Category Archives: Articles

Successful Business Requirement = Terms and Conditions/Contract

Successful Business Requirement = Terms and Conditions/Contract

a) Create Certainty:
Two Parties entering into a document containing Terms and conditions gives certainty of what product or service will be dealt with, how the payment will be taken care off, how to raise the invoices, other modalities of executing the business, raising of dispute if any and so on. It is important to understand that if there is terms and conditions being agreed upon for any commercial or non-commercial dealings, it completely set-out the intention and in fact satisfy the contractual mindset which is popularly called as consensus-ad-idem and then there is no uncertainty about what the Parties’ rights and obligations are and this only saves a lot of time and cost if there is any conflict arises and having dispute resolution terms agreed upon only resolves the areas of disagreement between Parties if at all it comes up in a very friendly and amicable manner. In brief, having terms and conditions bring CERTAINTY of what to be done and to avoid, timeframes and so forth
 
b) Avoiding to the maximum of not being taken to Court:
Having clear terms and conditions being agreed upon between the Parties, it only gives a document which makes the Parties bound by such document and this helps majority times of any customers to make a wrong claim against another bound party and in case there is any dispute, Parties can take the assistance of their legal attorneys and take the clarity of their stand against the dispute being aroused and this to ensure that no wrong claims are succeeded.
 
c) Ensure Greater Protection against any claims and gives the reasons to concentrate on Business Growth:
It is widely accepted notion that a Businessperson has only two things to do, Marketing and Innovation and else be taken care by its made system and hence executing Terms and Conditions only ensure the protection of business and once there is a certainly in place and system in place to ensure having certainty, the Business Parties can focus on the doing the work and getting paid on time.
 
d) Bring Awareness of Rights:
Certainty document only gives the clear reading of various rights and duties as mentioned and agreed and this helps and enable the non-default party to make successful claims or purchase of goods in the event of any breach of agreed business terms
 
e) Smooth compliance of Law:
Having clear terms and conditions helps either party to comply with Legal Obligations in all aspects and this also takes care of any customer related claims or IPR infringement claims and so on
 
In brief, to know the importance of Terms and Conditions, MSME Samadhan (under MSME Act) only entertains the money claims where it has Purchase Order and Invoice raised, and if not, then MSME does not entertain the claims.
 
Regular changes in the Terms and Conditions are important to keep your business dealing in line with changes in law and if you feel it has been a while of you not getting the Legal Due Diligence of your business documents, you can get in touch, because this period is the best time to sort all your concern if any

Post-death of Sole Proprietor in Sole Proprietorship Firm, what about Assets?

Post-death of Sole Proprietor in Sole Proprietorship Firm, what about Assets?

A Sole Proprietorship is the simplest business legal entity. It has the least requirements to set up and infact the faster mode to start and set-up the business and it can be started even in a day without GST and if with GST then two days and infact this is one of the oldest and best traditional business entities to be found in India. There is no regulatory compliance except filing of IT Returns and GST Returns and this is anytime a seen as beneficial

As this being Sole Proprietorship which means the Sole Owner of the business, there is no separation between the business entity and the owner e.g. Lalit Jain, the Sole Proprietor of THE LEGAL DESK is one and the same. This means that the assets i.e. bank account, property; stock-in-trade, goodwill, as well as liabilities of the business belong to Lalit Jain.

A Sole Proprietor is a business owned by one person and has these features:-
1. Unlimited Liability;
2. Can sue or be sued in individual’s own name;
3. Can own property if individual has legal capacity;
4. Owner personally liable for debts and losses of business;
5. A Sole Proprietorship exists as long as the Owner is alive.

However, the biggest query comes as to what happens post the death of Sole Proprietor?
Briefly, whatever the Sole Proprietor owns as a business sole proprietor is treated as his personal assets and will be distributed according to his/her Will or under the rules of Indian Succession Act. This means the business assets that can be transferred will be passed on to the deceased Sole Proprietor’s beneficiaries under the law.

Distribution and Sale of Assets and Debts shall be as under post-death of Sole Proprietorship of the Business:
Assets: Subject to the wishes of the beneficiaries, the executor/administrator of the Sole Proprietor’s estate may sell the assets of the Sole Proprietorship to one of the family members. A beneficiary who buys the business and its assets may choose to continue with the business under his own name. Likewise, he may elect to sell the business to another family member, employ someone else to operate it for him or take up a partner for the business.

Debt: Where the business has debts, the executor/administrator may have no choice but to liquidate all assets of the business to meet any debt incurred by the business. If you are a sole proprietor, you should do a will to have a smooth transition of the business whether it is a sale or distribution.

However, in this today regular market changing trend and legal compliances, this type of Business Entity is not preferable and advisable

Starting an E-Commerce Business = Take a look at Legal Aspects

Starting an E-Commerce Business = Take a look at Legal Aspects

The rapid internet and technology advancement and the increasing accessibility and connectivity has created mass opportunities for the E-commerce industry and there is no doubt of this being future way of doing the business.

In view of the massive outreach in which the internet has created, there has never been a better time to start on an E-commerce business and infact if you have not don’t taken any steps till date it is almost saying good-bye to your business. E-commerce refers to the business that uses the internet platform for sale of goods or services via electronic means. The following discussion will touch on some of the essential legal aspects when one embarks on an E-commerce.

a) Trademarks
Domain names are a huge part of the E-commerce businesses. Many businesses will register domain names that contain their trademark to boost brand recognition. When creating domain names, one should be cautious not to infringe the trademark of other businesses by creating domain names that will confuse the general public or induce the general public to associate the website with another brand. The only negative aspect of these domains is that one has to buy all domains to confirm their brands. For eg., /fireflieslegal, thelegaldesk.in, thelegaldesk.co, legaldesk.co, etc. It is preferable to create a unique and distinctive domain name to avoid trademark infringement and also, more importantly, to establish a clear internet identity and to enhance brand recognition. Further, the E-commerce should register their trademark to deter and prohibit others from using similar or identical domain names. Should there be any unauthorized use of your registered trademark, as the proprietor of the trade mark, you are entitled to apply to court for relief (such as an injunction, damages or an account of profit) to be granted.

b) Terms of Use
One should also consider including a set of Terms of Use of the website which is a legal contract between the website owner and the users. The specifics covered in the terms would vary from business to business. It is recommended that you seek the advice of a legal counsel to ensure that the terms stated provide adequate safeguards for the business. It would be highly prudent to have the Terms of Use drafted to fit the nature of your business. As the website owner, the content and information on the site belongs to you and having detailed terms to inform the users of your intellectual property right can help to pre-empt and prevent potential infringement of intellectual rights.

c) Goods and Services Tax
In a business with a physical storefront, the collection of GST is straightforward. How then is GST imposed on E-commerce transactions? It is recommended that you seek the advice of a Taxation Expert to ensure that the methods of dealing with Taxation in regard to your business is being taken on all aspects

d) Income Tax
Apart from GST, another important tax consideration would be the imposition of Income Tax on E-commerce. It is recommended that you seek the advice of a Taxation Expert to ensure that the methods of dealing with Taxation in regard to your business is being taken on all aspects

MSME / Traditional Business = Ignoring Intellectual Property Protection is Winding Up Business

MSME / Traditional Business = Ignoring Intellectual Property Protection is Winding Up Business

Business has not changed but the way of doing the business has changed and infact the change is on fast track mode thanks to Technology. Due to this fast track mode, many of the traditional business who never changed the way of doing the business have either wind up their business or have been forced to change with bad impact on their business future. In today’s business production of goods / providing of services is not enough but how it reach in market on time i.e., thereby giving rise to a good transportation system, delivery system and if this system is given on real time then it only adds to the revenue in small margin. This is where most of the business fill the gap and ensure proper system and revenue model. There is no doubt that in this era new technologies have changed the way business has to be done. New business model has come up wherein the people are now becoming the Admin of the Whatsapp Group or Telegram Group and are allowing marketing the goods once the payment is made for using the group. This is the totally new model of business since good years now. This new business model can be taken as new concept but surely not a work to get registered under Copyright or Patent Act. It is important to note that the markets are getting shrink due to technology and the best example is that you can see how the manufacturer are now directly connect to the end consumer. The change in technology, way of doing the business, is nothing but in business sense intangible assets of the business owners. For ex.., Tribhovandas Bhimji Zaveri is a brand and is the best example of well-known mark in Jewellery Business, Kalyan Jewellers are making their way in terms of branding of your products, etc. The markets are now being branded with brands and infact the branding has become a major source of saleable goods source in the market. Conventionally, Indian Micro, Small and Medium Enterprises (MSMEs) have relied on creating and protecting tangible assets-from land, machinery to office equipment-together with their revenue and receivables, to boost their valuation and prestige among their peers and in the industry. MSME means the micro, small and medium business owners and they are the backbone of Indian Economy. Within MSME itself, there are new start-ups and traditional business which is going on since more than 100 years. Herein the intention of this Article is to share the relevance of Intellectual Property amongst the Business Owners specially Traditional and those who still have not realised the importance of Intellectual Property Rights. The best illustration to share is of Waman Hari Pethe a Jewellery store. They have marketed their products and created a brand with their brand name, Waman Hari Pethe and this is enough to give best and tough competition to any other Retail Jewellery store. Today the valuation itself of the brand Waman Hari Pethe in Jewellery market can be valued than more than 50 unbranded retail jewellery store and they can only earn by selling their brand. This itself is a way to earn but sadly most of the MSME and unorganised are not taking this branding and valuation as their business strategy and hence losing out to competitors.
 
What is Property and importance of Property as Asset for any Business Owners?
 
Property is of two kinds:
  • Corporeal Property i.e., property in material or physical form such as land, building and chattel. Corporeal property is tangible and can be seen through eyes since it has got certain corpus (physical structure).
  • Incorporeal Property i.e., property in immaterial form or non-physical property which results out of intellectual efforts like patents, trademarks, copyrights, designs, etc. It is the latter category of Incorporeal Property which is called as Intellectual Property Rights popularly. Incorporeal Property is intangible. Property, which is intangible in the sense, cannot be seen through eyes is classified as intangible property like lease, mortgages, patents, copyrights, trademarks, etc.
In Today’s Competitive global knowledge economy, all businesses irrespective of their size and scale are bound to create ‘intangible assets’ of various kinds and their value may even exceed their ‘tangible assets’.
 
What is Intellectual Property?
 
Intellectual Property refers to creation of mind such as inventions, designs for industrial articles, literary, artistic work, symbols which are ultimately used in commerce and in turn is a profitable asset in many manners. Intellectual Property rights allow the creators or owners to have the benefits from their works when these are exploited commercially. These rights are statutory rights governed in accordance with the provisions of corresponding legislations. Intellectual Property rights reward creativity & human endeavor which fuel the progress of humankind.
 
Intellectual Property is an Integral Part of Business Growth:
 
Traditionally, physical assets have been considered responsible for the overall value, competitiveness and growth of a company. In recent years, however, the situation has dramatically changed. Due to the growing importance of information technology based products, automation and an upcoming service industry, the intangible assets are often becoming more valuable than the physical assets of the companies.
 
What is the important of Law in Business?
 
It is well known fact that law plays a key role in the business development process in general and a pivotal role in the growth of private business in particular. In all countries, law, which is often used to maintain the status quo, has also had an essential role in guiding and legitimizing the processes of change. It is the instrument for introducing orderly development and reconciling diverse interests.
 
Intellectual Property Law is like a basket of eggs laid by several legal species and common gene. Patent, Copyright, trademark, design, passing-off, confidential information and others have common dominant characteristics. They deal with the knowledge based economy-cum-industry. The law concerning them governs the creation, use and exploitation of the creative efforts of the mind
 
Intellectual Property Rights exists in different works involving Intellectual or mental labour. Generally, speaking any Intellectual efforts having commercial value could be given protection. Intellectual efforts in the field of literature, artistic, science, engineering, manufacturing, business, agriculture, etc., gives rise to Intellectual Property rights. Depending upon the nature of the Intellectual work and field of application Intellectual Property rights have been classified into different kinds which is as under:
  1. Trademarks
  2. Copyrights
  3. Industrial Design
  4. Patent
  5. Geographical Indications
  6. Semiconductor chips and integrated circuits; and
  7. Trade secrets
The objective of enactment of statutes, governing IPRs is to ensure adequate standards of protection exist in member countries.
 
What function does Intellectual Property do for Business?
  • It identifies the Product/Services and its origin
  • It guarantees its unchanged quality
  • It advertises the Product/Services
  • It creates an image for the Product/Services.
  • Link between Manufacturer/Service Provider and Customer
  • Instrument of publicity – “the silent salesman”
  • Symbol of Goodwill
  • Intellectual Property is a Asset
How Intellectual Property is an Asset?
 
It is not far away the fact that Bank will start giving the Loans only on basis of valuation of IPR and most prior usage and well-known mark is the Loan will be accessible.
  
Administration of Intellectual Property Rights in India
 
Patents, designs, trademarks and geographical indications are administered by the Controller General of Patents, Designs and Trademarks which is under the control of the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry. Copyright is under the charge of the Ministry of Human Resource Development. The Act on Layout Design of Integrated Circuits will be implemented by the Ministry of Communication and Information Technology
 
How Can Intellectual Assets Help MSME?
 
The assets of an enterprise may be broadly divided into two categories: a) physical assets – including buildings, infrastructure, machinery, working capital and other financial assets and b) intangible assets – including human and intellectual capital comprising of creative and innovative capacity, ideas, know how, patents, designs and brand reputation. Thus, during the course of business, a firm may create and own various intangible assets that include customer goodwill, human skills embodied in its workers, good management practices as well as IPRs in the form of patents, designs and trademarks. These IPRS are particularly seen as means of providing returns to innovation and creative activities.
 
Today Intellectual Property is more valuable than the physical property. Business entrepreneurs invest huge amount of their funds in research and development to acquire and protect Intellectual Property.
 
The protection of Intellectual Property Rights is important for the economy and for its further growth in areas such as research, innovation and employment. Understanding the importance of Intellectual Property Rights, it shall be always taken as an integral part of its Business Strategy. To remain ahead of competitors, business entities must either continuously introduce radically new products and services or make small improvements to the quality of existing products and services. Changes are also made in response to customer needs; therefore almost every product or service used in daily life gradually evolves as a result of a series of big or small innovations, such as changes in design or improvements in a product’s look and function.
 
The time is already moving fast for those business entities who have still not acted on protecting their IPR and more they delay, be ready for winding uo your business very soon and if not now then surely not far also

Understand Power of Attorney, its need, dangerous side and its restriction

Understand Power of Attorney, its need, dangerous side and its restriction

If you have watched shows like “Suits” or “How to get away with murder” or other similar shows, you must have come across the term “Power of Attorney”. A common man’s understanding of power of attorney is different from its legal sense. So, what is Power of Attorney?
 
The definition of power of attorney lies in the “The powers of Attorney Act, 1882”. According to section 1A of the act, “Powers-of-Attorney” include any instrument empowering a specified person to act for and in the name of the person executing it. This means, a legal document which gives a person the power or legal authority to act for another person as their representative for banking, legal, financial investment, business and other purposes. Even though there is a separate central act pertaining to powers of attorney, the basic principles of such documents are governed by the various sections of the Indian Contract Act, 1872.
 
A power of attorney is mainly of two types:
 
• General Power of Attorney: A general Power of Attorney gives wide-ranging powers to the attorney or the agent which authorise them to do all acts connected with a particular trade, business or employment. For example- Z is the manager of B’s firm. Z’s authority extends to the doing of everything necessary for carrying out the business of B’s firm.
 
• Special Power of Attorney: A Special Power of Attorney gives only specific powers to the attorney or the agent which authorise them to do only a single act. For example- A is employed by X, residing in Mumbai to recover a debt due to X in Delhi. A may adopt any legal process necessary for the purpose of recovering debt. Once the debt is recovered, special power of attorney comes to an end.
 
What is the need of Power of Attorney?
 
Sometimes it becomes almost impossible for a person to look after all its legal and business affairs; That can be a result of old age, poor health, lack of expertise or any other reason. This is when power of attorney comes to picture. It allows you to authorise a person to carry out either a particular act or all acts connected with your trade, business, employment etc. It acts as a helping tool for a person who is incapable of performing those acts due to above mentioned reasons.
 
Why Power of Attorney is dangerous if not given properly?
 
When a person (A Principal/Donor) gives power of attorney to another person (An Agent/Donee), he authorises that person to carry out all the act in the name of the Principal. This means that the Agent would have full legal power to act in the name of the Principal and that the actions of the Agent would be considered as the actions of the Principal. This concept is based on the legal maxim “Qui facit per alium facit per say” which means, He who acts through another does the act himself. Giving a person power of attorney would mean that the principal would be responsible for his agent’s action.
 
Power of attorney is an extremely dangerous document if not given properly. It is very easy to misuse this authority for personal gains.
 
One must think thoroughly before giving someone the power of attorney. This is because, when a person appoints someone be their Agent, he is basically sharing the decision-making power with the Agent. For example- when the donee spends the donor’s money to benefit the donee, rather than the donor, without permission. Power of Attorney makes the donor liable for donee’s action in the due course of the purpose. Thus, an agent’s fraud committed in the course of the purpose is equivalent to fraud committed by his principal. To conclude we can say that it is very important for a person to choose his donee/agent very carefully.
 
Should there be any limitations for Power of Attorney?
 
The answer to this question would always be a yes. When selecting an agent, one must always consider the risks involved. In order to safeguard one’s interest, its important to limit the power of attorney so that the agent cannot misuse his power. Another way of limiting the scope of power of attorney is to make sure the document gives third parties the ability to exercise some supervision over the donee. There is no guarantee that an agent will always work in a bona fide manner. In order to be safe from agent’s fraud/bad intentions, one must limit the scope of the power of attorney. Not limiting the authority of the agent/donee may result in heavy losses.
 
A person does not have a direct control over its donee, and this makes power of attorney a very risky thing. For example- B, a donee of A has the power of attorney to manage A’s banking affairs. B can take a loan and buy a property in A’s name.
Due to all such risks, there must be certain limitation imposed on the donee in order to safeguard the donor’s interests.
 
What are the restrictions of Power of Attorney?
 
Not everyone can give power of attorney to a person. Only a person who is competent to enter into a contract can give the power of attorney to a person. According to section 11 of the Indian Contract act, a party is competent to contract if:
 
a) he is of the age of majority i.e 18 years of age;
b) he is of sound mind, and
c) he is not disqualified from contradicting by any law to which he is subject.
 
Usually, the power of attorney is revoked on the death of the principal or if the principal goes bankrupt or becomes insane. However, a person can extend the power of attorney till even after his death. Such intentions must be mentioned in the agreement.
 
 Written By Ms. Vaishnavi S (Intern) and seen by Adv Lalit K Jain

Notes on various Cyber Crimes In India

Notes on various Cyber Crimes In India

[Offences under Information Technology Act from Serial No. 1 to 27]
 
1. Tampering with computer source Documents Sec.65
 
2. Hacking with computer systems , Data Alteration Sec.66
 
3. Sending offensive messages through communication service, etc Sec.66A
 
4. Dishonestly receiving stolen computer resource or communication device Sec.66B
 
5. Identity theft Sec.66C
 
6. Cheating by personation by using computer resource Sec.66D
 
7. Violation of privacy Sec.66E
 
8. Cyber terrorism Sec.66F
 
9. Publishing or transmitting obscene material in electronic form Sec .67
 
10. Publishing or transmitting of material containing sexually explicit act, etc. in electronic form Sec.67A
 
11. Punishment for publishing or transmitting of material depicting children in sexually explicit act, etc.
in electronic form Sec.67B
 
11. Preservation and Retention of information by intermediaries Sec.67C
 
12. Powers to issue directions for interception or monitoring or decryption of any information through
any computer resource Sec.69
 
13. Power to issue directions for blocking for public access of any information through any computer
resource Sec.69A
 
14. Power to authorize to monitor and collect traffic data or information through any computer resource
for Cyber Security Sec.69B
 
15. Un-authorized access to protected system Sec.70
 
16. Penalty for misrepresentation Sec.71
 
17. Breach of confidentiality and privacy Sec.72
 
18. Publishing False digital signature certificates Sec.73
 
19. Publication for fraudulent purpose Sec.74
 
29. Act to apply for offence or contraventions committed outside India Sec.75
 
21. Compensation, penalties or confiscation not to interfere with other punishment Sec.77
 
22. Compounding of Offences Sec.77A
 
23. Offences with three years imprisonment to be cognizable Sec.77B
 
24. Exemption from liability of intermediary in certain cases Sec.79
 
25. Punishment for abetment of offences Sec.84B
 
26. Punishment for attempt to commit offences Sec.84C
 
27. Offences by Companies = Section 85
 
28. Sending threatening messages by e-mail = Section 503 of Indian Penal Code
 
29. Word, gesture or act intended to insult the modesty of a woman = Section 509 of Indian Penal Code
 
30. Sending defamatory messages by e-mail = Section 499 of Indian Penal Code
 
31. Bogus websites, Cyber Frauds = Section 420 of Indian Penal Code
 
32. E-mail Spoofing = Section 463 of Indian Penal Code
 
33. Making a false document = Section 464 of Indian Penal Code
 
34. Forgery for purpose of cheating = Section 468 of Indian Penal Code
 
35. Forgery for purpose of harming reputation = Section 469 of Indian Penal Code
 
36. Web-Jacking = Section 383 of Indian Penal Code
 
37. E-mail Abuse = Section 500 of Indian Penal Code
 
38. Punishment for criminal intimidation = Section 506 of Indian Penal Code
 
39. Criminal intimidation by an anonymous communication = Section 507 of Indian Penal Code
 
40. When copyright infringed = Copyright in a work shall be deemed to be infringed Sec.51
 
41. Offence of infringement of copyright or other rights conferred by this Act. Any person who knowingly infringes or abets the infringement of Section 63 of The Copyright Act
 
42. Enhanced penalty on second and subsequent convictions = Section 63A of The Copyright Act
 
43. Knowing use of infringing copy of computer programme to be an offence = Section 63B of The Copyright Act
 
44. Obscenity = Section 292 of Indian Penal Code
 
45. Printing etc. of grossly indecent or scurrilous matter or matter intended for blackmail = Section 292A of Indian Penal Code
 
46. Sale, etc., of obscene objects to young person = Section 293 of Indian Penal Code
 
47. Obscene acts and songs = Section 294 of Indian Penal Code
 
48. Theft of Computer Hardware = Section 378 of Indian Penal Code
 
49. Punishment for theft = Section 379 of Indian Penal Code
 
50. Online Sale of Drugs = NDPS Act
 
51. Online Sale of Arms = Arms Act

WAIT, Avoid Handshake Agreement for Growth

WAIT, Avoid Handshake Agreement for Growth

Majority of the SME business entities do not give any attention nor are intended keenly in executing any written contract forget about executing legal documents and most of the business is just done on Trust basis or you can say by keeping it simple by minimising documents at least. Well, trust was earlier had a great role to play in doing business and infact was a great way to deal with but with change in time the nature of doing business have also changed and also the factor which runs the market. It is also a fact that it is not wrong to say that executing legal document does calls for complicated paperwork and most of the SME business entities avoids getting into this complication of legal process. But is this the way to do the business and there is no risk? Well, it is very certain to say that it is a huge risk in doing the business with no written contract and some of the risks which can be discussed are as under:
  • Conflict between two business parties regarding payment method, product specification, service SLA, etc and this basically becomes the majority of times in relationship breakdowns and thereby customers and thereby goodwill and reputation in the market and devalue of brand image;
  • A business done without invoice comes with major risk of non-payment
There is no doubt that business done on Trust and no written contracts are good and simple but in an increasing complex legal environment it’s not worth taking these kinds of risks.
 
An experienced and skilled lawyer will any time provide the business entities with the right kinds of documents and infact can be of huge assistance in taking his guidance to develop the business templates which can be used in business on regular basis. The contracts if used properly can help business entities to minimise risk and maximise profit and also help in anticipating the risk in any business deal. The aim of any good law firm is to allow the business entities to just get on with business, rather than wasting time sorting out messes?
 
Written Contract, But Why?
 
• Two Parties entering into an document containing Terms and conditions gives a certainty of what product or service will be dealt with, how the payment will be taken care off, how to raise the invoices, other modalities of executing the business, raising of dispute, if any and so on. It is important to understand that if there is a terms and conditions being agreed upon for any commercial or non-commercial dealings, it completely set-out the intention and infact satisfy the contractual mindset which is popularly called as consensus-ad-idem and then there is no uncertainty about what the Parties’ rights and obligations are and this only saves a lot of time and cost if there is any conflict arises and having dispute resolution terms agreed upon only resolves the areas of disagreement between Parties if at all it comes up in a very friendly and amicable manner. In brief, having terms and conditions bring CERTAINTY of what to be done and to avoid, timeframes and so forth
 
• Having a clear terms and conditions being agreed upon between the Parties, it only gives a document which makes the Parties bound by such document and this helps majority times of any customers to make a wrong claim against another bound party and in case there is any dispute, Parties can take the assistance of their legal attorneys and take the clarity of their stand against the dispute being aroused and this ensure that no wrong claims are succeeded.
 
• It is widely accepted notion that a Business person has only two work to do in its business, Marketing and Innovation and else be taken care by its made system and hence executing Terms and Conditions only ensure protection of business and once there is a certainly in place and system in place to ensure having certainty, the Business Parties can focus on the doing the work and getting paid on time.
 
• Certainty document only gives the clear reading of various rights and duties as mentioned and agreed and this helps and enable the non-default party to make successful claims or purchase of goods in the event of any breach of agreed business terms.
 
• Having clear terms and conditions helps either parties to comply with Legal Obligations in all aspects and this also takes care of any customer related claims or IPR infringement claims and so on

Know Lok Adalat and its Relevancy

Know Lok Adalat and its Relevancy

1] What is a Lok Adalat?
Lok Adalats are nothing but a part of ADR (Alternate Dispute Resolution) which is organized by the various legal aid authorities like the State Legal Aid Authority, The District Legal Aid Authority, The Supreme Court legal services committee, High Court legal aid committees, Taluk legal aid committee. The Lok Adalats aid the resolution of disputes through conciliatory methods.
 
2] What are the Disputes to be resolved by Lok Adalat?
All disputes except serious criminal offences
 
3] What is the process to refer the case to Lok Adalat?
A case can be referred to a Lok Adalat by: (a) Parties to the Litigation with the permission of the court and by making an application by the Parties with its consent and (b) by the Court, if it is satisfied that the dispute is one that can be resolved by a Lok Adalat
 
4] Is decision arrived in Lok Adalat is valid in court of law?
Yes, the settlement that is arrived in Lok Adalat is deemed to have the status of a Decree under Laws of India. No appeal can be filed in any court against an award that has been given by a Lok Adalat except WRIT.
 
5] What are the Powers given to Lok Adalat?
The following powers have been given to Lok Adalat:
• Summoning (a person being called by an authority such as the Court.)and examining a witness on oath
• The discovery (the act of compelling the opposite side in a case to reveal information.)and production (the creation of utility.) of any document
• Accepting evidence on affidavit (A written declaration on oath which is sworn before a person or body who has the authority to oversee the oath.)
• The requisitioning (the act of requiring something to be furnished.)of any public record or any document or copy of such record or document from any court or public office
• Any other matters that are prescribed rules

Stop, Why Power of Attorney is DANGEROUS if not given thoughtfully?

Stop, Why Power of Attorney is DANGEROUS if not given thoughtfully?

If you have watched shows like “Suits” or “How to get away with murder” or other similar shows, you must have come across the term “Power of Attorney”. A common man’s understanding of power of attorney is different from its legal sense. So, what is Power of Attorney?
 
The definition of power of attorney lies in the “The powers of Attorney Act, 1882”. According to section 1A of the act, “Powers-of-Attorney” include any instrument empowering a specified person to act for and in the name of the person executing it. This means, a legal document which gives a person the power or legal authority to act for another person as their representative for banking, legal, financial investment, business and other purposes. Even though there is a separate central act pertaining to powers of attorney, the basic principles of such documents are governed by the various sections of the Indian Contract Act, 1872.
 
What is the need of Power of Attorney?
Sometimes it becomes almost impossible for a person to look after all its legal and business affairs; That can be a result of old age, poor health, lack of expertise or any other reason. This is when power of attorney comes to picture. It allows you to authorise a person to carry out either a particular act or all acts connected with your trade, business, employment etc. It acts as a helping tool for a person who is incapable of performing those acts due to above mentioned reasons.
 
Why Power of Attorney is dangerous if not given thoughtfully?
Power of Attorney include any instrument empowering a specified person to act for in the name of the person executing it. The concept of Power of Attorney is based on the legal maxim “Qui facit per alium facit per se” which means, he who acts through another does the act himself. It is no doubt that Power of Attorney is an extremely dangerous document which has high risks. Despite it being so dangerous and risky, power of attorney acts as a helping tool for people who cannot execute an act by themselves. This could be because the person is not physically present to execute the act as he lives abroad or is unwell, or that the person lacks the expertise in the area of which the act is to be executed, or it could be many other reasons.
 
To understand the importance of the power of attorney, let’s just assume that you live in USA, and want to sell your apartment which is in Mumbai. Now, it is not possible for you to go to Mumbai yourself and thus appoint your friend to execute the sale of our apartment. Here, you are giving the power of attorney to your friend, to execute the sale of your apartment. Your friend has the authority to sell the apartment to suitable buyers according to his own judgment. So, it would be wise to say that the power of attorney is a document on convenience for people who are old, medically ill, live far away and so on.
 
There are various types of power of attorney such as the General Power of Attorney (GPoA), Special Power of Attorney (SPoA), Durable Power of Attorney, Non-durable Power of Attorney, Revocable Power of Attorney and Irrevocable Power of Attorney. A principal can use any of these types according to his need. A GPoA, also called unlimited power of attorney is where the principal gives wide-ranging powers to the attorney or the agent which authorises them to do all acts connected with a particular trade, business or employment. For example- Z is the manager of B’s firm. Z’s authority extends to the doing of everything necessary for carrying out the business of B’s firm. Similarly, a SPoA is where the principal gives only specific powers to the attorney or the agent which authorises them to do only a single act. For example- A is employed by X, residing in Mumbai to recover a debt due to X in Delhi. A may adopt any legal process necessary for the purpose of recovering debt. Once the debt is recovered, special power of attorney comes to an end.
 
Coming to durable and non-durable power of attorney, a principal gives a durable power of attorney to an agent when he wants the power of attorney deed to continue even after his death. If there is no need for the power of attorney deed to continue after the death of the principal, it’s called non-durable power of attorney. Durable power of attorney is ideal for the elderly who stand a chance to become forgetful or mentally incapable due to illness or old age. Thus, durable and non-durable power of attorney is dependent on the time duration of the power of attorney deed. Lastly, there is revocable and irrevocable PoA. Power of attorney is said to be Revocable if it is revocable at the will of the principal and Irrevocable If it is not revocable at the will of the principal.
 
A busy adult may give someone trustworthy the Power of Attorney to make medical, banking, investment, financial legal decisions. Lawyers always suggest their client to give the power of attorney to someone who is trustworthy and loyal to them. One must give the power of attorney very thoroughly. This is because, the power of attorney deed is one of the most dangerous deed which could turn to a license to steal if the agent starts to act in bad faith and for his own interests. An agent has the ability to do anything that the principal would have and thus can sell a property, buy a property, can handle the bank accounts, can buy stocks and can even sell stocks.
 
Imagine, you give the power of attorney to a relative making him your agent, to make financial decisions on your behalf. If the agent is not trustworthy or loyal, he can go to your bank, withdraw some money and invest it in such place where you’d never approve of investing. Or else, the agent can even transfer the title of a property from your name to his name. Or just imagine what an agent could do if he has the authority to access your bank accounts and take banking decisions! When an agent abuses the power of attorney, it becomes license to steal authorised by you. You can always approach the court for relief, but you must understand, that it could take you years to get relief.
 
Choosing a person to give power of attorney is one of the most risky and important decision for a power of attorney deed as there is no limitations under the law that will restrict you from appointing a specific person as your Attorney. This decision could either make the power of attorney deed a bit in your favour or could be a subject to abuse of Power of Authority. There have been numerous cases where the agent changed colours and started to act against the Principal’s wishes which resulted in heavy loss for the principal. Power of Attorney makes the Principal liable for Agent’s action in the due course of the purpose. Thus, an agent’s fraud committed in the course of the power of attorney is equivalent to fraud committed by his principal.
 
For matters related to transfer of title of immovable property, the Supreme Court of India ruled that “a power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property.
 
It all comes down to one question- would you take the odds of giving the power of attorney to a person whom you trust? If yes, then would that person have General Power of Attorney (Unlimited PoA) for your business/trade/financial/legal/medical decisions? If yes, then would that person have the authority to be your agent even after your death? If no, then what should be the time period of your Power of Attorney deed? Answering these questions would give you a clearer idea on who to give power of attorney and what should be the essence of your power of attorney deed.

Understand Levying Of Housing Society Charges

Understand Levying Of Housing Society Charges

Housing societies collect the monthly maintenance from the member of the society to manage the various common expenses of the society like expenses of the security, cleaning of society, lift maintenance expenses, Electricity Expenses, water charges, small event expenses etc. The managing committee of Society has raised the monthly maintenance bill on the name of members and member of society oblige to pay the same maintenance charges. Apart from this monthly maintenance charges society also charged contribution to Repairs fund, sinking fund, parking charges, Non-occupancy charges and so on.
 
Collection of this above charges from the member of the society is quite difficult work for the managing committee of the society because many times what happen some people brought the flat only for the investment purpose and this type of flat remain vacate because Owner/Investor does not rent them out, so owner/investors are reluctant to pay the maintenance charges of such flats to the society. Other side the owner who are actually resides in their flat, many times they also fail to pay such maintenance charges of the society and member who has failed to pay dues for three consecutive months is considered a defaulter. The procedure of recovery of dues from the defaulter member should be follow as per the Maharashtra Co-operative Society Act, 1960.
 
Conflicts on apportion of share of maintenance Charges of the society on the basis of flat wise and Carpet area of flat.
 
There in lots of ambiguity, conflicts on levy of maintenance/Service charges and other society charges.
 
Let’s understand According to Model Bye Laws, the Apportion of the share of each towards the charges of the Society on the following basis
 
Type of Charges Vs Basis of apportion of share
  • Property taxes = As fixed by the Local Authority
  • Water Charges = On the basis of total number and size of inlets provided in each flat.
  • Expenses on repairs and maintenance of the building/buildings of the Society = At the rate fixed at the general body from time to time, subject to the minimum of 0.75 percent per annum, of the construction cost of each flat for meeting expenses of normal recurring repairs
  • Expenses on repairs and maintenance of the lift, including charges for running the lift = Equally by all the Members of the building in which lift is provided, irrespective of the fact whether they use the lift or not.
  • Sinking Fund = At the rate decided at the meeting of the general body, subject to the minimum of 0.25 per cent per annum of the construction cost of each flat incurred during the construction of the building of the Society and certified by the Architect, excluding the proportionate cost of the land.
  • Service Charges/Maintenance Charges = Equally divided by number of flats / units
  • Parking Charges = At the rate fixed by the General Body of the Society at its meeting
  • Interest on the delayed payment of Charges = At the rate fixed under the bye-law.
  • Non-occupancy charges = At the rate fixed under the bye-law.
  • Insurance Charges = The built up area of each flat / unit.
  • Lease Rent = The built up area of each flat / unit.
  • Non-Agricultural tax = The built up area of each flat / unit
  • Education & Training Fund = Rs. 10 per Flat/unit per month.
  • Election Fund = Equally by the Members and as prescribed by the Election Authority in the Rules.
  • Any other charges = As may be decided by the General Body Meeting of the Society
The Society monthly Service/Maintenance charges may include following charges
 
 Salaries of the office staff, lift-men, watchmen, Gardner and any other employees of the Society.
 Where the Society has independent Office, the property taxes, electricity charges, water charges etc. for the same.
 Printing, Stationery and Postage,
 Travelling Allowance and conveyance charges to the staff and the Members of the Committee of the Society.
 Sitting fees paid to the Members of the Committee of the Society,
 Subscription to the Education Fund of the Maharashtra Rajya Sahakari Sangh Ltd.
 Annual Subscription of the Housing Federation and any other co-operative institution to which the Society is affiliated.
 Entrance fees for affiliation to the Housing Federation and any other cooperative institution.
 Audit Fees for internal, Statutory and reaudit, if any.
 Expenses incurred at meetings of the general body, the Committee, the Sub-Committee, if any
 Retainer fees, legal charges, statutory enquiry fees.
 Common electricity charges.
 Any other charges approved by the General Body at its Meeting. However such charges should not contradict the provisions of the Act, Rules and Bye-laws of the Society.
 
Now we have seen the maintenance charges includes above expenses which is incurred on monthly or yearly basis. The question arise that on what basis (i.e. Flat carpet area wise or equal for all types of flat) have to charge to the member of society ??
 
You can see from the above expenses list, it is clear that the apportion of share of charges of this monthly expenditure cannot decide from the size of each flat as all these expenses are related to the cost of keeping the society premises clean or for the security of the society and other charges which are specifically related to whole society. These all expenses are not incurred for particular flat. So, logically, all these society maintenance expenses should be divided same among all member of the society.
 
There is the Bombay High Court judgment in response to a Writ Petition filed by Venus Co-op. Housing Society and another Versus Dr. J.Y. Detwani & others by Justice R.J. Kochar who delivered a 19 page judgment. In this case, the cooperative housing society had 284 flats of 2BHK and 39 flats of 4BHK. A resolution was passed that the monthly maintenance would be switched from flat-wise monthly charges to area-wise monthly charges. Due to this the 39 Flats of 4BHK flat owners had to pay more money per month towards the monthly charges. This gave rise to a controversy between the two groups of flat owners. The Bombay High Court passed the said judgment in this matter upholding the concept of equality and directed the concerned cooperative housing society to levy maintenance charges equally for all members.
 
In the year 2019, a Pune Co-Operative court has temporarily restrain the Karishma Cooperative housing Society in Kothrud from Collecting annual maintenance charges from its member on the basis of area or number of bedroom of flats till the final adjudicating of an ongoing dispute.
 
Even in the Model Bye-Laws of the Maharashtra Co-operative society Act, 1960 states that the Maintenance charges shall be equally divided by number of flats/units.
 
But still many societies’ managing committee charge the maintenance expenses on the basis of size of the flat instead of dividing equally among all flat.