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CS Professional guideline answers for DRAFTING, PLEADINGS AND APPEARANCES

CS Professional guideline answers for DRAFTING, PLEADINGS AND APPEARANCES

CS Professional Guideline Answers for Drafting, pleadings and appearances: This excellent blog gives you complete knowledge, improve your skills in preparing and answering for DRAFTING, PLEADINGS AND APPEARANCES in CS Professional.

This blog contains model answers for DRAFTING, PLEADINGS AND APPEARANCES given by expert faculty of CS Professional.

We hope that these CS Professional guideline answers will assist the students in preparing for the Institute’s examinations

Question 1

(a) ‘Limited judicial control over delegated legislation can be exercised by the courts’. Discuss and cite leading case law, if any

Answer 1(a)

Judicial control over delegated legislature can be exercised at the following two levels :-

  • Delegation may be challenged as unconstitutional; that is the delegation can be challenged in the courts of law as being unconstitutional, excessive or arbitrary or
  • That the Statutory power has been improperly

Limitations of delegated legislation set out under Article 13(3)(a) of the Constitution of India are as under :-

  • Delegated Legislation should not infringe any provisions, basic structure (e.g Keshavananda Bharati, a famous case) or even the philosophy as described in The Preamble of the Constitution of India.
  • Delegated Legislation should not infringe any fundamental right. Even the procedure must confirm such
  • Delegated Legislation should be within the limits laid down in the statue. The validity of the rules can be described at this stage in two ways :-
    • They run counter to the provisions of the Act, and
    • They have been made in excess of the authority delegated by the

Here the substance of the Rules and Regulations impugned has to be looked into and not the procedural requirements of the rule-making that may be prescribed in the statue. Latter is looked into procedural ultra vires rule.

High Court and Supreme Court have struck down defective Delegated Legislation Rules etc time and again.

(b) Why the knowledge about the rules of drafting of pleadings and conveyancing important in corporate affairs ?

Answer 1(b)

Importance of drafting and conveyancing for a company executive could be well understood as the company has to enter into various types of agreements with different parties and have to execute various types of documents in favour of its clients, banks, financial institutions, employees and other constituents. The importance of the knowledge about drafting and conveyancing for the corporate executives has been felt particularly for the three reasons viz.,

  • for obtaining legal consultations;
  • for carrying out documentation departmentally;
  • for interpretation of the

With the knowledge of drafting and conveyancing, there could be better interaction by the corporate executives while seeking legal advice from the legal experts with reference to the matters to be incorporated in the documents, to decide upon the coverage and laying down rights and obligations of the parties therein. Robust knowledge of rules on drafting assist in better communication, extraction of more information, arriving on workable solutions, and facilitates settlement of the draft documents, engrossment and execution thereof.

Knowledge of drafting and conveyancing for the corporate executives is also essential for doing departmental wise documentation. An executive can make a better document with all facts known and judging the relevance and importance of all aspects to be covered therein.

A number of documents are required to be studied and interpreted by the corporate executives. In India, in the absence of any legislation on conveyancing, it becomes imperative to have knowledge about the important rules of law of interpretation so as to put right language in the documents, give appropriate meaning to the words and phrases used therein, and incorporate the will and intention of the parties to the documents.

(c)‘Corporate decision making process has to be collective as per law’.

Answer 1(c)

A company is an artificial judicial person created by law having its own distinct entity form and capable of entering into contracts. Though company is bestowed with the characteristic of separate legal entity but it cannot take decision on its own. It is capable of acting in its own name, entering into contracts. It is capable of owning and holding property in its own name, sue others and to be sued by others in its name. Despite all these powers, since it is not a natural person, it expresses its will or takes its decisions through natural persons (i.e. directors or members) collectively which is known as “resolutions” at validly held meetings.

In case of Re Associated Colour Laboratories Ltd (1970) 12 D.L.R, a meeting has been defined as ‘Coming together of two or more persons face to face, so as to be in each other presence or company.

There are two collective bodies in the company which take decision through resolutions:

  • Board of Directors – who manage, control and direct the business of the company
  • General body of members – who ultimately own the company.

Such decisions pertain to the various corporate activities and management of the company.

Thus corporate decision making process has to be collective as laid down in the Law.

(d)Write down the required important practical aspects, while drafting agenda and notes thereon.

 

Answer 1(d)

Following are the important practical aspects while drafting agenda and notes thereon:-

  1. While preparing the Agenda and notes thereon, good drafting is of the Important or non routine items of the Agenda have to be written with special care, employing not only good drafting skills but also an understanding of commercial considerations and the business environment. The following points needs to be focused for drafting agenda and notes thereon:
    • Divide the Agenda into two parts: – the first part containing usual or routine items and the second part containing other items which can further be bifurcated as (i) items for approval; and (ii) items for information/noting.
    • For each item of the Agenda an explanatory note should be The explanatory note should give sufficient details of the proposal, including the proposed Resolution, if any, references to the provisions of the Companies Act and other applicable laws, the Memorandum and Articles of Association, other relevant documents, decisions of previous Board or General Meetings, as necessary. The explanatory note may be drafted under the following heads :
      • Background (or Introduction);
      • Proposal, with recommendations of the management;
      • Provisions of Law;
      • Decision(s) to be taken ; and
      • Interest, if any, of any Directors.
  1. As a good governance practice, the agenda item should be initiated by the concerned Department (Head of Department or other authorised person) and approved by the competent authority as may be decided by the
  2. The Company Secretary should refer to the Agenda of previous Meetings, to see whether any items had been deferred and should consider whether such items are to be included for discussion at the ensuing
  3. The Company Secretary should also refer to the Minutes of the Meeting held during the corresponding period of the previous year to see whether there are any recurring periodic items (e.g. interim/final dividend, quarterly results). The Company Secretary should finalise the Agenda in consultation with the Chairman or in his absence the Managing Director or in his absence the Whole-time Director.
  4. Notes on policy matters should present clear-cut issues in order to facilitate due deliberations and precise decisions at the
  5. The Company Secretary should keep, in addition to a record of matters to be discussed, a separate folder of all such correspondence, notes and documents which need to be dealt with at the In preparing the Agenda, the Company Secretary should refer to this folder to ensure that all items which require the decision of the Board are included in the Agenda.
  6. A separate Agenda item number should be given for items which are brought forward for discussion from a previous Meeting rather than placing them under the omnibus Agenda

A few extra copies of the Agenda should always be kept available at the Meeting

Question 2

(a)Write notes on the following as desired :

  • (i) Name forums where a company secretary in practice can appear as authorized representative.
  • (ii)Summarize standards applicable to preparation of an Mention the common purposes for which legal opinion are sought. (4 marks each)

Answer 2(a)(i)

The Company Secretaries in practice are rendering value added services to corporate sector as independent professionals. Apart from this a Company Secretary can appear as an authorized representative before NCLT, Competition Commission of India (CCI),

Securities Appellate Tribunal (SAT), Telecom Regulatory Authority of India (TRAI) and various other Tribunals.

Under the Companies Act

Section 432 of the Companies Act, 2013 dealing with right to legal representation envisages that the applicant or the appellant may either appear in person or authorise one or more Chartered Accountants or Company Secretaries or Cost Accountants or legal practitioners or any officer to present his or its case before the Tribunal or the Appellate Tribunal, as the case may be.

Under the TRAI Act

Section 17 of the Telecom Regulatory Authority of India (TRAI) Act, 1997 authorizes Company Secretaries to present his or its case before the Appellate Tribunal.

Under the SEBI Act

Securities and Exchange Board of India (SEBI) Act, 1992 under Section 15V permits the appellant either to appear in person or authorise one or more of practising Company Secretaries, Chartered Accountants, Cost Accountants or Legal practitioners or any of its officers to present his or its case before the Securities Appellate Tribunal.

Under the Competition Act

Sections 35 of the Competition Act, 2002 authorises Company Secretaries in practice to appear before Competition Commission of India.

Under Real Estate (Regulation and Development) Act, 2016

As per Section 56 of the Real Estate (Regulation and Development) Act, 2016 a Company Secretary holding certificate of practice can appear before Appellate Tribunal or a Regulatory Authority or Adjudicating Officer on behalf of applicant or appellant as the case may be.

Answer 2(a)(ii)

Standards applicable to preparation of an opinion

  1. General : A lawyer is expected to be well informed and to exercise such skill, prudence and diligence as lawyers of ordinary skill and capacity commonly possess and exercise in the performance of the tasks which they undertake. When a matter falls within a recognized area of legal specialty, such as tax or securities law, it is advisable to take that assignment only if it falls within the competence of the
  2. Customary Practice: The opinion preparers should devote the time needed to interpret and apply legal principles relevant to the situation at hand, ascertain (through appropriate inquiry and certificates of officers of the Company) the facts that underlie the opinion, and identify areas of significant uncertainty (if any) in the interpretation and application of legal principles. In certain cases, opinion givers may conclude that it is necessary to conduct research with respect to particular legal principles or to conduct an investigation of the underlying facts relevant to the
  3. Fraudulent or Misleading Opinions : An opinion giver may be liable for an opinion that constitutes fraudulent misrepresentation. A lawyer owes a duty to non- clients to refrain from fraudulent misrepresentation. It is generally understood that, regardless of compliance with other standards, and even if an opinion is technically correct, a lawyer should not render an opinion that the lawyer recognizes would be misleading to the opinion
  4. Ethical Issues Relating to the Provision of Opinions to Non-clients : A lawyer delivering an opinion letter to a non-client should also consider ethical For example, rendering an opinion to a non-client may conflict with the opinion giver’s ethical obligations to maintain the confidence of its client. He should decline to give legal opinion in such cases.

Some of the common purposes for which legal opinion are sought are as follows:

  1. Lawfulness of an action : When one wants to know if an action is
  2. Legal consequences : Sometimes a party entering into a transaction obtains legal opinion to ascertain if the action will lead to desired legal
  3. Answer questions : When client wants professional guidance in an
  4. Regulatory requirements : Sometimes legal opinion has to be sought because it is mandated by
  5. Compliance : It can be sought to meet the compliance
  6. Protective shield : Clients sometimes desire the protection of an expert’s legal
  7. Designed to mislead : Sometimes promoters of unscrupulous schemes obtain as many opinions from different experts as is possible and use the one which is favourable to their scheme of
  8. To satisfy contractual requirements : Sometimes a clause in commercial contracts require the opinion of an
  9. Due Diligence : Lawyers and clients often cite due diligence as the principal reason for

(b)A partnership firm, a HUF and a Minor wants to be partner of another partnership Decide the possibility of the same. (4 marks)

Answer 2(b)

The word “person” in Section 4 of the Indian Partnership Act, 1932 contemplated only natural and legal persons. (Duli Chand v. C.I.T., AIR, 1956 SC 354). Partnership relation is one of contractual nature. Therefore, such persons who are competent to contract can enter into partnership.

A firm or a Hindu Undivided Family is not a legal person and cannot enter into partnership with any person. When the Karta of a Joint Hindu Family enters into a partnership with strangers the other members of the family do not ipso facto become partners (Firm Bhagat Ram v. Comm. of Excess Profits Tax, AIR 1956 SC 374). Further it is to be noted that two partnership firms cannot enter into partnership as such but its partners can certainly form a new partnership.

A minor cannot be a partner in a firm but, with the consent of all the partners, he can be admitted to the benefits of partnership (Section 30 of the Indian Partnership Act, 1932). He is entitled to share in the profits and his share is liable for the acts of the firm, but he is not personally liable. He cannot be made liable for the losses of the firm. Within six months of attaining majority or obtaining knowledge of his admission, whichever is later, the minor may elect to become or not to become a partner in the firm.

(c)In order to solve certain disputes among the partners, arbitrator has been appointed, but there is no arbitration clause in the partnership deed, except only communication through electronic means among the partners relating appointment of One partner challenges the appointment of arbitrator. Decide.(4 marks)

Answer 2(c)

The ‘arbitration agreement’ under the Arbitration and Conciliation Act, 1996 means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of defined legal relationship whether contractual or not. It may be in the form of an arbitration clause in a contract or in the form of a separate agreement. It has to be in writing.

It is in writing if it is contained in a document signed by the parties, or in an exchange of letters, telex telegrams or other means of telecommunication “including communication through electronic means” which provide a record of the agreement, or in an exchange of statements of claim and defence in which the existence of agreement is alleged by one party and not denied by the other.

Thus the appointment of arbitrator in the question cannot be challenged by the partner.

OR (Alternate question to Q. No. 2)

Question 2A

Draft the following as per the instructions :

(i)A sample FIR assume facts. Comment “Genuineness or creditability of the information is not a condition precedent for FIR”.

Answer 2A(i)

Specimen Form of First Information Report

To

The Officer-in-Charge……………………………… (Name of the Police Station)

Sir

This is to inform you that my cycle has been stolen from the cycle stand in the daily market last evening. Last evening, before I went to the market, I placed my green model Hero Cycle in the cycle stand No. 1 as usual. I had locked the cycle. The cycle bears the No_______I had bought it only a month ago and it was almost new. The cycle had a full gear case, a carrier and a side basket. When such mishap occurred I was buying vegetables in the market. I asked everybody who were present there about the cycle. It was all in vain. I request you to kindly register a case of theft and initiate the necessary investigation to recover the stolen cycle.

Yours faithfully,

               (YourName)

In Lallan Chaudhary and Ors v. State of Bihar, AIR 2006 SC 3376, the Supreme Court held that section 154 of the Cr.P.C 1973 casts a statutory duty upon police officer to register the case, as disclosed in the complaint, and then to proceed with the investigation. The mandate of Section 154 of the Cr.P.C 1973 is manifestly clear that if any information disclosing a cognizable offence is laid before an officer in charge of a police station, such police officer has no other option except to register the case on the basis of such information.
The provision of Section 154 of the Cr.P.C 1973 is mandatory. Hence, the police officer concerned is duty-bound to register the case on receiving information disclosing cognizable offence. Genuineness or credibility of the information is not a condition precedent for registration of a case. That can only be considered after registration of the case. [Ramesh Kumari v. State (NCT of Delhi) and Ors, 2006 Cri.LJ 1622].

(ii)A memorandum of mortgage by deposit of title deeds

Answer 2A(ii)

Memorandum that this……….. day of          2019, ‘AB’ of, etc. (the mortgagor), as

beneficial owner, has deposited with ‘CD’ of, etc. (the mortgagee), the original title deeds comprised in the Schedule A hereto, relating to the premises belonging to the said ‘AB’ and situate at   etc.,  described in Schedule B with intent to create a  charge

thereon for securing repayment to the said ‘CD’ of the sum of Rs…          this day lent

and advanced by the said ‘CD’ to the said ‘AB’ on demand with interest for the same from this date at the rate of Rs… per cent per annum.

The said ‘AB’ do hereby undertake as and when required by the said ‘CD’ to execute and register at the costs of the said ‘AB’ a legal mortgage in such form and containing such covenants and provisions as he may reasonably require.

Dated this………….. day of                2019.

The Schedule A above referred to Description of the Title Deeds deposited.

The Schedule B above referred to Description of the Property.

Signature of the Mortgagor.

(iii)A specimen deed of assignment of shares in a company.

Answer 2A(iii)

THIS ASSIGNMENT is made this ………………………… day of ……………………

 

BETWEEN

 

AB, son of ……………, resident of…………………………… (hereinafter called “the Assignor”) of the one part, AND

CD, son of…………………………, resident of……………………………. (hereinafter called “the Assignee”) of the other part.

THE DEED WITNESSES:

That in consideration of the sum of  Rs………………… (Rupees………………….. )

paid by the assignee to the assignor, the receipt whereof the assignor hereby acknowledges, the said AB hereby assigns, sells and transfers to the said CD………………… Equity  Shares of Rs…………………………………………………………………………… each,  fully paid up, bearing

consecutive Nos……………… to………………….. (inclusive), which stand in the name of

the assignor in the Register of Members of……………………… Co. Ltd.

 

TO HOLD the same to the assignee absolutely, subject nevertheless to the conditions on which the assignor held the same up to date.

AND the assignee hereby agrees to take the said Equity Shares subject to such conditions.

IN WITNESS WHEREOF the assignor and the assignee do hereto affix their respective signatures on the day, month and the year stated above.

 

Witness: Assignor

Witness: Assignee

(iv)A Deed altering conditions in a (4 marks each)

Answer 2A(iv)

THIS DEED made the…………… day of……………

BETWEEN AB of, etc. (thereafter called “the landlord”) of the one part AND

CD of, etc. (thereinafter called “the tenant”), of the other part.

WHEREAS by a lease (hereinafter called “the principal deed”), dated the……………

day of…………… and made between the parties hereto and registered  at……………

Registration office in  Book  No…………… Volume  No………   pages……………

to……………  Being No…………… for the year……………. , the said AB granted  and

demised to CD the house (or, etc.) situate at, etc.

AND WHEREAS the parties hereto have agreed to alter and modify the terms and conditions of the principal deed in the following manner.

NOW THIS DEED WITNESSES as follows:

  1. Sub-clause (e) of clause 2 (or, etc.) of the principal deed, the following sub- clause shall be omitted and shall cease to have any
  2. For sub-clause (b) of clause 2 (or, ) of the principal deed, the following sub- clause shall be substituted, namely: (Set out the new sub-clause)
  3. That as altered and modified as aforesaid the principal deed shall remain in full force and

IN WITNESS WHEREOF etc.,

Witnesses:

………… AB

………. CD

Question 3

Explain the following :

  • Two types of Hire Purchase
  • The objectives of trade marks Whether an unregistered trade mark can be assigned ?
  • Concept of the Goodwill of the Company and the criteria from which goodwill arises.
  • Concept of entrenchment in the Companies Act, (4 marks each)

OR (Alternate question to Q. No. 3)

Question 3A

Distinguish between the following :

(i) BPO and KPO type of outsourcing

(ii)Summons case and warrants case

(iii)Hypothecation and pledge

(iv)License and lease(4 marks each) 

Answer 3(a)

Following are the two types of Hire Purchase Agreements:-

  1. When the owner is unwilling to approach the purchaser of goods to recover the balance of the price, and the financier who pays the balance undertakes the recovery. In this form, goods are purchased by the financier the dealer, and the financier obtains a hire-purchase agreement from the customer under which the latter becomes the owner of the goods on payment of all the instalments of the stipulated hire and exercising his option to purchase the goods on payment of a nominal
  2. In the other form of transactions, goods are purchased by the customer, who in consideration of executing a hire-purchase agreement and allied documents remains in possession of the goods, subject to liability to pay the amount paid by the financier on his behalf to the owner or dealer, and the financier obtains a hire-purchase agreement which gives him a license to seize the goods in the event of failure by the customer to abide by the conditions of the hire-purchase

Answer 3(b)

The trademark law has undergone changes from time to time, with the changing pattern of business methods and practices. Even the very concept of a trade mark and its functions have changed. The object of trade mark law is to deal with the precise nature of the right which a person can acquire in respect of trade marks and;

  • the mode of acquisition of such rights,
  • the method of transfer of those rights to others,
  • the precise nature of infringement of such rights, and
  • the remedies available in respect

Section 39 of the Trade Marks Act, 1999 states that an unregistered trade mark may be assigned or transmitted with or without the goodwill of the business concerned.

 

Answer 3(c)

Goodwill is an intangible asset. It represents the value of a business attaching to all the factors, internal and external, which enable it to earn a differential return of profit on the capital employed that is, a better return than that which arises in other comparable businesses, having regard to the nature, size, location and risk inherent in such a business, and which is capable of being enjoyed by a successor.

Goodwill has been variously defined by different commercial pundits. Some definitions

 

are:

“The goodwill of a business is the advantage, whatever it may be, which a person gets by continuing to carry on, and being entitled to represent to the outside world that he is carrying on a business, which has been carried on for some time previously.”

“The attractive force which brings in custom.”

“The benefit of a good name, reputation and connection of a business.”

“The one thing which distinguishes an old-established business from a new business at its first start.”

“The monetary measurement of the benefits attaching to the ownership of a successful business.”

“The capitalized value attaching to the differential profit-capacity of a business.”

“The whole advantage, whatever it may be, of the reputation and connection of the firm which may have been built up by years of honest work organised by lavish expenditure of money.”

Goodwill arises mainly:

  • by personal reputation of the owners;
  • by reputation of the goods dealt in;
  • by site monopoly or advantage;
  • by access to sources of supply, e.g., large quotas;
  • due to patent and trade-mark protection;
  • due to effectiveness of publicity;
  • due to reputation of the first’s goods and methods;
  • due to relationship between firm and personnel; and
  • due to elements stimulating business

 

Answer 3(d)

The concept of entrenchment is given under section 5 of the Companies Act, 2013, which are as follows:

Section 5 (3) of the Companies Act, 2013 states that the articles may contain

 

provisions for entrenchment to the effect that specified provisions of the articles may be altered only if conditions or procedures as that are more restrictive than those applicable in the case of a special resolution, are met or complied with.

 

Section 5 (4) of the Companies Act, 2013 states that the provisions for entrenchment referred to in section 5 (3) shall only be made either on formation of a company, or by an amendment in the articles agreed to by all the members of the company in the case of a private company and by a special resolution in the case of a public company.

 

Section 5 (5) of the Companies Act, 2013 states that Where the articles contain the provisions for entrenchment, the company shall give notice to the Registrar of such provisions in Form No INC-32(SPlCe) as the case may be, along with the fee as provided in the Companies (Registration offices and fees) Rules, 2014 at the time of incorporation of the company or in case of existing companies, the same shall be filed in Form No.MGT.14 within thirty days from the date of entrenchment of the articles, as the case may be, along with the fee as provided in the Companies (Registration offices and fees) Rules, 2014.

Answer 3A(i)

 

Following are the main differences between BPO and KPO type of outsourcing:

 

BasisBPOKPO
DefinitionBPO provides services like customer care, technical

support through voice processes, tele-marketing, sales, etc.

KPO provides in-depth knowledge, expertise and analysis on complex areas like Legal Services, Business and Market Research, etc.
Stands forBusiness Processing OutsourcingKnowledge Processing Outsourcing
RequiresGood communication skills and basic computer knowledgeSpecialized knowledge
ServicesLow end servicesHigh end services
ProcessPre-defined processRequires application and under- standing of business
EmployeesNot so qualified employeesSkill and expertise of knowledge employees
Expertise inProcessKnowledge
Relies onCost arbitrageKnowledge arbitrage
Driving forceVolume drivenInsights driven

 

Answer 3A(ii)

Summon Case : According to section 2(w) of the Code of Criminal Procedure, 1973 summon-case means a case relating to an offence, and not being a warrant-case. Those cases in which an offence is punishable with an imprisonment of fewer than two years is a summons case. A summons case doesn’t require the method of preparing the evidence. Nevertheless, a summons case can be converted into a warrant case by the Magistrate if after looking into the case he thinks that the case is not a summon case.

Important points about summons case are as under:

  • A summons case can be converted into a warrant
  • The person accused need not be present
  • The person accused should be informed about the charges No need for framing the charges in writing.
  • The accused gets only one opportunity to cross-examine the witnesses

Warrant Case : According to Section 2(x) of Code of Criminal Procedure, 1973 a warrant case is one which relates to offences punishable with death, imprisonment for life or imprisonment for a term exceeding two years. The trial in warrant cases starts either by the filing of FIR in a police station or by filing a complaint before a Magistrate. Later, if the Magistrate is satisfied that the offence is triable exclusively by the Court of Session, he sends the case to the Sessions court for trial. The process of sending it to Sessions court is called “committing it to Sessions court”.

Important features of a warrant case are as under:

  • Charges must be mentioned in a warrant case
  • Personal appearance of accused is mandatory
  • A warrant case cannot be converted into a summons case
  • The accused can examine and cross-examine the witnesses more than once
  • The Magistrate should ensure that the provisions of Section 207 are complied with. Section 207 of P.C. 1973, include the supply of copies such as police report, FIR, statements recorded or any other relevant document to the accused.

Answer 3A(iii)

The main differences between Hypothecation and Pledge are as under:

  1. The pledge can be defined as the form of bailment in which goods are held as security for the payment of the debt or the performance of an obligation. Hypothecation is moreover different from the pledge, in which the collateral asset is not delivered to the
  2. The pledge is defined under section 172 of the Indian Contract Act, 1872. On the other hand, Hypothecation is defined under section 2(1)(n) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act,

 

  1. In the pledge, the possession of the asset is transferred, but in the case of hypothecation, possession lies with the debtor
  2. Parties to the contract of the pledge are called as pawnor (borrower) and Pawnee (lender) whereas in case of hypothecation the parties are known as hypothecator (borrower) and hypothecatee (lender).
  3. In the pledge, when the borrower default in payment, the lender can exercise his right to sell the asset to recover the debt amount. However in hypothecation, the lender does not have the possession of goods so he can file a suit to realize his dues to take the possession first and then disposing off

Answer 3A(iv)

The license is not a lease. The lease and the license both are different. The word “License” under Section 52 of the Indian Easement Act, 1882 is a grant by one person to another or to a definite number of persons, a right to do, or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a license.

A lease of immovable property as per Section 105 of the Transfer of Property Act defined as lease of immoveable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms. Lessor, lessee, premium and rent defined.—The transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share, service or other thing to be so rendered is called the rent.

In Khalil Ahmed Bashir Ahmed v. Tufelhussein Samasbhai Sarangpurwala,1988 SCC 155, the Supreme Court has held: “In order to determine whether a document created a license or a lease the real test is to ascertain the intention of the parties i.e. whether they intended to create a license or a lease. If the document creates an interest in the property entitling the transferee to enjoyment, then it is a lease; but if it only permits another to make use of the property without exclusive possession, then it is a license.”

Question 4

  • ‘X’ filed a civil suit for eviction and possession of his property against ‘Y’, an unauthorized occupier. But the case was ‘dismissed by default’ without any hearing and not considering merits of the case by Honorable Court, due to several nonappearance of ‘X’. Now ‘X’ again wants to file another civil case before the same Court for same cause of action. Advise ‘X’.
  • A civil suit was filed without disclosing the cause of action in the Plaint and the Honorable Court rejects the Comment and advise the plaintiff for remedial measures, if any.
  • Rush Bank, a banking company, wants to take action against the defaulting borrower, being Company Secretory advise the appropriate forum to file the

 

petition. Suggest, whether THFL, and MBFC (not a banking company) can file the petition against the defaulting borrower before the same forum ? Give a reasoned reply.

  • An application for revision had been made before the Sessions Judge, can another revision be filed before High Court ? Whether application of revision can only be filed directly before the High Court ? (4 marks each)

Answer 4(a)

The principle of res judicata aims at bringing finality to the litigation. The basic principle is that a final judgement rendered by a court of competent jurisdiction is conclusive on merits as to rights of the parties and constitutes an absolute bar against subsequent action involving the same claim. The principle of resjudicata applies only under following circumstances:

  • The matter directly and substantially in issue has been directly and substantially in issue in a former suit between same parties or between whom they claim litigation under the same
  • The matter is in the court competent to try such subsequent suit or the suits in which such issue has been subsequently raised and has been heard and finally

The word former suit means suit decided prior, irrespective of the date of institution. The matter must be decided on merits i.e. the issue was alleged by one party and denied by the other.

In the present case the competent court has dismissed without any hearing i.e. the case not been heard, and also case must be decided on merits. So the principle of Res judicata does not apply, Mr. X can file a fresh suit before the competent court.

Answer 4(b)

Order 7, Rule 11 of the Code of Civil Procedure provides for rejection of plaint on the following grounds:

  • Where it does not disclose a cause of action;
  • Where the relief claimed is undervalues and the plaintiff on being required by the court to correct the valuation within a time to be fixed by the court, fails to do so;
  • Where the relief claimed is properly valued, but the plaint is written upon paper insufficiently stamped, and the plaintiff, on being required by the court to supply the requisite stamp paper within a time to be fixed by the court, fails to do so;
  • Where the suit appears from the statement in the plaint to be barred by any law;
  • Where it is not filed in duplicate;
  • Where the plaintiff fails to comply with the orders of the court that the summons are to be served on the defendants, directing the plaintiff to present as many copies of the plaint on plain paper as there are defendants within seven days from the date of such order along with requisite fee for service of summons on the

 

Further, as per Order 7, Rule 13 of the Code of Civil Procedure, the rejection of plaint on any of the grounds mentioned above, shall not of its own force preclude the plaintiff from presenting a fresh plaint in respect of same cause of action.

Therefore, the court has power to reject the plaint where it does not disclose the cause of action.

However the rejection of plaint on non-disclosure of cause of action does not of its own force bar the Plaintiff from presenting a fresh plaint. The plaintiff can present a fresh plaint.

Answer 4(c)

The Debt Recovery Tribunals have been constituted under Section 3 of the Recovery of Debts Due to Banks and Financial Institutions (RDDBFI) Act, 1993. The original aim of the Debts Recovery Tribunal was to receive claim applications from Banks and Financial Institutions against their defaulting borrowers. Debt Recovery Tribunal (DRT) was established for expeditious adjudication and recovery of debts due to banks and financial institutions in order to reduce the non-performing assets of the Banks and Financial Institutions.

DRT acts as a single judicial forum for adjudication of cases as well as execution of the decrees passed for recovery of debts due to banks and financial institutions under RDDBFI Act and Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests (SARFAESI) Act, 2002.

Hence Rush Bank can file the petition before the Debt Recovery Tribunal against the defaulting borrower.

Assuming THFL and MBFC (not a banking company) being financial institutions can also file the petition before the Debt Recovery Tribunal against the defaulting borrower.

Alternate Answer 4(c)

The Debt Recovery Tribunals have been constituted under Section 3 of the Recovery of Debts Due to Banks and Financial Institutions (RDDBFI) Act, 1993. The original aim of the Debts Recovery Tribunal was to receive claim applications from Banks and Financial Institutions against their defaulting borrowers. Debt Recovery Tribunal (DRT) was established for expeditious adjudication and recovery of debts due to banks and financial institutions in order to reduce the non-performing assets of the Banks and Financial Institutions.

DRT acts as a single judicial forum for adjudication of cases as well as execution of the decrees passed for recovery of debts due to banks and financial institutions under RDDBFI Act and Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests (SARFAESI) Act, 2002.

Hence Rush Bank can file the petition before the Debt Recovery Tribunal against the defaulting borrower.

Assuming THFL and MBFC (not a banking company) being non financial institutions can not file the petition before the Debt Recovery Tribunal against the defaulting borrower.

 

Answer 4(d)

Section 397(3) of the Code of Criminal Procedure, 1973 states that if an application under this section has been made by any person for the revision either to the High Court or to the Sessions Judge, no further application by the same person shall be entertained by the other of them.

Since the application for revision is already made before the Session Judge the same cannot be filed before the High Court.

A person can directly move a revision application to the High Court without first approaching the Session Court. But if he has already filed the application before the Session Court, he cannot thereafter approach High Court for another revision.

Question 5

  • Draft a specimen notice by Requisitionists convening an Extra-ordinary General Meeting as per annexure VII in this regard under the Companies Act,

(8 marks)

  • ‘Promoter of a company is a person who does the necessary preliminary work in connection with the formation and the establishing of the company’.

(4 marks)

  • When an urgent resolution by circulation can be initiated ? (4 marks)

Answer 5(a)

NOTICE is hereby given that the persons named below, who are Members of…………………..  (Name  of  the  Company),  having  its  Registered Office

at……………………., and who have requisitioned the convening of an Extra-Ordinary General Meeting of the Company, hereby, in exercise of the powers and rights conferred by Section 100 of the Companies Act, 2013, give Notice that the said requisitioned meetings  shall  be  held  on  ………………………… day,  the  …………………..20……, at

……………………………a.m./p.m.  at  …………………………  (address)  to  consider the

following proposal:

State the proposal

{OR

for considering and, if thought fit, passing the following Ordinary/ Special Resolution: Reproduce the Resolution}

Names of requisitionists:

  1. …………………………………
  2. …………………………………
  3. …………………………………
  4. …………………………………

Note :

A Member entitled to attend and vote at the Meeting is entitled to appoint a Proxy to

 

attend and, on a poll, to vote instead of himself and the Proxy need not be a Member of the Company. Proxies, in order to be effective, should be duly completed, stamped (if applicable) and signed and must be received at the Registered Office of the Company not less than forty-eight hours before the time fixed for the Meeting.

By Order of the Board of Directors For ………………………………….

………………………………….(Signature)

Place………………………………………………………………………………………. (Name)

Date : …………………………….20                                            Company Secretary

(ACS/FCS No……)

Further Notes:

  1. A Member entitled to attend and vote at the Meeting is entitled to appoint a Proxy to attend and, on a poll, to vote instead of himself and the Proxy need not be a Member of the Proxies, in order to be effective, should be duly completed, stamped (if applicable) and signed and must be received at the Registered Office of the Company not less than forty-eight hours before the time fixed for the Meeting.
  2. The requisition dated…………………………………………….. , referred to above,

signed by the requisite number of Members in terms of Section 100 of the Companies Act, 2013, and all documents referred to in the Notice are available for inspection by any Member at the Registered Office of the Company on any working day of the Company between the hours of 11:00 a.m. and 1:00 p.m. upto the date of this Extra-Ordinary General Meeting and at the venue of the Meeting for the duration of the Meeting.

  1. Route-map to the venue of the Meeting is

Answer 5(b)

Generally Promoter of a company is a person who does the necessary preliminary work in connection with the formation and the establishment of the company. It is promoters only who conceives an idea, develops it, formulates a scheme or project and takes all the necessary steps for the formation of a company to implement the project or the scheme.

Before the company is registered by the Registrar promoters continue to be known as promoters. They gather funds for meeting the expenses in connection with the formation of the company and spend them, which are known and designated as “preliminary expenses” and a provision is made in the articles of association of the company authorising the company and its directors to reimburse promoters the preliminary expenses incurred by them, and also a provision for the formalisation of the contracts which the promoters of the company had entered into with third parties prior to the birth of the company. Promoters usually enter into contracts with the prospective directors, solicitors, bankers, brokers, underwriters, auditors, secretary, manager and with those who offer to sell land, plant, machinery equipment etc. for implementing the proposed project. Such

 

contracts are known as “promoters’ contracts” which are not binding on the company because the company had not come into existence when they were entered into with third parties by the company’s promoters. However, as a matter of practice, the company, on its incorporation enters into fresh contracts with the third parties on the lines of the promoters’ contracts, which then become binding on the company.

Answer 5(c)

The Companies Act, 2013 requires certain business to be approved only at Meetings of the Board. However, other business that requires urgent decisions can be approved by means of Resolutions passed by circulation. Resolutions passed by circulation are deemed to be passed at a duly convened Meeting of the Board and have equal authority.

As per the secretarial standard 1 on ‘Meetings of the Board of Directors’:

  1. The Chairman of the Board or in his absence, the Managing Director or in their absence, any Director other than an Interested Director, shall decide, before the draft Resolution is circulated to all the Directors, whether the approval of the Board for a particular business shall be obtained by means of a Resolution by circulation.
  2. Where not less than one-third of the total number of Directors for the time being require the Resolution under circulation to be decided at a Meeting, the Chairman shall put the Resolution for consideration at a Meeting of the

Interested Directors shall not be excluded for the purpose of determining the above one-third of the total number of Directors.

Secretarial Standard 1 on ‘Meetings of the Board of Directors’ lists certain items of business which shall not be passed by circulation and shall be placed before the Board at its Meeting.

Question 6

  • The employees registered union of ABC , proposes to construct a temple on half acre vacant plot adjoining factory dispensary in the factory campus. The local authorities and labour welfare officer also recommended the proposal and grant NOC for the same. The managing director of the company, ‘XYZ’, asked the Company Secretary to examine it, report and if worth approving put up a draft deed for consideration of the Board. The Company Secretary recommends it on the following main terms :
    • Draft deed will be prepared by the Company and executed by the Temple Management Committee (TMC).
    • Temple will be constructed with in six
    • Annual rental of `100/- shall be payable by TMC to ABC Ltd. by the first week of January every
    • Employees will not be charged with any fees, donations etc, however may be accepted in case of
    • Proper cleanliness at all times, will be the responsibility of

 

  • Company’s authorized officers shall be allowed to inspect temple premises on a one-week time notice, and TMC will be bound to follow their
  • Jurisdiction clause will be the local jurisdiction of the ABC Ltd., in case of any Though Arbitration Clause will also be mentioned.

On the basis of the terms by the Company Secretary of ABC Ltd., you are required to draft a Deed of Grant of Land for temple in the factory premises. Assume other facts, if required.   (10 marks)

  • The date of the execution of a deed is material for the purpose of limitation and registration of the If the date is accidently missing in the deed, how do you, as a company secretary, will deal with such a situation ? Refer the relevant law on the point. (6 marks)

Answer 6(a)

This grant is made on the 1st September, 2019 between ABC Ltd (herein after called the grantor) of the one part, and Temple Management Committee (TMC) (herein after called the Grantee) of the other part;

Whereas the grantee on 1stJuly 2019 applied to the Grantor for the grant of Grantee’s land admeasuring half an acre, which is lying vacant adjoining the Company’s Dispensary in factory complex, for the purpose of building a temple thereon;

AND WHEREAS the grantor has agreed with the grantee to grant him for the said purpose the land hereby transferred belonging to the grantor on the terms and conditions hereinafter contained;

AND WHEREAS the grantee has accepted the said grant for the said purpose and on the terms and conditions hereinafter contained.

Now, THIS DEED WITNESSES’ AS FOLLOWS:-

  1. In pursuance of the aforesaid agreement and in consideration of the Grantee’s covenants hereinafter contained, and for the purpose of promoting, religion worship, the grantor hereby grants and transfers to the Grantee ALL THAT PLOT of land etc., TO HOLD THE SAME to the grantee and his Successors according to custom of Succession in the management of religious endorsements recognized by the religion professed by the Grantee for the purpose of a Temple and for no other purpose (excluding ancillary purposes) in accordance with the covenants and the provision hereinafter
  2. The Grantee hereby covenants with the grantor as follows:-
    • He will within six months from the date hereof erect a temple of the value of Rs. on the said premises and will not use the said premises for

any other purpose whatsoever.

  • If the grantee fails to erect a temple within the said period of six months, the said premises shall revert to the
  • Such temple, when erected shall be open to all human beings without any distinction of caste or creed to enter the said temple for worship and prayer and for no other

 

  • The grantee has undertaken to pay a sum of 100/- as annual rental to the grantor to be paid before first week of January every year in advance.
  • The grantee shall not charge any fee, donations from the employees of the grantor except by way of voluntary contributions for the benefit of the temple.
  • The grantee shall be bound to maintain proper cleanliness in the temple premises at all the times.
  • The grantee and his successors shall at all time hereafter keep such temple in good and substantial repair and will at his or their own cost perform all ceremonies of worship therein according to the religion professed by the
  • The grantee and his agents shall, on a prior notice of one week, permit at all reasonable times, the authorized officers of the company to examine the condition of the temple
  • If the said premises shall cease to be used for the purpose of a temple then the said premises and all buildings thereon shall revert to the
  • In case of any dispute arising out or concerning the terms of this deed, the same shall be referred to for arbitration whose decision thereon shall be final and binding on the
  • In case of any other disputes arising out of or in any way connected with this deed the same shall be  deemed to have  arisen in…………………………………… and only

courts in……… shall have jurisdiction to determine the same.

In witness whereof, etc. —-

Signed, sealed and delivered.

 

 

ABC Ltd on this          day of 2019 at           place.

GRANTOR

 

 

Temple Management Committee (TMC)

GRANTEE

 

 

 

 

Answer 6(b)

Both signed by Grantor Grantee and two witness And registered as per law.

 

The date on which the document is executed comes immediately after the description of the deed. For example, “This Deed of Mortgage made on the first day of January, 2019”. It is the date of execution which is material in a document for the purpose of application of law of limitation, maturity of period, registration of the document and passing on the title to the property as described in the document. Thus, the “date” of the document is important.

 

Date of execution of document is inscribed on the deed. The date is not strictly speaking an essential part of the deed. A deed is perfectly valid if it is undated or the date given is an impossible one, e.g. 30th day of February.

If no date is given oral evidence will always be admissible to prove the date of execution only it leaves necessary to prove it.

However, it is of great importance to know the date from which a particular deed operates. In India there is a short period of 4 months (Section 23 of Registration Act) for its registration from the date of execution within which a deed must be presented for registration. The date is important for application of law of limitation also. In view of the extreme importance of date of execution of deed it should be regarded as an essential requirement. The date of deed is the date on which parties sign or executing it. If several parties to a deed sign the deed on different dates, in such cases, the practice is to regard the last of such dates as the date of deed.

In order to avoid mistake and risk of forgery, the date should be written in both words and figures.

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