LAW MINISTRY AND MINISTER OF INDIA

The Ministry of Law and Justice in the Government of India is a cabinet ministry which deals with the management of the legal affairs, legislative activities and administration of justice in India through its three departments namely the Legislative Department and the Department of Legal Affairs and Department of Justice respectively.

The Department of Legal Affairs is concerned with advising the various Ministries of the Central Government while the Legislative Department is concerned with drafting of principal legislation for the Central Government.

 The ministry is headed by a cabinet rank minister appointed by the President of India on the recommendation of the Prime Minister of India.

The first Law and Justice minister of independent India was B. R. Ambedkar, who served in Prime Minister Jawaharlal Nehru's cabinet during 1947–52.

Ravi Shankar Prasad is the current minister for law and justice in India.

 

The Government of India (Allocation of Business) Rules of 1961 entail the various departments working under the Ministry of Law and Justice of Government of India. In terms of these Rules, the Ministry comprises the following departments:

Department of Legal Affairs,

Legislative Department,

Department of Justice

 

Legislative Department

The Legislative Department is mainly concerned with drafting of all principal legislation for the Central Government i.e. Bills to be introduced in Parliament, Ordinances to be promulgated by the President, measures to be enacted as President's Acts for States under the President's rule and Regulations to be made by the President for Union territories.

It is also concerned with election Laws namely the Representation of the People Act 1950 and the Representation of the People Act 1951.

In addition, it is also entrusted with task of dealing with certain matters relating to List III of the Seventh Schedule to the Constitution like personal law, contracts evidence etc.

 The responsibility of maintaining up to date the statutes enacted by Parliament is also with this Department. The Allocation of Business Rules identify the following functions to be carried out by this Department;

 [1]The drafting of Bills, including the business of the Draftsmen in Select Committees, drafting and promulgation of Ordinances and Regulations; enactment of State Acts as President's Acts whenever required; scrutiny of Statutory Rules and Orders (except notifications under clause (a) of section 3, section 3A and section 3D, of the National Highways Act, 1956 (48 of 1956)).

Constitution Orders; notifications for bringing into force Constitution (Amendment) Acts.

(a) Publication of Central Acts, Ordinance and Regulations; (b) Publication of authorised translations in Hindi of Central Acts, Ordinances, Orders, Rules, Regulations and bye-laws referred to in section 5(1) of the Official Languages Act, 1963 (19 of 1963).

Compilation and publication of unrepealed Central Acts, Ordinances and Regulations of general statutory Rules and Orders, and other similar publications.

Elections to Parliament, to the Legislatures of States, to the Offices of the President and Vice-President; and the Election Commission.

Preparation and publication of standard legal terminology for use, as far as possible, in all official languages.

Preparation of authoritative texts in Hindi of all Central Acts and of Ordinances promulgated and Regulations made by the President and of all rules, regulations and orders made by the Central Government under such Acts, Ordinances and Regulations.

Making arrangements for the translation into official languages of the States of Central Acts and of Ordinances promulgated and Regulations made by the President and for the translation of all State Acts and Ordinances into Hindi if the texts of such Acts or Ordinance are in a language other than Hindi.

Publication of law books and law journals in Hindi.

Marriage and divorce; infants and minors; adoption, wills; intestate and succession; joint family and partition.

Transfer of property other than agricultural land (excluding benami transactions registration of deeds and documents).

Contracts, but not including those relating to agricultural land.

Actionable wrongs.

Bankruptcy and insolvency.

Trusts and trustees, Administrators, General and Official Trustees.

Evidence and oaths.

Civil Procedure including Limitation and Arbitration.

Charitable and religious endowments and religious institutions.

Department of Justice

The Department of Justice performs the administrative functions in relation to the appointment of various judges at various courts in India, maintenance and revision of the conditions and rules of service of the judges and other related areas. The Allocation of Business Rules identify the following functions to be carried out by this Department.

Appointment, resignation and removal of the Chief Justice of India and Judges of the Supreme Court of India; their salaries, rights in respect of leave of absence (including leave allowances), pensions and travelling allowances.

Appointment, resignation and removal, etc., of Chief Justice and Judges of High Courts in States; their salaries, rights in respect of leave of absence (including leave allowances), pensions and travelling allowances.

Appointment of Judicial Commissioners and Judicial officers in Union Territories.

Constitution and organisation (excluding jurisdiction and powers) of the Supreme Court (but including contempt of such Court) and the fees taken therein.

Constitution and organisation of the High Courts and the Courts of Judicial Commissioners except provisions as to officers and servants of these courts.

Administration of justice and constitution and organisation of courts in the Union Territories and fees taken in such courts.

Court fees and Stamp duties in the Union Territories.

Creation of all India Judicial Service.

Conditions of service of District Judges and other Members of Higher Judicial Service of Union Territories.

Extension of the Jurisdiction of a High Court to a Union Territory or exclusion of a Union Territory from the Jurisdiction of a High Court.

advocate in noida 9953004007

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How to recover your money?

 

Be it your employer sitting on your rightful dues, your client refusing to pay you the rightful amount or a builder refraining from returning the amount he has charged you in excess, you might come across any of the unfortunate aforementioned situations. How does one deal with such a case?

Lending money to a friend or a family might horribly go wrong if they refuse to return such amount. We, the common people, unlike the banks which have a well established recovery mechanism in DRT’s, do not have any particular recovery machinery to boast of. However, there are multiple provisions and recourses available to battle out such cases and get back your money.

SENDING OUT A WELL DRAFTED LEGAL NOTICE

Before you initiate any legal action, you are supposed to serve a notice to the opposition, representing all the grievances to them and indicating your intent to initiate further legal actions.

It is a final chance given to the opposition for a resolution of the problems. There is always a chance that the legal notice might bring the defendant on heels and the case might get settled even before going into trial, through discussions and negotiations. It is very important to draft an elaborate and strongly worded legal notice, which covers everything from facts to your demand from the opponent.

In case, the opponents refuse to refund the money/ settle the matter after the receipt of the legal notice, following are the legal recourses that can be taken:

CIVIL REMEDIES

  1. File a summary suit under Order 37 of the Civil Procedure Code, in order to recover your money. Compared to normal suits, summary suits are disposed of faster. Once the suit is instituted and the summons are issued, the defendant has 10 days to make an appearance, failing which the court assumes the plaintiff 's allegations to be true and, accordingly, awards the plaintiff. If the defendant makes an appearance and asks for leave to defend, the court accepts his defence only if it is convinced that it is substantial to the case in question.

Where the matter concerns penalties or any other uncertain amount or any amount that is not a debt, one cannot file a summary suit.

 

  1. If there is a debt occurring out of a cheque bounce, then one can file a complaint under Section 138 of the Negotiable Instruments Act, 1881. As per this provision, a legal notice is to be sent to the defaulter within 30 days of receiving the cheque return memo. If the cheque issuer fails to make the rightful payment within 30 days of receiving the notice, the payee has the right to file a criminal complaint under this Section. However, the complaint should be registered in a magistrate's court within a month of the expiry of the notice period, otherwise your suit will be time-barred. If found guilty, the defaulter can be punished with a prison term of two years and/or a fine, which can be as high as twice the cheque amount.

CRIMINAL PROCEEDINGS

One also has the option to file a criminal complaint against the defaulter, with the local police under section 420 (cheating), section 403 (criminal misappropriation) and section 406 (criminal breach of trust), and initiate criminal proceedings against the defaulter by registering the FIR.

 

OUT-OF-COURT SETTLEMENTS

If the other party is willing to settle the matter, then one of the fastest and most economical ways of recovering money is to opt for an out-of-court settlement, such as arbitration or conciliation. If the matter is referred to an arbitrator, the latter hears both the parties and passes an award binding on both.

If the matter is referred to a conciliator, then he assists the parties in reaching a mutually agreed settlement of the dispute.

How to file and defend a dowry legal case in India

Dowry is a major social menace in India. Every year, countless women are victims to dowry harassment. Some are subjected to torture, while others are found dead in suspicious circumstances.

The Indian legal system, has the following laws in place, which can be used while filing an FIR against the accused-

1- In 1983 section 498-A of the Indian Penal Code (IPC) was introduced to deal with all forms of domestic violence including those which arose from “demand for property from the women and her family”. This in other words dealt with demand for dowry and also included different acts of torture that the in laws indulged in with the wife. These included beating and abusing her, sexual violence, use of cuss words, false imprisonment etc. This can lead to imprisonment for upto a maximum of 3 years.

2- When a woman commits suicide because of dowry related harassment within 7 years of being married section 304-B of the IPC which was amended in the year 1986, should be used to prosecute. The period of seven years has ostensibly been kept to ensure that the limitation period for filing suspected dowry related complaints are high.

3- Section 406 of the IPC is meant to protect “stridhan” – wealth given to bride on the eve of her marriage by the family to ensure her well being in the future. If such wealth is misappropriated by the bridegroom and his family, a non-bailable and cognizable offence is committed which can result in imprisonment for three years with fine.

4- Protection of Women from Domestic Violence Act (2005) too deals with dowry related violence and provides remedy for the same. Though this is largely a civil suit that orders protective decrees for protecting women, if such decrees are not followed the court can initiate criminal proceedings against the erring party.

5- The Dowry Prohibition Act (1960) is a landmark legislation that exclusively deals with tackling dowry exclusively. Section 2 of this act defines dowry as “give and take of any valuable property”. Section 3 and section 4 of the act deals with the punishment for giving, taking and demanding dowry. The imprisonment ranges from 6 months to 5 years and fine ranges between 10,000 rupees to the amount of dowry demanded.

 

 

In case police officials refuse to file an FIR, the State Commission for Women(SCW)  can be reached , you can find the telephone and other related details of the respective SCWs over here-

http://webcache.googleusercontent.com/search?q=cache:http://ncw.nic.in/frmliststatecommission.aspx&gws_rd=cr&ei=LHWlWavTB8XNvgSylqDoBQ

 

 

Similarly, when a man or his family, or both have been accused of dowry harassment, they can file a counter FIR under the following legal provisions-

  1. Sec 120B Indian Penal Code, 1860 – Punishment of Criminal Conspiracy – The husband or the in laws can file a legal case alleging criminal conspiracy from the wife or her relatives. 
  2. Sec 167 Indian Penal Code, 1860 – Public servant framing an incorrect document with intent to cause injury – If you believe that the police authorities are helping your wife in making false complaint and framing incorrect documents you can file a case against them alleging their false framing of documents.
  3. Sec 182 Indian Penal Code, 1860 – False information, with intent to cause public servant to use his lawful power to the injury of another person – What usually happens is that the public servant in his power does something which might not be the true, in short, a false information is circulated so as to depress the evidence.
  4. Section 191 Indian Penal Code, 1860 – Giving false evidence – If you suspect that your wife or anybody is presenting false evidence against you in the court of law or police station, you can file a case alleging that the evidence which are being used to prosecute you are false, which consequently make the whole charges false.
  5. Section 197 Indian Penal Code, 1860 – Issuing or signing a false certificate – Perjury is a crime, one can’t sign a false certificate and allege it to be true. Hence, if someone suffers because of the wrong certificate, he can prove himself innocent after showing sufficient evidence.
  6. Section 471 in The Indian Penal Code – Using as genuine a forged [document or electronic record]. –Whoever fraudulently or dishonestly uses as genuine any [document or electronic record] which he knows or has reason to believe to be a forged [document or electronic record], shall be punished in the same manner as if he had forged such [document or electronic record].
  7. Section 497 in The Indian Penal Code – Adultery – Whoever has sexual intercourse with a person who is and whom he knows or has reason to believe to be the wife of another man, without the consent or connivance of that man, such sexual intercourse not amounting to the offence of rape, is guilty of the offence of adultery, and shall be punished with imprisonment of either description for a term which may extend to five years, or with fine, or with both. In such case, the wife shall not be punishable as an abettor.
  8. Section 500 Indian Penal Code, 1860 – defamation – Reputation is man’s biggest asset. So if someone tries to defame you by any means, you can drag them to court for the harm suffered by you because of their conduct. They will be entitled to pay you damages to you in terms of compensation.
  9. Section 504 The Indian Penal Code, 1860 – Intentional insult with intent to provoke breach of the peace – Whoever intentionally insults, and thereby gives provoca­tion to any person, intending or knowing it to be likely that such provocation will cause him to break the public peace, or to commit any other offence, shall be punished with imprisonment of either description for a term which may extend to two years, or with fine, or with both.
  10. Section 506 Indian Penal Code, 1860 – Punishment for Criminal Intimidation – You can file a case of criminal intimidation against your wife alleging that she threatens you to do harm to you or your family or your property. Yet again, evidence is the only thing which can support your case.
  11. Section 227 of The Code of Criminal Procedure, 1973 – If you believe that the complaint registered by your wife is false you can file an application under sec 227 stating that the 498A case filled by your wife is false. If you have enough proofs, or if she does not have enough proof to substantiate the charges, chances are that the judge just dismisses the 498A case as it is a framed one.
  12. Section 9 of Code of Civil Procedure, 1908 – Damage recovery case – If she breaks into your home, creates a scene, and goes to ” protection officer ” and lies that you abused her “physically, emotionally or economically”, file a damage recovery case under Section 9 of CPC against her. Legally, you must issue notice on the same day or next day. The suit will continue for a long time. It has no risk.

IMAGE SOURCE- https://www.kannadigaworld.com/news/india/90128.html

Executability & Enforceability of Foreign Judgments and Decrees in India

The word foreign decree or order simply connotes a final adjudication on a point of law by a court situated outside the territory of India or simply not coming under the authority of the central legislature. The executability of foreign judgements in India is governed by The Code of Civil Procedure 1908 (CPC). Various sections under the code govern the executability of the foreign judgements such as Section 13, Section 38, Section 39, Section 40, Section 44-A and Section 45.

For the purpose of enforcement, foreign decrees have been classified into two classes: one from the reciprocating countries and the other from the non-reciprocating countries. According to Section 44A of CPC a decree from a reciprocating country is directly enforceable in India as if it has been passed by the domestic country itself if the conditions laid down under Section 13 are satisfied.

 Further a foreign decree of a non-reciprocating country can be executed by institution of a suit in the domestic courts. In the newly instituted suit the decree of the foreign court will be treated as another piece of evidence collectively with other evidence.

 The list of reciprocating countries have been notified in the official gazette by the central government. However in both the abovementioned cases the decree has to pass the test laid down under Section 13 of CPC.

Thus the whole situation boils down to determining whether or not the foreign decree satisfies the conditions laid down under Section 13 of CPC.

According to Section 13 a foreign decree becomes inconclusive if:

  • It has not been pronounced by a court of competent jurisdiction.
  • It has not been given on the merits of the case;
  • it sustains a claim founded on a breach of any law in force in India.
  • it has been obtained by fraud.
  • the proceedings in which judgment was obtained are opposed to natural justice
  • it appears on the face of the proceedings to be founded on an incorrect view of international law or a refusal to recognise the law of India in cases in which such law is applicable.

 This article would discuss in detail these conditions along with decided cases of the Supreme Court and various high courts.

Firstly, coming to Section 13(a) under which it is laid down that if a decision of a foreign court is not pronounced  by a court of competent jurisdiction it would not be enforceable. In the case of Moloji Nar Singh Rao v. Shankar Saran[1]the issue was, whether a foreign decree which was given ex parte can be executed in India. The Supreme Court pronounced that the decree cannot be executed in India due to the following reasons:

  • The respondents were not subjects of the foreign country.
  • They did not voluntarily appear in the court.
  • They did not contract to submit to the jurisdiction of the foreign court.
  • They were not the residents of that foreign country.
  • They were not temporarily present in that State when the process was served on them.

In another leading case R.M.V. Vellachi Achi v. R.M.A. Ramanathan Chettiar[2]the respondent alleged that since he was neither the resident of that foreign country nor had he submitted to the jurisdiction of the foreign court the decree should not be executed in India. The plaintiff claimed that the respondent was a partner in a firm which was located in the foreign country and thus the foreign court had the jurisdiction to try the case. The court held that it was the firm which had accepted the jurisdiction of the foreign Court, and the Respondent in an individual capacity, had not accepted the jurisdiction and thus the decree could notbe executed in India.

Further the Madras High Court in the case Ramanathan Chettiar v. Kalimuthu Pillai[3] had laid down certain circumstances wherein a foreign judgement could be applicable in India:

  • When judgements have been obtained against the concerned person on prior occasions in the foreign country.
  • When he is the resident of the foreign country in which the action had commenced.
  • Where the party voluntarily appears on being summoned
  • Where by an agreement a person has contracted to submit himself to the forum in which the judgment is obtained.

Thus these are basically the conditions which need to be satisfied fora foreign judgement to be executed in India.

Secondly, according to Section 13(b) of CPC if a foreign judgement is not given on the merits of the case then it cannot be executed in India. The fountainhead of all decisions under this head has been the decision of the Privy Council in the case of D.T. Keymer v. P. Viswanatham[4]. In this case a suit for money was brought against a partner of a firm in a foreign court. After this the defendants was asked to answer certain interrogatory questions. When he denied to answer these questions his defence was struck off and judgment was entered for the plaintiff without investigating into the claims of the plaintiff. The domestic courts in India held that the decree cannot be enforced in India as the foreign judgement had not been passed on the merits of the case.

Primarily courts in India take a very stringent view while enforcing ex- parte foreign judgements in India. However sometimes ex- parte judgements that have been passed on the merits of the case and concluded after engaging in proper investigation of the claims, have been enforced by the Indian courts.

For example in the case of Ephrayim H. Ephrayim v. Turner Morrison & Co.[5], it was held that where no defence is raised and only an adjournment is sought, and the request for adjournment is refused and the judgment is proceeded on the evidence of the Plaintiff, it cannot be said that the judgment is not on the merits of the claim. Therefore S. 13(b) of CPC will not be able to come to the rescue of the defendant.

Third, coming to Section 13(c) of CPC which states that if a foreign judgement is passed disregarding the Indian or International law then it cannot be executed in India. Avery interesting case in this regard is Anoop Beniwal v. Jagbir Singh Beniwal[6]. In this case the plaintiff had filed a suit for divorce in England on the basis of the English Act, that is the Matrimonial Causes Act, 1973. The petitioner’s complaint was that the behaviour of the respondent made it reasonably difficult for the former to cohabit with the latter- In India a slightly stricter ground than the one that was provided in the foreign judgment, was stated. The court held that the decision of the foreign court was not in contravention to the Indian law and thus enforced the decree.

Thus Section 13(c) primarily says that:

  • A judgment or decree passed by a foreign Court upon a claim for immovable property which is situated in the Indian territory may not be enforceable since it offends International Law.
  • A judgment/decree cannot be enforced in India, if a foreign judgement was rejected on consideration by a previous Indian court. However if the proper law of contract is the foreign law then this may not be applicable.

Further, according to Section 13(d) if the proceedings in the foreign court were opposed to the principles of natural justice then the foreign judgement cannot be executed in India. In the case of Hari Singh v. Muhammad Said[7]a foreign court failed to appoint a court guardian of a minor defendant and thus the domestic court did not execute the judgement saying that what the foreign court did was opposed to the principles of natural justice.

In addition, according to Section 13(e) if a foreign judgement is passed by a court due to the fraud played on it by the plaintiff then the judgement cannot be enforced in India.

In the case of Satya v. Teja Singh[8]the Supreme Court held that since the plaintiff had misled the foreign court about its non-existing-jurisdiction over the matter,-, the judgment and decree would be deemed to have been obtained by -fraud and therefore would be presumed to be inconclusive and could not be applied in India.

 Thus it can be concluded that a judgment passed in the courts of a reciprocating country could not be enforced in India if it failed to satisfy the rules laid down under Section 13 of CPC. It can be seen that, the plaintiff has to come before the Indian courts to either get the foreign judgment executed under S. 44A or file a fresh suit for the enforcement of the judgement. Therefore by getting a decree in the foreign Court, the plaintiff only avoids the inconvenience of meeting the requirements under the law of evidence applied by the Indian Courts. But when he does not institute the case in India he runs the bigger risk of dealing with the difficulties of getting the foreign judgment executed in India under the stringent conditions of S. 13. Therefore it may be advisable for a foreign plaintiff to institute claims in India itself, in case the defendant is in India.

Photo Courtesy: https://www.google.co.in/search?q=foreign+judgments+enforce+india&biw=1366&bih=623&tbm=isch&source=lnms&sa=X&ved=0CAgQ_AUoA2oVChMIx9Kb4q2cxwIVzluOCh1MjA7T#tbm=isch&tbs=rimg%3ACXCYOK9_1Rdm1Ijj6IP4BB9AXGwdBffTeM3WItO-Q3j0cHcQZ6GlVly4fW03JiDnYhWWBO51Wf2kPyiGBJmgLgHyrsyoSCfog_1gEH0BcbEQ4UlB8Xx3onKhIJB0F99N4zdYgRRh-WNUZyKTQqEgm075DePRwdxBG22SOwxInYCCoSCRnoaVWXLh9bEdxX4o9peRRYKhIJTcmIOdiFZYERg94ZK_1zc8XYqEgk7nVZ_1aQ_1KIREC0QBoe2XX1yoSCYEmaAuAfKuzEQoBcyywZWZj&q=foreign%20judgments%20&imgrc=TcmIOdiFZYF59M%3A

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[1] AIR 1962 SC 1737. It is a constitutional bench consisting of 5 judges.

[2]AIR 1973 Mad . 141.

[3]; Cf. Ibid. at p. 143 para 16. Also see Chormal Balchand Firm Chowrahat v. Kasturi Chand

[4]AIR 1916 PC 121.

[5]AIR 1930 Bom. 511 at 515

[6]AIR 1990 Del. At 311.

[7]AIR 1927 Lah. 200.

[8]AIR 1975 SC 105 at p. 117 para 50.

Revisiting Related Party Transaction laws in India

Introduction

In layman’s language, a Related Party Transaction is nothing but businesses carried out among the relatives of different companies. On the other hand, legally speaking, there are many financial and commercial legal instruments which define and provide for such transactions.

Section 188 of the Companies Act, 2013 does not disallow or prohibit Related Party Transactions (for brevity, RPTs) but in fact, lays down how the contracts or arrangements involving related parties should be made keeping in mind the interests of the company, investors and other tax compliances. It is to be noted that the definitions of related parties have been given in not just The Companies Act, 2013 but also in Indian Accounting Standards-18 which is a tax compliance rule. Additionally, under the S. 41 of the Income Tax Act, 1961, while considering the taxable status of transactions, the following have been regarded as related parties:

assessee is an individual – any relative of the assessee; (ii) assessee is a company, firm, association of persons or HUF – any director of the company, partner of the firm, or member of the association or family, or any relative of such director, partner or member; (iii) any individual who has a substantial interest in the business or profession of the assessee, or any relative of such individual; (iv) a company, firm, association of persons or Hindu undivided family having a substantial interest in the business or profession of the assessee or any director, partner or member of such company, firm, association or family, or any relative of such director, partner or member; (v) a company, firm, association of persons or Hindu undivided family of which a director, partner or member, as the case may be, has a substantial interest in the business or profession of the assessee; or any director, partner or member of such company, firm, association or family or any relative of such director, partner or member; (vi) any person who carries on a business or profession, (A) where the assessee being an individual, or any relative of such assessee, has a substantial interest in the business or profession of that person; or (B) where the assessee being a company, firm, association of persons or Hindu undivided family, or any director of such company, partner of such firm or member of the association or family, or any relative of such director, partner or member, has a substantial interest in the business or profession of that person[1].

Therefore, it is always better to go through the section in the company’s annual report which details related party disclosures to get a fair idea of the operative mechanism of the company.Globally speaking, in countries like South Korea, RPTs act as a tool to transfer wealth from one generationof controllers to the next in avoidance of inheritance taxes.[2] In business adverse jurisdictions with stringent tax system, RPTs is a way of accruing private benefits.

 

Impact of RPTs

The RPTs have a tendency to adversely affect the financial health of the corporates by the undesired influence or control or joint control on the policies of the administration and operation of companies. The corporate wealth can be misappropriated by reducing the profits to the outside investors and shareholders. Tax evasion is also accompanied with such actions by managers of the company-. The best corporate governance practices are thus challenged owing to poor monitoring and disclosure policies of the companies in case of RPTs. Recent corporate scandals have heightened the concern to understand the phenomenon. Accounting frauds in Enron, Tyco, Parmalat, and Satyam are glaring examples of the same.[3] There has always been an incessant effort made to highlight the significance of transactions done based on arm length principle (usually, the parties to the transactions act independently without showing any personal interest in the business).

 

Let’s look at the laws in place

RPTs under Indian Accounting Standards

Under AS 18, related party includes[4]:

Enterprises, directly or indirectly, controlled by one or more other enterprises;

Associates or Joint Ventures of an enterprise;

Individuals who own interest in the voting power of an enterprise and are in a position tosignificantly influence the enterprise;

Key Management Personnel and their relatives;

Enterprises which share common directors.Now comes the analysis part, if we compare the two definitions, we will come to know that AS­ 18 is wider in purview than the Companies Act. The Companies Act requires approval only when a director and his/her relatives are involved in the transactions. However, even if substantial interest is involved if the key management personnel (i.e -a director), is not involved in any transaction, the approvals are not required-. In this way, AS-18 takes a lead because it requires the approval from all key management personnel transacting with related parties.

 

Disclosures

Presence of parent or controlling company is to be revealed in the financial statements irrespective of the transaction between the two[5]. However, before the Ministry of Corporate Affairs gave a clarification through a circular issued in 2014, to exclude mergers and acquisitions transactions from the purview of related party transactions (RPT) provision in the new company law. Prior to this, there were much speculations u/s 188 since the provision was not clear.[6]

Under both CLA, 2013 and SEBI Code, approval of the shareholders through special resolution needs to be obtained in addition to the requirement that the related parties must abstain from voting on such resolutions. But, the problem with this might be the rising of doubts in the minds of minority shareholders who have every right to disapprove a non-abusive RPT without wholly examining the proposed transactions. Not only this, it is highly imperative on the part of independent directors on the board to effectively monitor and identify the RPTs. Until these things materialize, Indian capital markets will continue to suffer.

 

Conclusion

Further, Auditing and Assurance Standard 23­ Related Parties impose duty on auditor to identify and disclose the related party transaction in the financial statements of the company. This is in correspondence to the roles of auditors in a company.

Photo Courtesy: https://www.google.co.in/search?q=related+party+transaction&biw=1366&bih=612&source=lnms&tbm=isch&sa=X&ved=0CAcQ_AUoAmoVChMIhIutk8LhxgIViweOCh1VsQiR#imgrc=F8HmOobZKtdc9M%3A

http://www.thehindubusinessline.com/iw/2002/12/08/stories/2002120800520600.htm

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[1] Definition of Related Party – A Comparative Analysis
CORPORATE LAW REPORTER http://corporatelawreporter.com/2013/02/22/definition-related-party-comparative-analysis/ last accessed 12/7/15
[2]Luca Enriques, Related Party Transactions: Policy Options and Real-world Challenges (with a Critique of the European Commission Proposal), HLS Forum
<http://corpgov.law.harvard.edu/2015/06/04/related-party-transactions-policy-options-and-real-world-challenges-with-a-critique-of-the-european-commission-proposal/>   last accessed 12/7/15
[3]Padmini Srinivasan, An Analysis of Related-Party Transactions in India, http://www.iimb.ernet.in/research/sites/default/files/WP%20No.%20402_0.pd last accessed 12/7/15
[4]See Supra note 1
[5]IAS 24 — Related Party Disclosures, DELOITTE
http://www.iasplus.com/en/standards/ias/ias24last accessed 14/7/15
[6]K R Srivats, M&A deals, de-mergers not to attract related party provision in new company law, THE BUSINESS LINE

<http://www.thehindubusinessline.com/companies/ma-deals-demergers-not-to-attract-related-party-provision-in-new-company-law/article6228970.ece> last accessed 13/7/15

FAQs: Registration of Property.

 

The registration of property that is land, flat, shop, garage or other things are mandated by the three laws such as Transfer of Property Act 1882; The Indian Contract Act 1872; The Registration Act 1908; Hindu Succession Act 1956; Indian Succession Act 1925 and such other municipal laws, local laws and bye laws.

One should be aware that whenever someone purchases any immovable property[1] (like, land, building etc and not tractor, gold etc) which is valued at or above Rs. 100, he would have to get such a property registered with the local registration office. It is easy to locate the local registration office for this purpose-the municipal corporation within which the buyer resides would be considered as the right place.

The buyer has to appoint an advocate for carrying out the registration of his property[2]. Though a buyer can get the property registered with the local registry office[3] also he can register any property situated in the State of West Bengal at ‘The Registrar of Assurances” situated opposite to the Governor house in Kolkata.

The buying and selling of such immovable property is considered legal when an “agreement of sale[4]” is drawn up. Such deed of sale must contain every minute particulars[5] relating to the property. For instance in case of sale of a flat by a promoter to an individual buyer the deed of sale should lay down specific details like: the material used to do the flooring (Mosaic or marble or tiles) the material used to make the walls, the kind of doors (Iron gates or steel gates) installed; the kind of water facilities installed; the percentage of common area that comprises the stair case, terrace lift, water tank, reservoir.

Note here, that many a times promoters try to get away with delivering less services than what is expected of them. Usually a small clause is put into the agreement which puts the liability of construction of “better reservoir facilities” upon the buyer on the payment of an extra fee. It is better for the buyer to be cautious of such clauses and ensure that every tiny details such as these is notified explicitly in the contract. This would give the buyer the right to sue the promoter for specific performance of the suit if the latter doesn’t keep to his promise.

The deed of sale must also contain the method (cheque, cash, demand draft) and the amount of payment that is to be made by the buyer. A payment schedule contains these details.

The buyer usually pays[6] the per sq. ft. rate based upon the total area (i.e. super built up + carpet area). Now, super built area is calculated upon other amenities provided in the complex in which the building is located. For instance, if the promoter provides common facilities like lift, swimming pool etc then the super built area is calculated as 25%-30% (depends on the construction manifesto) of the Carpet Area. Whereas if these common facilities are non existent then the super built area is calculated at 20% of the Carpet Area. Do check the construction manifesto carefully to know the exact percentage that applies to you.

For eg., If an apartment has a common lift; and the carpet area purchased is 600 sq. ft.—the super built up area would be (25/100*600=150 sq ft). In other words the buyer would have to pay to the seller a total amount on the total area of 750 sq ft (600+150 = 750 sq. ft).

            Steps for registration:

The first thing the buyer must do is engage in the process of searching the property (be it a new property or an old property). Searching has to be done before agreement of sale is drawn up between the parties. This helps in identifying possible sales that a fraudulent promoter could have engaged in. This is a critical step in the process of buying and registering a property, since there are abundant cases pending before the court where the same property has been sold to more than one parties.

The buyer has to pay the stamp duty upon the market value which is obtained from the registration office after submitting the details of the buyer and seller along with the sale agreement. Incase the property is located in one of the places where the land was given as refuge land, then the photocopy of the mother deed of the land would be required. This process is called obtaining the valuation/query[7] of the property. This is primarily a clerical work and the buyer can himself visit the registration office and get it sorted.

The query takes about three working days. After this the same has to be handed over to the advocate for preparation of the draft of the registration/conveyance deed.

 

The query obtained shall contain terms such as, market value, set forth value, stamp duty, registration fees etc. The amount of fees is calculated upon the market value. An additional 1% is charged if the market valuation exceeds 25 (twenty five) lakhs of rupees. Now there are two types of fees:- registration fees and stamp duty which the government receives when a property is sold/brought. The registration fees has to be paid in cash to the office and the stamp duty has to be paid by demand draft by the buyer. The Stamp duty can also be paid through electronic transfer such as NEFT. But if the buyer wishes to make the payment through the NEFT facility he would have to ensure that the payment is made within 30 days from the date on which the query/valuation of the property is procured. Whereas if he chooses to pay by a demand draft he would enjoy an extra buffer period of 14 days (the time period for payment through demand draft is 44 days). The deed of conveyance has to be printed on a stamp paper. Such stamp papers come in various valuations: like Rs. 500, 1000, 5000[8].

The procedures in between the registration date and submission of the documents in the registration office for registering the property involves making what is popularly called “volumes”. In a crude sense, volumes refers to “big green official papers” where every minute details of the property is recorded, including the names of old buyer and new buyer and such other details which the office intends to record. This is not something a buyer should be concerned with. It is primarily the duty of the advocate engaged for this purpose.. For example: If the market value of the property is 45 lakhs, then the fees is calculated @8.2 % of 45lakhs. The amount arrived at would be termed government fees. The buyer other than this has to pay the fees of the advocate which ranges from 0.5 to 1 or up to 2%. The advocate’s fees is steep when he seeks to take up additional tedious responsibilities like sorting of the following things on behalf of the client like— obtaining the query, drafting and typing the deed; paying the volume fees, the clerk fees and such other fees as is required. For more information you can visit: http://www.wbregistration.gov.in/(S(ddoa4qstlcfmlrx0awcygsyk))/Stamp_duty.aspx

The buyer is given the opportunity to propose a desired date for the registration of the property. If the office agrees to that date, the buyer has to be present at the registration office along with the seller, witness, landlord and such other persons as is required by the said office. There are two witnesses (each from the buyer and the seller) required to be present for the process of registration. The new regulation of obtaining[9] the query requires the seller to give the name of a person (known as the ‘identifier’) and his details who has to be present on the day of registration.

For those of you who find the above process (of visiting the registration office) cumbersome, there is another option called “commission[10]”. If you avail of this option, on payment of an extra fee, you could get the registrar and his staffs to come over to your place (the new property) to complete all the formalities of registration.

After the completion of the registry the buyer has to usually wait for one month to receive the original registry deed. This usually depends upon the functioning and efficiency of the registration office. But once the buyer gets the original deed of the property, he can keep it with himself. There is no legal requirement for him to deposit the deed at any government office. The position would however slightly change if the buyer seeks to obtain a loan from a bank against this newly purchase property. He would then have to deposit the original deed with the bank as a security.If the buyer loses the original deed of the property, he could get hold of a duplicate copy of the same after having registered an FIR/GD[11] and paying the required fees. This is possible because the buyers’ lawyers usually makes a photocopy of the original deed and keeps it in the office. Though this is not something that the buyer should be concerned with, it would be good for him to confirm with his lawyer if the same has been done.

 After the completion of the process of registration, the buyer has to initiate the process of mutation[12]. Mutation essentially is the process that allows you to pay property tax to the government. Every year a bill is sent from the municipality/corporation or sometimes one has to go to the municipality himself and pay the tax on a yearly or quarterly basis.

The buyer should ensure before making the final payments for the purchase of the property if the promoter has complied with all the promises he made regarding construction of the apartment. Do note that a part of sum can even be paid later[13] even after the completion of the registration process (this all depends on your negotiating abilities).

Upon taking delivery of the flat the buyer must obtain the NOC[14] and possession letter from the promoter and be verify if there are any pending taxes required[15] to be paid by the promoter. If the buyer does not get this clarified, and if there is tax amount due, upon possession of the apartment, the entire liability of payment of the taxes would shift from the promoter to the buyer.

There is a possibility of the promoter requiring you to engage the services of his designated advocate and telling you how that is a mandatory requirement under law. He could also that that it is important to do so in order to avoid potential legal problems pertaining to the property. Do note that there is no such limiting clause placed upon the buyer by law. The buyer can very well appoint his own personal Advocate for carrying out the work.

Also remember to inform your advocate who handles your income tax returns about the purchase/sale of any immovable property. If you don’t, you could fall on the wrong side of the law. The details of buying/selling of properties in a year has to be informed to ones’ income[16] tax advocate also so that it is recorded in the balance sheet[17]. It is advised that the buyer seeks the assistance of his advocate while choosing the mode of payment for the property (cheque, cash, demand draft etc).

There could be other smaller aspects (not covered in the blog post) involved in the purchase and sale of property. It is best to seek the assistance of a real estate and tax lawyer for the same before venturing out in the buying and selling of immovable property.

There are a couple of other things that you need to be aware of to avoid yourself from landing in any unpleasant situation are as follows.

A.There is a possibility of the promoter requiring you to engage the services of his designated advocate and telling you how that is a mandatory requirement under law. He could also that that it is important to do so in order to avoid potential legal problems pertaining to the property. Do note that there is no such limiting clause placed upon the buyer by law. The buyer can very well appoint his own personal Advocate for carrying out the work.

B.Also remember to inform your advocate who handles your income tax returns about the purchase/sale of any immovable property. If you don’t, you could fall on the wrong side of the law. The details of buying/selling of properties in a year has to be informed to ones’ income[1] tax advocate also so that it is recorded in the balance sheet[2]. It is advised that the buyer seeks the assistance of his advocate while choosing the mode of payment for the property (cheque, cash, demand draft etc).

There could be other smaller aspects (not covered in the blog post) involved in the purchase and sale of property. It is best to seek the assistance of a real estate and tax lawyer for the same before venturing out in the buying and selling of immovable property.

 

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http://www.covermiles.com/investment/property-registration-points-to-remember/

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[1] Section 139(1) of Income Tax Act.

[2] Section 139(1) of Income Tax Act.

[1] Part III OF REGISTRABLE DOCUMENTS u/s 17: Documents of which registration is compulsory of The Registration Act available at http://dolr.nic.in/acts&rules/registrationact(1908).htm .

[2] Hiring an Advocate is necessary as the ‘deed of conveyance’ (the official sealed and stamped document which you receive from the registration office basically saying you are the new owner of such and such property) has to be prepared based upon the agreement of sale and other documents available with the buyer and such work is entirely based upon the legal frameworks such as the present laws and other norms that have to be compiled with. The advocate also studies the agreement of sale in case of purchase of new flat and in case of resale he checks the present conveyance deed. It is prudent to allow the advocate to oversee all the above issues and avoid the possibility of incorrect statements.

Depositing the fees can also be technically done by the buyer himself but since an advocate is a regular visitor of the court, adept at handling such issues on an everyday, it is advisable that the buyer employs the services of an Advocate to check the veracity of receipts and vouchers involved in the transaction.

[3] Part V and XI of the Registration Act 1908.

[4] – Section 54 of Transfer of Property Act.

[5] Terms of contract which has been agreed between the parties under the Contract Act Indian Contract Act 1872.

[6] Municipal laws Kolkata Municipal Act, West Bengal Land Reforms Act 1955 Laws; West Bengal Premises Tenancy Act, 1997; West Bengal Estate Acquisition Act, 1953.

[7] Mainly known as the e-assessment slip issued by the Directorate of Registration & Stamp Revenue covered under PART XIII: OF THE FEES FOR REGISTRATION, SEARCHES AND COPIES under section 78 of the Registration Act.

[8] Please note that only the first page has to be purchased for such cost which is known as the stamp paper. (the other pages of the deed of conveyance are the regular green legal sheets)

[9] The office of the Registrar of Assurances Kolkata has been computerized, which now mandates supplying every minute details of the property, buyer, seller, identifier along with bank details.

[10] Section 33 and 32 of the Registration Act 1908.

[11]– Depending on the quantum of the property in question the police registers a case of FIR or GD. Both of them are valid under law

[12] Mutation of Names in the R.O.R.s (Record of Rights) under section 50 of WBLR Act, 1955 available at http://banglarbhumi.gov.in/banglarbhumi/(S(mgexizvmyggg0dvngwnh4tji))/ASP%20PAGES/lr_mutation.aspx.

[13] It can be treated as due diligence of the buyer referred under the terms of the contract which has been agreed between the parties in the agreement of sale.

[14] The is the duty of the promoter to handover the NOC and Possession certificate upon completion of payment but the buyer should be aware that he needs to receive the documents before registration is completed.

[15] The buyer before buying any property should ask for the latest tax receipt paid buy the present owner/seller. The same can be verified in the local municipality office.

[16] Section 139(1) of Income Tax Act.

[17] Section 139(1) of Income Tax Act.

What Is The Procedure To Change Your Attorney In The Middle Of The Case

Right to justice is one of the fundamental rights and one of the primary rights of any individual. The Preamble to the Constitution of India guarantees to all citizens, social, economic and political justice. One of the prime objectives of the Indian Judicial system is to ensure that justice is given to all. The most important players of this system among others are the Judges and advocates; one who decides and one who helps the people to get justice. Advocates, in addition to being independent professionals, are also officers of the Courts and play a vital role in the administration of justice. Accordingly, the set of rules that govern their professional conduct arises out of the duty that they owe to the Court, their clients, their opponents and fellow advocates.[i]

 The professional standards that an advocate needs to maintain are mentioned in Chapter II, Part VI of the Bar Council of India Rules. These rules have been placed under Section 49(1)(c) of the Advocates Act, 1961. Under Rules on ‘An Advocate’s duty Towards the Client’ following practices are mentioned:

  • An advocate is bound to accept briefs
  • An advocate should not to withdraw from service
  • An advocate should not appear in matters where he himself is a witness
  • An advocate must make full and frank disclosure to client
  • A advocate must uphold interest of the client
  • An advocate should not suppress material or evidence
  • An advocate should not disclose the communications between client and himself
  • An advocate should not be a party to stir up or instigate litigation.
  • An advocate should not act on the instructions of any person other than his client or the client’s authorised agent.
  • An advocate should not charge depending on the success of the litigation
  • An advocate should not receive interest in actionable claim
  • An advocate should not bid or purchase or transfer property arising out of legal proceeding
  • An advocate should not adjust fees against personal liability
  • An advocate should not misuse or take advantage of the confidence reposed in him by his client.
  • An advocate should keep proper accounts and not divert money from accounts
  • An advocate should intimate the client on amounts
  • An advocate should adjust fees after termination of proceedings
  • An advocate should provide copy of accounts
  • An advocate should not enter into arrangements whereby funds in his hands are converted into loans.
  • An advocate should not lend money to his client
  • An advocate should not appear for the opposite parties

  If an advocate fails to fulfil any of the duties towards his/her client or the performance of the advocate is not satisfactory to the client, the client can at any point of time prior to the ending of the case, change his pleader for any reason. The client can take such a decision for whatever reason; because even though the client hired the services of a professional, he/she is still ultimately responsible for his/her own legal affairs. If there is reason to believe that, there is a problem one needs to speak up and take responsibility for fixing it.[ii]

 This absolute right remains even if the advocate has rendered valuable services or the client owes the advocate his fees. Although a client does not need to have a reason, common circumstances for changing an advocate include[iii]:

  • An advocate’s conflict of interest
  • Differing case strategies or personality conflicts
  • A change in the pleadings or parties of the case
  • A change of the Court hearing the case
  • Expanded legal needs which the advocate fails to fulfil

When an advocate is appointed by a client for a certain case under Order 4 of Civil Procedure Code, 1908 the pleader has to file to the Court a duly signed written document by the client, which is termed as a Vakalatnama. In case a client is not satisfied with the lawyer, then first, the client should discuss it with the lawyer, and resolve the issue amicably. If it is not resolved then he might ask for a No Objection Certificate (NOC) on the Vakalatnama or on other documents related to the case. This is an easier way. But in case the advocate does not agree to give a NOC, then the person can issue a notice of termination to the advocate and apply to the court for withdrawal of Vakalatnama. Order 3 of Civil Procedure Code gives aggrieved persons the right to choose one’s pleader. Therefore changing of pleader with the leave of the Court is possible. The new pleader should submit a duly signed Vakalatnama to the court. Hence it is possible to change one’s pleader. In a few cases problem arises with the case history. If the pleader fails to give it to the client, the client can apply for the order sheet by an application to the Court.

Though right to justice is guaranteed by the Indian Constitution; way to justice is to be made by the person seeking justice. Hence, although the pleader is going to appear before the court the full responsibility rests on the instituting or defending the suit or criminal proceeding. Therefore, if the appointed attorney is not fulfilling the purpose then the client can at any

[i]  http://www.barcouncilofindia.org/about/professional-standards/rules-on-professional-standards/

[ii] http://research.lawyers.com/replace-a-lawyer.html

[iii]  http://research.lawyers.com/changing-attorneys-mid-case.html

What can you do if someone owes you money and does not pay you back?

Before legal action is taken against a debtor,the claim should be brought to his or her notice to make sure that the debtor is aware of the fact that the debt has not been paid back. A letter should be sent to the debtor containing important details and specifics. This should include information concerning the debt, for instance, how the debt was incurred, the original amount of the debt, when the last payment was made, and the current amount that is due to be paid back. The letter should also mention information regarding the paymentarrangement, providing the debtor with a phone number or an address in order to get back to the creditor.Most importantly, a due date should be provided to the debtor mentioning by which date he or she must make payment arrangements in totality. The idea is to choose a reasonable date and allow the debtor some time after he or she reads the letter to repay the debt. Also time must be given for the debtor to respond. At this stage, it is better to motivate the debtor rather than throw him/her into panic. A copy of this correspondence should be saved.

If this date passes without any payment of the debt being made or any indication of it being paid in the near future, one could send a letter of demand from a lawyer’s office, before commencing any legal action. The problem may be solved by way of negotiation[1].

If this too fails, either by way of the debtor not responding or refusing to make the payments, it may be necessary to institute legal proceedings against the debtor. Relevant papers in one’s possession that are related to the amount due (debt)debt or any documents of a similar sort including a copy of the correspondence between oneself and the debtor should be kept.

The limitation period for filing a civil recovery suit in India is 3 years. After that the claim is barred by time. It is imperative to decide which Court of law one should file their suit for recovery. In India, according to the Civil Procedure Jurisdiction, the pecuniary or monetary jurisdiction of the Courts depends on the state in which the cause of action arises. The pecuniary jurisdiction of the Court divides the Court on a vertical basis, which means that depending on the valuation of the suit filed, there are different levels of Courts with different monetary jurisdictions, and the suit will have to be instituted in the Court which has the required jurisdiction.  For example, the pecuniary jurisdiction of the Courts in Delhi areas follows:

  • Suits amounting to Rs.1 – Rs.20, 00,000/- lie before District Courts.
  • Suits over and above Rs. 20,00,000/- lie before the High Court.

It is essential to remember that the amount of pecuniary jurisdiction is different for all High Courts in India. This limit is decided by respective High Court Rules and in many states the High Court has no pecuniary jurisdiction. All civil suits go before the District Courts, and only appeals lie before the High Court.  The creditor, that is the one who owes the will have to determine in which Court the claim can be filed, which in turn shall be determined in accordance with the amount claimed. If the Court finds that it has no jurisdiction to entertain the, it shall transfer the suit to the Court having jurisdiction. In order to verify the pecuniary jurisdiction of the Courts in a particular state, one must refer to the rules determining the pecuniary jurisdiction of the district courts which have original jurisdiction[2].

The parties can appear in Court on their own, but it is not uncommon to be represented by a lawyer. If one does not appear, the Court or Tribunal can dismiss or adjourn the case. If either party does not appear, the other may obtain the judgment by default. Any promissory note, contract made, or any other documentary evidence of the debt should be provided to the Courtby the debtor, or his or her attorney. One should make such copies of any evidence to be submitted. Both parties will be given the opportunity to explain their stands before the court. If the court gives judgment against the debtor the amount that the debtor has to pay, including court costs becomes payable immediately from the date of judgment. This judgment could be obtained following the hearing of the case,or in the situation of the non-appearance of one of the parties, on default. If one is dissatisfied with the judgment, one can always appeal to the High Court. In case one finds the proceedings to be long winded or elaborate, it is best to consider hiring a lawyer, who are well-versed in the procedures of Courts and Tribunals.

[1] :“Contracts. Illegal Contracts. Recovery of Money Paid”, Virginia Law Review, Vol. 4, No. 8 (May, 1917

[2] Civil Procedure with Limitation Act, 1963 by C.K. Takwani (Thakker), 7th Edition, 2013, Reprinted 2015, along with Sanjiva Row’s The Limitation Act, 1963, II Vols. 9th Edition

Transfer of Civil Suits

Today we have come a long way from the times when ‘an eye for an eye’ was the norm. We now have established institutions to take care of any conflict or dispute that arises in our society. However, our awareness and education about the due process and procedure of these Courts have not grown proportionately and a major chunk of our population is unaware of their rights and procedures of Courts. This article will try to throw some light on the process behind the transfer of civil suits in India.

 In every civil dispute, the plaintiff has the right to decide the forum where he/she wishes to institute the suit provided it has the jurisdiction to try the suit. However, in such cases where more than one forum is available and even otherwise, this right of the plaintiff is limited by the power of superior Courts to transfer or withdraw the case from a subordinate Court to another Court. Sections 22 to 25 of the Civil Procedure Code, 1908 deal with the law relating to transfer of civil suits.

 Section 22 of the Civil Procedure Code (CPC) interferes with the right of the plaintiff to choose the forum of his choice where more than one Court has jurisdiction to try the suit. It gives the defendant the option to get the forum changed if the forum chosen is causing great hardship and inconvenience to the defendant. The main factor to be considered is the balance of convenience.[i] It is important that the request for transfer of suit is made at the earliest possible instance and after giving notice to the plaintiff.[ii]The Courts exercise discretion in these transfer applications and the burden lies upon the applicant to show to the Court that predominantly the balance of convenience is on his side. It is the prime consideration for transferring the suit. [iii]Generally in matrimonial disputes where the wife is unable to bear the expenses of travel and other ancillary costs of the suit, the Courts have transferred the case to the wife’s place of stay.[iv] Section 22 has to be read along with section 23 of CPC, which provides for the forum wherein the applications under section 22 have to be moved. The application has to be made to the Appellate Court to which both the Court where the suit is pending and to where the suit is sought to be transferred are subordinate. In cases where, the two Courts are subordinate to different Appellate Courts but the same High Court, the application has to be made to the High Court. In all other situations the application is made to the High Court within whose jurisdiction lies the Court where the suit is pending.

 Section 24 of CPC extends the option of getting the forum changed to either party to a suit and gives them the option to move an application for transfer of suit to another Court. This section also empowers the High Court to suo moto (on its own motion) withdraw any case from a subordinate Court and adjudicate on it or transfer it to another Court. The High Court exercises its powers under this section keeping in mind the interest of justice and convenience of the parties. It is to be ensured that unnecessary inconvenience is not caused to any party.[v]  Some other grounds for seeking the transfer of suit are prejudicial approach of the Court from which transfer is sought. However this apprehension of prejudice must be reasonable.[vi] Mere presumptions or possible apprehension cannot and should not be the basis of transferring a case from one Court to another. The power of transfer of a case from one Court to another has to be exercised with due care and caution bearing in mind that there should be no unnecessary, improper or unjustifiable stigma or slur on the Court from which the case is transferred[vii]. Sometimes a transfer is sought when two or more related cases, with similar parties and subject matter are being tried individually so that they are clubbed together and tried or adjudicated upon in one Court.[viii] However, the power of the High Court under Section 24 does not give it the power to transfer cases from Courts in one state to another.[ix]This limits the power to transfer cases within its jurisdiction.

 Section 25 gives the Supreme Court the power to transfer a case from any Court in the country to any other Court in any state whether or not the Court has jurisdiction to try the suit. This power is however exercised very sparingly where it is expedient for the ends of justice.[x]The section mandates that every application under it is supported by an affidavit and it may be dismissed with cost if found to be vexatious and frivolous. The law, which governs the suit that has been transferred to another Court, is the law that the Court where the suit was initially instituted would have applied. The exercise of discretion under this section cannot be for reasons like balance of convenience, it can only be exercised when it is necessary for justice or else there would be denial of justice.[xi]What ‘justice’ means is very subjective and no clear cut definition of it is possible.  It is to be seen on a case-to-case basis.

 To summarize the relationship between the sections discussed above it may be said that Section 22 can be invoked only by the defendants whereas Section 24 gives either party to a suit the right to get the suit transferred but this transfer sought must be within the state. To get the case transferred from one state to another, one has to approach the Supreme Court and such a transfer is allowed only for very compelling reasons. The ends of justice, fair trial and principles of natural justice are kept in mind while disposing of such applications for transfer of suits.

 Procedural law is the backbone of the legal system; it not only facilitates but also ensures that justice is done. The lack of proper and fair procedures can often lead to injustice and chaos. However, we must not let procedures come in the way of substantive laws and justice and one way of doing that is by educating ourselves about the procedures that govern our court system. “A journey of a thousand miles begins with a singe step”- I hope this article will help serve as that single step and help you if you ever find yourself in a predicament when you want to get a lawsuit transferred to a more preferable location.

 [i] Shri Seetha Mahalakshmi Rice and groundnut Mill v. Rajesh Trading Code, AIR 1983Bom486;

[ii] Shiv Kumari Devendra Ojha v. Ramojar Shitla Prasad Ojha, AIR 1997 SC 1036

[iii] Jagatguru Shri Shankracharaya Jyotish v. Ramji Tripathi, AIR 1979 M.P. 50

[iv] Mona Aresh Goel v. Aresh Satya Goel, AIR 2000 SC 3512(1)

[v] K. Meenambigai v. Poovanandan, MANU/TN/1193/2008

[vi] Nandini Chatterjee v. Arup Hari Chatterjee, AIR 2001 Cal 26

[vii] Rajkot Cancer Society v. Municipal Corporation, Rajkot, AIR 1988 Guj 63

[viii] Pitamber v. Shantilata, AIR 1987 Ori 45.

[ix] http://www.thehindu.com/todays-paper/tp-national/hcs-cannot-transfer-civil-cases-outside-state/article1348009.ece

[x] http://www.legalserviceindia.com/Supreme-court/Transfer-of-Petition-in-India.htm

[xi]  Dr. Subramaniam Swamy v. Ramakrishna Hegde, 1989 SCR Supl. (1) 469