Friday, 30 October 2015

Incorporation of a Company – Advantages & Disadvantages

A company, in simple terms, means a group of persons associated together for the attainment of a
common end, social or economic. It has no strict, technical or legal meaning.
     According to section 3 (1) (ii) of the Companies Act, 1956 a company means a company formed and registered under the Companies Act, 1956 or any of the preceding Acts. A Company comes into existence only by registration under the Act, which can be termed as incorporation. Thus, Incorporation is the forming of a new corporation (a corporation being a legal entity that is effectively recognized as a person under the law)

Advantages of Incorporation

1. Independent corporate existence - The outstanding feature of a company is its independent corporate existence. By registration under the Companies Act, a company becomes vested with corporate personality, which is independent of, and distinct from its members. A company is a legal person. The decision of the House of Lords in Salomon v. Salomon & Co. Ltd. (1897) is an authority on this principle.

2. Limited liability- limitation of liability is another major advantage of incorporation. The company, being a separate entity, leading its own business life, the members are not liable for its debts. The liability of members is limited by shares; each member is bound to pay the nominal value of shares held by them and his liability ends there.

3. Perpetual succession- An incorporated company never dies. Members may come and go, but the company will go on forever.

4. Common seal- Since a company has no physical existence, it must act through its agents and all such contracts entered into by such agents must be under the seal of the company. The common seal acts as the official seal of the company.

5. Transferable shares- when joint stock companies were established the great object was that the shares should be capable of being easily transferred. Sec 82 gives expression to this principle by providing that “the shares or other interest of any member shall be movable property, transferable in the manner provided by the articles of the company.”

6. Separate property- The property of an incorporated company is vested in the corporate body. The company is capable of holding and enjoying property in its own name. No members, not even all the members, can claim ownership of any asset of company’s assets.

7. Capacity to sue - Company can sue and be sued in its own name. The names of managerial members need not be impleaded.

8. Professional management- A company is capable of attracting professional managers. It is due to the fact that being attached to the management of the company gives them the status of business or executive class.

9. Raising Money from Public - Public Limited Companies can raise large amount of capital from the general public by issue of shares and public deposits. Private Limited Companies can raise capital only by private placement of shares and deposits.

Disadvantages of Incorporation

1. Lifting of corporate veil- though for all purposes of law a company is regarded as a separate entity it is sometimes necessary to look at the persons behind the corporate veil.

a) Determination of character- The House of Lords in Daimler Co Ltd. v. Continental Tyre and Rubber Co., held that a company though registered in England would assume an enemy character if the persons in de facto control of the company are residents of an enemy country.

b) For benefit of revenue- The separate existence of a company may be disregarded when the only purpose for which it appears to have been formed is the evasion of taxes.

c) Fraud or improper conduct- In Gilford Motor Co v. Horne, a company was restrained from acting when its principal shareholder was bound by a restraint covenant and had incorporated a company only to escape the restraint.

d) Agency or Trust or Government company- The separate existence of a company may be ignored when it is being used as an agent or trustee. In State of UP v. Renusagar Power Co, it was held that a power generating unit created by a company for its exclusive supply was not regarded as a separate entity for the purpose of excise.

e) Under statutory provisions- The Act sometimes imposes personal liability on persons behind the veil in some instances like, where business is carried on beyond six months after the knowledge that the membership of company has gone below statutory minimum (sec 45), when contract is made by mis-describing the name of the company (sec 147), when business is carried on only to defraud creditors(sec 542).

2. Formality and expense - Incorporation is a very expensive affair. It requires a number of formalities to be complied with both as to the formation and administration of affairs.

3. Company not a citizen - In State Trading Corporation of India v. CTO, the Supreme Court held
that a company though a legal person is not a citizen neither under the provisions of the Constitution nor under the Citizenship Act.

4. Regulatory and Record keeping Requirements - Corporate operations are governed by local, state, and federal regulations to a greater degree than are other businesses.

5. Separation of Finances - While incorporation provides significant protection of owners' personal assets from repercussions of business downturns, it also means that a business owner is not allowed to tap into the corporation's account for assistance in meeting personal debts.

Thursday, 29 October 2015

Poverty – Causes & Types

Poverty is not an accident. Like slavery and apartheid, it is man-made and can be removed by the actions of human beings” – Nelson Mandela
The dictionary meaning of the word poverty is “The quality or state of being poor or indigent; want or scarcity of means of subsistence; indigence; need.” The word poverty has come from Old French poverté (Modern French pauvreté), and from Latin paupertās, from pauper ‎(“poor”). So, poverty is a state or condition in which a person or community lacks the financial resources and essentials to enjoy a minimum standard of life and well-being that's considered acceptable in society.

United Nations defined poverty as the inability of getting choices and opportunities, a violation of human dignity. It means lack of basic capacity to participate effectively in society. It means not having enough to feed and clothe a family, not having a school or clinic to go to, not having the land on which to grow one’s food or a job to earn one’s living, not having access to credit. It means insecurity, powerlessness and exclusion of individuals, households and communities. It means susceptibility to violence, and it often implies living in marginal or fragile environments, without access to clean water or sanitation

Types of Poverty

Absolute Poverty - Absolute poverty or destitution refers to a condition where a person does not have the minimum amount of income needed to meet the minimum requirements for one or more basic living needs over an extended period of time. The basic human needs include food, safe drinking water, sanitation facilities, clothing, shelter, education and health care.

Relative Poverty - Relative poverty is the condition in which people lack the minimum amount of income needed in order to maintain the average standard of living in the society in which they live. Relative poverty is considered the easiest way to measure the level of poverty in an individual country. People are said to be impoverished if they cannot keep up with standard of living as determined by society. Relative poverty is defined relative to the members of a society and, therefore, differs across countries.

Causes of Poverty

1.       Lack of money
2.       Extreme weather – Drought, rainfall and flooding
3.       War and violence
4.       Inequalities of opportunities
5.       Unemployment
6.       Lack of control of local resources
7.       Low rate of economic development
8.       Price rise
9.       High population density

10.   Corruption
11.   Lack of access of education
12.   Mental illness, Lack of proper psychiatric care
13.   Low productivity in agriculture
14.   Social factors – laws of inheritance, caste system, traditions and customs, etc.
15.   National Debt: developing countries are not able to pay back the loans they owe to wealthy countries

Some facts about Global Poverty

Nearly half of the world’s population — more than 3 billion people — live on less than $2.50 a day. More than 1.3 billion live in extreme poverty — less than $1.25 a day.
1 billion children worldwide are living in poverty. According to UNICEF, 22,000 children die each day due to poverty.

805 million people worldwide do not have enough food to eat. Food banks are especially important in providing food for people that can’t afford it themselves. Run a food drive outside your local grocery store so people in your community have enough to eat.

More than 750 million people lack adequate access to clean drinking water. Diarrhea caused by inadequate drinking water, sanitation, and hand hygiene kills an estimated 842,000 people every year globally, or approximately 2,300 people per day.

In 2011, 165 million children under the age 5 were stunted (reduced rate of growth and development) due to chronic malnutrition.
Preventable diseases like diarrhea and pneumonia take the lives of 2 million children a year who are too poor to afford proper treatment.

As of 2013, 21.8 million children under 1 year of age worldwide had not received the three recommended doses of vaccine against diphtheria, tetanus and pertussis.
1/4 of all humans live without electricity — approximately 1.6 billion people.
80% of the world population lives on less than $10 a day.

Oxfam estimates that it would take $60 billion annually to end extreme global poverty--that's less than 1/4 the income of the top 100 richest billionaires.

The World Food Programme says, “The poor are hungry and their hunger traps them in poverty.” Hunger is the number one cause of death in the world, killing more than HIV/AIDS, malaria, and tuberculosis combined.

Wednesday, 28 October 2015

Uniform civil code in India

Article 44 of the Constitution directs the State to provide a Uniform Civil Code throughout the territory of India. Article 44 which is one of the Directive Principles of State Policy reads as “The State shall endeavor to secure for the citizens a uniform civil code throughout the territory of India.” It envisages administering the same set of secular civil laws to govern different people belonging to different religions and regions. This supersedes the right of citizens to subject themselves to different personal laws based on their religion or ethnicity. 

The common areas covered by a civil code include: marriage, divorce, adoption and rights relating to acquisition and administration of property. The laws of India, be it procedural or substantial govern every citizen, irrespective of religion, caste or creed. But in matters of marriage, divorce and inheritance, citizens are governed by diverse laws depending on their religion, which are termed as personal laws, though religion is not merely a matter of personal choice. To bring all the citizens within the ambit of common law, there must be a uniform civil code applicable throughout the country.

However, uniform civil code is only a Directive Principle of State Policy therefore it cannot be enforced in a court of law. Presently uniform civil code is implemented only in the State of Goa which harmoniously brings all religions under the umbrella of a common civil code and Muslims, Hindus and Christians are bound by the same laws relating to marriage, divorce and succession.

Need of Uniform Civil code

1.       There are many personal laws for different-different communities which are creating unnecessary burden on the legal system. Implementing a uniform civil code will reduce burden on legal system.
2.       If there will be a common law for all the religions and communities, it will bring unity in the country.
3.       As there are different laws in the country, we are not secular in true sense. Laws should have nothing to do with the religions. Enacting uniform civil code will promote secularism.

4.       Politicians are using religion for gaining vote-bank. If there will be a common law in the country, then it will bring an end to religion based vote bank politics.
5.       Religiously motivated laws are mostly discriminatory to women and gender biased. All laws must treat both men and women equally. No religious law should be able to override this fundamental principle. That means polygamy, unfair inheritance and unfair divorce laws allowed for minority groups must be done away with.
6.       Hindus gets tax exemption under Hindu Undivided Family while Muslims are exempted from registering a gift thus saving stamp duty. These benefits are purely based on religion and hence they are unconstitutional.
7.       The laws of our land are not made to please any specific religion so there must be common law for all the religions and communities.

8.       Different laws for different religions and communities create confusion.
9.       The constitution demands implementation of uniform civil code as it is one of the directive principles of state policy.

Landmark Judgments:

In the case of Mohd. Ahmed Khan vs. Shah Bano Begum, 1985 SC, which pertains to the liability of a Muslim husband to maintain his divorced wife beyond iddat period, who is not able to maintain herself, the Supreme Court held that Section 125 of Cr. P. C which imposes such obligation on all the husbands is secular in character and is applicable to all religions.

In Sarala Mudgal vs. Union of India, 1995 SC, a division bench of the Supreme Court strongly advocated the introduction of a Uniform Civil Code in India. In this case the Supreme Court held that conversion of a Hindu male to Islam only for the purpose of contracting a second marriage is bigamous and Section 494 of Indian Penal Code is applicable in such a case.

In John Vallamattom vs. Union of India, 2003 SC,  the Supreme Court strike down section 118 of the Indian Succession Act, 1925 as violative of Article 14 of the Constitution. Apex Court held that Article 44 which provides for uniform civil code is based on the premise that there is no necessary connection between religious and personal law in a civilized society. Article 25 of the Constitution confers freedom of conscience and free profession, practice and propagation of religion. The aforesaid two provisions viz. Articles 25 and 44 show that the former guarantees religious freedom whereas the latter divests religion from social relations and personal law.

In Maharshi Avadesh v. Union of India, 1993 SC, Supreme Court specifically declined to issue a writ directing the respondents to consider the question of enacting a Common Civil Code for all citizens of India holding that the issue raised being a matter of policy, it was for the Legislature to take effective steps as the Court cannot legislate.

Tuesday, 27 October 2015

Lifting of Corporate Veil

Lifting of corporate veil is a legal concept that separates the personality of a corporation from the
personalities of its shareholders, and protects them from being personally liable for the company’s debts and other obligations. Lifting the corporate veil means disregarding and ignoring the corporate personality and looking behind the real person who are in the control of the company. In other words, where a fraudulent and dishonest use is made of the legal entity, the individuals concerned will not be allowed to take shelter behind the corporate personality. In this regards the court will break through the corporate veil.

According to the definition of Black Law Dictionary, “the piercing the corporate veil is the judicial act of imposing liability on otherwise immune corporate officers, Directors and shareholders for the corporation's wrongful acts.”

Origin of Doctrine of Lifting of the Corporate Veil

An incorporated company has a legal entity distinct from its members from the date of its incorporation. The company as a separate entity was firmly established in the landmark decision in Salomon v. Salomon & Co. Ltd (1897). In this case, Salomon, a sole trader, sold his manufacturing business to Salomon & Co. Ltd. (a company he incorporated) in consideration for all but six shares in the company, and received debentures worth 10 thousand pounds. The other subscribers to the memorandum were his wife and five children who each took up one share. The business subsequently collapsed, and Salomon made a claim, on the basis of the debentures held, as a secured creditor. The liquidator argued that Salomon could not rank ahead of other creditors because, in fact, the company and Mr. Salomon were one and the same–or alternatively, that the company carried on business on Salomon’s behalf.

On appeal, the House of Lords held that Salomon & Co. Ltd. was not a sham; that the debts of the corporation were not the debts of Mr. Salomon because they were two separate legal entities; and that once the artificial person has been created, “it must be treated like any other independent person with its rights and liabilities appropriate to itself.”

Statutory Provisions in India supporting Lifting of Corporate Veil

The Companies Act, 1956 provides for circumstances when corporate veil can be lifted and the individual members/directors will be made liable for certain transactions. The statutory provisions are as follows:

1. Reduction of membership below statutory minimum (Section 45 of the Act): This section provides that if the number of member of a company is reduced below 7 in the case of public company or below 2 in the case of private company and the company continues to carry on the business for more than 6 months, while the number is so reduced, every person who knows this fact and is a member of the company is severally liable for the debts of the company contracted during that time.

2. Failure to refund application money: Section 69(5) of the Act provides that the directors of a company are jointly and severally liable to repay the application money with interest, if the company fails to refund the application money of those applicants who have not been allotted shares within 130 days from the date of issue of the prospectus

3. Failure to Deliver Share Certificate (Section 113): Sub section (2) of Section 113 provides that in case a company fails to deliver the share/debenture certificate within 3 months of allotment and within 2 months of application for transfer, then the company as well as every officer of the company who is at fault shall be punishable with fine upto Rs. 5000 per day till such default continues

4. Improper use of name (Section 147 of the Act): Under sub-section (4) of section 147, an officer of a company who signs any bill of exchange, hundi, promissory note, cheque wherein the name of the company is not mentioned in the prescribed manner, such officer can be held personally liable to the holder of the bill of exchange, hundi etc. unless it is duly paid by the company.

5. No person to be a director of more than fifteen companies (Section 275): After the commencement of this Act, no person shall, save as otherwise provided in section 276, hold office at the same time as director in more than fifteen companies.

6. Liability for fraudulent conduct of business (Section 542 of the Act): If in the course of the winding up of a company, it appears that any business of the company has been carried on with intent to defraud the creditors of the company or any other person or for any fraudulent purpose, the persons who were knowingly parties to the carrying on of the business, in the manner aforesaid, shall be personally responsible, without any limitation of liability for all or any of the debts or other liabilities of the company, as the court may direct.

Need of the Doctrine of Lifting the Corporate Veil

The theory of lifting the corporate veil becomes necessary when unscrupulous people started using the corporate veil as an instrument to conceal fraud in company's affairs. Thus, it becomes compulsory for the legislature and court to evolve and to lift the corporate veil and find out the person behind the company, who are the actual beneficiaries of the corporate body.

Doctrine of Separation of Powers

It is widely accepted that for a political system to be stable, the holders of power need to be balanced

off against each other. The principle of separation of powers deals with the mutual relations among the three organs of the government, namely legislature, executive and judiciary. This doctrine tries to bring exclusiveness in the functioning of the three organs and hence a strict demarcation of power is the aim sought to be achieved by this principle. This doctrine signifies the fact that one person or body of persons should not exercise all the three powers of the government.

Montesquieu, a French scholar, found that concentration of power in one person or a group of persons results in tyranny. And therefore for decentralization of power to check arbitrariness, he felt the need for vesting the governmental power in three different organs, the legislature, the executives, and the judiciary. The principle implies that each organ should be independent of the other and that no organ should perform functions that belong to the other. 

The government should be that of a government of law and not of men. The premise behind the Separation of Powers is that when a single person or group has a large amount of power, they can become dangerous to citizens. The Separation of Power is a method of removing the amount of power in any group's hands, making it more difficult to abuse.

There are three main organs of the Government in State i.e. legislature, executive and judiciary. According to the theory of separation of powers, these three powers and functions of the Government must, in a free democracy, always be kept separate and exercised by separate organs of the Government. Thus, the legislature cannot exercise executive or judicial power; the executive cannot exercise legislative or judicial power of the Government.

As the concept of Separation of Powers explained by Wade and Philips, it means three different things:-

1.       That the same persons should not form part of more than one of the three organs of Government.
2.       That one organ of the Government should not control or interfere with the exercise of its function by another organ, e.g. the Judiciary should be independent of the Executive.
3.       That one organ of the Government should not exercise the functions of another.

Separation of Powers and Indian Constitution

One of the Directive principles of State Policy deals with separating judiciary from the executive. Article 50 of the Constitution states as “The State shall take steps to separate the judiciary from the executive in the public services of the State.”

The Indian Constitution has indeed not recognized the doctrine of separation of powers in its absolute rigidity, but the functions of different parts or branches of the government have been sufficiently differentiated and consequently it can very well be said that our Constitution does not contemplate assumption, by one organ or part of the state, of functions that essentially belong to another.

A more refined and clarified view taken in Ram Jawaya v. State of Punjab (1955 SC) case can be found in Kartar Singh v. State of Punjab (1967 SC), where Ramaswamy, J. stated “It is the basic postulate under the Indian Constitution that the legal sovereign power has been distributed between the legislature to make the law, the executive to implement the law and the judiciary to interpret the law within the limits set down by the Constitution.”

Separation of Powers and Judicial Pronouncements

In India, we follow a separation of functions and not of powers. And hence, we don‘t abide by the principle in its rigidity. An example of it can be seen in the exercise of functions by the Cabinet ministers, who exercise both legislative and executive functions. Art.74 (1) wins them an upper hand over the executive by making their aid and advice mandatory for the formal head. The executive, thus, is derived from the legislature and is dependent on it, for its legitimacy, this was the observation made by the Hon‘ble Supreme Court in Ram Jawaya v. State of Punjab (1955 SC).

On the question that where the amending power of the Parliament does lies and whether Art.368 confers and unlimited amending power on Parliament, the Supreme Court in Keshavanand Bharti v. State of Kerala (1973 SC) held that amending power was now subject to the basic features of the constitution. And hence, any amendment tapering these essential features will be struck down as unconstitutional. Beg. J. added that separation of powers is a part of the basic structure of constitution. 

None of the three separate organs of the republic can take over the functions assigned to the other. This scheme cannot be changed even by resorting to Art.368 of the constitution. There are attempts made to dilute the principle, to the level of usurpation of judicial power by the legislature.

In Indira Nehru Gandhi v. Raj Narain (1975 SC), where the dispute regarding PM election was pending before the Supreme Court, it was held that adjudication of a specific dispute is a judicial function which parliament, even under constitutional amending power, cannot exercise. 

So, the main ground on which the amendment was held ultravires was that when the constituent body declared that the election of PM won‘t be void, it discharged a judicial function which according to the principle of separation it shouldn‘t have done. The place of this doctrine in Indian context was made a bit clearer after this judgment.

Friday, 23 October 2015

Criminal Conspiracy under Indian Penal Code

Criminal conspiracy is an agreement between two or more persons to engage jointly in an unlawful or
criminal act, or an act that is innocent in itself but becomes unlawful when done by the combination of actors. When two or more persons agree to commit any crime, they are guilty of conspiracy whether the crime is committed or not. Criminal Conspiracy is one of the inchoate crimes which serve to punish and deter people from committing crime.

Halsbury’s Laws of England explain the concept of Criminal Conspiracy as: “Conspiracy consists in the agreement of two or more persons to do an unlawful act or to do a lawful act by unlawful means. It is an inevitable offence of common law, the punishment for which is imprisonment or fine or both at the discretion of the Court.”

Conspiracy was initially was considered as only a civil wrong, but later on it was brought under the ambit of Indian Criminal Law. Conspiracy was not an offence under the Indian Penal Code (IPC) until the Criminal Law Amendment Act of 1913 was passed which added the sections 120-A and 120-B to the IPC.
Now, sections 120-A and 120-B of the IPC, 1860 reads as:

120A. Definition of criminal conspiracy.

When two or more persons agree to do, or cause to be done,—
(1) an illegal act, or
(2) an act which is not illegal by illegal means, such an agreement is designated a criminal conspiracy:
Provided that no agreement except an agreement to commit an offence shall amount to a criminal conspiracy unless some act besides the agreement is done by one or more parties to such agreement in pursuance thereof.
Explanation - It is immaterial whether the illegal act is the ultimate object of such agreement, or is merely incidental to that object.

Section 120B. Punishment of criminal conspiracy

(1) Whoever is a party to a criminal conspiracy to commit an offence punishable with death, imprisonment for life or rigorous imprisonment for a term of two years or upwards, shall, where no express provision is made in this Code for the punishment of such a conspiracy, be punished in the same manner as if he had abetted such offence.
(2) Whoever is a party to a criminal conspiracy other than a criminal conspiracy to commit an offence punishable as aforesaid shall be punished with imprisonment of either description for a term not exceeding six months, or with fine or with both.

Para I
Punishment—Same as for abetment of the offence which is the object of the conspiracy—According as the offence which is the object of conspiracy is cognizable or non-cognizable—According as offence which is object of conspiracy is bailable or non-bailable—Triable by court by which abetment of the offence which is the object of conspiracy is triable—Non-compoundable.

Para II

Punishment—Imprisonment for six months or fine, or both—non-cognizable—Bailable—Triable by Magistrate of the first class—Non-compoundable.

So, the main ingredients of Section 120A of the Indian Penal Code are:
1) There should be two or more persons
2) There should be an agreement between them
3) The agreement must be to do or cause to be done:
        a) An illegal act; or
        b) A lawful act by illegal means.

The conspiracy arises and the offence is committed as soon as the agreement is made; and the offence continues to be committed so long as the combination persists. The actus reus in a conspiracy is the agreement to execute the illegal conduct, not the execution of it. It is necessary to show a meeting of minds, a consensus to effect an unlawful purpose. It is not necessary that each conspirator should have been in communication with every other.

Proof of criminal conspiracy

It is not easy to get proof of a criminal conspiracy by direct evidence so probably for this reason
Section 10 of the Indian Evidence Act, 1872 was enacted. Section 10 of Evidence Act reads as under:-

“Things said or done by conspirator in reference to common design:-Where there is reasonable ground to believe that two or more persons have conspired together to commit an offence or an actionable wrong, anything said, done or written by any one of such persons in reference to their common intention, after the time when such intention was first entertained by any one of them, is a relevant fact as against each of the persons believed to so conspiring, as well for the purpose of proving the existence of the conspiracy as for the purpose of showing that any such person was a party to it."

Thursday, 22 October 2015

Contributory negligence in India

The word ‘negligence’ denotes carelessness. In legal sense, it signifies failure to exercise standard of care which is expected by a reasonable man in the normal circumstances. In general, there is a legal duty to take care when it was reasonably foreseeable that failure to do so was likely to cause injury. Contributory negligence means the failure by a person to use reasonable care for the safety of either of himself or his property, so that he becomes blameworthy in part as an "author of his own wrong". The standard of care in contributory negligence is the same as in ordinary negligence; i.e., that which a reasonable person would have done under the same or similar circumstances. The act or omission of an injured party which amounts to contributory negligence must be a negligent act or omission, and it must serve as a proximate cause of the injury and not merely as a condition. Contributory negligence is one of the defenses of ‘negligence’. Indian Courts recognize the concept of contributory negligence.

In the absence of reasonable care on the part of the claimant, courts are likely to reduce the liability of the injurer. The rule of negligence with the defense of contributory negligence holds an injurer liable if and only if he was negligent and the victim was not. In India, this rule requires proportional sharing of liability when both parties were negligent. That is, the compensation that the victim receives gets reduced in proportion to his or her negligence. For instance, if a person is hit by a bike while crossing the street, and that person failed to look before crossing, then his careless actions will be taken into consideration in a civil court setting. In this situation, his negligence will be reviewed and any compensation that he obtains may be reduced because of that person’s careless actions.

Burden of Proof

The burden of proving the contributory negligence is on the defendant and if defendant does not take the plea of contributory negligence then the plaintiff is not bound to prove it. However, if the defendant proves the negligence of a plaintiff or claimant, then after that, the burden of proof is on a plaintiff to disprove his/her own negligence. Even if the plaintiff was negligent, the tortfeasor may still be held liable, if he or she had the last clear chance to prevent the injury.

Last Opportunity Rule

According to this last opportunity rule, when two persons are negligent, then the person, who had the last opportunity of avoiding the accident by taking ordinary care, should be liable for the loss. It means that if the defendant is negligent and the plaintiff having a later opportunity to avoid the consequences of the negligent act of the defendant does not observe any ordinary care, then he cannot make the defendant liable for that. Similarly, if the last opportunity to avoid the accident was with the defendant, he will be liable for the whole of the loss to the plaintiff.

Intentional Torts

The defense of contributory negligence generally is not available for intentional torts or where the defendant is found to be guilty of wanton and willful misconduct. It can also be unavailable where the defendant has violated a statute clearly designed for the protection of the plaintiff. Contributory negligence is not a defense for strict liability torts unless the plaintiff has knowingly assumed an unreasonable risk.

Cases on contributory negligence

Roberts v. Ring – Ring was 77 years old and had impaired hearing and vision. While driving on a busy street he saw a seven year old boy run into his path but failed to stop in time to avoid hitting him. The court held that while the defendant cannot take advantage of impairments and infirmities to avoid a finding of negligence, the injured party is held to a standard that takes age and maturity into account.

Solomon v. Shuell – Plain clothes police officers were arresting robbery suspects. The decedent thought the suspects were being attacked and was shot by one of the officers when he came out of his house with a gun. The court held that under the rescue doctrine, contributory negligence is not present if the rescuer had a reasonable belief that the victim was in actual danger.

Kumari Poddar vs Chitagong Engineering and Electrical Supply Co Ltd, 1945 Cal 433: The defense of contributory negligence cannot succeed unless it is provided that the plaintiff was under a legal duty to take care for his own safety.
Rural Transport Service vs. Bezlum Bibi, AIR (1980) Cal. 165: Bus conductor was not liable for the death of a passenger who climbed on the roof of the bus and was hit by a tree.

R.Srinivasa v. K.M.Parasivamurthy - a child of about 6 years was hit by a lorry while standing just near the footpath. It was held that a child of that age doesn’t have the road sense like his elders and, therefore, the plaintiff, cannot be blamed for contributory negligence.

Wednesday, 21 October 2015

Mid-Day Meal Rules, 2015

The Mid-Day Meal Rules, 2015 are notified by the Central Government on 30th September 2015. The National Food Security Act, 2013 contains provisions related to welfare schemes including Mid Day Meal Scheme. In accordance with the provisions of the Act, the Ministry of Human Resource Development (HRD) has finalized the Mid-Day Meal Rules after consultation with the States and other related Central Ministries.

Mid Day Meal Scheme - The Midday Meal Scheme is a school meal programme of the Government of India designed to improve the nutritional status of school-age children nationwide. The programme supplies free lunches on working days for children in primary and upper primary classes in government, government aided schools.

Main objectives of the mid day meal scheme are:

1.       Improve the nutritional status of children in classes one through five in government schools and government aided schools
2.       To encourage children from disadvantaged backgrounds to attend school regularly and help them concentrate in school activities.
3.       As well as provide nutritional support to students in drought- ridden areas throughout summer vacation.

The salient provisions of the newly notified Rules are:

1.       Entitlements of children: Every child within the age group of six to fourteen years studying in classes I to VIII who enroll and attend the school, shall be provided hot cooked meal having nutritional standards of 450 calories and 12 gm of protein for primary and 700 calories and 20 gm protein for upper primary free of charge every day except on school holidays. The place of serving meals to the children shall be school only.

2.       Implementation of the Scheme: Every school shall have the facility for cooking meal in hygienic manner. Schools in urban area may use the facility of centralized kitchens for cooking meals wherever required in accordance with the guidelines issued by the Central Government and the meal shall be served to children at respective school only.
3.       Responsibility of School Management Committee: The School Management Committee mandated under Right to Free and Compulsory Education Act, 2009 shall also monitor implementation of the Mid-day meal Scheme and shall oversee quality of meals provided to the children, cleanliness of the place of cooking and maintenance of hygiene in implementation of mid day meal scheme.

4.       Utilization of School Funds: The Headmaster or Headmistress of the school shall be empowered to utilise any fund available in school for the purpose of continuation of Mid Day Meal Scheme in the school in case of temporary unavailability of food grains, cooking cost etc. in the school. The utilised fund shall be reimbursed to the school account immediately after receipt of mid day meal funds.

5.       Testing of the meals by Accredited Labs to ensure nutritional standards: Hot cooked meal provided to children shall be evaluated and certified by the Government Food Research Laboratory or any laboratory accredited or recognized by law, so as to ensure that the meal meets with the nutritional standards and quality.

6.       The Food and Drugs Administration Department of the State may collect samples to ensure the nutritive value and quality of the meals. The samples shall be collected at least once in a month from randomly selected schools or centralized kitchens and sent for examination to the accredited laboratories.

7.       Food Security Allowance. - If the Mid-Day Meal is not provided in school on any school day due to non-availability of food grains, cooking cost, fuel or absence of cook-cum-helper or any other reason, the State Government shall pay food security allowance by 15th of the succeeding month in the manner provided herein below:-

       (a) Quantity of Food grains as per entitlement of the child; and
       (b) Cooking cost prevailing in the State.

        (i)  In case of non-supply of meal by the Centralised Kitchen, the Food Security Allowance shall be realised from the Centralised Kitchen as stated above.
(ii) Provided that in case a child has not taken food on offer for whatever reasons, no claim of food security allowance shall lie with the State Government or Centralised Kitchens:
(iii) Provided further that no claim shall lie with State Government or Centralised Kitchen for reasons of quality of food grains and meal:
(iv) The State Government shall take action to fix responsibility on the person or agency in accordance with the procedure laid down, if mid day meal is not provided in school on school days continuously for three days or at least for five days in a month.

(v) Wherever an agency of Central Government is involved, the State Government shall take up the matter with Central Government which shall resolve the matter within a month.

Tuesday, 20 October 2015

Divorce by mutual consent as under Hindu law

Divorce is the legal dissolution of marriage. When both the parties (i.e. husband and wife) jointly file a petition for divorce and divorce is granted by the court, then that amounts to divorce by mutual consent. In divorce by mutual consent case, both the parties are petitioners. In the year 1955 when the Hindu Marriage Act was enacted, the provision of divorce by mutual consent was not there. It was only by the Marriage Laws (Amendment) Act, 1976 that a new section 13B was inserted in the Hindu Marriage Act.

Section 13B of the Hindu Marriage Act, 1955 reads as – “(1) Subject to the provisions of this Act a petition for dissolution of marriage by a decree of divorce may be presented to the District Court by both the parties to a marriage together, whether such marriage was solemnized before or after the commencement of the Marriage Laws (Amendment) Act, 1976, on the ground that they have been living separately for a period of one year or more, that they have not been able to live together and that they have mutually agreed that the marriage should be dissolved.

(2) On the motion of both the parties made earlier than six months after the date of the presentation of the petition referred to in sub-section (1) and not later than eighteen months after the said date, if the petition is not withdrawn in the mean time, the Court shall, on being satisfied, after hearing the parties and after making such inquiry as it thinks fit, that a marriage has been solemnized and that the averments in the petition are true, pass a decree of divorce declaring the marriage to be dissolved with effect from the date of the decree.”

Conditions required for applicability of section 13B of the Hindu Marriage Act are:

(i) Husband and wife have been living separately for a period of 1 year or more;
(ii) That they are unable to live together;
(iii) Both husband and wife have mutually agreed that the marriage should be dissolved.

Hence, they both must be living separately for a period of 1 year or more before filing a petition of divorce by mutual consent. ‘Living separately’ has no reference to the place of living. It is not that they cannot live under the same roof rather it is important that they are not living as husband and wife and that they have no desire to perform marital obligations anymore.

Procedure of divorce by mutual consent

Both the parties must file a joint petition supported by affidavits in the District Court. This is known as first motion petition in which they have to state that due to irreconcilable differences between them, they can no longer stay together as husband and wife and that divorce should be granted to them. After expiry of 6 months and not later than 18 months, they both have to file a second motion petition. But if the petition is not withdrawn and the court is satisfied that all the requirements are fulfilled then the Court can grant a mutual divorce decree. The marriage will stand dissolved from the date of such decree passed by the Court. The 6 months time is given so that the parties can re-think on their decision and to check any possibility of reconciliation. Any of the party can withdraw his/her consent before the passing of the decree. This 6 months time is generally known as ‘cooling period’.

However, the consent must be free and not obtained by way of force, fraud, undue influence or any kind of threat as the whole purpose of mutual consent will be vitiated if consent is not free.

Advantages of divorce by mutual consent as compared to regular divorce

         i.            It avoids long matrimonial litigation
        ii.            It leaves no room for unnecessary quarrel
      iii.            There are no accusations or counter accusations
      iv.            It saves time and money
        v.            In a mutually agreed divorce there are no bitter feelings between the parties

Important Judgments:

Hitesh Bhatnagar vs. Deepa Bhatnagar [2011 Supreme Court] a Bench comprising Justices D K Jain and H L Dattu said
even if husband or wife withdrew consent after 18 months but prior to passing of the decree by a competent court, the court could not grant divorce. So, any of the party may withdraw his/her consent at any time before the passing of the decree.

Smt. Sureshta Devi vs Om Prakash [1991 Supreme Court] In this case Supreme Court said that “…section 13B does not provide that if there is a change of mind it should not be by one Party alone, but by both. Therefore, if one of the parties at that stage withdraws its consent the Court cannot pass a decree of divorce by mutual consent.” Thus, a petition for divorce by mutual consent can be unilaterally withdrawn.

Anjana Kishore Vs Puneet Kishore [2002 Supreme Court] a three-judge bench of the apex court waived off the six month period for granting the decree of divorce by exercising its extraordinary powers under Article 142 of the Constitution which empowers the Supreme Court to pass any order or judgment for rendering justice to individuals and others.

Anil Kumar Jain vs. Maya Jain [2009 Supreme Court] opined that only the Supreme Court under Article 142 of the Constitution has the power to waive off the six month period and not the high courts

Monday, 19 October 2015

Copyright Law in India

Copyright is a form of protection given to the authors or creators of "original works of authorship," including literary, dramatic, musical, artistic and other intellectual works. Copyright law in India is governed by Copyright Act, 1957. Copyright Act reflects the law and work of many of the international conventions like Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), Berne Convention for Protection of Literary and Artistic Works (1886), Universal Copyrights Convention (1951), Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations (1961) and World Intellectual Property Organization.

Works protected under Copyright Act

As per section 13 of the Copyright Act, following works are protected:
1.        Original literary, dramatic, musical and artistic works
2.        Cinematograph films
3.        Sound recordings

Ownership of Copyright

As per section 13 of the Copyright Act, the author is considered as the first owner of the copyright. However in case works made in the course of an author's employment under a "contract of service" or apprenticeship, the employer is considered as the first owner of copyright. Also in the case of Government work, the Government shall be the first owner. However, the ownership lies with the employer or government, as the case may be, only in the absence of an agreement to the contrary.

Registration of Copyright – Whether Compulsory?

Under Indian law, registration is not a prerequisite for acquiring a copyright in a work. A copyright in a work is created when the work is created and given a material form, provided it is original. The Register of Copyright acts as prima facie evidence of the particulars entered therein. The documents purporting to be copies of the entries and extracts from the Register certified by the Registrar of Copyright are admissible in evidence in all courts without further proof of original. Thus, registration only raises a presumption that the person in the Register is the actual author, owner or right holder.

Term of Copyright

Original literary, dramatic, musical and artistic works – As per section 22 of the Copyright Act, the duration is lifetime of the author/artist until 60 years from the beginning of the calendar year next following the year in which the author/artist dies.
Literary, dramatic, musical and artistic works (anonymous or pseudonymous) - As per section 23 of the Copyright Act, the duration is 60 years from the beginning of the calendar year next following the year in which the work is first published.
Photographs, Cinematograph films, Sound recording, Government work, works of public undertakings, works of international organizations – As per sections 25-29 of the Copyright Act, the duration is 60 years next following the year in which the work is published.

Copyright infringement

Anyone who exploits any of the exclusive rights of copyright without the copyright owner's permission commits copyright infringement. If a lawsuit is brought in a court, the infringer will have to pay the copyright owner the amount of money the infringer made from using the work or that the owner would have made if the infringement had not happened. In order for a court to determine that a copyright in a work has been infringed upon it must find that: (a) the infringing work is "substantially similar" to the copyrighted work, and (b) the alleged infringer had access to the copyrighted work -- meaning they actually saw it or heard it. There are no clear rules for deciding when "substantial similarity" exists between two works. Courts look for similarities in appearance, sound, words, format, layout, sequence, and other elements of the works.

Remedies available against copyright infringement

Administrative remedies - Detention of the infringing goods by the customs authorities
Civil remedies – Injunction, damages and accounts of profits (Section 55 of the Copyright Act)
Criminal remedies - Imprisonment for a term which shall not be less than 6 months but which may extend to 3 years and with fine which shall not be less than Rs. 50,000 but which may extend to Rs. 2,00,000 (Section 63 of the Copyright Act)

Important Cases

Eastern Book Company v. Navin J.Desai [Delhi High Court, 9-March-2001] - It is open to everybody to reproduce and publish the government work including the judgment/ order of a court. However if a person by extensive reading, careful study and comparison and with the exercise of taste and judgment has made certain comments about judgment or has written a commentary thereon, may be such a comment and commentary is entitled to protection under the Copyright Act.

Godrej Soaps (P) Ltd v Dora Cosmetics Co. [Delhi High Court, 23-April-2001] - Where the carton was designed for valuable consideration by a person in the course of his employment for and on behalf of the plaintiff and the defendant had led no evidence in his favour, the plaintiff is the assignee and the legal owner of copyright in the carton including the logo.

Krishika Lulla & Others v. Shyam Vithalrao Devkatta & Another [Supreme Court, 15-October-2015] – No copyright subsists in the ‘title’ of literary work.