This article is written by Komal Shah, Content Head & Co-founder, LawSikho.

“Kaun saala aisa bolta hai?” the advocate, who was frustrated with the opposing counsel’s strong arguments blurted out, while rummaging his papers. 

He then noticed that the court had fallen dead silent. Within a split second, he realised that the comment he had questioned had actually come from the judge. But he had gone through too extensive a training to go down in demanding situations like this. 

In the next split second, he picked up – “My Lord, let me humbly repeat my question – Kaun sa law aisa bolta hai?”

Jokes apart, when I was a kid, there is something my parents always used to hammer down on my head as being necessary. They called it ‘presence of mind’ – something people in today’s age refer to as ‘being present’ or ‘mindfulness’. It just refers to the state of being in the moment where you are right now, and nowhere else. It can be a lifesaver in courtroom situations.

In my teens and early youth, I was a complete brooder. 

I would never be where I was. I would be sitting in the living room and my brain would work fast forward to a few years later. 

I could visualise things that weren’t there vividly, in ridiculous details. Imagine what was the cost of that? I was not sparing much bandwidth for the work at hand, for what opportunities were in front of me.

I can still fall victim to thought attacks. But over the years, I have now trained my brain to brood only when I can afford to. 

For example, I would be brooding during my morning walk, and be fully present when I am cooking. 

I have written before about how visualisation also helps in bringing things from your imagination right down onto the Earth, in front of you. But today, I want to write about mindfulness, and that there is something called ‘legal mindfulness’.

I recall that in one of our classes, while dealing with an assignment about investment, all of us were discussing what approvals would be required by the target entity, which was a private company. 

The acquirer, in this case, was a public company. We were focusing on the nuances of investment alone, looking at the terms and looking at the exemptions available to the private companies. 

Click Above

This is when one of the students, who I may say was ‘legally mindful’ chirped in “But if this investment happens, the private company will become a subsidiary of a public company and therefore, a deemed public company, so it would not have the exemptions available.” 

We were so deep into the terms of investment that we missed upon this very basic tenet of company law – a subsidiary of a public company is a public company for all practical purposes. But this guy didn’t miss it (LawSikho students are simply amazing – you’ve got to be inside the classes if you want to experience this).

What makes you legally mindful? For starters, you must have the fundamentals deeply ingrained into you. 

While I was undergoing oral coaching for the CS course, one day, one of the professors asked us “Who is the king maker in a company?” 

“Whom will you consider the ultimate authority, in the operations of a company?” 

There were varied answers ranging from managing director, chairman, board of directors etc. Then the guy dropped the bomb. “Do you know that the chairman can be changed by the board and any of the directors can be removed by the shareholders? It’s the shareholders alone who are the king makers.” 

Given that we have seen lead investors capable of dragging the company down to sale if they want, it seems he was right. 

Even for listed entities where shareholders are scattered, we now have provisions for class action suits – it’s just a matter of time when these would start to gain traction. 

The point is that if you want to bring your brain fully to a legal analysis, your fundamentals should be very clear. This is why we are including content that discusses fundamentals in all of our courses, no matter how advanced they are meant to be. Before the chapters dealing with litigation, for example, we have decided we must have content covering the basics too.

Those who know the basics can skip, or better, revise from time to time. Fundamentals never go out of date. You cannot relearn them too many times.

The second and indispensable requirement for being legally mindful is training. 

How do you train your brain? 

Do you know what happens to an iron when you continuously rub it with a magnet? It becomes an artificial magnet. 

When you rub, rack, graze your brain against really smart heads, your brain becomes wired and starts functioning at far greater power. The more problems you have dealt with, the more problems you can deal with. Especially if you have been approaching these with collective intelligence. This is precisely why we have only problems being discussed in the classes and being attacked by a bunch of to-be superheroes.

The third requirement (or maybe this needs to be done even before the first two) is to free your brain from limiting beliefs. 

Often we are hopelessly restricted by limiting beliefs of not having time or not having money or simply not having the aptitude to engage in such insightful learning. 

We often encounter students overwhelmed with the amount of activities they have taken up. 

What’s going on all the time in their minds is “I have so much to do” and they are only looking at the pending amount of work. They are, thus, not able to be mindful and start to act and diminish the amount of pending tasks. 

When you start working on something, you realise that it isn’t such a big deal at all. All you need to do is to be present and work on the first available task at hand, right in that moment. You need to set priorities and work on things one at a time, one after another.

I have myself dealt with a limiting belief just a little more than a month back. 

I believed that if I was deep into one area of law, I couldn’t simultaneously deal with another. 

When I attacked this belief, I realised that it was possible to be interested in, and even go deep into two or three or as many areas of law as you felt like or which caught your fancy, all at the same time. You just have to drop the notion of a limit and circumstances and things miraculously change themselves to serve your purpose. 

So here’s an invitation to break your limits and bring your legal mindfulness into the classes of any of our following courses:

DIPLOMA 

Diploma in Business Laws for In House Counsels

Diploma in Companies Act, Corporate Governance and SEBI Regulations

EXECUTIVE CERTIFICATE COURSES

Certificate Course in Advanced Corporate Taxation

Certificate Course in Insolvency and Bankruptcy Code

Certificate Course in Advanced Civil Litigation: Practice, Procedure and Drafting

Certificate Course in National Company Law Tribunal (NCLT) Litigation

Certificate Course in Arbitration: Strategy, Procedure and Drafting

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

The post There’s something called legal mindfulness….. appeared first on iPleaders.

This article has been written by Himani Singh.

RCEP is an agreement which was brought in light and discussed among the ASEAN countries back in 2012 and now, in 2019, it is making headlines in the newspaper all around the world. RCEP is an agreement between the 10 members ASEAN countries plus India, China, Japan, South Korea, Australia, the agenda of this agreement is to form the largest group of countries which has the alliance for the free trade without any limitation, the markets of the member countries will be absolutely open to everyone in the pact of RCEP. This agreement was a lot in debate in Indian states in past as well as it is currently going on in the present too. The main question raised and debate going on all around is whether the decision made by Narendra Modi in the Bangkok meeting to walk out of RCEP was right getting applause or should be condemned? In the quest of the answer? Here in this article we will discuss from our collected points whether RCEP is a boon or ban to India in its current situation. 

What is RCEP? 

Let’s start with discussing what RCEP is and how and why the agreement came into existence, so as to get the core understanding of the whole agreement we need to know the beginning of this agreement with its main objective in mind. 

RCEP stand for Regional Comprehensive Economic Partnership. As the spelling of word’s acronym RCEP suggestes that same is the objective of the agreement. It talks about the association of countries which would help to build each other’s economy by opening up trade between the region’s biggest and fastest-growing economies. 

Inception of the Agreement- RCEP

RCEP was launched in November 2012 in Phnom Penh, Cambodia as an initiative by ASEAN to encourage trade among its member states and six other countries.

All the six other member countries Australia, China, India, Japan, New Zealand and South Korea already have standalone free trade agreements with ASEAN. Coming together under RCEP would boost commerce across the group by lowering tariffs, standardizing customs rules and procedures, and widening market access especially among countries that don’t have existing trade deals. All 16 countries started negotiating RCEP in 2013, when talks for another major trade pact -the Trans-Pacific Partnership or TPP were underway. Given China’s absence in the then U.S. led TPP, which was slated to be the world’s largest trade deal, many observers considered RCEP a way for Beijing to counter American influence in the region.

In 2017, however, U.S. President Donald Trump pulled his country out of the TPP and slapped punitive tariffs on several U.S. trading partners for what he said were unfair trade practices.

In particular, the U.S.-China trade war has hurt many Asian exporters by reducing demand for their goods and slowing down growth. The urgency to conclude RCEP increased after all that.

Main Agenda of RCEP

The objectives which has been derived by the experts of trade, for the commencement of the RCEP was to make the trading flexible among the 16 countries who are supposed to be a member of RCEP but the main reason for which RCEP has been brought in force is to rejuvenate the China’s economy. After trade war and the slowdown of China’s economy, it was its strategy to expand its market for export and recover from the loss of the trade war with U.S. ( who joined TPP to expand its export but later opt out of it and levy the heavy tariffs on the countries who was partner with it) 

Analysing the bilateral trade of goods, services and FDI flow 

Eight RCEP countries have been considered for the study of trade imbalances with India and the competitive advantage of Indian exports in these destination countries. The decision on the selection of these countries is based on their historical trade ties and volumes of trade with India

• India-non asean trade relationships and RCEPs effect

China

It was the 4th largest export market for India (3.4% of Indian exports) and the largest import market for India accounting for 17% of the Indian imports in 2016. The overall bilateral trade stood at $69.4 billion with India having a trade balance of -$51.6 billion. The same is being worried to get worse once India enters RCEP.

China, again, is heavily dependent on imports from Asia which stood at $673 billion (out of total $1.2 trillion) in 2015. South Korea and Japan, collectively, account for 37% of these trades, heavily dominated in the machinery and metals. India, here, accounts for a minuscule 1.8%.

New Zealand

It was the 79th largest export market 

for Indian goods with exports of $308.7 million. With the country, India maintained a negative trade balance of $200.1 m. The reason for the small amount of trade can be attributed to the competition which Indian goods face with their Chinese competitors. The Chinese goods have an advantage as China has already entered into a free trade agreement with New Zealand since 2008. 

To make Indian goods more competitive in New Zealand market, an FTA with the country can be New Zealand is heavily dependent on imports from its Asian neighbours and Australia, which stood at $23.2 billion (out of total $35.7 billion) in 2015. China and Australia account for 30% and 19% of these trades respectively. China sends its machinery while Australia supplies food products and chemicals as a part of this trade regime. India is yet to make a presence here and accounts for only a minuscule 1.8%.

India- Asean members relationship and RCEP effect. 

Thailand

As on 2016, Thailand was the 25th largest export market for India with exports of $3.0 bn. Despite signing the free trade agreement with the ASEAN in 2009, the trade imbalance with the country has widened in the subsequent years. As on 2016, India had a trade imbalance of $2.4 bn.

Philippines 

imports from Asia stood at $64.5 billion (out of total $83.6 billion) in 2015. China and Japan account for 27% and 13% of these trades respectively; heavily dominating in the electric machinery. India falls behind here as well and accounts for a minuscule 2.1%

Results of the analysis suggests-

The analysis for the above countries suggests that India does not have significant import partnerships within RCEP despite having bilateral FTAs and hence, getting into RCEP might help it to broaden the same. However, the categories for expansion are limited given heavy competition from Chinese products. On the contrary, imports into India might increase many folds resulting in worsening of trade deficits. There is no denying the fact that India stands to lose on merchandise trade; it can only restrict it by carefully expanding exports and protecting domestic production from imports. Some of the key commodities in this list should include agricultural products, metals and minerals, and pearls and gemstones.

Reason why India walked out of RCEP

The decision of India to walk out of the RCEP was absolutely apt for situation where India is standing today. Above we have analysed certain boon and bans associated with this agreement and based on the above analysed facts one could argue that RCEP is a agreement by China in answer of TPP to USA ( which USA is not part of now) and beyond that in current economic situation it was not beneficial for India to sign a free trade agreements with huge economy like China. Not only the reason was that India was going to be in pact with big economies of the world but India was not in any way getting benefited out of this agreement. Every country becoming a part of RCEP had their eyes stake on India because India is a big market for all the countries to increase their exports and get a chance to boon their economic growth but was the situation same for India as well? So answer to this is big no. 

Factors affecting the decision to walk out are- 

• • The PM concluded by stating that he cannot put Indian farmers’ and workers interests at stake by signing the trade deal to gain larger market access

• Non-favourable Trade Balance

Though trade has grown after Free Trade Agreement with South Korea, ASEAN countries and Japan, imports have grown faster than exports from India. According to a published paper by NITI Aayog, India has a bilateral trade deficit with majorly all of the member countries of RCEP.

• Dumping of Chinese Goods

India has already a member of FTAs with all the members of RCEP except China. This is the most important concern for India, as post becoming member of RCEP, cheaper products from China would have flooded the Indian market.

• Non-acceptance of Auto-trigger Mechanism

In order to deal with the imminent rise in imports, India had been seeking an auto-trigger mechanism. 

Auto-trigger Mechanism would have allowed India to raise tariffs on products in instances where imports cross a certain threshold. However, other countries in the RCEP were against this proposal.

• Protection of Domestic Industry

India had also reportedly expressed apprehensions on lowering and eliminating tariffs on several products like dairy, steel etc. 

For instance, the dairy industry was expected to face stiff competition from Australia and New Zealand.

Currently, India’s average bound tariff for dairy products is on average 35%. The RCEP binds countries to reduce that current level of tariffs to zero within the next 15 years.

• Non-Consensus on Rules of Origin

India was concerned about a “possible circumvention” of rules of origin. Rules of origin are the criteria used to determine the national source of a product. Current provisions in the deal reportedly do not prevent countries from routing, through other countries, products on which India would maintain higher tariffs.

Implications of India’s withdrawal from RCEP

India’s decision to not sign RCEP will benefit the Indian small businesses, farmers,MSMEs, pharmaceutical, data security, chemical industries & steel industries.

India had major concerns about getting overtly flooded by imports mentioned under the agreement, which will leave the small Indian businesses and farmers at risk. As per the Commerce and industry minister Piyush Goyal, the decision of not signing the RCEP agreement will give a boost to the ‘Make in India’ initiative. 

RCEP and Prophecies

India stepping out of the RCEP was no brainer and was expected. The major aim of the RCEP was meant to be China’s answer (political and economical) to the Trans-Pacific Partnership (TPP), which the USA is now no more part of. However, India does not share Chinese political estrangement with US, which is reflected in the ongoing US-China trade war. It is believed and argued that once the trade war between two gaint economies will come to an end (which may be sooner than expected), China could lose interest in RCEP. At the same time, India has had political differences with China in the sub-continent and also on issues in the South China seas. Hence, there is no strategic objective for India being part of the RCEP at this point. For the RCEP countries minus India, the standard trade pattern has been exports of intermediates/inputs to China, which are then assembled for export of final product to the markets of the EU and USA. This trade is large and will continue, so that RCEP minus India merely restates the current trade pattern in these countries.

Conclusion

After the dept analysis of the whole agreement, considering the advantages and disadvantages in the picture I have come to the conclusion that looking at the current scenario of India, at this moment where India is having a huge trade deficit with country like China,which could  lead to adverse effects on the Indian economy by jeopardizing its domestic industry, interest of farmers and MSMEs. It was the better decision of India not to join the agreement now and wait for a while to focus on the growth of Indian Industries and the policy of Make In India to expand the growth of Indian products in the market. 

Reference

 https://timesofindia.indiatimes.com/business/india-business/why-india-decided-not-to-join-rcep-agreement-all-you-need-to-know/articleshow/71898544.cms?utm_campaign=andapp&utm_medium=referral&utm_source=native_share_tray

 https://timesofindia.indiatimes.com/business/india-business/rcep-india-open-for-business-but-in-its-terms/articleshow/71913991.cms?utm_campaign=andapp&utm_medium=referral&utm_source=native_share_tray

https://www.drishtiias.com/daily-updates/daily-news-editorials/india-exits-rcep 

https://timesofindia.indiatimes.com/blogs/toi-editorials/rcep-indias-withdrawal-provides-space-to-strengthen-competitiveness/ 

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

The post RCEP vis a vis India: An agreement which is boon or a ban?  appeared first on iPleaders.

This article has been written by Lakshmi. V. Pillai of 5th year pursuing B.A. LL.B from GLS Law College, Ahmedabad. The article covers the basic concepts of Merger Regulation under EU law. This article describes the essentials which need to be looked after by the firms while doing the merging, acquisition of control or taking control of JV in the EU market. The Article also covers the concept of referrals which can be made by the parties or by the Member states, under the EU Competition Law.

Introduction

The competition law regulates the merger and acquisitions. As Merger and Acquisitions (“M&A”) leads to the concentration of economic power in a smaller number of parties which can lead to distortion of competition in the market there is a need to regulate it. European Union merger law is a part of the European Union laws. The EU merger law is charged with regulating mergers between two or more entities.

One of the major reasons why businesses are motivated to do a merger is the reduction of transaction costs in negotiating bilateral contracts. And another advantage is, increase in the economy of scale of the party and product in the market. Further, with the merger, the firm acquires market share which directly impacts the market power of the company. And this increase in market power will strengthen the negotiating position of the firm. When we look from the perspective of the firm it is absolutely a good marketing strategy, though this is bad for competitors and downstream entities like for consumers and distributors. Such mergers can result in the making of monopoly and oligopoly structure in the market. Both these structures can weaken the competition in the market, as a single or a small group of people get the power to regulate the market. Therefore, to stop the small number of parties from regulating the market, the EU checks on the mergers which comes under the ambit of the Merger Regulations of the EU law.

Overview of EU Merger Control

Brief description of the EU system of merger control

When there is a merger between two or more corporate entities it is regulated by the Competition law. While firms propose to merger they have to comply with the laws and regulations. Only with the prior permission of the European Commission, the firm can go ahead with the merger. The Commission has exclusive competence over the matters of the merger. The Commission only check those operations which have an impact on the community and that can be termed as ‘community dimension’. The Commission has jurisdiction over the matters even if they impede or not impede the competition. Therefore, while merging the rules and regulations need to be taken into consideration by the companies. If the merger fails to comply with the laws then it is blocked in the market. By this, we understand that a merger is a part of the Competition law and the provisions are provided so that the companies do not acquire the power on the free market and harm the interests of the society, the economy and the consumers as a whole. As the level of control may lead to a hike in prices, less innovation, and production which are anti-competitive in nature. However, if the merging promotes consumer welfare then under such circumstances mergers do not come under the purview of the regulations. 

Under the EU law there are two main legislative texts:

1. EC Merger Regulation;
2. The Implementing Regulation.

The EC Merger Regulation contains the main rules for assessment of concentration, whereas the Implementing Regulation contains about concerns regarding procedural issues which includes- notification, deadlines, right to be heard etc. There are certain forms which are needed to be submitted while doing mergers. Those forms are:

1. Form CO- the official form for standard merger notification;
2. Short Form CO- for simplified merger notifications;
3. Form RS- referral requests.

Institutional arrangements

The Directorate-General for Competition (DG COMP) of European Commission (“EC”) administers the subject of merger control at the EU level. It is considered as one of the most experienced antitrust enforcers in the world. Margrethe Vestager is the current head of the DG COMP, he will be serving this position for five years which will end by 2019. The fines ordered by the DG COMP between 2010-2012 in total was €5.4 bn. The matters covered by DG COMP are as follows:

1. An antitrust agreement under Article 101 and 102 of the Treaty on the Functioning of the European Union (‘TFEU’);
2. Mergers;
3. Article 106 of the TFEU- Liberalisation;
4. Article 107-109 of the TFEU- State Aid;
5. International cooperation. 

The implementing regulation and the Commission’s Notices and Guidelines

The implementing regulation

The implementing regulation has forms which are to be used and submitted while merging is planned by the firm.

Form RS: This is the form used by the parties requesting for the pre-notification referral procedures.

When firms want to do formal notifications, then they have to use the following forms:

Form CO: This form generally has the information which must be notified by the parties while submitting a full-form notification.

This form includes extensive information about the parties. The information shall include:

1. The transaction and the relevant markets.
2. Contact details for customers, trade associations, competitors and potential suppliers.

The mentioned details will be used by the commission to consult while doing investigations. 

Short Form CO: This form is used when it is qualified for the simplified procedure of the Commission and notified concentration are unlikely to raise competition concerns. Under this, only a short- form clearance decision will be issued by the Commission.

The simplified procedure is available for the following mergers:

1. The assets and turnover are below €100 million in EEA (European Economic Area) in the proposed Joint Venture (JV).
2. When the concentrations between parties not having horizontal market overlap or vertical relationships.
3. When the concentration has a horizontal market overlap but it is less than 20% and in the vertical relationships, it is less than 30%.
4. In the concentrations when there is a move made from joint to sole control of a pre-existing JV.

Commissions Notices and Guidelines

The commission from time to time issues various notices and guidelines to explain the application of the Merger Regulation regime. 

Till date the Commission has issued notices and guidelines on the following subjects:

1. The consolidated rules and limit of the jurisdiction of the Commission;
2. Guidelines on explaining the simplified procedure;
3. Guidelines on the referral of cases;
4. Notices on topics like non- horizontal, horizontal, relevant market, remedies and ancillary restraints in which the subject is explained and guidelines are provided.
5. Guidelines on the role of the hearing officer;
6. Guidelines on access to the file;
7. Guidelines on the abandonment of concentration. 

Best Practice Guidelines

The documents published by the Commission which gives out the procedure which needs to be followed by the firm. Hitherto, the Commission has given following best practice guidelines for the mergers regulated by the EU competition law:

1. Guidance on the preparation of public versions of Commission decisions adopted under the Merger Regulation; 

This Guidance outlines:

1. what undertakings can claim for redaction as business secrets and confidential information and what is not usually considered to be confidential information;
2. how confidentiality for business secrets and other confidential information can be claimed;
3. what the Commission usually redacts on its own initiative in the public version of a decision, and
4. the procedure that should be followed to settle confidentiality claims in the context of the publication of the Commission decision and the related publications. 

2. The conduct of EC on merger control proceedings;

3. The Commission’s Model Texts for Divestiture Commitments and the Trustee Mandate under the EC Merger Regulation. This includes the standard models which are based upon the experience gained by the Commission till date in the cases of merger and remedies available thereto.

Access to the Commission’s decisions

After Phase I and Phase II, the Commission issues their press release stating their decisions. The Commission also sometimes publish the non-confidential versions of its decisions at the end of Phase I and II. However, before such publications made by the Commission, the parties are given the opportunity to identify any business secrets which shall be requested to be excluded from the publication. In the ‘Guidance on the preparation of public versions of Commission decisions under the Merger Regulation’, the Commission outlines the subjects which can be considered under the confidential information.

Jurisdiction

The merger regulation of the EU competition law lays down the conditions under which the National Competition Authorities (NCAs) or the EC can have jurisdiction over ‘concentration’ mentioned in the EU competition law.

However, it should be understood that if the concentration come under the ambit of an EU dimension then only the EC COMP have the right to investigate such matters. Whereas, those which are not within the EU dimension will be investigated by the NCA as per their domestic merger control rules. There is an exception to the above general rule, the firm can relocate the jurisdiction between the Commission and the NCAs. There are two ways to it:

1. Pre-notification– Under Article 4 of the EC Merger Regulation, the firm can send a pre-notification referral to the EC using Form RS. The EC will forward the Form to all NCA’s and thereafter all NCA’s will review the Form. If there is any objection by any of the NCA then the matter will be dealt with by the respective NCA.
2. Post-notification– Under Article 9 of the EC Merger Regulation, the Member State NCA can ask the EC to refer the merger under its jurisdiction if the merger is affecting or threatens the competition in the member state market, to take appropriate steps to protect public security or to protect the prudential rules for financial services.

Article 3: Meaning of a concentration

Under Article 3 of the EC Merger Regulation, the definition of the concentration is given. By the general meaning of concentration, we understand that concentration means control by the undertaking because of the change in the shares during merging. 

The meaning of the “Concentration” includes:

1. A change of control which lasts for a long time:

• This change occurs when there is a merger of two or more previously independent undertakings or part of it;
• When the acquisition is of direct or indirect control in whole or in parts of one or more other undertakings;
• The establishment of a Joint Venture where this involves the acquisition of joint control of a full-function JV undertaking. 

2. This also includes control over the rights and contracts or any other means through which the party will get the decisive influence on an undertaking.

However, there are some exceptions to the definition of the “concentration” under Article 3 (5) of the EU Merger Regulation which are:

• Institutions like credit institutions or other financial institutions;
• The office-holder who acquires control as per the requirement of the law.

Article 3(1)(a): mergers 

The term ‘merger’ basically means when the concentration of the undertaking is deemed to arise a change of control for a lasting basis on two or more previously independent undertakings or parts of undertakings.

Article 3(1)(b): acquisition of control

The term ‘acquisition of control’ means a change in the control by controlling at least

• one or;
• one or more undertakings,

through the purchase of securities or assets, through the way of contract or by any other means, either by direct or indirect control of the whole or parts of one or more undertakings.

The concept of control 

Control basically constituted by contracts, rights or any other means either in combination or in separate, which confers the possibility of exercising a decisive influence on an undertaking. There are two types of control: 

• Sole control 

When a transaction gives the possibility of exercising decisive influence of control to one single undertaking over the part or whole of another undertaking, then such control can be termed as ‘sole control’.

• Joint control 

The term ‘joint control’ is used when a transaction gives the possibility of exercising decisive influence of control to two or more undertakings over the part or whole of another undertaking.

Changes in the quality of control

While there is sole or joint control, in two ways we can have changes in the quality of control:

1. When there is a change in the basic control system, i.e. change in the joint or sole controlling system of the concentration.
2. If there is an increase in the number of shareholders or if there is a change in the identity of controlling shareholders, then that can result in changes in the quality of the control. And this scenario can occur before or after the joint transaction.

However, if there is negative or positive sole control change occurs then that will not be considered under this concept. As the mentioned change would not affect the incentives of a negatively controlling shareholder nor the nature of the control structure. Thereby, we understand that mere changes in the level of shareholding by the same shareholders without changing the power or control structure of the control of the company on the undertaking would not be notifiable or considered change in the concentration.

The changes in the quality of control can occur under two circumstances:

1. Firstly, when there is new entry one or more entrants in the panel of controlling shareholders not considering the aspect that whether they are replacing the existing one or not;
2. Secondly, when there is a reduction in the number of controlling shareholders.

Joint ventures- the concept of full-functioning

To consider the JV under the EU Merger Regulation the following conditions are to be there which gives rise to such concentration:

1. Operational autonomy

When a JV is made, it needs to be distinct from its parent company. A JV which is depended on its parent company for its raw material or production will not be considered as autonomous. Therefore, the JV must have sufficient resources, staff, assets (intangible or tangible) and facilities which gives it autonomous power to run the venture.

2. Activities beyond one specific function for the parents

One of the essential features for the JV to be considered as a full functioning entity is that they should be doing their functions independent of the activities performed by the parent company.

For instance, if there is a JV for the management of real estate, and the JV is made just for holding the real estate of the parent company then such JV will not be considered as autonomous. However, if the JV is actively participating in the management of the real estate and have a presence in the market, this indicates the full functionality of the JV.

3. Sale/purchase relations between the joint venture and its parents

When the undertaking is autonomous it shall work independently. However, for the initial years (not exceeding three years- this time limit can vary as per the marketing conditions) when it depends on the parent company for sales or purchase then that will not normally affect its full functioning character. However, a strong marketing power or the presence of the parent company in the downstream or upstream market is a factor which is to be considered while evaluating the full-functioning character of the JV in the market.

Under this point, we can consider two aspects, sales and trade markets. To consider the JV as a full functioning company, the sales of the company shall not only to be with the parent company. The same condition will be applicable in the trade market, wherein the distribution of the products by the JV is only for the parent company. In both these cases what is essentially to be considered is the operation of the JV is not only with the parent company, but it is working independently in the market with others as well. If this condition is established then the autonomy of the JV can be considered.

5. Operation on a lasting basis

Another essential feature to be considered while considering the concentration of the JV is the operation of the company in the market is for a long-lasting basis or not. This can be determined by the clauses in the agreement regarding the dissolution of the JV. 

The duration for the JV can also be determined by the purpose of the company for which it has been established. If the JV is made specifically for the construction of railway tracks and thereafter the JV if not involved in the maintenance of the railway track then the JV will not be working on a long-lasting basis.

6. Change in the activities of the joint venture 

The changes can be as following:

• A substantial amount of additional assets, contracts, know-how or rights being transferred to the JV by the parent company; 
• A change in the organisational structure of a JV which make it qualify under the full- functionality criteria;
• When the activity of a JV changed efficiently in a way that earlier it was supplying or purchasing to the parent company only, now it started taking significant activities apart from the service provided to the parent company. 

Exceptions

As per Article 3 (5) of the EU Merger Regulation, there are three exceptional situations where the acquisition will not be considered under the concentration of the Merger Regulation.

1. When the undertaking only does normal activities which include the transactions and dealings of the securities and the securities which are held on only a temporary basis.
2. When there is no change of control and if the control is acquired by an officeholder according to the EU law.
3. When a financial holding company acquires the control under such circumstances the concentration will not be considered under the Merger Regulation. 

However, it is important to understand that the exceptions mentioned under Article 3 (5) of the EU Merger law are applicable in limited circumstances, like: 

• When there is the acquisition of control by way of purchase and not only through the acquisition of assets.
• When the transaction comes under the ambit of the ‘concentration’ naturally then only exception mentioned under Article 3 (5) (a) and (c) is applicable. 
• And when the transaction is not just a part of a single or broader transaction. 

The typical investment fund structures are also exempted from the ambit of Article 3 (5) because their rights are not limited to voting rights, as they also adopt decisions to appoint the members of the supervisory bodies and management of the undertakings or even restructure those undertakings as per the requirement. 

Further, one more situation to be discussed under the exception is the companies which are acquired while they are under the insolvency proceedings. It is to be noted that if a JV is made out and the operation meets the criteria as outlined in the law then it will be normally considered under the term of the ‘concentration’. However, if the restructuring programme is like a typical fund structure then the exception set out in Article 3(5)(a) will not be normally applicable. 

Being an insolvent can be considered as an exception when a merger scheme is proposed. Because it is already drowning into the water, saving it would not be competitive. The case of Shell’s Harburg refinery by Nynas in Nynas/Shell/Harburg Refinery was similar to this. The acquisition was allowed as otherwise, it will result in the closure of the refinery.

Article 1: Concentrations having a Union dimension

Thresholds

The threshold under the EU Merger law is to be considered purely on a quantitative basis. While checking the threshold the impact of the operation or the market position of the parties to the concentration is not considered. The object is to determine whether the transaction has a community dimension or not. And if there is a community dimension then the merging shall be notified to the respective authorities. 

There are two sets of thresholds provided under Article 1 of the EU Merger law which is applicable to consider a concentration under the ‘Community dimension’. They are provided under Article 1(2) and Article 1(3) of the EU Merger Law. 

Article 1(2)

Under this, there are three different criteria applicable:

• The worldwide turnover will be considered as an overall dimension of the undertaking concerned;
• The community turnover means the minimum level of threshold of the activities which is conducted in the community;
• By the two-thirds rule means the exclusion of the purely domestic transactions from community jurisdiction.

Article 1(3)

As per Article1(2) when the concentration is not covered under the community dimension then this Article shall be applicable. The threshold in Article 1(3) is determined when the concentration is affecting three member states of the EU. Article 1(3) shall deem to be applicable even when there is a lower turnover threshold at both community-wide and worldwide but there is a minimum level of activities which is affecting at least three member states.

As per Article 1(2) of the Merger Regulations, a concentration has a Community dimension if the following conditions are followed:

• When the combined aggregate worldwide turnover of all the undertakings concerned is more than EUR 5 000 million; and
• When the aggregate Community-wide turnover of each of at least two of the undertakings concerned is more than EUR 250 million.

Provided that each of the undertakings concerned achieves more than two-thirds of its aggregate Community-wide turnover within one and the same Member State

The term ‘turnover’ includes ordinary activities and after turnover taxes of all the undertakings concerned.

The ‘undertaking concerned’, in the case of acquisition of parts of undertakings only the turnover relating to the parts which are the subject of the concentration, shall be taken into account with regard to the seller(s).

In case, these thresholds are not met a concentration has nevertheless Community dimension, if

• the combined aggregate worldwide turnover of all the undertakings concerned is more than EUR 2 500 million, and
• in each of at least three Member States, the combined aggregate turnover of all the undertakings concerned is more than EUR 100 million, and
• in each of at least three Member States included for the purpose of the second point above, the aggregate turnover of each of at least two of the undertakings concerned is more than EUR 25 million, and
• the aggregate Community-wide turnover of each of at least two of the undertakings concerned is more than EUR 100 million, unless each of the undertakings concerned achieves more than two-thirds of its aggregate Community-wide turnover within one and the same Member State.

Notion of undertaking concerned

To clearly understand the subject matter first we need to understand the terminologies. While understanding this concept the learner shall not misinterpret the term ‘undertaking concerned’ with ‘the notion of the undertaking’. The ‘undertaking concerned’ herein to be referred from the point of view of Article 1 and 5. This terminology is basically referred to the various undertakings which may be involved in the procedure of merging. And the word ‘notion of the undertaking concerned’ refers to the notification which needs to be sent to the notifying parties, third parties, the parties which can be subject to fines or penalty payments and other involved parties as per Chapter IV of the Implementing Regulation.

Under the Merger Regulation, a notification is required to be sent when the undertakings concerned are participating in a ‘concentration’ as per Article 3(1). Once the jurisdiction is determined then under Article 5 the threshold is calculated. However, Article 5(4) gives out the detailed criteria to identify which undertaking can be concerned.

The Merger Regulation lays out the circumstances under which the notion of the undertaking to be made in each criteria:

1. Merger- The notion in the merger to be sent for each of the undertakings concerned in the transaction.
2. Acquisition of control- In the case of acquisition of control the undertakings which need to be notified are the ‘undertaking concerned’. In the matter of acquisition, there can be one or more undertakings which are participating as a whole or part in the transaction. Under this head, we can have different transactions.

Relevant date for establishing jurisdiction

Earlier there was a time period in which the relevant date was triggered. As per Article 4(1) the following time period were the relevant dates in which the undertaking used to comply to inform the authority regarding their transaction:

1. The announcement of a public bid; or
2. The acquisition of a controlling interest; or
3.  The conclusion of a final agreement.

However, in the amended law, there are no such obligations on parties to notify within a certain time period. But at the same time, the parties can not implement the planned concentration before informing the respective authority/ies. In Article 4(1)(2), it says that a notification regarding the transaction shall be made to the authority with good faith intention while concluding the agreement. And Article 4(1)(1) says that when it is concluded that the concentration is coming under the ambit of the Merger Law, then following the conclusion of the agreement, during the announcement of a public bid or the acquisition of a controlling interest, the authority shall be notified. From here we can conclude that even though no as such specific dates are mentioned though if the undertaking does not occur to notify on time then the dates of the event mentioned will be decisive.

Therefore, we conclude that the relevant date for the undertaking for establishing jurisdiction over a concentration are:

1. The announcement of a public bid;
2. The date on which the conclusion of a binding legal document;
3. The date of the first notification;
4. After the manifestation of good faith to do so.

whichever is the earlier date, the undertaking on that date shall inform the authority. 

Turnover

In Article 5 of the Merger Regulation the concept of “turnover” is used. The term turnover comes under the heading of the sale in the accounts of the company.

In the case of products- the turnover can be easily understood by identifying each commercial act regarding the transfer of ownership.

In the case of services- the turnover is understood by considering the total amount of sales.

However, in the case of advertising and package holidays, the application of services becomes a little complicated as there are intermediaries. But in the end for all services, the point is about how much service reached to the customers and the ultimate payment by the customer for the full service.

As per Article 5(1), the amount of the turnover shall include the turnover which is based on the ‘ordinary activities’ of the undertaking. The ‘ordinary activities’ generally excludes those items which come under the head of ‘extraordinary income’ or ‘financial income’.

The aid received by the undertaking is also included under the head of the turnover. The aid herein referred to as is the aid which is granted by public bodies which are directly linked to the sale of products. Therefore aid can be considered as the income received by undertaking due to the sale of products or services including the price paid by the consumer. 

The term ‘Net’ turnover, basically means the turnover which can be considered after the deduction of all components as per the Merger Regulation. The main aim of determining the ‘turnover’ is to understand the turnover is such a way to understand the economic strength of the undertaking. During the calculation of the ‘Net turnover’ rebates and taxes are also deducted. And the ‘internal’ turnover also is not considered under the ‘net’ turnover which comes under the sales which were made between the concerned undertaking with the group to which concerned undertaking belongs.

Therefore, we understand that the ‘amount’ which are taken into consideration under the EU Merger Regulation is only the sales which are made between the group of undertaking with third parties on one hand and with each other on the other.

In addition to this under Article 5(5)(a) of the Merger Regulation, the double-counting of the turnover should be avoided. As per Article 5(4)(b) ‘Double counting’ means the turnover which results from the sale of products or the provision of services between the joint venture and each of the undertakings concerned. 

Turnover calculation and financial accounts: The general rules are that the Commission always relies upon accurate and reliable figures. If any adjustments are made in the figures in the accounts then that needs to be as per the regulations. If the undertaking belongs to a non-member country, then under such circumstances the Commission can convert the accounts as per the standards of the Community regulations if seems it to be necessary. 

So as per Article 5(4) of the Merger Regulation, the following turnovers shall be added together:

1. The undertaking concerned;
2. The undertakings to which the concerned undertaking is connected directly or indirectly by way of- 

• owing more than half of the business assets or capital; or 
• having half of the voting rights; or 
• having the right to manage the affairs of the undertaking; or 
• having the power to appoint more than half the members of the supervisory board. 

1. Those undertakings which are directly or indirectly connected to the concerned undertakings have the powers like mentioned in (b);
2. Those undertakings which have powers like mentioned in (a) to (d) on the matters as mentioned in (b).

It is to be noted that there are many ways through which a relationship can be made and rights can be exercised, the Commission is only concerned with those rights which are de jure in nature.

Further, it is important to understand that there is a difference between Article 3 (2) and Article 5 (4). Article 3(2) defines the term ‘control’ in the Merger Regulation. Control means the possibility of the undertaking to have the power to exercise a decisive influence on an undertaking. That means it is not necessary to prove that the decisive influence will take place or not. But if the influence is taking place then that will lead to an effective change in the undertaking. Article 5 (4) lays out the specific criteria of the undertakings whose turnover can be considered under the undertaking concerned. In the case of Article 3 (2), the economic dependence of the undertaking is also considered even if it just leads to de facto control. However, Article 5(4) would not arise on a de facto basis when due to strong common interests between different minority shareholders of the joint venture company on the basis of shareholders’ attendance. The difference is reflected by the fact that the term used in 5(4) is the word ‘right to manage’ rather than ‘power’. 

The allocation of turnover can be further differentiated into three subheadings on the basis of difference of the way through which the turnover has been constituted:

1. Allocation of turnover of the undertakings identified;
2. Allocation of turnover in case of investment funds;
3. Allocation of turnover for state-owned undertakings.

Geographic allocation of turnover

There is no discrimination between the ‘services provided’ and ‘products sold’ in the merger regulation for the geographic allocation of the turnover. The basic principle is the turnover of that place is to be calculated where there is an alternative for the product or the service. And the real competition occurs where the actual delivery of the product and service happens. 

In the case of sales of goods or sale of moveable mobile goods, the delivery place is considered important for the allocation of the turnover. However, in case if there is a parent company which have many subsidiaries, the allocation of turnover is calculated at the place where the delivery of the goods are made. The main reason for that is the competition of the goods with the other subsidiary goods are considered for the allocation.

In the case of services, there are further three categories, the categories will be explained here by examples:

Service provider travels– a non-European company providing plane repairing services to a European country. 

Customer travels- European customer books a car directly in the USA (service is provided outside the community).

In both of the above circumstances, the place where the service was provided will be considered for the allocation of turnover.

Both service and customer not travelling– supply of software, both the parties in this example can be outside or inside the community, the turnover allocated to the place of the customer will be taken into consideration.

Conversion of turnover into Euros

When the turnover figures are converted into Euro, great care should be taken while the exchange rate is used. The first step is to convert the annual turnover of a company to the average rate for the twelve months concerned. The average rate can be obtained from the DG Competition’s website. And while taking the audited annual turnover, the figures should be converted as such that it shall not be broken into quarterly or monthly figures which then need to be converted individually. The same procedure applies even when sales are in a range of currencies.

The total turnover given in the consolidated audited accounts and in that company’s reporting currency is converted into euros at the yearly average rate. Local currency sales should not be converted directly into euros since these figures are not from the consolidated audited accounts of the company.

Provisions for credit and other financial institutions and insurance undertakings

Due to the specific nature of the sector, Article 5(3) contains specific rules for the calculation of turnover of credit and other financial institutions as well as insurance undertakings.

‘Credit institution’ means an undertaking whose business is to receive deposits or other repayable funds from the public and to grant credits for its own account.

‘Financial institution’ means an undertaking other than a credit institution, the principal activity of which is to acquire holdings or to carry on one or more of the activities listed in points 2 to 12 of Annex I.

Article 5(3) of the Merger Regulation sets out the methods of calculation of turnover for credit and other financial institutions and for insurance undertakings.

Article 21: one-stop merger control

In the EU system of Merger Regulation, the control of concentrations within EEA (European Economic Area) is based on the ‘one-stop shop’ principle. This gives the Commission the exclusive jurisdiction to review the matters which comes under the definition of Article 3 of the EU Merger Regulation on ‘concentration’ and met the thresholds mentioned in Article 1(2) or (3) of the EU Merger Regulation. When the transaction comes under the cover of one-stop shop principle they are precluded from applying under their national competition laws to such concentrations with an EU dimension as per the virtue of Article 21(3). If the thresholds are below than the requirements, then the undertaking has to apply to the Member States. The Commission in such cases does not have jurisdiction to deal with such transactions.

The benefits of one-stop merger control

Before the principle of ‘one-stop shop’, the industries had to take permission from the Commission and as well as the Member states. And secondly, the Commission had the power to intervene only after the merger had taken place. 

So after the amendment in the Merger Regulation, this principle came into practice and the above problems were resolved. Therefore, it is beneficial to the Competition authorities and businesses alike:

Benefits to the Competition authority:

• Increases administrative efficiency;
• Avoiding duplication of the work; and
• Avoids the fragmentation of the enforcement effort;
• Reduces the potentially incoherent treatment by multiple authorities. 

Benefits to the Business people:

• Reduce the cost and burden of multiple filing;
• Eliminate the risk of conflicting decisions by different competition authorities under diverse legal regimes.

The benefits of more flexible jurisdictional rules

In this case, even though Commission takes the stand first, however, the Member State authority can ask its interference if there is a competition problem which takes place in the distinct market within its territory. Under such circumstances, the Commission may take case itself or transfer the matter to the Member state. However, only one set of authority will be dealing with the matter. 

Article 4(4) and Article 9: referral of concentrations having a Union dimensions to the competent authorities of the Member states

Before starting with the topic of pre and post referrals we need to understand when referrals are used. The referrals are made when there is a compelling reason for departing from ‘original jurisdiction’.

There are two types of referrals: 

The pre-notification referrals under Article 4(4) and Article 4(5) are only made available to the undertakings. Whereas, the post-notification referrals are made by the member state under Article 9 and Article 22.

It is to be noted that making pre-filing referrals the undertakings have to comply with tight deadlines. While filing pre referrals the undertaking shall have a straightforward objective to establish and the scope of the geographic market must be clear. 

And one more thing to be noted is that post-notification referral shall not be made or to be avoided to the greatest extent possible.

Pre-notification referrals: Article 4(4)

The pre-notification referral is made by the reasoned submission of the parties regarding the concentration. Before making the pre-notification referrals two things need to be considered: 

• The merging fulfils the legal requirements which are set out in the Merger Regulation.
• The pre-notification referral shall be abided by the guiding principles outlined in the Merger Regulation.

As per Article 4 (4) there are certain legal requirements which are to be followed:

1. The concentration must be significantly affecting the competition in the market or markets;
2. The market herein referred should be in any of the Member State;
3. The market shall have characteristics of a distinct market.

While making such referrals the requesting parties shall indicate that there can be a potential impact on competition in a distinct market. Even if it is preliminary, then too without prejudice to the outcome of the investigation of the commission the undertaking has to demonstrate the potential effect. The requesting parties also need to show the geographic market where the competition is occurring.

Other factors to be considered: 

• To check the authority to whom the referral made is a proper authority or not.
• This referral can also be made when the parties are having a competition effect on different markets but all the time coordination is required and the commission can individually deal with such matters.

Post-notification referrals: Article 9

A Member State has two options under Article 9 to request referral of a case following its notification to the Commission.

Article 9(2)(a)

• The concentration must be significantly affecting the market of the Member State;
• The market referred by the Member State shall be within the jurisdiction of the Member State;
• The market shall consist of all characteristics of a distinct market.

Therefore, when the Member state makes the referral it can be on prima-facie evidence, but that shall not be prejudiced by the outcome of the investigation. And the Member State while also needs to prove that the concentration to which referral is made shall be more than national or narrower than national in scope. 

Article 9(2)(b)

Under Article 9 (2) (b), the following requirements are to be met:

• The concentration is affecting the market;
• The market referred by the Member State shall be within the jurisdiction of the Member State;
• The market shall consist of all characteristics of a distinct market;
• The market must not constitute a substantial part of the common market. 

The most important thing for the Merger state here to prove is the market to which the competition is affecting is not a substantial part of the common market. Such practices are generally applicable to the markets which are limited to a narrow geographic scope, within a Member State.

Article 4(4) and Article 9 in practice

Article 4(4) is made by the undertaking when the concentration has a community dimension but may significantly affect competition in a distinct market within a Member State.

And the undertaking can request this kind of referral on Form RS. Then the request is transmitted to all other Member States by the Commission without delay.

However, the remainders of both the Articles differ:

Under Article 4(4) timeline is as follows- 

• The Member States have 15 days to submit and express their agreement or disagreement after getting a referral from the party to the Commission. 
• If the Member State keep silence then that deem to be considered as agreement.
• If no Member States disagree, then the Commission has 10 days to accept or reject the referral. Silence on the part of the Commission will be considered as assent. And then after the assent from both the authorities the Member State can apply national law to the referred part of the case. 

The Article 9 is applicable when a Member State may request the Commission refer to it a concentration within Community dimension, or a part thereof, which has been notified to the Commission and which threatens to significantly affect competition within a distinct market within that Member State (Article 9(2)(a)), or which affects such a distinct market not constituting a substantial part of the common market (Article 9(2)(b)). 

Under Article 9 timeline is as follows-

• The Member State within 15 working days from the reception of the copy of Form CO from the undertaking shall request to the Commission regarding the particular case. 
• The Commission first will look into the matter and check whether the required legal criteria are fulfilled or not.
• After checking the legal essentials the Commission may then decide to refer the case, or a part thereof, exercising its administrative discretion.
• In the case of a referral request made pursuant to Article 9(2)(b), the Commission must (i.e. has no discretion) make the referral if the legal criteria are met. The decision must be taken within 35 working days from notification or, where the Commission has initiated proceedings, within 65 working days.
• If the referral is made, the Member State concerned applies its own national competition law, subject only to Article 9(6) and (8).

Article 4(5) and Article 22: referral of concentrations not having a Union dimension by Member states to the Commission

Pre-notification referrals: Article 4(5)

There are two basic requirement:

1. The transaction mentioned for reference shall be a concentration as per the meaning of Article 3 of the Merger Regulation.
2. At least by three Member states, the concentration mentioned shall be applicable and capable of being reviewed.

 Other matters to be considered:

• To check whether Commission is an appropriate authority for the investigation.
• To check whether the merging covers more than one member state and giving an economic impact of the concentration to more than one member state. 
• To check whether the case comes under cross-border in nature.

Post-notification referrals: Article 22

Two legal requirements which are required under Article 22 are as follows:

• There shall be effect on trade between the Member States because of the Concentration; and
• The concentration will significantly affect the competition in the territory of the Member State or the state which is making the referral.

Other factors to be considered:

• The Member States feels that the Commission is more effective to investigate on this matter.
• The matter shall have serious competition concern and the market shall be wider than the national market of the Member State.
• Even if the market is narrower than the national market if there is a substantial economic impact on the market because of this particular concentration then the Member State has right to concern such matters to the Commission.

Article 4(5) and Article 22 in practice

Article 4(5) (that the concentration does not have a Community dimension but is capable of being reviewed under the national competition laws of at least three Member States). And the undertaking can request this kind of referral on Form RS. Then the request is transmitted to all other Member States by the Commission without delay.

Under Article 4(5) timeline-

• The Member States have 15 days from the date they receive the request, for the submission to express agreement or disagreement regarding the request.

• If any Member State disagrees then the Commission will examine the matter. If there is no expressed disagreement, then that means the case has acquired the dimension of the Community dimension.
• And after that, the Commission has exclusive jurisdiction over it. In such case, the parties have to notify the Commission under the Form CO.
• On the other hand, if one or more competent Member States have expressed their disagreement, the Commission informs all Member States and the undertakings concerned without delay of any such expression of disagreement and the referral process ends. It is then for the parties to comply with any applicable national notification rules.

Under Article 22, a Member State may request that the Commission examine a concentration which has no Community dimension but which affects trade between the Member States and threatens to significantly affect competition within its territory. 

The timeline for Article 22 is as follows:

• The request must be made within 15 working days from the date of national notification or, where no notification is required, the date when the concentration was ‘made known’ to the Member State concerned. 
• The Commission transmits the request to all Member States. Any other Member States can decide to join the request within a period of 15 working days from the date they receive a copy of the initial request.
• All national time limits relating to the concentration are suspended a decision has been taken as to where it will be examined; a Member State can restart the national time limits before the expiry of the 15 working day period by informing the Commission and the merging parties that it does not wish to join the request. 
• At the latest 10 working days following the expiry of the 15 working day period, the Commission must decide whether to accept the case from the requesting Member State(s). 
• If the Commission accepts jurisdiction, national proceedings in the referring Member State(s) are terminated and the Commission examines the case pursuant to Article 22(4) of the Merger Regulation on behalf of the requesting State(s). The non-requesting States can continue to apply national law.

Article 21(4): legitimate interest clause

Article 21 (4) states that the Member State can take appropriate steps if required to protect the legitimate interests other than the points or concerns which are mentioned in the Regulation. The concerns which are raised by the Member State shall be compatible with the general principles and other provisions of Community law.

Legitimate interests provided under the Merger Regulation is a non-exhaustive list. They are as follows:

• Public security;
• Prudential rules; and
• Plurality of the media.

As per Article 21 (4), the Member State can initiate the request if it feels that the case is covered under the legitimate interests as provided in the Merger Regulation and thereby, the same can be communicated to the Commission. Within 25 days the Commission must decide on the matter. When the above essentials are fulfilled then the Commission has the sole jurisdiction on the matter and the Member State can also do parallel investigation on the matter. However, it is to be noted that Article 21 (4) is rarely used by the Member States. 

Conclusion

In this article, we understand various basic concepts of the EU Merger Regulation. It is so important for the undertakings to properly understand the law and concepts when they take part in the transactions of merging with the firms who are in the territory of the European Union or otherwise whose market is covered in the EU.

References

• https://ec.europa.eu/competition/mergers/legislation/legislation.html
• https://www.mbda.gov/news/blog/2012/04/5-types-company-mergers
• https://ec.europa.eu/competition/mergers/legislation/guidance_on_preparation_of_public_versions_mergers_26052015.pdf
• https://ec.europa.eu/competition/mergers/legislation/merger_compilation.pdf
• https://ec.europa.eu/commission/presscorner/detail/en/IP_90_156
• https://www.slaughterandmay.com/media/1501891/eu-competition-newsletter-05-nov-11-nov-2010.pdf
• https://ec.europa.eu/competition/mergers/legislation/merger_law_2013_web.pdf

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

The post Merger in EU Competition Law: Overview and Analysis appeared first on iPleaders.

This article is written by Madhuri Pilania, a first-year student pursuing BBA.LLB. from Symbiosis Law School, Noida. This is an exhaustive article dealing with the Shares, Membership and Share Capital under the Companies Act, 2013.

Introduction

A shareholder is a person who has a stake in the company till the amount the person has invested. The income of a shareholder depends upon how a company earns. They issue shares as a means to raise money. The Parliament approved the long-awaited regulation of legislation governing the companies on 9 August 2013.

The new law was aimed at easing the process of doing business in India and improving corporate governance by making companies more accountable. Under the Companies Act, 2013, the registered public and private companies need to file the following with the Registrar of Companies to commence the business – 

• A declaration by the director in the prescribed form stating that the subscribers or promoters have to pay the value of shares agreed to the memorandum.
• Confirmation needs to be filed that the company has filed a verification of its registered office with the Registrar of companies (ROC).

What is a share? Who is a shareholder and what are his/her rights?  How does membership on a company works and share capital under Company Law are some of the common questions everybody wonders about? So in this article, all the answers to such questions can be found.

Click Here

Shares

Shares can be described as a financial instrument issued by the company to raise funds from the general public. A share represents fractional ownership in a body corporate. Thus, a share is the smallest unit of the company’s overall net worth.

First issue in Demat Form

Section 29 of the Act related to public offer of securities to be in the Demat form. Every company which makes a public offer and other groups of public companies should be prescribed in a certain manner. It should issue the securities only in dematerialised form by complying with the provisions of the Depositories Act, 1996.

Allotment of shares

Allotment of shares refers to the distribution of shares among the shareholders who applied for the shares or submitted written application for the allotment of shares. As soon as the company receives the applications for shares issued by means of a prospectus, it starts allotting shares on a preset basis.

Allotment of shares cannot be made until the ‘Minimum Subscription‘ as given in the prospectus had been subscribed or applied for. Minimum Subscription is the minimum amount which, in the estimate of the directors, is required to run the business. It has to be stated in the prospectus.

Minimum subscriptions 

The first requirement of a valid allotment is the minimum subscription. The amount of subscription needs to be stated in the prospectus after the shares have been offered to the public. An amount estimated by the directors which is enough to meet the needs like purchase price of any property, preliminary expenses and working capital (not to be less than 90 per cent of the whole issue offered to the public) is called minimum subscription. 

Shares cannot be allotted unless a specified amount has been subscribed and the application money should not be less than five per cent of the nominal value of the shares.

Application money 

As per the new provision under the Companies Act, 2013 it has been implemented regarding the Share Application Money, pending allotment. As per the Section 42(6) of the Companies Act, 2013, any allotment of securities should be made within sixty days from the receipt of the application money. In case the company is not able to allot the securities within the said period of sixty days then it will have to repay the application money within fifteen days. If they fail it will be required to be repaid with interest at the rate of 12% per cent per annum from the expiry of the sixtieth day. If the money has not been paid within the prescribed duration it would be considered as default and from the seventy-sixth day, the whole application money that is held by the company will be treated as a deposit. If there is any non-compliance of the provisions then it can result in a penalty of two crore rupees.

Statement in lieu of prospectus: Section 2(70)

According to the Companies Act, 2013, under Section 2(70), if a public company does not issue a prospectus on its formation, it should file a statement in lieu of prospectus with the registrar of the company.

A statement in lieu of prospectus is a public document prepared in the Second Schedule of the Company’s Law by the public company which does not issue a prospectus on its formation with the registrar before the allotment of debentures. It should also be duly signed by every person who has his name on the prospectus. It gives the same information as prospectus gives and it is signed by all the directors or maybe proposed directors.

A company will not be allowed to allot any shares or debentures in case the company has not filed a statement in lieu of prospectus with the registrar, it is then not allowed to allot any shares or debentures. A statement in lieu of the prospectus contains the following particulars – 

• Name of the company
• Statement of capital
• Description of the business
• Name, address and occupation the directors
• Estimated initial expenses
• Names and details of the property
• Material contracts
• Interest of directors
• Minimum subscription

Opening of subscription list

Subscription list means a subscription list in substantially the form set out in Schedule 7 of the Companies Act, 2013, (Subscription List) of the implementation plan pursuant to which each Lender, Electing Charter party Owner and Electing Bareboat Owner (or its Nominated Affiliate) will agree to subscribe for, and the Company will agree to issue to them, the relevant Lender Shares or Charterparty Shares (as applicable) in accordance with the Implementation Plan. This is also known as opening of subscription list.

Shares to be dealt in on stock exchange

A company who intends to offer shares or debentures to the public for subscription by the issue of a prospectus is required to make an application to one or more stock exchanges which are recognised for permission for the shares or debentures. The intended offer is to be dealt with in the stock exchange or maybe in each stock exchange.  

When a prospectus is issued it states that an application has been made for permission under sub-section (1) for shares or debentures that are offered to be dealt in one or more recognised stock exchanges. Such a prospectus is required to state the name of the stock exchange and any allotment made on an application in accordance with the prospectus. It will be void if permission has not been granted by the stock exchange before the expiry of ten weeks from the date of closing of the subscription lists.

Certificate of shares: Section 46

Under Section 46 if any company issues any share capital, the certificate of shares held by the company cannot be issued except in these cases – 

• On surrendering of the letter of allotment or coupons of value to the company, saved in cases of issues against letters of acceptance or of renunciation, or in cases of issue of bonus shares.

1. It is provided that if the letter of allotment is destroyed, the Board can inflict or impose such reasonable terms to seek supporting evidence. The payment of out-of-pocket expenses in seeking investigating evidence is incurred by the company.
2. Every certificate of share or shares shall be in Form No. SH.1 or as near as possible and will specify the names of the people in whose favour the certificate is issued, the shares to which it relates and the amount paid-up.

It must be noted that in case the company has a common seal it should be fixed in the presence of people required to sign the certificate.

In case of a One Person Company, it will be sufficient if the certificate is signed by a director or company secretary and the company secretary or any other person authorised by the Board for the purpose.

A Director or Company Secretary will be deemed to have signed the share certificate if his or her signature is printed signature any machine, equipment or other mechanical means such as engraving in metal or lithography but not of rubber stamp, provided that the director or company secretary will be personally responsible for allowing the attachment of his signature. Hence, the safe custody of any machine or any equipment is used for this purpose.

Estoppel as to Title

A share certificate binds the company in two ways once it is issued. It is a declaration by the company that any person whose name is in certificate and it is given to him, will be a shareholder. In other words, the company is estopped if he denies title to the shares. For example, a plaintiff applied for three hundred shares in a company. A clerk did not own shares but executed a transfer in favour of the plaintiff. The clerk did not produce his registered certificate and the company issued a new certificate to the plaintiff. It was held that the company was liable to the plaintiff for damages.

Estoppel as to Payment 

If the certificate states that full amount has been paid on each share, the company is estopped as against a bona fide purchaser of the shares alleging that they are not paid. 

In the case of Bloomenthal v. Ford, A lent money to a company on a security often shares that were issued to him as fully paid. But nothing was paid to them. In winding up of company, it was held that neither the liquidator nor the company can deny that shares were fully paid and hence A can not be placed on the list of contributors.  

Transfer of shares

According to the Companies Act, 2013 shares or debentures of a member of a company may be moveable property which is capable of being transferred in the prescribed manner in the articles of the company. The regulations of the company can impose restraints upon the right of transfer. The shareholder has the right to transfer his shares without the consent of anybody to the transferee in the absence of restrictions in the articles. Even if the transaction is bona fide in nature it is out disposal of the property without retaining any interest in the shares.  

Listed public companies and pre-emptive clauses

Preemptive rights are a contractual clause which gives a shareholder the right to buy additional shares in the future issue of the company’s common stock. It should done before the shares are available to the general public. Shareholders who have such a clause are generally termed as early investors or majority owners who want to maintain the size of their stake in the company if additional shares are offered.

A preemptive right is also called an “anti-dilution provision.” It provides the investor the option of maintaining a certain percentage of ownership of the company, as it grows.

It was held that a public company who is not listed to register a transfer of shares cannot refuse on the ground of pre-emptive rights of existing shareholders. The shareholders have to carry a warning on the face of the certificate if the nature of the shares of the company are pre-emptive. 

Listed public companies

As per Companies Act, 2013 “Listed Company” means a company that has its securities listed on any recognized stock exchange. As per the Act, only public companies are permitted to list their securities in the stock exchange. Private companies cannot avail this option under the Act.

Procedure of transfer

• The indenture (deed) of share transfer in form SH-4 must be duly executed both by the transferor and the transferee.
• The share transfer indenture (deed) must have stamps according to the Indian Stamp Act, and Stamp Duty must be given in the State concerned.
• A person’s signature, name, and address should witness the signatures of the transferor and the transferee in the indenture of transfer.
• The relevant share certificate or allotment letter must be attached to the share transfer indenture and deliver the same to the company.
• The share transfer indenture must be deposited with the company within (60) sixty days from the date of such execution by or on behalf of the transferor and transferee.
• After receiving the share transfer deed, the board should consider the same. And if the documentation for transfer of shares is in order, the board can do it by passing a resolution register transfer.

Blank transfer

A blank transfer is an instrument of transfer signed by the transferor. And in this instrument, the name of the transferee and date of transfer are not filled. A blank transfer is used because the ownership of shares in a company is generally transferred from one person to another by the execution of a document by the seller and the buyer. It is not a negotiable instrument because it can be transferred by mere delivery. So the title of the transferee acquires shares through a blank transfer subject to the title of the transferor. 

Certification of transfer

The transferor hands over the certificate of shares to the transferee who then places it with the company for registration. When the number of shares transferred is less than the number of shares included in a certificate, or when they are transferred to different persons, the transferor has to place the share certificate with the company. The company gives a certificate which says that the shares have been placed with the company under transfer. This is called the certification of transfer.

In the case of Bishop v. Balkis consolidated company, A transferred his shares to two people and placed the certificate with the company. The company certificated the transfer but destroyed the original certificate and transferor who borrowed money on it. The company was held not liable to the lender. It is because the share certificate is not a negotiable instrument. 

Forgery in transfer

It may happen sometimes that a forged instrument is presented for registration. When a transfer is brought, it is not only registered once but should be written to the registered address of the shareholder. Then the respective person should be informed that the transfer has been placed.  

A forged transfer is a nullity and hence the original owner of the shares can continue to be the shareholder and the company is bound to restore his name to the register of members.

Rights to transferor and transferee

Until a non-member who is a transferee is admitted as a Substituted Member in accordance with the terms of this Agreement, 

• the transferee will have no right to exercise any of the powers, rights and privileges of a member other than to receive its share of allocations and distributions;
• the transferor will cease to be a Member with respect to such membership interest upon transfer of such membership interest and will have no further powers, rights and privileges as a Member with respect to membership Interest until relieved of such obligations by written agreement of all the other Members. They will remain liable for all obligations and duties as a Member with respect to such Membership Interest; 
• It is provided that if the Transferee reconveys such Membership Interest to transferor within ten days after the Transferor becomes aware that the Transferee will not become a Substituted Member, the Transferor will be once again entitled to all of the powers, rights, and privileges of a Member.

Priority between transferees

Priority of rights created by transferees can be understood under Section 48 of the Companies Act 2013. When a person claims to create a transfer, the rights over immovable property, cannot exist or be exercised to their full extent together. In the absence of a special contract or reservation, it binds the earlier transferees which shall be subject to the previously created rights. 

Transmission of shares

If a member of the Company dies, the survivor or the nominee or legal representatives (the sole holder) will be recognised by the company as they have the title to his interest in the shares. 

Any clause in the transmission of shares cannot release the estate of the deceased joint holder from any type of liability in respect of any share which had been jointly held by the person with other people. 

Any person who is entitled to a share in the result of the death or insolvency of a member may be required by the Board and subject if pieces of evidence have been produced either – 

• He registers himself as the holder of the share.
• He made the transfer of the share as the deceased or insolvent member would have made.

If the member is insolvent or deceased he has to transfer the share before his death or insolvency.

The board, in either case, will have the same right to decline or suspend registration as it would have had. 

If the person who is entitled to elect to be registered as holder of the share himself, he can deliver or send the company a notice in writing by him which states that he can elect. 

If the person can elect to transfer the share, he will testify his election by executing a transfer of the share.

Then all the limitations, restrictions and provisions of these regulations relating to the right to transfer and the registration of transfers of shares shall be applicable to any such notice or transfer as previously mentioned.

A person will be entitled to exercise any right granted by membership related to the meetings of the company if the person is registered as the holder of the share before being registered as a member. A person who is entitled to a share by reason of the death or insolvency of the holder will be entitled to the same dividends and other advantages to which he would be entitled.

Facilities for nomination

Shares of a company are known to be transferable assets under law. A shareholder is free to transfer shares held by him in a public company subject to reasonable limitations inflicted under the Articles of Association of the company. Nomination further enables a shareholder to provide sufficient directions to the company in consideration to disposal or transmission of shares held by him in case his death occurs. 

Section 72 of the Companies Act 2013, provides that every holder of securities of a company can nominate any person to whom his securities will be vested in the occurrence of his death. The term Securities includes shares of a company and if the shares are held by joint holders, such joint holders will have to nominate a single person as nominee. 

The Act does not limit the choice of persons who could be designated as a nominee. Even a minor can be recommended by the shareholder. If the nominee is minor, the shareholder should appoint any person who is entitled to the shares in the occurrence of the death of the nominee during his minority. 

A nomination can be filed anytime during the lifetime of the shareholder. It has to be filed in writing to the company in the prescribed Form SH-13. A nomination once filed can be cancelled or altered by filing form SH-14. The cancellation or variation can take effect from the date on which the notice of such variation or cancellation is received by the company.

Mortgage or pledge of shares

With the ratification of the Companies Act, 2013, the companies creating pledge over shares are mandatorily required to register the charge, which was not the case with its precursor (predecessor). A company cannot enforce a pledge created by its own against it by any creditor until the pledge is registered as per the amenities (provisions) of the Companies Act, 2013. Hence it is mandatory to register the charge. 

The Companies Act, 2013 projects a duty on the company to register with the Registrar of Company the following – 

• The particulars of creation.
• The modification of pledge along with the instrument within a stipulated time period. 

The mode and manner of registration is provided in the Companies (Registration of Charges) Rules, 2014.

Return as to Allotment: Section 75

When a company who has share capital makes any allotment of its shares, the company needs to do the following within thirty days – 

• File a return of allotments with the registrar which should be stating the number and minimum amount of shares comprised in the allotment. The name, address and occupation of the allottees are required. Also, it is required that the company mentions if any amount is to be paid or due and payable on each share. It must be noted that the company cannot show any shares in return having been allotted for cash if cash has actually not been received in respect to allotment. 
• In case the shares are not bonus shares they are allotted as fully or partly paid-up and paid in cash. They are produced for inspection and examination of the Registrar which is a contract in writing that constitutes the title of the allottee to the allotment together with any contract of sale or contract of services. It may be other consideration in respect of the allotment and such contracts are duly stamped and filed with the Registrar, the copies verified in the prescribed manner of all the contracts, A return is also filed stating the number and nominal amount of shares that are allotted. 
• In the case of bonus shares, a return would state the number and nominal amount of such shares comprising in the allotment, The names, addresses and occupations of the allottees and a copy of the resolution authorising the issue of such shares is required. In the case of issue of shares at a discount, some of the requirements like a copy of the resolution passed by the company that authorises such issue together with a copy of the order of the Court sanctioning the issue are required. If the maximum rate of discount exceeds ten per cent, a copy of the orders of the Central Government permitting the issue at the higher percentage is also required.

Companies Act (Amendment), 2014 –

(1) Whenever a company having a share capital makes any allotment of its securities, the company is required to file a return of allotment in Form PAS-3  with the Registrar within thirty days, along with the fee as specified in the Companies (Registration Offices and Fees) Rules, 2014.

(2) It must be attached to the Form PAS-3, a list of allottees stating their names, address, occupation and number of securities allotted to each of the allottees and the list will be certified by the signatory of the Form PAS-3 as being complete and correct as per the records of the company.

Issue of shares at discount: Section 54

• A company cannot issue shares at discount except as provided in Section 54. 
• If a company issues a share at a discounted price it shall be considered void. 
• If a company violates the provisions of the section, it will be punishable with fine to an extent of one lakh rupees which can further extend to five lakh rupees. Any officer who is in default will be punishable for a term of six months or fine not less than 1,00,000 which can extend to five lakh rupees. 

Sweat Equity Shares: Section 53

Sweat equity shares are issued by a company under Section 53 to its directors or employees at a discount or for some consideration, other than cash to provide their rights that are available in the nature of intellectual property rights or value additions.

The sweat equity shares issued will be treated as a part of managerial remuneration for the purpose of Sections 197 and 198 of the Act if the following conditions are fulfilled:

1. The sweat equity shares are issued to any manager or director;
2. They are issued for consideration other than cash, which does not take the form of an asset and can be carried to the balance sheet of the company in accordance with the applicable accounting standards.

The accounting value of sweat equity shares will be treated as a form of compensation to the employee or the director in the financial statements of the company if the sweat equity shares are not issued in accordance with the acquisition of an asset if sweat equity shares are issued during an accounting period. 

If the shares are issued in accordance with the acquisition of an asset, the value of the asset determined will be carried in the balance sheet as per the Accounting Standards. The excess amount of the asset acquired of the value of sweat equity shares will be treated as a form of compensation to the employee or the director of the company. 

The sweat equity shares issued to directors or employees must be non-transferable for a period of 3 years from the date of allotment and the share certificates are under lock-in. The period of expiry of lock-in should be stamped in bold or mentioned in any other prominent manner on the share certificate. The sweat equity shares to be issued should be valued at a price determined by a registered valuer as the fair price giving justification for such valuation.

Buy-back of shares: Section 77-A

Under Section 77-A the following norms should comply with the private companies and unlisted public companies for buy-back of their securities. The statement to the notice of the general meeting shall in accordance with Section 102 which should contain the following disclosures:

• the date of the board meeting at which the offer for buy-back was approved by the board of directors of the company;
•  the objective of the buy-back;
•  the group of shares or other securities intended to be purchased under the buy-back;
•  the number of securities that the company offers to buy-back;
•  the method to be adopted for the buy-back;
•  the price at which the buy-back of shares or other securities will be made;
•  the basis of arriving at the buy-back price;
•  the maximum amount to be paid for the buy-back and the sources of funds from which       the buy-back will be financed;
• the time-limit for the completion of buy-back;
• the agglomeration shareholding of the promoters and of the directors of the promoter, when the promoter is a company and of the directors and key managerial personnel as on the date of the notice convening the general meeting:

• the number of equity shares purchased or sold by persons under sub-clause (1) during a period of twelve months preceding the date of the board meeting at which the buy-back was approved and from that date until the date of the notice convening the general meeting;
• the maximum and minimum price at which purchases and sales referred to in sub-clause (2) were made along with the specified date.

1. If the people mentioned in sub-clause (1) of clause (j) that intends to tender their shares  for buy-back:

• the quantum of shares proposed to be tendered;
• their holdings and details of their transactions for the last 12 (twelve months) prior to the date of the board meeting at which the buy-back was approved including information of number of shares acquired, the price and the date of acquisition.

1. A confirmation is needed that there is no default in repayment of deposits, interest payable,  redemption of debentures or redemption of preference shares or payment of dividend due to any shareholder, or repayment of any term loans or interest payable thereon to any financial institution or banking company.
2. A confirmation that the Board of directors have made a full enquiry into the affairs and prospects of the company and that they have formed the opinion –

• following the date on which the general meeting is convened there shall be no grounds on which the company could be found unable to pay its debts;
• the year following that date having regard to their intentions with respect to the management of the company’s business during that year and the amount of the financial resources which will in their view be available to the company during that year, the company will be able to meet its liabilities  when they fall due and will not be rendered insolvent within a period of 1 (one year) from that date; 
• the directors should take liabilities into account including prospective and contingent liabilities, as if the company was being wound up under the provisions of the Companies Act, 2013.

1. A report addressed to the Board of directors by the company’s auditors stating that-

• they have inquired into the company’s state of affairs;
• the amount of the  capital payment for the securities in question is in the view properly determined;
• that the audited accounts on the basis of which calculation with reference to buy back is done is not more than six months old from the date of the offer document; and provided that the audited accounts are more than 6 months old, the calculations with reference to buy back should be on the basis of un-audited accounts not older than 6 months from the date of the offer document that is subjected to limited review by the auditors of the company;
• the Board of directors have formed the opinion as specified in clause (m) on reasonable grounds and that the company, having regard to its state of affairs, shall not be rendered insolvent within a period of one year from that date.

1. The company which has been authorised by a special resolution shall, before the buy-back of shares, file with the Registrar of Companies a letter of offer in Form No. SH.8, along with the fee. It is provided that such letter of offer should be dated and signed on behalf of the Board of directors of the company by not less than two directors of the company, one of whom shall be the managing director, where there is one.
2. The company is required to file with the Registrar, along with the letter of offer, and in case of a listed company with the Registrar and the Securities and Exchange Board, a declaration of solvency in Form No. SH.9 along with the fee and signed by at least two directors of the company, one of whom shall be the managing director, if any, and verified by an affidavit as specified in the said Form.
3. The letter of offer should be dispatched to the shareholders or security holders immediately after filing the same with the Registrar of Companies but not later than twenty days from its filing with the Registrar of Companies.

Underwriting commission

This section allows the company to pay commission to any person if he is subscribing for shares or debentures or if he agrees to procure subscription for shares or debentures of the company. The company would like to ensure the success of the issue of shares when shares are offered to the public.  

Brokerage 

Brokerage is a commission paid to a bank, stockbroker or any other marketing mediator for placing shares on an effort basis or for inducing a broker’s clients or customers to subscribe for the company’s shares or any other securities and if it reasonable in amount it is lawful. 

In other words, brokerage is a fee or commission given to or charged by a broker. When the owner of the property employs a broker to find a purchaser and he agrees to compensate him then consideration is known as Brokerage Commission. The listed companies can only pay brokerage of 5% on private placement of capital. Brokerage can only be paid for the services rendered under a contract with the company.

Issue of shares at premium: Section 52

1) Under Section 52, when a company issues shares at a premium for cash, a sum equal to the amount of the premium received on those shares will be transferred to a “securities premium account” and the provisions of this Act relates to reduction of the share capital of a company and except as provided in this section if the securities premium account were paid-up share capital of the company.

(2) The securities premium account under sub-section (1) to be applied by the company:

•  towards the issue of shares of the company that are not issued, to the members of the company as fully paid bonus shares.
•  to write off the preliminary expenses of the company;
•  to write off the expenses of  the commission paid or discount allowed on, any issue of    shares or debentures of the company;
•  to provide for the premium payable on the redemption of  redeemable preference shares or of the debentures of the company; 
•  for the purchase of their own shares or any other securities under Section 68.

(3) The securities premium account in spite of contained in sub-sections (1) and (2), can be applied by some class of companies as prescribed. The  financial statement shall comply with the accounting standards prescribed for such class

of companies under Section 133:

• in paying the equity shares of the company that are not issued to be issued to members of the company as fully paid bonus shares;
• to write off  the expenses of or the commission paid or discount allowed on any issue of equity shares of the company;
• for the purchase of its own shares or other securities under Section 68.

Penalty for fraudulently inducing investment

Any person who induces or attempts to induce another person either knowingly or not promise or forecasts anything false, deceptive and misleading to offer to enter into – 

(a) any agreement with a view for acquiring, disposing of, subscribing for, or underwriting shares or debentures.

(b) any agreement having pretended purpose which is to secure a profit to any of the parties from the shares or debentures, by reference to fluctuations in the value of shares or debentures. It will be punishable with imprisonment for a term which can extend to 5 years, or with fine which can extend to 1,00,000 or both.

Personation for the acquisition of shares: Section 38

(1) Under Section 38 any person who:

(a) abets to make an application in a  name which is fictitious to the company to acquire, or subscribe for its securities;

(b) makes or abets to make  multiple applications to a company in different names or in different combinations of his name or surname for subscribing for its securities;

(c) induces directly a company to allot, or register any transfer of securities to him, to any other person in a fictitious name, will be liable for action under Section 447.

(2) The provisions of sub-section (1) will be reproduced in every prospectus issued by a company and in every form of application for securities;

(3) When a person has been convicted under this section, the Court has the right to order discharge by seizure and disposal of the securities in possession of such person.

(4) The amount received through discharge or disposal of securities under sub-section (3) will be credited to the Investor Education and Protection Fund.

Shareholders or Members

Who may be a member?

A member is a person who subscribes the memorandum of the company. A shareholder is a person who owns the shares of the company and shareholders are the one whose name is entered in the register of Company are the members.

Calls on shares: Section 49

1. Under Section 49 of the Company Act, 2013 the Board can make calls upon the members from time to time in respect of any monies (a current medium of exchange in the form of coins and banknotes) unpaid on their shares on account of the nominal value of the shares or by way of premium and not by the conditions of allotment made payable at fixed times.
2. It should be provided that a call on shares should not exceed one-fourth of the nominal value of the shares. It will be payable in less than one month from the date fixed for the payment of the last preceding call on share.  
3. Each member will receive at least fourteen days’ notice which will specify the time or times and place of payment, payment to the company, and the amount called on his shares.
4. A call can be revoked or postponed at the option of the Board.

• When the Board authorises by passing a resolution then a call will be deemed to have been made at that time and it may be required to be paid by instalments.
• The joint holders of a share can be jointly and severally liable to pay all calls.
• The person from whom the sum is due should pay interest if the sum is not paid before or on the day appointed for payment. The amount of interest will be calculated from the appointed for payment to the time of actual payment at ten per cent per annum or at the rate at which the Board determines. The Board has the liberty to waive payment of any such interest wholly or partly.
• Any amount of a share becomes payable on allotment by the terms of issue on account of the nominal value of the shares or by way of premium. It will be deemed to be call duly made and payable on the date with some regulations. 
• In case of non-payment of an amount, all the relevant provisions of these regulations as to the payment of interest and expenses, forfeiture or will apply as um had become payable by virtue of a call duly made and notified.
• The Board – (a) can receive all or any part of the monies uncalled and unpaid from any member willing to advance the same upon any shares held by him and (b) upon the monies that are advanced may pay interest at such a rate which not exceeding. The company in general meeting will direct 12% per annum as agreed between the Board and the member paying the sum in advance. 

Payment in kind

Payment in kind means use of a good or service as payment instead of cash. It also refers to a financial instrument that pays interest or dividends of bonds, notes to investors. It may be preferred stock with additional securities or equity instead of cash. They are attractive securities to companies and prefer not to make cash outlays and are used as buyouts. 

Forfeiture of shares

The Board can serve a notice on the member requiring payment either on call on shares or if the instalment is unpaid if the member fails to pay any call or instalment of a call on the day which was appointed for the payment. If the member fails to do so then he will have to pay the interest which may have been accrued. 

1. The notice will contain the following particulars – 

• a day not earlier than the expiry of 14 (fourteen days) from the date of service of the notice or before which the payment is to be made  required by the notice;
• state in the event of non-payment on or before the day so named, the shares in respect of which the call was made will be liable to be forfeited.

1. If the requirements of any such notice as previously mentioned are not complied with, then any share can be forfeited by a resolution of the Board in respect of the notice at any time after or before the payment. It is required by the notice that it must be forfeited by a resolution of the Board.
2. A forfeited share can either be sold or disposed of on the terms and manner prescribed as the Board thinks. The Board can cancel the forfeiture on shares at any time before a sale or disposal of the shares. 
3. A person whose shares have been forfeited will cease to be a member in respect of the forfeited shares but will remain liable to pay to the company all monies at the date of forfeiture. Payable by him to the company in respect of the shares. The liability of the person will cease if the company has received payment in full of all such monies in respect of the shares.

• A duly verified declaration in writing id required that the declarant is a director, the manager or the secretary of the company and a share in the company has been duly forfeited on a date stated in the declaration. All these will be  conclusive evidence of the facts stated as against all persons claiming to be entitled to the share;
• The company can receive the consideration given for the shares on any sale or disposal  and may execute a transfer of the shares in favour of the person to whom the share is sold or disposed of;
• The Transferee should be registered as the holder of the share;
• The Transferee will not be bound to the application of the purchase money nor will his title to the share be affected by any irregularity or invalidity in the proceedings of forfeiture, sale or disposal of the share.

1. The provisions of the regulations as to forfeiture will apply in the case of nonpayment of any sum by the terms of issue of a share. It becomes payable at a fixed time, either on account of the nominal value of the shares or by way of premium as if the same had been payable by a call duly made and notified.
2. The company can increase the share capital by an amount by an ordinary resolution to be divided into shares as specified in the resolution from time to time. Subject to the provisions of Section 61, the company can by ordinary resolution – 

• convert all or any of its fully paid-up shares into stock, and reconvert that stock into fully paid-up shares of any denomination;
• sub-divide its existing shares or any of them into shares of smaller amount as fixed by  the memorandum;
• cancel any shares at the date of the passing of the resolution, have not been taken or agreed to be taken by any person.

1. When shares are converted into stock – 

• it is provided that the Board can fix the minimum amount of stock transferable from time to time however minimum amount should not exceed the nominal amount of the shares from which the stock arose.
• the holders of stock should have the same rights, privileges and advantages as regards dividends, voting at meetings of the company, and other matters as if they held the shares from which the stock arose according to the amount of stock held by them, but no such privilege or advantage except participation in the dividends and profits of the company. In the assets on winding up, it should be conferred by an amount of stock which would not have conferred that privilege or advantage.
• such regulations of the company are applicable to paid-up shares must apply to stock and the words “share” and “shareholder” in those regulations and also include “stock” and “stockholder” respectively.

1. The company can reduce in a manner made by special resolution, subject to any incident authorised by law – 

• share capital;
• any capital redemption reserve account;
• any share premium account. 

1. The Board should have power – 

• to make such provisions, by the issue of fractional certificates or by payment in cash or otherwise as it thinks fit, for the case of shares becoming distributable in fractions; or
• to authorise any person to enter, on behalf of all the members entitled into an agreement with the company to provide for the allotment to them credited as fully paid-up. Any further shares to which they may be entitled upon such capitalisation, or as the case may require, for the payment by the company on their behalf, by the application of their respective proportions of profits resolved to be capitalised, of the amount or any part of the amounts remaining unpaid on their existing shares.

1. Any agreement made under such authority has to be effective and binding on such members.

Surrender of shares

Surrender of shares means a voluntary return of shares by a member of the company and it is also a shortcut to forfeiture of shares. Shares can be surrendered by the holder if he desires and these shares will be liable to be forfeited on default in the payment of calls. The voluntary surrender of shares are accepted by the company but it authorised by the Articles of the Company. The Directors may accept a surrender of shares only when:

• Under the situation which will justify forfeiture of shares, which means non-payment of amount due in respect of shares that are not fully paid;
• If the share or certificate gets torn or mutilated and can be exchanged with a new one.

Register of members: Section 88

(1) Every company is required to keep and maintain the following registers in such form

and in such manner, as  prescribed in Section 88:

• register of members indicating separately for each class of equity;
• preference shares held by each member residing in or outside India;
• register of debenture-holders; and
• register of any other security holders.

(2) Every register is required to maintain under sub-section (1) should include an index of the names included.

(3) The register and index of beneficial owners are maintained by a depository under Section 11 of the Depositories Act, 1996, will be deemed to be register and index for the purposes of this Act.

Right of inspection

The Register is kept under the sub-section (1) of Section 170 – 

• It should be open for inspection during the business hours and the members have a right to take extracts and copies on a request by the members provided to them free of cost within thirty days;
• It should keep the register open for inspection at every general meeting of the company and make it accessible to any person who attends the meeting. 
• If any inspection is provided in clause (a) of sub-section (1) is refused, or if any copy required under the clause is not sent within thirty days from the date of receipt of such request, the Registrar can make an application to him ordering immediate inspection and supply of copies required.  

Shares in Demat Form

The Companies (Prospectus and Allotment of Securities) Rules, 2014, have been amended by the ministry. It is stated that every unlisted company is expected to facilitate the dematerialisation of the securities in coordination with the depositories and share transfer agents. Every unlisted company makes an offer for issue of any securities buyback of securities or issue of bonus shares or rights offer are required to comply with certain requirements as per the rules. Unlisted public companies are expected to facilitate the dematerialisation of the securities in coordination with the depositories and share transfer agents. Every company who makes a public offer and other groups of public companies prescribed will issue the securities only in dematerialised form by complying the provisions of the Depositories Act, 1996. 

Rectification of register of members: Section 59

• If the name of a person is entered in the register of members of a company without any sufficient cause or the name has been omitted without any sufficient cause which means any default is there. If any unnecessary delay takes place in entering in the register, the fact of any person is ceased to be a member, the person aggrieved, or any member of the company, or the company can appeal as it is prescribed by the norms to the Tribunal, or to a competent court outside India, specified by the Central Government by notification, in respect of foreign members or debenture holders, residing outside India, for rectification of the register.
• The Tribunal can appeal under sub-section (1) after hearing the parties, can either dismiss the appeal or direct that the transferor or transmission must be registered by the company within a period of ten days of the receipt of the order. Further, it can direct rectification of the records of the depository or the register and in the latter case, direct the company to pay damages sustained by the aggrieved party.
• The provisions of this section can not restrict the right of a holder of securities, to transfer these securities. Any person acquiring such securities will be entitled to voting rights unless the voting rights have been suspended by an order of the Tribunal.
• The Tribunal made by the depository, company, depository participant, the holder of the securities or the Securities and Exchange Board can direct any company or a depository to set right the contravention and rectify its register or records concerned if the transfer of securities is in contravention of any of the provisions of the Securities Contracts (Regulation) Act, 1956, the Securities and Exchange Board of India Act, 1992 or the Act is in force at that time.
• If there is any default in complying with the order of the Tribunal under this section, the company will be punishable with a fine of not less than 1,00,000 (one lakh rupees) which may extend to 5,00,000 (five lakh rupees) and every officer of the company who is in default will be punishable with imprisonment for a term of 1 year or with fine of not less than 1,00,000 (one lakh rupees)  which can extend to 3,00,000 (three lakh rupees) or both.

Directors’ power of rectification of entries

It depends on the discretion of the directors to rectify members who have been registered even when an entry has been detected. There is no certain requirement in this scenario to apply to the Tribunal for an order of rectification.

The Board can itself affect the necessary corrections if the situation is such that the Tribunal would order rectification. An application to the court is essential when the company disputes the right to rectification. There is no certain reason why directors agree if they are bona fide (someone who is genuine) and that a shareholder has the right to avoid a contract. It should not assent to the cancellation of the contract and rectify the register in the appropriate manner. 

However, the directors have no power to rectify the register by substituting the name of another person in the place of an existing member, except on an application for transfer duly made in compliance with the provisions of the Act.

Amendment of Section 111 by the Depositories Act

Under Section 111 it is inserted that a company means a private company and includes a private company which had become a public company by virtue of Section 43A of the Act. 

Lien on shares

A lien is a legal right granted by the owner of the property, by law or otherwise acquired by a creditor. A lien serves to guarantee an underlying obligation, such as the repayment of a loan. If the underlying obligation is not satisfied, the creditor may be able to seize the asset that is the subject of the lien.

The company is required to have a first and most important (paramount) lien:

• on every share which is not fully paid share for all monies whether it is presently payable or not called at a fixed time, in respect of that share;
• on all shares which are not fully paid shares but stands registered in the name of a single person, for all monies presently payable by him or his estate to the company.

It is provided that the Board of Directors can declare any share to be wholly or in part exempt from the provisions of the clause at any time – 

The company’s lien on a share can extend to all dividends payable and bonuses declared in respect of such shares from time to time.

The company can sell any shares on which the company has a lien provided that no sale shall be made in such manner as the Board thinks – 

(a) unless a sum is presently payable in respect of which the lien exists;

(b) until the fourteen days expire, after a notice in writing stating and demanding payment of part of the amount in respect of which the lien exists as is presently payable. It would be given to the registered holder for the time being of the share or the person entitled by his death or insolvency.

• To give effect to any such sale, the Board needs to authorise some person to transfer the shares sold to the purchaser.
• The purchaser must be registered as the holder of the shares comprised in any such transfer.
• The purchaser will not be bound to see to the application of the purchase money, nor will his title to the shares be affected by any irregularity or invalidity in the proceedings in reference to the sale.

The proceeds of the sale will be received by the company and applied in payment of such part of the amount in respect of which the lien exists as is presently payable.

If there is any residue left it will be subject to a lien for sums not presently payable as existed upon the shares before the sale but paid to the person entitled to the shares at the date of the sale.

Annual returns: Section 92

1. Under Section 92, every company is required to prepare a return also known as annual return in the prescribed manner containing the particulars regarding financial year –  

• registered office, principal business activities, particulars of the holding, subordinate and associate companies;
• shares, debentures and other securities and shareholding;
• indebtedness;
• members and debenture-holders along with changes because of the close of the previous financial year;
• promoters, directors, key managerial employees along with changes since the close of the previous financial year;
• meetings of members of the Board and its various committees along with attendance details;
• remuneration of directors and key managerial employees;
• penalty or punishment imposed on the company, its directors or officers and details of compounding of offences and appeals made against such penalty or punishment;
• matters relating to certification of  disclosures as prescribed;
• details of shares held by or on behalf of the Foreign Institutional Investors which would their names, addresses, countries of incorporation, registration and percentage of shareholding held by them; and other matters as prescribed, and signed by a director and the company secretary, or if there is no company secretary then by a company secretary in practice.

It is provided that the annual return is required to be signed by the Company Secretary or by the director in relation to a One Person Company. 

(2) A company’s paid-up capital, annual return filed by the listed company and the turnover prescribed by the norms will be certified by the Company Secretary in practice in the prescribed form. It should state that the annual return will disclose the facts correctly and adequately. Also, the company has complied with all the provisions of the Act. 

(3) An extract of the annual return shall be prescribed in the form of part of the Board’s report.

(4) Every company is required to file a copy of the annual return with the Registrar within 60 days from the date on which the annual general meeting is held. When an annual general meeting is not held in any year then within sixty days from the date on which the annual general meeting should have been held together along with a statement specifying the reasons for not holding the annual general meeting. Also with fees or additional fees as prescribed, within the specified time under Section 403.

(5) The company will be punishable with a fine not less than 50,000 (fifty thousand rupees) that can extend to 5,00,000 (five lakhs rupees) and every officer of the company who is in default will be punishable with imprisonment for a term which may extend to six months or with fine, not less than 50,000 (fifty thousand rupees) but which may extend to 5,00,000 (five lakh rupees) or both if the company fails to file its annual return under sub-section (4), before the expiry of the period specified under Section 403 with additional fee.

(6) If a company secretary in practice certifies the annual return in conformity with the requirements of this section or the rules made under the section then he can be punishable with fine, not less than 50,000 (fifty thousand rupees) which may extend to 5,00,000 (five lakh rupees).

Share Capital

A share includes stock in the share capital of the company, this is in accordance with Section 2(84) of the Companies Act, 2013. In other words, a share is a measure of the interest in the company’s assets that a shareholder holds.

Kinds of share capital: Section 43

The share capital of a company limited by shares is divided into kinds: 

(a)  equity share capital

(b)  preference share capital

It is provided that the effect of the rights of the preference shareholders who are entitled to participate in the proceeds of winding up before the commencement of the Act. 

• Equity share capital means all share capital that is not share capital limited by shares.
• Preference share capital is a part of issued share capital of the company which carries or would carry a preferential right reference to any company limited by shares. 
• payment of dividend, either as a fixed amount or an amount calculated at a fixed rate, which can either be free of or subject to income-tax;
• repayment, in the case a company is winding-up or repayment of capital, of the amount of the share capital, paid-up or deemed to have been paid-up. There is a preferential right to the payment of any fixed premium or premium on any fixed scale that is specified in the memorandum or articles of the company. Capital will be deemed to be preference capital, that it is entitled to either or both of the following rights:
• in respect of dividends, in addition to the preferential rights to the amounts specified in sub-clause (a) of clause (2), it has a right to participate, fully or to a limited extent, with no capital entitled to the preferential right;
• capital, in addition to the preferential right to the repayment, on a winding-up, of the amounts specified in sub-clause (b) of clause (2), it has a right to participate, fully or to a limited extent, with capital not entitled to preferential right in any surplus which may remain after the entire capital has been repaid.

Types of Preference shares

There are eight types of preference shares. In case of dissolution of the company, any of the eight types can be paid before other types of equity:

Cumulative: In cumulative shares, all dividends are carried forward until specified, and are paid only at the end of the period specified.

Non-cumulative: The non-cumulative shares are the opposite of cumulative shares. Dividends are paid out of profits every year. There are no arrears carried over a time period to be paid at the end of the term.

Redeemable: Redeemable preference shares are claimed after a fixed period or after giving due notice.

Non-Redeemable: Non-Redeemable shares cannot be redeemed during the lifetime of the company, but can be redeemed at the time of winding up of a company or acquisition of assets.

Convertible: These shares can be converted into equity shares after a period of time or as per the conditions laid down in the terms.

Non-convertible: Non-convertible preference shares cannot be converted into equity shares at any point of time.

Participating: Such shares have the right to participate in any additional profits, after paying the equity shareholders. The surplus of profit and the fixed dividend paid up for preference shares are different.

Non-Participating: Non-participating preference shares do not possess any right to participate in surplus profits or any surplus gained at the time of liquidation of the company.

Redeeming preference shares: Section 55

1. Under Section 55, a company limited by shares cannot issue any preference shares that are irredeemable after the commencement of the act. A company may issue preference shares that are liable to redeemed within a period that does not exceed twenty years from the date of their issue subject to certain conditions if the company is authorised by its articles. 
2. A company has the right to issue preference shares for a period exceeding twenty years for infrastructure projects if provided. It is subject to the redemption of shares as determined on an annual basis at the option of preferential shareholders. 

• Shares cannot be redeemed except in the case of profits, it would be available for dividend or form the fresh issue of shares that are made for the purposes of redemption. 
• Shares will not be redeemed unless they are fully paid.
• When shares are redeemed out of the profits of the company then it will be transferred and will be called Capital Redemption Reserve Account. It should be noted that the sum will be equal to the nominal amount of shares and this will be governed under the provisions of this Act and it relates to a reduction of the share capital of the company. 
• A company’s financial statement complying with the accounting standards given under Section 133. If any premium is payable on redemption it will be provided out of profits of the company before the shares have been redeemed. 
• Premium shall be payable on redemption of any preference shares issued on or before the commencement of this Act by any company and it will be provided out of the profits of the company or out of the securities of the company before the shares are redeemed.

In case it does not fall under sub-clause, premium will be payable on redemption if it out of the profits of the company or out of the securities of the company premium account before the shares are redeemed.

3. A company can further issue redeemable preference shares equal to the amount due if the company is not in a position to redeem any preference shares or dividend in agreement with the terms of issue. Such shares are also known as unredeemed preference shares. It can do it with the consent of the holders of three-fourths in value of the shares with the approval of the Tribunal on a petition made. Then these unredeemed preference shares will be deemed to have been redeemed. The tribunal should give approval under the sub-section and order the redemption of shares that are held by people who have not consented to the further issue of redeemable preference shares. 
4. The capital redemption reserve account can be applied by the company to pay the unissued shares of the company to be issued to members of the company as fully paid bonus shares.

Ordinary and preference shareholder compared

Ordinary shareholders are eligible to participate in the surplus profits or assets of the company which remain after repayment of capital whereas preference shareholders have no right to participate in surplus profits until the right to participate in surplus profits is expressly given in the Articles. 

Alteration of capital: Section 61

Section 61 of the Companies Act, 2013 deals with the power of a limited company to alter its share capital. According to this section, a limited company having a share capital can alter its share capital by passing an ordinary resolution in general meeting if authorised by the articles. Such alteration does not require confirmation by the National Company Law Tribunal. However, the notice of such alterations should be given to registrar within 30 days of such alteration in e-form SH-7 with certified copy of ordinary resolution along with explanatory statement and altered copy of Memorandum of Association of the company.

Reduction of capital: Section 66

1. Under Section 66, a company limited by shares or limited by guarantee which has share capital can reduce the share capital in any manner by a special resolution.
2. The Tribunal is required to give notice of every application made to it under sub-section (1) to the Central Government, Registrar and to the Securities and Exchange Board of India, in the case of listed companies, and the creditors of the company. It should also take into consideration the representations if there are any and made to it by the Government, Registrar, the Securities and Exchange Board, and the creditors within a period of three months from the date of receipt of the notice.
3. It is provided that if no representation is received by the Central Government, Registrar, the Securities and Exchange Board (SEBI) or the creditors within the given period, it will be presumed that they have no objection to the reduction of the capital. The tribunal can make an order confirming the reduction of share capital if it is satisfied that the debt or claim of any creditor of the company has been discharged or determined or has been secured or the consent has been obtained.
4. It is also provided that an application cannot be sanctioned for reduction of share capital by the Tribunal until the accounting treatment is proposed by the company for such reduction. It should be in conformity with the accounting standards specified in Section 133 or any other provision of the Act and a certificate needs to be filed with the Tribunal with the effect by the company’s auditor. The order of confirmation of the reduction of share capital by the Tribunal under sub-section (3) will be published by the company in the manner directed by the Tribunal. 
5. The company is required to deliver a certified copy of the order of the Tribunal under sub-section (3) and approved by the Tribunal showing – 

• the amount of the share capital; 
• the number of shares into which it is to be divided; 
• the amount of each share; and
• the amount at the date of registration deemed to be paid-up on each share, to the Registrar within thirty days of the receipt of the copy of the order, who will register the same and issue a certificate to that effect. 

1. This section does not apply to buy-back of its own securities by a company under Section 68. 
2. A member of the company, past or present, will not be liable to any call or contribution in respect of any share if held by him exceeding the amount of difference between the amount paid on the share, or reduced amount if any, which is to be deemed to have been paid and the amount of the share as fixed by the order of reduction. 
3. When the name of any creditor is entitled to object to the reduction of share capital under this section is, by reason of his ignorance of the proceedings for reduction or of their nature. The effect with respect to his debt or claim, not entered on the list of creditors, and after such reduction, the company is unable, within the meaning of sub-section (2) of Section 271, to pay the amount of his debt or claim,— 

• Every person, who was a member of the company on the date of the registration of the order for reduction by the Registrar, will be liable to contribute to the payment of that debt or claim, an amount not exceeding the amount which he would have been liable to contribute if the company had commenced winding up on the day immediately before the said date; and
• If the company is wound up, the Tribunal can settle a list of persons so liable to contribute and make and enforce calls and orders on the contributors settled on the list, as if they were ordinary contributors in a winding up on the application of any such creditor and proof of his/her ignorance.

1. This section can not affect the rights of the contributors among themselves-

• If any officer of the company knowingly conceals the name of any creditor who is entitled to the reduction;
• If he knowingly misrepresents the nature or amount of the debt or claim of any creditor;
• If he abets to any such concealment or misrepresentation he will be liable under Section 447. If a company fails to comply with the provisions of sub-section (4), it will be punishable with a fine of not less than 5,00,000 (five lakh rupees) which may extend to 25,00,000 (twenty-five lakh rupees). 

Further issue of capital: Section 62

Under Section 62, a company proposes to increase its subscribed capital by the issue of further shares and these shares will be offered to – 

• To people who are the holders of equity shares of the company in proportion to the paid-up share capital on those shares by sending a letter of offer to some conditions – 

(i) the offer will be made by specifying the number of shares offered by notice and limiting a time not less than fifteen days. Also, it should not  exceed thirty days from the date of the offer within which the offer, if not accepted it will be deemed to have been declined; 

(ii) unless the articles of the company states the offer it will be deemed to include a right which can be exercised by the person to relinquish the shares offered to him or any one of them in favour of any other person. The clause (1) contained in the notice will be in the statement of the right.

(iii) The Board of Directors can dispose of the notice in such a manner which is not disadvantageous to the shareholders and the company, to employees under a scheme of employees’ stock option which will be subject to a special resolution passed by the company and to some conditions as prescribed. 

• The notice in sub-clause (i) of clause (a) of sub-section (1) should be despatched through registered post or speed post or through electronic mode to all the existing shareholders at least three days before the opening of the issue.
• It is provided that if the terms and conditions of such conversion are not acceptable to the company it can appeal to the Tribunal after hearing the company and the Government pass such order within sixty days from the date of communication of such order. 
• The Government has the due regard to the financial position of the company, in determining the terms and conditions of conversion under sub-section (4) and the terms of issue of debentures or loans and the rate of interest payable on such debentures or loans and such other matters it considers. 
• When the Government has made an order under sub-section (4), which directed that any debenture or loan or any part can be converted into shares in a company and no appeal is referred to the Tribunal under sub-section (4) or where such appeal has been dismissed, the memorandum of such companies will effect increasing of the authorised share capital of the company.

Employees Stock Option 

It means the option given to the directors, officers or employees of a company or of its holding company or subordinate company or companies which gives directors, officers or employees, the benefit or right to purchase, to subscribe the shares of the company at a future date at a price which is predetermined. 

Power to convert loans into capital

The Central Government has taken a new power to convert the debentures into debentures that is issued to and taken from the Government by the amendment of 1963. The Central Government can direct that any debenture that shall be converted into shares in the company. These debentures have been issued by a company to the Government or been taken by any loan. The Government can exercise such power only when such conversion appears to be necessary in the public interest. The conversion of debentures on such conditions will take place only when the Government finds them reasonable. The financial position of the company, the original terms of the issue, the rate of interest, the capital of the Company, its liabilities, its reserves and the profits of the company must be taken into consideration. 

The Government needs to be careful to avoid serious imbalance in the ratio of debt to equity capital of the company. The company can appeal to the court within thirty days if the terms and conditions proposed by the Government are not acceptable to the company. The decision of the court will be final and conclusive. A copy of every order issued by the Government has to be laid in draft before each House of Parliament for a period of thirty days. 

The capital of the company will increase by an equal amount and memorandum altered if the Government or any public financial institution has converted its debentures or loans into capital under Section 94-A  inserted by the amendment of 1974.

Voting Rights 

Any member of a Company limited by shares and holding equity share capital under the provisions of Section 43 and sub-section (2) of Section 50, has a right to vote on every resolution placed before the company. His voting right on a poll will be in proportion to the shares in the paid-up equity share capital of the company. Any resolution for the winding up of the company or for the repayment or reduction of its equity or preference share capital and his voting right on a poll should be in proportion to his share in the paid-up preference share capital of the company. It is provided that the proportion of the voting rights of equity shareholders to the voting rights of the preference shareholders will be in the same proportion as the paid-up capital in respect of the equity shares bears to the paid-up capital in respect of the preference shares.                                                          

Variation of shareholders’ rights: Section 48

1. When share capital of the company is divided into different groups of shares, the rights attached to the shares of any class may vary with the consent of the holders of not less than three-fourths in writing. The issued shares of that group or class is passed at a separate meeting of the holders of issued shares under Section 48.

• If the memorandum or articles of the company contains the provision with respect to variation;
• The variation is prohibited by the terms of the issue of shares if any provision in the memorandum or articles is absent. It must be noted that if there is a variation even by one group of shareholders then consent of three-fourths of such shareholders will be obtained and all the provisions under this section should apply to the variation. 

1. When the shareholders of the issued shares do not hold less than ten per cent, did not consent to the variation or vote in favour of the special resolution, they may apply to the Tribunal to cancel the variation. If any such application is made, the variation should not effect until it is confirmed by the Tribunal. It is provided that an application under the section should be made within 21 (twenty-one) days after the date on which consent was given or resolution was passed. Also, it should be made on behalf of shareholders who are entitled to make the application.
2. The decision made by the Tribunal will be binding on the shareholders on any application under sub-section (2). 
3. The company is supposed to file a copy with the Registrar within thirty days of the date of order of the Tribunal.
4. The company will be punishable with fine which will be not less than twenty-five thousand rupees which can extend to 5,00,000 ( five lakh rupees) if the company is not complying with the provisions of the section. Any officer of the company who is in default will be punishable with imprisonment for a term that can extend to six months or fine not less than 25000 (twenty-five thousand rupees) that can extend to 5,00,000 (five lakh rupees).

Power to Nominate

• Every holder of securities of a company can nominate any person to whom his securities are vested in the event of his death in the prescribed.
• When the securities of a company are held by more than one person jointly, the joint holders can together nominate, any person to whom all the rights in the securities have vested in the event of death of all the joint holders in the prescribed manner. 
• When the nominee is a minor, it should be lawful for the holder of the securities, to make the nomination to appoint any person to become entitled to the securities of the company, in the event of the death of the nominee during his minority in the prescribed manner. 

Share Warrants

A Share Warrant is a document issued by the company under its common seal, which states that the bearer is entitled to the shares or stock specified. Share warrants are negotiable instruments. They are transferable by delivery without registration of transfer.

Purchase by Company of its own shares: Section 68

A company can purchase its own shares or any other specified securities under Section 68 out of: 

• Free reserves
• Securities Premium Account
• Proceeds of issue of any shares or any other specified securities, buyback of any kind of shares or any other specified securities will be made out of the proceeds of the issue of the same kind of shares or the same kind of security is not provided.  

A company cannot purchase its own shares or any other specified securities under sub-section (1) until – 

• The buyback of shares are authorised by the articles
• A special resolution is passed at a general meeting of the company which authorises the buyback.
• The buyback of shares is 10% or less than the total paid-up equity capital and free reserves of the company and the buyback has been authorised by the Board by passing a resolution in the meeting. 
• The buyback is 25% or less than the aggregate of paid-up capital and free reserves of the company. It is provided that in respect of buyback of equity shares in a financial year, the reference to 25% will be interpreted with respect to the total paid-up equity capital in that financial year.
• The ratio of secured and unsecured debts owed by the company should not be more than twice the paid-up capital and free reserves. The Central Government can notify a higher ratio of debt to capital and free reserves for a class of companies.
• The shares or other specified securities for buyback must be fully-paid.
• The buyback of shares or other specified securities listed on the stock exchange is in agreement with the regulations made by the Securities and Exchange Board in this behalf.
• The buyback of shares or other specified securities other than those specified in the clause (f) is in agreement with the rules as may be prescribed. It is provided that no offer of buyback under the subsection is made within one year from the date of closure of the preceding offer of buyback. 

The notice of the meeting is passed at the proposal of special resolution under the clause – 

• A full and complete revelation of all the material facts;
• Necessity for buyback of shares;
• The group of shares or securities to be purchased under the buyback shares;
• The amount to be invested under buy-back;
• The time limit for completion of buy-back.

Every buyback should be completed within a period of one year from the date of passing of the special resolution passed by the Board under clause (b) of subsection (2).

The buy-back under sub-section, from the existing shareholders or security holders on a proportionate basis;

• from the open market;
• by purchasing the securities that are issued to employees of the company in accordance with a scheme of stock option or sweat equity.

1. When a company offers to buy-back its own shares or any other specified securities under this section in fulfilment of a special resolution under clause (b) of sub-section (2). According to the provision, the company should file a register,  the Securities and Exchange Board and a declaration of solvency signed by at least to directors of the company. One would be the managing director and prescribed by an affidavit to the effect that the Board of Directors of the company has made an inquiry into the affairs of the company. As a result, they formed an opinion which is capable of meeting its liabilities and shall not be rendered insolvent within the period of one year from the date of the declaration adopted by the board. 
2. It is provided that declaration of solvency will not be filed with the Securities and Exchange Board by a company whose shares are not listed on any stock exchange. When a company buys back its own shares or any other specified securities, it will physically destroy the shares or securities bought back within seven days of the last date of completion of buy-back. 
3. When a company completes a buy-back of its shares or any other specified securities under this section, it will not make a further issue of the same kind of shares or other securities including allotment of new shares under clause (a) of sub-section (1) of Section 62. The securities which are specified within the period of six months, except a bonus issue or the discharge of obligations such as conversion of warrants, sweat equity or conversion of preference shares or debentures into equity shares.
4. When a company buys back its shares or any other specified securities under this section, it is required to maintain a register of the shares or securities bought. The consideration paid for the shares bought back, the date of cancellation of shares or securities, the date of extinguishing and physically destroying the shares or securities and other particulars should be prescribed by the company. 
5. A company is required to file a return with the Registrar and Securities and Exchange Board of India after the completion of buy-back under the section. It should contain particulars relating to the buy-back within thirty days of such completion. It is provided that return cannot be filed with the Securities and Exchange Board of India by a company whose shares are not listed on any stock exchange. The company will be punishable with fine if it makes any default in complying with the provisions of the regulation made by the Securities and Exchange Board. The purpose of clause (f) of sub-section (2) applies if the company is punishable with fine which should not be less than 1,00,00 rupees which can extend to 3,00,00. Any officer of the company who is in default will be punishable with imprisonment for a term of 3 years or fine which will not be less than 1,00,000 rupees which can extend to 3,00,000 rupees or maybe both. 

Declaration of solvency 

Declaration of solvency comes under Section 305 –

1. The majority of directors can make a declaration verified by an affidavit at a meeting of the Board when the company proposes to wind the company voluntarily when there are more than two directors. The declaration verified by the affidavit to the effect that they have made a full enquiry into the affairs of the company. They form an opinion that the company has no debt or will it be able to pay its debts in full by selling their assets in voluntary winding up.

• it is made within 5 (five) weeks preceding the date of the passing of the resolution for winding up the company and it is delivered to the Registrar for registration before that date;
• it contains a declaration that the company is not winding up to defraud any person or persons;
• it is accompanied by a copy of the report of the auditors of the company prepared in accordance with the provisions of the Act, on the profit and loss account of the company for the period beginning from the date up to which the last such account was prepared and ending with the latest practicable date immediately before the making of the declaration and the balance sheet of the company made out as on that date which will also contain a statement of the assets and liabilities of the company on the specified date;
• when there are any assets of the company they should be accompanied by a report of the valuation of the assets of the company prepared by a valuer who is registered.

1. A declaration made under sub-section (1) will have no effect for the purposes of this Act.
2. When the company is winding up in accordance with a resolution passed within a period of 5 (five) weeks after the making of the declaration, but the debts are not paid or provided for in full then it will be presumed that until the contrary is shown that directors did not have reasonable grounds for their opinion under sub-section (1).
3. If any director of a company makes a declaration without having reasonable grounds for the opinion that the company will be able to pay its debts in full from the proceeds of assets sold in voluntary winding up he will be punishable with imprisonment for a term not less than 3 years which can extend to 5 years or with fine, not less than 50,000 rupees but which can extend to 3,00,000 rupees or both.

Physical destruction of securities 

After the buy-back of shares is over, the securities shall be destroyed physically within seven days of the last day of completion of buy-back of shares. The company is required to maintain a register containing the particulars of the securities bought back.

Further issue after buy-back

A company cannot make a further issue of securities within a period of six months if the company has resorted to the buying back of its securities. However, a company may make a bonus issue of shares and discharge its existing obligations like conversion of warrants, stock option schemes, conversion of preference shares or sweat equity into equity shares. Such restriction only applies to securities bought back. The company is free to issue any other type of securities. 

Register of bought back securities

A register has to be maintained which contains the particulars of the bought back securities including the consideration paid, the date of cancellation and other particulars. 

Return of buy-back

The company has to file a return with the Securities and Exchange Board of India and registrar after completing the process of buyback. It should be filed within thirty days from the date of completion. 

Penalty

If the company defaults in complying with the requirements of the section and rules made under it is a punishable offence. The company and any officer of the company will have to face imprisonment who is in default. The imprisonment may extend up to two years or fine which can be rupees fifty thousand rupees or both. 

Transfer of money to Capital Redemption Reserves Account

When a company purchases its own shares out of reserves or securities premium account, a sum equal to the nominal value of the shares purchased will be transferred to the capital redemption reserve account and details of the transfer will be disclosed in the balance sheet of the company. 

Prohibition of buy-back in certain circumstances

A  company does not directly purchase its own shares or other specified securities:

• It does so by the way of any subordinate company including its own subordinate companies;
• By way of  any investment company or group of investment companies; 
• If the company is in default, in the repayment of deposits accepted either before or after the commencement of this Act, interest payment thereon, redemption of debentures or preference shares or payment of dividend to any shareholder, or repayment of any term loan or interest payable to any financial institution or banking company. Provided that the buy-back is not prohibited if the default is remedied and a period of three years has elapsed after such default ceased to subsist. 

A company cannot directly or indirectly, purchase its own shares or any other specified securities in case the company has not met with the provisions of Sections 92, 123, 127 and Section 129. 

Conclusion 

A company has many components which are important for shareholders, members and other people who are affected by the decisions of the Company. The company may be a private, public or a one-person company. The amendments in the Companies Act, 2013 aimed at easing the process of doing business in India and improving corporate governance by making the companies more accountable.

The Act introduced new concepts such as Small Company, Dormant Company and Corporate Social Responsibility. The new act of 2013 has increased the limit of the number of members from 50 (fifty)  to 200 (two – hundred) in a private company. In the Companies Act, 2013 it was decided to adopt Table F as standard set of Articles of Association of the Company with relevant changes to suite the requirements of the company.

Further, every copy of Memorandum and Articles (MOA) were issued to members and they shall contain a copy of all resolutions/agreements that are required to be filed with the Registrar of companies (ROC). The Companies Act, 1956 Act provided the companies to elect an accounting year whereas The Companies Act 2013 Act eliminates the flexibility in having an accounting year different than 31 March. The 2013 Act provides that the accounting year for all companies should end on 31 March, with exceptions approved by the National Company Law Tribunal (NCLT). 

References 

• http://www.bareactslive.com/ACA/act2853.htm
• https://taxguru.in/company-law/faqs-share-warrants.html
• https://www.advocatekhoj.com/library/bareacts/companies2013/171.php?Title=Companies%20Act,%202013&STitle=Members%92%20right%20to%20inspect
• http://ebook.mca.gov.in/Actpagedisplay.aspx?PAGENAME=23277

To brace your knowledge on GST, please Click Here. 

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

The post Shares, Membership and Share Capital under Company Law appeared first on iPleaders.

This article is written by Pranjal Rathore studying in Maharashtra National Law University, Aurangabad pursuing B.A.LL.B.(Hons.). The private defence related to the body has been discussed in this article.

Introduction

The privilege of private defence is a significant right and it is essentially preventive in nature and not punitive. It is accessible even with hostility when the state help isn’t accessible. Section 96 of IPC doesn’t characterize the articulation ‘right of private defence’. It simply shows that nothing is an offence, which was done in the ‘right of private defence’. Section 97 is bestowed with the subject matter of private defence, which contains the right to secure the body or property of the people practising the right or of some other individual. The privilege may be practised against all offences influencing human body or endeavour or sensible danger of the commission of any such offence or offence of burglary, theft, mischief or criminal trespass and endeavours to carry out any of such offences in connection to the property. This privilege is accessible for the insurance of one’s own body or collection of some other individual or one’s property or the property of some other individual in the face of animosity concerning body or property against specified offences. Indian law on the right of private defence doesn’t necessitate that the defence must be identified with the individual whose body or property is topic of hostility. It offers right to everyone to protect anyone’s and everyone’s body or property against offences for which right of private defence, is given there is no opportunity to take plan of action to the assurance of the open specialists and the power utilized isn’t more than what is important to ensure the body or property of an individual.

Basis of the Right of Private Defence

To protect oneself is a characteristic sense in man which shares for all intents and purposes with each other creature. As said by B. Parke: “Nature prompts a man who is stuck to oppose, and he is legitimized in utilizing such an extent of power as will forestall a redundancy.” Obviously, the degree of acknowledgement of this privilege of Private Defence depends upon the limit and assets of the state to secure its subjects. The privilege of Private Defence is a profoundly prized and significant right conceded to the resident to secure himself and his property by effective obstruction against unlawful hostility. The essential guideline fundamental for the privilege of Private Defence is that when an individual or his property is looked with risk and prompt guide from the State machinery isn’t promptly accessible, that individual is qualified secure himself and his property. The law observes that each resident will hold his ground manfully against animosity.

No man is normal when he is assaulted by lawbreakers. To be sure the privilege of Private Defence must be encouraged by the residents of each free nation. The activity of the privilege of Private Defence should never be noxious or malicious. The privilege of Private Defence serves a social reason and that privilege ought to be generously construed. Such a privilege not exclusively will be a controlling impact on terrible characters yet it will empower the right soul in a free resident. There is nothing more debasing to the human soul than to flee in the substance of danger. Where the individual who is assaulted by the accused is not the aggressor, no privilege of Private Defence can be guaranteed by the accused by any stretch of the imagination. The idea of Private Defence lays on the rule that it is legitimate for an individual to utilize a sensible level of power to ensure him or another against any unlawful utilization of power which is coordinated towards him.

The privilege of Private Defence must be recognized from the precept of need. Law takes not of such outer impulse and believes the demonstration to be reasonable. The State has the obligation to shield its residents and their property from hurt. Nonetheless, conditions may emerge at the point when the guide of State machinery isn’t accessible and there is inevitable peril to an individual or his property. In such circumstances, an individual is permitted to utilize power to avoid the quick risk to his or another person’s individual or property. This is the right of Private Defence. Be that as it may, such a privilege or right is dependent upon certain limitations and not accessible in all conditions. The privilege of Private Defence isn’t accessible against community workers acting in the exercise of their legitimate forces.

The Right of Private Defence in India: Legislative Framework

Jeremy Bentham, an English Legal Luminary, once opined, “This privilege of defence is completely essential. The cautiousness of the Magistrates can never compensate for the watchfulness of every person on his own behalf. The dread of the law can never limit awful men so efficaciously as the dread of the aggregate to individual resistance. Remove this privilege and you become, in this manner, the associate of every single awful man.” This privilege depends on two standards;

1. It is accessible against the aggressor just; and
2. The privilege is accessible just when the defender engages sensible fear or reasonable apprehension.

The right to private defence of a resident, where one can for all intents and purposes take law in his own hands to shield his very own individual and property or that of others, is unmistakably characterized in Section 96 to Section 106 of the Indian Penal Code. Section 96 discusses things done in private defence that nothing is an offence, which is done in the activity of the privilege of the private defence. Right of private defence can’t be said to be an offence consequently. The privilege of self-defence under Section 96 is not outright, however, is obviously qualified by Section 99 which says that the right for no situation reaches out to the incurring of more damage than it is essential with the end goal of private defence. It is very much settled that in a free battle, no right of private defence is accessible to either party and every individual is answerable for his very own demonstrations. The privilege of private defence will totally clear an individual from all blame in any event when he causes the demise or death of someone else in the accompanying in the following circumstances:

1. On the off chance that the deceased was the genuine attacker, and
2. On the off chance that the offence submitted by the deceased, which occasioned the reason for the activity of the privilege of private protection of body and property falls inside any one of the six or four classifications identified in Section 100 and Section 103 of the Indian Penal Code.

Section 97 discusses the right of private defence of the body and of property:-Every individual has a right, subject to the limitations contained in Section 99, to protect; 

1. His very own body, and the body of some other individual, against any offence affecting the human body;
2. The property, regardless of whether moveable or steady, of himself or of some other individual, against any demonstration which is an offence falling under the meaning of burglary, devilishness or criminal trespass, or which is an endeavour to carry out burglary, theft, mischief for criminal trespass.

This section limits exercise of the privilege or right of private defence to the degree of supreme need. It must not be more than what is vital for guarding animosity. This section separates the right of private defence into two sections, for example, the initial section manages the right of private defence of the individual, and the second part with the right of private defence of property.

General Principles 

The two-judge bench of SC in Darshan Singh Vs State of Punjab and Another outlined the principles of Right of Private Defence as pursues:

1. Self-defence is the essential human nature and is appropriately perceived by the criminal statute of every single socialized nation. All free, law-based and enlightened nations perceive the privilege of private defence inside certain sensible points of confinement;
2. The privilege of private defence is accessible just to one who is all of a sudden stood up to with the need of turning away a looming peril and not of self-creation;
3. An insignificant sensible misgiving is sufficient to place the privilege of private defence into activity. At the end of the day, it is not fundamental that there ought to be a real commitment of the offence so as to offer ascent to one side of private defence. It is sufficient if the accused captured that such an offence is examined and it is probably going to be submitted if the right of private defence is not worked out;
4. The privilege of private defence starts when sensible fear emerges and it is seen with the duration of such fear;
5. It is unreasonable to anticipate that an individual under attack should adjust his protection bit by bit with any arithmetical exactitude;
6. In private defence, the power utilized by the accused should not be completely unbalanced or a lot more prominent than would normally be appropriate for the security of the individual or property;
7. It is all around settled that regardless of whether the accused doesn’t argue self-defence, it is available to consider such a request if the equivalent emerges from the material on record;
8. The accused need not demonstrate the presence for the privilege of private defence past a sensible apprehension;
9. The Indian Penal Code gives the privilege of private defence only when that unlawful or illegitimate act is an offence;
10. An individual who is in imminent and sensible peril or danger of losing his life or appendage may exercise self-protection or private defence perpetrate any mischief in any event, stretching out to death on his aggressor either when the assault is endeavoured or straightforwardly compromised.

Right of Private Defence Essentially a Defensive and not a Punitive Right

In the case of State Vs Chaturbhujh Singh, Hon’ble High Court observed the following; Self-defence is regarded and perceived as it is a fundamental right of an individual to shield his body, someone else, or property, particularly when the plan of action to open authority isn’t accessible. The said right is practised against the attacker. “The privilege to the private defence being a protective right is principally intended to be preventive in nature and not punitive.” It’s anything but a privilege of animosity or response or right to rebuff. The burden lies on the charged to demonstrate that he had no opportunity to take the plan of action to open authority before he practised the right to defend himself, another or property under Section 97 of the IPC. The punitive resolution perceives that each individual has a right, subject to the limitations contained in Section 99 of the IPC to secure his very own body, the body of some other individual against any offence influencing the human body. The individual additionally has right to safeguard his property or that of some other individual against any demonstration which falls under the meaning of burglary, theft, insidiousness or criminal trespass or endeavours to carry out burglary, theft, naughtiness or criminal trespass. Under Section 99, IPC states that privilege to private defence isn’t accessible where there is an ideal opportunity to have a plan of action for insurance from the open position and doesn’t stretch out to perpetrating more mischief than should be expected with the end goal of safeguard.

So, Right to private defence is a defensive right and not a punitive right was observed in the above-mentioned case.

Right of Private Defence not Available to Aggressors 

It is all around a settled legal position that the right of private defence is accessible as it were to safeguard against an animosity when the security of the state authority is not accessible gave the equivalent is practised inside the constraints recommended in Section 99 of the IPC and other related arrangements. It is a settled legal position that no assailant can guarantee right of private defence.

In Kishan v. Province of M.P., the pre-eminent Court held that the accused who was an attacker was not qualified for the right of private defence.

Free Fight 

No right to private defence is available in the case of the free fight when both the parties are willingly fighting with each other. In such a case right to private defence can not be given to either of the parties.

Right of Private Defence not Available Against Lawful Acts 

So as to verify the assurance of Section 99 of the Indian Penal Code, it is basic that the demonstration done or endeavoured to be finished by a local official must be: 

1. In compliance with common decency or in good faith;
2. Under colour of his office, and
3. Though that demonstration may not be strictly justifiable by law.

Good faith

Section 52 of the Indian Penal Code characterizes “good faith” as under:

“Nothing is said to be done or trusted in ‘accordance with some basic honesty’ which is done or accepted without due care and consideration”. Due care and consideration suggest a certified exertion to come to the truth and not the prepared acknowledgement on sick natured conviction. Nevertheless, the inquiry of good faith is an issue of certainty and must be assembled from the encompassing conditions. Good faith doesn’t require consistent dependability yet due care and alert which should for each situation be considered with reference to the general conditions and the limit and knowledge of the individual whose faith is being referred to.

In Kesho Ram v. Delhi Administration, the Supreme Court held that insusceptibility under Section 99, I.P.C. can be asserted by a local official, on the off chance that the demonstrations in good faith and under the shade of his office, despite the fact that the lawfulness of the demonstration could not generally be continued.

Colour of office

“Under the colour of his office” that is bonafide accepting that it was public worker’s obligation to play out the act whether he was acting legitimately or unlawfully in the release of his duty. The expression “colour of office” refers to unpredictable as distinguished from unlawful acts. In the event that what has been done will be done in compliance with common decency under colour of his office no privilege of private defence would emerge. It shows that the act was inside purview, that the locale has been practised sporadically or on deficient grounds. So, the act has been done wrongly however it may have been done properly.

Not strictly justifiable by law

Short of a sensible reason for fear of death or of intolerable hurt a public worker acting in compliance with common decency and for acts done under colour of his office is safe from any request of the right of private defence. On the other hand at the end of the day, the right of private defence can’t be practised against such public official. There is a huge improvement between acts which is ultra vires from the earliest starting point and one which isn’t strictly justifiable by law. The words “not strictly justifiable by law” are not proposed to fix the need of jurisdiction however just an incorrect exercise of it.

Section 99 is intended to secure a local official, what’s more, to confine the measure of resistance which might be offered to him. Section 183 of the I.P.C. then again isn’t a section for the assurance of the local official, yet empowers him to attack and prosecute anyone who opposes the taking of property by legitimate position. It is one thing to give that a local official who is acting bona fide in the activity of his office however in an overabundance of his expert truth be told, is to be shielded from acts of savagery. Protection from the act of a public official acting true blue however in an overabundance of his position may well offer ascent to some charge in the idea of attack, yet it can’t bear the cost of any establishment for prosecution under Section 183 of the I.P.C. It applies to protection from the taking of property by the legitimate authority of a local official, and there are no words in that section, as there are in Section 99, I.P.C. broadening the activity of the area to acts which are not strictly justifiable by the law. “Strictly” in Section 99 of the  I.P.C. has been intentionally embedded by the governing body to show that this section was not expected to apply to situations where the act was completely unjustified. It doesn’t expand to situations where there is a finished need of jurisdiction. 

In Jograj Mahto v. Emperor, the Patna High Court saw that it has been held in a progression of cases that Section 99 of the  I.P.C. applies just where there is locale to do an act yet that ward has been, in certain regards, illegitimately worked out. The articulation utilized in this Section is “strictly justifiable by law”. “Strictly” which more likely than not been purposely embedded by the legislature shows that this section was not expected to apply to situations where the act was completely unjustified. It doesn’t reach out to situations where there is a finished need of jurisdiction. 

Right of Private Defence Against Acts of Infants, Insane, Intoxicated Persons

Infancy

Section 82 incorporates an act of a youngster beneath seven years old. Nothing is an offence which is done by a kid under seven years old. Assume a youngster beneath seven years old, squeezed the trigger of the weapon and caused the death of his dad, at that point, the kid won’t be at risk.

Section 83 incorporates an act of a kid over seven and under twelve of juvenile comprehension. Nothing is an offence which is done by a youngster over seven years old and under twelve, who has not yet accomplished adequate development of comprehension to pass judgment on the nature and repercussions of his lead during that event. For example: Suppose an offspring of 10 years slaughtered his dad with a firearm in the shadow of youthfulness, he won’t be at risk on the off chance that he has not accomplished development.

In Krishna Bhagwan v. State of Bihar  Patna High Court maintained that if a youngster who is accused of an offence during the act, has achieved the age of seven years or at the hour of choice the kid has accomplished the age of seven years can be sentenced on the off chance that he has the comprehension and information on the offence submitted by him.

Insanity

Under Section 84 of the IPC nothing is an offence which is done by an individual who at the time of performing it, by reason of unsoundness of brain, is unequipped for knowing the idea of the act, or that he is doing what is either off-base or in opposition to the law. For example, A, who is crazy or unsound, executed B with a blade, believing it to be a fun game, won’t be at risk for B’s demise as he didn’t know about the idea of act and law. He was unequipped for intuition sensibly.

In Ashiruddin Ahmed vs The Emperor, the charged Ashiruddin was told by somebody in heaven to forfeit his very own child,  aged 4 years. Next morning he took his child to a mosque and murdered him and afterwards went directly to his uncle, however finding a chowkidar, took the uncle close by a tank and revealed to him the story. The Supreme Court opined that the accused can guarantee the defence as, despite the fact that he knew the idea of the act, he didn’t have a clue what wasn’t right.

Intoxication

Section 85 says that nothing is an offence which is finished by an individual who at the hour of doing it, is, by reason of intoxication, unequipped for knowing the idea of the act, or that he is doing what is either off-base or in opposition to law, given that the thing which intoxicated him was controlled automatically without his will or information. For example, ‘A’ drank liquor given by a companion believing it to be a virus drink. He got intoxicated and hit an individual on driving his vehicle back home. He won’t be at risk as liquor was regulated to him without his will and information.

Section 86 applies to situations where an act is done, is not an offence unless done with a specific information or aim, an individual who did the act in condition of intoxication, will be at risk to be managed as though he had a similar information as he would have had on the off chance that he had not been intoxicated, unless the thing which intoxicated him was directed to him without his insight or without wanting to.For example, An individual, intoxicated, cuts someone else under the impact of liquor which was regulated to him in the gathering without wanting to, won’t be subject. In any case, on the off chance that that individual had wounded that individual under intentional inebriation, at that point he will be subject.

In Babu Sadashiv Jadhav Vs State of Maharashtra, the accused came home drunk and poured lamp fuel on his wife and set her ablaze and lit in the fire. The court held that, he proposed to cause substantial damage which was probably going to cause her death under Section 299.

Burden of Proof

The burden of proof that the act being referred to was in the exercise of the right of private defence as for both bodily offences just as an offence against property is on the denounced.

In Rizan and another v. State of Chattisgarh, the court saw that the question, whether an individual acted in exercise of the right of private defence is needy on the encompassing conditions of the case. The court additionally decided that it is well settled that it isn’t fundamental for the accused to argue in such a large number of words that he acted in self-defence. In a guaranteed case the court can think of it as regardless of whether the accused has not taken such a request however such an end is perceivable from the accessible material on record.

Under Section 105 of the Indian Evidence Act, 1872 the burden of proof is on the accused, who takes the request of self-defence to demonstrate the equivalent. The inquiry in such a case would be a question of evaluating the genuine impact of the prosecution proof and not an inquiry of the accused releasing any weight. Where the privilege of private defence is argued, the protection must be a sensible and plausible form, fulfilling the court that the mischief brought about by the denounced was fundamental for either averting the assault or for hindering further sensible fear from his side. The burden of proof of self-defence would stand released by appearing prevalence of probabilities for that request based on material on record. It can’t be expressed as an all-inclusive guideline that at whatever point there are wounds on the body of the accused people, an assumption can fundamentally be drawn that they had caused wounds in the exercise of their privilege of private defence.

In any case, insignificant non-clarification of the reason for those wounds by the prosecution may not influence the prosecution case in all cases. The rule applies to situations where the wounds continued by the accused are minor, furthermore, shallow or where the proof is so clear and apt, so free and impartial, so likely, predictable and trustworthy that it far exceeds the impact of the exclusion with respect to the prosecution to clarify the wounds. The courts have seen that a request for private defence can’t be founded on construes and hypotheses. So as to discover whether the privilege of private defence is accessible to the accused, the whole occurrence must be inspected with care and seen in its legitimate setting. The wounds got by denounced to the advent of risk to his security, the wounds brought about by the denounced and the conditions regardless of whether the accused had the opportunity to have a response to the open experts for security are on the whole pertinent elements to be considered. In the above-mentioned case, the court held that the accused hurrying to the house, getting the table and assaulting the deceased are in no way, shape or form of usual result. These acts bore the stamp of a structure to murder and thus it removed the case from the domain of right of private defence.

Limits of the Right of Private Defence

The privilege of private defence of an individual articulated in the matter of its degree under Section 97 IPC it is explicitly dependent upon the confinements contained in the succeeding sections, especially Section 99. Section 99 sets out the points of confinement of this privilege of private defence. The three significant restrictions set down by Section 99 are: 

1. That there is no privilege of private defence against the act of a local official or any individual acting under his guidelines if the act of the local official or the individual acting under his directions is bonafide and legal however not carefully legitimate in law and doesn’t cause sensible fear of passing or terrible hurt;
2. That there is no opportunity to have a plan of action to the insurance of the open power;
3. That the accused must not utilize more power than is fundamental in the activity of right of private defence.

Acts of Public Servants

The law concerning public servants might be condensed as stated below:

1. So long as a public servant acts lawfully in the activity of his official forces, there is no privilege of Private Defence against him, for the straightforward explanation that his act isn’t an offence;
2. If his acts are entirely unlawful, he is in a similar situation as any private individual and isn’t qualified for any extraordinary security;
3. But assurance is stretched out even to those acts of local officials or of people acting under their expert for heading which is not strictly justifiable and however is not completely approved given the accompanying conditions are fulfilled: 

1. I) That the act doesn’t cause sensible apprehension of death or of shocking hurt;
2. ii) That the act is done in accordance with some basic honesty;

iii) That the act is done under colour of his office;

1. iv) That the inconsistency doesn’t violate the breaking point of being ‘strictly justifiable by law.’

Right does not Extend to Causing more Harm than Necessary

Another limitation on the activity of right of Private Defence is that in no case this right ought to be utilized to deliver more harm than that is essential for the reason behind the resistance. The resistance extended must not be more noteworthy than is essential for self-defence. It must be proportionate to and similar to the quality and character of the act it is expected to meet. It is in this way, in light of the fact that the privilege is for the insurance and not for decimation. It stipulates that the privilege of Private Defence for no situation reaches out to the delivering of more damage than it is important to exact with the end goal of defence.

In Mohinder Pal Jolly v. State of Punjab, there was a question between the labourers and the administration over interest for compensation. The labourers tossed brickbats at the industrial facility. The proprietor of the industrial facility turned out and terminated with a pistol slaughtering one specialist. The Court held that the proprietor surpassed his right of Private Defence in murdering the labourer. Essentially, when an accused was assaulted by the expired and the accused cut him with the blade in the heart; it was held that the accused surpassed his ideal for Private Defence.

In Baljit Singh v. State of Uttar Pradesh, the accused party was in the ownership of some contested land. The complainant’s party trespassed into the land outfitted with lathis. The denounced party attempted to shield the land from trespass, accordingly of which the accused assaulted the expired and caused 72 wounds which brought about the death of expired. It was held that the accused surpassed his privilege for Private Defence.

In Onkarnath Singh v. State of Uttar Pradesh, there was an episode of hooking between the denounced party and the complainant party. After some time, the complainant party began escaping. In any case, the blamed party pursued them and made a lethal attack. The Supreme Court held that the two occurrences, for example, the occurrence of the real grappling between the parties and the lethal attack from that point, were two separate occurrences both in the purpose of time and separation. There was nothing to legitimize the dangerous assault. The power utilized was out of extent to the alleged threat, which never again existed from the complainant party. 

The inquiry whether the right of Private Defence practised by an accused is in abundance of his right and whether the accused has caused more mischief than should be expected, is completely an issue of truth to be settled on the conditions of each case. The exercise of the right of Private Defence should never be noxious or malicious. A malevolent act by an individual suggests that the act was not accomplished for securing himself or his property yet with the thought process of taking revenge. The right doesn’t enable a person to pursue and murder his aggressor who is fleeing from the scene. However, there can be the question that in making a decision about the direction of an individual who acts that he had the privilege of Private Defence, remittance has fundamentally to be made for his inclination at the applicable time. When an individual is looked with impending danger of life and appendage of himself or of others, he isn’t expected to say something brilliant scales the exact power expected to repulse the risk. The individual confronting a sensible apprehension of danger to him is not required to regulate his barrier bit by bit with any number juggling exactitude of just that much which is required to the thinking about a man in standard occasions or under ordinary conditions.

When the Right of Private Defence of Body Extends to Causing Death

No state has such a great amount of asset to put a cop with each person. Accordingly, the Indian Penal Code perceives an individual‟s right to secure body and property of himself and any other individual against a looming risk when the state help can’t be received and in this manner gives the right of Private Defence to ensure them under Section 96 to Section 106 of the Indian Penal Code (IPC). This right is given to guarantee the security of the residents and an individual isn’t dependable in law for his activities. This right must be practised when the conditions legitimize it and not something else. Likewise, this right is dependent upon limitations given under Section 99 of the IPC. The right of Private Defence of the body reaches out to causing of intentional passing of the attacker in seven conditions that have been identified beneath. Additionally, the assault under the seven conditions isn’t just an assault however a bothered type of attack. It implies assault combined with some other unjust act;

1. Such an assault as may sensibly cause the apprehension that demise will generally be the result of such attack;
2. Such an assault as may sensibly cause the dread that intolerable hurt will generally be the outcome of such assault;
3. An assault with the expectation of committing rape;
4. An assault with the goal of satisfying an unnatural lust;
5. An assault with the goal of  kidnapping or abducting;
6. An assault with the goal of improperly binding an individual, under conditions which may sensibly make him capture that he will not be able to have a plan of action to the open experts for his discharge;
7. An act of tossing acid or an attempt to toss or regulate acid attack which may sensibly cause the anxiety that grievous hurt will generally be the outcome of such an act.

The seventh provision managing acid attack has been included by the Justice Verma Committee through the Criminal Law Amendment Act, 2013. Cases are utilized to examine the right of private defence under Section 100 and hence each condition is additionally clarified with the assistance of applicable case laws.

Reasonable Apprehension of Death or Grievous Hurt Sufficient

The first and the second clause of Section 100 sets down and stipulates that the right of Private Defence to the degree of causing death is accessible when the attack done by the aggressor sensibly cause the anxiety that death or grievous hurt will generally be the result of such assault. Such an apprehension must be genuine and not be imagined and the danger must be imminent. And on that occasion, the accused can go to the degree for causing the death of the attacker in the activity of right of Private Defence despite the fact that no genuine damage may have been perpetrated. The burden is on the accused to demonstrate that he had a right of private defence which reached out to causing death.

James Martin v. State of Kerala set out that there are various elements that should be considered to discover whether the right of private defence is accessible or not. Factors, for example, wounds got by the accused, the advent of risk to his security, wounds that are brought about by the denounced and furthermore the conditions wherein the wounds were caused are taken into consideration. It is hard to anticipate that an individual should measure the power required. Such circumstances are sober-mindedly seen, remembering ordinary human response and conduct.

Assault with the intention of

committing rape

or Gratifying unnatural lust

The third and the fourth provision of Section 100 stipulate that the privilege of Private Defence to the degree of causing death is accessible in instances of assault with the expectation of submitting assault of satisfying the unnatural desire or committing rape. This right, being a preventive right should be used with most extreme consideration and alert. Since the burden is on the accused to demonstrate that he has practised his privilege of private resistance, he need not demonstrate it, however just on the prevalence of likelihood that makes question in the brain of the judge. 

Supreme Court in the instance of Yeshwant Rao v. State of Madhya Pradesh explains the position of law as respect to the third and the fourth provision of Section 100. For this situation, the expired attempted to have sex with the little girl of the accused while she went to the toilet at the backside of her home. The accused, on observing the little girl being assaulted hit the deceased with the spade and the deceased died as an outcome. The Supreme Court held that the accused was supported in practising the privilege of Private Defence of the body against the perished and subsequently was prosecuted. Here it tends to be seen that the assault that occurred on the girl was adequate to make sensible apprehension in the brain of the accused and in this way his demonstration was supported under Section 100. The privilege of private defence was practised by the accused to secure the body of another. 

In Bhadar Ram v. State of Rajasthan, where the litigant spared her widow sister-in-law from the grip of Nand Ram and assault him with gandasa while he was running was given the exemption under provision third of Section 100 of the IPC. For this situation, the appellant’s sister-in-law was a widow woman who was caught by Nand Ram in the dead hour of the night so as to harm her modesty for submitting assault. Hearing her shout, the appealing party came arranged with a gandasa and assaulted Nand Ram while he was attempting to rape the widow woman. It can be seen here that there was sensible dread of the threat to the body of appellant’s sister, therefore the privilege of Private Defence for this situation was properly profited against the danger that was genuine, present and inevitable.

Assault with the Intention of Kidnapping or Abducting

The fifth condition of Section 100 IPC states that the right of private defence is accessible when the assault is made with the expectation of kidnapping or abducting. Kidnapping is an offence against the human body and happens when an individual is constrained to go from any place. Whoever, by power, propels, or by any deceitful methods instigates, any individual to go from wherever is said to steal that person. Abduction given under the fifth condition of Section 100 of the IPC must be taken in its plain importance as specified in Vishwanath v. State of Uttar Pradesh. In  this case, the accused’s sister left her husband’s house and was dwelling with her dad and sibling. At some point, the deceased spouse went to the house and attempted to take his wife with him to which she revolted and got hold of the entryway. In the meantime, so as to shield her sister from the deceased, the accused took out a blade and wounded the deceased spouse. As an outcome, he died. The accused argued that he should be given the advantage under the fifth provision of Section 100. The Allahabad High Court gave the judgment for the litigant and held that the accused won’t be given the privilege of private defence as no there was no other plan combined with abduction. Supreme Court dismissed the conflict and held that the word ‘abduction’ in condition fifth must be perused in a plain significance as characterized under Section 362 of the IPC and in this way acquitted the accused. It held that this privilege is accessible for the abduction and, as it were when constrained by power. In the second classification of abduction by misleading methods given under Section 362, Private Defence isn’t accessible as there is no impulse by force. The Supreme Court said that at the time the blamed mediated, his sister was persuasively constrained to go from the spot of the accused and in this way, there was an assault with the aim of kidnapping under Section 100, condition fifth. The accused accordingly had the ideal for the private defence that could even stretch out to causing the death of the attacker.

Assault with the Intention of Wrongful Confinement

The sixth provision of Section 100 gives the right of Private Defence reaching out to causing death is only accessible when an assault is done with the expectation of illegitimately keeping an individual or wrongfully confining him. Nonetheless, so as to benefit this in that spot, must be proof that there was an assault and that was with the expectation of wrongful constrainment. Additionally, it must be demonstrated that the conditions were with the end goal that caused sensible fear in the brain of the accused that he won’t have the option to take the plan of action to the public authorities for his release. Even if the demonstration fulfils all these requirements, it needs to fall under the limitations referenced in Section 99 of the IPC. 

As expressed in Abdul Habib v. State, when an individual is unjustly captured and taken to the police station for being given over to the police, can’t be said to have sensible dread that he will not have a plan of action to the public authorities for his discharge. For this situation, the appealing party attempted to take away the bike of Swaran Singh. Swaran Singh endeavoured to stop him and grasped his bike and the appealing party so as to spare himself gave a cut blow right elbow with a blade and fled. Swaran Singh raised a shout and numerous individuals came for the escaping appealing party. Naresh Kumar is said to have heard the trademarks that the litigant must be captured and in this manner ran towards him yet the appealing party, so as to dodge his capture, struck up his blade and wounded him. Naresh Kumar endeavoured to submit an assault in any case, the expectation was to capture the appealing party and take him to the police headquarters. The inquiry under the watchful eye of the court was, whether this act of capturing added up to illegitimate restriction or wrongful constrainment or wrongful confinement of the person. Wrongful Confinement implies willfully deterring any individual in order to keep that individual from continuing toward any direction in which that individual has an option to proceed. The court held that the expectation was a greater amount of improper repression to let him move just inside the breaking points of the spot of capture. It was too held that that the conditions were not with the end goal that any sensible individual would have captured that he would not have the option to verify the assistance of the open experts in acquiring his discharge. There was no right of Private Defence of individual given for this situation. Likewise, the court saw that for no situation can an individual perpetrate more mischief than is important to avoid the risk. For this situation, it can’t be said that the appealing party had surpassed the right since he had no right of Private Defence in any case.

Act of Throwing or Administrating Acid

The seventh provision under Section 100 says if there is an act of tossing or overseeing corrosive or an endeavour to toss or administer acid that causes sensible fear in the brain of the accused that terrible hurt will be caused, at that point the privilege of Private Defence to the degree of causing death will be available. This provision dealing with acid assault has been included by the Justice Verma Committee through the Criminal Law Amendment Act, 2013. According to the Law Commission of India, there was no particular provision managing acid assault and henceforth cases were enlisted under various sections of Indian Penal Code especially those managing hurt, grievous hurt by destructive substances and endeavour to murder and murder. The Committee recommended that these conditions specified in that ought to likewise reach out to one side of private defence if there should arise an occurrence of an acid attack, which was made an offence under Section 326A according to the Criminal Law Amendment Act, 2013.

The administration needed to give a stringent law to the general population and in this manner included acid attack as explicit offences under IPC. Corrosive assault offenses were rarely given any explicit arrangements under IPC before the correction. Since acid falls under the class of destructive substance, subsequently, offences identifying with it fell under Section 324 and Section 326 that deals with terrible hurt by “destructive substances” which incorporates acids. Likewise, the provision of Section 100 gives the right of private defence to the degree of causing death when there is a sensible apprehension that grievous hurt will generally be the consequence. In this way, passing by this Section, sensible worry of horrifying hurt by a corrosive substance is effectively secured under the second provision of Section 100. In any case, this has demonstrated to be a deficient clarification for excluding hurt by acid as grievous hurt under Section 320. The provision was included with the affection of giving the corrosive or acid attack a particular heading thinking about the augmentation in the quantity of such cases.

Commencement and Continuation of the Right of Private Defence of Body

Section 102 and Section 105 deals with initiation and continuation of right of private barrier of body and property separately. The privilege of private defence of body starts, when a sensible dread of the threat to the body emerges from an endeavour or danger to submit the offence, in spite of the fact that the offence might not have been submitted and keeps going till such sensible fear lasts. In the event that in the wake of supporting genuine damage there is no misgiving of a further threat to the body or property then clearly the privilege of private defence would not be accessible.

State of Orissa vs Rabindranath

Basically, in this case, the Orissa High Court has summarised the Right of Private Defence as follows:

1. It is the obligation of the State to shield an individual’s body and property. Similarly, it is the obligation of each individual to take cover under the machinery of the state. In any case, that such a state help isn’t accessible, he has the privilege of private defence.
2. Regardless of whether an individual was permitted to utilize his privilege of private defence without the plan of action of public authorities relies on the idea of the risk of inevitable threat. The privilege of private defence of the property begins when a sensible dread of the threat to the property initiates.
3. After the genuine peril or danger has initiated, the topic of applying for the security of the public authorities doesn’t emerge.
4. The law doesn’t anticipate that an individual should flee for assurance under public authorities when somebody assaults on an individual possessing the property. The minute sensible apprehension of upcoming peril to the property begins, the privilege of private defence is accessible to the person. There is no obligation on the accused to run for insurance for public authorities.
5. At the point when an individual under possession is assaulted by trespassers, he has the right to drive away from the aggressors by use of power. At the point when the individual who is in physical ownership of the property is seized by the trespasser, he is entitled in the exercise of the privilege of private defence to drive away such trespasser gave that the trespasser has not gotten settled belonging over the property.
6. On the off chance that the accused in spite of the fact that has the physical belonging for the property however at the hour of assault, on the off chance that he is absent at the spot, is qualified to practice his entitlement to drive attacker to not to go into the property or to dismiss the assailant when he comes to realize that the trespasser is getting into ownership of his property or is endeavouring to do as such.
7. In the event that there is an approaching risk to the property and the individual under possession cause adequate damage, he is qualified for shield the act of assailant without requesting the guide of the state.
8. Because the area of police headquarters was not away from the wrongdoing scene, it doesn’t imply that an individual can’t practice his privilege of private defence. This can be considered on the off chance that it is demonstrated or proved that could have been auspicious and successful. The viability of the police help relies upon the likelihood that convenient data to the police and getting opportune help from the police was conceivable and successful.
9. In managing instances of private safeguard, a differentiation must be made between implementing a privilege and keeping up the right.
10. On the off chance that the assailant was getting ready for the assault, this doesn’t imply that the other individual has no privilege of private defence. It must, in any case, be demonstrated that there was no opportunity to take the plan of action of open specialists.

Conclusion

Self-defence is a rule of Criminal law and in this manner, the state gives people the right to ensure and protect themselves. The privilege of Private Defence of the body goes under the reasonable defence where the attention is more on the demonstration of the person. The advantage out of the conduct exceeds the malevolence of the offence. Nonetheless, the Courts while giving the defence under Section 100 have been extremely cautious. The burden is on the denounced to demonstrate that he had practised his privilege of private defence. The conditions that power the people to submit the offence are seen. The state has given us a few rights to shield ourselves and our property from looming risk when the state isn’t accessible to do likewise. This privilege is additionally accessible to ensure the body or property of some other individual. It reaches out to causing of death of the attacker in specific conditions. Be that as it may, there must be sensible anxiety or fear of genuine or impending danger to benefit this right. Section 100 is an extremely crucial section under the Indian Penal Code. It gives the privilege to murder a person. In any case, it additionally puts down a few limits that should be pursued to benefit this right. The power utilized must not exclusively be fundamental to stay away from the assault yet in addition proportionate to the damage undermined.

References

• Indian Penal Code, 1860, Bare Act.
• Law Commission of India, 226th report, 2009.
• Justice Verma Committee Report on Criminal Law Amendment Act, 2013.
• http://www.legalserviceindia.com/article/l470-Private-Defence.html
• https://www.srdlawnotes.com/2017/05/right-of-private-defence-section-96-to.html
• https://www.omicsonline.org/open-access/private-defence-a-look-at-definitional-aspects-and-burden-of-proof-2169-0170.1000122.php?aid=26081
• http://lawcommissionofindia.nic.in/reports/report226.pdf
• https://www.legalhelplineindia.com/law-against-acid-attacks/
• https://blog.ipleaders.in/acid-attack-and-the-law-in-india/

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

The post Private Defence Related to Body Under IPC appeared first on iPleaders.

This article is written by Nishtha Pandey (batch 2023), student of Dr. Ram Manohar Lohiya, National Law University, Lucknow. This article seeks to give some insights on Consideration as per the Indian Contract Act, 1872.

Consideration is defined under Section 2d of the Indian Contracts Act, 1872. It is defined as when the promisee at the request to the promisor has:

• Done or abstained from doing something,
• Does or abstains from doing something,
• Promises to do or abstain from something,

Then such act or abstinence is called consideration.

Why do we need consideration

Only the promises that are backed by consideration are enforceable because any promise made without any obligation is usually very rash and without any sort of deliberation. The reason for making consideration an essential part of a contract is because it levies a sort of burden on the parties to fulfil the terms of the contract. For Example, if, A promises to give B a car without B doing or abstaining to do anything for it, makes the promise by an unenforceable. This will be a gift and not a contract per se.

Legal requirements as to consideration

• Must move at the desire of the promisor- Section 2d of the Indian Contract Act, 1872, clearly mentions that the consideration should be at the desire of the promisor if the consideration is made at the will of the third person or is not according to the promisor then it is not a good consideration.

• Can move from the promisee or another person- Unlike English law in which the consideration must move at the desire of the promisor, in Indian law as long as there is consideration it is immaterial as to who has furnished it. Moreover, in the case of Chinnaya vs Rammyya the consideration can also move at the desire of the third party but only in the condition where he is the beneficiary of the contract. 

• Can be an act, abstinence or even a promise- If the promisee does something or abstains from doing something for the promisor, at his desire, then it will be a good consideration.
• Can be past, present or future:

PAST- When the consideration is given before the promise was made. For example- A saves B at the latter’s desire. B after a month promises to pay A. the act of A will amount to past consideration for the payment made by B.

PRESENT- When the consideration is given at simultaneously to the promise made, then this is present consideration or executed consideration. For example- cash sales.

FUTURE- When the consideration of the promise made is to be passed at a future date then that is called future or executory consideration. For example- A promises to pay B, when the latter will fetch newspaper for him.

• Consideration need not be adequate- It is not necessary that the consideration is equal or adequate for the promise made. However, it is mandatory that the consideration should be something in which the law attaches some value. It is for the parties to decide the value of the consideration and not a court of law. For example- A sells table to B and B gave him rs 500. It will be difficult for the court to ascertain the value of the table, so if A is satisfied with the amount given then the consideration is valid.

• Should be real- although the consideration need not be adequate it should be real and not illusory. The consideration should not be physically impossible, legally not permissible or based on an uncertain event or condition.

• Should not be something which the promisor is already bound to do- a consideration to do something which the promisor is already required to do is not a good consideration. For example- the public duty done by a public servant.
• Should not immoral, or against the public policy of the state- under Section 23 of the Indian contract it is given that consideration should not be illegal, immoral or against public policy. the court should decide the legality of the consideration and if found to be illegal than no action on the agreement should be allowed.

Stranger to a contract

It is a general principle that the contract can be enforced only at the behest of the parties to the contract. No third party could enforce it. It arises from the contractual relationship between the two parties. However, Lord Dennings has criticised this rule a number of times as this rule has never benefited the third party whose roots go deeper in the contract. This rule has two consequences-

• No third party could enforce the contract.
• The contract between the parties cannot levy an obligation on any person other than those party to a contract.

Exception

There are three exceptions to this rule:

• Marriage settlements- When an agreement is made with regards to marriage, family settlement or partition and is made in such a way that it benefits another person who is not a party to the contract then he may sue for the enforcement of the contract.

• Covenants running with the land- in cases of the contract of property the purchaser will be bound by all the conditions and covenants of the land, even though he was not a party to the original contract. 
• Acknowledgement of estoppels- in case the terms of the contract require that an agreement has to be made with the third party, then this has to be acknowledged. This acknowledgement could be expressed or implied. This exception covers the areas where the promisor either expressly or by conduct has posed himself to be an agent.

Past consideration

It is the consideration which is made before the agreement. It is something which the promisee has already done at the desire of the promisor. 

For example- A rescues B. B promises to give him Rs. 1000 for the same. Here it is a past consideration as the act of rescuing happened before any agreement. 

In English law past consideration is no consideration. If A saves B and B promises him to pay but later refuses to do so, then under English law, A cannot enforce it in a court of law. B can give him the money, but that would not be considered as a past consideration but it would be by way of gratitude. This, however, causes a lot of inconveniences, as if a person would pay for the past act then he shall have to recognise the past consideration which is not valid under English Law. the report of the law commission of England proposes to remove this rule.

In India however, there is no compulsion to follow the English law and past consideration is regarded to be valid. 

Past act at request good consideration

The past act done for consideration would be a good consideration. In the case of Lampleigh vs Brathwait, in which the defendant requested the plaintiff to help him get a pardon from the king. The plaintiff put in efforts, travelled up to the king etc.his request was not sanctioned. The defendant promised to pay him for the same. Later he refused to do so. Plaintiff sued him in a court of law. The court held that the defendant must pay the plaintiff because he has himself requested him to help him. Hence the act of the plaintiff, although done in the past, would still be regarded as a valid consideration.

Past voluntary service

If a person renders voluntary services without any request or promise from another and the person receiving the services makes a promise to pay for the services, then such a promise is enforceable in India under Section 25(2) of the Indian Contract Act, 1872 which states: ‘‘An agreement made without consideration is void unless it’s a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promisor was legally compellable to do; or unless.’’

For Example- Peter finds Noah’s wallet on the road. He returns it to him and Noah promises to pay Peter Rs 500. This is a valid contract under the Indian Contracts Act, 1872.

Past service at request past and executed

An act done before the giving of a promise to make a payment or to confer some other benefit can be a consideration for the promise. The act must have been done at the promisor’s request, the parties must have understood that the act was to be remunerated either by a payment or the conferment of some other benefit, and payment or the conferment of a benefit must have been legally enforceable had it been promised in advance.

Executory Consideration

Consideration may be something which is done or in the process of being done. It also consists of an act which is promised to be done in the future. There may be promises which form the consideration for each other. Before the completion of a promise which forms a part of the consideration of the other promise, then such consideration is called executory consideration.

For example- if A promises to pay B when he will sell the goods to him. Until time A does not get the goods, the consideration is executory, when he got the goods and paid for the same, the consideration is executed. If B does not sell the goods then A could also breach for the suit.

Value need not be adequate

Consideration is defined as an act of abstinence from doing something, at the desire of the promisor. The consideration should be of some value in the eyes of law, but the courts have been very liberal in interpreting and anything of value by the parties is regarded as a valid consideration. 

The value need not be adequate for the promise made. The court will not enquire whether the value of the consideration is equivalent to the promise that is made. If the parties agree to the value of the consideration then it is sufficient. This rule is applicable as per Indian and English law.

Inadequacy as evidence of imposition

The inadequacy of consideration is regarded to check whether the consent is freely given. For example- A agrees to sell his property worth Rs 1 crore to B for Rs 10,000. denies that his consent for the sale of the property was not freely given. A party seeking to set aside the transaction based on the inadequacy of the consideration must show that he was unable to understand it or was by way of some imposition. If the court is satisfied that the contract was freely entered into then it would not matter whether the consideration was adequate or not.

Where the consideration is inadequate it could be because of fraud, coercion, mistake etc. the same would be the case when the consideration is so low that it shows some serious inequality of the bargaining power. 

Forbearance to sue 

The most usual form of forbearance is the forbearance to sue within a reasonable time. This promise to forebear can be expressed or implied from the circumstances. Sometimes it is very difficult to construe from the fact whether it was an agreement to forbearance (which is not a good consideration until not backed by the request of the promisor) or actual forbearance. Hence to clarify in the case Bittan Bibi vs Kuntu Lal, it was held that the promise of forbearance should move at the desire of the promisor.

Forbearance to sue on a claim which is void is not a consideration. Moreover, abstaining to sue could be valid consideration only when the person who is abstaining, has a valid right to sue. Also, it is not necessary to specify the time for such abstinence. A request for forbearance without specifying the length is understood to be a forbearance for a reasonable time.

Compromise good irrespective of merits

It is an important kind of forbearance which is undertaken by way of a compromise of a doubtful claim. The important element here is to ascertain the limits of which the compromise will function and will still be a good consideration. The difference between forbearance and compromise is that in the latter claim is not admitted and the claimant promises to abandon the claim.

The abandonment of a doubtful or disputed claim is a good consideration even if it later turns out to be unsustainable. The test is to find whether the person thought in good faith and he has a case which he was abandoning. A compromise of a claim arising out of an illegal contract is insufficient as a consideration unless the compromise arises out of a dispute of fact as to whether the contract is illegal.

Performance of existing duties

Performance of legal obligations

The performance of what one is already bound to do, either by general law or by a specific obligation to the other party, is not a good consideration for a promise, because such performance is not a legal boundation a person. Moreover, on the performance of a legal obligation, a reward from the private organisation is taken then it would be against the public policy. It should be ensured that the legal duty actually exists. But if a man who already has a legal obligation undertakes to do something or to do something in any of the admissible way i.e. the person has forgotten the choice that the law allows him to take is a good consideration.

Moreover, the actual performance of an existing duty may confer a factual benefit, because on actual performance the promise is saved of pursuing a legal remedy for its breach. 

Performance of contractual obligations

Pre-existing contract with the promisor

Usually, the performance of a duty already owed under the contract to the promisor is not good consideration. Even in terms of public policy, it is necessary to discourage a tendency to use improper pressure or threatening to break one’s contract unless another party complies by paying or promising to do so. The promisee must find it beneficial to perform the promise immediately rather than paying for its breach which may not fully compensate the promisor.

Promise to pay less than the amount due

A promise to pay less than what is due in the contract cannot be regarded as consideration. This rule was given in Pinnel’s case. The court held that a smaller amount cannot in whole satisfy a larger sum. However, a gift of the horse, robe etc can be considered as a good satisfaction because under certain circumstances it is considered to be more beneficial than money, otherwise, the person would not accept it.

This holding was criticised in a way wherein several cases the jurist held that if the party is content to receive any amount be it less than the sum and he is satisfied by the same, then it should be considered to be a valid consideration. However, in spite of all this criticism, the Pinnel’s Case was applied unanimously in various circumstances.

Exceptions to the rule in Pinnel Case

Part-payment by the third party

The part payment by the third party may be a good consideration for the whole debt.

Composition 

Payment of a lesser amount would be a good consideration for the larger sum where this is done for some already entered compromise. 

Payment before time 

Payment of a lesser sum before the time or in a different mode, a different place than agreed by the parties or the gift of a horse or robe etc is a valid satisfaction of the goods.

Promissory estoppel

The doctrine of promissory estoppel is considered to be a departure from the doctrine of consideration. A promise that was made in future is estoppel. If the promise is made with the intention that it would be acted upon and it was in actuality acted on, then the promisor cannot be allowed to back out and it could be enforced in a court of law as well.

Promissory estoppels differ from traditional contract theory. It protects reliance. This doctrine was developed to prevent injustice if the promisee suffers from any injustice due to the reliance on the promise of the promisor, even though it was not required a consideration. However, in English law, the doctrine of promissory estoppel is used only as passive equity and is invoked only in the cases of defence.

Position under the Indian contract act is different than under English Law

Under English Law

It is an established rule under English law that the third party cannot sue a contract made for his own benefit. Apart from special circumstances. A person who is not a part of the contract cannot enforce or rely for protection on its provisions. Such right can be conferred to a property by way of trust but it cannot be on a stranger to a contract as a right to enforce the contract.

Under Indian Law

It is established that the consideration can move from a third party but it cannot sue for its own agreement. However, there was lots of confusion on this point. Although the definition of “consideration” is wider in the Indian than in the English law since common law is applicable, therefore it is generally applied that the third party cannot enforce the contract.

Law Commission of India in one of its reports mentioned that the contract must be enforceable by a third party if it expressly for his benefit but the defences of the party to the contract must also be considered. It is also proposed that the parties cannot alter the terms of the contract once the third party takes over the contract.

Pre-existing contract with the third party

A promise to perform a pre-existing contractual obligation with a third party can be a valid consideration for another contract. The point of conflict in these kinds of arrangements is regarding the presence of consideration for the promisor. This conflict was settled in the case of Shadwell vs Shadwell, where the plaintiff got engaged and his uncle wrote him a letter promising him to pay 150 pounds throughout his lifetime. 

The jurists in the above case held that there was adequate consideration for the contract as it could be construed from the fact that it was made because of the engagement of his nephew. Moreover, marriage is of great interest to the near relatives. Also, the contract is binding on the uncle as it is possible that the plaintiff has undertaken many liabilities on account of the promise given by the uncle and if the payment is withheld then the plaintiff could face a lot of embarrassment. 

Under these provisions, the person should be safeguarded from any further payment which is not enforceable as per the contract. Like in the case of Syros Shipping vs Elaghil Trading co. a vessel which was prepaid had to deliver tractors to Yemen. The charters defaulted their payment to the shipowner because of the congestion in the ports. During this period the shipowner asked for extra payment, the consignees agreed to pay but later refused. The court held that since there was no consideration for the promise, moreover no estoppel was created hence the contract is not enforceable.

Consideration and motive

Consideration is not the same thing as motive or a mere desire. The requirement of consideration is vital and the contract could not be satisfied with just a moral obligation. Consideration for a promise is always a motive for the promise, unless it is nominal or invented, while a motive for a promise may not always be a consideration for it. Motive induces a promise to be given. Similar holding was given in the case of Dwarampudi Nagarathnamma vs Kuruku Ramayya, where the Karta of a Hindu Undivided Family gifted his concubine a portion of the property beyond the cohabitation was a motive and not a consideration, and it should be considered as invalid because it was motivated by the desire to compensate for his past services.

Absence of consideration

If the promissory note is neither genuine nor fraud then it is recoverable under the provision of this code, with interest. The court said that mere denial of the passing of consideration does not make any defence. Something which is probable has to be brought on record.

Exceptions under Section 25, Indian Contract Act

In English law, a contract which is under the seal is enforceable without consideration. In Indian law, there are no such provisions but still, The general rule is the ex nudo pacto non-oritur action, which means that no right of action arises from the contract which is entered into without any consideration. Still, under Section 25 of the Indian Contract Act,1872.it provides certain exceptions under Section 25 of the Indian Contract Act.

Fiduciary relation

In case of a contract entered into between the relatives or on account of natural love and affection is enforceable without consideration. The meaning of love and affection is not judicially construed but parties who are nearly related would have instinctive love and affection. However, this could be overruled with regards to some external circumstances, like between the wife and husband who are compelled to live separately because of quarrelling. But a settlement to be given to a man by the wife by way of maintenance could be enforced without any consideration because it will result in peace and family harmony.

The term “family” (in this context) should be understood as a group of people living together and possessing a right of succession, inheritance etc., but the family could be construed as a people who are bonded by natural love and affection.

Past voluntary services 

A promise to compensate the person who has done something voluntary in the past for the promisor is enforceable. This exception is attracted in the cases when the services are rendered voluntarily. Thus where a service is rendered on behalf of a company which is not in existence, a subsequent promise to pay would not attract this provision. Even where the promisee has done something for the promisor, which he had to do legally, then it will also be covered under this exception.

In Case of a Minor

In Karam Chand vs Basant Kaur, the court held that even where the promisor after attaining majority, promises to pay for the goods attained in minority will also fall under this provision. The court said that although the promise made by a minority is void but is the promise is made by a person of full age to the promisee who has done something for him voluntarily when the promisor was a minor, then it will also attract this exception.

Time barred debt

A promise to pay a time-barred debt is enforceable and it should be signed by the person or his agent. It could be to pay for the whole debt or in part. The debt to be enforced could be paid except for the law of limitation. However, the person who is under no obligation to pay to another person is under no obligation under this clause. 

The promise to pay the debt must be expressed, it is not sufficient if the intention to pay could not be gathered from the circumstances. 

Acknowledgement of the debt is different from the promise to pay the debt. The acknowledgement of the person should be done before the period of limitation. Promise to pay a time-barred debt is a new contract. It is not just merely an acknowledgement of the existing liability.

Gift actually made

The provisions of “Consideration” do not affect the gift actually made. Under this Section, gift is defined as: 

• The gift is of movables then it should be accompanied by its delivery.
• The gift is of immovables then should be along with registration. 

If the above conditions of gifts are fulfilled then lack of consideration would not affect the validity of these gifts. However, apart from the consideration, they could be questioned otherwise. 

Where the gift of the property was made by a registered deed and is attested by two witnesses, it was not allowed to be questioned on the ground that she was the victim of fraud, moreover, she was not able to establish it.

Inadequacy of consideration

Adequacy of the consideration means that the consideration which is paid is equal in value to the value for which it is paid. Consideration can be terms of money, property etc. inadequate consideration is not void but it renders the contract unenforceable because of the improper bargaining or by itself.

Inadequate consideration must be distinguished from nominal consideration. Nominal consideration is deliberately given to make the contract effective but inadequate consideration is less than the amount promised. Although the act does not make any distinction between the nominal and inadequate consideration but it was made in the case of Midland Bank trust vs Green. 

Conclusion

Consideration is defined under Section 2d of the Indian Contract Act,1872. It could be past, present or future, and must only concern the parties to the contract and not any third party. But there are various exceptions present under Section 25 of the Act, these exceptions are made keeping in view various circumstances, so that the interest of the parties of the contract or even the third party is not compromised. Moreover the consideration need not be adequate, however it should be valuable according to the parties of the contract. 

References

• https://www.toppr.com/guides/business-laws/indian-contract-act-1872-part-i/legal-rules-regarding-consideration/
• https://www.legalbites.in/consideration/
• Pollock and Mulla Indian Contract Act, 1872
• Avtar Singh Law of Contract

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

The post Consideration under the Indian Contract Act, 1872 appeared first on iPleaders.

This article is written by Gurkaran Babrah, a first-year law student at Symbiosis Law School, Noida. This article gives an overview on Robbery in relation to theft, extortion and on Dacoity.

Robbery

In modern American and English law, the crime of robbery is generally defined by the statute. There are two types of definitions which are primarily used. The first which is closely derived from the older English common law and the second one is which is Recommended by the American Law Institute’s Model Penal Code. The terms like robbery, theft and extortion are very similar to each other and they are often used interchangeably on a daily basis. But the legal implication of all the three terms is different. The Indian penal code has defined these terms very clearly. It has identified these as distinct crimes. Section 390 of the Indian Penal Code has defined robbery and has defined theft and extortion in relation to robbery. Before analyzing or understanding Section 390, first theft and extortion need to be understood separately.

Theft

Theft has been defined under Section 378 of the Indian Penal Code, 1860. It says “ whoever intends to take dishonestly any movable property out of the possession of any person without that person’s consent and moves it, he/she is said to have committed a theft.”

For example: If A is employed by B and entrusted by C with the care of D’s cash, dishonestly runs away with that cash, without D’s consent. Then A has committed theft.

In the case of Pyare Lal Bhargava v. State of Rajasthan, a government employee took a file from the office and gave it to Mr.A and brought it back two days later. It was held that he took the property away with a dishonest or malicious intention and that is enough to term it as a theft. 

Essentials of theft

The essentials of theft are:

• There has to be a dishonest intention to take the property away.
• The property should not be attached to the earth. It should be movable property. As soon as the property is separated from the earth, it is capable of becoming the subject of theft. For example, if  A cuts down a tree on B’s ground, with the intention of dishonestly taking the tree out of B’s possession without B’s consent. Then as soon as separates the tree, he commits theft. 
• The property must be taken out of the possession of another. A thing which is in the possession of nobody cannot be the subject of theft.
• The most important thing is that the property must be taken away without consent.
• There should be physical movement of the property, however, it is not important that it should be moved directly. For example, if someone cuts the string which is tied to the necklace owing to which the necklace falls, it would be held that he or she has caused sufficient movement of the property as required for it to amount to theft.

Punishment for theft

The punishment for theft is defined under Section 379 of the Indian Penal Code, 1860. It says that a person who commits theft shall be punished with imprisonment of up to 3 years or with fine or with both. 

Extortion

Extortion is defined under Section 383 of the Indian Penal Code, 1860. This section says that any person who intentionally puts another person in fear of injury and dishonestly induces him or her to deliver any valuable property or anything signed which can be converted into valuable security is said to have committed extortion.

For example, if D threatens A that he will keep A’s child in wrongful confinement and will kill him unless A delivers to him a sum of Rupees one lakh. Then D has committed extortion.

Essentials of extortion

The essentials of extortion are:

• The person committing the offence should intentionally put the victim in fear of injury. The fear of injury must be to such an extent that it is capable of unsettling the mind of the victim and forcing him to give his property, as in the above-stated example.
• The person committing the offence should dishonestly induce the victim so to put in fear to part with his (the victim’s) property.

In the landmark case of R.S. Nayak v. A.R Antulay, A.R. Antulay, a CM, promised the sugar cooperatives whose cases were pending before the government for consideration that their cases would be looked into if they donated money. It was held that fear or threat should be used for extortion, and since in this case, there was no fear of injury or threat it would not amount to extortion.

Punishment for extortion

Section 384 of the Indian Penal Code defines the punishment for extortion. It states that any person who commits extortion shall be punished with imprisonment of up to 3 years or with fine or with both. 

Essential Ingredients of Robbery

Section 390 of the Indian Penal Code, 1860 says that in all robbery there is either extortion or theft. The Black law’s dictionary defines robbery as the felonious act of taking the personal property of another from a person or immediate presence against his will accomplished by using force and fear, with the intention of permanently depriving the owner of the thing.

Causing Death, Hurt or Wrongful Restraint or Fear 

Death, hurt, wrongful restraint or fear can be caused when theft is a robbery or when extortion is robbery. These two are explained below with the help of illustrations.

When theft is robbery

Theft is a robbery when in order to commit theft, the offender voluntarily causes or attempts to cause to any person death, subject him to wrongful restraint, cause hurt or induce fear of instant death, instant wrongful restraint or cause instant hurt.

Theft can be called as a robbery when the conditions given below are satisfied:

• When the offender voluntarily attempts to cause death;
• wrongful restraint;
• fear of instant death;
• instant wrongful restraint;
• instant hurt.

And  the above acts are done:

• while committing the theft,
• While carrying away the property acquired by theft, or
• While attempting to carry away property.

For example, if A holds B down and fraudulently takes B’s money from B’s clothes without B’s consent. Here A has committed theft and by committing theft he has voluntarily caused wrongful restraint to B. Therefore, A has committed robbery.

When extortion becomes robbery

Extortion becomes robbery when the person committing the offence of extortion put the other person in fear and commits extortion by putting that person in fear of death, instant wrongful restraint to that person or to some other person and by doing so induces the person so put in fear then and there deliver the thing that has been extorted.

For example, if A meets B and B’s child is on a road. A takes the child and threatens to fling it down a height unless B delivers his purse. B delivers his purse. Here A has extorted the purse from B by causing B to be in fear of instant hurt to the child who is present. A has therefore robbed B. However if A obtains the property by saying that your child is in my hand of my gang and he/she will be put to death unless you send us ten lakh rupees. This will amount to extortion, and punishable as such, but it would not be considered as robbery unless B is put in fear of instant death of his child. 

Possession of Stolen Property

Property is an important part of the law. Section 410 to Section 414 of the India Penal Code talks about the concept of stolen property. Section 410 of the Indian Penal code defines it as when a person transfers his/her property to another person. It can happen by way of theft, extortion or robbery. It includes all kinds of properties which a person can misappropriate for criminal breach of trust.

These kinds of instances related to property are known as stolen properties. Section 410 of the Indian Penal Code also says that if a person transfers the property by using any of the means given below that will be considered as stolen property. These means are:

• Theft;
• Extortion;
• Robbery; 
• Criminal misappropriation;
• Criminal breach of trust.

Section 411 of the Indian Penal Code says that any person who dishonestly possess or retains the property will be punished with at least 3 years of imprisonment, fine or both.

Punishment for Robbery 

Indian Penal Code, 1860 deals with all kinds of punishments related to criminal law . Under Section 392 of this code, the punishment for robbery is defined. This section says that any person who commits robbery shall be punished with imprisonment which may be extended up to ten years and shall also be liable for fine.

Further, this section says that if a person commits a robbery on a highway then the term for imprisonment will be of 14 (fourteen) years. Section 393 of the Indian Penal Code defines the punishment for an attempt to commit robbery. The punishment for this is imprisonment for up to 7 years and also liable for fine. 

Punishment for Being a Member of Gang of Robbers 

Section 412 of the Indian Penal Code deals with the punishment for being a member of a gang of robbers. This section deals with the person who retains or receives stolen property the possession of which he/she knows that it is due to the commission of a dacoity. It further says that when a person receives from another person whom he or she knows or has justification to believe that property belongs to a group of dacoits, and knows or has reason to believe that the property have robbed or stolen.

For all such people, the punishment is imprisonment of life or with a rigours term which can be extended to 10 years. This section punishes everyone who receives any property which has been acquired by the commission of dacoity.

Attempt to Commit Robbery

Attempt to commit robbery has been defined under Section 393 of the Indian Penal Code, 1860. It explicitly says that any person who attempts to commit robbery will be punished with rigorous imprisonment whose term can be extended to 7 years and he or she will also be liable to pay the fine.

Dacoity (Aggravated Form of Robbery)

Aggravated form of robbery not only includes robbery but it also includes theft and serious injuries to the victim. When five or more than five persons commit or attempt to commit a robbery that is known as dacoity. It is more of an aggravated form of robbery and generally, the robber is armed with deadly weapons.

Dacoity is defined under Section 391 of the IPC and the punishment for it is defined under Section 395 of the IPC. The only difference between robbery and dacoity is a number of participants. Section 395 punishes every member of the group in dacoity whether that person takes an active part or not. The punishment under this section is imprisonment up to 10 years with fine. 

Dacoity

According to the dictionary of oxford, dacoity means an act of violent robbery which is committed by an armed gang. There is only one factor which differentiates dacoity from robbery and that is the number of offenders. One person can also commit a robbery and more than 1 person can also commit robbery. But when 5 or more than 5 commit a robbery it is termed as dacoity.

Section 391 of the Indian Penal Code defines robbery. It says that when 5 or more than 5 conjointly commit or attempt to commit a robbery, or where the whole number of persons conjointly committing or attempting to commit a robbery, and persons present and aiding such commission or attempt, amount to five or more, every person so committing, attempting or aiding, is said to commit “dacoity”.

Essential Ingredients

In order to commit dacoity, there are 3 essentials which must be there. These essentials are:

• There should be at least five or more than five persons;
• They should conjointly commit or attempt to commit dacoity;
• They should have dishonest intention.

Sentence for Dacoity

Punishment for dacoity is defined under Section 395 of the Indian Penal Code, 1860. This section says that a person who commits dacoity shall be punished with imprisonment for life, or with rigorous imprisonment for a term which can be extended to ten years, and shall also be liable to pay the fine. This offence is cognizable, non-bailable, and non-compoundable in nature.

The State vs Sadhu Singh and Ors in this case, four and one kurda Singh was involved in committing a dacoity. They all were armed with deadly weapons such as rifles and pistols. They committed a robbery at the house of gharsiram. They injured Gharsiram, jugalkishore, Sandal and Jugalkisore. The dacoits, in this case, tried to take a wristwatch and a shawl of one person but as they were villagers the dacoits were not able to take anything with them. When dacoits started running from the villagers they received a hot chase from them and in return dacoits shot a fire. As a result, dharma, one of the villagers died but the villages captured one of the dacoits. In this case, the dacoits were charged under Section 395 of the Indian Penal Code. 

Aggravated form of Dacoity

Aggravated form of dacoity is defined under Section 396 of the Indian Penal Code, 1860. Under  Section 396 aggravated form is defined as dacoity with murder. It says that if anyone of five or more than five persons, who are conjointly committing dacoity, commits murder in so committing dacoity, every one of those persons shall be punished with death and shall also be liable to fine.

The ingredients of Section 396 are:

• The offence of dacoity must be committed with the joint act of the accused persons; 
• Murder must be committed in course of the commission of the dacoity.

If anyone of the five or more persons who are committing robbery commit murder while committing dacoity then, every one of them will held liable for murder even if some of them did not participate in committing the murder. Under Section 396 of the IPC, it is not necessary to prove whether the murder was committed by a single person or it was committed by all of them. It is also not necessary to prove the common intention. The prosecution is only required to prove that the murder was committed while committing the dacoity. If the prosecution successfully proves that the murder was committed while committing dacoity, then all of the members will be punished under Section 396 of the IPC.

If the offenders are running and while chasing them if one of the dacoits kill someone then the other members of the gang can not be held guilty under Section 396 of the IPC. In one of the landmark case laws i.e. Laliya v state of Rajasthan it was observed that whether the murder is a part of dacoity or not, it totally depends on the circumstances of that time.

The court decided that the attention has to be paid on these points before coming to a conclusion. These points are:

• Whether the dacoits retreated or not and the murder was committed while retreating or not?
• What is the time interval between the attempt of murder and dacoity?
• What is the distance between the places where they attempt to murder and attempt to dacoity was committed?

In one of the cases i.e. in Shyam Behari v. State of Uttar Pradesh, the dacoit killed one of the victims, who had caught the robber’s associate in an attempt to commit dacoit. The robber was convicted under Section 396 of IPC because any murder committed by the dacoits during their fight would be treated as murder. 

Offences Connected with Dacoity

Before committing any offence intention plays a very important role in it. Under criminal law, the intention is known by Mens Rea. Mens rea means guilty of Mind. For every criminal offence, there should be Mens rea on the part of the offender. If put in other words it means that there has to be intention to commit a crime. The term “Intention”  has not explicitly defined under the Indian Penal Code, 1860 But under IPC Section 34 of it deals with common intention. 

Section 34 of IPC defines acts done by several persons in furtherance of common intention. This section says that “when a criminal act is done by several persons in furtherance of the common intention of all, every such person is liable for the act in the same manner as if it were done by him alone.”

This section requires a particular criminal intention or knowledge and the act should be committed by more than one person. Everyone who joins the act with the knowledge of the consequences, all of them should be made liable under this section.

Preparation to Commit Dacoity

Section 399 of the Indian Penal Code, 1860 has talks about preparation to commit dacoity. It says that whoever makes any preparation for committing dacoity shall be punished with rigorous imprisonment for a term which may extend to ten years, and shall also be liable to fine.  

Assembling for the Purpose of Committing Dacoity

Assembling for purpose of committing dacoity is defined under Section 402 of the Indian Penal Code. It says that whoever, at any time after the passing of the act, shall be one of five or more persons assembled for the purpose of committing dacoity, shall be punished with rigorous imprisonment for a term which may extend to seven years and shall also be liable to fine.

Belonging to Gangs of Dacoits

Belonging to gangs of dacoits is defined under Section 400 of the IPC. It says that anybody who at any time after the passing of this act, shall belong to a gang of persons associated for the purpose of habitually committing dacoity will be punished with imprisonment for life, or with rigorous imprisonment for a term which may extend to ten years, and shall also be liable to fine.

Judicial Pronouncements

Arjun Ganpat Sandbhor vs state of Maharashtra

In this case, a truck driver was killed and the truck was taken away by the dacoits. This incident took place in darkness. The evidence of the son of the deceased, who was in the truck at the time when the accident took place was not free from doubt. He admitted at that time that he used to have forgetting tendency. Test identification parade was not held according to guidelines prescribed under Criminal Manual. In the view of the totality of the evidence the accused was entitled to acquittal.

Md Imamuddin & Anr. vs. State of Bihar 

In this case, the plea was to reduce the punishment for dacoity. Some of them were accused to commit dacoity in a running train. They were sentenced to undergo rigorous imprisonment for seven years and two years for respective offences. The accused remained in custody for a substantial amount of time, about 50 per cent of the punishment. Their punishment was reduced to half and which they have already passed the time in imprisonment.

Conclusion

This article explains the concept of Robbery and Dacoity according to the Indian Penal Code, 1860. But in order to understand Robbery and dacoity, one needs to understand the concept of theft and extortion. So, in this article before going to robbery and dacoity, theft and extortion has been explained with the relevant examples and relevant case laws. These are important to understand because these terms may seem to be similar but they are different in its legal application. They are often used interchangeably. This article gives an overview of all these concepts keeping in view and according to the Indian Penal Code, 1860.

References

1. Criminal Manual 2019th edition.
2. https://blog.ipleaders.in/overview-section-390-indian-penal-code/

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

The post Robbery and Dacoity Under IPC appeared first on iPleaders.

This article is written by Nishtha Pandey (batch 2023), student of Dr. Ram Manohar Lohiya National Law University, Lucknow. This article highlights the Judgements delivered under the Criminal Procedure Code, 1973.

Introduction

“The people’s good law is the highest law” – Cicero 

Judgement is a basic term used in our daily lives. Generally, it means analysing a certain situation and forming a notion thereafter. In a legal sense, judgement is the decision given by the Court, after hearing both sides, it contains reasons for reaching such a conclusion. The judgement thus forms an important part of a legal process. A faulty judgement has the potential to deteriorate the very foundation of the legal justice system in the country. Therefore it is imperative to study various aspects of judgement from a judicial point of view.

Object and scope

Chapter XXVII of the CrPC, 1973, deals with Judgement. However there is no definition of “judgement” present in the Code, but it is to be understood as the final order of the Court. In the case of Ismail Amir Seikh vs. the State of Maharashtra, it was held that a judgment is the act of judging. It was pointed out that judgment should clearly mention the reason for accepting an argument and rejecting the other.

This chapter is very important as it shed light on the various provisions related to “judgement” in a Criminal proceeding.

This chapter applies all across India.

Form and contents of the judgment under Section 353

In a judgement Ratio decidendi and Obiter dicta form an integral part. Ratio decidendi is the binding statement in judgement and Obiter Dicta is the “by the way” remarks delivered by the judge which is not necessary to the case at hand. These two are very important as they define the legal principles which are useful to the legal fraternity.

If the judgement is of acquittal-

• Whether the evidence of the prosecution absolutely failed to prove the guilt of the accused or merely failed to prove it beyond a reasonable doubt.
• If the act or omission from which the liability might arise doesn’t exist.

If the judgement is of conviction-

• The essential elements of the offence committed by the accused and the intervening circumstances which led to the commission of this offence.
• Participation of the accused as the principal perpetrator, or accomplice or accessory.
• The penalty that is imposed on the accused.

Language and contents of judgment

1. Under Section 354, of CrPC, it is stated that every judgement should be:

• In the language of the Court.
• Shall contain the points of determination and the reason for the same.
• The offence should be specified and the reason for the same should be given for the same. The offence so committed must be mentioned in the IPC or any other law under which the crime is committed and the punishment is given.
• If the offender is acquitted, the offence for which he was acquitted, the reason for the same and it must be specified that a person is now a free man.

2. If the judgment is passed under the IPC and the judge is not certain as to under which Section the offence is committed or under which part of the Section, the judge should specify the same in the judgement and should pass orders in both the alternate situations.

3. The judgement shall furnish a proper reason for the conviction if it is a sentence for a term of life imprisonment and in case of death sentence the special reason has to be given.

Judgment given by Metropolitan Magistrate under Section 355

Under Section 355 of the CrCP, it is mentioned that the judge instead of giving the judgement in an above-mentioned way, can deliver it in an abridged version that would contain-

• The serial number of the case,
• Date of the commission of the offence,
• Name of the complainant,
• Name of the accused person, his parentage and residence,
• Offence complained of or proved,
• Plea of the accused and his examination,
• Final order,
• Date of the order,
• In cases where the appeal lies from the final order, a brief statement of reasons for the decision.

Post-conviction orders in lieu of punishment

Post-conviction dilemma

Under Section 357 of the Code, if the judgement is that of the conviction then the Court can order the accused to pay compensation over and above the sentence of fine or imprisonment that is awarded to him. The Court can, ask the offender, to pay compensation.

Further, under Section 358, the Court can order compensation to be given to the person who is groundlessly arrested by the one who led to such false arrest. The compensation is recovered as a fine and is given to compensate for the loss of time and money of the person.

Moreover, in the case of non-cognizable offences under Schedule 1 of the code, and the judge has received a private complaint about the same. The judge can ask the accused, after convicting him, to pay to the prosecutor the necessary amount and expenses incurred in the process of prosecution.

Under Section 360 of the Code, one of the most important forms of post-conviction order is mentioned, whereby the accused is not convicted but is led free while imposing some restrictions on his liberty as a free man.

Convict to be released on good conduct or admonition

Section 360 of the CrPC mentions a provision in which a person could be released on good conduct or after admonition. In this, if a person is not under the age of 21 years and is not convicted of an offence which is punishable with a fine or a term which is seven years or less. Also if a person is more than 21 years of age or a woman is convicted of an offence which is not punishable with death sentence or life imprisonment and no previous conviction is against the person then if the Court deems it fit in accordance with the age, character, antecedents of the offender and the circumstance under which such offence was committed, that it is expedient to release the person on good conduct and the Court instead of punishing him may order him to be released in the sureties or not, as per the Court. Such a person has to appear before the Court to receive the sentence of the punishment not exceeding 3 years and in the meantime peace and good behaviour, must be exercised.

If the first offender is convicted by the magistrate of the second class then the magistrate has to record its opinion to that effect and submit it to the first class magistrate. The first class magistrate will hear the case in the same manner as if it originally came to his Court and he may order further inquiries if he feels that it is necessary to do so. He may order to record evidence or may do it by himself. If a person is convicted of theft, misappropriation cheating or any other offence under the IPC, and is punishable with not more than two years of imprisonment or fine. In this case, the person is not previously convicted of any other offence, the Court may if it thinks fit can release the person based on his age, antecedent, mental and physical condition, character, the trivial nature of the offence, or any circumstances which took place. The Court may release him after due admonition. An order under this Section could be given by Appellate Court or High Court or Court of Session while exercising its power of revision.

The Court should ensure that the offender and his sureties must get a place of living and a regular occupation of observation as specified by the Court.

Exercise of judicial discretion in sentencing without adequate knowledge about the offender

Currently, India does not have structured sentencing guidelines. In March 2003, the Malimath Committee issued a report that emphasized the need to introduce sentencing guidelines in order to minimize uncertainty in awarding sentences. 

In 2008, the Madhava Menon Committee asserted the need for statutory sentencing guidelines. Moreover, the government is working to establish a “uniform sentencing policy” in line with the United States and the United Kingdom to do away with varied judgements, given by the judges.

The sentencing procedure is established under the CrPC, which provides broad discretionary sentencing powers to judges. It is asserted by many authors that, in the absence of an adequate sentencing policy it comes down to the judges to decide which factors to take into account and which to ignore. Moreover, broad discretion gives a lot of room for personal prejudices of the judges to dictate the judgement.

Where the offender is not traced or identified, but the victim is identified, and where no trial takes place, the victim or his dependents can make an application to the State or the District Legal Services Authority for compensation. Upon receipt of such recommendations or application, the State or the District Legal Services Authority after due enquiry can award adequate compensation by completing the enquiry within two months.

Decisions as to punishments

Judicial discretion in sentencing

Judicial discretion means that the judiciary is given some discretion to adjudicate certain cases accordingly. Under the doctrine of separation of power, this comes under judicial independence.

The main part of the judicial discretion is present Under Section 360 of the CrPC which gives the power to the Judges to release the convicts on probation. But this power is limited to only a few conditions:

• Where the convict is a woman and is not punished for life imprisonment or the death sentence,
• Where the convict is above 21 years of age and is not punished for more than 7 years of the term,
• Where the convict is under the age of 21 years and he is not punished for the death sentence or life imprisonment.

Also if the crime committed is of such a nature that the punishment awardable cannot be more than 2 years or a simple fine then, having consideration to the various factors connected to the convict, the Court may leave the convict without a sentence at all after mere admonition. The Court also takes steps in case the person does not comply with the rules laid down at the time of release as provided under this Section such as re-arrest of the person. For release under these provisions, it is necessary that either the convict or the surety are residing or attend regular occupation in the jurisdiction of the Court.

The Code through Section 361 makes the application of Section 360 necessary wherever possible and in cases in which there is an exception to state clear reasons. The judge must give special reasons for awarding the punishment which is below the minimum prescribed under the relevant laws of the country. The omission to record the special reason is an irregularity and can set aside the sentence passed on the ground of failure of justice. The Probation of Offenders Act, 1958 is very similar to Section 360 of the CrPC. It is more elaborate in the sense that it explicitly provides for conditions of release order, a supervision order, payment of compensation to the affected party, powers and predicaments of the probation officer and other particulars that might fall in the ambit of the field. Moreover, Section 360 would cease to have any force in the States or parts where the Probation of Offenders Act is in force.

Sentence of death

The old code of 1898, before the normal punishment for the person committing murder, was death and life imprisonment was an exception. The effect was that the Court had the discretion to either give death sentence and life imprisonment. However, in the new code of 1973, which is legislated according to the current scenario, the punishment now to the one committing murder is of life imprisonment and the death sentence is to be given in an exceptional case. The death sentence should be awarded only when the sentence of life imprisonment seems inadequate. The number of victims, however, will not make a case, rarest of the rare.

Where the offence committed is vindictive and done in a pre-planned manner. The offence is committed in a cold-blooded fashion then it will amount to a crime which is rare of the rarest case. Death penalty should be imposed only where the whole society expects the judiciary to award death sentence. While giving death penalty certain conditions should be kept in mind:

• Manner of commission of murder,
• The motive of the commission of murder,
• Anti-social nature of the murder,
• The personality of the victim (more).

Sentence of imprisonment

Under Section 354 of the CrPC, when the conviction is for an offence punishable with imprisonment for life or imprisonment for a term of years, the judgment shall state the reasons for the sentence awarded, and, in the case of the death sentence, the special reasons for it. Moreover, when the conviction is for an offence punishable with imprisonment for a term of one year or more, but the Court imposes a sentence of imprisonment for a term less than three months, it shall record its reasons for the same, unless the sentence is one of imprisonment till the rising of the Court or the case was tried summarily.

Sentence of fine

Under Section 357 of the Code, when a Court imposes a sentence of fine or a sentence in which fine is also included then the Court while passing judgment may order the whole or any part of the fine recovered to be applied:

• In defraying the expenses incurred during the prosecution.
• In the payment to any person as compensation for any loss or injury caused by the offence, when compensation is recoverable in the Civil Court.
• When any person is convicted of any offence for causing the death of another person or have encouraged the commission of such an offence, have to pay compensation to the persons who are, under the Fatal Accidents Act, 1855 entitled to recover damages from the person sentenced for the loss resulting to them from such death.
• When any person is convicted of any offence which includes theft, criminal misappropriation, criminal breach of trust, or cheating, or dishonestly receiving or retaining, or voluntarily assisting in disposing of stolen property knowing or believing the same to be stolen then compensation has to be given to the bona fide purchaser of such property for the loss of the same if such property is restored to the possession of the person entitled.

If the fine is imposed in a case which is appealable, no such payment shall be made before the period allowed for presenting the appeal has lapsed, or if an appeal is presented then before the decision of the appeal is delivered.

Moreover, when a Court imposes a sentence, in which fine is not included, the Court while passing judgment may order the accused person to pay, by way of compensation the amount as may be specified in the order to the person who has suffered any loss or injury by reason of the act for which the accused person has been sentenced. An order can also be made by an Appellate Court or by the High Court or Sessions Court while exercising its powers of revision.

It is important to note that at the time of awarding compensation in any civil suit relating to the same subject matter, the Court will take into consideration any sum paid or recovered as compensation under this Section.

Precautionary and preventive orders

Certain habitual offenders required to notify their whereabouts

Under Section 356 of the CrPC, 1973, when any person, having been convicted by a Court in India of an offence punishable under Section 215, Section 489A, Section 489B, Section 489C or Section 489D or Section 506 of the IPC, 1860, or of any offence punishable under Chapter XII or Chapter XVII of IPC, with imprisonment for a term of three years or more, is again convicted of any offence punishable under any of the above-mentioned Sections or Chapters with imprisonment for a term of three years or more by any Court other than that of a Magistrate of the second class, such Court may, if it deems fit, at the time of passing a sentence of imprisonment on such person, also order that his residence and any change of, or absence from, such residence after release shall be notified as provided for a term not exceeding five years from the date of the expiration of such sentence. These provisions also apply to criminal conspiracies to commit such offences and to the abetment of such offences and attempts to commit them. However, if the conviction is set aside on appeal or otherwise then such an order will become void.

Moreover, an order under this Section may also be made by an Appellate Court or by the High Court or Court of Session when exercising its powers of revision. The State Government may, by notification, make rules to carry out the provisions of this Section relating to the notification of residence or change of or absence from residence by released convicts. Such rules may provide for punishment for the breach thereof and any person charged with a breach of any such rule may be tried by a Magistrate of competent jurisdiction in the district in which the place last notified by him as his place of residence is situated.

Compensation and costs

Guilty person to compensate the victim and to pay the costs of the prosecution

Under Section 357A of the CrPC, every State Government has to coordinate with the Central Government and prepare a scheme for providing funds for the purpose of compensation to the victim or his dependents who have suffered loss or injury as a result of the crime and also require rehabilitation.

Whenever a recommendation is made by the Court for compensation, the District Legal Service Authority or the State Legal Service Authority will decide the quantum of compensation to be awarded under the scheme.

The State or the District Legal Services Authority, as the case may be, to alleviate the suffering of the victim, may order for immediate first-aid facility or medical benefits to be made available free of cost on the certificate of the police officer not below the rank of the officer in charge of the police station or a Magistrate of the area concerned, or any other interim relief as the appropriate authority deems fit.

Moreover, under Section 357B The compensation payable by the State Government under Section 357A shall be in addition to the fine to the victim under Section 326A, 376AB, 376D, 376DA, 376DB of the IPC.

In Section 357C, all hospitals, private or public, whether run by the Central Government, State Government, local bodies or any other person, shall immediately, provide the first-aid or medical treatment, free of cost, to the victims of any offence mentioned under Section 326A, 376, 376A, 376AB, 376B, 376C, 376D, 376DA, 376DB or Section 376E of the IPC, and shall immediately inform the police regarding the incident.

Successful complainant to get costs in non-cognizable cases under Section 359

Under Section 359 of the Code, it is held that whenever the Court convicts the offender in a non-cognisable offence, then along with the sentence of the crime, it can order the payment of expenses that are borne by the complainant, these expenses would include the fees of the witness, pleaders fees or any other which the Court deems fit. The payment could be made in full or in instalments. In case of default of such payment, the Magistrate may order imprisonment not exceeding thirty days.

Compensation for wrongful arrests under Section 358

Under Section 358, it is stated that in case a person compels the police to arrest another person, which the Magistrate thinks that there is no ground for such arrest, the Magistrate may order compensation not exceeding Rs 1000, to be paid by the person who causes such arrest. The fine is given as a way of compensation for the loss of time and expenses or other matter, as the judge may think fit. If more than one person is arrested on such basis, then each of them should be awarded a compensation not exceeding Rs 100, as the Magistrate thinks fit. Such compensation shall be recovered as a fine and if the person does not pay the compensation then the Magistrate can sentence him to imprisonment not exceeding 30 days unless the compensation is sooner paid.

Pronouncement of judgment

Modes of pronouncing the judgment under Section 353

Under Section 353, of the CrPC, the judgment in every trial in any Criminal Court of original jurisdiction must be pronounced in open Court by the presiding officer just after the termination of the trial or at some subsequent time. The notice of that time shall be given to the parties or their pleaders. The various modes of pronouncement of judgement are:

• by delivering the whole judgment.
• by reading out the whole judgment.
• by reading out the operative part of the judgment and explaining the substance of the judgment in a language which is understood by the guilty or his pleader.

If the whole judgment is delivered the presiding officer shall take it down in short-hand, sign the transcript and every page of it as soon as it is made ready, and write on it the date of the delivery of the judgment in the Open Court. However, in practice, the judgements are usually delivered in the fag end of the day so that the transcribed copy of the judgement is available to the judge in the morning itself.

However, where the whole judgment or the operative part of it is read out or as the case may be, it shall be dated and signed by the presiding officer in Open Court and if it is not written with his own hand, every page of the judgment shall be signed by him. This also takes place when the judgment is dictated to the shorthand writer.

Where the operative part of the judgment is pronounced in the manner specified under the Section then whole judgment or a copy of it shall be immediately made available to the parties, or to their pleaders (if they apply for the same) free of cost. The person who is in custody will be brought in the Court to hear the judgement.

If the accused is not in custody, he shall be required by the Court to attend to hear the judgment pronounced, except where his personal attendance during the trial has been exempted and the sentence is only of fine and he is already acquitted. However if there are more than one accused and some of them are not present, the Court can pronounce the judgement in his absence to do away with the undue delay.

No judgment delivered by any Criminal Court shall be considered invalid by reason only in the absence of any party or his pleader on the day or from the place notified for the delivery of it, or of any omission to serve, or any defect in serving the parties or their pleaders, or any of them, the notice of that day and place.

This Section would not limit the extent the provisions of Section 465, of the CrPC.

Court not to alter judgment under Section 362

Under Section 362, it is categorically mentioned that except otherwise provided in the Code, the Court will not alter the Judgement or the order once signed by it to dispose of it, except to correct any clerical or arithmetical errors.

Copy of judgment to be given to the accused and some other persons under Section 363

Section 363 of the CrPC states that when the sentence of imprisonment is pronounced, the guilty must be immediately, given the copy of judgement-free of cost. If the accused applies, the copy of the judgment in his language (if possible) or in the language of the Court shall be translated and given to him in every instance where such a case is appealable. This copy should be given to him free of cost. However if the High Court confirms the death sentence of the accused, then he should be given a copy of the judgement even if he has not applied for the same. Except for these cases, the accused will get a copy of the judgement or order, would be given to him on payment of the specified charges, or in special cases, as the Court shall deem fit, will give it to him free of cost. Moreover, if the appeal to the judgement lies in the higher Court, then the accused must be informed of the time within which he should appeal, and his appeal must be preferred. Moreover, other persons who are not affected by the judgement of the High Court shall get the copy of the same after payment of specified prices and following of certain conditions as ascertained by the High Court in the rules made by it.

Translation of judgment under Section 364

Section 364 of the Code holds that the judgement needs to be filed along with the proceedings. Moreover, if the judgement is recorded in the language that is different from the Court’s language and the Court, the accused requires that the translation needs to be done in the language of the Court, then such judgement needs to be translated.

Court of Session to send a copy of finding and sentence to District Magistrate under Section 365

Under Section 365, it is stated that in cases where the proceedings are held in the Court of Judicial Magistrate or Sessions Judge, the copy of all the findings and the sentence need to be given to the District Magistrate, under whose local jurisdiction the trial is held.

Conclusion

Judgement forms an important part of any legal proceedings, it mentions the decisions that are taken after hearing the argument from both sides and the reason for the same. Chapter XXVII of the Criminal Procedure Code, 1973, gives a detailed description of the judgement in criminal matters. Provisions relating to the language, contents etc are provided. The judgement in cases of a death sentence, fine or imprisonment separate provision is present for delivering of judgement.

References

• https://batasnatin.com/law-library/remedial-law/criminal-procedure/655-judgment-definition-and-form-contents.html
• https://blog.ipleaders.in/judgement-cr-p-c/
• http://www.preservearticles.com/education/pronouncing-the-criminal-case-judgment-in-open-Court/26947
• Ratan Lal and Dhiraj, Commentary on Code of Criminal Procedure, 1973.

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

The post Judgment under the Criminal Procedure Code, 1973 appeared first on iPleaders.

This article is written by Isha, a second-year student at Bharti Vidyapeeth, New Law College Pune. This article talks about Misrepresentation in Contract.

Introduction

A misrepresentation is an untrue statement of a material fact made by one party which affects the other party’s decision in corresponding to a contract. If the misrepresentation is identified, the contract can be declared void and depending on the situation, the unfavourably impacted party may seek damages. In such a contract dispute, the party who made the misrepresentation becomes the defendant and the aggrieved party is the plaintiff.

Misrepresentation in contract law is especially important in business dealings where huge transactions occur with high frequency. Misrepresentations of the value and/or risk correlated with an agreement can cause enormous financial losses to businesses and individuals while increasing the risk of collaborative business ventures. Accordingly, misrepresentation contract law is vital to ensuring fairness and diminishing the risk of entering into agreements between individuals and businesses.

Definition

Misrepresentation is defined under Section 18 of the Indian Contract Act, 1872 which says, a misrepresentation is a form of a statement made preceding to the contract being completed. There are two varieties of statement that can be performed before a contract is formed, these will either:

1. Form part of the contract.
2. Not form part of the contract, therefore it becomes a representation.

Concept of Misrepresentation

For understanding the concept of misrepresentation first, we need to know the meaning of representation in terms of the contract. A representation is said to be such statement which generates the entry into a contract but is not a part of a term of the contract.

Misrepresentation is about giving of inaccurate information by one party (or their agent) to the other before the contract is made which induces them to make the contract. If a person makes a contract in reliance on misrepresentation and has to face loss as a result, they can revoke the contract or claim damages.

Unwarranted Statements

A statement made without any reasonable basis is an unwarranted statement. When a person makes a positive statement of a fact without any trustworthy source of information and believes that statement to be true, the act amounts to misrepresentation. When something is unwarranted it is not called for under the provided circumstances. For instance, arguing the merits of someone’s talent is one thing, but addressing them stupid is unwarranted.

Breach of duty

Once a duty has been established in relation to the defendant we must find that the defendant has breached the duty. A breach of the duty of care occurs when one fails to achieve his or her duty of care to act wisely in some aspect. Commonly, if a party does not act in a reasonable manner to prevent foreseeable injuries to others, the duty of care is breached. Breach of duty is defined in a very interesting case named Vaughn V. Menlove which it states that the defendant is found to have overdue of the claimant and if he acts below the reasonable standard then a breach of duty would have been committed 

• they may find out the cause of the breach and try to remedy it;
• they may dispute that a breach has occurred;
• they may argue that there is an exclusion clause or other terms in the contract limiting their liability for the breach; or
• they might argue that there is a cause for their breach, or that the contract is invalid.

Inducing mistake about subject matters

Inducing mistake about subject matter involves around mistake of fact. This happens when both the parties misunderstood each other leaving them at a crossroads. Such a wrongful act or a mistake can be because of an error in understanding, or ignorance or omission etc. But a mistake is never intentional, it is an innocent commanding. These mistakes can either be unilateral or bilateral which is explained below.

Bilateral Mistake

Section 20 defines a bilateral mistake. Where both parties of a contract are under a mistake of fact required to the agreement, such a mistake is called a bilateral mistake. Here both the parties have not permitted or given their consent in the same sense as per the definition of consent. Considering there is an absence of consent altogether the agreement is void.

However, to make an agreement void the mistake of fact should be about some crucial fact that is important in a contract. So if the mistake is about the presence of the subject matter or its title, quality, price etc then it would be a void contract. But if the mistake is of something inconsequential, then the agreement is non-void and the contract will remain in place.

For instance, X agrees to sell to B his goat. But at the point of the agreement, the goat had already died. Neither X nor B was cognizant of this. Therefore, there is no contract at all i.e. the contract is non-enforceable due to a mistake of fact.

Unilateral Mistake

A unilateral mistake is when only one person to the contract is under a mistake. In such a case the contract will not be considered void. So Section 22 of the Act states that just because one party was under a mistake of fact the contract will not be voidable or void. So if only one party has made a mistake of fact the contract remains a valid contract.

However, there are some limitations to this. In certain conditions, even a unilateral mistake of fact can occur withdrawing or voidable agreement. 

Types of Misrepresentation

There are three types of misrepresentation present in the contract:

• Fraudulent misrepresentation

Fraudulent misrepresentation will happen when a false representation is made and the party making the representation let say X knew it was false or was reckless as to whether it was correct or incorrect- the lack of an accurate belief in its truth will present it a fraudulent one. If A honestly believes the statement to be true it cannot be a fraudulent misrepresentation, negligence in creating a false statement will not result in fraud. However, if it can be shown that A suspected that the statement might be incorrect or wrong, but made no enquiries to check the position, that will be sufficient. It will not be mandatory to prove a dishonest motive.

• Negligent misrepresentation

Negligent misrepresentation under the Misrepresentation Act 1967 (MA 1967) befalls where a declaration is made by one contracting party to another negligently or without reasonable grounds for believing its truth. The test is an impersonal one.

There is no obligation to establish fraud. If the innocent party can prove the statement was false, it will be for the maker of the statement to establish that it rationally believed in the truth of the statement (that is, the representation).

A solution for negligent misrepresentation remain at common law, however, its use in contractual situations has been considerably lessened as a result of Section 2(1) of the MA 1967.

• Innocent misrepresentation

Misrepresentation made completely without fault can be described as an innocent misrepresentation.

If X is unable to show it had objective grounds to believe its declaration was true the misrepresentation will be fraudulent or negligent.

Suppression of Vital Facts

Raymond Woollen Mills Limited v. Income Tax Officer, Centre Circle Xi, Range Bombay And Others 

In the above-cited case, the appellant has argued that the Department has made a grievous mistake. In coming to the conclusion. In this case, the court does not have to give a final decision as to whether there is a suppression of evidence. The fact is not a thing to be considered at this stage. We are of the view that the Court cannot strike down the reopening of the case in the facts of this case. It will be open to the assessee to the understatement of profits. This information was obtained by the Revenue in a subsequent year’s assessment proceeding. There was prima facie of the fact on the basis of which the department could reopen the case further. The sufficiency or the correctness of the fact or material is not a thing to be considered at this stage.

Raj Kumar Soni Vs. State of U.P 2007

Here in the case again the suppression of material facts has been held to be the opposition of process of law and it has been held that the party guilty of not representing the right facts is not to be benefited with any perks as it has to be held that such a party would not have to knock the doors of the court with clean hands.

Remedies of Misrepresentation 

As we know the contract made in misrepresentation is voidable which is not done intentionally by the party. So by keeping this in mind, The remedies for misrepresentation are:

• Rescind: Rescind means to cancel. When the aggrieved party wants he can claim for cancellation of the contract and/or damages. Under contract law, rescission is defined as the unmaking of a contract between the parties. Rescission is the unwinding of a transaction. This is made to bring the parties, as far as possible, back to the position in which they were before they entered into a contract (the status quo ante).
• Insist upon the performance: The aggrieved party can claim to the first party who have committed misrepresentation to get the object in the manner which was prior to the contract that they directly.

Limitations available to remedies

A condition can be included in a contract that limits the remedies that will be available wherever a party has the right to make a misrepresentation claim. For instance, such a clause could limit the remedies to those available for breach of contract- definitely excluding the right of the innocent party to revoke the contract.

Representation of state of mind

Representation initiates and induces a contract. It is the information by which a contracting party decides whether to continue with the contract. A representation is an express or implied statement that one party to the contract forms to the other before or at the point of the contract. It is entered with regard to past or existing fact. An illustration might be that a seller of some commodity represents that no notification of patent infringement had been received.

A representation initially cannot be a part of a contract and a claim for damages due to a misrepresentation ordinarily would not be allowed. Instead, a claim that a misrepresentation induced a contract might be pursued in fraud, either to revoke the contract or for damages. In some cases, a claim might be based on the tort of negligent misrepresentation.

Consequences of Making a Misrepresentation

The consequences of misrepresentation are explained under the case of Bskyb V. EDS in this case, judgement passed in the year 2010, that EDS had made fraudulent misrepresentations as to its capacity to deliver a project within a specific timetable and in a particular manner that it had carried out a proper investigation to enable it to make this statement. The judge also found that it was a consequence of these misrepresentations that BSkyB had been induced to enter into a contract with EDS. The damages that could be payable as a result have been determined at £200 million or more. There was a frontier of liability in the contract to £30 million but both parties have accepted that such a frontier is not effective to limit liability for fraudulent misrepresentation.

Conclusion

Overall, by concluding the said factors we know that, administer a contract void or voidable based upon the specific circumstances of the case. If a contract is a void then it cannot be enforced by both of the parties, whereas if a contract is interpreted as voidable then although it is a valid contract it can be cancelled or revoked. Essentially, whilst a void contract cannot be performed, a voidable contract can depend upon either of the parties after they decide to cancel it. If there has been a misrepresentation or a mistake the contract may be declared void and therefore be abolished. If duress or undue influence has occurred, then the contract may be rendered voidable and thereby capable of being cancelled.

References

• http://www.mondaq.com/article.asp?article_id=686848&signup=true
• https://www.smartdraw.com/flowchart/flowchart-maker.htm
• https://uk.practicallaw.thomsonreuters.com/9-107-6848?transitionType=Default&contextData=(sc.Default)&firstPage=true&bhcp=1
• INDIAN CONTRACT ACT,1872 (Bare Act)

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

The post Misrepresentation under the Indian Contract Act, 1872: An overview appeared first on iPleaders.

This article is written by Mariya Paliwala of seventh semester, pursuing B.A.LL.B, at MohanLal Sukhadiya University College of Law, Udaipur, Rajasthan. This article consists of a detailed elaboration on the Citizenship (Amendment) Act, 2019 in the light of Indian Constitution, 1950.

Introduction 

India is perhaps the only nation which has included in its constitution the concept of citizenship under Part II (from Article 5 to 11).1 The prominent reason behind inserting citizenship into the constitution was overcome the problems of partition after the independence of India. 

Under Article 11 of the constitution the Parliament exercised its power and introduced a bill in both houses. Finally it got assent by the President of India on 12th December, 2019. Hence, this amendment was applicable on the principle Act i.e. the Citizenship Act, 1955. 

What is the Citizenship (Amendment) Act, 2019 (CAA)?

Amendment of Section 22

As per the amendment under Section 2, a proviso was added wherein the citizenship was granted on communal lines. It says that:

• Hindu,
• Jain,
• Parsi,
• Buddhist,
• Sikh,
• Christians.

The people of above mentioned communities have entered into India from the following neighbouring nations:

• Pakistan,
• Bangladesh,
• Afghanistan.

Before 31st December, 2014 will be given the Indian citizenship.

Constitutional Validity 

This amendment is unconstitutional on the basis of the following grounds:

• Against Secularism

The preamble of the constitution says that India is a Secular Nation. The word ‘secularism’ means that there is no state religion, the state does not promote or demote any group on the lines of religion. However, in this amendment the granting and non-granting of citizenship is based on religion, which is clearly evident from the absence of muslims in the proviso under Section 2 of the Amended Act. 

• Against the notion of Equality

Part III (Article 12 to 35) grants the fundamental rights and Article 14 and 15 as it talks about Equality Before the Law and prohibition of discrimination respectively. However, this Amendment Act is a result of the infringement of Article 14 and 153 where the government discriminated on the basis of religion thereby violating equality amongst Indians.

• Lack religious tolerance 

India is considered to be one of the religious tolerant nations of this world. It is the prominent example of ‘unity in diversity’. However, this law seems as if the law was enacted keeping in mind the politics on religious lines and enact discriminatory policies so as to promote extremist ideology. 

Impact on Assamese 

People in Assam are at mass protest and public demonstrations.They claim that this Citizenship (Amendment) Act, 2019 has violated the norms of Assam Accor. As per Clause 5(3) of Assam Accord, the date of deportation and detection of immigrants/ foreigners was after 24th March, 1971. 4However, now this amendment has new cut-off date i.e. 31st December, 2014, which is a matter of protest. Thus, the change in cut-off date and violation of Assam Accord is the basis of the protest.

Moreover, the Assamese are of the point of view that granting of citizenship to the Bangladeshi Hindus will not only adversely affect their linguistic and ethinic culture but also increase in the problem of unemployment in the state of Assam. 

Amendment in the III Schedule of the Principal Act

In the third schedule of the Citizenship Act, 1955, in clause (d) the aggregate period of residence and service of government faced changes wherein the phrase “not less than eleven years” was replaced with “not less than five years”. This amendment ment is applicable on Hindu, Parsi, Sikh, Bhuddhist, Jains and Christains. 

Constitutional Validity

This amendment is unconstitutional as it is a clear infringement of Article 16 which promotes equality in the matter of public employment.

However, under this Amendment Hindu, Parsi, Sikh, Bhuddhist, Jains and Christains will be eligible for service in government and residence after 5 years. But a Muslim has to wait for eleven years to get residence and sevice in goverment. Thus, this amendment is not uniformly applicable in whole of India.

Impact on Assamese

This change in the time period from eleven years to five years for the non-muslims for the purpose of residence and services in government will curb the original population of Assamese and may convert that population into minority thereby making the end of their culture. Not only this, the Assamese has to face humongous competition in front of them leading to rise in unemployment ultimately leading to the rise in poverty. Therefore, this amendment brings a new challenges in every sphere such as; 

• Social (in terms of society, distribution of resources, etc.);
• Political (in terms of contesting elections, voting rights and majority ideologies);
• administrative; (in terms of rule making and policies regulating and governance) 
• Ethnic and culture (in terms of language, rituals,norms, heritage etc.) 
• Economic areas (equal distribution of resources, employment, eradication of poverty etc.) 

What is NRC?

National Register of Citizens (NRC) is an official record of those people who are the legal citizens of India. This record is based on the demographic information who fit in the criteria established by the Citizenship Act, 1955 were considered citizens of India. 

Why was NRC updated in Assam? 

This was the unique exercise done in the state of Assam so as to keep the identity of the local people intact and to oust all the illegal immigrants/ foreigners who influxed into Assam from the neighbouring countries like Bangladesh. In 2013, a writ petition was filed by Assam Sanmilita Mahasangha & Ors in the Supreme court stating the demand that the names of the illegal immigrants must be struck down from the voters list.

Addressing this issue the apex court ordered that there must be updation in NRC and NRC must be in accordance with Citizenship Rules 2003 and Citizenship Act, 1955. The implementation of this order started in 2015 and the final NRC was released on 31st August, 2015 wherein 1.9 million applicant names were missing in the list.5

What is the scope of NRC and CAA together?

NRC coupled with CAA clearly discriminates on the basis of religion wherein the whole Indian society is divided into muslims and non-muslim. As per NRC a person will be asked to prove that he belonged to India as his ancestors were born and reside in India.

However, CAA provides citizenship to all the non-muslims. If in case a person is Muslim then he will not be entitled for the benifit under CAA. But if a person is muslim he has no choice but he has to prove that his ancestors were of Indian origin and if they failed to prove it they will be left with no rights.

Though, it must be taken into consideration that documents such as electricity bills or tac slips or birth certificate can be the eminent proof for any person to prove his/her nationality. However, under this Amendment Act no such proof is taken into consideration. Instead a person has to prove it by tracing the existences of his ancestors.

Legislature’s intent behind CAA

Most of the parliamentarians claims that CAA is not anti-muslims. However, they claim that by leaving out Muslims, the legislature dimension can be clearly derived. They claim that the idea is to provide protection to the religiously persecuted minorities in the muslim majority neighbouring countries like Bangladesh, Afghanistan and Pakistan. Moreover, it is assumed that Muslims can not bereligiously persecuted in muslim majority countries. 

It is also said that India is not only the home of Hindus but also Sikh, Jain, Christains, Buddhist and Parsi. 

Arguments against CAA

Violative of the Constitution of India

The Citizenship (Amendment) Act, 2019 is completely based on the idea of facism and extremism. Moreover, this amendment is clearly the infringement of Secularism and violation of Fundamental rights (Article 14 and 15).

Inefficiency of India in dealing with already existing problems

India is already facing the problems such as poverty, malnutrition, unemployment, overpopulation. India is the second largest in the world in terms of population. Moreover, it does not have enough resources and employment opportunities for its own citizens, how can it provide all these things to immigrants irrespective of any caste or religion.

It is politics based on religion 

Most people argue that the ideology of this government is based on Hindutva. And Citizenship (Amendment) 2019 is a step towards converting the secular nation into an extremist nation. 

Strain on the Indian Economy

The prominent argument is that this amendment proved to be a highly disruptive and can prove to be a strain on the economy in the long run. 

Disrupt the social structure

By giving citizenship to foreigners/ immigrants even though Hindu or Parsi or Buddhist or Jain or Christan will end up destroying the social status of Indians. Original inhabitants will become a minority in that area. This will not only lead to diminish their cultural, linguistic identity but also curb the opportunities in public employment, education leading to unemployment and poverty, which is now the situation in Assam.

Judiciary on the CAA

Due to prolonged protest against the Citizenship (Amendment) Act, 2019 lead to 21 people injured in the violence. To avoid these riots and violence the Supreme Court asked the centre to publicise the real information pertaining to the Citizenship (Amendment) Act, 2019 so as to curb the circulation of fake news. A betch headed by Chief Justice of India S.A. Bobde decided to analyse and examine constitutional validity of the CAA in the month of January. 

Student’s reaction to CAA

The student agitated against the Citizenship (Amendment) Act, 2019. Students considered the CAA to be an anachronism in itself.It can be said that there was nothing directly or indirectly adversely affecting the interests of the students in particular. The CAA is considered to be anti-Muslim, which perhaps is one of the significant reason for the students from Jamia Millia Islamia and Aligarh Muslim University to take the leadership of the agitation with the politically notorious JNU and Jadavpur Universities joining in. But this has also exposed the sectarian nature of the revolt. Now the issue is likely to be diverted as atrocities of the police on Jamia students. However, as a matter of fact it is actually the youth who are the future of this nation and their point of view must be given the utmost importance. 

Students in most of the universities raised their voice in solidarity against CAA. The prominent universities like Jamia, Aligarh Muslim University (AMU), Maulana Azad National Urdu University (MANUU) or Nadwa College. It also included unusual centres of political action like Jadavpur University or Jawaharlal Nehru University (JNU) or The Tata Institute of Social Sciences. This time there was a huge outrage amongst the students from the AIIMS, IITs, IIMs, Indian Institute of Science and even the private universities joined their counterparts in premiere public universities in Chennai, Pune, Chandigarh, Delhi, Kolkata, Lucknow and Bhopal, besides institutions in small-town India, to express solidarity with the students in Jamia.

Conclusion 

Therefore, it can be concluded by asking a few questions:

Firstly, shouldn’t such kinds of law be made for the Hindu refugees coming from Sri Lanka?

Secondly, if providing shelter and doing charity is the notion of the government then shouldn’t it must be equally applicable on all the refugees irrespective of the fact that from where they are coming from?

Thirdly, is it rationally correct to apply autocratic laws on people and then cut-off there internet connections so that their Freedom of Speech and Expression under Article 19 (Part III) is curbed in totality?

wherefore, it can be said that government has empowered under Article 11 (Part II) of the Constitution of India to enact laws pertaining to citizenship as it thinks fit. However, Article 13 (Part III) restricts the parliamentarians to make laws which are in derogation with the fundamental rights of the Indians. And this Amendment is a violation of Part III of the constitution. 

For instance, genocide in Germany was not the result of gas chambers, however it was the result of ‘hate speech’ which was delivered by Adolf Hitler. Similarly, in India the arbitrary provisions pertaining to Citizenship (Amendment) Act, 2019 is a result of communal hatred and party politics on the line of religion. 

References

1. Know more about laws relating to citizenship in India; https://blog.ipleaders.in/law-related-to-citizenship-in-india/
2. http://egazette.nic.in/WriteReadData/2019/214646.pdf
3. https://blog.ipleaders.in/fundamental-right-right-to-equality/
4. Assam Accord; https://assam.gov.in/en/main/ASSAM%20ACCORD
5. How fate of 19 Lakh people hang in balance in Assam after the final NRC’s List, India Today; https://www.indiatoday.in/programme/in-depth/video/in-depth-how-fate-of-19-lakh-people-hangs-in-balance-in-assam-after-nrc-s-final-list-1595094-2019-09-03

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

The post Validity Citizenship (Amendment) Act, 2019 in the light of Indian Constitution appeared first on iPleaders.

The article has been written by Ayush Verma, a 2nd year student of RMLNLU, Lucknow. The article discusses the ways for acquisition of citizenship under the Citizenship Act, 1955 and provides an analysis of the Citizenship (Amendment) Act, 2019.

The Parliament has passed the Citizenship Amendment Act, 2019 (CAA) on 11th December. In the amendment, persons belonging to minority communities of Hindus, Jains, Sikhs, Christians, Buddhists and Parsis from Afghanistan, Pakistan and Bangladesh, who have entered into India on or before 31st December 2014 have been excluded from the definition of “illegal immigrants”, given in Section 2(1)(b) of the Citizenship Act. It has also reduced the period of acquisition required for getting Citizenship through Naturalisation from eleven years to five years for these communities. The amendment is facing several backlashes across India, majority being from the North-eastern States. The main objection is regarding the religious inclement of the amendment, as violative of Article 14 of the Constitution which guarantees the right to equality. 

In Assam, the amendment has started a lot of violent protests as it is in conflict with the Assam Accord of 1985, which asks for identification and deportation of illegal immigrants who have come to Assam from Bangladesh, in order to protect their culture and tradition. Several petitions have been filed in the Supreme Court challenging the constitutional validity of the Citizenship (Amendment) Act, 2019.

What is the Citizenship Act, 1955?

The Citizenship Act, 1955 specifies the ways by which Citizenship of India can be acquired. It says that Citizenship in India can be acquired by five ways: by birth, by descent, registration, naturalisation (increased residence), and by the incorporation of a territory into India.

What are the ways for the acquisition of Citizenship under the Act?

Citizenship by birth – Section 3

Every person shall be a citizen of India by birth who is born in India:

• On or after 26th January 1950 but before 1st July 1987.
• On or after the 1st July 1987 but before the commencement of the Citizenship (Amendment) Act, 2003 where one of his parents is a citizen of India at the time of his birth.
• On or after the commencement of the Citizenship (Amendment) Act, 2003 where― 

(i) both of his parents are citizens of India; or

(ii) one of his parents is a citizen of India and the other is not an illegal migrant at the time of his birth.

A person shall not be a citizen by virtue of their birth where:

• His father or mother possesses such immunity from suits as is provided to an envoy of foreign sovereign power authorized to the President of India and is not a citizen of India; or
• His father or mother is an enemy alien and his birth happens in a territory occupied by the enemy.

Citizenship by Descent – Section 4

Every person shall be a citizen of India by descent who was born outside India:

• On or after 26th January 1950 but before 10th December 1992 if his father is an Indian Citizen at the time of his birth.
• On or after 10th December 1992 if either of his parents is an Indian citizen at the time of his birth.

However after the commencement of the Citizenship (Amendment) Act, 2003, a person shall not be considered a citizen of India if their birth is not registered at an Indian consulate within one year of his date of birth, or with the permission of the Central Government, after the expiry of the said period. The application of registration shall contain an undertaking from the parents declaring that their minor child does not hold a passport of another country.

Position of minor

A minor who is an Indian Citizen under this section and is also a citizen of some other country shall cease to be a citizen of India if he does not renounce the citizenship of that country within six months of attaining the full age.

Citizenship by Registration – Section 5

Any person may be registered by the Central Government as a citizen of India, on his application, if such person is not an illegal immigrant and belongs to the following categories:

1. Who is of Indian origin and is ordinarily resident of India for seven years before making an application under Section 5(a).
2. Who is of Indian origin and is ordinarily resident in any country or place outside undivided India.
3. Who is married to a citizen of India and is ordinarily resident in India for seven years before making the application.
4. Who is a minor and his parents are citizens of India.
5. Who is of full age and capacity and his parents are registered as citizens of India.
6. Who is of full age and capacity, and if he himself or either of his parents was an earlier citizen of Independent India, and has been residing in India for one year before making an application for registration.
7. Who is of full age and capacity and registered as an Overseas Citizen of India for five years and has been residing in India for one year before making an application.

For the purposes of clauses (1) and (3), a person is deemed to be ordinarily resident if he resided in Indian for twelve months immediately before making the application and for the six years in the aggregate in the eight years preceding twelve months.

Citizenship by Naturalisation – Section 6

A foreigner who is not an illegal immigrant and is ordinarily resident in India for twelve years (throughout the period of twelve months immediately preceding the date of application and for eleven years in aggregate in the fourteen years immediately preceding twelve months) can get Citizenship of India by Naturalisation subject to other qualifications as specified in the Third Schedule to the Act.

However, if in the opinion of the Central Government, the applicant has rendered some distinguished service to the cause of science, philosophy, art, literature, world peace or human progress generally, it may waive all or any of the conditions specified in the Third Schedule.

Citizenship by incorporation of territory – Section 7

Where a territory becomes a part of India, the Central Government may by its order specify the persons who shall become citizens of India because of their connection with that territory.

Who are Illegal Immigrants under the Citizenship Act, 1955?

According to Section 2(1)(b) of the Act, “illegal immigrant” means a foreigner who enters India:

1. Without a valid passport or other travel documents and such other document or authority as may be prescribed by or under any law in that behalf; or
2. With valid documents but stays in India beyond the permitted period of time.

Laws governing Illegal Immigrants

Illegal immigrants can be deported or imprisoned according to the Passport (Entry into India) Act, 1920 and Foreigners Act, 1946. These Acts provide for regulation regarding entry, exit and residence of foreigners by the Central Government.

Foreigners Act, 1946

Under Section 3(2)(c) of the Foreigners Act, the Central Government has the power to order the deportation of a foreign national. This power to deport or identify foreign nationals has also been given to State Governments, Union Territories and the Bureau of Immigration.

Passport (Entry into India) Act, 1920

Section 5 of this Act says that the Central Government has the power to directly remove any person who has entered into India illegally. It covers such a person who has entered without a Passport or has not complied with the conditions of the Passport.

What was the need for amending the Citizenship Amendment Act, 1955?

The need for amending the Act was to give an identity to a certain specific class of illegal immigrants. There are thousands of people who have faced religious persecution in the countries of Afghanistan, Pakistan and Bangladesh. As a result of which, they fled to India to get a safe haven. Before this Act, these immigrants were not allowed to apply for Indian Citizenship as they came to India illegally. Also, the previous Act did not allow people to get Citizenship by Naturalisation unless they are able to show that they have been residing in India for eleven years. So the Amended Act seeks to give these people Indian Citizenship who have come to India after facing persecution in the three countries.

There was also no provision to cancel the registration of an Overseas Citizen of India (OCI) where such a person has violated the provisions of the Act or any other law for the time being in force, and the opportunity of being heard was also not available to them. Therefore, the 1955 Act needed reforms.

What is Citizenship (Amendment) Bill, 2016?

The Citizenship (Amendment) Bill, 2016 was brought to change the definition of illegal immigrants. The Bill provided for citizenship to illegal migrants from Afghanistan, Bangladesh and Pakistan who belonged to these religions: Buddhist, Hindu, Jain, Sikh, Parsi or Christian. The Bill also reduced the number of continuous years of stay in India that is needed to get Citizenship by Naturalisation from eleven to six years. The Bill added one more ground for the cancellation of registration of Overseas Citizenship by the Central Government under Section 7D of the 1955 Act i.e if the OCI has violated any provisions of this Act or any other law for the time being in force.

Was the bill passed by Lok Sabha?

The bill was introduced in Lok Sabha on 19th July 2016. It was then referred to a Joint Parliamentary Committee, which submitted its report on 7th January 2019. The bill was subsequently passed by the Lok Sabha on 8th January. It was referred to Rajya Sabha but consequently, due to the dissolution of 16th Lok Sabha, the bill lapsed.

What is the Citizenship (Amendment) Act, 2019?

The Citizenship (Amendment) Act, 2019 seeks to amend the Citizenship Act, 1955 by giving citizenship rights to illegal immigrants, belonging to certain religious minorities who have entered into India on or before 31st december 2014, after facing persecution in the countries of Pakistan, Afghanistan and Bangladesh. It has also relaxed the time limit for getting Citizenship by Naturalisation from eleven years to five years for these communities. The amendment has also made new provisions regarding OCI cardholders.

Investigation Bureau, from his records, gave a count on 31,313 people who are going to be the immediate beneficiaries after this amendment, among whom Hindus constituted the largest chunk, 25,447, followed by Sikhs at 5,807, Christians at 56, and Buddhists and Parsis numbering only two each.

It was passed by the Lok Sabha on 10th December and by Rajya Sabha on 11th, and finally after receiving the assent of the President on 12th December has become an Act. However, it is yet to come into force subject to the notification of the government.

Who all are covered under the bill?

The amendment covers illegal immigrants belonging to six communities, who are Hindus, Sikhs, Jains, Parsis, Christians and Buddhists from Afghanistan, Pakistan and Bangladesh, and who have entered into India on or before 31st December 2014. Persons belonging to these communities who have entered into India illegally (i.e. without passport/other documents or have been staying beyond the permitted period) would be entitled to get Indian Citizenship. In 2015, changes were also done in the Foreigners Act and Passports Act to allow non-muslims refugees from these countries to stay back in India even if they entered without valid documents. The government has favoured these communities on the basis that these are persecuted minorities in the three Countries.

Who all are left out?

The amendment has left out illegal immigrants belonging to the Muslim Community of Afghanistan, Pakistan and Bangladesh. Although Muslims constitute the largest minority religion of India, they have not been given rights to acquire citizenship similar to the non-muslim communities. It has also not recognised Sri Lankan Tamils and Rohingya Muslims in Myanmar who face religious persecution in their countries. Also, it has no provision for Muslim sects such as Ahmadiya and Shia who also face persecution in Pakistan.

Which states are given exemptions?

Seven North-eastern states have been given exemptions from the amended provisions. The Act says “Nothing in this section shall apply to tribal areas of Assam, Meghalaya, Mizoram or Tripura as included in the Sixth Schedule to the Constitution and the area covered under the ‘Inner Line Permit’ (ILP) notified under the Bengal Eastern Frontier Regulation, 1873.” The tribal areas that are excluded include Karbi Anglong in Assam, Garo Hills in Meghalaya, Chakma district in Mizoram, and Tribal Areas district in Tripura. The areas that fall under the “Inner Line Permit” are Arunachal Pradesh, Mizoram and Nagaland. This means that to enter these areas or pass through them, the Indians from other states would have to get “Inner Line Permit. It is being feared that Manipur might get affected most due to the Amendment, therefore, Home Minister Amit Shah has announced to bring Manipur under the ILP. However, Chief Minister of Sikkim P S Tamang had written to Amit Shah asking for an exemption from the Amendment, underlining the Constitutional safeguard under Article 371(F) which governs the state of Sikkim and provides it special status.

What is the position of Overseas Citizens of India under the Act?

The Amendment has added that a foreigner may apply for registration as OCI if they are of Indian Origin (i.e former Citizen of India or their descendants) or the spouse of such a person is of Indian Origin. It also seeks to allow the cancellation of their OCI registration if there is a violation of any law as notified by the Central Government. However, the amendment does not provide any guidance on the nature of laws that may be notified by the Central Government for the applicability of the provision. Also, giving the Central Government power to notify such laws whose violation would lead to cancellation of OCI Card is a wide discretion that may amount to an excessive delegation by the legislature. The Supreme Court in the case of Humdard Dawakhana v Union of India has noted that a policy, standard or rule must be set by the legislature while delegating the power to the executing authority to give guidance, which is necessary to set limits on the authority’s powers and to avoid any arbitrariness in exercise of powers. A provision is also added to give the opportunity of being heard to the OCI cardholders before the cancellation.

Arguments supporting the Act

The Government has clarified that Pakistan, Afghanistan and Bangladesh are Islamic Republics and hence, the Muslims living in those countries cannot be said to be persecuted. It has further assured that application from any other community will be decided on a case to case basis.

Home Minister Amit Shah has referred to Nehru-Liaquat Pact that was signed between India and Pakistan in Delhi in 1950. The Pact provided for better treatment of minorities in both countries. Home Minister said that the Pact failed to achieve its objective in protecting minorities in Pakistan, and this flaw is being remedied by the Indian Government through the amendment.

The NDA Government has argued in the Statement of Objects and Reasons that: 

Millions of citizens of undivided India, after the partition between India and Pakistan on religious lines in 1947 were staying in Pakistan and Bangladesh (previously East Pakistan) from 1947. The Constitution of Pakistan, Afghanistan and Bangladesh provide for a specific State religion i.e Islam. As a result of which many persons belonging to Hindu, Jain, Sikh, Buddhist, Parsi and Christian communities have faced persecution on grounds of their religions in those countries. Some people from these communities in these countries have also fears about facing such persecution in their day-to-day life, where the right to practice, profess and propagate their religion has been obstructed. Many persons out of such fear have fled to India to seek shelter and continued to stay in India even after travel documents have expired or they have incomplete or no documents.

For reduction of period from 11 years to 5 years for the persecuted minorities in the three countries, the Government argued that imposing condition of 11 years residence to get citizenship by Naturalisation “denies them many opportunities and advantages that may accrue only to the citizens of India even though they are likely to stay in India permanently.”

Arguments opposing the Act

Is there a violation of Article 14?

Article 14 of the Constitution of India says that “State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India.” The phrase “within the territory of India” conveys that equality should be given to all persons residing in India which includes foreigners and citizens. In the case of Indira Gandhi v Raj Narain, the court also recognised the “Right to Equality” as one of the basic features of the Constitution. This rule is not absolute and permits classification between groups of people if there exists some rationale that serves a reasonable purpose, as was held in the case of State of West Bengal v Anwar Ali Sarkar. The act shall also pass the reasonable classification test as was given in the case of State of Madras v. V.G. Row, which underlined two principles for the test i.e firstly there should be a reasonable classification and secondly, there should be a nexus between the object sought to be achieved and legislation. Therefore, it needs to be checked whether there exists some reasonable rationale for the classification of illegal immigrants on the basis of 

• their country of origin,
• religion,
• date of entry into India, and
• place of residence in India.

Country of origin

The amendment has classified illegal immigrants on the basis of their country of origin. It has only allowed those immigrants who belong to Afghanistan, Bangladesh and Pakistan to get citizenship of India. It was stated in the Statement of Objects and Reasons that these Countries have a State religion as a result of which religious minorities in these nations have faced persecution. It stated that millions of citizens of undivided India were living in Pakistan and Bangladesh after the partition and hence they are given differential treatment but it has not specified the reasons for the inclusion of Afghanistan.

There is a history of persecution of Tamil Eelams, a linguistic minority in Sri Lanka, and Rohingya Muslims, a religious minority in Myanmar, who have also been facing persecution. And as a result of persecution in these countries, many people have fled to India as a refugee. Given that the objective of the amendment is to provide citizenship to migrants who are fleeing religious persecution, it is not clear why the amendment has excluded the minorities from these countries who are also facing persecution.

Religion

The amendment has included illegal immigrants from non-muslim communities of Afghanistan, Pakistan and Bangladesh to get citizenship of India. However, it has excluded the Muslims who might have also faced persecution. It also does not include Muslim sects of Ahmediya and Shia who also face persecution in Pakistan. It is not clear why the Act only allows only non-muslim communities to get citizenship.

Date of entry into India

The amendment only allows people who entered India before 31st December 2014 to apply for citizenship. The question arises why the differential treatment is given to migrants who have entered in India before and after that date.

Place of residence

The amendment gives differential treatment to migrants belonging from tribal areas of Assam, Meghalaya, Tripura and Mizoram as given in the sixth schedule. The sixth schedule in the Constitution of India was brought to aid in the development of tribal areas through autonomous councils while protecting the indigenous population in these areas from exploitation and preserving their distinct social customs. It has also exempted migrants belonging from “Inner Line Permit” areas. When an illegal immigrant belonging from these areas gets citizenship, he will be subjected to the same restrictions, as are applicable to other Indian citizens, in these areas. There is no clear reason given as to why the illegal immigrants residing in these areas have been excluded from the amendment.

Is the Act against Secularism?

Every legislation passed in India shall not violate basic structure doctrine. Therefore any legislation that fails the test of “basic structure” is unconstitutional. In the case of S.R. Bommai v. Union of India, it was held that Secularism is a part of the “basic structure”. Therefore, any Act passed by the Parliament must not be against secularism. However, the recent amendment has only provided for non-Muslims to get citizenship if they have come before 31st December 2014, which is inimical to the idea of Secularism.

Why the people of Assam are protesting against it?

A lot of protests have started in Assam after the Bill was passed by the Lok Sabha on 10th December 2019. The bill seeks to nullify the purpose of the National Register of Citizens (NRC) that was published this year. The NRC was passed to eliminate thousands of illegal Bangladeshis who were living in Assam. However, after the exercise, 19 lakh people found themselves excluded from NRC. These people included Hindus and Muslims. Now the recent amendment seeks to give citizenship to the non-muslims who have entered illegally in Assam. But it is silent when it comes to providing citizenship to the Muslims. The people of Assam are fearing that accommodating such migrants might pose a threat to their culture, tradition, language and ethnicity of the region, which has become the cause of their protests. Allowing illegal immigrants to live in Assam would also create an economic burden on the State and may decide the political future of Assam.

Clause 6 of the Assam Accord

Assam Accord was signed between the Union Government and leaders of the All Assam Students Union (AASU) in 1985, at the end of a six-year-long agitation demanding the expulsion of illegal immigrants from Bangladesh. Clause 6 of the accord talks about providing constitutional, legislative and administrative safeguards to protect, preserve and promote the cultural, social, linguistic identity and heritage of the Assamese people. However, the accord has not been implemented as the committee which was formed to give a roadmap for its implementation has not submitted its report yet. The Accord said that any person who cannot prove their ancestor’s presence before 24th March 1971 would be deemed as an illegal immigrant. The NRC was a promise made in the Assam Accord to identify and deport illegal immigrants but after the Citizenship (Amendment) Act, 2019, illegal immigrants belonging to non-muslim communities cannot be deported.

What is the difference between CAA and NRC?

There is a conflict between the CAA and NRC as the government has been trying to implement both. However, there are differences between the two:

• NRC is aimed at weeding out people who have entered into Assam from Bangladesh illegally after 24th March 1971 but CAA is aimed at giving citizenship to the six communities that came to India before 31st December 2014 after facing persecution in the countries of Afghanistan, Bangladesh and Pakistan.
• NRC is not based on religion but CAA is.
• The base year for NRC is 1971 but for CAA, it is 2014.
• The NRC is only applicable to Assam till now but CAA is applicable to India as a whole, except some areas as specified in the Act.

Conclusion

The major issue with the amendment is that it provides citizenship only to non-muslim immigrants who have live for five years from the the three countries. However, any foreigner can still apply for citizenship but can only be registered after they have lived in India for 11 years i.e by the normal process of naturalisation. Presently, the petition challenging the amendment has been pending in the Supreme Court which will decide its constitutional validity.

References

• https://www.insightsonindia.com/2019/12/10/rstv-the-big-picture-citizenship-amendment-bill/
• https://m.economictimes.com/news/et-explains/citizenship-amendment-bill-what-does-it-do-and-why-is-it-seen-as-a-problem/articleshow/72436995.cms
• https://indianexpress.com/article/explained/citizenship-amendment-bill-2019-parliament-winter-session-nrc-6122846/
• http://prsindia.org/billtrack/citizenship-amendment-bill-2019
• https://www.indiatoday.in/india/story/citizenship-amendment-bill-all-you-need-to-know-about-cab-1627516-2019-12-11

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

The post Citizenship (Amendment) Act, 2019: Everything important you should know about appeared first on iPleaders.

Hi, I am Anubhav from team Lawsikho. I have been playing music since I was 3. Music, specifically acoustic/indie genre, motivates me. 

Pushes me. 

Inspires me to look at different colours of life from a panoramic view. 

Javed Akhtar’s style of lyrics, particularly Toh Zinda Ho Tum moves my soul. Whenever I get an opportunity, I plug my earphones in and listen to Farhan Akhtar’s voice, Pighle Neelam Sa Behta Hua Ye Sama….Toh Zinda Ho Tum.

A strange thing happened yesterday. My WhatsApp flooded with messages. Senior IPS officer, Mr Sandeep Mittal quoted my video on Section 121 of the Indian Penal Code over a Twitter War. The Tweet was for Farhan Akhtar on his Statement on organising a rally against the newly amended provision of the Citizenship Amendment Act.

Overnight, my video went viral. I saw myself in almost all the leading newspaper gossip sections. 

Friends and colleagues congratulated me for my newfound fame. They asked me to share this as a success story. 

Honestly, I am happy and overwhelmed – at least, Farhan Akhtar might have seen my video. This is great validation for me.

While this empowers me, such things happen once in a blue moon. They are serendipitous accidents. I cannot really count on them. 

Let me share with you the real reason for my motivation for performing my work as a budding lawyer. 

This reason is far stronger.

I started working with iPleaders as an author on the iPleaders blog. I was paid INR 100 for a legal article. 

Gradually, I took up the entire responsibility of managing the posts on iPleaders Blog and in two years, the blog started hitting new records in terms of viewership. 

Click Above

10,00,000 visitors a month. 

Many people identified me to be the catalyst for the growth of the iPleaders Blog. I was a mini success story. 

I did this while I was still studying law, sitting in my dorm room with my cosy blanket over me, a cup of coffee and the college wifi connection.

After a couple of years, I decided to take a different path. 

I started working with LawSikho for an entirely new project. Our aim was to create a video library for all the subjects taught in law school over a period of 5 or 3 years, as the case may be. 

We started well. We created a library for CrPC and IPC. You can check them on our LawSikho Youtube Channel. 

Playlist of CrPC

Playlist of IPC

Although I made tremendous effort in creating an exhaustive, well explained, classroom experience of learning the law, it did not work out as planned and I had to quit the project.

But I learnt a lot about the law, about teaching and about recording YouTube videos. 

I can now counsel and train other law students really well, whether it pertains to guidance regarding their career choices or coaching them on how to write and publish articles which are widely read.    

In the meanwhile, Abhyuday also asked me to share my experience in legal research and writing to train students of LawSikho courses on how to write better. 

I had been a senior editor headed the work of interns for iPleaders Blog. Having trained more than a thousand students from all over the country on how to write articles, I gladly took up the opportunity. 

For this month, I am also guiding various students and young lawyers on the career choices they can make.  

Today, I spoke to a mother of twins, who was undergoing a tough marriage. Rejected thrice in the Interview rounds of UPSC CSE, she asked me how to write an article on, “Can daughter-in-law seek maintenance for herself, her children as well as for her father and mother in law”.

Being a student, she trusted me and told me what she is undergoing right now and wishes to write an article for all those who are undergoing a similar situation. She wanted the law to be accessible for all those who are in need.

I guided her in making a structure for her article, and identification of the points she could cover.

Very soon, she understood how to go about the project. 

I was clear that she will complete this. 

I was extremely joyous.  

What is common in all the incidents above is that I had acquired some very unique skills. It drove me towards excellence. It puts me in a position to contribute in a big way to others. 

This joy is far more reliable and consistent, in comparison to my video going viral.  

Over the past few years, I have developed my skills in different areas – legal research, writing blog posts, managing others, SEO, etc. significantly. I have worked on various tasks that others do not perform. 

Acquisition of these skills has driven me towards excellence. It also puts me in a position to contribute to others. It enables others to repose their trust in me and to count on me. 

You can have this experience too. 

Build your ability to contribute. Acquire skills. Use them to contribute or provide value to others.

You need to work consistently over a period of time to acquire unique skill-sets. 

If you have no skills, you cannot contribute. You cannot pursue excellence without acquiring skills.

It just took me two years of serious work to grow iPleaders blog to one of the most widely read legal blogs in the world. 

Who would have known that a 4th year law school kid could achieve this? Many people who do not know me think I am some senior practitioner.  

Imagine where you can be if you focus two years of your life on acquiring skills that enable you to contribute to a client.   

You might be far ahead of your peers, in fact, even far ahead of some lawyers with 2-3 years of experience. 

How do you plan to build your skill-sets? How can you pursue excellence? 

Share your responses with me. I’ll reply to everyone. Also, let me know if you would like to have a conversation with me. 

If you want to acquire skills to serve clients as a lawyer, here are some of the courses which are currently open for enrolment:

DIPLOMA 

Diploma in Business Laws for In House Counsels

Diploma in Companies Act, Corporate Governance and SEBI Regulations

EXECUTIVE CERTIFICATE COURSES

Certificate Course in Advanced Corporate Taxation

Certificate Course in Insolvency and Bankruptcy Code

Certificate Course in Advanced Civil Litigation: Practice, Procedure and Drafting

Certificate Course in National Company Law Tribunal (NCLT) Litigation

Certificate Course in Arbitration: Strategy, Procedure and Drafting

P.S. I’m really excited to start conducting the writing sessions in these courses! 

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

The post What motivates you to pursue excellence in law  appeared first on iPleaders.

This article is written by Shivangi Tiwari, a second-year student pursuing B.A. LL.B. from Hidayatullah National Law University, Raipur. This is an exhaustive article dealing with review Procedures under Cr.P.C.

Introduction

The processes involved in the criminal justice system can have a drastic impact on the lives of people involved in it, especially the rights which are guaranteed to people under the constitution of India like Right to Life and Personal Liberty. It is a well known saying that “to err is human” and judiciary being one of the institutions created by humans is prone to committing errors. Therefore, in order to prevent the miscarriage of justice which defeats the very purpose of the judicial system the need for the creation of some system to be created to ensure that justice is fairly delivered is imperative and where there is a miscarriage of justice, some rectifying mechanism should come into play. Keeping in view this need in order to prevent the fallibility of the judicial system the Code of Criminal Procedure, 1973 has devised various provisions. Section 372 to Section 394 of the Code of Criminal Procedure deals with the provisions related to appeals.

However, in exceptional cases no right to appeal lies with the person. In order to prevent the situation in which the aggrieved party does not remain remedy less, The legislators have incorporated the concept of review under the Code of Criminal Procedure, which is called “Revision” which has been provided under the Code to uphold the ultimate goal of the entire judicial system which is deliverance of justice. Section 397 to Section 405 of the Code include the provisions with respect to the revisionary jurisdiction granted to the higher courts and the procedure by which the higher courts exercise this jurisdiction guaranteed to it. The powers granted to the high courts are very wide in nature and are completely discretionary in nature.

In practicality, the provision of an appeal is a legal right conferred to the parties, revisionary power conferred to the criminal courts is completely discretionary in nature and therefore no party can claim it as a matter of right. In criminal cases, at least one appeal is granted to an accused by the legislature, whereas there is no such right in instances of revision. The courts have time and again discussed the difference between appeal and revision.

In Hari Shankar vs Rao Ghari Chowdhury, the Supreme Court held that there is a difference between appeal and revision. The right of appeal also consists of right of rehearing as well unless the statute conferring the right of appeal limits the rehearing in some way. The power to hear a revision is generally given to a superior Court so that it may satisfy itself that a particular case has been decided according to law.

Object and scope

Chapter XXX of the Code of Criminal Procedure deals with two important jurisdictions, which are:

• Revision;
• Reference.

Under Section 395 reference jurisdiction can be invoked by any court of Metropolitan Magistrate. The Code makes it necessary that the reference jurisdiction can be made only on the question of law which may include the validity of any Act, provision which may arise during the hearing of any case.

The revisional jurisdiction on the other hand under Section 397 can be invoked either by:

• High Court; or
• Sessions judge.

Under revisional jurisdiction, any higher court can call for the record of the case from the court subordinate to it. According to Section 398 of the Code, the objective of revisional jurisdiction is to call for further enquiry in cases where the court finds that justice has not been meted out to the parties fairly. According to Section 401, in case of any proceedings of record by the High Court itself or otherwise comes to its knowledge, the High Court in its discretion has the authority to exercise any of the powers which are conferred upon the appellate court under Section 386, Section 389, Section 390 and Section 391 or the powers conferred on Sessions court under Section 307.

The authority which the High Courts have over the other Criminal courts in India is guaranteed to it not only by the Code of Criminal Procedure but also by the Constitution of India. Besides the appellate jurisdiction, the authority possessed by the High Courts over the other courts is the power of superintendence guaranteed to the High Courts by Article 227 of the Indian Constitution.

According to subsection 1 of Section 395, the reference jurisdiction is held only by the Court of sessions or Metropolitan Magistrate. A judicial Magistrate has the authority of making reference only under subsection 2 of Section 395. 

Reference of the high court

In its literal sense, the term ‘Reference’ means to put forward something in front of any person in order to obtain his opinion on the thing so forwarded to him. Section 395 of the Code of Criminal Procedure confers the right to the subordinate criminal courts to refer cases to the High Court. The Section provides that the subordinate courts may approach the High Court of the respective states where they are located and may refer a case to the High Court so approached in order to obtain its opinion in cases where the subordinate courts are satisfied that the particular case requires a judicial interpretation by the higher judiciary. The right of the subordinate courts can be exercised in two situations, which are as follows:

• When the validity of the Act, ordinance or any regulation is in question and the court thinks that the validity of such Act, ordinance or any regulation is doubtful;
• When in any case here is a question of law involved which the court thinks requires the interpretation of the High Court.

Prerequisites for reference under Section 395

• The case should be pending before the court: It is important that the case in which the validity of any law is in question should not be decided and must remain pending before any court of law. No specific stage of proceeding has been expressly mentioned under the provision and therefore as a general rule, the trial court can refer to the High Court at any stage of the proceedings whenever it deems fit. However, where the trial court has already decided a case then it can not refer the case to the High Court and only parties to the trial can approach the higher courts by way of revision.
• The case should necessarily involve a question of law: Normally the question before a trial court is whether the accused in the trial is guilty of the offence of which he is charged with. However, during the proceedings, the question of the validity of any law may arise before the court which the court could take up to the High Court for reference. For example in Mohammad Altaf Mohand And Anr. vs C.B.I And Ors., the validity of Armed Forces (Special Powers) Act, 1958 was challenged which gave the power of search and seizure to the military officers and in the present case the accused were the military officers who were charged with rape and murder and it was contended on behalf of the petitioners that the said Act gave unnecessary powers to the military officers.
• The law which is in question must be in the form of Act, ordinance or regulation: The provision does not specifically mandate that the law should essentially be a primary legislation and it can even be an ordinance or a delegated legislation which can be forwarded to the High Court for its reference. In Dashrath Rupsingh Rathod v. State of Maharashtra & Anr, the validity of Negotiable Instruments (Amendment) Act, 2015 was in question and the validity provided by the ordinance to the courts was challenged.
• The courts must believe that the law in question is invalid: The court which is hearing the matter should have a sufficient reason to believe that the law which is in question is invalid because of any reason which may be a violation of any of the provisions of the Constitution or it is arbitrary and violates the principles of natural justice.

Reference to high court and post reference procedure

Reference to High Court

• Provisions with respect to reference which can be made by the courts subordinate to High Courts are contained under Section 395(1) of the Code of Criminal Procedure and it empowers the courts subordinate to High Courts to refer any case pending before it to the higher courts which involves a substantial question of law regarding the validity of the Act, Ordinance, regulation or any provision which in the opinion of the court should be inoperative. The word ‘regulation’ is used in the sense in which the General Clauses Act of 1897 defines it;
• Subsection 2 of Section 395 provides that in any case before the subordinate court does not fall under subsection 1 of Section 395, then the subordinate courts shall refer to the judgements delivered by the higher courts earlier. The court makes a reference under subsection 2 of section 395;
• Subsection 3 of Section 395 provides that any court which makes a reference under subsection 1 and 2 of the Section shall in the meantime either commit the accused to jail, release him on bail and may call him when the court holding the proceedings may require. In Mahesh Chand v. State of Rajasthan, the court subordinate to High Court made reference to the High Court about a bail application which was by the time the reference was made was already disposed of and therefore, the High Court refused to entertain declined to make any reference since there was no matter pending before the court and therefore, no reference could be made for the matter which has already been disposed of.

Post reference procedure

Section 396 of the Code of Criminal Procedure talks about the post reference procedure i.e., the procedure which has to be followed by the subordinate court which referred any case to the High Court which involves a substantial question of law regarding the validity of the Act, Ordinance, regulation or any provision which in the opinion of the court should be inoperative because of the reason of it is invalid for certain reasons. The Section provides that, the High Court to which any case was referred to when passes the decision or the order as it deems fit then the copy of such decision or order passed by the High Court should be sent to the court which has referred to the High Court and the subordinate court after receiving the copy of the decision or judgement should dispose the matter in accordance with it.

Revisional jurisdiction

Dictionary meaning of “revision” is the act of revising or reviewing something in order to locate and rectify the mistakes if any, present in it. Section 399 and Section 401 of the Code of Criminal Procedure confers the revisionary jurisdiction to Sessions Court and High Court respectively. Section 399 of the Code states that the revisional jurisdiction is the same as that with the High Court under Section 401. Revisionary jurisdiction is the power of the higher courts to call for records from the lower courts of the cases which are already decided by the lower courts. The objective of revisionary jurisdiction are as follows:

• Higher courts can keep a check on whether the legal principles, procedures and jurisdiction are duly complied with or not by the subordinate court.
• To keep the lower court within the bounds of their authority and make them work in accordance with the rule of law.

Essentials for the exercise of revisional jurisdiction

The essentials required to exercise the revisional jurisdiction are as follows:

• Calling for records of the case: The most basic ingredient for the exercise of revisional jurisdiction is that the court should call for records of the cases which are already decided by any Court subordinate to it. The record of any case consists of the FIR, statements made by the witnesses under Section 161 of the Code of Criminal Procedure, any confessions recorded under Section 164 of the Code of Criminal Procedure, the sworn evidence given by the witness before the court, any other document which is brought to record and finally he certified copy of the judgement of the court over the judgement of which the revisionary jurisdiction is exercised;
• Unsatisfaction of parties on the court’s judgement: Just like appeal, the revision of the judgement can be brought by either of the parties to the suit which is aggrieved by the judgement and the findings of the court. However, the court exercising the revisional jurisdiction cannot revise the judgement on its merit and only revise the procedural aspect of the judgement.

The statement made to a metropolitan magistrate

Generally, the statements made in the court of law are recorded under Section 161 and 162 of the Code of Criminal Procedure. Section 161 Code of Criminal Procedure, 1973 (for short ‘Cr.P.C.’) titled “Examination of witnesses by police” provides for an oral examination of a person by any investigating officer when such person is supposed to be acquainted with the facts and circumstances of the case. The purpose for and the manner in which the police statement recorded under Section 161 Cr.P.C can be used at any trial are indicated in Section 162 Cr.P.C. The confessions of the accused and the witnesses are recorded under Section 164 of the Code. Subsection 1 of Section 164 of the Code mandates that a metropolitan magistrate can record the confession and statements made to him by the accused or witness in the course of the investigation. It is also provided that it is not essential that the magistrate who records the confession and statements has jurisdiction in the case. The judicial magistrate also has the authority to administer an oath to the person who makes such statements. Under Section 164(5) of the Code of Criminal Procedure can record the statements other than the confessions which in his opinion are appropriate to the circumstances of the case in question.

The term ‘Statement’ has nowhere been defined in the Code of Criminal Procedure. But the term ‘statement’ under the Code means those statements which are written by the witness himself or the statements made by the witness which are reduced to writing by any person other than the witness himself. The term ‘statement’ recorded under Section 164 of the Code refers to the previous statement made by the witness or the statements of the accused which is not a confession. The purpose of inclusion of the provision of recording the statement under Section 164 is two-fold, which are as follows:

• To prevent the witnesses from changing their statements subsequently;
• To overcome the immunity from prosecution with regard to the information furnished by the witnesses under Section 162 of the Code.

Power to order inquiry

Section 397 of the Code of Criminal Procedure authorizes the High Court or the Sessions judge to direct the Chief Judicial Magistrate to himself make an inquiry or direct any magistrate subordinate to him to make further inquiry into any complaint which has been dismissed under Section 203(if after the consideration of the statements on oath of the complainant and the witnesses the magistrate is of the opinion that the inquiry which was carried on under Section 202 of CrPC reveal that there is no sufficient ground for proceeding, he may dismiss the proceedings) or Section 204(4)(when there is a provision of payment of any process-fee under any law in force then the failure to pay such fee may result in the dismissal of complaint by the Magistrate) or any case in which the person accused of an offence has been discharged or acquitted. The Section further provides that the power conferred to the court under Section 397 of the Code can not be exercised by the courts to direct any person mentioned under the Section to inquire into any case of the person where the case has been discharges unless the person was provided with the opportunity of proving why the case should not be discharged.

Sessions judge’s powers of revision

Section 399 of Criminal Procedure Code confers revisionary jurisdiction upon the Session’s judge. The Section makes the revisional jurisdiction of High Court coextensive with that of Sessions Court. 

• Subsection 1 of Section 399 states that in cases where the record of proceedings have been called for by the Sessions judge. The Sessions Judge has similar powers to those exercised by the High Court which is conferred to it by Section 401 of the Code;
• Subsection 2 of Section 399 states that the provisions of sub-section 2, 3, 4 and 5 of Section 401 shall apply in cases where revision proceedings have commenced before the sessions judge and the references under the subsection which are made to the High Court shall be construed as references made to the Sessions judge;
• Subsection 3 of Section 399 limits the opportunity of an aggrieved party from going to the courts for filing revision petition by providing that where the revisional proceedings were going on before the Sessions Judge and the judgement has been delivered by him. Then the judgement delivered by the Judge shall be final and the person who filed the revision petition will lose his right to file a similar petition before the High Court or any other court in the country.

Powers of revision of additional sessions judge

Section 400 of the Code of Criminal Procedure provides that an additional sessions judge has revisional powers similar to those possessed by the sessions judge which are mentioned under the Code in the cases which may be transferred to him by the sessions judge under any general or special order of the sessions judge.

Statement of metropolitan judge

According to Section 397 of the Code of Criminal Procedure, when the record of any case is called for by the High Court from the metropolitan judge, the metropolitan judge should submit along with the record a statement stating the grounds on which the impugned order or decision was taken. The higher court shall take the reason for the decision so provided by the statement submitted by the metropolitan judge into consideration while delivering the judgement of setting aside or overruling the decision. 

High courts powers of revision

The right to appeal, according to the Code of Criminal Procedure is confined only to specific cases which have been mentioned under the Code. Even in those specified cases, only one appeal is permissible by the Code and the review of the decision given by the appellate court can in ordinary circumstances not be subjected to further appeal in the higher court. The Code in order to prevent the miscarriage of justice has devised the procedure of Revision. The provisions regarding the power of review with the higher courts and the procedure to regulate the power are contained under Section 397 to Section 405 of the Code of Criminal Procedure. The power of revision with the higher judiciary is very wide and is purely discretionary. Therefore no party can claim it as a matter of right to be heard before the court with revisional jurisdiction.

The revisional powers conferred by the Code are wide enough but the same cannot be exercised in exceptional circumstances. The exceptional circumstances are as follows:

• In cases where an appeal can lie but there is no appeal brought by the party. No revisional proceedings shall be entertained on behalf of the person who could have brought in a petition for appeal but did not do so;
• When interlocutory orders are passed in any appeal, enquiry or trial;
• The court which is exercising its revisional jurisdiction does not possess the power to convert a decision of acquittal into a decision of conviction;
• A person is entitled to file only one application for revision in either court of session or High court and once a person has filed an application for revision he can not file any other application in any court of law.

Section 397 to Section 401 of the Code of Criminal Procedure confers revisional jurisdiction upon the High court.

Power exercised by the High Court

Section 401 confers the revisionary powers to the High Courts in the territory of India. The revisionary power is the procedural mechanism to correct the errors committed in the dispensation of justice by the courts. The revisionary power of High Courts is very wide and can be exercised in exceptional cases where there is a complete miscarriage of justice.

Treatment of application of revision as a petition of appeal

Section 401 of the Code empowers the High courts to exercise the powers of an appellate court. The appellate jurisdiction of High Courts can be exercised only in exceptional cases in order to prevent the miscarriage of justice in exceptional circumstances. Section 386 of the Code of Criminal Procedure guarantees appellate power to the High Courts. In exercise of Appellate power under Section 386 Cr.P.C. the High Court has full power to reverse an order of acquittal and if the accused are found guilty they can be sentenced according to law. Section 386 of the Code makes it clear that the purpose of revisional jurisdiction is to satisfy the person that he is meted out with justice as to the legality, correctness and propriety of findings, sentence, order or judgement delivered by the court against which he files a revision petition before the higher court.

Power of high court to withdraw or transfer revision cases

In case of a joint trial, if one of the accused moves to the High Court while the other accused moves to the sessions court for filing the revision petition then the High Court will have the upper hand in deciding as to which court should entertain the matter. The court takes this decision keeping in mind the general convenience of the parties and also the gravity of the case which comes to the court. If the High Court decides to let the sessions judge decide the matter and the sessions judge so disposes of the court then the party which moved to the court with the revision petition would in accordance with the provisions of Section 397(3) of the Code loses the right to move to another court for filing the petition for the revision of the case in any other court.

High court’s order to be certified to lower court

According to Section 405 of the Code of Criminal Procedure, when a High Court or sessions judge decides on any revision petition. Then it has to certify the judgement or order delivered under the case, in accordance with the procedure mentioned under Section 388 of the Code, to the court which delivered the judgement which was appealed against.

Difference between reference and revision

The table below tries to explain the difference and the different nuances of reference and revision mentioned under Code of Criminal Procedure concisely:

Conclusion

The process of appeal gives a person the right of appearing before the court and getting any factual or legal error ratified by the court in order to attain justice. However, appeals against only those judgments, orders, or sentences passed by any criminal court can be brought before the court which has been specifically mentioned under the statutes. Thus, the right to appeal can only be exercised within the bounds of the Code of Criminal Procedure or any other law in force and hence, this is discretionary upon the court which has been approached and can not be claimed as a matter of right. In certain cases no appeal is not allowed at all, in fact, the judgment, or order, or sentence delivered by the criminal court will attain finality.

The revisionary jurisdiction guaranteed to the High Courts is quite extensive and the High Courts are given wide powers in this respect. It would not be superlative to say that no form of judicial injustice can permeate through this power. It has been held in various decisions that the High Court is allowed to exercise its inherent powers when dealing with cases of revision. These inherent powers apply to both substantive as well as procedural matters. However, it can deal only with the question of law and cannot re-examine any evidence.

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

The post Review Procedures under CrPC: interesting facts you must know about appeared first on iPleaders.

This article is written by Avni Kaushik. Here she discusses “Concept of  Free Consent and Indian Contract Act”. 

Definition of Free Consent

In the Indian Contract Act, the definition of consent is given in Section 14, which states that “it is when two or more persons agree upon the same thing and in the same sense”. 

Example

‘A’ agrees to sell his house to ‘B’. ‘A’ owns three houses and wants to sell his house in Haridwar. ‘B’ thinks he is buying his Delhi house. Here ‘A’ and ‘B’ have not agreed upon the same thing in the same sense. Therefore, there is no consent and no contract afterwards.

In the case of Raffles v. Wichelhaus, two parties, ‘A’ and ‘B’, entered into a contract for the sale of 125 cotton bales by a ship named “peerless” from Bombay. There were two ships with the same name, and while Party ‘A’ was thinking of one ship, Party ‘B’ was thinking of the other ship. The court held that there was no meeting of minds by both parties. Hence the contract was invalid.

Vitiating factors and their effect

1. Coercion (Section 15)

Section 15 of the Indian Contract Act,1872 states that coercion is committing or threatening to commit, any act is forbidden by the Indian Penal Code (45 of 1860) or the unlawful detaining or threatening to detain any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement. 

Coercion means forcing an individual to enter into a contract. When intimidation or threats are used under pressure to gain the party’s consent, i.e. it is not free consent.
Coercion may involve the actual infliction of physical and psychological harm in order to enhance the credibility of a threat. Then the threat of further harm can lead to the threatened person’s cooperation or obedience.

Example

‘A’ went out for a walk, ‘B’ approaches ‘A’ with a stranger, pulls out his gun and asks ‘A’ to give all his possessions. The consent of ‘A’ is obtained by coercion here.

Effect

Coercion has the effect of making the contract voidable. It implies that at the discretion of the party whose consent was not free, the contract is voidable. The aggravated party will, therefore, determine whether to enforce the contract or to cancel the contract.

Techniques for causing coercion

• Threatening to commit any act which is prohibited by the Indian penal Code.
• Detaining not as per law or even threatening to detain any property, with the sole intention of compelling a person to enter into a contract.

Acts forbidden by IPC            

The word act prohibited by the Indian penal code makes it necessary in a civil action for the court to decide whether the alleged act of coercion is amount to an offence. A threat of bringing a false charm with the object of making another do a thing amount to blackmail or coercion. In the case of Ranganayakamma v Alwar Sett, where the widow was prohibited from removing the corpse of her husband until she consented for the adoption. The court said that her consent was not free and it was coerced. It is clear that coercion is committing or threatening to commit any act which is contrary to law.

Unlawful Detention of property

Consent can be said to be caused by coercion if it is induced because of illegal confining of a property, or a danger to do as such. With a specific goal of acknowledging the child’s due fine, the legislature annexed the property both of him and his father having a place, the instalment made by the father at that stage bearing in mind the ultimate goal of saving the property from being sold was kept to be made under coercion. Refusal by the government to discharge a temporary worker’s instalment unless he surrenders his demand for additional rates adds up to intimidation under the land detention class.

Burden of proof 

The burden of proof lies with the party defending the coercion. The burden of proof is heavier on him. This is because pure probability or fear is not a threat. In order to create coercion, a person must show that there was a risk that was prohibited by law and that forced him to enter into a contract that he would not otherwise have.

Difference between Coercion and Duress

The term ‘duress’ corresponds to coercion in English law. However, Coercion under the Indian Contract law has a wider amplitude than duress under the English law.

2. Undue Influence (Section 16)

According to Section 16 of the Indian Contract Act, 1872 an influence will be considered as Undue Influence when:

• One party to the contract is in a position of trust and controls the other party wrongfully.
• Such a person uses his dominant position to gain an unfair advantage over the other.

There are two key elements of undue influence-

1. The relationship- trust, confidence, authority.
2. Unfair persuasion- careful examination of the terms of the contract.

Where one party is in a fiduciary relation to the other party

Fiduciary relationship means a relationship of trust and confidence. When a person imposes faith and confidence on the other, he expects not to be betrayed. If the other party betrays the confidence and trust reposed in him and gains an undue influence.

Examples of fiduciary relationship includes:

• Solicitor and client;
• Trustee and trust ;
• Spiritual adviser and devotee;
• Medical attendant and patient;
• Parent and child;
• Husband and wife;
• Master and servant;
• Guardian and ward.

In other words, we can say that Undue influence occurs when the decision of another party to the transaction can be influenced by one party.

Example

‘A’ sold his gold ring to his teacher ‘B’ for Rs 200 after he had been offered good grades by his teacher. Here, A’s permission is not given freely, he was influenced by his teacher.

Effect

The effect of undue influence makes an agreement voidable at the option of the party whose consent was caused. Any such contract can be set aside. Only a party to the contract can avoid or rescind the contract. This right does not lie in the hands of the third party.

Burden of Proof

If the plaintiff wants to bring an action to stop a contract entered into on the grounds of undue influence, two issues must be kept in mind. The law has been stated in the Indian Evidence Act, 1872 and Indian Contract Act, 1872. The law states that in order for a plaintiff to prove that he was under undue influence, two things must be established

1. Not only must the defendant has a dominant position but,
2. He must use it.

It states that it’s not enough for the plaintiff to show the possibility of undue influence that may have been exercised by the dominant party. It must be certain that a person used his position to influence the plaintiff. A possibility of the same is not enough for the plaintiff to avoid a contract.

Difference between Coercion and Undue Influence

3.Fraud (Section 17)

According to Section 17 of Indian Contract Act, Fraud includes any of the following acts committed by a contracting party or its connivance or its agent in order to deceive or induce a party or its agent to enter into the contract:

• The effective concealment of a fact by one who is aware of the fact;
• a promise made without any intention to carry it out;
• any other act fitted to deceive;
• any such act or omission as the law considers to be fraudulent.

Mere silence as to facts likely to affect a person’s willingness to enter into a contract is not fraud unless the circumstances of the case are such that, having regard to them, it is the obligation of the silent person to speak or unless his or her silence is, in itself, equivalent to speech.

Example

‘A’ sells his horse to ‘B’ by auction, which ‘A’ knows to be unsound, ‘A’ tells ‘B’ nothing about the unsoundness of the horse. This is a fraud on the part of ‘A’.

Effect

• The contract arising from fraud is a null contract.
• The misled party has the right to withdraw from the contract.
• Due to the fraudulent agreement, the party is responsible for recovering the damages.

Evidence and Burden of proof 

In a large majority of cases, fraud can not be proved by concrete and observable proof. It’s hidden in its movement by its definition. If the evidence given is such as lead to wrongdoing, it is, therefore, appropriate that fraud must have been committed. In most cases, the only tool for dealing with fraud issues is circumstantial evidence. If this were not allowed, the ends of justice would be constantly, if not invariably, defeated. Simultaneously, fraud involvement is only to be blamed on a deliberate wrongdoer. As a remedy for restitution, any real damages arising from fraud can be recovered, even if they could not have been reasonably foreseen subject to the defrauded party’s mitigation law. Due to contributory negligence, the penalties would not be diminished.

4. Misrepresentation (Section 18) 

As per Section 18 of the Indian Contract:

• Misrepresentation means the truth is misrepresented.
• Misrepresentation is the release of deceiving details resulting in the presumption that the other party will enter into a deal and then lose. Nevertheless, the information provided by the guilty party is the result of a genuine belief in the matter. Misrepresentation is said to be committed. 

Firstly, when the deceiving person declares that no justified data is misleading a person is some way.

Secondly, there is a breach of an obligation that has caused the bias of one or the other. Lastly,  a mistake was committed by a person because of the misrepresentation of the act or information.

Example

‘A’ told ‘B’ that his radio is in good condition, because of the confidence he had in ‘A’, ‘B’ bought the radio from him. The radio did not work properly after some time, ‘B’ thought he was misled by ‘A’, but ‘A’ believed his radio was in good condition and had no intention of deceiving him. So, here misrepresentation is in the part of ‘A’, because he did not know that the radio is not working properly.

Effect

If the party that has suffered as a result of the misrepresentation when entering into a contract may choose to terminate the contract, rescind the contract within a reasonable time under the Specific Relief Act 1963.

Kinds of Misrepresentation

There are two types of misrepresentation:

Negligent Misrepresentation

• It is considered to be a negligent misrepresentation when the misrepresentation happens due to lack of any reasonable ground and carelessness;
• Negligent misrepresentation is only known when the representative owed a duty to representee to handle carefully;
• An individual would only be liable if, in particular, he had ignored the duty specified;
• Even when there is no fiduciary relationship, responsibility exists between the two parties.

Innocent misrepresentation

• If the portrayal is based on a good reason to believe and there is no error and malicious motive, then it is said to be an innocent misrepresentation.
• When a person enters into a contract with an innocent misrepresentation, he or she has the right to withdraw from the contract but is not entitled to damages.
• Unless there are reasonable grounds, a contract will not be void. It would be enough to prove innocence in misrepresentation to prove the fact.

Burden of Proof

The burden of proof is on the defendant to show that the misrepresentation was not rendered fraudulently by showing that “He had reasonable grounds to believe that the evidence portrayed were valid during the time when the contract was made.” The party making the misrepresentation carries a heavy burden of proof.

The distinction between fraud and misrepresentation 

4. Mistake (Section 20)

There are two forms of  mistake under Indian Contract Law:

1. The mistake of Fact,
2. The Mistake of Law.

Mistake of Fact

• A mistake of fact arises when one or both of the contracting parties have misunderstood a term that is essential to the meaning of the contract;
• Such a mistake may be done due to confusion, negligence or omission, etc;
• A mistake is never intentional, it is an innocent overlooking.
• Such mistakes can be either unilateral or bilateral

Bilateral Mistake (Section 21)

When both the parties to a contract are under a mistake of fact, essential to the agreement, such a mistake is known as a bilateral mistake. Bilateral mistakes are also sometimes referred to as mutual or common mistakes. All the parties do not agree to the same thing and in the same way, which is the concept of consent. Since there is no consent, the contract is null and void.

Example

‘A’, agrees to buy a cow from ‘B’, but it turns out that the cow was dead at the time of the deal, although the fact was not known to any party. The arrangement is considered invalid.

Unilateral Mistake (Section 22)

A unilateral mistake occurs when only one party to the contract makes a mistake. The contract will not be void in such a case. It is specified in Section 22 of the Act that the contract will not be void just because one party made the mistake. So if only one party has made a mistake the contract remains a valid contract.

Example

‘A’ enters into an agreement with ‘B’ for the purchase of horse which he assumes to be a racing horse. ‘A’ do not confirm from ‘B’. In actual a horse is not a racing horse. ‘A’ cannot rescind the contract.

Mistake of law

The mistake may be related to the mistake of Indian laws, or it may be a mistake of foreign laws. If the mistake applies to Indian laws, the principle is that the  law’s ignorance is not a sufficiently good excuse. This means that either party cannot claim that it is not aware of the law.

The Contract Act states that, on the grounds of ignorance of Indian law, no party can claim any relief. This will also include an incorrect interpretation of any legal provisions.

However, similar treatment is not given to ignorance of foreign law. Ignorance of foreign law provides some leeway, the parties are not expected to know foreign law and its meaning. Therefore, under the Indian Contract Act, an error of foreign law is actually treated as a mistake of fact.

Conclusion

Free Consent is absolutely important to make an agreement with a valid contract. The importance of free consent cannot be stressed enough. The Party’s consent must be free and voluntarily. It is necessary to give consent to the contract without any pressure or delusions. It is essential that the parties consent is free, as this may affect the contract’s validity. If the consent has been obtained or caused by coercion, undue influence, fraud, misrepresentation or mistake, then the aggrieved person has the right to void the agreement.

References

1. http://lawtimesjournal.in/coercion-undue-influence-difference-between-coercion-and-undue-influence/
2. https://www.legalbites.in/effect-of-coercion-undue-influence/
3. https://keydifferences.com/difference-between-coercion-and-undue-influence.html
4. https://keydifferences.com/difference-between-fraud-and-misrepresentation.htm

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

The post Free Consent Under the Indian Contract Act, 1872 appeared first on iPleaders.

This article is written by Shruti Singh, 2nd year Law intern from Hidayatullah National Law University, Raipur pursuing B.A.LLB(Hons.) Course. This article concentrates around the Arms (Amendment) Act, 2019 its critical analysis and the changes brought by it.

Background of the Arms (Amendment) Act, 2019

The Arms (Amendment) Bill, 2019 was introduced in the Lok Sabha by Union Home Minister Amit Shah on November 29, 2019. This bill amends its principal act, the Arms Act, 1959. The bill was passed without any amendment from Lok Sabha on December 9th, 2019 and from Rajya Sabha on December 10, 2019. The opposition proposed several amendments to the bill, which were rejected.

Lok Sabha Debates

There were certain facts that came in front in the Lok sabha during the passing of Arms(Amendment) Bill, 2019. These are:

• Six-decade-old law contained many discrepancies as it made crime control difficult.
• By going as per our historical traditions, the ancient arms-bearing tradition of India continues to supply the manpower demand of the current national security establishments of India. Later on, a negative consequence of disarming the population by law was the growth of illegal country arms and smuggling of firearms. This is the major source of crime today and not legally licensed firearms.
• There are approximately six crore fourteen lakh illegal arms in our country which are the main one of the main reasons behind the serious crimes happening in our country. Easy availability of illegal arms has made the underworld effective in cities like Mumbai, Ahmedabad, Indore and U.P. The largest factory of illegal weapons is situated at Munger District of Bihar and Khargaon in Madhya Pradesh. Illegal weapons are smuggled into this country from other countries also. Underworld is getting arms through Nepal and Bangladesh route. One of the largest factories of the world is situated in Darrha-Adam Jail at Peshawar, Pakistan. In addition to that illegal arms and Naxal insurgency are posing a great threat to our country and the society, in general. UP, Jammu and Kashmir, Patna and Munger district of Bihar have become one of the largest hubs of manufacturing illegal arms.
• An illegal arms control cell should be set up in every state for regulations of illegal arms and anticipatory bail should not be granted to the accused booked under the Arms Act. Similarly, the licencing system should be made more transparent.
• Apart from that, the import policy of the year 1984 should be reintroduced. It would be better if the prices of various arms manufactured in ordnance factories should be kept affordable. This will prevent people from getting illegal arms from other sources and especially from other countries.
• With regards to the celebratory gunfire, the Government has made the provision of punishment of two years. It was proposed that seizure of licence, punishment for minimum six months, fine or something like that can be done for this purpose because punishment for two years is too much for an offence like celebratory gunfire.
• After the amendment, the Government has reduced to keep the number of weapons from three to two, at any time by a person. There is no place in police stations to keep these weapons. All seized weapons are lying in very pathetic condition there. As per record, there is a loss of Rs.90,000 crore due to this. It was suggested that in spite of reducing the number of weapons, law and order situation should be improved.
• It was seen from the cases that to issue licences to women is not considered to be appropriate. Rifle Clubs must be provided financial assistance to train women. It was further suggested to enact such legislation which protect us against the misuse of weapons.
• Laws should be enacted for such laws which provide a conducive environment for aspiring shooters. The Government should approve the clubs affiliated with the National Rifle Association to set up shooting ranges wherever such ranges do not exist. It was further suggested that Government should issue expedience licence if one person of a family proposes to give the weapon to another person of the same family.
• Permission to import arms should also be granted this will facilitate the availability of better quality weapons to people and revenue to the Government. Similarly, certain relaxation should be provided to aspiring sportsmen. Police firing ranges must be opened once in a week to facilitate practice session for them.
• A very crucial point that was put forward was that the Government has introduced the concept of organized crime syndicate by amending Section 9(6) of the Bill. This particular definition of ‘organized crime syndicate’ is exactly as is given in the Maharashtra Control of Organized Crime Act (MCOCA). The Maharashtra Assembly had enacted the MCOCA Act under the State List. The Union has no power to interfere in the States’ powers to investigate, prosecute and penalize the organized crime. Furthermore, the Government offers no explanation as to why it is necessary to incorporate organized crime syndicate under the Arms Act. It seems that this Government does not believe in federalism. They want to trample upon the State List. Inclusion of organized crime syndicate by amending Section 9(6) shows that they are completely encroaching upon the State List.

All these suggestions made by different ministers were rejected and the bill passed without much amendments from the Lok Sabha.

Changes Brought by the Amendment

Newly added Definition of Licence- Section 2

Before

Any definition on License was not present in the Act.

After

A new definition of licence was added- licence means a licence issued in accordance with the provisions of this act and the rules that are made thereafter and also includes licence issued in electronic form. [Clause (ea) has been added after Clause (e)]

Licence for acquisition and possession of firearms and ammunition (Number of weapons)- Section 3

Before

No person except for those mentioned in clause 3 shall acquire, have in his possession or carry more than three firearms, at any time.

Persons mentioned in Section 3(3) are firearms dealer or any member of a rifle club.

After

• In Section 3 of the principal act the words ”two arms” has been substituted against “three arms”. It means that now a person at a time cannot carry more than two firearms, previously three firearms were allowed.
• A proviso to Section 3 has also been inserted which says that if a person possesses more than two firearms at the commencement of the act, he shall keep any of the two arms with him and deposit the rest with the officer in charge of the nearest police station or with a licensed dealer within a period of one year. And where the person belongs to armed forces he shall deposit in the unit armoury and after which it shall be delicensed from the ninety days of the expiry of the said one year. And while granting arms licence on inheritance or heirloom basis, the limit of two firearms-, in any case, can be exceeded.

It is still not applicable to any dealer in firearms or to any member of a rifle club or rifle association licensed or recognised by the Central Government using a point 22 bore rifle or an air rifle for target practice. [Section 3(3)]

Scope of licence for manufacture, sale, etc. of arms and ammunition- Section 5

Before

In Section 5(1)-

1. No person shall manufacture, use, sell, transfer, convert, repair, test or prove, and 
2. Expose or offer for sale or transfer or have in his possession for sale, transfer, conversion, repair, test or proof, any firearm, or

Any other arms or ammunition of such class or description as may be prescribed unless he holds a valid licence in accordance with the provisions of the law.

After

In section 5(1)-

The word manufacture has been substituted by “manufacture, obtain, procure”. It means that no person has the right to manufacture, obtain and procure firearms as described under the act without a valid licence issued in accordance with the provisions of the Act.

Licence for the shortening of guns or conversion of imitation firearms into firearms- Section 6

Before

Section 6 stated that no person shall shorten the barrel of the firearm or convert an imitation(copy) firearm into a firearm unless he holds a valid licence issued on his behalf in accordance with the provisions of this Act and the rules made thereunder.

After

In section 6 of the principal Act, after the words “convert an imitation firearm into a firearm”, the words “or convert from any category of firearms mentioned in the Arms Rules, 2016 into any other category of firearms” shall be substituted. 

After the amendment, one more category where conversion is not allowed has been added as is mentioned in the Arms Rules, 2016. It now covers more items by widening its scope of application of this provision.

Prohibition of sale or transfer of firearms not bearing identification marks on it- Section 8

Before

Section 8(1): No person shall obliterate(destroy utterly), remove, alter or forge any name, number or other identification marks stamped or otherwise shown on a firearm. It prohibits any kind destruction of the number or identification marks stamped or shown on a firearm by any person.

After

In Section 8 of the principal Act, in sub-section (1), for the word “firearm”, the words “firearm or ammunition” shall be substituted. It has the effect of widening the scope of firearm and covering all lot more types of firearms and ammunition.

Grant of licences (Firearm for target practice)- Section 13

Before

In Section 13(3)(ii): It states that licensing authority shall grant licences in regard of a point 22-bore rifle or an air rifle to be used for target practice by a member of a rifle club or rifle association licensed or recognized by the Central Government.

After

In Section 13 of the principal Act, in clause (a) of sub-section(3), in sub-clause (ii), for the words and figures “point 22 bore rifle or an air rifle”, the word “firearm” shall be substituted.

It means that now the licensing authority can grant licence in regard to a firearm to be used for target practice by a member of a rifle club or rifle association licensed or recognized by the Central Government of India.

Section 15: Duration and Renewal of licence- Section 15

Before

Section 15(1): A licence under section 3 shall continue to be in force for a period of three years from the date on which it is granted if it is not revoked in between this period.

Provided that if the person so requires the licence can be granted for a shorter period only if the licencing authority considers that the reasons are such that it needs to be recorded. In this case, the licence will be granted for a shorter period on the desire of the person who requires a licence with the grant of licensing authority.

After

In sub-section(1) of Section 15 the words “five years” has been added in place of “three years.” 

It means that now a licence shall continue to be in force for a period of five years from the date on which it is granted if it is not revoked. A proviso has also been added which says that the licensee needs to produce the licence along with the arms and ammunition before the licensing authority after every five years from the date on which it was granted or renewed.

Punishment for certain kinds of offences (Enhancement of Punishment)- Section 25

Before

Section 25(1):

(a) those who are involved in manufacturing, selling, transferring, converting, repairing, testing or proving, or exposing or offering for the sale or transfer, or has in his possession for sale, transfer, conversion, repair, test or proof, any arms shall be punishable with imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine.

After

• In Section 25

Sub-section (1):

• In clause (a), instead of the word “manufactures,”, the words “manufactures, obtains, procures,” shall be substituted.

It means that now whoever manufactures, sells, transfers, converts, repairs, tests or proves, or exposes or offers for the sale or transfer, or has in his possession for sale, transfer, conversion, repair, test or proof, any arms or ammunition in contravention of section 5.

• Clause (b)- After the words “convert an imitation firearm into a firearm”, the words “or convert from any category of firearms mentioned in the Arms Rules, 2016 into any other category of firearms” shall be inserted.
• Whoever shortens the barrel of a firearm or converts an imitation firearm into a firearm or convert from any category of firearms as under Schedule I of the Rules under this Act to another category, in contravention of section 6.
• Clause (d)- Whoever brings into, or takes out of, India, any arms or ammunition of any class or description in contravention of section 6.
• In the long line, for the words “three years but which may extend to seven years”, the words “seven years but which may extend to imprisonment for life” has been substituted.

Any person who practices anything mentioned in Clause (a), (b), (d) will be punishable with imprisonment for a term which shall not be less than seven years but which may extend to imprisonment for life and also a fine. The minimum punishment as per the current amendment in violation of said offence will be seven years as against three years that was present in principal act.

Sub-section (1A)- Enhancement of punishment for acquiring prohibited arms in contravention of section 7

Before

According to this provision, whoever acquires, has in his possession or carries any prohibited arms or ammunition in contravention of section 7 shall be punishable with imprisonment for a term which shall not be less than five years, but which may extend to ten years and shall also be liable to fine.

After

Instead of the words “five years but which may extend to ten years”, the words “seven years but which may extend to fourteen years” shall be substituted. The term of punishment for the said offence has been increased. The minimum punishment in such cases will be seven years instead of five years.

The following proviso shall be inserted, 

The new provision which will be added states that “Provided that the Court may, for any adequate and special reasons to be recorded in the judgment, impose a sentence of imprisonment for a term of less than seven years.”

After clause (1A) one additional clause (1AB) has been inserted:

According to this provision any person who by using force, takes the firearm from the police or armed forces shall be punishable with imprisonment for a term which shall not be less than ten years but which may extend to imprisonment for life and shall also be liable to fine.”

Enhancement of punishment for manufacturing/possession of prohibited arms in contravention of section 7- Subsection (1AA)

Before

Any person who indulges in manufacturing, selling, transferring, converting, repairing, testing or proving, or exposing or offering for sale or transfer or has in his possession for sale, transfer, conversion, repair, test or proof any prohibited arms or prohibited ammunition in contravention of section 7 shall be punished with imprisonment for a term which shall not be less than seven years but which may extend to imprisonment for life and shall also be liable to fine.

After

Instead of the words “seven years”, the words “ten years” shall be substituted.

Any person who manufactures, sells, transfers, converts, repairs, tests or proves, or exposes or offers for sale or transfer or has in his possession for sale, transfer, conversion, repair, test or proof any prohibited arms or prohibited ammunition in contravention of section 7 shall be punishable with imprisonment for a term which shall not be less than ten years but which may extend to imprisonment for life and shall also be liable to fine.

Sub-section(1B): Marking of arms for tracing

Before

A person who acquires, has in his possession or carries any firearm or ammunition in contravention to section 3, arms or ammunition or refuses to point out where the same are or is manufactured or kept shall be punished with imprisonment for a term which shall not be less than one year but which may extend to three years and shall also be liable to fine.

After

• The words “one year but which may extend to three years”, has been substituted with the words “two years but which may extend to five years and shall also be liable to fine”. 
• In the proviso, instead of the words “one year”, the words “two years” shall be substituted. It has increased the term for punishment.

After sub-section (5) new sub-sections (6), (7), (8) and (9) shall be inserted. It deals with organised crime and illicit trafficking and the punishments in such cases.

Before

There were no provisions for offences like organised crime syndicate, illicit trafficking and celebratory gunfire in the principal act.

After

Introduction of Organised Crime Syndicate(Added)- Sub-section (6)

If any member of organised crime syndicate on his own behalf possess or carry arms and ammunition without licence they will be punished with imprisonment for a term which shall not be less than ten years but which may extend to imprisonment for life and shall also be liable to fine.

Organised Crime Syndicate- Sub-section (7)

Whosoever acting on behalf of an organised crime syndicate will also be punished with imprisonment for a term which shall not be less than ten years, but which may extend to imprisonment for life and shall also be liable for fine. 

An explanation clause has also been added to Sub-section(6) and (7) which explains the words “organised crime”, “organised crime syndicate” and “continuing unlawful activity”.

Added new offence of Illicit trafficking- Sub-section (8)

Whoever is involved in or aids in the illicit trafficking of firearms and ammunition in contravention of sections 3, 5, 6, 7 and 11 shall be punishable with imprisonment for a term which shall not be less than ten years but which may extend to imprisonment for life and shall also be liable to fine. An explanation for “illicit trafficking” has also been added.

Rash and negligent use of firearms (Celebratory Gunfire)- Sub-section (9)

This sub-section prohibits firing in rash or negligent manner which has the tendency of endangering a person’s life and safety of others. The person shall be punishable with imprisonment for a term which may extend to two years, or with fine up to rupees one lakh, or with both.

Punishment for using arms (Enhancement of Punishment)- Section 27

Before

Any person who uses any prohibited arms or prohibited ammunition or does any act in contravention of section 7 and such use or act results in the death of any other person, they shall be punishable with death.

After

In Section 27 of the original Act, in sub-section (3), for the words “shall be punishable with death”, the words “shall be punishable with imprisonment for life, or death and shall also be liable to fine” has been substituted with. So now in case of use of prohibited arms or ammunition the punishment is imprisonment for life or death and shall be liable to fine.

Power to make rules- Section 44

Before

Section 44(2)(f): the manner in which the maker’s name, the manufacturer’s number or other identification mark of a firearm shall be stamped or otherwise or shown thereon.

After

In Section 44 of the original Act, in sub-section (2), in clause (f),

• For the words “firearm shall be stamped or otherwise shown thereon”, the words “firearm or ammunition shall be stamped or otherwise shown thereon for the purposes of tracing” shall be substituted.

Definition of Tracing added

An explanation for the term tracing has been provided which means a systematic tracking of firearms and ammunition from the manufacturer to purchaser for the purpose of detecting, investigating and analysing manufacturing and trafficking.

Critical Analysis of the new Amendment

Renewal Period of License Increased

The act has increased the period between which the licence can be renewed from three years to five years. This means that now a person can possess arms without much restriction and tension of renewal for a longer period.

Enhancement of Term of Punishment

The amendment largely talks about increasing the term of punishment under various offences, it does not cover any regulation to restrict illegal marketing and availability of guns in the market. Will increasing the punishments to an offence reduce the happening of an offence related to arms, This is an important question that needs to be addressed. We are a common law country, whose primary aim is providing justice to its citizens. But just by increasing the punishment will bring a change in the current crime scene in the country. For example, drugs are banned in India, still, we see that it is available so easily. Some states like Punjab are affected by it to a great extent. We also see students in colleges and universities consuming it on a daily basis. Has there been any difference to it? Likewise, for arms and ammunition, the availability of it should be strictly monitored.

Unrestricted use of licences

The State has over the years granted licences and also issued licences for firearms for crop protection to farmers as provided in the Arms Act. There is also a great cultural importance that citizens belonging to the martial communities take pride in retaining arms. These groups also need to be regulated and checked.

Availability of Illegal weapons

Then abundance of illegal weapons is the biggest problem in our country. The people who carry arms with licence anyways not pose much threat to the country. The people who do not have a valid licence or illegal weapons are the main reason behind the problem. From where the people get weapons who use them illegally? This is more important that what we are going to do with those weapons? The law-abiding people should not have any fear in their mind. I think there is no problem to issue licences to law abiding citizens.

Intention of the Bill

The intention of the bill is to punish those people who are indulging in an unlawful act which was meant for pecuniary benefits. Sometimes, the crime can be committed on the basis of the principle of antagonism against a person or a group. That type is not addressed in the Bill.

Grant of licences

One of the questions is, what should be the criteria to decide as to who will get the licence. It can be seen that private security agencies are seeking licences and they are providing firearms to private security guards. The question is, whether private security guards who are carrying those firearms are authorized to do so. Are they regulated by the government?

Effect on Private Market

The government allows 49 per cent FDI( Foreign Direct Investment) in small arms’ manufacture and then, want to limit it from possessing three arms to two.

Tension on Sports Community

There are a lot of worried people in the shooting sports community in India, and their anxiety and stress is that it limits the number of weapons that will hit new and emerging talent. Practising with weapons is part of their jobs and curbing this will have a huge impact on them.

History of the Arms(Amendment) Act, 2019

The Arms Act,1959 is the principal act which consolidates and amend the laws relating to arms and ammunition in the country to curb illegal weapons and violence stemmed from them. It replaced the Indian Arms Act, 1878 which was made by Britishers. The Indian Arms Act, 1878 was an act that regulated the manufacture, sale, possession and carrying of firearms. As before the Indian First War Of Independence in 1857, there were very few gun control laws in the country.

The Act is divided into 6 Chapters.

• Chapter I: Parliamentary;
  Provides a short title and definitions and interpretations of terms used in the act.
• Chapter II: Acquisition, Possession, Manufacture, Sale, Import, Export, and Transport of Arms and Ammunition;
  It provides for the rules and regulations around acquisition, possession, manufacture, sale, import, export and transport of arms and ammunition in India.
• Chapter III: Provisions relating to licences;
  Details how to procure a license, rules around grant, refusal, fees for licence.
• Chapter IV: Powers and Procedure;
  Provides details on the powers that the government officials have to enforce like seizure and detention, the deposit of arms and search of vessels, etc of this act.
• Chapter V: Offences and penalties;
  Explains punishments associated with breaking rules by individuals and companies that are related to this Act.
• Chapter VI: Miscellaneous;
  Deals with the other miscellaneous parts of the Act such as exemptions, delegation, arrest and searches.

Significance of this Amendment

The Arms (Amendment) Bill, 2019 has been introduced to control the use and possession of weapons in the country, to reduce their rash and illegal usage, which can endanger another human being in the country. It tries to impose more stringent punishments for production of arms and ammunition illegally and those possessing illegal arms. It also punishes those who indulge in a rash or negligent firing at a place of celebration and risk the life and safety of others.

Conclusion

This new amendment lacks to cover some important areas that were proposed by different ministers in the Lok Sabha debate. This amendment has majorly increased the term of punishment for various offences and also introduced some new category of offences. Something significant here is that, will this amendment bring a change in the society in terms of crimes that happen with arms and ammunition. The answer to this question largely comes in negative as still the availability of arms and ammunition has been overlooked or rather not dealt with.

References

• http://loksabhadocs.nic.in/Synop/17/Second/Syn-09-12-2019.pdf
• https://indiacode.nic.in/bitstream/123456789/10495/1/arms_and_ammunition_act_1959.pdf
• http://egazette.nic.in/WriteReadData/2019/214662.pdf

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

The post How the new laws on keeping arms affect the present situation appeared first on iPleaders.

This article is written by Gauraw Kumar, a 2nd-year student of BVP-New Law College, Pune. In this article, he covers concepts of “Mistake” and its essential in the Indian Contract Act, 1872.

Introduction

‘Mistake’ in general meaning is something that does not work out in search of a solution. Word ‘Mistake’ is used interchangeably with ‘error’. In law, misunderstanding or erroneous belief about a material fact may prevent the formation of a valid contract. According to Section 10 of the Indian Contract Act 1872, Free consent of parties is an essential element of any contract. Section 14 of the Indian Contract Act states that ‘Free consent means consent not caused by coercion, undue influence, fraud, misrepresentation and mistake’.

A mistake means ‘believe in those things which do not exist in reality’. Thus, the mistake is an erroneous belief. 

Definition of Mistake

‘Mistake’ is not defined in the Indian Contract Act. Section 20, 21 and 22 deals with the concept related to mistake. ‘Mistake’ can be defined as any action, decision or judgement that produced an unwanted and unintentional result. A Mistake is said to have occurred where parties intending to do one thing by error do something else. Phillips v. Brooks Ltd is an English contract law case concerning mistake. It was held in this case that a person is deemed to contract with the person in front of them unless they can substantially prove that they instead of them intended to deal with another person.

Types of Mistake

A mistake is of two types:

• Mistake of Law,
• Mistake of Fact.

Mistake of Law

Mistake of Law means any contract which is performed by parties without knowing the law (or by ignoring the law), which is essential for that contract. Section 21 of the Indian Contract Act deals with ‘effect of mistake as to law’.

Grant v. Borg

In this case, the person was not knowing the clauses of the Immigration Act 1971, for staying beyond the time limit by the leave. Here, he cannot apply for defence under the mistake of law.

Mistake of Law can be of two types:

• Mistake of Indian Law: “Ignorantia Juris non excusat” is a Latin maxim which means “Ignorance of the law is not excused”. If a person takes part in a contract without knowing any specific provisions of Indian Law (which is essential for that contract), then Contract is not voidable because everyone is supposed to know the law of his country. For example: According to the provisions of Indian law, we have to recover the amount of loan within 3 months from the due date, after that time-barred debt is imposed. Now if we do not show any interest in the recovery of loan amount during these 3 months because of not knowing the law (mistake of law), then we can not take it up as an excuse or defence.

A and B make a contract grounded on the erroneous belief that a specific debt is barred by the Indian Law of Limitation, then the contract is not voidable.

A murdered B, A cannot apply for the defence of mistake of law that is; he was not aware of law related to the murder.

• Mistake of Foreign Law:- If a person takes part in a Contract without knowing any specific provisions of Foreign Law (which is essential for that contract), then that mistake is treated as a mistake of fact i.e, the contract is void if both the parties under a mistake as to a foreign law because one can not be expected to know the law of other foreign countries.

Mistake of Fact

Mistake of fact means any contract which is performed by parties without knowing any material fact (or ignoring the fact), which is essential for that contract. Section 20 and 22 of the Indian Contract Act deals with ‘Mistake of Fact’. Mistake of Fact is of three types: Bilateral mistake, Unilateral mistake and Common mistake.

In the case of  The State of Maharashtra vs Mayer Hans George, A is an officer of the court and he is ordered to arrest Y. A arrests Z by mistake, as he believes Z is Y. Here, A can take the base of bona fide intention as a defence in the mistake of fact.

Bilateral Mistake

According to Section 20, “Where both the parties to an agreement are under a mistake as to a matter of fact essential to the agreement, the agreement is void”. In simple words, if parties are involved in an agreement without knowing any essential facts related to the agreement, then it is considered as a Bilateral Mistake and that agreement will be void. For example- A agrees to sell to B any goods supposed to be on its way from America to Bombay. It is found that before the day of the bargain, the ship containing goods had been cast away and the goods were lost. But, neither party was aware of these facts. The agreement is void.

A, being entitled to an estate of the life of B, agrees to sell it to C, B was dead at the time of the agreement, but both parties were ignorant of the fact. The agreement is void.

Essentials elements of Bilateral mistakes are:

(i) Both parties must be under a mistake.

(ii) The mistake must be of fact, not of law.

(iii) The mistake must be related to an essential fact.

What facts are essential in Bilateral Mistake?

Now, It is very important to know what are the essential facts which make an agreement void. An agreement is a void where there is a bilateral mistake as to the subject matter. A bilateral mistake as to the subject matter includes the following:

1. Mistake as to the existence of subject matter.
2. Mistake as to the identity of subject matter.
3. Mistake as to the quantity of subject matter.
4. Mistake as to the quality of subject matter.
5. Mistake as to the price of subject matter.
6. Mistake as to the performance of subject matter.

Mistake as to the existence of subject matter

‘A’ and ‘B’ are involved in a contract to sell a horse in a specific amount. But, horse dies before the contract is performed and both the parties (A and B) are unaware of this fact that the horse does not exist. In this case, the Contract is void.

Mistake as to the quantity of subject matter

‘A’ and ‘B’ made a contract in which a transaction of 200 pens in return of some amount involves. But 100 pens are sold early by the brother of ‘A’ before the contract could be performed and both the parties (A and B) were unaware of this fact that only 100 articles do exist. In this case, the contract is void.

Mistake as to the quality of subject matter

‘A’ and ‘B’ made a contract together in which ‘A’ sold his car in return of some amount to ‘B’. They believed that the car is for racing purpose but the car was for tourism purpose. In this case, the Contract is void.

Mistake as to the price of subject matter

‘A’ and ‘B’ made a contract to sell things in consideration for some money which was not a valid amount and both the parties (A and B) are unaware of this fact. In this case, the Contract is void.

Matter as to the identity of subject matter

‘A’ and ‘B’ made a contract in which ‘A’ promise to sell his car to ‘B’. ‘A’ has two different types of car (one for racing and other for tourism purpose). Here, the real identity of the car is not clear and both the parties are thinking about different types of car. In this case, the Contract is void.

In the case of Cundy v Lindsay, it is held that contract as a mistake as a matter of identity will be automatically void. 

Matter as to the possibility of subject matter

Sometimes, a contract is made but during the performance of the same, we come to know that it is impossible to fulfil the performance of the contract. The agreement is void where there is a mistake as to the possibility of performance. Impossibility is an excuse for non-performance of a contract. Impossibility can be of two types:

• Physical impossibility: Any performance of the contract when physically impossible, can be taken up as an excuse for non-performance of duties under a contract and contract will be void. For example- a painter made a contract with a person to paint a house but before the performance of duties, the house burns. Now, it is impossible for the painter to perform his duties under the contract. Thus, it is considered as an excuse for non-performance of duties.
• Legal impossibility: Any performance of the contract is when legally impossible, can be taken as an excuse for non-performance of duties under a contract and contract will be void. For example- any amendment made by legislation which makes it impossible to fulfil the performance of duties under the contract.

Unilateral Mistake

According to Section 22, a contract is not voidable merely because it was caused by one of the parties to it being under a mistake as to a matter of fact.

Such a mistake does not invalidate the agreement. For example, ‘A’ and ‘B’ made a contract in which only ‘A’ was under a misbelief for any product which is in the transaction. Then, the contract is not voidable for ‘A’ and will be classified as a valid contract.

Cases in which Unilateral Mistake makes a contract void and voidable

There are a few cases which make a contract void and voidable, merely by a mistake of the fact of a one-party.

Unilateral Mistake makes a contract voidable

If any unilateral mistake is induced by fraud or misrepresentation, then the contract is voidable for that party who has done the mistake in the contract. In simple words, if ‘A’ creates such types of situations and do such types of activities in order to deceive ‘B’ and ‘B’ has also done a mistake as a result of A’s action and made a contract with ‘A’. Then, Contract will be voidable at the option of ‘B’.

Unilateral Mistake makes a contract void

Unilateral mistake makes a contract void in two cases:

1. Unilateral mistake about the nature of Contract: If a person wants to enter a contract but he enters into an altogether different contract by mistake. For example- Suppose, any illiterate person gives thumbprint on any papers by mistake, then that contract formed because of thumbprint will be void.
2. Unilateral mistake about the identity of the person: If ‘A’ wants to enter into a contract with ‘C’ but enters into a contract with ‘B’ by mistake. Then, the contract will be void. For example- If ‘A’ is a regular customer of ‘C’. He gives order to ‘C’ to deliver the goods. But he was not aware of the fact that ‘B’ is the new owner of the shop and he makes a contract with ‘B’ by mistake. In this case, the contract will be void.

Common Mistake

When both parties are mistaken for the facts related to the subject matter of the agreement. The court can declare the entire agreement as void in such kind of mistake. If the contract contains a small error relating to the subject matter, then there is a very less chance that the court will rule that the contract is void. If any part of the contract that does not contain a mistake is still valid.

Bell v Lever Brothers Ltd is an English contract law case decided by the House of Lords. Within the field of mistake in English law, it holds that common mistake does not lead to a void contract unless the mistake is fundamental to the identity of the contract.

Conclusion

According to Section 10 of the Indian Contract Act, 1872 ‘All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object’. According to Section 14 of the Indian Contract Act, ‘Consent is said to be free when it is not caused by mistake subject to provision of Section 20, 21 and 22. The mistake can be of two types: Mistake of law and mistake of fact. The mistake of fact is an excuse under non-performance of duties under contract but the Mistake of law is not an excuse under non-performance of duties under the contract.  

References

• Bare act of the Indian Contract Act, 1872
• https://blog.ipleaders.in/mistake-fact-mistake-law-defence/

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

The post Mistake Under Indian Contract Act, 1872 appeared first on iPleaders.

This article is written by Gulrukh Kaur Sidhu, pursuing a Certificate Course in Advanced Corporate Taxation from LawSikho.com. Here she discusses “Top 5 Income Tax Lawyers in India and One Landmark Case They Argued”.

1. Nani Palkhivala

Textile Machinery Corporation Ltd. Calcutta Vs Commissioner of Income Tax, West Bengal, (1977)

Facts

The assessee company is a heavy engineering concern which is in the business of manufacturing boiler, machinery parts, wagons etc. In a bid to diversify, it established a Steel Foundry Division and a Jute Mill Division and thereby claimed exemption u/s 15C of the Income Tax Act, 1922. Both of these divisions produced goods which were needed by the assessee and were procured from outside. Separate accounts were maintained and the element of the profit was also present. None of the assets was used in the new Division. The question referred to the Apex Court, in this case, was: Was the tribunal correct while holding that the Steel Foundry Division falls under the definition of an industrial undertaking and that Section 15 is applicable to it

Held

The Apex court went on to state that the following facts need to be established in order to be eligible to avail benefit of Section 15C:

1. Employment of labour. 
2. Investment in the form of substantial fresh capital in the industrial undertaking set up.
3. There is the presence of Manufacture or production of articles.
4. Earning of profits is clearly attributable to the undertaking.
5. Above all, there is a separate and distinct identity of the Industrial unit.

Section 15C is an exemption section. The benefits so availed under this section is a partial benefit is to the extent of the quantum of the exempted profits of any new industrial undertaking that is established. The section provides for tax incentives in order to encourage the establishment of new industrial undertakings. These incentives may be availed thirteen years from 1st April 1948. The fact that an assessee by way of establishment of a new industrial undertaking expands his existing business, would not deprive him of the benefits under section 15C. Since new business creation amounts to some kind of expansion and advancement within the business, the true test becomes not to see whether the new industrial undertaking denotes expansion of pre-existing business, but whether this undertaking can be identified as distinct and separate from the aforementioned business. No particular case or an example can lay down an exhaustive test to determine whether something falls under the ambit of section 15C. In order to drive home the point, that a new undertaking cannot be said to have been formed out of the already existing business, there must be material to show that a new emergence of a physically separate industrial unit which has the capability to exist on its own as a viable unit.

An undertaking is said to be formed out of the existing business only if the physical identity with the old unit is preserved. In this case, there has been the establishment of two undertakings which are separate and distinct. Therefore, if the establishment is ‘Formed by Reconstruction of the business already existing’ it can be concluded that a newly established undertaking is entitled to exemption u/s 15C of the Income Tax Act, 1922.

2. Harish Salve, Senior Advocate

Commissioner of Income Tax Vs M/S Italindia Cotton Co, (1988)

Facts

The assessee suffered a loss in the Assessment Year 1960-1961. But there was a change in the shareholding of the three companies held by M/s Italindia Cotton Co. This led to the question that whether the benefit of carrying forward that loss is availed, for the purpose of computing its assessable profits for the year. The income-tax officer held that section 79 of the Income Tax act disentitled the assessee from such a set-off because as of March 31.1961, it was not having a 51% shareholding.

Held

The Bombay High court had said that even if there is a change in the voting power of not less than 51% between the dates in question, it has to be shown that the change carried out was with a purpose to reduce or avoid any tax liability. The object of section 79 is to discourage individuals claiming a reduction of their tax liability on the profits earned in companies that had sustained losses in previous years (sub-section b).

The Apex Court went on to state, that section 79 is an exception to the scheme in Chapter 6 and that to avoid falling within the scope of section 79, it is, therefore, sufficient to just show that the case attracts either clause (a) or (b). If the assessee can show that his case falls under the two clauses, he will be entitled to claim a carry-forward and set off of losses suffered by the company in an earlier year or any previous years against the income.

3. Sandeep Goyal, Counsel for the Income Tax Department Punjab and Haryana Region

M/s Tilak Raj Madan Lal Vs State Of Punjab And Ors 2007

Facts

The case related to Purchase and sale of sugar in packed Jute Gunny bags (bardana). The assessing authority held that the gunny bags sold with sugar are liable to tax. Simultaneously the tribunal modified its earlier order while holding that there was an implied condition concerning the sale of gunny bags.

Held

On the question of tribunal modifying its orders, the Court held that the, in this case, it cannot be something which could have to be established by a ling drawn process of reasoning on points.

On the issue of Gunny bags and sugar, it relied on the decision of Raj Steels Vs state of Andhra Pradesh (1989) 3 SCC 262 which laid down the tests in order to ascertain whether a sale transaction of packaging material will fall under the category of an independent transaction or if it is a one package deal. The factors are:

1. The packaging is capable of being reused once the contents have been consumed.
2. That packaging material is a commodity which has its own identity and is capable of being separately classified.
3. There is no change, either chemical or physical in the packaging, either at the time of packing or at the time of using the content.
4. The mere fact that the consideration for the packaging is merged with the consideration for the product, it would not make the sale of the packaging an integrated part of the sale of the product.
5. The quantity of packaging that is used for the convenience of transport and the quantity of the goods so transported are not dependent on each other.

Thus, the court held that gunny bags are taxable only if a person exclusively deals in the sale of gunny bags and that the sale of sugar to gunny bag manufacturer which they were not, thus the portioners were not deemed to be the first purchaser from the manufacturer of the gunny bags. Therefore, the order allowing the rectification application and simultaneously dismissing the rectification application are set aside.

5. Kashmiri Lal Goyal, Senior Advocate

M/S Food Corporation Of India V State Of Punjab, 2009

Facts

The questions involved in this case were:

1. Whether the expenses so incurred by the state or agencies of the Food corporation after the purchase or acquiring of goods before delivery to the petitioner could form part of the gross turnover and be subjected to tax.
2. Whether the foodgrains produced by the FCI under the levy order can be subjected to tax on grounds of sale/purchase.
3. Can the bardana supplied along with the foodgrains be subjected to tax?

Held

For Question 1 – A close scrutiny of Section 2(1) of Punjab General Sales Tax Act indicates special emphasis being laid on any sum that has been charged for anything done by the dealer in respect of the goods at the time of, or before the delivery. Purchase made by the dealer of agricultural produce through inter is bidding and its delivery has to incur certain which is either on or before the delivery. Therefore, it would include the price of a bag, price of jute thread, stitching charges, labour charges, dammi and carriage etc. As per the facts of the case, there was no delivery taken before weighment, which is technically not possible without packaging the agricultural produce in a gunny bag and that the cost of even stitching and labour incurred for these activities have to be included for effective delivery of the goods, which would include cost of carriage also. Therefore, for question No. 1 it will form part of the gross turnover and be subjected to tax.

For Question 2 – The case is covered by Hon’ble Supreme Court in Food Corporation of India Vs State of Kerala’s case (1997) 105 STC 4 which held that ‘the disputed transactions that fall under sales, maybe due to the compulsion of a statute. Nevertheless, those sales are still eligible to tax. Whatever force is used to bring about the transactions, the same must be traced back to legislation i.e. what has been mandated by the law, that has to be done, and not to the State Government who may/may not be a party to such transactions. Thus, the principal point is that the levy procurement is a sale/purchase thereby falling within the purview of entry No. 54 of List II of Seventh Schedule to the Constitution, the States are competent to levy sales/purchase tax on such transactions.’ 

Click Above

On the question of Market Fee – The aforementioned position was discussed and examined in detail by the Apex Court in State of Punjab v. Guranditta Mal Shauti Prakash (2004 (5) SCC 791, wherein it was held the seller has no obligation to pay market fee since it is only the duty of the buyer to pay the same and the seller can later realise it from the buyer.”

5. Mr V Lakshmikumaran, Senior Advocate

Commissioner Of Income Tax Vs Bhayana Builders (2018)

Facts

The Government issued notification no 15/2004 – ST dated 10.09.2004 as per which service tax was to be calculated on the value which is equivalent to 33% of the gross amount charged from any person by such commercial concern providing the taxable service. This was amended vide Notification no 4/2005 – ST dated 01.03.2005 whereby an explanation was added, clearing the air that the ‘gross amount charged’ shall include the value of goods and material supplied and provided, or used by the provider of construction services. This case thereby, raised the question as to whether the value of goods/material supplied or provided free of cost by a service recipient and further using it to provide the taxable service of construction or industrial complex, could be included in the computation of gross amount of the valuation of taxable service u/s 67 and Notification no 15/2004 – ST dated 10.09.2004.

Held

It is upon the service recipient to use any quality of goods and the value of such goods, have absolutely no bearing on the value of services provided by the same service recipient. On the first principle itself, any value not part of the contract between the service provider and the recipient has no relevance in the determination of the value of taxable services so provided. Since the levy of service tax has been found to be non-existent, the question of exemption does not arise. Service tax is to be levied in respect of ‘taxable services’ and for the purpose of arriving at 33%, of the gross amount charged, unless the value of goods/materials is specifically included by the Legislature, it cannot be added.

Explanation (c) to Section 67 lays down the definition of “gross amount charged” which includes the modes of the payment or book adjustments by which the consideration can be discharged by the service recipient to the service provider. This definition in no way expands the meaning of the term “gross amount charged” which may enable the Department to ignore the contract value so charged by the service provider. The definition is an inclusive definition and not an  exhaustive one, and in no certain terms does it lead to the conclusion that the contract value can be ignored or that, the value of free supply goods can be added over and above the contract value for the sole purpose to arrive at the value of taxable services.

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

The post Top 5 Income Tax Lawyers in India and One Landmark Case They Argued appeared first on iPleaders.

This article was written by Nishtha Pandey (batch 2023), from Dr. Ram Manohar Lohiya National Law University, Lucknow. This article describes the provisions present under the Criminal Procedure Code, 1973, regarding the rules of evidence.

Introduction

Evidence is presented in the legal cases to prove the veracity of the arguments in a court of law. The state has to prove guilt beyond a reasonable doubt, while the defendant has to present evidence to challenge the state’s case. Each side should have the opportunity to review the other side’s evidence before the trial and to object to the introduction of certain evidence before or during the trial.

Scope

The rules of evidence present under the CrPC are applicable throughout India (except a few areas). The provisions present under this have a broad scope and are also applicable to the witnesses from a foreign country, subject to a few conditions.

Commission for the examination of witnesses

Dispensing with the attendance of witnesses by issuing a commission for his examination

When in the course of the inquiry or the trial, the judge or the Magistrate thinks that the presence of the witness is necessary for proper dispensation of justice but the attendance of the witnesses would incur delay and expenses which would be unreasonable, then the court may dispense the presence of the witness and it will then issue a commission that would ensure the examination of the witness according to the provisions of this code. Moreover, if it is necessary for the proper dispensation of justice to examine the president and vice president or governor of the state or administrators of the union territory, then the commission for such examination shall be issued.

It is also mentioned that where the court issues a commission for the examination of the witness, then the court can ask for a reasonable amount for the expenses that would incur during such examination like the pleader’s fee etc.

Important Witness

It is a rule that the witness on whose testimony the entire case is built must be examined and the examination on the commission must be restricted to only on those cases where the witnesses cannot come or if he can then it will cause unreasonable delay or expenses. However, it is important to note that the complainer cannot be examined on commission.

Foreign witnesses

The criminal courts have wide power to examine a foreign witness, provided the evidence of such witness is necessary. If the foreign witness is unwilling to come then he can be examined on commission. The court usually passes the order of the examination of the witnesses on commission when it is satisfied that not only it is necessary but also it is to be enforceable. The court can also refuse to extend the time when the reciprocal agreement for the examination of the witness.

To whom commission is given?

Under Section 285 of the CrPC, guidelines as to who shall be given the commission are given, which are:

• If a witness is within the territories to which this Code extends the commission shall be directed to the Chief Metropolitan Magistrate or the Chief Judicial Magistrate, within whose local jurisdiction the witness is found.
• If the witness is in India, but in an area where this Code does not extend, the commission shall be directed to the Court or officer as specified by the Central Government by way of a notification.
• If the witness is in a place outside India but arrangements have been made by the Central Government with the Government of that country or place for taking the evidence of witnesses in relation to criminal law of that country or place, then commission will be issued in such form, directed to that Court or officer, and sent to the authority for transmission as specified through a notification issued by the Central Government.

Where the accused is to examine on commission in a foreign country then the facility of the lawyer cannot be dispensed with, in the case of accused just because he has tampered with the foreign witnesses in initial stages.

Moreover, the court passes the order for the examination of witnesses in commission when the court is satisfied not only about the necessity of such evidence but also about the effective enforceability of commission of examination of witnesses.when court finds that there are no reciprocal arrangements in existence it is not inclined to make any order.

Execution of commission

Under Section 286 of the Code, upon the receipt of the Commission, the Chief Metropolitan Magistrate, or Chief Judicial Magistrate, can summon the witness before them or go to the place where the witness is, and shall take down his evidence in the same manner, and exercise the same powers, as in trials or warrant cases under the CrPC.

Return of commission

After any commission issued under Section 284, which talks about the dispensation of the attendance of witnesses, and it has been executed, then it shall be returned along with the evidence of the witnesses examined under the commission, to the Court or Magistrate issuing the commission, its return and the deposition shall be open at all reasonable times for the parties to inspect, is subject to all just exceptions, present in the evidence in the case by either party and it shall also form part of the record.

Any deposition that is taken, if satisfies the conditions present in Section 33 of the Indian Evidence Act, 1872, may also be received as a piece of evidence at any later stage of the case before another Court.

Execution of foreign commission

As per Section 290 of the Code, Sections 286, Section 287 and Section 288 apply to the execution of its commission and also its return shall also apply to the commission issued by any Court, Judge or Magistrate in the same way as they apply in Section 284 of the Code.

The Courts, Judges and Magistrates mentioned above are:

• One who has jurisdiction at a place in India, where the scope of this Code does not extend and Central Government may specify in this regard.
• The one who is practising outside India in a country which is specified by the Central Government by way of notification and such Court, Judges and Magistrate should be competent to issue commission and execute it on the basis of the criminal law prevalent in the country.

Adjournment of proceeding

Under Section 289 of the CrPC, it is mentioned that in every case where the commission is given under Section 284, then the trail, inquiry or other proceedings can be suspended for a time which is sufficient for the execution of the commission and even its return. 

Several cases have laid down that the taking of evidence on commission in criminal cases should be used in a very restricted manner, which is in extreme cases of delay, expense or inconvenience, and also in the case of a sick person or a pardanashin woman. The Rajasthan High Court in the case of Оm Prakash vs State of Rajasthan, held that a pardanashin lady is not exempted from appearance in a Criminal Court as a matter of right.

In the case of Gulabrao v. S.D. Raje, Bombay high court has held that when a witness is a complainant in a defamation suit, his attendance cannot be done by issuing a commission for his examination, merely because of the fact that he is a Minister.

The inconvenience which is considered by the Court is not only the inconvenience to the parties but also the inconvenience to the witness who is to be examined. Thus, an apprehension of arrest, or a risk to the personal safety of a witness caused by threats given by the accused, would amount to “inconvenience” in the eyes of the law. moreover, the possibility of a witness, who is a foreigner losing his job in his own country if he were to disobey his employers and come to India to give evidence, would amount to “inconvenience” as per the provisions of this code.

Special circumstances permitting evidence 

Deposition of the medical witness

Under Section 291 of the Code, the provisions regarding the deposition of the medical witnesses are present. This section only deals with the situation where the medical witness is not called at the trial, it cannot be extended to the cases where such medical witness was called and examined. 

• The evidence given by a of a civil surgeon or other medical witnesses, taken and attested by a Magistrate in the presence of the accused, or taken on commission under this Chapter, may be given in evidence in any inquiry, trial or other proceeding under this Code, although the deponent is not called as a witness.
• The Court may, if it thinks fit, and shall, on the application of the prosecution or the accused, examine any such deponent as per the subject of the evidence given by him.

This section confines itself to expert evidence that is tendered by a medical witness as such. It has no application to evidence relating to facts tendered by a person who also happens to be a medical man. The evidence must relate to medical matters only. However where the doctor is dead or unavailable, then the injury report or post mortem report is considered to be relevant and is hence admissible.

The medical man can be referred to report made by him of the post mortem but such report cannot be considered as a piece of evidence in itself. But the notes of the post mortem report made by the medical. It is important to note that the injury report and post mortem report is not substantive evidence.

Identification report by the magistrate

Under Section 291A of the Code, any document which is claimed to be a report of identification undersigned by the Executive Magistrate in respect of a person or property can be used as evidence in any inquiry, trial or other proceedings under the provisions of this Code, although such Magistrate cannot be called as a witness. However, where such a report contains a statement of any suspect or witness to which provisions of Section 21, Section 32, Section 33, Section 155 or Section 157, of the Indian Evidence Act, 1872 apply, such statement shall not be used under this Sub-Section except in accordance with the provisions of those sections.

The Court may, if it thinks fit, and shall, on the application of the prosecution or of the accused, summon and examine such Magistrate as to the subject matter of the report.

Evidence of officers of the mint

Under Section 292 of the Code, any document which is claimed to be a report under the authority of any such gazetted officer of the Mint or of the India Security Press as the Central Government may specify in this behalf, upon any matter or thing duly submitted to him for examination and report in the course of any proceeding under this Code, may be used as evidence in any inquiry, trial or other proceeding under this Code, although such officer cannot be called as a witness.

The Court if it deems fit, can summon and examine any officer as per the subject matter of his report. However, no such officer shall be compelled to produce any records on which the report is based.

Notwithstanding the provisions of Sections, 123 and Section 124 in The Indian Evidence Act, 1872, no officer shall be permitted-

• To give any evidence derived from unpublished official records on which the report is based;
• To disclose the nature or particulars of any test applied by him in the course of the examination of the matter or thing.

However, this would not apply if the officer has the permission of the Master of the Mint or the India Security Press or the Controller of Stamps and Stationery.

It is to be noted that the report given by the handwriting expert is not the same as evidence and will not be admissible as unless the examination of the expert himself.

The report submitted by certain offices is good evidence, they are:

• A chemical examiner or his assistant;
• Chief inspector of explosives;
• Director of the fingerprint bureau;
• Any Mint officer.

Hence the law commission in its report proposed that a separate section should be made for the cause of these offices so that while examination they not compelled to divulge some confidential information on which the report is based.

Report of certain Government scientific experts

Under Section 293 of the CrPC, reports of certain Government scientific experts will include:

• Any document which is to be a report under the Government scientific experts to whom this section applies, upon any matter or thing which is submitted to him for examination or analysis and report in the course of any proceeding under this Code, may be used as evidence in any inquiry, trial or other proceeding under this Code.
• The Court may, if it thinks fit, summon and examine any such expert as to the subject-matter of his report.
• Where such expert is summoned by a Court and he is unable to present himself before the court, and there is no express direction by the court to be personally present then he may depute any responsible officer working with him to attend the Court if such officer is well versed with the facts of the case and can satisfactorily represent the person in Court. This section applies to the following Government scientific experts:

1.  Any Chemical Examiner or Assistant Chemical Examiner to Government;
2. The Chief Inspector of- Explosives;
3. The Director of the Finger Print Bureau;
4. The Director, Haffkine Institute, Bombay;
5. The Director, Deputy Director or Assistant Director] of a Central Forensic Science Laboratory or a State Forensic Science Laboratory;
6. the Serologist to the Government.

It is held that in case of no request form the accused of summoning any officer, the trial court can admit it in evidence and need not call the analyser. The section uses the word “may” and not “shall”. There may be circumstances in which it becomes necessary to call an analyser like in the interest of justice, but otherwise, it is not necessary to call upon the analyser every time there is an analysis to be made.

The accused has the right to call analyst but if this is done to cause a delay in the trial proceeding, then this prayer could be rejected by the Court. Hence this request of the accused must be examined and cross-examined.

No formal proof of certain documents

Under Section 294 of the Code, where any document is filed before the Court, the specifics of each document must be included in a list and the prosecution, the accused or the pleaders as per the case,  are called upon to admit or deny the veracity of such documents.

The list of documents shall be in such a format which is prescribed by the State Government.

Where the sanctity of any document is not disputed, then it will be considered as a piece of evidence in a trial or other proceedings under the provisions of this Code, without proof of the signature of the person to whom it claims to be signed, however, the Court may, in its discretion, require such signature to be proved.

Affidavit in proof of conduct of Public Servants

Under Section 295 of the CrPC, when an application is made to a Court during any inquiry, trial or any other proceedings under the provisions of this Code, and allegations are made against a public servant, the applicant, in that case, has to give evidence of the facts alleged in the affidavit, and the Court may, if it deems fit, order the applicant to produce the evidence so given.

Evidence of the formal character of an affidavit

Section 296 mentions that if any evidence given by the person is of a formal nature, the affidavit has to be used for the same and will be subject to all such exceptions be read in evidence in any inquiry, trial or other proceeding under this Code.

Moreover, the court if it thinks fit, or on the application of the prosecution or the accused, can summon and interrogate the person based on the facts of the affidavits.

The object of this section is to accelerate the disposal of cases. If however the nature of the affidavit is not of formal nature and goes to the very root of it, then the provisions of this Section would not be applicable. It is clear that the evidence to be admissible has to be properly sworn in and while appreciating the evidence the Magistrate has to apply his judicial mind and should not mechanically examine the related documents. One of the examples of formal evidence is the investigation carried out by the police, following the various rules of a formal investigation. The evidence found under this investigation need not be examined in a court of law. 

In the case of Shankaria vs the State of Rajasthan, it was held that if the witness has taken the specimen fingerprints of the accused filed an affidavit, then his non-examination is immaterial because the evidence is formal in nature and is admissible in a court of law.

Affidavits in proof of certain matters

Under Section 297 it is stated that if any affidavits had to be sworn in court then it has to be affirmed by:

• A judge or any judicial magistrate or executive magistrate;
• Any commissioner of oath appointed by the High Court or Sessions Court;
• Any notary appointed under the Notary Act.

Affidavits should be confined only to the facts which he believed to be true, the deponent should also furnish the reason for the grounds of such belief, or which he could prove from his own knowledge.

The court may order any irrelevant or scandalous material to be struck out or amended.

It is important to note that if it is not mentioned as to which part of the affidavit has been sworn in and it could not be construed, from personal knowledge or from other sources then the person before whom it was presented has not certified the fact of swearing before him or that it has been explained to the deponent, then it cannot be considered as an affidavit and it has no value in the eyes of law. Affidavits not validly sworn cannot be read as legal evidence.

Verification

The verification of the affidavit is required is very important and it must be specified as to which part of the affidavit is verified as per deponent’s knowledge and which part is as per deponent’s information. Where the whole of the affidavit has been verified on both knowledge and information then such an affidavit is not valid and cannot be taken into consideration. Moreover, if the verification is not done as per the rules of the Code, and will be considered as evidence.

Proof of previous conviction or acquittal

Under Section 298 of the Code, if in inquiry, trial or other proceedings any previous offence of the person could be proved in addition to any other mode present in the law. This could be proved by way of:

1. Under the officer who was in charge of all the certified documents in which the acquittal and conviction of the accused have taken place.
2. In case of the presence of the certificate which is signed by the officer in charge of the jail in which the punishment or part of it was undergone or by warrant under which the punishment was suffered. Along with this the identity of the accused along with the accused or convicted. It could be proved by way of fingerprints (for example)

This section provides a special mode through which the previous convictions or acquittals could be proved. A previous conviction must be proved strictly in accordance with the law and unless proved it cannot be taken into consideration by any court of law. Moreover, it was held that the examination of the accused with respect to proving the previous convict is inadmissible.

Mere admission of the accused is not sufficient to prove conviction. Although the name of the convict is present in the affidavit it will not absolve the prosecution from its duty to prove the previous convictions of the accused.

Record of evidence in the absence of the accused

Under Section 299 of the CrPC, it is stated that if it can be proved that an accused person has been absconded and that there is no immediate prospect of arresting him, the Court which competent to try such person for the offence complained of can in his absence, examine the witnesses produced on behalf of the prosecution, and record their depositions and any such deposition may, on the arrest of such person, be given in evidence against him on the inquiry into or trial for the offence with which he is charged, if the deponent is dead or incapable of giving evidence or cannot be found or his presence cannot be procured without an amount of delay, expense or inconvenience which, under the circumstances of the case, would be unreasonable.

Moreover, if it appears that an offence punishable with death or imprisonment for life has been committed by some unknown person, the High Court or the Sessions Judge may direct that any Magistrate of the first class shall hold an inquiry and examine any witnesses who can give evidence concerning the offence and any depositions so taken may be given in evidence against any person who is subsequently accused of the offence if the deponent is dead or incapable of giving evidence or beyond the limits of India.

It is clear under the section that the Court under which the proceedings are recorded or satisfactorily proved that the accused has absconded and there no prospect of arresting him immediately, in case no such order is recorded then it is enough if the court is satisfied as to such requirements. The court must also record cogent reasons for the same (for example the person was dead, incapable or could not do it without unreasonable delay or expenses) Moreover “absconding” does not mean to leave one residence, if a person commits a crime and later leaves the country, then he shall be deemed to have absconded as far as the laws of the country would be applicable.

Trial Of Absconding Accused

The evidence which is recorded against and absconder accused can be examined when he is apprehended later and can be tried even in his absence from the court. The provision is meant to protect in the situations when there are many accused that need to be tried and few of them absconded, so avoid any undue delay of the other accused. It is valid to use the evidence of the accused present, on the accused who are absconded when they are later held. This provision is however against the general provisions that the evidence must be read in the presence of the accused, but here the defence is that it is the fault of the accused to participate in the court.

The court has to ensure the identity of the absconder when he is later apprehended, and he was convicted for the crime of which the evidence was produced.

The section does not give power to the Magistrate to delete the name of the absconder. The magistrate must only satisfy himself that the accused has absconded and there is no likelihood of his apprehension.

The evidence recorded at the time when the accused has not appeared and the witness could be re-examined can not be recorded, even with the permission of the accused.

Conclusion

The provisions of the Criminal Procedural Code,1973 provides for the rules that are to be followed in cases of evidence in the criminal suit. The provisions mentioned for the purpose of evidence are very broad and are applicable even on the witnesses who are residing abroad. These provisions also take in its ambit the Courts, Magistrates or Judges that are present outside India. The central government can by way of a notification ordering the applicability of this code in the areas which are not under the scope of the CrPC. these are special rules of evidence that are applied in the case of medical man, mint, absconder etc.

References

• Ratanlal and Dhiraj lal Criminal Procedure Code, 1973
• http://www.shareyouressays.com/knowledge/commissions-for-examination-of-witnesses-under-section-284-299-of-code-of-criminal-procedure-explained/117991

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

The post Special Rules of Evidence Under CrPC, 1973 appeared first on iPleaders.

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

I was speaking to a Calcutta University law student. She was in the second year of a 5-year program.

She was one of the sharpest people I have ever spoken to. She said that internship reviews of law students are very vague. It is not clear what work they did in the internship. She wondered why. 

I told her that this was the case because most law students themselves did not know why they were performing the tasks that they did. I know this because I speak to multiple law students every-day. 

She read a number of law books, but she had recognized that they didn’t teach her how to serve a client. She wanted to learn that. She was clear that this will be essential to make her employable. 

We then discussed that the cost of a Lawsikho diploma was INR 30,000 (if she paid in instalments). She was clear about the value, but felt very guilty about asking her father to finance and support this. 

She was already self-financing her college fees for her law degree by providing tuitions to school kids in Class X – XII. Hats off to her commitment and drive. Thankfully, Calcutta University fees is not very high, unlike some expensive national law universities and private law schools.

Nevertheless, we did some quick calculations on the call. We were exploring the best way in which she could help her father out. 

At 15% compound interest per annum, if she helps her father save that INR 30,000 it will become INR 60,000 over 5 years.

(15% per annum compound interest is what the best mutual funds in today’s stock markets can promise you. The brightest real estate deals also will not fetch you more.)

Her living cost, while staying at home was INR 5,000 per month. 

She said it was unlikely that she would be able to earn more by providing tuitions. It would consume more time if she did and that was not feasible for her. Currently, she needed to spend whatever time she had left to her studies and internships.

Therefore, her dad would be paying INR 1,80,000 if he supported her for 3 years and if she did not earn any more.

If she did one of our classroom courses (EC or diploma), she would drastically improve her likelihood of securing an internship in her preferred area of interest, owing to increased direction, publishing articles relevant to the area (our students publish one article per month) and performing practical tasks to acquire relevant skills over a period of a few months. 

Apart from increasing her chances of securing an internship, this would also enable her to perform better at an internship. She would be able to add value as she would know things and would have performed some of the tasks beforehand. She would understand what the clients wanted from her seniors, and what the seniors expected out of her. Her work would stand out.

Owing to the large difference between her and others, her seniors would be interested in giving her more work and responsibility in the first month itself. 

They would be interested in extending her internship. She was willing to perform a continuous internship.

In a couple of months, maybe they would also be willing to pay her a small stipend. Why not? If she saves a senior’s time and enables him or her to work for more clients, would paying her a stipend of INR 10,000 hurt her senior? 

Click Above

This would enable her to gradually reduce the time she spent in taking tuitions.

In another couple of months, her stipend could increase by INR 2000-5000, at which point she would completely stop taking tuitions, as she would be earning the same or a slightly higher amount. 

If she could help a friend, a relative once in a few months, she could charge about INR 10,000.

Look at what happens from this point onward. 

All her efforts are channelized in one direction- towards her dream career. Her lack of financial support has no impact anymore. 

Her finances and life situation have turned around. Everything she does from here will directly benefit her career. 

Now, let us assume that she was earning an average INR 10,000 per month from her 3rd year onwards. (This is a very modest figure, as she could have started out with INR 5,000 and in a few months earned about 15,000 or even more. Let’s take an average of INR 10,000 to keep it reasonable.)

In 3 years, she would earn INR 3,60,000. 

She would have recovered 12 times the course fee amount. 

She would have earned enough to self-finance her living costs for these 3 years, which would amount to INR 1,80,000, assuming INR 5,000 per month.

She would have repaid the course fee of INR 30,000 to her dad during this period. 

She would still have a surplus of INR 1,50,000, which she could route towards paying her LLB fees at Calcutta University.

She would have gone far ahead in pursuit of her career than she would have had if she continued taking tuitions for Class X or Class XII subjects in the long term.

Of course, it’s not the course alone, but her own efforts combined with the course, which led to the results she had. 

How much did it help her father save?

Decision 1: Save INR 30,000, but spend INR 1,80,000 on living costs. In addition, pay college fees. Impart tuitions to finance them. 

As a result, she would be minus 1,80,000. Plus, she would have less time to learn about the area of law in which she wants to build a career.

This entails some risk after graduation. She would have no clear advantage over others that would make it more likely for her to obtain a job.  

Decision 2: Spend INR 30,000, earn INR 3,60,000. 

Pay INR 1,80,000 for living cost. Repay the course fees as well. 

Shift from tuitions to long-term internships. Learn way more.

Earning a reasonable stipend during college itself would give her the confidence that she would secure a job (or multiple offers) after graduating. 

In fact, I have heard of horror stories of law students interning in law firms for as long as a year for free. When they asked for a stipend, they were asked to leave. 

(The reason was because they were not able to add value as they did not possess enough skills. Of course, after one year of working, it would be difficult for them to absorb this.)

Now tell me, which one is better?

(Some of you may be wondering about what will happen if this plan does not work. For that, watch out for another email this week. I will deal with fear of failure extensively.) 

For those of you who are interested, here are some of the courses which are closing for enrolment in the next 10 days:

DIPLOMA 

Diploma in Business Laws for In House Counsels

Diploma in Companies Act, Corporate Governance and SEBI Regulations

EXECUTIVE CERTIFICATE COURSES

Certificate Course in Advanced Corporate Taxation

Certificate Course in Insolvency and Bankruptcy Code

Certificate Course in Advanced Civil Litigation: Practice, Procedure and Drafting

Certificate Course in National Company Law Tribunal (NCLT) Litigation

Certificate Course in Arbitration: Strategy, Procedure and Drafting

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

The post Real cost of ‘guilt’ of making your parents spend INR 30,000 on an online course appeared first on iPleaders.

This article is written by Pranjal Rathore studying in Maharashtra National Law University, Aurangabad pursuing B.A.LL.B.(Hons.). The author has dealt with private defence related to property and has tried to clear the concepts in short and simple language.

Introduction

An individual can practice the right against the property of others alongside his own property. The privilege or right of private defence against the property must be practised against offences in the class of burglary, theft, mischief or criminal trespass or against robbery, mischief or house-trespass the individual is under sensible dread or fear of likely to cause death or grievous hurt. Each individual has an option to discard his property and to discard any trespasser who goes into his property without consent. Be that as it may, if the trespasser has the ownership of the property and the proprietor thinks about it, the privilege of private defence isn’t accessible to the proprietor. For instance, occupant. 

Conditions for the Right of Private Defence of Property

For practising such right, the following conditions should be satisfied:

1. The trespasser must be in real physical ownership of the property over an adequately significant time period;
2. The ownership must be in information of the proprietor, either communicated or without concealing any fact of truth;
3. The procedure of dispossession of the genuine proprietor by the trespasser must be finished and final;
4. If there may arise an occurrence of culturable land, in the event that the holder has developed any harvest on the land, at that point none including the genuine proprietor has an option to devastate those yields.

Right of Private Defence of Property

Possession of Property

If the trespasser has the possession of the property and the owner knows about this fact then the owner has no right of private defence against the property. On the other hand, if the trespasser does not have possession of the property then the owner of the property does have the right of private defence. Thus, possession of property plays a main role in accordance to have the right of private defence of the property.

Right of Private Defence of Trespasser

The privilege of self-defence against a trespasser is accessible till the time the trespasser is actually on the land. In the event that the trespasser attempts to confiscate or dispose of the proprietor from the property, the proprietor has the right to dispense such wounds over the trespasser to seize him from the property. The minute the trespasser is confiscated, the proprietor’s privilege of private defence is terminated and he can’t take law in his hand and harm the trespasser. There are situations where private defence is accessible against the proprietor. In the event that the individual is in legal ownership of the property and the proprietor attempts to seize him from the property, the holder of the property has an option to practice private defence.

Private Defence of property extends to causing death

An individual can’t practice his privilege of private defence against the property to cause the demise of any individual with the exception of in the accompanying cases:

Robbery

Robbery, according to Section 390 of IPC, can be submitted in two different ways. In the long run, burglary is a propelled phase of either robbery or coercion. Burglary is Robbery when at the hour of submitting robbery the person.

1. Causes death, hurt, unjust restriction, wrongful confinement;
2. Endeavours to cause death, hurt or unjust restriction;
3. Causes dread of death, hurt or unjust limitation;
4. Endeavours to cause dread of death, hurt or wrongful confinement.

Blackmail or Extortion is theft when at the hour of doing robbery the individual is placed in dread of moment passing, hurt or unfair restriction.

House-breaking at night

According to Section 446 of the IPC, if an individual commits housebreaking at night the other individual has a privilege of private resistance to a degree of causing the demise or death of the trespasser.

Mischief by fire

It is clarified under Section 436 of the IPC. In the event that any individual acts to make unfair harm to somebody’s property, it goes under mischief. Mischief by fire is considered as the most aggravated type of mischief.

On the off chance that an individual submits mischief by setting fire on any structure, tent or vessel which is utilized for the human dwelling; someone else has a privilege to cause the death of that individual under the right of private protection.

Robbery, mischief or house-trespass with sensible dread of death or grievous hurt

If any offence of burglary, robbery, mischief or house-trespass is being committed on somebody’s property, an individual, for the most part, can’t cause the death of the guilty party. In any case, if the individual is under a sensible dread or threat that if he won’t cause the death of that individual then the outcome will be his death or intolerable hurt, then he can cause the death of the wrongdoer.

It might be seen on account of Kanchan v. State, on the grounds that mischief was done by the injured individual and his friends on the property of the accused, the accused doesn’t reserve a privilege to cause death. There must be a sensible threat that death or grievous hurt may somehow or the other will be the outcome of the action.

In all the above-said circumstances, in spite of the fact that the right of an individual can be reached out to causing the death of the assailant, the privilege can’t be practised in excess to what is vital or necessary.

When Right of Private Defence of Property Extends to Cause other than Death

In the event of the offence, the committing of which, or attempting to carry out which calls up the activity of the right of private defence, be it burglary, mischief, or criminal trespass, that right doesn’t reach out to the intentional causing of death, yet extends, subject to the limitations referenced in Section 99, to deliberately causing to a wrongdoer, any damage other than death. This Section can’t be said to be given admission to the accused to surpass their right of private defence in any capacity. On the off chance that anybody surpasses the privilege of private defence and causes the death of the trespasser, he would be liable under Section 304, Part II. This Section is end product to Section 103 as Section 101 is a conclusion to Section 100.

In V.C.Cheriyan v. State three deceased individuals alongside some other individual had unlawfully laid a street through the private property of a Church. A criminal body of evidence was pending in court against them. The three deceased people having relations with the Church, set up blockades over this street so as to shut it down. The three deceased who began evacuating these blockades were wounded to death by the accused. The Kerala High Court concurred that the Church individuals had the privilege of private defence however not to the degree of causing the death of the unarmed deceased individual whose act didn’t fall under Section 103 of the Code.

Commencement and Continuation of the Right of Private Defence of Property

The Right of private defence of the property starts when a sensible apprehension of risk to the property initiates. The privilege of private defence of property against burglary proceeds till the wrongdoer has effected his retreat with the property or either the help of the public authorities is acquired, or the property has been recovered. The right of private defence of property against theft proceeds as long as the guilty party causes or endeavours to cause to any individual death or hurt or wrongful confinement of as long as the dread of instant death or of instant hurt or of moment individual restriction proceeds.

• The privilege of private resistance of property against criminal trespass or evil proceeds as long as the guilty party proceeds in the commission of criminal trespass or insidiousness.
• The privilege of private resistance of property against house-breaking around evening time proceeds as long as the house-trespass which has been started by such house-breaking proceeds.

This privilege can be practised if there is no opportunity to have a plan of action of public authorities. When the trespass is practised effectively the genuine proprietor of the property loses the right of private defence to secure the property. No right of private defence to ensure the property is accessible to a trespasser when disputed land is not at all possessed by him.

Right of Private Defence against a deadly assault which is likely to cause harm to the innocent person

On the off chance that in the activity of the right of private defence against an attack which sensibly causes the apprehension of death, the defence can be taken to such an extent that he can’t viably practice that right without danger of damage to an honest individual, his right or private defence stretches out to the running of that hazard.

Illustration: 

‘A’ is assaulted by a horde who endeavour to kill him. He can’t adequately practice his right of private defence without terminating the horde, and he can’t fire without danger of hurting little youngsters who are blended with the crowd. ‘A’ submits no offence if by so terminating he hurts any of the youngsters. 

This section removes an obstacle morally justified of private defence. The hindrance is the uncertainty in the brain of the person, concerning whether he is qualified to practice his right in any event when there is a plausibility of some guiltless people being hurt by his actions. The section says that on account of an assault sensibly causing an apprehension of death, if the defence is looked with such a circumstance where there exists the danger of damage to a guiltless individual, there is no confinement on him to practice his privilege of private defence and he is qualified for running that hazard.

Right of Private Defence Short of Death

Section 104 limits the privilege of Private Defence of property, as Section 101 puts a stoppage on the privilege of Private Defence of the body, to cause any damage short of death in the exercise of the privilege of Private Defence. Section 104 as needed, gives that if the offence which occasions the exercise of the privilege of Private Defence be it robbery, mischief or criminal trespass, and not of any of the portrayals specified in Section 103, the privilege of private defence stretches out just to the intentional causing of any damage other than death. Section 104 of the I.P.C. is an end product to Section 103 of the I.P.C. 

In Nathan v. State of Madras, the Supreme Court held that since it didn’t give the idea that the collecting party was furnished with any fatal weapons and there could not have been any fear of death or grievous hurt with respect to the appealing party and his party, under Section 104 of the I.P.C. Their privilege was constrained to causing of any damage other than death. In this way the accused, however, they were practising the right of private defence of property, surpassed that right when they caused the death of one of the party and subsequently, their case fell under exception 2 to Section 300 of the I.P.C., also, they will be at risk for culpable homicide not adding up to murder under Section 304 of the I.P.C. and not kill.

Conclusion

To legitimize the activity of this privilege coming up next are to be inspected:

1. The whole mishap;
2. Injuries got by the charged;
3. The imminence of danger to his security;
4. Injuries brought about by the accused;
5. Circumstances whether the charged had the opportunity to plan of action to open specialists.

Right of private defence is a decent weapon in the hand of each resident to guard himself. This privilege is not of vengeance towards the risk and inevitable threat of an assault. If in any case, individuals abuse this right, it is hard for the court to see if this privilege had been practised in accordance with some basic honesty or not.

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

The post Private Defence related to Property: A guide appeared first on iPleaders.