by LFIAdmin | Dec 8, 2020 | Uncategorized
By Nazaqat Lal, Advocate & Solicitor, Bombay High Court
nazaqat_lal@hotmail.com | Dec 8, 2020
[*The relevant sections and statutes have been mentioned in brackets]
1. Who is a notary?
A notary is a person appointed by the Central Government or State Government to perform notarial acts as an impartial witness, verifying the identity of the person signing and that such person signed in the presence of the notary.
2. What are the functions of a notary?
Functions of a notary include certifying the execution of a document, administering oath to or taking affidavit from any person, translating and verifying the translation of a document from one language to another, acting as a Commissioner to record evidence in any civil or criminal trial if so directed, etc.
[Section 8, The Notaries Act, 1952]
3. Why are documents notarised?
Documents are notarised to ensure proper execution and prevent forgery and fraud. Before signing, the person signing is required to produce proper identification so that the notary can verify that the person signing is who he/she claims to be. The notary further ensures that the intended person signs the document of his own freewill. Notarisation also ensures that no one can fraudulently sign claiming to be you.
4. What is the effect of notarising a document?
Notarising a document adds a layer of authenticity to the execution of the document. A notarised document assures that the document is authentic and can be relied upon.
5. Are notarisation and attestation the same?
No.
When a document is signed before a notary, the notary verifies the identity of the person signing and that such person signs of his own freewill in the presence of the notary. Further, the person signing swears/confirms that the contents of the document being signed are true and that he has the authority to sign such document.
On the other hand, an attesting witness signs immediately after the execution of the document only for the purpose of proving and identifying the maker of the document.
While both notarisation and attestation witness execution of a document, notarisation can only be done by a notary public. Attestation can be done by anyone above the age of 18 and of sound mind.
6. Is it compulsory to notarise a Power of Attorney?
Yes.
Section 4 of the Powers of Attorney Act, 1882 requires that the execution of an instrument creating a power of attorney must be verified by affidavit, statutory declaration or other sufficient evidence.
Section 85 of the Indian Evidence Act, 1872 states that there is a legal presumption of the execution and authentication of a power of attorney that has been executed before, and authenticated by, a notary (or any Court, Judge, Magistrate, Indian Consul or Vice Consul or representative of the Central Government).
Section 57 of the Indian Evidence Act, 1872 lists down the facts of which a court must take judicial notice and sub section 6 includes the seal of a notary.
7. What laws govern notarisation?
The Notaries Act, 1952 and The Notaries Rules 1956
8. What are the qualifications required to become a notary?
(i) An advocate who has completed at least 10 years of practice (7 years in the case of women, Scheduled Castes, Scheduled Tribes and other Backward Classed), or
(ii) a person who is part of the Indian Legal Service under the Central Government, or
(iii) a person who has been at least for 10 years a member of Judicial Service or held office under the Central Government or State Government requiring special knowledge of law after enrollment as an advocate or held an office in a department of Judge Advocate General or in the legal department of the armed forces.
[Rule 3, The Notaries Rules, 1956]
9. Does the Notaries Act, 1952 recognise notarial acts done by foreign notaries?
Section 14 of the Notaries Act, 1952 provides that if the Central Government is satisfied that notarial acts done by notaries within India are recognized for all or some purposes by the law or practice of countries outside India, then notarial acts lawfully performed by notaries in such countries will be recognized in India for all or some purposes.
In furtherance of this power, notarial acts done by notaries in United Kingdom, the Isle of Man and Channel Islands comprising Guernsey and Jersey, Hungary, Belgium, New Zealand and Ireland are recognised for all purposes in India.
by LFIAdmin | Nov 25, 2020 | Uncategorized
By Nazaqat Lal, Advocate & Solicitor, Bombay High Court
nazaqat_lal@hotmail.com | Nov 30, 2020
The law of limitation governing the territory of India is contained in the Limitation Act, 1963 (“the Act”). The preamble of the said Act states that it is “An Act to consolidate and amend the law for the limitation of suits and other proceedings for purposes connected in addition to that.” (emphasis supplied) Being a consolidating act, as distinguished from an act that merely defines and amends certain parts of the law relating to that subject, the Act is largely exhaustive on the subject of limitation. However, the Act does recognize special laws that may provide a period of limitation different from the period stipulated under the Act.
The Act has factored in certain situations wherein the limitation period may need to be extended (Section 4), relaxed (Sections 5, 6 and 7) or completely done away with, as stipulated in Section 10. But it is pertinent to note that force majeure events do not expressly fall within any of the provisions providing for extension or relaxation of the strict rule of limitation.
The expression ‘force Majeure’ is of French origin. Under the French Civil Code, force majeure is a defence to a claim for damages for breach of contract. It needs to be shown that the event: made performance impossible, was unforeseeable, was unavoidable in occurrence and effects. [1] Force majeure clauses are incorporated in contracts as a way for parties to take a break in their performance obligations or terminate the contract in extreme circumstances under English Law.
Typically, a natural disaster, war or “act of God” would legitimately suspend or excuse the performance of the contract. This English law doctrine has been recognized in Sections 32 and 56 of the Indian Contract Act, 1872. However, applying the force majeure doctrine is not a blanket one. The party(s) to the contract would have to show inter-alia, the steps taken on their part, to mitigate the consequences, whether the time is of the essence of their contract, etc. before the court extends the time for performance of the contract or excuses non-performance thereof completely.
For litigation, the doctrine of force majeure would have to be considered slightly differently than in contract law. Whether a plea of force majeure would extend or relax the time otherwise permitted to a party to initiate proceedings by suit, appeal or application.
One can attempt to bring a situation of force majeure, particularly the situation of Covid-19, within the scope of Section 4, which provides for expiry of limitation when the courts are closed, or Section 5, which provides for an extension of the period of limitation in the case of appeal or application if “sufficient cause” is shown. However, it is pertinent to note that Section 5 applies to appeals and applications only and not suits. Therefore, the only benefit a potential plaintiff (who is not covered by any of the other relaxations or Section 10 of the Act) would get is under Section 4.
Section 4 would be applicable in a case where the expiry of the period of limitation falls on a holiday and, therefore, permits a plaintiff/applicant to file on the immediate next working day. If the limitation period expired during the lockdown imposed to curb the spread of covid-19, and suits, appeals, and applications were under section 4. They would have to be kept completely ready for filing and filed as soon as the court registry opens. In my view, this would neither be a fair nor pragmatic approach to take. Given that movement was severely restricted, public offices closed or functioned with minimum staff. Several other logistical factors involved utilizing the lockdown period as effectively as one would want to or need to prepare and file pleadings was not possible.
The potential plaintiff/applicant should not gain any additional or undue advantage due to the force majeure event. A potential defendant/respondent should also not be deprived of a right they would ordinarily have had. A solution will have to be found that factors the unprecedented force majeure event and the foundational principles of the law of limitation.
Keeping in line with the principles of the Act, the best solution to my mind would be to exclude the period of the force majeure event from the computation of limitation, i.e. freeze such period of force majeure, and the remainder or outstanding period of limitation would start running again once the effect of such force majeure event has ceased and normal functioning of courts has been restored. Specific to the case of Covid-19, (a) the period of lockdown, (b) the immediately preceding week(s) during which only very urgent matters were being taken up, and the Bombay High Court was working for lesser hours than normal as well as (c) any time after the lockdown is lifted, but courts do not resume work in full swing should be excluded from the computation of limitation.
In exercise of its powers under Articles 141 and 142 of the Constitution of India, the Hon’ble Supreme Court vide Order dated 23rd March 2020 [2] directed retrospective suspension of the law of limitation from 15th March 2020 onwards till further orders. Supreme Court has effectively frozen or suspended the running period of limitation from when the courts ceased to take up matters in the ordinary course. It will probably order the resumption of the law of limitation from the date courts begin to function at full strength and take up matters in the ordinary course.
The issue of limitation was bound to come up once courts resumed working and bypassing such Orders. The Supreme Court has obviated the need for such issues to be decided by each court separately and brought uniformity. While this was possible in litigation, it may not be so in the realm of contracts. In determining the effect of a force majeure event, particularly Covid-19, on contractual obligations, each contract will have to be considered on its own terms. At best, courts may be able to lay down some guidelines or principles applicable to a class of contracts.
[1] The NEC4 Engineering and Construction Contract: A Commentary by Brian Eggleston @ Pg. 124
[2] Suo Motu Writ Petition (Civil) No. 3/2020
by LFIAdmin | Dec 9, 2020 | Uncategorized
By Ms. Sandhya Tolat, Advocate and Solicitor
Sandhya.tolat@gmail.com | Dec 7, 2020
There is increasing awareness and judicial activism around medical negligence cases in India. Through legal jurisprudence over the years, the Hon’ble Supreme Court of India (SC) has upheld the Right to Health as a fundamental right under Article 21 of the Constitution of India, extended both to Indians and non-residents equally [1]. The Directive Principals of State Policy also imposes a duty upon States to provide proper and adequate medical and healthcare facilities.
Through this article we attempt to decode the complex dichotomy of a Patients’ Rights v/s Medical Professional Integrity and Autonomy and what constitutes medical negligence.
What is Medical Negligence?
The SC held “every doctor has a duty to act with a reasonable degree of care and skill” [2].Stringent onus is put on the complainant to prove negligence of the medical practitioner beyond reasonable doubt. The essential elements for medical negligence [3] are:
1. Medical practitioner owes a duty of care to the complainant.
2. Failure to inform the patient of risks involved.
3. If the risk was disclosed, patient would have avoided the injury/damages.
4. Defendant has breached this duty of care.
5. Complainant has suffered injury /consequential damages due to this breach.
6. Breach of the duty of care would give rise to an actionable claim of negligence.
Thus, liability of doctor does not simply arise when the patient has suffered injury, but when injury is resultant from the conduct of the doctor, which has fallen below that of reasonable care. To bring a case under medical negligence, the complainant must establish and prove all the above elements. In exceptional circumstances a complainant may invoke the principle of res ispa loquitur or “the thing speaks for itself” where no proof of negligence is required as the incident establish the negligence itself.
When is the Doctor Liable?
Not every medical case in which something goes wrong can be treated as a case of medical negligence. Some of the landmark judgments on doctor’s liability are discussed below:
1. A doctor can be held liable for negligence only if it is proved that he failed to act with reasonable care.
2. An error of judgement constitutes negligence only if a reasonably competent professional with standard skills that the doctor has, and acting with ordinary care, would not have made [4].
3. If doctor is skilled, has adopted right course of treatment in best interest of patient , considered “proper” by a body of medical professionals ,cannot be held negligent only because something went wrong [5] or because someone else of better skill or knowledge would have prescribed a different method or way of treatment or patient not cured [6].
4. Before issuing notice to a doctor basis complaint received, concerned authority should first refer it to a competent and specialized doctor/panel. Only if a prima facie case is established, should a notice be issued to the concerned doctor/hospital, so as to avoid harassment [7].
5. Hospitals held vicariously liable for the acts of negligence committed by the doctors engaged or empaneled by it [8].Likewise, a senior doctor shall also be vicariously liable for acts of his junior team members while attending to a patient.
Patient’s Legal Remedies?
1. Complaint-Consumer Protection Act,2019 (“Act”)
Medical services are explicitly included under the ambit of the Act [9] under the definition of “Services” and Deficiency of Services. A complaint can be filed before the District/State/National Consumer Dispute Redressal Commission depending on the value of services paid as consideration ( <1cr,>1cr <10 cr,>10 cr respectively) and appealed against, if dissatisfied. Hospitals providing medical services free of charge across board to all patients would stand outside the purview of the Consumer Protection Act (“Act”), whereas hospitals which render free services to a certain category of patients, while providing for services which are charged to the bulk of others, would not lie outside the purview of the Act [10].
2. Complaint-Indian Medical Council (IMC) Act,1956
Complaints for medical negligence can also be raised with the State Medical Councils constituted under the IMC Act where the accused doctors are registered. However possibility of a conflict of interest between the inquiry team and the accused doctors and technical questions raised by panel of doctors to patients causes an impediment to justice.
3. Civil Remedy- A Case of Negligence under Law of Torts
Under the torts law or civil law, a case of medical negligence is maintainable even if medical services are provided free. Patients can take recourse to tort law under negligence and claim compensation. Here, the heavy onus (burden) of proof is on the patient to prove what constitutes a medical negligence, as discussed in detail above.
4. Criminal Remedy- Section 304A of the Indian Penal Code,1890 (IPC)
A criminal complainant can be filed for medical negligence u/s 304A of the IPC where death of a person is caused by a rash or negligent act not amounting to culpable homicide. U/s 80 (accident in doing a lawful act) nothing is an offence that is done by accident or misfortune and without any criminal intention or knowledge in the doing of a lawful act in a lawful manner by lawful means and with proper care and caution. Likewise u/s 88, a person cannot be accused of an offence if act is performed in good faith for the other’s benefit, does not intend to cause harm even if there is a risk, and the patient has explicitly or implicitly given consent. It is held by SC [11] that “To impose criminal liability u/s 304-A, it is necessary that the death should have been the direct result of rash and negligent act of the accused, without other person’s intervention”.
The law around medical negligence has surely evolved over time, still much needs to be done, both, to give an impetus to patients’ rights for speedy justice and also for protecting honest and innocent medical practioners from harassment against wrongful complaints.
[1] State of Punjab v/s M.S Chawla (AIR 1997 SC 1225), Vincent Panikurlangara V/s Union of India (AIR 1987 SC 990)
[2] State of Haryana v/s Smt.Santra (AIR 2000 SC 3335)
[3] Maharaja Agrasan Hospital v/s Master Rishabh Sharma ( SC order dated 16.12.2019 in Civil Appeal 6619 of 2019)
[4] Spring Meadows Hospital & Anr v/s Harjol Ahluwalia & Anr (1998 4 SCC 39)
[5] Dr.Laxman Balakrishna Joshi v/s Dr.Trimbak Bapu Godbole (AIR 1969 (SC) 128)
[6] Dr.Prem Luthra v/s Iftekhar (200)11 CLD 37 (SCDRDC Uttaranchal)
[7] Martin F. D’Souza V. Mohd. Ishfaq2009;(2) Supreme Court 40
[8] Supra 3,Savita Garg v. National Heart Institute (2004) 8 SCC 56; Haribhau Khodwa v. State of Maharashtra (1996) 2 SCC 634;
[9] Indian Medical Association v. V P Shantha AIR 1996 SC 550: (1995) 6 SCC 651
[10] Supra 8, Union of India & Anr vs N.K.Srivasta & Ors (SC order dated 23.7.2020 in Civil Appeal 2823 of 2020)
[11] Kurban Hussein v. the State of Maharashtra(1965) 2 SCR 622
by LFIAdmin | Nov 30, 2020 | Uncategorized
By Rachit S Thakar, Advocate
rachitthakar.ils@gmail.com | Nov 30, 2020
The provisions relating to TCS were introduced under the Income Tax Act, 1961 to collect tax in advance from the persons who are engaged in business of trading in alcoholic liquor, scrap, Forest Product etc. and buy such goods under a contract. As per TCS provisions, a seller is required to collect tax from the buyer in respect of certain transactions and deposit it to the credit of Central Government. The tax so collected and deposited through this mechanism is called
“Tax Collected at Source” or “Collection of Tax at Source”
. The tax shall be collected at the specified rate, from the total value of transaction, inclusive of GST.
The Central Government, vide CBDT circular no. 17/2020 dated 29th September, 2020 and press release dated 30th September, 2020, has introduced a new provision for collecting TCS for the sale of goods and depositing the same to the Government with effect from 1st October, 2020. These provisions are given in Section 206C (1H) of the Income Tax Act.
According to the new provision of TCS, if purchaser’s turnover exceeds Rs. 10 crores in the previous financial year i.e. the year ended 31st March 2020, then the seller has to collect and deposit TCS on the receipts from sale of goods from such purchaser from whom he has received more than Rs. 50 Lakhs as sale consideration during the current Financial year. The TCS is payable on the amount of receipt which is greater than 50 Lakhs and received after 1st October 2020. The rate of TCS is 0.1%
Payments received here, refers only to payments received in connection with “sale” of goods. This is receipt based on TCS; hence even if the payment is received in advance for supply of Goods, the TCS provisions are applicable.
Furthermore, according to the first proviso, Tax shall be collected at a higher rate of 1% instead of 0.1%, in case the buyer fails to provide a valid PAN and Aadhaar number.
The second proviso to section 206C(1H) simply states that both the provisions of TDS and TCS shall not apply to the transaction simultaneously. Normally in case of sale of goods, there is no applicability of TDS. It is important to note that in order to make this proviso applicable, the buyer must be liable to deduct tax at source and has actually deducted tax at source on the transaction. Both conditions have to be satisfied.
The explanation to the provision only defines the term “buyer” and the “seller”.
The term buyer shall mean a person who purchases any goods but does not include the Central Government, the State Government, an Embassy, High Commission, Legation, Commission, Consulate, Trade Representative of a foreign state; or any Local Authority as defined in explanation to the clause 20 of section 10 of the Income Tax Act. Further it does not include any person importing goods into India or any other person as Central Government may, by notification in the Official Gazette specify for this purpose, subject to such conditions as may be specified therein.
The term seller is defined to mean any person which means it covers an individual, firm, company, etc. and the quantum of total sales or turnover or gross receipt of such person is exceeding Rs.10 crore. Thus, in computing the limit of Rs.10 crore, all the segments of the seller have to be considered, be it sale of goods or provision of services, though tax is required to be collected only in the case of sale of goods to the buyer. Further seller also does not include any person as Central Government may, by notification in the Official Gazette specify for this purpose, subject to such conditions as may be specified therein.
This provision of TCS on Sale of Goods under section 206C(1H) has wider ramification because till now TCS was applicable only on certain items. But covering all the goods within the purview of TCS, almost all the business entities are under the umbrella of TCS.
Some questions pertaining to TCS provisions include:
Does it apply to supply of services as well?
The provision that has been brought at this time is only in relation to “sale of goods” and services have been kept away from this provision. Therefore, this provision is not applicable to the payment of consideration received in relation to supply of services.
Also, inter-branch transfers, or stock transfers are not “sale of goods” hence no TCS liability arises.
Furthermore, all the shares are defined as goods under the Sale of Goods Act 1930, though CBDT has clarified that provisions of this section shall not be applicable in relation to transactions in securities and commodities which are traded through recognized stock exchange or cleared and settled by recognized clearing corporation both domestically and internationally.
Does TCS apply to Job work or works contract?
A contract for job-work or a works contract come under the purview of TDS provisions, under section 194C. Hence, TCS provisions under section 261C(1H) shall not apply here.
Does TCS apply to sale of land, building, flats etc.?
Land, buildings, flats are immovable properties and are not “good”. Therefore provisions under this section shall not apply to sale of immovable properties.
Development rights, leasehold rights or any other rights related to immovable properties are also held as immovable properties. Thus, TCS provision shall not apply to transfer or TDRs and leasehold rights.
Does TCS apply to sale of jewellery?
Jewellery entails goods and hence comes within the purview of this section. Prior to 1st April 2017, TCS on sale of jewellery was covered under section 206C(1D). This section is now omitted.
Does TCS apply on sale of goods with installation charges?
In case of sale of goods with installation charges, it amounts to sale of goods even if the value of goods and installation charges are indicated separately on the invoice.
This section shall apply if the conditions specified in this section are satisfied. The position will remain the same if there is no bifurcation of value of goods and installation charges in the invoice and the same is raised as consolidated amount.
If the sale of goods and installation charges are independent activity, then the provisions of this section shall apply only to the sale of goods. The receipt from installation charges will amount to sale of services hence not applicable here.
Does TCS apply on interest due to delayed payment?
When the invoice is raised for sale of goods and buyer delays the payment, thus prompting the seller charges interest for such delay. The interest actually represents the price of goods rather than interest for money borrowed. The definition of interest under section 2(28) of the act only includes interest on money borrowed. Although under GST law the interest paid on delayed payment of invoices/consideration is not with respect to money borrowed but for non-payment of value of goods/consideration within the stipulated period. Since such an interest represents the value of goods, TCS shall be applicable on interest of delay in payment of invoices.
How will this Levy Affect The Automobile Sector?
Although TCS is applicable to automobiles sector for selling of a Motor vehicle above Rs. 10 lakhs to the customer under section 206C(1F) but it is not applicable from the manufacturer to the distributor, dealer or sub-dealer hence this sector is not free from this new TCS provision.
Is There Any Relaxation In This Rate In The Corona Period?
Due to the corona outbreak, there is a 25 percent discount on this rate till 31 March 2021 and the effective rate will be 0.075% up to this date. This TCS is to be deposited on receipt of payment and the last date for deposit of the same will be the 7th day after the end of the month. If your buyer who comes under this TCS does not have a PAN number / Aadhaar number, which is hardly any buyer you have, then this rate of tax will be 1% percent and there is no relaxation of it.
Critical Analysis
If the purpose of this provision is to keep a vigilant eye on the taxpayers, there is no pertinent need for this provision as nearly all buyers who make purchases above Rs.50 Lakhs and then pay the amount of this purchase are all registered under GST. Second, it will be applied on all points such as manufacturer to distributors, distributors to dealer and dealers to sub-dealers. There are many sectors that will be badly affected by this, such as automobile Sector. There are many more reservations with respect to this provision and only time will tell if it has achieved its intended purpose.
by LFIAdmin | Dec 9, 2020 | Uncategorized
By Admin, LegalFormatsIndia.com
Dec 9, 2020
Most of the “Startup” groups in India are unsure whether they should incorporate/register Partnership Firm, Limited Liability Partnership or Private Limited Company? What should be their Business Structure? There are options for formation of entries to run a small, medium and large size business. A “Startup” almost always thinks and plans for external funding in future. It is important to plan your actions in advance.
Here is the Chart giving few comparisons:-
FEW COMPARISONS BETWEEN PARTNERSHIP FIRM, LIMITED LIABILITY PARTNERSHIP (LLP) AND PRIVATE LIMITED COMPANY
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