This article is written by Aditya Shrivastava, marketing executive at iPleaders.

If someone asks me what is the most difficult part of being a law graduate I wouldn’t say cracking CLAT, passing 5 years in a law school, understanding all the laws, mooting, managing good grades, or performing at internships. The most difficult task about graduating as a law student is cracking an interview as a fresher.

Forget cracking an interview, getting an interview scheduled is quite a task in itself. You need to keep your CV updated, make numerous profiles on various job portals, apply at the earliest, make follow up calls and send emails, maybe use references. Basically, do whatever it takes to get an interview call.

During the first semester of my fourth year at law school, I started applying to law firms and companies incessantly without giving much thought to where I was applying. This is a common mistake most of us make.

Despite blindly applying to law firms and companies, I did get a few interview calls. While I was able to do well in some interviews, I performed horribly in most of them. I tried to figure areas where I lacked and tried to make myself better at them. To accomplish the same I took up an online course to enhance my knowledge. Much to my surprise, there was a career mentor who guided me to apply to firms and companies where I would genuinely like to work. He also helped me prepare for interviews which I subsequently cracked.

Owing to the same, I decided to write this article to help innumerable individuals like me succeed through their first set of interviews. Here are few tips that can help you crack any corporate interview:

Apply To The Places You Would Want To Work At

Technology and social media have made everything super accessible. People no longer have to look up the newspapers to zero down a job vacancy. LinkedIn and various Whatsapp Groups now advertise for job openings.

A huge issue with students who are trying to venture and look-out for an off-campus placement is that they are desperate to join anywhere. In my law school circle, it was an inside joke – ‘beggars can’t be choosers’. I wasn’t any exception to this. I was ready to work for a Legal Process Outsourcing (LPO) at the very onset of my career because they were ready to pay me relatively better than another law firm I’d applied to. However, the mentor of my online course guided me not to do so. Eventually, I got a better job later on.

It is extremely important to make an informed choice.

You need to do a proper background of the company or law firm and the profile you are being offered. If it suits your taste, preferences and you are interested in having a career in that field, you may consider it.

Having said that, do not wait for opportunities to come to you. How would you feel if your contemporaries were exploring various opportunities while you were sitting idle? Wouldn’t you rather be pro-active and research about the firms or the companies that you want to apply to? Figure out if they have an opening?

Let me give you an example. A very hardworking friend of mine was interested in pursuing a career in media laws. She applied to various media giants in India, including Star and Viacom 18. Although she was given an opportunity to go down to Bombay for an interview with Viacom, at the very outset she was told that as company policy Viacom doesn’t hire freshers in their legal team. Would she have applied there had she been aware of their policy? Probably no.                                                                                                       

Your Resume Must Be Honest And Customised

You need to understand that for every position you apply, there may be hundreds, or even thousands, of applications pending. A company or a firm would not focus on your achievements. They would look for a candidate who would meet their requirements. They need someone who can do the job themselves, or get the job at hand done. They need people who can produce results. Thus, once you have carefully gone through the job description, mould your resume to cover what they require.

Do not be dishonest on your resume.

You might ask, how do I mould my resume to their liking if I have done nothing which they require?

That’s a very valid question, but what you think might not be true. You might have done your internships having some perspective in place, right? You may have explored specific areas of law purposely through your internships, research papers, college activities, online courses etc. So, apply to law firms that cater to your interests. You need to ensure that you are in alignment with the requirement of the job.

Let me give you an example. If you’re applying to an FMCG company and you have previously worked on competition law at one of your internships, you may want to highlight this. Why? FMCG companies deal with a myriad laws – trademark, advertisement, competition, labour, etc. Domain knowledge is what will set you apart from the rest of the applicants and it is important to show that on your resume.

However, if you are someone like me who has done a plethora of internships to explore which are of law you may be interested in, you need to extract the relevant work from your internships or college experiences and highlight it on your resume.

For example, during my internships, I worked on contract drafting, labour laws, commercial arbitration, media laws, merger and acquisitions, real estate, finance, banking and airport regulations. Along with my internships, I took up an online course on Entrepreneurship and Business Administration, which helped me gain a lot of knowledge on business laws.

Now, if I have to apply for a job at a real estate firm, firstly I would change the objective of my resume from “aspiring to become a corporate lawyer” to “aspiring to become a legal expert in real estate laws.” This is presuming, you have an objective section in your resume. Secondly, I would mention my experience at the internship where I worked for the real estate team in a law firm, research papers I have written on 7/11 extracts and give the HR a glance of what I learnt through the diploma course.

This would give the firm an idea that I have prerequisite knowledge of real estate thereby increasing my chances of getting an interview call. However, if I try to fake it and mention things I have never done chances are that I may be caught and my credibility may be under question.

Make sure you mention what is required in alignment with the organisations needs and be absolutely honest in your resume.

Run The Interview

Yes, you read that right. This was a trick I learnt from my mentor while I was taking an interview training during my online course. What I am going to tell you is a secret not many would like you to know.

It is not the interviewer but it is you who decides the course of interview. I have tried it and succeeded at it. Hence, I feel you should be able to take advantage of this too. You can actually take the interview in the direction you want to. Here is how.

“Tell me about yourself.” This is the very first question asked at any interview. This is your golden chance and you need to make the best of it. Start with a general introduction and move to your technical knowledge giving him an idea of what you know the best.

Have you ever been in a situation, where you and your friend are talking about something and suddenly your friend takes it as a challenge to prove that he knows more about you? Interviewers are like those friends. Every time you tell them you know something, they want to test how much you know it.

For example, I am not a big fan of Intellectual Property Law (IPR). Now, if they start questioning me about various aspects of IPR, I might fail miserably.

However, every time I am questioned about my area of interests, I start by saying, “Real estate law and airport regulations and arbitration are areas which interest me the most (boldly and confidently.)” This creates a curiosity in them, “How could this man be so confident that he knows everything? Look at that confidence, let me try to break it a little.” This curiosity prompts them to forget what they had to ask, and they start questioning what I would want them to ask.

Of course, if you know something too well, you are bound to perform well. Moreover, as most of the interviewers run on a strict time schedule, they get so involved in asking what you want that by the time they come down to the questions they wanted to know about, you may have already impressed them and they will take you without knowing your weaknesses.

If you don’t believe me, try it with the smartest friend you know. Sit and start talking about any series/movie you and he/she both love. If you have got the trick right, he/she will be tempted to question you on things you know and you will be easily able to outsmart them.

But, be aware of the HRs that play this very game with you. There are many of them and you might not succeed every time you do this. Be prepared with your resume thoroughly. Don’t faff. Be confident about yourself and the work that you’ve done – the interviewer will not be able to break you.

Know The Laws

Despite having taught you the trick, there are certain laws you must know about if you are going for an interview for a corporate legal profile. Thankfully, I had the required guidance from this amazing course, that I did not have to look up for them to read it, however, I will try to give you a comprehensive list. You can look up for them and read them as much as possible :

1. Arbitration Law – The 2015 Amendment Act, has caught quite a stir and recruiters often try to figure out how updated you are. You can read more about the amendments here.
2. Basics of Contracts and various clauses in a standard agreement – You can learn about the various types of contracts that you need to know about here. Read out the primer for drafting a contract here. Learn about standard form of contracts here.
3. Company Law – It is quite exhaustive, however, you must divide your reading into six categories. I will try to link relevant articles for all of them :
   • General Corp
   • Directors and KMPs Liability
   • Compliances
   • Incorporation
   • Corporate Restructuring
   • Winding up
4. Competition Law – Vertical and Horizontal Agreements, Cartels, Abuse of Dominant Position, Entry Barriers are some of the topics that you must be thorough with.
5. Finance Laws – Important regulations of SEBI, RBI guidelines, FEMA and FDI related laws
6. Labour Laws related to compliance – You can read more about these compliances here.
7. Property Laws
8. Taxation – All thanks to GST you need to know more about it so that you are ready for any question that is put across about it.

I hope these articles are useful to you!  It is important to know that cracking an interview may be tough, however, if you are well prepared and confident it can be quite easy.

All the luck!

This article is written by Mohona Thakur, Marketing Manager at iPleaders.

The recent move by the Kerala Govt. mandating a stipend of INR 5,000 for the junior advocates with less than three years of practice and an annual income lesser than 1 lakh, makes us wonder; Is surviving in the world of litigation really that financially stressful? Is litigation worth the struggle in the long run?

I would be honest with you, I was a practising lawyer at the Supreme Court of India prior to joining iPleaders. It is a stressful job. Litigation is not financially rewarding in the initial years for the majority, and a lot of lawyers are exhausted by the long working hours or days. However, on the flip side, it teaches you more than you might have bargained for. You learn how the courts function, how to handle the office clerks – always keep them in your good books, there’s no two-way about it – how to manage multiple cases in multiple courts simultaneously, how to analyse the judges and present your case to their liking and, not to mention, you learn the art of dealing with stress.

Your approach towards dealing with the cases is directly proportional to the amount of experience you gain. It’s definitely a learning experience. However, would you opt for litigation immediately after you have graduated? What is it that is in for you in terms of financial stability in the long run? I did a quick survey of the best paymasters in the litigation world of Delhi.

Most law students that opt for litigation are paid anywhere between INR 10,000 to INR 25,000 per month in the first couple of years. There are some famous lawyers, like Harish Salve, who do not believe in paying entry level juniors at all and expect them to work for free. However, if young lawyers stick to the profession there are chances that they may earn ten times their current salary in the next four years. We, at iPleaders, have prepared an exhaustive list of litigation law firms and Senior Advocates of the Supreme Court that pay you handsomely.

Here is a list of three law firms that you can opt for immediately after you have graduated if you want to pursue a career in litigation. These law firms recruit a large number of lawyers each year including many freshers.

Karanjawala & Company, New-Delhi

Established in the year 1983, this is probably the most prominent firm in the litigation circles not only in Delhi but across India. Both Raian Karanjawala – the Managing Partner – and his wife, Manik Karanjawala head the litigation practice of the firm.

It is an Advocate-on-Record (AoR) firm, with three Advocates on Record as partners – Manik Karanjawala, Nandini Gore and Ruby Singh Ahuja. As an AoR firm they can file cases in the Supreme Court of India. This gives their employees access to attend Senior Counsel briefings and appear in the Supreme Court.

As per sources, in 2017 Karanjawala & Co. paid INR 45,000 to its freshers.

You may find out more about the firm here.

Parekh & Co., New-Delhi

Established in the year 1975 by P.H. Parekh, this is the most reputed Advocate-on-Record firm in India. The litigation practice of the firm is overlooked by the Managing Partner – Sameer Parekh, whereas the arbitration practice is headed by Sonali Basu Parekh.

The firm has two Advocates on Record – Sameer Parekh and Sonali Basu Parekh. While a majority of their work is specific to the Supreme Court, they represent major giants such as Hindustan Unilever, Larsen and Toubro, ICICI Bank and Bluedart at the High Court and various other tribunals.

As per sources, in 2017 Parekh & Co., paid INR 22,000 as joining salary to its freshers. It is important to note that the salary does not remain constant throughout the year. It increases every three to six months. A freshers salary by the end of the first year is likely to be double their joining salary.

You may find out more about the firm here.

Agarwal Law Associates, New-Delhi

With approximately four hundred Supreme Court filings in 2017, Agarwal Law Associates (ALA) has been performing phenomenally in the past couple of years. The Supreme Court filings of the firm take place through the firms’ partner – E.C. Agrawala. The litigation practice of the firm is overlooked by Mr. Mahesh Agarwal, the Managing Partner.

The firm boasts of some of the major giants such as the Essar Group, ADA Reliance Group, GMR and Tata Teleservices amongst others.

The salary paid by the firm to freshers is approximately INR 40,000. You can visit their website for more information here.

One thing common to these firms is that their clients are corporate giants. This means that if you want to be hired by these firms, it is utmost important for you to pull up your socks and know the laws that are the most relevant in the corporate sector.

While there are litigation firms that are easier to work with immediately after you have graduated since they are big on hiring freshers, there are a number of senior counsels who hire experienced lawyers as their juniors to assist them on a daily basis in the Supreme Court as well as the High Court. Here is a list of Senior Advocates who are willing to pay you for all the hard work that you put in:

Mr. Salman Khurshid, Senior Advocate

Salman Khurshid is a well-known name in litigation. Not only is he a politician but also an eminent author and law teacher. As per sources, he pays freshers approximately INR 70,000 per month which can go up to INR 90,000 per month within the very first year.

Dr. Rajeev Dhavan, Senior Advocate

Dr. Dhavan has had an illustrious career as an advocate. He had represented the Babri Masjid Action Committee before the Allahabad High Court over the title of the land on which the mosque stood before being destroyed by a mob in 1992.

Dr. Dhavan, as per sources, is known to pay INR 60,000 per month to his juniors. In addition to the monthly salary, his juniors are entitled to INR 5,000 to INR 15,000 per hearing for matters in Delhi and INR 10,000 per appearance for out-station matters.

Dr. Abhishek Manu Singhvi, Senior Advocate

Dr. Singhvi is known to appear for major corporate giants. You may often see his juniors running from one end of the Supreme Court to the other. Dr. Singhvi majorly deals with cases pertaining to investment and banking sector, making him an obvious choice amongst companies for matters before the Supreme Court.

As per sources, Dr. Singhvi hires experienced lawyers. He is known to pay anywhere between INR 70,000 to INR 1,40,000 per month to his juniors.

Mr. Kapil Sibal, Senior Advocate

Having formerly been the Minister of Education in India, Mr. Kapil Sibal is a name known to all. Mr. Sibal regularly appears in the Supreme Court for various high profile matters along with his battalion of juniors.

Most of his juniors have over five years of work experience and are paid approximately INR 2,00,000 per month and INR 20,000 per case.

While litigation, in the long run, may seem very lucrative as an option, it is important to understand the requirements that Senior Advocates and law firms alike have from freshers as well as practising advocates. Every year, thousands of law graduates choose litigation as their career option and then digress. For law students and lawyers to survive this grind and make it big, you require a lot of patience and need to acquire knowledge.

Not every law student who may have applied for the job at Karanjawala or at Mr. Khurshid’s may have gotten it. They must have received hundreds of applications from which they would have had to choose. To make it to these places you need to be cut out for the work and gain practical knowledge.

While practising lawyers accumulate immense knowledge and experience over the years when they tend to shift from one chamber to another or from one senior to another, what matters what they bring to the table. There are a number of advocates that learn the tricks of the court, which is a valuable skill in itself, however, they don’t know the law. If you have to perform better than them, it’s simple, gain hands-on knowledge of the law.

When you work with a Senior Advocate of the Supreme Court of India, you are required to research on various points of law and prepare briefing notes for the senior, apart from assisting them in court.

Supreme Court practice requires you to know a vast number of laws. From my experience, you must be thorough with business laws as clientele of the law firms and Senior Advocates of the Supreme Court are companies. In addition to business laws, you must have sufficient knowledge about banking and investment, debt recovery, real estate and last but not the least, criminal litigation.

How do you set yourself apart in order to ensure that you have better chances of being hired? How do you gain knowledge? Is the only way to learn through the grind?

Let’s say you are practising on the civil side, how do you expect to gain insights of criminal litigation? Would you like to learn through online courses that have practical insights from industry experts? I researched and found a number of online courses by NUJS Kolkata that will be extremely helpful to build your career in litigation:

• Diploma in Entrepreneurship Administration and Business Laws. You can find the course here.
• Advanced Certificate Course on Companies Act, 2013. You can find the course here.
• Certificate Course in Criminal Law, Litigation and Trial Advocacy. You can find the course here.
• Certificate Course in Real Estate Laws. You can find the course here.

I wish these courses help you flourish in your litigation career. Here is hoping that you walk that extra mile and learn the law on the go. Good luck!

In this article, Sneha Chawla pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata discusses whether a company can issue debentures carrying voting rights or not.

INTRODUCTION

Companies usually have to borrow large sums of money. The loan requirements of the company might not be met by a single tender, therefore a loan, in certain situations can be split into several units. One of the most convenient methods of doing so is by borrowing the issue of debentures.[1] These are one of the ways where the company borrows money and then agrees to repay the debt where there might be a charge on the company’s assets for ensuring the repayment of the company’s debt. Debentures are basically substitutes for investments in a company that is usually more secure than investment in shares as the company would have to pay interest as it will be paid before the dividend payment.

What is Debenture?

As per Companies Act, 2013, under section 2(30) defined “Debentures” which includes debenture stocks, bonds and other instruments of a company regarding debts whether they constitute a charge over the company’s assets or not.

According to Topham:”Debentures are basically documents that are given by a company as evidence of a debt to the holder that is arising out of loans and that are secured by charges.”[2]

Debentures are written promises for a debt by a company under its seal consisting of the terms and conditions regarding the amount of loan or principal, the rate of interest, maturity date, maturity value etc. Basically, debentures are considered to be a certification of acknowledgement issued with the seal of the company in favor of lender as an evidence of debt.[3] Therefore this written document grants the holder the right to receive interest and return of principal as per the terms under which debentures are issued.[4]

How are Debentures beneficial?

Debentures have no collateral. Bond buyers usually purchase the debentures based on the belief that the bond issuer would likely default on the repayment. Debentures are considered to be the most common form of long-term loans as they can be taken out by a corporation. These loans have to be repaid at a fixed rate of interest at a specific date.[5] A company generally makes these payments prior paying out dividends to the shareholders, like most debt instruments. In reference to other kinds of loans and debt instruments, debentures are advantageous as they carry a lower rate of interest and have a longer period of time to make the payments.[6]

Some of the features of Debentures

• Debentures are like shares, it is basically an investment in a company.
• Debentures are part of the total capital of the company where the debenture-holders are the creditors.
• Debenture-holders have entitled the right to receive interest on their fund invested in debenture. Generally, the rate of interest is predetermined and stated in the bond certificate. Thus, the interest is payable whether there is profit or loss.
• Debentures are primary in order to pay interest expenses by a fixed rate.
• Debentures are monumental to meet the requirement of long-term capital budgeting, as they help in maximizing earning per share.
• Debentures are usually freely transferable by the debenture holder.
• In a company’s general meetings of shareholders, debenture holders have no voting rights as they may have separate meetings or votes.
• Debentures reduce the burden of income tax, as the interest is charged against profit and loss account.
• Debentures consistently provide the way, to use leverage in the capital structure of the company.
• Further, debentures provide for payments of a specific principal sum at a specific date. But that is not important as a company may issue perpetual debentures with no undertaking to pay.

Kinds of Debentures

Generally, debentures are classified into different categories:

Debentures on the basis of Redemption

• Redeemable Debentures

Debentures are usually redeemable. This basically means the company has to pay back the debenture-holders in order to have the properties released from the mortgage or charge on the expiration of the terms of the loan. Therefore this is called redemption of debentures. Redeemed debentures can often be re-issued. If there is no provision to the in the articles, or conditions of the issue or any resolution that shows any motive to cancel the redeemed debentures, then the company shall have the power to keep the debentures active for its re-issue. Thus, the company has to re-issue the same debentures or other debentures in their place.

• Irredeemable Debentures

The debentures, that cannot be paid during the life existence of the company, are called as irredeemable debentures. As the company has no obligation to make the payment of the principal of these debentures during its lifetime. So, therefore it is also termed as perpetual debentures. The company might repay the money at the time of liquidation or on the happening of a contingency or on the expiration of a longer period or if the company breaches the terms of the issue of the debentures.

Debentures on the basis of Conversion

• Convertible Debentures

[S.71(1)] At the time of redemption, the company might issue debentures in order to convert them into shares completely or partially. Debentures with such option can be issued with the approval of a special resolution passed at a general meeting.

• Non Convertible Debentures

Non-convertible debentures are basically regular debentures that can’t be converted into equity for the issuing corporation. In order to compensate it, the investors are remunerated with a high rate of interest in comparison to convertible debentures.

On the other hand in case of non-convertible debentures, the date of maturity is essential as this date domineers as to when the issuing company has to pay back the debenture holders.

• Partly Convertible Debentures

The holders in partly convertible debentures are given an option to convert part of their debentures, after which they shall enjoy the benefit of both debenture holders as well as equity shareholders.

• Fully Convertible Debentures

These are Fully convertible debentures into Equity shares at the issuer’s notice. Issuer will decide the ratio of conversion.

Debentures on the basis of Registration

• Registered Debentures

Registered debentures are debentures that are payable to the registered debenture holders, and they aren’t transferable only through delivery. The names of the holders of these debentures with details of the number, value, and type of debenture held are registered in the records of debenture holders. Registered debentures are not negotiable instruments. Transfer of such debentures requires registration.

• Unregistered Debentures

Unregistered Debentures may refer to those debentures which are not recorded in the company’s register book. Such type of debentures are known as bearer debentures and these can be easily transferred to any other person.

Debentures on the basis of security

• Secured Debentures

These are the debentures where the assets of the company are secured by a charge over them. They are known a mortgage debentures. The debenture-holders of secured debentures have the provision recover the principal amount with the unpaid amount of interest on these debentures from the assets mortgaged by the company.

• Unsecured Debentures

The debentures, that aren’t fully secured by a charge upon the assets of the company are known as unsecured debentures. They are also referred to as Naked Debentures. They are not mortgaged. The debenture holders are treated as only unsecured creditors. The Issue of such debentures are not much popular.

Other Debentures

• Perpetual Debentures

A debenture that does not consist of any particular clause regarding any payment or that consists of a clause stating it shall not be paid back is known as perpetual debenture.

• Mortgage Debenture

These type of debentures are issued by mortgaging an asset and debenture holders can recover their dues by selling a particular asset in case the company fails to repay the claim of debenture holders.

• Fixed Debentures

A note that carries a fixed charge against the issuer’s property or assets for repayment, there charge shall remain in the company’s records until the debenture is repaid. Corporations can issue fixed debentures to finance operations in the same way they issue stock. Fixed debentures can be issued singly or in a series. They pay out a fixed rate of interest at regular intervals.

Issue of Debentures

Debentures are generally issued for cash at a particular discount or at a premium. Entries are usually similar to that of issue of shares like any premium or discount when shares are issued then the amounts are payable in installments. When the debentures are being issued the premium amount payable on redemption can be adjusted.

Debentures could be issued in the form of overdrafts from banks and as collateral securities against loans or from other institutions. Collateral Security is also referred to as additional or parallel security.

PROCEDURE TO ISSUE DEBENTURES UNDER THE COMPANIES ACT, 2013 [7]

[Applicable Provisions: Section 56, 72, of the Companies Act, 2013 read with Rule 18 and 19 of the Companies (Share Capital and Debentures) Rules, 2014]

• Call and hold the Board meeting and decide which types of the debenture will be issued by the Company.
• If the Company decides to issue secured debenture the company has to comply with the condition prescribed in the Rule 18 of the Companies (Share Capital & Debentures) Rules, 2014.
• In case appointment of Debenture Trustee, consent shall be obtained from a SEBI registered Debenture Trustee, who is proposed to be appointed. If debentures to be issued are Secured Debentures, a Debenture Trust Deed in Form No. SH – 12 or as near thereto as possible shall be executed by the Company in favour of Debenture Trustees within sixty days of allotment of Debentures.
• In the Board meeting pass resolutions for
  • i) Approval of Offer letter for private placement in Form No. PAS – 4 and Application Forms (In case of private placement of debentures);
  • ii) Approval of Form No. PAS – 5 (In case of private placement of debentures);
  • iii) Approval of Debenture Trustee Agreement and appointment of a Debenture Trustee (In case of Secured Debentures only);
  • iv) Appointment of an expert for valuation (In case of private placement of debentures);
  • v) Approval of increase of borrowing powers, if required;
  • vi) To authorize for creation of charge on the assets of the company;
  • vii) Approve the Debenture Subscription Agreement;
  • viii) To fix day, date and time for the extraordinary general meeting of shareholders.
• Prepare the draft of
  • i) Debenture Subscription Agreement;
  • ii) Offer Letter for private placement in Form No. PAS – 4 and Application Forms;
  • iii) Records of a private placement offer in Form No. PAS – 5;
  • iv) Debenture Trustee Agreement;
  • v) Mortgage Agreement for the creation of charge on assets of the company.
• Issue notices of extraordinary general meeting along with the explanatory statement.
• Hold an extraordinary general meeting and pass the special resolution to issue convertible secured debentures and increase borrowing powers of the company and to authorize the Board to create the charge on the assets of the company.
• File Form No. PAS – 4 and PAS – 5 in Form No. GNL – 2 with the Registrar of Companies.
• File Offer Letter in Form No. MGT – 14 with the Registrar of the Companies.
• File copy of Board resolutions, Special Resolution, Debenture Subscription Agreement, Debenture Trustee Agreement etc in Form No. MGT – 14 with the Registrar of Companies.
• File Form No. PAS – 3 (Return of allotment) with the Registrar of Companies after making allotment of debentures.
• File Form No CHG – 9 for the creation of charge on assets of the Company.

Can a Company issue debentures carrying voting rights?

Under Section 71 (2) of the Companies Act, 2013 it has been stated that no company can issue debentures which can carry any voting rights. According to rule (1) of Companies (Share Capital and Debentures) Rules, 2014, it has been stated that the company cannot issue secured debentures unless following conditions are fulfilled. The rate of redemption cannot exceed 10 years from the date of issue. The company which has been engaged in setting up of infrastructure projects can issue security debentures crossing 10 years but cannot exceed 30 years. The issue of debentures should be secured by the creation of a charged. The security of debentures by the way of charge should be treated in the favour of debenture trustee.

The debentures can be issued by the company under the meeting of the board of directors under the provisions of Section 179 (3) of the Companies Act, 2013. The provisions of Section 71 of the Companies Act, 2013 are related to the issuance of debentures along with the penalties.

Voting Rights

Section 47 of the Act provides that every member of a company limited by shares and holding equity share capital therein, shall have a right to vote on every resolution placed before the company; and his voting right on a poll shall be in proportion to his share in the paid-up equity share capital of the company.

In case of the member of a company limited by shares and holding preference share capital, shall have a right to vote only on:

• resolutions placed before the company which directly affect the rights attached to his preference shares and, 12 Share Capital and Debentures,
• any resolution for the winding up of the company, or
• for the repayment or reduction of its share capital.

Voting right of the holder of share capital shall be in proportion to his share in the paid-up share capital of the company. The proportion of the voting rights of equity shareholders to the voting rights of the preference shareholders shall be in the same proportion as of the paid-up capital in respect of the equity shares bears to the paid-up capital in respect of the preference shares. Preference shareholders are entitled to vote on every resolution placed before the company at any meeting if the dividend due on such class of preference shares are in arrears for a period of two years or more.[8]

DEBENTURE WITH VOTING RIGHTS [S.71(2)]

The sub-section provides that no company is to issue any debentures carrying any voting rights.

What is Debenture Trust Deed?

The provision of Debenture Trust Deed is given under section 71(5-10) of the Act. The company has to appoint one or more debenture trustees where the prospectus is issued for the issue of debentures or where members of public or company’s own members exceeding 500 are invited to apply for the issue.

In other cases;

• It is for the debenture holders themselves to appoint their trustee.
• Where the debenture-holders do not have the time to look after their interest in the properties mortgaged or charged to them, they may appoint some of themselves as trustees for the supervision of their common interest.
• When a trust deed is made some of them are appointed as trustees.
• Properties of the company are usually mortgaged to the trustee in favour of the debenture-holders.
• They are bound to act with the same degree of honesty, care and diligence as is required of all trustees.

Appointment of Debenture trustees [Section 71(5)]

Appointment of debenture trustees has to be made before making a debenture issue and the fact of the appointment and their consent to act as such has to be mentioned on the face of the prospectus or letters of offer.

Persons not qualified

1. A beneficial holder of shares in the company;
2. Persons who are entitled to the money that is required to be paid by the company to the debenture trustee ;
3. A person who has entered into a guarantee in respect of principal debts secured by debentures or interest thereon.

Duties

To make sure that the assets of the company that is issuing debentures and of the guarantors is satisfactory in order to discharge the principal amount at all time;

1. To make sure that the prospectus or the offer letter does not consist of anything that is erratic to the terms of the debentures or debenture trust deed;
2. To make sure that there is no breach of the covenants and provisions of the debenture trust deed on part of the company;
3. To take reasonable steps against any breach of the covenants or terms of issue.[9]

Who are the Debenture Holders?

The persons, firms or companies who purchase the debentures of the other company are the Debenture Holders.

Register of Debenture Holders

• According to the Companies Act, 2013, section 88(1)(b) requires every company to keep a register of debenture holders.
• An index of the names shall be included in the register.
• There shall be prescribed particulars in the register and also shall be prescribed by the Government. Thereafter, Government shall prescribe separate register for each type of debentures.
• The Company can close the register after giving at least 7 days previous notice by advertising for a period not exceeding 45 days in a year but not exceeding 30 days at a time.
• It can be opened for inspection as per the section 94(2) by the members and debenture holders, other security holder or beneficial owner during the business hours without the payment of any fees and by any other person on payment of nominal charges.

Remedies open to Debenture Holders

• The remedies of basically depend upon the terms of their agreement with the company. A debenture-holder who wants get his money back in order to realise his security may exercise remedies given by the debenture trust deed or resort to legal proceedings to enforce his rights.[10]
• If money due on a debenture is payable on demand the debtor company is entitled, once demand is made, to the reasonable time to implement the mechanics of payment, but it is not entitled to any time to raise the money if it was not at hand. A demand under debenture need not specify the amount due.[11]
• It is not necessary to allow time to the borrowing company to enable it to engage in a commercial transaction for the purpose of raising funds for the redemption of debentures.[12]
• But one of the remedies which are always open to them as mortgagees under the Transfer of Property Act is to bring the property charged to sale.[13]

Why are Debentures advantageous for the Company?

Debentures provide the greatest security to the investors. They make a very good appeal to the conservative minds. The reasons are:

• Interests on debentures are usually tax deductible expenditures and this saves income tax.
• Generally, the cost of debentures are lower than that of preference and equity shares.
• Debentures guarantee a fixed rate of interest.
• Their prices are more stable as compared to shares because the changing monetary conditions affect the price movement of the debentures very little.
• As equity shareholders do not have any right or provision to vote or take part in the management of the company, the issue of debentures shall not result in the dilution of interests of the shareholders.
• An Issue of debentures is advantageous during times of inflation.
• Debenture holders should generally avoid bearing risks as interest on debentures is payable even at loss.
• The companies can raise money through debentures easily compared to equity and preference shares.
• The investors get fixed and regular interest, whether the company earns profit or not.

References

[1]A company may issue debentures convertible into shares either fully (FCDs) or partly (PCDs). For rules and regulations to be observed in this connection, see, Section F of SEBI Guidelines for Disclosure and Investor Protection on the issue of convertible and non-convertible debentures.

[2] TOPHAM’S COMPANY LAW(12th Edn) 168. See also, a speech of Viscount MAUGHAM in Knightsbridge Estates Ltd v Byrne, 1940 AC 613 : (1940) 2 All ER 401: 109 LJ Ch 200: 162 LT 388: 56 TLR 652(HL), where all the important definitions have been considered. See also, VYAS J in Madanlal Fakirchand Dudhediya v Changdeo Sugar Mills Ltd, AIR 1958 Bom 491, 496: (1958) 60 Bom LR 254.

[3]https://accountlearning.blogspot.in/2011/04/meaning-and-concept-of-debentures.html

[4]https://accountlearning.blogspot.in/2011/04/meaning-and-concept-of-debentures.html

[5] https://www.investopedia.com/terms/d/debenture.asp

[6] https://www.investopedia.com/terms/d/debenture.asp

[7]https://www.linkedin.com/pulse/debentures-under-companies-act-2013-law-procedure-issue-kumar

[8]https://www.icsi.edu/portals/0/SHARE%20CAPITAL%20AND%20DEBENTURES.pdf

[9] These were the provisions of S. 117-B of 1956 Act. Now they are likely to be prescribed under rules.

[10]Lloyds Bank plc v Lampert, 1999 BCC 507.

[11] Bank of Baroda v Panesar, 1987 Ch 335: (1987) 2 WLR 208: (1986) 3 All ER 751 (Ch D).

[12]Lloyds Bank plc v Lampert, 1999 BCC 507.

[13] See, Narain Singh & Co v UP Oil Industries Ltd,(1964) 1 Comp LJ 225 (All); following Parvataneni Venkata Brahmarao v Andhra Bank Ltd

In this article, Angelika Awasthi pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata discusses who is an investor in a company and how can they invest.

Introduction

Every modern enterprise needs capital to start its business, therefore an investment is the best way to run and for the betterment of the enterprise. It is an asset which is purchased to generate income in the future. It is also important for a business to expand, though, even the inflows from the business can fund that. Capital is essentially obtained in two forms, equity, which is popularly termed as an investment, and, debt, which is the loan that a company takes to start a business. A company has various options that it can exercise to raise capital. The reason attributable to this is the structure. A potential investor would usually repose more faith in a business that is structured as a company, than in other forms, such as sole proprietorship or a limited liability partnership.

With this basic background in mind, it becomes pertinent to explore the area of types of investment to understand how capital is raised in a company.

Who can be an Investor in a Company?

Anyone can be an investor in the Company. An Investor is the one who invests in the company by allocating the capital for the profit in the future. The following can be an investor in the Company:

An individual

Individual purchases small amounts of securities, as opposed to an institutional investor, called as Retail Investor or Small Investor. An Investor can invest in any company such as Sole Proprietorship, Public Company, Private Company, Limited Liability Company, Partnership or any other Company.

A Shareholder of the Company

A shareholder is the one who invests in the company who buys a stock in the Company.

Other Companies

Any other companies can invest in the other company to secure the future earnings. Investing will create partnerships and form relationships with companies relating to their products and services.It is a strategic attempt to gain specific assets.

Foreign Investor

A foreign individual can also invest in the company of India. It is considered as Foreign Direct Investment (FDI) where investment is made in equity shares, fully and mandatorily convertible preference shares and fully and mandatorily convertible debentures with the pricing being decided upfront as a figure or based on the formula that is decided upfront.

Objectives of Investment

Every investor has certain objectives behind the investment which may be monetary/financial in character. There are three financial objectives:

1. Safety and Security of the fund invested, i.e., Principal Amount.
2. Profitability, which is through interest, dividend and Capital Appreciation.
3. Liquidity which is convertible into cash when required.

Period of Investment

There are three terms of the period for the investment:

• Short-Term- It is up to one year.

• Medium-Term- It is from 1 year to 3 years.
• Long-Term- It is of 3 years and above.

Types of Investment

Debt Investment

Debt investment is, as the name suggests, in the form of a debt to the company. In this setup, a person basically loans the money to a limited liability company in the form of money in exchange for the promise of interest income on the principal amount and an eventual repayment of the principal amount. Debt capital is most often provided either in the form of direct loans with regular amortization or the purchase of bonds issued by the business, which provide semi-annual interest payments mailed to the bondholder.[1]

Features of Debt Capital

• The striking feature of debt capital, amongst others, is that since it is in the form of a loan, the person lending it becomes the creditor of the company and thus, naturally holds a privileged place in the capitalization structure.
• The basic implication of this would be that if the company goes bankrupt, and the liquidation process must take place, it would mean that the assets of the company would first be utilized to pay off the secured creditors of the company, in this case, a person advancing debt capital would become a secured creditor. This essentially puts them on a higher pedestal than the equity investors.
• The highest level of debt is a first mortgage secured bond that has a lien on a specific piece of valuable property or an asset, such as a brand name.[2]

For an instance, would be that if someone loans a certain amount of money to a departmental store and is given a lien on the real estate and building, he/she would be eligible to foreclose upon it in the event the company goes south. However, it may take a certain amount of time, effort and money, but they ideally they will be able to recover the loan from the proceeds of the sale that they make of the confiscated property.

Debenture

Another way of investment would be a debenture. This is understood as the lowest level of debt. This is essentially a debt that is not backed by a lien, which means that it is not secured by any specific asset but, rather, but the company’s goodwill and credit.

Strategic Investment

Strategic investments are usually made by cash-rich giants, such as corporations with huge capital to invest in smaller and younger companies. This is essentially done as a business strategy to develop a business synergy. This works as a related industry, investing into another related industry, which is usually running in cohorts with the bigger giant.

Purpose of the Strategic Investment

• The basic intention behind such investments is using the investee company to increase the profits of the investor company.
• Another purpose that this sort of investment solves is that it preempts competition from achieving higher efficiency through profitable business synergy or synergies.
• They essentially want control over the management, however, more often than not, it is in the form of an indirect control. The usual business practice is that the investor company acquires a controlling stake in the investee company, or alternatively, they merge into the investee company. Due to this basic difference, they reap exponentially larger benefits than the financial investors.
• Another popular method includes forming a joint venture company, wherein they incorporate a third entity to carry out the proposed business. They keep the investor and investee business separate and thus, the investee company doesn’t have control over the investor company. However, the investor company may exercise direct or indirect control in the joint venture company.

Financial Investment

Financial investments are made with the expectation of making only financial returns in terms of cash flow from which investment is made. It would essentially boil down to the dividends that the investor gets from the profits of the company. Investor here looks forward to much more.

Some financial Investors in a company

1. Venture Capitalists

Venture capitalists, angel investors and private equity investors are essentially financial investors in a company. They are the money managers who make high-risk, high-return investments.[3] Venture Capitalists essentially raise a fund in millions of dollars from private and institutional investors and thereafter invest those funds in a company, usually termed as “portfolio companies”, in expectation of a substantial return. They are rewarded in various ways. Venture Capitalists are paid a percentage of the fund’s value as a management fee and also have a “carried interest” in the company. This means that they get a percentage of profits above a certain pre-decided point.

1. Angel Investor

An angel investor (also known as a business angel, informal investor, angel funder, private investor, or seed investor) is an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity.[4] A small but increasing number of angel investors invest online through equity crowdfunding or organize themselves into angel groups or angel networks to share research and pool their investment capital, as well as to provide advice to their portfolio companies.[5]

Purpose of the Financial Investment

• The sole purpose of financial investments is that they want the dividends from their shareholding and the value of their shareholding to increase over the years.
• They are generally not interested in running the business unless the business is running profitably. They, therefore, rely on the existing management for running the affairs of the company. However, they might appoint professionals to run the business rather than taking it over themselves.
• They are also interested in the controlling stake in the business, which is generally at more than fifty percent of the stake. Along with that, they inject funds into the company by investing into freshly allotted shares.
• They usually specify the number of years in which they would want to exit from the company, for instance, venture capitalists want to exit in five to six years of their investment. When that happens, they recover the amount invested, along with a portion of the profits.

Recent Activities

For entrepreneurs, this is the perfect time period to engage in startup and start a business of their own.

• The country has committed itself to reducing the red-tapism to a minimum, much of which was flaunted by our Prime Minister Shri Narendra Modi in Davos recently.
• This has been reflected in the increasing rank of the country in World Bank’s Ease of Doing Business. The Prime Minister’s vow to encourage startups by opening avenues for emerging business by way of Foreign Direct Investments (FDIs) and Make in India campaign, has made the financial environment of growing market for investments.
• The updation of the Company Law via the amendment in 2013 has been an effort towards this goal. Along with that, the passing of the Insolvency and Bankruptcy Code, 2016, is also a brilliant effort towards this. The changes in the Double Taxation Avoidance Agreement with Mauritius are also one of them.This has led to a general trend that Angel Investors are naturally keen to invest in startups.

With the advent of an increase of use of apps and especially in this technological era, there are more opportunities to start a business with less capital. It is thus an exciting time to weigh options and invest.

Conclusion

In conclusion, it would be safe to say that there are various means in which the company can raise capital. It could be either debt investment or by equity investment. All these ways of investment entail a certain degree of risk and returns, for shareholders, there is a larger risk, but for secured creditors, it is the opposite. An investor can make an informed choice by perusing each option and choosing what suits them the best. It would involve analyzing the factors discussed above and the personal preferences of a potential investor.

References

[1] Kennon, Joshua. “Two Types of Investments You Can Make In a Small Business.” The Balance. December 12, 2017. Accessed February 2, 2018. https://www.thebalance.com/types-of-investments-in-small-business-357246

[2] Ibid.

[3] “What are Venture Capitalists?” Steve Robbins, Inc. http://www.steverrobbins.com/articles/whatsavc/

[4] “Getting Started with Angel Investing” https://www.entrepreneur.com/article/52742

[5] Ibid.

In this article, Surya Rajkumar discusses the Constitutionality of Section 5B of the Indian Cinematograph Act, 1952.

The Supreme Court recently in the case of Viacom 18 Media Private Limited and Ors. v. Union of India And Ors.[i], held that once an expert body has determined the maintainability of a film in view of its effect on public order, the states cannot refuse such a film for public exhibition on the grounds that it may imperil public order.

The power to refuse a film for public exhibition on the grounds of public order is conferred to the Central Board of Film Certification by virtue of Section 4(1)(iv) read with Section 5B of the Indian Cinematograph Act, 1952 (the act).

Section 4(1)(iv) allows for the refusal of certification of films while Section 5B reads:

“A film shall not be certified for public exhibition if, in the opinion of the authority competent to grant the certificate, the film or any part of it is against the interests of public order”.

A perusal of this provision makes it patent that it is pari materia with the restrictions on free speech espoused in Article 19(2) of the Constitution of India (the Constitution). The constitutionality of Section 5B was affirmed in the case of K.A. Abbas v. Union of India[ii], wherein the court held:

“With this preliminary discussion we say that censorship in India (and pre-censorship is not different in quality) has full justification in the field of the exhibition of cinema films.”

It is, however, pertinent to note that the constitutionality of Section 5B was only affirmed in response to its incongruence with Article 19(1)(a) of the Constitution which guarantees free speech. In this piece, I shall attempt to explore the constitutionality of Section 5B in terms of the federal structure enshrined in the Constitution.

Seventh Schedule and its Interpretation

Under Article 246(3) of the Constitution, the State Legislature has exclusive power to make laws with respect to any of the matters enumerated in List II of the Seventh Schedule. Entries in the Seventh Schedule are not powers, but fields of legislation.[iii]

When the vires of an enactment is impugned, there is an initial presumption of its constitutionality and if there is any difficulty in ascertaining the limits of the legislative power, the difficulty must be resolved, as far as possible in favor of the Legislature putting the most liberal construction of the entry.[iv]

Although In the case of State of West Bengal v. Committee for the Protection of Democratic Rights[v], the Apex Court held “…….in a federal structure, the Union is not permitted to encroach upon the legislative powers of a State in respect of the matters specified in List II of the Seventh Schedule.”, in the same case it was also held that by virtue of the principle of federal supremacy where there is an irreconcilable conflict between the Union and State lists, the supremacy of the Parliamentary law will be adopted.

Public Order and the Act

In Entry 1, List II of the Seventh Schedule of the constitution, Public Order, except for the use of any force under the control the Union, is a state subject. The state legislature is given the plenary authority to legislate on all matters or are necessary for the maintenance of public order.[vi]

Entry 60 of List I of the Seventh Schedule confers upon the union the power to certify cinematograph films for public exhibition. In the case of State of Madras v. Gannon Dunkerley & Co.[vii], it was held that a matter mentioned in an entry is construed to cover all matters that are ancillary or subsidiary which can reasonably be said to be comprehended in it.

It is argued that the certification of cinematograph films is dependent on the effect these films have on public order and thus public order is ancillary to Entry 60 of List 1. Moreover, in the case of Naga People’s Movement for Human Rights v. Union of India[viii] it was contended that the Armed Forces (Special Powers) Act, 1958 insofar as it allowed an officer to use force in the interests of public order, was an encroachment upon Entry 1 of the State List, the Apex Court held that the act did not deal with public order. Public order falls within the realm of law and order.[ix]

Further in a slew of cases where a State banned a film after the CBFC’s clearance on account of law and order, the Apex Court has held that once an Expert Body (CBFC) has considered the impact of the film on the public and has cleared the film, it is no excuse to say that there may be a law and order situation.[x] One can thus submit that in upholding the authority of the CBFC to certify films for public exhibition based on their purported effects on public order, the Apex Court has implicitly upheld the constitutionality of Section 5B of the act vis-à-vis the federal structure.

It is also pertinent to note that a law is unconstitutional on the grounds of legislating on a subject that is not assigned to the relevant legislature by the distribution of powers made by the Seventh Schedule.[xi] The Supreme Court is yet to come across a case that warrants its attention to the constitutionality of the impugned provision as regards its consistency with the federal structure enshrined in the Constitution. When so it is very unlikely that the provision would be struck down as unconstitutional owing to the precedents mentioned hereinabove that favour its constitutionality, however, it would be interesting to see what view the court would take.

References

[i] Order in Writ Petition (Civil) No. 36 of 2018.

[ii] 1971 AIR 481.

[iii] Durga Das Basu, Commentary on the Constitution of India, (8th Edition, 2012), Volume 10, 11713.

[iv] Durga Das Basu, Commentary on the Constitution of India, (8th Edition, 2012), Volume 10, 11712.

[v] 2010 (3) SCC 571.

[vi] Romesh Thappar v. State of Madras, (1950) SCJ 418.

[vii] 1958 AIR 560.

[viii] (1998) 2 SCC 109.

[ix] Dr. Ram Manohar Lohia v. State of Bihar And Ors., 1966 AIR 740.

[x] Union of India v. K.M. Shankarappa, (2001) 1 SCC 582; Prakash Jha Productions v. Union of India, 2011 (8) SCC 372

[xi] Durga Das Basu, Shorter Constitution of India, (14th Edition, 2009); Namit Sharma v. Union of India, (2013) 1 SCC 745.

This article is written by team Foram Chauhan, a Mumbai based litigating firm.

BOMBAY HIGH COURT VINDICATES A WOMAN OF BASELESS ALLEGATIONS ON HER CHARACTER BY EXERCISING POWER SECTION 340 OF Cr.P.C. IN ANTICIPATORY BAIL APPLICATION (ABA)

– A LAUDABLE VERDICT ON THE EVE OF WOMEN’S DAY!

Bombay High Court directed Registrar to file a case against accused husband for filing false affidavit in anticipatory bail; exercises sec. 340 of CrPC in ABA

Mumbai: 7th March 2018

The case addresses the grave issue of torture and harassment; this time of the daughter of renowned Mumbai businessman Mr. Fareed Qureshi.

Adv.Nilesh Ojha appeared for the complainant wife (daughter of Mr. Fareed Qureshi) and Adv. Satish Maneshinde appeared for the accused husband.

BACKGROUND OF THE CASE

Mr. Fareed Quereshi had performed the wedding of his daughter in an extravagant ceremony at Bandra Kurla Complex, Mumbai in November 2016.

The wedding was a lavish affair wherein the stage erected for the bride and bridegroom itself cost around Rs. 1.5 crores. The wedding was attended by more than 10,000 guests which included who’s who from politics, film industry and business community.

The father of the bride, Mr. Fareed Qureshi had gifted a Mercedes car to his son-in-law, along with cash of around Rs. 2 crores, gold weighing around 10 kg and one flat. In addition to this, Mr. Fareed Qureshi had also gifted Nissan Micro cars to the close relatives of his son-in-law. The total expenditure for this pompous wedding was around Rs. 13 crores.

What went wrong

Barely within few months of marriage, the son-in-law (accused) and his family members started harassing the complainant wife (Mr. Qureshi’s daughter) by making demand for more money. The complainant wife was forced to run away from her matrimonial home around November 2017 since she feared for safety of her health and her life.  

Therefore Mr. Fareed Qureshi lodged a complaint against the accused and his family members at Mahim police station in November 2017 following which the accused applied for Anticipatory Bail before the City Civil Court Mumbai.

The Session’s Judge refused to grant Anticipatory Bail to the accused. The accused husband then appealed in Bombay High Court after the rejection of his application for anticipatory bail. The first hearing of the accused husband’s ABA was before   Justice A.M.Badar. While arguing on behalf of accused, Adv. Satish Manshinde submitted that the complainant wife was having an affair with other man which was the reason for matrimonial dispute and that a false case had been lodged against the husband. Based on this submission and statement on affidavit filed earlier by the husband, Justice Badar granted interim bail to the accused husband on 30.11.2017.

Realising that the accused husband had managed to get the interim bail based on affidavit containing false averments, Mr. Fareed Qureshi filed an application under Section 340 of Code of Criminal Procedure being Criminal Application no. 728 of 2017 before the Bombay High Court, for taking action against the accused for the perjury committed.

HEARING OF APPLICATION U/S 340 BEFORE THE BOMBAY HIGH COURT

While arguing the case, Mr. Nilesh Ojha, advocate for the applicant pointed out to the Court that there is sharp rise in tendency to file a false affidavit before the court to obtain favourable orders, as the mischievous litigants are confident that no action would be taken against them; reason for such belief being the aversion and reluctance of the court in cases of filing false affidavits.

Adv. Ojha relied on various judgments of the Supreme Court and also relied on the recent judgment of Hon’ble Supreme Court in the case of Asaram Bapu , where the Apex Court had not only rejected the bail of Asaram Bapu but also launched prosecution against him for filing false affidavit before the Supreme Court.

Adv. Ojha also pointed out that the allegations made by accused against his wife were falsified by the Enquiry Report filed by the police, wherein the Investigation Officer has clearly stated that the accused was lying about the alleged affair of the complainant wife with some other man.

When Mr. Satish Maneshinde tried to intervene, Mr. Nilesh Ojha strongly objected stating that the former cannot participate in the enquiry for his client as the accused has no locus in the proceeding u/s 340 of the Criminal Procedure Code. To buttress his argument, Adv. Ojha relied on the recent judgment in Union of India vs. Haresh Milani MANU/MH/0804/2017, which is a reported judgment wherein Adv. Ojha himself has represented Mr. Haresh Milani.

Mr. Ojha submitted;

“The guidelines of Supreme Court as followed in Sanjeev Mittal’s case 2011 RCR (CRI) (7) 2111 is need of the time. It is  necessary to pen down the  class of people who perpetuate illegal acts by obtaining stays and injunctions from the Courts by frivolous litigation by making false statements – one of the reasons for over-flowing of court dockets is the frivolous litigation – It has unfortunately become the order of the day, for false statements to be made in the course of judicial proceedings even on oath and attempts made to substantiate these false statements through affidavits or fabricated documents -Even if these litigants ultimately loose the lis, they become the real victors and have the last laugh. This class of people who perpetuate illegal acts by obtaining stays and injunctions from the Courts must be made to pay the sufferer not only the entire illegal gains made by them as costs to the person deprived of his right and also must be burdened with exemplary costs. Faith of people in judiciary can only be sustained if the persons on the right side of the law do not feel that even if they keep fighting for justice in the Court and ultimately win, they would turn out to be a fool since winning a case after 20 or 30 years would make wrong doer as real gainer, who had reaped the benefits for all those years. Thus, it becomes the duty of the Courts to see that such wrong doers are discouraged at every step – Despite settled legal positions, the obvious wrong doers, use one after another tier of judicial review mechanism as a gamble, knowing fully well that dice is always loaded in their favour, since even if they lose, the time gained is the real gain . The Court imposed costs of 15.1 Lakhs .

It is very necessary at least in a few glaring cases that an example be made of persons who are indulging in such malpractices which undermine the very administration of justice dispensation system and the working of the Courts. This will at least have a deterrent effect on others.

A party, whether he is a petitioner or a respondent, or a witness, has to respect the solemnity of the proceedings in the court and he cannot play with the courts and pollute the stream of justice. It is cases like this, with false claims (or false defences) which load the courts, cause delays, consume judicial time and bring a bad name to the judicial system. This case is a sample where the facts are glaring. Even if they were not so glaring, once falsehood is apparent, to not take action would be improper.

The judicial system has a right and a duty to protect itself from such conduct by the litigants and to ensure that where such conduct has taken place, the matter is investigated and reaches its logical conclusion and depending on the finding which is returned in such proceedings, appropriate punishment is meted out.

Unless the judicial system protects itself from such wrongdoing by taking cognizance, directing prosecution, and punishing those found guilty, it will be failing in its duty to render justice to the citizens. Litigation caused by false claims and defences will come to be placed before the courts, load the dockets and delay delivery of justice to those who are genuinely in need of it.

What constitutes the offence – the first offence was of forging the document and then using it before Court in order to cause injury to the other party -Two offences are separate and are to be prosecuted and tried separately – when the present petition containing false averments and relying on forged documents (which were also filed) was filed, a second offence stood committed That second offence was of: (1) making a false averment in the petition duly verified and filing the same in court; and (2) asking the Court for a judgment on the basis of false averments and forged documents.“

THE VERDICT

Justice A.S. Gadkari who heard the application u/s 340, accepted the submissions given by Adv. Nilesh Ojha and did not allow Adv. Satish Maneshinde to argue, based on merits of the case, passed the order on March 7, 2018 directing the Registrar Judicial (II) to lodge the case against the accused husband under Section 193,196,199,200,209 of I.P.C. Justice A.S.Gadkari also rejected the Anticipatory Bail Application of the accused.

Upon this order by the Bombay High Court, the Mahim Police arrested the accused and produced him before the Additional Chief Metropolitan Magistrate Court at Bandra wherein the accused was denied bail and was remanded to the custody by the Court.

Earlier Bombay High Court Division Bench 25 years before in 1992 passed similar order in Civil case against Godrej and Boyce Co. Pvt. Ltd. Vs. Union of India (1992 cri LJ 3752).

It is worthwhile to note that this is the first time in the history of Bombay High Court that an order has been passed under the provisions of section 340 of the Criminal Procedure Code directing an enquiry against the accused in anticipatory bail matter.

Adv. Nilesh Ojha who appeared for the applicant was assisted by Adv. Vijay Kurle, Adv. Shweta Doshi, Adv. Ruchi Patil, Adv. Tanvi Kambli, Adv. Kruti Bhavsar, Adv. Krutika Gaikwad, Adv. Arapana Bhosale and Adv. Prafull Gavale.

APP Mr. Ameet Palkar represented the State and Adv.Satish Maneshinde appeared for the accused husband.

P.S. While in the present matter, Adv. Ojha has represented the complainant woman and her father, in another case, Adv. Ojha has represented an aggrieved husband (a renowned Orthopedic surgeon from Mumbai) in launching prosecution against the wife u/s 340 of the Cr. P.C. for filing false affidavit to extract higher maintenance from the husband. Justice Abhay Okha of Bombay High Court, who heard this matter has reserved his judgment.

Read the judgment

About the seminar

The Stockholm Declaration recognized that man is a part of nature, and life depends on it. U. Thant, the then secretary General, United Nations, in Stockholm Conference appealed “Like or not, we are travelling together on a common planet and we have no national alternative but to work together, to make an environment in which we and our children can live a full and peaceful life”.

The present seminar focuses on global and national environmental laws and policies in analyzing the need of different countries to manage and control the bio-diversity, climate change, water and air pollution, land degradation, the depletion of ozone layer and persistent organic pollutants etc. for sustainable development.

We hope that the suggestions, recommendations and resolutions from this seminar will be of immense value and will pave the way for the Academicians, Judges, Lawyers, Policy Makers and Law Makers to come out with viable solutions.

Call for Papers

Research Papers/Articles and Case Studies from legal fraternity are invited for presentation in the National Seminar. Communication of acceptance will be sent to authors for presentation. Co-authorship is allowed, but each author is required to register and pay the registration fee individually.

The Seminar will focus on following Issues/ Sub-themes:

• Environmental Law– Principles and Policies in India
• Global Warming, Climate Change and Depletion of Ozone Layer
• Environmental Protection and Sustainable Development: Indian Legal Perspective
• Green Economy, Poverty Eradication and Human Resource Development
• Technological Advancement and Environment Degradation
• Protecting the Marine Environment: Role of Environmental Law and Policy
• Biodiversity and Natural Resources at Global and National level
• Protection of Flora and Fauna: National Scenario
• Environmental Issues and Dispute Resolution Mechanism
• Public Participation for Enforcement of Environmental Laws in India
• Environment and the Role of Supreme Court of India

Above identified issues /sub-themes are only illustrative. Participants may select the related topics covered under the main theme.

Important Dates

• Last date for Abstract Submission: March 15, 2018
• Last Date for Communication of Acceptance of Abstract: March 18, 2018
• Last Date for Submission of Full Paper: March 25, 2018
• The abstract and full-length paper must include Title, Author(s) Name & Designation, Name of the institution of the researcher, Mob. No. and e-mail address.

Submission Guidelines

• The submission shall consist of an abstract and full paper.
• An abstract shall not be more than 300 words excluding title and keywords.
• The length of the paper should not exceed 3000 words.
• Footnotes must conform to the authoritative standard, rules of legal citation and must include a description of each authority adequate enough to be understood by a reader.
• Paper should be submitted in MS Word format with the subject “National Seminar on Emerging Issues Relating to Environmental Laws: National Perspectives”.
• Cover-page must contain name, nationality, e-mail, contact number, and name of the college/university along with the address of the participants.
• In case of co-authorship, the covering letter should include details of all the authors.
• Submission of abstract and full paper must be made to nationalseminar.ils@iudehradun.edu.in
• Delegates must submit the hard copy of his/her paper on the day of seminar, at registration desk.

The paper should be in the following format:

• Font Type: Times New Roman
  
• Font Size: 12
  
• Line Spacing: 1.5
  
• Foot Note Size: 10pt

Contact

In case of any queries, contact:

• Tarun Kumar: 7060471943
  
• Anshuman Sahoo: 7895194740
  
• Basuki Nath Pandey: 7060471936
  
• Ashish Kumar Rai: 9918473419

For further details, kindly refer to the brochure.

National Seminar Brochure ILS IUD March 2018 (1)

This article is written by Akshay Kumar Singh. In this article, Akshay discusses top 10 corporate law moots in India.

Introduction

Mooting is an oral representation of a legal problem against a fellow counsel before a judge. It is an integral part of becoming a lawyer. For a law student, mooting is critical as it gives the student first-hand court experience and court etiquettes. The idea behind moot is to provide first-hand exposure to a student while he’s still in college. It also helps you build your public speaking skills and also enhance your research skills. It gives you the right mindset to understand details of a court proceeding, and how different aspects of a court proceeding function.

Corporate Law Moots in India

NUJS Herbert Smith National Corporate Law Moot Court Competition

• It recently held its 10th annual NUJS-HSF National Moot Court Competition 2018 (the Moot).
• It is one of the most sorts after competitions in India and sees participation from across India
• The competition is held in Kolkata
• The moot was won by students of Rajiv Gandhi National Law University of Law, Punjab.

How to Participate

The participation information is provided on their official website http://nujs.edu/nujs-students-activities-sja-mootcourts.html

Rules

• There are teams of three.
• The teams have to submit their memorial or plaint before the date of submission.
• Every team shall consist of two speakers and may have one researcher.
• The dress code is formal (Black pants, white shirt, and black coat)

Awards

As an award trophy is given to the best speaker, trophy and cash prize for the winning team, and cash prizes for runner-up team.

Surana & Surana National Corporate Law Moot

• For over 15 Years, every year, the firm has hosted, administered and sponsored over a dozen moot court competitions.
• Till date, close to 33,000 participants, Judges & other have participated and acknowledged moot court competition project.
• Recently they organized 16th Surana & Surana National Corporate Law Moot Court Competition, 2018.
• They usually conduct the competition at the beginning of the year
• Institute of Law, Nirma University, was the winner in their last competition

How to Participate

Registrations are done online on their official website

Rules

• Students of LL.B three year or five-year course are eligible for the competition.
• Each team should consist of a minimum of 2 and the maximum of 3 members and the minimum and the maximum number of members cannot be modified under any circumstances.
• There will be two preliminary rounds of arguments, an octa-final, a quarterfinal, a semi-final and a final round.

Awards

Cash Prizes for winner and 1st runner-up and participation certificate for rest.

Amity Moot Court Competition

• Amity Moot Court competition, one of the largest moot completion in India. It has been conducted for over 17 years now. The competition grows with each event and has a lot of popularity among law students.
• The competition is conducted every year in the month of March-April.
• The competition sees participation from all over India, over the legal problem given in the competition every year.
• Symbiosis Law School, Pune won the last year’s competition, however, the best research award was given to a student from NLU Odisha. 

How to Participate

The University gives out an official invitation to most of the leading legal portals and also legal forums. Interested students can also keep a tab on its official website for competition details.

Rules

• Teams of three (two speakers and one researcher).
• The teams have to submit their plaint before the date of submission.
• Only LL.B students can participate. No LL.M student can participate.
• There is also a registration which changes every year.

Awards

• There are Rolling Trophy and a cash prize for the Winning team and Runner-Up team.
• There is a Trophy/ Award for the Best Memorial.
• There is a Trophy/ Award for the Best Speaker
• There is participation certificate for all participants

NALSAR Justice Bodh Raj Sawhney Moot Court Competition

• This is an annual competition which is over a decade old now. The competition had its 11th edition in the year 2017.
• The competition two levels (a) Memorial Elimination Round, and (b) National Rounds.
• The teams which qualify the Memorial Elimination Round shall be allowed to participate in the National Rounds, which is comprised of Preliminary Rounds and Advanced Rounds Viz. Quarter Finals, and Finals.
• The competition receives participation from all over India, NLUs, and other private universities.

How to participate

The university gives a formal invitation, where one can register by applying on their official website https://www.nalsar.ac.in/about-nalsar

Rules

• Only LL.B students are eligible for the competition
• Each team shall consist of a minimum of two members and a maximum of three members.
• Every team shall consist of two speakers and may have only one researcher.
• A researcher shall be allowed to argue instead of a speaker only with the permission of the Court.

Awards

• Cash prize and trophy for the winning team.
• Cash awards for best oralist, runner-up oralist

KLA Moot Court Competition, Kerala

• The KLA Moot Court Competition, Kerala, had their 28th annual competition in 2017, in the month of February
• It has a huge participation footfall of over 45 universities/colleges/schools across India.
• The competition is held in Kerala and a great prominence in the academic community.

How to Participate

Participants are invited via email to their mooting society. When the registration is done, there is a participation fee, which has to be paid in the form of demand draft.

Rules

• Only LL.B students are eligible for the competition
• Each team shall consist of a minimum of two members and a maximum of three members.
• Every team shall consist of two speakers and may have only one researcher.

Awards

• Best Team
• Second Best Team
• Best Student Advocate
• Second Best Student Advocate
• Best Lady Advocate
• Best Memorial

All the participants will be awarded certificates of participation.

Fiat Justitia National Moot Court Competition

• The competition is over half a decade old now and has gained popularity among law colleges as one of the key competition.
• The first competition was held back in 2010. The event saw a participation of over 21 law colleges across India.
• The competition is held in Chennai and it is mostly held in the first 3 months of the year.

How to participate

Participation details are shared by the mooting society along with the invitation.

Rules

• Students pursuing three or five-year courses of the LL.B. degree in the academic year
• The participating team shall comprise of a minimum of two members and maximum of three members.
• The official language of the competition shall be English

Awards

Prizes are given for the Best Team, Second Best Team, Best Speaker, Second Best Speaker, Best Memorial and the Second Best Memorial.

NFCG-Nalsar Moot Court Competition on Corporate Governance

• The competition is held in Hyderabad

• The competition first started in 2011 and it had its 6th competition last year.
• Students from various colleges across India can participate with enthusiasm and look forward to this competition.
• The competition is usually held during the middle of the year.

How to participate

The registration procedure is online, where the teams have to send their plain before the date of submission.

Rules

• The Competition shall be conducted in the English language only.
• Each team shall consist of a minimum of two members and a maximum of three members.
• A researcher shall be allowed to argue instead of a speaker only with the permission of the Court.

Awards

• Winning Team Award
  • The winning team receives a trophy and a cash prize.
• Runner-Up Team Award
  • The runners-up team receives a trophy and a cash prize
• Best Oralist receive
  • a trophy, and
  • a cash prize
• Second Best Oralist receives
  • a trophy, and
  • a cash prize

All India Corporate Law Moot Court Competition, NLU Delhi

• The competition is one of the most prestigious competitions, as it is conducted by NLU Delhi which is directly under the purview of High Court Judges.
• The University has successfully organized several moots in the past, including South-Asia Rounds Oxford Price Media Law Moot Court Competition, India Rounds of ICC Trial Moot Court Competition, Vis Pre-Moot.
• The competition is conducted at the NLU Delhi campus itself.

How to participate

The details regarding participation can be found in their official brochure.

Rules

• Participating teams have to submit four (4) sets of hard copies for each side of the memorials.
• All students enrolled in a 3 year LL.B programme or a 5 year integrated LL.B are eligible to participate
• The team composition shall be as follows: 2 Speakers & 1 Researcher
• Teams are not permitted to receive any assistance towards the preparation of memorials or arguments from any third parties, including teachers, alumni, students etc. Any team found getting assistance from third parties shall be immediately disqualified.

Awards

• Trophy and cash prize for winning team and best memorial
• Cash prize for best speaker

ULC Bangalore All India Moot Court Competition

• The competition is held in Bengaluru and the competition is over a decade old now.
• The ULC mooting society is very active and has the mooting competition is considered one of the best in India.
• The competition is usually conducted in the first three months of a year.
• The competition receives a huge number of participants from all over India.

How to Participate

The competition is held annually and the registration process is usually done online. The society gives out a brochure which has the registration details

Rules

• One team comprising of a minimum of two members and not more than three members, per institution, shall be eligible to participate in the Competition, subject to completion of Registration formalities.
• Each team should prepare one Memorial for each side, that is, the Petitioner and the Respondent(s).
• Any additional member of any Participating Team shall not be entitled to hospitality or for any award. Such member or observer shall not be allowed to watch any of the rounds of the competition.

Awards

• Winning Team
• Runners-up Team.
• Best Memorial
• Best Researcher

School of Law, Christ University National Moot Court Competition

• The competition is had its 8th annual competition in 2017, where it saw a participation of over 20 universities.
• The competition was held in Bengaluru in the month of September 2017.
• National University of Study and Research in Law (NUSRL), Ranchi, the team was the winner in the last competition held

How to participate

The registration is done through a registration form which has to be sent along with the registration fee.

Rules

• The participants should currently be pursuing their Bachelor’s degree in Law i.e. three year or five-year courses.
• Each team shall comprise of three members only, two speakers and one researcher.
• The official language of the Competition is English. All competition rounds including the written submissions (memorials) will be in English

Awards

• Best Team
• 2nd Best Team
• Best Speaker
• Best Memorial

Do you want to be a champion mooter?

It takes preparation, hard work, determination. However, more than anything, it takes guidance and resources to do well in mooting.

You need to work hard and in the right direction. It makes a huge difference if you have someone along the way to point you in the right direction.

Mooting is incredibly competitive, and you have no opportunity to make mistakes and learn. If you make mistakes, it is costly, you lose competitions or don’t make it to the next round.

Given this situation, what is critical is that you prepare to your best ability when you appear in a moot court or even submit the memo to shortlisting.

How do you prepare?

• Till date, the best way to learn is to get guidance from champion mooters. They already know what it takes to win.
• You can ask them for a practice session, go for a mock session before them and ask for feedback.
• You can ask a memo champion to go through the memo and give you feedback. That is a sure shot way to up your game.
• Check Mooting School, world’s first online course that will help you to learn mooting rapidly and become a champion Mooter.

Conclusion

The above list is in no particular order or ranking. The list is purely based on the research and knowledge of the author. In no ways, does the above list undermine any competition or promote any competition in any manner. Such moot competitions are critical and important to the overall growth of a law student. This is as much a part of main curricular as it is an extracurricular activity. A law student should try to participate in as many such competitions as possible, and the college/university should also encourage such competitions and student’s participation in such competition.

In this article, Gyandeep Kaushal pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata discusses Status of the property of a partnership firm post-dissolution.

Introduction

There are various legal structures into which a business can be molded and partnership is one of them, wherein the relationship and disputes between the partners are governed as per the Indian Partnership Act, 1932. Section 4 of the Indian Partnership Act defines partnership as 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.

• Section 14 of the Act talks about the property of the firm in the following terms:
  • Subject to contract between the partners, the property of the firm includes all property and rights and interests in property originally brought into the stock of the firm, or acquired, by purchase or otherwise, by or for the firm, or for the purposes and in the course of the business of the firm, and includes also the goodwill of the business.
  • Unless the contrary intention appears, property and rights and interests in property acquired with money belonging to the firm are deemed to have been acquired by the firm.
• The clear implication of the abovementioned provision is that subject to any contract between the partners, the property may be brought into the stock of the firm either at the time of the formation of the said partnership or anytime later during the course of the business of the firm. Summing this up, there are three ways to make a property the property belonging to the firm: it may either be originally brought into the stock of the firm; or during the course of the business of the firm, the same is purchased or it is acquired.
• Although during the subsistence of the firm, the property acquired or bought for the firm belongs to it, the question is what happens to the said property once the partnership is dissolved. It is this question with which this article is concerned.

Chapter VI of the Partnership Act, 1932

Chapter 6 (Sections 39 to 55) of the Indian Partnership Act, 1932 talks about the dissolution of a firm.

Section 39

Under this section, the act describes what is meant by the dissolution of a firm to mean the dissolution of partnership between all the partners.

Section 40

Further outlines of the act, the ways in which dissolution can take place:

• • It can either be dissolved with the consent of all the partners together, or
  • According to the provisions of a contract that may have been entered between the partners.

Section 41

This section provides that if an event happens such that the business of the firm is made unlawful to be carried, the firm is dissolved. However, if the firm carries multiple adventures, the mere illegality of one adventure doesn’t render the entire firm dissolved.

Section 42

Section 42 of the act provides for the dissolution of a firm in case of the happening of certain contingencies.

Section 43

This section of the act provides that where the partnership is at will, dissolution may take place by the issuance of notice by one partner to the rest.

Section 44

provides the grounds on which the court may dissolve the partnership.

Section 45

Section 45 of the act provides that the liability of the partners which may continue to third parties for acts done by any of the partners which would have been an act of the firm before the dissolution until the issuance of public notice. The other provisions in the chapter except for the provisions relevant to the issue at hand do not have any direct relevance to the issue at hand.

Provisions relevant for the ascertainment of the status of the partnership property post its dissolution

The provisions relevant to the present issue are Sections 46 to 49 of the Indian Partnership Act, 1932:

Section 46, Representative Rights

This section provides that once the firm is dissolved, each partner or their representative shall be entitled against the rest of the partners to have the firm’s property applied to pay the debts and liabilities of the firm. The surplus property, if any is to be distributed among each partner or their representatives as per their respective rights in the firm.

Section 47, Firm is not bound by the act of an insolvent partner.

This section of the act provides that post the firm’s dissolution, each partner’s authority to the firm survives the dissolution, so far as it may be necessary to wind up the firm’s affairs and to complete any transaction which began but wasn’t finished at the time the firm was being dissolved. A proviso to the Section provides that the firm isn’t bound by the acts of an insolvent partner. However, the liability of any person remains unaffected who has posted the adjudication of an insolvency of such partner represented himself as a partner of the insolvent.

Section 48, Modes of the settlement of accounts  

This section the Act provides for the mode of settlement of accounts between the partners after the dissolution of the firm.

Section 48 (b) (iv) Assets divided among the partners

This section of the act provides that if there is any residue of assets of the firm even after application of the said assets in the manner laid down in clauses (i), (ii) and (iii) of subsection (b) of Section 48, then it should be divided among the partners in the same proportion in which they were entitled to profit sharing.

Section 49 Property of the firm must be applied first to pay the firm’s debt

Section 49 of the Act provides that when there are joint debts due from the firm and separate debts due from any partner, the property of the firm must be applied first to pay the firm’s debts and if any surplus remains post that, then the share of every partner shall be applied to pay their separate debts.

Status of Partnership Property Post Dissolution

In setting the accounts of a firm after dissolution, the following rules shall, subject to agreement by the partners, be observed:

• Losses, including deficiencies of capital, shall be paid first out of profit, next out of capital, and if necessary by the partners individually in the proportions in which they were entitled to share profits.
• The assets of the firm, including any sum contributed by the partners to make up deficiencies of capital, shall be applied in the following manner or order:
  • In paying the debts of the firm to third parties.
  • In paying to each partner rateably what is due to him from the firm for advances as distinguished from the capital.
  • In paying to each partner rateably what is due to him on account of capital, and
  • The residue, if any, shall be divided among the partners in the proportions in which they were entitled to share profits.

Shanti Bai Agrawal and Ors. v. Uma Bai Agarwal

In the above case, the Court considered mainly with the status of the partnership property post the dissolution of the partnership.

• The Court observed that section 46 of the Indian Partnership Act makes it clear that in post-dissolution of the partnership, the firm’s property must first be applied to pay the debts and liabilities of the firm and only thereafter the surplus, if any, is to be distributed among the partners per the rights they have in respect of the partnership.
• Section 47 provides for partners’ authority to continue only so far as it may be necessary to wind up the firm’s affairs and to complete transactions that began but remained unfinished at the time of dissolution but not otherwise.

Addanki Narayanappa & Another v. Bhaskara Krishnappa & Ors

The Supreme Court in the above case observed that the share of a partner in a partnership is nothing more than the partner’s proportion of the assets of the partnership after they have been turned into money and applied in the partnership’s liquidation, irrespective of the property comprising of land or otherwise. Also, upon the partnership’s dissolution, first the debts and liabilities should be met out of the property of the firm and thereafter the assets of the firm be applied in rateable payment to each partner of the firm of what is due to him on account of advances made by him as distinguished from the capital and secondly, on account of capital, the residue, if any, being divided rateably among all partners.

The Apex Court also pointed out that the Act presupposes total liquidation of the partnership’s assets before the settlement of accounts between the firm’s partners post-dissolution of the same.

Mohd. Laiquiddin & Anr. v. Kamala Devi Misra By LRs & Others

The Supreme Court held that under the Partnership Act, property which is brought into the partnership by partners upon formation or which may be acquired in course of firm’s business, becomes partnership property and a partner is subject to contract between partners, entitled to a share in the money representing the value in the property upon the dissolution of the firm.

S. V. Chandra Pandian and Ors v. S. V. Sivalinga Nadar & Ors

The Supreme Court held that post-dissolution of firm each partner becomes entitled to his share in the profits of the firm post the settlement of accounts as per Section 48 of the Indian Partnership Act, 1932. The interest of the partners is in accordance with the proportion of their share in the firm.

• The Supreme Court in such cases has further held that the entire property of the firm shall become the firm’s property and any individual partner shall only be entitled to his share of profits if any accruing to the firm from the realization of the property and post-dissolution of the firm to a share in the money representing the property’s value.
• Clearly, the application of this principle implies that the property of a firm would be movable property, irrespective of whether it was immovable originally or otherwise, for the distribution among the partners. The same cannot be said to be an immovable property for purposes of dissolution between the respective partners.
• Post-dissolution of the firm and dissolution of the property, the immovable property belonging to the firm before the dissolution becomes “a movable asset” in the hands of the partners inter se, who have their rights in terms of Section 48 of the Indian Partnership Act.
• The property’s value must be assessed by a technical expert and partners are according to Sections 46 to 49, entitled for appropriate adjustment of their shares from the amount according to their share they held in the firm before the dissolution.
• Consequently, the question regarding the status of the firm property post-dissolution may be answered in the following way:
  • Post-dissolution
  • All properties of a partnership are to be converted into money, and
  • Therefore, any immovable property which belonged to the undissolved firm loses such ‘immovable’ character. Such properties have a status of ‘movable property’ post-dissolution, from which the respective shares of the partners must go to them.

This article is written by Anubhav Pandey. Anubhav is the Blog Manager at iPleaders, an academic at Rajiv Gandhi National University of Law and a regular contributor to various legal websites.

Who says money is merely a spec of dirt in the hands? It will slip away one day! Ask us, the law students going for moots and research papers. A moot costs you on an average more than 3000. The amount of refund depends from college to college. However, moot is a gamble. If you hit the jackpot then a refund along with the cash prize, if not. Go empty handed.

Money is just one of the reason why we must do a part time job while studying law. Let me start with a simple question, do law school prepares us for the legal profession awaiting outside? Are the modules which we go through a night before the exams all that we need? Please share us your thoughts with us in the comment box below.

Yes, when it comes to internships, they are the most useful part and a must for practical learning. Ask me what good can an internship do. Here goes my story. I went to iPleaders for an internship in December 2016. IPleaders provides a stipend of INR 5000 on achieving certain metrics. 50 articles of publishable quality in 30 days it is. I somehow managed to bag the stipend. 50 articles it was in 30 days. We should know how to excel in an internship. However, correct advice on how to excel in an internship is hard to get. Check out this online course on ace your internship. This course is designed to enable law students to tackle two major challenges: secure corporate internships (at corporate law firms or companies) and perform extraordinarily well so that you can get a job offer.

Ramanuj, my boss now and internship coordinator then offered me an opportunity to write paid blogs for iPleaders. Few months went by and I was writing for iPleaders blog religiously. Banging on new legal topics every day, the idea of paving way for access to justice by reaching out to more than 6 lakh readers motivated me throughout. After writing for 3 months, I was made the editor at iPleaders blog. And guess what, the bucks which I got to write an article changed its form into a constant monthly salary. I remember making my first invoice, it was one of the best feelings.

Why am I asking every law student out there to work while still being inside the law school? Is it all about the money? My answer is no. Money is the by-product. Let me explain this by giving you five reasons why every law student must do part time job while still being inside the law school.

I call it 5 reasons why earning while you’re learning is a great fun!

Being financially Independent

Why are we all studying law? Eventually, the idea is to be independent financially. Ain’t it? Obviously, it is. So what are we waiting for? Why not start making some money while still studying? Why not contribute to country’s economic workforce while we all can. Why not decrease the burden of our family and help saving couple of bucks, which not to mention crosses thousands every month. Best thought, why not pay our own college fees while we can! What I say sounds utopian? Trust me it is not. It is possible to do all that I say while we are still studying. Keep on reading and you’ll get to know how.

Making an impact – In my case, making law accessible to more than half a million people

It’s hard to make an impact at the very starting of our career. I find it difficult to understand what it means by making an impact in a strict sense at the very nascent stage of our career. Readers discretion! By making an impact here, I do not mean the impact which can change the world as we all think we will do by sitting in our hostel rooms. I find it hard to understand when people quit their first job after 3 months citing the reason, damn! I was not able to make any real impact.

Making an impact takes time. It is the small things which we learn over years that help us bringing the bigger change. Please do not expect yourself to be Mr Harish Salve after your first moot!

Now, just think how good you might feel when an article that you’ve written months ago on NRI marriages helped someone registering a complaint and escaping the foreign land where she was tortured by her in-laws every day.

This is what I mean by making an impact. It can be in any way, one way might be by helping someone filing their tax returns! Helping a startup by giving them structuring advice. Taking part in your legal aid cell and helping people sort family disputes legally. In my case, the satisfaction of making law accessible to the masses is what drives me. This satisfaction further increased when we launched the initiative of HINDI BLOG. Yes, iPleaders is now in Hindi too. Click here to read Hindi blog.

Tasting the practical side of law

Internships can do wonders. I see my fellow law school mates often crying about the attendance issues and how GLC students get more exposure by working as an intern at some law firm throughout the year. What makes these students stand out? Is it the practical observation and study of law which they are undergoing backed with law school learning?

The answer is yes. Imagine you are working for XYZ law firm while still studying and drafting legal notices every day. Or say, filing RTI for someone. Leave that, just getting an undertrial out of jail. This is a victory. Clubbing your theoretical knowledge with practical experience. It’s the same way as we add spices to raw food.

Being the Blog Manager and the internship coordinator at iPleaders, I get to interact with lots of people. Interns, advocates, entrepreneurs. Managing the blog requires teamwork and precision. My job teaches me how we can achieve more as a team. Finding practical side of law in our law school textbooks is impossible. Here is a sample material of an online course which gives you a practical flavour of law. It’s for free.

Getting up to date with the law

My job as the Blog Manager at iPleaders is to decide which topic should go live, and ensuring the laws are factually correct. I will fail miserably if I do not update myself with the recent happening in the field of law every evening. Therefore, getting up to date with the recent law is a by-product of working while still being inside the law school for me.

Teaches you discipline and integrity

Abhyuday, COO and Co-Founder at Lawsikho asked me, what did I learn from my internship at iPleaders. My reply amazed him. I said, “without integrity, nothing persists”. He started laughing. This used to be the wifi password for our old office at Saket.

While my friends are out every day, partying hard, I am found working, either in my college canteen or library. At times, I even have to miss few birthdays because of work. Also, I have to fast forward all the episodes of Game of Thrones as I know I have to catch all the fun in limited hours. I am found with my iPad and Bluetooth keyboard like a freak during college hours. Why? When a class goes free, my work is on!

Is it scary? Let me relieve your stress with this paragraph. I work from Monday to Saturday without a break, and try to minimise all the fun during the weekdays. Things are not the same on the 7th day of the week! Here you go. Being in Patiala is a great fun and the most special part is Punjabi Weddings. We gatecrash weddings, (I hope not to be sued for trespassing) have great food, go on a long drive (yes, you can buy a bike too with your own money while still being inside the law school), go to the nearby gurudwara, do some sewa, be spiritually engaged and what not.

Now, do you think missing on the weekday fun is that hard? For me, it is not. I shouldn’t lie, initially, it was but with time I got disciplined. Life in a law firm will be the same. No different. You might be asked to work even on Sundays. Will that be difficult then? Else, just assume you are thinking of joining the bar, do you think your Sundays will be free? When will you prepare for Monday briefs? Let’s just discuss another aspect of being a part of the bench. Do you think Civil Judges (Entry Level) are free totally on Sundays? I can assure you they are not. Tons of cases are pending. I leave the rest for you to decide.

If life is this difficult outside then why not prepare ourselves from now on? I believe we all should be prepared to face long hours of work once we are out of the law school. This is the reality and we should accept it.

Enough on WHY you should think of working while still studying law. Let us talk about some HOWs.

Here are 5 ways for earning while you are still learning the law.

Assisting a lawyer near your college

Start interning with an advocate in the city. Try to accommodate three to four hours post-college. Things will be difficult in the first few months. Adjusting to the college hours will be hard. Chances are high that you might not even be getting a single penny for the first couple of months. Things will turn from the moment you start proving yourself from a mere learner to an asset. Do amazing research, learn the craft of drafting, specialise in any field of law and accelerate in that. Simply put, impress your advocate with your diligence and hard work and when the time is ripe, just convey your intention of working with the advocate for years to come while you are still in the college. I am sure, this will generate good opportunity. The months you’ve spent learning won’t go in vain. However, you have to be patient. I’ve seen people taking 5 to 6 months for making their first bucks. One can make anywhere between 4 to 8k a month while assisting an advocate.

The bigger question is how to excel in drafting skills? How to do better research? The sad news is, college does not teach you how to land directly to the point of research. You have to take the initiative yourself. Look for courses in contract drafting. Learning how to draft a contract is a must. I found this amazing course on contract drafting. It’s online. The course teaches you all the fundamental of contract drafting. Getting an edge on contract drafting is a must. This will help you be a champion in the place where you are interning.

Writing blogs

This is how I started. There are multiple platforms which accept paid write-ups. All it takes is effective writing. You cannot write anything under the sun on law and expect people to pay for random pieces of stuff. It requires skill and a complete thought process in writing. From framing the skeleton structure to writing about things which could be found nowhere on the internet. I call it the USP of an article. If you want to learn how to write legal articles you can apply for these courses. An inherent marking scheme of these courses depends on your ability to write and pursuing this course will make you an effective writer. You can also apply for an internship at iPleaders by sending your updated CV at [email protected].

Tutoring at CLAT tutorials

This option might be common to most of the readers. In every college, we have students working in a nearby coaching institute. This is perhaps one of the best options for those who are willing to pursue an LLM and go for a teaching career in law. Helping new tutorials to establish, even making question papers for them, study materials and helping in whatever way you can.

Nowadays, law as a career is being sought by a large number of people. CLAT takers are in search of best materials. This is one of the best online course on CLAT legal reasoning I’ve ever come across.

Helping startup’s with compliances

Startup’s are popping nowadays in large number. Today’s generation is that of entrepreneurship. So why not take advantage of the situation and help startups by incorporating them. Shifting them from the garage of the founders to the Register of Companies. How to do this?           

This can only be done when you yourself know what the law is and how to go about company’s registration. It is the practical side of the law. You can learn this by taking up this course. The course is designed by NUJS and is helping thousands of professionals.

Making Rent Agreements, Sale Deed, Contracts

Lawyers outside take thousands of rupees just for making a rent agreement. Think of the change you will bring if you do the same for 500 bucks. The question is how to draft rent agreements, sale deed and other contracts? You can take this course and learn amazing drafting skills. The course provides templates of major commercial agreements you need in day to day life.

Similarly, lawyers take thousands of bucks just for filing an RTI while this can be done for 10 bucks. Know how to file RTI, try to look for people or organisation working on RTI.

How to figure out more ways of making money while studying inside the law school

My favourite writer Mario Puzo, in his famous work the Godfather, puts, “A lawyer with a briefcase can steal more than a thousand men with guns”. However, there is a little twist to Puzo’s statement. It is not enough to have the briefcase, you need the papers inside the briefcase weighing more than all the bullets combined together.

Here is an amazing list of online courses which will definitely help you achieve your goal.

I am writing this for all law students who find it difficult to go for moot because of money issues. I am writing this for all those who are struggling with their college fees. I am a writer on weekdays and a music teacher on weekend. I teach students guitar in Patiala. Finding mentors in legal profession is an arduous task. During my internship at iPleaders I found 3 amazing mentors. Ramanuj, Gareema and Abhyuday. Mentors play an important part in building who you are. 

Please comment below and share your thoughts on doing part time job while studying law. I will make sure to answer all the doubts and queries. If you want to learn how to write amazing legal articles, you can reach out to me at [email protected] You can also share your thoughts about this article and other ways of earning while still learning inside the law school. ALL THE BEST AND HAPPY LEARNING.