ABOUT THE EVENT

Legal Inside is organising its 2nd Online Memorial Writing Competition.

ABOUT THE ORGANIZER

The Legal Insider is a rapidly growing community of niche academicians, thinkers, activists, lawyers, professors, legal volunteers, paralegals and legal entrepreneurs who stand apart from the rest of the community with their zeal for deep thinking, leadership skills, and dedication for bringing innovation to the legal field.

ELIGIBILITY

It shall be an online event.

At present students/participants must be pursuing a Bachelor’s Degree in Law, i.e., 3-year LL.B. Course or 5-year LL.B from any recognized college or university or pursuing LL.M from any recognized University.

In one team, not more than 3 participants are allowed. But, however, participants may seek Individual or Single participation. In one team, participants from different universities or schools or colleges are allowed.

IMPORTANT DATES

Last Date of Registration	24/07/2020
Last Date for seeking Clarifications	27/07/2020
Last Date of Submission of Memorials (Softcopy)	15/08/2020
Declaration of Result of the Memorial Round	30/08/2020

REGISTRATION FEE

Individual Participation: Rs 350/-
For a team comprising of 2 members: Rs 600/-
For a team comprising of 3 members: Rs 750/-

PAYMENT DETAILS

Paytm/Google-Pay: 8169516577

Deadline for registration: 19th July 2020

Note: Team Participation is allowed up to 3 members but not more than that.

Note: If you don’t know how to write a memorial or you are doing it the first time, contact them we will provide you with samples and guidelines for writing memorial.

SUBMISSION DETAILS

Each registered team shall submit a soft copy, both in Microsoft Word format and PDF format (.docx and .pdf) of the memorials from both sides, via email to the insiderthelegal@gmail.com on or before 11:59 PM on August 15th.

The subject of the email should be the following “Memorial Submission”.

SUBMISSION OF SOFT COPY

Each registered team shall submit a soft copy in Microsoft Word format of the memorials from both sides on or before 11:59 PM on August 15th.

The subject of the email should be the following “Memorial Submission ”.

Moot proposition: https://drive.google.com/file/d/17tfKB02–hS1JmAK9Irq541ROhVnJM1U/view?usp=sharing

CONTACT

Connect with us at insiderthelegal@gmail.com.

WhatsApp: 8169516577

This article has been written by Niti Shah studying BLS/LLB from Pravin Gandhi College of Law, University of Mumbai.

INTRODUCTION

An “agent” is the one who has been employed to do any act for another person or to represent another person while dealing with a third person. The person for whom such an act is done is called the “principal”. Any person can be employed as an agent who is of the age of majority, according to the law which is subjected to him, and who is of sound mind. The authority of an agent could also be expressed or implied. Contract of an Agency is based on one fact that one person cannot perform all the tasks assigned to him and so he can appoint another person to perform or act on his behalf.

General Rules of Agency

Delegation of Authority
Contractual capacity
An agent can appoint sub-agent with permission of Principal
If the agent has been removed, subagent is automatically terminated

Distinction between Agent and Servant

An agent is a person who represents another person in a matter relating to contracts, but a servant is a person employed by someone to do work of representing the employer.
An agent is bound by lawful instructions of the principal but is not under the direct control or
supervision whereas servant acts under direct control and supervision of his owner.
An agent is employed with a responsibility to bring the principal into legal relations with third parties. He represents the principal in dealing with a third party but a servant does not ordinarily do this kind of act.
Mistakes made by an agent with authority are attributed to his principal. The agent isn’t responsible for the act done but mistakes made by the servant may make his master liable only when it is committed at the time of employment.
The agent is a representative of the principal with high status. A servant may act as an agent office master with a low standard.
An agent may work for several principals at the same time. A servant usually provides
services for only one master.

Various ways in which Principal-Agent Relationship may Arise

Express Agreement

The express agreement is the kind of agreement in which the agent may be appointed by words Spoken, written, or by the conduct of the activities. E.g. power of attorney.

Implied Agreement

Implied agreements are those agreements that are unexpressed. Implied agreements arise from the circumstances of the case which include conduct and relationship of parties.it has a similar legal force than any other contract. Due to a lack of documentation, it will be very difficult to enforce an implied contract.

Agency by Estoppel

If a person represents by words or conducts that another person is his agent and the third party reasonably believes in such representation and agrees, the person who represents so is bound by the act of other this is known as the agency by estoppel. In this case of agency by estoppel, the third party must act in good faith and must rely on a representation of the agent’s authority to act as an agent.

Agency by Necessity

Agency by necessity describes a relationship during extraordinary or emergency circumstances in which an agent acts on behalf of a principal without receiving authorization from the principal. It is done to protect the principal from harm and the agent continues to act in the best interest of the principal.

Rights and Duties of Agents

1. Right to Remuneration

As per the contracts, an agent has the right to receive remuneration in the presence or absence of an agreement, remuneration for rendering the services to the principal that are not voluntary or Gratuitous. If it is provided in the contract the after the completion of work the agent has a full right to receive payment then he should receive reasonable payment from his principal.

2. Right of Lien

If the agent has not been paid lawful charges by his principal and the goods of the principal are under his control he can retain the goods until the lawful charges are paid by the principal. This right lasts till the lawful charges are completely paid off by the principal.

3. Right to be Indemnified

An agent must be indemnified for all the charges, expenses, and any liability that he incurs during the course of his employment. The indemnity should not be confused with payment both of which should be handed over separately.

Types of Agents

The agent within the limit of authority, acts on behalf of the principal and binds him or brings the principal in a contractual relationship with the third person. The principal is liable for the act of agent to the third person. An agent can be classified into different types of basis which are as follows:-

1. Specific Agent: – A specific agent is one who is appointed to perform a particular act or to represent a particular transaction. E.g., an agent appointed for the sale of a particular property.

2. General Agent: – A person hired to carry on a series of transactions relating to a particular business, he is the one who has the authority to do all acts connected with a particular, business. For example, a manager of a firm.

3. Universal Agent:- This agent is appointed to do all acts and whose authority is unlimited and can do everything which the principal lawfully.

Characteristic of Agency

The basic characteristics of the contract of agency:

Legal Binding: The crux or the main idea of the contract of agency is that the principal is legally bound by the acts performed by the agent.

Consideration is not mandatory: For consideration there is no legal requirement, to support the relationship between the principal and agent.

The capacity of principal: Legally competent to contract which means that the person should be more than 18 years of age and should be of sound mind

Authority to contract: Authority of the contract is the basic requirement of the contract. Minor can also act as an agent, though he is not having the capacity

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This case analysis is written by Gaurav Lall pursuing BBA LL.B. (Hons.) at United World School of Law.

INTRODUCTION

Collapse of Clock Tower abutting highway-Clock Tower owned by Municipal Corporation, where Municipal Corporation is responsible for damages for loss of life caused whether by patent or latent defects. Applicability of the doctrine of res ipsa loquitur.

Court

Supreme Court of India

Bench

Ramaswami, V.

Decided On

24^th February 1966

Equivalent Citation

Municipal Corporation of Delhi v. Subhagwanti, AIR 1966 SC 1750

Brief Facts and Procedural History

Three suits for damages were filed by the respondents as heirs of three persons who died as a result of the collapse of the Clock Tower in Chandni Chowk, Delhi, belonging to the appellant-Corporation, formerly the Municipal Committee of Delhi. The building was 80 years old and the life of the structure of the top storey, having regard to the type of mortar used, could be only 40 to 45 years and the middle storey could be saved for another 10 years. The collapse of the Clock Tower was due to the thrust of the arches on the top portion. If an expert had examined this building specifically for the purpose he might have found out that it was likely to fall. When the building was inspected after the collapse it was found that it had deteriorated to such an extent that it was reduced to powder without any cementing properties.

Issues Before the Court

Whether the doctrine of res ipsa loquitur will apply?
Whether the appellant, as an owner of the Clock Tower abutting on the highway, is bound to maintain it in a proper state of repairs so as not to cause any injury to any member of the public using the highway and whether the appellant is liable whether the defect is patent or latent?
Whether the appellant was negligent in looking after and maintaining the Clock Tower and was liable to pay damages for the death of the persons resulting from its fall?

Decision of the Court

It is true that the conventional rule is that it is for the plaintiff to prove negligence and not for the defendant to disprove it. However, there is an exception to this rule which applies where the circumstances surrounding the thing which causes the damage are at the material time completely under the control or management of the defendant or his servant and the happening does not occur in the ordinary course of action without negligence on the defendant’s part. The principle has been clearly expressed in Halsbury’s Laws of England, 2nd Edn., Vol. 23, at p. 671 as follows: “An exception to the general rule that the burden of proof of the alleged negligence is within the initial instance on the plaintiff which occurs wherever the facts already established are such that the proper and natural thesis immediately arising from them is that the injury, complained was caused by the defendant’s negligence, or where the event charged as negligence tells its own story’ of negligence on the part of the defendant, the story so told being clear and not open to more than one interpretation. To these form of cases, the maxim res ipsa loquitur applies. Where the rule applies, a presumption of fault is raised against the defendant, which, if he is to succeed in his defence, must be overcome by contrary evidence, the burden on the defendant being to show how the act complained of could reasonably happen without negligence on his part.”

The legal position is that there is a special obligation on the owner of adjacent premises for the safety of the structures which he keeps besides the highway. If these structures fall into decrepitude so as to be of potential danger to the passers-by or to be a nuisance, the owner is liable to anyone using the highway who is injured by reason of the disrepair. In such a case it is no defence for the owner to prove that he neither knew nor ought to have known of the danger. In other words, the owner is legally responsible irrespective of whether the damage is caused by a patent or a latent defect. In Wringe v. Cohen [1940 1 K.B. 229] the plaintiff was the owner of a lock-up shop in Proctor Place, Sheffield, and the defendant Cohen was the owner of the adjoining house. The defendant had let his premises to a tenant who had occupied them for about two years. It appears that the corner end of the defendant’s house collapsed due to a storm, and fell through the roof of the plaintiff’s shop. There was evidence that the wall at the corner end of the defendant’s house had, need to want of repair, become a nuisance, i.e., a danger to passers-by and adjacent owners. It was held by the Court of Appeals that the defendant was liable for negligence and that if owing to want of repairs premises on a highway become dangerous and, therefore, a nuisance and a passer-by or an adjoining owner suffers damage by the collapse the occupier or the owner if he has undertaken the duty of repair, is answerable whether he knew or ought to have known of the danger.

CRITICAL ANALYSIS

In our opinion, the doctrine of res ipsa loquitur applies in the circumstances of the present case. It is not the case of the appellant that there was any earthquake or storm or any other natural event which was unforeseen and which could have been the cause of the fall of the Clock Tower. In these circumstances, the mere fact that there was fall of the Clock Tower tells its own story in raising an inference of negligence so as to establish a prima facie case against the appellant.

In view of the fact that the building had passed its normal age at which the mortar could be expected to deteriorate it was the duty of the appellant to carry out careful and periodical inspection for the purpose of determining whether, in fact, deterioration had taken placed whether any precautions were necessary to strengthen the building.

Applying the principle to the present case it is manifest that the appellant is guilty of negligence because of the potential danger of the Clock Tower maintained by it having not been subjected to a careful and systematic inspection which it was the duty of the appellant to carry out.

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This article is written by Asamanja Chattopadhyay, pursuing my B.A L.L.B course from Shyambazar Law College affiliated under University of Calcutta.

INTRODUCTION

India since time immemorial has been a worshipper of nature and environment. However, with growing industrialisation the ethics and values have degraded which in turn also degraded the environment. The judiciary then had to intervene between the nature and the corporate world in order to maintain a balance and also preserve the environment. A concept named “Corporate Social Responsibility” emerged which deals with the protection of the environment. The responsibility of the corporate world in preserving the environment and in the light of a pollution-free environment is referred to here as Corporate Environmental Liability.

What is Corporate Environmental Responsibility?

Liability is a word which is viewed from two different perspectives; Accounting and Legal perspective. Liability in accounting means the financial responsibilities of a business or organization. Liability is also very important in the legal perspective, “A liability is a legally enforceable obligation, whether it is voluntarily entered into as a contractual obligation, or is imposed unilaterally, such as the liability to pay taxes. The law both establishes liabilities and determines who is responsible for discharging them”[1].

Environmental Liability is the term used for the process by which the responsibility of cost of damaging the environment is laid on the person who damages the environment. The principle on which the concept of environmental liability operates is “the polluter pays principle” and the

The Environmental liabilities imposed on the corporate derive from various sources like statutes, regulations, ordinances, declarations and treaties passed in regional and international level. Environment Liabilities can be imposed in the form of Compensation, Remediation, Fines and Penalties, Compliance, Punitive Damages, Damages for Natural resources. The sole reason for imposing environmental liability on corporations is to make them alert and feel responsible about before or while causing any harm to the environment are made to either reverse or restore the damage suffered by the environment or are made to pay compensation, fine or chargers to cure the environmental at home. Thus in short, environmental liability is imposed on the corporate referring and keeping them informed about penalties, fine, or imprisonment for violating laws governing the environment.

Corporate Environmental Liability and India

India has a history of being compassionate towards the purity and power of the environment. The world was a part of global industrialization and opening up of the markets. The Indian companies were slowly introduced to the concept of CSR and also the concept of Corporate Environmental Liability.

Several enactments were made by the government in order to tackle the degradation of environment and they have been severely implemented over the recent times. The Indian Constitution too recognizes “Right to Healthy Environment” as a fundamental right under Article 21 as has been interpreted by the Supreme Court in Charan Lal Shahu case[2] , in the case of Subhash Kumar[3] and also which was further reaffirmed in M.C Mehta v. Union of India[4].

On the other hand the 42^nd Amendment to the Constitution has imposed a duty on the State and its citizens to protect and improve the environment by adding article 48A to the Directive Principles of State Policy and Article 51 A(g) as Fundamental duty. These insertions to the constitutions acted as a boost towards environmental jurisprudence in the country. Further the Companies Act, 2013 also introduced the idea of CSR laid down in Schedule VIII of the act which lists out CSR activities.

The eighties played a major judicial role in reaching new heights of jurisprudence especially in environmental protection. The verdict in Municipal Council, Ratlam v. Vardhichand[5] is considered to be a landmark case in that regard. The residents of the municipality were suffering from a long time from the smell coming out of the open drains. The Apex court identified the responsibilities of the local bodies towards the protection of the environment; also it developed the law of public nuisance in the Code of Criminal Procedure (CrPC)[6] as a proper instrument for performance of their duties.

In Vijay Singh Punia v. State of Rajasthan[7], 15% of the turnover of the dyeing and printing industries was imposed as damages for causing water pollution.

One of the worst Industrial disasters which India suffered was the Bhopal Gas leak incident[8] in the year 1984. The event occurred 2 years before the Apex court evolved the rule of Absolute liability.

In M.C Mehta v. Union of India[9] in the year 1987, Justice P.N Bhagwati laid down the doctrine of absolute liability for the harm caused by the hazardous and inherently dangerous industry by interpreting the scope of Article 32 to issue directions and orders in the respective manner.

Indian Council for Enviro-Legal Action v. Union of India[10] , tells us a tragic story of the village Bicchri in Rajasthan. The pure environment of the village became highly polluted by the sludge emanating from the industries situated in vicinity. The Apex court directed the Central Government to determine and recover the cost of remedial measures from the respondents. Section 3 of the Environment protection Act empowers the Central Government (or to delegate as the case maybe) to take all such measures as it deems fit for protecting and improving the quality of environment.

The “Polluter pays principle” and the precautionary principle were accepted as a part of the legal system in the Sludge case and also in the Vellore Citizens Welfare Forum case[11].

In Mohd. Hazi Rafeeq v. State of Uttaranchal, the Uttaranchal High Court referred to Article 48 and 51A (g) in order to stress the duty of the state to preserve and protect forest even at the cost of business interest.

In Uttar Pradesh Pollution Control Board v. Mohan Meakins Ltd.[12], the matter was related to the release of trade wastage or effluents by an industrial unit in the river Gomti. The Directors of the company were accused under section 43 of the Water (Prevention and Control of Pollution) Act, 1974. The Supreme Court held that lapse of a long period of time cannot be considered as a condition to absolve the directors from the trial.

Conclusion

The growth of environmental law and a desire in the global forum to save the environment has led the corporate sectors to live up or strictly follow the regulations and legislations laid down by the government in order to have a pure and clean environment. However while preserving and protecting the environment, industrialisation is also needed at the same time. Thus it is the need of the hour for both the government and corporate sector to maintain the importance of both- industrialisation and environment protection.

[1] https://www.freeadvice.com/resources/gov_material/epa_environment_liability.htm

[2] 1990 AIR 1480

[3] Subhash Kumar v. State of Bihar &Ors. [1991 AIR 420]

[4] 1987 AIR 1086, 1987 SCR (1) 819

[5] 1980 AIR 1622

[6] Section 133 of CrPC which states of Conditional Order for Removal of Nuisance.

[7] AIR 2003 Raj 286

[8] Union Carbide Corporation v. Union of India (1990 AIR 273)

[9] 1987 AIR 1086, SCR (1) 819

[10] 1996 SCC (3) 212

[11] AIR 1996 SC 2715

[12] SLP (Crl.) 3978 of 1999

This article is written by Bunmi Adaramola, a current LPC MSc student at the University of Law. This article provides a detailed insight into M&A, the reasons why companies decide to enter into an M&A and the life-cycle of an M&A with relevant examples.

An Overview of Mergers and Acquisitions

Mergers and Acquisition (“M&A”) is a concept anyone in the corporate finance world would always come across, one way or another. M&A is an umbrella term which is used to describe the consolidation of companies and the combination of businesses commonly for the purpose of wealth creation and maximisation. Additionally, companies may merge or acquire another to either take over a competitor in its industry or diversify its business interest. For instance, in the popular Arcelor-Mittal case in 2014, Mittal believed that the acquisition was a way to terminate its biggest competitor in the Steel industry, where both Arcelor and Mittal were large dominators of the steel industry.

It is imperative to understand that a merger should not be confused with Joint Venture Agreements (“JVA”). A Merger usually involves the combination of 2 companies to form one. From an economic or business perspective, mergers can occur through absorption or consolidation, and these occur through two ways: either what is known as a ‘horizontal merger’ (where two companies or firms in the same industry merge), or a ‘vertical merger’ (where companies at different production stages or value chains merge). At the other end of the spectrum, various types of mergers occur from a legal perspective, such as short-term mergers, statutory merger, subsidiary merger, and the popular ‘merger of equals’.

Equally, an acquisition is the takeover of one company by another, and can be in the form of either a hostile takeover or a friendly takeover. Acquisitions commonly involve the acquirer purchasing the assets or significant stake in the target company. In an acquisition process, the Corporate Finance Institute explains that there are two types of acquirers: strategic and financial acquirers. Strategic acquirers are commonly direct competitors or companies operating in adjacent industries as the target company. Financial acquirers are arguably the most prevalent type of acquirers within corporate finance, especially due to the numerous advantages their acquisitions present. Financial acquirers are usually institutional buyers such as private equity firms, sovereign wealth funds or wealth maximisation funds who are looking to own, but not directly operate or manage the acquisition target. In this line, financial acquirers normally use leveraged buyouts (LBOs) to finance the acquisition. Leveraged buyouts in M&A usually combine the use of debt and equity finance for the acquisition costs, in a ratio of 90:10 in favour of debt finance, according to Investopedia. As such within the global M&A markets, there is usually a tight competition between both types of acquirers.

The Life-Cycle of an M&A deal

M&A transactions are usually fast-paced and involve complex and multifaceted transactional agreements as well as the involvement of key departments from various professional service firms such as investment banks, private equity firms, lawyers, asset management companies and so on throughout the M&A process.

The Corporate Finance Institute presents a typical ten-stage process at the heart of any successful merger or acquisition. At the start of any M&A, the acquirer firstly establishes an acquisition strategy which sets out a clear idea of the goal of the acquisition and answers the question, ‘what is the business purpose for acquiring the target company?’. As a tenet of the acquisition strategy, the acquirer would normally also set a key criterion in order to identify potential target companies. Such criteria can range from assessing profit margins, valuations, market position, the geographical location of target companies, the customer base of target companies and many other criteria. Through the search criteria, acquirers would then be able to determine and evaluate their potential acquisition targets in order to begin the acquisition planning.

The acquisition planning and valuation analysis stage involves the acquirer making contact with the companies that meet its search criteria, either for a merger, or to take over through an acquisition. This process allows the acquirer to obtain more information on the target and assess how amendable the company is to either a merger or acquisition. Where needed, the acquirer would obtain substantial financial information from the target, to also determine the profitability of such merger or acquisition, evaluate the target as both a business and an acquisition target, and assess whether the merger or acquisition meets the acquirer’s budget. After producing a Letter of Intent (“LOI”), negotiations are likely to then start once the acquirer has assessed several valuation models in order to make a reasonable offer to the target, with reasonable acquisition terms.

It is imperative to note that where there are rival bidders in the M&A process, a company will have to pay a higher ‘premium’ to acquire the target company by offering more than other rival buyers. For instance, in the Arcelor-Mittal case, Mittal made the first bid on Arcelor at a premium of 27%, before later on increasing this bid to 34% in late May, with Mittal eventually purchasing Arcelor’s share at a premium of 93%.

Upon acceptance of the offer, counsel acting for both the acquirer and target undertake due diligence. On the part of the acquirer, this allows the company either confirm or correct the acquirer’s assessment of the target company’s value, through evaluating financial metrics, assets and liabilities and flag any potential antitrust issues. As asserted by Forbes, the time frame of the M&A transaction will largely depend on the urgency of the buyer to perform due diligence and complete the transaction. More negotiations also take place to properly determine the type of purchase (an asset or sale purchase), and once determined, the Sale and Purchase Agreement would be drafted and evaluated by the counsel acting for both parties. Further details of the financing would typically be solidified after the SPA has been signed, with the management teams of both the target and acquirer working together post-completion to complete the process of merging both companies.

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Central Government Industrial Tribunal/ Labour Courts are set up under the provisions of Industrial Disputes Act, 1947 for adjudication of industrial disputes arising in Central Sphere. These are set up in various States, out of which 10 are under Non-Plan and 12 under Plan Scheme.

Salary

The Pay of the Presiding Officer of National Tribunal shall be fixed at Rs 80,000/- (fixed) per month and this shall include the deputation allowance in case of serving judges and gross pension in case of retired judges.

The Salary of the Presiding Officer of the Labour Court or Industrial Tribunal shall be:

The District Judge (Entry Level) – Rs. 51,550-1230-58,930-1380-63,070
The District Judge (Selection Grade) – Rs. 57,700-1230-58,930-1380-67,210
The District Judge (Super Time Scale) – Rs. 70,290-1540-76,450

Per month inclusive of gross pension, pension equivalent or other retirement benefits.

Deadline

31st July 2020

Eligibility

According to these provisions, the post can be held by a judicial officer who is, or has been, a Judge of a High court. The terms and conditions of appointment of a Judge to the post of the presiding officer will be as per the Presiding Officers of the Labour Court/Industrial Tribunal and National Tribunal (salaries, Allowances, and other Terms and conditions of service) Rules, 2015.

In case of appointment on deputation of serving judges as presiding officer, the normal period of appointment shall be for a period of three years and in case of retired judges, the appointment shall be till the age of 65 years.

Application Process

Interested candidates who fulfil the eligibility conditions may please be finished so as to reach the Ministry within a period of forty-five (45) days from the date of the letter issued No. A-11016/04/2020-CLS-u to Government of India Shram Shaki Bhawan, Rafi Marg, New Delhi – 110001 by 31st July 2020.

About the Organizer

Glocal University is a private and coeducational institution located in Saharanpur, Uttar Pradesh, India. It is situated in the foothills of Shivalik mountains. The university is a non-profit university established by the Uttar Pradesh Private Universities Act, 2011, and is recognized by University Grant Commission.

J.P. Sharma and Associates: The foundation of the firm was laid down in the year 2013 by Late J.P.Sharma.The firm was formed with associates who were Senior Advocates of the Allahabad High Court. And since then our family has increased to 17 associates from the Allahabad and Lucknow Bench today.

About the Competition

Babu Pritam Singh Moot Court is the 1st Virtual Moot Court Competition organised by J. P. Sharma & Associates in collaboration with Glocal Law School, Saharanpur. The organisers felt that there is a need of a virtual platform at this time of Pandemic, where law students can be a part of a platform where they can draft, plead and showcase their advocacy skills.

The Moot Proposition of the competition will be based majorly on Constitutional and Criminal Laws. The proposition for the competition would be released on 30th June 2020.

Eligibility

All the students registered in 3 or 5-year LL.B course.

Registration Link

https://docs.google.com/forms/d/e/1FAIpQLSfSiF9KGqQ_4r94dgZB_DFT8CQExKIL6tXhLcurHcbBCssNNw/viewform

Registration Fee

Rs. 600 per team

Registration Procedure

Details of Account

Account Number: 2214436903
IFSC Code: KKBK0000811
Account Holder’s Name: Prashant Sharma

OR

UPI ID: 8881633332@kotak

The Registration Fee must be paid by all the teams and the copy of such transaction must be attached with the registration form.

Kindly provide a Gmail Id for the convenience.

Each Participant must provide their Name, Year of Study, Mobile number/’s (Whatsapp Must), and E-mail ID. All such communication shall essentially take place through E-mails.

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Rule BookDownload

Moot Court PropositionDownload

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Contact Details

Anubhav Bajpai: 7752955714, 9260983299
Anuj Karnatak: 9669776904
Divyaansh Shrivastava: 8953552623
E-mail ID: virtualmootcourt[at]gmail.com

This article is written by Akshaya V, a student of CMR University, School of Legal Studies, Bangalore.

Synopsis

This article explains the meaning of vicarious liability, the relationship between directors and the Company and further explains the cases in which the Company is vicariously liable for the acts done by its directors.

INTRODUCTION

One of the main features of a Company is a separate legal entity, that is to say, the company and its members are distinct. Assets of the members are not assets of the company and vice versa. Notably, directors and members of a company are not one. Directors are appointed under the Companies Act, 2013 and entrusted with duties to run business. On the other hand, members are shareholders entitled to vote in meetings of the Company and elect competent directors. Section 166 of the Companies Act, 2013 identifies the duties of directors in a company. Directors shall exercise due diligence, care and act in good faith, not gain undue advantage over the company and not proceed with personal interests conflicting with interests of the company. One of the main powers of the Board of Directors is that they shall be entitled to exercise all such powers and do all such acts as the company. This can be apprehended that the powers of the board are co-extensive with the powers of the Company. Therefore, directors act for the company and its objectives, of course, limited by Memorandum of Association and Articles of Association charted out for the Company.

Concept of Vicarious Liability

Generally, a person becomes liable for his acts. However, in cases where a relationship exists in the form of employer and employee, who is entrusted with duties to be carried out on behalf of the employer. This concept finds its basis on the maxim “qui facit per alium facit per se” which means “he who acts through another, acts for himself”. This maxim always stands as a presumption in determining a master-servant relationship. The master is held liable for all acts done by his servant during the course of employment. The explanation for “during the course of employment” is that the act done should be exercised in the capacity of a servant on behalf of his master and as a matter of duty. Thus, if a boss authorizes his servant to deal with clients within his scope, violation of acting within scope leads to the liability of the master. The said act may be by fraud, negligence, mistake or misrepresentation. The reason for vicarious liability was held in the case of Barwick v English Joint Stock Bank – though the master has not authorized the acts of servant, however, he has appointed him to do that class of acts and hence answerable for how his servant has conducted himself in exercising duty.

Vicarious Liability Of The Company For The Acts Of Directors

When an act done by the directors of a company is wrongful and a third party files a suit, it is pertinent to determine who is liable for such acts, whether the directors or the company. The following questions are brought into light before determining liability –

Can the company be liable for the acts done by the directors?
Why is the company liable vicariously for the acts done by directors?
Under which cases the Company is not held liable?

Liability of the Company

As already discussed directors are executives responsible for running the company to achieve its objectives. Directors act as the representative of the Company in managing and transacting business and trustees of the Company’s assets. The Company which they are representing is held vicariously liable for the acts done by them during the course of employment. Similarly, the directors are liable for the acts in the names of the Company. For example, if a director’s decision was against the company which leads to loss of the company and if a debenture holder whose interest is not paid files a suit, it would be against the company for the acts of directors.

The legal position of the Company is that of a separate legal entity, it can sue and be sued and shall hold legal rights and duties. But despite such characteristics, the company is personified by its directors to carry out its affairs. Directors act in three capacities in their relation to the company – agents, trustees and employees. Hence, they are required to act like a man of prudence as he would deal with his personal affairs of course with reasonable care. He is required to apply his mind diligently and take up the due standard of care. Any misconduct, whether willful or not amounts to misfeasance and shall hold the company vicariously liable.

Reason for vicarious liability of the Company

Separate Legal Entity and Corporate veil – A company is a separate legal entity distinct from its member. It means the assets of the company are not assets of the members. However, the exception to this rule is the corporate veil of incorporation. The concept of corporate veil is like a shield that covers the directors from identification and makes the Company wholly liable and accountable. This is a legal concept that protects directors from being liable. For illustration, if taxes were not received from the Company and if the Tax Department files a suit, it shall be filed in the name of the Company as the directors are behind the corporate veil, even though it was their duty to settle the tax amount.

Company when not vicariously liable

Lifting of Corporate veil – This is an exception to separate legal entity. Both in provisions of Company Law and judicial pronouncements, there are incidents of a veil being lifted so that the identity of the members can be seen. It simply means that members, directors and certain persons shall also be personally held liable. The Court may order the directors to be liable when a fraudulent act is conducted in the name of the Company, when the creditors suffer losses due to non – repayment of loan or interest, the act of directors is ultra vires their powers and when the directors are negligently acting for personal gains. Most importantly, if directors do not fulfil their duties mentioned under Section 166 of the Companies Act, 2013 shall be personally held liable for punishment of fine which shall not be less than One Lakh rupees but which may extend to Five Lakh rupees.

Conclusion

Vicariously liability is akin to strict liability – no-fault liability. If the act done by the directors is bona fide in nature, the Company stands liable in case any liability arises from such bonafide transactions. The concept of the lifting of the corporate veil is only in the case of acts done by the directors which are malafide in nature. Otherwise, generally, the Company is liable for the tortious acts of its directors.

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This article is written by Sambavi Marwah, a fourth-year law student, from Delhi Metropolitan Education, GGISPU. This article of mine talks about the aspect of ‘confession’ under The Indian Evidence Act, 1872. It states the definition, types of confession and its evidentiary value in the eyes of the Indian Judiciary.

Admission and Confession

The general meaning of the word confession is to confess or admit what the person has been feeling. Thus, in the eyes of law, it is the admission of guilt or its inferences by an accused in the custody. The term confession appears to be in section 24 to 30 of The Indian Evidence Act, 1872. It falls in the ambit of Admissions (Section 17 to 23). Therefore confession is the species of an admission.

The basic difference between admission and confession is that admission is the acceptance of circumstances of the offence without admitting to the actual commission of an offence, unlike confession. In the case of Ram Singh v. State, it was concluded that if the prosecution relies on the statement as being true it is confession and if the statement is relied on because it is false it is admission. In criminal cases, a statement by accused, not amounting to confession but giving a hint that the accused might have committed the crime is his admission.

Section 24: Relevancy of Confession

Section 24 of the Indian Evidence Act, 1872 talks about confession. Although confession has not been defined anywhere directly this section conveys the extent to which a confession is relevant in the eyes of law. Any confession that is caused by inducement, threat or promise, will be considered of no use. It will be regarded as irrelevant in the eyes of the judiciary. The inducement, threat or promise must in the opinion of the court, be sufficient to give the accused ground, which would appear to him reasonable, for supposing that by making it, he would gain any advantage or avoid any evil of a temporal nature in reference to the proceedings against him.

However, a confession, if it is voluntary, truthful and reliable in nature, it can act as advantageous piece evidence to establish the guilt of the accused person. In the case of Veera Ibrahim v. State of Maharashtra[1], it was held that a statement in order to amount to a ‘confession’ must either admit in terms of offence, or at any rate substantially all the facts which constitute the offence.

Forms of Confession

A confession may occur in many forms, such as:

Extra-judicial confessions:
Extra-judicial confession or the informal confessions are those which are made to any person other than the ones authorized by the law to take the confession.
Extra-Judicial confessions are proved by calling the person as a witness before whom the confession has been made.
In the case of Balwinder Singh v. State of Punjab[2], it was held that it is precarious to base a conviction on the ground of an extra-judicial confession as it cannot be relied on and needs other evidence to support the authenticity. The courts generally look for independent reliable corroboration before placing any reliance upon an extra-judicial confession.

Judicial Confessions

Judicial confessions are the ones made in front of the judicial magistrate or before the court during the proceeding.
There is no requirement for calling the person to whom the confession has been made to act as a witness.
If the court feels the confession to be truthful, genuine and voluntary, it can be relied upon. Thus a conviction may be based on the judicial confessions.

The court has to take care that no matter whether it is a judicial or an extrajudicial confession, the confession by the accused must be rational with the Article 20(3) of Indian Constitution which says, ‘No one should be compelled to give evidence against himself’ that means the confession must be true and strictly voluntary, then only a person can be charged for any criminal offence. Therefore, the judicial and extra-judicial confessions have distinguished the relevancy to determine the accused’s guilt.

Role of Police in Relation to Confessions

Section 25: Confession made to the police

No confession made to the police officer shall be proved against a person accused of any offence. This section makes a confessional statement of accused before the police officers inadmissible as evidence.

In the case of Aghnu Nageshia v. State of Bihar[3] it was said that the first information report was a confessional statement to a police officer and as such no part of it could be admitted into evidence on account of the ban in section 25 of the Indian Evidence Act, 1872.

It is evident that this section provides protection to the accused against the torture which is done by the police officers to make the accused confess the crime, even if he has not admitted one. Thus it is held to be involuntary and unreliable evidence.

Section 26: Confession by accused while in police custody

Section 26 prohibits the judicial bodies to prove the guilt of accused by his confession which is made to police in police custody. This section provides that if the confession is made in the presence of the Magistrate, it can be proved as against the accused.

Section 27: How much information produced by the accused may be proved

This section is based on the view that if any fact is actually discovered in consequence of information given, it can be said that the information was true and accordingly can be successfully allowed to be given in evidence in the court of law.

In the case of Kamal Kishore v. State of (Delhi Administration), 1997, it was held that a fact discovered in the information supplied by the accused in his disclosure statement is a relevant fact and that is only admissible in the evidence if something new is discovered or recovered from the accused which was not within the knowledge of the police before recording the disclosure statement of the accused.

Relevance of Confession when Filtered

The Indian Evidence Act, 1872 in section 28 provides that if there is an inducement, threat or promise was given to the accused in order to obtain a confession of guilt from him which is later removed from the confession, it becomes relevant in the eyes of the court to accept it as reliable evidence as it is now voluntary and useful.

Evidentary Value of Confession

The Indian Evidence Act, 1872 provides the term confession which acts as an important element while giving a judgment of a case. A confessional statement made before the Magistrate can be used against the accused and solves the case timely. But if the confession is made elsewhere and not in the presence of the magistrate or any other person authorized by the law, it does not act as an evidence to the case and thus and has no value to it. Thus, the evidentiary value of an extra-judicial confession increases instantly when it is supported by other evidence.

CONCLUSION

A confession is the admission of the crime or the guilt of an accused person. It may be said that confession is the species and admission is the genus. Admission (section 17 to 23) is mere admitting or agreeing to the facts of the crime, but confession (25 to 30) is the acceptance or the acknowledgement of the guilt of the maker. Therefore, it is correctly said by Albert Camus – “A guilty conscience needs to confess. A work of art is a confession.”

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[1] AIR 1976 SC 1167

[2] https://indiankanoon.org/doc/1150284/

[3] AIR 1966 SC 119

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This article is written by Harshit Khandelwal, 2^nd year Law student currently pursuing BBA-LL.B(Hons.) from Unitedworld School of Law, Karnavati University. In this article, the author discusses the concept of Law of Bailment, duties and rights of bailor and bailee.

INTRODUCTION

The term bailment can be understood as the transfer of goods by one person to another for some motive and when it is accomplished the goods are returned back to its actual owner. For example, Z delivering his bike for service at the service centre is an instance of bailment. The person delivering the goods is known as bailor and the person to whom goods are delivered is known as bailee. Still, if the owner continues to maintain authority over the goods, there is no bailment.

For e.g., If Z gives his car to A, his friend for 12 days, but at the same time he keeps one key with himself and during this period of 12 days he used the car for his personal purpose. Now this will not be considered as a case of bailment as A is keeping control over the property bailed.

Duties of a Bailee

1. Taking Proper Care of Goods

According to section 151 of the Indian Contract Act, 1872, says that it is the duty of the bailee to take good care of the goods bailed to him. The good should be taken care of by bailee as an ordinary man will be taking care of his goods of the same quantity and quality.

If the bailee takes good care of the goods then he will not be liable for any loss. However, the bailee will not be liable for any loss that occurred due to Act of God though he agrees to take special care for them.

2. Keep Goods Separate

The bailee needs to put the goods separately from his own goods. He should not mix his goods with the goods under bailment.

3. Not to make unauthorized use

As per section 153 of the Indian Contract Act, the bailee is not authorized to use the bailed goods. The bailor can terminate the bailment if the bailee makes any unauthorized use of the goods.

4. Return Goods

The goods shall return to the bailor once the motive for bailment is completed.

For e.g., Z leaves a dog in the custody of A. The dog gets a puppy. A shall deliver the dog along with the puppy to Z.

Bailee’s Rights

Right to Lien

Lien is primarily a right of one individual to keep back the property/goods which are in his possession, owned by another individual until certain conditions are fulfilled.

For e.g., If Z gives his watch for repairing to a shopkeeper. The shopkeeper is entitled to keep the watch with him until Z pays him for the cost of repairing.

For exercising lien some factors are need to be considered –

1. Some services must be provided to the bailor by bailee involving skill and labour.

2. The services must meet the criteria of the bailment .

3. The services must be concerning to the thing bailed .

General Lien

A general lien is explained in section 171 of the Indian Contract Act. It is right to retain the goods of another for the balance of accounts. It authorizes a person to retain the goods with him until all the claims of the person in possession against the owner of goods are settled.

Duties of a Bailor

1. Disclosure of each and every fault is the duty of the bailor. If bailor fails to disclose any such faults then he will be responsible for the damages caused to his/her goods.

2. It is the duty of the bailor to accept the goods once the motive for which goods were bailed is completed.

3. The bailor is also under the obligation to pay the extraordinary expenses suffered by the bailee for such bailment .

Essentials of Bailment

1. The Existence of a Valid Contract

The foremost condition of bailment is the existence of a valid contract which states that goods are to be returned when the motive of bailment is fulfilled. All conditions need to be fulfilled for a valid contract like a lawful object, free consent and competent parties.

2. Delivery of the Possession of Goods

The concept of bailment goes around the fact that goods are delivered to the bailee for a temporary period, and the bailee cannot have its a permanent possession.

3. Return of Goods

In the process of bailment, goods are delivered to the bailee for a specific purpose and after successful completion of the purpose, the bailee should return the goods to the bailor in the same condition as directed by the bailor. If the goods are not returned back by the bailee to the bailor, then it will not be considered as a bailment.

Types of Bailment

There are three types of bailment –

1. A bailment that only benefits the bailor

When a bailee acts gratuitously that gives the bailor sole benefit from the bailment.

For e.g., If a hotel(bailee) provides complimentary drinks which is free of charge to its customers(bailor). By uprightness of the conditions of the bailment, the bailee consented to act without any expectation from the bailor.

2. A Bailment that only Benefits the Bailee

When both parties agree that bailee can use the property for his/her own advantage without giving anything in return to the bailor is said to be the sole benefit of the bailee in the bailment.

For e.g., When a student issues a book from the library which is for the sole benefit of the bailee in the bailment.

3. A Bailment that Benefits both the Bailer and Bailee

An exchange of performance between both the parties creates a mutual benefit for both the bailor and bailee in the bailment.

For e.g., A bailment for repairing of a mobile phone where there will be a mutual benefit as the bailee receives his fees for the work done of the bailor.

CONCLUSION

After examining the provisions of bailment in brief we have seen that the concept of bailment includes handing over the goods to the bailee for a specified purpose and returning it back to the original owner once the motive is completed. Rights and duties of bailor and bailee are briefly defined for the easy understanding of the basic concepts of bailment.

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