Monthly Archives: June 2014

Partition of – Joint Property

It is a settled principle of law that once a partition in the sense of division of right, title or status is proved or admitted, the presumption is that all joint property was partitioned or divided. Undoubtedly the joint and undivided family being the normal condition of a Hindu family, it is usually presumed, until the contrary is proved, that every Hindu family is joint and undivided and all its property is joint. This presumption, however, cannot be made once a partition (of status or property), whether general or partial, is shown to have taken place in a family. Kesharbai v. Tarabai Prabhakarrao Nalawade, 2014 (3) AWC 2732.

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Filed under Family Law, Joint Property

Integration/Merger of Services

Integration/merger of services means creation of a homogenous service by the merger of service personnel belonging to different services. Though it is difficult to have a perfect coalescence of the services on such merger, the principle of equivalence is to be followed while absorbing the employees, to the extent possible.
Though integration of services thus postulates equation of posts, it is not invariably necessary to prepare the seniority list on the basis of the pay drawn by the incumbent in the equated category. It is always open to the authority concerned to adopt a just and equitable principle on fixation of seniority.
Once a service is merged with another service, the merged service gets its birth in the integrated service and loses its original identity. There cannot be a situation, where even after merger, absorption or integration, such services which were merged or absorbed, still retain their original status. If so, it is not an absorption or merger or integration, it will only be a working arrangement without any functional integration. Panchraj Tiwari v. M.P. State Electricity Board, 2014 (3) AWC 2386.

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Filed under Employment Law, Integration of Services

Scope of Section 145 of Negotiable Instruments Act

Section 145(1) of the Negotiable Instruments Act gives complete freedom to the complainant either to give his evidence by way of affidavit or by way of oral evidence. The court has to accept the same even if it is given by way of an affidavit. The second part of Section 145(1) provides that the complainant’s statement on affidavit may, subject to all just exceptions, be read in evidence in any enquiry, trial or other proceedings. Section 145 is a rule of procedure which lays down the manner in which the evidence of the complainant may be recorded and once the court issues summons and the presence of the accused is secured, an option be given to the accused whether, at that stage, he would be willing to pay the amount due along with reasonable interest and if the accused is not willing to pay, the court may fix up the case at an early date and ensure day-to-day trial. Indian Bank Association v. Union of India, (2014) 5 SCC 590.

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Filed under Negotiable Instruments Act, Scope of Section 145

Advance Money – Forfeiture of

The law is clear that to justify the forfeiture of advance money being part of “earnest money” the terms of contract should be clear and explicit. Earnest money is paid or given at the time when the contract is entered into and, as a pledge for its due performance by the depositor to be forfeited in case of non-performance by the depositor. There can be converse situation also that if the seller fails to perform the contract the purchaser can also get double the amount, if it is so stipulated. It is also the law that part payment of purchase price cannot be forfeited unless it is a guarantee for the due performance of the contract. In other words, if the payment is made only towards part-payment of consideration and not intended as earnest money then the forfeiture clause will not apply. Satish Batra v. Sudhir Rawal, (2013) 1 SCC 345.

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Filed under Commercial Law, Earnest Money

Counterclaims

In State of Goa v. Praveen Enterprises, (2012) 12 SCC 581, addressing the issue pertaining to counterclaims, the Court observed as follows:
“As far as counterclaims are concerned, there is no room for ambiguity in regard to the relevant date for determining the limitation. Section 3(2)(b) of the Limitation Act, 1963 provides that in regard to a counterclaim in suits, the date on which the counterclaim is made in court shall be deemed to be the date of institution of the counterclaim. As the Limitation Act, 1963 is made applicable to arbitrations, in the case of a counterclaim by a respondent in an arbitral proceeding, the date on which the counterclaim is made before the arbitrator will be the date of institution insofar as counterclaim is concerned. There is, therefore, no need to provide a date of commencement as in the case of claims of a claimant. Section 21 of the Act is therefore not relevant for counterclaims. There is however one exception. Where the respondent against whom a claim is made, had also made a claim against the claimant and sought arbitration by serving a notice to the claimant but subsequently raises that claim as a counterclaim in the arbitration proceedings initiated by the claimant, instead of filing a separate application under Section 11 of the Act, the limitation for such counterclaim should be computed, as on the date of service of notice of such claim on the claimant and not on the date of filing of the counterclaim. Voltas Limited v. Rolta India Limited, (2014) 4 SCC 516.

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Filed under Arbitration, counterclaims

Superseded Contract –Survival of Arbitration clause

An arbitration clause in an agreement cannot survive if the agreement containing arbitration clause has been superseded/novated by a later agreement. The Hon’ble Apex Court in Union of India v. Kishori Lal Gupta and Bros., AIR 1959 SC 1362, examined the question whether an arbitration clause can be invoked in the case of a dispute under a superseded contract. The principle laid down is that if the contract is superseded by another, the arbitration clause, being a component part of the earlier contract, falls with it. But where the dispute is whether such contract is void ab initio, the arbitration clause cannot operate on those disputes, for its operative force depends upon the existence of the contract and its validity. Young Achievers, v. IMS Learning Resources Pvt. Ltd, (2013) 10 SCC 535.

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Filed under Arbitration, Superseded Contract

Power of Attorney Holder – Cannot depose in place of Principal

It is a settled legal proposition that the power-of-attorney holder cannot depose in place of the principal. The provisions of Order 3 Rules 1 and 2 CPC empower the holder of the power of attorney to “act” on behalf of the principal. The word “acts” employed therein is confined only to “acts” done by the power-of-attorney holder, in exercise of the power granted to him by virtue of the instrument. The term “acts”, would not include deposing in place and instead of the principal. In other words, if the power-of-attorney holder has preferred any “acts” in pursuance of the power of attorney, he may depose for the principal in respect of such acts, but he cannot depose for the principal for acts done by the principal, and not by him. Similarly, he cannot depose for the principal in respect of a matter as regards which, the principal is entitled to be cross-examined. S. Kesari Hanuman Goud v. Anjum Jehan, (2013) 12 SCC 64.

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Filed under Civil Law, Power of Attorney

Reasonable Doubt

In State of U.P. v. Krishna Gopal, (1988) 4 SCC 302, it was held as under:
Doubts would be called reasonable if they are free from a zest for abstract speculation. Law cannot afford any favourite other than truth. To constitute reasonable doubt, it must be free from an overemotional response. Doubts must be actual and substantial doubts as to the guilt of the accused person arising from the evidence, or from the lack of it, as opposed to mere vague apprehensions. A reasonable doubt is not an imaginary, trivial or a merely possible doubt; but a fair doubt based upon reason and common sense. It must grow out of the evidence in the case.
The concepts of probability, and the degrees of it, cannot obviously be expressed in terms of units to be mathematically enumerated as to how many of such units constitute proof beyond reasonable doubt. There is an unmistakable subject element in the evaluation of the degrees of probability and the quantum of proof. Forensic probability must, in the last analysis, rest on a robust common sense and, ultimately, on the trained intuitions of the Judge. While the protection given by the criminal process to the accused persons is not to be eroded, at the same time, uninformed legitimization of trivialities would make a mockery of administration of criminal justice. Mritunjoy Biswas v. Pranab. (2013) 12 SCC 796.

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Filed under Criminal Law, Reasonable Doubt

Reference to Arbitration

Reference to Arbitration can be in respect of all disputes between the parties or all disputes regarding a contract or in respect of specific enumerated disputes. Where “all disputes” are referred, the arbitrator has the jurisdiction to decide all disputes raised in the pleadings (both claims and counter claims) subject to any limitations placed by the arbitration agreement. Where the arbitration agreement provides that all disputes shall be settled by arbitration but excludes certain matters from arbitration, then, the arbitrator will exclude the excepted matter and decide only those disputes which are arbitrable. But where the reference to the arbitrator is to decide specific disputes enumerated by the parties/court/appointing authority, the arbitrator’s jurisdiction is circumscribed by the specific reference and the arbitrator can decide only those specific disputes.
Though an arbitration agreement generally provides for settlement of future disputes by reference to arbitration, there can be “ad hoc” arbitrations relating to existing disputes. In such cases, there is no prior arbitration agreement to refer future disputes to arbitration. After a dispute arises between the parties, they enter into an arbitration agreement to refer that specific dispute to arbitration. In such an arbitration, the arbitrator cannot enlarge the scope of arbitration by permitting either the claimant to modify or add to the claim or the respondent to make a counter claim. The arbitrator can only decide the dispute refereed to him, unless the parties again agree to refer the additional disputes/counterclaims to arbitration and authorize the arbitrator to decide them.
“Reference to arbitration” can be in respect of reference of disputes between the parties to arbitration, or may simply mean referring the parties to arbitration. State of Goa v. Praveen Enterprises, (2012) 12 SCC 581.

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