Defence of dispute in Insolvency and Bankruptcy Code, 2016

Existence of  dispute

Necessity of Court or Arbitration Proceedings in defence:

Relevant provisions of the Code insofar as operational creditors and their corporate debtors are concerned.

“3. Definitions. In this Code, unless the context otherwise requires,— xxx xxx xxx (12) “default” means non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not repaid by the debtor or the corporate debtor, as the case may be;

5. Definitions. In this Part, unless the context otherwise requires,— (6) “dispute” includes a suit or arbitration proceedings relating to—

(a) the existence of the amount of debt;

(b) the quality of goods or service; or

(c) the breach of a representation or warranty; xxx xxx xxx (20) “operational creditor” means a person to whom an operational debt is owed and includes any person to whom such debt has been legally assigned or transferred;

Continue reading “Defence of dispute in Insolvency and Bankruptcy Code, 2016”


What is a colourable legislation?

Doctrine of colourable legislation

The doctrine of colourable legislation does not involve any question of bona fides or mala fides on the part of the legislature. The whole doctrine resolves itself into the question of competency of a particular legislature to enact a particular law. If the legislature is competent to pass a particular law, the motives which impelled it to act are really irrelevant. On the other hand, if the legislature lacks competency, the question of motive does not arise at all. Whether a statute is constitutional or not is thus always a question of power. Continue reading “What is a colourable legislation?”

Principles of Interpretation: An Ebook.

Interpretation boom cover

Principles of interpretation: An ebook

Principles of interpretation is an ebook, written for beginners and expert alike for those interested in law. Reading laws i.e. bare legislation itself can be tedious. In law an ‘and’ is not always an ‘and’ but can be an ‘or’. ‘Shall’ can be read as ‘may be’ or ‘vice versa or a ‘must be’, depending upon the context. There are many other problems as to how to read a particular text. Reading any text can bring about two meanings, a narrow meaning or a liberal meaning. How to decide when to give liberal meaning and when to give narrow meaning. All such principles are discussed in the ebook.

The book cites precedents and mostly, live source of the judgement relied upon. A must for a beginner, a practising lawyer and a student alike.

About Principles of Interpretation:

Principles of interpretation are often not the law but they have force of law. Reading and understanding a legal document requires understanding the principles with which to read the document. An easy example is what if a particular passage is susceptible to two meanings or what if there is no punctuation or if punctuation is there and it changes the meaning. It is said that there is no greater irony than to read anything literally and thus misreading it completely.
This book deals with most of the established principles of interpretation of laws and other legal documents including popular maxims in India, as accepted by the Courts with reference to reported cases and its citations.

Principles of Interpretation is available on Google Play Books

Click on the picture to read a free sample of Google Play Books

Interpretation boom cover

and Amazon Kindle Books Store: Click on the picture to buy this ebook:

What is the meaning of word “production” and “manufacture”?

Extraction if amounts to manufacture or production?

Does extraction and processing of iron ore  amount  manufacture or production of any article or thing?

Production means amongst other things that which is produced; a thing that results from any action, process or effort, a product; a product of human activity or effort”. From the wide definition of the word “production”, it has to follow that mining activity for the purpose of production of mineral ores would come within the arnbit of the word “production” since ore is “a thing”, which is the result of human activity or effort.

In CIT v. N. C. Budharaja and Co. (1993) 204 ITR 412 (SC): AIR 1993 SC 2529: 1994 SCC Supl. (1) 280 it was held that the word ,production” is much wider than the word “manufacture”. It was said (page 423) :

“The word production has a wider connotation than the word manufacture. While every manufacture can be characterized as production, every production need not amount to manufacture …. Continue reading “What is the meaning of word “production” and “manufacture”?”

Legislative intent is presumed to be reasonable.

Principles of Interpretation

Presumption is that legislature acts by reason and justice.

It is proper to assume that the lawmakers who are the representatives of the people enact laws which the society considers as honest, fair and equitable. The object of every legislation is to advance public welfare. In other words as observed by Crawford in his book on Statutory Constructions the entire legislative process is influenced by considerations of justice and reason. Justice and reason constitute the great general legislative intent in every piece of legislation. Consequently where the suggested construction operates harshly, ridiculously or in any other manner contrary to prevailing conceptions of justice and reason, in most instances, it would seem that the apparent or suggested meaning of the statute, was not the one intended by the law-makers. In the absence of some other indication that the harsh or ridiculous effect was actually intended by the legislature, there is little reason to believe that it represents the legislative intent.

“We are unable to persuade ourselves to believe that the legislature intended to ignore the rights of persons having legal title to possession and wanted to make a gift of any building to a trespasser howsoever recent the trespass might have been if only he happened to be in physical possession of the building on the date of vesting. We are also unable to discern any legislative policy in support of that construction.”

Bhudan Singh vs Nabi Bux, AIR 1970 SC 1880, (1969) 2 SCC 481, 1970 2 SCR 10

Inherent powers of the courts to do justice

All courts exist to do justice

All courts, whether civil or criminal possess, in the absence of any express provision, as inherent in their constitution, all such powers as are necessary to do the right and to undo a wrong in course of administration of justice on the principle “quando lex aliquid alicui concedit, concedere videtur et id sine quo res ipsae esse non potest” (when the law gives a person anything it gives him that without which it cannot exist). Continue reading “Inherent powers of the courts to do justice”

Theft of immovable property.

Squatting in property if a theft?

Ronald Alexander Hobby (“Petitioner”) was charged with, and convicted of, theft of property valued in excess of $100,000 and related offenses arising out of his unauthorized occupancy of a home for a period of approximately seven months. He held on to property on the basis of a lease document from the landlady, who denied its execution, on oath.

Defence disputing theft:

Petitioner contends that the evidence is insufficient to support a conviction for theft “in any amount.” Petitioner argues that a theft of a house did not occur, as the house was not asported to another location, and thus, the evidence is insufficient “to prove the mode of theft specifically set forth in the indictment.” Alternatively, Petitioner contends that the State failed to prove that he deprived Brathwaite (Landlady) and Severn Bank (Mortgagee) of the property through deception because there was no prospective purchaser or lessee “displaced” as a result of his occupancy; i.e., there was no deprivation and thus no theft. Petitioner also asserts that the State failed to prove that he exerted unauthorized control over the property, as his action in occupying the home as a “squatter” did not constitute theft under the theory of “exerting unauthorized control.”<!–nextpage–>

Discussion/enunciation of law of Maryland about theft:

C.L. § 7-104 of the Maryland Code prohibits theft committed in several ways, including the following two: (a) Unauthorized control over property. – A person may not willfully or knowingly obtain or exert unauthorized control over property, if the person: (1) intends to deprive the owner of the property; (2) willfully or knowingly uses, conceals, or abandons the property in a manner that deprives the owner of the property; or (3) uses, conceals, or abandons the property knowing the use, concealment, or abandonment probably will deprive the owner of the property. (b) Unauthorized control over property – By deception. – A person may not obtain control over property by willfully or knowingly using deception, if the person: (1) intends to deprive the owner of the property; (2) willfully or knowingly uses, conceals, or abandons the property in a manner that deprives the owner of the property; or (3) uses, conceals, or abandons the property knowing the use, concealment, or abandonment probably will deprive the owner of the property. “Obtain” is defined, in relevant part, in C.L. § 7-101(g) as “(1) in relation to property, to bring about a transfer of interest in or possession of the property[.]” “Property,” as used in the theft statute, “means anything of value[,]” C.L. § 7-101(i)(1), and includes “real estate” as well as “a thing growing on or affixed to, or found on land, or part of or affixed to any building[.]” C.L. § 7-101(2)(i) and (2)(vi). Contra Sheffield v. State, 708 So.2d 899, 900, 902, 906, 910 (Ala. Crim. App. 1997), cert. denied, 708 So.2d 911 (Ala. 1997) (The Court of Criminal Appeals of Alabama held that a person could not steal real property, specifically an “interest in land,” because Alabama‟s theft statute failed to explicitly include “real property” within the definition of “property”; the Court further observed: “[I]n most states, the evolution of [the types of property that can be the subject of theft and theft-related offenses] has produced a broader definition of „property‟ than it has in Alabama–a definition that, in most instances, explicitly and specifically includes real property.”). In Maryland, the common law crime of larceny was traditionally defined as “the intentional taking, without legal warrant, of the personal property of another with the unlawful intention to deprive the owner of such property.” Murray v. State, 214 Md. 383, 386, 135 A.2d 314, 315 (1957) (citation and internal quotation marks omitted) (emphasis added). “[M]odern [theft] statutes[, however,] have generally covered other kinds of property as well.” Wayne R. LaFave, Substantive Criminal Law § 19.4 (2d ed.) (updated Oct. 2013). In Maryland, “[b]y chapter 849 of the Acts of 1978, . . . the General Assembly . . ., effective July 1, 1979, consolidated a number of theft-related offenses . . . into a single newly created statutory offense known as theft.” Jones v. State, 303 Md. 323, 326, 493 A.2d 1062, 1063 (1985).3 By Chapter 849 of the Acts of 1978, the General 3 The consolidated theft statute “combin[ed] what were previously seven separate larceny offenses into the one crime of theft[,]” including “larceny, larceny by trick, larceny after trust, embezzlement, false pretenses, shoplifting, and receiving stolen (Continued…) Assembly expanded the common law definition of “property” to include, among other things, “real estate” and “things growing on or affixed to, or found on land, or part of or affixed to any building[.]” 1978 Md. Laws 2466. That definition remains in force today. The theft statute distinguishes between “personal property” and “property,” as seen in C.L. § 7-104(c), which, in contrast to C.L. § 7-104(a) and (b), narrowly prohibits possessing stolen personal property; specifically, pursuant to C.L. § 7-104(c), “[a] person may not possess stolen personal property knowing that it has been stolen, or believing that it probably has been stolen[.]” (Emphasis added). The modern consolidated theft statute does not distinguish, however, between “movable” and “immovable” property, as does the Model Penal Code. See Model Penal Code § 223.2. In addition, the modern consolidated theft statute does not require asportation4 of property. See Charles E. Moylan, Jr., Maryland‟s Consolidated Theft Law and Unauthorized Use § 4.2, 24 (2001) (“Significantly missing from the current definition of theft‟s proscribed acquisition, however, are common law larceny‟s requirements of a trespassory taking (the caption) and a carrying away (asportation).”)

It was concluded:

We reject Petitioner‟s argument that theft of the house did not occur as the house remains at its original location and was not asported to another location. Petitioner confuses the common law crime of larceny with theft under the modern consolidated theft statute. Asportation, or the carrying away or removal of property, is not required under the modern consolidated theft statute. See C.L. § 7-104; Moylan, supra, at 24. Stated otherwise, the State is not required to demonstrate that Petitioner carried away the house from its original location to prove that Petitioner committed theft of the house. And, the indictment did not aver that Petitioner carried away the home. As to theft of the house pursuant to C.L. § 7-104(b)–theft by deception–viewing the evidence in the light most favorable to the State (as we must), we are convinced that the evidence is sufficient to support the conclusion that Petitioner committed theft by obtaining control and possession of the property through deception, and, specifically, that Petitioner brought about the physical transfer of possession of the house located at 2742 Kirk Drive through deception.

To be a dwelling, the place must be of human habitation, that is, a “place to sleep in[.]”

A structure does not become a dwelling until someone occupies it. Once a dwelling, however, the structure does not lose its character as a dwelling simply because it is left vacant for a time. The length of the vacancy, moreover, does not, of itself, disturb the character of the place as a dwelling. “Certain it is that the dweller and his entire household may be away for months, without depriving the house of its character as his dwelling.” Id. at 127, 962 A.2d at 1002 (citations omitted). We observed: To be sure, burglary does not require that the dwelling be occupied by its residents at the time of the breaking; however, the law distinguishes a temporarily unoccupied dwelling house from a building [that], although at times used as a dwelling, has at the time of the breaking been abandoned by its occupants. The former is a proper subject of burglary; the latter is not.

Source: Hobby v. State  [Maryland (USA) Court of Appeal]

Interpretation of judgement

A judgement should not be read as a statute.

Judgement in the context:

Every judgment must be read as applicable to the particular facts proved or assumed to be proved, since the generality of the expressions, which may be found that they are not intended to be expositions of the whole law but governed or qualified by the particular facts of the case, in which such expressions are to be found. (per Lord Halsbury in Quinn v. Leathem, 1901 AC 495.)

Judgement as precedent:

In London Graving dock co. Ltd. vs. Horton (1951 AC 737 at p. 761), Lord Mac Dermot observed:

The matter cannot, of course, be settled merely by treating the ipsissima vertra of Willes, J. as though they were part of an Act of Parliament and applying the rules of interpretation appropriate thereto. This is not to detract from the great weight to be given to the language actually used by that most distinguished judge.

In Home Office vs. Dorset Yacht Co. (1970 (2) All ER 294) Lord Reid said:

Lord Atkin`s speech is not to be treated as if it was a statute definition it will require qualification in new circumstances.

Megarry, J. in (1971) 1 WLR 1062 observed:

One must not, of course, construe even a reserved judgment of Russell L. J. as if it were an Act of Parliament.

In Herrington v. British Railways Board (1972 (2) WLR 537) Lord Morris said:

There is always peril in treating the words of a speech or judgment as though they arewords in a legislative enactment, and it is to be remembered that judicial utterances aremade in the setting of the facts of a particular case. Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper.

The following words of Lord Denning in the matter of applying precedents have become locus classicus:

Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect, in deciding such cases, one should avoid the temptation to decide cases (as said by Cardozo, J. ) by matching the colour of one case against the colour of another. To decide therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive.

*** *** ***

Precedent should be followed only so far as it marks the path of justice, but you must cut the dead wood and trim off the side branches else you will find yourself lost in thickets and branches. My plea is to keep the path of justice clear of obstructions which could impede it.

Judgement be read in the context of facts:

Court should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of Courts are neither to be read as Euclid`s theorems nor as provisions of the statute and that too taken out of the context. These observations must be read in the context in which they appear to have been stated. Judgments of Courts are not to be construed as statutes. To interpret words, phrases and provisions of a statute, it may become necessary for judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes.
Bharat Petroleum Corporation Ltd. v. N.R.Vairamani, AIR 2004 SC 4778.

Changes in meaning of words and phrases.

Dahalia looking for meaning

Meaning changes with time:

Change in meaning of words with change in setting and passage of time.

A phrase begins life as a literary expression; its felicity leads to its lazy repetition; and repetition soon establishes it as a legal formula, undiscriminatingly used to express different and sometimes contradictory ideas.
The phrase ‘assumption of risk’ is an excellent illustration of the extent to which uncritical use of words bedevils the law.
Thus, in the setting of one set of circumstances, ‘assumption of risk’ has been used as a shorthand way of saying that although an employer may have violated the duty of care which he owed his employee, he could nevertheless escape liability for damages resulting from his negligence if the employee, by accepting or continuing in the employment with ‘notice’ of such negligence, ‘assumed the risk’. In such situations ‘assumption of risk’ is a defense which enables a negligent employer to defeat recovery against him. In the setting of a totally different set of circumstances, ‘assumption of risk’ has a totally different meaning. Industrial enterprise entails, for all those engaged in it, certain hazards to life and limb which no amount of care on the part of the employer can avoid. In denying recovery to an employee injured as a result of exposure to such a hazard, where the employer has in no sense been negligent or derelict in the duty owed to his employees, courts have often said that the employee ‘assumed the risk.’ Here the phrase ‘assumption of risk’ is used simply to convey the idea that the employer was not at fault and therefore not liable.
[Source: TILLER vs. ATLANTIC COAST LINE R. CO., 318 U.S. 54: 63 S.Ct. 444: 87 L.Ed. 610 (per Frankfurter J.)]

A word is not a crystal, transparent and unchanged, it is the skin of a living thought and may vary greatly in color and content according to the circumstances and the time in which it is used.


[Source: Towne v. Eisner, 245 U.S. 418, 425 (1918) (per Holmes, J.)]