The General Clauses Act, 1897 – CA Inter Law Study Material

The General Clauses Act, 1897 – CA Inter Law Study Material is designed strictly as per the latest syllabus and exam pattern.

The General Clauses Act, 1897 – CA Inter Law Study Material

Definitions (Sec. 3)

Question 1.
What is “Financial Year” under the General Clauses Act, 1897?
Answer:
Financial Year:

• As per Sec. 3(21) of the General Clauses Act, 1897, ‘Financial Year’ shall mean the year commencing on the first day of April.
• The term year has been defined u/s 3 (66) as a year reckoned according to the British calendar. Thus as per General Clauses Act, Year means calendar year which starts from January to December.
• Hence, in view of the both above definitions, it can be concluded that Financial Year is a year which starts from first day of April to the end of March.

Question 2.
What is “Immovable Property” under the General Clauses Act, 1897?
Answer:
Immovable Property:
As per Sec. 3(26) of the General Clauses Act, 1897, ‘Immovable Property’ shall include:

1. Land,
2. Benefits to arise out of land, and
3. Things attached to the earth, or permanently fastened to anything attached to the earth.

Example, trees are immovable property because trees are benefits arise out of the land and attached to the earth. However, timber is not immovable property as the same are not permanently attached to the earth. In the same manner, buildings are immovable property.

Question 3.
State what do you understand by the term ’Document1 as per the General Clauses Act, 1897? Discuss which of the following will be treated as document?
(i) Power of attorney.
(ii) Cheque [MTP-March 18]
Answer:
Meaning of Document:
As per Sec. 3(18) of the General Clauses Act, 1897, ‘Document’ shall include any matter written, expressed or described upon any substance by means of letters, figures or marks or by more than one of those means which is intended to be used or which may be used, for the purpose or recording that matter.

Based on the above stated definition, following conclusion may be drawn:

1. Power of attorney is a document.
2. Cheque upon a banker is also a document.

Question 4.
X owned a land with fifty tamarind trees. He sold his land and the timber (obtained after cutting the fifty trees) to Y. X wants to know whether Hie sate of timber tantamount to sale of immovable property. Advise him with reference to provisions of “General Clauses Act 1897”. [May 18 (4 Marks); RTP-Nov. 19; MTP-April 19, Oct. 19, March 21]
Answer:
Immovable Property:
As per Sec. 3(26) of the General Clauses Act, 1897, ‘Immovable Property’ shall include:

1. Land,
2. Benefits to arise out of land, and
3. Things attached to the earth, or permanently fastened to anything attached to the earth.

It is an inclusive definition. It contains four elements: land, benefits to arise out of land, things attached to the earth and things permanently fastened to anything attached to the earth. Where, in any enactment, the definition of immovable property is in the negative and not exhaustive, the definition as given in the General Clauses Act will apply to the expression given in that enactment.

In the instant case, X sold land along with timber (obtained after cutting trees) of fifty tamarind trees of his land.

Conclusion: According to the above definition. Land is immovable property; however, timber cannot be immovable property since the same are not attached to the earth.

Question 5.
What do you understand by the term ‘Good Faith’. Explain as per the provisions of the General Clauses Act, 1897. [MTP-Aug. 18; March 19]
Or
Define the following term with reference to the General Clauses Act, 1897: Good Faith. [Nov. 20 (2 Marks)]
Answer:
Meaning of Good Faith:

• As per Sec. 3(22) of the General Clauses Act, 1897, a thing shall be deemed to be done in “good faith” where it is in fact done honestly, whether it is done negligently or not.
• The term “Good faith” has been defined differently in different enactments. This definition of the good faith does not apply to that enactment which contains a special definition of the term “good faith” and there the definition given in that particular enactment has to be followed.
• The question of good faith under the General Clauses Act is one of fact. It is to determine with reference to the circumstances of each case. Thus, anything done with due care and attention, which is not mala fide is presumed to have been done in good faith.

Question 6.
Define the term “Affidavit” under the General Clauses Act, 1897. [Nov. 19 (3 Marks)]
Or
Define the following terms with reference to the General Clauses Act, 1897: Affidavit. [Nov. 20 (2 Marks)]
Answer:
Meaning of Affidavit:
As per Sec. 3(3) of the General Clauses Act, 1897, the term ‘Affidavit’ shall include affirmation and declaration in the case of persons by law allowed to affirm or declare instead of swearing.

There are two important points derived from the above definition:

1. Affirmation and declaration,
2. In case of persons allowed affirming or declaring instead of swearing.

The above definition is inclusive in nature. It states that Affidavit shall include affirmation and declarations. This definition does not define affidavit However, we can understand this term in general parlance. Affidavit is a written statement confirmed by oath or affirmation for use as evidence in Court or before any authority.

Question 7.
What do you understand by the term “Good Faith’. Explain it as per the provisions of the General Clauses Act, 1897. Mr, X purchased a watch from Mr. Y carelessly without proper enquiry. Whether the purchase made could said to be made in good faith. [Nov. 19 (4 Marks)]
Answer:
Meaning of Good Faith:
As per Sec. 3(22) of the General Clauses Act, 1897, a thing shall be deemed to be done in “good faith” where it is in fact done honestly, whether it is done negligently or not.

The term “Good faith” has been defined differently in different enactments. This definition of the good faith does not apply to that enactment which contains a special definition of the term “good faith” and there the definition given in that particular enactment has to be followed. This definition may be applied only if there is nothing repugnant in subject or context, and if that is so, the definition is not applicable.

The question of good faith under the General Clauses Act is one of fact. It is to determine with reference to the circumstances of each case. Thus, anything done with due care and attention, which is not mala fide is presumed to have been done in good faith.

In the given situation, Mr. X purchased a watch from Mr. Y carelessly without proper enquiry. Such a purchase made could not be said to be made in good faith as it was done without due care and attention as is expected with a man of ordinary prudence. An honest purchase made carelessly without making proper enquiries cannot be said to have been made in good faith so as to convey good title.

Question 8.
Mrs. K went to a Jewellery shop to purchase diamond ornaments. The owners of Jewellery shop are notorious and indulging in smuggling activities. Mrs. K purchased diamond ornaments honestly without making proper enquiries. Was the purchase made in Good faith as per the provisions of the General Clauses Act, 1897 so as to convey good tide? [Nov. 20 (2 Marks)]
Answer:
Purchases made in Good faith:
As per Sec. 3(22) of the General Clauses Act, 1897, a thing shall be deemed to be done in “good faith” where it is in fact done honestly, whether it is done negligently or not.

The definition of good faith as is generally understood in the civil law and which may be taken as a practical guide in understanding the expression in the Indian Contract Act, 1872 is that nothing is said to be done in good faith which is done without due care and attention as is expected with a man of ordinary prudence. An honest purchase made carelessly without making proper enquiries cannot be said to have been made in good faith so as to convey good title.

In the instant case, the purchase of diamond ornaments by Mrs. K from a Jewellery Shop, the owners of which are notorious and indulged in smuggling activities, made in good faith, will not convey good title.

Question 9.
“The act done negligently shall be deemed to be done in good faith.” Comment with the help of the provisions of the General Clauses Act, 1897. [Jan. 21 (3 Marks), MTP-March 22]
Answer:
Concept of Good Faith:

• Good Faith in general, is anything done with due care and attention, which is not mala fide is presumed to have been done in good faith.
• As per Sec. 3(22) of the General Clauses Act, 1897, a thing shall be deemed to be done in “good faith” where it is in fact done honestly, whether it is done negligently or not.
• The question of good faith under the General Clauses Act is one of fact. It is to determine with reference to the circumstances of each case.
• It is therefore understood that the General Clauses Act, 1897 considers the honesty in doing the Act as a primary test to constitute the thing done in good faith and therefore the act done honestly but with negligence may also be termed as done in good faith as per the General Clauses Act, 1897.
• The term “Good faith” has been defined differently in different enactments. This definition of the good faith does not apply to that enactment which contains a special definition of the term “good faith” and there the definition given in that particular enactment has to be followed. This definition may be applied only if there is nothing repugnant in subject or context, and if that is so, the definition is not applicable.

Question 10.
Income-tax Act, 1961 provides that the gratuity paid by the government to its employees is fully exempt from tax. You are required to explain the scope of ttte term ’government’ and clarify whether the exemption from gratuity income will be available to the State Government Employees? Give your answer in accordance with the provisions of the General Clauses Act 1897. [Jan. 21 (2 Marks)]
Answer:
Scope of the term ‘Government’:

• As per Sec. 3(23) of the General Clauses Act, 1897, ‘Government’ or ‘the Government’ shall include both the Central Government and State Government.
• Hence, wherever, the word ‘Government’ is used, it will include Central Government and State Government both.

Conclusion: When the Income-tax Act, 1961, provides that gratuity paid by the government to its employees is fully exempt from tax, the exemption from gratuity income will be available to the State Government employees also.

Question 11.
Elucidate the term “Commencement” as per die General Clauses Act, 1897, [MTP-April 21]
Answer:
Meaning of term ‘Commencement’:

• As per Sec. 3(13) of the General Clauses Act, 1897, “Commencement” used with reference to an Act or Regulation, shall mean the day on which the Act or Regulation comes into force.
• Coming into force or entry into force (also called commencement) refers to the process by which legislation; regulations, treaties and other legal instruments come to have a legal force and effect.
• A law cannot be said to be in force unless it is brought into operation by legislative enactment, or . by the exercise of authority by a delegate empowered to bring it into operation. The theory of a statute being “in operation in a constitutional sense” though it is not in fact in operation has no validity.

Question 12.
Mr. Apar and Mr. New, both aspiring Chartered Accountants have met in a conference for CA students. Both are having an argument about the meaning of Financial Year. They have approached you as a senior in the profession to guide them about the meaning of Financial Year as per the provisions of the General Clauses Act, 1872. Also, brief them about the difference between a calendar year and financial year. [RTP-May 21]
Answer:
Meaning of Financial Year:

• As per Sec. 3(21) of the General Clauses Act, 1897, financial year shall mean the year commencing on the first day of April.
• The term Year has been defined u/s 3(66) as a year reckoned according to the British calendar. Thus, as per General Clauses Act, Year means calendar year which starts from January to December.
• Difference between Financial Year and Calendar Year: Financial year starts from first day of April but Calendar Year starts from first day of January.

Question 13.
A confusion, regarding the meaning of ‘financial year’ arose among the finance executive and accountant of a company. Both were having different arguments regarding the meaning of financial year & calendar year. What is the correct meaning of financial year under the provision of the General Clauses Act, 1897? How it is different from Calendar Year? [Dec. 21 (4 Marks)]
Answer:
Meaning of Financial Year:

• As per Sec. 3(21) of the General Clauses Act, 1897, financial year shall mean the year commencing on the first day of April.
• The term Year has been defined u/s 3(66) as a year reckoned according to the British calendar. Thus, as per General Clauses Act, Year means calendar year which starts from January to December.

Difference between Financial Year and Calendar Year:
Financial Year starts from first day of April but Calendar Year starts from first day of January.

Question 14.
Give the definition of Hie following as per the General Clauses Act, 1897: [Dec, 21 (3 Marks)]

1. “Rule”
2.  “Oath’’
3. “Person”

Answer:
Definitions:

1. Rule: ‘Rule’ shall mean a rule made in exercise of a power conferred by any enactment, and shall include a Regulation made as a rule under any enactment. [Sec. 3(51)]
2. Oath: ‘Oath’ shall include affirmation and declaration in the case of persons by law allowed to affirm or declare instead of swearing. [Sec. 3(37)]
3. Person: ‘Person’ shall include any company, or association, or body of individuals, whether incorporated or not. [Sec. 3(42)]

Question 15.
What is the meaning of the following as per provisions of the General Clauses Act, 1897? [MTP-April 22]

1. Movable Property
2.  Person

Answer:
Definitions:

1. Movable Property: As per Sec. 3(36) of the General Clauses Act, 1897, ‘Movable Property’ shall mean property of every description, except immovable property. Thus, any property which is not immovable property is movable property. Debts, share, electricity are movable property.
2. Person: As per Sec. 3(42) of the General Clauses Act, 1897, ‘Person’ shall include any company or association or body of individuals, whether incorporated or not.

General Rules of Construction (Sec. 5 to Sec. 13)

Question 16.
When does an enactment is said to have come into operation if the Act has not specified any particular date of its enforcement Explain with the help of an example as per the provisions of the General Clauses Act, 1897. [MTP-March 18]
Answer:
Coming into operation of enactment:
As per Sec. 5 of the General Clauses Act, 1897, where any Central Act has not specifically mentioned a particular date to come into force, it shall be implemented on the day on which it receives the assent of the Governor General in case of a Central Acts made before the commencement of the Indian Constitution and/or, of the President in case of an Act of Parliament

Example: The Companies Act, 2013 received assent of President of India on 29th August, 2013 and was notified in official gazette on 30th August, 2013 with the enforcement of Sec. 1 of the Act. Accordingly, the Companies Act, 2013 came into enforcement on the date of its publication in the Official Gazette.

Question 17.
Excel Ltd. declared dividend for its shareholder in its Annual General Meeting held on 30th Sep. 2021. Under the provisions of the Companies Act, 2013, company is required to pay declared dividend within 30 days from the date of declaration. As per the provisions of the General Clauses Act, 1897, discuss what will be the commencement and termination time for posting of declared dividend. [MTP-March 18, Oct 18]
Answer:
Commencement and termination time for posting of declared dividend:
As per Sec. 9 of the General Clauses Act, 1897, in any legislation or regulation, it shall be sufficient, for the purpose of excluding the first in a series of days or any other period of time to use the word “from” and for the purpose of including the last in a series of days or any other period of time, to use the word “to”.

Sec. 127 of the Companies Act, 2013 uses the words, ‘thirty days from’. Thus, in the given situation Excel Ltd. is required to pay declared dividend within 30 days from the date of declaration i.e. from 01.10.2021 to 30.10.2021. In this series of 30 days, 30.09.2021 will be excluded and last 30th day i.e. 30.10.2021 will be included.

Question 18.
Explain briefly any four effects by repeal of an existing Act by central legislation enumerated in Sec. 6 of The General Clauses Act, 1897. [May 18 (4 Marks)]
Or
Explain the provision related to ‘Effect of Repeal’ as per the General Clauses Act,1897. [May 22 (3 Marks)]
Answer:
Effects by repeal of an existing Act by central legislation:
As per Sec. 6 of the General Clauses Act, 1897, where any Central legislation or any regulation made after the commencement of this Act repeals any Act made or yet to be made, unless another purpose exists, the repeal shall not:

• Revive anything not enforced or prevailed during the period at which repeal is effected or;
• Affect the prior management of any legislation that is repealed or anything performed or undergone or;
  Affect any claim, privilege, responsibility or debt obtained, ensued or sustained under any legislation so repealed or;
• Affect any punishment, forfeiture or penalty sustained with regard to any offence committed as opposed to any legislation or
• Affect any inquiry, litigation or remedy with regard to such claim, privilege, debt or responsibility or any inquiry, litigation or remedy may be initiated, continued or insisted.

Question 19.
As per the provisions of the Companies Act, 2013, a whole time Key Managerial Personnel (KMP) shall not hold office in more than one company except its subsidiary company at the same time. Referring to the Sec. 13 of the General Clauses Act, 1897, examine whether a whole time KMP can be appointed in more than one subsidiary company? [Nov. 20 (4 Marks); MTP-Aug. 18]
Answer:
Words in singular shall include the plural:
Sec. 203(3) of the Companies Act, 2013 provides that whole time KMP shall not hold office in more than one company except in its subsidiary company at the same time. With respect to the issue that whether a whole time KMP of holding company be appointed in more than one subsidiary companies or can be appointed in only one subsidiary company.

It can be noted that Sec. 13 of General Clauses Act, 1897 provides that the word ‘singular’ shall include the ‘plural’, unless there is anything repugnant to the subject or the context.

Conclusion: A whole time KMP may hold office in more than one subsidiary company as per the present law.

Question 20.
Komal Ltd. declares a dividend for its shareholders in its AGM held on 27th September, 2021. Referring to provisions of the General Clauses Act, 1897 and Companies Act, 2013, advice;
(i) The dates during which Komal Ltd. is required to pay the dividend?
(ii) The dates during which Komal Ltd. is required to transfer the unpaid or unclaimed dividend to unpaid dividend account? [Nov. 18 (4 Marks), MTP-May 20]
Answer:
Commencement and termination time:
As per Sec. 9 of the General Clauses Act, 1897, in any legislation or regulation, it shall be sufficient, for the purpose of excluding the first in a series of days or any other period of time to use the word “from” and for the purpose of including the last in a series of days or any other period of time, to use the word “to”.

(i) Payment of dividend:
In the given instance, Komal Ltd. declared dividend for its shareholder in its AGM held on 27.09.2021. Under the provisions of Sec. 127 of the Companies Act, 2013, a company is required to pay declared dividend within 30 days from the date of declaration, i.e. from 28.09.2021 to 27.10.2021. In this series of 30 days, 27.09.2021 will be excluded and last 30th day, i.e. 27.10.2021 will be included. Accordingly, Komal Ltd. will be required to pay dividend within 28.09.2021 and 27.10.2021 (both days inclusive).

(ii) Transfer of unpaid or unclaimed divided:
As per the provisions of Sec. 124 of the Companies Act, 2013, where a dividend has been declared by a company but has not been paid or claimed within 30 days from the date of the declaration, to any shareholder entitled to the payment of the dividend, the company shall, within 7 days from the date of expiry of the said period of 30 days, transfer the total amount of dividend which remains unpaid or unclaimed to a special account to be opened by the company in that behalf in any scheduled bank to be called the “Unpaid Dividend Account” (UDA). Therefore, Komal Ltd. shall transfer the unpaid/unclaimed dividend to UDA within the period of 28th October, 2021 to 3rd November, 2021 (both days inclusive).

Question 21.
Referring to the provisions of the General Clauses Act, 1897, find out toe day/date on which the following Act/Reguiation comes into force. Give reasons also,
(1) An Act of Parliament which has not specifically mentioned a particular date.
(2) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Fifth Amendment) Regulations, 2015 was issued by SEBI vide Notification dated 14to August, 2015 with effect from 1st fanuary, 2016. [May 19 (2 Marks), MTP-Oct. 18, RTP-Nov. 20]
Answer:
Coming into operation of enactment:
(1) As per Sec. 5 of the General Clauses Act, 1897, where any Central Act has not specifically mentioned a particular date to come into force, it shall be implemented on the day on which it receives the assent of the President in case of an Act of Parliament.

(2) If any specific date of enforcement is prescribed in the Official Gazette, the Act shall come into enforcement from such date.

Thus, in the given question, the SEBI (Issue of Capital and Disclosure Requirements) (Fifth Amendment) Regulations, 2015 shall come into enforcement on 1st January, 2016 rather than the date of its notification in the gazette.

Question 22.
The Companies Act, 2013 provides that the amount of dividend remained unpaid/unclaimed on expiry of 30 days from the date of declaration of dividend shall be transferred to unpaid dividend account within 7 days from the date of expiry of such period of 30 days, If the expiry date of such 30 days is 30,10.2021, decide the last date on or before which the unpaid/unclaimed dividend amount shall he required to be transferred to a separate bank account in the light of the relevant provisions of title General Clauses Act, 1897? [May. 19 (2 Marks)]
Answer:
Commencement and termination time for posting of declared dividend:
Sec. 9 of the General Clauses Act, 1897, provides that, for computation of time, in any legislation or regulation, it shall be sufficient, for the purpose of excluding the first in a series of days or any other period of time to use the word “from” and for the purpose of including the last in a series of days or any other period of time, to use the word “to”.

As per the facts of the question the company shall transfer the unpaid/unclaimed dividend to unpaid dividend account within the period of 7 days. 30th October 2021 will be excluded and 6th November 2021 shall be included, i.e. 31st October, 2021 to 6th November, 2021 (both days inclusive).

Question 23.
‘Repeal’ of provision is different from ‘deletion’ of provision. Explain as per the General Clauses Act, 1897. [Nov. 18 [2 Marks), MTP-Oct. 19, Nov. 20]
Answer:
‘Repeal’ of provision is different from ‘deletion’ of provision:

• In Navrangpura Gam Dharmada Milkat Trust Vs. Rmtuji Ramaji, it was held that ‘Repeal’ of provision is in distinction from ‘deletion’ of provision.
• ‘Repeal’ ordinarily brings about complete obliteration (abolition) of the provision as if it never existed, thereby affecting all incoherent rights and all causes of action related to the ‘repealed’ provision.
• ‘Deletion’ ordinarily takes effect from the date of legislature affecting the said deletion, never to effect total effecting or wiping out of the provision as if it never existed.

Question 24.
There are two ways to reach city A from city B. Hie distance between the two cities by roadways is 100 kms and by water ways 80 kms. How is tike distance measured for tike purpose of any Central Act under the provisions of the General Clauses Act, 1897? [Nov. 20 (2 Marks)]
Answer:
Measurement of Distances:
As per Sec. 11 of the General Clauses Act, 1897, in the measurement of any distance, for the purposes of any Central Act or Regulation made after the commencement of this Act, that distance shall, unless a different intention appears, be measured in a straight line on a horizontal plane.

Question 25.
FK and VK had a long dispute regarding the ownership of a land for which a legal suit was pending in the court. The court fixed the date of hearing on 29.04.2021, which was announced to be a holiday subsequently by the Government What will be the computation of time of the hearing in this case under the General Clauses Act, 1897? [Jan. 21 (2 Marks)]
Answer:
Computation of time:
As per Sec. 10 of the General Clauses Act, 1897, where by any legislation or regulation, any act or proceeding is directed or allowed to be done or taken in any court or office on a certain day or within a prescribed period then, if the Court or office is closed on that day or last day of the prescribed period, the act or proceeding shall be considered as done or taken in due time if it is done or taken on the next day afterwards on which the Court or office is open.

In the given situation, the court fixed the date of hearing of dispute between PK and VK, on 29.04.2021, which was subsequently announced to be a holiday.

Conclusion: Based on the above stated provisions, it can be concluded that the hearing date of 29.04.2021, shall be extended to the next working day.

Question 26.
Examine the validity of the following statements with reference to the General Clauses Act, 1897:
(i) Insurance Policies covering immovable property have been held to be immovable property.
(ii) The word “bullocks” could be interpreted to include “cows”. [July 21 (4 Marks)]
Answer:
(i) Insurance Policies covering immovable property have been held to be immovable property:
This statement is not valid. Insurance policy is a written document containing an agreement between the insurer and insured. It includes a matter intended to be used or may be used for the purpose or recording of the matter. Hence, the insurance policies covering immovable property is not covered under the definition of immovable property.

(ii) The word ‘bullocks’ could be interpreted to include ‘cows’:
This statement is not valid. Where a word connoting a common gender is available but the word used conveys a specific gender, there is a presumption that the provisions of General Clauses Act, 1897 do not apply. Thus, the word ‘bullocks’ could not be interpreted to include ‘cows’.

Question 27.
Ajit was supposed to submit an appeal to High Court of Kolkata on 30th March, 2022, which was the last day on which such appeal could be submitted. Unfortunately, on that day High Court was closed due to total Lockdown all over India due to Covid-19 pandemic. Examine the remedy available to Ajit under the provisions of the General Clauses Act, 1897. [July 21 (3 Marks)]
Answer:
Computation of time:
As per Sec. 10 of the General Clauses Act, 1897, where by any legislation or regulation, any act or proceeding is directed or allowed to be done or taken in any court or office on a certain day or within a prescribed period then, if the Court or office is closed on that day or last day of the prescribed period, the act or proceeding shall be considered as done or taken in due time if it is done or taken on the next day afterwards on which the Court or office is open.

In the given situation, Ajit was supposed to submit an appeal to High Court on 30th March 2022, which was the last day of filing the same. On that day High Court was closed due to total lockdown all over India.

Conclusion: Based on the above stated provisions, Ajit can submit an appeal on the day on which the High Court is open.

Question 28.
Examine the validity of the following statements with reference to the General Clauses Act, 1897:
(i) ‘Things attached to the earth’ have been held to be immovable property.
(ii) The word “bullocks” could be interpreted to include “cows”. [MTP-March 22]
Answer:
(i) ‘Things attached to the earth’ have been held to be immovable property:
This statement is valid. As per section 3(26) of the General Clauses Act, 1897, ‘Immovable Property’ shall include: (1) Land, (2) Benefits to arise out of land, and (3) Things attached to the earth, or (4) Permanently fastened to anything attached to the earth. It is an inclusive definition. The four elements to the definition includes ‘things permanently fastened to anything attached to the earth’. Hence, the given statement is correct.

(ii) The word ‘bullocks’ could be interpreted to include ‘cows’:
This statement is not valid. Where a word connoting a common gender is available but the word used conveys a specific gender, there is a presumption that the provisions of General Clauses Act, 1897 do not apply. Thus, the word ‘bullocks’ could not be interpreted to include ‘cows’.

Power And Functionaries (Secs. 14 to 19)

Question 29.
Examine the validity of the following statements with reference to the General Clauses Act, 1897: Board of Directors of Sabarwal Construction Private Limited authorised by passing resolution in board meeting Mr. Munim to appoint five employees for accounts department of company. Mr. Munim appointed five employees including Mr. Rupal who was relative of one of the director of company. After one month, Mr. Munim observed that Mr. Rupal was not performing his duties honestly. Mr. Munim issued the order of dismissal of Mr. Rupal with proper reasons. Mr. Rupal filed a petition in the court that his dismissal order is not valid as Board of Directors had authorised Mr. Munim only for appointment of employees not for dismissal. Whether is Mr. Rupal correct with his words? [MTP-April 22]
Answer:
Power to Appoint to Include Power to Suspend or Dismiss:
As per the provisions of Sec. 16 of the General Clauses Act, 1897, the authority having for the time being power to make the appointment shall also have power to suspend or dismiss any person appointed whether by itself or any other authority in exercise of that power.

Mr. Munim was appointed in board meeting of Sabarwal Construction Private Limited to appoint five employees for accounts department of company. Mr. Munim appointed five employees. After one month, he issued the order of dismissal to one of those five employees. That employee filed an application in the court challenging the validity of dismissal order with the words that Mr. Munim was authorised only for appointment of employees not for dismissal.

Conclusion: On the basis of above provisions and facts of the case, Mr. Rupal was not correct with his words because as per the General Clauses Act, 1897, power to appoint includes power to suspend or dismiss. Hence, Mr. Munim has power to dismiss Mr. Rupal.

Provision as to Orders, Rules etc. made under Enactments (Secs. 20 to 24)

Question 30.
What is the effect on the implementation of the Rules that are issued between passing and commencement of enactment Explain as per the provisions of the General Clauses Act 1897. [MTP-Oct. 18]
Answer:
Making of rules or bye-laws and issuing of orders between passing and commencement of enactment:
As per Sec. 22 of the General Clauses Act, 1897, where, by any Central Act or Regulation which is not to come into force immediately, on the passing thereof, a power is conferred to make rules or bye laws, or to issue orders with respect to the application of the Act or Regulation or with respect to the establishment of any Court or the appointment of any Judge or officer thereunder, or with respect to the person by whom, or the time when, or the place where, or the manner in which, or the fees for which, anything is to be done under the Act or Regulation, then that power may be exercised at any time after passing of the Act or Regulation; but rules, bye-laws or orders so made or issued shall not take effect till the commencement of the Act or Regulation.

Question 31.
Explain various provisions applicable to rules or bye-laws being made after previous publications as enumerated in Sec. 23 of the General Clauses Act, 1897. [Nov. 18 (4 Marks)]
Answer:
Provisions applicable to making of rules or bye-laws after previous publications:
As per Sec. 23 of the General Clauses Act, 1897, where, by any Central Act or Regulation, a power to make rules or bye-laws is expressed to be given subject to the condition of the rules or bye-laws being made after previous publication, then the following provisions shall apply, namely:

(1) Publish of proposed draft rules/bye-laws:
The authority having power to make the rules or bye-laws shall, before making them, publish a draft of the proposed rules or bye-laws for the information of persons likely to be affected thereby;

(2) To publish in the prescribed manner:
The publication shall be made in such manner as that authority deems to be sufficient, or, if the condition with respect to previous publication so requires, in such manner as the Government concerned prescribes;

(3) Notice annexed with the published draft:
There shall be published with the draft a notice specifying a date on or after which the draft will be taken into consideration;

(4) Consideration on suggestions/objections received from other authorities:
The authority having power to make the rules or bye-laws, and, where the rules or bye-laws are to be made with the sanction, approval or concurrence of another authority, that authority also shall consider any objection or suggestion which may be received by the authority having power to make the rules or bye-laws from any person with respect to the draft before the date so specified;

(5) Notified in the official gazette:
The publication in the Official Gazette of a rule or bye-law purporting to have been made in exercise of a power to make rules or bye-laws after previous publication shall be conclusive proof that the rule or bye-laws have been duly made.

Question 32.
The Ministry of Corporate Affairs (MCA) published in the Gazette of India, the proposed draft of Rules | further to amend certain rules under the Companies Act, 2013. The MCA made some modifications in the draft Rules already published. In the light of the provisions of the General Clauses Act, 1897, answer the following: [May 22 (4 Marks)]

1. Is it required for MCA to publish a draft of the proposed Rules ?
2.  In case of any irregularities in die publication of the draft, can it be questioned?
3. Is MCA entitled to make suitable changes in the draft?
4. Is it necessary to republish the Rules in the amended form when the changes made are ancillary
   to the earlier draft?

Answer:
Provisions Applicable to Making of Rules or Bye-Laws after Previous Publications:
Sec. 23 of General Clauses Act, 1897 deals with the provisions Applicable to Making of Rules or ByeLaws after Previous Publications. Accordingly:

1. The authority having power to make the rules or bye-laws shall, before making them, publish a draft of the proposed rules or bye-laws for the information of persons likely to be affected thereby. Hence, it is required for MCA to publish a draft of the proposed Rules.
2. There shall be published with the draft a notice specifying a date on or after which the draft will be taken into consideration. Hence, in case of any irregularities in the publication of the draft, it can be questioned before that date.
3. MCA is entitled to make suitable changes in the draft based on any objection or suggestion which may be received by it.
4. It is necessary to re-publish the Rules in the amended form when the changes made are ancillary to the earlier draft.

Miscellaneous (Sec, 25 to Sec. 30)

Question 33.
Mr. Ram, an advocate has fraudulently deceived his client Mr. Shyam, who was taking his expert advise on taxation matters. Now, Mr. Ram is liable to a fine for acting fraudulently both under the Advocates Act, 1961 as well as the Income Tax Act, 1961. State the provision as to whether his offence is punishable under the both the Acts, as per the General Clauses Act, 1897. [RTP-Nov. 18, MTP-April 21]
Answer:
Provision as to offence punishable under two or more enactments:

• As per Sec. 26 of the General Clauses Act, 1897, where an act or omission constitutes an offence under two or more enactments, then the offender shall be liable to be prosecuted and punished under either or any of those enactments, but shall not be punished twice for the same offence.
• Thus, Mr. Ram shall be liable to punished under the Advocates Act, 1961 or the Income-tax Act, 1961, but shall not be punished twice for the same offence.

Question 34.
What is the meaning of service by post as per provisions of the General Clauses Act, 1897? [May 18 (4 Marks); MTP-April 19, May 20; RTP-May 21]
Answer:
Meaning of Service by post:
As per Sec. 27 of the General Clauses Act, 1897, where any legislation or regulation requires any document to be served by post, then unless a different intention appears, the service shall be deemed to be effected by:

1. properly addressing
2. pre-paying, and
3. posting by registered post.

A letter containing the document to have been effected at the time at which the letter would be delivered in the ordinary course of post.

Question 35.
A notice when required under the Statutory rules to be sent by “registered post acknowledgement due” is instead sent by “registered post” only. Whether the protection of presumption regarding serving of notice by “registered post” under the General Clauses Act is tenable? Referring to the provisions of the General Clauses Act, 1897, examine the validity of such notice in this case. [RTP May 18, May 19]
Answer:
Service by post:
As per Sec. 27 of the General Clauses Act, 1897, where any legislation or regulation requires any document to be served by post, then unless a different intention appears, the service shall be deemed to be effected by:

1. properly addressing,
2. pre-paying, and
3. posting by registered post.

A letter containing the document to have been effected at the time at which the letter would be delivered in the ordinary course of post.

Therefore, in view of the above provision, since, the statutory rules itself provides about the service of notice that a notice when required under said statutory rules to be sent by ‘registered post acknowledgement due’, then, if notice was sent by ‘registered post’ only it will not be the compliance of said rules. However, if such provision was not provided by such statutory rules, then service of notice if by registered post only shall be deemed to be effected.

Furthermore, in a similar case “United Commercial Bank v. Bhim Sain Makhija”, a notice when required under the statutory rules to be sent by ‘registered post acknowledgement due’ is instead sent by ‘registered post’ only, the protection of presumption regarding serving of notice under ‘registered post’ under this section of the Act neither tenable not based upon sound exposition of law.

Question 36.
Mr. Mike has lent his house property to Mr. Wise at a monthly rent of ₹ 15,0000 per month. The yearly rent agreement was due to expire in near future. However, Mr. Mike does not intend to continue this agreement and he has sent a notice to Mr. Wise for the termination of the agreement Mr. Wise on the other hand does not want to vacate the property and hence has returned the notice with an endorsement of refusal. Now, Mr. Wise has contended that the no notice was served to him and hence there is no need for him to vacate the property. As per the provisions of the General Clauses Act, 1897, discuss whether a notice was served to Mr. Wise. [MTP-Aug. 18]
Or
Mr. Vyas is the owner of House No. 20 in Geeta Colony, Delhi. He has rented two rooms in this house to Mr. Iyer. The Income Tax Authority has served a show cause notice to Mr. Vyas. The said notice was received by Mr. Iyer and returned the notice with an endorsement of refusal. Decide with reference to provisions of “General Clauses Act, 1897”, whether the notice was rightfully served on Mr. Vyas. [RTP-May 20]
Answer:
Service by post:
As per Sec. 27 of the General Clause Act, 1897, where any legislation or regulation requires any document to be served by post, then unless a different intention appears, the service shall be deemed to be effected by:

1. properly addressing
2. pre-paying, and
3. posting by registered post.

A letter containing the document to have been effected at the time at which the letter would be delivered in the ordinary course of post

Thus, where a notice is sent by the landlord by registered post and the same is returned by the tenant with an endorsement of refusal, it will be presumed that the notice has been served.

Conclusion: In the given situation, notice was rightfully served to Mr. Wise.

Question 37.
A notice was served on Mr. P for appearing in the court However, the notice could not be served on account of the fact that the house of the Mr. P was found locked. Thus, Mr. P. did not appear in the court at the said date. Examine the situation as per the provisions of the General Clauses Act, 1897 and determine whether Mr. P. will be liable in the given situation. [MTP-March. 19]
Answer:
Service by post:
As per Sec. 27 of the General Clauses Act, 1897, where any legislation or regulation requires any document to be served by post, then unless a different intention appears, the service shall be deemed to be effected by:

1. properly addressing
2. pre-paying, and
3. posting by registered post.

A letter containing the document to have been effected at the time at which the letter would be delivered in the ordinary course of post.

Hence, where the notice could not be served on account of the fact that the house of Mr P was found locked, it will be deemed that the notice was properly served as per the provisions of Sec. 27 of the General Clauses Act, and it would be for Mr. P to prove that it was not really served and that he was not responsible for such non-service.