Contract Act_Practical Problems_21

A landlord agrees with a bank to lease to it space in a building under construction and obtains an advance for the purpose. The building is, however, requisitioned by Government and, therefore, the landlord is unable to honour his obligations. What are the rights of the bank as against the landlord? Can the bank recover damages for breach of contract?

The problem in question relates to supervening/subsequent impossibility. Section 56 of the Indian Contract Act exonerates a promisor from any liability if the transaction becomes impossible of performance because of some event which the promisor could not prevent. The contract in such cases becomes void. Thus, in the above case since the Government has requisitioned the premises, the agreement to lease out the same is naturally impossible. Hence, the landlord cannot be subjected to any damages for not honouring his obligations. Bank can only ask for the return of advance on grounds of failure of consideration.

Contract Act_Practical Problems_20

A owes B two debts of Rs. 2,000 and Rs. 550. B telephones to A saying that he is in urgent need of Rs. 550 and that A should at least pay Rs. 550. A merely sends a cheque for Rs. 550. B then finds that the other debt of Rs. 2,000 is about to get time-barred. So he applies the cheque in part payment of that debt. Discuss.

Section 59 of the Indian Contract Act, 1872 gives us the rule regarding appropriation of payments. It says, where a debtor, owing several distinct debts to oneperson, makes a payment to him, either with express intimation or under circumstances implying that the payment is to be applied to the discharge of some particular debt, the payment, if accepted, must be applied accordingly.

In the given question, it seems that the payment has been directed to pay off the outstanding debt of Rs. 550 and must, therefore, have been applied towards the same.

Its application to the other debt of Rs. 2,000 is not valid.

Corporate Announcement_5

Scrip Code:513250 Company Name:JYOTI STRUCT

Jyoti Structures Ltd has informed BSE that Compensation Committee of the Board of Directors by Circulatory resolution dated October 08, 2007 has allotted 2,97,600 Equity Shares of Rs 2 each to the employees pursuant to the Stock Options granted under the Company's Employees Stock Option Scheme (ESOS).Consequent to the aforesaid allotment, the paid up share capital of the Company has increased to 8,09,93,490 Equity Shares of Rs 2 each aggregating to Rs 16,19,86,980.

Corporate Announcement_4

Scrip Code:532615 Company Name:ETC NETWORK

ETC Network Ltd has informed BSE that pursuant to the Order made by the Hon'ble High Court of Judicature at Bombay, a meeting of Equity Shareholders of the Company will be held on November 02, 2007, for the purpose of considering and if thought fit, to approve with or without modification(s) the arrangement embodied in the Scheme of Amalgamation ("the Scheme") of ETC Networks Ltd (the Applicant / the Transferor Company) with Zee Interactive Learning Systems Ltd (the Transferee Company) and their respective shareholders.

Corporate Announcement_3

Scrip Code:532174 Company Name:ICICI BANK

ICICI Bank Ltd has announced BSE that the Bank has received Reserve Bank of India’s approval for establishing new branches and additional off-site ATMs broadly in tine with its application to Reserve Bank of India.

Corporate Announcement_2

Scrip Code:500890 Company Name:MODI RUBER

Modi Rubber Ltd has informed BSE that the Register of Members & Share Transfer Books of the Company will remain closed from November 01, 2007 to November 03, 2007 (both days inclusive) for the purpose of 35th Annual General Meeting (AGM) of the members of the Company to be held on November 03, 2007.

Corporate Announcement_1

Scrip Code:532347 Company Name:HELIOS MAT I

Helios & Matheson Information Technology Ltd has informed BSE that in accordance with the Offering Circular dated July 07, 2006 for issue of US$ 20 million with an over allotment option of upto USD 5 million 2.00 per cent Foreign Currency Convertible Bonds due 2011 (FCCBs), the Company has received conversion notice in respect of 10 Bonds aggregating to US$ 1,000,000 from the bond holder. The Committee of Directors of the Company at its meeting held on October 05, 2007 has allotted 354384 equity shares of Rs 10/- each, on conversion of 10 Bonds. Consequent upon the allotment, the total paid up equity capital of the Company stands increased to Rs 21,50,53,320 divided into 2,15,05,332 equity shares of Rs 10 each.