According to section 5 of the Negotiable Instruments Act, 1881, defines Bill Of Exchange as “A bill of exchange is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument.” A promise or order to pay is not “conditional”, within the meaning of this section and section 4, by reason of the time for payment of the amount or any installment thereof being expressed to be on the lapse of certain period after the occurrence of a specified event which, according to the ordinary expectation of mankind, is certain to happen, although the time of its happening may be uncertain. The sum payable may be “certain”, within the meaning of this section and section and section 4, although it includes Continue reading
Business Law
Corporate Governance and Clause 49 of the Listing Agreement
SEBI revise Clause 49 of the Listing Agreement pertaining to corporate governance vide circular date October 29th, 2004, which superseded all other earlier circulars issued by SEBI on this subject. All existing listed companies were required to comply with the provisions of the new clause by 31st December 2005. The major provisions included in the new Clause 49 are: The board will lay down a code of conduct for all board members and senior management of the company to compulsorily follow. The CEO an CFO will certify the financial statements and cash flow statements of the company. If while preparing financial statements, the company follows a treatment that is different from that prescribed in the accounting standards, it must disclose this in the financial statements, and the management should also provide an explanation for doing so in the corporate governance report of the annual report. The company will have Continue reading
Features of Life Insurance Contract
Human life is an income generating asset. This asset can be lost through unexpected death or made non functional through sickness or disability caused by an accident. On the other hand there is a certainty that death will happen, but its timing is uncertain. Life insurance protects against loss. Life insurance contract may be defined as the contract, whereby the insurer in consideration of a premium undertakes to pay a certain sum of money either on the death of the insured or on the expiry of a fixed period. The definition of the life insurance contract is enlarged by Section 2(ii) of the Insurance Act 1938 by including annuity business. Since, the life insurance contract is not an indemnity contract; the undertaking on the part of the insurer is an absolute one to pay a definite sum on maturity of policy at the death or an amount in installment for Continue reading
Application of General Rules of Law of Contracts to Life Insurance
A contract of insurance is a contract of utmost good faith technically known as uberrimae fide. The doctrine of disclosing all material facts is embodied in this important principles, which applies to all forms of insurance. The Proposer, who is one of the parties to the contract, is presumed to have means of knowledge, which are not accessible to the insurer, who is the other party to the contract. Therefore, the proposer is bound to tell the insurer, everything affecting the judgement of the insurer. In all contract of insurance, the proposer is bound to make full disclosure of all material facts and not merely those which he thinks material. Misrepresentation, non-disclosure or fraud in any document leading to acceptance of the risk automatically discharges the insurer from all liabilities under the contract. Application of General Rules of Law of Contracts to Life Insurance A contract of life insurance is Continue reading
The Money Laundering Act, 2002
The Money Laundering Act, 2002 was enacted to prevent money laundering and to provide for confiscation of property derived from, or involved in, money-laundering and for matters connected therewith or incidental thereto. The terms used in the Act are defined as under: (1) “intermediary” means a stock-broker, sub-broker, share transfer agent, banker to an issue, trustee to a trust deed, registrar to an issue, merchant banker, underwriter, portfolio manager, investment adviser and any other intermediary associated with securities market and registered under section 12 of the Securities and Exchange Board of India Act, 1992. (2) “proceeds of crime” means any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located; The term Money Laundering has been defined in Section 3 of the Act as Whosoever directly or Continue reading
Fire Insurance – Definition, Characteristics and Policy Types
Fire insurance is the oldest form of insurance. In the early development of industrial society, fire was the main source of energy. The industrial or commercial activities were not possible without fire. However, there was a need to insure the risk of uncontrolled or uncertain fire. Fire insurance is designed to provide for financial loss to property due to fire and a few other related hazards. The property that can be covered under fire insurance includes Building, Machinery, Equipments, Accessories, Goods, Raw Materials, Electrical Installation of building, Residential houses, Furniture and fittings, Pipelines located outside and inside the building. A contract of fire insurance is a contract whereby the insurer undertakes, in consideration of the premium paid, to make good any loss or damage caused by fire during a specific period. The fire insurance contract specifies the maximum amount which the assured can claim in case of loss. This amount Continue reading