In this article, Mishika Bajpai discusses the Prior Notice Requirement Under Section 34(5) of the Arbitration and Conciliation Act, 1996.

The most recent debate that reverberated in the halls of the Apex Court was on the issue whether Section 34(5) of the Arbitration and Conciliation Act, 1996, inserted by Amending Act 3 of 2016 (w.e.f. 23rd October 2015), is mandatory or directory?

Before divulging the ratio straightaway, it is rather crucial to understand the scheme of the act along-with the intention of the legislature and the purport of the language, in order to perceive how the court reached its decision.

The Arbitration and Conciliation Act, 1996 consolidates and amends the law relating to arbitration, and, as such, is a complete code.[1] Under the 1996 Act, an arbitral proceeding commences under Section 21, in respect of a particular dispute for which a request for reference to arbitration is received by the respondent[2]. The arbitral proceedings terminate[3] by the delivery of a final arbitral award. The award shall then be final and binding on the parties and such persons claiming under them[4]. The enforcement of an award[5], as per both the pre-and post-amendment regime, is in accordance with the provisions of the Code of Civil Procedure, 1908, and as such is deemed to be decree enforceable under it.[6]

The Arbitration and Conciliation (Amendment) Bill, 2015 was introduced in the light of India’s poor position in contract enforcement in the World Bank Doing Business Report wherein it ranked 178 out of 189 countries in enforcing contracts. The reason being, slow process of dispute resolution through arbitration and further pigeonholing by court interferences. The introduction entailed several debates over a possible legislation which was urgently required to diminish the snowballing pendency. The heart of the amendment was to ensure quick enforcement of contracts, easy recovery of monetary claims, and encouraging investment and economic activity. [7]

The Law Commission of India submitted its 246th Report on “Amendments to the Arbitration and Conciliation Act, 1996” in August 2014 and recommended various amendments in the Act. The Report outlined the issue of delay plaguing the arbitration process, including challenges to arbitral awards under Section 34 of the Act which remain pending for years, and then proposed amendments to facilitate expeditious disposal of these cases. For instance, the Commission proposed the addition of sections 34 (5) and 48 (4) which would require that an application under those sections shall be disposed of expeditiously and in any event within a period of one year from the date of service of notice. The Amendment Act of 2015 was, thus, enacted to provide for speedy disposal of cases relating to arbitration with least court intervention[8] and it is in this background that the addition of Section 34(5) was recommended.

Statutory regime of challenging a domestic award

The remedy against an award under Section 34 emphasizes that the recourse “may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3)”. While sub-section (2) enumerates the grounds under which an arbitral award can be set aside by the Court, sub-section (3) sets out the time period within which an arbitral award can be challenged under the Act. Under this, the challenge to an arbitral award may not be made after a period of 90 days from the receipt of the award, with the Court having the power to condone a delay of 30 more days, i.e. if sufficient cause is made out.

Another provision adjunct to the exercise of ‘making of an application’ under Section 34 is the newly introduced Section 34(5)[9] which reads as under –

“An application under this section shall be filed by a party only after issuing a prior notice to the other party and such application shall be accompanied by an affidavit by the applicant endorsing compliance with the said requirement.” (emphasis supplied)

Lastly, Section 34(6) states that an “application under this section shall be disposed of expeditiously, and in any event, within a period of one year from the date on which the notice referred to in sub-section (5) is served upon the other party”. Reading Sections 34(5) and (6), it seems as if they form part of a composite scheme, the object of which is that an application under Section 34 be disposed of expeditiously within one year.

Upon a perusal of the above provision and for the reasons mentioned below[10], it would appear as if service of a prior notice of an application under Section 34 is crucial to the ‘making of an application’ –

1. Not only is such notice to be given but also the application itself has to be accompanied by an affidavit of the applicant endorsing the compliance of said requirement. [11]
2. The wording used in Section 34(5) of the Act clearly shows that the intent of the legislature was that no application under Section 34 of the Act can be filed until and unless the same has been served on the other party. [12]
3. The use of the words ‘only after’ clearly demonstrates the mandatory nature of this requirement of issuance of prior notice to the other party. [13]
4. Any doubt in this regard is completely obliterated by second part of the sub-section which provides that the application ‘shall’ be accompanied by an affidavit by the applicant endorsing compliance with the said requirement. [14]
5. This requirement of the service of prior notice therefore, cannot be said to be a mere formality or directory in nature.[15]

A similar reading of the provision was given by the Patna High Court[16], Guahati High Court[17], Uttarakhand High Court[18], and Himachal Pradesh High Court[19], while holding it to be mandatory. Thus, it came to be understood that the use of the words ‘shall’ and ‘only’ rendered the provision to be mandatory.

The requirement of a prior notice became all the more necessary due to the insertion of Section 36(2) and 36(3) which provide that along-with filing of the application, the objector should also file an application for stay of the operation of the award; the purpose being to ensure that the opposite party is adequately represented when the court is considering the issue of stay. [20]

However, whether a statute is mandatory or directory depends upon the intent of the Legislature and not upon the language in which the intent is clothed. [21] The meaning and intention of the Legislature must govern, and these are to be ascertained, not only from the phraseology of the provision, but also by considering its nature, its design, and the consequences which would follow from construing it the one way or the other.[22] “Where the consequence of failure to comply with any requirement of a provision is provided by the statute itself, the consequence has to be determined with reference to the nature of the provision, the purpose of enactment and the effect of non-compliance thereof. In its absence the consequence has to be determined with reference to the effect of the non-compliance of the provision of the legislature. Mere use of the word ‘shall’ need not be given that connotation in each and every case that the provision would be invariably interpreted to be mandatory or directory.”[23] One of the well-accepted tests for determining whether a provision is directory or mandatory is to see whether the enactment provides for the consequence flowing from non-compliance with the requirement prescribed.[24]

Instantly, another perusal of Section 34(5) will show that there has been no consequence provided against its infraction, rendering it to be merely directory and not mandatory. While the section provides that an application shall be made only after making due compliance of issuing prior notice, it is not followed by a penal provision which acts as a consequence for its non-compliance. It is only a procedural provision which has been introduced to reduce delay in deciding applications under Section 34. The construction ultimately depends upon the provision itself, keeping in view the intendment of the enactment and the mischief it seeks to avoid. In the present case the only consequence of not providing prior notice would be an extension of the timeline in which the challenge against an award has to be disposed of. It is true that the legislature made a conscious decision to specifically add Section 34(5) but that by itself would not scuttle the remedy provided to a party seeking justice against an award before a court of law; that is certainly not the mischief that the provision seeks to avoid.

The same Amendment Act brought in a new Section 29A which provided that in case an award is made beyond the stipulated or extended period contained in the Section, the consequence of the same would result in the termination of the mandate of the Arbitrator. This is to be contrasted with Section 34(5), the non-compliance of which leads to no consequence.

The Bombay High Court, while dealing with the aforementioned query, noted that the provision is directory, largely because no consequence has been provided for breach of the time limit specified.[25] Furthermore, it observed, that there existed no consequence under section 34(6). Therefore, if the Court is not able to dispose of the arbitration petition under section 34 within one year from the date of service of notice, the only consequence would be that the timeline would get extended. It was further observed that the legislative intent of inserting those provisions is the speedy disposal of the proceedings and not to penalise the petitioner for non-compliance of the procedure which, in effect, is directory.[26] This view was followed by the Calcutta High Court as well.[27]

The Hon’ble Supreme Court in the case of The State of Bihar & Ors. vs. Bihar Rajya Bhumi Vikas Bank Samiti, Civil Appeal No. 7314 of 2018 on 30.07.2018 stated that it was the view propounded by the High Courts of Bombay and Calcutta that represented the correct state of the law.[28] The Court noted that the object of Section 34(5) and (6) is, as has been stated by the Law Commission, the requirement that an application under Section 34 be disposed of expeditiously within a period of one year from the date of service of notice.[29] It found it imperative to note that the provision was procedural, the object behind which is to dispose of applications under Section 34 expeditiously. It was however observed that the aforenoted by itself would not be sufficient to construe Section 34(5) as mandatory, keeping in view the fact that if the time limit of one year is not adhered to under Section 34(6), no consequence thereof is provided. “To construe such a provision as being mandatory would defeat the advancement of justice as it would provide the consequence of dismissing an application filed without adhering to the requirements of Section 34(5), thereby scuttling the process of justice by burying the element of fairness.” The Court thus, concluded by holding that Section 34(5) is a directory provision and not mandatory.

[1] Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., (2011) 8 SCC 333 at 371

[2] Section 21, Arbitration and Conciliation Act, 1996 (unless the parties otherwise agree)

[3] Section 32, Arbitration and Conciliation Act, 1996 (or by any other the circumstances mentioned in Section 32(2))

[4] Section 35, Arbitration and Conciliation Act, 1996

[5] Section 36, Arbitration and Conciliation Act, 1996

[6] BCCI v Kochi Cricket Pvt. Ltd., (2018) 6 SCC 287

[7] Parliamentary Debate available at http://164.100.47.193/debatestext/16/VI/1612f.pdf @pg. 215, 216, 221, 222

[8] Statement of Objects and Reasons, Arbitration and Conciliation Act, 1996

[9]  Section 34(5), set out below, was added to the Act by the Arbitration and Conciliation (Amendment) Act, 2015, which was enacted on 31.12.2015 and deemed to come into force on 23.10.2015

[10] Machine Tool (India) Ltd v. Splendor Buildwell Pvt. Ltd. & Anr., 2018 SCC Online Del 9551

[11] Ibid

[12] Ibid

[13] Ibid

[14] Ibid

[15] Ibid

[16] Bihar Rajya Bhumi Vikas Bank Samiti v. The State of Bihar, L.P.A. No. 1841/2016

[17] Union of India and Ors. vs. Durga Krishna Store Pvt. Ltd., Arb. A. 1/2018

[18] National Highways Authority of India vs. Ashish Panwar and Ors. 2017AIR2018Utr12

[19] Madhav Hytech Engineers Pvt. Ltd. vs. The Executive Engineers and Ors., 2017 OMP (M) No. 48 of 2016

[20] Law relating to Arbitration and Conciliation, P.C Markanda, 9^thEdn., 2016

[21] Govindlal Chhaganlal Patel v. Agricultural Produce Market Committee, (1975) 2 SCC 482

[22] Ibid

[23] Lakshmanasami Gounder v. CIT, (1992) 1 SCC 91. Also See, Kailash v. Nanhku, (2005) 4 SCC 480

[24] Administrator, Municipal Committee Charkhi Dadri v. Ramji Lal Bagla, (1995) 5 SCC 272

[25] Global Aviation Services Private Limited v. Airport Authorities of India, Commercial Arbitration Petition No. 434 of 2017; See also Maharashtra State Road Development Corporation Ltd. v. Simplex Gayatri Consortium and Ors., Commercial Arbitration Petition No. 453 of 2017

[26] Ibid

[27] Srei Infrastructure Finance Limited v. Candor Gurgaon Two Developers and Projects Pvt. Ltd., A.P. No. 346 of 2018

[28] The State of Bihar & Ors. vs. Bihar Rajya Bhumi Vikas Bank Samiti, Civil Appeal No. 7314 of 2018, para 27

[29] Ibid, para 24

The post Prior Notice Requirement Under Section 34(5) of the Arbitration and Conciliation Act, 1996 appeared first on iPleaders.

This article is written by Diksha Mahla, of Raffles University, Neemrana, Alwar, Rajasthan. The article talks about Impact Investing and top organizations working in the area of Impact Investing in India.

Impact Investing

In the words of Elizabeth Burgess, ‘Businesses that fail have no social impact because if they can’t sustain themselves financially, there is no product or service to deliver’.

‘Impact Investing’ is the combination of two terms ‘impact’ and ‘investing’ and to understand impact investing we need to understand investment first. Basically, investment is the purchase of an asset or item which may not be used today but saved for future income. When this investment is made in companies and organizations with the intention and commitment of creating social and environmental impact along with financial return then this investment is known as Impact Investing. It has emerged as an alternative investment practice to deal with the world’s biggest social and environmental challenges. It came up with an idea to indulge investors in the activities which can create financial, social and environmental development. To decide the area of Impact Investing, one should first identify the audience which means a group of people who are going to be affected and then the impacts of that investment must be analyzed.

Social Responsibility

Man is a social animal who cannot survive without the society. But it is a bitter truth that no one is concerned about the condition of society. There should be a balance between profit-making activities and society benefitting activities. It is a moral duty of everyone to protect society. The International Organization for Standardization (ISO) strongly emphasizes that society and environment need to be taken into consideration along with financial return. It is the responsibility of the companies to protect the society and it is known as Corporate Social Responsibility (CSR).

The need of Impact Investing

Three important things everyone should know about impact investing

1. Impact Investing is not Philanthropy or charity but, it is derived from the failure of philanthropy to address various social and environmental problems. Philanthropists have failed to provide healthier, better, safer, and less polluted life to the poor because there is less connectivity between rich donor and problems of poor. Impact Investing emerged with an idea to allow the ZASa flow of money in the hands of local entrepreneurs who better understand the problems of society such as poor healthcare, poor food supply, water supply, education and many more.
2. Impact Investing aims to create additional impact as the core business of the targeted company. Every socially inclined investment is not impacting investment. For example- buying stock in public solar energy plant may not lead to the production of green energy. Additional money needs to flow in the business to create a social impact. Impact investment helps to create a social and environmental impact which will contribute towards fulfilling the dream of a better society.
3. Impact Investing is, after all, an investment only so, expecting financial return is obvious. Required financial return is an important element to promote Impact Investing. Impact investors are looking forward to a profitable business which will give them money in return because they are not investing in charity. This not only creates social impact but also helps to get a high amount of financial return.

Bodies Making Impact Investing

Both individual and institutional investors are attracted towards Impact Investing but the bulk of Impact Investing is made by institutional investors. Some of the impact investors are:

1. Insurance companies
2. Pension funds
3. NGOs
4. Individual Investors
5. Fund Managers
6. Family Offices
7. Private Foundations
8. Religious Institutions
9. Development finance institutions

Characteristics of Impact Investing

The Global Impact Investing Network has given four characteristics of Impact Investing:

1. The intention of an investor: Investor activities can be carried out both in developed and developing markets. The intention is an essential element of Impact Investing because, without the intention of improving social and environmental conditions, the impact cannot be created. Every investor has an intention in his mind to deal with a particular social and environmental challenge for example- one is interested in investing in the field of education, healthcare, housing, sanitation, etc., which is not accessible to poor and rural population and other might be interested in impacts of climate change and environmental degradation and so on.
2. An expectation of the returns: Financial returns from Impact Investing are the major attraction of investors. While investing in any area, there lies an expectation of financial returns on capital and, at a minimum, a return of capital.
3. The range of asset classes and return expectations: The target of impact investors is from below market (or concessionary) to the risk-adjusted market rate. The instruments in which investment is made clearly shows their intention which is driven by economies of investment. This depends entirely on the interest of the investor because some are inclined towards investment in early-stage social enterprises whereas others are more inclined towards investing in the expansion of already proven business models.
4. Impact measurement: Measurement and report of progress and performance of social and environmental impact from an investment is the hallmark of Impact Investing. An approach towards impact measurement will show investors’ intention, goals, and capacities. Components included are:

• Setting performance metrics/targets related to these objectives using standardized metrics wherever possible,
• Monitoring and managing the performance of investees against these targets,
• Reporting on social and environmental performance to relevant stakeholders, and
• Establishing and stating social and environmental objectives to relevant stakeholders

The Future of Impact Investing

Since the emergence of Impact Investing, it is growing day by day because investors have adopted it in a positive way. The need for Impact Investing is realized by the investors who help those small business entrepreneurs to work in the field of societal development. As we all know the gap between rich and poor is increasing day by day. Impact Investing is a link which joins the investment to the problem of society. One of the major problems of the society is that natural resources are exploited by the people but Impact Investing is promoting sustainable use of the natural resources which is a very important need of the society. In short, we can say that Impact Investing has a very bright future.

GIIN (Global Impact Investing Network)

It is a non-profit organization which is working to increase the effectiveness of Impact Investing. It helps in the acceleration of the impact investing industry. It provides a data report of 209 impact investors around the world through conducting Annual Impact Investor Survey.

1. There was a progress in key indicators of industrial growth in a survey conducted in 2016.
2. In aggregate, around 205 investors invested USD 22.1 billion in 2016 and they planned to increase capital investment by 17% to USD 25.9 billion in 2017.
3. Currently, 208 impact investors manage USD 114 billion on Impact Investing.
4. Impact investors measure their performance using qualitative information.
5. Investors observed return more than their expectations both financial and impact.

Progress and challenges-source: GIIN

Professionals with relevant skill sets

Number of investments and amount of capital invested in 2016 and planned for 2017- source: GIIN

Types of Impact Investing

The focus of Impact Investing varies from investor to investor because they will have their own conception of social good they are aiming for. There might be some investors who are more interested in developing an educational system, healthcare access, climate change and many more. There can also be ideas to care for developed and developing economies or some may be interested in developing a particular class or community of a nation.

1. Place: Investments which are made in the companies or projects located at a particular place to help out the people of that locality. For example- investing in the set-up of a small scale industry which will create job opportunities for nearby population. Investments which are made in the companies or projects located at a particular place to help out the people of that locality. For example- investing in the set-up of a small scale industry which will create job opportunities for nearby population.
2. Process: Investments which are made to promote better processing technique in a particular manufacturing process is said to be an investment on the basis of process. For example- investment to provide better cultivation techniques to the farmers.
3. Planet: Environmental degradation is the major issue of the present world. So, an investment which is made to preserve climate and natural habitat or more efficient techniques promoted to reduce the effluents of carbon dioxide in the air are said to be an investment made for the benefit of the environment.
4. Product: An investment which is made to have better social impacts, for example- investing in free and compulsory primary education for the children because children are the future and they must get a proper education which will have a strong social impact.
5. Paradigms: Investment aiming towards a change in the whole system is the investment on the basis of paradigms, for example- an investment made to alter the system of childhood nutrition.

Advantages of Impact Investing

1. Impact Investing is in practice for decades till now but initially, it was limited to small and middle market private funds and below-market-rate (or concessionary) returns but now it is has widened to include the issues at a larger scale.
2. Easy and efficient funding for non-profit organizations.
3. To promote Impact Investing and also to employ the same rigor underwritings same as applicable for any non-Impact Investing.
4. Social and environmental challenges are dealt with ease through investing to carry out a positive social impact.
5. Identify new job opportunities for the people.
6. It can have an edge in negotiating PE (private equities) deals in which non-impact counterpart lacks.
7. It can offer to lock in a company’s long-term mission and also to amplify its spread.
8. Microfinance loans are helping small business owners to expand their business and more often women are beneficiaries of such loans.

“In the words of John Rogers, When I sit across the table from a founder and tell them that I am going to be held accountable for the social impact of the investment, a light goes on. That’s a real competitive advantage.”

Myths about Impact Investing

1. Impact investing means lower returns: it is a misconception in the mind of the people that they need to sacrifice profit for Impact Investing. There might be many situations when one makes concessions when it comes to returns. The  GIIN and Cambridge Associates released a report in 2015 “The Impact Investing Benchmark” which reveals that the impact investors were getting returns more than their expectations. In 2016, GIIN, JP Morgan, and the Impact Investing Programme released report annual impact investor survey in which it was revealed that 99% of the impact investors got results better than their expectations. Impact investing companies are becoming the iconic brand with the time because of their financial performance and social impact.
2. Only rich have access to Impact Investing: it is true that many high net worth investors have taken the step in the area of Impact Investing but now Impact Investing has a wide scope which is creating on-ramps for various range of income levels. Example- Calvert Foundation which is offering different investment options starting from $20 so that more investment could be made by individuals.
3. Impact Investing market is limited to only “do-gooders”: there is a broadening in the tent of Impact Investing market which means that in last few years world-class investors such as Bill Gates, Vinod Khosla, BlackRock have jumped in this game.
4. Social enterprises are backed by small investments: this is not true that there is an only small investment in impact market. There is a gradual increase in the investment level as the time passes. The GIIN releases report every year which shows an increase in the investment level.

Top Impact Investing organizations working in India

India is one of the most attractive places for impact investors because in India there are many social problems which are still prevalent and need to be taken into consideration. Impact Investing is showing rising altitudes every year. In 2015 there was a turning point in Impact Investing when investment touched $1-billion mark and in 2016 the investment totalled $1.1 billion in India. Some of the top impact investors are:

1. Aavishkaar: It was founded in 2001 with the fund of 5,000 USD and now it has a fund of 500 million USD. It focuses on catalyzing India’s underserved regions through entrepreneurs by providing them with capital which helps in building sustainable enterprises. It covers almost every sector like healthcare, education, agriculture, dairy, water and sanitation, technological assistance, micro-finance and financial inclusions. Aavishkaar has the aim to back 300 startups across many emerging economies with a low-income population. It includes portfolio companies like Milk Mantra, Ulinks Organics, Zameen, Mera Doctor, Raya Dairy, Vaatsalya Healthcare, Mela Artisans and Waterlife.
2. Omidyar Network: It was started by Pierre Omidyar, Founder of eBay. It invests in both for-profit and not-for-profit organizations. It focuses on key areas of education, citizen’s engagement and property rights, consumer internet and mobile. Its portfolio companies include Bangalore-based enterprise Vistaar, Mumbai-based foundation Dasra, and Akshara Foundation.
3. Unitus Impact: It is a venture capital firm investing in businesses that improve the livelihood of the poor in Asia’s growing economies. It focuses on addressing market inefficiencies by improving the supply chains to carry out better opportunities for poor and to provide essential goods and services to the consumers. Its portfolio companies are Ruma, Mya, Kinara, Micro-benefits, and Mobivi.
4. Acumen Fund: It was incorporated in 2001 with an idea to raise charitable donations that allow it to make long-term debt or equity investments in companies which are in their early-stage and providing easy access to agricultural requirements and markets, healthcare services, housing, safe drinking water, quality education, clean energy to low-income consumers. Its portfolio enterprises are Labournet, Asian Health Alliance, Avani Bio Energy and EduBridge.
5. Khosla Impact Fund: It was founded by Vinod Khosla, Founder of Sun Microsystems. This funding body helps those investors who are passionate about solving socio-economic challenges by introducing new ideas and trying to apply science and technology to the problem-solving process. It primarily focused on helping for-profit organizations which are working for the welfare of the bottom half of the world’s economic pyramid such as farmers, small businesses as well as low-income labourers.

Conclusion

Impact Investing aims to provide easy and required amount of investment to the entrepreneurs and the businesses whose aim is to deal with emerging social and environmental challenges. Impact Investing is connecting investors with their wealth and their wealth to the present social and environmental issues. Sustainable development is an essential requirement in the present day world because by observing the conditions of the environment and depleting natural resources, it is clear that the coming generation will be falling short of natural resources. Impact Investing is a good idea to promote sustainable techniques. It is also creating new opportunities for the people. A large population of India is facing the problem of poor sanitation, healthcare issues, access to education and so on. Impact Investing helps companies and organizations in solving socio-economic issues by providing financial assistance to the entrepreneurs who are passionate and enthusiastic about dealing with social and environmental challenges. All possible ways must be adopted to create awareness among the people about the idea of Impact Investing.

The post All you need to know about Impact Investing appeared first on iPleaders.

This article is written by Ramanuj Mukherjee, CEO, iPleaders.

When I visit a law school, I usually get asked a particular question. Last weekend I visited National Law University, Orissa to judge a startup pitching competition, as a part of their Google Startup Weekend program. I was expecting more questions about entrepreneurship, but the question I inevitably got several times was this: ‘Sir, I am in 2nd year. If I have to get into a law firm like Trilegal, AZB or SAM what should I do?

Sure, it is a law school after all. The dream job is, of course, to work in biglaw. Where else do they pay college graduates 1.5 lakh per month! It’s the pinnacle of success, the law school dream come true.

I realised while I answered this question a lot of time orally, I am yet to write a specific article about what all things you should do in law school to maximize your chances of making it. I have written quite a bit about how different aspects of how to get into a law firm. For example, a beginners guide to law firm interview, how to tell if you are ready to work at a law firm, how to prepare for law firm interviews, even what not to do in a law firm interview, what are the areas to focus on in order to be an attractive hire for law firms, important skills to cultivate, why it is so important to find your passion in law school and pursue it, how I quit a law firm job to chase my dream and a lot of other stuff like that.

It is now high time I write one simple guide on what are the steps you can follow to drastically improve your chance of getting a job at a tier 1 law firm. This article is primarily based on my experience on guiding hundreds of students who have gotten into tier-one and tier-two law firms in last 7 years.

Who are the big law firms?

Before we dive into anything else, let me tell you which are these big law firms.

AZB & Partners

Shardul Amarchand Mangaldas

Cyril Amarchand Mangaldas

Khaitan & Co

JSA

Luthra & Luthra Law Offices

Trilegal

There used to be 6 of them, but then Amarchand Mangaldas split and increased the number to 7. These law firms offer great work opportunities, good training in initial years, fantastic brand name and a starting salary upwards of 1.5 lakhs per month as of 2018.

Remember that there are some other law firms that pay as much or even more. However, those firms hire far fewer than these behemoths.

Those firms are:

P&A Law Offices

S&R Associates

Talwar Thakore and Associates

There are a few firms that come really close to the Big 7 in terms of fresher salaries, and are a little easier to get through. If you prepare for the Big 7, and prepare well, then even if you miss Big 7, your chance of landing into one of these will be very high. I hesitate to call them tier 2 because they are almost into tier 1 in terms of fresher salaries and learning opportunities. Here are they:

Desai & Diwanji

Nisith Desai Associates

Wadia Ghandy

Majmudar & Co.

Platinum Partners

Bharucha & Partners

Tatva Legal

Argus Partners

Finsec Law Advisors

If I missed any law firm which pays as much or more, do let me know. I will be happy to update the list.

How is it different for top tier NLU students and others

There are some NLUs, the top 5-6 of them to be precise, which have a very huge advantage when it comes to getting a job at a big law firm. It does not mean that others do not, or cannot get a job at big law firms. However, for these NLUs it is just a little more easier.

I know it because I was at NLU. I didn’t intern in a law firm in my 4th year. In fact, I never had to do an internship after I finished my 3rd year. I was doing my own work instead, having started iPleaders as a legal risk management consultancy, and then BarHacker later on. I wonder if I did that in a tier 2 or tier 3 law school, whether I would still have 3-4 options to join big law firms. I got that opportunity because I studied at NUJS and I was towards the top of my class.

What is this advantage exactly? Basically, big law firms visit a few law school campuses every summer, for an event called Day 0 interviews, where they pick up the top talent from these particular law schools.

To my knowledge, these are the law schools with Day 0 campus placement events that actually get attended by Big 7 law firms:

1. NLSIU Bangalore
2. NUJS Kolkata
3. NALSAR Hyderabad
4. NLU Jodhpur
5. NLIU Bhopal
6. GNLU Gandhinagar
7. NLU Delhi

Note that sometimes colleges like Jindal Global Law School, Symbiosis Pune, or Nirma University, GLC Mumbai, etc. have been known to manage to get a few top law firms to visit their campus and recruit. Statistically, the numbers are however, insignificant and such recruitment may not take place every year.

It is not that all students in the to NLUs have a great shot at landing a job at a Big 7 law firm through campus placement. Usually only top 10-15% of the class have a real shot. Rest get rejected at CV shortlisting stage. Top 10 rankers usually get multiple offers.

For the rest of the batch in even these top law schools, which is a large majority, as well as those from other law schools, the only way to make into these big law firms is through internships. If they can impress the firm during the internship, they may be given a chance to appear in an interview for PPO. If they are liked in that interview, they are picked up for a job.

For most law students, campus placement is not an option if you are looking at getting into a top law firm. Your real shot is through a PPO unless you are within the top 10-20% of your batch at a top NLU.

If you are a top ranker in one of these law schools, it is not like that you do not need to prepare. You still need to prepare, not only to land the job, but even to sustain in the job. The number of people from top law schools who join top law firms, and then quit on their own or are eventually fired are way too high. It is not something nobody likes to talk about, but if you make some discrete inquiries, you will understand how common this phenomenon is. Also, in every law school 5th year batch, there are some academically bright students who somehow missed the bus and didn’t make into a top law firm despite wanting to do so. Later on, of course, they claim to have never wanted to join a law firm in the first place.

So be careful, if you do not prepare,or don’t take timely action, you may not just walk into an interview and crack it just because of your academic records. You can skip a large part of the work where others will slog at internship after internship, knowing that these are their only chance of landing a job, you have this additional avenue of campus placement.

Nonetheless, everybody needs to prepare, and while a handful of law students have a bit of advantage, others have a clear shot too, provided they are ready to put in the required work.

What are your advantages and disadvantages

You need to quickly figure out what are your advantages and disadvantages. Once you know this, you can work on turning around your disadvantages, and playing according to your strengths. However, doing this assessment dispassionately and honestly is critical. If you lie to yourself about your disadvantages, or overestimate your advantages, or even underestimate your chances and give up prematurely – none of that is of any help. You need to keep in mind while doing this exercise that you can overcome every disadvantage. provided that you can recognize them, have the courage to acknowledge, and admit them. Then you can work on them so that you rise above the hoi polloi.

The pursuit of getting into the top law firms is not easy. It requires a long term strategy and steady execution of that strategy. Most people do not have the discipline to execute it. It is not about how much talent you have, but how much you develop yourself and how gritty you are in the face of setbacks.

Here are the usual advantages you need:

#1

Perfect English – ability to speak, write and communicate

If you don’t have good knowledge of English, it is very bad news. You need excellent English to be even considered for a top law firm job.

Once Prof. NL Mitra, former VC of NLS Bangalore and founder VC of NLU Jodhpur, who also worked as a partner in Fox and Mandal, a corporate law firm, told me that law firms hire NLU students primarily for their language skills. Their ability to write skillfully, interpret law and judgments written in complex language easily and write complicated language at times which may be necessary in the profession at times.

I didn’t join NUJS with great English skills to be honest. I had studied in vernacular medium schools till I joined law school. I could not speak English at all, and my vocabulary at first was quite weak. It took me a lot of time to read and understand English. Before NUJS entrance test in 2005, I spent a lot of time improving my English. I spent hours and hours in deliberate practice, learning new words, sentence structures, reading English books all the time, watching English movies and repeating the dialogue to myself, even mugging up a dictionary – I worked very hard over my English. I still had to work a lot through my law school on my speaking and writing skills.

You may have to do it too. But by the time I was appearing for law firm interviews, or even going to law firms for internships in my 3rd year, I had started to think in English, dream in English, spoke exclusively in English (I decided to not speak in Hindi or Bengali at all in college, no matter how much people made fun of my strange accent and choice of words) and wrote good English, very fast.

It was, therefore, not a barrier at all. If you think English may be a problem for you, begin to work on it. If you do not have any problem with the language as such, still make an effort to weed out common mistakes from your English writing.

Way too many students get rejected at the level of CV selection and interview due to wrong English.

If you want a job in a law firm, you must be able to speak and write impeccable English, otherwise you try to make a career in litigation which is much less demanding in this front.

#2

Proximity to law firms, courts, arbitration institutes etc.

When I visited NLU Orissa, I saw the High Court of Orissa in Cuttack on my way. I asked the student accompanying me if they regularly go to the court and apprentice under lawyers. The answer was in the negative.

I was shocked.

Proximity to a HC, law firms, tribunals, other institutes where you can learn any kind of legal work is the biggest advantage you can have as a law student. If you manage to regularly go to such a place for a few hours every day, you will absorb tremendous knowledge, develop a fabulous professional network and face value, and understanding of the legal system that is hard to come by. Such experience is invaluable. You will be selected over your peers who do not have such experience any day, and you will outperform others easily if you go to a law firm for internships in your senior years with that kind of experience and insights.

Students in NLU Orissa told me that their curriculum is too hectic to regularly go to the court. There must be some issue there, but I can say that I would have moved heaven and hell to avail that opportunity if I was in their place. It can make all the difference.

Even a student from a local college, without knowing anything else, takes advantage of ths proximity, they can get a job at a big law firm by the time they graduate.  They can start by attending court over the years, gather knowledge and insights about dispute resolution system, begin to intern at small law firms in bigger cities eventually and then gradually progress to big law firms with the right recommendations.

Students of GLC Mumbai, CLC Delhi, Rizvi Law College Mumbai etc frequently make it into big law firms, thanks to the fact that they often end up interning round the year after their classes are over. This gives them a huge advantage in terms of getting jobs compared to even NLUs. They do not really need campus placement because their good students intern with law firms already and if they are impressive, they get PPOs.

For a law firm to notice you, and value you, you need to intern for a long time. You need to become a known face in the office. That does not happen easily with an one month long internship. The worst are of course two weeks internship. Even if you manage to get only one month internship, see if your partner will let you extend the internship. Then see if they will be happy to call you back for your next internship break. Keep working with the same people over a period of time, that increases your chances of landing a PPO there.

Note that you will get extensions of internship, or a call back to do another internship only if they find your work good and they want you around. Otherwise they will politely say we want to give an opportunity to others also, and reject your application for another repeat internship or even extension.

Colleges that are located in cities like Delhi, Bangalore, Hyderabad, Chennai, Kolkata or Mumbai, there students have the option to do rolling internships. They would better stick to a law firm for 6 months at least, even if they have to go to the firm at 5 pm in the evening after class and stay back till 10 or 11 pm.

Trust me, that hard work will take you much further than applying to hundred places, topping in your class, winning hundred moots and debates, or such common things people do.

3# Practical Knowledge and skills

So what can you do so that law firms like you so much that they want you to stick around although there are thousands of new applicants every month?

That has to be how amazing you are at the work that you do. And your long term commitment and loyalty towards the firm.

The 2nd one is probably easier to demonstrate when you get the opportunity. But how do you ensure the first?

To be honest, law schools do not prepare you for this part at all. However, this is the most critical thing once you land an internship.

To excel in a law firm internship, you need the following knowledge and skills:

1. Research skill – associates will ask you to look for case laws, points of law, interpretations and so on, while they do the research themselves also. When they see you have found something relevant that they haven’t, they will be impressed and give you more work. If you do a shabby job, they make a mental note to never give you work again.
2. Understanding of contract drafting – so that you can assist associates by providing important value additions and suggestions when they ask you to proofread the contracts they draft.
3. Diligence and patience – when you are asked to proof read, if you do a great job at it, associates notice that and give you more work. No work is too small. When you do it very well, you will be entrusted with more work and next level work.
4. If you are in the disputes team, your legal drafting skills can get you brownie points as you will be able to give very good first drafts to the lawyers and reduce their work.
5. If you are in a transactions team, then your knowledge of due diligence can make a world of difference. Such knowledge and skills are not expected from you, but if you have it, and do a good job at it (due diligence is easy work intellectually, laborious in terms of volume), you will set yourself up for a definite PPO unless you do a blunder somewhere else.

Think of internship like a test driving. The firm gets to test drive you. Are they going to be impressed?

There are some law students who think they will go to an internship and learn. That is just stupid expectation. Nobody in a law firm has time to teach an intern unless they know that intern is going to stick around for 1 year maybe. Internship is not a place to learn, it is a stage on which you perform. So prepare before you go.

How do you prepare?

If you are going for an internship with the transactions team, do this M&A, Investment Law and Institutional Finance course.

If you are going to work with an in-house legal team, litigation team in a law firm or going to work in a law firm but not very sure about which team yet, then go for this business laws course.

If you are interested in practicing in the area of technology law, go for this cyber law course.

If your interest is in IP laws, or media and entertainment focused practice, opt for this Intellectual Property and media law course.

If you want to impress people with your knowledge about arbitration, this is the course on arbitration law.

If you feel that your company law knowledge has to be fortified, this short term company laws course is the solution.

If your area of choice is tax law, and you are going to work with the tax team (unusual but very wise choice), you better learn the practical stuff around corporate tax from this course.

PPO during internships v. campus placement

Getting a PPO is a more sure shot way to get a job in a big law firm. Aim for it even if you are in a top 3 law school.

Campus placement has some inherent disadvantages.

If you get a job from campus placement, you don’t know which team you will end up in, which partner you will work under, if you will fit into the culture of the firm, if you are going to like the people you will spend most of the hours of the day with. Campus placement is how you land up in the wrong job and regret.

You can avoid that totally by landing a job through internship converted into PPO. If you don’t get that, then by all means try to get a job through campus placement.

Let’s say you want to work in corporate tax. Or M&A specifically. Maybe competition law. You can intern in those teams and get a PPO from your team. Then you can ensure you will work with that team only.

If you are selected through campus placement, nobody can say which team you will be allocated to. And you have no say in that. Asking for a day may result in you not getting that job in the first place.

Getting a job is one thing, keeping the job and excelling in it is the real deal. PPOs have a huge advantage when it comes to that, because you know a team, have good rapport, there is mutual appreciation before you are hired. The likelihood of success is much higher here.

However, keep in mind that getting hired through PPO is going to be tougher and more work.

What is the right time to start working on getting a job?

The timing is very important.

Remember that as far as top law firms are concerned, it is very difficult to get a job towards the end of your final year. In fact, it is next to impossible because the seats are filled up much earlier. So if you wake up too late, your chances of getting a job in a top law firm in that year in miniscule.

You have to get a PPO towards the end of your fourth year, or right at the beginning of your fifth year if you are in a 5 year law course. If you are in a 3 year law course, then you have to land a PPO by the end of your 2nd year or beginning of 3rd year, not at the end of your 3rd year.

This is where most law students make a huge mistake. They delay the beginning of their preparation.

If you have to get the PPO at the end of your 4th year, when should you begin preparing? Of course, your best internships where you land a job at a top law firm has to be in your 4th year. In the 4th year, if you are in an average law school, you will get opportunity to intern 2 or 3 times. Ideally, these internships should be based on callback internships. This means that you have done really good internships in your 3rd year, and then you got called back in your 4th year based on stellar performance in 3rd year.

If you have to do well in 3rd year, you have to land good corporate law internships in top law firms. For that you need to have a good CV, ideally one with good internships in tier 2 or tier 3 firms, with experience of doing good corporate law work. Else you need someone who is impressed by your work and will recommend you to a good law firm.  

Someone who doesn’t start preparing by 2nd year of law school on corporate law subjects may find it hard in 3rd year to land desirable internships. They will land those in their 4th year. And by then it may be too late.

If you look at the people who get through the top law firm jobs, you will find that most of them had done good corporate law internships in their 3rd year, which was the foundation on which they managed to get their PPO.

In reality, however, you are not taught commercial law subjects such as company law in your second year. Usually subjects like CrPC, CPC, IPC, Evidence Act gets covered in your 2nd year. Unfortunately, these subjects have next to no impact on what you are trying to do.

Mostly, big law firms, and even tier 2 law firms, do not want to take 2nd or 3rd year law students at all because they have no knowledge and no skills to help the associates.

You need to overcome that by learning the relevant skills and knowledge on your own initiative. Also, you need to demonstrate that knowledge by writing articles and blog posts on commercial law that you can showcase on your CV. This would help you to score early internships where your batchmates will not even be considered.

The right time to start working in my opinion is as soon as possible. If you can start by doing online law courses like these in first year, that will equip you to research, write, and even get recommended to good internships. That’s the starting point.

If you didn’t start in your first year, then the next best time is as soon as you can. 2nd year is not at all a bad time to start either. However, 3rd year onward, you are late and losing opportunities if you delay preparation. It is never too late to take the right course of action, just that you start behind in the race. You can always overcome that with a few years of hard work. Just remember that people who start early have a huge advantage.

What do you need to do before you start playing the game?

Make a list of things you need to do from now till you get a job. Out of that what will you do over the next one year? Write than down. Then decide what all, out of that, you will do in the next one month. Then decide what you will do today.  

This is a very effective way to plan your activities.

Even the first step will be an eye opener.

Just write down all the things you will need to do from now on to get a job in a big law firm. What would you learn? What courses will you do? What should be on your CV? Where all will you intern? What sort of mentors will you seek out? Who should recommend you? How will you impress them and network with them so that they will want to help you? How many articles will you write? What will be your area of focus, that one law subject that you know really, really well?  Give yourself 2-3 hours to make that entire list.

Before starting to take actions, make that list. You can add things to that list later. As you do things, check them off.

Also, I will strongly recommend that you must get into a program from LawSikho.com – ideally a 1 year long diploma program. Doing it is difficult, but doing it all on your own, without a coach, without any guidance and motivation is ten times more difficult. Once you are part of a systematic training program, you learn things faster, identify the problem areas quickly and address them with help of experts, and move forward. It gives you a huge advantage.

What are the soft skills you need to develop?

Getting a law firm job is not all about hard skills or legal skills. You need to sharpen your soft skills first. This will help you not only to get a job at a top law firm, but literally any job at all.

What are these skills?

1#

Research

Number one is research. Build a habit of researching people and organizations of interest. Find out things about them. Stalk them on social media. Find out what are they excited about. Find out if you have something in common with them. Find out if they are organizing an event where you can help or contribute. What are the values they swear by? What are the cases they are really proud of winning? Where do they blog? What advice do they give to young lawyers? Have they given any lectures that have youtube videos you can watch?

There is a lot you can find out about people and organizations

It’s not only legal research that is important for a lawyer. This kind of research is going to come handy even after you get the job and begin to work as a lawyer.

2#

Networking and relationship building

Number two is networking and relationship building.

Build rapport with people. Impress the relevant people. This is the beginning of creating your professional network. You will need their help. Why will they help you if they do not like you? Do not pester them. Be agreeable and charming. Be helpful. Be original and interesting. They will notice you and like you. But before doing all that, figure out who are the people. I advice our students to identify 30 people who they would like to impress over the next one year. You need to select people carefully.

Let’s say you want a job in tax team of JSA or a similar big firm. If I was in your place, I will not only try to impress tax lawyers from JSA but all the other firms. I would also add some independent tax law practitioners and boutique tax law firm partners to my list. Maybe even some important young authors on tax laws.

Thereafter, throughout the year, I will share important updates with them that they will find useful and insightful. I will attend the events they attend, and if possible try to present a paper there. I may even volunteer to help the organizers of such an event, which would likely give me access and privileges.

Most people do not go to such lengths to build their professional network. However, building the professional network is a critical aspect of succeeding as a lawyer. If you find this hard, how are you going to find clients for your practice? When and if you make a partner in a law firm one day, you will be expected to bring in work for the firm. Are you going to be able to do that? That will be determined by your networking skills.

Hence, it is critical to learn to network while you are in law school. Not only will this help you to get the job of your dreams, but it will build a habit that will go a long way in making you a successful lawyer.

#3

Communicate effectively

Number three: communicate effectively. You must learn how to communicate for results. Way too many law students communicate in a very lousy manner. If you are able to communicate well, it immediately sets you apart.

Initially, most probably you will communicate with people over email and social media. A little bit on the phone eventually. Later, you will begin to meet people. You will be working with others in a law firm environment, which happens to be quite a high pressure environment. You need to learn to communicate in all of these different environments.

One key communication skill, the mother of them all, is to develop your listening skill. Listen intently, with 100% focus, as if nothing else exists in the world. By giving anyone your 100% attention, you honour them and they will begin to like you. Apart from that, you will begin to understand what they actually want apart from what they are saying.

Non-verbal cues, and what people leave unsaid is often as important to understand as what is actually said.

#4

Persuasion

Are you persuasive? If yes, then you know the importance of subtle persuasion as opposed to overt logical appeal. Being persuasive is a huge asset for a lawyer. Not only will it help you to get a job, it will also help you to get noticed as an up and coming lawyer.

The first step to persuading someone else is to be open to persuasion. You have to be open yourself, for the other person to open up so that persuasion can take place.

#5

Clarity

Does your communication has clarity? Are you able to communicate clearly, succinctly, with precision? Do people get what you say at one go or do they seem confused? Do they have to ask you more questions?

Learn to communicate clearly. But that will only happen when you yourself seek clarity. Make sure you are clear about everything, and do not allow obfuscation or vagueness in your own understanding of things. Lack of clarity is enemy of success. Kill it every day by getting 100% clarity wherever you notice any vagueness.

#6

Collaboration

Can you collaborate with a team? If someone delegates work to you, how reliable are you? Can a lawyer or a client count on your words? How do you receive feedback? Do you learn from criticism or take it badly? Does negative comments crush your confidence or do they motivate you to perform better? Are you straight and empathetic towards your team members and boss? Do you have their back? Do you look after their interests? Are you loyal? All these things determine if you will succeed in a team, therefore, how well you will do in a law firm. If you do everything else perfectly but fail in this count, that is not going to be enough.

I was a bad team player when I graduated. I did get a job from campus placement, but I had a real tough time when I began to work because I didn’t know how to collaborate with people. I was extremely competitive, and had no sense of how to collaborate, which I had to learn once I became an entrepreneur, through one tough lesson after another.

Learn to collaborate while you are in law school, or you will be in trouble sooner or later.

#7

Sociability

Lawyers need to be sociable to succeed. You maybe be very successful in networking, because it is methodical hard work, but still lack sociability. The test is simple. Imagine an important foreign client is in town. Your boss had to take him out to a dinner. On the way, he falls sick. Can he trust you to take his place, that the important client will appreciate your presence, and enjoy the evening?

Yes, you need that kind of charm to work successfully in a big law firm, so start working on it.

#8

Ability to learn and adapt quickly

This is one of the biggest and most essential skills for a junior lawyer. You rarely get a say as to what should be your practice area or which team you work for. In some firms you are even circulated around in different teams. As an intern, you have no choice over which lawyer or which team gives you work. You might get bankruptcy related work, or M&A and then banking and finance on the next day. Then in the 2nd week you may be totally caught up doing some work for the competition law partner.

You need to be flexible. You need to adapt. You need to be able to learn any area of law very quickly.

#9

Follow up

This is an underrated but very valuable skill. As an intern and as a junior lawyer, follow up skill can save your life and make your career. I know people who got an internship after 17 follow ups. Are you ready to do that? 99% will give up after 3rd or 4th follow up. Whether you regularly get work during an internship, whether you have a good and engaged professional network or a petty one, many things depend on your follow up skill.

What are the hard skills that will help you to get and retain a biglaw job?

Legal Research

This is the most basic of all legal skills that a competent young law student or a lawyer will be expected to have. You need to be able to look up all the relevant provisions of law, find judgments that back your legal position or even goes against it, source the correct templates, find important regulations and notifications.

Most of the work you will get as an intern will be related to legal research. Your performance with respect to such research is critical. It is not only about finding the right and complete information, what also matters is how fast you find and how accurate it is. If you are not used to doing legal research, you will find it hard to even make sense of things let alone finding all the relevant laws.

Source of information is also critical for lawyers. As lawyers, we cannot just take any article or news on its face value. We can use such sources for basic understanding or initial information, but ultimately we need to find the answers through authoritative, binding sources such as statutes and decisions by High Court and Supreme Courts.

Legal research requires you to be able to articulate a legal issue, understand the underlying questions, place it in a legal context and then look for the right sources. To find the correct answer quickly, you need to know where to look. This comes from practice.

Let’s say I ask you to tell me what are the laws in India that deal with banking fraud. Or this complex situation: a bank is trying a recover a defaulted loan by selling off some land that was provided as security while taking the loan. A buyer approaches them to buy the land at half the price, and such price will cover the dues to the bank. Can the bank sell it off to this buyer? Or do they necessarily have to follow some other process.

Try to find the answer and justify the same with authoritative sources. If you can do it, you know how to do legal research at a law firm.

Then, you should sharpen it by frequently doing such research and writing a lot of articles. If you cannot do such research, sign up for a diploma course on lawsikho.com.

It is not going to be very hard to get a PPO without excelling at legal research.

Due Diligence

In the first couple of years, law firm associates spend most of their time by doing due diligence for various transactions. When you manage to bag a job, they will throw you into a due diligence or two as soon as such projects are available. However, when you are a law student, just interning at the law firm, you are not expected to contribute much to such a project.

However, overworked junior lawyers are always looking for help. They are going to be more than happy if you can help them out. It is going to earn you allies within a law firm. Also, people will be darn impressed.

Learn the due diligence process. Learn every step of it. It is going to make a world of difference to your prospects of landing a PPO. Do not be hasty, though. Have patience and wait for the right moment to show off these amazing skills.

Drafting

Nobody in big law firms expect a first year lawyer to be able to draft contracts particularly well (it is quite different at smaller law firms though)! Interns, definitely not. Nobody is going to ask you to draft a contract while you are interning. Still, we recommend you learn to draft contracts while you are in law school. Why is that?

Because you will certainly be asked to proofread and format contracts already drafted by lawyers as an intern. If you do a great job at proof reading, plus while turning over the contract can suggest a clause or two of your own, or point out any problem that may arise while negotiating it, then you will impress the lawyer so much that they will keep an eye out for you. This is what I ask my students to aim for.

Negotiation

It is not something you will get to do anytime soon even if you get through a law firm. Junior associates wait for years before they are allowed to negotiate, that’s how the law firm hierarchy works. Contrary to that, you get to do all such work much earlier in a smaller law firm.

You should learn negotiation anyway, but don’t expect to get to do it in an internship at all. Still, knowing the process and how it is done means that you will be able to understand the work that is happening better, and be able to put in a suggestion or two somewhere than dazzle your seniors. In any case, you will be able to do your regular research much better in any case.

Critical Legal Thinking

This is the ace up your sleeves. This is what lawyers value the most about themselves and also in people they want to hire. If critical legal thinking shows through your research, memos you draft, suggestions you give – that’s it. You will be earmarked and scooped up by any law firm. It is rare commodity. Develop it.

For this, read legal blogs like this, and write and publish yourself too.

What should you learn to stand out head and shoulders above other aspirants?

Law is a profession of the experts. This is one profession where more knowledge you have, more valued you will be.

What sort of knowledge should you have?

I cannot, obviously, give an exhaustive list. No such list exists. I can however indicate the kind of knowledge you should attempt to acquire.

Let’s say your target is general corporate, M&A or Venture Capital or Private Equity teams, which are the largest teams that frequently take in a lot of interns.

Following knowledge will be of immense help:

• Why do M&A transactions take place? What are the usual commercial motives behind them?
• How are M&A transactions structured? What about the tax aspects?
• How to read a balance sheet
• Important clauses in a Shareholders’ Agreement, Asset Purchase Agreement, Share Purchase Agreement, Business Transfer Agreements, LLP Agreements, AoA, MoA, JV Agreements, Acquihire Agreements
• What are the various stages in an M&A transaction
• Concepts such as slump sale, leveraged acquisitions, convertible notes, VC and private equity investments, angel investments, hostile transactions, PIPE transactions etc.
• Regulations such as Takeover Code, Listing Obligations and Disclosure Requirements, FEMA regulations, FDI policy  
• What role does lawyers, bankers and other professionals play in the whole process?
• Role of courts in mergers and demergers
• Employment issues, regulatory and tax issues, promoter earnouts, laying off workforce after M&A, ESOP transitions, competition law aspects
• Delisting, SPVs, Tax havens, credit facilities, term loan agreements
• How to create security documentation, charges, enforce security for default etc.

I could go on and on.

But basically, there is a lot to learn. The more you know, the more you will shine during your internship.

It is not possible to know a lot of different areas of law so well when you are in law school. But you can certainly have that kind of knowledge about at least one area.

Once you have managed to have such deep and wide practical knowledge about one large practice area of a law firm, you will benefit from learning one more smaller area of law at least – such as Insolvency and Bankruptcy Code, companies act, competition law or arbitration.

The large area would take at least 1 year. Shorter areas could be done in 3 months.

Learn to draft important transactional contracts

Whatever you may learn, make sure that you learn to draft the most common and important contracts in that area. For M&A that is Shareholders’ Agreement and Share Purchase Agreement. For banking that will be a loan agreement. For IP practice area that would be copyright or trademark assignment agreement, or license agreement. Figure out what it is for you area of interest and learn it.

Learn to explore regulatory websites

Whatever you may do, you must be able to quickly pull out regulatory notifications, updates, policies. This is where a majority of law students get stuck. You better learn how to navigate RBI, SEBI and MCA websites.

How can courses help you in preparation?

Most distance, online or classroom courses will not help you with this quest.

You need a course prepared by industry insiders –  people who have done this sort of work and knows really what goes on. It is also difficult to learn by simply reading. You need to do exercises. Look for courses that will provide you regular assignments, and then provide you feedback on how to improve.

Let’s say you are trying to get good with M&A and investment laws. Great. Chose a course where they will teach you how to do due diligence, bot only by providing study material, but also by letting you do hands on due diligence on a mock transaction.

What does such an exercise look like? Here is an exercise we give to our students:

Imagine Google is acquiring PayTM. Now prepare an information requisition list.

We have already taught you how to prepare an information requisition list, and even given a sample/ template to work on. You have no idea how much you can learn from such an exercise.

Preparing such a list is actually a part of a real transactions that all junior M&A lawyers have to do. Interns are asked to help with the same. What if you knew exactly how to do these things? That is what you need to work on.

How to land the important internships?

After you learn all these, what is next?

To show off your stellar skills, you have to get an internship first.

It is very hard to get an internship in a big law firm simply by sending applications to them.

If you just send across a mail with your CV attached and hope to land an internship, you have one in 5000 or even less chance. An HR manager from a top law firm told me that they get 70-80,000 applications for every month during summer vacations and 20-30,000 for the other months. They do not even bother to open more than 200 or 300.

They need 30 interns every month.

Many of the slots are filled through recommendations from partners, associates and valued clients. Some come through college placement cells.

So how do you get a break?

Of course, the easiest and the most sureshot way is to get recommended for an internship by a partner or a senior level associate.

Otherwise, your chance is next to nil.

How to get recommended?

How can you get recommended by a law firm partner, or a successful, sufficiently senior associate in the firm? The answer is not your father being friends with them, or your uncle being an IAS officer, although those things help.

The answer is that you have to impress them with your knowledge and skills. They should want to help you. How can you do that even before getting an internship?

Write amazing articles that they will read. Add them on LinkedIn. Find out ways to impress them. Invite them to events, and if needed create an event just to invite them. There are hundreds of ways to impress, but my favourite way is to write articles. It always worked, for myself and for every young law student I ever helped.

Also, see if there are any dynamic teachers in your law college with deep links in law firms. They may have former students who are doing well in big law firms. They may be willing to put in a good word for you if you are worth it.

Hence, first put in effort into being worthy, and demonstrate the same. As your teachers, batchmates, immediate circle and eventually the larger legal world become aware of what you are upto, doors will open.

For our students, who do well in the class, we always introduce them to good law firms. Most law firms are very happy to take on our students for internships because they know we are the only organization to teach the kind of stuff we teach.

How to ensure that your CV gets picked up at the first glance?

Even if you get recommended, you still need to make a great CV and apt application. Make sure that both are crisp, to the point, and very impressive. They need to be coherent, without any mistakes and tell a story that fits the requirements of the firm.

If there are mistakes in your CV or application, especially language errors, you will probably be ignored despite the recommendation. So be very careful.

CV and cover letters are marketing documents

Firstly, remember that both CV and covering letter are nothing but marketing documents.

Do you have any idea about how advertising industry chisels everything that the you are going to see, say, in a print advertisement? They even test which words or phrases are getting more attention.

They thoroughly think through and then test what kind of language is more likely to make the reader take intended action.

You should have the same approach to writing your CV. When you are writing your CV, you are a copywriter too.

No one has time to read your CV, but they may look at it

Please remember that no one is going to “read” your CV or cover letter. They are just going to look at it.

That’s your chance – you have to make an impression at the first glance.

If the first glance suggests that there is something interesting or promising about you, then the person will skim through the CV. This is why you must write in a manner that is suitable for skimming.

Bullet points are often better than long sentences. You need to plan the sections in the CV in a way that makes it very easy for the potential employer (more likely a person just sorting the CV) to find the relevant information.

This is why, the right sort of formatting is very important. Also, try to keep your CV within 2 pages. 1 Page is not bad either.

Here is a bunch of CV and cover letters provided by the career services department of the Harvard University, and I think these are pretty good models to follow.

What are the main sections in your CV?

You will have two main sections in your CV – Experience and Education.

Which one comes first will be determined by which one is stronger.

For students usually education will come first. Please provide your percentage, rank in the class, whether you are in top 10% or top 20% – because that information is relevant unless you are applying for the job of a manual labourer.

If you don’t tell me anything about your academic performance, people will assume the worst – that you are probably a slacker in academics. Provide the percentage, class rank etc unless they are terrible and not worth mentioning at all.

Also, even if you are a student, you must obtain some work experience to write in the CV. It is ok if you have done unpaid community work, or even played an important organizing role in your college fest, or worked at the Legal Aid Clinic: all of that counts as valuable experience.

For Big Law firms, try to show some internship experience in corporate law. If you have already interned at another big law firm, it is easier for them to say yes. If you haven’t but worked at 2-3 tier 2 law firms, it is still worth giving you a shot.

If you have none of the two, you need to have something else in your CV which is highly redeeming. Example: a few published articles on various areas of corporate law with impressive titles.

Many students make the mistake of including articles that they have written on irrelevant subjects. That does not help. If I am applying to an IP law firm I need to include IP law articles that looks interesting. If I am applying to a big law firm and hoping to work in corporate team I will mention articles about commercial laws – maybe competition law, M&A, banking or insolvency.

What if you have published a book on a legal subject? While I was at NUJS, I had at least 4 senior who could claim that. Imagine what an impact that has when someone sees your CV. These people, of course, had something else on mind – getting scholarships for higher studies.

Do not write anything irrelevant

You must not write about irrelevant experience in your CV or cover letter.

If you are applying to a big law firm for an internship, do not write about all the street plays you have directed. Don’t even write about your internships with NGOs unless those are the only internships you have done so far.

Do not make yourself out to be an entrepreneur or journalist even if you have done a lot of important work on those areas when you are applying to an unrelated field.

Keep your CV and cover letter strictly limited to the role you want. Basically, write about other law firm internships, accomplishment in relevant papers in college, articles that show you are interested in corporate commercial laws. Never, even by mistake, include the other stuff you may have done and may be proud of.

International law firms, I have heard, prefer more well rounded, complete personalities – people with diverse interests. That’s not how it works with Indian law firms. Be very careful about this.

Is that a strong verb?

When you are writing your CV, strong action verbs are preferable to passive verbs. Don’t write “Received an award for creative writing” – it is way better to write “Published in literary magazines regularly and my contribution was recognized by ABC literary society by XYZ award” or even “initiated a reading group and managed it for the following two years”.

Here are 50 very good words to use:

1. Represented
2. Controlled
3. Coordinated
4. Executed
5. Headed
6. Operated
7. Orchestrated
8. Organized
9. Drafted
10. Oversaw
11. Planned
12. Produced
13. Programmed
14. Created
15. Designed
16. Developed
17. Devised
18. Founded
19. Engineered
20. Established
21. Formalized
22. Formed
23. Formulated
24. Implemented
25. Incorporated
26. Initiated
27. Instituted
28. Introduced
29. Launched
30. Pioneered
31. Spearheaded
32. Authored
33. Briefed
34. Campaigned
35. Co-authored
36. Composed
37. Conveyed
38. Convinced
39. Corresponded
40. Counseled
41. Critiqued
42. Defined
43. Documented
44. Edited
45. Illustrated
46. Lobbied
47. Persuaded
48. Promoted
49. Publicized
50. Reviewed

Customize

Stop emailing the same template to every possible recruiter.

Find out what is most likely to get you a great response. Find out who is responsible for selecting interns. Find out what they like and dislike. Follow them on social media. Then customize your application based on all the detective work you have done.

People who opens internship mails know all the templates, and they hate them. What kind of people can’t even draft a email on their own? We know you have been mass mailing that same email to hundreds of places. That does not make us think very highly of you.

If you are applying to a corporate law firm, do not write about your accomplishments as a researcher for a public policy institute or your short-lived career as a stand up comedian. Write about one or two best achievements that will want me to open your CV and type a response saying “confirmed”.

Your CV will be used during your Interview

Never lose sight of the fact that the interviewers are highly likely to have your cover letter and CV in front of them, if you are ever called for an interview. Some of them will give you an opportunity to resubmit a fresh CV, and some will not.  

They will ask you questions about what you write in the CV. See this as an opportunity to drive the conversations during the future interview towards the things that you want to talk about. Do not write about things you are not confident about or would not want to discuss with the interviewer.

How to outperform every other intern so that you get picked for PPO interview

It basically starts with the knowledge and skills you have acquired before you even showed up for the internship.

If your preparation is done right, you have already won the battle even before you set foot in the law firm.

For example, if you are joining the corporate team and you know all the stuff about M&A, banking law and investment law, FDI etc as described in the section above, then you are ready to conquer.

Amazing, isn’t it?

However, even if you are well prepared, you still need to execute well. And you better not be arrogant about all the knowledge you have, and your superiority over other interns etc. That will be downright unproductive and harmful.

You are just a young aspirant, looking for a break, hoping that the right opportunities come your way. Eager to work, eager to excel, eager to give 100%. That’d be the right attitude.

Do not allow any small voice at the back of your head tell you that you don’t really like it when you are interning at a big law firm.

Even if people shout at you, be polite. Accept your mistakes, be eager to learn. Be ready to put in ten times more work than anyone else.

Let nothing distract you. That’s the key.

Make sure every instruction is heard. Carry notebook and pen with you when someone calls you to give any work. Note down everything they say. Once you get the work, repeat what you understood to ensure you got the task right.

One major screw up that happens is when you get the task wrong. Make sure that does not happen.

Be quick, but not too quick. Take time to formulate your answers, your research, your efforts. Double check. Law firm is a conservative culture, where it is appreciated if you check ten times, but make no mistakes. Do exactly that. Do not hurry unless you are asked to hurry. If you are asked to hurry, still double check before turning in any work.

And please, please proofread everything you mail. Do not make any grammatical mistakes.

Often, the game is to not make any bad errors during your internship, and waiting for the opportunities to show off your amazing knowledge and skills. However, do not make egregious mistakes, or you may be written off right away. This is not what work environments should be, but that is how big law firms usually are as far a interns are concerned.

Getting work can be a challenge. Only those blue eyed boys tend to get the important work. Most interns are limited to petty work. However, when you are interning, make sure you underestimate no work, and do everything as if it is the only work you are ever going to get to show how diligent, good and awesome you are.

However, it may be a good idea to keep reminding the associates in a friendly way that you would love to get some work, and that you are free. Work around some tables and let people know that you are available and free. When you join for an internship, have the courtesy to go meet the partner in charge of your team, introduce yourself, shake hands, smile and make sure that the partner knows about your presence in the office.

One amazing trick is to email the busiest associates in the morning that you are available and free to do any work they may have. If all interns begin to do this though, it will stop working. But it is especially effective where associates and interns sit in segregated places.

You can also say hi to associates hanging out on the balcony for a smoke, or near the water cooler. You may land some work if you say hi to them, smile and generally look clueless but friendly.

After you get work, you better know how to do it.

Once some associates begin to give you work, make sure you stay longer than they do, do everything for them that you can, never leave office without asking them, and be highly dedicated to their work.

Ensure that these associates that you dedicate yourself to, are a little senior in the hierarchy – first year associates would not be able to get you the PPO. You need to catch the eye of the senior people.

It is not a bad idea to ask the associates after a first week or so: I want to get a PPO here. What would be the right thing to do? Can you advise me on what should I do for that?

You are recommended to ask that to the partner also, after a week or so. Tell him or her you really like the place and will like to continue to come back for future internships. What can you do to get a PPO here one day?

If you are well prepared with skills and knowledge, and built the right kind of CV already, and do all these things right in an internship, I do not see why you will not bag that interview for a PPO.

After that, it is all about how you perform in the interview.

How to crack PPO interviews

Interestingly, PPO interviews are easier to crack.

That is because you have already been working there for some time. You will definitely be asked about the work you did for the firm. The interviewer will check your conceptual understanding and level of contribution. So make sure you are prepared for that. Make sure you understand what transactions took place, what were the legal issues, what were the uncertainties involved, any tricky situations, sticking points, legal maneuvers, case laws, relevant sections – you better be able to answer any questions whatsoever related to the work you have done at that firm.

You may also be asked questions about your CV. Make sure that you are ready to answer any question that may be asked about the various kind of work you claimed to have done in other internships. For example, if you have written that you assisted in drafting a technology transfer agreement, be prepared to explain the facts around the agreement, what were the tricky issues, what were the important clauses, why you drafted a certain clause one way rather than in another way etc. They may even ask you hypothetical questions to test your conceptual understanding.

Here is the thing. PPO interviews are usually do not go too much into the technical side. The assumption is that you have done well enough in the internship, so your technical side is probably up to the mark. However, they are going to see if you are a good fit in the firm – the so called HR part of the interview.

Make sure that you demonstrate that you are flexible. You are ready to work in any city. You are open to relocate anywhere. Your only concern is to start your career at a good firm, under a good boss and you liked what you saw during the internship. Show loyalty. Be honest and transparent. It goes a long way.

Before giving an interview, ask young associates for their advice. Who is going to interview you? What sort of questions does he ask? Read about the person online. Do detective work on him. Stalk him on social media. Do all that.

Then ask at least 3 different people to do mock interviews with you. If you can get a lawyer to do it for you, great. Otherwise ask a co-intern or even your college friends. This is a very important step. Do not forget to do mock interviews beforehand.

If you wish, book a mock interview cum training session with me. I charge INR 4000 for an one hour session. You can book a session here.

How to crack telephonic interviews for PPO

Let’s say you did a great job with your internship. The firm is interested in hiring you. However, the partner who does interviews is not around. Or that the interview could not be arranged immediately. Or simply that the firm doesn’t have a vacancy and will consider you later.

In those situations, you will find yourself giving a telephonic interview later on. A Telephonic interview is not all that different from a normal face to face interview, so do not panic.

Prepare in the same way that you will prepare for a normal interview. However, make sure that you are in great network zone. Make sure that you have good battery backup. If possible, even ensure that you have a spare phone handy during interview.

Yes, you must be extra carefully and over prepared.

That is, anyway, the key to winning this race. Before you get a job in big law, and even afterwards when you work there.

We have a corporate law internship preparation course called Ace Your Internship where we guide you through these steps. Do check it out.

The post Step by Step Blue Print for Getting A Job in A Big Law Firm in India appeared first on iPleaders.

This article is written by Diksha Mahla of Raffles University, Neemrana, Alwar, Rajasthan. The article discusses How to file a copyright infringement complaint on YouTube.

Introduction

Around 1 million website links were removed recently by Google which infringed the copyrights (including music, movies, software). If you create something new and interesting then you don’t want anyone else to get profit from that idea and this has resulted in the emergence of copyrights. Copyright is provided for the protection of the owner’s creation, but copyright extremism is showing opposite results because extreme copyright rules are diminishing creative ideas and artistic lives.

DMCA (Digital Millennium Copyright Act)

Since 1998, several search engines have removed links that infringes the right of the copyright holder at his/her request, however, they can be held liable for such infringement if the search engine refuses to do the same. 97% of the DMCA takedown requests are compiled up and with an average turnaround time of 10 hours counted from the submission of a valid takedown notice to the removal of the offended link. Nearly, 550,000 takedown requests were targeted by the Redmond (out of a total of about 1.24 million) which is further followed by the British Recorded Music Industry) and NBC/Universal with about 150,000 takedown requests each.

DMCA Takedown

It is basically known as the right to process a takedown notice against the owner of an illegal online material or content. It is well established and accepted internet standards which are followed by the internet service providers.  

Copyright

Copyright is a term which is well known to everyone. Be it any TV show, novel, advertisement or any video posted on youtube it will be written as either @AllRightsReserved and @CopyRightsReserved. It is basically a right which is given by the law to the owners of the original work. For Example: musical, literary, dramatic, artistic works and it also includes sound recording and cinematograph films. Classes of work which are subjected to copyrights are given in chapter III of Indian Copyright Act, 1957. Copyright act only protects the originality of the idea and its presentation in tangible form instead of protecting idea as a whole.

Copyright didn’t evolve suddenly, rather it came after various protests by authors, when they felt personally insulted and with the introduction of printing press in England in the late 15th century. Later on, it took the form of Indian Copyrights Act, 1957 and new amendments have been made like The Copyright Rules, 2013 by the Ministry of Human Resources and Development on 14th March 2013. In the words of Walter Savage Landor, “No property is so entirely, purely and religiously a man’s own as what comes to him immediately from God, without intervention or participation”.

Digital rights with special reference to rights of other countries

After observing a wide use of internet, it became prone to piracy and very easy to copy digital contents and selling them illegally. A new concept has emerged in early the 1990s namely: Digital Rights Management (DRM), however, it was not used because of its complications for an average person. The rights given to the copyright owner on digital media are “Digital Rights” and these are protected by Digital Rights Management which works like a software which includes a wide range of technologies. It works against duplication and illegal distribution of digital media that are protected by copyright law. DRM works in a number of ways like digital signature, digital certificate, encryption, etc., in areas of music, films, television, computer games, etc. It includes two technical measures i.e. technical protection measures and rights management information. Former permits copyright owner to control access to their works whereas latter manages materials to customers. WIPO Copyright Treaty, 1996 has backed the laws on Digital Rights Management. However, India has adopted DRM via the copyright (amendment) bill, 2010.

The Doctrine of “Fair Use”

The doctrine of “Fair Use” is covered under section 107 of the Copyright Act,1976. It is not always wrong to use a copyrighted content. A person can reuse copyrighted content without the owner’s permission for the purpose of comment, research, criticisms, news reporting, scholarship, and teaching. The aim of Copyright Act is to maintain a balance between owner’s right on their original work and interest of the society while competing with free flows of ideas. In the words of a legal scholar named Jason Cohen, “The fair use doctrine helps to prevent the copyright owner’s exclusive rights from interfering with the purpose of the Act i.e., promotion of learning”. There is not any specific test to consider fair use and copyright infringement because it varies from case to case. Mere substituting of the original work will not be considered as fair use.

What constitutes Fair Use

1. Purpose for use of copyright work: Court will look out for “transformative work”. If the whole of the original work is copied it will not be considered as fair use, some transformations are needed in the original. Courts prefer non-profit organizational purposes over commercial use while determining fair use.

2. Nature of the copyrighted work used: Fair use is more favorable to factual work than fictional work.
3. Amount of copyrighted work used: Use of small bits of work will more likely to be fair use but it will also be subjected to an exception which says that borrowing small part of work which is “heart” of the work will not be considered as fair use.
4. Effects when copyrighted work is used: If the use of some part of work is affecting the profit-making capacity of the original work, it will less likely to be a fair use.

Digital rights in Europe

Freedom of speech and expression is an important element of democracy and same is supported by information technology. European digital rights (EDRi) is taking care of the digital rights of people. It is an association of civil and human rights associations from across Europe. As more and more people starts using the online platform, the rights are more likely to be violated. European Digital Right (EDRi) key priorities for the future are privacy, surveillance, copyright reform and net neutrality.

Digital rights in Canada

Canada learns Digital Rights from Digital Millennium Copyright Act (DMCA). Canada is more favorable to European Digital Rights rather than the laws of the United States regarding Digital Rights. It supports the idea of maintaining a balance between owner’s rights and consumer’s needs. Canada is more homogenous than the USA and it is federal in nature when it comes to laws related to the impact of Digital Rights Management. Canadian government uses agencies such as Industry Canada, Heritage Canada, and Strategies to enhance and shape the area of copyright. In Canada, accesscopyright addresses are for printed works and Socan addresses are for musical work.

The concept of Content ID with special reference to Youtube

How will you come to know that your video has been uploaded by someone else without your permission? There is a way which tells you that the particular content is protected by copyright, it is known as Content ID.

Youtube’s Content ID

A person who uploads a video and the content of that video is similar to someone’s copyright protected content then in that case the video uploaded by that person will be struck down. It is basically a special protection given to content owners so that they can easily manage their copyrighted materials. It is done through a digital fingerprinting system. Before uploading on youtube, your video will be compared with all registered audio and video files with Content ID.

Youtube has certain criteria under which a person can get a Content ID. A person must own some exclusive rights of original material which is uploaded frequently by youtube user community. The content user must be able to provide shreds of evidence for claiming originality of particular content.

Steps for using Content ID:

1. You must set your content owner.
2. You must deliver your content to youtube.
3. Content ID will look out for matches by scanning each new upload.
4. You must monitor and manage your content.

Procedure for claiming Copyright infringement on YouTube

Registration of copyrighted content is not mandatory, it will be automatically in existence as soon as an original work is created, therefore, no formality like registration is needed to be done to acquire copyright. Registration of copyright is helpful in court when any dispute arises regarding ownership of copyright. Entire YouTube channel cannot be reported for Copyright infringement, particular content can be reported.  

It is a very common problem that many times people tend to re-upload your original video without your permission. But, YouTube allows you to complain about copyright infringement. You can file a complaint by copyright takedown notice. But, remember that as soon as you file a complaint, you are initiating a legal process. How to submit the complaint?

1. Firstly, you need to login to your YouTube account.
2. Secondly, you need to open the video against which you want to report and click on the report option given below.

4. Finally, you need to fill the form that appears on your page.

Copyright strike out on YouTube

Well everybody is given a warning when they commit any mistake so, is the case with YouTube. When owner’s copyrighted-content is copied by someone then, before submitting copyright infringement complaint, the owner can give that person a few weeks to take down the copyrighted-content. If he/she does not comply by the same, the owner can submit a copyright complaint to YouTube. The complaint will cause a strike out on their account. YouTube will notify three strikeouts and after the third strike, YouTube will blacklist the copied content.

How to remove “Copyright Strike”

YouTube Copyright Strike would be removed after 6 months but nobody wants to be blacklisted by the YouTube for a long time period. To handle this situation YouTube has added a new feature to remove Strikeout, but it is altogether a different method. If the owner is convinced and he is ready to retract the video then there is a way to come out of Strikeout. Content creators can submit retraction:

1. First, you need to click on avatar icon at upper-right corner and then scroll down to creator studio.
2. Then, go to the left-hand side, click video manager and select the video you want to be retracted.
3. Then, click on submit a retraction.
4. It will reinstate the video.

Time limit of Copyright

Copyright is with the owner for 60 years after the owner’s lifetime. After 60 years that would be added in the public domain which will remove the content from the purview of Intellectual Property Laws. Once added in public domain, the content can be used by anyone without permission. Most of the countries follow TRIPs (Trade Related Intellectual Property Rights)  which has the time period of 60 years past death.

Whether or not attribution absolve a Copyright violation

YouTube takes copyright very seriously. Copyright is a moral right which must be protected from infringement. Just by giving credit to the owner irrespective of motive, the wrongdoer cannot be escaped from liability. If anyone uses the content of any other person without permission, that will constitute an offense. Proper permission received from the owner may help to escape from strike down. But, mere attribution will not absolve a Copyright violation if permission is not taken.

How to legally use Copyrighted music, games, movies

1. Determine the Copyright owner- it is very easy to determine copyright owner of movies, TV shows but it is very difficult in the case of music.
2. Check for terms and conditions for use- if it is mentioned in terms and conditions about monetizing a video then, it will be legal to use copyrighted content.
3. Try to find Copyright owner’s contact information via a website, email or by filling a specific form provided to contact the owner.
4. If permission is granted then ask the owner to either post permission on their website so that YouTube can go and search the permission or ask him to send you proper permission documentation via email.

Conclusion

Copyright is considered as a moral right given to the owner because it is his original idea and work but at the same time, fair use is also reasonable because creativity would be hindered if extremism of copyrights would be in practice. Getting an idea from someone’s original work is not wrong. There should be specific grounds to determine fair use because in the future it is going to be very difficult to handle so much content. Fair use allowance is reasonable because further development is based on the already existing material.

The post How to file a copyright infringement complaint on YouTube appeared first on iPleaders.

In this article, Prachetha Nidhi Verma of IIMT & School of Law, G.G.S.I.P.U  discusses Compensation payable under the Industrial Disputes Act, 1947 to employees when an undertaking is transferred.

Introduction

Law has put in some obligations on the employer which are envisaged under the provisions of The Industrial Disputes Act, 1947 (hereinafter referred as ID Act) in order to prevent such disruption among the employees. The ID Act is applicable to all the industries as defined in Bangalore water supply case (see it’s analysis here).

Workman under the Industrial Disputes Act, 1947

In order to have the rights that will be explained below, one needs to be a workman as defined under section 2(s) of the ID Act, 1947. A Workman has been defined as a person who is employed in an industry to which the provisions of the ID Act are applicable. Such worker is employed for any skilled or unskilled, technical, operational, manual, clerical or any supervisory work for wages, irrespective of the fact that the terms and conditions of his service of the employment are implied or expressed.
It excludes workers, who are-

1. Employed in Army/AirForce/Police/Navy.
2. Employed mainly in managerial, supervisory or administrative capacity, having wages of more than Rs 6500 per exercise or per month.

Whether an employee is a workman under the Industrial Disputes Act, 1947?

The next important question before us is whether an employee is a workman as defined under the ID Act. Primarily the provisions of Industrial Disputes Act, 1947 deals with the conflicts and resolution between the employer and the workmen. In order to answer this question, the Hon’ble Supreme Court of India has laid down a dominant nature test in the famous BANGALORE WATER SUPPLY case. According to the dominant nature test, one has to determine the status of the employee through the main nature of his/her work. That means if an employee’s main work is clerical but he also works in supervisory capacity which is incidental to the main work done by him, then the work of such an employee cannot be said to be of supervisory nature since his main work is only clerical.

Therefore, the employees, whose main work is not supervisory or managerial, fall within the category of the workman as defined in the Industrial Disputes Act, 1947. All the other employees not covered under this Act will be governed by their respective employment contracts.

Notice and compensation payable to employees

According to section 9A of the ID Act, 1947, it is mandatory for the employer to issue a notice to his employees in case of the change in conditions of service of such employees with respect to the following matters (Fourth Schedule):

In the above-mentioned cases, the employer is bound by the law to:

1. Give a notice to the worker who is likely to be affected by such changes,
2. The notice should contain all the details of the changes proposed to be made,
3. No such changes as proposed should be implemented within 21 days of serving the above-mentioned notice.

Right to compensation and notice in case of a change in the management of the Industry

Every employee has a right to get compensation in case of a transfer of ownership of industrial unit i.e. a change in the employer as per section 25FF of the ID Act, 1947.

It is not necessary that your employer will get changed in all the cases of Merger and Acquisitions. For instance, when one company acquires the shares of another company and workers continue working for the latter on the same terms, there is no change of the employer. But in cases wherein the whole company and its management are acquired, the employer changes.

Therefore, in cases where the employer has changed because of the reason of the transfer of ownership of the management of an industrial unit or an undertaking (eg: by Merger or by Acquisition), the previous employer is liable to give:

• Notice – 1-month notice in writing stating the reasons for a change in the management;
  ● Compensation – An amount equal to the 15 days of wages for every completed year of continuous service or any part of service in excess of 6 months,

to every employee who has been in continuous service of 1 year in that undertaking before such transfer.

For example:

1. If you have worked for 6 years and 7 months for Rs.1000 per day wage, and your employer gets changed, you will be given Rs.15,000 (15 x 1000) for every completed year. Now you have completed 6 years and 7 months, which will be counted as 7 years since any month exceeding 6 months is counted as a fully completed year of service. Therefore, you will be given Rs.1,05,000(Rs.15,000 x 7).
2. If you have worked for 7 years and 4 months for Rs.100 a day, and your employer gets changed, you will be given Rs.1500 (15 x 100) for every completed year of service. Since you have completed only 4 months, which is less than 6 months, therefore this period of time will not be counted as a full year of continuous service, and you will be only entitled to compensation for 7 years which will be Rs.10,500 (1500 x 7).
3. If you have worked for wages which are of variable nature i.e. which keeps on changing daily. Then for calculating your 15 days of wages, an average is to be taken.

Cases in which the employer is not liable to give any notice or compensation

Your employer will not be liable to give you any compensation or notice, when:

1. No interruption in your service has occurred due to such transfer;
2. Equally or more favourable terms and conditions of the employment are applicable to you (transferred employees) in comparison to the ones that were applicable to you before the transfer of undertaking.
3. Your new employer has become legally liable to pay you (transferred workers) compensation in the event of retrenchment, in a manner similar to the one in which the old employer was liable. Also, such period of transfer will be counted in the period of continuous service.

Right to resign

It is your constitutional right that no one can force you to work in the conditions and on terms which you as an employee do not consent to. This will not only a be a form of slavery but it will severely deteriorate your performance thereby affecting the performance of the industry.

Therefore, you as an employee has an option to resign from the work and get compensation as mentioned above under section 25FF of the Industrial Disputes Act, 1947 even if the terms and conditions of service under new employer are more favourable to you than the ones you were getting before.

Consent of an employee is mandatory

It was observed by the Hon’ble Supreme Court of India, in the case of Sunil Kr. Ghosh v. K. Ram Chandran (2009), that where there is a transfer of ownership in the management of the industrial unit, it is mandatory for the employer to take the consent of the workmen before transferring their services to a new employer. The workers cannot be forced to work for the new employer or in a new industry, even if the terms of the new employment are no less favourable than the earlier ones. In such cases, workers would be entitled to avail the option of retirement or termination and the employer will be obliged to pay retrenchment or retirement benefits according to the provisions of the act.

Therefore, it is your choice to either go and work for the new employer or resign and take the benefits of compensation as explained above. No one can force you to work for the new employer.

Conclusion

It can now be understood that the strategies of Merger and Acquisitions can prove to be personally and professionally disruptive for the employees and can often lead to confusion, miscommunication and a feeling of negativity among the employees and towards the employer. This can lead to a failure of the industrial unit itself. It can also result in a decline in the profits that were expected out of an M&A. To maximise the chances of success, it is important to analyse the needs, requirements and problems of the employees. An employer should always inform his workers and ask for their consent before restructuring them to a new industry, in order to prevent any disputes after such transfer since the employees are the building blocks of any industry.

The post Compensation payable under the Industrial Disputes Act, 1947 to employees when an undertaking is transferred appeared first on iPleaders.

This article is written by Mohona Thakur, Marketing Manager at iPleaders.

Just the other day, I was reading this article titled ‘How I Blew My Interview With Amarchand Mangaldas’ and I was amazed not only by how much I could connect with the author, but also at the ease with which the article conveyed mistakes that twenty-two year olds make right before they join the not-so-cushioned real world after finishing college.

Everyone has a story. And here is mine.

I’d like to take you back seven years down the line to the interview that eventually led to my admission at ILS Law College, Pune. Tell me something. How many times have you lied through your teeth at an interview where you were asked “Why law?” I have. Multiple times, especially at interviews, just like the one at ILS.

Ms. Smita Bhattacharya was the professor that took this interview and I had my answer rehearsed in order to sound as convincing as possible. I still remember having said, “Everyone I see around me, even in my family, is either an engineer, MBA or a doctor. I want to be different. Hence, law.” She smiled at me and replied saying, “When you graduate out of law school, you’ll realise that there is no dearth of lawyers in this world.”

I wasn’t entirely lying about why I pursued law. I have always wanted to be different, different than everyone around me; and as an excited eighteen year old, I was under the impression that being different is in fact a privilege. Only if I had any idea about the inherent nepotism in the industry I was about to enter.

However, the sad truth behind why I did want to take up law comes with a lot of baggage. A baggage I plan on shortening into a couple of paragraphs, as I tell you my story. I believe my story would be incomplete without this.

My family was settled in the middle east for as long as I can remember. I was taught at a CBSE affiliated school in Abu Dhabi, UAE till the seventh grade. However, mid-term in October 2004 my family had to shift back to India. What I realised was that the level of education in Abu Dhabi (although it was a CBSE affiliated school) was way lower than what was being taught at CBSE schools in India, especially in subjects like Maths and Science. And Sanskrit? What was that? Was that even a language?

Naturally, in spite of multiple tuitions, the gap in understanding remained and I could never score in these subjects. This is when I took the opportunity to strengthen the subjects that I was ahead at – English and the Social Sciences. I dropped Sanskrit and Hindi at the first opportunity I got and chose French as my second language at school. As a result, I had a command over social sciences like no other in my batch and unlike many, I never mugged up chapters; I understood them like they were stories. Taking up humanities as my stream in 11th was an obvious choice for me.

What future does a kid from the humanities background have in India? Forget parents, the schools distinguish the students and segregate them into science, commerce and humanities streams on the basis of the percentage of marks they score in their 10th Board exams. If you’ve managed to score a 90% plus, you are a perfect choice to take up science and attempt the IIT-JEE and medical entrances. If you’ve scored lower than 80%, you deserve to study humanities because you’re good for nothing and humanities is “easy”. We Indians and the education system in India decide the careers of our kids and students on the basis of board exam marks.

I struggled through law school, and the struggle was a lot more real after law school, but that’s a story for another time. Today it is about the struggles that clueless, aspiring first generation lawyers face in law school. I’m going to break it down into pointers for ease of understanding:

Not Having Adequate Information

With the presumption that law being a professional course would ensure not only stability, but will also be financially rewarding, I prepared myself for five years of law school. This was why I wanted to be a lawyer; it wasn’t just a choice I made in order to be different, it was a conscious choice I made presuming I could pursue humanities, and law would allow me to  have a stable career with sufficient income.

This was my first struggle as a first generation lawyer: not having adequate information, or in other words, a reality check. Back when I was making the choice of pursuing law as a career, there weren’t websites such as Lawctopus or blogs such as iPleaders that could enhance my ability to make a decision that was well thought through.

Negligible Guidance

When I entered law school, from my very first month I knew I had to up my game as I was naturally competing with batchmates who came from families neck deep into law, and when not neck deep into law, most of them had a relative or a distant cousin who always turned out to be a lawyer. In plain simple words, there was always a reference.

What about me? I had absolutely no lawyer in the family, dead or alive.

As a typical eighteen year old with values as imbibed in every kid since their childhood, I decided that hard work was the answer to this. I mean aren’t we all taught this for as long as we can remember: work hard and everything else shall follow.

While most of my batchmates decided to not intern and take it easy, I scheduled an internship with a lawyer at the Delhi High Court and interned with him twice in my first year. The idea was to learn as much as possible, and as quickly as possible to be able to have equal if not more knowledge than them. I participated in the only moot that first years were allowed to participate in – Novice – and while I did stammer the first minute in the very first round, I had a brilliant journey and beat over 100 participants to reach spot number 2. This was equivalent to an assurance to me: You’re on the right track, keep going, hard work does pay off.

This very assurance was my second struggle as an aspiring first generation lawyer: negligible guidance. Most seniors in law school would ask you not to intern if you were in the first couple of years into law school. In fact, I have heard multiple seniors ask juniors not to intern in the first or second year of law school because they wouldn’t learn anything as the law subjects only began from the third year onward. However, if you do tell them that you’ve already interned twice by the end of your first year, they wouldn’t say it was useless, they would in fact say that it was a good decision to have begun interning early. The exact opposite. Do you believe them? If not them, who do you go to? With no real guidance, you begin relying on the immediate results that every activity you are doing is producing, or your instincts, which may or may not be the best thing to do.

Lack of Networking Knowledge or Skills

With no real insights from home for obvious reasons and with majority seniors advising to intern with law firms that paid the big bucks and expected you to work weekends, or to intern with lawyers and learn the nitty-gritties of litigation to fend for yourself a few years down the line, I chose neither. To be honest, most of the well-known law firms wouldn’t take second year interns. In addition, most applications went unanswered as they were directly sent to HRs at law firms without any references. This is when I decided to take my chance and intern in-house, only to fall in love with the work-life balance I saw there. The teams would come in early by 9pm and wrap up work by 5pm on most days and have a life to look forward to. Although the pay scale possibly wasn’t as good as a law firm, it was enough to be self-sufficient.

I would ideally call this the point where I faced my third struggle and one that continued to haunt me even after I graduated law school: lack of networking knowledge or skills. I used to detest people who used their network to reach places – I always thought of it as a privilege that I never had. What was worse was that I didn’t know how to network. I knew how to make friends, but how on earth do you build networks? I had grown up to see two very hard working parents land jobs on their own merit, no references, and I was brought up to want to be self-made. As a law student with zero connections, it is a pertinent question to ask to yourself – How do I land an internship with law firms? What is the plan of action? What happens when cold-calling doesn’t work? Today, if you google, you’ll find courses on how to land an internship with law firms. Back then this wasn’t an option, so we learnt from our experiences and even more so from our mistakes.

Most of my nearest circle of friends were trying to make it on their own but at the end when things didn’t seem to work out, they would pull in a reference with someone their father knew. In my case, that was not a solid option since my father had built a career in the middle east and not India.

No Adequate Knowledge about the Functioning of the Legal Industry

Law firms looked like they were unachievable. As though I was an ant at the bottom of the pyramid and I had to climb a steep hill without any clue as to how to. Most seniors I asked for help could refer me to advocates (which I had ruled out in the first year after I realised that most advocates get paid about 10,000 Rs. as a freshers salary) or had contacts to find me an internship in-house. I took the latter option and continued to intern in-house and believe it or not enjoyed not only the work but also the work culture immensely. Over the internships, I did acquire a very different set of skills about which I have written in this article. I do not regret the choices I made, I only wish I knew what law firms had to offer.

When I made the call to want to pursue a career as an in-house lawyer, I was under the impression that I had enough working knowledge of how companies function and what may be expected out of the legal teams. And to be absolutely honest, I still believe that is something I do know. Where I possibly faltered was not having adequate knowledge about the functioning of the legal industry as a whole: what I would call the fourth struggle. By the time I realised that companies do not always have a vacancy, contrary to the mass campus placements with companies that I was used to seeing over the years at ILS, it was too late. In fact, while I was giving interviews with a couple of companies was I informed of their policy of not hiring freshers right out of law school. You don’t find company policies on google, you do not even find these companies openly advertising on job portals. And trust me, I tried all portals right from Naukri.com to MonsterJobs to LinkedIn to iimjobs. Desperate times called for desperate measures.

Imagine, if I had known enough lawyers, made not one but many contacts during law school who would vouch for me, and not absolutely relied on hard-work paying off, as is taught to us, I probably would have landed the dream in-house job that I wanted. I had no reason not to. I had a resume that was focused – good grades, won moots, convened events, even worked part-time for Lawctopus, had in-house media and FMCG internships, had a post graduate diploma in media laws, publications. Isn’t this everything that is asked of us at law school? Aren’t these attributes of a strong resume?

What exactly went wrong?

When I look back, I feel that it wasn’t one particular thing that I could point at. I presumed that law would give me a stable lifestyle after five years of hard work, I believed that the world was sane enough to look through the pool of people and pick the meritorious one over the one with contacts, I believed that law was a financially rewarding career – after all we invest half a decade worth of our lives. Most of all I believed I could be different and survive, pas de guidance.

With the advent of technology and the boom in the blogging industry, today the law students are far more equipped with resources that give them more than adequate information about law firms, interviews with insights from lawyers working in the industry available on SuperLawyer, online courses  and career development programmes that give you the one chance to not only network with lawyers but also acquire practical skills at the same time, blogs that are run that give you enough information about pay packages for lawyers, and even legal recruiting agencies like Vahura that look into your profile and look for opportunities suited to your profile.

It took me a while to write this article to be honest. It takes courage to admit the mistakes that you have made and even more courage to revisit them to figure out what you may have done right. I do know that this will stay on the internet for a long while, but what I do genuinely hope for is that no one, whether a first generation lawyer or not, has to go through similar struggles while in law school, or even after, and fail.  

The struggle is real, and you’re not alone.

The post My Struggles as A First Generation Lawyer in India appeared first on iPleaders.

This article is written by Ratul Rudra, Sales Head at LawSikho. 

It was April 1998.

It was almost midnight but the Howrah station area was busy and I had no place to spend the night. I was left with Rs.20-25 in my pocket so I could not afford a decent fish-and-rice dinner. I had no place to go for the night.

I settled for the Howrah station. That’s where I would have to sleep.

It was not that I had no friends or relatives in Kolkata but this was a stage when I was running away from all known entity in my world.

The reason: recently I had tasted failure in business. Every single well wisher or acquaintance, experienced or less experienced in life, had told me that it will be irresponsible and stupid of me to waste both time and money by starting a business. After all, no one in my family ever dared do such a thing in known history!

I was also advised that being from a lower-middle class family I should have done a job which would have made my parents happy.  I was reminded time and again that my father had retired just a year before. I should have been able to lift the burden of running the family from my father’s shoulders. Everyone was shocked at my decision to start a business when I already had a decent job with a secure salary at an MNC in Bhilai.

I was approaching thirty and I had a lost world with no money in my hand. I had settled some dues by selling almost all of my personal belongings but still I owed a few loans from my close schoolmates who liberally said I could return their money at a stage in life when I could earn.

That was magnanimous of them.

I didn’t know where to look for a job and how to earn. At least not in Bhilai anymore. I had a lost face within the community of computer trainers in Bhilai, and that was the only line of work I knew.

There was one more lady in my life who helped me at this stage and she was a silent spectator of all the incidents in my life. She shelved out all her savings from her piggy bank and handed over Rs.3,200/- to me saying that I go to Calcutta and to look for new opportunities by putting up at my maternal uncle’s house in Calcutta. She was my mother.

When I reached my uncle’s place in Kolkata, there was another surprise waiting for me. After having a bath and lunch, my uncles sat down for a chat with me. I was welcomed but for two weeks only. They were very clear in telling me since I was the son of their elder-sister perhaps they were unable to turn me down but that was all they could do. So, I had two weeks and the money given by my mother. I had no second option at this stage. I had to get a job and find out a place to stay in Calcutta – all in two weeks.

We were not having the kind of communication facilities like internet on the go or even a mobile phone was only a thing of imagination in my world. So, I stayed back at the uncle’s place for the rest of the day and started planning my next 15 days; with each of the day’s details like which are the places I will look for jobs, where will I visit on which day, whom are the friends and relatives I would meet to seek help, how will I search for a place to stay, how shall I prepare for the interviews and all such other activities. I had every movement planned with time and money.

The days and nights were passing and I was relentlessly pursuing my search for a job and a place to stay. The first half of the day was spent in job searching from the newspapers, visiting offices and asking if they had any vacancy, visiting placement consultants and submitting resumes, walk-in interviews and hoping that the next day might bring in some good news. Meanwhile, in the evenings, I used to meet my relatives and childhood friends in Kolkata trying to tell them about my situation and ask for help. No, I never asked for money from any of them. But the days were passing with nothing in hand. Then there was a day when almost all the money was spent and my mind was unable to think any further. I didn’t know what step to take next.

I didn’t return back to my uncle’s place that night. It was 12th April’ 98. I boarded a bus and it reached Howrah station. I loitered around the station area with almost all kinds of weird thoughts in my mind. I could no more draw the energy to walk around the station complex. It was around 4 am in the morning. I sat on the floor as the chairs were all occupied by the passengers. Though I was very tired out of the drudgery I never felt like sleeping.

I don’t know how much time had passed like this.

Finally, at the daybreak, I gathered myself and reached up to the tea vendor, bought some tea and moved outside the station compound.

I saw the newspapers being unloaded and the newspaper vendors swarming the outside area of the station.

I bought The Telegraph.

As I was reading through the pages, a thought suddenly came into my mind. The previous night I had forgotten to enquire at my uncle’s neighbour’s place whether there was any phone call for me.

Since my uncles didn’t have a telephone, I had sought permission from their neighbour to put their telephone number on my resume. So, I went up to the PCO and called them. The neighbour told me that there was a call from NIIT’s Howrah Centre and they had left a message for me that I should meet the Director of the Centre, the next day.

I was excited and a bit worried as to what lay ahead.

I went to meet the director as early as possible. It was not all that far from the Howrah station!

After waiting in the reception for some time, the director met me in his chamber. We exchanged a few formal talks and then came the big moment when he offered me the job.

He congratulated me and asked me from when I could join. This is the moment I was waiting for the past two weeks, suddenly I was dumbstruck. I gathered myself and replied – “From tomorrow, Sir”.

He was happy too and asked me to wait in the reception and collect the offer letter before I leave.

On April 14th 1998, I joined the NIIT Howrah Centre as the Head of Centre and the rest was history in the business records of the NIIT’s Suburban Network in Eastern India. Within the next six month’s NIIT Howrah recorded profits for the first time in their operation of 5 years. It ranked 3rd in Eastern India in terms of sales in the category of NIIT’s Suburban Network Centres.

I may humbly say I had a role to play in that. After I got the opportunity, I was relentless in pursuit of business.

That incident is a very distant memory today. I am now Head of Sales at LawSikho, having done many jobs in between during the intervening 20 years.

I still clearly remember that night at Howrah Station, and it gives me strength.

No matter how bleak your situation is, do not give up. You will find your way out of the darkness if you continue to strive. That is the rule of the universe.

Sometimes, the break comes a little late. Keep working for it.

And if you are having a good time, still, please keep working because just like bad times don’t last, neither do good times forever. Stay prepared, stay strong, do not lose your bearings when things are great.

The post The Night I Spent at Howrah Railway Station appeared first on iPleaders.

This article is written by Snigdha Pandey, Marketing Executive at iPleaders.

During my internship, my mentor had given me a fat bunch of documents and asked me to prepare a report on my findings. This was my brief: ‘Find what potential risks and drawbacks are there in the agreements for us, and prepare a due diligence report’. As a clueless litigation lawyer who had joined the internship to learn the nuances of corporate law, I literally did not know what to do.

Instead of asking my mentor what to do, I went and googled due diligence report. Of course the results were ambiguous and did not lay down exactly what to do. There were no associate counsels around for guidance. So eventually I started reading the agreements. It made no sense to me. By this time I had wasted considerable time, hence I swallowed my stupidity, and went to see my mentor and explained the situation.

He was patient enough to not yell at me, and rather explained to me what exactly was the purpose of this exercise. That’s when I learnt what a due diligence report was. It turns out I was only to make a part of it, the easier part and not the complex financial aspects. Phew!

So my first question was – What is a due diligence report?

In case of a merger or an acquisition, there is a transference of obligations and rights to the buyer from the seller. In order to minimize the potential risks and liabilities, investigation of material facts is conducted of the seller’s company. The report of such an investigation is called a  due diligence report.

The report includes a study of collections, review, and appraisal of business information, financial information, legal information and identification of the state of affairs, liabilities and exposures of the firm being acquired or undergoing the merger, otherwise also known as the target entity, etc. You can read more about the action points of a due diligence report here.

This report is crucial to the buyer, for they need to go into the deal on the basis of this report. Any risks or threats which are not part of the due diligence report, may affect the valuation of the company and change the outcome of the deal. Therefore, it is of utmost importance to investigate all the possible factors which may pose an issue in the future, with a fine tooth-comb.

There can be checklist prepared to reduce mistakes in the process, but there is no foolproof method to ensure the accuracy. There is always room to err and improve. But how does one avoid the mistakes? You may gain relevant experience through hands-on work or gain specialised practical knowledge through mergers and acquisitions course. The idea is to gain knowledge and experience enough to provide the best possible outcome.

What kind of due diligence mistakes can cost the buyer?

According to this article, in a deal back in the 90’s, BMW had acquired Rover to diversify in order to boost sales. But in their due diligence process, there was an oversight on the financial aspects, sales and accounts. There were also cultural clash which resulted in a 790 million pound loss.

Then there was the Quaker-Snapple deal, where Quaker wanted to replicate the success of their Gatorade deal, but instead suffered $1.4 billion loss due to an oversight in intellectual property and competitive analysis!

There may be an oversight of financial projections and expected sale, inaccurate financial statements, poor assessment of product or technologies involved, etc. There may be multiple factors which if missed can cost the buyers millions or even billions of loss.

What are the common mistakes made while preparing a due diligence report?

As mentioned earlier, there maybe a variety of mistakes or oversights of essential factors during the due diligence process which may have catastrophic results for the buyer. Some of the common mistakes are:

Poor buyer communication

During the course of the due diligence process, if there is a finding which affects the deal directly, like the lease on the manufacturing unit’s machinery expiring, then it has to be reflected in the due diligence report and timely reported to the buyer. This can possibly affect the structure of entire deal and its valuation. But delayed on inadequate communication can result in potential loss for the buyer or the entire deal falling apart. There should be clear and transparent communication processes to ensure such a situation can be avoided.

Inadequate internal coordination

The risk evaluation involves multiple departments like sales, accounts, legal, etc. Any relevant information like an unfavourable order in an ongoing litigation, or inaccuracies in the financial documents, etc. has to be communicated to the due diligence team. If the internal coordination is absent or lacking, then the due diligence report will have gaps and inaccuracies. This can be avoided by involving a coordinator who can communicate the developments from the departments to the due diligence team.

Losing sight of the goal

The due diligence report is a thorough affair, and sometimes, it may delve into aspects which are not necessary to the transaction at hand. For instance, if there is asset acquisition, then there is no point dwelling on the liabilities of the seller. It does not serve a purpose to the transaction at hand. Although it is easy to get lost with the abundant data at hand, one must not lose sight of the task at hand. If it is not pertinent, do not dwell on it.

Checklist dilemma

The due diligence report is usually dependant on a checklist of items that needs to be investigated into like financial reports, ongoing litigations, IP portfolio licenses, etc. The problem persists if only the checklist is followed or even if it is not followed. Ideally, the checklist items should be investigated first, and then other intangible factors like, the longevity of the technology in question, whether the two companies are culturally compatible and a good fit or not, etc. Many initially promising franchise mergers fall apart post-deal because of cultural integration issues      

Seller disclosing all the information

The seller however forthcoming, is not likely to be relied to disclose all the discrepancies and inadequacies of his company. It is the responsibility of the buyer to conduct the investigation of all the relevant aspects. The most common mistake is to rely on third party due diligence reports. The buyer must conduct such report independently or go with the list of verified vendors with the banks and other financial institutions. The idea is to ensure that the due diligence report must reveal the true scenario of the company being acquired.

The due diligence report is the centre of the deal. It is the basis of the valuation and the deal in itself. Therefore, it is essential for the parties conducting the due diligence report to ensure that they have necessary knowledge and experience.

How can you learn how to do it

It is very important for young transactional lawyers and law students trying to get into good law firms in transactional roles to learn about due diligence since it gives a huge advantage. We have been running a course on M&A, Investment Law and Institutional Finance where we teach the due diligence process in details, along with hands on practice of doing due diligence on fictitious companies. You even get training in preparing information requisition questionnaire, reviewing documents, retrieving MCA and other financial documents, understanding those documents, even choosing the right kind of presentation style in your DD report – we teach it all. Visit this link and try out the sample material to know what kind of advantage a course like this can give you.

The post 5 Mistakes Made While Preparing a Due Diligence Report appeared first on iPleaders.

In this article, Alankrita Singh of NUSRL discusses the Powers Vested With The District Magistrate Under Section 144 of CrPC.

In order to deal with emergent situations, wide powers have been bestowed on an executive magistrate under Section 144 of CrPC. It bestows an omnibus power on magistrates to issue an order in cases of nuisance or apprehended danger provided the cases are urgent. There is a range of situations in which a magistrate may resort this power in the interest of the public as provided under Section 144(1):

• In cases where a speedy remedy is desirable.
• In cases of immediate prevention.

Also, the magistrate is supposed to issue the order in writing setting forth the material facts of the case and the order is to serve in a manner as provided by Section 134 of Criminal Procedure Code.

The scope of Section 144 of Criminal Procedure Code

According to this law, the order or the action taken under this section is anticipatory in nature i.e. certain actions are restricted even before they actually occur. Whenever as per the opinion of the magistrate ‘there is sufficient ground for proceeding under this section’, the law is applicable.

The order may direct:

• Any person to withhold from doing a certain act, or
• If a certain property is in his possession or under his management, then he can make an order with respect to it.  

The ground for making an order is that if such an offence in the opinion of the magistrate is likely to prevent, or tends to prevent,

• Obstruction,
• Annoyance,
• injury to any person lawfully employed, or
• a danger to human life, health or safety, or
• a disturbance of the public peace (tranquillity), or
• a riot, or
• an affray.

Hence, this section provides for making an order which is either prohibitory or mandatory.

In the case of Radhe Das v Jairam Mahto where the disturbance was over a piece of property, the magistrate had ordered under Sec 144 of CrPC restricting the respondents from entering the property. During the judicial proceedings, respondents also claimed prohibition of petitioners which was subsequently granted by the magistrate. The respondents in response to this claimed that their right over the property was being violated by the order. It was held by the court that private rights must be given away for the greater benefit of the society at large and the action should be for the prevention of public peace and tranquillity.

Before the application of this section, there are certain principles which must be kept in mind which have been explained in the case of Manzur Hasan v Muhammad Zaman:

• The power should be used only for the purpose of maintaining public peace and tranquillity.
• Private rights may temporarily be annulled and interest of the public is given priority.
• Under Sec 144, rights of civil nature or disputes regarding title of properties are not open for decision in a proceeding.
• The consideration should be for a large section and not that such restriction is affecting only a minor section of the community.

The principles have been approved in the case of Shaik Piru Bux v Kalandi Pati.

Though extraordinary powers are bestowed by this section as it enables to suspend the lawful rights of a person if such a suspension of the right will be in the interest of public peace and safety. But, Magistrate should ensure that the right is not diminished as a citizen has the right to express his grievances either in public or in private and ask for remedy or reform.

Also, an order under Section 144 cannot be of permanent or semi-permanent nature. As held in the case of Acharya Jagdishwaranand Avadhuta v Police Commissioner. The Anand Margis were prohibited from performing Tandava on the streets or carry skulls in processions by an order of the commissioner under Section 144 of the code. In this case, the first order lasted for two months and then after every two months, the commissioner reissued the order which was challenged. It was held by the Supreme Court that reissuing of order again and again was an abusive use of power.

The rationale for the Application of Section 144

Under this section, orders are acceptable only when it is likely to prevent:

• Annoyance

It can be of two types namely physical or mental annoyance. In physical annoyance, a certain amount of propinquity should be there between the object but in mental annoyance, no question of propinquity arises. Under this section even if an order deals with nuisance, there must be a danger to life and health involved or breach of peace. This section should not be used to deal with abusive articles and defamatory statements which are not likely to lead to a breach of peace.

• Injury to Human Life

A magistrate must ensure that the order is likely to prevent the risk of injury to human life or safety and he cannot make an order for the protection of property. The act must be satisfied on the ground that if not prevented right now, then it would turn into an offence in the near future.

• Disturbance of Public Tranquility

The act prohibited under this Section must not be enough to say that by stretching it would have possibilities to establish a connection of cause and effect between the public tranquillity and the act prohibited. The connection should have reasonability and should not be just hypothetical or distant.

• The order should be in the interest of public tranquillity and not for the advantage of one party.

Although the section does confer power on the magistrate and if there is an imminent danger to public peace then interference even with private rights maybe justifiable but the section cannot be used in favour of one party, i.e., one party should not be given material advantage over the other party.

Constitutional Validity of this Section

The provisions laid down in this section are not in excess of the limits as provided in the Constitution for restricting the freedoms guaranteed under Article 19(1) (a), (b), (c) and (d). The restrictions are reasonable and there is an availability of sufficient safeguards to the person affected by an order under section 144 of CrPC. If properly applied, the section is not unconstitutional. It was stated in the case of Madhu Limaye v S.D.M. Monghyr that the fact that it may be subdued is no ground for holding it as violative of the constitution.

The five points which were enumerated by the Supreme Court which justified the constitutional validity of the section is as follows:

• In case the magistrate passes an ex-parte order, then a notice must be served to the person against whom the order is being passed unless it is the case of an extremely critical situation.
• The persons against whom such order is passed have a right to challenge the same which shows that there is no arbitrariness.
• The principles of natural justice are also in accord of this section, i.e., an opportunity of hearing is provided to the person and also he can show cause the order.
• The fact that the injured party can challenge the order ensures that the action of the magistrate is more reasonable and is of convincing nature.
• The High Court has the power to look into the matter under Sec 435 of the Code read with Sec 439 of the Code which brings up the condition that the order under Sec 144 is non-appealable. Therefore, the liability of the magistrate is ensured as the High Court can either quash the order or for the material facts of the Magistrate.

Hence, it is held that preventive action under Section 144 is justified.

Duration of The Order

The examination of Section 144 makes it clear that a total of 60 days has to be calculated from the day on which prohibitory order was passed at the time of initiation of the proceeding.

This time period of 2 months can be extended to a maximum of 6 months from the date of expiry of initial order by the state government. Though the power bestowed with the state government is executive in nature but if in case the court finds the decision arbitrary or sees it as an unfair exercise of power, then the revision of the order can be made by the Magistrate.

Conclusion

The most important thing is that before passing an order, a magistrate must be satisfied with the ground of proceeding which should be sufficient under this section and an immediate prevention and speedy remedy must be desirable. The second element is that the magistrate must consider the fact that the direction which he gives is likely to prevent or tends to prevent annoyance, obstructions or injury to any person lawfully employed. It should be decided as a matter of fact by the magistrate that whether it will lead to the breach of peace or disturbance of public tranquillity.

The order should contain the following contents:

• The order should be in writing.
• Order must be specific and definite in terms.
• Material facts must be stated in the order.
• Prohibition must be clearly stated.

However, at this juncture there appears to be a need to balance the granting of plenary powers by the legislation to deal with the emergent situations and that the personal liberty should be protected and other freedoms must be granted to the citizens especially the rights under Article 21 of the Constitution of India.

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In this article, Palak Goel discusses the important clauses in a contract of sale.

Introduction

The contract of the sale of goods is governed by The Sale of Goods Act, 1930. The Act extends to the whole of India except the state of Jammu & Kashmir. Till 1930, all the transactions related to the sale of goods was regulated by The Indian Contract Act, 1872. In 1930, Sections 76-123 were replaced by the Act of 1930. A contract for the sale of goods has certain unusual features such as transfer of ownership of the goods, delivery of goods, rights and duties of the buyer and seller, remedies for breach of contract, conditions and warranties implied under a contract for the sale of goods, etc. These unusualities are subjected to the provisions of the Sale of Goods Act, 1930.

The Act deals with the subject-matter of movable property. This Act does not deal with the sale of immovable property. The transaction relating to immovable properties, e.g., the sale, lease, gifts, etc., are governed by a separate Act known as the Transfer of Property Act, 1882.

What is Contract of Sale: meaning & concept

Contract of the sale is an agreement between the buyer and the seller intending to exchange property. Section 4(1) defines the contract of the sale as – a contract of the sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to a buyer for a price.

In other words, the essentials to constitute a contract of the sale are as follows:

Two parties

There must be 2 distinct parties i.e. a buyer and a seller, to effect a contract of the sale and they must be competent to contract. ‘Buyer’ as defined under Section 2(1) means a person who buys or agrees to buy goods. ‘Seller’ has been defined under Section 13 which states that a person who sells or agrees to sell goods.

Goods

There must be some goods, the property which is or is to be transferred from the seller to the buyer. The subject-matter as to the goods under the Contract of Sale must be movable property. This Act does not concern the immovable property as its subject-matter.

Price

The most important essential for the enforceability of the Contract of Sale of goods is the price. The price can be termed equivalent to the consideration. In the absence of such price or consideration, the transfer cannot be termed as a sale. The transfer by way of the sale must be in exchange for a price. The payment of the price can be made in two modes:

1. Paid fully in cash; or
2. Paid partly and rest promised to be paid partly in future.

The price can be determined through an instrument of agreement between the parties before the conveyance (transfer) of the property.

Transfer of general property

There are two types of property on the basis of its nature, i.e., general property and special property. The subject-matter of the contract of Sale of Goods deals with the special property. For the enforceability of such a contract, there must be a transfer of special property from the seller to the buyer. For e.g., if A owns certain goods he has general property in the goods. If he pledges them with B, B has a special property in the goods.

Essential elements of a valid contract

All essential elements of a valid contract must be present in the contract of the sale, i.e.,

• An offer,
• An acceptance,
• An intention to create a legal relationship, and
• A consideration

Formalities of the contract of sale of goods

Except where specifically mentioned by the law, there is no prescribed form required to draft a contract of the sale of goods. The agreement between the parties, i.e., the buyer and the seller may be implied or may be expressed acknowledged by the conduct of the parties. Section 5 of the Sale of Goods Act, 1930 describes as to how the contract of the sale of goods can be framed. Therefore, the contract of the sale of goods can be made-

1. By an offer from the buyer to buy and seller to sell goods for a fixed consideration mentioned in the agreement. Such an offer of buying or selling must have an acceptance of the opposite party. The delivery of the goods can be executed in the following manner:

• immediate delivery of the goods; or
• immediate payment of the price or both; or
• by delivery or payment in instalments; or
• the delivery or payment or both to be postponed.

2. Subject to the provisions of any law for the time being in force, a contract of the sale may be made in writing or by word of mouth, or partly in writing and partly by word of mouth or may be implied by the conduct of the parties.

In nutshell, a contract of the sale may be made in any of the following modes:

1. There may be an immediate delivery of the goods; or
2. There may be an immediate payment of a price, but it may be agreed that the delivery is to be made at some future date; or
3. There may be an immediate delivery of the goods and an immediate payment of the price; or
4. It may be agreed that the delivery or the payment or both are to be made in instalments; or
5. It may be agreed that the delivery or the payment or both are to be made at some future date.

Important clauses in a contract of sale of goods

There are some important clauses that are pre-requisite conditions to constitute an agreement for the contract of the sale of goods. These are as follows:

Title of documents

Title to a document differentiates it from the other documents. It makes it more specific as to what and which subject-matter it deals with. It gives an identity to a document. Title the document as ‘Contract for the Sales of Goods’. Titling the document proves as to whom the document belongs to and who owns it or has the right to take control over it.

Name the parties to the contract

The name of the buyer and seller must be mentioned in the contract. Besides to this, the addresses of the parties must be mentioned therein to have the accountability and transparency for future contingencies. For example, “This contract of the sale of goods made and entered into (date) between (name of the seller) located at (address of the seller) and (name of the buyer) located at (address of the buyer).

Include the recitals

We generally came across the ‘Whereas’ clauses in almost every contract. These are known as ‘recitals’. The whereas clauses are added to define the party’s purpose for entering into the contract. Recitals act as elementary statements for the effective enforceability of the written agreement or deed. They customarily appear at the beginning, and acts similar to the preamble, i.e., setting out the aims and objectives. They set out the party’s intention; what the contract is for, who the parties are and so on. Recitals are the clauses states after the words “whereas” introducing the main conditions and compliances to be fulfilled for the enforceability of the contract.

Describe the goods

The Sale of Goods Act,1930 only deals with the movable property. The goods must be described clearly and definite. It must be defined as in quality and quantity both. Goods are defined under the Section 2(7) of the said Act. Thus, to call an element to be goods, it must have the following essentials:

1. it must be a movable property;
2. it includes stock, shares, growing crops, grass, things attached to or forming part of the land;
3. Such a good must be agreed to be severed before the sale or under the contract of sale;
4. It does not include actionable claims and money.

State the time of delivery

There must be certain specific attributes as to the time and date of the delivery of the goods in the contract of the sale of goods. Such a clause in the contract must be provided with a deadline as to change in the delivery date or change of address.

For example, Seller shall deliver the goods to the buyer by (date) at location (address of delivery). Buyer shall have the right to change the delivery date by providing written notice within 10 days in advance.

Insert Warranties and Conditions

Section 12 of The Sale of Goods Act,1930 defines condition and warranty. A stipulation in a contract of the sale with reference to goods may be a condition or a warranty. A condition is an arrangement which is essential to achieve the main purpose of the contract. The breach of a condition must give the right to abandon the contract which results in claiming the damages.

Contrarily, a warranty is an arrangement which is corroborative to the main purpose of the contract. The breach of such a warranty must give rise to a claim for damages but such warranty can not take away the right from the parties to reject and deny the acceptance of the goods. Warranties and Conditions can either be expressed or implied.

Explain Buyer’s Obligations

The obligations of the buyer must be specified in the contract of the sale of goods as to the payment, mode of payment, and provisions as to when goods are received. The provisions as to the mode of payment can be:

• The buyer can pay in full upon receipt.
• The buyer can pay in instalments.
• The buyer can pay half upon receipt and the rest within 30 days of receiving the goods.

Sometimes disputes may arise related to the receiving of the goods. The contract of the sale of goods must specify that what qualifies as the ‘receipt’ of the delivery of goods.

Include Boilerplate Provisions

The provisions or the clauses customarily added at the end of a contract are known as boilerplates. They are also known as miscellaneous provisions. These provisions play a vital role because they affect the legal rights under the contract as well as all other clauses.

These boilerplate provisions include:

• Rules on how the agreement will be interpreted
• Law governing the subject-matter of the contract
• The consequences of the invalid provisions in the contract
• Whether third parties are deemed to be third party beneficiaries of the agreement
• It includes notice provisions, merger provisions, severability clause, waiver provision, and so on.

Add an arbitration clause

Arbitration is outside court dispute resolving resolution. In the case of differences in opinion or disputes, one must have an arbitration clause intacted to its contract of sale of goods as a solution to resolve the future contingencies. Arbitration is cheaper and requires less red-tapism. The arbitration clause might read “All disputes arising under this Contract shall be settled by binding arbitration in the state of (name of state) or another location agreeable to both parties. An Arbitration award may be confirmed in a court of competent jurisdiction”.

Finalizing of the agreement

Finalization of the agreement results in the enforceability of the clauses of the agreement. Once an agreement is final, it becomes a contract. It binds the buyer and seller. An agreement is finalized when signed by the parties to the contract. An agreement is finalized by signing the authorized signatures of both the parties. For this purpose, an agreement must have lines on either side of the last page of the document for the official and dated signature of the parties.

Conclusion

• The agreement of the sale of goods must undergo certain stages and procedure to become a valid contract.
• Before entering into the contract or finalizing the contract, the parties must check the credibility of the document and finalize it then.
• There is no strict format as to the drafting of the contract of sale, it can be moulded as per the needs and requirements of the parties.
• But there are certain clauses mentioned in this article which lays down paramount structure for the important clauses of the contract of sale of goods.
• There is no legal framework as to the contents of a contract of sale of goods but the mentioning of certain clauses makes the contract stronger.

This Sales Agreement (this “Agreement”) is entered into as of the ____ day of _______________, 20___, by and between __________________________, an individual located at ______________________  (“Seller”) and ______________, an individual located at ____________________ (“Buyer”). Each Seller and Buyer may be referred to in this Agreement individually as a “Party” and collectively as the “Parties.”

WHEREAS, Seller owns certain Goods, as defined below, and Seller desires to sell such Goods under the terms and conditions set forth in this Agreement; and

WHEREAS, Buyer desires to purchase the Goods offered for sale by Seller under the terms and conditions set forth in this Agreement.

NOW THEREFORE, in consideration of the mutual promises and for other good and valuable consideration exchanged by the Parties as set forth in this Agreement, the Parties, intending to be legally bound, hereby mutually agrees as follows:

1. Sale of Goods. Seller agrees to sell, transport and deliver to Buyer, and Buyer agrees to purchase the following items in the following quantities and at the prices (the “Goods”):

The Goods _____________________________________________________________________.

2. Purchase Price. Buyer will pay to Seller for the Goods and for all obligations specified in this Agreement, if any, as the full and complete purchase price, the sum of INR ______.

Unless otherwise stated, Seller shall be responsible for all taxes in connection with the purchase of Goods in this Agreement.

3. Payment.Seller shall invoice Buyer upon the shipment of the Goods. Unless otherwise stated, payment for the Goods is due within ____ days of the date of Seller’s invoice, which date will not be before the date of Seller’s delivery of the Goods.

4. Delivery. Seller shall ship the Goods to Buyer on or before __________ at the following address: ________________________. Seller will pay for any shipping costs.
5. Risk of Loss. Title to and risk of loss of the Goods shall pass to Buyer [upon shipment of the Goods in accordance with this Agreement.
6. Right of Inspection. Buyer shall be allowed to examine the Goods once received and shall do so within ___ days after the receipt of the Goods. In the event that Buyer discovers any damages, shortages or other nonconformance of the Goods, Buyer shall notify Seller within __ days after receipt of the Goods, specifying the basis for its claim. Failure to notify Seller by such date shall constitute an acceptance of delivery of the Goods as is. In the event the Goods are non-conforming, Buyer may at its option:

– return the Goods for a replacement, at Seller’s expense

– return the Goods at Seller’s expense for a credit of the full purchase price on future transactions with Seller

– return the Goods at Seller’s expense for a full refund of the purchase price

The above shall be the sole remedy of Buyer and only obligation of Seller with respect to any non-conforming Goods.

7. Warranties. Buyer acknowledges that it has not relied on, and Seller has not made, any representations or warranties with respect to the quality or condition of the Goods, and it is purchasing the Goods on an “as is” basis. Seller expressly disclaims all warranties, whether express or implied, including any implied warranty of merchantability or fitness.
8. Security Interest. Buyer hereby grants to Seller a security interest in the Goods, until Buyer has paid Seller in full for the Goods. Buyer shall sign and deliver to Seller any document needed to perfect the security interest in the Goods that Seller reasonably requests.

9. Seller Representations and Warranties. Seller warrants that the goods are free, and at the time of delivery will be free, from any security interest or other lien or encumbrance. Seller warrants that there are no outstanding titles or claims of title hostile to the rights of Seller in the Goods.
10. Force Majeure. Seller shall not be responsible for any claims or damages resulting from any delays in performance or for non-performance due to unforeseen circumstances or causes beyond Seller’s reasonable control.
11. Limitation of Liability. Seller will not be liable for any indirect, special, consequential, or punitive damages (including lost profits) arising out of or relating to this Agreement or the transactions it contemplates (whether for breach of contract, tort, negligence, or other form of action) and irrespective of whether Seller has been advised of the possibility of any such damage. In no event will Seller’s liability exceed the price paid by Buyer to Seller for the Goods giving rise to the claim or cause of action.
12. Assignment. Neither Party may not assign any of its rights under this Agreement or delegate any performance under this Agreement, except with the prior written consent of the other Party. Any purported assignment of rights or delegation of performance in violation of this section is void.
13. Amendments. No amendment to this Agreement will be effective unless it is in writing and signed by both Parties.
14. Governing Law. The terms of this Agreement shall be governed by and construed in accordance with the laws of  _______________, not including its conflicts of law provisions.
15. Disputes. Any dispute arising from this Agreement shall be resolved in the courts of __________.
16. Entire Agreement. This Agreement contains the entire understanding between the Parties and supersedes and cancels all prior agreements of the Parties, whether oral or written, with respect to such subject matter.
17. Notices. Any notice or other communication given or made to any Party under this Agreement shall be in writing and delivered by hand, sent by overnight courier service or sent by certified or registered mail, return receipt requested, to the address stated above or to another address as that Party may subsequently designate by notice and shall be deemed given on the date of delivery.
18. Waiver. No Party shall be deemed to have waived any provision of this Agreement or the exercise of any rights held under this Agreement unless such waiver is made expressly and in writing. Waiver by any Party of a breach or violation of any provision of this Agreement shall not constitute a waiver of any other subsequent breach or violation.
19. Miscellaneous. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective heirs, successors and assigns. The provisions of this Agreement are severable. If any provision is held to be invalid or unenforceable, it shall not affect the validity or enforceability of any other provision. The section headings herein are for reference purposes only and shall not otherwise affect the meaning, construction or interpretation of any provision of this Agreement. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together, shall constitute one and the same document.

You, the buyer, may cancel this transaction at any time prior to midnight of the third business day after the date of this transaction. See the attached cancellation form for an explanation of this right.

IN WITNESS WHEREOF, the Parties have executed this agreement as of the date first written above.

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In this article, Hardeep Singh of 3rd year, Campus Law Centre discusses the Procedure for filing a civil case in India.

Introduction

Civil cases involve a conflict between people or institutions, generally over money. A civil suit begins when a legal person claims that he has been harmed by the actions of another person or business and asks the court for relief by filing a “complaint”. Most of the civil suits are guided by the well settled principles of the Code of Civil Procedure.

Stages of a Civil Case

Generally, there are six main stages involved in a civil lawsuit. These stages are listed below:

• Pre Filing: The pre filing stage is when the dispute arises and the parties make demands, try to negotiate the matter between them without taking a legal recourse. However, if they fail to reach a resolution then the parties prepare for the possibility of a court action.

• Initial Pleading: At this stage, one party files papers/documents i.e., a complaint to start the court action, and the other party files their response to such complaint i.e., a motion or an answer.

• Discovery: At this stage, both the parties exchange documents and responses filed by them in court and learn about the strengths and weaknesses of the other side’s case.

• Pre- Trial: At this stage, both the parties start preparing for trial, they get their evidence and witnesses in order. Even at this stage they might engage in some out of court settlement conference, after such an attempt the parties may file motions with the court to resolve the case or to limit the issues for trial.  

• Trial: At this stage, the case is actually heard by the judge or a jury (which may last for a couple of hours or a couple of months, depending on the complexity of the case), witnesses are examined, evidence is presented, and the case is eventually decided and a judgement is pronounced.
• Post Trial: At this stage, one or both of the parties might file an appeal challenging the judgement passed.

However not every civil case follows these stages. Some cases like summary suits, have unique procedures that are set out in the Code of Civil Procedure.

Procedure for Filing a Civil case in India

There is a detailed process laid down in Code of Civil Procedure, for filing a civil case. However, if the process is not followed, then the “registry” has a right to dismiss the suit. “Registry here means an office which every court have which provides the information about any court matter and court forms”.

The procedure for filing a civil suit is as follows:

Filing of Suit/Plaint

The first step to initiate a suit is to file a plaint. A plaint is a written complaint or allegation. The party who files it is known as “plaintiff” and the party against whom it is filed is known as “Defendant”.

A Plaint contains:

• Name of the Court
• Name and Addresses of the parties between whom the dispute arose
• Subject (a brief statement telling about the sections and orders under which the jurisdiction of the court is evoked)
• Main Content or submissions made by plaintiff
• Verification from plaintiff stating that the contents of the plaint are true and correct.

Vakalatnama

Vakalatnama is a written document, by which the parties to the suit authorises an Advocate to represent them before the Hon’ble Court. However, if the party is personally representing its own case, then they need not file a Vakalatnama.

Some of the General Terms and Conditions that a Vakalatnama may contain:

• That the client will not hold the Advocate responsible for any decision  
• That the client has to bear all the cost and expenses incurred during the proceedings
• That the advocate will have a right to retain the documents, unless complete fees is paid
• That the client is free to disengage the Advocate already appointed, at any stage of the Proceeding
• That the advocate shall have all the rights, to take decisions on his own during the hearing in the court of Law, in the best interest of his client.

Filing of Plaint

Next step is filing of the plaint before Chief Ministerial Officer (Sherestedar) at the filing counter, along with appropriate court fee and process fee(For different types of documents, a person has to pay different amount of Court fees.)

Court Fees

Court fees is a nominal percentage of the total value of the claim or the value of the suit. The requisite amount of Court fees and stamp duty is different for every suit, and the same is mentioned in the “Court Fees Stamp Act”.

Some of them are as follows:

• In case of plaint/written statement – Rs. 10 if the value of the suit exceed Rs. 5,000/- upto 10,000/-
• In case of plaint filed in a suit for possession – Rs. 5
• On a copy of a Decree or order – 50 paise

Court fees as per value of the Suit

• If the value of the suit exceeds Rs. 1,50,000-1,55,000 – Rs. 1700/-
• If the value of the suit exceeds Rs. 3,00,000-3,05,000 – Rs. 2450/-
• If the value of the suit exceeds Rs. 4,00,000-4,05,000 – Rs. 2950/-

How proceedings are conducted

Hearing

If on the first day of hearing, the court thinks that there is merit in the case, it will issue a notice to the opposite party, calling upon him to submit their arguments on a date fixed by the court.

After the notice is issued the plaintiff is required to do the following:

• File requisite amount of procedure-fee in the court.
• File 2 copies of plaint for each defendant in the court
• Of the 2 copies filed for each defendant, one copy shall be sent by Speed post/Courier/Regd. A.D. and the other copy shall be sent by Ordinary Post.
• Such filing should be done within a period of seven days from the date of order/notice.

Written Statement by Defendant

• Once the notice has been issued to the defendant, he is required to appear on the date mentioned in the notice. However, before appearing on the date, the defendant is required to file his “written statement” i.e., his defence against the allegation raised by the plaintiff.
• The written statement should be filed within 30 days from the date of service of notice, or within such time as given by the court.
• The maximum period that can be extended for filing of Written Statement is 90 days, after seeking permission of the court.
• The written statement should specifically deny the allegations, which according to defendant is wrong and false. Any allegation, not specifically denied, is deemed to be admitted.
• The written statement should also contain a verification from the Defendant, stating that, the content of the Written Statement are true and correct.

Replication by Plaintiff

The next step for plaintiff, once the Written Statement is filed by the Defendant, is to file a replication. Replication is a reply against the written statement, filed by the Plaintiff. The defences made by the Defendant in written statement is to be specifically denied by the Plaintiff in Replication. Anything which is not denied is deemed to be accepted.

Once the Replication is filed, the pleadings are stated to be complete.

Filing of Other Documents

After pleadings are completed and both the parties have filed their submissions, both the parties are given an opportunity to produce and file documents that are substantial to their claims. The procedure for filing other documents are as follows:

• There may be a situation where documents filed by one party is admitted by the opposite party.
• There can be another situation where the documents filed are denied by the opposite party. In that case it can be admitted by the witness produced by the party whose documents are denied.
• Once the documents are admitted, it shall be taken on record and all the details of suit shall be inscribed on the document as per Order 13 Rule 49 of Code of Civil Procedure.
• It is mandatory that any document which is filed by the parties must be “original” and a copy of such document shall be provided to the opposite party.
• Any document which is not filed or produced cannot be relied on during final arguments.

Framing of Issues

• The next stage in a civil proceeding is Framing of Issues. Issues are framed by the court on the basis of which arguments and examination of witnesses takes place.
• Issues are framed, keeping in view the disputes in the suit, and the parties are not allowed to go outside the purview of ‘Issues”.
• Issues framed may be of Fact or of Law.
• At the time of passing final order, the court will deal with each issue separately, and will pass judgements on each issue.

List of Witness/Cross Examination

• All the witnesses that the parties wish to produce, and examined, have to be presented before the court within 15 days from the date on which issues are framed or within such other period as the court may fix.
• Both the parties to the suit have to file a list of witnesses.
• The parties may either call the witnesses by themselves, or the court can ask the same by sending summons to witnesses.
• In case summons are issued by the court, then the party who asked for such presence of a witness, has to deposit money with the court for their expenses. This money deposited is known as “Diet Money”.
• On the date of hearing, the witnesses produced before the court will be examined by both the parties and once the cross examination is over at this stage the court will fix a date for final hearing.

Final Hearing

• On the day of final hearing, the arguments takes place which should be strictly confined to the issues framed.
• After hearing the final arguments of both the parties, the court shall pass a “final order”, either on the day of final hearing itself or on some other day fixed by the Court.
• However, before the final arguments, the parties to the suit can amend their pleadings with the permission of the court.

Appeal, Reference and Review

When an order is passed against a party, such party can further initiate the proceedings by way of:

• Appeal
• Reference, or
• Review

However, there are certain technicalities in filing an appeal, these are stated as follows:

• In case the value of the suit does not exceed Rs. 10,000, an appeal can only be filed on the question of law
• In case a decree is passed against the Defendant as “Ex-Parte” no appeal is allowed

Procedure for Appeal

1. The appeal has to be filed in the prescribed form, signed by the appellant, along with a certified copy of the order
2. If the appeal filed is against a decree for payment of money, the court may order the petitioner to deposit the disputed amount
3. Any issue which was not taken up by the appellant, in lower court, cannot be subsequently taken up in the appeal filed. The appeal lies only against those points which have been decided by the lower court; whether they were correct or not.

SAMPLE OF A CIVIL SUIT FILED UNDER SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT

IN THE COURT OF JUDICIAL MAGISTRATE 1ST CLASS, PATIALA.

Shashi Bansal aged about ___ years, son of Sh.Satpal Bansal, resident of House No.611, Sector 4, Panchkula (Haryana), through his Special Power of Attorney Rupesh Garg (Adhaar Card No. 8139 5914 2649) son of Raj Kumar Garg, resident of Flat No.17-D, City Centre Apartments, Patiala (Punjab). …Complainant

Versus

1. M/s. Allychem Laboratories E-68-69, Focal Point, Dera Bassi District Mohali – 140507 through its Directors
2. Ranjan Jain, Authorized Signatory, M/s. Allychem Laboratories, E-68-69, Focal Point, Dera Bassi District Mohali – 140507.
3. jagmohan Arora, Director, M/s. Allychem Laboratories, E-68-69, Focal Point, Dera Bassi District Mohali – 140507.
4. Ajay Kumar Chauhan, Director M/s. Allychem Laboratories, E-68-69, Focal Point, Dera Bassi District Mohali – 140507.
5. Khushal Pal Singh, Director, M/s. Allychem Laboratories, E-68-69, Focal Point, Dera Bassi District Mohali – 140507. …Accused Complaint under section 138 of Negotiable Instrument Act read with section 420 IPC.

Sir,

It is respectfully submitted as under:-

1. That the present complaint is being filed by the complainant through his Special Power of attorney namely Rupesh Garg son of Raj Kumar Garg, resident of Flat No.17-D, City Centre Apartments, Patiala (Punjab), who is even otherwise, well conversant with the facts of the present case. The power of attorney was duly attested by Sh. Y.P. Mahajan, Notary Public on dated 29.12.2017.
2. That the complainant has retired from Food Corporation of India and was personally known to the accused/directors i.e. Jagmohan Arora, Ajay Kumar Chauhan, Khushal Pal Singh and also known to authorized signatory Ranjan Jain. All the accused all had visiting relations with the complainant and as such, the accused gained mutual and good faith of the complainant.
3. That the accused borrowed Rs.15,00,000/- from the complainant i.e. Rs.10,00,000/- through cheque on dated 3.4.2012 and Rs.5,00,000/- in cash, for the purpose of their business needs as the accused are perpetuating their business under the name and style of M/s. Allychem Laboratories and all the accused gave assurance to return the said amount. The complainant having mutual faith believed the accused to be true.
4. That the complainant many a times approached and requested the accused for return of above said amount, but the accused have been dillydallying the matter on one pretext or other.
5. That thereafter, the complainant again approached and requested the accused to return the money but the accused firstly put off the matter and then in discharge of their legally enforceable liability/ debt, the accused issued three cheques from their company’s account duly signed by authorized signatory as well as directors in favour of the complainant towards return of above said amount. The accused issued three cheques i.e. cheque No.049926 dated 18.11.2017 for Rs.5,00,000/-, cheque No.049927 dated 18.11.2017 for Rs.5,00,000/- both drawn at Union Bank of India, Branch Main Branch, Chandigarh from their account No.309301010040712 in favour of the complainant and cheque No.032296 dated 18.11.2017 for Rs.5,00,000/- drawn at Punjab National Bank, Branch Sector 22 D, Chandigarh from their account No.0095008700568839 in favour of the complainant. The accused assured the complainant that whenever the cheque would be presented for encashment there would be sufficient funds in their account and the complainant received the cheque by believing the accused to be true. The said cheques were issued by the accused No.1 which was signed by its authorized signatories and directors. Further, the accused being Directors of the Company are responsible for day to day business and affairs of 4 the Company and the issuance of said cheques in discharge of their legally enforceable liability/debt is well within the knowledge of Directors of Company, who have been arrayed as addressees in this notice.
6. That out of above said cheques, as per the assurance of the accused, the complainant presented the cheque bearing No.049926 dated 18.11.2017 for encashment /clearance and the same were sent to the banker of the accused, but the said cheque was returned un-cashed to the complainant with a memo dated 20.11.2017 indicating, “Funds Insufficient” of the person issuing the said cheque and as such the said cheque was returned uncashed to the complainant.
7. That then the complainant got served a legal notice on 04.12.2017 upon the accused through his counsel under section 138 Negotiable Instrument Act bringing to their knowledge about the dishonour of the cheque on account of the reason mentioned above and requested the accused to make the payment of cheque amount within a period of 15 days from the date of receipt of legal notice. Notice was sent to the accused through registered post, but neither the accused responded to the legal notice nor made the payment of cheque amount till date, hence this complaint. 5
8. That the accused issued the cheques with malafide intention and knowingly that the cheques would be dishonoured due to above said reason and as such, the aforesaid cheques was not honoured and as such the accused have played fraud with the complainant, which falls wi*thin the four corner of section 138 Of Negotiable Instrument Act read with section 420 IPC.
9. That after borrowing the amount the accused deliberately took much time for return of payment and later on the accused deliberately put off the matter with ulterior motive but the accused cannot escape from their liability and the issuance of cheques is conclusive proof of liability towards all the accused.
10. That the above said cheque was presented and dishonoured at Patiala within the jurisdiction of this Hon’ble Court, hence this Hon’ble Court has got jurisdiction to try and decide the present complaint and to take cognizance of the offence committed by the accused.

It is therefore, prayed that the action be initiated against the accused under section 138 of the Negotiable Instrument Act and the accused be summoned and tried and be punished in accordance with law for the offence committed by him.

It is further prayed that in addition to the prescribed punishment under section 138 of Negotiable Instrument Act, the accused may be fined double the amount of the cheque in question by this Hon’ble Court. Submitted by; Dated: …

Complainant Through Counsel:

List of witnesses:-

1. Complainant.
2. Official of the bankers of the complainant alongwith relevant record.
3. Official of the banker of the accused alongwith relevant record.
4. Any other witness if required would be examined.

List of documents attached with the complaint.

1. Photocopy Power of Attorney
2. Original cheque
3. Original Bank Memo
4. Office Copy of Legal Notice
5. Original Postal Receipts
6. Bank Statement.
7. List of Directors as per website.

SAMPLE VAKALATNAMA

VAKALATNAMA

IN THE HON’BLE COURT OF:

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI

CIVIL JURISDICTION

(1)     ORIGINAL CONSUMER COMPLAINT NO.         OF 20

(U/s 21 (a) (i) of the Consumer Protection Act, 1986)

(2)               FIRST APPEAL NO.                                     OF 20

(U/s 19 of the Consumer Protection Act, 1986)

(3)               REVISION PETITION NO.                                 OF 20

(U/s 21 (b) of the Consumer Protection Act, 1986)

(4)      TRANSFER PETITION/APPLICATION  NO.        OF 20

(U/s 22 B of the Consumer Protection Act, 1986)

_____________________________________ NO.     OF 20

IN THE MATTER OF :

___________________________________________…Complainant (s) Petitioner (s)

Appellant (s)

Revisionist (s)

VERSUS

_________________________________________…Respondent (s)

Defendant (s)

Caveator (s)

I/We ____________________________________________________________

______________________________________ Complainant (s)/ Petitioner (s) / Appellant (s) / Respondent (s) / Caveator (s) in the above Original Consumer Complaint/Revision/First Appeal/ Transfer Petition etc. do hereby appoint and retain Mr……………………., Advocate, National Consumer Disputes Redressal Commission, New Delhi, as my/our counsel to plead and argue on my/our behalf. He is fully authorized to sign every relevant document and file any application (s). He will inspect the court files and records and will obtain certified copies of orders and documents.  He will continue to be my/our counsel in every further proceedings of Review, Revision, Appeal etc.  I/We undertake to pay the full fee of my/our counsel along with full misc. expenses charges before first argument of the above case before National Consumer Disputes Redressal Commission, New Delhi.   If the entire settled fee is not paid as and when demanded, then the counsel is not bound to appear in the court and attend any work on my/our behalf. If the matter is decided or any order is passed against me/us then the counsel will not be responsible and answerable for the same in any manner.   Also, he is fully authorized to engage any other counsel along with him or in his place.  I/we also agree to pay such new counsel engaged by my/our counsel.  The counsel will be entitled to receive and retain any cost awarded to me/us as his extra cost of appearances apart from his fee. He will not be responsible to pay any cost awarded against me/us.   Every act done by the counsel in good faith will be binding on me/us.

Dated this ____________ day of____________, 20

MEMO OF APPEARANCE

To

The Registrar

National Consumer Disputes

Redressal Commission,

New Delhi

Sir,

Kindly enter my appearance on behalf of the Complainant (s)/ Petitioner (s) / Appellant (s) / Respondent (s) / Caveator (s) etc in the above mentioned matter.

Yours faithfully,

New Delhi

Filed on:

VAKALATNAMA

IN THE HON’BLE HIGH COURT OF ………………..

_____________________________________ NO.     OF 20

IN THE MATTER OF :

___________________________________________… Petitioner (s)

Appellant (s)

Revisionist (s)

VERSUS

_________________________________________…Respondent (s)

Defendant (s)

Caveator (s)

I/We ____________________________________________________________

______________________________________ Petitioner (s) / Appellant (s) / Respondent (s) / Caveator (s) in the above Writ Petition/ Revision/First Appeal/ Second Appeal,                       etc. do hereby appoint and retain Mr. …………………………., Advocate, as my/our counsel to plead and argue on my/our behalf. He is fully authorized to sign every relevant document and file any application (s). He will inspect the court files and records and will obtain certified copies of orders and documents.  He will continue to be my/our counsel in every further proceedings of Review, Revision, Appeal etc.  I/We undertake to pay the full fee of my/our counsel along with full misc. expenses charges before first argument of the above case. If the entire settled fee is not paid as and when demanded, then the counsel is not bound to appear in the court and attend any work on my/our behalf. If the matter is decided or any order is passed against me/us then the counsel will not be responsible and answerable for the same in any manner.   Also, he is fully authorized to engage any other counsel along with him or in his place.  I/we also agree to pay such new counsel engaged by my/our counsel.  The counsel will be entitled to receive and retain any cost awarded to me/us as his extra cost of appearances apart from his fee. He will not be responsible to pay any cost awarded against me/us.   Every act done by the counsel in good faith will be binding on me/us.

Dated this ____________ day of____________, 20

MEMO OF APPEARANCE

To

The Registrar

Hon’ble Punjab & Haryana High Court

at Chandigarh

Sir,

Kindly enter my appearance on behalf of the Petitioner (s) / Appellant (s) / Respondent (s) / Caveator (s) etc in the above mentioned matter.

Yours faithfully,

Chandigarh

Filed on:

ADVOCATE

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In this article, Hardeep Singh of 3rd year, Campus Law Centre discusses How can parents claim maintenance from their child.

Introduction

A person to live a dignified life, requires basic amenities like food, clothing, shelter and other necessary requirements. It is the moral duty of a man to provide the above mentioned amenities to his wife, parents and children in form of maintenance. Maintenance is the process of maintaining or preserving someone. Prior to 1973, there was no provision for maintenance of parents under the Code of Criminal Procedure. However, the provision for maintenance was introduced in for the first time in Section 125 of the Code of Criminal Procedure in 1973.

Section 125 of the Criminal Procedure Code, 1973 was enacted to provide an effective remedy for the neglected persons to seek maintenance. However in 2007, the Maintenance and Welfare of Parents and Senior Citizens Act was passed which provides provisions for maintenance to support elderly parents and senior citizens. Parents can claim maintenance either under Section 125 of Code of Criminal Procedure, 1973 or under Maintenance and Welfare of Parents and Senior Citizens Act, 2007. However, they cannot claim maintenance under both the acts.  

Maintenance under the Maintenance and Welfare of Parents and Senior Citizens Act, 2007

The Maintenance and Welfare of Parents and Senior Citizens Act, 2007 seeks to make a legal obligation for children and legal heirs to provide maintenance to senior citizens. It even permits state governments to establish old age homes in every district. The Maintenance and Welfare of Parents and Senior Citizens Act, 2007 act authorizes State governments to set up maintenance tribunals and appellate tribunals to decide the matters related to maintenance of the elderly. The act gives a right to the senior citizens and parents to apply to a maintenance tribunal seeking a monthly allowance from their children or legal heirs.

What is Maintenance?

Maintenance is defined in Section 2(b) of the Maintenance and Welfare of Parents and Senior Citizens Act, 2007 as “maintenance includes provision for food, clothing, residence and medical attendance and treatment.”

Who can claim Maintenance under the Act?

Under Maintenance and Welfare of Parents and Senior Citizens Act, 2007 the maintenance can be claimed by parents, grand parents and senior citizens.

• Parents

For the purpose of this act Parents include: father or mother whether biological, adoptive or step father or step mother. However it is pertinent to mention here that it is not the requirement of the Act that the parents should be senior citizens.

• Grand Parents

Grandparents includes both maternal and paternal grandparents.

Conditions to claim Maintenance

The condition prior to claiming maintenance by the above mentioned people under this Act is that the persons must be unable to maintain themselves from their own earnings.

Who is liable to pay Maintenance?

Adult Children in case of Parents and adult grandchildren in case of grandparents, both male and female, are responsible/liable to pay maintenance to parents and grandparents.

If in case the parents or senior citizens don’t have any children or grandchildren, they can claim maintenance from their relatives. The conditions under which parents and senior citizens can claim maintenance from relatives are as follows:

1. The relative must be a major.
2. The relative should have sufficient means to provide maintenance.
3. The relative should either be possessing the property of the senior citizens or they will inherit the property after the death of senior citizen.
4. In case there are more than one relative, who are likely to inherit the property of the senior citizen, then maintenance must be paid by relatives in proportion to their inheritance of the property.

How to apply for Maintenance

1. An application can be made under Section 4 of the Act, by a senior citizen or parent to the tribunal constituted for resolving maintenance claims by giving details of the person from whom maintenance is demanded.
2. Maintenance proceedings may be initiated against the specified child/relative in any district where such citizen lives.
3. If any person is incapable to make an application, then any other person or registered voluntary organization authorized by him/her can make the application.
4. The tribunal will then issue a notice to the children/relatives, conducts hearings and pronounce a maintenance order.
5. In case there is a failure in making the payment of maintenance as ordered by the tribunal without sufficient reason for three months after its due date, the senior citizen or parents, as the case may be, can approach the tribunal again.
6. In case of such delay the children/relatives are punishable with fine or imprisonment upto one month which may extend till the payment is made.
7. The act provides that no party to a proceeding before the Maintenance Tribunal will be represented by a lawyer. However, parents or senior citizens can avail the services of the State Government appointed Maintenance officer to represent the parties during the proceedings before the Maintenance Tribunal.

Maintenance and Welfare of Parents and Senior Citizens (Amendment) Bill, 2018

The government brought the Maintenance and Welfare of Parents and Senior Citizens (Amendment) Bill, 2018 by which the government has tried to expand the ambit of social security for the elderly people by:

1. Making distant relatives responsible for their maintenance,
2. Increasing the amount of fine payable and the period for imprisonment for abandoning parents. Now the imprisonment would be upto six months with a fine upto Rs. 10,000 or both.
3. The most important change brought in by the government is removing the financial cap of Rs. 10,000 for the maintenance of parents. However, it is felt that while removing this cap is adequate for the rural areas or small towns but it is inadequate in bigger/metropolitan cities.
4. The definition of “children” has been expanded under the amendment bill to include daughter-in-law and son-in-law. This means that, so far, a daughter, son, grandson or granddaughter was responsible for the care of parents and senior citizens. But from now on, even the daughter-in-law and son-in-law, a minor through its guardian or a relative of a childless elderly would be held responsible for their care.

Maintenance under Section 125 of Code of Criminal Procedure

Section 125(1)(d) of the Code of Criminal Procedure discusses about the maintenance for parents to be provided by children. The section states that “If any person having sufficient means neglects or refuses to maintain his father or mother, unable to maintain himself or herself, a magistrate of the first class may, upon proof of such neglect or refusal, order such person to make a monthly allowance for the maintenance of his wife or such child, father or mother, at such monthly rate not exceeding five hundred rupees in the whole, as such Magistrate thinks fit, and to pay the same to such person as the Magistrate may from time to time direct”.

Who is liable to pay maintenance

Section 125 of Cr.P.C states that both mother and father, whether natural or adoptive, can claim maintenance from any of their children. Under Section 125 even daughters are liable to pay maintenance to her mother and father. In case of step mother, she can claim maintenance only if she is a widow and doesn’t have any natural-born sons or daughters. Married daughters are also liable to pay maintenance to parents if they are solely dependant on her.

Conditions required for claiming maintenance

1. Father or mother must be unable to maintain himself or herself: By giving a plain meaning to the language used in section 125(1)(d), it seems that there are only two circumstances under which parents can claim maintenance, which are as follows:

• The parents must be unable to maintain themself
• The person against whom an order under Section 125 of Cr.P.C is passed by the court must have sufficient means/resources to maintain his/her parents and yet neglects or refuses to maintain them.

The provision in section 125 is one of general application. The provision provides the statutory recognition of the obligation that a son who has sufficient means is bound to maintain a father or mother who is unable to maintain himself or herself. The above mentioned provision is incorporated under Code of Criminal Procedure for the first time recognising the right of infirm parents who are unable to maintain themselves to be maintained by their son or daughter who is possessed of sufficient means as also providing a remedy to enforce that right.

2. Daughter is liable to pay maintenance to parents: There can be no doubt that it is the moral obligation of a son or a daughter to maintain his or her parents. The parents will be entitled to claim maintenance against their daughter provided the above mentioned conditions are fulfilled. However, before passing an order in favour of parents against their married daughter, the court must be satisfied that the daughter has sufficient means of her own which should be independent from that of her husbands.
3. Adoptive mother can claim maintenance: The Bombay High Court in Baban Alias Madhav Dagadu Dange v. Parvatibai Dagadu Dange observed that according to the definitions given in the General Clauses Act, the expression “father” includes both natural as well as adoptive father. It is true that the General Clauses Act has not defined the expression “mother”. But that does not means that the expression should be taken in its restrictive sense. Now if expression “father” and “son” is to be given wider interpretation, there is no valid reason why the expression “mother” should not be given similar wider interpretation so as to include an “adoptive mother” as well.
4. Step-mother can claim maintenance: The Hon’ble Supreme Court in Kirtikant D. Vadodaria v. State of Gujarat and Ors. held that “a childless step-mother may claim maintenance from her step-son provided she is a widow or her husband, if living, is also incapable of supporting and maintaining her”. However the Karnataka High Court in Ulleppa v. Gangabai added its view to the judgement pronounced by Supreme Court in Kirtikant D. Vadodaria v. State of Gujarat. The court observed that if it is proved that step mother has other modes of maintaining herself she may not be able to get maintenance from her step sons.

Difference between Section 125 of Code of Criminal Procedure and The maintenance and Welfare of Parents and Senior Citizens Act, 2007

There is a considerable difference between the two acts. Some of these differences are discussed below in the table:

Obligation of children to maintain their parents under Personal Laws

Hindu Adoption and Maintenance Act, 1956

The Hindu Adoption and Maintenance Act, 1956 is the first personal law statute in India, which imposes an obligation on the children to maintain their parents. The obligation to maintain parents is not confined to sons only, even the daughters have an equal obligation/duty to maintain their parents. It is to be kept in mind that parents who are financially unable to maintain themselves from any source, only they are entitled to seek maintenance under this act.

According to Section 20 of Hindu Adoption and Maintenance Act, 1956 it is the obligation of children to maintain there aged infirm parents (children here includes legitimate as well as illegitimate). The term ‘children’ under Hindu Adoption and Maintenance Act, 1956 does not include grandson and granddaughter. The liability to maintain parents is personal and is not dependent on the possession of property (as is the case of proceedings under Maintenance and Welfare of Parents and Senior Citizens Act) and this obligation ceases with the death of the person liable to maintain.

Muslim Law

Under the Islamic principles, if the children have a right to be maintained by their parents, they also have a corresponding duty to provide maintenance to their parents. Rules of Muslim Law, relating to maintenance of parents are stated as under:

1. The children are bound to maintain their parents only if they are financially sound and the parents are poor. In other words, only those parents who are in need are entitled to get maintenance from their children.
2. Both the son and daughter have equal duty to maintain their parents.Their responsibility to maintain the parents is joint and equal. But if one child is poor and the other is in easy circumstances, then the liability to maintain parents lies on the child who is in easy circumstances.
3. However a son, though poor and in strained circumstances, is bound to maintain his mother, only if she is poor. In other case if a son is poor but is earning something for its livelihood, he is bound to support his poor father who earns nothing.
4. If the child is in a position that he/she can only support one of its parents, always the mother gets priority over father.
5. If in case the children are unable to support their parents separately, they may be compelled to take their parents with them and to live together.
6. Under muslim law, son is not bound to maintain his step mother.

Christian and Parsi Law

The Christians and Parsis have no personal laws providing for maintenance for the parents. Parents who seeks maintenance from their children have to apply under provisions of the Code of Criminal Procedure or Maintenance and Welfare of Parents and Senior Citizens Act.

Comparative Analysis of Different Laws under which Parents can claim Maintenance

Court Procedure one needs to follow

Procedure for claiming maintenance under Maintenance and Welfare of Parents and Senior Citizens Act, 2007

Section 6 of the Maintenance and Welfare of Parents and Senior Citizens Act, 2007 provides for the procedure for claiming maintenance. The procedure is as follows:

1. An application under Section 5 can be filed against any children or relative in any district where he/she resides or last resided.
2. On receipt of the application under Section 5, the Tribunal shall issue a process for procuring the presence of children or relative against whom the application is filed.
3. For securing the attendance of children or relative the Tribunal shall have the power (same as that of a Judicial Magistrate of first class as provided under the Code of Criminal Procedure, 1973)
4. All evidence that are produced in such proceedings shall be taken in the presence of the children or relative against whom an order for payment of maintenance is proposed to be made, and shall be recorded in the manner prescribed for summons cases.
5. However if the Tribunal is satisfied that the children or relative against whom an order for payment of maintenance is proposed to be made is willfully avoiding service, or willfully neglecting to attend the Tribunal, the Tribunal may proceed to hear and determine the case ex parte.
6. Where the children or relative is residing out of India, the summons shall be served by the Tribunal through such authority, as the Central Government may by notification in the official Gazette, specify in this behalf.
7. The Tribunal before hearing an application under section 5 may, refer the same to a Conciliation Officer and such Conciliation Officer shall submit his findings within one month and if amicable settlement has been arrived at, the Tribunal shall pass an order to that effect.

Procedure for claiming maintenance under Section 125 of Code of Criminal Procedure

1. An application for maintenance may be filed against any person, liable to pay the same, in any district where the parents resides or where the child resides.
2. Maintenance cases under Section 125 can only be heard by a Judicial Magistrate of First Class.
3. After producing and securtinising the evidence, the judicial magistrate of First Class may pass an order for maintenance.
4. Maintenance is either payable from the date of order of payment or from the date of the application made for maintenance, depending on court’s judgement.
5. Once a maintenance order is passed, a copy of the same must be supplied to the claimant free of cost.
6. The person who is ordered to pay maintenance must obey the court order. However, failure to do so without sufficient reason, the court can issue a warrant against such person for collecting the amount due or can attach any immovable property or salary of such person.

Conclusion

The elderly, as a distinctive group of the world population, are entitled to a comfortable and secure environment with their needs addressed. In the recent times, with the introduction of Maintenance and Welfare of Parents and Senior Citizens Act, 2007, the concept of maintenance for elderly has been given a wide scope as it not only includes parents but even grandparents and childless parents as well. According to me, filing an application under the above mentioned Act for claiming maintenance is the best option available as compared to filing an application under Cr.P.C or the personal laws.

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This article is written by Amit Garg of National University of Study and Research in Law, Ranchi. The author through this article brings out the difference between kidnapping and abduction under the Indian Penal Code.

Introduction

Kidnapping

• Section 359 of the Indian Penal Code deals with what is ‘Kidnapping’. According to this section, kidnapping can be classified as ‘Kidnapping from India’ or ‘Kidnapping from Lawful Guardianship’.

• Section 360 of the Code says that when a person is conveyed beyond the limits of India without that person’s consent, the person who takes such person is said to kidnap that person from India.
• Section 361 of the Code provides that when a person entices a minor (16 years for male and 18 years for female) or a person of unsound mind, person so enticing will be held liable for kidnapping such minor or person from lawful guardianship.
• In the case of State of Haryana v Raja Ram [1], the accused induced the prosecutrix who was 14 years of age away from her lawful guardianship. The Supreme Court held that the persuasion by the accused created a willing on the part of minor which kept her away from her lawful guardianship and therefore it amounted to ‘kidnapping’.

Abduction

• ‘Abduction’ has been defined in Section 362 of the Indian Penal Code which says that if a person either by force compels a person or induces another person to go from any place is said to abduct such person.
• In the case of Bahadur Ali v King Emperor [2], the accused misrepresented himself as a police constable and kept a girl in his house for a ransom of Rs 600. The court held that his act amounted to abduction.

Difference between abduction and kidnapping

Age of the Aggrieved Person

• In case of Kidnapping, the age of the aggrieved person as according to Section 361 of the IPC is 16 in case of males and 18 in case of females (as seen in the case of State of Haryana v Raja Ram).
• In case of Abduction, there is no such thing as age. Any person either by force has compelled or induced any other person to go from any place irrespective of the age, shall be booked with abduction (as in the case of Bahadur Ali v King Emperor).

Removal from Lawful Guardianship

• Here the lawful guardianship shall include any person who has been authorized by law to take care of the person who has yet not attained the age of majority. A lawful guardian may be the parents, in-laws, etc.
• As Kidnapping takes into consideration the age of the person being kidnapped, the crime involves the taking away from the guardianship of a lawful person who has been authorized by law to take care of such minor.
• Since Abduction considers only the person who has been abducted, lawful guardianship does not come into the picture.

Means

• Kidnapping involves taking away or enticement by the kidnapper. The means used for such purpose is irrelevant.
• The means used in case of abduction may be force, compulsion, or deceitful means.

Consent

• In case of Kidnapping, the consent of the person kidnapped is immaterial as the person being kidnapped is a minor and according to law, such person is unable to provide for free consent. The consent obtained from the person shall be a tainted one (as seen in the case of State of Haryana v Raja Ram).
• In case of Abduction, the consent of the person abducted condones the accused from the offence so charged against him/her.

The intention of the Accused

• In case of Kidnapping, the intention of the person kidnapping a minor is immaterial so as to the crime committed by the accused (as in the case of Queen v Prince [3]).
• In case of Abduction, the intention of the person abducting is a very important factor in determining the guilt of the accused person.

Punishment

• Kidnapping is a substantive offence. Section 363 of the IPC provides for a punishment for kidnapping for a descriptive term which may extend to seven years and he/she shall also be liable for fine.
• Some specific punishments as provided for kidnapping under the Indian Penal Code are:

• Abduction is only an auxiliary act and is not punishable in itself. Therefore, there is no general punishment for abduction in the Indian Penal Code.
• But some specific types of abduction attract the following punishments:

Continuity of the Crime

• Kidnapping is not a continuing offence. The offence is done as soon as the person accused removes the person from his/her lawful guardianship.
• Abduction is a continuing process and it this the person so abducted is removed from one place to another.

End Notes:

[1] AIR 1973 SC 819.

[2] AIR 1923 Lah 158.

[3] (1875) LR 2.

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This article is written by Ranojoy Middya of Lloyd Law College. The article discusses the 7th Schedule of the Indian Constitution.

Whenever we talk about the constitution of a federal nation, the major characteristics comes into our mind is the distribution of power between the Union and the State. But as far as the Indian Constitution is the concern, it is a bit divergent in nature because the concept of federalism our constitution follows conceivably ensues from the peculiar needs of our countrymen which subsequently framed a sui generis kind of federalism in India. In the context of dissemination of legislative powers, the framer of our constitution did maintain a similarity along with the pattern laid down by the Government of India Act, 1935 which allowed the predominance to be given to the union parliament over the state legislature or assemblies. The legislative powers revolve around the scheme of distribution of powers between the union and state legislature which is provided in the three lists under the 7th schedule of the constitution which entails.

Here is the detailed information about those lists under the constitution.

Union List (List I) (Parliament Legislation)

This list contains 97 items and comprises of the subjects which are of national importance and admit of uniform laws for the whole of the country. And the legislative powers to legislate these matters are solely vested in the union parliament. The integral subjects which falls within the ambit of Union List are: Defense, Foreign Affairs, Currency and Coinage, War and Peace, Atomic Energy, National Resources, Railways, Post and Telegraph, Citizenship, Navigation and Shipping, Foreign Trade, Inter-State Trade and Commerce, Banking, Insurance, National Highways, Census, Election, Institutions of higher education and others.

SEVENTH SCHEDULE

(Article 246)

List I—Union List

(Parliament Legislation)

1. Defense of India and every part thereof including preparation for defense and all such acts as may be conducive in times of war to its prosecution and after its termination to effective demobilization.
2. Naval, military and air forces; any other armed forces of the Union.

2A. Deployment of any armed force of the Union or any other force subject to the control of the Union or any contingent or unit thereof in any State in aid of the civil power; powers, jurisdiction, privileges, and liabilities of the members of such forces while on such deployment.

3. Delimitation of cantonment areas, local self-government in such areas, the constitution and powers within such areas of cantonment authorities and the regulation of house accommodation (including the control of rents) in such areas.
4. Naval, military and air force works.
5. Arms, firearms, ammunition, and explosives.
6. Atomic energy and mineral resources necessary for its production.
7. Industries declared by Parliament by law to be necessary for the purpose of defense or for the prosecution of the war.
8. Central Bureau of Intelligence and Investigation.
9. Preventive detention for reasons connected with Defence, Foreign Affairs, or the security of India; persons subjected to such detention.
10. Foreign affairs; all matters which bring the Union into relation with any foreign country.
11. Diplomatic, consular and trade representation.
12. United Nations Organisation.
13. Participation in international conferences, associations and other bodies and implementing of decisions made thereat.
14. Entering into treaties and agreements with foreign countries and implementing of treaties, agreements, and conventions with foreign countries.
15. War and peace.
16. Foreign jurisdiction.
17. Citizenship, naturalization, and aliens.
18. Extradition.
19. Admission into, and emigration and expulsion from, India; passports and visas.
20. Pilgrimages to places outside India.
21. Piracies and crimes committed on the high seas or in the air; offenses against the law of nations committed on land or the high seas or in the air.
22. Railways.
23. Highways declared by or under law made by Parliament to be national highways.
24. Shipping and navigation on inland waterways, declared by Parliament by law to be national waterways, as regards mechanically propelled vessels; the rule of the road on such waterways.
25. Maritime shipping and navigation, including shipping and navigation on tidal waters; provision of education and training for the mercantile marine and regulation of such education and training provided by States and other agencies.
26. Lighthouses, including lightships, beacons and other provision for the safety of shipping and aircraft.
27. Ports declared by or under law made by Parliament or existing law to be major ports, including their delimitation, and the constitution and powers of port authorities therein.
28. Port quarantine, including hospitals connected therewith; seamen’s and marine hospitals.
29. Airways; aircraft and air navigation; provision of aerodromes; regulation and organization of air traffic and of aerodromes; provision for aeronautical education and training and regulation of such education and training provided by States and other agencies.
30. Carriage of passengers and goods by railway, sea or air, or by national waterways in mechanically propelled vessels.
31. Posts and telegraphs; telephones, wireless, broadcasting and other like forms of communication.
32. Property of the Union and the revenue therefrom, but as regards property situated in a State subject to legislation by the State, save in so far as Parliament by law otherwise provides.
33. Courts of wards for the estates of Rulers of Indian States.
34. The public debt of the Union.
35. Currency, coinage and legal tender; foreign exchange.
36. Foreign loans.
37. Reserve Bank of India.
38. Post Office Savings Bank.
39. Lotteries organized by the Government of India or the Government of a State.
40. Trade and commerce with foreign countries; import and export across customs frontiers; definition of customs frontiers.
41. Inter-State trade and commerce.
42. Incorporation, regulation and winding up of trading corporations, including banking, insurance, and financial corporations, but not including co-operative societies.
43. Incorporation, regulation and winding up of corporations, whether trading or not, with objects not confined to one State, but not including universities.
44. Banking.
45. Bills of exchange, cheques, promissory notes and other like instruments.
46. Insurance.
47. Stock exchanges and futures markets.
48. Patents, inventions, and designs; copyright; trade-marks and merchandise marks.
49. Establishment of standards of weight and measure.
50. Establishment of standards of quality for goods to be exported out of India or transported from one State to another.
51. Industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest.
52. Regulation and development of oilfields and mineral oil resources; petroleum and petroleum products; other liquids and substances declared by Parliament by law to be dangerously inflammable.
53. Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union are declared by Parliament by law to be expedient in the public interest.
54. Regulation of labor and safety in mines and oilfields.
55. Regulation and development of inter-State rivers and river valleys to the extent to which such regulation and development under the control of the Union are declared by Parliament by law to be expedient in the public interest.
56. Fishing and fisheries beyond territorial waters.
57. Manufacture, supply, and distribution of salt by Union agencies; regulation and control of the manufacture, supply and distribution of salt by other agencies.
58. Cultivation, manufacture, and sale for export, of opium.
59. Sanctioning of cinematograph films for exhibition.
60. Industrial disputes concerning Union employees.
61. The institutions known at the commencement of this Constitution as the National Library, the Indian Museum, the Imperial War Museum, the Victoria Memorial and the Indian War Memorial, and any other like institution financed by the Government of India wholly or in part and declared by Parliament by law to be an institution of national importance.
62. The institutions are known at the commencement of this Constitution as the Banaras Hindu University, the Aligarh Muslim University, and the Delhi University; the University established in pursuance of article 371E; any other institution declared by Parliament by law to be an institution of national importance.
63. Institutions for scientific or technical education financed by the Government of India wholly or in part and declared by Parliament by law to be institutions of national importance.
64. Union agencies and institutions for—

(a) professional, vocational or technical training, including the training of police officers; or

(b) the promotion of special studies or research; or

(c) scientific or technical assistance in the investigation or detection of crime.

66. Coordination and determination of standards in institutions for higher education or research and scientific and technical institutions.
67. Ancient and historical monuments and records, and archaeological sites and remains, [declared by or under law made by Parliament] to be of national importance.
68. The Survey of India, the Geological, Botanical, Zoological and Anthropological Surveys of India; Meteorological organizations.
69. Census.
70. Union Public Service; All-India Services; Union Public Service Commission.
71. Union pensions, that is to say, pensions payable by the Government of India or out of the Consolidated Fund of India.
72. Elections to Parliament, to the Legislatures of States and to the offices of President and Vice-President; the Election Commission.
73. Salaries and allowances of members of Parliament, the Chairman and Deputy Chairman of the Council of States and the Speaker and Deputy Speaker of the House of the People.
74. Powers, privileges, and immunities of each House of Parliament and of the members and the Committees of each House; enforcement of attendance of persons for giving evidence or producing documents before committees of Parliament or commissions appointed by Parliament.
75. Emoluments, allowances, privileges, and rights in respect of leave of absence, of the President and Governors; salaries and allowances of the Ministers for the Union; the salaries, allowances, and rights in respect of leave of absence and other conditions of service of the Comptroller and Auditor-General.
76. Audit of the accounts of the Union and of the States.
77. Constitution, organization, jurisdiction, and powers of the Supreme Court (including contempt of such Court), and the fees taken therein; persons entitled to practice before the Supreme Court.
78. Constitution and organization 1[(including vacations)] of the High Courts except for provisions as to officers and servants of High Courts; persons entitled to practice before the High Courts.
79. Extension of the jurisdiction of a High Court to, and exclusion of the jurisdiction of a High Court from, any Union territory.
80. Extension of the powers and jurisdiction of members of a police force belonging to any State to any area outside that State, but not so as to enable the police of one State to exercise powers and jurisdiction in any area outside that State without the consent of the Government of the State in which such area is situated; extension of the powers and jurisdiction of members of a police force belonging to any State to railway areas outside that State.
81. Inter-State migration; inter-State quarantine.
82. Taxes on income other than agricultural income.
83. Duties of customs including export duties.
84. Duties of excise on tobacco and other goods manufactured or produced in India except—

(a) alcoholic liquors for human consumption;

(b) opium, Indian hemp and other narcotic drugs and narcotics,

but including medicinal and toilet preparations containing alcohol or any

a substance included in sub-paragraph (b) of this entry.

85. Corporation tax.
86. Taxes on the capital value of the assets, exclusive of agricultural land, of individuals and companies; taxes on the capital of companies.
87. Estate duty in respect of property other than agricultural land.
88. Duties in respect of succession to property other than agricultural land.
89. Terminal taxes on goods or passengers, carried by railway, sea or air; taxes on railway fares and freights.
90. Taxes other than stamp duties on transactions in stock exchanges and futures markets.
91. Rates of stamp duty in respect of bills of exchange, cheques, promissory notes, bills of lading, letters of credit, policies of insurance, transfer of shares, debentures, proxies, and receipts.
92. Taxes on the sale or purchase of newspapers and on advertisements published therein.

92A. Taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter-State trade or commerce.

92B. Taxes on the consignments of goods (whether the consignment is to the person making it or to any other person), where such consignment takes place in the course of inter-State trade or commerce.

92C. Taxes on services.

93. Offenses against laws with respect to any of the matters in this List.
94. Inquiries, surveys, and statistics for the purpose of any of the matters in this List.
95. Jurisdiction and powers of all courts, except the Supreme Court, with respect to any of the matters in this List; admiralty jurisdiction.
96. Fees in respect of any of the matters in this List, but not including fees taken in any court.
97. Any other matter not enumerated in List II or List III including any tax not mentioned in either of those Lists.

State List (List II)(State Legislation)

This list contains 66 items and speaks about the subject matters those are related to local or state interest hence it directly falls within the legislative competence of state legislature. The major ones of the State List are: state court fees, prisons, local government, public order, police, public health and sanitation, hospitals and dispensaries, pilgrimages within India, intoxicating liquors, relief of disabled and unemployable, libraries, communications, agriculture, animal husbandry, water supply, irrigation and canals, fisheries, road passenger tax and goods tax, capitation tax and others.

SEVENTH SCHEDULE

(Article 246)

List II—State List

(State Legislation)

1. Public order (but not including [the use of any naval, military or air force or any other armed force of the Union or of any other force subject to the control of the Union or of any contingent or unit thereof] in aid of the civil power).
2. Police (including railway and village police) subject to the provisions of entry 2A of List I.
3. Officers and servants of the High Court; procedure in rent and revenue courts; fees taken in all courts except the Supreme Court.
4. Prisons, reformatories, Borstal institutions and other institutions of a like nature, and persons detained therein; arrangements with other States for the use of prisons and other institutions.
5. Local government, that is to say, the constitution and powers of municipal corporations, improvement trusts, districts boards, mining settlement authorities and other local authorities for the purpose of local self-government or village administration.
6. Public health and sanitation; hospitals and dispensaries.
7. Pilgrimages, other than pilgrimages to places outside India.
8. Intoxicating liquors, that is to say, the production, manufacture, possession, transport, purchase, and sale of intoxicating liquors.
9. Relief for the disabled and unemployable.
10. Burials and burial grounds; cremations and cremation grounds.
11. Libraries, museums, and other similar institutions controlled or financed by the State; ancient and historical monuments and records other than those declared by or under law made by Parliament] to be of national importance.
12. Communications, that is to say, roads, bridges, ferries, and other means of communication not specified in List I; municipal tramways; ropeways; inland waterways and traffic thereon subject to the provisions of List I and List III with regard to such waterways; vehicles other than mechanically propelled vehicles.
13. Agriculture, including agricultural education and research, protection against pests and prevention of plant diseases.
14. Preservation, protection, and improvement of stock and prevention of animal diseases; veterinary training and practice.
15. Pounds and the prevention of cattle trespass.
16. Water, that is to say, water supplies, irrigation and canals, drainage and embankments, water storage and water power subject to the provisions of entry 56 of List I.
17. Land, that is to say, rights in or over land, land tenures including the relation of landlord and tenant, and the collection of rents; transfer and alienation of agricultural land; land improvement and agricultural loans; colonization.
18. Fisheries.
19. Courts of wards subject to the provisions of entry 34 of List I; encumbered and attached estates.
20. Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the Union.
21. Industries subject to the provisions of 2[entries 7 and 52] of List I.
22. Gas and gas-works.
23. Trade and commerce within the State subject to the provisions of entry 33 of List III.
24. Production, supply, and distribution of goods subject to the provisions of entry 33 of List III.
25. Markets and fairs.
26. Money-lending and money-lenders; relief of agricultural indebtedness.
27. Inns and innkeepers.
28. Incorporation, regulation and winding up of corporations, other than those specified in List I, and universities; unincorporated trading, literary, scientific, religious and other societies and associations; co-operative societies.
29. Theatres and dramatic performances; cinemas subject to the provisions of entry 60 of List I; sports, entertainments, and amusements.
30. Betting and gambling.
31. Works, lands, and buildings vested in or in the possession of the State.
32. Elections to the Legislature of the State subject to the provisions of any law made by Parliament.
33. Salaries and allowances of members of the Legislature of the State, of the Speaker and Deputy Speaker of the Legislative Assembly and, if there is a Legislative Council, of the Chairman and Deputy Chairman thereof.
34. Powers, privileges and immunities of the Legislative Assembly and of the members and the committees thereof, and, if there is a Legislative Council, of that Council and of the members and the committees thereof; enforcement of attendance of persons for giving evidence or producing documents before committees of the Legislature of the State.
35. Salaries and allowances of Ministers for the State.
36. State public services; State Public Service Commission.
37. State pensions, that is to say, pensions payable by the State or out of the Consolidated Fund of the State.
38. The public debt of the State.
39. Treasure trove.
40. Land revenue, including the assessment and collection of revenue, the maintenance of land records, survey for revenue purposes and records of rights, and alienation of revenues.
41. Taxes on agricultural income.
42. Duties in respect of succession to agricultural land.
43. Estate duty in respect of agricultural land.
44. Taxes on lands and buildings.
45. Taxes on mineral rights subject to any limitations imposed by Parliament by law relating to mineral development.
46. Duties of excise on the following goods manufactured or produced in the State and countervailing duties at the same or lower rates on similar goods manufactured or produced elsewhere in India:—

(a) alcoholic liquors for human consumption;

(b) opium, Indian hemp and other narcotic drugs and narcotics; but not including medicinal and toilet preparations containing alcohol or any substance included in sub-paragraph (b) of this entry.

52. Taxes on the entry of goods into a local area for consumption, use or sale therein.
53. Taxes on the consumption or sale of electricity.
54. Taxes on the sale or purchase of goods other than newspapers, subject to the provisions of entry 92A of List I.
55. Taxes on advertisements other than advertisements published in the newspapers and advertisements broadcast by radio or television.
56. Taxes on goods and passengers carried by road or on inland waterways.
57. Taxes on vehicles, whether mechanically propelled or not, suitable for use on roads, including tramcars subject to the provisions of entry 35 of List III.
58. Taxes on animals and boats.
59. Tolls.
60. Taxes on professions, trades, callings, and employment.
61. Capitation taxes.
62. Taxes on luxuries, including taxes on entertainments, amusements, betting, and gambling.
63. Rates of stamp duty in respect of documents other than those specified in the provisions of List I with regard to rates of stamp duty.
64. Offenses against laws with respect to any of the matters in this List.
65. Jurisdiction and powers of all courts, except the Supreme Court, with respect to any of the matters in this List.
66. Fees in respect of any of the matters in this List, but not including fees taken in any court.

Concurrent List (List III) (Parliament & State Legislation)

This list is the most distinctive feature of Indian Constitution as it cannot be found in any other federal constitutions. Among the 47 items enumerated in the list, all can be legislated by both union parliament and the state legislature as both of them possess the concurrent power of legislation. This particular list mostly serves as a device to loosen the excessive rigidity of the two-fold distribution. It is mostly reckoned as the twilight zone of the constitution as it allows the legislative power to vary from state legislature to parliament based on the importance of the matters. Like in case of not so important matters, state legislature takes the charge and in case of important ones, Parliament does the same. Also in terms of amplification of laws passed by union parliament state legislatures do have the rights to introduce supplementary laws for the same. Few of the major listed  subjects are as follows; criminal law, criminal procedure, preventive detention for reasons concerned with the security of state, marriage and divorce, transfer of property other than agricultural land, contract, actionable wrongs, bankruptcy and insolvency, trust and trustees, administration of justice, evidence and oaths, civil procedure, contempt of court, lunacy, prevention of cruelty to animals, forests, protection of wild animals and birds, population control and family planning, trade unions, education, labour welfare, inland shipping and navigation, foodstuffs, price control, stamp duties, and others. Initially, the strength of the said list revolves around 52 but following the 42nd Constitutional Amendment, five more entries were inserted.

SEVENTH SCHEDULE

(Article 246)

List III—Concurrent List

(Parliament & State Legislation)

1. Criminal law, including all matters included in the Indian Penal Code at the commencement of this Constitution but excluding offences against laws with respect to any of the matters specified in List I or List II and excluding the use of naval, military or air forces or any other armed forces of the Union in aid of the civil power.
2. Criminal procedure, including all matters included in the Code of Criminal Procedure at the commencement of this Constitution.
3. Preventive detention for reasons connected with the security of a State, the maintenance of public order, or the maintenance of supplies and services essential to the community; persons subjected to such detention.
4. Removal from one State to another State of prisoners, accused persons and persons subjected to preventive detention for reasons specified in entry 3 of this List.
5. Marriage and divorce; infants and minors; adoption; wills, intestacy, and succession; joint family and partition; all matters in respect of which parties in judicial proceedings were immediately before the commencement of this Constitution subject to their personal law.
6. Transfer of property other than agricultural land; registration of deeds and documents.
7. Contracts, including partnership, agency, contracts of carriage, and other special forms of contracts, but not including contracts relating to agricultural land.
8. Actionable wrongs.
9. Bankruptcy and insolvency.
10. Trust and Trustees.
11. Administrators-general and official trustees.

11A. Administration of Justice; constitution and organization of all courts, except the Supreme Court and the High Courts.

12. Evidence and oaths; recognition of laws, public acts and records, and judicial proceedings.
13. Civil procedure, including all matters included in the Code of Civil Procedure at the commencement of this Constitution, limitation, and arbitration.
14. Contempt of court, but not including contempt of the Supreme Court.
15. Vagrancy; nomadic and migratory tribes.
16. Lunacy and mental deficiency, including places for the reception or treatment of lunatics and mentally deficient.
17. Prevention of cruelty to animals.

17A. Forests.

17B. Protection of wild animals and birds.

18. Adulteration of foodstuffs and other goods.
19. Drugs and poisons, subject to the provisions of entry 59 of List I with respect to opium.
20. Economic and social planning.

20A. Population control and family planning.

21. Commercial and industrial monopolies, combines and trusts.
22. Trade unions; industrial and labour disputes.
23. Social security and social insurance; employment and unemployment.
24. The welfare of labor including conditions of work, provident funds, employers’ liability, workmen’s compensation, invalidity and old age pensions and maternity benefits.
25. Education, including technical education, medical education, and universities, subject to the provisions of entries 63, 64, 65 and 66 of List I; vocational and technical training of labor.
26. Legal, medical and other professions.
27. Relief and rehabilitation of persons displaced from their original place of residence by reason of the setting up of the Dominions of India and Pakistan.
28. Charities and charitable institutions, charitable and religious endowments and religious institutions.
29. Prevention of the extension from one State to another of infectious or contagious diseases or pests affecting men, animals or plants.
30. Vital statistics including registration of births and deaths.
31. Ports other than those declared by or under law made by Parliament or existing law to be major ports.
32. Shipping and navigation on inland waterways as regards mechanically propelled vessels, and the rule of the road on such waterways, and the carriage of passengers and goods on inland waterways subject to the provisions of List I with respect to national waterways.
33. Trade and commerce in, and the production, supply, and distribution of,—

(a) the products of any industry where the control of such industry by the Union is declared by Parliament by law to be expedient in the public interest, and imported goods of the same kind as such products;

(b) foodstuffs, including edible oilseeds and oils;

(c) cattle fodder, including oil cakes and other concentrates;

(d) raw cotton, whether ginned or unginned and cottonseed; and

(e) raw jute.

33A. Weights and measures except for the establishment of standards.

34. Price control.
35. Mechanically propelled vehicles including the principles on which taxes on such vehicles are to be levied.
36. Factories.
37. Boilers.
38. Electricity.
39. Newspapers, books, and printing presses.
40. Archaeological sites and remains other than those [declared by or under law made by Parliament] to be of national importance.
41. Custody, management, and disposal of property (including agricultural land) declared by law to be evacuee property.
42. Acquisition and requisitioning of property.
43. Recovery in a State of claims in respect of taxes and other public demands, including arrears of land-revenue and sums recoverable as such arrears, arising outside that State.
44. Stamp duties other than duties or fees collected by means of judicial stamps, but not including rates of stamp duty.
45. Inquiries and statistics for the purposes of any of the matters specified in List II or List III.
46. Jurisdiction and powers of all courts, except the Supreme Court, with respect to any of the matters in this List.
47. Fees in respect of any of the matters in this List, but not including fees taken in any court.

Case laws on 7th Schedule of Indian Constitution

• In order to decide the very relationship of state and central legislation, Supreme Court in the case of State of A.P. and Ors. v. Mcdowell & Co. and Ors. observed as follows;

“In view of our finding that the impugned enactment is perfectly within the legislative competence of the State Legislature and is fully covered by Entry 8 read with Entry 6 of List II, it is not necessary for us to deal with the arguments based upon Clause (3) of Article 246 of the Constitution except to say the following: once the impugned enactment is within the four corners of Entry 8 read with Entry 6, no Central law whether made with reference to an entry in List I or with reference to an entry in List III can affect the validity of such State enactment. The argument of the occupied field is totally out of place in such a context. If a particular matter is within the exclusive competence of the State Legislature, i.e., in List II that represents the prohibited field for the Union. Similarly, if any matter is within the exclusive competence of the Union, it becomes a prohibited field for the States. The concept of occupied field is really relevant in the case of laws made with reference to entries in List III. In other words, whenever a piece of legislation is said to be beyond the legislative competence of a State Legislature, what one must do is to find out, by applying the rule of pith and substance, whether that legislation falls within any of the entries in List II. If it does, no further question arises; the attack on the ground of legislative competence shall fail. It cannot be that even in such a case, Article 246(3) can be employed to invalidate the legislation on the ground of legislative incompetence of State Legislature. If, on the other hand, the State legislation in question is relatable to an entry in List III applying the rule of pith and substance, then also the legislation would be valid, subject to a Parliamentary enactment inconsistent with it, a situation dealt with by Article 254. Any incidental trenching, as already pointed out, does not amount to encroaching upon the field reserved for Parliament, though as pointed out by T.L. Venkatarama Iyer, J. in A.S. Krishna v. State of Madras : 1957 SCR 399, the extent of trenching beyond the competence of the legislating body may be an element in determining whether the legislation is colourable. No such question arises here.”

• Here in the case of State of West Bengal and Ors. v. Purvi Communication (P) Ltd. and Ors. the Supreme Court laid down his observation on the validation of State Legislation over the central and was of the view that;

“It is thus clear that the cable operator, respondent 1 is the exhibitor in this case and also the provider of the entertainment to the customer. Hence, he alone can be asked to pay the tax on the entertainment that has resulted from this exhibition. This provision, therefore, does not cross the bounds of Entry 62 of List II of the Seventh Schedule to the Constitution and is intra vires. Providing a cable link up to the viewers’ end is the only role of sub-cable operator. It is, therefore, inconceivable that despite putting forth the ready entertainment in the form of a signal on the cable line, the cable operator cannot be said to be providing the entertainment within the meaning of Entry 62 of List II of the Seventh Schedule of the Constitution. So long as the State Act remains within the ambit of Entry 62 of List II and is not offending the provisions of Article 286 of the Constitution or the laws made thereunder, the State Act’s validity is beyond question. Thus, respondent 1 who is engaged in receiving and providing TV signals to individual cable operators is liable to pay tax under Clause (ii) of Sub-section (4-a) of Section 4-A of the Act.”

• In the case of G.V. Ramanaiah v. The Superintendent of Central Jail Rajahmundry and others the appellant was convicted of offenses punishable under Section 489A to 489D of IPC and sentenced to imprisonment for 10 years. On a question whether the State Government would be competent to remit the sentence of the appellant, this Court observed as under:

“The question is to be considered in the light of the above criterion. Thus considered, it will resolve itself into the issue: Are the provisions of Sections 489A to 489D of the Penal Code, under which the petitioner was convicted, a law relating to a matter to which the legislative power of the State or the Union extends?

These four Sections were added to the Penal Code under the caption, “Of Currency Notes and Bank Notes”, by Currency Notes Forgery Act, 1899, in order to make better provisions for the protection of Currency and Bank Notes against forgery. It is not disputed; as was done before the High Court in the application under Section 491(1), Criminal Procedure Code, that this bunch of Sections is a law by itself. “Currency, coinage and legal tender” are matters, which are expressly included in Entry No. 36 of the Union List in the Seventh Schedule of the Constitution. Entry No. 93 of the Union List in the same Schedule specifically confers on the Parliament the power to legislate with regard to “offenses against laws with respect to any of the matters in the Union List”. Read together, these entries put it beyond doubt that Currency Notes and Bank Notes, to which the offenses under Sections 489A to 489D relate, are matters which are exclusively within the legislative competence of the Union Legislature. It follows therefrom that the offenses for which the petitioner has been convicted, are offenses relating to a matter to which the executive power of the Union extends, and the “appropriate Government” competent to remit the sentence of the petitioner, would be the Central Government and not the State Government.” This Court went on to observe that the Indian Penal Code is a compilation of penal laws, providing for offences relating to a variety of matters, preferable to the various entries in the different lists of the 7th Schedule to the Constitution and that many of the offences in the Penal Code related to matters which are specifically covered by entries in the Union list. Since the offenses in question pertained to subject matter in the Union list, this Court concluded that the Central Government was the appropriate Government competent to remit the sentence of the appellant. The decision in G.V. Ramanaiah thus clearly lays down that it is the offense, the sentence in respect of which is sought to be commuted or remitted, which determines the question as to which Government is the appropriate Government.

• In the case of Union Of India vs V. Sriharan @, Murugan & Ors on 2 December 2015 the apex court on deciding the primacy of the Union or the State over the subject matter enlisted in List III of 7th Schedule of Indian Constitution came up with the following observations;

“Our Answer to Question posed in Para 52.4. Is:-

Question 52.4. Whether the Union or the State has primacy over the subject- matter enlisted in List III of the 7th Schedule to the Constitution of India for the exercise of the power of remission?

Answer: In respect of matters in List III of the 7th Schedule to the Constitution, ordinarily the executive power of the State alone must extend. To this general principle, there are two exceptions as stated in Proviso to Articles 73(1) of the Constitution. In the absence of any express provision in the Constitution itself or in any law made by Parliament, it is the executive power of the State which alone must extend.”

Residuary power of Parliament

The framers of the constitution made the division of matters into three parts as described above. Matters those of national importance have been framed in Union List, those of purely State or local significance must be dealt by the State List, and the matters that are of common interest to the States and the Union were placed in the very Concurrent List. By this way, the framers did ensure the uniformity in legislation with due regard to the country’s diversity. Both Parliament and State legislature possess the exclusive powers to legislate on items in Union as well as State list respectively. However, sensing the occurrence of a situation in which the legislation might be required on matters which are not present in any of the three Lists, the Founding Fathers came up with the residuary provisions in Article 248 of the Constitution and Entry 97 of the Union List according to which the residuary powers had been vested in Parliament.

Section 248 Residuary powers of legislation

(1) Parliament has exclusive power to make any law with respect to any matter not enumerated in the Concurrent List or State List

(2) Such power shall include the power of making any law imposing a tax not mentioned in either of those Lists.

Entry 97 of Union List

Any other matter not enumerated in List II or List III including any tax not mentioned in either of those Lists.

Hence in consonance with these both, Article 248 and Entry 97 of the Union list of Constitution of India, the legislation of residuary powers had been bestowed to the Union. In case no entry in any of the three lists covers a piece of legislation, it must be regarded as a matter not enumerated in any of the three lists and as a result of such it would be belonging exclusively to the Parliament under Entry 97, list I by virtue of Art. 248. In actual the exact scope and extent of Article 248 are acknowledged with that of entry 97, list I.

But there have been restrictions within the scope of residuary powers. This is because the three list including Union, State, and Concurrent almost cover every possible subject under the Sun. hence the onus lies on the Court to decide whether a subject matter falls under the residuary power or not. The rationality of introducing the residuary power is to enable the Parliament to register on any subjects whether be it the subjects which have escaped the scrutiny of the house, and those which are not at all recognizable at present. Therefore, the framers of the constitution clearly intended that recourse under the residuary powers would be the last resort.

Case Brief on the Residuary power of Indian Constitution

• Stressing upon the issue whether the residuary power derived from Article 248 read with entry 97, the list I, can certainly take in the power to amend the Constitution, the Supreme Court in the case of I. C. Golaknath & Ors vs State Of Punjab & Anrs. (With … on 27 February 1967 is of the view that;

“(ii) While there is a whole part devoted to the amendment of the Constitution there is no specific mention of the amendment of the Constitution in Art. 248 or in any entry of List 1. It would in the circumstances ‘be more appropriate to read the power in Art. 368 than in Art. 248 read with item 97 of List I. [826 H-827 A] The original intention of the Constitution makers was to give residuary power to the States. The mere fact that during the passage of the Constitution by the Constituent Assembly residuary power was finally vested in the Union would not, therefore, mean that it includes the power to amend the Constitution. Moreover, residuary power cannot be used to change the fundamental law of the Constitution because all legislation is under Art. 245 “subject to the provisions of this Constitution”. [827 B, H] Mere accident of similarity of the procedure provided in Art. 368 to that provided for ordinary legislation cannot obliterate the basic difference ‘between constitutional law and ordinary law. It is the quality and nature of what is done under Art. 368 and not its similarity to other procedure that should be stressed. What emerges after the procedure in Art. 368 has been followed is not ordinary law but the fundamental law. [829 D; 830 C-D].”

• On the interpretation of legislative entries, the law is well- settled by the judgment of this Court in the case of M/s. International Tourist Corporation v. the State of Haryana in the following terms:

“…Before exclusive legislative competence can be claimed for Parliament by resort to the residuary power, the legislative incompetence of the State legislature must be clearly established. Entry 97 itself is specific that a matter can be brought under that entry only if it is not enumerated in List II or List III and in the case of a tax if it is not mentioned in either of those Lists. In a Federal Constitution like ours where there is a division of legislative subjects but the residuary power is vested in Parliament, such residuary power cannot be so expansively interpreted as to whittle down the power of the State Legislature. That might affect and jeopardize the very federal principle. The federal nature of the Constitution demands that an interpretation which would allow the exercise of legislative power by Parliament pursuant to the residuary powers vested in it to trench upon State legislation and which would thereby destroy or belittle State autonomy must be rejected . . .”

• The Supreme Court of India also in the case of Association Of Leasing & … vs Union Of India & Ors on 26 October 2010 laid down their valuable emphasis on the matter of residuary powers of Indian Constitution under Article 248 and Entry 97 of Union List. During the judgment, the apex court was of the view that; 

“Now coming to the main point whether the whole field is covered by Entry 54 and that the levy of service tax is incompetent, it is important to note the language of Entry 97, List I and Article 248 except for the word “other” in Entry 97. This is because when one reads Entry 97 of List I with Article 246(1) it confers exclusive power first, to make laws in respect of matters specified in Entries 1 to 96 in List I and, secondly, it confers the residuary power of making laws by Entry 97. Article 248 does not provide for any express powers of Parliament but only for its residuary power. Article 248 adds nothing to the power conferred by Article 246(1) read with Entry 97, List I. In the context of an exhaustive enumeration of subjects of legislation what does the conferment of residuary power mean? Entry 97, List I which confers residuary powers on Parliament provides “any other matter not enumerated in List II and List III including any tax not mentioned in either of those lists”. The word “other” is important. It means “any subject of legislation other than the subject mentioned in Entries 1-96”. Lastly, we must keep in mind a clear distinction between the subject and measure of tax.”

• Further stressing upon the real essence of the functionality of residuary power under Indian Constitution, Supreme court in the case of Union Of India (Uoi) vs Shri Harbhajan Singh Dhillon on 21 October 1971 was of the view that;

“The expression “any matter not enumerated in the Concurrent List or State List” in Article 248 must mean, in the context of Clause (1) of Article 246, which gives Parliament exclusive power in respect of matters in List I. any matter other than those enumerated in any of the three Lists. Obviously, the residuary power given to Parliament in Article 248 cannot include power which is exclusively given to Parliament on matters in List I already conferred under Clause (1) of Article 246, so that an attempt to distinguish the words “any matter” in Article 248 and “any other matter” in entry 97 in Lift I is a distinction without difference. There had to be the difference in language in the two provisions in the context of the content of entry 97 as that entry speaks about matters other than those enumerated before in List I and those enumerated in the other Lists. Notwithstanding the fact that the residuary power has been vested in the Central Legislature under Article 248 and its consequence translated in entry 97 in List I, there can be no gainsaying that the idea was to assign such residuary power over matters which at the time of framing the three Lists could not be thought of or contemplated. This is clear from the fact, as pointed out by counsel, that the Lists contain as many as 209 matters which are couched in careful and elaborate words with inclusive and excluding language in the case of some, which has made the Constitution, to use the words of Gwyer, C.J., in In re the C.P. & Berar Act No. XIV of 1938, [1939] F.C.R. 18, at 38 “unique among federal Constitutions in the length and detail of its legislative Lists”. In the layout of such elaborate worded matters in the Lists and in the context of Article 246(1), the residuary power contained in Article 248 and entry 97, List I must be construed as a meaning power in respect of matters not enumerated in any of the three Lists. Such a residuary power cannot, therefore, be ordinarily claimed in respect of a matter already dealt with under an Article or an entry in any one of the three Lists. anything not included in List II or List III.”

The post Seventh Schedule of the Indian Constitution appeared first on iPleaders.

This article is written by Amit Garg of National University of Study and Research in Law, Ranchi. The author through this article brings out the punishments as specified in the Companies Act, 2013.

The Companies Act, 2013 was incorporated by the Parliament of India, which repeals the earlier act (The Companies Act, 1956), came into effect to regulate the incorporation and functioning of a company, its directors and its dissolution. The Act came into Official Gazette on 12 September 2013.

Punishments under the Companies Act

The Companies Act of 2013 lays down various punishments be it on the directors, employees or even on the company itself in case of any activities that are in contravention with the rules of the Act. Some of the provisions that specifies punishments under the Act are mentioned below.

Section 4(5)

Section 4(5)(ii) of the Act says that “Where after reservation of name under clause (i), it is found that name was applied by furnishing wrong or incorrect information, then,— (a) if the company has not been incorporated, the reserved name shall be cancelled and the person making application under sub-section (4) shall be liable to a penalty which may extend to one lakh rupees; (b) if the company has been incorporated, the Registrar may, after giving the company an opportunity of being heard— (i) either direct the company to change its name within a period of three months, after passing an ordinary resolution; (ii) take action for striking off the name of the company from the register of companies; or (iii) make a petition for winding up of the company.”

Section 15

Section 15(2) of the Act says that “If a company makes any default in complying with the provisions of sub-section (1), the company and every officer who is in default shall be liable to a penalty of one thousand rupees for every copy of the memorandum or articles issued without such alteration.”

Section 16

Section 16(3) of the Act says that “If a company makes default in complying with any direction given under sub-section (1), the company shall be punishable with fine of one thousand rupees for every day during which the default 33 continues and every officer who is in default shall be punishable with fine which shall not be less than five thousand rupees but which may extend to one lakh rupees.”

Section 17

Section 17(2) of the Act says that “If a company makes any default in complying with the provisions of this section, the company and every officer of the company who is in default shall be liable for each default, to a penalty of one thousand rupees for each day during which such default continues or one lakh rupees, whichever is less.”

Section 26

Section 26(9) of the Act says that “If a prospectus is issued in contravention of the provisions of this section, the company shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to three lakh rupees and every person who is knowingly a party to the issue of such prospectus shall be punishable with imprisonment for a term which may extend to three years or with fine which shall not be less than fifty thousand rupees but which may extend to three lakh rupees, or with both.”

Section 36

Section 36 of the Act says that “Any person who, either knowingly or recklessly makes any statement, promise or forecast which is false, deceptive or misleading, or deliberately conceals any material facts, to induce another person to enter into, or to offer to enter into,— (a) any agreement for, or with a view to, acquiring, disposing of, subscribing for, or underwriting securities; or (b) any agreement, the purpose or the pretended purpose of which is to secure a profit to any of the parties from the yield of securities or by reference to fluctuations in the value of securities; or (c) any agreement for, or with a view to obtaining credit facilities from any bank or financial institution, shall be liable for action under section 447.”

Section 38

Section 38 of the Act says that “(1) Any person who— (a) makes or abets making of an application in a fictitious name to a company for acquiring, or subscribing for, its securities; or (b) makes or abets making of multiple applications to a company in different names or in different combinations of his name or surname for acquiring or subscribing for its securities; or (c) otherwise induces directly or indirectly a company to allot, or register any transfer of, securities to him, or to any other person in a fictitious name, shall be liable for action under section 447. (2) The provisions of sub-section (1) shall be prominently reproduced in every prospectus issued by a company and in every form of application for securities. (3) Where a person has been convicted under this section, the Court may also order disgorgement of gain, if any, made by, and seizure and disposal of the securities in possession of, such person. (4) The amount received through disgorgement or disposal of securities under subsection shall be credited to the Investor Education and Protection Fund.”

Section 39

Section 39(5) of the Act says that “In case of any default under sub-section (3) or sub-section (4), the company and its officer who is in default shall be liable to a penalty, for each default, of one thousand rupees for each day during which such default continues or one lakh rupees, whichever is less.”

Section 40

Section 40(5) of the Act says that “If a default is made in complying with the provisions of this section, the company shall be punishable with a fine which shall not be less than five lakh rupees but which may extend to fifty lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than fifty thousand rupees but which may extend to three lakh rupees, or with both.”

Section 42

Section 42(10) of the Act says that “If a company makes an offer or accepts monies in contravention of this section, the company, its promoters and directors shall be liable for a penalty which may extend to the amount involved in the offer or invitation or two crore rupees, whichever is higher, and the company shall also refund all monies to subscribers within a period of thirty days of the order imposing the penalty.”

Section 53

Section 53 of the Act says that “(1) Except as provided in section 54, a company shall not issue shares at a discount. (2) Any share issued by a company at a discounted price shall be void. (3) Where a company contravenes the provisions of this section, the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees and every officer who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees, or with both.”

Section 56

Section 56(6) of the Act says that “Where any default is made in complying with the provisions of sub-sections (1) to (5), the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees.”

Section 57

Section 57 of the Act says that “If any person deceitfully personates as an owner of any security or interest in a company, or of any share warrant or coupon issued in pursuance of this Act, and thereby obtains or attempts to obtain any such security or interest or any such share warrant or coupon, or receives or attempts to receive any money due to any such owner, he shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to three years and with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees.”

Section 59

Section 59(5) of the Act says that “If any default is made in complying with the order of the Tribunal under this section, the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five 50 lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than one lakh rupees but which may extend to three lakh rupees, or with both.”

Section 60

Section 60(2) of the Act says that “If any default is made in complying with the requirements of sub-section (1), the company shall be liable to pay a penalty of ten thousand rupees and every officer of the company who is in default shall be liable to pay a penalty of five thousand rupees, for each default.”

Section 64

Section 64(2) of the Act says that “If a company and any officer of the company who is in default contravenes the provisions of subsection (1), it or he shall be punishable with fine which may extend to one thousand rupees for each day during which such default continues, or five lakh rupees, whichever is less.”

Section 67

Section 67(5) of the Act says that “ If a company contravenes the provisions of this section, it shall be punishable with fine which shall not be less than one lakh rupees but which may extend to twenty-five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years and with fine which shall not be less than one lakh rupees but which may extend to twenty-five lakh rupees.”

Section 68

Section 68(11) of the Act says that “If a company makes any default in complying with the provisions of this section or any regulation made by the Securities and Exchange Board, for the purposes of clause (f) of sub-section (2), the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to three lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years or with fine which shall not be less than one lakh rupees but which may extend to three lakh rupees, or with both.”

Section 74

Section 74(3) of the Act says that “If a company fails to repay the deposit or part thereof or any interest thereon within the time specified in sub-section (1) or such further time as may be allowed by the Tribunal under sub-section (2), the company shall, in addition to the payment of the amount of deposit or part thereof and the interest due, be punishable with fine which shall not be less than one crore rupees but which may extend to ten crore rupees and every officer of the company who is in default shall be punishable with imprisonment which may extend to seven years or with fine which shall not be less than twenty-five lakh rupees but which may extend to two crore rupees, or with both.”

Section 75

Section 75 of the Act says that “(1) Where a company fails to repay the deposit or part thereof or any interest thereon referred to in section 74 within the time specified in sub-section (1) of that section or such further time as may be allowed by the Tribunal under sub-section (2) of that section, and it is proved that the deposits had been accepted with intent to defraud the depositors or for any fraudulent purpose, every officer of the company who was responsible for the acceptance of such deposit shall, without prejudice to the provisions contained in subsection (3) of that section and liability under section 447, be personally responsible, without any limitation of liability, for all or any of the losses or damages that may have been incurred by the depositors. (2) Any suit, proceedings or other action may be taken by any person, group of persons or any association of persons who had incurred any loss as a result of the failure of the company to repay the deposits or part thereof or any interest thereon.”

Section 86

Section 86 of the Act says that “If any company contravenes any provision of this Chapter, the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to ten lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees, or with both.”

Section 88

Section 88(5) of the Act says that “If a company does not maintain a register of members or debenture-holders or other security holders or fails to maintain them in accordance with the provisions of sub-section (1) or sub-section (2), the company and every officer of the company who is in default shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to three lakh rupees and where the failure is a continuing one, with a further fine which may extend to one thousand rupees for every day, after the first during which the failure continues.”

Section 91

Section 91(2) of the Act says that “If the register of members or of debenture-holders or of other security holders is closed without giving the notice as provided in sub-section (1), or after giving shorter notice than that so provided, or for a continuous or an aggregate period in excess of the limits specified in that sub-section, the company and every officer of the company who is in default shall be liable to a penalty of five thousand rupees for every day subject to a maximum of one lakh rupees during which the register is kept closed.”

Section 92

Section 92(5) of the Act says that “If a company fails to file its annual return under sub-section (4), before the expiry of the period specified under section 403 with additional fees, the company shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakhs rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both.”

Section 94

Section 94(4) of the Act says that “If any inspection or the making of any extract or copy required under this section is refused, the company and every officer of the company who is in default shall be liable, for each such default, to a penalty of one thousand rupees for every day subject to a maximum of one lakh rupees during which the refusal or default continues.”

Section 99

Section 99 of the Act says that “If any default is made in holding a meeting of the company in accordance with section 96 or section 97 or section 98 or in complying with any directions of the Tribunal, the company and every officer of the company who is in default shall be punishable with fine which may extend to one lakh rupees and in the case of a continuing default, with a further fine which may extend to five thousand rupees for every day during which such default continues.”

Section 102

Section 102(5) of the Act says that “If any default is made in complying with the provisions of this section, every promoter, director, manager or other key managerial personnel who is in default shall be punishable with fine which may extend to fifty thousand rupees or five times the amount of benefit accruing to the promoter, director, manager or other key managerial personnel or any of his relatives, whichever is more.”

Section 105

Section 105(3) of the Act says that “If default is made in complying with sub-section (2), every officer of the company who is in default shall be punishable with fine which may extend to five thousand rupees.”

Section 111

Section 111(5) of the Act says that “If any default is made in complying with the provisions of this section, the company and every officer of the company who is in default shall be liable to a penalty of twenty-five thousand rupees.”

Section 118

Section 118(12) of the Act says that “If a person is found guilty of tampering with the minutes of the proceedings of meeting, he shall be punishable with imprisonment for a term which may extend to two years and with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees.”

Section 119

Section 119(3) of the Act says that “If any inspection under sub-section (1) is refused, or if any copy required under sub-section (2) is not furnished within the time specified therein, the company shall be liable to a penalty of twenty-five thousand rupees and every officer of the company who is in default shall be liable to a penalty of five thousand rupees for each such refusal or default, as the case may be.”

Section 121

Section 121(3) of the Act says that “If the company fails to file the report under sub-section (2) before the expiry of the period specified under section 403 with additional fees, the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees.”

Section 127

Section 127 of the Act says that “Where a dividend has been declared by a company but has not been paid or the warrant in respect thereof has not been posted within thirty days from the date of declaration to any shareholder entitled to the payment of the dividend, every director of the company shall, if he is knowingly a party to the default, be punishable with imprisonment which may extend to two years and with fine which shall not be less than one thousand rupees for every day during which such default continues and the company shall be liable to pay simple interest at the rate of eighteen per cent. per annum during the period for which such default continues.”

Section 128

Section 128(6) of the Act says that “If the managing director, the whole-time director in charge of finance, the Chief Financial Officer or any other person of a company charged by the Board with the duty of complying with the provisions of this section, contravenes such provisions, such managing director, whole-time director in charge of finance, Chief Financial officer or such other person of the company shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees or with both.”

Section 129

Section 129(7) of the Act says that “If a company contravenes the provisions of this section, the managing director, the whole-time director in charge of finance, the Chief Financial Officer or any other person charged by the Board with the duty of complying with the requirements of this section and in the absence of any of the officers mentioned above, all the directors shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both.”

Section 134

Section 134(8) of the Act says that “If a company contravenes the provisions of this section, the company shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to twenty-five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both.”

Section 136

Section 136(3) of the Act says that “If any default is made in complying with the provisions of this section, the company shall be liable to a penalty of twenty-five thousand rupees and every officer of the company who is in default shall be liable to a penalty of five thousand rupees.”

Section 137

Section 137(3) of the Act says that “If a company fails to file the copy of the financial statements under sub-section (1) or sub-section (2), as the case may be, before the expiry of the period specified in section 403, the company shall be punishable with fine of one thousand rupees for every day during which the failure continues but which shall not be more than ten lakh rupees, and the managing director and the Chief Financial Officer of the company, if any, and, in the absence of the managing director and the Chief Financial Officer, any other director who is charged by the Board with the responsibility of complying with the provisions of this section, and, in the absence of any such director, all the directors of the company, shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees, or with both.”

Section 147

Section 147 of the Act says that “(1) If any of the provisions of sections 139 to 146 (both inclusive) is contravened, the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees, or with both. (2) If an auditor of a company contravenes any of the provisions of section 139, section 143, section 144 or section 145, the auditor shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees: Provided that if an auditor has contravened such provisions knowingly or wilfully with the intention to deceive the company or its shareholders or creditors or tax authorities, he shall be punishable with imprisonment for a term which may extend to one year and with fine which shall not be less than one lakh rupees but which may extend to twenty-five lakh rupees. (3) Where an auditor has been convicted under sub-section (2), he shall be liable to— (i) refund the remuneration received by him to the company; and (ii) pay for damages to the company, statutory bodies or authorities or to any other persons for loss arising out of incorrect or misleading statements of particulars made in his audit report. (4) The Central Government shall, by notification, specify any statutory body or authority or an officer for ensuring prompt payment of damages to the company or the persons under clause (ii) of subsection (3) and such body, authority or officer shall after payment of damages to such company or persons file a report with the Central Government in respect of making such damages in such manner as may be specified in the said notification. (5) Where, in case of audit of a company being conducted by an audit firm, it is proved that the partner or partners of the audit firm has or have acted in a fraudulent manner or abetted or colluded in any fraud by, or in relation to or by, the company or its directors or officers, the liability, whether civil or criminal as provided in this Act or in any other law for the time being in force, for such act shall be of the partner or partners concerned of the audit firm and of the firm jointly and severally.”

Section 157

Section 157(2) of the Act says that “If a company fails to furnish Director Identification Number under sub-section (1), before the expiry of the period specified under section 403 with additional fee, the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees and every officer of the company who is in default shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees.”

Section 159

Section 159 of the Act says that “If any individual or director of a company, contravenes any of the provisions of section 152, section 155 and section 156, such individual or director of the company shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to fifty thousand rupees and where the contravention is a continuing one, with a further fine which may extend to five hundred rupees for every day after the first during which the contravention continues.”

Section 172

Section 172 of the Act says that “If a company contravenes any of the provisions of this Chapter and for which no specific punishment is provided therein, the company and every officer of the company who is in default shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees.”

Section 173

Section 173(4) of the Act says that “Every officer of the company whose duty is to give notice under this section and who fails to do so shall be liable to a penalty of twenty-five thousand rupees.”

Section 178

Section 178(8) of the Act says that “In case of any contravention of the provisions of section 177 and this section, the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees”

Section 182

Section 182(4) of the Act says that “If a company makes any contribution in contravention of the provisions of this section, the company shall be punishable with fine which may extend to five times the amount so contributed and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months and with fine which may extend to five times the amount so contributed.”

Section 185

Section 185(2) of the Act says that “If any loan is advanced or a guarantee or security is given or provided in contravention of the provisions of sub-section (1), the company shall be punishable with fine which shall not be less than five lakh rupees but which may extend to twenty-five lakh rupees, and the director or the other person to whom any loan is advanced or guarantee or security is given or provided in connection with any loan taken by him or the other person, shall be punishable with imprisonment which may extend to six months or with fine which shall not be less than five lakh rupees but which may extend to twenty-five lakh rupees, or with both.”

Section 186

Section 186(13) of the Act says that “If a company contravenes the provisions of this section, the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to two years and with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees.”

Section 187

Section 187(4) of the Act says that “If a company contravenes the provisions of this section, the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to twenty-five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees, or with both.”

Section 188

Section 188(5) of the Act says that “Any director or any other employee of a company, who had entered into or authorised the contract or arrangement in violation of the provisions of this section shall,— (i) in case of listed company, be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees, or with both; and (ii) in case of any other company, be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees.”

Section 189

Section 189(6) of the Act says that “Every director who fails to comply with the provisions of this section and the rules made thereunder shall be liable to a penalty of twenty-five thousand rupees.”

Section 190

Section 190(3) of the Act says that “If any default is made in complying with the provisions of sub-section (1) or sub-section (2), the company shall be liable to a penalty of twenty-five thousand rupees and every officer of the company who is in default shall be liable to a penalty of five thousand rupees for each default.”

Section 194

Section 194(2) of the Act says that “If a director or any key managerial personnel of the company contravenes the provisions of subsection (1), such director or key managerial personnel shall be punishable with imprisonment for a term which may extend to two years or with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees, or with both.”

Section 194(3) of the Act says that “Where a director or other key managerial personnel acquires any securities in contravention of sub-section (1), he shall, subject to the provisions contained in sub-section (2), be liable to surrender the same to the company and the company shall not register the securities so acquired in his name in the register, and if they are in dematerialised form, it shall inform the depository not to record such acquisition and such securities, in both the cases, shall continue to remain in the names of the transferors.”

Section 195

Section 195(2) of the Act says that “If any person contravenes the provisions of this section, he shall be punishable with imprisonment for a term which may extend to five years or with fine which shall not be less than five lakh rupees but which may extend to twenty-five crore rupees or three times the amount of profits made out of insider trading, whichever is higher, or with both.”

Section 203

Section 203(5) of the Act says that “If a company contravenes the provisions of this section, the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees and every director and key managerial personnel of the company who is in default shall be punishable with fine which may 128 extend to fifty thousand rupees and where the contravention is a continuing one, with a further fine which may extend to one thousand rupees for every day after the first during which the contravention continues.”

Section 204

Section 204(4) of the Act says that “If a company or any officer of the company or the company secretary in practice, contravenes the provisions of this section, the company, every officer of the company or the company secretary in practice, who is in default, shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees.”

Section 206

Section 206(7) of the Act says that “If a company fails to furnish any information or explanation or produce any document required under this section, the company and every officer of the company, who is in default shall be punishable with a fine which may extend to one lakh rupees and in the case of a continuing failure, with an additional fine which may extend to five hundred rupees for every day after the first during which the failure continues.”

Section 207

Section 207(4) of the Act says that “(i) If any director or officer of the company disobeys the direction issued by the Registrar or the inspector under this section, the director or the officer shall be punishable with imprisonment which may extend to one year and with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees. (ii) If a director or an officer of the company has been convicted of an offence under this section, the director or the officer shall, on and from the date on which he is so convicted, be deemed to have vacated his office as such and on such vacation of office, shall be disqualified from holding an office in any company.”

Section 229

Section 229 of the Act says that “Where a person who is required to provide an explanation or make a statement during the course of inspection, inquiry or investigation, or an officer or other employee of a company or other body corporate which is also under investigation,— (a) destroys, mutilates or falsifies, or conceals or tampers or unauthorisedly removes, or is a party to the destruction, mutilation or falsification or concealment or tampering or unauthorised removal of, documents relating to the property, assets or affairs of the company or the body corporate; (b) makes, or is a party to the making of, a false entry in any document concerning the company or body corporate; or (c) provides an explanation which is false or which he knows to be false, he shall be punishable for fraud in the manner as provided in section 447.”

Section 243

Section 243(2) of the Act says that “Any person who knowingly acts as a managing director or other director or manager of a company in contravention of clause (b) of sub-section (1), and every other director of the company who is knowingly a party to such contravention, shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to five lakh rupees, or with both.”

Section 267

Section 267 of the Act says that “Whoever violates the provisions of this Chapter or any scheme, or any order, of the Tribunal or the Appellate Tribunal or makes a false statement or gives false evidence before the Tribunal or the Appellate Tribunal or attempts to tamper with the records of reference or appeal filed under this Act, he shall be punishable with imprisonment for a term which may extend to seven years and with fine which may extend to ten lakh rupees.”

Section 301

Section 301 of the Act says that “At any time either before or after passing a winding up order, if the Tribunal is satisfied that a contributory or a person having property, accounts or papers of the company in his possession is about to leave India or otherwise to abscond, or is about to remove or conceal any of his property, for the purpose of evading payment of calls or of avoiding examination respecting the affairs of the company, the Tribunal may cause— (a) the contributory to be detained until such time as the Tribunal may order; and (b) his books and papers and movable property to be seized and safely kept until such time as the Tribunal may order.”

Section 331

Section 331(1) of the Act says that “Where a company is being wound up and anything made, taken or done after the commencement of this Act is invalid under section 328 as a fraudulent preference of a person interested in property mortgaged or charged to secure the company‘s debt, then, without prejudice to any rights or liabilities arising, apart from this provision, the person preferred shall be subject to the same liabilities, and shall have the same rights, as if he had undertaken to be personally liable as a surety for the debt, to the extent of the mortgage or charge on the property or the value of his interest, whichever is less.”

Section 337

Section 337 of the Act says that “If any person, being at the time of the commission of the alleged offence an officer of a company which is subsequently ordered to be wound up by the Tribunal or which subsequently passes a resolution for voluntary winding up,— (a) has, by false pretences or by means of any other fraud, induced any person to give credit to the company; (b) with intent to defraud creditors of the company or any other person, has made or caused to be made any gift or transfer of, or charge on, or has caused or connived at the levying of any execution against, the property of the company; or (c) with intent to defraud creditors of the company, has concealed or removed any part of the property of the company since the date of any unsatisfied judgment or order for payment of money obtained against the company or within two months before that date,

he shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to three years and with fine which shall not be less than one lakh rupees but which may extend to three lakh rupees.”

Section 338

Section 338(1) of the Act says that “Where a company is being wound up, if it is shown that proper books of account were not kept by the company throughout the period of two years immediately preceding the commencement of the winding up, or the period between the incorporation of the company and the commencement of the winding up, whichever is shorter, every officer of the company who is in default shall, unless he shows that he acted honestly and that in the circumstances in which the business of the company was carried on, the default was excusable, be punishable with imprisonment for a term which shall not be less than one year but which may extend to three years and with fine which shall not be less than one lakh rupees but which may extend to three lakh rupees.”

Section 339

Section 339(1) of the Act says that “If in the course of the winding up of a company, it appears that any business of the company has been carried on with intent to defraud creditors of the company or any other persons or for any fraudulent purpose, the Tribunal, on the application of the Official Liquidator, or the Company Liquidator or any creditor or contributory of the company, may, if it thinks it proper so to do, declare that any person, who is or has been a director, manager, or officer of the company or any persons who were knowingly parties to the carrying on of the business in the manner aforesaid shall be personally responsible, without any limitation of liability, for all or any of the debts or other liabilities of the company as the Tribunal may direct.”

Section 392

Section 392 of the Act says that “Without prejudice to the provisions of section 391, if a foreign company contravenes the provisions of this Chapter, the foreign company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to three lakh rupees and in the case of a continuing offence, with an additional fine which may extend to fifty thousand rupees for every day after the first during which the contravention continues and every officer of the foreign company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees, or with both.”

Section 405

Section 405(4) of the Act says that “If any company fails to comply with an order made under sub-section (1) or subsection (3), or knowingly furnishes any information or statistics which is incorrect or incomplete in any material respect, the company shall be punishable with fine which may extend to twenty-five thousand rupees and every officer of the company who is in default, shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to three lakh rupees, or with both.”

Section 447

Section 447 of the Act says that “Without prejudice to any liability including repayment of any debt under this Act or any other law for the time being in force, any person who is found to be guilty of fraud, shall be punishable with imprisonment for a term which shall not be less than six months but which may 222 extend to ten years and shall also be liable to fine which shall not be less than the amount involved in the fraud, but which may extend to three times the amount involved in the fraud: Provided that where the fraud in question involves public interest, the term of imprisonment shall not be less than three years.”

Section 448

Section 448 of the Act says that “Save as otherwise provided in this Act, if in any return, report, certificate, financial statement, prospectus, statement or other document required by, or for, the purposes of any of the provisions of this Act or the rules made thereunder, any person makes a statement,— (a) which is false in any material particulars, knowing it to be false; or (b) which omits any material fact, knowing it to be material, he shall be liable under section 447.”

Section 449

Section 449 of the Act says that “Save as otherwise provided in this Act, if any person intentionally gives false evidence- (a) upon any examination on oath or solemn affirmation, authorised under this Act; or (b) in any affidavit, deposition or solemn affirmation, in or about the winding up of any company under this Act, or otherwise in or about any matter arising under this Act, he shall be punishable with imprisonment for a term which shall not be less than three years but which may extend to seven years and with fine which may extend to ten lakh rupees.”

Section 450

Section 450 of the Act says that “If a company or any officer of a company or any other person contravenes any of the provisions of this Act or the rules made thereunder, or any condition, limitation or restriction subject to which any approval, sanction, consent, confirmation, recognition, direction or exemption in relation to any matter has been accorded, given or granted, and for which no penalty or punishment is provided elsewhere in this Act, the company and every officer of the company who is in default or such other person shall be punishable with fine which may extend to ten thousand rupees, and where the contravention is continuing one, with a further fine which may extend to one thousand rupees for every day after the first during which the contravention continues.”

Section 451

Section 451 of the Act says that “If a company or an officer of a company commits an offence punishable either with fine or with imprisonment and where the same offence is committed for the second or subsequent occasions within a period of three years, then, that company and every officer thereof who is in default shall be punishable with twice the amount of fine for such offence in addition to any imprisonment provided for that offence.”

Section 452

Section 452 of the Act says that “(1) If any officer or employee of a company— (a) wrongfully obtains possession of any property, including cash of the company; or 223 (b) having any such property including cash in his possession, wrongfully withholds it or knowingly applies it for the purposes other than those expressed or directed in the articles and authorised by this Act, he shall, on the complaint of the company or of any member or creditor or contributory thereof, be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees. (2) The Court trying an offence under sub-section (1) may also order such officer or employee to deliver up or refund, within a time to be fixed by it, any such property or cash wrongfully obtained or wrongfully withheld or knowingly misapplied, the benefits that have been derived from such property or cash or in default, to undergo imprisonment for a term which may extend to two years.”

Section 453

Section 453 of the Act says that “If any person or persons trade or carry on business under any name or title, of which the word ―Limited‖ or the words ―Private Limited or any contraction or imitation thereof is or are the last word or words, that person or each of those persons shall, unless duly incorporated with limited liability, or unless duly incorporated as a private company with limited liability, as the case may be, punishable with fine which shall not be less than five hundred rupees but may extend to two thousand rupees for every day for which that name or title has been used.”

Section 454

Section 454(8) of the Act says that “(i) Where company does not pay the penalty imposed by the adjudicating officer or the Regional Director within a period of ninety days from the date of the receipt of the copy of the order, the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees. (ii) Where an officer of a company who is in default does not pay the penalty within a period of ninety days from the date of the receipt of the copy of the order, such officer shall be punishable with imprisonment which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees, or with both.”

Section 464

Section 464(3) of the Act says that “Every member of an association or partnership carrying on business in contravention of subsection (1) shall be punishable with fine which may extend to one lakh rupees and shall also be personally liable for all liabilities incurred in such business.”

The post List of Punishments under the Companies Act, 2013 appeared first on iPleaders.

This article is written by Amit Garg of National University of Study and Research in Law, Ranchi. The author through this article brings out the requirements laid down by the RBI to deal with risks.

A bank is a place that accepts deposit and grants loan. A bank charges interest on the loans lent and pays interest on the deposits received. The difference in the interest received and interest paid is the source of income for the bank. Each country has large number of banks that conduct the function of accepting and lending money. But, a country has only one central bank that governs the functioning of all the banks situated within the country and regulate their business. In India, all the banks are regulated by the Reserve Bank of India (RBI). There are large number of activities performed by the RBI in order to regulate the economy of a country and the banks.

Some of the major activities performed by the Reserve Bank of India are as follows:

• Issue of Bank Notes.
• Banker to the Government.
• Custodian of Cash Reserves of Commercial Banks.
• Custodian of Foreign Exchange Reserves.
• Lender to the Last Resort.
• Central Clearance and Account Settlement.
• Controller of Credit.

Types of Risks

The risks that the bank faces can be broadly classified as:

1. Credit risk
2. Market risk
3. Interest rate risk
4. Liquidity risk
5. Operational risk

In order to deal with these risks that the banks have been surrounded by, the Reserve Bank of India provides for some guidelines that needs to be followed by the banks. These guidelines help in better dealing with the risk concerned and will help in the progress of the economy. Each risk has been discussed below.

Credit Risk

Lending money to any other individual involves risk as to the return of the amount lent. The risk so associated with lending of money is known as credit risk. Credit risk, in simple words can be explained as unwillingness of a person to pay the amount borrowed from the bank which exposes the bank to a risk of loss. In addition to the risk involved in lending money, banks are exposed to the risk of the interest amount, forex and country risks. A significant magnitude of credit risk is inherent in investment banking. Investment banking is when the banks decide to invest a particular sum of money for a particular purpose.

Market Risk

Market risk arises from adverse changes in various market variables like currencies, interest rate instruments, equities, commodity price, etc. These factors play a vital role in functioning of the economy and effects the economy at both the level, i.e., macro and micro. The changes in these variables is very volatile, therefore, RBI needs to step up to maintain soundness of the banks.

There are two types of market risk:

1. Foreign Exchange Risk – It is that risk where bank may suffer losses as a result of adverse exchange rate movements in a small period of time.
2. Equity Price Risk – It is a financial risk which arises from holding equity in particular investment.

Interest Rate Risk

Interest Rate Risk arises when there is potential impact on the Net Interest Margin by unexpected changes in the interest rates. It can be expressed in two ways:

• Its impact on the earnings of the bank.
• Its impact on the economic value of the bank’s assets, liabilities and Off-Balance Sheet positions.

Liquidity Risk

A bank faces liquidity risk when it does not have enough cash in hand to meet its daily requirements. This may arise due the bank lending all the money they have as loans. It also arises when the bank funds long term assets from short term liabilities. Various ratios adopted by banks to evaluate the liquidity of the banks are (1) Loans to Total Assets, (2) Loans to Core Deposits, (3) Purchased Funds to Total Assets, and (4) Large Liabilities (minus) Temporary Investments to Earning Assets (minus) Temporary Investments.

Operational Risk

Basel Committee defines operational risk as the “risk of change in value caused by the fact that actual losses, incurred for inadequate or failed internal processes, people and systems or from external events (including legal risk), differ from the expected losses”. These risks are not willingly incurred and nor are they revenue driven.

Guidelines by the RBI

The activities that the commercial banks undertake which includes financial intermediation, has a lot of risk factor which may be financial or non-financial directly affecting the normal functioning of a bank. The factors affecting the functioning of the banks are credit, interest rate, foreign exchange rate, liquidity, etc. In order to reduce the risk raised by these factors and ensure proper functioning of the banks, Reserve Bank of India attaches considerable importance to improve the ability to identify and tackle such risks. RBI has laid down guidelines that the commercial banks must follow in order to avoid the danger of loss caused by various risks as mentioned above. The guidelines as provided by the RBI for Risk Management are discussed below.

Credit Risk Management

The management of credit risk is of foremost importance and the banks must lay special emphasis on its management. The banks must articulate the management of credit risk in their Loan Policy. The guidelines in order to deal with the credit risk are:

• Measurement of risk through credit rating/scoring. Banks must have a comprehensive credit scoring system that shall take into consideration diverse risk factors and result in a single point indicator of credit worthiness.
• Quantifying the risk through estimating expected losses, i.e., the amount of loss a bank shall endure in a specific time period.
• Risk pricing on a specific basis. Banks must evolve a scientific system to price the risk where the person with weak financial position is priced higher than the person with good financial position.
• Controlling the risk through effective Loan Review Mechanism (LRM). Loan Review Mechanism evaluates the quality of loan book and brings about qualitative improvements in credit administration. The main objectives of LRM are:
  1. to identify the loans that possess credit weakness and to take corrective action.
  2. provide information related to the adequacy of loan loss provision.
  3. to isolate the potential problem areas.
  4. to assess the adequacy of and adherence to, loan policies and procedures, and to monitor compliance with relevant laws and regulations.
  5. to provide top management with information on credit administration, including credit sanction process, risk evaluation and post-sanction follow-up.
• A Credit Policy Committee must be formed in order to analyse and control the risk.
• Bank must develop a suitable framework in order to report and evaluate the quality of credit decision taken by the functional groups.
• In case of investing an amount for a particular purpose, the banks must subject such approval to same degree of credit analysis as to that of loans.
• Portfolio Management is a technique that enables us to gauge asset quality. It is very helpful in determining the non- performing loans and much efficient than the older system of checking the same through balance sheet.

Inter-Bank Exposure

Each bank is exposed to a certain degree of risk and in order to maintain a check on each bank, a centralized overview of the aggregate exposure on other banks must be evaluated as this shall help in proper estimation of the current economic conditions and thus a better planning towards the risk that a particular bank may face. The exposure limit can be set up for each of the banks based upon an assessment that shall take into consideration financial performance, operating efficiency, management quality, past experience, etc.

Cash Reserve Requirements

In order to maintain liquidity with the banks and to prevent them from running out of cash or liquidity risk, the Reserve Bank of India has laid down certain requirements that the banks must fulfill to remain afloat. These requirements are:

• Cash Reserve Ratio – Cash Reserve Ratio is certain amount of total deposit that the banks are asked to park them with the RBI. These deposits with the RBI carry no interest. This a measure by which banks will not have to look for other sources in times of cash crunch and they and utilize their own savings.
• Statutory Liquid Ratio – Statutory Liquid Ratio is that requirement for the commercial banks where they have to keep a certain percentage of the total deposits with themselves in form of cash, gold reserves, government securities, etc. which is not available to general public for the purpose of loan.

Prudential Limits

There are certain prudential limits that the banks must place in order to avoid liquidity crisis. Some of the limits are:

• Cap on inter-bank borrowings, especially call borrowings
• Purchased funds vis-à-vis liquid assets
• Core deposits vis-à-vis Core Assets i.e. Cash Reserve Ratio, Liquidity Reserve Ratio and Loans
• Duration of liabilities and investment portfolio
• Maximum Cumulative Outflows. Banks should fix cumulative mismatches across all time bands
• Commitment Ratio tracks the total commitments given to corporates/banks and other financial institutions to limit the off-balance sheet exposure
• Swapped Funds Ratio, i.e. extent of Indian Rupees raised out of foreign currency sources.

Fund Transfer Pricing

Fund Transfer Mechanism is a process designed to assess the financial impact of different sources of funds that will be helpful in evaluating profitability. It analyses the cost of various funds available in the market and helps in ascertaining of profits which shall help in reducing risk of unfavourable returns or even losses. FTP works by assigning various assets and liabilities to the functional units. As each unit attracts a source of fund, this helps in evaluating the cost of each source of fund and the return each funding source shall provide.

Operational Risk Management

Operational Risk can sometimes become handy. In order to escape from the risk associated with the operations of the bank, the banks must regularly conduct internal control (segregation of duties, clear management reporting lines and adequate operating procedures) and internal audit. The banks can utilize contingent processing capabilities to reduce the impact of operational risk. The banks must regularly develop policies and procedures that help in combating operational risk and the policies should address product review process, involving business, risk management and internal control functions.

Capital Adequacy

In order to maintain long term soundness of the banks, the banks must evaluate their capital adequacy based on the economic risk that surrounds the bank. While considering the economic risk, the banks must take account of both the qualitative and quantitative factors. They must take care of internal as well as future capital needs apart from established minimum capital requirements.

Conclusion

There are a lot of risks that the banks come across throughout the period of their functioning. In order to effectively come over these risks and to maintain sound functioning, the banks must follow the guidelines provided by the RBI. These guidelines are not binding on the banks but if they follow the guidelines, they will definitely gain positive results as the economic environment is uncertain and dynamic. The RBI in order to cope with the dynamic environment keeps on releasing notifications that provides for new guidelines to tackle the risks posed by the changing environment.

The post RBI Requirements relating to Risk Management in Banks appeared first on iPleaders.

In this article, Prashant Sharma of IIMT & School of Law, G.G.S.I.P.U  discusses how minimum wages is determined under the Minimum Wages Act, 1948 in Delhi based establishments.

Introduction

The government stipulates the lowest wage to be paid to any employee keeping in mind the basic necessities, except for certain kinds of employment where less than a thousand people are employed in the entire state. Depending on the nature of the occupation, minimum wages may be determined by the State Government, in which case it will vary from state to state or by the Central Government. This is specified under the Minimum Wages Act.

The Minimum Wage Act, 1948 was passed with an objective to secure the welfare and the interest of the workers who are employed in certain establishments in order to be protected in the today’s competitive market. This Act helps the workers to prevent them from getting exploited by the employers or the management.  

To put it into the legal perspective, minimum wages includes:

1. A basic rate of wages + a special allowance; or
2. A basic rate of wages with or without the cost of living allowance and the cash value of the concessions; or
3. An all-inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of the concessions, if any.

As per Article 43 the Directive Principles of State Policy, the State shall endeavor to secure, by suitable legislation or economic organisation or in any other way, to all workers agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities and, in particular, the State shall endeavour to promote cottage industries on an individual or co-operative basis in rural areas.

Criteria to fix Minimum Wages

In the year 1948, the Tripartite Committee on Fair Wages was appointed by the Central Advisory Council. The said committee had laid down a certain criterion for minimum wages. Such criterion provides 5 elements which have to be considered while fixing the minimum wages. These are as follows:

1. 3 consumption units per earner;
2. Minimum food requirement of 2700 calories per average adult;
3. Cloth requirement of 72 yards per annum per family;
4. House rent corresponding to the minimum area provided under the Government’s Industrial Housing Scheme;
5. Fuel, lighting and other miscellaneous items of expenditure to constitute 20% of the total minimum wage.

Adding to it, the Appropriate Government have the power to fix the minimum rates of wages. It can fix the minimum rates of wages either: (see here)

• by the hour; or
• by the day; or
• by the month or
• by such large wage period as may be prescribed.

Section 3 and Section 5 of the Act talks about fixation of minimum wages and procedure of fixing the minimum wages respectively. As minimum wages includes many elements as mentioned above, it also includes industrial dearness allowances, for all the industrial employees which were covered under the Act.

How to find Minimum Wages

To know about the minimum wage of any worker in an establishment of a concerned State, kindly go to the official website of Labour Government. For instance the current minimum wage rate for the Union Territory of Delhi can be reached here.

Delhi Labour Department Notification

The Labour Department in 2016, have issued the revised minimum rate of wages for Delhi for the class of workmen/employees. To know about the minimum wage of any worker in an establishment of a concerned State, kindly go to the official website of Labour Government. For instance the current minimum wage rate for the Union Territory of Delhi can be reached here.

• In order to calculate the daily wage, monthly gross salary is divided by 30, as the weekly offs are taken as the pay leaves. (The salary is to be divided by 30, irrespective of the actual number of days in a month).
• However, in case of daily wages, the weekly offs are not counted as paid leaves and therefore, are paid only for 26 days.

Therefore, we can calculate it as follows:

Salary per month (Gross)/ 30 days in a month x No. of days present

Example: Rs.11,830/26 = Rs.455/- are the daily wages which can be multiplied by number of days he was working to find out his/her actual minimum wage he will get in hand.

Dearness Allowances

The Dearness Allowance (DA) is a cost of living adjustment allowance paid to Government employees, Public sector employees (PSE) and pensioners. It is payable to monthly, daily and piece rate earners. The respective State Governments issue the Cost Of Living Index number every six months for each and every scheduled employment.

The following formula is being used by the Central Government to calculate the dearness allowance for the Central Government Employees, after implementing the recommendations of the 7th Pay Commission, from July 1st 2016 onwards.

The formula is:

Dearness Allowance% = (Average of AICPIN for the past 12 months – 261.4) * 100 / 261.4
(see here)

AICPIN stands for the All India Consumer Price Index. Dearness allowance is calculated from the AICPIN value, once the AICPI(IW) for a particular month is published by the Government. AICPIN are issued by the Ministry of Labour and Employment, which are revised periodically. The site can be accessed here.

The dearness allowances are revised by the government twice a year. It was increased by the Central Government from 5% to 7% when was revised in January 2018 (see notification here).

Revised Rates of Variable Dearness Allowance by The Central Government

The minimum rates of wages include the basic rates and Variable Dearness Allowance. The revised rates of Variable Dearness Allowance on the basis of the average Consumer Price Index for Industrial Workers, for the workers employed in various jobs w.e.f. 01.04.2018 were specified in a notification by the Chief Labour Commission dated 4th April 2018 can be accessed as follows:

• Industrial workers in agriculture (see here, page 1)
• Industrial workers in mines (see here, page 2)
• Industrial workers of construction and maintenance of roads or building operations (see here, page 3)
• Industrial workers of stone mines (see here, page 4)
• Industrial workers who are employed for Sweeping and Cleaning excluding the activities prohibited under the Employment of Manual Scavengers and Construction of Dry Latrines Prohibition Act 1993 (see here, page 6)
• Industrial workers for watchman and ward (with or without arms) (see here, page 7)

Revised Minimum Wage in Delhi, Gujarat, Chattisgarh, Tripura, West Bengal

The image shows a part of the table.

Image Source: https://clc.gov.in/clc/node/572.

The daily Basic Wage + Daily VDA = Total Minimum Wages

Maintenance of Register and Records

Every employer in an establishment shall maintain such registers and records giving such particulars of the wages paid to employees employed by him, the receipts given by them. (see here)

In cases of maternity relief

The maternity leave is awarded full pay on completion of at least 80 days in an establishment in the 12 months prior to her expected date of delivery. The maternity benefit is awarded at the rate of the average daily wage for the period of a worker’s actual absence from work. Apart from 12 weeks of salary, a female worker is entitled to a medical bonus of 3,500 Indian rupees.

However, the government has amended the Act in 2017, after which the duration of maternity leave has been increased from 12 to 26 weeks which can be availed prior to 8 weeks from the date of expected delivery (earlier it was 6 weeks prior). From third child onwards, maternity leave of 12 weeks will be available instead of 26 weeks, that could be availed 6 weeks prior.

In cases of worker who took leaves

Suppose, A is a person who is a semi-skilled worker in an XYZ Industry. He had worked for 20 days in a month and had taken 6 days leave. So, his minimum wages for a month should be:

Total Minimum Wage for one month – Minimum Wage for 6 days i.e.,

Rs. 10,764 – (Rs. 414 x 6)= Rs.8,280/-

(as per the 2016 Delhi Government notification)

Amendments in Delhi

The recent amendments in the Minimum Wage Act, 1948 were been made by the Delhi Assembly. The Minimum Wages (Delhi) Amendment Act, 2017,which is officially notified on May 4, 2018, has certainly proved to be beneficial for the employees (as under Section 2(i) of the Minimum Wage Act, 1948) against the acts of the employers when he provides wages less than minimum wages.

According to Section 22 of the amended Act, the punishment for an employer providing wages less than minimum wages is increased from 6 months to three years and/or the fine is increased from Rs. 500/- to up to 50,000/-.

Further, in the case of other States, an employer can be liable under Section 22 of the Minimum Wages Act, 1948. To know about the minimum wages for the other States, kindly refer to the recent amendments that have been made for the respective States.

Conclusion

Recently, the High Court of Delhi had quashed the Delhi Labour Department Notification of 2017 for revised minimum wage for all the industrial establishments situated at Delhi. One of the Judge. The High Court observed that the formation of the Minimum wage advisory committee under Section 5 and 9 of the Minimum Wage Act, 1948 is ultra virus. Further, the Court declared the act of revising the minimum wage was a “hurried action” taken by the Government of Delhi and the committee was not constituted a per the Act which is violative of Article 14 of the Constitution of India.

The consequence of this action was that from now on, the wages of the workers from unskilled to skilled ones shall be given as per the 2016 Labour Department notification which is quite low in comparison. Once again, the poor have to face the dramatic and drastic effect.

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In this article, Naba Khan of Aligarh Muslim University discusses the interplay between the Payment Of Wages Act, Delhi Shops And Establishments Act And Factories Act.

Introduction

The Industrial Laws deal with the labour and employment in India. These laws deal with the issues in the complex relations between the workers, employers and government, determining the employment period, time and conditions for payment, conditions of the workers, etc.

The Indian labour law divides the industries into two broad categories as factories and the shops and commercial establishments.

The Factories Act, 1948

All the factories that employ 10 or more workmen or were working on any day of the preceding twelve months, and carry out manufacturing activities with the aid of power are dealt by the provisions of the Factories Act. Adding to it, in the case where the factories employ 20 or more workers, or were working on any day of the preceding 12 months, and in any part of which a manufacturing process is being carried on without the aid of power, are also governed with the provisions of the Factories Act.

The Act is enforced by the State Government through their ‘Factory Inspectorates’.

It emphasizes the welfare, health and safety of workers. The said Act also provides specific safeguards against use and handling of hazardous substance by occupiers of factories and laying down of emergency standards and measures.

Shops and Commercial Establishments

‘Shops and Commercial Establishments Act’ regulate the shops and establishments in their respective state as it is a state statute. This Act generally provides for opening and closing hour, leave, weekly off, time and mode of payment of wages, issuance of appointment letter etc. As all the States have their own Shops and Establishments Act, herein we have dealt with the Delhi Shops and Establishments Act.

The Delhi Shops And Establishments Act, to the whole of Union Territory of Delhi including the Municipal Areas, Notified Areas and Cantonment limits of Delhi, Shahadra, Civil Lines, Mehrauli, Red Fort and Delhi Cantonment but Government may, by notification in the Official Gazette, as per Section 1(4).

Payment of Wages Act

It applies to the payment of wages of the workmen in any factory or in any railway administration or workmen employed in an industry or any other establishment as specified in of Section 1(4) of the Act.

Interplay

Time and Payment of Wages

Section 19 of the Delhi Shops and Establishments Act and Section 5 of The Payment of Wages Act enumerate laws related to the time and condition for the payment of wages.

Section 19 lays down that the employer shall pay the wages of the employee before the expiry of 7th working day of the wage period such wage period shall not be more than a month. On the same note Section 5 of the PWA lays down that employer shall pay the wages of the workers employed in an industry or factory before the 7th working day and before the expiry of 10th working day in case such establishment employees more than a thousand workers.

Payment of wages for leaves and holidays

As per Section 79 of The Factories Act Workers are given the leaves with wages, an adult at the rate of one day for every 20 days of work and a child one day for every 15 days of work, provided that they have worked for at least for 240 days in a calendar year. In calculating leave under The Factories Act fraction of leave of half a day or more shall be treated as one full day’s leave and fraction of less than half a day shall be omitted.

Further, the worker shall be entitled to wages at a rate equal to the daily average of his total full time earnings for the day on which he actually worked during the months immediately preceding his leave, excluding the overtime and bonus but including the dearness allowance. Where worker has not worked on any day in the preceding month of the leave, he will be paid at the rate which is equivalent to daily average of his total full time earning of the days he worked.

However, in case of a worker working in a shop or any establishment, according to Section 23 of the Delhi Shops and Establishments Act, every employee shall be paid for the period of his leave at a rate equivalent to the daily average of his wages for the days on which he actually worked during the preceding three months, exclusive of any earnings in respect of overtime but inclusive of dearness allowance.

Deductions from Wages

Section 7 to Section 13 of The Payment of Wages Act talks about:

List of deductions for which rules are provided in the act

Adding to it, under the Delhi Shops and Establishments Act, the deductions mentioned in the list above (under The Payment of Wages Act) have been added including some further provisions related to the deduction:

• Deductions of income-tax payable by the employed person;
• Deductions required to be made by order of a Court or other competent authority;
• Deductions for subscription to, and for repayment of advances from, any provident fund to which the Provident Fund Act, 1952 applies or any recognized provident fund as defined in section 2(38) of Income Tax Act, 1961 or any provident fund approved in this behalf by the Government during the continuance of such approval;
• Deductions for payment to co-operative societies or to a scheme of insurance approved by the Government.

The Delhi Shops and Establishments Act, 1954 and The Factories Act, 1948

Restriction on double employment

Section 19 of the Delhi Shops and Establishments Act and Section 60 of the Payment of Wages Act deals with the same aspect for the restrictions on double employment of the employees:

“No person shall work about the business of an establishment or two or more establishments or an establishment and a factory in excess of the period during which he may be lawfully employed.”

Spread over

Section 11 of the Delhi Shops and Establishments Act lays about spread over. Any adult person shall not spread over for more than ten and a half hours in any commercial establishment or for more than twelve hours in any shop.

According to Section 56 of the Factories Act, the periods of work of an adult worker in a factory shall be so arranged that inclusive of his intervals for rest, they shall not spread over more than ten and a half hours in any day.

Employment of young person-hours of work

Section 13 of the Delhi Shops and Establishments Act, provides that no young person shall be allowed to work in any establishment for more than six hours a day.

According to Section 71 of the Factories Act, no child shall be employed or permitted to work, in any factory for more than four and a half hours in a day and during the night.

Prohibition of employment of children

Section 12 of the Delhi Shops and Establishments Act and Section 67 the Factories Act states that no child shall be required or allowed to work whether as an employee or otherwise in any establishment.

However, the definition of the Factories Act “child” means a person who has not completed his fifteenth year of age while the term “child” under the Delhi Shops and Establishments Act, means a person who has not completed his twelfth year of age;

Working hours for adults

Section 8 of the Delhi Shops and Commercial Establishment Act and Section 54 of the Factory Act states the same working hour of adults:

“No adult shall be employed or allowed to work about the business of an establishment for more than nine hours on any day or 48 hours in any week and the occupier shall fix the daily periods of work accordingly.”

Further, in the case of Section 15 of the Delhi Shops and Commercial Establishment Act, opening and closing hours of shops and commercial establishment states that:

“No shop or commercial establishment on any day, be opened earlier than such hour or closed later than such hour, as may be fixed by the Government by general or special order made in that behalf.”

Conclusion

The Factories Act and The Shops and Establishments Act both the Acts deal with the regulation of conditions of service of workers engaged. While the Factories Act is applicable to establishments wherein a manufacturing activity is carried out the Shops and Commercial Establishments Act is applicable to establishments which do not fall under the definition of factory, mine or plantations. The Factories Act is a central Act whereas the Shops and Commercial Establishments Act is a state Act and therefore, there are separate Shops Act for separate states.

However, the provisions of The Payment of Wages Act are duly applied to the contract labour employed by any factory or establishment in addition to the provisions of the other two respective Acts, provided that the employment in which they are engaged is otherwise covered by the Payment of Wages Act.

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What are the common contracts a lawyer must draft?

We all know that drafting is quintessential aspect of every lawyer’s skill sets. They must learn how to draft petitions, applications, notices, etc. But contract drafting is often attributed to the skills of lawyers at law firms or in-house counsels.

All lawyers must learn how to draft contracts, early in their career. It not only helps in increasing your clientele, it helps you supplement your income as well as lead to better prospects. Read this article, to know why young advocates must learn how to draft contracts.

So while you learn and earn, many times you will get all sorts of clients with different requirements. You may need to advise on employment issues, or, tenancy issues, etc. In order to do that, you must be familiar with the contracts of different nature. To be able to interpret contracts is only one aspect, you must be able to create one as well.

There are several kinds of contracts depending upon your area of expertise like commercial contracts, general contracts, intellectual property contracts, technology contracts, e-commerce contracts, etc. These require specialised knowledge of contract drafting which can be inculcated by doing a contract drafting course.

The common contracts a lawyer may need to draft are as follows:

• Confidentiality and Non-Disclosure Agreement/ Non-Circumvention

NDAs are generally signed when two companies, individuals, or other entities (such as partnerships, societies, etc.) are considering doing business. The idea is that they  need to understand the processes used in each other’s business for the purpose of evaluating the potential business relationship. But so that one doesn’t use the information so shared for the detriment of the other party.

NDAs can be mutual as well as for single party use. For instance, and employee may be asked to sign an NDA with his employer. In fact, some employment agreements will include a clause restricting employees’ use and dissemination of company-owned confidential information. Sometimes, there are confidentiality agreements signed whenever there is settlement of legal dispute between the parties.

You can refer a sample NDA here.

• Memorandum of Understanding

A memorandum of understanding (MoU) is a type of agreement between two (bilateral) or more (multilateral) parties. It expresses a convergence of will between the parties, indicating an intended common line of action. It is often used in cases where parties either do not imply a legal commitment or in situations where the parties cannot create a legally enforceable agreement. It becomes binding only when the essentials of contract is added to it, like offer, acceptance, consideration, intention, etc.

You can download a sample of MoU from here.

• Leave and License Agreement

One of the most common agreements is the leave and license agreement. It is an instrument/agreement wherein the licensor allows the licensee to temporarily occupy and use one portion of an immovable property for carrying on his business for residential purposes.

The licensor grants the leave and license to the licensee for a minimum period of 11 months and for this, in lieu of license fee/rent money. This agreement has to be mandatorily registered before the sub-registrar of assurances at the place of jurisdiction where the property is located.

Generally, in case of letting out spaces for rent for residential or business purpose, owners enter into such an agreement with the prospective party. In most cities, for short term period such agreements are entered into and renewed as needed.

You can refer to the sample of the agreement here.

• Lease Deed

The legal definition of a lease is provided for under Section 105 of the Transfer of Property Act. A lease is a transfer of a right to enjoy a property made for a certain time in exchange for an amount of money or a service or any other thing of value to be given periodically such as price paid or promised or of money, a share of crop, service or any other thing of value to be rendered periodically or on specific occasion to the Lessor by the Lessee who accepts the transfer on such terms.

Lease gives the lessee right of possession for a longer duration for a lump sum payment or monthly rental fees. For instance X leases a property from Y, in lieu of a specific consideration. Then X becomes the lessee and Y is the lessor. They are both bound by the rights and obligations laid out in the lease deed.

You can learn how to draft a lease deed by reading more about it. You can refer the sample agreement here.

• Partnership Agreement

In case of an enterprise for profit between two or more people, a partnership agreement may be entered into. The agreement defines the nature of the business, the capital contributed by each party, the rights and obligations of parties, the share of profit/loss of each party, etc.

In a partnership, the partners are liable jointly and severally for all profit/loss, unlike in any other setup. For instance, if the debt incurred is more than the resources at the business, then as per the terms of the agreement, partners will be personally liable for the same. Their personal properties can be attached by the courts for the repayment of such debts.

The registration of a partnership deed in India is not mandatory, unless the firm is being registered.

You can refer to the sample here.

• Employment Agreement

An employment contract or is signed between an employer/ company and an employee. The employment agreement contains specific provisions like joining date, office location,etc., to the terms and conditions of the employment, like compensation, holidays, working hours, etc. The rights and obligations of the employee are also laid down in form of terms and conditions to which the employee is legally bound upon signing the agreement.

For instance, if an employee’s work invents a product during his tenure with the company, then the company may own it, provided it is clearly mentioned in the employment agreement.

You may refer to the sample agreement here.

• Contract of Sale

Section 4(1)  of the Sale of Goods Act, defines the contract of the sale as  follows-

“A contract of the sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to a buyer for a price.”

The contract of sale specifies the nature of the transaction, description of goods, mode of delivery of goods, mode of payments, rights and obligations, warranties by the parties, termination, etc.  For instance, A has entered into contract of sale with B, for the sale of 10,000 units of books in lieu of payment through NEFT mode of payment. Now as per the terms of the agreement, the payment cannot be made by cash or cheque, or it can be ascertained to be a breach of contract.

To know more about the essential clauses in a contract of sale and its sample, you can refer to this article here.

The clients for the common contracts are both easy to come by to the lawyers and good for their practice. The benefits of contract drafting for lawyers is immense. It can help supplement their incomes to increase their clientele and knowledge of law. There is a necessity for the lawyers to learn contract drafting. They can work with law firms, or in-house legal departments to learn the same or they can do contract drafting course. The idea is to learn to draft the contracts at the early stages of their practice to gain the maximum out of it.

Good luck

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Amity University Madhya Pradesh is organising its second edition of National Moot Court Competition 2018. The moot will be held on 7th and 8th September, 2018 at Gwalior.  The teams can register themselves by sending the filled registration form and demand draft to the organisers on or before 20th August 2018. The entry fee is INR 3000/-.

The area of law of moot problem is ‘Terrorism’. Dr. Sandeep Kulshreshtha of Amity University, Madhya Pradesh has framed the moot problem.

The organising committee consists of Ms. Anu Bhatnagar (Head Student coordinator), Ms. Nomita Mishra (Head Student coordinator), Harshit Sharma (Student Coordinator), Raj Kishor, Rohit Bansal, Shivangi Jain, Nidhi Maheshwari, Sajal Gupta, Sujal Gupta, Arpita Ghodke, Supriti Bhargava, Netraa Singh, Sarthak Pathroliya, Bhumi Sharma.

The prize for winners are prizes worth 5000/- INR will be given to winners of event by way of gift coupon, Winner – 2500/- INR, Runner-up- 1500/- INR, Second Runner-up- 1000/- INR, cash coupon worth Rs. 200/- INR each to all participants of event.

Every year the university organizes one Intra and one National and International Level (Amity Dubai) Moot Court Competition. Last year’s moot court competition was a huge success and teams from all over the country had participated. Their participation and co-operation raised the level of competition.

The winner for the 1st edition of the Moot Court competition was Christ University (Bangalore) and the Runner-up was UPES Dehradun.

Some of the teams, which participated in the 1st edition of the competition, were Amity Lucknow, UPES Dehradun, Christ College, Amity Jaipur, and Amity Dubai.

For further details please contact:

Dr. Sandeep Kulshrestha, Phone: 8964882928, Email: skulshrestha@gwa.amity.edu

Anu Bhatnagar, Head Moot Court Committee, Phone:  9753434331; Email: nub568@gmail.com

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