FLAW IN THE LAW

Prof. Irving Younger of the Cornell University suggested that Our Judges should evolve the doctrine that “no law is enacted unless legislators voting for it have read it.” By this test, predominant laws passed by the Indian parliament and the State legislatures would have to be invalidated. The Companies Act, 2013 is one such legislation.

Company is a dominant institution in our Society and the Company law governs such dominant institution. Company law is a well-recognised subject in the legal curriculum and a voluminous literature too.

In our Country, the Company law has been enacted for the 6^th time with the title, ‘the Companies Act 2013’. This is the first time, a Fresh law for Corporate has been passed after the implementation of New Industrial Policy, 1991 i.e. Liberalisation, Privatisation and Globalisation. This Modern Companies Act, 2013 replaced the vintage Companies Act, 1956. Unlike Companies Act, 1956, this is a rule based law. Many provisions of this Act are determined by the Rules, which shows that delegation is the character of this legislation.

The Act carries certain appealing new concepts such as one person Company, Women Directors, Independent Directors, Prevention of Insider Trading, Corporate Social Responsibility, Class Action suits, Registered Valuer, rotation of Auditors, Dormant Company, Fast Track mergers, Serious Fraud Investigation office and Tribunals. However, the charm of the previous law was exceedingly appreciable than this modern law in regard with drafting.

A democratic State must make an unambiguous, precise and Comprehensive legislation. Law must be readily intelligible, because legal literacy is scarce in our country. However, this Act is often obscure and circumlocutious. Sentences are long, legally meaningless words and phrases, tortuous language, the preference of double negative over the single positive, abound.

The Legislative literature and language governs our activities in almost all spheres. It has considerable control over our lives. Such a language of this law is much poor. Many times, the Drafting is erroneous. A popular English jingle once published in London Times enlivens this criticism:

I am the Parliamentary draftsman;

I compose the country's laws.

Of half the litigation in the nation,

I am undoubtedly the cause.

The Cardinal fault of the new pattern of Company law is its absolute instability and uncertainty. Not a month passes- sometimes not even week – without some material changes in the Companies Act, 2013.If I could comment in the words and style of legal legend Nani Palkhivala, ‘Nowadays Companies Act is like a railway ticket – good only for one journey in a time, from the beginning of a week till the end of the same week and sometimes not even for the whole journey’. Such unsteadiness is defended by the cabinet as “Making the business ease in India”. Are we ceasing the law, for easing the business in India?

Foregoing critics are not cynical and it can be proved by following statistical supports with the actions of Ministry of Corporate Affairs. Within a span of 650 days from the date of enactment – 34 Amendments in Rules, 28 notifications were made, 56 Circulars were passed and 2 times Act itself was amended. Is it not showing the quality of drafting of this law?

With the precision of such lacuna in their own draftsmanship, they inserted section 470 in this Act namely “Removal of Difficulty Order”. Through this Section, if any difficulty arises in giving effect to provision of this Act, the Central Government may publish an Order in the Official gazette for removing such difficulty with ease. These Orders can be made for a period of FIVE years from the date of this enactment. This provision is a bonanza offer given by the draftsman to themselves, for rectifying their own obscure drafting. Again the terminology “difficulty” is ambiguous. Might be the Erroneous or ill drafting of the so called draftsman is termed as “Difficulty”. Already this provision has been triggered for 10 times. Much notable point, in the past such removal of difficult order were not there in five previous corporate law legislations.

Numerous instances where such poor drafting is evident. Usage of the word “OR” in the place of “AND”. A section uses antithesis in the same sentence such as “NOT EXCEEDING” and “HIGHER”, which paves way for absolute contradictions and creates redundancy of a word. There are cases where contradictions between the Act and Rules framed and some arbitrary numbers too.

Professor A.L. Diamond quoted once “The limited liability corporation is the greatest single discovery of modern times. Even steam and electricity are less important than the limited liability company”. Might be a thing which necessitates a grander admiration than such Limited liability Corporation is ‘legislation for Companies’. Is it not absolute responsibility of the draftsman to draft such laws with caveat?

Such a vital law of the economy was passed in the parliament in few minutes with no deliberations or discussions in the parliament. Is it not the obligation of the parliamentarians to pass such a bill with adequate debates and remove the flaws before the bill turns to be a law? Such an ill-drafted law which requires immense treatment before the learned parliamentarians, albeit it was passed without any considerations.

Of course, all measures are taken by the Government to amend the law and clarify the issues in nexus with implementation of Companies Act, 2013 including the Constitution of Expert Company law Committee. However, this is an indispensable treatment for curing the disease after the detection of ill in the law making process rather than preventive relief which was the prima facie requisite while drafting the law in the democratic nation. After all, these amendments restores the Companies Act, 2013 to the position of the Companies Act, 1956. Then, what is the requisite of this new law and few amendments in the Companies Act, 1956 would have done this trick.

Frankly speaking, there were no much flaws with Companies Act, 1956. It is a well drafted law that has stood the test of time. It was not such outdated law for replacement. It has ample provisions for the prosecutions. So, the fault not lies in our law but in their execution.

 A Corporate law takes a life of its own. It moves along under the guidance of its appointed functionaries who sometimes function well, but sometimes they also function badly. So, such a law develops its own ethos. It ultimately fulfills the destiny of the economic character of the country for which it is written – if it lasts! The lesson about written corporate legislation is that they do not function on their own. A special effort has to be made by the custodians – those entrusted with their functioning – to work them.

Confucius, a great Chinese Teacher, politician and philosopher said, “When the State of Zheng (Center of Ancient China) formulates a law, Pi Chen first makes a draft, and Shi Shu gives his comments. Then the draft will be edited by Zi Yu and finally the draft will be polished linguistically by Zi Chan. The documents of law formulated by these four wise officials seldom contain mistakes.” What a state of bliss!

When such an ecstasy shall happen in the legal atmosphere of our Country. Time has to come for a flawless and lawful Companies Act. If the experts are imbued with a spirit of dedication and wisdom were to be installed into the Cabinet and were to be allowed with requisite freedom of Action, the parliamentarians could transform this Country into one of the greatest economic powers.

LIFTING THE VEIL OF MAHATMA

ARE WE SPENDING CRORES TO PORTRAY A MAN AS A POOR, INTELLECTUAL, SYMBOL OF NON-VIOLENCE, MAHATMA, OR FATHER OF THE NATION???????

On 18^th of June 2012, Shymala Mohan, Director and Central Public Information officer (CPIO) clarified to a Right to Information Act application that “Gandhi is not conferred with the title of the Father of Nation by the Government”, although he is popularly known as the same.

The Net result of the last 60 years is one Man is glorified at the ignorance of the innocent Indians. Mohandas Karamchand Gandhi was deified. Indeed, no one is idolized these days the way he is. He is portrayed as flamboyant lawyer, Human activist, and freedom fighter. His birthday is declared by the Government as Public holiday and commemorated at world-wide as the International Day of Non-Violence. He is pronounced as the Mahatma (High souled or Venerable in Sanskrit) and Bapu (Endearment of Father in Gujarati).

If I could use the words of Mr. Arun Shourie (former Telecom minister), “we Indians are Worshipping false Gods”. This is a statement used by Mr. Shourie as critic against Mr. Ambedkar, who is once again depicted as Father of Constitution of India. On both the cases, we have been in gloom. Neither former is Father of India nor latter a Father of Constitution of India. These titles were conferred by mere and sheer myth. For the convenience of politicians, myth was conveyed as the fact. Consequence is the subjugation of the poor “We the people of India” to accept such perpetual myth as a total truth.

An artificial character was imposed on a person who never had such a personality. Mr. Mohandas was a man of marketing. Lord Willingdon, viceroy of India, 1933 said “It is very necessary throughout to view Gandhi as he is and NOT what he poses to be”.

On piercing or lifting the artificial veil of the person is a real acid test in this write-up. Starting with his personal thoughts in British imperialism, Martin Green describes in his biography that “When Gandhi left South Africa, he still believed in the British empire. Though tentatively. "Though Empires have gone and fallen, this empire may perhaps be an exception....it is an empire not founded on material but on spiritual foundations....the British constitution. Tear away those ideals and you tear away my loyalty to the British constitution; keep those ideals and I am ever a bondsman”.

Gandhi was critical of specific aspects of colonial rule; his general outlook towards the British was more akin to that of the loyalist Prince than the most advanced of India's national leaders. Particularly onerous was his support of the British during World War I. These are all the in specie notifications required for the support he made towards the British.

Gandhi as a lawyer never practiced in India. Mr. Vachha’s in his book on Famous judges and lawyers and cases of Bombay states that “Gandhi never set foot in High Court except for a summon” ( pg.no. 149).

Later Gandhi was also an Anti-Hindu and pro-Muslim. Gandhi was uncompromising in demanding from Hindus that they remedy “the evils of the Hindu Society”, starting with Untouchability; he never pointed at the evils of Muslim Society. Gandhi coerced Hindus with his numerous fasts, but never used his pressure on the Muslims. Mr. Gandhi never went for a fast against Muslim league to give up the partition. Godse remarked the reason for the killing of the Gandhi as “the problem of India was basically the problems of the Hindus” (which was penetrated by the Gandhi). Gandhi also ostentatiously displayed his love for Muslims by a most unworthy and unprovoked attack on the Arya Samaj in 1924. For his infatuation towards the Muslim, he replaced the Vande Mataram with Jana Gana Mana which was proposed by the Nehru in Constituent Assembly as per instruction of the Mr. Gandhi. He also banned the public recital of Shiva Bahwani,a beautiful collection of 52 verses of Hindu poet on King Shivaji.

Gandhi also dismissed the cow-slaughter in India. He said India is not a Hindu country to bring such laws. This is a response of masked mahatma to grant license for the Muslims to kill the cow which is deemed God as Hindu custom. On partition, Rivers of blood flowed under his nose. This is the result of his thirty years of dictatorship in India.

All these shows that he has been masked or portrayed as poor, sadhu, pro- Hindu, Bapu, Mahatma and so on……….

KNOW ALL MEN BY THESE PRESENTS THAT LAWYER, FATHER OF THE NATION, MAHATMA, HINDUISM, PATRIOTIC NEEDS A REVIEW AND EXPECTING FOR A REFORM………… 

Whether these criticisms are Fact or False...... Miles to research. These are compilations from the books which I have read and not a personal opinion. Under qualified Freedom of Speech and Expression, such opinions cannot be casted.

Note:

Mohandas Gandhi and the facts which have been erased

Company(s) law

This is a mere fun filled imaginary post. Just a hilarious write-up.

What happens when a  Company lawyer thinks to get married?

A number of questions come in mind for example:

...1. Firstly a resolution is required to be passed but whether in a Board Meeting or in an General Meeting, the purpose of which will be to see a spouse for marriage.

2. Whether the notice of the meeting (invitation for first meeting) should necessarily contain the detailed agenda? (i.e. the particulars of the "would-be"?)

3. How many persons will constitute the quorum i.e. only the members of the family will go for the first meeting or all the relatives are to be invited.

4. Whether Section 299 (regarding disclosure of interest) (in case of love marriage only) is applicable or not?

5.If arranged marriage and relative, this might be office of profit as per 314.

6. Who shall sign the Minutes of the meeting to show that meeting was conducted properly.

7. To how many persons the wedding card is required to be circulated and what is the time limit for the same (how many days before the marriage)? Further if any penalty is provided for delay in the said circulation or merely a request to the registrar(relatives /friends) shall be sufficient to condone the delay- might be principle of acquiescence...

8. Applicability and the ceiling u/s 372A (inter corporate loans and investment s) (i.e. how much amount parents can give to a daughter on her wedding occasion)

9. Whether the amount as given above will form part of general reserve and will be available for writing off the marriage expenses.

10. Who shall maintain the register of members u/s 150

11. And Board Meeting on very important critical matters like:

a) Assignment of Duties (caring for children, cooking, washing utensils: how to share between the parties under Merger and Amalgamation);

Being assignment is void as per 312, might be apointment option..

b) How the income from operations from both sides will be shared and spent?

12. Explanator y statement U/s 173 to be given in the notice of General Meeting i.e. Object of the marriage , qualification&full disclosure of the interest etc.

Also will he/she be appointed on the rotational basis.

13.Post marriage : Mother or Spouse- Differential voting rights? who will get better dividends?

14. On nuclear family - shifting of registered office.

15.Choice of holding or subsidiary to spouse.(Predominantly subsidiary only)

16. Should satisfy the wife's relation otherwise greater chance of creditors winding up..

17. For husbands always- oppression from spouse as per 397.

18. Compromise and arrangement as per 391-394 after the marriage is always possible.

19.When a number of questions are arising at the time of planning marriage now you can think what will happen after marriage?

20.only AGM can give solution every year !!!!!!!

lol

DIVORCE THE DIVORCE

Somewhere in the year 2008 - 'Guy said I looked like a granny,' Singer Madonna accuses husband of cruelty and applied for divorce. Is this a cruelty???? Is Divorce a fun-filled play????

"Chauvinism is "fanatical, boastful, unreasoning patriotism" and by extension "prejudiced belief or unreasoning pride in any group to which you belong." Now this word has is much relation to FEMALE gender. In the past, Female gender stood as the dominated flock today standing as the dominating crew in India. The cruelty, abuse, torture, false accusation, impleading and brutality by wives to husbands are enhancing day by day.

Somewhere in the year 2005, Government of India felt the need of the Protection of women from Domestic violence and cruelty; hence it brought a legislation differing from the Section 498 A of the Indian Penal Code.

Section 498 A of the Indian Penal Code:

Husband or relative of husband of a woman subjecting her to cruelty: Whoever, being the husband or the relative of the husband of a woman, subjects such woman to cruelty shall be punished with imprisonment for a term which may extend to three years and shall also be liable to fine. Explanation.--For the purposes of this section, `cruelty' means:-

(a)   any wilful conduct which is of such a nature as is likely to drive the woman to commit suicide or to cause grave injury or danger to life, limb or health (whether mental or physical) of the woman; or

(b)   harassment of the woman where such harassment is with a view to coercing her or any person related to her to meet any unlawful demand for any property or valuable security or is on account of failure by her or any person related to her to meet such demand.

The Government of India enacted the Protection of Women from Domestic Violence Act in the year 2005. This Act is bearing provisions only from the preview of a fear of arrest for husbands. This Act along with other one-sided provisions includes "ECONOMIC ABUSE" in its section 3 which means for example, if someone's husband sells a T.V. or removes the cable connection or even if any petty household article WITHOUT CONSENT of his wife and wife protests, then it will come under offence of Domestic Violence and it shall be termed as Cruelty in India.

The Supreme Court in the matter of Preeti Gupta & Anr. vs State Of Jharkhand & Anr. on 13 August, 2010 observed that “Serious relook of the entire provision is warranted by the Legislature. It is a matter of common knowledge that exaggerated versions of the incident are reflected in a large number of complaints. The tendency of over-implication is also reflected in a very large number of cases”.

It is a matter of common knowledge that unfortunately matrimonial litigation is rapidly increasing in our country. All the courts in our country are flooded with matrimonial cases. This clearly demonstrates discontent and unrest in the family life of a large number of people of the society. Is laws in favour of Women has become a Legal terrorism in India??? Divorce and women protection laws have become a weapon in the hands of the Feminine gender to fulfill their discretionary demands. Is women in India are they abusing the provisions of law.

Lord Salmon marked the statement in the English Court “If the prosecution amounts to an abuse of the process of the court and is oppressive and vexatious that the judge has the power to intervene.” He further mentioned that the “court's power to prevent such abuse is of great constitutional importance and should be jealously preserved.”

Frivolous and vexatious litigations in nexus with matrimony are increasing in India. On careful analysis, is the privilege given to women is misused in India. Are the law in India is pampering the women??? From gadgets to budgets – Women are focussed.

Even many judges of High Courts and Supreme Court in India have shown their concern that law is misused and the husbands and their relatives are destitute by such provisions. Even for the premarital affairs of the women- men and his family are made as the scape goat in this globalised world.

How could we solve this women chauvinism in India????

1.       Law Relating to Cruelty to Husband should be established in India. Even law commission is considering such law (Report as on August 2012).
2.         Divorce should be divorced from the society.

Even Lord Denning has bundle of contradictions for the divorce work. He made contempt for it. In his moral fundamentalism “Women who had been virtuous slaves, became free and dissolute; divorce has become common; the rich ceased to have children”.

REVOCATION OF SUBSCRIBERS TO MOA

Memorandum of Association defines the scope and ambit of the Company. Memorandum binds the Company and outsiders. As per section 36(1) of the Companies Act, 1956 –Subscribers to the MOA

“Effect of memorandum and articles: Subject to the provisions of this Act, the memorandum and articles shall, when registered, bind the company and the members thereof to the same extent as if they respectively had been signed by the company and by each member, and contained covenants on its and his part to observe all the provisions of the memorandum and of the articles.”

The section very clearly states that “Signing by the Company and Each member”. And it also uses the term “Covenants”. Covenants mean Agreement. As it is used in law it is a Contract. Hence we know as per the provisions of the Contract law – Acceptance once given cannot be revoked. On understanding this general principle of the Contract law – Revocation after registration is impossible.

Such revocation shall be treated as the breach of the Contract. Only way by which such withdrawal shall be permissible is acceptance by all other subscribers. I again clarify; this is a procedural permission i.e. by FACT and not by LAW. In order to prove such permission is erroneous by law, I hereby draw the words of Sec.41 of the Companies Act,1956 “The subscribers of the memorandum of a company shall be deemed to have agreed to become members of the company, and on its registration, shall be entered as members in its register of members”.

Note: Buckley says, "The subscriber is liable by virtue of the contract, which, under this section, arises immediately upon his signature."

Coming back to the query, Whether all by agreement could do so is a question it is not necessary to consider, as such a step would destroy the proposed company altogether, and the question of the protection of the public, which is the object of the Act, would not arise as the literal meaning of the section is clear.

Even by the PEEL’s case law, we have understood that Registration of the MOA is conclusive evidence. Even though alteration of every other clause is possible by law, one such provision is intentionally omitted in the ACT for subscribers to the MOA to prohibit such alteration.

As it is a breach of the Contract, Specific performance shall be the solution. As per Sec. 15(h) and 19(e) of the Specific relief Act, it is an agreement. Hence specific relief can be claimed.

Lord Romilly in Drummond's Case 4 Ch. App. 772 at p. 776 note "The persons signing the memorandum are required by the Legislature to do so as an earnest that there are certain persons personally liable to pay money to the company."

Sec.36(2) of the Act says that “All money payable by any member to the company under the memorandum or articles shall be a debt due from him to the company”.

Hence by analysing all these, it shall be clear – Subscriber to the MOA is irrevocable acceptance.

Leaves from my library

This post comes with the TWO anecdotes of the BAR. Men of law is always blessed with Immense Humour.

CHIEF BARON WOULFE was once asked why a particular person, never noted for gallantry, had now provided himself with two mistresses. "I suppose," said he, "that he may be able at all times to excuse his absence from both by pretending to each of them that he is with the other."

Note: Stephen Woulfe (1787 – 2 Jul 1840) was an Irish barrister and Liberal politician. He served as Solicitor-General for Ireland, 1836 and as Attorney-General for Ireland in 1838; he became first Catholic to be Chief Baron of the Irish Exchequer.

Second one is much more funny. This shows that how much inseverable is wit and law.Unimaginable sense of humour from the Bench:

IN a case tried before Baron Dowse a refractory witness refused to answer a question put by counsel, and said : "If you ask me that question again, I'll give you my shoe on your poll."

"Does your lordship hear that language?" said the counsel, appealing to the judge.

"The answer to my question is essential to my client's case. What does your lordship advise me to do?”

"If you are resolved to repeat the question," said Baron Dowse," I'd advise you to move a little farther from the witness."

Note: Richard Dowse PC (1824 – 14 March 1890) was an Irish politician and barrister. He was elected as Member of Parliament (MP) for Londonderry at the 1868 general election. He was appointed a Baron of the Court of the Exchequer. He was Attorney-General and Solicitor-General for Ireland in the 1870's. He was considered one of the finest and wittiest Parliamentary speakers of the age; by comparison his judgement are generally considered dull. On the death of this great Lawman, obituary notice in The Times of 15 March 1890, read as:

“Mr. Baron Dowse was a self-made man, who, without social advantages; forced his way by his own merit to the eminent position which he occupied . . . He gave at all times free and vivid utterance to his thoughts, without waiting to examine critically the terms in which he should mould them. These were often quaint and graphic, with a dash of wit and humour, which, if a little wanting in dignity,.. gave emphasis and force to an argument or comment”.

Leaves from my Library

This is an attempt to spread the spirit of Law. Through this article, pinnacle of pleasure shall be attained about LAW and its nuances. The unspeakable anecdotes of the Bench and the Bar shall be shared in this title. In these leaves, the language of English is added as a complementary to Law. The synergy of Law and English shall be relished in these articles.

 Extreme penalty:

"Sir Chares Russell, in the early part of his career was in court one day, during the trial of a case of Bigamy. One of the counsel, whom he knew, asked: "Russel, Whats the extreme penalty for Bigamy?" Without a beat, Russell replied: Two mothers-in-law".

Charles Arthur Russell, Baron Russell of Killowen, (10 November 1832 – 10 August 1900) was an Irish statesman of the 19th century, and later lord Chief justice.