CS-EXECUTIVE

(Group-I)

Emergency
Jurisprudence, Interpretation
& General Laws
Adv Chirag Chotrani
CS Vikas Vohra CA CS Harish A. Mathariya

CS Vikas Vohra CA CS Harish A. Mathariya

Founders
Page 1

JURISPRUDENCE

INDEX

Chapter Chapter Name Page No.

No.

100 MARKS

1 Sources of Law 1.1 - 1.26

2 Constitution of India 2.1 - 2.63

3 Interpretation of Statutes 3.1 - 3.15

4 General Clauses Act, 1897 4.1 - 4.18

5 Administrative Law 5.1 - 5.15

6 Law of Torts 6.1 - 6.09

7 Law of Limitation,1963 7.1 - 7.14

8 Civil Procedure Code, 1908 8.1 - 8.17

9 Indian Penal Code, 1860 9.1 - 9.31

10 Code of Criminal Procedure,1973 10.1 - 10.16

11 Indian Evidence Act, 1872 11.1 – 11.15

12 Special Courts, Tribunal under Companies Act and other 12.1 - 12.23
legislations

13 Arbitration and Conciliation Act 13.1 - 13.18

14 Indian Stamp Act, 1899 14.1 - 14.40

15 Registration Act, 1908 15.1 – 15.15

16 Right to Information, 2005 16.1 - 16.10

17 Information Technology Act, 2000 17.1 - 17.14

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1 SOURCES OF LAW

INTRODUCTION

The nature and meaning of the law have been described by several jurists. However, there is no
consensus on the true nature and meaning of the law. The reason for the lack of unanimity on
this issue is that this issue was considered and considered by different lawyers to formulate a
general theory of law and order at different times and from different points of view, that is,
from the point of view of the nature, the source, the function and the purpose of the right, for
example. Satisfy the needs of a certain period of legal development.

For the purpose of clarity and a better understanding of the nature and meaning of the law, we
may classify various definitions into five broad classes:

■ Natural

■ Positivistic

■ Historical

■ Sociologist

■ Realistic

NATURAL LAW
Natural Law is a moral theory of jurisprudence which maintains that the law should be based
on morality and ethics. In other words, natural law is a universal standard that applies to all
mankind throughout all time. This school consists of most ancient definitions.

Under this school fall most of the ancient definitions given by Roman and other ancient Jurists.
Ulpine defined Law as “the art or science of what is equitable and good.”
Cicero said that Law is “the highest reason implanted in nature.”
Justinian’s Digest defines Law as “the standard of what is just and unjust.”
In all these definitions, propounded by Romans, “justice” is the main and guiding element of
the law.

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The ancient Hindu views were that the "law" is the mandate of God and not of any political
sovereign. Everyone, including the ruler, must obey. Therefore, the "law" is part of the
"Dharma". The idea of "justice" is always present in the Hindu concept of law.

Natural School of Law

Jurist Definition

Ulpine Art or Science of Equitable & good

Cicero Highest reason implanted in nature

Justinian’s Standard of just & unjust

Digest

Salmond Body of Principles recognized & applied by the state in the administration of
justice.

Vinogradoff Set of rules imposed & enforced by society with regard to attribution & exercise
of power over persons & tilings.

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POSITIVISTIC
Legal positivism is a school of jurisprudence whose advocates believe that the only legitimate
sources of law are those written rules, regulations, and principles that have been expressly
enacted, adopted, or recognized by a governmental entity or political institution, including
administrative, executive, legislative, and judicial bodies.
The Positivist Theory says that there should be a superior Governmental entity that is not
subject to question or challenge. This entity is responsible for determining what is right & what
is wrong as a matter of law.
According to John Austin, “Law is the aggregate of rules set by man as politically superior, or
sovereign, to men as a political subject.” In other words, law is the “command of the
sovereign”. It obliges a certain course of conduct or imposes a duty and is backed by a sanction.
Thus, the command, duty, and sanction are the three elements of law.
Kelsen gave the ‘pure theory of law’. According to him, law is a ‘normative science’. The legal
norms are ‘Ought’ norms as distinct from ‘Is’ norms of physical and natural sciences. Law does
not attempt to describe what actually occurs but only prescribes certain rules. The science of
law to Kelson is the knowledge of the hierarchy of normative relations. All norms derive their
power from the ultimate norm called Grund norm.

HISTORICAL DEFINITION OF LAW

Savigny’s theory of law can be summarised as follows:
■ That law is a matter of unconscious and organic growth. Therefore, the law is found and not
made.
■ Law is not universal in its nature. Like language, it varies with people and age.
■ Custom not only precedes legislation but it is superior to it. Law should always conform to
the popular consciousness.
■ Law has its source in the common consciousness (Volkgeist) of the people.
■ Legislation is the last stage of lawmaking, and, therefore, the lawyer or the jurist is more
important than the legislator.
According to Sir Henry Maine, “The word law’ has come down to us in close association with
two notions, the notion of order and the notion of force”.

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SOCIOLOGICAL SCHOOL OF LAW
Duguit defines law as “essentially and exclusively as a social fact.”
Inhering defines law as “the form of the guarantee of the conditions of life of society, assured
by State's power of constraint”.
Essential elements of the above definition are as follows:-
1. Law is treated as only one means of social control.
2. Law is to serve a social purpose.
3. It is coercive or forced in character.

Roscoe Pound analyzed the term “law” in the 20th-century background as predominantly an
instrument of social engineering in which conflicting pulls of political philosophy, economic
interests, and ethical values constantly struggled for recognition against the background of
history, tradition, and legal technique. Roscoe Pound thinks of law as a social institution to
satisfy social wants - the claims and demands and expectations involved in the existence of
civilized society by giving effect to as much as may be satisfied or such claims given effect by
ordering of human conduct through politically organized society.
So in short, Roscoe Pound thinks of law as a social institution to satisfy social wants.

REALIST DEFINITION OF LAW

Realists define law in terms of the judicial process.
According to Holmes, “Law is a statement of the circumstances in which public force will be
brought to bear upon through courts.”
According to Cardozo, “A principle or rule of conduct so established as to justify a prediction
with reasonable certainty that it will be enforced by the courts if its authority is challenged, is a
principle or rule of law.”
To summarise, following are the main characteristics of law and a definition to become a
universal one, must incorporate all these elements:
■ Law pre-supposes a State.
■ The State makes or authorizes to make, or recognizes or sanctions rules which are called law.
■ For the rules to be effective, there are sanctions behind them.
■ These rules (called laws) are made to serve some purpose. The purpose may be a social
purpose, or it may be simply to serve some personal ends of a despot (a person who enjoys
absolute power).
The law and it's systems, has developed over many centuries combination of statutes, judicial
decisions, customs, and conventions. The State (Country) formulates certain rules of conduct to
be followed by people, is called Laws.

How Laws are made effective?

1. Remedial Measure - By requiring to pay damages for the injury caused due to disobedience.
2. Specific Performance - By requiring to complete the obligation which the person failed to
perform.
3. Preventive Measure - By preventing the disobedience.
4. Penal Measures - By imposing penalties and punishments.

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SIGNIFICANCE OF LAW

The law does not stop changing and as circumstances and conditions change in society, the
laws also change according to the requirements of society. At any time, the law of the
prevailing society must comply with the general statements, customs, and aspirations of its
people.

Modern science and technology have opened enormous perspectives and created new and
greater ambitions for men. Materialism and individualism prevail in all areas of life. These
events and changes tended to transform the law patently and lately. Therefore, the law has
undergone tremendous transformations - conceptual and structural. The idea of abstract justice
has been replaced by social justice.

The purpose of the law is order, which, in turn, gives hope of security for the future. The law is
expected to guarantee socio-economic justice and eliminate existing disparities in the socio-
economic structure and play a special role in achieving the various socio-economic objectives
enshrined in our Constitution. It should serve as a means of social change and a precursor of
social justice.

SOURCES OF INDIAN LAW

The expression “sources of law” has been used to convey different meanings. There are as
many interpretations of the expression “sources of law” as there are schools and theories about
the concept of law. The general meaning of the word “source” is origin.
There is a difference of opinion among the jurists about the origin of law :
Austin contends that law originates from the sovereign.
Savigny traces the origin in the general consciousness of the people.
The sociologists find law in numerous heterogeneous factors.
For theologians, law originates from God and from the Vedas and the Quran which are the
primary sources of Hindu and Mohammedan Law respectively, which are considered to have
been revealed by God. Precisely, whatever source of origin may be attributed to law, it has
emanated from almost similar sources in most of the societies.

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The modem Indian law as administered in courts is derived from various sources and these
sources fall under the following two heads:
■ PRINCIPAL SOURCES
■ SECONDARY SOURCES

PRINCIPLE SOURCES OF INDIAN LAWS

CUSTOMS
Custom is the most ancient of all the sources of law and has held the most important place in
the past, though its importance is now diminishing with the growth of legislation and
precedent.
A study of the ancient law shows that in primitive society, the lives of the people were
regulated by customs which developed spontaneously according to circumstances. It was felt
that a particular way of doing things was more convenient than others. When the same thing
was done again and again in a particular way, it assumed the form of custom.
Customs have played an important role in molding the ancient Hindu Law. Most of the law
given in Smritis and the Commentaries had its origin in customs. The Smritis have strongly
recommended that the customs should be followed and recognized. Customs worked as a re-
orienting force in Indian Law.

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Classification of Customs
The customs may be divided into two classes:
- Customs without sanction.
- Customs having sanction.
• Customs without sanction are those customs which are non-obligatory and are observed
due to the pressure of public opinion. These are called as “positive morality”.
• Customs having sanction are those customs which are enforced by the State. It is with these
customs that we are concerned about here.
These may further be divided into two classes: (i) Legal, and (ii) Conventional.
(i) Legal Customs: These customs operate as a binding rule of law. They have been recognized
and enforced by the courts and therefore, they have become a part of the law of land. Legal
customs are again of two kinds:
(a) Local Customs: Local custom is the custom which prevails in some definite locality and
constitutes a source of law for that place only. But there are certain sects or communities
which take their customs with them wherever they go. They are also local customs. Thus,
local customs may be divided into two classes:
- Geographical Local Customs
- Personal Local Customs
These customs are law only for a particular locality, section or community.
(b) General Customs: A general custom is that which prevails throughout the country and
constitutes one of the sources of law of the land.
Common Law in England is an example of general customs

(ii) Conventional Customs: They are also called "usages." These customs regulations are
binding by agreement of the parties and not by any legal authority. Before a Court treats the
conventional custom as incorporated in a contract, following conditions must be satisfied:

- It must be demonstrated that it is totally personalized and is fully known by the contracting
parties. There is no fixed term for which it was accepted.

- The convention can not change the general law of the country.
- It must be reasonable.
Like legal customs, conventional customs may also be classified as general or local. Local
conventional customs are limited either to a particular place or market or to a particular trade
or transaction.

Requisites of a Valid Custom

A custom will be valid at law and will have a binding force only if it fulfills the following
essential conditions, namely:
■ Immemorial (Antiquity)
A custom to be valid must be proved to be immemorial; it must be ancient. According to
Blackstone, “A custom, in order that it may be legal and binding must have been used so long
that the memory of man runs not to the contrary, so that, if anyone can show the beginning of
it, it is no good custom.

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■ Certainty
The custom must be certain and definite, and must not be vague and ambiguous.
■ Reasonableness
A custom must be reasonable. It must be useful and convenient for the society. A custom is
unreasonable if it is opposed to the principles of justice, equity and good conscience.
■ Compulsory Observance
A custom to be valid must have been continuously observed without any interruption from
times immemorial and it must have been regarded by those affected by it as an obligatory or
binding rule of conduct.
■ Conformity with Law and Public Morality
A custom must not be opposed to morality or public policy nor must it conflict with statute
law. If a custom is expressly forbidden by legislation and abrogated by *a statute, it is
inapplicable.
■ Unanimity of Opinion
The custom must be general or universal. If a practice is left to individual choice, it cannot be
termed as custom.
■ Peaceable Enjoyment
The custom must have been enjoyed peaceably without any dispute in a law court or otherwise.
■ Consistency: There must be consistency among the customs. Custom must not come into
conflict with the other established customs.

JUDICIAL DECISIONS OR PRECEDNTS

In general use, the term “precedent” means some set pattern guiding the future conduct. In the
judicial field, it means the guidance or authority of past decisions of the courts for future cases.
Only such decisions which lay down some new rule or principle are called judicial precedents.
Judicial precedents are an important source of law. They enjoyed great prestige at all times and
in all countries. This is especially true in the case of England and other countries influenced by
English jurisprudence. The principles of law, expressed for the first time in judicial decisions,
become precedents that must be followed as a law to solve problems and cases identical to
them in the future. The rule that a judgment becomes a precedent in such cases is known as the
doctrine of the gaze.
The reason for accepting a precedent is that the court's decision is considered correct. The
practice of the following precedents creates trust in the minds of the parties.
Law becomes certain and known and that in itself is a great advantage. Administration of
justice becomes equitable and fair.

High Courts
(i) The decisions of the High Court are binding on all the subordinate courts and tribunals
within its jurisdiction.
The decisions of one High Court have only a persuasive value in a court which is within the
jurisdiction of another High Court. But if such decision is in conflict with any decision of the
High Court within whose jurisdiction that court is situated, it has no value and the decision of
that High Court is binding on the court.

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In case of any conflict between the two decisions of co-equal Benches, generally, the later
decision is to be followed.

(ii) In a High Court, a single judge constitutes the smallest Bench. A Bench of two judges is
known as Division Bench. Three or more judges constitute a Full Bench. A decision of such a
Bench is binding on a Smaller Bench.
One Bench of the same High Court cannot take a view contrary to the decision already given by
another coordinate Bench of that High Court. Though the decision of a Division Bench is
wrong, it is binding on a single judge of the same High Court.
Thus, a decision by a Bench of the High Court should be followed by other Benches unless they
have reason to differ from it, in which case the proper course is to refer the question for
decision by a Full Bench.

(iii) The High Courts are the Courts of co-ordinate jurisdiction. Therefore, the decision of one
High Court is not binding on the other High Courts and have persuasive value only.

(iv) The Supreme Court is the highest Court and its decisions are binding on all courts and
other judicial tribunals of the country. Article 141 of the Constitution makes it clear that the law
declared by the Supreme Court shall be binding on all courts within the territory of India. The
words “law declared” includes an obiter dictum provided it is upon a point raised and argued
(Bimladevi v. Chaturvedi, AIR 1953 All. 613).
However, it does not mean that every statement in a judgment of the Supreme Court has the
binding effect. Only the statement of ratio of the judgment is having the binding force.

Supreme Court
The expression ‘all courts' used in Article 141 refers only to courts other than the Supreme
Court. Thus, the Supreme Court is not bound by its own decisions. However, in practice, the
Supreme Court has observed that the earlier decisions of the Court cannot be departed from
unless there are extraordinary or special reasons to do so (AIR 1976 SC 410). If the earlier
decision is found erroneous and is thus detrimental to the general welfare of the public, the
Supreme Court will not hesitate in departing from it.

English decisions have only persuasive value in India. The Supreme Court is not bound by the
decisions of Privy Council or Federal Court. Thus, the doctrine of precedent as it operates in
India lays down the principle that decisions of higher courts must be followed by the courts
subordinate to them. However, higher courts are not bound by their own decisions (as is the
case in England).

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KINDS OF PRECEDENTS
Precedents may be classified as:

(a) Declaratory and Original Precedents: A declaratory precedent is one which is merely the
application of an already existing rule of law. In declaratory precedent, the rule is applied
because it is already a law.

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The initial precedent is the one that creates and applies the new rule of law. The original cases
are made when there was no prior judicial decision on the law. In the case of the initial
precedent, this is the law of the future, because now it is applied.
Example: Harish sued a Hard drink company, the defendant after a friend of harish bought
him a hard drink from the defendant. The hard drink contained decomposed snail and harish
became ill after drinking it. In this case, the company was held responsible (had a duty of care)
towards their customers although the customers did not have any contract with the
manufacturers. If this decision is new, then it is treated as original precedents.
So, the difference between the two is that declaratory precedents declare an already existing
rule of law, whereas the original precedent declares a new rule of law for future reference.

(b) Persuasive Precedents (Influential Precedents): A persuasive precedent is one which the
judges are not obliged to follow but which they will take into consideration and will give great
weight.
In India, the decisions of one High Court are only persuasive precedents in the other High
Courts. Another example, like the rulings of England and American Courts can be considered
by the Indian Courts but not obligatory to follow.
Persuasive Precedent may come from a number of sources such as lower courts, foreign courts,
treatises or law reviews. In other words, Persuasive Precedent is precedent or other legal
writing that is related to the case at hand but is not a binding precedent on the court.

(c) Absolutely Authoritative Precedents: An authoritative precedent is one which judges

must follow whether they approve of it or not. It is binding on the judge and he has to apply it
even if he considers it wrong. The judge has no discretion at all.
In India, the subordinate courts are bound to follow the decisions of the High Court to which
they are subordinate. All courts are absolutely bound by decisions of the Supreme Court.
In other words, an absolutely authoritative precedent is absolutely binding and must be
followed without any question.

(d) Conditionally Authoritative Precedents: A conditionally authoritative precedent is one

which generally is binding on the court but can be disregarded in certain circumstances and
conditions.
In India, the decision of a Single Judge of the High Court is only conditionally authoritative
when before a Division Bench of the same High Court.

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IMPORTANT DOCTRINES

Doctrine of Stare Decisis

The doctrine of stare decisis means “adhere to the decision and do not unsettle things which are
established”. It is a useful doctrine intended to bring about certainty and uniformity in the law.
Under the stare decisis doctrine, a principle of law which has become settled by a series of
decisions generally is binding on the courts and should be followed in similar cases.
In simple words, the principle means that like cases should be decided alike. This rule is based
on public policy and expediency. Although generally the doctrine should be strictly adhered to
by the courts, it is not universally applicable. The doctrine should not be regarded as a rigid
and inevitable doctrine which must be applied at the cost of justice.

FEATURES OF STARE DECISIS

1. To stand by the things decided
2. Courts will look to the past similar issues to guide their Decisions.
3. In other words, “Adhere to the decision & do not unsettle things”
4. Past Judgement on similar issue obliges the future judges & puts an authoritative
instruction on them to follow the judgment

Ratio Decidendi
The underlying principle of a judicial decision, which is only authoritative, is termed as ratio
decidendi. The proposition of law which is necessary for the decision or could be extracted
from the decision constitutes the ratio. The concrete decision is binding between the parties to
it. The abstract ratio decidendi alone has the force of law as regards the world at large. In other
words, the authority of a decision as a precedent lies in its ratio decidendi.
Prof. Goodhart says that ratio decidendi is nothing more than the decision based on the
material facts of the case.

FEATURES OF RATIO DECIDENDI

1. Judge’s reason for coming to the decision
2. Reason for Decision (Rationale)
3. It is the legal rule used by the judge to determine the final decision
4. Court use Legal, Political & Social principles with its reasoning
5. Set precedents are binding

If the question requires an answer about the principles, the principles derived from abstracting
the essential facts of the case, eliminating intangible elements, are called "ratio decidendi", and
this principle applies not only to this case, but also to others cases. That have a similar nature.

Obiter Dicta
The literal meaning of this Latin expression is “said by the way”. The expression is used
especially to denote those judicial utterances in the course of delivering a judgement which
taken by themselves, were not strictly necessary for the decision of the particular issue raised.
These statements thus go beyond the requirement of a particular case and have the force of
persuasive precedents only. The judges are not bound to follow them although they can take
advantage of them. They sometimes help the cause of the reform of law.

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Obiter Dicta are of different kinds and of varying degree of weight. Some obiter dicta are
deliberate expressions of opinion given after consideration on a point clearly brought and
argued before the court. It is quite often too difficult for lawyers and courts to see whether an
expression is the ratio of judgement or just a causal opinion by the judge. It is open, no doubt,
to other judges to give a decision contrary to such obiter dicta.

To sum up obiter dicta :

Latin phrase

(+)

Said by the way

(+)

Judicial utterances in the course of delivering a Judgement which was necessary for the
decisions

(+)

Causal opinion of judges

(+)

No authoritative force

(+)

Persuasive in Nature

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STATUTES OR LEGISLATION
Statute law or statutory law is what is created by legislation, for example, Acts of Parliament or
of State Legislature. It is written law (Jus scriptum) against the customary law which is
unwritten law (Jus non- scriptum).
Example: the Companies Act, 2013 is a law passed by the parliament of India and assented
given by President of India.
The Parliament of India possesses the power of supreme legislation. A draft bill is passed by
both the Houses of Parliament and assented by President before it becomes a Law or Central
Act.

Legislation is either supreme or subordinate (delegated).

Supreme Legislation is that which proceeds from the sovereign power in the State or which
derives its power directly from the Constitution. It cannot be repealed, annulled or controlled
by any other legislative authority.
Subordinate Legislation is that which proceeds from any authority other than the sovereign
power. It is dependent for its continued existence and validity on some superior authority. The
Parliament of India possesses the power of supreme legislation. Legislative powers have been
given to the judiciary, as the superior courts are allowed to make rules for the regulation of
their own procedure. The executive, whose main function is to enforce the law, is given in some
cases the power to make rules. Such subordinate legislation is known as executive or delegated
legislation.

PERSONAL LAW

In many cases, the courts are required to apply the personal law of the parties where the point
at issue is not covered by any statutory

Hindu Sources • Shruti, and

Law • Smritis

Matters governed by Hindus are governed by their personal law in all matters
Hindu Law in case of relating to inheritance, succession, marriage, adoption, co-
Hindus parcenary, partition of joint family property, pious
obligations of sons to pay their father's debts, guardianship,
maintenance and religious and charitable endowments.

Muslim Sources • The holy Koran.

Law • Hadis.
• Ijmas.
• Kiyas.
• Digests and Commentaries on Mohammedan law.

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Matters governed by Mohammedans are governed by their personal law in all

Muslim Law in case of matters relating to inheritance, wills, succession, legacies,
Mohammedans marriage, dowry, divorce, gifts, wakfs, guardianship and pre-
emption.

In many cases, the courts are required to apply the personal law of the parties where the point
at issue is not covered by any statutory law or custom.
In the case of Hindus, for instance, their personal law is to be found in:
■ The Shruti which includes four Vedas.
■ The ‘Smritis’ which are recollections handed down by the Rishi’s or ancient teachings and
precepts of God, the commentaries written by various ancient authors on these Smritis.
There are three main Smritis; the Codes of Manu, Yajnavalkya and Narada.

The personal law of Mohammedans is to be found in:—

■ The holy Koran.
■ The actions, percepts, and sayings of the Prophet Mohammed which though not written
during his lifetime were preserved by tradition and handed down by authorized persons.
These are known as Hadis.
■ Ijmas, i.e., a concurrence of the opinion of the companions of the Prophet and his disciples.
■ Kiyas or reasoning by analogy. These are analogical deductions derived from a comparison
of the Koran, Hadis, and Ijmas when none of these apply to a particular case.
■ Digests and Commentaries on Mohammedan law.

SECONDARY SOURCES OF LAW

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1. Justice, Equity and Good Conscience
In the absence of any rule of a statutory law or custom or personal law, the Indian courts
apply to the decision of a case justice, equity and good conscience.

2. Sources of English Law

(a) Common Law: The Common Law are those principles of law evolved by the judges in
making decisions on cases that are brought before them. These principles have been built
up over many years so as to form a complete statement of the law in particular areas.

(b) Law Merchant: The Law Merchant is the most important source of the Merchantile Law.
Law Merchant means those customs and usages which are binding on traders in their
dealings with each other.

(c) Principle of Equity: In cases where there was no remedy or inadequate remedy at common
Law or Statute, principle of equity is applied. The King is considered as the head of justice
who referred the case to Chancellor who was known as 'Equity' and such courts as 'Equity
Courts'.
These 'Equity Courts' acted on a number of maxims e.g.
• "He who seeks equity must do equity",
• "He who comes to equity must come with clean hands".

(d) Statute Law: "Statute law is that portion of the law which is derived from the legislation or
enactment of Parliament or the subordinate and delegated legislative bodies." English
statutes becomes a secondary source of law.

MERCANTILE OR COMMERCIAL LAW

There are many branches of law; viz.,

Mercantile Law is related to the commercial activities of the people of the society. It is that
branch of law which is applicable to or concerned with trade and commerce in connection with
various mercantile or business transactions. Mercantile Law is a wide term and embraces all
legal principles concerning business transactions. The most important feature of such a
business transaction is the existence of a valid agreement, express or implied, between the
parties concerned.
The Mercantile Law or Law Merchant or Lex Mercatorla is the name given to that part of law
which grew up from the customs and usages of merchants or traders in England which
eventually became a part of Common Law of England.

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SOURCES OF MERCHANTILE LAW
The following are the main sources of Mercantile Law:

Mercantile Law in India

Prior to 1872, mercantile transactions were regulated by the law of the parties to the suit (i.e.,
Hindu
Law, Mohammedan Law, etc.). In 1872, the first attempt was made to codify and establish
uniform principles of mercantile law when The Indian Contract Act, 1872 was enacted. Since
then, various Acts have been enacted to regulate transactions regarding partnership, sale of
goods, negotiable instruments, etc.
Sources of Indian Mercantile Law
The main sources of Indian Mercantile Law are:

(i) English Mercantile Law: The Indian Mercantile Law is mainly an adaptation of
English Mercantile Law. However, certain modifications wherever necessary, have
been incorporated in it to provide for local customs and usages of trade and to suit
Indian conditions. Its dependence on English Mercantile Law is so much that even
now in the absence of provisions relating to any matter in the Indian Law, recourse
is to be had to the English Mercantile Law.

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(ii) Acts enacted by Indian Legislature or Statute Law: The Acts enacted by the Indian
legislature from time to time which are important for the study of Indian Mercantile
Law include, (i) The Indian Contract Act, 1872,(ii) The Sale of Goods Act, 1930, (iii)
The Indian Partnership Act, 1932, (iv) The Negotiable Instruments Act, 1881, (v) The
Arbitration and Conciliation Act, 1996, (vi) The Insurance Act, 1938.

(iii) Judicial Decisions: Judges interpret and explain the statutes. Whenever the law is
silent on a point, the judge has to decide the case according to the principles of
justice, equity and good conscience. It would be accepted in most systems of law
that cases which are identical in their facts, should also be identical in their
decisions. That principle ensures justice for the individual claimant and a measure
of certainty for the law itself. The English legal system has developed a system of
judicial precedent which requires the extraction of the legal principle from a
particular judicial decision and, given the fulfillment of certain conditions, ensures
that judges apply the principle in subsequent cases which are indistinguishable. The
latter provision being termed “binding precedents”. Such decisions are called as
precedents and become an important source of law (See Judicial Precedents at p.7).
Prior to independence, the Privy Council of Great Britain was the final Court of
Appeal and its decisions were binding on Indian Courts. After independence, the
Supreme Court of India is the final Court of Appeal. But even then, the decisions of
English Courts such as Privy Council and House of Lords are frequently referred to
as precedents in deciding certain cases and in interpreting Indian Statutes.

(iv) Customs and Trade Usages: Most of the Indian Law has been codified. But even
then, it has not altogether done away with customs and usages. Many Indian
statutes make specific provisions to the effect that the rules of law laid down in a
particular Act are subject to any special custom or usages of trade. For example,
Section 1 of the Indian Contract Act, 1872, lays down that, “Nothing herein
contained shall affect the provisions of any Statute, Act or Regulation not hereby
expressly repealed, nor any usage or custom of trade, nor any incident of any
contract, not inconsistent with the provisions of this Act”. Similarly, Section 1 of the
Negotiable Instruments Act, 1881, lays down that, “nothing herein contained...
affects any local usage relating to any instrument in any oriental language”. It may
be noted that the whole law relating to Hundis and the Kachhi and Pakki Adat
Systems of Agency is based on custom and usage of trade as recognized and given
legal effect to by courts of law in India.

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JURISPRUDENCE

Introduction and Meaning

■ The word Jurisprudence is derived from the word ‘juris’ meaning law and ‘prudence’
meaning knowledge. Jurisprudence is the study of the science of law. The study of law in
jurisprudence is not about any particular statute or a rule but of law in general, its concepts,
its principles and the philosophies underpinning it.

■ Different jurists/ legal philosophers have used the term in different ways. The meaning of
‘jurisprudence’ has changed over a period of time as the boundaries of this discipline are
not rigid.

■ Howsoever the term jurisprudence is defined: it remains a study relating to law. The word
Taw’ itself is used to refer to more than one thing. Hence one of the first tasks cf
jurisprudence is to attempt to throw light on the nature of law. However, various theorists
define law in their own ways and this leads to a corresponding jurisprudential study.

Different Interpretations of Jurisprudence by various Jurists

1. B.E.King

According to B.E. King, jurisprudence is not concerned with the exposition of law but with
disquisitions about law. For example, substantive laws teach us about our right, duties and
obligations and the procedural laws talk about the legal process through which those rights can
be enforced or obligations met but jurisprudence would go into the analysis of what rights,
duties, and obligations: how and why do they emerge in a society? Jurisprudence also
improves the use of law by drawing upon insights from other fields of study.

2. Justice Salmond

According to Salmond in the widest of its applications the term jurisprudence means the
science of law, using the word law in that vague and general sense, in which it includes all
species of obligatory rules of human action. He said that jurisprudence in this sense can be
further divided into three streams: civil jurisprudence, international jurisprudence, and natural
jurisprudence.

3. Jurist Bentham

English jurist Jeremy Bentham had used 'jurisprudence’ in two senses - one as ‘law’ referring
to the substance and interpretative history of a given legal norm, consisting of case laws,
precedents, and other legal commentary and the other as ‘theory’ or the study of general
theoretical questions about the nature of laws and legal systems.

4. Stone

Prof. Julius Stone defined ‘jurisprudence’ as the lawyer’s extraversion. According to him,
jurisprudence is the lawyer’s examination of the precepts, ideas, and techniques of the law in
the light derived from present knowledge in disciplines other than the law.

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5. Paton

According to Prof. G.W. Paton, jurisprudence is founded on the attempt, not to find universal
principles of law, but to construct a science which will explain the relationship between law,
its concepts, and the life of society.

LEGAL THEORIES

INTRODUCTION AND MEANING

Legal theory is a field of intellectual enterprise within jurisprudence that involves the
development and analysis of the foundations of law.

Two most prominent legal theories are the normative legal theory and the positive legal theory.
Positive legal theory seeks to explain what the law is and why it is that way, and how laws
affect the world, whereas normative legal theories tell us what the law ought to be.

There are other theories of law like the sociological theory, economic theory, historical theory,
critical legal theory as well.

AUSTIN’S THEORY OF LAW

John Austin a noted English legal theorist was the first occupant of the chair of Jurisprudence at
the University of London. Austin is known for the Command Theory of law. Austin was a
positivist, meaning that he concerned himself on what the law was instead of going into its
justness or fairness.

According to Austin law is the command of the sovereign that is backed by sanction. Austin
has propagated that law is a command which imposes a duty and the failure to fulfill the duty
is met with sanctions (punishment).

Thus Law has three main features:

■ It is a command.

■ It is given by a sovereign authority.

■ It has a sanction behind it.

Criticism of Austin’s Command Theory of law

■ Welfare states pass a number of social legislation that does not command the people but
confers rights and benefits upon them. Such laws are not covered under the command
theory.

■ According to Austin, the sovereign does not have to obey anyone but the modem states
have their powers limited by national and international laws and norms.

■ Austin does not provide for judges made laws. He said that judges work under the tacit
command of the sovereign but in reality judges make positive laws as well.

■ Since the presence of sovereign is a pre-requisite for a proposition to called law, Austin did
not recognize international laws as such because they are not backed by any sovereign.

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PROF. HLA HART’S POSITIVE THEORY OF LAW

British Legal Philosopher listed many meanings associated with the term ‘positivism’ as
follows:
• Laws are commands.
• The analysis of legal concepts is (a) worth pursuing, (b) distinct from sociological and
historical inquiries into law, and (c) distinct from critical evaluation.
• Decisions can be deduced logically from predetermined rules without recourse to social
aims, policy or morality.
• Moral judgments cannot be established or defended by rational argument, evidence or
proof.
• The law as it is laid down should be kept separate from the law that ought to be.
• Positivism is most commonly understood as the fifth description above. Natural law theory
claims that a proposition is ‘law' not merely because it satisfies some formal requirement
but by virtue of an additional minimum moral content. According to it, an immoral rule
cannot be ‘law' even if it satisfies all the formal requirements.

JEREMY BENTHAM
He was the pioneer of analytical jurisprudence in Britain. According to him ‘a law' may be
defined as an assemblage of signs, declarative of volition, conceived or adopted by a
sovereign in a state, concerning the conduct to be observed in a certain case by a certain
person or a class of persons, who in the case in question are or are supposed to be subject to
his power. Thus, Bentham's concept of law is an imperative one.
Bentham was of the initial contributors on the function that laws should perform in a
society. He claimed that nature has placed man under the command of two sovereigns-
pain and pleasure. ‘Pleasure' in Bentham's theory has a somewhat large signification,
including altruistic and obligatory conduct, the ‘principle of benevolence'; while his idea of
‘interest' was anything promoting pleasure. The function of laws should be to bring about
the maximum happiness of each individual for the happiness of each will result in the
happiness of all. The justification for having laws is that they are an important means of
ensuring the happiness of the members of the community generally. Hence, the sovereign
power of making laws should be wielded, not to guarantee the selfish desires of
individuals, but consciously to secure the common good.

Bentham said that every law may be considered in eight different respects:
1. Source: The source of law is the will of the sovereign, who may conceive laws which he
personally issues, or adopt laws previously issued by sovereigns or subordinate authorities,
or he may adopt laws to be issued in future by subordinate authorities. Sovereign according
to Bentham is any person or assemblage or person to whose will a whole political
community is supposed to be in a disposition to pay obedience and then in preference to
the will of any other person.
2. Subjects: These may be persons or things. Each of these may be active or passive subjects,
i.e., the agent with which an act commences or terminates.
3. Objects: The goals of a given law are its objects.

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4. Extent: Direct extent means that law covers a portion of land on which acts have their
termination; indirect extent refers to the relation of an actor to a thing.
5. Aspects: Every law has ‘directive’ and a ‘sanctional’ part. The former concerns the aspects of
the sovereign will towards an act-situation and the latter concerns the force of law. The four
aspects of the sovereign will are command, prohibition, non-prohibition, and non-
command and the whole range of laws are covered under it. These four aspects are related
to each other by opposition and concomitancy.
6. Force: The motivation to obey a law is generated by the force behind the law.
7. Remedial appendage: These are a set of subsidiary laws addressed to the judges through
which the judges cure the evil (compensation), stop the evil or prevent future evil.
8. Expression: A law, in the ultimate, is an expression of a sovereign’s will. The connection
with will raises the problem of discovering the will from the expression.
Having listed the eight different respects through which a law can be considered, Bentham
went on to analyze the ‘completeness’ of law in a jurisprudential sense. He said that a
complete law would have the features of integrality as well as unity. Integrality means that
a law should be complete in expression, connection, and design. A law is complete in
expression when the actual will of the legislation has been completely expressed. A law is
complete when various parts of it dealing with various aspects are well coordinated. If a
law does not cover a specific situation that it might have wanted to cover while being
enacted, it is incomplete in design. According to Bentham, the unity of law would depend
upon the unity of the species of the act which is the object of the law.

Criticism of Bentham’s theory of law

■ Due to Bentham’s strait-jacketing of laws into an imperative theory- all laws have to be
either command or permission, it does not take proper account of laws conferring power
like the power to make contracts, create a title, etc.
■ Bentham did not give fair treatment to custom as a source of law. He said customs could
never be ‘complete’.
■ Bentham’s theory did not allow for judge make laws and hoped that such laws gradually
eliminated by having ‘complete laws’.
■ It is not always true that an increase in the happiness of a certain segment of society will
lead to an increase in the overall happiness level because it might be associated with a
diminution in the happiness of some other rival section of the society.

ROSCOE POUND
A distinguished American legal scholar was a leading jurist of the 20th century and was one
of the biggest proponents of sociological jurisprudence which emphasized taking into
account of social facts in making, interpretation and application of laws.
Roscoe Pound drew a similarity between the task of a lawyer and an engineer and gave his
theory of social engineering. The goal of this theory was to build such a structure of society
where the satisfaction of maximum of wants was achieved with the minimum of friction
and waste. Such a society according to Roscoe Pound would be an ‘efficient' society.
Realization of such a social structure would require the balancing of competing interests.
Roscoe Pound defined interests as claims or wants or desires which men assert de facto,
and about which law must do something if organized societies are to endure. For any legal
order to be successful in structuring an efficient society, there has to be:

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1. Recognition of certain interests- individual, public and social.
2. A definition of the limits within which such interest will be legally recognized and given
effect to.
3. Securing those interests within the limits as defined.
According to Roscoe Pound, for determining the scope and the subject matter of the legal
system, the following five things are required to be done:
1. Preparation of an inventory of interests and their classification.
2. Selection of the interests which should be legally recognized.
3. Demarcation of the limits of securing the interest so selected.
4. Consideration of the means whereby laws might secure the interests when these have been
acknowledged and delimited, and
5. Evolution of the principles of valuation of interests.
Roscoe Pound's classification of interests are as follows:
1. Individual interest: These are claims or demands determined from the standpoint of an
individual's life and concern. They are-
(i) Interest of personality: This includes physical integrity, freedom of will, honor, and
reputation, privacy and freedom of conscience.
(ii) Interest in domestic relations: This includes relationships of parents, children, husbands,
and wives.
(iii) Interest of substance: This includes interests of property, freedom of association, freedom of
industry and contract, continuity of employment, inheritance and testamentary succession.

2. Public interest: These interests are asserted by an individual from the standpoint of political
life. They are:
(i) Interests of the state as a juristic person: It includes integrity, freedom of action and honor
of the state's personality, claims of the politically organized society as a corporation to
property acquired and held for corporate purposes.
(ii) Interests of the state as the guardian of social interest.

3. Social interests: These are claims or demands thought of in terms of social life and
generalized as claims of the social group. It is from the point of view of protecting the
general interest of all members of society. Social interests include-
(i) Social interest in the general security: This includes general safety, peace and order, general
health, the security of acquisition and transaction.
(ii) Social interest in the security of social institutions such as domestic, religious, political and
economic institutions.
(iii) Social interest in general morals like laws dealing with prostitution, gambling, bigamy,
drunkenness.
(iv) Social interest in the conservation of social resources like natural and human resource. This
social interest clashes to some extent with the individual interest in dealing with one's own
property as one pleases.
(v) Social interest in general progress. It has three aspects- economic, political and cultural.

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(vi) Social interest in individual life. It involves self-assertion, opportunity, and conditions of
life. Society is interested in individual life because individuals are its building blocks.
Having given various interest recognized by law, Roscoe Pound applied himself to figure out
to balance competing interests. He said that interests should be weighed on the same plane.
According to him, one cannot balance an individual interest against a social interest, since
that very way of stating them may reflect a decision already made. Thus all the interests
should be transferred to the same place, most preferably to the social plane, which is the
most general, for any meaningful comparison.
Criticism of Roscoe Pound’s theory of law
1. Pound said that interest pre-exists laws and the function of the legal system should be to
achieve a balance between competing interests but we see that a lot of interests today are a
creation of laws.
2. The theory does not provide any criteria for the evaluation of interest. It is not interesting as
such, but the yardstick with reference to which they have measured that matter. It may
happen that some interest is treated as an ideal in itself by society, in which case it is not the
interest as an interest, but as an ideal that will determine the relative importance between it
and other interests.
3. Pound's theory of balancing interests can be effectuated most effectively by judges because
the judges get to translate the activity involved in the cases before them in terms of interests
and select the ideal with reference to which the competing interests are to be measured.
Thus his theory gives more importance to the judiciary in comparison to the legislature.
4. Pound's distinction between Public Social interests is doubtful and even the distinction
between Individual and Social Interest is of minor significance. It is the ideal with reference
to which any interest is considered that matters, not so much the interest itself, still less the
category in which it is placed.
5. The recognition of a new interest is a matter of policy. The mere presence of a list of
interests is, therefore, of limited assistance in helping to decide a given dispute.

KELSEN’S PURE THEORY OF LAW

■ Hans Kelsen was an Austrian philosopher and jurist who is known for his ‘Pure Theory of
Law'.
■ Kelsen believed that the contemporary study and theories of law were impure as they were
drawn upon from various other fields like religion and morality to explain legal concepts.
■ Kelson, like Austin, was a positivist, in that he focused his attention on what the law was
and divested moral, ideal or ethical elements from law.
■ He discarded the notion of justice (given by Salmond) as an essential element of law
because many laws, though not just, may still continue as law',
■ Kelsen described law as a “normative science’ as distinguished from natural sciences which
are based on cause and effect, such as law of gravitation.
■ Like Austin, Kelsen also considered sanction as an essential element of law but he preferred
to call it ‘norm’. According to Kelsen, ‘law is a primary norm which stipulates sanction’.

Criticism of Kelsen’s Pure Theory

■ It is difficult to trace ‘grundnorm’ in every legal system. Also, there is no rule or yardstick
to measure the effectiveness of grundnorm.

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■ The Pure Theory also did not give the timeframe for which the effectiveness should hold for
the requirement of validity to be satisfied.
■ Kelsen’s theory ceases to be ‘pure’ the moment one tries to analyze the grundnorm because
then one will have to draw upon subjects other than law like sociology, history, and
morality.
■ International law does not sit well with Kelsen’s Pure theory. He advocated a monist view
of the relationship between international and municipal law and declared that the
grundnorm of the international system postulated the primacy of international law. The
actual experience has been to the contrary and the countries of the world mostly give
primacy to municipal laws over international laws.

JOHN WILLIAM SALMOND

He was a law professor in New Zealand who later also served as a judge of the Supreme
Court of New Zealand. He made a seminal contribution in the field of jurisprudence, law of
torts and contracts law.
Salmond claimed that the purpose of law was the deliverance of justice to the people and in
this sense, he differed from Bentham and Austin who went into the analysis of law as it
stood without going into its purpose. But Salmond also necessitated the presence of the
state for implementation of laws just like Bentham and Austin.
Salmond differentiated between ‘a law’ and ‘the law’ and said that the former refers to the
concrete and the latter to the abstract. According to him, this distinction demands attention
for the reason that the concrete term is not co-extensive with the abstract in its application.
In its abstract application, we speak of civil law, the law of defamation, criminal law, etc.
Similarly, we use the phrases law and order, law and justice, courts of law. In its concrete
sense, on the other hand, we talk about specific laws like the Indian Penal Code or the Right
to Information Act. Law or the law does not consist of the total number of laws in force.
According to Salmond law is the body of principles which are recognized and applied by
the state in the administration of justice. His other definition said that law consists of a set
of rules recognized and acted on in courts of justice. ‘Law’ in this definition is used in its
abstract sense. The constituent elements of which the law is made up are not laws but rules
of law or legal principles.
Since law was defined by a reference to the administration of justice, it needs to be
understood as well. Salmond says that human experience has made it clear that some form
of compulsion is required to maintain justice. It is in the nature of things to have conflict,
partly real, partly apparent, between the interests of man and man, and between those of
individuals and those of society at large; and men cannot be left to do what they believe is
right in their own eyes. Therefore, if a just society is to be maintained, it is necessary to add
compulsion so as to complement to walk on the desired path. Hence, there exists various
regulative or coercive systems, the purpose of which is the upholding and enforcement of
right and justice by some instrument of external constraint. One of the most important of
such systems is the administration of justice by the state. The administration of justice may,
therefore, be defined as the maintenance of right within a political community by means of
physical force of the state. Another is the control exercised over men by the opinion of the
society in which they live. Censure, ridicule, contempt are the sanctions by which society
(as opposed to the state) enforces the rules of morality.
Salmond argued that the administration of justice was the primary task of a state and the
laws were made to achieve that objective. Administration of justice was thus antecedent to
the laws. Laws thus are secondary, accidental, unessential. Law consists of the pre-

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established and authoritative rules which judges apply in the administration of justice, to
the exclusion of their own free will and discretion. Salmond further said that the
administration of justice is perfectly possible without laws through such a system is not
desirable. A court with unfettered discretion in the absence of laws is capable of delivering
justice if guided by equity and good conscience.
Salmond says that the development and maturity of a legal system consist in the
progressive substitution of rigid pre-established principles for individual judgment, and to
a very large extent these principles grow up spontaneously within the courts themselves.
That great aggregate of rules which constitutes a developed legal system is not a condition
precedent of the administration of justice but a product of fit. Gradually from various
sources- precedent, custom, statute—there is a collected body of fixed principles which the
courts apply to the exclusion of their private judgment. Justice becomes increasingly justice
according to law, and courts of justice become increasingly courts of law.
Criticism of Salmond’s theory.
1. Salmond's assertion that justice is the end and law is only a medium to realize it does not
always hold true because there are a number of laws that can be called ‘unjust'.
2. The pursuit of justice is not the only purpose of law, the law of any period serves many
ends and these ends themselves change with the passage of time.
3. There is a contradiction when Salmond says that the purpose of law is the administration of
justice but limits ‘jurisprudence' to the study of the ‘first principles' of civil law of a national
legal system because justice is a universal concept, the jurisprudential analysis of law
should not be constrained by national boundaries.

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2 CONSTITUTION OF INDIA

INTRODUCTION

The Constitution of India is the Supreme Law of India. The Constitution of India is popularly
known as 'Mother of all the laws' as all other laws derive their authority and force from the
Constitution. The Constituent Assembly under the Chairmanship of Dr. B.R. Ambedkar, took
almost 3 years to draft the Constitution. It was adopted on 26th November, 1949 and came into
force on 26th January, 1950. With the adoption of the Constitution, India became modern
Republic of India. It is a comprehensive document containing 395 Articles (divided into 22
Parts) and 12 Schedules. The Constitution of India is the longest written constitution of any
sovereign country in the world.

PREAMBLE

Preamble sets out the main objective which the legislation intended to achieve. It is a kind of
introduction to the statute and at times very helpful to understand the intention of the
legislature. Preamble is an insight to the legislation. Supreme Court has held in Berubari Case,
that preamble to Constitution is a key to understand mind of the makers. Preamble is the most
sacred part of the Constitution and is considered as soul of the Constitution. Any ambiguity in
the Constitution is interpreted in the sense which satisfies the Preamble.

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Meaning of Important Terminology in Preamble

Establishment of Sovereign, Socialist, Secular, Democratic Republic

➢ Sovereign - The word sovereign emphasizes that India is no more dependent upon any
outside authority. It is independent all around, within and without the borders of the
country.

➢ Socialist - This word was inserted in the Preamble by the Constitution (42nd Amendment)
Act, 1976.

➢ Secular - The term Secularism means a State has no religion of its own. It treats all religion
equally.

➢ Democratic - Democratic means that our Government has derived its authority from the
will of the people. In a Democratic character of the Indian polity is illustrated by the
provisions conferring on the adult citizens the right to vote and by the provisions for
elected representatives and responsibility of the executive to the legislature.

➢ Republic - Republic State has an elected head of the State who will govern it for a specific
period of time. Means that our government is of the people, by the people and for the people.

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Is preamble part of the Constitution?

The question that whether the Preamble is a part of the Constitution or not has been discussed
in following leading cases:-

• Berubari Case

• Keshav Ananda Bharti Case

• LIC of India versus Consumer Education & Research Centre Case

➢ Berubari Case

In Berubari Union (I), (1960) 3 SCR 250, the Supreme Court held that no doubt the Preamble
is a key to open the mind of makers. Preamble show the general purposes for drafting
several provisions in the Constitution but nevertheless the Preamble is not a part of the
Constitution.

➢ Keshav Ananda Bharti Case

In the case of Keshav Ananda Bharti v. State of Kerala (1973) 4 SCC 225, the Supreme Court
changed its stand and decided

i. That the Preamble of the Constitution is a part of the Constitution.

ii. The Preamble has a significant role in interpretation of the Constitution.

➢ Union of India versus LIC of India

In 1995 in the case of Union of India versus LIC of India, the Supreme Court again upheld
the decision made in Keshav Ananda Bharti Case and treated Preamble as an integral part
of Constitution.

Conclusion

From the above decided case laws, we can safely presume that Preamble which lays down the
basic structure of the Constitution is an Integral Part of the Constitution.

Can Preamble be amended?

In Keshav Ananda Bharti Case, it was decided that Preamble being a part of the Constitution
can be amended like any other provision of the Constitution. Though the amending power in
Article 368 is limited in case of Constitution. The preamble contains the basic elements or
fundamental features of the Constitution. Consequently, amending power cannot be used to
destroy these basic features. Therefore Preamble being a part of Constitution can be amended
but subject to the condition that the basic features in the preamble cannot be removed.

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STRUCTURE

The structure of the Constitution can be either Unitary or Federal.

• Federal Constitution

In a federal setup there is two tier Government. There is a clear division of powers between
the Central and the State Governments. Both of them work independently and does not
interfere in others sphere. The Country like USA is having Federal Structure.

• Unitary Constitution

In a federal setup all powers of the Government are centralized in one Government that is
Central Government. The most famous example of Unitary Constitution is UK.

Whether the Constitution of India is a Federal or Unitary Constitution can be decided by going
through features of both the structures.

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The Federal features of Indian Constitution are as follows:-

The authority is divided into two parts: Central Government at the Centre and
Dual Authority
State Government at the State level.

Powers to make laws have been suitably distributed among the Centre and the
State by way of
Distribution of
Union List - Only Union Government can make laws
Power
State List - Only State Government can make laws Concurrent List - Both Union
and State can make laws

The three pillars of Legal System i.e. Legislature, Executive and Judiciary are all
Supremacy of subordinate to the Constitution and derives their power from the Constitution.
the Constitution None of them should dare to violate provisions of the Constitution and the
dignity of the Constitution must be upheld in every situation.

Independence of The judiciary is kept absolutely independent and does not depend upon
Judiciary Parliament or Executive.

Written and Rigid An important feature of federalism is written and rigid Constitution. The
Constitution amendment of the Constitution in a federal state is deliberately made difficult,
hence rigid.

The Unitary features of Indian Constitution is as follows:-

Citizens are granted only Indian Citizenship and no separate State citizenship.
All citizens of India irrespective of the State in which they are born or reside
Single
enjoy the same rights all over the country. Countries like US, Switzerland and
Citizenship
Australia have dual citizenship that means national citizenship as well as State
citizenship.

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During an emergency the States go into the total control of the Centre. The
Emergency federal structure coverts into a unitary one without a formal amendment of
Powers the Constitution. This kind of transformation is not found in any other
federation.

Centre is stronger than State due to following reasons:- Union List contains
more subjects than the State List.
Strong Centre
More important subjects have been included in the Union List. Will of the
Centre shall prevail over State in case of contradiction in the Concurrent List.

Residuary The residuary power have also been left with the Union List. It means that
Power only Parliament has power to make laws on a new subject matter.

In a federal State usually the States have the right to frame their own
Single
Constitution separate from that of the Centre but in India no such power is
Constitution
given to the States.

Conclusion

From the above it can be concluded that the Constitution of India is neither purely federal nor
purely unitary but is a combination of both. It is a federal Constitution which have a novel and
unique feature of becoming unitary at the time of national emergencies.

PECULIAR FEATURES OF INDIAN FEDERALISM

Indian Constitution differs from the federal systems of the world in certain fundamental
aspects, which are as follows:

• The Mode of Formation: A federal Union, as in the American system, is formed by an

agreement between a number of sovereign and independent States, surrendering a defined
part of their sovereignty or autonomy to a new central organization. But there is an
alternative mode of federation, as in the Canadian system where the provinces of a Unitary
State may be transformed into a federal union to make themselves autonomous. India had a
thoroughly Centralized Unitary Constitution until the Government of India Act, 1935 which
for the first time set up a federal system in the manner as in Canada viz., by creation of
autonomous units and combining them into a federation by one and the same Act.

• Position of the States in the Federation: In a federal system, a number of safeguards are
provided for the protection of State’s rights as they are independent before the formation of

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federation. In India, as the States were not previously sovereign entities, the rights were
exercised mainly by Union, e.g., residuary powers.

• Citizenship etc.: The framers of the American Constitution made a logical division of
everything essential to sovereignty and created a dual polity with dual citizenship, a double
set of officials and a double system of the courts. There is, however, single citizenship in
India, with no division of public services or of the judiciary.

• Residuary Power: Residuary power is vested in the Union. In other words, the Constitution
of India is neither purely federal nor purely unitary. It is a combination of both and is based
upon the principle that “In spite of federalism the national interest ought to be paramount
as against autocracy stepped with the establishment of supremacy of law”.

FUNDAMENTAL RIGHTS

Fundamental rights are the very basic rights that are universally recognized as most essential
for human existence and indispensable for human development. These are required for the
attainment of intellectual, moral, spiritual status of an individual. Articles 12 to 35 contained in
Part III of the Constitution deal with Fundamental Rights. Fundamental Rights are described as
Magna Carta of India. Few fundamental rights are given only to citizens.

Classification of Fundamental Rights

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Article 12- Fundamental Rights available against State and not against private Individual

Fundamental rights are available to individuals against the State. It means it is enforceable
against the State. It is the responsibility of the State to respect and guarantee the fundamental
rights given to an Individual. All the laws should be consistent with the Fundamental Rights.

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Article 13: Laws inconsistent with or in derogation of the fundamental rights

Article 13 states that any law shall be void to the extent of its conflict with fundamental rights.
For this purpose the laws can be divided into two parts Pre-Constitutional Laws and Post-
Constitutional Laws.

Pre-Constitutional Laws Post-Constitutional Laws

• State is prohibited from making any law

• All the pre-constitutional laws which are which contradicts with the Fundamental
inconsistent with the Fundamental Rights will Rights.
become void to the extent they are inconsistent
with the Fundamental Rights. • If any such law is made by the state, it will
be treats as ultra-vires and void to the extent
• (Note: They will become void only after the they are inconsistent with the Fundamental
commencement of the Constitution and are Rights.
not void ab initio)
• (Note: They are void ab initio)

Note: The word ‘Law’ mentioned above will mean:

▪ Permanent Laws - made by Parliament or State Legislature

▪ Temporary Laws - like ordinances

▪ Laws made by Statutory Bodies - Bye Laws, Rules, Regulation, Notification

Earlier it was laid down that Constitutional Amendment is not a law challenged even if they
are inconsistent with Fundamental Rights. But later in Gokal Nath case it was decided that
even a Constitutional amendment would be void to the extent it contradicts with the
fundamental rights. In order to nullify this judgment, the Parliament amendment the
Constitution and added that "Nothing in this article shall apply to any amendment of this
Constitution under article 368". Means the Constitution can be amended even if it contradicts
with the Fundamental Rights.

Conclusion: The present position is that the word "law" does not include a constitutional
amendment and thus there is no restriction on the Parliament's power to amend the
Constitution or Fundamental Rights under Article 368.

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CASE LAWS

S.NO. CASE NAME PROVISONS

The Supreme Court has held that ‘other authorities’ will

include all authorities created by the Constitution or statute on
Electricity Board
1 whom powers are conferred by law and it is not necessary that
Rajasthan v. Mohanlal
the authority should engage in performing government
functions

The Calcutta High Court has held that the electricity authorities
being State within the meaning of Article 12, their action can be
2
Angur Bala Parui judicially reviewed by this Court under Article 226 of the
Constitution of India.

3 University of Madras v. It has also been held that a university is an authority

Shanta Bai

Haroobhai v. State of The Gujarat High Court has held that the President is “State”
4
Gujarat when making an order under Article 359 of the Constitution

A.R. Antualay v. R.S. It was held that a Court can be considered as state under
5
Nayak Article-12 only, if it exercises non-judicial functions

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Supreme Court has pointed out that corporations acting as
instrumentality or agency of government would become ‘State’
under Article 12 if

• The entire share capital of the Corporation is held by

the Government

• The financial assistance of the State is so much as to

meet almost the entire expenditure of the corporation it
would afford some indication of the corporation being
R.D. Shetty v.
impregnated with government character.
International Airports
6
Authority & in Ajay • The corporation enjoys a monopoly status which is
conferred or protected by the State.
Hasia v. Khalid Mujib

• The state exercises deep and pervasive control in

corporations.

• The functions of the corporation are of public

importance and closely related to government
functions,

If a department of government is transferred to a corporation.

AMENDIBILITY OF FUNDAMENTAL RIGHTS

Article 13 provides that any Law (pre/post constitution) will be invalid if the law is against the
Fundamental rights. It provides that, State shall not make any law which takes away, amend or
abridges the Fundamental rights.

The issue came up before the Supreme Court as to whether a Constitutional Amendment by
which a fundamental right is taken away or abridged is also a law within the meaning of
Article 13. The Court in the famous Golaknath case took the view that it includes such an
amendment and, therefore, even a Constitutional amendment would be void to the extent it
takes away or abridges any of the fundamental rights.

Finally in Keshav Anand Bharti v. State of Kerala Supreme Court had held that the
fundamental rights can be affected by Constitutional Amendment provided basic structure of
Constitution is not amended.

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Doctrines to interpret Article 13

Article 13 came up for judicial review in a number of cases and the Courts have evolved
doctrines like doctrine of eclipse, severability, prospective overruling, acquiescence etc. for
interpreting the provisions of Article 13.

Doctrine of Severability Doctrine of Waiver

Doctrine of Eclipse

• Only that part of the law • The pre-constitutional laws

will be declared invalid which which are inconsistent with the
is inconsistent, with the Fundamental Rights shall
• It is not open to citizens to
fundamental rights and the become inoperative just like an
waive any of the fundamental
rest of the law will stand. eclipse.
rights.
• If after separating the • The inconsistent part will
• Fundamental Rights are not
invalid part the valid part is revive only once the conflict has
absolute and are subject to
capable of giving effect to the been cured.
certain reasonable restrictions
legislature's intent, then only
and hence an individual cannot
valid part will survive. • Basically, the inconsistent
chose to get his fundamental
part will become eclipsed or
rights waived, relinquished or
• If after separating invalid dormant and will not be dead
abandoned.
part, valid part is unable to altogether. It will become
survive the Court shall declare effective once the inconsistency
the entire law as invalid. is removed.

Note: There is a dispute regarding whether the doctrine of eclipse is applicable to both Pre-
Constitution and Post-Constitution laws or only to Pre-Constitution laws. Some decisions were
in favour of both laws and some were in favour of Pre-Constitution laws only. There is no
judicial pronouncement yet to conclude this.

RIGHT TO EQUALITY ARTICLE 14-18

ARTICLE 14: EQUALITY BEFORE THE LAW AND EQUAL PROTECTION OF THE LAWS

Article 14 of the Constitution says that “the State shall not deny to any person equality before
the law or the equal protection of the laws within the territory of India”.

Article 14 guarantees to every person the right to equality before the law or the equal protection
of the laws.

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The expression ‘equality before the law’ is a declaration of equality of all persons within the
territory of India, implying thereby the absence of any special privilege in favour of any
individual. The second expression “the equal protection of the laws” implies equal treatment
in equal circumstances. In other words same law shall be applicable to equal and shall not be
applicable to unequal. In other words right to equal treatment in similar circumstances makes
sense. Thus if there is reasonable basis of classification the legislature would be entitled to treat
different classes differently.

Article 14 applies to all persons and is not limited to citizens, A corporation, which is a juristic
person, is also entitled to the benefit of this Article.

Legislative classification

Equals are to be governed by the same laws. But as regards unequals, the same laws are not
complemented.

Legislative classification or distinction is made carefully between persons who are and who are
not similarly situated. Article 14 does not forbid classification or differentiation which rests
upon reasonable grounds of distinction.

The rules with respect to permissible classification as evolved in various decisions have been
summarized by the Supreme Court in Ram Kishan Dalmiya v. Justice Tendulkar, as follows:-

Article 14 forbids class legislation, but does not forbid classification.

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Permissible classification must satisfy two conditions, namely:-

a. It must be founded on an intelligible differentia which distinguishes persons.

b. The differentia must have a relation to the object sought to be achieved by the statute in
question.

• The classification may be founded on different basis, namely geographical, or according to

objects or occupations or the like.

• Even a single individual may be treated a class by himself on account of some special
circumstances or reasons applicable to him and not applicable to others; a law may be
constitutional even though it relates to a single individual who is in a class by himself.

• There is always a presumption in favour of the constitutionality of an enactment and the

burden is upon him who attacks it to show that there has been a clear non-compliance of
the constitutional principles.

ARTICLE 15: PROHIBITION OF DISCRIMINATION ON GROUNDS OF RELIGION ETC.

Article 15(1) prohibits the State from discriminating against any citizen on grounds only of:

(I) Religion
(II) Race
(III) Caste
(IV) Sex
(V) place of birth or
(VI) any of them

Article 15(2) lays down that no citizen shall be subjected to any disability, restriction or
condition with regard to:-

• access to shops, public restaurants, hotels and places of public entertainment; or

• the use of wells, tanks, bathing Ghats, roads and places of public resort, maintained wholly
or partially out of State funds or dedicated to the use of the general public.

Article 15(3) and 15(4) create certain exceptions to the right:-

• Under Article 15(3) the State can make special provision for women and children.

• Article 15(4) permits the State to make special provision for the advancement of—(i)
Socially and educationally backward classes of citizens; (ii) Scheduled casts; and (iii)
Scheduled tribes

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ARTICLE 16: EQUALITY OF OPPORTUNITY IN MATTERS OF PUBLIC EMPLOYMENT

Article 16 guarantees to all citizens’ equality of opportunity in matters relating to employment

or appointment of public office under the State.
However, there are certain exceptions provided in Article. These are as under:-

• Parliament can make a law requiring residential qualifications within that State or Union
Territory prior to such employment or appointment for e.g. - domicile requirements.

• A provision can be made for the reservation of appointments or posts in favour of any
backward class of citizens which in the opinion of the State is not adequately represented
in the services under the State.

• A law shall not be invalid if it provides that the incumbent of an office in connection with
the affair of any religious or denominational institution or any member of the governing
body thereof shall be a person professing a particular religion or belonging to a particular
denomination.

ARTICLE 17: ABOLITION OF UNTOUCHABILITY

Article 17 says that “Untouchability” is abolished and its practice in any form is forbidden. The
enforcement of any disability arising out of “Untouchability” shall be an offence punishable in
accordance with law.

ARTICLE 18: ABOLITION OF TITLES

Article 18 abolish all the titles conferred on various Indian citizens by British government and
the use of those titles is prohibited as it results in creating superior and inferior classes of
citizens. No title, not being a military or academic distinction, shall be conferred by the State.
No citizen of India shall accept any title from any foreign State.

RIGHT TO FREEDOM [ARTICLES 19 TO 22]

ARTICLE 19: PROTECTION OF CERTAIN RIGHTS REGARDING FREEDOM OF SPEECH

ETC

Article 19 guarantees the following six freedoms to the citizens of India:

1. Right to freedom of speech and expression.

2. Right to assemble peacefully and without arms.

3. Right to form associations or unions.

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4. Right to move freely throughout the territory of India.

5. Right to reside and settle in any part of territory of India.

6. Right to practice any profession or to carry on any trade, business or occupation.

It may be noted that the aforesaid rights are not absolute and hence reasonable restrictions may
be imposed on them. In determining the reasonableness of statute, the court would see both the
nature of the restrictions and procedures prescribed by the statute for enforcing the restrictions
on the individual freedom.

The reasonableness of restriction has to be determined in an objective manner and from the
point of view of the interest of the general public and not from the point of view of the persons
upon whom the restrictions are imposed. The court is required to ascertain the reasonableness
of the restrictions and not of the law which permits the restrictions.

[Articles 19(1)(a)] Right to freedom of Speech and Expression

Freedom of speech and expression is a very important aspect of democracy, the freedom of
speech and expression means the right to express one’s convictions and opinions freely by
word of mouth, writing, printing, pictures or any other mode.

The right speech and expression includes right to make good or bad speech. One may express
oneself even by signs. It also includes the expression of idea through dramatic performance,
cinematographic and any other mode of expression.

The freedom cannot be misused, i.e. it cannot be used to disturb public order or contempt of
court cannot be done.

➢ Case Law Menaka Gandhi v Union of India

In Menaka Gandhi v Union of India, it was decided that the freedom of speech and
expression includes the freedom of press and thus imposition of pre-censorship on
publication of views, ideas, analysis, etc. is violative of freedom of speech and expression.

➢ Case Law Bijoe Emmanuel v State of Kerala

In the case of Bijoe Emmanuel v State of Kerala, it was held that the right to freedom of
speech and expression also includes the right to remain silent. It was decided that a person
cannot be compelled to sing a National Anthem if he does not want to do so because of
some religious objections.

➢ Case Law K.A. Abbas v UOI

Dramatic performance is also form of speech and expression. In K.A. Abbas v UOI, the
Supreme Court held that Censorship of films including pre-censorship is justified under
Article 19 but with reasonable restrictions.

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Permissible Restrictions

• Sovereignty (autonomy) and integrity (honors and pride) of India

• Security of the State

• Friendly relations with foreign States

• Public order

• Decency and Morality

• Contempt of Court

• Defamation (Offence or Slander)

• Incitement (provocation or encouragement) to an offence.

[Article 19(1)(b)] Right to Assemble Peacefully and Without Arms

It is the right to citizens to assemble peacefully and lawfully without arms. An unlawful
assembly can be dispersed. However reasonable restrictions may be imposed on this right in
the interest of:

• The sovereignty and integrity of India.

• Public order.

[Article 19(1)(c)] Right to Form Association and Union

Every person has a right to become or not to become a member of any union.

➢ Case Law- Sitharamachary v Deputy Inspector of School

Right to form associations and union is guaranteed so that the people can form a group of
people having the similar view. In Sitharamachary v Deputy, Inspector of School, it was
held that this right necessarily implies a right not to be a member of an association. Thus, no
one can be compelled to become member of an association.
The right is subject to reasonable restrictions which may be imposed in an interest of:

• Sovereignty and integrity of India.

• Public order

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• Morality

[Articles 19(1)(d)] Right to Move Freely Throughout the Territory of India

Right to move freely is confirmed only to the territory of India and it cannot be extended to
travel abroad. This right can be restricted to:

• Maintain public order or in national interest.

• For the protection of interest of any scheduled tribe.

[Article 19(1)(e)] Right to Reside and Settle in Any Part of Territory of India

The right to freedom of residence is intended to remove internal barriers within the territory of
India to enable every citizen to travel freely and settle down in any part of the State or Union
territory.

This freedom is also subject to reasonable restrictions which may be imposed:

• In the interest of general public.

• For the protection of interest of any scheduled tribe.

[Article 19(1)(g)] Right to Practice Any Profession or Carry on Any Trade, Business or
Occupation

Article 19 (1) (g) provides that all citizens shall have the right to practice any profession or to
carry on any occupation, trade or business.
This right is also subject to reasonable restrictions which may be imposed:

• In the interest of the general public.

• To prescribe professional or technical qualification necessary for carrying on any

profession, trade or business. For example, Membership of ICSI to work as a CS.

• To enable the State to carry on any trade or business to the exclusion of private citizens.
This means that the creation of State monopoly shall not be considered to deprive a citizen
of the freedom of trade and occupation.

➢ Case Law- R.C. Cooper v Union of India

In one of the leading case of R.C. Cooper v Union of India, the facts discussed are given
below:

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‘Banking Business will be done only by the state and not by any private person’ was
challenged before the Supreme Court. However the Supreme Court rejected the petition
and held that the law is valid as State can restrict a person and has got the power to create a
monopoly in its favour.

Monopoly

The Supreme Court’s decision in Chintamana Rao v. State of M.P., AIR 1951 S.C. 118; is a
leading case on the point where the constitutionality of Madhya Pradesh Act was challenged.
The State law prohibited the manufacture of bidis in the villages during the agricultural season.
No person residing in the village could employ any other person nor engage himself, in the
manufacture of bidis during the agricultural season. The object of the provision was to ensure
adequate supply of labour for agricultural purposes. The bidi manufacturer could not even
import labour from outside, and so, had to suspend manufacture of bidis during the
agricultural season. Even villager’s incapable of engaging in agriculture, like old people,
women and children, etc., who supplemented their income by engaging themselves
manufacturing bidis were prohibited without any reason. The prohibition was held to be
unreasonable.

However, after the Constitutional (Amendment) Act, 1951, the State can create a monopoly in
favour of itself and can compete with private traders. It has been held in Assn. of Registration
Plates v. Union of India, (2004) SCC 476 that the State is free to create monopoly in favour of
itself. However the entire benefit arising therefrom must ensure to the benefit of the State and
should not be used as a clock for conferring private benefit upon a limited class of persons.

ARTICLE 20: PROTECTION IN RESPECT OF CONVICTION FOR OFFENCES

Article 20 guarantees to all persons, whether citizens or non-citizens, three rights. They are as
follows:

1. Protection against ex-post facto laws: Ex post facto laws are laws which punish what had
been unlawful when done. If a particular act was not an offence according to the law of the
land at the time when the person did that act, then he cannot be convicted under a law
which with retrospective declares that act as an offence. Even the penalty for the
commission of an offence cannot be increased with retrospective effect.

Thus, the meaning of the above two provisions is that so far as criminal law creates a new
offence or increases the penalty, it shall be applicable only to those offences which are
committed after its coming into force and cannot cover those offences which have already
been committed in the past.

Exception: Protection under this Article is available only for offences and their punishments
under criminal law and not for any civil liability, where retrospective law can be passed.

2. Protection against double jeopardy: No person can be prosecuted and punished for the
same offence more than once. It is however, to be noted that the conjunction and is used

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between the words prosecuted and punished and therefore if a person has been let off after
prosecution, without being punished, he can be prosecuted again.

3. Protection against self-incrimination: A person accused of any offence cannot be

compelled to be a witness against himself. In other words, an accused cannot be compelled
to state anything which goes against him.

But it is to be noted that a person is entitled to this protection only when all three conditions are
fulfilled:

• That he must be accused of an offence.

• That there must be compulsion to be witness.

• Such compulsion should result in his giving evidence against himself.

Article 20 - It guarantees 3 protections-

i. Double Jeopardy - No person can be compelled to be punished twice for the same offence.
E.g. To be hanged

ii. Self-Incrimination - No person can be compelled to be witness against himself. In other

words, no accused can be forced to confess or admit his offence.

iii. No ex post facto laws in criminal Law - No retrospective effect to any criminal law.

• Civil Law - They can be made both with prospective or retrospective effect i.e. they can be
applied from the day of formation or from earlier date also.

• Criminal Law - They are always of prospective nature i.e. they will be applied from day of
formation and not from earlier date.

ARTICLE 21: RIGHT TO LIFE AND PERSONAL LIBERTY

Article 21 of the constitution confers on every person the fundamental right to life and personal
liberty. It says that “No person shall be deprived of his life or personal liberty except
according to the procedure established by law.”

Every person has a right to life which shall not be denied by the state. However if due
procedure is followed then the right to life can be denied. So, this is not an absolute right. For
example, Imprisonment or death sentence to criminal.

Liberty means dignity of a person, so right to life is available with dignity.

Thus Article 21 seeks to prevent encroachment upon personal liberty by the executive except in
accordance with law and in conformity with the provisions of the law. The scope, application
and effect of Article 21 may be well understood through the following important judicial
decisions:

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➢ Case Law- Philips Alfred Malvin v Y.J. Gonsalvis
It was held that right to life includes those things which make life meaningful. For instance,
the right of a couple to adopt a son.

➢ Case Law- A.K. Gopalan v State of Madras

In this case a very narrow meaning was given to the expression personal liberty confining it
to the liberty of the persons, i.e. of the body of a person.

➢ Case Law- Kharak Singh v State of U.P

That the expression “personal liberty” is not limited to bodily restraint or to confinement to
prison only is well illustrated by Kharak Singh v State of U.P. In this case, the question
raised was of the validity of the police regulation authorizing the police to conduct what are
called domiciliary visits against bad characters and to have surveillance over them. The
court held that such visits were an invasion on the part of the police, of the sanctity (purity
or holiness) of a man’s house and interruption into his personal security and his right to
sleep, and therefore violative of personal liberty of the individual, unless authorized by a
valid law.

➢ Case Law- Satwant Singh Sawhney v Assistant Passport Officer, New Delhi

In this case it was held that right to travel abroad is included within the expression
‘personal liberty’ and therefore, no person can be deprived of his right to travel except
according to the procedure established by law. Since a passport is essential for the
enjoyment of this right, the denial of a passport amounts to deprivation of personal liberty.
At present, personal liberty includes various other liberties like right to bail, public interest,
litigation, right to free legal aid, right to speedy trial, etc. The expression “procedures
establish law” means procedure laid down by statute or prescribed by the law of the State.

ARTICLE 21A: RIGHT TO EDUCATION

This was introduced by the Constitution (Eighty sixth Amendment) Act, 2002. According to
this, the State shall provide free and compulsory education to all children of the age of six to
fourteen years in such manner as the State may, by law, determine.
<

ARTICLE 22: PROTECTION AGAINST ARBITRARY ARREST AND DETENTION

Article 22 provides the following safeguards against arbitrary arrest and detention: -

i. A person who is arrested cannot be detained in custody unless he has been informed, as
soon as may be, of the grounds for such arrest.

ii. Such person shall have the right to consult and to be defended by a legal practitioner of his
choice.

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iii. A person who is arrested and detained must be produced before the nearest magistrate
within a period of twenty-four hours of such arrest, excluding the time of journey. And
such a person shall not be detained in custody beyond twenty-four hours without the
authority of magistrate.

However, Article 22 does not apply to following persons: -

• alien enemies,

• person arrested or detained under preventive detention law.

,

Preventive detention

Preventive detention means detention of a person without trial. The object of preventive
detention is not to punish a person for having done something but to prevent him from doing
it.

Safeguards against Preventive Detention

Article 22 contains following safeguards against preventive detention: -

Such a person cannot be detained for a longer period than three months unless an Advisory
Board constituted of persons who are or have been or are qualified to be High Court judges has
reported, before the expiration of the said period of three months that there is, in its opinion
sufficient cause for such detention. The authority ordering the detention of a person under the
preventive detention law shall communicate to him, as soon as may be, the grounds on which
the order for his detention has been made, and afford him the earliest opportunity of making
the representation against the order.It may, however, be noted that while the grounds for
making the order are to be supplied, the authority making such order is not bound to disclose
those facts which it considers to be against the public interest.

ARTICLES 23: PROHIBITION OF TRAFFIC IN HUMAN BEINGS AND FORCED LABOUR

Article 23 imposes a complete ban on traffic in human beings, federal and other similar forms
of forced labour. The contravention of these provisions is declared punishable by law.
‘Traffic’ in human beings means to deal in men and women like goods, such as to sell or let or
otherwise dispose them off. ‘Begar’ means involuntary work without payment.

ARTICLE 24: PROHIBITION OF EMPLOYMENT OF CHILDRENIN FACTORIES ETC

Article 24 prohibits the employment of children below the age of fourteen in any factory or
mine.

ARTICLE 25: RIGHT TO FREEDOM OF RELIGION

Article 25 gives to every person the freedom of conscience, and the right freely to profess
practice and propagate religion. But this freedom is subject to restrictions imposed by the State
on the grounds of-public order, morality and health.

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ARTICLE 26: FREEDOM TO MANAGE RELIGIOUS AFFAIRS

It grants to every religious denomination or any sect thereof the right:

• To establish and maintain institutions of religious and charitable purposes;

• To manage its own affairs in matters of religion;

• To own and acquire movable and immovable property; and

• To administer such property in accordance with law.

All these rights are subject to public order, morality

ARTICLE 27: FREEDOM AS TO PAYMENT OF TAX FOR THE PROMOTION OF ANY

PARTICULAR RELIGION

According to Article 27, no person can be compelled to pay any taxes, the proceeds of which
are specially appropriated in payment of expenses for the promotion or maintenance of any
particular religion or religious denomination.

ARTICLE 28: FREEDOM AS TO ATTENDANCE AT RELIGIOUS INSTRUCTION OR

RELIGIOUS WORSHIP IN EDUCATIONAL INSTITUTIONS

Article 28 states that no religious instruction can be provided in any educational institution
wholly maintained out of State funds. However, this prohibition does not extend to an
educational institution which is administered by the State but has been established under any
endowment or trust which requires that religious instruction shall be imparted in such
institution.

ARTICLES 29: PROTECTION OF INTERESRS OF MINORITIES

Minority- The word ‘minority’ has not been defined in the Constitution. The Supreme Court in
D.A.V. College, Jullundur v. State of Punjab seems to have stated the law on the point. It said
that minority should be determined in relation to a particular impugned legislation. The
determination of minority should be based on the area of operation of a particular piece of
legislation. If it is a State law, the population of the State should be kept in mind and if it is a
Central Law the population of the whole of India should be taken into account.

Article 29 guarantees two rights: -

Any section of the citizens residing in the territory of Indian or any part thereof having a
distinct language, script or culture of its own has the right of conserve the same.

No citizen can be denied admission into any educational institution maintained by the State or
receiving aid out of State funds on grounds only of religion, race, caste, language, or any of
them.

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An exception is made to this right to the effect that if a special provision is made for the
admission of persons belonging to educationally or/and socially backward classes or
scheduled castes or scheduled tribes it shall be valid.

ARTICLE 30: RIGHT OF MINORITIES TO ESTABLISH AND ADMINISTER

EDUCATIONAL INSTITUTIONS

All minorities, whether based on religion or on language, shall have the right to establish and
administer educational institutions of their choice.

The State cannot, in granting aid to educational institutions, discriminate against any
educational institution on the ground that it is under the management of a minority, whether
based on religion or language.

CASE LAWS

S.NO. CASE NAME PROVISONS

It was held that any community—religious or linguistic, which

is numerically less than 50 percent of the population of that
State, is a minority within the meaning of Article 30. The
DAV College v. State
1 expression minority in Article 30(1) is used as distinct from
of Punjab,
‘Any sections of citizens’ in Article 29(1) which lends support
to the view that Article 30(1) deals with national minorities or
minorities recognized in the context of the entire nation.

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Article 30(1) of the Constitution does not permit, minorities to

indulge in commercialization of education in the garb of
constitutional protection. For the application of this right
minority institutions are divided into three classes: (i)
institution which neither seek aid nor recognition from the
Delhi High Court in State; (ii) institution that seek aid from the State; and (iii)
2 Delhi Abibhavak institutions which seek recognition but not aid. While the
Mahasangh v. U.O.I institutions of class (i) cannot be subjected to any regulations
except those emanating from the general law of the land such
as labour, contract or tax laws, the institutions in classes (ii)
and (iii) can be subjected to regulations pertaining to the
academic standards and to the better administration of the
institution, in the interest of that institution itself.

While interpreting Article 30, the Supreme Court held that

minority includes both linguistic and religious minorities and
for determination of minority status, the unit would be the
State and not whole of India. Further, the right of minorities to
T.M.A. Pai Foundation establish and administer educational institutions (including
3
v. State of Karnataka professional education) was not absolute and regulatory
measures could be imposed for ensuring educational standards
and maintaining excellence thereof. Right of minorities
included right to determine the procedure and method of
admission and selection of students, which should be fair and
transparent and based on merit.

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ARTICLE 31: RIGHT TO PROPERTY

Right to property is no more a fundamental right which was previously guaranteed under Part
III of the Constitution by Article 31. But the right to property has been inserted by Article 300A
under Part XII of the Constitution. Article 300A reads — “No person shall be deprived of his
property save by authority of law.”

Article 31A: Saving of Laws Providing for Acquisition of Estates etc.

Then follows Article 31A which is an exception to the right of equality as guaranteed in Article
14 and to the six freedoms as guaranteed in Article 19, if they come into conflict with any law
mentioned in Article 31A. Such laws are those which provide for—

i. The acquisition by the State of any estate or any rights therein or the extinguishment or
modification of any such rights. ‘Estate' here means the property included within that
expression according to the land tenures applicable in the area where it is situated. And
‘rights' in relation to an estate means proprietary and other intermediary rights. In short,
such laws are those which related to agrarian reforms, or

ii. The taking over of the management of any property by the State for a limited period in the
public interest or in order to secure the proper management of the property, or

iii. The amalgamation of two or more corporations either in the public interest or in order to
secure the proper management of any of the corporations, or

iv. The extinguishment or modification of any rights of managing agents, secretaries and
treasurers, managing directors or managers of corporations, or of any voting rights of
shareholders thereof, or

v. The extinguishment or modification of any rights accruing by virtue of any agreement,

lease or license for the purpose of searching for, or winning any mineral or mineral oil or
the premature termination or cancellation of any such agreement, lease or license.

However, limitations have been imposed with respect to the laws relating to the acquisition of
the estates. They are:

a. If such a law is made by a State Legislature then it cannot be protected by the provisions of
Article 31A unless such law having been reserved for the consideration of the President has
received his assent, and

b. If the law provides for the acquisition of (i) any land within the ceiling limit applicable in
that area, (ii) any building or structure standing thereon or apartment thereto, it (law) shall
not be valid unless it provides for payment of compensation at a rate which shall not be less
than the market value thereof. This provision, however, has been amended by the
Constitution (29th Amendment) Act.

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Article 31B: Validation of certain Acts and Regulations

Article 31B protects certain laws against attack on the ground of violation of any fundamental
rights. The laws so protected are specified in the Ninth Schedule to the Constitution. These
laws also relate mainly to land reforms.

Article 31C: Saving of Laws giving effect to certain Directive Principles

Article 31C added by 25th Amendment of the Constitution lifted to the constitutional
limitations on the powers of State, imposed by Article 14 (equality before law) and Article 19
(freedoms) as regards law giving effect to the policy of the State towards securing the principles
specified in clause (b) or clause (c) of Article 39. These principles are—

i. that the ownership and control of the maternal resources of the community are so
distributed as best to sub serve the common good, and

ii. that the operation of the economic system does not result in the concentration of wealth and
means of production to the common detriment.

The issue whether the 24th, 25th and 29th Amendments made by Parliament were valid or not
was raised in the Supreme Court. In [Kesavananda Bharti v. State of Kerala, (1973) S.C.C. 225],
the majority judgment (of a full bench of 13 judges) upheld the power of Parliament to amend
the Constitution provided it did not alter its basic framework.

By the 42nd Amendment in Article 31-C for the words the principles specified in clause (a) or
clause (c) of Article 39 the words in all or any of the principles laid down in Part IV were
substituted. But this substitution was held to be void by the Supreme Court in Minerva Mills v.
Union of India, (1980) 2 SCC 591.

ARTICLE 32: RIGHT TO CONSTITUTIONAL REMEDIES

Article 32 guarantees the enforcement of Fundamental Rights.

Article 32 makes it a fundamental right that a person whose fundamental right is violated has
the right to move the Supreme Court by appropriate proceedings for the enforcement of this
fundamental right.

A person need not first exhaust the other remedies and then go to the Supreme Court. On the
other hand, he can directly raise the matter before highest Court of the land and the Supreme
Court is empowered to issue directions or orders or writ.

The right guaranteed by Article 32 cannot be suspended except as provided in the Constitution.
Constitution does not contemplate such suspension except by way of President’s order under
Article 359 when a proclamation of Emergency is in force.

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Supplementary provisions

Articles 33-35 — contain certain supplementary provisions.

Article 33 authorizes Parliament to restrict or abrogate the application of fundamental rights in

relation to members of armed forces, para-military forces, police forces and analogous forces.

Article 34 is primarily concerned with granting indemnity by law in respect of acts done during
operation of martial law. The Constitution does not have a provision authorizing proclamation
of martial law. Article 34 says that Parliament may by law indemnify any person in the service
of the Union or of State or any other person, for an act done during martial law.

Article 35 provide that wherever Parliament has by an express provision been empowered to
make a law restricting a fundamental right Parliament alone can do so, (and not the state
legislature).

Amendability of the Fundamental Rights

A. Since 1951, questions have been raised about the scope of amending process contained in
Article 368 of the Constitution. The basic question raised was whether the Fundamental
Rights are amendable. The question whether the word ‘Law' in Clause (2) of Article 13
includes amendments or not or whether amendment in Fundamental Rights guaranteed by
Part III of the Constitution is permissible under the procedure laid down in Article 368 had
come before the Supreme Court in Shankari Prasad v. Union of India, A.I.R. 1951 S.C. 458,
in 1951 where the First Amendment was challenged. The Court held that the power to
amend the Constitution including the Fundamental Rights, was contained in Article 368
and that the word ‘Law' in Article 13(2) did not include an amendment to the Constitution
which was made in exercise of constituent and not legislative power. This decision was
approved by the majority judgement in Sajjan Singh v. State of Rajasthan, A.I.R. 1965 S.C.
845. Thus, until the case of I.C. Golak Nath v. State of Punjab, A.I.R. 1967, S.C. 1643, the
Supreme Court had been holding that no part of our Constitution was unamendable and
that Parliament might, by passing a Constitution Amendment Act, in compliance with the
requirements of Article 368, amend any provision of the Constitution, including the
Fundamental Rights and Article 368 itself.

B. But, in Golak Nath's case, a majority overruled the previous decisions and held that the
Fundamental Rights are outside the amendatory process if the amendment takes away or
abridges any of the rights. The majority, in Golak Nath's case, rested its conclusion on the
view that the power to amend the Constitution was also a legislative power conferred by
Article 245 by the Constitution, so that a Constitution Amendment Act was also a ‘law'
within the purview of Article 13(2).

C. To nullify the effect of Golak Nath's case, Parliament passed the Constitution (Twenty-
Fourth Amendment) Act in 1971 introducing certain changes in Article 13 and Article 368,
so as to assert the power of Parliament (denied to it in Golak Nath's case) to amend the
Fundamental Rights. The Constitutional validity of the 24th Amendment was challenged in
the case of Kesavanand Bharti v. State of Kerala, A.I.R. 1973 S.C. 1461. The Supreme Court
upheld the validity of 24th Constitutional Amendment holding that Parliament can amend

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any Part of the Constitution including the Fundamental Rights. But the Court made it clear
that Parliament cannot alter the basic structure or framework of the Constitution. In Indira
Gandhi v. Raj Narain, AIR 1975 S.C. 2299, the appellant challenged the decision of the
Allahabad High Court who declared her election as invalid on ground of corrupt practices.
In the meantime, Parliament enacted the 39th Amendment withdrawing the control of the
S.C. over election disputes involving among others, the Prime Minister. The S.C. upheld the
challenge and held that democracy was an essential feature forming part of the basic
structure of the Constitution. The exclusion of judicial review in Election disputes in this
manner damaged the basic structure. The doctrine of ‘basic structure' placed a limitation on
the powers of the Parliament to introduce substantial alterations or to make a new
Constitution.

To neutralize the effect of this limitation, the Constitution (Forty-Second Amendment) Act,
1976 added to Article 368 two new clauses. By new clause (4), it has been provided that no
amendment of the Constitution made before or after the Forty-Second Amendment Act shall be
questioned in any Court on any ground. New clause (5) declares that there shall be no
limitation whatever on the Constitutional power of parliament to amend by way of addition,
variation or repeal the provisions of this Constitution made under Article 368.

The scope and extent of the application of the doctrine of basic structure again came up for
discussion before the S.C. in Minerva Mill Ltd. v. Union of India, (1980) 3 SCC, 625. The
Supreme Court unanimously held clauses (4) and (5) of Article 368 and Section 55 of the 42nd
Amendment Act as unconstitutional transgressing the limits of the amending power and
damaging or destroying the basic structure of the Constitution.

➢ In Waman Rao v. Union of India, (1981) 2 SCC 362 the Supreme Court held that the
amendments to the Constitution made on or after 24.4.1973 by which Ninth Schedule was
amended from time to time by inclusion of various Acts, regulations therein were open to
challenge on the ground that they, or any one or more of them are beyond the constitutional
power of Parliament since they damage the basic or essential features of the Constitution or
its basic structure. [See also Bhim Singh Ji v. Union of India (1981)1 SCC 166.]

➢ In L. Chandra Kumar v. Union of India (1997) 3 SCC 261 the Supreme Court held that
power of judicial review is an integral and essential feature of the Constitution constituting
the basic part, the jurisdiction so conferred on the High Courts and the Supreme Court is a
part of in- violable basic structure of the Constitution.

➢ In I.R. Coelho v. State of T.N., (2007) 2 SCC 1, Article 31-B as introduced by the Constitution
(First amendment) Act 1951 was held to be valid by the Supreme Court. The fundamental
question before the nine Judge Constitution Bench was whether on or after 24.4.1973 (i.e.
when the basic structure of the Constitution was propounded) it is permissible for the
Parliament under Article 31-B to immunize legislations from fundamental rights by
inserting them into the Ninth Schedule and if so what is the effect on the power of judicial
review of the court. The challenge was made to the validity of the Urban Land (Ceiling and
Regulation) Act, 1976 which was inserted in the Ninth Schedule.

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The Supreme Court held that all amendments to the Constitution made on or after 24.4.1973 by
which Ninth Schedule is amended by inclusion of various laws therein shall have to be tested
on the touch stone of the basic or essential features of the Constitution as reflected in Article 21
read with Article 14, Article 19 and the principles under lying them. So also, any law included
in Schedule IX does not become part of the Constitution. They derive their validity on account
of being included in Schedule IX and this exercise is to be tested every time it is undertaken. If
the validity of any Ninth Schedule law has already been upheld by this Court, it would not be
open to challenge such law on the principles declared in this judgment. However, if a law held
to be violative of any rights of Part III is subsequently incorporated in the Ninth Schedule after
24.4.1973 such a violation shall be open to challenge on the ground that it destroys or damages
the basic structure doctrine.

➢ In Glanrock Estate (P) Ltd. v. State of Tamil Nadu (2010) 10 SCC 96, the Supreme Court
upheld constitutional validity of Constitution (Thirty-fourth) Amendment Act, 1974. By
Constitution (Thirty-fourth) Amendment Act, 1974 Gudalur Janman Estates (Abolition &
Conversion into Ryotwari) Act, 1969 was inserted in the Ninth Schedule as item 80. It was
alleged that the 1969 Act violated the principle of equality because by the T N Land
Reforms (Fixation of Ceiling on Land) Act, 1961 only ceiling surplus forest lands vested in
the State but by the 1969 Act all forests vested in the State. The constitutional amendment
was further challenged on the ground that it validated the 1969 Act by inserting it in the
Ninth Schedule in spite of Section 3 of the 1969 Act having been declared as
unconstitutional in Balmadies case, (1972) 2 SCC 133, thereby violating the principles of
judicial review, rule of law and separation of powers. (Section 3 had been declared
unconstitutional in Balmadies case because it could not be shown how vesting of forest
lands was an agrarian reform.)

Upholding the constitutional validity of the amendment, the Supreme Court held:

None of the facets of Article 14 have been abrogated by the Constitution (Thirty fourth
Amendment) Act, 1974, which included the 1969 Act in the Ninth Schedule. When the 1969
Act was put in the Ninth Schedule in1 974, the Act received immunity from Article 31(2)
with retrospective effect.

It is only that breach of the principle of equality which is of the character of destroying the
basic framework of the Constitution which will not be protected by Article 31-B. If every
breach of Article 14, however egregious, is held to be unprotected by Article 31-B, there
would be no purpose in protection by Article 31-B.

In the present case, not even an ordinary principle of equality under Article 14, leave aside
the egalitarian equality as an overarching principle, is violated. Even assuming for the sake
of argument that Article 14 stood violated, even then the 1969 Act in any event stood
validated by its insertion in the Ninth Schedule vide the Constitution (Thirty-fourth
Amendment) Act, 1974.There is no merit in the submission that the Constitution (Thirty
fourth Amendment) Act, 1974 by which the 1969 Act was inserted in the Ninth Schedule as
item 80 seeks to confer naked power on Parliament and destroys basic features of the
Constitution, namely, judicial review and separation of powers as well as rule of law.

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The doctrine of basic structure provides a touchstone on which validity of the constitutional
amendment Act could be judged. Core constitutional values/ overarching principles like
secularism; egalitarian equality etc. fall outside the amendatory power under Article 368 of
the Constitution and Parliament cannot amend the constitution to abrogate these principles
so as to rewrite the constitution.
,,,

DIRECTIVE PRINCIPLES OF STATE POLICY

The Sub-committee on Fundamental Rights constituted by the Constituent Assembly had

suggested two types of Fundamental Rights — one which can be enforced in the Courts of law
and the other which because of their different nature cannot be enforced in the law Courts.
Later on, however, the former was put under the head ‘Fundamental Rights' as Part III which
we have already discussed and the latter were put separately in Part IV of the Constitution
under the heading ‘Directive Principles of State Policy' which are discussed in the following
pages.

The Articles included in Part IV of the Constitution (Articles 36 to 51) contain certain Directives
which are the guidelines for the future Government to lead the country. Article 37 provides that
the ‘provisions contained in this part (i) shall not be enforceable by any Court, but the
principles therein laid down are nevertheless (ii) fundamental in the governance of the country
and it shall be the duty of the state to apply these principles in making laws. The Directives,
however, differ from the Fundamental Rights contained in Part-III of the Constitution or the
ordinary laws of the land in the following respects:

i. The Directives are not enforceable in the courts and do not create any justiciable rights
in favour of individuals.

ii. The Directives require to be implemented by legislation and so long as there is no law
carrying out the policy laid down in a Directive neither the state nor an individual can
violate any existing law.

iii. The Directives per-se does not confer upon or take away any legislative power from the
appropriate legislature.

iv. The courts cannot declare any law as void on the ground that it contravenes any of the
Directive Principles.

v. The courts are not competent to compel the Government to carry out any Directives or
to make any law for that purpose.

vi. Though it is the duty of the state to implement the Directives, it can do so only subject
to the limitations imposed by the different provisions of the Constitution upon the
exercise of the legislative and executive power by the state.

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Conflict between a Fundamental Right and a Directive Principle

The declarations made in Part IV of the Constitution under the head ‘Directive Principles of
State Policy' are in many cases of a wider import than the declarations made in Part III as
‘Fundamental Rights'. Hence, the question of priority in case of conflict between the two classes
of the provisions may easily arise.

What will be the legal position if a law enacted to enforce a Directive Principle violates a
Fundamental Right?

Initially, the Courts adopted a strict view in this respect and ruled that a Directive Principle
could not override a Fundamental Right, and in case of conflict between the two, a
Fundamental Right would prevail over the Directive Principle. When the matter came before
the Supreme Court in State of Madras v. Champakram Dorairajan, AIR 1951 S.C. 226, where the
validity of a Government order alleged to be made to give effect to a Directive Principle was
challenged as being violative of a Fundamental Right, the Supreme Court made the observation
that:

“The Directive Principles of State Policy have to conform to and run as subsidiary to the
chapter of Fundamental Rights.”

The Court ruled that while the Fundamental Rights were enforceable, the Directive Principles
were not, and so the laws made to implement Directive Principles could not take away
Fundamental Rights.

The Supreme Court also pointed out that looking at Directive Principles, we find as was
envisaged by the Constitution makers, that they lay down the ideals to be observed by every
Government to bring about an economic democracy in this country. Such a democracy actually
is our need and unless we achieve it as soon as possible, there is a danger to our political and
constitutional democracy of being overthrown by undemocratic and unconstitutional means.

Important Directive Principles:

The important Directive Principles are enumerated below:

a. State to secure a social order for the promotion of welfare of the people:

1. The State must strive to promote the welfare of the people by securing and protecting as
effectively as it may a social order in which justice, social, economic and political should
inform all the institutions of the national life (Article 38).

2. The State shall, in particular, strive to minimize the inequalities in income and endeavor to
eliminate inequalities in status, facilities, and opportunities, not only amongst individuals
but also among groups of people residing in different areas or engaged in different
vocations. (introduced by Constitution 44th Amendment Act).

b. Certain principles of policy to be followed by the State. The State, particularly, must direct
its policy towards securing:

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i. that the citizens, men and women equally, have the right to an adequate means of
livelihood;

ii. that the ownership and control of the material resources of the community are so
distributed as best to sub serve the common goods;

iii. that the operation of the economic systems does not result in the concentration of
wealth and means of production to the common detriment;

iv. equal pay for equal work for both men and women;

v. that the health and strength of workers and children is not abused and citizens are not
forced by the economic necessity to enter a vocation unsuited to their age or strength

vi. that childhood, and youth are protected against exploitation and against moral and
material abandonment (Article 39).

bb. the State shall secure that the operation of legal system promotes justice on a basis of
equal opportunity, and shall, in particular provide free legal aid, by suitable legislation or
schemes or in any other way, to ensure that opportunities for securing justice are not denied to
any citizen by reason of economic or other disabilities (Article 39A).

c. The State must take steps to organize the Village Panchayats and enable them to function as
units of self-government (Article 40).

d. Within the limits of economic capacity and development the State must make effective
provision for securing the right to work, to education and to public assistance in case of
unemployment, old age, etc. (Article 41).

e. Provision must be made for just and humane conditions of work and for maternity relief
(Article 42).

f. The State must endeavor to secure living wage and good standard of life to all types of
workers and must endeavor to promote cottage industries on an individual of co-operative
basis in rural areas (Article 43).

(ff) The State take steps, by suitable legislation or in any other way, to secure the participation
of workers in the management of undertakings, establishments or other organizations engaged
in any industry (Article 43A).

g. The State must endeavor to provide a uniform civil code for all Indian citizens (Article 44).

h. Provision for free and compulsory education for all children up to the age of fourteen years
(Article 45).

i. The State must promote the educational and economic interests of Scheduled Castes,
Scheduled Tribes and other weaker sections (Article 46).

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j. The State must regard it one of its primary duties to raise the level of nutritional and the
standard of living and to improve public health and in particular it must endeavor to bring
about prohibition of the consumption, except for medicinal purposes, in intoxicating drinks
and of drugs which are injurious to health (Article 47).

k. The State must organize agriculture and animal husbandry on modern and scientific lines
and improve the breeds and prohibit the slaughter of cows and calves and other milch and
draught cattle (Article 48).

(kk) The State shall endeavor to protect and improve the environment and to safeguard the
forests and wild life of the country (Article 48A).

l. Protection of monuments and places and objects of national importance is obligatory upon
the State (Article 49).

m. The State must separate executive from judiciary in the public services of the State (Article
50).

n. In international matters the State must endeavor to promote peace and security, maintain
just and honourable relations in respect of international law between nations, treaty
obligations and encourage settlement of international disputes by arbitration (Article 51).

FUNDAMENTAL DUTIES

Article 51A imposing the fundamental duties on every citizen of India was inserted by the
Constitution Forty- second Amendment) Act, 1976.

The objective in introducing these duties is not laid down in the Bill except that since the duties
of the citizens are not specified in the Constitution, so it was thought necessary to introduce
them.

These Fundamental Duties are:

a. To abide by the constitution and respect its ideals and institutions, the National Flag
and the National Anthem;

b. To cherish and follow the noble ideals which inspired our national struggle for freedom;

c. To uphold and protect the sovereignty, unity and integrity of India;

d. To defend the country and render national service when called upon to do so;

e. To promote harmony and the spirit of common brotherhood amongst all the people of
India transcending religious, linguistic and regional or sectional diversities; to renounce
practices derogatory to the dignity of women;

f. To value and preserve the rich heritage of our composite culture;

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g. To protect and improve the natural environment including forests, lakes, rivers and
wild life, and to have compassion for living creatures;

h. To develop the scientific temper, humanism and the spirit of inquiry and reform;

i. To safeguard public property and to abjure violence;

j. To strive towards excellence in all spheres of individual and collective activity so that
the nation constantly rises to higher levels of endeavor and achievement;

k. To provide opportunities for education to one's child or, as the case may be, ward
between the age of six and fourteen years.
Since the duties are imposed upon the citizens and not upon the States, legislation is
necessary for their implementation. Fundamental duties can't be enforced by writs
(Surya Narain v. Union of India, AIR 1982 Raj 1). The Supreme Court in AIIMS
Students' Union v. AIIMS (2002) SCC 428 has reiterated that though the fundamental
duties are not enforceable by the courts, they provide a valuable guide and aid to the
interpretation of Constitutional and legal issues. Further, in Om Prakash v. State of U.P.
(2004) 3 SCC 402, the Supreme Court held that fundamental duties enjoined on citizens
under Article 51-A should also guide the legislative and executive actions of elected or
non-elected institutions and organizations of citizens including municipal bodies.

ORDINANCE MAKING POWERS

In Article 53 the Constitution lays down that the “executive power of the Union shall be vested
in the President”. The President of India shall, thus, be the head of the ‘executive power' of the
Union. The executive power may be defined as the power of “carrying on the business of
Government” or “the administration of the affairs of the state” excepting functions which are
vested in any other authority by the Constitution. The various powers that are included within
the comprehensive expression ‘executive power' in a modern state have been classified under
various heads as follows:

i. Administrative power, i.e., the execution of the laws and the administration of the
departments of Government.

ii. Military power, i.e., the command of the armed forces and the conduct of war.

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iii. Legislative power, i.e., the summoning; prorogation, etc. of the legislature.

iv. Judicial power, i.e., granting of pardons, reprieves etc. to persons convicted of crime.

These powers vest in the President under each of these heads, subject to the limitations made
under the Constitution.

1. Ordinance-making power of the President

The most important legislative power conferred on the President is to promulgate Ordinances.
Article 123 of the Constitution provides that the President shall have the power to legislate by
Ordinances at any time when it is not possible to have a parliamentary enactment on the
subject, immediately. This is a special feature of the Constitution of India.

The ambit of this Ordinance-making power of the President is co-extensive with the legislative
powers of Parliament, that is to say it may relate to any subject in respect of which parliament
has the right to legislate and is subject to the same constitutional limitations as legislation by
Parliament.

According to Article 13(3)(a) “Law” includes an “Ordinance”. But an Ordinance shall be of

temporary duration. It may be of any nature, i.e., it may be retrospective or may amend or
repeal any law or Act of Parliament itself.

This independent power of the executive to legislate by Ordinance has the following
peculiarities:

i. the Ordinance-making power will be available to the President only when both the
Houses of Parliament have been prorogued or is otherwise not in session, so that it is
not possible to have a law enacted by Parliament. However, Ordinance can be made
even if only one House is in Session because law cannot be made by that House in
session alone. Both the Houses must be in session when Parliament makes the law. The
President’s Ordinance making power under the Constitution is not a co-ordinate or
parallel power of legislation along with Legislature.

ii. the power is to be exercised by the President on the advice of his Council of Ministers.

iii. the President must be satisfied about the need for the Ordinance and he cannot be
compelled

iv. the Ordinance must be laid before Parliament when it re-assembles, and shall
automatically cease to have effect at the expiration of 6 weeks from the date of re-
assembly or before resolutions have been passed disapproving the Ordinance.

v. the period of six weeks will be counted from the latter date if the Houses reassemble on
different dates.

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2. Ordinance making power of the Governor

The executive power of the State is vested in the Governor and all executive action of the State
has to be taken in the name of the Governor. Normally there shall be a Governor for each State
but the same person can be appointed as Governor for two or more States. The Governor of a
State is not elected but is appointed by the President and holds his office at the pleasure of the
President. The head of the executive power to a State is the Governor just as the President for
the Union.

Powers: The Governor possesses executive, legislation and judicial powers as the Presidents
except that he has no diplomats or military powers like the President. This power is exercised
under the head of ‘legislative powers. The Governor’s power to make Ordinances as given
under Article 213 is similar to the Ordinance making power of the President and has the force
of an Act of the State Legislature. He can make Ordinance only when the State Legislature or
either of the two Houses (where it is bicameral) is not in session. He must be satisfied that
circumstances exist which render it necessary to take immediate action. While exercising this
power Governor must act with the aid and advice of the Council of Ministers. But in following
cases the Governor cannot promulgate any Ordinance without instructions from the President:

a. if a Bill containing the same provisions would under this Constitution have required the
previous section of the President.

b. he would have deemed it necessary to reserve a Bill containing the same provisions for the
consideration of the President.

c. an Act of the State legislature containing the same provisions would under this Constitution
have been invalid under having been reserved for the consideration of the President, it had
received the assent of the President.

d. the Ordinance must be laid before the state legislature (when it re-assembles) and shall
automatically cease to have effect at the expiration of six weeks from the date of the re-
assembly unless disapproved earlier by that legislature.

LEGISLATIVE POWERS OF THE UNION AND THE STATES

1. Two Sets of Government

The Indian Constitution is essentially federal. Dicey, in the “Law of Constitution' has said
“Federation means the distribution of the force of the State among a number of co-ordinate
bodies, each originating in and controlled by the Constitution”. The field of Government is
divided between the Federal and State Governments which are not subordinate to one
another but are co-ordinate and independent within the sphere allotted to them. The
existence of co-ordinate authorities independent of each other is the gist of the federal
principle.

A federal constitution establishes a dual polity as it comprises two levels of Government. At

one level, there exists a Central Government having jurisdiction over the whole country and

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reaching down to the person and property of every individual therein. At the other level,
there exists the State Government each of which exercises jurisdiction in one of the States
into which the country is divided under the Constitution. A citizen of the federal country
thus becomes subject to the decrees of two Government — the central and the regional.

The Union of India is now composed of 29 States and both the Union and the States derive
their authority from the Constitution which divides all powers-legislative, executive and
financial, between them. The result is that the States are not delegates of the Union and
though there are agencies and devices for Union control over the States in many matters,
the States are autonomous within their own spheres as allotted to them by the Constitution.
Both the Union and States are equally subject to the limitations imposed by the
Constitution, say, for example, the exercise of legislative powers being limited by
Fundamental Rights. However, there are some parts of Indian Territory which are not
covered by these States and such territories are called Union Territories.

The two levels of Government divide and share the totality of governmental functions and
powers between themselves. A federal constitution thus envisages a division of
governmental functions and powers between the center and the regions by the sanction of
the Constitution.

Chapter I of Part XI (Articles 245 to 255) of the Indian Constitution read with Seventh Schedule
thereto covers the legislative relationship between the Union and the States. Analysis of these
provisions reveals that the entire legislative sphere has been divided on the basis of: (a)
Territory with respect to which the laws are to be made, and (b) Subject matter on which laws
are to be made.

2. Territorial Distribution

The Union Legislature, i.e., Parliament has the power to make laws for the whole of the
territory of India or any part thereof, and the State Legislatures have the power to make laws
for the whole or any part of the territory of the respective States. Thus, while the laws of the
Union can be enforced throughout the territory of India, the laws of a State cannot be operative
beyond the territorial limits of that States. For example, a law passed by the legislature of the
Punjab State cannot be made applicable to the State of Uttar Pradesh or any other state.
However, this simple generalization of territorial division of legislative jurisdiction is subject to
the following clarification.

(A) Parliament

From the territorial point of view, Parliament, being supreme legislative body, may make laws
for the whole of India; or any part thereof; and it can also make laws which may have their
application even beyond the territory of India. A law made by Parliament is not invalid merely
because it has an extra-territorial operation. As explained by Kania C.J. in A.H. Wadia v.
Income-tax Commissioner, A.I.R. 1949 F.C. 18, 25 “In the case of sovereign Legislature,
questions of extra-territoriality of any enactment can never be raised in the municipal courts as
a ground for challenging its validity. The legislation may offend the rules of International law,

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may not be recognized by foreign courts, or there may be practical difficulties in enforcing
them but these are questions of policy with which the domestic tribunals are not concerned”.

A Union Territory is administered directly by the Central Executive. Article 239(1) provides
save as otherwise provided, by Parliament by law, every Union Territory shall be administered
by the President acting, to such extent as he thinks fit, through an Administrator to be
appointed by him with such designation as he may specify. Article 239A empowers Parliament
to create local Legislatures or Council of Ministers or both for certain Union Territories with
such constitutional powers and functions, in each case, as may be specified in the law. Article
246(4) provides that Parliament can make a law for a Union Territory with respect to any
matter, even if it is one which is enumerated in the State List. With regard to Union Territories,
there is no distribution of legislative powers. Parliament has thus plenary powers to legislate
for the Union Territories with regard to any subject. These powers are, however, subject to
some special provisions of the Constitution.

(B) State Legislature

A State Legislature may make laws only for the state concerned. It can also make laws which
may extend beyond the territory of that State. But such law can be valid only on the basis of
“territorial nexus”. That is, if there is sufficient nexus or connection between the State and the
subject matter of the law which falls beyond the territory of the State, the law will be valid. The
sufficiency of the nexus is to be seen on the basis of the test laid down by our Supreme Court in
State of Bombay v. R.M.D.C., A.I.R. 1957 S.C. 699, according to which two conditions, must be
fulfilled:

i. the connection must be real and not illusory; and

ii. the liability sought to be imposed by that law must be pertinent to that connection.

If both the conditions are fulfilled by a law simultaneously then only it is valid otherwise not.
To illustrate, in the case cited above a newspaper in the name of “Sporting Star” was published
and printed at Bangalore in Mysore (now Karnataka) State. It contained crossword puzzles and
engaged in prize competitions. It had wide circulation in the State of Bombay (now
Maharashtra) and most of its activities such as the standing invitations, the filling up of the
forms and the payment of money took place within that State. The State of Bombay imposed a
tax on the newspaper. The publishers challenged the validity of the law on the ground that it
was invalid in so far it covered a subject matter falling beyond the territory of that State because
the paper was published in another State. The Supreme Court, applying the doctrine of
territorial nexus, held that the nexus was sufficient between the law and its subject-matter to
justify the imposition of the tax. So in this way, the state laws may also have a limited extra-
territorial operation and it is not necessary that such law should be only one relating to tax-
matters.

3. Distribution of Subject Matter of Legislation

In distributing the subjects on which legislation can be made, different constitutions have
adopted different pattern. For example, in the U.S.A. there is only one short list on the
subject. Either by their express terms or by necessary implication some of them are

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exclusively assigned to the Central Government or the others concurrent on which Centre
and the States both can make laws. The subjects not enumerated in this list, i.e., residuary
subjects, have been left for the States. Similar pattern has been followed in Australia but
there is one short list in which a few subjects have been exclusively assigned to the Centre
and there is a a longer list in which those subjects are enumerated on which Centre and
States both can make laws. By necessary implication a few of these concurrent subjects have
also become exclusively Central subjects. The unremunerated subjects fall exclusively
within the State jurisdiction. A different pattern has been adopted in Canada where there
are three lists of subjects, one consists of subjects exclusively belonging to the Centre,the
other consists of those exclusively belonging to the States and the third where both can
make law. Thus, residuary subjects fall within the central jurisdiction. The Government of
India Act, 1935 followed the Canadian pattern subject to the modification that here the lists
of subjects were much more detailed as compared to those in the Canadian Constitution
and secondly, the residuary subjects had been left to the discretion of the Governor-General
which he could assign either to Centre or to the States.

The Constitution of India, substantially follows the pattern of the Government of India Act,
1935 subject to the modification that the residuary subjects have been left for the Union as in
Canada. To understand the whole scheme, the Constitution draws three long lists of all the
conceivable legislative subjects. These lists are contained in the VIIth Schedule to the
Constitution. List I is named as the Union List. List II as the State List and III as the
Concurrent List. Each list contains a number of entries in which the subjects of legislation
have been separately and distinctly mentioned. The number of entries in the respective lists
is 97, 66 and 47. The subjects included in each of the lists have been drawn on certain basic
considerations and not arbitrarily or in any haphazard manner.

Thus, those subjects which are of national interest or importance, or which need national
control and uniformity of policy throughout the country have been included in the Union
List; the subjects which are of local or regional interest and on which local control is more
expedient, have been assigned to the State List and those subjects which ordinarily are of
local interest yet need uniformity on national level or at least with respect to some parts of
the country, i.e., with respect, to more than one State have been allotted to the Concurrent
List. To illustrate, defense of India, naval, military and air forces; atomic energy, foreign
affairs, war and peace, railways, posts and telegraphs, currency, coinage and legal tender;
foreign loans; Reserve Bank of India; trade and commerce with foreign countries; import
and export across customs frontiers; interstate trade and commerce, banking; industrial
disputes concerning Union employees; coordination and determination of Standards in
institutions for higher education are some of the subjects in the Union List. Public Order;
police; prisons; local Government; public health and sanitation; trade and commerce within
the State; markets and fairs; betting and gambling etc., are some of the subjects included in
the State List. And coming to the Concurrent List, Criminal law; marriage and divorce;
transfer of property; contracts; economic and social planning; commercial and industrial
insurance; monopolies; social security and social insurance; legal, medical and other
professions; price control, electricity; acquisition and requisition of property are some of the
illustrative matters included in the Concurrent List.

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Apart from this enumeration of subjects, there are a few notable points with respect to these
lists, e.g.:

i. The entries relating to tax have been separated from other subjects and thus if a subject is
included in any particular List it does not mean the power to impose tax with respect to that
also follows. Apart from that, while other subjects are in the first part of the List in one
group, the subjects relating to tax are given towards the end of the List.

ii. Subject-matter of tax is enumerated only in the Union List and the State List. There is no tax
subject included in the Concurrent List.

iii. In each List there is an entry of “fees” with respect to any matter included in that List
excluding court fee. This entry is the last in all the Lists except List I where it is last but one.

iv. There is an entry each in Lists I and II relating to “offences against laws with respect to any
of the matters” included in the respective List while criminal law is a general subject in the
Concurrent List.

So far we have discussed the general aspect of the subject matters of legislation or of the items
on which Legislation could be passed. The next question that arises is, who will legislate on
which subject? Whether, it is both Centre and the States that can make laws on all subjects
included in the three Lists or there is some division of power between the two to make laws on
these subjects? The answer is that the Constitution makes clear arrangements as to how the
powers shall be exercised by the Parliament or the State Legislatures on these subjects. That
arrangement is mainly contained in Article 246, but in addition to that, provisions have also
been made in Articles 247 to 254 of the Constitution. A wholesome picture of this arrangement
is briefly given below.

4. Powers of the Union and the States with respect to Legislative Subjects

The arrangement for the operation of legislative powers of the Centre and the States with
respect to different subjects of legislation is as follows:

a. With respect to the subject enumerated in the Union i.e., List I, the Union Parliament has
the exclusive power to make laws. The State Legislature has no power to make laws on any
of these subjects and it is immaterial whether Parliament has exercised its power by making
a law or not. Moreover, this power of parliament to make laws on subjects included in the
Union List is notwithstanding the power of the States to make laws either on the subjects
included in the State List or the Concurrent List. If by any stretch of imagination or because
of some mistake — which is not expected — the same subject which is included in the
Union List is also covered in the State List, in such a situation that subject shall be read only
in List I and not in List II or List III. By this principle the superiority of the Union List over
the other two has been recognized.

b. With respect to the subjects enumerated in the State List, i.e., List II, the legislature of a State
has exclusive power to make laws. Therefore, Parliament cannot make any law on any of
these subjects, whether the State makes or does not make any law.

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c. With respect to the subjects enumerated in the Concurrent List, i.e., List III, Parliament and
the State Legislatures both have powers to make laws. Thus, both of them can make a law
even with respect to the same subject and both the laws shall be valid in so far as they are
not repugnant to each other. However, in case of repugnancy, i.e., when there is a conflict
between such laws then the law made by Parliament shall prevail over the law made by the
State Legislature and the latter will be valid only to the extent to which it is not repugnant
to the former. It is almost a universal rule in all the Constitutions where distribution of
legislative powers is provided that in the concurrent field the Central law prevails if it
conflicts with a State law. However, our Constitution recognizes an exception to this
general or universal rule. The exception is that if there is already a law of Parliament on any
subject enumerated in the Concurrent List and a state also wants to make a law on the same
subject then a State can do so provided that law has been reserved for the consideration of
the President of India and has received his assent. Such law shall prevail in that State over
the law of Parliament if there is any conflict between the two. However, Parliament can get
rid of such law at any time by passing a new law and can modify by amending or repealing
the law of the State.

d. With respect to all those matters which are not included in any of the three lists, Parliament
has the exclusive power to make laws. It is called the residuary legislative power of
Parliament. The Supreme Court has held that the power to impose wealth-tax on the total
wealth of a person including his agricultural land belongs to Parliament in its residuary
jurisdiction (Union of India v. H.S. Dhillon, A.I.R. 1972 S.C. 1061).

5. Power of Parliament to make Laws on State List

We have just discussed that the State legislatures have the exclusive powers to make laws
with respect to the subjects included in the State List and Parliament has no power to
encroach upon them. However, our Constitution makes a few exceptions to this general
rule by authorizing Parliament to make law even on the subjects enumerated in the State
List. Following are the exceptions which the Constitution so recognizes:

a. In the National Interest (Article 249)

Parliament can make a law with respect to a matter enumerated in the State List if the
Council of States declares by a resolution supported by two-thirds of its members present
and voting, that it is necessary or expedient in the national interest that Parliament should
make a law on that matter. By such declaration Parliament gets the authority to legislate on
that matter for the whole or part of the country so long as the resolution of the Council of
States remains in force. But such resolution shall remain in force for a period not exceeding
one year. However, a fresh resolution can be passed the end of one year to give extended
lease to the law of Parliament and that way the law of Parliament can be continued to
remain in force for any number of years.

The laws passed by Parliament under the provision cease to have effect automatically after
six months of the expiry of the resolution period. Beyond that date, such Parliamentary law
becomes inoperative except as regards the thing done or omitted to be done before the
expiry of that law.

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b. During a proclamation of emergency (Article 250)

While a Proclamation of Emergency is in operation, Article 250 of the Constitution of India

removes restrictions on the legislative authority of the Union Legislature in relation to the
subjects enumerated in the State List. Thus, during emergency, Parliament shall have power
to make laws for the whole or any part of the territory of India with respect to all matters in
the State List. These laws will cease to have effect on the expiration of six months after the
proclamation ceases to operate. After that date, such Union laws shall become inoperative,
except in respect of things done or omitted to be done before the expiry of the said period.
Under Article 352, if the President is satisfied that a grave emergency exists where-by the
security of India or any part of the territory thereof is threatened whether by war, or
external aggression or armed rebellion, he may by proclamation make a declaration to that
effect in respect of the whole of India or of such part of the territory thereof as may be
specified in the proclamation. It is not necessary that there is an actual war or armed
rebellion. It is enough that the President is satisfied that there is an imminent danger of
such war or armed rebellion as the case may be. The proclamation of emergency shall not
be issued except when the decision of the Union Cabinet that such proclamation may be
issued, has been communicated to the President in writing. Every such proclamation shall
be laid before each House of Parliament and unless it is approved by both the Houses by a
majority of not less than two-thirds of the members present and voting within a period of
30 days thereof, such proclamation shall cease to operate. If any such proclamation is issued
at a time when the House of People (Lok Sabha) has been dissolved, or the dissolution of
the House of People takes place during the period of one month referred to above but
before passing the resolution, and if a resolution approving the proclamation has been
passed by the Council of State (Rajya Sabha), the proclamation shall cease to operate at the
expiry of thirty days from the date on which the House of the People (Lok Sabha) first sits
after it's reconstitution, unless before the expiration of the said period of thirty days a
resolution approving the proclamation has also passed by the House of the People.

A proclamation so approved shall, unless revoked, cease to operate on the expiration of a

period of six months from the date of passing of the second resolution approving the
proclamation. But this period of six months may be extended by a further period of six
months, if, within the first six months, both the Houses of Parliament pass a resolution
approving the continuance in force of such proclamation. Prior to the Constitution 44th
Amendment Act, the position was that the proclamation when approved by both the
Houses of Parliament would remain in the force for an indefinite period unless and until
the President chose to revoke the proclamation in exercise of the power conferred by the
then Article 352(2)(a).

Article 353 provides that while a proclamation of emergency is in operation, the Parliament
shall have the power to make laws conferring powers and imposing duties or authorizing
the conferring of powers and the imposition of duties upon the Union or officers and
authorities of the Union as respects that matter, notwithstanding, that it is one which is not
enumerated in the Union List.

c. Breakdown of Constitutional Machinery in a State (Article 356 and 357)

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In case the Governor of a State reports to the President, or he is otherwise satisfied that the
Government of a State cannot be carried on according to the provisions of the Constitution,
then he (President) can make a proclamation to that effect. By that proclamation, he can
assume to himself all or any of the functions of the Government of the State and all or any
of the powers vested in or exercisable by the Governor or anybody or authority in the State,
and declare that the powers of Legislature of that State shall vest in Parliament. Parliament
can make laws with respect to all State matters as regards the particular State in which there
is a breakdown of constitutional machinery and is under the President's rule. Further it is
not necessary that the legislature of the concerned State should be suspended or dissolved
before it is brought under the President's rule, but practically it so happens. It is important
to note that the President cannot, however, assume to himself any of the powers vested in
or exercisable by a High Court or to suspend, either in whole or in part, the operation of
any provision of the Constitution relating to the High Courts.

Under the Constitution of India, the power is really that of the Union Council of Ministers
with the Prime Minister as its head. The satisfaction of the President contemplated by this
Article is subjective in nature. The power conferred by Article 356 upon the President is a
conditional power. It is not an absolute power. The existence of material-which may
comprise of, or include, the report(s) of the Governor — is a pre-condition. The satisfaction
must be formed on relevant materials. Though the power of dissolving the Legislative
Assembly can be said to be implicit in Clause (1) of Article 356, it must be held, having
regard to the overall Constitutional scheme that the President shall exercise it only after the
proclamation is approved by both the Houses of Parliament under Clause (3) and not
before. Until such approval, the President can only suspend the Legislative Assembly by
suspending the provisions of the Constitution relating to the Legislative Assembly under
Sub-clause (c) of Clause (1). The proclamation under Clause (1) can be issued only where
the situation contemplated by the clause arises. Clause (3) of Article 356, is conceived as a
control on the power of the President and also as a safeguard against its abuse (S.R.
Bommai v. Union of India, AIR 1994 SC 1918).

Clause 2 of Article 356 provides that any such proclamation may be revoked or varied by a
subsequent proclamation. It may, however, be noted that the presidential proclamation is
valid only for six months at a time and that also if approved by both the Houses of
Parliament within a period of two months from the date of proclamation. A fresh
proclamation can be issued to extend the life of the existing one for a further period of six
months but in no case such proclamation can remain in force beyond a consecutive period
of three years. The Constitution (Forty-Second) Amendment Act, 1976 inserted a new clause
(2) in Article 357. It provides that any law made in exercise of the Power of the Legislature
of the State by Parliament or the President or other Authority referred to in Sub-clause (a) of
Clause (1) which Parliament or the President or such other Authority would not, but for the
issue of a proclamation under Article 356 have been competent to make shall, after the
proclamation has ceased to operate, continue in force until altered, or repealed or amended
by a competent Legislature or other authority. This means that the laws made during the
subsistence of the proclamation shall continue to be in force unless and until they are
altered or repealed by the State Legislature. So, an express negative act is required in order
to put an end to the operation of the laws made in respect of that State by the Union.

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The action of the President under Article 356 is a constitutional function and the same is
subject to judicial review. The Supreme Court or High Court can strike down the
proclamation if it is found to be mala fide or based on wholly irrelevant or extraneous
grounds. If the Court strikes down the proclamation, it has the power to restore the
dismissed government to office and revive and reactivate the Legislative Assembly
wherever it may have been dissolved or kept under suspension. (S.R. Bommai's case).

d. On the request of two or more States (Article 252)

Article 252 of the Constitution enumerates the power of Parliament to legislate for state. The
exercise of such power is conditional upon an agreement between two or more States
requesting Parliament to legislate for them on a specified subject. This Article provides that,
if two or more States are desirous that on any particular item included in the State List there
should be a common legislation applicable to all such State then they can make a request to
Parliament to make such law on that particular subject. Such request shall be made by
passing a resolution in the legislatures of the State concerned. If request is made in that
form then parliament can make law on that subject as regards those States. The law so made
may be adopted by other States also, by passing resolutions in their legislatures. Once,
however, such law has been made, the power of those State legislatures which originally
requested or which later on adopted such law is curtailed as regards that matter; and only
Parliament can amend, modify or repeal such a law on similar request being made by any
State or States. If any of the consenting States makes a law on that subject then its law will
be invalid to the extent to which it is inconsistent with a law of Parliament. To take an
example, Parliament passed the Prize Competitions Act, 1955 under the provisions of the
Constitution.

e. Legislation for enforcing international agreements (Article 253)

Parliament has exclusive power with respect to foreign affairs and entering into treaties and
agreements with foreign countries and implementing of treaties and agreements and
conventions with foreign countries. But a treaty or agreement concluded with another
country may require national implementation and for that purpose a law may be needed.
To meet such difficulties, the Constitution authorizes Parliament to make law on any
subject included in any list to implement:

i. any treaty, agreement or convention with any other country or countries, or

ii. any decision made at any international conference, association or other body.

These five exceptions to the general scheme of distribution of legislative powers on the
basis of exclusive Union and State Lists go to show that in our Constitution there is nothing
which makes the States totally immune from legislative interference by the Centre in any
matter. There remains no subject in the exclusive State jurisdiction which cannot be
approached by the Centre in certain situations. But by this, one must not conclude that the
distribution of legislative power in our Constitution is just illusory and all the powers vest
in the Centre. On the other hand, the distribution of legislative powers is real and that is the
general rule but to face the practical difficulties the Constitution has made a few exceptions
which are to operate within the circumscribed sphere and conditions.

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f. Interpretation of the Legislative Lists

For giving effect to the various items in the different lists the Courts have applied mainly
the following principles:

i. Plenary Powers: The first and foremost rule is that if legislative power is granted with
respect to a subject and there are no limitations imposed on the power, then it is to be given
the widest scope that its words are capable of, without, rendering another item nugatory. In
the words of Gajenderagadkar, C.J.

“It is an elementary cardinal rule of interpretation that the words used in the Constitution
which confer legislative power must receive the most liberal construction and if they are
words of wide amplitude, they must be interpreted so as to give effect to that amplitude. A
general word used in an entry ... must be construed to extend to all ancillary or subsidiary
matters which can fairly and reasonably be held to be included in it (Jagannath Baksh Singh
v. State of U.P., AIR 1962 SC 1563).

Thus, a legislature to which a power is granted over a particular subject may make law on
any aspect or on all aspects of it; it can make a retrospective law or a prospective law and it
can also make law on all matters ancillary to that matter. For example, if power to collect
taxes is granted to a legislature, the power not to collect taxes or the power to remit taxes
shall be presumed to be included within the power to collect taxes.

ii. Harmonious Construction: Different entries in the different lists are to be interpreted in
such a way that a conflict between them is avoided and each of them is given effect. It must
be accepted that the Constitution does not want to create conflict and make any entry
nugatory. Therefore, when there appears a conflict between two entries in the two different
lists the two entries should be so interpreted, that each of them is given effect and, for that
purpose the scope and meaning of one may be restricted so as to give meaning to the other
also.

iii. Pith and Substance Rule: The rule of pith and substance means that where a law in reality
and substance falls within an item on which the legislature which enacted that law is
competent to legislate, then such law shall not become invalid merely because it
incidentally touches a matter outside the competence of legislature. In a federal
Constitution, as was observed by Gwyer C.J. “it must inevitably happen from time to time
that legislation though purporting to deal with a subject in one list touches also upon a
subject in another list, and the different provisions of the enactment may be so closely
intertwined that blind adherence to a strictly verbal interpretation would result in a large
number of statutes being declared invalid because the legislature enacting them may
appear to have legislated in a forbidden sphere” (Prafulla Kumar v. Bank of Khulna, AIR
1947 PC 60). Therefore, where such overlapping occurs, the question must be asked, what
is, “pith and substance” of the enactment in question and in which list its true nature and
character is to be found. For this purpose, the enactment as a whole with its object and
effect must be considered. By way of illustration, acting on entry 6 of List II which reads
“Public Health and Sanitation”. Rajasthan Legislature passed a law restricting the use of
sound amplifiers. The law was challenged on the ground that it dealt with a matter which

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fell in entry 81 of List I which reads: “Post and telegraphs, telephones, wireless
broadcasting and other like forms of communication”, and, therefore, the State Legislature
was not competent to pass it. The Supreme Court rejected this argument on the ground that
the object of the law was to prohibit unnecessary noise affecting the health of public and not
to make a law on broadcasting, etc. Therefore, the pith and substance of the law was
“public health” and not “broadcasting” (G. Chawla v. State of Rajasthan, AIR 1959 SC 544).

iv. Colourable Legislation: It is, in a way, a rule of interpretation almost opposite to the one
discussed above. The Constitution does not allow any transgression of power by any
legislature, either directly or indirectly. However, a legislature may pass a law in such a
way that it gives it a color of constitutionality while, in reality, that law aims at achieving
something which the legislature could not do. Such legislation is called colorable piece of
legislation and is invalid. To take an example in Kameshwar Singh v. State of Bihar, A.I.R.
1952 S.C. 252, the Bihar Land Reforms Act, 1950 provided that the unpaid rents by the
tenants shall vest in the state and one half of them shall be paid back by the State to the
landlord or zamindar as compensation for acquisition of unpaid rents. According to the
provision in the State List under which the above law was passed, no property should be
acquired without payment of compensation. The question was whether the taking of the
whole unpaid rents and then returning half of them back to them who were entitled to
claim, (i.e., the landlords) is a law which provides for compensation. The Supreme Court
found that this was a colorable exercise of power of acquisition by the State legislature,
because “the taking of the whole and returning a half means nothing more or less than
taking of without any return and this is naked confiscation, no matter in whatever specious
form it may be clothed or disguised”. The motive of the legislature is, however, irrelevant
for the application of this doctrine. Therefore, if a legislature is authorized to do a particular
thing directly or indirectly, then it is totally irrelevant as to with what motives — good or
bad — it did that.

These are just few guiding principles which the Courts have evolved, to resolve the disputes
which may arise about the competence of law passed by Parliament or by any State Legislature.

FREEDOM OF TRADE, COMMERCE AND INTERCOURSE

This heading has been given to Part XIII of the Constitution. This part originally consisted of
seven articles — Articles 301 to 307 — of which one (Art. 306) has been repealed. Out of these
articles it is the first, i.e., 301 which, in real sense, creates an overall comprehensive limitation
on all legislative powers of the Union and the State which affect the matters covered by that
Article. This Article guarantees the freedom of trade, commerce and intercourse and runs in the
following words:

“Subject to the other provisions of this Part, trade, commerce and intercourse throughout the
territory of India shall be free”.

The opening words of this Article clearly show, and it has been so held by the Supreme Court,
that except the provisions contained under this Part, i.e., Articles 302 to 307 under no other
provision of the Constitution the free flow of trade and commerce can be interfered with. The

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object of the freedom declared by this Article is to ensure that the economic unity of India may
not be broken by internal barriers.

The concept of trade, commerce and intercourse today is so wide that from ordinary sale and
purchase it includes broadcasting on radios, communication on telephone and even to non-
commercial movement from one place to another place. If such is the scope of trade and
commerce then any law relating to any matter may affect the freedom of trade, commerce and
intercourse, e.g., it may be said that the law which imposes the condition of license for having a
radio violates the freedom of trade and commerce, or a law which regulates the hours during
which the electricity in a particular locality shall be available may be called as affecting the
freedom of trade and commerce because during those hours one cannot use the radio or
television or one cannot run this factory. If that view is taken then every law shall become
contrary to Articles 301 and unless saved by Articles 302 to 307 shall be unconstitutional. To
avoid such situations the Supreme Court in the very first case on the matter (Atiabari Tea Co. v.
State of Assam, A.I.R. 1951 S.C. 232) declared that only those laws which “directly and
immediately” restrict or impede the freedom of trade and commerce are covered by Article 301
and such laws which directly and incidentally affect the freedom guaranteed in that article are
not within the reach of Article 301. The word ‘intercourse’ in this article is of wide import. It
will cover all such intercourse as might not be included in the words ‘trade and commerce’.
Thus, it would cover movement and dealings even of a non-commercial nature (Chobe v.
Palnitkar, A.I.R. 1954 Hyd. 207). The word, free in Article 301 cannot mean an absolute
freedom. Such measures as traffic regulations licensing of vehicles etc. are not open to
challenge.

It was further held in the next case (Automobile Transport Ltd. v. State of Raj., A.I.R. 1962 S.C.
1906) that regulations that facilitate the freedom of trade and commerce and compensatory
taxes are also saved from the reach of Article 301. About compensatory taxes the Supreme
Court has doubted the correctness of its own views in a later case Khyerbari Tea Co. v. State of
Assam, A.I.R. 1964 S.C. 925.

With respect to regulatory laws also, we may say that if they are the laws which facilitate the
freedom of trade and commerce then they are not at all laws which impede the free flow of
trade and commerce directly or indirectly. The freedom of trade and commerce guaranteed
under Article 301 applies throughout the territory of India; it is not only to inter-state but also
to intra- state trade commerce and intercourse. But in no way it covers the foreign trade or the
trade beyond the territory of India. Therefore, the foreign trade is free from the restriction of
Article 301.

Trade and commerce which are protected by Article 301 are only those activities which are
regarded as lawful trading activities and are not against policy. The Supreme Court held that
gambling is not "trade". Similarly, prize competitions being of gambling in nature, cannot be
regarded as trade or commerce and as such are not protected under Article 301 (State of
Bombay v. RMDC, AIR 1957 SC 699).

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The freedom guaranteed by Article 301 is not made absolute and is to be read subject to the
following exceptions as provided in Articles 302-305.

a. Parliament to Impose Restriction in the Public Interest

According to Article 302 Parliament may, by law, impose such restrictions on the freedom
of trade, commerce and intercourse as may be required in the public interest.
,,,

b. Parliament to make Preference or Discrimination

Parliament cannot by making any law give preference to one State over the other or make
discrimination between the States except when it is declared by that law that it is necessary
to do so for the purpose of dealing with a situation arising from scarcity of goods in any
part of the territory of India [Article 303 (1) and (2)].

c. Power of the State Legislature

The Legislature of a State may by law:

i. impose on goods imported from other States or the Union territories any tax to which
similar goods manufactured or produced in that State are subject, so, however, as not to
discriminate between goods so imported and goods so manufactured or produced; and

ii. impose such reasonable restrictions on the freedom of trade, commerce or intercourse
within the State as may be required in the public interest.

However, no bill or amendment for making a law falling in this provision can be
introduced or moved in the Legislature of a State without the previous sanction of the
President. [Article 304]

➢ In Kalyani Stores v. State of Orissa, (AIR 1966 SC 1686) Supreme Court held that Article 304
enables State legislature to impose taxes on goods from other States, if goods produced
within the state are subjected to such taxes. A subsequent assent of President is also
sufficient, as held in State of Karnataka v. M\S Hansa Corpn., (1981) AIR SC 463.

iii. Saving of Existing Laws

The law which was already in force at the commencement of the Constitution shall not be
affected by the provisions of Article 301 except in so far as the President may, by order,
otherwise direct (Art 305).

iv. Saving of Laws providing for State Monopoly

The laws which create State monopoly in any trade, etc. are saved from attack under Article
301, i.e., they are valid irrespective of the fact that they directly impede or restrict the
freedom of trade and commerce. So, if the State creates a monopoly in road, transporters
cannot complain that their freedom of trade and commerce has been affected or if the State

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created monopoly in banking then other bankers cannot complain that their freedom of
trade and commerce has been restricted.

The last provision (Article 307) in Part XIII authorizes Parliament to appoint by law such
authority as it considers appropriate for carrying out purposes of Articles 301 to 304 and to
confer on the authority so appointed such powers and duties as it thinks necessary.

CONSTITUTIONAL PROVISIONS RELATING TO STATE MONOPOLY

Creation of monopoly rights in favour of a person or body of persons to carry on any business
prima facie affects the freedom of trade. But in certain circumstances it can be justified.

After the Constitution (Amendment) Act, 1951, the States create a monopoly in favour of itself,
without being called upon to justify its action in the Court as being reasonable.

Sub-clause (ii) of clause (6) of Article 19 makes it clear that the freedom of profession, trade or
business will not be understood to mean to prevent the state from undertaking either directly
or through a corporation owned or controlled by it, any trade, business, industry or service,
whether to the exclusion, complete or partial, citizens or otherwise.

If a law is passed creating a State monopoly the Court should enquire what are the provisions
of the said law which are basically and essentially necessary for creating the state monopoly.
Sub- clause (ii) of clause (6) protects only the essential and basic provisions. If there are other
provisions which are subsidiary or incidental to the operation of the monopoly, they do not fall
under Article 19(6)(ii). It was held by Shah, J. in R.C. Cooper v. Union of India, (1970) 1 SCC
248, that the impugned law which prohibited the named banks from carrying the banking
business was a necessary incident of the business assumed by the Union and hence was not
liable to be challenged under Article 19(6)(ii) in so far as it affected the right of a citizen to carry
on business.

THE JUDICIARY

1. The Supreme Court

The Courts in the Indian legal system, broadly speaking, consist of (i) the Supreme Court,
(ii) the High Courts, and (iii) the subordinate courts. The Supreme Court, which is the
highest Court in the country (both for matters of ordinary law and for interpreting the
Constitution) is an institution created by the Constitution. Immediately before
independence, the Privy Council was the highest appellate authority for British India, for
matters arising under ordinary law. But appeals from High Courts in constitutional matters
lay to the Federal Court (created under the Government of India Act, 1935) and thence to
the Privy Council. The Supreme Court of India, in this sense, has inherited the jurisdiction
of both the Privy Council and the Federal Court. However, the jurisdiction of the Supreme
Court under the present Constitution is much more extensive than that of its two
predecessors mentioned above.

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The Supreme Court, entertains appeals (in civil and criminal and other cases) from High
Courts and certain Tribunals. It has also writ jurisdiction for enforcing Fundamental Rights.
It can advise the President on a reference made by the President on questions of fact and
law. It has a variety of other special jurisdictions.

2. High Courts

The High Courts that function under the Constitution were not created for the first time by
the Constitution. Some High Courts existed before the Constitution, although some new
High Courts have been created after 1950. The High Courts in (British) India were
established first under the Indian High Courts Act, 1861 (an Act of the U.K. Parliament).
The remaining High Courts were established or continued under the Constitution or under
special Acts. High Courts for each State (or Group of States) have appellate, civil and
criminal jurisdiction over lower Courts. High Courts have writ jurisdiction to enforce
fundamental rights and for certain other purposes.

Some High Courts (notably) Bombay, Calcutta and Delhi, have ordinary original civil
jurisdiction (i.e. jurisdiction to try regular civil suits) for their respective cities. High Courts
can also hear references made by the Income Tax Appellate Tribunal under the Income Tax
Act and other tribunals.

It should be added, that the "writ" jurisdiction vested at present in all High Courts by the
Constitution was (before the Constitution came into force) vested only in the High Courts of
Bombay, Calcutta and Madras (i.e. the three Presidency towns).

3. Subordinate Courts

Finally, there are various subordinate civil and criminal courts (original and appellate),
functioning under ordinary law. Although their nomenclature and powers have undergone
change from time to time, the basic pattern remains the same. These have been created, not
under the Constitution, but under laws of the competent legislature. Civil Courts are
created mostly under the Civil Courts Act of each State. Criminal courts are created mainly
under the Code of Criminal Procedure.

4. Civil Courts

In each district, there is a District Court presided over by the District Judge, with a number
of Additional District Judges attached to the court. Below that Court are Courts of Judges
(sometimes called subordinate Judges) and in, some States, Munsiffs. These Courts are
created under State Laws.

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5. Criminal Courts

Criminal courts in India primarily consist of the Magistrate and the Courts of Session.
Magistrates themselves have been divided by the Code of Criminal Procedure into 'Judicial'
and 'Executive' Magistrates. The latter do not try criminal prosecutions, and their
jurisdiction is confined to certain miscellaneous cases, which are of importance for public
tranquility and the like. Their proceedings do not end in conviction or acquittal, but in
certain other types of restrictive orders. In some States, by local amendments, Executive
Magistrates have been vested with powers to try certain offences.

As regards Judicial Magistrates, they are of two classes: Second Class and First Class.
Judicial Magistrates are subject to the control of the Court of Session, which also is itself a
Court of original jurisdiction. The powers of Magistrates of the two classes vary, according
to their grade. The Court of Session can try all offences, and has power to award any
sentence, prescribed by law for the offence, but a sentence of death requires confirmation by
the High Court. In some big cities (including the three Presidency towns and Ahmedabad
and Delhi), the Magistrates are called Metropolitan Magistrates. There is no gradation inter
se. Further, in some big cities (including the three Presidency towns and Ahmedabad and
Hyderabad), the Sessions Court is called the "City Sessions Court", its powers being the
same as those of the Courts of Session in the districts.

6. Special Tribunals

Besides these Courts, which form part of the general judicial set up, there are hosts of
specialized tribunals dealing with direct taxes, labour, excise and customs, claims for
accidents caused by motor vehicles, copyright and monopolies and restrictive trade
practices. For the trial of cases of corruption, there are Special Judges, appointed under the
Criminal Law Amendment Act, 1952.

WRIT JURISDICTION OF HIGH COURTS AND SUPREME COURT

In the words of Dicey, prerogative writs are ‘the bulwark of English Liberty’. The expression
‘prerogative writ’ is one of English common law which refers to the extraordinary writs
granted by the sovereign, as fountain of justice on the ground of inadequacy of ordinary legal
remedies. In course of time these writs were issued by the High Court as extraordinary
remedies in cases where there was either no remedy available under the ordinary law or the
remedy available was inadequate. Under the Constitution by virtue of Article 226, every High
Court has the power to issue directions or orders or writs including writs in the nature of
Habeas corpus, Mandamus, Prohibition, Quo warranto and Certiorari or any of them for the
enforcement of Fundamental Rights stipulated in Part III of the Constitution or for any other
purpose. This power is exercisable by each High Court throughout the territory in relation to
which it exercises jurisdiction. Where an effective remedy is available, the High Court should
not readily entertain a petition under Article 226 of the constitution of India e.g. under the
Companies Act, a shareholder has very effective remedies for prevention of oppression and
mismanagement. Consequently, High Court should not entertain a petition under the said
Article (Ramdas Motors Transport Company Limited v. T.A. Reddy, AIR 1997 SC 2189).

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The Supreme Court could be moved by appropriate proceedings for the issue of directions or
orders or writs, as referred to under Article 226 for the enforcement of the rights guaranteed by
Part III of the Constitution.

Article 32 itself being a fundamental right, the Constitutional remedy of writ is available to
anyone whose fundamental rights are infringed by state action. Thus, we see the power of the
High Courts to issue these writs is wider than that of the Supreme Court, Whereas:

a. an application to a High Court under Article 226 will lie not only where some other
limitation imposed by the Constitution, outside Part III, has been violated, but, an
application under Article 32 shall not lie in any case unless the right infringed is
‘Fundamental Right’ enumerated in Part III of the Constitution;

b. while the Supreme Court can issue a writ against any person or Government within the
territory of India, a High Court can, under Article 226, issue a writ against any person,
Government or other authority only if such person or authority is physically resident or
located within the territorial jurisdiction of the particular High Court extends or if the cause
of action arises within such jurisdiction.

As stated earlier, the Supreme Court has been assigned by the Constitution a special role as
“the protector and guarantor of fundamental rights” by Article 32 (1). Although the
Constitution has provided for concurrent writ jurisdiction of the High Courts it is not
necessary, that an aggrieved petitioner should first apply to the High Court and then to the
Supreme Court (Romesh Thappar v. State of Madras) AIR 1950 SC 124)

The jurisdiction of the High Court also extends to the enforcement of rights other than
Fundamental Rights provided there is a public duty. The Supreme Court’s jurisdiction to
issue writs extends to all Fundamental Rights (Common Cause v Union of India, A.I.R. 1999
SC 2979).

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DELEGATED LEGISLATION

The increasing complexity of modern administration and the need for flexibility capable of
rapid readjustment to meet changing circumstances which cannot always be foreseen, in
implementing our socio-economic policies pursuant to the establishment of a welfare state as
contemplated by our Constitution, have made it necessary for the legislatures to delegate its
powers. Further, the Parliamentary procedure and discussions in getting through a legislative
measure in the Legislatures is usually time consuming.

The three relevant justifications for delegated legislation are:

• the limits of the time of the legislature;

• the limits of the amplitude of the legislature, not merely its lack of competence
but also, its sheer inability to act in many situations, where direction is wanted;
and

• the need of some weapon for coping with situations created by emergency.

The delegation of the legislative power is what Hughus, Chief Justice called, flexibility and
practicability (Currin v. Wallace 83 L. ed. 441).

CLASSIFICATION OF SUBORDINATE LEGISLATION

1. Executive Legislation

The tendency of modem legislation has been in the direction of placing in the body of an Act
only few general rules or statements and relegating details to statutory rules. This system
empowers the executive to make rules and orders which do not require express confirmation
by the legislature. Thus, the rules framed by the Government under the various Municipal Acts
fall under the category

2. Judicial Legislation

Under various statues, the High Courts are authorized to frame rules for regulating the
procedure to be followed in courts. Such rules have been framed by the High Courts under the
Guardians of Wards Act, Insolvency Act, Succession Act and Companies Act, etc.

3. Municipal Legislation

Municipal authorities are entrusted with limited and sub-ordinate powers of establishing
special laws applicable to the whole or any part of the area under their administration known
as bye- laws.

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4. Autonomous Legislation

Under this head fall the regulations which autonomous bodies such as Universities make in
respect of matters which concern themselves.

5. Colonial Legislation

The laws made by colonies under the control of some other nation, which are subject to
supreme legislation of the country under whose control they are.

Principles applicable

A body, to which powers of subordinate legislation are delegates, must directly act within the
powers which are conferred on it and it cannot act beyond its powers except to the extent
justified by the doctrine of implied powers. The doctrine of implied powers means where the
legislature has conferred any power, it must be deemed to have also granted any other power
without which that power cannot be effectively exercised.

Subordinate legislation cannot take effect unless published. Therefore, there must be
promulgation and publication in such cases. Although there is no rule as to any particular kind
of publication.

Conditional legislation is defined as a statute that provides controls but specifies that they are
to come into effect only when a given administrative authority finds the existence of conditions
defined in the statue. In other words in sub-ordinate legislation the delegate completes the
legislation by supplying details within the limits prescribed by the statue and in the case of
conditional legislation, the power of legislation is exercised by the legislature conditionally,
leaving to the discretion of an external authority, the time and manner of carrying its legislation
into effect (Hamdard Dawa Khana v. Union of India, AIR, 1960 SC 554).

While delegating the powers to an outside authority the legislature must act within the ambit of
the powers defined by the Constitution and subject to the limitations prescribed thereby. If an
Act is contrary to the provisions of the Constitution, it is void. Our Constitution embodies a
doctrine of judicial review of legislation as to its conformity with the Constitution.

In England, however, the position is different. Parliament in England may delegate to any
extent and even all its power of law-making to an outside authority. In U.S.A., the Constitution
embodies the doctrine of separation of powers, which prohibits the executive being given law
making powers. On the question whether there is any limit beyond which delegation may not
go in India, it was held in ire-Delhi Laws Act, 1912 AIR 1951 SC 332, that there is a limit that
essential powers of legislation or essential legislative functions cannot be delegated. However,
there is no specific provision in the Constitution prohibiting the delegation. On the question
whether such doctrine is recognized in our Constitution, a number of principles in various
judicial decisions have been laid down which are as follows:

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a. The primary duty of law-making has to be discharged by the Legislature itself. The
Legislature cannot delegate its primary or essential legislative function to an outside
authority in any case.

b. The essential legislative function consists in laying down the ‘the policy of the law' and
‘making it a binding rule of conduct'. The legislature, in other words must itself lay down
the legislative policy and principles and must afford sufficient guidance to the rule-making
authority for carrying out the declared policy.

c. If the legislature has performed its essential function of laying down the policy of the law
and providing guidance for carrying out the policy, there is no constitutional bar against
delegation of subsidiary or ancillary powers in that behalf to an outside authority.

d. It follows from the above that an Act delegating law-making powers to a person or body
shall be invalid, if it lays down no principles and provides no standard for the guidance of
the rule- making body.

e. In applying this test, the court could take into account the statement in the preamble to the
act and if said statements afford a satisfactory basis for holding that the legislative policy or
principle has been enunciated with sufficient accuracy and clarity, the preamble itself
would satisfy the requirements of the relevant tests.

f. In every case, it would be necessary to consider the relevant provisions of the Actin-
relation to the delegation made and the question as to whether the delegation made is intra
vires or not will have to be decided by the application of the relevant tests.

g. Delegated legislation may take different forms, viz. conditional legislation, supplementary
legislation subordinate legislation etc., but each form is subject to the one and same rule
that delegation made without indicating intelligible limits of authority is constitutionally
incompetent.

SEPARATION OF POWERS

It is generally accepted that there are three main categories of governmental functions - (i) the
Legislative, (ii) the Executive, and (iii) the Judicial. At the same time, 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.

Article 50 of the Constitution of India dealing with Separation of judiciary from executive. It
provides that the State shall take steps to separate the judiciary from the executive in the public
services of the State.

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Montesquieu said that if the Executive and the Legislature are the same person or body of
persons, there would be a danger of the Legislature enacting oppressive laws which the
executive will administer to attain its own ends, for laws to be enforced by the same body that
enacts them result in arbitrary rule and makes the judge a legislator rather than an interpreter
of law. If one person or body of persons could exercise both the executive and judicial powers
in the same matter, there would be arbitrary powers, which would amount to complete
tyranny, if the legislative power would be added to the power of that person. The value of the
doctrine lies in the fact that it seeks to preserve human liberty by avoiding the concentration of
powers in one person or body of persons. The different organs of government should thus be
prevented from encroaching on the province of the other organ.

In India, the executive is part of the legislature. The President is the head of the executive and
acts on the advice of the Council of Ministers.

The Constitution of India does not recognize the doctrine of separation of power in its absolute
rigidity, but the functions of the three organs of the government have been sufficiently
differentiated ( Ram Jawaya v. State of Punjab, AIR 1955 SC 549). None of the three of organs of
the Government can take over the functions assigned to the other organs.(Keshanand Bharti v.
State of Kerala, AIR 1973 SC 1461, Asif Hameed v. State of J&K 1989 AIR, SC 1899) In State of
Bihar v. Bihar Distillery Ltd., (AIR 1997 SC 1511) the Supreme Court has held that the judiciary
must recognize the fundamental nature and importance of the legislature process and must
accord due regard and deference to it. The Legislative and Executive are also expected to show
due regard and deference to the judiciary. The Constitution of India recognizes and gives effect
to the concept of equality between the three organs of the Government. The concept of checks
and balance is inherent in the scheme.

LEGISLATIVE FUNCTIONS

1. Bill

A Bill is a draft statute which becomes law after it is passed by both the Houses of
Parliament and assented to by the President. All legislative proposals are brought before
Parliament in the forms of Bills.

Types of Bills and their Specific Features

i. Bills may be broadly classified into Government Bills and Private Members’ Bills depending
upon their initiation in the House by a Minister or a Private Member.

ii. Content wise, Bills are further classified into:

• Original Bills which embody new proposals, ideas or policies,

• Amending Bills which seek to modify, amend or revise existing Acts,

• Consolidating Bills which seek to consolidate existing law/enactments on a particular

subject,

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• Expiring Laws (Continuance) Bills which seek to continue Acts which, otherwise, would
expire on a specified date,

• Repealing and amending Bill to cleanse the Statute Book,

• Validating Acts to give validity to certain actions,

• Bills to replace Ordinances,

• Money and Financial Bills, and

• Constitution Amendment Bills.

iii. However, procedurally, the Bills are classified as-

• Ordinary Bills

• Money Bills and Financial Bills

• Ordinance Replacing Bills and

• Constitution Amendment Bills.

iv. Money Bills are those Bills which contain only provisions dealing with all or any of the
matters specified in sub-clauses (a) to (f) of clause (1) of article 110 of the Constitution.
Financial Bills can be further classified as Financial Bills Categories A and B. Category A
Bills contain provisions dealing with any of the matters specified in sub-clauses (a) to (f) of
clause (1) of article 110 and other matters and Category B Bills involve expenditure from the
Consolidated Fund of India.

Except Money Bills and Financial Bills, Category A, which can be introduced only in the
Lok Sabha, a Bill may originate in either House of Parliament. As per the provisions of
article 109 of the Constitution, the Rajya Sabha has limited powers with respect to Money
Bills. A Money Bill after having been passed by the Lok Sabha, and sent to Rajya Sabha for
its recommendations, has to be returned to Lok Sabha by the Rajya Sabha, with in a period
of fourteen days from the date of its receipt, with or without recommendations. It is open
for the Lok Sabha, to either accept or reject all or any of the recommendations of the Rajya
Sabha. If the Lok Sabha accepts any of the recommendations of the Rajya Sabha, the Money
Bill is deemed to have been passed by both Houses with the amendments recommended by
the Rajya Sabha and accepted by the Lok Sabha. If the Lok Sabha does not accept any of the
recommendations of the Rajya Sabha, the Money Bill is deemed to have been passed by
both Houses in the form in which it was passed by the Lok Sabha without any of the
amendments recommended by the Rajya Sabha. In case a Money Bill is not returned by the
Rajya Sabha to the Lok Sabha within a period of fourteen days from the date of its receipt, it
is deemed to have been passed by both Houses in the form in which it was passed by the
Lok Sabha after the expiry of said period.

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v. Financial Bill Category A can only be introduced in the Lok Sabha on the recommendation
of the President. However, once it has been passed by the Lok Sabha, it is like an ordinary
Bill and there is no restriction on the powers of the Rajya Sabha on such Bills.

vi. Financial Bill Category B and Ordinary Bills can be introduced in either House of
Parliament.

vii. Ordinance replacing Bills are brought before Parliament to replace an Ordinance, with or
without modifications, promulgated by the President under article 123 of the Constitution
of a subject. To provide continuity to the provisions of the Ordinance, such a Bill has to be
passed by the Houses of Parliament and assented to by the President within six weeks of
the reassembly of Parliament.

viii. As per the procedure laid down in the Constitution, Constitution Amendment Bills can be
of three types viz.,

• requiring simple majority for their passage in each House;

• requiring special majority for their passage in each House i.e., a majority of the total
membership of a House and by a majority of not less than two-thirds of the members of that
House present and voting (article 368); and

• requiring special majority for their passage and ratification by Legislatures of not less than
one- half of the States by resolutions to that effect passed by those Legislatures (proviso to
clause (2) of article 368). A Constitution Amendment Bill under article 368 can be
introduced in either House of Parliament and has to be passed by each House by special
majority.

ix. Under provisions of article 108 of the Constitution, if after a Bill passed by one House and
transmitted to the other House: -

• is rejected by the other House; or

• the Houses have finally disagreed as to the amendments to be made in the Bill; or

• more than six months elapse from the date of its receipt by the other House without the Bill
being passed by it, the President may, unless the Bill has elapsed by reason of a dissolution
of the Lok Sabha, summon them to meet in a joint sitting for the purpose of deliberating
and voting on the Bill. If at the joint sitting of the two Houses, the Bill, with such
amendments, if any, as are agreed to in joint sitting, is passed by a majority of the total
number of members of both Houses present and voting, it shall be deemed to have been
passed by both Houses. However, there is no provision of joint sittings on a Money Bill or a
Constitution Amending Bill.

x. After the dissolution of Lok Sabha all Bills except the Bills introduced in the Rajya Sabha
and pending therein, lapse.

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xi.

Law making process (How a Bill becomes an Act)

i. A Bill undergoes three readings in each House of Parliament. The First Reading consists of
the Introduction of a Bill. The Bill is introduced after adoption of a motion for leave to
introduce a Bill in either of the House. With the setting up of the Department-related
Parliamentary Standing Committees, invariably all Bills, barring Ordinance replacing Bills;
Bills of innocuous nature and Money Bills, are referred to these Committees for
examination and report within three months. The next stage on a Bill i.e., second reading
start only after the Committee summits its report on the Bill to the Houses. The Second
Reading consists of two stages: the ‘first stage’ consists of discussion on the principles of the
Bill and its provisions generally on any of the following motions: that the Bill be taken into
consideration; that the Bill be referred to a Select Committee of the Rajya Sabha ; that the
Bill be referred to a Joint Committee of the Houses with the concurrence of the Lok Sabha;
that it be circulated for the purpose of eliciting opinion thereon; and the ‘second stage’
signifies the clause-by clause consideration of the Bill as introduced or as reported by the
Select/Joint Committee. Amendments given by members to various clauses are moved at
this stage. The Third Reading refers to the discussion on the motion that the Bill (or the Bill
as amended) be passed or returned (to the Lok Sabha, in the case of a Money Bill) wherein
the arguments are based against or in favour of the Bill. After a Bill has been passed by one
House, it is sent to the other House where it goes through the same procedure. However,
the Bill is not again introduced in the other House, it is laid on the Table of the other House
which constitutes its first reading there.

ii. After a Bill has been passed by both Houses, it is presented to the President for his assent.
The President can assent or withhold his assent to a Bill or he can return a Bill, other than a
Money Bill, for reconsideration. If the Bill is again passed by the Houses, with or without
amendment made by the President, he shall not withhold assent there from. But, when a
Bill amending the Constitution passed by each House with the requisite majority is
presented to the President, he shall give his assent thereto.

iii. A Bill becomes an Act of Parliament after being passed by both the Houses of Parliament
and assented to by the President.

PARLIAMENTARY COMMITTEES

The work done by the Parliament in modern times is not only varied in nature, but
considerable in volume. The time at its disposal is limited. It cannot, therefore, give close
consideration to all the legislative and other matters that come up before it. A good deal of its
business is, therefore, transacted by what are called the Parliamentary Committees.

Parliamentary Committees play a vital role in the Parliamentary System. They are a vibrant link
between the Parliament, the Executive and the general public. The need for Committees arises
out of two factors, the first one being the need for vigilance on the part of the Legislature over
the actions of the Executive, while the second one is that the modern Legislature these days is
over-burdened with heavy volume of work with limited time at its disposal. It thus becomes

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impossible that every matter should be thoroughly and systematically scrutinized and
considered on the floor of the House. If the work is to be done with reasonable care, naturally
some Parliamentary responsibility has to be entrusted to an agency in which the whole House
has confidence. Entrusting certain functions of the House to the Committees has, therefore,
become a normal practice. This has become all the more necessary as a Committee provides the
expertise on a matter which is referred to it. In a Committee, the matter is deliberated at length,
views are expressed freely, and the matter is considered in depth, in a business-like manner
and in a calmer atmosphere. In most of the Committees, public is directly or indirectly
associated when memoranda containing suggestions are received, on-the-spot studies are
conducted and oral evidence is taken which helps the Committees in arriving at the
conclusions.

The Committees aid and assist the Legislature in discharging its duties and regulating its
functions effectively, expeditiously and efficiently. Through Committees, Parliament exercises
its control and influence over administration. Parliamentary Committees have a salutary effect
on the Executive. The Committees are not meant to weaken the administration, instead they
prevent misuse of power exercisable by the Executive. It may, however, be remembered that
Parliamentary control in the context of the functioning of the Committees may mean influence,
not direct control; advice, not command; criticism, not obstruction; scrutiny, not initiative; and
accountability, not prior approval. This, in brief, is the rationale of the Committee System. The
Committees have functioned in a non-partisan manner and their deliberations and conclusions
have been objective. This, in a large measure, accounts for the respect in which the
recommendations of the Parliamentary Committees are held.

Ad hoc and Standing Committees

Parliamentary Committees are of two kinds: Ad hoc Committees and the Standing Committees.
Ad hoc Committees are appointed for a specific purpose and they cease to exist when they
finish the task assigned to them and submit a report. The principal Ad hoc Committees are the
Select and Joint Committees on Bills. Others like the Railway Convention Committee, the
Committees on the Draft Five Year Plans and the Hindi Equivalents Committee were appointed
for specific purposes. Apart from the Ad hoc Committees, each House of Parliament has
Standing Committees like the Business Advisory Committee, the Committee on Petitions, the
Committee of Privileges and the Rules Committee, etc.

Other Committees

Of special importance is yet another class of Committees which act as Parliament's ‘Watch
Dogs' over the executive. These are the Committees on Subordinate Legislation, the Committee
on Government Assurances, the Committee on Estimates, the Committee on Public Accounts
and the Committee on Public Undertakings and Departmentally Related Standing Committees
(DRSCs). The Committee on Estimates, the Committee on Public Accounts, the Committee on
Public Undertakings and DRSCs play an important role in exercising a check over
governmental expenditure and Policy formulation.

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Parliamentary Committees: -

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3 INTERPRETATION OF STATUTES

INTRODUCTION

Meaning of ‘Statute’

A statute has been defined as "the written will of the legislature". Normally, it denotes the Act
enacted by the legislature. In simple terms, a written law passed by a legislative body (i.e.
Parliament or State Assemblies). Though the Constitution of India does not use the term 'statute'
but it uses the term "law". As per Article 13(3)(a) of Constitution of India, Law includes any
ordinance, order, bye-law, rule, regulation, notification, custom or usages made by Legislature.
Statutes are commonly divided into following classes:

1. codifying, when they codify the unwritten law on a subject;

2. declaratory, when they do not profess to make any alteration in the existing law, but merely
declare or explain what it is;

3. remedial, when they alter the common law, or the judge made (non-statutory) law;

4. amending, when they alter the statute law;

5. consolidating, when they consolidate several previous statutes relating to the same subject
matter, with or without alternations of substance;

6. enabling, when they remove a restriction or disability;

7. disabling or restraining, when they restrain the alienation of property;

8. penal, when they impose a penalty or forfeiture.

Meaning of 'Interpretation'

Interpretation is the process of establishing the true meaning of the words of the Law. It is
through interpretation that the Court applies the true intent of Legislature. Rule of Interpretation
is not required if the words of a statute have a plain and straightforward meaning. But in
circumstances when more than one meaning of the statutes are possible, Rules of Interpretation
will be applied to understand the intention of the Law. To put into other words: A judge should
ask himself the question: If the makers of the Act had themselves come across this luck in the
texture of it, how would they have straight ended it out? He must then do as they would have
done. A judge must not alter the material of which it is woven, but he can and should iron out
the creases.

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NEED FOR INTERPRETATION /CONSTRUCTION

The enacted Laws are drafted by legal experts, but they are expressed in language. No
1
language is so perfect as to leave no ambiguities.

A statute is an edict of the legislature. The intent of the legislature has to be gathered not
2 only from the language but also from the surrounding circumstances that prevailed at the
time when that particular law was enacted.

If any provision of the statute is open to two interpretations, the Court has to choose that
3
interpretation which represents the true intention of the legislature.

is not within human powers to foresee the manifold set of facts which may arise in the
4 future and even if it were, so it is not possible to provide for them in terms free from all
ambiguity.

PRESUMPTION IN THE INTERPRETATION OF STATUTE

Where the meaning of the statute is clear, there is no need for presumptions. But if the intention
of the legislature is not clean there are number of presumptions. These are: -

(a) That the words in a statute are used in literal sense unless otherwise defined.

(b) Liability attaches only where there is mens rea.

(c) That the state and govt. Institutions are deemed to be exempted.

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(d) That the legislature does not make mistake.

(e) The statue has been made with a view to exercise the powers given through it fairly.

RULES OF INTERPRETATION

RULES OF INTERPRETATION

Primary Rules Secondary Rules

1.Literal Construction Rule

2.Reasonable Construction Rule 1. Expressio Unis Est Exclusio Alterius

2. Contemporanea Expositio Est Optima Et

3.Mischief Rule Fortissima in Lege

3. Noscitur a Sociis 4. Strict and Liberal

4.Rule of Harmonious Construction Construction

5.Rule of Ejusdem Generis

1. Rule of Literal Construction/Interpretation

According to this rule, the words, phrases and sentences of a statute are ordinarily to be
understood in their natural, ordinary or popular and grammatical meaning unless such a
construction leads to an absurdity or the content or object of the statute suggests a different
meaning.

➢ Case Law Nand Prakash Vohra v State of HP

Held-Interpretation should not be given which would make other provisions redundant.
A law cannot be interpreted word to word in a different language. In this, the common and
normal meaning is given to rules. The objectives, natural, ordinary and popular are used

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interchangeably. They mean the grammatical or literal meaning, except when the words
are technical because technical words have technical meanings.

In simple words, this rule means to give simple straight forward and fair meaning to the
provisions of law. It is the simplest form of interpretation and also known as golden or
primary rule of interpretation.

2. Rule of Ejusdem Generis

The literal meaning of the term ejusdem generis is “of the same kind or species”. It literally
means, that while interpreting the provisions of law, if general words are given after some
specific words then while interpreting the general words, they must be treated as applying
to the matters previously mentioned. If any general words such a ‘like’, ‘so on’ etc. follow
specific words, the general words should include only those meaning which can be given
to the specific words. The rule requires that where specific words are all of one genus,
meaning of the general words shall be restricted to that genus only, unless there is
something to show that a wider meaning was intended.

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The rule of Ejusdem Generis applies only when the following conditions are satisfied:

• The statute contains an enumeration of specific words.

• The members of enumeration constitute a class or category.

• The class or category is not exhausted by the enumeration.

• There is no indication of different legislative intent.

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3. Mischief Rule or Heydon’s Rule

Numbers of laws are made to cure a mischief. The mischief rule of interpretation is based
on this reason and it states that interpretation should be made in such way that it is able to
cure that mischief for which the law had been made. Thus, law should be interpreted in
such a way so that it suppresses the mischief and advances the remedy.

It may be noted that mischief rule is applicable only when a particular rule is ambiguous
and capable of different meanings. In such a case, the meaning which can suppress the
mischief and advance the remedy should be taken and other meaning should be discarded.

In CIT v/s Sodra Devi it was held that where a law is clear and can have only one meaning, this
rule shall not apply.

MISCHIEF RULE

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4. Rule of Reasonable Construction or Doctrine of Ut Res Magis Valeat Quam Pareat.

The maximum Ut Res Magis Valeat Quam Pareat, i.e., the rule of reasonable construction
implies that Statute must be constructed sensibly and reasonably. Case Law Tirath Singh v
Bachittar Singh (1955). A statute or any enacting provision therein must be so constructed
so as to make it effective and operative. A construction should be rejected if it results in
hardship, serious inconvenience, injustice, absurdity, etc.

• In simple words, this rule means that if any word in a law can be given more than
one meaning, then the court gives the reasonable meaning relevant to the
circumstances.

• The scope of law should not be broadened unnecessarily.

• While interpreting the intention, the Court must match with the desired result.

If the litera-Iegis, i.e., the letter of the law is not clear, the interpretation must be according to the

purpose, policy, object or spirit of law.

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5. Harmonious Construction

When one rule or provision is interpreted then it must be interpreted along with other
provisions of law. There must not be conflict between the various provisions of law. When
a different section in an enactment is to be interpreted, it should be done in such a way that
the Act as a whole serves a useful purpose. It may be possible that different sections may
appear to mean contrary to each other or contradicting each other. Under such
circumstances, an attempt should be made to reconcile the provisions of the Act and an
effect should be made to give the effect to both the apparently contradictory provisions.
Thereby a head on clash between sections of the Act is avoided. This is known as
harmonious construction.

Effect should be given to both the laws, is the very essence of the rule of harmonious
construction. Thus, a construction that reduces one of the provisions to a dead letter is not
harmonious construction.

➢ Case Law- Raj Krishna v Vinod Kanungo in 1954

Where, in an enactment, there are two provisions which cannot be reconciled with each
other, they should be so interpreted, that if possible, effect may be given to both.

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SECONDARY RULES OF INTERPRETATION

1. Noscitur A Sociis

The rule literally means that “a word is known by its associates”. In other words, the
meaning of the word is to be judged by the company it keeps. When two or more words
having the analogous meaning are coupled together, then one word shall be constructed in
the manner deriving its meaning from other.

Quick Recap

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2. Expressio Unis Est Exdusio Alterius

The rule literally means that express mention of one thing implies the exclusion of another.
In other words, mention of one or more things of a particular class may be regarded as
silently excluding all other members of the class. Thus, where a statute uses two words or
expressions, one of which generally includes the other, the more general term is taken in a
sense excluding the less general one.

For example, Section 149 of Companies Act, 2013 mentions that individual can be a
director.

It means any person other than individual cannot be a director.

It may be noted that this maxim ought not to be applied, where its application leads to
inconsistency or injustice.

Quick Recap

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3. Strict and Liberal Construction

The words of a statute are to be constructed in the manner in which they are stated in the
Act. The statute is not to be regarded as including anything which is not within its letter
and its spirit and which is not clearly and manifestly described in the words of the statute
itself.

In other words, the law is interpreted by strict interpretation and spirit of law is to be used
strictly.

Where the usual meaning of the words falls short of the object of the legislature, a more
extended meaning may be attributed to them. It has been held in many cases that it is the
duty of the judge to make such construction of a statute as shall suppress the mischief and
advance the remedy or which fulfills the objective thought behind in enactment of that law.
This is called liberal construction.

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4. Contemporanea Expositio Est Optima Et Fortissima in Lege

The rule literally means that a contemporaneous exposition is the best and strongest in the
law. It is said that the best exposition of the statute or any other document is that which it
has received from contemporary authority. The language of the statute must be understood
in the sense in which it was understood when it was made.

It may be noted that the application of this doctrine is confined to the construction of
ambiguous language used in very old statutes where indeed the language itself might have
had a rather a different meaning on those days,

INTERNAL AND EXTERNAL AIDS IN INTERPRETATION

In coming to a determination as to the meaning of a particular Act, it is permissible to consider

two points, namely,

a. The external evidence derived from extraneous circumstances, such as, previous legislation
and decided cases etc.

b. The internal evidence derived from the Act itself. Internal Aids in Interpretation

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Internal Aids in Interpretation

The long title is set out at the head of the statute and gives a fairly full description
of the general purpose, object and scope of the Act. It is now settled that the long
Title
title of an Act is the part of the Act and it is legitimate to use it for the purpose of
interpreting the Act as a whole.

A preamble may afford useful light as to what a statute intends to reach and
Preamble another that, if an enactment is itself clear and unambiguous, no preamble can
qualify or cut down the enactment”.

Heading and The heading and title of a chapter may be referred to by the courts to resolve any
Title of a doubt as to ambiguous words used therein. However, they cannot be resorted to
Chapter restrict the plain or ordinary meaning of the words in the Chapter,

Marginal notes are often found printed at the side of the sections in an Act. They
Marginal
purport to summarize the effect of the sections and have sometimes be used as
Notes
an aid to interpretation.

It is common to find in statutes “definitions” of certain words and expressions

used elsewhere in the body of the statute. The object of such a definition is to
Interpretation avoid the necessity of frequent repetitions in describing all the subject-matter to
on Clauses which the word or expression so defined is intended to apply. When a word has
been defined in the interpretation clause, prima facie that definition governs
whenever that word is used in the body of the statute.

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The proper function of a proviso is to except and to deal with a case which would
Proviso otherwise fall within the general language of the main enactment, and its effect
is confined to the case.

Illustrations attached to sections are part of the statute and they are useful so far
Illustrations as they help to furnish same indication of the presumable intention of the
legislature.

An explanation is at times appended to a section to explain the meaning of

Explanation
words contained in the section. It becomes a part and parcel of the enactment.

The schedules form a part of the statute and must be read together with it for all
purposes of construction. Schedules are added in any statue giving details of
certain things which a section refers. This avoids making a section unnecessary
Schedules lengthy. But if there is any conflict between the enactment / provisions and
schedule, the enactment shall prevail.

[Ramchand Textiles v. Sales Tax Officer]

The fact that the Parliament has passed the provisions of the statement of objects
Statement of and reasons gives sanction to them and thus they are a valid aid in the
Objects and interpretation of provisions.
Reasons

External Aids in Interpretation

Court is entitled to take into account “such external or historical facts as may
Parliamentary be necessary to understand the subject-matter of the statute”, or to have regard
History to “the surrounding circumstances” which existed at the time of passing of the
statute.

Historical facts It has already been established that the court is entitled to take into account
and such external or historical facts as may be necessary to understand the subject
Circumstances matter of the statute.

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Reference to The report of a Select Committee or other Committee on whose report an

Reports of enactment is based, can be looked into “so as to see the background against
Committees which the legislation was enacted.

It has already been stated that a statute must be read as a whole as words are
Reference to to be understood in their context. Extension of this rule of context, permits
other Statutes reference to other statutes in “Pari materia” i.e. statutes dealing with the same
subject matter or forming part of the same system.

Pari materia: means dealing with same matter. Statutes are in Pari Materia
when the subject matter of the statutes are same or similar. It is not that the two
Pari Materia statute should be identical before considering one to be Pari Materia with
others.

When a word is not defined in the Act itself, it is permissible to refer to

Dictionaries dictionaries to find out the general sense in which that word is understood in
common parlance.

Use of foreign decisions of countries following the same system of

Use of Foreign
jurisprudence as ours and rendered on statutes in Pari Materia has been
Decisions
permitted by practice in Indian Courts.

The statutes are intended to accord with the established principles of public
Public policy policy. Therefore, if legislation lends itself to double interpretation, the
interpretation that achieves this objective should be preferred.

How to Use – ‘OR’ / ‘AND’

'OR' is normally considered disjunctive and 'AND' is normally regarded conjunctive.

However, in certain situations they may have to be read as vice-versa to give effect to the manifest
intention of the legislature as disclosed from the context. This would be so where the literal
reading of the words produces an unintelligible or absurd result.

In such special situation, 'AND' may be read for 'OR' and 'OR' for 'AND' even though the result
of so modifying the words is less favorable to the subject, provided that the intention of the
legislature is otherwise quite clear.

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4 GENERAL CLAUSES ACT, 1897

INTRODUCTION

The General Clauses Act, 1897 was enacted on March 11, 1897. The general definitions provided
under the Act is applicable to all Central Acts and Regulation where there is no definition in the
Act that conflicts with the provisions of the Central Acts or regulations. It does not confine to a
particular branch of law rather extends to various enactments and branches of law.
This Act provides various definitions and interpretation rules which shall be applicable to all
Central Acts if there is no specific definition in that particular Act. The General Clauses Act, 1897
applies to Central legislature. It does not apply to any State enactments, as every State has its
own General Clauses Act that will apply to the legislature of the State.

OBJECT/PURPOSE/IMPORTANCE OF GENERAL CLAUSES ACT

• To shorten the language of Central legislations.

• To provide uniformity by defining common legal terminology.

• To provide for various definitions which help to interpret various statutes.

• To avoid unnecessary repetitions of same words in various enactments.

• To provide for general definitions of words which are not specifically defined under a given
Act.

• This Act also helps to resolve any conflict between 2 or more Central legislation.

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KEY DEFINITIONS

Section 3 of the General Clause Act provides that in this Act, and in all Central Acts and
Regulations made after the commencement of this Act, unless there is anything repugnant in the
subject or context

S.NO. DEFINITION PROVISIONS

Abet with its grammatical variations and cognate expressions,

1 Abet
shall have the same meaning as in the Indian Penal Code

Act used with reference to an offence or a civil wrong, shall

2 Act include a series of acts, and words which refer to acts done
extend also to illegal omissions

Affidavit shall include affirmation and declaration in the case

3 Affidavit of persons by law allowed to affirm or declare instead of
swearing

Barrister shall mean a barrister of England or Ireland, or a

Barrister
4 member of the Faculty of Advocates in Scotland

British India shall mean, as respects the period before the

commencement of Part III of Government of India Act, 1935,
all territories and places within His Majesty's dominions
which were for the time king governed by His Majesty through
the Governor General of India or through any Governor or
Officer subordinate to the Governor General of India, and as
British India
5 respects any period after that date and before the date of
establishment of the Dominion of India means all territories
for the time being comprised within the Governor' Provinces
and the Chief Commissioners' Provinces, except that a
reference to British India in an Indian law passed or made
before the commencement of Part III of the Government of
India Act,1935, shall not include a reference to Bearer

British possession shall mean any part of Her Majesty's

British possession dominions exclusive of the United Kingdom, and where parts
of those dominions are under both a Central and a Local
6
Legislature, all part under the Central Legislature shall, for the
purposes of this definition, be deemed to be one British
possession

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Central Act shall mean an Act of Parliament and shall include

a. Act of the Dominion legislature or of the Indian Legislature

passed before the commencement of the Constitution, and
Central Act
7
b. An Act made before such commencement by the Governor
General in Council or the Governor General, acting in a
legislative capacity.

Chapter Chapter' shall mean a Chapter of the Act or Regulation in

8 which the word occurs;

Chief Controlling Revenue Authority" or "Chief Revenue

Authority" shall mean

a. In a State where there is a Board of Revenue, that Board;

b. In a State where there is a Revenue Commissioner, that

Commissioner;
Chief Controlling
9
Revenue Authority c. In Punjab, the Financial Commissioner; and

d. elsewhere, such authority as, in relation to matters

enumerated in List I in the Seventh Schedule to the
Constitution, the Central Government, and in relation to
other matters, the state Government, may by notification
in the Official Gazette, appoint

Collector shall mean, in a Presidency-town, the Collector of

Calcutta, Madras or Bombay, as the case may be, and
10 Collector elsewhere the chief officer-in-charge of the revenue-
administration of a district

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Central Government shall, -

a. In relation to anything done before the commencement of

the Constitution, mean the Governor General or the
Governor General in Council, as the case may be; and shall
Inc. hide, -

• In relation to functions entrusted under sub-section (1) of

Section 124 of the Government of India Act, 1935, to the
Government of a Province, the Provincial Government
acting within the scope of the authority given to it under
that sub-section; and

• in relation to the administration of a Chief

Commissioner’s Province, the Chief Commissioner
acting within the scope of the authority given to him
under sub-section (3) of section 94 of the said Act; and

b. In relation to anything done or to be done after the

commencement of the Constitution, mean the President;
Central Government and shall include, -
11

• in relation to Functions entrusted under clause (1) of

article 258 of the Constitution, to the Government of a
State, the State Government acting within the scope of the
authority given to it under that clause;

• In relation to the administration of a Part C State before

the Commencement of the Constitution (Seventh
Amendment) Act, 1956, the Chief Commissioner or the
Lieutenant- governor or the Government of a
neighboring State or other authority acting within the
scope of the authority acting within the authority given
to him or it under Article 239 or Article 243 of the
Constitution, as the case may be; (and)

In relation to the administration of a Union territory, the

administrator thereof acting within the scope of the
authority given to him under article 239 of the
Constitution

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(a) In any Central Act passed after the commencement of Part III
of the Government of India Act, 1935, shall mean any part of His
Majesty's dominions exclusive of the British Islands, the
Dominions of India and Pakistan (and before the establishment of
those Dominions, British India), any Dominions as defined in the
Statute of Westminster, 1931, any Province or State forming part
of any of the said Dominions, and British Burma; and
Colony
12

(b) In any Central Act passed before the commencement of Part

III of the said Act, mean any part of His Majesty's dominions
exclusive of the British Islands and of British India and in either
case where parts of those dominions are under both a Central and
Local Legislature, all parts under the Central Legislature shall, for
the purposes of this definition, be deemed to be one colony.

Commencement used with reference to an Act or regulation, shall

13 Commencement mean the day on which the Act or regulation comes into force;

Commissioner shall mean the chief officer-in-charge of the

14 Commissioner revenue administration of a division

15 Constitution shall mean the Constitution of India

Constitution

Consular officer" shall include consul-general, consul, vice-

consul, consular agent, pro-consul and any person for the time
Consular Officer being authorized to perform the duties of consul-general, consul,
16
vice-consul or consular agent

District Judge shall mean the Judge of a principal civil court of

District Judge original jurisdiction, but shall not include a High Court in the
exercise of its ordinary or extraordinary original civil jurisdiction
17

Document shall include any matter written, expressed or

described upon any substance by means of letters, figures or
marks, or by more than one of those means which is intended to
18 Document
be used, or which may be used, for the purpose of recording that
matter

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Enactment shall include a regulation (as hereinafter defined) and
any regulation of the Bengal, Madras or Bombay Code, and shall
Enactment
19 also include any provision contained in any Act or in any such
regulation as aforesaid

Father in the case of any one whose personal law permits

Father
20 adoption, shall include an adoptive father

Financial year" shall mean the year commencing on the first day
Financial year
21 of April

Government or the Government" shall include both the Central

Government
22 Government and any State Government

Government securities" shall mean securities of the Central

Government or of any State Government, but in any Act or
Government securities
23 regulation made before the commencement of the Constitution
shall not include securities of the government of any Part B State

High Court used with reference to civil proceedings, shall mean

the highest civil court of appeal (not including the Supreme Court)
High Court
24 in the part of India in which the Act or regulation containing the
expression operates

Immovable property shall include land, benefits to arise out of

Immovable property land, and things attached to the earth, or permanently fastened to
25
anything attached to the earth

Imprisonment Imprisonment" shall mean imprisonment of either description as

26
defined in the Indian Penal Code

India shall mean-

a. as respects any period before the establishment of the

Dominion of India, British India together with all territories of
India
27 Indian Rulers then under the suzerainty of His Majesty, all
territories under the suzerainty of such an Indian Ruler, and
the tribal areas;

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4.7
b. as respects any period after the establishment of the Dominion
of India and before the commencement of the Constitution, all
territories for the time being included in that Dominion; and

c. as respects any period after the commencement of the

Constitution, all territories for the time being comprised in the
territory of India;

Indian law shall mean any Act, ordinance, regulation, rule, order,
bye-law or other instrument which before the commencement of
the Constitution had the force of law in any Province of India or
Indian law part thereof, or thereafter has the force of law in any Part A State
28
or Part C State or Part thereof, but does not include any Act of
Parliament of the United Kingdom or any Order in Council, rule
or other instrument made under such Act

Indian State shall mean any territory which the Central

Government recognized as such a State before the commencement
29 Indian State of the Constitution, whether described as a State, an Estate, a Jagir
or otherwise

local authority shall mean a municipal committee, district board,

body of port commissioners or other authority legally entitled to,
30 Local authority or entrusted by the government with the control or management
of a municipal or local fund

Magistrate shall include every person exercising all or any of the

Magistrate powers of a Magistrate under the Code of Criminal Procedure for
31
the time being in force

Master used with reference to a ship, shall mean, any person

Master (except a pilot or harbor-master) having for the time being control
32
or charge of the ship

Merged territories shall mean the territories which by virtue of an

order made under section 290A of the Government of India Act,
1935, were immediately before the commencement of the
Merged territories
33 Constitution being administered as if they formed part of a
Governor’s Province or as if they were a Chief Commissioner's
Province

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Month shall mean a month reckoned according to the British
Month
34 calendar

Movable property shall mean property of every description,

Movable property
35 except immovable property

Oath shall include affirmation and declaration in the case of

Oath
36 persons by law allowed to affirm or declare instead of swearing

Offence shall mean any act or omission made punishable by any

Offence
37 law for the time being in force

Official Gazette" or "Gazette" shall mean the Gazette of India or

Official Gazette
38 the Official Gazette of a State

Person shall include any company or association or body of

Person
39 individuals, whether incorporated or not

Political Agent shall mean, -

a. in relation to any territory outside India, the Principal Officer,

by whatever name called, representing the Central
Government in such territory; and
40 Political Agent b. in relation to any territory within India to which the Act or
regulation containing the expression does not extend, any
officer appointed by the Central Government to exercise all or
any of the powers of a Political Agent under that Act or
regulation

Presidency-town shall mean the local limits for the time being of
the ordinary original civil jurisdiction of the High Court of
41 Presidency- town
Judicature at Calcutta, Madras or Bombay, as the case may be

Province" shall mean a Presidency, a Governor's Province, a

Province Lieutenant Governor’s Province or a Chief Commissioner’s
42
Province

Provincial Act shall mean an Act made by the Governor in

Council, Lieutenant Governor in Council or Chief Commissioner
Provincial Act
43 in Council of a Province under any of the Indian Councils Acts or
the Government of India Act, 1915, or an Act made by the Local
Legislature or the Governor of a Province under the Government

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4.9
of India Act, or an Act made by the Provincial Legislature or
Governor of a Province or the Coorg Legislative Council under the
Government of India Act, 1935

Provincial Government shall mean, as respects anything done

before the commencement of the Constitution, the authority or
Provincial Government
44 person authorized at the relevant date to administer executive
government in the Province in question

Public nuisance shall mean a public nuisance as defined in the

Public Nuisance
45 Indian Penal Code

Year Year shall mean a year reckoned according to the British calendar.
46

Ship shall include every description of vessel used in navigation

not exclusively propelled by oars;

Ship "Sign", with its grammatical variations and cognate expressions,

47
shall, with reference to a person who is unable to write his name,
include "mark", with its grammatical variations and cognate
expressions

State Government;
a. As respects anything done before the commencement of the
Constitution, shall mean, in a Part A State, the Provincial
Government of the corresponding Province, in a Part B State,
the authority or person authorized at the relevant date to
exercise executive government in the corresponding Acceding
State, and in a Part C State, the Central Government;

b. As respects anything done after the commencement of the

Constitution and before the commencement of the
State Government Constitution (Seventh Amendment) Act, 1956, shall mean, in
48
a Part A State, the Governor in a Part B State, the Rajpramukh,
and in a Part C State, the Central Government;

c. As respects anything done or to be done after the

commencement of the Constitution (Seventh Amendment)
Act, 1956, shall mean, in a State, the Governor, and in a Union
Territory, the Central Government; and shall, in relation to
functions entrusted under Article 258A of the Constitution to
the Government of India, include the Central Government
acting within the scope of the authority given to it under that
article;

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Section 4- Application of foregoing definitions to previous enactments

rd
1. Application of terms/expression to all Central Acts made after the 3 day of January, 1868,
th
and to all regulations made on or after the 14 day of January, 1887.The definitions in section
3 of the following words and expressions, that it to say, “affidavit”, “immovable property”,
“imprisonment”, “month”, “movable property’, “oath”, “person”, “section”, and “year”
apply also, unless there is anything repugnant in the subject or context, to all Central Acts
made after the third day of January, 1868, and to all Regulations made on or after the
fourteenth day of January, 1887.

2. Application of terms/expression to all Central Acts and Regulations made on or after the
th
14 day of January, 1887.The definitions given in section 3, of the following words and
expressions, that is to say, “commencement”, “financial year”, “offence”, “registered”,
“schedule”, “sub-section” and “writing” apply also, unless there is anything repugnant in
the subject or context, to all Central Acts and Regulations made on or after the fourteenth day
of January, 1887.

Section 9- Commencement and Termination of time

1. In any Central Act or Regulation, it shall be sufficient,

a. for the purpose of excluding the first in a series of days, to use the word “from”; and for the
purpose of including the last in a series of days, to use the word “to”.

b. to all Regulations made on or after the fourteenth day of January. 1887.

2. This section applies also to all Central Acts made after the third day of January, 1868, and

Example: If a Company declares dividend for its Shareholders in its Annual General Meeting
held on 30/09/2016. Under the provisions of the Companies Act, 2013 Company is required to
pay declared dividend within 30 days from the date of declaration i.e. from 01/10/2016 to
30/10/2016. In this series of 30 days, 30/09/2016 will be excluded and last 30 th day i.e.
30/10/2016 will be included.

Section 10-Computation of Time

1. Where, by any Central Act or regulation made after the commencement of this Act, any act
or proceeding is directed or allowed to be done or taken in any Court or office on a certain
day or within a prescribed period, then, if the Court or office is closed on that day or the last
day of the prescribed period, the act or proceeding shall be considered as done or taken in
due time if it is done or taken on the next day afterwards on which the Court or office is open:

Provided that nothing in this section shall apply to any act or proceeding to which the Indian
Limitation Act, 1877, applies.

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2. This section applies also to all Central Acts and Regulations made on or after the fourteenth
day of January, 1887.

Example: Mr. A defaulted in making payment to Mr. B on 3ls! December, 2016. The right of
Mr. B to institute a legal suit against Mr. A immediately starts from the day succeeding the
day of default i.e. from 1st January, 2017 till 31st December, 2019 i.e. 3 years from the date of
default. It means that Mr. B can file petition to the court of law on or before 31st December,
2019 and if such day seems to be Sunday then the Limitation period shall be deemed as
extended to 1st January, 2020.

➢ Case Law K. Soosalrathnam v Div. Engineer N.H.C. Tirunelveli (1995)

Since the last date of the prescribed period was subsequent to the date of notification declared
to be a holiday on the basis of the principles laid down in this section the last date of
prescribed period for obtaining the lender schedules was extended to the next working day.

Section 11- Measurement of Distance

In the measurement of any distance, for the purpose of any Central Act or Regulation made after
the commencement of this Act, that distance shall, unless a different intention appears, be
measured in a straight line on a horizontal plane.

Section 12- Duty to be taken pro rata in enactments

Where, by any enactment now in force or hereafter to be in force, any duty of customs or excise,
or excise, or in the nature thereof, is leviable on any given quantity, by weight, measure or value
of any goods or merchandise, then a like duty is leviable according to the same rate on any greater
or less quantity.

Section 13- Gender and Number

In all Central Acts and Regulations, unless there is anything repugnant in the subject or context-

1. words importing the masculine gender shall be taken to include females;

2. words in the singular shall include the plural, and vice versa.

Example: The word “He” includes “She” similarly the word “Employee” includes “all
employees”

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RETROSPECTIVE AMENDMENTS

The 'rule' means rule made in exercise of the authority of any legislation and the regulation issued
as a rule framed under the legislation.

Where legislation is not specifically mentioned to come into force on a

prescribed date, it shall be implemented on the day that it receives the assent
Effective date of the Governor General before the commencement of the Indian
Constitution and thereafter of the President.

The regulation shall come into force instantly on the ending of the day prior
to its commencement unless expressly provided.

A particular date
of enforcement of The Act will become effective on the given specified date
the Act specified

Section 5 of the General Clauses Act will apply which lays down that
effective date of enforcement of the Act will be as follows:

No particular date If the Central Act is made before the

The Act will become effective on the
of enforcement of commencement of Constitution of
date it received assent of the
the Act specified India
Governor General

If the Central Act is made after the The Act will become effective on the
commencement of Constitution of date it received assent of the
India President

Example 1: The Companies (Amendment) Act, 2017 received assent of the President on 3rd
January 2018 and in absence of specific date for a given section the date of assent of President i.e.
3rd January will be treated as effective date for those sections.

Example 2: SEBI (Prohibition of Insider Trading) Regulations, 2015 was notified on 15th January,
2015 and clearly laid down that the Regulations will be effective on expiry of 120 days of the
notification i.e. on 15th May, 2015. So the effective date of enforcement will be 15th May, 2018.

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POWERS AND FUNCTIONARIES

The Power and Functionaries are provided under section 14 to section 19 of the General Clause

Act, 1897.

1. Powers conferred to be exercisable from time to time

• Where, by any Central Act or Regulation made after the commencement of this Act, any
power is conferred, then unless a different intention appears that power may be exercised
from time to time as occasion requires.

• This section applies also to all Central Acts and Regulations made on or after the fourteenth
day of January, 1887. [Section 14]

2. Power to appoint to include power to appoint ex officio

Where, by any Central Act or Regulation, a power to appoint any person to fill any office or
execute any function is conferred, then, unless it is otherwise expressly provided, any such
appointment, if it is made after the commencement of this Act, may be made either by name
or by virtue of office. [Section 15]

3. Power to appoint to include power to suspend or dismiss

Where, by any Central Act or Regulation, a power to make any appointment is conferred,
then, unless a different intention appears, the authority having for the time being power to
make the appointment shall also have power to suspend or dismiss any person appointed
whether by itself or any other authority in exercise of that power. [Section 16]

4. Substitution of functionaries

• In any Central Act or Regulation, made after the commencement of this Act, it shall be
sufficient, for the purpose of indicating the application of a law to every person or number of
persons for the time being executing the function of an office, to mention the official title of

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4.14
the officer at present executing the functions, or that of the officer by whom the functions are
commonly executed.

• This section applies also to all Central Acts made after the third day of January, 1868, and to
all Regulations made on or after the fourteenth day of January, 1887. [Section 17]

5. Successors

• In any Central Act or Regulation made after the commencement of this Act, it shall be
sufficient, for the purpose of indicating the relation of a law to the successors of any
functionaries or of corporations having perpetual succession, to express its relation to the
functionaries or corporations.

• This section applies also to all Central Acts made after the third day of January, 1868, and to
all Regulations made on or after the fourteenth day of January, 1887. [Section 18]

6. Officials chiefs and sub-ordinates

• In any Central Act or Regulation made after the commencement of this Act, it shall be
sufficient, for the purpose of expressing that a law relative to the chief or superior of an office
shall apply to the deputies or subordinates lawfully performing the duties of that office in
the place of their superior, to prescribe the duty of the superior.

• This section applies also to all Central Acts made after the third day of January, 1868, and to
all Regulations made on or after the fourteenth day of January, 1887. [Section 19]

7. Power as to Orders, Rules etc., made under Enactments

• Section 21 of the General Clause Act deals with power to issue, to include power to add to,
amend, vary or rescind notifications, orders, rules or bye-laws.

• It says where, by any Central Act or Regulation, a power to issue notifications, orders, rules
or bye-laws is conferred, then that power includes a power, exercisable in the like manner
and subject to the like sanction and conditions (if any), to add to, amend, vary or rescind any
notifications, orders, rules or bye-laws so issued.

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GENERAL RULE OF CONSTRUCTION

Rule of Construction is a rule used for interpreting legal instruments, especially contracts and
statutes. Very few states have codified the rules of construction. Most states treat the rules as
mere customs not having the force of law.

When ambiguous language is given its exact and technical meaning, and no other equitable
considerations or reasonable implications are made, there has been a strict or literal construction
of the unclear term.

A liberal or equitable construction permits a term to be reasonably and fairly evaluated so as to

implement the object and purpose for which the document is designed. This does not mean that
the words will be strained beyond their natural or customary meanings.

A rule of construction is a principle that either governs the effect of the ascertained intention of
a document or agreement containing an ambiguous term or establishes what a court should do
if the intention is neither express nor implied. A regular pattern of decisions concerning the
application of a particular provision of a statute is a rule of construction that governs how the
text is to be applied in similar cases.

Example

Contra proferentem and Ejusdem Generic are two examples of rules of construction. According
to Contra Proferentem Rule, if a clause in a contract appears to be ambiguous, it should be
interpreted against the interests of the person who insisted that the clause be included. Likewise,
Ejusdem Generis Rule states that where a law lists specific classes of persons or things and then
refers to them in general, the general statements only apply to the same kind of persons or things
specifically listed.

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KINDS OF RULES OF CONSTRUCTION AND INTERPRETATION

1. Kinds of Rule of Construction and Interpretation the Literal Rule of Interpretation

The Primary and important rule of interpretation is called the Literal Rule. This rule stated
that the only rule for the construction of Acts of Parliament is that they should be construed
according to the intent of the Parliament which passed the Act. If the words of the statute are
in then serves precise and unambiguous, then no more can be necessary than to expound
those words in their natural and ordinary sense. The words themselves alone do, in such case,
best declare the intention of the law giver.

But if any doubt arises from the terms employed by the Legislature, it has always been held
a safe mean of collecting the intention to call in aid the ground and cause of making the
statute, and to have recourse to the preamble, which, according to Chief Justice Dyer is "a key
to open the minds of the makers of the Act, and the mischiefs which they intend to redress".

2. Purposive Rule of Interpretation

In Halsbury’s Laws of England, it is stated

"Parliament intends that an 'enactment shall remedy a particular mischief and it is

therefore presumed that Parliament intends that the court, when considering, in relation
to the facts of the instant case, which of the opposing constructions of the enactment
corresponds to its legal meaning, should find a construction which applies the remedy
provided by it in such a way as to suppress that mischief

Numbers of laws are made to cure a mischief. The mischief rule of interpretation is based on
this reason and it states that interpretation should be made in such way that it is able to cure

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4.17
that mischief for which the law had been made. Thus, law should be interpreted in such a
way so that it suppresses the mischief and advances the remedy.

➢ Case Law- CIT v Sodra Devi CIT v Sodra Devi

It may be noted that mischief Rile is applicable only when a particular rule is ambiguous and
capable of different meanings. In such a case, the meaning which can suppress the mischief
and advance the remedy should be taken and other meaning should be discarded. Thus,
where a law is clear and can have only one meaning, this rule shall not apply.

This Rule has been applied for the first time in Heydon’s Case and thus it is also popularly
known as Heydon’s Rule.

3. Harmonious Construction

According to the principle of harmonious interpretation, when there are two provisions in a
statute, which are in apparent conflict with each other, they should be interpreted such that effect
can be given to both and that construction which renders either of them inoperative and useless
should not be adopted except in the last resort,

➢ Case Law- Raj Krishna v Binod Kanungo

This principle is illustrated in the case of Raj Krishna v Binod Kanungo

In this case, two provisions of Representation of People Act, 1951, which were in apparent
conflict, were brought forth. Section 33(2) says that a Government Servant can nominate or
second a person in election but section 123(8) says that a Government Servant cannot assist
any candidate in election except by casting his vote. The Supreme Court observed that both
these provisions should be harmoniously interpreted and held that a Government Servant
was entitled to nominate or second a candidate seeking election in State Legislative assembly.
This harmony can only be achieved if Section 123(8) is interpreted as giving the Government
servant the right to vote as well as to nominate or second a candidate and forbidding him to
assist the candidate in any other manner.

4. Rule of Beneficial Construction

Beneficent construction involves giving the widest meaning possible to the statutes. When
there are two or more possible ways of interpreting a section or a word, the meaning which
gives relief and protects the benefits which are purported to be given by the legislation,
should be chosen. A beneficial statute has to be construed in its correct perspective so as to
fructify the legislative intent. Although beneficial legislation does receive liberal
interpretation, the courts try to remain within the scheme and not extend the benefit to those
not covered by the scheme. It is also true that once the provision envisages the conferment of
benefit limited in point of time and subject to the fulfillment of certain conditions, their non-
compliance will have the effect of nullifying the benefit. There should be due stress and
emphasis to Directive Principles of State Policy and any international convention on the
subject.

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5. Strict Construction of Penal Statutes

The general rule for the construction of a penal statute is that it would be strictly interpreted,
that is, if two possible and reasonable constructions can be put upon a penal provision, the
Court must lean towards that construction which exempts the subject from penalty rather
than the one which imposes a penalty. A penal statute has to be construed narrowly in favor
of the person proceeded against. This rule implies a preference or the liberty of the subject,
in case of ambiguity in the language of the provision. The courts invariably follow the
principle of strict construction in penal statutes. In constructing a penal Act, if a reasonable
interpretation in a particular case can avoid the penalty the Court adopts that construction.

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5 ADMINISTRATIVE LAW
ADMINISTRATIVE LAW
INTRODUCTION

Administrative law is that branch of law that deals with powers, functions and responsibilities
of various organs of the state.

There is no single universal definition of ‘administrative law’ because it means different things

To different theorists.

According to Albert Venn Dicev, the great Ivor Jennings defined administrative law as the
British constitutional scholar, administrative law relating to administration. It determines
law relates to that portion of a nation’s legal the organization, powers and duties of
system which determines the legal status and administrative authorities. This formulation is
liabilities of all state officials, which defines the too broad and general as it does not
rights and liabilities of private individuals in differentiate between administrative and
their dealings with public officials, and which constitutional law. It excludes the manner of
specifies the procedure by which those rights exercise of powers and duties.
and liabilities are enforced.

Need for Administrative Law

The modem state typically has three organs- legislative, executive and judiciary. Traditionally,
the legislature was tasked with the making of laws, the executive with the implementation of the
laws and judiciary with the administration of justice and settlement of disputes.

However, this traditional demarcation of role has been found wanting in meeting the challenges
of present era. The legislature is unable to come up with the required quality and quantity of
legislations because of limitations of time, the technical nature of legislation and the rigidity of
their enactments. The traditional administration of justice through judiciary is technical,
expensive and dilatory. The states have empowered their executive (administrative) branch to
fill in the gaps of legislature and judiciary. This has led to an all-pervasive presence of
administration in the life of a modem citizen. In such a context, a study of administrative law
assumes great significance.

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The ambit of administration is wide and embraces following elements within its ambit: -

1. It makes policies

2. It exercises legislative powers and issues rules, bye- laws and orders of a general nature

3. It executes, administers and adjudicates the law

Sources of Administrative Law

There are four principal sources of administrative law in India: -

a. Constitution of India

It is the primary source of administrative law. Article 73 of the Constitution provides that
the executive power of the Union shall extend to matters with respect to which the
Parliament has power to make laws. Similar powers are provided to States under Article
62. The Constitution also envisages tribunals, public sector and government liability which
are important aspects of administrative law.

b. Acts or Statutes

Acts passed by the central and state governments for the maintenance of peace and order,
tax collection, economic and social growth empower the administrative organs to carry on
various tasks necessary for it. These Acts list the responsibilities of the administration, limit
their power in certain respects and provide for grievance redressal mechanism for the
people affected by the administrative action.

c. Ordinances, Administrative directions, notifications and Circulars

Ordinances are issued when there are unforeseen developments and the legislature is not
in session and therefore cannot make laws. The ordinances allow the administration to take
necessary steps to deal with such developments. Administrative directions, notifications
and circulars are issued by the executive in the exercise of power granted under various
Acts.

d. Judicial decisions

Judiciary is the final arbiter in case of any dispute between various wings of government
or between the citizen and the administration. In India, we have the supremacy of
Constitution and the Supreme Court is vested with the authority to interpret it. The courts
through their various decisions on the exercise of power by the administration, the liability
of the government in case of breach of contract or tortuous acts of Governments servants
lay down administrative law which guide their future conduct.

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Administrative Discretion

It means the freedom of an administrative authority to choose from amongst various alternatives
but with reference to rules of reason and justice and not according to personal whims. The
exercise of discretion should not be arbitrary, vague and fanciful, but legal and regular.

The government cannot function without the exercise of some discretion by its officials. It is
necessary because it is humanly impossible to lay down a rule for every conceivable eventuality
that may arise in day-to-day affairs of the government. It is, however, equally true that discretion
is prone to abuse. Therefore, there needs to be a system in place to ensure that administrative
discretion is exercised in the right manner.

Administration has become a highly complicated job needing a good deal of flexibility apart from
technical knowledge, expertise and know-how. Freedom to choose from various alternatives
allows the administration to fashion its best response to various situations. If a certain rule is
found to be unsuitable in practice, the administration can change, amend or abrogate it without
much delay. Even if the administration is dealing with a problem on a case to case basis it can
change its approach according to the exigency of situation and the demands of justice.

Judicial Control over Administrative Actions

Any country which claims to have a rule of law cannot have a government authority which has
no checks on its power. Administrative organs have wide powers and their exercise of discretion
can be vitiated by a number of factors. Therefore, the government must also provide for proper
redressed mechanism. For India, it is of special significance because of the proclaimed objectives
of Indian polity to build a socialistic pattern of society that has led to huge proliferation of
administrative agencies and processes.

In India the modes of judicial control of administrative action can be conveniently grouped into
three heads:

A. Constitutional

B. Statutory

C. Equitable

A. CONSTITUTIONAL

The Constitution of India is supreme, and all the organs of state derive their existence from
it, Indian Constitution expressly provides for judicial review. Consequently, an Act passed
by the legislature is required to be in conformity with the requirements of the Constitution
and it is for the judiciary to decide whether or not that Act is in conformity with the
Constitutional requirements. If it is found in violation of the Constitutional provisions the
Court has to declare it unconstitutional and therefore, void.

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Judicial Review

The biggest check over administrative action is the power of judicial review. Judicial review is
the authority of Courts to declare void the acts of the legislature and executive, if they are found
in violation of provisions of the Constitution. Judicial Review is the power of the highest Court
of a jurisdiction to invalidate on Constitutional grounds, the acts of other Government agency
within that jurisdiction.

S.NO. CASE NAME PROVISIONS

While exercising the power of judicial review it does sit as a court of

appeal but merely reviews the manner in which the decision was
made, particularly as the court lacks the expertise to correct the
administrative decision and if a review of the administrative decision
is permitted, it will be substituting its own decision which itself maybe
fallible. The court is to confine itself to the question of legality.

Mansukhlal Vithal Its concern should be:

das Chauhan v
1 State of Gujarat, • whether a decision-making authority exceeding its power
AIR 1997
• committed an error of law

• committed a breach of rules of natural justice

• reached a decision which no reasonable tribunal would have

reached,

• abused its power

JUDICIAL REVIEW IS EXERCISED AT TWO STAGES

At the stage of delegation of discretion at the stage of exercise of

administrative discretion.

i. Judicial review at the stage of delegation of discretion

Any law can be challenged on the ground that it is violative of the Constitution and
therefore laws conferring administrative discretion can thus also be challenged under the
Constitution. In the case of delegated legislation, the Constitutional courts have often been
satisfied with vague or broad statements of policy, but usually it has not been so in the
cases where administrative discretion has been conferred in matters relating to
fundamental rights.

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The court exercise control over delegation of discretionary powers to the administration by
adjudicating upon the constitutionality of the law under which such powers are delegated
with reference to the fundamental rights enunciated in Part III of the Indian Constitution.
Therefore, if the law confers vague and wide discretionary power on any administrative
authority, it may be declared ultra vires Article 14, Article 19 and other provisions of the
Constitution.

ii. Administrative Discretion and Article 14

Article l4 of the Constitution of India provides for equality before law. It prevents arbitrary
discretion being vested in the executive. Article 14 strikes at arbitrariness in state action
and ensures fairness and equality of treatment. Right to equality affords protection not only
against discretionary laws passed by legislature but also prevents arbitrary discretion being
vested in the executive. Often executive or administrative officer of government is given
wide discretionary power.

In a number of cases, the statute has been challenged on the ground that it conferred on an
administrative authority wide discretionary powers of selecting persons or objects
discriminately and therefore, it violated Article 14.

The Court in determining the question of validity of such statute examines whether the
statute has laid down any principle or policy for the guidance of the exercise of discretion
by the government in the matter of selection or classification. The Court will not tolerate
the delegation of uncontrolled power in the hands of Executive to such an extent as to
enable it to discriminate.

CASE LAW

S.NO. CASE NAME PROVISIONS

It was held that in so far as the Act empowered the Government

to have cases or class of offences tried by special courts, it
violated Article 14 of the Constitution. The court further held the
Act invalid as it laid down “no yardstick or measure for the
State of West Bengal v.
1 grouping either of persons or of cases or of offences” so as to
Anwar Ali
distinguish them from others outside the purview of the Act.
Moreover, the necessity of “speedier trial” was held to be too
vague, uncertain and indefinite criterion to form the basis of a
valid and reasonable classification.

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iii. Administrative Discretion and Article 19

Article 19 guarantees certain freedoms to the citizens of India, but they are not absolute.
Reasonable restrictions can be imposed on these freedoms under the authority of law. The
reasonableness of the restrictions is open to judicial review. These freedoms can also be
afflicted by administrative discretion.

A number of cases have come up involving the question of validity of law conferring
discretion on the executive to restrict the right under Article 19(l)(b) and 19(l)(e) (the right
to assemble peacefully and without arms and the right to reside and settle in any part of
the territory of India). The government has conferred powers on the executive through a
number of laws to extern a person from a particular area in the interest of peace and safety.

VALIDITY OF THE DISCRETION

No law can clothe administrative action with a complete finality even if the law says so, for the
courts always examine the ambit and even the mode of its exercise to check its conformity with
fundamental rights. The courts in India have developed various formulations to control the
exercise of administrative discretion, which can be grouped under two broad heads, as under:

1. Authority has not exercised its discretion properly- abuse of discretion

2. Authority is deemed not to have exercised its discretion at all - non-application of mind.

1. Abuse of Discretion

• Mala fides: If the discretionary power is exercised by the authority with bad faith or
dishonest intention, the action is quashed by the court. Mala fide exercise of
discretionary power is always bad and taken as abuse of discretion. Mala fide (bad
faith) may be taken to mean dishonest intention or corrupt motive. In relation to the
exercise of statutory powers it may be said to comprise dishonesty (or fraud) and
malice. A power is exercised fraudulently if its repository intends to achieve an object
other than that for which he believes the power to have been conferred. The intention
may be to promote another public interest or private interest.

• Irrelevant considerations: If a statute confers power for one purpose, its use for a
different purpose is not regarded as a valid exercise of power and is likely to be
quashed by the courts. If the administrative authority takes into account factors,
circumstances or events wholly irrelevant or extraneous to the purpose mentioned in
the statute, then the administrative action is vitiated.

• Leaving out relevant considerations: The administrative authority exercising the

discretionary power is required to take into account all the relevant facts. If it leaves
out relevant consideration, its action will be invalid.

• Arbitrary orders: The order made should be based on facts and cogent reasoning and
not on the whims and fancies of the adjudicatory authority.

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• Improper purpose: The discretionary power is required to be used for the purpose
for which it has been given. If it is given for one purpose and used for another
purpose it will amount to abuse of power.

• Colorable exercise of power: Where the discretionary power is exercised by the

authority on which it has been conferred ostensibly for the purpose for which it has
been given but in reality, for some other purpose, it is taken as colorable exercise of
the discretionary power and it is declared invalid.

• Non-compliance with procedural requirements and principles of natural justice: If

the procedural requirement laid down in the statute is mandatory and it is not
complied, the exercise of power will be bad. Whether the procedural requirement is
mandatory, or directory is decided by the court. Principles of natural justice are also
required to be observed.

• Exceeding jurisdiction: The authority is required to exercise the power within the
limits or the statute. Consequently, if the authority exceeds this limit, its action will
be held to be ultra vires and, therefore, void.

2. Non-Application of Mind

• Acting under dictation: Where the authority exercises its discretionary power under
the instructions or dictation from superior authority it is taken as non-exercise of
power by the authority and its decision or action is bad. In such condition the
authority purports to act on its own but in substance the power is not exercised by it
but by the other authority. The authority entrusted with the powers does not take
action on its own judgment and does not apply its mind.

• Self-restriction: If the authority imposes fetters on its discretion by announcing rules

of policy to be applied by it rigidly to all cases coming before it for decision, its action
or decision will be bad. The authority entrusted with the discretionary power is
required to exercise it after considering the individual cases and the authority should
not imposes fetters on its discretion by adopting fixed rule of policy to be applied
rigidly to all cases coming before it.

• Acting mechanically and without due care: Non-application of mind to an issue that
requires an exercise of discretion on the part of the authority will render the decision
bad in law.

B. STATUTORY JUDICIAL CONTROL

The method of statutory review can be divided into two parts:

i. Statutory appeals: There are some Acts, which provide for an appeal from statutory
tribunal to the High Court on point of law. e.g. Section 30 Workmen’s Compensation Act,
1923.

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ii. Reference to the High Court or statement of case: There are several statutes, which
provide for a reference or statement of case by an administrative tribunal to the High Court.

Under Section 256 of the Income-tax Act, 1961 where an application is made to the Tribunal
by the assessee and the Tribunal refuses to state the case the assessee may apply to the High
Court and if the High Court is not satisfied about the correctness of the decision of the
Tribunal, it can require the Tribunal to state the case and refer it to the Court.

C. ORDINARY OR EQUITABLE JUDICIAL CONTROL

Apart from the remedies as discuss above there are certain ordinary remedies, which are
available to person against the administration, the ordinary courts in exercise of the power
provide the ordinary remedies under the ordinary law against the administrative
authorities. These remedies are also called equitable remedies and include:

1. Injunction

An injunction is a preventive remedy. It is a judicial process by which one who has invaded
or is threatening to invade the rights of another is restrained from continuing or
commencing such wrongful act. In India, the law with regard to injunctions has been laid
down in the Specific Relief Act, 1963.

An action for declaration lies where a jurisdiction has been wrongly exercised or where the
authority itself was not properly constituted. Injunction is issued for restraining a person
to act contrary to law or in excess of its statutory powers.

An injunction can be issued to both administrative and quasi-judicial bodies. Injunction is

highly useful remedy to prevent a statutory body from doing an ultra vires act, apart from
the cases where it is available against private individuals e.g. to restrain the commission or
torts, or breach of contract or breach of statutory duty. Injunction may be prohibitory or
mandatory.

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a. Prohibitory Injunction: Prohibitory injunction forbids the defendant to do a
wrongful act, which would infringe the right of the plaintiff. A prohibitory injunction
may be interlocutory or temporary injunction or perpetual injunction.

i. Interlocutory or temporary injunction: Temporary injunctions are such as to

continue until a specified time or until the further order of the court. (Section
37 for the Specific Relief Act). It is granted as an interim measure to preserve
status quo until the case is heard and decided. Temporary injunction may be
granted at any stage of a suit. Temporary injunctions are regulated by the Civil
Procedure Code and are provisional in nature. It does not conclude or
determine a right. Besides, a temporary injunction is a mere order. The granting
of temporary injunction is a matter of discretion of the court.

ii. Perpetual injunction: A perpetual injunction can only be granted by decree

made at the hearing and made upon the merits of the suit. It is granted only
after full trial of hearing of the case, when a right is firmly established.

b. Mandatory injunction: When to prevent the breach of an obligation it is necessary to

compel the performance of certain acts which the court is capable of enforcing, the
court may in its discretion grant an injunction to prevent the breach complained of
and also to compel performance of the requisite acts. The mandatory injunction may
be taken as a command to do a particular act to restore things to their former
condition or to undo, that which has been done.

2. Declaratory Action

In some cases where wrong has been done to a person by an administrative act, declaratory
judgments may be the appropriate remedy. Declaration may be taken as a judicial order
issued by the court declaring rights of the parties without giving any further relief. Thus, a
declaratory decree declares the rights of the parties. In such a decree there is no sanction,
which an ordinary judgment prescribes against the defendant. By declaring the rights of
the parties, it removes the existing doubts about the rights and secures enjoyment of the
rights. It is an equitable remedy. It is a discretionary remedy and cannot be claimed as a
matter of right.
,

3. Action for damages

If any injury is caused to an individual by wrongful or negligent acts of the Government

servant, the aggrieved person can file suit for the recovery of damages from the
Government concerned.

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PRINCIPLES OF NATURAL JUSTICE

• One of the most important principles in the administration of justice is that justice must not
only be done but also seen to be done.

• This is necessary to inspire confidence in the people in the judicial system.

• Natural justice is a concept of Common Law and represents procedural principles

developed by judges. Though it enjoys no express constitutional status, it is one of the most
important concepts that ensure that people retain their faith in the system of adjudication.

• Principles of natural justice are not precise rules of unchanging content; their scope varies
according to the context.

• It provides the foundation on which the whole super-structure of judicial control of

administrative action is based.

Rule against bias (Nemo Judex in Causa Sua)

• According to this rule no person should be made a judge in his own cause.

• Bias means an operative prejudice whether conscious or unconscious in relation to a party

or issue.

• It is a presumption that a person cannot take an objective decision in a case in which he has
an interest.

• The rule against bias has two main aspects:

1. That the judge must not have any direct personal stake in the matter at hand

2. There must not be any real likelihood of bias.

Bias can be of the following three types:

a. Pecuniary bias

The judicial approach is unanimous on the point that any financial interest of the
adjudicatory authority in the matter, howsoever small, would vitiate the adjudication.

b. Personal bias

There are number of situations which may create a personal bias in the Judge’s mind
against one party in dispute before him. He may be friend of the party, or related to him
through family, professional or business ties. The judge might also be hostile to one of the
parties to a case. All these situations create bias either in favour of or against the party and
will operate as a disqualification for a person to act as a Judge.

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c. Subject matter bias

A judge may have a bias in the subject matter, which means that he himself is a party, or
has some direct connection with the litigation. To disqualify on the ground of bias there
must be intimate and direct connection between adjudicator and the issues in dispute.

Rule of fair hearing (Audi Alteram Partem)

The second principle of natural justice is Audi alteram partem (hear the other side) i.e. no one
should be condemned unheard. It requires that both sides should be heard before passing the
order. This Rile implies that a person against whom an order to his prejudice is passed should be
given information as to the charges against him and should be given opportunity to submit his
explanation thereto.

Following are the ingredients of the rule of fair hearing:

1. Right to notice

Hearing starts with the notice by the authority concerned to the affected person. Therefore,
before the proceedings start, the authority concerned is required to give to the affected
person the notice of the case against him. However, the omission to serve notice would not
be fatal if the notice has not been served on the concerned person on account of his own
fault.

2. Right to present case and evidence

The party against whom proceedings have been initiated must be given full opportunity to
present his or her case and the evidence in support of it. The reply is usually in the written
form and the party is also given an opportunity to present the case orally though it is not
mandatory.

3. Right to rebut (deny) adverse evidence

For the hearing to be fair the adjudicating authority is not only required to disclose to the
person concerned the evidence or material to be taken against him but also to provide an
opportunity to rebut the evidence or material.

4. Disclosure of evidence

A party must be given full opportunity to explain every material that is sought to be relied
upon against him. Unless all the material (e.g. reports, statements, documents, evidence)
on which the proceeding is based is disclosed to the party, he cannot defend himself
properly.

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5. Speaking orders

Reasoned decision may be taken to mean a decision which contains reason in its support.
When the adjudicatory bodies give reasons in support of their decisions, the decisions are
treated as reasoned decision. It is also called speaking order. In such condition the order
speaks for itself or it tells its own story.

EXCEPTIONS TO NATURAL JUSTICE

Though the normal rule is that a person who is affected by administrative action is entitled to
claim natural justice, that requirement may be excluded under certain exceptional circumstances.

1. Statutory Exclusion: The principle of natural justice may be excluded by the statutory
provision. Where the statute expressly provides for the observance of the principles of
natural justice, the provision is treated as mandatory and the authority is bound by it.
Where the statute is silent as to the observance of the principle of natural justice, such
silence is taken to imply the observance thereto. However, the principles of natural justice
are not incapable of exclusion. The statute may exclude them. When the statute expressly
or by necessary implication excludes the application of the principles of natural justice the
courts do not ignore the statutory mandate.

2. Emergency: In exceptional cases of urgency or emergency where prompt and preventive

action is required the principles of natural justice need not be observed. In Maneka Gandhi
v. Union of India the Supreme Court observed that a passport may be impounded in public
interest without compliance with the principles of natural justice but as soon as the order
impounding the passport has been made, an opportunity of post decisional hearing,
remedial in aim, should be given to the person concerned. In the case, it has also been held
that “public interest” is a justiciable issue and the determination of administrative
authority on it is not final.

3. Interim disciplinary action: The rules of natural justice are not attracted in the case of
interim disciplinary action. For example, the order of suspension of an employee pending
an inquiry against him is not final but interim order and the application of the rules of
natural justice is not attracted in the case of such order. In Abhay Kumar v. K. Srinivasan
an order was passed by the college authority debarring the student from entering the
premises of the college and attending the class till the pendency of a criminal case against
him for stabbing a student. The Court held that the order was interim and not final. It was
preventive in nature. It was passed with the object to maintain peace in the campus. The
rules of natural justice were not applicable in such case.

4. Academic evaluation: Where a student is removed from an educational institution on the

grounds of unsatisfactory academic performance, the requirement of pre-decisional
hearing is excluded. The Supreme Court has made it clear that if the competent academic
authority assesses the work of a student over the period of time and thereafter declare his
work unsatisfactory the rule of natural justice may be excluded but this exclusion does not
apply in the case of disciplinary matters.

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5. Impracticability: Where the authority deals with a large number of persons it is not
practicable to give all of them opportunity of being heard and therefore in such condition
the court does not insist on the observance of the rules of natural justice. In P. Radha
krishnav. Osmania University, the entire M.B.A. entrance examination was cancelled on
the ground of mass copying. The court held that it was not possible to give all the
examinees the opportunity of being heard before the cancellation of the examination.

EFFECT OF FAILURE OF NATURAL JUSTICE

When an authority required observing natural justice in making an order fails to do so, should
the order made by it be regarded as void or voidable?

Generally speaking, a voidable order means that the order was legally valid at its inception, and
it remains valid until it is set aside or quashed by the courts, that is, it has legal effect up to the
time it is quashed.

On the other hand, a void order is no order at all from its inception; it is nullity and void ab initio.
In most cases a person affected by such an order cannot be sure whether the order is really valid
or not until the court decided the matter.

Therefore, the affected person cannot just ignore the order treating it as a nullity. He has to go to
a Court for an authoritative determination as to the nature of the order is void. For example, an
order challenged as a nullity for failure of natural justice gives rise to the following crucial
question: Was the authority required to follow natural justice?

Usually, a violable order cannot be challenged in collateral proceedings. It has to be set aside by
the court in separate proceedings for the purpose. Suppose, a person is prosecuted criminally for
infringing an order. He cannot then plead that the order is voidable. He can raise such a plea if
the order is void. In India, by and large, the judicial thinking has been that a quasi- judicial order
made without following natural justice is void and nullity.

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CASE LAWS

CASE
S.NO. PROVISIONS
NAME

Section 56 of the Bombay Police Act, 1951 empowers the Police Commissioner
to extern any undesirable person on certain grounds set out therein. An order
passed by the Commissioner on the petitioner was disobeyed by him and he
was prosecuted for this in a criminal court. During the pendency of his case,
on a writ petition filed by the petitioner, the High Court quashed the
internment order on the ground of failure of natural justice. The trial court then
acquitted the appellant. The government appealed against the acquittal and
the High Court convicted him for disobeying the order. The High Court took
the position that the order in question was not void ab initio; the appellant had
disobeyed the order much earlier than date it was infringed by him; the High
Court’s own decision invalidating the order in question was not retroactive
and did not render it a nullity from its inception but it was invalidate only
Nawab
from the date the court declared it to be so by its judgment.
1 khan v.
Gujarat
However, the matter came in appeal before the Supreme Court, which
approached the matter from a different angle. The order of internment affected
a Fundamental Right (Article 19) of the appellant in a manner which was not
reasonable. The order was thus illegal and unconstitutional and hence void.
The court ruled definitively that an order infringing a constitutionally
guaranteed right made without hearing the party affected, where hearing was
required, would be void ab initio and ineffectual to bind the parties from the
very beginning and a person cannot be convicted for non-observance of such
an order. The Supreme Court held that where hearing is obligated by statute
which affects the fundamental right of a citizen, the duty to give the hearing
sound in constitutional requirement and failure to comply with such a duty is
fatal.

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5.15
LIABILITY OF GOVERNMENT

The liability of the government can either be contractual or tortious.

Contractual Liability of Government

The Constitution of India allows the central and the state governments to enter into contracts. In
this regard, Article 299(1) provides that all the contracts of Central Government will be in the
name of President of India and that of State Government shall be in the name of its Governor:

Article 299 (2) of the Constitution makes it clear that neither the President nor the Governor shall
be personally liable in respect of any contract or assurance made or executed for the purposes of
the Constitution or for the purposes of any enactment relating to the Government of India.
Subject to the provisions of Article 299 (1), the other provisions of the general law of contract
apply even to the Government contract.

The Supreme Court has made it clear that the provisions of Article 299 (1) are mandatory and
therefore the contract made in contravention thereof is void and therefore cannot be ratified and
cannot be enforced even by invoking the doctrine of estoppel.

According to section 65 of the Indian Contract Act, 1872, when an agreement is discovered to be
void, or when a contract becomes void, any person who has received any advantage under such
agreement or contract is bound to restore it, or to make compensation for it to the person from
whom he received it. Therefore, if the agreement with the Government is void as the requirement
of Article 299(1) have not been complied, the party receiving the advantage under such
agreement is bound to restore it or to make compensation for it to • the person from whom he
has received it.

Tortious Liability of Government

In India, the Government is liable for the acts and defaults, of its employees and servants, done
in the exercise of its non-sovereign functions. If it is a sovereign function, it could claim immunity
from the tortious liability, otherwise not. Generally, the activities of commercial nature or those
which can be carried to by the private individual are termed as non-sovereign functions.

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6 LAW OF TORTS

INTRODUCTION

The word 'Tort' is a French word which is derived from a Latin word 'Tortum'. Tort means 'Civil
Wrong'. But every wrong or wrongful act is not a tort. Tort is really a kind of civil wrong as
opposed to criminal wrong. Example: A car accident where one driver hurts another driver
because he or she was not paying attention could be a tort.

Important elements of torts:

a. It is a species of civil injury of wrong as opposed to a criminal wrong, and

b. Every civil wrong is not a tort.

GENERAL CONDITIONS TO FORM A TORT

There is no specific list of the Civil Wrong that will amount to Tort. A civil wrong becomes a tort
only if it satisfies some conditions. In general, a tort consists of some act or omission done by the
Tortfeasor whereby he has without just cause or excuse caused some harm to the other party.

i. Tort has following components: -

a wrongful act or omission done by the Tortfeasor. (Tortfeasor is the party who commits
a tort);

ii. the wrongful act must cause legal damage to another; and

iii. the wrongful act must be of such a nature that a legal remedy can be offered.

Note: If any of the three conditions are missing, then it will not amount to Tort.

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1. WRONGFUL ACT/ OMISSION

The act complained of should under the circumstanced be legally wrongful as regards the
party complaining.

2. LEGAL DAMAGES
It means a damage which the law recognizes as such there should be injury to the party.

A. INJURIA SINE DAMNUM

It means injury without damage, i.e., where there is no damage resulted yet it is an injury
or wrong in tort i.e., where there is infringement of a legal right not resulting in harm, but
plaintiff can still sue in tort. Thus, the act of trespassing upon another’s land is actionable
even though it has not caused the plaintiff even the slightest harm.

Doctrine of Injuria Sine Damno

Injury Without Damage (loss)

(Infringement of right)

Infringement of private right without actual loss or damage

➢ Case Law- Ashby v White (1703)

In the leading case of Ashby v White (1703), the defendant, Polling officer wrongfully
refused to register a duly tendered vote of plaintiff, a legally qualified voter at parliament
election and the candidate for whom the vote was to be tendered was elected and no loss
suffered by election of vote, nevertheless it was held that an action lay and the plaintiff was
entitled to recover compensation.

B. DAMNUM SINE INJURIA

The maxim means that in a given case, a man has suffered damage and yet have no action
in tort, because the damages not to an interest protected by the law of torts. Therefore,
causing damage, however substantial to another person is not actionable in law unless
there is also violation of a legal right of the plaintiff. Thus, if I own a shop and you open a
shop in neighborhood, as a result of which I lose, same customers and my profits fall off. I
cannot sue you for the loss in profits, because you are exercising your legal rights.

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3. LEGAL REMEDY

This means that to constitute a tort, the wrongful act must come under the law i.e., there
should be remedies to the sufferer against the tortfeasor (defendant). There are two types
of remedies i.e., judicial remedies and extrajudicial remedies.

REMEDIES IN TORTS

Remedies in tort

JUDICIAL REMEDIES EXTRA JUDICIAL REMEDIES

• Injunction • Self defense

• Damages • Prevention of trespass

• Specific restitution of property • Re-entry on land

• Abatement of nuisance

Extra judicial remedies

These remedies could be self-defense. For e.g., if A finds a drunken stranger in his room who has
no business to be there in it, and is thus a trespass, he(a) is entitled to get rid of him, if possible
without force but if that be not possible with such force as the circumstances of the case may
warrant.

Mens Rea

How far a guilty mind of a person is required for liability for tort? The general principle lies in
the maxim, “actus non facit reum nisi mens sit res” i.e., the act itself creates no guilt in the absence
of guilty mind. It does not mean that for the law' of torts, the act must be done with an evil
motive, but simply means the act must be done either with wrongful intention or negligence.

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6.4
KINDS OF TORTIOUS LIABILITY

A. Strict or Absolute liability

In some torts, the defendant is liable even though the harm to the plaintiff occurred without
intention or negligence on the defendant's part. In other words, the defendant is held liable
without fault. These cases fall under the following categories:

i. Liability for Inevitable Accident - Such liability arises in cases where damage is
done by the escape of dangerous substances brought or kept by anyone upon his
land. Such cases are where a man is made by law an insurer of other against the result
of his activities.

ii. Liability for Inevitable Mistake - Such cases are where a person interferes with the
property or reputation of another.

iii. Vicarious Liability for Wrongs committed by others - Responsibility in such cases
is imputed by law on grounds of social policy or expediency. These cases involve
liability of master for the acts of his servant.

❖ Rule in Rylands v. Fletcher - VERY IMPORTANT

The rule in Rylands v. Flethcer (1868) L.R. 3 H.L. 330 is that a man acts at his peril and is
the insurer of the safety of his neighbour against accidental harm. Such duty is absolute
because it is independent of negligence on the part of the defendant or his servants. It was
held in that case that: “If a person brings or accumulates on his land anything which, if it
should escape may cause damage to his neighbours, he does so at his own peril. If it does
not escape and cause damage, he is responsible, however careful he may have been, and
whatever precautions he may have taken to prevent damage.”

The facts of this case were as follows: B, a mill owner employed independent contractors,
who were apparently competent to construct a reservoir on his land to provide water for
his mill. There were old disused mining shafts under the site of the reservoir which the
contractors failed to observe because they were filled with earth. The contractors therefore,
did not block them. When the water was filled in the reservoir, it bursts through the shafts

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and flooded the plaintiff's coal mines on the adjoining land. It was found as a fact that B
did not know of the shafts and had not been negligent, though the independent contractors,
had been, B was held liable. Blackburn, J., observed; “We think that the true rule of law is
that the person, who for his own purposes brings on his lands and collects and keeps there
anything likely to do mischief if it escapes, must keep it at his peril and if, he does not do
so is, prima facie answerable for all the damage which is the natural consequence of its
escape.”

Later in the case of Read v. Lyons [(1946) 2 All. E.R. 471 (H.L.)], it has been explained that
two conditions are necessary in order to apply the rule in Ryland v. Fletcher, these are:

i. Escape from a place of which the defendant has occupation or over which he has a
control to a place which is outside his occupation or control or something likely to do
mischief if it escapes; and

ii. Non-natural use of Land: The defendant is liable if he makes a non-natural use of
land.

If either of these conditions is absent, the rule of strict liability will not apply.

Exception to the rule of Strict Liability

• Damage due to natural use of land.

• Act of God, i.e., extraordinary rain, storm etc.

• Plaintiff’s own default.

• Consent of the plaintiff.

• An act done under the authority of a statute.

• Act of third party.

B. Vicarious Liability

Vicarious liability refers to a situation where someone is held responsible for the actions or
omissions of another person. Example: An employer can be liable for the acts or omissions
of its employees, provided it can be shown that they took place in the course of their
employment.

In short, a person is liable for his own wrongful acts and one does not incur any liability
for the acts done by others is known as Vicarious liability. Following are Vicarious Liability:
—

i. Principal and Agent: This is based on the maxim Qui facit per alium facit per se - he
who acts through another is acting himself, so that the act of the agent is the act of

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the principal. When an agent commits a tort in the ordinary course of his duties as an
agent, the principal is liable for the same.

ii. Partners: All the partners are liable for tort committed by partner in the ordinary
course of the business of the firm. The liability of the partners is joint and several.

iii. Master and Servant: A master is liable for the tort committed by his servant while
acting in the course of his employment. The servant, of course, is also liable; their
liability is joint and several. The basis of the rule is in the maxim Respondent Superior
(Let the principal be liable) or on the maxim Qui facit per alium facit per se (he who
does an act through another is deemed to do it himself).

iv. Employer and Independent Contractor: An employer is vicariously liable for the
torts of his servants committed in the course of their employment, but he is not liable
for the torts of those who are his independent contractors.
<

C. Vicarious Liability of the State

The position in England

At common law the crown could not be sued in tort either for wrongs actually authorized
by it or committed by its servants, in the course of their employment with the passing of
crown Proceedings Act 1947 the crown is liable for the tort committed by its servants just
like a private individual.

The position in India

When a case of government liability in tort comes before the courts, the question is whether
the particular government activity, which government rise to the tort, was the sovereign
function or non-sovereign function. If it is a sovereign function, it could claim immunity
from tortuous liability otherwise not.

TORTS OR WRONGS TO PERSONAL SAFETY AND FREEDOM

An action for damages lies in the following kinds of wrongs which are styled as injuries to the
person of an individual:

BATTERY ASSAULT BODILY HARM FALSE IMPRISONMENT

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MALICIOUS PROSECUTION NERVOUS SHOCK DEFAMATION

Battery

Any direct application of force on another individual without his consent or lawful justification is a
wrong of battery. Even though the force used is very trivial and does not cause any harm, the wrong
is committed. Thus, even to touch a person in anger or without lawful justification is battery.

Assault

Assault is any act of the defendant which directly causes the plaintiff immediately to apprehend a
contract with his person.

To point a loaded gun at the plaintiff or to curse him in a threatening manner is to assault him clearly
if the defendant by his act intends to commit a battery and the plaintiff apprehends it is an assault.

False imprisonment

It means imposition of local restraint for some period, however short upon liberty of another,
without sufficient lawful justification. It means unauthorized restraint on a person’s body. If a
man is restrained by a threat of force from leaving his own house or an open field there is false
imprisonment.

Malicious prosecution

It means instigating judicial proceedings against another, maliciously and without reasonable
and probable cause, which terminate in favor of that other and which results in damage to his
reputation personal freedom or property.

Nervous shock

Under this relief may be provided when a person gets some nervous shock through what he
has seen or heard. But mere shock is not enough to make it an actionable tort, some inquiry or
illness must take place as are a result of the emotional disturbance, fear etc.

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CONEPT OF DEFAMATION

DEFAMATION

Defamation is the publication of a statement which tends to affects the reputation of a person.
Actually, it is attack on the reputation of person. It may be classified into two heads

LIBEL SLANDER
Libel is a representation made in some
permanent form. E.g., written words, pictures Slander is the publication of a defamatory
etc. statement in a transient form: statement of
temporary nature such as spoken words or
gestures.

Judicial Remedies

Three types of judicial remedies are available in tort:

i. Damages or Compensation,

ii. Injunction, and

iii. Specific Restitution of Property.

Extra Judicial Remedies

Following Extra Judicial remedies are available: -

1. Self Defense: A person can use reasonable force to protect himself, or any other person
against any unlawful use of force.

2. Prevention of Trespass: An occupier of land or any authorized person may use reasonable
force to prevent trespassers from entering the land or eject them if they have already
entered the land.

3. Re-entry on Land: A person wrongfully disposed of land may retake possession of land in
a peaceful and reasonable manner.

4. Re-caption of Goods: A person who is entitled to possession of goods can take it back
either peacefully or by applying reasonable force.

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5. Abatement of Nuisance: The occupier of land may lawfully abate or terminate any
nuisance.

6. Distress Damage Pheasant: Distress Damage Feasant means to detain things which are
doing damage. Therefore, an occupier of land may lawfully detain cattle or other things on
his land doing damage until the compensation is paid.

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7. 1

7 LAW OF LIMITATION, 1963

INTRODUCTION

The Law of the Limitation Act, 1963 applies to whole of India except J&K.

The object of the Limitation Act, 1963 is to prescribe the period within existing rights can be
enforced in courts of law.

The principal on which the law of limitation is based is “’Vigilantibuset Non Dormientibus Jura
Subveniunt” i.e. the, law aids the diligent (Active) and not the indolent (LAZY). Its purpose is to
prevent hearing of claims beyond a reasonable time because with passage of time all evidence of
the facts may be lost.

Limitation Bars Remedy, But Does Not Extinguish Rights

The Law of limitation put restriction on the remedy in a Court of law when the period of
limitation has expired, but it does not extinguish/end the right.

In simple words, the right of the party to seek legal remedy expires after expiry of period of
limitation. But it does not put an end to the rights of the party. Therefore, a claim can be settled
outside the Court even after period of limitation expired. So, it does not destroy the right of the
parties, it only bars remedy.

Example: Nathu Ram sells goods to Neeta on credit period of 6 months. Neeta did not paid the
amount within agreed time. The Law of Limitation provides 3 years after the expiry of agreed
time to Nathu Ram to file a suit. If Nathu Ram fails to file the suit within 3 years he will never be
able to recover money from Neeta from the legal route, as his right to get remedy is over. But if
Neeta after many years decides to pay money to Nathu Ram, he can accept it as the right to get
money is not extinguished, only right to file a suit was extinguished.

BAR OF LIMITATION

Section 3 of the Act, states that every suit instituted, appeal filed and application made after the
expiry of the limitation period given under Schedule shall be dismissed by the Court. It is not
required that the defense should raise a point regarding expiry of limitation period. Rather it is
the duty of Court to reject such suit, application or appeal.

This section is applicable to:

• Suit

• Appeal

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San jap instituted a suit against Manoj beyond the prescribed period of limitation.
Manoj did not raise the objection that the suit was beyond the period of limitation. The
Q 1.
Civil Court allowed the suit for a hearing and decreed. Would the decree be treated
valid in the suit? Give reasons.

Section 3 of the Act, states that every suit instituted, appeal filed and application made
after the expiry of the limitation period given under Schedule shall be dismissed by the
Court. It is not required that the defense should raise a point regarding expiry of
limitation period. Rather it is the duty of Court to reject such suit, application or appeal.
A1.
In this case it was duty of the court to reject the suit. Any decree passed by the court
with context to a suit which has exceeded the time of limitation will make Limitation
Act unfruitful, and hence not enforceable.

Mr. Sleepy went to make an application in the court but the same could not be filed as
Q2. the Court was closed for a week for summers. The limitation period ended during this
week. Please guide Mr. Sleepy regarding filing an application.

Section 4 states that if the period of limitation ends on a day when the Court is closed,
it will extend up to the day when the Court re-opens.
A2.
In this case Mr. Sleepy can make the application on the day when the Court re-opens.

Application Special Note: Section 4 of the Act states that if the period of limitation ends on a day
when the court is closed, it will extend up to the day when the court re-opens.

EXTENSION OF TIME IN CERTAIN CASES

❖ DOCTRINE OF SUFFICIENT CAUSE

Meaning

Section 5 lays down that an appeal or application may be admitted by the Court even after
expiry of prescribed period if the appellant or applicant satisfies the Court that he has
sufficient cause for not filing an appeal or making an application within prescribed time.

Applicability and Non-applicability

The extension under this section applies only to appeals and applications. It does not apply
to suit. Means the Court has no power to admit a time barred suit even if there is a sufficient

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cause for the delay. The reason for non-applicability of the Section to suits is that, the period
of limitation allowed in most of the suits extends from 3 to 12 years whereas in appeals and
application it does not exceed 6 months.

Discretion of the Court

It is the Court's discretion to extend or not to extend the period of limitation even after the
sufficient cause has been shown. So, the Court is not bound to give extension even after
sufficient cause. However, the Court should exercise its discretion judicially and not
arbitrarily.

What is Sufficient Cause?

The term 'sufficient cause' has not been defined in the Limitation Act. It depends on the
circumstances of each case and no two cases can be treated same. Although following are
considered as sufficient causes in judicial pronouncements: -

• Wrong practice of High Court which misled the appellant or his counsel in not filing
the appeal;

• Wrong advice given by advocate can give rise to sufficient cause in certain cases;

• Mistake of law is sufficient cause, though ignorance of law is not an excuse;

• Imprisonment of the party;

• Serious illness of the party;

• Time taken for obtaining certified copies of the decree of the judgment necessary to
accompany the appeal or application;

• Ailment of father during which period the defendant was looking after him has been
held to be a sufficient and genuine cause.

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7. 4

Ramendra prefers an appeal for setting aside the arbitral award on the ground that he was
not given a proper notice of arbitral proceedings and thereby not being able to present his
case. He also furnishes sufficient proof and pleads before the Court that he received the
Q3. arbitral award just 10 days back. Advice with reasons - (i) Whether Ramendra will succeed
in his prayer; and (ii) Whether the law of limitation will not be a bar?

(June 2014) (5 marks)

Section 34 of the Arbitration Act provides that an arbitral award may be set aside by a court
on certain grounds specified therein which includes the ground of party not given proper
notice of arbitral proceedings. Therefore Mr. Ramendra will succeed in his prayer.
A3.
Further law of limitation will not be a bar as the same is covered by Section 5 of the
Limitation Act which states that the court may extend the period of limitation in case of
appeals and application if sufficient cause is present.

While going to the court for filing a suit Sona met with an accident. As a consequence,
Q4. Sona remains unconscious for 15 days. The period of limitation for filing the suit expires
during its duration. Can Sona claim extension of time?

The matter in issue relates to extension of time period discussed under section 5 of the
Limitation Act. The section states that the court may extend the period of limitation in case
of appeals and application if sufficient cause is present. This section does not apply to
A4. suits.

Since Sona was going to file a suit, this section is not applicable and therefore delay cannot
be condoned. No extension of limitation period will be granted by the courts.

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SECTION 6- PERSONS UNDER THE LEGAL DISABILITY

Section 6 provides that a person’s is under a legal disability if such person is a minor (minor
includes child in the womb) insane, and idiot. In such cases the persons will be entitled to fresh
starting point of limitation from the date on which legal disability ceases to exit subject to the
following conditions: -

• Such a legal disability must be existing at the time from which the period of limitation is to
be commenced.

• The persons under legal disability must be entitled to institute the suit or make an
application

Section 6 further provides that -

• If a person is affected by several disability at one point of time then the person may file a
suit or make an application after disability have ceased (ending).

• If one legal disability is followed by another ten the person may institute a suit after all
disabilities have ceased.

• If the legal disabilities continue up to the death of the person then his legal representative
may institute the suit and make an application within the same period after the death as
would otherwise have been allowed from the time specified in the schedule to the Act.

It may be noted that Section 6 does not apply to appeals.

SECTION 7

Section 7 is applicable where several persons are jointly entitled to file the suit or make an
application for execution of a decree and out of several persons one or some of them are affected
by legal disability.

The period of limitation in such a case is to be reckoned depending upon whether discharge can
be made with or without consent of the person under legal disability if discharge can be made or
given with the consent of such person the period of limitation will start only after the disability
is removed. On the other hand, where consent of person under legal disability is not required,
time will run against them all. It may be noted section 7 is not be applicable to appeals.

SECTION 8

Section 8 is an exception to Sec.6 and Sec.7 and controls both these Section. According to Sec.8
the period of limitations cannot extend beyond 3 years from the date of cessation of legal
disability. However, if the ordinary period of limitation computed from the original approval of
the cause of action express more than 3 years from the cessation of legal disability such period
will be allowed.

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SECTION 9- CONTINUES RUNNING OF TIME

Section 9 provides that where the limitation period has started, no subsequent disability or
inability to file a suit or make an application can stop it. This section embodies the principle that
once the time for filing a suit or an application starts running, it will continue to run till it has
exhausted the file prescribed period. The running process can only will stop by statutory
exceptions.

Where once time has begun to run no subsequent disability or inability to file a suit or make an
application can stop it”.

Disability means legal disability. Inability means wants of physical power to act for e.g. poverty,
illness etc.

EXCLUSION OF TIME

Exclusion of time in legal proceedings -

1. In computing the period of limitation for an appeal the following period shall be
excluded.

• The day on which period begins to run.

• The day on which judgment was pronounced.

• The time required for obtaining the copy of decree order, and;

• The time required for obtaining the copy of judgment.

2. In computing the period of limitation prescribed for an application for revision or

review or leave to appeal. The following shall be excluded.

• The day on which the period begins to run

• The day on which judgment pronounced.

3. In computing the period of limitation prescribed for an application to set aside an award
the following shall be excluded: -

• The day on which the period begins to run

• The term required for obtaining for the copy of award

4. In computing the period of limitation prescribed for any other application only the day
on which time begins to run shall be excluded.

5. In computing the period of limitation for any suit, appeal or application the day from
which such period is to be record shall be excluded.

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EFFECT OF ACKNOWLEDGEMENT ON THE PERIOD OF LIMITATION -

Sometimes a liability may be acknowledged by the party against whom the liability is alleged
within the period of limitation. If this acknowledgment is made in writing, it would give rise to
fresh period of limitation and it would run from the date of acknowledgment.

The following requirements should be present for a valid acknowledgment as per sec.18: -

• There must be an admission or acknowledgement

• It must be made before the expiry of period of limitation

• It must be in writing and signed by the party.

E.g. - A borrows money from B on 1/1/91. The debt will become time barred after the
expiry of 3 yrs. on 1/7/93. A write a letter to B saying that he is wrong that he has not been
able to pay to B saying that promise to pay the full amount within 3 months. In this case a
fresh period of limitation (3 yrs.) shall start from 1/7/93.

EFFECT OF PAYMENT ON ACCOUNT OF DEBT OR OF INTEREST

As per Sec. 19 of the Act where payment on account of a debt or of interest is made before the
expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent
duly authorized in this behalf, a fresh period of limitation shall be computed from the time the
payment was made. Thus, according to this Section a fresh period of limitation becomes available
to the creditor when part-payment of debt is made by the debtor before the explanation of period
of limitation.

ACQUISITION OF OWNERSHIP BY POSSESSION

Section 25 applies to acquisition of easement. It provides that right to access and use of light or
air, way, watercourse, use of water or any other easement which have been peaceably enjoyed
without interruption for 20 years (30 years if property belongs to government) shall be absolute.

IMPORTANT LIMITATION PERIODS

• Suits relating to movable property - 3 years.

• Suits for money payable or money lent - 3 years from the time when the loan rent - 3 years.

• Suit for arrears of rent - 3 years.

• Suit relating to contracts - 3 years.

• Suits for an account and a share out of profits of partnership firm - 3 years.

• Suits in respect of wage due to seaman - 3 years.

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• Suits in respect of wages due to other employees - 3 years.

• Suits in respect of price of food or drink sold by a hotel, restaurant, lodging, house etc. - 3
years.

• Suit for possession of immovable property - 30 years.

• Suit in respect of compensation tor false imprisonment - 1 year,

• Suit in respect of compensation for malicious persecution - 1 year.

• Suit for law permission to appear and defend a suit under summary procedure - 10 years.

• Appeal against the sentence of death passed by the session court or by the High Court in
exercise of its original jurisdiction - 30 days. \

CLASSIFICATION OF PERIOD OF LIMITATION

Depending upon the duration, period of limitation for different purposes may be classified as
follows:

1. PERIOD OF 30 YEARS

The maximum period of limitation prescribed by the Limitation Act is 30 years and it is
provided only for three kinds of suits: -

• Suits by mortgagors for the redemption or recovery of possession of immovable

property mortgaged;

• Suits by mortgagee for foreclosure;

• Suits by or on behalf of the Central Government or any State Government including

the State of Jammu and Kashmir.

2. PERIOD OF 12 YEARS

A period of 12 years is prescribed as a limitation period for various kinds of suits relating
to immovable property, trusts and endowments.

3. PERIOD OF 3 YEARS

A period of three years has been prescribed for suits relating to accounts, contracts,
declaratory suits, suits relating to decrees and instruments and suits relating to movable
property.

4. PERIOD VARYING BETWEEN 1 TO 3 YEARS

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The period from 1 to 3 years has been prescribed for suits relating to torts and other
miscellaneous matters and suits for which no period of limitation is provided in the
schedule to the Act.

5. PERIOD IN DAYS VARYING BETWEEN 90 TO 10 DAYS

The minimum period of limitation of 10 days is prescribed for application for leave to
appear and defend a suit under summary procedure from the date of service of the
summons.

LIMITATION AND WRITS UNDER THE CONSTITUTION

The subject of limitation is dealt with in entry 13, List III of the Constitution of India. The
Legislature may, without violating the fundamental rights, enact statutes prescribing
limitation within which actions may be brought or varying or changing the existing rules
of limitation either by shortening or extending time provided a reasonable time is allowed
for enforcement of the existing right of action which would become barred under the
amended Statute.
The Statute of Limitation is not unconstitutional since it applies to right of action in future.
It is a shield and not a weapon of offence.

CASE LAWS

S.NO. CASE NAME PROVISONS

The State cannot place any hindrance by prescribing a period of

limitation in the way of an aggrieved person seeking to approach
the Supreme Court of India under Article 32 of the Constitution.
To put curbs in the way of enforcement of Fundamental Rights
Tilokchand Motichand
1 through legislative action might well be questioned under
v. H.P. Munshi
Article 13(2) of the Constitution. It is against the State action that
Fundamental Rights are claimed).

The Limitation Act does not in terms apply to a proceeding

State of M.P. v. Bhai
under Article 32 or Article 226 of the Constitution. But the Courts
2 Lal Bhai
act on the analogy of the statute of limitation and refuse relief if
the delay is more than the statutory period of limitation

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Where the remedy in a writ petition corresponds to a remedy in
an ordinary suit and latter remedy is subject to bar of a statute of
limitation, the Court in its writ jurisdiction adopts in the statute
its own rule of procedure and in absence of special
circumstances imposes the same limitation in the writ
Tilokchand Motichand
3 jurisdiction. If the right to property is extinguished by
v. H.P. Munshi
prescription under Section 27 of the Limitation Act, 1963, there
is no subsisting right to be enforced under Article 32 of the
Constitution. In other case where the remedy only, not the right,
is extinguished by limitation the Court will refuse to entertain
stale claims on the ground of public policy

On 30th November, 2008, Mohan took a loan of 20,000 from Sohan. He paid 5,000 to him
on 31st August, 2011, towards part-payment. After that, Sohan did not receive any amount
from Mohan. Subsequently, Sohan instituted a suit for recovery of the dues from Mohan
after the expiry of 2 years from the date of last part-payment. Advise, whether (i) the suit
Q5.
is maintainable; and (ii) the part- payment is an acknowledgement of payment. (6 marks)
(June 2014)

As per section 19 a fresh period of limitation becomes available to the creditor from the
date of part payment when part-payment or interest payment of debt is made by the debtor
before the expiration of the period of limitation. Further it would be considered an
acknowledgement of payment.

A5. Since in this case Mohan made part-payment on 31st August, 2011, a fresh period of
limitation of years will commence from 31st August, 2011. As per Schedule limitation
period for money lent is 3 years.

So, a fresh period of limitation will commence from 31st August, 2011 and since he filed
suit within 3 years, the suit will be accepted.

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Arpit took a debt of Rs. 10,000 from Bharat on January, 1998 and promised to pay by
31st December, 2003. He could not pay such debt within the stipulated time. On 1st
December, 2006, Arpit paid Rs.500 as interest against such debt to Bharat against
Q6.
receipt. Bharat filed a suit against Arpit to recover such debt on 15th December, 2008.
Whether the suit filed by Bharat is zvithin the period of limitation? Decide with
reasons citing relevant provisions of the law. (5 marks) (June 2009)

As per section 19 a fresh period of limitation becomes available to the creditor from
the date of part- payment when part-payment or interest payment of debt is made by
the debtor before the expiration of the period of limitation. Further it would be
considered an acknowledgement of payment.

A6. Since in this case Arpit paid interest on 1st December, 2006, a fresh period of limitation
of years will commence from 1st December, 2006. As per Schedule limitation period
for money lent is 3 years.

So a fresh period of limitation will commence from 1st December, 2006 and since he
filed suit within 3 years, the suit will be accepted.

SOME PRACTICAL QUESTIONS

1. Star Hotel arranged food, etc., for a marriage party of Richie consisting of 60 persons on
th
30 June, 2000 at the rate of Rs. 200 per person. Rs. 10,000 remained unpaid. Advise Star
Hotel about the period of limitation for filing a suit.

Answer: The Limitation Act, 1963 prescribes different periods of limitation for suits, appeals
and applications. The prescribed limitation period has been envisaged in the Schedule
appended to the said Act: Part (I) of the Schedule stipulates period of limitation for suits relating
to contracts. In case of a suit for the price of food or drink sold by the keeper of a hotel, travel
or lodging house, the period of limitation prescribed there under is three years from the date
when the food or drink is delivered. In the light of the legal provisions stated above, Star Hotel
can file a suit for the recovery of unpaid money within a period of 3 years commencing from
1st July, 2000.

st th
2. On 31 December, 1995, Govind took loan from Ghanshyam. On 16 June, 1999,
Govind made only part payment. After that no payment was made. Ghanshayam
subsequently filed a suit against Govind for recovery of the debt after the expiry of two
years from the date of part payment. Is the suit maintainable?

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Answer: Part payment is acknowledgement by conduct, but under Section 19 of the Limitation
Act it should be made before the expiry of the period of limitation. A fresh period of limitation
is available only when part payment is made within the period of limitation. In the present
problem, part payment of Govind is made after the expiry of limitation period. Therefore, fresh
period of limitation will not be available to Ghanshayam. The suit filed by Ghanshayam is not
maintainable.

3. Sanjay instituted a suit against manoj beyond the prescribed period of limitation. Manoj
did not raise the objection that the suit was beyond the period of limitation. The civil
court allowed the suit for a hearing and decreed. Would the decree be treated valid in
such suit? Give reasons.

Answer: Section 3 of the Limitation Act, 1963 provides that any suit, appeal, or application if
made beyond the prescribed period of limitation shall be dismissed, although limitation has
not been set up as a defense. It is the duty of the Court not to proceed with such suits irrespective
of the fact whether the plea of limitation has been raised or not by the defendant. Section 3 of
the Limitation Act is mandatory. The Court can Suo motto take note the question of limitation.
The question whether a suit is barred by limitation should be decided on the facts as they stood
on the date of presentation of the plaint. The effect of Section 3 is not to deprive the Court of its
jurisdiction. Therefore, the decision of a Court allowing a suit which has been instituted after
the prescribed period of limitation is not vitiated for want of jurisdiction. A decree passed in a
time barred suit is not a nullity. Hence the decree is valid in this case.

st
4. On 31 December, 1997 Suresh took a loan of Rs. 10,000 from Umesh. He paid Rs. 2,000
th
to him on 16 June, 2001 towards part-payment. After that, Umesh did not receive any
amount from Suresh. Subsequently, Umesh instituted a suit for recovery of the dues
from Suresh after the expiry of two years from the date of last part-payment. Decide
whether Umesh will succeed in his suit.

Answer: The problem in question is governed by Section 19 of the Limitation Act, 1963. Here
in this problem two issues are raised.

i. Whether part-payment is an acknowledgement of payment, and

ii. Whether a fresh period of limitation is available.

Under Section 19 of the Limitation Act, 1963 it is provided that where payment on account of
a debt or of interest on a legacy is made before the expiration of the prescribed period of
limitation by the person liable to pay the debt or legacy or by his agent duly authorized in
this behalf, a fresh period of limitation shall be computed from the time when the payment
was made. Part payment is acknowledgement by conduct, but as per Section 19 of the
Limitation Act it should be made before the expiry of the period of limitation. A fresh period
of limitation is available only when part payment is made within the period of limitation.

In this problem, part-payment has not been made within the period of limitation. Therefore,
fresh period of limitation will not be available to Umesh. The suit filed by Umesh is not
maintainable.

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5. Ashwani has taken Rs. 5,000 as a loan from Bhushan and has promised to return the loan
amount within one year, Ashwani failed to return the Ioan amount within the stipulated
period, but he has written a letter’ to Bhushan that they would pay the amount within a
month. Whether the period of limitation will start after expiry of one year or from the
date when Bhushan received the letter? Give reasons.

Answer: In the present case, the period of limitation will start from the date when Bhushan
received the letter. It will not start after the expiry of one year. Section 18 of the Limitation Act
deals with the effect of acknowledgment of liability in respect of property or right on the period
of limitation. The following requirements should be present for a valid acknowledgement as per
Section 18.

i. There must be an admission or acknowledgement;

ii. Such acknowledgement must be in respect of any property or right;

iii. It must be made before the expiry of period of limitation; and

iv. It must be in writing a signed by the party against whom such property or right is
claimed.

If all the above requirements are satisfied, a fresh period of limitation shall be computed from
the time when the acknowledgement was signed.

st
6. Arpit took a debt of Rs. 10,000 from Bharat on January, 1998 and promised to pay by 31
st
December, 2003. He could not pay such debt within the stipulated time. On 1
December, 2006, Arpit paid Rs. 500 as interest against such debt to Bharat against receipt.
th
Bharat filed a suit against Arpit to recover such debt on 15 December, 2008. Whether
the suit filed by Bharat is within the period of limitation? Decide with reasons citing
relevant provisions of the law.

Answer: The given problem relates to Section 19 of the Limitation Act, 1963. Section 19 provides
that where payment on account of a debt or of interest on a legacy is made before the expiration
of the prescribed period by the person liable to pay the debt or legacy or by his agent duly
authorized in this behalf, a fresh period of limitation shall be computed from the time when the
payment was made.

Provided that, save in the case of payment of interest made before the 1st day of January, 1928,
an acknowledgment of the payment appears in the handwriting of, or in a writing singed by, the
person making the payment.

In the present problem the limitation period for Bharat to file a suit to recover a debt from Arpit
expired on 31st December, 2006. But Arpit paid interest amount on 1st December, 2006 i.e. before
the expiry of the limitation period. In view of the provisions of Section 19, Bharat is entitled to a
fresh period of limitation of three years from the date of payment of interest by Arpit. Therefore,
the suit filed by Bharat on 15th December, 2008 is within the period of limitation.
,

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LIST OF SECTIONS

Sections
Particulars of Section

3 Concept of time barred

Extension of time if court is closed

4

5
Doctrine of sufficient cause for expansion of time or condo nation of delay

6, 7 & 8 Period of limitation in the case of persons under legal disability

9 Continuous running of time

12 Calculation of limitation period in case of appeal.

14 Exclusion of time bonafide taken in a court without jurisdiction

16 Death of party

17 Fraud

18 Effects of acknowledgement in writing

19 Effect of part payment of principal amount on period of limitation

20 Acknowledgement by another person

24 Computation of time mentioned in instruments

25 Acquisition of ownership by possession i.e., 20 years in case of easement

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8.1

8 CIVIL PROCEDURE CODE, 1908

INTRODUCTION

The Civil Procedure Code is a general law relating to civil suits. If there is a conflict between the
Code and the special law the latter prevails over the former. Where the special law is silent on a
particular matter the Code applies.
The Civil Procedure Code (CPC) defines the process of settling the disputes in respect of
property, breach of contract and matrimonial disputes. CPC consists of two parts. 158 Sections
form the first part relates to substantive law and the rules and orders contained in Schedule I
form the second part, which is a procedural law.
The substantive law determines rights and liabilities of parties, whereas the procedural law lays
down practice, procedure for enforcing the substantive law.

SOME IMPORTANT TERMS

Cause of Action

"Cause of action" means every fact that it would be necessary for the plaintiff to prove in order
to support his right to the judgement of the Court. Under Order 2, Rule 2, of the Civil Procedure
Code it means all the essential facts constituting the rights and its infringement. It means every
fact which will be necessary for the plaintiff to prove, if traversed in order to support his right to
the judgement.

Decree

"Decree" is defined in Section 2(2) of the Code as

i. the formal expression of an adjudication which, so far as regards the Court expressing it;

ii. conclusively;

iii. determines the rights of the parties;

iv. with regard to all or any of the matters in controversy;

v. in the suit and may be either preliminary (i.e. when further proceedings have to be taken
before disposal of the suit) or final. But decree does not include:

a. any adjudication from which an appeal lies as an appeal from an Order, or

b. any order of dismissal for default.

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Essentials of a decree

Decree-holder

"Decree-holder" means any person in whose favour a decree has been passed or an order capable
of execution has been made. [Section 2(3)] Thus, a person who is not a party to the suit but in
whose favour an order capable of execution is passed is a decree-holder.

Judgement-debtor

"Judgement-debtor" means any person against whom a decree has been passed or an order
capable of execution has been made. [Section 2(10)]. The definition does not include legal
representative of a deceased judgement-debtor.

Judgement

The "judgement" means a statement given by a judge on the grounds of a decree or order [Section
2(9)]. What is ordinarily called as an order is in fact a judgement. Also, an order deciding a
primary issue is a judgement.

Order
As per Section 2(14), the formal expression of any decision of a civil court which is not a Decree
is Order. In simple words it is a decision of Civil Court which is not a decree.
Essentials of an Order

a. An order can be passed by the court at any time during existence of the suit.

b. There is no limit for passing an order by the Court.

c. No appeal lies against the orders except law provides otherwise.

Interlocutory Order

Interlocutory order is given in an intermediate stage between the commencement and

termination of a suit. It is used to provide a temporary or provisional decision on an issue.

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Difference between Decree and Order

Basis Decree Order

It is passed in a suit made on the

It is passed in a suit made on the
When it is passed presentation of plaint, application, and
presentation of plaint
petition

Determination of It has conclusive determination of

It may or may not be conclusive
Rights right

There can be one decree in a suit (at the

Number max. two, if there is a preliminary There can be many orders in a suit
decree involved)

Decrees are always appealable until Orders are generally not appealable
Appealable
specifically forbidden by law until specifically provided by law

Second Appeal Second appeal is not possible

Second appeal is possible

Difference between Decree, Order & Judgement

Decree Order Judgement

Section 2(2) Section 2(14) Section 2(9)

Formal expression of an adjudication Formal expression of

which conclusively determine the right any decision of civil Statement given by judge on
of parties with regarding to the matter in court, which is not the ground of decree or order.
controversy in suit. decree.

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Decree:
Judgement set out in the
• > Preliminary ground and the reason for the
judge to have arrived at the
decision.
• > Final

STRUCTURE AND JURISDICTION OF CIVIL COURTS

Section 3 of the Civil Procedure Code lays down the structure of the courts in following manner-

Jurisdiction

Jurisdiction means the authority of the Court to decide matters that are brought before it for
adjudication. The jurisdiction of the civil court is decided on following basis: -

I. Main Grounds

i. Jurisdiction over the subject matter: When the jurisdiction is decided on the basis of
matters which can be entertained by the Courts, it is said to be jurisdiction over the
subject matter.

Example: A small cause court can try suits for money due under a promissory note
or a suit for price of work done.

ii. Territorial Jurisdiction: Government has decided territorial limit of jurisdiction for
each court. It can try matters falling within the territorial limits of its jurisdiction.

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iii. Jurisdiction over persons: Usually courts have jurisdiction over every person except
specifically prohibited like Foreign State, Ruler, etc.

iv. Pecuniary Jurisdiction: The literal meaning of Pecuniary is 'related to money'. All
courts in the judicial hierarchy have pecuniary limits; and they can't entertain cases
beyond their particular limit.

II. Additional Grounds

i. Original Jurisdiction: When a Court tries and decides suits originally filed before it.
It is called its original jurisdiction.

Example: If High Court decided a case originally filed before it, it is termed as its
original jurisdiction.

ii. Appellate Jurisdiction: When a court hears and decides appeals made to it is against
its subordinate court, it is termed as Appellate Jurisdiction.

Example: If High Court decides a case filed with it as an appeal against District Court,
it is its Appellate jurisdiction.

iii. Original and Appellate Jurisdiction: The Supreme Court, the High Courts and the
District Courts have both original and appellate jurisdiction in various matters.

APPEARANCE OF PARTIES AND CONSEQUENCES OF NON-APPEARANCE

Appearance and non-appearance is an important issue to settle a dispute. Order IX of the Code
of Civil Procedure, 1908 lays down the provision of consequences of appearance and non-
appearance of parties in a civil case.

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EFFECT OF NON-APPEARANCE OF PARTIES

Even after proper serving of summon a party does not appear, following will be the
consequences: -

Ex-parte means an order or decree passed on the basis of documents, evidences and records
available in the absence of one party.

Note:

1. If both plaintiff and defendant do not appear, the suit will be dismissed.

2. Plaintiff means the party who files the suit and defendant mean the party against whom
the suit is filed.

SECTION 10- STAY OF SUIT DOCTRINE OF RES SUB-JUDICE

This provision requires that where there is identity of the matters directly or substantially is issue
in two suits, then the subsequent suit must be stayed. This provision is also known as Res-
subjudice.

Note: It is to be noted that the subsequent suit is merely stayed and not dismissed. Secondly, the
section does not bar the institution of a suit, it bars only the trial of such a suit.

There are following essential conditions for stay of suit:

• There must be two suits instituted at different times

• The matter in issue in the second suit should be directly and substantially in issue in the
previously instituted suit.

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• Such suit should be between the same parties.

• Such previously instituted suit is still pending in a court of competent jurisdiction.

In Madgvi Amma Bhawani Amma v Kunjikutty PM Pillai, AIR 2000, it has been decided by the
Supreme Court this principal of res judicata applies where an issue which has been raised in a
subsequent, I suit was directly and substantially in issue in former suit between the same parties
and was heard and decided finally. Findings incidentally recorded do not operate as res judicata.

➢ Case Law- Wings Pharmaceuticals v Swan Pharmaceuticals

A suit was instituted by the plaintiff company alleging infringement by the defendant
company by using trade name of medicine and selling the same in wrapper and carton of
identical design with same color combination etc. as that of plaintiff company. A
subsequent suit was instituted in different court by the defendant company against the
plaintiff company with the same allegation. The Court held that subsequent suit should be
stayed as simultaneous trial of the suits in different courts might result in conflicting
decisions as issue involved in two suits was totally identical.

SECTION 11- DOCTRINE OF RES-JUDICATA

• The doctrine of res-judicata or the Rule of conclusiveness of judgments is explained in

Section 11 of the Civil Procedure Code.

• It provides that once the matter is finally decided by a competent court, no party can be
permitted to re-open it in subsequent litigation.

• The principle underlines that no one shall be vexed twice for the same cause. It prevents
two different decrees on the same subject.
If a case is decided between two parties and a subsequent case is filed between the same
parties on the same issue, then the subsequent case should be dismissed if the earlier court
was competent to decide the case and the case was conclusively determined by the earlier
court.

Essential elements

• An earlier case is decided.

• Case was decided by competent court.

• The issue in both the cases is same.

• Parties in both the cases are same.

• The earlier case was conclusively decided.

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The application of this doctrine is based on the public policy so that the patties would not be
harassed again and again on the same issue already decided. The court’s time will also not get
vested on matter already decided.
Note: It may be noted the Section 11 will not be applicable in those circumstances where the first
suit has been dismissed on technical ground and has not been decided on merit of the case.

Constructive Res judicata - Every court is bound to apply res judicata, there is a compulsion that
subsequent suit must be barred. The purpose of a construction res judicata is as follows:

• Endless litigation can’t be allowed on the same issue.

• Two parties to a same issue must not waste the time of court again.

• Issues once decided should not be disturbed again.

When the earlier case was fully decided than no subsequent dispute should be allowed to be
raised between same parties on the same issue.

Question: Does the principle of ‘res judicata’ apply in case of wrong decision by court? Give
reasons.

Answer: Yes, the principle of ‘res judicata’ applies in case of a wrong decision of court also if the
court was having jurisdiction in the matter concerned. The Apex Court of the land in the case of
State v. Hemant, held that the doctrine of res judicata applies even if the previous decision of a
Court is wrong provided that the court had jurisdiction to try the case.

Thus, the principle of ‘res judicata’ applies in those cases also where the decision of the court was
wrong provided that the court giving the decision was having the jurisdiction to try the
concerned case.

SECTION 12

Section 12 of Civil Procedure Code provides that abatement of suit or its dismissal, for not
bringing the legal representative on record, bars further suit.

SECTION 15

Place of Filing of Suit

SECTION 16

Every suit shall be instituted in the court of lowest grade. Suits regarding immovable property
are instituted in the court within whose jurisdiction, the Immovable property is situated.

SECTION 17
Where immovable property is situated in the jurisdiction of different courts, the suit may be filed
in any of such courts.

SECTION 18

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Where there is apparent uncertainty regarding the jurisdiction of the court, the suit may be filed
in any of such courts.

SECTION 19

Suit with regards to the compensation for wrongs done to the persons or suit pertaining to
movable property can be filed in the court having the jurisdiction over the place where the wrong
was committed or where the defendant resides.

SECTION 20

Where above section i.e., Section 16, 17, 18 and 19 are not applicable, such suits may be filed in
the court having jurisdiction over the place where the defendant resides or where the cause of
action has arisen.

For instance, A resides at Shimla, B at Calcutta and C at Delhi. A, B and C being together at
Varanasi, B and C make a joint promissory note payable on demand and deliver it to A. A may
sue B and C at Varanasi, where cause of action arose. He may also sue them at Calcutta where B
resides or at Delhi where C resides, but in each case, if the non-resident defendant objects, the
suit can’t be proceeded without the leave of the Court.

Section 20 further provides that in the case of a Company, the suit may be filed at any of the
following places: —

• Place where the Principal office or the Head office of the Company is situated.

• Place where the cause of action has arisen, subject to the condition that the company has a
Branch office at such place.

SET-OFF, EQUITABLE SET-OFF AND COUNTER CLAIM

▪ Set-off

Set-off means reciprocal acquittal of debts between the plaintiff and defendant. It has the
effect of extinguishing the plaintiff's claim to the extent of the amount claimed by the
defendant as a counter claim.

In short, both parties extinguish their rights and claims.

Where the defendant's claim to set-off against the plaintiff's demand, in a suit for the
recovery of money, any ascertained sum of money legally recoverable by him from the
plaintiff, the defendant may present a written statement containing the particulars of the
debt sought to be set-off.

Example: Manish sells rice for Rs. 25000 to Ramesh. Ramesh sells cloth worth Rs. 28000 to
Manish. Ramesh files a suit against Manish for recovery of price of cloth. Manish also files
claims for setting-off of the cost of rice in this suit.

For giving effect to any set-off, a written statement shall have to file for pronouncement of
final judgement of the original claim and set-off.

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▪ Equitable set-off

The defendant is permitted to claim set-off in respect of an unascertained sum of money

where the claim arises out of the same transaction, or transactions which can be considered
as one transaction, or where there is knowledge on both sides of an existing debt due to
one party and a credit by the other party found on and trusting to such debt as a means of
discharging it.

Where the defendant claims set-off in respect of an unascertained sum of money, where
the claim arises of the same transaction and then such set-off is known as equitable set-off.

Generally, the suits emerge from cross demands in the same transaction and this doctrine
is intended to save the defendant from having to take recourse to a separate cross suit.

Essentials:

i. There is no sum specified for claim.

ii. The claims must be originated from the same transaction.

In short, the suits emerge from the cross demands in the same transaction and the
defendants may be allowed to claim a set-off for an uncertain amount/claim.

Example: Where A sues B to recover Rs. 50,000/- under a contract, B can claim set-off
towards damages sustained by him due to the breach of the same contract by A.

Difference between Set-off and Equitable Set-off

Set-Off Equitable Set-Off

The claim is of ascertained amount of The claim can be of ascertained or unascertained

money sum of money

Claims need not arise out of same

Both the claims should arise out of same transaction
transaction

It is discretion of the court to grant equitable set-off

It is a right of the party
or not

▪ Counterclaim

A defendant in a suit may, in addition to his right of pleading a set-off, file a suit against
the plaintiff that is known as counter claim. This rule is applicable in the interest of public
policy so as to minimize litigation between the parties which could have been filed by the
defendant separately.

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In short, counter claim means a claim filed by the defendant opposing the claim of the
plaintiff. It is like retaliatory claim by a defendant against the plaintiff's claim.

In simple words in a counter-claim, the defendant puts his claim against plaintiff for a large
amount. A counter- claim is a claim made by the defendant in excess of the right claimed
by the plaintiff. Therefore, the court will now proceed against plaintiff for the balance
amount.

Difference between Set-Off and Counter Claim

Set-Off Counter Claim

The claim is of
ascertained amount of The claim is related to a larger sum of money than original claim
money

It is more a shield to
It is more a sword to counter attack
protect yourself

The amount of
defendant's claim is
The amount of defendant's claim exceeds the plaintiff's claim
lesser than plaintiff's
claim

The court continue to

proceed against The court continue to proceed against plaintiff
defendant.

Note: Counter claim only be filed after plaint filed by the plaintiff.

Example: Ram files a suit against Laxman claiming Rs. 5000/-. Laxman takes a defense that Ram
owes Rs. 8000/- to Laxman as well. In this case since the amount of claim of defendant exceeds
the amount of claim of plaintiff. The court will proceed against Ram for sum exceeding the
original claim i.e. Rs. 3000. (Rs. 8000 - Rs. 5000).
,

Reference Review Revision

Injunction Appeal

OTHER IMPORTANT CONCEPTS DURING PROCEEDING OF A CIVIL CASE

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Reference

Section 113 of the Code lays down the provision of Reference. Whenever a subordinate or lower
court has a reasonable doubt on any question involving law, it can make a reference to the higher
courts.

Application for Reference

Application for reference is made to the higher court only by the lower court, either Suo moto or
on an application made by any party to the suit to the lower court.

Review

Section 114 of the Code lays down the provision of Review. Review means to re-consider, re-
assess or reexamine a given matter. It gives an opportunity to the Courts to correct its own
decision.

Application for Review

Application for review is made to the same court which has passed the decree or order by an
aggrieved party.

When Review is permitted?

Review is permitted in following cases:

• When the decree or order passed is non-appealable.

• When the decree or order passed is appealable, but the aggrieved party has not filed an
appeal.

Revision

Section 115 of the Code deals with Revision. Revision literally means to go thoroughly and to
look again through an order or decree. The case must be the one which is not appealable.
When Revision is permitted?

• When the Court has exercised a jurisdiction not vested in it.

• When the Court failed to exercise a jurisdiction vested in it.

• When the Court acted in exercise of its jurisdiction illegally or with material irregularity.

Injunction

Injunction is a preventive relief given by the courts with an intention to save the interest of one
party whose rights are either invaded or threatened to be invaded.

In simple words, a courts order by which a person is restrained from performing a particular act,
is called injunction.

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Example: Katappa is demolishing a building in which Bahubali has some claims. Bahubali may
ask the competent court to order Katappa to not demolish the building until the trial for the claim
of the building is complete and judgement goes in his favour. This is termed as injunction.

Types of Injunction

There are two types of injunction:

• Temporary Injunction

• Perpetual Injunction

Temporary Injunction: A Court may grant temporary injunction to restrain any such act for the
purpose of staying and preventing the wasting, damaging, alienation or sale or removal or
disposition of the property or dispossession of the plaintiff, or otherwise causing injury to the
plaintiff in relation to any property in dispute in the suit.

The court may grant temporary injunction order on the following grounds: -

i. That any property in dispute in a suit is in danger of being wasted, damaged or alienated
by any party to the suit, or wrongfully sold in execution of a decree, or

ii. That the defendant threatens, or intends to remove or dispose of his property with a view
to defrauding his creditors, or

iii. That the defendant threatens to dispossess the plaintiff or otherwise cause injury to the
plaintiff in relation to any property in dispute in the suit.

But before passing temporary injunction, the Court must satisfy itself that substantial and
irreparable harm or injury would be suffered by him if such temporary injunction is not
granted and that such loss or damage or harm cannot be compensated by damages.

Interlocutory orders

The court may grant interlocutory orders in respect of any movable property provided such
property is of speedy and natural decay nature. This type of orders can only be passed by the
judge based on circumstances of the suit.

The court may on the application of the applicant of any party to a suit order the sale of such
detained goods.

Note: The movable property must be the subject matter of such suit or attached before the
judgement of the court.

Appeals

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The word appeal has not been defined under the code, but it means an application by an
aggrieved party to an appellate court, asking it to set aside or reverse a decision of subordinate
court.

In simple words if any party to suit feels aggrieved by any decree or order passed by a court, he
may choose to go up to the higher courts, if that decree or order is appealable.

Appeal is a process for requesting a formal change to a decision of subordinate adjudication.

Right of appeal is not a natural right or inherent right attached to litigation. Such right is given
by statute or by rules having the force of statute.

Four Kinds of Appeals

i. Appeal from Original Decree [Section 96-99]

Appeals from original decrees may be preferred in the Court superior to the Court passing
the decree. An appeal may lie from an original decree passed ex parte. Where the decree
has been passed with the consent of parties, no appeal lies.

ii. Second Appeals [Section 100-103]

An appeal lies to the High Court from every decree passed in appeal by any subordinate
court if the High Court is satisfied that the case involves a substantial question of law.

The memorandum of appeal must precisely state the substantial question of law involved
in the appeal. If the High Court is satisfied that a substantial question of law is involved,
such question shall be formulated by it and the appeal is to be heard on the question so
formulated.

iii. Appeal from Order [Section 104-106]

Orders are generally not appealable, until and unless it has been specifically provided in
the law. But in no case second appeal can be made in the case of orders.

Appeal from orders would lie only from the following orders on grounds of defect or
irregularity in law:

• An order refusing leave to institute a suit,

• An order for compensation for obtaining attachment or injunction on insufficient

ground,

• An order under the Code imposing a fine or directing the detention or arrest of any
person except in execution of a decree,

• Appealable orders as set out under Order 43, R.l.

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iv. Appeal to the Supreme Court [Section 104-106]

Appeals to the Supreme Court would lie in the following cases: -

• From any decree or order of Civil Court when the case is certified by the Court
deciding it to be fit for appeal to the Supreme Court or when special leave is granted
by the Supreme Court itself,

• From any judgement, decree or final order passed on appeal by a High Court or by
any other court of final appellate jurisdiction,

• From any judgement, decree or final orders passed by a High Court in exercise of
original civil jurisdiction.

The general rule is that the parties to an appeal shall not be entitled to produce
additional evidence whether oral or documentary.

But the appellate court has discretion to allow additional evidence in the following
circumstances: -

i. When lower court has refused to admit evidence, which ought to have been
admitted.

ii. The appellate court requires any document to be produced or any witness to
be examined to enable it to pronounce judgement.

iii. For any other substantial cause. But in all such cases the appellate court shall
record its reasons for admission of additional evidence: - The essential factors
to be stated in an appellate judgement are:

• The points for determination,

• The decision thereon,

• The reasons for the decision, and

• Where the decree appealed from is reversed or varied, the relief to which the
appellant is entitled. The judgement shall be signed and dated by the judge or judges
concurring therein.

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SUITS BY OR AGAINST MINOR

If Minor is Plaintiff

Every suit by a minor shall be instituted in his name by a person who in such suit shall be called
the next friend of the minor. The next friend should be a person who is of sound mind and has
attained majority.

If Minor is Defendant

Where the defendant is a minor, the Court, on being satisfied of the fact of his minority, shall
appoint a proper person to be guardian for the suit for such minor.

When minor attain majority

When the minor plaintiff attains majority, he may elect to proceed with the suit or elect to
abandon it.

If he elects to continue with the suit, he shall apply for an order discharging the next friend and
the title of the suit will be corrected.

If he elects to abandon the suit, he shall apply for an order to dismiss the suit and has to pay the
costs incurred by defendants.

SUMMARY PROCEDURE

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The object of summary suit or summary procedure is to summarize the procedure of suit in those
cases where the defendant does not have any defense. It is to avoid unnecessary destruction by
the defendant.

The object of summary suit or summary procedure is to summarize the procedure of suit in those
cases where the defendant does not have any defense. It is to avoid unnecessary destruction by
the defendant.

Applicability

• Suits related to bills of exchange, hundis, and promissory notes.

• Suits to recover debt under a written contract.

The rules for summary procedure are applicable to the following Courts: -

i. High Courts, City Civil Courts and Small Courts;

ii. Other Courts: In such Courts the High Courts may restrict the operation of Order 37 by
issuing a notification in the Official Gazette.

Effect

In the above cases the Court passes a decree without the defendant getting a chance to defend,
as the debt is proven and there is no point in keeping the trial pending.

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9 INDIAN PENAL CODE, 1860

INTRODUCTION

Crime is a social phenomenon. It is a wrong committed by an individual in a society. It arises

first when a state is organised, people set up rules, the breaking of which is an act called crime.

Crime is what the law says it is. The difference between a criminal offence and a civil wrong is
that while the former is considered a wrong against the society because of their grave nature, a
civil wrong is a wrong done to an individual. It is believed that serious crimes threaten the very
existence of an orderly society, and therefore, if such a crime is committed, it is committed
against the whole society.

In India, the base of the crime and punitive provision has been laid down in Indian Penal Code,
1860. In this Code the definition of crime has not been attempted or defined but according to its
section 40 the word ‘Offence’ denotes a thing made punishable by the Code.

INDIAN PENAL CODE, 1860

The Indian Penal Code was passed in the year 1860 but it came into force on 1st January 1862,
and it applies to the whole of India except the state of Jammu and Kashmir. The State of Jammu
and Kashmir, in view of the special status under Article 370 of the India Constitution, has a
separate penal code, though substantially of the same nature and character as the IPC.

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INTRA TERRITORIAL V/S EXTRA TERRITORIAL JURISDICTION OF INDIAN
PENAL CODE, 1860

The geographical area or the subjects to which a law applies is defined as the jurisdiction of that
law. Ordinarily, laws made by a country are applicable within its own boundaries because a
country cannot have a legal machinery to enforce its laws in other sovereign countries. Thus,
for most of the laws, the territorial jurisdiction of a law is the international boundary of that
country.

INTRA-TERRITORIAL JURISDICTION

Where a crime under any provision of IPC is committed within the territory of India the IPC
applies and the courts can try and punish irrespective of the fact that the person who had
committed the crime is an Indian national or foreigner. This is called ‘intra-territorial
jurisdiction’ because the submission to the jurisdiction of the court is by virtue of the crime
being committed within the Indian territory.

SECTION 2 OF THE CODE DEALS WITH INTRA-TERRITORIAL JURISDICTION

OF THE COURTS

The section declares the jurisdictional scope of operation of the IPC to offences committed
within India. The emphasis on ‘every person’ makes it very clear that in terms of considering
the guilt for any act or omission, the law shall be applied equally without any discrimination on
the ground caste, creed (Belief), nationality, rank, status or privilege. The Code applies to any
offence committed:

▪ Within the territory of India as defined in Article 1 of Constitution of India. or

▪ Within the territorial waters of India

or

▪ On any ship or aircraft either owned by India or registered in India.

Note:- It should be noted that it is not defence that the foreigner did not know that he was
committing a wrong, the act itself not being an offence in his own country. (Ignorance of Law'
is no Excuse)

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EXEMPTIONS FROM INTRA-TERRITORIAL JURISDICTION OF IPC

i. Article 361(2) of the Constitution protects criminal proceedings against the President or
Governor of a state in any court, during the time they hold office.

ii. In accordance with well-recognized principles of international law, foreign sovereigns

are exempt from criminal proceedings in India.

iii. This immunity (protection) is also enjoyed by the ambassadors and diplomats of foreign
countries who have official status in India.

iv. This protection is extended to all secretaries and political and military attaches, who are
formally part of the missions.

EXTRA-TERRITORIAL JURISDICTION
Countries, however, also make laws that apply to territories outside of their own country, this
is called the extra-territorial jurisdiction.

Section 3 and section 4 of the IPC provide for extra-territorial jurisdiction: Where a crime is
committed outside the territory of India by an Indian national, such a person may be tried and
punished by the Indian courts.

According to section 3 if anyone commits any offence beyond India which is punishable in our
country under any Indian law, he is liable to be convicted and punished in the same manner as
if the crime was committed in India.

Section 4 expands on section 3, while at the same time clarifying that the provisions of the Code
shall apply to first, in case of Indians, for any offence committed outside and beyond India; and
second, in case of any person in any place without and beyond India for targeting computer
resource located in India. (Computer Hacking)

Section 4 also talks about the applicability of IPC to any offence committed by any person on
any ship or aircraft registered in India wherever it may be. (Indian Plane Hijacked in Nepal by
Pakistani Terrorists)

Section 188 of CrPC deals with Extra Territorial Jurisdiction. 5. Admiralty Jurisdiction

The jurisdiction of a court over offences committed in high seas is based on the precept that a
ship in the high seas is considered to be a floating island belonging to the nation whose flag the
ship flies. It does not matter where the ship or boat is, whether it is in high seas or on rivers,
whether it is moving or stationery, having been anchored for the time being. This jurisdiction
called the ‘admiralty jurisdiction’.

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CASE LAW

S.NO. CASE NAME PROVISONS

In this regard the Supreme Court held that it is obvious that for an
Indian law to operate and be effective in the territory where it
operates, i.e., the territory of India, it is not necessary that the laws
Mobarik Ali Ahmed should either be published or be made known outside the country
1
v. State of Bombay in order to bring foreigners under its ambit. It would be apparent
that the test to find out effective publication would be publication
in India, not outside India so as to bring it to the notice of everyone
who intends to pass through India.

DIFFERENCE BETWEEN CRIMINAL AND CIVIL WRONG

The difference between a criminal offence and a civil wrong is that while the former is
considered a wrong against the society because of their grave nature, a civil wrong is a wrong
done to an individual.

CRIME AND ITS FUNDAMENTAL ELEMENTS

In reference to the Indian Penal Code (Code or IPC) crime means such act or omission which
has been forbidden by the Code and if such act or omission is committed by anyone, he or she
becomes liable to punishment prescribed under the Code.

ESSENTIAL INGREDIENTS OF CRIME

I. Human Being

The first requirement for commission of crime is that the act must be committed by a human
being. Only a human being is subject of IPC.

Example: If a lion killed a man, the lion will not be punishable under IPC, as the crime is done
by lion, who is not a human being.

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II. Mens Rea (Guilty Mind)

Mens Rea is a Latin word which means a guilty mind. Mens rea is the fundamental principle to
constitute a crime. It is based on maxim "Actus non facit ream nisi mens sit rea" which means
an act will in itself not be considered as a crime if guilty intention is missing.

The general rule to be stated is "there must be a mind at fault before there can be a crime".

In simple words, a bad intention or guilt is an essential ingredient in every crime.

Example: Tara Singh is a lorry driver who ended up hitting and killing a pedestrian. Imagine
two situations in this:

Situation 1: Tara Singh never saw the person until it was too late, tried his best to stop the lorry,
but could do nothing to stop the accident and in fact ended up killing the pedestrian.

Situation 2: Tara Singh has been looking out for the pedestrian and upon seeing him, steered
towards him and slammed into him, killing him on the spot.

In Situation 1 Tara Singh will be liable only in civil court for monetary damages as the intention
to kill is missing. Whereas in Situation 2 Tara Singh will be criminally liable because he
intended to kill the pedestrian.

Therefore, even though the pedestrian is killed in both situations, the intent of Tara Singh was
different and so punishments will also be different.

The act is judged not from the mind of the wrong-doer, but the mind of the wrong-doer is
judged from the act. Forms of Mens Rea

1. Intention: Intention is defined as The purpose with which an act is done'. Intention indicates
the position of mind, condition of someone at particular time of commission of offence and also
will of the accused to see effects of his unlawful conduct.

Criminal intention does not mean only the specific intention but it includes the generic
intention as well.

Example: A poisons the food which B was supposed to eat with the intention of killing B. C eats
that food instead of B and is killed. A is liable for killing C although A never intended it.

2. Negligence: Negligence is the second form of mens rea. Negligence is not taking care, where
there is a duty to take care. The standard of care established by law is that of a reasonable man
in identical circumstances. Reasonable care may differs from thing to thing depending upon
situation of each case. In criminal law, the negligent conduct amounts to mens rea.

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For Example: For every medical negligence, a doctor can be tried under IPC.

3. Recklessness: Recklessness occurs when the actor does not desire the consequence, but is able
to foresee the possibility of risk and still consciously takes the risk. Recklessness is a form of
mens rea.

For Example: Drink & Drive is prohibited and once a person does that, he shall be punished for
recklessness.

Exception to Mens Rea

There are many exceptional cases where mens rea is not required in criminal law. Some of them
are as follows:-

(a) Liabilities imposed by statute: Where a statute imposes liability, the presence or absence of a
guilty mind is irrelevant.

(b) Petty Cases: Where it is difficult to prove mens rea and penalties are petty fines. In such
petty cases, speedy disposal of cases is necessary and the proving of mens rea is not easy. An
accused may be fined even without any proof of mens rea.

(c) Public Interest: In the interest of public safety, strict liability is imposed and whether a
person causes public nuisance with a guilty mind or without guilty mind, he is punished.

(d) Ignorance of Law: If a person violates a law even without the knowledge of the existence of
the law, it can still be said that he has committed an act which is prohibited by law. In such
cases, the fact that he was not aware of the law and hence did not intend to violate it is no
defence and he would be liable as if he was aware of the law. This follows from the maxim
'ignorance of the law is no excuse'.

III. ACTUS REA

Actus Rea is a Latin word which means criminal act. It is the actual physical act of committing a
crime. There cannot be a crime if an actual wrongful or criminal act has not taken place.

A man may be held fully liable even when he has taken no part in the actual commission of the
crime. For example, if a number of people conspire to murder a person and only one of them
actually shoots the person, every conspirator would be held liable for it.

IV. Injury to another person

An injury should have occurred to another party due to Actus rea.

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9.7

STAGES OF CRIME

The commission of a crime consists of some significant stages. If a person commits a crime
voluntarily, it involves following four important stages:-

1. Criminal Intention

Criminal intention is the first stage in the commission of offence. Intention is the conscious
exercise of mental faculties of a person to do an act for the purpose of accomplishing or
satisfying a purpose. Intention means doing any act with one’s will, desire, voluntariness,
malafides and for some purpose. In the IPC, all these varied expressions find place in the
various sections of the Code.

2. Preparation

Preparation means to arrange necessary measures for commission of intended criminal act.
Preparation itself is not punishable as it is difficult to prove that necessary preparations were
made for commission of the offence. But in certain exceptional cases mere preparation is also
punishable.

➢ Preparation to wage war against the Government (section 122).

➢ Preparation for counterfeiting of coins or Government Stamps (sections 233 to 235, 255
and 257).

➢ Possessing counterfeit coins, false weights or measurements and forged documents

(section242, 243, 259, 266 and 474).

➢ Making preparation to commit dacoity (section 399),

3. Attempt
Attempt, which is the third stage in the commission of a crime, is punishable. Attempt has been
called as a preliminary crime. Section 511 of the IPC does not give any definition of ‘attempt’
but simply provides for punishment for attempting to commit an offence. Attempt means the
direct movement towards commission of a crime after necessary preparations have been made.
It should be noted that whether an act amounts to an attempt to commit a particular offence is a
question of fact depending on the nature of crime and steps necessary to take in order to
commit it.

4. Commission of Crime or Accomplishment: - The last stage in the commission of crime is its
accomplishment. If the accused succeeds in his attempt, the result is the commission of crime

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9.8
and he will be guilty of the offence. If his attempt is unsuccessful, he will be guilty for an
attempt only. If the offence is complete, the offender will be tried and punished under the
specific provisions of the IPC.

PRESUMPTION OF INNOCENCE AND BURDEN OF PROOF

There is a presumption of innocence in favour of any person accused of committing any crime.
It means that in the eyes of the law, the accused person is innocent till it is proven otherwise. So
strong is this presumption that in order to rebut it, the prosecution must prove it ‘beyond
reasonable doubts’ that the crime was committed by the accused.

PUNISHMENT

1. Death:- A death sentence is the harshest of punishments provided in the IPC, which involves
the judicial killing or taking the life of the accused as a form of punishment. The Supreme Court
has ruled that death sentence ought to be imposed only in the ‘rarest of rate cases’.

The IPC provides for capital punishment for the following offences:

o Murder
o Dacoity with Murder.
o Waging War against the Government of India.
o Abetting mutiny actually committed.
o Giving or fabricating false evidence upon which an innocent person suffers death o Abetment
of a suicide by a minor or insane person;
o Attempted murder by a life convict.

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2. IMPRISONMENT:- IMPRISONMENT WHICH IS OF TWO DESCRIPTIONS
NAMELY -

➢ Rigorous Imprisonment, that is hard labour;

➢ Simple Imprisonment

Life Imprisonment:- Imprisonment for life meant rigorous imprisonment, that is, till the last
breath of the convict.

3.Forfeiture of property: - Forfeiture is the divestiture of specific property without

compensation inconsequence of some default or act forbidden by law. The Courts may order
for forfeiture of property of the accused in certain occasions. The courts are empowered to
forfeit property of the guilty under section 126 and section 127 of the IPC.

4.Fine:- Fine is forfeiture of money by way of penalty. It should be imposed individually and
not collectively. When court sentences an accused for a punishment, which includes a fine
amount, it can specify that in the event the convict does not pay the fine amount, he would
have to suffer imprisonment for a further period as indicated by the court, which is generally
referred to as default sentence.

CRIMINAL CONSPIRACY

Criminal conspiracy is covered under section 120A and 120-B of the IPC.

Definition of criminal conspiracy (Section 120A)

When two or more persons agree to do, or cause to be done,-

i. An illegal act, or

ii. 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.

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, that is until the

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conspiratorial agreement is terminated by completion of its performance or by abandonment or
by frustration or however else it may be.

CASE LAWS

S.NO. CASE NAME

PROVISONS

The ingredients of the offence of criminal conspiracy

1. an agreement between two or more persons;

2. the agreement must relate to doing or causing to be done

R. Venkatkrishnan v.
1 either
CBI
• an illegal act;

• an act which is not illegal in itself but is done by illegal

means.

In order to prove a criminal conspiracy which is punishable

under section 120B there must be direct or circumstantial
NCT of Delhi v. Navjot evidence to show that there was an agreement between two or
2 Sandhu, (SC), more persons to commit an offence, the accused had never
(Parliament attack case) contacted the deceased terrorist on place but had helped one of
the conspirators to flee to a safer place after incident was not
held guilty as conspirator.

PUNISHMENT OF CRIMINAL CONSPIRACY (SECTION 120B)

➢ 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.

➢ 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.

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➢ The punishment for conspiracy is the same as if the conspirator had abetted the offence.
The punishment for criminal conspiracy is more severe if the agreement is one to
commit a serious offence and less severe otherwise.

CRIMINAL MISAPPROPRIATION OF PROPERTY

Section 403 and 404 of the Indian Penal Code, 1860 deal with Criminal Misappropriation of
Property.

DISHONEST MISAPPROPRIATION OF PROPERTY (SECTION 403)

Whoever dishonestly misappropriates or converts to his own use any movable property, shall
be punished with imprisonment of either description for a term which may extend to two
years, or with fine, or with both.

Dishonestly is an essential ingredient of the offence and the Code provides that whoever does
anything with the intention of causing wrongful gain to one person or wrongful loss to another
person, is said to do that ‘dishonestly’. Misappropriation means the intentional, illegal use of
the property or funds of another person for one's own use or other unauthorised purpose.

There are two things necessary before an offence under section 403 can be established.

1) Property must be misappropriated or converted to the use of the accused, and,

2) Secondly, that he must misappropriate or convert it dishonestly.

CASE LAWS

S.NO. CASE NAME PROVISONS

It has been held that under Section 403 criminal

misappropriation takes place even when the possession has been
In Bhagiram Dome v. innocently come by, but where, by a subsequent change of
1
Abar Dome, intention or from the knowledge of some new fact which the
party was not previously acquainted, the retaining become
wrongful and fraudulent.

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Fifteen bundles of electric wire were seized from the appellant

but none including electricity department claimed that wires
were stolen property. Evidence on records showed that
impugned electric wire was purchased by the applicant from
In Mohammad Ali v. scrap seller. Merely applicant not having any receipt for
2
State, purchase of impugned wire cannot be said to be guilty of offence
punishable under Section 403 of the Code. Order of framing
charge was, therefore, quashed by the Supreme Court and the
accused was not held guilty under section 403 of the Indian Penal
Code, 1860.

There were two contracts- one between the principal and

contractor and another between contractor and sub-contractor.
On completion of work sub-contractor demanded money for
completion of work and on non-payment filed a criminal
complaint alleging that contractor having received the payment
from principal had misappropriated the money. The magistrate
In U. Dhar v. State of
3 took cognizance of the case and High Court refused to quash the
Jharkhand,
order of magistrate. On appeal to the Supreme Court, it was held
that matter was of civil nature and criminal complaint was not
maintainable and was liable to be quashed. The Supreme Court
also observed that money paid by the principal to the contractor
was not money belonging to the complainant, sub- contractor,
hence there was no question of misappropriation.

SOME ILLUSTRATIONS

1) A takes property belonging to Z out of Z's possession, in good faith believing at the time when
he takes it, that the property belongs to himself. A is not guilty of theft; but if A, after discovering
his mistake, dishonestly appropriates the property to his own use, he is guilty of an offence under
this section

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2) A finds a rupee on the high road, not knowing to whom the rupee belongs, A picks up the
rupee. Here A has not committed the offence defined in this section.

3) A finds a letter on the road, containing a bank note. From the direction and contents of the letter
he learns to whom the note belongs. He appropriates the note. He is guilty of an offence under this
section.

4) A sees Z drop his purse with money in it. A picks up the purse with the intention of restoring it
to Z, but afterwards appropriates it to his own use. A has committed an offence under this section.

5) A finds a purse with money, not knowing to whom it belongs; he afterwards discovers that it
belongs to Z, and appropriates it to his own use. A is guilty of an offence under this section.

6) A finds a valuable ring, not knowing to whom it belongs. A sells it immediately without
attempting to discover the owner. A is guilty of an offence under this section.

DISHONEST MISAPPROPRIATION OF PROPERTY POSSESSED BY DECEASED

PERSON AT THE TIME OF HIS DEATH (SECTION 404)

Offence: If a person dishonestly misappropriates or converts for his own benefit any property
of a deceased person, knowing that such property was in the possession of a deceased person at
the time of that person's death, shall be guilty under section 404.

Time of commission of this offence: The offence under this section shall be committed between
the time when the possessor of the property dies, and the time when it comes into the
possession of some person or officer authorised to take charge of it.

Punishment: Imprisonment upto 3 years shall also be liable to fine, and if the offender at the
time of such person's death was employed by him as a clerk or servant, the imprisonment may
extend to seven years.

Illustration:

Z dies in possession of furniture and money. His servant A, before the money comes into the
possession of any person entitled to such possession, dishonestly misappropriates it. A has
committed the offence defined in this section.

CRIMINAL BREACH OF TRUST

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The criminal breach of trust as laid down under section 405 of the IPC is 'dishonest
misappropriation' or 'conversion to own use' another's property, which is similar to the offence
of criminal misappropriation defined under section 403. The only difference between the two is
that in respect of criminal breach of trust, the accused is entrusted with property or with
dominion or control over the property.

Criminal Breach of Trust - Essential Ingredients

Essential Ingredients of
Breach of Trust

Accused dishonestly:
Accused The act is in violation
Misappropriate Use
entrusted with of: Any direction of
property law Any legal contract
Dispose the property

The essential ingredients of the offence of criminal breach of trust are as under:-

1. The accused must be entrusted with the property.

2. The person so entrusted (i.e., the accused) must

- dishonestly misappropriate, or convert to his own use, that property, or

- dishonestly use or dispose of that property.

3. The act was done in violation of

- any direction of law, or

- any legal contract.

Illustrations:

(a) A is an executor to the will of a deceased person and he is directed by the law to divide the
property according to the will. He dishonestly disobeys the law and appropriates them to his
own use. A has committed criminal breach of trust.

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(b) A is a warehouse-keeper. Z going on a journey, entrusts his furniture to A, under a contract
that it shall be returned on payment of a stipulated sum for warehouse room. A dishonestly
sells the goods. A has committed criminal breach of trust.

(c) A, a revenue-officer, is entrusted with public money and is either directed by law, or bound
by a contract, express or implied, with the Government, to pay into a certain treasury all the
public money which he holds. A dishonestly appropriates the money. A has committed
criminal breach of trust.

CASE LAWS

S.NO. CASE NAME PROVISONS

The Supreme Court of India has held that the first ingredient of
criminal breach of trust is entrustment and where it is missing,
the same would not constitute a criminal breach of trust.

Breach of trust may be held to be a civil wrong but when mens-

V.R. Dalai v. Yugendra
1 rea is involved it gives rise to criminal liability also.
Naranji Thakkar
The expression ‘direction of law’ in the context of Section 405
would include not only legislations pure and simple but also
directions, instruments and circulars issued by authority entitled
therefor.

The Supreme Court has held that in the commission of offence of

criminal breach of trust, two distinct parts are involved. The first
OnkarNath Mishra v. consists of the creation an obligation in relation to property over
2
State (NCT of Delhi), which dominion or control is acquired by accused. The second is
a misappropriation or dealing with property dishonestly and
contraiy to the terms of the obligation created.

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Where demand drafts were drawn in the name of company for

supply of goods and neither the goods were sent by the company
nor the money was returned, the Managing Director of the
S.K. Alagh v. State of company cannot be said to have committed the offence under
3
U.P. Section 406 of Indian Penal Code. It was pointed out that in
absence of any provision laid down under statute, a director of a
company or an employer cannot be held vicariously liable for
any offence committed by company itself.

Suryalakshmi Cotton it was held that a cheque is property and if the said property has
been misappropriated or has been used for a purpose for which
Mills Ltd. v. Rajvir the same had not been handed over, a case under Section 406 of
Industries Ltd the Code may be found to have been made out.

To conclude that for an offence to fall under this section all the four requirements are essential
to be fulfilled.

i. The person handing over the property must have confidence in the person taking the
property so as to create a fiduciary relationship between them or to put him in position
of trustee.

ii. The accused must be in such a position where he could exercise his control over the
property i.e; dominion over the property.

iii. The term property includes both movable as well as immovable property within its
ambit.

iv. It has to be established that the accused has dishonestly put the property to his own use
or to some unauthorised use. Dishonest intention to misappropriate is a crucial fact to
be proved to bring home the charge of criminal breach of trust.

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PUNISHMENT FOR CRIMINAL BREACH OF TRUST (SECTION 406)

Case Section Punishment

Punishment for cases other than the following Imprisonment upto 3 years OR with
406
cases Fine OR both

When breach of trust is done by a carrier,

407 Imprisonment upto 7 years AND Fine
wharfinger, or warehouse keeper

When breach of trust is done by clerk or servant 408 Imprisonment upto 7 years AND Fine

When breach of trust is done by a public servant

Imprisonment for life OR
or banker, merchant, factor, broker, attorney or 409
Imprisonment upto 10 years AND Fine
agent

CHEATING

Sections 415 to 420 of Indian Penal Code, 1860 deal with the offence of cheating. Cheating can
be described as a dishonest or unfair act done to gain advantage over the other.

Section 415 defines cheating as follows:-

"Whoever, by deceiving any person, fraudulently or dishonestly induces the person so

deceived to deliver any property to any person, or to consent that any person shall retain any
property, or intentionally induces the person so deceived to do or omit to do anything which he
would not do or omit if he were not so deceived, and which act or omission causes or is likely
to cause damage or harm to that person in body, mind, reputation or property, is said to cheat."

Explanation: A dishonest concealment of facts is a deception within the meaning of this section.

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• The accused must deceive another person.

• The act of deceiving was done intentionally.

• The person who is deceived should be induced to deliver any property, or to do an act.

• Such inducement should be fraudulent or dishonest.

Illustrations:

(a) A, by putting a counterfeit mark on an article, intentionally deceives Z into a belief that this
article was made by a certain celebrated manufacturer, and thus dishonestly induces Z to buy
and pay for the article. A cheats.

(b) A, by exhibiting to Z a false sample of an article intentionally deceives Z into believing that
the article corresponds with the sample, and thereby dishonestly induces Z to buy and pay for
the article. A cheats.

(c) A, by pledging as diamond articles which he knows are not diamonds, intentionally
deceives Z, and thereby dishonestly induces Z to lend money. A cheats.

(d) A intentionally deceives Z into a belief that A means to repay any money that Z may lend to
him and thereby dishonestly induces Z to lend him money, A not intending to repay it. A
cheats.

(e) A intentionally deceives Z into a belief that A has performed A's part of a contract made
with Z, which he has not performed, and thereby dishonestly induces Z to pay money. A
cheats.

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CASE LAWS

S.NO. CASE NAME PROVISONS

The Supreme Court in has held that deception is necessary

Iridium India ingredient under both parts of section. Complainant must prove
that inducement has been caused by deception exercised by the
1
Telecom Ltd. v. accused. It was held that non-disclosure of relevant information
Motorola Incorporated would also be treated a misrepresentation of facts leading to
deception.

The Supreme Court in has held that where the intention on the
part of the accused is to retain wrongfully the excise duty which
M.N. Ojha and others v.
2 the State is empowered under law to recover from another
Alok Kumar Srivastav
person who has removed non-duty paid tobacco from one
bonded warehouse to another, they are held guilty of cheating.

In T, it was held that negligence in duty without any dishonest

intention cannot amount to cheating. A bank employee when on
R. Arya v. State of
3 comparison of signature of drawer passes a cheque there may be
Punjab
negligence resulting in loss to bank, but it cannot be held to be
cheating.

CHEATING BY PERSONATION

As per section 416 a person is said to "cheat by personation" if he cheats by pretending to be

some other person, or by knowingly substituting one person for another, or representing that
he or any other person is a person other than he or such other person really is.

Explanation: The offence is committed whether the individual personated is a real or imaginary
person. Illustrations:

(a) A cheats by pretending to be a certain rich banker of the same name. A cheats by
personation.

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(b) A cheats by pretending to be B, a person who is deceased. A cheats by personation.

CASE LAWS

S.NO. CASE NAME PROVISONS

The money circulation scheme was allegedly mathematical

impossibility and promoters knew fully well that scheme was
Kuriachan Chacko v. unworkable and false representations were being made to induce
1
State of Kerala persons to part with their money. The Supreme Court held that it
could be assumed and presumed that the accused had committed
offence of cheating under section 420 of the IPC.

The accused was alleged to have executed false sale deeds and a
complaint was filed by real owner of property. The accused had a
Mohd. Ibrahim and
bonafide belief that the property belonged to him and purchaser
2 others v. State of Bihar
also believed that suit property belongs to the accused. It was
and another
held that accused was not guilty of cheating as ingredients of
cheating were not present.

It was held that mere breach of contract cannot give rise to

criminal prosecution under section 420 unless fraudulent or
dishonest intention is shown right at the beginning of transaction
when the offence is said to have been committed. If it is
established that the intention of the accused was dishonest at the
Shruti Enterprises v. time of entering into the agreement then liability will be criminal
3
State of Bihar and the accused will be guilty of offence of cheating. On the
other hand, if all that is established is that a representation made
by the accused has subsequently not been kept, criminal liability
cannot be fastened on the accused and the only right which
complainant acquires is to a decree of damages for breach of
contract

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PUNISHMENT FOR CHEATING

Case Punishment
Section

Punishment for cases other than the following Imprisonment upto 1 year OR with
417
cases Fine OR both

If a person who is bound to protect another

person's interest cheats that person with the Imprisonment upto 3 years OR with
418
knowledge that the act will cause wrongful loss Fine OR both
to that party

Imprisonment upto 3 years OR with

Punishment for cheating by personation 419
Fine OR both

Where cheating leads to dishonestly inducing

Imprisonment upto 7 years AND Fine
delivery of property
420

FRAUDULENT DEEDS AND DISPOSITIONS OF PROPERTY

Fraudulent Deeds and Dispositions of Property are covered under section 421 to 424 of the
Indian Penal Code, 1860. These sections deal with fraudulent conveyances referred to in section
53 of the Transfer of Property Act and the Presidency-towns and Provincial Insolvency Acts.

Dishonest or fraudulent removal or concealment of property to prevent distribution

among creditors (Section 421)

Whoever dishonestly or fraudulently removes, conceals or delivers to any person, or transfers

or causes to be transferred to any person, without adequate consideration, any property,
intending thereby to prevent, or knowing it to be likely that he will thereby prevent, the
distribution of that property according to law among his creditors or the creditors of any other
person, shall be punished with imprisonment of either description for a term which may extend
to two years, or with fine, or with both.

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Guwahati High Court in Ramautar Chaukhany v Hari Ram Todi, held that an offence under
this section has following essential ingredients:

(i) That the accused removed, concealed or delivered the property or that he transferred, it
caused it to be transferred to someone;

(ii) That such a transfer was without adequate consideration;

(iii) That the accused thereby intended to prevent or knew that he was thereby likely to
prevent the distribution of that property according to law among his creditors or creditors of
another person;

(iv) That he acted dishonestly and fraudulently.

This section specifically refers to frauds connected with insolvency. The offence under it
consists in a dishonest disposition of property with intent to cause wrongful loss to the
creditors. It applies to movable as well as immovable properties. In view of this section, the
property of a debtor cannot be distributed according to law except after the provisions of the
relevant enactments have been complied with.

Dishonestly or fraudulently preventing debt being available for creditors (Section

422)

Whoever dishonestly or fraudulently prevents any debt or demand due to himself or to any
other person from being made available according to law for payment of his debts or the debts
of such other person, shall be punished with imprisonment of either description for a term
which may extend to two years, or with fine, or with both.

This section, like the preceding section 421, is intended to prevent the defrauding of creditors
by masking property.

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CASE LAWS

S.NO. CASE NAME PROVISONS

It was held that the essential requisites of debt are- (1)

Commissioner of ascertained or ascertainable, (2) an absolute liability, in present or
1 Wealth Tax v G.D. future, and (3) an obligation which has already accrued and is
Naidu subsisting. All debts are liabilities but all liabilities are not debt.

The Supreme Court has laid down that the word ‘demand’
ordinarily means something more than what is due; it means
Mangoo Singh v.
2 something which has been demanded, called for or asked for, but
Election Tribunal,
the meaning of the word must take colour from the context and
so ‘demand’ may also mean arrears or dues.

DISHONEST OR FRAUDULENT EXECUTION OF DEED OF TRANSFER

CONTAINING FALSE STATEMENT OF CONSIDERATION (SECTION 423)

Whoever dishonestly or fraudulently signs, executes or becomes a party to any deed or

instrument which purports to transfer or subject to any charge on property, or any interest
therein, and which contains any false statement relating to the consideration for such transfer
or charge, or relating to the person or persons for whose use or benefit it is really intended to
operate, shall be punished with imprisonment of either description for a term which may
extend to two years, or with fine, or with both.

This section deals with fraudulent and fictitious conveyances and transfers. The essential
ingredient of an offence under section 423 is that the sale deed or a deed subjecting an
immovable property to a charge must contain a false statement relating to the consideration or
relating to the person for whose use or benefit it is intended to operate.

Though dishonest execution of a benami deed is covered under this section, the section stands
superseded by The Prohibition of Benami Properties Transactions Act, 1988 because the latter
covers a wider filed, encompassing the field covered by this section.

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DISHONEST OR FRAUDULENT REMOVAL OR CONCEALMENT OF PROPERTY
(SECTION 424)

Whoever dishonestly or fraudulently conceals or removes any property of himself or any other
person, or dishonestly or fraudulently assists in the concealment or removal thereof, or
dishonestly releases any demand or claim to which he is entitled, shall be punished with
imprisonment of either description for a term which may extend to two years, or with fine, or
with both.

The essential ingredients to bring an offence under section 424 are as follows:

➢ There is a property;

➢ That the accused concealed or removed the said property or assisted in concealing or
removing the said property;

• That the said concealment or removal or assisting in removal or concealment was

done dishonestly or fraudulently.

FORGERY (SECTION 463)

Whoever makes any false document or false electronic record or part of a document or
electronic record, with intent to cause damage or injury, to the public or to any person, or to
support any claim or title, or to cause any person to part with property, or to enter into any
express or implied contract, or with intent to commit fraud or that fraud may be committed,
commits forgery.

PUNISHMENT FOR FORGERY (SECTION 465)

Whoever commits forgery shall be punished with imprisonment of either description for a term
which may extend to two years, or with fine, or with both.

The making of a false document or false electronic record is defined under section 464 of the
Indian Penal Code, 1860

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CASE LAWS

S.NO. CASE NAME

PROVISONS

The Supreme Court, has held that to constitute an offence of

forgery document must be made with dishonest or fraudulent
1 Ramchandran v. State
intention. A person is said to do a thing fraudulently if he does
that thing with intent to defraud but not otherwise.

The Supreme Court in has held that mere alteration of document

Parminder Kaur v.
2 does not make it a forged document. Alteration must be made
State of UP
for some gain or for some objective.

The allegation against the accused was that she furnished a

certificate to get employment as ETT teacher which was found to
be bogus and forged in as much as school was not recognized for
Balbir Kaur v. State of period given in certificate. However the certificate did not
3
Punjab, anywhere say that school was recognized. It was held that
merely indicating teaching experience of the accused, per-se,
cannot be said to indicate wrong facts. So the direction which
was issued for prosecution is liable to be quashed.

DEFAMATION

Section 499 provides that whoever, by words either spoken or intended to be read, or by signs
or by visible representations, makes or publishes any imputation concerning any person
intending to harm, or knowing or having reason to believe that such imputation will harm, the
reputation of such person, is said, except in the cases hereinafter excepted, to defame that
person. The definition can be understood by going through the essentials of defamation.

Essential Ingredient of Defamation

1. An imputation or accusation is made by

- Words, either spoke or written, or

- Signs, or

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- Visible Representations.

2. Such imputation should be published to a third party, i.e. a party other than against whom
the imputation is made.

3. The intention behind such imputation is to harm the reputation of the person against whom
it is made.

Note:

1. If the reputation of a deceased person is harmed by any imputation which also hurts the
feeling of his family and friends will also be covered under defamation.

2. Imputation concerning a company or an association of persons will be treated as defamation.

Exceptions

1. Imputation of truth in public good - If imputation of truth is made in the public good, it will
not be treated as defamation.

2. Public conduct of public servants - An opinion given in good faith about public conduct of
public servant respecting his character will not be treated as defamation.

3. Conduct of any person touching any public question - An opinion given in good faith about
any person touching public question respecting his character will not be treated as defamation.

4. Publication of reports of proceedings of courts - It is not defamation to publish substantially

true report of the proceedings of a Court of justice.

5. Merits of case decided in Court or conduct of witnesses and others concerned - An opinion
given in good faith respecting the merits of any case will not be treated as defamation.

Further any opinion in good faith respecting the conduct of any person as a party, witness or
agent, in any such case.

6. Merits of public performance - It is not defamation to express in good faith any opinion
respecting the merits of any performance which its author has submitted to the judgment of the
public.

7. Censure passed in good faith by person having lawful authority over another - It is not
defamation in a person having over another any authority, either conferred by law or arising
out of a lawful contract made with that other, to pass in good faith any censure on the conduct
of that other in matters to which such lawful authority relates.

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8. Accusation preferred in good faith to authorised person - It is not defamation to prefer in
good faith an accusation against any person to any of those who have lawful authority over
that person with respect to the subject-matter of accusation.

9. Imputation made in good faith by person for protection of his or other's interests - It is not
defamation to make an imputation on the character of another provided that the imputation be
made in good faith for the protection of the interests of the person making it, or of any other
person, or for the public good.

10. Caution intended for good of person to whom conveyed or for public good - It is not
defamation to convey a caution, in good faith, to one person against another, provided that
such caution be intended for the good of the person to whom it is conveyed, or of some person
in whom that person is interested, or for the public good.

PUNISHMENT FOR DEFAMATION

According to section 500 whoever defames another shall be punished with simple
imprisonment for a term which may extend to 2 years, or with fine, or with both.

Kinds of Defamation

Libel

In libel, the defamatory statement is made in some permanent and visible form, such as
writing, printing or pictures.

Slander

In slander it is made in spoken words or in some other transitory form, whether visible or
audible, such as gestures or inarticulate but significant sounds.

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MISCELLANEOUS
PRESUMPTION OF INNOCENCE AND BURDEN OF PROOF

There is a presumption of innocence in favour of any person accused of committing any crime.
It means that in the eyes of the law, the accused person is innocent till it is proven otherwise by
the prosecution.

GENERAL EXCEPTIONS

1. Mistake of Fact- bound by law:- According to section 76, if any one commits any act which
he is bound to do or mistakenly believes in good faith that he is bound by law to do it, he
is not guilty. The mistake or ignorance must be of fact, but not of law. If the mistaken facts
were true, the act would not be an offence. Mistake of fact, is a general defence based on
the Common Law maxim - ignorantia facit excusat; igoranita juris non excusat- (Ignorance
of fact excuses; Ignorance of law does not excuse). In mistake of fact the accused does not
possess mens rea or guilty mind.

2. Act of Judge when acting judicially (section 77):-If any judge in his authority in good faith
believing authorised by law commits any act, no offence is attracted.

3. Act done pursuant to the judgment or order of Court (section 78):- When any act is
committed on judgment or order of the Court of Justice which is in force, it is no offence
even if the judgment or order of the Court is without any jurisdiction, though the person
who executes the judgment and order must believe that the Court has the jurisdiction.
Section 77 protects judges from any criminal liability for their judicial acts. Section 78
extends this protection to ministerial and other staff, who may be required to execute
orders of the court. If such immunity was not extended, then executing or implementing
court orders would become impossible.

4. Mistake of Fact-justified by law:- According to section 79 of the IPC, if any one commits
any act which is justified by law or by reason of mistake of fact and not by reason of
mistake of law believes himself to be justified by Law.

5. Accident in doing a lawful act: - According to section 80, if any one commits any offence
by accident or misfortune without malafide or without knowledge in performance of his
legal duty in legal manner with proper care and caution is no offence.
The protection under this section will apply only if the act is a result of an accident or a
misfortune.
The word ‘accident’ is derived from the Latin word ‘accidere’ signifying ‘fall upon, befall,
happen, chance. It rather means an unintentional, an unexpected act. Thus, injuries caused
due to accidents in games and sports are all covered by this section.

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6. Act likely to cause harm, but done without criminal intent, and to prevent other harm
(section 81):-Any act done by anyone without any criminal intent for saving or preventing
harm to third person or property in good faith is no offence. According to the
‘explanation’ to this section, it is a question of fact in such a case whether the harm to be
prevented or avoided was of such a nature and so imminent as to justify or excuse the risk
of doing the act with the knowledge that it was likely to cause harm.

7. Act of a child under seven years of age (section 82):-If any child who is below seven years
of age commits any offence, he is not guilty because it is the presumption of law that that a
child below 7years of age is incapable to having a criminal intention (mens rea) necessary
to commit a crime.

8. Act of a child above seven and under twelve of immature understanding (section 83):- If
any minor child is in between seven and twelve years of age and not attained the maturity
of what is wrong and contrary to law at the time of commission of offence in not liable to
be convicted and punished.

9. Act of a person of unsound mind (section 84):- Nothing done by any person of unsound
mind is an offence if at the time of doing it, by reason of unsoundness of mind, is
incapable of knowing the nature of the act, or that he is doing what is either wrong or
contrary to law.

10. Act of a person incapable of judgment by reason of intoxication caused against his will
(section 85):-
Nothing is an offence which is done by a person who, at the time of doing it, is, by reason
of intoxication, incapable of knowing the nature of the act, or that he is doing what is
either wrong, or contrary to law: provided that the thing which intoxicated him was
administered to him without his knowledge or against his will.

11. Offence requiring a particular intent or knowledge committed by one who is intoxicated
(section86):- In cases where an act done is not an offence unless done with a particular
knowledge or intent, a person who does the act in a state of intoxication shall be liable to
be dealt with as if he had the same knowledge as he would have had if he had not been
intoxicated, unless the thing which intoxicated him was administered to him without his
knowledge or against his will. If the accused himself takes and consumes intoxicated thing
or material with knowledge or intention and under intoxication he commits any offence he
is liable for punishment.

12. Act not intended and not known to be likely to cause death or grievous hurt, done by
consent(section 87):- When anyone commits any act without any intention to cause death
or grievous hurt and which is not within the knowledge of that person to likely to cause
death or grievious hurt to any person who is more than eighteen years of age and has
consented to take the risk of that harm, the person doing the act has committed no offence.

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This section is based on the principle of ‘volenti-non-fit injuria’ which means he who
consents suffers no injury. The policy behind this section is that everyone is the best judge
of his own interest and no one consents to that which he considers injurious to his own
interest

13. Act not intended to cause death, done by consent in good faith for person's benefit (section
88):-Nothing, which is not intended to cause death, is an offence by reason of any harm
which it may cause, or be intended by the doer to cause, or be known by the doer to be
likely to cause, to any person for whose benefit it is done in good faith, and who has given
a consent, whether express or implied, to suffer that harm, or to take the risk of that harm.
Section 88 extends the operation of consent to all acts except that of causing death
intentionally provided that the act is done in good faith for the benefit of the consenting
party.
For example:- A, a surgeon, knowing that a particular operation is likely to cause the death
of Z who suffers under the painful complaint but not intending to cause Z’s death and
intending in good faith Z’s benefit, performs that operation on Z with Z’s consent. A has
committed no offence. But if surgeon while performing the operation leaves a needle
inside the abdomen of the patient who die due to septic- He would be liable criminally for
causing death by negligence because he did not perform the operation with due care and
caution.

14. On consent of guardian if any act is done in good faith to it (section 89):- This section gives
power to the guardian of a child under 12 years of age or a person of unsound mind to
consent to do an act done by a third person for the benefit of the child or a person of
unsound mind. Anything done by the third person will not be an offence provided that it
is done in good faith and for the benefit of the child or a person of unsound mind. This
section gives protection to the guardians as well as other person acting with the consent of
a guardian of a person under 12 years of age or a person of unsound mind.

15. Consent (section 90):-The consent is not valid if it is obtained from a person who is under
fear of injury, or under a misconception of fact and if the person doing the act knows, or
has reason to believe, that the consent was given in consequence of such fear or
misconception. The consent is also not valid if it’s given by a person who, from
unsoundness of mind, or intoxication, is unable to understand the nature and consequence
of that to which he gives his consent. The consent is given by a person who is under
twelve years of age is also not valid unless the contrary appears from the context.

16. Exclusion of acts which are offences independently of harm caused (section 91):- The
exceptions in sections 87, 88 and 89 do not extend to acts which are offences independently
of any harm which they may cause, or be intended to cause, or be known to be likely to
cause, to the person giving the consent, or on whose behalf the consent is given.

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17. Act done in good faith for benefit of a person without consent (section 92):- Nothing is an
offence by reason of any harm which it may cause to a person for whose benefit it is done
in good faith, even without that person's consent, if the circumstances are such that it is
impossible for that person to signify consent, or if that person is incapable of giving
consent, and has no guardian or other person in lawful charge of him from whom it is
possible to obtain consent in time for the thing to be done with benefit. This defence is
subject to certain exceptions.

18. Communication made in good faith (section 93):- No communication made in good faith is
an offence by reason of any harm to the person to whom it is made, if it is made for the
benefit of that person. For example: A, a surgeon, in good faith, communicates to a patient
his opinion that he cannot live. The patient dies in consequence of the shock. A has
committed no offence, though he knew it to be likely that the communication might cause
the patient's death.

19. Act to which a person is compelled by threats (section 94):- Except murder, and offences
against the State punishable with death, nothing is an offence which is done by a person
who is compelled to do it by threats, which, at the time of doing it, reasonably cause the
apprehension that instant death to that person will otherwise be the consequence. For this
defence to be valid the person acting under threat should not have himself put under such
a situation.

20. Act causing slight harm (section 95):- Nothing is an offence by reason that it causes, or that
it is intended to cause, or that it is known to be likely to cause, any harm, if that harm is so
slight that nonperson of ordinary sense and temper would complain of such harm.

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10 CODE OF CRIMINAL PROCEDURE,1973

INTRODUCTION

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MENS REA

Mens rea means a guilty mind. The fundamental principle of penal liability is embodied in the
maxim ‘actus non facit ream nisi mens sit rea’, i.e., unless an act is done with a guilty intention,
it will not be criminally punishable. The general rule to be stated is “there must be a mind at
fault before there can be a crime”. Thus mens rea in an essential ingredient in every criminal
offence.

PLEADER

With reference to any proceedings in any Court, it means a person authorised by or under any
law for the time being in force, to practice in such Court and includes any other person
appointed with the permission of the Court to act in such proceeding.

Section 2(q) further states that it is an inclusive definition and a non-legal person appointed
with the permission of the Court will also be included.

PUBLIC PROSECUTOR

A "public prosecutor" means any person appointed under Section 24, and includes any person
acting under the directions of a Public Prosecutor.

[Section 2(u)] Public prosecutor, though an executive officer is, in a larger sense, also an officer
of the Court and he is bound to assist the Court with his fair views and fair exercise of his
functions.

BAILABLE OFFENCE AND NON-BAILABLE OFFENCE

A "bailable offence" means an offence which is shown as bailable in the First Schedule or which
is made bailable by any other law for the time being in force. "Non-bailable" offence means any
other offence. [Section 2(a)]

COGNIZABLE OFFENCE AND NON-COGNIZABLE OFFENCE

"Cognizable offence" or "cognizable case" means a case in which, a police officer may, in
accordance with the First Schedule or under any other law for the time being in force, arrest
without warrant.

"Non-cognizable offence" or "non-cognizable" case means a case in which, a police officer has

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no authority to arrest without warrant. Thus, a non-cognizable offence needs special authority
to arrest by the police officer.

In order to be a cognizable case under Section 2(c) of the Code, it would be enough if one or
more (not ordinarily all) of the offences are cognizable.

(Note: It may be observed from the First Schedule that non-cognizable offences are usually
bailable while cognizable offences are generally non-bailable).

COMPLAINT

"Complaint" means any allegation made orally or in writing to a Magistrate, with a view to his
taking action under this Code that some person, whether known or unknown, has committed
an offence, but it does not include a police report. [Section 2(d)]

However, a report made by the police officer in a case which discloses after investigation, the
commission of a non-cognizable offence shall be deemed to be a complaint, and the police
officer making the report as a complainant. In general a complaint into an offence can be filed
by any person except in cases of offences relating to marriage, defamation and offences
mentioned under Sections 195 and 197.

Police report is expressly excluded from the definition of complaint but the explanation to
Section 2(d) makes it clear that such report shall be deemed to be a complaint where after
investigation it discloses commission of a non-cognizable offence. Police report means a report
forwarded by a police officer to a Magistrate under Sub-section (2) of Section 173.

A complaint in a criminal case is what a plaint is in a civil case. The requisites of a complaint
are:

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There is no particular format of a complaint. A petition addressed to the Magistrate containing

an allegation that an offence has been committed, and ending with a prayer that the culprit be
suitably dealt with is a complaint. (Mohd. Yousuf v. Afaq Jahan, AIR 2006 SC 705).

BAIL

It means the release of the accused from the custody of the officers of law and entrusting him to
the private custody of persons who are sureties to produce the accused to answer the charge at
the stipulated time or date.

An "anticipatory bail" is granted by the High Court or a Court of Session, to a person who
apprehends arrest for having committed a non-bailable offence, but has not yet been arrested
(Section 438). An opportunity of hearing must be given to the opposite party before granting
anticipatory bail (State of Assam v. R.K. Krishna Kumar AIR 1998 SC 144).

INQUIRY

It means every inquiry other than a trial, conducted under this Code by a Magistrate or Court.

[Section 2(g)]
— the inquiry is different from a trial in criminal matters;

— Inquiry is wider than trial and it stops when trial begins.

INVESTIGATION

It includes all the proceedings under this Code for the collection of evidence conducted by a
police officer or by any person (other than a Magistrate) who is authorised by a Magistrate in
this behalf. [Section 2(h)]

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The three terms — ‘investigation', ‘inquiry' and ‘trial' denote three different stages of a criminal
case. The first stage is reached when a police officer either on his own or under orders of a
Magistrate investigates into a case (Section 202). If he finds that no offence has been committed,
he submits his report to the Magistrate who drops the proceedings. But if he is of different
opinion, he sends that case to a Magistrate and then begins the second stage—a trial or an
inquiry. The Magistrate may deal with the case himself and either convict the accused or
discharge or acquit him. In serious offences the trial is before the Session's Court, which may
either convict or acquit the accused. (Chapter XVIII)

JUDICIAL PROCEEDING

It includes any proceeding in the course of which evidence is or may be legally taken on oath.
The term judicial proceeding includes inquiry and trial but not investigation. [Section 2(i)]

SUMMONS AND WARRANT CASES

"Summons case" means a case relating to an offence and not being a warrant case. [Section
2(w)]

A "Warrant case" means a case relating to an offence punishable with death, imprisonment for
life or imprisonment for a term exceeding two years. [Section 2(x)]

Those cases, which are punishable with imprisonment for two years or less, are summons
cases, the rest are all warrant cases. Thus, the division is based on punishment that can be
awarded. The procedure for the trial of summons cases is provided by Chapter XX and for
warrant cases by Chapter XIX.

CLASSES OF CRIMINAL COURTS

Following are the different classes of criminal courts:-

• Supreme Court

• High Courts;

• Courts of Session;

• Chief Judicial Magistrates

• Magistrates of the First class;

Magistrates of the second class

The Supreme Court is also vested with some criminal powers. Article 134 of Constitution of
India confers appellate jurisdiction on the Supreme Court in regard to criminal matters from a
High Court in certain cases.

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POWER OF THE COURT TO PASS SENTENCES


a) Sentences which High Courts and Sessions Judges may pass:

a) According to Section 28, a High Court may pass any sentence authorized by law.
b) A Sessions Judge or Additional Sessions Judge may pass any sentence authorized by
law, but any sentence of death passed by any such judge shall be subject to confirmation
by the High Court.
c) An Assistant Sessions Judge may pass any sentence authorized by law except a
sentence of death or of imprisonment for life or of imprisonment for a term exceeding
ten years.

b) Sentences which Magistrates may pass 


Section 29 lays down the powers of individual categories of Magistrates to pass the sentence as
under: -

a) The Court of a Chief Judicial Magistrate – may pass any sentence of imprisonment not
exceeding 7 years.
b) Magistrate of the First class - may pass any sentence of imprisonment not exceeding 3
years or with a fine exceeding RS 5000
c) Magistrate of the Second class – may pass any sentence of imprisonment not exceeding
1 year or with a fine exceeding RS 1000

c) Sentence of imprisonment in default of fine

Where a fine is imposed on an accused and it is not paid, the law provides that he can be
imprisoned for a term in addition to a substantive imprisonment awarded to him, if any.
Section 30 defines the limits of Magistrate's powers to award imprisonment in default of
payment of fine.

It provides that the Court of a Magistrate may award such term of imprisonment in default of

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payment of fine as is authorised by law provided the that the term:

(i) Is not in excess of the powers of the Magistrate under Section 29; and
(ii) Where imprisonment has been awarded as part of the substantive sentence, it
should not exceed 1 /4th of the term of imprisonment which the Magistrate is
competent to inflict as punishment for the offence otherwise than as imprisonment
in default of payment of the fine.

ARREST OF A PERSON


The provisions given under the Code related to arrest can be laid down as follows:-

1) Arrest without Warrant

As per section 41, any police officer can arrest a person without a warrant in following cases :-

• Cognizable Offence

• Offence of House breaking without any lawful justification

• A proclaimed offender

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• Offenders of stealing property

• Obstructing a police officer in the execution of his duty

• If a person escaped, or attempts to escape, from lawful custody

• A deserter from any of the Armed Forces

• A released convict on breach of any rules imposed on him

• Wage war against Government of India

• Any offender has been released by the Court but offender doesn't comply with the order of
the Court

• If a person has committed an act outside India, which if committed in India would have
amounted to offence and punishable in India

• If a requisition is received whether written or oral from any other police officer. The
requisition should state the exact person to be arrested along with the offence he has
committed. Further the police officer who is issuing a requisition should at the first place have
power to arrest the person without a warrant

Example: Shakti Kapoor has committed a cognizable offence in Mumbai and to save himself
from arrest he escaped to Kolkata. If Mumbai police issues a requisition to Kolkata police
stating the offence and identity of offender, the Kolkata police can arrest Shakti Kapoor without
a warrant.

If in the above case Shakti Kapoor committed a non-cognizable offence, he cannot be arrested
by Kolkata police without warrant on requisition given by Mumbai police, as Mumbai police
originally had no power to arrest him without a warrant.

2) Arrest on refusal to give Name and Residence

When any person who, in the presence of a police officer, has committed or has been accused of
committing non-cognizable offence refuses to give his name and residence or gives a name or
residence which such officer has reason to believe to be false, he may be arrested by such officer
in order that his name or residence may be ascertained.

3) Arrest by a Private Person

As per section 43, a private person can arrest any person without a warrant in following cases:-

• If a person has committed a cognizable and non-bailable offence in his presence, or

• He is a proclaimed offender, or

• When he is directed to arrest that person

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4) Arrest by a Magistrate 


As per section 44, a Magistrate can arrest without a warrant, any person:

• Who has committed an offence in his presence,

• For whose arrest he is competent to issue warrant. 


5) Arrest of armed force person 


As per section 45 member of the Armed Forces of the Union cannot be arrested for anything
done by him in the discharge of his official duties except after obtaining the consent of the
Central Government. 


SUMMON AND WARRANT

• SUMMON


A summon is a written notice issued by the Court ordering either to appear or to produce a
document before the court, at a stipulated time and place. 


Essentials of a Summons 


• It should be in writing

• It should be in Duplicate

• It should be signed by Presiding Officer

• It should bear the seal of Court

• It should be clear and specific

• It should mention exact day, date, time when the person/documents to be presented

The person to whom it is addressed, should be ascertained Serving of Summon

Summon to be served to As per Section 62 – A summon to be served by a Police

person Officer/An Officer of Court/Other Public Servant if
practicable to be served personally.

Summon on Corporations As per Section 63 - A summon can be served on the

Secretary/Local Manager/ Other Principal Officer of the
Corporation.

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Summon if the concerned As per Section 65 - A summon can be served to the male adult
person is not found of the family if the concerned person is not found.

If no one is found at the home As per Section 65 if no one is found at home then affix the
or household duplicate copy of summon to conspicuous part of the home or
household where the summoned person ordinarily resides.

Summon in case of A summon shall ordinarily be sent to the Head of the office in
Government Employee which such person is employed.

WARRANT

A warrant is described as a legal document issued by a judge or magistrate, which empowers a

police officer to make an arrest, search or seize premises.

Essentials of Warrant:

(a) It should be in writing.

(b) It should bear the name of person who is to execute it.

(c) It contains the full name and description of the person to be arrested.

(d) It should state the offences charged.

(e) It must be signed by the presiding officer and sealed by the Court.

DIFFERENCE BETWEEN SUMMON AND WARRANT

BASIS SUMMON WARRANT

MEANING Summon implies a legal order, issued Warrant is an authorization

by the Court to a person to appear or issued by the court that
produce documents. permits the police officer to
arrest, search or seize.

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CONTENT Instruction to appear or produce a Authorization to police officer

document or thing before the court. to apprehend the accused and
produce him/her before the
court.

ADRESSED TO To the Party To The Police

SEARCH WARRANT

A search warrant may be issued by the court in the following cases:-

1. If a summon to produce a thing has been given to a person, but the court has reason
to believe that he will not produce the desired documents.
2. Where such documents or thing is not known to the court to be in possession of that
person.
3. Where a general inspection or search is necessary.

POWER OF POLICE


1. Preventive Action taken by Police:

If the police officer receives the information that a cognizable offence is designed to be
committed, he can communicate such information to his superior police officer. The police
officer may arrest the person without orders from Magistrate and without a warrant if the
commission of such offence cannot be otherwise prevented. The arrested person can be
detained in custody only for 24 hours unless his further detention is required.

2. Inspection of weights and measures

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1. Any officer in-charge of the police station may without a warrant enter any place within the
limits of such station for the purpose of inspecting or searching for any weights or measures or
instruments for weighing, if he has reason to believe that in such place any weights, measures
or instruments for weighing which are false are kept.

2. If he finds in such place any false weights, measures or instruments he may seize the same
and shall give information of such seizure to a Magistrate having jurisdiction.

3. Power to investigate in case of cognizable offence
In case of a cognizable offence the police
officer may conduct investigations without the order of a Magistrate.

4. Search by warrants

If the police officer has reason to believe that anything necessary for the purpose of an
investigation may be found. The officer must record in writing his reasons for making of a
search. But, the illegality of search will not affect the validity of the articles or subsequent trial.

MISCELLANEOUS


SUMMON CASES AND WARRANT CASES

Warrant Case

As per Section 2(x), "warrant-case" means a case relating to an offence punishable with death,
imprisonment for life or imprisonment for a term exceeding 2 years.

In simple words any case related to offence punishable with

• - Death

• - Imprisonment for Life

• - Imprisonment exceeding 2 years is termed as a Warrant Case.

Note:

(1) A warrant case cannot be withdrawn by petitioner subsequently.

(2) In warrant case a court order is issued to the police to produce the person before the
court.

PROCLAMATION AND ATTACHMENT

If a Court has reason to believe that any person against whom a warrant has been issued by it
has absconded or is concealing himself so that such warrant cannot be executed, the Court may
publish a written proclamation requiring him to appear at a specified place and at a specified
time not less than 30 days from the date of publishing such proclamation. (Section 82)

While issuing proclamation, the Magistrate must record to his satisfaction that the accused has

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absconded or is concealing himself. The object of attaching property is not to punish him but to
compel his appearance.

INFORMATION TO THE POLICE AND THEIR POWERS TO INVESTIGATE

INFORMATION IN COGNIZABLE CASES INFORMATION IN NON- COGNIZABLE

CASES
Every information relating to the
commission of a cognizable offence, if given When information is given to an officer in-
orally to an officer in charge of a police charge of a police station of the commission
station, shall be reduced to writing by him. within the limits of such station of a non-
cognizable offence, he shall enter or cause to
Every such information shall be signed by be entered the substance of the information
the person giving it and the substance in a book to be kept by such officer in such
thereof shall be entered in a book kept by form as the State Government may prescribe
such officer in such form as may be in this behalf and refer the informant to the
prescribed by the State Government in this Magistrate.
behalf. The above information given to a
police officer and reduced to writing is The police officer is not authorised to
known as First Information Report (FIR). investigate a non-cognizable case without the
order of Magistrate.
In case of a cognizable offence the police
officer may conduct investigations without Where a case relates to two or more offences
the order of a Magistrate. of which at least one is cognizable, the case
shall be deemed to be a cognizable case,
Any person aggrieved by a refusal on the notwithstanding that the other offences are
part of an officer in charge of a police station non- cognizable.
to record the information may send the
substance of such information in writing to
the Superintendent of Police concerned who
if satisfied that such information discloses
the commission of a cognizable offence shall
either investigate the case himself or direct
an investigation to be made by any police
officer subordinate to him.

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SUMMARY TRIALS

Summary trial means the "speedy disposal" of cases.

Summary cases apply to such offences not punishable with death, imprisonment for life or
imprisonment for a term exceeding two years;

Summary trial can be only conducted by:-

(a) Any Chief Judicial Magistrate;

(b) Any Metropolitan Magistrate;

(c) Any Magistrate of the First class who is specially empowered in this behalf by the High
Court,

Section 262 states that no sentence of imprisonment for a term exceeding 3 months shall be
passed in any conviction in summary trials.

Summary trials can be conducted only in respect of those offences in which the value of
property does not exceed RS 200.

SECURITY FOR KEEPING THE PEACE AND FOR GOOD BEHAVIOUR

The provisions of Chapter VIII are aimed at persons who are a danger to the public by reason
of the commission of certain offences by them. The object of this chapter is prevention of crimes
and disturbances of public tranquillity and breach of the peace.

Security for keeping the peace on conviction

When a Court of Session or Court of a Magistrate of first class convicts a person of any of the
offences specified in sub-section (2) or of abetting any such offence and is of opinion that it is

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necessary to take security from such person for keeping the peace, the Court may, at the time of
passing sentence on such person, order him to execute a bond, with or without sureties, for
keeping the peace for such period, not exceeding three years, as it thinks fit.

The offences specified under sub-section (2) are as follows:

1) Any offence punishable under Chapter VIII of the India Penal Code I860.
2) Any offence which consists of or includes, assault or using criminal force or committing
mischief;
3) Any offence of criminal intimidation;
4) Any other offence which caused, or was intended or known to be likely to cause a
breach of the peace.

SECURITY FOR KEEPING THE PEACE IN OTHER CASES

When an Executive Magistrate receives information that any person is likely to:

• Commit a breach of peace; or

• Disturb the public tranquility; or

Does any wrongful act that may probably occasion a breach of the peace; or disturb the public
tranquility 
he may require such person to show cause why he should not be ordered to
execute a bond for keeping the peace for a period not exceeding one year as the Magistrate
deem fit. (Section 107)


MAINTENANCE OF PUBLIC ORDER AND TRANQUILLITY

UNLAWFUL ASSEMBLIES


Dispersal of assembly by use of civil force

Any Executive Magistrate or office in-charge of a police station or, in the absence of such officer
in-charge, any other officer not below the rank of sub-inspector may command any unlawful
assembly or any assembly of five or more persons likely to cause a disturbance of the public
peace, to disperse and it shall be thereupon the duty of the members of such assembly to
disperse accordingly. 


Use of armed forces to disperse assembly

If any such assembly cannot be otherwise dispersed, and if it is necessary for the public security
that it should be dispersed, the Executive Magistrate of the highest rank who is present may
cause it to be dispersed by the armed forces and to arrest and confine such persons in order to
disperse the assembly or to have them punished.

PUBLIC NUISANCES 


Section 133 lays down the following public nuisances, which can be proceeded against:

a) The unlawful obstruction or nuisance should be removed from any public place or from

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any way, river or channel which is or may be lawfully used by the public; or
b) Carrying on any trade or occupation, or keeping of any goods or merchandise, injurious
to the health of the community; or
c) The construction of any building or the disposal of any substance, as is likely to cause
conflagration or explosion; etc.
d) The building, tent or structure near a public place.
e) The dangerous animal requiring destroying, confining or disposal

PREVENTIVE ACTION OF THE POLICE AND THEIR POWERS TO INVESTIGATE

Section 149 authorises a police officer to prevent the commission of any cognizable offence. If
the police officer receives the information of a desire to commit such an offence, he can
communicate such information to his superior police officer and to any other officer whose
duty it is to prevent or take cognizance of the commission of any such offence.

The police officer may arrest the person without orders from Magistrate and without a warrant
if the commission of such offence cannot be otherwise prevented. The arrested person can be
detained in custody only for 24 hours unless his further detention is required under any other
provisions of this Code or of any other law. (Sections 150 and 151) Section 152 authorises a
police officer to prevent injury to public property.

LIMITATION FOR TAKING COGNIZANCE OF CERTAIN OFFENCES

In general, there is no limitation of time in filling complaints under the Code. But delay may
hurdle the investigation. Further, the Indian Limitation Act provides the period of limitation
for appeal and revision applications. Therefore, chapter XXXVI has been introduced in the
Code prescribing limitation period for taking cognizance of certain offences. (Sections 467 to
473) Except as otherwise specifically provided in the Code, no Court shall take cognizance of an
offence after the expiry of the period of limitation mentioned below:

a) Six months, if the offence is punishable with fine only.

b) One year, if the offence is punishable with imprisonment for a term not exceeding one
year;
c) Three years, if the offence is punishable with imprisonment for a term exceeding one
year but not exceeding three years.

ADV CHIRAG CHOTRANI

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11 INDIAN EVIDENCE ACT, 1872

INTRODUCTION

Evidences are important part of the legal system.

Indian Evidence Act, 1872 contains the general rules of evidence, which are applicable both in
civil as well as in criminal matters

Indian Evidence Act is applicable in whole of India except the state of Jammu & Kashmir. Section
3 of the Act recognizes the two categories of evidence i.e., oral evidence and documentary
(written) evidence.

Oral evidence means and includes all statements which the Court permits or required to be made
before it by witnesses, in relation to matters of fact under enquiry.

Documentary evidence means and includes all documents produced for the inspection of the
Court.

Affidavit: It is the written statement given by a person on oath. It mentions an allegation or fact.
An affidavit can be treated as evidence only if the party so desired. In civil laws affidavits are
normally accepted as evidences.

Fact: A fact is defined u/s. 3 it means and includes:

• State of things.

• The relation of things with each other.

• Mental condition of a person.

Relevant facts are those which help in proving the fact in issue. E.g. A murders B. In this case
following are the fact in issue:

• Was he murdered?

• Did A murdered B?

For the purpose of evidence, facts are divided into the following two categories:

• Fact in Issue: The facts which are constituent of a litigated right, liability, or disability are
called facts in issue.

• Relevant Fact: In order to prove the existence or non-existence of facts in issue, certain other
interconnected fact may be given in evidence. They are called relevant facts.

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SEC. 3- LEGAL RELEVANCY VS. LOGICAL RELEVANCY OF FACT

Every fact must be legally relevant mere logical relevancy is not enough. Relevancy must be such
as can be legally proved. In a fact is logically relevant it does not mean that it is legally relevant
also.
Normally a legally relevant fact is logical fact. So, a legal relevancy is a under term than a logical
relevancy.

Legal Relevancy and Admissibility of Fact

• Every fact, if it is legally relevant may or may not be admissible. Every fact must be
admissible only after that it can be accepted as an evidence.

• Every fact in issue may not be issue of fact while every issue of fact itself is fact in issue.
Fact in issue is the subject matter of case. Further, issues of fact is a language used in C.P.C.
while fact in issue is a language used in an Indian Evidence Act.

RELEVANT FACT

Relevant facts are those mentioned under section 6 to section 55 these are as follows:

- Sec. 6 to sec. 16: these are facts connected with the facts to be proved.

- Sec. 17 to sec.31: these are confession and admission.

- Sec. 32, 33: person who cannot be called as evidences, (dying declarations)

- Sec. 34 to sec.38: statement made under special circumstances.

- Sec.39: part of the statement to be proved.

- Sec. 40 to sec.44: judgement of court relevant for case.

- Sec. 45 to sec.51: 3rd party opinions.

- Sec. 52 to sec.55: characters of parties and accused in cases.

Relevancy of Facts Forming Part of the same Transaction [Section 6]

Section 6 lays down the requirement that the inter-connection between facts in issue and other
connected facts must be such that they form part of the same transaction. A transaction may be
defined as a group of facts so connected together so as to referred to by a single legal name as a
crime or a contract or a wrong or any other subject of enquiry which may be in issue.

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➢ Case Law- Rattan v Queen
In Rattan v Queen, a man was prosecuted for murder of his wife. His defence was that the
bullet went off accidentally. There was evidence to the extent that the deceased, before her
death, telephoned to telephone operator and said “get the police please”. Before the
operator could have connected the call to the police, the lady had given the address and
the call suddenly ended. Thereafter the police, the lady had given the address and the call
suddenly ended. Thereafter the police came to the house and found the dead body of the
lady. Her call and the words she had spoken to the telephone operator were held to be
relevant as the part of the same transaction.

SEC. 6. FACTS CONNECTED WITH THE FACT IN ISSUE (RES GESTE). MEANING OF RES
GESTAE

The term Res Gestae means surrounding or accompanying circumstances which are inseparable
from the fact in issue and are necessary to explain the nature of the main act.

They include acts or declaration accompanying or explaining the transaction or fact in issue. The
area of events covered by Res Gestae depends upon circumstances of each case.

There are the facts which are connected with the fact in issue.
E.g. A stabbed B and B died. After which B said something to C. Whatever was said by B to C is
Res Gestae.

E.g. During an aggression, certain students burnt a bus. Burning of bus is a relevant factor. So,
Res Gestae is a relevant fact as it is connected with the fact in issue which is required to be proved.

SECTION 8- MOTIVE, PREPARATION AND CONDUCT

Every crime can be divided into the following three stages i.e., Motive, Preparation and Conduct.

• Motive: It is the moving power which impels one to do an act. It is the inducement for
doing an act. Motive by itself is no crime. But once a crime has been committed, the
evidence of motive becomes important.

➢ Case Law- Tara Devi v State of U.P

In Tara Devi v State of U.P., it was held that motive of a woman to get rid of her husband
was not enough to convict particularly when her paramour was acquitted.

• Preparation: Preparation means the means and measures necessary for the commission of
any offence.

• Conduct: Conduct means attempt to commit the crime and actual commission of the crime.

• Previous Conduct of Parties

Behaviour of parties before committing an offence is a relevant fact.

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E.g. A demanded extortion money from B and B refused to pay after which B was killed by A. In
this demanding of money is a previous conduct of parties and it is relevant fact.

Subsequent Conduct of Parties It is also a relevant in proving a fact in issue.

E.g. A committed a bank robbery after which he spends money luxuriously in the market.
Spending of money is the subsequent conduct of parties.

Facts Establishing the Identity of a Person are also Relevant If a fact establishes the identity of a
person then it is also relevant. Any fact establishing the relation of two person is also relevant.

SECTION 11- INCONSISTENT FACT

Section 11 provides that the fact which ordinarily have nothing to do with the fact of the case,
become relevant because of the reasons that they are inconsistent with the fact in issue.

Question: CS: Satyan is facing Trial for the charge of committing murder of Raja at Pune at 5.00
P.M. on 5lh November 1999. Satyan wants to prove that he had a telephonic conversation with
Nalin form Delhi on, 5th November, 1999 at about 3.3. P.M. will he be permitted to do so?

Answer: Yes. According to Section 11 of the Indian Evidence Act, 1872, even facts not normally
relevant to the fact in question become relevant in certain situations. When the facts indicate
something opposing, what is indicated by the fact in issue, then they need to clarify the
probability or otherwise of the fact in issue, either singly or in conjunction with other facts. In
this case, Satyan is under trial for the murder of Raja of Pune. Satyam wants to prove that on the
on the same date, although not at the same time, he had a telephonic conversation with Nalin
from Delhi. Under the above-mentioned Section, he is permitted to do so.

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STATEMENT ABOUT THE FACTS TO BE PROVED E.G. ADMISSION, CONFESSION
(SECT1ONS 17 TO 31)

SECTION 17- ADMISSIONS <

Admission is a statement given by a person admitting a fact which suggests as to the existence
of his liability. An admission is the best evidence against the person making it. It is based on the
principle that what a party himself admits to be true may be reasonably presumed to be true so
that until the presumption is rebutted the fact admitted must be taken to be true.
E.g. A undertakes to collect rent for B. B sues A for not collecting rent due from C to B. A denies
that rent was due from C to B. a statement by C that he owed rent to B is an admission and is a
relevant fact as against A, if A denies that C did owes rent to B.

CONFESSION

The word confession is not defined in the Indian Evidence Act. 1872. Hence, the definition of
admission given in sec 17 is also applicable to confession. Thus, confession is a statement given
by an accused admitting his guilt. If confession is made to court, it is called judicial confession
and if the confession is made to any person outside the court it is called Extra Judicial Confession.

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SECTION 24- IMPORTANT PROVISIONS RELATING TO CONFESSION

Confession must be free and on voluntary basis

SECTION 25 CONFESSION MUST NOT BE CAUSED BY INDUCEMENT, THREAT OR

PROMISE.

Confession made to police officer will be irrelevant and inadmissible

SECTION 26

Confession made to a police officer in the immediate presence of magistrate is admissible.

SECTION 27

A statement in the form of confession to a police officer will be admissible provided that the
statement leads to the discovery of a fact connected with a crime.

E.g. A confesses to police that he has murdered B with a revolver and that the revolver is with C.
the police recovered the revolver from C. Thus, in such a case sec 27 will be applicable.

SECTION 30

When a statement in the form of a confession is given by co-accused then such statement may be
used against another co-accused,

e.g., A and B together murdered C. There is allegation on them and B confesses before a judge
that he has murdered C along with A. This is a statement by co-accused and thus can be used
against another co-accused i.e. A.

DIAGRAMATIC REPRESENTATION OF DIFFERENCE B/W ADMISSION AND

CONFESSION

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STATEMENTS BY PERSONS WHO CANNOT BE CALLED AS WITNESSES

Certain statements made by persons who are dead or cannot be found or produced without
unreasonable delay or expense, makes the second exception to the general rule. However, the
following conditions must be fulfilled for the relevancy of the statements:

a. That the statement must relate to a fact in issue or relevant fact (b) That the statement must
fall under any of following categories:

• the statement is made by a person as to the cause of this death or as to any of the
circumstances resulting in his death;

• statement made in the course of business;

• Statement which is against the interest of the maker

• a statement giving the opinion as to the public right or custom or matters of general
interest;

• a statement made before the commencement of the controversy as to the relationship

of persons, alive or dead, if the maker of the statement has special means of
knowledge on the subject;

• a statement made before the commencement of the controversy as to the relationship

of persons deceased, made in any will or deed relating to family affairs to which any
such deceased person belongs;

• a statement in any will, deed or other document relating to any transaction by which
a right or custom was created, claimed, modified, etc.;

• a statement made by a number of persons expressing their feelings or impression;

STATEMENTS MADE UNDER SPECIAL CIRCUMSTANCES

The following statements become relevant on account of their having been made under special
circumstances:

• Entries made in books of account, including those maintained in an electronic form

regularly kept in the course of business. Such entries, though relevant, cannot, alone, be
sufficient to charge a person with liability; (Section 34)

• Entries made in public or official records or an electronic record made by a public servant
in the discharge of his official duties, or by any other person in performance of a duty
specially enjoined by the law; (Section 35)

• Statements made in published maps or charts generally offered for the public sale, or in
maps or plans made under the authority of the Central Government or any State
government; (Section 36)

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• Statement as to fact of public nature contained in certain Acts or notification; (Section 37)

• Statement as to any foreign law contained in books purporting to be printed or published

by the Government of the foreign country, or in reports of decisions of that country.
(Section 38)

OPINION OF THIRD PERSONS WHEN RELEVANT

The general rule is that opinion of a witness on a question whether of fact or law, is irrelevant.
However, there are some exceptions to this general rule. These are: -

a. Opinions of experts- when the court has to form an opinion upon a point of foreign law or
of science or art, or as to identify handwriting or finger impression, the opinions upon that
point of persons especially skilled in such are relevant.

b. Opinion as to the handwriting of a person if the person giving the opinion is acquainted
with the handwriting of the person in question;

c. Opinion as to the digital signature of any person, the opinion of the Certifying Authority
which has issued the Digital Signature Certificate;

d. When it is the ques. Of relationship between two persons the opinion of someone who
knows the facts about it would be relevant

HEARSAY EVIDENCE

Section 59 of the Indian Evidence Act provides that except the contents of document, all other
facts must be proved by oral evidence.

Section 60 further provides that oral evidence must be direct and it should not be indirect or
hearsay. Thus, it can be stated that in all cases, the evidence has to be that of a person who himself
witnessed the happening of a fact. Such a witness is called “eye witness”.

Therefore, it is normally said, “hearsay evidence is no evidence.” However, there are certain
exceptions to the aforesaid rule that hearsay evidence is no evidence. They are as under: -

1. RES GESTAE- as per this provision, statement of person may be proved through another
person who appears as a witness, if the statement is a part of a transaction in issue.

2. ADMISSION AND CONFESSION

3. DYING DECLARATION - As per section 32, statements are proved through testimony of
the witness to whom such statement has been made. But where a person making a
declaration survives, then the statement made by him can’t be used as dying declaration.

The evidence given by witness in a judicial proceeding can be used as evidence in subsequent
proceedings.
,

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SECTION 115- ESTOPPEL

When one person has by his declaration act or caused an admission or permitted another person
to believe a thing to be true to act upon such belief neither he nor his representative shall be
allowed in any suit or proceedings between himself and such person or his representative to
deny the truth of that thing.

e.g. A intentionally and falsely led B to believe that certain land belongs to him and thereby
induces B to buy and pay for it. The land afterwards becomes the property of A and A set aside
the sale on the ground that at the time of sale he had no title he must not be allowed to prove his
want of title the fact constituting the estoppels will be relevant and admissible.

DIFFERENT KINDS OF ESTOPPEL

• Estoppel by attestation

• Estoppel by contract

• Estoppel by election

• Constructive Estoppel

• Equitable Estoppel

• Estoppel by negligence

• Estoppel by silence

CASE LAWS

S.NO. CASE NAME PROVISIONS

The doctrine of estoppel is based on the principle that it would

be most inequitable and unjust that if one person, by a
representation made, or by conduct amounting to a
Sorat Chunder v. representation, has induced another to act as he would not
1
Gopal Chunder otherwise have done, the person who made the representation
should not be allowed to deny or repudiate the effect of his
former statement to the loss and injury of the person who acted
on it

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The rule of estoppel does not apply where the statement is made
to a person who knows the real facts represented and is not
accordingly misled by it. The principle is that in such a case the
Mohori Bibee v. conduct of the person seeking to invoke rule of estoppel is in no
2
Dharmodas Ghosh sense the effect of the representation made to him. The main
determining element is not the effect of his representation or
conduct as having induced another to act on the faith of such
representation or conduct.

Biju Patnaik
One private university permitted to conduct special examination
3
of students prosecuting studies under one-time approval policy.
After

inspection, 67 students were permitted to appear in the

examination and their results declared. However, university
declined to issue degree certificates to the students on the
University of Tech.
ground that they had to appear for further examination for
4 Orissa v. Sairam
another condensed course as per syllabus of university. It was
College
held that once students appeared in an examination and their
results declared, the university is estopped from taking decision
withholding degree certificate after declaration of results.

FACTS OF WHICH EVIDENCE CANNOT BE GIVEN

There are some facts of which evidence cannot be given though they are relevant facts. They are
classified as privileged communications. The privileges are enumerated below: -

1. Privileges of judges and magistrate

No judge or magistrate shall except upon the special order of some court to which he is
subordinate be compelled to answer any question as to his own conduct in court as judge
or magistrate

2. Communication during marriage

Section 122 prevents communication between husband and wife from being disclosed.
Thus, a wife or husband can’t be permitted to disclose what her husband or his wife
respectively has stated with regards to the matters in issue, such communication remains
protected after the divorce. However, communication made before the marriage or after
the divorce are not protected.

3. Official communication

No public officer shall be compelled to disclose communications made to him in official

confidence when he considers that public interest would suffer from such disclosures.

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4. Professional communication

Communications made by a client to his advocate for the purpose of his professional work
are not permitted to be disclosed.

5. As to affairs of state

No one shall be permitted to give any evidence derived from unpublished official records
relating to any affairs of state. Except with the permission of the officer who is the head of
the department concerned.

WHO CAN BE A WITNESS?

Every person is a competent witness I he/she-

a. Understand the questions posed to him.

b. Can give logical and rational answer to those questions.

EVIDENCE IN RESPECT OF CERTAIN DOCUMENTS

As per Section 93 of the Indian Evidence Act, 1872 when the language used in the document is,
on its face, defective or ambiguous, evidence may not be given of facts which would show its
meaning or supply its defects.

For ex. Amar agrees in writing to sell a horse to Bijoy for Rs. 2,000 or Rs. 3,000. Evidence cannot
be given to show which price was to be given?

SEC. 97 provides that where language of a document applies partly to one sets of facts or partly
to another sets of facts, but doesn’t apply accurately to either sets of facts, then evidence can be
given to show to which fact the document intended to apply

For ex. A agree to sell to my land at Delhi in possession of y. A has land at Delhi but not in the
possession of y, and he has land in possession of y but it is situated at Mumbai. Evidence may be
given of facts showing which land he meant to sell.

PROVISIONS OF EVIDENCE RELATING TO ELECTRONIC RECORDS

,,

Section 65A of the Indian Evidence Act, 1872 provides that the contents of electronic records may
be proved in accordance with the provisions of Section 65B

UNDER Section 65B any information contained an electronic record which is printed on paper,
stored, recorded or copied in optical or magnetic media produced by computer shall be deemed
to be a document

For ex. Babloo borrowed Rs. 5,000 from Shambhu, which was recorded on a printed paper and
stored in computer as the computer output. After some time, Shambhu demanded money from
Babloo, which the latter refused to pay. Shambhu filed a suit for recovery of money from Babloo

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on the basis of computer records. The Court will treat it as sufficient proof for granting relief of
Shambhu against Babloo.

ORAL, DOCUMENTARY AND CIRCUMSTANTIAL EVIDENCE

As discussed above, all facts (except two Sections 56 and 58) which are neither admitted nor are
subject to judicial notice must be proved. The Act divides the subject of proof into two parts: (i)
proof of facts other than the contents of documents; (ii) proof of documents including proof of
execution of documents and proof of existence, condition and contents of documents.

However, all facts except contents of documents or electronic records may be proved by oral
evidence (Section 59) which must in all cases be “direct” (Section 60). The direct evidence means
the evidence of the person who perceived the fact to which he deposes.

Thus, the two broad rules regarding oral evidence are:

i. all facts except the contents of documents may be proved by oral evidence;

ii. oral evidence must in all cases be “direct”.

Oral evidence means statements which the Court permits or requires to be made before it by
witnesses in relation to matters of fact under inquiry. But if a witness is unable to speak, he may
give his evidence in any manner in which he can make it intelligible as by writing or by signs.
(Section 119)

DIRECT EVIDENCE

In Section 60 of the Evidence Act, expression "oral evidence" has an altogether different meaning.
It is used in the sense of "original evidence" as distinguished from "hearsay" evidence and it is
not used in contradiction to "circumstantial" or "presumptive evidence". According to Section 60
oral evidence must in all cases whatever, be direct; that is to say:

- if it refers to a fact which could be seen, it must be the evidence of a witness who says he
saw it;

- if it refers to a fact which could be heard, it must be the evidence of a witness who says he
heard it;

- if it refers to a fact which could be perceived by any other sense or in any other manner, it
must be the evidence of a witness who says he perceived it by that sense or in that manner;
The evidence of a witness who says he perceived it by that sense or in that manner;

- if it refers to an opinion or to the grounds on which that opinion is held, it must be the
evidence of the person who holds that opinion on those grounds.

Thus, if the fact to be proved is one that could be seen, the person who saw the fact must appear
in the Court to depose it, and if the fact to be proved is one that could be heard, the person who
heard it must appear in the Court to depose before it and so on. In defining the direct evidence
in Section 60, the Act impliedly enacts what is called the rule against hearsay. Since the evidence

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as to a fact which could be seen, by a person who did not see it, is not direct but hearsay and so
is the evidence as to a statement, by a person who did hear it.

DOCUMENTARY EVIDENCE

A "document" means any matter expressed or described upon any substance by means of letters,
figures or marks, or by more than one of those means, intended to be used, or which may be used
for the purpose of recording that matter. Documents produced for the inspection of the Court is
called Documentary Evidence. Section 60 provides that the contents of a document must be
proved either by primary or by secondary evidence.

Primary evidence

Secondary evidence

PRIMARY EVIDENCE

"Primary evidence" means the document itself produced for the inspection of the Court (Section
62). The rule that the best evidence must be given of which the nature of the case permits has
often been regarded as expressing the great fundamental principles upon which the law of
evidence depends. The general rule requiring primary evidence of producing documents is
commonly said to be based on the best evidence principle and to be supported by the so-called
presumption that if inferior evidence is produced where better might be given, the latter would
tell against the withholder.

SECONDARY EVIDENCE

Secondary evidence is generally in the form of compared copies, certified copies or copies made
by such mechanical processes as in themselves ensure accuracy. Section 63 defines the kind of
secondary evidence permitted by the Act. According to Section 63, "secondary evidence" means
and includes.

1. certified copies given under the provisions hereafter contained;

2. copies made from the original by mechanical processes which in themselves ensure the
accuracy of the copy, and copies compared with such copies;

3. copies made from or compared with the original;

4. counterparts of documents as against the parties who did not execute them;

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5. oral accounts of the contents of a document given by some person who has himself seen it.

Illustrations

a. A photograph of an original is secondary evidence of its contents, though the two have not
been compared, if it is proved that the thing photographed was the original.

b. A copy compared with a copy of a letter made by a copying machine is secondary evidence
of the contents of the letter if it is shown that the copy made by the copying machine was
made from the original.

Section 65 stipulates the cases in which secondary evidence relating to documents may be given.
As already stated, documents must be proved by primary evidence but in certain cases for
example, where the document is lost or destroyed or the original is of such a nature as not to be
easily, movable, or consists of numerous documents, or is a public document or under some law
by a certified copy, the existence, condition or contents of the document may be proved by
secondary evidence.

CIRCUMSTANTIAL EVIDENCE

In English law the expression direct evidence is used to signify evidence relating to the ‘fact in
issue' (factum probandum) whereas the terms circumstantial evidence, presumptive evidence
and indirect evidence are used to signify evidence which relates only to "relevant fact" (facta
probandum). However, under Section 60 of the Evidence Act, the expression "direct evidence"
has altogether a different meaning and it is not intended to exclude circumstantial evidence of
things which could be seen, heard or felt. Thus, evidence whether direct or circumstantial under
English law is "direct" evidence under Section 60. Before acting on circumstances put forward
are satisfactorily proved and whether the proved circumstances are sufficient to bring the guilt
to the accused the Court should not view in isolation the circumstantial evidence but it must take
an overall view of the matter.

PRESUMPTIONS

The Act recognizes some rules as to presumptions. Rules of presumption are deduced from
enlightened human knowledge and experience and are drawn from the connection, relation and
coincidence of facts and circumstances. A presumption is not in itself an evidence but only makes
a prima facie case for the party in whose favour it exists. A presumption is a rule of law that
courts or juries shall or may draw a particular inference from a particular fact or from particular
evidence unless and until the truth of such inference is disproved. There are three categories of
presumptions:

• presumptions of law, which is a rule of law that a particular inference shall be drawn by a
court from particular circumstances.

• presumptions of fact, it is a rule of law that a fact otherwise doubtful may be inferred from
a fact which is proved.

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• mixed presumptions, they consider mainly certain inferences between the presumptions of
law and presumptions of fact.

The terms presumption of law and presumption of fact are not defined by the Act. Section 4 only
refers to the terms "conclusive proof", "shall presume" and "may presume". The term "conclusive
proof" specifies those presumptions which in English Law are called irrebuttable presumptions
of law; the term "shall presume" indicates rebuttable presumptions of law; the term "may
presume" indicates presumptions of fact. When we see a man knocked down by a speeding car
and a few yards away, there is a car going, there is a presumption of fact that the car has knocked
down the man.

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JIGL SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONSSAL12.1
COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONS
SPECIAL COURTS,
SPECIAL TRIBUNAL
COURTS, UNDER
TRIBUNAL COMPANIES
UNDER ACT AND
COMPANIES ACT OTHER
AND OTHER
12 LEGISLATIONS
LEGISLATIONS

INTRODUCTION

The term ‘Tribunal' is derived from the word ‘Tribunes', which means ‘Magistrates of the
Classical Roman Republic'. ‘Tribunal' is an administrative body established for the purpose of
discharging quasi-judicial duties. An Administrative Tribunal is neither a Court nor an
executive body. It stands somewhere midway between a Court and an administrative body.
The exigencies of the situation proclaiming the enforcement of new rights in the wake of
escalating State activities and furtherance of the demands of justice have led to the
establishment of Tribunals.

The difference between a Court and a Tribunal is the manner of deciding a dispute.

To overcome the situation that arose due to the pendency of cases in various Courts, domestic
tribunals and other Tribunals have been established under different Statutes, hereinafter
referred to as the Tribunals. A ‘tribunal' in the legal perspective is different from a domestic
tribunal. The ‘domestic tribunal' refers to the administrative agencies designed to regulate the
professional conduct and to enforce disciple among the members by exercising investigatory
and adjudicatory powers. Whereas, Tribunals are the quasi-judicial bodies established to
adjudicate disputes related to specified matters which exercise the jurisdiction according to the
Statute establishing them. The Tribunal has to exercise its powers in a judicious manner by
observing the principles of natural justice or in accordance with the statutory provisions under
which the Tribunal is established. There may be a lis between the contending parties before a
statutory authority, which has to act judiciously to determine the same. There may not be a lis
between the contending parties, the tribunal/authority may have to determine the rights and
liabilities of the subject. In both the situations, it will be known as a quasi-judicial function. The
word ‘quasi' means ‘not exactly'. (Law Commission of India Report 272)

NCLT AND NCLAT

The Ministry of Corporate Affairs has issued notification for constitution of the National
Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT)
with effect from today i.e. 1st June, 2016. Company Law Board (CLB) stands dissolved w.e.f. 1st
June, 2016.

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COURTS, TRIBUNAL
Benches of NCLT UNDER COMPANIES ACT AND OTHER LEGISLATIONS
SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER
LEGISLATIONS
NCLT can be considered as biggest Tribunal till date. Because NCLT will CONSOLIDATE the
corporate jurisdiction of the followings:

• Company Law Board/ BIFR/AAIFR

• Jurisdiction and powers relating to winding up restructuring and other such provisions,
vested in the High courts

Advantages of NCLT & NCLAT

• It shall avoid multiplicity of litigation before various Forums (High Courts, CLB, BIFR.
AAIFR).

• There shall be at least 11 benches of the NCLT, thereby providing justice almost at one’s
doorstep.

• This tribunal shall comprise of technical experts who will provide more concrete and
precise decision.

• There will be mixture of judicial and equitable jurisdiction while deciding matters.

• There shall be reduction in period of winding up from 20-25 years to 2 years.

SOME MAJOR CHANGES AFTER CONSTITUTION OF NCLT/NCLAT

Winding up

The National Company Law Tribunal has also been empowered to pass an order for winding
up of a company. Therefore Practicing Company Secretaries may represent the winding up case
before the Tribunal.

Compromise and Arrangement

With the establishment of NCLT, a whole new area of practice will open up for Company
Secretary in Practice with respect to advising and assisting corporate sector on merger,
amalgamation, demerger, reverse merger, compromise and other arrangements right from the
conceptual to implementation level. Company Secretaries in practice will be able to render
services in preparing schemes, appearing before NCLT/NCLAT for approval of schemes and
post-merger formalities

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COURTS, TRIBUNAL
CONSTITUTION UNDERSECTION
OF (NCLT) COMPANIES 408 ACT AND OTHER LEGISLATIONS
SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER
LEGISLATIONS
The Central Government shall, by notification, constitute, with effect from (1 JUNE 2016) a
Tribunal to be known as the National Company Law Tribunal consisting of a President and
such number of Judicial and Technical members, as the Central Government may deem
necessary, to be appointed by it by notification, to exercise and discharge such powers and
functions as are, or may be, conferred on it by or under this Act or any other law for the time
being in force.

SECTION 410- CONSTITUTION OF APPELLATE TRIBUNAL

The Central Government shall, by notification, constitute, with effect from such date (1 JUNE
2016) an Appellate Tribunal to be known as the National Company Law Appellate Tribunal
consisting of a chairperson and such number of Judicial and Technical Members, not exceeding
eleven, as the Central Government may deem fit, to be appointed by it by notification, for
hearing appeals against the orders of the Tribunal.

Qualification: (Chairman/Member of NCLAT) SECTION 411

National Company Law Appellate Tribunal, constituting of a Chairperson and not exceeding
eleven members for hearing appeals against the orders of the Tribunal.

S.No. Chairman Judicial Member Technical Member

Is/has been Judge Is/has been Judge of High Person with proven ability, integrity
1
of Supreme Court Court and standing having special
knowledge and experience > 25
years in industrial finance,
industrial management, industrial
Is/has been Chief
Is a Judicial Member of reconstruction, investment and
2 Justice of High
Tribunal for at least 5 years accountancy
Court

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COURTS,
SECTIONTRIBUNAL UNDER
413- TERM COMPANIES
OF OFFICE ACT AND OTHER
OF PRESIDENT, LEGISLATIONS
CHAIRPERSON AND OTHER
SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER
MEMBERS
LEGISLATIONS
Term of President and other Members of NCLT

The President and every other Member of the Tribunal shall hold office as such for a term of
five years AND shall be eligible for re- appointment for another term of five years.

Time of vacation of office

a. In the case of the President, the age of sixty-seven years

b. In the case of any other Member, the age of sixty-five years

Provided that a person who has not completed fifty years of age shall not be eligible for
appointment as Member:

Term of Chairperson and other members NCLAT

The chairperson or a Member of the Appellate Tribunal shall hold office as such for a term of
five years AND shall be eligible for re- appointment for another term of five years.

Time of vacation of office

a. In the case of the Chairperson, the age of seventy years;

b. In the case of any other Member, the age of sixty-seven years

Provided that a person who has not completed fifty years of age shall not be eligible for
appointment as Member.

SECTION 419- BENCHES OF TRIBUNAL

1. There shall be constituted such number of Benches of the Tribunal, as may, by notification,
be specified by the Central Government.

2. The Principal Bench of the Tribunal shall be at New Delhi which shall be presided over by
the President of the Tribunal.

3. The powers of the Tribunal shall be exercisable by Benches consisting of two Members out
of whom one shall be a Judicial Member and the other shall be a Technical Member.

4. The Central Government shall, by notification, establish such number of benches of the
Tribunal, as it may consider necessary, to exercise the jurisdiction, powers and authority of
the Adjudicating Authority conferred on such Tribunal by or under Part II of the Insolvency
and Bankruptcy Code, 2016.

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COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONS
SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER
LEGISLATIONS
SECTION 420- ORDERS OF TRIBUNAL

1. The Tribunal may, after giving the parties to any proceeding before it, a reasonable
opportunity of being heard, pass such orders thereon as it thinks fit.

2. The Tribunal may, at any time within two years from the date of the order, with a view to
rectifying any mistake apparent from the record, amend any order passed by it, and shall
make such amendment, if the mistake is brought to its notice by the parties

Provided that no such amendment shall be made in respect of any order against which an
appeal has been preferred under this Act.

3. The Tribunal shall send a copy of every order passed under this section to all the parties
concerned.

SECTION 421- APPEAL FROM ORDERS OF TRIBUNAL

1. Any person aggrieved by an order of the Tribunal may prefer an appeal to the Appellate
Tribunal.

2. No appeal shall lie to the Appellate Tribunal from an order made by the Tribunal with the
consent of parties.

3. Every appeal under sub-section (1) shall be filed within a period of forty-five days from the
date on which a copy of the order of the Tribunal is made available to the person aggrieved
and shall be in such form, and accompanied by such fees, as may be prescribed:

Provided that the Appellate Tribunal may entertain an appeal after the expiry of the said
period of forty-five days from the date aforesaid, but within a further period not exceeding
forty-five days, if it is satisfied that the appellant was prevented by sufficient cause from
filing the appeal within that period.

4. On the receipt of an appeal under sub-section (1), the Appellate Tribunal shall, after giving
the parties to the appeal a reasonable opportunity of being heard, pass such orders thereon
as it thinks fit, confirming, modifying or setting aside the order appealed against.

5. The Appellate Tribunal shall send a copy of every order made by it to the Tribunal and the
parties to appeal.

SECTION 422- EXPEDITIOUS DISPOSAL BY TRIBUNAL AND APPELLATE TRIBUNAL

1. Every application or petition presented before the Tribunal and every appeal filed before
the Appellate Tribunal shall be dealt with and disposed of by it as expeditiously as possible
and every endeavor shall be made by the Tribunal or the Appellate Tribunal, as the case
may be, for the disposal of such application or petition or appeal within three months from
the date of its presentation before the Tribunal or the filing of the appeal before the
Appellate Tribunal.

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COURTS,
2. WhereTRIBUNAL UNDER
any application COMPANIES
or petition ACT
or appeal is AND OTHER
not disposed LEGISLATIONS
of within the period specified in
SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER
sub-section (1), the Tribunal or, as the case may be, the Appellate Tribunal, shall record the
LEGISLATIONS
reasons for not disposing of the application or petition or the appeal, as the case may be,
within the period so specified; and the President or the Chairperson, as the case may be,
may, after taking into account the reasons so recorded, extend the period referred to in sub-
section (1) by such period not exceeding ninety days as he may consider necessary.

SECTION 423- APPEAL TO SUPREME COURT

Any person aggrieved by any order of the Appellate Tribunal may file an appeal to the
Supreme Court within sixty days from the date of receipt of the order of the Appellate Tribunal
to him on any question of law arising out of such order:

Provided that the Supreme Court may, if it is satisfied that the appellant was prevented by
sufficient cause from filing the appeal within the said period, allow it to be filed within a
further period not exceeding sixty days.

SECTION 424- PROCEDURE BEFORE TRIBUNAL AND APPELLATE TRIBUNAL

The Tribunal and the Appellate Tribunal shall not be bound by the procedure laid down in the
Code of Civil Procedure, 1908, but shall be guided by the principles of natural justice or of the
Insolvency and Bankruptcy Code, 2016, the Tribunal and the Appellate Tribunal shall have
power to regulate their own procedure.

The Tribunal and the Appellate Tribunal shall have, for the purposes of discharging their
functions under this Act or under the Insolvency and Bankruptcy Code, 2016, the same powers
as are vested in a civil court under the Code of Civil Procedure, 1908 while trying a suit in
respect of the following matters, namely

• Summoning and enforcing the attendance of any person and examining him on oath

• Requiring the discovery and production of documents; (c) receiving evidence on affidavits

• Subject to the provisions of sections 123 and 124 of the Indian Evidence Act, 1872,
requisitioning any public record or document or a copy of such record or document from
any office

• issuing commissions for the examination of witnesses or documents; (f) dismissing a

representation for default or deciding it ex parte

• Setting aside any order of dismissal of any representation for default or any order passed by
it ex parte

• Any other matter which may be prescribed

Any order made by the Tribunal or the Appellate Tribunal may be enforced by that
Tribunal in the same manner as if it were a decree made by a court in a suit pending therein

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COURTS,
SECTIONTRIBUNAL
425- POWERUNDER
TO PUNISHCOMPANIES ACT AND OTHER LEGISLATIONS
FOR CONTEMPT
SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER
LEGISLATIONS
The Tribunal and the Appellate Tribunal shall have the same jurisdiction, powers and authority
in respect of contempt of themselves as the High Court has and may exercise, for this purpose,
the powers under the provisions of the Contempt of Courts Act, 1971, which shall have the
effect subject to modifications that—

a. The reference therein to a High Court shall be construed as including a reference to the
Tribunal and the Appellate Tribunal; and

b. The reference to Advocate-General in section 15 of the said Act shall be construed as a

reference to such Law Officers as the Central Government may, specify in this behalf.

SECTION 432- RIGHT TO LEGAL REPRESENTATION

A party to any proceeding or appeal before the Tribunal or the Appellate Tribunal, as the case
may be, may either appear in person or authorise one or more chartered accountants or
company secretaries or cost accountants or legal practitioners or any other person to present his
case before the Tribunal or the Appellate Tribunal, as the case may be.

SECTION 433- LIMITATION

The provisions of the Limitation Act, 1963 shall, as far as may be, apply to proceedings or
appeals before the Tribunal or the Appellate Tribunal, as the case may be.

SPECIAL POINTS IN CASE OF COMPOUNDING

• An offence punishable with imprisonment only or with imprisonment and fine is not
compoundable under this section.
The section empowers the NCLT to compound offences without any limit or where a
maximum amount of fine which may be imposed by an offence does not exceed Rs. 5,
00,000 it may be compounded by the Regional Director.

• Any offence covered under this section by any company or its officer shall not be
compounded if the investigation against such company has been initiated or is pending
under this Act.

• The offences committed by a company or its officer within a period of three years from the
date on which the similar offence was committed by it or him was compounded under this
section, are not compoundable.

• Every application for the compounding of an offence shall be made to the Registrar of
Companies who shall forward the same, together with its comments thereon, to the
Company Law Board or the Regional Director, as the case may be. Where any offence is
compounded under this section, whether before or after the institution of any prosecution,
an intimation thereof shall be given by the Company, to the Registrar of Companies, within
7 days from the date on which the offence is so compounded.

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COURTS,
• WhereTRIBUNAL UNDER
any offence is COMPANIES
compounded before theACT AND OTHER
institution LEGISLATIONS
of any prosecution, no prosecution
SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER
shall be instituted in relation to such offence, either by the Registrar or by any shareholder
LEGISLATIONS
of the company or by any person authorised by the Central Government against the
offender in relation to whom the offence is so compounded.

• Where the compounding of any offence is made after the institution of any prosecution,
such compounding shall be brought by the Registrar in writing, to the notice of the court in
which the prosecution is pending and on such notice of the compounding of the offence
being given, the company or its officer in relation to whom the offence is so compounded
shall be discharged.

• Any offence which is punishable under this Act, with imprisonment or fine, or with
imprisonment or fine or with both, shall be compoundable with the permission of the
Special Court, in accordance with the procedure laid down in that Act for compounding of
offences;

• Any offence which is punishable under this Act with imprisonment only or with
imprisonment and also with fine shall not be compoundable.

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COURTS,
PROCEDURE TRIBUNAL
FOR FILINGUNDER OF COMPANIES
APPLICATIONACT AND OTHER
IN FRONT OF NCLT LEGISLATIONS
SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER
LEGISLATIONS
1. Every appeal or petition or application or caveat petition or objection or counter presented to
the Tribunal shall be in English and in case it is in some other Indian language, it shall be
accompanied by a copy translated in English and shall be fairly and legibly type written,
lithographed or printed in double spacing on one side of standard petition paper with an
inner margin of about four centimeter width on top and with a right margin of 2.5. cm, and
left margin of 5 cm, duly paginated, indexed and stitched together in paper book form;

2. The cause title shall state “Before the National Company Law Tribunal” and shall specify the
Bench to which it is presented and also set out the proceedings or order of the authority
against which it is preferred.

3. Appeal or petition or application or counter or objections shall be divided into paragraphs

and shall be numbered consecutively and each paragraph shall contain as nearly as may be, a
separate fact or allegation or point.

4. Where Saka or other dates are used, corresponding dates of Gregorian calendar shall also be
given.

5. Full name, parentage, age, description of each party and address and in case a party sues or
being sued in a representative character, shall also be set out at the beginning of the appeal or
petition or application and need not be repeated in the subsequent proceedings in the same
appeal or petition or application.

6. The names of parties shall be numbered consecutively and a separate line should be allotted
to the name and description of each party.

7. These numbers shall not be changed and in the event of the death of a party during the
pendency of the appeal or petition or matter, his legal heirs or representative, as the case may
be, if more than one shall be shown by sub-numbers.

8. Where fresh parties are brought in, they may be numbered consecutively in the particular
category, in which they are brought in.

9. Every proceeding shall state immediately after the cause title the provision of law under
which it is preferred.

10. The bench may permit more than 1 person join together and present joint petition if it is
satisfied both of them have common interest in matter.

11. Any person may lodge a caveat in triplicate in any appeal or petition or application that
may be instituted before this Tribunal by paying the prescribed fee after forwarding a copy
by registered post or serving the same on the expected petitioner or appellant and the
caveat shall be in the form NCLT 3C and contain such details and particulars or orders or
directions, details of authority against whose orders or directions the appeal or petition or
application is being instituted by the expected appellant or petitioner or applicant which

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JIGL 12.10
SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONSSAL
COURTS, TRIBUNAL
full address UNDER
for service COMPANIES
on other side, so thatACT AND OTHER
the appeal LEGISLATIONS
or petition or application could be
SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER
served before the appeal or petition or interim application is taken up.
LEGISLATIONS
Provided that the Tribunal may pass interim orders in case of urgency. The caveat shall
remain valid for a period of ninety days from the date of its filing.

12. On the admission of appeal or petition or application the Registrar shall, if so directed by
the Tribunal, call for the records relating to the proceedings from any adjudicating
authority and retransmit the same.

NCLAT RULES 2016

National Company Law Appellate Tribunal Rules, 2016. 21st July 2016

S.NO. PARTICULARS PROVISIONS

Where a period is prescribed by the Act and these rules or under

any other law or is fixed by the Appellate Tribunal for doing any
RULE 3
act, in computing the time, the day from which the said period is
1 to be reckoned shall be excluded, and if the last day expires on a
Computation of
day when the office of the Appellate Tribunal is closed, that day
time period -
and any succeeding day on which the Appellate Tribunal remains
closed shall also be excluded

RULE 9
The sitting hours of the Appellate Tribunal shall ordinarily be
from 09.30 AM. to 01.00 P.M. and from 2.15 P.M. to 5.00 P.M.
2 Sitting hours of
subject to any order made by the Chairperson and this shall not
the Appellate
prevent the Appellate Tribunal to extend its sitting as it deems fit.
Tribunal.-

1. The office of the Appellate Tribunal shall remain open on all

RULE 10
working days from 09:30 A.M. to 6.00 P.M.
3
Working hours of
2. The filing counter of the Registry shall be open on all working
office.-
days from 10.30 AM to 5.00 P.M. "

All urgent matters filed before 12 noon shall be listed before the
Appellate Tribunal on the following working day, if it is complete
RULE 13
in all respects as provided in these rules and in exceptional cases,
4
it may be received after 12 noon but before 3.00 P.M. for listing on
Listing of cases
the following day, with the specific permission of the Appellate
Tribunal or Chairperson.

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SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONSSAL
COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONS
SPECIAL COURTS,The Appellate UNDER
TRIBUNAL TribunalCOMPANIES
may on sufficient
ACT cause being shown,
AND OTHER
RULE 14 LEGISLATIONS
exempt the parties from compliance with any requirement of
5 these rules and may give such directions in matters of practice
Power to
and procedure, as it may consider just and expedient on the
exempt.-
application moved in this behalf to render substantial justice.

RULE 15 The Appellate Tribunal may extend the time appointed by these
rules or fixed by any order, for doing any act or taking any
6
Power to extend proceeding, upon such terms, if any, as the justice of the case may
time.- require, and any enlargement may be ordered, although the
application therefore is not made until after the expiration of the
time appointed or allowed.

All adjournments shall normally be sought before the concerned

RULE 17
Bench in court and in extraordinary circumstances, the Registrar
7 may. if so directed by the Tribunal in chambers, at any time
Power of
adjourn any matter and lay the same before the Tribunal in
adjournment.-
chambers.

RULE 18
The Chairperson may assign or delegate to a Deputy Registrar or
Delegation
8 to any other suitable officer all or some of the functions required
powers of the
by these rules to be exercised by the Registrar
Chairperson.-

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SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONSSAL
COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONS
SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER
LEGISLATIONS
1.Every appeal to the Appellate Tribunal shall be in English and
in case it is in some other Indian language, it shall be
accompanied by a copy translated in English and shall be fairly
and legibly type- written or printed in double spacing on one
side of standard paper with an inner margin of about four
centimeters width on top and with a right margin of 2.5 cm, and
left margin of 5 cm, duly paginated, indexed and stitched
together in paper book form.

2.The cause title shall state “In the National Company Law
Appellate Tribunal” and also set out the proceedings or order of
the authority against which it is preferred.

3.Appeal shall be divided into paragraphs and shall be numbered

consecutively and each paragraph shall contain as nearly as
may be, a separate fact or allegation or point.

4.Where Saka or other dates are used, corresponding dates of

RULE 19 Gregorian calendar shall also be given.

9
Procedure for 5.Full name, parentage, description of each party and address and
proceedings. in case a party sue or being sued in a representative character,
shall also be set out at the beginning of the appeal and need not
be repeated in the subsequent proceedings in the same appeal,

6.The names of parties shall be numbered consecutively and a

separate line should be allotted to the name and description of
each party and these numbers shall not be changed and in the
event of the death of a party during the pendency of the appeal,
his legal heirs or representative, as the case may be, if more than
one shall be shown by sub-numbers.

7. Where fresh parties are brought in, they may be numbered

consecutively in the particular category, in which they are
brought in.

8. Every proceeding shall state immediately after the cause title

and the provision of law under which it is preferred.

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JIGL 12.13
SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONSSAL
COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONS
1.Every appeal shall be presented in Form NCLAT-1 in triplicate
SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER
by the appellant or petitioner or applicant or respondent, as the
LEGISLATIONS
case may be, in person or by his duly authorised representative
duly appointed in this behalf in the prescribed form with
stipulated fee at the filing counter and non-compliance of this
may constitute a valid ground to refuse to entertain the same.

2.Every appeal shall be accompanied by a certified copy of the

impugned order.

3.All documents filed in the Appellate Tribunal shall be

RULE 22 accompanied by an index in triplicate containing their details
10 and the amount of fee paid thereon.
Presentation of
appeal.-
4.Sufficient number of copies of the appeal or petition or
application shall also be filed for service on the opposite party
as prescribed.

5.In the pending matters, all other applications shall be presented

after serving copies thereof in advance on the opposite side or
his advocate or authorised representative.

6.The processing fee prescribed by the rules, with required

number of envelopes of sufficient size and notice forms as
prescribed shall be filled along with memorandum of appeal.

POWERS EXERCISE BY NCLT COMPANIES ACT, 2013

POWERS OF NCLT SECTION

CHAPTER-I “PRELIMINARY”

To allow certain companies or body corporate to have a different financial

2(41)
year

CHAPTER-II “INCORPORATION OF COMPANY AND MATTERS INCIDENTAL

THERETO”

In case a company has got incorporated by furnishing any false or incorrect

7(7)
information or by suppression of any material fact or information, NCLT
can pass such orders as it thinks fit.

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SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONSSAL
COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONS
Any assets remaining
SPECIAL on wind-up
COURTS, of Section
TRIBUNAL 8 company
UNDER may be transferred
COMPANIES ACT AND OTHER
to another company having similar objects with the approval of Tribunal or
LEGISLATIONS 8(9)
transferred to the Rehabilitation and Insolvency Fund u/s 269.

Conversion of a public company into a private company requires the

Proviso of 14(1)
approval of NCLT.

CHAPTER -IV “SHARE CAPITAL AND DEBENTURES”

Not less than ten percent of the issued shares of a class, who did not
consent to a variation, may apply to the Tribunal for cancelling the 48(2)
variation.

NCLT can approve issue of further redeemable preference shares when a

company is unable to redeem its existing unredeemed preference shares or 55(3)
to pay dividend thereon.

NCLT can order forthwith redemption of such preference shares the holder
of which have not consented to the issue of further redeemable preference Proviso of 55 (3)
shares.

To make an order imposing prohibition on delivery of certificates for the

56(4)
securities issued by a company

The transferee of shares in a private company may appeal to the NCLT

within one month from the receipt of notice of refusal or within sixty days
58(3)
from the date on which the instrument of transfer or intimation of
transmission was delivered to the company

The transferee in a public company within sixty days of refusal to register

transfer or transmission, or within ninety days of delivery of instrument of 58(4)
transfer or of intimation of transmission may apply to the NCLT for relief.

To dismiss appeal against refusal to register transfer and transmission

ofshares OR to direct rectification of register and payment of damages by
company. 58(5)

To order rectification of register of members on transfer or transmission of

shares.

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SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONSSAL
COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONS
To direct a Company
SPECIAL or depository
COURTS, TRIBUNALto set UNDER
right a contravention
COMPANIES of SCRA
ACT ANDor OTHER
SEBI Actor any other law, resulting by transfer of securities and to rectify
LEGISLATIONS 59(4)
concerned registers and records held by the Company or depository

To approve Consolidation and division of share capital resulting in change

in voting percentage of shareholders

Proviso under 61(1)(b)

Where the terms of conversion of debentures into shares of a company ordered by the
Government are not acceptable to the company, the company may appeal to the Tribunal for
making such order as it may deem fit.

Proviso under Section 62(4)

Confirmation by NCLT for reduction of capital in a company limited by shares or guarantee

and having share capital.

Proviso under Section 66(1)

Where the assets of a company are insufficient to discharge the debentures, the debenture
trustee may apply to the NCLT.

Proviso under Section 71(9)

NCLT to order redemption of debentures forthwith by payment of principal and interest due
thereon

Proviso under Section 71(10)

CHAPTER V “ACCEPTANCE OF DEPOSITS BY COMPANIES”

To direct the company to make repayment of the matured deposits or for any loss or damage
incurred by him as a result of non-payment.

Proviso under 73(4)

On an application by the company, NCLT may allow further time to the company to repay the
amount of deposit or part thereof and the interest payable.

Proviso under 74(2)

CHAPTER -VII “MANAGEMENT AND ADMINISTRATION”

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JIGL 12.16
SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONSSAL
COURTS, TRIBUNAL
On the application of a UNDER
member, COMPANIES ACT
the Tribunal may callAND OTHER
or direct LEGISLATIONS
the calling of an annual general
SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER
meeting if default is made in holding the Annual General Meeting.
LEGISLATIONS
Proviso under 97(1)

In case it is impracticable to call a meeting, the Tribunal may either suo moto, or on application
of a director or member of the company who is entitled to vote at the meeting, order to call
meeting i.e extra ordinary general meetings and give such directions as may be necessary.The
Tribunal may direct that inspection of minute book of general meeting be given to a member.

Proviso under 119(4)

CHAPTER -VIII “ DECLARATION AND PAYMENT OF DIVIDEND”

To sanction utilization of 1EPF for reimbursement of legal expenses

125 (3)(d)
incurred on class action suits by members, debentures or depositors.

CHAPTER-IX “ACCOUNTS OF COMPANIES”

130(1)
The Tribunal may allow a company to recast its financial statements

With the approval of NCLT, company may prepare revised financial

131(1)
statement for any of the three preceding financial years.

CHAPTER-X “AUDIT AND AUDITORS”

To restrict copies of representation of the auditor to be removed to be

140 (4)
sent out.

The Tribunal may, on the application of the company or any aggrieved

Second proviso of
person, order that copy of representation by the Auditor need not be sent
140(4)(iii)(b)
to members nor read at the meeting.

Where NCLT is satisfied that the Auditor has acted in a fraudulent

140(5)
manner, it mat order that the Auditor may be changed

CHAPTER- XI “APPOINTMENT AND QUALIFICATIONS OF DIRECTORS”

Regarding removal of director, NCLT may order that representation

from the director need not be sent to the members and nor read at the 169(4)(b) proviso
meeting.

CHAPTER -XIV “INSPECTION, INQUIRY AND INVESTIGATION”

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JIGL 12.17
SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONSSAL
COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONS
210(2)
SPECIAL
To order COURTS,
investigation of theTRIBUNAL
affairs of the UNDER
company.COMPANIES ACT AND OTHER
LEGISLATIONS

The Tribunal may ask the Central Government to investigate into the
affairs of the company in other cases on application where the business
of the company is being conducted with intent to defraud creditors,
persons concerned in the formation of the company or management of its 213
affairs have been guilty of fraud, misfeasance or other misconduct and
members have not been given all the information with respect to the
affairs of the Company.

To order investigation of ownership of Company. 216 (2)

NCLT may pass suitable orders for the protection of the employees in
218(1)
respect of investigation under section 210,212,213 or 219.

To order freezing of assets of company on inquiry and investigation in

221(1)
case of complaint made by its members, for a period of three years.

To impose restrictions in connection with securities. 222(1)

To entertain petition for winding up of a Company or Body Corporate in

224(2)
pursuance of Inspector’s report.

To hear petition for winding up of a Company presented by Central Govt. 224(2)

NCLT may, on application of Central Government, pass order for

224(5)
disgorgement of assets and other matters

To pass orders after inspector’s intimation of pendency in investigation 226

proceedings 1st Proviso

CHAPTER-XV “COMPROMISES, ARRANGEMENTS AND AMALGAMATIONS”

With reference to compromise or arrangements between the company and its

creditors and members, Tribunal may order a meeting of creditors or class of 230(1)
creditors or members of the company.

To sanction compromise or arrangement agreed to at the meeting of

230 (6)
creditors/ members ordered by the Tribunal

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JIGL 12.18
SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONSSAL
COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONS
To dispense with calling of meeting of members/ creditors for approving
SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER 230(9)
compromise or arrangement. LEGISLATIONS

To pass orders on an application on grievance in respect of takeover offer of

230(12)
companies other than listed companies

231(1)
To enforce compromise and arrangement as sanctioned under Section 230.

If the Tribunal is satisfied that the compromise or arrangement sanctioned

under Section 230 cannot be implemented satisfactorily with or without
231(2)
modifications, and the company is unable to pay its debts as per the scheme,
it may make an order for winding up the company.

To sanction the scheme of merger and amalgamation.

232(1)

To call meeting of creditors or members for facilitating merger and

232 (2)
amalgamation of companies.

If the Central Government is of the opinion that the scheme filed under
section 233 is not in public interest, it may file an application before the 233(5)
Tribunal within Sixty days of receipt of the scheme under sub section (2).

To entertain the application made by the dissenting shareholders of the

235(2)
scheme approved by the majority.

Any aggrieved person in respect of compensation made by the prescribed

237(4)
authority may make appeal to the Tribunal within 30 days.

Appeal to the tribunal against the refusal of the Registrar to register the
238(2)
circular.

CHAPTER- XVI “PREVENTION OF OPPRESSION AND MISMANAGEMENT”

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JIGL 12.19
SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONSSAL
COURTS, TRIBUNAL
Complaints UNDER
of oppression COMPANIES will
and mismanagement ACT
beAND
heardOTHER LEGISLATIONS
by the 241(1) Tribunal.
SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER
LEGISLATIONS
Where the company’s affairs have been or are being conducted in a manner
prejudicial or oppressive to any member or members or prejudicial to public
242(1 )(a)
interest or in a manner prejudicial to the interests of the company, Tribunal
may pass necessary orders.

To make an order where winding up the company would unfairly prejudice

such member or members, but that otherwise the facts would justify the
242(1 )(b)
making of a winding up order on the ground that it was just and equitable
that the Company should be wound up.

Tribunal may pass orders for regulation of conduct of affairs of the company
in future. 242(2)(a)

To make an order for purchase of shares or interests of any members of the

242(2)(b)
company by other members thereof or by the company.

To make an order for reduction of share capital consequent to purchase of

shares of the company in the manner envisaged under Section 242(2)(b) 242(2)(c)

The Tribunal can restrict on the transfer or allotment of the shares of the
242(2)(d)
company.

To terminate, set aside or modify any agreement, however arrived at, between
the company and the managing director, any other director or manager, upon
242(2)(e)
such terms and conditions as may, in the opinion of the NCLT, be just and
equitable in the circumstances of the case.

To terminate, set aside or modify any agreement between the company and
any person other than the managing director, any other director or manager
referred to in Clause (e) of sub-section (2) of Section 242,
242(2)(f)
Provided that no such agreement shall be terminated, set aside or modified
except after due notice and after obtaining the consent of the party concerned.

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SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONSSAL
COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONS
To setSPECIAL
aside any COURTS,
transfer, delivery
TRIBUNALof goods, payment,
UNDER execution or
COMPANIES ACTother
ANDact OTHER
relating LEGISLATIONS

to property made or done by or against the company within 3 months before 242(2)(g)
the date of the application made pursuant to section 241, which would, if
made or done by or against an individual, be deemed in his insolvency to be a
fraudulent preference.

Removal of the managing director, manager or any of the directors of the

242(2)(h)
company.

Recovery of undue gains made by any managing director, manager or director

during the period of his appointment as such and the manner of utilization of
242(2)(i)
the recovery including transfer to Investor Education and Protection Fund or
repayment to identifiable victims.

Manner in which the managing director or manager of the company may be 242(2)(j) appointed
subsequent to an order removing the existing managing director or manager of the company
made.

Appointment of such number of persons as directors, who may be

required by the NCLT to report to be NCLT on such matters as the 242(2)(k)
NCLT may direct.

Imposition of costs as may be deemed fit by the NCLT 242(2)(1)

Any other matter for which, in the opinion of the NCLT, it is just and
242(2)(m)
equitable that provision should be made

In case of termination or modification of certain agreements by the

Company with managing directors or other directors, leave be granted 243(1)
by the NCLT.

To pass specified order in receipt of application by members or

depositors or any class of them in case if they are of the opinion that the
management or conduct of the affairs of the company is being 245(1)
conducted in a manner prejudicial to the interests of the company or its
members or depositors.

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SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONSSAL
COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONS
To punish for theCOURTS,
SPECIAL contempt TRIBUNAL
of the Tribunal in casesCOMPANIES
UNDER where a fraudulent
ACT AND OTHER
246
application is made u/'s 241 (Oppression and Mismanagement) and
LEGISLATIONS
245(Class Action Suits). This power shall apply for Sections 337 to 341.

CHAPTER -XVIII “REMOVAL OF NAME OF COMPANIES FROM THE REGISTER OF

COMPANIES”

To wind up a company the name of which has been struck off by

248 (8)
registrar from Register of Companies.

Tribunal may order restoration of the name of a company to the Register

of companies in case of an appeal made to the tribunal within three 252(1)
years of the order of the Registrar.

To entertain the application made by the secured creditors of a company

representing 50 per cent or more of its outstanding amount of debt and
253(1)
the company has failed to pay the debt within a period of 30 days of the
service of the notice of demand.

NCLT may appoint an interim administrator within seven days of

254(1),(3)
receipt of application under Section 256.

NCLT may appoint interim administrator to be the company

administrator in case of an application made by the creditors that the 258
company can be revived.

NCLT can delineate or direct the functions and duties of the Company
260
administrator.

To sanction the scheme of revival and rehabilitation of sick industrial

262
companies as prepared in Section 261, Companies Act, 2013.

To implent the scheme of revival and rehabilitation of sick industrial

264
companies.

Where the scheme is not approved by the creditors, NCLT may issue orders 265 for the
winding up of the sick company.

To assess damages against the delinquent Directors in the course of the

scrutiny or implementation of any scheme or proposal and pass suitable 266
orders.

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JIGL 12.22
SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONSSAL
COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONS
To punish in case of making a false or incorrect evidence to the NCLT or the
SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER267
NCLAT. LEGISLATIONS

SPECIAL COURT

Establishment of special courts [section 435 to 440] 18th May 2016

435. The Central Government may, for the purpose of providing speedy trial of offences under
this Act, by notification, establish or designate as many Special Courts as may be necessary.

a. A Special Court shall consist of a single judge holding office as Session Judge or Additional
Session Judge, in case of offences punishable under this Act with imprisonment of two
years or more; and

b. a Metropolitan Magistrate or a Judicial Magistrate of the First Class, in the case of other
offences, who shall be appointed by the Central Government with the concurrence of the
Chief Justice of the High Court within whose jurisdiction the judge to be appointed is
working.

PROVISIONS REGARDING SPECIAL COURTS

▪ The Special Court may exercise the same power which a Magistrate having may exercise
under Section 167 of the Code of Criminal Procedure, 1973 in relation to an accused person
who has been forwarded to him.

▪ When a person accused of or suspected of the commission of an offence under the Act is
forwarded, a Judicial Magistrate may authorise the detention of that person for fifteen days
or an Executive Magistrate for seven days.

▪ When the Magistrate consider that the detention of the person upon or before the expiry of
the period of detention is unnecessary, he shall order such person to be forwarded to the
Special Court having Jurisdiction.

▪ The Special Court may try in a summary way any offence under this Act which is
punishable with imprisonment for a term not exceeding three years.

▪ In case of summary trial, a sentence of imprisonment for a term exceeding one year shall
not be passed.

▪ All offence under the Companies Act shall be triable only by the Special Court for the area
in which the registered office of the company in relation to which the offence is committed.
The provisions of the Code of Criminal Procedure, 1973 shall apply to the proceedings
before a Special Court. The Special Court shall be deemed to be a Court of Session and the
person conducting a prosecution before a Special Court be deemed to be a Public
Prosecutor.

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SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER LEGISLATIONSSAL
COURTS,
▪ all theTRIBUNAL UNDER to
offences pertaining COMPANIES
Companies Act,ACT2013
ANDare
OTHER LEGISLATIONS
non-cognizable, except offences
SPECIAL COURTS, TRIBUNAL UNDER COMPANIES ACT AND OTHER
referred to Serious Fraud Investigation Office (SFIO)
LEGISLATIONS
In exercise of the powers conferred by sub-section (1) of section 435 of the Companies Act, 2013,
the Central Government hereby, after obtaining the concurrence of the respective Chief Justices
of the High Courts, designates the following Courts mentioned in the Table below as Special
Courts for the purposes of trial of offences punishable under the Companies Act, 2013 with
imprisonment of two years or more in terms of section 435 of the Companies Act, 2013,
namely:-

SR.
Existing Court Jurisdiction as Special Court
No.

Courts of Additional Special Judge, Anti-

1 State of Jammu and Kashmir
Corruption at Jammu and Srinagar

Presiding Officers of Court No’s. 37 and 58 of

2 the City Civil and Sessions Court, Greater State of Maharashtra
Mumbai

Court of Principal District and Sessions Judge,

Union Territories of Dadra and
3 Union territory of Dadra and Nagar Haveli at
Nagar Haveli and Daman and Diu
Silvassa.

Court of District Judge-1 and Additional

4 State of Goa
Sessions Judge, Panaji.

Court of Principal District and Sessions Judge,

5 Ahmedabad (Rural), situated at Mirzapur, State of Gujarat
Ahmedabad.

9th Additional Sessions Judge, Gwalior Madhya

6
Pradesh. State of Madhya Pradesh

Court of Additional District and Session Judge, Union territory of Andaman and
7
Port Blair, Andaman and Nicobar Islands. Nicobar Islands.

8 2nd Special Court, Calcutta. State of West Bengal

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JIGL ARBITRATION AND CONCILIATION ACT
13.1

13 ARBITRATION AND CONCILIATION ACT, 1996

ION AND CONCILIATION ACT, 1996
INTRODUCTION

With the passage of time, some difficulties in the applicability of the Arbitration and Conciliation
Act, 1996 have been noticed. IT CAME IN TO FORCE ON 22 AUGUST 1996

Interpretation of the provisions of the Act by Courts in some cases have resulted in delay of
disposal of arbitration proceedings and increase in interference of Courts in arbitration matters,
which tend to defeat the object of the Act.

With a view to overcome the difficulties, the Government promulgated an Ordinance

(Arbitration and Conciliation (Amendment) Ordinance, 2015) amending the Arbitration and
Conciliation Act, 1996 which received assent from the President as on 23.10.2015.

The Arbitration and Conciliation (Amendment) Bill, 2015 was introduced in both the Houses of
Parliament to replace the Ordinance and was subsequently passed.

Thereafter, the Amendment Bill became Act after receiving President’s assent as on 31.12.2015
and shall be deemed to have come into force from 23.10.2015.

Such an amendment was necessary to make India a hub of International Commercial Arbitration,
to encourage foreign investment by projecting India as an investor friendly country having a
sound legal framework and ease of doing business in India.

Arbitration and Conciliation (Amendment) Act, 2015 facilitate and encourage Alternative
Dispute Mechanism, especially arbitration, for settlement of disputes in a more user-friendly,
cost effective and expeditious disposal of cases since India is committed to improve its legal
framework to obviate in disposal of cases.

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13.2
Alternative Dispute Resolution (ADR): There is a growing awareness that courts will not be in
a position to bear the entire burden of justice system.

A very large number of disputes lend themselves to resolution by alternative modes such as
arbitration, mediation, conciliation, negotiation, etc. The ADR processes provide procedural
flexibility save valuable time and money and avoid the stress of a conventional trial.

At present, ADR services are offered in India in very rudimentary (simple) form. There is,
therefore, an urgent need to establish and promote ADR services for resolution of both domestic
and international disputes in India.

The International Centre for Alternative Dispute Resolution (ICADR) is a unique centre in this
part of the world that makes provision for promoting, teaching and research in the field of ADR
as also for offering ADR services to parties not only in India but also to parties all over the world.

The ICADR is a Society registered under Societies Registration Act, 1860, it is an independent
non-profit making organisation. It maintains panels of independent experts in the
implementation of ADR processes. Areas in which ADR works

Almost all disputes including commercial, civil, labour and family disputes, in respect of which
the parties are entitled to conclude a settlement, can be settled by an ADR procedure. ADR
techniques have been proven to work in the business environment, especially in respect of
disputes involving joint ventures, construction projects, partnership differences, intellectual
property, personal injury, product liability, professional liability, real estate, securities, contract
interpretation and performance and insurance coverage.

DEFINITION

“Arbitration agreement” means an agreement referred to in Section 7

Arbitration
Under Section 7, the Arbitration agreement has been defined to mean an
Agreement
agreement by the parties to submit to arbitration all or certain disputes
[Section 2(1) (b)]
which have arisen or which may arise between them in respect of a
defined legal relationship, whether contractual or not.

Arbitration The term “Arbitration” as to mean any arbitration whether or not

Section 2(1) (a) administered by a permanent arbitral institution.

• “Ad hoc Arbitration” is arbitration agreed to and arranged by the

parties themselves without recourse to an Institution.

Ad hoc
• The proceedings are conducted by the arbitrators as per the agreement
Arbitration
between the ‘parties’ or with concurrence of the parties.

• It can be domestic, international, or foreign arbitration.

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JIGL ARBITRATION AND CONCILIATION ACT
13.3
The term “arbitrator” is not defined in the Arbitration and Conciliation
Act. In general, “arbitrator” is defined as a person who is appointed to
determine differences and disputes between two or more parties by their
mutual consent,

- It is not enough that the parties appoint an arbitrator.

- The person who is so appointed must also give his consent to act as an
Arbitrator
arbitrator.

- His appointment is not complete till he has accepted the reference.

- The arbitrator must be absolutely disinterested and impartial.

- He is an extra-judicial tribunal whose decision is binding on the parties.

“Arbitral tribunal” means a sole arbitrator or a panel of arbitrators.

Arbitral tribunal
[Section 2(1) (d)]

Court means in case of “Domestic Arbitration Agreement”

The principal Civil Court of original jurisdiction in a district, and

INCLUDES :

The High Court in exercise of its ordinary original civil jurisdiction, having
Court jurisdiction to decide the questions forming the subject-matter of the
arbitration if the same had been the subject-matter of a suit,

EXCLUDE:

Any civil court of a grade inferior to such principal Civil Court, or any
Court of Small Causes; c

In case of “INTERNATIONAL COMMERCIAL AGREEMENT”

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JIGL ARBITRATION AND CONCILIATION ACT
13.4

• The High Court in exercise of its ordinary original civil jurisdiction

having jurisdiction to decide the questions forming the subject-matter of
the arbitration if the same had been the subject-matter of a suit, and

• In other cases, a High Court having jurisdiction to hear appeals from

decrees of courts subordinate to that High Court. [Section 2(1)(e)]

[AMENDMENT UNDER 2015]

“International commercial arbitration” means an arbitration relating to

disputed arising out of legal relationships, whether contractual or not,
considered as commercial under law in force in India and where at least
one of the parties is: -

International • An individual who is a resident in, any country other than India; or
Commercial
Arbitration • A body corporate which is incorporated in any country other than
[Section 2(1) (f)] India ; or

• An association or a body of individuals whose central management

and control is exercised in any country other than India; or

• The Government of a foreign country.

The following are the persons who are legal representatives:

Legal a. A person who in law represents the estate of a deceased person II. A
Representative - person who intermeddles with the estate of the deceased
Section 2 (1) (g)
b. A person on whom the estate of a deceased person devolves on the
death of the party acting in a representative’s capacity

SECTION 7 ARBITRATION AGREEMENT

Definition of Arbitration Agreement

Section 7 of the Act defines the Arbitration Agreement in the following words:

“Arbitration Agreement means an agreement by the parties to submit to arbitration all or certain
disputes, which have arisen or which may arise between them, in respect of a defined legal
relationship, whether contractual or not”.

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JIGL ARBITRATION AND CONCILIATION ACT
13.5
Essentials of Arbitration Agreement

An arbitration agreement, to be valid and binding, must have the following essential elements:

➢ It must be in writing and includes an exchange of letter, telex, telegrams or other means of
communication which provides a record of such arbitration agreement.

➢ It must have all the essential elements of a valid contract and the parties must ad idem. If
it is vague and uncertain and not capable of being made certain, there is really no
agreement in law.

➢ Case Law Rukmanibai v Collector

An arbitration agreement is not required to be in any particular form. What is required to

be ascertained is whether the parties have agreed that if disputes arise between them in
respect of subject-matter of the contract, such disputes shall be referred to arbitration. Then
such an agreement would spell out an arbitration agreement.

- It must be to refer a dispute, present or future, between the parties to arbitration.

- It may be in the form of an arbitration clause in a contact or in the form of a separate

agreement.

➢ Case Law Naihato Jute Mills v Khyaliran

It may be noted that if a contract containing an arbitration clause cony to an end owing to
frustration or is avoided on the ground of fraud, misrepresentation, undue influence or
coercion, the arbitration clause continues to be binding.

Interim measures by Court

Section 9(1) states that a party may, before, or during arbitral proceedings or at any time after
making of the arbitral award but before it is enforced in accordance with section 36, apply to a
court-

1. for the appointment of a guardian for a minor or person of unsound mind for the purposes
of arbitral proceedings; or

2. for an interim measure of protection in respect of any of the following matters, namely: -

• the preservation, interim custody or sale of any goods which are the subject-matter of
the arbitration agreement;

• securing the amount in dispute in the arbitration;

• the detention, preservation or inspection of any property or thing which is the subject-
matter of the dispute in arbitration, or as to which any question may arise therein and
authorizing for any of the aforesaid purposes any person to enter upon any land or

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JIGL ARBITRATION AND CONCILIATION ACT
13.6
building in the possession of any part) or authorizing any samples to be taken or any
observation to be made, or experiment to be tried, which may be necessary or
expedient for the purpose of obtaining full information or evidence;

• interim injunction or the appointment of a receiver;

• such other interim measure of protection as may appear to the Court to be just and
convenient, and the Court shall have the same power for making orders as it has for
the purpose of, and in relation to, any proceedings before it.

Number of arbitrators

As per Section 10(1) of the Act, the parties are free to determine the number of arbitrators,
provided that such number shall not be an even number.

Failing the determination referred to in Section 10(1) above, the arbitral tribunal shall consist of
a sole arbitrator.

Appointment of Arbitrators

According to section 11(1) a person of any nationality may be an arbitrator, unless otherwise
agreed by the parties. Section 11(2) states that subject to Section 11(6), the parties are free to agree
on a procedure for appointing the arbitrator or arbitrators.

Section 11 (6) provides that where, under an appointment procedure agreed upon by the parties

• a party fails to act as required under that procedure; or

• the parties, or the two appointed arbitrators, fail to reach an agreement expected of them
under that procedure; or

• a person, including an institution, fails to perform any function entrusted him or it under
that procedure, a party may request the Supreme Court or, as the case may be, the High
Court or any person or institution designated by such Court take the necessary measure,
unless the agreement on the appointment procedure provides other means for securing the
appointment.

Section 11 (3) states that failing any agreement referred to in sub-section (2), in an arbitration
with three arbitrators, each party shall appoint one arbitrator, and the two appointed arbitrators,
shall appoint the third arbitrator who shall act as the presiding arbitrator.

Under Section 11 (4) if the appointment procedure in Section 11 (3) applies and-

• a party fails to appoint an arbitrator within thirty days from the receipt of a request to do
so from the other party; or

• the two appointed arbitrators fail to agree on the third arbitrator within thirty days from
the date of their appointment, the appointment shall be made upon request of a party, "the

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Supreme Court or, as the case may be, the High Court or any person or institution
designated by such Court".

Section 11 (5) says that failing any agreement referred to in Section 11 (2), in an arbitration with
a sole arbitrator if the parties fail to agree on the arbitrator within thirty days from receipt of a
request by one party from the other party to so agree the appointment shall be made, upon
request of a party, by "the Supreme Court or, as the case may be, the High Court or any person
or institution designated by such Court".

Section 11 (6) provides that where, under an appointment procedure agreed upon by the parties,

• a party fails to act as required under that procedure; or

• the parties, or the two appointed arbitrators, fail to reach an agreement expected of them
under that procedure; or

• a person, including an institution, fails to perform any function entrusted him or it under
that procedure, a party may request the Chief Justice or any person or institution
designated by him take the necessary measure, unless the agreement on the appointment
procedure provides other means for securing the appointment.

Section 11(6A) states that the Supreme Court or, as the case may be, the High Court, while
considering any application under Section 11(4) or Section 11(5) or Section 11(6), shall,
notwithstanding any judgment, decree or order of any court, confine to the examination of the
existence of an arbitration agreement.

Under Section 11(6B) the designation of any person or institution by the Supreme Court or, as
the case may be, the High Court, for the purposes of this section shall not be regarded as a
delegation of judicial power by the Supreme Court or the High Court.

Section 11(7) provides that a decision on a matter entrusted by Section 11(4) or Section 11(5) or
Section 11(6) to the Supreme Court or, as the case may be, the High Court or the person or
institution designated by such Court is final and no appeal including Letters Patent Appeal shall
lie against such decision.

Section 11 (8) says that the Supreme Court or, as the case may be, the High Court or the person
or institution designated by such Court, before appointing an arbitrator, shall seek a disclosure
in writing from the prospective arbitrator in terms of section 12(1), and have due regard to-

a. any qualifications required for the arbitrator by the agreement of the parties; and

b. the contents of the disclosure and other considerations as are likely to secure the
appointment of an independent and impartial arbitrator.

Under Section 11(9) in the case of appointment of sole or third arbitrator in an international
commercial arbitration, "the Supreme Court or the person or institution designated by that
Court" may appoint an arbitrator of a nationality other than the nationalities of the parties where

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POWER OF CENTRAL GOVERNMENT TO AMEND FOURTH SCHEDULE

In terms of Section 11A of the Act, if the Central Government is satisfied that it is necessary or
expedient so to do, it may, by notification in the Official Gazette, amend the Fourth Schedule and
thereupon the Fourth Schedule shall be deemed to have been amended accordingly.

Grounds for challenge

Section 12(1) provides that when a person is approached in connection with his possible
appointment as an arbitrator, he shall disclose in writing any circumstances-

• such as the existence either direct or indirect, of any past or present relationship with or
interest in any of the parties or in relation to the subject matter in dispute, whether financial,
business, professional or other kind, which is likely to give rise to justifiable doubts as to
his independence or impartiality; and

• which are likely to affect his ability to devote sufficient time to the arbitration and in
particular his ability to complete the entire arbitration within a period of twelve months.

Explanation 1- The grounds stated in the Fifth Schedule of the Act shall guide in determining
whether circumstances exist which give rise to justifiable doubts as to the independence or
impartiality of an arbitrator.

Explanation 2- The disclosure shall be made by such person in the form specified in the Sixth
Schedule of the Act.

According to Section 12(2), an arbitrator, from the time of his appointment and throughout the
arbitral proceedings, shall, without delay, disclose to the parties in writing any circumstances
referred to in sub section (1) unless they have already been informed of them by him.

Section 12(3) states an arbitrator may be challenged only if-

• circumstances exist that give rise to justifiable doubts as to his independence or

impartiality, or

• he does not possess the qualifications agreed to by the parties.

Section 12(4) provides that a party may challenge an arbitrator appointed by him, or in whose
appointment he has participated, only for reason, of which he becomes aware after the
appointment has been made.

Section 12(5) states that notwithstanding any prior agreement to the contrary, any person whose
relationship, with the parties or counsel the subject matter of the dispute, falls under any of the
categories specified in the Seventh Schedule of the Act shall be ineligible to be appointed as an
arbitrator.

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Provided that parties may, subsequent to disputes having arisen between them, waive the
applicability of this sub-section by an express agreement in writing.

CHALLENGE PROCEDURE

Section 13 of the Act contains detailed provisions regarding challenge procedure. Sub-section (1)
provides that subject to provisions of Sub-section (4), the parties are free to agree on a procedure
for challenging an arbitrator.

Sub-Section (4) states that if a challenge under any procedure agreed upon by the parties or under
the procedure under Sub-section (2) is not successful, the arbitral tribunal shall continue the
arbitral proceedings and make an arbitral award. But at that stage, the challenging party has the
right to make an application in the Court to set aside the award in accordance with Section 34 of
the Act.

Sub-section (2) provides that failing any agreement referred to in sub-section (1) of Section 13, a
party who intends to challenge an arbitrator shall, within 15 days after becoming aware of the
constitution of the arbitral tribunal or after becoming aware of any circumstances referred to in
Sub-section (3) of Section 12, send a written statement of the reasons for the challenge to the
arbitral tribunal.

The tribunal shall decide on the challenge unless the arbitrator challenged under sub-section (2)
withdraws from his office or the other party agrees to the challenge. It is also provided that where
an award is set aside on an application made under sub-section (5) of Section 13 of the Act, the
Court may decide as to whether the arbitrator who is challenged is entitled to any fees.

ARBITRAL AWARD

As per Section 2(1)(c), "arbitral award" includes an interim award. The definition does not give
much detail of the ingredients of an arbitral award. However, considering other provisions of
the Act, the following features are noticed:

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ESSENTIALS PREREQUISITE/CONTENTS OF A VALID AWARD

i. An arbitration agreement is required to be in writing.

ii. The arbitral award is required to be made on stamp paper of prescribed value

iii. The award is to be signed by the members of the arbitral tribunal.

iv. The award should contain reasons. However, there are two exceptions where an award
without reasons is valid i.e.

• Where the arbitration agreement expressly provides that no reasons are to be given,
or

• Where the parties settled the dispute and the arbitral tribunal has recorded the
Settlement in the form of an arbitral award on agreed terms.

v. The award should be dated i.e. the date of making of the award should be mentioned in
the award.

vi. The arbitral tribunal is under obligation to state the place of arbitration

vii. After the award is made, a signed copy should be delivered to each party for appropriate
action like implementation or recourse against arbitral award

TIME LIMIT FOR ARBITRAL AWARD

Section 29A (1) provides that the award shall be made within a period of twelve months from
the date the arbitral tribunal enters upon the reference.

Explanation. -For the purpose of this sub-section, an arbitral tribunal shall be deemed to have
entered upon the reference on the date on which the arbitrator or all the arbitrators, as the case
may be, have received notice, in writing, of their appointment.

Section 29A (2) states that if the award is made within a period of six months from the date the
arbitral tribunal enters upon the reference, the arbitral tribunal shall be entitled to receive such
amount of additional fees as the parties may agree.

Under Section 29A (3) the parties may, by consent, extend the period specified in sub-section (1)
for making award for a further period not exceeding six months.

Section 29A(4) states that if the award is not made within the period specified in sub-section (1)
or the extended period specified under sub-section (3), the mandate of the arbitrator(s) shall
terminate unless the Court has, either prior to or after the expiry of the period so specified,
extended the period:

Provided that while extending the period under this subsection, if the Court finds that the
proceedings have been delayed for the reasons attributable to the arbitral tribunal, then, it may
order reduction of fees of arbitrator(s) by not exceeding five per cent for each month of such
delay.

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FAST TRACK PROCEDURE

Section 29B(1) provides that notwithstanding anything contained in this Act, the parties to an
arbitration agreement, may, at any stage either before or at the time of appointment of the arbitral
tribunal, agree in writing to have their dispute resolved by fast track procedure specified in
subsection (3).

Section 29B (2) states that the parties to the arbitration agreement, while agreeing for resolution
of dispute by fast track procedure, may agree that the arbitral tribunal shall consist of a sole
arbitrator who shall be chosen by the parties.

Section 29B (3) says that the arbitral tribunal shall follow the following procedure while
conducting arbitration proceedings under sub-section (1)

• The arbitral tribunal shall decide the dispute on the basis of written pleadings, documents
and submissions filed by the parties without any oral hearing;

• The arbitral tribunal shall have power to call for any further information or clarification
from the parties in addition to the pleadings and documents filed by them

• An oral hearing may be held only, if, all the parties make a request or if the arbitral tribunal
considers it necessary to have oral hearing for clarifying certain issues

• The arbitral tribunal may dispense with any technical formalities, if an oral hearing is held,
and adopt such procedure as deemed appropriate for expeditious disposal of the case.

• Section 29B(4) states that the award under this section shall be made within a period of six
months from the date the arbitral tribunal enters upon the reference.

TERMINATION OF PROCEEDINGS

As per section 32 (1) the arbitral proceedings shall be terminated by the final arbitral award or
by an order of the arbitral tribunal under sub-section (2).
Under section 32 (2) the arbitral tribunal shall issue an order for the termination of the arbitral
proceedings where-

• the claimant withdraws his claim, unless the respondent objects to the order and the
arbitral tribunal recognizes a legitimate interest on his part in, obtaining a final settlement
of the dispute

• the parties agree on the termination of the proceedings,

• the arbitral tribunal finds that the continuation of the proceedings has for any other mason
become unnecessary or impossible.

Section 32(3) says that the mandate of the arbitral tribunal terminates with the termination of the
arbitral proceedings. This is subject to the provisions of Sections 33 and 34(4) of the Act.

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CORRECTION AND INTERPRETATION OF AWARD

Section 33(1) provides that within thirty days from the receipt of the arbitral award, unless
another period of time has been agreed upon by the parties-

• A. a party, with notice to the other party, may request the arbitral tribunal to correct any
computation errors, any clerical or typographical errors or any other errors of a similar
nature occurring in the award

• B. if go agreed by the parties, a party, with notice to the other party, may request the
arbitral tribunal to give an interpretation of a specific point or part of the award.

Further Section 33 (2) states that if the arbitral tribunal considers the request made under sub-
section (1) to be justified, it shall make the correction or give the interpretation within thirty days
from the receipt of the request and the interpretation shall form pan of the arbitral award.

Further Section 33 (3) states that the arbitral tribunal way corrects any error of the type referred
to in clause (a) of sub-section (1), on its own initiative, within thirty days from the date of the
arbitral award.

ADDITIONAL AWARD

Section 33 (4) provides that unless otherwise agreed by the parties, a party with notice to the
other party may request, within thirty days from the receipt of the arbitral award, the arbitral
tribunal to make an additional arbitral award as to claims presented in the arbitral proceedings
but omitted from the arbitral award.

Section 33 (5) provides that if the arbitral tribunal considers the request made under sub-section
(4) to be justified, it shall make the additional arbitral award within sixty days from the receipt
of such request.

Under Section 33 (6) the arbitral tribunal may extend, if necessary, the period of time within
which it shall make a correction, give an interpretation or make an additional arbitral award
under sub-section (2) or sub-section (5).

Section 33 (7) states that section 31 shall apply to a connection or interpretation of the arbitral
award or to an additional arbitral award made under this section.

APPLICATION FOR SETTING ASIDE ARBITRAL AWARD

Section 34(1) provides that recourse to a Court against an arbitral award may be made only by
an application for setting aside such award in accordance with sub-section (2) and subsection (3).

Section 34 (2) states that an arbitral award may be set aside by the Court only if-the party making
the application furnishes proof that-

• A party was under some incapacity

• The arbitration agreement is not valid

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• The party making the application was not given proper notice of the appointment of an
arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

• The arbitral award deals with a dispute not contemplated by or not falling within the terms
of the submission to arbitration,

• The composition of the arbitral tribunal or the arbitral procedure was not in accordance
with the agreement of the parties,

• The subject-matter of the dispute is not capable of settlement by arbitration under the law
for the time being in force, or

• The arbitral award is in conflict with the public policy of India.

GROUNDS ON WHICH AN AWARD IS IN CONFLICT WITH THE PUBLIC POLICY

i. The making of the award was induced or affected by fraud

ii. It is in contravention with the fundamental policy of Indian law; or

iii. It is in conflict with the most basic notions of morality or justice.

Provided that an award shall not be set aside merely on the ground of an erroneous application
of the law or by re appreciation of evidence.

TIME LIMIT FOR SETTING ASIDE ARBITRAL AWARD

Section 34 (3) provides that an application for setting aside may not be made after three months
have elapsed from the date on which the party making that application had received the arbitral
award or, if a request had been made under section 33, from the date on which that request had
been disposed of by the arbitral tribunal:

Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from
making the application within the said period of three months it may entertain the application
within a further period of thirty days, but not thereafter.

Under Section 34 (4) on receipt of an application under sub-section (1), the Court may, where it
is appropriate and it is so requested by a party, adjourn the proceedings for a period of time
determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral
proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the
grounds for setting aside the arbitral award.

As per Section 34 (5) an application under this section shall be filed by a party only after issuing
a prior notice to the other party and such application shall be accompanied by an affidavit by the
applicant endorsing compliance with the said requirement.

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Under Section 34 (6) an application under this section shall be disposed of expeditiously, and in
any event, within a period of one year from the date on which the notice referred to in sub-
section (5) is served upon the other party.

FINALITY OF ARBITRAL AWARDS

Section 35 provides that an arbitral award made under the Act is final and binding on the parties
and persons claiming under them respectively.

ENFORCEMENT

Section 36(1) provides that where the time for making an application to set aside the arbitral
award under section 34 has expired, then, subject to the provisions of sub-section (2), such award
shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908, in the
same manner as if it were a decree of the court.

ARBITRAL TRIBUNAL Section 2(1)(d)

Arbitral tribunal means a sole arbitrator or a panel of arbitrators.

WHEN FOREIGN AWARD BINDING

Section 46 states that any foreign award which would be enforceable under this Chapter shall be
treated as binding for all purposes on the persons as between whom it was made, and may
accordingly be relied on by any of those persons by way of defense, set off or otherwise in any
legal proceedings in India and any references in this Chapter to enforcing a foreign award shall
be construed as including references to relying on an award.

ALTERNATIVE DISPUTE RESOLUTION SYSTEM(APRS)

a. Alternate dispute resolution would include within it any method of dispute resolution
other than court litigation. It would include arbitration, mediation and conciliation in main.

b. There is a growing awareness that courts will not be in a position to bear the entire burden
of justice system.

c. A very large number of disputes lend themselves to resolution by alternative modes such
as arbitration, mediation, conciliation, negotiation, etc.

d. The ADR processes provide procedural flexibility save valuable time and money and avoid
the stress of a conventional trial.

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REGISTRATION OF AWARD

The award which deals with immovable property of the value of Rs. 100 or more requires
registration.

STAMP DUTY ON ARBITRATION AWARD

The stamp duty on the arbitration award passed by an arbitrator is payable as per the provisions
of Indian stamp act, 1899 the rate of stamp duty varies fries from state to state.

[SECTION 10, 11, 12]

As per Section 14, the mandate of an arbitrator shall terminate and he shall be
substituted by' another arbitrator, if
Failure or
a. He becomes de jure or de facto unable to perform his functions, or
Impossibility to
Act as an
b. He fails to act without undue delay due to some other reasons.
Arbitrator
(Section 14) Mandate is also terminated, if he withdraws from his office, or the parties agree
to the. termination of his mandate.

Where the mandate of an arbitrator terminates, a substitute arbitrator shall be

appointee according to the rules that were applicable to such appointment
being replaced.

• Unless otherwise agreed by the parties, where an arbitrator is replaced, any

Substitution of hearings. previously held may be repeated at the discretion of the arbitral
Arbitrator tribunal.

• Unless otherwise agreed by the parties, an order or ruling of the arbitral

tribunal made prior to the replacement of an arbitrator shall not be invalid
solely because there has been a change in the composition of the arbitral
tribunal.

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• The arbitral tribunal shall have power to grant all kinds of interim
measures which the Court is empowered to grant under section 9 of the
Act. Such interim measures can be granted by the arbitral tribunal during
Interim the arbitral proceedings or at any time after making the arbitral award, but
measures before it is enforced under section 36 of the Act.
ordered by
arbitral tribunal • Any order issued by the arbitral tribunal for grant of interim measures shall
be deemed to be an order of the Court for all purposes and shall be
enforceable under the Code of Civil Procedure, 1908 in the same manner as
if it were an order of the Court.

ARBITRAL PROCEEDINGS/ARBITRATION PROCEDURE SECTION 23-27

It is open to parties to agree for holding oral hearings for presentation of evidence and for oral
arguments, or, alternatively, for conducting proceedings on the basis of documents such as
affidavit. In the absence of any such agreement, a decision in this regard may be taken by the
arbitral tribunal.

STATEMENTS OF CLAIMS AND DEFENCE

Within the period of time agreed upon by the parties or determined by the tribunal, the claimant
has to state the facts in supporting his claim, the points at issue and the relief or remedy sought.
Similarly, the respondent shall also state his defense in respect of these particulars.

HEARING AND WRITTEN PROCEEDINGS

The arbitral tribunal shall hold oral hearing for the presentation of evidence or oral arguments
on the day to day basis and shall not grand any adjournments without any sufficient cause.

AMENDMENTS

Parties may amend or supplement these statements during the proceedings, unless

i. Parties have agreed otherwise, or

ii. Arbitral tribunal considers it inappropriate to allow the amendment or supplement, due to
delay in making it.

DETERMINATION OF RULES OF ARBITRAL PROCEDURE

According to Section 19 the arbitral tribunal is neither bound by the Code of Civil Procedure
1908, nor by the Indian Evidence Act, 1872.

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COURT ASSISTANCE IN TAKING EVIDENCE

The arbitral tribunal as well as any party, with the approval of the arbitral tribunal, can apply to
the court for assistance in taking evidence.

Section 29 of the Act provides for decision by majority where there is more than one arbitrator.

APPOINTMENT OF EXPERTS BY ARBITRAL TRIBUNAL

Section 26 of the Act provides for appointment of expert’s subject to agreement between the
parties.

CONCILIATION

• Conciliation is an informal process in which the conciliator (the third

party) tries to bring the disputants to agreement. He does this by
lowering tensions, improving communications, interpreting issues,
Meaning providing technical assistance, exploring potential solutions and
bringing about a negotiated settlement.

• The Act gives a formal recognition to conciliation in India.

• There shall be one conciliator unless the parties agree that there shall be
two or three conciliators.
Number of
Conciliators
• Where there is more than one conciliator, they ought, as a general rule,
to act jointly.

• In conciliation proceedings with one conciliator, the parties may agree

on the name of a sole conciliator;

• In conciliation proceedings with two conciliators, each party may

Appointment of
appoint one conciliator;
Conciliators
• In conciliation proceedings with three conciliators, each party may
appoint one conciliator and the parties may agree on the name of the
third conciliator who shall act as the presiding conciliator.

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• The conciliator shall assist the parties in an independent and impartial
manner in their attempt to reach an amicable settlement of their dispute.

• The conciliator shall be guided by principles of objectivity, fairness and

justice, giving consideration to, among other things, the rights and
obligations of the parties, the usages of the trade concerned and the
circumstances surrounding the dispute, including any previous
business practices between the parties.

Role of • The conciliator may conduct the conciliation proceedings in such a

Conciliator manner as he considers appropriate, taking into account the
circumstances of the case, the wishes the parties may express, including
any request by a party that the conciliator hear oral! statements, and the
need for a speedy settlement of the dispute,

• The conciliator may, at any stage of the conciliation proceedings, make

proposals for a settlement of the dispute. Such proposals need not be in
writing and need not be accompanied by a statement of the reasons
therefore.

TERMINATION OF CONCILIATION PROCEEDINGS

The conciliation proceedings shall be terminated: -

By the signing of the settlement agreement by the parties on the date of the agreement; or

By a written declaration of the conciliator, after consultation with the parties, to the effect that
further efforts at conciliation are no longer justified, on the date of the declaration; or

By a written declaration of the parties addressed to the conciliator to the effect that the
conciliation proceedings are terminated, on the date of the declaration.

ALTERNATIVE DISPUTE RESOLUTION SYSTEM (ADRS)

Alternate dispute resolution would include within it any method of dispute resolution other than
court litigation. It would include arbitration, mediation and conciliation in main.

There is a growing awareness that courts will not be in a position to bear the entire burden of
justice system. A very large number of disputes lend themselves to resolution by alternative
modes such as arbitration, mediation, conciliation, negotiation, etc. The ADR processes provide
procedural flexibility save valuable time and money and avoid the stress of a conventional trial.

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14 INDIAN STAMP ACT, 1899

INTRODUCTION

The Indian Stamp Act, 1899 is the law relating to stamps which consolidates and amends the law
relating to stamp duty. It is a fiscal legislation envisaging levy of stamp duty on certain
instruments. The Act is divided into eight Chapters and there is a schedule which contains the
rates of stamp duties on various instruments.

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IMPORTANT DEFINITIONS

Section 2 of the Act contains definitions of various terms used in the Act. Some important
definitions are discussed below:

1. Banker

“Banker” includes a bank and any person acting as a banker [Section 3 of the Negotiable
Instruments Act defines a banker as including persons or a corporation or company acting
as bankers]. [Section 2(1)]

2. Bill of Lading

“Bill of Lading” includes a ‘through bill lading' but does not include a mate's receipt.
[Section 2(4)]

A bill of lading is a receipt by the master of a ship for goods delivered to him for delivery
to X or his assigns. Three copies are made, each signed by the master. One is kept by the
consignor of the goods, one by the master of the ship and one is forwarded to X, the
consignee, who, on receipt of it, acquires property in the goods. It is a written evidence of
a contract for the carriage and delivery of goods by sea, for certain freight.

3. Conveyance

The term “conveyance” includes a conveyance on sale and every instrument by which
property (whether movable or immovable) is transferred inter vivo and which is not
otherwise specifically provided for by Schedule. It does not include a will. [Section 2(10)]

4. Instrument

Section 2(14) defines an “instrument” to include every document by which any right or
liability is, or purports to be, created, transferred, limited, extended, extinguished or
recorded. The definition is an inclusive definition, and is not necessarily restricted to those
documents which are specifically mentioned in the definition. Briefly stated, an instrument
includes conveyances, leases, mortgages, promissory notes and wills, but not ordinary
letters or memoranda or accounts.

Following instances may be noted:

i. An unsigned draft document is not an “instrument” (because it does not create or

purport to create any right, etc.).

ii. An entry in a register, containing the terms of hiring of machinery is an “instrument”,

where it is authenticated by the thumb impression of the hirer. (Reason is, that it
purports to create, a liability etc.)

iii. A letter which acknowledges receipt of a certain sum as having been borrowed at a
particular rate of interest and for a particular period and that it will be repaid with
interest on the due date is an “instrument”.

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These examples show, that the law looks to the substance and effect (or intended
effect) of the text of the instrument and not the physical medium through which it is
recorded.

iv. Photocopy of an agreement is not an instrument as defined under Section 2(14) of the
Act. Ashok Kalam Capital Builders v. State & Amr., AIR 2010 (NOC) 736 (Del).

5. Executed / Execution

Under Section 1(12), the words “executed” and “execution” (used with reference to
instruments), mean “signed” and “signature” respectively.

Signature includes mark by an illiterate person. [Section 3(52), General Clauses Act, 1897]

An instrument which is chargeable with stamp duty only on being “executed” is not liable
to stamp duty until it is signed.

The Collector can receive the stamp duty without penalty and certify an instrument as duly
stamped, as from the date of execution. (Sections 37 and 40) according to Section 2(13),
“impressed stamp” includes:

a. labels affixed and impressed by the proper officer;

b. stamps embossed or engraved on stamp paper.

The instrument is duly stamped if it has been duly stamped at the time of execution
and is admissible in evidence, though the stamp is subsequently removed or lost (Mt.
Mewa Kunwari v. Bourey, AIR 1934 All. 388).

6. Bill of exchange

According to Section 2(2), “bill of exchange” means a bill of exchange as defined in the
Negotiable Instruments Act, 1881 and includes also a Hundi and any other document
entitling or purporting to entitle any person, whether named therein or not, to payment by
any other person of, or to draw upon any other person for, any sum of money. The
Negotiable Instruments Act, defines a “bill of exchange” as an instrument in writing,
containing an unconditional order signed by the maker, directing a certain person to pay a
certain sum of money only to, or to the order of, a certain person or to the bearer of the
instrument.

7. Bill of exchange payable on demand

Under Section 2(3) of the Stamp Act, a “bill of exchange on demand” includes:

a. an order for the payment of any sum of money by a bill of exchange or promissory
note or for the delivery of any bill of exchange or promissory note in satisfaction of
any sum of money, or in the payment of any sum of money out of any particular fund

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which may or may not be available, or upon any condition or contingency which may
or may not be performed or happen;

b. an order for the payment of any sum of money weekly, monthly or at any other said
period; and

c. a letter of credit, that is to say, any instrument by which one-person authorises any
other person to give credit to the person in whose favour it is drawn. It may be noted
that a bill of exchange payable on demand includes even a letter of credit, as per
above definition.

Thus, the definition in the Stamp Act includes many instruments which could not be classed as
‘bills of exchange' within the definition given by the Negotiable Instruments Act, 1881.

8. Cheque

Under Section 2(7) of the Stamp Act, “cheque” means a bill of exchange drawn on specified
banker, not expressed to be payable otherwise than on demand. This definition follows the
definition given in the Negotiable Instruments Act, 1881.

It should be mentioned that in India, cheques are no longer subject to stamp duty. Entry 21
in the Schedule levying duty on cheque was deleted by Act 5 of 1927.

9. Bond

Under Section 2(5), a “bond” includes -

a. any instrument whereby a person obliges himself to pay money to another on

condition that the obligation shall be void if a specified act is performed, or is not
performed, as the case may be;

b. any instrument attested by a witness not payable to order or bearer, whereby a

person obliges himself to pay money to another; and

c. any instrument so attested, whereby a person obliges himself to deliver grain or other
agricultural produce to another.

The word “oblige” has been used in all sub-clauses in the definition. Therefore, no
document can be a bond unless it is one which, by itself, creates the obligation to pay
the money. The words “obliges himself to pay money” make it very clear, that the
obligation is not a pre-existing one. Where the liability already exists, it cannot be
said that under a subsequent document (merely reproducing the nature of the
obligation) an obligation has been created.

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10. Chargeable

Under Section 2(6) “chargeable” as applied to an instrument executed or first executed after
the commencement of the Act means chargeable under the Act and as applied to any other
instrument, chargeable under the law in force in India when such instrument was executed
or where several persons executed the instrument at different times, first executed.

11. Lease

“Lease” means a lease of immovable property and includes also:

a. a patta;

b. a kabuliyat or other undertaking in writing, not being a counterpart of a lease to

cultivate, occupy or pay or deliver rent for, immovable property;

c. any instrument by which tolls of any description are let;

d. any writing on an application for a lease intended to signify that the application is
granted. [Section 2(16)]

Section 105 of the Transfer of Property Act defines lease as a transfer of a right to enjoy
such property, made for a certain time, expressed or implied, or in perpetuity, in
consideration of a price paid or promised, or of money, a share of crops, service or any
other thing of value to be rendered periodically or on specified occasions to the transferor
by the transferee, who accepts the transfer on such terms.

- A patta is an instrument given by the Collector of District or any other receiver of the
revenue, to the cultivator, specifying the condition or conditions upon which the
lands are to be held and the value or proportion of the produce to be paid therefor.

- A Kabuliyat is executed by the lessee, accepting the terms of the lease and
undertaking to abide by them. Although, it is not a lease under Section 105 of the
Transfer of Property Act, it is expressly included in the definition for the purposes of
the Stamp Act.

- Toll is a tax paid for some liberty or privilege, such as for passage over a bridge, ferry,
along a highway or for the sale of articles in a market or fair or the like. It does not
include ‘octroi’ or ‘chungi.

12. Promissory Note

It means a promissory note as defined by the Negotiable Instruments Act, 1881. It also
includes a note promising the payment of any sum of money out of a particular fund which
may or may not be available, or upon any condition or contingency which may or may not
be performed or happen. [Section 2(22)]

Requisites of a promissory note as per the Negotiable Instruments Act, 1881 are the
following:

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a. the document must contain an unconditional undertaking to pay;

b. the undertaking must be to pay money only;

c. the money to be paid must be certain;

d. it must be payable to or to the order of a certain person or to bearer;

e. the document must be signed by the maker.

Illustrations
An instrument in the form:

“I do acknowledge myself to be indebted to B in Rs.1,000 to be paid on demand for value

received” is a promissory note.

“I have received a sum of £20 which I borrowed from you and I have to be accountable for the
sum with interest” held not to be a promissory note.

“On demand I promise to pay to the trustees of W&C or their treasurer for the time being £100”
was held a good promissory note.

13. Receipt
“Receipt” includes any note, memorandum or writing:

a. whereby any money or any bill of exchange, cheque or promissory note is

acknowledged to have been received; or

b. whereby any other movable property is acknowledged to have been received in

satisfaction of a debt; or

c. whereby any debt or demand, or any part of a debt or demand is acknowledged to

have been satisfied or discharged; or

d. which signifies or imports any such acknowledgement, and whether the same is or
is not signed with the name of any person. [Section 2(23)]

A mere acknowledgement in writing of the receipt of immovable property will not attract
sub- clause (b). Under sub-clause (c), any acknowledgement in satisfaction or discharge of
any debt or demand or any part thereof is covered; for instance, a receipt given by the
secretary or other manager of a club acknowledging payment of the club dues comes within
the sub-clause. An ordinary cash memo issued by a shopkeeper or another person selling
the goods or other merchandise is not a receipt, unless it contains an acknowledgement of
receipt of the money. A letter acknowledging the receipt of money or cheque is a receipt.
A document merely saying that the signatory has received a sum of Rs. 500 is a receipt.

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14. Settlement

“Settlement” means any non-testamentary disposition, in writing, of movable or

immovable property made:

a. in consideration of marriage;

b. for the purpose of distributing property of the settler among his family or those for
whom he desires to provide, or for the purpose of providing for some person
dependent on him; or

c. for any religious or charitable purpose; and includes an agreement in writing to make
such disposition. [Section 2(24)]

The definition of “settlement” excludes a will. A will is intended to operate only on death,
while a settlement operates immediately.

15. Marketable Security

Under Section 2(16A), “marketable security” means a security of such a description as to

be capable of being sold in stock market in India or in the United Kingdom.

16. Stamp

“Stamp” means any mark, seal or endorsement by any agency or person duly authorised
by the State Government and includes an adhesive or impressed stamp for the purposes of
duty chargeable under this Act. This definition of the stamp has been inserted by the
Finance (No. 2) Act, 2004.

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INSTRUMENTS CHARGEABLE WITH DUTY

Section 3 of the Act is the charging section. It provides that subject to the provisions of the Act
and the exemptions contained in Schedule I, the following instruments shall be chargeable with
a duty of the amount indicated in that Schedule as the proper duty therefor, namely:

However, no duty shall be chargeable in respect of:

▪ any instrument executed by or on behalf of or in favour of the Government, in cases where,

but for this the Government would be liable to pay the duty chargeable in respect of such
instrument.

▪ any instrument for the sale, transfer or disposition, either absolutely or by way of mortgage
or otherwise, of any ship or vessel or any part, interest, share of property of or in any ship
or vessel registered under the Merchant Shipping Act, 1894 or under Act XIX of 1838 or the
Indian Registration of Ships Act, 1841 as amended by subsequent Acts.
[The references to repealed Acts are now to be read as references to the corresponding re-
enacting Act].

▪ Any instrument executed by, or, on behalf of, or in favour of, the Developer or Unit or in
connection with the carrying out of purposes of the special Economic Zone.

Explanation - For the purposes of this clause, the expressions “Developer” “Special Economic
Zone” and “Unit” shall have meanings respectively assigned to them in Clauses (g), (za)
and (zc) of Section 2 of the Special Economic Zones Act, 2005.

Thus, Section 3 charges certain instruments to be liable to stamp duty.

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The Court has observed as under in Commissioners of Inland Revenue v. G. Angus, 1889 23 QBD
579, followed in re Swadeshi Cotton Mills, AIR 1932 All 291, “the first thing to be noticed
is that thing which is made liable to duty is an instrument. If a contract of purchase and
sale or a conveyance by way of purchase and sale, can be, or is carried out without an
instrument the case is not within the section and no tax is imposed. It is not the transaction
of purchase and sale which is struck at; it is the instrument whereby the purchase and sale
are affected which is struck at. And if any one carries through a purchase and sale without
an instrument, then the Legislature has not reached that transaction”.

SUBSTANCE AND DESCRIPTION

Courts have invariably upheld the principle of substance of the transaction, over the form, in the
matter of deciding the nature of the instrument. The substance of the transaction contained in the
document may not necessarily embody the description given at the head thereof.

It is the substance of the transaction as contained in the instrument and not the form of the
instrument that determines the stamp duty, though the duty is leviable on the instrument and
not on the transaction. In determining whether a document comes within the description of a
document upon which a stamp is required by the Act, one has to look at the entire document to
find out whether it falls within the description. Where a single instrument contains several
purposes, the instrument as a whole should be read to find out its dominant purpose. To
determine whether a document is sufficiently stamped the Court must look at the document
itself, as it stands.

EXTENT OF LIABILITY OF INSTRUMENTS TO DUTY (SEVERAL INSTRUMENTS IN

SINGLE TRANSACTION OF SALE, MORTGAGE OR SETTLEMENT)

Section 4 provides that, where in the case of any sale, mortgage or settlement, several instruments
are employed for completing the transaction –

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Illustrations (Section 4 held applicable)

Each of the other installments shall be chargeable with a duty of one rupee Instead of the duty if
any prescribed for the other instruments.

i. A executed a conveyance of immovable property. On the same deed his nephew

(undivided in status) endorsed his consent to the sale, as such consent was
considered to be necessary. It was held that the conveyance was the principal
instrument. The consent was chargeable with only one rupee (ILR 13 Bom 281).

ii. Subsequent to a sale of immovable property, two declarations were executed reciting
that the sale was subject to an equitable mortgage created by the vendor. These
declarations were held to be chargeable, together with the sale deed, as having
completed the conveyance (Somaiya Organics Ltd. v. Chief Controlling Revenue
Authority, AIR 1972 All 252).

iii. Brother A executed in favour of brother B a gift of all his property. By another deed,
brother B made provision for the living expenses of brother A and hypothecating in
favour of brother A part of the property included in the above-mentioned gift deed,
in order to secure the payment of the living expenses. It was held that the two
documents were part of the same transaction. They amounted to a settlement and
Section 4 applied (Maharaj Someshar Dutt, ILR 37 All 264).

iv. B conveyed the whole of his property to three persons who undertook to provide for
him and to perform his obsequies. By another document, the three donees agreed to
provide for B. This was mentioned in the deed executed by A also. It was held that
the two documents had to be construed as part of the same act; the first was liable to
duty as a conveyance while the second was liable to a duty of Rupee 1 only (Dadoba
v. Krishna, ILR 7 Bom. 34).

v. A company executed, first a deed of trust and mortgage stating that the company
was to issue notes for raising loans secured by the sale deed. It was held as under:

• The deed was principal or primary security (and not a collateral security). It
was chargeable as mortgage under Article 14.

• The notes issued subsequently were debentures and not principal instruments
(Madras Refinery Ltd. v. Chief Controlling Revenue Authority, Madras, AIR
1977 SC 500).

vi. The Rangoon Gymkhana executed a duly stamped trust deed, mortgaging its assets
as security for the repayment of the debenture stock issued by it. In addition, it had
issued certificates of debenture stock to the subscribers, but these did not contain any
promise to repay any need, but merely stated the amount standing in each shock
holder's name. It was held that the certificates were not debentures, but were
instruments employed to complete the mortgage [Rangoon Gymkhana In re, AIR
1927 Rang. 37 (Section 4 applied)].

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Section 4 not applicable

i. A lease is executed and got registered. A second document is executed altering the terms
of the first document. The second document has to be stamped as a lease. Section 4 does
not apply.

ii. A purchaser of land executes a mortgage of the land in favour of the vendor for a portion
of the purchase money. The mortgage is liable to full duty as a separate instrument. Section
4 does not apply.

INSTRUMENTS RELATING TO SEVERAL DISTINCT MATTERS

Under Section 5, an instrument comprising or relating to several distinct matters is chargeable

with the aggregate amount of the duties with which each separate instrument, relating to one of
such matters, would be chargeable under the Act (This is the reverse of the situation governed
by Section 4).

The Section deals with multifarious instruments. The expression “distinct matter” means distinct
transactions (Ram Swarup v. Joti, (1933) Allahabad Law Journal 427; Board of Revenue, Madras
v. Narasimhan, AIR 1961 Mad 504).

Section 5 applies even where the two (or more) matters are of the same description.

Illustrations as to “distinct matters”

i. A document containing both an agreement for the dissolution of a partnership and a bond,
is chargeable with the aggregate of the duties with which two such separate instruments
would be chargeable. The two are “distinct matters” (Chinmoyee Basu v. Sankare Prasad
Singh, AIR 1955 Cal. 561 (cf. AIR 1936 Lah. 449).

ii. An agreement containing two covenants making certain properties chargeable in the first
instance and creating a charge over certain properties if the first mentioned properties are
found insufficient does not fall within Section 5 (Tek Ram v. Maqbul Shah, AIR 1928 Lah.
370).

iii. A grant of annuity by several persons requires only one stamp (because there is only one
transaction).

iv. A lease to joint tenants requires only one stamp.

v. A conveyance by several persons jointly relating to their separate interest in certain shares
in an incorporated company requires only one stamp.

vi. A power of attorney executed by several persons authorising the agent to do similar acts
for them in relation to different subject matter is chargeable under Section 5, where they
have no common interest.

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vii. Where a person having a representative capacity (as a trustee) and a personal capacity
delegates his powers in both the capacities, section 5 applies. In law, a person acting as a
trustee is a different entity from the same person acting in his personal capacity.

viii. The position is the same where a person is an executive or administrator and signs an
instrument containing a disposition by him in his personal capacity and also a disposition
as executor. The two capacities are different (Member, Board of Revenue v. Archur Paul
Benthall, AIR 1956 SC 35).

PRINCIPAL AND ANCILLARY

The test is - “What is the leading object? Which is principal and which is ancillary?

If an instrument taken with reference to its primary object is exempted then stamp duty cannot
be charged merely because matter ancillary to it is included and that matter is chargeable to
stamp duty. A very common example of this is an agreement for sale of goods, which also
contains an arbitration clause. The latter clause is incidental to the former agreement. Where a
deed of dissolution of partnership contains a clause charging the partnership assets for payment
of certain amounts to outgoing parties, the instrument is chargeable separately for the charge
and the partnership. The former is not ancillary to the latter.

Where a document contains a transfer of mortgage and an agreement to make a loan, the
mortgage and the loan are distinct matters and separately chargeable.

If in a lease there is also an agreement to pay a certain sum on account of the balance of previous
year, the document is chargeable (i) as a lease and (ii) also as a bond.

A lease reserving separately rent for house and rent for furniture is chargeable separately for
each of the items.

Where, at an auction, a purchaser purchases several lots and there is only one instrument in
respect of all of them the separate purchases are, nevertheless, separate and distinct matters and
so, the stamp duty must be determined separately.

Thus, the test usually adopted is the test of “leading object”. If there is only one leading object,
Section 5 will not apply. But if there are several distinct contracts, each is taxable.

BONDS, DEBENTURES, ETC. ISSUED UNDER THE LOCAL AUTHORITIES LOAN ACT,
1879

Section 8 provides that any local authority raising a loan under the provisions of the Local
Authorities Loans Act, 1879 or of any other law for the time being in force by the issue of bonds,
debentures or other securities, shall, in respect of such loans, be chargeable with a duty of one
percent on the total amount of the bonds, debentures or other securities issued by it. Such bonds,
debentures or other securities need not be stamped and shall not be chargeable with any further
duty on renewal, consolidation, sub-division or otherwise. This is so notwithstanding anything
contained in the Indian Stamp Act: In the event of willful neglect to pay the duty required by this
section, the local authority shall be liable to forfeit to the Government, a sum equal to 10 percent

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of the amount of duty payable and a like penalty for every month after the first, during which
the neglect continues.

SECURITIES DEALT IN DEPOSITORY NOT LIABLE TO STAMP DUTY

As per Section 8A of the Act—

a. an issuer, by the issue of securities to one or more depositories shall, in respect of such
issue, be chargeable with duty on the total amount of security issued by it and such
securities need not be stamped;

b. where an issuer issues certificate of security under sub-section (3) of Section 14 of the
Depositories Act, 1996, on such certificate duty shall be payable as is payable on the issue
of duplicate certificate under this Act;

c. the transfer of—

i. registered ownership of securities from a person to a depository or from a depository

to a beneficial owner;

ii. beneficial ownership of securities, dealt with by a depository;

iii. beneficial ownership of units, such units being units of a Mutual Fund including
units of the Unit Trust of India established under sub-section (1) of Section 3 of the
Unit Trust of India Act, 1963, dealt with by a depository, shall not be liable to duty
under this Act or any other law for the time being in force.

Explanation 1 - For the purposes of this section, the expressions “beneficial ownership”,
“depository” and “issuer” shall have the meanings respectively assigned to them in clauses (a),
(e) and (f) of Sub-section (1) of Section 2 of the Depositories Act, 1996.

Explanation 2- For the purposes of this section, the expression “securities” shall have the
meaning assigned to it in clause (h) of Section 2 of the Securities Contracts (Regulation) Act, 1956.

CORPORATISATION AND DEMUTUALISATION SCHEMES AND RELATED

INSTRUMENTS NOT LIABLE TO DUTY

Section 8B has been inserted by the Finance Act, 2005, w.e.f. 13.5.2005. Section 8B states that

a. a scheme for corporatization or demutualization, or both of a recognized stock exchange;

or

b. any instrument, including an instrument of, or relating to, transfer of any property,
business, asset whether movable or immovable, contract, right, liability and obligation, for
the purpose of, or in connection with, the corporatization or demutualization, or both of a
recognized stock exchange pursuant to a scheme, as approved by the Securities and
Exchange Board of India under Sub-section (2) of Section 4B of the Securities Contracts
(Regulation) Act, 1956 shall not be liable to duty under this Act or any other law for the
time being in force.

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Explanation — For the purposes of this Section—

a. the expressions “corporatization”, “demutualization” and “scheme” shall have the

meanings respectively assigned to them in clauses (aa), (ab) and (ga) of Section 2 of the
Securities Contracts (Regulation) Act, 1956;

b. “Securities and Exchange Board of India” means the Securities and Exchange Board of
India established under Section 3 of the Securities and Exchange Board of India Act, 1992.

REDUCTION, REMISSION AND COMPOUNDING OF DUTIES

Section 9 empowers the Government, (Central or the State as the case may be), to reduce or remit,
whether prospectively, or retrospectively, the duties payable on any instrument or class of
instruments or in favour of particular class of persons or members of such class. Section 9 also
empowers the Central Government to provide for the composition or consolidation of duties of
policies of insurance and in the case of issues by any incorporated company or other body
corporate or of transfers where there is single transferee (whether incorporated or not) of
debentures, bonds or other marketable securities.

VALUATION FOR DUTY UNDER THE ACT

Sections 20 to 28 (Chapter II of the Act) deal with valuation of instruments for duty.

a. According to Section 20, where an instrument is chargeable with ad valorem duty in respect
of any money expressed in any currency other than that of India, such duty shall be
calculated on the value of such money in the currency of India, according to the current
rate of exchange on the date of the instrument. The Central Government notifies from time
to time, in the Official Gazette the rate of exchange for conversion of certain foreign
currencies into Indian currency for this purpose and such rate shall be deemed to be the
current rate.

b. Section 21 provides that in the case of an instrument chargeable with ad valorem duty in
respect of any stock or any marketable or other security, such duty shall be calculated on
the value of such stock or security according to the average price or the value thereof on
the date of the instrument. The term “marketable security” has been defined in Section
2(16-A) of the Act.

Where the shares are quoted on the stock exchange, it is easy to ascertain the price of the shares
or stock. However, where the shares or stocks are not quoted on any stock exchange, the
valuation has to be based upon the average of the latest private transactions, which can
generally be ascertained from the principal officer of the concerned company or
corporation. If, there have been no dealings at all, then unless some other reliable evidence
of market value is forthcoming the value is to be taken at par. Section 22 of the Act,
however, provides that if such price or value is mentioned in the instrument for the
purpose of calculating duty, it shall be presumed (until the contrary is proved) to be correct.

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c. Section 23 provides that where interest is expressly made payable by the terms of the
instrument, such instrument shall not be chargeable with a duty higher than that with
which it would have been chargeable, had no mention of interest been made therein. For
instance, a promissory note for Rs.10,000 is drawn with the recital of interest at the rate of
18 percent per annum, payable by the promissor; stamp is leviable on the basis that the
instrument is for Rs. 10,000 only.

d. Section 23A provides that in the case of an instrument (not being a promissory note or bill
of exchange) which -

i. is given upon the occasion of the deposit of any marketable security by way of
security for money advanced or to be advanced by way of loan, or for an existing or
future debt, or

ii. makes redeemable or qualifies a duly stamped transfer, intended as a security, of any
marketable security. It shall be chargeable with duty as if it were an agreement or
memorandum of an agreement, chargeable with duty under Article 5(c) of Schedule
I to the Act.

iii. A release or discharge of any such instrument shall be chargeable only with the like
duty.

iv. According to Section 24, where any property is transferred to any person in
consideration (wholly or in part) of any debt due to him, or subject either certainly or
contingently to the payment or transfer of any money or stock, (whether being or
constituting a charge or encumbrance upon the property or not), such debt, money
or stock is to be deemed the whole or part, (as the case may be), of the consideration
in respect whereof the transfer is chargeable with ad valorem duty. However,
nothing in this section shall affect such a certificate of sale as is mentioned in Article
18 of the First Schedule to the Act.

The object of this section is that, upon every purchase ad valorem duty has to be paid
on the entire consideration which either directly or indirectly represents the value of
the free and unencumbered corpus of the subject matter of the sale (Collector of
Ahmedabad v. Deepak Textile Industries, AIR 1966 Guj. 227).

What Section 24 means is that where property is sold subject to the payment by the
purchaser, discharging a debt charged on the property, then the purchaser is really
paying a consideration which includes the amount of that debt also (Somayya
Organics Ltd. v. Board of Revenue, AIR 1986 SC 403)

Proviso to Section 24 operates for the benefit of assignee of the mortgage.

When the mortgaged property is sold to the mortgagee along with other properties, the stamp
duty already paid is to be deducted from the duty payable on the deed of sale. In order to entitle
the mortgagee to a deduction of the duties payable the entire property mortgaged should be
transferred and not merely a portion of it (In re Mirabai, in re Laxman and Ganpat, ILR 29 Bom.
203).

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Explanation to Section 24 provides that in the case of sale of property subject to mortgage or other
encumbrances, any unpaid mortgage money or money charged together with the interest, if any,
due on the same shall be deemed to be part of the consideration for the sale provided that where
property subject to a mortgage is transferred to the mortgagee he shall be entitled to deduct from
the duty payable on the transfer the amount of any duty already paid in respect of the mortgage.
Three illustrations which have been appended to the Section are as under:

i. A owes B Rs. 1,000/-. A sell a property to B, the consideration being Rs. 500/- and
the release of the previous debt of Rs. 1,000/-. Stamp duty is payable on Rs. 1,500/-

ii. A sells a property to B for Rs. 500 which is subject to a mortgage to C for Rs. 1,000/-
and unpaid interest Rs. 200/-. Stamp duty is payable on 1,700.

iii. A mortgages a house of the value of Rs. 10,000/- to B for Rs. 5,000/-. B afterwards
buys the house from A. Stamp duty is payable on Rs. 10,000/- less the amount of
stamp duty already paid for the mortgage.

e. Section 25 deals with the manner of computation of duty in the case of annuities. Valuation
of an annuity will be material, where the payment of annuity or other sum payable
periodically is secured by an instrument or where the consideration for a conveyance is an
annuity or other sum payable periodically. In such cases, the amount secured by such
instrument or the consideration for such conveyance, as the case may be, shall be deemed
to be:

i. where the sum payable is for a definite period so that the total amount to be paid can
be previously ascertained such total amount;

ii. the sum is payable in perpetuity or for an indefinite time not terminable with any
life in being at the date of such instrument or conveyance - the total amount which,
according to the terms of such instrument or conveyance will or may be payable
during the period of twenty years calculated from the date on which the first
payment becomes due, and

iii. where the sum is payable for an indefinite time terminable with any life in being at
the date of such instrument or conveyance - the maximum amount which will be or
which may be payable as aforesaid during the period of 12 years calculated from the
date on which the first payment becomes due.

Clause (a) mentioned above applies where the sum is payable for a definite period, so that the
total amount to be paid can be previously ascertained. According to clause (b), where the
payment is in perpetuity or for an indefinite period, then only the amount payable for 20 years
would be taken for assessment of the duty.

Illustration

By a document, ‘A' binds himself and his posterity on the security of some immovable property
for the annual payment to a temple of Rs. 2,200/-. It is a mortgage deed, chargeable with duty
calculated on 20 years' payment.

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f. Section 26 deals with cases where the value of the subject matter is indeterminate. The
object of this section is to protect the revenue, in cases where an instrument is chargeable
with ad valorem duty, but such duty cannot be ascertained by reason of the fact that the
amount of value of the subject matter of the instrument cannot be determined at the time
of the execution of the instrument. This object is sought to be achieved by providing, that
the executant can value the instrument as he pleases, but he shall not be entitled to recover
under such document any amount in excess of the amount for which the stamp duty is
sufficient.

However, under the combined operation of Sections 26 and 35, a lessee under the mining
lease is entitled, upon payment of the proper penalty, to recover the royalty provided for in
the stamp originally affixed to the lease. [AIR 1924 PC 221; AIR 1930 Cal. 526]. Section 26
applies only when the instrument is chargeable with ad valorem duty. Section 26 has two
provisos. Under the first proviso, in the case of mining lease, the stamp duty is to be
calculated on the estimated value of the royalty or the share of the produce, as the case may
be. If the lease is granted by the Government, stamp duty has to be paid on the amount or
value of the royalty as determined by the Collector of Stamps. And, if subsequently any
excess is claimed, proper penalty under section 35 may be paid and the claim fully recovered.
But when the lease has been granted by a person other than the Government, the valuation
has to be at Rs. 20,000/- a year.

The second proviso to Section 26 is intended to cover the case where an instrument has, by
accident or mistake, been insufficiently stamped. The deficiency is made up in proceedings
under Section 31 or 41 and the Collector having certified the amount paid, it shall be deemed
to be the stamp actually used at the date of execution. By reason of this proviso, the amount
claimable under the instruments would be the amount for which the duty as certified by the
Collector had been paid and not the amount for which duty was originally paid.

CONSIDERATION TO BE SET OUT

Section 27 provides that the consideration and all other facts and circumstances affecting the
chargeability of any instrument with duty or the amount of duty with which it is chargeable shall
be fully and truly set forth in the instrument. “Value of any property” would mean that real value
of the property in the open market at the time the document was executed and not at the time
when the executant acquired it. Where there is no value set forth in the instruments, there would
be contravention of Section 27, but the omission does not render the document inadmissible or
liable to be impounded and taxed in the manner provided in Section 35 (Vinayak v. Hasan Ali,
AIR 1961 MP 6).

The Collector cannot proceed to ascertain the value of the property with a view to causing the
instrument to be stamped with reference to the value so ascertained by the Collector. The Act
does not provide for any powers to the revenue authority to make an independent enquiry into
the value of the property conveyed for determining the duty chargeable. (In Re. Muhammad
Muzaffar Ali AIR 1922 All 82)

However, the Collector can direct the prosecution of a person who executed the instrument
under Section 64 of the Act. Under Section 64, what is punishable is the omission to set-forth fully

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and truly the value of the property, with intent to defraud the Government. The Collector, can,
if he feels that there is a deliberate under-valuation of property, hold an independent enquiry to
ascertain the true value of the property and to consider whether there was deliberate under-
valuation rendering the executant liable to prosecution for defrauding the Government.

APPORTIONMENT

Section 28 prescribes certain rules for apportionment of the consideration, in cases of certain
conveyances arising out of a property being contracted to be sold and thereafter conveyed in
parts etc.

Under Section 28(1) where a person contracts the sale of property as a whole and thereafter
conveys to the purchaser the property in separate parts, the consideration shall be apportioned
in such manner as the parties think fit, provided that a distinct consideration is set-forth for each
separate part in the conveyance and thereafter the conveyances shall be chargeable with ad
valorem in respect of such distinct consideration.

Under Section 28(2), where the contract is for the sale of a property as a whole to two or more
purchasers jointly or by any person for himself and others, and the property is conveyed to them
in parts by separate conveyance, then each distinct part of the consideration shall be chargeable
with ad valorem duty in respect of the distinct part of the consideration so specified.

Section 28(3) covers cases where a person, after contracting to purchase a property from another
and before the property has been duly conveyed to him, enters into a contract to sell the property
to a third person, and the contract is given effect to only by one conveyance from the owner of
the property to the sub purchaser directly. The stamp duty payable is on the consideration paid
by the sub-purchaser. This provision avoids double payment that would otherwise arise.

Section 28(4) provides that where a person contracts for the sale of property and before obtaining
a conveyance in his favour, enters into a contract to sell the property in parts to other persons,
the

In some States, local amendments have given such powers to the collector.

Conveyances which may be executed directly by the owner to each sub-purchaser would be
liable to be charged with duty in respect of the consideration paid by the sub-purchaser, original
price for the whole and the aggregate price paid by the sub-purchasers, subject to a minimum
duty of Re. 1/-.

Section 28(5) provides that when a person contracts to sell a property to another person and again
contracts to sell the same property to a third person and such third person obtains a conveyance
first from the seller with whom he had contracted and later gets another conveyance of the same
property from original seller, the duty is to be charged on the consideration received by the
original seller subject to a maximum of Rs. 5/-.

PERSONS LIABLE TO PAY DUTY

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Section 29 deals with the persons responsible for payment of duty. Under this section, in the
absence of an agreement to the contrary, the expense of providing the proper stamp shall be
borne:

a. in the case of any instrument described in any of the following articles of Schedule-I

b. in the case of a policy of insurance other than fire insurance by the person effecting the
insurance;

c. in the case of a policy of fire-insurance - by the person issuing the policy;

d. in the case of a conveyance including a reconveyance of mortgaged property by the

grantee; in the case of a lease or agreement to lease by the lessee or intended lessee;

e. in the case of a counterpart of a lease - by the lessor;

f. in the case of an instrument of exchange - by the parties in equal shares;

g. in the case of a certificate of sale - by the purchaser of the property to which such certificate
relates; and

h. in the case of an instrument of partition - by the parties thereto in proportion to their

respective shares in the whole property partitioned, or, when the partition is made in
execution of an order passed by a Revenue Authority or Civil Court or arbitrator, in such
proportion as such authority, Court or arbitrator directs.

RECEIPTS

Under Section 30 of the Act any person receiving any money exceeding twenty rupees in amount
or any bill of exchange, cheque or promissory note for an amount exceeding five hundred rupees
or receiving in satisfaction of a debt any movable property exceeding five hundred rupees in
value, shall on demand by the person paying or delivering such money, bill, cheque, note, or
property, give a duly stamped receipt for the same.

PARTY LIABLE TO PAY

Section 29 specifies in the case of certain instruments which party should pay, for the stamp. The
section is not exhaustive and makes no reference to several instruments. Section 30 contains a
special provision as to stamping of receipts. There are several other instruments not mentioned
in Section 29, for which there is no express provision as to who should bear the stamp expenses.
The primary duty of stamping lies in all cases on the person executing the instrument as Section
17 directs that the instruments chargeable with duty shall be stamped at or before executing an
instrument without the same being duly stamped. Section 29 would apply only in the absence of
a special agreement between the parties as stated in the opening words of the section. An
agreement to bear the cost of preparation of an instrument implies an agreement to pay stamp
duty also on it.

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Any person receiving or taking credit for any premium or consideration for any renewal of any
contract of fire- insurance, shall, within one month after receiving or taking credit for such
premium or consideration, give a duly stamped receipt for the same.

METHODS OF STAMPING

a. According to the provisions of the Act and rules made thereunder, the duty with which an
instrument is chargeable is to be paid by means of stamps indicated in the Act and the
rules. Generally, rules deal with the subject.

Section 10 provides that all duties with which any instrument is chargeable shall be paid,
and such payment shall be indicated on such instrument, by means of stamps according to
the provisions contained in the Act, or when no such provision is applicable thereto, as the
State Government concerned may by rule, direct. The rules may, among other matters,
regulate:

i. in the case of each kind of instrument, the description of stamps which may be used;

ii. in the case of instruments stamped with impressed stamps, the number of stamps
which may be used;

iii. in the case of bills of exchange or promissory notes, the size of the paper on which
they are written.

b. There are two types of stamping, namely:

USE OF ADHESIVE STAMPS

Section 11 deals with the use of adhesive stamps. This Section provides that the following
instruments may be stamped with adhesive stamps, namely –

The use of the words ‘may be stamped' really connotes ‘shall be stamped'. The rules framed
under the Stamp Act as well as under the relevant state laws invariably provide that the adhesive
stamps shall carry special words, to indicate the use to which the stamps can be put.

CANCELLATION OF ADHESIVE STAMPS

Section 12(1)(a) provides that any person affixing any adhesive stamp to any instrument
chargeable with duty which has been executed by another person shall, when affixing such

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stamp cancel the same so that it cannot be used again. Under Sub-section (1)(b), an obligation has
been imposed on person executing any instrument on any paper bearing an adhesive stamp, to
cancel the stamp, if such cancellation has not been done, at the time of such execution. If a person
fails to cancel the stamp, he becomes liable to penalty in accordance with Section 63. The object
is to prevent the same stamp from being used again.

Under Sub-section (2) of Section 12, any instrument bearing an adhesive stamp which has not
been cancelled is deemed to be unstamped.

MODE OF CANCELLATION OF ADHESIVE STAMPS

a. Section 12(3) deals with the mode of cancellation of stamp. It provides that the cancellation
of an adhesive stamp may be done by the person concerned by writing on or across the
stamp his name or initials, or the name or initials of his firm with the true date of his so
writing, or in any other effectual manner. Sub-section (3) merely lays down as a guidance
one of the ways in which an adhesive stamp can be cancelled.

b. In Mahadeo Koeri v. Sheoraj Ram Teli, ILR 41 All 169; AIR 1919 All 196, it was held that a
stamp may be treated as having been effectively cancelled by merely drawing a line across
it. But, in Hafiz Allah Baksh v. Dost Mohammed, AIR 1935 Lah. 716, it was held that if it is
possible to use a stamp a second time, inspite of a line being drawn across it, there is no
effectual cancellation. Again, the question whether an adhesive stamp has been cancelled
in an effectual manner has to be determined with reference to the facts and circumstances
of each case.

In Melaram v. Brij Lal, AIR 1920 Lah. 374, it was held that a very effective method of
cancellation is the drawing of diagonal lines right across the stamps with ends extending
on to the paper of the document. A cross marked by an illiterate person indicating his
acknowledgement, was held to be an effective cancellation of the stamp in Kolai Sai v. Balai
Hajam, AIR 1925 Rang. 209. Accordingly, where the adhesive stamps on promissory note
were cancelled by drawing lines on them in different directions and stretching beyond the
edge of the stamp on the paper on which the promissory note was written, it was held that
the stamp had been effectually cancelled. Where one of the four stamps used on an
instrument had a single line drawn across the face of the stamp, the second had two parallel
lines, the third three parallel lines and the fourth two lines crossing each other, it was held
that the stamps must be regarded as having been cancelled in manner so that they could
not be used again (In re Tata Iron Steel Company, AIR 1928 Bom. 80). Putting two lines
crossing each other is effective (AIR 1961 Raj. 43).

c. However, putting a date across the stamp by a third party on a date subsequent to the date
on which the bill had been drawn, was held to be not proper cancellation in Daya Ram v.
Chandu Lal, AIR 1925 Bom. 520 Cf. Rohini v. Fernandes, AIR 1956 Bom. 421, 423. Similarly,
crossing by drawing lines and signing on the adjacent stamp was held to be not a
cancellation of the first stamp in U. Kyaw v. Hari Dutt, AIR 1934 Rang. 364. Cross is a good
way of cancellation. AIR 1976 Cal. 99.

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d. Where it is alleged that the cancellation was made at later stage than that of execution, the
burden of proving it, lies on the party who so alleges. Where instrument prima facie
appears to be duly stamped and cancelled by the drawer at the date of execution, the
burden of providing the contrary lies on the party who avers that the cancellation was not
affected at the time of execution. In the absence of evidence to the contrary, it may be
inferred that the stamp was duly affixed and cancelled.

INSTRUMENTS STAMPED WITH IMPRESSED STAMPS HOW TO BE WRITTEN

(WRITING ON STAMP PAPER)

a. Section 13 provides that every instrument written upon paper stamped with an impressed
stamp shall be written in such manner that the stamp may appear on the face of the
instrument and cannot be used for or applied to any other instrument. The expression, ‘face
of the instrument' is not to be interpreted as meaning that the document must commence
on the side on which the stamp is impressed or that both sides of the paper or parchment
may not be written upon. In Dowlat Ram Harji v. Vitho Radhoji, 5 Bom. 188, it was held
when the face of a deed or document is mentioned, no particular side of the parchment or
paper, on which the deed or document is written, is thereby indicated. Even the last line
may constitute the face (Westroph, CJ.).

b. Under Section 14, no second instrument chargeable with duty shall be written upon piece
of stamp paper upon which an instrument chargeable with duty has already been written.
However, this section shall not prevent any endorsement which is duly stamped or is not
chargeable with duty, being made upon any instrument for the purpose of transferring any
right created or evidenced thereby, or of getting the receipt of any money or goods the
payment or delivery of which, is secured thereby.

c. The object of Section 14 is to prevent a stamped paper which has been used for one
instrument, from being used for another instrument thereby avoiding payment of duty in
respect of second instrument, AIR 1928 Rang 262. Except for an endorsement of the kind
referred to earlier, no second instrument shall be engrossed on a stamp paper on which
there is already written ‘an instrument chargeable with duty'.

An alteration in the instrument as originally written, if it is of such nature, as to require fresh

stamp, would come within the prohibition contained in the section. It is an important question
as to what would be a material alteration which converts an instrument written on stamp paper
into a second instrument within the meaning of Section 14. A “material alteration” is one which
alters (or purports to alter), the character of the instrument itself and which affects (or may affect)
the contract which the instrument contains or alters evidence of any charge, or varies the liability
under the instrument in any way. An alteration which vitiates the instrument as could cause it
to operate differently was also held to be a material alteration. An alteration which may affect
the contract which the instrument contains is a material alteration.

Section 15 of the Act deems every instrument written in contravention of Section 13 or Section 14
to be unstamped and to be inadmissible in evidence as not being duly stamped.

DENOTING DUTY

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Section 16 of the Act deals with denoting duty. The object of this section is to spare parties to an
instrument, the inconvenience of having to produce (in cases in which the duty payable on an
instrument depends upon the duty already paid on another instrument), and the original or
principal instrument in order to prove that the second instrument has been duly stamped.

Section 16 provides that where the duty with which an instrument is chargeable, or its exemption
from duty, depends in any manner upon the duty actually paid in respect of another instrument,
the payment of such last mentioned duty, shall, if application is made in writing to the Collector
for that purpose, and on production of both the instruments, be denoted upon such first
mentioned instrument, by endorsement under the hand of the Collector of Stamps or in such
other manner as the rules of the State Government may provide.

TIME OF STAMPING INSTRUMENTS

a. Instruments executed inside India: Section 17 provides that all instruments chargeable with
duty and executed by any person in India shall be stamped before or at the time of
execution. The scope of Section 17 is restricted to only instruments executed in India. If the
executant of a document has already completed the execution of the document and in the
eye of law the document, could be said to have been executed, a subsequent stamping,
(however close in time) could not render the document as one stamped at the time of
execution. Thus, where a promissory note is executed by ‘A' and ‘B' and a stamp is
afterwards affixed and cancelled by ‘A' by again signing it, the stamping has taken place
subsequent to the execution and hence, the provisions of Section 17 are not complied with
(Rohini v. Fernandes, AIR 1956 Bom 421). A receipt stamped subsequent to its execution,
but before being produced in the Court is not stamped in time and accordingly, not
admissible in evidence.

b. Instruments executed outside India: Section 18 relates to foreign instruments (other than
bills and promissory note)

Foreign bills and notes received in India have been dealt within Section 19. According to
Section 18, every instrument chargeable with duty executed only out of India and (not
being a bill of exchange or promissory note) may be stamped within three months after it
has been first received in India. Section 18(2) provides that where such instrument cannot
with reference to the description of stamp prescribed therefore, be duly stamped by a
private person, it may be taken within the said period of three months to the Collector who
shall stamp the same in such a manner as the State Government may by rule prescribe,
with a stamp of that value as the person so taking such instrument may require and pay
for. Where an instrument is brought to the Collector after the expiry of three months, the
Collector may, instead of declining to stamp it, validate it under Sections 41 and 42 if he is
satisfied that the omission to stamp in time was due to a reasonable cause.

The object of Section 18 is to facilitate the stamping of the documents within a period of
three months, in as much as, by the very nature of things, Section 17 relating to instruments
executed in India cannot be complied with. Section 18 is intended to mitigate the
inconvenience and hardship that will entail if the instrument concerned is required to be

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stamped before or at the time of execution as laid down in Section 17. Instrument executed
in India is not within Section 18 (Nath Bank v. Andhar Mamik Tea Co., AIR 1960 Cal 779).

As far as bills of exchange and promissory notes are concerned, Section 19 makes an
elaborate provision. Any bill of exchange payable otherwise than on demand or
promissory note drawn or made out of India must be stamped and the stamp cancelled,
before the first holder in India deals with the instrument, i.e., presents the same for
acceptance or payment, or endorses transfers or otherwise negotiates the same in India.

The proviso to Section 19 clarifies that if, (i) at any time any bill of exchange or note comes
into the hands of any holder thereof in India, (ii) the proper adhesive stamp is affixed
thereto and cancelled in the manner prescribed by Section 12 and (iii) such holder has no
reason to believe that such stamp was affixed or cancelled otherwise than by the person,
and at the time required by the Act, then such stamp shall (so far as relates to such holder),
be deemed to have been duly affixed and cancelled. However, nothing contained in the
proviso shall relieve any person from any penalty incurred by him, for omitting to affix or
cancel a stamp.

ADJUDICATION AS TO STAMPS

a. Chapter III, consisting of Sections 31 and 32, deals with adjudication by the Collector, as to
the proper stamp that an instrument has to bear. The provisions of this Chapter are
intended to assist any party who is in doubt as to the proper stamp to be affixed on an
instrument but is nevertheless anxious to stamp the instrument. When the document or
any draft of the document is produced to the Collector, he shall determine the proper stamp
duty on payment of a nominal fee. The relevant provisions of the Act and matters in regard
to the performance of this function by the Collector are discussed below.

b. Under Section 31(1) when (i) an instrument, (whether executed or not and whether
previously stamped or not), is brought to the Collector, and (ii) the person bringing it
applies to have the opinion of that officer as to the duty if any, with which it is chargeable,
and (iii) pays a fee (not exceeding Rs. 5 and not less than 50 naya paise as the Collector may
direct), the Collector shall determine the duty if any with which in his judgment, the
instrument is chargeable. Under Section 31 (2), the Collector may require to be furnished
with an abstract of the instrument and also with such affidavit or other evidence as he may
deem necessary to prove that all the facts and circumstances affecting the chargeability of
the instrument with duty, or the amount of duty with which it is chargeable, are fully and
truly set-forth therein, and may refuse to proceed upon accordingly. However, no evidence
furnished pursuant to this section shall be used against any person in any civil proceeding,
except in an enquiry as to the duty with which the instrument to which it relates is
chargeable. Every person by whom such evidence is furnished shall, on payment of the full
duty, be relieved from any penalty which he may have incurred under the Act by reason
of the omission to state truly in such instrument any of the facts or circumstances.

c. The duty of the Collector under Section 31 is only to determine the stamp duty payable
upon the instrument. He is not authorized to impound the instrument or to impose any
penalty if he concludes that the instrument is not sufficiently stamped. Where a person has

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obtained the opinion of the Collector on any draft instrument, and thereafter does not want
to proceed any further to execute the instrument, no consequences will follow and, after
determination of the duty, the Collector becomes functus officio. But where the party wants
to proceed with effectuating the instrument or using it for the purposes of evidence, he has
to pay the duty determined by the Collector and obtain from the Collector under Section
32, an endorsement that the full duty with which the instrument is chargeable has been
paid. Normally, the determination by the Collector of the duty payable on an instrument
under Section 31 is final.

d. Section 32 deals with certificate by the Collector of Stamps as well as the time limit within
which such a certificate can be given by the Collector of Stamps. Sub-section (1) of the
section provides that when an instrument is brought to the Collector with an application
for having an opinion as to the proper duty chargeable thereon, and the Collector is of the
opinion that the instrument is already fully stamped or the duty determined by the
Collector under Section 31 or such a sum as (with the duty already paid in respect of the
instrument), is equal to the duty so determined, has been paid, the Collector shall certify
by endorsement on such instrument, that the full duty (stating the amount) with which it
is chargeable has been paid. When the Collector is of opinion that any such instrument
brought to him is not chargeable with duty, he shall certify in the same manner that such
instrument is not so chargeable. Under Section 32(3), any instrument upon which an
endorsement has been made by the Collector shall be deemed to be duly stamped or not
chargeable with duty as the case may be, and if chargeable with duty, shall be receivable
in evidence or otherwise and may be acted upon and registered as if it had been originally
duly stamped. The proviso to Section 32(3) categorically provides that the Collector shall
not make any endorsement on any instrument under Section 32, where -

• any instrument is executed or first executed in India and brought to him after the
expiration of one month from the date of its execution or first execution, as the case
may be;

• any instrument is executed or first executed out of India and brought to him after the
expiration of three months after it has been first received in India; or

• any instrument chargeable with a duty not exceeding 10 naya paise or any bill of
exchange or promissory note, is brought to him after the drawing or execution
thereof, on paper not duly stamped.

In effect, the proviso to Section 32(3) lays down the time limit within which the Collector of
Stamps can make any endorsement on any instrument brought to him, for his opinion as to the
duty chargeable thereon.

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INSTRUMENTS NOT DULY STAMPED - TREATMENT AND CONSEQUENCES
(IMPOUNDING)

a. The definition of the term “duly stamped” has already been explained. Chapter IV of the
Act (consisting of Sections 35 to 48) provides for the consequences that follow where
instruments are not duly stamped.

Section 33 contains a mandate on certain officials to impound an instrument which is not

duly stamped. Section 33(1) provides that every person having by law or consent of parties,
authority to receive evidence and every person in charge of a public office, except an officer
of police before whom any instrument, chargeable in his opinion, with duty is produced or
comes in the performance of his functions, shall, if it appears to him that the instrument is
not duly stamped, impound the same. The object of this Section is to protect the revenue,
and the Court or public officer authorized by this Section must, exercise the powers under
the Section suo moto and the jurisdiction of the Court does not depend upon raising of an
objection by the parties. For the purposes of this section, the State Government may
determine what offices are public offices. The Section also provides that the instrument
must be impounded, before it can be admitted in evidence. Once it is admitted in evidence,
the instrument cannot be impounded at a later stage and a court, after it becomes functus
officio, cannot rectify an earlier error.

b. The word ‘produced' has to be properly understood. It means produced in response to a

summon or produced voluntarily for some judicial purpose, such as, for supporting an
evidence. It does not refer to a document which accidentally or incidentally falls into a
judge's hand. The Court is not justified in impounding a document which the witness had
not been called upon to produce (Narayandas v. Nathuram, ILR 1943 Nag. 520; AIR 1943
Nag. 97). Similarly, a Court before which a copy of a document has been produced cannot
compel the party to produce the original document with a view to impounding it, having
received information that is not sufficiently stamped. It is open to the party to refuse to
obey the order of the Court in this respect (Uttam Chand v. Permanand, AIR 1942 Lah. 265).

c. Where a magistrate issued a warrant with a view to discovering registers kept by the
accused containing documents not stamped in accordance with the provisions of the Stamp
Act, and in course of the search, the registers were seized and produced before the
magistrate, it was held that the documents thus produced could be impounded as the word
‘comes' is sufficiently wide to include documents produced by the search under a search
warrant (Emperor v. Balu Kuppayyan, ILR 25 Mad. 525). This case should be confined to
its facts.

d. An arbitrator has the consent of parties to adjudicate the issues coming before him and
where the parties’ tender evidence, an arbitrator has a statutory duty under Section 33(1)
to check whether the instrument so produced is duly stamped and if not, to impound the
same.

e. However, this shall not compel any magistrate or judge of a Criminal Court to examine or
impound (if he does not think it fit to do so) any instrument coming before him in the
course of any proceeding other than possession proceedings and maintenance proceedings.

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Also, a judge of a High Court can delegate the duty of examining and impounding any
instrument to any other person appointed by the court in this behalf.

UNSTAMPED RECEIPTS

Section 34 provides that where the instrument is an unstamped receipt produced in the course
of an audit of any public account, the officer before whom the receipt is produced has discretion
either to impound or to require the receipt to be stamped. This section applies where the receipt
is chargeable with a duty not exceeding 10 naya paisa. The officer concerned can, instead of
impounding the receipt require a duly stamped receipt to be substituted therefor.

INSTRUMENTS NOT DULY STAMPED INADMISSIBLE IN EVIDENCE

a. Section 35 stipulates that no instrument chargeable with duty shall be-

i. admitted in evidence for any purpose whatsoever by any person authorized by law
(such as judges or commissioners) or by the consent of the parties (such as arbitrators)
to record evidence; or

ii. shall be acted upon; or

iii. registered; or

iv. authenticated by any such person as aforesaid or by any public officer. unless such
instrument is duly stamped.

An insufficiently stamped instrument is not an invalid document and it can be

admitted in evidence on payment of penalty. [See K. Narasimha Rao v. Sai Vishnu,
AIR 2006 AP 80 also at p.302]

b. The proviso to Section 35 provides as under:

i. any instrument not being an instrument chargeable with a duty not exceeding 10
naya paisa only, or a bill of exchange, or promissory note, subject to all such
expectations, be admitted in evidence on payment of the duty with which the same
is chargeable, or, in the case of an instrument insufficiently stamped, of the amount
required to make up such duty, together with a penalty of Rs. 5/- or when ten times
the amount of the proper duty or deficient portion thereof exceeds Rs. 5/-, on a sum
equal to ten times such duty or portion;

ii. where any person from whom a stamped receipt could have been demanded has
given an unstamped receipt and such receipt, if stamped, would be admissible in
evidence against him, on payment of a penalty of Re. 1/- by the person tendering it;

iii. where a contract or agreement of any kind is affected by the correspondence

consisting of two or more letters and any one of the letters bears the proper stamp,
the contract or agreement shall be deemed to be duly stamped;

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iv. nothing contained in Section 35 shall prevent the admission of any instrument in
evidence in any proceeding in a criminal Court other than the proceeding under
Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898;

v. also, nothing contained in Section 35 shall prevent the admission of any instrument
in the Court, when such instrument has been executed by or on behalf of the
Government, or where it bears the certificate of the Collector as provided by Section
32 or any other provision of the Act.

c. The words ‘shall not be admissible in evidence' used in this Section only means that the
document shall not be made the basis of the decision or should not be relied upon to
support any finding (Sheonath Prasad v. Sorjoo Nonia, 1943 ALJ, 189; AIR 1943 All 220
(FB)). There is no embargo upon proving the surrounding circumstances.

d. The words ‘for any purpose' used in this Section would have their natural meaning. Where
an unstamped document is admitted in proof of some collateral matter, it is certainly
admitted in evidence for that purpose, which the Act prohibits. In Ram Ratan v.
Parmanand, ILR 1946 Lah. 63, it was held that an unstamped partition deed cannot be used
to corroborate the oral evidence for the purpose of determining even the factum of partition
as distinct from its term. The words ‘for any purpose' would in effect mean ‘for each and
every purpose whatsoever without any exception'.

e. It is immaterial whether the purpose is the main purpose or a collateral one. The words
‘acted on' means that nothing can be recovered under the instrument unless it has a proper
stamp. Similarly, where a suit is brought upon an instrument which is not duly stamped,
the admission of the contents of the instrument made by the defendant does not avail the
claimant and a decree cannot be based on such instruments. Admitting an instrument in
evidence also amounts to acting upon it and an instrument which should have been
stamped but is not stamped is not admissible in evidence for any purpose whatsoever.
(f) Where an unstamped instrument is lost, the party relying on it is helpless and no
payment of penalty can enable admission of secondary evidence.

ADMISSION OF INSTRUMENTS (WHERE NOT TO BE QUESTIONED)

Section 36 provides that where an instrument has been admitted in evidence, such an admission
shall not (except as provided in Section 61) be called in question at any stage of the same suit or
proceeding on the ground that the instrument has not been duly stamped. Section 36 is
mandatory (Guni Ram v. Kodar, AIR 1971 All 434, 437).

If notwithstanding any objection, the trial Court admits the document, the matter ends there and
the Court cannot subsequently order the deficiency to be made and levy penalty (Bhupathi Nath
v. Basanta Kumar, AIR 1936 Cal. 556; AIR 1933 Lah. 240).

However, it should be mentioned that Section 61 makes certain important provisions, details of
which will be discussed later.

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ADMISSION OF IMPROPERLY STAMPED INSTRUMENTS

Under Section 37, opportunity is given to a party, of getting a mistake rectified when a stamp of
proper amount, but of improper description has been used. Under this section, the State
Government may make rules providing that, where an instrument bears a stamp of sufficient
amount but of improper description, the instrument may, on payment of the duty with which
the stamp is chargeable, be certified to be duly stamped, and any instrument so certified shall
then be deemed to have been duly stamped as from the date of its execution.

DEALING WITH INSTRUMENTS IMPOUNDED

a. Section 38 deals with instruments impounded under Section 33. A person impounding an
instrument under Section 33 and receiving the same in evidence (upon payment of penalty
under Section 35 or, of duty under Section 37) shall send, to the Collector of Stamps, an
authenticated copy of such instrument, together with a certificate in writing, stating the
amount of duty and penalty levied in respect thereof and shall send such amount to the
Collector or to such person as the Collector may appoint in this behalf. In every other case,
the person so impounding an instrument shall send it in original to the Collector.

b. Section 39 vests the Collector with certain powers to refund penalty recovered by a court
on impounding a document not duly stamped when produced before it. Under Section 38,
the court so impounding the instrument and realizing the penalty has to forward an
authenticated copy of the instrument and the amount of penalty recovered to the Collector.
The Collector, on examining the instrument so received by him may, in his discretion,
refund the whole penalty if it had been imposed for contravention of Section 13 or Section
14 of the Act and in any other case any portion of the penalty in excess of Rs. 5/- in cases
where a copy of the instrument under Section 38(1) has been sent to him. The Collector can
act Suo moto without any application in this behalf being made by a party affected.

Collector’s Power to Stamp Instrument Impounded

Section 40 deals with Collector's powers to stamp an instrument which is impounded. Under
Section 40(1), the Collector when impounding any instrument under Section 33, or receiving any
instrument under Section

38(2) not being an instrument chargeable with duty not exceeding 10 naya paisa only or a bill of
exchange or promissory note, shall adopt the following procedure:

i. if he is of the opinion that instrument is duly stamped or is not chargeable with duty, he
shall certify by endorsement thereon that it is duly stamped, or that it is not so chargeable
as the case may be;

ii. if he is of the opinion that such instrument, is chargeable with duty and is not duly
stamped, he shall require the payment of the proper duty or the amount required to make
up the same, together with a penalty of Rs. 5/-, if he thinks fit and amount not exceeding
ten times the amount of the proper duty or of the deficient portion thereof, whether such
amount exceeds or falls short of Rs. 5/-.

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The Collector, however, has the discretion to remit the whole penalty leviable under this
Section in a case where the instrument has been impounded only because it has been
written in contravention of Section 13 or Section 14.

A certificate given in the situation (i) above, shall, for the purposes of the Act be conclusive
evidence of the matters stated therein. Sub-section (3) of Section 40 provides that an
instrument which has been sent to the Collector under Section 38(2) shall be returned to
the impounding officer after the collector has dealt with the same in the manner provided
above.

INSTRUMENTS UNDULY STAMPED BY ACCIDENT

Section 41 deals with cases where a person, of his own motion bring it to the Collector's notice
that the instrument is not duly stamped. In such cases, if the Collector is satisfied, that the
omission to pay the proper duty was due to accident, mistake or urgent necessity, he may receive
the deficit amount and certify by endorsement on the instrument that the proper duty has been
levied. In order to avail of the benefit of this section, the instrument must be produced before the
Collector within one year of the date of its execution. Where the instrument is brought to the
notice of the Collector, beyond the period of one year, Section 47 has no application and the
Collector has to proceed under Section 42 read with Section 33 and 40 of the Act. Where the
instrument having been brought to the notice of the Collector within the period of one year, the
Collector is in doubt regarding the amount of duty chargeable, he may refer the case to the Chief
Controlling Revenue Authority and proceed in accordance with the decision of such authority.
However, where no such reference is made by the Collector, the Collector's decision would be
final, and the Chief Controlling Revenue Authority cannot interfere with his decision.

ENDORSEMENT OF INSTRUMENT ON WHICH DUTY HAS BEEN PAID UNDER

SECTIONS 35, 40 AND 41

Section 42 deals with cases where duty and penalty, if any, have been levied and realized by the
court or any other body or by the Collector. In such cases, the authority refunding and collecting
the duty and penalty must make an endorsement on the instrument as to the amount paid and
the name and the residence of the person paying the same. Upon such certification, the
instrument becomes admissible in evidence and may be registered and acted upon as if it had
been duly stamped. The duty and penalty referred to in this Section are those covered by Sections
35, 40 or 41 as the case may be. The proviso to this Section lays down that no instrument which
has been admitted in evidence upon payment of duty and a penalty under Section 35, shall be
delivered to the person from whom possession of it came into the hands of the officer
impounding it, before the expiration of one month from the date of such impounding or if the
Collector has certified that its further detention is necessary and has not cancelled such certificate.
Again, nothing contained in Section 42 shall affect the provisions of clause (3) of Section 144 of
the Code of Civil Procedure, 1889 [under the present Code the corresponding provision is
proviso to Order 13, Rule 9(1)].

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PROSECUTION FOR OFFENCES AGAINST STAMP LAW

Section 43 deals with prosecutions for offences against the Stamp Law. This section provides that
a levy of a penalty or payment thereof in respect of an unstamped or insufficiently stamped
document (as provided for in Chapter IV) does not necessarily exempt a person from liability for
prosecution for such offence. However, the proviso to the section clarifies that no such
prosecution shall be instituted in the case of any instrument in respect of which a penalty has
been paid, unless it appears to the Collector that the offence was committed with the intention of
evading the payment of proper duty. On receipt of copy of the instrument impounded under
Section 38, the Collector can initiate criminal proceedings if he sees reasons therefor.

RECOVERY OF DUTY OR PENALTY IN CERTAIN CASES

Section 44 deals with the circumstances in which persons paying duty or penalty may recover
the same in certain cases. The duty or penalty under this Section refers to the duty or penalty
paid/levied under Sections 35, 37, 40 or 41 of the Act. It also includes any duty or penalty under
Section 29. The remedy is available to a person who, under the Act, was not bound to bear the
expense of providing the proper stamp for such instrument. Such a person shall be entitled to
recover, from the person bound to bear such expense, the amount of duty or penalty, if any, paid.
For the purpose of such recovery, any certificate granted in respect of such instruments under
the Act shall be conclusive evidence of the matters therein certified. Sub-section (3) of Section 44
further provides that the amounts so recoverable may, if the court thinks fit, be included in any
order as to cost in any suit or proceedings to which such persons are parties and in which such
instrument has been tendered in evidence. If the court does not include the amount in such order,
no further proceedings for the recovery of the amount shall be maintainable.

REFUND OF DUTY OR PENALTY IN CERTAIN CASES BY REVENUE AUTHORITY

Section 45 deals with power of the Revenue Authority to refund the penalty in excess of duty
payable on instrument in certain cases. Section 39 of the Act empowers the Collector to refund a
part and, in some cases, the whole of the penalty paid under the provisions of Section 35. Section
45 further empowers the Chief Controlling Revenue Authority to order refunds. The object of
granting such further power to the Chief Controlling Revenue Authority is evidently to set right
mistakes or other omissions by the Collector to order refund in deserving cases. The Section
provides that where any penalty is paid under Section 35 or Section 40, the Chief Controlling
Revenue Authority may, upon application in writing made within one year from the date of
payment, order, refund such penalty wholly or in part. Where in the opinion of the Chief
Controlling Revenue Authority, stamp duty in excess of that which is legally chargeable has been
charged and paid under Section 35 or Section 40, such authority may, upon application in writing
made within three months of the order charging the same, refund the excess.

It is necessary to appreciate the differences between the powers of the Collector under Section 39
and the powers of the Controlling Revenue Authority under Section 45 at this stage. They are:

i. Section 39 provides for refund of penalty, whereas Section 45 confers powers to refund
even duties where they have been paid in excess.

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ii. The Collector's power to refund penalty is restricted only to two cases mentioned in Section
39(3) but the powers under Section 45 are not subject to any such limitation.

iii. Section 39 does not lay down any time limit for the Collector to exercise his powers to
refund, but in the case of Section 45 there is a time limit.

iv. The power under Section 45 is to be exercised only when an application is made by a party,
whereas under Section 39 it is routine function of the Collector. The power under Section
45 is a purely discretionary one and the Chief Controlling Revenue Authority cannot be
compelled to exercise his power by any further proceedings.

NON-LIABILITY FOR LOSS OF INSTRUMENTS SENT UNDER SECTION 38

Section 46 provides that where any instrument sent to the Collector under Section 38(2) is lost,
destroyed during transmission, the person sending the same, shall not be liable for such loss,
destruction or damage. However, Section 38(2) provides that when any instrument is to be sent,
the person from whose possession it came into the hands of the person impounding the same
may require a copy thereof to be made at his expense and authenticated by the person
impounding such instruments.

POWER TO STAMP IN CERTAIN CASES

Under Section 47 when any bill exchange or promissory note chargeable with a duty not
exceeding 10 naya paise is presented for payment unstamped, the person to whom it is so
presented may affix thereto the necessary adhesive stamp, and, upon cancelling the same in the
manner provided in the Act, may pay the sum payable upon such bill or note and may charge
the duty against the person who ought to have paid the same, or deduct it from the sum payable
as aforesaid and such bill or note shall, so far as respects the duty, be deemed good and valid.
However, nothing contained in this section shall relieve any person from any penalty or
proceeding to which he may be liable in relation to such bill or note.

RECOVERY OF DUTIES AND PENALTIES

Under Section 48, all duties penalties and other sums required to be paid under this Chapter may
be recovered by the Collector by distress and sale of the movable property of the person or by
any other process used for the recovery of the arrears of land revenue. This section provides for
the mode of realization of duty or penalty or other sums not voluntarily paid.

ALLOWANCE AND REFUND

Section 49 deals with different circumstances in which refund would be admissible in respect of
impressed stamps not used. The section applies only to impressed stamps and not adhesive
stamps. Clause (a) of the section refers to cases where the stamp paper is spoiled before any
document has been written thereon, or is spoiled in the course of writing and before execution.
Clause (b) refers to cases where the document has been written out wholly or in part but not
executed. Clause (c) refers to bills of exchange payable otherwise than on demand and
promissory notes, when these have not been accepted or made use of. Clause (d) deals with
refunds after execution.

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Section 49 provides that subject to such rule as may be made by the State Government, as to the
evidence to be required, or the enquiry to be made, the Collector may, on application made
within the period prescribed in Section 50, and if he is satisfied as to the facts, make allowance
for impressed stamps spoiled in the cases hereinafter mentioned, namely:

a. the stamp on any paper inadvertently and undesignedly spoiled, obliterated or by error in
writing or any other means rendered unfit for the purpose intended before any instrument
written thereon is executed by any person;

b. the stamp on any document which is written out wholly or in part; but which is not signed
or executed by any party thereto;

c. in the case of bills of exchange payable otherwise than on demand or promissory notes:

i. the stamp on any such bill of exchange signed by or on behalf of the drawer which
has not been accepted or made use of in any manner whatever or delivered out of his
hands for any purpose other than by way of tender for acceptance provided that the
paper on which any such stamp is impressed, does not bear any signature intended
as or for the acceptance of any bill of exchange to be afterwards written thereon;

ii. the stamp on any promissory note signed by or in behalf of the maker which has not
been made use of in any manner whatever or delivered out of his hands;

iii. the stamp used or intended to be used for any such bill of exchange or promissory
note signed by, or on behalf of, the drawer thereof, but which from any omission or
error has been spoiled or rendered useless, although the same, being a bill of
exchange may have been presented for acceptance or accepted or endorsed, or being
a promissory note may have been delivered to the payee: provided that another
completed and duly stamped bill of exchange or promissory note is produced
identical in every particular, except in the correction of such omission or error as
aforesaid, with the spoiled bill, or note;

d. The stamp used for an instrument executed by any party thereto which-

i. has been afterwards found to be absolutely void in law from the beginning;

ii. has been afterwards found unfit, by reason of any error or mistake therein, for
purpose originally intended;

iii. by reason of the death of any person by whom it is necessary that it should be
executed, without having executed the same, or of the refusal of any such person to
execute the same, cannot be completed so as to affect the intended transaction in the
form proposed;

iv. for want of the execution thereof by some material party, and his inability or refusal
to sign the same, is in fact incomplete and insufficient for the purpose for which it
was intended;

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v. by reason of the refusal of any person to act under the same or to advance any money
intended to be thereby secured or by the refusal or non-acceptance of any office
thereby granted, totally fails of the intended purpose;

vi. becomes useless in consequence of the transaction intended to be thereby affected

being affected by some other instrument between the same parties and bearing a
stamp of not less value;

vii. is deficient in value and the transaction intended to be thereby affected has been
affected by some other instrument between the same parties and bearing a stamp of
not less value;

viii. is inadvertently and undesignedly spoiled, and in lieu whereof another instrument
made between the same parties and for the same purpose is executed and duly
stamped.

Provided that, in the case of an executed instrument, no legal proceeding has been
commenced in which the instrument could or would have been given or offered in
evidence and that the instrument is given up to be cancelled.

TIME LIMITS

Section 50 prescribes the time limit within which an application for relief in respect of impressed
stamps spoiled can be made; different time limits have been specified for the purpose, namely:

i. in the cases mentioned in clause (d)(5) of Section 49, within two months of the date of the
instrument;

ii. in the case of a stamped paper on which no instrument has been executed by any of the
parties thereto, within six months after the stamp has been spoiled;

iii. in the case of a stamped paper in which an instrument has been executed by any of the
parties thereto, within six months after the date of the instrument, or if it is not dated,
within six months after the execution thereof by the person by whom it was first or alone
executed:

Provided that -

a. when the spoiled instrument has been for sufficient reasons sent out of India, the
application may be made within six months after it has been received back in India.

b. when, from unavoidable circumstances, any instrument for which another

instrument has been substituted, cannot be given up to be cancelled within the
aforesaid period, the application may be made within six months after the date of
execution of the substituted instrument.

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UNUSED FORMS

Section 51 of the Act enables the Chief Controlling Revenue Authority or the Collector if
authorized by the Chief Controlling Revenue Authority, for such purpose to allow refunds in
cases where refunds of stamps on printed forms used by bankers, incorporated
companies/bodies corporate if required. Allowance may be made without limit of time, for
stamped papers used for printed forms of instruments any bankers or by any incorporated
company or other body corporate, if for any sufficient reasons such forms have ceased to be
required by the said banker, company or body corporate: provided that the Chief Controlling
Revenue Authority or the Collector, as the case may be, is satisfied that the duty in respect of
such stamped papers has been duly paid.

MISUSED STAMPS

Section 52 deals with allowance for misused stamps and applies to both impressed and adhesive
stamps in the following instances:

a. When any person has inadvertently used, for an instrument chargeable with duty, a stamp
of a description other than that prescribed for such instrument by the rules made under
this Act, or a stamp of greater value than was necessary, or has inadvertently used any
stamp for an instrument not chargeable with any duty; or

b. When any stamp used for an instrument has been inadvertently rendered useless under
Section 15, owing to such instrument having been written in contravention of the
provisions of Section 13.

The Collector may, on application made within six months after the date of instrument or,
if it is not dated, within six months after the execution thereof by the person by whom it
was first or alone executed, and upon the instrument, if chargeable with duty, being re
stamped with the proper duty, cancel and allow as spoiled the stamp so misused or
rendered useless.

Under Section 53, in any case in which allowance is made for spoiled or misused stamps, the
Collector may give in lieu thereof:

a. other stamps of the same description and value; or

b. if required and he thinks fit, stamps of any other description to the same amount in value;
or

c. at his discretion, the same value in money, deducting ten naya paisa for each rupee or
fraction of a rupee.

Section 54 of the Act enables a person to obtain refund of the value of stamps purchased by him,
if he has no immediate use thereof. Under this section, when any person is possessed of a stamp
or stamps which have not been spoiled or rendered unfit or useless for the purpose intended, but
for which he has no immediate use, the Collector shall repay to such person the value of such
stamp or stamps in money, deducting ten naya paise for each rupee or portion of a rupee, upon
such person delivering up the same to be cancelled and proving to the Collector's satisfaction

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a. that such stamp or stamps were purchased by such person with a bona fide intention to
use them; and

b. that he has paid the full price thereof; and

c. that they were so purchased within the period of six months next preceding the date on
which they were so delivered.

Provided that, where the person is a licensed vendor of stamps, the Collector may, if he thinks
fit, make the repayment of the sum actually paid by the vendor without any such deduction
as aforesaid.

DEBENTURES

Section 55 is intended to relieve companies renewing debentures issued by them from the
liability to pay stamp duty on both the original and the renewed debenture. As per this section,
when any duly stamped debenture is renewed by the issue of a new debenture in the same terms,
the Collector shall, upon application made within one month, repay to the person issuing such
debenture, the value of the stamp on the original or on the new debenture whichever shall be
less:

Provided that the original debenture is produced before the Collector and cancelled by him in
such manner as the State Government may direct.

A debenture shall be deemed to be renewed in the same terms within the meaning of this section
notwithstanding the following changes:

a. the issue of two or more debentures in place of one original debenture, the total amount
secured being the same;

b. the issue of one debenture in place of two or more original debentures, the total amount
secured being the same;

c. the substitution of the name of the holder at the time of renewal for the name of the original
holder; and

d. the alteration of the rate of interest of the date of payment hereof.

REFERENCE AND REVISION

Sections 56 to 61 deal with Reference and Revision. Section 56 provides that the powers
exercisable by a Collector under Chapter IV and V and under clause (a) of the first proviso to
Section 26 shall in all cases be subject to the control of the Chief Controlling Revenue Authority.
Further, if any Collector, acting under Sections 31,40 or 41, feels doubt as to the amount of duty
with which any instrument is chargeable, he may draw up a statement of the case, and refer it,
with his own opinion thereon, for the decision of the Chief Controlling Revenue Authority
[Section 56(2)]. Such authority shall consider the case and send a copy of its decision to the
Collector, who shall proceed to assess and charge the duty (if any) in conformity with such
decision.

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As per Section 57(1), the Chief Controlling Revenue Authority may state any case referred to it
under Section 56(2) or otherwise coming to its notice, and refer such case, with its own opinion
thereon to the High Court and the same shall be decided by not less than three Judges of the High
Court and the majority decision shall prevail.

According to Section 58, if the High Court is not satisfied that the statements contained in the
case are sufficient to enable it to determine the questions raised thereby, the court may refer the
case back to the Revenue Authority for further feedback. The High Court shall decide the
questions raised and give its judgment to the Authority who shall dispose of the case as per the
judgment.

As per Section 60, any subordinate Court can also refer such case to the High Court like the
Revenue Authority but should be through proper channel. In Section 61(1) of the Act it is
provided that a Court may take into consideration on its own motion or on application of the
Collector, an order of the lower Court admitting the instrument as duly stamped or as not
requiring stamp duty or on payment of duty and penalty. According to sub-section 2 of Section
61, if such Court is not in agreement with the stand of the lower Court, it may require that the
instrument be produced before it and may even impound the same if necessary. While doing so,
the Court shall send a copy of its order to the Collector and to the office/Court from which such
instrument has been received. [Section 61(3)]

PROSECUTION

As per Section 61(4), the Collector has got the power notwithstanding anything contained in the
order of the lower court, to prosecute a person if any offence against the Stamp Act which he
considers that the person has committed in respect of such an instrument. The prosecution is
instituted when he is satisfied that the offence is committed with an intention of evading the
proper stamp duty. The order of the lower Court as to the instrument shall be valid except for
the purposes of prosecution in this respect.

CRIMINAL OFFENCES

Sections 62 to 72 deal with penalties for offences. The provisions are as under:

1. As per Section 62(1), any person

a. drawing, making, issuing, endorsing or transferring, or signing otherwise than as a

witness, or presenting for acceptance or payment, or accepting, paying or receiving
payment of or in any manner negotiating, any bill of exchange (payable otherwise
than on demand) or promissory note without the same being duly stamped; or

b. executing or signing otherwise than as a witness any other instrument chargeable

with duty without the same being duly stamped; or

c. voting or attempting to vote under any proxy not duly stamped shall, for every such
offence, be punishable with fine which may extend to five hundred rupees.

Provided that, when any penalty has been paid in respect of any instrument under Sections
35, 40 or 61, the amount of such penalty shall be allowed in reduction of the fine (if any)

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subsequently imposed under this section in respect of the same instrument upon the person
who paid such penalty. In such a case the Collector is to make an enquiry and to give an
opportunity to the accused to pay. In such cases the instrument is (i) chargeable with duty,
and (ii) there is a dishonest intention not to pay the duty.

Sub-section (2) of Section 62, provides that if a share-warrant is issued without being duly
stamped, the company issuing the same, and also every person who, at the time when it is
issued, its managing director or secretary or other principal officer of the company, shall be
punishable with fine which may extend to five hundred rupees.

2. Any person required by Section 12 to cancel an adhesive stamp, and failing to cancel such
stamp in the manner prescribed by that section, shall be punishable with fine which may
extend to one hundred rupees (Section 63). The criminal intention is necessary for an
offence under this Section.

3. As per Section 64, any person who, with intent to defraud the Government—

a. executes any instrument in which all the facts and circumstances required by Section
27 to be set forth in such instrument are not fully and truly set forth; or

b. being employed or concerned in or about the preparation of any instrument, neglects

or omits fully and truly to set forth therein all such facts and circumstances; or

c. does any other Act calculated to deprive the Government of any duty or penalty
under this Act; shall be punishable with fine which may extend to five thousand
rupees.

Here also, an intention to evade payment of proper stamp duty or intention to defraud the
Government of its stamp revenue is necessary.

4. Any person who (a) being required under Section 30 to give a receipt, refuses or neglects
to give the same; or (b) with intent to defraud the Government of any duty, upon a payment
of money or delivery of property exceeding twenty rupees in amount or value, gives a
receipt for amount or value not exceeding twenty rupees, or separates or divides the money
or property paid or delivered shall be punishable with fine which may extend to one
hundred rupees (Section 65). To constitute an offence under this section, an intention to
defraud the Government is necessary.

5. As per Section 66, any person shall be punishable with fine which may extend to Rs. 200/-
if he -

a. receives, or takes credit for any premium or consideration for any contract of
insurance and does not, within one month after receiving or taking credit for, such
premium or consideration, make out and execute a duly stamped policy of such
insurance; or

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b. makes, executes or delivers out any policy which is not duly stamped or pays or
allows in account, or agrees to pay or to allow in account, any money upon, or in
respect of, any such policy.

6. As per Section 67, if any person drawing or executing a bill of exchange (payable otherwise
than on demand) or a policy of marine insurance purporting to be drawn or executed in a
set of two or more, and not at the same time drawing or executing on paper duly stamped
the whole number of bills or policies of which such bill or policy purports the set to consist,
shall be punishable with fine which may extend to one thousand rupees.

7. Any person who, (a) with intent to defraud the Government, of duty, draws, makes or
issues any bill of exchange or promissory note bearing a date subsequent to that on which
such bill or note is actually drawn or made; or (b) knowing that such bill or note has been
so post- dated, endorses, transfers, presents for acceptance or payment, or accepts, pays or
receives payment of, such bill or note; or in any manner negotiates the same; (c) with the
like intent, practices or is concerned in any act, contrivance or device not specially provided
for by this Act or any other law for the time being in force; shall be punishable with fine
which may extend to one thousand rupees. Intention to defraud is an essential ingredient
for offence under Section 68.

8. If any person appointed to sell stamps who disobeys any rule made under Section 74, and
any person not so appointed who sells or offers for sale any stamp [other than a (ten naya
paise or five naya paise) adhesive stamp] shall be punishable with imprisonment for a term
which may extend to six months, or with fine which may extend to five hundred rupees,
or with both (section 69). Before instituting criminal proceedings under this section against
any person, sanction of the Collector must be obtained. Otherwise, the proceedings will be
vitiated. A criminal court having jurisdiction to try offences under Cr. P.C. can try such
offences.

TAKING COGNIZANCE

a. No prosecution in respect of any offence punishable under this Act or any Act hereby
repealed, shall be instituted without the sanction of the Collector or such other officer as
the State Government generally or the Collector specially, authorizes in that behalf.

b. The Chief Controlling Revenue Authority, or any officer generally or specially authorized
by it in this behalf, may stay any such prosecution or compound any such offence.

c. The amount of any such composition shall be recoverable in the manner provided by
Section 48.

A Magistrate other than a Presidency Magistrate or a Magistrate whose powers are not less than
those of a Magistrate of the second class, shall try any offence under this Act (Section 71).

Every such offence committed in respect of any instrument may be tried in any district or
presidency town in which instrument is found as well as in any district or presidency town in
which such offence might be tried under the Code of Criminal Procedure for the time being in
force (Section 72).

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MISCELLANEOUS PROVISIONS

Chapter VIII, containing Sections 73 to 78 deals with supplemental provisions regarding

inspection of relevant registers, books, records, etc.; to enter the premises for that purpose,
powers of Government to frame rules for the sale and supply of stamps and to make rules
generally to carry out the provisions of the Act.

Section 77A provides that all stamps in denominations of annas four or multiples thereof shall
be deemed to be stamps of the value of 25 naya paise or (as the case may be), multiples thereof
and shall accordingly be valid for all the purposes of the Act. From this it can be inferred that
whatever the stamp duty is mentioned to be annas in the first Schedule; the instrument concerned
has to be treated as leviable with duty of 25 naye paise or in multiples thereof as the case may be.

SCHEDULE

The Schedule to the Stamp Act prescribes the rates of stamp duties on instruments. Articles 13,
27, 37, 47, 49, 53 and 62(a) of the Schedule relate to instruments, the rates of duties on which are
prescribed by the Central Legislature and have been subject to legislative amendments by that
Legislature (See Entry 91 of List I). The other articles relate to instruments in respect of which the
Central Legislature has lost its power to regulate rates of duties (except for Union Territories)
since the passing of the Government of India Act, 1935. With respect to these instruments, the
rates mentioned are fixed by the State Legislatures (See Entry 63 of List II).

E-STAMPING

E-Stamping is a computer-based application and a secured way of paying Non Judicial stamp
duty to the Government. The benefits of e-Stamping are e-Stamp Certificate can be generated
within minutes; e- Stamp Certificate generated is tamper proof; Easy accessibility and faster
processing; Security; Cost savings and User friendly.

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15 REGISTRATION ACT, 1908

APPLICABILITY

The registration act, 1908 came in to force on 1st day of January, 1909

THIS ACT EXTENDS TO WHOLE OF INDIA EXCEPT JAMMU AND KASHMIR

INTRODUCTION

a) Registration means recording of the contents of a document with a Registering Officer and
preservation of copies of the original document. The Registration Act, 1908 is the law
relating to registration of documents.

b) Registration is the process by which the records of such document are preserved and
through observing certain procedure can be made available to the general public by
Registrar.

c) Therefore, the registration is notice to the general public. Registered document becomes
public document, such document can be inspected and certified true copy of the same can
be obtained by anybody on payment of necessary fees and by observing the prescribed
procedure.

THE PURPOSE OF THE REGISTRATION ACT

• Is to provide a method of public registration of documents so as to give information to

people regarding legal rights and obligations arising or affecting a particular property,

• To perpetuate documents which may afterwards be of legal importance, and

• Also to prevent fraud.

• Registration lends inviolability (incapable of being violation) and importance to certain

classes of documents.

DOCUMENTS

Section 3(18) of General clauses Act 1897

The term document means any matter, written, expressed, or described upon any substance by
means of letter, figures which is intended to be used for the purpose of recording that matter.

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Examples-

• Minutes of a meeting.

• A map is a document.

• A caricature is a document.

IMPORTANT TERMS

INSTRUMENT as per section 2(14) of Indian stamp Act, 1899 define instrument as including
every document by which any right or liability is or purported to be created, transferred, limited,
extinguished or recorded. E.g. Promissory Note.

It may be noted that all instruments are documents but all documents need not be instruments.

DOCUMENTS WHOSE REGISTRATION IS COMPULSORY (SECTION 17)

According to Section 17 of the Registration Act, 1908, documents whose registration is

compulsory are the following:-

Gift Instruments of gift of immovable property. Section 17(l)(a)

which purport or operate to create, declare, assign, limit or extinguish,

Non-Testamentary
whether in present or in future, any right, title of interest, of the value of
Instruments
one hundred rupees and upwards, in immovable property. Section 17(l)(b)

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Non-testamentary instruments which acknowledge the receipt or payment

Acknowledge Receipt of any consideration on account of the creation, declaration, assignment,
or payment limitation, or extinction of an interest of the value of Rs. 100 or upwards in
immovable property. Section 17(l)(c)

A lease of immovable property is compulsory registrable:

i. If it is from year to year; or

Lease of immovable
property ii. If it is for a term exceeding one year; or

iii. If it reserves a yearly rent. Section 17(l)(d)

Non testamentary instruments transferring or assigning any decree or

order of a court or any award, when such decree, order or award purports
to create, declare, assign, limit or extinguish; whether in present or in
future, any right, title or interest, whether vested or contingent of value of
one hundred and upwards in immovable property, Section 17(l)(e)
Decree of court or
NOTE
award of arbitrator
However, registration of Arbitrator's Award is necessary only if title is
founded on the award. If the award contains a mere declaration of pre-
existing right, the award is not creating a right, title and interest. Then it is
not required to be compulsorily registered. -Sardar Singh vs. Smt Krishna
Devi

Authority to Adopt A son which is not conferred by will. 17(3)

EXCEPTIONS TO SECTION 17(1), & [SECTION 17(2)]

Documents which are covered under Sec 17 (1) and also covered under Sec 17 (2) then they are
optionally Registerable.

Some of few examples are-

a. Any instrument relating to shares in Joint Stock Company; or

b. Any debentures issued by any such Company; or

c. Any grant of immovable property by the Government; or

d. Composition deed (i.e., every deed the essence of which is composition; or

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e. Any endorsement upon or transfer of any debenture; or

f. Any order granting loan made under the Agriculturists Loans Act, 1884 or instrument for
securing the repayment of a loan made under that Act; or

g. Any endorsement on a mortgage deed acknowledging the payment of the whole or any
part of the mortgage money, and any other receipt for payment of money, due under a
mortgage when the receipt does not purport to extinguish the mortgage;

DOCUMENTS OF WHICH REGISTRATION IS OPTIONAL (SECTION 18)

Section 18 specifies documents, registration of which is optional. It provides that any of the
following documents may be registered under this Act, namely:

• Instruments which purport or operate to create, declare, assign, limit or extinguish,

whether in present or in future, any right, title or interest whether vested or contingent, of
value less than one hundred rupees, in immovable property;

• Instruments acknowledging the receipt or payment of any consideration on account of the

creation, declaration, assignment; limitation or extinction of any right, title or interest of
value less than one hundred rupees, in immovable property;

• Leases of immovable property for any term not exceeding one year.

• Wills

• Other documents not required by Section 17(1) to be registered.

RE-REGISTRATION (SECTION 23A)

Section 23A provides for the re-registration of certain documents. The section is mainly intended
to deal with situations where the original presentation was made by a person not duly
authorized.

If a person finds that a document has been filed for registration by a person who is not
empowered to do so, he can present the document for re-registration within four months from
the date he became aware of the fact that registration of document is invalid.

The document if registered under section 23A shall be deemed to have been registered from the
date of its original registration.

UNSTAMPED

If the document is not sufficiently stamped its presentation is still good presentation though
penalty under the Stamp Act can be levied (Mahaliram v. Upendra Nath)

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PLACE FOR PRESENTATION OF DOCUMENT

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Registration in Certain Cities

Section 30 (1) Any Registrar may in his discretion receive and register any document which might
be registered by any Sub-Registrar subordinate to him.

Section 31, registration is permitted in cases of necessity under extra - ordinary circumstances, at
the residence of the executant.

PRESENTING OF DOCUMENTS FOR REGISTRATION (SECTION 32-33)

Section 32 specifies the persons who can present documents for registration at the proper
registration office. Such persons are as follows: -

• Some person executing or claiming under the document;

• The representative or assignee of such person,

• The agent of such person, representative or assignee, duly authorised by power-of-attorney

(SPECIAL POWER OF ATTORNEY). An executed and authenticated in the manner
hereinafter mentioned as under (Section 33);

• If the principal at the time of executing the power of attorney, resides in any part of India
and the power of attorney executed before and authenticated by the Registrar or Sub-
Registrar or any Magistrate within whose district the principal resides;

• If the principal at the time aforesaid does not reside in India, a power of attorney executed
before and authenticated by a Notary Public or any court, Judge, Magistrate Council or Vice
Council or representative of the Central Government;

Provided that the following persons shall not be required to attend the registration office or court
for the purpose of executing any such power of attorney as is mentioned in clause (a) and (b) of
this section namely :-

i. Persons who by reason of bodily infirmity are unable without risk or serious
inconvenience so to attend;

ii. Persons who are in jail under civil or criminal process; and

iii. Persons exempt by law from personal appearance in court. (Under sec.38)
The above mentioned persons are exempt from appearing at registration office u/s. 38.

In case of every such person the registering officer shall either himself visit such place or go to
the house of such person, or to the jail in which he is confined, and examine him or issue a
commission for this examination.

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It is immaterial whether the registration is compulsory or optional; but, if it is presented for
registration by a person other than a party not mentioned in Section 32, such presentation is
wholly inoperative and the registration of such a document is void. (Kishore Chandra Singh v.
Ganesh Prashad Singh)

Under Section 33 of the Registration Act, a special power of attorney is required. A general power
of attorney will not do. Section 33 requires that a power of attorney, in order to be recognised as
giving authority to the agent to get the document registered, should be executed before and then
authenticated by the Registrar within whose district or sub-district the principal resides.

PARTICULARS TO BE ENDORSED ON DOCUMENTS ADMITTED TO REGISTRATION

1. On every document admitted to registration, other than a copy of a decree or order, or a

copy sent to a registering officer under Section 89, there shall be endorsed from time to time
the following particulars, namely:

• the signature and addition of every person admitting the execution of the document
and, if such execution has been admitted by the representative, assign or agent of any
person, the signature and addition of such representative, assign or agent;

• the signature and addition of every person examined in reference to such document
under any of the provisions of this Act; and

• Any payment of money or delivery of goods made in the presence of the registering
officer in reference to the execution of the document and any admission of receipt of
consideration, whole or in part, made in his presence in reference to such execution.

2. If any person admitting the execution of a document refuses to endorse the same, the
registering officer shall nevertheless register it, but shall at the same time endorse a note of
such refusal. (Sections 58 to 62)

REGISTERED DOCUMENT WHEN OPERATIVE SECTION - 47

A registered document shall operate from the time from which it would have commenced to
operate if no registration thereof had been required or made and not from the time of its
registration.

As between two registered documents, the date of execution determines the priority. Of the two
registered documents, executed by same persons in respect of the same property to two different
persons at two different times, the one which is executed first gets priority over the other,
although the former deed is registered subsequently to the later one (K.J. Nathan v. S.V. Maruthi
Rai,)

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SOME IMPORTANT TOPICS (SECTION 48 - 49)

Registered documents
relating to property
Registered documents relating to any property whether movable or
when to take effect
immovable shall take effect against any oral agreements or declaration
against oral
relating to such property unless followed by delivery of possession
agreement
which constitutes a valid transfer under any law for the time being in
force.
(section 48)

Section 49 of the Act provides that document required by Section 17 if

not registered shall not:

• Take affect against any immovable property comprised therein; or

Effect of non- • Confer any power to adopt; or

registration of
documents (section • Be received as evidence of any transaction affecting such property
49) or conferring such power. However, as provided in Section 49,
proviso, an unregistered document affecting immovable property
and required to be registered may be received as evidence of a
contract in a suit for part performance under Section 53A of the
Transfer of Property Act, 1882. &Suit for Specific Performance.

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After all the applicable provisions are complied with, the registering
officer shall endorse thereon a certificate containing the word
“registered” along with the number, and page of the book in which the
document has been copied. The certificate shall be signed, sealed and
Certificate of dated by the registering officer.
registration
The certificate of registration in respect of a document is prima facie
evidence that the document has been legally registered and raises a
presumption that the registering officer proceeded in accordance with
the law.

REASONS FOR REFUSAL TO REGISTER TO BE RECORDED (SECTION 71)

Every Sub-Registrar refusing to register a document, except on the ground that the property to
which it relates is not situated within his sub-district, shall make an order of refusal and record
his reasons for such order give a copy of the reasons so recorded to parties.

It may be noted that under- valuation of stamp duty is not a valid ground for refusing the
registration of a document. In such a case, the sub- registrar can guide the person to affix proper
stamp before he can register the document presented. If the sub-registrar is doubtful as to the
proper value of stamp affixed, he can refer the case to the collector of stamp to be adjudicated.

PROVISION RELATED TO APPEAL

Appeal to registrar from the order of sub-registrar refusing registration on grounds other than
denial of execution of document. [SECTION 72]

An appeal shall lie against an order of a Sub-Registrar refusing to admit a document to

registration to the Registrar to whom such Sub-Registrar is subordinate within 30 days from the
date of the order; and the Registrar may reverse or alter such order. This does not apply where
the refusal is on the ground of denial of execution. If the order of the Registrar directs the
document to be registered and the document is duly presented for registration within thirty (30)
days after the making of such order, the Sub- Registrar shall register the same,

Appeal to registrar when sub- registrar refusing to register the documents on the ground of
denial of execution. [SECTION 73, 74, 75]

Where the sub registrar has refused to register a Document on the ground of Denial of Execution,
then any person claiming under such document may, within 30 days, after the making of the
order of refusal, apply to the Registrar to whom such Sub- Registrar is subordinate in order to
establish his right to have the document registered. Where such an appeal is made to the
registrar, then he shall enquire to find out whether the document has been really executed or not.
If the Registrar finds that the Document has been executed, he shall order the document to be
registered. If the Document is duly presented for Registration within 30 days after the making of
such order, the Sub- Registrar shall register the same.

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[Such registration shall take effect as if the document has been registered when it was first
duly presented for registration.]

INSTITUTION OF SUIT IN CASE OF ORDER OF REFUSAL BY REGISTRAR

Where the Registrar refuses to order the document to be registered any person claiming under
such document, may, within thirty days after the making of the order of refusal, institute in the
Civil Court, within the local limits of whose original jurisdiction is situate the office in which the
document is sought to be registered, a suit for a decree directing the document to be
registered in such office if it be duly presented for registration within thirty days after the passing
of such decree.

INSTRUMENTS OF GIFT OF IMMOVABLE PROPERTY

In a case where the donor dies before registration, the document may be presented for
registration after his death and if registered it will have the same effect as registration in his life
time. On registration the deed of gift operates as from the date of execution.

It was held in Kalyana Sundram v. Karuppa, that while registration is a necessary solemnity for
the enforcement of a gift of immovable property, it does not suspend the gift until registration
actually takes place, when the instrument of gift has been handed over by the donor to the donee
and accepted by him, the former has done everything in his power to complete the donation and
to make it effective. And if it is presented by a person having necessary interest within the
prescribed period the Registrar must register it. Neither death nor the express revocation by the
donor is a ground for refusing registration, provided other conditions are complied with.

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16 RIGHT TO INFORMATION, 2005

INTRODUCTION

RIGHT TO INFORMATION, 2005

Throughout the world, the right to information is seen by many as the key to strengthening
participatory democracy and ensuring more people-centred development. In India also, the
Government enacted Right to Information (RTI) Act in 2005 allowing transparency and
autonomy, and access to accountability in public authorities.

It may be pointed out that the Right to Information Bill was passed by the Lok Sabha on May 11,
2005 and by the Rajya Sabha on May 12, 2005 and received the assent of the President on June 15,
2005. The Act considered as watershed legislation, is the most significant milestone in the history
of Right to Information movement in India allowing transparency and autonomy and access to
accountability.

The RTI Act confers on all citizens a right to information. The Right to Information Act, 2005
provides an effective framework for effectuating the right to information recognized under
Article 19 of the Constitution.

CONSTITUTIONAL VALIDITY OF ACT

Article 19(1) (a) of our Constitution guarantees to all citizens freedom of speech and expression.
Right to freedom of speech and expression in Article 19(1) (a) carries with it the right to propagate
and circulate one’s views and opinions subject to reasonable restrictions as mentioned above.
The prerequisite for enjoying this right is knowledge and information. Information adds
something “new to our awareness and removes vagueness of our ideas”.

Thus, a citizen has a right to receive information and that right is derived from the concept of
freedom of speech and expression comprised in Article 19(1) (a).

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SALIENT FEATURES OF THE ACT

• The RTI Act extends to the whole of India except Jammu & Kashmir.

• It shall apply to Public Authorities.

• All citizens shall have the right to information, subject to provisions of the Act.

• The Public Information Officers/Assistant Public Information Officers will be responsible

to deal with the requests for information and also to assist persons seeking information.

• Fee will be payable by the applicant depending on the nature of information sought.

• Certain categories of information have been exempted from disclosure under Section 8

and 9 of the Act.

IMPORTANT DEFINITIONS

“Public authority” means any authority or body or institution of self -government established
or constituted -

a. By any other law made by Parliament;

b. By and other law made by State Legislature;

c. By notification issued or order made by the appropriate Govt. Record" includes: —

i. any document, manuscript and file;

ii. any microfilm, and facsimile copy of a document;

iii. any reproduction of image or images embodied in such microfilm (d) any other
material produced by a computer or any other device

"Information" means any material in any form, including records, documents, memos, e-mails,
opinions, advices, press releases, circulars, orders, logbooks, contracts, reports, papers, samples,
models, data material held in any electronic form.

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"Right to information" means the right to information accessible under this Act which is held by
or under the control of any public authority and includes the right to—

a. taking notes, extracts, or certified copies of documents or records;

b. inspection of work, documents, records;

c. taking certified samples of material;

d. obtaining information in the form of diskettes, floppies, tapes, video cassettes or in any
other electronic mode or through printouts where such information is stored in a computer
or in any other device.

OBLIGATIONS OF PUBLIC AUTHORITY

Every public authority under the Act has been entrusted with a duty to maintain records and
publish manuals, rules, regulations, instructions, etc. in its possession as prescribed under the
Act.

DESIGNATION OF PUBLIC INFORMATION OFFICERS (PIO)

Every public authority has to: —

(a) Designate in all administrative units or offices Central or State Public Information
Officers to provide information to persons who have made a request for the information.

(b) Designate at each sub-divisional level or sub-district level Central Assistant or State
Assistant Public Information Officers to receive the applications for information or
appeals for forwarding the same to the Central or State Public Information Officers.

REQUEST FOR OBTAINING INFORMATION

The Act specifies the manner in which requests may be made by a citizen to the authority for
obtaining the information. It also provides for transferring the request to the other concerned
public authority who may hold the information.

a. Application is to be submitted in writing or electronically, with prescribed fee, to Public

Information Officer (PIO).

b. Information to be provided within 30 days.

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c. 35 days if application is made to assistant PIO

d. 40 days if interest of 3rd party involve

e. 48 hours where life or liberty is involved.

f. No action on application for 30 days is a deemed refusal.

DUTIES OF A PUBLIC INFORMATION OFFICER

PIO shall deal with requests from persons seeking information and where the request cannot be
made in writing, to render reasonable assistance to the person to reduce the same in writing. If
the information requested for is held by or its subject matter is closely connected with the
function of another public authority, the PIO shall transfer, within 5 days, the request to that
other public authority and inform the applicant immediately.

PIO may seek the assistance of any other officer for the proper discharge of his/her duties. PIO,
on receipt of a request, shall as expeditiously as possible, and in any case within 30 days of the
receipt of the request, either provide the information on payment of such fee as may be prescribed
or reject the request

Where the information requested for concerns the life or liberty of a person, the same shall be
provided within forty-eight hours of the receipt of the request. If the PIO fails to give decision on
the request within the period specified, he shall be deemed to have refused the request.

PARTIAL DISCLOSURE ALLOWED

Under Section 10 of the RTI Act, only that part of the record which does not contain any
information which is exempt from disclosure and which can reasonably be severed from any part
that contains exempt information, may be provided.

If allowing partial access, the PIO shall give a notice to the applicant, informing: -

a. That only part of the record requested, after severance of the record containing

information which is exempt from disclosure, is being provided;

b. The reasons for the decision, including any findings on any material question of fact,
referring to the material on which those findings were based;

c. The name and designation of the person giving the decision;

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d. Where a request has been rejected, the PIO shall communicate to the requester: -

i. The reasons for such rejection,

ii. The period within which an appeal against such rejection may be preferred, and

iii. The particulars of the Appellate Authority.

EXEMPTION FROM DISCLOSURE

Certain categories of information have been exempted from disclosure under the Act. These are:
-

a. Where disclosure prejudicially affects the sovereignty and integrity of India, the security,
strategic, scientific or economic interests of the State, relation with foreign State or lead to
incitement of an offence;

b. Information which has been expressly forbidden by any court or tribunal or the disclosure
of which may constitute contempt of court;

c. Where disclosure would cause a breach of privilege of Parliament or the State Legislature;

d. Information including commercial confidence, trade secrets or intellectual property, where

disclosure would harm competitive position of a third party, or available to a person in his
fiduciary relationship, unless larger public interest so warrants;

e. Information received in confidence from a foreign government;

f. Information the disclosure of which endangers life or physical safety of any person or
identifies confidential source of information or assistance;

g. Information that would impede the process of investigation or apprehension or

prosecution of offenders;

h. Cabinet papers including records of deliberations of the Council of Ministers, Secretaries

and other officers:

Provided that the decisions of Council of Ministers, the reasons thereof, and the material on the
basis of which the decisions were taken shall be made public after the decision has been taken.

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WHO IS EXCLUDED

The Act excludes Central Intelligence and Security agencies specified in the Second Schedule like
IB, R&AW, Directorate of Revenue Intelligence, Central Economic Intelligence Bureau,
Directorate of Enforcement, Narcotics Control Bureau, BSF, CRPF, ITBP, CISF, NSG, Assam
Rifles, the Crime Branch-CID-CB, and Lakshadweep Police etc. Agencies specified by the State
Governments through a Notification will also be excluded.

The exclusion, however, is not absolute and these organizations have an obligation to provide
information pertaining to allegations of corruption and human rights violations. Further,
information relating to allegations of human rights violation shall be given only with the
approval of the Central Information Commission within forty-five days from the date of the
receipt of request.

APPELLATE AUTHORITIES

• request within the specified time limits who thinks the fees charged are unreasonable;
who thinks information given is incomplete or false or misleading; and

• If the Commission feels satisfied, an enquiry may be initiated and while initiating an
enquiry the Commission has same powers as vested in a Civil Court.

Any person who does not receive a decision within the specified time or is aggrieved by a
decision of the PIO may file an appeal under the Act.

First Appeal. First appeal to the officer senior in rank to the PIO in the concerned Public
Authority within 30 days from the expiry of the prescribed time limit or from the receipt of the
decision (delay may be condoned by the Appellate Authority if sufficient cause is shown).

Second Appeal: Second appeal to the Central Information Commission or the State Information
Commission as the case may be, within 90 days of the date on which the decision was given or
should have been made by the First Appellate Authority (delay may be condoned by the
Commission if sufficient cause is shown).

Third Party appeal against PIO's decision must be filed within 30 days before first Appellate
Authority; and, within 90 days of the decision on the first appeal, before the appropriate
Information Commission which is the second appellate authority.

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Burden of proving that denial of information was justified lies with the PIO. First Appeal shall
be disposed of within 30 days from the date of its receipt or within such extended period not
exceeding a total of forty-five days from the date of filing thereof, for reasons to be recorded in
writing. Time period could be extended by 15 days if necessary. (Section 19)

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INFORMATION COMMISSIONS

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POWERS OF INFORMATION COMMISSIONS

The Central Information Commission/State Information Commission has a duty to receive

complaints from any person

a. who has not been able to submit an information request because a PIO has not been
appointed

b. who has been refused information that was requested

c. who has received no response to his/her information request within the specified time
limits

d. who thinks the fees charged are unreasonable

e. who thinks information given is incomplete or false or misleading

f. any other matter relating to obtaining information under this law.

If the Commission feels satisfied, an enquiry may be initiated and while initiating an
enquiry the Commission has same powers as vested in a Civil Court. The Central
Information Commission or the State Information Commission during the inquiry of any
complaint under this Act may examine any record which is under the control of the public
authority, and no such record may be withheld from it on any grounds. (Section 18)

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PENALTIES
Section 20 of act imposes penalty on public information officer (PIO) for failing to provide
information. Every PIO will be liable for fine of Rs. 250 per day, up to maximum of Rs. 25,000/-
for

a. Not accepting an application

b. Malafidely denying information

c. Destroying information that has been requested

d. Knowingly give wrong information

e. Delaying information

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17 INFORMATION TECHNOLOGY ACT,2000

INTRODUCTION

India is the world's largest democracy. The citizens of Democratic India elect representatives and
put him in power. Right to Information Act, 2005 (RTI) was introduced to empower the citizens
for the purpose of promoting transparency and accountability in the working of the Government,
contain corruption, and make our democracy work for the people in real sense. Accordingly, RTI
makes responsible/accountable to the public representatives (i.e. MPs & MLAs) therefore, they
cannot use public funds carelessly. It extends to whole of India except the State of Jammu and
Kashmir.

Right to Know

The right to know is essential in participatory democracy. It has its roots in Article 19 & Article
21 of the Constitution of India. A person has a right to hold a particular opinion. But to sustain
that opinion information is needed. For sustaining and nurturing that opinion it becomes
necessary to receive information. Article 21 gives a right to know which include a right to receive
information.

The interesting thing to be noticed over here is that the right to receive information has its roots
in right to freedom of speech and expression. Article 19(l)(a) of our Constitution guarantees to
all citizens freedom of speech and expression under reasonable restrictions. A citizen can
effectively use his right to express and speech only if he has information.

For example: If your teacher asks you a question in the class, will you be able to answer the
question if you have no information about it? Obviously, No. You will be able to answer the
question and express your views about it only if you have knowledge about the topic. Similarly
you will be able to effectively use your right to expression and speech only if you have
information. Thus, a citizen has a right to receive information and that right is derived from the

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concept of freedom of speech and expression comprised in Article 19(l)(a). The State on one hand
is under an obligation to respect the Fundamental Rights of the citizens, and on the other hand
has an obligation to make sure that these rights are meaningfully and effectively enjoyed by one
and all.

OBJECTIVE OF THE ACT

The objective of the Act is to promote transparency and accountability of the Public Authorities.
It has codified the citizen's right to get information.

DOCUMENTS OR TRANSACTIONS TO WHICH THE ACT SHALE NOT APPLY

1. A negotiable instrument (other than a cheque) as defined in section 13 of the Negotiable

Instruments Act, 1881.

2. A power-of-attorney as defined in section IA of the Powers-of-Attorney Act, 1882.

3. A trust as defined in section 3 of the Indian Trust Act, 1882.

4. A will as defined in clause (h) of section 2 of the Indian Succession Act, 1925

5. Any contract for the sale or conveyance of immovable property or any interest in such
property.

, SECTION 2- DEFINITIONS OF BASIC EXPRESSIONS

S.NO. DEFINITION PROVISIONS

“ACCESS” with its grammatical variations and cognate

expressions means entering, instructing or communicating
1 ACCESS with the logical, arithmetical, or memory function resources
of a computer, computer system or computer network.
[Section 2(1)(a)]

“ASYMMETRIC CRYPTO SYSTEM” means a system of a

ASYMMETRIC secure key pair consisting of a private key for creating a digital
2
CRYPTO SYSTEM signature and a public key to verify the digital signature
[Section 2(1)(f)]

“COMPUTER” means any electronic, magnetic, optical or

other high-speed data processing device or system which
performs logical, arithmetic, and memory functions, by
manipulations of electronic, magnetic or optical impulses, and
3 COMPUTER
includes all input, output, processing, storage, computer
software, or communication facilities which are connected or
related to the computer in a computer system or computer
network. [Section 2(1)(i)]

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“COMPUTER NETWORK” means the interconnection of one
or more computers through –

i. the use of satellite, microwave, terrestrial line or other

COMPUTER communication media; and
4 NETWORK”
ii. terminals or a complex consisting of two or more
interconnected computers, whether or not the
interconnection is continuously maintained. [Section
2(1)(i)]

COMPUTER RESOURCE“means computer, computer

system, computer network, data, computer database or
COMPUTER software. [Section 2(1)(k)]
5
RESOURCE

“COMPUTER SYSTEM “means a device or collection of

devices, including input and output support devices and
excluding calculators which are not programmable and
capable of being used in conjunction with external files, which
COMPUTER SYSTEM
6 contain computer programs, electronic instructions, input
data, and output data, that performs logic, arithmetic, data
storage and retrieval, communication control and other
functions. [Section 2(1)(l)]

“DIGITAL SIGNATURE” means authentication of any

electronic record by a subscriber by means of an electronic
DIGITAL SIGNATURE
7 method or procedure in accordance with the provisions of
Section 3. [Section 2(1)(p)]

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“ELECTRONIC RECORD” means data, recorded or data

ELECTRONIC generated, image or sound stored, received or sent in an
8 RECORD electronic form or microfilm or computer-generated micro
fiche. [Section 2(1)(t)]

“ELECTRONIC SIGNATURE” means authentication of any

ELECTRONIC electronic record by a subscriber by means of the electronic
9 SIGNATURE technique specified in the Second Schedule and includes
digital signature. [Section 2(1)(ta)]

ELECTRONIC “ELECTRONIC SIGNATURE CERTIFICATE” means an

SIGNATURE Electronic Signature Certificate issued under section 35 and
10
CERTIFICATE includes Digital Signature Certificate. [Section 2(1)(tb)]

“INFORMATION” includes data, message, text, images,

sound, voice, codes, computer programs, software and data
INFORMATION
11 bases or microfilm or computer-generated micro fiche.
[Section 2(1)(v)]

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“KEY PAIR” in an asymmetric crypto system, means a private

key and its mathematically related public key, which are so
KEY PAIR
12 related that the public key can verify a digital signature
created by the private key, [Section 2(1)(x)]

“ORIGINATOR” means a person who sends, generates, stores

or transmits any electronic message or causes any electronic
ORIGINATOR message to be sent, generated, stored or transmitted to any
13
other person, but does not include an intermediary. [Section
2(1)(za)]

PRIVATE KEY “PRIVATE KEY” means the key of a key pair, used to create a
14 digital signature. [Section 2(1)(zc)]

PUBLIC KEY “PUBLIC KEY “means the key of a key pair, used to verify a
digital signature and listed in the Digital Signature Certificate.
15
[Section 2(1 )(zd)]

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“SECURE SYSTEM” means computer hardware, software,
and procedure that-

• are reasonably secure from unauthorized access and

misuse;

SECURE SYSTEM • provide a reasonable level of reliability and correct

16
operation;

• are reasonably suited to performing the intended

functions; and

adhere to generally accepted security procedures;

DIGITAL SIGNATURE AND ELECTRONIC SIGNATURE

Digital signature (i.e. authentication of an electronic record by a subscriber, by electronic means)

is recognized as a valid method of authentication. The authentication is to be affected by the use
of “asymmetric crypto system and hash function”, which envelop and transform electronic
record into another electronic record. [Sections 3(1), 3(2)]

Verification of the electronic record is done by the use of a public key of the subscriber. [Section
3(3)] The private key and the public key are unique to the subscriber and constitute a functioning
“key pair”.

Section 3 A deals with electronic signature. Section 3A(1) provides that notwithstanding
anything contained in section 3(1), but subject to the provisions of sub-section (2), a subscriber
may authenticate any electronic record by such electronic signature or electronic authentication
technique which

a. is considered reliable; and

b. may be specified in the Second Schedule.

For the purposes of above any electronic signature or electronic authentication technique shall
be considered reliable if

a. the signature creation data or the authentication data are, within the context in which they
are used, linked to the signatory or, as the case may be, the authenticator and to no other
person;

b. the signature creation data or the authentication data were, at the time of signing, under
the control of the signatory or, as the case may be, the authenticator and of no other person;

c. any alteration to the electronic signature made after affixing such signature is detectable;

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d. any alteration to the information made after its authentication by electronic signature is
detectable; and

e. it fulfils such other conditions which may be prescribed.

ELECTRONIC GOVERNANCE (LEGAL RECOGNITION OF ELECTRONIC RECORDS)

The Act grants legal recognition to electronic records by laying down that where (by any law)
“information” or any other matter is to be in:

a. writing or

b. typewritten form or

c. printed form, then, such requirement is satisfied, if such information or matter is:

d. rendered or made available in an electronic form; and

e. accessible, so as to be usable for a subsequent reference. (Section 4)

PRIVATE TRANSACTIONS

Section 4 of the Information Technology Act practically equates electronic record with a manual
or typed or printed record.
Section 5 deals with legal recognition of electronic signatures. It states that where any law
provides that information or any other matter shall be authenticated by affixing the signature or
any document shall be signed or bear the signature of any person, then, notwithstanding
anything contained in such law, such requirement shall be deemed to have been satisfied, if such
information or matter is authenticated by means of electronic signature affixed in such manner
as may be prescribed by the Central Government.
It may be noted that “signed”, with its grammatical variations and cognate expressions, shall,
with reference to a person, mean affixing of his hand-written signature or any mark on any
document and the expression signature” shall be construed accordingly.

Public records
Above provisions are primarily intended for private transactions. The Act then proceeds to bring
in the regime of electronic records and electronic signature in public records, by making an
analogous provision which grants recognition to electronic records and electronic record
signatures, in cases where any law provides for

a. the filing of any form, application or any other document with a Governmental office or
agency or

b. the grant of any license, permit etc. or

c. the receipt or payment of money in a particular manner. (Section 6)

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Delivery of services by service provider

According to Section 6A the appropriate Government may, for the purposes of this Chapter and
for efficient delivery of services to the public through electronic means authorize, by order, any
service provider to set up, maintain and upgrade the computerized facilities and perform such
other services as it may specify, by notification in the Official Gazette. It may be noted that service
provider so authorized includes any individual, private agency, private company, partnership
firm, sole proprietor firm or any such other body or agency which has been granted permission
by the appropriate Government to offer services through electronic means in accordance with
the policy governing such service sector.

RETENTION OF INFORMATION

The Act also seeks to permit the retention of information in electronic form, where any law
provides that certain documents, records or information shall be retained for any specific period.
Certain conditions as to accessibility, format etc. are also laid down. (Section 7)

AUDIT OF DOCUMENTS MAINTAINED IN ELECTRONIC FORM

Where in any law for the time being in force, there is a provision for audit of documents, records
or information, that provision shall also be applicable for audit of documents, records or
information processed and maintained in the electronic form (Section 7A)

SUBORDINATE LEGISLATION

Subordinate legislation is also authorized, by the Act, to be published in the Official Gazette or
the electronic Gazette, and the date of its first publication in either of the two Gazette shall be
deemed to be the date of publication. (Section 8)

But the provisions summarized above shall not confer any right upon any person to insist, that
any Government agency shall accept, issue etc. any document in electronic form or effect any
monetary transaction in electronic form. (Section 9)

VALIDITY OF CONTRACTS FORMED THROUGH ELECTRONIC MEANS

As per section 10A of the Act, where in a contract formation, the communication of proposals,
the acceptance of proposals, the revocation of proposals and acceptances, as the case may be, are
expressed in electronic form or by means of an electronic records, such contract shall not be
deemed to be unenforceable solely on the ground that such electronic form or means was used
for that purpose

ATTRIBUTION AND DISPATCH OF ELECTRONIC RECORDS

Since, in an electronic record, the maker remains behind the curtain, it was considered desirable
to make a provision for “attribution” of the record. An electronic record is attributed to the
“originator”.

Broadly, the “originator” is the person at whose instance it was sent in the following cases -

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a. if it was sent by the originator himself; or

b. if it was sent by a person authorized to act on behalf of the originator in respect of that
electronic record; or

c. if it was sent by an information system programmed by or on behalf of the originator to

operate automatically. (Section 11)

Regarding acknowledgement of receipt of electronic records, the Act provides that where there
is no agreement that the acknowledgment be given in a particular form etc. then the
acknowledgement may be given by:

a. any communication by the addressee (automated or otherwise) or

b. any conduct of the addressee which is sufficient to indicate to the originator that the
electronic record has been received. [Section 12(1)]

Special provisions have been made for cases where the originator has stipulated for receipt of
acknowledgment, [Section 12 (b)] or where the acknowledgement is not received by the
originator in time. [Section 12(2), 12(3)]

TIME AND PLACE OF DISPATCH ETC.

After these provisions, there follows a provision which is of considerable significance for the law
of contracts.

The date of offer and the date of acceptance are crucial, in determining whether and which
contract has come into existence. The two terminal points - dispatch and receipt, are dealt with,
in detail. Subject to agreement between the parties, the dispatch of an electronic record occurs,
when it enters a “computer resource” outside the control of the originator. [Section 13 (1)]

Computer resource”, as defined in Section 2 (k), means a computer, computer system, computer
network, data, computer database or software.

TIME OF RECEIPT

As regards the time of receipt of electronic records, two situations are dealt with, separately.
Subject to agreement, if the addressee has designated a computer resource for receipt, then
receipt occurs when the electronic record enters the designated resource. However, if the record
is sent to a computer resource of the addressee which is not the designated resource, then receipt
occurs at the time when the electronic record is retrieved by the addressee. [Section 13(2)(a)]

If the addressee has not designated a computer resource (with or without specified timings), then
receipt is deemed to occur, when the electronic record enters the computer resource of the
addressee. [Sections 13(1), 13(2)] Above provisions apply, even where the place of location of the
computer is different from the deemed place of receipt.

The Act also contains provisions as to the place of dispatch and receipt. [Section 13(3)]

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SECURE ELECTRONIC RECORDS

The Central Government is required, by the Act, to prescribe the security procedure for electronic
records, having regard to the commercial circumstances prevailing at the time when the
procedure is used (Section 16). When the procedure has been applied to an electronic record at a
specific point of time, then such record is deemed to be a secure electronic record, from such
point of time to the time of verification. (Sectionl4)

An electronic signature shall be deemed to be a secure electronic signature if

a. the signature creation data, at the time of affixing signature, was under the exclusive
control of signatory and no other person; and

b. the signature creation data was stored and affixed in such exclusive manner as may be
prescribed. (Section 15)

CERTIFYING AUTHORITIES

The Act contains detailed provisions as to “Certifying Authorities” (Sections 17-34). A Certifying
Authority is expected to reliably identify persons applying for “signature key certificates”,
reliably verify their legal capacity and confirm the attribution of a public signature key to an
identified physical person by means of a signature key certificate. To regulate the Certifying
Authorities, there is a Controller of Certifying Authorities.
(Section 17) Obligations of Certifying Authorities are also set out, in the Act. (Sections 30-34)

ELECTRONIC SIGNATURE CERTIFICATES

Procedure of obtaining electronic signature Certificate:

a. Any person may make an application in prescribed form to the Certifying Authority for
the issue of electronic signature Certificate in such form as may be prescribed by the Central
Government.

b. Every such application shall be accompanied by prescribed fees

c. Every such application shall be accompanied by a certification practice statement or where

there is no such statement, a statement containing such particulars, as may be specified by
regulations.

d. On receipt of an application, the Certifying Authority may, after consideration of the

certification practice statement or the other statement and after making such enquiries as it
may deem fit, grant the electronic signature Certificate or for reasons to be recorded in
writing, reject the application.

It may be noted that no application shall be rejected unless the applicant has been given a
reasonable opportunity of showing cause against the proposed rejection.

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PENALTIES AND ADJUDICATIONS

Section 43 provides that if any person without permission of the owner or any other person who
is in charge of a computer, computer system or computer network, -

a. accesses or secures access to such computer, computer system or computer network or

computer resource;

b. downloads, copies or extracts any data, computer data base or information from such
computer, computer system or computer network including information or data held or
stored in any removable storage medium;

c. introduces or causes to be introduced any computer contaminant or computer virus into

any computer, computer system or computer network;

d. damages or causes to be damaged any computer, computer system or computer network,

data, computer data base or any other programmes residing in such computer, computer
system or computer network;

e. disrupts or causes disruption of any computer, computer system or computer network;

f. denies or causes the denial of access to any person authorized to access any computer,
computer system or computer network by any means;

g. provides any assistance to any person to facilitate access to a computer, computer system
or computer network in contravention of the provisions of this Act, rules or regulations
made thereunder;

h. charges the services availed of by a person to the account of another person by tampering
with or manipulating any computer, computer system, or computer network;

i. destroys, deletes or alters any information residing in a computer resource or diminishes

its value or utility or affects it injuriously by any means;

j. steal, conceal, destroys or alters or causes any person to steal, conceal, destroy or alter any
computer source code used for a computer resource with an intention to cause damage; he
shall be liable to pay damages by way of compensation to the person so affected.

COMPENSATION FOR FAILURE TO PROTECT DATA

Where a body corporate, possessing, dealing or handling any sensitive personal data or
information in a computer resource which it owns, controls or operates, is negligent in
implementing and maintaining reasonable security practices and procedures and thereby causes
wrongful loss or wrongful gain to any person, such body corporate shall be liable to pay damages
by way of compensation to the person so affected.

(Section 43A) It may be noted that body corporate” means any company and includes a firm, sole
proprietorship or other association of individuals engaged in commercial or professional
activities

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A person failing to provide information or failing to file a return etc. (as required by the Act), has
to pay a penalty not exceeding ten thousand rupees for every day during which the failure
continues. (Section 44) Contravention of a rule or regulation attracts liability to pay compensation
up to 25,000 rupees, to the person affected by such contravention or to pay penalty up to that
amount. (Section 45)

ADJUDICATING OFFICER

An adjudication officer is to be appointed by the Central Government for adjudging whether any
person has committed a contravention of the Act or of any rule, regulation, direction or order
issued under the Act. He may impose penalty or award compensation in accordance with the
provisions of the relevant section (Section 46).

The Act takes-care to set out the factors to be considered by the Adjudicating officer, in adjudging
the quantum of compensation under this Chapter. He has to have due regard to the following
factors:

a. the amount of gain of unfair advantage (wherever quantifiable), made as a result of the
default;

b. the amount of loss caused to any person as a result of the default; and

c. the repetitive nature of the default.

APPELLATE TRIBUNAL (SECTIONS 48-62)

The Telecom Disputes Settlement and Appellate Tribunal established under section 14 of the
Telecom Regulatory Authority of India Act, 1997, shall, on and from the commencement of Part
XIV of Chapter VI of the Finance Act, 2017 (7 of 2017), be the Appellate Tribunal for the purposes
of this Act and the said Appellate Tribunal shall exercise the jurisdiction, powers and authority
conferred on it by or under this Act.

The Central Government shall specify, by notification the matters and places in relation to which
the Appellate Tribunal may exercise jurisdiction.

Any person aggrieved by an order of the Controller of Certifying Authorities or of the adjudicator
can appeal to the Appellate Tribunal, within 45 days. (Section 57)

Any person aggrieved by “any decision or order” of the Appellate Tribunal may appeal to the
High Court, within 60 days. Jurisdiction of Civil Courts is barred, in respect of any matter which
an adjudicating officer or the Appellate Tribunal has power to determine.

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TAMPERING WITH COMPUTER SOURCE DOCUMENTS

Whoever knowingly or intentionally conceals, destroys or alters or intentionally or knowingly

causes another to conceal, destroy, or alter any computer source code used for a computer,
computer programme, computer system or computer network, when the computer source code
is required to be kept or maintained by law for the time being in force, shall be punishable with
imprisonment up to three years, or with fine which may extend up to two lakh rupees, or with
both.

It may be noted that “computer source code” means the listing of programmes, computer
commands, design and layout and programme analysis of computer resource in any form
(Section 65)

COMPUTER RELATED OFFENCES

If any person, dishonestly or fraudulently, does any act referred to in section 43, he shall be
punishable with imprisonment for a term which may extend to three years or with fine which
may extend to five lakh rupees or with both. (Section 66)

The offences listed in the Act are the following -

• Dishonestly receiving stolen computer resource or communication device

• Identity theft

• Cheating by personation by using computer resource

• Violation of privacy

• Cyber terrorism

• Publishing or transmitting of material containing sexually explicit act, etc., in electronic

form

• Publishing or transmitting of material depicting children in sexually explicit act, etc., in

electronic form

• Misrepresentation

• Breach of confidentiality and privacy

• Disclosure of information in breach of lawful contract

• Publishing electronic signature Certificate false in certain particulars

• Publication for fraudulent purpose.

This Chapter XI of the IT Act also contains certain provisions empowering the Controller of
Certifying Authorities to issue certain directions to certifying Authorities (Section 68).

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Further, as per section 69 where the Central Government or a State Government or any of its
officers specially authorized by the Central Government or the State Government, as the case
may be, in this behalf may, if satisfied that it is necessary or expedient so to do , in the interest of
the sovereignty or integrity of India, defense of India, security of the State, friendly relations with
foreign States or public order or for preventing incitement to the commission of any cognizable
offence relating to above or for investigation of any offence, it may subject to the provisions of
safeguard and procedure as may be prescribed , for reasons to be recorded in writing, by order,
direct any agency of the appropriate Government to intercept, monitor or decrypt or cause to be
intercepted or monitored or decrypted any information generated, transmitted, received or
stored in any computer resource.

EXTRA TERRITORIAL OPERATION

Extra-territorial operation of the Act is provided for, by enacting that the provisions of the Act
apply to any offence or contravention committed outside India by any person, irrespective of his
nationality, if the act or conduct in question involves a computer, computer system or computer
network located in India. (Section 75)

LIABILITY OF NETWORK SERVICE PROVIDERS

The Internet system depends, for its working, on network service providers- i.e. intermediaries.
An “intermediary”, with respect to any particular electronic records, means any person who on
behalf of another person receives, stores or transmits that record or provides any service with
respect to that record and includes telecom service providers, network service providers, internet
service providers, web-hosting service providers, search engines, online payment sites, online-
auction sites, online-market places and cybercafés.(Section 2(1)(w).

In his capacity as an intermediary, a network service provider may have to handle matter which
may contravene the Act. To avoid such a consequence, the Act declares that no network service
provider shall be liable “under this Act, rule or regulation made thereunder”, for any third party
information or data made available by him, if he proves that the offence or contravention was
committed without his knowledge or that he had exercised all due diligence to prevent the
commission of such offence or contravention. (Section 79)

ADV. CHIRAG CHOTRANI NOTHING GREAT EVER CAME THAT EASY… YES ACADEMY
Adv Chirag Chotrani
Adv Chirag Chotrani is a young yet
experienced faculty in the eld of
Law. From being the topper of his
batch, to creating many All India
Rankers in the Field of Company
Secretary, Chirag has proved his
academic capabilities time and
again. 

Chirag is a Commerce and Law

Graduate and holds a Masters
Degree in Corporate Law, earned
specialisation in Corporate Laws
and in Arbitration Law and is
currently completing his PHd in
Corporate Laws.

The ease with which this faculty

introduces the concepts is
commendable and every student
who has studied under him has
passed in his subjects with ying
colours. From the start of his
career till now he has always been
into teaching and has served in
many Prestigious Institutions and is
presently the Top Educator for CS
Category at UNACADEMY
Platform which currently caters to
10 Million students across the
country.