Company Law_Doctrine of Constructive Notice

Doctrine of Constructive Notice

1. The Memorandum of Association (MOA) and Articles of Association (AOA) are Public documents and are easily available for inspection of public at the office of Registrar of Companies.
2. Under the doctrine of constructive notice, it is presumed that, the person dealing with a company has read these documents even if he failed to read the same.
3. In short, every person dealing with a Company is deemed to have “constructive notice” of contents of the company’s MOA & AOA
4. In case of Kotla Venkataswamy V/s Rammurthy (AIR 1934; Mad 579), the Hon’ble. Court had observed this doctrine of constructive notice.
• The Article of Association of a company laid down that all documents executed by a company required the signature of the managing director, the secretary and one working director.
• A deed of mortgage signed on behalf of the company in favour of the Plaintiff. However, the same had been signed by the secretary and one working director. 
• The dispute occurred between the parties in respect of validity of the deed of mortgage. 
• The Madras High Court held that the Plaintiff accepted a deed of mortgage executed by the secretary and a working director only. Now, the Plaintiff could not claim under this mortgaged deed as it was not duly executed as per the Articles of the company. She would have abstained from accepting a deed inadequately signed. 
5. It is a duty of every person dealing with a company to read the relevant provisions of these documents
6. The doctrine of constructive notice applies not only to MOA and AOA but also to all such documents which are required to be registered with Registrar of Companies.
7. The Section 399 of the Companies Act, 2013, provides that, when the MOA and AOA  registered with the Registrar of Companies, it become the Public Documents. These documents can be available to anyone on payment of fees.
8. Doctrine of constructive notice has sometimes resulted hardship and injustice to third parties because it does not take into account the realities of business life.
9. This doctrine looks unrealistic and imaginary and is a fiction created by the judicial pronouncement of the Courts.
10. This doctrine is an exception to the Constructive Notice Doctrine.

Transfer of Property Act_Doctrine of Election

Doctrine of Election 

1. Section 35 of the Transfer of Property Act, 1882 lays down the Doctrine of Election.
2. The meaning of term Election is to select  between two alternative rights or inconsistent rights. 
3. The Section 35 provides that, when a person who is a stranger to the property or having no authority over the property transfers the property to third person and by virtue of the same transaction confers some benefit to the owner in lieu of his property then it is the duty on the owner of the property to elect i.e. whether to retain the property or to accept the benefit. If he retains the property then he has to forfeit the benefit or in case, if he accepts the benefit then he has to forfeit the claim over the said property. 
4. The principle behind  the doctrine of election is that a person cannot approbate and reprobate at the same time. It means that, under this doctrine if a person accepts one thing then he/she has to accept it wholly and relinquish the other.  It means either the property or the benefit. If a person retains the property in that case he/she has to relinquish the benefit. In case, if he/she has accepts the benefit then he/she has to relinquish the claim over the property. 
5. The Privy Council in the case of Rungama V/s. Atchama, held that a party shall not at the same time affirm and disaffirm in the same transaction.
6. Example - P’ is a stranger/transferor who transfers the house worth Rs. 1 Lakh of ‘R’ the owner of the house to ‘S’, the transferee and in the same transaction confers benefit of Rs. 2 lakh on the owner ‘R’. Here ‘R’ as per the Section - 35 has the duty of election wherein he is having two options i.e. (i) to retain the property or, (ii) to accept the benefit.

Family Law II_Bars to Matrimonial Reliefs

Bars to Matrimonial Reliefs

• Section 23 of the Hindu Marriage Act, 1955 only provides the list of grounds/bars to matrimonial reliefs.
• There are mainly eight bars to matrimonial remedies. They are as follows -

1.  Doctrine of Strict Proof 
• The Court cannot merely pass a decree on the basis of admission of the Petition of the parties. 
• The court may refuse to pass a decree for judicial separation, if it felt that, it was violation of the requirement of doctrine of strict proof enacted in Section 23(1) 
2. Advantage of one’s own wrong or disability
• This bar enacted only in the HMA1955.
• This bars lays down that, if the Petitioner is directly or indirectly responsible for respondent’s wrong the petition cannot be granted.
3. Accessory
• This bar is applicable only when the Petition is filed on the ground of respondents’ adultery.
• Accessory is usually term used in criminal law. It indicates the active participation of the Petitioner in the crime of the Respondent. If such participation is proved then the petitioner cannot get a decree. 
4. Connivance 
• The term Connivance is originated from the word connive. It means “to wink at”. 
• Accessory and connivance have the same quality but in the former one there is an active participation by the Petitioner however, in the latter, there is corrupt intention but not active participation. 
• Once the intention is proved, the Petitioner cannot entitle a decree.
5. Condonation 
• Condonation is applicable to the matrimonial offences of adultery and cruelty.
• Condonation includes two essential components: forgiveness and reinstatement.
• Case - Dastane V/s Dastane - In this case the Husband presented the Petition for judicial separation on the ground of wife’s cruelty. However, he was continued to cohabit with wife and few months before presentation of Petition, a child was born. The Supreme Court specifically observed that, the act continuance of sexual intercourse between the parties was nothing but forgiveness and reconciliation.  And therefore it raised a presumption of condonation.
• It is applicable to all the matrimonial offences, since it is the general bar.
6. Collusion 
• We can say collusion means a secret understanding between the persons. 
• The burden of proof lies on the petitioner to prove that there is no collusion. 
• The foundation of the doctrine of collusion is on the rule that all those who want relief from the matrimonial court should approach before it with clean hands.
• Originally under the Hindu Marriage Act, collusion was a bar to all matrimonial reliefs, but the Marriage Laws (Amendment) Act has abolished collusion as a bar to the petition.
7. Delay
• Improper or unnecessary delay is bar to matrimonial reliefs under HMA, 1955. The Petition must be presented before the court within reasonable time. 
• The burden of proof that there has not been improper or unreasonable delay is on the Petitioner. 
8. Residue Clause, Any other legal ground
• It may be noted that, since this is general bar applicable to all matrimonial remedies. 
• The residue clause has not yet come up for interpretation before the Indian Courts.