Solved June 2010 General & Commercial Laws Paper Ans.

1 (a) The Indian Constitution, though primarily federal in form, contains a strong unitary bias. Exercise of the numerous powers given to the Center by the Constitution gives it the unitary structure. Which features predominate depends upon circumstances and the prevailing situations. Ordinarily, it retains its federal features, but in times of emergencies like war or political instability, it converts into the unitary structure. The Indian Constitution has proclaimed India as a Union of States, i.e. a federation. Let us examine both these featuresFederal features of the Constitution A federal system is one where the powers and duties are divided between a unified central authority and the different states of the nation. Items of national importance like defence, railways, post and telegraph, foreign affairs, citizenship etc. are included in the Union list and items of regional or local importance like agriculture, law and order, health etc are placed in the State list. Both Union and State govern the items in the Concurrent list like succession, transfer of property, education etc. This division of powers is made concrete by inclusion in the Constitution (Seventh Schedule). The features of a federal system as present in India are Governance at both state and center level. Division of work into Union, State and Concurrent lists Allowing individual states to make their own internal laws Supremacy of the constitution, i.e. the Union and the State Governments function well within the limits defined in the Constitution. The authority of the Court in matters of conflict between states and Union, or in matters of interpretation of the Constitution. Unitary features of the Constitution A unitary system is one where the powers and functions are centralized. In India, this happens in times of emergencies, when the Union can make rules in relation to state matters also. The features of a unitary system as present in India are a. To give directions to the States regarding how the matters in the State lists are to be concluded. b. Power to legislate regarding some matters contained in the State List Taking over powers of state governance in emergencies. The States cannot secede from the Union

Single citizenship Unified judiciary and public services Union can create new states by altering boundaries of existing states Hence, it can safely be termed that the Constitution of India is both unitary and federal. i.e. quasi-federal in nature. We could say that though federal in structure, the Indian Constitution is unitary at the core. 1. (b) The writ jurisdiction of the High Courts and the Supreme Court coincide at some points, but they are different in some key aspects. Under Article 226 of the Constitution, the High Court has the power to issue not only writs of certiorari, prohibition and mandamus, but also other writs, directions and orders. The Indian High Court has jurisdiction to issue necessary directions and orders to ensure justice and equity. Moreover, this right is not restricted, but spreads to administrative action and judicial or quasi-judicial action also. When the Supreme Court issues writs under Article 32 of the Constitution, they are mainly for the enforcement of fundamental rights mentioned in the Constitution itself. The Madras High Court held in Aditanar Educational Institution v. Assistant Director of Income-tax (297 I.T.R. 376) that the relief under Article 226 of the Constitution of India can be granted in spite of the availability of alternate remedy under the statute, only based on undisputed facts. When the High Court finds that factual disputes are involved, it would not be desirable to deal with them in a writ petition. Under Article 32, a writ is preferred in case there is no other recourse available. 1. (c) The Mischief Rule or the Heydons Rule According to this rule, when we interpret statutes, we need to consider some facts - what was the rule pertaining to the subject matter before the current statute was made - what was the mischief or wrong that the common law did not cover till then, so that need for a special law was felt - the solution established by the new statute and the motive behind it.

(i)

These principles were established by Lord Coke in the famous case of Sir John Heydon. It was decided that when the literal meaning of the words of a statute is obscured, then seeking the mischief which the act seeks to correct or mitigate would help in its interpretation. Hence, following the Mischief Rule, one can easily gain the intention of the statute, thus giving effect to its original objective.

2. (i) As per Section 13 of the Transfer of Property Act, 1882, transfer of property to an unborn person can only take place if before such a transfer; a life estate is transferred to a person existing at the date of transfer. Moreover, it should not be a partial interest, but the entire interest that is transferred to the unborn. The vesting of absolute interest in favour of an unborn person may be postponed until he attains full age. Such an unborn person should get full rights to that property, and no further rights can be created to that property after those of the unborn. 2. (ii) The Doctrine of Lis Pendens asserts that while a suit is pending, a property, which is the subject matter of the suit, cannot be transferred. If it is transferred, then the transferee would acquire the property subject to the decision of the suit (Section 52 of the Transfer of Property Act, 1882). The important points to be kept in mind in this regard are - Only suits in Indian courts would operate as Lis Pendens, not those filed or ongoing in foreign courts. - It must not be a vexatious suit. - It should relate to the immovable property in question. - The subsequent transfer must be with regard to rights that might be affected by the outcome of the pending suit. 2. (iii) The cyber offences are described in Section 43 of Chapter IX titled Penalties and Adjudication of the Information Technology Act, 2000. Chapter XI (Section 65-78) mentions the offences related to cyber crimes, i.e. crimes related with computers. They are as under and are caused if anyone does the following acts with reference to a computer, computer system or computer network in an unauthorized manner, without permission of the relevant authority who controls the resource - If someone hacks into a computer resource.

- If the information contained in the resource is accessed without permission, and copied or altered in any way. - If the resource is infected with a computer virus or bug. - If the resource or its functioning is disordered in any way, or it is damaged in any way, either by altering the settings or programmes or in any other manner. - If the regular and authorized users are denied entry into or access to the resource. - If aid is provided to anyone for doing any of the above-mentioned acts. - If someone pays or hires someone to do any of the above-mentioned works. All of these offences are punishable with a maximum penalty to pay damages upto rupees one crore. 2. (iv) The following instruments are to be compulsorily registered - Instruments that make a gift of immovable property. - Any instrument that creates or alters any right in or to immovable property, where the value involved is of more than hundred rupees. - Receipts for sum paid for creation or alteration of any right in or to immovable property, where the value involved is of more than hundred rupees. The effects of non-registration of documents that require registration are detailed in Section 49 of The Registration Act, 1908. It provides for the following effects - The document cannot cause any changes in the rights to or interest in any immovable property. - It will not be admitted as evidence of any transaction mentioned in the document, as per the Indian Evidence Act, 1872. Any document covered under Section 17, if not registered, will not have the same effect as it would have had if it had been registered. 2. (v) Section 35 of the Indian Stamp Act, 1899 covers instruments not duly stamped, whereas Chapter IV (Sections 35-48) gives the consequences in case an instrument is not duly stamped. It provides the following - An instrument insufficiently stamped will not be admitted as evidence or recognized as valid by any government official unless it is duly stamped.

- It can, subsequently, be stamped with stamps of proper amount, and be rendered duly stamped according to the Indian Stamp Act, 1899. - An agreement or contract that is made up of various parts contained in separate letters would be deemed to be properly stamped if any one part of all the documents bears stamps of proper description and value. - The exclusion of insufficiently stamped instruments shall not apply to criminal proceedings. - The Collector of Stamps can be presented with such an instrument and the proper stamp duty paid on it, so that it becomes a proper and valid instrument. 3. (i) A summons case is one that is punishable with imprisonment upto and including two years. The procedure for the trial of these cases is as per Chapter XX of the Code of Criminal Procedure, 1973. They normally relate to minor offences, and are heard or resolved not through the normal route but using the summary procedure. This remains, as of today, the judges discretionary power though. Warrant cases are those punishable with an imprisonment of more than two years or with a life sentence or a death sentence. Chapter XIX of the Code of Criminal Procedure, 1973, covers the trial of warrant cases.
3. (ii) All the offences included in the list of bailable given in the First Schedule of the Code of Criminal Procedure are termed as bailable. Other acts can also provide for bailable offences. These are relatively non-serious offences, against which an individual can be let off on bail. All bailable offences are noncognizable, i.e. no arrests can be made for such offences unless a warrant has been issued for that purpose. Non-bailable offences are those that are not included in the First Schedule of the Code of Criminal Procedure. These are cognizable; arrest can be afforded without a warrant. In this list are included all serious offences.

3. (iii) Battery - Battery implies the unlawful beating of another. It includes every willful, angry, violent or negligent touching of another's person or clothes, or anything attached to his person or held by him. Assault It is a threatened or attempted physical attack by someone who appears to be able to cause bodily harm if not stopped. An assault is any unlawful attempt or offer with force or violence to do a corporal hurt to

another, whether from malice or wantonness; for example, by striking at him or even holding up the fist at him in a threatening or insulting manner, or with other circumstances as denote at the time. It indicates an intention, coupled with a present ability, of actual violence against his person, as by pointing a weapon at him when he is within reach of it. 3. (iv) In the concept of contingent interest, the transferee is required to fulfil some condition so that the transfer can be perfected. The condition can be a condition precedent or a condition subsequent. A condition precedent is one that needs to be fulfilled before the transfer of interest can take place. For example, A asks B to marry C, then only he will transfer some land to him. The marriage is a condition precedent, essential for the transfer of interest to take place. The transfer itself is contingent on Bs acceptance of the condition. A condition subsequent is one that has to be followed even after the transfer has taken place. For example, A transfers land to B subject to the condition that if he cuts the trees on that land, it will revert back to A. 3. (v) Primary evidence as per the Indian Evidence Act, 1872 means the very document itself, not a copy of it. The provision of primary evidence is based on the Best Evidence principle, i.e. if there is better evidence available, then that must be provided. If the person capable of providing superior evidence supplies an inferior one, it creates an unfavorable stance against him. (Section 62) Secondary evidence means certified or compared copies of, or counterparts of, or oral accounts of documents. (Section 63) According to Section 65 of the Act, where primary evidence can be provided, secondary evidence should not be used. It should only be given where the original document is not available because it has been lost or destroyed, or it is otherwise unavailable because it cannot easily be moved because of bulk, or because it is under the control of some public authoritys control. 4. (i) Under Section 16 of the Information Technology Act, 2000, the Central Government has been given the responsibility to provide for a procedure for assuring the security of electronic records. Accordingly, it has

prescribed the usage of digital signatures for verification of electronic records. The digital signature ensures that the record cannot be created by a spurious source, as without the signature being attached to a document, it cannot be said to be created by an authorized source. Moreover, since the authorized person can use the digital signature only after getting it registered with the Certifying Authority established under the Act, it is safe to presume that any document having the signature is secure. The Act prescribes the appointment of an adjudicating officer for deciding on cases that come under the Information Technology Act. He has the right to decide on matters like the occurrence of offences, amount of penalty or compensation to be paid by the wrongdoer, the corrective actins required etc. 4. (ii) An arbitral award can be set-aside on application to the High Court having jurisdiction, and any civil court of an inferior grade. This has been provided under Section 34 of the Arbitration and Conciliation Act, 1996. The grounds based on which an application under this section can be filed are as follow o Invalid or unacceptable arbitration agreement o Incapacity of parties o Improper notice of arbitration proceedings o Inability in presenting a proper case to the arbitral authority o Award not according to the terms of reference o Improperly constituted arbitral tribunal o Proceedings not as per agreement o Award against the public policy of India o Matter of dispute not capable of being the subject matter of arbitration The application for setting aside an award has to be made within three months of receiving the award. If there is a previous application for correction or interpretation of the award already pending, the time would be counted from the date of disposal of that application. This period can be extended on proof of sufficient cause for not presenting the application being evident. 4. (iii) Preventive Relief implies the issue of an injunction to stop a person from doing something that he should not be doing. It is contained in Part III

of the Specific Relief Act, 1963. Specific relief being a discretionary remedy, it depends upon the judgment of the Court. Section 36 under this part provides for both temporary and perpetual injunctions. Temporary injunctions are for stopping the person for a short duration of time specified in the order, for example, when the suit is pending or yet to be decided. They are provided under Order 39 of the Code of Civil Procedure, 1908. These can be dissolved at sufficient cause being proven by the defendant. Alternatively, these will terminate at the final decision regarding the suit being passed by the Court. Permanent injunctions, on the other hand, are covered under Section 38 of the Specific Relief Act. These are passed to uphold the plaintiffs right arising from a contract. A perpetual injunction, often a permanent injunction, is a relief available to the plaintiff only at the conclusion of the trial. This type of injunction would be granted when the conditions that necessitated the injunction in the first place continue and are proved to be of a permanent nature. It is ordered using the final judgment.
4. (iv) Rectification of an instrument means removing the apparent mistakes or errors. This is covered under Section 26 of the Specific Relief Act, 1963. It is to be done with the permission of the Registrar. The purpose of rectification of instruments is to give effect to the real intention of the parties to the contract that is represented by the instrument. If the error is formal in nature, it can be rectified with the Registrars permission, who gives sufficient time to do the needful. The guiding principle here is that the parties should be placed in the positions they would have been in had the error not occurred. 4. (v) Specific Performance implies the enforcement of a contract in its exact and pre-determined terms, by way of a court order or injunction. It is used when no other relief would suffice to provide relief to the aggrieved.

The principles on which courts may grant specific performance The principles on which courts may grant specific performance are as defined in Section 10 of the Specific Relief Act, 1963, and are as under (i) If damages can better address the harm to the plaintiff by the wrong committed, specific performance will not be ordered. (ii) Both the parties will be bound by it, i.e. irrespective of which party files a suit, if specific performance is ordered by the court in

(iii)

response to the suit by one party, it will be the same if the other files a suit. Specific relief is a discretionary power and the courts will also see whether it is a type of contract that can be brought within this Act or not.

5. (a) Since the instrument is made out of India and presented for registration after four months, it may not be accepted for registration. Section 26 of The Registration Act, 1908 provides that an instrument made out of India may be presented for registration in India within four months of it having reached India. If it is not so presented, the Registrar has the right to refuse registration. 5. (b) (i) (d) 5. (b) (ii) (c) 5. (b) (iii) (d) 5. (b) (iv) (d) 5. (b) (v) (d) 5. (c) (i) Section 38 5. (c) (ii) cognizable offences. 5. (c) (iii)imprisonment upto three years or with fine or with both. 5. (c) (iv)dependants unable to maintain themselves (spouse, children both legitimate and illegitimate and parents). 5. (c) (v) the High Court. 6. (i) Correct. When the states refer the matter to the Union or when in a state of emergency. 6. (ii) Correct. This happens when the state Assembly is unable to function properly. 6. (iii) Correct. As per the RTI Act, subject to certain provisions. 6. (iv) Correct. According to Section 8 of the RTI Act. 6. (v) Correct. In the cases of vicarious liability. 6. (vi) Correct. As per Sections 10, 11, 12 of the Code of Civil Procedure. 6. (vii) Correct. As per the definitions given in Sections 2(2) and 2(14) of the Code of Civil Procedure. 6. (viii) Correct. As per Section 4 of the Code of Civil Procedure.

7. (a) Any document covered under Section 17, if not registered, will not have the same effect as it would have had if it had been registered. However, under Section 53A of the Transfer of Property Act, 1882, an unregistered document may be admitted as evidence in a case where the document is proof of part performance of a contract, and a proof also of the fact that the plaintiff has performed or is willing to perform his part of the deal. Hence, Ashok will not succeed. 7. (b) One cannot approbate and reprobate at the same time. This is the main theme of the Doctrine of Election covered under Section 35 of the Transfer of Property Act, 1882. This doctrine is based upon the principle that anyone taking over some benefit has to shoulder the responsibilities coming with it too; he cannot just choose to take the benefit and reject the rest of the contract. Election implies choice. As per Section 35 of the Transfer of Property Act, 1882, if a person is given a property by a deed, and asked to transfer another property to a third party by the same deed, he is to choose either to accept both the transactions or to reject both. This implies that a person cannot choose just a benefit; he has to bear the burden that goes along with it. If suppose the third party who was promised something under the deed is not given the property, the original transferor has to compensate him for his distress or disappointment. Hence the heirs of Kamal have to compensate Manoj for his loss. 7. (c) According to Section 12 of this Act, specific performance of a part of a contract shall not normally be ordered. The section, however, contains some exceptions as laid down in sub-sections 2 to 4. These are as follows - When the part of the contract that is left unperformed is comparatively a smaller portion as compared to the part that is performed, then part performance is ordered. For the leftover part, compensation is deemed to be adequate relief. - When the party has done some portion of the work desired, and the leftover portion cannot be done, then the other party will pay an amount as reduced by the consideration for the non- performed part.

Another alternative could be that the party pays the entire sum and relinquishes all rights to the balance work left. - When the contract is such which has two portions: one that can be specifically performed and another that cannot, the court can order one portion to be specifically performed. For example, if A promised to sell two houses, X and Y to B, but before the date of the transaction being completed, house Y got destroyed, the court can orer A to hand over house X to B. Here, 50 bighas are a substantial part of the contract. So, instead of Alok, Vimal can demand specific performance of the contract by paying the entire consideration of Rupees ten lakhs. 8. (a) The Doctrine of Constructive Res Judicata has been provided in Section 11 of the Code of Civil Procedure, 1908. It prevents further suits being filed for a matter that is at the core of a former suit. The reasons are as below

The same party should not be troubled with the same matter again and again. There should be a limit to the number of cases filed in a court, i.e. vexatious cases should not be entertained. The same matter should not be used for wasting valuable court time repeatedly.

The basic requirement for applying this doctrine is that the matter that is at the core of the former suit should also be the main essence of the latter suit(s). In this case, the two suits are filed by Chandan in two different capacities. Hence, the second suit is not barred.

8. (b) This case is covered by Rule 2 (Order 2) of the CPC, which provides that in a previous suit filed by the plaintiff, the entire claim which he is desirous of obtaining should be included. If it is not so done, inclusion of the claims left out in the previous plaint will not be allowed in a second plaint filed by the same party against the same defendant. Hence, the second suit filed by Mohan against Sohan and Rohan is not to be allowed. 8. (c) As pr Section 122 of the Indian Evidence Act, there are certain facts of which evidence cannot be given. It includes communications between

husband and wife during marriage private and unbreachable. The intention is to prevent domestic concord being disrupted. In this case, Kamini gave the information to Ajay in 2001, but they got married in 2002. Hence, Ajay can give evidence and disclose the communication made to him by Kamini.