by Aggarwals Associates | Oct 23, 2023 | Civil Law, Contract Law, Corporate Law, General
Navigating the financial landscape with a non-banking company can be a daunting task, but with the right guidance and support, you can make informed decisions that will help you reach your financial goals.
10 tips you can make an informed decision that best suits your financial needs. From researching the company’s financial stability to understanding the terms of the agreement, these tips will help you make the best choice for your financial future.
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What are NBFCs?
A non-banking financial company is a company incorporated under the Companies Act, of 1956, and is engaged in the business of loans and advances, debts, etc.
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Do they have a banking license?
No, they do not hold banking licenses because federal or state authorities do not regulate them.
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What are the differences between NBFCs and banks?
Banks are legally recognized institutions whereas NBFC is a private business that offers banking-like services without a banking license to a person. NBFCs to not accept demand deposits.
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Why do most people choose NBFC over banks?
People choose NBFC’s over banks because of the following reasons:
- NBFC’s have fewer rules and regulations as compared to banks.
- Less paperwork is involved in the process of granting loans which leads to saving time for the borrower.
- Interest rate is charged upon the borrower’s credit score and earnings.
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What are credits?
It’s a relationship of trust between the lender and the borrower, where the borrower promises to repay the loan immediately after a few days of taking a loan.
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What is a credit score?
It shows a person’s creditworthiness like if he repays the loan on time or not. It is based on an individual’s history of repayment, loan history, etc. given by different credit agencies.
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What is the CIBIL score?
Credit score is given by Credit Information Bureau India Limited. It is a 3-digit numeric summary of credit history. It represents a credit background.
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What is the range of the CIBIL score?
It ranges from 300 to 900. A score above 750 is considered good.
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Why should you maintain a good credit score?
It plays a great role in the lender’s decision to provide you with a loan. There are great chances of approval for loans from banks and NBFCs when you have a high credit score. A person with having high credit score means he is most likely to qualify for the lowest interest rates and fees for new loans. A good credit score above 750 is considered good.
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Why are NBFCs called shadow banks?
NBFCs are so-called because they function more or less like traditional banks but with fewer rules and regulations. Also, they cannot accept deposits from the people.
Write-up By: Aggarwals & Associates
by Aggarwals Associates | Sep 11, 2023 | Civil Law, Contract Law, General
“Fulfil the entitlement criteria specified in section 5(2) of the Maternity Benefits Act and get eligible for full Maternity benefits even beyond the contractual term”.
The Hon’ble Supreme Court of India upheld the above statement in a three-judge bench. Case: Dr. Kavita Yadav v The Secretary, Ministry of Health and Family Welfare Department & Ors (Civil appeal No. 5010/2023) on 17th August 2023.
WHAT ARE THE FACTS?
- The appellant is a pathology doctor and was appointed as the senior resident (pathology) on a contractual basis in Janakpuri Super Specialty Hospital, under the government of NCT Delhi. The appellant’s contract was dated to end on 12th June 2017 as per the conditions of the contract.
- However, she applied for maternity benefits from 1 June 2017 under the Maternity Benefit Act 1961. Eventually, the employer stated that she would only get 11 days of maternity leave, since her employment period is going to expire on 12th June 2017 and it cannot extend beyond the employment period.
- The appellant challenged the action of the employer and filed a complaint in the central administrative tribunal and eventually in the high court; however, her claim for the same was rejected by both the court, on the same grounds as stated by the employer.
WHAT WAS THE LEGAL ISSUED RAISED?
- Whether the maternity benefits as contemplated in Section 5(2) of the Maternity Benefits Act, 1961 apply to a woman appointed on contract if the period for which she claims such benefits overshoots the contractual period?
- If the period of employment is as per the conditions of the contract, can there be a notional extension of the period of employment?
WHAT WAS THE JUDGEMENT?
- The Hon’ble Supreme Court relied on several judgments. It opined that continuation of maternity benefits in the statute itself, where the benefits would survive beyond the cessation of the period of employment.
- In the case of the municipal corporation of Delhi v. female workers (muster role) & Anr.’ the point of argument was highlighted. It revealed the fact that regular women employees were extended the benefits of the act, but, not to those women workers who were employed on a contractual basis.
- The judgment emphasized Article 39 and more specifically 42 which fall in the ambit of directive principles of state policy and state that, a woman employee at the time of employment shall not be compelled to do hard labor. Also, the judges declared that we did not find anything credible in the act which states that only regular women employees are eligible for maternity benefits.
- The Hon’ble Supreme Court opined that the high court erred in holding that the appellant was not eligible for maternity benefits after 11 June 2023.
- The factual analysis of the provision led to the conclusion that after fulfillment of section 5(2) of the act, a woman employee is eligible for full maternity benefits even after these benefits exceed her period of employment.
- The main crux of the entire judgment was, that if the employee fulfills the eligible criteria for availing maternity benefits, i.e. she completes 80 days of employment, she will be eligible to avail of the maternity benefits even if such benefits exceed the duration of her contract.
- The Supreme Court set aside the judgment of the high court and the decision of the tribunal invalidated thereof.
WHAT IS THE SIGNIFICANCE OF THIS JUDGEMENT?
- We know that maternity benefits are a fundamental and integral part of the identity and dignity of a woman who chooses to bear a child. Thus the apex court gave a fabulous judgement about the rights of the contractual women employees.
- The benefits should be given on a timely basis and the discrimination based on permanent and contractual employment shall be curbed as much as possible, considering the development of female strata of the society and the economy at large.
Judgment reviewed by: Ajit Ranadive, Legal Intern at Aggarwals & Associates, Mohali
by Aggarwals Associates | May 12, 2023 | Contract Law
Privity of contract is a fundamental concept in the law of contracts, and it is an
essential principle of contract law in India. Privity of contract refers to the
relationship that exists between the parties to a contract, which creates rights
and obligations that are enforceable by law. The Indian Contract Act, 1872,
(hereinafter referred to as Indian Contract Act) defines the rules and principles
related to the privity of a contract, and it is essential for anyone entering into a
contract to understand its implications.
The Indian Contract Act defines a contract as an agreement between two or
more parties that creates legally enforceable obligations. The parties to a
contract are known as the “parties to the contract” and they must have a
contractual relationship to enforce their rights and obligations. The principle of
privity of contract means that only the parties to the contract can enforce their
rights and obligations under the contract. This means that a third party cannot
sue or be sued under the contract, except in certain limited circumstances.
The doctrine of privity of contract is based on the principle that a contract is a
private agreement between two or more parties, and it is not the business of
any third party. Therefore, a third party cannot acquire any rights under the
contract, nor can it be held liable for any breach of the contract. The doctrine
of privity of contract has been developed over the years by courts in India and
other common law countries to protect the interests of parties to the contract.
The Hon’ble Supreme Court in the case MC Chacko V. State of Travancore AIR
1970 SC 504 held that a person not a party to a contract cannot subject to
certain well-recognized exceptions, enforce the terms of the contract.
For example, A makes a promise to deliver the car to B’s place at a particular
time. A fails to deliver the car. In this case, only B can sue A and no third has
the right to sue.
Essentials of Privity of Contract:
1. Valid Contract: The first and foremost essential requirement is a valid
contract. The parties entering into the contract must be competent and there
must be a valid consideration in the contract as defined under Indian Contract
Act.
2. Breach of Contract: There must be a breach of contract by either party.
3. Only parties can sue each other: In the privity of the contract only parties to
the contract can sue each other and no third party has the right to sue parties
in the contract unless they fall in the exceptional area mentioned in the later
part of article.
What are the different exceptions to the doctrine of privity of contract?
There are certain exceptions to the principle of privity of contract under Indian
law. These exceptions have been developed by courts over the years to
address situations where the strict application of the principle of privity of
contract would lead to an unfair or unjust outcome.
Tortious Interference: Under this doctrine, a third party may be held liable for
interfering with the contractual rights of one of the parties to the contract. For
example, if C persuades A not to sell the car to B, C may be held liable for
tortiously interfering with B’s contractual rights.
Beneficiary rights: Under this concept, a third party may acquire certain rights
under a contract if it is clear from the terms of the contract that the parties
intended to confer those rights on the third party. For example, if A agrees to
pay B a sum of money to be held in trust for C, then C may acquire rights under
the contract as a beneficiary. In Pandurang V. Vishwanath AIR 1939 Nag 20,
the court held that the person beneficially entitled under the contract can sue
even though not a party to the contract itself.
In conclusion, the privity of contract is a fundamental principle of contract law
in India, and it is essential for anyone entering into a contract to understand its
implications. The principle of privity of contract means that only parties to a
contract can enforce their rights and obligations under the contract. However,
there are certain exceptions to this principle, which have been developed by
courts over the years to address situations where the strict application of the
principle of privity of contract would lead to an unfair or unjust outcome.
Surbhi Singla
Associate at Aggarwals & Associates,
S.A.S Nagar Mohali
by Aggarwals Associates | May 1, 2023 | Civil Law, Contract Law
Tort Law and Contract Law are two distinct branches of civil law that deal with different types of legal issues. Contract Law is concerned with the rights and obligations arising from agreements between parties whereas Tort Law deals with civil wrongs that cause harm to individuals voluntarily or involuntarily. Some of the key differences between Tort Law and Contract Law:
- Nature of the Relationship: Contract Law involves a consensual relationship between parties, where one party promises to perform a certain obligation in exchange for something from the other party. On the other hand, Tort Law deals with an unconsented relationship where a party’s actions or omissions result in harm to another person.
- Basis of Liability: In Contract Law, the parties are liable for the breach of the terms of the agreement. On the other hand, in Tort Law, the liability is based on the breach of a legal duty towards others.
- Damages: In Contract Law, the damages are generally limited to the losses suffered as a direct result of the breach of the agreement. In Tort Law, the damages can include compensation for various types of losses, such as physical and emotional harm, damage to property, loss of income, and more.
- Standard of Care: In Contract Law, the standard of care is usually defined by the terms of the agreement. In Tort Law, the standard of care is usually based on what a reasonable person would do in similar circumstances.
- Remedies: In Contract Law, the remedies are usually limited to specific performance of the agreement, damages, or termination of the agreement. In Tort Law, the remedies can include compensation for the harm caused, injunctions to prevent further harm, and more.
In conclusion, while Tort Law and Contract Law are both branches of civil law, they differ in terms of the nature of the relationship, basis of liability, damages, standard of care, and remedies available. It is important to understand these differences when dealing with legal issues related to contracts or civil wrongs to ensure that the appropriate legal remedies are sought.
…Surbhi Singla
Advocate at Aggarwals & Associates, Mohali
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