CMA Foundation · Fundamentals of Business Laws and Business Communication

Legal Methods and Court System in India: formula sheet

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Key formulas

Supremacy rule: Constitution > Statute > Delegated legislation; A statute cannot violate the Constitution, and delegated legislation cannot go beyond its parent Act. Courts can declare such laws invalid.
Delegated legislation test: Valid only if made within the power given by the parent Act; If it exceeds that power (ultra vires), a court can set it aside.
Essentials of a valid custom: Ancient + Certain + Reasonable + Continuous + Not against statute or public policy; A custom that fails any of these conditions is not accepted as law.
Binding force of precedent: Supreme Court law binds all courts in India; High Court decisions bind courts below it in that State. Other High Courts treat them as persuasive.
Statute vs custom: Statute prevails over a conflicting custom; Custom operates only where no statute overrides it.
Public vs private law: Public law = State and individual; Private law = individual and individual; Test: is the State or public authority a party acting as such? Examples: constitutional and administrative law (public); contract and tort (private).
Civil vs criminal law: Civil = private right, remedy; Criminal = offence against society, punishment; Civil: the aggrieved person sues for compensation or other relief. Criminal: the State prosecutes.
Substantive vs procedural law: Substantive = what the right or duty is; Procedural = how to enforce it; Procedural law is also called adjective law. Procedure codes (civil and criminal) are procedural, not substantive.
Literal rule: Clear words → plain, ordinary meaning → apply it as it is; Used when the words are unambiguous, even if the result seems harsh.
Golden rule: Plain meaning → if absurd or repugnant → modify minimally; A softer form of the literal rule. Change only as much as needed to avoid absurdity.
Mischief rule: Find the old law, the mischief, the remedy and the true reason for the remedy; Purpose-based. It is also called Heydon's Case rule and has four questions.
Harmonious construction: Read conflicting provisions so that each has effect; Used when two sections of the same statute seem to clash.
Ejusdem generis: General words after specific words = same kind (class) as the specific words; Meaning: of the same kind.
Noscitur a sociis: A word is known by the company it keeps; The meaning of a word is taken from the words around it.
Expressio unius est exclusio alterius: Mention of one thing excludes others; Naming certain items implies others are left out.
Caveat emptor: Let the buyer beware; The buyer must examine goods before buying.
Ultra vires: Beyond the powers; An act outside legal authority is invalid.
Res ipsa loquitur: The thing speaks for itself; Negligence is inferred from the facts themselves.
Volenti non fit injuria: No wrong is done to one who consents; Willing acceptance of a risk bars a claim.
Actus non facit reum nisi mens sit rea: An act alone is not guilty unless the mind is guilty; Criminal liability generally needs a guilty mind.
Ignorantia juris non excusat: Ignorance of law is no excuse; A person cannot escape liability by saying they did not know the law.
Nemo dat quod non habet: No one can give what he does not have; A person cannot pass a better title than he holds, subject to exceptions.
Audi alteram partem: Hear the other side; A principle of natural justice: no one is condemned unheard.
Ubi jus ibi remedium: Where there is a right, there is a remedy; Every legal right has a remedy.
Order of courts (top to bottom): Supreme Court → High Court → District Court (District/Sessions Judge) → Subordinate Courts (Civil Judges, Magistrates); Appeals normally travel upward through this chain.
Supreme Court jurisdictions: Original + Appellate + Advisory (plus writ, review and special leave powers); Original covers disputes between the Centre and States or between States. Advisory means the President can seek its opinion on a question of law or fact of public importance.
High Court jurisdictions: Original + Appellate + Writ + Supervisory over subordinate courts; A High Court can issue writs for fundamental rights and for other purposes.
Civil vs criminal: Civil = private rights, compensation or relief; Criminal = offences against society, punishment; Civil: plaintiff v defendant. Criminal: State prosecutes the accused.
Binding effect: Supreme Court binds all courts; High Court binds courts below it in its territory; This links the hierarchy to the doctrine of precedent.
Tribunal definition: Tribunal = body created by statute + quasi-judicial powers + specialised subject; Not a regular court, but its decisions bind the parties.
NCLT and NCLAT: NCLT (first forum for company matters) → appeal to NCLAT → appeal to Supreme Court; Both are constituted under the Companies Act, 2013. They also act as Adjudicating Authority and Appellate Authority for corporate insolvency under the Insolvency and Bankruptcy Code, 2016.
Arbitration: Arbitrator decides; the award is binding; Governed by the Arbitration and Conciliation Act, 1996. Based on an agreement between the parties.
Conciliation: Conciliator proposes settlement terms; parties may accept or reject; Settlement becomes binding only when parties agree and sign it.
Mediation: Mediator facilitates; parties decide the outcome; The mediator does not give a decision.
Lok Adalat: Settlement by compromise; award = civil court decree; no appeal (s.21); Legal Services Authorities Act, 1987. For a matter pending in court that is settled, the court fee paid is refunded.

Quick revision

Main sources of law: Constitution, statutes, delegated legislation, custom and judicial precedents.
Public law deals with the relation between the State and individuals; private law deals with relations between individuals.
Constitutional, criminal and administrative law are public law; contract and tort are private law.
A maxim is a short established legal principle, usually in Latin, so match each one to its meaning.
Interpretation of statutes means finding the true meaning of the words of the law.
The literal rule gives words their plain, ordinary meaning.
The Supreme Court is the highest court in India, and High Courts sit below it in the states.
Subordinate courts sit below the High Court at the district level.
Tribunals are special bodies set up by law to decide particular kinds of disputes.
ADR methods include negotiation, mediation, conciliation and arbitration.
Arbitration ends in a binding decision by an arbitrator, while mediation helps parties reach their own settlement.
Never leave a question blank, as there is no negative marking.

Common mistakes

Treating delegated legislation as made by Parliament. Fix: Remember the maker. Parliament passes the Act; the executive or regulator frames the rules under it.
Thinking a custom always overrides a statute. Fix: A statute prevails over a conflicting custom. Custom works only where law is silent or permits it.
Treating criminal law as private law because the victim is a person. Fix: Remember the State prosecutes in crimes, and criminal law is usually grouped under public law.
Thinking civil law and private law are exactly the same thing. Fix: Private law is the broad branch (contract, tort, property). Civil law in the civil/criminal pair refers to the remedy-based side. Answer according to the pair asked.
Treating the golden rule as a completely separate rule from the literal rule. Fix: Remember: golden rule = literal rule plus a small fix only when the result is absurd.
Choosing the mischief rule whenever a case is about fairness. Fix: Choose mischief only when the question mentions the earlier law, the defect and the remedy, or the object of the Act.
Thinking each State has a separate court system from the Centre. Fix: Remember India has one integrated judiciary with the Supreme Court at the top.
Mixing up original and appellate jurisdiction. Fix: Original means the case starts there. Appellate means the case comes there after a lower court decided.
Saying a mediator gives a binding decision. Fix: Only the arbitrator decides. A mediator helps parties reach their own agreement.
Thinking a tribunal is the same as a court. Fix: Remember a tribunal is created by statute for a specific subject and is quasi-judicial, not a regular court.

Exam tips

Learn the five sources and the hierarchy in one line so you can eliminate options fast.
Questions often test who makes each source. Link each source to its maker.
Watch for absolute words such as always and never. They usually signal a wrong option.
Know the essentials of a valid custom as a list. They are a favourite statement-based MCQ.
There is no negative marking, so attempt every question.
Expect match-the-following or identify-the-example questions. Learn one clear example for each category.
Watch for statements like 'State is a party' or 'aim is compensation'. These are direct clues.
Do not mix pairs. A statute can be both public and substantive, or private and substantive. Answer only the pair asked.