NMIMS Global Access School for Continuing Education (NGA-SCE)

Course: Business Law

Internal Assignment Applicable for June 2019 Examination (Sem 2)
_____________________________________________________________________
1. List out the exemptions under which information can be denied under the Right to Information
Act, 2005.

INTRODUCTION

The Right to Information (RTI) Act was passed on 15th June 2005. The RTI Act’s main objective is to
set out a practical regime of right to information for citizens to secure access to information under
the control of public authorities. RTI Act plays an important role in promoting the transparency and
in working of every public authority.

Although RTI ACT’s main aim is to provides the information to the citizens, but revelation of some
information can conflict with other public interests, such as efficient operations of the Government,
optimum use of limited fiscal resources and the preservation of confidentiality of sensitive
information. Hence, with a view to harmonize these conflicting interests while preserving the
greater public interests, Section 8 has been enacted for providing certain exemptions from
disclosure of information.

Act give a power to public information officer to deny the revelation of certain information based on
the exemptions chartered under Section 8 and Section 9 of the act. However, unless the public
authority can demonstrate that information sought for falls under any of the exempted categories of
information, it would be bound to provide the information. In case of rejection, reasons for rejection
of requests for information must also be clearly provided.

CONCEPT AND APPLICATION

The RTI Act mandates disclosure of information rather than withholding the same, unless the
information sought for falls under any of the exempted categories of information enumerated
in the Act. Section 8(1) and Section (9) of the RTI Act enumerate the types of information which are
exempt from disclosure, while the Section (24) of the Act exempts some organizations from
furnishing information under RTI Act.

In the Central Act, section 8(1) lists all the exemptions. Below is a general discussion of the
exemption provided in RTI act:

National Security or Sovereignty: There may be some information, which can be a threat to national
security or Sovereignty. For example, if anybody seeks an information detailing the number of
soldiers defending a boundary, where they were positioned, what ammunition they have or their
strategic plans. Whole or part of such information can be used to endanger national security.

Relations with Foreign States: The relationship between countries can sometime be sensitive, such
as strategic alliance and motives of strategic partnerships between two counties could easily offend
third country or group of country and in doing so can damage India's own international interests.

Law Enforcement and the Judicial Process: Sometime there may be information which needs to be
protected while an investigation is underway, for example, witness’s identities or the case being put
together against a suspect. Such information can jeopardize the law enforcement. In other situation
if Court has ordered to keep secret some information, such revelation of such information can lead
to contempt of court. Also, the discussions between a lawyer and their client will almost always be
kept secret, even if the lawyer is the Attorney-General and the client is the Government.

Page 1|8
 NMIMS Global Access School for Continuing Education (NGA-SCE)
Course: Business Law
Internal Assignment Applicable for June 2019 Examination (Sem 2)
_____________________________________________________________________
National Economic Interests: Disclosure of certain information regarding currency or exchange
rates, interest rates, taxes, the regulation or supervision of banking, insurance and other financial
institutions, proposals for expenditure or borrowing and foreign investment could in some cases
harm the national economy, particularly if released prematurely. However, lower level economic
and financial information, like contracts and departmental budgets should not be withheld under
this exemption.

Trade Secrets and Commercial Confidentiality: Since it is already recognized by law that companies
should be able to protect their trade secrets. Revelation of such information may hinder the
competitive position of the company. Care should also be taken to minimize the harm caused to a
company's competitive commercial interests when disclosing information, for example, by not
publishing tender submissions during a tender process. Trade secrets such as patented products /
manufacturing process cannot be shared through RTI. However, if public authority is satisfied that
the larger public interest warrants such revelation, such information can be disclosed partially or
fully.

Individual Safety: Certain information could not be disclosure where publication would likely to put
an individual's safety or liberty at risk. For example, the identity of a whistle blower, criminal
witness, etc

Personal Privacy / Fiduciary information: There is considerable information about individuals which
is held by the government or certain company. The right to privacy requires that the government
should try to protect this information from public disclosure unless greater public interest warrants
that. For example, any medical records held by hospitals, discussion between a lawyer and his client,
etc.

Breach of Parliament Privileges: Under this any information is prohibited if it causes a breach of
privilege of Parliament or state legislature. In India, under article 105 and 194 of the constitution the
powers and privileges are given to the parliament and the state legislature. This powers and
privileges can’t be breached. If any information is disclosed and is causing breach of powers and
privileges then it is exempted to provide information.

It is extremely positive that the Central Act makes all of the exemptions contained in section 8(1)
subject to a "Public Interest Override" (see section 8(2) of the Central Act). What this means is that
even where requested information is covered by an exemption, the information should still be
disclosed to the applicant if the public interest in the specific case requires it

CONCLUSION

Mandate of the RTI Act is to make public the information held by public authorities except that,
which is exempted under any of the provisions of the Act or any other special law. The provisions of
RTI Act bring light to the necessary information, which relates to securing transparency and
accountability in the working of public authorities and in discouraging corruption. However, The RTI
Act is not absolute. Not all information that the Government generates will or should be given out to
the public. Everyone would there are some pieces of information, which are so sensitive that if they
were released to the public, they might cause serious harm to more important interests.

Page 2|8
 NMIMS Global Access School for Continuing Education (NGA-SCE)
Course: Business Law
Internal Assignment Applicable for June 2019 Examination (Sem 2)
_____________________________________________________________________
2. Explain two (2) instances in which the consumer courts in India have given directions/orders
awarding reliefs in respect to defect of goods/deficiency of service. Each instance should in detail
explain (i) facts of the case and (ii) what relief and damages the consumer courts has granted.

INTRODUCTION

The Consumer Protection Act, 1986, was implemented to provide a Quicker and Simpler redressal to
consumer grievances. The Act helps to promote and protect the interest of consumers against
deficiencies and defects in goods or services and it seeks to secure the rights of a consumer against
unfair trade practices, which may be practiced by manufacturers and traders.

The Act applies to all goods and services unless specifically exempted by the Union Government and
covers all sectors, whether private, public, or cooperative.

This Act has provided a machinery whereby consumers can file their complaints. These complaints
will then be heard by consumer forums with special powers so that action can be taken against
erring suppliers and possible relief or compensation is awarded to the consumer for the hardships
he/she has undergone.

CONCEPT AND APPLICATION

Following two instances showcase the relief awarded by consumer courts in India in regards to
disputes.

Example 1: Defected engine of Luxury car and faliur eto provide spares after discontinued model—
defect of goods and deficiency of service

In M/S. Honda Siel Cars India Ltd. vs Rohit Jain & Anr. on 31 March 2016 [REVISION PETITION NO.
446 OF 2013 (Against the Order dated 19/09/2012 in Appeal No. 57/2010 & 02/2010 of the
State Commission Delhi) (NCDRC)] Rohit Jan (Complainant) bought Honda Accord Car from
authorized dealer (Respondent) of Honda Siel Cars India Ltd (petitioner) on 1.12.02. After regular
maintenance through authorized workshops, suddenly car started to give out black smoke. Upon
investigation Dealer opined that the car’s engine is collapsed and need an overhauling, for which
Complainant need to pay Rs. 70-80000/-. Complainant contacted Petitioner stating that since such a
costly car engineer don’t need overhauling at around 67000 KM of mileage, there is a manufacturing
defect in the engine and hence same need to be replaced. Petitioner responded that the dealer will
do the needful while Dealer refused to repair. Complainant appealed in district forum, where District
forum ordered on 17-Mar-08 that respondent must replace the defected engine ordered dealer to
pay the compensation of 500,000 to complainant along with 1500 per day as an expenditure plus
5500/- as cost of complaint.

Despite the order, Complainant failed to receive any relief from respondent sighting the reasons that
Vehicle was out of warrantee and the car is discontinued in 2003 hence engine is not available for
replacement. District forum in its order dated 16-Nov-09 directed the Petitioner to refund
Rs.14,35,000/- being the cost of the car and to take back the defective vehicle. In addition, Rs.1 Lakh
as compensation and Rs. 20,000/- as cost of litigation was also awarded.

Being aggrieved, both Petitioner and complainant appealed before state commission in 2010. Where
state commission directed petitioner to pay Rs.10,76,000/- to the complainant along with interest @
9% p.a. from 17.12.07 to the date of the realization on Rs.10,76,000/- and compensation of Rs.1 Lac
Page 3|8
 NMIMS Global Access School for Continuing Education (NGA-SCE)
Course: Business Law
Internal Assignment Applicable for June 2019 Examination (Sem 2)
_____________________________________________________________________
to the complainant Rohit Jain along with Rs. 20,000/- as cost of the litigation. Since the spare parts
even in discontinued models, must be made available at least for a period of ten years from the date
of discontinuation, however in this case sufficient stocks of engine or its spare parts were not
available after 5 years. Thus, it is a clear deficiency in services. On the other hand, collapse of the
well-maintained engine with 5 years and 67000 KM of mileage is a clearance case of defect in good.

Example 2: Failure to provide basic safeguards in the swimming pool – deficiency in service

In the case of Sashikant Krishnaji Dole v. Shitshan Prasarak Mandali [F.A. No. 134 of 1993 decided
on 27.9.1995 (NCDRC)] the school owning a swimming pool offered swimming facilities to the public
on payment of a fee. The school conducted winter and summer training camps to train boys in
swimming and for this purpose engaged a coach. The complainants had enrolled their son for
swimming training under one of the program provided by school along with guidance of the coach. It
was alleged that due to coach’s negligence the boy was drowned and died. The school denied that it
had engaged the services of a coach and denied any responsibility on its part. The coach claimed
that he was competent in coaching young boys in swimming. He also taught the deceased boy the
way in which he should swim and take all precautions while swimming. When the deceased was
found to have been drowned the coach immediately tried to rescue him, recovered from water,
provided first aid and thereafter took him to a doctor, where he died.

The State Commission held the school and the coach deficient in rendering service to the deceased,
that the coach was not fully competent and did not exercise even the basic commonsense needed to
counter an accident in swimming. Trainer in his casual behavior did not attempt active action to save
the life of the deceased and the school did not even provide basic facilities, nor did it provide any
safeguards to prevent accidents. State commission held school and the coach responsible for the
deficiency in service and ordered compensation of 1.5 Lakhs to be paid by School.

School appealed in national commission. Dismissing the appeal, the National Commission observed
that the State Commission had given convincing reasons for holding the school and the coach
responsible for death of the deceased. A detailed examination of the depositions of eye witnesses
showed that the Commission had correctly appreciated the evidence and concluded that the coach
was negligent, and the school did not provide the necessary lifesaving mechanism to save the lives
of trainee students. So far as the compensation was concerned the State Commission had taken all
relevant factors into account and fixed the amount at Rs. 1.50 lakhs which was reasonable.

CONCLUSION

The Consumer Protection Act, 1986 is a benevolent social legislation that lays down the rights of the
consumers and provides therefore promotion and protection of the rights of the consumers. Over
the years The Act has enabled ordinary consumers to secure less expensive and often speedy
redressal of their grievances. In thousands of cases closed and still counting, act has strengthened
consumer’s right to receive quality product and services against the compensation paid. On the
other hand, the Act has set many examples of strict ruling against cases of unfair trade practices,
defect in goods or deficiency of services.

By spelling out the rights and remedies of the consumers in a market so far dominated by organized
manufacturers and traders of goods and providers of various types of services, the Act makes the
dictum, caveat emptor (‘Buyer Beware’) a thing of the past. Act facilitates that Consumer rights need
to be protected since services are availed based on trust and faith, and thus, it’s a necessity to keep
a check on the service providers for the sake of service recipient.
Page 4|8
 NMIMS Global Access School for Continuing Education (NGA-SCE)
Course: Business Law
Internal Assignment Applicable for June 2019 Examination (Sem 2)
_____________________________________________________________________

3. Karan and Arjun had entered into a contract where Karan was to supply 50,000 phones to Arjun
within 2 months from the date of signing of contract. Karan was to procure the phones from China
and deliver the same to Arjun. The rate of the phone was Rs. 5000/- a piece (inclusive of all taxes
and duties). At the time of the execution of the contract, the duty was at 5% (five percent).
Immediately after the execution of the Agreement, India had increased the duties to 1000% (one
thousand percent). Therefore, Karan was finding it difficult to sell the phones at the price agreed
earlier. In the circumstances, kindly advice:

a. How can Karan discharge such a contract?

INTRODUCTION

A contract is an agreement enforced by law. When parties enter into a contract, each has rights and
duties that are spelled or implied out of the agreement. When the sides perform their rights and
duties, the contract is then discharged by performance. Discharge of the contract can be done in
many ways such as performance or non-performance of the obligations. In present case Karan and is
facing difficulties in supplying the phones as per agreed terms in contract, hence Karan would not be
able to discharge the contract through performance unless terms of the contract are amended.

CONCEPT AND APPLICATION

From the given sequence of events, it is unlikely that Karan will be able to discharge this contract
either by actual performance or attempted performance.

In following ways discharge of contract can happen in this case:

1) Discharge by Mutual Agreement: In this case if parties mutually agree to replace the contract
with a new one or alter it, then it leads to a discharge of the original contract due to a mutual
agreement. In present case, Karan can intimate Arjun regarding impacts due to newly rolled out
duty slab by government on his supply of phone. Karan and Arjun may discuss all the available
options and mutually agree to amend or terminate the Contract.

2) Discharge by the Impossibility of Performance: Since in this case there was an unforeseen
change of law happened after execution of the agreement, there is an impossibility of
performance as phone cannot be delivered at same price accounting new duty structure rolled
out by Government. This impossibility of performance leads to a discharge of the contract. As
per English law Discharge by the impossibility of performance is termed as “Discharge by
Frustration”

3) Discharge of a Contract by Lapse of Time: In the above-mentioned case time limit for the
performance of the contract is given as 2 months, however no mention of any advance payment
by Arjun or any penalty on nonperformance by Karan is mentioned in the scenario. Assuming
that there is no advance payment paid by Arjun, and Karan is not liable for any penalty on
nonperformance, Karan can simply keep on looking of the alternatives to perform his
obligations. In case Karan cannot find any alternative within stipulated time, the Contract will be
discharged automatically by Lapse of time.
However, it will be ethical on part of Karan to inform Arjun in advance about his likeliness of
nonperformance by time.

Page 5|8
 NMIMS Global Access School for Continuing Education (NGA-SCE)
Course: Business Law
Internal Assignment Applicable for June 2019 Examination (Sem 2)
_____________________________________________________________________
4) Discharge by Breach of Contract: If a party to a contract fails to perform his obligation according
to the time and place specified, then he is said to have committed a breach of contract. The
situation explains under “discharged by the lapse of time” can also be considered as breach of
contract. In same situation if Karan inform Arjun before agreed time of performance, it will be
cased as Anticipatory Breach. While if Karan informs Arjun on or after time of performance, it
would be called as an Actual breach of contract.

CONCLUSION:

The contract here binds Karan and Arjun to one another and requires Karan to meet certain
obligations detailed in the contract. Normal course of discharge of the contract for Karan was to
supply of phone as agreed during execution of agreement, however due to unforeseen enforcement
of new duty rate by Government led Karan to seek alternate option of discharging of the contract.
Most suitable way for Karan is to discuss the scenario with Arjun and mutually agree to alter or remit
the agreement pertaining to new set of duties enforced by Government.

Page 6|8
 NMIMS Global Access School for Continuing Education (NGA-SCE)
Course: Business Law
Internal Assignment Applicable for June 2019 Examination (Sem 2)
_____________________________________________________________________
b. How can Arjun enforce such a contract?

INTRODUCTION

In case a Promise that involves in a consideration is an agreement and the agreement that is legally
enforceable by law is a Contract. To enforce a contact first step for Arjun is to ensure that the
agreement or contract between him and Karan is enforceable by law. Once enforceability is
determined, Arjun can proceed to various options to enforce the contract.

All types of business contracts have certain considerations for enforcement. Considerations may
include the subject matter of the contract, the statute of limitations and the statute of frauds. Small-
business owners routinely encounter many different types of contracts in the course of business.
You always have the option of drafting enforcement provisions into your agreements before
execution and discussing them with the other party

CONCEPT AND APPLICATION

As suggested above, first step for Arjun is to ascertain that all the essential elements of the contract
are present in the agreement such as:
1) There must be an Offer and an acceptance to that offer
2) All the parties must have Intension to create a legal contract at the time of execution of
agreement
3) There must be a Consent (acceptance)to the terms of Agreement
4) All the parties must be in legal Capacity to be in Contract
5) There must be a Consideration against the promises.
6) Contract must cover a legal transaction.

Since it is almost ascertained that the agreement between Karan and Arjun is enforceable, i.e the
agreement has all the 6 essential elements of the contract, Arjun can now consider ways to enforce
the contract with Karan.

Settlement through mediation or arbitration: To enforce the contract Arjun should start by
contacting Karan to see if Karan intends to perform / to fulfill part of the agreement. Before opting
for legal action for breach of the contract, Arjun should check the terms of the contract to see if
arbitration / mediation is required. If Karan wants to renegotiate the terms / price / other
obligations, Arjun can consider settling the terms and negotiate the way forward with Karan to see if
problem can be settled through mediation or arbitration.

Legal Action: If settlement negotiations are not fruitful, Arjun can file a lawsuit in a court that has
jurisdiction to hear his case. Common choices may include courts in the jurisdiction where the
contract was formed or courts in the jurisdiction where the contract was to be performed. Arjun’s
complaint must give background facts, a description of how the contract was breached and a
demand for relief. Arjun must also consider Karan’s defenses, He may claim the impossibility to
perform due to change in duty by government. By consider this defense, Arjun may want to highlight
all the damages suffered by Arjun due to breach of contract conducted by Karan. Damages may be of
five kinds:

1) Ordinary or general or Compensatory damages – arising naturally due to breach

2) Special damages – which were contemplated by both at the time of agreement
3) Exemplary or Punitive damages – as a punishment to karan for breach of contract
Page 7|8
 NMIMS Global Access School for Continuing Education (NGA-SCE)
Course: Business Law
Internal Assignment Applicable for June 2019 Examination (Sem 2)
_____________________________________________________________________
4) Nominal Damages – not substantial and awarded only for namesake
5) Liquidated damages – genuine and fair pre-estimate of the probable loss likely to result from
breach.
While filing the law suit, Arjun should also consider Karan’s view point and think how he would like
to be treated if he would be in Karan’s shoes.

CONCLUSION:

Once the Agreement is ascertained to be enforceable, Arjun can either opt for mediation or
arbitration or rather opt for legal action against the breach of the contract. At the end it is
worthwhile for Arjun to think on behalf of Karan and consider himself in Karan’s shoes.
While noticing the viewpoint from Karan’s point of view, Arjun may decide whether to opt
for harsher enforcement of the contract or finding the workable mutually agreed terms and
conditions for the contract.

Page 8|8