PAPER - 3 : BUSINESS AND CORPORATE LAWS
QUESTION
The Indian Contract Act, 1872
1. (a) Mr. X is a businessman fighting a long drawn Court case with Mr. Y another
businessman. To support his case Mr. X signs up the services of Mr. Z a legal expert stating that an amount of Rs. 2 lakhs would be paid, if Mr. Z does not take up the brief of Mr.Y. Mr. Z agrees, but at the end of the litigation Mr. X refuses to pay. Decide whether Mr. Z can recover the amount promised by Mr. X under the provisions of the Indian Contract Act, 1872.
(b) P hires a taxi of Q and agrees to pay Rs.700 as hire charges. The taxi was unsafe
for driving because of its loose footbrake, though Q was unaware of it. P was
injured and claims compensation for injuries suffered by him. Q refuses to pay.
Discuss the liability of Q.
2. X, a minor was pursuing the study of Chartered Accountacy. On 1st July, 2009 he took a
loan of Rs. 15,000 from Y for payment of his course fees and to purchase books and
agreed to repay by 31st December, 2009. X possesses assets worth Rs. 2 lakhs. On
due date X fails to pay back the loan to Y. Y now wants to recover the loan from X out of
his (X’s) assets. Referring to the provisions of Indian Contract Act, 1872 decide whether
Y would succeed.
3. Ram sent a consignment of goods worth Rs. 50,000 by roadways and got a receipt. He
obtained an advance of Rs. 30,000 from the bank and endorsed and delivered the receipt
in favour of the bank by way of security. The roadways failed to deliver the goods at the
destination. The bank filed a suit against the roadways for Rs. 50,000. Decide in the
light of provisions of the Indian Contract Act, 1872, whether the bank would succeed in
the said suit?
4. B, at the request of A, sells goods which is in the possession of A, on which A had no
right to dispose of.B doesn’t not know this fact and hands over the sale proceeds to A.
Afterwards C, the true owner to the goods sues B and recovers the value of the goods
and costs. Advise the remedy available to B.
The
5. With a view to boost the sales Shri Automobiles gave car to Mr. A on trial basis for a
period of seven days with a condition that if Mr. A is not satisfied with the performance of
the car, he can return the car. However, the car was destroyed in a fire accident at the
place of Mr. A before the expiry of seven days. Decide whether Mr. A is liable for the
loss suffered.
6. Shyam the owner of a zipsy wants to sell his zipsy. For this purpose he hand over the
zipsy to Mohan , a mercantile agent for sale at a price not less than Rs. 80, 000. The
agent sells the zipsy for Rs. 60, 000 to Ram, who buys the car in good faith and without
Notice of any fraud. Mohan misappropriated the money also. Shyam sues Ram to recover the zipsy. Decide with reason whether Shyam would succeed.
The Indian Partnership Act,1932
7. State the modes by which a partner may transfer his interest in the firm in favour of
another person, under the Indian Partnership Act, 1932. What are the rights of such a
transferee?
8. (a) Five major persons form an association to which each member contributes Rs.
20,000.The purpose is to produce medicines for free distribution to poor patients. Is there a valid partnership?
(b) X, Y, and Z are partners in an unregistered firm. X steals the property of the firm. Y
filed a suit against X. X resisted Y’s claim on the plea that the firm was not
registered .Will Y succeed in suit?
The Negotiable Instruments Act,1881
9. Rajan by inducing Sohail obtains a Bill of Exchange from him fraudulently in his (Rajan)
favour. Later, he enters into a commercial deal and endorses the bill to Mahesh towards
consideration to him (Mahesh) for the deal. Mahesh takes the bill as a Holder-in-due-
course. Mahesh subsequently endorses the bill to Rajan for value, as consideration to
Rajan for some other deal. On maturity the bill is dishonoured. Rajan sues Sohail for the
recovery of the money.
With reference to the provisions of the Negotiable Instruments Act, decide whether Rajan will succeed in the case ?
10. Give the meaning of ‘Sans Recours’ endorsement? A bill of exchange is drawn payable
to P or order. P indorses it to Q, Q to R, R to S, S to T and T to P. State with reasons
whether P can recover the amount of the bill from Q, R, S and T, if he has originally
indorsed the bill to Q by adding the words ‘Sans Recours’.
11. X, by means of fraud, obtained from Y a Cheque crossed ‘not negotiable’ and got it
cashed at a bank other than the drawee bank.Y sued the bank for conversion.Is the bank
liable for conversion?
12. Sameer, drawer of a cheque after having issued the cheque, informs Varun, the drawee
not to present the cheque as well as informs the bank to stop the payment. Does it
constitute an offence under the Act ?
The Payment of Bonus Act,1965
13. What is the minimum bonus that is payable to (a) an employee (b) an employee under
15 years of age ?
14. How direct tax payable by the employer is calculated and how the tax payable by the
employer is calculated where such employer is an individual?
The Employees’ Provident Funds and Miscellaneous Provisions Act,1952
15. Who shall administer the Fund created under the Employees’ Pension Scheme?
16. Rainbow Group of Industries sold its manufacturing unit to Royal Group of Industries.
Rainbow Group contributed 30% of total contribution in Pension Scheme, which was due
before the sale under the provisions of Employees’ Provident Fund and Miscellaneous
Provisions Act, 1952. The Royal Group of Industries refused to bear the remaining 70%
contribution in the Pension Scheme. State according to the provision of the Employees’
Provident Fund and Miscellaneous Provisions Act, 1952, who will be liable to pay for the
remaining contribution in case of transfer of establishment and upto what extent?
The Co-operative Societies Act,1912 & The Multi-State Cooperative Societies Act,2002
under the Co-operative Societies Act, 1912.
under the Co-operative Societies Act, 1912?
The Companies Act,1956
19. Explain the term ‘Pari Passu’ clause in a debenture. Lay down the formalities required to
be filed with the Registrar of Companies in case of such debentures secured by a charge
on certain assets of the company.
20. In a private company it is discovered that there are, in fact, 54 members .On an enquiry,
it is ascertained that 6 of such members have been employees of the company in the
recent past and that they acquired their shares while they were still employees of the
company. Is it necessary to convert the company into a public limited company?
21. XYZ Co. Ltd. was in the process of incorporation. Promoters of the company signed an
agreement for the purchase of certain furniture for the company and payment was to be
made to the suppliers of furniture by the company after incorporation. The company was
incorporated and the furniture was used by it. Shortly after incorporation, the company
went into liquidation and the debt could not be paid by the company for the purchase of
above furniture. As a result suppliers sued the promoters of the company for the recovery
of money.
Examine whether promoters can be held liable for payment under the following situations:
(i) When the company has already adopted the contract after incorporation?
(ii) When the company makes a fresh contract with the suppliers in terms of
preincorporation contract?
22. Explain the meaning of ‘Sweat Equity Shares’ and state the conditions a company has to
fulfil for issuing such shares.
23. After receiving 80% of the minimum subscription as stated in the prospectus, a company
allotted 100 equity shares in favour of ‘X’. The company deposited the said amount in the
bank but withdrew 50% of the amount, before finalisation of the allotment, for the
purchase of certain assets. X refuses to accept the allotment of shares on the ground
that the allotment is violative of the provisions of the Companies Act, 1956. Comment.
24. The Articles of Association of Akme Company Ltd. provides that documents may be
served upon the company only through Fax. Rajesh despatches a document to the
company by post, under certificate of posting. The company does not accept it on the
ground that it is in violation of the Articles of Association. As a result Rajesh suffers loss.
Explain with reference to the provisions of the Companies Act, 1956:
(i) Whether refusal of document by the company is valid?
(ii) Whether Rajesh can claim damages on this basis.
25. The Board of Directors of M/s Balaji Associates Ltd. proposes to pay interim dividend of
Rs.2 per equity share of Rs. 10 each. Advise the Board regarding:
(i) the time limit for payment of interim dividend to the shareholders, and
(ii) steps to be taken in case any dividend amount remains unpaid in the books of the
company.
Comment (1)
December 17, 2020 at 2:00 PM
Please .send the answers to this quesions
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