Q1 A) Indicate the Sources of Indian Law

MB 0051

Q1 a) Indicate the sources of Indian Law.

b) Write notes on :

i) Ignorance of Law

ii) LexMercantoria

a) Content –Law is a living thing and responds to public opinion. Laws can never be static. So, amendments were made in laws e.g MRTP Act, 1969 was amended.

 Purpose of law – Laws are created for a purpose - social, economic or political. Laws may include:

o Moral rules or etiquette etc

oNon-observance of Law of land leads to arrest, imprisonment, fines, etc.

o,Non-observance of international law may lead to social boycott, trade-sanctions, cold war, hot war, proxy war, etc.

Law not only has its origin in morality but we may not be morally bound but legally bound.

Ignorance of law is no excuse is maxim “Ignorantia juris non excusat”.So conform to law .

b) Sources of Indian Law may be Primary or Secondary as:

Former are:

Custom or customary law :As per Keeton, it may be rules of human action.

Judicial precedent is based on a rule that has been settled by many of decisions.

Statutory law is based on MP & is in written form (jus scriptum).

Personal Law are neither Statutory nor customary e.g personal laws of Hindus, Mohammedans & Christians.

Latter are English Law as Iindian contract act(ICA), 1872, Indian Partnership Act (IPA), 1932, sale of goods act (SGA),1930, & negotiable instrument(NI) Act, 1882.These are as:

 Common law are unwritten law & is based on customs & traditions.

 Equity means natural justice. In its technical and narrower sense,it means a body of legal rules It is also unwritten.

 Statute –see above. It, therefore, is superior to above.

 Law merchant or Lex Mercatoria – It is based on on traders’view of the Middle Ages.

Law & business are complementary & business is regulated by law. Even to instal shop ,we need law.

2 Narrate the facts and judgement in the case :

i. Harvey Vs. Facey

ii. Peek Vs. Gurney

iii. Ranganayakamma Vs. AlwarSetty

Ranganayakamma vs. Alwar Setty

A girl aged 13 lost her husband &was forced to adopt a boy by her husband’s relatives, who prevented corpse from being removed for cremation until she consented. Court set aside adoption as it was coercion & U/s 15 & 72 it is committing or threatening to commit any act forbidden by IPC.

Case study: Harvey vs. Facey (H- vs-F)exchanged 3 telegrams as follows:

(i) “Will you sell us your Bumper Hall Pen(BHP)? Telegraph lowest cash price–answer paid” (H- vs-F )

(ii) “Lowest price for BHP £900” (H- vs-F )

(iii) “We agree to buy BHP for £900 asked by you” (H- vs-F )

Here, there was no concluded contract(ct) between(b/w) H & F.1st telegram asked about the willingness to sell & lowest price.

While F replied only to 2nd question, he did not make any offer to sell. If F had replied in the affirmative to the last telegram, a ct could have been created b/w 2 parties. As he did not make an offer to sell, there was no ct .

U/s 17 & 19 ,Fraud is an intentional misrepresentation to deceive person &make him enter into ct. It could be:

• A false suggestion made as a fact by one who does not believe it to be true

• Concealment of a fact by one having knowledge of that fact

• Promise made without any intention of keeping it

• Any other act to deceive

• Any act or omission specifically declared to be fraudulent by law

As there is active concealment of facts,ct is voidable even though aggrieved party(AP) has the means to discover the truth with ordinary diligence.

Case study: Peek vs. Gurney

P did not r.t existence of a document disclosing liabilities. This resulted in company appearing to be doing well. If P was disclosed, it would have changed impression about co. The court ruled that the non-disclosure amounted to fraud & anyone who bought shares on the faith of this P could avoid ct.

Misrepresentation(M) U/s 18-19 is also known as simple M while fraud is known as fraudulent M .

3Q “NI may be dishonoured either by non-acceptance or by non payment”

Write about rules.

Ans:-Chq must be Written I. Regarding writing materials to be used, it can be any

as it may be written either with pen, typewriter or may be printed.

Chq must ‘ve an unconditional order . It is, however, not necessary that

word order or its equivalent must be used to make document chq . Generally,

order to a bank is expressed by word “pay”. If word “please” precedes

“pay” document will be valid.

Chq must be drawn on a specified banker only. To avoid any mistake, specify name & address of banker.Specify Payment(P).So, orders asking banker to deliver securities or certain other things cannot be regarded as chq. Do n’t specify P with interest, rate of interest as the sum payable is not certain. For chq to be valid, Payee must to be certain . Means not only human beings but

‘legal persons’ also. Thus, I drawn in favour of a body corporate, local authorities, clubs, institutions, etc., are valid.

Chq to be valid must be Payable on demand & not otherwise.

When drawer(drr) asks banker to pay & does not specify time for its pmt, I is payable on demand u/s 19 , Dating of chq – Drr of chq is expected to date it before it leaves his hands. Chq without a date is considered incomplete & is returned unpaid by banks. Drr can date chq with date earlier or later than the date on which it is drawn. Chq bearing an earlier date is called ante-dated &with later date is called post-dated. Latter cannot be honored, except at the personal risk of bank’s manager, till the date mentioned. Such chq is as much N as chq for which pmt is due, i.e., transferee of such , that of chq on which P is due, acquires a better title than its transferor, if he is a holder in due course. Chq that bears a date earlier than 3 months is a stale chq &cannot be claimed for.

4 Who is an unpaid seller(sr) ? What are the rights of an unpaid sr ?

Rights of an unpaid sr may be 2:

i)Rights u/s 73-74 of ICA, 1872,,he can recover damages for BOC.

ii) Rights under SGA, 1930: He has Rights against o goods(gs) o buyer(br) personally.

iii) Lien(L) :U/s 47-49 ,he can L on gs. L means to retain possession .

He can retain gs until price or tender of price in 3 situations, namely, Where gs have been sold

He can exercise Lien only for non-P of price & not for any other charges due

against br .e.g, he cannot claim lien for go down charges for storing gs in exercise of his lien for the price. He can retain gs Where br becomes insolvent.

iv) Right of stoppage in transit means sr can prevent gs from being delivered

to br & retain till price is paid.Such he can do if right of lien is lost

& where br has become insolvent u/s 50.

v) Right of resale: U/s 54, unpaid sr, who has retained gs

in lien or who has resumed possession from carrier upon insolvency of br ,

can resell gs if:a) Gs are of a perishable nature, without any notice to br &

b)After notifying br calling upon him to pay within a reasonable time.

Remedies for BOC:

Besides rights against gs u/s 47-54,he has below remedies against br personally:

Damages for non- Suit for price (u/s 55)  A of gs u/s 56 & Suit for interest u/s 56.

5 Describe the jurisdictions of District Forum(DF), State Council(SC), National council(NC) & Supreme Court of India as per Consumer Protection Act(CPA), 1986.

Ans:- DF is u/s2(1)(h)) Consumer Dispute Redressal Forum is u/s 9.

State Government(SG) has notified to set up DF in a district.To provide simple, speedy & inexpensive redressal to consumer grievances,CPA envisages 3-tier quasi-judicial machinery at district, state & national levels. At district ,SG can ,set up > 1 DF district.States have SC &at national level is NC.

Below are 3 instances where we can lodge C:

If value of gs or services & compensation claimed does not exceed Rs. 20 lakhs, then it can be filed in DF u/s 11. If value exceeds Rs. 20 lakhs but does not exceed rupees 1 crore, it can be filed before SC u/s 17. SC shall also have jurisdiction to entertain appeals against orders of any DF within State u/s17.

If value exceeds Rs. 1 crore, it can be filed before NC u/s 21.

There is no fee for filing C.C can also be sent by post to appropriate DF or SC or NC. C must be addressed to President of DF or SC or NC.

It must have below data:

Name, description &address of complainant

& opposite party or parties.

Facts relating to C & when and where it arose

Documents, if any, in support of allegations.

Relief that complaint(C) is seeking.

Admission of complaint u/s 13

DF should send a copy of admitted C to opposite party mentioned in C within 21 days of admission. He must be instructed to provide his version of the case within 30 days or may be granted a further extension of 15 days, at discretion of DF. If opposite party disputes allegations or fails to take any action,DF can settle disputes as specified in Act.

Procedure in respect of gs where defect requires testing is to test

defects, DF must get a sample of gs from complainant & must take steps to seal & authenticate sample & send it to appropriate laboratory for testing.Results of such tests must be provided within 45 days. This period may be extended by DF, if needed.

Complainant is obliged to bear needed charges towards testing & needs to deposit these fees to DF.DF, in turn, remits amount deposited to lab which test. Upon getting report,dF

then forwards a copy of same, along with its remarks, to Opposite party seeking clarification. Any disputes w.r.t lab’s findings must be countered by written objections from concerned party. DF then provides reasonable opportunity for both complainant & opposite party to be heard.

DF has u/s 13(4) same powers as civil court under Code of Civil Procedure,1908:

It can Summon & enforce attendance of any defendant or witness & see

witness on oath It can discover & produce any document or other material object

as evidence It can get evidence on affidavits It can request for test from appropriate lab

It can issue any commission (i.e., warrant conferring authority) for examination of any witness.

U/s 13, if DF is satisfied that gs complained against suffer from any of

defects ,it shall issue an order to the opposite party directing him to do as:

To remove defect pointed out by lab

To replace gs with new gs of similar description that shall be free from defects

To return to complainant price, or charges paid by the complainant

To pay such amount as may be awarded by it as compensation to consumer for any loss or injury suffered by him due to the negligence of the opposite party

To discontinue unfair trade practice or Restrict trade practice

Not to offer hazardous goods for sale & to withdraw such from being offered for sale.It can order for cease of making such.

6 Write about steps to float a limited co. How are the affairs of co managed ?

Ans:-Co has an independent corporate existence separate from its members,It has Limited liability,Perpetual succession as a juristic person , Common seal , Ability to transfer ownership by way of shares . In formation of co ,see 3 parts:

i) Promotion denotes preliminary steps undertaken for Regn & floatation of co. Persons who assume the task of promotion are called promoters.

ii) Such may be an individual, syndicate, association, partnership or co.

ICA does not define such, although such is used expressly in u/s

62, 69, 76, 478 & 519.

Preliminary decisions regarding type of co, share capital, etc. have to be decided by promoters. U/s 12, persons as 7 or more (2 or more for a private ltd co)

associated to form co, with or without limited liability. They subscribe their names to Memorandum of association(MOA) & comply with other formalities. Co so formed may be limited by shares or guarantee or may be an unlimited co.

Before Registration(regn) , ascertain from Registrar of Co (ROC), whether proposed co name is approved. Below documents have to be filed with ROC, & duly stamped along with necessary fees:

MoA, duly signed by subscribers ii)Article of association( AOA), if any, signed by subscribers .It is optional. Ct, if any, by which co proposes to enter into with any person for appointment as MD/whole time director(dir) or manager u/s 33(1).

A list of dir who have agreed to become 1st dir, with written consent to act as dir

& take up qualification of shares u/s 266. A declaration stating that all need

of ICA & other formalities relating to Regn have been complied with. This declaration shall be signed by any of below:

o An advocate of Supreme or High Court

o An attorney or pleader entitled to appear before a High Court

o A secretary or CA in whole-time practice in India, who is engaged in formation of co

o A person named as a Dir, Manager or Secretary of co in AoA

o U/s146: Within 30 days of incorporation, notice of situation of registered office of co

shall be given to ROC who will record same.

When ROC is satisfied with statutory need.

He then issues a “Certificate of Incorporation”( COI), i.e., u/s33 (3).It is issued as a soft copy & not a hard copy, as per recent changes .

When we register co & get COI, it is ready for ‘floatation. We can go ahead to raise capital. U/s 70 every public co has to take either of below 2 steps:

Issue prospectus(P) in case public is to be invited to subscribe to its capital, or

Submit a ‘statement in lieu of P ’ in case capital has been arranged privately. It must be done at least 3 days before allotment.