Solved Scanner Appendix Syllabus... · difference between the preliminary contract and final...

Solved

Scanner AppendixCS Professional Programme Module - III

(New Syllabus)(Solution of June - 2015)

Paper - 8 : Drafting, Appearances and Pleadings

Chapter - 1: General Principles of Drafting & Relevant Substantive Rules2015 - June [1] (a)Where the agreement is formal and written, the following rules of theinterpretation may be applied: (1) A deed constitutes the primary evidence of the terms of a contract, or of a

grant, or of any other disposition of property (Section 91 of the EvidenceAct). The law forbids any contradiction of, or any addition, subtraction orvariation in a written document by any extrinsic evidence, though suchevidence will be admissible to explain any ambiguity (Section 92 of theEvidence Act).

(2) In cases of uncertainty, the rules embodied in provisos 2 and 6 of Section92 of the Evidence Act can be invoked for construing a deed.

(3) The cardinal rule is that clear and unambiguous words prevail over anyhypothetical considerations or supposed intention. But if the words used arenot clear and unambiguous the intention will have to be ascertained.

(4) In case the terms are not unambiguous it is legitimate to take into accountthe surrounding circumstances for ascertaining the intention of the parties.The social milieu, the actual life situations and the prevailing conditions ofthe country are also relevant circumstances.

(5) Sometimes a contract is completed in two parts. At first an executorycontract is executed and later on an executed contract. In case of anydifference between the preliminary contract and final contract, the terms ofthe latter must prevail.

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Solved Scanner Appendix CS Prof. Prog. M-III Paper - 8 (New Syllabus) 2

(6) If in a deed an earlier clause is followed by a later clause which destroysaltogether the obligation created by the earlier clause, the latter clause is tobe rejected as repugnant and the earlier clause prevails.

(7) The court must interpret the words in their popular, natural and ordinarysense, subject to certain exceptions as, (i) where the contract affords an interpretation different from the ordinary

meaning of the words; or (ii) where the conventional meanings are not the same with their legal

sense. (8) Hardship to either party is not an element to be considered unless it

amounts to a degree of inconvenience or absurdity so great as to affordjudicial proof that such could not be the meaning of the parties.

(9) All mercantile documents should receive a liberal construction.(10) No clause should be regarded as superfluous, since merchants are not in

the habit of inserting stipulations to which they do not attach some valueand importance. The construction adopted, should, as far as possible, givea meaning to every word and every part of the document.

(11) Construction given to mercantile documents years ago and accepted in themercantile world should not be departed from, because documents mayhave been drafted in the faith thereof.

(12) If certain words employed in business, or in a particular locality, have beenused in particular sense, they must prima facie be construed in technicalsense.

(13) The ordinary grammatical interpretation is not to be followed, if it isrepugnant to the general context.

(14) Antecedent facts or correspondence, or words deleted before theconclusion of the contract cannot be considered relevant to ascertain themeaning.

(15) Evidence of acts done under a deed can, in case of doubt as to its truemeaning, be a guide to the intention of the parties, particularly when actsare done shortly after the date of the instrument.

(16) Unless the language of two documents is identical, and interpretationplaced by courts on one document is no authority for the proposition thata document differently drafted, though using partially similar language,should be similarly interpreted.

(17) If the main clause is clear and the contingency mentioned in the provisodoes not arise, the proviso is not attracted at all and its language shouldnot be referred to for construing the main clause in a manner contradictoryto its import.


(18) The fact that a clause in the deed is not binding on the ground that it isunauthorised cannot ipso facto render the whole deed void unless it formssuch an integral part of the transaction as to render it impossible to severethe good from the bad.

2015 - June [2] (d)According to Section 3 of the Indian Evidence Act, 1872, defines Document as“any matter expressed or described upon any substance by means of letter,figures, or marks, or more than one of these means, intended to be used orwhich may be used for purposes of recording that matter. Examples:

(i) Writings;(ii) Prints;(iii) Maps;(iv) A caricature(v) Photo (vi) Video etc.

However, an instrument is a specific type of legal document used or intended tobe so used or capable of being used as evidence of:— Financial / monetary / legal right or liability.— Purports to be so created, transferred.

modified, limited, extended, suspended, extinguished or recorded thoserights and liabilities.

The word instrument has been interpreted in different judgements by differentcourts with reference to the different enactment.Example:1. As per Section 2(b) of the Notaries Act, 1952 and Section 2(14) of the Indian

Stamp Act, 1899, the word “instrument” includes every document by whichany right or liability is or purports to be created, transferred, modified limited,extended, suspended, extinguished or recorded.

2. “Instrument” include awards made by Industrial Court. (Purshottam v.Potdar).

3. “Instrument” does not includes Act of Parliament unless there is a statutorydefinition to that effect in any Act. (V.P. Sugar Works V. C.I. of Stamps).

4. A will is an instrument (Bishun V. Suraj Mukhi).5. The word “instrument” in Section 1 of the Interest Act is wide enough of

cover a decree (Savitribai V. Radhakishna).


2015 - June [2A] (Or) (iii)HABENDUM

(i) Habendum is a part of deed which states the interest, the purchaser is totake in the property. The habendum clause starts with the words.“THE HAVE AND THE HOLDS”

(ii) Formerly in England, if there was a gratuitous transfer, the transferee wasnot deemed to be the owner of the beneficial estate in the property.

(iii) The habendum limits the estate mentioned in the parcels.(iv) In India, such Phrases as “to have and to hold” or such an expression as

“to the use of the purchaser” can very well be avoided as in cases exceptthose of voluntary transfers, such an expression is superfluous.

REDDENDUMThis is peculiar to a deed of lease. Here is mentioned this mode and time fixedfor payment. It begins with the word “rendering or paying” with reference to thereserved rent is payable during the terms of the lease. Place where payable andinstalment where mentioned. If there is apportionment of rent that is alsomentioned.

Chapter - 2: Drafting and Conveyancing Relating to Various Deeds andAgreements

2015 - June [1] (b)HYPOTHECATION AGREEMENT Hypothecation is a form of transfer of property in goods. Hypothecationagreement is a document by which legal property in goods passes to the personwho lends money on them, but the possession does not pass. This form oftransfer is not regulated in India by any statute. Neither the Transfer of PropertyAct, 1882, nor the Indian Contract Act, 1872, nor the Sale of Goods Act, 1930,recognize the non-possessory hypothecation of immovables and the rights andremedies of the parties are regulated by the courts according to the general lawof contract.

In hypothecation, there must be an intention of the parties to create asecurity on the property on which the money has been lent. If that intention canbe established, equity gives effect to it. A hypothecation not merely of moveableexisting on the premises at the time but also in respect of moveable which mightbe subsequently acquired and brought there, is valid though it is not governedby the Transfer of Property Act or by the Indian Contract Act, 1872. An oral orwritten hypothecation is permitted under the law in India.


Hypothecation is resorted to mostly by banks and other financial institutionsfor securing their long-term and medium-term loans and limits of working capital,bill discounting, letters of credit and guarantees to limited companies,partnerships etc. Alongwith the hypothecation agreements, the loaninginstitutions including banks have a plethora of other documents executed by theborrowing companies e.g. demand promissory note, collateral personalguarantees of managing directors, directors and other persons havingsubstantial interest in the borrowing entities, second charge on fixed assets likeland and building and plant and machinery permanently attached to land by legalor equitable mortgage and so on and so forth.

Hypothecation agreements usually cover moveable machinery, equipment,stocks of finished and semi-finished goods, raw materials, consumable stores,present and future available in factories and godowns of the borrower and alsoenroute to the borrower’s factories and book debts. While these items asmoveable assets, remain in the possession of the borrower and he has absoluteright to convert them, sell them and deal with them in any manner the borrowerlikes in the course of his business, the legal title vests in the lending institutionby virtue of the hypothecation agreement. Pledge, which is regulated by theIndian Contract Act, 1872, as stated above, technically speaking, cannot existwithout bailment or possession. Though not accompanied by delivery ofpossession, the validity of hypothecation of moveables has been recognised inIndia and it has sometimes been enforced even against a bona fide purchaserwithout notice. Since such hypothecation is not governed by the Transfer ofProperty Act, 1882 or the Indian Contract Act and even the Sale of Goods Act,1930, the Court is thrown back upon principles of equity and justice.

A Specimen Agreement to Hypothecate Goods to Secure Fixed Loan from Rich Bank

The Manager,Rich Bank, …………..….…………. …………..….…………. Sir, In consideration of your Bank advancing to me/us on loan the sum of`…………..….……. I/We hereby agree to hypothecate and hold under lien to theRich Bank as security for the repayment as per Schedule hereto of the principalamount of the loan and payment of interest on demand at……..…% per annumsubject to a maximum of…………..….% per annum above Bank Rate.

The goods so to be held by me/us under lien to the Bank I/We declare to be


my/our absolute property, and to be stored in my/our godownsat………..….…………. I/We hereby agree to furnish you at the close of businesson the last day of each English calendar month so long as any money remainsdue in respect of the said loan with a full and correct statement of particulars ofall goods so held under lien to the Bank, with the market value thereofrespectively on that day.

All goods from time to time held by me/us under lien to the Bank in termsof this agreement shall be kept separate and apart from all other goods inmy/our possession, and no moneys shall be borrowed by me/us from anycompany, firm or person on the security of such goods stored in the samegodown in a way that such other goods may be mixed with the goods held underlien to the Bank nor shall I/We do any other act by means of which the Bank’slien on the goods so held shall be in any way impaired or affected.

It is understood that I/We are at liberty, from time to time in the ordinarycourse of business, to sell all or any of the goods from time to time held underlien to the Bank under this agreement provided that no such sale shall reducethe value of the goods held under lien below the amount of my/our said debt tothe Bank plus the margin of…………..…. per cent. In case of any goods heldunder lien to the Bank reducing the value of the goods held under this lien to lessthan the amount of my/our said debt to the Bank plus such margin, the proceedsof such sale, as soon as the same are received, shall be paid into the bank inpart satisfaction of the said loan and shall in the meantime be held as specificallyappropriated to payment of the amount due by me/us on the security.

I/We empower you or any one from time to time authorised by you on behalfof the Bank to enter the godowns in which the goods held under lien to the bankunder this agreement shall be from time to time stored, for the purpose ofinspecting and taking an account of the said goods.

I/We further empower you or anyone authorised by you as aforesaid so longas any money advanced by the bank under this agreement remains unpaid, totake possession of any goods from time to time held by me/us under lien to theBank under this agreement and or any promissory notes or bazaar chits held byme/us in respect of any of the goods which may have been sold in such manneras you may think fit and on so taking possession to exercise on behalf of theBank all the rights of a pawnee under the Indian Contract Act and failingpayment of the amount under this loan on…………..….…………., to sell andrealise the said goods and promissory notes or bazaar chits. No notice to me/usof such sale shall be necessary, and I/We hereby agree to waive any such


notice. I/We agree to accept the Bank account of such sale signed by theManager, Accountant or other duly authorised officer of the Bank as sufficientproof of the correctness of the amount realised by the Bank and the charges andexpenses incurred in connection with such realisation, and I/We hereby furtheragree to sign all documents, furnish all information and do all acts and thingsnecessary for the purpose of enabling the Bank to sell any goods or realise anypromissory notes or bazaar chits of which you shall so take possession.

I/We undertake to keep all held under lien to the Bank under this agreement,insured against fire to their full value, and to produce and deposit the policieswith the Bank any time on demand and to hold all moneys which may becomepayable under any such policies in trust for the Bank so long as any money shallremain due in respect of my/our said loan. It shall be optional for, but notobligatory on the Bank, to insure the said goods in the Bank’s name or toappropriate floating policies for the time being effected by the Bank towardsinsurance of the said goods and in either case to debit the said loan with relativepremiums.

It is understood that the Bank’s lien on the goods, so held under thisagreement shall extend to any other sum or sums of money for which I/we orany other of us either separately or jointly with any other person or persons maybe or become indebted or liable to the bank on any account.

Schedule of securities referred to in the agreement

. …………..….…………. Schedule of instalments for the repayment of the loan amount.

…………..….………….

Yours faithfully, For A B C Ltd. (…………..….………….) Managing Director, New Delhi Dated……….…………. 2015 - June [2](b) Arbitral award:

Section 31 of the Act lays down the requirements as to form and contents


of an arbitration award. An award must be a speaking order i.e. it must statethe reasons, unless the parties have specifically agreed that reasons neednot be given or the award is based on agreed terms. The award should statethe reasons upon which it is based. In other words, unless (a) the partieshave agreed that no reasons are to be given or (b) the award is an arbitralaward on agreed terms under Section 30 of the Act, the award should statethe reasons in support of determination of the liability/non-liability. Thelegislature has not accepted the ratio of Constitution Bench in theChokhamal Contractor’s case (AIR 1990 SC 1426), that the award, being inthe private law field, need not be a speaking award even where the awardrelates to the contract of private parties or between person and theGovernment or public sector undertakings (Tamil Nadu Electricity Board V.Bridge Tunnel Constructions & Others, AIR 1997 SC 1376). Date and Placeare to be mentioned in the award in accordance with Section 20 of the Actand the award should be deemed to have been made at that place.

Section 31(1) requires that the award shall be made in writing and shallbe signed by the members of the arbitral tribunal. According to Sub-section(5) of Section 31 of the Act, a signed copy of the same is to be delivered toeach party.

(c) Counter Guarantee and Fidelity Guarantee: A guarantee, guaranteeingan employer against the misconduct of an employee or to answer for thedebt or default of another, is called a "fidelity guarantee".

A guarantee given by the principal debtor to the surety providing himcontinuing indemnity against any loss or damage that the surety may sufferon account of default on the part of the principal debtor, is called "counter-guarantee".

2015 - June [6] (a)ELECTRONIC CONTRACTS (E-CONTRACTS) Due to the immoderate advancement of technology E-Commerce has becomea part of human daily life. E-Commerce is the selling and purchasing of goodsand services using technology. E-Contracts are basically the contracts analyzedwith E-Commerce and other transactions taking place in the digital environment.

E-Contract (contract that is not paper based but rather in electronic form) isany kind of contract formed in the course of e-commerce by the interaction oftwo or more individuals using electronic means, such as e-mail, the interaction


of an individual with an electronic agent, such as a computer program, or theinteraction of at least two electronic agents that are programmed to recognizethe existence of a contract. Traditional contract principles and remedies alsoapply to e-contracts. This is also known as electronic contract.

Electronic contracts are born out of the need for speed, convenience andefficiency. Imagine a contract that an Indian exporter and an American importerwish to enter into. One option would be that one party first draws up two copiesof the contract, signs them and couriers them to the other, who in turn signs bothcopies and couriers one copy back. The other option is that the two parties meetsomewhere and sign the contract. In the electronic age, the whole transactioncan be completed in seconds, with both parties simply affixing their digitalsignatures to an electronic copy of the contract. There is no need for delayedcouriers and additional travelling costs in such a scenario.

The contracts formed through electronic media are treated as the generalcontracts and their formation and acceptance are governed as per the IndianContract Act, 1872.

The Indian Contract Act, 1872 governs the manner in which contracts aremade and executed in India. It governs the way in which the provisions in acontract are implemented and codifies the effect of a breach of contractualprovisions. Within the framework of the Act, parties are free to contract on any terms they choose. Indian Contract Act consists of limitingfactors subject to which contract may be entered into, executed and breachenforced. ESSENTIALS OF E-CONTRACT As per the Indian Contract Act, the essentials of a contract are:

(i) An offer or proposal by one party and acceptance of that offer byanother party resulting in an agreement consensus-ad-idem.

(ii) An intention to create legal relations or an intent to have legalconsequences.

(iii) The agreement is supported by lawful consideration. (iv) The parties to contract are legally capable of contracting. (v) Genuine consent between the parties. (vi) The object and consideration of the contract is legal and is not opposed

to public policy. (vii) The terms of the contract are certain. (viii) The agreement is capable of being performed i.e., it is not impossible of


being performed.

Chapter - 3: Drafting and Conveyancing Relating to Various Deeds andAgreements-I

2015 - June [2A] (Or) (ii)Privileged Will: Any soldier being employed in an expedition or engaged inactual warfare, or an airman so employed or engaged, or any mariner being atsea, may, if he has completed the age of eighteen years, dispose of his propertyby a Wills made in the manner provided in Section 66. Such Wills are calledPrivileged Wills. Privileged Wills may be made orally and may not always be inwriting. If written in handwriting of testator, it need not be signed or attested. Itis governed by Sections 65 & 66 of the Indian Succession Act.Unprivileged Will: Wills made by the persons other than stated above areUnprivileged Will. Such Wills are required to be in writing, signed by testator andattested by the two witnesses (except those made by Mohammedans). It isgoverned by Section 63 of the Indian Succession Act.

2015 - June [3](a) In construing the language of a Will, the courts are entitled and bound to

bear in mind other matters than merely the words used. They must considerthe surrounding circumstances, the position of the testator, his familyrelationship, the probability that he would use words in a particular senseand many other things which are often summed up in somewhatpicturesque figure. The court is entitled to put itself into the testator’s armchair. [Venkatanarasimha V. Parthasarthy, 41 IA 51, 70 (PC); GnambalAmmal V. T. Raju Iyer, AIR 1951 SC 103,106].

(b) “A family arrangement is an agreement between members of the samefamily, intended to be generally and reasonably for the benefit of the familyeither by compromising doubtful or disputed rights or by preserving thefamily property or the peace and security of the family by avoiding litigationor by saving its honour.”

It has been pointed out by Halsbury that though the agreement may beimplied, it is more usual to embody or to effectuate the agreement by adeed to which the term “family arrangement” is applied.

Further it says “family arrangements are governed by principles whichare not applicable to dealings between strangers. When deciding the rightsof parties under a family arrangement or a claim to upset such anarrangement, the Court considers what in the broadest view of the matter


is most in the interest of the family and has regard to considerations which,in dealing with transactions between persons not members of the samefamily, would not be taken into account. Matter which would be fatal to thevalidity of similar transactions between strangers are not objections to thebinding effect of family arrangements.

No doubt, a family arrangement, which is for the benefit of the familygenerally, can be enforced in a court of law. But before the court would doso, it must be shown that there was an occasion for effecting a familyarrangement and that it was acted upon. [Lakshmi Perumallu V.Krishnavenarnma, AIR 1965 SC 825 : 1965 (1) SCR 261.]

(c) If the several parts of the Will are absolutely irreconcilable, the part that islater has to prevail. [Section 88, Indian Succession Act, 1925; SomasunderaMudaliar V. Ganga Bissen Soni, 28 Mad 386]. In case of repugnancy, thelast word in the Will shall prevail. [CIT V. Indian Sugar Mills Association,(1974) 97 ITR 486 SC].

2015 - June [4] (a) A power of attorney can be executed by any person, who can enter into acontract i.e. a person of sound mind who has attained majority. A power ofattorney can be executed only in favour of a major.Registration of a power of attorney is not compulsory. Section 4 of thePowers-of-Attorney Act, 1882 provides that it may be deposited in the High Courtor District Court within the local limits of whose jurisdiction the instrument is withan affidavit verifying its execution, and a copy may be presented at the officeand stamped as the certified copy and it will then be sufficient evidence of thecontents of the deed.

In other cases, a mere general power of attorney, even though it deals withimmovable property, need not be registered (Kochuvareed V. Mariappa, A.I.R.1954 T.C. 10, 17) since it does not come under any of the documents specifiedin the Indian Registration Act as requiring registration.

Chapter - 4: Drafting and Conveyancing Relating to Various Deeds andAgreements - II

2015 - June [3] (d)Supreme Court of India in Khushall Khengar Shah V. Khorshedbanu, AIR 1970


SC 1147, had opined goodwill of a business as an intangible asset being thewhole advantage of the reputation and connections formed with the customerstogether with the circumstances which make the connections durable. It is thatcomponent of the total value of the undertaking which is attributable to the abilityof the concern to earn profits over a course of years because of its reputation,location and other features.

2015 - June [5] (a)FIVE IMPORTANT CLAUSES OF A LEASE DEED

THIS LEASE made on 1st June 2012.............day of..............betweenAnkush...............(hereinafter called "the lessor") (the expression shall include theowner for the time being of the lessors' interest in demised premises) of the Onepart and Dinesh...............(hereinafter called "the lessee") (the expression shallinclude his heirs, executors, administrators and permitted assigns) of the other. THE DEED THEREFORE WITNESSES AS FOLLOWS: 1. The lessor hereby demises to the lessee all that dwelling house with the

land fully described in the Schedule hereto together with all out houses,wells, motor garage, kitchen, pathways, passage, garden and otherappurtenances thereof situate at Plot no. 111 in village Pilakhua ................tohold the same to the lessee from the ....................day of.......................forthe term of.........3............years (or year to year) paying therefore during thesaid term the monthly rent of `............(Rupees...............) payable on thefirst day of the month succeeding that for which the rent is due.

2. Lessee's obligation: (i) The lessee will during the said term keep the demised premises and

the fixtures thereof in good and tenantable order and condition and willpermit the lessor and his agents with or without workmen or others atall reasonable times to enter the demised premises and inspectcondition thereof and to carry out all or any necessary repairs therein.

(ii) The lessee hereby agrees that he will, during the said term (tenancy),pay all rents, taxes and other charges excluding the house tax whichnow are or may hereafter become payable in respect of the demisedproperty;

(iii) Pay Municipal charges including water bills and electric bills, etc. (iv) That he will not without the previous consent in writing of the lessor

transfer or sublet or otherwise part with possession of the demisedpremises and/or create any charge over the demised premises.


(v) That he will, without the consent in writing of the lessor, use thedemised premises for residential purposes and for no other purpose.

(vi) The lessee will during the said term use his best endeavours to preventany easement of right belonging to or used with the demised premisesfrom being obstructed or lost and will not allow any encroachment to bemade or easement to be acquired on or over the demised premises.

3. Lessor's obligations : (i) That he will during the said term (tenancy) maintain the demised

premises in good and habitable condition and shall execute allnecessary repairs including annual white-washing and colour washing,plastering, painting, etc. and shall renew all broken panes, fittings,bolts, etc. and on lessee's giving the lessor notice in writing of anydecay, defects, disorders, will, within one calendar month from thereceipt of such notice, repair and amend the same.

(ii) That he will, during the said term (tenancy), maintain the electricinstallation in the said premises and supply at his own expense suchelectric fans as may be required by the lessee.

(iii) That he will carry out all immediate necessary repairs to the saidpremises to the entire satisfaction of the lessee failing which the lesseemay make the same himself and deduct the expense of such repairsfrom the rent due.

(iv) That the lessor shall repair, when necessary, the well, the passages,pathways and the road connecting the public road with the premiseshereby demised.

4. Provided always and it is hereby agreed as follows : (i) That whenever any part of the rent hereby reserved shall be in arrears

for...................months after due date or there shall be a breach of anyof the covenants by the lessee herein contained, the lessor may re-enter on the demised premises and determine this lease.

(ii) That the tenancy hereby created shall be determinable at the option ofthe lessor/lessee (or either party) by giving to the lessor/lessee (or theother party) ...............calendar months notice in writing.

5. It is hereby agreed between the parties as follows : That the demand forpayment or notice required to be made upon or given to the lessee shall besufficiently made or given if sent by the lessor or his agent through the postby registered letter addressed to the lessee at the demised premises (or,at..............) and, that notice requiring to be given by the lessee shall besufficiently given if sent by the lessee through the post by registered letteraddressed to the lessor at his usual or last known place of residence or


business (or, at....................) and that any demand or notice sent by post ineither case shall be assumed to have been delivered in the usual course ofpost.

IN WITNESS WHEREOF the parties hereto have hereunder signed thisdeed on the dates mentioned against their respective signatures.

Signed, sealed and delivered. AnkushDinesh

Chapter - 5: Drafting and Conveyancing Relating to Various Deeds andAgreements - III

2015 - June [3A] (Or) (ii)Deed of Dissolution of Partnership

(To be executed on ` 10/- Non Judicial Stamp Paper) THIS DEED OF DISSOLUTION OF PARTNERSHIP made the_________dayof_______200_________BETWEEN ______________.

WHEREAS the partners hereof under a deed of partnershipdated_______made between them formed themselves into a business firm andcarried on business under the name and style of_________in pursuant to thecovenants, stipulations and provision contained in the said deed;

AND WHEREAS it has been mutually decided between the parties that thesaid partnership shall be dissolved and the said trade and business should bewound up and the stock-in-trade, assets and credits realized and called in andthe net proceeds after payment and satisfaction of all debts and liabilities dividedbetween the partners according to the covenants in this behalf appearing in thedeed of partnership.

NOW THIS DEED WITNESSES that in pursuance of the said agreement itis hereby declared and agreed by and between the parties hereto as follows, thatis to say: 1. The said partnership between the partners hereto under the deed,

dated_________hereunto appended shall be determined and standdissolved as from the_______day of______200________And the partieshereto singly or jointly shall not carry on the business of the said firmof______under the said name and style for a period of_______years hence.

2. The parties hereto shall on the aforesaid date of_________sign notices ofthe dissolution and forthwith advertise in the local Official Gazette the factof dissolution as required by Section 45 of the Indian Partnership Act AND


shall also intimate the fact of dissolution to the Registrar of Firms under theprovision of Section 63 of the said Act.

3. Within_______________days after the dissolution of the partnership a fulland general account and balance sheet shall be taken and made of theproperty, assets and liabilities of the partnership; and a full and particularinventory and valuation of all the machinery, plants, tools, utensils, stock inhand. office equipment, materials and effects belonging to the firm shall bemade by the parties or such other person as the partners may choose toappoint, whose decision shall be final binding upon the partners and alldebts owing to the firm shall be collected and got in by the parties or suchother persons as the parties may by instrument in his behalf appoint.

4. That as soon as may be, after the property, assets and liabilities have beengot in and disbursed the parties or such other person or persons whom theparties may have appointed under the foregoing clause shall divide andapportion the share of the parties, in the proportion of the contribution of theparties towards the capital. In such division any amounts paid earlier or dueto the parties according to the books of the partnership shall be taken intoaccount. That the cost of liquidation proceedings shall also be deemed tobe a liability of the partnership and paid from the funds of the partnership.

5. That in case the winding up shows a loss or the assets of the partnershipare insufficient to meet the liabilities and debts of the partnership then thepartners shall forthwith pay such losses in the proportion of their contributionto the capital.

6. Each of the parties shall, as soon as the others or any of them, or their orhis representatives, shall have executed and done all the assurances, actsthings hereby agreed to be done by them respectively and at the requestand cost of such other or others, or their or his representatives execute tothem or him such releases, indemnifies and assurances as may bereasonable and proper. IN WITNESS WHEREOF the said AB, CD and EF have hereto signed and

executed this agreement of dissolution and appended it to said deed of partnersdated_______________.

WITNESSES: 1. Sd/- A.B.2. Sd/- C.D. 3. Sd/- E.F.

Chapter - 6: Drafting and Conveyancing Relating to Various Deeds andAgreements - IV

2015 - June [2A] (Or) (i)


Writ of Certiorari: If any lower court or a tribunal gives its decision but basedon wrong jurisdiction, the effected party can move this writ for a direction againstsuch lower court or tribunal to ignore such decisions based on wrong jurisdictionthe writ of certiorari issued to subordinate judicial or quasi judicial body whenthey act:- (a) without or in excess of jurisdiction ;(b) In violation of prescribed procedure ; (c) contravention of principles of natural justice ; (d) Resulting in an error of law apparent on the face of record.Mandamus: The expression "mandamus" means a command. The writ ofmandamus is, thus a command issued to direct any person, corporation, inferiorcourt or Government authority requiring him to do a particular thing thereinspecified which pertains to his or their office and is further in the nature of apublic duty. This writ is used when the inferior tribunal has declined to exercisejurisdiction. mandamus can be issued against any public authority. The applicantmust have a legal right to the performance of a legal duty by the person againstwhom the writ is prayed. Mandamus is not issued if the public authority has adiscretion. mandamus can be issued by the Supreme Court and all the HighCourts to all authorities.

Chapter - 7: Drafting of Agreements under the Companies Act2015 - June [4] (b)Specimen Agreement of Service as a Managing Director of a CompanyTHIS AGREEMENT is made on the………….. day of………….. 2013between………….. Ltd., a company incorporated under the Companies Act,2013 and having its Registered Office at………….. (hereinafter called“Company”) of the one part and Mr………….. son of Mr………….. residentof………….. (hereinafter called “the Managing Director” of the other part). It is hereby agreed as follows: 1. The company hereby appoints subject to the approval of the Government

of India under Section 203 of the Companies Act, 2013, Mr…….. asManaging Director of the company for period of five years with effectfrom…….. and the Managing Director hereby agrees to serve the companyin such capacity for a period of five years with effect from…………..

2. The Managing Director shall exercise and perform such powers and dutiesas the Board of directors of the company (hereinafter called “the Board”)shall, from time to time, determine and subject to any directions and


restrictions, from time to time, given and imposed by the Board and subjectto the restrictions contained hereinafter, he shall have the general control,management and superintendence of the business of the company withpower to appoint and dismiss employees (other than officers of the companydrawing a basic pay of ` 3,000/- and above per month) and to enter intocontracts on behalf of the company in the ordinary course of business andto do and perform all other acts and things, which in the ordinary course ofbusiness he may consider necessary or proper or in the interest of thecompany.

3. Without prejudice to the generality of the powers vested in the ManagingDirector under the preceding clause hereof, the Managing Director shall beentitled to exercise the following powers– (a) With Board’s approval singly or together with other authorised officer(s)

of the company, to open and operate on any banking or other accountand to draw, make, accept, execute, endorse, discount, negotiate,retire, pay, satisfy and assign cheques, drafts, bills of exchange,promissory notes, hundis, interest and dividend warrants and othernegotiable or transferable instruments or securities;

(b) Together with other authorised officer(s) of the company to borrowmoneys with or without security, but not exceeding ` 5 lakhs at a timefrom one party;

(c) To incur capital expenditure up to a sum of ` 5 lakhs during anyfinancial year;

(d) To engage employees and other servants for the company at a basicsalary not exceeding ̀ 3,000/- per month within the budget sanctionedby the Board;

(e) To increase the salary or the remuneration of any employee or servantof the company whose basic salary does not exceed ` 2,000/- permonth. General increments must be with the Board’s approval;

4. The Managing Director shall, throughout the said term, devote the whole ofhis time, attention and abilities to the business of the company and shallobey the orders, from time to time, of the Board and in all respects conformto and comply with the directions and regulations made by the Board andshall faithfully serve the company and use his utmost endeavour to promotethe interest thereof.

5. The company shall pay to the Managing Director during the continuance ofthis agreement in consideration of the performance of his duties – (a) a salary at the rate of `………….. per month;


(b) the actual travelling expenses incurred by the Managing Director in orabout the business of the company;

(c) the actual entertainment expenses and approved club membership feesreasonably incurred by the Managing Director in or about the businessof the company;

(d) the actual hospital and medical expenses which have been incurred bythe Managing Director for himself, his wife, dependent parents and hisminor children, provided that such expenses during the threeconsecutive financial years shall not exceed `…………

(e) The Managing Director shall be entitled to use the company’s car, allthe expenses for maintenance and running of the same including salaryof the driver to be borne by the company;

(f) The company shall provide the Managing Director with rent freefurnished accommodation and will pay electricity and water charges;

(g) He shall also be entitled to use the company’s telephone at hisresidence, the charges whereof shall be borne by the company;

(h) The Managing Director shall be entitled to participate in any providentfund and gratuity fund or scheme for the employees which the companymay establish;

6. The Managing Director shall not during the period of his employment andwithout the previous consent in writing of the Board, engage or interesthimself either directly or indirectly in the business or affairs of any otherperson, firm, company, body corporate or concern or in any undertaking orbusiness of a nature similar to or competing with the company’s businessand further shall not, in any manner, whether directly or indirectly, use, applyor utilise his knowledge or experience for or in the interest of any suchperson, firm, company, body corporate or concern as aforesaid or any suchcompeting undertaking or business as aforesaid.

7. The Managing Director shall not, during the continuance of his employmentor any time thereafter, divulge or disclose to any person, firm, company,body corporate or concern, whatsoever or make any use whatever for hisown or for whatever purpose of any confidential information or knowledgeobtained by him during his employment of the business or affairs of thecompany or of any trade secrets or secret processes of the company andthe Managing Director shall, during the continuance of his employmenthereunder, also use his best endeavours to prevent any other person, firm,company, body corporate or concern from doing so.


8. Any property of the company or relating to the business of the company,including memoranda, notes, records, reports, plates, sketches, plans, orother documents which may be in the possession or under the control of theManaging Director or to which the Managing Director has at any timeaccess, shall at the time of the termination of his employment be deliveredby the Managing Director to the company or as it shall direct and theManaging Director shall not be entitled to the copyright in any suchdocument which he hereby acknowledge to be vested in the company or its.assigns and binds himself not to retain copies of any of them.

9. The whole interest of the Managing Director in the said improvement,invention or discovery and in all future improvements thereon at any timediscovered or invented by the Managing Director alone or in conjunction asaforesaid, shall be the sole and absolute property of the Company and theManaging Director, if and whenever required by the Company during theperiod of employment or after the termination thereof shall at the expenseof the Company, join with the Company in applying for letters patent, designregistration or other forms of protection in India.

10. If the Managing Director shall at any time be prevented by ill-health oraccident from performing his duties hereunder, he shall inform the Companyand if he shall be unable by reason of ill-health or accident for a period ofsixty days in any period of twelve consecutive calendar months to performhis duties hereunder, the Company may terminate his employment.

11. The Company shall be entitled to terminate this agreement in the event ofthe Managing Director being guilty of misconduct or such inattention to ornegligence in the discharge of his duties or in the conduct of the Company’sbusiness or of any other act of omission or commission inconsistent with hisduties as the Managing Director or any breach of his agreement.

12. If before the expiration of this agreement the tenure of office of theManaging Director shall be determined by reason of a reconstruction oramalgamation whether by the winding up of the Company or otherwise, theManaging Director shall have no claim against the Company for damages.

13. The Company shall be at liberty from time to time to appoint a person orpersons to be Managing Director(s) jointly with the Managing Director. The Managing Director hereby agrees that he will not, at any time, after the

termination of this agreement, represent himself as being in any way connectedwith or interested in the business of the company. IN WITNESS WHEREOF theparties hereto have set their hands the day, month and the year first above


written. Witnesses: for and on behalf of the company 1. 2. Managing Director

2015 - June [5] (b)A Specimen of Promoters’ Contract for the Purchase of an Industrial Plotfor setting up Industrial Unit of the Proposed Company PMQ Ltd. THEAGREEMENT made on……….……. day of……………. between Mr. A, son ofMr…………………. resident of…………………., Mr. B, son of Mr………………….resident of…………………. and Mr. C, son of Mr…………………., residentof………………….’ (hereinafter referred to as “promoters”) of the one part whichexpression shall, unless repugnant to the context include their heirs, legalrepresentatives and assigns and Mr. “V” son of Mr………………….resident…………………. (hereinafter referred as “Vendor”) of the other part,which expression shall, unless repugnant to the context, include his heirs, legalrepresentatives and assigns. WHEREAS the promoters have been engaged forquite sometime in the past in promoting and forming a company to be known asPMQ Ltd., which name has been made available to the promoters by theRegistrar of Companies……………., consequent upon which they have filed withthe Registrar memorandum of association and articles of association forregistration of the company;

AND WHEREAS the memorandum and articles of association of theproposed PMQ Ltd., empower the company and its directors to enter intoagreements on its incorporation on the lines of the agreement entered into bythe promoters for the purchase of land, plant, machinery, equipment and forhiring the services of persons required for and in connection with the formationand incorporation of the company;

AND WHEREAS the Vendor is the absolute owner of industrial plot of landmeasuring…………………. and situated at…………………. and is desirous ofselling the same;

AND WHEREAS the promoters and desirous to buy the said plot of land forthe proposed company PMQ Ltd. to set up an industrial unit on its incorporation. NOW IT IS AGREED AND DECLARED BETWEEN AND BY THE PARTIES ASFOLLOWS:


1. That the said vendor shall sell and the promoters shall purchase theindustrial Plot No…………………. situated in the…………………. IndustrialArea, ………………….bounded on North by…………………., on Southby…………………., on East by…………………., and on Westby…………………. in consideration of the payment, by the promoters on thedate of this agreement, of the sum of ̀ …………………. and the balance of`…………………. on the date of the appearance of the vendor and thepromoters before the Sub-Registrar…………………. at the time ofregistration of the deed of sale to this agreement.

2. The vendor shall satisfy the promoters or PMQ Ltd., if incorporated by then,about the title of the vendor to the aforesaid piece of land within one monthof the execution of this agreement and the promoters or their attorney shallbe entitled to ask for such information as may be necessary to ascertain thetitle of the vendor and the vendor shall be bound to allow inspection of thetitle deeds relating to the plot of land at his place within two months of thedate of this agreement. On the satisfaction of the .promoters as to the titleof the vendor in respect of the said plot of land, the parties shall completethe transaction of the sale within six months of the date of this agreement.

3. The parties shall bear the expenses of sale equally. The purchaser shall payto the vendor the expenses for purchase of stamp, a fortnight before theexpiry of the period fixed for this agreement for completion of the sale andthe promoters shall also at the same time deliver to the vendor a draft of thedeed of sale which the vendor shall, if in proper form, execute at hisexpense in favour of the purchasers and present the same for registrationon or before the date fixed for the completion of the sale transaction.

4. The vendor shall deliver actual possession of the plot of land to thepromoters or the company on the date of payment of the balance of theprice aforementioned and shall do all other acts that may be necessary orrequisite to effectually put the promoters or PMQ Ltd., as the case may be,in such possession.

5. In case there found to be any error or misdescription in area or theboundaries or the other specifications of the plot of land agreed to beconveyed to the promoters of PMQ Ltd. or PMQ Ltd., as the case may be,corresponding decrease or increase in price relating to the area and


rectification of misdescription of the specification relating to boundaries etc.shall be permissible and shall not form any ground for avoiding thisagreement for sale of the plot of land.

IN WITNESS WHEREOF the parties aforementioned have signed this deed ofacceptance of the terms thereof. 1. Witness Vendor 2. Witness Purchasers/Promoters of the

Company PMQ Limited, under incorporation.

3. Witness A 4. Witness B

C (Schedule of Land)

Chapter - 8: Pleadings2015 - June [2] (a)A pleadings shall contain only material facts. Material facts are the entirety offacts which would be necessary to prove to succeed in the suit. Any fact whichis not material should be avoided. Slackness in pleadings is unfair both to thecourt in which they are filed and also to the litigants. Material facts should bepleaded concisely. There is hardly any scope for showing literary genius in apleading.

Order 6, R. 2, C.P.C. should be read with O. 6, R. 4(c). When commencinga suit, the plaintiff is required to state only material facts, but such facts mustconstitute his cause of action as well. Absence of material facts will put the partyto discomfiture, for no amount of evidence can be taken into consideration orregarded as sufficient in proof of any fact if specific mention of it is not made inthe pleadings. Therefore, if a party omits to state a material fact, he will not beallowed to give evidence of the fact at the trial unless the pleading is amendedunder O. 6, R. 17, C.P.C. The rule is based mainly on principles that no partyshould be prejudiced by change in the case introduced by this method. No reliefcan be granted on facts and documents not disclosed in the plaint.

It is often noticed that during the trial of a suit, some fact is sought to beintroduced in evidence which does not find mention in the plaint or in the writtenstatement, as the case may be. Then follows a heated parley when the courtintervenes and rejects any attempt of introduction of any new fact. To avoid


discomfiture, the pleading should be carefully drafted not to miss any materialfact which may subsequently be found to be so material as to decide the fate ofthe case this or that way.

2015 - June [2A] (Or) (iv)‘Plaints’ and ‘Complaints’ are nearly synonymous. In both, the expression ofgrievance is predominant. Verily, when a suitor files a statement of grievance heis the plaintiff and he files a ‘complaint’ containing allegations and claimsremedy. As days passed, we have taken up the word ‘Plaint’ for the Civil Courtand the word ‘Complaint’ for the Criminal Court.

Chapter - 9: Appearances2015 - June [3A] (Or) (i)The Code of Civil Procedure, 1908 provides for four kinds of appeals:

(i) According to Sections 96 to 99 an order XLI Provides that appeals fromoriginal decrees - Appeals from original decrees may be preferred fromevery decree passed by any Court exercising original jurisdiction to theCourt authorized to hear appeals from the decisions of such court onpoints of law as well as on facts.

(ii) According to Sections 100 to 103 provides that second appeals lie to theHigh Court from every decree passed in appeal by any court subordinateto the High Court, if the High Court is satisfied that the case involves asubstantial question of law.Under section 100 to the code an appeal may lie from an appellate decree passed ex parte.

(iii) According to Sections 104 to 106 provides that Appeals from orders fromthe following grounds of defect or irregularity of law:-(a) An order as per Section 35A.(b) An order as per Section 91 or Section 92(c) An order as per Section 95 for compensation for obtaining assets,

attachment or injunction on insufficient ground.(d) An order Under the Code imposing a fine.

(iv) Appeals to the Supreme Court, the highest Court of Appeal in thefollowing cases.Articles 132 to 135 of the Constitution deal with ordinary appeals to thesupreme Court.(a) Appeals in Constitutional cases (Article 132)


(b) Appeals in Civil cases (Article 133)(c) Appeals in Criminal cases (Article 134)

Chapter - 10: Compounding of Offences2015 - June [6] (b)Compounding of offences: 'Compounding' means that the accused and thecomplainant have come to terms and the dispute between the parties has beensettled amicably or adjusted by agreement and the complainant agrees not toprosecute the accused. The accused and the complainant then make a jointapplication to the Court that the parties have come to terms and the case maynot be proceeded with.

Compounding saves the parties from the hassle of spending a lot of money,time and energy in lengthy legal proceedings. In a country like India where thereare thousands of cases pending in the court 'compounding' is a good way ofsettling disputes or matters. Compounding of Offences under the Code of Criminal Procedure: Section320 of the Criminal Procedure Code, 1973 permits compounding of variousoffences under Indian Penal Code. Such compounding can be done either orafter institution of prosecution. It may be pointed out here that a crime isessentially a wrong done to society, therefore a compromise between theaccused (wrong-doer) and the individual victim should not be enough to absolvethe accused from criminal responsibility. However, where the offences areessentially of a private nature and relatively not quite serious, the Codeconsiders it expedient to recognize some of them as compoundable offences[see the table given in Section 320 (1)] and some others as compoundable onlywith the permission of the court [see the table given in Section 320 (2)]. Afterpayment of such composition amount, prosecution will not be launched, or if itwas launched, it will be withdrawn.

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Allahabad - 211002Visit us : www.shuchita.com

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