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I have entered into a contract with my employer which provides that
I will be liable for criminal breach of trust in case of breach
of the contract. Is this provision enforceable under law?
A breach of a contract generally results in a right to claim damages
and other reliefs provided under the contract. Criminal liability
can only be imposed by statute, and liability accrues only where
the ingredients of the criminal offence are made out.
Therefore, ordinarily, you cannot be held liable
for criminal breach of trust in case of breach of contract, which
does not qualify as criminal breach of trust, that if, the ingredients
of the offence of criminal breach of trust are not made out in terms
of Section 409 of the Indian Penal Code.
However, you may be held liable for criminal
breach of trust if (i) you are employed in a fiduciary capacity
as an agent of your company, (ii) you have been entrusted with the
valuable property of the company while in that capacity, and (iii)
you have misappropriated such property of the company, irrespective
of whether there is a breach of contract or not.
Our company, which is based in United States,
has got an arbitral award in dollars. What is the best way that
we can repatriate the award amount outside India?
The proceeds of an arbitral award made in a
foreign currency can be repatriated outside India in accordance
with the Foreign Exchange Management Act, 1999, and the Foreign
Exchange Management (Current Account Transactions) Rules, 2000,
by applying to an authorised dealer in foreign exchange, subject
to payment of applicable Indian taxes. Your company does not require
to get any prior permission from the Reserve Bank of India for such
repatriation.
We have a director on the board of a private
limited company, in which we are a minority shareholder. What rights
of inspection and information do we have vis-a-vis the company?
As a shareholder of a private limited company,
your rights of inspection and information concerning the company
are limited to what is provided by the Companies Act, 1956, and
in the company's articles of association. You have a statutory right
to inspect (i) the company's register of members, the index of members,
the register and index of debenture holders and copies of all annual
returns together with copies of certificates and documents required
to be annexed, and (ii) the minutes books of the proceedings of
any general meeting of the company, which are made available for
a shareholder's inspection by the company for at least two hours
a day.
While the Companies Act does not contain express
provisions on a shareholder's rights of information, a shareholder
present (whether by representative or proxy) at an annual general
meeting can ask for information relating to the business of the
general meeting, including information of a financial nature while
considering the accounts, balance sheet, and the reports of the
Board of Directors and the auditors of the company. However, a director
of the company has greater rights of information and inspection
in the company's affairs since he acts as an agent of the company.
Under the Companies Act, your nominee director
has the specific right to inspect the books of account and other
books and papers, including bank statements and register of movable
assets of the company at any time during the company's business
hours. He will also be party to all information concerning the company
and its business; thus even as minority shareholder in the company,
you can benefit from your nominee director's superior powers of
information and inspection.
The views expressed here should not be construed
as legal opinion and is for reference only. Business Today and/or
the author will not be responsible for any decision taken by readers
on the basis of these views. Please send in your queries to Legal.bt@intoday.com
or Going By the Book, c/o Business Today, F-26, Connaught Place,
New Delhi-110001.
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