The General Clauses Act, 1897

Question 1

Act

Answer 1

Act (Section 3(2)] used with reference to an offence or a civil wrong

• include a series of acts

*extend also to illegal omissions

*it does not include an omission which is not illegal

Question 2

Offence

Answer 2

In the illustration to section 36 of the Indian Penal Code the act by which A causes Z’s death consists of

beating him

plus a series of illegal omissions namely wrongfully neglecting or refusing to supply him with

food at proper times.

Offence [Section 3(38)]

any act or

any omission made punishable by any law for the time being in force

Question 3

Oath/ swear/affidavit

Answer 3

Oath [Section 3(57): Oath shall include affirmation and declaration in the case of persons by Law allowed to affirm or declare instead of swearing.

Swear [Section (62): Swear”, with its grammatical variations and cognate expressions, shall

include affirming and declaring in the case of persons by law allowed to affirm or declare instead of swearing.

Affidavit [Section 3(3)]: ‘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.

In general parlance Affidavit’ is a written statement confirmed by oath or affirmation for use as evidence in Court or before any authority.

Question 4

Commencement

Answer 4

As per Section 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 refers to the process by which legislation; regulations, treaties and other legal instruments come to have 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.

Question 5

Document

Answer 5

According to section 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 of recording that matter.

Question 6

Financial yr and calender yr

Answer 6

“Financial Year” Section 3(21): 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 Britis 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 7

Good faith

Answer 7

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 face done honestly, whether it is done negligently or not

The question of good faith under the General Clauses Act, 1897 is one of fact. It is to determine with reference to the facts and 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. For eg. An authority is not acting honestly where it had a suspicion that there was something wrong and did not make further enquiries

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 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.

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.

Thus the purchase made could not be said to be made in good faith.

Question 8

The act done negligently shall be deemed to be done in good faith

Answer 8

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.

Question 9

Government

Answer 9

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.

Question 10

Immovable property

Answer 10

Immovable Property Section 5(26) Immovable Property shall include:

a. Land
b. Benefits to arise out of land, and
c. Things attached to the earth, or
d. 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

Question 11

Imprisonment

Answer 11

Shall mean imprisonment of either description namely,

(a) rigorous, that is with hard labor

(b) simple.

So, when an Act provides that an offence is punishable with imprisonment, the Court may, in its discretion, make the imprisonment rigorous or simple.

Question 12

Month

Answer 12

As per Section 3(35) of the General Clauses Act, 1897, the term ‘Month’ shall mean a month reckoned according to the British calendar;

However The word “month occurring in Section 271 (l)(a)(i) of the Income-tax Act, 1961, was construed to mean a period of thirty days and not a month as defined in the General Clauses Act.

Question 13

Person

Answer 13

As per Section Section 3(42) “ Person” shall include:

(i) any company, or

(ii) association, or

(iii) body of individuals, whether incorporated or not

Question 14

Coming into operation of enactment

Answer 14

“Coming into operation of enactment”: 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 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 gazette on 30th August, 2013 with the enforcement of section 1 of the Act. Accordingly, the Companies Act, 2013 came into enforcement on the date of its publication in the Official Gazette.

Question 15

Coming into force

Answer 15

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

Question 16

Effects of Repeal

Answer 16

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, (as per section 7 in order to revive a repealed statute, it is necessary to state an intention to do so)
• Affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or,
• Affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or
• Affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; 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 17

Repeal

Answer 17

‘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.

Question 18

Amendment due to repeal

Answer 18

As per Section 6A Where any Central Act or Regulation made after the commencement of this Act repeals any enactment by which the text of any Central Act or Regulation was amended by the express omission, insertion or substitution of any matter, then unless a different intention appears, the repeal shall not affect the continuance of any such amendment made by the enactment so repealed and in operation at the time of such repeal.

Question 19

Sec 115 JB - how book profit is to be calculated

Answer 19

According to Section 8 of the General Clauses Act, 1897, Where any Act or Regulation repeals and re- enacts any provision a former enactment, then references in any other enactment or in any instrument to the provision repealed shall, unless a different intention appears, be construed as references to the provision re-enacted. On referring of section 8 of the General Clauses Act, book profits to be calculated under section 115 JB of the Income Tax Act will be as per the Companies Act, 2013

Question 20

Computation of time

Answer 20

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. 30th October 2019 will be excluded and 6th November 2019 shall be included, Le. 31st October, 2019 to 6th November, 2019 (both days inclusive).

Question 21

Trf of unpaid dividend

Answer 21

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”.

(3) Payment of dividend: In the given instance, Komat Ltd. declares dividend for its shareholder in its Annual General Meeting held on 27/09/2019. Under the provisions of Section 17 of the Companies Act, 2013, a company is required to pay declared dividend within 30 days from the date of declaration, i.e. from 28/09/2019 to 27/10/2019. In this series of 30 days, 17/09/2019 will be excluded and last 30th day. Le. 27/10/2019 will be included. Accordingly, Komal Ltd. will be required to pay dividend within 28/09/2019 and 27/10/2019 (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 theperiod of 28th October, 2019 to 3rd November, 2019 (both days inclusive).

Question 22

The announced date is a holiday

Answer 22

According to Section to of the General Clauses Act, 1897, where by any legislation of 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.

Question 23

Calculating distance

Answer 23

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 24

Duty to be taken on pro rata basis

Answer 24

“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 ise 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.

Question 25

Whether a whole time director can be appointed in more than one subsidiary company

Answer 25

Section 203(3) of the Companies Act, 2013 provides that whole time key managerial personnel 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 thang one subsidiary companies or can be appointed in only one subsidiary company.

It can be noted that Section 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. Thus, a wholes time key managerial personnel may hold office in more than one subsidiary company as per the present law.

Question 26

Effect on implementation of the rules that are issued between passing and commencement

Answer 26

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. [Sec-22]

Question 27

Rules or bye-laws made after previous publication

Answer 27

Rules or bye-laws made after previous publication, shall be made as per the following procedure:

. Publish a draft of the proposed rules or bye-laws in the prescribed manner for the information of persons likely to be affected thereby

Notice specifying a date on or after which the draft will be taken into consideration shall be annexed with the published draft

The authority shall consider any objection or suggestion which may be received from any person with respect to the draft before the date so specified:

The publication of a rule or bye-law in the Official Gazette shall be conclusive proof that the rule or bye-laws have been duly made.

Question 28

Liable under 2 acts

Answer 28

Article 20(2) of the Constitution states that no person shall be prosecuted and punished for the same offence more than once. As per Section 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

Provisions of Section 26 and Article 20(2) of the Constitution apply only when the two offences which form the subject of prosecution is the same, i.e., the ingredients which constitute the two offences are the same. If the offences under the two enactments are distinct and not identical, none of these provisions will apply.

Question 29

Service by post

Answer 29

“Meaning of Service by post [Section 27 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 eflected 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.

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.

Question 30

Object and purpose of general Clauses Act

Answer 30

The objects of the Act are several, namely:

to shorten the language of Central Acta

to provide, as far as possible, for uniformity of expression in Central Acts, by giving definitions of a series of terms in common use;

To state explicitly certain convenient rules for the construction and interpretation of central acts.

To guard against slips and oversights by importing into every act certain commun form clames,

which otherwise ought to be inserted in every central act

The purpose of the General Clauses Act is to

To place in one single statute

different provisions for interpretation of words and

legal principles

which would otherwise have to be specified separately in many different Acts and Regulations

Question 31

Exercise of power conferred by any Central Act or Regulation

Answer 31

Unless or otherwiseprovided:

(1) Where any power is conferred by any Central Act or Regulation then unless a different intention appears that power may be exercised from time to time as occasion requires

Example: The power under Section 51(3) of the States Reorganisation Act, 1956 can be exercived by the Chief Justice as and when the occasion arose for its exercise.

(2) Where by any legislation or regulation, there is a power to appoint, the appointment may be made by appointing ex-officio as well. (Ex-officio is a Latin word which means by virtue of one’s position or office).

Example: The Vice-President of India is ex officio Chairman of Rajyasabha.

(3) The authority which has a power to make the appointment of any person includes power to suspend or dismiss such person appointed

Example:

(a) The power of court to appoint a receiver under Order 40, Rule 1(a) of CPC, 1908, includes power to remove such receiver. (b) The power of Chief Justice to make appointment of officers and servants of a High Court under

Article 229(1) of the Constitution includes power to suspend or dismiss such officers and servants,