PARTITION SUIT - DRAFT COPY - PLAINT FOR PARTITION

 

IN THE COURT OF LEARNED  CIVIL JUDGE ( SENIOR DIVISION)

AT BARUIPUR, SOUTH 24 PARGANAS.

 

                                                  TITLE SUIT NO.         ____        OF 2019.

                                 

 

Shri Amar Naskar, Son of Shri Bankim Naskar, residing at Village – Khurigachhi, Post Office – Sonarpur, Kolkata – 700 150, Police Station – Narendrapur, District – 24 Parganas South, West Bengal.

                                

……PLAINTIFF.

       -VERSUS-

 

1)           Shri Shankar Naskar, Son of Shri Bankim Naskar, residing at Village – Khurigachhi, Post Office – Sonarpur, Police Station – Narendrapur, Kolkata – 700 150, District – 24 Parganas South.

 

2)           Shri Ramesh Naskar, Son of Shri Bankim Naskar, residing at Village – Khurigachhi, Post Office – Sonarpur, Police Station – Narendrapur, Kolkata – 700 150, District – 24 Parganas South.

 

3)           Smt. Pratima Kayal, Wife of Badal Kayal, residing at Village – Tangrakhali, Post Office – Taldi, Police Station – canning, PIN Code – 743376, District – South 24 Parganas.

 

4)           Smt. Ashima Mondal, Wife of Shri Bhulu Mondal, residing at Village – Tangrakhali ( Adla ), Post Office – Taldi, PIN Code – 743376, Police Station – canning, District – South 24 Parganas.

 

5)           Smt. Sushma Mondal, Wife of Shri Ashok Mondal, residing at Village – Bidyadharpur Petua, Post Office – Sonarpur, PIN Code – 700 150, Police Station – Sonarpur, District – South 24 Parganas.

 

6)           Smt. Anima Mondal, Wife of Shri Samir Mondal, residing at Village – Malipukur, Vidyadharpur, Post Office – Sonarpur, PIN Code – 700 150, Police Station – Sonarpur, District – South 24 Parganas.

 

7)           Shri Bankim Naskar, Son of Late Akshay Naskar, residing at     Village – Khurigachhi, Post Office – Sonarpur, Kolkata – 700 150, Police Station – Narendrapur, District – 24 Parganas South.

         

                                  …DEFENDANTS

 

 

SUIT FOR PARTITION AND INJUNCTION

 

VALUED AT Rs. 99,000/- for Partition AND Rs. 100/= Tentatively fixed for Injunction. TOTAL  Rs. 99,100/=

 

The Plaintiff states as follows:-

 

 

1.   That one Bankim Naskar, Amar Naskar, Shankar Naskar, Ramesh Naskar, Pratima Kayal, Ashima Mondal, Sushma Mondal, Anima Mondal, who inherited the property left by Akshasy Naskar,  each having 1/8^th  share on the said property and jointly enjoying and possessing the said property.

 

2.   That the defendants are enjoying and possessing undivided 1/8^th  share of Mouza – Khurigachhi, J.L. no. 21, RS Khatian no. 346, South 24 Parganas, Police Station – Sonarpur, presently Narendrapur Police Station, Dag no. 766 – Danga – out of 9 Satak – 1 Satak, Dag no. 796 – Bastu – out of 25 Satak – 4 ghar – 9 Satak, Dag no. 822 – Shali – out of 16 Satak – 5 Satak, Dag no. 819 – Shali – out of 25 Satak – 8 Satak ( Pukur ), Dag no. 786 – Shali – out of 5 Satak – 2 Satak, Dag no. 184 – Shali – out of 22 Satak – 11 Satak, Total - 36 Satak, and property and the plaintiff is enjoying and possessing undivided 1/8^th  share of premises being Mouza – Khurigachhi, J.L. no. 21, RS Khatian no. 346, South 24 Parganas, Police Station – Sonarpur, presently Narendrapur Police Station, Dag no. 766 – Danga – out of 9 Satak – 1 Satak, Dag no. 796 – Bastu – out of 25 Satak – 4 ghar – 9 Satak, Dag no. 822 – Shali – out of 16 Satak – 5 Satak, Dag no. 819 – Shali – out of 25 Satak – 8 Satak ( Pukur ), Dag no. 786 – Shali – out of 5 Satak – 2 Satak, Dag no. 184 – Shali – out of 22 Satak – 11 Satak, Total - 36 Satak, and property, in the above noted property.

 

3.   The Plaintiff states that the Defendants are trying to demarcate the Schedule Property amongst themselves  and are trying to sell the Schedule Property and trying to deliver possession to third party without giving any opportunity and without any notice to the Plaintiff who by virtue of the Hindu Succession Act, 1956, is entitled to get 1/8^th share in the  undivided and un-partitioned schedule property and said Property has not yet partitioned by mates and bound amongst the co-sharers till now but the Defendants illegally trying to demarcate the schedule property and illegally trying to sell the undivided and un-partitioned schedule property to the third party and also illegally and unlawfully trying to deliver possession over the undivided and un-partitioned schedule property. Unless and until the undivided and un-partitioned schedule property,  is partitioned by mates and bound, the Defendant cannot demarcate the premises and cannot deliver possession to  any third party  in view of the reported judgment of the Hon’ble Supreme Court of India.   

 

4.   Recently the Defendants forcefully trying to get possession in the undivided and un-partitioned schedule property and illegally trying to make boundary wall in the undivided and un-partitioned schedule property for which the Plaintiff lodged a complaint to the Local Police Station. By the aforesaid illegal acts of the Defendant cloud has been casted to the right, title, interest and/or possession of the plaintiff in respect the Schedule suit property which should be removed by appropriate order of the court.

 

5.   The Plaintiff severally requested the Defendant to partition of the Suit property by mates and bound among the Plaintiff and Defendants mutually and amicable so that each of them get the actual share of the suit schedule property equally i.e. 1/8^th share of Mouza – Khurigachhi, J.L. no. 21, RS Khatian no. 346, South 24 Parganas, Police Station – Sonarpur, presently Narendrapur Police Station, Dag no. 766 – Danga – out of 9 Satak – 1 Satak, Dag no. 796 – Bastu – out of 25 Satak – 4 ghar – 9 Satak, Dag no. 822 – Shali – out of 16 Satak – 5 Satak, Dag no. 819 – Shali – out of 25 Satak – 8 Satak ( Pukur ), Dag no. 786 – Shali – out of 5 Satak – 2 Satak, Dag no. 184 – Shali – out of 22 Satak – 11 Satak, Total - 36 Satak, and property, within the Jurisdiction of Narendrapur  Police Station in the District of South 24 Parganas. But the Defendants openly refused to partition the suit schedule property mutually and amicably among themselves.

 

6.   As the Defendants refused to partition the suit schedule property mutually and amicably by mates and bounds, so the Plaintiff has been constrained to institute the instant suit for partition to get his share of property being  Premises bearing Mouza – Khurigachhi, J.L. no. 21, RS Khatian no. 346, South 24 Parganas, Police Station – Sonarpur, presently Narendrapur Police Station, Dag no. 766 – Danga – out of 9 Satak – 1 Satak, Dag no. 796 – Bastu – out of 25 Satak – 4 ghar – 9 Satak, Dag no. 822 – Shali – out of 16 Satak – 5 Satak, Dag no. 819 – Shali – out of 25 Satak – 8 Satak ( Pukur ), Dag no. 786 – Shali – out of 5 Satak – 2 Satak, Dag no. 184 – Shali – out of 22 Satak – 11 Satak, Total - 36 Satak, and property, within the Jurisdiction of Narendrapur Police Station in the District of South 24 Parganas, properly through Court.

 

7.   The Plaintiff served one Legal notice through his Learned Advocate, seeking thereby amicable partition of the Premises bearing Mouza – Khurigachhi, J.L. no. 21, RS Khatian no. 346, South 24 Parganas, Police Station – Sonarpur, presently Narendrapur Police Station, Dag no. 766 – Danga – out of 9 Satak – 1 Satak, Dag no. 796 – Bastu – out of 25 Satak – 4 ghar – 9 Satak, Dag no. 822 – Shali – out of 16 Satak – 5 Satak, Dag no. 819 – Shali – out of 25 Satak – 8 Satak ( Pukur ), Dag no. 786 – Shali – out of 5 Satak – 2 Satak, Dag no. 184 – Shali – out of 22 Satak – 11 Satak, Total - 36 Satak, and property, within the Jurisdiction of Narendrapur Police Station in the District of South 24 Parganas, with the defendants. The Legal notice vide Ref. no. AKS / AN / 1869 / 19, dated 28^th day of January’ 2019, served through the registered Speed Post, the track report of the Postal Authority shows due services on the defendants.

 

8.   The Defendants are in receipt of the Legal Notice for amicable partition of the Premises bearing Mouza – Khurigachhi, J.L. no. 21, RS Khatian no. 346, South 24 Parganas, Police Station – Sonarpur, presently Narendrapur Police Station, Dag no. 766 – Danga – out of 9 Satak – 1 Satak, Dag no. 796 – Bastu – out of 25 Satak – 4 ghar – 9 Satak, Dag no. 822 – Shali – out of 16 Satak – 5 Satak, Dag no. 819 – Shali – out of 25 Satak – 8 Satak ( Pukur ), Dag no. 786 – Shali – out of 5 Satak – 2 Satak, Dag no. 184 – Shali – out of 22 Satak – 11 Satak, Total - 36 Satak, and property, within the Jurisdiction of Narendrapur Police Station in the District of South 24 Parganas, West Bengal, though he did not respond anything and did not even reply to such notice.

 

9.   The  cause of action  of the instant suit arose in respect of Premises bearing Mouza – Khurigachhi, J.L. no. 21, RS Khatian no. 346, South 24 Parganas, Police Station – Sonarpur, presently Narendrapur Police Station, Dag no. 766 – Danga – out of 9 Satak – 1 Satak, Dag no. 796 – Bastu – out of 25 Satak – 4 ghar – 9 Satak, Dag no. 822 – Shali – out of 16 Satak – 5 Satak, Dag no. 819 – Shali – out of 25 Satak – 8 Satak ( Pukur ), Dag no. 786 – Shali – out of 5 Satak – 2 Satak, Dag no. 184 – Shali – out of 22 Satak – 11 Satak, Total - 36 Satak, and property, within the Jurisdiction of Narendrapur  Police Station in the District of South 24 Parganas, of undivided and un-partitioned , morefully described in the Schedule hereunder written which is within jurisdiction of this Learned Court and on and from the date the Plaintiff came to know that the Defendants are trying to sell some portion of undivided and un-partitioned schedule property and when the said defendants trying to demarcating the Suit Property illegally and unlawfully and trying to get illegal possession in the schedule property forcefully more than his shares and subsequent thereto time to time.

 

10.                This Court has the ample jurisdiction to try and dispose of the instant suit for partition.

 

11.                Accordingly the plaintiff claims for decree for partition in the     preliminary form declaring the respective share of the respective parties by mates and bound in the schedule property.

 

12.                The Plaintiff further claims for Administration and consequential reliefs in the schedule suit property.

 

13.                For the purpose of jurisdiction and the Court Fees the suit is valued at Rs. 99,000/= for Partition and Rs. 100/= for Injunction and the ad-velorem Court fees is paid herewith.

 

The plaintiff accordingly prays for the following reliefs:

 

a.           Preliminary Decree for partition declaring the share of the Plaintiff in respect of the suit property;

 

b.         Certain time be given to the Plaintiff  to make amicable partition in terms of the preliminary Decree and in the failure of the same a Survey passed Advocate Commissioner be appointed for effecting partition and on his Report a Final Decree be passed;

 

c.          A decree for permanent Injunction;

 

d.         Receiver over the suit property;

 

e.          Commission;

 

f.           Cost and other charges of the suit;

 

g.          Such other relief or reliefs as the learned court may deem fit and proper.

 

 

 

 

 

 

 

 

 

 

 

 SCHEDULE OF PROPERTY REFERRED TO

 

ALL THAT piece and parcel of Mouza – Khurigachhi, J.L. no. 21, RS Khatian no. 346, South 24 Parganas, Police Station – Sonarpur, presently Narendrapur Police Station, Dag no. 766 – Danga – out of 9 Satak – 1 Satak, Dag no. 796 – Bastu – out of 25 Satak – 4 ghar – 9 Satak, Dag no. 822 – Shali – out of 16 Satak – 5 Satak, Dag no. 819 – Shali – out of 25 Satak – 8 Satak ( Pukur ), Dag no. 786 – Shali – out of 5 Satak – 2 Satak, Dag no. 184 – Shali – out of 22 Satak – 11 Satak, Total - 36 Satak, and property, within the Jurisdiction of Narendrapur Police Station in the District of South 24 Parganas, West Bengal.

 

 

V E R I F I C A T I O N

 

I    the plaintiff do hereby declare that I verify for and say that the statement made in paragraphs No. 1 to _____ are true to the best of my knowledge and paragraphs No.  ___  to ____ the rest are my humble submission before this Learned Court.

 

 

 

I signed the verification

on this        day of                2019

at the Court Premises.

 

 

 

A F F I D A V I T

 

I Shri Amar Naskar, Son of Shri Bankim Naskar, aged about _______years, by faith Hindu, by Occupation _________________residing at Village – Khurigachhi, Post Office – Sonarpur, Kolkata – 700 150, Police Station – Narendrapur, District – 24 Parganas South, West Bengal,  do hereby affirm and say as follows:

 

    1.        That I am the plaintiff and am well conversant with the facts and circumstances of the case and am competent to affirm this affidavit for myself. 

 

2.                  I say that the statement made in paragraphs No: 1 to _____ are true to the best of my knowledge and paragraph No. _____  to ____ the rest are my humble submission before this Learned Court.

         

 

 

                              

Deponent

Prepared in my office                                              Identified by me

 

 Advocate                                                            Advocate

           

       NOTARY

      

 

THE PLAINTIFF RELIED UPON THE FOLLOWINGS DOCUMENTS:

 

1. Legal Notice being Ref. no. AKS / AN / 1869 / 19, dated 28^th day of January’ 2019,  Postal receipts, and Track report;

2. Parcha;

5. Other documents.

 

 

 

 

THE PLAINTIFFS FILED HEREWITH THE FOLLOWINGS DOCUMENTS:

 

1. Legal Notice being Ref. no. AKS / AN / 1869 / 19, dated 28^th day of January’ 2019,  Postal receipts, and Track report,

2. Parcha;

5. Other documents.

 

 

 

 

 

The Consumer Protection Act 2019

 

The Consumer Protection Act, 2019 (New Act)

Notification No. S.O. 2351(E) dated 15th July 2020 

The Consumer Protection Act, 2019 (‘New Act’) received the assent of the President of India and was published in the official gazette on 9th August 2019. This New Act will replace the old Consumer Protection Act, 1986 (‘Old Act’). The New Act will come into force on such date as the Central Government may so notify.

The New Act is an Act to provide for protection of the interests of consumers and for the said purpose, to establish authorities for timely and effective administration and settlement of consumers’ disputes and for matters connected therewith or incidental thereto. The New Act aims at strengthening consumer rights and protecting consumer interests, and further lays down simpler procedures to give consumers a speedy redressal. The Act also brings under its jurisdiction, the e- commerce and the tele-shopping industry.

Save as otherwise expressly provided by the Central Government, by notification, the New Act shall apply to all goods and services.

Now, recently, in exercise of the powers conferred by sub-section (3) of section 1 of the New Act, MINISTRY OF CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION (Department of Consumer Affairs) has issued a Notification No. S.O. 2351(E) dated 15th July 2020 (‘the Said Notification’) whereby the Central Government has appointed the 20th day of July, 2020 as the date on which the following provisions of the said Act shall come into force, namely:-

Chapter	Sections
I	Section 2 [Except clauses (4), (13), (14), (16), (40)]
II	Sections 3 to 9 (both inclusive);
IV	Sections 28 to 73 (both inclusive); [Except sub-clause (iv) of clause (a) of sub-section (1) of section 58.]
V	Sections 74 to 81 (both inclusive);
VI	Sections 74 to 81 (both inclusive);
VII	Sections 90 and 91; [Except sections 88,89,92 & 93]
VIII	-Sections 95, 98, 100, -Section101 [Except clauses (f) to (m) and clauses (zg), (zh) and (zi) of sub –section 2 ]. -Sections 102, 103, 105, 106, 107 [ Except sections 94, 96,97,99, 104]

Chapter IV [Sections 28 to 73 (both inclusive); Except sub-clause (iv) of clause (a) of sub-section (1) of section 58.] has been notified by the said Notification.

Chapter IV deals with ‘Consumer Dispute Redressal Commission’.

Now, we would like to try and deal herein only Chapter IV of the New Act. The rest of the provisions of the New Act may come in our next session.

Section 9 of the Old Act established three different authorities at three different levels to regulate and resolve matters related to consumers namely:

·         National Consumer Dispute Redressal Commission to be known as ‘National Commission’.

·         State Consumer Dispute Redressal Commission to be known as ‘State Commission’.

·         District Consumer Dispute Redressal Commission to be known as ‘District Forum’.

Now under New Act, the District Forum is renamed as ‘District Commission’. 

PECUNIARY LIMIT UNDER NEW ACT AND OLD ACT: – 

‘DISTRICT COMMISSION’: Subject to the other provisions of this Act, the District Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration does not exceed one crore rupees [Section 34 of the New Act].

Whereas, subject to the other provisions of this Act, the District Forum shall have jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed does not exceed rupees twenty lakhs [Section 11 of the old Act].  

‘STATE COMMISSION’: Subject to the other provisions of this Act, the State Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration, exceeds rupees one crore, but does not exceed rupees ten crore [Section 47(1) of the New Act].

Whereas, subject to the other provisions of this Act, the State Commission shall have jurisdiction to entertain complaints where the value of the goods or services and compensation, if any, claimed, exceeds rupees twenty lakhs, but does not exceed rupees one crore [Section 17(1) of the Old Act]. 

‘NATIONAL COMMISSION’: Subject to the other provisions of this Act, the National Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration, exceeds rupees ten crore [Section 58(1) of the New Act].

Whereas, subject to the other provisions of this Act, the National Commission shall have jurisdiction to entertain complaints where the value of the goods or services and compensation, if any, claimed, exceeds rupees one crore [Section 21 of the Old Act].

THE LIMITATION PERIOD FOR FILING OF APPEAL TO STATE COMMISSION IS INCREASED FROM 30 DAYS TO 45 DAYS.

Any person aggrieved by an order made by the District Commission may prefer an appeal against such order to the State Commission on the grounds of facts or law within a period of forty-five days from the date of the order, in such form and manner, as may be prescribed [Section 41 of the New Act] 

Whereas, pursuant to the provisions of Section 15 of the Old Act, any person aggrieved by an order made by the District Forum may prefer an appeal against such order to the State Commission within a period of thirty days from the date of the order, in such form and manner as may be prescribed. 

CHANGE IN DEPOSIT AMOUNT TO FILE AN APPEAL BEFORE STATE COMMISSION. 

The Opposite Party needs to deposit 50% of the amount ordered by District Commission before filing appeal before State Commission, earlier the ceiling was of maximum of Rs. 25,000/-, which has been removed. 

Second Proviso to Section 41 (1) of the New Act provides that no appeal by a person, who is required to pay any amount in terms of an order of the District Commission, shall be entertained by the State Commission unless the appellant has deposited fifty per cent of that amount in the manner as may be prescribed.

Whereas, Second Proviso to Section 15 of the Old Act provides that no appeal by a person, who is required to pay any amount in terms of an order of the District Forum, shall be entertained by the State Commission unless the appellant has deposited in the prescribed manner fifty per cent. of that amount or twenty-five thousand rupees, whichever is less. 

CHANGE IN DEPOSIT AMOUNT TO FILE AN APPEAL BEFORE NATIONAL COMMISSION. 

The Opposite Party needs to deposit 50% of the amount ordered by State Commission before filing appeal before National Commission, earlier the ceiling was of maximum of Rs. 35,000/, which has been removed.

Second Proviso to Section 51 (1) of the New Act provides that no appeal by a person, who is required to pay any amount in terms of an order of the State Commission, shall be entertained by the National Commission unless the appellant has deposited fifty per cent of that amount in the manner as may be prescribed.

Whereas, Second Proviso to Section 19 of the Old Act provides that no appeal by a person, who is required to pay any amount in terms of an order of the State Commission, shall be entertained by the National Commission unless the appellant has deposited in the prescribed manner fifty per cent. of the amount or rupees thirty-five thousand, whichever is less. 

CHANGE IN DEPOSIT AMOUNT TO FILE AN APPEAL BEFORE HON’BLE SUPREME COURT. 

The Opposite Party needs to deposit 50% of the amount ordered by National Commission before filing appeal before Hon’ble Supreme Court, earlier the ceiling was of maximum of Rs. 50,000/-, which has been removed. 

Second Proviso to Section 67 of the New Act provides that no appeal by a person who is required to pay any amount in terms of an order of the National Commission shall be entertained by the Supreme Court unless that person has deposited fifty per cent. of that amount in the manner as may be prescribed.

Whereas, Second Proviso to Section 23 of the Old Act provides that no appeal by a person who is required to pay any amount in terms of an order of the National Commission shall be entertained by the Supreme Court unless that person has deposited in the prescribed manner fifty per cent. of that amount or rupees fifty thousand, whichever is less.

APPEAL TO NATIONAL COMMISSION ONLY WHEN THERE IS A SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THE MATTER.  

Section of 51(2) of the New Act provides that Save as otherwise expressly provided under this Act or by any other law for the time being in force, an appeal shall lie to the National Commission from any order passed in appeal by any State Commission, if the National Commission is satisfied that the case involves a substantial question of law.

Whereas, it is pertinent to note that this provision was not contained in the Old Act.

POWER TO DECLARE ANY TERMS OF CONTRACT AS NULL AND VOID. 

Section 49(2) and 59(2) of the New Act gives power to the State Commission and National Commission respectively to declare any terms of contract, which is unfair to any consumer, to be null and void. 

Whereas it is pertinent to note that this provision was not contained in the Old Act. 

POWER OF REVISION. 

Power of revision can still be exercised by National Commission under Section 58(1)(b) of the New Act and by State commission under section 47(1)(b) of the New Act.

Subject to the other provisions of this Act, the State Commission shall have jurisdiction to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any District Commission within the State, where it appears to the State Commission that such District Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested or has acted in exercise of its jurisdiction illegally or with material irregularity. [Section 47(1)(b) of the New Act].

Subject to the other provisions of this Act, the National Commission shall have jurisdiction to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any State Commission where it appears to the National Commission that such State Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity [Section 58(1)(b) of the New Act]. 

Whereas it is pertinent to note that this provision was not contained in the Old Act. 

POWER OF REVIEW. 

Power of review has been conferred to District Commission, State Commission and National Commission under section 40, 50 and 60 of the New Act respectively

The District Commission shall have the power to review any of the order passed by it if there is an error apparent on the face of the record, either of its own motion or on an application made by any of the parties within thirty days of such order [Section 40 of the New Act].

The State Commission shall have the power to review any of the order passed by it if there is an error apparent on the face of the record, either of its own motion or on an application made by any of the parties within thirty days of such order [Section 50 of the New Act].

The National Commission shall have the power to review any of the order passed by it if there is an error apparent on the face of the record, either of its own motion or on an application made by any of the parties within thirty days of such order [Section 60 of the New Act]. 

Whereas, in the Old Act power of review was given only to National Commission. Pursuant to Section 22 of the Old Act the National Commission shall have the power to review any order made by it, when there is an error apparent on the face of record.

ENFORCEMENT OF ORDERS OF DISTRICT COMMISSION, STATE COMMISSION AND NATIONAL COMMISSION. 

Section 71 of the New Act confers power of execution as provided Under Order XXI, The Code of Civil Procedure, 1908 with such limitation as provided in the section.

Every order made by a District Commission, State Commission or the National Commission shall be enforced by it in the same manner as if it were a decree made by a Court in a suit before it and the provisions of Order XXI of the First Schedule to the Code of Civil Procedure, 1908 shall, as far as may be, applicable, subject to the modification that every reference therein to the decree shall be construed as reference to the order made under this Act. [Section 71 of the New Act].

 

The Factoring Regulation Act, 2011

 

The Factoring Regulation Act, 2011 was enacted on 22nd January 2012. The term factoring is a financial transaction wherein a business sells its accounts receivables to the third party at a discount and receives instantaneous payments to its business. All small scale industries use this option more often to fund its business during contingencies. As there is no proper legal structure regulating factoring in India, its role in business is very meager. This Act applies to all domestic and cross border factoring of receivables.

This Act deals with the issues relating to assignment of debt to factor, registration requirements for factoring and exemplifies in relation to debtor protection. The objective of this Act is to endow with regulation to factoring and assignment of receivables by making provisions for its regulation. It also endows the rights and obligations of parties to contract for accounts receivables. This Act also provides special provisions for small and micro enterprises. One of the significant provision brought out by this Act is by making registration of assignment with the help of SARFAESI Act, 2002 and by making assignment of receivables exempt from stamp duty.

The factor should not commence in factoring business without obtaining the Certificate of Registration from the Reserve Bank of India. The Reserve Bank of India can ask for any material particulars on factoring business from the Factor through any Special Order or General order if it deems necessary. This Bank has the capacity to give directions to the factors or group of factors applying for running a factoring business at its own interest in connection with the commencement of factoring business. In case if any factor fails to follow the directions given by the Reserve Bank of India then such factors shall be rejected from doing factoring business after giving reasonable opportunity of being heard. An Assignor by agreement in writing assigns any receivables payable to him by a debtor. The assignor and the assignee will get agreed on terms relating to considerations. The assignor at the time of assignment of receivables discloses about defenses and rights of set off available to the debtor. In case if the factoring business established outside India and if any assignments of receivables are subject to provisions of Foreign Exchange Management Act, 1999.

  The Assignee holds absolute rights on secured property received for assignment of receivables for any damages caused to him. In case of any encumbrances upon Assignment of receivables, the assignor can get consideration for such amount as he assigns receivable upon secured payment. The Assignee has no rights to demand payment from debtor on receivables unless notice served to him with express authority by the assignor. The debtor is bound to pay upon notice either by assignor or assignee in discharge of its obligation on receivables.  The Debtor has every right to notice of assignment without any injustice to any law in force for the time being. The debtor shall make payment to the Assignor on assigned receivables in accordance with the contract. The debtor shall intimate all information regarding deposits or payments made to the Assignee even before the receipt of notice from the Assignor. He is responsible for invalid discharge of payment made to the Assignor without any notice.

In case of assignment of receivables to the Micro or small enterprises, the debtor has to make payment on receivables subject to Micro, Small and Medium Enterprises Development Act, 2006. In case of delayed payment by debtors on receivables, the debtor has to pay interest to the Assignee on the delayed amount paid. In case of any assignment of receivables without any written consent by the debtor, he has no liabilities or obligations. If the Assignee claims against the debtor for payment of assigned receivables, the debtor can defense by right of set off from the original contract between Assignor and debtor. In case of agreement of assignment of receivable between Assignor and Debtor gets modified, the Assignee will hold rights over receivables.

In case of any breach of contract made by the Assignor to the debtor, the debtor has no rights to claim any amount paid to the Assignor or Assignee unless his rights has been affected. All the receivables were registered and are recorded in the central register kept in the central registry formed under SARFAESI Act, 2002. These records are kept open during business hours for public on payment of fees. Information on receivables is also available in electronic form. In case of any default in the information on receivables, such company shall be punished with fine for everyday till the default been rectified.

In case of not following Reserve Bank norms then such failure may lead to fine and has to be paid within two weeks from the Order. Reasonable opportunities are given to the defaulter. Any person who violates or tend to violate the provisions of this Act shall be punished with imprisonment with or without fine. Any person punishable under this Act shall not be punished under any Act unless in writing by the Reserve Bank of India. Only Metropolitan Magistrate, First Class Judicial Magistrate or Higher Courts only can entertain such offence punishable in this Act.

This Act prevails unless it affects any other law in force. This Act is an additional Act rather than being derogative to any other Act in force. The Laws in pursuance of factorization in India is still in embryonic stage. Proper legal structure will assist in its growth which has been initialized through this Act. The Reserve Bank must always be vigilant to move forward with more regulations on this subject matter.