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Uttar Pradesh
India 201303
ASSIGNMENTS
PROGRAM: BFIA
SEMESTER-VI
Subject Name:
Study COUNTRY:
Permanent
Enrollment
Number (PEN)
Roll Number (Reg. No.):
Student Name:
INSTRUCTIONS
a) Students are required to submit all three assignment sets.
ASSIGNMENT
Assignment A
Assignment B
Assignment C
DETAILS
Five Subjective Questions
Three Subjective Questions + Case Study
Objective or one line Questions
MARKS
10
10
10
: _________________________
Assignment B
Assignment C
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6) Business is all about making the right decision at the right time. Without proper
environmental analysis the right decision cant be made.
7) Environmental analysis helps in predicting the future.
8) Environmental analysis helps in suitable modification of strategies, as and when
required.
Limitations of Environmental Analysis
1) Today the environment is turbulent and dynamic and it is difficult to forecast of
predict the environment.
2) Business environment is global and any development in any part of the world can
influence the business. Even a small political move can have a drastic impact, which
in very difficult to scan and assess. A sudden disintegration of USSR had very adverse
impact on many exporters in India. A sudden attack of Al Qaeda on the Twin
Towers in the US resulted in the hike of global petroleum prices. After Signing the
WTO, all of a sudden the toy market of India was captured by Chinese products.
Today it is extremely difficult to predict the external environment.
3) The Effectiveness of environmental analysis depends upon how it is practiced, i.e.,
whether it is a systematic approach, ad hoc or processed. Under a systematic
approach, information for environmental scanning is collected, scanned and
monitored on a continuous basis and forecast and is assessed for the relevant factor.
In an ad hoc approach, an organization conducts special surveys and studies to deal
with specific environmental issues from time to time. In a processed form approach,
an organization uses information in a processed form, available from different
sources, both inside and outside the organization. For effectiveness, an organization
should use the combination of these approaches instead of just following the tried
formulas, because all have their importance according to requirement.
Too much reliance is often placed on the information collected through environmental
scanning. When there is overloading of information, one is likely to get lost and become
inactive-typical of paralysis through analysis syndrome.
Q: 2).
Answer:
According to Section 2(h) of the Indian Contract Act 1872, A contract is an agreement
enforceable by law.
It is an agreement enforceable at law, made between two or more persons, by which rights
are acquired by one or more, to act on the part of the other. It creates and defines
obligations between the parties.
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All agreements are not necessarily enforceable by law. An agreement to sell a house may be a
contract enforceable by law. However, an agreement to attend a party being of a social
nature is not enforceable.
It may be noted that a contract essentially contains two elements: agreement and
enforceability by law.
An agreement is every promise and every set of promises, forming consideration for each
other. This essentially means that there should be an offer and an acceptance to form an
agreement.
The other element of contract, enforceability by law, emphasizes the importance of intention
to create a legal obligation or duty to perform or abstain from performing certain act(s).
These acts could relate to social or legal matters.
All contracts are agreements but all agreements are not contracts. In order to become a
contract, an agreement must satisfy the essential elements of contract; Offer and acceptance,
Consideration, Capacity of contract, Free Consent, Legal Relations, Writing and Registration,
Certainty, Possibility of Performance and Not Expressly Declared Void.
Four of those elements are explained bellow:
1) Offer and Acceptance:
For any contract there must be at least two parties, one of them making the offer and the
other one accepting it. The acceptance must be unconditional and absolute.
Conditions of Offer
The following conditions govern making an offer:
a) The offer must be definite and not vague.
b) An offer should be differentiated from an invitation to make an offer.
There are occasions where a person may make some statements or give information with an
intention of inviting others to make an offer. For example, a catalogue with prices indicated
on it is not an offer to sell. On the contrary it is only an invitation to make an offer. A
person interested in buying the product specified in the catalogue, may make an offer to buy
and it is left to the discretion of the seller to either accept or reject the same.
Conditions of Acceptance
The following conditions govern accepting an offer:
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Coercion
Undue Influence
Fraud
Misrepresentation
Mistake.
Q: 3).
What are the rights of a finder of a good under the Indian contract Act?
Answer:
A person, who finds goods belonging to another and takes them into his custody, is subject
to the same responsibility as a bailee. He is bound to take as much care of the goods as a
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man of ordinary prudence would, under similar circumstances, take of his own goods of the
same bulk, quality and value. He must also take all necessary measures to trace its owner. If
he does not, he will be guilty of wrongful conversion of the property. Till the owner is found
out, the property in goods will vest with the finder and he can retain the goods as his own
against the whole world (except the owner, of course).
A finder of goods has the following rights under the Indian Contract Act, 1872
1) Right of lien:
The finder of goods has a right of lien over the goods for his expenses. As such he can retain
the goods against the owner until he receives compensation for trouble and expenses
incurred in preserving the goods and finding out the owner. But he has no right to sue the
owner for any such compensation (Section 168).
2) Right to sue for reward:
The finder can sue for any specific reward which the owner has offered for the return of the
goods. He may also retain the goods until he receives the reward. (Section 168)
3) Right to resale:
The finder has a right to sell the goods in the following cases:
a)
b)
c)
d)
Q: 4).
Answer:
The general rule is that an agreement made without consideration is void (Section 25). In
every valid contract consideration is very important. A contract may only be enforceable
when an adequate consideration is there. However, the Indian Contract Act, 1872 contains
certain exceptions to this rule. In the following cases, the agreement though made without
consideration, will be valid and enforceable.
1) Natural Love and Affection:
A written and registered agreement based on Natural Love and Affection between the
parties standing in near relation (e.g., husband and wife) to each other is enforceable even
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Explain the rights of an unpaid seller under Indian sales of goods Act.
Answer:
The term unpaid seller is defined by Section 45 of the Sale of Goods Act, 1930. As per
this section, the seller of goods is deemed to be an unpaid seller within the meaning of
the Act.
1) When the whole of the price has not been paid or tendered.
2) When a bill of exchange or other negotiable instrument has been received as
conditional payment and the condition on which it was received has not been fulfilled
by reason of the dishonor of the instrument or otherwise.
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The unpaid sellers right depends upon the passing of the possession of the goods:
In case the property in the goods may have passed to the buyer, the unpaid seller of goods,
as such, has by implication of lawa) A lien on the goods for the price while he is in possession of them;
b) In case of the insolvency of the buyer a right of stopping the goods in transit after he
has parted with the possession of them;
c) A right of re-sale as limited by this Act.
d) Where the property in goods has not passed to the buyer, the unpaid seller has, in
addition to his other remedies, a right of withholding delivery similar to and coextensive with his rights of lien and stoppage in transit where the property has passed
to the buyer.
Rights of an Unpaid Seller
I.
II.
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ASSIGNMENT B
Q: 1).
Answer:
Negotiable means transferable by delivery, and Instrument is a written document
which creates a right in favour of any person. Therefore, a negotiable instrument is a
written document which creates a right in favour of any person and which is transferable
by delivery.
According to Section 13 of the Negotiable Instrument Act 1881, Negotiable Instrument
means a promissory note, bill of exchange or cheque payable either to order or to bearer.
This definition is not comprehensive as it is very limited in scope and many instruments
such as hundi. Etc., will not qualify as negotiable instruments as per this definition.
According to Thomas, A negotiable instrument is one which is, by a legally recognised
custom of trade or law, transferable by delivery or by endorsement and delivery in such
circumstance that (a) the holder of it for the time being may sue on it in his own name, and
(b) the property in it passes free from equities to a bonafide transferee for value,
notwithstanding any defect in the title of the transferor.
According to Justice Willis in his book (The Law of Negotiable Securities), A
negotiable instrument is one, the property and the title in which is acquired by anyone who
takes its bonafide and for value notwithstanding any defect in the title of the person from
whom he took it.
The characteristics of a Negotiable Instrument are:
1) Writing and Signature according to the rules:
A Negotiable Instrument must be in writing and signed by the parties according to the rules
relating to (a) promissory notes, (b) Bills of Exchange and (c) Cheques.
2) Payable by Money:
Negotiable Instruments are payable by the legal tender money of India. The Liabilities of the
parties are governed in terms of such money only.
3) Unconditional Promise:
If the instrument is a promissory note, it must contain an unconditional promise to pay. If
the instrument is a bill or cheque, it must be an unconditional order to pay money.
4) Freely transferable:
Free transferability is one of the most important characteristics of a negotiable instrument.
It is transferable from one person to another by delivery or by endorsement and delivery.
The former is known as payable to bearer and the latter payable to order.
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5) Acquisition of Property:
The holder of the instrument is presumed to be the owner of the property contained therein.
He is entitled to the sum of money, mentioned on the face of the instrument.
6) Acquisition of Good Title:
The holder in due course (one who acquires the instrument in good faith and for
consideration) gets it free from all defects including fraud provided he was not party to it.
7) Right of the Holder in Due Course:
The holder in the due course remains unaffected by certain defects, which might be available
against previous holders, as for example, fraud, to which he is not a party.
8) Recovery:
The holder in due course has the right to sue on the negotiable instrument in his own name
for recovery of the amount. It is not necessary for him to give any notice of transfer to the
party liable for payment on the instrument.
9) Certain Presumptions:
A negotiable instrument is always subject to certain presumptions that are enumerated under
section 118 to 119 of the Act 1881. Those presumptions include: Consideration, date, time
of acceptance, time of transfer, order of endorsements, stamps and signature of holder in
due course.
10) Maturity:
The negotiable instrument is transferable till maturity and in case of cheque till it becomes
stale (on the expiry of six months from the date of the issue).
Q: 2).
Answer:
The term company is originally derived from two Latin words come (meaning, together)
and panies (meaning, bread). In other words, company refers to an association of
merchants coming together to discuss matters and partaking food together. Simply put, the
term conveys that it is an association of a number of persons coming together for a common
purpose.
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Section 3(1)(i) of The Companies Act 1956, defines a company as, A company formed and
registered under this Act or an existing company. An existing company means one that is
formed and registered under The Companies Act formulated earlier.
A company is an incorporated association which is an artificial person created by law,
having a separate entity with a perpetual succession and a common seal.
- Haney
According to Lord Justice Lindly, By a company is meant an association of many
persons who contribute money or moneys worth to a common stock and employs it in
some trade or business and who share the profit and loss arising there from. The common
stock so contributed is denoted in money and is the capital of the company. The persons
who contribute are its members. The proportion of capital to which each member is entitled
is his share. Shares are always transferable although the right to transfer them is often more
or less restricted.
A company can thus be defined as an artificial person, recognized by law, having a
distinctive name, a common seal, a common capital comprised of freely transferable shares,
carrying limited liability, and having a perpetual succession.
Types of Companies
There are various types of companies that can be formed in different jurisdictions, but the
most common forms of companies are:1) A company limited by guarantee:
Commonly used where companies are formed for non-commercial purposes, such as clubs
or charities. The members guarantee the payment of certain (usually nominal) amounts if the
company goes into insolvent liquidation, but otherwise they have no economic rights in
relation to the company. This type of company is common in England.
2) A company limited by shares:
The most common form of company used for business ventures. Specifically, a limited
company is a "company in which the liability of each shareholder is limited to the amount
individually invested" with corporations being "the most common example of a limited
company." This type of company is common in England.
3) A company limited by guarantee with a share capital:
A hybrid entity, usually used where the company is formed for non-commercial purposes,
but the activities of the company are partly funded by investors who expect a return. This
type of company may no longer be formed in the UK, although provisions still exist in law
for them to exist.
4) A limited-liability company:
"A companystatutorily authorized in certain statesthat is characterized by limited
liability, management by members or managers, and limitations on ownership transfer", i.e.,
L.L.C.
5) An unlimited company with or without a share capital:
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A hybrid entity, a company where the liability of members or shareholders for the debts (if
any) of the company are not limited.
6) Companies formed by letters patent:
Most corporations by letters patent are corporations sole and not companies as the term is
commonly understood today.
7) Charter corporations:
Before the passing of modern companies legislation, these were the only types of companies.
Now they are relatively rare, except for very old companies that still survive (of which there
are still many, particularly many British banks), or modern societies that fulfill a quasi
regulatory function (for example, the Bank of England is a corporation formed by a modern
charter).
8) Statutory Companies:
Relatively rare today, certain companies have been formed by a private statute passed in the
relevant jurisdiction. Note that Ltd. after the company's name signifies limited company,
and PLC (public limited company) indicates that its shares are widely held.
9) Private Limited Company:
According to Section 3(1)(iii) of The Companies Act 1956, a private company means that a
company which by its articles:a) Restricts the right to transfer its shares, if any;
b) Limits the number of its members to 50;
c) Prohibits any invitation to the public to subscribe for any shares in or debentures of
the company; and
d) Prohibits any invitation or acceptance of deposits from persons other than its
members, directors or their relatives.
e) All private company must always use the word private limited after its name.
A Private Limited Company is the most popular form of business entity used for Foreign
Investors in India, including USA investors in India.
10) Public Company:
A public company is defined as a company which is not a private company. The following
conditions apply only to a public company:a) Public Companies are those companies which have a minimum paid up capital of Rs.
5 lac, as per The Companies Amendment Act 2000.
b) It must have at least seven shareholders.
c) A public company is not authorized to start business upon the grant of the certificate
of incorporation.
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A public enterprise incorporated under the Indian Companies Act, 1956 is called a
Government Company.
These companies are owned and managed by the central or the state government.
According to Indian Companies Act, 1956, a government company means "any
company in which not less than 51 percent of the paid up share capital is held by the
central or by state government and partly by the central government and includes a
company which is a subsidiary of Government Company".
The following are some of the essential features of a government company: It is formed under the provisions of the Indian Companies Act, 1956.
The total share capital or 51 percent or more of share capital is held by the
government.
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It enjoys the status of a legal entity and therefore it can use or be sued by others.
The finance of a government company is obtained from the government and from
private share holders.
The employees are governed by the rules prescribed for the company by the board of
directors.
It is not subject to budgeting, accounting, and audit rules applicable to a government
department.
The directors are nominated by the government depending upon participation of
private capital.
13) Holding Company:
When a public company acquires a minimum of 51 percent of the voting rights of another
company i.e. the purchasing company is called a holding company. Such a company has
the control over all the affairs of the company.
14) Subsidiary Company:
The company which has been purchased by a holding company is called a subsidiary
company. The company which is controlled by another company is called so.
Q: 3).
Act.
Answer:
Depending on the nature of relief sought by the consumer and facts, the Redressal Forums
may give orders for one or more of the following reliefs:a) Removal of Defects:
If after proper testing the product proves to be defective, then the remove its defects order
can be passed by the authority concerned.
b) Replacement of Goods:
Orders can be passed to replace the defective product by a new non-defective product of the
same type.
c) Refund of Price:
Orders can be passed to refund the price paid by the complainant for the product.
d) Award of Compensation:
If because of the negligence of the seller a consumer suffers physical or any other loss, then
compensation for that loss can be demanded for.
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CASE STUDY:
Case1
A dealer in radios gives a Murphy radio to a customer on the terms that Rs. 100
should be paid by him immediately and Rs 200 more in two monthly equal
installments. It was further agreed that if the radio is found defective the customer
may return it within a week but not later. The customer makes default in paying the
last installment. Can the radio dealer take back the radio on his default?
Answer:
No, the radio dealer cannot take back the radio on default by the customer, because it is a
contract of sale and not of hire-purchase.
Case2
X sees a book displayed in a shelf of a book shop with a price tag of Rs. 85. X tenders
Rs. 85 on the counter and asks for the book. The bookseller refuses to sell saying that
the book has already been sold to someone else and he does not have another copy of
that book in the stock. Is the bookseller bound to sell the book to X?
Answer:
No, the bookseller is not bound to sell the book to Mr. X. because the display of goods with
prices marked thereon is only an invitation for offer, and not an offer itself. Hence, the
bookseller is free to accept or not accept the offer of Mr. X.
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ASSIGNMENT C
Q: 1).
Any person is a holder in due course if he has obtained the negotiable
instrument
a)
b)
c)
d)
Q: 2).
a)
b)
c)
d)
For consideration
By gift
Before its maturity
Both (a) & (c) above ()
Michael Portes Five Forces Model includes:
Threat of Substitutes
Bargain Power of supplier
Bargain Power of Government
Both (a) & (b) ()
Q: 3).
I had applied for subscription in Rajlakshmi scheme of UTI. The
essence of the scheme was that the sum of money deposited with the UTI
would grow 21 times in 28 years. However subsequently, the UTI extended the
maturity date by two years. Can I approach a Consumer Court?
a)
b)
Q: 4).
a)
b)
Q: 5).
In which of the following instances, the collecting banker shall not be
liable for conversion to the true owner under the Negotiable Instruments Act,
1881?
a)
b)
c)
d)
e)
The collecting bank advances money to the customer against the cheque even
before the cheque is realized
The uncrossed cheque given to the collecting bank for collection is crossed by
the banker
The payment is received by the collecting bank on behalf of a person who is
not a customer of the bank
The collecting bank is a holder for value
The collecting bank is acting as an agent for receiving the payment ()
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Q: 6).
Which of the following amounts to reduction of share capital under
section 100 of the Companies Act, 1956?
a)
b)
c)
d)
e)
Q: 7).
Which of the following statements is false in respect of offer and its
acceptance under the Indian Contract Act, 1872?
a)
b)
c)
d)
e)
Q: 8).
Mr. Dheeraj is a director of Laxmi Ltd., which failed to file its annual
returns from the year 2003-04. The maximum period for which Mr. Dheeraj
will be disqualified from becoming a director in any public limited company is
a)
b)
c)
d)
e)
3 years
5 years ()
7 years
8 years
10 years.
Q: 9).
Which of the following statements is false in respect of a contract of
guarantee under the Indian Contract Act, 1872?
a)
b)
c)
d)
e)
Where there are two or more types of preference shares, the shareholders of
the class which has priority are entitled to their preferential dividend before
any dividend is paid to other shareholders
Cumulative preference shareholders are entitled to receive all dividends which
are in arrears before any dividend is paid on equity shares
Where cumulative preference shares have been issued at different times,
the arrears of dividend will have to be paid to all the preference
shareholders equally ()
In case of non-cumulative preference shares, only the amount of dividend
which is due in the current year will have to be paid to the holders
The preference shareholder cannot sue the company for dividends, unless the
company has declared the same and did not pay the amount.
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The bailor is bound to disclose, all the faults in the goods bailed to the bailee,
of which the bailor is aware
The bailee will have to bear all the ordinary expenses incurred by vitue of the
bailment
The bailor is responsible to the bailee for any loss sustained by him in case the
bailor is not entitled to make the bailment or to receive back the goods
The bailor is not responsible to the bailee for any loss sustained by him
in case of premature termination of a gratuitous bailment ()
It is the duty of the bailor to receive back the goods after the purpose is
achieved.
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Q: 17). Which of the following agreements is not valid under the Contract Act,
1872?
a)
b)
c)
d)
e)
Q: 18). As per section 166 of the Companies Act, 1956, the first annual general
meeting of a company should be held within
a)
b)
c)
d)
e)
Q: 19). Which of the following is not excluded for the purpose of counting
maximum number of directorships under section 275 of the Companies Act,
1956?
a)
b)
c)
d)
e)
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Q: 20). Which of the following is not a foreign bill under the Negotiable
Instruments Act, 1881?
a)
b)
c)
d)
e)
When the pawnor defaults in payment of the principal debt , the pawnee can
retain the pledged goods as collateral security
When the pawnor fails to perform his part of the promise, the pawnee may
sell the pledged goods after giving the pawnor a reasonable notice of sale
When the pawnor defaults in payment of the principal debt the pawnee
cannot recover from the pawnor any deficit between the debt due and
sale price ()
When the pawnor defaults in payment of the principal debt, the pawnee can
file a suit for breach of contract against the pawnor
The pawnee can sue the pawnor for any extraordinary expenses incurred by
him for the preservation of the goods pledged.
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Q: 23). Mr. Pankaj who was appointed as an additional director at the Board
meeting held on December 31, 2005 continues to be in his office on the ground
that the annual general meeting of the company for the year 2006 was not held
as required under the Act. Mr. Pankaj was also appointed as a managing
director for a period of five years with effect from January 01, 2006 at the same
Board meeting. Which of the following statements is true in respect of an
additional director under the Companies Act, 1956?
a)
b)
c)
d)
e)
Mr. Pankaj shall hold the office as an additional director till the completion of
five years
Mr. Pankaj shall hold the office as an additional director upto the conclusion
of any general meeting
Mr. Pankaj shall hold the office as an additional director as long as he intends
to
Mr. Pankaj shall vacate the office of the managing director ()
Mr. Pankaj shall hold the office of the managing director till the completion of
five years.
Q: 24). Which of the following statements is false under the Companies Act,
1956?
a)
b)
c)
d)
e)
Where the bailee has rendered any service or exercised his skill in respect of
the goods bailed, then he can retain the bailed goods until his dues are paid
If the bailee has agreed to refrain from exercising the right of lien or has
waived his right, then he cannot exercise the same
The right of particular lien will be revived, if the bailee gets possession
of the bailed goods after parting with the same in the first place ()
The right of lien can be exercised so long as the bailee has the possession of
the goods
The bailee may retain not only those goods of the bailor in respect of which
some particular service has been rendered, but also other goods in the
possession of the bailee belonging to the bailor.
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Q: 27). Hiten Desai picked up a diamond ring from the floor of Divya Jewellers,
Surat and handed it over to Premchand Bhatia, the manager of Divya
Jewellers, with a request to hand it over to the true owner. The true owner
could not be traced in spite of best efforts of Premchand. Hiten Desai paid the
expenses incurred by Premchand and asked him to return the diamond ring to
him. Which of the following statements is true under the Indian Contract Act,
1872?
a)
b)
c)
d)
e)
Premchand is under no obligation to return the ring to Hiten Desai as the ring
was found on the floor of his shop
Premchand is under an obligation to return the diamond ring only to the true
owner
Premchand and Hiten Desai can share the value of the diamond ring equally
Hiten Desai being the finder of lost goods can retain the diamond ring
against everyone except the true owner ()
Premchand can retain the diamond ring against everyone including the true
owner.
Q: 28). Under the Companies Act, 1956, up to what date a director appointed to
fill casual vacancy shall hold office?
a)
b)
c)
d)
e)
The last day on which the annual general meeting should have been held
Until the original director, in whose place he is appointed, returns back
Till the date up to which the director in whose place he is appointed
would have held office ()
Up to the next extraordinary general meeting
Up to the conclusion of the annual general meeting.
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Q: 29). At a public auction a car was put up for sale and as Mr. Ramlal was the
highest bidder, he got the car. Later, it was discovered that the car was a
stolen one. This fact was also not known to the auctioneer. The true owner
wishes to obtain possession of the car. Under these circumstances which of
the following statements is true under the Sale of Goods Act, 1930?
a)
b)
c)
d)
e)
Mr. Ramlal did not get any title against the true owner ()
The true owner cannot recover any possession as Mr. Ramlal had bought at a
public auction
As Mr. Ramlal had purchased the car in good faith, Mr. Ramlal can enjoy
possession of the car
The true owner can file a suit against the auctioneer for fraudulently selling a
stolen car
The auctioneer is personally liable to the true owner for damages only and the
true owner has no right to obtain possession of the car.
Q: 30). Which of the following statements is false under the Companies Act,
1956?
a)
b)
c)
d)
e)
Q: 31). Which of the following instances is not treated as crossing under the
Negotiable Instruments Act, 1881?
a)
b)
c)
d)
e)
A cheque bearing across its face the words account payee without two
transverse parallel lines ()
A cheque bearing across its face the words not negotiable with two
transverse parallel lines
A cheque bearing across its face the words not exceeding rupees two
hundred within two transverse parallel lines
A cheque bearing across its face the words HDFC Bank, Karol Bagh Branch,
New Delhi within two transverse parallel lines
A cheque bearing across its face the words Citi Bank, Daryaganj Branch, New
Delhi without two transverse parallel lines.
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Mr. Ankit has no remedy for the negligent conduct of the company
Mr. Ankit can sell the assets of the company and take his money
Mr. Ankit has to file a complaint to the Central Government
Mr. Ankit can approach the National Company Law Tribunal (NCLT)
for winding up of the company ()
Mr. Ankit has to conduct the general meeting and pass resolutions for
changing the directors.
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Inchoate instrument
Escrow ()
Accommodation bill
Trade bill
Ambiguous instrument.
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