defenses available in Civil Contempt, Essays (high school) of Law

Download defenses available in Civil Contempt and more Essays (high school) Law in PDF only on Docsity! Main Questions: 1. Enumerate the defenses available in Civil Contempt? 2. What are the defenses available in Criminal Contempt? 3. Distinction between Book-keeping and Accountancy? Write 2 Questions 3x10= 30 Marks Short Questions: 4. Trial Balance 5. Ledger Write 2 questions 2x5= 10 Marks 1. Enumerate the defenses available in Civil Contempt? The following defences are available to a person charged with civil contempt of court: Order is vague If the command that is violated is vague or ambiguous in character, and the direction supplied through the order is contingent on certain additional facts that are unclear or inadequate, then such disobedience is not contempt. The Supreme Court held in Dulal ChandraBhar v. Sukumar Banerjee (1958) that if the details of the persons to be arrested or the particulars of the properties to be attached were not specified in a court order of imprisonment or attachment of property, this would not be considered an order disobeyed due to its ambiguity. No knowledge of the order In general, a person cannot be found guilty of contempt for an order that he claims to be uninformed of. There is no intentional disobedience of the order if the respondent commits conduct that results in a breach of the order of which he had no actual awareness as discussed in the case of Mariyappa vs. V.R. Ramkrishna Rao (1999). Disobedience or breach was not wilful The disobedience occurred, however, it was due to circumstances beyond the control of the party involved, such as an accident, administrative issues, or other factors. This plea may be successful if the order has been followed and a reasonable justification for non-compliance has been provided. More than one reasonable interpretations are available for the order If a court order has multiple reasonable and rational interpretations, and the responder picks one of them and acts in line with it, he cannot be held accountable for contempt of court. Only when a valid question of interpretation arises is this defence available. In the case of T.M.A. Pai Foundation vs. the State of Karnataka (2002), it was decided that this defence would not be recognized if doubt about the order was purposefully generated when there was none. Impossible compliance of the order One of the permissible defences in civil contempt proceedings is that compliance with the order is impracticable. However, in the case of Amar Singh v. K.P. Geetakrishnan (1991), the court rejected the argument that the order was difficult but not impossible to follow. Non – Jurisdictional order was passed If the order in question was issued by a court that lacked jurisdiction, its breach would not be considered contempt of court because an order issued without jurisdiction is void. 2. What are the defenses available in Criminal Contempt Innocent publication and distribution of matter. If a criminal contempt is initiated against a person on the ground that he is responsible for publication or for distribution of publication which prejudices or interferes with the pending proceedings, the contemptner may take the following steps: (a) he may plead that at the time of publication, he had no reasonable ground for believing that the proceeding was pending. (b) he may plead that at the time of publication, no such proceeding was pending. (c) he may plead that at the time of distribution of publication, he had no reasonable ground for believing that the matter (published or distributed by him) contained or was likely to contain any material which interfered or obstructed the pending proceeding or administration of justice. Fair and accurate report of judicial proceedings A person should not be held guilty of Contempt of Court for publishing a fair and accurate report of any judicial proceedings or any stage thereof. Further, a person shall not be guilty of Contempt of Court for publishing the text or for publishing fair and accurate summary of the whole or any part of the order made by the court in camera (in Chamber) unless the court has expressly prohibited the publication of the proceedings on the grounds of: a) Public Policy b) Public Order c) Security of the State d) Information relating to a secret process, discovery or invention, or, in exercise of the power vested in it. Fair criticism of judicial act A person shall not be guilty of criminal contempt for publishing any fair comment on the merits of any case which has been finally decided. A defense can be taken that the statement complained of (in respect of publication of which criminal contempt has been initiated) must be in respect of a case which has been finally decided and not in respect of pending proceedings. Moreover, the statement should come from the mouth of a knowledgeable person in the field of law and not from a litigating (iii) Mixed or Hybrid basis It is a combination of cash basis and accrual basis of accounting. Under mixed basis of accounting, both cash basis and accrual basis are followed. Revenues and assets are generally recorded on cash basis whereas expenses are generally taken on accrual basis. The laws in India prohibits the use of this method The objectives of accounting can be given as follows: 1. Systematic recording of transactions – Basic objective of accounting is to systematically record the financial aspects of business transactions, i.e., book-keeping. These recorded transactions are later on classified and summarized logically for the preparation of financial statements and for their analysis and interpretation. 2. Ascertainment of results of above recorded transactions – Accountant prepares profit and loss account to know the results of business operations for a particular period of time. If revenue (Sales) exceeds expenses then it is said that business is running profitably but if expenses exceed revenue, then it can be said that business is running under loss. The profit and loss account helps the management and different stakeholders in taking rational decisions. For example, if business is not proved to be remunerative or profitable, the cause of such a state of affair can be investigated by the management for taking remedial steps. 3. Ascertainment of the financial position of the business – A businessman is not only interested in knowing the results of the business in terms of profits or loss for a particular period but is also anxious to know that what he owes (liability) to the outsiders and what he owns (assets) on a certain date. To know this, accountant prepares a financial position statement popularly known as Balance Sheet. The balance sheet is a statement of assets and liabilities of the business at a particular point of time and helps in ascertaining the financial health of the business. 4. Providing information to the users for rational decision-making – Accounting as a ‘language of business’ communicates the financial results of an enterprise to various stakeholders by means of financial statements. Accounting aims to meet the information needs of the decision-makers and helps them in rational decision-making. 5. To know the solvency position – By preparing the balance sheet, management not only reveals what is owned and owed by the enterprise, but also it gives the information regarding concern’s ability to meet its liabilities in the short run (liquidity position) and also in the long-run (solvency position) as and when they fall due. Some people mistake book-keeping and accounting to be synonymous terms, but in fact they are different from each other. Accounting is a broad subject. It calls for a greater understanding of records obtained from book-keeping and an ability to analyse and interpret the information provided by book-keeping records. Book-keeping is the recording phase while accounting is concerned with the summarising phase of an accounting system. Book-keeping provides necessary data for accounting and accounting starts where book-keeping ends. S.No Book-keeping Accounting 1. It is a process concerned with recording of transactions. It is a process concerned with summarizing of the recorded transactions. 2. It constitutes as a base for accounting It is considered as a language of the business. 3. Financial statements do not form part of this process. Financial statements are prepared in this process on the basis of book-keeping records. 4. Managerial decisions cannot be taken with the help of these records. Management takes decisions on the basis of these records. 5. There is no sub-field of book- keeping. It has several sub-fields like financial accounting, management accounting etc. 6. Financial position of the business cannot be ascertained through book-keeping records. Financial position of the business is ascertained on the basis of the accounting reports. 4. Trial Balance Preparation of trial balance is the third phase in the accounting process. After posting the accounts in the ledger, a statement is prepared to show separately the debit and credit balances. Such a statement is known as the trial balance. It may also be prepared by listing each and every account and entering in separate columns the totals of the debit and credit sides. Whichever way it is prepared, the totals of the two columns should agree. An agreement indicates arithmetic accuracy of the accounting work; if the two sides do not agree, then there is simply an arithmetic error(s). This follows from the fact that under the Double Entry System, the amount written on the debit sides of various accounts is always equal to the amounts entered on the credit sides of other accounts and vice versa. Hence the totals of the debit sides must be equal to the totals of the credit sides. Also total of the debit balances will be equal to the total of the credit balances. Once this agreement is established, there is reasonable confidence that the accounting work is free from clerical errors, though it is not a proof of cent per cent accuracy, because some errors of principle and compensating errors may still remain. Generally, to check the arithmetic accuracy of accounts, trial balance is prepared at monthly intervals. But because double entry system is followed, one can prepare a trial balance any time. Though a trial balance can be prepared any time but it is preferable to prepare it at the end of the reporting period which may be month end/quarter end/year end to ensure the arithmetic accuracy of all the accounts before the preparation of the financial statements. It may be noted that trial balance is a statement and not an account. The preparation of trial balance has the following objectives: (i) Trial balance enables one to establish whether the posting and other accounting processes have been carried out without committing arithmetical errors. In other words, the trial balance helps to establish arithmetical accuracy of the books of accounts. (ii) Financial statements are normally prepared on the basis of agreed trial balance; otherwise the financial statements will not give true and fair picture of the financial transactions. (iii) The trial balance serves as a summary of what is contained in the ledger; the ledger may have to be seen only when details are required in respect of an account. A Trial Balance is a statement that keeps a record of the final ledger balance of all accounts in a business. It has two columns – debit and credit. Trial Balance is prepared at the end of a year and is used to prepare financial statements like Profit and Loss Account or Balance Sheet. The main objective of a Trial Balance is to ensure the mathematical accuracy of the business transactions recorded in a company’s ledgers. Preparing a Trial Balance: There are three methods by which you can prepare a Trial Balance. They are as follows: • Total Method – Total Method records each ledger account’s debit and credit columns to the Trial Balance. Both the columns should be equal as this method follows the double-entry bookkeeping method. • Balance Method – This method uses each ledger account’s final debit/credit balance in the Trial Balance. Once the balance figures of all accounts are listed, the Trial Balance (both on the debit and credit side) helps check the accuracy of all transactions. The Balance Method of preparing Trial Balance is more popular compared to its alternatives. • Total cum Balance Method – This method is a combination of both the Total Method and Balance Method. The Trial Balance has four columns – two for the credit and debit totals of a ledger account and two for that account’s credit/debit balances. Objectives of Trial Balance: The main objectives of a Trial Balance are as follows: • It helps in ascertaining arithmetic errors that occur while preparing accounts. Accountants can make mistakes while recording financial transactions under the double-entry bookkeeping system. When the debit and credit sides of a Trial Balance do not match, it means one of two things. One, there was an error in either recording the account balance. Or two, there is an accounting mistake made while recording the transaction in the ledgers. • It helps in preparing the financial statements of a company at the end of a financial year. The final balance of expenses and revenue accounts is taken from the Trial Balance and used in the Profit and Loss Account. Similarly, the accounts related to Assets, Liabilities and Capital gets recorded in the Balance Sheet. • A Trial Balance helps in summarising the financial transactions done while running a business. It is a consolidated summary of the financial transactions that have taken place within a financial year. It can help the management in making business decisions as well.