Archive for February 2008

Forming a partnership.

The Indian Partnership Act, 1932 regulates the law relating to partnership in India. Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. The persons who have entered into partnership with one another are called individually ”partners” and collectively a “firm” and the name under which their business is carried on is called the “firm name.” The relation of partnership arises from contract and not from status. If there is no provision for the duration or determination of a partnership, such a partnership is called a “partnership at will”.

The Partners are bound to carry on the business of the firm to the greatest common advantage, to be just and faithful to each other and to render true accounts and full information of all things affecting the firm to any partner. Every partner is liable to indemnify the firm for any loss caused to it by his fraud in the conduct of the business of the firm.

Every partner has a right to take part in the conduct of the business and every partner is bound to attend diligently to his duties in the conduct of the business. Any differences arising as to ordinary matters connected with the business may be decided by a majority of the Partners. However, a change in the nature of business can be decided only with the consent of all the partners.

The Karnataka Shops and Commercial Establishment’s Act, 1961

The Karnataka Shops and Commercial Establishment’s Act, 1961 provides for the regulations of conditions of work and employment in shops and commercial establishments. According to section 4 of this Act, the employer of every establishment, shall send to the Inspector of the area concerned, a statement, with the required fee, containing the information regarding name of the employer and manager, address of the establishment, name of the establishment, and such other particulars. On receipt of the said statement, the Inspector shall register the establishment and issue a registration certificate, which shall be prominently displayed in the establishment. A registration certificate issued so, shall be valid for 5 years and thereafter it need to be renewed.

Under section 2(u) of this Act a “Shop” is defined as “Shop means any premises where any trade or business is carried on or where services are rendered to customers, and includes offices, storerooms, godowns or warehouses, whether in the same premises or otherwise, used in connection with such trade or business”. Hence a bare reading of the provisions of the act makes it clear that offices, godowns and warehouses used in connection with any trade or business are liable for separate registration under the Act.

As per section 4 of the said act, the liability to obtain the registration of an establishment lies on the Employer. Section 2(h) of the act defines Employer as follows “Employer means a person having charge of or owning or having ultimate control over the affairs of an establishment and includes members of the family of an employer, a manager, agent or other person acting in the general management or control of an establishment”. Hence it is crystal clear that the Registration Certificate needs to be obtained in the name of the employer or the owner of the business. Even if the business is being run on the rented premises, the Registration Certificate needs to be obtained in the name of the employer or the owner of the business and not in the name of the owner of the premises.

As per section 6-A of the said act, every employer employing any person, in connection with his establishment, shall issue an appointment order in writing, within 30 days of his appointment.

No employee in any establishment shall be required to work for more than nine hours on any day any forty-eight hours in any week. Further the total number of hours of work including overtime shall not exceed ten hours in any day. It is further provided that the total number of overtime hours worked by an employee shall not exceed fifty in a period of three continuous months.

Further no young person shall be allowed to work in any establishment for more than 5 hours a day. Here a young person means a person between fourteen and eighteen years.

As per section 9 of the Act, no employ in any establishment shall work for more than five hours at a stretch. After five hours of work, an employee shall be given at least 1 hour of rest.

Every establishment shall remain close for one day of the week. The said day shall be displayed on a notice, in a conspicuous place in the establishment. Further every employee in an establishment shall be given at least one whole day in a week as holiday for rest.

No child shall be required or allowed to work in any establishment. Further no women or a young person shall be required to work in an establishment during nighttime. However, the State Government shall exempt establishment of IT or ITES from the application of this provision.

No employer shall remove or dismiss an employee who has put in service under him continuously for a period not less than six months, except for a reasonable cause and unless and until one month previous notice or pay in lieu thereof has been given to him. Provided that where misconduct of an employee is brought on record with proof at an enquiry held for the purpose, he shall not be entitled to the notice or pay in lieu of such notice.

Importance of writs

Article 226 of the constitution confers the High Courts wide powers to issue orders and writs to any person or authority. Before a writ or an order is passed, the party approaching the court has to establish that he has a right and that right is illegally invaded or threatened. High court can issue writ and directions, to any Government, authority or person even beyond its territorial jurisdiction, if the cause of action partly arises within its territorial jurisdiction.

Wherever questions of facts are involved normally High Court does not exercise its power under article 226.Similary when an alternative remedy is available to the Petitioner, the Courts do not entertain petitions under Article 226.Also when there is an inordinate delay in approaching the court, the court may not give relief acting under this Article.

There are various types of Writs: – Habeas Corpus, Mandamus, Prohibition, Quo Warranto and Certiorari. Supreme Court under Article 32 of the Constitution can exercise similar Powers.

The basic idea in conferring powers under Article 226 upon High Court is to see that the rule of law is maintained in the society. The executive Authorities are to be corrected whenever they transgress the limits of their power and encroach upon the rights of the citizen. Violations of human rights, natural rights etc., are instances where the High courts interfere using this powerful article of the constitution.

What is a caveat?

Caveat is a preventive relief available to citizens. This gives them the immediate intimation from the court whenever an opposite party approaches the Court with some prayer. When an application is made in a suit or proceeding or a proceeding to be instituted, any person claming a right to appear before the court on the hearing of such application may lodge a Caveat. A person can avail this right if he anticipates filing of a suit or other proceedings by any other person affecting his interests.

A person lodging a caveat (Caveator) shall serve a notice of the Caveat by registered post, on the person by whom the proceeding may be initiated. After the caveat has been lodged, if any application is filed, the Court shall serve a notice of the application on the Caveator.

A Caveat shall remain in force only for ninety days, after which a fresh Caveat can be filed. A caveat cannot be filed in criminal matters.

Consumer protection

The enactment of the Consumer protection Act 1986 was an important milestone in the history of the Consumer movement in India. The Act was made for the better protection and promotion of consumer rights through the establishment of Consumer Councils and Consumer Disputes Redressal Agencies. These agencies include Consumer Forums at district level, State Commission at state level and National Commission at national level.

These agencies attempt to provide simple, inexpensive and speedy justice to the consumers with complaints against defective goods, deficient services and unfair and restrictive trade practices. In comparison to the proceedings in normal civil courts the proceedings before these agencies are faster and less technical. Many consumers prosecute their matters even without the assistance of advocates before these agencies. In Karnataka, the Bangalore Urban District Consumer Forum is located at Cauvery Bhavan and the State Commission is situated at Basava Bhavan near Chalukya Hotel.

Complaints where the value of goods or services and the compensation does not exceed Rupees twenty lakhs shall be filed before a District Forum and those between 20 lakhs and one crore shall be filed before the State Commissions and those exceeding 1 crore shall be filed before the National Commission.

Appeals against the order of District Forums have to be field before State Commissions and appeal against the orders of Sate Commissions have to be field before the National Commission.

Right of private defense

Chapter IV of the Indian Penal Code, 1860 contains some interesting rights available to a citizen, from sections 96 to 106 under the caption, “Right of Private Defense”. This is an exceptional area where the law permits the victims to react, when they themselves or their fellow beings are subjected to an offence. In fact nothing is an offence under the eyes of law, which is done in the exercise of private defense.

Every person has a right, subject to few restrictions enumerated in section 99 IPC, to defend his own body and of any other person, against any offence affecting human body or to defend his or another person’s property where such property is subjected to offences of theft, robbery, mischief etc. The right of private defense of the body extends even to causing harm or death of the assailant, if the offence one faces, is that which causes a reasonable apprehension of death, rape, unnatural lust and kidnapping. In the cases of other lesser serious offences, the victim can cause reasonable harm to the assailant during the exercise of the right of private defense.

There are, however, few restrictions to the exercise of this valuable right. This right cannot be exercised against a public servant acting in good faith, under the color of his office, which does not cause a reasonable apprehension of death or grievous hurt, thought his act may not be strictly justifiable under law. Similarly, if there is sufficient time for the victim, to have recourse to the protection of authorities, then this right cannot be exercised. Also a person cannot inflict more harm on the assailant than that is necessary for the purpose of defense.

It is interesting to note that this right is available not only to victims of offence, but it also permits others to interfere if another person or property is subjected to an offence.

Offence of cheque bouncing

Section 138 of the Negotiable Instruments Act 1881, was introduced in the year 1989 which made the dishonor of cheques, for various reasons, enumerated therein, a punishable offence. The present punishment is imprisonment for a term, which may extend to two years or with fine, which may extend to twice the amount of cheque, or with both.

A cheque needs to be presented within 6 months of the date of drawing, to the bank. After the cheque gets dishonored, the payee has to make a demand by giving a notice in writing to the drawer of the cheque, within 30 days of the receipt of information from the bank regarding the dishonor of the cheque. The payee need to wait for another 15 days after the said notice is served on the drawer to see whether the drawer is making the payment of the cheque amount. If, within 15 days, the drawer does not make the payment, the payee can file a complaint before the jurisdictional magistrate, within 30 days. It is interesting to note that such a complaint cannot be filed before the police authorities.

There are special courts in Bangalore to try cheque-bouncing cases. In addition to the criminal prosecution, a person can approach the civil court for the recovery of the money under the same cheque. Hence a person has double remedy under the law. In a prosecution for an offence of cheque dishonor, the defenses available to an accused are very limited. Most of the recent decisions of various High Courts and the Supreme Court are in favour of conviction in matters of Cheque bouncing.

What is anticipatory bail?

The Code of Criminal procedure 1973 provides the valuable right of Anticipatory Bail to a person who apprehends arrest in a non-bailable offence. This power to enlarge a person on anticipatory bail is vested only in High Court and Court of Sessions. After a person is enlarged on anticipatory bail in connection with an offence, if an officer in charge of police station arrests him, then he shall be immediately released on bail and shall not be subjected to unnecessary restraints.

The Court granting anticipatory bail may impose few conditions like to be present for interrogation before the investigation officer, not to induce or threat witnesses, not to leave the country without the permission of the court etc. The pendency of investigation is not a ground to refuse anticipatory bail. Even after the summons is issued to an accused person from the court, he can be enlarged on anticipatory bail, if the court thinks fit. The anticipatory bail granted will continue till the conclusion of trial or its cancellation.

It is not compulsory that the FIR should be registered against a person or that his name shall be there in the FIR to be eligible for applying for anticipatory bail. What is required is that there should be a reasonable apprehension of arrest by the person applying. It can be filed at a place where the accused apprehends arrest.

What amounts to contempt of courts?

Contempt of Court may be Civil Contempt or Criminal Contempt. Civil Contempt means willful disobedience to any judgment, decree, direction etc., or a willful breach of an undertaking given to a court. Criminal Contempt means the publication of any matter or doing of any act which scandalizes or lowers the authority of any court; or which prejudices or interferes with the due course of any judicial proceeding; or interferes or obstructs the administration of justice. The Contempt of Courts Act 1971 defines and limits the powers of courts in punishing contempt of courts and regulates the procedure involved therein.

However a fair and accurate report of judicial proceedings does not amount to contempt. Similarly fair criticism of judicial acts and fair comment on the merits of any case, which has been heard and finally decided, also does not amount to contempt.

High Court is the competent court to punish contempt of courts subordinate to it and also of itself. A contempt of court may be punished with simple imprisonment for a term, which may extend to six months or with fine, which may extend to two thousand rupees or with both. The limitation period for institution of any proceedings of contempt is one year from the date on which the contempt is alleged to have been committed.

Prohibition of dowry

The Dowry prohibition Act, 1961 prohibits the giving or taking of dowry. Dowry means any property or valuable security given by one party to a marriage to the other party to the marriage, at or before or any time after the marriage, in connection with the marriage of the said parties.

If any person gives or takes dowry, he shall be punishable with imprisonment for a term which shall not be less than five years, and with fine which shall not be less than fifteen thousand rupees. If any person demands any dowry from the parents or relatives of a bride or bridegroom, he shall be punishable with imprisonment for a term which shall not be less than 6 months, but which may extend to two years and with fine which may extend to ten thousand rupees. However, presents which are given at the time of marriage to a bride or bridegroom, without any demand, in that behalf does not constitute dowry. But such presents are to be entered in a list as prescribed under the Dowry Prohibition Rules.

If any person, through any advertisement, offers any share in his property or any money or a share in his business as consideration for the marriage of his son or daughter or if any person prints or publishes any such advertisement, he shall be punishable with imprisonment for a term which shall not be less than 6 months, but which may extend to 5 years, or with fine which may extend to fifteen thousand rupees.