General Clauses Act
Q1. A confusion, regarding the meaning of financial year arose among the financial 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? (4 Marks) [Dec 21]
Answer:
Financial Year: According to Section 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 under section 3(66) as a year reckoned according to the British calendar. Thus, as per the General Clauses Act, 1897, 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.
Q2. Give the definition of the following as per the General Causes Act, 1897: (i) "Rule
(ii) "Oath"
(iii) "Person’’ (3 Marks) [Dec 21]
Answer:
(i) Rule: As per section 3(51) of the General Clauses Act, 1897, 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.
(ii) Oath: As per section 3(37) of the General Clauses Act, 1897, Oath' shall include affirmation and declaration in the case of persons by law allowed to affirm or declare instead of swearing.
(iii) Person: As per section 3(42) of the General Clauses Act, 1897, "Person" shall include: (1) any company, or
(2) association, or
(3) body of individuals, whether incorporated or not.
Q3. Ajit was supposed to submit an appeal to High Court of Kolkata on 30th March, 2020, which was the last day on which such appeal could be submitted. Unfortunately, on that day High Court was closed due to total Lockdown al over India due to Covid-19 pandemic. Examine the remedy available to Ajit under the provisions of the General Clauses Act, 1897. (3 Marks) July 21
Answer:
The given answer is based on section 10 which deals with "Computation of time" under 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 question, Ajit was supposed to submit an appeal to High Court on 30th March 2020, which was the last day of filing the same. On that day High Court was closed due to total lockdown all over India.
In line with said provision, Ajit can submit an appeal on the day on which the High Court is open. Q4. 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". (4 Marks) July 21
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
Q5. (i) PK 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 29.04.2018, 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? (2 Marks) Jan 21
(ii) 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 the 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. (2 Marks) Jan 21
Answer:
(i) According to Section 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 question, the court fixed the date of hearing of dispute between PK and VK, on 29.04.2018, which was subsequently announced to be a holiday. Applying the above provisions we can conclude that the hearing date of 29.04.2018, shall be extended to the next working day.
(ii) According to section 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. Thus, 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.
Q6. "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. (3 Marks) [Jan 21]
Answer:
Good Faith In general, anything done with due care and attention, which is not malafide is presumed to have been done in good faith.
But, according to section 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.
Q7. (i) Mrs. K went to a Jewellary shop to purchase diamond ornaments. The owners of jewellary shop are notorious and indulging in smuggling activities. Mrs. K purchased diamond ormaments
honestły 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 title?
(ii) There are two ways to reach city A from city B. The distance between the two cities by roadways is 100 kms and by water ways 80 kms. How is the distance measured for the purpose of any Central Act under the provisions of the General Clauses Act, (2+2 4 Marks) 1897? Nov 20
Answer:
(i) In the instant case, the purchase of diamond ornaments by Mrs. K from a Jewellary Shop, the owners of which are notorious and indulged in smuggling activities, made in good faith, will not convey good title.
As per section 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.
(ii) "Measurement of Distances" [Section 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.
Q8. Define the following terms with reference to the General Clauses Act, 1897: (i) Affidavit [Nov 19 3 Marks]
(ii) Good Faith (2+2 4 Marks) Nov 20
Answer:
(i) "Affidavit" [Section 3(3) of the General Clauses Act, 1897]: 'Affidaviť' shall include affirmation and declaration in the case of persons by law allowed to affirm or declare 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.
(ii) "Good Faith" [Section 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 be determined
with reference to the circumstances of each case. Thus, anything done with due care and attention, which is not malafide, whether it is done negligently or not is presumed to have been done in good faith.
Q9. How will you interpret the term "Instrument" used in a statutes? (3 Marks) Nov 19
Answer:
‘Instrument’: In common parlance, ‘instrument’ means a formal legal document which creates or confirms a right or records a fact. It is a formal writing of any kind, such as an agreement, deed, charter or record, drawn up and executed in a technical form. It also means a formal legal document having legal effect, either as creating liability or asaffording evidence of it. Section 2(14) of the Indian Stamp Act, 1899 states that ‘instrument’ includes every document by which any right or liability is or purports to be created, transferred, extended, extinguished or recorded.
Q10. 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. (4 Marks) Nov 19
Answer:
As per Section 3(22) of the General Clauses Act, 1897, the term “good faith” means 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 malafide is presumed to have been done in good faith.
In the given problem in the question, 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.
Q11. (i) 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 30.10.2018, decide the last date on or before which the unpaid/unclaimed dividend amount shall be required to be transferred to a separate bank account in the light of the relevant provisions of the General Clauses Act, 1897? (2 Marks) May 19
(ii) Referring to the provisions of the General Clauses Act, 1897, find out the day/ date on which the following Act/Regulation comes into force. Give reasons also,
(1) AnActofParliamentwhichhasnotspecificallymentionedaparticulardate.
(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 14th August, 2015 with effect from 1st January, 2016. (2 Marks) May 19 [RTP NOV 20]
Answer:
(i) Section 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. 30 th October 2018 will be excluded
and 6th November 2018 shall be included, i.e., 31st October, 2018 to 6th November, 2018 (both days inclusive).
(ii) (1) According to section 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.
Q12. Komal Ltd. declares a dividend for its shareholders in its AGM held on 27 th September, 2018. 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) ThedatesduringwhichKomalLtd.isrequiredtotransfertheunpaidorunclaimeddividend
to unpaid dividend account? (4 Marks) Nov 18 Answer:
As per section 9 of the General Clauses Act, 1897, for computation of time, the section states that 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. declares dividend for its shareholder in its Annual General Meeting held on 27/09/2018. Under the provisions of Section 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 28/09/2018 to
27/10/2018. In this series of 30 days, 27/09/2018 will be excluded and last 30 th day, i.e. 27/10/2018 will be included. Accordingly, Komal Ltd. will be required to pay dividend
within 28/09/2018 and 27/10/2018 (both days inclusive).
(ii) Transfer of unpaid or unclaimed divided: As per the provisions of Section 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, 2018 to 3rd November, 2018 (both days inclusive).
Q21. Explain various provisions applicable to rules or bye-laws being made after previous publications as enumerated in Section-23 of the General Clauses Act, 1897. (4 Marks) Nov 18
Answer:
Provisions applicable to making of rules or bye-laws after previous publications [Section 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.
Q22. ‘Repeal’ of provision is different from ‘deletion’ of provision. Explain. (2 Marks) Nov 18
Answer:
In Navrangpura Gam Dharmada Milkat Trust Vs. Rmtuji Ramaji, AIR 1994 Guj 75 case, it was decided 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 while ‘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.
Q23. X owned a land with fifty tamarind trees. He sold his land and the (obtained after cutting the fifty trees) to Y. X wants to know whether the sale of timber tantamounts to sale of immovable property. Advise him with reference to provisions of "General Clauses Act, 1897”. (4 Marks) May 18
Answer:
“Immovable Property” [Section 3(26) of the General Clauses Act, 1897]: ‘Immovable Property’ shall include:
(i) Land,
(ii) Benefitstoariseoutofland,and
(iii) Things attached to the earth, or
(iv) 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. According to the above definition, Land is immovable property; however, timber cannot be immovable property since the same are not attached to the earth.
Q24. Explain briefly any four effects by repeal of an existing Act by central legislation enumerated in Section-6 of The General Clauses Act, 1897. [4 Marks] May 18
Answer:
According to Section 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.
Q25. What is the meaning of service by post as per the provisions of The General Clauses Act, 1897? May 18 2 Marks | MTP NOV 21
Answer:
“Meaning of Service by post” [Section 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:
(i) properly addressing
(ii) pre-paying, and
(iii) 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.
Q26. Explain the meaning of calculation of duty to be taken on pro rata basis' as per the provisions of the General Clauses Act, 1897. Give an example. (3 Marks) MTP OCT 21
Answer:
"Duty to be taken pro rata in enactments": According to section 12 of the General Clauses Act, 1897, where, by any enactment now in force or hereafter to be in force, any duty of customs or excise or in the nature thereof, is leviable on any given quantity, by weight, measure or value of any goods or merchandise, then a like duty is leviable according to the same rate on any greater or less quantity.
Pro rata is a Latin term used to describe a proportionate allocation.
Example: Where several debtors are liable for the whole debt and each is liable for his own share or proportion only, they are said to be bound pro rata.