Category Archives: Civil Law

Essentials of an Agreement – To qualify as a mortgage

The essentials of an agreement, to qualify as a mortgage by conditional sale, can succinctly be broadly summarized. An ostensible sale with transfer of possession and ownership, but containing a clause for reconveyance in accordance with Section 58 (c) of the Transfer of Property Act, will clothe the agreement as a mortgage by conditional sale. The execution of a separate agreement for reconveyance, either contemporaneously or subsequently, shall militate against the agreement being mortgage by conditional sale. There must exist a debtor and creditor relationship. The valuation of the property, and the transactional value, alongwith the duration of time for reconveyance, are important considerations to decide the nature of the agreement. There will have to be a cumulative consideration of these factors, alongwith the recitals in the agreement, intention of the parties, coupled with other attendant circumstances, considered in a holistic manner. Vishal Tukaram Kadam v. Vamanrao Sawalaram Bhosale, 2017 (5) AWC 4821.

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Final Decision – In A Partition Suit

In Venkata Reddy v. Pethi Reddy, AIR 1963 SC 992, it has been laid down that the preliminary decree for partition is final. It also embodies the final decision of the court. The question of finality has been discussed thus:
“The word ‘decision’ even in its popular sense means a concluded opinion (see Stroud’s Judicial Dictionary – 3rd Edition, Vol. I, P. 743). Where, therefore, the decision is embodied in the judgment which is followed by a decree finality must naturally attach itself to it in the sense that it is no longer open to question by either party except in an appeal, review or revision petition as provided for by law. It was further observed:
The mere declaration of the rights of the plaintiff by the preliminary decree would not amount to a final decision for it is well known that even if a preliminary decree is passed either in a mortgage suit or in a partition suit, there are certain contingencies in which such a preliminary decree can be modified or amended and therefore would not become final.” T. Ravi v. B. Chinna Narasimha, 2017 (123) ALR 305.

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Principle of – Approbate and Reprobate

The law does not permit a person to both approbate and reprobate. The principle is based on the doctrine of election which postulates that no party can accept and reject the same instrument and that a person cannot say at one time that a transaction is valid and thereby obtain some advantage to which he could only be entitled on the footing that it is valid and then turn around and say that it is void for the purpose of securing some other advantage.

In the case of Zila Dastavej Lekhak Association v. State of U.P., (1996) 8 SCC 441, while considering the challenge to the validity of Rule 6(2) of the U.P. Document Writers License Rules, 1977 by the licencees, it was held as under:

“The members of the petitioner-Association, having become the licensees under the Rules, are bound thereby. Firstly, the petitioner – Association being consisting of the members who obtained license under the Rules, cannot challenge the Rules under which they come to operate. The very source under which they come to operate either survives or perishes under the Rules. They cannot challenge that part of the Rules which is unfavourable to them while at the same time, respecting the favourable part thereof since they have no independent right de hors the Rules. They cannot challenge the power of the Inspector General of Registration in making the rules regulating conditions of the document writers and the conditions under which they become eligibile to be document writers.”

In the cases of NCTE v. Shyam Babu Maheshwari, (2011) 2 SCC 412 and Krishna Kumar v. Union of India, (1990) 4 SCC 207 and Union of India v. Kailas, (1998) 9 SCC 721, Hon’ble Supreme Court held that once an employee has opted for the Contributory Provident Fund Scheme, his exercise of option was final and he is not entitled to change over to the pension scheme because the two schemes are entirely different. Janki Prasad v. State of U.P., 2017 (135) RD 525.

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No Right Accrues – To Highest Bidder

In Laxmikant v. Satyawan, (1996) 4 SCC 208, it was held as under:
“The person making the highest bid shall have no right to take back his bid. The decision of the Chairman of the Board of Trustees regarding acceptance or rejection of the bid shall be binding on the said person. The acceptance of the highest bid shall depend on the Board of Trustees. The trust shall reserve to itself the right to reject the highest or any bid.”
In State of U.P. v. Vijay Bahadur Singh, (1982) 2 SCC 365 it was laid down that there is no obligation to accept the highest bid. The Government is entitled even to change its policy from time to time according to the demands of the time.
Thus, it is apparent and explicit that even if the public auction had been completed and the respondent was the highest bidder, no right had accrued to him till the confirmation letter had been issued to him. HUDA v. Orchid Infrastructure Developers (P) Ltd., (2017) 4 SCC 243.

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Statutory Instrument – Issued under a Repealed Enactment

Section 24 of the U.P. General Clauses Act, 1904 clearly provides that a statutory instrument issued under a repealed enactment shall continue in force and be deemed to have been made or issued under the re-enacted provisions unless:

  • The re-enacted provision expressly provides otherwise; or
  • It is superseded by a statutory instrument made under the re-enacted provision.

The section further provides that the extent to which the statutory instrument under the repealed enactment shall continue is “so far as it is not inconsistent with the re-enacted provisions.”

In Chief Inspector of Mines v. Karam Chand Thapar, (1962) 1 SCR 9, the question that fell for consideration was whether or not the regulations framed under the Mines Act, 1923 continued in force after its repeal by the Mines Act, 1952. The accused was prosecuted for the violation of the regulations framed under the 1923 Act. The appellants applied for the quashing of the criminal proceedings on the ground that they were prosecuted for the breach of the regulations that had ceased to exist by the repeal of the Mines Act, 1923. The regulations were “as if enacted in this Act”, and therefore, repealed alongwith the 1923 Act. Harkesh Chand v. Krishan Gopal Mehta, (2017) 4 SCC 537.

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Legal Right – Meaning of

The meaning of the expression ‘person aggrieved’ will have to be ascertained with reference to the purpose and the provisions of the Statute. One of the meanings is that person will be held to be aggrieved by a decision if that decision is materially adverse to him. The restricted meaning of the expression requires denial or deprivation of legal rights. The expression ‘person aggrieved’ means a person who has suffered a legal grievance, i.e. a person against whom a decision has been pronounced which has lawfully deprived him of something or wrongfully refused him something.
A “legal right”, means an entitlement arising out of legal rules. Thus, it may be defined as an advantage or a benefit conferred upon a person by the rule of law. The expression “person aggrieved” does not include a person who suffers from a psychological or an imaginary injury; a person aggrieved must therefore, necessarily be one, whose right or interest has been adversely affected or jeopardised. A person aggrieved, means a person who is wrongly deprived of his entitlement which he is legally entitled to receive and it does not include any kind of disappointment or personal inconvenience. “Person aggrieved” means a person who is injured or he is adversely affected in a legal sense. Naval Kishore v. State of U.P., 2017 (122) ALR 121.

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Pre – Existing Duty Doctrine

Pre-existing duty doctrine is a principle under the Contract Act and states that if a party to a contract is under a pre-existing duty to perform, then no consideration is given for any modification of the contract and the modification is therefore voidable. In the 13th edition of Pollock and Mulla Indian Contract and Specific Relief Act in Vol. 1, it is mentioned at page 101 about the pre-existing obligation under law, which provides that:
“The performance of what one is already bound to do, either by general law or by a specific obligation to the other party, is not a good consideration for a promise; because such performance is no legal burden to the promisor, but rather relieves him of a duty. Neither is the promise of such performance a consideration, since it adds nothing to the obligation already existing.” Anuradha Samir Vennangot v. Mohandas Samir Vennangot, (2015) 16 SCC 596.

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