Category Archives: Civil Law

Substantial Question of Law

In Santosh Hazari v. Purushottam Tiwari, (2001) 3 SCC 179, the Hon’ble Supreme Court considered what the phrase “substantial question of law” means as under:

       “The phrase is not defined in the CivilProcedure Code. The word “substantial”, as qualifying question of law, means of having substance, essential, real, of sound worth, important or considerable.It is to be understood as something in contradistinction with technical, of no substances or consequence, or academic merely.”

       A full bench of the Hon’ble Madras HighCourt in Rimmalapudi Subba Rao v. Noony Veeraju, AIR 1951 Mad 969 observed as under:

       “When a question of law is fairly arguable, where there is room for difference of opinion or where the court thought it necessary to deal with that question at some length and discuss an alternative view, then the question would be a substantial question of law. On the other hand, if the question was practically covered by decision of highest court or if general principles to be applied in determining the question are well settled and the only question was of applying those principles to the particular fact of case, it could not be a substantial question of law.”

       It was further observed in Santosh Hazari v. Purushottam Tiwari, (2001) 3 SCC 179 as under:

       “A point of law which admits of no two opinions may be a proposition of law but cannot be a substantial question of law. To be substantial, a question of law must be debatable, not previously settled by law of the land or a binding precedent, and must have a material bearing on the decision of the case, if answered either way, in so far as the rights of the parties before it are concerned. To be a question of law involving in the case there must be first a foundation for it laid in the pleadings and the question should emerge from  the substantial findings of fact arrived at by court of facts and it must be necessary to decide that question of law for a just and proper decision of the case. An entirely new point raised for the first time before the High Court is not a question involved in the case unless it goes to the root of the matter. I twill, therefore, depend on the facts and circumstances of each case whether a question of law is a substantial one and involved in the case, or not; the paramount overall consideration being the need for striking a judicious balance between the indispensable obligation to do justice at all stages and impelling necessity of avoiding prolongation in the life of any lis.” Ajay Kumar Jaiswal v. Sanjay Kumar Jaiswal, 2018 (130) ALR408.

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Jurisdiction – Meaning of

Jurisdiction is the authority or power of the Court to deal with a matter and make an order carrying binding force in the facts. In support of judicial opinion for this view reference may be made to the Permanent Edition of “Words and Phrases” Vol. 23-A at P. 164. It would be appropriate to refer to two small passages occurring at pp. 174 and 175 of the volume. At p. 174, referring to the decision in Carlile v. National Oil & Dev. Co., 83 Okla 217 : 201 P 377 (1921), it has been stated:
“Jurisdiction is the authority to hear and determine, and in order that it may exist, the following are essential: (1) A court created by law, organized and sitting; (2) authority given to it by law to hear and determine causes of the kind in question; (3) power given to it by law to render a judgment such as it assumes to render; (4) authority over the parties to the case if the judgment is to bind them personally as a judgment in personam, which is acquired over the plaintiff by his appearance and submission of the matter to the court, and is acquired over the defendant by his voluntary appearance, or by service of process on him; (5) authority over the thing adjudicated upon its being located within the court’s territory, and by actually seizing it if liable to be carried away; (6) authority to decide the question involved, which is acquired by the question being submitted to it by the parties for decision.” State of Jharkhand v. Hindustan Construction Company Ltd., (2018) 2 SCC 602.

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Charitable – Meaning of

Black’s Law Dictionary, 9th Edition defines “charitable”, “charitable purpose”, “charitable corporation” and “Charitable trust” thus:

“charitable, adj. (1) Dedicated to a general purpose, usually for the benefit of needy people who cannot pay for the benefits received.”

“Charitable Purpose.—The purpose for which an organization must be formed so that it qualifies as a charitable organization under the Internal Revenue Code.—Also termed charitable use.”

“Charitable Corporation.—A non-profit corporation that is dedicated to benevolent purposes and thus entitled to special tax status under the Internal Revenue Code.—Also termed eleemosynary corporation.”

“Charitable Trust.—A trust created to benefit a specific charity, specified charities, or the general public rather than a private individual or entity. Charitable Trusts are often eligible for a favourable tax treatment. If the Trust’s terms do not specify a charity or a particular charitable purpose, a court may select a charity.—Also termed public trust; charitable use.”

In Webster’s New World Dictionary, the expressions “charitable” and “charity” are defined thus:

“Charitable.—1. Kind and generous in giving money or other help to those in need.

  1. of or for charity.
  2. Kindly in judging others; lenient.

Charity.—1. In Christianity, the love of God for man or of man for his fellow men. 2. An act of goodwill or affection. 3. The feeling of goodwill; benevolence. 4. The quality of being kind or lenient in judging others. 5. A giving of money or other help to those in need; benefaction. 6. An institution, organization, or fund for giving help to those in need.”

In Incorporated Council of Law Reporting for England and Wales v. Attorney General, (1971) 3 WLR 853, it was observed that when a purpose has been proved to be of general public welfare or beneficial to the community, it will be held to be charitable unless there is some reason for holding that it is not within the spirit and intendment of the Preamble.

In Jones v. Williams, 27 ER 422, it was held thus: “Charity to be a gift to a general public use, which may extend to the poor as well as to the rich. It embraces all that is usually understood by the words “benevolence”, “Philanthropy” and “good will”. A gift to a home for the friendless is a gift to charity. Union of India v. Moolchand Khairati Ram Trust, (2018) 8 SCC 321.

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No Right to Forfeit the Sum – In the Absence of Forfeiture Clause

A right to forfeit being a contractual right and penal in nature, the parties to a contract must agree to stipulate a term in the contract in that behalf. A fortioti, if there is no stipulation in the contract of forfeiture, there is no such right available to the party to forfeit the same.

The learned author Sir Kim Lewison in his book The Interpretation of Contracts (6th Edn.) while dealing with the subject “Penalties, Termination and Forfeiture Clauses in the Contract” explained the meaning of the expression “forfeiture” in these words:

“A forfeiture clause is a clause which brings an interest to a premature end by reason of a breach of covenant or condition, and the court will penetrate the disguise of a forfeiture clause dressed up to look like something else. A forfeiture clause is not to be construed strictly, but is to receive a fair construction.”

In Doe D Davis v. Elsam, 1828 M&M189 : 173 ER 1126, Lord Tenterden held as under, :

“I do not think provisos of this sort are to be construed with the strictness of conditions at common law. These are matters of contract between the parties, and should, in my opinion, be construed as other contracts.”

Equally well settled principle of law relating to contract is that a party to the contract can insist for performance of only those terms/conditions, which are part of the contract. Likewise, a party to the contract has no right to unilaterally “alter” the terms and conditions of the contract and nor they have a right to “add” any additional terms/conditions in the contract unless both the parties agree to add/alter any such terms/conditions in the contract.

Similarly, if any party adds any additional terms/conditions in the contract without the consent of the other contracting party then such addition is not binding on the other party. Similarly, a party, which adds any such term/condition, has no right to insist on the other party to comply with such additional terms/conditions and nor such party has a right to cancel the contract on the ground that the other party has failed to comply with such additional terms/conditions. Suresh Kumar Wadhwa v. State of M.P., (2017) 16 SCC 757.

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Pure Question of Law – Can be Raised at Any Stage

The importance of pleading in a legal proceeding, particularly in a writ petition, cannot be overstated. It is true that if facts on which a party wants to rely are not properly articulated, it has the effect of taking the other side by surprise. But law also recognizes an exception to this rule in respect of an issue relating to a point of law. The reason for making a departure for such issues based on pure questions of law is not very far to seek. When a party to a proceeding makes a factual statement that has either to be controverted or admitted or otherwise dealt with by the opposite side. In either case facts involved in a case do not emerge on their own nor can they be taken cognizance of unless specially pleaded.

But a point of law emerges from the facts pleaded. A court can also take into cognizance legal issues arising out of the factual conspectus of the case without necessarily requiring the parties to plead the same separately. The consistent judicial pronouncements on the issue make it clear that even without a formal pleading, a point of law can be taken into cognizance and adjudicated upon by a court if no denial on fact is necessary. A party is not entitled to rely on a point of law, he can also take it even before the highest court for the first time. A pure question of law can be urged at any point of time before any forum provided it does not require any further adjudication of any disputed fact.

Hon’ble Apex Court in State of Madras v. K.M. Rajagopalan, AIR 1955 SC 817, had recognized this principle decades ago. Since then there has not been any deviation from this axiomatic principle. In Ariane Orgachem Private Ltd. v. Wyeth Employees Union, 2015 (145) FLR 985, the Hon’ble Supreme Court observed that a pure question of law for which no enquiry or proof is required can be raised at any stage. In fact, in that case the Hon’ble Supreme Court allowed a plea based on a point of law to be taken for the first time before the Supreme Court itself. Kolkata Municipal Corporation v. Union of India, 2018 (158) FLR 535.

 

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Term “Interlocutory Order” – Meaning of

In Mohan Lal Magan Lal Thacker v. State of Gujarat, AIR 1968 SC 733 it was held as under:

“The term interlocutory order is a term of well known legal significance and does not present any serious difficulty. It has been used in various statutes including the Code of Civil Procedure, Letters Patent of the High Courts and other like Statutes. In Webster’s New World Dictionary “interlocutory” has been defined as an order other than final decision. Decided cases have laid down that interlocutory orders to be appealable must be those which decide the right and liabilities of the parties concerning a particular aspect. The term interlocutory order in Section 397 (2) of the CRPC has been used in a restricted sense and not in any broad or artistic sense. It merely denotes orders of a purely interim or temporary nature which do not decide or touch the important rights or the liabilities of the parties. Any order which substantially affects the rights of the accused, or decides certain rights of the parties cannot be said to be an interlocutory order so as to bar a revision to the High Court against that order. Yogish Arora v. Smt. Jennette Yogish Arora, 2018 (129) ALR 339.

 

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Principle of – Business Efficacy

A commercial document cannot be interpreted in a manner to arrive at a complete variance with what may originally have been the intendment of the parties. Such a situation can only be contemplated when the implied term can be considered necessary to lend efficacy to the terms of the contract. If the contract is capable of interpretation on its plain meaning with regard to the true intention of the parties it will not be prudent to read implied terms on the understanding of a party, or by the court, with regard to business efficacy as observed in Satya Jain v. Anis Ahmed Rushdie, (2013) 8 SCC 131, as follows:
“The principle of business efficacy is normally invoked to read a term in an agreement or contract so as to achieve the result or the consequence intended by the parties acting as prudent businessmen. Business efficacy means the power to produce intended results. The classic test of business efficacy was proposed by Bowen, L.J. in Moorcock, (1889) LR 14 PD 64 (CA). This test requires that a term can only be implied if it is necessary to give business efficacy to the contract to avoid such a failure of consideration that the parties cannot as reasonable businessmen have intended. But only the most limited term should then be implied—the bare minimum to achieve this goal. If the contract makes business sense without the term, the courts will not imply the same. In Moorcock, (1889) LR 14 PD 64 (CA), it was held as under:
“In business transactions such as this, what the law desires to effect by the implication is to give such business efficacy to the transaction as must have been intended at all events by both the parties who are businessmen; not to impose on one side all the perils of the transaction, or to emancipate one side from all the chances of failure, but to make each party promise in law as much, at all events, as it must have been in the contemplation of both parties that he should be responsible for in respect of those perils or chances. Transmission Corporation of Andhra Pradesh Ltd. v. GMR Vemagiri Power Generation Ltd., (2018) 3 SCC 716.

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