A Hundi is a negotiable instrument written in an oriental (vernacular) language. The term ‘Hundi’ includes all indigenous negotiable instruments whether they are in the form of notes or bills. But they are mostly of the nature of bills of exchange. They are virtually inland bills of exchange and recognized by custom and law in India. The term comes from the Sanskrit word Hund which means to collect. It means that Hundis were used as means of collection of debts. Hundis are very popular among the Indian merchants and indigenous bankers from ancient times. The Negotiable Instruments act does not apply to Hundis. Hundis are governed by the custom and usages of the locality in which they are intended to be used. In case there is no customary rule known as to a certain point, the court can apply the rules of the Negotiable Instruments Act. It is also open Continue reading
Business Law
Group Insurance
Under the Group Insurance Scheme, the principle involved is more or less same as in the case of Life Insurance but the scheme is taken for a group of persons employed in an undertaking. In this scheme, the contract of life insurance can be summed up as an undertaking to pay specified amounts of money on the happening of certain contingencies in exchange for a previously agreed series of payments called premiums. This contract is between an employer and the Insurance Company and the contingencies where the death of employee in service or on survival to the retirement date. In the latter event the employer would possibly want some pension to be given for the post retirement life time of the employee. To offer cover of death risk, the system is to cover risk year by year. The employer is asked to pay the premium in advance and if death Continue reading
Managing Director (MD) under Companies Act
Section 2(26) of the Companies Act, 1956 defines a managing director as, “a director who, by virtue of an agreement with the company, or of a resolution passed by the company in general meeting, or by its Board of Directors, or by virtue of its Memorandum or Articles of Association, is entrusted with substantial powers of management which would not otherwise be exercisable by him, and includes a director occupying the position of a managing director, by whatever name called.” From the above definition it is clear that a managing director is also a director, but he enjoys substantial powers to act as the chief executive under the control and supervision of the Board. Thus, he is both a director and manager. As a director he takes a seat in the Board meeting and participates in the policy-making function. As a manager or chief executive, he is responsible for the Continue reading
Nature and Extent of Partner’s Authority to Bind the Firm by His Acts
Sections 18 declares that from the point of view of the third parties a partner is an agent of the firm for the purposes of the business of the firm. Even if only one partner acts on behalf of the firm liable. One partner can make all the other partners liable only if he acts within his express or implied authority. Thus, it is the express and implied authority of the partners which decides the nature and extent of their authority to kind the firm. Express authority of a partner When a partner is expressly authorized by an agreement of all the partners to do certain acts on behalf of the firm, it is called the express authority of a partner. A partner can kind the firm by any such act which falls width the scope of his authority, even if it does not fall within the scope of business. Continue reading
The Consumer Protection Act, 1986
The consumer protection Act, 1986 is a milestone in the history of socio-economic legislation in the country. It is one of the most progressive and comprehensive pieces of legislations enacted for the protection of consumers. It was enacted after in-depth study of consumer protection laws in a number of countries and in consultation with representatives of consumers, trade and industry and extensive discussions within the Government. The main objective of the act is to provide for the better protection of consumers. Unlike existing laws, which are punitive or preventive in nature, the provisions of this Act are compensatory in nature. The act is intended to provide simple, speedy and inexpensive redressal to the consumers’ grievances, and relief’s of a specific nature and award of compensation wherever appropriate to the consumer. The act has been amended in 1993 both to extend its coverage and scope and to enhance the powers of Continue reading
Meaning of Proxy Battles
Proxy battles take place when the agenda items at the meeting are likely to be opposed by dissident equity shareholders. Management of the company collect proxies to face these opponents in the meetings of the Board of Directors as well as shareholders. Meaning of Proxy Proxy is defined as a vote in deciding corporate issues in meetings and determining elections. Section 176 of the Companies Act, 1956 deals with the meaning, use and disposition of proxy, Section 176 is reproduced below: “176. Proxies — (1) Any members of a company entitled to attend and vote at a meeting of the company shall be entitled to appoint another and vote instead of himself; but a proxy so appointed shall not any right to speak at the meeting: Provided that, unless the articles otherwise provide: (a) this subsection shall not apply in the case of a company not having Continue reading