law for cs

1. PREPAREDNESS FOR NCLT
VARIOUS LAWS A PROFESSIONAL MUST KNOW
By: CS RAVI BHUSHAN KUMAR
M.COM, LLB, FCS
Practicing Company Secretary
SR & Associates, Noida
Past Chairman, Noida Chapter
The Institute of Company Secretaries of India,
e-mail id: cs.ravibhushan@gmail.com
Contact No. 9990339200
www.csravibhushan.com

2. LAWS
SUBSTANTIVE
LAWS
PROCEDURAL
LAWS
MIXED LAWS
Substantive Laws are those
that define:-
•Rights
•Duties
•Liabilities
Under civil laws &
•Crime, and
•Punishment
Under criminal law.
Example:
Indian Penal Code,
Law of contracts,
Law of property,
Specific relief Act. Etc.
Company Law
IBC
Procedural Laws are those
that define:-
•Procedure for application
of Substantive Laws
•Provide for method of
application, appeal, etc.
•Prescribe Forms, fees, and
other documents
Examples:
Criminal Procedure Code,
Evidence Act, Civil procedure
Code, etc.

3. Indian Evidence Act 1872(An introduction)
MODERN PRE-BRITISH ERA:
During Muslim Rule in India.
There was no codified Law relating to
Law of Evidence. There existed
customs and usages as provided in
Muslim Law on the basis of which
the matters were decided.
Indian Evidence Act, 1872 was
introduced by Britishers as first
codified law of evidence
Back Ground: Nature of law of
evidence:
It is not exhaustive in nature:
It does not include each and every thing
Indian Evidence is Lex Fori:
(law of the forum or court in which the case
is tried). Whether a witness is competent or
not, whether a certain matter requires to be
proved by writing or not, whether a certain
evidence proves a certain fact or not are all
to be determined by the law of country
where the question arises.
It is part of law of procedure :
Law of Evidence is procedural law. It does
not effect rights and duties, its only
provide a facility to the Court to arived
justice.
 It is retrospective in nature
 It is an adjective law
The aggregate of rules of procedure or
practice according to which the
Substantive Law is administered
Applicability :
•whole of India except the State of
Jammu and Kashmir and all judicial
proceedings in or before any Court,
including Courts-martial, but not to
affidavits presented to any Court
Officer, and not to proceedings before
an arbitrator. Other than Courts-martial
convened under, the Army Act., the
Naval Discipline Act ,the Air Force Act,

4. Judicial
Proceeding
s
Section (2)(i) of the Cr.P.C, 1973:
Judicial proceedings include any
proceedings in the course of which
evidence is or may be legally taken
on oath.
Thus, the power to take evidence on
oath is the characteristic test of a
judicial proceeding. It includes inquiry
and trial, but not investigation.
Judicial Functions:
1. As lies inter parties (a dispute between
two parties) is an essential characteristic
feature of judicial function.
2. The evidence shall be taken on oath.
3. The rules of evidence, Civil Procedure
Code, etc. are strictly followed.
4. The Court fee, as per rules, are required
to be paid.
5. The doctrines of precedents, stare
decisis (to stand by things decided) etc.
shall strictly be followed.
6. No man is a judge in his own case. This
maxim is strictly followed.
7. The court is the real forum of judicial
proceedings.
Administrative
Proceedings
Any inquiry about the matter of fact where
there is no judgment to be framed, and there
is duty to perform, is not a judicial
proceedings but an Administrative
Proceedings.
An administrative proceeding is a non-
judicial determination of fault or wrongdoing
and may include, in some cases, penalties of
various forms. They are typically conducted
by government.
Example :
1. Where the magistrate is not
authorised to conduct inquiry
2. Inquiry and investigation by ROC
under CA 2013.
3. Proceedings u/s 176 of Cr.P.C,
4. proceedings before tribunals , 5.
Departmental inquiry, 6. Disciplinary
proceedings
7. Proceedings before ROCs and RDs
under Companies Act 2013 are
Administrative Proceedings .
Court (Section 3 of Evidence Act, 1872): Court includes all judges and magistrates
and all persons except arbitrators, legally authorized to take evidence.

5. Applicability of this Act on administrative and quasi Judicial proceedings
All proceedings before the Tribunal or the Appellate Tribunal shall be deemed to be judicial
proceedings within the meaning of sections 193 and 228, and for the purposes of section
196 of the Indian Penal Code (45 of 1860), the Tribunal and the Appellate Tribunal shall be
deemed to be civil court for the purposes of section 195 and Chapter XXVI of the Code of
Criminal Procedure, 1973 (2 of 1974).
Punishment for false evidence.—Whoever intentionally gives false evidence in any stage
of a judicial proceeding, or fabricates false evidence for the purpose of being used in any
stage of a judicial proceeding, shall be punished with imprisonment of either description for a
term which may extend to seven years, and shall also be liable to fine, and whoever
intentionally gives or fabricates false evidence in any other case, shall be punished with
imprisonment of either description for a term which may extend to three years, and shall also
be liable to fine.
Section 228 of IPC:
Intentional insult or interruption to public servant sitting in judicial proceeding.—Whoever
intentionally offers any insult, or causes any interruption to any public servant, while such
public servant is sitting in any stage of a judicial proceeding, shall be punished with simple
imprisonment for a term which may extend to six months, or with fine which may extend
to one thousand rupees, or with both
Section 193 of IPC:
Section 424(4) of the Companies Act 2013:
Using evidence known to be false.—Whoever corruptly uses or attempts to use as true or
genuine evidence any evidence which he knows to be false or fabricated, shall be punished in
the same manner as if he gave or fabricated false evidence.
Section 196 of IPC

6. While Doing Administrative act:
The duty to act judicially is not too important in performance of an
Administrative Act. The only responsibly while discharging an
administrative function is to follow the Principles of Natural Justice unless
the Statute especially prohibits so. In State of Orissa v. Binapani Dei,
(1967) 2 SCR 625, the Hon’ble Supreme Court categorically stated that an
Administrative Order which involves civil consequences must be made
consistently with the Principles of Natural Justice.
When act of officer shall be treated as quassi judicial act?
Cooper v. Wilson, (1937) 2 KB 309, wherein it was held that:
“The definition of a quasi-judicial decision clearly suggests that there must be
two or more contending parties and an outside authority to decide those
disputes.”
The Hon’ble Supreme Court in the case of Province of Bombay v. Khushaldas S.
Advani, AIR 1950 SC 222, contemplated two situations relating to quasi-judicial
acts:
1. If there is a Statutory Authority that decides disputes between two parties who
oppose each other, determines their respective rights and has a duty to act
judicially, then decision of such an Authority is a Quasi-Judicial Act.
2. If there is a single party approaching a Statutory Authority that has the power to
prejudicially affect that party and the contest is between the authority proposing to
do the act and the party opposing it, then also the Final Determination of the
Statutory Authority, if it acts judicially, will be Quasi-Judicial Act.

7. The Powers of Administrative Body to exercise powers
of civil court under Companies Act 2013:
There are four places where Companies Act 2013 has given powers of Civil
Court to the officers of MCA:
1. Section 138(4)(b)
have the same powers as are vested in a civil court under the Code of Civil
Procedure, 1908 ( 5 of 1908), while trying a suit, in respect of the
following matters, namely:— (i) discovery and production of books of
account and other documents, at such place and at such time as may be
specified by the National Financial Reporting Authority; (ii) summoning
and enforcing the attendance of persons and examining them on oath; (iii)
inspection of any books, registers and other documents of any person
referred to in clause (b) at any place; (iv) issuing commissions for
examination of witnesses or documents;
1. Section 207(3) - Conduct of inspection and inquiry
2. Section 217(5) - Procedure, powers, etc., of inspectors.
3. Section 424 (2) – power of NCLT/NCLTA

8. What is principal of Natural Justice?:
These are the principal of Natural Justice which a administrative body must
follow:
Principles of natural justice includes:
(a) Rule against bias: Bias may include:
(i) Personal Bias; (ii) Pecuniary Bias ; (iii) Subject-matter Bias; (iv)
Departmental Bias; (v) Preconceived notion bias.
(b) Right to fair hearing includes:
(i) Right to know adverse evidence; (ii) Right to present case; (iii) Right to rebut
evidence; (iv) Right to cross-examination and legal re presentation; (v) Right to
reasoned decision, etc.
(c) Reasoned Decision
‘Bias’ means an operative prejudice, whether conscious or unconscious, in
relation to a party or issue. This is the idea that the judge may well have
“strong views" or “preconceived ideas" concerning the case before them.
Wherever an administration action inflicts a civil consequence, principles of
natural justice have to be followed.
Some Practical Example:
1. The Division Bench of the Rajasthan High Court in the case of PGO Processor P
Ltd Vs. CCE 2000(41) RLT 741 (Raj) has held that “ assessee has a right to be
supplied with authenticated copies of documents relied upon in the Show Cause
Notice. It was made very specifically clear that the opportunity given to inspect and
to obtain photocopies is not enough.

9. 2. The Division Bench of the Bombay High Court in the case of Silicon Graphics System
India (P) Ltd 2006(204) ELT 247 (Bom) has held that “ unrelied documents may not be
relevant for department but may be relevant for affected party to prepare reply to the Show
Cause Notice. Any request made for supply of those documents cannot be termed as
“frivolous”.
3. The Hon’ble Supreme Court in the case of Kothari Filaments Ltd Vs. CCE 2009 RLR 112
(SC) has held that “ if an enquiring authorities make use of any document or documents then
they should supply copies of those documents to the person accused or opponent or must
allow inspection of the same, denial of which shall amount to violation of principle of natural
justice.
When the Appellant asks for opportunity of cross-examination of witnesses relied upon by the
Department (even in reply to the show cause notice), such cross examination must be allowed
and failure or refusal would be held to be violative of principle of natural justice. Laxman
Export Ltd Vs. CCE 2002 (143) ELT 21 (SC). The Adjudicating Authority cannot call upon the
noticee to disclose the reasons with explanations, dis-allowing cross-examination was held to
be violation of the law of natural justice. CCE Vs. Amrutbhai Vasudebhai Patel 2003(156)
ELT 222 (Tri).
The CESTAT in the case of Rath Ispat Ltd Vs. CCE 2001(129) ELT 701 (Tri – Delhi) has
held that “ officers connected with the investigation should be made available by the
Department for the purpose of cross-examination. Likewise, the Expert who conducted the
Test and whose report has been relied upon by the Department, must be made available for
cross-examination. At the same time, if the Department is relying upon the same “ Test
Report”, then the assessee has right of “ Re-Testing”.

10. Whether contempt of Court proceedings are Judicial Proceedings ?
Brijnandan Sinha V. Jyothi Naryan AIR 1956 SC 66:
Though the Proceedings of Contempt of Court are Judicial in Character but they
are outside the scope of Indian Evidence Act.
Affidavit: Law of evidence does not apply to affidavit subject to one exception :
Order 19 Rule 1 of Cp.C:
Power to Order any point to be proved by affidavit.- Any court may at any time for
sufficient reason Order that any particular fact or facts may be proved by affidavit,
or that the affidavit of any witness may be read at the hearing, on such conditions
as the court thinks reasonable:
Provided that where it appears to the court that either party bona fide desires the
production of a witness for cross examination, and that such witness can be
produced, an Order shall not be made authorizing the evidence of such witness to
be given by affidavit.
Sheoraj Singh V. A. P Batra AIR 1955 ALL638
Evidence Act does not apply to Affidavits, If facts is allowed to be proved by
affidavit, it may be proved by affidavit, notwithstanding a provision is provided in
Evidence Act.
Evidentiary Value of
Affidavit:

11. Section 106 of the Evidence Act in terms does not apply
to a proceeding under the said Acts. But it may be
assumed that the principle underlying the said section
is of universal application. Under that section, when
any fact is especially within the knowledge of any
person, the burden of proving that fact is upon him.
Amba Lal Vs. Union of India MANU/SC/0090/1960

12.  Pleading: (Order VI Rule 1 of C.P.C)
Pleading shall mean plaint or written statement.
Plaint means statement of claim in which
plaintiff set out his cause of action with all
necessary particulars, and written statement
is a defense in which defendant deals with
every material facts alleged by the plaintiff in
his statement of claim, and also states any
facts which tell in his favor.
Object of pleading: to enable the party to know,
before the trial, the real point to be discussed
and decide.
Code of Civil Procedure

13. Fundamental Rules of pleading :
1. Every pleading must state the facts and not the law
2. Every pleading state all material facts
It is well settled rule that if a party omits to plead some material fact,
he will not be allowed to give evidence of that fact at the trial.
Facta probanda ought to be stated in the pleading while facta
probantia should not be stated
Particulars are the part of material facts in case of
misrepresentation, fraud, breach of trust, willful default , undue
influence.
It was held over and again that fraud, undue influence, etc being an
objective fact and not being a subjective process, known to the
parties complaining particulars thereof must be given. Court do
not take any notice of general allegation of fraud unless the
particulars are also given in the pleading i.e nature of fraud,
was, how it was committed, by whom it was committed and
when it was committed.
3. Every pleading must state the facts on which the party pleading
relies and not the evidence by which they are to be proved.
Pleading, not to embarrassing to the opposite party, should state
those facts which will put him on his guard and tell him what he
will have to meet when the case comes on for trial.

14. Necessary Party, Proper Party Proforma
party
 Necessary Party:
 1. A necessary party is one whose presence is indispensable
to the constitution of the suit, against whom no effective order
can be passed.
 ADVERTISEMENTS:
 2. In absence of necessary party, no decree can be passed.
 3. Example: In a suit for partition, all sharers are necessary
parties.
 Proper Party:
 1. A proper party is one in whose absence an effective order
can be passed, but whose presence is necessary for a
complete and final decision on the question involved in the
suit.
 2. In the absence of a proper party a decree can be passed.
 Proforma Party:
It is a defendant in a suit against whom no relief is claimed by

15. THE LIMITATION ACT, 1963:
 Nature of law: the rule of limitation is a rule
of procedure, a branch of adjective law.(law
which affects the remedy and procedure) The
intention of law of limitation is not to create a
right where there is none, nor to extinguish a
right where there is one, but to interpose a
bar after a certain period to enforce an
existing right.
 Limitation & Prescription: Limitation limits
the period after which a suit, apeal or other
proceedings cannot be maintained where as
prescription prescribed a period at expiry of
which substantive or primary rights is
acquired or extinguished. Prescription not
only bars the remedy but also extinguishes
the right of action.

16.  Sec 3: Every suit instituted, appeal preferred, and application made
after the prescribed time limit shall be dismissed although limitation
has not been set up as a defence.
 Query – A suit is held in a court and a decree is passed in favour of
the plaintiff. No objection on the score of limitation has been raised
by the defendant or any one else. Can the plea of limitation be
raised for the first time
 In the first appeal
 In the second appeal
 If so, under what condition and by whom?
Answer: This section is pre-emptory and the duty of the Courts is to
notice the Act and give effect to it even though limitation is not
referred to in the pleadings. The Court is bound to take notice of
point of limitation if or the facts in the plaint, it patently appears to it
that the suit is barred by time, even if the defence did not take up
the plea or the pleas abandoned. But if the fats are not apparent of
the fact of the record or if the question of limitation involves fresh
issues of facts, the Court is not bound to speculate upon possible
question that may arise in a suit and as such may not allow it.
A question of limitation can be raised in appeal though the same was
not raised before the Trial Court (Hanutaram Vs. Kumbharam).
But where the suit is not on the face of it obviously barred by
limitation, the Appellate Court does not exercise a wise discretion in
taking up the question of limitation on its own initiative.

17.  Query 2 Limitation for filing suit by A expires on 30th
September 1998, which is half-holiday. The Court
remains closed on 1st and 2ndOctober, 1998 due to
Gandhiji`s birthday. Suit was filed on 3rd October
1998 by A to which defendant pleads that it was
time-barred.
Answer : It was held in Surendra Saurvavini that if the law or a
Court directs a thing to be done within a period fixed by it and it is
impossible of performance on the last day fixed for no fault of the
party required or directed to do the act, it will be recognised as
properly done, if it is done on the day next day, it is possible of
performance.
Section 4 provides that where the period of limitation prescribed
for any suit, application expires on a day when he Court is partly or
wholly closed, the suit, appeal or application may be filed on the
day when the Court reopens. Hence, the suit filed by A is not time-
barred and the plea of defendant cannot be sustained.

18. Section 5: Any appeal or any application, may be admitted
after the prescribed period, if the appellant or the applicant
satisfies the court that he had sufficient cause for not
preferring the appeal or making the application within such
period. Explanation.— The fact that the appellant or the
applicant was misled by any order, practice or judgment of
the High Court in ascertaining or computing the prescribed
period may be sufficient cause within the meaning of this
section.
Answer : Extension of time under Sec 5 cannot be claimed as
matter of right. The power of the Court to grant this concession.
The discretion must, however, be exercised in a judicial and not
arbitrary manner. There must be sufficient cause shown. [Kaura
Mal Vs. Mathura Dass, AIR, (1959) Pun. 645]
Query: Extension under Section 5 can be claimed as right?

19. Query: Had it not been for serious accident on the way A would
have reached the civil courts well in time filing on appeal and also
for instituting a suit for recovery of Rs 10,000, it was the last day
of limitation for appeal as was for the suit. A who had lost
consciousnesses immediately after he injuries, succumbed to
them the same evening? He left a five year’s son, the only legal
representative. You are approached on behalf of the son the next
day when both the appeal and suit have become time barred.
Advise
Answer: Inability to reach the Court and to instruct the counsel due to
unconsciousness and subsequent death are sufficient cause for the
appeal to be admitted because the accident was serious and fatal.
But in case of suit, extension cannot be obtained because Section 5
does not apply to suit.
Query Two brothers, A major and B minor, were members of an undivided
Hindu family of which A was the manager. After A`s death and on attaining
majority. B sues for recover a debt advanced out of the family funds which
had become due in A`s lifetime claiming extension of time on the ground of
his minority. Is B entitled to any extension?
Ans: B is not entitled to any extension. The cause of action arose in A`s
lifetime. As a manager he was entitled to give a valid discharge on behalf
of all members of the family. Hence the minority of B does not extend the
period of limitation.

20. The Hon’ble Supreme court in Manoharan Vs. Sivarajan
and Ors. MANU/SC/1192/2013 : (2014) 4SCC 163
held that the Courts while deciding the application under
Section 5 of the limitation act should not go the merits of
the case but the grounds set out in the application
seeking condonation of delay to be weighed and judged.
The Hon’ble Supreme Court in N.Balakrishnan Vs. M.
Krishnamurthy 2008(228) ELT 162(SC) held that the
Under Section 5 of the Limitation Act , for condonation of
delay , the length of the delay is immaterial whereas the
explanation or the reason for such delay is of importance.

21. What constitute sufficient cause?
Following are some of the instances where delay
may be condoned:
1. Subsequent changes in law
2. Mistake of counsel – A bona fide mistake of
computation of limitation period ofr appeal
[Punjabi University Vs. Acharya Swamy
Ganesh AIR (1972) SC 1973]
3. Illness of party
4. Party being a woman or pardanashin lady
5. Minority if sufficient
6. Poverty or lack of funds
7. Party being a government servant.
8. Illiterate of ignorance.
9. Conflicting legal advice resulting in delay.
10.Absence on military duty [Hirayanga Vs Nui,
AIR (1959) Ass. 7]

22. B) Section 14 of Limitation Act:
Where the party has been pursuing the matter before a
wrong court diligently and in good faith, the period
undergone in the trial before the wrong court, is liable to
be condoned by the competent court before whom the
petition has been filed subsequently.

23. In Mohinder Prakash v. DLF Commercial Developers Ltd.,
MANU/DE/6320/2012 it was held as under:
“The plaintiff must establish that while pursuing a wrong remedy
there was an element of mistake in the remedy or the selection of
the wrong forum. Besides establishing such fact it is necessary
that he must also establish that the mistake was committed with
due diligence and good faith. Good faith has been defined as
“exercise of due care and attention.” Therefore, the time is
excluded before forum of inappropriate jurisdiction and delay
condoned. “

24. The Hon’ble Supreme Court in the case of Union of
India Vs. West Coast paper Mills Ltd
MANU/SC/0191/2004 has observed as under:-
“However, Section 14 of the Limitation Act is
wide in application, in as much as it is not
confined in its applicability only to cases of defect
of jurisdiction but it is applicable also to the cases
where the prior proceedings have failed on
account of other causes of the like nature.”

25. The Hon’ble Supreme Court in MP Steel
Corporation v. CCE, MANU/SC/0484/2015 has
held that the Quasi-Judicial Authority including
Tribunal (though strictly they are not Court in
legal sense) can condone the delay which, occur
due to pendency of the matter before wrong
Courts/Authority.

26. C): Section 18 of Limitation Act:
Where before the expiration of the prescribed period of
for a suit or application in respect of any property or
right, an acknowledgement of liability in respect of such
property or right has been made in writing signed by the
party against whom such property or right is claimed, a
fresh period of limitation shall be computed from the
time when the acknowledgement is to signed.

27. Where no period of limitation is prescribed:
The Full Bench of Rajasthan High Court in Chiman Lal v. State of
Rajasthan and Ors. MANU/RH/0180/2000 : 2000 (2) RLR 39,
had held that when no period of limitation is provided then it has to
be exercised within a reasonable time and that will depend upon the
facts and circumstances of each case like:
when there is a fraud played by the parties;
the orders are obtained by misrepresentation or collusion with
public officers by the private parties;
orders are against the public interest;

28.  the orders are passed by the authorities who have
no jurisdiction;
 the orders are passed in clear violation of rules or
the provisions of the Act by the authorities;
 and void orders or the orders are void ab initio
being against the public policy or otherwise.

29. Section 19 of Limitation Act, 1963
Section 19 says that before the expiry of limitation, in case
the debtor or his agent makes part payment of the amount
due, then the period of limitation shall be counted from the
date of such part payment.
In M/s Naraingarh Suger Mills Ltd. v. Krishna Malhotra,
MANU/DE/1447/2012 it was held as under:
“The limitation period for the determination of the
debt partly paid commences from the day of last
payment and suit for the recovery of the part amount
was held to be in limitation.”

30. In Sanjeev Chopra v. All Wear Clothing (India)
P. Ltd., MANU/DE/0664/2012 , it was observed
as under:
“In case a debtor makes the part payment of
a debt or of interest before the expiration of
the prescribed period of limitation, fresh
period of limitation shall commence from the
period when such payment is made.”

31. c): Article 113 of Limitation Act, 1963:
Any suit for which no period of limitation is provided
elsewhere in this Schedule – A period of three years from the
date of accrual of cause of action. In IFCI Venture Capital
Funds Ltd. v. Santosh Khosla, MANU/DE/1078/2012 it
was observed as under:
“The limitation period for the recovery of loan amount
was held to be commenced from the date of default and
not from the date of grant of loan.”

32. In Sineximco Pte Ltd. v. Dinesh International Ltd.,
MANU/DE/4261/2012 it was held as under:
“In case of suits based upon a bill of exchange
payable by installments the right to sue/ cause
of action would accrue/ arise on each default by
the payee of the bill of the exchange and a fresh
cause of action would accrue on each default
unless the parties to the agreement are satisfied
that the whole of the amount shall become due
in case of default. “

33.  The Delhi High Court in the case of Punjab National
Bank Vs. BSES Rajdhani Power Limited
MANU/DE/3730/2015 has observed as under:-
“In civil law, a person's right to recover money on
account of mistake would be a period of three years
from discovery of the mistake. In view of Article 113
of the Schedule of the Limitation Act and which is a
residuary article for a suit which is not covered under
any of the preceding articles of the Schedule of the
Limitation Act.”

34. INDIAN CONTRACT ACT, 1872
Section 10: All agreements are contracts if:-
a)Made by free consent of parties;
b)Made by the parties competent to contract;
c)For lawful consideration;
d) For a lawful object;

35. Section 15 of Indian Contract Act, 1872 : Coercion
The definition of Coercion is reproduced as under:
“the committing or threatening to commit any act
forbidden by the Indian Penal Code, or unlawful
detaining or threatening to detain, any property to
the prejudice of any person whatever with the
intention of causing any person to enter into an
agreement”.

36. Section 16 of Indian Contract Act, 1872 : Undue Influence
Under Section 16 of the Indian Contract Act, 1872, a contract is
said to be produced by undue influence “where the relations
subsisting between the parties are such that one of the parties is
in a position to dominate the will of the other and uses that
position to obtain an unfair advantage over the other”.
The Settlement Deed cannot be cancelled unless
either one of the elements of fraud, misrepresentation, undue
influence or coercion is present.

37. Section 17 of Contract Act ,1872: Fraud
“Fraud means and includes any of the following acts committed
by a party to a contract, or with his connivance, or by his agent,
with intent to deceive another party thereto or his agent, or to
induce him to enter into the contract:-
i) the suggestion of a fact, of that which is not true,
ii)the active concealment of a fact by one having
Knowledge or belief of the fact;

38. iii) a promise made without any intention of
performing it
iv) any other act fitted to deceive;
v) any such act or omission as the law specially
declares to be fraud:

39. SPECIES OF FRAUD : HOW SUPREME COURT DEFINED
a) The Hon’ble Supreme Court in the case of Bhaurao Dagdu
Paralkar v. State of Maharashtra and Ors. (MANU/SC/0495/2005 :
JT 2005 (7) SC 530) dealt with effect of fraud.
Fraud is proved when it is shown that a false representation has been
made
(i) knowingly, or
(ii) without belief in its truth, or
(iii) recklessly, careless whether it be true or false'.

40.  b) Suppression of a material document would also
amount to a fraud on the court. ( Gowrishankar v.
Joshi Amba Shankar Family Trust
(MANU/SC/0555/1996 : 1996 (3) SCC 310).

41. The Supreme Court in the case of Indian Bank v. M/s.
Satyam Fibres (India) Pvt. Ltd., MANU/SC/0657/1996 :
AIR 1996 SC 2592 has laid down that the judiciary in India
possesses inherent power to recall its judgment or order if it
is obtained by fraud on Court and the above principles will
also apply to statutory Tribunal.

42. SECTION 25 of Indian Contract Act, 1872:
An Agreement without consideration is void unless an agreement
is made out of natural love and affection;
The Supreme Court in the case of John Tinson & Co. P. Ltd. v.
Surjeet Malhan MANU/SC/0331/1997 has held there should be
consensus ad idem for a concluded contract and it is seen that
Section 25(1) of the Contract Act contemplates that when a
transfer is without consideration, it is a void contract.

43. The Supreme Court in Manna Lal Khetan Vs. Kedar Nath Khetan
MANU/SC/0060/1976 has observed as under:-
It is well established that a contract which involves in its
fulfillment the doing of an act prohibited by statute is void.
Where a contract, express or implied, is expressly or by
implication forbidden by statute, no court can lend its
assistance to give it effect. What is done in contravention
of the provisions of an Act of the Legislature cannot be
made the subject of an action.
(The case deals with transfer of shares which stood attached under
orders of Court – SC held that Shares under attachment cannot be
transferred ).

44. SALE OF GOODS ACT, 1930:
Section 45: The seller of goods is deemed to be an unpaid seller
within the meaning of this Act (a) When the whole of the price has
not been paid or tendered.
The Rajasthan High Court in the case of Samnath India Exports Vs.
Shanti Lal Jain MANU./RH/1688/2013 has observed as under:
The Sale of Goods Act, 1930 covers all issues relating to sale of
goods. Section 55(1) provides that "where under a contract of
sale the property in the goods has passed to the buyer and the
buyer wrongfully neglects or refuses to pay for the goods
according to the terms of the contract, the seller may sue him
for the price of the goods."

45. (II)How Power Of Attorney to be Executed: Section 85 of
Indian Evidence Act, 1872:
If the Power of Attorney is not executed in accordance with law,
then no power has been validly conferred on the Attorney and
any petition is liable to be dismissed on this short ground alone.

46. REQUISITES OF VALID POWER OF ATTORNEY.
a): Board Resolution in a validly convened Board Meeting
b): The date of affixation of Common Seal and date of attestation
by Notary Public should match;
c): Affixation of Common Seal (now optional under Companies
Act, 2013)

47. d): The Power of Attorney must be on Stamp Paper of
requisite value as per rules of State Stamp Act;
e): There must be notorial stamp affixed during attestation.
i)Electric Construction & Equipment Co. Ltd. v. Jagjit Works,
1984 RLR 549 DHC.
ii)Syndicate Bank v. M/s. S.A. Trading Corporation & Others,
1990 (3) Delhi Lawyer 356 DHC.

48. CODE OF CIVIL PROCEDURE, 1908:
Section 151 of CPC: Inherent Powers of Court = Regulation 44 of CLB
Regulations, 1991 (now Rule 11 of NCLT Rules, 2016)
The Hon’ble Supreme Court in the case of Vinod Seth Vs. Devinder
Bajaj MANU/SC/0424/2010 has observed as under:-
“ Section 151 is intended to apply where the Code does not
cover any particular procedural aspect, and interests of justice
require the exercise of power to cover a particular situation. It
is a procedural provision saving the inherent powers of the
court to make such orders as may be necessary for the ends of
justice and to prevent abuse of the process of the court. It
cannot be invoked with reference to a matter which is covered
by a specific provision in the Code. It cannot be exercised in
conflict with the general scheme and intent of the Code.”

49.  In the very recent verdict of K.K. Velusamy v. N.
Palaanisamy, (2011) 11 SCC 275 the Hon’ble Supreme
Court upheld that Section 151 of the Code recognizes the
discretionary power inherited by the every Court as a
necessary corollary for rendering justice in accordance
with law, to do what is ‘right’ and undo what is ‘wrong’.

50. HOW PETITION TO BE DRAFTED:
ORDER 6 RULE 1 & 2 CPC.
Order 6 Rule 2: Every pleading shall contain, and contain only, a
statement in a concise form of the material facts on which the party
pleadings relies for his claim or defence, as the case may be, but no
evidence by which they are to be proved.
“In the absence of any concise statement of material facts,
the mere raising of a plea of tenancy is not enough. D H Deshpande
Vs. Janardhan Kashinath AIR 1999 SC 1464.

51. AMENDMENTS OF PLEADINGS –
ORDER 6 RULE 17 CPC
The power to grant amendment of pleadings is intended to serve
the ends of justice and is not governed by any narrow or technical
limitations. Reliance was placed on the case law reported at
MANU/SC/0016/1969 : AIR 1969 SC 1267

52. The Supreme Court in Ganesh Trading Co. v. Moji Ram ,
MANU/SC/0018/1978: AIR 1978 SC 484, while dealing with
the amendments of pleadings, has observed as under:
“Even very defective pleadings may be permitted to be
cured so as to constitute a cause of action where there was
none, provided necessary conditions such as payment of
either any additional court fee, which may be payable or of
costs of the other side are complied with. It is only if lapse
of time has barred the remedy on a newly constituted cause
of action that the courts should ordinarily refuse prayers for
amendments of pleading.”

53. AMENDMENT PLEADINGS
Even admission can be withdrawn:
MANU/UP/0746/2004, MANU/SC/1017/1995 (para 4),
MANU/PH/0715/2005 (para 11) and
MANU/SC/0019/1983 (para 3).

54. Signing of pleadings
 As per provisions of Rule 6 CPC, the last page of the petition/
written statement/replication/rejoinder are required to be signed by
the parties and also by their pleader. All pleadings are required to be
supported by an affidavit. The affidavit can be given by the Managing
Director, Director or Company Secretary or other officer duly
authorized by either Board Resolution or Power of Attorney. The
affidavit should be on stamp paper of the value as prescribed under
the State Stamp Act of the State where the affidavit is executed. The
affidavit is required to be notarized either by a Notary Public or by
Oath Commissioner.


55.  The date of the affidavit shall always be subsequent to
the date of petition or of the same date. The date of
affidavit can never be prior to the date when the
petition is ready.

56. Amendment barred by law – Still Allowable.
 In Ragu Thilak D. John v. S. Rayappan And Others -
MANU/SC/0057/2001 : (2001) 2 SCC 472, the Supreme Court
held that if the relief sought by way of amendment would be
barred by the law of limitation, yet the amendment would still be
allowable and the disputed matter made the subject-matter of an
issue.

57.  In Pankaja And Another v. Yellappa (Dead) By LRs And
Others - MANU/SC/0590/2004 : (2004) 6 SCC 415, the
Supreme Court held that even where the relief sought to be
added by amendment is allegedly barred by limitation, there
is no absolute rule that amendment in such a case should not
be allowed and that an amendment subserving the ultimate
cause of justice and avoiding further litigation should be
allowed.

58. HOW TO DRAFT WRITTEN STATEMENT/ REPLY
ORDER 8 RULE 5 CPC
Every allegation of fact in the plaint, if not denied specifically or by
necessary implication, or stated to be not admitted in the
pleadings of the defendants, shall be taken to be admitted.

59. Denial to be specific:
It shall not be sufficient for a defendant in his written
statement to deny generally the grounds alleged by the plaintiff,
but the defendant must deal specifically with each allegation of
fact of which he does not admit the truth, except damages.
Sulekha v. Ashok Kumar. MANU/UP/0389/2016.

60. The written statement must deal specifically with each allegation
of fact in the plaint and when a defendant denies any such fact; he
must not do so evasively, but answer the point of substance. If his
denial of fact is not specific but evasive, the said fact shall be taken
to be admitted. In such an event, the admission itself being proof,
no other proof is necessary.
Badat & Co. v. East India Trading Co., AIR 1964 SC 538

61. In Mahanagar Telephone Limited v. Suman Sharma,
2011(1) AD (Delhi) 331 it was observed as under:
“Suit by the company and instituted by secretary – Suit was
instituted and filed by the secretary who was a principal
officer of the appellant company. The suit was instituted in
terms of Order 29 and Rule 1 of CPC. Its dismissal was held
to be unjustified and liable to be set aside.”
ORDER 29 RULE 1 CPC – Authorisation to file legal
proceedings before Court/tribunal

62. The Supreme Court in the case of State Bank of Travancore Vs.
Kingston Computers (P) Ltd. MANU/SC/0280/2011 has
observed as under:
“Because the Respondent had not produced any evidence
to prove that Shri Ashok K. Shukla was appointed as a
Director of the company and a resolution passed by the
Board of Directors of the company to file suit against the
Appellant and authorised Shri Ashok K. Shukla to do so”.

63.  The letter of authority issued by Shri Raj K. Shukla, who
described himself as the Chief Executive Officer of the
company, was nothing but a scrap of paper because no
resolution was passed by the Board of Directors
delegating its powers to Shri Raj K. Shukla to authorise
another person to file suit on behalf of the company.

64. How Affidavit in support of petition to be drawn.
ORDER 19 RULE 1 AFFIDAVIT
Unless the affidavits are properly verified and are in conformity
with the rule, they will be rejected by the Court.
MANU/BH/0026/1962: MANU/WB/0079/1968:
MANU/MH/0004/1964 :
Where the matter deposed to is not based on personal knowledge,
but on information, the source of information should be clearly
disclosed MANU/SC/0016/1952 : 1952CriLJ1269 :
MANU/WB/0143/1956 : AIR1956Cal496 .

65. THE PROVISIONS OF CPC ARE APPLICABLE TO
CLB/NCLT
The court further held that provisions of CPC are
applicable to the proceedings pending before CLB. Krithika
Mullengada Vs. Wipro Ltd . 2012 (108) CLA 28 Kar DB.

66. INDIAN PENAL CODE:
 In case it is found that the Opposite Party has deliberately made false
statement or filed forged and fabricated documents (which very
often occurs), paper, return, the aggrieved party may, besides moving
an application for dismissal of the petition, also file an application
U/s 340 of Cr.P.C. read with Section 192 of IPC.
 Section 340 of Cr.P.C. provides that the party, who has made
deliberately false statement or created false evidence, may be
punished with imprisonment upto seven years and also with fine.
Besides the above, by virtue of the judgment of the Hon’ble Supreme
Court in the case of S.P. Chengalvarya, the petition could be
dismissed by NCLT without waiting for the whole trial to complete.

67.  Section 405 of IPC define Criminal Breach of Trust to say that if a
person, who has been entrusted with any property, which include
money and if dishonestly misappropriate the same he shall be
liable for the offence of Criminal Breach of Trust punishable U/s
406 with imprisonment for a term which may extend to three
years or with fine or both.
 Section 408 of IPC
Criminal breach of trust by clerk or servant. – Whoever, being a
clerk or servant or employed as a clerk or servant, and being in
any manner entrusted in such capacity with property, or with any
domain over property, commits criminal breach of trust in
respect of that property, shall be punished with imprisonment of
either description for a term which may extend to seven years,
and shall also be liable to fine.

68.  Section 409 of IPC
 Criminal breach of trust by public servant, or by banker, merchant
or agent. – Whoever, being in any manner entrusted with property,
or with any dominion over property in his capacity of a public
servant or in the way of his business as a banker, merchant, factor,
broker, attorney or agent, commits criminal breach of trust in
respect of that property, shall be punished with imprisonment for
life, or with imprisonment of either description for a term which
may extend to ten years, and shall also be liable to fine.
 The difference between Section 405 and Section 409 – the
imprisonment U/s 409 is for a period of life whereas in case of
Criminal Breach of Trust, it is only three years.

69.  Section 420 OF IPC
 Section 420 in a simple way says – whoever with dishonest
intention, induces the person deceived to deliver any
property to any person, or to alter or destroy the valuable
security to cause any wrongful gain to himself and cause
wrongful loss to the other, such person shall be deemed to
have committed an offence of cheating punishable with
imprisonment extendable upto a period of seven years also
with fine.

70.  Section 463 of IPC
Forgery. – Whoever makes any false documents or false
electronic record or part of a document or electronic record,
with intent to cause damage or injury, to the public or to any
person, or to support any claim or title, or to cause any
person to part with property, or to enter into any express or
implied contract, or with intent to commit fraud or that fraud
may be committed, commits forgery and shall be punishable
u/s 468 of IPC with imprisonment for a term of seven years
and also with fine.

71. In Katikara Chintamani Dora v. Guntreddi
Annamanaidu MANU/SC/0336/1973 :
(1974) 1 SCC 567, this Court held:
“It is well settled that ordinarily, when
the substantive law is altered during the
pendency of an action, rights of the
parties are decided according to law, as it
existed when the action was begun
unless the new statute shows a clear
intention to vary such rights (Maxwell on
Interpretation, 12th Edn. 220). That is to
say, "in the absence of anything in theAct,

72. EVERY SUBSTANTIAL LAW IS PROSPECTIVE.
The Supreme Court in the case of Zile Singh v. State of Haryana
MANU/SC/0876/2004:(2004)8SCC1, examined the various
authorities on statutory interpretation and concluded as under:-
“It is a cardinal principle of construction that every
statute is prima facie prospective unless it is expressly or
by necessary implication made to have a retrospective
operation.”
Unless there are words in the statute sufficient to show the intention
of the legislature to affect existing rights, it is deemed to be
prospective only.

73. Statutory returns have no evidential value unless
supported by documents/evidence:
Srichand Bajaj Vs. Bajaj Promoters Ltd 2006(75) CLA 303
and also Harish K Berry Vs. S Berry Automotive Udyog (P)
Ltd., 2005 (64) CLA 144.
A mere entry in the Register of Members does not enable a
member to claim membership: 2001 (44) CLA 36.

74. Duty to speak, contradict or deny
If the party has written number of letters and other party
has not replied back, the party not replying to the letters, forfeits his
rights to contend otherwise. M/s Arosan Enterprises Vs. Union of
India 1999 (VIII) SLT 104 and Delhi Jal Board Vs. Kaveri
Infrastructure (P) Ltd., 2014 (206) DLT 136.

75. A person cannot convey better title than what he
himself has.
A general proposition of law is that no person can confer on
another a better title than he himself has. [Reference in this regard
may be made to the decisions of this Court in Mahabir Gope v.
Harbans NArain Singh MANU/SC/0059/1952 : 1952 SCR 775;
Asaram v. Mst. Ram Kali 1958 SCR 986 and All India Film
Corporation Ltd. v. Raja Gyan Nath MANU/SC/0403/1969 :
(1969) 3 SCC 79.]

76. The figures shown in Income Tax Return is
admission:
The Supreme Court in Uttam Singh Dugal & Co. Ltd. v.
Union Bank of India MANU/SC/0485/2000 : [2000] 39 CLA
l/[2000] 102 Comp Cas 118/[2000] 7 SCC 120, observed
that the Income-Tax Returns showing transfer of shares of the
Petitioners is an admission, thereby by virtue, of the said
admission, the petition is to be rejected on admissions as per
law laid down under Order 12, Rule 6 of the Code of Civil
Procedure.

77.  Waiver and Acquiscence:
The principles of acquiescence holds that it is unjust
to give a claimant the remedy where, by his conduct, he has
done that which might fairly be regarded as equivalent to a
waiver. U.P. Jal Nigam v. Jaswant Singh
MANU/SC/5073/2006 : (2006) 11 SCC 464.

78. Person signing documents cannot deny knowledge.
When a person signs a documents, presumption is that he has
read the documents properly and understood it and only then
affixed his signatures thereon, unless there is a proof of force or
fraud. Such presumption is much stronger in case of businessmen.
If there is no allegation of force or fraud, such contention cannot be
accepted. Grasim Industries Ltd Vs. Agarwal Steel 2010(1) SCC
83.

79. Fraud vitiates all solemn acts:
It is now well settled that fraud vitiated all solemn act. Any order or
decree obtained by practicing fraud is a nullity.
(a)Ram Chandra Singh v. Savitri Devi and Ors. MANU/SC/0802/2003 :
(2003)8SCC319 followed in
(b) Vice Chairman, Kendriya Vidyalaya Sangathan and Anr. v. Girdhari Lal
Yadav ;
(c) State of A.P. and Anr. v. T. Suryachandra Rao MANU/SC/0431/2005 :
AIR2005SC3110.

80. Maintainability of petition:
The Supreme Court has held that when the issue of
maintainability is pending, no issue on merit should be
considered and hence, the maintainability of the application
should be first decided before considering the reliefs sought for
in the application. In T.K. Lathika v. Seth Karsandas Jamnadas
MANU/SC/0535/1999.

81. Plea taken for the first time in replication:
While canvassing the proposition that any plea taken by the plaintiff
in the replication to which the defendants have no opportunity to
reply inconsistent with the original pleading should be refused to be
taken on record and if taken shall be liable to be struck off and taken
off the file, learned counsel has relied upon Anant Constructions
Pvt. Ltd. v. Ram Niwas MANU/DE/0407/1994 :
1994IVAD(Delhi)185 wherein it was observed that a plea which is
foundation of the plaintiff's case or essentially a part of cause of
action of plaintiff, in absence whereof the suit will be liable to be
dismissed or the plaint liable to be rejected cannot be introduced for
the first time by way of replication.

82. Vexatious, frivolous and mischievous litigation:
The Supreme Court in the case of Dalip singh Vs. State of UP 2010(2) SCC
114 has held as under:-
“In the last 40 years, a new creed of litigants has cropped up.
Those who belong to this creed do not have any respect for truth. They
shamelessly resort to falsehood and unethical means for achieving their
goals. In order to meet the challenge posed by this new creed of
litigants, the courts have, from time to time, evolved new rules and it is
now well established that a litigant, who attempts to pollute the stream
of justice, or two touches the pure fountain of justice with tained hands,
is not entitle dto any relief, interim or final.”

83. In cash transaction, the party who alleges, there is heavy
burden on him about payment in cash.
Mahesh Kumar Wadhwa Vs. Bimal Luthra MANU/DE/1830/2008 :
2009 (107) DRJ 271 holding, though in the context of grant of leave to
defend under Order 37 of the CPC, that when a party enters into a
transaction involving large sums of money in cash through non bank
channels those transactions will always remain open to challenge and
the burden heavily lies on the party to prove that he had entered into the
said transaction;

84. LIFTING OF CORORATE VEIL
 It is very seen that the Government Authorities for realization of
government dues or even parties for the purpose of recovery of
their dues from the government, initiate proceedings against the
working directors of the company – though the judgment and
decree is only against the company and not against the Director
in his personal capacity.
 State of UP Vs. Renusagar MANU/SC/0505/1988
 New Horizon Ltd Vs. UOI MANU/SC/0564/1995.
 LIC VS. ESCORTS MANU/SC/0015/1985.

85.  Juggilal Kamlapat Vs. CIT MANU/SC/0091/1968.
 Bajrang Pd Jalan Vs. Mahabir Pd Jalan Vs. 1999 AIR Cal 155
 JB Exports Vs. BSES Rajdhani Power Ltd MANU/DE/0880/2006
 Singer India Limitd Vs. CM Chadha MANU/SC/0626/2004= AIR
2004 SC 4368
 Vipul Gupts Vs. Trident Projects Ltd MANU/DE/0082/2009=
2009(157) DLT 1.

86.  If the company is represented through Directors or in other
words, the petition or reply has been filed through directors of
the company, no execution petition can be filed against such
Directors for realisation of the amount under the money decree
passed against the company of which the person is director
because he is signing the petition or written statement in the
capacity of a director and not in his personal capacity. Dr
Rakha Kamat Vs. Nath steel Equipments 2010 (4) Current
Civil Cases 34.

87.  NO INTERIM RELIEF, IF NO CHALLENGE IN MAIN
PRAYER.
It is well settled that no Order can be passed on any interlocutory
application, if there is no prayer in the Main Prayer/Final Prayer
in the Petition – no relief can be granted at interlocutory stage
which are beyond scope of suit – prayers made for interlocutory
application in present case outside scope of suit – same cannot be
entertained at such stage – no order can be passed on such
application except Order to expedite suit.
MANU/WB/0470/2002. MANU/SC/0086/1999.

88. Where the company law Board by impugned order had
restrained the appellant and its Board of directors from
implementing the decision take in the Board of Directors
meeting and the decision taken by the Board of Directors have
not been challenged in the main petition, no relief can be
granted. Shree Ram Urban Infrastructure Ltd Vs. R K Dhall
2010(98)CLA (Snr) 3 (Bom).

89.  Even where a person is not a member but he has
indeffasible right to be a member, is entitled to file a
company petition .
SVT Spinning Mills (P) Ltd Vs. M Palanisami 2009(95) SCL
112., Gulab rai Kalidas Naik Vs. Laxmidas Lallubhai Patel
1947 (47) Company Cases 151.

90. THANK YOU