Business Laws Solved Question Papers
B.Com 1st Sem
Dibrugarh University
2014 (November) – Semester System
The figures in the margin indicate full marks for the questions
1. Write True or
False:
1x8=8
a) Offer may be implied. True,
May be expressed or implied
b) Acceptance may be conditional. True, conditional,
expressed or implied
c) Agreement with a minor is void. True
d) Consideration from stranger to
contract is valid. True
e) Money cannot be a subject matter
of sale under the Sale of Goods Act 1930. True
f) Breach of warranties by one party
entitles the other party to repudiate the contract. False, Claim for damage but cannot repudiate. But in
case of breach of condition, contract can be repudiated.
g) Share warrants are Negotiable
Instruments. True,
but a share certificate is not a negotiable instruments.
h) A government hospital is
considered as an industry under the Industrial Disputes Act, 1947. False
2. Write short notes on (any
four): 4x4=16
a) Capacity of parties
b) Free consent
c) Caveat emptor
d) Hire purchase
e) Quasi-contract
f) Promissory note
3. (a) Explain the term
‘contract’. Discuss the essential elements of a valid
contract. 4+14=14
Ans: Meaning of Contract and Its essentials or (“All contracts are
agreements, but all agreements are not contracts.” [Essentials of a Valid
Contract] or “A Contract is an agreement enforceable by Law”)
Section 2 (h) defines ‘Contract’ as an
agreement enforceable by law. If we
analyse the definition it has two components viz.
1. An agreement
between two or more persons "To Do" or "Not to Do"
something.
2. An enforceability
of such an agreement at law i.e. personal rights and personal obligations
created and defined by agreement must be recognized by law.
Section 2 (e) defines ‘agreement’ as “every
promise and set of promises forming consideration for each other”. For a
contract to be enforceable by law there must be an agreement which should be
enforceable by law. To be enforceable, the agreement must be coupled with
obligation. Obligation is a legal duty to do or abstain from doing what one
promised to do or abstain from doing.
All contracts are agreements but for agreement to be a contract it has
to be legally enforceable.
Section10 of the Act provide “All agreements
are contracts if they are made by the free consent of the parties competent to
contract for lawful object & are not hereby expressly declared void.”
An agreement in
order to become a contract must be enforceable by law. Agreements, which do not
fulfill the essential requirements of a contract, are not enforceable. Thus when an agreement enables a person to
compel another to do something or not to do something it is called a contract.
Thus all contracts are agreements but all agreements are not contracts. In order to become a valid contract an
agreement must posses the following essential elements:
a) Offer & Acceptance: There
must be two parties to an agreement i.e. one making the offer & other party
accepting it. Acceptance of must be unconditional & absolute. A part of an
offer cannot be accepted. The terms of an offer must be definite. The
acceptance must be in the mode as prescribed & must be communicated. The
acceptor of an offer must accept it in the same way & same sense & at
the same time as offered by the offeror i.e. there must be consensus ad idem.
b) Intention to create legal relationship: When two parties
enter into a contract their intention must be to create legal relationship. If
there is no such intention between the parties, there is no contract between
them. Agreements of a social or domestic nature to do not constitute contracts.
c) Lawful consideration: An
agreement to be enforceable by law must be supported by consideration.
“Consideration” means an advantage or benefit which one party receives from
another. It is the essence of bargain. The agreement is legally enforceable
only when both parties give something or get something in return. An agreement
to do something without getting anything in return is not a contract. Contract
must be in cash or kind.
d) Capacity to Contract-Competency: The
parties competent to contract must be capable of contracting i.e. they must be
of the age of majority, they must be of sound mind & they must not be
disqualified from contracting by any law to which they are subject to. An agreement with minors, lunatics, drunkards,
etc. is not contract & does not get a legal title.
e) Free Consent: It is
necessary between the contracting parties to have a free & genuine consent
to an agreement. The consent of parties is said to be free when the contracting
parties are of the same mind on the materials of a contract. They must mean the
same thing at the same time the parties must not enter into a contract under
undue influence, coercion, misrepresentation etc. If these flaws are present in
an agreement it does not become a contract.
f) Lawful object: The
object of an agreement must be lawful. It should not be illegal, immoral or it
should not oppose public policy. If an agreement suffers from a legal flaw with
respect to object it is not enforceable by law & so it is not a contract.
g) Agreement not declared void: For an
agreement to be a contract it is necessary for the agreement must not be
expressly declared void by any law in force in the country.
h) Possibility & Certainty of performance: The terms
of an agreement must not be vague or indefinite. It should be certain. The
agreement must be to do a thing which is possible. For e.g. an agreement to
sell a car for Rs. 100/- if sun does not rise tomorrow. This agreement is
impossible & so not enforceable by law.
Thus,
agreement is the genus of which contract is the specie.
Or
(b) Discuss the
various modes of discharge of
contracts.
14
Ans: Meaning of Discharge of a Contract
Discharge of a contract means
termination of the contractual relations between the parties to a contract. A
contract is said to be discharged when the rights and obligations of the
parties under the contract come to an end.
Modes
of discharge of a contract: A Contract is said to be discharged when the
rights and obligations created by it come to an end. A contract may be
discharged in the following modes:-
1)
Discharge
by performance: Discharge by performance takes place when the parties to a
contract fulfill their obligations arising under the contract within the time
and in the manner prescribed. Performance may be actual performance or
attempted performance.
2)
Discharge
by Agreement or Consent: A Contract comes into existence by an
agreement and it may be discharged also by an agreement. The following are
modes of discharge of a contract by an agreement:
a) By Waiver: Waiver takes place when the parties to
a contract agree that they shall no longer be bound by the contract. For e.g. A
an actor promised to make a guest performance in the film made by B. Later B
forbids A from making the guest appearance. B is discharged of his obligation.
b) By Novation: Novation
occurs when a we contract is substituted for an existing contract, either
between the same parties or between different parties, the consideration being
the discharge of old contract, mutually. E.g.: A is indebted to B & C to C.
By mutual agreement B’s debt to C & B’s loan to A are cancelled & C
accepts as his debtor.
c) By Rescission:
Rescission of a contract takes place when all or some of the terms of the
contract are cancelled. It may occur by mutual consent or where one party fails
in the performance of his obligations, the other party may rescind the
contract.
d) By alteration:
Alteration of a contract may take place when one or more of the terms of the
contract is/are altered by mutual consent of the parties to the contract.
e) By Remission: Remission
means acceptance of a lesser fulfillment of the promise made, E.g. Acceptance
of a lesser sum than what was contracted for, in discharge of the whole of the
debt.
f) By Merger: Merger takes place when an inferior
right accruing to a party under a contract merges into a superior right
accruing to the same party under the same or some other contract. For e.g. P
holds a property under a lease. He later buys the property. His rights as a
lessee merge into his rights as an owner.
3) Discharge by impossibility of performance: If a
contract contains an undertaking to perform impossibility, it is void ab initio. As per Section 56,
impossibility of performance may fall into either of the following categories –
(i)
Impossibility existing at the time formation of the contract: This is
known as pre-contractual impossibility. The fact of impossibility may be:
a) Known
to the parties: Both the parties are aware or know that the contract is to
perform an impossible act. For e.g. A agrees with B to put life into dead wife
of B, the agreement is void.
b) Unknown
to the parties: Both the parties are unaware of the impossibility. The
contract could be on the ground of mutual mistake of fact. For e.g. contract to
sell his house at Andaman to B. Both the parties are in Mumbai and are unknown
to the fact that the house is actually washed away due to Tsunami.
(ii) Impossibility
arising subsequent to the formation of the contract: Where impossibility of
performance of the contract is caused by circumstances beyond the control of
the parties, the parties are discharged from further performance of the
obligation arising under the contract.
4) Discharge by lapse of time: The Limitation Act, 1963 lays down certain
specified periods within which different contracts are to be performed and be
enforceable. If a party to a contract does not perform, action can be taken
only within the time specified by the Act. Failing which the contract is
terminated by lapse of time. For e.g. A sold a gold chain to B on credit without
any period of credit, the payment must be made or the suit to recover it, must
be instituted within three years from the date of delivery of the instrument.
5) Discharge by Operation of Law: A contract
may be discharged independently of the wished of the parties i.e. by operation
of law. This includes discharge:
a) By death: In contract involving personal skill
or ability, the contract is terminated on the death of the promisor. In other
contracts the rights and liabilities of a deceased person pass on to the legal
representatives of the deceased person.
b) By insolvency: When a
person is declared insolvent, he is discharged from all liabilities incurred
prior to such declaration.
c) By unauthorized material alteration of the
terms of a written agreement: Any material alteration made by a party to
the contract, without the prior permission of the other party, the innocent
party is discharged.
d) By rights and liabilities becoming vested in
the same person: When the rights and liabilities under a
contract vests in the same person.
6) Discharge by Breach of Contract: A breach
of contract occurs when a party thereto without lawful excuse does not fulfill
his contractual obligation or by his own act makes it impossible that he should
perform his obligation under it. A breach to a contract occurs in two ways:-
a) Actual Breach: When a
party fails, or neglects or refuses or does not attempt to perform his
obligation at the time fixed for performance, it results in actual breach of
contract. For e.g. A promises to deliver 100 packs of ice-cream to B on his
wedding day. A does not deliver the packs on that day. A has committed actual
breach of the contract.
b) Anticipatory Breach:
Anticipatory Breach is a breach before the time of the performance of the
contract has arrived. This may take place either by the promisor doing an act
which makes the performance of his promise impossible or by the promisor, in
way showing his intention not to perform it.
4. (a) Define Conditions. Explain
the implied conditions in a contract of sale of goods. 2+12
Ans: In a contract of sale, the subject matter is
‘goods’. There are millions of sale transactions which occur in the normal
course, all around the world. There are certain provisions which need to be
fulfilled because it is demanded by the contract. These prerequisites can
either be a condition and warranty. The condition is
the fundamental stipulation of the contract of sale whereas Warranty is
an additional stipulation.
Condition: Section 12(2) states that a
condition is a stipulation which is essential to the main purpose of the
contract. The breach of a condition gives rise to a right to treat the contract
as repudiated or broken. So according the above
definition it is clear that condition is very essential for the performance of
a contract. The breach of condition will be regarded as the breach of the whole
contract.
Example: A buys
from B hair oil advertised as pure coconut oil. The oil turns out to be mixed
with herbs. A can return the oil and claim the refund of price.
Implied
Conditions:
1.
Condition as to title: In a contract of sale, unless the
circumstances of the contract are such as to show a different intention, there
is an implied condition on the part of the seller that –
(a) In the case of a sale, he has a right to
sell the goods and
(b) In the case of an agreement to sell, he
will have a right to sell the goods at the time when the property is to pass.
2. Sale by
description: Where there is a contract for the sale of goods by description,
there is an implied condition that the goods shall correspond with the
description (Section 15). If you contract to sell peas, you cannot oblige a
party to take beans.
3. Sale by
sample: In a case of a contract for sale by sample, there is an implied
condition:
(a) That the bulk shall correspond with the
sample in quality
(b) That the buyer shall have a reasonable
opportunity of comparing the bulk with the sample.
(c) That the goods shall be free from any
defect, rendering them unmerchantable.
4. Sale by
description as well as sample: Section 15 further provides that if the sale
is by sample as well as by description, the goods must correspond both with the
sample and with the description.
5.
Condition as to quality or fitness: Normally, in a contract of sale
there is no implied condition as to quality or fitness of goods for a
particular purpose. The buyer must examine the goods thoroughly before he buys
them in order to satisfy himself that the goods will be suitable for the
purpose for which he is buying them. However, in the following instances, the
condition as to quality or fitness applied –
(a) Where the buyer, expressly or by
implication makes known to the seller the particular purpose for which he needs
the goods and depends upon the skill and judgement of the seller whose business
it is to supply goods of that description, there is an implied condition that
the goods are reasonable fit for that purpose. [Section 16(1)]. For e.g. an
order was placed for some Lorries to be used “for heavy traffic in a hilly area”.
The Lorries supplied were unfit and broke down. Held, there is a breach of condition as to fitness.
(b) An implied condition as to quality or
fitness for a particular purpose may also be annexed by the usage of trade.
[Section 16(3)]
6.
Condition as to merchantability: Where goods are bought by description
from a seller who deals in goods of that description, here is an implied
condition that the goods are of merchantable quality. This means that the goods
should be such as are commercially saleable under the description by which they
are known in the market at their full value.
7.
Condition as to wholesomeness: In the case of eatable and provisions,
in addition to the implied condition as to merchantability, there is another
implied condition that the goods shall be wholesome. For e.g. C bought a bun
containing a stone which broke one of C’s teeth. Held, he could recover
damages.
8.
Condition implied by custom: An implied condition as to quality or
fitness for a particular purpose may also be annexed by the usage of trade in
the locality concerned.
Or
(b) Discuss the silence
features of the Consumer Protection Act,
1986. 14
Ans: Features of Consumer
Protection Act are:
a) The Act applies to all goods and services unless specially exempted by
Union Government.
b) It covers all sectors – public, private or cooperative.
c) Provisions of the Act are compensatory in nature.
d) It contains all consumers’ rights - to choose, to be heard, to be
informed, to safety, education and redressal.
e) It empowers consumers seeking discontinuance of trader’s malpractices,
defective goods, service deficiencies or withdrawal of hazardous goods from the
market.
5. (a) Explain the term
‘crossing a cheque’. Discuss the various types of crossing. 4+10=14
Ans:
Crossing of a cheque
A cheque is said to be crossed when two
parallel transverse line with or without any words are drawn on the left hand
corner of the cheque. The negotiability of a cheque doesn’t affect for
crossing. Crossing of a cheque refers to the instruction to the banker relating
to the payment of the cheque. A crossing is the direction to the paying banker
that the cheque should be paid only to a banker. Crossing of cheque is very
safety because the holder of the cheque is not allowed to cash it across the
counter. A crossed cheque provides protection not only to the holder of the
cheque but also to the receiving and collecting bankers.
The
following parties can cross a cheque:
a) The
Drawer: The drawer of a cheque may cross a cheque before issuing it. He may
cross it generally or specially.
b) The
Holder: The holder of a cheque can cross in the following way:
Ø The holder
may cross an open cheque generally or specially.
Ø The holder
may specially cross a generally crossed cheque.
Ø The holder
may add the words “Not-Negotiable” in a generally or specially crossed cheque.
c) The
Banker: The banker to whom the cheque is crossed specially may again cross it
especially to another banker's agent, for collection. This is called double
special crossing.
Types of
crossing:
1. General crossing: A general
crossing is a crossing where a cheque simply bears two parallel lines with or
without any words and without any specification. According to Sec. 123 of the
Negotiable Instrument Act, 1881, “When a cheque bears across its face an
addition of the words. “and company” or any abreactions thereof between two
parallel transverse line or of two parallel transverse lines simply either or
without the words, “Not Negotiable” that addition shall be deemed a general
crossing. Simplify, In case of General crossing words such as “and company”,
“not Negotiable”, “Account payee” etc. may be inserted between the lines.
A general crossing cheque protects the drawer
and also the payee or the holder thereof. Whenever a drawer desires to make
payment to an outstation party, he can cross the cheque so that even if the
cheque is lost, only a piece of paper is lost and nothing beyond that. If by
any chance, it is encashed by a third and unauthorized person, it is possible
to find out to whose account the amount is credited and the unauthorized person
can be identifies and suitable action taken against him.
2. Special crossing: Section 124 of the
Negotiable Instruments Act, 1881 defines special crossing as “where a cheque
bears across its face, an addition of the name of a banker with or without the
words “not negotiable”, that addition shall be deemed a crossing and the cheque
shall be deemed to be crossed specially and to be crossed to that banker.”
Thus, in case of
special crossing, the name of a particular bank is written in between the
parallel lines. The main implication of this type of crossing is that the amount
of the cheque will be paid to the specified banker whose name is written in
between the lines. Special crossing is in a particular bank and by special crossing,
he is assured of double safety, safety to the drawer and safety to the payee.
3. Account payee crossing: This type of crossing is done by adding
the words ‘Account Payee’. This can be made both in general crossing and
special crossing. The implication of this type of crossing is that the
collecting banker has to collect the amount of the cheque only for the payee.
If he wrongly credits the amount of the cheque to another account, he will be
held responsible for the same.
4. Not negotiable crossing: When the words ‘not negotiable’ is added
in generally or specially crossed cheques, it is called not negotiable
crossing. A cheque bearing not negotiable crossing cannot be transferred. If a
cheque bearing ‘Not negotiable crossing’ is transferred, care must be taken
regarding the ownership of title of both the transferor and transferee.
Or
(b) Define Negotiable
Instruments and describe its
characteristics. 4+10=14
Ans: Meaning of Negotiable Instruments
Negotiable Instruments are money/cash
equivalents. These can be converted into liquid cash subject to certain
conditions. They play an important role in the economy in settlement of debts
and claims. The transactions involving the Negotiable Instruments in our
country are regulated by law and the framework of the Statute which governs the
transaction of these instruments is known as The Negotiable Instruments Act.
This act was framed in our country in the year 1881 when the British ruled our
country. Prior to 1881 the transactions governing Negotiable Instruments were
regulated under the cover of Indian Contract Act 1872.
The term ‘negotiable’ means
transferable and the word ‘document’ means ‘in writing’. Therefore, negotiable
means a written promise or order to pay money which may be transferred from one
person to another.
Section 13 of the Negotiable Instruments Act,
1881 states, “A negotiable instrument means a promissory note, bill of exchange
or cheque payable either to order or to bearer.” A negotiable instrument may be
made payable to two or more payees jointly, or it may be made payable in the
alternative to one of two, or one or some of several payees.
Essentials
or Characteristics of Negotiable Instruments:
a) Witting and Signature according to the rules: A
Negotiable Instrument must be in writing and signed by the parties according to
the rules relating to (a) promissory notes, (b) Bills of Exchange and (c)
Cheques.
b) Payable by Money: Negotiable Instruments are payable by the
legal tender money of India. The Liabilities of the parties are governed in
terms of such money only.
c) Unconditional Promise: If the instrument is a promissory note, it
must contain an unconditional promise to pay. If the instrument is a bill or
cheque, it must be an unconditional order to pay money.
d) Freely transferable: A negotiable instrument is transferable from
one person to another by delivery or by endorsement and delivery.
e) Acquisition of Property: Any person who possesses a negotiable
instruments, becomes its owner and entitled to the sum of money, mentioned on
the face of the instrument. When it is payable to bearer, the property in its
passes from one holder to another by mere delivery. If it is payable to order,
the property passes by endorsement, i.e. by the signature of its holder on its
back and its delivery.
f) Acquisition of Good Title: The holder in due course, i.e. the transferee
of a negotiable instrument in good faith and for value, acquires a good title
to the instrument even if the title of the transferor is defective. Further his
title will not be affected, by any defect in the title of the transferor.
g) No Need of Giving Notice: There is no need of giving a notice of
transfer of a negotiable instrument to the party liable to pay the money.
h) Right of the Holder in Due Course: The holder in the due course remains
unaffected by certain defenses, which might be available against previous
holders, as for example , fraud, to which he is not a party.
i)
Certain
Presumptions: Unless contrary proved certain presumptions are in the made case
of all negotiable instruments. Consideration, date, signature of holder in due
course, for example, is presumed in the case of all instruments. The
presumptions from Special rules of Evidence under section 118 to 119.
6. (a) Discuss the
terms: 7+7=14
(i) Public Utility Services
(ii) Industrial Dispute
Ans: "Public utility service" means: (i) any railway service or any
transport service for the carriage of passengers or goods by air; (ii) any
service in, or in connection with the working of, any major port or dock;
(ii) any section of an industrial
establishment, on the working of which the safety of the establishment or the
workmen employed therein depends;
(iii) any postal, telegraph or
telephone service;
(iv) any industry which supplies
power, light or water to the public;
(v) any system of public
conservancy or sanitation;
(vi) any industry specified in the
First Schedule which the appropriate Government may, if satisfied that public
emergency or public interest so requires, by notification in the Official
Gazette, declare to be a public utility service for the purposes of this Act,
for such period as may be specified in the notification.
Industrial Dispute: An industrial dispute may be defined as a
conflict or difference of opinion between management and workers on the terms
of employment. It is a disagreement between an employer and employees'
representative; usually a trade union, over pay and other working conditions
and can result in industrial actions. When an industrial dispute occurs, both
the parties, that is the management and the workmen, try to pressurize each
other. The management may resort to lockouts while the workers may resort to
strikes, picketing or gheraos.
As per Section
2(k) of Industrial Disputes Act, 1947, an industrial dispute in defined as any
dispute or difference between employers and employers, or between employers and
workmen, or between workmen and which is connected with the employment or
non-employment or the terms of employment or with the conditions of labor, of
any person.
Causes of Industrial Disputes
1. Low income: As prices and living expenses
are rising in India, employees also expect their income to rise. Unfortunately,
that rarely happens. To make things worse, there is only one earning member in
the household and this person alone supports everyone financially. Many times,
the income is not enough to keep everyone content and pay all the bills. Thus,
if the earning member loses his/her job, the entire family suffers in poverty.
Low wages cause discontent in employees.
2. Prices in India are rising constantly,
hence, it is also expected that the income of industrial labourers increase,
but that never happens.
3. Dearness Allowance associated with
labourers has no corresponding increase with rising prices.
4. Most industries have unhygienic and unsafe
working conditions. This puts pressure on workers' health.
5. Employees find it extremely difficult to
get leave with pay.
6. Employees are becoming more and more
conscious about self-respect. Tempers flare when they are insulted or
instigated by their superiors.
7. Most of the time, extra bonus is not paid,
or not paid on time. This causes industrial conflicts.
8. Sometimes, employees are unfairly relieved
from their jobs. Nevertheless, their colleagues unite and fight for the
rehiring of their relieved colleagues.
9. Sometimes, trade unions are not recognized
by industries resulting in strained relations and stress.
Or
(b) Define Strike and
Lockout. Discuss the general prohibitions on strike and
lockout. 3+3+8=14
Ans: Strike: A
strike is a very powerful weapon used by trade unions and other labor
associations to get their demands accepted. It generally involves quitting of
work by a group of workers for the purpose of bringing the pressure on their
employer so that their demands get accepted. When workers collectively cease to
work in a particular industry, they are said to be on strike.
According to
Industrial Disputes Act 1947, a strike is “a cessation of work by a body of
persons employed in an industry acting in combination; or a concerted refusal
of any number of persons who are or have been so employed to continue to work
or to accept employment; or a refusal under a common understanding of any
number of such persons to continue to work or to accept employment”. This
definition throws light on a few aspects of a strike. Firstly, a strike is a
referred to as stoppage of work by a group of workers employed in a particular
industry. Secondly, it also includes the refusal of a number of employees to
continue work under their employer.
Lockout: A
lockout is a work stoppage in which an employer prevents employees from
working. It is declared by employers to put pressure on their workers. This is
different from a strike, in which employees refuse to work. Thus, a lockout is
employers’ weapon while a strike is raised on part of employees. Acc to
Industrial Disputes Act 1947, lock-out means the temporary closing of a place
of employment or the suspension of work or the refusal by an employer to
continue to employ any number of persons employed by him.
A lockout may
happen for several reasons. When only part of a trade union votes to strike,
the purpose of a lockout is to put pressure on a union by reducing the number
of members who are able to work.
Section 22: Prohibition of Strikes and Lock outs:
1.
No person
employed in a public utility service shall go on strike, (a) without giving to
the employer notice of strike within six weeks before striking or (b) within
fourteen days of giving such notice or (c) before the expiry of the date of
strike specified in any such notice as aforesaid or (d) during the pendency of
any conciliation proceedings before a conciliation officer and seven days after
the conclusion of such proceedings.
2.
No employer
carrying on any public utility service shall lock-out any of his workman (a)
without giving them notice of lock-out within six weeks before locking-out; or
(b) within fourteen days of giving such notice; or (c) before the expiry of the
date of lock-out specified in any such notice as aforesaid; or (d) during the
pendency of any conciliation proceedings before a conciliation officer and
seven days after the conclusion of such proceedings.
3.
The notice of lock-out or strike under this
section shall not be necessary where there is already in existence a strike or,
as the case may be, lock-out in the public utility service, but the employer
shall send intimation of such lock-out or strike on the day on which it is
declared, to such Authority as may be specified by the appropriate Government
either generally or for a particular area or for a particular class of public
utility services.
4.
The
notice of strike referred to in sub-section (1) shall be given by such number
of persons to such person or persons and in such manner as may be prescribed.
5.
The notice of lock-out referred to in
sub-section (2) shall be given in such manner as may be prescribed.
If on any day an employer receives
from any person employed by him any such notices as are referred to in
sub-section (1) or gives to any persons employed by him any such notices as are
referred to in sub-section (2), he shall within five days, thereof report to
the appropriate Government or to such authority as that Government may
prescribe the number of such notices received or given on that day.
Section 23: General Prohibition of Strikes and Lock-outs:
No workman who is
employed in any industrial establishment shall go on strike and no employer of
any such workman shall declare a lock-out
1. during the pendency of conciliation proceedings before a Board and
seven days after the conclusion of such proceedings;
2. during the pendency of proceedings before a Labour Court, Tribunal
or National Tribunal and two months after the conclusion of such proceedings
3. during any period in which a settlement is in operation,
Old Course (Business Regulatory Framework)
Full Marks: 80
Pass Marks: 32
1. Find out the right
answers:
1x8=8
a) The Indian Contract Act was passed in 1872/1772.
b) Void agreements and void contracts are same/not same. False
c) An unpaid seller obtains/not obtains right against
buyer. False,
both
d) To execute a contract of sale, price is
essential/non-essential element. True
e) The Negotiable Instruments Act of India is
applicable from 1881/1981.
f) A sale is an executory contract. (Yes/No) No
g) The Consumer Protection Act was passed in 1976/1986.
h) The maximum age limit of a member of district forum
is 67/65 years. True
2. Write short notes on (any four):
4X4=16
a) Illegal Agreements
b) Future goods
c) Crossed Cheque
d) Consumer
e) Penalties
3. (a) “A contract is an
agreement enforceable by law.”
Explain.
11
Ans: Meaning of Contract and Its essentials or (“All contracts are
agreements, but all agreements are not contracts.” [Essentials of a Valid
Contract] or “A Contract is an agreement enforceable by Law”)
Section 2 (h) defines ‘Contract’ as an
agreement enforceable by law. If we
analyse the definition it has two components viz.
1. An agreement
between two or more persons "To Do" or "Not to Do"
something.
2. An
enforceability of such an agreement at law i.e. personal rights and personal
obligations created and defined by agreement must be recognized by law.
Section 2 (e) defines ‘agreement’ as “every
promise and set of promises forming consideration for each other”. For a
contract to be enforceable by law there must be an agreement which should be
enforceable by law. To be enforceable, the agreement must be coupled with
obligation. Obligation is a legal duty to do or abstain from doing what one
promised to do or abstain from doing.
All contracts are agreements but for agreement to be a contract it has
to be legally enforceable.
Section10 of the Act provide “All agreements
are contracts if they are made by the free consent of the parties competent to
contract for lawful object & are not hereby expressly declared void.”
An agreement in
order to become a contract must be enforceable by law. Agreements, which do not
fulfill the essential requirements of a contract, are not enforceable. Thus when an agreement enables a person to
compel another to do something or not to do something it is called a contract.
Thus all contracts are agreements but all agreements are not contracts. In order to become a valid contract an
agreement must posses the following essential elements:
a) Offer & Acceptance: There
must be two parties to an agreement i.e. one making the offer & other party
accepting it. Acceptance of must be unconditional & absolute. A part of an
offer cannot be accepted. The terms of an offer must be definite. The
acceptance must be in the mode as prescribed & must be communicated. The
acceptor of an offer must accept it in the same way & same sense & at
the same time as offered by the offeror i.e. there must be consensus ad idem.
b) Intention to create legal relationship: When two
parties enter into a contract their intention must be to create legal
relationship. If there is no such intention between the parties, there is no
contract between them. Agreements of a social or domestic nature to do not
constitute contracts.
c) Lawful consideration: An
agreement to be enforceable by law must be supported by consideration.
“Consideration” means an advantage or benefit which one party receives from
another. It is the essence of bargain. The agreement is legally enforceable
only when both parties give something or get something in return. An agreement
to do something without getting anything in return is not a contract. Contract
must be in cash or kind.
d) Capacity to Contract-Competency: The
parties competent to contract must be capable of contracting i.e. they must be
of the age of majority, they must be of sound mind & they must not be
disqualified from contracting by any law to which they are subject to. An agreement with minors, lunatics,
drunkards, etc. is not contract & does not get a legal title.
e) Free Consent: It is
necessary between the contracting parties to have a free & genuine consent
to an agreement. The consent of parties is said to be free when the contracting
parties are of the same mind on the materials of a contract. They must mean the
same thing at the same time the parties must not enter into a contract under
undue influence, coercion, misrepresentation etc. If these flaws are present in
an agreement it does not become a contract.
f) Lawful object: The
object of an agreement must be lawful. It should not be illegal, immoral or it
should not oppose public policy. If an agreement suffers from a legal flaw with
respect to object it is not enforceable by law & so it is not a contract.
g) Agreement not declared void: For an
agreement to be a contract it is necessary for the agreement must not be
expressly declared void by any law in force in the country.
h) Possibility & Certainty of performance: The terms
of an agreement must not be vague or indefinite. It should be certain. The
agreement must be to do a thing which is possible. For e.g. an agreement to
sell a car for Rs. 100/- if sun does not rise tomorrow. This agreement is
impossible & so not enforceable by law.
Thus,
agreement is the genus of which contract is the specie.
Or
(b) Discuss the various
modes of discharge of a
contract.
Ans: Meaning of Discharge of a
Contract
Discharge of a contract means
termination of the contractual relations between the parties to a contract. A
contract is said to be discharged when the rights and obligations of the
parties under the contract come to an end.
Modes
of discharge of a contract: A Contract is said to be discharged when the
rights and obligations created by it come to an end. A contract may be
discharged in the following modes:-
a)
Discharge
by performance: Discharge by performance takes place when the parties to a
contract fulfill their obligations arising under the contract within the time
and in the manner prescribed. Performance may be actual performance or
attempted performance.
b)
Discharge
by Agreement or Consent: A Contract comes into existence by an agreement
and it may be discharged also by an agreement. The following are modes of
discharge of a contract by an agreement:
a) By Waiver: Waiver takes place when the parties to
a contract agree that they shall no longer be bound by the contract. For e.g. A
an actor promised to make a guest performance in the film made by B. Later B
forbids A from making the guest appearance. B is discharged of his obligation.
b) By Novation: Novation
occurs when a we contract is substituted for an existing contract, either
between the same parties or between different parties, the consideration being
the discharge of old contract, mutually. E.g.: A is indebted to B & C to C.
By mutual agreement B’s debt to C & B’s loan to A are cancelled & C
accepts as his debtor.
c) By Rescission: Rescission
of a contract takes place when all or some of the terms of the contract are
cancelled. It may occur by mutual consent or where one party fails in the
performance of his obligations, the other party may rescind the contract.
d) By alteration:
Alteration of a contract may take place when one or more of the terms of the
contract is/are altered by mutual consent of the parties to the contract.
e) By Remission: Remission
means acceptance of a lesser fulfillment of the promise made, E.g. Acceptance
of a lesser sum than what was contracted for, in discharge of the whole of the
debt.
f) By Merger: Merger takes place when an inferior
right accruing to a party under a contract merges into a superior right
accruing to the same party under the same or some other contract. For e.g. P
holds a property under a lease. He later buys the property. His rights as a
lessee merge into his rights as an owner.
c)
Discharge
by impossibility of performance: If a contract contains an undertaking
to perform impossibility, it is void
ab initio. As per Section 56, impossibility of performance may fall into
either of the following categories –
(i)
Impossibility existing at the time formation of the contract: This is
known as pre-contractual impossibility. The fact of impossibility may be:
a) Known
to the parties: Both the parties are aware or know that the contract is to
perform an impossible act. For e.g. A agrees with B to put life into dead wife
of B, the agreement is void.
b) Unknown
to the parties: Both the parties are unaware of the impossibility. The
contract could be on the ground of mutual mistake of fact. For e.g. contract to
sell his house at Andaman to B. Both the parties are in Mumbai and are unknown
to the fact that the house is actually washed away due to Tsunami.
(ii) Impossibility
arising subsequent to the formation of the contract: Where impossibility of
performance of the contract is caused by circumstances beyond the control of
the parties, the parties are discharged from further performance of the
obligation arising under the contract.
d)
Discharge
by lapse of time: The
Limitation Act, 1963 lays down certain specified periods within which different
contracts are to be performed and be enforceable. If a party to a contract does
not perform, action can be taken only within the time specified by the Act.
Failing which the contract is terminated by lapse of time. For e.g. A sold a
gold chain to B on credit without any period of credit, the payment must be
made or the suit to recover it, must be instituted within three years from the
date of delivery of the instrument.
e)
Discharge
by Operation of Law: A contract may be discharged independently of
the wished of the parties i.e. by operation of law. This includes discharge:
a) By death: In contract involving personal skill
or ability, the contract is terminated on the death of the promisor. In other
contracts the rights and liabilities of a deceased person pass on to the legal
representatives of the deceased person.
b) By insolvency: When a
person is declared insolvent, he is discharged from all liabilities incurred
prior to such declaration.
c) By unauthorized material alteration of the
terms of a written agreement: Any material alteration made by a party to
the contract, without the prior permission of the other party, the innocent
party is discharged.
d) By rights and liabilities becoming vested in
the same person: When the rights and liabilities under a
contract vests in the same person.
f)
Discharge
by Breach of Contract: A breach of contract occurs when a party
thereto without lawful excuse does not fulfill his contractual obligation or by
his own act makes it impossible that he should perform his obligation under it.
A breach to a contract occurs in two ways:-
c) Actual Breach: When a
party fails, or neglects or refuses or does not attempt to perform his
obligation at the time fixed for performance, it results in actual breach of
contract. For e.g. A promises to deliver 100 packs of ice-cream to B on his
wedding day. A does not deliver the packs on that day. A has committed actual
breach of the contract.
d) Anticipatory Breach:
Anticipatory Breach is a breach before the time of the performance of the
contract has arrived. This may take place either by the promisor doing an act
which makes the performance of his promise impossible or by the promisor, in
way showing his intention not to perform it.
4. (a) Explain the
essential elements of the Sale of Goods Act, 1930.
Ans: Contract of Sale and Its essentials
According to Section 4 of the Sale of Goods
Act, 1930, ‘A contract of sale of goods is a contract whereby the seller
transfers or agrees to transfer the property in the goods to the buyer for a
price.’
The term ‘Contract of sale’ is a generic term
and includes both a sale and an agreement to sell. Where under a contract of
sale, the property in the goods is transferred from the seller to the buyer
(i.e. at once), the contract is called a ‘sale’ but where the transfer of the
property in the goods is to take place at a further time or subject to some
condition thereafter to be fulfilled, the contract is called an ‘agreement of
sell’. [Section 4(3)].
An agreement to sell becomes a sale when the
time elapses or the condition, subject to which the property in the goods is to
be transferred, is fulfilled. [Section 4(4)].
The
essentials of a contract of sale are:-
1. Numbers of parties: Since a contract of
sale involves a change of ownership, it follows that the buyer and the seller
must be different persons. A sale is a bilateral contract. A man cannot buy
from or sell goods to himself. To this rule there is one exception provided for
in section 4(1) of the Sale of Goods Act. A part-owner can sell goods to
another part-owner. Therefore a partner may sell goods to his firm and the firm
may sell goods to a partner.
2. Goods: The subject-matter
of the contract of sale must be ‘goods’. According to Section 2(7) “goods means
every kind of movable property other than actionable claims and money; and
includes stock and shares, growing crops, grass, and things attached to or forming
part of the land which are agreed to be severed before sale or under the
contract of sale.” Goodwill, trade marks, copyrights, patents right, water,
gas, electricity,, decree of a court of law, are all regarded as goods. In the
case of land the grass which forms part of land have to be separated from the
land. Thus where trees sold so that they could be cut out and separated from
the land and then taken away by the buyer, it was held that there was a
contract for sale of movable property or goods (Kursell vs Timber Operators
& Contractors Ltd.). But contracts for sale of things ‘forming part of the
land itself’ are not contracts for sale of goods.
3. Price: The consideration for a contract of
sale is price. Price means money consideration. If it is anything other than
money, it will not be sale. But if the exchange is made partly for goods and
partly for price, it will still amount to sale. However, the price may be paid
or promises to be paid.
4. Transfer of
property: 'Property' here means ownership. Transfer of property in the
goods is another essential of a contract of sale of goods. A mere transfer of
possession of the goods cannot be termed as sale. To constitute a contract of
sale the seller must either transfer or agree to transfer the property in the
goods to the buyer. Further, the term 'property', as used in the Sale of Goods
Act, means 'general property' in goods as distinguished from 'special property'
[Sec. 2(11)]. If P who owns certain goods, pledges them to R, he has general
property in the goods, whereas R (the Pawnee) has special property or interest
in the goods to the extent of the amount of advance he has made to the pawnor.
Similarly, in the case of bailment of goods for the purpose of repair, the
bailee has special interest in goods bailed to the extent of his labour
charges.
5. No formalities to
be observed (Sec. 5): The sale of Goods Act does not prescribe any
particular form to constitute a valid contract of sale. A contract of sale of
goods can be made by mere offer and acceptance. The offer may be made either by
the seller or the buyer and the same must be accepted by the other. Neither
payment nor delivery is necessary at the time of making the contract of sale.
Further, such a contract may be made either orally or in writing or partly
orally and partly in writing or may be even implied from the conduct of the
parties. Where articles are exhibited for sale and a customer picks up one and
the sales assistant packs the same for him, there has resulted a contract of
sale of goods by the conduct of the parties.
6. Includes both a ‘sale’ and
‘an agreement to sell’: The term ‘contract of sale’ is a generic term and
includes both a ‘sale’ and an ‘agreement to sell’.
Sale: Where
under a contract of sale, the property in the goods is immediately transferred
at the time of making the contract from the seller to the buyer, the contract
is called a 'sale' [Sec. 4(3)]. It refers to an absolute sale, e.g., an
outright sale on a counter in a shop. There is immediate conveyance of the
ownership and mostly of the subject-matter of the sale as well (delivery may
also be given in future). It is an executed contract.
An agreement to sell: Where under
a contract of sale, the transfer of property in the goods is to take place at a
future time or subject to some condition thereafter to be fulfilled, the
contract is called 'an agreement to sell' [Sec. 4(3)]. It is an executory
contract and refers to a conditional sale.
7. Other essential elements: A
contract for the sale of goods must satisfy all the essential elements
necessary for the formation of a valid contract, e.g., the parties must be
component to contract, there must be free consent, there must be consideration,
the object must be lawful etc.
Or
(b) Describe the rights
of an unpaid seller under the Sale of Goods Act, 1930.
Ans: Unpaid Seller and His Rights
Section 45 define an unpaid seller as “One who
has not been paid or tendered the whole of the price or one who receives a bill
of exchange or other negotiable instrument as conditional payment and the
condition on which it was received has not been fulfilled by reason of
dishonour of the instrument or otherwise.”
The following conditions must be fulfilled before a seller can be
deemed to be an unpaid seller –
(i) He must be unpaid and the price must be
due.
(ii) He must have an immediate right of action
for the price.
(iii) A bill of exchange or other negotiable
instrument was received but the same has been dishonoured.
The rights of an unpaid seller can be broadly divided under 2 main
headings –
I] Rights against the goods and
II] Rights against the buyer
I]
Rights against the goods:
A] Where
the property in the goods has passed to the buyer: Where
the ownership in the goods has already been transferred to the buyer the
following rights are available to an unpaid seller –
1. Right
of Lien: The right of lien means the right to retain the possession of
goods until the full price is paid or tendered.
When can lien be exercised:
(a) Where the goods have been sold
without any stipulation as to credit.
(b) Where the goods have been sold on
credit, but the term of credit has expired, and
(c) Where the buyer becomes insolvent.
The right can be exercised even if the seller
holds the goods as an agent or bailee. Where part delivery of goods has been
made, it can be exercised on the remaining goods, unless circumstances show he
has waived his right.
Termination of lien: The right gets terminated
under following circumstances:
(a) When the goods are delivered to a carrier
or bailee but without reserving the right of disposal.
(b) When the possession is acquired by the
buyer or his agent lawfully.
(c) When the right of lien is waived by the
seller.
(d) When the buyer has disposed of the goods
by sale of in any manner with the consent of the seller.
2. Right
of stoppage of goods in transit: The right of stoppage in transit
means the right to stopping the goods while they are in transit, to regain possession
and to retain them until the price is paid. The essential feature of stoppage
in transit is that the goods should be in the possession of someone intervening
between the seller and the buyer. The unpaid seller can exercise the right of
stoppage in transit if:
(a) The seller has parted with the possession
of the goods.
(b) The buyer has not taken possession of
goods.
(c) Buyer has become insolvent.
The unpaid seller may exercise the right to stoppage in transit in
any one of the following 2 ways:
(a) By taking actual possession of the goods,
or
(b) By giving notice of his claim to the
carrier or other bailee in whose possession the goods are.
The right to stoppage in transit is lost under
the following circumstances:
(a) If the buyer or his agent obtains
possession.
(b) If after arrival of the goods at the
appointed destination, the carrier or the bailee acknowledges to the buyer that
he holds the goods on his (buyer’s) behalf.
(c) If the carrier or bailee wrongfully
refuses to deliver the goods to the buyer or his agent.
(d) Where the part delivery of the goods has
been made to the buyer or his agent, the remainder of goods may be stopped in
transit. But if such part delivery has been given in such circumstances as to
show an agreement to give up possession of the whole of the goods the transit
comes to an end at the time of part delivery.
3. Right
of resale: Where the unpaid seller has exercised his right of lien or
resumes possession of the goods by exercising his right of stoppage in transit
upon insolvency of the buyer, he can re-sell the goods under the following
circumstance:
(a) where the goods are of perishable nature.
(b) Where the seller has given notice of his
intention to re-sell the goods and yet the price remains unpaid.
(c) Where the seller expressly reserves a
right of resale if the buyer commits a default in making the payment.
B] Where
the property in the goods has not passed to the buyer: Where
the property in the goods has not passed to the buyer, the unpaid seller can exercise
the right to withholding delivery of the goods. This right is similar to and
co-extensive with the right of lien and stoppage in transit where the property
has passed to the buyer. Other remedies may include the right to claim damages
for the loss suffered, special damages, etc.
II] Rights
of an unpaid seller against the buyer personally
In addition to the unpaid seller’s rights
against the goods, he has rights even against the buyer personally. They are as
follows:
1. Suit
for Price: Generally the seller can sue for the price of the goods only
when the property in the goods has passed to the buyer and the price is not
paid as per the terms of the contract. In cases where the property in the goods
has not passed to the buyer, suit for price generally, cannot be maintained,
unless under the contract, price is payable on a certain date irrespective of
the delivery of passing of the ownership of the goods.
2. Suit
for damages: The unpaid seller can bring an action for damages where the
buyer wrongfully refuses to accept the goods or repudiates the contract.
3. Suit
for interest: In case of breach of contract on the part of the buyer, the
unpaid seller can claim for interest from the date of tender of the goods or
from the date, the price becomes payable along with a suit for price.
5. (a) Discuss in detail
the difference between cheque an bills of
exchange.
11
Ans: Bills of Exchange
A bill of exchange or “draft” is a written
order by the drawer to the drawee to pay money to the payee. It is an
unconditional order issued by a person or business which directs the recipient
to pay a fixed sum of money to a third party at a future date. The future date
may be either fixed or negotiable. A bill of exchange must be in writing and
signed and dated. Bills of exchange are used primarily in international trade,
and are written orders by one person to his bank to pay the bearer a specific
sum on a specific date.
As per Section 5 a “bill of exchange” is “an
instrument in writing containing an unconditional order, signed by the maker,
directing a certain person to pay a certain sum of money only to, or to the
order of, a certain person or to the bearer of the instrument.”
Cheque:
Cheque is a very common form of negotiable
instrument. If you have a savings bank account or current account in a bank,
you can issue a cheque in your own name or in favor of others, thereby
directing the bank to pay the specified amount to the person named in the
cheque. A cheque is an instrument drawn on a specified banker and not expressed
to be payable otherwise than on demand Therefore, a cheque may be regarded as a
bill of exchange; the only difference is that the bank is always the drawee in
case of a cheque.
The maker of a cheque is called the ‘drawer’,
and the person directed to pay is the ‘drawee’. The person named in the
instrument, to whom or to whose order the money is, by the instrument directed,
to be paid, is called the ‘payee’
Difference
between cheque and bills of exchange:
Basis
|
Cheque
|
Bills of Exchange
|
Drawee
|
A cheque is always
drawn on a bank or banker.
|
A bill of exchange can be drawn on any person including a banker.
|
Acceptance
|
A cheque does not
require any acceptance.
|
A bill must be accepted before the Drawee can be made liable upon it.
|
Payment
|
A cheque is payable
immediately on demand without any days of grace.
|
A bill of exchange is normally entitled to three days of grace unless
it is payable on demand.
|
Stamp
|
A cheque does not
require any stamp.
|
A bill of exchange must be stamped.
|
Protection
|
A banker is given
statutory protection with regard to payment of cheques in certain
circumstances.
|
No such protection is available to the Drawee or acceptor of a bill of
exchange.
|
Crossing
|
A cheque may be
crossed.
|
Bill can never be crossed.
|
Presentment
|
If not presented to the banker for payment, it does not
discharge the drawer unless he suffers injury or damages.
|
Drawer is discharged, if bill is not presented for payment to
the acceptor.
|
Noting and Protesting
|
A cheque is not required to be noted or protested for dishonour.
|
A bill of exchange may be noted or protested for dishonour.
|
Or
(b) Discuss in detail
the characteristics of Negotiable instruments.
Ans: Meaning of Negotiable Instruments
Negotiable Instruments are money/cash
equivalents. These can be converted into liquid cash subject to certain
conditions. They play an important role in the economy in settlement of debts
and claims. The transactions involving the Negotiable Instruments in our
country are regulated by law and the framework of the Statute which governs the
transaction of these instruments is known as The Negotiable Instruments Act.
This act was framed in our country in the year 1881 when the British ruled our
country. Prior to 1881 the transactions governing Negotiable Instruments were
regulated under the cover of Indian Contract Act 1872.
The term ‘negotiable’ means
transferable and the word ‘document’ means ‘in writing’. Therefore, negotiable
means a written promise or order to pay money which may be transferred from one
person to another.
Section 13 of the Negotiable Instruments Act,
1881 states, “A negotiable instrument means a promissory note, bill of exchange
or cheque payable either to order or to bearer.” A negotiable instrument may be
made payable to two or more payees jointly, or it may be made payable in the
alternative to one of two, or one or some of several payees.
Essentials
or Characteristics of Negotiable Instruments:
a) Witting and Signature according to the rules: A
Negotiable Instrument must be in writing and signed by the parties according to
the rules relating to (a) promissory notes, (b) Bills of Exchange and (c)
Cheques.
b) Payable by Money: Negotiable Instruments are payable by the
legal tender money of India. The Liabilities of the parties are governed in
terms of such money only.
c) Unconditional Promise: If the instrument is a promissory note, it
must contain an unconditional promise to pay. If the instrument is a bill or
cheque, it must be an unconditional order to pay money.
d) Freely transferable: A negotiable instrument is transferable from
one person to another by delivery or by endorsement and delivery.
e) Acquisition of Property: Any person who possesses a negotiable
instruments, becomes its owner and entitled to the sum of money, mentioned on
the face of the instrument. When it is payable to bearer, the property in its
passes from one holder to another by mere delivery. If it is payable to order,
the property passes by endorsement, i.e. by the signature of its holder on its
back and its delivery.
f) Acquisition of Good Title: The holder in due course, i.e. the transferee
of a negotiable instrument in good faith and for value, acquires a good title
to the instrument even if the title of the transferor is defective. Further his
title will not be affected, by any defect in the title of the transferor.
g) No Need of Giving Notice: There is no need of giving a notice of
transfer of a negotiable instrument to the party liable to pay the money.
h) Right of the Holder in Due Course: The holder in the due course remains
unaffected by certain defenses, which might be available against previous
holders, as for example , fraud, to which he is not a party.
i)
Certain
Presumptions: Unless contrary proved certain presumptions are in the made case
of all negotiable instruments. Consideration, date, signature of holder in due
course, for example, is presumed in the case of all instruments. The
presumptions from Special rules of Evidence under section 118 to 119.
6. (a) Describe National
Commission and its composition. 4+8=12
Ans: The Central Consumer Protection Council: The
Central Government may, by notification, establish with effect from such date
as it may specify in such notification, a council to be known as the Central
Consumer Protection Council (hereinafter referred to as the Central Council).
Membership:
a) The
Minister in charge of consumer affairs in the Central Government, who shall be
its Chairman, and
b) Such
number of other official or non-official members representing such interests as
may be prescribed.
Objects
of the Central Council
The objects of the Central Council
shall be to promote and protect the rights of the consumers such as-
a) The right
to be protected against the marketing of goods [and services] which are
hazardous to life and property;
b) The right
to be informed about the quality, quantity, potency, purity, standard and price
of goods 1[or services, as the case may be], so as to protect
the consumer against unfair trade practices;
c) The right
to be assured, wherever possible, access to a variety of goods and services at
competitive prices;
d) The right
to be heard and to be assured that consumers' interests will receive due
consideration at appropriate forums;
e)
The right to seek redressal against unfair
trade practices 1[or restrictive trade practices] or unscrupulous
exploitation of consumers; and
f) The right
to consumer education.
National Consumer Disputes Redressal Commission: The National
Consumer Disputes Redressal Commission has jurisdiction to entertain complaints
where the value of the goods or services and compensation if any claimed
exceeds Rs.1,00,00,000 (ONE CRORE)
Or
(b) Explain the
procedure of filing a complaint under the Consumer Protection Act,
1986. 12
Ans:
Complaint
In Section 2 (1) (c) "complaint"
means any allegation in writing made by a complainant that:
a) an unfair
trade practice or a restrictive trade practice has been adopted by any trader;
b) the goods
bought by him or agreed to be bought by him suffer from one or more defect;
c) the
services hired or availed of or agreed to be hired or availed of by him suffer
from deficiency in any respect;
d) a trader
has charged for the goods mentioned in the complaint a price in excess of the
price fixed by or under any law for the time being in force or displayed on the
goods or any package containing such goods;
e) goods
which will be hazardous to life and safety when used are being offered for sale
to the public in contravention of the provisions of any law for the time being
in force requiring traders to display information in regard to the contents,
manner and effect of use of such goods.
With a view to obtaining any relief provided by or
under this Act; the essential features of a “Complaint” are:
a) The
complaint must be in writing;
b) The
complaint must be made with a view to obtain any relief under the Act;
c) The
Complaint must make any of the five allegations stated under section 2 (1) (c),
against a trader or manufacturer;
d) The
complaint must be filed in a manner prescribed under law i.e. under section 12
of the Act.
e) The
complaint must be filed before appropriate consumer commission having
jurisdiction to entertain complaint. Section 17 & Section 21.
Ordinarily, the complaint must contain name,
description and address of the Complainant and the purpose for which he bought
the goods. It must also contain the name, description and address of the trader
or manufacturer. It must state clearly, the facts of the case e.g. when the
things was purchase? For what purpose? When the things were consumed or used?
Defects in goods or deficiency in the service etc., what injury suffered etc.
These facts must be supported by all relevant and proper documents. Lastly, the
complaint must mention the relief or relief’s asked for against the trader or
manufacturer i.e. the opposite party.
Procedure for Filing Complaint
The complainant or his authorised
agent can present the complaint in person or send it by post to the appropriate
forum or Commission, as the case may be. No fee is charged for filing a
complaint before the District Forum or the State Commission or the National
Commission.
Important Points
a) Each of
the members and the opposite parties are to be sent a copy of the complaint.
b) The
complaint himself should possess two or more copies of the complaint.
c) If the
complainant desires so he can send a copy to an active voluntary consumer
organisation.
d) A complaint
should always be supported and verified by an affidavit.
The time period within which a complaint must be filed
The District Forum, the State Commission, or
the National Commission shall not admit a complaint unless it is filed within
two years from the date on which the cause of action has arisen. However, where
the complainant satisfies the District Forum/State Commission, that he had
sufficient cause for not filing the complaint within two years, such complaint
may be entertained by it after recording the reasons for condoning the delay.
Decision
Time: The District Forum, State Commission and National Commission are
required to decide complaints, as far as possible, within three months from date
of notice received by the opposite parties. For those complaints which require
laboratory analysis or testing of commodities, the period is extended to five
months.
7. (a) Explain the obligations of exporter of goods and
services under the FEMA,
2000. 11
Or
(b) Write in
short: 6+5=11
(i) Export of goods and services
(ii) Current Account transactions