Mentoassociates.com – Legal Articles

There is a huge demand from public for Bangalore Development Authority (BDA) sites, directly allotted or for second purchase. A site allotted by BDA which is a governmental authority inspires confidence and trust in the mind of public. In this article let us see the formalities for obtaining a site from BDA.
The eligibilities for applying for a BDA site are that the applicant should have minimum 15 years domicile in Karnataka and should be more than 18 years old. For officers belonging to All India Services of Karnataka cadre the domicile period required is a minimum of 2 years. Persons whose family members or dependents own a site or house allotted by BDA or a Co-operative Society or KHB or other government agencies are not eligible to apply for allotment of sites.
Abound 50% of the sites are reserved for backward tribes, SC/ST people, defense personnel, State and Central government employees, public sector employees, physically handicapped and for those who have excelled in the field of arts, science or sports. Rest 50% is meant for general public.
Applicants are selected based on seniority, category, number of earlier attempts, age factor etc. The allottes are given 60 days time period to pay the sital value without interest. After 60 days time period, the amount can be paid with interest.  For alottees belonging to SC/ST and defense personnel, 3 years time period is given for payment of sital value.

The provincial Insolvency Act, 1920, deals with the matters pertaining to insolvency in areas outside the presidency towns. As per this Act, the District courts have jurisdiction in matters pertaining to insolvency.

A debtor is said to have committed an act of insolvency in the following cases:

a. If he makes a transfer of all or substantially all his property to a third person, for the benefit of his creditors generally;

b. If he makes a transfer of his property to defeat or delay his creditors.

c. If he makes any transfer of his property, which would be void as fraudulent if he were adjudged as an insolvent.

d. If he departs or remains out of India with an intent to defeat or delay his creditors.

e. If he departs from his dwelling house or usual place of business or otherwise absents himself with intent to defeat or delay his creditors.

f. If he secludes himself so as to deprive his creditors of the means of communicating with him with intent to defeat or delay his creditors.

g. If any of his property has been sold in execution of the decree of any court for the payment of money.

h. If he petitions to be adjudged as an insolvent.

i. If he gives notice to any of his creditors that he has suspended payment of his debts.

j. If he is imprisoned in execution of the decree of any court for the payment of money.

k) If a creditor who has obtained a decree or order against a debtor for the payment of money, has served on him a notice, and the debtor has not complied with that notice within the period specified therein.

If a debtor commits an act of insolvency, an insolvency petition may be presented either by the creditor or by the debtor and the court may adjudge the debtor to be an insolvent.

A debtor is entitled to present an insolvency petition only if he satisfies the following conditions:
a. He should be unable to pay his debts and
b. His debts amounts to minimum five hundred rupees or
c. He is under arrest or imprisonment in execution of the decree of any court for the payment of any money or
d. an order of attachment in execution of such a decree has been made and is subsisting against his property.

After filing and admission of an insolvency petition, the court will issue notice to the respondents. The court while admitting an insolvency petition has the power to appoint an interim receiver for the property of the debtor or any part thereof and the interim receiver may take immediate possession of the property or part of the same.
 
The Court has the power to make interim proceedings against a debtor at the time of admitting an insolvency petition. These include:-
1) Ordering the debtor to give security for this appearance.
2) Order attachment of property in possession or under control of debtor.
3) Order a warrant for the arrest of debtor.

     The debtor shall on the admission of petition produce all books of  accounts, inventories of his property, list of creditors and debtors as may be required by the court.

In case of an insolvency petition presented either by the Creditor or the debtor, the court may dismiss the petition, if it finds suitable grounds for the same.If the court does not dismiss the petition, it shall make an order of adjudication and also shall specify in such order, the period within which the debtor shall apply for his discharge.

On the making of order of adjudication, the insolvent shall help in the realization of his property & distribution of proceeds among his creditors. The whole of the property of insolvent shall become divisible among creditors. An order of adjudication will be effective from the date of presentation of petition on which it is made.

DISADVANTAGES OF INSOLVENCY:
a.Social stigma to an insolvent.
b.Cannot become partner of a firm or director of a company.
c.Cannot enter into legal contracts.
d.The insolvent may not get credit until he is discharged.
e.Cannot contest elections or hold public offices.

The procedure to be followed is as follows:
a. A Company by ordinary resolution in an Annual general meeting or an extra ordinary General meeting   can remove a director.
b. Special Notice about the resolution to remove a director shall be issued to the members.
c. A copy of the said notice to be send to the director to be removed also.
d. The director shall be given an opportunity of being heard in the meeting.
e. If the director gives any written representation to the notice, then the said representation shall be given to all members.
f. If the representation could not be given to all members, then the Director can request the said representation to be read out in the meeting.
g. The members can pass an ordinary resolution, by simple majority and remove the director.
h. The Company shall within 30 days from the removal of a director file Form No.32 and a copy of the resolution with the Registrar

The Limited Liability Act, 2008 brought to India a special form of business entity by name Limited Liability Partnership for the first time. Till then we had partnership and limited liability companies. This new form of business identity, combines several features of partnership and limited liability companies; yet it has its own unique features too.
 
A Limited Liability Partnership (LLP) is a body corporate and is a legal entity separate from that of its partners. It has perpetual succession. Any change in the partners will not affect the existence, rights or liabilities of the LLP.

An individual or body corporate may be a partner in an LLP. Every LLP shall have at least two partners. Every LLP shall have at least two designated partners who shall be individuals and at least one of them shall be a resident of India. Every designated partner of an LLP shall obtain a Designated Partner Identification Number (DPIN) from the central government.

A designated partner is responsible for all compliances and liable for all penalties under the LLP Act, 2008 on behalf of the LLP. Every LLP shall have a registered office to which all communications and notices may be addressed.

A registered LLP can sue and be sued. It can acquire, own, hold and dispose movable and immovable properties. It can have a common seal and can do and suffer lawful acts and things as body corporate.

Every Limited Liability Partnership shall have the words ‘Limited Liability Partnership’ or the acronym ‘LLP’ as the last word of its name. Every LLP shall ensure that its invoices, correspondences, and publications bear the name and address of the registered office and the registration number as well as a statement that it is having limited liability.

The mutual rights and duties of the partners of a limited liability firm as well as the rights and duties between the partners and the firm shall be governed by the provisions of the act as well as the terms in the partnership deed.  

A person may cease to be a partner of an LLP:- 
a) On his death or dissolution of LLP
b) If he is declared to be of unsound mind by a competent court,
c) If he has applied to be adjudged as an insolvent or declared as an   insolvent.
 
If there is any change in the name or address of the partner LLP shall file a notice with the registrar within 30 days of such a change.
Every partner of an LLP is for the purpose of business of LLP an agent of LLP but not of other partners. An LLP is not bound by anything done by a partner in dealing with a person if:
a) The partner in fact has no authority to act for LLP in doing a particular act.
b) The person knows that he has no authority or does not know or believe him to be a partner of LLP.

If an LLP or its partners carryout any act with an intention to defraud creditors or any other person or for any fraudulent purpose, liability of LLP and partners shall be unlimited.

A partner can contribute to an LLP in the form of tangible or intangible property. Tangible property may include movable or immovable property. Intangible property may include money, promissory notes, contract for services etc. The obligation of a partner to contribute money, property or other benefit shall be as per LLP agreement.