UNIT1

What is Constitution of India? – Introduction to the Constitution of India

The Indian Constitution is unique in both spirit and content. Notwithstanding the fact that several
features of the constitution have been borrowed from other constitutions from all around the world, it
is really a unique piece of work. The original constitution have been considerably changed by the
various amendments that have been brought forth such as the 7th, 42nd, 44th, 73rd and 74th
Amendments.

The basic principles and laws of a nation, state, or social group that determine the powers and duties
of the government and guarantee certain rights to the people in it. b : a written instrument embodying
the rules of a political or social organization.

Introduction to Indian Constitution

The framing of the Constitution was completed on November 26, 1949 when the
Constituent Assembly formally adopted the new Constitution. The Constitution came into force
with effect from January 26, 1950.

The Constitution contains the fundamental law of the land. It is the source of all powers of, and
limitations on, the three organs of State, viz.

The executive-managing

legislature - a group of people who have the power to make and change laws

Judiciary - the judges of a country or a state, when they are considered as a group

No action of the state would be valid unless it is permissible under the Constitution. Therefore, it is
imperative to have a clear understanding of the nature and working of the Constitution.

Objectives of The Constitution

The Constitution of Independent India was framed in the background of about 200 years of colonial
rule, mass-based freedom struggle, the national movement, partition of the country and spread of
communal violence. Therefore, the framers of the Constitution were concerned about the aspirations
of the people, integrity and unity of the country and establishment of a democratic society. Their main
was to give India a ‘Constitution’ which will fulfill the cherished ideas and ideals of the people of this
country.

The Constitution begins with a Preamble which declares India to be a Sovereign (highest possible
authority;King or queen), Socialist (economic or political system), Secular (not concerned with
religion), Democratic (all are equal), Republic (a country that has an elected government and an
elected leader). The Preamble also mentions the goals of securing justice, liberty and equality for all
its citizens and promotion of national unity and integrity on the basis of fraternity among the people
assuring dignity of the individual.
Salient Features of the Indian Constitution

The main features of Indian Constitution are the following:

1. A written Constitution: The Indian Constitution is mainly a written constitution. A written

constitution is framed at a given time and comes into force or is adopted on a fixed date as a
document. As you have already read that our constitution was framed over a period of 2 years, 11
months and 18 days, it was adopted on 26th November, 1949 and enforced on January 26,
1950. Certain conventions have gradually evolved over a period of time which have proved useful
in the working of the constitution.
2. Federal Policy: The Constitution of India does not use the term ‘federal state’. It says that
India is a ‘Union of States’. There is a distribution of powers between the Union/Central
Government and the State Governments. Since India is a federation, such distribution of functions
becomes necessary. There are three lists of powers such as Union List, State List and the
Concurrent List.

1. Parliamentary Democracy: India has a parliamentary form of democracy. This has been
adopted from the British system. In a parliamentary democracy there is a close relationship
between the legislature and the executive. The Cabinet is selected from among the members of
legislature. The cabinet is responsible to the latter. In fact the Cabinet holds office so long as it
enjoys the confidence of the legislature. In this form of democracy, the Head of the State is
nominal. In India, the President is the Head of the State. Constitutionally the President enjoys
numerous powers but in practice the Council of Ministers headed by the Prime Minister, which
really exercises these powers. The President acts on the advice of the Prime Minister and the
Council of Ministers.
2. Fundamental Rights and Duties: Fundamental Rights are one of the important features of the
Indian Constitution. The Constitution provides for six Fundamental Rights about which you will
read in the following lesson. Fundamental Rights are justiciable and are protected by the judiciary.
In case of violation of any of these rights one can move to the court of law for their
protection.Fundamental Duties were added to our Constitution by the 42nd Amendment. It lays
down a list of ten Fundamental Duties for all citizens of India. While the rights are given as
guarantees to the people, the duties are obligations which every citizen is expected to perform.
3. Directive Principles of State Policy: The Directive Principles of State Policy which have been
adopted from the Irish Constitution, is another unique feature of the Constitution of India. The
Directive Principles were included in our Constitution in order to provide social and economic
justice to our people. Directive Principles aim at establishing a welfare state in India where there
will be no concentration of wealth in the hands of a few.
4. Partly rigid and Partly flexible: A constitution may be called rigid or flexible on the basis of its
amending procedure. The Constitution of India provides for three categories of amendments. In the
first category, amendment can be done by the two houses of Parliament simple majority of the
members present and voting of before sending it for the President’s assent. In the second category
amendments require a special majority. Such an amendment can be passed by each House of
Parliament by a majority of the total members of that House as well as by the 2/3rd majority of the
members present and voting in each house of Parliament and send to the President for his assent
which cannot be denied. In the third category besides the special majority mentioned in the second
category, the same has to be approved also by at least 50% of the State legislatures.
5. Language Policy: India is a country where different languages are spoken in various parts of
the country. Hindi and English have been made official languages of the central government. A
state can adopt the language spoken by its people in that state also as its official language.
6. Special Provisions for Scheduled Castes and Scheduled Tribes: The Constitution provides for
giving certain special concessions and privileges to the members of these castes. Seats have been
reserved for them in Parliament, State legislature and local bodies, all government services and in
all professional colleges.
7. A Constitution Derived from Many Sources: The framers of our constitution borrowed many
things from the constitutions of various other countries and included them in our constitution. That
is why; some writers call Indian Constitution a ‘bag of borrowings’.
8. Independent Judiciary: Indian judiciary is independent an impartial. The Indian judiciary is
free from the influence of the executive and the legislature. The judges are appointed on the basis
of their qualifications and cannot be removed easily.
9. Single Citizenship: In India there is only single citizenship. It means that every Indian is a
citizen of India, irrespective of the place of his/her residence or place of birth. He/she is not a
citizen of the Constituent State like Jharkhand, Uttaranchal or Chattisgarh to which he/she may
belong to but remains a citizen of India. All the citizens of India can secure employment anywhere
in the country and enjoy all the rights equally in all the parts of India.
10. Universal Adult Franchise: Indian democracy functions on the basis of ‘one person one vote’.
Every citizen of India who is 18 years of age or above is entitled to vote in the elections
irrespective of caste, sex, race, religion or status. The Indian Constitution establishes political
equality in India through the method of universal adult franchise.
11. Emergency Provisions: The Constitution makers also foresaw that there could be situations
when the government could not be run as in ordinary times. To cope with such situations, the
Constitution elaborates on emergency provisions. There are three types of emergency; a)
emergency caused by war, external aggression or armed rebellion; b) emergency arising out of the
failure of constitutional machinery in states; and c) financial emergency.

Theory of Basic Structure

1. Supremacy of Constitution
2. Republican and Democratic form of Government

Important Amendments of the Constitution of India

The Indian Constitution is not a rigid constitution. It can be amended by the Parliament following a
few rules. There have been made many changes in the Constitution of India. Some of the important
amendments of the Indian Constitution are:

1. 42nd Amendment
2. 44th Amendment

The 42nd Amendment is also known as the “Mini Constitution” because it made several sweeping
changes to the constitution. This was during the Emergency in 1976. In 1973, the Supreme Court had
ruled in the Kesavananda Bharati case that the constituent power of the Parliament under Article 368
does not empower it to alter the basic structure of the constitution.

Constitution of India – Preamble

The first constitution to start with a preamble was the American Constitution. The Indian constitution
also starts with one. The Preamble is basically the introduction or preface to the constitution. It sums
up the essence of the constitution. N A Palkhivala, a constitutional expert, referred to the Preamble as
the ‘Identity card of the Constitution’.

The Preamble is based on Pandit Nehru’s Objective Resolution that he moved and was adopted by
the Constituent Assembly. The Preamble has been amended in 1976 by the 42nd Amendment which
added words ‘socialist’(economc equality), ‘secular’(not concerned with religion) and ‘integrity’(state
of being united) to it.

The Preamble reads:

“WE, THE PEOPLE OF INDIA, having solemnly resolved to constitute India into a SOVEREIGN
SOCIALIST SECULAR DEMOCRATIC REPUBLIC and to secure to all its citizens:
JUSTICE, social, economic and political;

LIBERTY of thought, expression, belief, faith and worship;

EQUALITY of status and of opportunity;

and to promote among them all

FRATERNITY assuring the dignity of the individual and the unity and integrity of the Nation;

IN OUR CONSTITUENT ASSEMBLY this twenty-sixth day of November, 1949, do HEREBY

ADOPT, ENACT AND GIVE TO OURSELVES THIS CONSTITUTION.”

Ingredients of the Preamble

The Preamble gives 4 components:

1. Source of authority of the Constitution: it mentions that the constitution derives its power from
the people of India.
2. Nature of the Indian State: it says India is a sovereign, socialist, secular, democratic and
republican State.
3. Objectives of the Constitution: it gives the objectives as – justice, liberty, equality and
fraternity.
4. Constitution date of adoption: 26th November 1949

Is preamble a part of Yes, it is a part of the Indian constitution, also emphasized in Kesavananda
Indian Constitution? Bharti Case.

Who wrote the preamble The preamble of India contains tenets (principles) highlighted in the
of India? Objective Resolution drafted by Jawaharlal Nehru in 1946

How many preambles Only 1 preamble along with 22 parts and 12 schedules and 448 articles,
does the Indian Indian Constitution today exists
Constitution have?

What is the most Though no particular word has been given more importance than others,
important word in the however, ‘We, the people of India’ are the words which are termed as the
Preamble of India? most powerful in the Preamble to the Indian Constitution

Why do we need a It gives us fundamental values and highlights of the Constitution

Preamble?

In which case, did the Supreme Court declare passed a In Berubari Case (1960), SC declared
judgement that Preamble is not a part of Indian Constitution? Preamble not to be a part of Indian
Constitution
What is the Berubari case (1960)?

At the time of partition of India and Pakistan, the task of demarcation (marking of the limits) of
boundaries was assigned to Sir Radcliffe.(it was decided that task of demarcation shall be assigned to
a person who doesn’t know about geography of India and never visited it. This was to ensure no bias
while demarcation)

He distributed Thanas (Police station) between India and Pakistan and the boundaries of such Thanas
would going to be the ultimate boundary between India and Pakistan.

There was this Thana ‘Berubari’ in Jalpaigudi district of West Bengal. Radcliffe awarded it to India
but unfortunately it was not mentioned in the written text of the award.

This gave opportunity to Pakistan to claim on Berubari, citing a reason that Berubari falls in the map
of Pakistan.

Dispute continued till Nehru-Noon agreement was signed in 1958 between India and Pakistan. (Feroz
shah Noon was the then PM of Pakistan)

In the agreement, the territory of Berubari Union was divided and distributed equally between India
and Pakistan. (Against the wishes of West Bengal govt)

After criticism, Union govt decided to refer matter to the supreme Court. (That’s why case is named In
Re Berubari Union )

Supreme Court said article 3 (c) give parliament a power to diminish state territory but doesn’t give
power to cede. Mere exercising power under article 3 is not sufficient, Parliament has to bring an
amendment to the Constitution using power and procedure mentioned in article 368. (It should be
noted that amendment using article 3 can be done by an ordinary majority in the parliament, but under
Article 368, special majority is required)

So 9th Constitutional Amendment Act 1960 was enacted to give effect to the agreement.

Now you will also understand that why 100th Constitutional Amendment Act, which allows to
exchange enclaves between India and Bangladesh, was enacted in 2015.
Note- Supreme Court in 1969 ruled that, settlement of boundary dispute between India and any other
country doesn’t require constitutional amendment, it can be done by an executive action (govt action),
if it doesn’t involve cession of a territory.

Fundamental rights

It is a basic static portion of the syllabus but it is highly dynamic in the sense that it is featured in the
daily news in some form or the other.

6 fundamental rights of India:

1. Right to Equality
2. Right to Freedom
3. Right against Exploitation
4. Right to Freedom of Religion
5. Cultural and Educational Rights
6. Right to Constitutional Remedies

What are the Fundamental Rights?

Fundamental rights are the basic human rights enshrined in the Constitution of India which are
guaranteed to all citizens. They are applied without discrimination on the basis of race, religion,
gender, etc. Significantly, fundamental rights are enforceable by the courts, subject to certain
conditions.

Why are they called Fundamental Rights?

These rights are called fundamental rights because of two reasons:

1. They are enshrined in the Constitution which guarantees them

2. They are justiciable (enforceable by courts). In case of a violation, a person can approach a
court of law.

List of Fundamental Rights

There are six fundamental rights of Indian Constitution along with the constitutional articles related to
them are mentioned below:

1. Right to Equality (Article 14-18)

2. Right to Freedom (Article 19-22)
3. Right against Exploitation (Article 23-24)
4. Right to Freedom of Religion (Article 25-28)
5. Cultural and Educational Rights (Article 29-30)
6. Right to Constitutional Remedies (Article 32)

Why Right to Property is not a Fundamental Right?

There was one more fundamental right in the Constitution, i.e., the right to property.
However, this right was removed from the list of fundamental rights by the 44th Constitutional
Amendment.

This was because this right proved to be a hindrance towards attaining the goal of socialism and
redistributing wealth (property) equitably among the people.

1. Right to Equality (Articles 14 – 18)

Right to equality guarantees equal rights for everyone, irrespective of religion, gender, caste, race or
place of birth. It ensures equal employment opportunities in the government and insures against
discrimination by the State in matters of employment on the basis of caste, religion, etc. This right also
includes the abolition of titles as well as untouchability.

2. Right to Freedom (Articles 19 – 22)

Freedom is one of the most important ideals cherished by any democratic society. The Indian
Constitution guarantees freedom to citizens. The freedom right includes many rights such as:

• Freedom of speech
• Freedom of expression
• Freedom of assembly without arms
• Freedom of association
• Freedom to practise any profession
• Freedom to reside in any part of the country

Some of these rights are subject to certain conditions of state security, public morality and decency
and friendly relations with foreign countries. This means that the State has the right to impose
reasonable restrictions on them.

3. Right against Exploitation (Articles 23 – 24)

This right implies the prohibition of traffic in human beings, begar, and other forms of forced labour.
It also implies the prohibition of children in factories, etc. The Constitution prohibits the employment
of children under 14 years in hazardous conditions.

4. Right to Freedom of Religion (Articles 25 – 28)

This indicates the secular nature of Indian polity. There is equal respect given to all religions. There is
freedom of conscience, profession, practice and propagation of religion. The State has no official
religion. Every person has the right to freely practice his or her faith, establish and maintain religious
and charitable institutions.

5. Cultural and Educational Rights (Articles 29 – 30)

These rights protect the rights of religious, cultural and linguistic minorities, by facilitating them to
preserve their heritage and culture. Educational rights are for ensuring education for everyone without
any discrimination.

6. Right to Constitutional Remedies (32 – 35)

The Constitution guarantees remedies if citizens’ fundamental rights are violated. The government
cannot infringe upon or curb anyone’s rights. When these rights are violated, the aggrieved party can
approach the courts. Citizens can even go directly to the Supreme Court which can issue writs for
enforcing fundamental rights.
Features of Fundamental Rights

• Fundamental rights are different from ordinary legal rights in the manner in which they are
enforced. If a legal right is violated, the aggrieved person cannot directly approach the SC
bypassing the lower courts. He or she should first approach the lower courts.
• Some of the fundamental rights are available to all citizens while the rest are for all persons
(citizens and foreigners).
• Fundamental rights are not absolute rights. They have reasonable restrictions, which means
they are subject to the conditions of state security, public morality and decency and friendly
relations with foreign countries.
• They are justiciable, implying they are enforceable by courts. People can approach the SC
directly in case of violation of fundamental rights.
• Fundamental rights can be amended by the Parliament by a constitutional amendment but only
if the amendment does not alter the basic structure of the Constitution.
• Fundamental rights can be suspended during a national emergency. But, the rights guaranteed
under Articles 20 and 21 cannot be suspended.
• The application of fundamental rights can be restricted in an area which has been placed under
martial law or military rule.

Fundamental Rights Available Only to Citizens

The following is the list of fundamental rights that are available only to citizens (and not to
foreigners):

1. Prohibition of discrimination on grounds of race, religion, caste, gender or place of birth

(Article 15).
2. Equality of opportunity in matters of public employment (Article 16).
3. Protection of freedom of:(Article 19)
1. Speech and expression
2. Association
3. Assembly
4. Movement
5. Residence
6. Profession
4. Protection of the culture, language and script of minorities (Article 29).
5. Right of minorities to establish and administer educational institutions (Article 30).

Fundamental Duties

The Government is planning to assign its different Ministries with the task of spreading awareness
about Fundamental duties among people.

▪ The idea of Fundamental Duties is inspired from the Constitution of Russia.

▪ These were incorporated in Part IV-A of the Constitution by the 42nd Constitutional
Amendment Act, 1976 on the recommendations of Swaran Singh Committee.
▪ Originally 10 in number, one more duty was added through the 86th Constitutional
Amendment Act, 2002. All the eleven duties are listed in Article 51-A of the Constitution (the sole
Article in Part-IV-A).
▪ The fundamental duties serve as a reminder to citizens that while enjoying their rights, they
have also to be quite conscious of duties they owe to their country, their society and to their
fellow-citizens.
▪ However, like the Directive Principles, the duties are also non-justiciable in nature.

List of Fundamental Duties

▪ To abide by the Constitution and respect its ideals and institutions, the National Flag and the
National Anthem;
▪ To cherish and follow the noble ideals that inspired the national struggle for freedom;
▪ To uphold and protect the sovereignty, unity and integrity of India;
▪ To defend the country and render national service when called upon to do so;
▪ To promote harmony and the spirit of common brotherhood amongst all the people of India
transcending religious, linguistic and regional or sectional diversities and to renounce practices
derogatory to the dignity of women;
▪ To value and preserve the rich heritage of the country’s composite culture;
▪ To protect and improve the natural environment including forests, lakes, rivers and wildlife
and to have compassion for living creatures;
▪ To develop scientific temper, humanism and the spirit of inquiry and reform;
▪ To safeguard public property and to abjure violence;
▪ To strive towards excellence in all spheres of individual and collective activity so that the
nation constantly rises to higher levels of endeavour and achievement; and
▪ To provide opportunities for education to his child or ward between the age of six and fourteen
years (added by the 86th Constitutional Amendment Act, 2002).

Parliamentary system

Parliamentary system has been taken from the United Kingdom because U.K. constitution is the
mother constitution of parliamentarianism. It is also called ministerial or cabinet system. Cabinet or
parliamentary form of government is that in which; Legislature and executive are closely related
and share powers with each other. Cabinet is formed by the parliament and parliament is the
superior organ. There are two executives i.e. the elected president or king and the Prime Minister.
President represents state and Prime Minister represents government. Cabinet is responsible before
the legislature.
The democratic system of government can be divided into the parliamentary and the presidential
system based on the relationship between the executive and the legislature. In a parliamentary system,
executive is a part of legislature, which implements the law and plays an active role in framing it as
well.

Features of Parliamentary System

Elements and Features of Parliamentary System are;

1. Nominal and Real Head: The head of the state holds a ceremonial position and is the nominal
executive. For example, the President.

2. In India, the head of government is the Prime Minister who is the real executive. Article 75 of the
Indian constitution provides for a Prime Minister to be appointed by the president. According to
Article 74, the Prime Minister headed council of ministers would aid and advise the President in the
exercise of his functions.

3.Executive is a Part of Legislature: The Executive forms a part of the legislature. In India, the
person should be a member of parliament to become a member of the executive. However, the
constitution provides that a person can be appointed as a minister for a period of not more than six
consecutive months if he is not a member of the parliament, after which the person ceases to be a
minister.

4. Majority Party Rule: The party which wins majority seats in the elections of the Lower House
forms the government. In India, the President invites the leader of the majority party in Lok Sabha to
form the government. The President appoints the leader as the Prime Minister and the other ministers
are appointed by the President on the advice of the Prime Minister. The President may invite a
coalition of parties to form the government, in case, no party has got majority.

5. Collective Responsibility: The council of ministers are collectively responsible to the parliament.
The lower house of parliament has an ability to dismiss a government by getting the no confidence
motion passed in the house. In India, the government survives till the time it enjoys support of the
majority of members in the Lok Sabha. Thus, Lok Sabha is empowered to introduce no-confidence
motion against the government.

6.Prime Minister as the Centre of Power: In India, the Prime Minister is the real executive. He is
the head of the government, the council of ministers and the ruling government. Thus, he has to play a
significant and important role in the working of the government.

7. A Parliamentary Opposition: No government in the parliament can get hundred percent majority.
The opposition plays an important role in checking the arbitrary use of authority by the political
executive.

8. Independent Civil Service: The civil servants advice and implement decisions of the government.
Civil servants hold permanent appointments based on merit-based selection process. They ensure
continuity of employment even when the government changes. The civil service also ensures
efficiency in execution of duties and responsibilities.

9. Bicameral Legislature: Most of the countries following parliamentary system, including India,
have bicameral legislature. The members of the Lower House of all these countries are elected by the
people. The Lower House can be dissolved, in case, the term of the government is over or there is no
scope of government formation due to lack of majority in house. In India, the President can dissolve
the Lok Sabha on recommendation of the Prime Minister.

10. Secrecy: The members of the executive in this system have to follow the principle of secrecy in
matters such as proceedings, executive meetings, policymaking etc. In India, the ministers take oath of
secrecy before entering their office.

Advantages of Parliamentary System

The parliamentary system has the following advantages over the presidential system:

1. Represents Diverse Group: The parliamentary form of government provides opportunity to

various ethnically, racially, linguistically and ideologically diverse groups to share their views in
framing of laws and policymaking. Countries, such as India, which have high level of diversity
enables accommodation by providing political space to various diverse sections of the society.

2. Better Co-Ordination Between Legislature and Executive: The executive is a part of the
legislature. As the government enjoys the support of majority of members in the lower house, the
tendency of disputes and conflicts decreases. It makes easy for the government to pass the legislation
in the parliament and implement them.

3. Prevents Authoritarianism: In a parliamentary system, the tendency of authoritarianism decreases

as the power is vested in the council of minister rather than a single individual. The parliament can
remove the government through no-confidence motion.

4. Responsible Government: The parliament can check the activities of the executive as the latter is
responsible to the former. In a presidential system, the president is not responsible to the legislature.
The members of the parliament can ask question, move resolutions, and discuss matters of public
importance to pressurize the government. Such provisions are not available in Presidential system.

5. Availability of Alternate Government: The lower house of the parliament can introduce and pass
a no-confidence motion. In such a situation, the head of the state invites the leader of the opposition
party to form the government. In the United Kingdom, the opposition forms a shadow cabinet for the
cabinet of the government, so that they can become ready for the role.

Functions of Parliament

The functions of the Parliament are mentioned in the Indian Constitution in Chapter II of Part V. The
functions of the Parliament can be classified under several heads. They are discussed below:

Legislative Functions

• The Parliament legislates on all matters mentioned in the Union List and the Concurrent List.
• In the case of the Concurrent List, where the state legislatures and the Parliament have joint
jurisdiction, the union law will prevail over the states unless the state law had received the
earlier presidential assent. However, the Parliament can any time, enact a law adding to,
amending, varying or repealing a law made by a state legislature.
• The Parliament can also pass laws on items in the State List under the following
circumstances:
• If Emergency is in operation, or any state is placed under President’s Rule (Article
356), the Parliament can enact laws on items in the State List as well.
• As per Article 249, the Parliament can make laws on items in the State List if the Rajya
Sabha passes a resolution by ⅔ majority of its members present and voting, that it is
necessary for the Parliament to make laws on any item enumerated in the State List, in
the national interest.
• As per Article 253, it can pass laws on the State List items if it is required for the
implementation of international agreements or treaties with foreign powers.
• According to Article 252, if the legislatures of two or more states pass a resolution to
the effect that it is desirable to have a parliamentary law on any item listed in the State
List, the Parliament can make laws for those states.

Executive Functions (Control over the Executive)

In the parliamentary form of government, the executive is responsible to the legislature. Hence, the
Parliament exercises control over the executive by several measures.

• By a vote of no-confidence, the Parliament can remove the Cabinet (executive) out of power.
It can reject a budget proposal or any other bill brought by the Cabinet. A motion of no-
confidence is passed to remove a government from office.
• The MPs (Members of Parliament) can ask questions to the ministers on their ommissions and
commissions. Any lapses on the part of the government can be exposed in the Parliament.
 • Adjournment Motion: Allowed only in the Lok Sabha, the chief objective of the adjournment
motion is to draw the attention of the Parliament to any recent issue of urgent public interest. It
is considered an extraordinary tool in Parliament as the normal business is affected.
• The Parliament appoints a Committee on Ministerial Assurances that sees whether the
promises made by the ministers to the Parliament are fulfilled or not.
• Censure Motion: A censure motion is moved by the opposition party members in the House
to strongly disapprove any policy of the government. It can be moved only in the Lok Sabha.
Immediately after a censure motion is passed, the government has to seek the confidence of the
House. Unlike in the case of the no-confidence motion, the Council of Ministers need not
resign if the censure motion is passed.
• Cut Motion: A cut motion is used to oppose any demand in the financial bill brought by the
government.

Financial Functions

Parliament is the ultimate authority when it comes to finances. The Executive cannot spend a single
pie without parliamentary approval.

• The Union Budget prepared by the Cabinet is submitted for approval by the Parliament. All
proposals to impose taxes should also be approved by the Parliament.
• There are two standing committees (Public Accounts Committee and Estimates Committee) of
the

• Parliament to keep a check on how the executive spends the money granted to it by the
legislature. You can also read on parliamentary committees.
• Also see: Money Bills.

Amending Powers

The Parliament has the power to amend the Constitution of India. Both Houses of the Parliament have
equal powers as far as amending the Constitution is concerned. Amendments will have to be passed in
both the Lok Sabha and the Rajya Sabha for them to be effective.

Electoral Functions

The Parliament takes part in the election of the President and the Vice President. The electoral college
that elects the President comprises of, among others, the elected members of both Houses. The
President can be removed by a resolution passed by the Rajya Sabha agreed to by the Lok Sabha.

Judicial Functions

In case of breach of privilege by members of the House, the Parliament has punitive powers to punish
them. A breach of privilege is when there is an infringement of any of the privileges enjoyed by the
MPs.

• A privilege motion is moved by a member when he feels that a minister or any member has
committed a breach of privilege of the House or one or more of its members by withholding
facts of a case or by giving wrong or distorted facts.

• In the parliamentary system, legislative privileges are immune to judicial control.

• The power of the Parliament to punish its members is also generally not subject to judicial
review.
 • Other judicial functions of the Parliament include the power to impeach the President, the Vice
President, the judges of the Supreme Court, High Courts, Auditor-General, etc.

Other powers/functions of the Parliament

• Issues of national and international importance are discussed in the Parliament. The opposition
plays an important role in this regard and ensures that the country is aware of alternate
viewpoints.
• A Parliament is sometimes talked of as a ‘nation in miniature’.
• In a democracy, the Parliament plays the vital function of deliberating matters of importance
before laws or resolutions are passed.
• The Parliament has the power to alter, decrease or increase the boundaries of states/UTs.
• The Parliament also functions as an organ of information. The ministers are bound to provide
information in the Houses when demanded by the members.

Federalism is a system of government in which powers have been divided between the centre and its
constituent parts such as states or provinces. It is an institutional mechanism to accommodate two sets
of politics, one at the centre or national level and second at the regional or provincial level. It makes
an important part of Indian Polity syllabus of the IAS Exam. This article will introduce you to
Federalism in India notes.

Indian Federal System – Two Types of Federations

In a federation system, there are two seats of power that are autonomous(independent) in their own
spheres. A federal system is different from a unitary system in that sovereignty is constitutionally split
between two territorial levels so that each level can act independently of each other in some areas.

There are two kinds of federations:

1. Holding Together Federation (remain united)– In this type, powers are shared between various
constituent parts to accommodate the diversity in the whole entity. Here, powers are generally
tilted towards the central authority. Example: India, Spain, Belgium.
2. Coming Together Federation (to join) – In this type, independent states come together to form
a larger unit. Here, states enjoy more autonomy as compared to the holding together kind of
federation. Example: USA, Australia, Switzerland.

Features of the Federal System of India

1. Dual government polity

2. Division of powers between various levels
3. Rigidity of constitution
4. Independence judiciary
5. Dual citizenship
6. Bicameralism (having two branches)

All federations might not have all the above features. Some of them may be incorporated depending
on what type of federation it is.

Federalism in India

India is a federal system but with more tilt towards a unitary system of government. It is sometimes
considered a quasi-federal system as it has features of both a federal and a unitary system. Article 1 of
the Indian Constitution states, ‘India, that is Bharat, shall be a union of states’. The word federation is
not mentioned in the constitution.
Elements of federalism were introduced into modern India by the Government of India Act of
1919 which separated powers between the centre and the provincial legislatures.

Federal Features of the Indian Union

• Governments at two levels – centre and states

• Division of powers between the centre and states – there are three lists given in the Seventh
Schedule of the Constitution which gives the subjects each level has jurisdiction in:
• Union List
• State List
• Concurrent List
• Supremacy of the constitution – the basic structure of the constitution is indestructible as laid
out by the judiciary. The constitution is the supreme law in India.
• Independent judiciary – the constitution provides for an independent and integrated judiciary.
The lower and district courts are at the bottom levels, the high courts are at the state levels and
at the topmost position is the Supreme Court of India. All courts are subordinate to the
Supreme Court.

Unitary Features of the Indian Union

• The flexibility of the constitution – the constitution is a blend of flexibility and rigidity. Certain
provisions of the constitution can be easily amended. In case the amendments seek to change
aspects of federalism in India, the provision to bring about such amendments is not easy.
• More power vests with the Centre – the constitution guarantees more powers with the Union
List. On the Concurrent List subjects, the parliament can make laws that can override the laws
made by a state legislature on some matters. The parliament can also make laws regarding
certain subjects in the State List.
• Unequal representation of states in the Rajya Sabha – the representation of the states in the
upper house is based on the states’ populations. For example, Uttar Pradesh has 31 seats and
Goa, 1 in the Rajya Sabha. In an ideal federal system, all the states should have equal
representation.
• The executive is a part of the legislature – in India, the executive in both the centre and the
states is a part of the legislature. This goes against the principle of division of powers between
the different organs of the government.
• Lok Sabha is more powerful than the Rajya Sabha – in our system, the Lok Sabha is more
powerful than the upper house and unequal powers to two houses is against the principle of
federalism.
• Emergency powers – the centre is provided with emergency powers. When an emergency is
imposed, the centre has increased control over states. This undermines the autonomy of the
states. (You may also read about President’s rule – Article 356 in the linked article.)
• Integrated judiciary – the judiciary in India is integrated. There is no separate judiciary at the
centre and the state levels. (Gain more information about Indian Judiciary from the notes
mentioned in the linked article. )
• Single citizenship – in India, only single citizenship is available to citizens. They cannot be
citizens of the state as well. This helps in increasing the feeling of nationality as it forges unity
amidst regional and cultural differences. It also augments fundamental rights such as the
freedom of movement and residence in any part of the nation.

• Governor’s appointment – the governor of a state acts as the centre’s representative in the state.
The state government does not appoint the governor, the centre does.
• New states formation – the parliament has the power to alter the territory of a state by
increasing or reducing the area of the state. It can also change the name of a state.
 • All India Services – through the All India Services such as the IAS, IPS, etc. the centre
interferes in the executive powers of the states. These services also offer uniformity in
administration throughout the nation.
• Integrated election machinery – the Election Commission of India is responsible for
conducting free and fair elections at both the centre and the state levels in India. The members
of the EC is appointed by the president.
• Veto over states bills – The governor of a state can reserve certain kinds of bills for the
president’s consideration. The president enjoys absolute veto on these bills. He can even reject
the bill at the second instance that is when the bill is sent after reconsideration by the state
legislature. This provision is a departure from the principles of federalism.
• Integrated audit machinery – the president of the country appoints the CAG who audits
accounts of both the centre and the states.
• Power to remove key officials – the state government or state legislature does not have the
authority to remove certain key government officials even at the state level like the election
commissioner of a state, judges of the high courts, or the chairman of the state public service
commissions.
Emergency Provisions: National Emergency
When the Constitution of India was being drafted, India was passing through a period of stress and
strain. Partition of the country, communal riots and the problem concerning the merger of princely
states including Kashmir. Thus, the Constitution-makers thought to equip the Central Government
with the necessary authority, so that, in the hour of emergency, when the security and stability of the
country is threatened by internal and external threats. Therefore, some emergency provisions were
made in Constitution to safeguard and protect the security, integrity and stability of the country and
effective functioning of State Governments.

Objectives

After studying this lesson, you will be able to

1. recognise that the Union Government has no option except to assume extraordinary powers in
emergencies;

2. identify the situations in which the President can proclaim a state of National Emergency under
Article 352;

3. describe the various effects of National Emergency relating to the executive, legislative, and
financial matters, with special reference to the fundamental Rights;

4. cite examples of National Emergencies proclaimed in the country with their duration and effect; l
describe the circumstances in which the President can make a proclamation under Article 356
imposing President’s Rule in a state;

5. cite a few examples when such proclamations were made due to the breakdown of constitutional
machinery;

6. recall that imposition of President’s Rule has often been controversial in the context of smooth
Centre – State relations;

Proclamation of National Emergency (Article 352)

The Constitution of India has provided for imposition of emergency caused by war, external
aggression or internal rebellion. This is described as the National Emergency. This type of emergency
can be declared by the President of India if he is satisfied that the situation is very grave and the
security of India or any part thereof is threatened or is likely to be threatened either (i) by war or
external aggression or (ii) by armed rebellion within the country. The President can issue such a
proclamation even on the ground of threat of war or aggression. According to the 44th Amendment of
the Constitution, the President can declare such an emergency only if the Cabinet recommends in
writing to do so.

Effects of National Emergency

The declaration of National Emergency has far-reaching effects both on the rights of individuals and
the autonomy of the states in the following manner :
(i) The most significant effect is that the federal form of the Constitution changes into unitary. The
authority of the Centre increases and the Parliament assumes the power to make laws for the entire
country or any part thereof, even in respect of subjects mentioned in the State List.

(ii) The President of India can issue directions to the states as to the manner in which the executive
power of the states is to be exercised.

(iii) During this period, the Lok Sabha can extend its tenure by a period of one year at a time. But the
same cannot be extended beyond six months after the proclamation ceases to operate. The tenure of
State Assemblies can also be extended in the same manner.

(iv) During emergency, the President is empowered to modify the provisions regarding distribution of
revenues between the Union and the States.

(v) The Fundamental Rights under Article 19 about which you have already learnt are automatically
suspended and this suspension continues till the end of the emergency. But according to the
44thAmendment, Freedoms listed in Article 19 can be suspended only in case of proclamation on the
ground of war or external aggression.

Emergency due to Failure of Constitutional Machinery in a State

It is the duty of the Union Government to ensure that governance of a State is carried on in
accordance with the provisions of the Constitution. Under Article 356, the President may issue a
proclamation to impose emergency in a state if he is satisfied on receipt of a report from the Governor
of the State, or otherwise, that a situation has arisen under which the Government of the State cannot
be carried on smoothly. In such a situation, proclamation of emergency by the President is called
‘proclamation on account of the failure (or breakdown) of constitutional machinery.’ In popular
language it is called the President’s Rule.

Effects of Imposition of President’s Rule in a State

The declaration of emergency due to the breakdown of Constitutional machinery in a State has the
following effects:
(i) The President can assume to himself all or any of the functions of the State Government or he may
vest all or any of those functions with the Governor or any other executive authority.
(ii) The President may dissolve the State Legislative Assembly or put it under suspension. He may
authorise the Parliament to make laws on behalf of the State Legislature.
(iii) The President can make any other incidental or consequential provision necessary to give effect to
the object of proclamation.
Financial Emergency
The third type of Emergency is Financial Emergency provided under Article 360. It provides that if
the President is satisfied that the financial stability or credit of India or any of its part is in danger, he
may declare a state of Financial Emergency. Like the other two types of emergencies, it has also to be
approved by the Parliament. It must be approved by both Houses of Parliament within two months.
Financial Emergency can operate as long as the situation demands and may be revoked by a
subsequent proclamation.
Effects of Financial Emergency
The proclamation of Financial Emergency may have the following consequences:
(a) The Union Government may give direction to any of the States regarding financial matters.
(b) The President may ask the States to reduce the salaries and allowances of all or any class of
persons in government service.
(c) The President may ask the States to reserve all the money bills for the consideration of the
Parliament after they have been passed by the State Legislature. (d) The President may also give
directions for the reduction of salaries and allowances of the Central Government employees including
the Judges of the Supreme Court and the High Courts. So far, fortunately, financial emergency has
never been proclaimed.

The difference between national emergency and presidential rule are as follows:
N. National Emergency (352) President’s Rule (356)
1. It can be proclaimed only It can be proclaimed when the
when the security of India or a government of a state cannot be
part of it is threatened by war, carried on in accordance with the
external aggression or armed provisions of the Constitution due
rebellion. to reasons which may not have any
connection with war, external
aggression or armed rebellion.
2. During its operation, the state During its operation, the state
executive and legislature executive is dismissed and the
continue to function and state legislature is either
exercise the powers assigned suspended or dissolved. The
to them under president administers the state
the Constitution. Its effect is through the governor and the
that the Centre gets concurrent Parliament makes laws for the
powers of administration and state. In brief, the executive and
legislation in the state. legislative powers of the state are
assumed by the Centre.
3. The Parliament can make laws The Parliament can delegate the
on the subjects enumerated in power to make laws for the state to
the State List only by itself, the President or to any other
i.e. it can’t delegate the same authority specified by him. So far,
to any other body or authority. the practice has been for the
president to make laws for the
state in consultation with the
members of Parliament from that
 state.

4. There is no maximum period There is a maximum period

prescribed for its operation. It prescribed for its operation, that is,
can be continued indefinitely three years. Thereafter, it must
with the approval of come to an end and the normal
Parliament for every six constitutional machinery must be
months. restored in the state.
5. Under this, the relationship of Under this, the relationship of only
the Centre with all the states the state under emergency with the
undergoes a modification. Centre undergoes a modification.
6. It affects fundamental rights It has no effect on Fundamental
(FR) of the citizens. Rights (FR) of the citizens.
7. Every resolution of Every resolution of Parliament
Parliament approving its approving its proclamation or its
proclamation or its continuance can be passed only by
continuance must be passed a simple majority.
by a special majority.
8. Lok Sabha can pass a There is no such provision. It can
resolution for its revocation. be revoked by the President only
on his own discretion.

Local Self Government

In your day-to-day life you require such basic facilities as water supply, drainage, garbage disposal,
public health and sanitation. You may have watched such activities as installation or repairing of street
lights, construction or repairing of roads or say renovation of a village tank . Who does all this? It is
not the Central or the State government which immediately comes to your mind. It is the local
government with which you can immediately relate yourself. In this leeson you will study about local
government at various levels.
Objectives
After studying this lesson, you will be able to:
1. appreciate that the local government has an important role to play both in the rural as well as urban
areas;
2. describe the salient features of the 73rd and 74th amendments of the Constitution;
3. describe the organisation and functions of the local bodies (Urban and Rural);
4. identify the financial resources of local bodies; l explain the functions of local bodies;
5. evaluate the performance of Panchayati Raj institutions as instruments of democratic
decentralisation (grassroots democracy)
Urban Local Bodies
In our towns and cities, we have local government institutions that are called Municipalities and
Municipal Corporations. An urban area is usually a compact and densely populated area. Municipal
administration is necessary to provide basic civic facilities like water supply, drainage, garbage
disposal, public health, primary education, construction and maintenance .
Urban and Rural of roads and sanitation. As local level democratic government, the municipal
institutions Structure of Government that are elected by the local people, raise taxes and collect fees
and fines from the public. They regulate city life by laying down regulations regarding buildings, road
network and garbage disposal. There are many developmental activities undertaken by them like
women and child development, slums improvement etc. Municipal government has made possible
participative urban development and local management of civic facilities.

Function of Urban Local Bodies

It is a common practice to divide the organisation of a corporation or a municipality into two parts:
(a) the deliberative, and (b) the executive part.
1. The corporation, council or municipal board or council consisting of the elected representatives of
the people constitutes the deliberative part.
2. It acts like a legislature.
3. It discusses and debates on general municipal policies and performance, passes the budget of the
urban local body, frames broad policies relating to taxation, raising of resources, pricing of services
and other aspects of municipal administration.
4. It keeps an eye on municipal administration and holds the executive accountable for what is done
or not done. For instance, if water supply is not being properly managed, or there is an outbreak of
epidemic, the deliberative wing criticises the role of the administration and suggests measures for
improvement.
5. The executive part of municipal administration is looked after by the municipal officers and other
permanent employees.
Government of India Act 1935
The Government of India Act, 1935 was an Act adapted from the Parliament of the United Kingdom.
It originally received royal assent in August 1935. It was the longest Act of (British) Parliament ever
enacted until Greater London Authority Act 1999 surpassed it. The Government of India Act was
passed by the British Parliament in August 1935. It was the longest act enacted by the British
Parliament at that time. It was divided into two separate acts namely, the Government of India Act
1935 and the Government of Burma Act 1935.

Government of India Act 1935

Aim An Act to make further provision for the Government of India.

Territorial Extent Territories under direct British control

Enacted by Parliament of United Kingdom

Royal Assent 24th July 1935

Commenced 1st April 1937

Status Repealed on 26th January 1950 in India

The various features of the Government of India Act 1935 are given below:
• Government of India Act 1935 include abolition of the Indian Council and the introduction of
an advisory body in its place, creating of an All-India Federation abolition of Diarchy.
• The Governor was the head of the executive.
• There was a Council of Ministers to advise him. The ministers were responsible to the
provincial legislatures who controlled them. The legislature could also remove the ministers.
• A bicameral federal legislature would be established.
• The two houses were the Federal Assembly (lower house) and the Council of States (upper
house).
• The federal assembly had a term of five years.

Government of India Act, 1935 – Background

1. There was a growing demand for constitutional reforms in India by Indian leaders.
2. India’s support to Britain in the First World War also aided in British acknowledgement of the
need for the inclusion of more Indians in the administration of their own country.
3. The Act was based on:
• Simon Commission Report
• The recommendations of the Round Table Conferences
• The White Paper published by the British government in 1933 (based on the Third
Round Table Conference)
• Report of the Joint Select Committees.
Read about related terms below:

1. Simon Commission
2. First Round Table Conference

To know more about the legislation passed in British India, click on the linked article.
Creation of an All India Federation

1. This federation was to consist of British India and the princely states.
2. The provinces in British India would have to join the federation but this was not compulsory
for the princely states.
3. This federation never materialised because of the lack of support from the required number of
princely states.

Read about the integration of princely states post India’s independence in the linked article.

How Government of India Act 1935 divided powers?

1. This Act divided powers between the centre and the provinces.
2. There were three lists which gave the subjects under each government.
• Federal List (Centre)
• Provincial List (Provinces)
 • Concurrent List (Both)
3. The Viceroy was vested with residual powers.

Government of India Act, 1935 – Changes Brought by the Act

S.No Features

1. Provincial autonomy

2. Diarchy at the centre

3. Bicameral legislature

4. Federal court

5. Indian Council

6. Franchise

7. Reorganisation
Provincial autonomy

1. The Act gave more autonomy to the provinces.

2. Diarchy was abolished at the provincial levels.
3. The Governor was the head of the executive.
4. There was a Council of Ministers to advise him. The ministers were responsible to the
provincial legislatures who controlled them. The legislature could also remove the ministers.
5. However, the governors still retained special reserve powers.
6. The British authorities could still suspend a provincial government.

Diarchy at the centre

1. The subjects under the Federal List were divided into two: Reserved and Transferred.
2. The reserved subjects were controlled by the Governor-General who administered them with
the help of three counsellors appointed by him. They were not responsible to the legislature.
These subjects included defence, ecclesiastical affairs (church-related), external affairs, press,
police, taxation, justice, power resources and tribal affairs.
3. The transferred subjects were administered by the Governor-General with his Council of
Ministers (not more than 10). The Council had to act in confidence with the legislature. The
subjects in this list included local government, forests, education, health, etc.
4. However, the Governor-General had ‘special powers’ to interfere in the transferred subjects
also.

Bicameral Legislature

1. A bicameral federal legislature would be established.

2. The two houses were the Federal Assembly (lower house) and the Council of States (upper
house).
3. The federal assembly had a term of five years.
4. Both houses had representatives from the princely states also. The representatives of the
princely states were to be nominated by the rulers and not elected. The representatives of
British India were to be elected. Some were to be nominated by the Governor-General.
5. Bicameral legislatures were introduced in some provinces also like Bengal, Madras, Bombay,
Bihar, Assam and the United Provinces.
Federal Court

1. A federal court was established at Delhi for the resolution of disputes between provinces and
also between the centre and the provinces.
2. It was to have 1 Chief Justice and not more than 6 judges.

Indian Council

1. The Indian Council was abolished.

2. The Secretary of State for India would instead have a team of advisors.

Franchise

1. This Act introduced direct elections in India for the first time.

Reorganisation

1. Sindh was carved out of Bombay Presidency.

2. Bihar and Orissa were split.
3. Burma was severed off from India.
4. Aden was also separated from India and made into a Crown colony.

Other points

1. The British Parliament retained its supremacy over the Indian legislatures both provincial and
federal.
2. A Federal Railway Authority was set up to control Indian railways.
3. The act provided for the establishment of Reserve Bank of India.
4. The Act also provided for the establishment of federal, provincial and joint Public Service
Commissions.
5. The Act was a milestone in the development of a responsible constitutional government in
India.
6. The Government of India Act 1935 was replaced by the Constitution of India after
independence.
7. The Indian leaders were not enthusiastic about the Act since despite granting provincial
autonomy the governors and the viceroy had considerable ‘special powers’.
8. Separate communal electorates were a measure through which the British wanted to ensure the
Congress Party could never rule on its own. It was also a way to keep the people divided.

Indian Independence Act of 1947

The main objectives of the Indian Independence Act of 1947 are as follows:

• The partition of India and the establishment of two dominions of India and Pakistan from
August 15, 1947. The dominion of Pakistan would include Provinces of Sindh, N.W.F.P the
British Baluchistan, east Bengal, West Punjab and the states which would accede to Pakistan.
The act also provided for the Legislature of the two dominions.
• It conceded complete cessation of British control over Indian affairs from August 14, 1947.
Thereafter the powers of the British Government and Parliament over the India and Pakistan
would cease altogether.

• Both the dominions were given full right to decide whether to remain with the British
Commonwealth of Nations or to come out of it.

• Till the framing of the new constitution each of the dominions and all the provinces were to the
overfed in accordance with the government of India Act, 1935. Each dominion was authorized
to emend the government of Indian Act, 1935 under the Independence Act 1947.
• The act provides for the termination of the suzerainty of the crown over the Indian States. All
treaties, agreements, exercisable by his Majesty with regard to States and their rulers were to
lapse for 15 august, 1947. It was also provided that the existing arrangements between the
Government of Indian states were to continue pending the detailed negotiations between the
Indian states and the new dominions. The rulers of the dominion keeping in view the majority
of their population.

Background

• The Indian Independence Act, 1947 was an act of the British Parliament that partitioned India
into two independent dominions of India and Pakistan.
• The legislation was drafted by the Labour government of Clement Attlee. It was based on the
Mountbatten Plan or the 3rd June Plan which was formulated after the leaders of the Indian
National Congress and the Muslim League agreed to the recommendations of the Viceroy Lord
Mountbatten.
• Lord Mountbatten came to India with the specific task of seeing over the handing over of the
authority to Indians. But the INC and the League could not agree on the question of partition.
• An initial plan proposed by Mountbatten known as the Dickie Bird Plan was opposed by
Nehru. According to this plan, the provinces were to be declared independent and then allowed
to join or not join the Constituent Assembly. Nehru opposed this as it would, in his opinion,
would lead to the country’s balkanisation.
• Then, Mountbatten came up with the last plan known as the 3 June Plan which was accepted
by all parties. The INC, which was opposed to any partition of the country, finally accepted it
as an inevitable process.
• As per this plan, India would be partitioned into India and Pakistan. The constitution framed by
the Constituent Assembly would not be applicable to the areas which would go into Pakistan.
These provinces would then decide on a separate constituent assembly.
• The Legislative Assemblies of Punjab and Bengal voted for the partition according to which
these provinces were to be divided between the two dominions along religious lines.
• The assembly of Sind was given the choice to join the Indian Constituent Assembly or not. It
decided to join Pakistan. In the North Western Frontier Province (NWFP) and Sylhet, a
referendum was to be held which would decide the country they were to join.
• The complete legislative authority would be given to the Constituent Assemblies of the new
countries.
• The Act decided to grant independence to India and Pakistan with effect from 15th August
1947.
• The new boundaries of the dominions would be demarcated by the Boundary Commission.
• British suzerainty over the princely states was to end. These states could decide to join either
India or Pakistan or remain independent. Over 560 states decided to merge with India.
• The British emperor would cease to use the title ‘Emperor of India’.
• Until the new dominions’ constitutions would become effective, the heads of state would be
the respective Governor-Generals who would continue to assent laws passed by the
Constituent Assemblies in the name of the king.
• This Act received the royal assent on 18th July 1947 and entered into force.
• Pakistan became independent on 14th August and India on 15th August 1947. Muhammad Ali
Jinnah was appointed Pakistan’s Governor-General and Lord Mountbatten became India’s.
Unit 2

Rajya Sabha and Lok Sabha –

A Comparative Study You have seen earlier that the two Houses of Parliament differ in their
composition. From the federal point of view the Rajya Sabha represents the States in the Indian Union
while the Lok Sabha is the representative of the Indian people. This is also the reason why the method
of election differs. The members of Legislative Assemblies of the States elect the members of Rajya
Sabha while the people directly participate in the elections to the Lok Sabha. Rajya Sabha is a
permanent House while the Lok Sabha is constituted for a specified term of five years.

From the constitutional point of view, the relationship between the two Houses can best be studied
from three angles which are as follows: -
1. There are certain powers and functions in which Lok Sabha is superior to the Rajya Sabha.
Introduction and adoption of money bills and removal of a cabinet by passing no confidence motion
are two examples relevant here.

2. In certain areas Rajya Sabha has been vested with exclusive powers. It does not share these powers
with the Lok Sabha. For example, it can declare a subject in state as a matter of national importance
and facilitate a central legislation.
3. In several areas, both the Houses enjoy equal powers. The examples are adoption of bills other than
money bills, approval of proclamation of emergency, moving of adjournment and other types of
motions. Members of both houses of Parliament get Rs. 2 Crore per annum from the Members of
Parliament Local Development Fund. This fund is not directly allotted to the MP but to the respective
district headquarters and the MP can use it for development projects in his area.

The Parliament of India has two Houses– Rajya Sabha and Lok Sabha. The Rajya Sabha is also
known as Upper House, representing the States of India. The Lok Sabha is known as Lower House, it
is also called popular House because it represents the people of India.

Rajya Sabha: Membership and Election

• First point to be noted about Rajya Sabha is that it is a permanent body as it cannot
be dissolved, but one-third of its members retire every two years.
• The membership of the Rajya Sabha cannot exceed 250.There are at present 245 members in
Rajya Sabha.
 • Out of these 250, the President nominates 12 members on the basis of their excellence in
literature, science, art and social service and the rest are elected.
• Since Rajya Sabha represents States in Indian Union, its members are elected by the State
legislatures.
• Election: The elected members of the States’ Legislative Assemblies elect the Rajya Sabha
MPs on the basis of proportional representation through the single transferable vote system
according to their state quota.
• All the States do not send equal number of members to the Rajya Sabha. Their representative
number is decided on the basis of population of the respective State. Therefore, the bigger
State gets higher representation and the smaller ones have lesser representation.
• Delhi Assembly sends three members to Rajya Sabha and Puducherry sends one member. All
other Union Territories do not get representation in the Rajya Sabha.

Qualifications:

The qualifications required for becoming a member of Rajya Sabha are as follows:

1. He/she should be a citizen of India and of minimum 30 years of age.

2. He/she should take an oath or affirmation stating that he will bear true faith and allegiance to
the Constitution of India.
3. Any Indian citizen can be the Rajya Sabha elections irrespective of the State in which he
resides where elections are to be conducted through open voting system.

Tenure:

• Every member of Rajya Sabha has a tenure of six years.

• Since one-third of its members retire after every two years, the house gets new members in
every two years.This system of election ensures continuity in the working of Rajya Sabha.
• The members of Rajya Sabha are entitled to re-election. But, a member elected for a mid-term
vacancy will serve the remaining period only.

Presiding Officials of Rajya Sabha:

• The Vice-President of India is the ex-officio Chairman of the Rajya Sabha.

• He presides over the meetings of Rajya Sabha in the capacity of Chairman.
• As the Vice-President is an ex-officio Chairman and not a member of Rajya Sabha, he is
normally not entitled to vote.
• However, he can vote in case of a tie. So he has a casting vote.
• In the absence of the Chairman, the Deputy Chairman, who is elected by the members of Rajya
Sabha from amongst themselves, presides over the House.
 • Removal: The Deputy Chairman can be removed by a resolution passed by a majority of
members of Rajya Sabha. But the Chairman (Vice-President) can only be removed from his
office by a resolution passed by a majority of all the members of Rajya Sabha and , agreed to
by the Lok Sabha.
• Tie: means a situation in which there are equal vote cast in favour and against a bill or
resolution. In such a situation the presiding officer may exercise a casting vote
in favour/against to break the tie.

Rajya SabhaChairman (Vice President of India)-Muppavarapu Venkaiah Naidu since 11 August 2017
Deputy Chairman-Harivansh Narayan Singh, JD(U) since 14 September 2020
Secretary General-Desh Deepak Verma, IAS since 1 September 2017
Leader of the House-Thawar Chand Gehlot, BJP since 11 June 2019
Lok Sabha: Membership and Election

Unlike Rajya Sabha, Lok Sabha is not a permanent body. It is elected directly by the people on the
basis of universal adult franchise.
The maximum membership of Lok Sabha is 550. Of these 550 members, 530 are directly elected from
the States while 20 members are elected from the Union Territories.
Also, the President can nominate two members of the Anglo-Indian community if he feels that the
community is not adequately represented in the House.
Certain number of seats have also been reserved for Scheduled Castes and Scheduled Tribes in the
Lok Sabha which implies that only persons belonging to SC/ST can contest from the
reserved constituencies. ( It should be noted here that we have joint electorate and all the voters of the
reserved constituency vote. There is no separation of voters in terms of caste or tribe).
The representation to the Lok Sabha is based on population. Therefore UP sends 80 members whereas
smaller States like Mizoram, Nagaland send just one representative each to the Lok Sabha.
Qualifications:
1. Any Indian citizen is eligible of becoming a member of Lok Sabha if he/she fulfils the following
qualifications:
2. He/she should be not less than 25 years of age.
3. He/she should take an oath or affirmation that he holds true faith and allegiance in the
Constitution and that he will uphold the sovereignty and integrity of India.
4. He/she must be registered as a voter in any Constituency in India.
5. Person contesting from the reserved seat should belong to the Scheduled Caste
or Scheduled Tribe.
Tenure:
The normal term of Lok Sabha is five years. But the President, can dissolve it before the expiry of five
years term on the advice of Council of Ministers. Also, in the case of national emergency, the term of
Lok Sabha can be extended for one year at a time. But this should not exceed six months after
the emergency is over.
Presiding Officials of the Lok Sabha:

Speaker of 16th Lok Sabha: Sumitra Mahajan

The presiding officer of Lok Sabha is known as the Speaker. The conduct of business in Lok Sabha is
the responsibility of the Speaker.
Deputy Speaker: M Thambidurai

The members of the House elect him/her after the new Lok Sabha forms.
He/she remains in the office of the Speaker even after Lok Sabha is dissolved till the next House elects
a new Speaker in his/her place.
In the absence of the Speaker, a Deputy Speaker, who is also elected by the House presides over the
meetings.
Removal: Both the Speaker as well as the Deputy Speaker can be removed from office by a
resolution of Lok Sabha passed by a majority of the members of the House.
Some of the powers and functions of the speaker are mentioned below :
The basic function of the Speaker is to preside over the house and conduct the meetings of the House
in orderly manner. No member can speak in the House without his/her permission.
He/she may ask a member to finish his speech and in case the member does not obey he/she may order
that the speech should not be recorded.
All the Bills, reports, motions and resolutions are introduced with Speaker’s permission.
He/she puts the motion or bill to vote. He/she does not participate in the voting but when there is a tie
i.e. equal number of votes on both sides, he/she can use his casting vote.
His/her decisions in all parliamentary matters are final. He/She also rules on points of order raised by
the members and her decision is final.
He/she is the custodian of rights and privileges of the members.
He/she disqualifies a member of his/her membership in case of defection.
He/she also accepts the resignation of members and decides about the genuineness of the resignation.
In case of joint sitting of Lok Sabha and Rajya Sabha, the Speaker presides over the meeting. This
highlights superiority of Lok Sabha over the Rajya Sabha.

Lok Sabha

Speaker Om Birla, BJP since 19 June 2019

Secretary General Utpal Kumar Singh since 30 November 2020

Leader of the House Narendra Modi, BJP since 26 May 2014

Leader of the Opposition Vacant

President of India
The Indian President is the head of the state and he is also called the first citizen of India. He is a part
of Union Executive, provisions of which are dealt with Article 52-78 including articles related to
President (Article 52-62).
Who is President of India?
The Indian President is the head of the state. He is the first citizen of India and is a symbol of
solidarity, unity, and integrity of the nation. He is a part of Union Executive along with the Vice-
President, Prime Minister, Council of Ministers, and Attorney-General of India.
How is President elected?
There is no direct election for the Indian President. An electoral college elects him. The electoral
college responsible for President’s elections comprises elected members of:
1. Lok Sabha and Rajya Sabha
2. Legislative Assemblies of the states (Legislative Councils have no role)
3. Legislative Assemblies of the Union Territories of Delhi and Puducherry
Who does not take part in the President’s elections?
The following group of people is not involved in electing the President of India:
1. Nominated Members of Lok Sabha (2) and Rajya Sabha (12)
2. Nominated Members of State Legislative Assemblies
3. Members of Legislative Councils (Both elected and nominated) in bicameral legislatures
4. Nominated Members of union territories of Delhi and Puducherry
What is the term of the President’s office?
Once President is elected, he holds office for five years. He sits in the office even after the completion
of five years given no new election has taken place or no new President has been elected till then. He
can also be re-elected and there is no cap on his re-election.

What are the qualifications of the President?

A candidate has to meet some qualifications to be elected as the president. Those qualifications of the
President are:

1. He should be an Indian Citizen

2. His age should be a minimum of 35 years
3. He should qualify the conditions to be elected as a member of the Lok Sabha
4. He should not hold any office of profit under the central government, state government, or any
public authority

What are the conditions of the President’s office?

There are a few conditions for the candidate running for the President’s elections:
 1. He cannot be a member of Lok Sabha and Rajya Sabha. If he has been a member of either of
the house, he should vacate the seat on his first day as President in the office
2. He should not hold any office of profit
3. For his residence, Rashtrapati Bhavan is provided to him without the payment of rent
4. Parliament decides his emoluments, allowances and privileges
5. Parliament cannot diminish his emoluments and allowances during his term of office
6. He is given immunity from any criminal proceedings, even in respect of his personal acts
7. Arrest or imprisonment of the President cannot take place. Only civil proceedings can be
initiated for his personal acts that too after giving two months’ of prior notice.

What is the procedure for impeachment of a President?

The only condition for the initiation of impeachment of the Indian president is the ‘violation of the
constitution.’

Note: Indian Constitution contains no definition of ‘violation of the constitution.’

The impeachment process of President is given below. (We have taken Lok Sabha as the first house to
initiate the impeachment charges, however, Rajya Sabha too can initiate the impeachment charges
against President and in that case, it will pass the resolution and send the charges to Lok Sabha which
will investigate and pass it if it finds those charges valid.)

What are the powers and functions of the President of India?

Executive Powers of President

1. For every executive action that the Indian government takes, is to be taken in his name
2. He may/may not make rules to simplify the transaction of business of the central government
3. He appoints the attorney general of India and determines his remuneration
4. He appoints the following people:
1. Comptroller and Auditor General of India (CAG)
2. Chief Election Commissioner and other Election Commissioners
3. Chairman and members of the Union Public Service Commission
4. State Governors
5. Finance Commission of India chairman and members
5. He seeks administrative information from the Union government
6. He requires PM to submit, for consideration of the council of ministers, any matter on which a
decision has been taken by a minister but, which has not been considered by the council
7. He appoints National Commissions of:

1. Scheduled Castes (Read about National Commission for Scheduled Castes in the linked
article.)
2. Scheduled Tribes Read about (National Commission for Scheduled Tribes in the linked
article.)
3. Other Backward Classes (Read about National Commission for Backward Classes in
the linked article.)
8. He appoints inter-state council
9. He appoints administrators of union territories
10. He can declare any area as a scheduled area and has powers with respect to the administration
of scheduled areas and tribal areas

Legislative Powers of President

1. He summons or prorogues Parliament and dissolve the Lok Sabha

2. He summons a joint sitting of Lok Sabha and Rajya Sabha in case of deadlock
 3. He addresses the Indian Parliament at the commencement of the first session after every
general election
4. He appoints speaker, deputy speaker of Lok Sabha, and chairman/deputy chairman of Rajya
Sabha when the seats fall vacant (to know the difference between Lok Sabha and Rajya
Sabha check the linked article.)
5. He nominates 12 members of the Rajya Sabha
6. He can nominate two members to the Lok Sabha from the Anglo-Indian Community
7. He consults the Election Commission of India on questions of disqualifications of MPs.
8. He recommends/ permits the introduction of certain types of bills (to read on how a bill is
passed in the Indian Parliament, check the linked article.)
9. He promulgates ordinances
10. He lays the following reports before the Parliament:

1. Comptroller and Auditor General

2. Union Public Service Commission
3. Finance Commission, etc.

Financial Powers of President

1. To introduce the money bill, his prior recommendation is a must

2. He causes Union Budget to be laid before the Parliament
3. To make a demand for grants, his recommendation is a pre-requisite
4. Contingency Fund of India is under his control
5. He constitutes the Finance Commission every five years

Judicial Powers of President

1. Appointment of Chief Justice and Supreme Court/High Court Judges are on him
2. He takes advice from the Supreme Court, however, the advice is not binding on him
3. He has pardoning power: Under article 72, he has been conferred with power to grant pardon
against punishment for an offence against union law, punishment by a martial court, or death
sentence.

Note: Pardoning powers of the president includes the following types:

• Pardon with the grant of pardon convicts both conviction and sentence completely absolved
• Commutation with this nature of the punishment of the convict can be changed
• Remission reduces the term of the imprisonment
• Respite awards lesser punishment than original punishment by looking at the special
condition of a convict
• Reprieve stays the execution of the awarded sentence for a temporary period

Diplomatic Powers of President

1. International Treaties and agreements that are approved by the Parliament are negotiated and
concluded in his name
2. He is the representative of India in international forums and affairs

Military Powers of President

He is the commander of the defence forces of India. He appoints:

1. Chief of the Army

2. Chief of the Navy
 3. Chief of the Air Force

Emergency Powers of President

He deals with three types of emergencies given in the Indian Constitution:

1. National Emergency (Article 352)

2. President’s Rule (Article 356 & 365)
3. Financial Emergency (Article 360)

What is the Ordinance Making Power of the President?

Article 123 deals with the ordinance making power of the President. The President has many
legislative powers and this power is one of them. He promulgates an ordinance on the
recommendation of the union cabinet.

What is the Veto Power of the President?

When a bill is introduced in the Parliament, Parliament can pass the bill and before the bill becomes an
act, it has to be presented to the Indian President for his approval. It is on the President of India to
either reject the bill, return the bill or withhold his assent to the bill. The choice of the President over
the bill is called his veto power. The Veto Power of the President of India is guided by Article 111 of
the Indian Constitution.
Prime Minster

He is the head of government or the real executive in the Indian system. President appoints the prime
minister however no system of appointment is given in the constitution. However by convention of a
parliamentary democracy the leader of the largest party of parliament becomes the PM.
The president can exercise discretion when no party has clear majority. He appoints a person and asks
him to prove his majority in the house. If the PM dies and no successor is in sight then again the
president can appoint a suitable person at his discretion as caretaker for continuity. However if the
winning party has a candidate then the president has no choice.
To be a PM a person need not be an MP but he has to become one within 6 months of being appointed
or else his appointment become void.

Powers of the PM:

1. As head of the council of ministers he recommends people to be appointed as ministers to the

president.
2. He allocates and reshuffles portfolios amongst them. He can ask the minister to resign or tell the
president to dismiss him.
3. He supervises activities of all ministers. His resignation or death leads to dissolution of the council
of ministers.
4. He communicates to the president all matters related to administration of the union and proposed
legislation's.
5. He furnishes information required by the president relating to administration of the union or
proposed legislation's.
6. He submits to the consideration of the council of ministers any matter on which decision has been
taken by an individual minister but the Council of Ministers hasn’t considered it.
7. He is the leader of the lower house. He can advice president to summon or prorogue the house
sessions. He can advice dissolution of Lok Sabha to the president anytime. He announces government
policies on the floor of the house.
8. He is advisor of president regarding appointments to various regulators and constitutional bodies of
the union.
9. He heads the national development council, national integration council, interstate council, Niti
Aayog, national water resource council.

Governor
The state executive is made up of the Governor, Chief Minister, Council of Ministers, and Advocate-
General of State. Governor, as President, heads the state government. Article 153-167 in the Indian
Constitution deal with the provisions related to the state governments of the country.
Governor is a titular head or constitutional head and at the same time, he is the agent of the centre as
the union government nominates Governor in each state.

Governor is a nominal executive head of the state. He forms an important part of the state executive
where he acts as the chief executive head. Central Government nominates the governor for each state.

How is a Governor Appointed?

The Indian President appoints Governor for each state by warrant under his hand and seal. Central
Government is responsible to nominate the governor for each state.

Note:

• Unlike elections of President, there is no direct or indirect election for the post of Governor.
• The office of a governor is not a part of the union executive and is an independent
constitutional office. The governor doesn’t serve the union government and neither is
subordinate to it.
• The nomination of a governor by the Union and his appointment by the President in India is
based on the Canadian model of government.

What is the term of the Governor’s office?

Since the Governor holds the office under the pleasure of the President, his office has no fixed term.
President can remove the Governor and the grounds upon which he may be removed are not laid down
in the constitution.

Governor may also get transferred from one state to another by the President. He also can be
reappointed.

Note:

• An interregnum is not allowed; following which a Governor may sit in the office beyond 5
years (expiry of the term) till the new governor assumes the charge of the office.
• On President’s discretion, the Chief Justice of the High Court of the concerned state can also
be appointed as the Governor on a temporary basis when and how the President thinks fit.
(Example – On the governor’s death, Chief Justice of HC can be appointed as the governor.)
Who is qualified to become a Governor?

Unlike Lok Sabha or Rajya Sabha members or even in the case of Prime Minister or President who
have a set of qualifications to meet to hold the office; Governor has to meet only two qualifications:

1. He should be an Indian Citizen

2. He should be 35 years old or more

Note: There are two conventions that the government follows before nominating a person as a
Governor:

1. That person is not appointed as the governor who belongs to the state. He shall be an outsider
having no relation with the state he is being appointed to.
2. Consultation of the Chief Minister is taken by the President before appointing a governor

It should also be noted that both the above conventions are not absolute and have been ignored by the
union government in many instances.

What are the conditions of his office?

There are a few conditions for a person to be appointed as a Governor:

1. He cannot be a member of Lok Sabha and Rajya Sabha. If he has been a member of either of
the house, he should vacate the seat on his first day as Governor in the office.
2. He should not hold any office of profit.
3. For his residence, Raj Bhavan is provided to him without the payment of rent.
4. Parliament decides his emoluments, allowances, and privileges.
5. When a governor is responsible for two or more states, the emoluments and allowances
payable to him are shared by the states in such proportion as the President may determine.
6. Parliament cannot diminish his emoluments and allowances during his term of office.
7. He is given immunity from any criminal proceedings, even in respect of his personal acts
8. Arrest or imprisonment of the Governor cannot take place. Only civil proceedings can be
initiated for his personal acts that too after giving two months’ of prior notice.

What are the powers and functions of the Governor?

Executive Powers of the Governor

The following comes under his executive powers:

1. Every executive action that the state government takes, is to be taken in his name.
2. How an order that has been taken up his name is to be authenticated, the rules for the same can
be specified by the Governor.
3. He may/may not make rules to simplify the transaction of the business of the state government.
4. Chief Ministers and other ministers of the states are appointed by him.
5. It is his responsibility to appoint Tribal Welfare Minister in the states of:

1. Chattisgarh
2. Jharkhand
3. Madhya Pradesh
4. Odisha
6. He appoints the advocate general of states and determines their remuneration
7. He appoints the following people:

1. State Election Commissioner

2. Chairman and Members of the State Public Service Commission
 3. Vice-Chancellors of the universities in the state
8. He seeks information from the state government
9. A constitutional emergency in the state is recommended to the President by him.
10. The governor enjoys extensive executive powers as an agent of the President during
the President’s rule in the state.

Legislative Powers of the Governor

The following are the legislative powers of the governor:

1. It’s in his power to prorogue the state legislature and dissolve the state legislative assemblies
2. He addresses the state legislature at the first session of every year
3. If any bill is pending in the state legislature, Governor may/may not send a bill to the state
legislature concerning the same
4. If the speaker of the legislative assembly is absent and the same is Deputy Speaker, then
Governor appoints a person to preside over the session
5. As President nominates 12 members in Rajya Sabha, Governor appoints ⅙ of the total
members of the legislative council from the fields of:

1. Literature
2. Science
3. Art
4. Cooperative Movement
5. Social Service
6. As President nominates 2 members in the Lok Sabha, Governor nominates 1 member in state
legislative assembly from Anglo-Indian Community.
7. He can consult Election Commission for the disqualification of members
8. With respect to the bill introduced in the state legislature, he can:

1. Give his assent

2. Withhold his assent
3. Return the bill
4. Reserve the bill for the President’s consideration (In instances where the bill introduced
in the state legislature endangers the position of state High Court.)

Financial Powers of the Governor

The following are the financial powers and functions of the Governor:

1. He looks over the state budget being laid in the state legislature
2. His recommendation is a prerequisite for the introduction of money bill in the state legislature
3. He recommends for the demand for grants which otherwise cannot be given
4. Contingency Fund of State is under him and he makes advances out that to meet unforeseen
expenditure. (Download the notes on the types of funds in India from the linked article.)
5. State Finance Commission is constituted every five years by him. (Read about the Finance
Commission of India in the linked article.)

Judicial Powers of the Governor

The following are the judicial powers and functions of the Governor:

1. He has the following pardoning powers against punishment:

1. Pardon
2. Reprieve
 3. Respite
4. Remit
5. Commute
2. President consults the Governor while appointing judges of High Court.
3. In consultation with the state High Court, Governor makes appointments, postings, and
promotions of the district judges.
4. In consultation with the state high court and state public service commission, he also appoints
persons to the judicial services.

Appointment of Chief Minister

Our constitution does not specifically mention about the qualification to be appointed as Chief
Minister (CM). Article 164 of the Constitution envisages that the Chief Minister shall be appointed by
the governor. However, this does not imply that the governor is free to appoint anyone as the Chief
Minister of the state or UT.
Powers and functions of the Chief Minister
The powers and functions of CM can be classified under following heads:
With respect to council of ministers –
The following are the powers of CM with respect to state council of ministers –
1). He advises the Governor to appoint any person as a minister. It is only according to the advice of
CM the Governor appoints ministers.
2). Allocation and reshuffling of portfolios among ministers.
3). In case of difference of opinion; he can ask minister to resign.

4). Directs, guides and controls activities of all the ministers.

5). If the Chief Minister resign then full cabinet has to resign.

With Respect to Governor -

Under Article 167 of our constitution: The Chief Minister acts as a link between Governor and state
council of ministers. The functions with respect to the Governor are as follows:

1). CM has to communicate to the Governor all the decisions of the council of ministers relating to the
administration of the states.

2). Whenever the Governor calls for any information relating to the decisions taken or regarding the
administration, the CM has to provide him the same

3). The Governor can ask for consideration of council of ministers when a decision has been taken
without the consideration of the cabinet.
With Respect to State Legislature –

1) All the policies are announced by him on the floor of the house.

2) He recommends dissolution of legislative assembly to the Governor.

3) He advises the Governor regarding summoning, proroguing the sessions of State Legislative
Assembly from time to time.

• Other Functions

1) At the ground level he is the authority to be in contact with the people regularly and know about
their problems so as to bring about policies on the floor of the assembly.

2) He acts as the chairman of State Planning Commission.

Differences between Indian Government and U.S. Government

India is the largest democracy in the world, whereas the United States of America is the oldest
democracy. Although both countries are democratic republics, there are some differences in the way
both governments function.

Differences between the Governments of India and the USA

The differences between both the governments are given under separate headings.

Political Parties

India USA

Although there are currently 2 major national parties – the There are two major political parties here.
INC and the BJP; there are hundreds of regional and They are the Republican Party and the
smaller parties in the political scene. Democratic Party.

Head of State

India USA

• Elected head of Government is the Prime • Head of State is the President.

Minister. He is the executive head. • Citizens cast their ballot in every state
• The President is the constitutional head of to elect members of the electoral college
state. (popular vote) who in turn cast electoral
• Citizens cast their vote to elect their votes to determine the President.
 representatives to the Lok Sabha. The party • The President holds office for a four-
that wins a majority of seats in the Lok year term.
Sabha gets invited by the President to form
the government.
• The leader of that party becomes the Prime
Minister.
• Elections to the Lok Sabha are held every five
years generally.

Government

Cabinet

India USA

• The Prime Minister appoints members of his • President nominates cabinet

cabinet from his party or from those supporting members and sends them to the
his coalition (if it’s a coalition government). Senate for confirmation.
• The cabinet members need not be
Congress members, they could just
be industry experts.

Legislative Body

India USA

• The government can lose the mandate if its • The President is not dependent on the
majority cannot be proved in the Lok Sabha in strength of his party in Congress
the event of a no-confidence motion. (legislative body).
• This would lead to mid-term elections. • He remains in power for the four
• Parliamentary form of government. years of his term unless he is
impeached or incapacitated.
• Presidential form of government.

India USA

• The Parliament is the supreme • Congress is the legislature of the USA.

legislative body. • The Senate and the House of Representatives
• It is a bicameral legislature comprising are the two chambers of the Congress
of the President, the Lok Sabha and • The House of Representatives (commonly
the Rajya Sabha. referred to as the House) is the Lower House
• Lok Sabha (House of the People)
 members are elected directly by the while the Senate is the Upper House.
people. There are 545 members.
• Rajya Sabha (Council of States)
members are elected by the State
legislative assemblies. Its total
membership is 245.

Legislation authority

India USA

• There is no strict separation of powers. • Here, there is a clear separation of powers

• The executive is part of the elected between the executive, the legislature and
legislature and remains in power while the the judiciary.
House is in motion. • A law passed by the Congress can be
• The Prime Minister cannot override the vetoed by the President.
legislature to make laws. • He can send it back for consideration, or he
• A bill becomes a law only when both can also bypass the Congress and issue an
Houses pass it and it is signed by the executive order (which has the force of
President. law).
• The president can send any bill back to the • However, Congress can override the veto
parliament for consideration if he deems by obtaining a 2/3rd majority in both
fit. But if it’s passed again, he should sign Houses.
it.
• Supreme Court can strike down any law
that it considers unconstitutional.

India USA

• India can be said to be a case of • It has a federal system with each state
cooperative federalism. having its own constitution.
• There is only one constitution for the whole • Here, power is shared between the
country. federal government and state
• India is neither purely federal nor purely governments.
unitary.
• It is a federal structure with a strong unitary
bias.
• India is a union of states meaning states have
no authority to recede from India.

Federalism

Indian Judiciary
Indian administration is guided by three pillars – Legislature, Executives, and Judiciary. Indian
Judiciary. In India, we have an independent judiciary. The other organs of the government cannot
interfere with the functioning of the judiciary.

Introduction to Indian Judiciary

The judiciary is that branch of the government that interprets the law, settles disputes and administers
justice to all citizens. The judiciary is considered the watchdog of democracy, and also the guardian of
the Constitution. For democracy to function effectively, it is imperative to have an impartial and
independent judiciary.

Independent Indian Judiciary

• It means that the other branches of the government, namely, the executive and the legislature,
does not interfere with the judiciary’s functioning.
• The judiciary’s decision is respected and not interfered with by the other organs.
• It also means that judges can perform their duties without fear or favour.

Independence of the judiciary also does not mean that the judiciary functions arbitrarily and without
any accountability. It is accountable to the Constitution of the country.

Indian Judiciary – Structure

India has a single integrated judicial system. The judiciary in India has a pyramidal structure with the
Supreme Court (SC) at the top. High Courts are below the SC, and below them are the district and
subordinate courts. The lower courts function under the direct superintendence of the higher courts.
The diagram below gives the structure and organisation of the judicial system in the country.
The Indian judiciary is divided into several levels in order to decentralize and address matters at the
grassroots levels. The basic structure is as follows:

1. Supreme Court: It is the Apex court of the country and was constituted on 28th January 1950. It is
the highest court of appeal and enjoys both original suits and appeals of High Court judgments. The
Supreme Court is comprised of the Chief Justice of India and 25 other judges. Articles 124-147 of the
Constitution of India lay down the authority of the Supreme Court.
2. High Courts: High Courts are the highest judicial body at the State level. Article 214 lays down the
authority of High Courts. There are 25 High Courts in India. High Courts exercise civil or criminal
jurisdiction only if the subordinate courts in the State are not competent to try the matters. High Courts
may even take appeals from lower courts. High Court judges are appointed by the President of India
upon consultation with the Chief Justice of India, the Chief Justice of the High Court and the
Governor of the State.
3. District Courts: District Courts are established by the State Governments of India for every district
or group of districts based on the caseload and population density. District Courts are under the direct
administration of High Courts and are bound by High Court judgments. Every district generally has
two kinds of courts:

a. Civil Courts

A person can also ask a judge for compensation for damage suffered because of someone else’s fault.
This type of case is called a “civil responsibility” case. For example, if someone sues a plumber for
poor repair work that caused a flood in her kitchen, the judge can order the plumber to pay money to
compensate her for the water damage.

b. Criminal Courts

The reason these cases come to court is always the same: a person is taken to court because she is
accused of a crime. The judge, and sometimes a jury, must consider the evidence presented during a
trial to decide whether the accused is guilty or innocent.

Most crimes and their punishments are described in the Criminal Code of Canada. Some crimes
involve other people, including

• assault
• murder

District Courts are presided over by District Judges. Additional District Judges and Assistant District
Judges may be appointed based on the caseload. Appeals against District Court judgments lie in the
High Court.

4.Lok Adalats/Village Courts: these are subordinate courts at the village level which provide a
system for alternate dispute resolution in villages.

5.Tribunals: the Constitution provides the government with the power to set up special Tribunals for
the administration of specific matters such as tax cases, land cases, consumer cases etc.

Appellate jurisdiction refers to the authority of a court to rehear/review a case decided by a lower
court. In India, appellate jurisdiction is vested in both the Supreme Court and High Courts. They may
either overrule or uphold the judgments of lower courts.
The Civil Court hierarchy in districts is as follows:
1. District Court: The court of district judges is the highest civil court in a district. It exercises both
judicial and administrative functions. The District Judge combines the powers of trying both civil and
criminal cases. Hence, they are designated the District and Sessions Judge.
2. Sub-judge Court: if the value of the subject-matter of the suit is worth more than Rs. 1 lakh, the
Sub-judge and Additional Sub-judge courts may try the suit.
3. Additional Sub-judge Court: this is created based on the case-load.
4. Munsif Court: if the value of the subject-matter of the suit is worth Rs. 1 lakh or below, the Munsif
court is competent to try the suit.
Criminal Courts
The power of the various criminal courts is mentioned under the Code of Criminal Procedure (CrPC).
According to Section 26 of the CrPC, any offence mentioned under the Indian Penal Code may be
tried by:
High Courts
Courts of Session
Any other Court as specified in the First Schedule of the Code of Criminal Procedure

Judicial Authority of the Supreme Court

Articles 141 and 144 of the Constitution uphold the authority and jurisdiction given to the Supreme
Court to make decisions and uphold the law of the land.
Article 141
Article 141 lays down that “the law declared by the Supreme Court shall be binding on all courts
within the territory of India.”
This Article embodies the English principle of stare decisis which holds that law must be definite,
fixed, known and consistent. Since the Supreme Court is the Apex court of the country and all courts
and tribunals are bound by its decisions, Supreme Court judgments become a source of law in
themselves.
Article 144
Article 144 lays down that “all authorities, civil and judicial, in the territory of India shall act in aid of
the Supreme Court.”
The Supreme Court has the power to hold any authority in contempt if they disregard or disobey the
order of the court.

Public Interest Litigation (PIL)

Public Interest Litigation (PIL) is an effective tool to advance social justice in India. Borrowed from
the American tradition of Social Action Litigation, PILs have been widely used in India to advance the
causes of disadvantaged and marginalized communities. The general rule to bring a cause of action in
court is the rule of locus standi i.e. the party must possess sufficient connection or suffer particular
harm in order to be a party to the case. In PILs, this rule is relaxed considerably as any citizen of India
may bring an action in court to reduce a wrong if there has been a breach of Fundamental Rights. PILs
are an effective tool in the furtherance of animal protection by allowing animal rights groups and
activists to file PILs at the Supreme Court and give a voice to the voiceless.
Indian Cabinet: Powers, Functions and Role of Indian Cabinet!
Cabinet is the supreme directing authority, the magnet of policy, which co-ordinates and controls the
whole of the executive government of the Union and integrates and guides the work of Parliament.

Functions of the Cabinet of India:

The important functions of the Cabinet of India are:

(a) Supreme Control of the Executive:

According to the Constitution, the Executive authority is exercisable by the President either directly or
indirectly through his subordinates. But in a Parliamentary form of government, the Head of the State
is to be a nominal head. Hence, the real functionaries are the ministers.

(b) Formulation of Policy:

All sorts of national and international problems confronting the country are tackled by the Cabinet. In
accordance with the principle of collective responsibility, the Cabinet is to present to the Parliament
and to the world a unified policy of action. If an individual minister fails to agree with the decision of
the Cabinet, the only alternative before him is to resign or in the alternative he is made to resign.

(c) Legislative Functions:

In fact, the Cabinet is the hyphen that joins and the buckle that binds the legislature with the executive.
The Cabinet directs parliament for action and, so long as it commands a majority in the Parliament, it
gets the approval of its policy. The Cabinet not only prepares the legislative programme but also
introduces and pilots through the House the legislative measures. The bills introduced by members
other than the ministers have little or no chance to be passed. It is, therefore, generally held by
political thinkers, that the Cabinet legislates with the advice and consent of the Parliament.

(d) Financial Powers:

The Cabinet possesses important financial powers as well. It prepares the budget. It determines what
taxes are to be imposed and how the revenues are to be expended. The money bills are to be
introduced by the Finance Minister. The Cabinet can insist on modification of budget even after its
presentation to the Parliament.

(e) Control over Appointments:

All major appointments, like that of ambassadors, high commissioners, Attorney- General, Auditor
General and Governors of State are made by the President with the approval of the Cabinet. In fact, the
appointments of important functionaries are always made by the Cabinet, though in the name of the
president.

(f) Controls the Foreign Policy:

The Cabinet formulates the foreign policy of the Union and determines India’s relations with the
foreign countries. Since the commencement of our constitution, the Foreign Affairs Department
remained with Prime Minister Nehru himself. A.B. Vajpayee (P.M)., also held the External Affairs
portfolio for some time. Jaswant Singh and later S.N. Sinha held the portfolio.

(f) Cabinet as Coordinator:

Since dividing of the departments in rigid compartments is neither possible nor desirable, the Cabinet
plays a vital role of coordinating the activities of various departments. If, at any stage, the differences
between the departments are irreconcilable, the Prime Minister acts as an arbitrator and coordinator.
(h) Miscellaneous Functions:

These are those functions which the Indian Cabinet alone performs. Under the authority of the
President, the Cabinet is empowered to make laws, during the recess of legislature; it can suspend
fundamental liberties by advising President to proclaim emergency and alter the boundaries of the
States. All such powers are subject to the approval of the Parliament.

Composition of The State Legislature

In most of the States, the Legislature consists of the Governor and the Legislative Assembly (Vidhan
Sabha). This means that these State have unicameral Legislature. In a few States, there are two Houses
of the Legislature namely, Legislative Assembly (Vidhan Sabha) and Legislative council (Vidhan
Parishad) besides the Governor.Where there are two Houses, the Legislature, is known as bicameral.
Five States have the bicameral, legislature. The Lagislative Assembly is known as lower House or
popular House. The Legislative Council is known as upper House. Just as Lok Sabha has been made
powerful at the Union level, the Legislative Assembly has been made a powerful body in the States.
Each state has a legislative assembly. A state legislature that has one house - State Legislative
Assembly (Vidhan Sabha) - is a unicameral legislature.
A state legislature that has two houses - the State Legislative assembly and State Legislative
Council (Vidhan Parishad) - is a bicameral legislature. The Vidhan Sabha is the lower house and
corresponds to the Lok Sabha while the Vidhan Parishad is the upper house and corresponds to
the Rajya Sabha of the Parliament of India.

Powers and functions of the State Legislature

The State Legislature has to fulfill some functions and is granted with several powers that can be
exercised, Some of them are listed below –

1. A Bill that is passed by the Legislative Assembly and refused by the Council, then the
Assembly has the right to reconsider it.
2. A bill approved by the Assembly and sent to the Council for the first time can be retained for
three months, but when it is sent for the second time and is kept in the Council only for a month,
the bill shall be deemed as passed.
3. The Legislative Assembly holds superiority over the Legislative Council.
4. The State Assembly holds similar powers as that of the Lok Sabha in the case of Money Bills.
5. Legislative assembly members hold the right to question the ministers, move motions and
resolutions, and also pass a vote of censure to drop the state government.
6. The government ministry is accountable to the Legislative Assembly.
7. The Legislative Assembly elects its speaker and deputy speaker.
8. The assembly participates in the election of the President.
What are Lokpal and Lokayukta?

The Lokpal and Lokayuktas Act, 2013, commonly known as The Lokpal Act, is an anti-
corruption Act of Indian Parliament in India which "seeks to provide for the establishment of the
institution of Lokpal to inquire into allegations of corruption against certain important public
functionaries including the Prime Minister, cabinet ministers, members of parliament, Group A
officials of the Central Government and for matters connecting them".

▪ The Lokpal and Lokayukta Act, 2013 provided for the establishment of Lokpal for the Union
and Lokayukta for States.
▪ These institutions are statutory bodies without any constitutional status.
▪ They perform the function of an "ombudsman” and inquire into allegations of corruption
against certain public functionaries and for related matters.

Why do we need such institutions?

▪ Maladministration is like a termite which slowly erodes the foundation of a nation and hinders
administration from completing its task. Corruption is the root cause of this problem.
▪ Most of the anti-corruption agencies are hardly independent. Even Supreme Court has been
termed CBI as a “caged parrot” and “its master’s voice”.
▪ Many of these agencies are advisory bodies without any effective powers and their advice is
rarely followed.
▪ There is also the problem of internal transparency and accountability. Moreover, there is not
any separate and effective mechanism to put checks on these agencies.
▪ In this context, an independent institution of Lokpal has been a landmark move in the history
of Indian polity which offered a solution to the never-ending menace of corruption.

UNIT 3
Functions of Indian Judiciary – What is the role of the Judiciary?

1. Administration of justice: The chief function of the judiciary is to apply the law to specific
cases or in settling disputes. When a dispute is brought before the courts it ‘determines the
facts’ involved through evidence presented by the contestants. The law then proceeds to decide
what law is applicable to the case and applies it. If someone is found guilty of violating the law
in the course of the trial, the court will impose a penalty on the guilty person.
2. Creation of judge-case law: In many cases, the judges are not able to, or find it difficult to
select the appropriate law for application. In such cases, the judges decide what the appropriate
law is on the basis of their wisdom and common sense. In doing so, judges have built up a
great body of ‘judge-made law’ or ‘case law.’ As per the doctrine of ‘stare decisis’, the
previous decisions of judges are generally regarded as binding on later judges in similar cases.
3. Guardian of the Constitution: The highest court in India, the SC, acts as the guardian of the
Constitution. The conflicts of jurisdiction between the central government and the state
 governments or between the legislature and the executive are decided by the court. Any law or
executive order which violates any provision of the constitution is declared unconstitutional or
null and void by the judiciary. This is called ‘judicial review.’ Judicial review has the merit of
guaranteeing the fundamental rights of individuals and ensuring a balance between the union
and the units in a federal state.
4. Protector of Fundamental Rights: The judiciary ensures that people’s rights are not trampled
upon by the State or any other agency. The superior courts enforce Fundamental Rights by
issuing writs.
5. Supervisory functions: The higher courts also perform the function of supervising the
subordinate courts in India.
6. Advisory functions: The SC in India performs an advisory function as well. It can give its
advisory opinions on constitutional questions. This is done in the absence of disputes and when
the executive so desires.
7. Administrative functions: Some functions of the courts are non-judicial or administrative in
nature. The courts may grant certain licenses, administer the estates (property) of deceased
persons and appoint receivers. They register marriages, appoint guardians of minor children
and lunatics.
8. Special role in a federation: In a federal system like India’s, the judiciary also performs the
important task of settling disputes between the centre and states. It also acts as an arbiter of
disputes between states.
9. Conducting judicial enquiries: Judges normally are called to head commissions that enquire
into cases of errors or omissions on the part of public servants.

Indian Judiciary – Structure

India has a single integrated judicial system. The judiciary in India has a pyramidal structure with the
Supreme Court (SC) at the top. High Courts are below the SC, and below them are the district and
subordinate courts. The lower courts function under the direct superintendence of the higher courts.

The diagram below gives the structure and organisation of the judicial system in the country.
Supreme Court
History:

• The Federal Court of India was created as per the Government of India Act 1935.

• This court settled disputes between provinces and federal states and heard appeals against
judgements of the high courts.
• After independence, the Federal Court and the Judicial Committee of the Privy Council were
replaced by the Supreme Court of India, which came into being in January 1950.
• The Constitution of 1950 envisaged a Supreme Court with one Chief Justice and 7 puisne
Judges.
• The number of SC judges was increased by the Parliament and currently, there are 34 judges
including the Chief Justice of India (CJI).

Supreme Court of India – Functions

• It takes up appeals against the verdicts of the High Courts, other courts and tribunals.
 • It settles disputes between various government authorities, between state governments, and
between the centre and any state government.
• It also hears matters which the President refers to it, in its advisory role.
• The SC can also take up cases suo moto (on its own).
• The law that SC declares is binding on all the courts in India and on the Union as well as the
state

Supreme Court Composition

• Including the CJI, there are 34 judges in the Supreme Court.

• The judges sit in benches of 2 or 3 (called a Division Bench) or in benches of 5 or more (called
a Constitutional Bench) when there are matters of fundamental questions of the law is to be
decided.

• CJI stands for Chief justice of India.

SC Judge Eligibility

As per Article 124, an Indian citizen who is below 65 years of age is eligible to be recommended for
appointment as a judge of the SC if:

1. he/she has been a judge of one or more High Courts, for at least 5 years, or
2. he/she has been an advocate in one or more High Courts for at least 10 years, or
3. he/she is in the opinion of the President, a distinguished jurist.
 Differences between the High Court and the Supreme Court

High Court Supreme Court

The High Court is the apex judiciary The Supreme Court is the primary court of justice in the country
body of a State’s administration. It is and it is headed by the Chief Justice of India
headed by the Chief Justice of the State
The Judges of the High Court are According to the Constitution of India, every Judge of the
appointed by the President in Supreme Court shall be appointed by the President by warrant
consultation with the Chief Justice of under his/her hand and seal after consultation with such of the
India and the Governor of the state in Judges of the Supreme Court and of the High Court in the States.
question
Judges of the High Court retire at the age A Supreme Court judge retires at the age of 65
of 62 years
The High Court has authority over all the The Supreme Court has jurisdiction over all the courts and
other courts under its jurisdiction, which tribunals of the country
in turn is limited by the boundary of the
concerned state
The High Court is headed by the Chief The Supreme Court is headed by the Chief Justice of India
Justice of the State
Every High Court there is a Chief Justice At Present, the Supreme Court of India consists of 31 judges (
and many other judges. The number of Including the Chief Justice and 30 other judges). The Supreme
judges appointed is defined by the Court (Number of Judges) has made provisions where four more
President of India judges can be appointed. It increased the strength from 31 to 34
including the Chief Justice of India

Civil Law Criminal Law

Civil Law is a general law which solves disputes Criminal Law deals with offences that are
between 2 organisations or individuals. As per Civil committed against the society. It mets out varying
Law the wrongdoer will have to compensate the degrees of punishment commensurate with the
affected organisation or individual. Civil Law deals crime committed. Criminal Law will deal with
with Property, Money, Housing, Divorce, custody of a serious crimes such as murder, rapes, arson,
child in the event of divorce etc. robbery, assault etc.
Civil Law is initiated by the aggrieved individual or The Government files the petition in case of
organisation or also known as ‘plaintiff.’ criminal law.
In case of Civil Law, to start a case, the aggrieved party As per Criminal Law, to start a case, a petition
needs to file a case in the Court or Tribunal cannot be filed directly in a court, rather the
complaint should be first registered with the police,
and the crime needs to be investigated by the
Police. Thereafter a case can be filed in the court.
The objective of Civil Law is to protect the rights of an The purpose of Criminal Law is to punish the
individual or organisation and make sure that he or the wrongdoers and protect society, maintain law and
concerned organisation receives the compensation for order.
the wrongs that they have suffered.
In Civil Law, the wrongdoer gets sued by the In Criminal Law, the accused person will be
complainant or the aggrieved party. prosecuted in the court of law.
In the case of Civil Law, there is no punishment like In the case of Criminal Law, punishment is meted
Criminal Law, but the aggrieved party receives the out as per the seriousness of the criminal offence
compensation and the dispute gets settled. committed or a fine could be imposed.
In the case of Civil Law, the power of the court is to In the case of Criminal Law, the powers of the court
pass judgement or injunction to compensate for are charging a fine, imprisonment to the guilty of a
damages caused to the aggrieved party. crime, or discharge of the defendant.
In Civil Law cases, the defendant is considered to be In Criminal Law parlance, the defendant is
either liable or not liable. considered either guilty or not guilty by the court.
The importance of the court of law in our legal system are as follows:

• Judicial Review – As the final interpreter of the Constitution, the judiciary also has the power
to strike down particular laws passed by the Parliament if it believes that these are a violation
of the basic structure of the Constitution which is called judicial review.
• Upholding the Law and Enforcing Fundamental Rights – Every citizen of India has the
right to approach the Supreme Court or the High Court if they believe that their Fundamental
Rights have been violated.

• Dispute Resolution – The judicial system provides the mechanism for resolving disputes
between citizens, between citizens and the government, between two state governments and
between the centre and state governments.

• The dispenser of Justice.

• Protector of the rights of the people.

• Guardian protector of the Constitution of the State.

• Arbiter of center-state disputes.

• Safeguard against Legislative and executive excesses.

• Check against arbitrary exercise of powers by the power-holders.

• Guardian of Rule of Law and Justice.

Arbitration

Arbitration is the mechanism to settle disputes between parties to a contract, determined in a quasi-
judicial manner.

The various functions of arbitration Council are given below:

• Framing policies for grading arbitral institutions and accrediting arbitrators.

• Making policies for the establishment, operation and maintenance of uniform professional
standards for all alternate dispute redressal matters.
• To ensure that rules are laid down for international as well as domestic arbitration and
conciliation.
• To ensure that arbitration proceedings are just, fair and effective.
• To ensure that the arbitral tribunal gives reasons for its award given.
Tort
Tort, in common law, civil law, and the vast majority of legal systems that derive from them, any
instance of harmful behaviour, such as physical attack on one’s person or interference with one’s
possessions or with the use and enjoyment of one’s land, economic interests (under certain
conditions), honour, reputation, and privacy.
The Four Elements:

• Torts are made up of four elements. In order to win a personal injury case, all four of these
elements must be in place:

• The presence of a duty. We all have a duty to take steps to prevent injury from occurring to
other people.
• The breach of a duty. The defendant must have failed to live up to his duty to prevent injury
from occurring to you.
• An injury. You were injured.
• The injury resulted from the breach. The defendant’s actions led to your injury.

Role of arbitrator

An arbitrator plays the role of a neutral person, who makes decisions on a dispute based on evidence
presented by the parties. The decision the arbitrator makes is not always legally binding, but if it is,
individuals and/or businesses are not able to go to court later if they do not agree with the outcome.

Characteristics of Arbitration

1. Arbitrator: An arbitrator has a position equal to a court judge who is chosen by the parties
themselves. He/She is the one who is unbiased and takes final and binding decision on the
dispute after hearing both the parties and considering all the facts. It is also known as an
arbitral tribunal.
2. Arbitration Agreement: Arbitration is not possible without the free consent of the parties
concerned. Hence there must be an agreement in writing between the employer and employee
which is to be contained in a document called as an arbitration agreement. The document states
that the parties want to resolve their dispute, through the arbitration process.

The arbitration agreement can be terminated by the mutual consent of the parties, death of any
party to the arbitration or even when the principal contract between the parties is terminated

3. Arbitral Award: The decision taken by the arbitrator or arbitral tribunal on the dispute is
known as an arbitral award.
4. Confidentiality: Confidentiality is a significant characteristic of arbitration. Absolute privacy
is maintained in the process, i.e. apart from the parties and arbitrator, no one has any idea of
 the happenings in the process. Furthermore, the sharing of any information or document with
any third party is completely prohibited.

The decision, i.e. arbitral award is final in nature, and no appeal can be made against it, except in case
of parties incapacity, unfair procedure, invalid arbitration agreement and biases of the arbitrator.

Process of Arbitration
In general, it is the labour union, who initiates the arbitration process and then communicates the same
to the company’s management. After that, the company and union jointly select an arbitrator for the
process. Once the arbitrator gives his assent, then the time and venue for the arbitration are to be
ascertained, and the process begins.

The issue under consideration is presented before the arbitrator or the panel of arbitrators as the case
may be, in a document. Both the sides present their argument at the time of the hearing. The hearing is
the same as the court-proceeding which includes witnesses, legal counsel, evidence and cross-
examination.

After completion of the hearing, the arbitrator analyses all the relevant information and documents
submitted and decides in 30-60 days and also give reasons for the decision in a written document.
Limitations of Arbitration

• It is an expensive process. The parties involved must share the cost involved in the process.
• If a wrong arbitrator is chosen for the process, then the judgement can be random.
• For better industrial relations, too much arbitration should be avoided.

Arbitration is a private legal mechanism for adjudicating disputes, which is arranged by the parties
concerned, and the decision rendered by the neutral third person is final and acceptable to both the
parties. Further, it is an immediate process, wherein the delays are reduced and settlement is
expedited.
Employment Contract
What Is an Employment Contract?
An employment contract is an agreement that covers the working relationship of a company and an
employee.1 It allows both parties to clearly understand their obligations and the terms of employment.

Employment contract can include:

• Salary or wages: Contracts will itemize the salary, wage, or commission that has been agreed
upon.
• Schedule: In some cases, an employment contract will include the days and hours an employee
is expected to work.
• Duration of employment: An employment contract will specify the length of time the
employee agrees to work for the company. In some cases, this might be an ongoing period of
time. In other cases, it might be an agreement set for a specific duration. At other times a
minimum duration is laid out, with the possibility of extending that period.
• General responsibilities: Contracts can list the various duties and tasks a worker will be
expected to fulfill while employed.
• Confidentiality: Although you may have to sign a separate non-disclosure agreement, some
contracts include a statement about confidentiality.
• Communications: If an employee's role involves handling social media, websites, or email, a
contract might state that the company retains ownership and control of all communications.
 • Benefits: A contract should lay out all promised benefits, including (but not limited to): health
insurance, 401k, vacation time, and any other perks that are part of the employment.

• Future competition: Sometimes, a contract will include a noncompete agreement or

noncompete clause (NCC). This is an agreement stating that, upon leaving the company, the
employee will not enter into jobs that will put them in competition with the company. Often, an
employee will have to sign a separate NCC, but it might also be included in the employment
contract.

Tribunals

Introduction
Tribunals are not originally a part of the Constitution of India. They were introduced in 1985.

1. Tribunals were constituted with the objective of delivering speedy, inexpensive and
decentralised adjudication of disputes in various matters.
2. Tribunals are created to avoid the regular courts’ route for dispensation of disputes.
3. Some tribunals are specialised government agencies like boards and they also have decision-
making powers conferred upon them by law.
4. The provision for tribunals was not present in the Constitution originally.

The 42nd Amendment Act introduced these provisions in accordance with the recommendations of
the Swaran Singh Committee.

• The Amendment introduced Part XIV-A to the Constitution.

• This Part is called ‘Tribunals’. It contains two articles.
• Article 323A: Administrative Tribunals. Administrative tribunals are quasi-
judicial institutions that resolve disputes related to the recruitment and service
conditions of persons engaged in public service. Article 323A provides for this
and the Central Administrative Tribunal was created under this Section.
• Article 323B: Tribunals for other subjects such as:
• Taxation
• Industrial and labour
• Foreign exchange, import and export
• Land reforms
• Food
• The ceiling on urban property
• Elections to Parliament and state legislatures
• Rent and tenancy rights
• While 323A deals with administrative tribunals, 323B deals with other types of
tribunals (like National Green Tribunal, Competition Appellate Tribunal
(COMPAT), Securities Appellate Tribunal (SAT), etc.
• Tribunals under 323A can be established only by the Parliament. However,
tribunals under 323B can be established by both the Parliament and the State
Legislature.
• Under 323A, there can be only one tribunal at the centre and one for each state
(or two or more states), but under 323B, there can be a hierarchy of tribunals.
District court judge
Judges of the district courts are appointed by-------------
The District Courts in country India are the district courts of the State governments in India for every
district or for one or more districts together taking into account of the number of cases, population
distribution in the district. They monitor justice in the country at a district level.

Appointment of district court judge

The district court is handed over by a district judge. The district judge is appointed by the state
governor with on the advice of chief justice of the high court of the state. In addition to the district
judge, there may be few numbers of additional district judges and assistant district judges as per the
workload.

Features of district court

• The court of the district judges is the highest civil court in a district.
• It comprises of both administrative and judicial powers.
• The court of the District Judge resides in the district HQ.
• The court can also try to solve the criminal and civil cases and hence, the judge is called
District and Sessions Judge.
• Under the district courts, there are courts of the Sub-Judge, Additional Sub-Judge and Munsif
Courts.

Civil Courts Powers, Functions & Hierarchy

• Civil courts deal with civil cases. Civil law is referred to in almost all cases other than criminal
cases.
• Civil law is applied in disputes when one person sues another person or entity. Examples of
civil cases include divorce, eviction, consumer problems, debt or bankruptcy, etc.
• Judges in civil courts and criminal courts have different powers. While a judge in a criminal
court can punish the convicted person by sending him/her to jail, a judge in a civil court can
make the guilty pay fines, etc.

Civil Court Jurisdiction

Civil courts have four types of jurisdiction:

• Subject Matter Jurisdiction: It can try cases of a particular type and relate to a particular
subject.
• Territorial Jurisdiction: It can try cases within its geographical limit, and not beyond the
territory.
• Pecuniary Jurisdiction: Cases related to money matters, suits of monetary value.
• Appellate Jurisdiction: This is the authority of a court to hear appeals or review a case that
has already been decided by a lower court. The Supreme Court and the High Courts have
appellate jurisdiction to hear cases that were decided by a lower court.

Civil Courts Hierarchy

1. The Civil Courts are of three grades. The Court of the District Judge is at the top and is located
at the district headquarters.
2. It has the power of superintendence over the courts under its control and exercises both judicial
and administrative powers. He has both original and appellate jurisdictions. Cases of amount
 beyond a specified value can come straight to his court. He can also hear appeals from lower
courts.
3. Under the district courts, there are the other two Civil Courts which are subordinate to the
Court of the District Judge are-
0. the Court of Subordinate Judges and Additional Subordinate Judges and
1. the Courts of Munsifs and Additional Munsifs.
4. A dispute involving property or amount which is not valued more than two thousand rupees
comes within the jurisdiction of the Munsif Court. Most civil cases are filed in the Munsif’s
court. There is appeal from the Munsif Court to the Court of the Sub-Judge or to the Court of
the Additional Sub-Judge.
5. Against the judgement of the Court of Sub¬Judge or the Court of Additional Sub-Judge, one
can appeal to the Court of District Judge. District Judges sitting in District Courts and
Magistrates of Second Class and Civil Judge (Junior Division) are at the bottom of the judicial
hierarchy in India.
6. The High Court can entertain appeals against the judgement of the Court of the District Judge.

The various classes of criminal courts in India are:

1. Supreme Court
2. High Courts
3. The Courts of Session
4. The Judicial Magistrates of the First Class, and, in any metropolitan area; the Metropolitan
Magistrates.
5. The Judicial Magistrates of the Second Class
6. The Executive Magistrates

To know in detail about the Indian Judiciary, aspirants can visit the linked article.

Describe in brief, the Jurisdiction of Subordinate criminal courts in India.

• The Sessions Court headed by the Sessions Judge is the highest Criminal Court in the district.
As the District Judge also functions as the Sessions Judge, he is known as the District and
Sessions Judge. It may pass any sentence authorized by provisions of law, but a death
sentence, passed by it, has to be confirmed by the High Court.
• An Assistant Sessions Judge has the power to sentence a person to 10 years imprisonment.
• A First Class Magistrate can pass a sentence of imprisonment not exceeding five years or a
fine not exceeding one thousand rupees.
• A Second Class Magistrate can pass a sentence of imprisonment up to one year or a fine of up
to Rs. 1000/.
Revenue courts
Revenue courts deal with cases of land revenue in the State. The highest revenue court in the district is
the Board of Revenue. Under it are the Courts of Commissioners, Collectors, Tehsildars and Assistant
Tehsildars. The Board of Revenue hears the final appeals against all the lower revenue courts under it.

• Supreme Court of India

• Indian Judiciary

Tribunal vs Court
Both tribunals and courts deal with settling disputes between parties that affect the subjects’ rights.
Tribunals are like courts in many respects but there are differences between the two. The following
table summarises the difference between tribunals and courts.
 Sl. Court of Law Tribunal
No.

1 It is a part of the traditional judicial It is an agency created by Statute and invested with
system wherein the powers are derived judicial powers.
from the State.

2 Civil courts have the power to try all It has the power to try cases that are of the type that the
civil suits unless there is an express or Statute confers upon them. They are formed for
implied bar. adjudicating cases of a particular kind.

3 Judges of the courts are independent of Tenure, terms and conditions of the services of the
the executive. members of tribunals are entirely in the hands of the
executive.

4 The presiding officer here is trained in The presiding officer may or may not be trained in law.
law.

5 The judge should be impartial and not Here, the tribunal may be a party to the dispute.
interested in the subject matter of the
dispute.

6 Courts of law are bound by all rules of Tribunals are bound by the principles of natural justice
procedure and evidence. and not the civil procedure codes.

7 Courts can decide vires of legislation. Tribunals cannot decide the vires of legislation.

Unit- 4
Election provisions:
The Election Commission of India (ECI), a constitutional body, stands as a cornerstone of Indian democracy.
Through free, fair, and transparent elections in India, it ensures that the voice of the Indian populace is heard
through the ballot. This article of NEXT IAS aims to study in detail the Election Commission of India (ECI),
including its constitutional mandate, composition, powers, functions, challenges faced by it, and other related
aspects.
About Election Commission of India (ECI)
• The Election Commission of India (ECI) is a permanent and independent established by the Constitution of
India to ensure free and fair elections in the country.
o Since it is established directly under the provisions of the Constitution, it is a Constitutional Body.
• The ECI is an All-India body in the sense that it is common to both the Central and the State governments.
• The Constitution vests the Election Commission of India (ECI) with the power of superintendence, direction,
and control of elections to
o Parliament – Lok Sabha and Rajya Sabha
o State Legislatures – State Legislative Assembly and State Legislative Council (if exist)
o Office of President of India
o Office of Vice-President of India
• It is to be noted that the ECI is not concerned with conducting elections to Panchayats and Municipalities in
the States.
o For this purpose, the Constitution of India provides for a separate State Election Commission in each
State.
 Constitutional Provisions related to the Election Commission of India (ECI)
• Article 324 of the Constitution of India deals with the provisions related to the Election Commission of India
(ECI).
o The article contains detailed provisions regarding the composition of the ECI, appointment and service
conditions of its members, powers and functions of the ECI, and other related aspects.
Composition of Election Commission of India
Article 324 of the Constitution has made the following provisions about the composition of the Election
Commission of India:
• It shall consist of the Chief Election Commissioner (CEC) and such number of other Election Commissioners
(ECs) as the President may from time to time fix.
• The appointment of CEC and other ECs shall be made by the President.
• When any other Election Commissioner is so appointed, the Chief Election Commissioner shall act as the
Chairman of the ECI.
• The President may also appoint after consultation with the ECI such Regional Commissioners (RCs) as he may
consider necessary to assist the ECI.
• The conditions of service and tenure of office of the Election Commissioners and the Regional
Commissioners shall be determined by the President (subject to any related law made by the Parliament).
Note: At present, the Election Commission of India consists of a Chief Election
Commissioner and two Election Commissioners.
Appointment of Members of ECI
As per the Chief Election Commissioner and other Other Election Commissioners (Appointment, Conditions of
Service and Term of Office) Act, 2023, the Chief Election Commissioner and the Election Commissioners are
appointed by the President of India on the recommendation of a three-membered Selection
Committee consisting of:
• The Prime Minister of India
• A Union Minister nominated by the Prime Minister
• The Leader of Opposition (LoP) in the Lok Sabha
A Search Committee headed by the Cabinet Secretary suggests five names to the Selection Committee. The
Selection Committee is not bound to these name suggestions and may consider any person other than those
suggested by the Search Committee. It is to be noted that the process of appointment of the Chief Election
Commissioner and the Election Commissioners has changed recently in 2023. Before this, they were appointed
by the President on the recommendation of the Union CoM.
Term of Members of ECI
According to the Election Commission (Conditions of Service of Election Commissioners and Transaction of
Business) Act, 1991, the Chief Election Commissioner and the Election Commissioners hold office for
a term of 6 years or until they attain the age of 65 years, whichever is earlier.
Resignation of Members of ECI
According to the Election Commission (Conditions of Service of Election Commissioners and Transaction of
Business) Act, 1991, the Chief Election Commissioner and the Election Commissioners can resign at any
time by writing to the President.
Removal of Members of ECI
Removal of the Chief Election Commissioner
• The Chief Election Commissioner can be removed in the same manner and on the same grounds as a judge of
the Supreme Court.
o In other words, he/she can be removed by the President on the basis of a resolution passed to that effect
by both Houses of Parliament with a Special Majority, either on the grounds of proved misbehaviour or
incapacity.
Removal of Election Commissioner and Regional Commissioners
• Any other Election Commissioner or a Regional Commissioner is removed from office on the
recommendation of the Chief Election Commissioner.
o Thus, the protection of security of tenure, which is available to the Chief Election Commissioner, is not
available to the other Election Commissioners.
Salary and Allowances of the Members of the ECI
According to the Election Commission (Conditions of Service of Election Commissioners and Transaction of
Business) Act, 1991, the Chief Election Commissioner (CEC) and two Election Commissioners (ECs) receive
equal salaries, allowances, and other prerequisites that are similar to those of the judge of the Supreme Court.
The Chief Election Commissioner Vis-a-vis Election Commissioners
As per the Election Commission (Conditions of Service of Election Commissioners and Transaction of
Business) Act, 1991:
• The Chief Election Commissioner and the two other Election Commissioners are equal in terms of
their powers and other perquisites.
• In case of a difference of opinion amongst the Chief Election Commissioner and/or two other Election
Commissioners, the matter is decided by the Commission by majority.
Thus, though the Chief Election Commissioner is the chairman of the Election Commission, the other Election
Commissioners have an equal say in deciding a matter.
Power and Functions of ECI:
The powers and functions of the Election Commission of India can be classified into three categories as
explained below
Administrative Functions
• to determine territorial areas of electoral constituencies based on the Delimitation Commission Act of
Parliament.
• to prepare and periodically revise electoral rolls and to register all eligible voters.
• to notify the dates and schedules of elections and to scrutinize nomination papers.
• to grant recognition to political parties and allot election symbols to them.
• to determine the Model Code of Conduct (MCC).
• to prepare a roster for publicity of policies of political parties on radio and TV.
• to cancel polls in the event of rigging, booth capturing, etc.
• to request the President or Governor to requisition the staff necessary for conducting elections.
• to supervise the machinery of elections throughout the country to ensure free and fair elections.
• to register political parties for elections and grant them the status of national or state parties based on their poll
performance.
Advisory Functions
• to advise the President on matters relating to disqualifications of members of Parliament.
• to advise the Governor on matters relating to disqualifications of members of the State Legislature
• to advise the President whether elections can be held in a State under the President’s Rule.
Quasi-Judicial Functions
• to act as a court for settling disputes related to granting recognition to political parties and allotment of election
symbols to them.
• to appoint officers to inquire into disputes relating to electoral arrangements.
Assisting Machinery of ECI
The Election Commission of India (ECI) relies on a well-structured machinery comprising various roles and
responsibilities to support the electoral process:
Deputy Election Commissioners (DEC)
These Commissioners are drawn from civil services and appointed by the ECI with a tenure system. They are
 assisted by the Secretaries, Joint Secretaries, Deputy Secretaries, and Under Secretaries.
Chief Electoral Officer (CEO)
These officers are appointed at the State level, by the Chief Election Commissioner in consultation with
the State Government.
District Returning Officer (DRO)
These officers are appointed at the district level. The Collector acts as the DRO for every constituency in the
district.
Returning Officer (RO)
These officers are appointed by the DRO for every constituency.
Presiding Officer (PO)
These officers are appointed by the DRO for every polling booth.
Independence of Election Commission of India (ECI)
Constitutional Provisions Ensuring Independence of ECI
Article 324 of the Indian Constitution has made certain provisions to ensure the independent and impartial
functioning of the Election Commission of India (ECI). The most important of them can be seen as follows:
• The Chief Election Commissioner (CEC) is provided with the security of tenure. He/she can be removed only
in the manner and on the same grounds as mentioned in the Constitution.
• Though the Constitution does not protect the security of tenure for other Election Commissioners or
a Regional Commissioner, they cannot be removed from office except on the recommendation of the CEC.
• The service conditions of the Chief Election Commissioner and other Election Commissioners cannot be
varied to his/her disadvantage after their appointment.
Factors Hampering the Independence of ECI
1. The Constitution has not prescribed the qualifications for members of the Election Commission of India.
2. The Constitution has not specified the term of members of the Election Commission of India.
3. The Constitution has not prohibited varying service conditions of Election Commissioners after their
appointment.
4. The Constitution has not debarred retiring Election Commissioners from any further appointment by the
Government.
Supreme Court’s Directions to Promote Independence of ECI
In Anoop Baranwal vs Union of India Case (2023), the Supreme Court gave the following directions to ensure
the independence and neutrality of the Election Commission:
• Appointment of the Chief Election Commissioner (CEC) and the other Election Commissioners (ECs) shall be
made on the recommendations of a three·member committee consisting of the following:
o The Prime Minister,
o The Leader of the Opposition in the Lok Sabha and
o The Chief Justice of India.
• The grounds for removal of the other Election Commissioners should be the same as that of the Chief Election
Commissioner i.e., on the like grounds as a Judge of the Supreme Court subject to the recommendation of the
Chief Election Commissioner.
Issues with Election Commission of India
Apart from the above-mentioned factors, the ECI faces several other challenges which hamper its impartial and
effective functioning. Some of the prominent challenges faced by the ECI are as follows:
• Political Interference – The ECI faces pressure from political parties and powerful interest groups, which seek
to influence electoral outcomes through unfair means. Such political interference undermines the autonomy
and impartiality of the ECI, posing a threat to the credibility of elections.
• Limited Powers – The ECI’s power to enforce its decisions and punish offenders is limited. This hinders its
ability to effectively implement regulations and ensure compliance with electoral laws.
• Electoral Fraud and Malpractice – The ECI grapples with the perennial challenge of combating electoral fraud
and malpractice, such as voter intimidation, use of money and muscle powers, etc.
• Electoral Violence – Electoral violence, including clashes between political parties and attacks on polling
booths, continues to remain a significant concern for the ECI.
• Technological Challenges – With the increasing use of technology in elections, the ECI faces challenges
related to the security and integrity of the electoral process. For example, the rigging of Electronic Voting
Machines (EVMs).
• Disinformation and Fake News – The proliferation of disinformation, hate speeches, and fake news on social
media platforms poses a challenge to the ECI’s efforts to ensure informed and fair elections.
• Electoral Reforms – Implementing comprehensive electoral reforms to address systemic issues, such as
regulations of political party funding, internal party democracy, etc is a persistent challenge for the ECI.
Way Forward
• The ECI should intensify efforts to educate voters about their rights and responsibilities, the electoral process,
and the importance of participation in democracy through various communication channels, including social
media, educational programs, and community outreach initiatives.
• The ECI should advocate for comprehensive electoral reforms to address loopholes and shortcomings in
existing laws and regulations through measures such as transparency in campaign financing, integrity of
electronic voting systems, and curbing electoral malpractices through stricter enforcement mechanisms.
• The ECI should invest in modernizing electoral infrastructure such as electronic voting machines (EVMs),
voter registration systems, polling facilities, etc.
• The ECI should collaborate with law enforcement agencies to enhance security measures during elections and
combat electoral violence, intimidation, and fraud by deploying adequate security personnel, implementing
strict protocols to safeguard polling booths and election materials, and prosecuting offenders swiftly.
• The ECI should promote transparency and accountability in electoral processes by ensuring fair and impartial
conduct of elections, disclosing information on election funding and expenditures, and facilitating robust
mechanisms for monitoring and reporting electoral violations.
• The ECI should engage in knowledge-sharing and capacity-building initiatives with international counterparts
and election monitoring organizations to exchange best practices, enhance technical expertise, and foster
cooperation in promoting free and fair elections.
• The ECI should prioritize open dialogue with stakeholders, including political parties, civil society
organizations, and the media, to address concerns, solicit feedback, and promote transparency and inclusivity
in decision-making processes.
The Election Commission of India (ECI) stands as a bulwark of democracy, ensuring the sanctity of electoral
processes and upholding the democratic ideals enshrined in the Constitution. With its unwavering commitment
to free and fair elections, the ECI plays a pivotal role in fostering political participation, safeguarding the rights
of citizens, and strengthening the democratic fabric of the nation. Necessary steps should be taken to enhance
its independence and give more teeth to it.
Constitutional Provisions Related to Elections in India:
Article 324 to Article 329 in Part XV of the Indian Constitution contains detailed provisions regarding elections
in India. Here’s a brief overview of these provisions:
Article
Subject-matter
No.
Article Superintendence, direction, and control of elections are to be vested in an Election
324 Commission.
Article No person is to be ineligible for inclusion in or to claim to be included in a special,
325 electoral roll on grounds of religion, race, caste, or sex.
Article Elections to the House of the People and the Legislative Assemblies of States to be
326 based on adult suffrage.
Article
Power of Parliament to make provisions with respect to elections to Legislatures.
327
 Article
Subject-matter
No.
Article Power of State Legislature to make provisions with respect to elections to such
328 Legislature.
Article
Bar to interference by Courts in electoral matters.
329

Amendment of the constitution- meaning, procedure and limitations:

Types of Amendments in Indian Constitution

The list of types of amendments can be found below. There are three ways in which the Constitution can be
amended:
1. Amendment by simple majority of the Parliament
2. Amendment by special majority of the Parliament
3. Amendment by special majority of the Parliament and the ratification of at least half of the state legislatures.
A brief description of the above types of amendments of the Indian Constitution has been laid down below.
1. By Simple Majority of Parliament
A number of provisions in the Constitution can be amended by a simple majority of the two houses of Parliament
outside the scope of Article 368. These provisions include:
• Admission or establishment of new states.
• Formation of new states and alteration of areas, boundaries or names of existing states.
• Abolition or creation of legislative councils in states.
• Second Schedule-emoluments,
• Allowances, privileges and so on of the president, the governors, the Speakers, judges, etc.
• Quorum in Parliament.
• Salaries and allowances of the members of Parliament.
• Rules of procedure in Parliament.
• Privileges of the Parliament, its members and its committees.
• Use of the English language in Parliament.
• Number of puisne judges in the Supreme Court.
• Conferment of more jurisdiction on the Supreme Court.
• Citizenship-acquisition and termination.
• Elections to Parliament and state legislatures.
• Delimitation of constituencies.
• Union territories
• Fifth Schedule-administration of scheduled areas and scheduled tribes.
• Sixth Schedule-administration of tribal areas.
2. By Special Majority of Parliament
• The majority of the provisions in the Constitution need to be amended by a special majority of the Parliament,
that is, a majority (that is, more than 50 percent) of the total membership of each House and a majority of two-
thirds of the members of each House present and voting. The expression ‘total membership’ means the total
number of members comprising the House irrespective of the fact whether there are vacancies or absentees.
• The special majority is required only for voting at the third reading stage of the bill but by way of abundant
caution, the requirement for the special majority has been provided for in the rules of the Houses in respect of
all the effective stages of the bill.
• The provisions which can be amended by this way include (i) Fundamental Rights; (ii) Directive Principles of
State Policy; and (iii) All other provisions which are not covered by the first and third categories.
 3. By Special Majority of Parliament and Consent of States
Those provisions of the Constitution which are related to the federal structure of the polity can be amended by a
special majority of the Parliament and also with the consent of half of the state legislatures by a simple majority. If
one or some or all the remaining states take no action on the bill, it does not matter; the moment half of the states
give their consent, the formality is completed. There is no time limit within which the states should give their
consent to the bill. The following provisions can be amended in this way:
• Election of the President and its manner.
• Extent of the executive power of the Union and the states.
• Supreme Court and high courts.
• Distribution of legislative powers between
• the Union and the states.
• Any of the lists in the Seventh Schedule.
• Representation of states in Parliament.
• Power of Parliament to amend the Constitution and its procedure (Article 368 itself).

Types of Amendments – Constitutional Amendment Process

The procedure for the amendment of the Constitution as laid down in Article 368 is as follows:
• An amendment of the Constitution can be initiated only by the introduction of a bill for the purpose in either
House of Parliament (Lok Sabha & Rajya Sabha) and not in the state legislatures.
• The bill can be introduced either by a minister or by a private member and does not require prior permission of
the president.
• The bill must be passed in each House by a special majority, that is, a majority (that is, more than 50 per cent)
of the total membership of the House and a majority of two-thirds of the members of the House present and
voting.
• Each House must pass the bill separately.
• In case of a disagreement between the two Houses, there is no provision for holding a joint sitting of the two
Houses for the purpose of deliberation and passage of the bill.
• If the bill seeks to amend the federal provisions of the Constitution, it must also be ratified by the legislatures
of half of the states by a simple majority, that is, a majority of the members of the House present and voting.
• After duly passed by both the Houses of Parliament and ratified by the state legislatures, where necessary, the
bill is presented to the president for assent.
• The president must give his assent to the bill. He can neither withhold his assent to the bill nor return the bill
for reconsideration of the Parliament
• After the president’s assent, the bill becomes an Act (i.e., a constitutional amendment act) and the Constitution
stands amended in accordance with the terms of the Act.
Questions from the topic ‘Types of Amendments in Indian Constitution’, have been asked frequently. Candidates
preparing for UPSC 2023 must focus on such topics and prepare them according to the upcoming exam.
Scope of Amendability in Indian Constitution
The present position is that the Parliament under Article 368 can amend any part of the Constitution including
the Fundamental Rights but without affecting the ‘basic structure’ of the Constitution. However, the Supreme Court is
yet to define or clarify as to what constitutes the ‘basic structure’ of the Constitution.
From the various judgements, the following have emerged as ‘basic features’ of the Constitution:
1. Supremacy of the Constitution
2. Welfare state (socio-economic justice).
3. Principle of equality
4. Sovereign, democratic and republican nature of the Indian polity.
5. Judicial review
6. Free and fair elections
7. The secular character of the Constitution.
8. Freedom and dignity of the individual
9. Independence of Judiciary
10. Separation of powers between the legislature, the executive and the judiciary.
11. Parliamentary system
12. Limited power of Parliament to amend the Constitution
13. Federal character of the Constitution
14. Rule of law
15. Effective access to justice
16. Unity and integrity of the nation
17. Harmony and balance between Fundamental Rights and Directive Principles
18. Reasonableness

India Elections
• Types of Elections in India – India is a democratic country, and elections play an important role in the Indian
democratic system. An election is a procedure in which voters elect their leaders. Citizens must choose the
right leader since these leaders make decisions that affect the country’s well-being.In India, elections are held
for the Lok Sabha and Rajya Sabha, the State Legislative Assemblies, the Legislative Councils, and local self-
government.
• Types of Elections in India
In 1952, India conducted its first election following its independence in 1947. Elections make individuals
aware of their rights and responsibilities, generate interest in public affairs, and foster a sense of community. In
the Republic of India, four different types of elections are held.
• General Election (Lok Sabha)
Once every five years, a general election is held, in which all eligible voters use their voting rights. Members
of the Lok Sabha are chosen directly by voting in general elections. It is the responsibility of every adult
citizen to vote for the right candidate in their constituency. Candidates who are elected are referred to as
“Members of Parliament.” There have been 17 Lok Sabha General Elections to date.
On April 17, 1952, the Lok Sabha (House of the People) was legally formed for the first time after the first
General Elections, which took place between October 25, 1951, and February 21, 1952. According to the
Constitution, the Lok Sabha must have 533 members elected by direct election from state territorial seats.
• State Assembly Elections
Members of the state legislature are chosen directly by voting, in which all citizens have the right to vote in
their constituency. Members of the State Legislative Assembly are candidates who have won a state legislative
assembly election. The governor may dissolve the body at any time during the five-year term of the elected
candidates. The state’s size and population determine each assembly’s total strength.
• Rajya Sabha elections
In a Rajya Sabha election, only the State Legislative Assemblies members have the right to vote. A group of
MPs from one or more parties has the power to elect a member of their choice. In the Rajya Sabha, each MP
has a six-year term. However, one-third of the members change every two years. Furthermore, polls are used
to fill vacancies created by resignation, death, or disqualification. During transforming a bill into an act, the
Rajya Sabha serves as a second-level review body.
• Local Body elections
Local elections are held once every two years in India to elect local government officials such as mayors
and councilors. A returning officer oversees each municipal election. Another member of the staff could
serve as a substitute returning officer. The different local government bodies involved are Panchayats,
Municipalities, and Corporations, among others.
Importance of Election in India
• Elections are a critical component in ensuring that all people have equal rights & freedom.
• Elections allow Indian citizens to choose their leaders.
• Elections serve as a venue for discussion of public issues and promote the expression of public opinion, and
they function as a measure of democracy.
• In India, elections are also a forum for citizens to express their dissatisfaction with the ruling party.
• Elections provide an opportunity for fresh issues to be brought to the public’s attention.
• It provides voters with political training & education to actively engage in the nation’s activities.
• Elections demonstrate that voters have the power to change leadership.
• It helps in the formation of democratic governments and the peaceful transition of power.
Unit 5

Companies Act 2013

The Companies Act 2013 regulates the formation and functioning of corporations or companies in
India. The first Companies Act after independence was passed in 1956, which governed business
entities in the country. The 1956 Act was based on the recommendations of the Bhabha Committee.
This Act was amended multiple times, and in 2013, major changes were introduced. By Section 135 of
the 2013 Act, India became the first country to make corporate social responsibility (CSR) spending
mandatory by law.

Currently, the Ministry of Corporate Affairs is administering the following Central government Acts:

1. Companies Act 2013

2. Companies Act 1956 (some provisions of this Act still apply)
3. Competition Act 2002
4. Insolvency & Bankruptcy Code, 2016
5. Chartered Accountant Act 1949

The Companies Act 2013 has replaced the 1956 Act.

Comparison of Companies Act 2013 and Companies Act 1956

Detail Companies Act 1956 Companies Act 2013

Parts 13 NA

Chapters 26 29
Sections 658 470

Schedules 15 7

Companies Act 2013 Highlights

The major highlights of the 2013 Act are given below:

• The maximum number of shareholders for a private company is 200 (the previous cap was at 50).

• The concept of a one-person company.

• Company Law Appellate Tribunal & Company Law Tribunal

• CSR made mandatory

Salient Features of the Companies Act 2013

• It has introduced the concept of ‘Dormant Companies’. Dormant companies are those that have not engaged
in business for two years consecutively.

• It introduced the National Company Law Tribunal. It is a quasi-judicial body in India adjudicating issues
concerning companies. It replaced the Company Law Board.

• It provides for self-regulation concerning disclosures and transparency rather than having a government-
approval based regime.

• Documents have to be maintained in electronic form.

• Official liquidators have adjudicatory powers for companies having net assets of up to Rs.1 crore.

• The procedure for mergers and amalgamations have been made faster and simpler.

• Cross-border mergers are allowed by this Act (foreign company merging with an Indian company and
reverse) but with the permission of the Reserve Bank of India.

• The concept of a one-person company has been introduced. This is a new type of private company which
may have only one director and one shareholder. The 1956 Act required at least two directors and two
shareholders for a private company.

• Having independent directors has been made a statutory requirement for public companies.

• For a prescribed class of companies, women directors are mandatory.

• All companies should have at least one director who has been a resident of India for not less than 182 days
in the last calendar year.

• The Act provides for entrenchment (apply extra-legal safeguards) of the articles of association.

• The Act mandates at least 7 days of notice for calling board meetings.

• In this Act, the duties of a Director has been defined. It has also defined the duties of ‘Key Managerial
Personnel’ and ‘Promoter’.
 • For public companies, there should be a rotation of audit firms and auditors. The Act also prevents auditors
from performing non-audit services to the company. In case of non-compliance, there is substantial criminal
and civil liability for an auditor.

• The whole process of rehabilitation and liquidation of the companies in the case of the financial crisis has
been made time-bound.

• The Act makes it mandatory for companies to form CSR committees, and formulate CSR policies. For
certain companies, mandatory disclosures have been made with regard to CSR.

• Listed companies ought to have one director to represent small shareholders as well.

• There is provision for search and seizure of documents, during the investigation, without an order from a
magistrate.

• Norms have been made stringent for accepting deposits from the public.

• Setting up of the National Financial Reporting Authority (NFRA) has been provided for. It engages in the
establishment and enforcement of accounting and auditing standards and oversight of the work of auditors.
(Due to notification of NFRA, India is now eligible for membership of the International Forum of
Independent Audit Regulators (IFIAR).)

• The Act bans key managerial personnel and directors from purchasing call and put options of shares of the
company if such person is reasonably expected to have access to price-sensitive information.

• The Act offers more power to shareholders in that it provides for shareholders’ approval for many major
transactions.

Keywords in Companies Act 2013

The list mentioned-below provides you with keywords used in the Companies Act 2013, which aspirant must know:

• Appellate Tribunal – Questions can be asked about National Company Law Appellate Tribunal

• Associate Company – Questions can be asked on the definition of an associate company

• Called-Up Capital – Questions can be asked about the difference between called-up capital, authorized
capital and nominal capital

• Company Liquidator – The definition of company liquidator is important

• Questions can be asked on the difference between debentures, deposits and derivatives

Companies (Amendment) Act, 2019

This Act was passed by the Parliament in July 2019. The changes recommended under the latest amendment to the
Companies Act are as follows:

• Companies will have to keep an unspent amount into a special account for the purpose of CSR.

• This amount, if left unspent after a period of 3 years, will be moved into a fund specified in Schedule VII of
the Act. This could even be the Prime Minister’s Relief Fund.

• Under this Act, the Registrar of Companies can initiate action for the removal of the company’s name from
the Register of Companies if it is not conducting business or operation as per the Company Law.
 • 16 minor offences mentioned in the Act have been decriminalised (made civil defaults).

What are types of companies in India?

There are various types of business entities in India. They are:

• Private limited company

• Unlimited company

• Public limited company

• Sole proprietorship

• Partnership

• Joint Hindu family business

• Cooperatives

• Limited liability partnerships

• Companies Limited by Shares: In this scenario, the liability of its members is restricted to the level of the
nominal value of shares occupied by them. If a shareholder has paid the complete amount of the shares, there
is no liability on his side, whatever may be the debts of the enterprise. He need not pay a single rupee from
his private property.

• Unlimited Companies: When there is no constraint on the liability of its shareholders, such a company is
known as an unlimited company. When the company’s property is insufficient to pay off its arrears (debts),
the private property of its shareholders can be used. To put it in other words, the creditors can ask for their
dues from its shareholders. Such enterprises are not to be found in India though approved by Section 2 (20)
of the Companies Act.

On the basis of the number of shareholders, enterprises can be classified into 3 kinds of companies :

• Public Company: A public company is an enterprise which :

• Is not a private company

• Is a company which is not an ancillary of any of the private company

• Private Company: A private company is an enterprise, which by its articles :

• Limits the authority to transfer its shares

• It must have at least 2 people, apart from the case of one person company.

• Restricts the number of its shareholders to 200 (excluding its employees)

• One Person Company or OPC: According to Sec.2 (62) of the Companies Act, 2013, ‘company which has
only 1 person as a shareholder’. Rule number 3 of the Companies (Incorporation) Rules, 2014 says that :

• Only a natural person who is an Indian citizen and an Indian resident can form 1 person company.

• It cannot execute non-banking financial investment pursuits.

• It is paid-up share capital which is not more than ₹ 50 Lakhs.

• Its aggregate annual turnover of 3 years does not cross ₹ 2 Crores.

Steps in Formation of a Company
The formation of a company goes through a number of steps, starting from idea generation to
commencing of the business. This whole process can be broken down into 4 major phases or steps,
which we will be discussing in the lines below.

The major steps in formation of a company are as follows:

1. Promotion stage
2. Registration stage
3. Incorporation stage
4. Commencement of Business stage

Also see: Kinds Of Companies

Let us discuss these steps in detail.

Promotion Stage: Promotion is the first step in the formation of a company. In this phase, the idea of
starting a business is converted into reality with the help of promoters of the business idea.

In this stage the ideas are executed. The promotion stage consists of the following steps:
 1. Identify the business opportunity and decide on the type of business that needs to be done.
2. Perform a feasibility study and determine the economic, technical and legal aspect of executing
the business.
3. Interest shown by promoters towards the business idea and supply of capital and other
necessary procedures to start the business.

Registration stage: Registration stage is the second part of the formation process. In this stage, the
company gets registered, which brings the company into existence.
A company is said to be in existence, if it is registered as per the Companies Act, 2013. In order to get
a company registered, some documents need to be provided to the Registrar of Companies.
There are several steps involved in the registration phase, and are as follows:

1. Memorandum of Association: A memorandum of association (MoA) must be signed by the

founders of the company. A minimum of 7 members are required in case of a public company
and 2 in case of a private company. The MoA must be properly registered and stamped.
2. Article of Association: Article of Association (AoA) is also required to be signed and
submitted. All members who previously signed MoA, should also be signing the AoA.
3. The next step is preparing a list of directors which should be filed with the Registrar of
Companies.
4. Directors of the company should provide a written consent agreeing to be directors, should be
filed with the Registrar of Companies (RoC).
5. The notice of address of the office needs to be filed.
6. A statutory declaration should be made by any advocate of either the High Court or Supreme
Court, or a person of the capacity of Director, Secretary or Managing Director. This
declaration shall be filed with the RoC.

Certificate of Incorporation: Certificate of incorporation is issued when the registrar is satisfied with
the documents provided. This certificate validates the establishment of the company in the records.
Certificate of commencement of business: Certificate of commencement of business is required for
a public company to start doing business, while a private company can start business once it has
received the certificate of incorporation.
Public companies receiving the certificate of incorporation can issue prospectus in order to make the
public subscribe to the share for raising capital. Once all the minimum number of required shares have
been subscribed, a letter should be sent to the registrar along with a bank document stating the
receiving of the money.
The registrar will issue a certificate upon finding the provided documents satisfactory. This certificate
is known as certificate of commencement of business. The company can start business activities from
the date of issue of the certificate and the business shall be done as per rules laid down in the MoA
(Memorandum of Association).

What is Dissolution of a Firm?

Dissolution of a partnership firm might occur without the interference of the court or by the court’s order, in any of
the ways stated. It has to be noted that dissolution of the enterprise necessarily brings in the dissolution of the
partnership. Dissolution of a firm takes place in any of the following ways :

1. Dissolution by Agreement: An enterprise is dissolved :

•
• With the consent of all the partners
• In accordance with an agreement between the partners

1. Mandatory Dissolution: An enterprise is dissolved mandatorily in the below mentioned cases:

 •
• When all the partners or one partner, become bankrupt, rendering them incapable to sign an
agreement
• When the business concern of the enterprise is illegal
• When some occurrence has taken place which makes it illegitimate for the partners to take over and
carry on the business concern of the enterprise in partnership, for example, when a partner who is a
citizen of a nation becomes an alien antagonist because of the allegated declaration of war with his
nation and India

1. On the occurrence of certain emergencies: Subject to agreement between the partners, an enterprise is
dissolved :

• If established for a steady period, by the expiry of that time frame

• If established to carry out one or more deals, by the accomplishment thereon
• When the fellow partner is deceased
• By the judgment of a partner as a bankrupt

1. Dissolution by Notice: If the partnership is at will, the enterprise may be dissolved if one of the partners
furnishes a notice in written proof to the other fellow partners, bespeaking his motive of pursuing dissolution
of the enterprise

1. Dissolution by Court: At the suit of a partner, the court may order a partnership enterprise to be dissolved in any
of the following mentioned aspects:

• When a fellow partner turns out to be a mentally ill person

• When a partner becomes ineffective in performing his responsibilities
• When a partner is found guilty of misconduct or unethical behaviour which skeptically influence the
business concern of the enterprise

Memorandum of Association

Memorandum of Association is the most important document. It defines the objectives of the company
and determines the boundary line, with in which the company has to perform tasks. No company can
legally undertake activities that are not contained in its Memorandum of Association.

The Memorandum of Association contains different clauses, which are given as follows:
(i) The Name Clause: This clause contains the name of the company with which the company will be
known, which has already been approved by the Registrar of Companies. According to name clause
the name of a company should not be identical or resembling the name of an existing company and
should not violate the provisions of The Emblem and Names (Prevention of Improper Use) Act, 1950.

(ii) Registered Office Clause: This clause contains the name of the state, in which the registered office
of the company is proposed to be situated. The exact address of the registered office is not required at
this stage but the same must be notified to the Registrar within thirty days of the incorporation of the
company.

(iii) Objects Clause: This clause is the most important one as it defines the purpose for which the
company is formed. A company is not legally entitled to undertake an activity, which is beyond the
objects stated in this clause. The object clause is divided into two objects
(a) The Main Objects: The main objects for which the company is formed are listed in this sub-clause.
(b) Other Objects: Objects not included in the main objects could be stated in this sub-clause. A
company can undertake a business included in this subclause, either by passing a special resolution or
passing an ordinary resolution and get central government's approval for the same.

(iv) Liability Clause: This clause limits the liabilities of the members to the amount unpaid on the
shares owned by them.
(v) Capital Clause: This specifies the maximum capital which the company will be authorized to raise
through the issue of shares. The authorised share capital of the proposed company alongwith its
division into the number of shares having a fixed face value is specified in this clause.

(vi) Association Clause: In this clause, the signatories to the Memorandum of Association state their
intention to be associated with the company and also give their consent to purchase qualification
shares. The Memorandum of Association must be signed by at least seven persons in case of a public
company and by two persons in case of a private company.

Articles of Association
The Companies Act, 2013 defines ‘articles’ as the “articles of association of a company originally
framed, or as altered from time to time in pursuance of any previous company laws or of the
present.” The Articles of Association of a company are that which prescribe the rules, regulations and
the bye-laws for the internal management of the company, the conduct of its business, and is a
document of paramount significance in the life of a company. The Articles of a company have often
been compared to a rule book of the company’s working, that regulates the management and powers
of the company and its officers. It prescribes several details of the company’s inner workings such as
the manner of making calls, director’s/employees qualifications, powers and duties of auditors,
forfeiture of shares etc.

In fact, the articles of association also establish a contract between the members and between the
members and the company. This contract is established, governs the ordinary rights and obligations
that are incidental to having membership in the company.

It must be noted, however, that the articles of association, are subordinate to the memorandum of
association of a company, which is the dominant, fundamental constitutional document of the
company. Further, as laid down in Shyam Chand v. Calcutta Stock Exchange, any and all articles
that go beyond the memorandum of association will be deemed ultra vires. Therefore, there should not
be any provisions in the articles that go beyond the memorandum. In the event of a conflict between
the memorandum and the articles, the provisions in the memorandum will prevail. In case of any
ambiguity or uncertainty regarding details in the memorandum, it should be read along with the
articles.

The pivotal differences between memorandum and articles of association are as follows:

S.No. Memorandum of Association Articles of Association

Contains fundamental conditions upon which the Contain the provisions for internal
1
company is incorporated. regulations of the company.

Regulate the relationship between the

Meant for the benefit and clarity of the public and
2 company and its members, as well
the creditors, and the shareholders.
amongst the members themselves.

Lays down the area beyond which the company’s Articles establish the regulations for
3
conduct cannot go. working within that area.

Memorandum lays down the parameters for the Articles prescribe details within those
4
articles to function. parameters.
 Can only be altered under specific circumstances
and only as per the provisions of the Companies Articles can be altered a lot more easily,
5
Act, 2013. Permission of the Central Government is by passing a special resolution.
also required in certain cases.

Articles cannot include provisions

Memorandum cannot include provisions contrary to
contrary to the memorandum. Articles are
6 the Companies Act. Memorandum is only
subsidiary to both the Companies Act and
subsidiary to the Companies Act.
the Memorandum.

Acts done beyond the memorandum are ultra Acts done beyond the Articles can be
7 vires and cannot be ratified even by the ratified by the shareholders as long as the
shareholders. act is not beyond the memorandum.

Nature and Content of Articles of Association

As per the Companies Act, 2013, the articles of association of different companies are supposed to be
framed in the prescribed form, since the model form of articles is different for companies limited by
shares, companies limited by guarantee having share capital, companies limited by guarantee not
having share capital, an unlimited company having share capital and an unlimited company not having
share capital.

The signing of the Articles of Association

The Companies (Incorporation) Rules, 2014 prescribes that both the Memorandum and the Articles of
a company are to be signed in a specific manner.

• Memorandum and Articles of a company, are both required to be signed by all subscribers,
who are further required to add their names, addresses and occupation, in the presence of at
least one witness, who must attest the signatures with his own signature and details.
• Where a subscriber is illiterate, he must affix a thumb impression in place of his signature,
and appoint a person to authenticate the impression with his signature and details. This
appointed person should also read out the content of the documents to the illiterate
subscriber for his understanding.
• Where a subscriber is a body corporate, the memorandum and articles must be signed by
any director of the body corporate who is duly authorised to sign on behalf of the body
corporate, by a passing a resolution of the board of directors of the body corporate.
• Where the subscriber is a Limited Liability Partnership, the partner of the LLP who is duly
authorised to sign on the behalf of the LLP by a resolution of all the partners shall sign.

Provisions for Entrenchment

The concept of Entrenchment was introduced in the Companies Act, 2013 in Section 5(3) which
implies that certain provisions within the Articles of Association will not be alterable by merely
passing a special resolution, and will require a much more lengthy and elaborate process. The literal
definition of the word “entrench” means to establish an attitude, habit, or belief so firmly that bringing
about a change is unlikely. Thus, an entrenchment clause included in the Articles is one which makes
certain changes or amendments either impossible or difficult.
Provisions for entrenchment can only be introduced in the articles of a company during its
incorporation, or an amendment to the articles brought about by a special resolution in case of a public
company, and an agreement between all the members in case of a private company.

Alteration of Articles of Association

Section 14 of the Companies Act, 2013, permits a company to alter its articles, subject to the
conditions contained in the memorandum of association, by passing a special resolution. This power is
extremely important for the functioning of the company. The company may alter its articles to the
effect that would turn:

A public company into a private company

For a company wanting to convert itself from public to a private company simply passing a special
resolution is not enough. The company will have to acquire the consent and approval of the Tribunal.
Further, a copy of the special resolution must be filed with the Registrar of Companies within 30 days
of passing it. Further, a company must then file a copy of the altered, new articles of association, as
well as the approval order of the Tribunal with the Registrar of Companies within 15 days of the order
being received.

A private company into a public company

For a company wanting to convert from its private status to public, it may do so by removing/omitting
the three clauses as per section 2(68) which defines the requisites of a private company. Similar to the
conversion of the public to a private company, a copy of the resolution and the altered articles are to
be filed with the Registrar within the stipulated period of time.

Limitations on power to alter articles

• The alteration must not contravene provisions of the memorandum, since the memorandum
supersedes the articles, and the memorandum will prevail in the event of a conflict.
• The alteration cannot contravene the provisions of the Companies Act, or any other
company law since it supersedes both the memorandum and the articles of the company.
• Cannot contravene the rules, alterations or suggestions of the Tribunal.
• The alteration cannot be illegal or in contravention with public policy. Further, it must be
for the bona fide benefit and interest of the company. The alterations cannot be an effort to
constitute a fraud on the minority and must be for the benefit of the company as a whole.
• Any alteration made to convert a public company into a private company, cannot be made
until the requisite approval is obtained from the Tribunal.
• A company may not use the alteration to cover up or rectify a breach of contract with third
parties or use it to escape contractual liability.
• A company cannot alter its articles for the purpose of expelling a member of the board of
directors is against company jurisprudence and hence cannot occur.
Binding effect of Memorandum and Articles of Association
After the Articles and the Memorandum of a company are registered, they bind the company and its
members to the same extent as if they had been signed by each of the members of the company.
However, while the company’s articles have a binding effect, it does not have as much force as a
statute does. The effect of binding may work as follows:

Binding the company to its members

The company is naturally completely bound to its members to adhere to the articles. Where the
company commits or is in a place to commit a breach of the articles, such as making ultra vires or
otherwise illegal transaction, members can restrain the company from doing so, by way of an
injunction. Members are also empowered to sue the company for the purpose of enforcement of their
own personal rights provided under the Articles, for instance, the right to receive their share of
declared divided.

It should be noted, however, that only a shareholder/member, and only in his capacity as a member,
can enforce the provisions contained in the Articles. For instance, in the case of Wood v. Odessa
Waterworks Co., the articles of Waterworks Co. provided that the directors can declare a dividend to
be paid to the members, with the sanction of the company at a general meeting. However, instead of
paying the dividend to the shareholders in cash a resolution was passed to give them debenture bonds.
It was finally held by the court, that the word “payment” referred to payment in cash, and the directors
were thus restrained from acting on the resolution so passed.

Members bound to the company

Each member of the company is bound to the company and must observe and adhere to the provisions
of the memorandum and the articles. All the money that may be payable by any member to the
company shall be considered as a debt due. Members are bound by the articles just as though each and
every one of them has signed and contracted to conform to their provisions. In Borland’s Trustees v.
Steel Bros. & Co. Ltd., the articles the company provided that in the event of bankruptcy of any
member, his shares would be sold at a price affixed by the directors. Thus, when Borland went
bankrupt, his trustee expressed his wish to sell these shares at their original value and contended that
he could do so since he was not bound by the articles. It was held, however, that he was bound to
abide by the company’s articles since the shares were bought as per the provisions of the articles.

Basis of difference Memorandum of Association (MoA) Articles of Association (AoA)

Objective The MoA defines the character of a The AoA defines the rules and
company and the scope of its activities. regulation of the company.
Position It is the main document of a company which It is the subsidiary document of a
is subordinate to the Companies Act. company which is subordinate to
both MoA and the Companies Act.

Relationship The MoA establishes the relation The AoA defines the relation of the
between the company and outsiders. company with its members.

Alteration Altering the MoA requires the approval of a The AOA can be easily altered by
statutory authority. passing a resolution.

Ratification Acts beyond MoA cannot be ratified. Acts beyond the AoA can be ratified
by the members if they do not
violate the MoA.

Necessity It is a necessary document. It is a secondary document.

Prospectus

A prospectus is any document described or issued. It includes any notice, circular, advertisement or
other documents, inviting deposits from the public or inviting offers from the public for the
subscription or purchase of any share or debentures of a body corporate. In simple words, it is an
invitation to the public to apply for shares and debentures of the company or to make deposite in the
company.
Purpose of the prospectus:
1. Prospectus contains the printed summary of the company's past history, if any, its present status and
its future prospectus.
2. It informs the public about the company and stimulates people to make an investment in the
company.
3. It is an authentic record of terms and conditions on which the shares and debentures have been
issued.
4. It shows business policies and programmes of the company.
Consequences of misleading prospectus:
The persons responsible for preparing false and misleading prospectus will face the civil and criminal
liability.
(a) Civil Liability: In case misleading prospectus amounts to misrepresentation aggrieved party can
repudiate the contract and can claim a refund of their money.
(b) Criminal Liability: In case any deliberate concealment is made, directors will be punished with a
fine of Rs. 5000 or imprisonment upto two years or both.
Types of prospectus
According to Companies Act 2013, there are four types of prospectus.
Deemed Prospectus – Deemed prospectus has mentioned under Companies Act, 2013 Section 25 (1).
When a company allows or agrees to allot any securities of the company, the document is considered
as a deemed prospectus via which the offer is made to investors. Any document which offers the sale
of securities to the public is deemed to be a prospectus by implication of law.
Red Herring Prospectus – Red herring prospectus does not contain all information about the prices
of securities offered and the number of securities to be issued. According to the act, the firm should
issue this prospectus to the registrar at least three before the opening of the offer and subscription list.
Shelf prospectus – Shelf prospectus is stated under section 31 of the Companies Act, 2013. Shelf
prospectus is issued when a company or any public financial institution offers one or more securities
to the public. A company shall provide a validity period of the prospectus, which should not be more
than one year. The validity period starts with the commencement of the first offer. There is no need for
a prospectus on further offers. The organization must provide an information memorandum when
filing the shelf prospectus.
Abridged Prospectus – Abridged prospectus is a memorandum, containing all salient features of the
prospectus as specified by SEBI. This type of prospectus includes all the information in brief, which
gives a summary to the investor to make further decisions. A company cannot issue an application
form for the purchase of securities unless an abridged prospectus accompanies such a form.

What are Shares and Who are Shareholders?

Shares are the units into which the absolute share capital of a firm is split into or divided into. Therefore, the share is
a fractional portion of the share capital and comprises the ground of ownership interest in a company. The persons
who contribute money through shares are called shareholders.

The amount of authorised capital, together with the number of shares in which it is split is mentioned in the
Memorandum of Association but the divisions of shares in which the enterprise’s capital is to be split along with
their specific obligations and rights, are recommended by the Articles of Association of the company. As per The
Companies Act, an enterprise can issue 2 types of shares :

• Preference shares

• Equity shares (also called ordinary shares)

What are Preference Shares?

Preference shares, more commonly known as preferred stock, are shares of an enterprise’s stock with dividends that
are paid out to the members before equity shares dividends are circulated. If the enterprise enters insolvency, the
members with preferred stock are designated to be paid from company assets. Most of the preference shares have a
fixed dividend, while normally do not. Preferred stock shareholders do not possess any voting rights, but equity
shareholders typically do.
Features of Preference Shares :

• Preference shares are a long-term source of finance

• The dividend payable on preference shares (PS) is usually higher than the debenture interest

• Preference shareholders (PSH) get a fixed rate of dividend regardless of the volume of profit

What are Equity Shares?

Equity shares were earlier called as ordinary shares. The shareholders of such shares are the authentic owners of the
enterprise. They possess voting right in the huddles of holders of the enterprise. They have a command over the
working of the enterprise. Equity shareholders are given dividend only after paying it to the preference shareholders.

Features of Equity Shares:

• Equity share capital remains with the company. It is given back only when the enterprise is closed

• Equity shareholders possess voting rights and select the management of the enterprise

Equity Share Meaning

An equity share, normally known as ordinary share is a part ownership where each member is a fractional owner and
initiates the maximum entrepreneurial liability related to a trading concern. These types of shareholders in any
organization possess the right to vote.

Features of Equity Shares Capital

• Equity share capital remains with the company. It is given back only when the company is
closed.
• Equity Shareholders possess voting rights and select the company’s management.
• The dividend rate on the equity capital relies upon the obtainability of the surfeit capital.
However, there is no fixed rate of dividend on the equity capital.

Types of Equity Share

• Authorized Share Capital- This amount is the highest amount an organization can issue. This
amount can be changed time as per the companies recommendation and with the help of few
formalities.

• Issued Share Capital- This is the approved capital which an organization gives to the
investors.

• Subscribed Share Capital- This is a portion of the issued capital which an investor accepts
and agrees upon.

• Paid Up Capital- This is a section of the subscribed capital, that the investors give. Paid-up
capital is the money that an organization really invests in the company’s operation.
 • Right Share- These are those type of share that an organization issue to their existing
stockholders. This type of share is issued by the company to preserve the proprietary rights of
old investors.

• Bonus Share- When a business split the stock to its stockholders in the dividend form, we call
it a bonus share.

• Sweat Equity Share- This type of share is allocated only to the outstanding workers or
executives of an organization for their excellent work on providing intellectual property rights
to an organization.

Also Check: What is Stockholders?

Merits of Equity Shares Capital

• ES (equity shares) does not create a sense of obligation and accountability to pay a rate of
dividend that is fixed

• ES can be circulated even without establishing any extra charges over the assets of an
enterprise

• It is a perpetual source of funding, and the enterprise has to pay back; exceptional case – under
liquidation

• Equity shareholders are the authentic owners of the enterprise who possess the voting rights

Demerits of Equity Shares Capital

• The enterprise cannot take either the credit or an advantage if trading on equity when only
equity shares are issued

• There is a risk, or a liability overcapitalization as equity capital cannot be reclaimed

• The management can face hindrances by the equity shareholders by guidance and
systematizing themselves

• When the firm earns more profits, then, higher dividends have to be paid which leads to raising
in the value of the shares in the marketplace and its edges to speculation as well.

Preference Share Meaning

Preference shares, also known as preferred stock, is an exclusive share option which enables
shareholders to receive dividends announced by the company before the equity shareholders.

Preference shares provide the shareholders with the special right to claim dividends during the
company lifetime, and also with the option to claim repayment of capital, in case of the wind up of the
company.
It is considered as a hybrid security option as it represents the characteristics of both debt and equity
investments.

The capital raised by issuing preference shares is known as preference share capital and preference
shareholders can be regarded as owners of the company. They however do not enjoy any kind of
voting rights, unlike equity shareholders.

Features of Preference Shares

The following are the features of preference shares:

1. Preferential dividend option for shareholders.

2. Preference shareholders do not have the right to vote.
3. Shareholders have a right to claim the assets in case of a wind up of the company.
4. Fixed dividend payout for shareholders, irrespective of profit earned.
5. Acts as a source of hybrid financing.

Types of Preference Shares

The various types of preference share are discussed below:

1. Cumulative preference share: Cumulative preference shares are a special type of shares that
entitles the shareholders to enjoy cumulative dividend payout at times when a company is not
making profits. These dividends will be counted as arrears in years when the company is not
earning profit and will be paid on a cumulative basis, the next year when the business
generates profits.
2. Non-cumulative preference shares: These types of shares do not accumulate dividends in the
form of arrears. In the case of non-cumulative preference shares, the dividend payout takes
place from the profits made by the company in the current year. If there is a year in which the
company doesn’t make any profit, then the shareholders are not paid any dividends for that
year and they cannot claim for dividends in any future profit year.
3. Participating preference shares: These types of shares allow the shareholders to demand a
part in the surplus profit of the company at the event of liquidation of the company after the
dividends have been paid to the other shareholders. In other words, these shareholders enjoy
fixed dividends and also share a part of the surplus profit of the company along with equity
shareholders.
4. Non-participating preference shares: These shares do not yield the shareholders the
additional option of earning dividends from the surplus profits earned by the company. In this
case, the shareholders receive only the fixed dividend.
 5. Redeemable Preference Shares: Redeemable preference shares are shares that can be
repurchased or redeemed by the issuing company at a fixed rate and date. These types of shares
help the company by providing a cushion during times of inflation.
6. Non-redeemable Preference Shares: Non-redeemable preference shares are those shares that
cannot be redeemed during the entire lifetime of the company. In other words, these shares can
only be redeemed at the time of winding up of the company.
7. Convertible Preference Shares: Convertible preference shares are a type of shares that
enables the shareholders to convert their preference shares into equity shares at a fixed rate,
after the expiry of a specified period as mentioned in the memorandum.
8. Non-convertible Preference Shares: These type of preference shares cannot be converted
into equity shares. These shares will only get fixed dividend payout and also enjoy preferential
dividend payout during the dissolution of a company.

Difference between Equity Shares and Preference Shares

Equity share and Preference share are the two types of share that a company issues. Equity share is an ordinary share.
Preference share experience the perquisites of the dividend distribution first. The equity stockholders get the
opportunity to cast their vote in major business decisions.
The company preference share receives the dividend at a fixed rate. Whenever there is an issue with the company,
the preference share gets the right to return of the capital before the equity share.

Parameters Preference Share Equity Share

Dividend Rate Has a fixed rate Fluctuates

Vote Rights No voting rights Have voting rights

Participation in Has no right to participate in Has the right to participate in

Management management decision management decision

Preferences Get the first preference, before equity Gets second preference, after
share preference share

Directors:
Director is the person occupying the position as director by whatever name called.
Definition As per section 2(34) Director means director appointed to the board of the company.

Board of Directors Composition

• The board of directors are can be called the brain of the company. They are responsible for taking
all the big decisions and making policy changes. These decisions are taken in special meetings
members of the board hold together, called ‘Board Meetings’.

• Section 149 of the Companies Act states that every company’s board of directors must necessarily
have a minimum of three directors if it is a public company. two directors if it is a private
company and one director in a one-person company.
 • The maximum number of members a company can assign as directors is fifteen. However, the
company can pass a special resolution in a general meeting to allow for assigning more than
fifteen members to the board of directors.

• The maximum number of companies that an individual can become a director of, is 20 companies.

• At least one director, who has lived in India for a minimum of 182 calendar days of the previous
year, shall be appointed by every company’s board. It is a mandatory rule.

• At least, one woman director must be appointed by the company.

• All listed companies must have at least one-third proportion of their board of directors as
independent directors.

• Under LODR for Listed Companies (Listing Obligations and Disclosure Requirements)
• The members of the board shall have an optimum combination of executive and non-executive
directors and at least one-woman director. At least 50% of the board of directors must be non-
executive directors.

• When the board chairman is a non-executive director, a minimum of one-third directors shall be
made up of independent directors. In case of the board chairman being an executive director, a
minimum of half of the board of directors shall comprise of independent directors.

• However, in case a non-executive chairman is a promoter of the said listed company or directly
related to a promoter or a high-level manager, at least half of all directors will comprise of
independent directors.

Organisation of the Board of Directors:

• A company is an artificial person—it has no physical form and it has to act through the agency
of natural persons. The ultimate authority of a company is its shareholders acting through a
general meeting. Since general meetings are few and far between, the right to manage the
affairs of the company is vested in the Board of Directors the supreme executive.

• In other words, a company acts through the Board of Directors. The Board is the ultimate
executive authority in all affairs of the company. The Companies Act provides three categories
of persons who can manage the affairs of the company—Directors, Managing Director and
Manager.

• The Board of Directors is a committee consisting of several elected representatives known as

directors. A director has no power except on matters which are specifically delegated to him.
 The powers conferred on the directors are to be exercised by them collectively at board

meetings. Functions of the Board comprise both statutory functions and executive functions.

• The first directors are either appointed by promoters or they may be named in the Articles. If
not so appointed or named, the signatories to the Memorandum are deemed to be directors till
the first directors are elected at the general meeting.

• A person cannot be appointed as a director (technical or govt. nominated directors being

exceptions) unless he holds qualification shares stated in the Articles. The qualification
shares—if not held at the time of appointment—must be acquired within two months after
appointment as director.

Disqualification of Directors:

The following persons are disqualified to be appointed as directors:

(i) Persons of unsound mind,

(ii) Un-discharged insolvents,

(iii) Persons convicted and imprisoned for at least 6 months during the preceding five years,

(iv) Defaulters of all money on shares

(v) Fraudulent declared by the court and

(vi) Persons holding more than 20 directorships of public companies.

As already mentioned, the Board of Directors is the ultimate executive authority in company

management. It has two sets of powers executive powers and statutory powers. The statutory powers
are derived from two sources the Articles of Association and the Companies Act.

Functions of Directors:
1. To Act as Trustees:

The most important function of the Board of Directors is trusteeship. In the role of trustee, the

directors must look after the interest of shareholders on the one hand and the interests of consumers,
labours, suppliers and the community on the other hand.

There are four ways in which the Board discharges its trusteeship functions:
(i) Original decision-making,

(ii) Confirming executive decisions,

(iii) Counselling with the chief executive and his subordinates and

(iv) Reviewing the past activities and proposed actions.

2. To Determine the Objectives and Policies:

Objectives are the goals for which a company is formed. The Board formulates policies in broad terms

and lays down the major policies of the company. These objectives and policies are guideposts for

executives of the company.

According to E. F. L. Brech, the functions of the Board are threefold:

(i) To determine policy and check-up the progress towards its fulfillment,

(ii) To ensure that the company’s legal obligations are carried out and

(iii) To watch over the financial interests of the shareholders.

3. To Select Top Executive and Other Employees:

The Board is required to select the chief executive who may be either the Managing Director or
Manager. The Chief Executive, in turn, selects the subordinates subject to the approval of the Board.
The Board also appoints all officers of the company including Chairman, General Manager, Auditor,

Solicitor, Additional Directors, Alternate Directors and others.

4. To Approve Budgets and Programmes:

The Chief Executive like Managing Director or General Manager with the help of other executives

prepares budgets and programmes of work in advance and places the same before the Board of

Directors for approval. The Board approves the budgets and programmes after examining their

economies and diseconomies.

5. To Evaluate Executive Performance:

It is an important function of the Board to evaluate the progress of the company. The Board is to see

whether the work is proceeding in accordance with the objectives, plans, policies, programs and budg-

ets. It is the Board’s function to see that the executives are running the company efficiently. The Board
evaluates actual results against the budget standards. Budget is the basis of control. Board’s con-

trolling functions are essential to safeguard the interests of the shareholders.

6. To Declare Dividend:

The Board has to decide how much profits of the company should be distributed as dividend to

shareholders and how much of it should be retained as reserve in the interest of the company. The

Board pays the rate of dividend after considering the following factors – provision for depreciation,

bad debts, creation of reserves, provision for new projects, future financial commitments.

The Board had to balance the interests of shareholders who expect regular and fair returns on their

investment on the one hand and the growth of the company on the other.

7. To Issue Additional Securities:

Finance is essential for the survival and growth of business. It is the function of the Board to secure

necessary finance. Additional funds of the company may be raised by further issue of shares and
debentures. Issue of new securities must be approved by the company in general meeting.

8. To Delegate Authority:

It is the function of the Board to delegate authority to executive committee of directors, managing

director, secretary and others and to assume authority of the personnel when they vacate offices.

9. To Perform Statutory Functions:

The Board is required to issue prospectus or statement in lieu of prospectus, to allot, transfer and
forfeit shares according to the rules. The Board is also required to maintain accounts, hold different

types of company meetings, submit returns to the Registrar of Companies and pay corporate tax.

10. To Provide for Management Development:

For the continued successful existence of the company, it would be the duty of the Board to develop

future managers from within by initiating appropriate executive development programs, training,

delegation of authority etc.

11. To Put Questions and Suggestions:

Being detached from the operating details of the company, the Board can take a broad view of the

company’s affairs through searching questions and bright suggestions, which would guide the
company to march ahead in spite of changes of the time. Putting questions and giving suggestions

provide the management team a breadth of vision and imagination to the management team.

Appointment of Directors

• In public or a private company, a total of two-thirds of directors are appointed by the

shareholders. The rest of the one-third remaining members are appointed with regard to guidelines
prescribed in the Article of Association.

• In the case of a private company, their Article of Association can prescribe the method to appoint
any and all directors. In case the Articles are silent, the directors must be appointed by the
shareholders.

• The Companies Act also has a clause that permits a company to appoint two-thirds of the
company directors to be appointed according to the principle of proportional representation. This
happens if the company has adopted this policy.

• Nominee directors will be appointed by third party authorities or the Government to tackle
mismanagement and misconduct. The duties of directors are to act honestly, exercise reasonable
care and skill while performing their duties on behalf of the organization.

Appointment of Managing Directors

• A managing director must be an individual (a real person) and can be appointed for a maximum
period of five years.

• A managing director of a pre-existing company can be appointed as a managing director of

another company as long as the board of directors of the first company are aware and approve of
this new appointment.

Conditions for Appointing Directors

The following conditions are applicable when appointing a director:

1. He or she should not have been sentenced to imprisonment for any period, or a fine
imposed under a number of statutes.

2. They should not have been detained or convicted for any period under the Conservation of
Foreign Exchange and Prevention of Smuggling Activities Act, 1974.

3. He or she should have completed twenty-five (25) years of age, but be less than the age of
seventy (70) years. However, this age limit is not applicable if the appointment is approved
by a special resolution passed by the company in general meeting or the approval of the
Central Government is obtained.

4. They should be a managerial person in one or more companies and draws remuneration
from one or more companies subject to the ceiling specified in Section III of Part II of
Schedule XIII.
 5. He or she should be a resident of India. ‘Resident’ includes a person who has been staying
in India for a continuous period of not less than twelve (12) months immediately preceding
the date of his or her appointment as a managerial person and who has come to stay in
India for taking up employment in India or for carrying on business or vocation in India.

To ensure that the management of companies does not fall into the hands of undesirable

persons, the Companies Act disqualified the following persons to be appointed as directors:
(i) Persons of unsound mind,

(ii) Un-discharged insolvents,

(iii) Persons convicted and imprisoned for at least 6 months during the preceding five years,

(iv) Defaulters of all money on shares,

(v) Fraudulent declared by the court and

(vi) Persons holding more than 20 directorships of public companies.

A director will be required to vacate his office if he:

(i) Fails to obtain qualification shares within the prescribed time,

(ii) Absents himself from three consecutive Board “meeting or for a period of three months—

whichever is longer,

(iii) Fails to pay call money within six months,

(iv) Accepts any loan, guarantee or security for a loan from the company without the approval of the

Central Govt.,

(y) Fails to disclose at the Board meeting his interest in any contract made with the company, becomes

lunatic or insolvent, is convicted of any offence for a term of six months’ imprisonment, is declared
fraudulent by the Court.

Number of Directors:

• Every public company is required by law to have at least three directors and every private
company is required to have at least two directors. The maximum number is usually
determined by the Articles. Subject to this minimum, the company may, by ordinary
 resolution, increase or reduce the number of the directors. Any increase beyond the maximum

can be made only with the approval of the central govt.

• In a Board, there may be two kinds of directors—retiring directors, who are retired by rotation
and non-retiring directors, who are appointed by the debenture holders and by the govt. in
some cases. The retiring directors are eligible for reappointment—unless otherwise
disqualified. These directors are elected by the shareholders at the general meeting on the basis
of a separate resolution for each director.

• Moreover, the Board is empowered to appoint additional directors to function up to the date of
the next general meeting or alternate directors in place of those absent from the State for a
period of three months or more and to fill the casual vacancies of directorship caused by death,
physical inability or other disabilities.

• Of the total number of directors, two-thirds must retire by rotation. One-third of these two-
thirds must retire at every Annual General Meeting. The retiring directors are usually eligible
for re-election and they are almost always re-elected.

Remuneration of Directors:

• A director is not a servant of the company and in the absence of a special agreement is not
entitled to any remuneration for his services. Those who direct the policy of a corporation are
expected, both by law as well as public opinion, to act in the best interest of the corporation
and to abstain from seeking special personal advantages and profit at the expense of the
corporation. They are responsible for the performance of the company and hence they must be
compensated sufficiently.

• It is usual to compensate all directors whether executives or not for their activities. The method
of remuneration is usually by way of a fee for attending Board meetings. Those directors who
also perform managerial functions such as managing director or general manager receive in
addition for their special work separate salaries and sometimes special compensation is paid to
the Chairman of the Board of Directors.

• The remuneration of directors, managing director, whole-time directors is governed by

Sections 198 and 309 of the Companies Act. The total managerial remuneration payable to
 directors or managers must not exceed 11% of the net profits of the company. But if in any

financial year the company has no profits or its profits are inadequate, no remuneration must

be paid to any director or manager without previous approval of the central govt.

• A director may receive remuneration by way of a fee for each meeting of the Board or a
committee thereof, attended by him. A director who is either in the whole time employment of
the company or a managing director may be paid remuneration either by way of a monthly
payment or at a specified percentage of the net profits of the company. A whole-time director
or managing director cannot be paid more than 5% of the net profits for one such director and
more than 10 % for all of them together.

• If any director receives as remuneration any sum in excess of the percentages stated above, he
shall have to refund it to the company. Any increase in the remuneration of any director can be
made only with the approval of the central govt.

• The remuneration of directors of a public company and a private company which is a

subsidiary of a public company can be determined only by the articles of the company or by a
resolution of the general body or if the articles so require by a special resolution and the
directors themselves cannot fix the remuneration of all or any one of themselves.

• By an amendment it is provided that the remuneration payable to any such director shall be
inclusive of the remuneration payable to such director for services rendered by him in any
other capacity, except in the case of services rendered of a professional nature, provided the
director possesses the requisite qualification for the practice of the profession.

• As fringe benefits or perquisites such as rent- free accommodation, free medical aid etc., are
within the meaning of Sections 198 and 309, they can only be provided under authority of the
articles or resolution of the general meeting.

• The remuneration of directors may be paid out of capital if there are no profits. As the
remuneration of directors is an item of expenditure it does not depend on the existence of
profits. There is an express provision in the Companies Act for the payment of remuneration—
not exceeding Rs. 50,000—in case of absence or inadequacy of profits.
Members of the Board:

• The Board of Directors is the topmost organ of the company. Drucker has rightly pointed out
that the Board must provide leadership to the company. To perform its managerial functions it
must be properly constituted.

• The number of members of the Board will obviously vary according to the nature of the busi-
ness, subject to the minimum laid down by the law—three in case of a public company and
two in case of a private company. The maximum number of directors is 12 without the
approval of the central govt. Naturally a large company will need a large board and a small
company a small board. As far as possible different groups of shareholders should be
represented on it. It should also include some persons with special business knowledge and
training.

• The Board consists of two types of directors— Inside and Outside directors. The inside or
executive directors are fulltime executives and tend to represent the views of management. The
outside or non-executive directors are generally part time directors who have no association
with the company other than as directors.

• The outside directors are usually drawn from different walks of life, but mainly lawyers,
bankers and businessmen fill most of the seats. They are chosen because of some special
knowledge or skill which they are able to contribute for the benefit of the company. There
should be a proper balance between Inside and Outside directors.

Tenure of Office:

Directors should not hold office for a longtime because in such a case vested interests would develop.
They should be compelled to retire by rotation. At every Annual General Meeting, not less than two-

thirds of the total number of directors of a public company or its subsidiary is liable to retire by

rotation. One-third of these retiring directors are to retire from office at every Annual General

Meeting.

Functions of Top Management:

Top management who represents the Board of Directors and the fulltime managing director is
involved in the following twelve responsibilities:
1. Determination of company objectives.
2. Long range planning to attain objectives.

3. Establishment of basic policies to implement the long range plans.

4. Development of an organisation structure and its continuous modification to conform to future

plans.

5. Co-ordination of activities of the enterprise.

6. Selection of qualified personnel for key positions.

7. Provision for a continuous flow of qualified personnel.

8. Adoption of effective means of control.

9. Setting of short-term goals.

10. Appraisal of overall results and current performance.

11. Application of corrective measures as performance falls short of pre-deter- mined goals.

12. Prudent management of the corporate income, that is, that portion of the income available for

discretionary action.

The functions of top management have been grouped by Litterer in three classes:

(i) Decision-making:

They make all the basic decisions committing the resources and direction of the firm.

(ii) Monitoring:

They are responsible for seeking that work is progressing in tune with objectives laid down and

allocation made. Control systems may be established to supply relevant information and others may be

placed under obligation to top management.

(iii) Link with Outsiders:

Top management link the organisation and its environment on such matters as acquiring basic
resources and is being held accountable by other parties (Govt. or Public) for the fulfillment of

obligations.
Powers of Directors:

• Formerly the primary organ of the company was considered to be the general meeting, the
Board of Directors being regarded merely as the company’s agents or servants subject to the
dictates of the general meeting.

• Today, directors have ceased to be regarded as mere agents of the company, the modern
concept being that both the members in general meeting as well as the Board of Directors are
primary organs of the company and that the company’s powers are divided between these two
organs.

• The ultimate control is retained by the general meeting. This control, however, can only be
exercised through its powers to amend the Articles, by taking away some of the powers of the
directors and by removing the directors and substituting others more to their liking.

• Until this control is exercised, however, the directors may disregard the wishes and instructions
of the members in those matters which are not specifically reserved to the general meeting
either by statute or the Articles. Thus, the residuary powers are with the directors.

• A director has no power to act in his individual capacity unless he is vested with authority to
do so by the Board of Directors or unless the Articles provide him with any power. So the
rights and powers of the directors under the Companies Act mean the rights and powers of the
Board of Directors.

• The general powers of the Board are specifically mentioned is Section 291. This section gave
statutory recognition to the principle that subject to the specific exceptions, the directors of the
company as its governing body are entitled to exercise all the powers of the company. The Act
also specifies certain powers which can only be exercised by the Board at a meeting of the
Board.

These relate to the:

(i) Power to make calls on shareholders in respect of money unpaid of their shares,

(ii) Power to issue debentures,

(iii) Power to invest the funds of the company,

(iv) Power to make loans.

Other powers which are usually vested in the directors by the Articles are:

(i) Power to call the general meeting.

(ii) Power to provide the safe custody of the seal.

(iii) Power to authorize by a resolution of the Board the affixing of the seal to any instrument and

(iv) Power of filling casual vacancies on the Board.

Duties of Directors

• Deciding the company’s future goals and priorities.

• Communicating with the stakeholders to inform them of the company’s growth and
ensuring their input plays a part in the company’s future.

• Checking the external market conditions to ensure that the company is headed in the right
direction.

• Monitoring the performance of employees and encouraging them to achieve their targets is
one of the primary duties of directors.

• Setting the budget for the company’s operations and keeping tabs on the profit and loss
margin.

• Reporting back to the stakeholders at the Annual General Meeting (AGM).

• Establishing rules and regulations and forming policies that everyone in the company
would follow.

• Making sure the organisation has a good system of governance and that there is no gap in
communication.

• Being in an advisory capacity to the CEO.

• Doing effective risk management assessment

The Companies Act, thus, impose the following obligations on the directors:

(i) Every director of a company, directly or indirectly, interested in a contract with the company, shall

disclose the nature of his interest at the meeting of the Board of Directors.

(ii) Every director shall, within 20 days of his appointment to such office, disclose to the company the

particulars specified under Section 303(1), i.e., name, surname, address, nationality, occupation and if

he holds office of managing director, manager or secretary, the particulars of such office held by him.

How Director can resign:

 • Step 1 :Director to company - Director shall give a notice in writing to the company and the
Board about his Resignation
• Step 2:Company to ROC- company shall intimate the Registrar about the resignation in such
manner, within 30 days from receipt of such notice DIR 12 and shall also place the fact of such
resignation in the report of directors laid in the immediately following general meeting by the
company. [ Section 168(1)]. It also to be post in website.
• Step 3 : Director to ROC -Director shall also forward a copy of his resignation along with
detailed reasons in form no DIR 11 to the Registrar within thirty days of resignation in such
manner as may be prescribed.[ proviso to section 168(1)] [ Rule 16]
Effective of Resignation
The resignation of a director shall take effect from  The date on which the notice is received
by the company or  The date, if any, specified by the director in the notice, whichever is later.
Liability of the resigned director
The director who has resigned shall be liable even after his resignation for the offences which
occurred during his tenure.
Who and how the vacancy to be filled?
The vacancy so caused due to the resignation shall considered as casual vacancy u/s 161(4), to be
filled up by the BOD in the manner as prescribed in that section.

Where all the director resigned/ vacate from the company?

Where all the directors of a company resign from their offices u/s 168, or vacate their offices under
section 167, the promoter or, in his absence, the Central Government shall appoint the required
number of directors who shall hold office till the directors are appointed by the company in general
1meeting.
Removal of directors [ Section 169]
Applicability: To all the company i.e. both public and private company
Basic condition
 Removal by ordinary resolution in the GM.
 Article cannot ask for the special resolution for removal of director
 Section 169 is the statutory right of the memorandum, that cannot be
Procedure
Step 1 : Special notice to be issued : A special notice shall be required of the intention to remove the
director or to appointment some other person in his place [( section 169(1)}
Step 2 : Copy to all member and director who is going to b removed : On receipt of notice ,company
shall forthwith send a copy to all the member and the concerned director
Step 3 : Right to be heard : The director shall have right to be heard on the resolution at the meeting
Step 4 : Director power to give representation : The director sought to be remove, can make an
representation in writing against and request company to notify it to the member { section 169(4)}
Step 5 : Sending representation to all member and to be read out at meeting : Company is duty bound
to send such representation to the shareholder. If the representation is not sent to the member because
they were received too late or because of company default, director may require that representation to
be read out in the general meeting. However, such representation shall not be read out, if on the
application of the member or aggrieved party, Tribunal satisfied that, right conferred by this sub
section has been abused and to secured needless publicity for defamatory matter. {proviso to section
169(4)}
Step 6: Passing resolution for removal: An ordinary resolution to that effect to remove that director
shall be passed at GM.

Company Meetings:

There are eight main types of company meetings.

• Statutory Meeting
• Annual General Meeting
• Extraordinary General Meeting
• Meeting of the Board of Directors
• Class Meeting
• Meeting of Creditors
 • Meeting of Debenture Holders
• Meeting of Creditors and Contributories.
• Company Meeting

1. Statutory Meeting:
• Every public company limited by shares—and every company limited by guarantee and
having a share capital—must, within a period of not less than one month and not more than
six months from the date at which the company is entitled to commence business, hold a
general meeting of the members which is to be called the Statutory Meeting.
• The members of the company who are present in the Statutory Meeting are at liberty to
discuss any matter relating to the formation of the company or arising out of the Statutory
Report, whether previous notice has been given or not. But no resolution can be passed of
which notice has not been given in accordance with the provisions of the Act. If default is
made in complying with the provisions of Section 165, every Director or any other officer
of the company who is in default shall be punishable with a fine which may extend to Rs.
500.

• Statutory Meeting is the first general meeting which a public company is required to hold
within a period of not less than one month nor more than six months from the date at which the
company becomes entitled to commence business. The main purpose of this meeting is to give
the members a general idea about the progress made by the company since its formation.

2. ANNUAL GENERAL MEETING (AGM) [SECTIONS 96, 97, 99 & 121]

• As per Companies Act, an annual general meeting must be held by every company once a year
without fail. There cannot be a gap of more than 15 months between two AGMs.

• However, the first AGM of a company can be held at any date, within a period of 18 months,
since the date of incorporation of the company. Annual general meetings help members
understand the company’s rate of growth and potential for improvement.

• An AGM gives insights into what steps made the company more successful and which steps
caused loss. it helps the members and the board to decide the future course of action. An AGM
must be held on a working day.

• If the Government declares a public holiday on the day of the meeting, it will be considered a
working day by the members attending the meeting. The annual general meeting can be held at
the registered office of the company.

• Annual General Meeting is a general meeting of the members of the company which must be
held every year and not more than 15 months must elapse between the date of one Annual
General Meeting and that of the next. But the first Annual General Meeting may be held within
 18 months from the date of the incorporation of the company and the company need not hold

any Annual General Meeting in the year of its incorporation or in the following year.

3. Meetings of the Board:

• A meeting of the Board of Directors of every company must be held at least once in every
three months and at least four such meetings must be held in every year. A meeting is a
gathering of some persons by previous notice for transacting some lawful business by passing
resolutions. A notice of every Board meeting must be given to every director.

• The quorum for the Board meeting is one-third of the total number of directors or two
directors, whichever is greater. Decisions at Board meeting are arrived at on the basis of
majority vote in respect of routine matter but decision on matters of policies of vital
importance requires unanimity. If a decision is taken by majority vote, it is compulsory to
record in the minutes the names of the directors who voted against the resolution.

• All meetings of the Board must be held during the business hours on a day which is not a
public holiday. If any meeting could not be held for want of quorum, then the meeting would
stand adjourned to the same day the next week and in case such day is a public holiday, the
next day and if that too is a public holiday, then on a subsequent working day. If at the
adjourned meeting the required quorum is not present, then the members present at the meeting
would be the quorum and the business would be transacted.

• To enable members of the company to exercise some degree of control and to express their
views on the working of the company, the law provides for the holding their meetings. There
are three kinds of meetings of the members and are known as General Meetings. These are—
Statutory Meeting, Annual General Meeting and Extra-ordinary General Meeting.

Board Meetings

• The board of directors is the supreme authority in a company and they have the powers to take all
major actions and decisions for the company. The board is also responsible for managing the
affairs of the whole company.

• For the effective functioning and management, it is imperative that board meetings be held at
frequent intervals. For this, Section 173 of Companies Act, 2013 provides –
 • In the case of a Public Limited Company, the first board meeting has to be held within the first 30
days, since the incorporation date. Additionally, a minimum of 4 board meetings must be held in a
span of one year. Also, there cannot be a gap of more than 120 days between two meetings.

• In the case of small companies or one person company, at least two meetings must be conducted,
one in each half of the financial year. Additionally, the gap between the two meetings must be at
least 90 days. In a situation where the meeting is held at a short notice, at least one independent
director must be attending the meeting.

Notice of Board Meeting

The notice of Board Meeting refers to a document that is sent to all directors of the company. This
document informs the members about the venue, date, time, and agenda of the meeting. All types of
companies are required to give notice at least 7 days before the actual day of the meeting.

Quorum for the Board Meeting

The quorum for the Board Meeting refers to the minimum number of members of the Board to conduct a
valid Board Meeting. According to Section 174 of Companies Act, 2013, the minimum number of
members of the board required for a meeting is 1/3rd of a total number of directors.

At any rate, a minimum of two directors must be present. However, in the case of One Person Company,
the rules of Section 174, do not apply.

Participation in Board Meeting

All directors are encouraged to actively attend board meetings and in case that’s not possible at least
attend the meetings through a video conference. This is so that all directors can take part in the decision-
making process.

Requirements for Conducting a Valid Board Meeting

• Right Convening Authority

The board meeting must be held under the direction of proper authority. Usually, the company
secretary (CS) is there to authorize the board meeting. In case the company secretary is unavailable, the
predetermined authorized person shall act as the authority to conduct the board meeting.

• Adequate Quorum
The proper requirements of the quorum or the minimum number of Directors required to conduct a Board
meeting must be present for it to be considered a valid board meeting.

• Proper Notice
Proper notice is one of the major requirements to be fulfilled when planning a board meeting. Formal
notice has to be served to all members before conducting a board meeting.

• Proper Presiding Officer

The meeting must always be conducted in the presence of a chairman of the board.

• Proper Agenda
Every board meeting has a set agenda that must be followed. The agenda refers to the topic of discussion
of the board meeting. No other business, which is not mentioned in the meeting must be considered.

4. Extraordinary General Meeting

• An Extraordinary General Meeting (an EGM) can be defined as a meeting of shareholders which
is not an Annual General Meeting(an AGM). It is held when some urgent issue becomes about the
company arises or any situation of crisis and it requires the input of all senior executives and the
Board.

• An Extra-ordinary General Meeting is a meeting of the company’s members, usually called by

the directors for transacting some special or urgent business which must be done before the
next Annual General Meeting.

• As we know, an EGM is held in case of emergency situations and requires the attention of senors
execs and the Board. Members, shareholders, and execs must be instructed on the purpose of the
meeting so they have time to prepare their valuable input and then, collectively decide further
course of action.

• Any general meeting of the company which is not an Annual General Meeting or a Statutory
Meeting is called Extraordinary General Meeting. An Extraordinary General Meeting is held
for dealing with some business of special or extraordinary nature and which is outside the
scope of the Annual General Meeting. This meeting is also held to transact some urgent
business that cannot be deferred till the next Annual General Meeting. This meeting may be
called by the Directors or requisitioned by the member’s according to Sec.169 of the
Companies Act, 1956.

• The Board of Directors can be compelled to hold Extraordinary General Meeting upon request
or requisition made for it, under the following conditions:

• (a) The requisition must be signed by members holding at least 1/10th of the paid- up capital of
the company, in the case of companies having a share-capital; and by members holding at least
1/10th of the total voting power in other cases.

• (b) The requisition must set out the matters which will be considered at the meeting.
 • (c) The requisition must be deposited at the Registered Office of the company. The Board
must, within 21 days of the receipt of a valid requisition, issue a notice for the holding of the
meeting on a date fixed within 45 days of the receipt of the requisition. If the Board does not
hold the meeting as aforesaid, the requisitionists can call a meeting to be held on a date fixed
within 3 months of the date of requisition. Resolutions, properly passed at a meeting called by
the requisitionists, are binding on the company.

5. Class Meeting: These meetings are held by a particular class of shareholders for the purpose of
effecting variation in the Articles in respect of their rights and privileges or for conversion of one
class into another. The provision for variation must be contained in the Memorandum or Articles
and this variation must not be prohibited by the terms of issue of shares of that particular class.
Such resolutions are to be passed by three-fourth majority of the members of that class.

6. Meeting of Creditors: These meetings are called when the company proposes to make a scheme
of arrangement with its creditors. The Court may order a meeting of the creditors or a class of
creditors on the application of the company or of liquidator in case of a company being wound-up.
Such a meeting is held and conducted in such a manner as the Court directs. If arrangement is
passed by a majority of three-fourth in value of creditors and the same is sanctioned by the Court,
it is binding on all the creditors.
7. Meeting of Debenture Holders: These meeting are called according to the rules and regulations
of the Trust Deed or Debenture Bond. Such meetings are held from time to time where the
interests of debenture holders are involved at the time of re-organisation, reconstruction,
amalgamation or winding-up of the company. The rules regarding the appointment of Chairman,
notice of the meeting, quorum etc. are contained in the Trust Deed.
8. Meeting of Creditors and Contributories: These meetings are held when the company has gone
into liquidation to ascertain the total amount due by the company to its creditors. The main
purpose of these meetings is to obtain the approval of the creditors and contributories to the
scheme of compromise or rearrangement to save the company from financial difficulties.
Sometimes, the Court may also order for such a meeting to be held. When a company desires to
vary the rights of debenture-holders, such meetings are to be held according to the rules laid down
in the Debenture Trust Deed. They are also held to enable the company to issue new debentures or
to vary the rate of interest payable to debenture-holders. The term “contributory” covers every
person who is liable to contribute to the assets of the company when the company is being wound-
up.

Auditor:
What Is an Auditor?
An auditor is a person authorized to review and verify the accuracy of financial records and ensure
that companies comply with tax laws. They protect businesses from fraud, point out discrepancies
in accounting methods and, on occasion, work on a consultancy basis, helping organizations to spot
ways to boost operational efficiency. Auditors work in various capacities within different industries.

KEY TAKEAWAYS

• The main duty of an auditor is to determine whether financial statements follow generally
accepted accounting principles (GAAP).
• The Securities and Exchange Commission (SEC) requires all public companies to conduct
regular reviews by external auditors, in compliance with official auditing procedures.
• There are several different types of auditors, including those hired to work in-house for
companies and those who work for an outside audit firm.
• The final judgment of an audit report can be either qualified or unqualified.2

Definition of an Auditor

An independent person can provide true and fair view about the performance of’ any concern. He can
note the accounting standards, management policies, and other rules and regulations have been
followed. Let discuss various auditor definition below:

C. De Paula says that auditor is the individual or firm carrying out the audit of the enterprise and the
partners of such individual or in such firm.

E.R Martin says that an auditor is a person appointed to examine the books of accounts and the
accounts of a registered company and to report upon them to company members.

According to International Standard on Auditing the auditor means the person with final
responsibility for the audit. Audit firm means either the partners of å firm providing audit services or a
sole practitioner providing audit sanitizes, as appropriate.

Appointment of an Auditor

• Appointment by Directors

1. FIRST AUDITORS: Directors shall appoint the first auditor or auditors of a company
within sixty days from the date of incorporation of company. The auditors so appointed
shall hold office until conclusion of first annual general meeting.
2. CASUAL VACANCY: The directors repay fill any casual Vacancy in the office of
auditor within 30 days of its occurrence. While any such vacancy continues the
surviving or continuing auditor or auditors, if any, may act as auditor. Any auditor
appointed to fill in any casual vacancy shall hold office-until the conclusion of next
annual general meeting.
• Appointment by Shareholders

3. FIRST AUDITORS: The shareholders shall appoint the first auditors of a company
within 120 days from the date of incorporation if directors fail to exercise their powers
 of appointing the first auditors. The auditors so appointed shall hold office until the end
of the first annual general meeting.
4. ANNUAL APPOINTMENT: Every company shall at each annual general meeting
appoint auditors to hold office from the conclusion of x that meeting until conclusion of
next annual general meeting. A firm of auditors may be appointed as auditors of
company. All persons shall be treated as auditors who were partners in the firm at the
time of appointment.
A chartered accountant or cost and management accountant can be appointed as auditor of a private
company having share capital of Rs. 0.5 million or more as per provisions of Income Tax Ordinance.

Procedure for Appointment of First Auditor

1. CONSENT OF AUDITOR: Consent from proposed auditors is obtained first. He

should be chartered accountant in case of public company and any other person in case
of other company.
2. BOARD OF DIRECTORS’ APPROVAL: A board of directors meeting is convened
within 60 days of incorporation of the company to consider and approve the
appointment of first auditors. The approval may be given through a resolution
circulated among all directors and signed by
3. FILING OF RETURN: Particulars of auditors are filed on Form 29 in days of
appointment. Copy of consent of auditors is also enclosed with return. Bank challan of
Rs.200 being filing fee is charged.
4. REGISTER OF OFFICERS: The particulars of auditors are recorded in the register
of officers maintained by the company under section 205 of the Companies Ordinance
1984.
5. ADVICE TO AUDITORS: Auditors are advised of their appointment as auditors of
the company.
Remuneration of an Auditor:

1. REMUNERATION IS FIXED BY DIRECTORS: The directors may appoint the

auditor or auditors. The appointing authority has right to fix remuneration. The
directors of the company have bowers to fix the remuneration.
2. REMUNERATION IS FIXED-BY SHAREHOLDERS: The shareholders can
appoint auditor or auditors at annual general meeting. The appointing authority has
right to fix remuneration. The shareholders can decide about the remuneration of
auditor or auditors.
3. REMUNERATION IS FIXED BY COMMISSION: The Securities and Exchange
Commission of Pakistan may appoint auditor or auditors. In this case the Commission
has right to fix remuneration. The Securities and Exchange Commission of Pakistan has
powers to fix remuneration of auditor or auditors.

Removal of an Auditor:

A company can remove its auditor through special resolution passed with the support of three-fourth
majority of the members in general meeting. The company has no power to appoint the replacement of
the auditor because the commission has got the powers to appoint his replacement.
Procedure for Removal of an Auditor

1. BOARD MEETING: The proposal for removal of auditors is considered and approved
by the directors in the board of directors meeting.
2. NOTICE TO AUDITORS: Notice for removal is given to the auditors.
3. REPRESENTATION BY AUDITOR: The auditor is allowed to make representation
against his removal.
4. NOTICE TO MEMBERS: Notice accompanied with representation is sent to the
members. The notice also contains proposal of recommending appointment of new
auditor to the commission.
5. GENERAL MEETING: The proposal of removal of auditors is considered and
approved by members as a special resolution. The chairman may allow the auditors to
present his representation. The members also approve recommendation for appointment
of new auditors to the commission.
6. NOTICE TO COMMISSION: The Company has to give notice within one week of
the removal of the auditors.
7. APPOINTMENT OF AUDITOR: Application is made for appointment of new
auditors in place of removed auditors. It would be appropriate if the name of the
proposed auditors is also given along with proposed remuneration Bank challan of
Rs.500 is enclosed.
8. REMUNERATION OF AUDITOR: The remuneration of the auditor appointed under
the situation is also fixed by the commission.
9. REGISTER OF OFFICERS: on receipt of the appointing auditors, the notification is
made on form 29 within 14 days and particular’s’ of such auditors are entered in
register of officers.
10. REMOVAL OF EXISTING AUDITORS: Removal of existing auditors is notified
on Form 29 within 14 days and copy of special resolution on form 26 within 15 days.
Bank challan of Rs.400 is enclosed.
An auditor can protect the rights of people who are away from business. The shareholders appoint the
auditors so they report about the performance of management. The law states the rights, duties, and
liabilities of auditors. They claim fee from their clients for their services. In fact audit is accountability
of management to save the owners from losses.
Types of Auditors:

• Internal auditors are hired by organizations to provide in-house, independent, and objective
evaluations of financial and operational business activities, including corporate governance.
They report their findings, including tips on how to better run the business, back to senior
management.
 • External auditors usually work in conjunction with government agencies. They are tasked
with providing an objective, public opinion concerning the organization's financial statements
and whether they fairly and accurately represent the organization's financial position.
• Government auditors maintain and examine records of government agencies and of private
businesses or individuals performing activities subject to government regulations or taxation.
Auditors employed through the government ensure revenues are received and spent according
to laws and regulations. They detect embezzlement and fraud, analyze agency accounting
controls, and evaluate risk management.
• Forensic auditors specialize in crime and are used by law enforcement organizations.

Auditor Qualifications:

• External auditors working for public accounting firms require a Certified Public
Accountant (CPA) license, a professional certification awarded by the American Institute of
Certified Public Accountants. In addition to this certification, these auditors also need to
obtain state CPA certification. Requirements vary, although most states do demand a CPA
designation and two years of professional work experience in public accounting.
• Qualifications for internal auditors are less rigorous. Internal auditors are encouraged to get
CPA accreditation, although it is not always mandatory. Instead, a bachelor's degree in
subjects such as finance and other business disciplines, together with appropriate experience
and skills, are often acceptable.

Special Considerations

• Auditors are not responsible for transactions that occur after the date of their reports.
Moreover, they are not necessarily required to detect all instances of fraud or financial
misrepresentation; that responsibility primarily lies with an organization's management team.
• Audits are mainly designed to determine whether a company’s financial statements are
“reasonably stated.” In other words, this means that audits do not always cover enough
ground to identify cases of fraud. In short, a clean audit offers no guarantee that an
organization’s accounting is completely above board.

What is Public Inteíest Litigation?

Public inteíest Litigation (PIL) means litigation filed in a couít of law, foí the píotection of “Public Inteíest”.
Any matteí wheíe the inteíest of the public at laíge is affected can be íedíessed by filing a Public Inteíest
Litigation in a couít of law such as Pollution, ľeííoíism, Road safety, Constíuctional hazaíds, etc.

• ľhe expíession ‘Public Inteíest Litigation’ has been boííowed fíom Ameíican juíispíudence, wheíe
it was designed to píovide legal íepíesentation to píeviously uníepíesented gíoups like the pooí,
the íacial minoíities, unoíganized consumeís, citizens who weíe passionate about the
enviíonmental issues, etc.
• PIL is not defined in any statute oí in any act. It has been inteípíeted by judges to consideí the
intent of the public at laíge. It is the poweí given to the public by couíts thíough judicial activism.
Read in detail on the Judicial Activism on the linked page. Howeveí, the peíson filing the petition
 must píove to the couít’s satisfaction that the petition is being filed foí public inteíest and not just
as a fíivolous litigation by a busy body.
• Some of the matteís which aíe enteítained undeí Public Inteíest Litigation aíe Neglected Childíen,
Bonded Labouí matteís, Atíocities on Women, Non-payment of minimum wages to woíkeís,
exploitation of casual woíkeís, food adulteíation, Enviíonmental pollution, and distuíbance of
ecological balance, Maintenance of heíitage and cultuíe, etc.

Public Inteíest Litigation (PIL) is intíoduced in a couít of law not by the aggíieved paíty but by a píivate
paíty oí by the couít itself.

• PILs have become a potent tool foí enfoícing the legal obligation of the executive and the
legislatuíe.
• ľhe chief objective behind PILs is ensuíing justice to all and píomoting the welfaíe of the people.
• It is geneíally used to safeguaíd gíoup inteíests and not individual inteíests, foí which
Fundamental Rights have been píovided.
• ľhe Supíeme Couít of India and the High Couíts have the íight to issue PILs.
• ľhe concept of PILs stems fíom the poweí of judicial íeview.
• ľhe concept of PILs has diluted the píinciple of locus standi, which implies that only the
peíson/paíty whose íights have been infíinged upon can file petitions.
• It has most ideally and commonly been used to challenge the decisions of public authoíities by
judicial íeview, to íeview the lawfulness of a decision oí action, oí a failuíe to act, by a public body.
• PILs have played an impoítant íole in India’s polity. ľhey have been íesponsible foí some
landmaík judgements in India such as the banning of the instant tíiple talaq, opened up the dooís
of the Sabaíimala and the Haji Ali shíines to women, legalised consensual homosexual íelations,
legalised passive euthanasia, and so on.

Procedure to File PIL in India

Any Indian citizen oí oíganisation can move the couít foí a public inteíest/cause by filing a petition:

1. In the SC undeí Aíticle 32

2. In the High Couíts undeí Aíticle 226

ľhe couít can tíeat a letteí as a wíit petition and take action on it. ľhe couít has to be satisfied that the
wíit petition complies with the following: the letteí is addíessed by the aggíieved peíson oí a public-
spiíited individual oí a social action gíoup foí the enfoícement of legal oí constitutional íights to any
peíson who, upon poveíty oí disability, aíe not able to appíoach the couít foí íedíess. ľhe couít can also
take action on the basis of newspapeí íepoíts if it is satisfied with the case.

History of Public Interest Litigation (PIL) in India

In 1979, Kapila Hingoíani filed a petition and secuíed the íelease of almost 40000 undeítíials fíom Patna’s
jails in the famous ‘Hussainaía Khatoon’ case. Hingoíani was a lawyeí. ľhis case was filed in the SC
befoíe a Bench led by Justice P N Bhagwati. Hingoíani is called the ‘Motheí of PILs’ as a íesult of this
successful case. ľhe couít peímitted Hingoíani to puísue a case in which she had no peísonal locus
standi making PILs a peímanent fixtuíe in Indian juíispíudence.
Justice Bhagwati did a lot to ensuíe that the concept of PILs was cleaíly enunciated. He did not insist on
the obseívance of píoceduíal technicalities and even tíeated oídinaíy letteís fíom public-minded individuals
as wíit petitions. Justice Bhagwati and Justice V R Kíishna Iyeí weíe among the fiíst judges in the countíy
to admit PILs.

Significance of Public Interest Litigation (PIL) in India

ľhe oíiginal puípose of PILs has been to make justice accessible to the pooí and the maíginalized.

• It is an impoítant tool to make human íights íeach those who have been denied íights.
 • It democíatizes the access of justice to all. Any citizen/agency who is capable can file petitions on
behalf of those who cannot oí do not have the means to do so.
• It helps in judicially monitoíing state institutions like píisons, asylums, píotective homes, etc.
• It is an impoítant tool in judicial íeview.

Criticism of Public Interest Litigation (PIL) in India

Off late, PILs have become a tool foí publicity. People file fíivolous petitions which íesult in the wastage of
time of the couíts. People have used them with a political agenda as well. ľhey unnecessaíily buíden the
judiciaíy. Even if the petition is eventually dismissed, the couíts spend time and effoít on them befoíe
dismissing them.
At píesent, only judges have the poweí to dismiss a petition. ľhe Registíy of the SC oí HC only ensuíes
that the technical íequiíements of filing a petition aíe fulfilled. As a íesult of which petitions aíe admitted to
the couít iííespective of the meíits of the case.

Way Foíwaíd with Public Inteíest Litigation

1. ľhe couít should not allow its píocess to be abused by politicians and otheís to delay legitimate
administíative action oí to gain political objectives.
2. ľhe PIL activists should be íesponsible and accountable.
3. ľhe couít must be caíeful to see that the petitioneí must be acting bona fide and not foí peísonal
gain.
4. In shaping the íelief, the couít must take into account its impact on those public inteíests.
5. Since it is an extíaoídinaíy íemedy available at a cheapeí cost to all citizens of the countíy, it
should not be used by all litigants as a substitute foí oídinaíy ones oí as a means to file fíivolous
complaints.

Cuííent Affaiís íelated to PIL in India

Vaíious news keeps on íevolving PIL in India as it is one of the most accessible public instíuments thatcan
be used to seek judicial action. Check the latest news íelated to PIL below:

• PIL was moved to quash the PM CARES fund

• Public Inteíest Litigation has been filed in the Supíeme Couít of India seeking diíections to the
Goveínment of India to make aííangements in oídeí to íescue and bíing the Indian Migíants
stíanded in Gulf Countíies
• A petition has been filed befoíe the Supíeme Couít of India, seeking diíections to States, theií
Municipal authoíities and local self-goveínment authoíities to ensuíe the píotection of íights of the
sanitation woíkeís who aíe also essential seívice píovideís amidst the nationwide lockdown in
wake of the COVID-19 outbíeak