Professional Documents
Culture Documents
MB0035 Set 1 2
MB0035 Set 1 2
MB0035 Set 1 2
Q.1 What do you mean by free consent? Under what circumstances consent is considered as free?
Explain.
One of the essential of a valid contract is free consent. Sec. 13 of the act defense consent has two or more
persons are said to consent where they agree upon think in the same sense. There should be consents at
the ad idem or identity of minds.
The validity of consent depends not only on consents parties but their consents must also be free.
According to section 14, consent is said to be free when it is not caused by
1) Coercion has defined under sec.15 or
2) Undue influence as defined under sec. 16 or
3) Fraud has defined under sec. 17 or
4) Mis-representation or defined under sec. 18 or
5) Mistake subject to the probations of sec. 21& 22.
1) Coercion:
Sec. 15 “coercion is the committing or threatening to commit any act forbidden by the Indian penal code
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. “ It is immaterial weather the Indian
penal code is or is not in force in the place where the coercion is employed.
Under English Law, coercion must be applied to one’s person only whereas under Indian Law it can be
one’s person or property.
So also under English Law, the subject of it must be the contracting party himself or his wife, parent, child
or other near relative. Under Indian Law, the act or threat may be against any person. It is to be noted
that he act need not be committed in India itself. Unlawful detaining or threatening to detain any
property it also coercion.
While threat to sue does not amount to coercion threat to file a false suit amounts to coercion since
Indian Penal Code forbids such an act.
2) Undue influence:
In the words of Holland,” Undue influence refers to “the unconscious use of power over another person,
such power being obtained by virtue of a present or previously existing dominating control arising out of
relationship between the parties.”
According sec. 16(1) “ A contract is said to be induced by undue influence where the relation subsisting
between the parties are such that one of the parties is in a position to dominate the will of the other and
uses that position to obtain an unfair advantage over the other.”
Both coercion and undue influence are closely related. What contributes coercion or undue influence
depends upon the facts of each case.
Sec. 16(i) provides that two elements must be present. The first one is that the relations subsisting
between the parties to a contract are such that one of them is in a position to dominate the will of the
other.
Secondly, he uses that position to obtain unfair advantage over the other. In other words, unlike coercion
undue influence must come from a party to the contract and not a stranger to it. Where the parties are
not in equal footing or there is trust and confidence between the parties, one party may be able to
dominate the will of the other and use the position to obtain an unfair advantage. However, where there
is no relationship shown to exit from which undue influence is presumed, that influence must be proved.
3) Fraud:
A false statement made knowingly or without belief in its truth or recklessly careless whether it be true or
false is called fraud.
Sec. 17 of the act instead of defining fraud gives various acts which amount to fraud.
Sec. 17: Fraud means and includes any of the following acts committed by a party to a contract or with his
connivance or by his agent to induce him to enter into contract:
1) The suggestion that a fact is true when it is not true by one who does not believe it to be true. A
false statement intentionally made is fraud. An absence of honest belief in the truth of the
statement made is essential to constitute fraud. The false statement must be made intentionally.
2) The active concealment of a fact by a person who has knowledge or belief of the fact. Mere non-
disclosure is not fraud where there is no duty to disclose.
3) A promise made without any intention of performing it.
4) Any other act fitted to deceive. The fertility of man’s invention in devising new schemes of fraud
is so great that it would be difficult to confine fraud within the limits of any exhaustive definition.
5) Any such act or omission as the law specially declares to be fraudulent.
4) Misrepresentation:
Before entering into a contract, the parties will may certain statements inducing the contract. Such
statements are called representation. A representation is a statement of fact made by one party to the
other at the time of entering into contract with an intention of inducing the other party to enter into the
contract. If the representation is false or misleading, it is known as misrepresentation. A
misrepresentation may be innocent or intentional. An intentional misrepresentation is called fraud and is
covered under section 17 sec. 18 deals with an innocent misrepresentation.
5) Mistake:
Usually, mistake refers to misunderstanding or wrong thinking or wrong belief. But legally, its meaning is
restricted and is to mean “operative mistake”. Courts recognize only such mistakes, which invalidate the
contract. Mistake may be mistake of fact or mistake of law.
Sec. 20”Where both parties to an agreement are under a mistake as to a matter of fact essential to the
agreement, the agreement is void”.
Sec.21” A contract is not voidable because it was caused by a mistake as to any law in force in India: but a
mistake as to a law not in force in India has the same effect as a mistake of fact”.
Bilateral mistake: Sec.20 deals with bilateral mistake. Bilateral mistake is one where there is no real
correspondence of offer and acceptance. The parties are not really in consensus-ad-item. Therefore there
is no agreement at all.
A bilateral mistake may be regarding the subject matter or the possibility of performing the contract.
Q.2 Define negotiable instrument. What are its features and characteristics? Which are the different
types of negotiable instruments? If Mr. A is the holder of a negotiable instrument, under what
situations
i. Will he be the Holder in due course?
ii. He has the right to discharge?
iii. He can make endorsements?
i. Promissory Note
Suppose you take a loan of Rupees Five Thousand from your friend Ramesh. You can make a document
stating that you will pay the money to Ramesh or the bearer on demand. Or you can mention in the
document that you would like to pay the amount after three months. This document, once signed by you,
duly stamped and handed over to Ramesh, becomes a negotiable instrument.
Now Ramesh can personally present it before you for payment or give this document to some other
person to collect money on his behalf. He can endorse it in somebody else’s name who in turn can
endorse it further till the final payment is made by you to whosoever presents it before you. This type of a
document is called a Promissory Note.
Section 4 of the Negotiable Instruments Act, 1881 defines a promissory note as ‘an instrument in writing
(not being a bank note or a currency note) containing an unconditional undertaking, signed by the maker,
to pay a certain sum of money only to or to the order of a certain person or to the bearer of the
instrument’.
Specimen of a Promissory Note
Rs. 10,000/- New Delhi
September 25, 2002
On demand, I promise to pay Ramesh, s/o RamLal of Meerut or order a sum of
Rs 10,000/- (Rupees Ten Thousand only), for value received.
To, Ramesh Sd/ Sanjeev
Address… Stamp
Five months after date pay Tarn or (to his) order the sum of Rupees Ten Thousand
only for value received.
To Accepted Stamp
Sameer Sameer S/d
Address Rajeev
iii. Cheques
Cheque is a very common form of negotiable instrument. If you have a savings bank account or current
account in a bank, you can issue a cheque in your own name or in favour of others, thereby directing the
bank to pay the specified amount to the person named in the cheque.
Therefore, a cheque may be regarded as a bill of exchange; the only difference is that the bank is always
the drawee in case of a cheque.
The Negotiable Instruments Act, 1881 defines a cheque as a bill of exchange drawn on a specified banker
and not expressed to be payable otherwise than on demand. Actually, a cheque is an order by the account
holder of the bank directing his banker to pay on demand, the specified amount, to or to the order of the
person named therein or to the bearer.
iv. Hundis
A Hundi is a negotiable instrument by usage. It is often in the form of a bill of exchange drawn in any local
language in accordance with the custom of the place. Some times it can also be in the form of a
promissory note. A Hundi is the oldest known instrument used for the purpose of transfer of money
without its actual physical movement. The provisions of the Negotiable
Instruments Act shall apply to hundis only when there is no customary rule known to the people.
Types of Hundis
There are a variety of hundis used in our country. Let us discuss some of the most common ones.
Shah-jog Hundi: one merchant draws this on another, asking the latter to pay the amount to a Shah. Shah
is a respectable and responsible person, a man of worth and known in the bazaar. A shah-jog Hundi
passes from one hand to another till it reaches a Shah, who, after reasonable enquiries, presents it to the
drawee for acceptance of the payment.
Darshani Hundi: This is a Hundi payable at sight. The holder must present it for payment within a
reasonable time after its receipt. Thus, it is similar to a demand bill.
Muddati Hundi: A Muddati or miadi Hundi is payable after a specified period of time. This is similar to a
time bill.
There are few other varieties like Nam-jog Hundi, Dhani-jog Hundi, and Jawabee Hundi, Jokhami Hundi,
Fireman-jog Hundi, etc.
Persons other than the original obligor and obligee can become parties to a negotiable instrument. The
most common manner in which this is done is by placing one's signature on the instrument
(“indorsement”): if the person who signs does so with the intention of obtaining payment of the
instrument or acquiring or transferring rights to the instrument, the signature is called an indorsement.
There are four types of indorsements contemplated by the Code:
1. in good faith;
2. for value;
3. without notice of any defenses to payment,
the transferee is a holder in due course and can enforce the instrument without being subject to defenses
which the maker of the instrument would be able to assert against the original payee, except for certain
real defenses. These real defenses include (1) forgery of the instrument; (2) fraud as to the nature of the
instrument being signed; (3) alteration of the instrument; (4) incapacity of the signer to contract; (5)
infancy of the signer; (6) duress; (7) discharge in bankruptcy; and, (8) the running of a statute of
limitations as to the validity of the instrument.
The holder-in-due-course rule is a rebuttable presumption that makes the free transfer of negotiable
instruments feasible in the modern economy. A person or entity purchasing an instrument in the ordinary
course of business can reasonably expect that it will be paid when presented to, and not subject to
dishonor by, the maker, without involving itself in a dispute between the maker and the person to whom
the instrument was first issued (this can be contrasted to the lesser rights and obligations accruing to
mere holders). Article 3 of the Uniform Commercial Code as enacted in a particular State's law
contemplate real defenses available to purported holders in due course.
The foregoing is the theory and application presuming compliance with the relevant law. Practically, the
obligor-payor on an instrument who feels he has been defrauded or otherwise unfairly dealt with by the
payee may nonetheless refuse to pay even a holder in due course, requiring the latter to resort to
litigation to recover on the instrument.
Ans.:
Indemnity Guarantee
Comprise only two parties- the There are three parties namely the
indemnifier and the indemnity surety, principal debtor and the
holder. creditor
Where several persons are bound together in any bond, bill or other writing as joint debtors or as joint
sureties, in any sum of money made payable to any person, his/her executors, administrators, order or
assign and such bond, bill, or other writing shall be paid by any of such joint debtors or joint sureties, the
creditor shall assign such bond, bill, or other writing, to the person paying the same; and such assignee
shall, in his/her own name, as assignee, or otherwise, have such action or remedy as the creditor
himself/herself might have had against the other joint debtors, or sureties, or their representatives, to
recover such proportion of the money, so paid, as may be justly due from the defendants.
Where several persons are bound together in any bond, bill or other writing or judgment as joint
debtors or as joint sureties, in any sum of money, made payable to any person or corporation, the
executors, administrators, successors, order or assigns, and 1 or more of such persons was, at the time of
making, signing or executing the same, or at the time of the rendition of such judgment, an infant, such
fact shall be no defense in any action, proceeding or suit for the enforcement of the liability of those
bound there under, excepting as regards the person who was an infant at the time of making, signing or
executing such bond, bill or other writing, or who was an infant at the time such judgment was rendered.
(a) If a judgment recovered against principal and surety shall be paid by the surety, the creditor shall
mark such judgment to the use of the surety so paying the same; and the transferee shall, in the name of
the plaintiff, have the same remedy by execution or other process against the principal debtor as the
creditor could have had, the transfer by marking to the use of the surety being first filed of record in the
court where the judgment is.
(b) Where there is a judgment against several debtors or sureties and any of them shall pay the whole,
the creditor shall mark such judgment to the use of the persons so paying the same; and the transferee
shall, in the name of the plaintiff, be entitled to an execution or other process against the other debtors or
sureties in the judgment, for a proportion able part of the debt or damages paid by such transferee; but,
no defendant shall be debarred of any remedy against the plaintiff or the plaintiff's representatives or
assigns by any legal or equitable course of proceeding whatever.
Q.4.a. Mention the remedies for breach of contract. How will the injured party claim it?
Actual breach:
A breach of contract occurs where a party to a contract fails to perform, precisely and exactly, his
obligations under the contract. This can take various forms for example, the failure to supply goods or
perform a service as agreed. Breach of contract may be either actual or anticipatory.
Actual breach occurs where one party refuses to form his side of the bargain on the due date or performs
incompletely. For example: Poussard v Spiers and Bettini v Gye.
The doctrine of privity in contract law provides that a contract cannot confer rights or impose obligations
arising under it on any person or agent except the parties to it.
The premise is that only parties to contracts should be able to sue to enforce their rights or claim
damages as such. However, the doctrine has proven problematic due to its implications upon contracts
made for the benefit of third parties who are unable to enforce the obligations of the contracting parties.
Third-party rights:
Privity of contract occurs only between the parties to the contract, most commonly contract of sale of
goods or services. Horizontal privity arises when the benefits from a contract are to be given to a third
party. Vertical privity involves a contract between two parties, with an independent contract between one
of the parties and another individual or company.
If a third party gets a benefit under a contract, it does not have the right to go against the parties to the
contract beyond its entitlement to a benefit. An example of this occurs when a manufacturer sells a
product to a distributor and the distributor sells the product to a retailer. The retailer then sells the
product to a consumer. There is no privity of contract between the manufacturer and the consumer.
This, however, does not mean that the parties do not have another form of action e.g. Donoghue v.
Stevenson – here a friend of Ms. Donoghue bought her a bottle of ginger beer, which was defective.
Specifically, the ginger beer contained the partially decomposed remains of a snail. Since the contract was
between her friend and the shop owner, Mrs. Donoghue could not sue under the contract, but it was
established that the manufacturer has a duty of care owed to their consumers and she was awarded
damages in tort.
Privity is the legal term for a close, mutual, or successive relationship to the same right of property or the
power to enforce a promise or warranty.
b. Define a company? What are the features of Joint Stock Company?
Ans.: Company:
The term ‘company’ implies an association of a number of persons for some common objective e.g. to
carry on a business concern, to promote art, science or culture in the society, to run a sport club etc. Every
association, however, may not be a company in the eyes of law as the legal import of the word ‘company’
is different from its common parlance meaning. In legal terminology its use is restricted to imply an
association of persons,’ registered as a company' under the law of the land. The following are some of the
definitions of the company given by legal luminaries and scholars of law.
“Company means a company formed and registered under this Act or an existing company. Existing
company means a company formed and registered under the previous company laws.” Companies Act,
1956 Sec. 3(i & ii)
A joint stock company is an artificial person invisible, intangible and existing only in the eyes of law. Being
a mere creature of law, it possesses only those properties which the charter of its creation confers upon
it, either expressly or as incidental to its very existence.” – Justice Marshall
“A company is an association of many persons who contribute money or money’s worth to a common
stock and employ it in some common trade or business and who share the profit or loss arising there
from. The common stock so contributed is denoted in terms of money and is the capital of the company.
The persons who contribute it or to whom it belongs are members. The proportion of capital to which
each member is entitled is his share. Shares are always transferable although the right to transfer them is
often more or less restricted." - Lord Lindley
From the above definitions it is clear that a company has a corporate and legal personality. It is an
artificial person and exists only in the eyes of law. It has an independent legal entity, a common seal and
perpetual succession.
Sometimes, the term ‘corporation’ (a word derived from the Latin word ‘corpus’ which means
body) is also used for a company.
At present the companies in India are incorporated under the Companies Act, 1956.
1. Artificial Person: A company is an association of persons who have agreed to form the company and
become its members or shareholders with the object of carrying on a lawful business for profit. It comes
into existence when it is registered under the Companies Act. The law treats it as a legal person as it can
conduct lawful business and enter into contracts with other persons in its own name. It can sell or
purchase property. It can sue and be sued in its name. It cannot be regarded as an imaginary person
because it has a legal existence. Thus company is an artificial person created by law.
3. Perpetual existence: The attribute of separate entity also provides a company a perpetual existence,
until dissolved by law. Its life remains unaffected by the lunacy, insolvency or death of its members. The
members may come and go but the company can go on forever. Law creates it and the law alone can
dissolve it.
4. Separate property: A company, being a legal entity, can buy and own property in its own name. And,
being a separate entity, such property belongs to it alone. Its members are not the joint owners of the
property even though it is purchased out of funds contributed by them. Consequently, they do not have
even insurable interest in the property of the company. The property of the company is not the property
of the shareholders; it is the property of the company.
5. Limited liability: In the case of companies limited by shares the liability of every member of the
company is limited to the amount of shares subscribed by him. If the member has paid full amount of the
face value of the shares subscribed by him, his liability shall be nil and he cannot be asked to contribute
anything more. Similarly, in the case of a company limited by guarantee, the liability of the members is
limited up to the amount guaranteed by a member. The Companies Act, however, permits the formation
of companies with unlimited liability. But such companies are very rare.
6. Common seal: As a company is devoid of physique, it can’t act in person like a human being. Hence it
cannot sign any documents personally. It has to act through a human agency known as Directors.
Therefore, every company must have a seal with its name engraved on it. The seal of the company is
affixed on the documents, which require the approval of the company. Two Directors and the Secretary or
such other person as the Board may authorize for this purpose, witness the affixation of the seal. Thus,
the common seal is the official signature of the company.
7. Transferability of shares: The shares of a company are freely transferable and can be sold or purchased
through the Stock Exchange. A shareholder can transfer his shares to any person without the consent of
other members. Under the articles of association, even a public limited company can put certain
restrictions on the transfer of shares but it cannot altogether stop it. A shareholder of a public limited
company possessing fully paid up shares is at liberty to transfer his shares to anyone he likes in
accordance with the manner provided for in the articles of association of the company. However, private
limited company is required to put certain restrictions on transferability of its shares. But any absolute
restriction on the right of transfer of shares is void
8. Capacity to sue and be sued: A company, being a body corporate, can sue and be sued in its own name.
Q. 6. Om is enrolled in a managerial course. He has to write an assignment on company management
and various types of meetings that a company holds. You are asked to help him in preparing the
assignment.
Ans.: There are many types of businesses, and because of this, businesses are classified in many ways.
One of the most common focuses on the primary profit-generating activities of a business:
Agriculture and mining businesses are concerned with the production of raw material, such as
plants or minerals.
Financial businesses include banks and other companies that generate profit through investment
and management of capital.
Information businesses generate profits primarily from the resale of intellectual property and
include movie studios, publishers and packaged software companies.
Manufacturers produce products, from raw materials or component parts, which they then sell
at a profit. Companies that make physical goods, such as cars or pipes, are considered
manufacturers.
Real estate businesses generate profit from the selling, renting, and development of properties,
homes, and buildings.
Retailers and Distributors act as middle-men in getting goods produced by manufacturers to the
intended consumer, generating a profit as a result of providing sales or distribution services.
Most consumer-oriented stores and catalogue companies are distributors or retailers. See also:
Franchising
Service businesses offer intangible goods or services and typically generate a profit by charging
for labor or other services provided to government, other businesses, or consumers.
Organizations ranging from house decorators to consulting firms, restaurants, and even
entertainers are types of service businesses.
Transportation businesses deliver goods and individuals from location to location, generating a
profit on the transportation costs
Utilities produce public services, such as heat, electricity, or sewage treatment, and are usually
government chartered.
There are many other divisions and subdivisions of businesses. The authoritative list of business types for
North America is generally considered to be the North American Industry Classification System, or NAICS.
The equivalent European Union list is the Statistical Classification of Economic Activities in the European
Community (NACE).
Management
The efficient and effective operation of a business, and study of this subject, is called management. The
main branches of management are financial management, marketing management, human resource
management, strategic management, production management, operation management, service
management and information technology management.
In recent decades, assets and enterprises that were run by various states have been modeled after
business enterprises. In 2003, the People's Republic of China reformed 80% of its state-owned enterprises
and modeled them on a company-type management system. [2] Many state institutions and enterprises in
China and Russia have been transformed into joint-stock companies, with part of their shares being listed
on public stock markets.
Organization and government regulation
Most legal jurisdictions specify the forms of ownership that a business can take, creating a body of
commercial law for each type.
The size, scope of the business firm and its structure, management, and ownership, broadly
analyzed in the theory of the firm. Generally a smaller business is more flexible, while larger
businesses, or those with wider ownership or more formal structures, will usually tend to be
organized as partnerships or (more commonly) corporations. In addition a business that wishes
to raise money on a stock market or to be owned by a wide range of people will often be
required to adopt a specific legal form to do so.
The sector and country. Private profit making businesses are different from government owned
bodies. In some countries, certain businesses are legally obliged to be organized in certain ways.
Limited liability. Corporations, limited liability partnerships, and other specific types of business
organizations protect their owners or shareholders from business failure by doing business under
a separate legal entity with certain legal protections. In contrast, unincorporated businesses or
persons working on their own are usually not so protected.
Tax advantages. Different structures are treated differently in tax law, and may have advantages
for this reason.
Disclosure and compliance requirements. Different business structures may be required to make
more or less information public (or reported to relevant authorities), and may be bound to
comply with different rules and regulations.
Many businesses are operated through a separate entity such as a corporation or a partnership (either
formed with or without limited liability). Most legal jurisdictions allow people to organize such an entity
by filing certain charter documents with the relevant Secretary of State or equivalent and complying with
certain other ongoing obligations. The relationships and legal rights of shareholders, limited partners, or
members are governed partly by the charter documents and partly by the law of the jurisdiction where
the entity is organized. Generally speaking, shareholders in a corporation, limited partners in a limited
partnership, and members in a limited liability company are shielded from personal liability for the debts
and obligations of the entity, which is legally treated as a separate "person." This means that unless there
is misconduct, the owner's own possessions are strongly protected in law, if the business does not
succeed.
Where two or more individuals own a business together but have failed to organize a more specialized
form of vehicle, they will be treated as a general partnership. The terms of a partnership are partly
governed by a partnership agreement if one is created, and partly by the law of the jurisdiction where the
partnership is located. No paperwork or filing is necessary to create a partnership, and without an
agreement, the relationships and legal rights of the partners will be entirely governed by the law of the
jurisdiction where the partnership is located.
A single person who owns and runs a business is commonly known as a sole proprietor, whether he or she
owns it directly or through a formally organized entity.
1. Status Meetings, generally leader-led, which are about reporting by one-way communication
2. Work Meeting, which produces a product or intangible result such as a decision
3. Staff meeting, typically a meeting between a manager and those that report to the manager
4. Team meeting, a meeting among colleagues working on various aspects of a team project
5. Ad-hoc meeting, a meeting called for a special purpose
6. Management meeting, a meeting among managers
7. Board meeting, a meeting of the Board of directors of an organization
8. One-on-one meeting, between two individuals
9. Off-site meeting, also called "offsite retreat" and known as an Awayday meeting in the UK
10. Kickoff meeting, the first meeting with the project team and the client of the project to discuss
the role of each team member
11. Pre-Bid Meeting, a meeting of various competitors and or contractors to visually inspect a jobsite
for a future project. The meeting is normally hosted by the future customer or engineer who
wrote the project specification to ensure all bidders are aware of the details and services
expected of them. Attendance at the Pre-Bid Meeting may be mandatory. Failure to attend
usually results in a rejected bid.
MBA – III SEM
Legal Aspects of Business - MB0035
Set – 2
1. It must be in writing [Section 7(3)]: Like the old law, the new law also requires the arbitration
agreement to be in writing. It also provides in section 7(4) that an exchange of letters, telex, telegrams, or
other means of telecommunications can also provide a record of such an agreement. Further, it is also
provided that an exchange of claim and defense in which the existence of an arbitration agreement is
alleged by one party and not denied by the other, will also amount to be an arbitration agreement.
It is not necessary that the parties should sign such written agreement. All that is necessary is that the
parties should accept the terms of an agreement reduced in writing. The naming of the arbitrator in the
arbitration agreement is not necessary. No particular form or formal document is necessary.
2. It must have all the essential elements of a valid contract: An agreement stands on the same footing
as any other agreement. Every person capable of entering into a contract may be a party to an arbitration
agreement. The terms of the agreement must be definite and certain; if the terms are vague it is bad for
indefiniteness.
3. The agreement must be to refer a dispute, present or future, between the parties to arbitration: If
there is no dispute, there can be no right to demand arbitration. A dispute means an assertion of a right
by one party and repudiation thereof by another. A point as to which there is no dispute cannot be
referred to arbitration. The dispute may relate to an act of commission or omission, for example, with
holding a certificate to which a person is entitled or refusal to register a transfer of shares.
Under the present law, certain disputes such as matrimonial disputes, criminal prosecution,
questions relating to guardianship, questions about validity of a will etc. or treated as not suitable for
arbitration. Section 2(3) of the new Act maintains this position. Subject to this qualification Section 7(1) of
the new Act makes it permissible to enter into an arbitration agreement “in respect of a defined legal
relationship whether contractual or not”.
4. An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a
separate agreement [Section 7(2)].
Appointment of Arbitrator: The parties can agree on a procedure for appointing the arbitrator or
arbitrators. If they are unable to agree, each party will appoint one arbitrator and the two appointed
arbitrators will appoint the third arbitrator who will act as a presiding arbitrator [Section 11(3)]. If one of
the parties does not appoint an arbitrator within 30 days, or if two appointed arbitrators do not appoint
third arbitrator within 30 days, the party can request Chief Justice to appoint an arbitrator [Section 11(4)].
The Chief Justice can authorize any person or institution to appoint an arbitrator. [Some High Courts have
authorized District Judge to appoint an arbitrator]. In case of international commercial dispute, the
application for appointment of arbitrator has to be made to Chief Justice of India. In case of other
domestic disputes, application has to be made to Chief Justice of High Court within whose jurisdiction the
parties are situated [Section 11(12)]
Conduct of Arbitral Proceedings: The Arbitral Tribunal should treat the parties equally and each party
should be given full opportunity to present his case [Section 18]. The Arbitral Tribunal is not bound by
Code of Civil Procedure, 1908 or Indian Evidence Act, 1872 [Section 19(1)]. The parties to arbitration are
free to agree on the procedure to be followed by the Arbitral Tribunal. If the parties do not agree to the
procedure, the procedure will be as determined by the arbitral tribunal.
Law of Limitation Applicable: Limitation Act, 1963 is applicable. For this purpose, date on which the
aggrieved party requests other party to refer the matter to arbitration shall be considered. If on that date,
the claim is barred under Limitation Act, the arbitration cannot continue [Section 43(2)]. If Court sets
Arbitration award aside, time spent in arbitration will be excluded for purpose of Limitation Act. So that
case in court or fresh arbitration can start.
Flexibility in respect of procedure, place and language: Arbitral Tribunal has full powers to decide the
procedure to be followed, unless parties agree on the procedure to be followed [Section 19(3)]. The
Tribunal also has powers to determine the admissibility, relevance, materiality and weight of any evidence
[Section 19(4)]. Place of arbitration will be decided by mutual agreement. However, if the parties do not
agree to the place, the same will be decided by tribunal [Section 20]. Similarly, language to be used in
arbitral proceedings can be mutually agreed. Otherwise, Arbitral Tribunal can decide [Section 22].
Submission of statement of claim and defense: The claimant should submit statement of claims, points of
issue and relief or remedy sought. The respondent shall state his defense in respect of these particulars.
All relevant documents must be submitted. Such claim or defense can be amended or supplemented any
time [section 23].
Hearings and Written Proceedings: After submission of documents and defense, unless the parties agree
otherwise, the Arbitral Tribunal can decide whether there will be oral hearing or proceedings can be
conducted on the basis of documents and other materials. However, if one of the parties requests the
hearing shall be oral. Sufficient advance notice of hearing should be given to both the parties [Section 24].
[Thus, unless one party requests, oral hearing is not compulsory].
Settlement during Arbitration: It is permissible for parties to arrive at mutual settlement even when
arbitration is proceeding. In fact, even the Tribunal can make efforts to encourage mutual settlement. If
parties settle the dispute by mutual agreement, the arbitration shall be terminated. However, if both
parties and the Arbitral Tribunal agree, the settlement can be recorded in the form of an arbitral award on
agreed terms. Such Arbitral Award shall have the same force as any other Arbitral Award [Section 30].
Arbitral Award: Decision of Arbitral Tribunal is termed as 'Arbitral Award'. Arbitrator can decide the
dispute ex aqua ET bono (In justice and in good faith) if both the parties expressly authorize him to do so
[Section 28(2)]. The decision of Arbitral Tribunal will be by majority. The arbitral award shall be in writing
and signed by the members of the tribunal [Section 29]. The award must be in writing and signed by the
members of Arbitral Tribunal [Section 31(1)]. It must state the reasons for the award unless the parties
have agreed that no reason for the award is to be given [Section 31(3)]. The award should be dated and
place where it is made should be mentioned. Copy of award should be given to each party. Tribunal can
make interim award also [Section 31(6)].
Cost of Arbitration- Cost of arbitration means reasonable cost relating to fees and expenses of arbitrators
and witnesses, legal fees and expenses, administration fees of the institution supervising the arbitration
and other expenses in connection with arbitral proceedings. The tribunal can decide the cost and share of
each party [Section 3 1(8)]. If the parties refuse to pay the costs, the Arbitral Tribunal may refuse to
deliver its award. In such case, any party can approach Court. The Court will ask for deposit from the
parties and on such deposit, the Tribunal will deliver the award. Then Court will decide the costs of
arbitration and shall pay the same to Arbitrators. Balance, if any, will be refunded to the party [Section
39].
Intervention by Court - One of the major defects of earlier arbitration law was that the party could access
court almost at every stage of arbitration - right from appointment of arbitrator to implementation of
final award. Thus, the defending party could approach court at various stages and stall the proceedings.
Now, approach to court has been drastically curtailed. In some cases, if the party raises an objection,
Arbitral Tribunal itself can give the decision on that objection. After the decision, the arbitration
proceedings are continued and the aggrieved party can approach Court only after Arbitral Award is made.
Appeal to court is now only on restricted grounds. Of course, Tribunal cannot be given unlimited and
uncontrolled powers and supervision of Courts cannot be totally eliminated.
Arbitration Act has Over-Riding Effect: Section 5 of Act clarifies that notwithstanding anything contained
in any other law for the time being in force, in matters governed by the Act, the judicial authority can
intervene only as provided in this Act and not under any other Act.
Modes of Arbitration
(a) Arbitration without the intervention of the court. [Sec.3 to 19]
(b) Arbitration with the intervention of the court when there is no suit pending [Sec.20]
(c) Arbitration with the intervention of the court where a suit is pending. [Sec.21 to 25]
Ans.: Meditation is a holistic discipline during which time the practitioner trains his or her mind in order
to realize some benefit.
Meditation is generally an internal, personal practice and most often done without any external
involvement, except perhaps prayer beads to count prayers. Meditation often involves invoking or
cultivating a feeling or internal state, such as compassion, or attending to a specific focal point. The term
can refer to the state itself, as well as to practices or techniques employed to cultivate the state.
There are hundreds of specific types of meditation. The word, 'meditation,' means many things
dependent upon the context of its use. People practice meditation for many reasons, within the context
of their social environment. Meditation is a component of many religions, and has been practiced since
antiquity, particularly by monastics. A 2007 study by the U.S. government found that nearly 9.4% of U.S.
adults (over 20 million) have used meditation within the past 12 months, up from 7.6% (more than 15
million people) in 2002.
To date, the exact mechanism at work in meditation remains unclear, while scientific research continues.
Ans.: Consumer right is defined as 'the right to be informed about the quality, quantity, potency, purity,
standard and price of goods or services, as the case may be, so as to protect the consumer against unfair
trade practices'
Even though strong and clear laws exist in India to protect consumer rights, the actual plight of Indian
consumers could be declared as completely dismal. Very few consumers are aware of their rights or
understand their basic consumer rights. Of the several laws that have been enacted to protect the rights
of consumers in India, the most significant is the Consumer Protection Act, 1986. Under this law,
everyone, including individuals, a Hindu undivided family, a firm, and a company, can exercise their
consumer rights for the goods and services purchased by them. It is important that, as consumers, we
know at least our basic rights and about the courts and procedures that deal with the infringement of our
rights.
* The right to be protected from all types of hazardous goods and services
* The right to be fully informed about the performance and quality of all goods and services
* The right to free choice of goods and services
* The right to be heard in all decision-making processes related to consumer interests
* The right to seek redressal, whenever consumer rights have been infringed
* The right to complete consumer education
The Consumer Protection Act, 1986 and various other laws like the Standards, Weights & Measures Act
have been formulated to ensure fair competition in the market place and free flow of true information
from the providers of goods and services to those who consume them. However, the success of these
laws would depend upon the vigilance of consumers about their rights, as well as their responsibilities. In
fact, the level of consumer protection in a country is considered as the correct indicator of the extent of
progress of the nation.
The production and distribution systems have become larger and more complicated today. The high level
of sophistication achieved by the providers of goods and services in their selling and marketing practices
and various types of promotional activities like advertising resulted in an increased need for higher
consumer awareness and protection. In India, the government has realized the plight of Indian
consumers and the Ministry of Consumer Affairs, Food and Public Distribution has established the
Department of Consumer Affairs as the nodal organization for the protection of consumer rights,
redressal of all consumer grievances and promotion of standards governing goods and services offered in
India.
A complaint for infringement of consumer rights could be made under the following circumstances in the
nearest designated consumer court:
* The goods or services bought by a person or agreed to be bought by a person suffer from one or more
deficiencies or defects in any respect
* A trader or a service provider resorting to restrictive or unfair trade practices
* A trader or a service provider charging a price in excess of the price displayed on the goods or the price
that had been agreed upon between the parties or the price that had been stipulated under any law in
force
* Goods or services that pose a hazard to the safety and life of a person offered for sale, knowingly or
unknowingly, causing injury to health, safety or life.
Consumerdaddy.com is India's only online consumer protection site offering consumer report, consumer
review and different opinions on different products and companies.
The memorandum of association of a company, often simply called the memorandum (and then often
capitalised as an abbreviation for the official name, which is a proper noun and usually includes other
words), is the document that governs the relationship between the company and the outside. It is one of
the documents required to incorporate a company in the United Kingdom, Ireland and India, and is also
used in many of the common law jurisdictions of the Commonwealth.
Requirements
While it is still necessary to file a memorandum of association to incorporate a new company, it no longer
forms part of the company’s constitution and it contains limited information compared to the
memorandum that was required prior to 1 October 2009.
It is basically a statement that the subscribers wish to form a company under the 2006 Act, have agreed to
become members and, in the case of a company that is to have a share capital, to take at least one share
each. It is no longer required to state the name of the company, the type of company (such as public
limited company or private company limited by shares), the location of its registered office, the objects of
the company, and its authorised share capital.[1]
Companies incorporated prior to 1 October 2009 are not required to amend their memorandum. Those
details which are now required to appear in the Articles, such as the objects clause and details of the
share capital, are deemed to form part of the Articles.
Capacities
The memorandum no longer restricts what a company is permitted to do. Since 1 October 2009, if a
company's constitution contains any restrictions on the objects at all, those restrictions will form part of
the articles of association.
Historically, a company's memorandum of association contained an objects clause, which limited its
capacity to act. When the first limited companies were incorporated, the objects clause had to be widely
drafted so as not to restrict the board of directors in their day to day trading. In the Companies Act 1989
the term "General Commercial Company" was introduced which meant that companies could undertake
"any lawful or legal trade or business."
The Companies Act 2006 relaxed the rules even further, removing the need for an objects clause at all.
Companies incorporated on and after 1 October 2009 without an objects clause are deemed to have
unrestricted objects. Existing companies may take advantage of this change by passing a special resolution
to remove their objects clause.
If the company is to be a non-profit making company, the articles will contain a statement saying that the
profits shall not be distributed to the members.
Articles of association:
The following is largely based on British Company Law, references which are made at the end of this
Article.
The Articles can cover a medley of topics, not all of which is required in a country's law. Although all terms
are not discussed, they may cover:
the issuing of shares (also called stock), different voting rights attached to different
classes of shares
valuation of intellectual rights, say,the valuations of the IPR of one partner and,for
example,the real estate of the other
the appointments of directors - which shows whether a shareholder dominates or
shares equality with all contributors
directors meetings - the quorum and percentage of vote
management decisions - whether the board manages or a founder
transferability of shares - assignment rights of the founders or other members of the
company do
special voting rights of a Chairman,and his/her mode of election
the dividend policy - a percentage of profits to be declared when there is profit or
otherwise
winding up - the conditions, notice to members
confidentiality of know-how and the founders' agreement and penalties for disclosure
first right of refusal - purchase rights and counter-bid by a founder.
A Company is essentially run by the shareholders, but for convenience, and day-to-day working, by the
elected Directors. Usually, the shareholders elect a Board of Directors (BOD) at the Annual General
Meeting (AGM), which may be statutory (e.g. India).
The number of Directors depends on the size of the Company and statutory requirements. The
Chairperson is generally a well-known outsider but he /she may be a working Executive of the company,
typically of an American Company. The Directors may, or may not, be employees of the Company.
3. Write a short note on unfair trade practices and Restrictive trade practice.
Although the law of unfair competition helps protect consumers from injuries caused by deceptive trade
practices, the remedies provided to redress such injuries are available only to business entities and
proprietors. Consumers who are injured by deceptive trade practices must avail themselves of the
remedies provided by state and federal Consumer Protection laws. In general, businesses and proprietors
injured by unfair competition have two remedies: injunctive relief (a court order restraining a competitor
from engaging in a particular fraudulent or deceptive practice) and money damages (compensation for
any losses suffered by an injured business).
General Principles
The freedom to pursue a livelihood, operate a business, and otherwise compete in the marketplace is
essential to any free enterprise system. Competition creates incentives for businesses to earn customer
loyalty by offering quality goods at reasonable prices. At the same time, competition can also inflict harm.
The freedom to compete gives businesses the right to lure customers away from each other. When one
business entices enough customers away from competitors, those rival businesses may be forced to shut
down or move.
The law of unfair competition will not penalize a business merely for being successful in the marketplace.
Nor will the law impose liability simply because a business is aggressively marketing its product. The law
assumes, however, that for every dollar earned by one business, a competitor will lose a dollar.
Accordingly, the law prohibits a business from unfairly profiting at a competitor's expense. What
constitutes unfair competition varies according to the Cause of Action asserted in each case. These
include actions for the infringement of Patents, Trademarks, and copyrights; actions for the wrongful
appropriation of Trade Dress, trade names, trade secrets, and service marks; and actions for the
publication of defamatory, false, and misleading representations.
The restrictive trade practices, or antitrust, provisions in the Trade Practices Act are aimed at deterring
practices by firms which are anti-competitive in that they restrict free competition. This part of the act is
enforced by the Australian Competition and Consumer Commission (ACCC). The ACCC can litigate in the
Federal Court of Australia, and seek pecuniary penalties of up to $10 million from corporations and
$500,000 from individuals. Private actions for compensation may also be available.
Secondary boycotts whose purpose is to cause substantial lessen competition (Actions between
two persons engaging in conduct hindering 3rd person from supplying or acquiring goods or
services from 4th)
Misuse of market power – taking advantage of substantial market power in a particular market,
for one or more proscribed purposes; namely, to eliminate or damage an actual or potential
competitor, to prevent a person from entering a market, or to deter or prevent a person from
engaging in competitive conduct.
Exclusive dealing – an attempt to interfere with freedom of buyers to buy from other suppliers,
such as agreeing to supply a product only if a retailer does not stock a competitor’s product.
Most forms of exclusive dealing are only prohibited if they have the purpose or likely effect of
substantially lessening competition in a market.
Third-line forcing: A type of exclusive dealing, third-line forcing involves the supply of goods or
services on the condition that the acquirer also acquires goods or services from a third party.
Third-line forcing is prohibited per se.
Resale price maintenance – fixing a price below which resellers cannot sell or advertise
A priority of ACCC enforcement action in recent years has been cartels. The ACCC has in place an
immunity policy, which grants immunity from prosecution to the first party in a cartel to provide
information to the ACCC allowing it to prosecute. This policy recognizes the difficulty in gaining
information/evidence about price-fixing behaviours.
- Applicable to all persons employed in an establishments with or without wages, except the members of
the employer's family.
- State government can exempt, either permanently or for a specified period, any establishments from all
or any provisions of this Act.
Main Provisions
- Compulsory registration of shop/establishment within thirty days of commencement of work.
- Communications of closure of the establishment within 15 days from the closing of the establishment.
- Lays down guidelines for spread-over, rest interval, opening and closing hours, closed days, national and
religious holidays, overtime work.
- Rules for annual leave, maternity leave, sickness and casual leave, etc.
- Obligations of employers.
- Obligations of employees.
About What:
1. To regulate conditions of work and employment in shops, commercial establishments, residential
hotels, restaurants, eating houses, theatres, other places of public entertainment and other
establishments.
2. Provisions include Regulation of Establishments, Employment of Children, Young Persons and
Women, Leave and Payment of Wages, Health and Safety etc.
Applicability & Coverage:
1. It applies to all local areas specified in Schedule-I
2. Establishment means any establishment to which the Act applies and any other such
establishment to which the State Government may extend the provisions of the Act by
notification
3. Employee means a person wholly or principally employed whether directly or through any
agency, whether for wages or other considerations in connection with any establishment
4. Member of the family of an employer means, the husband, wife, son, daughter, father, mother,
brother or sister and is dependent on such employer
Returns:
1. Form-A or Form-B (as the case may be) {Section 7(2)(a), Rule 5}
Before 15th December of the calendar year, i.e. 15 days before the expiry date
The employer has to submit these forms to the authority notified along with the old certificate of
registration and the renewal fees for minimum one year’s renewal and maximum of three year’s
renewal
2. Form-E (Notice of Change) {Rule 8}
Within 15 days after the expiry of the quarter to which the changes relate in respect of total
number of employees qualifying for higher fees as prescribed in Schedule-II and in respect of
other changes in the original statement furnished within 30 days after the change has taken
place. (Quarter means quarter ending on 31st March, 30th June, 30th September and 31st
December)
Registers:
1. Form-A {Rule 5}
Register showing dates of Lime Washing etc
2. Form-H, Form-J {Rule 20(1)} (if opening & closing hours are ordinarily uniform)
Register of Employment in a Shop or Commercial Establishment
3. Form-I {Rule 20(3)}, Form-K (if opening & closing hours are ordinarily uniform)
Register of Employment in a Residential Hotel, Restaurant, Eating-House, Theatre, or other
places of public amusement or entertainment
4. Form-M {Rule 20(4)}
Register of Leave – This and all the above Registers have to be maintained by the Employer
5. Visit Book
This shall be a bound book of size 7” x 6” containing at least 100 pages with every second page
consecutively numbered, to be produced to the visiting Inspector on demand. The columns shall
be:
i. Name of the establishment or Employer
ii. Locality
iii. Registration Number
iv. Date and
v. Time
2. Cyber crimes against property: The second category of Cyber crimes is Cyber crimes against all forms of
property. These crimes include unauthorized computer trespassing through cyberspace, computer
vandalism, and transmission of harmful programs and unauthorized possession of computerized
information.
3. Cyber crimes against Government: The third category of Cyber crimes is Cyber crimes against
Government. Cyber Terrorism is one distinct kind of crime in this category. The growth of Internet has
shown that individuals and groups to threaten international governments as also to terrorize the citizens
of a country are using the medium of cyberspace. This crime manifests itself into Cyber Terrorism when
an individual “cracks” into a government or military maintained website, for the purpose of perpetuating
terror.
Since Cyber crime is a newly emerging field, a great deal of development has to take place in
terms of putting into place the relevant legal mechanism for controlling and preventing cyber crime. The
courts in United States of America have already begun taking cognizance of various kinds of fraud and
cyber crimes being perpetrated in cyberspace. However, much work has to be done in this field. Just as
the human mind is ingenious enough to devise new ways for perpetrating crime, similarly, human
ingenuity needs to be canalized into developing effective legal and regulatory mechanisms to control and
prevent cyber crimes. A criminal mind can assume very powerful manifestations if it is used on a network,
given the reachability and size of the network.
Legal recognition granted to Electronic Records and Digital Signatures would certainly boost E –
Commerce in the country. It will help in conclusion of contracts and creation of rights and obligations
through electronic medium. In order to guard against the misuse and fraudulent activities over the
electronic medium, punitive measures are provided in the Act. The Act has recognized certain offences,
which are punishable. They are: -
- Is punishable with imprisonment up to three years, or with fine, which may extend up to two lakh
rupees, or with both.
Publishing of information which is obscene in electronic form (Sec 67): Whoever publishes or transmits
or causes to be published in the electronic form, any material which is lascivious or appeals to prurient
interest or if its effect is such as to tend to deprave and corrupt persons who are likely, having regard to
all relevant circumstances, to read, see or hear the matter contained or embodied in it shall be punished
on first conviction with imprisonment for a term extending up to 5 years and with fine which may extend
to one lakh rupees. In case of second and subsequent conviction imprisonment may extend to ten years
and also with fine which may extend up to two lakh rupees.
Failure to comply with orders of the controller by a Certifying Authority or any employee of such
authority (Sec 68):
Failure to comply with orders of the Controller by any Certifying Authority or by any employees of
Certifying Authority is a punishable offence. Such persons are liable to imprisonment for a term not
exceeding three years or to a fine not exceeding two lakh rupees or to both.
Fails to assist any agency of the Government to decrypt the information (Sec 69):
If any subscriber or any person-in-charge of the computer fails to assist or to extend any facilities and
technical assistance to any Government agency to decrypt the information on the orders of the Controller
in the interest of the sovereignty and integrity of India etc. is a punishable offence under the Act. Such
persons are liable for imprisonment for a term, which may extend to seven years.
Ans.: IT Act:
Ans.: Redressal forum: Twenty-five years ago, consumer action in India was virtually unheard of. It
consisted of some action by individuals, usually addressing their own grievances. Even this was greatly
limited by the resources available with these individuals. There was little organized effort or attempts to
take up wider issues that affected classes of consumers or the general public.
All this changed in the Eighties with the Supreme Court-led concept of public interest litigation. It gave
individuals and the newly formed consumer groups, access to the law and introduced in their work the
broad public interest perspective.
Telepress Features
Several important legislative changes took place during this period. Significant were the amendments to
the Monopolies and Restrictive Trade Practices Act (hereafter "MRTP Act") and the Essential Commodities
Acts, and the introduction of the Environment Protection Act and the Consumer Protection Act. These
changes shifted the focus of law from merely regulating the private and public sectors to actively
protecting consumer interests.
The Consumer Protection Act, 1986 (hereafter "the Act") is a remarkable piece of legislation for its focus
and clear objective, the minimal technical and legalistic procedures, providing access to redressal systems
and the composition of courts with a majority of non-legal background members.
The Act establishes a hierarchy of courts, with at least one District Forum at the district level (Chennai has
two), a State Commission at the State capitals and the National Commission at New Delhi. The pecuniary
jurisdiction of the District Forum is up to Rs. one lakh and that of the State Commission is above Rs. one
lakh and below Rs. 10 lakhs. All claims involving more than Rs. 10 lakhs are filed directly before the
National Commission. Appeals from the District Forum are to be filed before the State Commission and
from there to the National Commission, within thirty days of knowledge of the order.
This section explains how to make a complaint using our Complaints Registration Form. It tells you what
information you need to include on the form, and where you need to send your completed form.
Definition of a complaint
The UK Border Agency defines a complaint as “any expression of dissatisfaction about the services
provided by or for the UK Border Agency and/or about the professional conduct of UK Border Agency
staff, including contractors.”
Letters relating to the decision to refuse a UK visa. Visa applicants are expected to raise this using
the existing appeal channels.
Letters-chasing progress on an application unless it is outside our published processing times.
Full details about the complaint (including times, dates and locations);
The names of any UK Border Agency / Visa Application Centre staff you have dealt with;
Details of any witnesses to the incident (if appropriate);
Copies of letters or papers that are relevant; and
Any travel details that relate to your complaint.