CRIMINAL MATTERS

Essential Elements of Crime:

✓ Human Being: The criminal act
must have done by any human
being. In ancient time, some
evidences of
the trial and punishment of animals
are found, but with the
development of the concept of
Mens rea,
the trial and punishment of animals
were stopped because animals
cannot form criminal intention.
The
first element requires that the act
must be committed by a human
being and he must be under legal
obligation and should be fit subject
for award of appropriate
punishment.
✓ Mens Rea- There can be no
crime of any nature without an evil
mind every crime requires a
mental
element. “Actus non facit reum
nisi mens sit rea” is considered a
fundamental principle of penal
liability.
It means the act itself does not
make a man guilty unless his
intention were so.
✓ Actus rea- The third essential
element of a crime is actus rea. In
other word some act or illegal
omission
must take place in pursuance of the
guilty intention.
✓ Injury to Human being – The
fourth requirement of crime is
injury to other person or to the
society at
large. The injury should be
illegally caused to any person in
body mind reputation or property.
Definition of Crime: – In general
term crime is the wrong affecting
the whole society which is
declared to be
prohibited and punishable by the
law.
According to Blackstone: - Crime
is an act committed or omitted in
violation of a public law either
forbidding
or commanding it.
According to Stephen: - Crime is
an act forbidden by law and which
is at the same time revolting to the
moral sentiments of the society.
According to Kenny: - Crimes are
wrongs whose sanction is punitive
and is in no way remissible by any
private person but is remissible by
crown alone if remissible at all.
According to definition given in
Section 40 of I.P.C.: - Offence
denotes a thing made punishable
by Indian
penal code or by any special or
local law.
With the analysis of these
definition, following elements of
crime emerges –
a) A human being under legal
obligation.
a) What is crime?

Definition of Crime-In general term crime is the wrong affecting the whole society which is declared to
be prohibited and punishable by the law. However, there is no precise definition of crime because if the
changing nature of crime. It is an outcome of dynamic criminal and penal policy of a state. Some of the
scholars have defined the term crime as-

According to Blackstone- Crime is an act committed or omitted in violation of a public law either
forbidding or commanding it.

According to Stephen - Crime is an act forbidden by law and which is at the same time revolting to the
moral sentiments of the society.
According to Kenny - Crimes are wrongs whose sanction is punitive and is in no way remissible by any
private person but is remissible by crown alone if remissible at all.

According to definition given in Section 40 of I.P.C.- Offence denotes a thing made punishable by
Indian penal code or by any special or local law.

With the analysis of these definitions, following elements of crime emerges – A human being under legal
obligation.

b) His act should be done with

criminal intention or Mens rea.
c) In furtherance of Mens rea he
would have committed any act or
omission constituting an offence.
d) Such act must have caused
injury to the society
 A human being under legal obligation.
 His act should be done with criminal intention or Mens rea.
 In furtherance of Mens rea he would have committed any act or omission constituting an offence.
 Such act must have caused injury to the society

Essential Elements of Crime:

✓ Human Being: The criminal act
must have done by any human
being. In ancient time, some
evidences of
the trial and punishment of animals
are found, but with the
development of the concept of
Mens rea,
the trial and punishment of animals
were stopped because animals
cannot form criminal intention.
The
first element requires that the act
must be committed by a human
being and he must be under legal
obligation and should be fit subject
for award of appropriate
punishment.
✓ Mens Rea- There can be no
crime of any nature without an evil
mind every crime requires a
mental
element. “Actus non facit reum
nisi mens sit rea” is considered a
fundamental principle of penal
liability.
It means the act itself does not
make a man guilty unless his
intention were so.
✓ Actus rea- The third essential
element of a crime is actus rea. In
other word some act or illegal
omission
must take place in pursuance of the
guilty intention.
✓ Injury to Human being – The
fourth requirement of crime is
injury to other person or to the
society at
large. The injury should be
illegally caused to any person in
body mind reputation or property.
➢ Applicability of Mens Rea in
Indian Penal code – In Indian
penal code the term mens rea is
nowhere used but
it has been included in two way.
1. In chapter of General exception
such circumstances are included
where in the absence of Mens rea
no criminal liability arises.
2. While defining offences in
I.P.C. words denoting mens rea has
been included as an essential part
of
offence such as. Voluntarily
Intentionally Dishonestly
Fraudulently knowingly rashly
negligently etc.
➢ Mens rea and statutory
offences – The principle of mens
rea is applied in statutory offences.
In Sherras v. De Rutzen it was held
that “in every statute mens rea is to
be applied unless the
contrary is shown R. Vs. Prince
1875 case is an important case on
mens rea. In this case Prince was
charged
of kidnapping a given below 16
years age he pleaded that the
thought that she was above 16 year
but this
defence was not accepted because
his act was wrong in itself. But in
R. Vs. Tolson 1889 jury accepted
the
defence of reasonable belief. In
this case Mrs. Tolson was accused
that he married during the
existence of
her first marriage with Mr. Tolson
Mrs. Tolson pleaded that she
married to other person only after
information that my husband was
not alive.
In state of Maharashtra Vs M.H.
George 1965 S.C. held that unless
the statute expressly or impliedly
excludes mens rea as a constituent
part of a crime a person should not
be found guilty of an offence
unless
his mind is guilty.
➢ Exception – There are some
exception where mens rea is not
required.
a) In strict liability
b) Public Nuisance
c) Kidnapping
d) Contempt of court
e) Acts which are prohibited as
penal but in real sense they are not
criminal
f) Bigamy
Essential Elements of Crime:

 Human Being- The criminal act must have done by any human being. In ancient time, some
evidences of the trial and punishment of animals are found, but with the development of the
concept of Mens rea, the trial and punishment of animals were stopped because animals cannot
form criminal intention. The first element requires that the act must be committed by a human
being and he must be under legal obligation and should be fit subject for award of appropriate
punishment.
 Mens Rea- There can be no crime of any nature without an evil mind every crime requires a
mental element. “Actus non facit reum nisi mens sit rea” is considered a fundamental principle of
penal liability. It means the act itself does not make a man guilty unless his intentions were so.
 Actus Rea- The third essential element of a crime is actus rea. In other word some act or illegal
omission must take place in pursuance of the guilty intention.
  Injury to Human being - The fourth requirement of crime is injury to other person or to the
society at large. The injury should be illegally caused to any person in body, mind, reputation or
property.

Stage in Crime - If a person

commits a crime voluntarily the
doing of it involves four stages.
These four
stages are-
1. Intention
2. Preparation
3. Attempt
4. Commission of Crime
1. Intention – It is the first stage in
the commission of a crime but only
intention to commit offence is not
punishable because it is very
difficult to prove the guilty
intention of a man. It was observed
by an
English judge that the thought of a
man is not triable because deril
himself knoweth not the thought of
a
man. Therefore, so long as an act
of a person rests in his intention no
criminal liability arises. According
to Salmond the aim keeping which
in mind an act is done is called
intention.
2. Preparation – Preparation is the
second stage in the commission of
a crime. It means to arrange means
or measures necessary for the
commission of the intended
criminal act generally the stage of
preparation is not punishable
because it is not necessary that
whosoever makes the preparation
will
actually commit the offence also.
In Noorbibi Vs. State 1952 the
accused without proper permission
was going towards the
border with the object of stepping
into Pakistani territory and was
arrested before reaching the border
she was not punished. It was held
that she was only at the stage of
preparation.
Under the I.P.C. mere preparation
to commit the following offences
is punishable as these
are considered to be grave
offences.
i. Preparation to wage was against
the government section 122
ii. Preparation to commit
depredation on territories of power
at peace with government of India
Sec.
126
iii. Preparation to commit dacoity
(399)
iv. Preparation of counterfeiting of
coins or government stamps (233,
234, 235, 256, 257)
3. Attempt – This is the third stage
of crime attempt has not been
defined in the Indian Penal code.
The term
however means the direct
movement towards the
commission of crime after
necessary preparations have
been made. Attempt was defined
by supreme court in Abhyanand
Mishra Vs. State of Bihar AIR
1961.
 It was held that a person commits
the offence of attempt when his
intention is to commit any
offence and with that intention he
takes any step towards the
commission of the offence but
even after
doing all the necessary acts by
the accused it could not reach
the intended consequence due to
the
circumstances out of his control.
➢ There are three essentials of
attempt-
✓ Guilty intention to commit an
offence.
✓ Some act done towards the
commission of the crime.
b) What is meant by mens rea (guilty mind) and why it is important in criminal matter?

Definition of Mens Rea- In general Mens rea means some blameworthy mental condition, the absence of
which on any particular occasion negates the condition of crime. An act becomes criminal only when
done with guilty mind. However, requisite guilty state of mind varies from crime to crime. For instance,
in case of murder- it is the intent to cause death, in case of theft- an intention to steal, in case of stolen
property-knowledge that the goods were stolen etc.

Importance of doctrine of mens rea in criminal matter-

The object of the law is always to punish a person with the guilty mind. It does not want to put behind the
bars an innocent person who may have had the misfortune of being involved in an incident and event,
which he did not have the intention of participating in. that is why many penal statues while defining the
offence bring in the mental element to the act by using the words like-intentionally, dishonestly,
voluntarily, knowingly etc. the object is that punishment should fit the offender and merely the offence.

In case of Ravule Hariprasad Rao V. State 1951 SCR 322, the Supreme Court ruled that unless a statue
either clearly or by necessary implication rules out mens rea as a constituent element of the crime, a
person should not be held guilty of an offence unless he had guilty mind at the time of commission of the
act.

Applicability of Mens Rea in Indian Penal code – In Indian penal code the term mens rea is nowhere
used but it has been included in two way.

 In Chapter IV on General Exceptions (Section 76 to 106) such circumstances are included where
in the absence of Mens rea no criminal liability arises.
 While defining offences in I.P.C. words denoting mens rea has been included as an essential part
of offence such as. Voluntarily, Intentionally, Dishonestly, Fraudulently, Knowingly, Rashly,
Negligently etc.

Mens rea and statutory offences – The principle of mens rea is applied in statutory offences.

In Sherras v. De Rutzen it was held that “in every statute mens rea is to be applied unless the contrary is
shown. In R. Vs. Prince 1875 case Prince was charged of kidnapping a given below 16 years age he
pleaded that the thought that she was above 16 year but this defence was not accepted because his act was
wrong in itself. But in R. Vs. Tolson 1889 jury accepted the defence of reasonable belief. In this case
Mrs. Tolson was accused that he married during the existence of her first marriage with Mr. Tolson Mrs.
Tolson pleaded that she married to other person only after information that my husband was not alive.

In state of Maharashtra Vs M.H. George 1965 S.C. held that unless the statute expressly or impliedly
excludes mens rea as a constituent part of a crime a person should not be found guilty of an offence
unless his mind is guilty.

Exceptions– There are some exception where mens rea is not required.

 In strict liability
 Public Nuisance
 Kidnapping
 Contempt of court
 Acts which are prohibited as penal but in real sense they are not criminal
 Bigamy

Burden of proof ( Sec 101 IEA)-

 Presumption of innocence until proved guilty

 Onus of proving the guilt is on party making the assertion.
 Generally the burden does not shift. However, when a clause for presumption of mens rea exists
in the statue the burden is shifted from the prosecution to the accused.
 The prosecution only has to prove that the accused has committed certain acts.
 Proving the existence of mens rea by direct and positive evidence is difficult. In Soni Vallabhdas
V Asst. Collect of Customs AIR 1965 SC 481 it was held that it is not necessary for the
prosecution to prove the mens rea by positive evidence.
 It is open to the prosecution to prove the guilty mind of the accused by the general conduct of the
accused.( Hukma V State of Rajasthan AIR 1965 SC 476 )

c) What is meant by common intention?

d) S 34 Penal Code
e) > “When a criminal act is
done by several persons, in
 f) furtherance
g)i
h) of the common intention of
all, each of such
i) persons is liable for that act
in the same manner as if the
j) act were done by him alone.”
In offence involving more than one person, a very important question to be considered is as to the liability
of various persons participating in the offence, especially when they have committed different acts in the
course of committing the same offence.

The provision of IPC, which deals with the principle of joint liability in cases where different persons
share a common intention, is covered by Sec 34 as follows-

Sec 34 IPC-Acts done by several persons in furtherance of common intention.-When a criminal act is
done by several persons in furtherance of the common intention of all, each of such persons is liable for
that act in the same manner as if it were done by him alone

Sec 33 IPC-“Act”, “Omission”.-The word “act” denotes as well a series of acts as a single act: the word
“omission” denotes as well a series of omissions as a single omission.

It is clear from sec 34 and sec 33, that the term criminal act refers to more than a single act or omission
and would cover an entire series of acts or omission as the case maybe.

Essential ingredients of section 34-

 a criminal act must be done by several persons

 the criminal act must be to further the common intention of all
 there must be participation of all persons in furthering the common intention
 - ‘Criminal act’ that is ‘done
by several persons’ in s 34
 does not refer to actual crime
done.

 - Illustration
 > If A and B fired at a victim,
A hitting him and B failing
 to hit him, it is not correct to
say that the criminal act is
 the killing of the victim
which was done by one person
 only.

 - Barendra Kumar Ghosh v
Emperor
 > Privy Council defined
‘criminal act’ as unity of
criminal
 behaviour, which results in
something, for which an
 individual would be
punishable, if it were done by
himself
 alone.

 - Therefore, the ‘criminal act’
refers to all the acts done
 by the persons involved
which cumulatively result in the
 criminal offence in question.
The acts committed by the
 different parties in the
criminal action may be different
 but all must in one way or
other participate and engage
 in the criminal enterprise.
1. ‘Criminal act’ that is ‘done by several persons’ in s 34 does not refer to actual crime done.
Illustration -If A and B fired at a victim, A hitting him and B failing to hit him, it is not correct to
say that the criminal act is the killing of the victim which was done by one person only.

Barendra Kumar Ghosh v Emperor

 Privy Council defined ‘criminal act’ as unity of criminal behaviour, which results in something,
for which an individual would be punishable, if it were done by himself alone.
 ‘Criminal act’ refers to all the acts done by the persons involved which cumulatively result in the
criminal offence in question. The acts committed by the different parties in the criminal action
may be different but all must in one way or other participates and engages in the criminal
enterprise.

2. ‘Common intention’ refers to the common design for two or more persons acting together to do
the physical act which comprises the offence. This may be different than the ingredient of
intention that is a fault element found in Penal Code.
Illustration- A and B decided to beat V to death. The fault element required to convert this
criminal act into the offense of murder is the intention to cause death. However, there is the more
immediate ‘intention’ in the mind of A and B to perform the physical acts of beating. It is this
‘intention’ to do the physical act which is encompassed by the phrase ‘common intention’ in s 34.
Hence, it is possible for s 34 to apply to offences which require knowledge as a fault element.

Bashir v State

 ‘Common intention’ is the common design of two or more persons acting together. It is more akin
to motive or object.
  It is remoter than the intention with which each act included in the criminal act is done; it is what
the persons jointly decide to achieve.
 It is the reason or object for doing all the acts forming the criminal act.
 In some cases, the intention which is an ingredient of an offence, may be identical with the
common intention of the conspirators but it would still be separate from, or in addition to the
common intention and not merge in it.
 Common intention’ that was held to imply a ‘pre-arranged plan’ does not mean either that there
should be a discussion and agreement.

3. Participation-
 Initially, physical presence is required, but not anymore.
 For the principals, their physical presence is required. For secondary parties, their physical
presence is not required as long as they have participated to a sufficient degree such that he or she
is deemed to be as blameworthy as the principal offender.
 The reason for not requiring physical presence in order to show participation is that modern
technological advances permit assistance to be given from afar

Sabarudin bin Non v PP, Gopal Sri Ram JCA “Presence in every case is not necessary for s 34
to apply. S 34 should be interpreted having regard to modern technological advances. The early
decisions that held presence to be essential for s 34 were handed down at a time when modes of
communication were not as advanced as today. It would, in our judgement, be a perversion of
justice if we are required to cling on to an interpretation of the section made at a time when
science was at very early stage of development.”

4. Act done in furtherance of the common intention

i. Collateral offence ‘consistent with’ common intention - The parties are only required to have
the common intention to do a particular criminal act which ultimately leads to an offence being
committed in furtherance of that common intention.

Wong Mimi v PP

 If A and B form a common intention to cause injury to C with a knife and A holds C while B
stabs C deliberately in the region of the heart and the stab wound is sufficient in the ordinary
course of nature to cause death, B is clearly guilty of murder.
  Applying s 34 it is also clear that B’s act in stabbing C is in furtherance of the common intention
to cause injury to C with a knife because B’s act is clearly consistent with the carrying out of that
common intention and as their ’criminal act’, i.e. that unity of criminal behaviour, resulted in the
criminal offense of murder punishable under s 302. A is also guilty of murder.
 Under this wide approach, the only requirement is that the actual offence, for which all the
participants are to be held liable, must be ‘consistent’ with the common intention of the parties.

ii. Collateral offence ‘intended’ by secondary party - A person is required to have the intention to
commit the collateral offence in common with the person or persons who actually committed it.
Unless this is proved, he or she cannot be liable for the collateral offence even though it was
committed in order to accomplish some other objective shared in common.

R v Vincent Banka

 The court held there must exist a common intention to commit the crime actually committed, and
it is not sufficient that there should merely be a common intention to ‘behave criminally’.
 The two accused in that case set out to commit robbery and in the process murder was committed.
 The evidence was inconclusive as to which of them inflicted the fatal wound or who carried the
knife.
 It was held that there must be a common intention between the robbers not merely to commit
robbery but, if necessary, to kill the deceased.
 Since there was no express agreement between them that a knife should be carried or that the
victim should be stabbed, the court convicted them of robbery and acquitted them of murder.
 The effect of this approach is that the prosecution is required to prove that the secondary party
possessed the fault element for the actual offence charged.

iii. Actual foresight by the secondary party

R v Powell

 Three men went to a drug dealer to buy drugs and the drug dealer was shot dead.
 It could not be proved by the prosecution which of the three men fired the shot which killed the
drug dealer, but it was argued that the two appellants before the court should be found guilty of
murder even if the third man fired the shot because they knew that the third man was armed with
a gun and realised that he might use it to kill.
  Lord Hutton opined that ‘it is sufficient to found a conviction for murder for a secondary party to
have realised that in the course of the joint enterprise the primary party might kill with intent to
do so or with intent to cause grievous bodily harm.
 It held that participation in a joint criminal enterprise with foresight of the collateral offence as a
possible incident of that enterprise should be sufficient to impose criminal liability for that
offense carried out by another participant.
 Liability for the collateral crime is therefore imposed even though it could be outside of the
parties’ joint enterprise because it was foreseen and the accused willingly took the risk of it
materialising.

d) What is meant by arrest? (law, rights and obligations)

Definition of Arrest- Generally, a person who works against or has done something against the laws, get
arrested. In its ordinary sense the term “arrest” means the apprehension or restraint or the deprivation of
one’s personal liberty. Criminal procedure Code, 1973 in its chapter V (section 41 to 60) deals with
Arrest of a person. However, Code has not defined the term “Arrest” anywhere.

Who can arrest?

 Arrest by police officer can be made without warrant only in cognizable offences and with
warrant in non- cognizable offence.(Sec 41)
 Arrest by police in case person has committed or accused of committing non- cognizable offence
refuses, to give his name or residence or gives a name or residence which such officer has reason
to believe to be false. (Sec 42)
 Any private individual may arrest any person who in his presence commits a non-bailable offence
and cognizable offences, or any proclaimed offender.(sec. 43).
 Any magistrate (whether Executive or judicial) may arrest a person without a warrant, who
commits offence within his local jurisdiction (sec. 44).

How arrest is made?

 In making an arrest the police officer /other person making the same actually touches or confines
the body of the person to be arrested unless there be a submission to custody by words or action.
Provided where woman is to be arrested, unless circumstances otherwise required or unless police
officer is female, the police officer shall not touch the woman for making her arrest.(Sec 46 (1))
  The person making an arrest may use ‘all means’ necessary to make arrest if person to be arrested
resists or attempts to evade the arrest.(sec 46(2))
 No woman should be arrested after sunset and before sunshine, and where exceptional
circumstances exist, the woman police officer must take prior permission of JMFC within whose
jurisdiction offence is committed or arrest is to be made.(sec46(4))
 A police officer may, for the purpose of arresting without warrant any person whom is authorized
to arrest, pursue such person into any place in India.(sec 48)
 Arrested person shall not be subjected to unnecessary restraint and physical inconvenience unless
it’s necessary to do so to prevent his escape (sec. 49).

Rights of an arrested person-

 Right to know the grounds of arrest

 Article- 22(1) of the Indian Constitution stipulates that no police official can arrest any
individual without informing the accused the reason/ ground of his detainment/ arrest.
 Section- 50 of CrPC says that every police official with authority to arrest someone
without a warrant must inform the person getting arrested about the crime for which he is
arrested and other relevant grounds for the arrest. This is the duty of the police official
which he cannot refuse.
 Section- 50A of CrPC makes it compulsory for the person/ police official arresting a
person to inform of the arrest to any of his relatives or such other persons as may be
notified by the arrested person.
 Section- 55 of CrPC states that in situations where a police official authorises his
subordinate to arrest a person without a warrant, such officer must notify the person to be
arrested the substance of the order and if required shall show him the order.
 Section- 75 of CrPC states that the police official executing the warrant must notify the
substance to the arrested person and furnish the warrant of the arrest when required.
 Right to be produced before the Magistrate without unnecessary delay-
 Article- 22(2) of the Indian Constitution stipulates that the police official making an
arrest must produce the arrested person before the Magistrate within 24 hours of the
arrest failing to do so would make him liable for wrongful detention.
 Section- 57 of CrPC states that in case a police official is making an arrest without a
warrant, then he must produce the person arrested without any delay before the
Magistrate’s court within 24 hours of his arrest, exclusive of the time necessary for the
journey from the place of arrest to the Magistrate’s Court.
  Section- 76 of CrPC states that the police officer or other person executing a warrant of
arrest shall bring the arrested person in court within 24 hours of his arrest, the same must
exclude the time duration which is required for the journey from the place of arrest to the
Magistrate Court.

 Right to be released on bail

 Section- 50 (2) of CrPC provides that the arrested person has the right to get released on
bail by making arrangement for the sureties or just inform him of his right when arrested
without a warrant for an offence other than a non-cognizable offence.

 Right to consult a Lawyer

 Article- 22 (1) of the Indian Constitution provides that every arrested person has the right
to choose and elect his own lawyer to defend him in the court of law for whatever crime
he may/ may not have committed.
 Section- 41D of CrPC provides that when any person is arrested and interrogated by the
police, he shall be entitled to meet an advocate of his choice during interrogation, though
not throughout interrogation.
 Section- 303 of CrPC allows every accused person the right to be defended by a lawyer
of his choice even if the criminal proceedings against him have already begun.

 Right to free legal aid

 Article- 39A The government in an effort towards securing justice instituted Article- 39A
to provide free legal aid to people in need. The same right was reaffirmed in the dispute
of Khatri v/s Bihar, where the court held that, “the state must provide free legal aid to
the poverty- stricken accused person”. The same right to free legal aid is provided at the
first instance of production of the accused before the Magistrate in the court.
 Section- 304 of CrPC provides a very significant right to every accused who is set to
appear before a Sessions Court to appoint him a lawyer (totally free of cost) at the
expense of the State. The court may appoint him a representing lawyer if the accused has
no sufficient means to appoint himself a lawyer for his case then.

 Right to keep quiet –

 Article- 20(2) provides that no person whether accused or not cannot be compelled to be
a witness against himself. This act of exposing oneself is the principle of self-
 incrimination. This principle was affirmed in the case of Nandini Satpathy v/s P.L.
Dani, where the court observed that, “No person can force any other person to furnish
any statement or compel to answer any question because the accused person has a right to
keep quiet during his interrogation”.

Case laws-

 In D.K. Basu Vs State of West Bengal, the Hon'ble Supreme Court, has laid down specific
guidelines required to be followed while making arrests-
 The police personnel carrying out the arrestshould bear accurate, visible and clear
identification and name tags with their designations.
 The police officer carrying out the arrest shall prepare a memo of arrest at the time of
arrest-containing name of the arrestee, time and date of arrest and attested by witness.
 The person arrested must be made aware of his right to have someone informed of his
arrest or detention as soon as he is put under arrest or is detained.
 An entry must be made in the diary at the place of detention regarding the arrest of the
person which shall also disclosed the name of the next friend of the person who has been
informed of the arrest and the names land particulars of the police officials in whose
custody the arrestee is.
 Copies of all the documents including the memo of arrest, referred to above, should be
sent to the Magistrate for his record.
 A police control room should be provided at all district and State headquarters where
information regarding the arrest and the place of custody of the arrestee shall be
communicated by the officer causing the arrest, within 12 hours of effecting the arrest
and at the police control room it should be displayed on a conspicuous notice board.

 In Prem Shukla v/s Delhi Administration, the court observed that “the prisoners/ arrested
persons have a right to not be handcuffed in shackles unless and until some extraordinary
circumstances arise during the arrest or when in custody”.

d) What is preventive detention?

Definition of preventive detention –

 There is no authoritative definition of the term “preventive detention” in Indian law.

  Preventive detention means detention of a person without trial and conviction by a court, but
merely on suspicion in the mind of an executive authority.
 Preventive detention is fundamentally different from imprisonment after trial and conviction in a
criminal court. In conviction, an accused is sought to be punished for a past act. In preventive
detention a person is detained without trial in the subjective satisfaction of the executive.

It is an anticipatory measure and does not relate to an offence while criminal proceedings are to punish a
person for an offence committed by him. (Alijan Mja V. District Magistrate, Dhanbad AIR 1983, SC
1130)

The object of Preventive Detention is not to Punish but to intercept to prevent the Detenu from doing
something prejudicial to the State. The satisfaction of the concerned authority is a subjective satisfaction
in such a manner. (Ankul Chandra Pradhan Vs. Union of India, AIR 1997, SC 2814)

Sec 151 of CrPC provides for arrest by police officer to prevent the commission of cognizable offence
as-

1) A police officer knowing of a design to commit any cognizable offence may arrest, without
orders from a Magistrate and without a warrant, the person so designing, if it appears to such
officer that the commission of the offence cannot be otherwise prevented.
2) No person arrested under Sub-Section (1) shall be detained in custody for a period exceeding
twenty-four hours from the time of his arrest unless his further detention is required or authorised
under any other provisions of this Code or of any other law for the time being in force.

In the case of Ahmed Noormohmad Bhatti V. State of Gujarat, AIR 2005, Supreme Court while
upholding the validity of the power of the Police under section 151 of Criminal Procedure Code 1973 to
arrest and detention of a person, without a warrant, to prevent commission of a Cognizable offence, ruled
that a provision could not be held to be unreasonable as arbitrary and therefore unconstitutional merely
because the Police official might abuse his authority.

Constitutional safeguard against misuse of preventive detention-

The Article 22 of the Indian Constitution provides safeguards against the misuse of police powers to
make arrests and detentions-

 A person may be taken to preventive custody only for 3 months at the first instance. If the period
of detention is extended beyond 3 months, the case must be referred to an Advisory Board
consisting of persons with qualifications for appointment as judges of High Courts. It is implicit,
 that the period of detention may be extended beyond 3 months, only on approval by the Advisory
Board.
 The detainee is entitled to know the grounds of his detention. The state, however, may refuse to
divulge the grounds of detention if it is in the public interest to do so..
 The detaining authorities must give the detainee earliest opportunities for making representation
against the detention.

By virtue of being placed under Chapter III of the Constitution, the above constitute fundamental rights
against arbitrary detention. Any law which contravenes any of the above Constitutional safeguards in
Article 22(4) to (7) can be declared void by the Courts.

CORPORATE MATTER

a) Proprietorship (definition, compliance required under the law to be a proprietor)

Definition- Sole proprietorship is defined as a business enterprise exclusively owned, managed and
controlled by a single person with all authority, responsibility and risk.

Features of sole proprietorship-

 Easy formation:-A sole proprietorship business is easy to form where no legal formality involved
in setting up this type of organization. It is not governed by any specific law. It is simply
required that the business activity should be lawful and should comply with the rules and
regulations laid down by local authorities.
 Better Control-In sole proprietary organisation, all the decisions relating to business operations
are taken by one person, which makes functioning of business simple and easy.
 Sole beneficiary of profits- The sole proprietor is the only person to whom the profits belong.
 Inexpensive Management- The sole proprietor does not appoint any specialists for various
functions. He personally supervises various activities and can avoid wastage in the business

There is no formal procedure in India to register a sole proprietorship, as a sole proprietorship is

considered to be an extension of the Proprietor. Therefore, the existence of a sole proprietorship business
can be established only through opening a bank account in the name of the proprietorship firm or
obtaining licenses required for conducting the business.

b) Partnership Firm (definition, compliance required under the law to be a partnership firm)
Definition- "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. 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". (Sec 4)

Indian Partnership Act allows a firm to be formed and executed by entering into Partnership Agreement.
Further, it provides types of Partnership Firm as Unregistered Partnership Firm or Registered Partnership
Firm. The registration of partnership firm is preferable as the unregistered Partnership Firm cannot sue
the third party or contracting party and vice-versa.

Preparation and Execution of Partnership Deed-

The Partnership Deed shall contain the covenants such as the name and business place of the firm,
business activities to be carried on, the contribution and profit sharing ratio of the Partners or any other
conditions required.

Payment of Stamp Duty and Notary-

The Partnership Deed prepared shall be executed by the payment of stamp duty as applicable in
accordance with the respective state law. One may either opt for execution on non-judicial paper or
franking i.e. payment of stamp duty from banking channel. Subsequently the deed shall be notarised after
providing the signature of all partners along with witnesses to agreement.

Registration of Partnership Firm with RoF-

The registration of a firm effected by sending by post or delivering to the Registrar of the area in which
any place of business of the firm is situated or proposed to be situated, a statement in the prescribed form
and accompanied by the prescribed fee and a true copy of the deed of partnership stating-

 the firm-name
 the nature of business of the firm
 the place or principal place of business of the firm,
 the names of any other places where the firm carries on business,
 the date when each partner joined the firm,
 the names in full and permanent addresses of the partners, and
 the duration of the firm. The statement shall be signed by all the partners, or by their agents
specially authorised in this behalf.
 c) LLP (definition, compliance required under the law to be an LLP)

As per sec 3 A limited liability partnership is a body corporate formed and incorporated under this Act
and is a legal entity separate from that of its partners. A limited liability partnership shall have perpetual
succession. Any change in the partners of a limited liability partnership shall not affect the existence,
rights or liabilities of the limited liability partnership.

Every limited liability partnership shall have either the words "limited liability partnership" or the
acronym "LLP" as the last words of its name.(Sec15)

Provisions of the Indian Partnership Act, 1932 (9 of 1932) shall not apply to a limited liability
partnership. (Sec 4)

Incorporation of LLP-

Basic requirments-

 Minimum 2 Partners (individuals, companies or LLPs)(Sec6)

 Minimum 2 Designated Partners (Sec.7- only individuals) one of them should be a resident in
India
 Incase of Company / LLP being a Partner, Nomination / authorization required

Partners- Persons who own the LLP and manage it. Designated partners - Responsible for compliance
under the LLP Act

For a limited liability partnership to be incorporated (Sec 11),Limited Liability Partnership Rules, 2009
(Form 2)-

 two or more persons associated for carrying on a lawful business with a view to profit shall
subscribe their names to an incorporation document.
 the incorporation document shall be filed in such manner and with such fees, as may be
prescribed with the Registrar of the State in which the registered office of the limited liability
partnership is to be situated.
 a statement by Company Secretary or a Chartered Accountant or a Cost Accountant, who is
engaged in the formation of the limited liability partnership and by any one who subscribed his
name to the incorporation document, that all the requirements of this Act and the rules made
thereunder have been complied with.

Registration of LLP (Sec12)-

When the requirements imposed in section 11 have been complied with, the registrar register the
incorporation document and give certificate that the limited liability partnership is incorporated by the
name specified therein.

d) Company (definition, compliance required under the law to be a Company)

Definition of Company-An association or an organization which is incorporated under the

companies act of 2013 or under any previous company law; is called a company. It is an artificial
person created by law.(Sec20)

Stages In Formation Of Company In India-

i. Promotion
ii. Incorporation
Public company having share capital has to undergo 2 additional stages:-
iii. Subscription of capital
iv. Commencement of business

Promotion-

 It involves conceiving a business opportunity and taking an initiative towards the direction of
formation of company
 The person or the persons who undertake the responsibility to bring the company into existence
are called promoters.
 The promoter brings together the men, materials, machinery, managerial abilities and financial
resources, prepare necessary document and set the organization going.

Incorporation-(Sec7) An application is to be filed with the Registrar of Companies of the state within
whose jurisdiction the registered office of a company is proposed to be situated. The application for
registration must be accompanied with following documents and information-

 the memorandum and articles of the company signed by all the subscribers.
 a declaration in the prescribed form by an advocate, a chartered accountant, cost accountant or
company secretary in practice, who is engaged in the formation of the company, and by a person
named in the articles as a director, manager or secretary of the company, that all the requirements
of this Act and the rules made thereunder in respect of registration and matters precedent or
incidental thereto have been complied with.
  the address for correspondence till its registered office is established.
 particulars of every subscriber to the memorandum along with proof of identity
 particulars of the persons mentioned in the articles as the first directors of the company, also their
interest in other company if any.
 After registration the registrar issue a certificate of incorporation and allot a corporate identity
number to the company

Subscription stage-

A public company can raise the required funds from the public by means of issue of shares and
debentures. For doing the same, it has to issue a prospectus which is an invitation to the public to
subscribe to the capital of the company and undergo various other formalities. The following steps are
required for raising funds from the public

 SEBI Approval: SEBI (Securities and Exchange Board of India) which is the regulatory authority
in our country has issued guidelines for the disclosure of information and investor protection.(Sec
24)
 Filing of prospectus-A prospectus is any document described or issued as a prospectus including
any notice, circular, advertisement or other document inviting deposits from the pubic or inviting
offers from the public for the subscription or purchase of any shares or debentures of, a body
corporate.(Sec 25)
 Minimum Subscription: In order to prevent companies from commencing business with
inadequate resources, it has been provided that the company must receive applications for a
certain minimum number of shares before going ahead with the allotment of shares.( Sec 39)

Commencement of business-

If the amount of minimum subscription is raised through new issue of shares, a public company applies to
the Registrar of Companies for the issue of Certificate of Commencement of Business. The Registrar
shall examine the documents and if found satisfactory, Certificate of Commencement of Business will be
issued.

e) One Person Company

As per Sec 2 (62) one person company means a company which has only one person as a member.
Sec 3 classifies OPC as a private company for all the legal purposes with only one member. All the
provisions related to the private company are applicable to an OPC, unless otherwise expressly excluded.

As per rule 3(1) of the Companies (Incorporation) Rules 2014, only a natural person who is an Indian
Citizen and resident in India shall be eligible to Incorporate/form an OPC. Indian resident means who has
stayed in India for a period of not less than 182 days during the immediately preceding one calendar year.

As per rule 4 of The Companies (Incorporation) Rules 2014-Memorandum of OPC should mention the
name of the nominee by the OPC subscriber with the Registrar in Form No. INC.2. The consent of his
nominee is to be filed in form no. INC.3

Features of OPC (refer sec3 and rule3)-

 OPC has only one person as a member/shareholder.

 OPC can be registered only as a Private company.
 OPC may be either a company limited by share or a company limited by guarantee or an
unlimited company.
 An OPC requires that it must have a minimum of one Director the sole shareholder can himself
be the sole Director. The company may have a maximum of 15 directors (As per the companies
act, if nothing is mentioned in the incorporation document, it would be assumed that the sole
shareholder shall also be the sole director in the OPC and which shall be particularly the case in
most OPC incorporated).
 The person forming the OPC has to nominate a Nominee.
 The words “one person company” should b mentioned below the name of the company, wherever
the name is affixed, used or engraved.
 No person shall be eligible to incorporate more than a One Person Company
 No minor shall become member or nominee of the One Person Company or can hold share with
beneficial interest.
 Such Company cannot be incorporated or converted into a company under section 8 of the Act.
 Such Company cannot carry out Non-Banking Financial Investment activities including
investment in securities of any body corporates.

f) What is small company, MSME?

Definition of Small Company-

As per Companies Act, 2013 under section 2(85), a Small company means a company, other than a
public company, —

 paid-up share capital of which does not exceed fifty lakh rupees or such higher amount as may be
prescribed which shall not be more than ten crore rupees; and
 turnover of which, as per profit and loss account for the immediately preceding financial year,
does not exceed two crore rupees or such higher amount as may be prescribed which shall not be
more than one hundred crore rupees:
Provided that nothing in this clause shall apply to—
 a holding company or a subsidiary company;
 a company registered under section 8; or
 a company or body corporate governed by any special Act;

Advantages for Small Company-

Board Meetings- Two meetings in a financial is just sufficient for a small company. Any private limited
company which is not considered as the small company shall conduct four board meetings in a financial
year. ( Sec 173(5))

Annual Return-The annual return filing can be signed by a company secretary or a director of the small
company. Any private limited company which is not considered as a small company shall sign its annual
return filing by a director and a company secretary both. ( Sec 92)

Cash flow statement- Any private limited company comes under the category of a small company shall
not maintain a cash flow statement as a part of the financial statement. On the contrary, any private
limited company does not come under the category of a small company then it is mandatory to prepare a
Cash flow statement as a part of the financial statement. (Sec 40)

Auditors Rotation- Any private limited company falls in a small company’s category do not require to
rotate auditors. But private limited company not classified as a small company must rotate auditors every
5 to 10 years. (Section 139(2) read with Rule 5 of the Companies (Audit and Auditors) Rules, 2014).

Small company is a special status given to companies registered under Indian Companies Act, 2013 due
to its scope of business, measured in terms of capital and turnover. To claim the status of the small
company, it does not need to register a company in India; rather a company already registered and
fulfilling provided conditions is known as a small company.
 g) Section 08 Company (Charitable Company)

As per Sec 8 (1) of the Companies Act, 2013, where it is proved to the satisfaction of the Central
Government that a person or an association of persons proposed to be registered under this Act as a
limited company:

 has in its objects the promotion of commerce, art, science, sports, education, research, social
welfare, religion, charity, protection of environment or any such other object;
 intends to apply its profits, if any, or other income in promoting its objects; and
 intends to prohibit the payment of any dividend to its members,

the Central Government* may, by license issued in such manner as may be prescribed, and on such
conditions as it deems fit, allow that person or association of persons to be registered as a limited
company under this section without the addition to its name of the word “Limited”, or as the case may be,
the words “Private Limited”, and thereupon the Registrar of Companies (RoC) shall, on application, in
the prescribed form, register such person or association of persons as a company under this section.

Features of Section 8 Companies-

 Members of such company don’t give any dividend.

 Such company can’t be treated as small company.
 Any profit or income of such company shall be used only for the promotion of its objects.
 A special license is required for its incorporation.
 Such company cannot be converted into one person company
 No minimum share capital required for such company.
 Articles of Association (AoA) of such company shall be amended only with the prior approval of
Central Government i.e. RoC.
 Such company shall amalgamate only with another company registered under section 8 of the Act
and having similar objects.
 it enjoys all the privileges and subject to all the obligations of limited companies.

h) What is shares, dividend and equity?

Sec 2(84) share means a share in the share capital of a company and includes stock
Sec 44 provides for nature of shares or debentures-The shares or debentures or other interest of any
member in a company shall be movable property transferable in the manner provided by the articles of the
company.

In Borland’s Trustee v Steel Bros & Co. Ltd. court stated shares represent the interest of a shareholder
in the company measure by a sum of money for the purpose of liability in the first place and the interest
in the second place but also consisting of a series of mutual covenants (agreement to be bound by
constitution by members ) entered into by all the shareholders inter se

Sec 46-Share certificate is prima facie evidence of the title of a member in a company to the number
of shares specified in the certificate.

Shares with same rights in all aspects are considered shares of same class. Company should state clearly
in Constitution to accommodate different classes of shares and their voting rights.

Kinds of share capital/share-

According to Section 43 of the Companies Act, 2013, the share capital of a company is of two types:

1. Preferential Share Capital

2. Equity Share Capital

Preferential Share Capital-

The preferential share capital is that part of the Issued share capital of the company carrying a preferential
right for:

 Dividend Payment – A fixed amount or amount calculated at a fixed rate. This might/might not
be subject to income tax.
 Repayment – In case of a winding up or repayment of the amount of paid-up share capital, there
is a preferential right to the payment of any fixed premium or premium on any fixed scale. The
Memorandum or Articles of the company specifies the same.

Equity Share Capital-

All share capital which is NOT preferential share capital is Equity Share Capital. Equity shares are of two
types:

 With voting rights

 With differential rights to voting, dividends, etc. in accordance with the rules.

Deeming of Capital as Preferential Capital-

In certain cases, capital is deemed as preferential capital even though it is entitled to either or both of the
following rights:

 For dividends, apart from the preferential rights to amounts specified above, it can participate
(fully or to a certain extent) with capital not entitled to the preferential rights.
 In case of a winding up, apart from the preferential right of the capital amounts specified above, it
can participate (fully or to a certain extent), with capital not entitled to preferential rights in any
surplus remaining after repaying the entire capital.

Dividend-

Dividend can be defined as the sum of money paid by a company, to its shareholders, out of the profits
made by a company

 Dividend includes any interim dividend. sec 2(35)

 A company may, if so authorised by its articles, pay dividends in proportion to the amount paid-
up on each share. (Sec 51)

Under the Companies Act, 2013,Section 123 to 127 of Chapter VIII deals with the provisions related to
the declaration and payment of dividend. It is read with Companies (Declaration and Payment of
Dividend) Rules, 2014.).

Source for payment of Dividend (sec123)- Dividend can be paid out of Followings mentioned below-

 Profit of the current year after providing of the depreciation;

 Profit of the previous financial year or years after providing for depreciation for previous years;
 Out of the money provided by Central or State Government for payment of dividend in pursuance
of guarantee given by that, if any.

Where, owing to inadequacy or absence of profits in any financial year, any company proposes to declare
dividend out of the accumulated profits earned by it in previous years and transferred by the company to
the reserves, such declaration of dividend shall not be made except in accordance with Rule 3 of
Companies (Declaration and Payment of Dividend) Rules, 2014.)

Provided no dividend shall be declared or paid by a company from its reserves other than free reserves:

Provided also that no company shall declare dividend unless carried over previous losses and depreciation
not provided in previous year or years are set off against profit of the company for the current year.

Equity-
Equity is the amount of capital invested or owned by the owner of a company. The equity is evaluated by
the difference between liabilities and assets recorded on the balance sheet of a company. The worthiness
of equity is based on the present share price or a value regulated by the valuation professionals or
investors. This account is also known as owners or stockholders or shareholders equity.

Equity Formula-

The accounting equation is Assets – Liabilities = Equity

Market Value of Equity-

The market value of Equity is the total market value of all the outstanding stocks of a company. Here, the
outstanding stock/share are the shares that are owned by the shareholders, investors, etc., of a company.
Market Value of Equity is evaluated by multiplying the current market price per stock by the total number
of the organisation’s outstanding stocks.

i) Definition of Micro, Small & Medium Enterprises-

In accordance with the Sec 7 of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006
the Micro, Small and Medium Enterprises (MSME) are classified in two categories-

a. Manufacturing Enterprises-

The enterprises engaged in the manufacture or production of goods pertaining to any industry specified in
the first schedule to the industries (Development and regulation) Act, 1951). The Manufacturing
Enterprises are defined in terms of investment in Plant & Machinery.

b. Service Enterprises-

The enterprises engaged in providing or rendering of services and defined in terms of investment in
equipment.

The limit for investment in plant and machinery for manufacturing and in equipment for rendering service
enterprises are as under-

Enterprises engaged in the manufacture or production of goods pertaining to any industry -

Micro Enterprises -Does not exceed 25 lakh rupees

Small Enterprises -More than 25 lakh rupees but does not exceed 5 crore rupees
Medium Enterprises -More than 5 crore rupees but does not exceed 10crore rupees

Enterprises engaged in providing or rendering of services-

Micro Enterprises -Does not exceed 10 lakh rupees:

Small Enterprises -More than 10 lakh rupees but does not exceed 2 crore rupees

Medium Enterprises -More than 2 crore rupees but does not exceed 5 core rupees

Registration of Micro, Small and Medium Enterprises Mandatory-

Registration of the micro or small or medium enterprises is replaced with the filling of Memorandum. The
Registration of micro or small enterprises (both manufacturing and rendering of service) or medium
enterprise engaged in providing or rendering of services is important but discretionary or optional.
However, a medium enterprise engaged in the manufacture or production of goods has to compulsorily
register under the Act. (Sec 8)

j) What is subsidiary company, holding company?

As per Section 2(46) of the Companies Act, 2013 “holding company”, in relation to one or more other
companies, means a company of which such companies are subsidiary companies;

As per Section 2(87) of the Companies Act, 2013 ‘‘subsidiary company’’ or ‘‘subsidiary’’, in relation to
any other company (that is to say the holding company), means a company in which the holding
company-

i. controls the composition of the Board of Directors; or

ii. exercises or controls more than one-half of the total voting power either at its own or together
with one or more of its subsidiary companies:
Provided that such class or classes of holding companies as may be prescribed shall not have
layers of subsidiaries beyond such numbers as may be prescribed.

Explanation-For the purposes of this clause,—

  control referred in above section can also be of of another subsidiary company of the holding
company.
 the composition of a company‘s Board of Directors shall be deemed to be controlled by another
company if that other company by exercise of some power exercisable by it at its discretion can
appoint or remove all or a majority of the directors.
 the expression company includes any body corporate.
 layer in relation to a holding company means its subsidiary or subsidiaries

Layer of subsidiary-

 Section 186(1) of the act specifies that a company should not invest in more than two layers of
investment companies.
 the Central Government has also enacted “the Companies (Restriction on Number of Layers)
Rules, 2017
 As per rule wholly owned subsidiary company would not be taken in account as a separate layer.
 Banking company, non-banking financial company, insurance company, Government Company
are outside the scope of above rule.