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Author: shijan

Chapter- 2

Chapter- 2

Contracting Parties and Proposal and Consent

3. Person competent to Conclude Contracts :

(1) Any person other than those mentioned below may be competent for concluding a contract;
(a) Those who have not attained 16 years of age.
(b) Those who are of unsound mind.
(2) Notwithstanding anything contained in Sub-section (I) any person not qualified to enter into a specific contract under the prevailing law shall be deemed to be incompetent to conclude that contract. ,
(3) The guardian of a person who is incompetent to conclude a contract under Section 1 may conclude a contract on his/her behalf in his interest.
(4) Notwithstanding anything contained elsewhere in this Section, in case the prevailing law provides for a provision even to persons who are incompetent under this Act to conclude a contract on any specific matter, they shall be deemed to be qualified to conclude a contract on such that matter accordingly.

4. Parties to be autonomous : The parties to contract, subject to this Act shall be free to choose the form and content of contract and to determine consideration and its quantum, the terms and conditions of the contract and the nature of the remedy in the event of its violation, as well as to determine the measures for resolving disputes under the contract.

5. Contract to be deemed to have been concluded : A contract shall be deemed to have been concluded once the person to whom a proposal has been presented by another person communicates his/her consent thereto.

6. Place of contract :

(1) The place where the person advances a proposal expecting to receive consent shall be deemed to be the place where the contract has been concluded
(2) In case the place has not been specified under Sub-section (1), the place where the offerer received consent shall be deemed to be the place where the contract has been concluded.

7. Processes of proposal and consent to be deemed completed:

(1) The communication of a proposal shall be deemed to be completed when it comes to the knowledge of the person to whom it is made.
(2) In case the offerer receives a notice of consent to the sent to him/her by the person to whom he/she had sent a proposal, the process of consent shall be deemed to have been completed in the case of the offerer, and in case the offerer is noticed that the consent has been given in the proposal the process of giving consent shall be deemed to have been completed in the case of the proposed person.
(3) The person who has been presented with a proposal shall be deemed to have given his/her consent to it even if he/she has not done it directly to the offer in case he/she compiles with the term and conditions mentioned in the proposal, or accepts any consideration, benefit or service mentioned in the proposal or expresses his/her consent in any other form.
(4) In case the offerer has mentioned in the proposal that he/she would deem the proposal to have been accepted unless he receives a notice of refusal within a specified period, the proposal shall not be deemed to have been accepted in case a notice of refusal has been sent within that- period.

8. Proposal or Consent may be cancelled :

(1) The offerer may cancel his/her proposal through a notice. Provided that, in case the offerer has received from the person whom he has presented a proposal a notice to the effect that he/she has approved the proposal before receiving a notice of the cancellation of the proposal, the proposal shall not be deemed to be cancelled.
(2) The person to whom, a proposal has been presented may cancel proposal through a notice. Provided that, the consent shall not be cancelled in case the offerer
has received the notice of consent before receiving the notice of cancellation of consent.
(3) The person who has sent a notice expressing his/her refusal of a proposal may again send a notice expressing his/her consent to the proposal. Provided that, in case the notice of refusal reaches first out of the notices of refusal or consent the contract shall not be deemed to have been concluded. In case the notice of consent reaches first; the contract shall be deemed to have been concluded.
(4) In case the notice mentioned in Sub-section (1) has been sent after sending the proposal, or the notice mentioned in Sub-section (2) has been sent after sending a notice of consent, or in case a notice has been sent under Sub-section (3) after sending a notice of refusal shall not be deemed to have been concluded if the concerned person receives such notices at the same time.

9. Proposal to be deemed cancelled: A proposal shall be deemed to be cancelled in any of the following circumstances:
(a) In case the offerer has proposed that the notice of consent to the proposal be given to him/her within a specified period, and the offerer does not receive the notice of consent given by the person to whom the proposal has been presented within the period.

(b) In case the period for sending a notice of consent is not specified as mentioned in Clause (a), and the person to whom the proposal has been presented does not furnish a notice to the proposer within a reasonable period.
(c) In case the offerer dies or loses his senses before receiving consent after presenting the proposal.
(d) In case the proposal is cancelled as mentioned in Section 8.
(e) In case the person to whom a proposal has been presented dies or loses his/her senses after giving his/her consent but before the offerer receives the consent.
(f) In case the person to whom a proposal has been presented accepts it after altering any particular contained in the proposal or attaching any condition thereto.
(g) In case a proposal has been presented subject to the condition that the person to whom the proposal has been presented has to do anything or fulfill any condition before accepting the proposal, and her/she accepts the proposal without doing that work or fulfilling that condition.

10. Contract according to proposal presented before the public :

(1) In case any person, by means of an advertisement, advances a proposal in public to the effect that he/she will pay a specific prize or any person for performing any work specified in the advertisement, and incase any perso  the work as mentioned in the advertisement, the advertiser shall pay the specific remuneration to that person.
(2) In case the work mentioned in Sub-section (2) is performed by one or more persons, only the person who has performed the work first shall be paid prize. Provided that, in case two or more persons have performed the work mentioned in the proposal at the same time, all of them may share the prize among themselves. In case the prize can not be shared, the proceeds of the sale of the same shall be equally distributed among them.
(3) In case a specific period has been prescribed for performing the work as per the advertisement published under Sub-section (1), the proposal, mentioned in the advertisement shall be deemed to have been cancelled immediately after the expiry of that period.
(4) A proposal advanced under Sub-section (2) may be cancelled through the medium through which it was published.
(5) Notwithstanding anything contained in Sub-section (4), in case anyone has, performed the work mentioned in the advertisement published under Sub – section (1) before the publication of a notice of cancellation of the proposal, he/she shall be paid the prize mentioned in the advertisement. Provided that, the person who has performed the work as mentioned in the advertisement must have notified the advertiser about the completion of the work by the quickest possible means.
(6) In case any person has begun the work according to the advertisement published under Sub-section (1) and furnished a notice thereof to the advertise, he/she shall be paid an appropriate remuneration for the work, performed by him/her before the cancellation of the advertisement.
11. Indirect contract : Notwithstanding anything contained elsewhere in this act, a contract shall be deemed to have been concluded as follows in the following circumstances:
(a) In case a person who is incompetent to conclude a contract under this Act or other prevailing Nepal law, or any other person who is to be maintained by him/her is provided with any material, commodity or service which material commodity service paid from the property of such he/she needs and that is consistent with his social status, to have the cost of such person to the person so meeting his/her need.
(b) In case any person, who is concerned with the payment or non- payment of any amount to be paid by another person under the prevailing Nepal law makes such payment him/herself, to have that payment repaid to him/her from the property of the person who is actually under obligation to make the payment.
(c) In case any person gives anything to another person, or employs him/her in any work, to pay the appropriate cost or remuneration.
(d) In case any person keeps under his/her personal possession any property belonging to another person that may be kept as such under the law, to keep that property as a bailment property.
(e) In case any person pays any amount (to any person) by mistake, to refund the same.

12. Contingent contracts :

(1) In case a contract has been concluded to performing or not to perform any work if any event happens in the future, the contract shall not create any liability until such event happens.
(2) In case a contract has been concluded subject to the condition that it shall be deemed to have been concluded in case person performs any specified work in the future, no liability shall be deemed to have emerged from that contract if such person does anything in such a manner as not to perform that work or acts in such a manner that the work can not be performed.
(3) In case a contract has been concluded to perform or not to perform any work if any uncertain event does not happen in the future, liability under that contract shall emerge only after the happening of that event becomes impossible.
(4) In case a contract has been concluded with a provision to perform or not to perform any work if any event happens within a specified period in the future, the contract shall be deemed to have become invalid after the happening of that event becomes impossible within the specified period or after the expiring of that period.
(5) In case a contract has been concluded with a provision to perform or not to perform any work if any event does not happen within a specified period in the future, liability under such contract shall emerge if that event does not happen within that period or if it becomes certain that the event will not happen within that period.

Chapter : 3

Chapter : 3

Void and Voidable Contracts

13. Void Contracts : The following contracts shall be void:

(a) A Contract preventing anyone from engaging him/herself in any occupation, profession or trade which is not prohibited by prevailing law. Provided that a contract shall not be deemed to have been concluded in preventing profession or trade in the following circumstances:
(1) A contract preventing the seller from engaging him/herself in a profession or trade at the time and place as mentioned in the contract concluded between the buyer and the seller on selling and buying of the goodwill of any trade;
(2) A contract concluded among partners in preventing their engagement in any trade or business, other than those of the partnership firm, similar to those of the partnership firm or any other trade or business together with other competitors belonging to the same kind of trade or business as long as the partnership continues.
(3) A contract concluded among the partners in preventing them from engaging in a trade or business under the partnership firm for the specified time or place after being separated from the partnership;
(4) A contract preventing any individual from receiving the service of any such agency, company, firm, individual or competitor of such agency, company, firm, or individual for the specified period of time after the retirement from service or during the service of such agency, company, firm or
individual pursuant to contract concluded by any individual with any agency, company, firm or individual.
(b) A contract restraining marriages other than those prohibited by the prevailing law.
(c) A contract preventing any one from enjoying the facilities already being enjoyed by the general public.
(d) A contract seeking to prevent the legal rights of any person from being enforced by any government office or court.
(e) A contract concluded in matters , contrary to or prohibited by the prevailing law.
(f) A contract concluded for immoral purpose or against Public morality or public interest.
(g) A contract which cannot be performed because the parties thereto do not exactly know about the matter in relation to which it has been concluded.
(h) A contract which is considered impossible to fulfill even at the time is concluded.
(i) A contract which is vague as it does not provide reasonable meaning thereof.
(j) A contract concluded by an incompetent person to conclude such contract.
(k) A contract concluded with an unlawful consideration or objective.

14. Voidable Contracts :

(1) The following contracts may be made void by the aggrieved party:
(a) A contract concluded through coercion: Explanation A person shall be deemed to have indulged in coercion if he/she, with the objective of compelling any person, to accept any contract against his/her will, withholds or threatens to withhold property belonging to him/her, or threatens to defame him/her, or takes or threatens to take any other action in contravention of prevailing law.
(b) A contract concluded through of undue influence: Explanation
(1) Undue influence means influence exercised by a person upon another person who is under his/her influence and is amenable to his/her personal benefit
or interest.
(2) Without prejudice to the generality of Clause (1), the following persons shall be deemed to be under the influence of any person and amenable to his/her
wishes:
(i) A person living under his/her guardianship, protection or custody.
(ii) a persons who cannot take care of their interest temporarily or permanently by reason of old age, sickness or physical or mental weakness.
(iii) A person who can be subjected to under one’s economic or ranking influences.
(c) A contract concluded through fraud: Explanation A party to the contract or his/her agent shall be deemed to have committed fraud if he/she, leads the other party or his/her agent to believe or takes any action to believe the particular matter is true, although he/she knows that it is false, or suppresses any information in his/her possession, or indulges in any other fraudulent act punishable under prevailing law, with the intention of deceiving the opposite party or his/her agent.
(d) A contract concluded through deceit: Explanation
(1) Any of the following act shall be taken as deceit:
(i) Submission of false particulars on any matter without reasonable basis for doing so;
(ii) Misleading any party so as to aggrieve him/her;
(iii) Causing any wrong deliberately on the matter of contract;
(2) In a case of a voidable contract under this section, the following matters shall be dealt with as prescribed below:
(i) The party caused to enter into a contract may, instead of making the contract void, demand his/her position to be remained the same, as it was prior to conclusion of the contract.
(ii) Burden of proof of innocence of undue influence shall be rest in the party who claims that such contract is not concluded under an undue influence in case a contract is concluded with the person who is under one’s influence and amenable to his/her wishes

Chapter- 4

Chapter- 4 :

Contracts relating to Guarantee, Indemnity and Subrogation

15. Contracts relating to guarantee :

(1) A contract relating to guarantee shall be deemed to have been concluded in case it provides that if any person defaults in the repayment of the loan obtained by him or fulfillment of the obligation accepted by him/her, it shall be repaid or fulfilled by a third person.
(2) In case a third party has provided guarantee under Sub-section
(1) and in case the person who has to repay the loan does not repay it or fulfill the obligation to be fulfilled, the person guaranteeing such loan or obligation shall repay the loan or fulfill the condition according to the contract.
(3) Contract relating to guarantee must have been concluded in writing.

16. Surety’s liability : Except when otherwise provided for in the contract, the surety’s liability shall be as follows:
(a) Liability of the surety shall emerge from the very time when the person who has to meet the liability fails to meet it.
(b) Liability of a surely shall be similar to that of the person who has to repay the loan or fulfill any obligation. The surety shall remain responsible until the person becomes free from the liability of repaying the loan or fulfilling the obligation.
(c) The creditors may impose the surety with the liability immediately after the default by the person who is under obligation to repay the loan or fulfill the obligation.
(d) In case both security and guarantee have been provided in consideration of any loan or liability, the surety shall have no liability to the extent covered by the security so provided.
(e) The liability of a surety shall not terminate simply because the person who has to repay the loan or fulfill the liability becomes free from the liability through the mobilization of law. Explanation For the purpose of this Act, the term ‘creditor’ shall denote a person who has supplied the loan and this term also includes a person who may obtain any benefits from or have any work done by the person who has to repay the loan or fulfill the liability.

17. Circumstance in which surety will be free from liability :

(1) Except when otherwise provided for in the contract, the surety shall be free from liability to the extent as mentioned in any of the following circumstance:
(a) In case the person who has to repay a loan or fulfill a liability changes the terms and conditions of the contract in such a  way as to have a substantial impact on the contract without the approval of the surety, in respect to the transaction to be carried out after such changes.
(b) In case a contract is concluded to absolve from liability to the person who has to fulfill the concerning matter in respect to which the guarantee has been provided.
(c) In case the person who has to repay a loan or fulfill a liability is absolved from liability, or in case the loan is waived, due to the action of the creditors.
(d) In case the creditor agrees to absolve the debtor from the liability by collecting a sum less than what is due, or to provide additional time limit for repaying the loan, or not to initiate a lawsuit.
(e) In case any action of the creditors causing an adverse impact to the surety’s right to legal remedy against the person who is under obligation to repay the loan or fulfill the liability.
(f) In case the creditor loses, damages or returns any security obtained by him from the debtors, to the extent of the value of that security.
(g) To the extent to which the person who is under obligation to repay a loan or fulfill a liability has repaid the loan or fulfilled the liability according to the contract.
(2) Notwithstanding anything contained in Sub-section (1), the surety shall not be deemed to have been absolved from the liability, except when otherwise provided for in the contract, simply because the creditor fails to initiate legal action against the surety or try to realize the amount to be realized by him/her in time.
(3) In case there are two or more sureties, and in case the creditors absolves any one of them from the liability, the other surety/sureties shall not be free from his/her/their share in the liability. In case the share in the liability of the surety/sureties can not be separated, no surety shall be deemed to have been absolved from his liability simply because; the creditor has absolved him/her from the liability.
(4) In respect to a contract relating to guarantee which concerned with the fulfillment of a liability, the surety shall not be deemed to have been absolved from the obligation of fulfilling the liability under the contract simply because a dispute has arisen among the parties in relation to that contract, except when otherwise provided for in the contract.

18. Relationship between the Surety and the Debtors : Except when otherwise provided for in the contract, the relationship between the surety and the debtors in respect to the following matters shall be as follows:
(a) The surety shall cause a person who is under obligation to repay a loan or fulfill a liability according to the contract.
(b) In case the debtor has supplied any property or security to the surety in consideration of the guarantee provided by him/her while obtaining the loan or accepting a liability, the surety may not mortgage, sell, or otherwise transfer the title, thereto without the consent of the debtor.
(c) In case a guarantee has been provided in consideration of any loan obtained or liability accepted for any specific purpose, the objectives, nature or terms and conditions of that loan or liability may not be changed without the consent of the surety.

19. Surety to substitute creditor :

(1) After the surety repays the loan to be repaid by the debtor or fulfills the liability to be fulfilled by the debtors under the contract, the surety shall substitute the creditor in regard to that loan or liability, and may initiate legal action against the debtor like a creditor under this Act or prevailing law.
(2) Notwithstanding anything contained elsewhere in this chapter, the total amount and interest due on that amount, or any other fee or amount payable on that, shall be paid by the debtors to the surety in consideration of the loan repaid or liability fulfilled by the surety on his behalf according to the contract relating to guarantee.
(3) In case it becomes necessary to take legal action because of the failure the debtor to pay the amount payable by him/her under Sub- section (2), or in case it becomes necessary to incur any other expenses in consideration of the surety may have such expenses recovered from the debtor.

20. G uarantee related viable contract : The surety may cause to declare void the contract relating to guarantee in the following circumstances:
(a) In case the creditors him/herself, or any other person with his/her consent, has obtained the guarantee by supplying wrong or misleading information or notice to the surety in connection with the matter connected with the transaction in respect to which the guarantee has been provided;
(b) In case the subject matter, property (cash or kind) involved or facts relating to guarantee have been concealed or not mentioned:
(c) In case the contract has been concluded with a provision a third person as a surety, and the third person has not given his/her consent to provide the guarantee.

21. Equal liability of co-sureties :

(1) In case two or more person have jointly or separately provided joint guarantee for any loan or liability, and in case the debtor fails to repay the loan or meet the liability, the co-sureties shall repay the loan or meet the liability or the requirements of the contract on an equal basis, except when otherwise provided for in the contract.
(2) In case the guarantee has been provided on a sector wise basis while providing joint guarantee under Sub-section (1), a surety shall be required to meet only the liability for that sector for which he/she has provided the guarantee.

22. Contract relating to indemnity :

(1) In case person has entered into a contract relating to indemnity with a provision to pay any party to a contract or a third person for any loss or damage that may result from his/her actions while working under the direction of that party to that contract, he/she may realize as compensation all or any of the following amounts, subject to that contract:
(a) The indemnity amount mentioned in the contract;
(b) In case any loss or damage has been caused to a third person, the amount to be paid or borne in consideration thereof;
(c) The amount spent on the case filed or defended by him/her in connection with the contract relating to indemnity;
(d) The amount spend on the legal action, if it becomes necessary to initiate such action for failure to pay the amounts mentioned in Clause (a) to (c).
(2) Notwithstanding anything contained in Sub-section (1), in case any person, while working under the direction of the other party, works negligently or with the intention of causing any loss or damage to that party or a third person, and in case the concerned party or the third person suffers a loss damage as a result thereof, he/she shall him/herself be responsible for such loss or damage.

23. Provision concerning subrogation :

(1) In case any person has concluded a contract with any other person against any loss or damage that could be caused by a third person to his/her property, facilities, rights or profits that could result from his/her business, the other person who has signed the contract shall him/herself bear any such loss or damage
irrespective of who is responsible. Provided that, in case the contract has been signed with a provision to have any such loss or damage borne by any other person, such loss or damage shall be realized from that person. (2) In case the amount or compensation to be paid for any loss or damage under Sub-section (1) has been mentioned in the contract, it shall be done accordingly and in case no such provision has been made in the contract, an appropriate amount or compensation shall be paid, or arrangements be made for payments, to the person affected by the loss or damage, or to his/her heir in case he/she is dead. (3) In case there has been any loss or damage as mentioned in Sub-section (1), the person paying the amount or compensation under Sub- section (2) shall be deemed to have subrogated the person who has sustained the loss or damage, and, accordingly, the subrogator may have the amount or compensation in consideration of such loss or damage recovered from the person causing such loss or damage.

24. Rights of subrogator : The rights and liabilities of a subrogator shall be as mentioned in the contract, if any, and if not, it shall be as follows:
(a) All the rights of the person who has sustained the loss or damage shall devolve on the subrogation.
(b) The subrogator mentioned in Clause (a) may realize from the person who has caused the loss or damage, or from the party to a contract concluded in that connection, if any, the amount or reasonable compensation paid by him/her to the person who has suffered the loss or damage, as well as the expenses incurred in
contesting a case, if any

Chapter- 5

Chapter- 5:

Contracts Relating to Bailment

25. Contract relating to Bailment: A contract relating to bailment shall be deemed to have been concluded in case any person delivers any property to another person on a returnable basis or for handing it over to any other person or selling it as ordered by him/her. Provided that, a deed must be execute while bailing any property wort more then Rs.5,000.00 Explanation: For the purpose of this chapter, the term ‘property’ includes any movable property and title to such property.

26. Process of bailment to be deemed completed :

(1) The process of bailment shall be deemed to have been completed after the bailee receives the bailment property for being kept as such.
(2) In case any property is already being kept by any person or a person authorized by him/her under his/her custody or control, the concerned property shall be deemed to have been taken by him/her as a bailed property.

27. Particulars of bailed property to be mentioned:

(1) In case the bailee knows that the bailed property must not be used due to any defect in it, or because it could cause any loss or damage or because separate
arrangements or provisions be made for its protection, he/she shall inform the bailee about all such matters to the best of his/her knowledge.
(2) In case any information to be supplied under Sub-section (1) is not supplied even while knowing about it, the bailer must bear the loss or damage caused by that property or because of that property to the bailee.
(3) Notwithstanding anything contained in Sub-section (1), in case : any property given on rent or as collateral or for sale causes any loss or damage while using it due to its defect, the bailer must bear such loss or damage even if he/she has no knowledge about the defect in the property.

28. Bailee’s liability :

(1) A bailee shall look after and arrange for the safety of the property received by him/her as bailed property as mentioned in the terms and conditions of the contract, or as his/her own property in case nothing has been mentioned in the contract.
(2) Except when otherwise provided for in the contract, in case any bailed property depreciates or is lost, stolen, damaged, destroyed, decreased or harmed because of a natural calamities despite taking care and arranging for its security under Sub-section (1), the bailee need not return such property. Provided that, in case the property is depreciated or is lost, stolen, damaged, destroyed decreased or harmed because of the negligence or malfide intention of the bailee, or of his/her failure to take care or ensure its safety according to the terms and conditions of the contract, he/she must return the property or pay an equivalent amount to the bailer.
(3) In case the bailee uses the bailed property without having the right to do so under the contract or in a manner contrary to the terms and conditions of the contract, and in case such use causes any loss, damage, destruction, depreciation or harm to the property, the bailee shall pay for compensation to the bailer.
(4) Except when otherwise provided for in the contract, the bailee shall not mix-up the bailer’s property with his/her own property. Provided that, in case the bailee has mixed-up his/her own property with that of the bailer, both parties shall have title on that property, as well as to the income accruing there from, in proportion to their respective shares.
(5) In case the bailee has mixed-up his/her own property with the bailer’s property and the property so mixed-up can be separated, the two parties shall have title to their respective property so separated, and the expenses incurred for separating the property so mixed and the loss, if any caused, to the bailer while mixing-up such property in that manner shall be borne by the bailee.
(6) In case the bailee has mixed-up his/her own property with the bailer’s property without the consent of the bailer and their property cannot be separated as mentioned in Sub-section (5), the title of the bailer to the bailee’s property shall terminate if he/she agrees to obtain his/her share from the property so mixed-up. In case the bailer does not agree to take his/her share from such property the bailee shall be required to pay compensation for his/her property.

29. Bailed property to be returned:

(1) After the expiry of the , period prescribed while bailing a property or fulfillment of the objectives with which the property has been bailed, the bailee shall return the bailed property to the bailer.
(2) In case the property is not returned under Sub-section (1) within the prescribed period, or within a reasonable period according to the nature of the property where no such period has been prescribed, or in case the bailer does not take it back and the property is lost, stolen, damaged, destroyed or reduced after that date or bailer suffers any loss or damage due to that property after that date the party because of which the loss or damage has resulted shall bear the loss or damage.
(3) Except when otherwise . provided for in the contract, in the case of a bailed property owned by several persons, it may be handed over to any one of such owners or to the person ordered by them, and the hand over of the property in that manner shall be deemed to have been done duly.
(4) Except when otherwise provided for in the contract, the property raised or earned through the bailed property shall also belong to the bailer.

30. Person bailing other’s property to be held responsible : In case any person bails any property on which he/she has no title, right or ownership to any other person to keep as a bailed property, and the bailee has to bear any claim of a third party or any loss, damage or any expenses in for accepting that bailment the bailer shall be required to bear such expenses as well.

31. Found property may be kept after notifying the police : In case person finds any property in any way, he/she may keep it safely with him/herself until the concerned owner is found out after notifying the police. The expenses incurred for finding out the owner of the property and for keeping the property shall be borne by the concerned owner, and the person who has found the property may keep it with him/herself until the owner pays such expenses.

32. Property given for repair and maintenance to be returned :

(1)In case person has given any property for repair, improvement or renovation in any way to any person, the latter shall return it to the former after
collecting expense or service charge fixed for repair, improvement or renovation.
(2) The property handed over under Sub-section (1) sha1I be returned to the concerned owner after repairing, improving or renovating it within the period mentioned in the contract. In case it is not returned within the prescribed period, or any additional loss or damage is caused to the property or the property is damaged in such a way as to become unusable in the course of repair, improvement or renovation, action shall be taken as provided for in the contract, and if no provision has been made in the connection in that contract, an appropriate compensation shall be paid to the concerned owner.
(3) Notwithstanding anything contained elsewhere in this Section, the person repairing, improving or renovating any property may keep it with him/herself until the cost of repair, improvement or renovation or the service charge fixed for that purpose is paid. In case the cost or service charge is not paid within a reasonable period, the person repairing, improving or renovating the property may recover his/her expenses or service charge by selling the property,

33. Bailment Expenses : While bailing a property, expenses incurred for looking after and ensuring the safety of the bailed property shall be borne by the bailer, except when otherwise provided for in the contract.

34. Contract relating to bailment to be void:

(1) In case it is proved that any property has been bailed with the intension of avoiding a partition of property or payment of any government charge or any amount involved in any claim or to be paid to anybody, or with any other illegal motives, the contract relating to such bailment shall be void. In case the bailee does not keep the bailed property according to the term and conditions of the contract, the bailer may get back the bailed property at any time.

Chapter -6

Chapter -6

Contracts relating to Collateral and Deposit

35. Contracts relating to collateral or deposit :

(1) In case any person has obtained a collateral while supplying credit to anybody as a security for that credit, or obtained any property as a deposit in the form of a guarantee to perform the concerned work while having any work performed a contract relating to collateral or deposit shall be deemed to have been concluded. Explanation: For the purpose of this Chapter, the term ‘property’ shall denote any movable or immovable property , and title or document establishing title to that property.
(2) In case a collateral has been obtained while supplying a credit, the credit and interest thereon, and incase any deposit has been obtained to perform any work the other expenses relating to that work, as well as the expenses incurred for looking after the collateral or deposit, shall also be deemed to have been included in the contract relating to collateral or deposit.

36. Collateral or deposit to be returned:

(1) Except when otherwise provided for in the contract, the collateral obtained for a credit shall be returned after the repayment of the credit, or the deposit obtained for a work shall be refunded to the concerned person after the completion of that work.
(2) In case the collateral or deposit kept under Sub-section (1) has been or can be divided into different parts, the collateral or deposit may be returned to the extent covered by the portion of the credit repaid or work performed.

37. Rights of person obtaining collateral or deposit :

(1) In case a credit has been obtained by pledging any property as collateral and the debtor fails to repay the credit or interest thereon, if any, within the prescribed period, the person who has taken the collateral may initiate action according to , law and realize the amount to be realized in consideration of that credit by selling or auctioning the collateral according to current market price or transfer the title to such collateral subject to law in case it can not be sold or auctioned.
(2) In case the property kept as collateral is sold at a price lesser than the amount to be realized from the debtor by the person who has the collateral under Sub-section (1), the shortfall may be recovered form other assets of the debtors. In case the collateral is sold at a price higher than the amount to be recovered, the excess amount shall be refunded to the debtors.
(3) Notwithstanding anything containing in Sub-section (1) and
(2), in case the property kept as collateral has not yet been sold or the title to it has not yet been transferred, the person who has pledged the property as collateral may clear his property by repaying the credit and interest thereon and any other amount payable at any time. Provided that, the person pledging the property as collateral shall also bear the additional liability emerging on the property kept as collateral owing to his failure to repay the amount within the stipulated period.
(4) In case anyone has been entrusted with the responsibility of performing any work by obtaining any property as deposit, and the concerned person fails to complete the concerned work or the concerned work fails to be completed within the stipulated period, the property kept as deposit may be used to complete the work or to recover the expenses incurred thereupon. In case the work can not be completed with the property kept as deposit, the amount in shortfall may be recovered from the other assets of the person who has furnished the deposit.

38. Consequences of pledging property without sufficient title as collateral or ‘deposit :

(1) In case anyone has obtained a credit or work by pledging as collateral or depositing any property to which he/she has no title or ownership or any property received under a contract which is void under this Act, and the person obtaining such collateral or deposit has no knowledge about the matter, the latter may demand the property from the ….. to which the he/she has a title so as to be kept as collateral or deposit. In case the former fails to provide such collateral, the latter may cause the contract to be void.
(2) In case any property received under a void contract has been pledged as collateral or deposit, and such contract had become void before furnishing such collateral or deposit or the party receiving the collateral or deposit know that the concerned property did not belong to the person furnishing it as collateral or deposit, the person obtaining such property as collateral or deposit shall have no right to it and may realize the amount to be realized by him/her or have the work to be performed from the other property of the party furnishing the collateral or deposit.
(3) In case the person furnishing the collateral or deposit has a partial or limited title to or ownership of the property pledged as collateral or deposit, the person accepting such property as collateral or deposit shall also have title to that property to the same extent.

39. Creditors to have equal status :

(1) In case anyone has obtained credit from several creditors in one or several installments by pledging his/her property as collateral, and the property so pledged as collateral is not sufficient to repay the credit of all the creditors, all the creditors who have used the property as collateral shall be deemed to have equal status in
respect to outstanding credit and all of them may make a proportionate claim on the property, except when otherwise provided for in the contract.
(2) In case any property which has already been pledged as collateral under Sub-section (1) is again pledged as such with a provision to give priority to the second creditors in the future, the concerned contract shall be void. In case the (second) creditor has already realized his/her credit from the collateral before the contract becomes void even while knowing that there are other creditors in respect to the collateral, he/she shall refund the amount to the other creditors and realize his/her credit from the other assets of the person who has pledged the property as collateral.

Chapter- 7

Chapter- 7

Contract relating to Sale of Goods

4o. Contract relating to sale of goods :

(1) A contract relating to sale of goods shall be deemed to have been concluded . in case any seller agrees to hand over any goods to the buyer immediately or in the future by receiving a price. Explanation  For the purpose of this chapter, the term ‘goods’ means any type of movable or immovable property except current used currency, security, or actionable claim .
(2) A contract relating to sale of goods may be conditional or unconditional.
(3) A contract may be concluded with a provision to sell goods owned or possessed by the seller or those to be produced or acquired by him/her in the future.

41. Contract relating to sale of goods to be void : In case a contract has been concluded to sell specific goods, and in case the goods have suffered any loss or damage at the time of or before concluding the contract and the seller had no knowledge thereon at the time of concluding the contract, the contract shall be void.
Explanation For the purpose of this Section, ‘Specific goods’ means the specific goods mentioned at the time of concluding the contract.

42. Determination of price of goods :

(1) Except when otherwise provided for in the contract, the price of goods shall be determined on the basis of the terms and conditions of the contract or according to the procedure agreed upon in the contract or in the process of transaction between the parties.
(2) In case the price of goods has been determined according to their weight and measurement, the price of goods shall be fixed on the basis of the net weight and measurement, except when otherwise provided for in the contract.
(3) In case the price of goods can not be determined under Sub- section (1) or (2), the buyer shall pay to the seller a reasonable price taking into account the concerned circumstances.

43. Price of goods to be paid : Except when otherwise provided for in the contract, the price of goods must be fully paid as follows in the following circumstances:
(a) A buyer shall pay to the seller the price of goods bought by him/her at the time of buying them.
(b) The price of goods shall be paid in cash.
(c) The contract shall be deemed to have been concluded with a provision to pay the price and. hand over the goods simultaneously. Explanation For the purpose of this Section, the term ‘cash’ includes cheques, traveler’s cheques, promissory notes, bills of exchange, letter of credit, bank draft, credit card and telegraphic transfers payable through bank.

44. Particulars of goods :

(1) In case the name, brand, trademark or specification of goods to be sold are mentioned in the contract, the contract shall be deemed to have been concluded to sell goods of the same name, brand, trade mark or specification.
(2) In case the name, brand, trademark or specification and sample goods to be sold have been mentioned, the bulk of those goods shall correspond not only to the sample but also to their name, brand, trademark or specification as mentioned in the contract.

45. Title to be deemed to the goods to be sold :

(1)Except when otherwise provided for in the contract, the seller shall be deemed to have or going to have title to the goods agreed to sell in the future. Goods agreed to sell in the future shall be considered to be or going to be free from anybody’s seizure, control or procession .
(2) Except when otherwise provided for in the contract, the seller shall be deemed to have the right to sell the goods sold or to be sold by him/her.

46. Goods to be deemed to be of merchantable quality :

(1) Except when otherwise provided for in the contract, goods sold or to be sold shall be deemed to be of merchantable quality.
(2) In case specific goods sold or to be sold for any specific purpose are suitable for that purpose, they shall be considered to be of merchantable quality. Provided that in case any defect in the goods has been mentioned in the contract itself, or in case the buyer had become aware of any defect before signing the contract or while inspecting the goods, those goods shall not be deemed to be of merchantable quality.
(3) In case the quality of specific goods has been mentioned in  contract, those goods shall be deemed to be of the same quality. In case the quality of the goods is not mentioned in the contract, their quality shall be as of the current standard.
(4) Except when otherwise provided for in the contract, the seller shall not be deemed to have given a warranty to the effect that the goods sold or to be sold are of a specific quality.

47. Sale through samples:

(1) In case provisions have been made in a contract to sell goods after inspecting their samples directly or otherwise, it shall be deemed to have been signed to sell goods after inspecting their samples.
(2) In case a contract has been signed to sell goods after inspecting their sample, it shall be deemed to include the following conditions, except when otherwise provided for in the contract:
(a) The bulk of the goods shall correspond to the samples in quality.
(b) The buyer shall have, a reasonable opportunity to compare the quality of the bulk of the goods with the sample.
(c) The goods sold or to be sold shall be free from any defect, and that their merchantable quality shall be apparent while inspecting them at the time of comparing them with the sample.

48. Provisions concerning transfer of ownership of goods :

(1)In case a contract has been signed to sell specific or particular goods, their delivery shall be made as provided for in the contract, if any, and if not, according to
the conditions of the contract, the conduct of the parties, and the intention of the parties expressed through the concerned circumstances.
(2) Except when otherwise provided for in the contract, in case a contract has been signed in such a situation that specific goods can be delivered immediately, the parties shall be deemed to have the intention of delivering them after concluding the contract or paying their price.
(3) In case a contract has been signed in such a situation that specific goods can be delivered immediately, and in case the buyer has to weigh, measure and examine them or execute any function to determine their price, such goods shall not be delivered until such functions are executed and information thereof is supplied to the seller within a reasonable period.
(4) Except when otherwise provided for in the contract, a contract shall be deemed to have been made with a provisions to deliver the goods at the very place where they have been sold or are to be sold.
(5) Except when otherwise provided for in the contract, the title or ownership of the buyer shall be deemed to have been established on the goods from the very moment when they are delivered to him/her.

49. Risk to be borne :

(1) Except when otherwise provided for in the contract, the seller him/herself shall bear the risk of any loss or damage to the concerned goods until they are delivered to the buyer.
(2) In case there has been a delay in the delivery of goods due to any reason concerning the buyer or the seller, the party responsible for such delay shall bear the risk of loss or damage under Sub-section (1).
(3) In case the seller has agreed to deliver goods from the place of purchase to the place specified by the buyer, the seller him/herself shall bear the risk of any loss or damage to goods, except when otherwise provided for in the contract.

50. Buyer’s right to inspect goods : In case sold goods are delivered to the buyer; the buyer shall have a reasonable opportunity to examine and ascertain whether or not they, conform to the contract and he/she shall not be deemed to have accepted the goods until this is done.

51. Goods to be deemed delivered: The buyer shall be deemed to have received the goods in any of the following’ circumstances:
(a) In case the buyer or his/her representative receives the goods;
(b) In case a receipt or letter acknowledging the delivery of the goods is issued;
(c) In case the buyer inspects the goods and ascertains that they conform to the contract under Section 50, and accordingly keeps them in his/her stock;
(d) In case the goods reach the buyer and are retained by him/her, even if he does not send information about his/her refusal to accept them within a reasonable time limit,
(e) In case he/she does anything to prove his/her ownership of such goods.

52. Time-limit for delivering goods :

(1) In case the contract provides that gods to be delivered at any specified time or within any specified period, the seller must deliver the same to buyer at that very time or within that very period.
(2) Notwithstanding anything contained in Sub-section (1), in case the buyer accepts goods delivered by the seller before the time or period prescribed in the contract, or after the time of period prescribed in the contract, the seller shall be deemed to have delivered the goods.

53. Documents relating to sold goods to be handed over: Except when otherwise provided for in the contract, the ownership of goods shall not be deemed to have been transformed after sale until basic documents connected with their ownership or required for their use are handed over.

54. In the event of delivery of goods in a quality different from the
contracted quality:

(1) In case the seller delivers goods to the buyer in a quantity less than the quantity mentioned in the contract, the buyer may refuse to accept them. Provided that, in case the buyer accepts goods even in the quantity, he/she shall be required to pay the price of the quantity at the rate mentioned in the contract.
(2) In case the seller delivers goods to the buyer in a quantity higher than the quantity mentioned in the contract, the buyer might accept them only in the quantity mentioned in the contract, and reject the rest or the entire quantity. Provided that, in case the buyer accepts the entire quantity of goods so delivered, he/she shall be required to pay for them at the contract rate.
(3) In case the seller delivers to the buyer, he has contracted to sell mixed with goods of a description not included in the contract, the buyer may accept the goods mentioned in the contract and reject the rest, or reject the entire lot.
(4) Except when otherwise provided for in the contract, the buyer shall not be bound to accept delivery of goods in installments.
(5) Excepts when otherwise provided for in the contract, in case the buyer refuses to accept goods brought by the seller for delivery, the buyer shall not be bound to return them to the seller. Provided that the buyer shall inform the seller through the quickest possible means about his/her refusal along with the reasons thereof.

55. Special provisions concerning compensation : Notwithstanding anything contained elsewhere in this Act, action in respect to compensation for contract under this chapter shall be taken as follows:
(1) In case a buyer does not accept or refuses to accept or refuses to pay the price of goods after once signing a contract relating to sale of goods, the seller may, subject to the contract, claim compensation from the buyer in consideration of the buyer’s failure to accept or refusal to accept the goods.
(2) While determining compensation under Clause (a), in case goods not accepted or rejected by the buyer are available in the market, compensation shall be determined on the basis of the difference between the price of goods mentioned in the contract and the market or current price.
(3) In case the seller does not deliver or refuses to deliver goods according to the contract after signing a contract relating to sale of goods, the buyer may claim compensation from the seller in consideration of his/her failure to deliver the goods. While determining Compensation under Clause (c), in case the goods which the seller has refused or failed to deliver to the buyer are available in the market, compensation shall be determined on the basis of difference between the price of the goods mentioned in the contract and the market or current price

Chapter- 8

Chapter- 8

Contracts Relating to Agency

56. Contracts relating to Agency : Any person may appoint any other person as his/her agent to do anything on his/her behalf, except something connected with his/her personal skills or to conduct business as his/her agent of may transaction with a third person on his behalf or to represent himself to such person, or to establish any kind of legal relation with the person appointing an agent and a third person, and in case an agent is so appointed, a contract relating to agency shall be deemed to have been concluded.

57. Recognition of transaction made or carried out by an agent:

(1) The liability resulting from the contract concluded through an agent appointed under Section 57 or from the action taken or work performed by the agent, shall be recognized as resulting from a contract signed or work performed by the principal person, and implemented accordingly. Provided that, the principal person shall not be responsible for any action taken by the agent beyond his/her authority.
(2) Notwithstanding anything contained in Sub-section (2), among the actions taken beyond the authority, in case some of them are within his/her authority and some beyond it, and in case the action taken from within his authority can be separated principal person shall be responsible for actions taken to the extent of his/her authority.
(3) Any information supplied to the agent in the course of transactions with the principal person through his/her agent shall be deemed to have been supplied to the principal person.

58. Power to appoint Sub-agents :

(1) In case it is necessary to appoint, a sub-agent according to the nature of any trade, business or transaction, or in case a sub-agent can be appointed according to provision contained or practice followed in the contract relating to agency, the agent may, except when otherwise provided for in the contract, appoint a sub-agent with the consent of the principal person. Provided that, an agent who has been appointed on the condition that he/she will personally represent or personally execute any work may be able to appoint a sub-agent.
(2) In case a sub-agent is appointed under Sub-section (1), the principal person shall be informed accordingly, and a sub-agent so appointed in that manner shall have right and duty equal to that of the agent appointed by the principal person.
(3) In case any agent appoints a sub-agent without the consent of the principal person, the latter shall not be responsible for any action taken or work performed by the sub-agent. A sub-agent so appointed shall be personally responsible.

59. Matters to be complied with by agent:

(1) Except when otherwise provided for in the contract, an agent shall comply with the following matters:
(a) Work subject to the conditions of the contract relating to agency and the directives issued by the principal person.
(b) In case no condition has been mentioned in the contract or the principal person has issued no directive, the agent shall work as entrusted to him/her in the manner in which it has to be performed according to the nature of the trade and business and the laws and practices of the place of transaction, with bona fide motive, full dedication and necessary skills and efficiency. Provided that in case the principal person has a knowledge in advance that the agent has a knowledge in advance that the agent has no skill or capability in respect to any subject, the agent shall not be responsible for any loss or damage resulting from such lack of skill or capability.
(c) An agent who has been removed from his/her position shall not do anything on the same subject, as before, in the capacity of an agent.
(d) The agent shall supply or show details of account and record relating to the agency business when deanded by the principal person.
(e) In case any obstruction, obstacle or difficulty arises in the course of performing work relating to agency, the agent shall notify the principal person as soon as possible and obtain necessary directives, and the principal person shall him/herself be responsible for any action taken according to the directives so issue.
(2) In case the principal person suffers any loss or damage because of the failure of the agent to fulfill his/her duties under Clause (a), (b) and (c), agent shall personally bear loss or damage so incurred.

60. Agent to be responsible:

(1) Except when otherwise provided for in the contract, the agent shall be personally responsible for transactions made by him/her on behalf of the principal person in the following circumstances:
(a) In case he/she concludes a contract with a third party in relation to any transaction with provision for personal responsibility.
(b) In case any work has been done for or on behalf of an unidentified principal person, in case the principal person is not identified;
(c) In case the principal person can not be sued for any reason;
(d) In case the contract has been signed in his/her own name;
(e) In case anything has been done in contravention of the contract relating to the appointment of agent or beyond his/her authority;
(f) In case any fraud or cheating has been committed in the course of the transaction
(g) In case the agent has to bear personal liability according to the nature of the trade;
(h) In case the interest of the agent is also involved in the transaction.
(2) Except when otherwise provided for in the contract concluded between the agent and a third person, only the fact that the gent is personally responsible under Sub-section (1) shall not be deemed to have prejudices the right of the third person to make any claim against the principal person and legal action may be initiated against the principal person as well for arrears due from the agent.
(3) For the purpose of initiating legal action against the principal person under Sub-section (2), the time limit shall be deemed to have begun from the date of the last payment made by the agent.

61. Termination of agency :

(1) Except when otherwise provided for in the contract, the agency shall be deemed to have epso facto terminated in the following circumstances;
(a) In case the agent voluntarily decides not to continue it;
(b) In case the principal person conceals the authority granted or contract signed with the agent or gives a notice to the agent regarding the impossibility of complying with the contract;
(c) In case the agent has been appointed for any specific work that works is completed;
(d) In case the agent has been appointed for a specific period, after the expiry of that period;
(e) In case the principal person or the agent loses his/her senses;
(f) In case the principal person is declared bankrupt;
(g) In case the subject regarding, which the agent has been appointed no longer exists;
(h) In case an agent is appointed by a company or an agent of a company, if the company is liquidated.
(2) All or any of the power granted by the principal person to the agent may be cancelled at any time before the agent exercises them. Provided that, in case the agent has already exercised some of such powers, the work performed regarding to those powers shall not be deemed to have been cancelled.
(3) Notwithstanding anything contained elsewhere in this Section, in case the agent has a share in the property connected with the main subject of the agency, the agent may not be dismissed, in such a manner as to have a negative impact on such share.

62. Prohibition to remove an agent :

(1) Except when otherwise provided for the contract, in case an agent has been appointed for any specific period or work, the principal person shall not remove him/her before that period or before the completion of that work without appropriate and sufficient reasons.
(2) An agent who has been appointed without prescribing any specific period or work can not be removed without a prior notice mentioning appropriate reasons;
(3) In case the principal person removes any agent in a manner opposed to Sub-sections (1) or (2), the principal person shall pay a reasonable compensation to the agent.

63. Agent prohibited from giving up agency :

(1) Except when otherwise provided for in the contract, the agent who has been appointed for a specific period or work shall not stop working as an agent before the expiry of the specific period or completion of the specified work without appropriate and sufficient reasons.
(2) An agent who has been appointed without specifying the period or work under Sub-section (1) shall not give up that work without informing the principal person in advance along with the reasons for doing so.
(3) In case any agent stops working in that capacity contrary to Sub-section (1) or (2), the principal person may claim a reasonable compensation.

64. Sub-agent also to leave if agent leaves: In case an agent no longer remains in that capacity under this act, the sub-agent appointed by him/her shall also be deemed to have automatically left

Chapter- 9

Chapter- 9

Contracts Relating to Transportation of Goods

65. Contracts relating to Transportation :

(1) A contract relating to transportation shall be deemed to have been concluded if it provides for the transportation of goods from one place to another.
(2) Except when otherwise provided for in the contract, the receipt to be issued by the transporter to the owner of goods for their transportation at the time of handling them over for the purpose of transportation shall be recognized as proof of contract between them. Explanation: For the purpose of this Chapter, the term ‘transporter’ means a person operating a transport service other than air or marine transport, or a person operating a business of such operation, and the term also includes a person operating the transport business through animal or any other means. Provided that, in case any person employed by the owner of goods on wage basis or his/her agent or a person working under him/her transports goods, he/she shall not be recognized as a transporter for the purpose of this chapter.

66. Transporter’s obligations :

(1) It shall be the obligation of the transporter to transport and condition goods received from their owners for transportation at the prescribed place and in their proper condition.
(2) In case goods received from the owner for transportation are lost, destroyed, broken, harmed or damaged, or in case they do not reach their destination in proper condition for any other reason, the transporter shall be held responsible.
(3) The transporter shall transport goods within the period mentioned in the contract, and within a reasonable period in case no period for transporting the same has been mentioned in the contract, and hand them over to their owner or his/her agent or a person designated by him/her.

67. First transporter to be held responsible in case goods are transported through several means of transport: In case it becomes necessary to transport goods through more than one transporter or though more than one means of transport, the transporter to whom the owner of goods has handed them over shall be held personally responsible for the purpose of this chapter, except when otherwise provided for in the contract.

68. Liability of transporter to be limited :

(1) Except when the owner of goods or his/her agent has clearly declared at the time of concluding the contract that the goods to be transported are worth more than Ten Thousand Rupees or except when otherwise provided for in the contract, the amount of compensation to be paid by a transporter for any loss or damage to goods transported by him/her shall not exceed Ten Thousand Rupees.
(2) Notwithstanding anything contained in Sub-section (1), the transporter shall not be held liable for any loss or damage to gold, sliver, diamond jewels or goods made thereof, precious stone, negotiable instruments, securities, documents registered by offices, certificates issued by educational and other institutes, coins, bank notes, postal stamps, fish, meat, fresh fruits and vegetables, insecticide, inflammable materials, petroleum products, precious art pieces, idols, curio goods or fragile goods, wildlife and pets, handicrafts, arms and ammunition, explosives, radio, television, computer and similar other goods and their spare parts, machinery and goods specified in prevailing law as those which have to be declared by the owner before their transportation, except when the owner or his agent has clearly declared them at the time of signing the contract or at the time of handing them over to signing the contract or at the time of handing them over to the transportation for the transporter.
(3) For the purpose of bearing the risk involved in the transportation of goods mentioned in Sub-section (2), the transporter might have them insured against the risk through their owner or his/her agent or by him/herself by collecting a separate fee for the purpose, or take other necessary arrangement to avoid the risk.

69. Transporters to be responsible : A transporter shall pay a reasonable compensation to the concerned owner for any loss or damage in the process of transportation of goods declared at the time of signing the contract of handling them over to the transporter for transportation under this Chapter, or for goods which need not be declared, as provided for in the contract, if any, and, if not, reimbursement of the transported goods with the agreement of their owner, or in case no such agreement is reached or can be reached, according to the current price of the goods, and if the current price can not be determined, according to a reasonable price, subject to Chapter 12.

70. Transporter’s liability to be ended: Except when otherwise provided for in the contract, the liability of a transporter shall be deemed to have ended in any of the following circumstances:
(a) In case the transporter or his agent transports the goods and hands them over to the owner or his/her agent, or a person designated by him;
(b) In case the goods handed over to the transporter are received back by the owner or his/her agent.
(c) In case the transporter or his agent returns the goods to the owner or his/her agents citing the reason why the goods can not be transported within the prescribed period in the circumstances mentioned in Clause (b) of Sub-section (2) of Section 79.

Chapter- 10

Chapter- 10

Time, Procedure and Place for Performing Contracts

71. Times and Procedure of performing contract :

(1) In case the time and procedure of performing the contract has been mentioned in the contract, it shall be performed within the specified time and according to the specified procedure.
(2) In case no time or procedure of performing the work mentioned in the contract has been specified, whereas, in case the work can be performed only at any specific time or according to any specific procedure, the contract shall be deemed to have been concluded so as to perform the work at that time and according to that procedure.
(3) Except in the circumstances mentioned in Sub-section (2), in case the time and procedure of performing the contract has not been mentioned in the contract, the contract shall be performed within a reasonable time by adapting a reasonable procedure.

72. Place for performing contract:

(1) In case any specific place has been specified in the contract for performing the work, the work shall be performed at the same place.
(2) In case any party has to hand over or deliver goods to the other party under the contract, and the place where those goods are to be handed over or delivered has not been specified in the contract, the contract shall be deemed to have been concluded with a provision to and over or deliver the goods at the place where those goods are stored.
(3) In case the specific place where the work mentioned in the contract has to be performed, has not been specified in the contract, and where as that work can be performed only in a specific place, or in case the work needs to be performed in any specific place due to the general practice and custom or the nature of the work, the contract shall be deemed to have been concluded with a provision to perform at work at place.
(4) In circumstances other than those mentioned in Sub-sections (2) and (3), in case the place for performing the work prescribed in the contract is not mentioned in the contract, the party performing the work according to the contract shall inform the other party to specify a reasonable place for performing the work, and the other party shall specify a reasonable place to perform the work.

73. Circumstances in which contracts need not be performed: Work under a contract need not be performed in any of the following circumstances:
(a) In case one party to the contract absolves the other party from fulfilling the obligations according to the contract;
(b) In case a voidable contract is made void by the party concerned;
(c) In case one can not execute the contract due to its violation by the other party;
(c) In case it becomes unnecessary to perform the work mentioned in the contract under any provision of this Act;
(d) In case it becomes unnecessary to comply with the contract under Section 79

Chapter- 11

Chapter- 11

Execution of Contract and Obligation Arising out of the Contract

74. Obligation under contract to be fulfilled : Each party to a contract shall fulfill his/her obligation under the contract.

75. Reciprocal compliance with contract :

(1) In case a contract has been concluded with a provision requiring both parties to simultaneously fulfill their respective obligations, and in case one party fundamentally shows a conduct or intention of not fulfilling his/her obligation the other party shall not be required to fulfill his/her promise.
(2) In case the order of priority relating to fulfillment of any promise has been specified in the contract itself, it shall be fulfilled accordingly, and in case no such order of priority has been specified, the party who is required to do so first according to the nature of the contract shall fulfill it.
(3) In case one promise can not be fulfilled without fulfilling another promise under any contract containing reciprocal promises, the party, which can not execute the contract because of the failure of the other party to fulfill its promise, may recover the loss or damage caused by the failure of the other party to execute the contract.
(4) In case a contract of the type mentioned in Sub-section (1) has been concluded, and any party obstructs the other party from executing the contract, the party which becomes unable to execute the contract may the contract cancel and also recover any loss or damage suffered by him/her from the cancellation of the contract in that manner.

76. Devolution of rights and liabilities of contract : In case party to a contract dies or loses his/her senses, the rights accruing from the contract shall devolve on the heir to his/her property, and the heir shall also bear liability to the extent covered by the property received by him/her. Provided that, the rights and liabilities accruing on the basis of personal skills and qualification shall not devolve on such heir.

77. Person to execute contract:

(1) Except when the person concluding contract is under the obligation to execute the contract, he/she may have it executed by his agent or a person appointed by him/her or any other person on his/her behalf. Provided that, no party to a contract may transfer the obligations under the contract to any other person without the consent of the other party.
(2) Except when otherwise provided for in the contract, once a party accepts a work done by a third person, he/her may not later claim that the work has to be done by the party signing the contract.
(3) In case two or more person have jointly signed a contract with any other party, any of the persons jointly signing the contract shall fulfill or cause to do so for the fulfillment of the obligation under the contract, except when otherwise provided for in the contract.
(4) In case any person has fulfilled his/her obligation under Sub- section (3), the person so fulfilling the obligations may recover compensation or loss on a proportionate basis from the other persons jointly signing the contract.
(5) In a contract signed in the manner mentioned in Sub-section (3), in case any party gives concession to any person belonging to the other party from the obligations of his/her share, the other person shall not be free from the remaining obligation of the contract.

78. Only the party shall have right to execute the contract :

(1) Only a person who is a party to a contract may demand the execution of that contract from other party. Provided that, in case the contract has been signed for the benefit of any person, such person may demand the execution of that contract even if he/she is not a party to that contract.
(2) In case two or more than two persons jointly agree upon to perform or not to perform any work, except when otherwise provided for in the contract, all persons so concluding- the contract may demand the execution of that contract.

79. Contracts need not executed in the event of fundamental changes in the situation:

(1) In case it becomes impossible to execute a contract as a result of fundamental change in the situation prevailing at the time of signing of the contract, the work under the contract need not be performed.
(2) Without prejudice to the generality of Sub-section (1), fundamental change shall be deemed to have come in the situation prevailing at the time of signing of the contract in any of the following circumstances:
(a) In case the contract becomes illegal and it can not be executed;
(b) In case it becomes impossible to execute the contract due to emergence of such situations as war, floods landslides, fire, earthquakes, and volcanic eruptions, which are beyond the control of human beings;
(c) In case anything essential for executing the contract is destroyed or damaged, or no longer exists, or can not be obtained;
(d) In case the contract has been signed with a provision to provide services on the basis of efficiency, skill or talent, and the person providing such service dies or loses his/her sense or becomes incapable of performing the contract because of physical or mental disability.
(3) Notwithstanding anything contained in Sub-section (2), fundamental changes shall not be deemed to have come in the situation prevailing at the time of signing the contract in any of the following circumstances:
(a) In case it becomes difficult to perform the contract;
(b) In case profit margin is low or loss is expected;
(c) In case any party to a contract is dependent upon any third party who is not a party to the contract for performing the contract, if the third party commits a mistake or becomes unfit;
(d) In the event of strikes and lockouts;
(e) In case it becomes necessary to pay additional tax, fee or other revenue;
(f) In case the contract has been signed with several objectives and only some of them can not be fulfilled.
(4) In case it becomes impossible to execute a contract because of fundamental changes in the situation as mentioned in Sub-section (2), action in the following matters shall be taken as follows;
(a) The amount paid by one party to the other in consideration of the contract before such a change in the situation occurs shall be refunded to the other party.
(b) Payment to be made or due from one party to the other in consideration of the contract shall not be made after such a change in the situation.
(c) In case any party has performed any work or paid any amount before such a change in the situation, such work or amount shall be calculated and the amount to be paid to each other should be determined, and reasonable expenses incurred by one party in consideration of the contract may be recovered from the other party.
(5) Notwithstanding anything contained in this Section, after the end of the situation mentioned in Clause (b) of Sub-section (3), the parties to a contract may agree to fulfill their respective obligations by executing the contract.

80. Facilities to be provided: The parties to a contract shall provide facilities needed for executing the contract from their respective sides. In case the contract can not be executed due to failure of providing such facilities, the party failing to execute the contract in that manner shall not be held responsible.

81. Contract may be suspended or altered:

(1) In case the parties to a contract agree, all or any of the portions of the work to be performed under the contract may be changed or amended, the time-limit for performing any work under the contract extended, the contract suspended by not making it obligatory to perform any work to be performed under the contract for
some time, the work mentioned in the contract may be replaced by another work, or a new contract may be signed as a replacement of the original contract.
(2) In case any change or amendment is made in the contract under Sub section (1), a new contract shall be deemed to have been signed, and the contract shall become effective accordingly. In case a new contract is signed in this manner, liability under the initial contract need not be borne except when otherwise provided for in the contract.

Chapter- 12

Chapter- 12:

Breach of Contract and Remedies

82 . Breach of contract :

(1) In case any party to a contract does not meet liability under the contract, or gives a notice to the other party that he/she will not perform the work to be performed under the contract, or in case his/her action or conduct shows that he/she is incapable of performing the work under the contract, he shall be deemed to have breached the contract.
(2) In case a party has broken the contract under Sub-section (1), or in case his/her action or conduct shows that he/she has not basically compiled with the contract, the other party shall not be compelled to perform the contract, and may cancel the contract by furnishing a notice thereof to the other party.

83. Compensation on breach of contract:

(1) In case a contract has been breached under Section 82, the aggrieved party may realize from the party who has broken the contract, the actual loss or damage suffered by him/her a result of such breach of contract of the loss or damage, which the contracting parties had anticipated at the time of signing the contract.
(2) In case the contract provides that any specific amount or compensation shall be paid in the event of breach of contract, the aggrieved party may recover from the other party a reasonable amount not exceeding that amount.(3) In case the amount of compensation under Sub-section (2) is not mentioned, the party making a claim for such compensation may realize a reasonable amount in consideration of the direct and actual looser damage that has resulted form the breach of contract, or in consideration of the breach of contract, or in consideration of the breach of contract, or in consideration of compensation. No compensation may be recovered for any indirect or imaginary loss or damage.
(4) In case a contract has been signed for completing any work within a specific period, and in case provision has been made for payment of compensation under Sub-section (1) for failure to complete that work within the specific period, the party paying compensation may request for extension of the period for completing the contract in proportion to the amount paid by him/her as compensation.

84. Compensation in the event of cancellation or termination of contract:

(1) In case a contract is terminated with the mutual consent of both parties or it is no longer necessary to perform the contract under this Act or other prevailing laws, or in case the contract is made void under the law or becomes void or cancelled under this Act, after one party has already received some amount in cash or in kind or any other benefit from the. other party as per the contract, the cash or goods which have to be refunded after adjusting the accounts until the term of the contract expires from the amount paid in cash or in kind shall be refunded. In case any service or benefit other than cash or goods has been provided, the beneficiary must pay a reasonable amount to the other party in consideration thereof.
(2) In case it becomes necessary to initiate legal action owing to the non-refundment of the amount paid in cash or kind or the non-payment of amount under Sub-section (1), the concerned party may also realize reasonable expenses incurred for the purpose.

85. Right to recover a reasonable amount: The aggrieved party may claim payment in proportion to the work performed or the amount paid by him/her in cash or in kind in any of the following circumstances;
(a) In case the contract is terminated due to the mistake of the other party at a time when he/she has already completed the work to be performed under the contract or was performing it;
(b) In case the other party utilizes any service or commodity that has been given to him/her without the clear intention of giving it free of cost.

86. Execution of contract as stipulated (Specific performance ):

(1) In case the cash compensation paid in consideration of the actual loss or damage suffered by the aggrieved party as a result of breach of contract is not reasonable or adequate, the aggrieved party may demand the execution of the contract as stipulated specific performance instead of making a claim for compensation.
(2) Notwithstanding anything contained in Sub-section (1), no claims for execution of the contract as stipulated specific performance shall be heard in any of the following circumstances;
(a) In case the amount paid in cash as compensation for breach of contract is adequate;
(b) In case the court can not supervise whether or not the work to be performed under the contract has been actually performed;
(c) In case the contract has been signed for providing services relating to personal expertise, skill or knowledge;
(d) In case the situation is – such that the contract can not be executed as stipulated;
(e) In case the party violating the contract him/herself demands that the contract be executed as stipulated.

87. Power of the judiciary to issue orders :

(1) In case it becomes impossible to execute the contract because any party about to take any action or behave in a manner contrary to the nature of the contract, the party . aggrieved by such action or conduct may file a complaint with the Appellate Court to stay such action or conduct.
(2) In case a complaint is filled under Sub-section (1), the court may issue an appropriate order to any party to immediately stop his/her specific action or conduct with a provision to settle the dispute resulting from that contract according to the contract or prevailing law, notwithstanding, anything contained in prevailing law.
(3) In case such order is issued, the aggrieved party may also realize the additional loss or damage resulting from the failure of the other party to comply with the order issued under Sub-section (2).

Chapter- 13

Chapter- 13

Miscellaneous

88. Prevailing law to be obeyed: In case prevailing law prescribes that any specific procedure must be followed for executing any specific contract, or that any specific contract, must be registered at any government office, a contract signed without fulfilling such formalities shall not be valid.

89. Limitations:

(1) In case prevailing law prescribe any specific limitation in respect to any specific contract or any specific matter relating to contracts, such time limits shall be applicable.

(2) Complain in respect to the following contracts or matters other than those mentioned in Sub-section (1) shall not be heard unless these are filed within the limitation as mentioned hereunder;
(a) In the case of void a contract, to have them declared void at any time;
(b) In the case of a voidable contract, within a year from the date when the party that can have the contract declared void learns about the reason for having the contract declared to be void;
(c) In the case of contracts mentioned in Chapter 7, within two years from the date of emergence of the reason for filing a lawsuit;
(d) In the case of any other claim under this Act, within two years from the date of emergence of the reason for filing a lawsuit for such a claim.

90. Repeal and saving: The Contract Act 2023 (1966), and the Chapter on Bailment and Deposits of the Muluki Ain (Legal Code) have been repealed

Compensation Act, 2019 (1963)

Compensation Act, 2019 (1963)
Date of Authentication and Publication
2019.12.30(12 April 1963)
Amendment :
1 . Republic Strengthening and Some Nepal
Laws Amendment Act, 2066(2010) 2066.10.7(21 Jan. 2010)
Act Number 56 of the year 2019 (1963) …………………
An Act Made To Provide For Compensation
Preamble : Whereas, it is expedient to provide compensation for property acquired or to be acquired by the Government of Nepal in accordance with the Nepal laws; Now, therefore, His Majesty King Mahendra Bir Bikram Shah Dev has made this Act pursuant to Article 93 of the Constitution of Nepal

2. Definitions

2. Definitions: Unless the subject or the context otherwise requires, in this Act:
(a) “Property” means any property acquired or to be acquired in accordance with the prevailing Nepal laws.
(b) “Owner” means a person who has got a stock or the right to the stock.
(c) “Stock” means the stock issued under this Act.
(d) “Bank” means the Nepal Rastra Bank.
(e) “Prescribed” or “as prescribed” means prescribed or as prescribed in the Rules framed under this Act

3. Acquisition of any property

3. Acquisition of any property :

(1) The Government of Nepal may, if it considers necessary to acquire any property for the public interest, acquire that property.
(2) The authority specified by the Government of Nepal may determine the figure of the compensation of the property acquired pursuant to Sub-section (1).
(3) A person who is not satisfied with the figure of compensation determined pursuant to Sub-section (2) may make a complaint to the Government of Nepal within Thirty Five days after the date of receipt of the notice of that determination, and the decision made by the Government of Nepal shall be final.
(4) Notwithstanding anything contained above, if the compensation of any property is specified by the prevailing law, the compensation may be determined accordingly and provided under this Act.

4. Provision of compensation

4. Provision of compensation : The compensation of any property abolished, acquired or to be obtained pursuant to any Nepal law may be provided in the form of stock under this Act. Provide that, if the Government of Nepal so wishes, compensation may be provided even in cash.

7. Payment period and rate of interest

7. Payment period and rate of interest :

(1) The Government of Nepal may, by publishing a notice in the Nepal Gazette, specify the period of payment of stock and the rate of interest in such a manner not to exceed the upper limit specified as follows:
(a) Payment period: Twenty years,
(b) The rate of interest: Five percent.
(2) Notwithstanding anything contained in Sub-section (1), the Government of Nepal may, if it so wishes, provide the amount of interest with effect from the date of abolition or acquisition of any property

8. Bank to be as trustee of stock

8. Bank to be as trustee of stock :

(1) The Bank may be the trustee of the stock given pursuant to this Act.
(2) The Bank shall register the name of owner in its account and give a slip thereof as prescribed to him or her.
(3) If the owner so wishes, the Bank may take custody of his or her stock and may make payment of interest as prescribed not exceeding Two times a year.

11. Action relating to stock

11. Action relating to stock : Only the Bank may take action relating to the stock issued pursuant to this Act, and in taking action, it shall, from time to time, give to the Government of Nepal a report on the economic situation of stock, in the format approved by the Government of Nepal.

12. Transmission of stock

12. Transmission of stock : If the owner makes a request in writing for the transmission of stock, the Bank may inquire into all matters and effect transmission by collecting the fees as specified by it.

14. Amendment to the Birta Abolition Act, 2016(1959)

14. Amendment to the Birta Abolition Act, 2016(1959) : The following amendments have been made to the Birta Abolition Act, 2016 (1959):
(a) The words “as per the manner set forth in the said Schedule” contained in Sub-section (1) of Section 9 are, hereby, deleted.
(b) The sentences contained in “manner of compensation” of the existing Schedule have been deleted

CorporationActCommunication, 2028 (1972)

CorporationActCommunication, 2028 (1972)

Date of Authentication and Publication

2028.12.20 (2 April 1972)
Amendments:
1. Communication Related Some Nepal Acts
Amendment Act, 2029(1972)                                                                                                                                                                     2029.6.5 (20 August 1972)
2. Administration of Justice Reforms
Act, 2031(1974)                                                                                                                                                                                        2031.4.18 (2 August 1974)
3. Judicial Administration Reforms
(Fourth Amendment) Act, 2043 (1986)                                                                                                                                            2043.7.24 (10 Nov. 1986)
4. Communication Corporation
(First Amendment) Act, 204 5 (1988)                                                                                                                                                 2045.7.10 (26 Oct. 1988)
5. Communication Corporation
(Second Amendment) Act, 2053 (1996)                                                                                                                                                   2053.8.26 (11 Dec. 1996)
6. Republic Strengthening and Some Nepal
Laws Amendment Act, 2066 (2010)                                                                                                                                                               2066.10.7 (21 Jan. 2010)
Act number 15 of the year 2028 (1972)
An Act made to establish and form Communication Corporation in Consonance with the National Communication Service Pla
Preamble : Whereas, it is expedient to make some necessary legal provisions on communication corporations in order to provide communication services through various means to the general public in a simple, easily accessible and cost effective manner in consonance with the National Communication Service Plan and to keep on improving the living standards of the people generally by improving their economic condition, by also getting them to be involved as much as possible in the operation of such corporations, in consonance with the National Communication Service Plan, for the consolidation of national unity and economic
development; Now, therefore, be it enacted by His Majesty King Mahendra Bir Bikram Shah Dev on the advice and with the consent of the Rastriya Panchayat.

Chapter-1

Chapter-1

Preliminary

1. Short title, extension and commencement :

(1) This Act may be called as the “Communication Corporation Act, 2028 (1972).”
(2) This Act shall extend throughout………….Nepal.
(3) This Act shall come into force immediately.

Chapter – 2

Chapter – 2

2. Definitions : Unless the subject or the context otherwise requires, in this Act:
(a) “Corporation” means the Corporation established under Section 3.
(b) “Board of Directors” means the board of directors of the Corporation.
(c) “General Manager” means the general manager of the Corporation, and this term also includes the person officiating for the general manager.
(d) “Shareholder” means a person who subscribes a share of a corporation established under this Act.
(e) “Director” means a director of the Corporation, and this term also includes the person presiding over the Board.
(f) “Prescribed” or “as prescribed” means prescribed or as prescribed in the Rules or Bye-laws 2 framed under this Act.

Chapter-3

Chapter-3

Establishment, capital and provision

3. Establishment of the Corporation :

(1) The Government of Nepal may, if it appears necessary or appropriate to operate any communication service for the national interest and knowledge, information, entertainment, facility or economic interest of the people generally, establish and form any corporation, by publishing a notice in the Nepal Gazette, setting out the following matters:
(a) Name of the corporation,
(b) Place of head office of the corporation,
(c) Objectives, functions and duties of the corporation.
(2) If it is necessary to alter the name, place of head office and objectives, functions and duties of the corporation established pursuant to Sub-section (1), the Government of Nepal may make such an alteration, by publishing a notice in the Nepal Gazette.

4. Power of corporation to open branch office : The Corporation may, with the approval of the Government of Nepal, open its branch office, as required, in addition to its head office.

5. Corporation to be deemed as a body corporate :

(1) The Corporation shall be an autonomous body corporate with perpetual succession.
(2) The Corporation shall have a separate seal of its own for all of its activities.
(3) The Corporation may, subject to this Act and the prevailing Nepal laws, acquire, use, sell and dispose of any movable and immovable property, like an individual.
(4) The Corporation may sue by its name and be also sued by the same name.

6. Capital, share and shareholders of the Corporation :

(1) The authorized capital of each Corporation shall be as determined by the  of Nepal.
(2) The Government of Nepal shall subscribe at least Fifty One percent shares of the Corporation, out of the total capital of the Corporation, and a maximum of Twenty Five 3 percent shares shall be sold to the employees of 4 the Corporation, as prescribed. The remaining shares shall be sold to the people generally. Any employee shall not sell the subscribed by him or her while he or she serves for the Corporation.
(3) Each share shall be indivisible.
(4) Restriction may generally be made on the sale of shares in excess of the prescribed percentage to any person or company except any employee of the Corporation.
(5) The liability of shareholders of the Corporation shall be limited.

7. Disqualification for shareholder : Any person, other than a citizen of Nepal or a company or cooperative body registered under the Nepal laws or
corporation or body corporate established under the Nepal Acts may not subscribe shares of or be a shareholder of the Corporation without obtaining approval of the Government of Nepal.

8. Power to receive grant and borrow loan : The Corporation may, by obtaining approval of the Government of Nepal, borrow cash or in-kind or accept a grant as required to increase its running capital. After the provision of the general meeting, in so borrowing a loan or accepting a grant from any foreign country or agency, the general meeting shall also be consulted.

9. Care and provision of the Corporation : Except as otherwise provided in this Act, the Board of Directors shall look after, direct and manage all functions and affairs of the Corporation, subject to general direction by the Government of Nepal. Provided that Board of Directors may so delegate such duties and powers, out of the duties and powers set forth in this Act or the Rules framed under this Act as it deems necessary and appropriate to General Manager or a sub-committee consisting of one or more directors or other officers of the Corporation as to be performed and carried out by them.

10. Formation of the Board of Directors and tenure of directors :

(1)
The Board of Directors (hereinafter referred to as “Board”) of each Corporation shall consist of Five directors as follows:
(a) The general manager of the Corporation,
(b) One person elected by the general meeting from amongst the non-governmental shareholders,
(c) One person nominated by the Government of Nepal in respect of the governmental shares,
(d) One person nominated by the Government of Nepal from amongst the persons who are renowned in the
field related with the working scope of the Corporation, and
(e) One person elected from the shareholder employees of the Corporation.
(2) Until provision of election from the general meeting or that of election from the shareholder employees under Clause (e) of Sub-section
(1), the Government of Nepal shall also nominate the directors as required to be elected from the shareholders.
(3) The Government of Nepal shall designate the chairperson of the Board and the general manager of the Corporation shall preside over the Board.
(3a) 6 The tenure of the directors elected or nominated under Clauses
(b), (c), (d) and (e) shall be Four years, and upon expiration of their tenure, they may be re-elected or re-appointed.
(4) 7 Notwithstanding anything contained in Sub-section (3a), the Government of Nepal may nominate any other person in the place of a director nominated under Clauses (c) and (d) of Sub-section (1) prior to the completion of the tenure of such a director.6 Inserted by the First Amendment.
(5) Upon assumption of office after being elected 8 by the general meeting or employees of the Corporation, the directors nominated by the Government of Nepal shall ipso facto relive of office in relation to them. Provided that, this Sub-section shall not be deemed to bar the appointment or nomination of the person so relived of to the office of director.
(6) …………………….

11. Disqualification for director : Any of the following persons shall not be eligible to be a director or hold the office of director:
(a) Who is of unsound mind or is insane;
(b) Who is convicted by a court of a criminal offense involving moral turpitude, and sentenced to imprisonment for a term exceeding Six months and a period of Five years has not lapsed from the date of the service of such a sentence of imprisonment;
(c) Who has become insolvent; or
(d) Who has personal interest of any kind in any contract or transaction of the Corporation.

12. Circumstance where director may be removed : (1) Any elected director may be removed by a majority of the shareholders present at the general meeting, in the following circumstance:
(a) If he or she suffers any disqualification set forth in Section 11,
(b) If he or she absents from the meeting of the Board for more than Three consecutive meetings without permission of the Board and the reason for such absence is not reasonable in the opinion of the Government of Nepal in the case of a nominated director and of the general meeting in the case of an elected director,
(c) If he or she is proved to have partnership in any contract entered into with the Corporation in violation of Section 18. 10
(2) In the case of a director elected from amongst the shareholder employees, if a majority of such shareholder employees adopts a resolution of no-confidence.

13. Resignation of directors and fulfillment of vacancy :

(1) Any nominated director and elected director may resign from office by giving a notice in writing to the Government of Nepal and to the Board,
respectively. Upon acceptance of resignation, he or she shall be deemed to have abandoned the office.
(2) If the office of a nominated or elected director falls vacant because of his or her death, resignation or any other cause, the vacancy shall be fulfilled by nomination or election, and the director so elected or nominated shall hold the office only for the remainder of the term of the predecessor.
(3) Any acts of the Board already done shall not be invalid by the reason only that any irregularity was made in the formation of the Board or that the office of any director fell vacant.

14. Remuneration of directors : The shares of the Corporation shall be provided as prescribed, to the chairperson or members of the Board of Directors, in consideration for the remuneration.

15. Meetings of the Board :

(1) The meeting of the Board shall be held at such place and time as specified by the Board, and the rules of procedures of the Board shall be as prescribed. In the absence of the chairperson, meetings of the Board shall be presided over by a director selected by the directors from amongst themselves. Provided that, the meeting shall be called for at least Six times a year in a manner that an interval between any two meetings shall not exceed Three months.
(2) No meeting of the Board shall be held unless it is attended by a majority of the then members of the Board.
(3) The decision of a majority of the directors who attend and vote at the meeting of the Board shall be binding. Normally, the presiding person shall not vote, but, in the event of a tie, the presiding person may exercise the casting vote.

16. Appointment of general manager, advisers and employees :

(1) The Government of Nepal may appoint one general manager and such other advisers as may be required, and the Board may appoint other employees, for the operation of the affairs of each Corporation. The terms and conditions of service, tenure 11 and remuneration of the persons so appointed shall be as prescribed.
(2) Appointment and terms and conditions of service of employees may be so made that the employees of the Corporation has to subscribe the shares of the Corporation mandatorily from such figure of remuneration as drawn each month as prescribed. Provided that, no share shall be sold to the employees who have
been appointed on the temporary basis and on the contract service.

17. Director not to take part in meeting : The general manager or employee who is a director pursuant to Section 10 shall not be allowed to take part, in the capacity of the director, in a meeting of the Board to take action against the general manager or that employee.

18. Restriction on director and general manager of the Corporation : The director or general manager of the Corporation shall not be a partner in any contract with the Corporation. Provided that, immediately when each director or the general manager knows that he or she has directly or indirectly any concern (conflict of interest) in any contract to be submitted to the Board for its consideration, proposing something taken or taken or given or to be given by the Corporation, such a director or general manager shall disclose the matter to the meeting of 12 the Board as soon as possible. The matter so disclosed shall be recorded in the minutes, and the concerned director shall not take part in any deliberations or decisions made by the Board in relation to that contract.

19. To obtain approval of the Government of Nepal : The Corporation shall not do the following act without obtaining prior approval of the Government of Nepal:
(a) To purchase or obtain any immovable property valued at more than Ten Million Rupees, or
12 Amended by the Communication Related Some Nepal Acts Amendment Act, 2029.
(b) To take or furnish security of any immovable property for a term more than Ten years, or
(c) To sell or transmit any property or right or facility valued at more than Five Hundred Thousand Rupees.

Chapter-4

Chapter-4

General meeting

20. To submit programs :

(1) The Board shall, at least Three months in advance of the commencement of its financial year, propose and submit programs on operations to be carried out by the Corporation in the coming financial year, statements of incomes and expenses of development works, capital investment and details of additional employees, if so required, and financial statements to the general meeting for approval.
(2) If the Corporation desires to do any other special business, in addition to the programmes already submitted pursuant to Sub-section (1), in any financial year, and it makes a substantial change in the proposed economic cost, the Corporation shall submit such supplementary programs and the costs to be borne when remaining and amounts to be received in the said financial year to the general meeting for approval.
(3) Until the provision of the general meeting, the Board shall submit the statements as referred to in Sub-sections (1) and (2) to the Government of Nepal.

21. General Meetings :

(1) A general meetings (hereinafter referred to as the annual general meetings) shall be held at the head office or the Corporation in each year within Ninety days after the date of closure of annual accounts of the Corporation after the sale of shares of at least Five percent value of the share capital issued by the Corporation for sale. If at least Five percent shareholders make an application in writing or the Board considers necessary so to do, the extra-ordinary general meetings of the Corporation may be called at any other time.
(2) No general meetings may be deemed to be attended by a quorum unless it is attended by at least One-thirds of shareholders in person or by proxy. General meetings called for the second time upon not being attended by the quorum may be deemed to be attended by the quorum if it is attended by one Sixth of the shareholders. Provided that, if the general meetings called for the second time is not even attended by a quorum as mentioned, a submission containing that
matter shall be made to the Government of Nepal, and it shall be done as sanctioned.
(3) The shareholders present at the annual general meetings shall discuss the annual accounts, profit and loss account, matters contained in the auditor’s report in relation thereto and the Board’s report on the affairs of the Corporation carried out throughout the previous year. These matters shall be submitted to the Government of Nepal until the provision of the annual general meetings is made.
(4) A shareholder may cast vote at the rate of one vote for each one percent share of the total capital of the Corporation subscribed by the shareholder.
Provided that:
(a) No shareholder who has subscribed shares less than one percent of the total capital of the Corporation shall be entitled to case vote.
13 Amended by the Communication Related Some Nepal Acts Amendment Act, 2029.
(b) If the share percentage is more than one unit, the shareholder shall be entitled to case vote only equal to the lower unit until the higher unit is achieved.
(5)  No shareholder may exercise vote without being present at the general meetings in person or by proxy.
(6) Any decision at the generals meeting shall be made by a simple majority of the shareholder attending and voting thereat.

22. Power of Government of Nepal to make decision : If there is divergence of opinion between the general meeting and the board on the operation of the Corporation, a submission shall be made to the Government of Nepal for its decision, and the decision made by the Government of Nepal shall be final

Chapter-5

Chapter-5

Fund, accounts and audit

23. Fund of the Corporation :

(1) The Corporation shall have a separate fund of its own. All amounts received by the Corporation including loans and grants shall be credited to the fund, and expenses to be made on behalf of the Corporation shall also be chargeable on that fund.
(2) All amounts of the fund shall be deposited in a bank prescribed by the Government of Nepal.
(3) The Board shall have powers to make such expenses as considered appropriate for the activities authorized pursuant to this Act and the Rules framed under this ct.

24. To bear liabilities by the Corporation : If department, board or corporation of the Government of Nepal is converted into the Corporation under this Act, such liabilities out of the contracts and agreements entered into by the Government of Nepal on behalf of such a department, board or corporation prior to such conversion as specified by the Government of Nepal shall be borne by the Corporation so established upon conversion.

25. Mode of maintaining accounts : Accounts of incomes and expenses of the Corporation shall be maintained in such form and manner as may be approved by the Government of Nepal.

26. Distribution of profits : The distribution and use of profits made by the Corporation shall be as prescribed.

27. Audit :

(1) The annual general meeting shall appoint the auditor, and the remuneration of the auditor shall be as specified by the meeting. Such an auditor shall have obtained license to perform audit in accordance with the Nepal law. Provided that, audit shall be performed by the auditor designated by the Government of Nepal until the first annual general meeting is held.
(2) The auditor may inspect and examine any accounts and documents of the Corporation, and it shall be the duty of all the concerned employees of the Corporation to render assistance in that act.
(3) The auditor shall submit a copy of the audit report made by him or her to the Government of Nepal and another copy to the annual general meeting of the Corporation, and such a report shall clearly state the following matters:
(a) Whether annual accounts and profit and loss account have been so properly and duly maintained, clearly indicating all required matters as to reflect the actual
financial condition of the Corporation or not;
(b) Whether the Corporation has provided any such explanation or information as sought or not, and if so provided, whether it is satisfactory or not.
(4) The Government of Nepal may, based on the report received pursuant to Sub-section (3), and on the advice of the annual 15 general meetings, give direction to the Corporation for necessary reform or provision.

Chapter-6

Chapter-6

Miscellaneous

28. To take oath to maintain secrecy and not to sabotage : Prior assumption of their office, each director, general manager, officer and other employee of the Corporation shall take an oath as set forth in the Schedule.

29. Power of Government of Nepal to make inquiries :

(1) The Government of Nepal may, by publishing a notice in the Nepal Gazette, appoint any inspector or committee to inquire into any activity of the Corporation.
(2) The inspector appointed or committee formed pursuant to Sub- section (1) may examine all accounts and documents of the Corporation.
(3) The procedures to be followed and terms to be observed by the inspector appointed or committee formed pursuant to Sub-section (1) in making inquiries shall be as specified by the Government of Nepal.

30. Power of Government of Nepal to give direction : If the Government of Nepal considers necessary so to do for national interest, it may give direction as follows to the Corporation, and it shall be duty of the Corporation to abide such a direction:
(a) To operate any service with or without specifying any specific area,
(b) Refrain from doing any act being done by the Corporation in any specific area, or to alter such an act or close the same totally,
(c) Not to do any act about to be done by the Corporation.

31. Liaison with Government of Nepal : In making contact by the Corporation with the Government of Nepal in the course of performing its activities or in giving direction by the Government of Nepal to the Corporation, such contact or direction shall be made or given through the Ministry of Communication.

31A. 16 Local taxes not to be levied : No local tax of any type shall be levied on the transaction of the Corporation.

32. Saving of officers against loss or damage : The directors or employees of the Corporation shall not be held individually liable for any loss or damage caused or to be caused from any act done or purported to be done by them in good faith in the course of performing their duties in accordance with this Act and the Rules framed hereunder.

33. Penalties :

(1) If a person who has the duty to maintain any accounts or submit any report pursuant to this or the Rules framed under this Act, knowingly or with ulterior motive, conceals the truth and state a false matter in such accounts or report or other documents or alters the contents or attempts to do such an act, that person shall be liable to the punishment of imprisonment for a term not exceeding Three years or a fine of up to Three Thousand Rupees or with both punishments.
(2) If any director or employee of the Corporation causes loss to the Corporation by doing any act knowingly or recklessly or with ulterior motive by doing any act other that that set forth in Sub-section (1), such a director or employee shall be liable to the punishment of imprisonment for a term not exceeding One year or a fine of up to One Thousand Rupees.
(3) If any person obstructs the inspector appointed or committee formed under Section 29 with his or her business or does not provide, except for any reasonable reason, such document or information to the inspector or committee as demanded, without any reasonable reason, or commits recklessness in the provision of such document or information, such a person shall be liable to the punishment of a fine of up to One Thousand Rupees.
(4) If any person uses the name of the Corporation in any prospectus or advertisement without obtaining written permission of the Corporation, the person shall be liable to the punishment of imprisonment for a term not exceeding Six months or a fine of up to One Thousand Rupees or with both punishments.
(5) If any person who was the then director or general manager of the Corporation becomes a partner in a written contract made with the Corporation in violation of Section 18 and without making disclosure as required under that Section and makes or attempts to make any undue benefit in that capacity, that person shall be liable to the punishment of imprisonment for a term not exceeding Two years or a fine of up to Five Thousand Rupees or with both punishments.
(6) If the Corporation has suffered any loss or damage from any offence punishable under this Section, the amount of such loss or damage shall also be recovered from the offender.

34. ………………. 17 .

35. Powers of Government of Nepal to frame Rules :

(1) The Government of Nepal may frame Rules in order to accomplish the objectives of this Act.

36. Power to frame Bye-laws :

(1) The Corporation may frame bye-laws subject to this Act or the Rules framed under this Act.
(2) The Bye-laws framed pursuant to Sub-section (1) shall come into force only upon being approved by the Government of Nepal.

37. Saving : The matters set forth in this Act and the Rules framed under this Act shall be governed by the same, and the other matters shall be governed by the prevailing Nepal laws.

Schedule

Schedule

(Relating to Section 28)
Oath of honesty and secrecy

I…………………… swear that I shall honestly and with truth and faith perform my duties in the capacity of the director or general manager or employee or inspector or officer of the Corporation or in relation to the affairs entrusted to my office in the Corporation, to the best of my knowledge. I again swear that I shall not disclose or cause to be disclosed any information relating to the Corporation to any unauthorized person or allow any book or document relating to the Corporation and in custody of the Corporation to any person for inspection or receipt

Commission for the Investigation of Abuse of Authority Act, 2048 (1991)

Commission for the Investigation of Abuse of Authority Act, 2048
(1991)
Date of authentication and publication:
4 Mangsir 2048 ( 20 th nov, 1991)
Act Number 34 of the Year 2063
1. Commission for the Investigation of Abuse of Authority (First Amendment) Act,2048 (1991)                                                                  – 2049/2/2/6
2. Commission for the Investigation of Abuse of Authority (Second Amendment) Act, 2059 (2002 )                                                           –2059/4/30/5
3. The Act Amending Some Nepal laws, 2063                                                                                                                                                                    –2063/6/28

Preamble: Whereas it is desirable to make provision relating to the functions, duties, powers and working procedures of the Commission for the Investigation of Abuse of Authority, Now therefore , Parliament has enacted this Act in the 20 th year of the reign of His Majesty King, Birendra Bir Bikram Shah Dev

Chapter 1

Chapter 1

Preliminary

1. Short title, Extent and Commencement

(1) This Act may be called the Commission for the investigation of abuse of authority Act,2048 (1991),
(2) This Act shall be extend throughout Nepal, and shall also be applicable to all Nepali citizens, wherever they may have been residing outside Nepal.
(3) It shall come into force immediately.
(2) Definitions: In this Act, the subject or context otherwise requires: –
(a) “Constitution” means the Interim Constitution of Nepal, 2063 ♣ .
(b) “Commission” means the Commission for the Investigation of Abuse of Authority.
(c) “Commissioner” includes the Chief Commissioner of the Commission,
(d) “Person holding a public post” means any person who is holding a post of At present the prevails Interim Constitution of Nepal, 2063 responsibility or is entitled to exercise any right in pursuance of the Constitution, other prevailing laws or decisions or orders of the concerned body or authority and the term shall also mean an official or employee holding any post in a public institution.
(e) “Public Institution” means the following institutions:
(1) A company, bank or committee fully or partly owned or controlled by Government of Nepal or commissions, organizations, authority, corporations, academy, boards, centers, councils or any other organized institution of such nature established by His Majesty’s Government,
(2) Universities, campuses, schools, research centers and any other academic or educational institutions run by Government of Nepal or receiving full or partial grants from Government of Nepal,
(3) Local bodies constituted under the Local Self-Governance Act,2055 (1999),
(4) Institutions run with loans, grants or guarantee of the Government of Nepal.
(5) Institutions with full or partial ownership or control of the institutions stated in Sub-Clauses (1), (2), (3) or (4),
(6) Any other institution designated as public institution by the Government of Nepal by publishing a notification in the Nepal Gazette.
(f) “Investigation Officer” means a person designated under this Act for conducting inquiries and investigations on abuse of authority.
(g) “Improper Conduct” means any act as mentioned in Section 3, committed
(h) “Corruption” means an offence punishable under the prevailing laws relating to the prevention of corruption.
(i) “Abuse of Authority” means an improper act or corruption as mentioned in Clauses (g) or (h),

(j) “Court” means the court pursuant to Sub-section (1) of Section 34 ,
(k) “Authority” means the authority provided for in prevailing laws or agreements or any other written documents relating to terms and conditions of service of a person who is holding a public post, and the term shall also apply to a person authorized to appoint, dismiss from service or supervise the works of such persons.
Improper conduct: Any of the following acts taken willfully or negligently by a person holding a public post shall be regarded as an improper Conduct:
(a) to refuse to do anything within the jurisdiction to do anything beyond the jurisdiction .
(b) to comply with the mandatory procedures while taking a decision or issuing an order.
(c) to exercise powers vested in him/her for any objective or purpose in contravention of the appropriate law, decision or order.
(d) to exercise discretionary powers in a mala fide or arbitrary manner.
(e) to create unauthorized obstruction in the work of any other office, authority or employee, or compelled them to perform any unauthorized action by exerting pressure on such office, authority or employee.
(f) to fail to do anything which one should have done, or send to another office or authority, evading responsibility, or
(g) to fail to discharge any duty pertaining to the post; which is required to discharge according to the nature of the post .
(h) to cause to work in one’s own interest to a person subordinate or person under the influence through undue pressure or lure

(i) to abuse the immunity, facilities or privileges acquired in the capacity of a post

Chapter II

Chapter II

Provisions Regarding Jurisdiction of the Commission

4. Jurisdiction of the Commission : The Commission, in accordance with this Act or other prevailing laws, may conduct investigations, file a case or take any action
against any person holding a public post for an abuse of authority. Provided that,
(a) In the matters contained in the proviso of Article 98 (1) of the Constitution, actions shall be taken accordingly.
(b) The Commission, pursuant to the Act, shall not take any action in matters relating to any business or decisions taken at meetings of any House of Parliament or of any committee or anything said or done by any member at such meetings, or any policy decisions taken by the Council of Ministers or any committee thereof or judicial actions of a court of law.

5 ……..

6 Regarding Actions to be taken by the Commission on improper conduct in the public Institutions : …… ∝ The Commission may refer any complaint filed with it regarding any improper conduct in any institution to the concerned institution, or to the concerned superior body for action, according to circumstances, on the condition that a report shall be submitted to it, and such body shall inform both the Commission and the complainant about the action and decision taken in respect
thereto. Provided that, in case the Commission so deems necessary, it may conduct a fresh scrutiny or initiate action it in respect to such complaint

7 Commission not allowed to raise question on discretionary powers: The commission shall not initiate any action under this Act with regard to any action or decision taken by any officer in any …….. ∝ exercise of his/her discretionary powers. Provided that, if it appears that such discretionary powers have been exercised in a mala fide or arbitrary manner, nothing mentioned in this Section shall prevented the Commission from initiating action in respect thereto.

Chapter III

Chapter III

Provisions Regarding Improper Actions

8. Complaints with regard to improper conduc t:

(1) In case anyone commits improper conduct having an adverse effect on matters of public interests or concern, anyone may file a complaint with the Commission and in case of matters other than this, a person who is adversely affected by the improper conduct may lodge a complaint.
Provided that, in case the person adversely affected by improper conduct has already died or unable to file a complaint due to physical or mental incapacity, a complaint may be filed by his/her heir or guardian as well.
(2) The commission may pursuant to this Act conduct an inquiry or investigation and take necessary action with regard to an improper conduct being committed adversary affecting the matters of public interest or concern upon receiving any information from any other source even a complaint has not been filed pursuant to Sub-Section (1),
(3) While filing a complaint pursuant Sub-Section (1) on matters having an adverse impact on public interest or concern, the complaint may be filed any time and with regard to matters other than this, complaints shall be filed within 35 days after the complainant comes to know of it.
(4) While submitting a complaint, the complainant shall submit evidence in support of the complaint which are in his/her possession or which he/she can obtain.

9. Verification of complaints : Except when  the person adversely affected by improper actions personally files a complaint with the Commission, in case the complaint is forwarded to the Commission by post or by any other means, the Commission shall summon ∇ such complainant to appear before it within seven
days after receiving such complaint for its verification. Provided that, in case the contents of the complaint are found baseless or unclear or confusing, the Commission may decide not to take any action in respect thereto. The Commission shall inform the ∇ person adversely affected by improper conduct of such decision as early as possible.

10 Procuring the relevant files and documents of evidence : In case the contents of the complaints, and any evidence if any submitted by the complainant in respect thereto, provide reasonable grounds to believe that any person holding, apublic post has committed any improper conduct as mentioned in the complaint, the Commission may procure the relevant files or documents of evidence from the appropriate office office-holder, or person, and in case if a person can provide
important information in respect thereto, the Commission may also inquire such person.

11. Procedure for departmental action :

(1) In case any person holding a public post is deemed to have committed an improper conduct or there is reasonable ground to believe so from an investigation undertaken by the Commission, the Commission shall send a notification to such person by enclosing all the details obtained from the investigation into the complaint filed against him/her requiring him/her to submit a clarification within a prescribed period.
(2) While sending a notification pursuant to Sub-Section (1), the complaint filed against the person holding a public post, all the details acquired from the investigation, the ground on which the allegations against him/her are based or what kind of departmental action or punishment or action he/she should face in case he/she is convicted of the charge must be clearly mentioned in the notification.

12. Written request for departmental action :

(1) In case, any person holding a public post does not submit a clarification within the time as prescribed in Sub- section (1) Section 11, or in case, in the opinion of the Commission, the clarification so submitted is not deemed satisfactory, the Commission may write to the appropriate authority to caution or to take departmental action against him/her upon stating the reasons and grounds based on the degree of offence.
(2) In case, the request in writing has been received pursuant to Sub- Section (1), the concerned authority shall propose an appropriate penalty and shall inform the Commission within three months of taking departmental action as per the prevailing laws. In case the action has been initiated in response to a complaint filed by somebody else, the complainant must also be informed of this.
(3) In case the appropriate authority fails to take departmental action within the time prescribed in Sub-Section (2) except as otherwise having a reasonable ground, the Commission may take an action against the authority considering it as an improper conduct under this Act.

12a. To write for other necessary action : In case any person holding a public post commits an improper conduct and causes harm or loss to Government of Nepal or
public institutions, the Commission shall write to the concerned body or authority to make up for the losses incurred or to take any other necessary action deemed
appropriate by the Commission.

12b. To issue an order for rectifying bad results : The Commission may write to the concerned authority or department in order to rectify the bad results arising out
of the improper conduct committed by a person holding a public post. Provided that, in case the decision taken by the person holding a public post may be appealed under the prevailing laws, the Commission shall not write in such a way that it would have an influence on such a decision.

12c. To inform the Commission : Upon receiving a response pursuant to Section 12a or 12b, the concerned authority or body shall take action within three months and inform the commission accordingly.

Chapter IV

Chapter IV

Provisions regarding Corruption

13 Complaints regarding corruption :

(1) The Commission may conduct inquiries and investigations, or initiate other action, in respect to corruption under this Act, on the basis of the complaint filed by any person, or of information obtained by the Commission from any source.
(2) Except provided in Section 29, in Case the Commission does not initiate action within a period of 5 years, no action shall be initiated in respect of corruption under this Act after the expiry of that period. Provided that, there shall be no limitation to file a case if corruption is committed by misappropriation of government or public property or the property an institution owned by Government of Nepal.

14. Preliminary Probe Regarding Corruption :

(1) In case there exist reasonable grounds to believe on the basis of any complaint or report, or from information received by the Commission from any other source, that a person holding a public post has committed an offence involving corruption, the Commission may conduct a preliminary probe thereof secretly,
(2) While conducting a preliminary probe of the offence of corruption under Sub-section (1), the Commission may exercise the power, vested in it under this Act in respect to inquiries and investigations.

15. Clarification to be sought from the concerned person in case information seems to be correct : If, in the course of a preliminary probe into any offence involving corruption under Sub-section (1) of Section 14, the complaint, report or information received by the Commission seems to be correct, the Commission may demand clarifications from the person who has committed offence, as well as from other person implicated therein, mentioning brief particulars of the charges.

16. Detention of the accused :

(1) In case there is adequate ground to believe that any person against whom the Commission has initiated actions on charges of corruption may conceal or destroy any evidence, or hamper or obstruct, or adversely affect the action being undertaken by the Commission, the Commission may keep him/her in detention by providing with him/her a detention order in his/her name under the prevailing law.
(2) In case, as regards to the person in detention, it is deemed necessary to continue investigation by keeping him/her in detention for a longer period, than twenty four hours to complete the process, commission shall seek the permission by producing him/her before the court. While seeking permission from the court, allegations against him/her, and reasons for continuing probe by keeping him/her in detention and contents of his/her statement, if at all, shall be clearly mentioned.
(3) The person produced before the court for the purpose of seeking permission to keep in detention under Sub-Section (2) may apply at the court requesting for his/her physical check-up.
(4) In case, permission is requested under Sub-Section (2) to keep in detention, the court, upon scrutinizing the relevant documents, shall decide whether the investigation is going satisfactorily or not, and if it is deemed satisfactory, it may grant permission to keep in detention for a maximum period of six months, not exceeding one month at a time.
(5) While requesting for an extended period of time to keep the accused in detention under Sub-Section (4), the person in detention may file an application at the concerned court by detailing all the grounds and reasons proving that his/her detention is not necessary, if he/she so desires.

17. Ipso Facto suspension : In case, any person holding a public post being is detained by the commission under Section 16 or Sub-section (4) of Section 19, such person shall be deemed to have been ipso facto suspended from his/her post for a period of such detention, and in if, the case has been filed against him/her in
the Court under Section 18, he/she shall be deemed to have been so suspended until the case is disposed off. The person so suspended shall be deemed unfit for any post in the government offices or public institution or any other post which may cause financial burden to the loan or grant received by the Government of Nepal.

18. Filing of cases : In case, there exist reasonable grounds to believe, on the basis of action initiated under this Act, and inquiries and investigations conducted in respect thereto, regarding a charge of corruption against any person holding a public post, that he/she has committed such offence, the Commission may ∇ order the investigation officer or any office of the Government of Nepal to file a case pursuant to the prevailing law

Chater V

Chater V

Inquiries and Investigations

19. Powers of the Commission Relating to inquiries and Investigations :

(1) While conducting inquiries and investigations into abuse of authority under this Act, the Commission may exercise the following powers:
(a) Issue orders to submit to the Commission, or present to the Commission within a specific time limit, relevant files or documents of evidence, or other materials, in the possession of any office or individual, or
(b) Summon a person against whom charges of abuse of authority have been made or any person who, in the opinion of the Commission, possesses knowledge of the relevant facts, inquire such persons, and record their statements and issue questionnaires (Band sawal) in] their name as requires.
(c) Issue an order to the police to arrest a person who does not appear before the commission within the prescribed period even receiving the notice so issued by the commission.
(2) Upon receiving clarification, or recording statements of the person against whom charges of abuse of authority have been made, commission may release him/her after making him/her sign a bond stipulating that he/she will appear before the Commission as required, or keep him/her on date.
(3) In case there exists a reasonable ground to believe that the person against whom action has been initiated on charges of corruption may conceal or destroy evidence against him/her, or hamper or obstruct inquiry and investigations if he/she is allowed to continue in his/her post, the Commission may write to the Government of Nepal or concerned institution, as the case may be to suspend him/her from the post.
(4) In case there exist reasonable ground to believe that the person against whom action has been initiated on charges of corruption may abscond and disappear, or in case any property appears to have been damaged, the Commission may demand security in cash or collateral from him/her pursuant to the prevailing law and in case such security in cash or collateral is not provided, keep him/her in detention.
(5) In case the Commission has written to any office or individual to submit any document or other material, or furnish information about any matter, or in case the Commission has summoned any person to appear before it:- (a) In case such office does furnish such document or material within a reasonable time limit accordingly or does not furnish information relating thereto, the Commission may direct the concerned Minister or institution to initiate departmental action against the chief office- holder of the concerned office.
(b) In case such person does not furnish the document or materials within a reasonable time limit accordingly, or does not furnish information relating thereto, or in case such person does not appear before the Commission, the Commission may fine him/her with an amount not exceeding one thousand Rupees .
(6) In case any office or individual does not comply with the orders of the Commission even after the departmental action is taken, or a fine imposed, pursuant to Sub-section (5), the Commission may issue a warrant of arrest for arresting and producing the chief office holder or person, and have such office or person furnish such document or material, or provide necessary information. In case the office holder or person who is arrested in this manner does not furnish such document or material, or does not provide information relating thereto, the Commission may issue an order to keep him/her in detention for a period not exceeding seven days.
(7) In case the Commission has directed that departmental action be taken or decided to impose a fine under Sub-section (5), and in case the chief office-holder or the concerned person submits a petition mentioning reasonable grounds why he/she has not been able to comply with the order of the Commission, so that such action should not be initiated or such fine should not be imposed, and in case the reasons appear to be satisfactory, the commission may cancel the order relating to such directive or fine.
(8) The Commission, if think necessary, shall have authority to search or cause to search of any place or to seize any object, document or file as so required or to copy the document or file pursuant to the prevailing law .
(9) Except in circumstances when the Commission has no power under this Act to initiate an action, no person holding a public post shall be granted immunity from disclosing any information on the basis of confidentiality in the course of proceedings before the Commission.
(10) Every agency or office holder conducting investigations into abuse of authority shall conduct proceedings in camera, instead of taking open action leading to publicity; unless there is Prima Facie evidence against whom charges of abuse of authority has been made.
(11) In case a complaint is filed against a person holding politically appointed post or a member of the parliament, regarding abuse of authority, the Commission shall conduct secret inquiries into such complaints. If, in the course of such inquiries, it is found that there is ground to prove the matters mentioned in the complaint, then, ∇ an action shall be initiated under this Act in respect to such complaint, and the Commission shall inform the Prime Minister of detailed inquiries in the case of a person holding any politically appointed post and the Speaker or the Chairperson of the appropriate House in the case of a member of Parliament.
(12) In course of the investigations or inquiries carried out under this Act, in case, the charges are not proved on the ground of the collected evidence, the Commission may issue a terminate order with supporting reasons for the same. Provided that, this Section shall not be deemed to have obstructed the proceedings if fresh evidence on are found regarding the complaint.
(13) In case a complaint is terminated pursuant to Sub-Section (12), the concerned person holding a public post and the complainant shall be so informed.
(14) Notwithstanding anything contained in this Act, in case improper conduct is found to have been committed in course of the investigation into corruption or in case corruption is found to have been committed in course of inquiries into improper conduct, actions shall be taken accordingly.
(15) If an accused helps to the process of investigation and inquiry to be conducted pursuant to this Act, the Commission may produce him/her to the cause
as a witness and may request for commutation in penalty, fully or partially. Provided that, in case the assistance fails to corroborate through other proof or evidence or the statement given in the concerned court is against the assistance rendered in the Commission, lawsuit may be filed against such person,
notwithstanding anything contained in this Act or any other prevailing law.

20. Appointment of Investigation Officer :

(1) The commission may appoint ? or designate any Commissioner or any employee of the Commission or any employee of Government of Nepal or any institution, as an Investigation Officer, as so requiring in order to conduct Preliminary inquiries and investigations into improper conduct or offense involving corruption under this Act. Provided that, while appointing or designating the employee of the government or any institution as an Investigation Officer, the Commission shall
consult with Government of Nepal or the Chief of the concerned institution as the case may be.
(2) The Investigation Officer appointed or designated by the Commission under Sub-section (1) may exercise the powers vested in the Commission under this Act in respect to inquiry and investigation.

Chapter VI

Chapter VI

Miscellaneous

21. Services may be availed :

(1) While conducting investigations and inquires or initiating other actions thereto pursuant to this Act and other prevailing law, the Commission, may avail the services of any expert or the specialized agency as so requires .
(2) In order to avail of service under Sub-Section (1), the Commission shall appoint the concerned expert or specialized agency and shall conclude an agreement detailing the functions, to be performed by such expert or specialized agency, powers may be exercised the terms and conditions to be followed, procedures, and the remunerations and other facilities they are entitled to enjoy.
(3) In case, the Commission requires the service of employee an Government of Nepal or of a specialized agency, notwithstanding anything contained in the prevailing laws, such employee shall be assigned on deputation for a period of time as requested by the Commission.

21a. Arrangement of the Employees : Government of Nepal shall make arrangements, as per the approved posts, for the functional operation of the Commission.

22. Allotment of Functions By Chief Commissioner : In case other Commissioners also have been appointed in addition to the Chief Commissioner in the Commission, the Chief Commissioner shall have power to allot work and prescribe the functions of individual each Commissioner.

23. Secrecy of Information :

(1) Any notice or information obtained in the course of inquiries and investigations into abuse of authority under this Act, and evidence received or collected by the Commission, shall not be disclosed to the public, or the communication media. Provided that, this provision shall not prejudice the power of the Commission to conduct inquiries and investigations into abuse of authority, or submit report related thereto, or publish notices or particulars necessary for initiating action,
(2) Notwithstanding anything contained in Sub-section (1), the Commission may conduct an open probe, inquiry and investigation into any matter considered by it to be of public importance.

23a. To acquire statement or to freeze transaction:

(1) Notwithstanding anything contained in the prevailing laws, in case, in course of the investigation into charges of corruption, any person is learnt, from any source, to have been involved in transactions or have operated an account in banks or financial institutions within the country or abroad, the Commission may order freezing of such transaction or account. As ordered by the Commission, the concerned bank or financial institution must freeze such transactions or account. Provided that, as regards freezing of transactions or bank accounts in foreign countries, such transaction or bank account shall be caused to be frozen through diplomatic channels.
(2) The Commission may impose a maximum fine of fifty thousand Rupees to the Chief of the concerned bank or financial institution based in Nepal for its failure to freeze transaction or account pursuant to Sub-Section (1).
(3) The Commission, if deemed necessary in course of the investigation, may demand a property statement of a person holding a public post or may freeze such property.

23b. Order to ban issuance of passport or to put it on hold: Notwithstanding anything contained in the prevailing laws, the Commission may order the concerned body not to issue a passport to any accused or to put it on hold in case it has already been issued in view of the gravity of the offence, the circumstances in which the offence was committed, situation and the degree of offence and the punishment to be meted if proved guilty.

23c. Restriction to leave place: In case an action has already been initiated under this Act, the Commission may issue an order prohibiting him/her to leave any place  to go to any places without the permission of the Commission considering the seriousness of the offence, the circumstances in which the offence was committed and the punishment to be meted out if proved guilty.

24. Punishment for obstruction : In case any person willfully obstructs any action or process relating to inquiries and investigations under this Act, the appropriate Court may punish him/her with a fine of not more than fives thousand Rupees or with imprisonment for a term not exceeding sixth months, or with both, on the basis of a report of the Commission.

24a. Provision with regard to service of notice :

(1) Notwithstanding anything contained in the prevailing laws, while issuing a notice in the name of a foreign national on charges under this Act, such notice shall be issued in the name of the office or the representative in Nepal, if at all, and this shall be deemed to have been duly served.
(2) In case the office or representative pursuant to Sub-Section (1) is not found, notice shall be served to place of main transactions or to the permanent address or to the address for correspondence of such person in which he/she is doing transactions through telex, telefax or other means of telecommunication or through postal registry and the notice thus served shall be deemed to have been duly served.
(3) Notwithstanding anything contained in Sub-Section (1) or (2), this Section shall not be deemed to become an obstruction in serving notice in the name of any person residing in a foreign country as per a separate provision of any treaty to which Government of Nepal or Nepal is a party.

24b. Publication of notification : While issuing a notification or serving a notice to a person pursuant to this Act or any other prevailing law, in case, a report has been received mentioning that the notification could not be delivered or a notice could not be served due to not finding. The address of such person or any other reason, notwithstanding anything in the prevailing laws, the commission shall publish a public notice twice in the National level news paper (In case of foreign in the
English language daily newspaper) to appear before within 30 days upon mentioning the briefs of the investigation by the commission or change sheet filed at the court as the case may be, and such notification or notice shall be deemed to have been duly delivered or served notwithstanding anything in the other prevailing law .

24c. Punishment for making false complaints : In case any person without any reasonable ground lodges a false complaint against any public servant or a person holding public post or a person with a mala fide intention of causing injury, the Commission may fine up to five thousand Rupees to such person if so proved.

25. No Suit To be Entertained Against The Commission, Commissioners Or Employees of commission :No suit shall be instituted in any court in respect to any action taken with bona fide intention under this Act by the Commission or any Commissioner or employee of the Commission, or any employee or office deputed
by the Commission, or to whom the Commission has delegated authority.

26. Cooperation may be obtained by the commission from other offices or employees :

(1) For the purpose of inquiries and investigations into abuse of authority, the Commission may obtain the cooperation of any Department or office of the Government of Nepal, including the Police Headquarters, the National Investigations Department and their subordinate office, or any institution, or the services of any employee of such department, office or institution.

(2) In case the nature of the abuse of authority into which the Commission is conducting inquiries and investigations, makes it necessary to hold consultations with any expert working in any department, office, or institution, or to involve such expert in inquiries and investigations, the Commission may request the concerned department, office or institution to send him/her in deputation for a specified period.
(3) In case the Commission has sought the cooperation of any department, office or institution, or any employee working therein, pursuant to Sub-section ( 1) or Sub-section (2), it shall be the duty of such department, office or institution or employee to provide such cooperation to the Commission.

27 ……..

28 Commission May Offer Suggestions :

(1) On the basis of facts which come into its knowledge in the course of action taken by it, the Commission may offer any of the following suggestions to the appropriate office, office holder or\institution:
(a) In case the Commission feels that any law, decision, order or action is impractical, undesirable, or inconsistent, and so must be amended, it may offer suggestions for amendment therein along with the reasons.
(b) In case the Commission feels that Government of Nepal or any institution, or any office or office holder of Government of Nepal or any institution, must remain vigilant on any issue, or must take any action, it may offer suggestions about what type of vigilance should be adopted or action taken.
(c) In case the Commission feels that any practice or procedure of Government of Nepal or any institution if defective, it may offer suggestions along with the reasons and bases to rectify such defects and solve problems arising therefrom.
(2) Particulars of suggestions offered under Sub-section (1) shall be included in the annual report to be submitted by the Commission to the majesty under Clause (6) of Article 98 of Cases may be initiated against retired persons also :

(1) nothing contained in this Act shall be deemed to have prevented the Commission from instituting cases against any person in respect to corruption committed by him during the period when he was holding a public post, even after he has retired from such post.
(2) Notwithstanding anything contained in this Act, in case any person holding a public post is found to have abused powers when he/she was holding the public post and it was not possible to initiate action pursuant to this Act immediately, nothing in this Act shall be deemed to have prevented to take action against him/her even after retirement from the post for whatever reasons.

29a. No obstruction in the proceeding and finalization of the case : Notwithstanding anything contained in the prevailing law, there shall be no constraints in initiating proceedings or finalizing the case even if the accused or defendant has died before or after filing of the case under this Act.

29b. Confiscation of property: In case, any property earned by a person holding a public post or the property increased from it kept in his/her own name or in the
name of any other person is proved to have been earned through corruption under this Act or other prevailing laws, such property shall be confiscated. Provided that, in case the ownership of such property has been transferred to any other person and while transferring the ownership if the amount of such This provision is not mentioned in the article of 119, 120 &121 of Interim Constitution of Nepal, 2063 property has been mentioned, such amount shall be considered as a loan without any collateral (as good as kapali) .

29c. To order freezing of the property of a foreigner : (1) In case any foreigner, summoned as per the notice issued by the Commission or pursuant to Section 24a who fails to appear before the Commission within the stipulated time, possesses any property or enjoys any right or has any concern in the Nepal, the Commission
may put on hold such property or rights or concern or may issue an order requiring the foreign national not to take such things outside the country and it shall be the
duty of all to observe such order.
(2) The Commission may impose a fine of up to One Hundred Thousand Rupees to a person who fails to observe the order issued pursuant Sub-Section (1), and in case the non-observance of such order has caused any harm, loss to the Government of Nepal or any public institution, such harm or loss shall also be recovered from him/her.

30. Cases may also be initiated against other persons :

(1) In case any person considered as public servant under the existing law or any other person commits corruption, the Commission may, under this Act or the prevailing laws, initiate investigations and inquiries or may file case and may initiate other actions thereto.
(2) While undertaking investigations and inquiries into cases of corruption under this Act or under any other prevailing laws committed by a person holding a public post or by any other civil servant under the prevailing law, the Commission may initiate investigations and inquiries, may file cases and take any other action
against any person in case such person is found to have been involved in such offence.? Inserted by Second Amendment.

31. Action to be initiated by only one Agency on charges corruption : In case action has been initiated against any person on charges of corruption in the same case in the Commission as well as against other person in other agencies in the same case, the Commission may make arrangements to provide that such action may be conducted through a single agency in respect to such charge.

31a. Provision relating to property details :

(1) A person holding a public post from the date of holding of such post, and a person who is in the public post from the date of commencement of this Section shall submit an updated statement of their property which is in their own or in their relatives name with source of it and proof there of within sixty days and each year within sixty days of the expiry of every fiscal year before the body or authority prescribed by the Government of Nepal by a notification in the Nepal Gazattee.
(2) In case a person holding a public fails to submit a statement of his/her property within the stipulated sixty days pursuant to Sub-Section (1), the Commission shall impose a fine of five thousand Rupees and ask to submit the statement of the property within the next 30 days. If again the person holding the public post does not submit the statement of property within the extended timeframe, the body or authority under Sub-Section (1) may initiate an investigation against him/her by assuming that the property in his/her own name or his/her family member’s name is illegal.
(3) The property statement so submitted under this Section shall be kept confidential. Provided that, the statement may be given to the concerned authority on
demand in course of initiating investigation and inquiry under this Act.

31b. Auction of goods :

(1) In case any goods or items seized in connection with offences punishable under this Act seem likely to develop rust if kept for long or suffer breakage or cause losses or decay or depreciate or have no owner or are not likely to be maintained for lack of space, such items or goods shall be auctioned off upon fulfilling procedures as mentioned in the prevailing law.
(2) The amount received from the auction shall be credited in a deposit bank account. In case such items are declared to be given to the concerned owner,
only the amount received from auction of such items shall be refunded.

32. Commission may regulate its Working Procedure : The Commission may regulate its working procedure itself.

33. Annual Reports : The Commission shall submit to the President an annual report on the works it has performed in accordance with this Constitution; and the
President shall arrange to submit such report to the Legislature-Parliament through the Prime Minister.

34. Adjudicating authority :

(1) The power to hear a case filed under this Act shall be vested in the court as prescribed by the Government of Nepal upon publishing a notification in the Nepal Gazette.
(2) The court prescribed pursuant to of Sub-Section (1), while initiating and finalizing cases lodged under this Act, shall exercise the power and procedure as the special court under the prevailing law.
(3) The verdict handed down by the court pursuant to Sub-Section (1) shall be appealed at the Supreme Court.
(4) Government of Nepal shall be the plaintiff in cases instituted under this Act on charges of corruption.

35. To initiate cases :

(1) In case any person holding a public post or any public servant under prevailing laws or other person is found to have committed an offence of corruption, the Commission, itself under this Act or any other prevailing law, shall file a lawsuit, appeal or review petition in its own name or through the authority designated by it.
(2) The government attorney or an attorney appointed by the Commission in coordination with the Office of the Attorney General shall plead, advocate or
defend on cases filed pursuant to Sub-Section (1).

35a. Provision for reward: The Commission may give a due reward to any person who helps the Commission in investigation, inquiries or in collecting evidence
about an offence, which is punishable under this Act.

35b. The Commission may carry out other functions :

(1) The Commission may maintain necessary coordination with the national or international institutions established with the objective of controlling or preventing corruption or enhance relation or mutual cooperation with such institutions.
(2) The Commission, if deemed necessary may carry out research and develop processes to prevent corruption or improper conduct through promotional
activities with a view to promoting information on such matters.

35c. Appea l: One may appeal, against the order handed down by the Commission for any fine or realizing any amount of money or other order, before the concerned
court.

35d. As per prevailing laws : Matters contained in this Act shall be taken as per this Act and in other matters action shall be taken as per other prevailing laws.

36. Provisions regarding complaints or actions transferred from the Commission for the Prevention of Abuse of Authority :

(1) Petitions and complaints transferred to the Commission under Clause (5) of Article 130 of the Constitution shall be deemed to have been filed under this Act and the Commission subject to the provisions of this act thereto shall take action accordingly.
(2) If inquiries and investigations have been completed, but no suit yet have been filed, the Commission may treat the action as terminated under this Act, or send it to the concerned office for further action, or issue an order under Section 18 to file a suit in the concerned Court.

37. Power to frame Rules : The Commission may frame Rules in order to implement this Act, Such Rules shall come into force after they are published in the Nepal Gazette.

38. Repeal : The Commission for the Prevention of Abuse of Authority Rule, 2034 (1977) has been repealed.

Civil Aviation Act, 2015 (1959)

Civil Aviation Act, 2015 (1959)
Date of Authentication                                                                                                                                                                  Publication Date on Nepal Gazette
2015.12.31                                                                                                                                                                                                   2016.1.10
Amendments
1. Some Nepal Laws (Amendment and Rearrangement) Act, 2020                                                                                               2020.11.16
2. Civil Aviation (First Amendment) Act, 2023                                                                                                                                2023.5.24
3. Civil Aviation (Second Amendment) Act, 2030                                                                                                                           2030.5.16
4. Civil Aviation (Third Amendment) Act, 2034                                                                                                                                 2034.6.6
5. Administration of Justice Act, 2048                                                                                                                                                     2048.2.16
6. Civil Aviation (Fourth Amendment) Act, 2053                                                                                                                                     2053.8.5
7. Some Nepal Laws Amendment Act, 2063                                                                                                                                      2063.6.28
8. Republic Strengthening and Some Nepal Laws Amendment Act, 2066                                                                                    2066.10.7
Act Number 22 of the Year 2015
An Act Made to Control and Regulate Civil Aviation
Preamble: Whereas, it is expedient to control and regulate civil aviation to create conditions favourable to promote the development of civil aviation so that the country could acquire maximum benefit from the air transportation, and to maintain peace, order and convenience of the people in general, Now, therefore, be it enacted and promulgated by His Majesty the King on the advice of the Council of Ministers

1. Short Title, Extent and Commencement

1. Short Title, Extent and Commencement:

(1) This Act may be called “The Civil Aviation Act, 2015 (1959)”.
(2) This Act shall extend all over the Nepal, and also apply to the following aircrafts and persons –
(a) Every citizen of Nepal wherever he/she may be, and
(b) Every aircraft registered in the Nepal, wherever it may be, and every person on board an aircraft.
(3) This Act shall come into force from such date as Government of Nepal, by a Notification published in the Nepal Gazette, may appoint