UNIT 2

The Human Development Index (HDI) is a comparative measure of life expectancy, literacy, education and standards of living for countries worldwide. It is used to distinguish whether the country is a developed, a developing or an underdeveloped country, and also to measure the impact of economic policies on quality of life. The index was developed in 1990 by Pakistani economist Mahbub ul Haq and Indian economist Amartya Sen.

HDI value

1 126 127 128 129 130

Iceland (0.968) Morocco (0.646) Equatorial Guinea (0.642) India (0.619) Solomon Islands (0.602) Lao People's Democratic Republic (0.601)

Life expectancy at birth (years)

1. 123. 124. 125. 126. 127. 177.

Japan (82.3) Pakistan (64.6) Comoros (64.1) India (63.7) Mauritania (63.2) Lao People's Democratic Republic (63.2) Zambia (40.5)

Adult literacy rate

1. 112. 113. 114. 115. 116. 139.

Georgia (100.0) Rwanda (64.9) Malawi (64.1) India (61.0) Sudan (60.9) Burundi (59.3) Burkina Faso (23.6)

Per Capita

1. 115. 116. 117. 118. 119. 174.

Luxembourg (60,228) Syrian Arab Republic (3,808) Nicaragua (3,674) India (3,452) Honduras (3,430) Georgia (3,365) Malawi (667)

Human Poverty Index

1. 45. 46. 47. 48. 49. 108.

Chad (56.9) Cameroon (31.8) Botswana (31.4) India (31.3) Comoros (31.3) Kenya (30.8) Barbados (3.0)

Children underweight for age (% ages 0-5)

1. 2. 3. 4. 5. 6. 134.

Nepal (48) Bangladesh (48) India (47) Yemen (46) Timor-Leste (46) Burundi (45) Chile (1)

Infrastructure in India

Infrastructure activities, such as power, transport, telecommunications, provision of water, and sanitation and safe disposal of waste, are central to the activities of the household and to economic production.

Cont..

Public utility: power, piped gas, telecommunications, water supply, etc.; Public works: major dam and canal works for irrigation, roads; Other transport sectors such as railways, ports, waterways.

FDI

FDI stands for Foreign Direct Investment, a component of a country's national financial accounts. Foreign direct investment is investment of foreign assets into domestic structures, equipment, and organizations. It does not include foreign investment into the stock markets. Foreign direct investment is thought to be more useful to a country than investments in the equity of its companies because equity investments are potentially "hot money" which can leave at the first sign of trouble, whereas FDI is durable and generally useful whether things go well or badly

Cumulative amount of FDI inflows

(from August 1991 to June 2008)

Rs. 3,72,540 crores

Countrys Share

1. MAURITIUS 2. U.S.A. 3. SINGAPORE 4. U.K. 5. NETHERLANDS 6. JAPAN 7. GERMANY 8. CYPRUS 9. FRANCE 10. U.A.E.

MNC

Enterprise operating in several countries but managed from one (home) country. Generally, any firm or group that derives a quarter of its revenue from operations outside of its home country is considered a MNC.

Aditya Birla of Aditya birla group first looked beyond India 30 years ago. Tata was the second group company, which has seen these potential. Tata has recently done lot of global acquisitions.

LAW

LAW

What? Set of rules Who? Govt enforces Why? To protect people & property

Branches of Law

Constitutional Administrative Criminal Civil Commercial, etc

Sources

English law Indian statutes Judicial decisions Customs & Trade usages

Indian Contracts Act, 1872

An agreement enforceable by law is a contract. An agreement is a promise, A proposal when accepted becomes a promise. Agreement = offer (proposal) + acceptance of offer Eg: Buying & Selling a car

Enforceability legal obligation A binding to perform a contract Eg:Balfour Vs Balfour case

Agreement

Agreement = offer + acceptance Contract = agreement + enforceability

Creation of contract

Expressed words spoken or written Implied inferred from the conduct of a person
Eg: travel in a bus or dining in a hotel

Execution

Executed Executory Partly executed and partly executory one has fulfilled and the other has to

Enforceability

Valid Contract Void Contract Void Agreement with minor Voidable contractcoercion/fraud/misreprese ntation Illegal Agreement Unenforceable technical problems

Essentials of a valid contract

Offer & Acceptance 2. Legal Relationship 3. Free Consent 4. Capacity of Parties 5. Lawful consideration 6. Lawful object Eg:Rent 7. Plurality of persons 8. Certainty of meaning Eg :oil 9. Possibility of performance
1.

10.Legal formalities

treasure

Eg:

Offer & Acceptance

Offer
When one person signifies to another Willingness to do or abstain from doing anything

Offer - Essentials

Expressed or Implied Positive or negative Legal Relationship Terms must be certain Specific person or to the worldCarlill Vs Carbolic smoke balls co. Offer must be communicatedFitch Vs Snedker; Lalman shukla Vs Gauri Dutt No obligation to reply Mode can be specified

Offer- Lapse or Revocation

Notice of revocation before acceptance Lapse of time Failure to fulfill condition by the acceptor Rejection Illegality Counter offer- rejection of the original and making a new offer.

Acceptance

Legal relationship created only on acceptance A proposal when accepted becomes a promise

Essentials

Absolute and unconditional Specified or usual mode Acceptance cannot precede offer Within reasonable time Once rejected cannot be accepted until it is renewed- counter offer

Consideration- something in return

Required for a contract Positive or negative Lawful Real not illusory Some value in the eyes of law Need not be adequate Not performance of existing duty Eg: Fire rescue

Consideration - Exceptions

Natural love & affection Venkatasamy vs Rangasamy; Rajlukhee vs Bhootnath Voluntary services Gift Gurantee

Contractual Capacity

Age of majority Sound mind Not disqualified by law

Sound Mind

Capable of understanding it Form a rational judgment Sec 12 usually insane, sometimes sane can contract, usually sane sometimes insanecannot sign when insane.

Mental Incompetence

Idiots Lunatics mental power is deranged Insane Drunkards

Minor

Not completed 18 yrs 21 in case of minors with guardians

Free Consent

Free Consent

Two or more persons are said to consent when they agree upon the same thing in the same sense Coercion Undue influence Misrepresentation Mistake

Coercion force or threat

Forbidden actRanganayakamma vs Alwarsetti Threat to commit any forbidden act Amiraju vs Seshamma Unlawful detection of property Muthian Chettiar vs Karuppan Chetti Coercion from any party or against any party Prosecute? High Prices? High Interest?

Undue Influence
When one party 1.dominates the will of the other i) when one holds the authority over the other Master servant Police-accused ii) Fiduciary relationship-mutual trust Father son; trustee- beneficiary

iii) When other partys mental capacity is affected temporarily or permanently Illness can be mental or bodily distress

Undue Influence
2. Unfair advantage over the other Gain, benefit or advantage obtained by unrighteous or undesirable means. Burden of proof: Dominator or dominated

Fraud
Intend to deceive another party. - A fact which is not true - Concealment of a fact - A promise without intent of performing it - Any act to deceive - An act declared fraudulent by law

Misrepresentation
Statement inaccurate but inaccuracy not due to any desire to defraud the other party i.e. there is no intention to deceive Aggrieved party cannot sue for damages but can only avoid the agreement.

Mistake
Erroneous belief Types 1.Mistake of law Law in India Law not in force in India 2.Mistake of fact - unilateral - bilateral

Contract
Types
1.

2.

Contingent Contract Quasi Contract

Contingent Contract
When the performance of a contract is not immediately due but it becomes so only after the happening or non-happening of some contingency (uncertain event). Its a conditional contract.

Quasi Contract
Certain obligations are imposed by law, when there is an absence of contract 1. Necessaries supplied to persons incapable of contracting 2. Payment by an interested person Eg:A- landlord;B- lease holder 3. Liability for non-gratuitous A- goods by mistake to B ; Upendra vs Naba- water tank 4. Responsibility of finder of lost goods A- finds diamond, B-refuses to part

Discharge of Contract

Discharge of Contract
Meaning termination of a contract 1.Performance 2. New Agreement 3. Operation of law 4. Impossibility of performance

Discharge of Contract
1.Performance - Actual - Attempted/ offer to perform/ Tender of performance

Discharge of Contract
2. New Agreement i. Novation or substitutionnew contract ii. Remission dispense/ extend time iii. Waiver abandon the right iv. Merger inferior right overtaken by superior right. Eg:tenant vs owner

Discharge of Contract
3. Operation of law
1. 2. 3.

Insolvency Death Lapse of time

Discharge of Contract
4. Impossibility of performance i. Destruction of the object necessary for the performance of contract. Eg: Marriage hall, theatre, crops ii. Change in law iii. Outbreak of war

Discharge of Contract
Impossibility of performance Cases not covered i. Difficulty of performance ii. Commercial impossibility iii. Strikes or lockouts

Breach of Contract
1. 2.

Actual at the time when performance is due Anticipatory- expressed or implied (impossibility)

Damages i. Ordinary ii. Special iii. Exemplary iv. Nominal

Contract of Sale Act, 1930

A contract of slae of goods is a contract whereby, the seller transfers or agrees to transfer the property in goods to the buyer for a price.

Essentials

Buyer & Seller Consideration money, partly money & goods Expressed or Implied Goods movable or immovable money, shares & stocks, growing crops ,grass, etc.

Agreement to Sell

Transfer of property Risk of loss Sale Buyer, the possession of goods is with the seller

Agreement to sell Seller the possession of goods is with the buyer.

Nature of Contract executed vs executionery

Indian Partnership Act, 1932

Definition
Partnership is the relation between persons, who have agreed to share the profits of a business carried on by all or any of them acting for all. Individuals - Partner Collectively - ?

Essentials
1. 2. 3. 4.

5.

Two or more persons: Min & Max Agreement Expressed or implied ? Sharing of profits Can one person bear all the losses? Mutual Agency- It may be carried on by all the partners or any of them acting for all. Legal status of the firm: - A firm is merely a collection of partners - It has no separate legal entity - The assets are jointly owned by the partners.

Classification of Partnership
1. 2.

3.

On the basis of duration Extent of business Liability

On the basis of duration

1.

Partner at Will : Duration not fixed

2.

Fixed Period

Extent of business
1.

Particular Partnership: EgConstuction of a bridge. General Partnership

2.

Liability
1. 2.

3.

Actual / Active Partner : active in the conduct of business Dormant : neither active nor known to the outsider. Contributes his/her share. Nominal : No real interest in business. Lends his name. Does not contributes his share or takes profit. Liable for all acts of the firm ?

Liability
4. Partner by Estoppel : represents to be a partner but, in reality not so. 5. Sub partner : one who share the profits of another partner. 6. Minor Partner : not a full fledged partner.

Partnership Deed

Created by agreement Written in the interest of partners. Stamped according to Stamp Act, 1894.

Partnership Deed - Contents

Name & Address of the firm, partners Scope & nature of business Ratio of P & L Amt of capital contributed by each Maintaining & auditing A/c books Salary of partners Allotment of work Retirement procedure Death Method of valuation of goodwill Dissolution Bank A/c Arbitration Clause

Registration
Registration creates proof of existence, it does not create partnership. Compulsory? Time of registration: Beginning? Before a suit? Procedure : Form & Fee, Register of Firms Certificate of Registration.

Rights of a Partner

Take part in business Be consulted Access accounts Share profits Prevent new partners Retire Not to be expelled Agent of the firm

Dissolution of Partnership
It implies the complete breakdown of partnership between all the partners. Case : X,Y,Z are partners. Z dies will partnership continue ?

If Z had agreed that partnership can continue even after his death?

Dissolution of Partnership
Agreement or Notice Liability Case : A,B,C are partners. D is a debtor. A retires, after retirement is A still liable? Can A carry on a competing business? Case: A,B,C are partners. C retires by giving a notice before a month. Before expiry of notice period places orders for procurement of goods. Should C compensate? Expulsion of a partner only when expressed contract is available.

Without the intervention of the Court

Agreement by all parties Dissolution of partnership by notice Operation of Law: Eg insolvency, illegal business, etc.

With the intervention of the Court

A partner becoming unsound mind Misconduct affecting business Willful breach of agreement Loss For any other reason for which in the opinion of the court, dissolution is just & equitable.

Case
Three partners operating a box car. One, creates a mechanical device, which reduces the labour cost and so demands higher share of profits. Is the claim justified?

Agent & Principal

Agent & Principal

Agency is a relation between two parties created by agreement, expressed or implied. The relationship of agency arises whenever, one

person called the agent has authority to act on behalf of another called principal.

Methods of Creating Agency

Expressed Implied Ratification Operation of Law

Expressed
It is in the form of executing a power of attorney Can be general or specific - General : agent can represent the principal in any matter. Specific : authority is restricted to terms & conditions, stated.

Can power be restricted by the principal? Can agent disown the power given?

Implied
Principal knows and does not objects Eg: Lakkappa, Works Manager Vs Manufacturing Firm

Ratification : The agent might not have authority or might exceed authority. Agent was not stopped in the past but had enjoyed the benefits of unauthorized acts. Operation of Law : Govt. appoints agents Eg: Banks.

Companys Act, 1956

A registered company means a co incorporated under the Cos Act, 1956. What about cos formed for promoting art, charity, religion or any other useful purpose. Def: A voluntary association of persons. A co, in the broad sense, may mean an association of individuals formed for some common purpose.

Characteristics of a Co
Separate legal entity: A co is separate from its members. It is an artificial person. What if the entire share capital is held by an individual?
1.

Precedents: a.Ram v Ram& co: Can Ram make contracts with the co? b.Salomon v Salomon & co ltd: Salomon by way of secured debenture is $ 10,000 Unsecured credit is $ 7,000. Total liability is $ 17,000 at the time of winding. Who should get the balance of $ 10,000 ?

c. Lee v Lees Airfarming ltd: L appointed himself as MD & chief pilot, diescompensated? d. Ramachandran v State of Kerala : Can authorities proceed against the director for Sales tax arrears?

2. Limited Liability: Liability limited to the face value of the share. 3.Perpetual succession : Co not affected by insolvency, mental disorder, retirement of any of its members. 4. Common Seal 5. Transferability of shares 6. Capacity to sue and be sued

7. Separate property: Macaura v Northern Assurance co ltd- M holder of all shares, except one. Insures timber in his name. Timber destroyed by fire. Insurance firm refused to pay. Is it justified ?

The veil of incorporation

US v Milwaukee Refrigerator Co A co will be looked upon as a legal entity as a general rulebut when it is used to defeat public convenience, justify wrong, perfect fraud or defend crime, the law will regard the corporation as a association of persons

Differences
Kinds of Cos Incorporated Statutory Existing Co by shares

Unincorporated
Registered Newly found Co by guarantee Unlimited

Incorporated: pertains to Cos Act Unincorporated Cos: a large partnership firm. Liability of members is unlimited, as long as there are less than 20 members, there is no problem. Statutory Cos: created by special Act of legislation. Eg: RBI, SBI or public utilities like Railways, Electricity

Registered Cos
Cos limited by Share Cos limited by guarantee : liability is the fixed amount, which members undertake in the event of winding up. Generally, not for profit cos, who work for art, culture, sports, etc. - Unlimited Cos: Every member liable for debt, as in partnership. 7 or more for public cos, 2 or more for pvt cos
-

Private v Public Cos

Pvt Cos : min capital of Rs. 1 lakh or higher. Restricts the right to transfer shares Limits the no. of its members to 50, not including employee members. Prohibits public to subscribe for shares Prohibits deposits from non-members Public Cos: - Minimum capital of 5 lakhs or more - May be listed or unlisted

Differences
Factor Public Private 2 50 1 lakh Restricts Restricted No limits Many, eg: no statutory meetings, reports, etc No.of Persons-Minimun 7 No.of PersonsMaximun Min Capital Invitation to subscribe shares Transferability Managerial remuneration Special Privileges No restriction 5 lakhs Invites Allowed Not more than 11% of net profits No

Formation of a Co Documents Required

Memorandom of Understanding Articles of Association Agreement regarding the Directors Declaration- signed by Advocate Charted Accountant Director or Secretary Certificate of Incorporation

Memorandum of Understanding

Def: It defines the cos raison d etre, i.e, reason for existence. It regulates the external affairs of the Co, in relation to outsiders. It is: Printed Divided in to paragraphs Signed by the members

Purpose

The prospective shareholder should know the purpose

Outsiders can know about the Co.

Contents
1. The Name Clause: The name ends with Ltd for public cos, Pvt Ltd for pvt cos. # Undesirable Names to be avoided too similar Misleading Case: Asiatic Govt. Security Life Insurance Co Ltd v New Asiatic Insurance Co Ltd.

Contents (cont..)
2. The State in which registered office is situated 3. Objects Main objects pursued by the co Other objects 4. Extent of liability 5. Share Capital

Alterations
1. 2.

3.

4.

Change of Name : By resolution Change of registered office: only after permission from Regional Director. Alteration of Objectives: Through special resolution and confirmation from CG. Change in liability: All members must agree in writing

Doctrine of Ultra Vires

Beyond Power Case: Simons v Heffer A co for prevention of cruelty to animals donates $80,000 to a politician, who has included it in the manifesto. $50,000 was given unconditionally, $30,000 was given to popularise the manifesto. Does that donation of $50,000 ultra vires ?

Articles of Association
Def: Rules & Regulations for internal management of the affairs of a Co. They are framed with the object of carrying out the aims and objects as set out in MoU.

Contents

Details about Share Capital Transfer of Shares Forfeiture of Shares General Meetings Voting Rights Directors- appointment, remuneration, qualification, etc Manager

Contents (Cont..)

Dividends & Resources Accounts & Audit Distribution of profits Winding Up Alterations: Cos have been given very wide powers to alter the articles. Alterations can be made by special resolutions.

Prospectus
Any document inviting deposits from the public or inviting offers from the public for the subscription of shares or debentures of a co is a prospectus.

Must be in writing. Dated Signed by all Directors

Case: Is advertisement in TV or a film a prospectus ?

Registration of Prospectus
A prospectus can be issued only when a copy has been delivered to the Registrar for registration. Prospectus is not required: 1. When shares are not offered to the public. 2. When shares are offered to existing memebers.

Share Capital
Equity share Capital With voting rights With differential rights 2. Preference Share Capital Payment of dividend during lifetime of the co Repayment of capital on winding up.
1.

Alteration of Capital
A limited co is authorised to a). Increase share by issueing new shares b). Consolidate & divide share capital into large amounts c). Sub divide shares into smaller amounts d). Cancel shares, which have not been taken up. f). Convert fully paid up shares in to stock

Factories Act 1948

Factories Act, 1948

Need: In India, illiterate workforce Exploited Safety compromised Objectives: To improve health, welfare & safety of the workmen. Regulate hours of work Provisions for the employment of women & children

Meaning of Factory
Any premise or precinct, where - 10 or more workers - Manufacturing process - With the aid of power Any premise, where - 20 or more workers - Manufacturing process - Without the aid of power

Precinct signifies an open space, enclosed by walls or fences on all sides.

Case 1: Large area of vacant lands, used as salt pans with temporary sheds for extracting salt. Is it a factory? (Bhiwandiwala v State of Bombay)

Case 2: A concrete apron of an airfield adjoining a hanger used for testing planes, was enclosed by a security fence. Is it a factory? (Well v Weather ground Co Ltd) Case 3: A premises, where the manufacturing process is carried with 7 persons employed permanently and 3 employed temporarily. ( Hari Krishnan v State)

Case 4: For computing the number of workers, can all the workers in different relays in a day taken into account. ( State of Gujarat v Shah)

What about - Cinema Hall - Petrol bunks

Manufacturing Process

Making, altering, repairing, ornamenting, finishing, packaging, cleaning, breaking up Pumping oil, water, sewage Printing, lithography Constructing, refitting, preserving, storing Generating, transferring, transporting power.

Cases

Kitchen attached to a hotel ( East West Hotels v ESI ) Use of refrigerator for treating any article, with a view to its sale ( New Taj Mahal Caf ltd v Inspector of Factories) Milking of cattle and its distribution ( Hari v Saken Employees Coop Society)

Power

Power means mechanical or electrical energy not energy generated by human or animal agency.

What about power not connected with activities of manufacturing ? ( New Taj Mahal Hotel v Inspector of Factories)

Licensing & Registration of Factories

Name & address of the factory, occupiers, owner of the premises Nature of manufacturing Total horse power installed Manager No. of workers

Submit these details to the : The Chief Inspector of Factories

Inspecting Staff

Chief Inspector Joint Inspector Addl Inspector Deputy Chief Inspector Inspector District Magistrate is regarded as an inspector of the district

Powers of Inspectors

Enter premises of a factory with assistants or with an expert Make examination of the premises Inquire into accidents Verify documents & registers Seize or take copies of records Take measurements & photographs

Penalty for obstructing the Inspector

6 months of imprisonment or fine up to Rs.10,000 or with both.

Health

Cleanliness : Removal of dirt and refuse, its disposal, painting & Varnishing once in 5 years. If whitewashed, once in 14 months. Disposal of wastes & effluents Ventilation & temperature roofs to be designed and be provided with heat resisting materials by way of insulation.

Artificial humidification: water used for this must be pure & constantly changed. Overcrowding: Atleast 500 cu.ft for every worker. Lighting : Glazed windows, avoid glare & shadows Drinking water: if more than 250 workers, cool water to be provided. Washrooms Spittoons: A fine of Rs.5, shall be imposed on any one who violates the rule.

Safety Measures
Fencing of machinery 2. Protection of eyes 3. Work near machinery in motion 4. Striking gear and devices for cutting off power 5. Casing of machinery 6. Hoists & lifts 7. Pits, sumps, opening in floors 8. Excessive weights 9. Dangerous fumes 10. Precaution of fires Safety officers when there are more than 1000 workers. The case of TNPL
1.

Welfare Measures
1. 2. 3.

4. 5.

6.

Facilities for washing, storing and drying clothes Sitting facilities First aid appliances: If more than 150 workers, a first aid box, if more than 500, an ambulance room. Canteen : if more than 250 workers. Crche: If more than 30 women employees. Welfare officers: when more than 500 workers.

Working Hours

Not more than 9 hours a day & 48 hours a week. Interval of rest : not more than 5 hrs of work continuously, without a break of 30 mins. Spread over time not to extend more than ten and half hours in any day.

Holidays

The worker shall have a holiday for every 6 days of continuous work.

Industrial Dispute Act, 1947

Industrial Dispute Act, 1947

-

i)
ii) iii)

Industrial growth depends on industrial peace Industrial peace Absence of strike, struggle & dispute Cordial relationship between employer & employee Industrial dispute means, differences between Employers v Employers Employer v Employee Workman v Workman

1. Grievance Settlement Authority: to be appointed when there are 50 or more workers. 2. Works Committee: when there are more than 100 workers. Representatives from both the employer & employee. Any decision arrived is only recommendatory.

3. Conciliation Officer appointed by govt. Report should be submitted within 14 days since the start of conciliatory proceedings. Case: If labour minister intervenes and settles, is it outside conciliation or within? (Caltex v Commissioner for labour)

4. Board of Conciliation: A Chairman and 2 or 4 persons. Report to be submitted before 2 months. Is strikes illegal during the proceedings. 5.Court of Enquiry: A chairman & 2 or more members. Constituted when agreement on all matters, yet disagreement in certain issues, which has to be examined in depth.

Layoff
Failure, refusal or inability of an employer on account of i. Shortage of coal, power, or raw material ii. Accumulation of stock iii. Breakdown of machinery iv. Natural calamity Can layoff be done due to old age of MD or fracture of a leg of the manager? (Tatanagar foundary v workmen)

Compensation for layoff : every workman who has put in a continuous service of one year, if laid off should be paid equal to 50% of the total basic wages & DA.

Will it include weekly holidays?

Retrenchment
It means termination of a worker by the employer for whatsoever reason, other than: i. VRS ii. Superannuation iii. Continued ill heath iv. Non renewal of contract v. Disciplinary action

Case 1: A driver working in Rajasthan ST Corp was terminated on account of his eye sight problem. Is it retrenchment? (Anand v RSTC n) Case 2: A workman was suffering from fits of intermittent nature (Bisva lime co v workmen s) Case 3: An employee failed in a test, that would have confirmed her job. Is it retrenchment? (Gupta v State bank of Patiala s) Case 4: Termination based on loss of confidence of an employee

Procedure
Retrenchment is based on last come , first go. One month notice Reasons for Retrenchment 15 days pay for every completed year of service

Closure
Complete closing down of business resulting in pulling down the shutters once and for all. Procedure: - Notice atleast 60 days before closure - Else salary in lieu of notice - The compensation shall not exceed 3 months pay, if reasons are beyond the

Closure
Unavoidable reasons: Financial difficulties Accumulation of stocks Expiry of lease period Exhaustion of minerals Case 1: A proprietor closing down on account of his hyper tension. Is it beyond his control? (Shyamsunder v Presiding officer n) Case 2: Products mfrd by a co, not in conformity with the ISI std, resulting in the prohibition of products from being marketed. (Mgmt of Jeewa lal v Presiding

Minimum Wages Act, 1948

Min wages: It signifies the lowest limit of wage level, below which no employer will be allowed to reduce further Fair wages: It should be sufficient to provide, a std family, with food, shelter, clothing, medical care and education for children. Living wages: normal needs of a worker, ensures bare physical subsistence & maintenance of

Minimum Wages Act, 1948

Fixation: Government No. of employees : 1000 min Based on: i. Time rate ii. Piece rate iii. Combination iv. Overtime rate Methods: 1. Committee method: appointed by govt 2. Notification method: views are invited before 2 months. Advisory Boards role can be recommended. Case: Is the govt bound to accept the report submitted by the committee?

Workmans Compensation Act, 1923

Dependants: widow, minor, legitimate son, unmarried legitimate daughter & widowed mother. Case: would a widow be entitled to receive w.c., if she gets remarried (Moondra & co v Bharadwari) Case 2: If mother remarries (Ravuri v Dosari) Case 3: Illegitimate minor son or illegitimate unmarried daughter

Workmans Compensation Act, 1923

i. ii. iii. iv.

Disablement : loss of capacity to work or move, resulting in reduction of a workers earning capacity. Can compensation be given for loss of physical capacity but no loss of earning? Disablement: Partial Total Permanent Temporary

Workmans Compensation Act, 1923

Can casual employees claim compensation. Case 1:Can the injury be mental injury, including psychological one( Yutes v South Colliers s) Case 2: an employee, employed in a/c room but job necessitated him to frequent to a hot place, resulting in pnemonia. Is his death due to personal injury. (Indian news chronicle v Mrs. Lazarus)

Workmans Compensation Act, 1923

Case 3 : A person became insane on account of an accident at workplace. The said person committed suicide. Is the death an accident and compensation be given? (Grime v Fletcher)

Workmans Compensation Act, 1923

Arising out of employment: Case 1: A lathe operator has no business to drive a trolley. Drives it and meets with accident should he be given compensation? Case 2 : A road worker as he was working ran for cover under a tree due to heavy rain. The tree fell on him. Should he be given compensation.

Workmans Compensation Act, 1923

Is duration of time spent on traveling said to be in the course of employment? Case 1: A driver in BEST & co holding a pass met with an accident on his way home. Is the accident in the course of employment? (GM v Mrs.Agnes) Case 2: A worker knocked down by the employers truck, just 1 mile away from the factory,

Workmans Compensation Act, 1923

Case 4: A workers work starts at 8.00 am but h starts at 7.45 am and meets with accident. Should he be compensated? Case 5 : An accident has taken place inside the factory to a worker, who has no right to be working at that place, at that time. Should he be compensated? (Bhuvangya v

General Meetings of Shareholders

Statutory Meeting

First meeting of the shareholders of a public co. After 1 month but before 6 months The BoD will send a statutory report Before 21 days.

Contents of the Statutory Report

Total shares allotted Cash received Abstract of receipts & payments Directors & Auditors Contracts

Procedure

List of members and the no. of shares held by them. Discussion of matters relating to formation aspect Adjournment

Default

Non Compliance: Every Director will be fixed to the tune of Rs.5000 If statutory report is not delivered to registrar or not holding meeting co will be wound up. What about a pvt co? A co limited by guarantee?

AGM

The interval shall not be more than 15 months. First AGM within 18 months of incorporation. With regard to AGM, can distinction be made between public co and pvt co (Registrar of Cos v Cabral & Co n) 21 days notice

EGM
Statutory & AGM are ordinary meetings, any meeting other than these are called EGM.

Purpose: For transacting some urgent or spl business, which cannot be postponed till next AGM.

BoD on requisition form members Can requestionists themselves convene EGM, on the failure of BoDs. Can it be outside business hours & on public holidays. Can a co conduct it outside the registered office or outside the State.

Are people who have not paid a call on their shares be entitled to request EGM or vote at a general meeting (Singh v Payen ltd n) Can EGM transact any business than that for which it is expressly convened ( Ball v Metal India ltd n)

Requisites of a Valid Meeting

Proper Authority BoD A proper notice must be served. Notice to every person.

Case: 9 members were not given notice because the dividend sent to those address was not encashed. Is this accidental omission. (W. Colliers v State s)

Case: M sold shares to D. D has to pay in installments. But, when the last installment was yet to be paid, an AGM was held and notice was not sent to M. Is it accidental error?
n

3.Qurum for meeting: minimum no. of members who must be present 5 for public cos 2 for any other co 4. Chairman of the meeting 5. Minutes of the meeting

Winding Up

Winding up or liquidation represents the last stage of a co. Assets disposed Debits paid off Surplus, if any, is distributed.

Modes
1. 2.

Winding up by NCLT Voluntary winding up a. members voluntary winding up b. creditors voluntary winding up

National Company Law Tribunal

Winding up due to: Spl resolution Default in delivering statutory report If a co does not commences business in 1 yr. If no. of members is reduced below 7 in public and 2 in pvt. Default in filing P &L, balance sheet for 5 consecutive years. If it has acted against the integrity of India. For any just & equitable reason.

Case: A co suspended business for 3 consecutive years due to depression in trade. A shareholder presented a petition for winding up. Four fifths in value, shareholders opposed the petition and wanted continuous operations after prospects improves. (Middlesborough assembly co. d)

Case: A shipping co lost its only ship. Remaining assets were paltry. Majority wanted winding up, minority wanted to continue. Is it just & equitable to wind up.
s

Case : A & B were the only shareholders & directors. Both were bitterly hostile with each other in many important factors. The co made large profits inspite of it. Should it be wound up? (Yenidje Tobacco co ltd)

Case : A & B were the only shareholders & directors. Both were bitterly hostile with each other in many important factors. The co made large profits inspite of it. Should it be wound up? (Yenidje Tobacco co ltd)

Held: there was a complete deadlock in the management and the co was ordered to wind up.

Petition
An application to the tribunal may be presented by

The co The creditor Registrar Central govt

Case: A co unable to pay its debts but, after filing a petition for winding up, the principal was paid but, not the interest. Can the co be ordered to wind up? (Delhi cotton mills v Stephan Chemicals s)

Voluntary Winding up
By
-

Ordinary resolution Special resolution

Case: Fowler was appointed MD for 5 yrs. Before expiration of 5 yrs, the co passed a resolution to wind up. F voted in favour of it. Can he recover damages. s

Consequences of Voluntary Winding

Effect on status of a Co : with the commencement of winding up, the co ceases to carry a business Boards powers ceases on appointment of liquidator. Notice of discharge to the employees of the co.

Distribution of property, first to preferential payments then to liabilities. Notification of liquidification: in all invoices, orders for goods, business letters, etca statement of notice to be attached. Fine in case of default is Rs. 5000.