General and commercial law
This query is : Resolved
22 November 2012
Hi
Sections 124 to 145 of the Companies Act, 1956 deal with registration of charges by companies. The subject can be conveniently divided in five topics :-
Filing of particulars of charge created.
Filing of particulars of modification of charge.
Filing of particulars of series of debentures.
Filing of particulars of satisfaction of charge.
Condonation of delay in filing of particulars of charges created / modified / satisfied.
CREATION OF CHARGE (Section 125)
If a charge created by the company falls within any of the classes as specified in section 125 (4), its particulars shall be filed with the Registrar of Companies Act, 1956 within 30 days of creation of charge. If particulars of charge could not be filed within 30 days, the ROC has power to extend the said period by 30 more days subject to payment of additional filing fee by the Company.
Particulars of creation of charge shall be filed in Form No. 8 & 13, in 3 sets, alongwith all the papers / instruments relating to creation of charge. Form No. 8 includes the following details :
• Description of instrument creating the charge
• Amount secured
• Property charged
• Terms & conditions of charge
• Name & address of person entitled to charge
Registrar of Companies (ROC) will verify the particulars filed under Form No. 8 & 13 and thereafter shall register charge which is conclusive evidence of compliance with the requirements as to registration of the charge. ROC shall deliver 2 sets duly registered under seal and signature, one for lender and second for borrower.
Sections 124 to 145 of the Companies Act, 1956 deal with registration of charges by companies. The subject can be conveniently divided in five topics :-
Filing of particulars of charge created.
Filing of particulars of modification of charge.
Filing of particulars of series of debentures.
Filing of particulars of satisfaction of charge.
Condonation of delay in filing of particulars of charges created / modified / satisfied.
CREATION OF CHARGE (Section 125)
If a charge created by the company falls within any of the classes as specified in section 125 (4), its particulars shall be filed with the Registrar of Companies Act, 1956 within 30 days of creation of charge. If particulars of charge could not be filed within 30 days, the ROC has power to extend the said period by 30 more days subject to payment of additional filing fee by the Company.
Particulars of creation of charge shall be filed in Form No. 8 & 13, in 3 sets, alongwith all the papers / instruments relating to creation of charge. Form No. 8 includes the following details :
• Description of instrument creating the charge
• Amount secured
• Property charged
• Terms & conditions of charge
• Name & address of person entitled to charge
Registrar of Companies (ROC) will verify the particulars filed under Form No. 8 & 13 and thereafter shall register charge which is conclusive evidence of compliance with the requirements as to registration of the charge. ROC shall deliver 2 sets duly registered under seal and signature, one for lender and second for borrower.
22 November 2012
MORTGAGE:
A mortgage as defined under Sec 58 of the Transfer of Property Act, 1882: (a) A mortgage is the transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.
The different types of Mortgage are:
Simple mortgage- Where, without delivering possession of the mortgaged property, the mortgagor binds himself personally to pay the mortgage-money, and agrees, expressly or impliedly, that, in the event of his failing to pay according to his contract, the mortgagee shall have a right to cause the mortgaged property to be sold and the proceeds of sale to be applied, so far as may be necessary, in payment of the mortgage-money, the transaction is called a simple mortgage and the mortgagee a simple mortgagee.
Mortgage by conditional sale- Where, the mortgagor ostensibly sells the mortgaged property-
on condition that on default of payment of the mortgage-money on a certain date the sale shall become absolute, or
on condition that on such payment being made the sale shall become void, or
on condition that on such payment being made the buyer shall transfer the property to the seller,
the transaction is called a mortgage by conditional sale and the mortgagee a mortgagee by conditional sale.
Provided that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document which effects or purports to effect the sale.
· Usufructuary mortgage- Where the mortgagor delivers possession or expressly or by implication binds himself to deliver possession of the mortgaged property to the mortgagee, and authorises him to retain such possession until payment of the mortgage-money, and to receive the rents and profits accruing from the property or any part of such rents and profits and to appropriate the same in lieu of interest or in payment of the mortgage-money, or partly in lieu of interest or partly in payment of the mortgage-money, the transaction is called a usufructuary mortgage and the mortgagee a usufructuary mortgagee.
· English mortgage-Where the mortgagor binds himself to repay the mortgage-money on a certain date, and transfers the mortgaged property absolutely to the mortgagee, but subject to a proviso that he will re-transfer it to the mortgagor upon payment of the mortgage-money as agreed, the transaction is called an English mortgage.
· Mortgage by deposit of title-deeds-Where a person in any of the following towns, namely, the towns of Calcutta, Madras, and Bombay, and in any other town which the State Government concerned may, by notification in the Official Gazette, specify in this behalf, delivers to a creditor or his agent documents of title to immovable property, with intent to create a security thereon, the transaction is called a mortgage by deposit of title-deeds.
· Anomalous mortgage- A mortgage which is not a simple mortgage, a mortgage by conditional sale, a usufructuary mortgage, an English mortgage or a mortgage by deposit of title-deeds within the meaning of this section is called an anomalous mortgage.
A mortgage as defined under Sec 58 of the Transfer of Property Act, 1882: (a) A mortgage is the transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.
The different types of Mortgage are:
Simple mortgage- Where, without delivering possession of the mortgaged property, the mortgagor binds himself personally to pay the mortgage-money, and agrees, expressly or impliedly, that, in the event of his failing to pay according to his contract, the mortgagee shall have a right to cause the mortgaged property to be sold and the proceeds of sale to be applied, so far as may be necessary, in payment of the mortgage-money, the transaction is called a simple mortgage and the mortgagee a simple mortgagee.
Mortgage by conditional sale- Where, the mortgagor ostensibly sells the mortgaged property-
on condition that on default of payment of the mortgage-money on a certain date the sale shall become absolute, or
on condition that on such payment being made the sale shall become void, or
on condition that on such payment being made the buyer shall transfer the property to the seller,
the transaction is called a mortgage by conditional sale and the mortgagee a mortgagee by conditional sale.
Provided that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document which effects or purports to effect the sale.
· Usufructuary mortgage- Where the mortgagor delivers possession or expressly or by implication binds himself to deliver possession of the mortgaged property to the mortgagee, and authorises him to retain such possession until payment of the mortgage-money, and to receive the rents and profits accruing from the property or any part of such rents and profits and to appropriate the same in lieu of interest or in payment of the mortgage-money, or partly in lieu of interest or partly in payment of the mortgage-money, the transaction is called a usufructuary mortgage and the mortgagee a usufructuary mortgagee.
· English mortgage-Where the mortgagor binds himself to repay the mortgage-money on a certain date, and transfers the mortgaged property absolutely to the mortgagee, but subject to a proviso that he will re-transfer it to the mortgagor upon payment of the mortgage-money as agreed, the transaction is called an English mortgage.
· Mortgage by deposit of title-deeds-Where a person in any of the following towns, namely, the towns of Calcutta, Madras, and Bombay, and in any other town which the State Government concerned may, by notification in the Official Gazette, specify in this behalf, delivers to a creditor or his agent documents of title to immovable property, with intent to create a security thereon, the transaction is called a mortgage by deposit of title-deeds.
· Anomalous mortgage- A mortgage which is not a simple mortgage, a mortgage by conditional sale, a usufructuary mortgage, an English mortgage or a mortgage by deposit of title-deeds within the meaning of this section is called an anomalous mortgage.
22 November 2012
In our common usage, most of us use the term “judgment”, but what does it actually refer to? How is it different from a decree or an order? s.2(9) of the Code of Civil Procedure (CPC) defines a judgment. It states that a “judgment” means the statement given by the judge on the grounds of a decree or order. When is a judgment pronounced? S. 33 of the CPC tells us that a Court, after the case has been heard, shall pronounce judgment, and on such judgment a decree shall follow. S.33 indicates that a decree follows a judgment.
From s.2(9), we understand that judgment is the statement of the Court on the grounds for having arrived at a decision. Every judgment delivered by a Court to which the CPC applies has to deliver a reasoned judgment. A judgment must contain the following components:
1. a crisp statement of facts of the case;
2. the points or issues for determination;
3. the decision on such issues and finally
4. the reasons for such a decision
Is this a mandatory requirement? Yes it is, but why? There are several reasons based on public interest and practical necessities. A judgment is meant to be adhered to by those to whom it applies and such people have a right to know the reasons of the Court for holding a particular point of view. This also helps them challenge the decision and the reasons for the decision in a higher forum. Again, when it goes to a higher forum, the appellate forum too has to have an opportunity to know the reasons for a decision which proves application of the mind by the Judge concerned. Must a judgment always be passed on all issues in a case? No, the decision or order of a Court on a preliminary issue too is a judgment.
From s.2(9), we understand that judgment is the statement of the Court on the grounds for having arrived at a decision. Every judgment delivered by a Court to which the CPC applies has to deliver a reasoned judgment. A judgment must contain the following components:
1. a crisp statement of facts of the case;
2. the points or issues for determination;
3. the decision on such issues and finally
4. the reasons for such a decision
Is this a mandatory requirement? Yes it is, but why? There are several reasons based on public interest and practical necessities. A judgment is meant to be adhered to by those to whom it applies and such people have a right to know the reasons of the Court for holding a particular point of view. This also helps them challenge the decision and the reasons for the decision in a higher forum. Again, when it goes to a higher forum, the appellate forum too has to have an opportunity to know the reasons for a decision which proves application of the mind by the Judge concerned. Must a judgment always be passed on all issues in a case? No, the decision or order of a Court on a preliminary issue too is a judgment.
22 November 2012
Now, let us move to “decree”. S.2(2) defines decree to mean the formal expression of an adjudication which, so far as the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final. “Formal expression” means the recordation of the ruling of the Court on the matter presented before it; “so far as the Court expressing it” alludes to the fact that the same issue cannot be adjudicated by or before the Court again but only before a higher forum i.e. an appellate forum (We shall discuss “review” of a decree in a later post). What is the starting point for a decree? It is the initiation of a suit from a plaint. Only a plaint may lead to a decree unless otherwise required by certain statutes under which an application is treated as a suit. Under Order 20, Rule 6 a decree must be drawn separately after a judgment. It must be understood that no matter what a particular document is ostensibly referred to as, if it starts with a plaint in a suit and fulfils the requirements of a decree, it shall be a decree.
The Code recognises certain categories of “deemed decrees”. A deemed decree is one which, though not fulfilling the essential features of a decree as required by the Code, has been expressly categorised as a decree by the legislature. The rejection of a plaint and the determination of questions under s.144 are “deemed decrees”. Only those rejections which are authorised by the CPC may be termed as decrees. What this means is an appeal may lie from the rejection of a plaint for a decree has been passed. Alternately, the Code does not bar remedying the situation by presenting a fresh plaint.
The difference between a preliminary and final decree though fairly straightforward has been the subject matter of debate. A final decree here means disposal of the suit; if a decree has been passed but the suit has not been completely disposed off, then the decree is a preliminary one. A preliminary decree is usually passed where the Court waits for the situation to mature itself to a stage where a final decree may be passed. It is usually passed in suits for possession and mesne profits, suits for pre-emption etc.
The Code recognises certain categories of “deemed decrees”. A deemed decree is one which, though not fulfilling the essential features of a decree as required by the Code, has been expressly categorised as a decree by the legislature. The rejection of a plaint and the determination of questions under s.144 are “deemed decrees”. Only those rejections which are authorised by the CPC may be termed as decrees. What this means is an appeal may lie from the rejection of a plaint for a decree has been passed. Alternately, the Code does not bar remedying the situation by presenting a fresh plaint.
The difference between a preliminary and final decree though fairly straightforward has been the subject matter of debate. A final decree here means disposal of the suit; if a decree has been passed but the suit has not been completely disposed off, then the decree is a preliminary one. A preliminary decree is usually passed where the Court waits for the situation to mature itself to a stage where a final decree may be passed. It is usually passed in suits for possession and mesne profits, suits for pre-emption etc.
22 November 2012
How is a decree different from an order? What is an order? S.2(14) defines order to mean the formal expression of any decision of a Court which is not a decree. The starting point for an order need not always be a plaint, it may be an application or petition. Though being a formal expression, it follows that an order need not conclusively determine the rights of parties on any matter in dispute. However, it may relate to the matters in controversy. There may be a preliminary decree, but not a preliminary order. Every decree is appealable but every order is not. Only orders under s.104 are appealable. Again, a second appeal lies to the High Court from a first appeal, but there is no second appeal from appealable orders.
How is a decree different from an order? What is an order? S.2(14) defines order to mean the formal expression of any decision of a Court which is not a decree. The starting point for an order need not always be a plaint, it may be an application or petition. Though being a formal expression, it follows that an order need not conclusively determine the rights of parties on any matter in dispute. However, it may relate to the matters in controversy. There may be a preliminary decree, but not a preliminary order. Every decree is appealable but every order is not. Only orders under s.104 are appealable. Again, a second appeal lies to the High Court from a first appeal, but there is no second appeal from appealable orders.
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