CONTRACT -FORCE MAJEURE -COVID 19 HANG IN THERE- WE CAN DO THIS!

CONTRACT-FORCE MAJEURE-COVID 19 HANG IN THERE- WE CAN DO THIS!

Can corona virus repudiate the contract under the disguise of force majeure? 
Force majeure-It is a boilerplate clause in the contract, it sets free the parties to the contract when extraordinary event or an event beyond the control of the parties happens, ultimately lead to the impossibility of performance of the contract.

A force majeure/frustration clause can be exhaustive to include act of god, war, terrorism, earthquake, hurricane etc. If there is no such clause in the contract, the parties have to ascertain it from the nature and circumstances of the contract. Consequences of force majeure can be suspension of the obligations under the contract which may result in breach or termination of the contract causing distress to the parties. 

The outbreak of corona virus led the governments across the world to announce the closure of business, schools, and financial institutions to protect the people from virus, control the movement of people. However, few countries opted to run as usual. In all the times -basic necessaries have been kept open, few opted to work maintaining distance and others are forced to close down.
 

This being the scene of the crisis, can we trigger the force majeure and make the contracts impossible. 

The answer relates back to the question what contract is for? Does it completely affect?
Parties to the contract strive to re-consider their ability to perform the obligations under the contract. Check the obligations- is it beyond the control of the parties, the duty of care has been taken to avoid the impossibility of performance.

Ultimately, it depends upon the wording/drafting of the contract and circumstances of each case.  For instance- a recent judgement of the Delhi High Court in Ramanand and ors vs Dr.Girish soni and others, Date of decision 21 May 2020, court opined that, tenants can’t take advantage of the lockdown and they can pay rent since they are not vacating the premises. However some sort of relaxation to pay the rent is permitted.

It all depends upon the circumstances of each case.
How to deal with situation-
• Review the contract, amend the contract to carry on the contract if the performance is possible,
• Observe duty of care 
• If the performance is impossible and the fact should be brought to the notice of the other party as soon as possible and force majeure can be triggered.
• Have a record of government order, memorandum to constitute force majeure evidence. 
Despite above all, it is the good faith, trust and interest of the parties weighs the contract than the triggering the force majeure clause and opting disruption of the contract. Parties can review, alter the contract and move on to perform if it feasible.

Author: Nirmala Patil, Advocate

www.linkedin.com/in/nirmalapatil/

Negotiation is an Art

 

Negotiation is an art and can be developed by practice than learning. We all negotiate for salary, Role, Business deal, Agreement etc. Proper preparation and planning is needed for negotiating the deal and to achieve intended goal. Some hints for developing negotiation skills-

1. Be prepared- Before opening a business deal and start negotiation, be prepared as to goal and how to carry out. 

2. Begin with Smile-Smile is positive opening.

3. Low and clear tone, we need to avoid raising voice, speaking too fast. Make sure that other party is able to understand.

4. Eye contact, it builds confidence, trust.

5. Encourage other party to talk and be an active listener, don’t interrupt unnecessarily.

6. Seek Clarification in case of doubt, once the other party has finished their proposal or talk. Be open to discuss the queries.

7. Pay attention and note down details if necessary

8. Summaries the discussion to be clarified and it builds trust.

9. Use positive terms like, How can we do this, how it would affect our business.

10. Avoid questions that can be answered only with Yes or No. 

Ensure Win Win situation for both!

Author:Nirmala Patil Advocate 

Hostile witness and contradictions in Evidence

Hostile witness and contradictions in Evidence

AIR 2002 SC 3137

1) Balu Sonba Shinde Vs. State of Maharastra

Section – 154 – Hostile witness, ' His evidence need not be rejected ipso facto on that count. Parties can take advantage of the advantageous portion therein. However, Court has to be extremely cautious and circumspect in such acceptance.”

2] Cril. L. J. (1) 317 Dharyshil Vs. State of Maharastra

Hostile Witness : Merely because a witness turns hostile, his entire testimony cannot be thrown out.

(Meena Gopalkrishna Mudiliar Vs. State of Mah. 1993 Cr. L. J. 3624)

Where the party calling a witness declared him hostile and allowed to be cross-examined, it was held that he was not necessarily an unreliable witness and his evidence, if corroborated by other reliable evidence, can sustain conviction.]

(State of U. P. Vs. Ramesh Mishra AIR 1996SC 2766 )  It is equally settled law that the evidence of a hostile witness would not be totally rejected if spoken in favour of the prosecution or the accused, but it can be subjected to close scrutiny and that portion of the evidence which is consistent with the case of the prosecution or defence may be accepted.]

(Gurasingh vs. State of Rajasthan 2001Cr. L. J . 487 (SC) ( Anil Rai Vs. State of Bihar 2001Cr. L.J.3969 (SC) The testimony of witness who has turned hostileis not to be excluded entirely or rendered unworthy of consideration. His testimony remains admissible. A conviction can be based on it if it finds some corroboration.

Registration of Society / NGO

Registration of Society / NGO

Q 1What is meant by a Society or an Association? Why should it be registered?

Ans A Society / Association is an organized group of people with the sole aim and objectives of non-profitable service. Registration of such an association will have legal recognition. It will be possible to run society legally with discipline. Society can sue and be sued.

Q 2Who will register a Society/Association and where it can be registered?

Ans Registrar of Societies i.e., District Registrar of a District is appointed under Karnataka Societies Registration Act 1960 is the authority to register the societies. Society can be registered in the office of the Registrar in which District the society is intended to be established.

Q 3What is the minimum number of people to form a society or an Association?

Ans A minimum 7 persons who have attained the age of 18 years can form a society or an Association.

Q 4 For what purpose a society/association be formed?

Ans Association could be formed for the following purposes:1. Religious; 2. Educational, art and religious; 3. Sports; 4. Knowledge of commerce and industry; 5. Political education training; 6. Maintaining Library; 7. Collection/preservation of historical monuments, technical and philosophical research.

Q 5 What are the differences between `Trust' and `Society' registered under Karnataka Societies Registration Act 1960?

Ans Society Trust District Registrar and Registrar of Societies is competent authority to register. Trust deed can be registered in Office of the Sub Registrar. Aims and objectives are for the development/welfare of the whole society without restriction There are two kinds of Trusts. Public and Private. The latter is a private trust for the beneficiaries. Minimum of 7 persons are required to form Society. Any body can form Trust without restriction as to the number of persons. Executive committee runs it.Managing trustee runs it.Executive committee manages, subject to approval of general body. Management is under the control of management of Trustees and Managing Trustees. Accounts shall be filed to the Registrar of Societies. Does not apply.Thereis provision to admit members.Does not apply.In order to cancel an association action can be taken only after enquiry under Sec.27 Author of Trust can cancel Trust if he so wishes. If the provision is made in the deed. Profit cannot be distributed among the members. It can be used only for development of society. Trustees cannot share. Beneficiaries may be allowed to use the profit.

Q 6What are the documents to be filed for registration of a society?

Ans(a) Application(b) Proceedings of the first meeting(c) Memorandum of Association (d) List of members of Executive Committee with name, address, occupation, age and signature. (e) Bye-laws of the Association.

Q 7What should not be there in the name of the society?

AnsThe name shall not be1. Similar to one already existing 2. Name prohibited or registered by State or Central Government 3. Indian Institute or University Q 8What is the fee for registration of Society?Ans1. In Bangalore MRDA 1000-002. Other places 500-00 3. Women's Association/SC/ST Associations shall pay half of the fee mentioned at 1&2 above.

Q 9What are the follow up actions after registration of society?

Ans1. First General Body meeting should be held within 18 months;2. Society should get accounts audited by the Chartered Accountant and get it approved by the General Body every year and file it with the registrar within 14 days from the General Body meeting; 3. Society shall elect Executive Committee members as per its bye law.

Q 10 What is the fee to be paid for filing of accounts for approval?

Ans1. For every One lakh rupees of the amount of income and expenditure or part thereof Rs.100/- 2. Half of the fees mentioned above is payable for Associations belonging to SC/St and women.

Q 11 Is there provision to condone delay to file accounts on payment penalty? If so what is Quantum of penalty?

Ans1. If delay does not exceed one year, Rs.502. Where the delay exceeds one year, for each year of delay or part thereof; Rs.100/-

Q 12 Can memorandum, byelaws of society be amended? If so, what is the procedure?

Ans Memorandum can be amended by approval in a special General Body Meeting called for the purpose after giving due notice and by approval another special General Body Meeting called after 30 days again. Byelaws can be amended by approval of majority of members in Special General Body Meeting. Such amended byelaws shall be filed with the Registrar within one month.

Q 13 Can Registrar refuse to accept amendments if he feels they are against provisions of the Karnataka Societies Registration Act?

Ans Yes. However, there is a provision to appeal to the Karnataka Appellate Tribunal.

Q 14 Can a registered Society be cancelled or amalgamated with another Society?

Ans 1. Amalgamation (Sec.21):Proposal for amalgamation should be approved in specially called General Body meeting called after giving minimum of 21 days notice twice in a span of 30 days at a time.

2. Cancellation/Dissolution (Sec.22): Society can be cancelled or dissolved by approval of majority of members present in a specially called General Body Meeting. If there are any disputes within the members or with executive body, transactions etc., it can be resolved by approaching Civil Court.

Q 15 Can anybody other than member of Society inspect records of the Society and get copy of it ?

Ans Yes, since records of the Society are deemed to be public records. Under section 24 any person can get copy and produce as evidence.

Q 16 Can Registrar enquire into the affairs of a Society? If so on what account and occasion?

Ans Under section 25 of the Act, Registrar may make suo moto enquiry or on application by 2/3 of the executive committee members or 1/3 of total members. Such inquiries are held with reference to constitution, working or financial condition of the Society. The Registrar himself or any person appointed by him may hold inquiry.

Q 17 Can Registrar take action to recover the loss/misappropriation made by the members? Is there appeal against such action?

Ans Registrar can pass order to recover such loss or damage caused by members after giving opportunity to explain.

Q 18 Can registered societies be cancelled? Who can cancel? Is there provision for appeal?

Ans Yes. If a society is engaged in illegal activity, Registrar may enquire under Section 25 and cancel under Sec.27 after giving notice about such cancellation. Dissolution held as per Sec.22. Appeal may be preferred within 60 days from the date of order.

Q 19 Can an administrator be appointed to manage affairs of an Association? What is the procedure?

Ans If a society is unable to function and executive committee is unable to hold general body meeting or if there are serious allegations against the governing body, administrator can be appointed by the Government on recommendation by the Registrar.

Q 20 Can a member be held as guilty and be fined for illegal activity?

AnsA member can be fined under Sec.28 for an illegal act.

Q 21 Do ordinary members have right to urge for holding Special General Body fora specific purpose?

AnsYes. Special general body may be convened not later than 40 days after receipt of requisition by 1/3 of the members for specific purpose.

Classification of Lands in Karnataka

Classification of Lands

A Class

Lands having facilities for assured irrigation from such Government Canals and Government Tanks as are capable of supplying water for growing two crops of paddy or one crop of sugarcane in a year.

B Class

(i) Lands having facilities for assured irrigation from such Government Canals and Government Tanks as are capable of supplying water for growing only one crop of paddy in a year.

(ii) Lands irrigated by such lift irrigation projects constructed and maintained by the State Government as are capable of supplying water for growing two crops of paddy or one crop of sugarcane in a year.

C Class

(i) Lands irrigated from any Government sources of irrigation, including lift irrigation projects constructed and maintained by Government other than those coming under A Class and B Class.

(ii) Lands on which paddy crop can be raised or areca crop is grown with the help of rain water.

(iii) Lands irrigated by lifting water from a river or Government Canal or Government tank where the pumping installation or other device for lifting water is provided and maintained by the land owner.

Notes :- (1) Lands having facilities for irrigation from a Government Source where the system of water supply is suitable>

(2) Lands growing irrigated garden crop will come under classes A, B or C as the case may be depending upon the source of irrigation and the system of water supply.

D Class

Lands classified as dry but not having any irrigation facilities from a Government source.

Note.- Lands growing paddy or garden crops not coming under A Class, B Class or C Class shall belong to this class.

PART B

Formula of determining equivalent extent of different classes

One Acre of A Class land having soil classification value above 8 annas = 1.3 acres of A Class land having soil classification value below 8 annas = 1.5 acres of B Class land having soil classification value above 8 annas = 2.0 acres of B Class land having soil classification value below 8 annas = 2.5 acres of C class land having soil classification value above 8 annas = 3.0 acres of C class land having soil classification value below 8 annas = 5.4 acres of D Class land.

Land Ceiling in Karnataka

THE KARNATAKA LAND REFORMS ACT, 1961 Section 63. Ceiling on land. - (1) No person who is not a member of a family or who has no family shall, except as otherwise provided in this act, be entitled to hold, whether as land owner, landlord or tenant or as a mortgagee with possession or otherwise or partly in one capacity and partly in another, land in excess of the ceiling area.

1. Substituted by Act No. 34 of 1998 published in the Karnataka extraordinary Gazette on the 5th day of December 1998 w.e.f. 15-12-1998

(2) The ceiling area for a person who is not a member of a family or who has no family or for a family shall be ten units :

Provided that in the case of a family consisting of more than five members the ceiling area shall be ten units plus an additional extent of two units for every member in excess of five, so however that the ceiling area shall not exceed twenty units in the aggregate.

(2-A) The ceiling area for a person who is tenant under clause (b) of sub-section (2) of Section 5 shall be forty units.

(3) In the case of a family the ceiling area shall be applied to the aggregate of the lands held by all the members of the family, including the stridhana land.

(4) In calculating the extent of land held by a person who is not a member of a family but is a member of a joint family and also in calculating, the extent of land held by a member of a family who is also a member of a joint family, the share of such member in the lands held by a joint family shall be taken into account and aggregated with the lands, if any, held by him separately and for this purpose such share shall be deemed to be the extent of land which would be allotted to such person had there been a partition of the lands held by the joint family.

(5) In respect of lands owned or held under a private trust,-

(a) where the trust in revocable by the author of the trust, such lands shall be deemed to be held by such author or his successor in interest; and

(b) in other cases, such lands shall be deemed to be held by the beneficiaries of the trust in proportion to their respective interests in such trust or the income derived therefrom.

Explanation. - Where a trust is partly private and partly public this sub-section shall apply only to lands covered by that part of the assets of the trust which is relatable>

(6) In calculating the extent of land held by a person who is not a member of a family or who has no family or by a member of a family, the share of such person or member in the lands held by a co-operative farm shall be taken into account.

(7) (a) No educational, religious or charitable>

(b) If any question arises where the income from the land is solely appropriated for the institution, society or trust, it shall be decided by the prescribed authority. The decision of the prescribed authority shall be final. Where the prescribed authority decides that the income is not so appropriated, the land held by the institution, society or trust shall be deemed to be surplus land and the provisions of Sections 66 to 76 shall, so far as may be, apply to the surrender to and vesting in the State Government of such land. The provisions of this sub-section shall have effect notwithstanding anything in this Act.

(8) (a) No sugar factory shall hold land except solely for purpose of research or seed farm or both. Where land is held by a sugar factory for such purpose the ceiling area shall be fifty units.

(b) If any question arises whether any land held by a sugar factory is solely used for the purpose of research or seed farm or both, the decision of the prescribed authority shall be final and the land not held for the said purpose shall be deemed to be surplus land and the provisions of Sections 66 to 76 shall, so far as may be, apply to the surrender to and vesting in the State Government of such land. The provisions of this sub-section shall have effect notwithstanding anything contained in this Act.

(9) In the case of any person holding land cultivated by plantation crops, the ceiling area in respect of other land held by him shall be determined taking into consideration, the agricultural land referred to in item (ii) of the Explanation to Section 104.

(10) Notwithstanding anything in the preceding sub-section, if any person has,-

(i) after the 18th November, 1961 and before the 24th January,1971 transferred any land the extent of which if added to the other land retained by him could have been deemed to be surplus land before the date of commencement of the Amendment Act; or

(ii) after the 24th January, 1971 transferred any land, otherwise than by partition or by donation to the Karnataka Bhoodan Yagna Board established under the Karnataka Bhoodan Yagna Act, 1963 (Karnataka Act 34 of 1963) or by sale to the tenant of such land in conformity with any law for the time being in force, then in calculating the ceiling area which that person is entitled to hold, the area so transferred shall be taken into account and the land exceeding the ceiling area so calculated shall be deemed to be in excess of the ceiling area notwithstanding that the land remaining with him may not in fact be in excess of the ceiling area.

If by reason of such transfer the persons holding is less than the area so calculated to be in excess of the ceiling area, then all his lands shall be deemed to be surplus land and the provisions of Sections 66 to 76 shall, as far as may be, apply to the surrender to and vesting in the State Government of such excess land.

Explanation.- For purposes of this sub-section the land shall be deemed to have been transferred if, it has been transferred by act of parties whether by sale, gift, mortgage with possession, exchange, lease or any other kind of disposition made inter vivos.

Section 64. Future acquisition of land. Where on account of transfer, gift, purchase, exchange, mortgage with possession, lease, surrender or any other kind of transfer inter vivos or by bequest or inheritance, partition or otherwise, any land is acquired or comes into possession of any person or family after the date of commencement of the Amendment Act and in consequence thereof the total extent of land held by suchperson or family exceeds the ceiling area permitted under Section 63, the excess land shall be deemed to be surplus land, and the provisions of Sections 66 to 76 shall, as far as may be, apply, to the surrender to and vesting in the State Government of such excess land.

Explanation. - In this section bequest includes -

(i) gift made in contemplation of death; and

(ii) gift to take effect after the happening of any event.

Section 74. Prohibition of alienation of holding. -On and from the date of commencement of the Amendment Act no person owning land in excess of the ceiling limit specified in Section 63 or 64 shall alienate his holding or any part thereof by way of sale, gift, exchange or otherwise until he has furnished a declaration under Section 66 and the extent of land if any, to be surrendered in respect of that holding has been determined and an order has been passed under Section 67 and any alienation made in contravention of this section shall be null and void.

The Journey of Agreement to Contract

 

The Journey of Agreement to Contract.

All contract are agreements but not all agreements are contracts. The legality and enforcement point differentiates the agreement and contract. 

In business world contract plays vital role and let us discuss ingredients or checklist contract. 

Check list for Contracts-

1. Title –Business purchase, employment etc

2. Parties-Name and address

3. Date-execution and enforcement date if there is such event 

4. Recitals- How and why parties came together-Brief background-to clarify the need-it acts like preamble of the agreement

5. Term and conditions- 

Good or business purchase, how it can be delivered, who and when. Payment of money, what date, what mode –cheque, draft, online transfer etc

6. Notice-in case of non delivery or delay, non performance or breach how it can be communicated. To whom it to be addressed. 

7. Termination- When agreement stands terminated-on performance, by breach of one party, or Force majeure.

8. Boilerplate clauses-Assignment, Severability, Waiver, Non compete, confidentiality, non solicit clauses and  jurisdiction –which law is applicable and in case of dispute how it can be resolved, mention the detailed procedure to avoid the dilema. Remedies if any mentioned in contract.

9. Indemnification

10. Representation and warranties

11. Assignment 

12. Signatures of the parties

13. Required stamp duty to be paid

14. Registration

15. Attestation

Every clause has great value and need to be analysed, discussed, clarified while drafting to achieve the intended  purpose of parties.

Feel free to contact me for Contract queries.

Author : Nirmala Patil Advocate

DEED OF RECTIFICATION

End to end online documentation Click https://indialegal.co.in/

                                                   Deed of Rectification

This Deed is made on  _______________ Between

_______________, Age: ____________ years, R/o ______________ (Hereinafter called mortgagor) of the first part. And ________________________is represented by branch Manager (Hereinafter called mortgagor) of the Second part.

Whereas by deed of mortgage dated _______________ the above said ________________________ granted the loan facility of Rs.__________ (______________Rupees only) of the property detailed herein below:

Description of Property  :                               

Boundaries:

East:

West:

South:

North: 

The above said registered mortgage transaction deed has been registered at Document Serial No. ___________

before the sub Registrar Office ______in Book no._______

Volume No:  ______________

(Hereinafter called the Principal Deed)

AND WHEREAS certain mistakes have accidentally and inadvertently crept in the Principal Deed which requires rectification in the manner herein after appearing:

NOW THIS DEED Witnesses That the Principal deed shall be rectified and corrected in the following manner: 

In the Last page of mortgage deed, Number of the E-Swast mentioned as ______________

Whereas __________ is to be inserted and rectified.

We also agree that the Security afforded by us way of creating registered mortgage on ___________ shall remain in full force and effect until the sums due to the mortgage by the mortgagor/s under the terms of principal deed, either by way of this loan or otherwise are fully paid and discharged to the satisfaction of the mortgage and only thereafter the mortgage shall be bound to recover the said premises to the mortgage at the expenses of the mortgagor

We also agree and confirm that the other terms and conditions of the principal deed dated ____________ as such Rate of Interest, repayment Conditions of the Loan etc., remain unchanged

That as rectified and modified as aforesaid the Principal Deed shall remain in full force and effect.

In witness where of the parties hereto have executed and signed this Rectification Deed on _________