HOW TO FORM A COMPANY

(1)-How to form a Company
(2)-How to form a Partnership Firm
(3)-How to form a Club
(4)-How to form a Trust


1. Promotion Stage.
2. Incorporation Stage.
3. Commencement of business stage.

1. Promotion Stage: The stage of conceiving an idea and its working is termed as promotion of a company. The person involved in this task is termed as “Promoter”. There are certain important decisions which are taken before the formation of the company. There first important matter to decide could be either :-

(1) To start a new business altogether, or
(2) To acquire an already running business, if it is available at considerable attractive terms and conditions. Some time it does happen that some people may start a business without having sufficient knowledge or sufficient experience or sufficient funds and later on they decide to dispose of that business to avoid huge losses. In such a case it may be better to acquire a running business with favorable terms and conditions and it may prove to be a good decision.

The other important matters be decided before the formation of the company could be the decision regarding the product to be produced, the size of the company, the capital involved in the project, the sources of the capital and whether it shall be a Private Company or a Public Company.

Any of the above decisions i.e., to start a new business altogether or to acquire an already running business, along with the other matters shall have to be taken by some person or persons who are at the helm of the affairs. They are called PROMOTERS.

Where it has been decided to form a Private Company 2 persons and where it has been decided to form a Public Company at least 7 persons shall subscribe their names to a Memorandum of Association and they shall also comply with the other formalities in respect of the registration of the company under the Indian Companies Act, 1956.

Document to be filed with the Registrar: It is desirable to ascertain from the Registrar (Registrar of the State in which the Registered office of the company shall be situated) of the companies that whether the proposed name of the company shall be approved if registration is sought for a new company with such name.

Where already a company with such name is existing, it shall not be allowed by the Registrar, because tow companies with the similar name cannot be registered.

But if he says yes, because no other company is registered with that name, an application for the registration of the company should be presented to the Registrar of the State in which the Registered office of the company shall be situated. The appl9ication along with necessary fee shall be presented along with the following documents :

(1) The Memorandum of Association.
(2) The Articles of Association, if any which should be signed by the subscribers to the Memorandum of Association.
(3) Any agreement with the individual persons who are proposed to e appointed as Managers, Directors or Managing Director of the company.
(4) A statement of the nominal capital of the Company.
(5) A notice of address of the registered office of the company.
(6) A list of the Directors who have agreed to become the first Directors of the company along with their consent to act as Directors and to take up the qualification shares of the company in the case of a public company.
(7) A declaration that all the requirements of the Companies Act have been complied with, shall also be submitted, which shall be signed by one nay of the following persons :

(i) An advocate of the Supreme Court or High Court, or
(ii) An attorney or a pleader entitled to appear before a High Court, or
(iii) A Secretary or a Chartered Accountant in whole time practice in India, who is engaged in the formation of the company, or
(iv) A person named in the Articles as a Directors, Manager or Secretary of the company.

Where the Registrar of Companies is satisfied that all the requirement have been complied with, he will register the company and enter the name of the company in the Register of Companies.

2. Incorporation Stage : Where the Registrar of Companies is satisfied that all the requirements have been complied with, he will register the company, and enter the name of the company in the Register of Companies.

When a company is registered and its name in entered in the register of companies, the Registrar will issue a Certificate of Incorporation in which he certifies that the company is incorporated under his hand and in the case of a limited company that the company is a Limited Company.

(A) -Effects of Registration and Incorporation of A Company
(B) -Distinction Between A Public Company And a Private Company
(C) -Company Law - Tips for Lawyers and Layman .

A -When a company is registered and a Certificate of Incorporation is issued by the Registrar, it shall have the following effects :

* The company shall become s Separate Legal Entity from the date mentioned on the Certificate of Incorporation, which is considered as date of birth of the company.
* The Company acquires Perpetual Succession. The members may come, members may go, but it goes for ever.
* The company becomes the owner of its property and the Promoters of Shareholders have the right to share in the profits of the company.
* The company can sue and can be sued in its own name.

B - When a company is registered and a Certificate of Incorporation is issued by the Registrar, it shall have the following effects :

* The company shall become s Separate Legal Entity from the date mentioned on the Certificate of Incorporation, which is considered as date of birth of the company.
* The Company acquires Perpetual Succession. The members may come, members may go, but it goes for ever.
* The company becomes the owner of its property and the Promoters of Shareholders have the right to share in the profits of the company.
* The company can sue and can be sued in its own name.

C - Distinction Between A Public Company And a Private Company – Following are the main points of difference between a Public Company and a Private Company :-

1. Minimum Paid-up Capital : A company to be Incorporated as a Private Company must have a minimum paid-up capital of Rs. 1,00,000, whereas a Public Company must have a minimum paid-up capital of Rs. 5,00,000.

2. Minimum number of members : Minimum number of members required to form a private company is 2, whereas a Public Company requires atleast 7 members.

3. Maximum number of members : Maximum number of members in a Private Company is restricted to 50, there is no restriction of maximum number of members in a Public Company.

4. Transerferability of shares : There is complete restriction on the transferability of the shares of a Private Company through its Articles of Association , whereas there is no restriction on the transferability of the shares of a Public company

5 .Issue of Prospectus : A Private Company is prohibited from inviting the public for subscription of its shares, i.e. a Private Company cannot issue Prospectus, whereas a Public Company is free to invite public for subscription i.e., a Public Company can issue a Prospectus.

6. Number of Directors : A Private Company may have 2 directors to manage the affairs of the company, whereas a Public Company must have atleast 3 directors.

7. Consent of the directors : There is no need to give the consent by the directors of a Private Company, whereas the Directors of a Public Company must have file with the Registrar a consent to act as Director of the company.

8. Qualification shares : The Directors of a Private Company need not sign an undertaking to acquire the qualification shares, whereas the Directors of a Public Company are required to sign an undertaking to acquire the qualification shares of the public Company .


9. Commencement of Business : A Private Company can commence its business immediately after its incorporation, whereas a Private Company cannot start its business until a Certificate to commencement of business is issued to it.

10. Shares Warrants : A Private Company cannot issue Share Warrants against its fully paid shares, Whereas a Private Company can issue Share Warrants against its fully paid up shares.

11. Further issue of shares : A Private Company need not offer the further issue of shares to its existing share – holders, whereas a Public Company has to offer the further issue of shares to its existing share – holders as right shares. Further issue of shares can only be offer to the general public with the approval of the existing share – holders in the general meeting of the share – holders only.

12. Statutory meeting : A Private Company has no obligation to call the Statutory Meeting of the member, whereas of Public Company must call its statutory Meeting and file Statutory Report with the Register of Companies.

13. Quorum : The quorum in the case of a Private Company is TWO members present personally, whereas in the case of a Public Company FIVE members must be present personally to constitute quorum. However, the Articles of Association may provide and number of members more than the required under the Act.

14. Managerial remuneration : Total managerial remuneration in the case of a Public Company cannot exceed 11% of the net profits, and in case of inadequate profits a maximum of Rs. 87,500 can be paid. Whereas these restrictions do not apply on a Private Company.

15. Special privileges : A Private Company enjoys some special privileges, which are not available to a Public Company.


Director of the company alone cannot commit anything on behalf of the company without the sanction of the Board of director. Shabh Shanti Services Ltd. v. Manula’s Agarwalla & Ors. 2005 SCC (Cri) 993.



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How To Form A Partnership Firm

Definition
What constitutes a Partnership
Agreement of Partnership
Test of Partnership
Partnership as an adventure
Partnership an agency
Period of Partnership
Rights and Duties of Partners
Property of Partnership
Limits on agency of Partners
Retirement of a Partner
Dissolution
Types of Partnership
Partnership under Companies Act
Partnership under Income Tax Act
Partnership and other bodies of Individuals
Registration
Limited Partnership
Stamp Duty
Deeds And Documents

Definition - A Partnership is defined by the Indian Partnership Act, 1932, as 'the relation between persons who have agreed to share profits of the business carried on by all or any of them acting for all'. This definition gives three minimum requirements to constitute a partnership, viz.

(1) there must be an agreement entered into orally or in writing by the persons who desire to form a partnership,
(2) the object of the agreement must be to share the profits of business intended to be carried on by the partnership, and
(3) the business must be carried on by all the partners or by any of them acting for all of them.

The term 'person' is not defined by the Partnership Act. Section 2(42) of the General Clauses Act defines 'a person' to include a company or an association or body of individuals, whether incorporated or not. But the Supreme Court has held that this definition cannot be imported into the Partnership Act, and the 'person' under the Partnership Act means either an individual or any other legal entity such as a Limited Company registered under the Companies Act, or any other Corporation constituted by or under any act of the Legislature as a body corporate. The Supreme Court has observed that it is now well settled that Hindu Undivided Family cannot as such enter into a contract of partnership with another person or persons because it is a fleeting body, its composition changes by births and deaths, marriages and divorces and such a partner- ship is likely to have a precarious existence. It, therefore, follows that a body of individuals such as an unincorporated society cannot as such become a partner in a firm. It also follows that a partnership firm cannot as such enter into a partnership with another individual or legal entity, or with any other partnership firm because a partnership as such is not a .person. But in the case of H.U.F. the Karta of the family or a member thereof can become partner with another individual or with other legal entity or even with the partners or partner of a partnership firm because in such a case It is the Karta or the individual member who is the partner for all purposes and not the joint family whom he represents and the family does not become a partner of the firm. It has been held that when two Kartas of two H.U.Fs. enter into a partnership agreement, the partnership though popularly known as one between the two HUFs, in the eye of law, it is a partnership between two Kartas and the other members of the two families do not 'ipso facto' become partners. There is nothing to prevent individual members of one H. U. F. from entering into a partnership with the individual members of another H.U.F. and in such a case it is the partnership between the individual members and it is wholly inappropriate to describe such a partnership as one between two HUFs. When the Karta of a H.U.F. enters into a partnership with a stranger the members of the family do not ipso facto become partners in that firm and they have no right to take part in its management or to sue for its dissolution.

What constitutes a partnership - A firm is strictly not a person; It is an association of persons and the agreement by which a firm purports to enter into a partnership with an individual or another firm merely makes the partners of that firm individual partners of the larger partnership. A firm as such cannot enter into an agreement as a partner with another firm or individuals.

Therefore, when one partnership enters into a partnership agreement with another partnership firm, the partnership is in fact between all the partners of both the firms.

The Supreme Court has observed that a partnership agreement creates and defines the relation of partnership and, therefore, identifies the firm. if that conclusion is correct, it is only a further step to hold that each partnership agreement may constitute a distinct and separate partnership and, therefore, a distinct and separate firm.

That is not to say that a firm is a corporate entity or enjoys a juristic personality in that sense. The firm name is only a collective name for the individual partners and each partnership is a distinct relationship. The partners may be different and yet the nature of the business may be the same, the business may be different and yet the partnership may be the same. And agreement between partners to carry on a business and to share its profits may be followed by a separate agreement between the same partners to carry on another business and share the profits therein. The intention may be to constitute two separate partnerships and two distinct firms or to extend merely the partnership originally constituted to carry on one business or to carrying on another business. It will depend on the intention of the partners. The intention of the partners will have to be decided with reference to the terms of the agreement and all the surrounding circum- stances including evidence as to interlacing or interlocking of management, finance or other incidentals of the respective businesses.

In other words, the same partners can form two different partnerships. The Supreme Court has held that the word 'person' in section 4 of the Partnership Act contemplates only natural or artificial or legal person and a firm is not a person and as such not entitled to enter into a partnership with another firm or H. U. F. or individual. In this view of the matter there can arise no question of registration of a partnership purporting to be between three parties viz. a firm, a H.U.F. and an individual as a firm.

A partner in his individual capacity can legally be a partner in a firm and the fact that he has secured his capital from another firm or that he has entered into partnership with other members of that firm in respect of his share in the first mentioned firm does not show that the other firm is a partner of the first mentioned firm or that the latter firm is not validly constituted. A divided member or some of the divided members of an erstwhile joint Hindu family can enter into partnership with a third person, but under some arrangement inter-se between other members of the divided family but the partnership will have no concern with the obligations of such divided members to other members of their family in the partnership and their shares in the partnership have nothing to do with their shares In the Joint family's divided properties.

Not only that but it has been held that the Karta of a H.U.F can enter into partnership with an individual member of that very family provided the member has contributed his own self acquired capital by way of money or other property to the capital of the firm. And the members personal skill and labour is held to be his property which can be a contribution to the capital of such a firm.' Similarly if a benamidar, who has the character of a trustee of the real owner, enters into partnership with another in his own name the share allotted to him in the partnership must be held to specify his individual share therein.' Shortly, therefore, the position is that partnership can be only between individuals and/or any other legal entity, and those who are actually parties to a partnership agreement will be considered as partners irrespective of their personal relationship with others inter-se and with which the partnerships will not be concerned, such as the beneficiaries if their trustee is a partner or the real owner If his benamidar is a partner or members of a HUF if their Karta is a partner or the partners of a firm if one of them is a partner of the other firm and so on.

Agreement of partnership -As stated above a partnership is constituted by an agreement between the partners. The agreement may be in writing or oral. But from the practical point of view and particularly in view of the provisions of other Acts such as the Income Tax Act as well as Partnership Act an oral partnership is not practicable, and therefore, a partnership agreement is necessarily required to be in writing.

Therefore, the mere fact that two persons as joint owners either as heirs or legatees are carrying on a business it does not necessarily mean that they are partners and if they want to carry on the business in partnership, then a Partnership agreement in writing becomes necessary. For example, if a person dies leaving a running business and his heirs continue to carry on such business, it will not be a business carried on in partnership and if they want to do so they will have to enter into a regular agreement of partnership.

Being an agreement and an agreement enforceable at law, such an agreement must fulfill the basic requirements of a valid contract, as required by the Contract Act. Therefore, a minor or a mentally handicapped person cannot enter into a partnership agreement though by virtue of the provisions of the Partnership Act a minor can be admitted only to the benefits of the partnership. But that only means that a minor can have a share in the profits of the business, but he cannot become a partner, and cannot execute any agreement of partnership.

Similarly if a partnership deed provides that on the death of a partner his heirs or any one or more of them should be admitted as partners or partner in place of the deceased partner even in such a case on the death of a partner his heirs or any of them do not become partners automatically on such death. But a fresh agreement of partnership will have to be executed between the existing partners and the heirs or heir of the deceased partner and if the heir is a minor the new partnership will stand postponed till the minor attains majority or if the surviving partners are more than one, the minor can only be admitted to the benefits of partnership.

Test of partnership - As stated before, a partnership agreement can be oral or in writing. It is not the general practice to enter into a preliminary agreement to enter into a regular partnership agreement. But if such a preliminary agreement is entered into and the partners start business in anticipation of executing a formal deed of partnership, the partnership shall be deemed to have commenced from the commencement of the business, unless the preliminary agreement is conditional upon the happening or not happening of some event in which case the partnership cannot be said to have come into existence unless the event has happened or not happened. Another test of partnership as mentioned above is that of sharing profits, and which is an essential requirement of a partnership. Profits may be shared in such proportions as the parties may agree, but sharing of profits is most essential. As against that, sharing of losses only suffered in business is not a test to constitute a partnership.

Therefore, the partnership agreement may provide that a particular partner or partners will not be liable to bear any losses of the firm. As regards sharing in profits the agreement may provide that a partner shall receive only a fixed share in the profits or a fixed periodical amount and It is not necessary that profits should be shared in certain proportions.

Section 6 of the Partnership Act provides that In determining whether a group of persons is or is not a firm or whether a person is or is not a partner in a firm regard shall be had to the real relation between the parties as shown by all the relevant facts taken together.

It further provides that sharing of profits or gross returns arising from property by persons holding joint or common interest in that property does not of itself make such persons partners, that is, as stated above, mere joint ownership of business does not constitute a partnership.

Similarly, receipt by a person of a share of the profits of a business or a payment contingent upon earning of profits or carrying with the profits earned by a business, does not of itself make him a partner with the person carrying on the business. For example, the receipt of a share or payment by a lender of money to persons engaged or about to engage in a business does not make such lender a partner.

Similarly, a share given in profits to a servant or agent as remuneration does not make him a partner, or if a widow or child of a deceased partner is given any annuity in payment of the share of the deceased partner It does not make the widow or child a partner, or if a business is sold with goodwill and the seller is given a share in profits towards payment of the sale price it will not make him a partner of the firm. But otherwise wherever the agreement is for sharing of business carried on by two or more persons the partnership relation will be inferred.

The partnership business may consist of doing anything which is not illegal or against public policy. Business may consist of carrying a continuous trade. or profession or any manufacture and any other activity of which the object is to earn profits. Or it may be limited to a single adventure.

Partnership for an adventure -
Section 8 of the Partnership Act provides that a person may become a partner with another partner In particular adventure or undertaking.

As observed by the Gujarat High Court, the common law does not recognise the relationship of co-adventurers but with the passage of time, the judicial decisions have recognised what is known, as joint ventures of two or more persons undertaking to combine their property or labour in context of a particular line of trade or general business for joint profits. The courts do not treat a joint adventure as identical with the partnership though it is so similar in nature, and in the contractual relations created between such adventurers the rights as between them are governed particularly by the same rules that govern the partnership.

This relationship has been defined to be a special combination of persons undertaking jointly some specific adventure for profit without any actual partnership.

It is also described as a commercial or maritime enterprise undertaken by several persons jointly, a limited partnership, not limited in the statutory sense as to the liabilities of the partners, but as to its scope or duration. Generally speaking the distinction between joint venture and partnership is that former relates to a single transaction though It may comprehend business to be continued over several years while the latter relates to a joint business of a particular trade. In order to constitute a joint venture there must be a community of interest and right tojoint control.

It is recognised on authority that each of the partners must have equal voice in the matter of performance and control over the activities used therein though one authority may entrust the performance to another.

The rights and duties and liabilities of a joint venture are similar or analogous to those which govern corresponding rights and duties and liabilities of the partners. The only difference between partnership under section 8 of the Partnership Act and an ordinary partnership is that ln joint venture, parties undertake no liability beyond the limit of a particular venture/adventure or business or undertaking and their rights and obligations are, therefore, less extensive than those of the partners in ordinary partnership.

Partnership an agency - he third essential of a partnership is that a partnership business actually may be carried on by all the partners together or by any one or more partners for all and on behalf of the others, in which case each partner is an implied agent of the other partners. It is not. therefore, necessary that all the partners take part in the business of the partnership firm. Some partners can be active partners and others can be sleeping partners. But it must be clear that there is an implied or express agency constituted in favour of one partner by the other partners. If there is no element of agency, even if there is any agreement to share profits, there will be no partnership. So a partner has a double capacity, he is the principal so far as he is concerned and the agent so far as other partners are concerned.

Period of partnership -
A partnership can be for a fixed period of time or it may be limited to a particular adventure as provided in Section 8 or it may be for a duration at the will of the partners. Where the period of the partnership is not fixed and the partnership is not for a particular adventure then under section 7 of the Act the partnership shall be deemed to be a partnership at will.

Rights and duties of partners -

Sections 9 & 10 of the Act lay down the basic duties of every partner and the said duties are not subject to any contract to the contrary. Therefore, partners are bound to carry on the business of the firm to the greatest common advantage, to be just and faithful to each other and to render accounts and full information of all things affecting the firm to any partner or his legal representative and every partner is bound to indemnify the firm for any loss caused to it by fraud in the conduct of the business of the firm.

Subject to this the mutual rights and duties of partners may be decided by contract between the partners, either express or implied.

Subject to any contract to the contrary such duties and rights of each partner are provided in sections 12 and 13 of the Partnership Act.

They are
every partner has a right to take part in the conduct of the business,
every partner is bound to attend diligently to his duties in the conduct of business.
any difference arising as to ordinary matters connected with the business may be decided by a majority of partners and no change in the nature of the business shall be made without the consent of all the partners,
every partner has a right to have access to and to inspect and copy any books of the firm
a partner is not entitled to receive remuneration for taking part in the conduct of the business,
the partners are entitled to share equally in the profits earned and shall contribute equally to the losses sustained by the firm,
where the partner is entitled to interest on the capital subscribed by him, such interest shall be payable only out of the profits a partnership making, for the purpose of the business, any payment or advance beyond the amount of capital he has agreed to subscribe, is entitled to Interest thereon at the rate of 6% per annum.
the firm shall indemnify a partner in respect of payments made and liabilities incurred by him,

1. in the ordinary and proper course of conduct of the business and
2. in doing such act in an emergency, for the purpose of protecting the firm from any loss, as would be done by a person of ordinary prudence, under similar circumstances, and

the partner shall indemnify the firm from any loss caused due to his wilful neglect in the conduct of the business of the firm.

These rights and duties will be implied in the partnership unless the partnership agreement provides to the contrary i.e. makes any variation in the said rights and duties.

Similarly, subject to a contract to the contrary, if a partner derives any profit for himself from any transaction of the firm or from the use of the property or business connection with the firm or the firm name he is liable to account for the profit and pay it to the firm, and if the partner carries a business of the same nature as and competing with that of the firm, he shall account for and pay to the firm all profits made by him in that business.

Property of partnership -

The property of a partnership firm will consist of all the assets, moveable and immoveable brought in by any or all the partners into the firm and also include the goodwill.

As to what is goodwill see Introductory Note to Ch. 3 Part III. It may be stated that relying upon the specific provision of s. 22 of the English Partnership Act, 1890, the Supreme Court has held that all property of a partnership firm, whether moveable or immoveable is moveable property. and therefore, on retirement of any partner or dissolution of partnership the division of even immoveable property among the partners does not amount to transfer of property and the deed of retirement or dissolution does not require registration.

The Supreme Court has not considered the law of vesting and divesting of interest in an immoveable property. A property acquired by A by purchase or otherwise is vested in him and even if A brings that property into partnership and it is used for the partnership business, the property is not automatically divested from A and vested in A and his other partners.

Vesting and divesting can take effect only by act of parties or by operation of law, and, therefore, the property brought in by A cannot become vested in the other partners unless there is a regular transfer of the property by A to himself and other partners. And similarly if property vested in the partners is divided, among them, it amounts to transfer of one partner's interest to the other, and such transfer is necessary to vest and divest the title from one to the other.

Even in English law, inspite of the provisions of Partnership Act above referred to, the conveyancing practice is to effect the transfer of property brought in or taken out of the partnership by a Deed of Conveyance.

Limits on Agency of partners - As stated above, every partner is an agent of the other partners and has implied authority to do all acts and things necessary for the purpose of carrying on business of the firm. But such an implied authority does not empower a partner to

(a) submit a dispute relating to the business of the firm to arbitration or
(b) open a banking account on behalf of the firm in his own name,
(c) compromise or relinquish any claim or a portion of a claim by the firm,
(d) withdraw a suit or proceeding on behalf of the firm,
(e) admit any liability in a suit or proceeding against the firm,
(f) acquire immoveable property on behalf of the firm,
(g) transfer any such property, or
(h) enter into any partnership on behalf of the firm.

These being the implied authorities they can be modified by express provisions in the partnership deed.

As stated above, the partnership is not a legal entity by itself, but only an association of persons and the name of the firm is only a mode or compendious expression representing the partners. However, section 22 of the Act provides that in order to bind a firm, an act or instrument done or executed by a partner or other person on behalf of the firm shall be done or executed in the firm name or in any other manner expressing or implying the Intention to bind the firm. This means that in order to bind the firm and all the partners thereof every act must be done in the name of the firm or expressly on behalf of the Firm. Therefore, when a contract is entered into for and on behalf of a partnership firm. It is desirable to make the firm by its one or more partners as a party or one or more partners can be made a party in his or their names but as partners of their firm. A mere description of the signatory that he is partner of a firm may not be sufficient to bind the firm. But here a distinction should be made between an ordinary contract and a deed of transfer of any immoveable property. In a case where an immoveable property is to be acquired by purchase or lease or otherwise, it is necessary to make all or some of the partners as parties and not the firm in its name. A firm is not a legal person and a transfer can be only by or in favour of a legal orjuridical person as provided in S. 5 of the Transfer of Property Act. A partnership firm by its name is not a juristic person like a corporate body. It is the partners who are as a body of persons juristic persons .

It is not necessary to deal with the provisions of the Partnership Act contained in sections 20 to 30 as they are not relevant so far as drafting of a deed of partnership and other incidental documents, is concerned. Those provisions are also binding upon any firm as they are not subject to contract to the contrary.

Retirement of a partner -
Under the Partnership Act no person can be admitted into partnership without the consent of the other partner or partners unless there is any contract to the contrary (s. 31).
Any partner may. with the consent of all the other partners or in terms of the deed of partnership where the partnership is at will, by giving notice in writing to all other partners, to that effect, dissolve the partnership or retire from partnership.
A retiring partner, however, continues to be liable to third parties even If the liability Is taken over by the remaining partners (s. 32) Therefore in a deed of retirement it is necessary to provide that In the event of the retiring partner being held liable by a third party, the remaining partners shall indemnify him to that extent, when the liabilities are taken over by the remaining partners.
Insolvency of a partner also causes compulsory retirement of an insolvent partner (s. 35). It is, therefore, generally provided in a deed of partnership when there are more than two partners that the insolvency of any partner will not dissolve the partnership. If a partner retires, unless there is contract. to the contrary, the retiring partner cannot use the firm name, represent himself as carrying on the business of the firm or solicit the customers of the Firm. (s. 36).
Therefore, in a deed of retirement It is generally not necessary to make explicit that the retiring partner shall not do any of these things. But if he is to be restrained from carrying on similar business for a specified period or in a specified area, such condition can be provided in she deed of retirement and it is legal (s. 36(2)).


Dissolution -

The Act also provides that a partnership firm may be dissolved under the following circumstances namely,


as a result of any agreement between all the partners


by adjudication of all the partners or all partners but one as insolvent, or


by the happening of an event which makes it unlawful for the business of the firm to be carried on in partnership or


subject to agreement between the parties,

on the happening of any of the following events such as -


efflux of time,


completion of the adventure,


death of a partner, and


insolvency of a partner.

In these last four cases the partnership agreement may provide whether the firm will be dissolved or not on the happening of any of the four events. Even if the deed provides that the partnership will not be dissolved on the death or insolvency of a partner, it does not mean that on the death or insolvency of a partner he ceases to have interest in the partnership property. In such case his interest in the partnership property will survive to his heirs in case of his death and to his assignees in case of insolvency. In the absence of a term in the deed of partnership to that effect, it cannot be that, the partnership shall continue, and notwithstanding the death of a partner it will operate to extinguish his proprietary rights in the assets of the Firm.

A partnership can also be dissolved by the Court under the circumstances mentioned in section 44 of the Act. Where the partnership is 'at will' the partnership can be dissolved by any partner or partners giving notice of his/their intention to dissolve the firm.

Types of partnership -
The result of this summary of the Act is that a partnership is generally created by agreement between the partners. A partnership can be formed between
one or more Individuals or
between an Individual and a person representing a H.U.F. or
between an Individual and other partner representing his firm, or
between two partnership firms or
between a Limited Company or a Corporation and an Individual or partnership firm or
between a partnership and a H.U.F.
between members of HUF in their individual and independent capacity
between a HUF and a member of that HUF independently.

Partnership under Companies Act -
Section 4 of the Companies Act, 1956, provides that the number of partners in a firm shall not exceed 20, and a partnership having more than 20 persons will be illegal.

When there is partnership between two firms all the partners of each firm will he taken into account for the purpose of this provision but if a partnership is between the Karta or any member of HUF on the one hand and another individual or Individuals on the other, the members of the joint family will not be taken into account. A Hindu Undivided family carrying on business as such, not being a partnership, S 11 of the Companies Act will not apply even if the members of that family are more than 20. But where two or more Hindu Undivided families are carrying on business in partnership the number of the members of those families except minors will be taken into account for the purpose of S. 11 of the Companies Act.

Partnership under Income Tax Act -
A partnership to be recognised for the purpose of income Tax liability of the partners and their firm is required to comply with certain provisions of the Income Tax Act. While therefore drafting a deed of partnership the provisions of the Act are required to be taken in to account. For detail discussion on this question See Chapter 3 part VIII.

Partnership and other bodies of Individuals -
A partnership is distinguishable from several other associations or bodies of individuals. A partnership is different from co-owners in several respects. The distinguishing features are stated by the Supreme Court in Champaran Cane Concern Corporation v. State of Bihar. It is different from a club which is an association of persons formed for the purpose other than carrying on business and therefore there is no object to earn profit. Partnership is differentfrom a company or any other corporate body which is a legal entity. Partnership is also different from Hindu Joint family firm, the latter being a creation of law while the former is a creation of contract. It is not necessary to discuss the subject in more detail as each of these bodies are dealt with separately elsewhere.

Registration - A partnership firm is required to he registered under sections 58 and 59 of the Partnership Act, though it is not compulsory.

Every change in the constitution of a partnership is also required to be registered. But if it is not registered, then there are certain handicaps stated in S.69 of the Act.

The main handicap being that a partnership firm or its partner cannot file a suit against a third party. In Maharashtra, the Section is made more stringent making registration almost compulsory. For the purpose of income tax benefits It is necessary to register a partnership with the Department under S. 184 and S.185 of the Income Tax Act, 1961. For the Influence of the Income Tax Act on partnership, see Ch. III in Part Viii.

Limited partnership -
The concept of limited partnership is not recognised by Indian Law. It is prevalent in England and America and other countries. In England, the limited partnership is governed by the Partnership Act of 1907. It consists of general partners who are the main partners with exclusive right of management and their liability is unlimited. But they can take any linilted partner who contributes some capital to the Firm and whose liability is limited to that amount provided he does not participate in the management or withdraw any part of the capital contributed by him during the term of partnership. However a limited partnership is not a separate legal entity like a limited company. Generally a limited partner joins a firm to participate in a particular scheme or adventure of the firm.

Stamp Duty and Registration - Stamp Duty : On a Deed of Partnership the stamp duty under the Indian Stamp Act is a fixed one. The same duty is payable on a deed of retirement or a deed of dissolution. But in Maharashtra, if the deed of retirement or deed of dissolution effects any transfer of an immoveable property, it will attract stamp duty as on a conveyance on the market value of the property. For the law in different States, see Ch.1 in Part VIII.

Registration : A partnership deed is not required to be registered even if an immoveable property is brought in the firm. Similarly, a deed of retirement or a deed of dissolution is not required to be registered. According to Supreme Court a division of even immoveable properties on dissolution is not required to be registered as it does not amount to a transfer. The correctness of this view is doubtful and it is desirable to get such a deed of dissolution or retirement registered for the sake of caution or safety.

APPOINTMENT OF DISTRIBUTOR

1 - Agreements -

1 - Appointment of distributor for a district -

APPOINTMENT OF DISTRIBUTOR FOR A DISTRICT

THIS AGREEMENT made at .......... on this ......... day of ......... 2000, between M/s ............ a partnership firm having its principal office at ......... (hereinafter referred to as "the principals", which expression shall unless repugnant to the context, be deemed to include the partners for the time being and from time to time constituting the said partnership firm, the survivor of them, the legal representatives, heirs, executors and administrators of such last survivor) of the ONE PART and M/s .......... proprietor Shri ....…………….. (hereinafter called "the distributor" which expression shall unless repugnant to the context, be deemed to include his heirs, administrators, executors, legal representatives, successors and assigns) of the OTHER PART.

WHEREAS the Principals are the sole selling agents of ......... Ltd., for the whole of India and under the Agreement dated ........ executed between ......... Ltd. and the Principals, the Principals are entitled to appoint agents, distributors for marketing the products of ......... Ltd., hereinafter referred to as the company.

WHEREAS the distributor of M/s. .................. has got a big showroom at ...... and has requested the Principals to appoint it as its distributor for marketing the company's products.

WHEREAS the Principals have agreed to appoint M/s .......... as their distributor to sell the products of the company.

NOW IT IS HEREBY AGREED BETWEEN THE PARTIES AS UNDER:

1. The Principals appoint M/s.......... as the sole agent for the district of Agra for the purpose of promotion and sale of the company's products for a period of two years from the date hereof on the terms and conditions set forth hereunder.

2. The distributor shall work conscientiously and in a business like manner for the promotion and sale of the products of the company.

3. The distributor shall fix the retail price in consultation with the Principals from time to time and make the sale of the company's products against cash memos.

4. The distributor shall maintain fifteen days stock of company's to products for sale at his own cost and shall not pledge the stock to bankers or other creditors without obtaining the prior consent from the Principals in writing. The Principals may grant consent for the pledge of the stock subject to terms and conditions and the distributor shall abide by such terms and conditions and bring the same to the notice of the bankers or creditors.

5. The distributor shall not sell the goods directly or indirectly outside the agency district. The distributor while selling the company's products to persons in trade shall obtain undertaking in writing that the company's products shall not be re-sold outside the district agency and the said products shall not be re-sold to the public below the fixed retail price.

6. The distributor shall be responsible for the rent and other expenses of the showroom and godown occupied by him for the purpose of agency business. He shall at his own expense keep insured the company's products for full value against all risks. The Principals may inspect the receipts for the rent, rates and taxes of the showroom and godown and for the premium of insurance policies. The Principals will not be liable or responsible for the expenses relating to or incidental to the said agency.

7. The distributor shall make all sales on cash basis and shall keep record of all sales and shall remit the sum received by him to the Principals on each Saturday. The distributor may deduct the commission at the rate of .......... per cent, while remitting the sale proceeds. The distributor shall send weekly reports of the sales, net realisation, stock in hand, etc. to the Principals.

8. The distributor shall be entitled to ......... per cent commission on the sale price of the products realised on the basis of accounts maintained by him.

9. The products supplied by the Principals shall be the property of the Principals and they will be entitled to take possession of the said products at any time. The distributor shall maintain record of stock received by him, goods sold by him and the goods in stock in godown and showroom. The Principals have the right without prior notice to cause a stock checking of the company products supplied by them and if any shortage or deficiency is found on such. stock-checking, the distributor shall pay to the Principals the list price of such shortage or deficiency less the deduction by way of commission.

10. The Principals will not sell the company's products to any person in the agency territory and will redirect all inquiries or orders for Principals products received by them from persons resident in agency district to the distributor. The distributor shall also refer to the Principals all enquiries or orders for the Principals products from the persons resident outside agency district and enquiries or orders from persons resident in the agency district for the purpose of re-sale outside the agency district. The distributor shall not be entitled to any commission on the sale resulting from such enquiries or orders.

11. The rights under this agreement shall not be assigned or transferred to any other person, except with the prior permission of the Principals in writing.

12. In the event of any dispute arising between the distributor and any customer regarding the purchase of company's products, the distributor shall inform the Principals immediately, who will advise the distributor the appropriate action which has to be taken by him in the matter.

13. The distributor guarantees a minimum sale of the value of Rs. .......... per year. In case, the sale fails short by 25% or more for consecutive two years, the Principals may terminate this agreement.

14. Any of the parties may terminate this agreement by serving a notice of three months to the other party. The accounts between the parties will be settled and adjusted finally within the aforesaid period of three months.

15. In the expiry or earlier determination of this agreement, the distributor shall forthwith deliver to the Principals all the unsold stock of goods, all books of account and other documents of agency to the principals and shall pay to the principals for the shortage or deficiency of stocks at list prices less commission allowed to the distributor.

16. In case any dispute arises between the parties out of or in connection with the agreement, the same shall be referred to the sole arbitration of an arbitrator, who may be appointed by the parties by mutual agreement. The proceedings held by the arbitrator in making the award will be in accordance with the provisions of Indian Arbitration and Conciliation Act, 1996 or any statutory modification thereof. The award of the arbitrator shall be final and binding on the parties.

17. This agreement shall be executed in duplicate. The original it shall be retained by the Principals and the duplicate by the distributor.

IN WITNESS WHEREOF the parties hereto have set their respective hands to these presents and the duplicate hereof on the date, month and year hereinabove written.

Signed and delivered by M/s..…………........
the within named Principals by their partners

Signed and delivered by ……………………
the within named Distributor by their proprietor Shri ..........

WITNESSES;
1.

2.

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2 - Agreement between manufacturer and sole selling agents with canvassing rights -

AGREEMENT BETWEEN MANUFACTURER AND SOLE SELLING AGENTS WITH CANVASSING RIGHTS



THIS AGREEMENT made on this ......... day of ......... 2000, between XYZ Pharmaceuticals Ltd., a company incorporated under the Companies Act, 1956 and having its registered office at ......... hereinafter called "the company" (which expression shall, unless it be repugnant to the context or meaning thereof, be deemed to mean and include its successors and assigns) of the ONE PART; and ABC Pharmaceuticals Distributors Ltd., a company incorporated under the Companies Act, 1956 and having its registered office at ...... hereinafter called "the distributor" (which expression shall, unless it be repugnant to the context or meaning thereof, be deemed to mean and include its successors and assigns) of the OTHER PART:

WHEREAS the company is engaged in the manufacture of several medicines and has decided to appoint a sale selling agent for the whole of India with canvassing rights and the distributor has agreed to work as such;and



WHEREAS the distributor is being appointed at sole selling agents having

exclusive right to sell the medicines manufactured by the company in whole of

India; and



WHEREAS the Board of Directors of the company is making this appointment, subject to its approval by the company in its first annual general meeting held after the date of this appointment and approval by Central government.



NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:



1. The company appoints the distributor as sole selling agents for the sale of all the medicines manufactured by it in the whole of India and the distributor agrees to act as such sole selling agents for the whole of India on the terms and conditions contained herein.;



2. The appointment will be for a period of five years commencing from the date of this agreement. However, it may be extended for further periods not exceeding five years on each occasion.



3. The distributor shall canvass for, secure orders and push the sale of the medicines manufactured by the company to the best of its ability and experience in the whole of India and guarantees to secure orders for the sale of medicines to the extent of the value of Rs. .......... in a year commencing from the date of this agreement.



4. The distributor will advertise the company products at its own cost and expenses by advertisements in newspapers, journals, magazines, cinema slides or by any other means. However, the company may advertise at its own costs at its discretion whether in newspapers, journals, cinema slides or by any other means and shall indicate the name of the distributor as its sole selling agents.

5. The distributor shall employ medical representatives at its own cost and expenses for canvassing the company products amongst the doctors, hospitals, nursing homes, etc. The distributor shall also employ servants, staff at its own cost and expenses for doing the business of sole-selling agency.



6. The distributor will be entitled to appoint sub-agents for any State/District or any particular area in the country and on such terms and conditions as the distributor may think fit. However the company shall not be liable for any dealing between the distributor and its sub-agents.



7. The distributor shall submit to the company weekly return of the business secured, the doctors and hospitals approached and canvassed during the previous week.



8. The distributor shall forward to the company the orders booked and enquiries received by it not later than two days from its booking. The distributor shall remit the money received by it in advance from the customers to the company and an account thereof shall be submitted to the company every Friday.

9. The distributor shall not make any representation on behalf of the company except in conformity with the instructions issued by the company.



10. The distributor shall book orders of the company's products on the terms and conditions mentioned in the Schedule attached hereto. The terms and conditions shall be subject to change by circulars or instructions by the company from time to time and the distributor will be bound to follow the instructions issued by the company from time to time.



11. The company shall pay a commission of ......... % on all orders received directly or indirectly from the customers through the distributor, which have been executed by the company. The company shall make payment of the commission to the distributor at the end of every month.



12. During the term of this contract, the distributor shall not sell or attempt to sell the medicines for any other Indian or foreign company.



13. The agency may be terminated by the company, at any time during the agency period of five years, after giving one month's notice thereof, in case the distributor fails to comply with the instructions issued by it or if it omits to comply with its obligation imposed upon it under this agreement or if the distributor fails to obtain or procure orders for the minimum guaranteed amount or if the company feels that the distributor is guilty of any conduct, which is prejudicial to the interest of the company and in this matter the decision of the Board of Directors of the company will be final. The distributor may also terminate this agreement at any time during the agency period, after giving one month's notice thereof, if the company fails to execute the orders booked by the distributor or if the medicines supplied by it are sub standard or if the company without just cause withhold the payment of the commission due to the distributor under the agreement for a period of three months.



14. The distributor shall be responsible to make the payment of the medicines supplied by the company on the orders received by the distributor, if the constituent to whom medicines were supplied by the company refuses to pay for the same within two months of the receipt of medicines. The distributor shall be liable as the surety for the payment of orders booked by it.

15. The distributor shall deposit a sum of Rs.......... with the company to ensure the obligations imposed upon it under this agreement. The said sum shall not carry any interest. The said sum will be repayable to the distributor after one month of the termination of the agreement after adjustment of accounts between the parties.

16. Any and all disputes, controversies, differences arising between the parties hereto out of or in relation to this agreement or any breach thereof shall be finally settled by arbitration by two arbitrators, one to be appointed by each party to the dispute and the arbitrators shall, before taking upon themselves the burden of reference appoint an umpire. The award given by the arbitrators or umpire as the case may be, shall be, final and binding on the parties.

17. At the termination of this agreement whether by efflux of time or otherwise, the company shall not be liable to pay any commission to the distributor for the orders received after the expiry of agency period.



18. This agreement shall be executed in duplicate. The company shall retain the original and the distributor the duplicate. Each party shall bear the stamp duty payable in respect of its copy.

19. Unless otherwise agreed upon, the respective addresses for communication in respect of any matter relating to this agreement shall be as under:

For the Company:..........................

For the Distributor:........................

IN WITNESS WHEREOF the parties have caused their common seal to be affixed to these presents and a duplicate thereof, the day, month and year first; hereinabove mentioned.



Schedule



The common seal of XYZ Pharmaceuticals Ltd.

was hereunto affixed pursuant to the Resolution of its

Board of Directors passed on.......... day of .......... 2000,

in the presence of S/Shri .......... and ........... directors

of the Company, who have signed in token thereof



The common seal of ABC Pharmaceuticals Distributors Ltd.,

was hereunto affixed pursuant to the Resolution of its
Board of Directors passed on ......... day of……….2000,
in the presence of S/Shri……………… and………….. directors
of the company who have signed in token thereof.



WITNESSES;



1.



2.



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3 - Arrow(1).gif (520 bytes)Appointment of sole selling agents by a foreign company

APPOINTMENT OF SOLE SELLING AGENTS BY A FOREIGN COMPANY



THIS AGREEMENT made on this ......... day of ......... 2000, between XYZ Pharmaceuticals Ltd., a company incorporated under the Companies Act, 1956 and having its registered office at ......... hereinafter called "the company" (which expression shall, unless it be repugnant to the context or meaning thereof, be deemed to mean and include its successors and assigns) of the ONE PART; and ABC Pharmaceuticals Distributors Ltd., a company incorporated under the Companies Act, 1956 and having its registered office at ...... hereinafter called "the distributor" (which expression shall, unless it be repugnant to the context or meaning thereof, be deemed to mean and include its successors and assigns) of the OTHER PART:

WHEREAS the company is engaged in the manufacture of several medicines and has decided to appoint a sale selling agent for the whole of India with canvassing rights and the distributor has agreed to work as such;and



WHEREAS the distributor is being appointed at sole selling agents having

exclusive right to sell the medicines manufactured by the company in whole of

India; and



WHEREAS the Board of Directors of the company is making this appointment, subject to its approval by the company in its first annual general meeting held after the date of this appointment and approval by Central government.



NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:



1. The company appoints the distributor as sole selling agents for the sale of all the medicines manufactured by it in the whole of India and the distributor agrees to act as such sole selling agents for the whole of India on the terms and conditions contained herein.;



2. The appointment will be for a period of five years commencing from the date of this agreement. However, it may be extended for further periods not exceeding five years on each occasion.



3. The distributor shall canvass for, secure orders and push the sale of the medicines manufactured by the company to the best of its ability and experience in the whole of India and guarantees to secure orders for the sale of medicines to the extent of the value of Rs. .......... in a year commencing from the date of this agreement.



4. The distributor will advertise the company products at its own cost and expenses by advertisements in newspapers, journals, magazines, cinema slides or by any other means. However, the company may advertise at its own costs at its discretion whether in newspapers, journals, cinema slides or by any other means and shall indicate the name of the distributor as its sole selling agents.

5. The distributor shall employ medical representatives at its own cost and expenses for canvassing the company products amongst the doctors, hospitals, nursing homes, etc. The distributor shall also employ servants, staff at its own cost and expenses for doing the business of sole-selling agency.



6. The distributor will be entitled to appoint sub-agents for any State/District or any particular area in the country and on such terms and conditions as the distributor may think fit. However the company shall not be liable for any dealing between the distributor and its sub-agents.



7. The distributor shall submit to the company weekly return of the business secured, the doctors and hospitals approached and canvassed during the previous week.



8. The distributor shall forward to the company the orders booked and enquiries received by it not later than two days from its booking. The distributor shall remit the money received by it in advance from the customers to the company and an account thereof shall be submitted to the company every Friday.

9. The distributor shall not make any representation on behalf of the company except in conformity with the instructions issued by the company.



10. The distributor shall book orders of the company's products on the terms and conditions mentioned in the Schedule attached hereto. The terms and conditions shall be subject to change by circulars or instructions by the company from time to time and the distributor will be bound to follow the instructions issued by the company from time to time.



11. The company shall pay a commission of ......... % on all orders received directly or indirectly from the customers through the distributor, which have been executed by the company. The company shall make payment of the commission to the distributor at the end of every month.



12. During the term of this contract, the distributor shall not sell or attempt to sell the medicines for any other Indian or foreign company.



13. The agency may be terminated by the company, at any time during the agency period of five years, after giving one month's notice thereof, in case the distributor fails to comply with the instructions issued by it or if it omits to comply with its obligation imposed upon it under this agreement or if the distributor fails to obtain or procure orders for the minimum guaranteed amount or if the company feels that the distributor is guilty of any conduct, which is prejudicial to the interest of the company and in this matter the decision of the Board of Directors of the company will be final. The distributor may also terminate this agreement at any time during the agency period, after giving one month's notice thereof, if the company fails to execute the orders booked by the distributor or if the medicines supplied by it are sub standard or if the company without just cause withhold the payment of the commission due to the distributor under the agreement for a period of three months.



14. The distributor shall be responsible to make the payment of the medicines supplied by the company on the orders received by the distributor, if the constituent to whom medicines were supplied by the company refuses to pay for the same within two months of the receipt of medicines. The distributor shall be liable as the surety for the payment of orders booked by it.

15. The distributor shall deposit a sum of Rs.......... with the company to ensure the obligations imposed upon it under this agreement. The said sum shall not carry any interest. The said sum will be repayable to the distributor after one month of the termination of the agreement after adjustment of accounts between the parties.

16. Any and all disputes, controversies, differences arising between the parties hereto out of or in relation to this agreement or any breach thereof shall be finally settled by arbitration by two arbitrators, one to be appointed by each party to the dispute and the arbitrators shall, before taking upon themselves the burden of reference appoint an umpire. The award given by the arbitrators or umpire as the case may be, shall be, final and binding on the parties.

17. At the termination of this agreement whether by efflux of time or otherwise, the company shall not be liable to pay any commission to the distributor for the orders received after the expiry of agency period.



18. This agreement shall be executed in duplicate. The company shall retain the original and the distributor the duplicate. Each party shall bear the stamp duty payable in respect of its copy.

19. Unless otherwise agreed upon, the respective addresses for communication in respect of any matter relating to this agreement shall be as under:

For the Company:..........................

For the Distributor:........................

IN WITNESS WHEREOF the parties have caused their common seal to be affixed to these presents and a duplicate thereof, the day, month and year first; hereinabove mentioned.



Schedule



The common seal of XYZ Pharmaceuticals Ltd.

was hereunto affixed pursuant to the Resolution of its

Board of Directors passed on.......... day of .......... 2000,

in the presence of S/Shri .......... and ........... directors

of the Company, who have signed in token thereof



The common seal of ABC Pharmaceuticals Distributors Ltd.,

was hereunto affixed pursuant to the Resolution of its
Board of Directors passed on ......... day of……….2000,
in the presence of S/Shri……………… and………….. directors
of the company who have signed in token thereof.



WITNESSES;



1.



2.





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4 - Agreement between builder and a broker for selling the flats to be constructed.


AGREEMENT BETWEEN BUILDER AND A BROKER
FOR SELLING THE FLATS TO BE CONSTRUCTED

THIS AGREEMENT made at .................. on this ............... day of ....................., 2000, between ABC Construction Co. Ltd., a company incorporated under the Companies Act, 1956 and having its registered office at ....................... hereinafter called 'the Builder" (which expression shall, unless it be repugnant to the context or meaning thereof, be deemed to mean and include its successors and assigns) of the ONE PART; and Shri XYZ son of Late Shri............................ resident of ........................ hereinafter called "the Broker" (which expression shall, unless it be repugnant to the context or meaning thereof, be deemed to mean and include his heirs, legal representatives, executors and administrators) of the OTHER PART.

WHEREAS THE builder is constructing residential flats at ................. more particularly described in the Schedule hereunder written; and wants to sell those flats and for the said purpose the services of the brokers are required.

AND WHEREAS the broker has approached the builder and expressed his consent to act as broker for the sale of the flats on the terms and conditions mutually agreed upon.

NOW THIS AGREEMENT WITNESSES AS FOLLOWS:

The builder appoints the broker for selling the flats being constructed by him, more particularly described in the Schedule hereunder written at the price and on the terms and conditions laid down in Annexure 1 to this agreement

The broker will be entitled to the commission at the rate of 5 per cent on the cost of the flats booked by him.

The builder hereby represents and warrants that he is having clear and marketable title to the flats, free from any encumbrance, charge, lien, mortgage or attachment. The builder also represents and warrants that the material used in the flats is of best quality.

The builder hereby gives the period of six- months hereof for the sale of the flats described in the Schedule hereunder written and he shall not be authorised to sell the flats after the period of six months.

IN WITNESS WHEREOF the parties have set their respective hands to these presents on the date, month and year hereinabove written.

Schedule
Annexure 1


Signed and delivered by ABC Construction Co. Ltd.
through the hands of Shri..............................
Managing Director


Signed and delivered by XYZ

WITNESSES;
1.

2.



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5 - AGREEMENT FOR APPOINTMENT OF A BROKER FOR SELLING A HOUSE

THIS AGREEMENT made at ......... on this ................. day of ......................, 2000, between A S/o. B resident of .................. hereinafter called "the owner" (which expression shall, unless it be repugnant to the context or meaning thereof, be deemed to mean and include his heirs, legal representatives, executors and administrators) of the ONE PART and C S/o D resident of ........................... hereinafter called "the broker" (which expression shall, unless it be repugnant to the context or meaning thereof, be deemed to mean and include his heirs, legal representatives, executors and administrators) of the OTHER PART.

WHEREAS the owner is the absolute owner of the property described in the Schedule hereunder written and he wants to sell the same and for that purpose he requires the services of a broker.

AND WHEREAS the broker, who is a reputed broker dealing in real estate in the area has shown his willingness to sell the said property.

AND WHEREAS the owner has agreed to appoint the broker for the sale of his property described in the Schedule hereto on the terms and conditions as hereinafter appearing.

NOW THIS AGREEMENT WITNESSES AS UNDER:

1. The owner authorises the broker to sell the property for a consideration of Rs.................. out of which the purchaser shall pay Rs ...................... in advance as earnest money and the balance of Rs ...................... shall be paid within a period of three months at the time of registration of the conveyance deed.

2. The owner hereby represents and warrants that the details of the property as described in the Schedule hereunder written are true and the title of the owner to the said property is clear, marketable and free from encumbrances.

3. The owner hereby undertakes that after the receipt of earnest money from the purchaser, he shall deliver the abstract of title showing that he is the owner of the property and the property is free from mortgage, lien, charge or any encumbrance.

4. The owner hereby agrees that on receipt of entire consideration in respect of the property, he shall execute conveyance deed in favour of the purchaser.

5. The broker hereby agrees that he shall be able to sell the property within a period of one month from the date of these presents.

6. The owner shall pay to the broker the commission at the rate of 2% of the consideration, which shall be payable at the time of execution of the conveyance deed of the property.

IN THE WITNESS WHEREOF the parties have hereunto set their hands, the day, month and year first above written.

Schedule of the above property

Signed and delivered by A s/o B, the within named owner

Signed and delivered by C s/o D, the within named broker

WITNESSES;
1.

2.

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6 - AGREEMENT FOR UNDERWRITING SHARES OF A COMPANY


THIS AGREEMENT made at ................. on this .................. of ................... 2000, between ABC Ltd., a company incorporated under the Companies Act, 1956 and having its registered office at .................... hereinafter called "the company" (which expression shall, unless it be repugnant to the context or meaning thereof be deemed to mean and include its successors and assigns) of the ONE PART and M/s. XYZ a partnership firm registered under the Partnership Act, 1932 and having its place of business at .................. hereinafter called "the underwriters", (which expression shall unless it be repugnant to the context or meaning thereof, be deemed to mean and include every partner for the time being of the said firm, the survivor or survivors or the legal representatives, executors or administrators of the last partner) of the OTHER PART.

WHEREAS the company proposes to issue ............... equity shares of to Rs ..................... each and offer the same for public subscription at Rs ....................... per share in accordance with the terms of the draft prospectus, a copy of which is annexed hereto, or with such modifications therein as may be mutually agreed upon between the company and the underwriters.

AND WHEREAS the underwriters have agreed to underwrite the subscription of the said shares on the terms and conditions hereinafter appearing.

NOW IT IS HEREBY AGREED BETWEEN THE PARTIES AS FOLLOWS:

1. The company shall issue ...................... equity shares of Rs . ............ each for public subscription in terms of the draft prospectus, a copy of which is annexed hereto or with such modification therein, as may be mutually agreed upon between the parties, on or before the ................... day of …………. 2000, or such later date as shall be mutually agreed upon by the parties hereto not after the .......... day of ....................... 2000.

2. The underwriters shall on or before the closing of the subscription list apply for the .................... shares or cause the same to be applied for by the responsible persons, who shall pay on application, the application moneys payable on the shares applied for by them respectively and who shall not withdraw their applications before notification of allotment of shares to them.

3. If on the closing of the list under the said prospectus the said ...................... shares shall be allotted on the applications received from the public, the responsibility of the underwriters will cease and no allotment is to be made to the underwriters under this agreement, but if the said ............ shares shall not be allotted to the public, but any smaller number of such shares is so allotted, the underwriters undertake to stand for the difference between the said .......................... shares and the number of the shares allotted to the public and company may allot to the underwriters all the shares which shall not have been applied for by such members of the public or such responsible persons as aforesaid and the underwriters shall accept the shares so allotted and pay all application and allotment money in respect of those shares in accordance with the said prospectus.

4. The underwriters irrevocably authorise the company to apply for the said ............... shares or any part thereof in the name and on behalf of the underwriters in accordance with the terms of the said prospectus and authorise the directors of the company to allot the said ..................... shares of the company or part thereof to the underwriters and in the event of the company making an application for such shares in the names of the underwriters, the underwriters shall hold the company harmless and indemnified in respect of such application.

5. The company shall pay to the underwriters in cash a commission of .............................. per cent on the nominal value of the shares within ............. days from the allotment of the said ...................... shares. But should any allotment of the shares be made to the underwriters in accordance with the terms of this agreement, the commission shall not be payable until the underwriters pay the application and allotment moneys payable in respect of all the shares so allotted to the underwriters.

6. It is hereby agreed that time is the essence of this agreement.

7. This agreement shall be executed in duplicate. The original shall be retained by the company and the duplicate by the underwriters.

IN WITNESS WHEREOF the parties have signed these presents and a duplicate hereof the day and year first hereinabove written.

Signed and delivered by A 8 Ltd., the within named
company by its Managing Director Shri ..................

Signed and delivered by M/s. XYZ the within named
underwriters by their partners

WITNESSES;
1.

2.

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7 - AGREEMENT FOR CONSTRUCTION OF BUILDING BETWEEN THE OWNERS AND THE CONTRACTORS ON TURNKEY BASIS


THIS AGREEMENT made at ................ on this .................. day of .......... 2000, between A S/o B resident of ............................. (hereinafter referred to as "the Employer", which expression shall unless repugnant to the context or meaning thereof, be deemed to include his heirs, legal representatives, executors and administrators) of the ONE PART and XYZ Co. Ltd., a company incorporated under the Companies Act, 1956 and having its registered office at ...................................... (hereinafter referred to as "the Contractors" which expression shall, unless repugnant to the context or meaning thereof, be deemed to include its successors and assigns) of the OTHER PART.

WHEREAS the employer is desirous of constructing XYZ Bungalow and its vacant land bearing Final Plot No. ............... Survey No. ............... Khasra No. ............ situate, lying and being at .................. Tehsil and District ................... (hereinafter referred to as "the said property") and the contractors have offered to construct the same on a 'turnkey basis' and also to prepare the site layout plans, preliminary sketch designs, architectural drawings, structural drawings, service drawings and all other detailed plans and drawings as may be necessary for the proper construction and completion of the said works and also obtain necessary permissions from the Municipal Corporation ........... and other local authorities for executing and completing the said works as hereinafter specified upon and subject to the terms and conditions set forth herein and the conditions set forth in the special conditions hereto annexed and marked as Annexure 1 (all of which are collectively hereinafter referred to as "the said works") at the rate of Rs. .......... per sq. ft. of the built up area of the buildings (hereinafter referred to as "the said contract amount").

AND WHEREAS The employer has agreed to appoint the contractors for the said works; and

AND WHEREAS the contractors have requested the employer to execute these presents which he has agreed to do so.

NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:

1. In consideration of the said contract amount to be paid at the times and in the manner set forth in the Schedule of Payments hereto annexed, the contractors shall on and subject to the said conditions, execute and complete the said works more particularly described in Schedule 1 annexed hereto and shown on the said drawings, strictly in accordance with the general specifications annexed hereto and marked as Annexure III.

2. The employer shall pay the contractors the said contract amount or such other sum as shall become payable at the times and in the manner specified in Annexure II.

3. For the purposes of this contract, "built up area" means the total a covered area of the building at floor level out-to-out measurement of wall surface (architectural projection excepted) and shall be inclusive of staircase and balconies.

4. The contractors shall prepare layout plans and general building plans in consultation with the employer and get the same approved by the Municipal Corporation of ......................

5. It is hereby agreed that the contract amount shall be inclusive of-

(a) Preparation of the layout plans, general building plans, detailed architectural drawings, sketches, structural drawings and designs for execution.
(b) Technical supervision of the works.
(c) Obtaining of permission and approvals from all the authorities for the construction, supply of power, water, drainage and other services for the said works.
(d) Cost of all materials for construction.
(e) Wages of labour, technical supervisors, all other workers and staff required for execution of the said works in accordance with the general specifications in Annexure Ill.
(f) Cost of all electrical, sanitary, and plumbing fittings.
(g) Cost of all other items as mentioned in special conditions in Annexure I hereto.

6. The layout plans, general building plans, detailed architectural drawings and other drawings shall be and remain the property of the employer. All the drawings shall remain in custody of the contractors during the progress of the work and they shall deliver them to the employer on the performance of the said works or termination of the contract.

7. The employer may require alteration of the drawings and the nature of the work by adding or omitting any items of work or having portions of the same carried out. The employer shall make payment for the alterations at such rates as may be mutually agreed upon.

8. The contractors shall commence the work within 15 days of the handing over of the site to them and complete the entire work within .......... months thereafter, subject nevertheless to the provision for extension of time as provided in the said conditions.

9. The contractors, while carrying out the said works, shall comply with the provisions of all laws, rules and bye-laws for the time being in force affecting the said works and will give all necessary notices to and obtain the requisite sanction of the concerned local authorities in respect of the said works and will comply with the building and other regulations of such authority and will keep the employer indemnified against all fines, penalties and losses incurred by reason of the breach of the contractors of any such laws, bye-laws and regulations.

10. The employer shall make all payments under this contract at ........................

11. In case any dispute or difference should arise between the parties, whether in respect of quality of material used by the contractors or work done or in respect of delay in completion of works or in respect of payment of extra work required to be done and so executed or in respect of measurement of work done or in respect of delay of payment to the contractors or touching the interpretation, fulfillment of any of the terms of these presents or any other matter arising out of or in connection with these presents or the carrying out of the work, shall be referred to arbitration of two arbitrators, one to be appointed by each party. The arbitrators shall appoint an umpire before entering upon the reference. The arbitrators shall make their award within six months from the date of entering on the reference. If the arbitrators do not make their award within the stipulated period or have delivered to any party or to the umpire a notice in writing stating that they cannot agree, the umpire shall forthwith enter on the reference and shall make his award within three months of entering on the reference or within such extended time as the parties may agree and in the absence of such agreement, as the Court may allow. The arbitrators or umpire, as the case may be, shall be entitled to consult any expert, after previous notice to the parties, the cost whereof shall be borne by the parties equally. The proceedings of the arbitrators shall be recorded in English, a copy whereof shall be furnished to each party. The provisions of the Arbitration and Conciliation Act, 1996 so far as applicable and are not inconsistent or repugnant to these presents, shall apply to this reference to arbitration. The cost of the reference and award shall be in the discretion of the arbitrators, who may direct by whom and in what manner, the same or any part thereof shall be paid. The award of the arbitrators or umpire shall be final and binding on the parties and the parties, their executors and administrators shall on their respective parts obey, abide by the award and shall not challenge on any ground excepting fraud or collusion or error apparent on the face of the award. It is hereby agreed between the parties that the parties shall resort to arbitration, before filing any suit for the enforcement of any right under these presents.

12. This agreement shall be executed in duplicate. The original shall be retained by the employer and the duplicate by the contractors.

IN WITNESS WHEREOF the employer has set his hands to these presents and a duplicate hereof and the contractors have caused its common seal to be affixed hereunto and a duplicate hereof the day and the year first hereinabove written.

Signed and delivered by the hand of Shri A

The common seal of XYZ Co. Ltd. was hereunto affixed
pursuant to the resolution passed by the Board of
Directors at the meeting held on .......................
in the presence of Shri .........................a director
of the company, who has signed in token thereof

Seal
Signatures
WITNESSES;
1.

2.

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8 - AGREEMENT FORM BETWEEN OWNER AND A BUILDER
FOR CONSTRUCTION OF THE BUILDING

THIS AGREEMENT made at ....................... on this ............. day of ..................2000, between Shri........................ S/o ....................... resident of .............................. (hereinafter called 'the owner' which expression shall unless repugnant to the context or meaning thereof, be deemed to include his heirs, legal representatives, executors and administrators) of the ONE PART and M/s ABC Builders & Contractors, a partnership firm registered under Partnership Act, 1932 and having its registered office at .................. (hereinafter referred to as 'the builders' which expression shall unless repugnant to the context or meaning thereof, be deemed to include every partner for the time being of the said firm, the survivor or survivors or the legal representatives, executors or administrators of the last survivor of the OTHER PART.

WHEREAS the first party is the owner of the plot of land admeasuring .................... sq. meters bearing plot No. ........... city survey No. ...................... Khasra No. ..................... situate, lying and being at ...................... Tahsil and District ...................... (hereinafter referred to as the "said plot of land") and is desirous of getting a house constructed on the said plot of land.

AND WHEREAS the first party has appointed Shri ................. as the architect and the said architect has prepared the plans, drawings and elevations of the said intended house and the specification of the works to be done and of the materials.

AND WHEREAS the second party is a big contractor and is having vast experience in construction of big buildings and has agreed to construct the house on the said plot of land.

NOW IT IS AGREED BY AND BETWEEN THE PARTIES AS FOLLOWS:

The builders will construct the building on the said plot of land in conformity with the plans, drawings, specifications and elevations as prepared by the architect which has been annexed hereto and marked as Annexure A, with the material of best quality and in the most substantial and workman like manner and to the satisfaction of the architect.

The builders hereby undertake to commence the construction within fifteen days of execution of these presents and complete the construction on or before the expiry of ................... months from the date of execution of these presents in accordance with the plans duly approved and sanctioned by the Municipal Corporation of .................................. and specifications and conditions as are set out in Annexure A hereunder written.

If the builders fail to complete the said work within the period as stipulated in the foregoing provision, the builders shall, at the option of the owner but without prejudice to the other rights under law of the owner and other provisions herein, pay liquidated damages calculated at the rate of Rs.......... per day (but subject to a maximum of 2% of the total contract amount payable by the owner under this agreement) for the period between the said stipulated time for completion of the works. The builders hereby specifically agree and authorise the owner to deduct such liquidated damages, if any, from any installment of payment becoming due and payable to the builders in terms of this agreement.

The owner will pay to the builders a sum of Rs............. out of which the owner shall pay to the builders weekly such sum as may be sufficient to defray the expenses incurred by the builders in respect of materials used in the works, checked and certified by the architect, Rs ......... on the certificate by the architect that the work upto first floor has been completed, the further sum of Rs ............. on the certificate by the architect that the work upto second floor has been completed and the balance shall be paid on the certificate by the architect that the said works have been completed in all respects according to the agreement and the builders have at their own expenses removed and cleared all scaffolding, fencing, unused materials and rubbish from the premises and made and prepared the bungalow fit for use and habitation and immediate occupation. However, a sum equivalent to 5 per cent of the total contract amount payable by the owner under this agreement shall be retained by the owner as retention money, which shall be paid after a period of 12 months from the date of handing over the said bungalow complete in all respects and fit for occupation. The builders hereby agree and undertake to rectify all such defects as may be found or detected during the period of 12 months. If the builders fail to rectify the defects pointed out or decline to cure such defects as pointed by the owner within fifteen days from the date of reporting to the builders, the owner shall be entitled to have such defects cured by such other agencies as it may deem fit at the entire cost and risk of the builders and utilise the retention money; Provided further that in the event of the said retention money being inadequate to meet such costs, charges and expenses incurred by the owner for curing the defects in the construction, the builders shall within 7 days of a demand in writing made by the owner make good the defect, failing which the builders shall be liable to pay the same together with the interest at 15% per annum.

The owner shall allow free ingress to and egress from the premises to the builder’s servants, employees, sub-contractors and all other persons, who are necessary in connection with the carrying out of the works under the agreement.

The builders shall indemnify the owner in respect of all claims, damages or expenses payable in consequence to any injury to any employee, workman, nominee, invitee while in or upon the said premises. The builders shall also be responsible for any damage to buildings, whether immediately adjacent or otherwise and any damage to roads, streets, foot-paths, bridges or ways as well as all damages caused to the buildings, and work forming the subject to this contract by frost, rain, wind or other inclemency of weather.

If the builders abandon the contract or fail to commence the work or suspend the progress of the work for 14 days without any lawful excuse under these conditions, or fail to proceed with the works with such due diligence and fail to make such due progress as would enable d the works to be completed within the time agreed upon or fail to remove materials from the site or to pull down and replace work for seven days after receiving from the architect written notice that the said materials or the works were defective and rejected by the said architect or neglect or fail persistently to observe and perform all or any of the acts, materials or things required by this contract to be observed and performed by the owner for seven days after written notice shall have given to the builders requiring them to observe or perform the same and the architect certifies in writing to the owner to the said effect, then and in any of the said cases the owner may, notwithstanding any previous waiver, after giving seven days notice through the said architect in writing to the builders terminate the licence in favour of the builders and in so far as it relates to the completion of the remaining construction work, but without thereby affecting the powers of the architect, or the obligations and liabilities of the builders, the whole of which shall continue in force as fully as if this Agreement had not been so determined. And the owner by his servants or agents may enter upon and take possession of the work, tools, scaffolding, sheds, machinery, power, utensils and materials lying upon the premises or in the adjoining lands or roads and use the same as its own property or may employ the same by means of its own servants and workmen in carrying on and completing the work or by employing any other contractor or other person to complete the works and the builders shall not in any way interrupt or do any act, matter or thing to prevent or hinder such other contractor or other person or persons employed for completing and finishing the works or using the material and plant for the works.

When the said works are terminated in the manner as stipulated in the foregoing provision, the architect shall give a notice in writing to the builders to remove their surplus materials and plant, and should the builders fail to as so within a period of seven days, after receipt thereof by them, the owner may sell the same by public auction and give credit to the builders for the net amount realised. The architect shall thereafter ascertain and certify in writing, what (if any thing) shall be due or payable to or by the owner, for the value of the said building and materials so taken possession of by the owner and the expense or loss which the owner shall have been put to in procuring the work to be completed and the amount, if any, owing to the builders and the amount which shall be so certified shall thereupon be paid by the owner to the builders or by the builders to the owner, as the case may be, and the certificate of the architect shall be final and conclusive between the parties.

The builders shall be bound to appoint an engineer competent to receive instructions from the architect from time to time, on behalf of the builders at all reasonable hours and all directions given to him by the architect shall be deemed to have been given to the builders.

The owner or his representatives shall be entitled to inspect the progress of the construction work and materials used for the construction and they shall be entitled to point out to the architect any defects in the construction work, quality of workmanship or materials d used when such defective work is in progress or being executed or such material is brought on site. If the architect will be satisfied about the objections raised, the said architect shall certify the same in writing and direct the builders to rectify at their own cost the defect in the said construction work or remove such defective materials and the same shall be rectified or removed by the builders as directed.

All disputes or differences relating to the specifications, designs, drawings and as to quality of workmanship or material used in the work or as to any other question arising out of or relating to the contract, design, drawings, specifications, orders or otherwise in connection with the agreement or the carrying out of the works, whether during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of two arbitrators, one to be appointed by each party. The arbitrators shall appoint an umpire before entering upon the reference. The parties would cooperate and lead evidence, etc. with the arbitrators and if one of the parties does not cooperate or remains absent at the reference, the arbitrators or the umpire would be at liberty to proceed with the reference ex-parte. The arbitrators or the umpire shall keep record of the oral evidence adduced by the parties and submit the same to the court at the time of filing of the award, along with documentary evidence produced before them or him by the parties or their witnesses. The proceeding of the arbitrators or the umpire shall be recorded in English and a carbon copy whereof shall be furnished to each party. The arbitrators or umpire shall be entitled to appoint stenographer, for recording proceedings of the arbitration, consult an expert, after previous notice to the parties to the reference, the cost whereof shall be borne equally by the parties. The fees of the arbitrator appointed by a party shall be borne by the party, so appointing and the fees of the umpire and the other arbitration expenses shall be borne equally by the parties. The arbitrators shall make their award, with reasons for the decision, within six months from the date of entering upon the reference. If the arbitrators have allowed their time to expire without making an award or have delivered to any party or to the umpire a notice in writing stating that they cannot agree, the umpire shall forthwith enter on the reference. The umpire shall make his award within tour months of entering on the reference or within such extended time, as the parties may agree. The award of the arbitrators, or umpire, as the case may be, shall be final, conclusive and binding on the parties and shall not be challenged on any ground except collusion, fraud or an error apparent on the face of the award. This reference to arbitration shall be deemed to be a reference within the meaning of the Arbitration and Conciliation Act, 1996 or any statutory modification thereof. No action can be taken under this agreement for the enforcement of any right without resorting to arbitration under this clause.

This agreement shall be executed in duplicate, the original shall be retained by the owner and the duplicate by the builders.

IN WITNESS WHEREOF the parties have signed these presents and a duplicate thereof, the day and year first hereinabove written.



Signed and delivered by .................... the owner

Signed and delivered by M/s ABC Builders and Contractors,
the builders, by its partners

WITNESSES;
1.

2.
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9 - BUILDING AGREEMENT BETWEEN THE OWNERS AND THE CONTRACTOR ON FEE PLUS COST OF LABOUR AND MATERIALS

THIS AGREEMENT made at ....................... on this ............. day of ..................2000, between Shri........................ S/o ....................... resident of .............................. (hereinafter called 'the owner' which expression shall unless repugnant to the context or meaning thereof, be deemed to include his heirs, legal representatives, executors and administrators) of the ONE PART and M/s ABC Builders & Contractors, a partnership firm registered under Partnership Act, 1932 and having its registered office at .................. (hereinafter referred to as 'the builders' which expression shall unless repugnant to the context or meaning thereof, be deemed to include every partner for the time being of the said firm, the survivor or survivors or the legal representatives, executors or administrators of the last survivor of the OTHER PART.

WHEREAS the first party is the owner of the plot of land admeasuring .................... sq. meters bearing plot No. ........... city survey No. ...................... Khasra No. ..................... situate, lying and being at ...................... Tahsil and District ...................... (hereinafter referred to as the "said plot of land") and is desirous of getting a house constructed on the said plot of land.

AND WHEREAS the first party has appointed Shri ................. as the architect and the said architect has prepared the plans, drawings and elevations of the said intended house and the specification of the works to be done and of the materials.

AND WHEREAS the second party is a big contractor and is having vast experience in construction of big buildings and has agreed to construct the house on the said plot of land.

NOW IT IS AGREED BY AND BETWEEN THE PARTIES AS FOLLOWS:

1. The builders will construct the building on the said plot of land in conformity with the plans, drawings, specifications and elevations as prepared by the architect which has been annexed hereto and marked as Annexure A, with the material of best quality and in the most substantial and workman like manner and to the satisfaction of the architect.

2. The builders hereby undertake to commence the construction within fifteen days of execution of these presents and complete the construction on or before the expiry of ................... months from the date of execution of these presents in accordance with the plans duly approved and sanctioned by the Municipal Corporation of .................................. and specifications and conditions as are set out in Annexure A hereunder written.

3. If the builders fail to complete the said work within the period as stipulated in the foregoing provision, the builders shall, at the option of the owner but without prejudice to the other rights under law of the owner and other provisions herein, pay liquidated damages calculated at the rate of Rs.......... per day (but subject to a maximum of 2% of the total contract amount payable by the owner under this agreement) for the period between the said stipulated time for completion of the works. The builders hereby specifically agree and authorise the owner to deduct such liquidated damages, if any, from any installment of payment becoming due and payable to the builders in terms of this agreement.

4. The owner will pay to the builders a sum of Rs............. out of which the owner shall pay to the builders weekly such sum as may be sufficient to defray the expenses incurred by the builders in respect of materials used in the works, checked and certified by the architect, Rs ......... on the certificate by the architect that the work upto first floor has been completed, the further sum of Rs ............. on the certificate by the architect that the work upto second floor has been completed and the balance shall be paid on the certificate by the architect that the said works have been completed in all respects according to the agreement and the builders have at their own expenses removed and cleared all scaffolding, fencing, unused materials and rubbish from the premises and made and prepared the bungalow fit for use and habitation and immediate occupation. However, a sum equivalent to 5 per cent of the total contract amount payable by the owner under this agreement shall be retained by the owner as retention money, which shall be paid after a period of 12 months from the date of handing over the said bungalow complete in all respects and fit for occupation. The builders hereby agree and undertake to rectify all such defects as may be found or detected during the period of 12 months. If the builders fail to rectify the defects pointed out or decline to cure such defects as pointed by the owner within fifteen days from the date of reporting to the builders, the owner shall be entitled to have such defects cured by such other agencies as it may deem fit at the entire cost and risk of the builders and utilise the retention money; Provided further that in the event of the said retention money being inadequate to meet such costs, charges and expenses incurred by the owner for curing the defects in the construction, the builders shall within 7 days of a demand in writing made by the owner make good the defect, failing which the builders shall be liable to pay the same together with the interest at 15% per annum.

5. The owner shall allow free ingress to and egress from the premises to the builder’s servants, employees, sub-contractors and all other persons, who are necessary in connection with the carrying out of the works under the agreement.

6. The builders shall indemnify the owner in respect of all claims, damages or expenses payable in consequence to any injury to any employee, workman, nominee, invitee while in or upon the said premises. The builders shall also be responsible for any damage to buildings, whether immediately adjacent or otherwise and any damage to roads, streets, foot-paths, bridges or ways as well as all damages caused to the buildings, and work forming the subject to this contract by frost, rain, wind or other inclemency of weather.

7. If the builders abandon the contract or fail to commence the work or suspend the progress of the work for 14 days without any lawful excuse under these conditions, or fail to proceed with the works with such due diligence and fail to make such due progress as would enable d the works to be completed within the time agreed upon or fail to remove materials from the site or to pull down and replace work for seven days after receiving from the architect written notice that the said materials or the works were defective and rejected by the said architect or neglect or fail persistently to observe and perform all or any of the acts, materials or things required by this contract to be observed and performed by the owner for seven days after written notice shall have given to the builders requiring them to observe or perform the same and the architect certifies in writing to the owner to the said effect, then and in any of the said cases the owner may, notwithstanding any previous waiver, after giving seven days notice through the said architect in writing to the builders terminate the licence in favour of the builders and in so far as it relates to the completion of the remaining construction work, but without thereby affecting the powers of the architect, or the obligations and liabilities of the builders, the whole of which shall continue in force as fully as if this Agreement had not been so determined. And the owner by his servants or agents may enter upon and take possession of the work, tools, scaffolding, sheds, machinery, power, utensils and materials lying upon the premises or in the adjoining lands or roads and use the same as its own property or may employ the same by means of its own servants and workmen in carrying on and completing the work or by employing any other contractor or other person to complete the works and the builders shall not in any way interrupt or do any act, matter or thing to prevent or hinder such other contractor or other person or persons employed for completing and finishing the works or using the material and plant for the works.

8. When the said works are terminated in the manner as stipulated in the foregoing provision, the architect shall give a notice in writing to the builders to remove their surplus materials and plant, and should the builders fail to as so within a period of seven days, after receipt thereof by them, the owner may sell the same by public auction and give credit to the builders for the net amount realised. The architect shall thereafter ascertain and certify in writing, what (if any thing) shall be due or payable to or by the owner, for the value of the said building and materials so taken possession of by the owner and the expense or loss which the owner shall have been put to in procuring the work to be completed and the amount, if any, owing to the builders and the amount which shall be so certified shall thereupon be paid by the owner to the builders or by the builders to the owner, as the case may be, and the certificate of the architect shall be final and conclusive between the parties.

9. The builders shall be bound to appoint an engineer competent to receive instructions from the architect from time to time, on behalf of the builders at all reasonable hours and all directions given to him by the architect shall be deemed to have been given to the builders.

10. The owner or his representatives shall be entitled to inspect the progress of the construction work and materials used for the construction and they shall be entitled to point out to the architect any defects in the construction work, quality of workmanship or materials d used when such defective work is in progress or being executed or such material is brought on site. If the architect will be satisfied about the objections raised, the said architect shall certify the same in writing and direct the builders to rectify at their own cost the defect in the said construction work or remove such defective materials and the same shall be rectified or removed by the builders as directed.

11. All disputes or differences relating to the specifications, designs, drawings and as to quality of workmanship or material used in the work or as to any other question arising out of or relating to the contract, design, drawings, specifications, orders or otherwise in connection with the agreement or the carrying out of the works, whether during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of two arbitrators, one to be appointed by each party. The arbitrators shall appoint an umpire before entering upon the reference. The parties would cooperate and lead evidence, etc. with the arbitrators and if one of the parties does not cooperate or remains absent at the reference, the arbitrators or the umpire would be at liberty to proceed with the reference ex-parte. The arbitrators or the umpire shall keep record of the oral evidence adduced by the parties and submit the same to the court at the time of filing of the award, along with documentary evidence produced before them or him by the parties or their witnesses. The proceeding of the arbitrators or the umpire shall be recorded in English and a carbon copy whereof shall be furnished to each party. The arbitrators or umpire shall be entitled to appoint stenographer, for recording proceedings of the arbitration, consult an expert, after previous notice to the parties to the reference, the cost whereof shall be borne equally by the parties. The fees of the arbitrator appointed by a party shall be borne by the party, so appointing and the fees of the umpire and the other arbitration expenses shall be borne equally by the parties. The arbitrators shall make their award, with reasons for the decision, within six months from the date of entering upon the reference. If the arbitrators have allowed their time to expire without making an award or have delivered to any party or to the umpire a notice in writing stating that they cannot agree, the umpire shall forthwith enter on the reference. The umpire shall make his award within tour months of entering on the reference or within such extended time, as the parties may agree. The award of the arbitrators, or umpire, as the case may be, shall be final, conclusive and binding on the parties and shall not be challenged on any ground except collusion, fraud or an error apparent on the face of the award. This reference to arbitration shall be deemed to be a reference within the meaning of the Arbitration and Conciliation Act, 1996 or any statutory modification thereof. No action can be taken under this agreement for the enforcement of any right without resorting to arbitration under this clause.

12. This agreement shall be executed in duplicate, the original shall be retained by the owner and the duplicate by the builders.

IN WITNESS WHEREOF the parties have signed these presents and a duplicate thereof, the day and year first hereinabove written.



Signed and delivered by .................... the owner

Signed and delivered by M/s ABC Builders and Contractors,
the builders, by its partners

WITNESSES;
1.

2.

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10 - AGREEMENT TO DEMOLISH THE STRUCTURE, CLEAR THE SITE
AND TO CONSTRUCT NEW BUILDING ON THE PLOT

THIS AGREEMENT made at .............. on this ............ day of ................. 2000, between A son of Shri.......... resident of ........... (hereinafter called 'the Employer') of the ONE PART and XYZ Constructions, a partnership firm, carrying on the business of builders and contractors, having its office at .......... (hereinafter called 'the builders') of the OTHER PART

WHEREAS the employer is absolutely seized or otherwise well and sufficiently entitled to the old bungalow being House No. ............. Mohalla............ with an area of ........ sq. mts which bungalow is more particularly described in " First Schedule hereunder written, and is hereinafter referred to as 'the said bungalow.

AND WHEREAS the said bungalow has become very old and the employer intends to dismantle the said bungalow and construct a new bungalow on the said plot of land.

AND WHEREAS the builders are willing to undertake the said job of dismantling and construction of the new bungalow in accordance with the plan and specifications set out in the Second Schedule hereunder written.

NOW IT IS AGREED BETWEEN THE PARTIES AS UNDER:

1. The builders agree to undertake the work of dismantling the said bungalow and to construct a new bungalow in accordance with the plan, description and specifications set out in the Second Schedule hereunder written (hereinafter referred to as "the said works') in consideration of a sum of Rs.......... to be paid by the employer to the builders in the manner hereinafter provided.

2. The builders will dismantle the said bungalow, clear the site and construct the bungalow with the best available materials and in workmanship in accordance with the directions of the employer's architect (hereinafter referred to as the architect) in accordance with the plan, description, and specifications set out in the Second Schedule hereunder written. However, the employer may require the builders to alter the drawings and the nature of the work by adding or omitting any items of work. Such alterations shall be paid at such rates as may be mutually agreed upon.

3. The builders shall take away the building material of the old bungalow and shall clear and level the plot of land.

4. While demolishing and constructing the bungalow, the builders shall carry out the said Works in accordance with the law, rules and bye laws for the time being in force affecting the said works and shall give the necessary notices to and obtain the requisite sanction of the concerned local authorities in respect of the said works and shall comply with building and other regulations of such authority.

5. The builders shall complete the said works on or before the expiry of ...... months from the date of execution of these presents in accordance with the plans duly approved by the municipal corporation of ..... and descriptions and specifications and other terms and conditions as are set out in Third Schedule hereunder written:

Provided however the architect, with the previous consent of the employer, may extend the time for completion of the said works, it in his opinion the works are delayed (a) by force majeure; or (b) by reason of any exceptionally inclement weather; or (c) by reason of civil commotion, local combination of workman or strike or lock-out affecting any of building trades; or (d) in consequence of the builders not having received necessary instructions from the architect in due time; or (e) from other causes which the architect may certify as beyond the control of the builders.

6. The employer shall pay to the builders, weekly during the progress of the work, such sum as may be sufficient to defray the expenses for materials and other out of pocket expenses, as certified by the architect.

7. The builders hereby indemnify and keep the employer saved, defended and harmless against any claims, demands, actions or proceedings that may be suffered by the employer by reason of anything done by the builders as a result of the builders committing breach of any rules and regulations or causing damage to any adjoining property or any individual or otherwise howsoever in dismantling the property or constructing the new bungalow on the said property or any letters, applications and writings addressed by the builders pursuant to such authority as also for the costs, charges and expenses which may be incurred or for which the employer may become liable in that behalf.

8. The builders shall be responsible for injury to persons, animals or things and for all structural damages to the property which may arise from the operation or neglect of the builders or their employees, nominees, sub-contractors or their employees, whether such injury or damage arises from carelessness, accident or any other cause whatsoever in any way connected with the carrying out of construction pursuant to these presents. This clause shall be deemed to include, inter alia, any damage to buildings whether immediately adjacent or otherwise, and any damage to roads, streets, foot-paths, bridges or ways as well as all damages caused to the buildings and works forming the subject of this contract by frost, rain, wind or other inclemency of weather.

9. The builders shall, within one week from the date of commencement of the works, insure the works and keep them insured until the buildings complete in all respects and fit for occupation are handed over to the employer, against loss or damage by fire, earthquake, flood, cyclone, etc. with an insurer, in the joint names of the employer and the builders for the full amount of the contract and for any further sum, if called upon to do so by the employer. The premium of such further sum shall be reimbursed to the builders by the employer. The builders shall deposit the insurance policy and receipts for the premia with the employer within fourteen days from the commencement of the works, unless otherwise instructed by the employer. In case the builders fail to insure as provided above, the employer may so insure the works and may deduct the premium paid from any moneys due or which may become due to the builders without prejudice to the other rights of the employer in respect of such default. In case it becomes necessary to suspend the works due to any of the risks covered under the policy, the builders shall, as soon as the claim under the policy is settled, or the work reinstated should proceed with all due diligence with the completion of the works in the same manner as though the risk had not occurred and in all respects under the same conditions of contract. The builders in case of rebuilding or reinstatement after the risk, shall be entitled to such extension of time for completion of the works, as the architects shall deem fit.

10. If the builders (i) have abandoned the contract; or (ii) have failed to dismantle the old bungalow and remove, clean and level the plot of land; or (iii) have failed to commence the works or have without any lawful excuse under these presents suspended the progress of the works for fourteen days after receiving from the architect notice to proceed; or (iv) have failed to proceed with the works with such due diligence and failed to make such due progress as would enable the works to be completed within the time agreed upon; or (v) have failed to remove materials from the site or pull down and replace work for seven days after receiving from the architect written notice that the said materials or work were condemned and rejected by the architect under these presents; or have neglected or failed persistently to observe and perform all or any of the acts, matters or things by this contract to be observed and performed by the builders for seven days after written notice shall have been given to the builders requiring them to observe or perform the same; then and in any of the said cases the employer may, after giving seven days notice in writing to the builders, terminate the contract, on such termination of the contract the employer by his agents or servants may enter upon and take possession of the works and all plants, tools, scaffoldings, sheds, machinery and other utensils and materials lying upon the premises or the adjoining lands or roads, and use the same as his own property or and employ the same by means of its own servants and workmen in carrying on and completing the works or by employing any other contractor or other person or persons to complete the works, and the builders shall not in any way interrupt or do any act, matter or things to prevent or hinder such other contractor or other person or persons employed for completing and finishing the works or using the materials and plant for the works. When the works shall be completed or as soon thereafter as convenient the architect shall give a notice in writing to the builders to remove their surplus materials and plant, and should the builders fail to do so within a period of fourteen days after receipt thereof by them, the employer may sell the same by public auction, and give credit to the builders for the net amount realised. The architect shall ascertain and certify what s a be due or payable to or by the employer for the value of the said materials, plants are so taken possession of by the employer and the amount which shall be so certified shall thereupon be paid by the employer to the builders or by the builders to the employer, as the case may be and the architect's certificate shall be final and binding on both the parties.

11. If the builders fail to complete the said works within the period or extended period, the builders shall at the option of the employer, but without prejudice to the other rights under law of the employer and the other provisions herein shall pay by way of liquidated damages a sum of Rs ......... per day for the entire period of delay and the employer will be entitled to deduct such damages from the amount becoming due and payable to the builders under this Agreement.

12. The builders shall not assign this contract to any other builder or contractor, without written consent of the employer.

13. The builders hereby agree and undertake to rectify the defects pointed out to them during the period of 12 calendar months from the date of handing over the said buildings to the employer. If the builders fail to rectify the defects pointed out or decline to cure such defects as pointed out by the employer within fifteen days from the date of reporting to the builders, the employer may get such defects cured by such other contractors as it may deem fit at the entire cost and risk of the builders.

14. The builders shall deliver all the plans, detailed drawings and specifications to the employer after the completion of the said works or otherwise terminated under these presents.

15. All disputes arising between the employer and the builders under this Agreement during the continuance of this contract or on its completion or on abandonment thereof, shall be referred to arbitration to a single arbitration appointed by both the parties. It both the parties do not agree upon the appointment of single arbitrator, each party shall nominate his own arbitrator who shall before entering on the reference appoint an umpire. The arbitrator or arbitrators as the case may be shall deliver the award within a period of six months from the date of entering on the reference. The award of the arbitrator or arbitrators shall be final and binding on the parties. The parties agree that arbitration under this clause shall be a condition precedent to any right of action under the contract.

IN WITNESS WHEREOF the employer and builders have signed these presents, the day and year first hereinabove written.

Signed and delivered by A....................
the within named employer

Signed and delivered by M/s. XYZ Constructions,
the within named builders by their partners

WITNESSES;
1.

2.

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11 - AGREEMENT BETWEEN OWNERS AND LABOUR CONTRACTOR
FOR SUPPLY OF LABOUR

THIS AGREEMENT made between A, son of B, resident's of ............... hereinafter referred to as the owner of the ONE PART and C, son of D, resident of .......... hereinafter referred to as the contractors of the OTHER PART.

WHEREAS the owner is getting the construction of building on the land bearing Plot No.......... Survey No. ......... House No. ...... situate, lying and being in village......... Tehsil ........ District.......... hereinafter referred to as the 'said work' and is desirous of availing of labour for the said work.

AND WHEREAS The contractors are the contractor for the supply of all types of labour required for the construction work and offered their services to the owner, which the owner has agreed on the terms and conditions hereafter set forth.

NOW IT IS MUTUALLY AGREED BETWEEN THE PARTIES AS UNDER:

1. The contractors will supply all labour viz. masons, labourers, water carriers and other necessary workers required for the said work to the owner at site provided that the requisition thereof is made .......... hours in advance.

2. The labour shall be paid at the prevailing market rate. The present prevailing market rate of labour of all type has been given in the Schedule hereunder written. The said rates may be changed by the mutual consent of the parties.

3. The contractors will be entitled to a commission of .......... on the total disbursement made to the labour so supplied by them. The said commission shall be payable to the contractors every week.

4. The contractors will be liable for and make good any loss or damage, caused by any act or default on the part of the labour supplied by them.

5. If the contractors fail to supply necessary labour on a requisition made by the owner in time, they will be liable to pay a sum of Rs. ............. as liquidated damages per labourer, mason, water carrier or any other worker not supplied by them in accordance with the requisition by the owner.

IN WITNESS WHEREOF the parties hereto have set their respective hands to these presents on the date, month and year hereinabove written.

Signed and delivered by
the within named owner A

Signed and delivered by
the within named contractors C
WITNESSES;
1.

2.

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12 - AGREEMENT BETWEEN AN OWNER AND AN ARCHITECT
FOR CONSTRUCTION OF A BUILDING

THIS AGREEMENT made at ......... on this ....... day of........ 2000 and .......... between A, son of Shri X residing at .......... (hereinafter called "the Employer" which expression, unless it be repugnant to the context or meaning thereof be deemed to mean and include his heirs, administrators, executors, legal representatives, successors and assigns) of the ONE PART and Shri........... ......... carrying on business in the partnership name and style of M/s ......... , having their place of work at .......... (hereinafter called "the architects" which expression shall unless it be repugnant to the context or meaning thereof be deemed to mean and include every partner for the time being of the said firm, the survivor or survivors of the legal representatives, administrators and assigns of the last survivor) of the OTHER PART.

WHEREAS the employer is desirous of constructing a building for his residence at ........……….

AND WHEREAS the employer is desirous of appointing the architects as architects for the said building (hereinafter referred to as the "said works") and WHEREAS the architects have accepted the said appointment on the terms and conditions hereinafter contained.

Now, therefore, it is hereby agreed by and between the parties hereto as
follows:-

1. The employer appoints M/s............ Architects, as architects for the said works.

2. The architects shall render the following services in connection with and in regard to the said works:-

(a) Preparation of sketch designs (including carrying out necessary revisions till the sketch designs are finally approved by the employer), making approximate estimates to enable the employer to take a decision on the sketch designs;

(b) Submission of the site plans and other drawings to the municipal corporation ........... and obtaining its approval;

(c) Preparation of architectural working drawings, making structural calculations and preparing all structural, mechanical, sanitary, plumbing, drainage, electrical drawings, specifications, detailed estimates of cost or such other particulars as may be necessary for the preparation of bills of quantities;

(d) Preparation of landscapes and planting drawings;

(e) Preparation of six copies of the contract documents including all drawings, specifications, bill of quantities, or other particulars and such further details and drawings, as are necessary for the proper execution of the works; (f)Supervision and inspection of the said works by the general contractor, sub-contractor, consultant, etc. that may be engaged from time to time by visiting the site periodically;

(f) To check measurements of works at site, checking contractor's bills, issuing periodical certificates for payment and passing and certifying accounts, so as to enable the employer to make payments to the contractors and making adjustment of all accounts between the contractors and the employer;

(g) Submission of detailed account of the steel, cement and any such other material as the employer may specify, and certify the quantities utilised in the works;

(h) Obtaining of building completion certificate and securing permission of
Municipal Corporation or other authority for the occupation of the building and obtaining refund of deposits, if any, made by the employer to the Municipal Corporation or other authority;

(i) Any other service connected with the said works usually and normally rendered by architects and not referred to in any of the items referred to above.

3. The architects shall submit to the employer the sketch plans, tender documents, etc. within the period stipulated in the Schedule hereto annexed.

4. The architects shall exercise all reasonable skill, care and diligence in the discharge of duties hereby covenanted to be performed by them and shall exercise such general superintendence and inspection in regard to the said works as may be necessary to ensure that the work is being executed in accordance with the working drawings and specifications aforesaid and that the work is free from defects and deficiencies. The architects shall be fully responsible for the structural soundness of the works.

5. The construction cost shall not exceed Rs. ........... per square meter and should conform to the norms of ......... The construction cost shall not include:-

(a) cost of land;
(b) architects fees;
(c) any services relating to fitting or fixtures not designed by the architects; and
(d) soil testing fees.

6. The architects shall not make any deviation, alteration, addition or omission from the approved drawings without the prior written consent of the employer.

7. The architects shall on the completion of the work supply to the employer at their expenses two copies of one-eighth scale drawings (one of which shall be in tracing cloth); two complete sets of structural drawings and two sets of drawings sufficient to show the main lines of drainage, electrical installation and other essential services.

8. The architects shall arrange for taking trial bores, test pits, or other preliminary tests required to be carried out before the commencement of the said works and submit their report to the employer. The cost of carrying out such tests shall be borne by the employer.

9. The architects shall prepare a comprehensive program of work in consultation with the contractors, and arrange to have the work completed in an expeditious manner and in accordance with the program drawn up.

10. The architects shall, at their own expenses engage a qualified (i) Electrical Engineer; and (ii) Sanitary, Drainage and Water Supply Consultant with the qualifications and experience approved by the employer to assist them in their work.

11. Either party may terminate this agreement at any time by giving a written notice of two months to the other party. Even after the termination of their employment, the architects shall remain liable and be responsible for due certification/approval of any bills submitted by the contractors at any time, in respect of the work, executed before the termination of the architect's appointment; but shall not be entitled to additional remuneration therefor. If the architects shall close their business or die or become incapacitated from acting as such architects, then the Agreement shall stand terminated. If the architects fail to adhere to the time Schedule stipulated in the Schedule hereto annexed or the extended time which may be granted by the employer in its sole discretion, or in case there is any change in the constitution of the firm of the architects for any reason whatsoever, the employer shall be entitled to terminate this agreement and entrust the work to some other architect.

12. The employer or the architects shall not assign, sublet or transfer their interest in this agreement without the written consent of the other.

13. The employer shall pay to the architects as remuneration for the services to be rendered by the architects in relation to the said works, and in particular for the services hereinbefore mentioned, a fee calculated at the rate of 3% on the value of the works as estimated (including the authorised extra) or the value of the works actually executed and completed whichever is less.

14. The employer shall pay fees to the architects in stages as follows:-

(a) 10% of the total fees, payable after completion and approval of the site plans by the employer;
(b) 30% of the total fees [less any amounts paid under clause (a) above], payable after completion of all drawings and the approval of site plan by the Municipal Corporation or other authorities;
(c) 10% on completion of detailed estimates, submission or recommendations on the contractor's rate to the employer, and execution of the contract documents for the various trades. The employer may make part payments in proportion to the services completed in respect of particular trades;
(d) Out of the remaining 50% of the total fees, 30% of the total fees shall be paid by installments as the building work proceeds, and in proportion to the value of the said works as certified from time to time and balance 10% after final completion of the building and closing of accounts;
(e) In case this agreement is terminated earlier, fees shall be paid to the architects for the actual services rendered as per stages referred to in this clause.

15. If the architects fail to observe the time schedule, they shall be liable to pay to the employer-liquidated damages at the rate of Rs. ......... per day till the work remains incomplete. The employer shall be entitled to recover the said liquidated damages from any sum payable to the architects under this agreement.

16. Notwithstanding anything contained hereinabove, it shall always be open to the employer to exclude from the scope of the services to be rendered by the architects under these presents the supervision and execution part of the project and reduce the scale of fees, in which case the terms, conditions, scale of fees, etc. shall be as detailed in the Annexure hereto.

17. If any dispute, difference or question shall at any time arise between the parties as to the interpretation of this agreement or arising out of this agreement or as to the rights, liabilities and duties of the parties hereunder, or as to the execution of the said works, the same shall be referred to the arbitration and final decision of an arbitrator to be agreed upon and appointed by both the parties or in case of disagreement as to the appointment of a single arbitrator, to the appointment of two arbitrators one to be appointed by each party, which arbitrators shall, before taking upon themselves the burden of reference, appoint an umpire whose decision in the matter shall be binding on both the parties. It is hereby provided that the arbitrator so appointed shall make his award within six months from the date of the arbitrator or arbitrators, as the case may be, entering on the reference. This submission to arbitration shall be deemed to be a submission to arbitration within the meaning of Arbitration and Conciliation Act, 1996 or any statutory modification thereof. The award of the arbitrator or arbitrators, as the case may be, shall be final and binding on the parties. The parties agree that if work under this agreement has not been completed at the time of reference of dispute to arbitration, the work shall continue during the arbitration proceedings and the employer shall make the payment to the architects within the provisions of this agreement and shall not withhold any money payable to the architects on account of arbitration proceedings unless authorised by the arbitrators.

18. This agreement shall be executed in duplicate and the architects shall bear the stamp duty on the original. The employer shall retain the original and the architects shall retain the duplicate.

IN WITNESS WHEREOF the parties hereto have subscribed their respective hands hereto and on a duplicate hereof on the day and year hereinabove first mentioned.

Signed and delivered by the within named employer A

Signed and delivered by the within named architects
by its Managing Partner
WITNESSES;
1.
2.





Schedule Period
1. Submission of site plan Within .......... days from the date of the execution of this agreement.

2. Submission of the required plans Within .......... days from the
to the Municipal Corporation and date of receipt
other local authorities of employees
approval of the site plan.

3. Submission of detailed working Within .......... weeks from the
drawings and estimates date of receipt of employer's approval of the site plans.

4. Submission of architect's Within 2 weeks from the date of
recommendations on the receipt of the tenders from the
contractor's rates employer.

5. Other drawings, etc., if any Within a reasonable time.

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13 - FORM FOR AGREEMENT BETWEEN THE EMPLOYER AND EMPLOYEES FOR REFERENCE OF DISPUTES TO ARBITRATION

AGREEMENT
BETWEEN
Names of the Parties;

Representing employers:
Representing workmen/workman:

It is hereby agreed between the parties to refer the following dispute to the arbitration of .............................. [here specify the name(s) and addressees) of the arbitrator(s)]:

(i) Specific matters in dispute;
(ii) Details of the parties to the dispute including the name and address of the establishment or undertaking involved;
(iii) Name of the workman in case he himself is involved in the dispute or the name of the Union, if any, representing the workmen or workman in question;
(iv) Total number of workmen employed in the undertaking affected;
(v) Estimated number of workmen affected or likely to be affected by the dispute.

We further agree that the majority decisions of the arbitrator(s) be binding on us. In case the arbitrators are equally divided in their opinion, that they shall appoint another person as umpire whose award shall be binding on us.

The arbitrator(s) shall make his (their) award within a period of ............................ (here specify the period agreed upon by the parties) or within such further time as is extended by mutual agreement between us in writing. In case the award is not made within the period aforementioned, the reference to arbitration shall stand automatically cancelled and we shall be free to negotiate for fresh arbitration.

Signature of the parties.

Representing employer.
Workman/Representing WORKMAN / WORKMEN WITNESSES;

(1)

(2)

Copy to:
(i) The Assistant Labour Commissioner (Central), .................. (here enter office address of the Conciliation Officer in local area concerned).
(ii) The Regional Labour Commissioner (Central)...........................
(iii) The Chief Labour Commissioner (Central), New Delhi.
(iv) The Secretary to the Government of India, Ministry of Labour, Employment and Rehabilitation (Department of Labour and Employment), New Delhi.

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14 - FORM FOR MEMORANDUM OF SETTLEMENT OF INDUSTRIAL DISPUTE BETWEEN EMPLOYER AND EMPLOYEES

FORM FOR MEMORANDUM OF SETTLEMENT

Names of Parties
Representing employer(s):
Representing workmen:

Short Recital of the Case
Terms of settlement

Signature of the parties
…………….................
....................................

Witness:

(1)

(2)

Conciliation Officer
Signature of ……………….

Board of Conciliation

Copy to:
(1) Assistant Labour Commissioner (Central) .................................. [Here enter the office address of the Assistant Labour Commissioner (Central) in the local area concerned].
(2) Regional Labour Commissioner (Central) ...................................
(3) Chief Labour Commissioner (Central), New Delhi.
(4) The Secretary to the Government of India, Ministry of Labour, New Delhi.

Conciliation Officer
In case of settlements effected by ………………..

Board of Conciliation

In case where settlements are arrived at between the employer and his workmen
otherwise than in the course of conciliation proceeding.

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15 - FORM OF AGREEMENT BETWEEN THE EMPLOYER AND WORKMAN REGARDING COMPENSATION FOR INJURY CAUSED
TO WORKMAN BY ACCIDENT

MEMORANDUM OF AGREEMENT

It is hereby submitted that on the ...................................... day of ............................, 2000, personal injury was caused to ..................................... residing at .................... by accident arising out of and in the course of employment in .................. .............................................. The said injury has resulted in temporary disablement to the said workman whereby it is estimated that he will be prevented from earning more than of his previous/ any wage for a period ................................ months. The said workman has been in receipt of half-monthly payments which have continued from the ................ day of ........................ 2000 until the .......................... day of .............................. 2000, amounting to Rs. ................ in all. The said workman's monthly wages are estimated at Rs. ................ The workman is over the age of 15 years/ will reach the age of 15 years on .................... It is further submitted that .....................….... I, the employer of the said workman has agreed to pay, and the said workman has agreed to accept, the sum of Rs. ..................... in full settlement of all and every claim under the Workmen's Compensation Act, 1923, in respect of all disablement of a temporary nature arising out of the said accident, whether now or hereafter to become manifest. It is, therefore, requested that this memorandum be duly recorded.

Dated.......................

Signature of employer ..................................................
Witness.........................................................................

Signature of workman ......................................
Witness.........................................................................

Note.-An application to register an agreement can be presented under the signature of one party, provided that the other party has agreed to the terms. But both signatures should be appended, whenever possible.

Receipt (to be filled in when the money has actually been paid).

In accordance with the above agreement, I have this day received the sum of
Rs. ……………………………..

Dated …………2000.
………………………..workman

The money has been paid and this receipt signed in my presence.

.……………………….witness

Note.—This form may be varied to suit special cases, e.g., injury by occupational disease agreement when workman is under legal disability etc.

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16 - AGREEMENT BETWEEN A COMPANY AND MANAGER


THIS AGREEMENT made at ................................ this ............ day of ........................2000, between XYZ Co. Ltd., a company incorporated under the Companies Act, 1956 and having its registered office at ................................ hereinafter called the company, of the ONE PART and Shri A son of B resident of ....................................... hereinafter called Shri A of the OTHER PART.

WHEREAS the company is engaged in manufacture of steel in various forms at its factory at ……....................................................

AND WHEREAS Shri....................................... who was working as the factory manager with the company has resigned and went abroad for higher studies.

AND WHEREAS The company wanted to employ a manager for its factory and for that purpose advertised the vacancy in the leading newspapers and after interviewing all the candidates, who had applied for the post, has selected Shri A for the post of Manager.

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17 - AGREEMENT BETWEEN A COMPANY AND ITS BRANCH MANAGER


THIS AGREEMENT made at ...................... this .................. day of .................... 2000, between ABC Co. Ltd., a company incorporated under the Companies Act, 1956 and having its registered office at ......................... hereinafter called the company of the ONE PART and X son of ........................... resident of ........................ hereinafter called Shri X.

WHEREAS the company is engaged in the manufacturing and sale of computers and other electronic gadgets and is desirous to open a branch at Bombay to look after the sale of its products in the States of Punjab, Haryana and Delhi.

AND WHEREAS the company is interested to appoint a Manager for the new branch office, who can look after its business interest and promote sale of its products in the States of Punjab, Haryana and Delhi;

AND WHEREAS Shri X is experienced in sale of consumer goods and management of office and he has offered his service to the company for the post of branch manager, which the company has agreed.

NOW THIS AGREEMENT WITNESSETH that it has been agreed between the parties as follows:

(1) The company appoints Shri X for a period of five years as branch manager of its Delhi branch at a salary of Rs. ............... per month and commission at the rate of ................... % on the entire sale in the States of Punjab, Haryana and Delhi

(2) Shri X will devote his full time, skill and attention to the company business. He will also ensure the promotion of sales of the company products in the territories covered by the branch by canvassing by different modes as he deems fit.

(3) Shri X will not engage in any other business or service during the tenure of his service with the company.

(4) Shri X will maintain proper accounts and other records of the branch office which should show the income, expenditure, goods received, sold and in balance and other necessary details which are necessary in such business. The necessary vouchers, receipts and supporting documents will also be maintained properly. The accounts, records and other documents will be open to inspection to the company's representatives.

(5) Shri X will look after the interests of the company in the territories covered by the branch and if he comes to know about the misuse of patent and trade mark of the company products or any developments which may be necessary for the company for its business, he shall immediately advise the company about the same.

(6) Shri X will work under the instructions and orders of the company issued from time to time. Shri X will immediately furnish information or data called by the company from time to time.

(7) The company can terminate Shri X before the period of expiry of this agreement by giving three months notice or salary for three months in lieu thereof, without assigning any reason and A will have no right against the company in the case of premature termination of service.

(8) Shri X will be entitled to reimbursement of tour expenses at the rates admissible to other senior executives of the company from time to time.

IN WITNESS whereof the parties hereto have set their hands to this agreement on the day and year first above mentioned.

Signed and delivered by the withinnamed company
ABC Co. Ltd. through the hands of Shri A,
Managing Director, Authorised official

Signed and delivered by the withinnamed X
WITNESSES;
1.

2.

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18 - SEPARATION AGREEMENT BETWEEN HUSBAND AND WIFE



THIS AGREEMENT made at.......... on this .......... day of ...............2000, between A, son of B, resident of ........... (hereinafter called "the husband") of the ONE PART and Smt. X his wife (hereinafter called "the wife") of the OTHER PART.

WHEREAS the husband and wife are living separately due to differences and disputes having arisen between them; and

AND WHEREAS they want to live separate, apart from each other and intend to live separate at all times hereafter unless there is any reconciliation.

NOW THIS AGREEMENT WITNESSETH THAT:

1. The parties shall live separately and apart from each other and no party shall have any right, authority over the other or shall institute any legal proceeding for restitution of conjugal rights or otherwise.

2. The husband shall during the life time of the wife pay to her a sum of Rs............ p.m. for her maintenance and the maintenance of the children. However, if the wife does not lead a chaste life, the husband shall be entitled to stop the payment of maintenance allowance after giving her notice.

3. The wife shall be entitled to the custody and guardianship of the children of the marriage, namely C and D now aged ........ years and .......... years, respectively. The wife shall maintain and educate the said children until they shall respectively attain the age of majority. The husband shall not be liable for any claim or demands of the children and the wife shall keep the husband indemnified from and against all claims and demands in respect of such children.

4. The wife shall pay for and discharge all liabilities or debts incurred by her after the date of these presents, whether for maintenance, support or otherwise and the husband shall not be liable for the same. The wife indemnify and keep indemnified the husband against all claims, actions and demands on that account and if the husband has to pay any sum on account of the liabilities of debts incurred by the wife, he is entitled to deduct the same from the amount payable to the wife under this agreement.

5. The wife may remove all her wearing apparel, jewelry and other personal effects, etc. belonging to her from the husband's place and retain the said goods as her separate properly.

6. The husband may have the access to the children at every Sunday between 7.00 A.M. to 9.00 P.M. He may have the sole society of the children in the said timings on the said day.

7. Notwithstanding anything contained in this agreement, it is expressly agreed that if at any time hereafter, the parties live together as husband and wife with mutual consent, then in that case, the said sum payable to the wife-under this agreement shall no longer be payable and the agreements hereinabove contained shall become void.

8. This agreement shall be revoked by the death of either the husband or wife.

9. This agreement shall be executed in duplicate. The original shall be retained by the husband and duplicate by the wife.

IN WITNESS WHEREOF, the parties have set their respective hands to these presents and a duplicate hereof on the day and year first hereinabove written.

Signed and delivered by the within named husband A.

Signed and delivered by the within named wife Smt. X
WITNESSES;
1.

2.


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19 - LETTER OF APPOINTMENT OF AN OFFICER

Shri ................................. .......................................

Dear Sir,

With reference to your application dated ................... and further tests and interview, we are pleased to inform you that you have been appointed by the company as an officer on the following terms and conditions:

1. Your salary will be Rs. .............. p.m. in the pay scale of .......... plus other allowances as admissible to the officers of the company from time to time.

2. You will be on probation for a period of one year (extendable upto two years at the discretion of the company) from the date of your appointment. You will be eligible to draw annual increments during the probation period. However, grant of an increment would not mean that the company considers you suitable for being confirmed in the company's service.

3. You are liable to be posted in any of the offices of the company and to work in any of its departments. You are also liable for transfer to any place in India as the company may decide from time to time without payment of any allowance other than travelling allowance.

4. You will be governed by the XYZ Co. (Staff Regulations, as amended from time to time.

5. You will not engage in any other work or carry out any other business except with the permission of the company.

If the above terms and conditions are acceptable to you, please advise us on or before ……………………………….. If no reply is received upto that date, it will be presumed that you are not interested in the company’s appointment and your name will be deleted from the selected list.

Yours faithfully

(……..…………..)
Personal Manager

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20 - APPOINTMENT LETTER OF A PROBATIONER

................... ...................

Date.................

To,

Shri ...........................
................................

Dear Sir,

With reference to your application dated ...................... for the captioned post and subsequent test and interview, we are pleased to advise you that you have been selected as a probationer for a period of two years in the ............. department of the company on the following terms and conditions:

1. Date of appointment
You will be appointed as a probationer with effect from ................

Probation period
The probation period will be one year. However, the said period can be extended at the discretion of the company for a further period of ..................... years.

3. Salary during probation
During the probation period, you will be entitled to fixed salary of Rs. .................. per month.

4. Appointment after expiry of probation period, in case found suitable
If after the expiry of probation period, you are found suitable by the company, you will be confirmed in your appointment on a salary of Rs. ...................... in the scale of ......................... plus other admissible allowances and contributory provident fund. If you are not found suitable for the job, your appointment will be terminated at the discretion of the company and in case of such termination you will have no right or claim against the company.

5. Standing orders
You shall abide by the terms and conditions of the standing orders and the rules of the company as in force from time to time.

6. To obey orders and directions of the Manager
You shall obey the orders, directions of the Manager and other officers of the company.

In case you are agreeable to the above please confirm and sign duplicate copy of this letter as a token of your acceptance.

Yours faithfully,

Manager
I agree and accept the above terms/conditions.

Signature of the Probatio


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21 -AGREEMENT BETWEEN A COMPANY AND SECURITY SERVICE COMPANY FOR PROVIDING SECURITY SERVICES TO THE COMPANY'S PROPERTY

THIS AGREEMENT made at ......... on this ......... day of ....... 2000, between ABC Co. Ltd., a company incorporated under the Companies Act, 1956 and having its registered office at ................ (hereinafter referred to as "the Employer", which expression shall unless repugnant to the context or meaning thereof be deemed to mean and include its successors and assigns) of the ONE PART and XYZ Security Guards (P) Ltd., a company incorporated under the Companies Act, 1956 and having its registered office at .......... (hereinafter referred to as "the Company" which expression shall unless it be repugnant to the context or meaning thereof be deemed to mean and include its successors and assigns) of the OTHER PART.

WHEREAS the employer is having its factory at .......... hereinafter referred
to as "the said factory" and it wants to employ security guards to provide security services to the said factory.

AND WHEREAS The company, who is experienced in providing security services to the industrial units and other organisations has offered to provide security services to the Employer at the said factory and the employer has agreed to avail the said services being provided by the company.

NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:

The company shall provide .......... security guards to keep ward and watch and protection of the said factory as per the employer's requirement. The security guards provided by the company will be for twenty-four hours in the shift of 8 hours and shall provide complete security arrangement and protection of the said factory round the clock.

The employer shall give the watchmen's hut constructed on the gate of the said factory to the security guards and the said guards shall cheek all the vehicles and personnel entering into and going out of the said factory as per the instructions issued by the employer's representative from time to time and shall maintain proper record of the vehicles and personnel coming and going out of the factory.

The company at its own expenses shall provide its security guards with necessary uniform, arms, outfit, etc. required for the effective discharge of security services to the employer.

The company shall ensure that the security guards provided by it maintain perfect discipline and behavior and they shall not in any manner cause any interference, annoyance, nuisance to the management of the employer or its business or work or its officers/ employees/other contractors.

The company agrees and undertakes that the security services provided by the security guards shall be to the entire satisfaction of the employer and the company will make it clear to the security guards that the latter are employees of the company and they shall have no claims against the employer and the employer shall not be liable to wages, salary, compensation and any statutory benefits due to the security guards under the labour law and other legislation and the company shall be responsible for providing such amenities to its employees admissible under the law/rules/service conditions.

The company will indemnify the employer against any claim, loss, damage occurred, or caused to the employer due to willful acts or omissions or carelessness or negligence of the security guards employed by the company, while on duty.

The employer shall pay a sum of Rs. ......... (Rupees............... only) per security guard per month and a sum of Rs. ......... per security guard for three national holidays for the services provided by the company on submission of the bill by the company by 10th day of the following month. The employer shall not make any payment to the security guards and payment will be made to the company only.

The company will obtain licence, if any, required under the local or central laws for providing security services to the employer.

The employer shall be entitled to supervise the services provided by the company and if it finds that the conduct, behavior and performance of work of any of its security guard is unsatisfactory, it may issue directions to the company to immediately recall the particular person and substitute him by another and the company shall comply with such directions issued by the employer forthwith.

This agreement will be for a period of one year from the date of execution of these presents. The employer shall, in the event of the company committing any breach of any of the terms and conditions of this agreement or if the services provided by the company is considered to be unsatisfactory by the employer or for any other reason considered by the employer as sufficient, be entitled to terminate this agreement by giving one month's notice in writing and the company shall not be entitled to any compensation in case of such termination. The company may also terminate this Agreement by giving one month's notice in writing to the employer.

On expiry or earlier determination of this agreement, the company and the security guards shall vacate the factory premises, without in any way causing any damage to the said premises and the factory's property therein.

In case of any dispute or difference arising between the parties under this agreement, the decision of ......... will be final and binding and the company will not be entitled to lodge any claim against the decision of the said Shri ……………...........

The stamp duty on this agreement and duplicate thereof shall be borne by the company. The original shall be retained by the employer and the company shall retain the duplicate.

Unless otherwise agreed upon, the respective addresses for communication in respect of any matter relating to this agreement shall be as under:-

For the Employer ...........................................................
For the Company ............................................................

IN WITNESS WHEREOF, the parties have caused their common seal to be affixed to these presents and the duplicate, the day and year first hereinabove written.

The common seal of ABC Co. Ltd., the within named employer
is hereunto affixed pursuant to the resolution of its Board of
Directors passed at the meeting held on .......………..

The common seal of A B Security Guards (P) Ltd.,
the within named company is hereunto affixed pursuant
to the resolution of its Board of Directors passed at the
meeting held on ………………......
WITNESSES;
1.

2.
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22 - AGREEMENT BETWEEN A COMPANY AND THE CONTRACTORS FOR THE MAINTENANCE OF COMPUTERS FOR A FIX PERIOD



THIS AGREEMENT made at ......... on this......... day of ........ 2000, between XYZ Co. Ltd., a company incorporated under the Companies Act, 1956 and having its registered office at ........... (hereinafter referred to as "the Company", which expression shall, unless it be repugnant to the context or meaning thereof, be deemed to mean and include its successors and assigns) of the ONE PART and TNT Computers Pvt. Ltd., a company incorporated under the Companies Act, 1956 and having its registered office at ......... hereinafter referred to as "the TNT", which expression shall, unless it be repugnant to the context or meaning thereof, be deemed to mean and include its successors and assigns) of the OTHER PART.



WHEREAS the company has purchased 5 computers, the details of which have been given in the Schedule hereunder written, hereinafter referred to as "the said Computers" from TNT on ......... and TNT offered free service of the said computers for a period of one year from the date of purchase of the said computers.

AND WHEREAS after the expiry of free service period, the company has requested TNT to provide service of the said computers for a period of one year, which TNT has agreed to provide on the terms and conditions hereinafter contained.



NOW THESE PRESENTS WITNESS AND THE PARTIES HERETO AGREE HEREBY AS FOLLOWS:



* TNT will provide at the company's office all labour, parts and material that it deems necessary to maintain in good operating condition the said computers. Replacement parts shall be new or their equivalent, replaced parts become the property of TNT. Services provided by TNT include and are limited to the following:



* Preventive maintenance is maintenance and includes cleaning, adjusting, lubricating, inspecting, testing and calibrating procedures designed to endure proper operation, reduce product failure and/or extend useful product life. This maintenance will be performed according to the procedures and at the frequencies recommended by the company. Preventive maintenance will be performed at company office at the company's facility during the contract period (regular business days/hours), as mutually agreed or coincident with remedial maintenance, by authorised TNT's service representative. Preventive maintenance is limited to two regular work days unless, at the discretion of TNT, additional days are necessary to complete the preventive maintenance, such days not to exceed five working days. Remedial maintenance during a preventive maintenance that requires additional days will be charged as remedial maintenance call or at the current hourly rate if all remedial calls have been used.



* Remedial maintenance is unscheduled maintenance at the company's facility. Remedial maintenance includes the diagnosis and correction of product malfunctions and failures. Remedies may consist of temporary procedures to be followed by the company while a permanent remedy is being sought. Remedial maintenance will commence during the period of this agreement and will continue uninterrupted as long as reasonable progress is being made or until the product(s) is/are operational. If TNT determines that additional parts or resources are required, service will resume as soon as these parts or resources are available. After all remedial maintenance calls have been used, additional remedial maintenance will be allowed at the current TNT hourly rate.



* Assembly repair is unscheduled repair of returnable assembly level components (printed circuit boards, power supplies, switching units, etc.) at TNT's factory. Assembly repair includes the diagnosis and correction of product malfunctions and failures. Assembly repair will commence during the period of coverage and will continue uninterrupted as long as reasonable progress is being made or until the product(s) is/are operational. If TNT determines that additional parts or resources are required, service will resume as soon as these parts or resources are available. The number of repairs of assemblies related to equipment covered under this agreement is unlimited.



* The periods of coverage specified below shall uniformly apply to all products covered by this Agreement. The company may request a change in the specified periods of coverage at any time. Such change is subject to written approval by TNT.

Monday through Friday 7.30 A.M. to 4.00 P.M.

(excluding TNT holidays)

Saturday N/A TO NIA

Sunday NIA TO NIA

* The response time is 48 hours. TNT shall respond to a request for remedial maintenance or technical support within the specified response time measured in clock hours. Availability of TNT personnel and telephone answering service is limited to the specified period of coverage. "Response Time" is defined as the duration of time necessary for TNT personnel to initiate action upon a specified company request and advise the company of either action to take to complete that particular request or action to take to provide TNT with additional information needed to assist in such company's request completion, or the embarkation of TNT personnel for arrival at the company's equipment site.



* TNT shall be under no obligation to furnish support service under this agreement should repair be required because of.-
* improper use;
* natural disasters such as flood or earthquake;
* strikes, riots or acts of war or nuclear disaster;
* repairs, maintenance, modifications or relocation and re- installation made by other than TNT personnel or without TNT's supervision and approval;
* unusual shock or electrical damage, neglect, air-conditioning failure, humidity control failure, a corrosive atmosphere harmful to electronic circuitry, damage during transportation by the company or causes other than ordinary use; and
* failure by company to maintain the site specifications recommended by TNT. If support services are required as a result of the causes stated above, such service shall be provided at TNT standard service rates for labour, travel and material in effect at the time of service. TNT may also, at its option, terminate this agreement as a result of the causes stated above. Termination is subject to the guidelines specified under Item 8 of this Agreement.

* TNT may, at its option, with no additional charge to the company, make modifications to improve the operation and or reliability of the products being serviced under this agreement.



* If the company intends to relocate the products covered under this agreement, it shall give TNT sixty days written notice prior to any relocation of products covered by on-site support services being provided under this agreement. The products moved to a location within the country of original installation shall continue to be serviced under this agreement. The response time and charges will be adjusted to reflect the new location. Products moved outside the country of original installation may continue to be serviced under this agreement, at the option of TNT. The services to be provided and charges for such services shall be subject to mutual agreement. For installed products, which will continue to be serviced, TNT at its option, shall supervise the dismantling and packing of the product and shall inspect and re-install the products at the new location. These services, if provided, shall be at additional charge based on TNT's standard service rates in effect at the time. The company shall furnish all labour and materials for the dismantling, packing and placement of the products during relocation.



* TNT's services do not include:



* operating supplies and consumables;
* refinishing the products or furnishing materials for that purpose;

(iii) electrical work external to the products;

* maintenance of accessories, attachments or products not specified herein or on subsequent orders; or
* any other services not specifically described herein.





* This agreement shall be for a period of one year from the date of these presents, unless terminated by either party on not less than ninety days written notice (given prior to the expiration of the successive period then in effect).



* The company shall pay a sum of Rs.......... per month per computer for services provided by TNT. The said charges are exclusive of State and local use, sales, property (ad valorem) and similar taxes. The company shall pay such taxes and when applicable such taxes will appear as separate items on TNT's invoice.



* The TNT shall submit invoice for charges in advance or as soon as it become applicable. Any administration charge will be invoiced in advance as soon as it becomes applicable. Invoices for other charges will be submitted as the charges are incurred. Unless otherwise stated in writing by TNT, the company shall pay all invoices submitted under this agreement within twenty days from date of invoice.



* Any attempt to assign or transfer any of the rights, duties, or obligations herein shall render such attempted assignment or transfer null and void.



* TNT reserves the right to withhold without liability, but with prior written notice, any services authorised by the company under this agreement, if the company is delinquent in payment for any services, and to change the credit terms herein when, in TNT's opinion, the financial condition or previous payment record of the company so warrants.



* In the event of any proceedings, voluntary or involuntary, in it bankruptcy or insolvency or winding-up by or against the company or in the event of the appointment, with or without the company's consent of an assignee for the benefit of creditors, or of a receiver, TNT may y elect to cancel the unfulfilled part of this Agreement without refund or liability for said unfulfilled part.



* TNT's failure to exercise any of its rights hereunder shall not constitute or be deemed waiver or forfeiture of such rights.



* Any notice required to be given hereunder shall be given in writing at the address of each party set forth within or to such other address either party may substitute by written notice to the other.



* All disputes and differences of any kind whatever arising out of or in connection with this agreement shall be referred to the arbitration and final decision of an arbitrator to be agreed upon and appointed by the parties or in case of disagreement as to the appointment of a single arbitrator, to the appointment of two arbitrators, one to be appointed by each party and if there are two arbitrators, they shall before taking upon themselves the burden of reference appoint an umpire. The arbitrator or arbitrators, as the case may be, shall make his or their award within one year or such further extended lime as may be decided by him or them, as the case may be, with the consent of the parties the date of entering on the reference. This submission to the arbitrators shall be deemed to be a submission to arbitration within the meaning of the Indian Arbitration Act, 1940 or any statutory modification thereof. The award of arbitrator or arbitrators, as the case may be, shall be final and binding on the parties.



* This agreement shall be executed in duplicate. The original shall be retained by the company and duplicate by the TNT.



IN WITNESS WHEREOF the parties have executed these presents on the day and year hereinabove written and in the manner hereinafter mentioned.



Signed and delivered by X Y Co. Ltd., the within

named company, by its Managing Director Shri.........



Signed and delivered by TNT Computers Pvt. Ltd., the

within named TNT, by its Marketing Director Shri...........

WITNESSES;

1.



2.

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23 - AGREEMENT FOR BUILDING WHERE OWNER SUPPLIES PLOT OF LAND ONLY.



(I) Underwriting agreements-The object of underwriting is to insure against the risk that shares, debentures or debenture stock offered by a company for subscription may not be taken up. For floatation of share/debenture capital, a company is generally required to have the public issue fully underwritten to insure that all the shares and debentures are taken up by the investor and thus the required capital is raised. The underwritten provides an assurance against the risk of undersubscription .

(a) Payment of commission to underwriter .- The underwriters are entitled to commission. Section 76 of the Companies Act, 1956, provides as follows :
“76 (1). A company may pay a commission to any person in consideration of-
(a) his subscribing or agreeing to subscribe, whether absolutely or conditionally for any shares in, or debentures of, the company, or

(b) his procuring or agreeing to procure subscription, whether absolute or conditional for any shares in or debentures of, the company,

If the following condition are fulfilled, namely :-
i) the payment of the commission is authorised by the articles ;
ii) the commission paid or agreed to be paid does not exceed in case of shares five per cent of the price at which the shares are issued or the amount or rate authorised by the articles, whichever is less, and in the case of debentures, two and a half per cent of the price at which the debentures are issued for the amount or rate authorised by the articles, whichever is less :

iii) the amount or rate percent of the commission paid or agreed to be paid is-

(a) in case of shares or debentures offered to the public for subscription, disclosed in the prospectus; and

(b) in the case of shares or debentures not offered to the public for subscription, disclosed in the statement in lieu of prospectus, or in a statement in the prescribed form signed in like manner as a statement in lieu of prospectus and filed before the payment of the commission with the Registrar and where a circular or notice, not being a prospectus inviting subscription for the share or debentures, is issued, also disclosed in that circular or notice ;

iv) the number of shares or debentures which persons have agreed for a commission of subscribe absolutely or conditionally is disclosed in the manner aforesaid; and

v) a copy of the contract for the payment of the commission is delivered to the Registrar at the time of delivery of the prospectus or the statement in lieu of prospectus for registration.

2) Save as aforesaid and save as provided in section 78, no company shall allot any of its shares or debentures or apply any of its moneys, either directly or indirectly in payment of any commission, discount or allowance, to any person in consideration of-

a) his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares in, or debentures of, the company; or

b) his procuring or agreeing to procure subscription, whether absolute or conditional, for any shares in, or debentures of, the company whether the shares, debentures or money be so allotted or applied by being added to the purchase money of any property acquired by the company or to the contract price of any work to be executed for the company, or the money be paid out the nominal purchase money or contract price, or otherwise.

3) Nothing in this section shall affect the power of any company to pay such brokerage as it has heretofore been lawful for a company to pay.

4) A vender to, promoter of, or other person who receives payment in shares, debentures or money from, a company shall have and shall be deemed always to have had power to apply for any part of the shares, debentures or money so received in payment of any commission the payment of which, if made directly by the company, would have been legal under this section.

(4-A) For the removal of doubts it is hereby declared that no commission shall be paid under clause (a) of sub-section (1) to any person on shares or debenture which are not offered to the public for subscription :

Provided that where a person has subscribed or agreed to subscribes under clause (a) of sub-section (1) for any shares in, or debentures of, the company and before the issue of the prospectus or statement in lieu thereof any other person or persons has or have subscribed for any or all of those shares or debentures and that fact together with the aggregate amount of commission payable under this section in respect of such subscription is disclosed in such prospectus or statement, then the company may pay commission to the first mentioned person in respect of such subscription.

5) If default is made in complying with the provisions of this section, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to five hundred rupees.”













LETTER OF ACCEPTANCE

To
……………….

Dear Sir,

With reference to your application dated………….we accept and admit you as an underwriter of………………ordinary shares of our company at commission of…………….per cent, upon the footing and subject to the conditions contained in your application.

Yours, etc.
……………

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24 - HIRE-PURCHASE AGREEMENT IN RESPECT OF SEWING MACHINE

THIS AGREEMENT made on this…………..day of………………..BETWEEN AB, etc., (hereinafter called the “owner”) of the one part AND CD, etc., (hereinafter called the ”hirer”), of the other part.

WHERAS the owner has lent to the hirer a sewing machine and accessories ;

NOW THIS AGREEMENT WITNESSES as follows :

1. The sewing machine and the accessories described by the endorsement
on the back of this agreement will remain in the use and possession of the hirer for a period of 12 months ending on…………unless the agreement is term in atedsooner under the power reserved in this agreement.

2. The hirer has paid Rs. 30 as the first month’s rent in advance and has
agreed to pay to the owner a sum or Rs. every month regularly in advance on
before the 5th day of each month.

3. The hirer will keep the machine and accessories in good order and in his custody at the above mentioned address and will not remove the same or seel or pawn if without the consent of the owner.

4. The owner will be at liberty to terminate this agreement on the failure of the hirer to perform the terms of this agreement and retake possession of the machine and the accessories.

5. The hirer may also terminate agreement by delivering up the machine and accessories in good order to the owner.

6. The hirer may at any time during the hire become the purchaser of the machine and accessories by paying in cash all the price endorsed on this agreement provided the payments of hire are regularly made.

7. On the termination of the hiring, the machine with the accessories shall be returned to the owner and the owner’s right of lien of the machine shall not be destroyed by any money decree or judgment that the owner may obtain against the hirer.

8. If the hirer fails to pay regularly in advance, the whole transaction will be treated as one of without any option of purchase.

IN WITNESS WHEREOF the parties hereto have signed this agreement on the date and year first written above.

CD AB
…………………. …………………….
(Hirer) (Owner)

Witness……………………..
On Reverse
(1) Particulars of the Sewing machine and accessories……………
(2) Price of Sewing machine Rs…………………
(3) Price of accessories Rs……………………..


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25 - AGREEMENT FOR BUILDING WHERE OWNER SUPPLIES PLOT OF LAND ONLY.

An AGREEMENT made on the ………..day of …………….BETWEEN AB, etc. (hereinafter called the “contractor”) of the part and CD, etc, (hereinafter called the “owner”) of the second part.

WHEREAS

1. The party of the second part is the owner of the plot of land measuring …………..metres at………………and more particularly described in the plan attached and therein delineated as red.

2. The owner being desirous of erecting building on the said plot has appointed Shri……………as the architect.

3. The plans, designs, drawings and elevations of the said intended building and specifications of the works to be done and of the materials to be provided in and for the erection of the said building have been prepared by the purposes of identification by both the parties.

4. The contractor is willing to enter into an agreement for the execution of the said works for the sum of Rs…………..

NOW IT IS HEREBY MUTULLY AGREED as follows:

1. The contractor shall erect on the said plot of land a building in conformity with the plans, drawing and elevations and complete all the and workmanlike manner and to the satisfaction of the said architect and thesaid specifications, plans, drawings and elevations and of this agreement.

2. The contractor will finish and compete the said building on or before the………………….day of……………..and if the said building shall not be completed on or before the said date the contractor shall forfeit, out of the moneys which shall be due which shall elapse after the……….day of ………..until the said building shall be completed : Provided that if the contractor is prevented by any strike among the workman or by reason of any event beyond his control, the said architect may extend the time for the completion of the works for such reasonable period as he may think fit.

3. If the contractor shall become bankrupt, or sahll from any cause whatsoever be prevented from or delayed in proceeding with and completing the said works according to the terms and conditions of this agreement, or shall not proceed with the said works to the satisfaction of the said architect, it shall be lawful for the said architect to leave or cause to be left at the usual place of abode or business of the contractor, a notice or notices in writing for the said contractor to proceed regularly and effectually with the said contractor to proceed regularly and effectually with the said works and in case the said contractor shall , for 7 days after such notice is so left as aforesaid, make default in regularity and effectually proceeding with the said work it shall be lawful for the said architect to employ any other workmen either by contract or measure and value or otherwise to proceed with the said works and complete the same and pay to the said workmen out of the moneys which shall be then due to the said contractor on account of this agreement’s the amount of their charges for
the same and ; for all necessary materials to be found and provided for such completion ; and if the amount of balance to the credit of the contractor be insufficient to cover such charges for workmen and materials as are last heretobefore directed to be paid thereout, and then in such case the said contractor shall and will make good and pay such deficiency on demand.

4. If the said architect shall at any time or times consider any of the workmen employed by the said contractor on the works as in any ways incompetent or as acting improperly it shall in every such case be lawful for the said architect to discharge such workman or workmen, and the said contractor shall without delay put another workman or other workmen in his or their place.

5. In case any of the materials brought on the said premises by the said contractor shall be considered by the said architect unsound or in any respect improper, the said contractor will, upon notice in writing to him or his foreman on the premises given by the said architect cause the same to be removed from off the ground and proceed with the said works with materials corresponding with the said specifications and instructions and approved of by the said architect and on default of such removal within _____ days after such last mentioned notice, it shall be lawful for the said architect to cause the same to be removed to such place or places as he may think proper, without being in any way answerable or accountable for the loss or damage that shall happen to any materials so removed as aforesaid, and to cause proper materials to be substituted for the same, and to pay all expenses attending such removal and substitution out of the moneys which shall become due to the said contractor by virtue of this agreement.

6. In case the said architect shall consider any part of the said works to have been executed in an unsound and improper manner, the said contractor will cause the same immediately to be taken down and executed in a proper manner to the satisfaction of the said architect without any extra charge or expense whatsoever.

7. If the said architect or the parties hereto of the second part, shall think proper at any time or times to make any alterations or additions to or omission in the works hereby contracted for he or they shall give to the said contractor written instructions for such alterations or omissions signed by the said architect, but the said contractor shall not be considered to claim for the value or otherwise in respect thereof, without such written instructions so signed as aforesaid. Any additional charge by the contractor with respect to such alterations if certified to be correct by the architect shall be paid for in the same manner and at the same time as hereinafter expressed for the payment of the ultimate balance of the said sum of Rs……………….

8. Any damage arising from accidents or carelessness of the workmen or otherwise to the said work hereby contracted for, or to the materials or implements therein used, shall be borne and effectually made good by the said contractor at his own costs and charges.

9. The said contractor shall provide all the materials of the best kind available in the market for the said building in accordance with the specification mentioned above.

10. The said contractor will not, unless with the consent of the said architect, make any sub-contract for the execution of the works hereby contracted for, or any part thereof, nor unless with such consent as aforesaid assign or underlet the present contract.

11. The contractor shall be paid Rs……. as his remuneration for the labour supplied and material used by him for the aforesaid building in the following manner :

Rs……. shall be paid by 12 monthly instalments of Rs…… each, the first instalment to be paid on ….. and the balance of Rs….. within three months of the completion of the building, provided that in the case of each payment the architect certifies that the work and materials to a sufficient amount shall have been done, executed or provided by the said contractor to the satisfaction of the said architect. Provided also that the said contractor shall not be entitled to payment or receive the said balance of Rs……. until the said architect shall certify under his own hand that whole of said works have been completed and finished to his satisfaction. The decision of the architect shall be binding on the parties and shall be final.

IN WITNESS WHEREOF the parties hereto have signed this agreement on the day and year first written above.

………………………….. ……………………….
(Owner) (Contractor)

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26 - AGREEMENT FOR BUILDING WHERE OWNER SUPPLIES PLOT AND ALL MATERIALS

An AGREEMENT made on the ………..day of …………….BETWEEN AB, etc. (hereinafter called the “owner”) of the part and CD, etc, (hereinafter called the “contractor”) of the second part.

WHEREAS the owner owns a plot of land measuring ……… metres situate at …. And more particularly described in the plan attached.

AND WHEREAS the owner is desirous of erecting a building on the said plot.

AND WHEREAS the plans, drawings, designs and elevations of the said intended building and specifications of the works to be done and of the materials to be provided in and for the erection of the same as prepared by the architect have been approved by the parties.

AND WHEREAS the contractor is willing to execute the said works for the sum of Rs……

AND WHEREAS the materials to be used for the building will be supplied by the owner himself and the contractor will supply labour as well as the building tools and other accessories necessary for the completion of the said building.

NOW THE PARTIES HERETO HEREBY mutually agree as follows :

1. The contractor will clear and prepare the site for and will erect and complete the building in conformity with the plans, drawings, designs and elevations with the materials supplied by the owner in a thorough and work-manlike manner.

2. Subject to the conditions hereinafter appearing, the owner will pay to the contractor a sum of Rs……. within six months after the contractor has completed the works in accordance with the terms of this agreement and handed over the same to the owner.

3. The contractor will finish and complete the said building on or before the ….. day of ….. and if the said building shall not be completed on or before the said date, the contractor shall forfeit, out of the moneys which shall be due to him by virtue of this agreement, the sum of Rs….. for every days which shall elapse after the …… day of …… until the said building shall be completed : Provided if the contractor is prevented by any strike among the workmen or by reason of any event beyond his control, the owner may extend time for the completion of the work for such reasonable period as he may think fit under CI. (10).

4. The contractor will do and perform all works incidental to the proper execution and completion of the building including all works rendered necessary in consequence of the doing of the works and will supply labour necessary for the same and no additional payment will be made for the same.

5. The contractor will permit the owner to have access to the works while the same are under construction and to inspect the same.

6. The contractor will not vary or deviate from the said plans and specifications without having first obtained the permission in writing of the owner.

7. The contractor will, if so required by order in writing signed by the owner, alter the design or size of the works and the materials to be used in constructing the same, provided that he shall not be bound to do so unless the sum to be paid for any extras or to be allowed for any omission has been first fixed by agreement between him and the owner and, in default of agreement, the sum to be so paid or allowed shall be settled by ………………

8. The contractor shall make good any defects, shrinkage or other faults that may appear in the works within six months after their completion.

9. While the works are in course of construction and until the owner takes over the same, they and all materials or plants used or to be used in constructing the same shall remain at the contractor’s risk and he shall not be entitled to any compensation for injury, to or loss or destruction of, such works or materials arising from any cause whatever.

10. If the contractor requires any extension of time for completing the works he must apply to the owner within seven days from the date of the occurrence of the event on account of which he desires such extension ; and the owner may, if he thinks such request reasonable, grant such extension of time as he may think necessary.

11. If the owner is at any time dissatisfied with the progress of the work or with the quality of materials used or of the workmanship he may apply to ……. To depute an Engineer to inspect the works, and if such officer certifies in writing that the rate of progress or the materials used or the workmanship or any or all of them is or are unsatisfactory or not in accordance with this agreement, the owner may then enter upon the site of the works and may employ another builder to complete the same and may pay such builder the cost of such completion out of the sum payable to the contractor under this agreement or the balance of such sum if advances have been made to the contractor, and, if such cost is more than such sum of balance, then the contractor willpay the excess to the owner.

12. Unless the terms are extended under clause (10) hereof, the contractor will complete a portion of the works of the value of not less than Rs….. on or before the …. And will complete the whole work and will remove from the site of the works all plant, scaffolding, unused materials and rubbish and will leave the works and site clean on or before…….

13. If the contractor fails to comply with the provision of CI. (12) on or before the dates mentioned therein or within such extended time as be permitted in accordance with CI. (13) hereof, he will pay to the owner as liquidated damages a sum of Rs……………for every day’s delay, and the owner may deduct such sum or sums from any money due to the contractor under these presents or may recover it otherwise.

14. At the end of each calendar month commencing from the date when the contractor commences work the owner will pay the contractor a sum equal to 80 per cent of the value as estimated by the parties or in case of disagreement between the parties by…………… of the work executed by the contractor during the month and the owner will make final payment to the contractor at the end of six months from the date when the works are completed.

15. If at any time during the progress of the works or after completion or the alleged completion thereof and at any time during the continuance of this agreement any dispute or differences arise between the parties hereto in relation to or in connection with this agreement, the same shall be referred to the arbitration of Sri…………….as the sole arbitrator or to two arbitrators one to be appointed by each party and provisions or the Indian Arbitration Act, 1940, shall apply . The decision so given shall be final and binding upon the parties.

16. The contractor will indemnify the owner from all claims for injury caused to any person, whether a workman or not, while in or upon the works or the site of the same the said owner shall not be bound to defend any claim brought under the Workman’s Compensation Act unless the contractor first deposits with the owner might incur by reason of defending any such claim.

IN WITNESS WHEREOF the parties hereto have signed this agreement on the day and year first written above.

…………………… …………………..
(Contractor)
(Owner)

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27 - ARBITRATION CLAUSE IN BUILDING AGREEMENT



“In case any dispute should arise between the owner and the contractor, whether in respect of daily in supply of materials by the owner or delay in execution of work by the contractor, or the quality of the materials so supplied or the quality of the work done or in respect of decorations or alterations suggested or made or extra work required to be done and so executed or not, or in respect or measurements or work done or required to be done, or demand and payment for part or whole of the work done or not done or dealy or refusal in grant of architect’s certificate by the Engineer or its correctness or touching the interpretation, fulfilment or breach of any of the terms of these presents or in respect of deductions to be made or extra payments to be recovered for work improperly done or not executed or in respect of work got done through another contractor for default or breach or non-completion of work agreed to be done under the particulars and for assessment of the value thereof and fixation of liability for the same between the parties hereof or in respect of any act or omission arising out of the performance of non-performance or the obligations or duties pursuant to these presents, the said dispute or disputes shall be referred to the arbitration and final award of a single arbitrator if the parties agree thereto in writing (failing which to the arbitration of an arbitrator to be appointed by the President of the Institute of Engineers ) (or failing which to the arbitration of the municipal or corporation engineer or any competent engineer or architect nominated by him in writing ) on a reference made to him by any of the parties by notice in writing , a copy whereof will be served on the other party at the address mentioned above or such other address as may be notified by that other party sent by registered post. The arbitrator shall be entitles to proceed ex parte after notifying the parties by a reasonable notice as to the time and place therefor. The arbitrator shall also be entitled to associate with himself a surveyor, if necessary at his discretion. The arbitrator shall have power to reopen and revise any certificate granted by the architect engineer under these present.”

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28 -
AGREEMENT BETWEEN A MANUFACUTRER AND SELLING AGENT

AN AGREEMENT made on this………………..day of …………………BETWEEN ABC & Co. Ltd. having its registered office at………….(hereinafter called the “manufacturer”) of the one part AND PN son of………………..resident of…………….(hereinafter called the agent) of the other part.

WHEREAS the manufacturer carries on the business of manufacturing baniyans, underwears, hosiery and other wearing apparel of all kinds.

AND WHEREAS the manufacturers is desirous of opening retail shops in various towns of India and is willing to appoint agents for this purpose who shall have to act exclusively as the selling agents of the products of the manufacturer.

AND WHEREAS the said agent has approached the manufacturer and expressed his consent to act as such agent on the terms and conditions mutually agreed upon.

NOW, THEREFORE, THIS AGREEMENT WITNESSES as follows:

1. The manufacturer carries on the business of manufacturing baniyans, underwears, hosiery and other wearing apparel of all kinds.

2. The manufacturer is desirous of opening retail shops in various towns of India and is willing to appoint agents for this purpose who shall have to act exclusively has the selling agents of the products of the manufacture.

3. The said agent has approached the manufacturer and expressed his consent to act as such agent on the terms and conditions mutually agreed upon;

NOW, THEREFORE, THIS AGREEMENT WITNESSES as follows :

1. That the agent shall deposit a sum of Rs…………..as security for the due fulfilment of the terms of this agreement as well as for the adjustment thereof against the price of the goods supplied to the agent by the manufacturer from time to time.

2. That the manufacturer shall supply an assortment of goods manufactured by it approximately of the value of Rs……………in the first instance and thereafter shall furnish to the agent at his request in writing such further goods as may be so requisitioned by him or as the manufacturer may think expedient to supply to the agent to be kept in the shop run by the agent, so that the total value thereof at any time may not, if requisitioned by the agent, exceed the value of Rs…………………but it shall be at the option of the manufacturer to supply further goods of its manufacture, which it may deem expedient, subject, however, to the compliance with the requisition made to the manufacturer by agent as aforesaid to replenish the stock which, in the opinion of the agent, finds a ready market for its sale.

3. That the agent shall keep proper account and shall issue cash voucher for every article sold by him, which shall be prepared in triplicate, one legible copy whereof shall be submitted to the manufacturer by the agent every Friday or the next day on which the shop is opened by the agent in case Friday should be a close-day. The copies of such vouchers shall be accompanied with a statement of account showing the goods received by the agent from the manufacturer during the previous week ending with Saturday previous to Friday on which the return is so submitted.

4. That all the goods supplied by the manufacturer shall be deemed to be in trust with the agent for the purposes of sale on behalf of the manufacturer and any wilful omission or non-mention thereof in the return of the sale and receipt of goods submitted to the manufacturer weekly as aforesaid shall be deemed to be a misappropriation thereof unless such omission when pointed out and notified by the manufacturer is not rectified or appropriately explained within one week of such notification.

5. That the manufacturer shall pay to the agent a commission of……….per cent on the sale of the goods so supplied to the agent. The agent shall be entitled to deduct the commission out of the sale-proceeds and shall be bound to remit to the manufacturer the balance of the sale-proceeds receive by the agent up to Saturday previous, which shall be so remitted on or before Friday next ensuing. The agent, however, shall, at his discretion, be entitled to sell not more than 10 per cent of the sales effected during the week on credit and he shall be bound to realise such outstandings within two months of the sale be bound to pay in cash from his own pocket for the price of the foods so sold on credit. The return submitted by the agent shall show in a separate account the sales so made on credit and the realizations made thereon from time to time.

6. That the agent shall not sell any article at a price less than the one marked thereon by the manufacturer or fixed in respect of the article by the manufacturer from time to time. Any article which becomes soiled or partly broken or otherwise unfit for sale or otherwise apparently diminished in value shall not be exposed for sale by the agent except with the prior approval of the manufacturer, and at prices to be mutually settled between the parties. The agent shall be entitled to give a concession of not more than 5 per cent of the saleable value of any article to any old customer of the agent or any relation of the agent. The agent shall indicate in the return submitted by him weekly as provided in the agreement the fact of such sale at concessional rates.

7. That the agent shall take reasonable care of the goods supplied by the manufacturer and in case of any theft or injury thereto distruction thereof, he shall make a report to the police in case of a cognizable offence having been committed in respect thereof and forward a copy thereof to the manufacturer or submit a report in respect thereof within three days of the occurrence or its cognizance by the agent. the agent shall assist the manufacturer in the apprehension of the offender or in alleviating or removing the cause of such injury, if any. In the event of the manufacturer making a claim for compensation or otherwise from any insurance company the agent shall assist the manufacturer as if the agent was himself the assured.

8. That the agent shall keep the goods of the manufacturer for sale in a premises approved by the manufacturer which shall kept clean and well equipped with furniture and other conveniences for the customers.

9. That this agreement is made to run for a period of two years liable, however, to be terminated earlier, ipso facto in the event of bankruptcy or death of the agent or at the expiry of a notice of a fortnight served on or delivered to the agent at his address aforementioned or sent by registered post to him at the said address in case of default of or breach committed by the agent in respect of any of the terms of this agreement. The agent may also terminate this agreement after giving one month’s notice to the manufacturer in any of the aforementioned modes in case the manufacturer should fail to comply with or commit a breach of the terms of this agreement.

10. That any dispute arising between the parties touching the interpretation or compliance or non-compliance with the terms or conditions of this agreement shall be referred to the arbitration of the President of the District Bar Association who may determine the dispute himself or refer the dispute to the arbitration of any other member of the Bar Association at …………….The fees of the arbitrator shall be determined by the said President with the assent of the parties, failing which by Court having jurisdiction at…………..to try and decide the dispute.

11. That at the termination of this agreement, the accounts between the parties shall be mutually adjusted within one month of such termination . In case any party fails to assist in such examination or adjustment of accounts and the taking of stock, the other party may refer the examination and taking of accounts to the determination of the President of the District Bar Association at………….and the provision of CI. 9 aforesaid shall apply thereto.

12. That no commission shall be payable to the agent after the termination of the agreement whether by efflux of time or otherwise under this agreement, except when this agreement is renewed and the parties mutually further agree thereto or the arbitrator in the event of reference thereto, thinks fit to allow such commission either by interlocutory award or finally subject to such terms as the arbitrator may deem proper.

13. That the agent shall not, during the period of two years fixed in the agreement (and notwithstanding prior determination thereof by any party thereto), sell goods of any other manufacturer or person and the manufacturer shall not appoint any other selling agent within a radius of ……. Yards of the shop of the agent.

IN WITNESS WHEREOF the parties have signed this agreement on the day and year first above written.

……………………………….. ……………………………..
(Agent) (Manufacturer)

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28 - APPOINTMENT OF SELLING AGENT FOR A DISTRICT OR TOWN


THIS AGREEMENT is made on this………………day of BETWEEN AB son of CD, dealer in……………………at……………………..(hereinafter called the “principal”) of the one part and OP son of XY resident of…………….(hereinafter called the “agent”) of the other part.

WHEREAS, the principal is a dealer in……………..and is willing to appoint a suitable party as sole agent for the town of……………..(or district of…………….)

AND WHEREAS, the agent has approached the principal and has expressed his consent to act as the sole agent of the principal.

NOW THIS AGREEMENT WITNESSES as follows :

1. That the agent is hereby appointed the sole agent of the principal for the town of………………(or district of……………..) (hereinafter called the agency district) for the purposes of marking sales of the principal’s goods for the terms of…………….years from the date hereof on the terms and conditions set forth hereof on the terms and conditions set forth hereunder.

2. That the agent shall not while selling the principal’s goods make any representation in the trade to give any warranty other than those contained in the principal’s printed current price list.

3. That the agent shall be allowed to deduct and retain with himself……………….per cent of the list price of all goods sold on behalf of the principal. The agent shall keep a record of all sales and shall remit to the principal regularly on each Saturday all sums received by the agent in respect of such sales less……………… per cent as his commission. All sales shall be made for cash against delivery of goods unless the principal’s consent in writing to give credit to any particular purchaser be in any case first obtained and in the case of credit sales the principal may direct for such increase in the price of his goods over and above the current list price of the principal.

4. That the agent shall not make, purchases on behalf of nor in any manner pledge the credit of the principal without the consent in writing of the principal.

5. That the agent shall at the expense of the principal take on rent and occupy for the purpose of the agency suitable premises with prior approval of the principal and shall keep insured for the full value against all risk of all goods entrusted to his custody by the principal under this agreement and on request by the principal shall, produce to the principal receipts for the rent rates and taxes of the said premises and for the premiums on insurance policies showing that the same have been paid on or about their respective due dates. The agent shall bear all expenses relating to or incidental to the agency.

6. That the agent while selling to persons in the trade shall obtain the purchasers signature to an agreement to the following effect :

(1) That the said principals goods shall not directly or indirectly be resold outside the agency district
(2) That the said principals goods shall not be resold to the public below the full list price for the time being.

7. That the agent shall in all his commercial dealing and documents and on the name-head indicating his place of business describe himself as selling agent for the principal.

8. That a breach of the condition in Cl. 6 hereof shall entitle the principal to put an end to this agreement forthwith and also to recover from the said agent by way of liquidated damages the sum of Rs………………… for each such article sold in breach of such clause. The agent undertakes that all purchasers to whom he may sell the principals goods shall duly enter into, and carry out the aforesaid agreement referred to in Cl. 6 hereof and a breach by any purchaser of any such agreement shall for the purposes of this agreement be deemed to be a breach of Cl. 6 of this agreement by the agent and give the principal the rights and remedies against the agent for breach by the agent of this agreement .

9. That the principal shall keep with the agent a stock of his goods free of all expenses of delivery to the value of Rs………………… according to the principals current price list and the principal further undertakes to replenish such stock in the close of each month so as to keep it at the agreed value : Provided always that the agent shall have no right of action against the principal for delay resulting from shortage of stock, delays in transit accidents, strikes or other unavoidable occurrence in replenishing such stock . The principal shall always have the right without any prior notice to cause a stock checking of the said goods and on any shortage or deficiency found on such stock-taking the agent shall on demand pay to the principal the list price of such shortage or deficiency less the deduction by way of commission or rebate receivable by the agent. The agent shall not alter, remove, or tamper with the marks or numbers on the goods so entrusted into his custody.

10. That the agent shall not sell the goods of the principal to any purchaser except at the full current price list of the principal published by him from time to time. The agent may while selling principals goods allow a discount or rebate of ……………….. per cent.

11. That in the event of any dispute arising between the agent and a purchaser of the principal’s goods, the agent shall immediately inform the principal of the same and shall not without the principal’s approval or consent in writing take any legal proceedings in respect of or compromise such dispute or grant a release to any purchaser of the principal’s goods.

12. That either party may terminate this agreement at his option at any time after the expiration of…………..years by giving to the other one month’s notice in writings.

13. That the benefits under this agreement shall not be assignable to any other person.

14. That during the currency of this agreement the principal shall redirect all inquiries or orders for principal’s goods received by him from persons residing in the agency district of the said agent and in the event where the principal supplies such purchasers directly he shall allow the agent the same commission or rebate as the agent would have been entitled to retain if he had carried out such transaction. A certificate under the signature of the principal’s accountant of the amount of such commission or rebate payable to the agent shall be conclusive evidence of such amount. Such remuneration shall be payable to the agent (half-yearly or monthly). The agent undertakes to refer to the principal all enquiries or orders for the principal’s goods from persons residing outside the agency district of the agent and similar enquiries or orders from persons residing in the agency district for the purpose of re-sale outside the said district and the agent shall not be entitled to any commission or rebate in respect of any sale resulting from any such enquiries or orders.

15. That the agent shall always during the existence of this agreement devote his whole business, time and energy for pushing the sale of the principal’s goods and shall in all such dealings act honestly and faithfully to the principal and shall carry out orders and instructions and shall not engage or be interested either directly or indirectly as agent or servant in any other business or trade without the prior consent in writing of the principal.

16. That on the termination of his agreement for any reason whatsoever the agent shall not for the period of one year solicit trade orders from the persons who had been purchasers of the principal’s goods any time within (seven) years immediately preceding the date of such termination and the agent shall not for a period of one year engage or be interested as agent or servant in any business, firm or company manufacturing, selling or dealing in goods similar to those transacted by the principal.

17. That all goods shall be sold by the agent for delivery at agent’s place of business but the agent shall at his own expenses have the right to deliver goods to purchasers at their places of business.

18. That without prejudice to any other remedy he may have against the agent for any breach or non-performance of any part of this agreement the principal shall have the right summarily to terminate this agreement-

(i) On the agent being found guilty of a breach of its provisions or being guilty of misconduct or negligence of his duties.

(ii) On the agent absenting himself from his business duties entrusted to him under the agreement for four or five days without the principal’s prior permission in writing :

(ii) On the agent committing an act of bankruptcy.

19. That in the event of any dispute arising out of or in relation to or touching with the agreement the same shall be decided by arbitration in accordance with the provision of the Arbitration Act of 1940.

20. That the principal shall be entitled to terminate this agreement by giving one month’s notice in writing to the agent in the event of his ceasing to carry on the said business of the principal.

21. That on the termination of this agreement for whatever reason the agent shall forthwith deliver to the principal all the unsold stock of goods and shall pay to the principal for the shortage or deficiency or stock at list prices less commission and rebate allowable to the agent. The agent shall also deliver to the charge of the principal all books of account and documents of the agency, cash, cheques, bills of exchange or other securities he may have received during the normal course as a result of sales of the principal’s goods and shall transfer, assign or negotiate in favour of the principal all such securities on demand.

IN WITENSS WHEREOF, the parties have signed this agreement on the day and year first above written.

……………………. ……………………….
(Agent) (Principal)

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29 - APPOINTMENT LETTER OF A PROBATIONER

................... ...................

Date.................

To,

Shri ...........................
................................

Dear Sir,

With reference to your application dated ...................... for the captioned post and subsequent test and interview, we are pleased to advise you that you have been selected as a probationer for a period of two years in the ............. department of the company on the following terms and conditions:

1. Date of appointment
You will be appointed as a probationer with effect from ................

Probation period
The probation period will be one year. However, the said period can be extended at the discretion of the company for a further period of ..................... years.

3. Salary during probation
During the probation period, you will be entitled to fixed salary of Rs. .................. per month.

4. Appointment after expiry of probation period, in case found suitable
If after the expiry of probation period, you are found suitable by the company, you will be confirmed in your appointment on a salary of Rs. ...................... in the scale of ......................... plus other admissible allowances and contributory provident fund. If you are not found suitable for the job, your appointment will be terminated at the discretion of the company and in case of such termination you will have no right or claim against the company.

5. Standing orders
You shall abide by the terms and conditions of the standing orders and the rules of the company as in force from time to time.

6. To obey orders and directions of the Manager
You shall obey the orders, directions of the Manager and other officers of the company.

In case you are agreeable to the above please confirm and sign duplicate copy of this letter as a token of your acceptance.

Yours faithfully,

Manager
I agree and accept the above terms/conditions.

Signature of the Probatio

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30 -APPOINTMENT OF SELLING AGENT FOR A DISTRICT OR TOWN


THIS AGREEMENT is made on this………………day of BETWEEN AB son of CD, dealer in……………………at……………………..(hereinafter called the “principal”) of the one part and OP son of XY resident of…………….(hereinafter called the “agent”) of the other part.

WHEREAS, the principal is a dealer in……………..and is willing to appoint a suitable party as sole agent for the town of……………..(or district of…………….)

AND WHEREAS, the agent has approached the principal and has expressed his consent to act as the sole agent of the principal.

NOW THIS AGREEMENT WITNESSES as follows :

1. That the agent is hereby appointed the sole agent of the principal for the town of………………(or district of……………..) (hereinafter called the agency district) for the purposes of marking sales of the principal’s goods for the terms of…………….years from the date hereof on the terms and conditions set forth hereof on the terms and conditions set forth hereunder.

2. That the agent shall not while selling the principal’s goods make any representation in the trade to give any warranty other than those contained in the principal’s printed current price list.

3. That the agent shall be allowed to deduct and retain with himself……………….per cent of the list price of all goods sold on behalf of the principal. The agent shall keep a record of all sales and shall remit to the principal regularly on each Saturday all sums received by the agent in respect of such sales less……………… per cent as his commission. All sales shall be made for cash against delivery of goods unless the principal’s consent in writing to give credit to any particular purchaser be in any case first obtained and in the case of credit sales the principal may direct for such increase in the price of his goods over and above the current list price of the principal.

4. That the agent shall not make, purchases on behalf of nor in any manner pledge the credit of the principal without the consent in writing of the principal.

5. That the agent shall at the expense of the principal take on rent and occupy for the purpose of the agency suitable premises with prior approval of the principal and shall keep insured for the full value against all risk of all goods entrusted to his custody by the principal under this agreement and on request by the principal shall, produce to the principal receipts for the rent rates and taxes of the said premises and for the premiums on insurance policies showing that the same have been paid on or about their respective due dates. The agent shall bear all expenses relating to or incidental to the agency.

6. That the agent while selling to persons in the trade shall obtain the purchasers signature to an agreement to the following effect :

(1) That the said principals goods shall not directly or indirectly be resold outside the agency district
(2) That the said principals goods shall not be resold to the public below the full list price for the time being.

7. That the agent shall in all his commercial dealing and documents and on the name-head indicating his place of business describe himself as selling agent for the principal.

8. That a breach of the condition in Cl. 6 hereof shall entitle the principal to put an end to this agreement forthwith and also to recover from the said agent by way of liquidated damages the sum of Rs………………… for each such article sold in breach of such clause. The agent undertakes that all purchasers to whom he may sell the principals goods shall duly enter into, and carry out the aforesaid agreement referred to in Cl. 6 hereof and a breach by any purchaser of any such agreement shall for the purposes of this agreement be deemed to be a breach of Cl. 6 of this agreement by the agent and give the principal the rights and remedies against the agent for breach by the agent of this agreement .

9. That the principal shall keep with the agent a stock of his goods free of all expenses of delivery to the value of Rs………………… according to the principals current price list and the principal further undertakes to replenish such stock in the close of each month so as to keep it at the agreed value : Provided always that the agent shall have no right of action against the principal for delay resulting from shortage of stock, delays in transit accidents, strikes or other unavoidable occurrence in replenishing such stock . The principal shall always have the right without any prior notice to cause a stock checking of the said goods and on any shortage or deficiency found on such stock-taking the agent shall on demand pay to the principal the list price of such shortage or deficiency less the deduction by way of commission or rebate receivable by the agent. The agent shall not alter, remove, or tamper with the marks or numbers on the goods so entrusted into his custody.

10. That the agent shall not sell the goods of the principal to any purchaser except at the full current price list of the principal published by him from time to time. The agent may while selling principals goods allow a discount or rebate of ……………….. per cent.

11. That in the event of any dispute arising between the agent and a purchaser of the principal’s goods, the agent shall immediately inform the principal of the same and shall not without the principal’s approval or consent in writing take any legal proceedings in respect of or compromise such dispute or grant a release to any purchaser of the principal’s goods.

12. That either party may terminate this agreement at his option at any time after the expiration of…………..years by giving to the other one month’s notice in writings.

13. That the benefits under this agreement shall not be assignable to any other person.

14. That during the currency of this agreement the principal shall redirect all inquiries or orders for principal’s goods received by him from persons residing in the agency district of the said agent and in the event where the principal supplies such purchasers directly he shall allow the agent the same commission or rebate as the agent would have been entitled to retain if he had carried out such transaction. A certificate under the signature of the principal’s accountant of the amount of such commission or rebate payable to the agent shall be conclusive evidence of such amount. Such remuneration shall be payable to the agent (half-yearly or monthly). The agent undertakes to refer to the principal all enquiries or orders for the principal’s goods from persons residing outside the agency district of the agent and similar enquiries or orders from persons residing in the agency district for the purpose of re-sale outside the said district and the agent shall not be entitled to any commission or rebate in respect of any sale resulting from any such enquiries or orders.

15. That the agent shall always during the existence of this agreement devote his whole business, time and energy for pushing the sale of the principal’s goods and shall in all such dealings act honestly and faithfully to the principal and shall carry out orders and instructions and shall not engage or be interested either directly or indirectly as agent or servant in any other business or trade without the prior consent in writing of the principal.

16. That on the termination of his agreement for any reason whatsoever the agent shall not for the period of one year solicit trade orders from the persons who had been purchasers of the principal’s goods any time within (seven) years immediately preceding the date of such termination and the agent shall not for a period of one year engage or be interested as agent or servant in any business, firm or company manufacturing, selling or dealing in goods similar to those transacted by the principal.

17. That all goods shall be sold by the agent for delivery at agent’s place of business but the agent shall at his own expenses have the right to deliver goods to purchasers at their places of business.

18. That without prejudice to any other remedy he may have against the agent for any breach or non-performance of any part of this agreement the principal shall have the right summarily to terminate this agreement-

(i) On the agent being found guilty of a breach of its provisions or being guilty of misconduct or negligence of his duties.

(ii) On the agent absenting himself from his business duties entrusted to him under the agreement for four or five days without the principal’s prior permission in writing :

(ii) On the agent committing an act of bankruptcy.

19. That in the event of any dispute arising out of or in relation to or touching with the agreement the same shall be decided by arbitration in accordance with the provision of the Arbitration Act of 1940.

20. That the principal shall be entitled to terminate this agreement by giving one month’s notice in writing to the agent in the event of his ceasing to carry on the said business of the principal.

21. That on the termination of this agreement for whatever reason the agent shall forthwith deliver to the principal all the unsold stock of goods and shall pay to the principal for the shortage or deficiency or stock at list prices less commission and rebate allowable to the agent. The agent shall also deliver to the charge of the principal all books of account and documents of the agency, cash, cheques, bills of exchange or other securities he may have received during the normal course as a result of sales of the principal’s goods and shall transfer, assign or negotiate in favour of the principal all such securities on demand.

IN WITENSS WHEREOF, the parties have signed this agreement on the day and year first above written.

……………………. ……………………….
(Agent) (Principal)

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31 - AGREEMENT BETWEEN A COMPANY AND SECURITY SERVICE COMPANY FOR PROVIDING SECURITY SERVICES TO THE COMPANY'S PROPERTY

THIS AGREEMENT made at ......... on this ......... day of ....... 2000, between ABC Co. Ltd., a company incorporated under the Companies Act, 1956 and having its registered office at ................ (hereinafter referred to as "the Employer", which expression shall unless repugnant to the context or meaning thereof be deemed to mean and include its successors and assigns) of the ONE PART and XYZ Security Guards (P) Ltd., a company incorporated under the Companies Act, 1956 and having its registered office at .......... (hereinafter referred to as "the Company" which expression shall unless it be repugnant to the context or meaning thereof be deemed to mean and include its successors and assigns) of the OTHER PART.

WHEREAS the employer is having its factory at .......... hereinafter referred
to as "the said factory" and it wants to employ security guards to provide security services to the said factory.

AND WHEREAS The company, who is experienced in providing security services to the industrial units and other organisations has offered to provide security services to the Employer at the said factory and the employer has agreed to avail the said services being provided by the company.

NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:

The company shall provide .......... security guards to keep ward and watch and protection of the said factory as per the employer's requirement. The security guards provided by the company will be for twenty-four hours in the shift of 8 hours and shall provide complete security arrangement and protection of the said factory round the clock.

The employer shall give the watchmen's hut constructed on the gate of the said factory to the security guards and the said guards shall cheek all the vehicles and personnel entering into and going out of the said factory as per the instructions issued by the employer's representative from time to time and shall maintain proper record of the vehicles and personnel coming and going out of the factory.

The company at its own expenses shall provide its security guards with necessary uniform, arms, outfit, etc. required for the effective discharge of security services to the employer.

The company shall ensure that the security guards provided by it maintain perfect discipline and behavior and they shall not in any manner cause any interference, annoyance, nuisance to the management of the employer or its business or work or its officers/ employees/other contractors.

The company agrees and undertakes that the security services provided by the security guards shall be to the entire satisfaction of the employer and the company will make it clear to the security guards that the latter are employees of the company and they shall have no claims against the employer and the employer shall not be liable to wages, salary, compensation and any statutory benefits due to the security guards under the labour law and other legislation and the company shall be responsible for providing such amenities to its employees admissible under the law/rules/service conditions.

The company will indemnify the employer against any claim, loss, damage occurred, or caused to the employer due to willful acts or omissions or carelessness or negligence of the security guards employed by the company, while on duty.

The employer shall pay a sum of Rs. ......... (Rupees............... only) per security guard per month and a sum of Rs. ......... per security guard for three national holidays for the services provided by the company on submission of the bill by the company by 10th day of the following month. The employer shall not make any payment to the security guards and payment will be made to the company only.

The company will obtain licence, if any, required under the local or central laws for providing security services to the employer.

The employer shall be entitled to supervise the services provided by the company and if it finds that the conduct, behavior and performance of work of any of its security guard is unsatisfactory, it may issue directions to the company to immediately recall the particular person and substitute him by another and the company shall comply with such directions issued by the employer forthwith.

This agreement will be for a period of one year from the date of execution of these presents. The employer shall, in the event of the company committing any breach of any of the terms and conditions of this agreement or if the services provided by the company is considered to be unsatisfactory by the employer or for any other reason considered by the employer as sufficient, be entitled to terminate this agreement by giving one month's notice in writing and the company shall not be entitled to any compensation in case of such termination. The company may also terminate this Agreement by giving one month's notice in writing to the employer.

On expiry or earlier determination of this agreement, the company and the security guards shall vacate the factory premises, without in any way causing any damage to the said premises and the factory's property therein.

In case of any dispute or difference arising between the parties under this agreement, the decision of ......... will be final and binding and the company will not be entitled to lodge any claim against the decision of the said Shri ……………...........

The stamp duty on this agreement and duplicate thereof shall be borne by the company. The original shall be retained by the employer and the company shall retain the duplicate.

Unless otherwise agreed upon, the respective addresses for communication in respect of any matter relating to this agreement shall be as under:-

For the Employer ...........................................................
For the Company ............................................................

IN WITNESS WHEREOF, the parties have caused their common seal to be affixed to these presents and the duplicate, the day and year first hereinabove written.

The common seal of ABC Co. Ltd., the within named employer
is hereunto affixed pursuant to the resolution of its Board of
Directors passed at the meeting held on .......………..

The common seal of A B Security Guards (P) Ltd.,
the within named company is hereunto affixed pursuant
to the resolution of its Board of Directors passed at the
meeting held on ………………......
WITNESSES;
1.

2.
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32 - APPOINTMENT LETTER OF A PROBATIONER

................... ...................

Date.................

To,

Shri ...........................
................................

Dear Sir,

With reference to your application dated ...................... for the captioned post and subsequent test and interview, we are pleased to advise you that you have been selected as a probationer for a period of two years in the ............. department of the company on the following terms and conditions:

1. Date of appointment
You will be appointed as a probationer with effect from ................

Probation period
The probation period will be one year. However, the said period can be extended at the discretion of the company for a further period of ..................... years.

3. Salary during probation
During the probation period, you will be entitled to fixed salary of Rs. .................. per month.

4. Appointment after expiry of probation period, in case found suitable
If after the expiry of probation period, you are found suitable by the company, you will be confirmed in your appointment on a salary of Rs. ...................... in the scale of ......................... plus other admissible allowances and contributory provident fund. If you are not found suitable for the job, your appointment will be terminated at the discretion of the company and in case of such termination you will have no right or claim against the company.

5. Standing orders
You shall abide by the terms and conditions of the standing orders and the rules of the company as in force from time to time.

6. To obey orders and directions of the Manager
You shall obey the orders, directions of the Manager and other officers of the company.

In case you are agreeable to the above please confirm and sign duplicate copy of this letter as a token of your acceptance.

Yours faithfully,

Manager
I agree and accept the above terms/conditions.

Signature of the Probationer.
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33 - APPOINTMENT OF SELLING AGENT FOR A DISTRICT OR TOWN


THIS AGREEMENT is made on this………………day of BETWEEN AB son of CD, dealer in……………………at……………………..(hereinafter called the “principal”) of the one part and OP son of XY resident of…………….(hereinafter called the “agent”) of the other part.

WHEREAS, the principal is a dealer in……………..and is willing to appoint a suitable party as sole agent for the town of……………..(or district of…………….)

AND WHEREAS, the agent has approached the principal and has expressed his consent to act as the sole agent of the principal.

NOW THIS AGREEMENT WITNESSES as follows :

1. That the agent is hereby appointed the sole agent of the principal for the town of………………(or district of……………..) (hereinafter called the agency district) for the purposes of marking sales of the principal’s goods for the terms of…………….years from the date hereof on the terms and conditions set forth hereof on the terms and conditions set forth hereunder.

2. That the agent shall not while selling the principal’s goods make any representation in the trade to give any warranty other than those contained in the principal’s printed current price list.

3. That the agent shall be allowed to deduct and retain with himself……………….per cent of the list price of all goods sold on behalf of the principal. The agent shall keep a record of all sales and shall remit to the principal regularly on each Saturday all sums received by the agent in respect of such sales less……………… per cent as his commission. All sales shall be made for cash against delivery of goods unless the principal’s consent in writing to give credit to any particular purchaser be in any case first obtained and in the case of credit sales the principal may direct for such increase in the price of his goods over and above the current list price of the principal.

4. That the agent shall not make, purchases on behalf of nor in any manner pledge the credit of the principal without the consent in writing of the principal.

5. That the agent shall at the expense of the principal take on rent and occupy for the purpose of the agency suitable premises with prior approval of the principal and shall keep insured for the full value against all risk of all goods entrusted to his custody by the principal under this agreement and on request by the principal shall, produce to the principal receipts for the rent rates and taxes of the said premises and for the premiums on insurance policies showing that the same have been paid on or about their respective due dates. The agent shall bear all expenses relating to or incidental to the agency.

6. That the agent while selling to persons in the trade shall obtain the purchasers signature to an agreement to the following effect :

(1) That the said principals goods shall not directly or indirectly be resold outside the agency district
(2) That the said principals goods shall not be resold to the public below the full list price for the time being.

7. That the agent shall in all his commercial dealing and documents and on the name-head indicating his place of business describe himself as selling agent for the principal.

8. That a breach of the condition in Cl. 6 hereof shall entitle the principal to put an end to this agreement forthwith and also to recover from the said agent by way of liquidated damages the sum of Rs………………… for each such article sold in breach of such clause. The agent undertakes that all purchasers to whom he may sell the principals goods shall duly enter into, and carry out the aforesaid agreement referred to in Cl. 6 hereof and a breach by any purchaser of any such agreement shall for the purposes of this agreement be deemed to be a breach of Cl. 6 of this agreement by the agent and give the principal the rights and remedies against the agent for breach by the agent of this agreement .

9. That the principal shall keep with the agent a stock of his goods free of all expenses of delivery to the value of Rs………………… according to the principals current price list and the principal further undertakes to replenish such stock in the close of each month so as to keep it at the agreed value : Provided always that the agent shall have no right of action against the principal for delay resulting from shortage of stock, delays in transit accidents, strikes or other unavoidable occurrence in replenishing such stock . The principal shall always have the right without any prior notice to cause a stock checking of the said goods and on any shortage or deficiency found on such stock-taking the agent shall on demand pay to the principal the list price of such shortage or deficiency less the deduction by way of commission or rebate receivable by the agent. The agent shall not alter, remove, or tamper with the marks or numbers on the goods so entrusted into his custody.

10. That the agent shall not sell the goods of the principal to any purchaser except at the full current price list of the principal published by him from time to time. The agent may while selling principals goods allow a discount or rebate of ……………….. per cent.

11. That in the event of any dispute arising between the agent and a purchaser of the principal’s goods, the agent shall immediately inform the principal of the same and shall not without the principal’s approval or consent in writing take any legal proceedings in respect of or compromise such dispute or grant a release to any purchaser of the principal’s goods.

12. That either party may terminate this agreement at his option at any time after the expiration of…………..years by giving to the other one month’s notice in writings.

13. That the benefits under this agreement shall not be assignable to any other person.

14. That during the currency of this agreement the principal shall redirect all inquiries or orders for principal’s goods received by him from persons residing in the agency district of the said agent and in the event where the principal supplies such purchasers directly he shall allow the agent the same commission or rebate as the agent would have been entitled to retain if he had carried out such transaction. A certificate under the signature of the principal’s accountant of the amount of such commission or rebate payable to the agent shall be conclusive evidence of such amount. Such remuneration shall be payable to the agent (half-yearly or monthly). The agent undertakes to refer to the principal all enquiries or orders for the principal’s goods from persons residing outside the agency district of the agent and similar enquiries or orders from persons residing in the agency district for the purpose of re-sale outside the said district and the agent shall not be entitled to any commission or rebate in respect of any sale resulting from any such enquiries or orders.

15. That the agent shall always during the existence of this agreement devote his whole business, time and energy for pushing the sale of the principal’s goods and shall in all such dealings act honestly and faithfully to the principal and shall carry out orders and instructions and shall not engage or be interested either directly or indirectly as agent or servant in any other business or trade without the prior consent in writing of the principal.

16. That on the termination of his agreement for any reason whatsoever the agent shall not for the period of one year solicit trade orders from the persons who had been purchasers of the principal’s goods any time within (seven) years immediately preceding the date of such termination and the agent shall not for a period of one year engage or be interested as agent or servant in any business, firm or company manufacturing, selling or dealing in goods similar to those transacted by the principal.

17. That all goods shall be sold by the agent for delivery at agent’s place of business but the agent shall at his own expenses have the right to deliver goods to purchasers at their places of business.

18. That without prejudice to any other remedy he may have against the agent for any breach or non-performance of any part of this agreement the principal shall have the right summarily to terminate this agreement-

(i) On the agent being found guilty of a breach of its provisions or being guilty of misconduct or negligence of his duties.

(ii) On the agent absenting himself from his business duties entrusted to him under the agreement for four or five days without the principal’s prior permission in writing :

(ii) On the agent committing an act of bankruptcy.

19. That in the event of any dispute arising out of or in relation to or touching with the agreement the same shall be decided by arbitration in accordance with the provision of the Arbitration Act of 1940.

20. That the principal shall be entitled to terminate this agreement by giving one month’s notice in writing to the agent in the event of his ceasing to carry on the said business of the principal.

21. That on the termination of this agreement for whatever reason the agent shall forthwith deliver to the principal all the unsold stock of goods and shall pay to the principal for the shortage or deficiency or stock at list prices less commission and rebate allowable to the agent. The agent shall also deliver to the charge of the principal all books of account and documents of the agency, cash, cheques, bills of exchange or other securities he may have received during the normal course as a result of sales of the principal’s goods and shall transfer, assign or negotiate in favour of the principal all such securities on demand.

IN WITENSS WHEREOF, the parties have signed this agreement on the day and year first above written.

……………………. ……………………….
(Agent) (Principal)

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34 - AGREEMENT BETWEEN MANUFACTURER AND COMMISSION AGENT

AN AGREEMENT made of this………………day of……………..BETWEEN ABC & Co. Ltd. having registered office at……………….and manufacturer of……..(hereinafter called the ‘manufacturer’) of the one part and OP son of LN resident of………..(hereinafter called the “agent” ) of the other part.

WHEREAS

1. The manufacturer is desirous of appointing a commission agent for the sale of……………………….manufactured by it.

2. The agent has approached the manufacturer for his appointment as such agent and has consented to act as such agent.

NOW THIS AGREEMENT WITNESSES as follows :
1. That the manufacturer hereby appoints the agent to be its commission agent for the sale of………………….manufactured by the former in the area comprised by the districts of……………..and ……………in the State of …………….and the agent hereby agrees to act as such sole selling agent in the said area of…………..on the terms mentioned herein.

2. That the agent shall canvas for, secure orders and push the sale of …………to the best of his ability and experience within the said area and hereafter guarantee to secure directly or indirectly orders for the sale of ………..to the extent of the value of Rs…………….at least in the year commencing from the date of this agreement.

3. That the agent shall employ sub-agents, servants, canvassers, clerks and other employees at his own expense and cost in the business or the commission agency. The manufacturer shall, however advertise at its own cost in the said territory and at its discretion, whether in newspapers, magazines, cinema slides, or by any other means and shall indicate where feasible the name of the agent as its sole selling agent in the territory indicate above.

4. That the agent shall furnish to the manufacturer weekly return of the business secured and the work done, the persons approached and convassed during the previous week and shall forward to the manufacturer not later than two days from the receipt of any orders for the supply of ……………as well as all enquiries received in respect of the said ………………… The agent shall deposit in the manufacturer all moneys received in advance from the customers, and submit an account thereof every Friday to the manufacturer.

5. That no representation shall be made on behalf of the manufacturer except as in conformity with the instructions issued from time to time by the manufacturer. All business done or procured by the agent shall be in accordance with the terms mentioned in the Schedule attached herehto, subject to modification thereof as per circulars or directions issued by the manufacturer from time to time.

6. That no order for the supply by the manufacturer shall be secured or undertaken which shall exceed the value of Rs……………….. unless prior consent thereof has been obtained in writing from the manufacturer.

7. That this agreement shall be in force for a period of one year from the commencement thereof, during which period, the agent shall, not canvass for or act as selling agent for goods of the same kind for any other manufacturer.

8. That the agent shall be paid by the manufacturer a commission of ……………….per cent . on all orders and repeat orders received directly or indirectly from the said territory, which shall have been executed or complied with by the manufacturer, such execution or compliance being in the absolute discretion of the manufacturer. The said commission will be payable at the end of every month and shall be payable even in respect of orders received of supply of the said ……………….. made by manufacturer out of their own accord to any constituent within the said territory, for valuable consideration.

9. That at the termination of the agreement whether by efflux of time or otherwise. The manufacturer shall not be liable to pay any commission on orders received thereafter.

10. That the agency may be determined by the manufacturer at any time during the said period of one year, after giving fourteen days’ notice thereof, in case the agent should omit to comply with the obligations imposed upon him under this agreement or in case, in the opinion of the manufacturer, the agent is guilty of misrepresentation as to the quality or characteristics of the said………………..or the canvassing or securing orders in the said territory does not substantially exceed the minimum guaranteed by the agent or for any other just cause construed in the business point of view. The agent may terminate this agreement at any time during the said period of one year, after giving one month’s notice thereof in case the manufacturer should repeatedly fail to comply with or execute the orders by the agent any duly communicated to or accepted by the manufacturer pursuant to this agreement or in case the goods…………..supplied are substantially inferior to the description thereof, or in case the manufacturer should without just case, or cause, withhold the payment of the commission due to the agent under the agreement for a period exceeding tow months.

11. That the agent shall be personally liable for the payment of the price of the goods supplied through him or pursuant to the orders secured by him, if the constituent to whom the goods were so supplied by the manufacturer refused within three months of the receipt thereof to pay for the same or refuses to accept the same when forwarded to such constituent. This liability of the agent shall be akin to that surety.

12. That the agent shall furnish a cash security of Rs…………….to the manufacturer for a period of one year sufficient (irrespective of previous determination of the agreement for any cause whatsoever) to ensure against due compliance by the agent of the terms hereof and such security shall carry interest at the rate of 3 per cent annum. Such security shall be repayable with interest to the agent within one month of the expiry of the period fixed in the agreement after adjustment of accounts between the parties. In case there should arise any dispute with respect to any matter regarding which any deduction is sought to be made by the manufacturer, the said dispute shall be referred to the arbitration of the President of the District Bar Association at………….who shall either act as arbitrator himself or appoint any other member of the Bar (paying income-tax) as arbitrator.

IN WITNESS WHEREOF, the parties hereto have signed this agreement on the day and year first written above.
………………….……….. ………………
(Agent) (Manufacutrer)


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35 - AGREEMENT BETWEEN MANUFACTURER AND COMMISSION AGENT

AN AGREEMENT made of this………………day of……………..BETWEEN ABC & Co. Ltd. having registered office at……………….and manufacturer of……..(hereinafter called the ‘manufacturer’) of the one part and OP son of LN resident of………..(hereinafter called the “agent” ) of the other part.

WHEREAS

1. The manufacturer is desirous of appointing a commission agent for the sale of……………………….manufactured by it.

2. The agent has approached the manufacturer for his appointment as such agent and has consented to act as such agent.

NOW THIS AGREEMENT WITNESSES as follows :
1. That the manufacturer hereby appoints the agent to be its commission agent for the sale of………………….manufactured by the former in the area comprised by the districts of……………..and ……………in the State of …………….and the agent hereby agrees to act as such sole selling agent in the said area of…………..on the terms mentioned herein.

2. That the agent shall canvas for, secure orders and push the sale of …………to the best of his ability and experience within the said area and hereafter guarantee to secure directly or indirectly orders for the sale of ………..to the extent of the value of Rs…………….at least in the year commencing from the date of this agreement.

3. That the agent shall employ sub-agents, servants, canvassers, clerks and other employees at his own expense and cost in the business or the commission agency. The manufacturer shall, however advertise at its own cost in the said territory and at its discretion, whether in newspapers, magazines, cinema slides, or by any other means and shall indicate where feasible the name of the agent as its sole selling agent in the territory indicate above.

4. That the agent shall furnish to the manufacturer weekly return of the business secured and the work done, the persons approached and convassed during the previous week and shall forward to the manufacturer not later than two days from the receipt of any orders for the supply of ……………as well as all enquiries received in respect of the said ………………… The agent shall deposit in the manufacturer all moneys received in advance from the customers, and submit an account thereof every Friday to the manufacturer.

5. That no representation shall be made on behalf of the manufacturer except as in conformity with the instructions issued from time to time by the manufacturer. All business done or procured by the agent shall be in accordance with the terms mentioned in the Schedule attached herehto, subject to modification thereof as per circulars or directions issued by the manufacturer from time to time.

6. That no order for the supply by the manufacturer shall be secured or undertaken which shall exceed the value of Rs……………….. unless prior consent thereof has been obtained in writing from the manufacturer.

7. That this agreement shall be in force for a period of one year from the commencement thereof, during which period, the agent shall, not canvass for or act as selling agent for goods of the same kind for any other manufacturer.

8. That the agent shall be paid by the manufacturer a commission of ……………….per cent . on all orders and repeat orders received directly or indirectly from the said territory, which shall have been executed or complied with by the manufacturer, such execution or compliance being in the absolute discretion of the manufacturer. The said commission will be payable at the end of every month and shall be payable even in respect of orders received of supply of the said ……………….. made by manufacturer out of their own accord to any constituent within the said territory, for valuable consideration.

9. That at the termination of the agreement whether by efflux of time or otherwise. The manufacturer shall not be liable to pay any commission on orders received thereafter.

10. That the agency may be determined by the manufacturer at any time during the said period of one year, after giving fourteen days’ notice thereof, in case the agent should omit to comply with the obligations imposed upon him under this agreement or in case, in the opinion of the manufacturer, the agent is guilty of misrepresentation as to the quality or characteristics of the said………………..or the canvassing or securing orders in the said territory does not substantially exceed the minimum guaranteed by the agent or for any other just cause construed in the business point of view. The agent may terminate this agreement at any time during the said period of one year, after giving one month’s notice thereof in case the manufacturer should repeatedly fail to comply with or execute the orders by the agent any duly communicated to or accepted by the manufacturer pursuant to this agreement or in case the goods…………..supplied are substantially inferior to the description thereof, or in case the manufacturer should without just case, or cause, withhold the payment of the commission due to the agent under the agreement for a period exceeding tow months.

11. That the agent shall be personally liable for the payment of the price of the goods supplied through him or pursuant to the orders secured by him, if the constituent to whom the goods were so supplied by the manufacturer refused within three months of the receipt thereof to pay for the same or refuses to accept the same when forwarded to such constituent. This liability of the agent shall be akin to that surety.

12. That the agent shall furnish a cash security of Rs…………….to the manufacturer for a period of one year sufficient (irrespective of previous determination of the agreement for any cause whatsoever) to ensure against due compliance by the agent of the terms hereof and such security shall carry interest at the rate of 3 per cent annum. Such security shall be repayable with interest to the agent within one month of the expiry of the period fixed in the agreement after adjustment of accounts between the parties. In case there should arise any dispute with respect to any matter regarding which any deduction is sought to be made by the manufacturer, the said dispute shall be referred to the arbitration of the President of the District Bar Association at………….who shall either act as arbitrator himself or appoint any other member of the Bar (paying income-tax) as arbitrator.

IN WITNESS WHEREOF, the parties hereto have signed this agreement on the day and year first written above.
………………….……….. ………………
(Agent) (Manufacutrer)


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36 - DEALERSHIP AGREEMENT BETWEEN A MANUFACTURING COMPANY AND FIRM

THIS AGREEMENT MADE ON THIS……………day of…………….BETWEEN Chandika & Co. Ltd., a company incorporated under the Companies Act, 1956 and having its registered office at …………(hereinafter called the ‘company’ which expression shall, unless the context admits otherwise, includes its representatives) of the one part and Jumb & Jumboo, a partnership firm consisting of Shri……………..,Shri……………………Shri……………….and Smt……………..w/o Shri…………………partners, having its main business place at………………and branches at………….. and ……………..(hereinafter called “the firm” which expression shall, unless the context admits otherwise, include the partners, their heirs, executors, administrators, representatives and assigns) of the other part.

WHEREAS

1. The company manufacturers cotton and polyster fibre yarn suitings and shirtings.

2. The firm has its own well-established marketing network and is selling goods of various manufactures and is desirous of selling the goods of the company at a new sales depot recently taken by it on rent for the purpose.

3. The company, after having considered the proposal of the firm, has agreed to appoint the firm as its dealer on the terms and conditions as hereinafter appearing.

NOW THIS AGREEMENT WITNESSES as under :

1. That the company hereby appoints the firm as its dealer for selling its products, more particularly described in the Schedule annexed hereto.

2. That the agreement shall remain in force originally for three years commencing from…………but may be renewed for similar periods on the terms and conditions as may be agreed by and between the parties hereto.

3. That the firm shall keep a minimum stock of…………pieces each of the company’s products described in the Schedule to meet the demand of the ultimate users/consumers, and such quantity shall be reviewed every quarter in the light of the sales during the previous quarter the demands, consumers likings and the market trends.

4. That the company shall supply to the firm its products on credit for fifteen days from the date of the invoice and shall charge interest at the rate of………….per cent per annum from the sixteenth day of the invoice till payment in full if payments are not made within the period credit aforesaid.

5. That the company shall supply to the firm publicity and advertisement material in sufficient quantity for display at the firm’s sales depot and for the distribution in its area of operation.

6. That the company shall bear 60% of the cost of maintaining the firm’s sales depot including rent thereof subject to a maximum of 6% of the invoice value of all the products of the company sold to the firm, which amounts shall be credited to the firm’s running account maintained with the company at the end of each quarter.

7. That the accounts between the parties will be settled half-yearly and the credit/debit balance shall be squared up by making necessary payment6s by the parties.

8. The firm shall make all efforts for the promotion of the sale of the company’s products and in the event of the company being of opinion on the basis of sale records that the firm is failing in properly performing its duty as dealer, the company shall be at liberty to terminate this agreement by giving the firm one month’s notice in writing and on the expiry of the notice period, this agreement shall stand terminated and the parties shall settle their accounts within a week thereafter.

9. The company hereby agrees and undertakes to supply to the firm its products as per the firm’s orders and on the company failing to supply the goods under the firm’s orders ,the firm shall be at liberty to terminate the agreement by giving the company one month’s notice in writing and after the expiry of the notice period, this agreement shall stand terminated and the parties shall settle their accounts within a week thereafter

10. The firm shall at no time sell any product of the company at a price higher than that fixed by the company from time to time

11. The firm shall be free and entitled to appoint sub-dealers, salesmen, commission agents or other sales personnel on salary, commission or any other basis, but with the condition that they will function in accordance with the provisions of this agreement and not do anything which is detrimental to the interest of the company, or the firm and the collective interests of both.

IN WITNESS WHEREOF, etc.
SCHEDULE REPRRED TO ABOVE


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37 - HIRE-PURCHASE AGREEMENTS

(I). Preliminary.- Hire-purchase agreements have acquired special importance in the developing economy of the country. What does hire-purchase agreement connote ? By a contract of hire-purchase is meant a contract which in addition to terms of hire, provides that on payment of the rent for a certain period, or for a certain number of times, or on the payment of a certain sum after such payment of rent, or at some time during the hiring, the property in the goods hired shall (or may) pass from the owner to the hirer. [Periar’s Law of Hire and Hire-Purchase 2nd Ed., p.2]. In effect hire-purchase agreement is a contract of bailment and is governed by the provisions of Chapter IX of the India Contract Act, 1872. This agreement is with an option to purchase though it is sometimes used in a wider sense to include agreements where there is an irrevocable agreement to buy in instalments are paid. A hire-purchase agreement thus creates a bailment, but is a bailment plus an option to purchase. The transaction is composed of the element of both the law of hire and sale, it would be clearly wrong to assimilate it to a hypothecation of moveable property .[V. Dakshinamurthi Mudaliar v. General & Credit Corporation (India) Ltd., AIR 1960 Mad. 328, 330].

The transaction partakes of a contract or bailment with an element of sale added to it. In such an agreement, the owner of the goods lest them on hire for periodic payments by the hirer upon an agreement that when a certain number of payments by the hirer upon an agreement that when a certain number of payments have been completed, the absolute property in the goods will pass to the hirer, but so that the hirer may return the goods at any time without any obligation to pay any balance of rent accruing after return; until the conditions have been fulfilled, the property remains with the owner. In this agreement the hirer is not bound to purchase the thing hired, he has an option, he may or may not purchase. But in either case, if there an obligation to buy, or an option to buy, the goods delivered to the hirer by the owners on the terms that the hirer on payment of a premium as also of a number of instalments shall enjoy the use of the goods, which ultimately may become his property, the transaction amounts to one of hire-purchaser, even though the title to the goods has remained with the owner and shall not pass to the hirer until certain event has happened, namely that all the stipulated instalments have been paid, or that the hirer has exercised his option to finalise the purchase on payment of a sum nominal or otherwise. [Instalment Supply (P) Ltd. v. Union of India, AIR 1962 SC 53, 58: Sundaram Finance Ltd. v. State of Kerala, AIR 1966 SC 1178].

(ii) Hire-Purchase agreement not sale.-It has to be remembered that a hire-purchase agreement is not a sale even if it contains a stipulation in the form of option of the hirer to purchase the article hired. Even where the price for sale is to be pain in instalments later, the property in the goods passes as soon as the sale is made. This follows from the definition of sale in section 4 of the Sale of Goods Act, 1930 (as distinguished from an agreement to sell) which requires that the seller transfers the property in the goods to the buyer for price. The essence of sale is that the property is transferred from the seller to the buyers for a price whether paid at once or paid later in instalments. On the other hand , a hire-purchase agreement as its very name implies, has two aspects. There is first an aspect of bailment of the goods subjected to the hire-purchase agreement, and there is next an element of sale which fructifies when the option to purchase, which is usually a term of hire-purchase agreements, is exercised by the intending purchaser. Thus the intending purchaser is known as the hirer so long as the option to purchase is not exercised, and the essence of the hire-purchase agreement properly so called is that the property in the goods does not pass at the time of the agreement but remains in the intending seller, and only passes later when the option is exercised by the intending purchaser. The distinguished feature of a typical hire-purchase agreement is made but only passes when the option is finally exercised after complying with all the terms of the agreement. [K.L. Johar & Co. vi Dy CTO, AIR 1955 SC 1082,1088].

The position of the owner of goods under a hire-purchase agreement is that of a person who has made on irrevocable offer to sell but no obligation to buy. [Helby v. Mathews, (1895) AC 471 ; Lee v. Butler, (1893) 2 Q.B. 318]. T essence of the hire-purchase agreement is that the hirer is not bound to purchase . [Dalpat Rai v. Manohar Lal & Sons, AIR 1974 Raj. 61]. A hire-purchase agreement has two elements ; (I) element of bailment, and (ii) element of sale, in the sense that it contemplates an eventual sale. The element of sale fructifies when the option is exercised by the intending purchaser after fulfilling the terms of the agreement. When all the terms of the agreement are satisfied and the option to purchase is exercised, a sale takes place of the goods which till then had been hired. [K.L.Johar & Co. v. Dy. CTO, AIR 1965 SC 1082, 1090].

(iii) Duty of hirer.-According to section 151 of the Contract Act, 1872, the hirer is bound to take as much care of the goods hired to him as a man of ordinary prudence would under similar circumstances take of his own goods of the same bulk, quality and value as the goods hired. Under Section 152 of the Contract Act, the hirer in the absence of any special contract is not responsible for the loss, destruction or deterioration of the thing hired, if he has taken such care. Accordingly, the parties may provide by stipulation in that behalf that the hirer will be liable for any loss or damage to the goods arising from any cause whatever.

(iv) Parties .-Normally , there are two parties to the hire-purchase agreement, viz., the owner and the hirer. However, sometimes a financier, for example in case of motor vehicles, is also brought in as a necessary party who purchase the vehicle from the owner and lets the same on hire to the hirer on instalments and in such case, a guarantor is also required to be supplied by the hirer to secure fulfilment of the obligations imposed on the hirer under the agreement.

(v).- Clauses.-In drafting a hire-purchase agreement, care should be taken to draft the following important clause in the agreement properly ;

(a) No obligation to buy.-The agreement of hire-purchase should not amount to an agreement to buy but it should only give the hirer an option to purchase because where a person under an agreement to buy obtains the possession of the goods and the hirer under the hire-purchase agreement so obtains the possession, he would be able to give little to any one who takes the goods on sale or pledge from him without notice of the hire purchase agreement [See section 30 (2) of the Sales of Goods Act, 1930 and thereby the hirer would be able to defeat the intention of the owner. Where, however, the agreement is not an agreement to buy but it merely give an option to the hirer to buy on the fulfillment of certain conditions, the hirer cannot gives a valid title to any one. [Roopchand Jankidas v. National Bank, 46 Cal. 342].

(b) Property in goods not to pass.-A hire-purchase agreement must contain an express stipulation that the property in the goods shall not pass of the hirer untill all instalments have been paid.

© Minimum payment clause.-A hire-purchase agreement may be terminated either by the owner or hirer and the hirer may return the article to the owner after terminating the agreement. But since the articles are subject to usual wear and tear on account of user, it is usual to insert a “minimum payment” clause in the agreement in order to provide for depreciation of the article taken under the hire-purchase agreement. Such a clause provides that in the event of the agreement being determined by the owner or the hirer, the hirer shall be liable to pay 50% of the total price after deduction of the instalments already paid by the hirer.

(d) Seizure clause.-It is also usual to incorporate a clause in the hire-purchase agreement empowering the owner to seize the article hired in the event of the hirer committing a breach of any terms thereof, particularly the non-payment of monthly hire.

(vi) Claim of financier to prevail over the state.-Where under a hire-purchase agreement, the financier, i.e., the owner lets on hire a motor vehicle to the hirer, clause 4 of the agreement states that, on default by the hirer, the owner can seize, remove and retake possession of the vehicle and sue for all the instalments due and for damage for breach of the agreement and for all the costs of retaking of possession of the said vehicle and all costs occasioned by the hirer’s default. Clause 6 would show that, only upon the hirer paying the entire amounts due under the agreement, the said vehicle shall become the sole and absolute property of the hirer. In regard to the registration of the vehicle shall become the sole and absolute property of the hirer. In regard to the registration of the vehicle, thought it is in hirer’s name, clause 8 of the agreement states that the owners-meaning the financing company agree to permit the hirer to have the registration of the vehicle in his name provided that the hirer shall transfer the registration in the name of the owners whenever required to do so by them and especially when the hirer commits breach of any of the conditions of the agreement. In the light of these clauses in the agreement and in the event of the financier seizing the vehicle on default on the hirer in payment of the instalments, the claims of the financier would prevail over that of the State. Where a person has got a prior secured right over the property, the State’s claim will not prevail. In the Income-tax Act, there is no substantive provision for superseding or overriding the claims or rights of a secured creditor. Schedule II mentioned in section 222 of the I.T. Act, 1961, which contains statutory rules in accordance with which the modes of recovery mentioned in that section have to be exercised, relates to procedure only and does not deal with substantive rights. [Sundaram Finance Ltd. v. RTO, (1979) 117 ITR 334 (Ker)].

(vii) Allowability of depreciation of hired article.-The Board has issued the following circular containing instructions regarding depreciation allowance on plant and machinery acquired under hire-purchase agreement.

“The following instructions are issued for dealing with case in which as asset is being acquired under or on what is known as hire-purchase agreement:-

(i) In every case of payment purporting to be for hire-purchase, production of the agreement under which the payment is made should be insisted on.

(ii) Where the effect of an agreement is that the ownership of the subject is at once transferred to the lessee( e.g. where the lessor obtains a right to sue for arrear of instalments but no right to recovery of the asset) the transaction should be regarded as one of purchase by instalments and no deduction in respect of “hire” should be made. Depreciation should be allowed to the lessee on the entire purchase price as per the agreement.

(iii) Where the terms of the agreement provide that the equipment shall eventually become the property of the hirer or confer on the hirer an option to purchase the equipment, the transaction should be regarded as one of hire-purchase. In such case the periodical payments made by the hirer should not tax purposes be regarded as made up of-

(a) consideration for hire, to be allowed as a deduction in the assessment ; and
(b) payment on account of purchase, to be treated as capital outlay, depreciation being allowed to the lessee on the initial value(i.e., the amount for which the hired subject would have been sold for cash at the date of the agreement).”

The allowance to be made in respect of hire should be the difference between the aggregate amount of the periodical payments under the agreement and the initial value(as described above), the amount of this allowance being spread evenly over the term of agreement. If, however, the agreement was terminated either by outright purchase of the equipment or its return to the owner, the deduction should cease as from the date of the termination.

An assessee claiming this deduction should be asked to furnish a certificate from the vendor or other satisfactory evidence of the initial value (as described above). Where no certificate or satisfactory evidence is forthcoming, the initial value should be arrived at by computing the present value of the amount payable under the agreement at an appropriate rate per centum. In doubtful case the fact should be reported to the Board”.
[Circular No.9 of 1943, R. Dis. No. 27(4) IT/43, dated 23rd March, 1943].

(viii) Registration.-Registration of a hire-purchase agreement is not compulsory.

(ix) Stamp duty.-The hire-purchase agreement requires a stamp of only Re. 1 like an ordinary agreement.

(x) Model Forms


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38 - AGREEMENT FOR BUILDING WHERE OWNER SUPPLIES
PLOT AND ALL MATERIALS

An AGREEMENT made on the ………..day of …………….BETWEEN AB, etc. (hereinafter called the “owner”) of the part and CD, etc, (hereinafter called the “contractor”) of the second part.

WHEREAS

1. The owner owns a plot of land measuring ……… metres situate at …. And more particularly described in the plan attached.

2. The owner is desirous of erecting a building on the said plot.

3. The plans, drawings, designs and elevations of the said intended building and specifications of the works to be done and of the materials to be provided in and for the erection of the same as prepared by the architect have been approved by the parties.

4. The contractor is willing to execute the said works for the sum of Rs……

5. The materials to be used for the building will be supplied by the owner himself and the contractor will supply labour as well as the building tools and other accessories necessary for the completion of the said building.

NOW THE PARTIES HERETO HEREBY mutually agree as follows :

1. The contractor will clear and prepare the site for and will erect and complete the building in conformity with the plans, drawings, designs and elevations with the materials supplied by the owner in a thorough and work-manlike manner.

2. Subject to the conditions hereinafter appearing, the owner will pay to the contractor a sum of Rs……. within six months after the contractor has completed the works in accordance with the terms of this agreement and handed over the same to the owner.

3. The contractor will finish and complete the said building on or before the ….. day of ….. and if the said building shall not be completed on or before the said date, the contractor shall forfeit, out of the moneys which shall be due to him by virtue of this agreement, the sum of Rs….. for every days which shall elapse after the …… day of …… until the said building shall be completed : Provided if the contractor is prevented by any strike among the workmen or by reason of any event beyond his control, the owner may extend time for the completion of the work for such reasonable period as he may think fit under CI. (10).

4. The contractor will do and perform all works incidental to the proper execution and completion of the building including all works rendered necessary in consequence of the doing of the works and will supply labour necessary for the same and no additional payment will be made for the same.

5. The contractor will permit the owner to have access to the works while the same are under construction and to inspect the same.

6. The contractor will not vary or deviate from the said plans and specifications without having first obtained the permission in writing of the owner.

7. The contractor will, if so required by order in writing signed by the owner, alter the design or size of the works and the materials to be used in constructing the same, provided that he shall not be bound to do so unless the sum to be paid for any extras or to be allowed for any omission has been first fixed by agreement between him and the owner and, in default of agreement, the sum to be so paid or allowed shall be settled by ………………

8. The contractor shall make good any defects, shrinkage or other faults that may appear in the works within six months after their completion.

9. While the works are in course of construction and until the owner takes over the same, they and all materials or plants used or to be used in constructing the same shall remain at the contractor’s risk and he shall not be entitled to any compensation for injury, to or loss or destruction of, such works or materials arising from any cause whatever.

10. If the contractor requires any extension of time for completing the works he must apply to the owner within seven days from the date of the occurrence of the event on account of which he desires such extension ; and the owner may, if he thinks such request reasonable, grant such extension of time as he may think necessary.

11. If the owner is at any time dissatisfied with the progress of the work or with the quality of materials used or of the workmanship he may apply to ……. To depute an Engineer to inspect the works, and if such officer certifies in writing that the rate of progress or the materials used or the workmanship or any or all of them is or are unsatisfactory or not in accordance with this agreement, the owner may then enter upon the site of the works and may employ another builder to complete the same and may pay such builder the cost of such completion out of the sum payable to the contractor under this agreement or the balance of such sum if advances have been made to the contractor, and, if such cost is more than such sum of balance, then the contractor willpay the excess to the owner.

12. Unless the terms are extended under clause (10) hereof, the contractor will complete a portion of the works of the value of not less than Rs….. on or before the …. And will complete the whole work and will remove from the site of the works all plant, scaffolding, unused materials and rubbish and will leave the works and site clean on or before…….

13. If the contractor fails to comply with the provision of CI. (12) on or before the dates mentioned therein or within such extended time as be permitted in accordance with CI. (13) hereof, he will pay to the owner as liquidated damages a sum of Rs……………for every day’s delay, and the owner may deduct such sum or sums from any money due to the contractor under these presents or may recover it otherwise.

14. At the end of each calendar month commencing from the date when the contractor commences work the owner will pay the contractor a sum equal to 80 per cent of the value as estimated by the parties or in case of disagreement between the parties by…………… of the work executed by the contractor during the month and the owner will make final payment to the contractor at the end of six months from the date when the works are completed.

15. If at any time during the progress of the works or after completion or the alleged completion thereof and at any time during the continuance of this agreement any dispute or differences arise between the parties hereto in relation to or in connection with this agreement, the same shall be referred to the arbitration of Sri…………….as the sole arbitrator or to two arbitrators one to be appointed by each party and provisions or the Indian Arbitration Act, 1940, shall apply . The decision so given shall be final and binding upon the parties.

16. The contractor will indemnify the owner from all claims for injury caused to any person, whether a workman or not, while in or upon the works or the site of the same the said owner shall not be bound to defend any claim brought under the Workman’s Compensation Act unless the contractor first deposits with the owner might incur by reason of defending any such claim.

IN WITNESS WHEREOF the parties hereto have signed this agreement on the day and year first written above.

…………………… …………………..
(Contractor)
(Owner)


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39 - HIRE –PURCHASE AGREEMENT FOR A T.V. SET

THIS AGREEMENT made on this………………day of…………….BETWEEN AB, etc. (hereinafter called the “owner”) of the one part and CD, etc., (hereinafter called the “hirer”) of the second part and EF, etc., (hereinafter called the “guarantor”) of the third part.

1. The hirer has agreed to take on hire a T.V. set of……………make No………………..;
2. The owner has agreed to give on hire the said T.V. set to the hirer under the terms and conditions hereinafter appearing ; and
3. In condition of the owner having delivered the said TV set to the hirer on the assurance of the said guarantor in accordance with the terms mentioned below :

NOW THIS AGREEMENT between the aforesaid parties WITNESSES as follows :

1. That the hirer has paid a sum of Rs……………..as the first instalment of the hire for the month commencing with……………..in advance of the date of this agreement (the receipt whereof the owner hereby acknowledges). The hirer shall hereafter pay a sum of Rs………………. per month in advance continuously and punctually on the …………..day of………….to the owner for the use of the said T.V. set at………………..(particulars of the house).

2. That in case the hirer pays to the owners punctually………….. instalments as aforementioned, i.e., has paid a sum of Rs……………in all as hire as abov-mentioned till the date of…………it shall be at the option of the hirer to become the owner of the said T.V. set on payment of Re. 1 to the owner in which event the hirer become the absolute owner of the said T.V. set. But until the actual payment of the total sum of Rs…………..paid monthly as hire and until the payment of Re.1 for option to purchase, the property in the T.V. set shall remain in the owner and the hirer shall be deemed to be merely a bailee thereof without any right to part with possession of the said T.V. set to be used or kept in custody by any other person. I shall, however, be open to the said hirer to pay the sum of Rs………….including the sums already paid as hire by him as aforesaid before the final payment of the last hire instalment as aforementioned and on payment of the said balance along with Re.1 for option to purchase the same the hirer shall become along the owner of the said T.V. set. In case the hirer shall desire to terminate this hirer agreement prior to the payment of the instalments of hire as aforementioned, hirer shall be bound to pay at least the sum of Rs…………..(50 per cent of the price) to cover the depreciation and the fall in price of the T.V. set. The owner shall be entitled to terminate this agreement in the event of the hirer making default in the punctual payment of the hire instalment as agreed to above. In that event, the owner shall be entitled to seize the said T.V. set and take possession of it and the hirer shall give access to the owner for such purpose and the owner shall not be liable to the hirer for such action in any manner whatsoever. The owner in such an event shall be entitled to recover from the hirer all the hire instalments in arrear and in case such instalmets be less than 50 per cent of the orginial price (viz. Rs………………) he shall be entitled to recover the balance that accrues after taking into account the previous hire instalments paid to the extent to which the said payments do not equal the 50 per cent. Of the said price of the T.V. set.

3. That in case the T.V. set is destroyed or injured in any manner while in custody of the hirer, the hirer shall be bound to get the said T.V. set repaired immediately and in the event of the non-repair the owners will be entitled to seize the said T.V. set and get it repaired and realise the said repairs besides his dues as aforementioned.

4. That the hire shall be bound to pay all public charges and licence fees until he becomes the owner of the said T.V. set as aforementioned and in default whereof, the hirer shall be liable for any damages to the owner. The hirer shall not be entitled to remove the said T.V. set from the aforementioned premises except with the consent in writing of the owner.

5. That in consideration of the owner having delivered the said T.V. set to the hirer on the terms as aforementioned the guarantor has agreed with the owner to guarantee the punctual and continuous payments of the hire instalments as aforementioned until either the hire agreement is terminated by the hirer or until all the hire instalments as aforementioned have been paid to the owner. The guarantor shall also be liable to the owner for any damages caused to the said T.V. set in any manner whatsoever whilst in custody of the hirer or until it is delivered in good condition to the owner in accordance with or pursuant to the terms of this agreement or until it is seized by the owner in the events aforementioned. The guarantor, his heirs and successors shall be liable to be truly bound by the terms of this agreement.
IN WITNESS WHEREOF, the parties hereto have signed this hire agreement with the option of purchase as mentioned above.
EF AB
………………… ………………..

(Guarantor) (Owner)

CD
……………
( Hirer)

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40 - HIRE-PURCHASE AGREEMENT BETWEEN MANUFACTURER

AND HIRER







THIS AGREEMENT made on this……………… day of ……………. BETWEEN ABC, etc. (hereinafter called the owner which expression shall include the successors and assigns unless the context otherwise admits) of the one part and CD, etc. (hereinafter called the hirer) of the other part.



WHEREAS



1. The owner is engaged in the business of manufacturing………….. and has agreed to let to the hirer.



2. The hirer has agreed to take on hire the said goods more particularly described in Schedule A hereto for the term of………….years……………from…….



NOW THIS AGREEMENT WITNESSES as follows :



1. Hire.-The hirer shall pay to the owner on the execution of this agreement the sum of Rs………………………… as hire for the first month and on the first day of every calendar month during the period of hiring the sum of Rs……………by way of hire for the said goods, or shall pay the rent specified in Schedule-B hereto which payable without demand on the day therein mentioned.



2. Option to purchase.-The hirer shall at any time during the hiring have the option to purchase the said goods for Rs…………and in that event the hirer shall receive full credit for all sums previously paid by him under the preceding clause. However , until the purchase so effected and the price fully paid by the hirer the said goods shall remain the pr0perty of the owner.



3. Hirer’s covenants.-During the hiring period the hirer will-

(a) not sell, transfer pledge, hypothecate, charge or in any manner encumber the goods or part with possession thereof either in entirely or in part ;



(b) Not without the consent in writing or the owner, remove the said goods or any part thereof from the premises of the hirer at……………..and shall inform the owner forthwith of any change in address or shift or place ;



© will not lend or mortgage the goods to any other person without the previous permission in writing of the owner ;



(d) will keep and maintain the goods in good order and condition and will, on the expiry of……………years or earlier termination of this agreement, return the same to owner in the same condition in which it has been given on hire, reasonable wear and tear however excepted, and all loss or damage due to breakage pilferage or any other cause shall be made good by hirer at his own cost;



(e) pay all taxes, fees, duties, fines, registration charges, other charges, payable in respect of the assets as when the it shall become due ;



(f) permit the owner or his authorised agent or any nominee at all reasonable times to visit and examine the condition of the said goods ;



(g) shall keep the goods insured against all looses or risks or damage by fire, tempest or theft upto the value of Rs…………with an Insurance Company to be nominated by the owner and shall punctually all premia and produce to owner of and when so required the receipts for the last premium paid and keep the insurance alive during the continuance of the agreement. If the said hired goods are damaged or destroyed by fire or lost by theft all moneys received in respect of such insurance by the hirer shall be paid forthwith to the owner who shall apply the same in making good the loss by replacement of such damaged part or parts or the entire goods of similar description and value whereupon such replaced part or parts or goods shall become subject-matter to this agreement in the same manner as the original goods ;



(h) in case of default by hirer in payment of the charges mentioned in sub-clause (g) above, the owner may pay the same or any part thereof and the hirer shall be liable to reimburse the same together with interest thereon at the rate of 15% p.a. from the date of payment by the owner ;



(i) the hirer shall indemnify the owner against claims by third parties arising out of any accident caused by the user of the asset by the hirer until the determination of this agreement ;



(j) the hirer shall not use or permit or cause the asset to be used in contravention of any statute or regulations for the time being in force or otherwise in any way contrary to any law excepting as permitted by and under this agreement ;



(k) hirer agrees to make good to the owner all damages caused to the asset (fair wear and tear excepted) and pay the owner the full value of the asset if there is total loss of the assets, whether the damage or loss be caused accidentally or otherwise and by any reason whatsoever and to keep the asset at his sole risk, until he purchases the asset or returns it to the owner ;



(l) hirer agrees to pay all expenses for repair found necessary by the owner, replace any damaged parts and not make any alteration or addition thereto without previous permission in writing of the owner ;



(m) hirer has examined /caused to be examined the asses and receipt by him of the same shall be conclusive proof that the asset has been duly accepted by him as being in perfect order and has been duly accepted by him as being in perfect order and working condition.



4. Intimation of change in address.-The hirer shall forthwith intimate the owner of any change of his address and also of the address of the premises where the asset is kept and shall also immediately notify the owner in writing of any loss or damage to the said asset.



5. Default.-If the hirer shall make default in the punctual and prompt payment, in full, of the said monthly hire or in the observance or performance of any of the provisions of this agreement, which is to be observed and performed by him, the hiring shall immediately determine.



6. Owner to take possession.-On the determination of the hiring, the owner shall without notice or demand take possession of the hired goods and for that purpose may by himself or by his agent or servants enter into or upon any premises occupied by the hirer and search for the same if necessary for the said goods.



7. Hirer’s option to terminate hiring-The hirer may terminate the agreement at any time without notice by returning the said goods at the owner’s address or his place of business.



8. Rights to damages not affected.-If the hiring is terminated by the hirer under clause 7 above such termination shall be without prejudice to the owner’s right to recover the hire upon the date of such termination nor his right to recover damages for any prior breach of this agreement by the hirer or on account of any payments previously made by him.



9. Compensation for depreciation.-On the termination of this agreement either at the instance of the hirer or the owner, the hirer shall pay to the owner by way of compensation for depreciation of the said goods such sum as with the amount previously paid for hire shall be of a sum equal to not less than one half of total amount payable under the agreement.



10. Time or indulgence not to affect owner’s rights.-Any time or other indulgence granted by the owner to hirer shall not prejudice or affect his strict rights under this agreement.



SCHEDULE A



Description of Goods.



1. Name

2. Accession No.

3. Mark/Trade Name

4. Year of Manufacture

5. Make of Machine

6. No. of Machine

7. Other description :

……………………..

……………………….

……………………….

8. Accessories affixed to the goods



…………………………………..

…………………………………..

…………………………………

………………………………..

……………………………….

SCHEDULE B

(ABOVE REFERRED TO)



Amount payable under this Agreement :

Due Date Amount (Rs.)

……………….. ………………..

……………….. ………………..

……………….. ………………..





IN WITNESS WHEREOF the parties hereunto have set their respective hands the day, month and year hereinabove written.



Witnesses : Signature of Hirer



1……………..

2…………….. Signature of Owne





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41 - UNDERWRITING AND BROKERAGE AGREEMENTS



(I) Underwriting agreements-The object of underwriting is to insure against the risk that shares, debentures or debenture stock offered by a company for subscription may not be taken up. For floatation of share/debenture capital, a company is generally required to have the public issue fully underwritten to insure that all the shares and debentures are taken up by the investor and thus the required capital is raised. The underwritten provides an assurance against the risk of undersubscription .

(a) Payment of commission to underwriter .- The underwriters are entitled to commission. Section 76 of the Companies Act, 1956, provides as follows :
“76 (1). A company may pay a commission to any person in consideration of-
(a) his subscribing or agreeing to subscribe, whether absolutely or conditionally for any shares in, or debentures of, the company, or

(b) his procuring or agreeing to procure subscription, whether absolute or conditional for any shares in or debentures of, the company,

If the following condition are fulfilled, namely :-
i) the payment of the commission is authorised by the articles ;
ii) the commission paid or agreed to be paid does not exceed in case of shares five per cent of the price at which the shares are issued or the amount or rate authorised by the articles, whichever is less, and in the case of debentures, two and a half per cent of the price at which the debentures are issued for the amount or rate authorised by the articles, whichever is less :

iii) the amount or rate percent of the commission paid or agreed to be paid is-

(a) in case of shares or debentures offered to the public for subscription, disclosed in the prospectus; and

(b) in the case of shares or debentures not offered to the public for subscription, disclosed in the statement in lieu of prospectus, or in a statement in the prescribed form signed in like manner as a statement in lieu of prospectus and filed before the payment of the commission with the Registrar and where a circular or notice, not being a prospectus inviting subscription for the share or debentures, is issued, also disclosed in that circular or notice ;

iv) the number of shares or debentures which persons have agreed for a commission of subscribe absolutely or conditionally is disclosed in the manner aforesaid; and

v) a copy of the contract for the payment of the commission is delivered to the Registrar at the time of delivery of the prospectus or the statement in lieu of prospectus for registration.

2) Save as aforesaid and save as provided in section 78, no company shall allot any of its shares or debentures or apply any of its moneys, either directly or indirectly in payment of any commission, discount or allowance, to any person in consideration of-

a) his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares in, or debentures of, the company; or

b) his procuring or agreeing to procure subscription, whether absolute or conditional, for any shares in, or debentures of, the company whether the shares, debentures or money be so allotted or applied by being added to the purchase money of any property acquired by the company or to the contract price of any work to be executed for the company, or the money be paid out the nominal purchase money or contract price, or otherwise.

3) Nothing in this section shall affect the power of any company to pay such brokerage as it has heretofore been lawful for a company to pay.

4) A vender to, promoter of, or other person who receives payment in shares, debentures or money from, a company shall have and shall be deemed always to have had power to apply for any part of the shares, debentures or money so received in payment of any commission the payment of which, if made directly by the company, would have been legal under this section.

(4-A) For the removal of doubts it is hereby declared that no commission shall be paid under clause (a) of sub-section (1) to any person on shares or debenture which are not offered to the public for subscription :

Provided that where a person has subscribed or agreed to subscribes under clause (a) of sub-section (1) for any shares in, or debentures of, the company and before the issue of the prospectus or statement in lieu thereof any other person or persons has or have subscribed for any or all of those shares or debentures and that fact together with the aggregate amount of commission payable under this section in respect of such subscription is disclosed in such prospectus or statement, then the company may pay commission to the first mentioned person in respect of such subscription.

5) If default is made in complying with the provisions of this section, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to five hundred rupees.”













LETTER OF ACCEPTANCE

To
……………….

Dear Sir,

With reference to your application dated………….we accept and admit you as an underwriter of………………ordinary shares of our company at commission of…………….per cent, upon the footing and subject to the conditions contained in your application.

Yours, etc.
……………

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42 -
UNDERWRITING AGREEMENT FOR SHARES



THIS AGREEMENT made on the…………day of BETWEEN AB, etc. (hereinafter called the underwriters) of the one part and CDE Co. Ltd. having its registered office at…………(hereinafter called the company) of the other part.

WHEREAS the company is about to offer for public subscription as issue of…………..shares of…………each in accordance with the terms of the draft prospectus a copy of which is annexed hereto, or with such modifications therein as may be mutually agreed upon between the company and the underwriters :

AND WHEREAS the underwriters have agreed to underwrite the shares on the terms and conditions hereinafter appearing.

NOW THEREFORE IT IS HEREBY AGREED AS FOLLOWS :

1. If the said …….. shares shall on or before the ….. day of … 19….. for such later date as shalol be mutually agreed upon by the parties hereto not after the ….. day of ….. 19…..) be offered by the company for subscription by the public at par on the terms of such prospectus as aforesaid, the underwriters shall on or before the closing of the subscription list apply at par for the said …… shares.

The said prospectus shall be issued in the form already approved by the underwrites or with such modification, if any, as shall be mutually agreed between the company and the underwriters.

2. If on the closing of the lists under the said prospectus the said ….. shares shall be allotted in respect of applications from the public the responsibility of the underwriters is to cease and no allotment is to be made under this agreement but if the said ….. shares shall not be allotted to the public but any smaller number of such shares is so allotted, the undertaking of the underwriters is to cease and no allotment is to be made under this agreement but if the said…………..shares shall not be allotted to the public but any smaller number of such shares is so allotted, the undertaking of the underwriters is to stand for difference between the said………….shares and the number of the shares allotted to the public.

3. The company shall pay to the underwriters in cash within…….. days from the allotment of the said shares a commission at the rate of ………..p.c. on the nominal value of the shares.

4. This agreement is to be irrevocable on the part of the underwriters and is to be sufficient in itself to authorise the company in the event of the underwriters not applying for the said ………..shares to cause application to be made for such shares or any part thereof in the name and on behalf of the underwriters in accordance with the terms of the said prospectus and authorise the directors of company to allot the said……..shares of the company or any part thereof to the underwriters (but subject to the provisions of this agreement) and in the event of harmless and indemnified in respect of such application.

IN WITNESS WHEREOF, etc.

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43 - AGREEMENT TO UNDERWRITE DEBENTURE STOCK



THIS AGREEMENT made on the ……………..day of……………….BETWEEN XYZ Ltd. (hereinafter called the company) of the one part and AB, etc (hereinafter called the underwriter) of the other part.



WHEREAS the company is about to offer for public subscription …………….4 p.c. mortgage debenture stock which to be constituted and secured by a trust deed framed in accordance with the terms of the draft which has already been prepared, and for the purpose of identification subscribed by D., a solicitor of the Supreme Court.



AND WHEREAS the company is desirous of insuring the said debenture stock.



NOW THEREFORE IT IS HEREBY AGREED as follows :



1. The company is to offer for public subscription the said……….debenture stock.



2. Such offer is to be made by a prospectus framed in accordance with the terms of the draft prospectus annexed hereto, but with full power for the company, prior to the publication of such prospectus, to modify the same in such manner as the company shall think fit, provided that such modification shall be approved by the said D.



3. The underwriter shall take up and pay for at par the whole of the debenture stock aforesaid which shall not have been taken up and allotted to other persons within ….. days after the first publication of the said prospectus and in consideration of the obligation so imposed on him he shall be entitled to ….. or to ….. p.c. of the premises on the said ….. stock which shall be received by the company upon the issue of that portion which shall be subscribed for and allotted to persons other than the said underwriter.



4. The underwriter shall pay up the full nominal value of the debenture stock taken up by him as aforesaid by the instalments and at the times specified in the prospectus aforesaid, less, however, the amount of the premium according to the terms of prospectus as issued payable in respect thereof.



5. It shall rest with the underwriter to fix the premium on which the said debenture stock shall be offered for subscription by the said prospectus, and if he shall not within ….. (time) after notice in writing from the company requiring him to specify the same comply with such request, then it shall rest with the company to fix the premium.



6. Any notice the underwriter may be given by sending the same through the post addressed to him at his above mentioned address, and a notice so sent shall be deemed to be served at the expiration of twelve hours after it is posted.



IN WITNESS WHEREOF, etc.,



* General.-In business transactions brokers are appointed for various purposes and the expenditure on payment of borkerge is deductible as revenue expenditure under the income-tax Act. [CIT v. Hoechst Pharmaceuticals Ltd., (1978 113 ITR 877 (Bom)]







LETTER OF CONSENT FOR ACTING AS BROKERS



DATE…………….



Ref. No.

To

The Board of Dddirctors,

ABC Co. Ltd.,

…………………………..



Dear Sirs,

Re: Your public issue of 10% Secured Non-convertible Redeemable Bonds for the aggregate value of Rs. 200 crores.



We, the undersigned, hereby testify and consent to act as Brokers to the aforesaid issue and to our name being inserted as Brokers to the Issue in the Prospectus which the Company intends so issue in respect thereof and we authorise : the said Company to deliver this letter of consent to the Registrar of Companies Act, 1956.



We are agreeable to accept brokerage at 1.5% on the nominal value on allotment of Bonds made in respect of application bearing our stamps as Brokers and we confirm that a copy of this letter may be delivered to the Registrar of Companies pursuant to the provisions of section 76 (1) (v) of the Companies Act, 1956.

Yours faithfully,



Signature

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44 - AGGREMENT BETWEEN A FIRM AND A BROKER FOR AGENCY


THIS AGREEMENT made on the…………………..day of……………..BETWEEN AB, etc., a firm carrying on the business of building contractors at…………….(hereinafter called the firm) of the one part and CD, etc. (hereinafter called the broker ) of the other part.
WHEREAS the firm wants to sell the property described in the Scheudle hereto and for the said purpose the services of the broker are required.

AND WHEREAS the said broker has shown his willingness to accept the agency for the sale of the said property described in the Schedule hereto.

AND WHEREAS the firm has accepted to pay to the broker the present rat of commission of 1 per cent. Of the sale price.

NOW THEREFORE THIS AGREEMENT WITNESSES as follows :

1. The firm hereby gives the broker for a period of three months thereof the right to sell the property described in the Schedule hereto at the price and on the terms and conditions hereinafter contained in this agreement.
2. 2. The broker is hereby authorised to sell the property on he price of Rs. 1,00,000 and out of this consideration the purchaser shall pay Rs.20,000in advance as earnest money and the balance of Rs.80,000 shall be paid within a month hereof before the Registrar at the time of registration of the sale-deed.
3. The broker shall be authorised to sell the property at the price of Rs.1,00,000 and on other terms and conditions that may be acceptable to the firm.
4. The firm hereby represents and warrants that the details of the property as described in the Schedule hereto are true and correct and the said property is free from all encumbrances.

5. The firm hereby undertakes to deliver to the purchaser, within a reasonable time, as abstract of title showing that the firm is the owner of the property and the said property is free from all encumbrances.

6. The firm hereby agrees that the sale-deed to be executed by the firm shall be a full covenant warranty deed free from all encumbrances.

IN WITNESS WHEREOF, etc.

SCHEDULE OF PROPERTY


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45 - ARBITRATION CLAUSE IN BUILDING AGREEMENT


Sometimes Arbitration clause assumes great importance in a building agreement. Therefore, it should be drafted on the following lines.

“In case any dispute should arise between the owner and the contractor, whether in respect of dealy in supply of materials by the owner or delay in execution of work by the contractor, or the quality of the materials so supplied or the quality of the work done or in respect of decorations or alterations suggested or made or extra work required to be done and so executed or not, or in respect or measurements or work done or required to be done, or demand and payment for part or whole of the work done or not done or dealy or refusal in grant of architect’s certificate by the Engineer or its correctness or touching the interpretation, fulfilment or breach of any of the terms of these presents or in respect of deductions to be made or extra payments to be recovered for work improperly done or not executed or in respect of work got done through another contractor for default or breach or non-completion of work agreed to be done under the particulars and for assessment of the value thereof and fixation of liability for the same between the parties hereof or in respect of any act or omission arising out of the performance of non-performance or the obligations or duties pursuant to these presents, the said dispute or disputes shall be referred to the arbitration and final award of a single arbitrator if the parties agree thereto in writing (failing which to the arbitration of an arbitrator to be appointed by the President of the Institute of Engineers ) (or failing which to the arbitration of the municipal or corporation engineer or any competent engineer or architect nominated by him in writing ) on a reference made to him by any of the parties by notice in writing , a copy whereof will be served on the other party at the address mentioned above or such other address as may be notified by that other party sent by registered post. The arbitrator shall be entitles to proceed ex parte after notifying the parties by a reasonable notice as to the time and place therefor. The arbitrator shall also be entitled to associate with himself a surveyor, if necessary at his discretion. The arbitrator shall have power to reopen and revise any certificate granted by the architect engineer under these present.”





AGREEMENT FOR APPOINTMENT OF SOLE SELLING AGENT BY MANUFACTURING COMPANY

AN AGREEMENT made on this………..day of ………….BETWEEN ……………………company, manufacturers of……………(hereinafter called the manufacturers) of the one part AND……………..(hereinafter called the sole agent) of the other part.

WHEREAS

1. The manufacturers are engaged in the manufacture of ……………..and are desirous of appointing a sole selling agent for the sale of the same.

2. The sole agent has approached the manufacturers for appointment as the sole selling agent for…………goods of the manufacturers and is willing to perform the duties as such.

NOW THIS AGREEMENT WITNESSES as follows :

(1) The manufacturers appoint…………as the sole selling agent for the goods manufactured by them for the area comprising……The sole agent shall have exclusive right to sell the goods of the manufacturers in the afore-mentioned area.

(2) This appointment is being made by the Board of Directors subject to the condition that the appointment shall cease to be valid if it is not approved by the company in the first general meeting held after the date of this appointment (Approval by the company in the first general meeting held after the date of appointment is mandatory under section 294 (2) of the Companies Act, 1956. [Arantee Mfg. Corporation v. Bright (P) Ltd; AIR 1967 Bom 440].

(3) This appointment shall last for a period of five years computed from the date of this agreement. It may, however, be extended for further periods not exceeding five years on each occasion. (Under section 294 (1) of the Companies Act, 1956, no company shall appoint a sole selling agent for a term exceeding five years at a time.)

(4) The manufacturers undertake not to sell their goods in retail below the following prices.

(5) The sole agent shall not sell the goods in retail below the prices mentioned under CI. 4 of the agreement.

(6) The following prices, based on present market quotations, shall be payable the sole agent to the manufacturers.

(7) For the first year the prices mentioned in CI.6 shall be binding on the parties. Thereafter the prices shall be liable to increase or decrease according to fluctuation in market quotations.

(8) The sole agent shall be entitled to a commission of 3-1/2 per cent. Onm the sale price of the goods.

(9) The sole agent shall have 20 days credit for payment of price of goods after receipt of goods.

(10) The manufacturers shall not effect direct sales of goods within the area mentioned in CI. (1). All inquiries, orders and correspondence which the manufacturers receive in relation to that area shall be forwarded to the sole agent to be dealt with.

(11) The sole agent may appoint sub-agents and representatives for the area covered by the sole agency. The manufacturers shall not enter into any correspondence or dealings, direct or indirect, with them.

(12) The manufacturers agree to execute the orders placed by the sole agent so far as the goods available with them permit. Neither do the manufacturers guarantee minimum supply of goods to the sole agent nor is the latter bound to place order for any minimum quantity of goods.

(13) In case the terms of this appointment are varied by the Central Government in exercise of its power under section 294 (5) ©, Companies Act, 1956, this appointment shall, as from the date as may be specified by the Central Government in its order of variation of terms, be regulated by the terms and conditions as varied by the Central Government.

IN WITNESS WHEREOF, etc.


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46 - AGREEMENT FOR APPOINTMENT OF SOLE SELLING AGENT BY MANUFACTURING COMPANY

AN AGREEMENT made on this………..day of ………….BETWEEN ……………………company, manufacturers of……………(hereinafter called the manufacturers) of the one part AND……………..(hereinafter called the sole agent) of the other part.

WHEREAS the manufacturers are engaged in the manufacture of ……………..and are desirous of appointing a sole selling agent for the sale of the same.

AND WHEREAS the sole agent has approached the manufacturers for appointment as the sole selling agent for…………goods of the manufacturers and is willing to perform the duties as such.

NOW THIS AGREEMENT WITNESSES as follows :

(1) The manufacturers appoint…………as the sole selling agent for the goods manufactured by them for the area comprising……The sole agent shall have exclusive right to sell the goods of the manufacturers in the afore-mentioned area.

(2) This appointment is being made by the Board of Directors subject to the condition that the appointment shall cease to be valid if it is not approved by the company in the first general meeting held after the date of this appointment (Approval by the company in the first general meeting held after the date of appointment is mandatory under section 294 (2) of the Companies Act, 1956.

(3) This appointment shall last for a period of five years computed from the date of this agreement. It may, however, be extended for further periods not exceeding five years on each occasion. (Under section 294 (1) of the Companies Act, 1956, no company shall appoint a sole selling agent for a term exceeding five years at a time.)

(4) The manufacturers undertake not to sell their goods in retail below the following prices.

(5) The sole agent shall not sell the goods in retail below the prices mentioned under CI. 4 of the agreement.

(6) The following prices, based on present market quotations, shall be payable the sole agent to the manufacturers.

(7) For the first year the prices mentioned in CI.6 shall be binding on the parties. Thereafter the prices shall be liable to increase or decrease according to fluctuation in market quotations.

(8) The sole agent shall be entitled to a commission of 3-1/2 per cent. Onm the sale price of the goods.

(9) The sole agent shall have 20 days credit for payment of price of goods after receipt of goods.

(10) The manufacturers shall not effect direct sales of goods within the area mentioned in CI. (1). All inquiries, orders and correspondence which the manufacturers receive in relation to that area shall be forwarded to the sole agent to be dealt with.

(11) The sole agent may appoint sub-agents and representatives for the area covered by the sole agency. The manufacturers shall not enter into any correspondence or dealings, direct or indirect, with them.

(12) The manufacturers agree to execute the orders placed by the sole agent so far as the goods available with them permit. Neither do the manufacturers guarantee minimum supply of goods to the sole agent nor is the latter bound to place order for any minimum quantity of goods.

(13) In case the terms of this appointment are varied by the Central Government in exercise of its power under section 294 (5) ©, Companies Act, 1956, this appointment shall, as from the date as may be specified by the Central Government in its order of variation of terms, be regulated by the terms and conditions as varied by the Central Government.

IN WITNESS WHEREOF the parties hereto have signed this agreement on the day and year first written above.

…………………… …………………..


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47 - AGREEMENT BETWEEN A MANUFACUTRER AND SELLING AGENT

AN AGREEMENT made on this………………..day of …………………BETWEEN ABC & Co. Ltd. having its registered office at………….(hereinafter called the “manufacturer”) of the one part AND PN son of………………..resident of…………….(hereinafter called the agent) of the other part.

WHEREAS

1. The manufacturer carries on the business of manufacturing baniyans, underwears, hosiery and other wearing apparel of all kinds.

2. The manufacturers is desirous of opening retail shops in various towns of India and is willing to appoint agents for this purpose who shall have to act exclusively as the selling agents of the products of the manufacturer.

3. The said agent has approached the manufacturer and expressed his consent to act as such agent on the terms and conditions mutually agreed upon.

NOW, THEREFORE, THIS AGREEMENT WITNESSES as follows:

1. The manufacturer carries on the business of manufacturing baniyans, underwears, hosiery and other wearing apparel of all kinds.

2. The manufacturer is desirous of opening retail shops in various towns of India and is willing to appoint agents for this purpose who shall have to act exclusively has the selling agents of the products of the manufacture.

3. The said agent has approached the manufacturer and expressed his consent to act as such agent on the terms and conditions mutually agreed upon;

NOW, THEREFORE, THIS AGREEMENT WITNESSES as follows :

1. That the agent shall deposit a sum of Rs…………..as security for the due fulfilment of the terms of this agreement as well as for the adjustment thereof against the price of the goods supplied to the agent by the manufacturer from time to time.

2. That the manufacturer shall supply an assortment of goods manufactured by it approximately of the value of Rs……………in the first instance and thereafter shall furnish to the agent at his request in writing such further goods as may be so requisitioned by him or as the manufacturer may think expedient to supply to the agent to be kept in the shop run by the agent, so that the total value thereof at any time may not, if requisitioned by the agent, exceed the value of Rs…………………but it shall be at the option of the manufacturer to supply further goods of its manufacture, which it may deem expedient, subject, however, to the compliance with the requisition made to the manufacturer by agent as aforesaid to replenish the stock which, in the opinion of the agent, finds a ready market for its sale.

3. That the agent shall keep proper account and shall issue cash voucher for every article sold by him, which shall be prepared in triplicate, one legible copy whereof shall be submitted to the manufacturer by the agent every Friday or the next day on which the shop is opened by the agent in case Friday should be a close-day. The copies of such vouchers shall be accompanied with a statement of account showing the goods received by the agent from the manufacturer during the previous week ending with Saturday previous to Friday on which the return is so submitted.

4. That all the goods supplied by the manufacturer shall be deemed to be in trust with the agent for the purposes of sale on behalf of the manufacturer and any wilful omission or non-mention thereof in the return of the sale and receipt of goods submitted to the manufacturer weekly as aforesaid shall be deemed to be a misappropriation thereof unless such omission when pointed out and notified by the manufacturer is not rectified or appropriately explained within one week of such notification.

5. That the manufacturer shall pay to the agent a commission of……….per cent on the sale of the goods so supplied to the agent. The agent shall be entitled to deduct the commission out of the sale-proceeds and shall be bound to remit to the manufacturer the balance of the sale-proceeds receive by the agent up to Saturday previous, which shall be so remitted on or before Friday next ensuing. The agent, however, shall, at his discretion, be entitled to sell not more than 10 per cent of the sales effected during the week on credit and he shall be bound to realise such outstandings within two months of the sale be bound to pay in cash from his own pocket for the price of the foods so sold on credit. The return submitted by the agent shall show in a separate account the sales so made on credit and the realizations made thereon from time to time.

6. That the agent shall not sell any article at a price less than the one marked thereon by the manufacturer or fixed in respect of the article by the manufacturer from time to time. Any article which becomes soiled or partly broken or otherwise unfit for sale or otherwise apparently diminished in value shall not be exposed for sale by the agent except with the prior approval of the manufacturer, and at prices to be mutually settled between the parties. The agent shall be entitled to give a concession of not more than 5 per cent of the saleable value of any article to any old customer of the agent or any relation of the agent. The agent shall indicate in the return submitted by him weekly as provided in the agreement the fact of such sale at concessional rates.

7. That the agent shall take reasonable care of the goods supplied by the manufacturer and in case of any theft or injury thereto distruction thereof, he shall make a report to the police in case of a cognizable offence having been committed in respect thereof and forward a copy thereof to the manufacturer or submit a report in respect thereof within three days of the occurrence or its cognizance by the agent. the agent shall assist the manufacturer in the apprehension of the offender or in alleviating or removing the cause of such injury, if any. In the event of the manufacturer making a claim for compensation or otherwise from any insurance company the agent shall assist the manufacturer as if the agent was himself the assured.

8. That the agent shall keep the goods of the manufacturer for sale in a premises approved by the manufacturer which shall kept clean and well equipped with furniture and other conveniences for the customers.

9. That this agreement is made to run for a period of two years liable, however, to be terminated earlier, ipso facto in the event of bankruptcy or death of the agent or at the expiry of a notice of a fortnight served on or delivered to the agent at his address aforementioned or sent by registered post to him at the said address in case of default of or breach committed by the agent in respect of any of the terms of this agreement. The agent may also terminate this agreement after giving one month’s notice to the manufacturer in any of the aforementioned modes in case the manufacturer should fail to comply with or commit a breach of the terms of this agreement.

10. That any dispute arising between the parties touching the interpretation or compliance or non-compliance with the terms or conditions of this agreement shall be referred to the arbitration of the President of the District Bar Association who may determine the dispute himself or refer the dispute to the arbitration of any other member of the Bar Association at …………….The fees of the arbitrator shall be determined by the said President with the assent of the parties, failing which by Court having jurisdiction at…………..to try and decide the dispute.

11. That at the termination of this agreement, the accounts between the parties shall be mutually adjusted within one month of such termination . In case any party fails to assist in such examination or adjustment of accounts and the taking of stock, the other party may refer the examination and taking of accounts to the determination of the President of the District Bar Association at………….and the provision of CI. 9 aforesaid shall apply thereto.

12. That no commission shall be payable to the agent after the termination of the agreement whether by efflux of time or otherwise under this agreement, except when this agreement is renewed and the parties mutually further agree thereto or the arbitrator in the event of reference thereto, thinks fit to allow such commission either by interlocutory award or finally subject to such terms as the arbitrator may deem proper.

13. That the agent shall not, during the period of two years fixed in the agreement (and notwithstanding prior determination thereof by any party thereto), sell goods of any other manufacturer or person and the manufacturer shall not appoint any other selling agent within a radius of ……. Yards of the shop of the agent.

IN WITNESS WHEREOF the parties have signed this agreement on the day and year first above written.

……………………………….. ……………………………..
(Agent) (Manufacturer)



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48 - APPOINTMENT OF SELLING AGENT FOR A DISTRICT OR TOWN


THIS AGREEMENT is made on this………………day of BETWEEN AB son of CD, dealer in……………………at……………………..(hereinafter called the “principal”) of the one part and OP son of XY resident of…………….(hereinafter called the “agent”) of the other part.

WHEREAS, the principal is a dealer in……………..and is willing to appoint a suitable party as sole agent for the town of……………..(or district of…………….)

AND WHEREAS, the agent has approached the principal and has expressed his consent to act as the sole agent of the principal.

NOW THIS AGREEMENT WITNESSES as follows :

1. That the agent is hereby appointed the sole agent of the principal for the town of………………(or district of……………..) (hereinafter called the agency district) for the purposes of marking sales of the principal’s goods for the terms of…………….years from the date hereof on the terms and conditions set forth hereof on the terms and conditions set forth hereunder.

2. That the agent shall not while selling the principal’s goods make any representation in the trade to give any warranty other than those contained in the principal’s printed current price list.

3. That the agent shall be allowed to deduct and retain with himself……………….per cent of the list price of all goods sold on behalf of the principal. The agent shall keep a record of all sales and shall remit to the principal regularly on each Saturday all sums received by the agent in respect of such sales less……………… per cent as his commission. All sales shall be made for cash against delivery of goods unless the principal’s consent in writing to give credit to any particular purchaser be in any case first obtained and in the case of credit sales the principal may direct for such increase in the price of his goods over and above the current list price of the principal.

4. That the agent shall not make, purchases on behalf of nor in any manner pledge the credit of the principal without the consent in writing of the principal.

5. That the agent shall at the expense of the principal take on rent and occupy for the purpose of the agency suitable premises with prior approval of the principal and shall keep insured for the full value against all risk of all goods entrusted to his custody by the principal under this agreement and on request by the principal shall, produce to the principal receipts for the rent rates and taxes of the said premises and for the premiums on insurance policies showing that the same have been paid on or about their respective due dates. The agent shall bear all expenses relating to or incidental to the agency.

6. That the agent while selling to persons in the trade shall obtain the purchasers signature to an agreement to the following effect :

(1) That the said principals goods shall not directly or indirectly be resold outside the agency district
(2) That the said principals goods shall not be resold to the public below the full list price for the time being.

7. That the agent shall in all his commercial dealing and documents and on the name-head indicating his place of business describe himself as selling agent for the principal.

8. That a breach of the condition in Cl. 6 hereof shall entitle the principal to put an end to this agreement forthwith and also to recover from the said agent by way of liquidated damages the sum of Rs………………… for each such article sold in breach of such clause. The agent undertakes that all purchasers to whom he may sell the principals goods shall duly enter into, and carry out the aforesaid agreement referred to in Cl. 6 hereof and a breach by any purchaser of any such agreement shall for the purposes of this agreement be deemed to be a breach of Cl. 6 of this agreement by the agent and give the principal the rights and remedies against the agent for breach by the agent of this agreement .

9. That the principal shall keep with the agent a stock of his goods free of all expenses of delivery to the value of Rs………………… according to the principals current price list and the principal further undertakes to replenish such stock in the close of each month so as to keep it at the agreed value : Provided always that the agent shall have no right of action against the principal for delay resulting from shortage of stock, delays in transit accidents, strikes or other unavoidable occurrence in replenishing such stock . The principal shall always have the right without any prior notice to cause a stock checking of the said goods and on any shortage or deficiency found on such stock-taking the agent shall on demand pay to the principal the list price of such shortage or deficiency less the deduction by way of commission or rebate receivable by the agent. The agent shall not alter, remove, or tamper with the marks or numbers on the goods so entrusted into his custody.

10. That the agent shall not sell the goods of the principal to any purchaser except at the full current price list of the principal published by him from time to time. The agent may while selling principals goods allow a discount or rebate of ……………….. per cent.

11. That in the event of any dispute arising between the agent and a purchaser of the principal’s goods, the agent shall immediately inform the principal of the same and shall not without the principal’s approval or consent in writing take any legal proceedings in respect of or compromise such dispute or grant a release to any purchaser of the principal’s goods.

12. That either party may terminate this agreement at his option at any time after the expiration of…………..years by giving to the other one month’s notice in writings.

13. That the benefits under this agreement shall not be assignable to any other person.

14. That during the currency of this agreement the principal shall redirect all inquiries or orders for principal’s goods received by him from persons residing in the agency district of the said agent and in the event where the principal supplies such purchasers directly he shall allow the agent the same commission or rebate as the agent would have been entitled to retain if he had carried out such transaction. A certificate under the signature of the principal’s accountant of the amount of such commission or rebate payable to the agent shall be conclusive evidence of such amount. Such remuneration shall be payable to the agent (half-yearly or monthly). The agent undertakes to refer to the principal all enquiries or orders for the principal’s goods from persons residing outside the agency district of the agent and similar enquiries or orders from persons residing in the agency district for the purpose of re-sale outside the said district and the agent shall not be entitled to any commission or rebate in respect of any sale resulting from any such enquiries or orders.

15. That the agent shall always during the existence of this agreement devote his whole business, time and energy for pushing the sale of the principal’s goods and shall in all such dealings act honestly and faithfully to the principal and shall carry out orders and instructions and shall not engage or be interested either directly or indirectly as agent or servant in any other business or trade without the prior consent in writing of the principal.

16. That on the termination of his agreement for any reason whatsoever the agent shall not for the period of one year solicit trade orders from the persons who had been purchasers of the principal’s goods any time within (seven) years immediately preceding the date of such termination and the agent shall not for a period of one year engage or be interested as agent or servant in any business, firm or company manufacturing, selling or dealing in goods similar to those transacted by the principal.

17. That all goods shall be sold by the agent for delivery at agent’s place of business but the agent shall at his own expenses have the right to deliver goods to purchasers at their places of business.

18. That without prejudice to any other remedy he may have against the agent for any breach or non-performance of any part of this agreement the principal shall have the right summarily to terminate this agreement-

(i) On the agent being found guilty of a breach of its provisions or being guilty of misconduct or negligence of his duties.

(ii) On the agent absenting himself from his business duties entrusted to him under the agreement for four or five days without the principal’s prior permission in writing :

(ii) On the agent committing an act of bankruptcy.

19. That in the event of any dispute arising out of or in relation to or touching with the agreement the same shall be decided by arbitration in accordance with the provision of the Arbitration Act of 1940.

20. That the principal shall be entitled to terminate this agreement by giving one month’s notice in writing to the agent in the event of his ceasing to carry on the said business of the principal.

21. That on the termination of this agreement for whatever reason the agent shall forthwith deliver to the principal all the unsold stock of goods and shall pay to the principal for the shortage or deficiency or stock at list prices less commission and rebate allowable to the agent. The agent shall also deliver to the charge of the principal all books of account and documents of the agency, cash, cheques, bills of exchange or other securities he may have received during the normal course as a result of sales of the principal’s goods and shall transfer, assign or negotiate in favour of the principal all such securities on demand.

IN WITENSS WHEREOF, the parties have signed this agreement on the day and year first above written.

……………………. ……………………….
(Agent) (Principal)

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49 - AGREEMENT BETWEEN A COMPANY AND SOLE SELLING AGENTS

THIS AGREEMENT made on this ………………….. day of …………………. BETWEEN Bande & Bande Ltd. (hereinafter referred to as the company ) having its registered office and factory at Mokamganj, Warle, Bombay , of the one part and Jai Jai & Sons (P.) Ltd., carrying on business at Chandni Chowk, Delhi ( hereinafter called the sole selling agents ) of the other part.

WHEREAS (1) The company is engaged in the manufacture of cotton and textiles polyester fibre yarn suitings and shirtings.

(2) The sole-selling agents are the whole-sale traders in suitings and shirtings and other textile goods in north India with headquarter at Delhi.

(3) The company in its general meeting held on……………has decided to appoint Jai Jai & Sons (P.) Ltd. as the sole-selling agents for northern India for whole-sale business of the company’s manufactured suitings and shirtings and the Central Government has also approved the appointment of the said sole-selling agents vide letter NO……………………..dated………………

(4) It is agreed between the parties that the company shall appoint Jai Jai & Sons (P.)Ltd. as the sole selling agents for the suitings and shirtings manufactured by the company and the said Jai Jai & Sons (P.) Ltd, have agreed to act as the sole-selling agents for the company.

NOW THIS AGREEMENT WITNESSES AS FOLLOWS : (1) That the company appoints Jai Jai & Sons (P.) Ltd, Delhi as the sole-selling agents for the North India including the States of J. & K., Haryana, Punjab, Bihar, Rajasthan, Uttar Pradesh, Union territory of Chandigarh and Delhi for the suitings and shirtings manufactured by the company and the said sole-selling agents will have the exclusive right and authority to sell whether in cash or on credit and procure the orders for sale of the said product of the company in any manner in the territories mentioned above.

(2) The appointment of sole-selling agents shall take effect from 1 st day of………….198……………..and shall operate for a period of five years from the said date without prejudice to the right of reappointment but subject to the approval by the Company in general meeting and also subject to the approval by the Central Government as required under section 294 of the Companies Act, 1956, and Rule 2 of the Companies (Appointment of Sole Agents) Rule, 1975.

(3) The sole-selling agents shall have the right to operate in the entire territories of North India as mentioned above either directly or through their branch offices, associates or sub-agents for giving effect to this agreement.

(4) The sole-selling agents in consideration their selling and procuring orders for the sale of the company’s products shall be paid a commission at a rate not exceeding 30% but determinable by the mutual agreement of the parties at the commencement of every year on sales effected by them at agreed intervals of time on the amount actually collected by them in accordance with the incentive rates on the amount collected, agreed to, and described in the Schedule hereinafter annexed.

(5) The sole-selling agents hereby covenant : (i) That they will exclusively engage in the sale of the company’s products to the best of their efforts and shall not engage in the sale of similar or identical products of other manufactures.

(ii) That they will protect preserve and maintain patents and trade mark of the company’s products sold by them in all possible manner at their own cost and will never allow others to use the same unauthorisedly.

(iii) That they will keep and maintain the full and complete accounts of the sale of the company’s products, area-wise and region-wise and submit quarterly reports of sale, stock in hand, realisation of credit bills and any other information as may be desired by the company at any time or from time to time;

(iv) That they will not create any obligation involving payments either in cash or king on behalf of the company and shall not assign the interest, rights and obligations arising out of these presents to any third party;

(v) That they shall keep the company will informed of the demands of the company’s products arising in the territories of their operation from time to time.

(6) The company also hereby covenants as under :

(i) That it shall provide the sole-selling agents complete catalogue, instruction books, circulars for promoting sales of its products and publish advertisements in local and regional newspapers for promoting sales of the company’s products.

(ii) That it shall execute orders placed by the sole-selling agents with all reasonable despatch

(iii) That it shall not entertain and execute direct orders from the territories assigned to the sole-selling agents and in case any orders are received by it the same shall be passed on to the sole-selling agents and they will be paid commission 20% on such orders.

(7) The parties hereto hereby agree as under :

(i) That nothing contained herein shall prejudice the rights of the company to appoint another selling agents in any of the aforesaid States or to open its own retail shop in writing where it is found necessary to promote public distribution system or to execute any special programme of the Government of India. However, so the company shall obtain prior consent in writing of the sole-selling agents in that behalf.

(ii) That the retail price of the product shall always be determined by the company in consultation with the sole-selling agents.

(iii) That the agreement is renewable subject to mutual consent of the parties hereto on the expiry of five years.

(iv) That the agreement may be terminated by either party on giving six months, notice in advance to the other party in writing but by registered post.

(v) That any dispute arising between the parties hereto shall be referred to the sole arbitrator Shri……………….and the decision/award of such arbitrator shall be binding upon the parties hereto.

(vi) That the Delhi courts will have the sole and exclusive jurisdiction of decide the issues in dispute between the parties hereto.

IN WITNESS WHEREOF, etc. SCHEDULE REFERRED TO ABOVE



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50 - AGREEMENT BETWEEN A COMPANY AND SOLE SELLING AGENTS

THIS AGREEMENT made on this ………………….. day of …………………. BETWEEN Bande & Bande Ltd. (hereinafter referred to as the company ) having its registered office and factory at Mokamganj, Warle, Bombay , of the one part and Jai Jai & Sons (P.) Ltd., carrying on business at Chandni Chowk, Delhi ( hereinafter called the sole selling agents ) of the other part.

WHEREAS (1) The company is engaged in the manufacture of cotton and textiles polyester fibre yarn suitings and shirtings.

(2) The sole-selling agents are the whole-sale traders in suitings and shirtings and other textile goods in north India with headquarter at Delhi.

(3) The company in its general meeting held on……………has decided to appoint Jai Jai & Sons (P.) Ltd. as the sole-selling agents for northern India for whole-sale business of the company’s manufactured suitings and shirtings and the Central Government has also approved the appointment of the said sole-selling agents vide letter NO……………………..dated………………

(4) It is agreed between the parties that the company shall appoint Jai Jai & Sons (P.)Ltd. as the sole selling agents for the suitings and shirtings manufactured by the company and the said Jai Jai & Sons (P.) Ltd, have agreed to act as the sole-selling agents for the company.

NOW THIS AGREEMENT WITNESSES AS FOLLOWS : (1) That the company appoints Jai Jai & Sons (P.) Ltd, Delhi as the sole-selling agents for the North India including the States of J. & K., Haryana, Punjab, Bihar, Rajasthan, Uttar Pradesh, Union territory of Chandigarh and Delhi for the suitings and shirtings manufactured by the company and the said sole-selling agents will have the exclusive right and authority to sell whether in cash or on credit and procure the orders for sale of the said product of the company in any manner in the territories mentioned above.

(2) The appointment of sole-selling agents shall take effect from 1 st day of………….198……………..and shall operate for a period of five years from the said date without prejudice to the right of reappointment but subject to the approval by the Company in general meeting and also subject to the approval by the Central Government as required under section 294 of the Companies Act, 1956, and Rule 2 of the Companies (Appointment of Sole Agents) Rule, 1975.

(3) The sole-selling agents shall have the right to operate in the entire territories of North India as mentioned above either directly or through their branch offices, associates or sub-agents for giving effect to this agreement.

(4) The sole-selling agents in consideration their selling and procuring orders for the sale of the company’s products shall be paid a commission at a rate not exceeding 30% but determinable by the mutual agreement of the parties at the commencement of every year on sales effected by them at agreed intervals of time on the amount actually collected by them in accordance with the incentive rates on the amount collected, agreed to, and described in the Schedule hereinafter annexed.

(5) The sole-selling agents hereby covenant : (i) That they will exclusively engage in the sale of the company’s products to the best of their efforts and shall not engage in the sale of similar or identical products of other manufactures.

(ii) That they will protect preserve and maintain patents and trade mark of the company’s products sold by them in all possible manner at their own cost and will never allow others to use the same unauthorisedly.

(iii) That they will keep and maintain the full and complete accounts of the sale of the company’s products, area-wise and region-wise and submit quarterly reports of sale, stock in hand, realisation of credit bills and any other information as may be desired by the company at any time or from time to time;

(iv) That they will not create any obligation involving payments either in cash or king on behalf of the company and shall not assign the interest, rights and obligations arising out of these presents to any third party;

(v) That they shall keep the company will informed of the demands of the company’s products arising in the territories of their operation from time to time.

(6) The company also hereby covenants as under :

(i) That it shall provide the sole-selling agents complete catalogue, instruction books, circulars for promoting sales of its products and publish advertisements in local and regional newspapers for promoting sales of the company’s products.

(ii) That it shall execute orders placed by the sole-selling agents with all reasonable despatch

(iii) That it shall not entertain and execute direct orders from the territories assigned to the sole-selling agents and in case any orders are received by it the same shall be passed on to the sole-selling agents and they will be paid commission 20% on such orders.

(7) The parties hereto hereby agree as under :

(i) That nothing contained herein shall prejudice the rights of the company to appoint another selling agents in any of the aforesaid States or to open its own retail shop in writing where it is found necessary to promote public distribution system or to execute any special programme of the Government of India. However, so the company shall obtain prior consent in writing of the sole-selling agents in that behalf.

(ii) That the retail price of the product shall always be determined by the company in consultation with the sole-selling agents.

(iii) That the agreement is renewable subject to mutual consent of the parties hereto on the expiry of five years.

(iv) That the agreement may be terminated by either party on giving six months, notice in advance to the other party in writing but by registered post.

(v) That any dispute arising between the parties hereto shall be referred to the sole arbitrator Shri……………….and the decision/award of such arbitrator shall be binding upon the parties hereto.

(vi) That the Delhi courts will have the sole and exclusive jurisdiction of decide the issues in dispute between the parties hereto.

IN WITNESS WHEREOF, etc. SCHEDULE REFERRED TO ABOVE


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51 - DEALERSHIP AGREEMNTS

(I) Preliminary.- It is the common feature of the manufacturing operations of the industrial concerns that dealers are appointed to sell the goods so manufactured . it is because of this that dealership agreements are invariably entered into by the manufacturing concerns with the other parties so as to demarcate the contours of relations inter se.

(ii) Model Forms













DEALERSHIP AGREEMENT BETWEEN A MANUFACTURING
COMPANY AND FIRM

THIS AGREEMENT MADE ON THIS……………day of…………….BETWEEN Chandika & Co. Ltd., a company incorporated under the Companies Act, 1956 and having its registered office at …………(hereinafter called the ‘company’ which expression shall, unless the context admits otherwise, includes its representatives) of the one part and Jumb & Jumboo, a partnership firm consisting of Shri……………..,Shri……………………Shri……………….and Smt……………..w/o Shri…………………partners, having its main business place at………………and branches at………….. and ……………..(hereinafter called “the firm” which expression shall, unless the context admits otherwise, include the partners, their heirs, executors, administrators, representatives and assigns) of the other part.

WHEREAS

1. The company manufacturers cotton and polyster fibre yarn suitings and shirtings.

2. The firm has its own well-established marketing network and is selling goods of various manufactures and is desirous of selling the goods of the company at a new sales depot recently taken by it on rent for the purpose.

3. The company, after having considered the proposal of the firm, has agreed to appoint the firm as its dealer on the terms and conditions as hereinafter appearing.

NOW THIS AGREEMENT WITNESSES as under :

1. That the company hereby appoints the firm as its dealer for selling its products, more particularly described in the Schedule annexed hereto.

2. That the agreement shall remain in force originally for three years commencing from…………but may be renewed for similar periods on the terms and conditions as may be agreed by and between the parties hereto.

3. That the firm shall keep a minimum stock of…………pieces each of the company’s products described in the Schedule to meet the demand of the ultimate users/consumers, and such quantity shall be reviewed every quarter in the light of the sales during the previous quarter the demands, consumers likings and the market trends.

4. That the company shall supply to the firm its products on credit for fifteen days from the date of the invoice and shall charge interest at the rate of………….per cent per annum from the sixteenth day of the invoice till payment in full if payments are not made within the period credit aforesaid.

5. That the company shall supply to the firm publicity and advertisement material in sufficient quantity for display at the firm’s sales depot and for the distribution in its area of operation.

6. That the company shall bear 60% of the cost of maintaining the firm’s sales depot including rent thereof subject to a maximum of 6% of the invoice value of all the products of the company sold to the firm, which amounts shall be credited to the firm’s running account maintained with the company at the end of each quarter.

7. That the accounts between the parties will be settled half-yearly and the credit/debit balance shall be squared up by making necessary payment6s by the parties.

8. The firm shall make all efforts for the promotion of the sale of the company’s products and in the event of the company being of opinion on the basis of sale records that the firm is failing in properly performing its duty as dealer, the company shall be at liberty to terminate this agreement by giving the firm one month’s notice in writing and on the expiry of the notice period, this agreement shall stand terminated and the parties shall settle their accounts within a week thereafter.

9. The company hereby agrees and undertakes to supply to the firm its products as per the firm’s orders and on the company failing to supply the goods under the firm’s orders ,the firm shall be at liberty to terminate the agreement by giving the company one month’s notice in writing and after the expiry of the notice period, this agreement shall stand terminated and the parties shall settle their accounts within a week thereafter

10. The firm shall at no time sell any product of the company at a price higher than that fixed by the company from time to time

11. The firm shall be free and entitled to appoint sub-dealers, salesmen, commission agents or other sales personnel on salary, commission or any other basis, but with the condition that they will function in accordance with the provisions of this agreement and not do anything which is detrimental to the interest of the company, or the firm and the collective interests of both.

IN WITNESS WHEREOF, etc.
SCHEDULE REPRRED TO ABOVE

4. HIRE-PURCHASE AGREEMENTS

(I). Preliminary.- Hire-purchase agreements have acquired special importance in the developing economy of the country. What does hire-purchase agreement connote ? By a contract of hire-purchase is meant a contract which in addition to terms of hire, provides that on payment of the rent for a certain period, or for a certain number of times, or on the payment of a certain sum after such payment of rent, or at some time during the hiring, the property in the goods hired shall (or may) pass from the owner to the hirer. [Periar’s Law of Hire and Hire-Purchase 2nd Ed., p.2]. In effect hire-purchase agreement is a contract of bailment and is governed by the provisions of Chapter IX of the India Contract Act, 1872. This agreement is with an option to purchase though it is sometimes used in a wider sense to include agreements where there is an irrevocable agreement to buy in instalments are paid. A hire-purchase agreement thus creates a bailment, but is a bailment plus an option to purchase. The transaction is composed of the element of both the law of hire and sale, it would be clearly wrong to assimilate it to a hypothecation of moveable property .[V. Dakshinamurthi Mudaliar v. General & Credit Corporation (India) Ltd., AIR 1960 Mad. 328, 330].

The transaction partakes of a contract or bailment with an element of sale added to it. In such an agreement, the owner of the goods lest them on hire for periodic payments by the hirer upon an agreement that when a certain number of payments by the hirer upon an agreement that when a certain number of payments have been completed, the absolute property in the goods will pass to the hirer, but so that the hirer may return the goods at any time without any obligation to pay any balance of rent accruing after return; until the conditions have been fulfilled, the property remains with the owner. In this agreement the hirer is not bound to purchase the thing hired, he has an option, he may or may not purchase. But in either case, if there an obligation to buy, or an option to buy, the goods delivered to the hirer by the owners on the terms that the hirer on payment of a premium as also of a number of instalments shall enjoy the use of the goods, which ultimately may become his property, the transaction amounts to one of hire-purchaser, even though the title to the goods has remained with the owner and shall not pass to the hirer until certain event has happened, namely that all the stipulated instalments have been paid, or that the hirer has exercised his option to finalise the purchase on payment of a sum nominal or otherwise. [Instalment Supply (P) Ltd. v. Union of India, AIR 1962 SC 53, 58: Sundaram Finance Ltd. v. State of Kerala, AIR 1966 SC 1178].

(ii) Hire-Purchase agreement not sale.-It has to be remembered that a hire-purchase agreement is not a sale even if it contains a stipulation in the form of option of the hirer to purchase the article hired. Even where the price for sale is to be pain in instalments later, the property in the goods passes as soon as the sale is made. This follows from the definition of sale in section 4 of the Sale of Goods Act, 1930 (as distinguished from an agreement to sell) which requires that the seller transfers the property in the goods to the buyer for price. The essence of sale is that the property is transferred from the seller to the buyers for a price whether paid at once or paid later in instalments. On the other hand , a hire-purchase agreement as its very name implies, has two aspects. There is first an aspect of bailment of the goods subjected to the hire-purchase agreement, and there is next an element of sale which fructifies when the option to purchase, which is usually a term of hire-purchase agreements, is exercised by the intending purchaser. Thus the intending purchaser is known as the hirer so long as the option to purchase is not exercised, and the essence of the hire-purchase agreement properly so called is that the property in the goods does not pass at the time of the agreement but remains in the intending seller, and only passes later when the option is exercised by the intending purchaser. The distinguished feature of a typical hire-purchase agreement is made but only passes when the option is finally exercised after complying with all the terms of the agreement. [K.L. Johar & Co. vi Dy CTO, AIR 1955 SC 1082,1088].

The position of the owner of goods under a hire-purchase agreement is that of a person who has made on irrevocable offer to sell but no obligation to buy. [Helby v. Mathews, (1895) AC 471 ; Lee v. Butler, (1893) 2 Q.B. 318]. T essence of the hire-purchase agreement is that the hirer is not bound to purchase . [Dalpat Rai v. Manohar Lal & Sons, AIR 1974 Raj. 61]. A hire-purchase agreement has two elements ; (I) element of bailment, and (ii) element of sale, in the sense that it contemplates an eventual sale. The element of sale fructifies when the option is exercised by the intending purchaser after fulfilling the terms of the agreement. When all the terms of the agreement are satisfied and the option to purchase is exercised, a sale takes place of the goods which till then had been hired. [K.L.Johar & Co. v. Dy. CTO, AIR 1965 SC 1082, 1090].

(iii) Duty of hirer.-According to section 151 of the Contract Act, 1872, the hirer is bound to take as much care of the goods hired to him as a man of ordinary prudence would under similar circumstances take of his own goods of the same bulk, quality and value as the goods hired. Under Section 152 of the Contract Act, the hirer in the absence of any special contract is not responsible for the loss, destruction or deterioration of the thing hired, if he has taken such care. Accordingly, the parties may provide by stipulation in that behalf that the hirer will be liable for any loss or damage to the goods arising from any cause whatever.

(iv) Parties .-Normally , there are two parties to the hire-purchase agreement, viz., the owner and the hirer. However, sometimes a financier, for example in case of motor vehicles, is also brought in as a necessary party who purchase the vehicle from the owner and lets the same on hire to the hirer on instalments and in such case, a guarantor is also required to be supplied by the hirer to secure fulfilment of the obligations imposed on the hirer under the agreement.

(v).- Clauses.-In drafting a hire-purchase agreement, care should be taken to draft the following important clause in the agreement properly ;

(a) No obligation to buy.-The agreement of hire-purchase should not amount to an agreement to buy but it should only give the hirer an option to purchase because where a person under an agreement to buy obtains the possession of the goods and the hirer under the hire-purchase agreement so obtains the possession, he would be able to give little to any one who takes the goods on sale or pledge from him without notice of the hire purchase agreement [See section 30 (2) of the Sales of Goods Act, 1930 and thereby the hirer would be able to defeat the intention of the owner. Where, however, the agreement is not an agreement to buy but it merely give an option to the hirer to buy on the fulfillment of certain conditions, the hirer cannot gives a valid title to any one. [Roopchand Jankidas v. National Bank, 46 Cal. 342].

(b) Property in goods not to pass.-A hire-purchase agreement must contain an express stipulation that the property in the goods shall not pass of the hirer untill all instalments have been paid.

© Minimum payment clause.-A hire-purchase agreement may be terminated either by the owner or hirer and the hirer may return the article to the owner after terminating the agreement. But since the articles are subject to usual wear and tear on account of user, it is usual to insert a “minimum payment” clause in the agreement in order to provide for depreciation of the article taken under the hire-purchase agreement. Such a clause provides that in the event of the agreement being determined by the owner or the hirer, the hirer shall be liable to pay 50% of the total price after deduction of the instalments already paid by the hirer.

(d) Seizure clause.-It is also usual to incorporate a clause in the hire-purchase agreement empowering the owner to seize the article hired in the event of the hirer committing a breach of any terms thereof, particularly the non-payment of monthly hire.

(vi) Claim of financier to prevail over the state.-Where under a hire-purchase agreement, the financier, i.e., the owner lets on hire a motor vehicle to the hirer, clause 4 of the agreement states that, on default by the hirer, the owner can seize, remove and retake possession of the vehicle and sue for all the instalments due and for damage for breach of the agreement and for all the costs of retaking of possession of the said vehicle and all costs occasioned by the hirer’s default. Clause 6 would show that, only upon the hirer paying the entire amounts due under the agreement, the said vehicle shall become the sole and absolute property of the hirer. In regard to the registration of the vehicle shall become the sole and absolute property of the hirer. In regard to the registration of the vehicle, thought it is in hirer’s name, clause 8 of the agreement states that the owners-meaning the financing company agree to permit the hirer to have the registration of the vehicle in his name provided that the hirer shall transfer the registration in the name of the owners whenever required to do so by them and especially when the hirer commits breach of any of the conditions of the agreement. In the light of these clauses in the agreement and in the event of the financier seizing the vehicle on default on the hirer in payment of the instalments, the claims of the financier would prevail over that of the State. Where a person has got a prior secured right over the property, the State’s claim will not prevail. In the Income-tax Act, there is no substantive provision for superseding or overriding the claims or rights of a secured creditor. Schedule II mentioned in section 222 of the I.T. Act, 1961, which contains statutory rules in accordance with which the modes of recovery mentioned in that section have to be exercised, relates to procedure only and does not deal with substantive rights. [Sundaram Finance Ltd. v. RTO, (1979) 117 ITR 334 (Ker)].

(vii) Allowability of depreciation of hired article.-The Board has issued the following circular containing instructions regarding depreciation allowance on plant and machinery acquired under hire-purchase agreement.

“The following instructions are issued for dealing with case in which as asset is being acquired under or on what is known as hire-purchase agreement:-

(i) In every case of payment purporting to be for hire-purchase, production of the agreement under which the payment is made should be insisted on.

(ii) Where the effect of an agreement is that the ownership of the subject is at once transferred to the lessee( e.g. where the lessor obtains a right to sue for arrear of instalments but no right to recovery of the asset) the transaction should be regarded as one of purchase by instalments and no deduction in respect of “hire” should be made. Depreciation should be allowed to the lessee on the entire purchase price as per the agreement.

(iii) Where the terms of the agreement provide that the equipment shall eventually become the property of the hirer or confer on the hirer an option to purchase the equipment, the transaction should be regarded as one of hire-purchase. In such case the periodical payments made by the hirer should not tax purposes be regarded as made up of-

(a) consideration for hire, to be allowed as a deduction in the assessment ; and
(b) payment on account of purchase, to be treated as capital outlay, depreciation being allowed to the lessee on the initial value(i.e., the amount for which the hired subject would have been sold for cash at the date of the agreement).”

The allowance to be made in respect of hire should be the difference between the aggregate amount of the periodical payments under the agreement and the initial value(as described above), the amount of this allowance being spread evenly over the term of agreement. If, however, the agreement was terminated either by outright purchase of the equipment or its return to the owner, the deduction should cease as from the date of the termination.

An assessee claiming this deduction should be asked to furnish a certificate from the vendor or other satisfactory evidence of the initial value (as described above). Where no certificate or satisfactory evidence is forthcoming, the initial value should be arrived at by computing the present value of the amount payable under the agreement at an appropriate rate per centum. In doubtful case the fact should be reported to the Board”.
[Circular No.9 of 1943, R. Dis. No. 27(4) IT/43, dated 23rd March, 1943].

(viii) Registration.-Registration of a hire-purchase agreement is not compulsory.

(ix) Stamp duty.-The hire-purchase agreement requires a stamp of only Re. 1 like an ordinary agreement.

(x) Model Forms



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