SMU ID : 520946876 LEGAL ASPECTS OF BUSINESS

SIKKIM MANIPAL UNIVERSITY

Directorate of Distance Education

ASSIGNMENTS

Name : GIRISH KUMAR S.

Roll Number : 520946876

Learning Centre : INSTITUTE OF BUSINESS

MANAGEMENT AND
RESEARCH (IBMR), Bangalore

Learning Centre Code : 02717

Course / Semester : MBA, 3rd Semester

Subject Title : LEGAL ASPECTS OF BUSINESS

Subject Code : MB 0035

Assignment No. : Set-1 & 2

Date of Submission at
the Learning Centre : 05-12-2010

Checked by Faculty : Date :

Marks Obtained :

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SET – 1, LEGAL ASPECTS OF BUSINESS

1) What do you mean by free consent? Under what circumstances consent is

considered as free? Explain.
Ans:
Free consent:
One of the essential of a valid contract is free consent. Sec. 13 of the act defense
consent has two or more persons are said to consent where they agree upon think in the
same sense. There should be consents at the ad idem or identity of minds.

The validity of consent depends not only on consents parties but their consents
must also be free. According to section 14, consent is said to be free when it is not
caused by :
1) Coercion has defined under sec.15 or
2) Undue influence as defined under sec. 16 or
3) Fraud has defined under sec. 17 or
4) Mis-representation or defined under sec. 18 or
5) Mistake subject to the probations of sec. 21& 22.

i) Coercion:
Sec. 15 “coercion is the committing or threatening to commit any act forbidden by
the Indian penal code or the unlawful detaining or threatening to detain any property, to
the prejudice of any person whatever, with the intention of causing any person to enter
into an agreement. “ It is immaterial weather the Indian penal code is or is not in force in
the place where the coercion is employed.

Under English Law, coercion must be applied to one’s person only whereas under
Indian Law it can be one’s person or property.

So also under English Law, the subject of it must be the contracting party himself
or his wife, parent, child or other near relative. Under Indian Law, the act or threat may
be against any person. It is to be noted that he act need not be committed in India itself.
Unlawful detaining or threatening to detain any property it also coercion.

While threat to sue does not amount to coercion threat to file a false suit amounts
to coercion since Indian Penal Code forbids such an act.

ii) Undue influence:

In the words of Holland,” Undue influence refers to “the unconscious use of power
over another person, such power being obtained by virtue of a present or previously
existing dominating control arising out of relationship between the parties.”

According sec. 16(1) “ A contract is said to be induced by undue influence where

the relation subsisting between the parties are such that one of the parties is in a position
to dominate the will of the other and uses that position to obtain an unfair advantage over
the other.”

A person is deemed to be in a position to dominate the will of other.

(a) Where he holds a real or apparent authority over the other or where he stands in a
fiduciary relation to the other; or
(b) Where he makes a contract with a person whose mental capacity is temporarily or
permanently affected by reason of age, illness or mental or bodily distress:

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(c) Where a person, who is in a position to dominate the will of another, enters into a
contract with him and the transaction appears to be unconscionable. The burden
of proving that such contract was not by undue influence shall lie upon the person
in a position to dominate the will of the other.

Both coercion and undue influence are closely related. What contributes coercion
or undue influence depends upon the facts of each case.
Sec. 16(i) provides that two elements must be present. The first one is that the
relations subsisting between the parties to a contract are such that one of them is in a
position to dominate the will of the other.

Secondly, he uses that position to obtain unfair advantage over the other. In other
words, unlike coercion undue influence must come from a party to the contract and not a
stranger to it. Where the parties are not in equal footing or there is trust and confidence
between the parties, one party may be able to dominate the will of the other and use the
position to obtain an unfair advantage. However, where there is no relationship shown to
exit from which undue influence is presumed, that influence must be proved.

iii) Fraud:
A false statement made knowingly or without belief in its truth or recklessly
careless whether it be true or false is called fraud.
Sec. 17 of the act instead of defining fraud gives various acts which amount to fraud.
Sec. 17: Fraud means and includes any of the following acts committed by a party to a
contract or with his connivance or by his agent to induce him to enter into contract:
1) The suggestion that a fact is true when it is not true by one who does not believe it
to be true. A false statement intentionally made is fraud. An absence of honest
belief in the truth of the statement made is essential to constitute fraud. The false
statement must be made intentionally.
2) The active concealment of a fact by a person who has knowledge or belief of the
fact. Mere non-disclosure is not fraud where there is no duty to disclose.
3) A promise made without any intention of performing it.
4) Any other act fitted to deceive. The fertility of man’s invention in devising new
schemes of fraud is so great that it would be difficult to confine fraud within the
limits of any exhaustive definition.
5) Any such act or omission as the law specially declares to be fraudulent.

iv) Misrepresentation:
Before entering into a contract, the parties will may certain statements inducing
the contract. Such statements are called representation. A representation is a statement
of fact made by one party to the other at the time of entering into contract with an
intention of inducing the other party to enter into the contract. If the representation is
false or misleading, it is known as misrepresentation. A misrepresentation may be
innocent or intentional. An intentional misrepresentation is called fraud and is covered
under section 17 sec. 18 deals with an innocent misrepresentation.

v) Mistake:
Usually, mistake refers to misunderstanding or wrong thinking or wrong belief. But
legally, its meaning is restricted and is to mean “operative mistake”. Courts recognize
only such mistakes, which invalidate the contract. Mistake may be mistake of fact or
mistake of law.
Sec. 20 ”Where both parties to an agreement are under a mistake as to a matter
of fact essential to the agreement, the agreement is void”.

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Sec.21 ” A contract is not void able because it was caused by a mistake as to any
law in force in India: but a mistake as to a law not in force in India has the same effect as
a mistake of fact”.
Bilateral mistake: Sec.20 deals with bilateral mistake. Bilateral mistake is one
where there is no real correspondence of offer and acceptance. The parties are not really
in consensus-ad-item. Therefore there is no agreement at all.
A bilateral mistake may be regarding the subject matter or the possibility of performing
the contract.
______________________________________________________________________

2) Define negotiable instrument. What are its features and characteristics?

Which are the different types of negotiable instruments?
If Mr. A is the holder of a negotiable instrument, under what situations
i. Will he be the Holder in due course?
ii. He has the right to discharge?
iii. He can make endorsements?
Ans:

Meaning of Negotiable Instruments

To understand the meaning of negotiable instruments let us take a few examples
of day-to-day business transactions.
Suppose Pitamber, a book publisher has sold books to Prashant for Rs 10,000/-
on three months credit. To be sure that Prashant will pay the money after three months,
Pitamber may write an Order addressed to Prashant that he is to pay after three months,
for value of goods received by him, Rs.10, 000/- to Pitamber or anyone holding the order
and presenting it before him (Prashant) for payment. This written document has to be
signed by Prashant to show his acceptance of the order. Now, Pitamber can hold the
document with him for three months and on the due date can collect the money from
Prashant. He can also use it for meeting different business transactions.
For instance, after a month, if required, he can borrow money from Sunil for a
period of two months and pass on this document to Sunil. He has to write on the back of
the document an instruction to Prashant to pay money to Sunil, and sign it. Now Sunil
becomes the owner of this document and he can claim money from Prashant on the due
date. Sunil, if required, can further pass on the document to Amit after instructing and
signing on the back of the document. This passing on process may continue further till
the final payment is made.

In the above example, Prashant who has bought books worth Rs. 10,000/- can
also give an undertaking stating that after three month he will pay the amount to
Pitamber. Now Pitamber can retain that document with himself till the end of three
months or pass it on to others for meeting certain business obligation (like with Sunil, as
discussed above) before the expiry of that three months time period.
You must have heard about a cheque. What is it? It is a document issued to a
bank that entitles the person whose name it bears to claim the amount mentioned in the
cheque. If he wants, he can transfer it in favour of another person. For example, if Akash
issues a cheque worth Rs. 5,000/ - In favour of Bidhan, then Bidhan can claim Rs.
5,000/- from the bank, or he can transfer it to Chander to meet any business obligation,
like paying back a loan that he might have taken from Chander. Once he does it,
Chander gets a right to Rs. 5,000/- and he can transfer it to Dayanand, if required. Such
transfers may continue till the payment is finally made to somebody.
In the above examples, we find that there is certain documents used for payment
in business transactions and are transferred freely from one person to another. Such
documents are called Negotiable Instruments. Thus, we can say negotiable instrument is

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a transferable document, where negotiable means transferable and instrument means

document. To elaborate it further, an instrument, as mentioned here, is a document used
as a means for making some payment and it is negotiable i.e., its ownership can be
easily transferred.
Thus, negotiable instruments are documents meant for making payments, the
ownership of which can be transferred from one person to another many times before the
final payment is made.

Definition of Negotiable Instrument

According to section 13 of the Negotiable Instruments Act, 1881, a negotiable
instrument means “promissory note, bill of exchange, or cheque, payable either to order
or to bearer”.

Types of Negotiable Instruments

According to the Negotiable Instruments Act, 1881 there are just three types of
negotiable instruments i.e., promissory note, bill of exchange and cheque. However
many other documents are also recognized as negotiable instruments on the basis of
custom and usage, like hundis, treasury bills, share warrants, etc., provided they possess
the features of negotiability. In the following sections, we shall study about Promissory
Notes (popularly called pronotes), Bills of Exchange (popularly called bills), Cheque and
Hundis (a popular indigenous document prevalent in India), in detail.

i. Promissory Note
Suppose you take a loan of Rupees Five Thousand from your friend Ramesh. You
can make a document stating that you will pay the money to Ramesh or the bearer on
demand. Or you can mention in the document that you would like to pay the amount after
three months. This document, once signed by you, duly stamped and handed over to
Ramesh, becomes a negotiable instrument.
Now Ramesh can personally present it before you for payment or give this
document to some other person to collect money on his behalf. He can endorse it in
somebody else’s name who in turn can endorse it further till the final payment is made by
you to whosoever presents it before you. This type of a document is called a Promissory
Note.
Section 4 of the Negotiable Instruments Act, 1881 defines a promissory note as
‘an instrument in writing (not being a bank note or a currency note) containing an
unconditional undertaking, signed by the maker, to pay a certain sum of money only to or
to the order of a certain person or to the bearer of the instrument’.

Specimen of a Promissory Note

Features of a promissory note

Let us know the features of a promissory note.
i. A promissory note must be in writing, duly signed by its maker and properly stamped as
per Indian Stamp Act.

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ii. It must contain an undertaking or promise to pay. Mere acknowledgement of

indebtedness is not enough. For example, if some one writes ‘I owe Rs. 5000/- to Satya
Prakash’, it is not a promissory note.
iii. The promise to pay must not be conditional. For example, if it is written ‘I promise to
pay Suresh Rs 5,000/- after my sister’s marriage’, is not a promissory note.
iv. It must contain a promise to pay money only. For example, if some one writes ‘I
promise to give Suresh a Maruti car’ it is not a promissory note.
v. the parties to a promissory note, i.e. the maker and the payee must be certain.
vi. A promissory note may be payable on demand or after a certain date. For example, if
it is written ‘three months after date I promise to pay Satinder or order a sum of rupees
Five Thousand only’ it is a promissory note.
vii. The sum payable mentioned must be certain or capable of being made certain. It
means that the sum payable may be in figures or may be such that it can be calculated.

ii. Bill of Exchange

Suppose Rajeev has given a loan of Rupees Ten Thousand to Sameer, which
Sameer has to return. Now, Rajeev also has to give some money to Tarn. In this case,
Rajeev can make a document Directing Sameer to make payment up to Rupees Ten
Thousand to Tarn on demand or after expiry of a specified period. This document is
called a bill of exchange, which can be transferred to some other person’s name by Tarn.
Section 5 of the Negotiable Instruments Act, 1881 defines a bill of exchange as
‘an instrument in writing containing an unconditional order, signed by the maker, directing
a certain person to pay a certain sum of money only to or to the order of a certain person,
or to the bearer of the instrument’.

Specimen of a bill of exchange

iii. Cheques
Cheque is a very common form of negotiable instrument. If you have a savings
bank account or current account in a bank, you can issue a cheque in your own name or
in favour of others, thereby directing the bank to pay the specified amount to the person
named in the cheque.
Therefore, a cheque may be regarded as a bill of exchange; the only difference is
that the bank is always the drawee in case of a cheque.
The Negotiable Instruments Act, 1881 defines a cheque as a bill of exchange
drawn on a specified banker and not expressed to be payable otherwise than on
demand. Actually, a cheque is an order by the account holder of the bank directing his
banker to pay on demand, the specified amount, to or to the order of the person named
therein or to the bearer.

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iv. Hundis
A Hundi is a negotiable instrument by usage. It is often in the form of a bill of
exchange drawn in any local language in accordance with the custom of the place. Some
times it can also be in the form of a promissory note. A Hundi is the oldest known
instrument used for the purpose of transfer of money without its actual physical
movement. The provisions of the Negotiable Instruments Act shall apply to hundis only
when there is no customary rule known to the people.

Types of Hundis
There are a variety of hundis used in our country. Let us discuss some of the most
common ones.
Shah-jog Hundi: one merchant draws this on another, asking the latter to pay the amount
to a Shah. Shah is a respectable and responsible person, a man of worth and known in
the bazaar. A shah-jog Hundi passes from one hand to another till it reaches a Shah,
who, after reasonable enquiries, presents it to the drawee for acceptance of the payment.
Darshani Hundi: This is a Hundi payable at sight. The holder must present it for payment
within a reasonable time after its receipt. Thus, it is similar to a demand bill.
Muddati Hundi: A Muddati or miadi Hundi is payable after a specified period of time. This
is similar to a time bill.
There are few other varieties like Nam-jog Hundi, Dhani-jog Hundi, and Jawabee Hundi,
Jokhami Hundi, Fireman-jog Hundi, etc.

Features of Negotiable Instruments

After discussing the various types of negotiable instruments let us sum up their
features as under.
i. A negotiable instrument is freely transferable. Usually, when we transfer any property
to somebody, we are required to make a transfer deed, get it registered, pay stamp duty,
etc. But, such formalities are not required while transferring a negotiable instrument. The
ownership is changed by mere delivery (when payable to the bearer) or by valid
endorsement and delivery (when payable to order). Further, while transferring it is also
not required to give a notice to the previous holder.
ii. Negotiability confers absolute and good title on the transferee. It means that a person
who receives a negotiable instrument has a clear and undisputable title to the instrument.
However, the title of the receiver will be absolute, only if he has got the instrument in
good faith and for a consideration. Also the receiver should have no knowledge of the
previous holder having any defect in his title. Such a person is known as holder in due
course. For example, suppose Rajeev issued a bearer cheque payable to Sanjay. A
person, who passed it on to Girish, stole it from Sanjay. If Girish received it in good faith
and for value and without knowledge of cheque having been stolen, he will be entitled to
receive the amount of the cheque. Here Girish will be regarded as ‘holder in due course’.
iii. A negotiable instrument must be in writing. This includes handwriting, typing,
computer print out and engraving, etc.
iv. In every negotiable instrument there must be an unconditional order or promise for
payment.
v. The instrument must involve payment of a certain sum of money only and nothing else.
For example, one cannot make a promissory note on assets, securities, or goods.
vi. The time of payment must be certain. It means that the instrument must be payable at
a time which is certain to arrive. If the time is mentioned as ‘when convenient’ it is not a
negotiable instrument. However, if the time of payment is linked to the death of a person,
it is nevertheless a negotiable instrument as death is certain, though the time thereof is
not.
vii. The payee must be a certain person. It means that the person in whose favour the
instrument is made must be named or described with reasonable certainty. The term

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‘person’ includes individual, body corporate, trade unions, even secretary, director or
chairman of an institution. The payee can also be more than one person.
viii. A negotiable instrument must bear the signature of its maker. Without the signature
of the drawer or the maker, the instrument shall not be a valid one.
ix. Delivery of the instrument is essential. Any negotiable instrument like a cheque or a
promissory note is not complete till it is delivered to its payee. For example, you may
issue a cheque in your brother’s name but it is not a negotiable instrument till it is given
to your brother.
x. Stamping of Bills of Exchange and Promissory Notes is mandatory. This is required as
per the Indian Stamp Act, 1899. The value of stamp depends upon the value of the
promote or bill and the time of their payment.

Negotiation and Indorsement

Persons other than the original obligor and obligee can become parties to a
negotiable instrument. The most common manner in which this is done is by placing
one's signature on the instrument (“indorsement”): if the person who signs does so with
the intention of obtaining payment of the instrument or acquiring or transferring rights to
the instrument, the signature is called an indorsement. There are four types of
indorsements contemplated by the Code:
• An indorsement which purports to transfer the instrument to a specified person is
a special indorsement;
• An indorsement by the payee or holder which does not contain any additional
notation (thus puporting to make the instrument payable to bearer) is an
indorsement in blank;
• An indorsement which purports to require that the funds be applied in a certain
manner (i.e. "for deposit only", "for collection") is a restrictive indorsement; and,
• An indorsement purporting to disclaim retroactive liability is called a qualified
indorsement (through the inscription of the words "without recourse" as part of the
indorsement on the instrument or in allonge to the instrument).

If a note or draft is negotiated to a person who acquires the instrument

1. in good faith;
2. for value;
3. without notice of any defenses to payment,
The transferee is a holder in due course and can enforce the instrument without
being subject to defenses which the maker of the instrument would be able to assert
against the original payee, except for certain real defenses. These real defenses include
(1) forgery of the instrument; (2) fraud as to the nature of the instrument being signed; (3)
alteration of the instrument; (4) incapacity of the signer to contract; (5) infancy of the
signer; (6) duress; (7) discharge in bankruptcy; and, (8) the running of a statute of
limitations as to the validity of the instrument.
The holder-in-due-course rule is a rebuttable presumption that makes the free
transfer of negotiable instruments feasible in the modern economy. A person or entity
purchasing an instrument in the ordinary course of business can reasonably expect that it
will be paid when presented to, and not subject to dishonor by, the maker, without
involving itself in a dispute between the maker and the person to whom the instrument
was first issued (this can be contrasted to the lesser rights and obligations accruing to
mere holders). Article 3 of the Uniform Commercial Code as enacted in a particular
State's law contemplate real defenses available to purported holders in due course.
The foregoing is the theory and application presuming compliance with the
relevant law. Practically, the obligor-payor on an instrument who feels he has been
defrauded or otherwise unfairly dealt with by the payee may nonetheless refuse to pay

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even a holder in due course, requiring the latter to resort to litigation to recover on the
instrument.
______________________________________________________________________

3) a) Distinguish between guarantee and indemnity.

Ans :
Distinction between Indemnity and Guarantee

Indemnity Guarantee
Number of parties: There are two
There are three parties to it viz., the principal
parties: Indemnifier and Indemnified.
debtor, the surety & the creditor.
Number of Contracts: There is only
Three contracts: (i) between the principal debtor
one contract between the indemnified
and the creditor, (ii) between the surety and the
and Indemnifier.
creditor, and (iii) between the surety and the
principal debtor (implied).
Form: May be written or oral in both
Indian and English Law.
According to section 4, of the Statute of Frauds
(in England) it should be in writing: in Indian Law
Interest in the transaction: The
it may be written or oral.
indemnifier has interest in the
transaction apart from the indemnity
The guarantee is totally unconnected with the
i.e., apart from his promise to pay the
contract but the only interest in the contract is
loss.
his promise to the loss.
Nature of risk: It is possibility of risk of
There is an existing debt the discharge or
any loss happening in future against
performance of which is guaranteed by the surety
which the indemnifier undertakes to
i.e., it is the absolute and subsisting risk.
indemnify
i.e., continuing risk.
In a guarantee the liability of the surety is co-
extensive with that of the principal debtor
Nature of liability: The indemnifier is
(ancillary liability). The guarantor if secondarily
primarily and independently liable.
liable except where the principal debtor is
incapable of contracting).
Subrogation: An indemnifier cannot
have subrogation unless there is an
If a surety pay the debt or perform the obligation
assignment. Otherwise he must bring
he can file a suit in his own name against the
the suit in the name of the indemnified.
principal debtor to reimburse the amount so paid.
Request: It is not necessary for the
It is necessary for the surety to give his
indemnifier to act the request of the
guarantee at the request of the debtor.
indemnified.
______________________________________________________________________

3) b) Give a short note on Rights of Surety.

Ans :

Joint sureties or debtors:

Where several persons are bound together in any bond, bill or other writing as
joint debtors or as joint sureties, in any sum of money made payable to any person,
his/her executors, administrators, order or assign and such bond, bill, or other writing
shall be paid by any of such joint debtors or joint sureties, the creditor shall assign such
bond, bill, or other writing, to the person paying the same; and such assignee shall, in

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his/her own name, as assignee, or otherwise, have such action or remedy as the creditor
himself/herself might have had against the other joint debtors, or sureties, or their
representatives, to recover such proportion of the money, so paid, as may be justly due
from the defendants.

Defense of infancy to joint sureties or debtors:

Where several persons are bound together in any bond, bill or other writing or
judgment as joint debtors or as joint sureties, in any sum of money, made payable to any
person or corporation, the executors, administrators, successors, order or assigns, and 1
or more of such persons was, at the time of making, signing or executing the same, or at
the time of the rendition of such judgment, an infant, such fact shall be no defense in any
action, proceeding or suit for the enforcement of the liability of those bound there under,
excepting as regards the person who was an infant at the time of making, signing or
executing such bond, bill or other writing, or who was an infant at the time such judgment
was rendered.

Rights of surety or of joint debtor on payment of judgment:

(a) If a judgment recovered against principal and surety shall be paid by the surety, the
creditor shall mark such judgment to the use of the surety so paying the same; and the
transferee shall, in the name of the plaintiff, have the same remedy by execution or other
process against the principal debtor as the creditor could have had, the transfer by
marking to the use of the surety being first filed of record in the court where the judgment
is.
(b) Where there is a judgment against several debtors or sureties and any of them shall
pay the whole, the creditor shall mark such judgment to the use of the persons so paying
the same; and the transferee shall, in the name of the plaintiff, be entitled to an execution
or other process against the other debtors or sureties in the judgment, for a proportion
able part of the debt or damages paid by such transferee; but, no defendant shall be
debarred of any remedy against the plaintiff or the plaintiff's representatives or assigns
by any legal or equitable course of proceeding whatever.

_____________________________________________________________________

4) a) Mention the remedies for breach of contract. How will the injured party claim
it?
Ans:
Breach of Contract & Remedies:

1. Nature of breach :
A breach of contract occurs where a party to a contract fails to perform, precisely
and exactly, his obligations under the contract. This can take various forms for example,
the failure to supply goods or perform a service as agreed. Breach of contract may be
either actual or anticipatory.

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Actual breach occurs where one party refuses to form his side of the bargain on
the due date or performs incompletely. For example: Poussard v Spiers and Bettini v
Gye.
Anticipatory breach occurs where one party announces, in advance of the due
date for performance, that he intends not to perform his side of the bargain. The innocent
party may sue for damages immediately the breach is announced. Hochster v De La
Tour is an example.
Effects of breach A breach of contract, no matter what form it may take, always
entitles the innocent party to maintain an action for damages, but the rule established by
a long line of authorities is that the right of a party to treat a contract as discharged arises
only in three situations.

The breaches, which give the innocent party the option of terminating the contract, are:
(a) Renunciation
Renunciation occurs where a party refuses to perform his obligations under the
contract. It may be either express or implied. Hochster v De La Tour is a case law
example of express renunciation.
Renunciation is implied where the reasonable inference from the defendant’s
conduct is that he no longer intends to perform his side of the contract. For example:
Omnium D’Enterprises v Sutherland.
(b) Breach of condition
The second repudiator breach occurs where the party in default has committed a
breach of condition. Thus, for example, in Poussard v Spiers the employer had a right to
terminate the soprano’s employment when she failed to arrive for performances.
(c) Fundamental breach
The third repudiator breach is where the party in breach has committed a serious
(or fundamental) breach of an in nominate term or totally fails to perform the contract.
A repudiator breach does not automatically bring the contract to an end. The innocent
party has two options: He may treat the contract as discharged and bring an action for
damages for breach of contract immediately. This is what occurred in, for example,
Hochster v De La Tour.
He may elect to treat the contract as still valid, complete his side of the bargain
and then sue for payment by the other side. For example, White and Carter Ltd v
McGregor.

2. Introduction to remedies
Damages are the basic remedy available for a breach of contract. It is a common
law remedy that can be claimed as of right by the innocent party.
The object of damages is usually to put the injured party into the same financial
position he would have been in had the contract been properly performed.
Sometimes damages are not an adequate remedy and this is where the equitable
remedies (such as specific performance and injunction) may be awarded.

3. Damages
i. Nature:
The major remedy available at common law for breach of contract is an award of
damages. This is a monetary sum fixed by the court to compensate the injured party.
In order to recover substantial damages the innocent party must show that he has
suffered actual loss; if there is no actual loss he will only be entitled to nominal damages
in recognition of the fact that he has a valid cause of action. In making an award of
damages, the court has two major considerations:
Remoteness – for what consequences of the breach is the defendant legally
responsible?

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The measure of damages – the principles upon which the loss or damage is
evaluated or quantified in monetary terms. The second consideration is quite distinct
from the first, and can be decided by the court only after the first has been determined.

ii. Remoteness of loss

The rule governing remoteness of loss in contract was established in Hadley v
Baxendale. The court established the principle that where one party is in breach of
contract, the other should receive damages which can fairly and reasonably be
considered to arise naturally from the breach of contract itself (‘in the normal course of
things’), or which may reasonably be assumed to have been within the contemplation of
the parties at the time they made the contract as being the probable result of a breach.
Thus, there are two types of loss for which damages may be recovered:
1. What arises naturally; and
2. What the parties could foresee when the contract was made as the likely result of
breach.

As a consequence of the first limb of the rule in Hadley v Baxendale, the party in
breach is deemed to expect the normal consequences of the breach, whether he actually
expected them or not. Under the second limb of the rule, the party in breach can only be
held liable for abnormal consequences where he has actual knowledge that the abnormal
consequences might follow or where he reasonably ought to know that the abnormal
consequences might follow – Victoria Laundry v Newman Industries.

iii. The measure (or quantum) of damages

In assessing the amount of damages payable, the courts use the following
principles:
The amount of damages is to compensate the claimant for his loss not to punish
the defendant.
Damages are compensatory – not restitutionary.
The most usual basis of compensatory damages is to put the innocent party into
the same financial position he would have been in had the contract been properly
performed. This is sometimes called the ‘expectation loss’ basis. In Victoria Laundry v
Newman Industries, for example, Victoria Laundry were claiming for the profits they
would have made had the boiler been installed on the contractually agreed date.
Sometimes a claimant may prefer to frame his claim in the alternative on the
‘reliance loss’ basis and thereby recover expenses incurred in anticipation of
performance and wasted as a result of the breach – Anglia Television v Reed. In a
contract for the sale of goods, the statutory (Sale of Goods Act 1979) measure of
damages is the difference between the market price at the date of the breach and the
contract price, so that only nominal damages will be awarded to a claimant buyer or
claimant seller if the price at the date of breach was respectively less or more than the
contract price. In fixing the amount of damages, the courts will usually deduct the tax (if
any) which would have been payable by the claimant if the contract had not been broken.
Thus if damages are awarded for loss of earnings, they will normally be by reference to
net, not gross, pay. Difficulty in assessing the amount of damages does not prevent the
injured party from receiving them: Chaplin v Hicks. In general, damages are not awarded
for non-pecuniary loss such as mental distress and loss of enjoyment. Exceptionally,
however, damages are awarded for such losses where the contract’s purpose is to
promote happiness or enjoyment, as is the situation with contracts for holidays – Jarvis v
Swan Tours. The innocent party must take reasonable steps to mitigate (minimise) his
loss, for example, by trying to find an alternative method of performance of the contract:
Brace v Calder.

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iv. .Liquidated damages clauses and penalty clauses

If a contract includes a provision that, on a breach of contract, damages of a
certain amount or calculable at a certain rate will be payable, the courts will normally
accept the relevant figure as a measure of damages. Such clauses are called liquidated
damages clauses.
The courts will uphold a liquidated damages clause even if that means that the
injured party receives less (or more as the case may be) than his actual loss arising on
the breach. This is because the clause setting out the damages constitutes one of the
agreed contractual terms – Cellulose Acetate Silk Co Ltd v Widnes Foundry Ltd.
However, a court will ignore a figure for damages put in a contract if it is classed
as a penalty clause – that is, a sum which is not a genuine pre-estimate of the expected
loss on breach.

This could be the case where:

1. The prescribed sum is extravagant in comparison with the maximum loss that could
follow from a breach.
2. The contract provides for payment of a certain sum but a larger sum is stipulated to be
payable on a breach.
3.The same sum is fixed as being payable for several breaches, which would be likely to
cause varying amounts of damage. All of the above cases would be regarded as
penalties, even though the clause might be described in the contract as a liquidated
damages clause. The court will not enforce payment of a penalty, and if the contract is
broken only the actual loss suffered may be recovered (Ford Motor Co (England) Ltd v
Armstrong).
_____________________________________________________________________

4) b) What is the difference between anticipatory and actual breach?

Ans:

Anticipatory Breach:
A seller and a buyer have entered into a contract. Prior to the start of the contract,
the buyer informs the seller that he no longer requires his goods. The seller writes back
stating his intention to store the goods until the contract expires and then sue for a
breach of contract. The buyer replies with an angry letter stating that he could just sell
the goods to someone else. Advise all parties.

Actual breach:
A breach of contract occurs where a party to a contract fails to perform, precisely
and exactly, his obligations under the contract. This can take various forms for example,
the failure to supply goods or perform a service as agreed. Breach of contract may be
either actual or anticipatory.
Actual breach occurs where one party refuses to form his side of the bargain on
the due date or performs incompletely. For example: Poussard v Spiers and Bettini v
Gye.
_____________________________________________________________________

5) a) Explain the term Privity of contract.

Ans:

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Privity of contract:
The doctrine of privity in contract law provides that a contract cannot confer rights
or impose obligations arising under it on any person or agent except the parties to it.
The premise is that only parties to contracts should be able to sue to enforce their rights
or claim damages as such. However, the doctrine has proven problematic due to its
implications upon contracts made for the benefit of third parties who are unable to
enforce the obligations of the contracting parties.

Third-party rights:
Privity of contract occurs only between the parties to the contract, most commonly
contract of sale of goods or services. Horizontal privity arises when the benefits from a
contract are to be given to a third party. Vertical privity involves a contract between two
parties, with an independent contract between one of the parties and another individual
or company.
If a third party gets a benefit under a contract, it does not have the right to go
against the parties to the contract beyond its entitlement to a benefit. An example of this
occurs when a manufacturer sells a product to a distributor and the distributor sells the
product to a retailer. The retailer then sells the product to a consumer. There is no privity
of contract between the manufacturer and the consumer.
This, however, does not mean that the parties do not have another form of action
e.g. Donoghue v. Stevenson – here a friend of Ms. Donoghue bought her a bottle of
ginger beer, which was defective. Specifically, the ginger beer contained the partially
decomposed remains of a snail. Since the contract was between her friend and the shop
owner, Mrs. Donoghue could not sue under the contract, but it was established that the
manufacturer has a duty of care owed to their consumers and she was awarded
damages in tort.

Privity is the legal term for a close, mutual, or successive relationship to the same
right of property or the power to enforce a promise or warranty.
______________________________________________________________________________

5) b) Define a company? What are the features of Joint Stock Company?

Ans:

Company:
The term ‘company’ implies an association of a number of persons for some
common objective e.g. to carry on a business concern, to promote art, science or culture
in the society, to run a sport club etc. Every association, however, may not be a company
in the eyes of law as the legal import of the word ‘company’ is different from its common
parlance meaning. In legal terminology its use is restricted to imply an association of
persons,’ registered as a company' under the law of the land. The following are some of
the definitions of the company given by legal luminaries and scholars of law.

“Company means a company formed and registered under this Act or an existing
company. Existing company means a company formed and registered under the
previous company laws.” Companies Act, 1956 Sec. 3(i & ii)

A joint stock company is an artificial person invisible, intangible and existing only
in the eyes of law. Being a mere creature of law, it possesses only those properties
which the charter of its creation confers upon it, either expressly or as incidental to its
very existence.” – Justice Marshall

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“A company is an association of many persons who contribute money or money’s

worth to a common stock and employ it in some common trade or business and who
share the profit or loss arising there from. The common stock so contributed is denoted in
terms of money and is the capital of the company. The persons who contribute it or to
whom it belongs are members. The proportion of capital to which each member is
entitled is his share. Shares are always transferable although the right to transfer them is
often more or less restricted." - Lord Lindley

From the above definitions it is clear that a company has a corporate and legal
personality. It is an artificial person and exists only in the eyes of law. It has an
independent legal entity, a common seal and perpetual succession.
Sometimes, the term ‘corporation’ (a word derived from the Latin word ‘corpus’
which means body) is also used for a company.
At present the companies in India are incorporated under the Companies Act,
1956.

Characteristics of Joint Stock Company:

The various definitions reveal the following essential characteristics of a company

1. Artificial Person: A company is an association of persons who have agreed to form

the company and become its members or shareholders with the object of carrying on a
lawful business for profit. It comes into existence when it is registered under the
Companies Act. The law treats it as a legal person as it can conduct lawful business and
enter into contracts with other persons in its own name. It can sell or purchase property.
It can sue and be sued in its name. It cannot be regarded as an imaginary person
because it has a legal existence. Thus company is an artificial person created by law.

2. Independent corporate existence: A company has a separate independent

corporate existence. It is in law a person. Its entity is always separate from its members.
The property of the company belongs to it and not to the shareholders. The company
cannot be held liable for the acts of the members and the members can not be held liable
for the acts or wrongs or misdeeds of the company. Once a company is incorporated, it
must be treated like any other independent person. As a consequence of separate legal
entity, the company may enter into contracts with its members and vice-versa.

3. Perpetual existence: The attribute of separate entity also provides a company a

perpetual existence, until dissolved by law. Its life remains unaffected by the lunacy,
insolvency or death of its members. The members may come and go but the company
can go on forever. Law creates it and the law alone can dissolve it.

4. Separate property: A company, being a legal entity, can buy and own property in its
own name. And, being a separate entity, such property belongs to it alone. Its members
are not the joint owners of the property even though it is purchased out of funds
contributed by them. Consequently, they do not have even insurable interest in the
property of the company. The property of the company is not the property of the
shareholders; it is the property of the company.

5. Limited liability: In the case of companies limited by shares the liability of every
member of the company is limited to the amount of shares subscribed by him. If the
member has paid full amount of the face value of the shares subscribed by him, his
liability shall be nil and he cannot be asked to contribute anything more. Similarly, in the
case of a company limited by guarantee, the liability of the members is limited up to the

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amount guaranteed by a member. The Companies Act, however, permits the formation
of companies with unlimited liability. But such companies are very rare.

6. Common seal: As a company is devoid of physique, it can’t act in person like a

human being. Hence it cannot sign any documents personally. It has to act through a
human agency known as Directors. Therefore, every company must have a seal with its
name engraved on it. The seal of the company is affixed on the documents, which
require the approval of the company. Two Directors and the Secretary or such other
person as the Board may authorize for this purpose, witness the affixation of the seal.
Thus, the common seal is the official signature of the company.

7. Transferability of shares: The shares of a company are freely transferable and can
be sold or purchased through the Stock Exchange. A shareholder can transfer his shares
to any person without the consent of other members. Under the articles of association,
even a public limited company can put certain restrictions on the transfer of shares but it
cannot altogether stop it. A shareholder of a public limited company possessing fully paid
up shares is at liberty to transfer his shares to anyone he likes in accordance with the
manner provided for in the articles of association of the company. However, private
limited company is required to put certain restrictions on transferability of its shares. But
any absolute restriction on the right of transfer of shares is void

8. Capacity to sue and be sued: A company, being a body corporate, can sue and be
sued in its own name.
______________________________________________________________________________

6) Om is enrolled in a managerial course. He has to write an assignment on

company management and various types of meetings that a company holds. You
are asked to help him in preparing the assignment.
Ans:
There are many types of businesses, and because of this, businesses are
classified in many ways. One of the most common focuses on the primary profit-
generating activities of a business:
• Agriculture and mining businesses are concerned with the production of raw
material, such as plants or minerals.
• Financial businesses include banks and other companies that generate profit
through investment and management of capital.
• Information businesses generate profits primarily from the resale of intellectual
property and include movie studios, publishers and packaged software
companies.
• Manufacturers produce products, from raw materials or component parts, which
they then sell at a profit. Companies that make physical goods, such as cars or
pipes, are considered manufacturers.
• Real estate businesses generate profit from the selling, renting, and development
of properties, homes, and buildings.
• Retailers and Distributors act as middle-men in getting goods produced by
manufacturers to the intended consumer, generating a profit as a result of
providing sales or distribution services. Most consumer-oriented stores and
catalogue companies are distributors or retailers. See also: Franchising
• Service businesses offer intangible goods or services and typically generate a
profit by charging for labor or other services provided to government, other
businesses, or consumers. Organizations ranging from house decorators to
consulting firms, restaurants, and even entertainers are types of service
businesses.

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• Transportation businesses deliver goods and individuals from location to location,

generating a profit on the transportation costs
• Utilities produce public services, such as heat, electricity, or sewage treatment,
and are usually government chartered.
There are many other divisions and subdivisions of businesses. The authoritative list of
business types for North America is generally considered to be the North American
Industry Classification System, or NAICS. The equivalent European Union list is the
Statistical Classification of Economic Activities in the European Community (NACE).

Management
The efficient and effective operation of a business, and study of this subject, is
called management. The main branches of management are financial management,
marketing management, human resource management, strategic management,
production management, operation management, service management and information
technology management.

Reforming State Enterprises

In recent decades, assets and enterprises that were run by various states have
been modeled after business enterprises. In 2003, the People's Republic of China
reformed 80% of its state-owned enterprises and modeled them on a company-type
management system.[r2] Many state institutions and enterprises in China and Russia have
been transformed into joint-stock companies, with part of their shares being listed on
public stock markets.

Organization and government regulation

Most legal jurisdictions specify the forms of ownership that a business can take,
creating a body of commercial law for each type.
The major factors affecting how a business is organized are usually:
The Bank of England in Threadneedle Street, London, England.
• The size, scope of the business firm and its structure, management, and
ownership, broadly analyzed in the theory of the firm. Generally a smaller
business is more flexible, while larger businesses, or those with wider ownership
or more formal structures, will usually tend to be organized as partnerships or
(more commonly) corporations. In addition a business that wishes to raise money
on a stock market or to be owned by a wide range of people will often be required
to adopt a specific legal form to do so.
• The sector and country. Private profit making businesses are different from
government owned bodies. In some countries, certain businesses are legally
obliged to be organized in certain ways.
• Limited liability. Corporations, limited liability partnerships, and other specific
types of business organizations protect their owners or shareholders from
business failure by doing business under a separate legal entity with certain legal
protections. In contrast, unincorporated businesses or persons working on their
own are usually not so protected.
• Tax advantages. Different structures are treated differently in tax law, and may
have advantages for this reason.
• Disclosure and compliance requirements. Different business structures may be
required to make more or less information public (or reported to relevant
authorities), and may be bound to comply with different rules and regulations.

Many businesses are operated through a separate entity such as a corporation or

a partnership (either formed with or without limited liability). Most legal jurisdictions allow
people to organize such an entity by filing certain charter documents with the relevant

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Secretary of State or equivalent and complying with certain other ongoing obligations.
The relationships and legal rights of shareholders, limited partners, or members are
governed partly by the charter documents and partly by the law of the jurisdiction where
the entity is organized. Generally speaking, shareholders in a corporation, limited
partners in a limited partnership, and members in a limited liability company are shielded
from personal liability for the debts and obligations of the entity, which is legally treated
as a separate "person." This means that unless there is misconduct, the owner's own
possessions are strongly protected in law, if the business does not succeed.

Where two or more individuals own a business together but have failed to
organize a more specialized form of vehicle, they will be treated as a general partnership.
The terms of a partnership are partly governed by a partnership agreement if one is
created, and partly by the law of the jurisdiction where the partnership is located. No
paperwork or filing is necessary to create a partnership, and without an agreement, the
relationships and legal rights of the partners will be entirely governed by the law of the
jurisdiction where the partnership is located.

A single person who owns and runs a business is commonly known as a sole
proprietor, whether he or she owns it directly or through a formally organized entity.
A few relevant factors to consider in deciding how to operate a business include:
1. General partners in a partnership (other than a limited liability partnership), plus
anyone who personally owns and operates a business without creating a separate
legal entity, are personally liable for the debts and obligations of the business.
2. Generally, corporations are required to pay tax just like "real" people. In some tax
systems, this can give rise to so-called double taxation, because first the
corporation pays tax on the profit, and then when the corporation distributes its
profits to its owners, individuals have to include dividends in their income when
they complete their personal tax returns, at which point a second layer of income
tax is imposed.
3. In most countries, there are laws which treat small corporations differently than
large ones. They may be exempt from certain legal filing requirements or labor
laws, have simplified procedures in specialized areas, and have simplified,
advantageous, or slightly different tax treatment.
4. To "go public" (sometimes called IPO) -- which basically means to allow a part of
the business to be owned by a wider range of investors or the public in general—
you must organize a separate entity, which is usually required to comply with a
tighter set of laws and procedures. Most public entities are corporations that have
sold shares, but increasingly there are also public LLCs that sell units (sometimes
also called shares), and other more exotic entities as well (for example, REITs in
the USA, Unit Trusts in the UK). However, you cannot take a general partnership
"public."

Types of meetings: Common types of meeting include:

1. Status Meetings, generally leader-led, which are about reporting by one-way
communication
2. Work Meeting, which produces a product or intangible result such as a decision
3. Staff meeting, typically a meeting between a manager and those that report to the
manager
4. Team meeting, a meeting among colleagues working on various aspects of a
team project
5. Ad-hoc meeting, a meeting called for a special purpose
6. Management meeting, a meeting among managers
7. Board meeting, a meeting of the Board of directors of an organization

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8. One-on-one meeting, between two individuals

9. Off-site meeting, also called "offsite retreat" and known as an Awayday meeting in
the UK
10. Kickoff meeting, the first meeting with the project team and the client of the project
to discuss the role of each team member
11. Pre-Bid Meeting, a meeting of various competitors and or contractors to visually
inspect a jobsite for a future project. The meeting is normally hosted by the future
customer or engineer who wrote the project specification to ensure all bidders are
aware of the details and services expected of them. Attendance at the Pre-Bid
Meeting may be mandatory. Failure to attend usually results in a rejected bid.
______________________________________________________________________________

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SET – 2, LEGAL ASPECTS OF BUSINESS

1) a) What is an arbitration agreement? Discuss its essentials.

Ans:

Arbitration Agreement:
The foundation of arbitration is the arbitration agreement between the parties to
submit to arbitration all or certain disputes which have arisen or which may arise between
them. Thus, the provision of arbitration can be made at the time of entering the contract
itself, so that if any dispute arises in future, the dispute can be referred to arbitrator as
per the agreement. It is also possible to refer a dispute to arbitration after the dispute has
arisen. Arbitration agreement may be in the form of an arbitration clause in a contract or
in the form of a separate agreement. The agreement must be in writing and must be
signed by both parties. The arbitration agreement can be by exchange of letters,
document, telex, telegram etc
Court must refer the matter to arbitration in some cases: If a party approaches
court despite the arbitration agreement, the other party can raise objection. However,
such objection must be raised before submitting his first statement on the substance of
dispute. The original arbitration agreement or its certified copy must accompany such
objection. On such application the judicial authority shall refer the parties to arbitration.
Since the word used is “shall”, it is mandatory for judicial authority to refer the matter to
arbitration. However, once the opposite party already makes first statement to court, the
matter has to continue in the court. Once other party for referring the matter to arbitration
makes an application, the arbitrator can continue with arbitration and even make an
arbitral award.

i. It must be in writing [Section 7(3)]: Like the old law, the new law also requires the
arbitration agreement to be in writing. It also provides in section 7(4) that an exchange of
letters, telex, telegrams, or other means of telecommunications can also provide a record
of such an agreement. Further, it is also provided that an exchange of claim and defense
in which the existence of an arbitration agreement is alleged by one party and not denied
by the other, will also amount to be an arbitration agreement.
It is not necessary that the parties should sign such written agreement. All that is
necessary is that the parties should accept the terms of an agreement reduced in writing.
The naming of the arbitrator in the arbitration agreement is not necessary. No particular
form or formal document is necessary.

ii. It must have all the essential elements of a valid contract: An agreement stands
on the same footing as any other agreement. Every person capable of entering into a
contract may be a party to an arbitration agreement. The terms of the agreement must be
definite and certain; if the terms are vague it is bad for indefiniteness.

iii. The agreement must be to refer a dispute, present or future, between the parties
to arbitration: If there is no dispute, there can be no right to demand arbitration. A
dispute means an assertion of a right by one party and repudiation thereof by another. A
point as to which there is no dispute cannot be referred to arbitration. The dispute may
relate to an act of commission or omission, for example, with holding a certificate to
which a person is entitled or refusal to register a transfer of shares.
Under the present law, certain disputes such as matrimonial disputes, criminal
prosecution, questions relating to guardianship, questions about validity of a will etc. or
treated as not suitable for arbitration. Section 2(3) of the new Act maintains this position.
Subject to this qualification Section 7(1) of the new Act makes it permissible to enter into

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an arbitration agreement “in respect of a defined legal relationship whether contractual or

not”.

iv. An arbitration agreement may be in the form of an arbitration clause in a

contract or in the form of a separate agreement [Section 7(2)].
Appointment of Arbitrator: The parties can agree on a procedure for appointing the
arbitrator or arbitrators. If they are unable to agree, each party will appoint one arbitrator
and the two appointed arbitrators will appoint the third arbitrator who will act as a
presiding arbitrator [Section 11(3)]. If one of the parties does not appoint an arbitrator
within 30 days, or if two appointed arbitrators do not appoint third arbitrator within 30
days, the party can request Chief Justice to appoint an arbitrator [Section 11(4)]. The
Chief Justice can authorize any person or institution to appoint an arbitrator. [Some High
Courts have authorized District Judge to appoint an arbitrator]. In case of international
commercial dispute, the application for appointment of arbitrator has to be made to Chief
Justice of India. In case of other domestic disputes, application has to be made to Chief
Justice of High Court within whose jurisdiction the parties are situated [Section 11(12)]

Challenge to Appointment of arbitrator: An arbitrator is expected to be independent

and impartial. If there are some circumstances due to which his independence or
impartiality can be challenged, he must disclose the circumstances before his
appointment [Section 12(1)]. Appointment of Arbitrator can be challenged only if :
(a) Circumstances exist that give rise to justifiable doubts as to his independence or
impartiality (b) He does not possess the qualifications agreed to by the parties [Section
12(3)]. Appointment of arbitrator cannot be challenged on any other ground. The
challenge to appointment has to be decided by the arbitrator himself. If he does not
accept the challenge, the proceedings can continue and the arbitrator can make the
arbitral award. However, in such case, application for setting aside arbitral award can be
made to Court. If the court agrees to the challenge, the arbitral award can be set aside
[Section 13(6)]. Thus, even if the arbitrator does not accept the challenge to his
appointment, the other party cannot stall further arbitration proceedings by rushing to
court. The arbitration can continue and challenge can be made in Court only after arbitral
award is made.

Conduct of Arbitral Proceedings: The Arbitral Tribunal should treat the parties equally
and each party should be given full opportunity to present his case [Section 18]. The
Arbitral Tribunal is not bound by Code of Civil Procedure, 1908 or Indian Evidence Act,
1872 [Section 19(1)]. The parties to arbitration are free to agree on the procedure to be
followed by the Arbitral Tribunal. If the parties do not agree to the procedure, the
procedure will be as determined by the arbitral tribunal.

Law of Limitation Applicable: Limitation Act, 1963 is applicable. For this purpose, date
on which the aggrieved party requests other party to refer the matter to arbitration shall
be considered. If on that date, the claim is barred under Limitation Act, the arbitration
cannot continue [Section 43(2)]. If Court sets Arbitration award aside, time spent in
arbitration will be excluded for purpose of Limitation Act. So that case in court or fresh
arbitration can start.

Flexibility in respect of procedure, place and language: Arbitral Tribunal has full
powers to decide the procedure to be followed, unless parties agree on the procedure to
be followed [Section 19(3)]. The Tribunal also has powers to determine the admissibility,
relevance, materiality and weight of any evidence [Section 19(4)]. Place of arbitration will
be decided by mutual agreement. However, if the parties do not agree to the place, the
same will be decided by tribunal [Section 20]. Similarly, language to be used in arbitral

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proceedings can be mutually agreed. Otherwise, Arbitral Tribunal can decide [Section
22].

Submission of statement of claim and defense: The claimant should submit

statement of claims, points of issue and relief or remedy sought. The respondent shall
state his defense in respect of these particulars. All relevant documents must be
submitted. Such claim or defense can be amended or supplemented any time [section
23].
Hearings and Written Proceedings: After submission of documents and defense,
unless the parties agree otherwise, the Arbitral Tribunal can decide whether there will be
oral hearing or proceedings can be conducted on the basis of documents and other
materials. However, if one of the parties requests the hearing shall be oral. Sufficient
advance notice of hearing should be given to both the parties [Section 24]. [Thus, unless
one party requests, oral hearing is not compulsory].

Settlement during Arbitration: It is permissible for parties to arrive at mutual settlement

even when arbitration is proceeding. In fact, even the Tribunal can make efforts to
encourage mutual settlement. If parties settle the dispute by mutual agreement, the
arbitration shall be terminated. However, if both parties and the Arbitral Tribunal agree,
the settlement can be recorded in the form of an arbitral award on agreed terms. Such
Arbitral Award shall have the same force as any other Arbitral Award [Section 30].

Arbitral Award: Decision of Arbitral Tribunal is termed as 'Arbitral Award'. Arbitrator can
decide the dispute ex aqua ET bono (In justice and in good faith) if both the parties
expressly authorize him to do so [Section 28(2)]. The decision of Arbitral Tribunal will be
by majority. The arbitral award shall be in writing and signed by the members of the
tribunal [Section 29]. The award must be in writing and signed by the members of Arbitral
Tribunal [Section 31(1)]. It must state the reasons for the award unless the parties have
agreed that no reason for the award is to be given [Section 31(3)]. The award should be
dated and place where it is made should be mentioned. Copy of award should be given
to each party. Tribunal can make interim award also [Section 31(6)].

Cost of Arbitration- Cost of arbitration means reasonable cost relating to fees and
expenses of arbitrators and witnesses, legal fees and expenses, administration fees of
the institution supervising the arbitration and other expenses in connection with arbitral
proceedings. The tribunal can decide the cost and share of each party [Section 3 1(8)]. If
the parties refuse to pay the costs, the Arbitral Tribunal may refuse to deliver its award.
In such case, any party can approach Court. The Court will ask for deposit from the
parties and on such deposit, the Tribunal will deliver the award. Then Court will decide
the costs of arbitration and shall pay the same to Arbitrators. Balance, if any, will be
refunded to the party [Section 39].

Intervention by Court - One of the major defects of earlier arbitration law was that the
party could access court almost at every stage of arbitration - right from appointment of
arbitrator to implementation of final award. Thus, the defending party could approach
court at various stages and stall the proceedings. Now, approach to court has been
drastically curtailed. In some cases, if the party raises an objection, Arbitral Tribunal itself
can give the decision on that objection. After the decision, the arbitration proceedings are
continued and the aggrieved party can approach Court only after Arbitral Award is made.
Appeal to court is now only on restricted grounds. Of course, Tribunal cannot be given
unlimited and uncontrolled powers and supervision of Courts cannot be totally eliminated.

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Arbitration Act has Over-Riding Effect: Section 5 of Act clarifies that notwithstanding
anything contained in any other law for the time being in force, in matters governed by
the Act, the judicial authority can intervene only as provided in this Act and not under any
other Act.

Modes of Arbitration
(a) Arbitration without the intervention of the court. [Sec.3 to 19]
(b) Arbitration with the intervention of the court when there is no suit pending [Sec.20]
(c) Arbitration with the intervention of the court where a suit is pending. [Sec.21 to 25]
______________________________________________________________________________

1) b) What do you mean by mediation?

Ans:

Meditation is a holistic discipline during which time the practitioner trains his or her mind
in order to realize some benefit.

Meditation is generally an internal, personal practice and most often done without
any external involvement, except perhaps prayer beads to count prayers. Meditation
often involves invoking or cultivating a feeling or internal state, such as compassion, or
attending to a specific focal point. The term can refer to the state itself, as well as to
practices or techniques employed to cultivate the state.

There are hundreds of specific types of meditation. The word, 'meditation,' means
many things dependent upon the context of its use. People practice meditation for many
reasons, within the context of their social environment. Meditation is a component of
many religions, and has been practiced since antiquity, particularly by monastics. A 2007
study by the U.S. government found that nearly 9.4% of U.S. adults (over 20 million)
have used meditation within the past 12 months, up from 7.6% (more than 15 million
people) in 2002.

To date, the exact mechanism at work in meditation remains unclear, while

scientific research continues.
______________________________________________________________________________

2) a) What kinds of rights are considerable under consumer rights?

Ans:
Consumer right is defined as 'the right to be informed about the quality, quantity,
potency, purity, standard and price of goods or services, as the case may be, so as to
protect the consumer against unfair trade practices'

Even though strong and clear laws exist in India to protect consumer rights, the
actual plight of Indian consumers could be declared as completely dismal. Very few
consumers are aware of their rights or understand their basic consumer rights. Of the
several laws that have been enacted to protect the rights of consumers in India, the most
significant is the Consumer Protection Act, 1986. Under this law, everyone, including
individuals, a Hindu undivided family, a firm, and a company, can exercise their
consumer rights for the goods and services purchased by them. It is important that, as
consumers, we know at least our basic rights and about the courts and procedures that
deal with the infringement of our rights.

In general, the rights of consumers in India can be listed as under:

* The right to be protected from all types of hazardous goods and services

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* The right to be fully informed about the performance and quality of all goods and
services
* The right to free choice of goods and services
* The right to be heard in all decision-making processes related to consumer interests
* The right to seek redressal, whenever consumer rights have been infringed
* The right to complete consumer education

The Consumer Protection Act, 1986 and various other laws like the Standards,
Weights & Measures Act have been formulated to ensure fair competition in the market
place and free flow of true information from the providers of goods and services to those
who consume them. However, the success of these laws would depend upon the
vigilance of consumers about their rights, as well as their responsibilities. In fact, the level
of consumer protection in a country is considered as the correct indicator of the extent of
progress of the nation.

The production and distribution systems have become larger and more
complicated today. The high level of sophistication achieved by the providers of goods
and services in their selling and marketing practices and various types of promotional
activities like advertising resulted in an increased need for higher consumer awareness
and protection. In India, the government has realized the plight of Indian consumers and
the Ministry of Consumer Affairs, Food and Public Distribution has established the
Department of Consumer Affairs as the nodal organization for the protection of consumer
rights, redressal of all consumer grievances and promotion of standards governing goods
and services offered in India.

A complaint for infringement of consumer rights could be made under the following
circumstances in the nearest designated consumer court:

* The goods or services bought by a person or agreed to be bought by a person suffer

from one or more deficiencies or defects in any respect
* A trader or a service provider resorting to restrictive or unfair trade practices
* A trader or a service provider charging a price in excess of the price displayed on the
goods or the price that had been agreed upon between the parties or the price that had
been stipulated under any law in force
* Goods or services that pose a hazard to the safety and life of a person offered for sale,
knowingly or unknowingly, causing injury to health, safety or life.

Consumerdaddy.com is India's only online consumer protection site offering

consumer report, consumer review and different opinions on different products and
companies.
______________________________________________________________________________

2) b) Distinguish between Memorandum of Association and Articles of

Association.
Ans:

Memorandum of Association:
The memorandum of association of a company, often simply called the
memorandum (and then often capitalised as an abbreviation for the official name, which
is a proper noun and usually includes other words), is the document that governs the
relationship between the company and the outside. It is one of the documents required to
incorporate a company in the United Kingdom, Ireland and India, and is also used in
many of the common law jurisdictions of the Commonwealth.

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Requirements
While it is still necessary to file a memorandum of association to incorporate a
new company, it no longer forms part of the company’s constitution and it contains
limited information compared to the memorandum that was required prior to 1 October
2009.
It is basically a statement that the subscribers wish to form a company under the
2006 Act, have agreed to become members and, in the case of a company that is to
have a share capital, to take at least one share each. It is no longer required to state the
name of the company, the type of company (such as public limited company or private
company limited by shares), the location of its registered office, the objects of the
company, and its authorised share capital.[1]
Companies incorporated prior to 1 October 2009 are not required to amend their
memorandum. Those details which are now required to appear in the Articles, such as
the objects clause and details of the share capital, are deemed to form part of the
Articles.

Capacities
The memorandum no longer restricts what a company is permitted to do. Since 1
October 2009, if a company's constitution contains any restrictions on the objects at all,
those restrictions will form part of the articles of association.
Historically, a company's memorandum of association contained an objects
clause, which limited its capacity to act. When the first limited companies were
incorporated, the objects clause had to be widely drafted so as not to restrict the board of
directors in their day to day trading. In the Companies Act 1989 the term "General
Commercial Company" was introduced which meant that companies could undertake
"any lawful or legal trade or business."
The Companies Act 2006 relaxed the rules even further, removing the need for an
objects clause at all. Companies incorporated on and after 1 October 2009 without an
objects clause are deemed to have unrestricted objects. Existing companies may take
advantage of this change by passing a special resolution to remove their objects clause.
If the company is to be a non-profit making company, the articles will contain a statement
saying that the profits shall not be distributed to the members.

Articles of association:
The term articles of association of a company, or articles of incorporation, of
an American or Canadian Company, are often simply referred to as articles (and are
often capitalized as an abbreviation for the full term). The Articles are a requirement for
the establishment of a company under the law of India, the United Kingdom and many
other countries. Together with the memorandum of association, they constitute the
constitution of a company. The equivalent term for LLC is Articles of Organization.
Roughly equivalent terms operate in other countries, such as Gesellschaftsvertrag in
Germany, statuts in France, statut in Poland.[1]
The following is largely based on British Company Law, references which are
made at the end of this Article.
The Articles can cover a medley of topics, not all of which is required in a
country's law. Although all terms are not discussed, they may cover:
• the issuing of shares (also called stock), different voting rights attached to different
classes of shares
• valuation of intellectual rights, say,the valuations of the IPR of one partner and,for
example,the real estate of the other
• the appointments of directors - which shows whether a shareholder dominates or
shares equality with all contributors
• directors meetings - the quorum and percentage of vote

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• management decisions - whether the board manages or a founder

• transferability of shares - assignment rights of the founders or other members of
the company do
• special voting rights of a Chairman, and his/her mode of election
• the dividend policy - a percentage of profits to be declared when there is profit or
otherwise
• winding up - the conditions, notice to members
• confidentiality of know-how and the founders' agreement and penalties for
disclosure
• first right of refusal - purchase rights and counter-bid by a founder.

A Company is essentially run by the shareholders, but for convenience, and day-
to-day working, by the elected Directors. Usually, the shareholders elect a Board of
Directors (BOD) at the Annual General Meeting (AGM), which may be statutory (e.g.
India).
The number of Directors depends on the size of the Company and statutory
requirements. The Chairperson is generally a well-known outsider but he /she may be a
working Executive of the company, typically of an American Company. The Directors
may, or may not, be employees of the Company.
______________________________________________________________________________

3) a) Identify the types of evidence which are relied upon by complainants to

establish defect in product.
Ans:
Following types of evidence is generally relied upon by complainants to establish
defect in product:
(a) Expert opinion
(b) manufacturer’s record
(c) Government and Industry Standards
(d) Post accident changes
(e) Report of Governmental and other agencies
(f) Past record

(a) Expert Opinion: Complainant hires a technical expert to testify about the defective
characteristics of a product. A manufacturer has to retain highly qualified experts to rebut
the findings of complainant’s expert and also educate defence lawyer so well that he can
the bluff of complainants expert.

(b) Manufacturer’s records: If manufacturer’s own employees expressed concern about

product safety it can be extremely persuasive that product defect existed.

(c) Government and Industry Standard: Evidence that manufacturer has failed to meet
government or industry standards can be compelling proof of existence of defect and
when such standards are mandatory it also amounts to automatic findings of negligence.

(d) Post accident changes: Post accident changes may be considered as evidence that
original designs were deficient. Though this is a contentious factor as to whether such an
evidence is admissible a jury may be influenced by the same.

(e) Report of Government and the other agencies: Generally factual findings of an
official investigation forms admissible evidence.

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(f) Past record: Complainant may show that past record of the product proves his claim.
Manufacturer has the obligation of proving that other accidents were not similar.
______________________________________________________________________________

3) b) Write a short note on Unfair trade practices and Restrictive trade practice.
Ans:

Unfair trade practices:

The law of unfair competition serves five purposes. First, the law seeks to protect
the economic, intellectual, and creative investments made by businesses in
distinguishing themselves and their products. Second, the law seeks to preserve the
good will that businesses have established with consumers. Third, the law seeks to deter
businesses from appropriating the good will of their competitors. Fourth, the law seeks to
promote clarity and stability by encouraging consumers to rely on a merchant's good will
and reputation when evaluating the quality of rival products. Fifth, the law seeks to
increase competition by providing businesses with incentives to offer better goods and
services than others in the same field.
Although the law of unfair competition helps protect consumers from injuries
caused by deceptive trade practices, the remedies provided to redress such injuries are
available only to business entities and proprietors. Consumers who are injured by
deceptive trade practices must avail themselves of the remedies provided by state and
federal Consumer Protection laws. In general, businesses and proprietors injured by
unfair competition have two remedies: injunctive relief (a court order restraining a
competitor from engaging in a particular fraudulent or deceptive practice) and money
damages (compensation for any losses suffered by an injured business).

General Principles
The freedom to pursue a livelihood, operate a business, and otherwise compete in
the marketplace is essential to any free enterprise system. Competition creates
incentives for businesses to earn customer loyalty by offering quality goods at
reasonable prices. At the same time, competition can also inflict harm. The freedom to
compete gives businesses the right to lure customers away from each other. When one
business entices enough customers away from competitors, those rival businesses may
be forced to shut down or move.
The law of unfair competition will not penalize a business merely for being
successful in the marketplace. Nor will the law impose liability simply because a business
is aggressively marketing its product. The law assumes, however, that for every dollar
earned by one business, a competitor will lose a dollar. Accordingly, the law prohibits a
business from unfairly profiting at a competitor's expense. What constitutes unfair
competition varies according to the Cause of Action asserted in each case. These
include actions for the infringement of Patents, Trademarks, and copyrights; actions for
the wrongful appropriation of Trade Dress, trade names, trade secrets, and service
marks; and actions for the publication of defamatory, false, and misleading
representations.

Restrictive trade practice:

The restrictive trade practices, or antitrust, provisions in the Trade Practices Act
are aimed at deterring practices by firms which are anti-competitive in that they restrict
free competition. This part of the act is enforced by the Australian Competition and
Consumer Commission (ACCC). The ACCC can litigate in the Federal Court of Australia,
and seek pecuniary penalties of up to $10 million from corporations and $500,000 from
individuals. Private actions for compensation may also be available.

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These provisions prohibit:

• Most Price Agreements (see Cartel and Price-Fixing)
• Primary boycotts (an agreement between parties to exclude another)
• Secondary boycotts whose purpose is to cause substantial lessen competition
(Actions between two persons engaging in conduct hindering 3rd person from
supplying or acquiring goods or services from 4th)
• Misuse of market power – taking advantage of substantial market power in a
particular market, for one or more proscribed purposes; namely, to eliminate or
damage an actual or potential competitor, to prevent a person from entering a
market, or to deter or prevent a person from engaging in competitive conduct.
• Exclusive dealing – an attempt to interfere with freedom of buyers to buy from
other suppliers, such as agreeing to supply a product only if a retailer does not
stock a competitor’s product. Most forms of exclusive dealing are only prohibited if
they have the purpose or likely effect of substantially lessening competition in a
market.
• Third-line forcing: A type of exclusive dealing, third-line forcing involves the supply
of goods or services on the condition that the acquirer also acquires goods or
services from a third party. Third-line forcing is prohibited per se.
• Resale price maintenance – fixing a price below which resellers cannot sell or
advertise
• Mergers and acquisitions that would result in a substantial lessening of
competition

A priority of ACCC enforcement action in recent years has been cartels. The
ACCC has in place an immunity policy, which grants immunity from prosecution to the
first party in a cartel to provide information to the ACCC allowing it to prosecute. This
policy recognizes the difficulty in gaining information/evidence about price-fixing
behaviors.
______________________________________________________________________________

4) Present a detail note on Shops and Establishment Act.

Ans:

Shops and Establishment Act:

Objectives
- To provide statutory obligation and rights to employees and employers in the
unorganized sector of employment, i.e., shops and establishments.

Scope And Coverage

- A state legislation; each state has framed its own rules for the Act.
- Applicable to all persons employed in an establishments with or without wages, except
the members of the employer's family.
- State government can exempt, either permanently or for a specified period, any
establishments from all or any provisions of this Act.

Main Provisions
- Compulsory registration of shop/establishment within thirty days of commencement of
work.
- Communications of closure of the establishment within 15 days from the closing of the
establishment.
- Lays down the hours of work per day and week.
- Lays down guidelines for spread-over, rest interval, opening and closing hours, closed
days, national and religious holidays, overtime work.

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- Rules for employment of children, young persons and women

- Rules for annual leave, maternity leave, sickness and casual leave, etc.
- Rules for employment and termination of service.
- Maintenance of registers and records and display of notices.
- Obligations of employers.
- Obligations of employees.

About What:
1. To regulate conditions of work and employment in shops, commercial
establishments, residential hotels, restaurants, eating houses, theatres, other
places of public entertainment and other establishments.
2. Provisions include Regulation of Establishments, Employment of Children, Young
Persons and Women, Leave and Payment of Wages, Health and Safety etc.

Applicability & Coverage:

1. It applies to all local areas specified in Schedule-I
2. Establishment means any establishment to which the Act applies and any other
such establishment to which the State Government may extend the provisions of
the Act by notification
3. Employee means a person wholly or principally employed whether directly or
through any agency, whether for wages or other considerations in connection with
any establishment
4. Member of the family of an employer means, the husband, wife, son, daughter,
father, mother, brother or sister and is dependent on such employer

Returns:
1. Form-A or Form-B (as the case may be) {Section 7(2)(a), Rule 5}
Before 15th December of the calendar year, i.e. 15 days before the expiry date

The employer has to submit these forms to the authority notified along with the old
certificate of registration and the renewal fees for minimum one year’s renewal
and maximum of three year’s renewal
2. Form-E (Notice of Change) {Rule 8}
Within 15 days after the expiry of the quarter to which the changes relate in
respect of total number of employees qualifying for higher fees as prescribed in
Schedule-II and in respect of other changes in the original statement furnished
within 30 days after the change has taken place. (Quarter means quarter ending
on 31st March, 30th June, 30th September and 31st December)

Registers:
1. Form-A {Rule 5}
Register showing dates of Lime Washing etc
2. Form-H, Form-J {Rule 20(1)} (if opening & closing hours are ordinarily uniform)
Register of Employment in a Shop or Commercial Establishment
3. Form-I {Rule 20(3)}, Form-K (if opening & closing hours are ordinarily uniform)
Register of Employment in a Residential Hotel, Restaurant, Eating-House,
Theatre, or other places of public amusement or entertainment
4. Form-M {Rule 20(4)}
Register of Leave – This and all the above Registers have to be maintained by the
Employer
5. Visit Book
This shall be a bound book of size 7” x 6” containing at least 100 pages with every

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second page consecutively numbered, to be produced to the visiting Inspector on

demand. The columns shall be:
i. Name of the establishment or Employer
ii. Locality
iii. Registration Number
iv. Date and
v. Time
______________________________________________________________________________

5) a) What is a cyber crime? What are the categories of cyber crime?

Ans:

Cyber crime
It refers to all the activities done with criminal intent in cyberspace or using the
medium of Internet. These could be either the criminal activities in the conventional
sense or activities, newly evolved with the growth of the new medium. Any activity, which
basically offends human sensibilities, can be included in the ambit of Cyber crimes.

Because of the anonymous nature of Internet, it is possible to engage in a variety

of criminal activities with impunity, and people with intelligence, have been grossly
misusing this aspect of the Internet to commit criminal activities in cyberspace. The field
of cyber crime is just emerging and new forms of criminal activities in cyberspace are
coming to the forefront each day. For example, child pornography on Internet constitutes
one serious cyber crime. Similarly, online pedophiles, using Internet to induce minor
children into sex, are as much cyber crimes as any others.

Categories of cyber crimes:

Cyber crimes can be basically divided in to three major categories:
1. Cyber crimes against persons;
2. Cyber crimes against property; and
3. Cyber crimes against government.

1. Cyber crimes against persons: Cyber crimes committed against persons include
various crimes like transmission of child-pornography, harassment of any one with the
use of a computer and cyber stalking. The trafficking, distribution, posting, and
dissemination of obscene material including pornography, indecent exposure, and child
pornography constitute the most important cyber crimes known today. These threaten to
undermine the growth of the younger generation and also leave irreparable scars on the
minds of the younger generation, if not controlled.
Similarly, cyber harassment is a distinct cyber crime. Various kinds of
harassments can and do occur in cyberspace, or through the use of cyberspace.
Harassment can be sexual, racial, religious, or of any other nature. Cyber harassment as
a crime also brings us to another related area of violation of privacy of citizens. Violation
of privacy of online citizens is a cyber crime of a grave nature.

Cyber stalking: The Internet is a wonderful place to work, play and study. The net
is merely a mirror of the real world, and that means it also contains electronic versions of
real life problems. Stalking and harassment are problems that many persons especially
women, are familiar within real life. These problems also occur on the Internet, in the
form of “cyber stalking” or “online harassment”.

2. Cyber crimes against property: The second category of Cyber crimes is Cyber
crimes against all forms of property. These crimes include unauthorized computer

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trespassing through cyberspace, computer vandalism, and transmission of harmful

programs and unauthorized possession of computerized information.

3. Cyber crimes against Government: The third category of Cyber crimes is Cyber
crimes against Government. Cyber Terrorism is one distinct kind of crime in this
category. The growth of Internet has shown that individuals and groups to threaten
international governments as also to terrorize the citizens of a country are using the
medium of cyberspace. This crime manifests itself into Cyber Terrorism when an
individual “cracks” into a government or military maintained website, for the purpose of
perpetuating terror.
Since Cyber crime is a newly emerging field, a great deal of development has to
take place in terms of putting into place the relevant legal mechanism for controlling and
preventing cyber crime. The courts in United States of America have already begun
taking cognizance of various kinds of fraud and cyber crimes being perpetrated in
cyberspace. However, much work has to be done in this field. Just as the human mind is
ingenious enough to devise new ways for perpetrating crime, similarly, human ingenuity
needs to be canalized into developing effective legal and regulatory mechanisms to
control and prevent cyber crimes. A criminal mind can assume very powerful
manifestations if it is used on a network, given the reachability and size of the network.
Legal recognition granted to Electronic Records and Digital Signatures would
certainly boost E – Commerce in the country. It will help in conclusion of contracts and
creation of rights and obligations through electronic medium. In order to guard against
the misuse and fraudulent activities over the electronic medium, punitive measures are
provided in the Act. The Act has recognized certain offences, which are punishable. They
are: -

Tampering with computer source documents (Sec 65)

Any person, who knowingly or intentionally conceals, destroys or alters or
intentionally or knowingly causes another person to conceal, destroy or alter any -
i. Computer source code when the computer source code is required to be
kept by law for the time being in force,
ii. Computer programme,
iii. Computer system and
iv. Computer network.
- Is punishable with imprisonment up to three years, or with fine, which may extend up to
two lakh rupees, or with both.

Hacking with computer system (Sec 66):

Hacking with computer system is a punishable offence under the Act. It means
any person intentionally or knowingly causes wrongful loss or damage to the public or
destroys or deletes or alters any information residing in the computer resources or
diminishes its value or utility or affects it injuriously by any means, commits hacking.
Such offenses will be punished with three years imprisonment or with fine of two
lakh rupees or with both.

Publishing of information which is obscene in electronic form (Sec 67): Whoever

publishes or transmits or causes to be published in the electronic form, any material
which is lascivious or appeals to prurient interest or if its effect is such as to tend to
deprave and corrupt persons who are likely, having regard to all relevant circumstances,
to read, see or hear the matter contained or embodied in it shall be punished on first
conviction with imprisonment for a term extending up to 5 years and with fine which may
extend to one lakh rupees. In case of second and subsequent conviction imprisonment
may extend to ten years and also with fine which may extend up to two lakh rupees.

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Failure to comply with orders of the controller by a Certifying Authority or any

employee of such authority (Sec 68):
Failure to comply with orders of the Controller by any Certifying Authority or by
any employees of Certifying Authority is a punishable offence. Such persons are liable to
imprisonment for a term not exceeding three years or to a fine not exceeding two lakh
rupees or to both.

Fails to assist any agency of the Government to decrypt the information (Sec 69):
If any subscriber or any person-in-charge of the computer fails to assist or to
extend any facilities and technical assistance to any Government agency to decrypt the
information on the orders of the Controller in the interest of the sovereignty and integrity
of India etc. is a punishable offence under the Act. Such persons are liable for
imprisonment for a term, which may extend to seven years.

Unauthorized access to a protected system (Sec 70):

Any person who secures access or attempts to secure access to a protected
system in contravention of the provisions is punishable with imprisonment for a term
which may extend to ten years and also liable to fine.

Misrepresentation before authorities (Sec 71):

Any person who obtains Digital Signature Certificate by misrepresentation or
suppressing any material fact from the Controller or Certifying Authority as the case may
be punished with imprisonment for a term which may extend two years or with fine up to
one lakh rupees or with both.

Breach of confidentiality and privacy (Sec 72):

Any person in pursuant of the powers conferred under the act, unauthorized
secures access, to any electronic record, books, register, correspondence, information,
document or other material without the consent of the person concerned discloses such
materials to any other person shall be punished with imprisonment for a term which may
extend to two years, or with fine up to one lakh rupees or with both.

Publishing false particulars in Digital Signature Certificate (Sec 73):

No person can publish a Digital Signature Certificate or otherwise make it
available to any other person with the knowledge that: -
a. The Certifying Authority listed in the certificate has not issued it; or
b. The subscriber listed in the certificate has not accepted it; or
c. The certificate has been revoked or suspended
Unless such publication is for the purpose of verifying a digital signature created
prior to such suspension or revocation. Any person who contravenes the provisions shall
be punishable with imprisonment for a term, which may extend to two years or with fine
up to rupees one lakh or with both.
______________________________________________________________________________

5) b) Mention the provisions covered under IT Act?

Ans:

IT Act:
Publication of Digital Signature Certificate for fraudulent purpose (Sec 74):
Any person knowingly creates, publishes or otherwise makes available a Digital
Signature Certificate for any fraudulent or unlawful purpose shall be punished with

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imprisonment for a term which may extend to two years or with fine up to one lakh
rupees or with both.

Search and Arrest

Any Police Officer not below the rank of a Deputy Superintendent of Police or any
other officer of the Central Government or a State Government authorized in this behalf
may enter any public place, search and arrest without warrant any person found therein
who is reasonably suspected or having committed or of committing or of being about to
commit any offence under this Act.
______________________________________________________________________________

6) Ishaan is a fresher and recently is appointed as a part-time employee in

Consumer Redressal Dispute Agency. As his superior, how will you guide him
regarding the redressal forums, the nature of making complaints and the working
of the agency?
Ans:

Redressal forum: Twenty-five years ago, consumer action in India was virtually unheard
of. It consisted of some action by individuals, usually addressing their own grievances.
Even this was greatly limited by the resources available with these individuals. There was
little organized effort or attempts to take up wider issues that affected classes of
consumers or the general public.
All this changed in the Eighties with the Supreme Court-led concept of public
interest litigation. It gave individuals and the newly formed consumer groups, access to
the law and introduced in their work the broad public interest perspective.

Telepress Features
Several important legislative changes took place during this period. Significant
were the amendments to the Monopolies and Restrictive Trade Practices Act (hereafter
"MRTP Act") and the Essential Commodities Acts, and the introduction of the
Environment Protection Act and the Consumer Protection Act. These changes shifted the
focus of law from merely regulating the private and public sectors to actively protecting
consumer interests.
The Consumer Protection Act, 1986 (hereafter "the Act") is a remarkable piece of
legislation for its focus and clear objective, the minimal technical and legalistic
procedures, providing access to redressal systems and the composition of courts with a
majority of non-legal background members.

The Act establishes a hierarchy of courts, with at least one District Forum at the
district level (Chennai has two), a State Commission at the State capitals and the
National Commission at New Delhi. The pecuniary jurisdiction of the District Forum is up
to Rs. one lakh and that of the State Commission is above Rs. one lakh and below Rs.
10 lakhs. All claims involving more than Rs. 10 lakhs are filed directly before the National
Commission. Appeals from the District Forum are to be filed before the State
Commission and from there to the National Commission, within thirty days of knowledge
of the order.

How to make a complaint

This section explains how to make a complaint using our Complaints Registration
Form. It tells you what information you need to include on the form, and where you need
to send your completed form.

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Definition of a complaint
The UK Border Agency defines a complaint as “any expression of dissatisfaction
about the services provided by or for the UK Border Agency and/or about the
professional conduct of UK Border Agency staff, including contractors.”

The following will not be treated as complaints:

• Letters relating to the decision to refuse a UK visa. Visa applicants are expected
to raise this using the existing appeal channels.
• Letters-chasing progress on an application unless it is outside our published
processing times.

What information should you send?

You should make your complaint using our Complaints Registration Form.
It is important that you give as much information about yourself as possible. The
Complaints Registration Form tells you the type of information we need. This will help us
to find the information relevant to your case and to contact you about it. If possible you
should also include:
• Full details about the complaint (including times, dates and locations);
• The names of any UK Border Agency / Visa Application Centre staff you have
dealt with;
• Details of any witnesses to the incident (if appropriate);
• Copies of letters or papers that are relevant; and
• Any travel details that relate to your complaint.

What happens next?

The 'How we will deal with your complaint' page explains:
• How we handle your complaint
• What to do if you are not happy with the outcome of your complaint or how we
have handled it
• What will happen after your complaint has been dealt with
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