Month: May 2020

National legislation Drafting competition: UILS, Punjab University

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NAME OF THE EVENT: National legislation drafting Competition
ORGANIZER: University legislation of legal studies, Punjab university
ELIGIBILITY: pursuing integrated 5th-year Ll.b or 3rd-year Ll.b Course
FEE DETAILS: Rs. 300 registration fee for the team
The amount shall be transferred Via bank transfer.
DEADLINES: 30th May 2020
AWARDS: Best team:7500/ cash
1st runner up: 3500/cash
2nd runner up:1500/ cash
All the participants shall be awarded Certificate.

EMAIL :lawdraftingcjpc@gmail.com

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Theory of Relevancy under Evidence Law

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Mansi Tyagi, is a student of Symbiosis Law School, Pune. In this article, she has discussed the rules and principles concerning the theory of relevancy under Evidence Law. Also, she has tried explaining the distinction between admissibility and relevancy of facts. And in conclusion, she has tried putting forth the exceptions to the relevant facts getting admissible in a court of law.

What is Evidence?

One which provides proof, or one which furnishes reasons to believe the trueness of the facts, in general terms, is known as an Evidence. To be more technical, Section-3, of the Evidence Act, 1872, bifurcates evidence to device oral and documentary evidence[1]. While oral evidence refers to the statements made by the witnesses referring to the facts in issue permitted or required by courts; the documentary evidence consists of all documents submitted to the court for inspection. Opposed to the glittery emotional speeches in a legal house of a movie, the real-life legal proceedings work on evidence for reaching conclusions. Evidence facilitates the course of justice by guiding them[2]. But before any evidence is relied upon by the courts, the evidence is tested on three grounds:

  1. Relevancy
  2. Admissibility
  3. Weight

Relying on the relevancy, the evidence is admitted. And once evidence is admitted, its weight is determined by its probative value.

What is a Relevant Fact?

Before anything it is prima facie important to know what is a relevant fact and how does it get admitted in the court of law? Theory of Relevancy is the first and foremost hurdle that is applied to any evidence and any and every evidence needs to be cleared for getting admitted in the court of law. Relevant facts, also known as factum probans, are the facts which will be used to prove the genuineness of the facts in issue, i.e. factum probandum. In the case of ‘DPP v. Kilbourne’[3], the English Supreme Court defined relevant evidence as the one that makes the fact in issue more or less “probable”. Chapter 2 of the Indian Evidence Act, 1872 comprising sections 5-16 lays down what construes a relevant fact and what does not. While the chapter gives relevance to evidence disclosing motive, purpose, cause, occasion, etc. for its admissibility, it also rules out those which are irrelevant to the facts in issue. An irrelevant evidence will never get admissibility. Same ambiguity persists for an evidence which has relevance to the fact in issue in the case but does not get admitted.automatically. If the evidence is not admitted, it is not considered for the case in the process. However, after the evidence is admitted, the courts discuss and decide upon its weight for the purpose of delivering a case. In the case of ‘Davies v. DPP’[4], it was held that the admissible evidence which is relevant is capable of corroborating as well. Despite these general rules, there are exceptions where even irrelevant facts are admitted as evidence. ‘Relevant to prove guilty’ and ‘capable of corroborating’ are two unequal phrases. Section 11 of the Indian Evidence Act, 1872 talks about the cases in which the otherwise seemingly irrelevant facts are admitted as relevant facts. There are two conditions for such an exception to be made; firstly, if the fact is inconsistent and secondly, despite this inconsistency, they make the issues in fact highly probable or improbable[5].

Relevancy v. Admissibility

In many Indian as well as English cases, this has always been a voracious task to make a clear distinction between relevancy and admissibility. The rules of admissibility, in fact, are related to the relevancy of evidence. The terms may sound synonymous to a great extent. However, all relevant facts are not admissible. Also, there are distinctions between the legal implication of both the terms[6]. The relevancy of any fact does not ipso facto make it admissible. In fact, the question of admissibility is the one decided by the court of law. In the case of ‘Sris Chandra Nandy v. Rakhalananda’[7] Lord Atkin laid down that “ …it is not open for any judge to exercise a dispensing power, and admit evidence not admissible by the statute because to him it appears that the irregular evidence would throw light upon the issue..”. Section 136[8] of the Indian Evidence Act, 1872 gives statutory discretion to a judge to admit any evidence if he deems it fit on the proofs of relevance given by the party proposing such facts to be relevant evidence. In another case ruled by the Gujarat High court ‘State of Gujarat v. Ashulal Nanji Bishnoi’[9] it was held that admissibility and relevancy of facts relied on the court of law to decide. However, it does not erase the provision to record these facts despite their rejection from getting admitted on the basis of relevance. In other words, there is no specified provision that the facts laid down as irrelevant and inadmissible by the judge cannot be placed on record. But, on the other hand, mere admissibility does not prove the relevancy of a fact. After the admissibility, it is the weight of each fact that determines its probative value which in the case is decided circumstantially by the court of law in each case. Despite the general rules, there are certain specific distinctions between the otherwise synonymously used terms. Also known as Logical relevance, relevant facts are the ones tested on the basis of logic, knowledge, experience or common sense. On the other hand, also known as legally relevant, admissibility depends on relevant facts of high probative value and how it affects the facts in issue for rendering justice. Thus, we can say the thin line between the two is that of logic and law. While relevancy is about logic, admissibility is about the law. Also, while it is the lawyers who decide the relevancy of any fact to the factum probandum, it is the court of law which decides upon the final admissibility of any fact, be it relevant or irrelevant. Lastly, we can conclude that every admissible fact is relevant to a fact in issue; however, such is not the case with all relevant facts since not all relevant facts are admissible in the court of law.

Which facts are admissible?

It now becomes important to us to know about the facts which are exceptions to the theory of relevancy. The facts which are relevant yet inadmissible and the facts which are irrelevant yet admissible. As mentioned earlier, the relevancy has an effect on its admissibility in the court of law. However, it is not necessary that all relevant facts are admitted. For example, private spousal communication during their marriage, or the privileged communication like that between a lawyer and his/her client, or a confession made to a police officer being in custody, etc. despite being relevant to any fact in issue cannot be admitted in the court of law. Also, on the same hand, the questions asked in cross-examination of a witness’ credibility may not be relevant to the fact in issue, but despite it being admitted. In the case of ‘R.M. Malkani v. State of Maharashtra’[10] the apex court held that the very core of the criminal jurisprudence is to regard any accused innocent until proven guilty. Therefore, even if any fact is relevant to the fact in issue, if because of the rules of admissibility there is an unfair disadvantage to the accused, the court of law may reject its admission. A dying declaration made about the cause of death is treated as a relevant fact for admissibility despite the person making it is dead[11]. Similarly, on the other hand, section 6 of the Indian Evidence Act, 1872[12] restricts the admissibility of hearsay evidence. However, the exception is the Res Gestae principle. These are the statements despite being hearsay are admissible because of the immediacy with which they are made by a number of witnesses in concurrence to the events of a case. The rule for admissibility under the aforementioned section differs case to case only to give the judge the discretion to decide the relevance and reliability. And then there are conditions where otherwise irrelevant facts are admitted by virtue of section 11 of the concerning act. Thus, relevancy is one of the many factors leading to admissibility against any fact in issue, though it is somewhat more important to other factors.

Conclusion

Concluding this article, it is now justified to declare that relevancy is the test for admissibility. Also, there is no strict rule for such admissibility. Where an irrelevant fact may or not be admitted, there are exceptions even to the admissibility of relevant facts. Not every relevant fact is admitted, and not every irrelevant fact is inadmissible. Theory of Relevancy gets its operational start with the court of law accepting it for admission. However, non-admissibility of any fact irrespective of it being relevant or irrelevant does not render it ineligible to be stated on the record. And finally, it can be said that not all relevant facts are relevant but all admissible facts are relevant against the facts in issue.

[1] INDIAN EVIDENCE ACT, 1872  Section  3 – Interpretation clause.

[2] Ram Jas v. Surendra Nath, AIR 1980 All 385.

[3] DPP v. Kilbourne, 1973 AC 729.

[4] Davies v. DPP, (1954) AC 378.

[5] INDIAN EVIDENCE ACT, 1872  Section  11 – When facts not otherwise relevant become relevant.

[6] Ram Bihari Yadav v. State of Bihar, (1998) 4 SCC 517.

[7] Sris Chandra Nandy v. Rakhalananda, AIR 1941 PC 16.

[8] INDIAN EVIDENCE ACT, 1872  Section  136 – Judge to decide as to admissibility of evidence

[9] State of Gujarat v. Ashulal Nanji Bisnoi, (2002) 2 GCD 1488.

[10] R.M. Malkani v. State of Maharashtra, (1973) 1 SCC 471.

[11] INDIAN EVIDENCE ACT, 1872  Section  32 – Cases in which statement of relevant fact by person who is dead or cannot be found, etc., is relevant.

[12] INDIAN EVIDENCE ACT, 1872  Section  6 – Relevancy of facts forming part of same transaction.

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AN OVERVIEW ON TEST IDENTIFICATION PARADE

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This post is written by Anushree Tadge, 3rd year law student of ILS Law College, Pune, she tries to explain briefly what a test identification parade is and how it makes a significant contribution in the criminal law system in India.

INTRODUCTION TO TEST IDENTIFICATION PARADE

In Criminal trials, the most important step to follow as soon as the accused is arrested is confirming whether the accused is really the ‘accused’ as far as the crime scene is concerned. This test is extremely popular and is used as a means to examine the accuracy of the witness’s ability to identify the suspect amongst other unknown persons. Test identification parade is an effective tool in the investigation and with the correct procedure, it can be made admissible as evidence in the courts (corroborative evidence), the purpose is mainly to test and improve the credibility of existing substantial evidence in the case.

PROVISIONS AND ADMISSIBILITY

Section 9 of the Indian Evidence Act allows identification of the accused by the process of Test Identification Parade as well as the proofs to be all admissible in the courtroom, now it has to be understood that this ‘test’ is not compulsory to be conducted, the section 54 (a) of The Code of Criminal Procedure grants the process to allow the suspected to be presented for a test identification parade.

Very interestingly, Article 20(3) of the Constitution of India states that no person should be forced to be a witness against his own self, such principle is not violated with the test identification parade, this means that appearing for a test identification parade does not necessarily mean giving testimony in the Court of Law.

Such type of parade conducted for the purpose of identification in the investigation cannot be considered as substantial evidence it rather is taken up as corroborative evidence to support other facts and circumstances found in the case and used in the arguments to frame the ‘accused’

PROCEDURE AND PRECAUTIONS 

Procedures: Most importantly, the parade should be held as soon as possible, so that the victim or the witness doesn’t forget about the details essential for identification, as soon as the suspect is arrested the parade should be conducted. Delays are not taken positively in such cases by the courts of law. The magistrate should accompany the police when a test identification parade is carried on. The identifier should identify in both, the test identification parade as well as in the court. Also, the procedure should also take into account that the accused does not know the witness or victim before the commission of the crime, and the identifier must have observed the person for some time so as to identify him/her later on and in a sufficiently lit area.

Precautions: The police should make sure that they leave the place in order to the identifier identifying the person properly without haste, after making the required necessary arrangements, Except for the magistrate and identifier, they are allowed to be in place. For accuracy of results, a similar person to the accused must be made present along with the others and accused in a test identification parade ( Ratio minimum 1:5 and 1:10 ). Other witnesses are not allowed to be present during the process of one parade and are supposed to be kept far away from the identification parade. Also, precautions have to be taken that the accused changes positions after every witness identification takes place. 

WHETHER TEST IDENTIFICATION PARADE IS NECESSARY OR NOT:

Test Identification is usually necessary when the disputes are concerned with that of the identity of the accused, in cases where the victim never saw the accused in his/her life before the incident. When the victim experiences the act of crime and can identify the accused, a test parade is to be conducted, usually, in such cases, victims can observe the criminal but identify him at a later stage. Even keeping this in mind, the parade should be held as soon as possible and that too with the presence of the magistrate.

Test identification is not required in cases where both witness and accused are acquainted with each other as they live nearby or even closer. Test identification is done to support the existing evidence and confirm the genuineness of the same.

Also, if any form of other evidence is brought to the Court’s attention which the court can safely rely on and in doing so no party will have the right to question or even initiate the parade then it will is not be considered as any substantial evidence and even if the test is not performed admissibility of evidence in court in court shall not be affected. 

CRITICAL ANALYSIS

The credibility of this kind of test by the identifier with respect to the test identification parade, the credibility of such test vary from situation to situation and case to case. Many a times if the victim comes in a face to face contact may register a deep scar in the mind of the victim, they might remember the person and the act committed, place and even number of people involved. Factors like if the act was done during the day time? If it was in an open place, was there enough lighting for the identifier? All come into consideration…

In incidents where people covered their faces, the identification is not considered to be suitable as the identifier cannot identify the person, as well as in a situation where there lies a very huge difference in the commission of the act and the test to be conducted, it is generally the view of the court that it will further decide whether the parade should be held or not depending on facts and circumstances of the matter. 

CASE REFERENCE

In Raju Manjhi v. State of Bihar, the landmark case, the court stressed upon how the holding of test identification parade was not mandatory. The judgement was delivered by Hon’ble Mr Justice N. V. Ramana and Hon’ble Mr. Justice Mohan Shantanagoudar. On a regular night of 1999, around twelve people below 26 years committed the act of robbery into the house of Kamdeo Singh After the investigation started, many witnesses were found, although, during the test identification parade, no identification was done by the witnesses. The Court held that the identification test is conducted in a particular case only to help and support the investigation officer in a more accurate way. Now there is no provision mentioned in the Criminal Procedure Code which paves way for the investigating agency to hold or give any right to the ‘accused’ to demand the parade by any chance. Any failure to hold the parade would not make the evidence to be inadmissible for identification in Court. 

IDENTIFICATION BY PHOTOGRAPH?

Section 22 of the TADA- Terrorist and Disruptive Activities (Prevention) Act, 1987 states that: If a particular person is proclaimed to be the offender in any terrorist case, the evidence related to his identification by any witnesses on the basis of a photograph shall be as binding as the evidence of the parade.

IDENTIFICATION BY VOICE?

In the case of, Mohan Singh v. State of Bihar, it was held that identification of the accused by his/her voice was reliable as prior to the happening of the incident, the witness has had some kind of acquaintance with the accused. 

CONCLUSION

Since the procedure of test identification parade in India is already a sidetracked one and it does not even amount to substantive evidence, it’s an effect in the case proceedings is only as much as a ‘dot connector’. But it is strongly recommended to police officers that procedures regarding the parade and the specific course of any action to the investigating authorities must be clearly explained. The government should increase the number of features for more effectively conducting the test identification parade, places should be allotted, tinted windows, better interrogation, and facilities so that concerned persons can see what’s happening instead of only the magistrate, etc. For over a century now, test identification parades have been active in India, and they significantly contribute and help the investigation faster and solve the cases in a better and faster way.

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Analysing the Legality of Lockdown

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Nikhilesh Koundinya is a student of Symbiosis Law School, Pune. In this article, he has discussed the legal basis for a lockdown. He has examined the Epidemic Diseases Act and the Disaster Management Act at length with regards to the topic. To conclude he has looked at the factors to be improved so that we can better prepare for the next pandemic.

INTRODUCTION 

“Unprecedented events call for unprecedented moves”. This statement has been the entire basis of the lockdown which began on 24th March 2020 and is still continuing. The lockdown began as an initiative to counteract the Corona Virus which was named as a global pandemic by the World Health Organization (WHO). Before the lockdown, the prime minister imposed a Janta curfew on the country where people were restricted from coming out of their homes and which gave a flavour of how the next few months will turn out to be. In this article, we are going to be examining the legality of imposing a lockdown. An interesting fact about the lockdown was that after about a century the Epidemic Diseases Act was initiated to counteract the virus and provide steps to be taken by the government to impose the lockdown. Another act that played a key role was the Disaster Management Act (DMA) of 2005. 

USE OF THE DISASTER MANAGEMENT ACT (DMA), 2005 

The DMA 2005 defines a disaster as: 

a catastrophe, mishap, calamity or grave occurrence in any area, arising from natural or man-made causes, or by accident or negligence which results in substantial loss of life or human suffering or damage to, and destruction of, property, or damage to, or degradation of, environment, and is of such a nature or magnitude as to be beyond the coping capacity of the community of the affected area. 

According to this definition natural disasters such as earthquakes or tsunamis are included but instances such as epidemics or a virus breakthrough aren’t. This essentially means that the state couldn’t have imposed a lockdown under this definition. But the state classified the epidemic as a notified disaster which opens up the opportunity to classify it as a disaster and also provide assistance to the victims and states under the State Disaster Response Fund (SDRF). 

After announcing the lockdown, the government provided states with an action plan of how the lockdown would play out. This was done by the government pursuant to section 10 of the DMA which reads: 

The National Executive Committee shall assist the National Authority in the discharge of its functions and have the responsibility for implementing the policies and plans of the National Authority and ensure the compliance of directions issued by the Central Government for the purpose of disaster management in the country. The section also provides for the steps to be taken by the central government to handle the situation which are as follows: 

  1. Act as the central agency for making disaster management pans and ensuring execution. 
  2. Inform different ministries of the plan ahead 
  3. Monitor the implementation of the plans etc. 

There are many more initiatives and the authority responsible for executing these actions is the National Executive Committee which will be headed by the secretary to the government of India who has administrative control over the disaster management branch. This will also include officers from different ministries of the government including water, sanitation etc. who are going to be affected during the time of a disaster. The plan of action on how the executive committee will function and their powers and responsibilities will be dictated by the central government. 

EPIDEMIC DISEASES ACT, 1897 

In a situation where there is no explicit law in place, the diseases act made the lockdown legal as per section 2-A of the said act. Section 2-A of the act reads: 

When the Central Government is satisfied that India or any part thereof is visited by, or threatened with, an outbreak of any dangerous epidemic disease and that the ordinary provisions of the law for the time being in force are insufficient to prevent the outbreak of such disease or the spread thereof, the Central Government may take measures and prescribe regulations for the inspection of any ship or vessel leaving or arriving at any port in the territories to which this Act extends and for such detention thereof, or of any person intending to sail therein, or arriving thereby, as may be necessary.

Thus, the use of this act was extremely important with regards to the lockdown because as per this section there are two ingredients to be fulfilled

  1. When the central government is satisfied that India is affected by an epidemic or a disease which cannot be controlled or which is spreading at a rapid pace. This was well satisfied as the Corona cases slowly started climbing in the middle of February. 
  2. There was no law or provision in place to handle such a situation because the last epidemic of this scale had occurred a century ago which was popularly known as the Spanish flu. 

Hence with these two provisions being fulfilled the Epidemic Diseases Act, 1897 was used to impose the lockdown. 

CONSTITUTIONAL PERSPECTIVE 

There were many lawyers and jurists who pointed out that the term “Lockdown” has nowhere been defined under the Indian Law. Though there was no provision which defined this term the government was using the term as a means to restrict people’s freedom under article 19(1) of the constitution. But as seen above the imposition of the lockdown was under section 2-A of the diseases act which means there was a statutory basis for imposing the lockdown. 

PROBLEMS WITH LAW REVOLVING AROUND EPIDEMICS AND DISEASES 

The fundamental problem attached to any health emergency in the country is that the term “national calamity” has not been defined anywhere in any provision. There were efforts made by the government in 2001 to come up with a definition and insert it as a statutory provision but the committee responsible could not arrive at a decision. There is a growing need for this definition as it has been requested by the states a number of times. In fact, in 2013 when the Uttarakhand floods occurred the state government requested for enabling the provision. Another request was made in 2018 when the Kerala floods took place and the politicians in the government asked for the definition. Now the need has again risen for a definition and this should be the foremost objective of the government once the epidemic is resolved. 

Another aspect is to revamp laws that were made more than a century/decade ago. The Epidemic diseases act and the Disaster Management Act need some categorization of a national fund. They also need to take into consideration new steps to be performed once there is a virus outbreak. There needs to be specific laws in place to administer medical treatment on patients and to provide medical aid in the times of a crisis. 

“If all these steps are followed, we are looking at a situation where the world will live to see another day.”

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STRICT LIABILITY VERSUS ABSOLUTE LIABILITY

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This article has been written by Ritika Sharma, pursuing B.A. LL.B from Vivekananda Institute of Professional Studies, GGSIPU, Delhi. In this article, the concepts of absolute liability and strict liability has been discussed along with the differences of the same.

INTRODUCTION

The law of tort has been originated from the whole concept of English Common law. It has its roots within the same. The law of torts is actually the civil wrong which leads to civil damages.  Since this law is not codified, it becomes important to rely upon the precedents and jurisprudence in order to understand these principles. There have been numerous notions which have been confusing and require a deep and clear understanding. The general rule of tort liability is that the person who causes damage should pay and should compensate. In some cases, the liability is raised on the third parties as well.

However, most of the principles of the law of torts originate from English common law while Indian courts have been successful in modifying the same to meet basic requirements. The two principles of absolute and strict liability are the ones which levy liabilities on the industrial and business aspects when there are commercial activities which actually cause the damages to the public.

STRICT LIABILITY

The rule of a Strict liability provides that if there is any commercial activity which can prove to be harmful; the same should not be carried on. The liability arises even when all necessary and essential precautions are being taken in order to prevent the damage.

The Strict liability is not just a concept but it is actually an imposition of liability on a party without a finding of fault and claimant need only prove that the tort occurred and that the defendant was responsible. The law of torts implies the strict liability rule to such situations wherein the conditions seem to be inherently dangerous.

Under the strict liability rule, the law makes people pay compensation for damages even if they are not at fault. In other words, people have to pay compensation to victims even if they took all the necessary precautions and infect permissions allowing such activities often include this principle as a pre-condition.

In the leading case of Rylands v. Fletcher, the Rule of Strict liability originated. The defendant owned a mill and to improve the supply of the water, he arranged a reservoir over there. The water escaped and damaged the mine of the plaintiff. The court disagreed upon the argument that the defendant was not at fault and explained the rule of strict liability. It said that when somebody keeps something on his property for his benefit, it should not escape and in case it escapes, the owner of that thing must compensate the victim even if he was not negligent.

In the case of the Meghalaya Energy Corporation v. Shri Sukendra Sangma, the court did not recognize the rule of strict and absolute liability in case of this enterprise which was engaged in hazardous and dangerous activity which operate vis-à-vis the tortious principle of strict liability under the rule in Rylands v. Fletcher.

ABSOLUTE LIABILITY

Absolute liability refers to a standard of legal liability which is found in tort and criminal law. In order to convict someone for an ordinary crime, a person should not only have to commit a criminal action but it is required to have a deliberate intention which is mens rea. A company is required not to engage in such activities which can prove to be extremely hazardous. In such cases,  this type of company or any person engaging in such activity have to pay compensation as a mandatory remedy, whether or not such disaster was caused by its negligence.

The Supreme Court, in the M.C. Mehta vs Union of India, found that the principle of strict liability is inadequate in order to protect the rights of citizens and it replaced it with the principle of absolute liability principle. The incident of leakage of Oleum gas from a fertilizer plant of Shriram Food and Fertilisers Ltd. complex at Delhi caused irreparable damage to several people and the due to the prevalence of the concept of absolute liability, there was no defence which was provided to them. Article 21 of the Constitution declares that no person shall be deprived of his life or personal liberty except according to procedure established by law and this specific right is available to both citizens and non-citizens and hence the court wanted corporations to be made fully liable for future undeserved suffering of innocent citizens and held that a hazardous enterprise has an absolute non-delegable duty to the community.

In the case of Union Carbide Company vs. Union of India, which is popularly known as Bhopal Gas leak Tragedy, the Supreme Court held that Union Carbide Corporation, currently owned by Dow Chemical Co, was liable to pay compensation to the victims of the 1984 Bhopal gas tragedy and the curative petition was also denied.

THE DIFFERENCE

The distinction is clear between strict and absolute liability and was clearly mentioned by the Supreme Court in M.C. Mehta v. Union of India, where the court made a summarization as follows:

  • Only those enterprises shall be held liable, in absolute liability, which are involved in hazardous or the activities which are inherently.
  • The very escape of a dangerous thing from the person’s own land is not necessary. Absolute liability is applicable to those injured within the premise and outside the premise and the rule of Absolute liability does not have any exceptions, unlike the rule of Strict Liability.
  • The rule has been elaborated keeping in mind the case of Rylands v. Fletcher as it only applies only to the non-natural use of land, but absolute liability applies even to the natural use of land and if an individual tends to use a dangerous substance and if such substance escapes he shall be liable even though he has taken proper care.
  • The extent of damages actually depends upon the very magnitude and financial capability of the corporation It was also stated by the Supreme Court that the enterprise should be held to be under an “obligation to ensure that the hazardous or inherently dangerous activities in which it is engaged must be conducted with the highest standards of safety and security and if any harm results on account of such negligent activity, the enterprise or the institute must be held absolutely liable to compensate”.

REFERENCES

  • Franklin, Mark, Tort Law and Alternatives: Cases and Materials, University Casebook Series, ISBN-13: 978-1634593007
  • Gilead, Israel, On the Transformation of Economic Analysis of Tort Law, Journal of European Tort Law, Issue 3, 2017; Hebrew University of Jerusalem Legal Research Paper No. 17-26
  • Ryland v. Fletcher, (1868) LR 3 HL 330
  • M.C. Mehta vs Union of India, 1987 SCR (1) 819
  • Union Carbide Company vs. Union of India, (AIR 1987 SC 1086) 
  • P. S. Atchuthen Pillai, The Law of Tort, Eastern Book Co, 8 Ed, 1987 [1]
  • Ratanlal & Dhirajlal, The Law of Torts, Butterworths

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Memorandum and Articles of Association

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This article is authored by Pankhuri Pankaj, a 2nd year student pursuing her BA-LLB degree from Vivekananda Institute of Professional Studies. This article summarises certain key provisions of the Memorandum and Articles of Association under the Companies Act and is qualified in its entirety by reference to the Companies Act, 2013.

Memorandum of Association of a Company

The Memorandum of association of a company, or the MOA, is a document which forms the charter of the company and defines the scope of its activities. According to Section 2(56) of the Companies Act, 2013, a “memorandum” means the originally framed memorandum of association of a company or as altered from time to time in pursuance of any previous company law or of this Act. The Memorandum of Association is basically the foundation on which a company is built and it can be defined as the constitution of the company which lays down the scopes and powers of the company. It contains rules regarding the capital structure, the liability of the members, the objects clause, and other important matters of the company, and basically it delimits the area beyond which the company cannot go, hence, the company cannot depart from the memorandum and if done so, the act will be ultra vires the company and void.

A Memorandum of Association of a company is supposed to be a public document, as defined under Section 399 of the Companies Act, 2013, to make it available for any person who enters into a contract with the company. 

What does a Memorandum of Association Contain?

Section 4 of the Companies Act, 2013, illustrates what a Memorandum of Association shall contain, like:

  1. The Name Clause, which lays down that in the case of a public limited company the last word of the company shall be “Limited”, and for a private limited company it will be “Private Limited”.
  2. The Situation clause which would deal with the state in which the registered office of the company is to be situated.
  3. The Object clause would illustrate the object for which the company is proposed to be incorporated and any matter necessary in furtherance thereof.
  4. The Liability clause which defines, whether limited or unlimited, the liability of the members of the company, and also state:

(i) the liability of the members to be limited to the amount paid, if any, on the shares held by them, in the case of a company limited by shares;

(ii) the amount to which each member undertakes to contribute in the case of a company limited by guarantee.

  1. The Capital clause implies the amount of share capital with which the company is to be registered and the division thereof into shares of a fixed amount and the number of shares which the subscribers to the memorandum agree to subscribe which shall not be less than one share, and the number of shares each subscriber to the memorandum intends to take, indicated opposite his name.
  2. The Association clause is the last clause and it specifies the desire of the subscriber to form a company.

FORMAT OF THE MEMORANDUM OF ASSOCIATION

Companies must draw their Memorandum of Association according to Section 4 of the Companies Act, 2013, in the form provided in Tables A-E in the First Schedule of the Act.

  1. TABLE A is the form designated for the memorandum of association of a company limited by shares.
  2. TABLE B is the form for the memorandum of association of a company limited by guarantee and not having a share capital.
  3. TABLE C is the form for the memorandum of association of a company limited by guarantee and having a share capital.
  4. TABLE D lays down the form for the memorandum of association of an unlimited company.
  5. TABLE E is the form for the memorandum of association of an unlimited company and having a share capital.

PRINTING AND SIGNING OF MEMORANDUM OF ASSOCIATION

Section 15 of the Companies Act lays down the memorandum of association should be: printed, divided into paragraphs and numbered consecutively, and it should be signed by seven members in case of a private company.

The memorandum of association should be signed by every member and their address, occupation, and description should be there in the presence of at least one witness, who also must attest his signature and add his address, occupation, and description.

A company can subscribe to a memorandum of Association through its agent. A minor cannot sign an MOA, however, the guardian of the minor if subscribes to the MOA on his/her behalf and the person will be deemed to have subscribed in his personal capacity.

In addition to all the facts stated above, a company is eligible to attach additional provisions if required along with the mandatory ones.

ARTICLES OF ASSOCIATION OF A COMPANY

According to Section 2(5) of the Companies Act, 2013, the term “articles” means the articles of association of a company as originally framed or as altered from time to time or applied in pursuance of any previous company law or of this Act. Section 5 of this act defines “articles of association” and says that the articles of a company shall contain the management regulations of the company and shall also contain matters, as may be prescribed. But it shall not prevent a company from including additional matters in its articles if it understands them to be necessary for management. 

In basic words, the Articles of Association of a company can be understood as the rule book of the company’s working which regulates the management and powers of the company. For the internal management, they describe rules, regulations, by-laws, and hold high significance in the life of a company. It is also responsible for describing various details about the company’s inner workings like manner of making calls, director’s/employees qualifications, power and duties of the auditors, forfeiture of shares and a lot more.

FORMS OF ARTICLES OF ASSOCIATION

Under Section 30 of the Companies Act, model forms of Articles have been laid down.  In schedule I of the section from Table F-J model forms of Article association can be found.

  1. Table F deals with the form for Articles of Association of a company limited by shares.
  2. TABLE G  illustrates forms for the Article of Association of a company limited by guarantee and having a share capital.
  3. TABLE H lays down the form for Articles of Association of a company limited by guarantee and not having a share capital.
  4. TABLE I  deals with the form for Articles of Association of an unlimited company and having a share capital.
  5. TABLE J  includes the form for Articles of Association of an unlimited company and not having a share capital.

A company need not adopt all or any of the regulations contained in the model articles applicable to such company.

CONTENT OF ARTICLES OF ASSOCIATION

The articles of association of different companies, according to Companies Act, 2013, are supposed to be framed in the prescribed form, since the model of articles is different for the different type of companies like Limited by shares, companies limited by guarantee having share capital and the ones not having a share capital, and unlimited company having share capital and the ones not having a share capital.

For a public-private limited company the articles of association usually include Number and value of shares, share capital, a variation of shareholders’ rights, payment of a commission, share certificate, preliminary contracts (if any), loan on shares, call on shares, transfer and transmission of shares, forfeiture of shares, share warrants, alteration of capital, general meeting, voting rights of members, directors and their remunerations, secretary and manager, dividend and reserves, account and audit, and winding up.

The printing and signing of Articles of the association are the same as that of Memorandum of Association.

In addition to all the facts stated above, the Articles of Association also establish a contract. This contract can exist between the members and also between the members and the company. This contract established governs the ordinary rights and obligations that are incidental to having membership in the company.

DIFFERENCE BETWEEN- MEMORANDUM OF ASSOCIATION AND ARTICLE OF ASSOCIATION

It is important to note that articles of association are in fact subordinates to the memorandum of association, which is the more dominant one, of a company. In Shyam Chand v. Calcutta Stock Exchange, it was held that any and all articles that happen to go further beyond the memorandum of association of the company will be marked ultra vires and void. Therefore, no article should go beyond the memorandum of association. 

If there’s a conflict between the memorandum of association and the articles of association of that company, then the memorandum of association will prevail. 

In case of any ambiguity regarding the details in the memorandum, it needs to be read along with the articles of association of that company.

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Judicial Separation and Divorce under the Hindu Marriage Act, 1955

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This article has been written by Yash Dodani, a first-year student at NALSAR University of Law. He has tried to explain the concepts of Judicial separation and Divorce and set a difference between these two.

INTRODUCTION

The Hindu Marriage in Indian society is considered as a sacrament. It means that the Hindu marriage by its creation can’t be revoked by any chance. It is considered in the Hindu Rituals that the Hindu Marriage is made by the god and can’t be broken by humans. Before the enactment of the Hindu Marriage Act, 1955 [here referred to as “Act”] there was no method available for either of the parties to get the marriage dissolved if there are any issues with the marriage. As soon as the Act passed, the parties have got the grounds under which they can file a petition of either divorce or Judicial separation. The 1076 Amendment in the Act makes the grounds for judicial separation and divorce common. However, these pleas are not the same. There is a substantial difference between these two which I will discuss in the coming parts.

Read: Hindu Marriage: Is it a Sacrament or a Civil Contract

Meaning of Judicial Separation

When the parties to the marriage want to live separate from each other legally, despite being legally married. They file a plea under section – 10 of the Hindu Marriage Act by which they can formalize a de facto separation while remaining legally married. Upon approval of the plea filed, the couple is said to be ‘judicially separated’. This legal process is called Judicial Separation. Upon which they are no longer required to fulfil conjugal rights. There are however some obligations that need to be fulfilled. Either party is not allowed to remarry during the time of such separation. If they do so, they can be booked under section 494 of the IPC for adultery. A time of one year is given to the parties to resolve their issues if they can. In other words, the time is given in order to get a settlement done. 

There are various grounds available to parties under section 13[1] of the Act to file a plea of judicial separation which are same as divorce as stated above.

  • Adultery:  if the spouse has voluntary sexual intercourse with any other person other then his/her spouse, he/she can apply for judicial separation.
  • Cruelty: when any spouse after the marriage is treating another spouse with harsh nature. The courts are left upon to decide the cruelty.
  • Desertion: if the party has left the household of husband, without having reasonable ground for a continuous period of 2 years just before the presentation of the petition.
  • Conversion: if either of the spouses has converted and changed his/her religion, then this ground may apply.
  • Insanity: when after marriage, either of the party becomes/is of unsound mind, the petition of judicial separation can be filed.
  • Renounced the World: if either of the party has renounced the world by voluntarily entering into a religious order.
  • Has not been heard alive for seven years: if the spouse has not heard of the living of another, nither his/her close relatives have heard him/her for a period of seven years.

There are some other grounds which the Hindu Marriage Act has specified for only women. These are some grounds specified below:

  • Husband has more then one wife living: if the husband has more then one wife at the time of marriage, the wife can file a petition of judicial separation and the husband can be booked under section 494, 495 of IPC.
  • If the husband has in any time was convicted of rape, before or after the marriage.
  • If the woman has married before the age of 15 years and wants to file a petition of judicial separation, she can do it before turning to the age of 18.

The courts in the petition of judicial separation can also deal with the question of maintenance. Provided that during the time of the separation, the wife is in such a condition that she can’t maintain herself and but for the maintenance by the husband, she will be in harsh condition.

This decision was given by the Punjab and Haryana High Court in the case of Sohan Lal v Kamlesh[1] where the Court held that the maintenance can be given under the time of judicial separation where the wife is not able to maintain herself. 

Now, what if the parties have settled together and want to cohabit again? Since the judicial separation does not make the marriage dissolved, the parties can at any time in that separation or even after that, may file  a petition in the court asking to rescind the decree of judicial separation. However, the petition can only be filed once both the parties have consented to it and they really want to cohabit again.

The whole purpose of judicial separation is to give some time to parties to think over the decision of divorce if they want to take in the future. However, we have seen a conflict between the judicial separation and restitution of conjugal rights under section 9 of the Hindu Marriage Act. The courts have also sometimes converted the plea of judicial separation to restitution of conjugal rights. Irrespective of that the whole purpose of judicial separation is to give some time to the parties to reconcile their differences. It is a step before the petition of divorce.

Divorce

Divorce is a stage where the parties either decide by mutual consent or by the wrong of the other spouse, the marriage is dissolved. When the marriage is dissolved, the parties are permanently set away from the rights and obligations in the marriage. The parties are no longer be considered as husband and wife. However, they are allowed to marry again if they wish so.

There are three theories of divorce which are prevalent in the world. These are:

  1. Fault Based theory: this divorce theory means when the party is seeking divorce due to wrong of other spouse say adultery, conversion, rape etc. In simple terms when one of the spouses does anything which is prohibited by law in terms of marriage, the affected party can file a petition for divorce. 
  2. No-fault Theory: in this divorce, the petition is filed by the mutual consent of the parties. It is not necessary that there should be any wrong by either of the party.
  3. Breakdown of Marriage Theory: this theory coverts that part where the marriage is so broken down that it can’t be resolved again and compulsory divorce will be given. This theory is not used in India often but the Supreme Court has used the power under Article 142 of the Constitution to allow such divorce.

Grounds for Divorce

The grounds for divorce are the same as that of judicial separation. The parties are free to file a petition for divorce if there is no resolution of differences between the husband and wife in the times of judicial separation. If the court has earlier ordered the decree of Restitution of Conjugal rights under section 9 of the Act, and if the parties do not comply with it wholely or are not able to cohabit, the court will upon the presentation of a petition of the divorce by either of the parties, will not look into any ground and allow divorce. If the court finds no merit in the petition of divorce or thinks that the act is not so grave that the parties are not likely to divorce, it can change the petition into Judicial separation from divorce even if the petition has not asked for it. In the case of Vimlesh v Prakash Chandra Sharma[2] the court said, one instance of cruelty is not enough to file a petition of divorce and converted the petition to judicial separation so as to give some time to reconcile.  

Difference between Divorce and Judicial separation

Divorce Judicial separation
It can be filed after one year of the marriage. It can be filed at any time after the marriage.
Generally, a two-step process is used, first is the cool off period and then divorce is granted if nothing comes out good for the parties. Only the grounds needs to be satisfied.
Permanent dissolution of marriage. Temporary suspension of rights and obligations.
The persons can remarry after the procurement of decree of divorce. The parties can’t remarry after the procurement of decree of judicial separation.
In divorce, the courts presume that there is no possibility of reconciliation. There is a possibility of reconciliation.

Conclusion

I leave on you to determine whether the Hindu Marriage in current times a sacrament or a civil contract. There is a difference between divorce and Judicial separation which I discussed above.

[1] AIR 1984 P H 332

[2] AIR 1992 All 260

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Corporate Securities – Classification

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This Article is written by Aditya Das pursuing B.Com LLB (Hons.) 2nd Year from NEF Law College, Guwahati, Assam. In this article, he has tried to explain the Classification of Company Securities and the allotment and transfer of securities.

INTRODUCTION

In laymen’s language Securities refers to an investment made by an individual that is to be freely traded in the market (share market) and provides a right or claim on an asset of the issuing company and all future cash flows generated by that asset.

In Legal language as per Securities Contracts Regulation Act, 1956, “securities include shares, scripts, stocks, bonds, debentures, debenture, stocks or other marketable securities of a like nature in or of any incorporated company or other body corporate.”[1]

Company Securities

Company or corporate securities are the documentary media for mobilizing funds by joint-stock companies. The main motive of the company to issue such securities arises in the following two situations:

  1. Establishment of the business –at the initial stage.
  2. Growth of business – expansion (sudden flow of funds).

These are of two classes:

(a) Ownership securities, and

(b) Creditorship securities.

Share Capital:

 Company Securities (Shares) – Share capital is not a necessary condition of incorporation, also a greater number of Companies are registered with it than without it. In case share capital is thought necessary[2], the memorandum of the company under the Companies Act 2013 must state the amount of capital with which the company is desired to be registered and the number of shares into which it is to be divided.[3] The authorised share capital for the nominal capital means such capital is authorised by the memorandum of a company. Section 2(8) The meaning of share capital was explained by the Kerala High Court in SNDP Yogam, Quilon, re:[4]

Under this case an application was presented under section 397 of the Companies Act 1956 against “yogam” the raised question was whether the company was with or without share capital. Despite the memorandum of the association the liability of the members was limited and each member what’s required to take at least one share, but there was no authorised capital mentioned.[5]

Classification

Capital must be divided into shares of a fixed amount and all the shares may be of only one class for may be divided into two different classes of securities. For this purpose securities means securities defined in Section 2 (h), Securities Contracts (Regulation)Act,1956 Section 2(81) and includes “hybrids”.

The act permits only two kinds of shares that are to be issued :

1.Equity share capital,

2.Preference shares

The Companies Act 2000 introduced some other categories of share:

   I. Derivative includes—

1.  security derived from a debt instrument, share, loan, whether secured or unsecured, risk instrument or contract for differences or any other form of security;

2. a contract which derives its value from the prices, or index of prices, of underlying securities;

   II. Hybrid – it means any security which has the characteristics of more than one type of security including their derivatives.

1. Equity Share Capital:

 As per the Companies Act, 2013 all share capital which is not preference share capital is called Equity share capital. Equity shareholders are those shareholders who are paid after the payment of preference shareholders. Even on the winding up of the company equity shareholders or to be said the ordinary shareholders are paid at last after the settlement of the preference shareholders is completed. Equity shares were proposed to be issued against preference share on the ground that no dividend was paid. There was no material to show that equity shares represented the fair value of dividend claimed. The court cancelled the proposal.[6] [7]

2. Preference Share Capital ( Section 43) :

Preference share capital which fulfils the following conditions-

  1. During the lifetime of the company, it is assumed of payment of dividend at a fixed rate for a fixed amount before anything is paid to equity shareholders. The preferential dividend may consist of a fixed amount for example rupees 70000 in one year payable to the preference shareholder to be calculated at a fixed rate for example 7% of the nominal value per share.
  2. In the event of winding up of the company, it carries a preferential right to be repaired the amount of capital paid up before anything is paid to equity shareholders.

Types

Cumulative and non-cumulative

Cumulative preference shareholders have the rights to receive a dividend that was have been missed in the past that goes on accumulating unless it is paid. If there are no profits in one year and the arrears of the dividend are to be carried forward and paid out of the profits of subsequent years the preference shares are said to be cumulative. Whereas in case of non-cumulative preference shares the shareholders get nothing if no profit is available in any near moreover one cannot claim unpaid dividend in any subsequent year. Foster v Coles, Foster and Sons Ltd.[8]

Participating and non-participating:

In case the company makes a surplus profit in a given year the participating preference shareholders have the right to participate in the surplus profit after the dividend has been paid to equity shareholders vice versa in case of non-participating.Will v United Lanket Plantations Co Ltd.[9]

Redeemable and non- redeemable:

Under the Companies Act, 2013 a company has the power under Section 55 to issue share known as redeemable preference shares in the articles of the company may choose to pay the holders of such shares the pain back of these is referred to as redemption but there are also restrictions in regard to the fund out of the shares that are to be redeemed.

  1. Redeemed shares must be fully paid.
  2. The redemption must be made from the profit.
  3. A sum equal to the amount paid on redemption shall be transferred to a reserve fund to be known as capital redemption reserve account.

Whereas, according to Section 55 of the Companies Act 2013 no company can issue any irredeemable preference share.

Allotment of securities

The allotment of the securities is made on the application forms which are to be supplied by the company. The application once accepted, it is an allotment.[10]Termed as the first allotment is generally not more no less than acceptance by the company of the offer to take shares.[11]Broadly speaking it is an appropriation by the directors of shares to a particular person.[12]it is an appropriation out of the previously unappropriated capital of the company.[13]Consequently where forfeited shares are issued it is not the same thing as an allotment. A valid allotment has to comply with the requirements of the act and principles of the law of contract relating to the acceptance of offers.[14]

General principles as to allotment

Firstly, the allotment is to be made by a proper resolution of the board of directors and allotment is a duty primarily following up on the directors and this duty cannot be delegated to others if otherwise mentioned in the articles of association.

Secondly, the allotment is to be made within a reasonable time period, if not done application labs there must be an interval to about six months between application and allotment.

Thirdly, the allotment of the shares must be communicated properly as well as address and stamped letter of the allotment can be defined as a communication even somehow the letter is delayed or lost in the course of post.

Lastly, the allotment must be absolute and unconditional and in accordance with the terms in the conditions of the application if mentioned.

Transfer of shares

When the joint-stock companies were incorporated the objective was the shares are to be easily transferable. Section 44 of the Companies Act 2013 states that the shares are debentures or other interest of a member in a company shall be movable property capable of being transferred in the manner provided by the articles of the company.[15]Regulations of the company may impose restrictions upon the right of transfer but in the absence of restrictions in the articles, the shareholder has by virtue of the statute the right to transfer his shares without the consent of anybody to any transferee even though he is a man of straw provided it is a bonafide transaction in the sense that it is an out and out disposal of the property without retaining any interest in his shares.[16]

Conclusion

Through this article bringing the light upon the topic that is the classification of company securities. The entire article deals with the types of the corporate securities their meaning the way of allotment of the securities general way of allotment of shares and transfer of shares. Statutes followed in this article as follows: The Companies Act 1956; The Companies Act 2000; The Companies Act 2013; The securities contracts regulation Act 1956.

References:

[1] Securities Contracts Regulation Act, 1956.

[2] Avtar Singh, Company Law, Pg. no. 223, 17th Edition.

[3] S.4(1)(e).S.44 says that the shares or debentures or other interest of a member in the company shall be movable property transferable in the manner provided in the companies articles.

[4] (1970)40Comp Cas 60:ILR 1969 Ker 516:(1970)1Comp LJ 85.

[5] Avtar Singh, Company Law, Pg. No.223,17th edition.

[6] Tin Plate Dealers Assn (P) Ltd v Satish Chandra Sanwalka,(2016)10SCC 1: (2016)199Comp Cas205.

[7] Avtar Singh, Company Law Pg. no. 225, 17th edition.

[8] (1906)22TLR 555.

[9] (1912) Ch571:107 LT 360 (CA):1914 AC 11 (HL).

[10] Sri Gopal Jalan and Co v Calcutta Stock Exchange Assn Ltd , AIR 1964 SC 250 ,251:(1963)33 Comp Cas 862.

[11] Chitty J in Florence Land and Public works Ltd,re(1885)

[12] Stirling J in Spitzel v Chinese Corpn Ltd,1899

[13] Sarkar J in Shri Gopal jalan and Co vs Calcutta stock exchange association limited 1964 SC 250

[14] Avtar Singh, Company Law, pg.no.141,17th edition.

[15] The requirements of the articles must be satisfied. Where are the articles required that transfer fee and the share certificates must be deposited in the office court did not compare the company to register a transfer which did not satisfy the requirements and held that depositing them in the court would not do. Malabar and Pioneer Hosiery(P)Ltd,re,1985

[16] Avatar Singh Company Law Pg.no151 17th edition.

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CLASSIFICATION OF COMPANY SECURITIES

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This article is written by Alok Kumar, a student at Maharaja Agrasen Institute of Management Studies, GGSIPU. This article basically deals with the topic of classification of corporate securities which includes the definition of securities according to the security contract act, 1956 and their various types.

WHAT IS SECURITIES?

Security, in business economics, written evidence of ownership conferring the right to receive property not currently in possession of the holder. The most common types of securities are stocks and bonds, of which there are many particular kinds designed to meet specialized needs. If we talk about kinds of securities then there are various types of securities available other than stocks and bonds Basically Securities allude to an investment that can be unreservedly traded in the market and gives a privilege or guarantee on an asset and all future cash flows produced by that asset.

ACCORDING TO SECTION 2(H) OF SECURITIES CONTRACT (REGULATION) ACT, 1956 :

SECURITIES INCLUDE – shares, scrip’s, stocks, bonds, debentures, debenture stock or other marketable securities of a like nature in or of any incorporated company or other body corporate.

CLASSIFICATION OF SECURITIES

Securities can be divided into government securities and corporate securities on the basis of source of the issue.

CLASSIFICATION OF COMPANY SECURITIES

CORPORATE SECURITIES

Organizations issue various kinds of shares to clean up assets from different investors. Before Companies Act, 1956 public companies used to give three sorts of shares, for example, preference Shares, Ordinary Shares and Deferred Shares. The Companies Act, 1956 has restricted the kind of shares to just two-Preference share and Equity Shares.

EQUITY SHARE

Equity shares, otherwise called ordinary shares or common shares speak to the proprietors’ capital in an organization. The holders of these shares are the genuine proprietors of the organization. They have a command over the working of the organization. Equity shareholders are delivered a profit in the wake of paying it to the preference shareholders. The pace of profit on these shares relies on the benefits of the organization.

PREFERENCE SHARES

As the name proposes, these shares have certain preferences when contrasted with a different type of shares. These shares are given two preferences. There is a preference for installment of profit. At whatever point the organization has distributable benefits, the profit is first paid on preference share capital.

Different investors are delivered dividend just out of the rest of the benefits, assuming any. The second preference for these shares is the reimbursement of capital at the hour of liquidation of the organization. In the wake of paying outside loan bosses, preference share capital is returned. Equity shareholders will be covered just when preference share capital is returned.

DEFERRED SHARES

These shares were prior given to promoters or founders for administrations rendered to the organization. These offers were known as Founders Shares since they were ordinarily given to founders. These shares rank last so far as an installment of dividend and return of capital is concerned. Preference shares and equity shares have needed as to instalment of dividend.

These shares were by and large of a little division and the administration of the organization stayed in their grasp by temperance of their voting rights. These shareholders attempted to deal with the organization with proficiency and economy since they got dividend just finally.

NO PAR STOCK/SHARES

No par stock methods shares having no assumed worth. The capital of an organization giving such shares is partitioned into various determined shares with no particular category. The share endorsement of the organization basically expresses the number of shares held by its proprietor without referencing any presumptive worth.

The estimation of a share can be controlled by partitioning the genuine total assets of the organization with the absolute number of shares of the organization. Dividend on such shares is paid per share and not as a level of fixed ostensible estimation of shares.

SHARES WITH DIFFERENTIAL RIGHTS

“Shares with differential rights” means that shares issued with differential rights in accordance with section 86 of the Companies Act.

Section 86 of the companies Act, as amended by the Companies (Amendment) Act, 2000, provides that the new issue of share capital of a company limited by shares basically of two kinds namely:

EQUITY SHARE CAPITAL

  1. With voting rights,
  2. With differential rights as to dividend, casting a ballot or in any case as per such rules and subject to such conditions as might be recommended.

PREFERENCE SHARE CAPITAL

Sub-clauses (i) and (ii) in clause (a) above were inserted by the Companies (Amendment) Act, 2000 which came into effect on 13th December 2000.

Subsequently, section 88 of the Companies Act was precluded which restricted issue of equity shares to unbalanced rights.

Nonetheless, it must be noticed that the issue of shares with differential rights as allowed by the Companies (Amendment) Act, 2000 is associated with equity shares just and not the preference shares.

SWEAT EQUITY

The term ‘sweat equity’ signifies equity shares gave by an organization to its employees or chiefs at a markdown or for thought other than money for giving ability or making accessible rights in the idea of intellectual property rights (state, patent or copyright) or worth increments, by whatever name called.

The thought behind the issue of sweat equity is that a representative or executive works best when he has ‘feeling of belongingness’ and is plentifully remunerated.

One of the methods of rewarding him is by offering him portions of the organization at low costs, where he is working. It is named as ‘sweat equity’ as it is earned by difficult work (sweat) of employees and it is likewise alluded to as ‘sweat equity’ as employees become upbeat on the issue of such offers. The reason for sweat equity is to guarantee more dedication and support of employees.

DEBENTURES OR BONDS

An organization may raise long haul account through public borrowings. These advances are raised by the issue of debentures. A debenture is an affirmation of a debt. As per Thomas Evelyn.

“A debenture is a record under the organization’s seal which accommodates the instalment of a chief entirety and intrigue subsequently at ordinary interims, which is generally made sure about by a fixed or drifting charge on the organization’s property or undertaking and which recognizes a credit to the organization’s property or undertaking and which recognizes an advance to the organization”.

A debenture-holder is a loan boss of the organization. A fixed pace of intrigue is paid on debentures. The interest on debentures is a charge on the benefit and misfortune record of the organization. The debentures are commonly given a drifting charge over the benefits of the organization. At the point when the debentures are made sure about, they are paid on need in contrast with every single other creditor.

CONCLUSION

These are the types of securities of the government securities and corporate securities. As we have already understood that Government securities are bonds and securities given by the government towards meeting their budgetary shortages. These securities are considered as perhaps the most secure type of investment as sovereign assurances back these. Investors can purchase and offer these securities to procure capital gains and appreciate a steady premium instalment on the presumptive worth of their investment. On the other hand, the corporate securities can be as the- debentures, shares, loans from institution’s, public deposits. And all these for the purpose of making fixed capital, joint-stock organizations mobilize funds from the public in the form of ordinary or equity share or preference shares.

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Sources and framing of Indian Constitution

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This article is written by Anurag Maharaj, student of law at Lloyd Law School, Greater Noida. He has tried to define the sources and framing of the Indian Constitution in this article.

INTRODUCTION

Constitution is the system of basic principles which governs a country, state, company, or the like. It is the backbone of our country’s democracy. Indian Constitution is the longest written constitution in the world containing ​395 Articles, 22 Parts and 12 Schedules.​ India’s constitution was drawn up by a Representative Assembly. The Assembly, under the chairmanship of Dr. B.R.Ambedkar, formed a drafting committee to create a constitution for India. The first meeting of the Assembly was on 9 December 1946. On 26 November 1949, the Indian Constitution was adopted and came into force on 26 January 1950.

After ransacking all the world’s major constitutions, the Indian Constitution was formed. The sources of the Indian Constitution are:-

1. United States of America

● Impeachment of president:- Article 61 of the Constitution calls for the President of India to be impeached. The President may be disqualified from office for breach of the Constitution by impeachment. Impeachment proceedings may be levied at any Parliament house.

● Removal of judges:- Article 124(4) of the Constitution allows the President to remove a judge for proven misconduct or incapacity if the parliament approves a majority of the total membership of each house for impeachment and not less than two-thirds of the members of each house present.

● Fundamental Rights: Articles 12 to 32 of the Constitution of India include all the fundamental rights:- Basic rights are the fundamental human rights given to the country’s people in order to ensure them of an equal place in society.

● Judicial independence:- The idea of judicial independence is that the judiciary should be separate from other government branches.

● Preamble:– The Preamble is an introduction to the Constitution. It guarantees justice, freedom, equality for all Indian citizens, and fosters fraternity among the people.

● Judicial Review: The Judicial Review provision gives the judiciary an upper hand in interpreting the Constitution. Therefore, the judiciary can annul any order by the legislature or executive if that order conflicts with the country’s constitution

● Functions of president and Vice president:- The President of India, is the head of state of and the commander-in-chief of the Indian Armed Forces.

● Article 63 of the Indian Constitution states that “There shall be a Vice President of India.” The Vice President shall serve as President in the absence of a President by reason of death, resignation, impeachment or other circumstances. India’s vice president is now ex officio secretary of Rajya Sabha.

2. The United Kingdom

● Single citizenship:- India’s constitution grants the country’s residents single citizenship. The residents of the country are all citizens regardless of the states or territories in which they live.

● Legislative procedure:– Legislative proposals shall be brought in the form of a bill before either Parliament House of India. A bill is the draft legislative legislation that, when passed by both parliamentary houses and approved by the President, becomes a parliamentary act.

● Rule of Law: This essentially states that a State is governed by the laws of that country, not by the representatives or the citizens and it states that everybody is equal before the law; including the ones who make it. Article 14 of the Constitution of India codifies the rule of law

● Cabinet system:- A group of persons appointed by a head of state or a prime minister to head the government’s executive departments and serve as official advisers.

● Parliamentary form of government:- The President is the head of state, and the head of government is the Prime Minister. In such a form of government, a cabinet of ministers, headed by the Prime Minister, governs the country. The Parliament consists of two houses – Lok Sabha and Rajya Sabha.

3. IRAN

● Directive Principle of State Policy:- The Directive Principle of State Policy is stated in Part IV of the Indian Constitution, and it explicitly states that it is the State’s responsibility to follow certain principles in the law-making process. There are three major types of these concepts – Democratic Guidelines, Gandhian Guidelines and Liberal Intellectual Guidelines. Ireland is also borrowing the process for appointing members to the Rajya Sabha

● The method of the election of the head of the state i.e the President

4. Australia

● Article 108:- The joint sitting of both the houses in some cases.

● Concurrent list:- It includes the power to be considered by both the union and state government.

● Freedom of trade and commerce:– Trade and commerce freedom within the nation and between States. Sections 301 to 307 of the Indian Constitution set down the same provisions

5. France:- ​The Indian preamble borrowed from the French Constitution its principles of liberty, equality and fraternity. In the tradition of France’s Constitution, the Indian state came to be known as the ‘Republic of India.’

6. Canada

● Federal system with a strong central government.

● Power-sharing between the central government and state governments

● The advisory jurisdiction of the Supreme Court

● Appointment of State governors by the Centre

7. Soviet Union (USSR)

● A Constitutionally appointed Planning Commission to supervise the economic growth.

● The Fundamental Duty, given in Article 51 A(g):- Mentions the duty of the citizen to protect the environment.

8. South Africa​ :- Gave us the provisions of the amendment process and the election of Members of Rajya Sabha

9. Germany​:- Gave us an immediate clause for the suspension of the fundamental rights.

10. Russia:-​ Idea of Social, Economic, and Political Justice in Preamble.

11.Government of India Act 1935

● Federal Legislature: The act stated that there should be two houses of the legislature, i.e. the Council of States and a Federal Assembly

● Provincial Autonomy:- Federal Legislature: The act stated that there should be two houses of the legislature, i.e. the Council of States and a Federal Assembly

Framing of the Constitution

India’s Constitution was adopted by a Constituent Assembly formed under the 1946 Cabinet Mission Plan. The Constituent Assembly formed 13 commissions to frame the Constitution. A draft Constitution was drafted by a seven-member drafting committee under the chairmanship of Dr B R Ambedkar on the basis of the reports from these committees. In January 1948, the drafting Constitution was released and citizens were given eight months. After the citizens, the press, the provincial assemblies and the Constituent Assembly had debated the draft in the light of the suggestions received, the same was finally adopted on November 26, 1949, and signed by the President of the Assembly. Thus it took 2 years, 11 months and 18 days for the Constituent Assembly to complete the task. And as I have discussed above the Indian Constitution is borrowed Constitution. The legislative system, common citizenship, rule of law, Directive state policy etc. all are borrowed features of the Indian Constitution. The Constitution of India incorporated the best features of a number of existing constitutions.

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