Public servants to perform their duties.
[PLEASE REFER CHAPTER 19; STANDARD DRAFT 18]

(ix) A Writ Petition may be filed in the respective High Court for seeking damages / compensation, if the alleged “inaction” of the public authority / public officer has resulted in frustration / deprivation of “life and liberty” of any person, as guaranteed under Article 21 of Constitution of India.
[PLEASE REFER CHAPTER 14; STANDARD DRAFT 5]

(x) A civil suit for seeking damages / compensation may be filed in the District Court / High court, if the alleged “inaction” of the public authority / public officer has directly resulted in manifest loss of property or reputation of the aggrieved citizen.
[PLEASE REFER CHAPTER 2 & 15; STANDARD DRAFT 1 & 12]

(xi) Where the Public authority is discharging quasi judicial function or if one is aggrieved by the illegal notice / order passed by any Public authority; or is aggrieved by the fact that a Public authority has not given proper hearing / opportunity of presenting his case; or if the said authority is acting illegally in any manner, then,
PLEASE REFER POINT LL, MM STATED HEREINAFTER. [PLEASE REFER CHAPTER 6]

(BB)
WHEN FACING ILLEGALITIES OF POLICE – HERE FOUR KIND OF ILLEGALITIES HAVE BEEN IDENTIFIED

ILLEGALITY NO.1 – WHEN POLICE REFUSE TO REGISTER FIR / COMPLAINT

(i) Approaching the Superintendent of Police or the Commissioner of Police (in Metropolitan areas) and recording the complaint with him.
[PLEASE REFER CHAPTER 17; STANDARD DRAFT 15]

(ii) An Application can be made under section 156(3) read with section 190 of CrPC, 1973, before the Judicial Magistrate / Metropolitan Magistrate, seeking relief, thereby Magistrate directing the Police to register the FIR, Investigate the case and file the Report / chargesheet.

(iii) If the complainant has substantial evidence against the accused person, and if he is prepared to handle the prosecution of the accused person, then, he may prefer an oral / written Complaint before Judicial Magistrate / Metropolitan Magistrate under section 200, seeking relief, thereby Magistrate may directly issue summons to the person made accused in the complaint u/s 204 or may summons witnesses of the complainant before issuing summons to the persons made accused in the complaint u/s 202.
[PLEASE REFER CHAPTER 3 & 17; STANDARD DRAFT 15 & 16]

(iv) A Writ Petition in the respective High Court may be filed for the issuance of Writ of Mandamus against the defaulting Police officers, directing them to show cause why they have not registered the FIR.

(v) An Application can be made under section 156(3) as stated hereinabove, or a complaint u/s 200 as aforesaid, against those Police officers who have refused to register FIR, can be registered before Judicial Magistrate / Metropolitan Magistrate, for Police having committed offence under section 217 of IPC, 1860.
[PLEASE REFER CHAPTER 3 & 17; STANDARD DRAFT 15 & 16]

(vi) A Contempt Petition (Civil) can be filed against Police officers who have refused to register FIR. There are series of High Courts and Supreme Court Judgments which clearly mandates that Police must register FIR whoever comes to them, with a Complaint that discloses a Cognizable offence. The Contempt proceedings are held only in High Courts and in Supreme Court. Also, refusing to register an FIR amounts to Criminal contempt of the court. If criminal contempt is preferred, then permission of the Advocate General of the respective State Govt must be obtained before filing Criminal Contempt Petition, or in the alternative, after filing of Criminal Contempt Petition, the concerned High Court may be requested to take Su Moto Cognizance of the alleged criminal contempt of the Court.
[PLEASE REFER CHAPTER 20; STANDARD DRAFT 19]

(vii) As aforesaid, an application u/s 156(3) or complaint under section 200, to Judicial Magistrate / Metropolitan Magistrate, can be made where if the alleged offence is defined as Non Cognizable (NC) offence in the Act.
[PLEASE REFER CHAPTER 3; STANDARD DRAFT 16]

(viii) A Writ Petition may be filed in respective High Court for seeking damages / compensation, if the “inaction” of the Police on the complaint / non registration of FIR, has resulted in frustration / deprivation of “life and liberty” of any person, guaranteed under Article 21 of Constitution of India.
[PLEASE REFER CHAPTER 14; STANDARD DRAFT 5]

(ix) A civil suit for seeking damages may be filed in the District Court / High court, if the “inaction” of the Police on FIR / Complaint has directly resulted in manifest loss of property.
[PLEASE REFER CHAPTER 2 & 15; STANDARD DRAFT 1 & 12 ]

ILLEGALITY NO.2 – WHEN FALSE FIR IS REGISTERED; AND ARREST IS ANTICIPATED – THEN DEPENDING UPON THE PECULIAR FACTS OF EACH CASE,
FOLLOWING ACTION MAY BE TAKEN –

(i) Recording a letter to the concerned Police station where the false FIR is filed, with a copy to Superintendent of Police or Commissioner of Police, advising the Police authority that in case the Police intends to arrest the Person named in the false FIR, then they should scrupulously / strictly follow the due process of law and strictly adhere to the guidelines framed by SC in the Joginder Kumar case. The said guidelines, on the specific directions of the Supreme court in the aforesaid judgment, are issued by DGP of each State to all the Police stations in the State.
[PLEASE REFER CHAPTER 3; STANDARD DRAFT 20]

(ii) Obtaining Anticipatory Bail from Sessions court or High Court under section 438 of CrPC, 1973.
[PLEASE REFER CHAPTER 3; STANDARD DRAFT 21]

(iii) In lieu of Application for Anticipatory Bail, a Writ Petition in the respective High Court under Article 226 of Constitution of India may be filed, seeking a Writ of Mandamus, thereby the HC directing the Police authorities to scrupulously follow the due process of law and strictly adhere to the guidelines framed by SC in the Joginder Kumar case, in case the Police intends to arrest the Petitioner (the person named in the FIR).
[PLEASE REFER CHAPTER 3 & 14; STANDARD DRAFT 22]

(iv) As aforesaid, an application u/s 156(3) or complaint under section 200, to Judicial Magistrate / Metropolitan Magistrate, against those Police officers who have “knowingly” registered false FIR / or have falsely arrested / or if are falsely prosecuting the case, alleging therein your complaint that said Police officer have committed the offence defined under section 218 and 220 of IPC, 1860. Nevertheless, a regular FIR can also be lodged against the said Police officers u/s 154.
[PLEASE REFER CHAPTER 3; STANDARD DRAFT 16]

(v) A Writ Petition under Article 226 of Constitution read with Section 482 of CrPC, 1973 may be filed, before respective High Court, for High Court in the exercise of their inherent powers, to quash the said false FIR.
[PLEASE REFER CHAPTER 3 & 14; STANDARD DRAFT 23]

(vi) Where the chargesheet is filed by the Police before the competent Magistrates court, the innocent accused person may file a discharge Application before the concerned Magistrates court under section 239 of CrPC, 1973 as may be applicable. Where the case is committed to Sessions Court, then the discharge Application can be filed before the Sessions Court u/s 227 of CrPC.
[PLEASE REFER CHAPTER 3; STANDARD DRAFT 24]

(vii) It is a criminal offence under section 182 and 211 of IPC, 1860 to knowingly register a false complaint against any person. In such cases the innocent person cannot register FIR, but (a) A complaint can be made to the Police officer to whom false complaint has been made, or complaint can be made to a higher authority of the said Police officer, about the filing of said false complaint, and the concerned Police officer or the higher authority, is empowered to file the case against the person who has made false complaint to the Police; (b) A compliant u/s 200 of CrPC can be made before the competent Magistrate court alleging that certain person has made false accusation.

(viii) Where, in pursuance to said false complaint, criminal proceedings before the court have been initiated, then, an Application under section 340 read with section 195 of CrPC 1973, may be preferred before the said Magistrate / Sessions court, against those persons, praying therein for Magistrates court to refer the said offence of false accusation to the appropriate / competent Magistrate Court of jurisdiction. (IPC Section 182: False information, with intent to cause public servant to use his lawful power to the injury of another person. IPC Section 211: False charge of offence made with intent to injure.)
[PLEASE REFER CHAPTER 3 & 11; STANDARD DRAFT 25]

(viii) where the Magistrates Court acquits the person against whom false FIR / Complaint is made, Compensation may be sought under section 250 of CrPC, 1973, from that Magistrates court, against the persons who have knowingly filed false FIR / complaint.
[PLEASE REFER CHAPTER 3; STANDARD DRAFT 26]

ILLEGALITY NO.3 – WHEN POLICE ILLEGALLY ARREST –

(i) Whenever Police intends to arrests any person, among other things, it is obligatory upon police (a) to clearly inform him about the offence he is alleged to have committed; (b) the Police are obliged to immediately inform to any of the friend or relative of the arrested person about the arrest of that person. The arrested person or his relative / friend may record a Letter to the concerned Police station, stating therein about the position of law as regards to restrictions in powers of arrests, and that the Police officer effecting arrest is not following the mandate of law and knowingly disregarding the guidelines framed by SC in the case of Joginder Kumar versus State of U.P., 1994, for effecting arrests, and thereby advising the Police to release the arrested person forthwith. Relevant sections pertaining to powers of arrests and bail are 41, 57, 157, 167, 172, 389, 436, 437, 438, 439 of CrPC, 1973. The SC guidelines, before arrests is provided in the case of Joginder Kumar and SC guidelines after effecting arrests is provided in the case of D K Basu versus State of West Bengal.
[PLEASE REFER CHAPTER 3; STANDARD DRAFT 27]

(ii) The relative / friend of the arrested person may file a Writ Petition of Habeas Corpus before respective High Court for the alleged illegal arrest and seeking immediate release of the person illegally arrested.
[PLEASE REFER CHAPTER 14; STANDARD DRAFT 28]

(iii) Any person who is arrested must be produced before the nearest Judicial Magistrates court within 24 hours of his arrest. When the arrested person is produced before the Judicial Magistrates, the arrested person or his relative / friend may present a Bail Application seeking Bail before concerned Magistrates Court and inform the Magistrate, among other things, that the said arrest is patently illegal, for being effected without following the due process of law and in willful disregard / defiance of guidelines framed by SC in the case of Joginder Kumar versus State of U.P., 1994.
[PLEASE REFER CHAPTER 3 & 21; STANDARD DRAFT 29]

(iv) If one cannot go to High Court for Writ Petition of Habeas Corpus, then, either by personally approaching or by making an Application to State Human Rights Commission, National Human Rights Commission; by making an Application to the Registry of the Supreme Court and also to respective High Court, stating therein about the said illegal arrest effected, in willful disregard of the directions given by the SC in Joginder Kumar case; followed by an RTI Application to State Human Rights Commission, National Human Rights Commission, to the Supreme Court and to respective High Court, on steps taken by them in pursuance to said RTI Application. Life and Liberty clause under RTI may be invoked to obtain information within 48 hours.
[PLEASE REFER STANDARD DRAFT 31, 32 & 33]

(v) Writ of Mandamus may be preferred before respective High court seeking exemplary Damages / Compensation from respective State Government, but only after the High Court in the Writ of Habeas Corpus, OR the concerned Magistrates Court had released the accused, and recording in his Order that the said arrests was illegal, OR the concerned Human Rights Commission comes to the conclusion that the said arrest was illegal.
[PLEASE REFER CHAPTER 14; STANDARD DRAFT 5]

(vi) A Contempt Petition (Civil) before respective High court can be filed alleging therein that the Police illegally arrested the Petitioner in willful disobedience / defiance to SC guidelines framed in aforesaid Joginder Kumar case.
[PLEASE REFER CHAPTER 20; STANDARD DRAFT 19]

(vii) An FIR to Police / direct complaint before Magistrates Court u/s 200 of CrPC, 1973, may be preferred against the concerned Police officer who have illegally arrested and has thereby committed the offence defined under Sections 220 and 342 of IPC 1860. [PLEASE REFER CHAPTER 3 & 17; STANDARD DRAFT 15 & 16]

ILLEGALITY NO.4 – WHEN POLICE NEGLECTS TO INVESTIGATING THE CASE.

(i) Writ Petition under Article 226 of Constitution of India, may be made to the respective High Court, thereby HC directing the Police to make thorough investigation, or directing the State Govt to refer the case to an independent agency like CBI or CID for thorough investigation.
[PLEASE REFER CHAPTER 3 & 14; STANDARD DRAFT 35, 36]

(ii) An Application u/s 156(3) as aforesaid, before the Judicial Magistrate / Metropolitan Magistrate, for directing the Police to carry out proper investigation and file Report; or complaint u/s 200 before Judicial Magistrate / Metropolitan, for Hon’ble Magistrate to cause an Inquiry u/s 202 into the case himself or may direct an Investigation by a particular Police officer as the Magistrate thinks fit.
[PLEASE REFER CHAPTER 3; STANDARD DRAFT 16]

(iv) An FIR u/s 154 or complaint under section under section 200 of CrPC, 1973, can be made before Judicial Magistrate / Metropolitan Magistrate against those Police officers u/s 217, 221 of IPC, 1860, who have deliberately and dishonestly neglected to investigate the case.
[PLEASE REFER CHAPTER 3 & 17; STANDARD DRAFT 15 & 16]

(v) A Writ Petition may be filed in respective High Court for seeking damages / compensation, if the “inaction” of the Police in investigating the case has resulted in frustration of “life and liberty” of a person, guaranteed under Article 21 of Constitution of India.
[PLEASE REFER CHAPTER 14; STANDARD DRAFT 5]

(vi) A civil suit for seeking damages may be filed in the District Court / High court, if the “inaction” of the Police has directly resulted in manifest loss of any property.
[PLEASE REFER CHAPTER 2 & 15; STANDARD DRAFT 1 & 12 ]

(CC)
WHEN A CHEQUE IS DISHONOURED –
depending upon the nature of one’s case, the likely Remedies may be

(i) If there exist any Arbitration clause in the Contract / Agreement / Invoice or in the absence of Arbitration clause, by consent of the other side, one may adopt Arbitration proceedings for the recovery of cheque amount..
[PLEASE REFER CHAPTER 27]

(ii) A Summary Suit, contemplated under Order XXXVII of Civil Procedure Code, 1908, in the respective High Court or in the District Court, can be filed for the recovery of said dishonoured cheque amount.
[PLEASE REFER CHAPTER 23; STANDARD DRAFT 37]

(iii) Issuing statutory Notice under Section 138 of Negotiable Instrument Act 1881, followed by filing Criminal Complaint to the Judicial Magistrate / Metropolitan Magistrate u/s 200 of CrPC.
[PLEASE REFER CHAPTER 24; STANDARD DRAFT 38 & 16]

(iv) In case, the dishonoured cheque was given by an individual or by a proprietorship firm or by a Partnership firm, a notice (not statutory) followed by an Insolvency Petition in the High Court or in the District Court, can be filed against that individual / proprietor / partners.
[PLEASE REFER CHAPTER 25; STANDARD DRAFT 39 & 40]

(v) In case, the dishonoured cheque was given by a Private or Public Limited Company, a Statutory Notice u/s 433 / 434 / 439 of the Companies Act, 1956, followed by Winding up Petition can be filed in the High Court against that Company.
[PLEASE REFER CHAPTER 26; STANDARD DRAFT 41 & 42]

(vi) As aforesaid, an application u/s 156(3) or complaint under section 200, to Judicial Magistrate / Metropolitan Magistrate, may be filed, for the offence of cheating / mischief against the said individual / proprietor / partners / officials of the Company.
[PLEASE REFER CHAPTER 3 & 17; STANDARD DRAFT 15 & 16]

(DD)
WHEN ONE IS TO RECOVER SPECIFIED DEBT / MONEY, i.e. TO SAY RECOVERY OF LOAN, MONEY DUE UNDER COMMERCIAL TRANSACTIONS; MONEY DUE UNDER ANY CONTRACT / AGREEMENT; MONEY TO BE RECOVERED BY VIRTUE OF ANY LEGAL RIGHT / UNDER STATUTE, WHETHER FROM A PRIVATE PERSON / INDIVIDUAL OR FROM ANY PUBLIC AUTHORITY –
depending upon the nature of one’s case, the likely Remedies may be –

(i) If there exist any Arbitration clause in the Contract / Invoice or in the absence of Arbitration clause, by consent of the other side, one may adopt Arbitration proceedings for the resolution of the dispute and recovery of money. The Orders passed by Arbitrators can be enforceable like a decree of the Court.
[PLEASE REFER CHAPTER 27]

(ii) If there exist no Arbitration clause in the Contract / Invoice, then a Summary Suit, contemplated under Order XXXVII of Civil Procedure Code, 1908, in the respective High Court or in the District Court can be filed for the recovery of that specified ascertained debt / amount.
[PLEASE REFER CHAPTER 23; STANDARD DRAFT 37]

(iii) In case, the specified ascertained debt / amount is to be recovered from an individual or from a proprietorship firm or from a Partnership firm, then, depending upon the acts and omissions of the defaulter, a notice (not statutory) followed by Insolvency Petition in the High Court or the District Court, can be filed against that individual / proprietor / partners.
[PLEASE REFER CHAPTER 25; STANDARD DRAFT 39 & 40]

(iv) In case, the specified ascertained debt / amount is to be recovered from a Private or Public Limited Company, a Statutory Notice under section 433 / 434 / 439 of the Companies Act, 1956, followed by Winding up Petition can be filed in the High Court against that Company.
[PLEASE REFER CHAPTER 26; STANDARD DRAFT 41 & 42]

(v) As aforesaid, an application u/s 156(3) or complaint under section 200, to Judicial Magistrate / Metropolitan Magistrate, may be filed, for the offence of cheating / mischief against the said individual / proprietor / partners / officials of the Company.
[PLEASE REFER CHAPTER 3 & 17; STANDARD DRAFT 15 & 16]

(EE)
WHERE ONE HAS ALLEGED TO HAVE BEEN SUPPLIED / PROVIDED DEFECTIVE GOODS OR ONE HAS ALLEGED TO HAVE RENDERED DEFICIENT SERVICES, OR WHERE ANY PERSON IS ALLEGED TO HAVE INDULGING IN UNFAIR TRADE PRACTICES –
depending upon the nature of one’s case, the likely Remedies may be

(i) If the aggrieved person is a “consumer”, then, depending upon the amount of compensation claimed, a Consumer complaint can be filed against the provider of defective goods / deficient services, before the appropriate District Forum / State Commission or before the National Commission.
[PLEASE REFER CHAPTER 28 & 29; STANDARD DRAFT 43 & 44]

(ii) For deficiency in respect of Banking services, Banking Ombudsman may, in the alternative of Consumer courts, be approached;
Please visit RBI website.

(iii) Depending upon the nature of one’s case, as aforesaid, an application u/s 156(3) or complaint under section 200, to Judicial Magistrate / Metropolitan Magistrate can be filed.
[PLEASE REFER CHAPTER 3 & 17; STANDARD DRAFT 15 & 16]

(iv) A complaint to respective governmental regulatory body of said defaulting company can be made alleging that the said company is indulging in unfair trade practices; and in the event the said governmental regulatory body ignores / refuses to take any action against the said defaulting entity, then, a Writ Petition can be filed against that governmental regulatory body, in the respective High Court, seeking relief from HC, directing the said governmental regulatory body to take appropriate action against that entity who is indulging in unfair trade practices. What amounts to unfair trade practice is defined in the Consumer Protection Act, and also in Competition Act, 2002.
[PLEASE REFER CHAPTER 14; STANDARD DRAFT 1, 2, 3 & 4]

(v) In respect of business / commercial / trade disputes, where there exist any Arbitration clause in the Contract or in the absence of Arbitration clause, by consent of the other side, one may adopt Arbitration proceedings for the resolution of the dispute.
[PLEASE REFER CHAPTER 27]

(vi) With respect to “Unfair Trade Practices” a complaint may be preferred before the Competition Commission of India or even before the Consumer courts / State Commissions / National Commissions.
[PLEASE REFER CHAPTER 30; STANDARD DRAFT 45]

(vii) ACcivil suit in the District Court for seeking Injunction / damages may be filed in the District Court / High court, for the alleged supply of defective goods / rendering of deficient services.
[PLEASE REFER CHAPTER 2 & 15; STANDARD DRAFT 1 & 12]

(viii) In cases of big frauds alleged to have been committed by any Public or Private Ltd Company or by any business entity, then, Petition to Company Law Board may be preferred for directing investigation to Serious Fraud Investigation Office u/s 237 of the Companies Act, 1956 etc. [PLEASE REFER STANDARD DRAFT 46]

The goods includes all kinds of goods (Sale of goods Act) and Services includes – Banking, Financial, Transport / Cargo, Courier, Housing, Cellular services, Internet, Insurance, credit card, Medical, Educational etc.

(FF)
DISPUTES
ARISING IN THE REGULAR COURSE OF ANY BUSINESS ACTIVITY / TRADE RELATIONSHIP;
IN THE PERFORMANCE / EXECUTION OF CONTRACTS / AGREEMENTS / OTHER BUSINESS OBLIGATIONS.

(i) Where a person, who is entitled to the possession of any specific movable property, by virtue of being a owner of such specific movable property or by virtue of having a special or temporary right to possess such specific movable property, and who is unlawfully refused / denied to the possession of such specific goods / movable property, may by virtue of Section 7 of the Specific Relief Act, 1963, recover the said specific movable property, by filing a Suit for the recovery of said specific goods / movable property. [Movable property will include all kinds of goods, things – valuable and invaluable]

(ii) The Principal may compel the Agent to deliver any goods / movable property, which is held by the Agent on behalf of the Principal; or a person who is holding any goods / movable property as a trustee of another, by virtue of Section 8 of the Specific Relief Act, may be compelled by that another to deliver that property, by filing a Civil Suit in this regard.

(iii) Where any goods / movable property have been wrongly transferred to some other person, the same may be recovered, by virtue of Section 8 of the Specific Relief Act, by filing a Civil Suit.

(iv) Where a person against whom a Suit is filed, is making frivolous defences / defences untenable in law, he may be stopped / precluded from taking any such defences, by virtue of Section 9 of the Specific Relief Act, 1963.

(v) Where a party to the Contract is evading in performing his part of the Contract, thereby seriously prejudicing the other contracting party, the said other contracting party, by virtue of Sections 10, 12, 14(3), 19, 21, 22, 23, 42 and subject to Sections 14, 16, 17, 18, 20, 24 may by filing a Suit for Specific performance, cause the said defaulting party to perform his part of the contract and may also seek damages in addition to Specific performance, or may seek damages in lieu of Specific performance; and can also seek additional damages for breach of Contract.

The party enforcing specific performance of the contract, by virtue of Section 29 of the Specific Relief Act, in the alternative of specific performance, may seek rescission of the contract in case specific performance is refused by the court.

(vi) Where a person, who has purchased goods / movable property, from a person who has no title or has imperfect title to the said goods / movable property, the said purchaser, by virtue of Section 13 of Specific Relief Act, 1963, has a right and he –
(a) May compel the said other person to make good the title where in future the said other person acquired the title to such goods / movable property;
(b) May compel the said other person to procure the concurrence of a person whose concurrence will validate the title of the purchaser;
(c) Where in a case, the Seller had filed the Suit for Specific performance of the contract, and his said Suit is dismissed for want of title or imperfect title, the purchaser in the said Suit, can claim the refund of his amount paid over said goods / movable property and can also recover interest on the said amount paid including costs of the Suit.

(vii) Where the contracting parties find, that, either due to mutual mistake or due to fraud of one of the party, the contract entered into between them, in effect and in scope, does not convey the true purport it was intended and the contract is very different from what they had really agreed to, then, either of the contracting parties, by virtue of Section 26 of the Specific Relief Act, may institute a Suit for rectification of said defective instrument / contract, or the parties may in any existing Suit pray for such rectification.

The court may in its discretion, direct the rectification of the instrument so as to express that intention, so far as this rectification can be done without prejudice to the rights acquired by third party in good faith and for value.

Once the instrument is duly rectified by the Order of the Court, then, the said instrument may be specifically enforced by any of the contracting party.

(viii) Where consent to an agreement is obtained by coercion, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so obtained; and where both the parties to an agreement are under a mistake of fact essential to the agreement, the agreement is void. In such situation the defrauded party, by virtue of Section 27(1), subject to Section 27(2), has three remedies open to him, namely –
• He may rescind the contract absolutely and sue to recover the consideration parted with upon the fraudulent contract; or
• He may bring an action to rescind the contract and in that action have full relief; or
• He may retain what he has received and bring an action to recover the damages sustained.

The rescission of contract can also be sought of unlawful and terminable contracts.

(ix) Where written instruments / contracts, partially or wholly, originally valid, becomes inefficacious by subsequent events, such as, by satisfaction or payment, or other causes; and its existence casts either a cloud upon the title of the party or subject him to the danger of some future litigation; under such and like circumstances, the said party, by virtue of Section 31 and 32 of the Specific Relief Act, may file a Suit to declare the said whole or partial of the Written Instrument / contract, as void or voidable and get it cancelled.

(x) Where a person is entitled to a legal character or to any right as to any property and any person is denying or interested to deny the such entitlement, then, by virtue of Section 34 of the Specific Relief Act, the said aggrieved person may file a Suit for declaration by the Court that he is entitled for said legal character or is entitled to that property.

(xi) Where a person who has invaded or is threatening to invade the rights, legal or equitable, of another, the aggrieved person, by virtue of Section 36, 37, and 38 and subject to Section 41, of the Specific Relief Act, may file a Suit for temporary and permanent injunction.

By virtue of Section 40 of the Specific Relief Act, 1963, the aggrieved person, in addition to or in lieu of aforesaid injunction, may seek damages.

Injunction is a form of relief given, to prevent a party from doing which he is under an obligation not to do, or called upon to do a certain ac, which he is under an obligation to do.

(xii) Where to prevent the immediate and imminent breach of an obligation, the obligation whether arising from contract or Statute, and where it is necessary to compel the performance of certain acts, which the court is capable of enforcing its performance, then, by virtue of Section 39 of the Specific Relief Act, a Suit for Mandatory injunction may be filed for the issuance of said injunction.

(GG)
WHEN YOU ARE HOLDING SHARES IN A PUBLIC LIMITED COMPANY OR IF YOU HAVE GRIEVANCE AGAINST A COMPANY OR YOU HAVE A GRIEVANCE AGAINST THE STOCK BROKER OR YOU HAVE A GRIEVANCE AGAINST THE STOCK EXCHANGE –
depending upon the nature of one’s case, the likely Remedies may be –

(i) So far as may be permissible under the law, and if there exist any Arbitration clause in the Contract or in the absence of Arbitration clause, by consent of the other side, one may adopt Arbitration proceedings for the resolution of the dispute.
[PLEASE REFER CHAPTER 27]

(ii) Complaint to SEBI: For all these below listed issues complaint can be made online to SEBI, at prescribed format therein provided in SEBI website. And where SEBI fails to take appropriate / desired action against the Company / Stock Broker / Stock Exchange, then Writ Petition may be filed in the respective High Court against SEBI for its inaction.

1. Against Listed Companies – like – Refund / Allotment / Dividend / Transfer / Bonus / Rights/ Redemption / Interest;
• Pre-listing / Offer Document
• De-listing of Shares / Securities
• Buy-Back of Shares / Securities
• Takeover and Restructuring
• Corporate Governance / Listing Conditions

2. Registrar and Transfer Agents
3. Stock Brokers
4. Sub Brokers
5. Portfolio Managers
6. Stock Exchanges
7. Depository
8. Mutual Fund Companies
9. Collective Investment Schemes
10. Merchant Bankers
11. Debenture Trustees
12. Bankers to an issue
13. Credit Rating Agencies
14. Custodian of Securities
15. Foreign Institutional Investors
16. Underwriters
17. Venture Capital Funds
18. Price / Market manipulations
19. Insider Trading

(iii) A Petition to Company Law Board may be made for – Oppression of minority shareholders or Mismanagement of the Company, disputes relating to non transfer of Shares by Companies, non refund of Public deposits by Companies.
[PLEASE REFER CHAPTER 32; STANDARD DRAFT 46]

(iv) On subjects where Company Law Board has no jurisdiction, Civil Suit for Injunction / Declaration before District Court may be preferred.
[PLEASE REFER CHAPTER 2 & 15; STANDARD DRAFT 1 & 12]

(v) Depending upon the nature of one’s case, a Winding up Petition to the respective High Court may be preferred.
[PLEASE REFER CHAPTER 26; STANDARD DRAFT 41 & 42]

(vi) Depending upon the nature of one’s case, as aforesaid, an application u/s 156(3) or complaint under section 200, to Judicial Magistrate / Metropolitan Magistrate can be filed against the Directors of the defaulting Company.
[PLEASE REFER CHAPTER 3 & 17; STANDARD DRAFT 15 & 16]

(vii) A complaint to respective governmental Regulatory body of said defaulting company / organization can be made alleging the nature of grievance one has against the said company / organization; and in the event the said governmental regulatory body ignores / refuses to take any action against the said company / organization, then, a Writ Petition can be filed against that governmental regulatory body, in the respective High Court, seeking relief from HC, directing the said governmental regulatory body to take appropriate action against that company / organization.
[PLEASE REFER CHAPTER 14; STANDARD DRAFT 1, 2, 3 & 4]

(HH)
DISPUTES RELATING TO IMMOVABLE PROPERTIES

The obligations of Seller and the buyer of immovable property are set forth in Section 55 of the Transfer of Property Act, 1888.

Under the law, three distinct actions could be brought for the recovery of specific immovable property, namely –
1. A Suit based on title by Ownership;
2. A Suit based on possessory title;
3. A Suit based on the strength merely of previous possession, in the case of a wrongful ouster, i.e. without following the due process of law, of a person without his consent.

I. When a cloud is raised over a person’s title and he does not have a possession, a Suit for declaration and possession, with or without a consequential injunction is the remedy;
II. Where a person’s title is not in dispute but he is out of possession, he has to sue for possession and consequential injunction;
III. Where there is merely an interference with a person’s lawful possession or where there is a threat of dispossession, it is sufficient to sue for an injunction simpliciter. Anathula Sudhakar versus P Buchy Reddy – AIR 2008 SC 2033 (2039).

(1) WHEN THE BUILDER / DEVELOPER FAILS TO GIVE POSSESSION OF FLAT WITHIN AGREED TIME; OR THE BUILDER FAILS TO PROVIDE THE AMENITIES AGREED IN THE AGREEMENT; OR THE BUILDER VIOLATE ANY PROVISION OF LAW WITH RESPECT TO CONCERNED BUILDING / STRUCTURE, THEREBY VIOLATING THE CONTRACT SO ENTERED INTO BETWEEN THE BUILDER / DEVELOPER AND THE FLAT BUYER.
(i) A Complaint before Consumer Forum / State Commission / National Commission may be filed for “deficiency of services”.[PLEASE REFER CHAPTER 28 & 29; STANDARD DRAFT 43 & 44]
(ii) A complaint may be made to Local Municipal authority stating therein the illegalities committed by the Developer and asking the Local Municipal authority to take action against the erring / defaulting Developer; and where Municipal authorities do not take required action against the defaulting Developer, then, a Writ Petition in the respective High court may be preferred against the said Municipal authority.
[PLEASE REFER CHAPTER 14; STANDARD DRAFT 1, 2, 3 & 4]

(iii) If there is Arbitration clause in the Contract between the Builder / Developer / Seller and the property buyer, then, Arbitration proceedings should be adopted for the resolution of particular dispute. [PLEASE REFER CHAPTER 27]
(iv) A criminal complaint / FIR before Police, or as aforesaid, an application u/s 156(3) or complaint under section 200, to Judicial Magistrate / Metropolitan Magistrate, may be filed, alleging cheating / criminal breach of trust / mischief or any other applicable offence depending upon the facts of each case.
[PLEASE REFER CHAPTER 3 & 17; STANDARD DRAFT 15 & 16]

(v) Where the Builder / Developer is evading in performing his part of the Contract, thereby seriously prejudicing the interests of the Purchaser, the Purchaser, by virtue of Sections 10, 12, 14(3), 19, 21, 22, 23, 42 and subject to Sections14, 16, 17, 18, 20, 24 of the Specific Relief Act, 1963, may by filing a Suit for Specific performance, cause the said Builder / Developer to perform his part of the contract and may also seek damages in addition to Specific performance, or may seek damages in lieu of Specific performance; and can also seek additional damages for breach of Contract.

Where despite a decree for specific performance, the purchaser fails to pay the purchase money, or any other sum which the court has ordered him to pay, the Builder / Developer, by virtue of Section 28 of the Specific Relief Act, may apply in the same Suit to declare the contract rescinded.

The party enforcing specific performance of the contract, by virtue of Section 29 of the Specific Relief Act, in the alternative of specific performance, may seek rescission of the contract in case specific performance is refused by the court. [PLEASE REFER CHAPTER 2 & 15; STANDARD DRAFT 1 & 12]

(2) WHERE ONE IS FORCIBLY / UNLAWFULLY DISPOSSESSED FROM HIS LAWFUL POSSESSION –
(i) A complaint, may be filed before Judicial Magistrate / Metropolitan Magistrate praying therein for the Magistrate to exercise his powers conferred upon him under section 145 and 146 of CrPC, 1973, to restore the possession to the person unlawfully dispossessed of. [PLEASE REFER CHAPTER 3 & 33; STANDARD DRAFT 15 & 16]
(ii) A civil suit u/s 6 of Specific Relief Act, 1963, may be filed before the District Court / High Court for immediate restoration of possession to the person who was in lawful possession.
[PLEASE REFER CHAPTER 2 & 15; STANDARD DRAFT 1 & 12]

(3) WHERE ONE IS ANTICIPATING FORCIBLE / UNLAWFUL DISPOSSESSION FROM HIS LAWFUL POSSESSION / OR TO PREVENT TRESSPASS OF IMMOVABLE PROPERTY –
(i) A Civil Suit u/s 35 of the Specific Relief Act, 1963 may be filed thereby seeking declaration to the effect that the person in possession is entitled to the present possession;

(ii) A Civil Suit u/s 39 of Specific Relief Act, 1963 may be filed for Mandatory Injunction against the person who intends to unlawfully dispossess.

(i) Subject to existence of certain conditions, a complaint to concerned Police station u/s 145 of CrPC, 1973, may be made for preventing forceful unlawful dispossession / preventing trespass, as the case may be;

(4) WHERE THE LICENSEE REFUSE TO VACATE THE PREMISES EVEN AFTER THE TERMINATION OF THE CONTRACT; OR DISPUTES BETWEEN LANDLORD AND TENANT;
(i) If the property is situated within Maharashtra, the dispute between Landlord & Tenant OR between Licensor and Licensee may be referred before competent authority constituted under Maharashtra Rent control Act, 1999. [PLEASE REFER CHAPTER 2 & 15; STANDARD DRAFT 47]
(ii) Small Causes Courts, constituted under the Provincial Small Causes Courts Act 1881 / Presidency Small Causes Courts Act, 1881, have exclusive jurisdiction over certain disputes between Landlord & Tenant and between Licensor and Licensee.
[PLEASE REFER CHAPTER 2 & 15; STANDARD DRAFT 1 & 12]

(5) IN AN AGREEMENT FOR SALE / PURCHASE OF IMMOVABLE PROPERTY, WHERE ANY PARTY REFUSE TO PERFORM HIS PART OF PROMISE SO MADE IN THE AGREEMENT / CONTRACT.
(i) Where the Seller is evading in performing his part of the Contract, thereby seriously prejudicing the interests of the Purchaser, the Purchaser, by virtue of Sections 10, 12, 14(3), 19, 21, 22, 23, 42 and subject to Sections14, 16, 17, 18, 20, 24 of the Specific Relief Act, 1963, may by filing a Suit for Specific performance, cause the said Seller to perform his part of the contract and may also seek damages in addition to Specific performance, or may seek damages in lieu of Specific performance; and can also seek additional damages for breach of Contract.

Where despite a decree for specific performance, the purchaser fails to pay the purchase money, or any other sum which the court has ordered him to pay, the Seller, by virtue of Section 28 of the Specific Relief Act, may apply in the same Suit to declare the contract rescinded.

The Purchaser enforcing specific performance of the contract, by virtue of Section 29 of the Specific Relief Act, in the alternative of specific performance, may seek rescission of the contract in case specific performance is refused by the court.
[PLEASE REFER CHAPTER 2 & 15; STANDARD DRAFT 1 & 12]

(ii) A Suit comprehensive, Suit for the Registration of the Sale Deed and for recovery of possession, is not barred on the ground that a statutory alternative remedy of registration is available under section 77 of the Registration Act. An Agreement for transfer of property implies a contract not only to execute the deed of transfer but also to appear before the Registering Officer and to admit execution thereby facilitating the registration of the document wherever it is compulsory. AIR 1999 SC 2958 (2961).

(iii) Where a person, who has purchased goods / movable property, from a person who has no title or has imperfect title to the said goods / movable property, the said purchaser, by virtue of Section 13 of Specific Relief Act, 1963, has a right and he –
(a) May compel the said other person to make good the title where in future the said other person acquired the title to such goods / movable property;
(b) May compel the said other person to procure the concurrence of a person whose concurrence will validate the title of the purchaser;
(c) Where a mortgaged property is sold as a unencumbered property, the purchaser may compel the Seller to redeem the mortgage and obtain a valid discharge, and if necessary, a conveyance from the mortgagee;
(d) Where in a case, the Seller had filed the Suit for Specific performance of the contract, and his said Suit is dismissed for want of title or imperfect title, the purchaser in the said Suit, can claim the refund of his amount paid over said goods / movable property and can also recover interest on the said amount paid including costs of the Suit.

(iv) Where consent to an agreement is obtained by coercion, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so obtained; and where both the parties to an agreement are under a mistake of fact essential to the agreement, the agreement is void. In such situation the defrauded party has three remedies are open to him, namely –
• He may rescind the contract absolutely and sue to recover the consideration parted with upon the fraudulent contract; or
• He may bring an action to rescind the contract and in that action have full relief; or
• He may retain what he has received and bring an action to recover the damages sustained.

(v) Where written instruments / contracts, partially or wholly, originally valid, becomes inefficacious by subsequent events, such as, by satisfaction or payment, or other causes; and its existence casts either a cloud upon the title of the party or subject him to the danger of some future litigation; under such and like circumstances, the said party, by virtue of Section 31 and 32 of the Specific Relief Act, may file a Suit to declare the said whole or partial of the Written Instrument / contract, as void or voidable and get it cancelled.

(vi) Where a person is entitled to an immovable property and any person is denying or interested to deny the such entitlement, then, by virtue of Section 34 of the Specific Relief Act, the said aggrieved person may file a Suit for declaration by the Court that he is entitled for said immovable property.

(vii) Where to prevent the immediate and imminent breach of an obligation, the obligation whether arising from contract or Statute, and where it is necessary to compel the performance of certain acts, which the court is capable of enforcing its performance, then, by virtue of Section 39 of the Specific Relief Act, a Suit for Mandatory injunction may be filed for the issuance of said injunction.

(viii) A criminal complaint / FIR before Police or as aforesaid an application u/s 156(3) or complaint under section 200, to Judicial Magistrate / Metropolitan Magistrate, may be filed, alleging cheating / criminal breach of trust / mischief or any other applicable offence depending upon the facts of each case.
[PLEASE REFER CHAPTER 3 & 17; STANDARD DRAFT 15 & 16]

(6) WHERE A PERSON WAS GIVEN POSSESSION (LICENSE) OF IMMOVABLE PROPERTY ON GRATUITOUS BASIS AND THE SAID PERSON REFUSE TO VACATE THE PREMISES –
(i) If the property is situated within Maharashtra, the dispute may be referred before competent authority constituted under Maharashtra Rent control Act, 1999. [PLEASE REFER CHAPTER 2 & 15; STANDARD DRAFT 47]
(ii) Small Causes Courts, constituted under the Provincial Small Causes Courts Act 1881 / Presidency Small Causes Courts Act, 1881, have exclusive jurisdiction over certain disputes between Landlord & Tenant and between Licensor and Licensee.
[PLEASE REFER CHAPTER 2 & 15; STANDARD DRAFT 1 & 12]

(iii) A criminal complaint / FIR before Police or as aforesaid, an application u/s 156(3) or complaint under section 200, to Judicial Magistrate / Metropolitan Magistrate, may be filed, alleging cheating / criminal breach of trust / mischief or any other applicable offence depending upon the facts of each case. [PLEASE REFER CHAPTER 3 & 17; STANDARD DRAFT 15 & 16]

(I I)
(1) WHEN SOMEONE HAS FILED A CASE IN THE COURT OF LAW, MAKING FALSE CLAIM THEREIN

(i) It is a criminal offence for to make false claim against any person in the court of law and is punishable under section 209 of Indian Penal Code, 1860. However, FIR or private complaint to Magistrates court is not permissible for registering of above offence. In such cases, criminal proceedings may be initiated against guilty person by making an Application under section 340 read with section 195 of CrPC 1973, before the concerned trial Court, praying therein for trial court to refer the said offence of “false claim”, to the competent Magistrate Court of jurisdiction.
[PLEASE REFER CHAPTER 3 & 11; STANDARD DRAFT 25]

(ii) The making of false claim also entails making of false statements / false declarations in one’s pleadings and filing of false Affidavit. It is a criminal offence under sections 181, 191, 196 and 199 of IPC, 1860 to make false statements / false declarations in one’s pleadings or filing false Affidavit or knowingly giving false evidence (OFFENCES OF PERJURY). As aforesaid, FIR or private complaint to Magistrates court is not permissible for registering of above offences. In such cases, criminal proceedings may be initiated against guilty persons by making an Application under section 340 read with section 195 of CrPC 1973, before the concerned trial Court (civil or criminal), praying therein for trial court to refer the above stated offences, to the competent Magistrates Court of jurisdiction, against those persons who have allegedly made false statements / false declarations in one’s pleadings or have allegedly filed false Affidavit or have allegedly knowingly given false evidence.
[PLEASE REFER CHAPTER 3, 11, & 35; STANDARD DRAFT 25]

(iii) A Civil Suit for damages for “malicious prosecution” may be filed in the District Court.

(iv) If a Civil Suit making false claim is filed, then following provisions of CPC, 1908 may be invoked –
(a) Order VI Rule 16;

(b) Order VII Rule 11;

(c) In the said Suit of false claim, non compliance to all applicable provisions contained in Order VI and Order VII may be alleged;

(d) Order XI: Discovery and inspection.

(e) Order XIV Rule 1,2, 6;

(f) Order XV Rule 1, 2, 3;

(g) Order XXV Rule 1.

[PLEASE REFER CHAPTER 5 & 10]

(2) WHERE A PERSON HAS A VERY STRONG AND PRIMA FACIE CASE AGAINST THE OPPOSITE PARTY

(d) Order XI: Discovery and inspection.

(d) Order XII: Admissions by the defendants

(e) Order XIV Rule 2(2)

(f) Order XV Rule 1, 2, 3: Disposal of the Suit at the first hearing.

And Section 9 of the Specific Relief Act, 1963.

( JJ )
WHEN A PERSON AGAINST WHOM SUMMONS HAVE BEEN ISSUED AND HE EVADES TO RECEIVE THAT SUMMONS

(i) It is a criminal offence under section 172 and 174 of IPC, 1860 to evade summons, issued by a court. FIR or complaint to Magistrates court is not permissible for registering of above offences. In such cases, criminal proceedings may be initiated against guilty persons by making an Application under section 340 read with section 195 of CrPC 1973, before the concerned trial Court (civil or criminal), praying therein for trial court to refer the above stated offences, to the competent Magistrates Court of jurisdiction, against those persons who have allegedly evaded summons issued by court
[PLEASE REFER CHAPTER 34; STANDARD DRAFT 25]

(KK)
WHEN A PERSON MAKES A FALSE STATEMENT / FALSE DECLARATIONS IN HIS PLEADINGS OR FILES A FALSE AFFIDAVIT BEFORE THE COURT OF LAW OR KNOWINGLY GIVES A FALSE EVIDENCE TO THE COURT / FILES A FORGED DOCUMENT

(i) It is a criminal offence under sections 181, 191, 196 and 199 of IPC, 1860 to make false statements / false declarations in one’s pleadings or filing false Affidavit or knowingly giving a false evidence (OFFENCES OF PERJURY) or filing forged document in the evidence . FIR or private complaint to Magistrates court is not permissible for registering of above offences. In such cases, criminal proceedings may be initiated against guilty persons by making an Application under section 340 read with section 195 of CrPC 1973, before the concerned trial Court (civil or criminal), praying therein for trial court to refer the above stated offences, to the competent Magistrates Court of jurisdiction, against those persons who have allegedly made false statements / false declarations in one’s pleadings or have allegedly filed false Affidavit or have allegedly knowingly given false evidence.
[PLEASE REFER CHAPTER 3, 11, & 35; STANDARD DRAFT 25]

(ii) There are instances where the Courts have viewed such acts of perjury as criminal contempt of the court. Therefore, Contempt proceedings may be initiated alleging criminal contempt of the court. Sanction of Advocate General is condition precedent for initiating Criminal contempt proceedings; or in the alternative the Hon’ble Court may be requested to take su moto cognizance of said act of perjury. High Courts have inherent powers to take judicial notice of acts of prima facie perjury and may proceed to take action against the guilty person.
[PLEASE REFER CHAPTER 20; STANDARD DRAFT 19]

(LL)
WHERE A FALSE COMPLAINT HAS BEEN FILED IN THE MAGISTRATES COURT AND THE MAGISTRATE HAS ISSUED SUMMONS / OR WHERE A GENUINE COMPLAINT HAS BEEN FILED BUT THE MAGISTRATE HAS DISMISSED THE SAID COMPLAINT, THEN –

(i) The person against whom said Summons have been issued or the person whose genuine complaint is dismissed, may prefer a Revision Application under section 397 of CrPC, 1973, before Sessions Court, or may prefer a Revision Application under section 401 of CrPC, 1973, before High Court, thereby challenging the said Order of the Magistrates court.
[PLEASE REFER CHAPTER 3; STANDARD DRAFT 48]

(ii) It is a criminal offence under section 182 and 211 of IPC, 1860 to knowingly register a false complaint against any person. In such cases the innocent person cannot register FIR or make complaint to Magistrates court against those persons who have filed false complaint. In such cases, an Application under section 340 read with section 195 of CrPC 1973, may be preferred before the said Magistrate / Sessions court, against those persons, praying therein for Magistrates court to refer the said offence of false accusation to the appropriate / competent Magistrate Court of jurisdiction. (IPC Section 182: False information, with intent to cause public servant to use his lawful power to the injury of another person. IPC Section 211: False charge of offence made with intent to injure.)
[PLEASE REFER CHAPTER 3 & 11; STANDARD DRAFT 25]

(iii) A Civil Suit for damages for “malicious prosecution” may be filed in the District Court.

(LL)
WHERE ONE IS AGGRIEVED BY THE ILLEGAL ORDER (INTERIM OR FINAL) OF THE COURT / TRIBUNAL

(i) Subject to availability of other remedies of Appeal and Revision, a Writ of Certiorari under Article 226 OR under Article 227 (Article 227 contemplates the jurisdiction of High Courts, of Superintendence over all subordinate courts and tribunals), may be filed before respective High Court, challenging said illegal Order.
[PLEASE REFER CHAPTER 6, 14; STANDARD DRAFT 49, 3A,& 11]

(MM)
WHERE ONE IS AGGRIEVED BY THE FACT THAT THE JUDGE IS ACTING ILLEGALLY / IS NOT EXERCISING THE POWERS / AND THAT THE JUDGE MAY PASS A MANIFESTLY ILLEGAL ORDER

(i) A Writ Petition of Prohibition under Article 226 OR under Article 227 (Article 227 contemplates the jurisdiction of High Court, of Superintendence over all subordinate courts and tribunals), may be filed before respective High Court, stating therein the alleged illegalities committed by said lower court / tribunal and praying for HC to direct the said lower court / tribunal to not to pass any illegal order.
[PLEASE REFER CHAPTER 6, 14; STANDARD DRAFT 50]

THE BOOK IS UNDER CONSTRUCTION

CHAPTER – 1 INTRODUCTION TO LAW AND JUSTICE
CHAPTER – 2 CIVIL PROCEDURE: BRIEF UNDERSTANDING
CHAPTER – 3 CRIMINAL PROCEDURE: BRIEF UNDERSTANDING
CHAPTER – 4 LAW OF EVIDENCES: BRIEF UNDERSTANDING
CHAPTER – 5 INHERENT POWERS OF COURTS: BRIEF UNDERSTANDING
CHAPTER – 6 PRINCIPLES OF NATURAL JUSTICE: BRIEF UNDERSTANDING
CHAPTER – 7 PRINCIPLES OF INTERPRETATION OF STATUTES: BRIEF UNDERSTANDING
CHAPTER – 8 LAW OF LIMITATIONS: BRIEF UNDERSTANDING
CHAPTER – 9 POWER OF ATTORNEY: BRIEF UNDERSTANDING
CHAPTER – 10 FAST JUSTICE: CRITICAL IPC, CPC, CRPC AND EVIDENCE ACT PROVISIONS
CHAPTER – 11 REMEDY CONTEMPLATED UNDER SECTION 340 READ WITH 195 OF CRPC, 1973: BRIEF UNDERSTANDING
CHAPTER – 12 FASCINATING QUOTATIONS: LEGAL AND NON LEGAL
CHAPTER – 13 YOU NEED TO BE A GOOD HUMAN BEING FOR BEING A SUCCESSFUL LAWYER
CHAPTER – 14 WRIT PETITIONS: BRIEF UNDERSTANDING
CHAPTER – 15 CIVIL SUITS: BRIEF UNDERSTANDING
CHAPTER – 16 HUMAN RIGHTS COMMISSION: BRIEF UNDERSTANDING
CHAPTER – 17 FIR: BRIEF UNDERSTANDING
CHAPTER – 18 SECTION 133 OF CRPC, 1973: BRIEF UNDERSTANDING
CHAPTER – 19 RTI: BRIEF UNDERSTANDING
CHAPTER – 20 CONTEMPT OF COURTS: BRIEF UNDERSTANDING
CHAPTER – 21 BAILS / ANTICIPATORY BAILS: BRIEF UNDERSTANDING
CHAPTER – 22 SUMMONS BY POLICE FOR INVESTIGATION: BRIEF UNDERSTANDING
CHAPTER – 23 SUMMARY SUIT: BRIEF UNDERSTANDING
CHAPTER – 24 CHEQUE, A NEGOTIABLE INSTRUMENT: BRIEF UNDERSTANDING
CHAPTER – 25 INSOLVENCY PROCEEDINGS: BRIEF UNDERSTANDING
CHAPTER – 26 WINDING UP OF COMPANIES: BRIEF UNDERSTANDING
CHAPTER – 27 ARBITRATION: BRIEF UNDERSTANDING
CHAPTER – 28 CONSUMER PROTECTION LAW: BRIEF UNDERSTANDING
CHAPTER – 29 UNFAIR TRADE PRACTICES: BRIEF UNDERSTANDING
CHAPTER – 30 COMPETITION COMMISSION OF INDIA: BRIEF UNDERSTANDING
CHAPTER – 31 TYPES OF COMPLAINTS THAT MAY BE BEFORE SEBI
CHAPTER – 32 TYPES OF COMPLAINTS THAT MAY BE BEFORE COMPANY LAW BOARD
CHAPTER – 33 PROCEEDINGS UNDER SECTION 145 OF CRPC, 1973: BRIEF UNDERSTANDING
CHAPTER – 34 OFFENCES REGARDING SUMMONS: SECTIONS 172 AND 174 OF IPC: BRIEF UNDERSTANDING
CHAPTER – 35 OFFENCES OF MAKING FALSE STATEMENTS / GIVING FALSE EVIDENC: BRIEF UNDERSTANDING

STANDARD DRAFT – 1 DRAFT COMPLAINT / NOTICE TO PUBLIC AUTHORITY
STANDARD DRAFT – 2 DRAFT WRIT OF MANDAMUS – FOR ENFORCING “RIGHT OF REPLY” FOR COMPLAINT MADE
STANDARD DRAFT – 3 DRAFT WRIT OF MANDAMUS – FOR ENFORCING THE MANDATE OF LAW / CONSTITUTIONAL / STATUTORY PROVISIONS
STANDARD DRAFT – 3A DRAFT WRIT OF MANDAMUS – TO DEAL WITH ILLEGAL NOTICES / ORDERS OF PUBLIC AUTHORITIES
STANDARD DRAFT – 4 DRAFT WRIT OF MANDAMUS – FOR ENFORCING FUNDAMENTAL / STATUTORY RIGHTS
STANDARD DRAFT – 5 DRAFT WRIT OF MANDAMUS – FOR SEEKING DAMAGES / COMPENSATION
STANDARD DRAFT – 6 DRAFT WRIT OF MANDAMUS – FOR IMPLEMENTATION OF RECOMMENDATIONS MADE BY COMMITTEES / COMMISSIONS
STANDARD DRAFT – 7 DRAFT WRIT OF MANDAMUS – FOR PREVENTION OF FUNDAMENTAL / STATUTORY RIGHTS BEING FRUSTRATED
STANDARD DRAFT – 8 DRAFT WRIT OF MANDAMUS – FOR CHALLENGING THE ARBITRARY EXERCISE OF POWERS / ACTS OF PUBLIC AUTHORITIES / STATE
STANDARD DRAFT – 9 DRAFT WRIT OF MANDAMUS – CHALLENGING THE CONSTITUTIONAL VALIDITY OF STATE ACTION / LEGISLATION / RULES / POLICY DECISION OF STATE, BY WAY OF FOR JUDICIAL REVIEW
STANDARD DRAFT – 10 DRAFT WRIT OF MANDAMUS – FOR PREVENTING STATE FROM WASTE OF PUBLIC MONEY
STANDARD DRAFT – 11 DRAFT WRIT OF MANDAMUS – WHERE PROPER HEARING IS NOT GIVEN TO A CITIZEN BY A PUBLIC AUTHORITY / OR WHERE A PUBLIC AUTHORITY PASSES UNREASONED ORDER
STANDARD DRAFT – 12 DRAFT CIVIL SUIT
STANDARD DRAFT – 13 DRAFT WRIT OF QUO WARRANTO
STANDARD DRAFT – 14 DRAFT COMPLAINT TO HUMAN RIGHTS COMMISSION
STANDARD DRAFT – 15 DRAFT FIR TO POLICE
STANDARD DRAFT – 16 DRAFT COMPLAINT TO MAGISTRATE U/S 200 READ WITH SECTION 190 OF CRPC, 1973
STANDARD DRAFT – 17 DRAFT COMPLAINT TO DISTRICT MAGISTRATE (COLLECTORATE OF THE DISTRICT) / COMMISSIONER OF POLICE]
STANDARD DRAFT – 18 DRAFT RTI APPLICATION
STANDARD DRAFT – 19 DRAFT CONTEMPT PETITION
STANDARD DRAFT – 20 DRAFT LETTER TO POLICE STATION TO DEAL WITH FALSE FIR
STANDARD DRAFT – 21 DRAFT ANTICIPATORY BAIL APPLICATION
STANDARD DRAFT – 22 DRAFT WRIT OF MANDAMUS – FOLLOW THE DUE PROCESS OF LAW AND STRICTLY ADHERE TO THE GUIDELINES FRAMED BY SC IN THE JOGINDER KUMAR CASE
STANDARD DRAFT – 23 DRAFT WRIT OF MANDAMUS – SECTION 482 OF CRPC TO QUASH THE FALSE FIR
STANDARD DRAFT – 24 DRAFT APPLICATION UNDER SECTION 227, 239 OF CRPC, 1973, FOR THE DISCHARGE OF ACCUSED PERSON FROM OFFENCES CHARGED
STANDARD DRAFT – 25 DRAFT APPLICATION UNDER SECTION 340 READ WITH SECTION 195 OF CRPC 1973
STANDARD DRAFT – 26 DRAFT APPLICATION UNDER SECTION 250 OF CRPC 1973
STANDARD DRAFT – 27 DRAFT LETTER TO CONCERNED POLICE STATION THAT THE POLICE OFFICER EFFECTING ARREST IS NOT FOLLOWING THE MANDATE OF LAW AND KNOWINGLY DISREGARDING THE GUIDELINES FRAMED BY SC IN THE CASE OF JOGINDER KUMAR VERSUS STATE OF U.P, 1994.
STANDARD DRAFT – 28 DRAFT WRIT OF HABEAS CORPUS – FOR IMMEDIATELY PRODUCING THE ARRESTED PERSON BEFORE THE HIGH COURT
STANDARD DRAFT – 29 DRAFT BAIL APPLICATION
STANDARD DRAFT – 30 DRAFT APPLICATION FOR SUBSISTENCE ALLOWANCE WHERE ARREST IS EFFECTED
STANDARD DRAFT – 31 DRAFT APPLICATION TO STATE / NATIONAL HUMAN RIGHTS COMMISSION ABOUT ARREST EFFECTED, IN WILLFUL DISREGARD OF THE DIRECTIONS GIVEN BY THE SC IN JOGINDER KUMAR CASE
STANDARD DRAFT – 32 DRAFT APPLICATION TO SC / HC ABOUT ARREST EFFECTED, IN WILLFUL DISREGARD OF THE DIRECTIONS GIVEN BY THE SC IN JOGINDER KUMAR CASE
STANDARD DRAFT – 33 DRAFT RTI APPLICATION TO STATE / NATIONAL HUMAN RIGHTS COMMISSION / SC / HC TO FOLLOW UP THE COMPLAINT MADE IN RESPECT OF ARREST EFFECTED, IN WILLFUL DISREGARD OF THE DIRECTIONS GIVEN BY THE SC IN JOGINDER KUMAR CASE
STANDARD DRAFT – 34 DRAFT LETTER WHEN POLICE SUMMONS FOR INVESTIGATION IN VIOLATION TO PROVISIONS OF CRPC, 1973
STANDARD DRAFT – 35 DRAFT WRIT OF MANDAMUS – HC DIRECTING THE POLICE TO MAKE THOROUGH INVESTIGATION
STANDARD DRAFT – 36 DRAFT WRIT OF MANDAMUS – HC DIRECTING THE STATE GOVT TO REFER THE CASE TO AN INDEPENDENT AGENCY LIKE CBI OR CID FOR INVESTIGATION
STANDARD DRAFT – 37 DRAFT SUMMARY SUIT
STANDARD DRAFT – 38 DRAFT STATUTORY NOTICE UNDER SECTION 138
STANDARD DRAFT – 39 DRAFT INSOLVENCY NOTICE
STANDARD DRAFT – 40 DRAFT INSOLVENCY PETITION
STANDARD DRAFT – 41 DRAFT COMPANY WINDING UP NOTICE
STANDARD DRAFT – 42 DRAFT COMPANY WINDING UP PETITION
STANDARD DRAFT – 43 DRAFT “CONSUMER” NOTICE
STANDARD DRAFT – 44 DRAFT CONSUMER COMPLAINT
STANDARD DRAFT – 45 DRAFT COMPLAINT TO COMPETITION COMMISSION OF INDIA
STANDARD DRAFT – 46 DRAFT COMPANY PETITION BEFORE COMPANY LAW BOARD
STANDARD DRAFT – 47 DRAFT APPLICATION BEFORE COMPETENT AUTHORITY CONSTITUTED UNDER MAHARASHTRA RENT CONTROL ACT
STANDARD DRAFT – 48 DRAFT REVISION APPLICATION UNDER SECTION….. OF CRPC 1973 BEFORE SESSIONS COURT TO CHALLENGE THE ORDER OF MAGISTRATES COURT
STANDARD DRAFT – 49 DRAFT WRIT OF CERTIORARI
STANDARD DRAFT – 50 DRAFT WRIT OF PROHIBITION
STANDARD DRAFT – 51 DRAFT FORMAT OF ORGANIZATION OF A CASE, INCLUDING PREPARING FOR ARGUMENTS BEFORE COURT AND WRITTEN ARGUMENTS

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What is - "Seeking courts' intervention" !!

2011-05-21T23:15:00.000-07:00

A aggrieved's act of seeking courts' intervention, in fact, is an appeal to the judicial conscience of the sitting judge, to do that - which all prudent man will do, in the facts of the case. As I see, actually, it is a test of the sitting judge.

I will further to say - despite the popular perception, there is "justice" in India. As I view, the test to judge the efficacy of any democratic Institution is - Whether the Institution is capable of delivering for what is stands for; and not that the Institution is not delivering what it should.

Sandeep Jalan
Advocate
Mumbai.

A legal case for "No criminally charged legislature"

2011-05-20T20:06:00.000-07:00

A legislature has the benign anxiety to protect the society from the onslaught of criminals and thereby they command strict penal laws and empower police to detain a person even on first information of offence, (section 154, 157 read with section 41 of CrPC 1973) and even provide for refusal of bail in appropriate cases thereby frustrating the free movement of a innocent person or putting restraint on movement of alleged criminals when released on bail. However, this benign anxiety presupposes clean hands of the legislature, for no benign anxiety can emanate from alleged criminal legislature.

In a democracy, the legislatures enact laws with the mandate of citizens. Whenever the legislature provides that in a given situation, the liberty of the subject will be compromised, the subject invariably agrees to sacrifice his most precious individual freedom in the interest of welfare of the society. This voluntary sacrifice of precious freedom by an arrested person, to protect society from criminals, is on the premise that at least legislature who is making this phenomenal command, is not a criminal, in a natural expectation, that this command is originating from a man of standing and integrity.

Moreover, when I vote to a electoral candidate, though criminally charged, I vote him in the presumption of his innocence. But, then, his innocence must, as immediately as possible, be obtained from the competent court of jurisdiction, within three months from the date when the said candidate files his candidature to be elected as a legislature of the people.

And, therefore, so as to have purity of have legislative command clothed in section 154, 157 read with section 41 of CrPC, 1973, there cannot be a criminally charged legislature in the “office” and therefore whenever we have a legislature who is suffering from “the charge”, he must be relieved of the “charge”, either of crime or of legislative office, at once, by the competent court of jurisdiction. Needless to say, only specially constituted CBI courts will serve the purpose.

Definitely, all the legislature wants to protect the society from criminals, but imagine a situation of life In India where – an alleged criminal legislature makes a command – I want to protect the society from criminals.

It is interesting to observe that – a Legislature and a Criminal are a inherently “incompatible personalities”. A Legislature makes the law, whereas a criminal personality breaks the law. But here in India we are surprised to have these personalities.

Finally, the alleged criminal has a right of “first hearing”, so that he can be relieved of the criminal charge, at the earliest. Also, there should be a “Doordarshan public trial” of a alleged criminal legislature so that the opposite political parties will not have the opportunity of alleging “managed trial”.

Sandeep Jalan
Advocate
Mumbai.

INSOLVENCY – Very Briefly

2011-04-22T02:58:00.000-07:00

There are two statutes which governs the laws of insolvency in India. One is Presidency Towns Insolvency Act, 1909. This Act is applicable to three Presidency town namely – Calcutta, Madras and Bombay. The High Court of Calcutta, Madras and Bombay has the jurisdiction to try the Insolvency proceedings under this Act. The second Act is Provincial Insolvency Act, 1920 and it is applicable to all parts of India except the three above towns and the District Courts has the jurisdiction to try the Insolvency proceedings under this Act.

In an old case Lord ELLENBOROUGH stated - “The principle of bankruptcy (insolvency) laws is to prevent persons craftily obtaining into their hands great substance of other men's goods, and at their own will and pleasures consuming the substance......”

Insolvency is a proceeding by which possession of property of a debtor is seized up for the benefit of the body of creditors, generally by an officer appointed for the purpose. When a person is declared as a insolvent, he is subject to many disqualifications in respect of his civil rights. Although it is not a crime per se, yet insolvency brings the collapse of self esteem and perhaps humiliation in the social background. Also, unless a person is personally liable, he cannot be declared as insolvent. AIR 1929 Mad 573, Somasundaram versus Kanoo (died).

Instituting Insolvency proceedings may be the most effective way of instilling a healthy fear in the minds of dishonest debtors that if they do not pay the debt after receipt of notice from the creditor, they may be adjudged as an insolvent.

NO BAR AGAINST CRIMINAL PROSECUTION
provisions of the Insolvency Act apply to civil proceedings and the proceedings are against the properties of the insolvent. There is absolutely no bar against any criminal prosecution against the debtor to which he may be subject to under the laws of the land. For example – a criminal prosecution of the insolvent under section 138 of the Negotiable Instrument Act 1881 for the dishonour of cheque issued by him cannot be stayed even if the same debt has been the basis of insolvency petition. Bharath N Mehta versus Mansi Finance Ltd, (1999) 1 CTC 687.

The Bombay HC in a case held that the Magistrate’s jurisdiction to try an insolvent for an alleged offence under section 421 of IPC is not taken away by anything in the insolvency legislation. Emperor versus Mullshankar Harihand Bhatt, ILR 35 Bom 63.

WHO CAN BE DECLARED AS INSOLVENT
A person who is competent to contract can be declared as Insolvent. Even a partnership form can also be declared as Insolvent. AIR 1931 Sind 179, Chaturbhu versus KevalRam. AIR 1968 SC 1182 Firm Mukanlal versus Purushottam Singh. However, companies, Ltd or private, cannot be declared as Insolvent. However, winding up proceedings can be instituted against the defaulting company.

INJUNCTIONS UNDER INSOLVENCY
In the case of Johrilal Soni versus Bhanwari Bai, AIR 1977 SC 2202, the Hon'ble SC also cited a passage from the observations of another Division Bench: “It is incorrect to say that prior to adjudication of Insolvency status of a debtor, the presiding court has no jurisdiction at all to get at the properties of the debtor and to preserve them. Special provisions in that direction are contained in section 20 and 21. These powers are conferred upon the court to see that the property of the insolvent is not wasted or taken out of the reach of the court during the pendency of the insolvency petition. (AIR 1953 Tra-Co 95 [DB]); Injunctions under Insolvency- Order 39 of CPC. Temporay Injunctions under Insolvency Petitions- AIR 1928 Rang 241 Ally Mohammed versus Bham.

The following acts are regarded as “acts of insolvency” -
1. If in India or elsewhere, the debtor makes a transfer of all or substantially all his property to a third person for the benefit of his creditors generally.

2. If in India or elsewhere, the debtor makes a transfer of his property or any part thereof with intent to defeat or delay his creditors.

3. If, in India or elsewhere the debtor makes any transfer of his property, or any part thereof, which would, under this or any other enactment for the time being in force, be void as a fraudulent preference if he were adjudged an insolvent. Fraudulent preference – is that if a person is not able to pay his debts from his sources as debts becomes due and he is declared an insolvent, then any transfer of property, or every payment made or every obligation incurred or any judicial proceeding taken or suffered by the debtor within three months before the presentation of a petition against him, shall be deemed to a fraudulent preference and shall be void. It shall be annulled by the court.

4. If with intent to defeat or delay his creditors, the debtor departs or remains out of the territories to which the respective Act extends; or if the debtor departs from his dwelling house or usual place of business or otherwise absents himself; or if the debtor secludes himself so as to deprive his creditors of the means of communicating with him.
(1873) 8 Ch A 37, Ex Parte
AIR 1949 EP 359 Jagannath versus Badriprasad.
AIR 1923 Bom 107, In re Mohammed Hasham & Co
1970 ALJ 940, Nassen Badkhan versus Maqbool Begum
AIR 1975 Ker 195 Mathai Varkey versus Achuthan Damodaran
AIR 1936 Lah 176 Munilal versus Bansi Daob bank
(1984) 2 Kar LJ 202, Abdul Wahid Khan versus Alan Chavans.
AIR 1935 Rang 218, Maung Nyun versus Saw En Hoke
AIR 1968 Mad 216 Sarangapani versus Perumal Naidu.
It may also be informed to you that even a single Creditor can maintain an insolvency Petition. Please refer this Judgment. AIR 1983 A P 13, Nagappa versus Sahakka.
Delay in payment to creditors may amount to act of insolvency. AIR 1982 Mad 83. Maranaicken versus Saradhambal.

5. If any of the property of the debtor has been sold in execution of the decree of any court for the payment of any money.

6. If the debtor himself makes a petition in the court to declare him as a insolvent.

7. If the debtor gives notice to any of his creditors that he has suspended, or that he is about to suspend, payment of his debts. The notice need not be in writing and it is enough if the debtor gives a clear impression of his conduct that he is not going to make payment of his legal debts. The dishonour of cheque is a suspension of payment and thus is an act of insolvency. The dishonour of cheque has been held to be a suspension of payments under the Presidency Towns Insolvency Act. Soontram Ramntrajan Das versus SARM, Chettyar, AIR 1933 Rang 363. It has also been held that although the creditors has always the remedy of instituting civil suit to realise his debt, this ordinary remedy does not extinguish or diminish the creditor's statutory right to proceed under the Insolvency Act. A. Sree Nivasan versus ramesh Doshi, (1999) 1 cal LT 257 (Cal) : (2000) 1 Indian Civil Cases 280.

8. If the debtor is imprisoned in execution of the decree of any court for the payment of money.

9. A Bombay amendment provides an additional ground known as Insolvency Notice. A Decree holder, may give notice in prescribed form demanding payment giving at least one month's time. If it is not complied, Insolvency petition may be filed.

when a creditor intends to institute a Insolvency petition against the debtor to declare him as an Insolvent, the creditor, before moving the court, must issue a notice to the concerned debtor as contemplated under the Act. After that the creditor has to establish in the court (1) that he is a creditor of the debtor (2) there exist a legally enforceable ascertained debt between the debtor and the creditor (3) that the debtor has committed an “act of insolvency” as contemplated in the Act. Conditions for instituting insolvency Petitions by Creditors. AIR 1971 Mys 255 ATP Shivchandra versus Swarna Silk House.

On the passing of an order of insolvency, all the properties of the insolvent, wherever situated, shall be vested in the official Assignee, for its realization and distributed among the body of creditors. One of the important effect of vesting is that the insolvent cannot deal with his property. No buyer from the insolvent can get a good title.

Instituting Insolvency proceedings may be the most effective way of instilling a healthy fear in the minds of dishonest debtors that if they do not pay the debt after receipt of notice from the creditor, they may be adjudged as an insolvent.

Sandeep Jalan
Advocate
Mumbai.

Enforcing Sovereign Right of Reply

2011-04-05T23:03:00.000-07:00

I will begin with to say-

(1) A note was struck by Apex Court in Superintending Engineer, Public health, U.T. Chandigarh V Kuldeep Singh, 1997(9)SCC 199, when it observed: “Every Public servant is a trustee of the society; and in all facets of public administration – every public servant has to exhibit honesty, integrity, sincerity and faithfulness in the implementation of the political, social, economic and constitutional policies to integrate the nation, to achieve excellence & efficiency in public administration. ...”

Contrary to above, the experience is that the holders of public offices treat the authority in their hands, as one bestowing upon them, the status of a ruler rather than one in public service.

Statutory / Public authorities / Public officers, especially highly placed, soaked in arrogance of their powers, generally do not bother themselves to the complaints / representations of Citizens, and their replies sometimes are deliberately illogical and evasive. This essay seeks to engineer an effective answer to deal with this deep menace.

(2) We, the people of India have so many rights, under the Constitution, under various Statutes, and under the common law, and I thought let us contemplate one more right, which is “Right of Reply”. It is my case that Citizens’ and every person has a Sovereign right to receive proper reply, of the complaints / representations made to public / statutory authorities.

(3) In fact, in the case of Salem Advocates Bar Association, Tamilnadu Vs. Union of India (UOI), (2005) 6 SCC 344, the Hon'ble Supreme Court, among other things, said - Judicial notice can be taken of the fact that in a large number of cases either the notice is not replied to or in the few cases where a reply is sent, it is generally vague and evasive. It not only gives rise to avoidable litigation but also results in heavy expenses and costs to the exchequer as well.

A proper reply can result in reduction of litigation between the State and the citizens. In case a proper reply is sent, either the claim in the notice may be admitted or the area of controversy curtailed, or the citizen may be satisfied on knowing the stand of the State

In the above case strict duty is cast upon the Public authorities to make proper replies if they happen to receive any statutory notice, either under section 80 of CPC 1908, or under any other statute. I say, when a law recognizes a duty, correspondingly, law also recognizes a right.

(4) It is my case that Citizens’ / every person’s Right of “Reply” can be traced to preamble and to Article 14 of the Constitution of India and in numerous rulings made by our Constitutional courts. In wealth of the Judgments delivered by our Courts, it is repeatedly affirmed that public authorities must exercise their discretionary powers in a reasoned and justified manner, failing to imminent and inescapable violence of Article 14 of the Constitution of India.

It is my case that Citizen’s / person’s “Right of Reply” is inherent in “Duty to reasoned exercise of discretion by Public authorities”, a duty which is consistently cast upon public / statutory authorities by our Constitutional Courts, in their series of judgments.

(5) It is my case that when the Courts, in their wealth of judgments, lay so much emphasize on recording of reasons by public authorities, in the discharge of their duties even when administrative in nature, the recording of reason in their decision itself presupposes the obligation of giving reply, and not only a mere reply but a reasoned reply. It cannot be said that – whereas authorities are under obligation to make reasoned reply but they are at liberty to not to make any reply.

(6) It is my case that in wealth of judgments, the Courts have insisted upon recording of reasons by administrative authorities on the premise that such a decision is subject to judicial review and the courts cannot exercise their duty of review unless courts are duly informed of the consideration of the public / statutory authorities underlying the action under review. A statement of reasons serves purposes other than judicial review, inasmuch as the reasons promote “thought” by the public / statutory authority and compel them to cover the relevant points and eschew irrelevancies and assures careful administrative consideration.

(7) When, in the case of M Krishna Swamy versus UOI reported in (1992) 4 SCC 605, the Hon’ble Supreme Court held that any action, decision or order of any statutory or public authority bereft of reasoning would be arbitrary, unfair and unjust violating article 14 of the Constitution of India, then, it is my case that non-reply of any complaint received by any public /statutory authority, is a positive act of omission, an arbitrary, unfair and unjustified decision of that public / statutory authority, to not to make a reply, thereby frustrating citizen’s fundamental right enshrined under Article 14.

(8) When, in the case of Srilekha Vidyarthi versus State of UP reported in AIR 1991 SC 537, it was held by the Hon'ble SC that in order to satisfy the test of Article 14, every State action must be informed by reasons and that an act uninformed by reasons, is arbitrary, and arbitrariness is the very negation of the Rule of Law, it is my case that non-reply of any complaint received by State, is an act of omission of the State not informed by reason and thus arbitrary, and thus does not pass the test of Article 14.

(9) When in the case of Dwarkadas Marfatia versus Port Trust Bombay, reported in AIR 1989 SC 1642, it was held by the Hon’ble SC that every action of public authorities must be subject to rule of law and must be informed by reason and when there is arbitrariness in their acts and omissions, Article 14 springs in and judicial review strikes it down and thus whatever be the activity of the public authority, it should meet the test of Article 14, it is my case that when a public authority does not reply to my complaint, I can safely allege that the said public authority is acting arbitrarily, and Article 14 springs in and gives me the locus of being aggrieved and confers safe jurisdiction to the High court under Article 226 to strike down that alleged act of arbitrariness, i.e. the act of “un-replied complaint / representation.

(10) Similarly, when, in the case of Union of India Vs Mohan Lal Capoor reported in (1973) 2 SCC 836, the Hon’ble Supreme Court said – Reasons disclose how the mind is applied to the subject matter for a decision whether it is purely administrative or quasi judicial; and reveal a rational nexus between the facts considered and conclusions reached, it is my case that non-reply of any complaint received by any public /statutory authority implies that although mind was applied to the complaint and arbitrary decision was taken by the administrative authority that no reply should be made.

(11) I further say that, it cannot be said that a person is left without a remedy to challenge any omission or inaction on the part of the public / statutory authority. It may be informed that in a case, reported in AIR 2003 SC 1115, relating to grievance of the Public servant, the Hon’ble SC held that the “inaction” on the part of the authority can be challenged in the High Court by filing a WP under Article 226 of the COI. The Court said - Inaction by itself is an independent cause of action and the High Courts can effectively deal with the same.

(12) It is profitable to quote here the observation of Justice Lord Denning, one of the most celebrated Judge of England, in one landmark English case, popularly known as the Padfield Case [1968] AC 997. This is how Lord Denning dealt with the case before it. His Lordship said-

“It is plain to me that by these provisions parliament has provided machinery by which complaints of farmers can be investigated by a committee which is independent of the board and by which those complaints, if justified, can be remedied. No other machinery is provided. This case raises the important question: How far can the Minister reject the complaint out of hand ? Is the Minister at liberty in his unfettered discretion to withhold the matter from the committee of investigation and thus refuse the farmers a hearing by the committee ? And by refusing a hearing, refuse a remedy ? Mr Kemp, who appeared for the Milk Marketing Board, contended that the Minister need not consider the complaint at all. He could throw it into the waste paper basket without looking at it. The Solicitor General did not support this argument It is clearly untenable. The Minister is under a duty to consider every complaint so as to see whether it should be referred to the committee of investigation. I can well see that he may quite properly reject some of the complaints without more ado. They may be frivolous or wrong headed: or they may be repetitive of old complaint already disposed of. But there are others which he cannot properly reject. In my opinion every genuine complaint which is worthy of investigation by the committee of investigation should be referred to that committee. The Minster is not at liberty to refuse it on grounds which are arbitrary or capricious. Nor because he has a personal antipathy to the complainant or does not like his political views. Nor on any other irrelevant ground.

It is said that the decision of the Minister is administrative and not judicial. But that does not mean that he can do as he likes, regardless of right or wrong. Nor does it mean that courts are powerless to correct him. Good administration requires that complaints should be investigated and that grievances should be remedied. When Parliament has set up machinery for that very purpose, it is not for the Minister to brush it on one side. He should not refuse to have complaint investigated without good reason.

But it is said that Minister is not bound to give any reason at all. And that, if he gives no reason, his refusal cannot be questioned. So why does it matter if he gives bad reason ? I do not agree. This is the only remedy available to a person aggrieved. Save, of course, for Questions in the House which Parliament itself did not consider suitable. Else why did it set up a committee of investigation ? If the Minister is to deny the complainant a hearing- and a remedy- he should have at least good reason for his refusal: and when asked, he should give them. If he does not do so, the Court may infer that he has no good reason. If it appears to the Court that the Minister has been, or must have been, influenced by extraneous considerations which ought not to have influenced him- or, conversely, has failed, or must have failed, to take into account considerations which ought to have influenced him – the court has power to interfere. It can issue a mandamus to compel him to consider the complaint properly.

(13) Discretion in reality means a power given to a person with the authority to choose between two or more alternatives or possibilities each of which is lawful and permissible. The concept of discretion imports a duty to be fair, candid and unprejudiced; not arbitrary, capricious or biased; much less, warped by resentment or personal dislike.

(14) Recording of reasons will show application of mind and probably this recording of reasons is the only remaining visible safeguard against possible misuse of powers conferred upon administrators of a nation.

(15) I say that our system of governance is founded on the lofty principle of rule of law, wherein the Nation’s power is divided amongst three chief organs, each under a duty to conduct itself in a manner that subserves the common good of all and achieve the objectives of a welfare State. The checks and balances were put as inherent safeguards designed to ensure compliance with the maxim “Be you ever so high, the law is above you”. The dicta of the Constitution is crystal clear; namely, the goal of good governance.

(16) I say that even our Constitution of India lay so much importance to the authority of people of India. In our vast, beautiful, geographical landscape of Independent INDIA, i.e. Bhaarat, the Constitution of INDIA, which came into existence on 26th January 1950, is the supreme & fundamental governing volume.

This epic governing volume makes a categorical announcement in the introductory passage that people of INDIA are the architect of this volume. The announcement assumes significance because by this announcement, the fathers of our Constitution intend to acknowledge and give tribute to selfless sacrifice of every men & women who devoted their only life for the independence of INDIA. This announcement is intelligent, designed and purposeful.

There are three chief organs outlined in the Governing volume called Constitution of India - they are Legislature, the Govt and the Judiciary, and all these three organs derive their origin and all powers from this peoples' governing volume.

(17) Also, it is my case that, when the Hon’ble Chief Justice of India Shri S H Kapadia on 15.05.2010 warned the PIL Petitioners that they must first issue notice to the Govt / Public authority before moving courts, and therefore, we the People expect, in principle and in equity, that if that public / statutory authority / govt, turn a blind eye to the notice / Complaint / representation, and if one has to move court for redressal, then this Hon'ble court will also find the occasion to direct that the Govt / Public authority to effectively deal with the issue raised in the complaint / notice / representation.

(18) I seek to recall an historic incident of Indian freedom struggle, occasioned with Mohandas Karamchand Gandhi (His Journey towards Mahatma). In the year 1893, when in South Africa, while holding a First Class Compartment ticket and traveling in, Gandhi was thrown out of the train, for, in those times “Blacks” were not allowed to travel in the First Class Compartment, notwithstanding they hold a valid ticket. It was 9.00 in the chill night. That designated “Black” sent a Telegram to the General Manager of the Railways and registered his complaint. The Complaint of that designated “Black” was attended, forthwith. The General Manager instructed the Station master to secure that complainant reaches his destination safely. Complainant was accommodated in the very next morning train to his destination. And here, in the era of INDEPENDENCE and 21st Century of modern democracy, we have Citizens of Sovereign India, of whose complaint are ordinarily, attended with “denial” and sometimes with hostility.

(19) It is my case that grievance of the people must be promptly and properly attended instead of waiting and allowing for it to be translated into court litigation.

(20) It is my case that the giving of satisfactory reply is a healthy discipline for all who exercise powers over others.

(21) It is my case that a complaint to any public / statutory authority is the most legitimate incident of a democracy.

(22) I / we also invite attention to the national Litigation Policy [For short NLP]. I am of view that Wednesday, the June 23rd, 2010, 14:14 Indian Standard Time, is one of a historic moment for India when Dr.M.Veerappa Moily, Minister of Law and Justice released a Document called National Litigation Policy. The principal aim of this Policy is to transform Government into an Efficient and Responsible litigant. “EFFICIENT LITIGANT” under the Policy is desired as focusing on the core issues involved in the litigation and addressing them squarely; and Managing and conducting litigation in a cohesive, coordinated and time-bound manner.

“RESPONSIBLE LITIGANT” under the Policy is desired as, which in my view is more important, that litigation will not be resorted to for the sake of litigating. This Policy, in point no. 2. of Chapter II of Vision / Mission exhorts that Government must cease to be a compulsive litigant. The easy approach, “Let the court decide,” must be eschewed and condemned. It is equally remarkable to note that when this policy, in the very first point of Vision / Mission reaffirms that it is the responsibility of the Government to protect the rights of citizens and those in charge should never forget this basic principle.

This Policy, in point no. 4(A) of Chapter II of Vision / Mission delves the responsibility on Heads of various Departments, Law Officers and Government Counsel, and individual officers to secure the strict implementation of this Policy.

In the light of this National Litigation Policy, the (Public authority) is empowered to take appropriate legal opinion about the merit of the submissions made by me / us in the background of facts of the case, so as to avoid unwarranted litigation in the court of law against the Government functionaries.

(23) It is finally my / our case that satisfactory replies to complaints are not of some importance but of fundamental importance in State Citizen relationship.

And therefore, it is necessary to trace the evolution and development of law, the emergence of concept of subject & the ruler, and trace the origin of today's concept of Citizens & the State.

At the advent of Human Civilization, ‘Men’ were Sovereign in their own, in the sense that, they were free and were not subject to or bound by any law. Then, men were Ruled by their own conscience and not by codified laws and were even free to the extent of inflicting violence at their will & strength, i.e. Might is right was the scene. Men were guided by own conscience and greed. An action not emanating from reason and the freedom to do as one pleases.

Great Philosopher Thomas Hobbes (1588- 1671) says that prior to concept of Statehood, the man lived in chaotic conditions of constant fear. The life in the state of nature was solitary, poor nasty, brutish and short. For getting self protection and avoiding misery and pain, man voluntarily entered into a contract and surrendered their part of freedom to some might authority, who could protect their lives and property, which emerged later on as the ruler and which ultimately culminated into the shape of the State.

With the great passage of time and centuries together, Codified laws evolved and were introduced in human life. Men came together, they voluntarily surrendered their individual sovereignty to State sovereignty, and opted to subject themselves to laws of the land, however, they were promised, in return, the Rule of codified laws. The rule of codified laws purported to promise the safety of their life & their property and also sought to guarantee the general dignity inherent in human person alongwith guarantee that he will not be discriminated. This is how the ancient Social contract between Men & State came into being.

Among various definitions of State given by Scholars of law and by Philosophers, this appears to be more satisfactory and convincing. It is by professor Goodhart. He defines State in terms of its purpose. He states that the purpose of society which we call a State is to maintain peace and order within a demarcated territory. THE MINIMUM AND ESSENTIAL PURPOSE OF THE STATE IS TO MAKE LIFE POSSIBLE

Hugo Grotius (1583-1645) is regarded as the father of philosophical jurisprudence. He said- it is the first duty of the Sovereign State to safeguard the citizen because State was given power only for that purpose.

And therefore, in the backdrop of this ancient social contract, every Society & every Individual Citizen has certain basic assumptions to take it for granted that complaints made to State will be replied.

(24) And where public / statutory authorities don’t reply to complaints / notice / representations, or reply in interplay of words and in genius pretence, than, in my view, the appropriate approach may be, if at all the aggrieved person wishes to move the court of law, to only request said High Court to direct that public / statutory authority to make a “Reasoned reply” to the Petitioners complaint dated 00.00.0000, and the recording of reasons by said Public / statutory authority must not only be intelligible but which will also deal with the substantial points which has been raised therein in the said complaint and cover other relevant points; and eschew irrelevancies and reply which demonstrate that the authority has given due consideration to the points in controversy and that decisions of the public / statutory authority on the issue raised in the said complaint have been reached according to law.

(25) The most important advantages is that if Writ is filed for this limited purpose, than it may be disposed off in the first hearing, because for passing this order, the Court may not even hear the concerned Public / Statutory authority and may straight away pass order. Secondly, if any such order is passed, than that public / statutory authority is bound to make a reasoned and proper reply, in a time bound manner.

(26) It may be stated here that all persons, aggrieved by the acts and omissions of public authorities, may not have easy access to High Court. In that condition, a Civil Suit for Injunction may be filed before the District Court, seeking necessary reliefs. But before filing Suit, one is obliged to give notice under section 80 of CPC, 1908, to the concerned Public authority.

The Citizens' “Right to Reply” has its roots in democracy of nations and Sovereignty to Rule of Law and stands on a higher footing than the fundamental rights conferred to the people of India under the Constitution of India, and therefore, the Principal Civil Courts, subordinate to High Court, shall have the jurisdiction to grant relief claimed, and may direct the public / statutory authority to give proper and reasoned reply as discussed hereinbefore.

I am aware of two judgments which says that (1) Civil Suit can be filed if the Statutory authorities act in violation of the rules or Act, or abuse its authority or acts in violation of the rules of judicial procedure A 1991 Cal 120, 122, 123; (2) Civil Suit for mandatory injunction for directing local body to discharge its statutory duties would be maintainable. A 2000 Bom 444, 452 (DB).

Pls find file attached of -
Format of Complaint which may be used;
Format of Writ Petition which may be used;
Relevant wealthy Judgments are discussed in format of Writ Petition.

Sandeep Jalan
Advocate
Mumbai.

“The Defendant / Accused leading evidence against himself ”

2011-03-01T21:05:00.000-08:00

Whereas a debt payable by a person has a direct bearing in his Balance Sheet, inasmuch as if he comes to the conclusion that, he no longer is supposed to pay that debt, than, he writes off that debt, and that unpaid debt is deemed as his income and his increased income will entail increased tax liability. And therefore, if a person claims in his Balance sheet that a certain debt is payable by him, he thereby does not treat that unpaid debt as his income and is not obliged to pay tax on that deferred deemed income.

And whereas, if a Suit / case is filed in the court of law for the recovery of money / dishonoured cheque, against a person, and if he claims in the court of law that no debt is payable by him although he may have claimed in his Balance sheet that the suit debt is payable by him;

And whereas if you have obtained information under R.T.I. from the IT authorities that the Defendant / Accused has in fact claimed in his Balance sheet that the suit debt is payable by him; than it’s a positive acknowledgement of legally payable debt, notwithstanding the debt may be time barred.

In the circumstances, an application may be made to the court apprising about such acknowledgement of debt by the Defendant / Accused and thereby requesting the court to treat the denial of the Defendant / Accused as “misleading the court of law amounting to perjury” and the Hon’ble Court may pass the orders in the light of this positive acknowledgment of fact by the Defendant / Accused. In fact, it may be termed as “the Defendant / Accused leading evidence against himself ”.

Also, whereas the Defendant / Accused has claimed in his Balance Sheet as aforesaid, and files his/its reply in the court of law denying any debt payable, than, a complaint may be made to the IT Dept alleging that “the said person (Defendant/Accused) so as to avoid tax liability, has claimed in his Balance Sheet as aforesaid, although the person files an Affidavit in the court of law that no debt is legally payable. I believe that the penalty is huge for evading tax liability.

However, if the info is not available under RTI, than, a complaint may be made to the IT Dept, thereby informing the IT Dept that a case has been filed in the Court of law against the said person (Defendant/Accused), thereby requesting the IT Dept to verify if the Defendant / Accused has claimed in his Balance Sheet so submitted before it, in respect of the debt which is in question in that case before the court of law. Moreover, in cases where Pvt/ pubic limited companies are involved, the relevant info may be sought from Registrar of Companies.

Also, I suggest, in every case filed for the recovery of money / dishonoured cheque, the IT Dept may be added to the list of witnesses, and praying the Court to direct the IT Dept to furnish relevant info to the Hon’ble Court as to whether the Defendant / Accused has claimed in his Balance Sheet in respect of the debt which is directly under the scrutiny of the Court, thereby substantially and significantly assisting the Hon’ble court in reaching the bottom of the truth of the case. Similarly, in cases where Pvt/ pubic limited companies are involved, the Registrar of Companies may be made as one of the witnesses.

Similarly, if a false case is filed for the recovery of a debt which is not actually payable, the Defendant/Accused may ask the Court of law to obtain info from the IT Dept to furnish details, as if the Plaintiff / Complainant has claimed any debt receivables in his Accounts so submitted before the IT authorities, or in the alternative may obtain the relevant info under RTI as if the Plaintiff / Complainant has in fact claimed any receivables in his accounts so submitted to the IT authorities.

In the premise, I come to believe that, every guilty person, some way or the other, always leave his pug mark, thereby lead good “evidence against himself”. I believe, one has to explore unseen links attched to the alleged transaction.

Sandeep Jalan
Advocate
Mumbai.

A quick visit to diverse issues involved in 138 matters

2011-01-03T16:28:00.000-08:00

To Dishonour a Cheque is a Criminal Offence, if the cheque was given in discharge of a debt.

1) IMPORTANCE AND OBJECT OF-
Section 138 of Negotiable Instrument Act 1881[for short N.I. Act 1881] as observed by Hon’ble SC--“Dishonour of cheque causes incalculable loss and inconvenience to payee and entire credibility of business transaction within and outside country suffers serious setback. Goa Plast Pvt Ltd versus Chico Ursula Dsouza (2004) 1 BC 246 (SC)

The object of enacting section 138 is to punish unscrupulous persons who issue cheques without any intention to honour.
D Vinod Shivappa versus Nanada Belliappa. AIR 2006 SC 2179.

The entire genesis of section 138 is that the cheque so dishonoured was given in the due discharge of a legally enforceable debt.

2) NATURE OF 138 OFFENCE AND COURT PROCEEDINGS
Dishonour of a cheque is an economic offence.
Common Cause versus UOI AIR 1996 SC 1916.

Proceedings under section 138 is a criminal prosecution and is not a recovery of money proceeding and the offence calls for conviction and sentence of imprisonment or fine or both.
BSI Ltd versus Gift Holding Pvt Ltd AIR 2000 SC 926

Offer of payment after institution of complaint is of no value and is useless. It is at the most a mitigating circumstance to be taken into account in award of sentence.
M M Chhabra versus Hardev Singh (2003) 1 BC 214 (P & H)

3) To bring home the guilt of the accused under section 138 of the N.I. Act 1881, the following is to be satisfied to make out a strong case and to secure conviction of the person whose cheque is dishonoured for “Insufficient funds”.

1. That Person must have issued a Cheque from the Account maintained by him in a bank;
2. The Cheque issued by that person is in the discharge of any legally enforceable debt or other liability;
3. The Cheque was deposited in the Bank within Six month from the date which the Cheque bears;
4. The said deposited Cheque was returned by the Bank for reason “Insufficient fund”;
5. The holder of the dishonoured Cheque issues a Notice in Writing within 30 days from the date of Bank's intimation that the said Cheque is returned, and by the said Notice, makes a demand of the payment of the Cheque amount;
6. The Person who issued the cheque failed to make payment within 15 days from the date of receipt of the said Notice;
7. The holder of the dishonoured Cheque must file the Complaint within 30 days, before the Judicial Magistrate who has Jurisdiction to adjudicate upon the Dishonour of Cheque Complaints. The period of 30 days is to be calculated from the expiry of fifteen days from the date on which the issuer of cheque receive the notice.

Like for example – If the intimation from bank about Dishonour is received on 01.01.2010, then the holder of cheque is obliged to give Notice within 30 days, i.e. by 30.01.2010. Suppose if Notice is given on 30.01.2010 and was received on 05.02.2010, then the Recipient of Notice is obliged to make payment within 15 days from the date of receipt of Notice, i.e. by 20.02.2010. If by 20.02.2010, the giver of Notice receive no payment, then he is obliged to file complaint within next 30 days, i.e. within 22.03.2010. ( 8 days of feb and 22 days of march)

4) DEFENCES AVAILABLE TO THE ACCUSED
Defences those are available under proceedings under section 138:
1. The Defence that there is no legally enforceable debt or liability existed on the day when cheque was issued.
2. Plea of limitation.
3. The Cheque was given with certain conditions

5) NOTICE
In a case notice of Dishonour was sent under regd post and under Certificate of Posting on correct address. It was returned with the postal endorsement “Not Claimed”. Notice was held to be duly served.
N E Verghese versus State of Kerala 2002 CrLJ 1712 (Ker)

In a case Notice was sent and returned with the endorsement “ refused”. It amounted to receipt of the notice. The HC observed that it must be borne in mind that the court should not adopt in interpretation which helps a dishonest evader and clips an honest payee as that would defeat the very legislative measure.
Arvind Bhat Selarka versus Dilip Cogad 2003 CrLJ 3360 (P & H HC )

Notice sent by UPC Not retuned. Deemed to be served.
P K Radha Krishna versus Vijyan Nambiar 2005 CrLJ 4184 (Kant)

Requisite condition of valid notice is that it should be in writing and must demand for value of the cheque. Minor discrepencies do not invalidate the notice. Abdur rehman M Mulgand versus Mohammed hashan Mulgand 2006 Cr LJ 1159 (Bom) (Goa Bench)

During the validity period of six months, the cheque can be presented any number of times, but once a demand notice is given under section 138(b), the cheque cannot be deposited any more. It was held that once the demand notice is issued, the limitation starts and it is of no use if the accused requests for more time for payment. The holder of cheque must either receive payment or he must file complaint within stipulated time aforesaid.
AIR 1998 SC 3043
AIR 1973 SC 908
Syed Rasool versus Aildas & Company 1992 CrLJ 4048 (AP)

The notice given by the Advocate without his signature is not invalid in the eyes of law.
Sri Satyanarayana Gowda versus B Rangappa 1996 CrLJ 2264 (Karn)
AIR 1995 Karn 219

It is a case where the notice was issued but its service was disputed. The trial court presumed that the accused was evading service. It was held that it is a question of fact to be decided in the trial. The Complaint could not be quashed.
Syed Hamid Bafkay versus Moideen (1993) 85 Comp Cas 267 :
1996 CrLJ 1013 (Ker)

6) CONSEQUENCES OF NOT REPLYING NOTICE OR EVADING NOTICE
Where the person did not dispute his liability at the time when the Notice was given to him, the Court said- This is an important aspect of the law insofar as if the liability is non existent and if the demand is unjustified. The law requires that that the person receiving the notice should clarify the position or dispute the liability at the time when notice is received by him. If this is not done, the court will take note of the fact that the accused did not dispute the factual legal position at the time when notice was served and the accused has come out with an explanation at a belated stage and the court will draw appropriate inferences therefrom.
Devi Tyres versus Nawab Jan 2001 AIR Kant HCR 2154 at page 2159.

7) PLACE OF FILING COMPLAINT
In K. BHASKARAN Vs. SANKARAN VAIDHYAN BALAN AND ANR. {1999 AIR 3762, 1999 Supp (3) SCR 271, 1999(7) SCC510 , 1999(6)SCALE272 , 1999(7) JT558; DATE OF JUDGMENT: 29/09/1999} SC has held as follows:

“The offence under Section 138 of the Act can be completed only with the concatenation of a number of acts. Following are the acts which are components of the said offence : (1) Drawing of the cheque, (2) Presentation of the cheque to the bank, (3) Returning the Cheque unpaid by the drawee bank, (4) Giving notice in writing to the drawer of the Cheque demanding payment of the cheque amount, (5) failure of the drawer to make payment within 15 days of the receipt of the notice. The Complainant can choose any one of the court of the local area within the territorial limits of which any one of those above five acts was done.

8) DELAY IN FILING COMPLAINT
Delay in filing may be condoned in the interest of Justice. Sulekh Sandip Hazare versus Sanjeev Shiv Parker (2004) 4 BC 128 (Bom)

Delay in filing witness list in the complaint doesnt entail fall of the complaint. Augusty versus Rajan (1999) 2 BC 217 (Ker)

The Court may take cognizance if the Complainant satisfies the court that he had sufficient reasons for not making complaint within time. Section 142(b)
O P Chirania versus The Director of Lotteries and Dy Secretary of Govt of Haryana 2008 (3) JCC (NI) 356 (Del)
(1998) 6 SCC 514
(2005) 4 SCC 417

9) AVERMENTS IN THE COMPLAINT
It is not suffice to say in the complaint that the cheque was issued in the regular course of business. In the Complaint there has to be some specific indication of the existence of a legally enforceable debt or liability of the person who has issued that cheque. K Kumar versus Bapsons Footwear(1995) 83 Comp Cas 172 Mad

However, there is no burden on the Complainant to prove the entire details of the transaction which resulted in the issuance of the Cheque. It is suffice if it is stated that the cheque was issued in discharge of a specific legally enforceable debt or liability. Joseph Jose versus J Baby (2002) 2 Ker LJ 332 (Ker)

10) BURDEN OF PROOF
When the Payee of the Cheque produces the Cheque which was issued by the drawer and dishonoured, he fulfills his initial burden to enable him to file complaint because rest of the matter are covered by the presumption in his favour under section 139 and 118 of the NI Act 1881. Abdul Hameed versus State of rajasthan (2002) 3 BC 529 (Raj)

The most common presumption about cheque is that it is for payment of what is due. It is meant to extinguish that debt and not to create a new one. However, it is always open to the drawer of the cheque to show that the cheque was issued as a loan. Mohummed Kutty versus Abdulla (2002) 3 BC 9 Ker (DB)

Contrary to established criminal jurisprudence, a person issuing a cheque which has been dishonoured is presumed guilty and is put under burden to prove his innocence by establishing that the cheque was given but not in discharge of any legally enforceable debt. R Sankaralingam versus UOI (1997) 1 BC 541 (Mad- DB)

It is not necessary for the accused to lead positive evidence to rebut the presumption. The circumstances on record may prove to be sufficient for rebuttal purposes. Raman Finance Corp versus Harmat Singh (2007) 3 BC 647 (P& H- DB)

Where the presumption is not rebutted, the offence is made out. R Vadivelu versus Sakhti Asphalts & pelts (2003) 2 BC 89 (Mad)

Drawer of the cheque is to prove that there is no liability towards the payee and cheque was not issued towards discharge of any legally enforceable liability.
V Munikrishaniaha versus Janki Ram Naidu 2005 CrLJ 1093 (AP)
Jagmohan versus State of U P 2005 CrLJ 1361 (All)

11) COMPROMISE / SETTLEMENT
In a case, the Complainant refused to compromise with the accused. The court held that in such a case there cannot be a compromise and proceedings cannot be quashed even if the whole amount is deposited in the court. The Court said- any amount paid subsequent to the filing of complaint will not absolve the accused from criminal liability incurred under section 138 of the NI Act 1881.
Phoolchand saraogi versus State of Rajasthan AIR 2009 (NOC) 959 (Raj) (2005) 2 SCC 571

12) COMPENSATION
It has been held that normally in a successive prosecution under Section 138, a direction under section 357 of CrPC for payment of compensation must follow.

In M S Anil Kumar versus Shamy (2002) 2 Ker LJ 711 (Ker), the Court said that very prospect of going to prison, irrespective of the length of the term, is sufficient deterrence.
The Court further noted that the Courts below did not alertly perceive the plight of the Complainant. In spite of the several binding precedents like Hari Kishan and State of Haryana versus Sukhbir Singh AIR 1988 SC 2127, it is unfortunate that Courts do not perceive the necessity to compensate the victim.
The work pressure on the judicial system is enormous. It must be the endeavor of all functionaries to ensure that multiplicity of proceedings is avoided. In that view, every court has a duty to insist and ensure that the Complainant is not compelled to simultaneously institute civil remedies alonwith the prosecution under section 138.
Misplaced sympathy cannot also have in the criminal adjudicatory process. It is equally the purpose of the legislature to ensure that account holder make use of their cheques carefully, diligently and with requisite caution so that the intended healthy commercial morality would prevail in the economy. That cannot be achieved unless the account holders are deterred from irresponsible issue of cheques to suit their convenience

In a case, a cheque for Rs.1,50,000 was dishonoured. The accused was held guilty. The Court awarded compensation of Rs.3,00,000. Rs.2,95,000 went the complainanat and Rs.5000 to the State exchequer.
Bhavani versus D C Dodda Xangaiah 2000 CrLJ 3814 (Karn)
B Hari Krishna versus Macro Links Pvt Ltd ILR 2000 (Ker) 2855.

13) PUNISHMENT
When a person is found guilty, it is obligatory on the court to impose sentence of imprisonment or fine or both.
Thomas versus Kerala State (2004) 3 BC 128 Ker

In a case the Hon'ble SC observed and said- proceedings under section 138 of NI Act 1881 are not recovery proceedings and these proceedings are meant to punish the persons who after issuing a cheque, commmits default in honouring the same.
Dhanjit Singh Nanda versus Ram Kumar Agarwal 2009 (2) JCC (NI) 99 (Del)
AIR 1982 SC 1238
(1988) 4 SCC 655

In a case the whole amount covered by the cheque has been deposited after the institution of the Complaint. The SC held that it does not absolve the accused from the offence under section 138.
Rajneesh Agarawal versus Amit J Bhalla AIR 2001SC 518
AIR 1999 SC 2182; AIR 1998 SC 1057

In a case, the Hon'ble SC cautioned and said that no drawer of cheque can be allowed to take Dishonour of cheque issued by him light heartedly.
Suganthi Suresh Kumar versus Jagdeeshan (2002) 2 SCC 420
AIR 1988 SC 1353
AIR 2001 SC 567

14) LEGALLY ENFORCEABLE DEBT
The dishonoured Cheque issued in the discharge of a legally enforceable debt or liability may or may not arise out of commercial transaction. Dickson Prem Raj versus R Manoharan (1995) 83 Comp Cas 245 Mad.

Under section 25(3) of the Contract Act 1872, a promise in writing to pay a time barred debt and any cheque issued in furtherance of such promise, becomes legally enforceable liability. Zaheeda Kazi versus Sharina Ashraf Khan (2007) 3 BC 767 (Bom)

If the debt is time barred by reason of section 18 of the Limitation Act 1963, the debt is not legally recoverable at the time of issue of cheque. M/s Vijaya Polymers Pvt Ltd versus M/s Vinnay Agarawal 2009 (2) JCC (NI) 144 Del
No liability where rejection of goods justifiable. Keygien Global Ltd versus Madhav Impex (2007) 2 BC 355 (Kant)

15) CHEQUE WAS ISSUED IN DISCHARGE OF ANOTHER PERSON”S LIABILITY
A careful reading of section 138 indicate that it relates to issuance of a cheque for payment of any amount of money for discharge of any debt or other liability. The wording of the section implies that the cheque may have been given in discharge of another person's liability. Devendra Kumar Rai versus Ram Gopal Rai (1998) 34 All LR 169 (All)

The Cheque is issued for discharge of another person's liability comes within the purview of section 138 of the NI Act 1881. Gopi S/o vasudevan versus Sudershan, S/o Chakarpani 2002 CrLJ 4194 (Ker)

16) CHEQUE GIVEN IN PURSUANCE TO ILLEGAL Contract / Agreement
If a cheque is issued in respect of a debt or liability which is not legally enforceable, section 138 would not apply. The Court will refuse to enforce an illegal agreement. Virendra Singh versus Laxminarayan 2007 (1) JCC (NI) 6 (Del)

17) CHEQUE IN GIFT / CHARITY
If the cheque is given as a gift or in charity, it does not amount to offence under section 138 of the NI Act 1881. 1997 CrLJ 4237 (AP) Uplanche Mallikarjun versus Rat Kanti Vimla.

18) DIFFERENCE IN THE AMOUNT OF DEBT AND AMOUNT OF CHEQUE
If there is difference in amount in the Notice and the actual cheque amount, it was held that- the case of the Complainant doesn’t fail. If the outstanding debt is higher than the cheque amount, there is no irregularity. Devi Tyres versus Nawab Khan AIR 2001 Kant HCR 2154 (Kant)

It is immaterial whether the amount of the cheque is more or less than the liability. Only thing is that the whole amount of the cheque is necessary to discharge the debt or legal liability. P V Kochayippa versus P N Suprasidan, rajni Dhawan 2002 CrLJ 4803 (Ker)

19) PARTNERSHIP FIRM
An unregistered Partnership firm can institute a complaint under section 138. The effect of non registration under section 69 of the partnership Act 1932 are confined to cases of civil rights.
Beacon India versus Anupam Ghosh (2004) 1 BC 484 (Kar)

20) OFFENCES BY COMPANIES
AIR SC 2000 145 Anil Hada versus Indian Acrylics Ltd
The managing Director of a company accused under section 138 was held guilty notwithstanding her plea that she did not participate in the day to day administration of the company and was not aware of its affairs. Jayalakshmi Natraj versus Jeena & Co (1996) 86 Com Cases 265.

Offences by Companies Orient Syntex Ltd versus Besant Capital Tech Ltd (1999) 2 BC 609 (Bom)
Notice to Company is deemed notice to MD. Sarvaraya Tea Ltd versus Integrated Finance Ltd (2001) 2 BC 476 (Mad)

When the offence is committed by the company, either the company alone, or the person in-charge of the company alone, or both of them together can be prosecuted for the offence under section 138 of NI Act 1881.
Visva Cement products versus Karnataka State financial Corp Gadag (1997) 4 Kant LJ 23 : 1997 CrLJ 4598 (Karn)
AIR 1976 SC 1672
AIR 1972 SC 2639
AIR 1984 SC 1824

21) SELF CHEQUE
In a case it was held that the holder of self cheque is a holder in due course and the complaint is maintainable.
Mahesh Goyal versus S K Sharma CrLJ 2868 (P & H)

22) HOLDER IN DUE COURSE
Holder in due course has no right to maintain a complaint because there was no enforceable debt between him and the drawer of the cheque. Shirdi Sri Steel Balu Complex versus State of A P 2002 CrLJ 3193.

23) SIGNATURE ON THE CHEQUE
A person consciously or unconsciously may put different signatures. In this case, the applicant being conscious of anticipated litigation, might have scribed different signature with dishonest intention of defeating provisions. Satish Jayantilal Shah versus Pankaj Moshruwala (1997) 1 BC 320 (Guj)

The fact that the Payee's name and the amount of cheque were not in the handwriting of the drawer doesnt invalidate the cheque. Lily Kutty versus Lawrence (2004) 1 BC 130 (Ker- DB)

It is not essential for the Court to get the opinion of the expert in each and every case, especially when the court is empowered to compare the signature with the admitted signature u/s 73 of the Evidence Act. S Naagarathinam versus P marappan (2000) 2 BC 170.

24) PAY ORDER AND CHEQUES
Pay Order is a Cheque within the purview of section 138 of the Act. Punjab & Sind Bank versus Vinkar Sahakari Bank Ltd (2001) 7 SCC 721 : AIR 2001 SC 3641.

25) REFER TO DRAWER / STOP PAYMENT / ACCOUNT CLOSED
“Refer to Drawer”
We are of the firm view that “Refer to Drawer” necesasrily means, as per banking parlanc, that the cheque has been returned for want of funds in the account of the drawer of the cheque.
State of Bihar versus Deokaran Nenshi AIR 1973 SC 908
AIR 1960 SC 866
Syed Rasool versus Aildas & Company 1992 CrLJ 4048 (AP)

“Accounts Closed” amounts to Insufficieny of funds.
NEPC Micon versus Magma Leasing Ltd AIR 1999 SC 1952
AIR 1988 SC 1057
AIR 1966 SC 2339

Stop Payment or Instructions for non payment- virtually means “insufficieny of funds”.
Electronics Trade & Technology Development Corp Ltd versus Indian Technologists and Engineering (Electronics) Pvt Ltd. (1996) 2 SCC 739
AIR 1998 SC 1057

26) BLANK CHEQUE
In a case accused raised the defence of having issued blank cheques as a security. Still, burden lies on the accused to prove that on the date of dishonour of cheque no amount was due from him to the complainant.
Latha K Nair versus M/s Gold Mohur Foods & Feeds Ltd 2008 CrLJ 1542 (Kant)
AIR 1961 SC 1316.

Blank Cheque given as security. This defence is not available to the accused. The accused must satisfy the court that there exist no legally enforceable debt.
ICDS Ltd versus Beena Shabeer AIR 2002 SC 3014.

27) CHEQUE MISPLACED
In a case, the issue was that the cheque was given to discharge the debt borrowed on a promissory note, but the said promissory note was not produced. It was held that mere loss of promissory demand note or its non production is not sufficient to hold that there is no legally enforceable debt. Failure of accused to give reply to legal notice is one of strong circumstances to draw an inference that the accused borrowed amount in question and the cheque was issued towards payment of legally enforceable debt. Gorantla Venkteshwara Rao versus Kolla Veera Raghava Rao 2006 (1) JCC (NI) 73 (AP)

28) STOLEN CHEQUE
In a case defence was taken that the cheque was stolen. However no police complaint was made. No instructions were made to the bank to stop payment. The defence was struck down.
Ashok Kumar versus Gulshan Kumar 2010 (1) Crimes 394 (Del)
Hiten P dalal versus Bratindranath Banerjee (2001) 6 SCC 16
(2006) 6 SCC 39
(1999) 3 SCC 35.

29) JOINT ACCOUNT
In a case, a cheque was issued by a husband from an account jointly operated by his Wife. It was held that the wife cannot be held responsible or liable.
T N Devi versus A C Haridas 2004 CrLJ 4710 (Ker)

30) INSOLVENCY PETITIONS
In a case, insolvency Petition was filed covering the dishonoured cheque amount. It was held that mere presentation or pendency of Insolvency petition would not disentitle the complainant to seek for remedy by way of penal action. C T Thangaraj versus Marugesan 1999 CrLJ 3436 (Mad)

31) EXEMPTION FROM APPEARANCE
The offence under section 138 depends upon documentary evidence and therefore presence of accused is not very much necessary, at all stages of the trial. The trial court was directed to allow the accused to be represented through counsel. Agro Services center versus State of Orissa (2005) 1 BC 308. Also item numbers – 720, 726, 732, 737, 738 in Tannan book

32) APPLICATION OF SECTION 482 CrPC 1973
It is impermissible to invoke the provisions of section 482 of CrPC 1973 to quash a complaint when the facts are contentious and disputed. GPR Hsg Pvt Ltd versus K Venugopala Krishna (2004) 3 BC 37 (Ker)

33) MONEYLENDERS
The presumption under section 139 is not available to a moneylender. He has to prove the fact of a loan by other evidence and not merely by the fact of presumption. M Senguttuvan versus Mahadevaswamy (2007) 4 BC 708 (Kant)

34) PROPRITORSHIP CONCERN
Prosecution against proprietorship concern is not maintainable. Complaint must be against the proprietor.

Thank you
Sandeep Jalan
Advocate
Mumbai.

“Summons for Judgment”

2011-01-02T00:25:00.000-08:00

Yes…you are right, I am talking about Summary Suits contemplated under Order XXXVII (Order 37) of Civil Procedure Code of 1908, a very powerful and expeditious remedy provided under the law for recovering money, which is routinely trapped in commercial transactions and in contracts. In Summary Suits, the Principal amount to be recovered must be certain.

As observed by Gujrat High Court- “The sheer purpose of enacting Summary Suits is to give impetus to commerce and industry by inspiring confidence in commercial population that their causes in respect of money claims of liquidate amounts (ascertained amount) would be expeditiously decided and their claims will not hang on for years blocking their money for a long period. Navinchandra Babulal Bhavsar versus Bachubhai Dhanabhai Shah AIR 1969 Gujrat 124 (128) DB.

The underlying public policy behind Order 37 is the expeditious disposal of suits of commercial nature. Bankyag B G Agarawal versus Bhagwanti Mehji 2001 (1) Bom LR 823 (DB)

The provisions of this Order 37 are enacted to ensure that the defendants doesn’t prolong the litigation by raising untenable and frivolous defences. K R Kesavan versus The South Indian Bank Ltd AIR (37) 1950 Madras 226 (228) DB

The provisions of Order 37 are enacted by Parliament to discourage litigants from coming forward with untenable pleas with the object of delaying admitted liabilities and prolonging the inevitable decree. Dena Bank versus M/s Gladstone Lyall & Co 87 Bombay Law Reporter 477 (480)

SUMMARY PROCEDURE- THE GENIUS OF SUMMARY SUITS
The procedure contemplated by Order 37 of CPC constitutes a clear departure from usual procedure. According to usual procedure, every defendant has a right to defend his case in the manner best suited to him. The Summary procedure is a powerful weapon in the hands of Court to shut out frivolous defences which are raised in commercial causes with a view to prolong the litigation. Kocharabhai ishwarbhai patel versus Gopal bhai C patel AIR 1973 Gujrat 29 (31)

The procedure is--

1. The Plaint is filed in the competent court of jurisdiction.
2. The Plaint gets numbered.
3. The Plaintiff takes out summons and arranged to get it serve upon the Defendant through Bailiff.
4. Once the Summons is served upon the defendants, he has to file his appearance in the court within 10 days from the receipt of summons.
5. If the defendant fails to file his appearance within 10 days, the Plaintiff may approach the Court to pass ex-parte decree and courts are empowered to pass ex-parte decree in such circumstances.
6. If the defendant file his appearance, than the Plaintiff has to take out Summons for Judgment and arranged to get it serve upon the defendant through Bailiff.
7. The defendant in receipt of Summons for Judgment has to move court within 10 days and file his Affidavit of Defence. In his Affidavit of Defence, he must satisfy the Court that he has substantial defence.
8. After looking at the averments made in the Affidavit of Defence, the Court may allow the Defendant to defend the case or the Court may pass the decree.

DISPUTES WHICH ARE COVERED UNDER SUMMARY SUITS

1. Summary Suits can be filed on the basis of money to be recovered on Written Contracts / agreements.
2. Summary Suits can be filed on the basis of money to be recovered under dishonoured cheques / Bills of Exchange/ Promissory Notes / Hundies.
3. Summary Suits can be filed against Guarantor, if the claim against the Principal is in respect of a debt or liquidated amount.

Widest possible interpretations may be given to the scope of written contracts. Here are some of the court rulings and observations which define the scope of Written Contracts. The words in Summary Suits, “Written contract” doesn’t requires that the contract must be signed by the parties concerned. In my view, it says- the contract must be expressed and when its existence and enforceability can be traced to conduct of the parties to the contract, although the expressed contract may not be signed by the parties concerned.

1. Invoices/Bills are written contract within the contemplation of Order 37 of CPC 1908. KIG Systel Ltd versus Fijitsu ICIM Ltd AIR 2001 Del 357.

2. As a result of acceptance of goods delivered in pursuance of the invoice, the demand for the price of goods admittedly received by the purchaser on the basis of the invoice is written contract.

3. Agreement in writing does not necessarily mean documents are formally signed by the parties. Documents exchanged by and between the parties may be construed as agreement in writing. BOI Finance versus padma Alloy Casting Bom CR 218.

4. Summary Suit can be filed on the basis of confirmed Balance / Khata and the reconciliation statement. Hindustan Wires Ltd versus Ralsons Tires Ltd 90 (2001) Delhi Law Times 777.

5. Where the liability was acknowledged in Balance sheet which was signed by partners of the firm, it was held that it amounted to a promise within the meaning of section 25(3) of the Contract Act 1872. Section 2593) validates a promise to pay a debt barred by limitation. M/s R Suresh Chandra & Co versus Vednere Chemicals Works & Ors AIR 1991 Bom 44 (47 Para 10)

6. The acknowledgment of debt in Balance Sheet amounts to acknowledgment in writing within the meaning of section 18 of the limitation Act. Rishi Pal Gupta versus S J knitting & Finishing Mills Pvt Ltd 73 (1998) Delhi Law Times 593 (598 para 14) A V Murti veresus B S Nagabasavanna 2002 (1) Supreme 517 (520 para 5)

7. Where a receipt indicates that money was borrowed, it becomes an acknowledgement. M/s Kalyani Hansraj & Ors versus Mrs Kamong A Agarwal & Ors 1990 (1) Bombay Cases Reporter 386 (389 para 10)

8. Where the suit was filed for recovery of price of goods sold and delivered, it was observed that Plaintiffs has delivered the goods to the defendants not intending to do so gratuitously and the defendants had enjoyed the benefits of them and under the provisions of section 70 of Contract Act, the Defendants are liable to pay compensation in respect of such goods to the plaintiffs. Jaishree Chemicals versus M/s Esskay Dyeing & printing Works, BHC Summons for Judgment No.23 of 1976 in Suit no. 1405 of 1975 decided on 19th April 1976.

Some Judgments explaning the scope of Summary Suit
Rule – 1. Classes of Suits – Lalchand Jain versus Gheesi AIR 1999 Raj 69

Rule 1 – Indian Bank versus Maha State Co-op Marketing Fed (1998) 5 SCC 69

Summary Suit by Bank on entries – Punjab and Sind Bank Ram Prakash Jagdish Chander (1990) 4 Del LT 497

If money of a depositor is misappropriated by the Bank, Summary Suit is maintainable. AIR 1996 Bom 386

There must be necessary averment in the Plaint to give necessary jurisdiction to court under Summary procedure. AIR 2001 AP 56.

AIR 2005 Del 369

Written Contract: BOI Finance versus Padma Alloys Casting AIR 1999 Bom 340

Summary Suit is Maintainable in following cases –

For recovery of inter-corporate loan on the basis of receipt and agreement – A 2002 Bom 481, 483, 484;

Where amount thereof is not properly quantified or is in excess of what the plaintiff is entitled to, Summary Suit is maintainable – A 2004 Bom 186; (2004) 2 CTC 641; (2004) 106 (2) Bom LR 294 (FB);

Merely because a counterclaim is filed does not render a Summary Suit not maintainable. A 2001 Bom 481, 484;

Suit for recovery of money of sale of equity shares – A 2006 (NOC) 352 (Cal);

Recovery of price of goods, interest claimed – A 2006 (NOC) 1094 (Cal)

Invoice / Bills are written contracts – A 2001 Del 357, 362;

Recovery of money paid to purchase Air Tickets – A 2006 (NOC) 1042 (Del )

Summary Suit Not Maintainable in following cases –

Claim based on Indemnity Bonds – (2002) 4 SCC 736, 742;

THE VERY CRITICAL- SUMMONS FOR JUDGMENT / LEAVE TO DEFEND
Once the Summons is served upon the Defendants and he files his appearance in the Court, the Plaintiff has to move an application to the Court, i.e. called Summons for Judgment. This Summons for Judgment is then served upon the Defendants and he is called upon to make an application to the Court to grant him the leave to defend the case, within 10 days from the receipt of that Summons for Judgment.

In an Application for leave to defend, what the Court must do is to find out if whether the defendant has raised the triable issues and whether the defence is not sham and illusory and whether the defendant has raised such issues, which if proved at the trial, will result in the dismissal of the plaintiff's Suit. If it is so, the defendant is entitled to leave to defend.
N Prabhakaran versus Manager CITIBANK N A Chennai (2001) 3 MLJ 540 (542- para 5)

The jurisdiction to grant leave or refuse the same is to be exercised on the basis of the affidavit filed by the defendant. That alone at that stage is the relevant document and the inquiry of the court is to be confined to the averments made in the affidavit by the defendant. At the hearing of Summons for Judgment it is not open to the plaintiff to request the Court to look into any evidence. Adverse inference cannot be drawn against the defendant if documents are not produced in support of statements made in the Application for leave to defend. Raghavaveera Sons versus Mrs Padmavati AIR 1978 Madras 81 (85, 86 & 87) (Paras 12 & 13)

If there is a triable issue in the sense that there is a fair dispute to be tried as to the meaning of a document on which the claim is based or uncertainty as to the amount actually due or where the alleged acts are of such a nature as to entitle the defendant to interrogate the plaintiff or to cross examine his witnesses, leave to defend should not be denied. Rajduggal versus Rameshkumar Bansal 1991 sup (1) SCC 191.

In Indian Rayon & Industries Ltd versus M/s Sirohya Enterprises AIR 1992 Bombay 60 (61 & 62) it was held that in order to obtain unconditional leave to defend, it is not sufficient to raise triable issues, but he should satisfy the court that he has a substantial defence.

In a case the Court observed that the defence of the defendant bank was patently dishonest and so unreasonable that it cannot reasonable be expected to succeed. Leaver to defend refused. R K Agencies Ltd versus Central Bank of India AIR 1992 Calcutta 193 (198, 199, Paras 24, 25 & 29)

TEST TO DETERMINE FOR GRANTING LEAVE TO DEFEND

Powers conferred upon court by Order XXXVII (Order 37) is a sophisticated and delicate instrument and the same must be handled with great care and caution. In reality, it may be sometime, extremely difficult for courts to identify “frivolous defences”, Sham & illusory defences” “substantial defence, unreasonable or dishonest defence”, so as to decide whether leave to defend the Suit should be granted or refused to the Defendant.

Therefore, I here produce some simple cases wherein the Courts granted or refused leave to defend. It is necessary to understand the principles on which the court may identify whether a defence raised by the Defendant is frivolous or illusory or if it may be genuine.

In all the cases listed below, it may be noted that, the cases in which where the leave to defend was granted, the defendant has placed such facts before court, that if proved, will dislodge / washout the case of the Plaintiff.

ILLUSTRATIONS FOR GUIDANCE OF THE COURT

1. In a Case before the Hon'ble Delhi high Court, a Summary Suit was filed on the basis of dishonoured cheque of Rs.27,000/- alleged to have been issued in payment of some computer hardware and software sold by Plaintiff and where the Defendant alleged that he has issued a post dated cheque on the assurance from the Plaintiff that the said cheque will be deposited after the delivery of the said hardware and software. The Cheque was however came to be deposited without the said supply of computer hardware and softwares. It was held that the plea raised by the defendant raises a triable issue inasmuch as the material on record it cannot be said that the defence of the Defendant is malafide or vexatious and is not bonafide. The Defendant was granted unconditional leave to defend. International Computers Consultants versus Home Computer Services (P) Ltd 68 (1997) Delhi Law Times 407 (413 Paras 23 & 24) (DB)

2. Where the defendant applied for setting aside ex parte decree in summary suit based on dishonoured cheque on the ground that the plaintiff had suppressed material facts to the effect that the plaintiff had not disclosed his complaint under section 138 of the Negotiable Instruments Act, in the plaint and that plaintiff had received a sum of Rs.90,000/- as compensation out of fine imposed on the defendant in the said criminal complaint, it was held that" the suppression of the material facts has to be such which would materially affect the decision of case. The pendency of criminal complaint could have no bearing on the merits of the claim of the plaintiff in the summary suit. The law permits the plaintiff to take out both civil and criminal proceedings. Both proceedings can be continued simultaneously. Both remedies are independent of each other. The Court declined to set aside the ex parte decree. Vijay Kumar versus Govind Bhai 1999 (4) LJ 14 (para 5)

3. In cases where the defendant raises a prima facie case of fraud, including details as contemplated in the CPC, the Court ought to act on that and grant him leave to defend without imposing any condition that he should pay money into the Court. (1932) 2 KB 353 (358 & 359)

4. Where the Defendant describes the documents relied upon by the plaintiffs as forged documents, the matter requires a trial in view of the nature of defence. Amarjeet Singh versus Mrs.Savitri Devi Bhalla 70 (1997) Delhi Law Times 655 (Paras 4 & 7)

5. In Jivaram Ramchand Fegade Group versus T Udha Ram Fruit Co and Ors, the Division Bench of Delhi High Court observed that where the Defendant alleged forgery and fabrication of documents by the Plaintiffs, it would be too much to say that the defendant must produce a surety before they can defend the Suit. 29 (1986) Delhi Law Times 305 (para 4)

6. Where the Defendant alleged that the Plaintiff did not act in accordance with the terms of the agreement and therefore the defendant has stopped payment of cheques and stated that defendant has already filed suit for Specific performance of agreement. It was held that the defence raised triable issues and defendant was granted unconditional leave to defend. Radhey Shyam & Ors versus Jaibir Singh 67 (1997) Delhi Law Times 875 (877)

7. Leave to defend was refused where the defendant in various letters admitted the correctness of the amount claimed by the plaintiff. Corporate Voice Pvt Ltd versus Union Leather India Ltd 60 (1995) Delhi Law Times321 (323 para 8).

8. If tenor of defences raised by the defendants blows hot and cold and is self contradictory, he forfeits his right to defend. Vinod Kumar versus Keshav Anand 2002 AIHC 1621 (1624 Para 12)

9. In a case it was held that a claim for unliquidated (unascertained) damages does not gives rise to a debt until the liability is adjudicated. KSL & Industries Ltd versus Nath Seeds 2001 (4) All MR 134 (137 Para 6)

10. Where the defendant alleged that two cheques relied upon by the plaintiff were stolen cheques and the defendants never borrowed any money and never issued any cheque to the plaintiff and one of the two cheques relied upon by the plaintiff bears signature of the partner of the defendant who had expired much prior to date mentioned on the cheque, it was held that the defence taken by the defendants 1 to 3 could not be said to be false or frivolous on the face of it did raise triable issues. Unconditional leave to defend was granted in respect of one cheque and conditionally leave to defend was granted in respect of another cheque. Dhaliwal Trading Agency versus Varindar Singh 2002 (1) Bank J 205 (209 para 8)

11. Where a summary suit was filed to recover the amount due on credit card facility and where the trial court rejected application for leave to defend and passed decree for Rs. 2,22,644.92 by treating the computerised bank statement as conclusive proof through the said statement was neither a certified copy of the entries contained in bank's books nor it carried a certificate as contemplated under the Bankers Book of Evidence Act and where the defendant contended that only Rs. 29,906.00 was payable by him and placed a statement of account on record to show that Rs. 1,10,0007- was paid by him to liquidate liability, it was held that the defendant had made a point and it appeared that his approach was fair. Leave to defend was granted on condition of the defendant's depositing Rs. 50,000/-. Bipin Narain Karn versus Bank Of Baroda 89 (2001) Delhi Law Times 763.

12. Where summary suit was filed on the basis of dishonoured cheque for Rs. 5 crores and written contract containing terms of inter corporate deposit and where the defendants had handed over shares of listed company as collateral security with right to plaintiff to dispose off the said shares in case of default in repayment and where the defendants contended that the defendants were entitled to claim set off and counter claim as the plaintiff should have sold the shares when the defendants committed default as the shares would have fetched more than Rs. 10 crores at that time and that though the plaintiffs had decided to give up the security, the shares were not physically handed over to the defendants, it was held that the defendants had raised substantial defence and triable issues but in view of clear cut admission and disputed facts, leave to defend was granted on the defendants depositing a sum of Rs. 5 crores. Leela Capital Finance Ltd Modiluft Ltd 2001 (2) Bom C R 110 (115 Paras 12 & 13)

13. In State Industrial & Investment Corp of Maharashtra ltd versus Hargovind Vithaldas & Ors, the Court observed that where the defend to leave was granted conditionally, it need not necessarily be an order of deposit as such. Instead of deposit, there could be various other items such as time bound schedue for the hearing of the suit, or an order of restraint on the disposal of defendant's property or an order to furnish any surety etc. 1990 Mah LJ 74.

14. Where the price of the goods were payable on the basis of “Cash on Delivery” and where the defendant accepted the delivery of the goods without any reservation and the defendant has dealt with the goods after taking delivery, it was held that trial court was justified in refusing leave to defend. MMTC Ltd versus Dimple Overseas Ltd AIR 2001 Delhi 427

15. Where in a suit on promissory note the defendant admitted his signature on promissory note but alleged that he had executed blank promissory note in favour of one broker who did not return the said promissory note after the defendant cleared his liability and where he alleged that he had never seen the plaintiff and never borrowed any money from plaintiff and where the trial Court refused to grant leave to defend the suit, it was held that the trial Court was justified in refusing the leave to defend the suit as the defendant had not taken any such plea in first instance which he could have very easily done by replying the registered notice. S Anand versus S Aruna 2000 AIHC 4372

16. Where the defendant admitted execution of cheque but pleaded that it was only given as collateral security for the price of goods which the plaintiff supplied to the defendants and contended that these goods were paid for by cash payments made from time to time and by other cheques and set out the exact dates on which according to the defendants the payment had been made and gave numbers of cheques, the Supreme Court held that the facts given in the affidavit were clear and precise. The Supreme Court found fault with the trial Judge's observation to the effect that "In the absence of those documents, the defence of the defendants seems to be vague consisting of indefinite assertions. The Supreme Court held that the stage of proof can only come after the defendant has been allowed to enter an appearance and defend the suit and that the nature of the defence has to be determined at the time when the affidavit is put in. At that stage all that the Court has to determine is whether "if the facts alleged by the defendant are duly proved" they will afford a good, or even a plausible, answer to the plaintiff's claim. Once the Court is satisfied about that, leave cannot be withheld and no question about imposing conditions can arise; and once leave is granted, the normal procedure of a suit, so far as evidence and proof go.

17. In M/s. Aganall Traders Ltd. v. Shyarn Ahuja, the suit was filed on the basis of dishonoured cheque and promissory note and written agreement. In leave to defend application the defendant inter alia pleaded that a sum of Rs. 5 lacs was withdrawn from bank and paid in cash to the plaintiff for which no receipt was issued by the plaintiff. It was held that the defence taken by the defendant by no stretch of imagination can be said to be fair, bona fides or reasonable and that the defence was totally frivolous, false, illusory or sham or practically a moonshine. Leave to defend was refused and the decree was passed against the defendant. AIR 1999 Delhi 369 (371)

18. Where the summary suit was filed for the recovery of hotel charges amounting to Rs. 22,02,555.87 and where the defendant did not dispute her stay in the hotel, the invoice amount, the legal notice and her reply to the notice wherein she admitted her liability and where the defendant inter alia alleged in the application for leave to defend that the admission of liability was made under duress and that a third party was liable to make payment of hotel charges in respect of the defendant's stay in the said hotel, it was held that it was a case of setting up a defence which was illusory or sham or practically a moonshine and hence the defendant was not entitled for leave to defend. Indian Hotels Co Ltd versus Mrs V P Singh 59 (1995) Delhi Law Times 301 (304 & 306, Paras 5, 6 & 9)

19. Extraneous Controversies: Here the principal filed suit under Order XXXVII of C.P.C. on the basis of hundis executed by his agent and where the agent claimed commission alleged to be due on sale of goods, it was held that the agent was not entitled to permission to defend the suit on the ground of alleged claim of commission as the two claims constituted different causes of action. The Court held that extraneous controversies and different causes of action cannot justify enlargement of scope and purpose of summary action brought under Order XXXVII of C.P.C. M/s Brame Suri Pvt Ltd Suri Smith Chemicals & Asbestos Pvt Ltd 19 (1981) Delhi Law Times (SN) 12

Therefore, the test to determine whether Defendant deserves a leave to defend the case is- whether the nature of defence raised by Defendant is such which challenges the very issue, on which the Plaintiff has founded his case.

Some Judgments on Appeal filed in Summons for Judgment:
Madanlal versus Kedarnath AIR 1930 Bom 364
Ramanlal versus Chunilal AIR 1932 Bom 163
V S Saini versus DCM Ltd AIR 2004 Del 219
Simruthmull versus Jagraj AIR 1954 Mad 334
A S Chettiar firm versus V T Veerappa AIR 1935 Rang 245
Banwarilal versus Sohanlal (1955) 1 ILR Cal 299
Hiralal versus Salilkumar AIR 1973 Cal 320
Mohammadunissa versus Fayaz Ali 1958 Punj 437
D Shanlal versus Bank of Maha AIR 1989 Bom 150 (DB)

It deserves mention here the observations of Hon’ble Supreme Court in T. Arivandandam v. T. V. Satyapal reported in (1977) 4 SCC 467 : (AIR 1977 SC 2421):
"We have not the slightest hesitation in condemning the petitioner for the gross abuse of the process of the court repeatedly and unrepentantly resorted to. From the statement of the facts found in the judgment of the High Court, it is perfectly plain that the suit now pending before the First Munsif's Court, Bangalore, is a flagrant misuse of the mercies of the law in receiving plaints....... if on a meaningful -- not formal -- reading of the plaint it is manifestly vexatious, and meritless, in the sense of not disclosing a clear right to sue, he should exercise his power under Order VII, Rule 11. C. P. C. taking care to see that the ground mentioned therein is fulfilled. The Penal Code is also resourceful enough to meet such men, (Ch. XI) and must be triggered against them.

Lawyers and litigants known to blatantly misrepresent facts, and get away with impunity, and this results in delays. Section 193, IPC (punishment for perjury and fabrication of false evidence) provides for both imprisonment and fine, and yet, is seldom invoked. most people still get away with inconsistent statements and obvious lies in court, without any consequence at all.

Therefore, can defendant be prevented from making frivolous, Sham, illusory, unreasonable or dishonest defences? The answer is positively yes. I will take the aid of Indian Penal Code 1860.

Whoever tries to manipulate the process of Court, commits the offence of--

1. Section 172 of Indian Penal Code declares that when a Public Servant who is authorized to issue, issues a legal Summon or Notice or Order, against a person and that person absconds or avoids receiving that legal Summon or Notice or Order, commits offence under this section. Primary meaning of the word “absconds” is to hide and when a person is hiding from his place of residence, he is said to be absconding. A Judge is a Public Servant within the meaning of section 21 of Indian Penal Code.
The punishment: for this offence is imprisonment which may extend to one month to six month, or may be with Fine ranging from Rs.500 to Rs.1000 or may be punished both with imprisonment & fine.
Case Law: A person may hide even in his place of residence or away from it and in either case he would be absconding, when he hides himself. K T M S Abdul Kader versus Union Of India 1977 CrLJ 1708.

2. Section 174 of Indian Penal Code declares that When a Public Servant who is authorized to issue, issues a legal Summon or Notice, or Order or Proclamation, to call upon a person to attend in person or through agent, at a particular place and at particular date, and the person in receipt of that legal Summon or Notice, or Order or Proclamation, intentionally / deliberately omits to attend, in person or through agent, that place on that date, commits offence under this section.
The punishment for this offence is imprisonment which may extend to one month to six month, or punishment may be with Fine ranging from Rs.500 to Rs.1000 or may be punished both with imprisonment & fine.

3. Section 181 of Indian Penal Code declares that- when a person, who is under legal obligation, knowingly make any statement, on Oath, or by affirmation, before a Public Servant, statement which he knew that it is false or statement which he believes that it is not true, and when he is bound to state the truth, commits the offence under this section.
The punishment for this offence is imprisonment which may extend to three years, and will also be fined.

4. Section 191 of Indian Penal Code declares that when a person, who is under legal obligation, either on oath or under any provision of law, to state the truth, to declare upon any subject, knowingly makes false statement, the statement which he believes that it is false or he believes that it is not true, commits the offence under this section.
The punishment for this offence is imprisonment which may extend to Seven years, and will also be fined.
Case Law: Offences relating to making false statement in the sworn Affidavits comes within the purview of this section.
Kori Gope versus Manmohan Das, AIR 1928 Pat 161 : 29 CrLJ 111 : 106 IC 703
Ranjit Singh versus State of PEPSU, AIR 1959 SC 843 : 1959 CrLJ 1124
Written statements and applications: A person filing a written statement is bound by law to state the truth and if he makes a statement which is false to his knowledge or belief, or which he believes not to be true, he is guilty of this offence. Mehrban Singh (1884) 6 All 626, Padam Singh, (1930) 52 All 856.

5. Section 196 of Indian Penal Code declares that When a person give or attempt to give any evidence as true or genuine evidence, knowing that the evidence he is giving is false or fabricated, to obstruct in the course of justice, commits the offence under this section.
The punishment for this offence is imprisonment which may extend to Seven years, and will also be fined.

6. Section 199 of Indian Penal Code declares that when a person, voluntarily makes a declaration to a Court or to any public Servant, who are bound to take such declaration as evidence, and the person knowingly makes false statement in such declaration, the statement which he believed it to be false or he believed it to be not true. Also, the false statement so made must touch a point material to the object of such declaration, commits the offence under this section.
The punishment for this offence is imprisonment which may extend to Seven years, and will also be fined.
Case Law: False Affidavit: M S Jaggi 1983 CrLJ 1527 (Ori)
Deputy GM Inter State Bus Terminal versus Smt Sudarshan Kumari, 1997 CrLJ 1931 (SC) : AIR 1997 SC 1902 : 1997 (3) SCC 496 : Gadhi versus Krishnaraja, 2000 CrLJ 1590 (Mad)
Baddu Khan versus Emperor, AIR 1928 All 182 : 29 CrLJ 336

The Plaintiff may request the Court that Defendant should give an express undertaking to the Court that every averment made in the Affidavit of Defence is true and correct, and if it is found during the course of proceedings that the averments made in the Affidavit of Defence are false, the Defendant will be subject to offence of perjury and other offences as contemplated in the Indian Penal Code 1860. The Plaintiff, in order to inspire the confidence of the Court, should also give similar undertaking to the Court.

REASONED ORDER
In Sudeshkumar B. Dhawan v. J.S. Sood & ors. the High Court refused to interfere with the impugned order of conditional leave to defend stating that the District Judge had given cogent reasons and the discretion was not exercised arbitrarily. pg 203 of book

Reasoned Order
Waman Vasudeo versus Pratapmal Dipaji – AIR 1960 Bom 520

Therefore, if a Summary Suit (case) is filed on 1st January 2011 and Summons were take out and say served on the defendant on 10th January 2011, the Defendant has to file his appearance by 20th January 2011. If he files, then, Summons for Judgment are taken and served. If this Summons for Judgment is served upon, say on 31st January, then, the Defendant has to file his Affidavit of Defence within 10th February. On the date of hearing on 10th February, if the Court finds that the Defendant has no substantial defence, then, the Court will pass the decree.

Thus, a Summary Suit filed on 1st January 2011 may be decreed within 45 days from the date of filing.

***** M/s Sunil Enterprises versus SBI Commercial & International bank Ltd.

Sandeep Jalan
Advocate
Mumbai.

The TIME of a Lawyer

2010-12-25T10:12:00.000-08:00

The lawyers, as I have seen in the Bombay High Court, are constrained to spend considerable time in doing not really productive work while waiting for their matters to be called out, and it is customary that many of the matters quite often are not called out, fixed for hearing for the day.

Moreover, there are instances when a single, yes one matter eats away the whole day of the Court and rest of the lawyers glued to the electronic display board, for their case number.

Can we do something whereby lawyers can more effectively put to use the time they are spending in court while waiting for their turn……

Can we do something whereby the lawyers can (a) prepare his/her case, (b) do research work, right in the court room.

Also, can we facilitate a mechanism whereby a lawyer, arguing before His Lordship, and in urgent need of a certain Judgment, or the precise definition of a legal term or pharse, get the same, instantly.

This can be done, if Lawyers can………

(a) SMS Judgment “Municipality of Ratlam versus Vardichand” to AAAAA, and he instantly receive a text of entire judgment.

(b) SMS Case laws on “IPC section 420” to AAAAA, and he instantly receive latest judgments on IPC section 420.

(c) SMS Legal Term “Double Jeopardy” and legal pharases like “to the satisfaction of the authority” to AAAAA, and he receive the meaning of “Double Jeopardy” and “to the satisfaction of the authority ” as propounded by SC & HC.

(d) SMS …………

I hope, AIR, SCC, Gujrat Law Herald etc are listening.

Sandeep Jalan
Advocate
Mumbai.

Case Study: Amalgamation / Merger of a Sort

2010-11-22T06:03:00.000-08:00

To, Date: 25th June 2011
The Hon'ble Chairman,
Appellate Authority for Industrial
and Financial Reconstruction (AAIFR)
Jeevan Prakash Building,
Kasturba Gandhi Marg,
New Delhi – 110001.

Ground for the Letter Appeal

The Order passed by Hon'ble Board (Hereinafter referred to as BIFR) dated 30.09.2010 in the Case No. 08 of 2006 of India Foils Limited, sanctioned the scheme of amalgamation of Sick M/s India Foils Limited, the Transferor Company (Hereinafter referred to as IFL) with M/s Ess Dee Aluminium Limited, the Transferee Company (Hereinafter referred to as EDAL ), is ultra vires the statute (Sick Industrial Companies (Special Provision) Act 1985) [Hereinafter referred to as SIC Act 1985], for, the said Amalgamation is beyond the contemplation of the SIC Act 1985.

There is a “Legal Impossibility” of the Amalgamation of IFL, the Transferor Company with EDAL, the Transferee Company, in the light of section 17(1) read with section 18 of the SIC Act 1985; and Section 18(3)(a) of SIC Act 1985 read with Regulation 30 of BIFR Regulations 1987.

The Hon'ble Chairman of the AAIFR,

(1) I am writing to you, under instructions and on behalf of my Client Mrs Laxmi Girish Jalan, residing at 56 C Amba Jyoti Apartment, flat no.303, near SBI, Trimurti Nagar, Nagpur. The said Client also happens to be my Sister-in-law. Mrs Laxmi Girish Jalan was the shareholder of referred herein the Sick Industrial Company M/s India Foils Ltd, holding 17,300 equity shares. I am annexing herewith the copy to prove the said shareholding, as Ex-A.

(2) The Hon'ble AAIFR may quite object and may even outright reject my this letter appeal but I may kindly be allowed to explain as why I am impressing by way of letter appeal instead of conventionally filing an appeal as provided under section 25 of the SIC Act 1985. It is humbly stated that due to great diffusion of stock, individual / retail shareholders are ill equipped to venture into court litigation because the stakes involved in the litigation is quite small in comparison to time and money involved in the conventional litigations before Court of law. It is very difficult for a retail investor to engage himself in conventional time consuming, procedurally complex and extremely expensive court litigations.

(3) I kindly invite the attention of Hon’ble AAIFR to wordings employed, in their experienced wisdom, by the Parliament of India, in Section 13(1)(a)&(b) of SIC Act 1985. It reads as – Subject to the provisions of this Act, the Board or, as the case may be, the Appellate Authority, shall have powers to regulate – (a) the procedure and conduct of the business; (b) the procedure of the Benches, including the places at which the sittings of the Benches shall be held; (Emphasis supplied).

In my respectful submission, in appropriate cases, it is within the powers of Hon’ble AAIFR, to do complete justice, can take cognizance of letter Appeal, in lieu of conventional appeal, having consideration of two factors – (1) individual/retail shareholders are ill equipped to venture into conventional litigation; (2) Section 13(1)(a)&(b) of SIC Act 1985 empowers the Hon’ble AAIFR to adapt such procedure so as to do complete justice.

Therefore, I humbly request the Hon'ble AAIFR to look into the submissions made herein in respect to illegality involved in the sanctioned scheme of amalgamation and humbly request the Hon'ble AAIFR to dwell upon the issues raised in this appeal letter. The Hon’ble AAIFR may in its wisdom may not “Stay” the order passed by the Hon’ble BIFR, until it reaches the conclusion that the said Order of BIFR is illegal per se. I take the responsibility of informing the EDAL about this letter Appeal and they will have all the opportunity to have their say in the case.

(4) It may also be informed to the Hon'ble AAIFR that it is not that we have suddenly woken up after a gap of nearly nine months since the passing of order by Hon’ble BIFR dated 30.09.2010. During these last nine months, we have recorded letters to –
SEBI, dated – 22-11-2010, 27-11-2010, 26-02-2011
BIFR, dated 21-03-2011
India Foils Ltd dated 21-03-2011
Regional Directors, Eastern Region, dated 21-03-2011
Ministry of Corporate Affairs, dated 21-03-2011.

The SEBI, vide its letter dated 29-12-2010, forwarded our complaint to Hon’ble BIFR and requested the Hon’ble BIFR to examine the said complaint. The Regional Directors and Ministry of Corporate Affairs have advised us to adopt appropriate proceedings by way of Appeal as provided under the SIC Act. Similarly, the Hon’ble BIFR, vide its letter dated 10-05-2011, advised us to adopt appropriate proceedings by way of Appeal as provided under the SIC Act. The EDAL, vide their letter dated 04-03-2011, replied to our letter, but of no avail.

(5) With the leave of the Hon’ble AAIFR, I present the brief facts of the case –

(a) India Foils Limited (IFL), was incorporated on 8th November 1960. IFL was engaged in the business of designing, developing manufacturing, producing, processing, distributing, selling and dealing in foils and foil products of all kind, including smelting, semi fabricating casting, drawing, cutting, rolling, extruding, forging, fabrication, and manufacturing aluminium and other metals and alloys, including buying, selling exporting, importing and dealing in metals and minerals of all kinds and materials and goods made from the.

IFL, a part of British Aluminium Group, set up converting facilities with printing and lamination in 1962. In 1981, in a global arrangement, Alcan took over British Aluminium and IFL became part of Alcan Group. Williamson Magor Group, promoted by Mr. B M Khaitan, acquired management control of IFL in 1982, In 2000, the Vedanta Group, through its group company, viz the Madras Aluminium took over the management control of the company from Williamson Magor Group.

However, the Net worth of India Foils completely eroded as per financial results as at 31-03-2005, and thus Board of Directors of IFL filed a reference under section 15(1) of SIC Act 1985. The said Reference was registered as Case No.08/2006.

(b) On 19-05-2006, IFL has informed the Bombay Stock Exchange that the Company has been registered as Sick Company with The Board for Industrial and Financial Reconstruction under Case No.08/2006 and after hearing, the Bench of BIFR was satisfied that the Company fulfilled the various criteria for sickness under the ACT and have become a sick industrial company in terms of section 3(1)(o) of the Act and accordingly declared it to be sick company. The Bench of BIFR has further appointed ICICI as the Operating Agency (OA) with directions to prepare a viability study report and revival scheme for Company.

(c) On 20-11-2008, IFL has informed the Bombay Stock Exchange that: "In terms of the rehabilitation scheme sanctioned by Hon'ble BIFR dated August 18,2008 (Hereinafter Sanctioned Schemes is referred to as SS-08), the Board of Directors of IFL in their meeting held on November 19, 2008, has altered its Authorized Equity Share Capital by splitting the un-issued equity shares of Rs.10/- each into equity shares of Re.1/-each.

(i) Pursuant to Scheme mentioned herein above, the Board of Directors have issued and allotted the following equity and equity linked instruments. 13,60,00,000 equity shares of face value Rs.1/- each fully paid up to EDAL and 1250000, 0.01% optionally convertible redeemable non-cumulative preference shares of face value Rs.100/- each fully paid up to Sterlite Industries (India) Limited, an affiliate of Madras Aluminium Company Limited.

(ii) Further the Board has also issued and allotted 13953423, 0.01% redeemable non-cumulative non-convertible preference shares of face value Rs.100/- each fully paid up and 9628115, 0.01% redeemable non-cumulative non-convertible preference shares of face value Rs.100/- each fully paid up to Sterlite Industries (India) Limited and EDAL respectively.

(iii) With the issue of above shares, EDAL has become the majority stakeholder in IFL and thereby it has became the subsidiary of EDAL. As on 31.03.2009 EDAL were holding about 89.45 shareholding of IFL.

(d) Among other things in the said sanctioned scheme by Hon’ble BIFR, EDAL acquired about 90% of shares of IFL and thus acquired the complete management control over the IFL. Thus, the ownership of IFL, by virtue of said sanctioned scheme of Hon’ble BIFR, “changed hands” from Vedanta Group Company, viz Madras Aluminium to EDAL.

(e) It was submitted on behalf of EDAL that many of the provisions of SS-08 have been implemented by IFL’s new management. However due to number of factors, it was submitted that IFL was not in a position to achieve the profitability projections on its own and thus IFL, the said Sick industrial Company proposes to merge itself with EDAL.

(f) The Hon'ble BIFR, in the exercise of its powers under section 18(5) read with 19(3), vide its Order dated 30.09.2010, inter alia, sanctioned and approved the merger of IFL, the Transferor Company EDAL, the Transferee Company, in terms of the modified Rehabilitation Scheme. I am annexing herewith the copy to BIFR order dated 30-09-2010 as Ex-B.

(6) I now take leave to state the relevant provisions of law:

(a) The SIC Act 1985 is a unique piece of legislation passed by the Parliament of India with a view to securing timely detection of Sick Industrial undertakings and speedy determination through preventive, ameliorative, remedial and other measures which need to be taken with respect to such Industrial undertakings. The pith and substance of the Act is contained in section 18, 19, 20 and 22 of the Act.

The Board, i.e. BIFR, constituted under section 4 of the Act 1985, is the heart and soul of the Act. The principal role of BIFR is essentially to formulate measures for reconstruction, revival and rehabilitation of Sick industrial undertakings.

The powers conferred under the Act upon the BIFR are vast and they have thus large potential for doing harm as well as doing good and therefore it is necessary that these powers should be exercised with great care and circumspection.

The very object of SIC Act 1985 is to bring, “out of sickness” the ailing industrial company, by administering measures contemplated under the Act, more particularly laid down in section 18.

(b) The Role of BIFR or Board comes into play once a reference is made to it or a information is received by it under section 15 of the SIC Act 1985.

(c) Section 16 contemplates, among other things, Inquiry into the working of the Sick Industrial Company by the Board. When a reference is made to a Board, the Board makes such inquiry to determine whether the referred Industrial Company has really become a Sick Industrial Company within the meaning of this Act of 1985.

(d) Section 16(4) stipulates the appointment of a Special Director by the Board. This sub section 4 of section 16 is pressed into by the Parliament to safeguard the interest of the Company from the likely ill-doings of the present management, the incompetent management / Board of Directors who have made the Company Sick and were forced to refer the Company to the Board. According to information available, Shri K. Raghuraman was appointed as the Special Director under Section 16(4) of the SIC Act, 1985 on the Board of IFL.

(e) The journey towards amalgamation, (the amalgamation being one of the measure contemplated under section 18 of the SIC Act 1985), begins from section 17 and section 18(3) and BIFR Regulation 30 forms the critical junction to any such proposed measure of amalgamation.

(f) Section 17 outlines the Powers of the BIFR or Board to make suitable order on the completion of the inquiry. The section says- after making an inquiry under section 16, if the BIFR or Board is satisfied that the referred Company has become the Sick Industrial Company within the meaning of this Act of 1985, then, after taking into consideration all relevant facts and circumstances of the referred Sick Industrial Company, the BIFR or Board proceeds to decide whether or not the said Sick Industrial Company can make its net worth exceed the accumulated losses within a reasonable time.

(g) Here the section 17 makes it obligatory on the part of BIFR or Board to take into consideration all relevant facts and circumstances of the referred sick industrial company before reaching to the decision as whether the said Sick Industrial Company can make its net worth exceed the accumulated losses within a reasonable time.

(h) When the BIFR or Board considers all relevant facts & existing circumstances of the referred Sick Industrial company and decides that the said Sick Industrial company cannot make its net worth exceed the accumulated losses within a reasonable time, it may undertake to adopt all or any measures specified in section 18 of the SIC Act 1985. Briefly stated they are –
(a) Financial reconstruction of the Sick Company;
(b) Its proper management through a management change or management takeover;
(c) Its amalgamation with another company or vice versa;
(d) Sale or lease of its undertaking;
(da) Rationalisation of its staff;
(e) Any other preventive or remedial measures; and
(f) Incidental or consequential measures.

(i) The BIFR apparently has wide ranging powers to decide on the contents of the scheme, nevertheless, the scope of section 18 seems to be limited to such acts, deeds or things as are necessary to make the Sick Company viable. That is to say, the BIFR may not exercise any power of discretion which is not necessary.

(j) While section 18 of the SIC Act 1985 contains provisions dealing with preparation and sanction of schemes, the precise modality for this purpose has not been specified there. This is understandable as the intention seems to be to allow the BIFR wide freedom of action in this regard. There is however, little doubt that in exercising this freedom, BIFR has to act on the basis of well settled principles. These are essential jurisdictional parameters of the Board and beyond these it cannot and need not travel.

(k) It is a moot point as to whether, at the time of passing an order under section 17(3) and laying down the guidelines for the operating agency to follow, it is obvious to say that the BIFR in selecting any of the measures referred to in clauses (a) to (f) of section 18(1), shall adopt the least drastic alternative.

(l) Section 18(2) provides the measures which may be undertaken under the “scheme” contemplated under section 18(1) of the SIC Act 1985.

(m) Section 18(3)(a) provides for circulation of the draft scheme to Sick company, operating agency, to transferee company (if amalgamation is contemplated) and any other company concerned in the proposed amalgamation. It is implicit in the very nature of powers conferred under section 17 & 18 of the Act that the rules of natural justice must be complied with. Section 18(3)(a) embodies the principle of natural justice.

(n) As far as procedure for preparation and sanction of the scheme under section 18 is concerned, Regulation 27 to 33 are also extremely relevant. Among other things, they provide for inviting suggestions and objections from the shareholders, creditors and employees of the Industrial Company and where there is an amalgamation, also from the transferee company.

(o) Regulation 30 contemplates the consideration by the Board / BIFR of the suggestions and objections that it may receive from the Sick Industrial Company or from the Transferee company or from the Operating Agency or from any other company concerned, in the proposed scheme of amalgamation.

(7) Application of law to facts of the present case-

(a) I say that there is “Legal Impossibility” of the Amalgamation of M/s India Foils Limited (IFL Transferor Company) with M/s Ess Dee Aluminium Limited (EDAL Transferee Company) as provided vide BIFR Order dated 30.09.2010, in the light of section 17(1) read with section 18 of the SIC Act 1985; and Section 18(3)(a) of SIC Act 1985 read with Regulation 30 of BIFR Regulations 1987

(b) Before I advance argument in support of my above contention, I crave leave of Hon’ble AAIFR to allow my submissions in respect of sanctioned scheme of Hon’ble BIFR dated 18-08-2006. I say that the Sanctioned Scheme of BIFR dated 18-08-2006 was itself illegal, ultra vires the statute and was passed by Hon’ble BIFR beyond its mandate prescribed under section 18 of the SIC Act.

(c) In the said sanctioned scheme dated 18-08-2008, by Hon’ble BIFR, EDAL acquired about 90% of shares of IFL and thus acquired the complete management control over the IFL. Thus, the ownership of IFL, by virtue of said sanctioned scheme of Hon’ble BIFR, “changed hands” from Vedanta Group company Madras Aluminium to M/s Ess Dee Aluminium Ltd (EDAL).

(d) According to Section 18 of the Act, among other things, the proposed scheme may provide for financial reconstruction, change or appointment of new Board of Directors etc. While looking at, all the provisions of section 18 of SIC Act 1985, it is nowhere provided that the ownership of the Sick Industrial Company can be changed, save, by way of Amalgamation.

(e) I call upon the EDAL and OA to show a legal provision in the SIC Act 1985 which allows “change in ownership of a Sick company, other than by way of amalgamation.

(f) Nevertheless, the Hon’ble BIFR, travelled beyond its mandate, due to misunderstanding of law, but in their wisdom, and in the best interest of the Sick Industrial Company IFL, in the pretence of financial reconstruction of the Sick Industrial Company IFL, sanctioned a scheme which allowed the change in the ownership of IFL.

(g) The Hon’ble BIFR handed over the management of Sick IFL to a very strong and financially sound Company EDAL, which is managed by highly qualified and experienced individuals, and by virtue of said sanctioned scheme, the same highly qualified and experienced individual Board of Directors, will also manage the affairs of the Sick IFL.

(h) However, it is again submitted that change in ownership of Sick Industrial Company can only be effected by way of “measure of Amalgamation”, but the Hon’ble BIFR, by way of “financial reconstruction” may have allowed the change in ownership of Sick IFL, in the best interest of IFL. Nevertheless, the illegality remains that the Hon’ble BIFR sanctioned a scheme which it cannot lawfully sanction.

(i) Now I come to the element of illegality which exists in the Hon’ble BIFR order dated 30-09-2010. I have two sets of argument to say that the said sanctioned scheme of amalgamation was illegal.

(j) My first argument is that the said Amalgamation was absolutely unwarranted and there was no “Cause of action” for the Hon’ble BIFR to exercise its jurisdiction; and my second argument is that the scheme of SIC Act 1985 does not contemplate the nature of amalgamation effected between Sick IFL and EDAL and the said Amalgamation, in particularly frustrate the mandate of Section 18(3)(a) of the SIC Act 1985 and Regulation 30 of BIFR Regulations 1987.

(k) To prove my first argument, I respectfully take the Hon’ble AAIFR to Para 15.1 of the Modified Rehabilitation Scheme (page number 26),

15.1 – Merger of IFL with EDAL

JUSTIFICATION OF MERGER

(a) Operational synergy – Both the companies relate to the aluminium foil / foil packaging industry. Therefore merger of the two companies would result in integration of operations, enhanced capacity utilization of the existing facilities and an increase in the installed capacity in the future year of operation. This would result in realizing the economies of scale of the merged company and would improve its profitability and cash flows.

(b) Locational synergy – EDAL has strong presence in the Pan India. Merging of IFL with EDAL will strengthen its presence in Eastern part of the country.

(c) Financial Assistance to IFL – IFL is currently in BIFR and is incurring losses on an on-going basis. The Company is unable to adequately meet requirement of funds for incurring the required capital expenditure and its working capital requirements. On the other hand, EDAL has sound financial background, commands credit in the market for its operations and has the capability to raise and invest the funds as may be required for meeting the requirements of IFL towards capital expenditure, working capital and other financial requirements.

(d) Administrative Cost savings – Merger of two companies (IFL and EDAL) will result in saving in administrative cost.

(e) Sharing of experience and expertise of Strong Management Team of EDAL – EDAL has a strong and experienced management team. After the merger of IFL with EDAL, the Management of IFL shall benefit from the expertise and experience of strong ,management team, which the EDAL is having.

(f) Merger of IFL with EDAL shall also enable the latter to get benefit of brought forward income-tax losses of IFL and the resultant savings can be used for revival of IFL.

(l) In construing the Modified Rehabilitation Scheme as a whole, the principal reason / justification put forwarded to justify Amalgamation of Sick IFL with EDAL was that the IFL was unable to adequately meet requirement of funds for its capital expenditure and meeting its working capital needs and that EDAL has sound financial background, commands credit in the market and has the capability to raise and invest funds as may be required for meeting the requirements of IFL towards capital expenditure and working capital requirements.

(m) I take the Hon’ble AAIFR to Para 15.2 of the Modified Rehabilitation Scheme – which reads as: 15.2 Infusion of fresh funds by EDAL – EDAL is a financially strong company. It will be able to make the necessary investments or arrange for funds as may be required by IFL to meet its requirements of funds in future. Therefore, it may be noted that it is the own case of the Hon’ble BIFR that EDAL will be able to make the necessary investments or arrange for funds as may be required by IFL to meet its requirements of funds in future.
(n) In this respect, I can safely argue that the Board of Directors of a Company are the most important people of the Company. I say that a corporation is an artificial being, exists only in contemplation of law and it acts through living persons. And thus Directors comes into the picture. They are professional man hired by company to direct its affairs. The Board of Directors are recognized as a principal organ of the company. Moreover, as observed in Justice NEVILLE in Bath versus Standard Land Co., “the Board of Directors are the only brain of the company and the company can and does act only through them. In fact they are the people who are the driving force behind the success or failure of the Company. They are the people who make the Company Sick and take the Company to BIFR. The success or failure of a company entirely depends on the competence and integrity of its directors.

(o) Thus, when the Hon’ble BIFR sanctioned the scheme of rehabilitation on 18-08-2008, caused the change in the ownership of Sick IFL and handed over the overall management of Sick IFL to a very strong and financially sound Company EDAL, which is managed by highly qualified and experienced individuals, presupposes that EDAL will adequately take care of requirement of funds of Sick IFL for its capital expenditure and its working capital needs.

(p) I say that when the overall management of IFL vests in highly qualified and experienced Board of Directors EDAL, it is well within the wisdom and competence of present IFL management to raise the required funds needed towards capital expenditure and working capital needs. No “measure of amalgamation” was warranted to therefore.

(q) A reason / justification was also put forwarded that by this merger, the Management of IFL shall benefit from the expertise and experience of strong management team, which the EDAL is having. I say that when the overall management of IFL already vests in highly qualified and experienced Board of Directors of EDAL, IFL already has the benefit from the expertise and experience of strong management team, which the EDAL is having. No “measure of amalgamation” was warranted to therefore.

(r) Some other reasons / justifications were also put forwarded, like benefit of operational synergy, locational synergy, savings of administrative cost, savings due to taking forward the income tax losses of IFL. The above reasons were founded on the premise that the proposed amalgamation will benefit both the transferor and transferee Companies.

It is interesting to observe that –
By virtue of amalgamation, the EDAL will get the benefit of “brought forward income-tax losses of IFL and the resultant savings can be used for revival of IFL”.
The operational synergy would result in realizing the economies of scale of the merged company, (EDAL) and would improve its (EDAL) profitability and cash flows.

(s) I, in my limited wisdom, say that the Hon’ble BIFR, by the “measure of amalgamation” of “Sick industrial company” with “any other Company”, is not concerned with the benefit that will accrue to “any other Company”. The “any other Company” will adequately take care of its own interest. The Hon’ble BIFR should concern itself with the “Welfare” of the Sick Industrial Company; and the grounds on which a “measure of amalgamation” is contemplated to revive the Sick company must substantially, though may not be exclusively, benefit the Sick Industrial Company.

(t) The justification of “benefit of savings in administrative cost” is quite insignificant to warrant the amalgamation of companies.

(u) I further say that when any reasons / factors applied to justify the sanctioned scheme of amalgamation, presupposes the non existence of said reasons / factors, for if they exist there is no need for amalgamation. If the said reasons/ factors were already existing before amalgamation, it can safely be argued that the sick industrial company does not need the dose of “any measure” as contemplated under the SIC Act.

(v) I further say that the reasons / factors which justify the scheme of amalgamation are specific medicine which needs to be administered, failing which the said Sick industrial Company may have the danger of collapsing into aggravated sickness. If the “to be administered medicinal elements” already exists in the person of the Sick industrial Company, we should not inject which already exist.

(w) In the instant case of amalgamation of Sick IFL with EDAL, the main and principal grounds on which the Amalgamation was founded was to raise the funds for the Sick IFL, which the EDAL could easily do it. I say that, it is well within the competence of EDAL to quite easily raise funds for IFL even if there is no amalgamation, for IFL is already under the financially sound and strong management and in control of highly qualified and experienced Board of Directors of EDAL.

(x) I, now, take the Hon’ble AAIFR to Para 19. Viability of the Modified Rehabilitation Scheme (page 43), which reads as – The rehabilitation strategy envisages relief and concessions from the Central and State Govts. Financial projections of the company as per the rehabilitation scheme are enclosed herewith. A merger of IFL with the company will enable the revival of the units of IFL, while giving sufficient liquidity to shareholders of IFL and adequate security to the Bankers. Upon merger, the accumulated losses of IFL will be wiped out. Thus, the Modified Rehabilitation Scheme is considered to be technically feasible and economically viable.

(y) I say that the above proposition sound quite attractive, but it is not so. Upon merger, when the IFL itself will be wiped out, where is the question of its accumulated losses standing alone. I say that, had there been a scheme wherein the accumulated losses of IFL have been wiped out, and IFL is still in existence, the scheme could have been said to be “worthwhile”. Moreover, as claimed that the said scheme of amalgamation will give liquidity to shareholders of IFL, does the Hon’ble BIFR suggesting that there was no liquidity to IFL shareholders pre-merger ? It is not so, and IFL shareholders had the liquidity pre-merger as well.

(z) I say that, the net result of above discussion is that the grounds on which the scheme of amalgamation was founded, were no grounds to warrant the measure of amalgamation and there was no “Cause of action” for the Hon’ble BIFR to assume and exercise its jurisdiction by sanctioning the scheme of amalgamation.

(za) Now I advance my argument in support of my second argument that the scheme of SIC Act 1985 does not contemplate the nature of amalgamation effected between Sick IFL and EDAL, and in particularly frustrate the mandate of Section 18(3)(a) of the SIC act 1985 and Regulation 30 of BIFR Regulations 1987.

(zb) It is my grand argument that a measure stipulated under Section 18(1)(c) contemplates a new management for the sick industrial company. Amalgamation under section 18(1)(c) of SIC Act 1985 presupposes the change of Management. The words in the statute “any other company” contemplates other company, a different management.

(zc) And, therefore, it is imperative to understand how this section 18(1)(c) has evolved.
(i) Section 18(1)(c) comes in the backdrop of section 17(3). Section 17(3) is the off-shoot of section 17(1).
(ii) Section 17(1) speaks about consideration of all relevant facts and circumstances by the Board before adopting the course of measures contemplated under section 18.

(zd) Thus, it can safely be submitted that all measures sought to be undertaken by the BIFR or Board under section 18 is based on its consideration under section 17(1) of relevant facts and circumstances of the case.

(ze) To illustrate this--
(i) I say that, when the BIFR or Board under section 17(1) considers “all relevant facts and circumstances” of the Sick Industrial company, can we take a pause to ponder for a while as what could be the relevant facts & circumstances which the Board may be considering to reach to the decision that the said Sick Industrial company can or cannot make its net worth exceed the accumulated losses within a reasonable time.

(ii) In this respect, I repeat that the Board of Directors of a Company are the most important people of the Company. I say that a corporation is an artificial being, exists only in contemplation of law and it acts through living persons. And thus Directors comes into the picture. They are professional man hired by company to direct its affairs. The Board of Directors are recognized as a principal organ of the company. Moreover, as observed in Justice NEVILLE in Bath versus Standard Land Co., “the Board of Directors are the only brain of the company and the company can and does act only through them. In fact they are the people who are the driving force behind the success or failure of the Company. They are the people who make the Company Sick and take the Company to BIFR. The success or failure of a company entirely depends on the competence and integrity of its directors.

(iii) Again, I can safely argue that-- “Who are the persons in the Board of Directors of a sick industrial Company” is the principal & paramount fact of consideration of the BIFR or Board in reaching to the decision that whether the said Sick Industrial company can or cannot make its net worth exceed the accumulated losses within a reasonable time.

(iv) Therefore, when the Board decides that the said Sick Industrial company cannot make its net worth exceed the accumulated losses within a reasonable time, it actively takes into account the competence of the present Board of Directors of the sick industrial company.

(zf) If for a moment, it is presumed that section 18(1)(c) can be invoked for the amalgamation of companies which are run by the same management, then we reach to this absurd proposition, i.e. --“The BIFR or Board, on the date of the passing of the Order of amalgamation, having duly considered the competence of management of the sick industrial company as on that date, and comes to the conclusion that the said Sick Industrial company cannot make its net worth exceed the accumulated losses within a reasonable time and therefore passes the Order that the sick industrial company, under section 18(1)(c) should be amalgamated with another company. The Management of that another company will be the same management of that sick industrial company.”

(zg) Now, I invite the attention of the Board to Regulation 30 of BIFR Regulations 1987. In the scheme of things in Amalgamation provided and contemplated u/s 18 of the Act, a very valuable, intelligent and purposeful provision is designed in our law books to protect the interest of the Sick Industrial Company. Regulation 30 of the BIFR Regulations 1987 provides that the Sick Industrial Company may raise objections to the scheme of amalgamation, if the Sick Industrial Company views that the scheme of Amalgamation is not in the interest of the Company. The Regulation 30 of the of BIFR Regulations 1987 contemplates the consideration by the Board / BIFR of the suggestions and objections that it may receive from the Sick Industrial Company or from the Transferee company or from the Operating Agency or from any other company concerned in the proposed amalgamation. Regulation 31 envisage approval by the shareholders of the transferee company.

Attention is also invited to similar provision contained in section 18(3)(a) which provides that, among other things, that any scheme of rehabilitation shall be sent to Sick industrial company and the Hon’ble BIFR will consider the suggestions and objections, if any received from the Sick industrial company.

(zh) In the present case, whilst the shareholders EDAL approves the amalgamation / merger scheme, the rights of the India Foils Ltd to object the scheme of amalgamation becomes redundant / meaningless because the majority stake of IFL is owned by transferee company i.e. EDAL, for, the same company cannot assent and object to the proposed scheme of amalgamation, inasmuch, as when the transferee company EDAL gives assent to the scheme of amalgamation, there is an automatic assent of the Sick industrial company IFL to the proposed amalgamation scheme, for majority stake of Sick Industrial company IFL is being held by the transferee company EDAL.

(zi) Now I respectfully take the Hon’ble AAAIFR to some of the clauses of SCHEME OF MERGER between Sick IFL and EDAL (page 45 onwards)

SCHEME OF MERGER
PART I – GENERAL
1.3 The Transferor Company and the Transferee Company have proposed merger of the Transferor Company with the Transferee Company to facilitate the revival of the business of the Transferor Company.

8.6 The Transferor Company shall be dissolved without being wound up. The Board of Directors (or any Committee thereof) of the Transferor Company shall without any further act, instrument or deed be and stand dissolved and the shares of the Transferor Company shall be deemed to have been cancelled and delisted from the BSE, the NSE and the Calcutta Stock Exchange.

PART VI – GENERAL TERMS AND CONDITIONS

12. The Transferor Company, without the prior consent of the Board of Directors of the Transferee Company, shall not be entitled to restructure capital or declare and pay dividends, whether interim or final, to their shareholders in respect of the accounting period after the Appointed date and prior to the Effective date.

14. The Transferee Company and the Transferor Company shall make necessary application before BIFR for the sanction of this Scheme under the provisions of SICA.

15. The Transferor Company and the Transferee Company through their respective Board of Directors or a Committee thereof in their full and absolute discretion may at any time assent on behalf of all persons concerned to any modification(s) or amendment(s) to the scheme which the BIFR, shareholders of Transferee Company and/or any other competent authority or person, may deem fit to approve/impose; and/or effect any other modification or amendment which the Boards of Transferor Company or Transferee Company may consider necessary or desirable and give such directions as they may consider necessary or desirable.

20. The Transferor Company (by its Directors) and the Transferee Company (by its Directors) may assent to any modification(s) or amendment(s) in this scheme which the BIFR, or any other authorities may deem fit to direct or impose or which may otherwise be considered necessary or desirable…..

(zj) I say that all the clauses above contemplates proposal of merger by respective Board of Directors of Transferor and Transferee Company, contemplates serious prejudice to the transferor company post merger, contemplates consent of the respective Board of Directors of Transferor and Transferee Company, contemplates assent or modification to the scheme of amalgamation by the respective Board of Directors of Transferor and Transferee Company. If the amalgamating companies are run by the same Board of Directors, then all these contemplation becomes meaningless. There will be prima facie conflict of interest of Board of Directors of Transferee Company who also happens to manage the affairs of Transferor Company.

(zk) It must be remembered that the rehabilitation scheme ("Scheme") sanctioned by Hon'ble BIFR or Board dated August 18, 2008 wherein, among other things, Ess Dee Aluminium has become the majority stakeholder in the India Foils Limited and thereby the India Foils Limited has became the subsidiary of Ess Dee Aluminium Limited". At present, India Foils is already under the active management of Ess Dee Aluminium Limited.

(zl) And, therefore, it can be safely argued that measure contemplated under section 18(1)(c) of Amalgamation pre-supposes two entirely distinct entities, being run by different management and they should not be standing in the nature of Holding and subsidiary company.

(zm) Thus, it is my case and argument that under the provisions and mandate of SIC Act 1985, the scheme for amalgamation contemplated u/s 18 presupposes amalgamation of two distinct corporate entities which have distinct management.

(8) Legal Expectation: Two PRINCIPAL issues emerge in this Appeal at hand for this Hon'ble AAIFR to dwell upon:

(A) The issue of law: Whether the scheme of SIC Act 1985 allows a rehabilitation scheme which causes change in ownership of a Sick company without the aid of amalgamation.

(B) The mixed issue of fact and law: (i) Whether sanctioned scheme of Hon’ble BIFR dated 30-09-2010 frustrates Section 18(3)(a) of the SIC Act 1985 and Regulation 30 of BIFR Regulation 1987; and (ii) whether there exists a “Cause of action” for the Hon’ble BIFR to exercise its jurisdiction and sanctioned amalgamation scheme.

In this background, I humbly request the Hon’ble AAIFR to, in the exercise of powers vested to it under the SIC Act 1985, in all seriousness, look into the matter of this amalgamation / Merger.

(9) I submit that my Client has a very good case on law point and serious prejudice will occasion to my Client and to many other shareholders of India Foils Limited. Moreover, by allowing this Amalgamation, a wrong precedent has set in, which may encourage such illegal mergers in future.

(10) I again submit that due to great diffusion of stock, individual shareholders are ill equipped to venture into Court litigation because the stakes involved in the litigation is quite small in comparison to time and money involved in the conventional litigations before Court of law.

(11) Prayers:
(1) The Hon’ble AAIFR may call for all records of the above case from the Hon’ble BIFR;
(2) The Hon’ble AAIFR to decide the two issues that have been framed hereinbefore.
Thanking you.
With Regards,

Encl: Ex-A referred in Para 1; and Ex-B referred in Para 5(f)
Copy to: EDAL.

Protecting the “Less Stronger” from “Extremely Legal” agreements.

2010-10-12T21:20:00.000-07:00

This blog specifically seeks to deal with property Agreements that are ordinarily executed between Developers, the Landlord, the Tenant and the members of the Co-operative Housing Societies.

This blog originated when one of my dear friend Kamal Ladia approached me for studying the Re-development (proposed) agreement that was given to him by the Developer. I said-yaar I am not aware of complex development & property laws. Kamal has already took opinion from one his friend who is a Developer.

Kamal pointed out to me some hidden technical legal meaning, quite different from plain meaning, of one clause in that proposed agreement, and I found myself in utter surprise.

And I thought if one goes by the plain meaning of the clause, he will certainly be cheated. It is impossible to understand the technical legal meaning of that clause unless the man or a lawyer is well versed with those specific laws.

And I thus advised my friend as this-

Set-up your mind what specifically and broadly you seek from the Developer. Consult with your Solicitor/Advocate to know what you are entitled to under the law.

Once this is done, record a brief and very to the point “Letter of Offer” to the Developer thru your Solicitor / Advocate. This letter must state in very clear / categorical / unambiguous terms and language what you want from the Developer. The terms may be in the form of Option 1, Option 2 and so on. This letter shall call upon the Developer to prepare the final Agreement in the context and backdrop of this “Letter of Offer”. This "Letter of Offer" may also be referred to as "Instrument of fundamental / core terms".

This “Letter of Offer” must be produced / manifested in verbatim in the final agreement.

The final agreement must specifically mention that this Agreement is made in pursuant to the “Letter of Offer”. The said Agreement shall also state as what Option, i.e. whether Option 1 or Option 2, the Developer has agreed to. If there is any negotiations with regard to Options, the same may be finalized and a fresh “Letter of Offer” may be prepared, without any options.

The final Agreement shall state that Parties to the Agreement have expressly agreed that all terms and conditions or any Clause of this Agreement which is found to be inconsistent or frustrating or varying or diluting the terms of “Option” so agreed in “Letter of Offer”, expressly or by necessary implication, shall be deemed to have been infected / suffering from / with “undue influence” or misrepresentation or both and not accepted by the Tenant notwithstanding he subscribe his signature to this final Agreement and the Agreement shall be voidable at the option of the tenant.

There must be a clause in the final Agreement to the effect that while interpreting the terms of this Agreement, if there appears to be conflicting meaning between the terms of the “Option” in the Letter of Offer and terms of this final Agreement, the terms of the Option shall prevail over the terms of agreement.

The terms of the “Option” in Letter of Offer” shall demise only in one situation and that is, if any of the term of the “Option” in “Letter of Offer” is held by competent authority to be manifestly / expressly going against the laws of the land and in that scene the Developer is at liberty not bind by that term.

The efficacy of this approach is uncertain to me and the learned people who routinely deals in these kind of agreements can only offer their views on the same. And I humbly request for the same.

Sandeep Jalan (advocate)
Mumbai.

Being “Accused” !! ….is pre-mature character assassination of a Citizen of India.

2010-09-26T04:25:00.000-07:00

THE SECOND SCHEDULE (See section 476)reads as--

FORM NO. 1
Summons to an Accused Person (See section 61)

To ……………………………….. (name of accused ) of…………………………… (address)

WHEREAS your attendance is necessary to answer to a charge of ………………………. (state shortly by the offence charged ), you are here by required to appear in person (or by pleader ,as the case may be) before the (Magistrate) of……………… on the……………… day of ……………………….herein fail not.

Dated, this …………….day of……… 20……………..
(Signature)
(Seal of court)

This blog is outcome of usual discussion with my former dear colleague Sameer Pendse on a fabricated case of registering FIR by Police, a normal & convenient misuse of legal machinery by influential in Partnership with Police. In fact, Mr. Pendse & my former Senior Shri Talasikar have happened to had conference with very learned Advocate Zal Andhyarijuna on this case wherein this issue surfaced.

In the backdrop of mutiny of 1857, the Crown of England took over the administration in India and upon full consideration of the premise of 1857, the VICTORIA of the United Kingdom of Great Britain and Ireland, enacted that it should be lawful for Her Majesty, under the Great Seal of the United Kingdom to establish, for them, their heirs and successors, The Criminal Procedure Code 1861, now The Criminal Procedure Code, 1973. We all know, the Code of Criminal Procedure contains the procedural aspect of administration of Criminal cases in the Court of law.

The Code of 1861 contemplated the branding of a Citizen as “Accused” when a complaint is made against him either before the Police or before the Court of law. The Code of 1973 continued this tradition of branding.

However, the prescription of “accused” against a complaint was the command of Queen Victoria of England to which Indians are no longer obliged to follow from 15th August 1947 by reason of India, i.e. Bharat being acquiring status of Sovereign Nation.

In my view, the dignity of Citizenship comes inherent with Sovereignty of nations. Branding a Citizen as accused, at the instance of allegation of committing an act designated as punishable offence, is the continued celebration of suppression of citizenship in the province of Sovereign (Independent) nation.

In my view, by such branding, the character assassination of a Citizen is inevitable and you frustrate Citizen’s supreme right of dignity fashioned & fastened in Article 21 of constitution of India.

May I also subscribe my view that in Indian setting where criminal trials takes years to conclude; the Society looks at the “accused” with suspicion thereby easily endangering his livelihood. The character of citizens cannot be and should not be jeopardized in such casual manner.

He (a Citizen) is certainly a accused at the moment when Court of Competent jurisdiction, based on the meritous facts of the case, takes cognizance and ventured to frame charges against the Citizen, but he (a Citizen) cannot be summoned as accused before this framing of charges. Can't we provide that the person be made as "Respondent" till the charges are framed against him ?

And the moot question that may be argued ... does “branding accused” really brings in any disrepute to the bearer ? It must be answered by a innocent- being accused of committing an offence.

Sandeep Jalan (advocate)
Mumbai.

whether Octroi can be demanded on “Re-usable Empty glass bottles” on the premise that filled glass bottles were imported into municipal limits ?

2010-09-25T04:21:00.001-07:00

A Less interesting Case took nearly two hours of Bombay High Court (dated 24.09.2010) and the Division Bench at Court No.2 presided by Smt.Justice Ranjana Desai and Mr Justice R.V. More were constrained to observe and say to the arguing Counsel-- So should we discharge rest of the Board for the day ?

The facts leading to the filing of above cases by Hindustan Coca Cola (5510 of 2010) & PepsiCo India (5867 of 2010) are few and simple. Sangli Municipal Corporation issued Notice / Bills of Octroi to be paid on Re-usable Empty Glass Bottles of Beverages to above parties. It is the case of Sangli Municipal Corporation that above parties have imported within municipal limits, say about 100 filled Soft drink Glass bottles and therefore, they are liable to pay Octroi on 100 Re-usable Empty glass bottles.

And Parties, instead of making due representations before the Sangli Municipal Commissioner, preferred, though rightly, a Writ, challenging the notices / Bills. Interim relief were granted to parties and Municipal authorities were directed not to take any action till further order of this Hon'ble Court.

The Sangli Municipal Corporation were heavily relying on Judgment of Hon'ble SC in M/s Acqueous Victuals Pvt. Ltd. v. State of U.P. and Others, JT 1998 14 SC 195. Although the facts of the case in this case were quite different that from present case at hand, the above judgment, among other things, stated that Parties may claim refund of Octroi after paying the same and also that principles of Sales Tax and Excise cannot be applied in cases of Octroi.

The Counsels of PepsiCo (Sr.Advocate Janak Dwarkadas & Learned Advocate Rajeev Talasikar) were also in fact relying on above SC Judgment and also one unreported Judgment of SC in S.M. Ram Lal & Co. v. Secy. to Govt. of Punjab and were of the view that in the light of interpretation of relevant words "consumption, use or sale”, no liability to pay Octroi accrues.

The Counsels of Coca Cola (Learned Advocate Madhur Baya & the team of Economic Law Practice) were vehemently arguing that in fact they have already paid Octroi on the Glass Bottle, as they are already paying Octroi on the filled Bottles.

In a way, both Counsels were absolutely correct in their views. But in my humble view, learned Counsels there have failed to appreciate the spirit of Octroi Taxation. And, also, they have failed to appreciate that the Judgment on which Sangli Municipal Corporation were heavily relying upon is in fact in their favour.

The Hon'ble SC in M/s Acqueous Victuals Pvt. Ltd. v. State of U.P. and Others observed in para 21 of the Judgment that principles of Sales tax cannot be applied in Octroi. The Hon'ble Apex Court is very right when it says that principles of imposing Octroi cannot be equated with other taxing statutes. Let me try to illustrate this principle.

Every goods that is manufactured is subject to Excise duty, but the same goods is not subject to Octroi unless that goods is transported to another municipal limit. The short point I am making is that -- “A goods is not subject to Octroi unless it knocks the doors of a Municipal limit expressing its desire to enter into its limits, for consumption, sale or use." Therefore, a goods manufactured is certainly going to be Excised but that goods may or may not attract Octroi. Both taxes operate on different principles.

The sweeping spirit of Octroi Tax is that it becomes payable when the goods are imported within any municipal limit for the purposes of consumption, sale or use; In the present case, it is no case of the Municipality to say that the Parties have brought in Empty Bottles within the municipal limits; and therefore, when Octroi is demanded on empty bottles & empty crates, the taxing municipal authorities must be told to produce documents which show that the person has imported within that municipal limits empty bottles & empty crates.
It is a settled position of law that Taxing statutes are to be strictly construed and logic has little role to play and the persons’ liability to pay 'a tax' must be strictly brought within the four corners of the charging section. I take leave to repeat—“It is the case of Sangli Municipal Corporation that above parties have imported within municipal limits, say about 100 filled Soft drink Glass bottles and therefore, they are liable to pay Octroi on 100 Re-usable Empty glass bottles.”

In the last, I take liberty to take you to the observation of Justice CHINNAPPA REDDY in McDowell & Co Ltd versus Commercial Tax Officer (1985) 3 SCC 230-- “..... In our view, the proper way to construe a taxing statute, while considering a device to avoid tax, is not to ask whether the provision should be construed literally or liberally, nor whether the transaction is not unreal and not prohibited by the Statute, but whether the transaction is a device to avoid tax.”. In the above cases of Hindustan Coca Cola & PepsiCo India, it is not the case of Sangli Municipal Corporation that they are evading to pay Octroi duty.

Therefore, the essential question (though not raised by Parties therein) before the Hon'ble Court is-- whether Octroi can be demanded on “Re-usable Empty glass bottles” on the premise that filled glass bottles were imported into municipal limits ?
Anyway, the case is reserved for Judgment. Let’s wait anxiously.

I have apprised Advocates of both parties to consider this proposition of law and they may consider to move appropriate Application before Bombay High Court in this regard.

Sandeep Jalan
(advocate)
Mumbai.

Unfolding "Commercial Purposes" as contemplated under the scheme of Consumer Protection Act of 1986.

2010-09-09T21:58:00.000-07:00

This blog is originated in the felt need to educate myself as what transactions constitutes “Commercial purposes” within the meaning of Consumer Protection (CP)Act of 1986.

Section 2(1)(d) of CP Act 1986 stipulates who is a consumer within the meaning of this Act. Following all ingredients must be satisfied to show one is a Consumer of goods services within the meaning of this Act to qualify as a Complainant-

(1) that he is a person, natural or body corporate;
(2) that person buys any goods / services for a consideration or at price;
(3) that person may have paid, or promised to pay, or have partly paid and partly promised for that purchased goods / services;
(4) He is also a consumer who consumes the goods / services purchased above, with the consent of the original buyer;
(5) The goods / services purchased must not be for reselling it;
(6) The goods / services purchased must not be purchased in the regular course of his/ her commercial or business activity.

Therefore, Consumer is a person who buys any goods or avail any service at a price calculable in money terms or otherwise, including the one who uses that bought goods or service with the permission of that former buyer, but he is not a consumer, who though buys any goods or avail any service at a price, not for his consumption but for reselling it or buying it for commercial ends.

The act makes a solitary exception wherein it stipulates that he is still a consumer within the meaning of this Act who buys any goods or service for reselling it, but only if he is running a small business in which he himself only is employed.

Thus, this Act of 1986 plainly disallows a transaction of “Commercial purposes” to be agitated before Consumer Courts. A Similar word “Commercial transaction” which ordinarily imports the alike meaning, seems to be confused with the same as “Commercial purposes”. In my considered view, both terms are not same, inasmuch as, Commercial transaction is a much wider term and Commercial purposes is relatively a term of limited import.

A transaction would fall within the scope of “Commercial purposes” if the transaction is closely & inherently linked to the nature of business activity being carried out by the person alleging defect / deficiency in any goods or services.

The nature of goods or services consumed though may aid in the commercial / business venture but goods or services so consumed must be clearly independent of the nature of commercial / business venture to be exempted from purview of “Commercial purposes.

Like a company buying raw material for making finished goods is not a Consumer within the meaning of Consumer Protection Act of 1986.

However, a Company will be a consumer wherein if it buys office machineries life fax, printers & air conditioners because the company although 'consumes' that fax, printers & air conditioners, but they are purchased not for resale and although fax, printers aid in its commercial activity but their commercial activity has nothing to do with the consumption of that fax, printers & air conditioners.

The more illustrative example can be this one. A commercial venture engaged in Xeroxing business (Let me tell you that Xeroxing is a big business, if you have otherwise opinion) purchased one xerox machine, is not a consumer within the meaning of this Act, for the xerox machine purchased and nature of business activity being carried out are closely merged to each other. Similarly, a commercial venture engaged in some other business activity happens to purchase one xerox machine for office purposes, is a consumer within the meaning of this Act, for his nature of commercial activity being carried out is distinct from nature of goods / services consumed. At the same time, a man purchasing a xerox machine for earning his livelihood, is still a consumer within the meaning of this Act of 1986.

Thus, in every case of Complaint before Consumer Court, the test thus to identify a transaction whether suffering from “Commercial purposes” would be-
(1) to objectively observe the nature of business activity being carried out by the Complainant; and
(2) then to see the transaction which is alleged as defect / deficiency in any goods/ services.
(3) If nature of business activity being carried out is independent of the nature of transaction alleged, then, in my view, the transaction is not suffering from “Commercial purposes” although the transaction may have all attributes of Commerce.

The fact that legislature chooses its word very carefully cannot be lose sight of.

And arises another equally controversial issue that keep crops up time and again and I take leave to address it with my limited knowledge. First let me reproduce the relevant portion that needs to be expounded and unfolded here.

Explanation to the definition of Consumer as contained in section 2(1)(d).--
For the purposes of sub-clause (i), "commercial purpose" does not include use by a consumer of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment;

Coming to the controversial issue – Who is that man who fits in the shoes of “....earning his livelihood, by means of self-employment”.

There are two terms here - “livelihood and Self employment” that needs to be understood in the literal sense of the common man. I have to turn the pages of Oxford & if necessary other authoritative dictionary to find out the literal meaning of these two terms.

Oxford Dictionary says – Self Employment is -- working for oneself as a freelance or the owner of a business rather than for an employer; and Livelihood is -- A means of securing the necessities of life.

Therefore, in my view, a Complainant alleging any defect or deficiency in any goods or services and claiming benefit of this Explanation part must satisfy two conditions:
(1) He must be carrying on some occupation or business venture; and
(2) By that occupation or business venture he merely able to manage the basic necessities of life.

The wisdom of our Parliamentarians in inserting this Explanation can never be lose sight of, and it is to protect a small man whose life and livelihood otherwise may be jeopardized by reason of defective goods / services he has purchased in the regular course of his occupation / business venture. That small man cannot be told to agitate his grievances before extremely procedurally complex, time consuming and expensive contemporary litigation in our traditional courts.

Sandeep Jalan
Advocate
Mumbai.

Judges May Please take Attention

2010-06-27T09:37:00.000-07:00

BECAUSE Corrupt & Criminals hardly care what the law is... they but certainly looks at Law Courts & Learned Judges... and then they decide….. to proceed.

sandeep jalan(advocate)
mumbai.

Man Mohan Singh, the Macaulay of Modern India

2010-06-11T06:18:00.000-07:00

First, may I briefly state who is a Macaulay.

Lord Macaulay (Thomas Babington Macaulay) was born on October 25, 1800, and died on December 28, 1859. He was a member of the Supreme Council of India. William Bentinck was the then Governor General. He returned to England early 1838, and resumed his writing career there. Macaulay was destined to impact the lives of millions of Indians forever.

AN EXCERPT FROM LORD MACAULAY'S ADDRESS TO THE BRITISH PARLIAMENT, 2 FEBRUARY, 1835

"I have travelled across the length and breadth of India and I have not seen one person who is a beggar, who is a thief, such wealth I have seen in this country, such high moral values, people of such calibre, that I do not think we would ever conquer this country, unless we break the very backbone of this nation, which is her spiritual and cultural heritage, and ,

therefore, I propose that we replace her old and ancient education system, her culture, for if the Indians think that all that is foreign and English is good and greater than their own, they will lose their selfesteem, their native culture and they will become what we want them, a truly dominated nation."

Now, the readers may please cut and paste below pagelink.
http://www.livemint.com/2010/06/10232013/Divorce-law-changes-reflect-ur.html

sandeep Jalan(advocate)
Mumbai.

POST SCRIPT:

HANDS OF AMERICA IN THIS ?

Your past Student features in "Is the Nation in a Coma"

2010-06-09T09:47:00.000-07:00

Date: 9th June, 2010.
To,
The University of cambridge
The Nuffield College
The University of Oxford, U.K.
The University of Bologna, Italy
The University of Alberta, Edmonton, Canada

Dear Sir/ Madam,

I am a Indian inhabitant, resident of Mumbai, Maharashtra State. I am an advocate.

I have read one article published in The Hindu BusinessLine, one of the highly respected daily, in India, for its fearless journalism & reporting, the copy of which is attached. It says something about Mr Man Mohan Singh, who is our Prime Minister, to whom you have in the past, have conferred some degree, based on his excellence.

You are humbly requested to consider, in the light of this article, if it is possible, to take back the degrees you have so conferred on him.

Thanking you,

Sandeep Jalan (advocate)
Janhit Manch, Kuber Bhuvan, Bajaj Road, Vile Parle West, Mumbai- 400056.

Copy to:
Mr Man Mohan Singh
Prime Minister Office,
Raisina Hills,
South Block,
New Delhi -110011.

URL http://www.thehindubusinessline.com/2010/05/31/stories/2010053150300900.htm

Is the nation in a coma?

Europeans believe that Indian leaders are too blinded by new wealth and deceit to comprehend that the day will come when the have-nots will hit the streets.

BY Mohan Murti (The author is former Europe Director, CII, and lives in Cologne, Germany)

A few days ago I was in a panel discussion on mergers and acquisitions in Frankfurt, Germany, organised by Euroforum and The Handelsblatt, one of the most prestigious newspapers in German-speaking Europe.

The other panellists were senior officials of two of the largest carmakers and two top insurance companies — all German multinationals operating in India.

The panel discussion was moderated by a professor from the esteemed European Business School. The hall had an audience that exceeded a hundred well-known European CEOs. I was the only Indian.

After the panel discussion, the floor was open for questions. That was when my “moment of truth” turned into an hour of shame, embarrassment — when the participants fired questions and made remarks on their experiences with the evil of corruption in India.

The awkwardness and humiliation I went through reminded of The Moment of Truth, the popular Anglo-American game. The more questions I answered truthfully, the more the questions get tougher. Tougher here means more embarrassing.
European disquiet

Questions ranged from “Is your nation in a coma?”, the corruption in judiciary, the possible impeachment of a judge, the 2G scam and to the money parked illegally in tax havens.

It is a fact that the problem of corruption in India has assumed enormous and embarrassing proportions in recent years, although it has been with us for decades.

The questions and the debate that followed in the panel discussion was indicative of the European disquiet. At the end of the Q&A session, I surmised Europeans perceive India to be at one of those junctures where tripping over the precipice cannot be ruled out.

Let me substantiate this further with what the European media has to say in recent days.

In a popular prime-time television discussion in Germany, the panellist, a member of the German Parliament quoting a blog said: “If all the scams of the last five years are added up, they are likely to rival and exceed the British colonial loot of India of about a trillion dollars.”

Banana Republic

One German business daily which wrote an editorial on India said: “India is becoming a Banana Republic instead of being an economic superpower. To get the cut motion designated out, assurances are made to political allays. Special treatment is promised at the expense of the people. So, Ms Mayawati who is Chief Minister of the most densely inhabited state, is calmed when an intelligence agency probe is scrapped. The multi-million dollars fodder scam by another former chief minister wielding enormous power is put in cold storage. Prime Minister Manmohan Singh chairs over this kind of unparalleled loot.”

An article in a French newspaper titled “Playing the Game, Indian Style” wrote: “Investigations into the shadowy financial deals of the Indian cricket league have revealed a web of transactions across tax havens like Switzerland, the Virgin Islands, Mauritius and Cyprus.” In the same article, the name of one Hassan Ali of Pune is mentioned as operating with his wife a one-billion-dollar illegal Swiss account with “sanction of the Indian regime”.

A third story narrated in the damaging article is that of the former chief minister of Jharkhand, Madhu Koda, who was reported to have funds in various tax havens that were partly used to buy mines in Liberia. “Unfortunately, the Indian public do not know the status of that enquiry,” the article concluded.

“In the nastiest business scam in Indian records (Satyam) the government adroitly covered up the political aspects of the swindle — predominantly involving real estate,” wrote an Austrian newspaper. “If the Indian Prime Minister knows nothing about these scandals, he is ignorant of ground realities and does not deserve to be Prime Minister. If he does, is he a collaborator in crime?”

The Telegraph of the UK reported the 2G scam saying: “Naturally, India's elephantine legal system will ensure culpability, is delayed.”

Blinded by wealth

This seems true. In the European mind, caricature of a typical Indian encompasses qualities of falsification, telling lies, being fraudulent, dishonest, corrupt, arrogant, boastful, speaking loudly and bothering others in public places or, while traveling, swindling when the slightest of opportunity arises and spreading rumours about others. The list is truly incessant.

My father, who is 81 years old, is utterly frustrated, shocked and disgruntled with whatever is happening and said in a recent discussion that our country's motto should truly be Asatyameva Jayete.

Europeans believe that Indian leaders in politics and business are so blissfully blinded by the new, sometimes ill-gotten, wealth and deceit that they are living in defiance, insolence and denial to comprehend that the day will come, sooner than later, when the have-nots would hit the streets.

In a way, it seems to have already started with the monstrous and grotesque acts of the Maoists. And, when that rot occurs, not one political turncoat will escape being lynched.

The drumbeats for these rebellions are going to get louder and louder as our leaders refuse to listen to the voices of the people. Eventually, it will lead to a revolution that will spill to streets across the whole of India, I fear.

Perhaps we are the architects of our own misfortune. It is our sab chalta hai (everything goes) attitude that has allowed people to mislead us with impunity. No wonder Aesop said. “We hang the petty thieves and appoint the great ones to high office.”

( blfeedback@thehindu.co.in.)

HOW JUDGES DECIDE CASES (may be)

2010-06-05T23:40:00.000-07:00

This blog is originated in the felt need to educate myself about court litigations. Also, let me tell you at once that this is my premature adventure to write on a subject to which I am taking baby steps and I know I have to travel the earth, walking. And, therefore, I will keep improving this blog while posting my brushing experience. But I am sure, this blog will not the pass the test of umpteen genuine criticisms. Also, in this limited essay, it is impossible to introduce here numerous provisions applicable during the course of any litigation.

In this adventure, the readers, for the limited purpose of reading this mail, has to commit a bonafide temporary mistake to suppose that I am playing a Judge in this script. Now As a Judge- Before I tell you how we decide cases, I will tell you little about Justice and courts.

There were ancient times immemorial when there were no laws to govern and so were no governments & courts and man of victim were settling scores by themselves. But since now when we are a land governed by rules, laws and Judicial pronouncements and scheme of giving Justice by law courts is introduced for enforcement of these rules, laws and Judicial pronouncements, in cases they alleged to have been disregarded.

Let me tell you the whole scheme of Justice in its most common meaning implies the giving of every man his legal dues and the installation of Law Courts are meant for giving that legal due, to the man who comes to the Court with “clean hands”. A aggrieved's act of seeking courts' intervention, in fact, is an appeal to the judicial conscience of the sitting judge, to do that - which all prudent man will do, in the facts of the case.

Let me tell you that in every complaint filed in the court of law, it is suffice if one merely seeks the bare observance of the letter of the law and the spirit inherent in the letter of the law because NOW we live in a society governed by Laws, rules & judicial pronouncements.

Let me tell you that we are quite conscious that fortune of time, money and wisdom is invested in enacting laws democratically and this whole exercise is passionately thrown overboard at the mere fascination of an irresponsible man when knowingly acting in clear breach of that law established democratically.

Let me also tell you that we know well the fascination of public Officials’ to established laws; and their conscious decision to harass common man which is the main cause of people’s indulgence in expensive and avoidable litigation; and that our government is known to be a huge contributor to delays, in matters where it is a party – at various stages – from evading notices, replying to notices and replying without application of mind, unnecessarily appealing even when the laws are clearly in favour of the other side, etc.

Now coming to main issue, let me tell you how we decide Writ cases. Let me tell you that whenever a case comes before the Court, Judges in their occupational wisdom, look at the relevant applicable law & facts of the case, interprete the law if required, settle the correct position of law, apply these settled laws to the facts of the case and thus the parties get their dues in the matrix of facts of the case & settled position of law.

It is always satisfying to see that a case is founded on law points or on equity, or else, let me tell you that case is vulnerable to fall flat. Letter of the law and principles of equity are our writ voice and it is in the national interest if we remain prisoners of statute laws and do not travel beyond letter and intent inherent in language of the law. Let me tell you that we can immediately judge the fairness of case if we slightly come across material inconsistency or untenable averments made in the petition.

I will also share a secret. Success of litigation depends upon the satisfaction of the presiding Judge. Wait a moment...... satisfaction means satisfaction by the averments and crisp arguments advanced, written and verbal founded on law applicable to the facts of the case.

The very first thing we see that if the Petitioner has reasonably satisfied us that we have jurisdiction to decide the case in hand and we can give authoritative orders/ directions to the opposite parties in the case. Then we see if the Petitioner has satisfied us that he has locus to file this case.

Then we satisfy ourselves to the crisp synopsis so made by the Petitioner which quickly gives us the gist of whole case.

After acquainting with gist of the case, we satisfy us as whether applicable laws & sections of statutes are neatly & separately presented for its application with gist of the case to which now we are acquainted with. Let me tell you that we are also very anxious to formulate the principal issue involved in the dispute at hand and the correct position of law as decided in earlier cases on similar issue.

Although the Advocates seems to be laboriously researching & preparing a water tight case, but sometimes, many irrelevancies and quite repetitions creeps in. We would say, there should be economy of words in every pleading.

It is quite satisfying to see if the principal issue i.e. main area of controversy, if there is any, between the Petitioner & the Respondent State is brought to our notice in the beginning of the case, before narrating the looong facts of the case.

If it is satisfied to us that synopsis of the case reveals the violation of right or disclose failure of duty of “State” in the light of the letter of the law, the Petitioner has to satisfy us that he has annexed documentary evidences in support of his submissions and he is not making just aerial allegation against the Respondent State without substantiating his averments. Let me tell you that his case may collapse like structure of playing cards in the absence of clear evidences to support his submissions.
If there are clear evidences annexed to support his submissions, then we move to patiently hear the Respondent State to the case.

After patiently hearing their submissions and their annexed evidences, we verify the submissions & evidences furnished by the Petitioner. There may be certain things which the Petitioner has not disclosed. We have to see, if these non disclosures have fatal bearing on his case or if those non disclosures are not so important to the final outcome of the case.

Whereas it is seen that advocates and Senior Counsels and even petitioner in persons of PILs vehemently put forth the wholesome illegality of the opposite party, in particularly of the mass abuse of powers by ministers & commissioners and thus they feel that they are naturally entitled to seek relief from us. Let me tell you we know well all this abuse of powers. However, this sometimes irritates us and seems exaggerated to us, though they may be very right.

Also, we think, one should avoid being Judgmental in his pleading. The proper analysis of illegal acts alleged and deducing of consequences flowing from the alleged illegal act should reflect in the pleading, to cause alarm & to prejudice the minds of judges against your litigant. Like for example: Instead of alleging that Mr x has played fraud on the court, his alleged act may be deduced to demonstrate alarm. Instead of alleging gross violation of principles of natural justice, his alleged act constituting the allegation may be deduced, employing some exaggeration.

It is enough if we are patiently told to look into the letter of the law that is applicable in the case at hand, and also brought to our notice the correct position of law as decided in earlier instances by HC & SC, and we are neatly told the conduct of the opposite party and then we may be told to satisfy if the conduct of the opposite party is according to the law established? Let us we be not told directly to pass orders. We are Lordship, you know.

Let me again tell you that we quietly follows the points that advocates are making and can asses their worth; and it is better if we are told succinctly the Law holding the land as on today and the reality holding the land as on today.

Also it is seen that parties seek lot of reliefs and prayers from us. Let me tell you that we are law courts and we are here to interprete the law and settle the correct position of law as it stands in the statute books. And in the light of settled position of law, if the alleging party becomes entitled to the reliefs, he gets it. The relief he gets comes in the wake of settled position of law when applied to his facts of the case.

Dear people, a lethal weapon in hand tempts its owner to use it even unjustly and wantonly and so is the case with possession of undefined discretionary powers we have. But let me also tell you that we are incapable of denying legal dues to anyone who comes to us because we discharge our duties in open public forum; and in the public eye it is sometimes very difficult to abuse powers, especially when one brings forth a clear cut case for adjudication. It all depends on the lawyer who presents the case. Let me tell you that he is quite capable of preventing us from abuse of our undefined discretionary powers. Let me also tell you that urge for justice must emerge from victims because otherwise lawyers seem to be quite busy.

We often feel irritated when advocates ask for immediate reliefs and they don’t care for our satisfaction and our views on it. Let me again remind that we are Lordship. Instead they should pose a question to us.

The Petitioner, in heavy Constitutional matters, may consider, in their Written arguments (final arguments) saying this below in the following fashion:

"The Petitioner is extremely conscious that satisfaction of this Hon’ble Court is prerequisite for success of his litigation and therefore says and submits that-

1. While taking into account the submissions of Petitioners as contained in points .., the Hon’ble Court is prayed to satisfy itself, recording their valued reasoning in its Judgment / order, that if this Hon’ble Court has had the Jurisdiction as to case at hand and if the Petitioners has had the locus to file the case at hand.

2. While taking into account the facts of the case & position of law, the Hon’ble Court is prayed to satisfy itself, recording their valued reasoning in its Judgment / order that if the “principal allegations made by the Petitioners”, as outlined in the points… against the Respondent State appears genuine & correct.

3. The Hon’ble Court is prayed to record in its Judgment / order, the scope & ambit of ‘these’ legal terms & phrases, which forms part of the statute laws and other applicable legal incidents in this case.

4. While taking into account the submissions of Petitioners as contained in points .., the Hon’ble Court is prayed to record in its Judgment / order if the Petitioner has reasonably satisfied this Hon’ble Court about the due compliance of various ingredients / components of applicable section of law at hand, which brings home, either the right of the Petitioners or the guilt of the Respondent State.

5. While taking into account the submissions of Petitioners as contained in points .., the Hon’ble Court is prayed to satisfy itself, recording their valued reasoning in its Judgment / order whether facts of the case & supporting evidences indicates the infringement of rights of the Petitioners, in the light of the position of law.

6. While taking into account the submissions of Petitioners as contained in points .., the Hon’ble Court is prayed to satisfy itself, recording their valued reasoning in its Judgment / order that if conduct of the opposite parties, in the matrix of facts of the case & settled position of law, indicates the frustration of enacted laws / indicates the failure of duties enjoined by law on them.

7. XXXXXXX

8. YYYYYYY"

Let me tell you that Justice dispensation appear much easy compared to other professions and occupations, save criminal trials & “Basic Structure Doctrine cases”, and yet giving of Justice has become a complication of simple things, for all mercies of law are cornered to defend wholesome illegalities, however beautifully crafted our colonial laws are.

Let me finally tell you that there is no guarantee of Justice even if above path is religiously followed, do remember our lethal weapon. And if you aspire to restrict the use of our this lethal weapon, tell your government to do one thing- and they will not do it, is-

(1) Let all court proceedings be video recorded;
=============================================
Now coming back to my original spirit..
Sandeep Jalan
(Advocate)
Mumbai- 400057.

How to deal with illegal Orders / Notices of Indian Public authorities

2010-05-28T23:33:00.001-07:00

This blog originated in the felt need to ponder where it is found that Indian Public authorities are fascinated to interprete laws to their convenience and logic and issue notices as they deem fit, completely devoid of spirit of the enacted laws.

In modern democracies, wide powers vest with Legislators, Judges, with Govt, and with Bureaucrats. Each group, if it so wishes, may act quite fancy, in any or all the ways thus far specified hereinafter. Nevertheless, the authorities in charge may be disproportionately rude if you happen to be in even irrelevant shortcoming. The Scent of power is immense.

The Public Servants / Officials were deemed heard, saying, in the words of learned Professor Upendra Baxi-

(1)As an Authority of Public Power, I have this and that power. I exercise it in this or that manner because I so wish. The only good reason which I exercise my power this or that manner is that I wish to exercise it in this or that manner;
(2) As an Authority of Public Power- I may so act as to favour some and disfavour others;
(3) As an Authority of Public Power- I may so act as to give an impression that I am acting within my powers but in reality I may be acting outside it;
(4) As an Authority of Public Power- I may decide by myself what your rights and liabilities are without giving you any chance to be heard, Or I may make your opportunity to be heard a meaningless ritual;
(5) As an Authority of Public Power- I may decide but declines to let you know the reasons or grounds of my decisions or provide reasons without being reasonable;
(6) As an Authority of Public Power- I may use my power to help you only if I am gratified in cash or in kind;
(7) As an Authority of Public Power- I may choose to use my power only after a good deal of delay and inconvenience to people;
(8) As an Authority of Public Power- I may just refuse to exercise the powers I have regardless of my legal obligation to act and regardless of social impact of my inaction.

Also, I am given to understand that, all Writs that are filed before High Courts’, 70% of it constitutes the illegal notices that are challenged, so issued by army of public authorities in India, in the pretence of their implied and undefined discretionary powers.

The Supreme Court of India in Nawabkhan Abbaskhan v State of Gujrat allows every person the discretion to make his own decision and disobey the order of the government, if in his opinion, it is illegal. Of course he is answerable and liable, if he turns out to be wrong. (1974) 2 SCC 121; AIR 1974SC 1471.

This is how the above proposition came to establish in our land--
(1) An externment order was passed against one person. He refused to obey that order.

(2) He was prosecuted under section 142 of the Bombay Police Act 1951 because he had violated the externment order passed by the Police commissioner.

(3) He was acquitted by lower court.

(4) The State went into appeal to High court. The accused challenged the validity of the externment order itself. The High court posed a question to itself- “Whether a person can disobey the order with impunity which he thinks is illegal although the order subsequently may have been quashed for being illegal”.

(5) This is what High court said- “There is no principle in upholding the Respondent's (accused) claim that he has a right to violate an order passed by an authority having jurisdiction to pass it, although subsequently he can persuade the court that there was an inbuilt lacuna or latent defect in the said order. In other words he claims to have a right to judge for himself whether it is legal or illegal and in anticipation of court upholding his contention, the right to violate it with impunity.”

(6) The accused went into appeal to Supreme Court. The Supreme Court reversed the order of the High court and said- “The individual decision making by private persons of public actions may be considered as a very radical approach. Grave consequences are involved in allowing discretion to disobey, someone may argue, may first lead to anarchy and then to tyranny. But what is the remedy available to a person who has been subjected to an illegal order. Our legal system does not recognize the right to compensation for damage suffered by a person in obeying an invalid order.

Thus the Supreme Court allows every person the discretion to make his own decision and disobey the order of the government, if in his opinion, it is illegal order. Of course he is answerable and liable, if he turns out to be wrong.

However, today any talk about discretion to disobey may sound seditious. In India where judicial process grinds dead slow and grievance procedures are feeble and inefficient, perhaps the discretion to disobey may provide an effective check on the operation of the government machinery in a reckless manner.

There can be many different legitimate ways of dealing with served illegal Orders/ Notices. In my limited knowledge as on today, there can be two ways to deal with those illegal Orders / Notices.

ONE- The one who is served a Order / Notice, which he thinks as patently illegal, should in the first place, make a suitable Written representation before that issuing authority. If the authority refuses to relent / listen, then, should file a Writ Petition in the High Court concerned under Article 226, not for quashing of that Order / Notice, but for directing the public authority concerned to pass appropriate speaking Order on the basis of Written representation made to that authority. The Orders passed by Public authorities, generally termed as administrative Orders, though are not judicial Orders, yet, the Public authorities are bound to listen to the affected persons where it seeks to interfere with the rights of the persons / or when Orders / Notices entails “Civil consequenes” and they are bound to assign reasons for their decisions.

TWO- The one who is served a Order / Notice, which he thinks as patently illegal, should file a Writ Petition in the High Court concerned under Article 226, asking the Hon'ble Court to dwell upon the limited issue of interpretation of that law, in the exercise of which the illegal Order / Notice was issued and asking the Hon'ble Court to settle the position of law, so that all litigation in respect of that law, that may arise in future, may be avoided. And once the Court ventures to settle the position of law, you win. The relief you get of quashing of that impugned notice is consequent and automatic of that settling of that law. Therefore, it is quite important to frame appropriate question of law that may be posed before the presiding Judge to dwell upon and adjudicate thus.

It is not desirable to seek directly the quashing of order, in my view. There can be two reasons for not directly asking this Relief before the Hon'ble Court. One- the High Court may refuse to exercise its extra-ordinary jurisdiction under Writ, and may in certain cases, say, you have alternate remedy and remedy under Writ is yet to crystallize. Second- it is quite likely, I feel that, unless the Petitioner specifically ask the Hon’ble Court to decide the question of law involved, the Hon'ble High Court may venture to refuse to give you any relief, even without dwelling upon the letter & spirit of law under scrutiny.

There is, I think, fundamental difference between asking the High Court to quash the illegal notice or asking the High Court to settle the position of law. The High Court may refuse to exercise its jurisdiction in the former case, but it cannot refuse to exercise its jurisdiction in the latter, for it is the prerogative of the High Court to settle the law.

And I tell you, in Writ cases, in my strong view, if you succeed in satisfying the Court about jurisdiction, you have won half the battle.

Sandeep Jalan
(advocate)
Mumbai- 400057.

Is Preventive detention-- a proviso to tenets of criminal jurisprudence, a fiction of law..

2010-05-19T20:30:00.000-07:00

(1) In criminal jurisprudence, the thumb rule is that, a man may be detained, of course by following the due process of law, if he is accused of having committed an act which is labelled as offence punishable with fine or imprisonment or both. It obviously follows that although a man has some evil intention to commit an illegal act, but he cannot be accused of having committed illegal act as long as the evil act remains in his mind.

(2) Article 22 of Constitution of India deals with preventive detention of persons. This article consists of two parts. Clauses (1) & (2) apply to persons arrested under a law otherwise than a preventive detention law. Clauses (4) to (7) apply to persons detained under preventive detention law.

(3) The clauses (4) to (7) in essence state that a person detained must be told the grounds of hid detention although the authority may not disclose such facts which in their opinion would be prejudicial to pubic interest if disclosed; One cannot be detained for more than three months unless the advisory board in its opinion so advice to extend detention beyond three months; and Parliament by law to provide for law relating to preventive detention and provide for circumstances under which preventive detention can be done and maximum period for which one can be detained under preventive detention.

(4) And thus it seems very clear that the preventive detention presupposes the existence of some intelligence gathering, in possession of State govt, apprehending imminent & grave terror attack or alike danger to communal harmony of the society or alike circumstances, and on the basis of that intelligence gathering, they may detain a man, although he has yet to commit any offence, but idea is to prevent him to commit that most likely terror attack or alike act.

(5) Whereas the detention is for to prevent that imminent collapsing danger, it is obviously presume that State authority will do its best to diffuse that eventuality within least possible time, and as soon as that imminent danger is attended with, the detainee may be released or his detention may be continued depending upon his role in the ‘event’. But then if his detention is extended even after that imminent danger comes to end, his detention cannot be said to be under preventive detention.

(6) Certainly period of three months is quite sufficient to attend any imminent danger. The State authority pleading for extension of preventive detention should substantially show to the court that they are doing night & day to prevent that imminent danger which is the cause of preventive detention.

(7) Also, a cry was overheard from the family of the bread earner detainee-- “you take my life when you take away the means whereby I live.”

(8) In equity & in principle, when State seek to encroach upon liberty of a person in the larger public interest, the larger public reciprocate by shouldering the burden of the safety and well being of the detainee’s family; and the State authority while acting on in the interest of the larger public, shoulders the burden of safety & well being of the detainee’s family, till the time of preventive detention.

(9) However, presently the State is not shouldering the burden of giving any safety net to the detainee's family.

Sandeep Jalan (advocate)
Janhit Manch, Kuber Bhuvan, Bajaj Road, Vile Parle West, Mumbai- 400056.

Transfer of Sovereignity as a consequence of Social Contract.

2010-04-20T03:16:00.000-07:00

1. Citizens’ Charter in Jan Lokpal recognizes the “Right of Reply” and seeks an effective mechanism for redressal of Citizens’ complaints. The roots of proposed Citizens’ Charter can be traced to earliest period of human civilization. The essay is long, but may still deserves a full reading.

2. This essay seeks to unearth the deep roots of proposed Citizens’ Charter, the essential attributes of Citizens’ charter and historical relationship between State & Citizens; and general apathy of modern Indian State to deal with citizens’ complaints to them; also to engineer an effective answer to deal with this deep menace of unreplied complaints, till the Jan Lokpal Act comes into existence.

3. It is my case that satisfactory replies to complaints are not of some importance but of fundamental importance in State – Citizen relationship. And therefore, it is necessary to trace the evolution and development of law, the emergence of concept of democracy, and trace the origin of today's concept of Citizens & the State.

4. At the advent of Human Civilization, ‘Men’ were Sovereign in their own, in the sense that, they were free and were not subject to or bound by any law. Then, men were Ruled by their own conscience and not by codified laws and were even free to the extent of inflicting violence at their will & strength, i.e. Might is right was the scene. Men were guided by own conscience and greed. An action not emanating from reason and the freedom to do as one pleases.

Great Philosopher Thomas Hobbes (1588- 1671) says that prior to concept of Statehood, the man lived in chaotic conditions of constant fear. The life in the state of nature was solitary, poor nasty, brutish and short.

For getting self protection and avoiding misery and pain, man voluntarily entered into a contract and surrendered their part of freedom to some might authority, who could protect their lives and property, which emerged later on as the ruler and which ultimately culminated into the shape of the State.
With the great passage of time and centuries together, codified laws evolved and were introduced in human life. Men came together, they voluntarily surrendered their individual sovereignty to State sovereignty, and opted to subject themselves to laws of the land, however, they were promised, in return, the governance by codified laws. The governance by codified laws purported to promise the safety of their life & their property and also sought to guarantee the general dignity inherent in human person alonwith guarantee that he will not be discriminated. This is how the ancient Social contract between Men & State came into being.

The conception of democracy is a sentiment which desires the well being of all men.

Laws were made so that the stronger might not in all things have his way. A law is something which must have a moral basis, so that there is a inner compelling force for every citizen to obey. The law is reason free from passion. Law is Summing up in legislative form of the moral judgment that the community has already reached.

Among various definitions of State given by Scholars of law and by Philosophers, this appears hereinafter to be more satisfactory and convincing. It is by professor Goodhart. He defines State in terms of its purpose. He states that the purpose of society which we call a State is to maintain peace and order within a demarcated territory. THE MINIMUM AND ESSENTIAL PURPOSE OF THE STATE IS TO MAKE LIFE POSSIBLE.

A Sovereign State is one which is subordinate to no one and is supreme over the territory under its control. The word State connotes all three organs, namely- The Legislature, The Executive Government and The Judiciary.

Then Scholars of Law and Philosophers laid down the need for codification of laws, they stated what law is and in fact what should be the law. They generously advocated for codification of laws. They also outlined the ideals of good State.

Thomas Acqinas (1225-1274) He defined law as Ordinance of reason for the common good made by him who has the care of the community.

Hugo Grotius (1583-1645) is regarded as the father of philosophical jurisprudence. He said- it is the first duty of the Sovereign State to safeguard the citizen because State was given power only for that purpose.

Immanuel Kant (1724- 1804) pointed out that law to be acceptable to people should have within it an element of justness.

Jeremy Bentham (1748-1832) heralded a new era in the history of legal thought in England. He is considered to be the founder of positivism (codification of laws). He advocated that the law should be made exclusively by legislation which was suppose to remove inroads upon individual's freedom and provide him opportunities for development of the self. The proper end of every law is the promotion of the greatest happiness of the greatest number of people. According to Bentham, the task of governments is to promote, in general, the happiness in the society.

John Austin (1790-1859)- according to him, a law in its most comprehensive signification, is a rule laid down for the guidance of an intelligent being by an intelligent being having power over him.

Savigny of Germany is regarded as the founder of historical thought of school. He firmly believed that law is a product of general consciousness of the people and a manifestation of their spirit. According to him, every law has a national character and it develops like language and binds people into one whole. He says- law has a dual role – one as a regulator of general national life and second as a distinct discipline for study.

Puchta (1798-1856) said Self interest causes a conflict between individual will and general will. This brings out the idea of law and States comes into existence.

Scabelling (1775-1854) said that law is a means by which the individual will is harmonized with the general will of the community.

Kohler (1849-1919) In his book philosophy of law, he postulates vitalizing of culture or civilization and this end is sought to be achieved through the instrumentality of law.

Roscoe Pound (1870-1964) an American Jurist said Law is nothing but the very life of mankind in organized groups and the foundations which make peaceful co-existence of masses of individuals and of social groups.

Duguit (1859-1928) The only right which any man can possess is the right always to do his duty. Man has always lived in unity and in society and was never entirely independent.

Some of the roots of our enacted laws may be traced to or can be found in philosophies of ancient Greek philosophers, like the Hiraclitus (530- 470 B.C.), Socrates (470-399 B.C.), Arsitotle (384-322 B.C.). Principles of justice and morality constitute the natural law. They said- entire universe in governed by reason. Man's reason is a part of the universal reason. Man is a part of nature in two ways- firstly, he is creation of god and secondly, he possesses insight and reason which enable him to articulate his action. Therefore, a man who lives according to reason, lives according to nature.

In 1897, Justice Holmes, an American Jurists issued a paper in which he put forward a novel way of looking at law. He says- if one wishes to know what law is, one should view it through the eyes of a bad man, who is only concerned with what will happen to him if he does certain things in deviation to established laws. It has become a tenet that a rule of law is a rule of conduct so established as to justify a prediction with reasonable certainty that it will be enforced by the courts if its authority is challenged.

Besides, Vico of Italy, Montesquiu of France, Hereder of Germany, Edmond Burke (1729-1797) of England, Sir Henry Maine (1822-1888) of England. Auguste Comte (1786-1857); Herbert Spencer (1820-1903); Ehrlich ( 1862-1922); Ihering (1818-1892) significantly contributed to today's modern concept of codification of laws and emergence of State Citizenship relationship.

Main thrust of the legal brains emphasizing on codification of laws, has been firstly, as a means of attainment of human perfection and secondly to secure liberty to individuals in the society. They all considered liberty as the first pre-requisite for the development of human personality. In their view, a State is like a family to which the interests of its members are always dear at heart, like a family which would not be happy if its members are in difficulty, want or trouble, like a family which would not interfere unnecessarily with the free choice of its members.

And therefore, in the backdrop of ancient social contract, every Society & every Individual Citizen has certain basic assumptions to take it for granted from the State that-

(i) His Life & Property will be protected and his liberty will be secured;

(ii) He can appropriate for his own use what he has created by his own labour and what he has acquired under the existing economic order;

(iii) That others will act with due care and will not cast upon him an unreasonable risk of injury;

(iv) That others will not commit any intentional aggression upon him;

(v) That people with whom he deals will carry out their undertakings and will act in good faith;

(vi) That he will have security as a job holder;

(vii) That State will bear the risk of unforeseen misfortune;

(viii) That State will bear the burden of supporting him when he becomes aged;

(ix) That complaints made to “State” will be replied. Article 12 of Constitution of India define “State” as a every Public functionary, whether State Govt / Central Govt / Municipal body / Statutory bodies / Any instrumentality / Agency of the Govt etc.

5. Further roots of Citizens Charter can be traced in the Constitution of India, and, in particularly in Article 14 of it. In vast, beautiful, geographical landscape of Independent INDIA, i.e. Bhaarat, the Constitution of INDIA came into existence on 26th January 1950, is the supreme & fundamental Governing Volume.

This epic Governing Volume makes a categorical announcement in its introductory passage that PEOPLE OF INDIA are the architect of this Volume. This announcement is intelligent, designed and purposeful. The announcement assumes significance because by this announcement, the framers of our Constitution intended to acknowledge and give tribute to selfless sacrifice of every men & women who devoted their life for the independence of INDIA.

There are three chief organs outlined in this Governing Volume - they are Legislature, the Govt and the Judiciary; and all these three organs derive their origin and all their powers from this peoples' Governing Volume. The dicta of the Constitution is crystal clear; namely, the goal of good governance.

6. Good governance signifies the way an administration ameliorates the standard of living of the members of its society by creating, and making available, the basic amenities of life; providing its people security and the opportunity to better their lot; instills hope in their hearts for a promising future; providing, on an equal & equitable basis, access to opportunities for personal growth; affording participation and capacity to influence, in the decision-making in public affairs; sustaining a responsive judicial system which dispenses justice on merits in a fair, unbiased and meaningful manner; and maintaining accountability and honesty in each wing or functionary of the Government.

7. Yet, forms of accountability may differ but the basic idea remains the same that the holders of Public Office must be publicly able to justify their exercise of power not only as legally valid but also socially wise just and reasonable, chiefly designed to add something more to the quality of life of the people.

8. The Constitution of India, apart from being an embodiment of Governance Directives, recognizes certain “fundamental” rights upon the Citizens of India. Among all fundamental rights, in my view, Article 14 is the most charismatic and dynamic.

If one makes a casual glance over the Articles in the arena of Fundamental Rights chapter of our Constitution, then he can generalize the fact that the realm of fundamental rights starts from Article 14. This is because, both the Articles 12 and 13 are only preface to the text of fundamental rights.

Article 14 derives its source from American and Irish Constitutions and directly links with plenary provisions enshrined in the Preamble of our Constitution, which speaks the equality of status and of opportunity and simultaneously gives effect to the principles in the whole text of the Constitution and 12 Schedules appended to it.

If we move in the pages of Indian history, in a sense the demand for equality which is the main intent of Article 14, is linked with the freedom movement in India. The Indians wanted the same rights and privileges that their British masters enjoyed in India and the desire for civil rights was implicit in the formation of the Indian National Congress in 1885.

Equality is a dynamic concept with many aspects and dimensions. In respect of content and reach of the great equalizing principle enunciated in Article 14, there can be no doubt that it is a founding faith of the Constitution. It is a pillar on which, the foundation of our Democratic Republic rests. Hence the Courts in our country do not subject this Article to a narrow approach.

A very fascinating aspect of Article 14 which the courts in India have developed over the time is that Art.14 embodies “a guarantee against arbitrariness”. A man acting without reason is acting arbitrarily. Any action that is arbitrary must necessarily involve the negation of equality. Abuse of power is hit by Art.14. AIR 1974 SC 555; AIR 2005 SC 2021.

In wealth of the Judgments delivered by our Courts, it is repeatedly affirmed that public authorities must exercise their discretionary powers in a reasoned and justified manner, failing which inescapable violence to Article 14 is imminent.

It is my case that Citizen’s / person’s “Right of Reply” is inherent in “Duty to reasoned exercise of discretion by Public authorities”, a duty which is consistently cast upon public / statutory authorities by our Constitutional Courts, in their series of judgments.

It is my case that when the Courts, in their wealth of judgments, lay so much emphasize on recording of reasons by public authorities, in the discharge of their duties even when administrative in nature, the recording of reason in their decision itself presupposes the obligation of giving reply, and not only a mere reply but a reasoned reply. It cannot be said that – whereas authorities are under obligation to make reasoned reply but they are at liberty to not to make any reply.

It is my case that in wealth of judgments, the Courts have insisted upon recording of reasons by administrative authorities on the premise that such a decision may be subject to judicial scrutiny / review and the courts cannot exercise their duty of review unless courts are duly informed of the consideration of the public / statutory authorities underlying the action under review. A statement of reasons serves purposes other than judicial scrutiny / review, inasmuch as the reasons promote “thought” by the public / statutory authority and compel it to cover the relevant points and eschew irrelevancies and assures careful administrative consideration.

When, in the case of M Krishna Swamy versus UOI reported in (1992) 4 SCC 605, the Hon’ble Supreme Court held that any action, decision or order of any statutory or public authority bereft of reasoning would be arbitrary, unfair and unjust violating article 14 of the Constitution of India, then, then, it is my case that non-reply of any complaint received by any public /statutory authority, is a positive act of omission, an arbitrary, unfair and unjustified decision of that public / statutory authority to not to make a reply, thereby frustrating citizen’s fundamental right enshrined under Article 14.

When, in the case of Srilekha Vidyarthi versus State of UP reported in AIR 1991 SC 537, it was held by the Hon'ble SC that in order to satisfy the test of Article 14, every State action must be informed by reasons and that an act uninformed by reasons, is arbitrary, and arbitrariness is the very negation of the Rule of Law, then, it is my case that non-reply of any complaint received by State, is an act of omission of the State not informed by reason and thus arbitrary, and thus does not pass the test of Article 14.

When in the case of Dwarkadas Marfatia versus Port Trust Bombay, reported in AIR 1989 SC 1642, it was held by the Hon’ble SC that every action of public authorities must be subject to rule of law and must be informed by reason and when there is arbitrariness in their acts and omissions, Article 14 springs in and judicial review strikes it down and thus whatever be the activity of the public authority, it should meet the test of Article 14, then, it is my case that when a public authority does not reply to my complaint, I can safely allege that the said public authority is acting arbitrarily, and Article 14 springs in and gives me the locus of being aggrieved and jurisdiction to the High court under Article 226 to strike down that alleged act of arbitrariness, i.e. the act of “un-replied compliant”.

Similarly, when, in the case of Union of India Vs Mohan Lal Capoor reported in (1973) 2 SCC 836, the Hon’ble Supreme Court said – Reasons disclose how the mind is applied to the subject matter for a decision whether it is purely administrative or quasi judicial; and reveal a rational nexus between the facts considered and conclusions reached, then, it is my case that non-reply of any complaint received by any public /statutory authority implies that although mind was applied to the complaint and arbitrary decision was taken by the administrative authority that no reply should be made.

Inaction by itself is an independent cause of action and the High Courts can effectively deal with the same. It cannot be said that a person is left without a remedy to challenge any omission or inaction on the part of the authority. It may be informed that in a case, reported in AIR 2003 SC 1115, relating to grievance of the Public servant, the Hon’ble SC held that the “inaction” on the part of the authority can be challenged in the High Court by filing a WP under Article 226 of the COI.

SOME OTHER IMPORTANT OBSERVATIONS ABOUT ARTICLE 14
Whenever there is arbitrariness in State action, Art.14 springs into action and the courts strike down such action. AIR 2000 SC 205.

Equality is one of the magnificent corner stone of Indian Democracy. Justice Thommes in Indira Sawhney versus UOI AIR 1993 SC 477.

Equality is the basic feature of the Constitution. Reasonableness and fairness is the heart and soul of Article 14 of the Constitution of India. Delhi Development Authority versus Joint Action Committee, Allottes of SFS Flats (2008) 2 SCC 672, 692 (para 43).

The most accepted methodology of governmental working ought always to be fair and in the event of its absent, law courts would be within their jurisdiction to deal with the matter appropriately. Anil Ratan Sarkar versus Hirak Ghosh, (2002) 4 SCC 21, 25 (para 1)

Whereas when one grant a facility to one and refuse to others similarly situated, practice discrimination, and thereby infringe and frustrate the spirit of Article 14 of the Constitution of India. Union of India versus R P Yadav (2000) 5 SCC 325 (para 70)
An act which is discriminatory is liable to be labelled as arbitrary. State of A.P. Versus McDowell & Co. (1996) 3 SCC 709 (para 44)

Discretion in reality means a power given to a person with the authority to choose between two or more alternatives or possibilities each of which is lawful and permissible. The concept of discretion imports a duty to be fair, candid and unprejudiced; not arbitrary, capricious or biased; much less, warped by resentment or personal dislike.

9. Having said all sounding phenomenal, Statutory / Public authorities / Public officers, especially highly placed, soaked in arrogance of their powers, generally do not bother themselves to the complaint of Citizens, and their replies, most of times, are deliberately illogical and evasive.

10. A note was struck by Apex Court in Superintending Engineer, Public health, U.T. Chandigarh V Kuldeep Singh, 1997(9)SCC 199, when it observed: “Every Public servant is a trustee of the society; and in all facets of public administration – every public servant has to exhibit honesty, integrity, sincerity and faithfulness in the implementation of the political, social, economic and constitutional policies to integrate the nation, to achieve excellence & efficiency in public administration. ...”

Contrary to above, the experience is that the holders of public offices treat the authority in their hands, as one bestowing upon them, the status of a ruler rather than one in public service.

11. The Public Servants / Officials, in the spirit of lawlessness, were often heard saying, (one may also call it various forms of passionate corruption) in the words of extremely Legal learned - Professor Upendra Baxi--

• As an Authority of Public Power, I have this and that power. I exercise it in this or that manner because I so wish. The only good reason which I exercise my power this or that manner is that I wish to exercise it in this or that manner;
• As an Authority of Public Power- I may so act as to favour some and disfavour others;
• As an Authority of Public Power- I may so act as to give an impression that I am acting within my powers but in reality I may be acting outside it;
• As an Authority of Public Power- I may decide by myself what your rights and liabilities are without giving you any chance to be heard, Or I may make your opportunity to be heard a meaningless ritual;
• As an Authority of Public Power- I may decide but declines to let you know the reasons or grounds of my decisions or provide reasons without being reasonable;
• As an Authority of Public Power- I may use my power to help you only if I am gratified in cash or in kind;
• As an Authority of Public Power- I may choose to use my power only after a good deal of delay and inconvenience to people;
• As an Authority of Public Power- I may just refuse to exercise the powers I have regardless of my legal obligation to act and regardless of social impact of my inaction.

In modern democracies, wide powers vest with Legislators, Judges, with Govt, and with Bureaucrats. Each group, if it so wishes, may act quite fancy, in any or all the ways thus far specified hereinabove.

12. It is my case that the giving of satisfactory reply is a healthy discipline for all who exercise powers over others.

13. It is my case that a complaint to any public / statutory authority is the most legitimate incident of a democracy.

14. It is my case that grievance of the people must be promptly and properly attended instead of waiting and allowing for it to be translated into court litigation.

15. I also invite attention to the national Litigation Policy [For short NLP]. I am of view that Wednesday, the June 23rd, 2010, 14:14 Indian Standard Time, is one of a historic moment for India when Dr.M.Veerappa Moily, Minister of Law and Justice released a Document called National Litigation Policy. The principal aim of this Policy is to transform Government into an Efficient and Responsible litigant. “EFFICIENT LITIGANT” under the Policy is desired as focusing on the core issues involved in the litigation and addressing them squarely; and Managing and conducting litigation in a cohesive, coordinated and time-bound manner.

“RESPONSIBLE LITIGANT” under the Policy is desired as, which in my view is more important, that litigation will not be resorted to for the sake of litigating. This Policy, in point no. 2. of Chapter II of Vision / Mission exhorts that Government must cease to be a compulsive litigant. The easy approach, “Let the court decide,” must be eschewed and condemned. It is equally remarkable to note that when this policy, in the very first point of Vision / Mission reaffirms that it is the responsibility of the Government to protect the rights of citizens and those in charge should never forget this basic principle.

This Policy, in point no. 4(A) of Chapter II of Vision / Mission delves the responsibility on Heads of various Departments, Law Officers and Government Counsel, and individual officers to secure the strict implementation of this Policy.

In the light of this National Litigation Policy, the (Public authority) is empowered to take appropriate legal opinion about the merit of the submissions made by me / us in the background of facts of the case, so as to avoid unwarranted litigation in the court of law against the Government functionaries.

16. In fact, in the case of Salem Advocates Bar Association, Tamilnadu Vs. Union of India (UOI), (2005) 6 SCC 344, the Hon'ble Supreme Court, among other things, said - Judicial notice can be taken of the fact that in a large number of cases either the notice is not replied to or in the few cases where a reply is sent, it is generally vague and evasive. It not only gives rise to avoidable litigation but also results in heavy expenses and costs to the exchequer as well.

A proper reply can result in reduction of litigation between the State and the citizens. In case a proper reply is sent, either the claim in the notice may be admitted or the area of controversy curtailed, or the citizen may be satisfied on knowing the stand of the State.

In the above case strict duty is cast upon the Public authorities to make proper replies if they happen to receive any statutory notice, either under section 80 of CPC 1908, or under any other statute. I say, when a law recognizes a duty, correspondingly, law also recognizes a right.

17. In many respects, we now live in a society that is only formally democratic, as the great mass of citizens has minimal say on the major public issues of the day, and such issues are scarcely debated at all in any meaningful sense in the electoral arena and where life decisions are taken in closed chambers of Ministers & Bureaucrats.

18. To oppose or challenge the illegal acts & omissions of government does not mean you are against the country or the people that the government supposedly represents. Such opposition should be called what it really is: democracy, or democratic dissent, or having a critical perspective about what our leaders are doing. Either we have the right to democratic dissent and criticism of these acts & omissions or we all lie down and let the leader do what they want; while we follow uncritically and obey whatever they command. That's just what the Germans did with Hitler, and look where he got them.

19. FINALLY, I seek to recall an historic incident of Indian freedom struggle, occasioned with Mohandas Karamchand Gandhi (His Journey towards Mahatma). In the year 1893, when in South Africa, while holding a First Class Compartment ticket and traveling in, Gandhi was thrown out of the train, for in those times “Blacks” were not allowed to travel in the First Class Compartment, notwithstanding they hold a valid ticket. It was 9.00 in the chill night. That designated “Black” sent a Telegram to the General Manager of the Railways and registered his complaint. The Complaint of that designated “Black” was attended, forthwith, the General Manager instructed the Station master to secure that complainant reaches his destination safely. Complainant was accommodated in the very next morning train to his destination.

20. And here, in the era of INDEPENDENCE and 21st Century of modern democracy, we have Citizens of Sovereign India, of whose complaint are ordinarily, attended with annoyance and sometimes with hostility.

21. And where public / statutory authorities don’t reply to complaints, or reply in interplay of words and in genius pretence, than, in my view, the appropriate approach may be, to record a “Strong Notice”. It is presumed that after receiving of said strong notice, the recipient public authority will certainly make a reasoned reply.

22. And, in case, if the concerned public authority choose to remain silent on the received complaint, then, a simple Writ / Civil Suit may be filed, praying therein for the concerned Court , to direct the concerned Public authority to make a reasoned reply in a time bound manner. The concerned shall also direct to the respective Public authority that recording of reasons in the “reply” must not only be intelligible but which will also deal with the substantial points which has been raised therein in the complaint, will cover other relevant points, eschew irrelevancies, and reply, which demonstrate that the authority has given due consideration to the points in controversy and that decisions of the public / statutory authority on the issue raised in the said complaint have been reached according to law.

23. In case, if anybody is interested to have the copy of sample Strong Notice and concerned sample Writ / Civil Suit, may mail me at legallyspeaking.jalan@gmail.com, for it.

Sandeep Jalan
Advocate
Mumbai.

POST SCRIPT
Whereas the Govt of India is opposed to the idea of including Citizens’ Charter in Lokpal, some quarters of intelligentsia in “Civil society” are also opposing the inclusion of Citizens’ Charter in Lokpal Act (proposed). They are arguing that this will very heavily burden the Investigative Agency of the Lokpal, and the Lokpal may itself collapse. In this context, I argue a small story which highlights the whole idea of having penal laws.

I will begin with the words of Sir Lionel Fox, an acclaimed Penologist of England. He quotes the example of an 18th Century Judge who passed sentence of death saying, “You are to be hanged not because you have stolen a sheep, but in order that others may not steal.” He continued, “Executions are intended to draw spectators, and if they don’t, Executions do not serve their purposes.”

The whole purpose of having penal laws is that they may not be applied at all, by creating atmosphere of deterrence in the mind of potential offender.

The present justice dispensation machinery is a scarecrow in the field that doesn’t scare the crows anymore and the crows are sitting on the arms and cawing their contemptuous defiance. The lawyers, with honourable exceptions, have, sadly, lengthened simple justice into trade.

The moment “independent” Lokpal starts punishing the erring Public officials, the message will go to all Public officials and will create an atmosphere of restraint and will cause obedience to letter of the law. Then, there may be few complaints that will be filed before Lokpal.

In this mutually complex interactive Socio-economic-political settings of our flat earth, and the oceans of legislations, along with the theory of “guilt”, justice dispensation in any system of governance seems bound to be inherently procedurally complex and thus time consuming; and only way I could imagine to have a very efficient administration of justice is to secure that let there be least cases for courts to decide. And this may become the reality of day if Judges begin to take a serious view of those who take law of the land for granted and cause them to earn the wages of reformatory prison institutions. The sounds of Justice must be alarming. Everything else is a bad idea.

"STING" before Supreme Court of India

2010-04-07T05:45:00.000-07:00

Wednesday, 7th April 2010, 10.20 Hrs.
To,
The Hon'ble the Chief Justice Of India, K G Balakrishnan,

In the backdrop of Yahoo India news report - Tue, Apr 6 10:54 AM: CBI says charge those who sting, SC to decide.
The Supreme Court today decided to test the legality of the CBI stand that a person who does a sting operation on the sly to expose a "corrupt" public official is liable to be charged with the offence of abetting corruption. Abetment of corruption draws a punishment of imprisonment of a maximum five years and fine under the Prevention of Corruption (PC) Act, 1988.

MY LORDSHIP, If whether an alleged act constitutes an offence punishable with imprisonment, is probably a matter of Public Policy of India, a matter 'substantially' falls within the provinces of Parliament of India.

MY LORDSHIP, in our scheme of Constitution, the Separation of powers is recognized as a basic feature of our functional democracy. The Separation of powers implies the exercise of powers by three organs of the 'State' in mutual restraint and in the spirit of cooperation, in the best interest of the people.

MY LORDSHIP, Therefore, it feels that, it is desirable that this Hon'ble Apex Court may consider recusing itself from dwelling in the issue and left it for the wisdom of Parliament of India to decide upon and IF EXPEDIENT, they may pass an appropriate law, that – “Whoever carry out Sting Operation, to expose corruption in public life, will be punished with imprisonment........”

Moreover, so important, the laws passed by Parliament of India has sanction of the wishes of the 110 Crore people.

From,
Sandeep Jalan
[Advocate]
Mumbai – 400057.

Page link of News Report:
http://in.news.yahoo.com/48/20100406/814/tnl-cbi-says-charge-those-who-sting-sc-t.html

Rich illustration of selective Logic

2010-04-01T20:22:00.000-07:00

News Report: The Hindu: 09.05.2010
Govt likely to finalise IPO managers for CIL soon. http://www.thehindu.com/businessline/blnus/14091821.htm

NEW DELHI: The government is likely to appoint six merchant bankers, including the lowest bidder Citigroup, that have been shortlisted for managing the initial public offer of state-owned Coal India Ltd (CIL) within a few days, according to market sources.

Sources close to the development said that the other five shortlisted bankers - Deutsche Bank, Morgan Stanley, Enam, Kotak Mahindra and DSP Merrill Lynch - are expected to match the “near-zero” fee bid of the Citigroup because of the high profile and siz e of the CIL IPO.

Sources said that as against the global norm of 3-5 per cent fee that bankers charge for managing IPOs, Citigroup has bid a tiny fraction of the estimated size of the issue (around Rs 12,000 crore) so as to ensure that a commercial contract can be signed .

“There has been an instance, or two, where government has rejected zero-fee bid because for a commercial contract to be signed there has be some amount on paper,” said one source. He added, “Just to give a perspective, at the current fee while CIL IPO ma nagers are expected to incur $3-4 million in costs - from legal documentation to marketing - they will end up getting just about Rs 200-250 per head (about Rs 12,000-13,000) in all.”

One banker said that although this kind of fee is “unique”, merchant bankers view the costs (or loss) they incur as “advertising cost” and “future investment”, in a country (like India) which is planning to raise Rs 40,000 crore through disinvestment pl an in the near term. “That itself is a big ticket (attraction),” he added.

Isnt above a brilliant deal for India.

Now may pls compare this with below deal-

The appropriate government regularly spend crores of rupees on advertisements to give “publicity” to “Events and Happenings of National Importance”.

The central govt, State govt, municipal bodies mint money from the people of India by way of Income Tax, Service Tax, Wealth Tax, Road Tax, Property Tax, Entertainment Tax, Sales Tax, Professional Tax, water Tax, Toll Tax, Stamp duty, Custom duty, Excise duty, Education cess, VAT, CST, etcetera, and (do not) promises us in return that every penny will be judiciously spend for the well being and welfare of the people.

Now may pls read this-

01.04.2010, While turning the pages of morning newspaper Navbharat Times (Times of India group publication, Hindi language), advertisement published of government of India about primary Education of every Child in the backdrop of Right to Education Act coming into force, page 12, half paged advt. Fair enough.

01.04.2010 while turning the pages of morning newspaper – Free Press Journal, a “news report” struck me – Right to Education Act comes into force finally, center of page 3. The Govt did not spend a penny on advertisement on “Right of primary education of children, a reality”.

Thus, on one hand, the government pays lakhs of rupees to Navbharat Times to give publicity to Right To Education coming into force and on the other hand the Free Press Journal cover the same issue of Right To Education coming into force into their news report and government did not spend a penny.

And thus we are generously Paying to a Person for “Publicity” of “Events and Happenings of National Importance” when that person has itself set up an business venture of Publishing, so as to give “Publicity” to “Events and Happenings of National importance”, FREE OF COST. Aren't we spending our little precious money on something which is available, in fact offered to us, FREE.

It is well within constitutional powers of government to issue a Press Release with binding directives on all persons publishing Newspapers, that they are obliged to cover this news of National Importance in their newspaper. It is understandable when government pay for Public Notices & Commercial tenders which are not in the nature of news of general importance to every citizen of India.

From- Sandeep Jalan (Advocate)

Janhit Manch, Kuber Bhuvan, Bajaj Road, Vile Parle West, Mumbai- 400056.