Legal Aspects of Business Unit I Law refers to all the rules and principles that regulate our relationships

with other individuals and the State. Definition of Law A body of rules developed and enforced by the State in the administration of justice. Objectives of Law Basic rights to citizens, Peace & internal security, International relations, Socio-economic justice, Business, trade & employment, Social customs & practices, Crime & punishment. The Indian Contract Act , 1872 Contract- An agreement enforceable by law. Agreement Every promise and set of promises forming the consideration for each other. Promise A proposal when accepted becomes promise Social & Legal Obligations Only legal obligations are enforceable by law. (To be fulfilled) Classification By Enforceability Void Agreement- An agreement not enforceable by law Void Contract- Ceases to be enforceable by law by a subsequent happening/knowledge. Void able contract- Enforceable by law at the option of party/parties to contract Unlawful agreement Not approved by law, void ab initio(from the very beginning) Illegal agreement Activity involving crime, immoral or against public policy Unenforceable- Because of technical defects like no witness, less stamp duty etc. By Formation Express contract- Entered into by words spoken or written Implied cont Inferred by activities/conduct of parties or circumstances, not by words Quasi contract Imposed by law, not entered into by parties Principle is no one shall be allowed to enjoy a certain benefit at the cost of other. By Performance Executed contract Both parties have fulfilled their respective obligations. Executory contract Both are yet to fulfill their legal obligations Partly Executed contract One party has fulfilled & other has to fulfill. Essentials of a valid Contract

1. A valid Offer & Acceptance Offer must be precise & clear, Communicated to the proper person, Absolute & unconditional, In the prescribed mode and Before offer lapses. 2. Intention to Create legal Relationship- To make it legally binding. 3. Lawful Consideration (something in return) Both the parties must give & get something, which is real & lawful. Need not to be adequate, not necessarily cash / in kind and it may be even a promise to do or not to do something. 4. Capacity of parties Competent to contract- Age of majority, of sound mind and not disqualified by law (Insolvent) 5. Free Consent Willingness must be obtained freely. Not by force, suppressing facts, coercion, undue influence, fraud etc. 6. Legality of object- Object must not be illegal, immoral or opposed to public policy. 7. Agreement declared void By law it must not be valueless like restraint of marriage or trade. 8. Certainty of terms Unambiguous- Must be clear, precise & certain. 9. Possibility of Performance Must be possible to perform. 10. Legal formalities Complying with like writing, stamp duty, registration, certification, witness etc.

Difference Between Void & Voidable contract Void Contract Voidable Contract

1. Valid when made, but became 1. Valid until avoided/ rescinded invalid due to further happenings. by affected party. 2. Something beyond control of 2. Free consent is missing parties made it invalid like change of law, destruction of subject matter. 3. Can be enforced till avoided by 3. Cannot be enforced affected party 4. Third party cannot acquire rights 4. Scope for third party to acquire 5. No compensation rights over obtained things. 5. Affected party can claim damages

VOID AGREEMENTS-Unlawful object/consideration Object is forbidden by law Defeats the provisions of any law Is fraudulent Involves/implies injury to person/property of another Court regards it as immoral Court regards it as opposed to public policy (Harmful to the welfare of the public) ANY AGREEMENT WHICH IS NOT ENFORCEABLE BY LAW IS VOID. Void Agreement - Agreements with only social obligation, without consideration, meaning/terms uncertain, incapable of performance. Unlawful Agreement Restraint of marriage, trade, legal proceedings. Illegal Agreement Involve commission of crime, violate basic public policy or immoral in nature. Opposed to public policy Agreement with alien enemy, to stifle prosecution, Maintenance (financial assistance for legal action) & champerty (Similar assistance to recover money/property legally), Sale/transfer of Public Offices & Titles, Interest opposed to duty, Denial of parental rights, Restriction on personal liberty, Payment of dowry/ marriage brokerage, Restraint of marriage, trade & legal action. Wagering Agreement Betting Depends on happening of an uncertain agreement like lottery, horse racing. Essentials are uncertain event, to pay money/ moneys worth, no control over the event, each must stand to win or loose, each interested only in stake. NOTE: Insurance though similar to wagering but valid like a contingent contract. VOID AGREEMENTS Agreements Expressly declared void by law 1.Incompetent parties-11

2.Mutual mistake of fact - 20 3.Unlawful object/consideration- 23,24 4.Without consideration- 25 5.Restraint of marriage, trade, legal proceedings-26-28 6.Uncertain meaning-29 7.Wager-30 8.Contigent on Impossible events-36 9. Impossible Acts-56 10. Both legal & illegal objects- Illegal part is void-57 Essentials are Unconditional Proper time Proper place Opportunity to examine To proper person For whole of the obligation Payment in legal tender money PERFORMANCE OF CONTRACT A contract is performed when the parties to it, fulfill their respective obligations arising under it. Offer to perform / Attempted performance / Tender When the promisor offer to perform his obligation, sometimes promisee may refuse to accept performance. It is equivalent to actual performance and the promisor is not responsible for non-performance & even has legal right to take action against promisee. Who can perform-40 Promisor himself Person Authorized by the promisor Legal representative Third person Joint promisors Devolution of joint Rights/Liabilities 42-58 Transfer/passing of rights/liabilities from one person to another. Appropriation of payments-59-61 When a debtor owes different sums to different creditors and pays a particular sum, the question is Against which debt the payment be applied

Assignment of contract Transferring ones contractual rights/liabilities under a contract to a third person By act of parties By operation of law- 1. Due to death of a party 2. Due to Insolvency All rights/benefits under a contract not involving personal skill Can be assigned subject to all equities between original parties Sometimes writing is necessary like in actionable claims Cannot compel other party. Discharge of contact- When contractual obligations/rights come to an end results in termination of contractual relationship. Can be Discharged by 1.Performance- Actual/ Attempted 37 & 38 2.Mutual consent 3.Impossibility 4.Operation of law- By death, Insolvency or unauthorized material alteration 5.Breach6.Lapse of time- Specified period(limitation period) 2.Mutual Consent Novation-62 Substitution of new contract Rescission-62 Cancellation by mutual consent or by failure of one party Alteration -62 Contact is varied or changed Remission -63 Acceptance of a lesser fulfillment of promise Waiver Not to insist on performance Merger Inferior right merges with superior right 3.Supervening Impossibility - Impossibility arises subsequent to formation of contract,by Destruction of subject matter Death/ personal incapacity Change of law Declaration of war Change in state things forming the subject matter Note: Impossibility of performance is not an excuse ----- Difficulty/Commercial impossibility, Default of 3rd person, Strikes, lockouts & civil disturbances, Failure of one of the objects. 5. Breach 1. Actual breach- On the due date During Performance 2. Anticipatory Breach- Express Implied Remedies for Breach of Contract

 Breach takes place when a party to a contract fails to fulfill his obligations arising under it. Remedies 1. Rescission Right of a party to a contract to avoid his obligations.- Party rescinding has to restore any benefit and is entitled for compensation for damages if any. 2. Damages- Monetary compensation awarded to the affected party by the court for the loss suffered Ordinary damages-73 Arise naturally in the usual course of the things from the breach. Special damages During formation of contract if parties know some damages likely to result from breach, can claim with advance notice. Vindictive damages Exemplary/extraordinary Vindictive( revenge) in natureOnly in breach to marry & wrongful dishonour of cheques. Nominal damages Not for actual loss suffered but as a token of satisfaction for proving the wrong. Damages for Inconvenience & Discomfort, Loss of Reputation, Cost of Suit, Liquidated damages & penalty, Payment of interest. 3. Quantum Meruit ( as much as merited/ earned)- Payment in proportion of the work done. When Contract becomes void/ agreement is void-65, Does something without gratuitous intention-70, No specific remuneration is agreed, Contract is divisible & does not require complete performance for remuneration, Indivisible contract is fully performed but badly. 4. Specific performance Court may direct to perform as per contact when damages are not adequate remedy, not in a position to pay & actual damages cannot be determined 5. Injunction stay order Order of a court preventing a person from doing a particular act to restrain a person from doing what he promised not to do. Quasi-contract- Obligation created by law on a person in the absence of any agreement. Arises automatically when 1. Person receives a benefit that, by law, another is better entitled to receive. 2. Person receiving a benefit without paying for it.

Basic principle is a person shall not be allowed to enjoy a benefit unjustly at the cost of another. Quasi contract arises in following situations 1. Claims for necessaries supplied to a person incapable of contracting-68 2. Reimbursement of amount paid by a person on behalf of another-69 1. Obligation of a person enjoying the benefit of a non-gratuitous act (lawful, without intention to do it free and another should have enjoyed the benefit).-70 2. Responsibility of finder of goods-71- Finder has to take care as his own, try to find owner (Can sell the goods if goods are perishing, owner cannot be found normally, owner refuses to pay the lawful expenses, lawful charges amount to two third of value of goods found. 3. Liability of a person to whom money is paid by mistake/ coercion-72 The Sale of Goods Act, 1930 Definition 4(1) A contract of sale is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. Buyer- Person who buys or agrees to buy Seller Person who sells or agrees to sell Sale- If ownership is transferred from seller to buyer immediately. Agreement to sell Transferred in future or after fulfilling of certain conditions. Goods- All movable property other than actionable claim & money including stocks & shares, growing crops, grass & things attached to land. 1. Existing goods- Owned and possessed by the seller at the time of sale. Specific goods- Identified & agreed upon at the time of contract of sale Ascertained goods are those that are identified out of a mass of unascertained goods. Unascertained goods- Not identified & agreed upon- Only defined by description 2. Future goods- Seller doesnt possess at the time of contract but will acquire/produce afterwards. 3. Contingent goods Acquisition of goods by seller depends on some contingency. Essentials of Contract of Sale 1.Two parties 2. Goods are subject matter 3. Price in terms of money 4.Transfer of General Property in Goods 5. All essentials of a valid contract.

Hire-purchaseInstallment- Initially hire with down payment & purchase by paying in installments. Price- Consideration in terms of money- May be fixed during sale, Left to be fixed later in a agreed manner, Fixed in due course of dealing. If not buyer to pay a reasonable price depending on facts & circumstances Earnest- Any tangible given as a token of good faith& guarantee against performance. Contract for work & Materials- Sale of Goods act does not apply. Document to title of goods RR., Bill of Lading, Delivery order, Dock Warrant etc. Difference Between sale & Agreement to Sell Sale Agreement to Sell 1.Ow/s rights transferred immediately 2.Goods are destroyed, loss on buyer, even possession is with seller 3. Buyer fails to pay price, seller can sue 4. Seller cannot resell if in possession, if done defective title 5. Creates right to enjoy goods against the world jus in rem 6. Buyer becomes insolvent seller can get only proportionate dividend 7. Seller becomes insolvent, buyer can recover goods from OR 1.Ow/s Rights transferred in future 2.Goods destroyed, loss on seller even if possession is with buyer. 3.Seller can sue for damages only 4.In resale buyer gets good title if in good faith. First buyer can sue for damages only 5. Creates right to sue seller for damagesjus in personam 6. Buyer becomes insolvent before paying the price, seller not bound to part with goods 7. Buyer paid price, seller becomes insolvent buyer can get only rateable dividend & not goods

Transfer of title & Risk of loss Need for knowing the time of Passing of Property (Transfer of Title) are 1.Owner to bear the risk of loss 2.Action against third party can be only by owner 3.Sellers insolvency- Official Receiver can take possession from buyer, only if Ownership not passed.

4. Buyers insolvency- Official Receiver can take from seller, only if Ownership has transfered 5.Suit for price- seller can, only if goods have become property of buyer. Rules for Transfer of title / Passing of Property -Specific goods- Terms & Conditions will decide intended time to pass/transfer 19 -Unconditional Contract of Sale goods in deliverable state property passes when the contract is made even if time of payment/delivery is postponed.20 - Not in a deliverable state, then as soon as put into a deliverable state.21 - Goods in DS, but to be weighed / measured to determine price, until then p of P doesn't occur 22 2. -Unascertained goods No Passing of Property until ascertained. - Unconditional appropriation for goods in Deliverable State Passing of Property happens. Unconditional Appropriation if delivered to buyer/carrier / bailee for transmission without reserving the right of disposal. Sale or return Transaction- Use for particular time, if not satisfied return The property passes when goods sent on approval and any of the following takes place - When buyer conveys approval/acceptance - Does any act adopting transaction - Retains beyond fixed period. Seller reserves right of disposal, the property passes only if certain conditions are fulfilled By B of L /RR /Exchange Receipt Nemo Dat Quod Non Habet No one can give that which one has not got Person who is not the owner has no legal right to sell-Sale by non ownersExceptions are 1.Sale by Estoppel - Owner by conduct not stopping other showing Ow/s right. 2.Sale by Mercantile agent- If buys in good faith, because M.A does not have title usually (Brokers) 3.Sale by one of several joint owners- Has possession & buyer acts in good faith. 4.Sale by person in possession under a voidable contract.- Before avoiding & buyer in good faith (Ex: Fraud / coercion) 5. Seller in possession after sale Buyer in Good faith has a clear title 6. Buyer in possession before t of T- Good faith, good title 7. Unpaid seller Uses right of lien / stoppage in transit, title to buyer is good 8. Finder of goods Good title 9. Pawnee 10. Official Receiver -

Conditions & Warranties Condition is the stipulation essential to the main part of the C o Sale- Breached, can repudiate (reject/cancel/disown) Warranty is a stipulation collateral to the main purpose of the C of S Breached; only damages can be claimed. Implied Conditions 1.Title- Selling rights 2.Sale by Description Goods correspond to description (Not seen, seen but buys with description, packing is a part) 3.Quality or fitness- Buyer should examine for suitability of purpose (Makes known the purpose, abnormality, Under Brand name, Multi purpose buyer to tell the exact purpose) 4.Merchantable quality- Fit for the very purpose for which they are usually purchased. 5.Implied by customs 6.Sample Sale- sample should correspond to the bulk 7.Wholsemness- Good for health. Implied Warranties 1.Quiet Possession Enjoy quiet possession without disturbances- If not can claim damages 2.Freedom from Encumbrances- Goods are not subjected to any charge/ right in favour of third party- If so can claim damages 3.To disclose dangerous nature of goods- Duty of seller- Liable for damages if injured Caveat Emptor- Let the Buyer Beware Seller Need not to disclose all details. Buyer to thoroughly examine goods Exceptions are 1.Consent obtained by fraud- Knowingly conceals a defect which cannot be discovered on a reasonable examination 2. Sale by description 3. Conditions to quality or Fitness 4. Merchantable Quality 5. Conditions implied by custom 6. Sale by sample Performance of Contract of Sale- when the seller gives delivery of goods to buyer & buyer pays for the goods. Delivery Voluntary transfer of possession of goods from one person to another

Actual delivery- Physically handing over goods Symbolic Bulky goods- a key is given for a car sold Constructive Third person in possession acknowledges to buyer that he holds goods on behalf of buyer. Rules regarding delivery Rights of Buyer 1.Have delivery as per contract 2.Not right quantity, Can reject goods 3.Not bound to accept delivery in installments 4.If sent by sea buyer to be informed ins 5.Right to examine 6.Against seller for breach- Claim damages, recover price paid, specific performance, Damages for breach of implied warranties, Repudiation of contract, Claim interest Duties of buyer 1. .Accept goods & pay for it as per contract 2. Apply for delivery 3. Demand delivery within a reasonable time 4. If specified, accept delivery in installments 5. Take risk of deterioration necessarily incident to course of transit. 6. Refuses to accept goods, duty to inform seller 7. Take delivery within reasonable time 8. Seller already passed Ownership rights, pay the price 9. Wrongfully refuses to accept, Pay compensation Rights of an Unpaid seller- Price not paid/ Negotiable Instrument given but dishonoured Rights against things- rights in rem 1. Right of Lien-To retain possession of goods Possession is important, Not affected even if parted with title documents, No Express exclusion of Right of Lien, Only for price & not for other charges, Partly delivered Right of Lien in reminder goods. 2. Termination of Right of Lien- If delivered to bailee/carrier, Buyer lawfully obtains possession, waiver. 3. Right of Stoppage in Transit- stopping goods in transit to regain possession when buyer has become insolvent & goods are in transit -can be done by taking actual possession or giving notice of his claim to carrier 4. Right of Resale Goods are of perishable nature &

Given notice of his intention & buyer not paid price within reasonable time (If loss can claim as damages for breach & if profit no need to give) 5. Right of withholding Delivery Rights against buyer personally- rights in personam Suit for price, Damages for non-acceptance, damages for repudiation, Suit for Interest. AUCTION SALE 1. If put up in lots, each lot separate Contract o Sale, 2. Sale is completed only by fall of hammer & until then bidder can revoke, 3. Right to sell may be reserved expressly, 4. Not notified for sale no one can bid for it. 5. Reserve/upset price can be notified, 6. Seller makes pretended bidding to raise price voidable. Knock out is legal if no intention to cheat third party. (Knock out is forming groups to bid & share profits) Negotiable Instruments Act, 1881 Negotiable Transferable by delivery Instrument Written document by which a right is created in favour of some person Nature Can be transferred by mere delivery, good title even if previous title is defective & can sue in his own name Characteristics/Requisites 1. Payable to order/ bearer 2. Freely transferable- by delivery/and endorsement 3. Presumption as to holder- every holder is holder in due course 4. Title of holder in due course Free from all defects if in good faith, before maturity for valuable consideration. 5. Presumption as to consideration Made, drawn, accepted, endorsed, negotiated or transferred for consideration (date, stamp) Act deals with only Promissory Notes, Bill of Exchange and Cheques. Promissory Note- An instrument in writing containing an unconditional undertaking, signed by the maker to pay certain sum of money only to or to the order of a certain person/bearer Requisites are In writing- No oral endorsement- clearly showing unconditional payment of the sum

Promise to pay must be unconditional Promise to pay in terms of money only- Even additional goods, invalid Signed by the maker-To Authenticate- sign can be anywhere Payee must be certain Must contain a promise to pay- Promise word is not necessary- Payable on demand implies a promise. Other formalities Sufficiently stamped and cancelled with sign across by maker

Bill of Exchange - An instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay certain sum of money only to or to the order of a certain person/bearer Requisites1. In writing 2. Must be money to the payee- Drawer orders the drawee to pay money to the payee, unconditionally 3.Drawee must sign for acceptance- can sign any time after issue of bill. 4. Drawer, Drawee(acceptor) & Payee- Necessary parties are to be specified with certainty. Cheques - Bill of exchange drawn on a specified banker & payable only on demandNo need for acceptor including truncated/electronic cheque. Bearer cheques- so payable or blank endorsement Order cheques So payable & not transferable Crossed cheques Only collected through a banker Crossing of Cheques- By drawing two parallel transverse lines across the face with/without words General Left top corner, two lines without words Special Entry of the name of the banker with/without words Restrictive A/c Payee, Not negotiable markings- If not paid to account, can be held liable on guilty of negligence. Cheques include 1. Electronic cheque Amendment Act 2002- Cheque which contains the exact mirror image of a paper cheque & is generated, written and signed by a secure system ensuring minimum safety standards with the use of digital signature and asymmetric crypto system

2. Truncated cheque Which is truncated during clearing cycle & paying immediately on generation of an electronic image for transmission substituting the physical movement of the written cheque. Truncated- shorten by cutting top or end

Transfer of NI 1. Transfer by Negotiation- Instrument is transferred by one party to another, so as to constitute the transfer to the holder thereof. Negotiation by delivery- Instrument payable to bearer is negotiable by delivery thereof. Negotiation by Endorsement & Delivery Instrument payable by the holder by endorsement & delivery thereof 2. Transfer by Assignment- Person transfers his right to receive the payment of a debt. Endorsement Writing the name of a person on the face/back or slip of paper attached to NI. Presentment of a NI - Showing an Instrument to the drawee, acceptor or maker for acceptance(BoE), sight(PN) or payment(NI). Presentment for acceptance- General/Qualified Honouring- Paying or accepting for payment Dishonour By Non Acceptance1. Not accepted within 48 hrs2. Several drawees & all have not accepted 3.Presentment for acceptance is excused & bill is not accepted 4.Drawee incompetent to contract 5. Drawee gives conditional/qualified acceptance 6. Drawee is fictious & could not be found after reasonable search Dishonour by non-payment- Maker of PN/ Acceptor of BoE/ Drawee of Cs makes default in payment. Even if presentment is excused/ Instrument overdue remains unpaid. Notice of Dishonour- Holder informing the parties about non-payment -Within reasonable time in oral/writing or delivered by post.

Noting- A convenient mode of authenticating the dishonour- A minute recorded by a Notary Public- Fact, Date, Reason of dishonour & Notary bill are compulsory & attached to the NI- Not a must in inland bills.

Protest- Certified by Notary after recording the minute - evidence for legal actionsprima facie evidence. Discharge of NI-Discharge of NI or Discharge of Liabilities of parties 1. By Payment 2. By acceptor becoming holder- In his own right at or after maturity 3. By Renunciation-(waiver) By giving up the right- In writing & NI is surrendered to the party primarily liable. 4. By Cancellation- Holder cancels name of maker/ endorser/acceptor with intent to discharge him. 5. By discharge like a simple contract. In addition discharge of liabilities of parties can be effected by By releasing the party specifically By allowing drawee more than 48 hours By non presentment of cheque By operation of law Insolvency, Order of release, Merger ( Order of payment), Lapse of Time By material alteration Liabilities of Parties Drawer- BoE/Cheq- Compensate if notified of dishonour. Drawee Chq- Compensate if rightful payment is dishonoured. Maker/ Acceptor- Primarily liable- Compensate Endorser- Liable to subsequent holders before maturity. Prior parties are liable to holder in due course. HOLDER IN DUE COURSE ALWAYS HAS GOOD TITLE & ALL PRIOR PARTIES ARE LIABLE TO HIM Parties to NI Minor- Can draw, indorse, deliver and negotiate without binding himself- others are liable Persons incapable to contract- Void NI Corporations- Trading Co has the implied power- others only if specifically given by Memorandum of Association/Articles of Association. Agents- Per pro sign/ writing name of principal Partners- Binding on co-partners Hindu joint family- Karta represents all members-Minor members liable for their share only, not personally. Legal Representatives Liable to their extent/ similar to principal

Parties to NI 1. PN Maker, Payee, Holder, Endorser, Endorsee 2. Bill of Exchange - Drawer, Drawee, Acceptor, Payee, Holder, Endorser, Endorsee, Drawee in case of need, Acceptor for honour 3. Cheq- Maker, Payee, Holder, Endorser, Endorsee, Drawee Contract of Agency Agent A person employed to do an act for another or to represent another in dealings with third persons. Principal Person for whom such act is done or who is represented. Nature Express/implied Agreement , Competency of principal, consideration not necessary. Creation of agency 1. Express appointment 2. Implied agreement-(1) Agency by estoppel, (2) Holding out (3) Ratification Kinds of Agents 1. Special Agent 2. General Agent 3.Universal Agent By nature of work 1.Mercantile-selling/buying, consigning,raise money Factors- Possession of goods given for sale Broker- No possession, to find buyer/seller Auctioner- Seller by auction Commission agent Del-credere agent- Responsibility of ensuring payment is made by parties Banker 2. Non mercantile- Insurance, solicitor, guardian, promoter, estate agent, wife etc. Duties of an Agent 1. Duty to execute mandate- Perform work as agreed 2. Follow instructions of the principal3. Reasonable care & skill 4. .Render proper accounts 5. Communicate with principal 6. Not to deal his own account 7. Not to make secret profits. 8.Remit sums 9. Not to delegate authority

10. Protect interest of principal on his death/insanity 11.Not to use agency information against principal 12.Not to set up adverse title Rights of an Agent 1. Right to retain money due to himself 2. Receive remuneration 3. Right of Lien 4. Right to Indemnity Duties of Principal 1.To indemnify the agent against consequences of all lawful acts, 2. acts done in good faith, 3. any injury caused by principals neglect. 4. To pay commission or other remuneration. Rights of Principal 1.To see that agencys business is conducted as per his instructions & to be compensated for any loss by deviation. 2.Direct compensation for agent negligence, want of skill or misconduct. 3. To get proper account when demanded 4. To repudiate transaction, if material fact is concealed or when dealing on his own account by the agent. Delegation is not permitted but with exceptions- sub agent- substituted agent. Liabilities of Principal & agents w.r.t Third Party Named Principal- existence & name disclosed by agent 1. Liable for agents acts, within scope of his authority 2. When exceeding authy, that part within authy is liable 3. Bound by information given to agent 4. Belief based, then Estoppel 5. Liable for misrepresentation or fraud by agent Unnamed principal- Principal liable unless a trade, custom or a term which makes agent personally liable Undisclosed Principal-Third party may sue either /both if principal is subsequently discovered or he intervenes. Principal may ask for performance by allowing all payments to agent. Agent has all rights against principal, but personally liable to third party. Third party can sue either or both, principal is disclosed before completion of contract he may refuse to fulfill on the ground that he would not have entered into the contract, can set off against agent & principal may ask performance as with agent and third party.

 Termination of Agency By act of parties 1.By agreement between principal & agent 2.By revocation of agents authority by principal - Operates prospectively- future actions only - Reasonable notice if for a fixed period -Compensation for revocation without notice& after reasonable time - Renunciation by agent similar to principal By operation of law 1.Completion of agency business 2.Death/ insanity of agent/ principal 3.By insolvency of principal 4. By expiry of time 5. By destruction of subject matter 6. By principal becoming an enemy 7. By dissolution of a company 8. Termination of sub-agents authority by terminating authority of agent Unit II The Company Act, 1956 A company is a group of persons who have come together or who have contributed money for some common purpose and have incorporated themselves into a distinct legal entity in the form of company. Characteristics 1.Separate Legal entity 2.Limited Liability 3.Perpetual Succession 4.Separate Property 5.Transferability of Shares 6.Common Seal 7.Capacity to Sue & being Sued 8.Lifting/ Piercing the Corporate Veil 9.Registration- 10 for banking business & 20 for others-Exceptions- JHF Business, Religious/social/charitable without profit motive, exceeding the limit to be registered under any Law. 10.Consequences of Non-registration 11.Public co- minimum 7 members & pvt co 2 members

Types of Companies 1.Public co must have 5 Lacs minimum paid up capital 2. Pvt Company- By its AoA limits liability Difference between Private Co and Public co Private Co Public co 1.Min 2 & Max 50 members 2.Transfer of shares strictly regulated by its articles 3.Cannot invite public to invest in shares 4.Use Pvt ltd at the end 5.Some privileges 6.Min 2 directors 7.No restriction on appointments 8.Less legal controls 9.Directors can borrow from co 10.Min Paid up 1 lac 1.Min 7 & Max unlimited 2.Freely Transferable 3. Can invite 4.Use Ltd 5.No privileges 6.Min 3 Directors 7.Director has to register consent 8.Strict regulations 9.cannot borrow 10.Min 5 lacs

3.Limited Co- Limited by shares means liability is limited to the amount of uncalled share capital-Limited by guarantee means members by MoA guarantee some payment in case of liquidation. 4. Unlimited Co- Liabilities are unlimited 5. Holding & subsidiary co- Subsidiary if composition of Bod can be altered/ other co holds more than half in face value of share capital. 6. Government Co- More than 51% of paid up share capital held by any Govt 7. Foreign Co- Incorporated outside India & established business in India. Promotion of a company Entire process by which a Co is brought in to existence Promoters are the persons who conceive the Co & invest the initial funds excluding lawyers, solicitors, CAs etc. Basic duties are not to make secret properties & make full disclosure of all facts of transaction with the Co. Remedies available to Co against promoters are canceling any contract made by promoter with recovery of profit if any, retaining property & Suing for breach.

Rewards for promoters are Remuneration, May have profits with full disclosure, Buy / Sell his property in shares, Commission on shares sold & AoA may provide a fixed sum as benefit. INCORPORATION BY REGISTRATION As per the type of Co promoters has to prepare some documents. I Memorandum of Association- Constitution or Charter of the Co. 1. Name clause- Name of Co with Ltd/ Pvt Ltd as required, without resembling/identical/suggesting State connection or patronage. 2. Domicile clause- Location/ Regd office address of Co in Form 18 to Registrar of Companies for registration on the day/ within 30 days -Name to be written in English & local language- any change of address within state with permission from Regional Director & special resolution in Co- To other state special resolution & permission of Co Law Board. 3. Objects clause- Specifies the activities which a Co can carry on & cannot.includes Main objects, Incidental/ancillary & Others if any Other than trading Cos not confined to one state territories to be specified. Doctrine of the Ultra-vires Transactions outside the objectives & not reasonably incidental to attainment of objectives are void- No rights & liabilities arise out of it- Co cannot sue/ be sued 7 directors are personally liable. Exceptions are acts of intravires nature which can be modified by amending articles / by resolutions to validate it. 4. Liability clause Liabilities if limited to be specifically stated as amount in case of liquidation. Exceptions are increased liability by altering MoA/AoA, members agree with registrar to make it Unlimited liability and No of members decreased to lower than minimum & operated fo more than 6 months. Capital clause Amount of share capital with type 7 no of shares- increase is possible with suitable modifications of MoA. 6.Association clause. Declaration by the persons subscribing to MoA about desire to form Co, agree to take shares as specified by promoters. II Articles of Association Rules & regulations of indoor management- A contract between Co & members and within members to abide by the rules & regulationsRights & Duties are also specified. Includes 1.Powers, duties, rights & liabilities of Members/ directors 2. Rules for meetings, Dividends, Borrowing powers of Co, Call on shares, Transfer, transmission & forefeiture of shares, Voting powers. Articles can be amended by resolutions by members.

Difference Between MoA & AoA MoA

AoA

1.Rules & regulations regarding internal management of Co 1.Charter of Co constitution & 2.Subsidiary to superior MoA Activities 3.Pub Co limited by shares may/ may 2.Fundamental not have it 3.Must have it 4.Altered easily by special resolution. 4.Alteration is difficult & strictly 5.Doctrine of Indoor management regulated Outsiders have a right to assume that the Co affairs are as per rules & regulations only.This limitation is DIM. III Registration of a Co- The documents prepared, vetted, stamped & signed must be filed with Registrar of Cos with agreements for directors, MDs, secretaries- For Public Co Form 18 Address of Regd Office, 29 written consent of directors & 32 Details of directors. IV Certificate of Incorporation Birth certificate- Issued by registrar to prove Cos existence- Cannot cease to exist unless dissolved. V Commencement of Business- pvt Co without share capital can start business immediately- Pub Co with share capital minimum no of shares allotted, their payment by public & directors, Declaration that no money is payable to share holders and Form 19 signed by a director/ CS declaring all formalities are carried out( Form 20 For without Prospectus) V Prospectus Document to show the soundness of Co to the public while inviting for subscribing of shares informing about Financial background, activities, future programmes, Nature of investment, Element of risk involved etc.- definition includes any invitation to subsribe/ deposit by public including circular, notice and advertisement. Contents- with date of publication, registered with Registrar of Cos with sign of director. Matters specified in Part I, Reports as in Part II subject to provisions of Part III of schedule II. Misstatements in the Prospectus.Person authorising the prospectus has to ensure that it contains true state of affairs & does not give any false pictures.- Includes statements which are Untrue, Produce wrong impression, misleading, Concealing material facts & Omitting facts.

VI Liability- Director, Person authorised himself to be named in prospectus as director/ agreed to become a director, Promoter & any other who authorised issue of it. 1.Civil liability- 1.Compensation for any loss/ damage to every person subscribing 2. Damage for deceit/fraud 3. Rescission of contract for misrepresentation. 4. For noncompliance to matters as in Schedule fine up to Rs.50,000 5. Liability under general Law 6. Penalty for issuing prospectus without registration up to Rs 50,000 2.Criminal liability every person authorising issue of prospectus is punishable for untrue statements with imprisonment up to 2 years or fine up to Rs 50,000 or both. Statement in lieu of prospects to be issued at least 3 days before allotting shares. VI Restrictions- Without consent by general meeting of Pub Co/Subsidiary of Pub Co cannot 1.Sell, lease or other wise dispose off undertaking of Co 2.Remit/ give time to remit any due by a Director 3.Invest other than in securities any compensation received by Co 4.Borrow money beyond aggregate paid-up capital 5.Contribute to charitable funds not directly related to business exceeding 50,000 Rs/ 5 % of Average profit of 3 years Duties of Directors 1. Fiduciary obligation - Relationship of an Agent of Co based on mutual trust & confidence 2. Duty of care Careful to make more profits 3. Attend board meeting Regularly to attend- consecutive absent in 3 meetings/ 3 months without leave liable to be removed from board 4.Cannot delegate powers (like an agent) 5. To Disclose interest- Direct/ indirect interest in arrangement/ contract proposed/ existing must disclose interests in a meeting. Liability of Directors 1.Liability to Outsiders While acting for Co not personally liable, Act on their own name personally liable, Ultra vires both not liable, Acting on behalf of Co but fraud personally liable. To Third persons Mis-statements in prospectus, Irregular allotment, Failed to repay application money within 10 weeks of subscription close,/ within 10 days of not receiving minimum subscription within 120 days. 2. Liability to Co- Ultra-vires acts liable to make good the loss, Negligence of duties/powers/care, Breach of trust, Misfeasance9 Lawful acts done in wrong manner).

VIII MEETINGS- Statutory- once in life time (within 1 to 6 months of commencement) for Ltd Cos, AGM -within 18 months from commencement, every year with not more than 15 months gap Extraordinary GM- As required for special business Class meeting- For particular type of share holders IX Winding up of Company Assets are realised to pay the debts Dissolution is after winding announcing the death By court- Based on petitions by Co, creditor, shareholder,Registrar, CG authorised persons, Official liquidator when resolution is passed, not commenced business within 1 year, Not fulfilling statutory obligations, members falling below minimum, Unable to pay debts, court opines it is just & equitable to by creditor/member.

UNIT iii 1. THE FACTORIES ACT, 1948: OBJECT AND SCOPE: The factory Act regulates condition of work (health, safety, etc) in factories, it safeguards the interest of workers and it is for the welfare of factory workers. This Act is applicable to any factory in which ten or more than ten workers are working. The factory Act has provisions in respect of Employee health and safety. Hours of work. Sanitary conditions and wholesome work environments. Employee welfare. Leave with wages, Etc DEFINITIONS FACTORY A place where in ten or more persons are working and in which a manufacturing process is going on using electricity, steam, oil, etc(20 or more if without power) MANUFACTURING PROCESS A process for Making, Altering, Repairing, Finishing, Packing, Washing, Cleaning, or otherwise treating a substance for its use, sale, transport, disposal, etc Pumping oil, water or sewage, or

 Generating, Transforming, or transmitting power etc Composing types of printing, printing for letterpress, lithography, photogravure or other similar process or book binding. Constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels. WORKER Worker means a person employed directly or through agency, whether for wages or not, in any manufacturing process or in cleaning any part of the machinery or premises used for a manufacturing process or in any other kind of work incidental to or connected with, the manufacturing process or the subject of manufacturing process. ADULT A person who has completed his eighteenth year of age. CHILD A person who has not completed his fifteenth year of age. POWER Electrical energy or any other form of energy which is mechanically transmitted and is not generated by human or animal agency. MACHINERY It includes Prime movers: engine, motor, etc Transmission machinery: shaft, wheel, drum, pulley, belt, etc And all other appliances whereby power is generated transformed or transmitted. OCCUPIER OF FACTORY A person who has ultimate control over the affairs of factory and where the said affairs are entrusted to a managing agent, such agent will be considered as the occupier of the factory. INSPECTORS State government appoints chief inspector and other inspector who, May enter any factory and May make examination of premises, plants, machinery and any document related to factory. CERTIFYING SURGEONS State government may appoint quality medical practitioners as certifying surgeons for The examination and certification of young workers and The examinations of workers engaged in dangerous occupation or processes. THE MAIN PROVISIONS OF THE ACT ARE AS FOLLOWS HEALTH 1. CLEANLINESS Removal and disposal of dirt and refuse from floors, benches etc everyday.

2. 3.

4. 5.

6.

7.

Washing of floors of work room at least every week, using disinfectant. Effective means to drainage to avoid collection of water, etc on the work floor. All inside walls and partitions, all ceiling tops of rooms, passage and staircase. To be repainted once in 5 years If they are already painted, and To be white washed and the white washing to be carried out at least once in 14 months. DISPOSAL OF WASTE AND EFFLUENTS Effective and suitable arrangements should be made for the disposal of waste and effluents due to the manufacturing process. VENTILATION AND TEMPERATURE In every factory, effective and suitable provision shall be made for securing and maintaining in every workroom, Adequate ventilation by fresh air circulation, Suitable temperature to provide conditions of comfort and prevent injury to the health of workers. DUSTS AND FUMES Employer shall take necessary steps to keep workrooms free from dust or fumes offensive or injurious to the health of the worker. ARTIFICIAL HUMIDIFICATION In factories (e.g. textile) where humidity of air is artificially increased, state government may make rules Prescribing standards of humidification. Regulating the method of artificially increasing humidity. Directing prescribed test for determining humidity and Prescribing method for achieving adequate ventilation and cooling the air in workroom. The water employed for humidification shall be form a source of drinking water. OVERCROWDING No work room should be overcrowded to an extent, which is injurious to the health of workers. The minimum space provided for a worker should be 4.2 cu.m. ( 4.2 meters above the floor level not to be calculated). LIGHTING Light whether artificial or nature or both, should be sufficient and suitable in all workrooms. Sky light and glazed windows for lighting the workrooms should be kept clean and unobstructed.

 Glares and shadows which cause eye strains or risk, accidents should be prevented. 8. DRINKING WATER Wholesome Drinking water should be available at suitable points conveniently situated in the factory. All such points shall be legibly marked drinking water. No such points shall be located within 6 meters of any latrine, urinal, etc If more than 250 workers, cooled water to be provided. 9. LATRIENS AND URINALS Sufficient latrines and urinals accommodation of the prescribed types should be conveniently situated and accessible to workers. Separate enclosed accommodation shall be provided for male and female workers. Latrines and urinal should be adequately lighted, ventilated and maintained clean at all times. State government may prescribe the number of latrines and urinals to be provided in proportion to the number of workers. 10. SPITTONS There should be a sufficient number of spittoons at convenient places and maintained in clean hygienic condition No worker shall spit except in a spittoon and if a person contravenes this, he shall be published with a fine not exceeding rupees five. SAFETY 1. ENCASING AND FENCING OF MACHINERY In every factory the following shall be securely fenced as they are in such position as to be safe for each worker. Moving part of prime mover and flywheel connected to it. The head race and tail race of water wheel and water turbine. Any part of stock bar projecting beyond the lathe head stock. The following parts should be securely fenced by safeguard which shall be kept in position while the parts are rotating. Part of electrical generator, motor, etc Part of transmission machinery. Dangerous parts of any other machinery. 2. WORK ON OR NEAR MACHINERY IN MOTION

 Any part of machinery if it is required to be examined while it is in motion shall be examined only by a specially trained adult male worker wearing tight fitting clothing. No woman or young worker shall be permitted to clean, lubricate or adjust any part of moving machinery which involves a risk of injury. 3. EMPLOYEMENT OF YOUNG PERSONS ON DANGEROUS MACHINES No young person shall work on dangerous machinery. Unless He has got sufficient training to work at that machine; and He is under adequate supervision of an adult experienced worker/supervisor. 4. HOISTS AND LIFTS Every hoist and lift shall be Of good machinery construction, adequate strength and sufficiently protected and fitted with gates; and Adequate maintained and periodically (at least once in six months) examined. o Hoists and cranes meant for carrying person shall have at least two ropes or chains separately connected with the cage. Each rope or the chain with its attachments shall be able to carry weight of the cage together with its maximum load (e.g. weight of persons). o Device should be provided to support cage in the event of breakage of the ropes or chains. 5. LIFTING MACHINES, CHAINS, ROPES AND LIFTING TACKLES Factory cranes and other lifting machines such as crab, winch toggle, pulley block, etc.., shall be of good construction, sound material, and adequate strength, properly maintained and thoroughly examined at least once a year. 6. PRESSURE PLANTS It should be ensured that the working pressure of such parts does not exceed the safe value. 7. FLOORS, STAIRS AND MEANS OF ACCESS TO DIFFERENT PLACE They should be of sound construction, properly maintained and provided with handrails. 8. PITS, SUMPS, OPENINGS IN FLOORS, ETC Shall be either securely covered or suitably fenced. 9. EXCESSIVE WEIGHTS No person shall be asked to lift, carry or move any load so heavy as to cause him an injury. 10. PROTECTION OF EYES

To protect the eyes of workers from the flying particles (such as in fettling, revert cutting, scale removal etc) or from exposure to welding rays, each worker shall be provided with effective screens or suitable goggles. 11. PRECAUTIONS AGAINTS DANGEROUS FUMES No person shall be allowed to enter any confined space, chamber, tank, pit, etc in which dangerous fumes are likely to be present so as to involve risk to the entering person. 12. EXPLOSIVE OR INFLAMMABLE DUST, GAS, ETC If a manufacturer process is producing dust, gas, or vapors this can explode on ignition, The plant should be effectively enclosed; and Such dust, gas, fumes, etc should not be allowed to accumulate. 13. PRECAUTIONS IN CASE OF FIRE Every factory shall be provided with means as follows and others to help escape in case of fire; Fire warning signal. Unlocked doors and opening towards outside the workroom. Free passageways and easily open able windows. 14. Safety Officers should be appointed if 1000 or more workers are employed. 15. Hazardous processes are those where, unless special care is taken would cause material impairment to the health of the persons engaged or connected with, result in the pollution of general employment. WELFARE 1. WASHING FACILITIES Washing facilities adequately screened for male and female workers should be provided in the factory. Washing facilities shall be easily accessible and kept clean. 2. FACILITIES FOR SITTING Suitable sitting facilities shall be provided for all workers obliged to work in standing position so that they may take rest, if an opportunity occurs in the course of their work, without affecting the work. 3. FIRST AID APPLIANCES For every 150 workers, minimum one fully equipped first aid box shall be kept available during all working hours. A factory employing more than 500 workers shall have a proper equipped ambulance room. 4. CANTEENS A canteen shall be provided in each factory in which more than 250 workers are ordinally employed.

5. SHELTERS, REST ROOMS AND LUNCH ROOMS Every factory in which more than 150 workers are ordinarily employed, adequate, suitable, clean, sufficiently lighted and ventilated rest and lunch rooms shall be provided. 6. CRECHES Every factory shall provide clean, adequately lighted and ventilated rooms for the use of children (under the age of 6 years) of women workers, if the number of such women workers exceeds 30. 7. WELFARE OFFICERS Every factory employing 500 workers are more shall employee welfare officer. The state government may prescribe the duties, qualification and conditions of service of welfare officers so employed. WORKING HOURS 1. WEEKLY HOURS An adult worker shall be required to work in the factory for not more than 48 hours a week. 2. WEEKLY HOLIDAY No adult worker shall be required to work on Sunday unless the manager substitutes Sunday by a holiday one or three days immediately before or after Sunday. 3. DAILY HOURS No adults workers shall be required to work for more than nine hours on any day. 4. INTERVALS FOR REST No adult workers shall be required to work for more than 5 hours continuously, i.e., after five hours; the worker shall have a rest for at least half UN hour. 5. EXTRA WAGES FOR OVER TIME If a worker works for more than nine hours on any day or for more than 48 hours in any week, he will get his overtime wages at the rate of twice his ordinary rate of rage. (I.e. basic wages and allowances) 6. RESTRICTION ON DOUBLE EMPLOYEMENT No adult worker shall be allowed to work in a second factory on any day on which he has already been working in one factory. 7. REGISTER OF ADULT WORKERS Factory manager shall maintain a register of adult worker (stating their names, nature of work, group work etc..,) and make it available to the inspector at all times during work hours. 8. RESTRICTION ON EMPLOYEMENT OF WOMEN No women shall be employed in any factory except between the hours of 6A.M and 7P.M EMPLOYEMENT OF YOUNG PERSONS 1. PROHIBITION OF EMPLOYEMENT OF YOUNG CHILDREN No child under 14 years of age shall be allowed to work in any factory.

2. NON ADULT WORKER A child who has even completed his 14 years of age shall not be allowed to work in a factory unless he carries while at work a token giving reference to certificate of fitness. 3. CERTIFICATE OF FITNESS It is a certificate of fitness for working in a factory which is given to a young person by a certifying surgeon after examining him (i.e. the young person). 4. WORKING HOURS FOR CHILDREN No child shall be permitted to work For more than four and half hours on any day; and During the night, (i.e. 10P.M to 6A.M). REGISTER OF CHILD WORKERS Indicating their particulars and nature of work shall be maintained by the factory manager and be made available to inspector at all times during hours of work. ANNUAL LEAVE WITH WAGES A worker who has worked for 240 days or more during a calendar year shall be permitted during the subsequent calendar year, leave with wages for a number of days at the rate of o One day for every 15 days of work performed by a child worker. o One day for every 20 days of work performed by an adult worker. o A worker interested to take leave shall apply 15 days in advance. Advance Payment of Wages can be claimed if leave allowed is not less than 5 days for child and not less than 4 days for adult worker. SPECIAL PROVISIONS DANGEROUS OPERATIONS Where the state government feels that any operation is of serious risk or bodily injury, poisoning or disease, it may take rule; Declaring the operation dangerous; Stopping employment of women and children in this operation; Providing protection of all concerned with that operation; and Periodical medical check up of all concerned with that operations, etc... NOTICE OF ACCIDENT An accident causing death or bodily injury due to which the worker cannot work for a period of 48 hours or more immediately after the accident, shall be brought to the notice of such authorities, within such time as may be prescribed. NOTICE OF DIESEASE If a worker is suffering from any disease specified in the schedule, a report immediately shall be sent to chief inspector giving particulars of the worker and the disease from which he is suffering.

POWER TO TAKE SAMPLES An inspector, during working hours, after informing the manager may take sample of any substance being used in the factory. PENALITIES AND PROCEDURES GENERAL PENALITY FOR OFFENCES In case of any contravention of any of the provisions of this Act, the occupier and manager shall each be guilty of an offence and punishable with up to 2 years of imprisonment or fine up to Rs. 100,000 or both. If contravention continues after conviction, there will be a fine of Rs. 1000 per day After being convicted for an offence, if the person does contravention of the same provision again, he shall be punishable with imprisonment up to 3 years, a fine up to Rs. 10000 to 3 lacks or both. PENALITY FOR OBSTRUCTING INSPECTOR An Occupier/Manager shall be punishable with imprisonment up to 6 months or fine up to Rs. 10,000 or both. o Fails to produce registers or other documents on demand by inspector; and o Prevents any factory worker from being examined by the inspector. OFFENCE BY WORKER If any worker contravenes any provisions of the Act, he shall be punishable with fine up to Rs. 500. APPEALS An Occupier/Manager on whom a written order by an inspector has been served under the provisions of the Act may within 30 days of the service of order, appeal against it to the prescribed authority. OBLIGATIONS OF WORKERS No factory worker will misuse any appliance provided for the purpose of securing health, safety and employee welfare. A worker who contravenes this provision shall be punished with up to 3 months imprisonment or a fine of Rs. 100, or both. RESTRICTION OF DISCLOSURE OF INFORMATION No inspector will ever disclose any information relating to manufacturing processes, etc..., which comes to his knowledge in course of his official duties. An inspector who does so shall have up to 6 months of imprisonment, or a fine of Rs. 1000 or both. 2.THE PAYMENT OF WAGES ACT, 1936 (AMENDED UP TO 1982) AIM To regulate the payment of wages to persons employed in industry and drawing less than Rs. 1000 per month. This act is about.

The date of payment of wages; and Deductions (fines or otherwise) from wages. DEFINITION 1. INDUSTRIAL ESTABLISHMENT It means any, Motor transport service carrying passengers or goods or both on hire. Air and water transport service. Mine or oil field. Workshop, etc 2. WAGES It includes all remuneration (salary+ allowances, etc..,) payable to an employee in respect of his employment. Wages also includes over time remuneration, bonus, gratuity, pension, provident fund contribution by the employer, etc RESPONSIBILITY FOR PAYMENT OF WAGES -An employer shall be responsible for the payment of wages to his entire employee. -An employer shall fix wage period (not exceeding one month) by which he shall pay wages to his employee. -If the number of employees is less than one thousand, wages have to be paid before the expiry of the seventh day after the last day of wage period. In the other case, payment shall be made before the expiry of 10th day after the last wage period. -Wages shall be paid on working day. -Wages shall be paid in current coins or currency notes or in both. DEDUCTIONS FROM THE WAGE Only those deductions as authorized by the payment of wage Act will be made from the wages of an employee. Deductions may be such as, o Fines; o Those for absence from duty; o Due to damage to or loss of goods; o For house accommodation supplied by employer; o For amenities and services supplied by the employer; o For recovery of advance and loan given to the employee; o For income tax. o Provident fund and o Those by the order of the court. IMPOSITION OF FINES

 Fine shall be imposed only after an employee has been given an opportunity of showing cause against the fine. Total fine shall not be more than an amount equal to 3% of the wages payable to an employee in respect of that wage period. No fine will be imposed on an employee below 15 years of age. Every fine shall be imposed on the day of the Act and shall be recovered within 60 days from the day on which it was imposed and that too in one installment only. All fines and their realization shall be recorded in a register and kept by the employer. ENFORCEMENT OF THE ACT Inspector of factories or otherwise appointed shall be responsible for the enforcement of the Act. AUTHORITY TO HEAR CLAIMS To hear claims made by the workers in respect of unauthorized deductions from wages or delay in payment of wages, state government may appoint an authority (who may be a presiding officer of a labor court, a judge of civil court, etc..,) to dispose of such claims. After hearing, the authority may direct the employer to refund the deductions to the employee along with such compensation as the authority may feel proper but not more than ten times the amount deducted. If after hearing, it is found that the employees application was malicious, he may be punished to pay up to Rs.50, to the employer. PENALITY FOR OFFENCES UNDER THIS ACT Whoever being required under this Act to maintain any records of registers. o Fails to do so; o Willfully refuse to furnish such information; o Willfully furnishes an information which he knows is false; o Refuse to answer, or gives false answer, shall be punishable with fine of Rs. 200 to 1000. Whoever, Willfully obstructs an inspector from doing his duty; Refuse or willfully neglects to afford an inspector any reasonable facility, for making any entry, inspection, examination, etc.., Willfully refuse to produce on the demand of inspector any register or other document;

Prevents any employee from appearing before the inspector, shall be punishable with a fine from 200 1000 Rupees. s person found guilty of the same offences second time shall be punishable with imprisonment up to 6 months and a fine of, from 500 to 3000 rupees. An employer who willfully does not pay wages of an employee by the date fixed by the authority in this behalf, he shall without prejudice to any other action that may be taken against him, be punishable with an additional fine up to Rs. 100 for each day for which such neglect continues. 3.THE PAYMENT OF BONUS ACT, 1965 Bonus means something given in addition to what is ordinarily received / strictly due to the recipient. Earlier it was ex-gratia payment & now it is a matter of right if surplus in profit is available & intends to bridge the gap between given wage & living wage. Applicable to every factory & establishment where 20 or more are employed on any day during an AY Not applicable to Employees of LIC, CG, SG, LA, Employed by IRCS, Universities, Educational Institutes, Non-profit Institutions & Contract employees on building operations. Employee- Any person other than apprentice employed on salary/wage not exceeding Rs 6500 per month in any industry to do skilled/unskilled, manual, supervisory, managerial, administrative, technical or clerical work for hire or reward Employer Owner/ occupier including agents, legal representatives, manager. Salary/ wage All remuneration expressed in terms of money including DA except OT pay Establishment Includes all departments, branches, and undertakings even in different places. Assessment Year - In relation to corporation the year ending on the day on which the books & accounts are closed & balanced In relation to Company the period of profit & loss A/c laid before AGM- even less than year Allocable surplus- In relation to Co other than Banking Co not paying dividends within India as per IT Act S 194- 67% of available surplus in an AY. For others 60% Available surplus- Calculated as per S 5 of this act

Eligibility for Bonus- If worked for not less than 30 working days in AYDisqualification if Fraud, Riotous/violent behaviour, Theft / sabotage / misappropriation of property. Minimum bonus 8.33% Max 20% Set on & Set Off Allocable surplus exceeding the limit for maximum bonus up to maximum of 20% of total salary of employees in that Accounting year- carried forward to succeeding a/c year and so on up to 4 years. No available surplus to pay minimum bonus- no set on profit that amount is carried forward to succeeding a/c year for set off up to 4 years Deductions from bonus- Any loss due to guilty/ misconduct of employee that loss can be lawfully deducted. Period - Decision pending before court paid within 1 month of award- Other cases within 8 months- A.G may extend up to 2 years Calculation of Bonus Gross Profit as per Schedule 1 for banking Companies & 2 for others Permitted deductions like depreciation, investment allowance, rebate etc Direct Tax Sec 7 D.T for amount equal to gross profit for preceding A.Y after deducting bonus paid/ payable.

4. THE INDUSTRIAL DISPUTES ACT, 1947 AIM To settle the industrial disputes on a new pattern known as adjudication machinery and to make industrial peace through voluntary negotiations and compulsory adjudication. IMPORTANT ASPECTS OF THE ACT: 1. An industrial dispute may be referred to an Industrial tribunal. 2. An award shall be binding on both the disputing parties for a period not exceeding one year. 3. Strikes and lockouts are prohibited during the pendency of, Conciliation and adjudication proceeding. Settlement reached in the course of conciliation proceeding. Award of industrial tribunals declare binding by the appropriate government. 4. In public interest or emergency appropriate government can declare the following industries to be a public utility service for maximum period of 6 months,

 Transport by land, air, and water. Foodstuff. Coal. Cotton textile and Iron and steel. IMPORTANT DEFINITION: 1. Award means an interim or a final determination of an industrial dispute. Decision of labor court and industrial tribunals are awards. 2. Average pay means the average wages payable to workman; In case of monthly paid workman, in the 3 calendar month; In the case of weekly paid workman, in the 4 completed weeks; and In the case of daily paid workman, in the 12 full working days Industry means any business undertaking, manufacture, etc. It includes any calling, service, employment, handicraft or industrial occupation or a vocation of workman. Industrial dispute means Any dispute or difference, Between employers and employers, Employers and workmen. Workmen and workmen: and Connected with employment, or Non-employment, or Terms of employment or Conditions of labor, or any person Lay-off means Failure, refusal or inability of an employer, On account of shortage of coal, power, raw material, accumulation of stock, breakdown of machinery or for other reason, To continent to employ workers (in his industry) whose names are borne on the muster-rolls and who have been retrenched. Lay-off is a temporary phase: the employee-employer relations do not come to an end, but are simply suspended for some period (of emergency). Lock-out means the closing of a place of employment or suspension of work or the refusal by an employer to continue to employ any number of workers employed by him.

Public utility services mean Railway or transport service, Postal, telegraph or telephone service, Any industry supplying power, light or water, Sanitation, Foodstuffs, and Coal, textile, etc. Retrenchment means the termination of the service of a workers by the employer for any reason whatsoever other than due to disciplinary action. Retrenchment does not include. Strike means refusal to work or cessation of work by a body of workman for enforcement of a demand against the employer during an industrial dispute. Settlement it implies a settlement arrived at in the course of conciliation proceeding. It includes a written agreement between the workers and employer. Workmen means any person (including an apprentice) employed in any industry for hire or award to do manual, technical, supervisory or clerical work. AUTHORITIES UNDER THIS ACT: WORK COMMITTEE; -Any industry, in which 100 or more workers are and have been employed on any day in the preceding 12 month, shall constitute a works committee. -works committee shall have representatives of workers and employers both. Workmen representatives will not be less than those of employer in number. -works committee shall promote measures for securing and preserving amity and good relation between the workers and employer. It will comment upon matters of their common interest and try to compose any material difference of opinion in respect of such matters. -work committee shall smooth away frictions that might arise between the workers and the employer in day-to-day work. CONCILIATION OFFICERS; Conciliation officers will be appointed by any appropriate government and they shall mediate and promote the settlement of industrial disputes. BOARD OF CONCILIATION;

Appropriate government may constitute a board of conciliation to promote settlement of an industrial dispute. - Board of conciliation will be heady by a chairman (an independent person)and shall have two or four other members which will be representative of the parties to dispute. But parties, i.e., workers and employer shall have equal of representatives. COURTS OF ENQUIRY; -Appropriate government may constitute a court of enquiry to look into any matter connected with industrial dispute. -court (of enquiry) may consist of one or more independent persons. -The court shall inquire and submit a report ordinarily within six months from the commencement of inquiry. LABOUR COURT: -The appropriate government may constitute labour court consisting of one person only for adjudication of industrial relating to matter specified in the 2nd schedule. -The matters within the jurisdiction of labour court as 2nd schedule are; 1. The propriety or legality of any passed by employer under the standing orders. 2. The application and interpretation of standing orders. 3. Illegality or otherwise of a strike or Lock-out. 4. Dismissal of workers including reinstatement or relief to workers wrongly dismissed. 5. Withdrawal of any concession or privilege. -Presiding officer of one man labour court shall be, 1. a judge of a high court; or 2. a district judge who has worked for more than 3yrs, etc. INDUSTRIAL TRIBUNALS; Appropriate government may constitute one person industrial tribunals for the adjudication of industrial disputes relating to matters specified in, 1. Schedule 2(refer to labour court for details of schedule 2), 2. Schedule 3-matters such as wages, compensatory and other allowance, house of work and pauses, holidays and leave with wages, bonus, provident fund, gratuity, rules of discipline, and retrenchment of workers, etc.

3. Presiding officer of the tribunal shall have the same qualification as that of a labour court. NATIONAL TRIBUNALS; -Central government may constitute national industrial tribunals for the adjudication of the industrial disputes which involve question of national importance. -The presiding officer of the national tribunal shall be 1. An independent person; 2. Less than 65 yrs of ago; and 3. An existing or retired judge of a high court, etc. PROHIBITION OF ADJUDICATION BY OTHER TRIBUNALS If any reference has been made to national tribunals, no labour court or tribunal shall have jurisdictions to adjudicate upon any matter which is under adjudication before the national tribunal. STRIKES AND LOCK-OUTS ;No employee of a public utility service shall go strike, 1. Without giving notice of strike, within six weeks before striking; or 2. Within fourteen days of giving such notice; or 3. Before the expiry of date of strike mentioned in the notice; or 4. During the pendency of conciliation proceeding. No employer of any public utility service shall lock-out, 1. Without giving notice of lock-out within six weeks before locking out, or 2. Before the expiry of date of lockout mentioned in the notice, or 3 .During the pendency of conciliation proceeding. The employed shall send information of strike or lock-out the specified authority on the day on which it is declared. RIGHT OF WORKMEN LAID OFF FOR COMPENSATION A worker having more than of one year continuous service and then an employer, it is laid of, shall get compensation equal to 50% of the total of his basis wages and dearness allowance, subject to the following limitation. Provide that if during any period of 12 months, a workmen is so laid off for more than 45 days, no such compensation shall be payable in respect of any period of the lay off after the expire of the 1st 45 days, if there is an agreement to that effect between the workmen and the employer, etc.., WORKMEN NOT ENTITLED TO COMPENSATION IN CERTAIN CASES No compensation shall be paid a worker laid off under following conditions,

 If he refuses to accept alternative employment involving same wages, offered to him in the same concern or in any other concern of the same employer. If the lay off is due to a strike, etc CONDITIONS PRECEDENT TO RETERENCHMENT No worker who has a continuous service of more than 1 year shall be retrenched by the employer until. The worker has been given 1 month return notice starting the reason for retrenchment and the period of notice has expired of the worker has been paid in lieu of such notice, wage of the period of notice. At the time of retrenchment, the worker has been paid compensation equivalent to 15 days average pay for every completed year of service. CLOSING DOWN THE UNDERTAKING An employer who intends to close down an undertaking shall serve, at least 60 days before the date on which he indents closer to become effective, a notice to appropriate government stating clearly the reason for closing the under taking. Compensation by reference to section 25 FFF of the act is provided to workers who are in continuous service for not less than a year with the undertaking. PENALITIES Workers who commence illegal strike shall be punishable with imprisonment extending up to 1 month and a fine of up to rupees 50, or both.

Unit IV The Income Tax Act, 1961 Assessment year- Period of 12 months starting from April 1 of every year and ending on March 31 of next year Previous Year- Income earned is taxable next year & income earned year is PY-Next year is AY Person An individual, a HUF, a Co, a firm, an Association of persons or body of individuals whether incorporated or not, a local authority, every artificial judicial person other than above. Assessee A person by whom any tax or any other sum of money (penalty/interest) is payable under the act.

1st Category- Any person, irrespective of the fact whether any proceeding under the act has been taken against him or not nd 2 category Any person in respect of whom any proceeding under the act has been taken (whether he is liable to pay tax / interest / penalty or not) May be for Either for assessment of income or loss sustained Of income/loss of any other person in respect whom he is assessed Of the amount of refund due to him or to such other person 3rd category Every person who is deemed to be an assessee including representative assessee u/s 160(2) th 4 category - Every person who is deemed to be an assessee by default- person not deducted tax at source, deducted but not paid, u/s218 person not paid advance tax Charge of IT Annual, PY income chargeable in AY, Rate fixed by Finance Act/ Bill, On every person, Levied on total income calculated under the provisions of the act. Income 2(24)- Inclusive of such terms satisfying according to its general & natural meaning- includes 1.Profits & gains 2.Dividend 3.Voluntary contribution received by trust wholly / partly charitable / religious 4.Value of any perquisite or profit lieu of salary (rent free accommodation, accommodation in concessional rate, ESI contribution - as valued by the employees) 5.Any special allowances / benefits specifically granted to the assessee to meet his expenses wholly, necessarily & exclusively for the performance of his duties 6. Any allowance to meet his personal expenses at the place where he performs his duties / compensate for the increased cost of living 7. Value of any benefit / perquisite obtained from a company by a director who has substantial interest in the company or by a relative of director or such a person 8. Any sum chargeable to tax- interest, salary, bonus, commission, remuneration to partner 9. Insurance profit, Benefit of key man insurance 10. Winning of lotteries, crossword puzzles, races 11.Any sum as contribution to any fund from employer 12. Any sum received for not carrying out any activity in relation to a business INCOME - Dictionary meaning is which comes in as the periodical product of ones work, business, lands / investment annual/ periodical receipt accruing to a person. Gross Total Income Major heads -Salaries -Income from house property

-Profits & gains of business or profession -Capital gains -Income from other sources -Total Income Gross income minus deduction under 80ccc to 80u DEDUCTIONS 1.National Savings Schemes 2.Equity Linked Savings Schemes 3.Pension Fund 4.Medical Insurance Premia 5.Handicap Expenses 6.Medical Treatment for Specific Diseases 7.Loan for Higher Education 8.Donations for certain funds of charity 9.Donations for Scientific research & development 10.Rent paid 11.Industrial Tax Incentives & rebates 12.Royalties received Tax rate- Finance Act / Finance Bill 1st Schedule Part I Rate for different assessees II Rates of deductions III- Rates for Advance tax payees ASSESSMENT OF COMPANIES- Domestic, Foreign, Indian Co, Industrial Co General Principles Income under different heads Income of other persons ( Transfer of income with/without transfer of assets ) Current & brought forward losses to be adjusted Total is Gross Income Deductions Tax Tax rebate, Tax credit Tax rate for Companies Indian/domestic 1. Domestic Co- 35% +2% sc 2. Foreign Co 50% Other Incomes 48 % Tax should not be lower than 7.5 % of book profit DEDUCTIONS Donations for certain funds of charity

Donations for Scientific research & development Profit/ gains from projects outside India, Housing Projects Earnings in Foreign Exchange Profit from export of Software, Film Products, Infrastructure undertakings, Development undertakings Profit from biodegradable waste Employment of new workmen Inter corporate dividends Royalty, fees, commission received from foreign enterprises Central Sales Tax Act, 1956 This provides for registration of dealers for effective collection of tax, specifies the commodities and the rate of taxation. It defines clearly what is inter-state sale/ purchase and what is not- within state or outside state- sales in the course of import & export. Inter-State trade or commerce if the sale or purchase occasions the movement of goods from one state to another; or is effected by a transfer of documents of title to the goods during their movement from one state to another A contract of sale & movement of goods is must Inter-State sale Subject to the provisions of section 3, a sale/purchase shall be deemed to take place inside a state if the goods are within a state in the case of ascertained goods at the time of contract of sale is made; in the case of unascertained or future goods at the time of their appropriation to the contract of sale by the seller/buyer Physical location of goods is important Rate of CST -Goods exempted from local sales tax- Nil -LST is less than 4%- Same as LST -Inter-state sale to Government concessional rate of 4% - with Form D -Goods intended for resale/ packing/ manufacturing registered dealers is 4% & unregistered dealers 10% or LST whichever is higher VALUE ADDED TAX Principle Every time there is a sale, there should be tax on it.- April 1, 2005 Enforceability- A better compliance is inbuilt in the system of VAT. Buyers & sellers would insist on compliance with taxation, improving the collection of tax. The law enforcer thus has passed the burden of surveillance on the tax payers themselves. Registration- To identify the person & bring him under tax grid. Certain kinds of persons are to be compulsorily register- regd dealers- All who make inter-state sale ie.. buying & selling across the state.- Exceeding 5 lakhs compulsory- voluntary

Dealers- Any person who, for the purposes of or in connection with or incidental to or in the course of his business buys, sells goods directly or otherwise. Business includes all trade, commerce, manufacture & provision of service. All retailers, distributors, manufacturers are covered. Includes 1.Factor, commission agent, broker, auctioneer, mercantile agent on behalf of any principal 2.Branch outside state, if buys/sells within state 3.Clubs, associations, society, trust, Co-ops even selling to members 4. Person selling confiscated goods, seized goods, scrap, surplus, old, obsolete, discarded material or waste products 5. Departmentsts of CG, SG, Local authority buying, selling, supplying, distributing goods 6.Industrial, commercial, banking, insurance or trading undertakings buying, selling, supplying, distributing goods- (Even casual traders- occasional transactions like in exhibitions- regularity, frequency, quantity, continuity, profit motive do not count) SALE Includes -Conventional sale where ownership is transferred for cash consideration -Supply of goods by a society, club or Company to its members -Transfer of property in goods involved in execution of works contract -Delivery of any goods on hire purchase -Supply of goods / articles by hotels, restaurants as part of service Quantum of Tax Bullion, Gold, Silver, Precious metals, jewellery, precious & semi precious stones 1% of turnover value Drugs, medicines, agricultural & industrial inputs, capital goods, some commodities of interest to general public like bicycles, hawai chappals, IT products, cell phones 4 % Petroleum, tobacco products 20 % Others which are not listed -12.5 % Exemption- 46 commodities with 10 of local State choice, normally of social implications are exempted from tax by Empowered Committee of State Finance Ministers - Books, periodicals, maps, newspapers Tax Credit Raw materials to capital goods are taxed- Input taxes to those can be claimed as rebate on tax. These claimable input taxes are called tax credit Capital goods credit to be claimed in equal proportion for three years. Tax invoice- Words like Retail Invoice, Cash Memorandum, Bill- serial NumbersName, address, registration no of seller Description, quantity, value of goods services provided inclusive of tax charged Signature & date

Exemption small dealers less than 5 lakhs turnover (TN 10 Lakhs if sale/purchase is within TN) 50 Lakhs can opt for 1 % vat TN VAT 20% slab is removed-others are same as above. Petrol, Diesel, ATF, IMFL, Sugarcane are taxed separately- not included in VAT

Unit V The Consumer Protection Act, 1986 Objectives 1.Better protection to consumers unlike present laws (preventive & punitive) it is compensatory in nature 2.Simple, speedy & inexpensive redressal of grievances and appropriate Compensation 3. 1993 & 1999 amended to extent coverage & scope and to enhance powers 4.Promote voluntary consumer movements & to safeguard interests of C Rights of consumers 1.Protected against marketing of goods & services hazardous to life & property 2.Informed about quality, Quantity, Potency, Purity, Standard, Price of G&S to protect against unfair trade practices 3.Possibily assure access to variety of G&S at competitive prices 4.Heard & assured that consumers interests will receive due consideration at appropriate forums 5.Seek redressal against unfair/restrictive trade practices, exploitation 6. Consumer education Definitions 1.Complaint-Consumer, Voluntary CA, CG/SG making a complaint against suppliers of goods & services 2.Goods 3.Services- Service of any description made available to potential users including facilities like banking, financing, insurance, transport, processing, supply of energy, boarding / lodging, housing construction, entertainment, amusement, purveying of news/information, excluding personal services based on contract / free of cost 4.Consumer Disputes- denies/disputes the allegation in complaint. 5. Restrictive trade Practice- A practice which requires consumer to buy, hire, avail any G/S as a condition precedent for buying, hiring etc of G/S 6. Unfair Trade Practices- MRTP Act- Trade practice to promote sale, use, supply of G/S adopts unfair method, deceptive practice by False/misleading representation,

Bargain price, Offering of gifts, prize, contest etc, Non compliance of product safety standard, Hoarding or destruction of goods. 7.Defect Any fault, imperfection / shortcoming/ inadequacy, in quality, quantity. Price, packing, standard required to be maintained by any law/contract in relation to goods 8.Deficiency Similar to above in quality, nature/ manner of performance in respect to services. Consumer Consumer of Goods- One who buys/ agrees to buy for consideration includes deferred payment systems, Includes any user subsequently with approval of purchaser. Excludes commercial/resale purpose, including self employment Consumer of Services- One who hires/ avails service for consideration includes deferred payment and includes other beneficiary of such service with approval of purchaser. Constituents of Complaints- Any unfair / restrictive trade practice, one or more defects in goods, hazardous goods for sale to public, deficiencies in services, trader charging extra price other than fixed by any law / displayed on goods / displayed on any packet containing such good. Central Consumer Protection CouncilChairman is Minister in charge of Consumer Affairs, 150 other members with varied interests, 3 years term, at least 1 meeting in a year, meets as & when necessary State CPC- Minister i/c of Consumer Affairs, other members, 2 meetings in 1 year Redressal Agencies District Forum- District Judge President, -2 members with ability, integrity & standing having adequate knowledge in dealing with problems relating to Economics, Law, Commerce, Industry, Accountancy, Public Affairs/ admin & one shall be a woman- Office for 5 years/ up to 65 years age with no reappointment- Jurisdictionvalue of goods up to 5 lacs State Commission High court Judge with consultation of CJ of HCAppointment by selection committee consisting of President, secretaries of Law Dept & CA- Above 5 lac below 20 lacs National Commission Judge of Sc consultation with CJ of SC 4 members 1 shall be a woman- 5 years /70 years of age- Above 20 lacs Filing of Complaint- Consumer/ agent with signature, by post / person within 2 years of event happening.- contains Name Address of complainant, opposite party, details of Complainant with any documents supporting, Relief sought.

Appeal within 30 days District Forum State Commission-National Commission Supreme Court Penalties- 1 month to 3 yrs, Fine Rs 200- 10,000 or both Relief Available -Removal of defects from goods -Replacement -Refund of price paid -Compensation for loss / injury -Removal of deficiencies in services -Discontinuance of Unfair / Restrictive Trade Practices & direction not to repeat -Withdrawal of hazardous goods from sale -Award of adequate costs ROLE of NGOs Consumer Guidance or Education is provided by NGOs- A conscious preparation of individual in the skills, concepts & understanding required for everyday living to achieve, within ones own values & culture, the maximum satisfaction & utilisation of his/her resources.- NGOs create awareness to 1.Have a balanced control among buyers & sellers. 2.Protect themselves against exploitation 3.Learn to avoid deceptive packaging & labeling, misleading advertisements, marketing gimmicks 4.For self protection against unfair trade practices 5.Information about standard of quality, technical terms in goods 6.Legal rights & responsibilities of all 7.Knowledge consumer agencies 8.Knowledge of nutrition & food use, reduction of waste, road safety, low cost alternative materials 9. Better buymanship Cyber Law All the legal & regulatory aspects of Internet & WWW NEED -Growth of Internet within few years led to emergence of new ticklish legal issues & problems which necessitated enacting of cyber law. -Though existing laws were comprehensive in all situations but were not so in cyber space & interpretation had its drawbacks. -None of existing laws give legal validity to the activities in Cyberspace -Legal infrastructure to support/ enable various cyber activities to grow- E-commerce IT Act, 2000 Not only provides legal support but also gives powers to Police to enter & search without any warrant, any public place for cyber crimes.

Definition of Cyber crime- Unlawful acts wherein the computer is either a tool or target or both.- Any crime with the help of computer & telecommunication tech. Nature- Difficult challenges- mostly involve no violence but greed, pride or play on some character weaknesses of victims- difficult to identify culprit- constituent aspect of political, social & economical reconstructing of world-free flow of uncensored information is attractive to insurgents- Hackers, Information merchants & mercenaries, terrorists etc Types of Cyber Crimes 1.Hacking-Breaking in/ trespassing a computer system intentionally to cause loss/ damage to public/person, destroys / deletes any information, diminishes / affects its value/ utility/ affects it injuriously by any means- Up to 3 years RI or 2 lacs or both. 2.Cracking-Illegal access to a computer system (H/w, components, stored data, directories, traffic & content related data)- Excludes e-mail with virus 3. Security Related Crimes- Hard drive/ memory or in transit across physical network wire in the form of packets- Both provide opportunities for internal or Internet attack 4. Network packet snifters- Broken information- packets-TCP/IP-Packet snifter-s/w application to capture packets across a local network 5. IP Spoofing- Outside the network pretends to be a trusted computer by using IP addresses- Limited to inject data/commands into stream of data 6. Password attacks- Repeated attempts to identify a password- brute force attackTrojan horse programs- lead to security breaches like outsider can copy or insider can place/share sensitive information on an external computer 7. Man in the middle attacks- Attacker has access to network packets across the networks- Theft of information, hijacking an ongoing session, traffic analysis, Denial of Services, corruption of transmitted data 8.Fraud on the Internet- white collar crimes- Online news letters with bogus recommendations for investments, Bulletin boards as a forum for sharing investor information, E-mail scams with false investment schemes/ news of companies, Credit card fraud, Publishing of false digital signature knowingly of erroneous particulars- 2 years imprisonment / 1 lakh fine or both, Making available digital signature for fraudulent purposes Similar punishment, Alteration/destruction of Digital information with virus- program designed to replicate & spread by attaching themselves to word processor/ spread sheet/ boot sector of a disk, cyber porn or pornography on net- 1st time 5 yrs/ 1 lac- 2nd Time double Right to Privacy, Encryption, Cryptography- Yet to introduce some controls Preventing Computer Crime

By Educating How technology can be used to help or hurt others Think about being a victim of some cyber crime By Practicing safe Computing Always ask who has access to my log-in address, Remember hackers/pirates are breaking law Adjudicating Officer- Director to GoI or equivalent State Officer appointed by Central Government with expertise in IT field and or judiciary. Cyber Appellate Tribunal- Appeal within 45 days- HC judge as Presiding Officer or Grade I Indian Legal Services officer with 03 yrs experience/ less than 65 yrs of age office for 05 years- Appeal to High courts within 60 days Intellectual Property Rights For the development of business, possession and utilization of property is essential. Tangible (movable/immovable) & intangible (incorporeal nature) properties. World Trade Organisation - Trade Related Intellectual Property Rights(TRIPS) 1. Patents 2. Copyrights 3. Trade marks 4. Geographical Indications 5. Industrial designs 6. Integrated Circuits 7. Trade Secrets or Confidential Information Patent- Patents Act 1970 Patent is a grant from government, which confers on the grantee, for a limited term, the exclusive privilege of making, selling and using an invention and also authorizing others to do so. Inventions not patentable 1. Frivolous inventions / claiming obvious / contrary to well established natural laws 2. Inventions contrary to public order or morality causing serious prejudice to human, animal or plant life or health or to environment

3. Mere discovery of new form of a known substance without enhancement of known efficacy 4. Mere use of known process, machine or apparatus, unless a new product is the outcome 5. Methods of agriculture or horticulture 6. Mathematical or business models 7. Method of playing games 8. Presentation of Information 9. Topography of Integrated circuits 10. 11. Invention in effect is traditional knowledge Invention relating to atomic energy

Application as specified by true inventor, his assignee or legal representativepublished-examiner report-opposition made decided by controller- 20 years granted by Central Government-patents of addition for improvements or modificationsRegister of patents- Head Office Kolkata Branches in Mumbai, New Delhi & Chennai- Central government can use any invention for government purpose or public purpose with adequate compensation. Infringement- court may grant injunction, seizure of goods or damages Copyright Copyright Act, 1957 Registrar of copyrights controls copyright office & above him the Copyright Board ( Registrar is Secretary with 2-14 members/ benches with 3 members) deemed civil court. Copyright means the exclusive right in the works in which copyright subsists. Copyright subsists in 1. Original literary, dramatic, musical and artistic works. 2. Cinematograph films 3. Sound recordings

Terms of Copyright- 60 years, broadcasting reproduction rights for 25 years & performers right is 50 years. International copyright is available. Registration is optional. Acts not infringement of copyright are 1. Private use including research 2. Criticism or review 3. Backup copies of computer programmes 4. Reporting in media 5. For judicial proceedings 6. Works prepared by secretariat for use of MLAs 7. Copy made in accordance with law 8. For bonafide use of educational institutions 9. Reading in public of any extract of published work 10. 11. 12. Used as part in course of instruction/ in examination Recording to be heard in an enclosed room Bonafide religious ceremony by CG/SG/LA

Infringement leads to civil remedies like injunction or damages/ penalty Rs 50,000 to 2 lakhs / 06 months to 3 years- appeal within 30 days. TRADE MARKS Trade Marks Act, 1999 A TM is a visual symbol in the form of a word, a device or a label applied to articles of commerce. Based on the concepts of distinctiveness and deceptive similarity. Functions are 1. It identifies the product 2. It guarantees the unchanged quality 3. It advertises the product 4. It creates an image of the product.

Controller General of Patents, Designs and Trade Marks- Registrar of TrademarksRegister with all details kept in HO of Trade Marks Registry. Register-apply with prescribed fee- opposition within 3 months-reply within 2 monthscertificate issued for 10 years- renewable with fee- exclusive right is the effect of registration. Assignment & Transmission is possible & registered. Collective marks - A trademark distinguishing the goods or services of members of an association, which is the proprietor of the mark, from those of others. Similarly certification trademarks, special provision for textile goods available. Improvements by present act are 1. Inclusion of service mark. 2. Procedure & duration of TM 7 to 10 3. Expanded definition of TM 4. Introduction of Collective mark 5. Introduction of Certification Mark 6. Expansion of the meaning of TM infringement 7. Stringent requirements for Registration 8. Foreign TMs 9. Well Known TMs 10. Broadening the concept of Criminality(police officer can search & seize without warrant - penalty Rs 50,000 to 2 lakhs / 06 months to 3 years)

Part A 1 Define the term law 2 What do you understand by business/mercantile law?

3 Define commercial law. 4 What are the sources of business law/commercial law? 5 Differentiate agreement and contract. 6 Define a valid contract. 7 What is an illegal contract? 8 What is an illegal agreement? 9 State the essential elements of a contract. 10 Write any four void agreements? 11 What do you mean by avoidable contract? 12 Define void contract. 13 Differentiate express and implied contract. 14 Define executed and executor contract. 15 What is a void agreement? 16 Write any three distinctions between void agreement and avoidable contract. 17 What are the differences between void agreement and illegal agreement? 18 Define acceptances. 19 What are the essentials of acceptance? 20 How is an offer made? Who can accept an offer? 21 State any four legal rules as to acceptance. 22 What is consideration? Or Define consideration. 23 Who is a minor? 24 When is consent said to be free? 25 What is consent? Define coercion. 26 What is misrepresentation? 27 What do you understand by undue influence? 28 When is the object of an agreement not unlawful? 29 What is contingent contract? 30 What is meant by performance of contract? 31 What is meant by assignment of a contract? 32 What is novation? 33 When does discharge of contract by rescission take place? 34 What are ordinary damages? 35 What exemplary damages? 36 What is a quasi contract? 37 Write a short note on i) void ii) avoidable and iii) Unforceable contract 38 What is an offer (or a proposal)? Give some examples of offers. 39 Distinguish between fraud and misrepresentation. 40 What is contract of sale?

41 What are the different types of goods described in sale of goods Act? 42 What are the essentials of contract of sale? 43 What are the distinctions between sale and agreement to sell? 44 Define agreement to sell. 45 Write-notes on specific goods and Unascertained goods. 46 Define the term sale of goods 47 What do you understand by condition and warranty? 48 Distinguish between express warranty and implied warranty? 49 When does the property in goods pass from the seller to the buyer in a contract of sale Of goods? 50 What are unascertained goods? 51 State the implied condition in a contract of sale. 52 What is sale by description? 53 What is sale by description? 54 When can a breach of condition be treated as a breach of warranty? 55 What is meant by an implied condition? 56 Write a note on passing of the risk 57 Define an unpaid seller. 58 What are the rights and duties of the buyer? 59 Define performance of the contract of sale. 60 What is a negotiable instrument? 61 Distinguish between a promissory note and a bill of exchange. 62 Distinguish between a bill of exchange and a cheque. 63 What is a promissory note? What are its essential elements? 64 What is a cheque? How does it differ from a bill of exchange? 65 What is a bill of exchange? Who can accept a bill of exchange? 66 Give two essential features of negotiable instruments? 67 What are the different kinds of negotiable instruments? 68 What is an accommodation bill? 69 Define a holder and a holder in due course 70 What is meant by acceptance of a bill of exchange? 71 Define acceptance for honour 72 What do you understand by presentment of a negotiable instrument? 73 When is presentment for acceptance and payment excused? 74 What is meant by dishonor by non-acceptance or dishonor by non- payment? 75 In what different ways may a negotiable instrument be dishonoured?