JUNE 2011 EXAMINATION

GM 06 Business Law & Corporate Governance

SECTION A (10 marks each) 10*4=40

1. A free consent is an essential feature of a valid contract. Explain concept of free consent? 2. Stranger to the contract cannot sue. Do you agree? 3. What is a quasi-contract? Explain the rules related to quasi contract. 4. No one can give a better title to anyone than what he himself has. Explain. 5. Who is unpaid seller? Explain the rights of unpaid seller against the buyer. 6. What do you understand by the breach of contract and explain the remedies available to aggrieved party? 7. What is doctrine of indoor management? Explain its exceptions. SECTION B (15 marks each question) (15*3=45)

1. What is Memorandum of Association of a company? Explain different clauses of the MOA? Explain the procedure for shifting the registered office of company from Delhi to Mumbai? (2, 8,5) 2.(a) What are the different modes for creation of an agency and how it can be terminated? 8 (b) Explain the circumstances when agent will be personally liable? 7 3. What is corporate governance? Explain the provisions relating to corporate governance given in the companies Act 1956. 4. (a) What is the endorsement of a negotiable instrument. Explain different kinds of endorsements? (10) (b) What is material alteration in the context of a negotiable instrument? (05) 5. A car was sold by Mr. Bhola to Mr. Suresh for Rs.50000 only. Mr. Suresh purchased the car in good faith. He did not expect that Mr. Bhola would sell him a stolen car. Mr. Bhola has spent all the money for his trip to Shimla. Later Mr. Suresh was caught by the police for being in possession of a stolen car. Suresh showed the police the receipt and papers indicating the purchase. Police discovered that Mr. Bhola was a minor. a) Can Mr. Suresh claim his money from Bhola? (7) b) What legal options are available to Suresh in the case? (8) SECTION C (15 marks) The DB ltd was in the business of construction and real estate. The MOA of the company provides for only other related businesses. In the year 2010 it has given a loan of Rs. 50 Million to a media company for production of Film. However later company in 2011 has held an EGM for alteration of object clause of the company and to include the media house financing in its object clause. The meeting was adjourned due to want of quorum however in the next meeting also the quorum was not present. You are required to answer the following questions based on the above facts: a. Is the deal with media house a proper deal as per the companies Act? 5 b. What will be the status of the adjourned meeting? 5 c. Will the alteration in the MOA will make any change to the status of deal? 5

DECEMBER 2010 EXAMINATION GM06

BUSINESS LAW AND CORPORATE GOVERNANCE
Section A 1. Explain the rules under the Indian Contract Act, 1872 as regards to time and place for the performance of the promise? (20) 2. Father promised to pay his son a sum of Rs. One lakh if the son passed I.A.S. examination in the first attempt. The son passed the examination in the first attempt, but father failed to pay the amount as promised. Son files a suit for recovery of the amount. State along with reasons whether son can recover the amount under the Indian Contract Act, 1872. (20) 3. Who is an Unpaid Seller? When can such an unpaid seller exercise his Right of Lien against the goods? Explain the rules for exercising the right of lien by an unpaid seller? (20) 4. Define cheque, under the Negotiable Instrument Act, 1881. What are the differences between a cheque and a bill of exchange? (20) 5. (i) What is the meaning of warranty? Briefly explain the kinds of implied warranties under the Act. (10) (ii) Describe the need and rationality for Corporate Governance. (10) 6. What do you understand by separate legal entity of the company? State the circumstances where the separate legal entity of the company can be ignored and liability can be imposed on the persons regulating the affairs of the company? (20) 7. What are the different types of meeting, under companies Act, 1956? Explain the statutory meeting. (20) 8. CASE STUDY An organization X involved in jewellery business has obtained a jewellery export order. In order to execute the order, X agrees to buy jewellery from a jeweller Y with the condition that certain jewellery is to be delivered to him within two months time. In the meantime, the government enacts a law on gold control and prohibits dealings in gold. When the time for delivery of the jewellery comes the jeweller Y refuses to deliver the same. As a result X is not able to meet its export commitment/deadline. The export order is cancelled and losses are suffered. X files a case against jeweller Y for breach of contract and claims damages for the losses suffered by him as a result of inability to execute the export contract. QUESTIONS : 8. (i) What are the options available to X ? Would X succeed in his litigation against Y? 8. (ii) Under which Doctrine under the Contract Act, 1872 can Y take relief?

8. (iii) Explain in detail the Doctrine and its implications? (7+6+7) DECEMBER 2009 EXAMINATION

BUSINESS LAW & CORPORATE GOVERNANCE

1. (a) What are the essential requirements of consideration under Indian Contract Act, 1872 and what are the exceptions to rule No consideration, No Contract? (12) (b) Who is sub agent and differentiate with substitute agent? (8) 2. (a) `A purchased rice from `B, being the whole contents of a godown. `A had paid earnest money and had taken delivery of a part of rice. Before the rest could be taken away, it was destroyed by fire. Discuss who shall bear the loss vis--vis the rights of an unpaid seller. (10) (b) No one can pass a better title than he has Nemo dat quod non habet. Discuss (10) 3. (a) What is the doctrine caveat emptor, discuss briefly. Can a buyer reject goods where he failed to specify the same to the seller? (6+4) (b) What is guarantee and warranty are they bipartite or tripartite agreements? Explain. (10) 4. (a) What is corporate veil and when it is lifted? (12) (b) What are the major differences between a private company and a public company? (8) 5. Who is a Director of a company, what are the qualifications and liabilities of a Director of company? (4+8+8) 6. What is a winding up of a company and what are the circumstances of winding up of company by the Court? (10+10) 7. What are the essential characteristics of a negotiable instrument? Who is a holder in due course of a negotiable instrument and what are the privileges of holder in due course. Cite five of them? (10+5+5) 8. CASE STUDY Haryana Oil Mills is engaged in the business of manufacture of Vanaspati. For their raw material, they are allocated vegetable oil by Govt. of India upto certain percentage. Oil is supplied by STC, which imports the same from foreign countries. The Mill was allocated 300 MT of oil at the issue price of Rs 8000 PMT. The mill paid the entire price for Rs 300 MT and were issued 3 separate delivery orders dated 15.1.1993, 15.2.1993 and 15.3.1993. All these orders had an endorsement regarding price to be charged as on date of delivery after the measurements are taken, since the oil was to be taken out of large containers and then supplied to buyer. The mill had taken delivery of 200 MT. But when they went to take delivery of third installment by then prices had been raised to Rs 10,000 PMT. STC claimed difference in price. Haryana Oil Mills refused to pay as they pleaded that they had already made the full payment for 300 MT and are not liable to pay enhanced price. QUESTIONS : 8 (i) Discuss the rights and obligations of STC and Haryana Oil Mills. 8 (ii) Whether STC could refuse to deliver remaining 100 MT vegetable oil at pre-revised price?

8 (iii) What would be the position if there had been no endorsement? Illustrate your answer with case law. (8+7+5)

JUNE 2009 EXAMINATION

BUSINESS LAWS AND CORPORATE GOVERNANCE
1. (a) What are the kinds of offer? What are the essentials of a valid offer? (b) What are the essentials of a free concept? (10) (10)

2. (a) Explain the legal position of minors agreement. (10) (b) What is Doctrine of Restitution? Is the doctrine of restitution applicable in case of minor? Explain with a case example. (10) 3. (a) Discuss the rights of surety against Debtor, Creditor and Co-Sureties. (b) Under what circumstances surety is discharged? (12) (8)

4. (a) What is the meaning of contract of indemnity? Is Life Insurance contract is the contract of Indemnity? (10) (b) What are the modes of creating an agency? (10) 5. (a) Explain the terms conditions and warranties and explain implied conditions. (12) (b) Pledge by non-owners. (8) 6. (a) Explain the meaning and definition of a negotiable instrument and essential elements of Negotiable Instruments. (10) (b) What is AGM and procedure for holding AGM? (10) 7. What is Corporate Governance? Explain the relevance of Corporate Governance in the light of Satyam Scam. (20) 8. CASE STUDY Solomon carried on business as a leather merchant. He sold his business for a sum of 30,000 to a company formed by him along with wife, a daughter and four sons. The purchase consideration was satisfied by allotment of 20,000 shares of 1 each and issue of debenture worth 10,000 secured by floating charge on the companys assets in favour of Mr. Solomon. All other shareholders subscribed for one share of 1 each. Mr. Solomon was the managing director of the company. The company almost immediately ran into difficulties and eventually became insolvent and winding up commenced. At the time of winding up, the total assets of the company amounted to 6,050; its liabilities were 10,000 secured by debentures issued to Mr. Solomon and 8,500 owing to unsecured trade creditors. The unsecured sundry creditors claimed the whole of the companys assets viz. 6,050 on the ground that the company was a mere alias or agent for Solomon. QUESTION: Decide on the claim of sundry creditors and explain the one-man company. (20)

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DECEMBER 2008 EXAMINATION

BUSSINESS LAW& CORPORATE GOVERNANCE
1. (a) (b) 2. (a) (b) Distinguish between a Holder and a holder in due course. State some of the important privileges of a holder in due course? Explain the personal liability of an agent? (12+8) What is the doctrine of caveat emptor , discuss its exceptions? What is doctrine of indoor management, explain with the exception? (10+10)

3. (a) Impossibility of performance is, as a rule, not an excuse for non performance of contract. Discuss. (b) What is corporate governance? Discuss its role in India in the light of clause 49 of the listing agreement? Is there any compulsion for the private companies to apply for the corporate governance? (10+10) 4. (a) A sells a horse to B. when B goes with the horse he is arrested by the police on the charge of keeping stolen property as the horse belongs to C. Can B sue A and if so, on what basis and what damages can he recover. (b) Discuss the procedure in case of dishonor of cheque for want of Funds and what will be the liability of a director of a company, whose cheque is dishonored? (10+10) 5. (a) What is pledge by non owners? (b) A drew cheques in favour of B. As clerk forged Bs endorsement and negotiated the cheques to C, who took them in good faith and for value. C received the payment of the cheque. A claims to recover the amount form C. will he succeed? (10+10) 6. (a) What is the difference between condition and warranty? (b) B owes to C a debt guaranteed by A. The debt becomes payable. C does not sue B for a year after the debt has become payable. Is A discharged from his surety ship? (10+10) 7. (a) What are the provisions related to holding an AGM (Annual General Meeting) of a public ltd. company? (b) Explain the term Proxy and Agenda according to companies Act? (12+8) 8. CASE STUDY

Aman, a minor, falsely representing himself to be of age of majority, enters into an agreement to sell his house to Bhola and received an advance of Rs. 80,000. He has used this sum, for buying a car for Rs. 35,000 and spends the rest on a pleasure trip to Europe. After the trip Bhola has sued him for the house but he is denied by the court by saying that an agreement with minor is void. After the Aman has attained majority, Bhola sues him for the conveyance of the property or, in the alternative, for the refund of the amount of Rs. 1,00,000 including damages. How would you decide the following points: (a) (b) Can Bhola recover the amount of Rs. 80000 or car? Can Bhola receive the house after Aman has attained majority? (c) What will be the case if it is decided under the provisions of contingent contract?

(d) What will be your answer if Bhola is minor and Aman is major?(5+5+5+5)

JUNE 2008 EXAMINATION

BUSINESS LAW & CORPORATE GOVERNANCE 1. a) Explain the difference between void agreement and voidable contract. (10+10) b) Explain the difference between Memorandum of Association and Article of association 2. Explain the meaning of free consent. What are the presumptions of undue influence as regards persons in particular relationships? (20) 3. Is guarantee a contract? Is there a need for direct consideration between surety and creditor? What are the rights of surety against the principal debtor? Explain with examples. (20) 4. a) Define Bailment. What are essential characteristics of bailment? b) Discuss the duties of a bailor. (10+10) 5. Who is an unpaid seller? What are rights available to unpaid seller against buyer personally? In what cases does an unpaid seller lose his lien? (20) 6. a) What are the liabilities of Directors of a Company? b) Under what circumstances a company may be wound up by the Court? (10+10) 7. a) Explain the difference between Sale and Agreement to Sell. b. What are the Implied Warranties? Explain with examples. (10+10) SECTION-B 8. CASE STUDY D, bought tyres from Dunlop Company and sold them to S, a sub-dealer who agreed with D not to sell below Dunlops list price and to pay to Dunlop Company Rs. 75 as damages on every tyre he undersold. S sold two tyres at less than the list price and thereon Dunlop Company sued him for the breach. Will Dunlop Company succeeds? (20) ***************

DECEMBER 2007 EXAMINATION

GM 06: BUSINESS LAW AND CORPORATE GOVERNANCE
Section - A 1. Briefly discuss the followings: a) Rights of an unpaid seller under the Sales of Goods Act b) Essential characteristics of a contract of sale of goods

(10+10)

2. a) What is consent and when is it said to be free explain with the help of examples? (10) b) Explain in brief the modes by which an agency may be created and terminated? (10) 3. a) What is a negotiable instrument? Give its characteristics. Also explain non negotiable instruments? (10) b) What is dishonour of a negotiable instrument and what is the procedure and remedies available to aggrieved party? (10) 4. a) What do you understand by the Doctrine of supervening impossibility? Does this excuse the promisee from performing the contract in all cases? (12) b) What is contract of indemnity and differentiate with the contract of bailment? (8) 5. Briefly state the provision of the companies Act, 1956, regarding the mode of appointment of the directors of a company and how a director can be removed from his office? (20) 6. What is the Memorandum of Association? Give the procedure regarding alteration to registered office clause and object clause? How does it differ from Articles of Association? (5+10+5) 7. a) Explain the concept of corporate governance in the light of Clause 49 of Listing agreement? (10) b) Discuss five major recommendations for desirable code of conduct for companies? (10) Section B 8. CASE STUDY For construction of a town hall at Delhi the Commissioner of the Delhi Municipality Mr. Khanna set out to obtain funds by public subscription. A trust was formed by Commissioner including Ram who was the vice chairman of the municipality; Lal was a subscriber for Rs.100000 and had signed his name in the subscription book. On the faith of this, Ram has entered into contract with contractor for building the hall. However Lal refused to pay on the ground that there was no consideration for his promise. Questions: a) Advice Mr. Ram as to the fact whether he will succeed or not? b) Will you answer be different if Ram has not incurred any expenditure in this regard? c) What will be your answer if it is a religious declaration made by Mr. Lal? Illustrate your answers with the help of leading cases and examples. (8+7+5)

JUNE 2007 EXAMINATION

GM06: BUSINESS LAW AND CORPORATE GOVERNANCE
SECTION A 1. (a) Explain the meaning of coercion. Does threat to commit suicide amount to coercion? What is the effect of coercion on the validity of contract? (10) (b) Explain the meaning of undue influence. What are the presumptions of undue influence as regards persons in particular relationship? (10)

2.

(a) Consideration can be past, present and future Explain (10) (b) General rule is no consideration, no contract. What are the exceptions to this rule? (10) (10) (10) (10) (10) (10)

(10) 3. (a) Discuss the rights of surety. (b) Under what circumstances a surety is discharged? 4. (a) What are the duties of a bailor? (b) What are the duties of a bailee?

5. Explain the following: (a) Warranty of disclosing the dangerous nature of goods (b) Doctrine of Caveat Emptor

6 (a) What is a negotiable instrument under the Negotiable Instrument Act? What are the special characteristics of a negotiable instrument? (10) (b) What the circumstances in which the drawer of a cheque shall be deemed to have committed an offence? (10) 7. (a) What is corporate governance? Explain regulatory framework of corporate governance. (b) What are the recommendations of Cadbury Committee? (10+10) SECTION B 8. Case Study A company with the objects, namely (a) to make and sell or lend on hire railway carriages and wagons and all kinds of railway plant, fittings, machinery and rolling stock; (b) to carry on the business of mechanical engineers and general contractors; (c) to purchase; lease, work and sell, mines, minerals, land and buildings; (d) to purchase and sell as merchants timber, coal, metals or other materials. The company contracted to finance the construction of a railway bridge in Belgium. There was evidence that the agreement had been ratified by all the members. Later, the company repudiated the agreement and was sued for breach of contract. In its defence, the company contended its lack of capacity to enter into a contract which was outside the scope of its objects clause. The other party brought an action for damages for breach of contract. His contentions were that the contract in question came well within the meaning of the words general contractors and, was, therefore, within the powers of the company and secondly, that the contract was ratified by the majority of the shareholders. Discuss whether ratification of the contract is tenable under law. (20)

June 2006 EXAMINATION

GM 06: Business Law and Corporate Governance.
I 1. What are the characteristics of a "Voidable Contract"? (20 Marks) I 2. Explain the difference between 'Sale' and 'Bailment '. Discuss the rights and duties of a Bailee. (20 Marks) I 3. What are the Rights and Duties of an 'Agent' ? (20 Marks) I 4. Explain the "Doctrine of Caveat Emptor" and exceptions to this doctrine? (20 Marks) Section -B 5. What is a 'Negotiable Instrument '? What are its essential elements? (20 Marks)

7. a. Differentiate between "Sale" and "Agreement to Self'. (10 Marks) b. Amar agrees to sell certain goods to Akbar. The goods are on their way from London to Mumbai in a ship. The ownership in the goods will pass to the buyer when the goods come and the agreement is subject to the condition that the ship arrives at port with the goods. Explain whether the above example is of 'Sale' or "Agreement to Sell' and why? (10 Marks) 7. S, a singer, contracts with M, the manager of a theatre, to sing at the latter's theatre for two evenings in every week during the next two months. M engages to pay her Rs. 300/- for each evening's performance. On the seventh evening, S willfully absents herself from the theatre. M, in consequence, wants to rescind the contract and claim compensation for the loss suffered by him through the non-fulfillment of the contract by S. Decide giving reasons. (20 Marks) 8. Define 'Articles of Association' and what is the subject matter of' AOA'? (20 Marks) DECEMBER 2006 EXAMINATION BUSINESS LAW & CORPORATE GOVERNANCE R Ltd. was importing electric iron made by P Ltd. from US, sold under Px brand name. The electric iron was being sold to customers through a network of retailers. Raman bought an electric iron from one of the retailers, Ashoka Electricals. Raman gifted the iron to a new colleague at work, Sumit. While Sumit was using it the very first time, there was a spark and fire from the iron. Sumit sustained injuries. His medical reatment coast him Rs. 12,000. His new jacket that he was ironing, caught fire and was completely damaged. The jacket had cost him Rs. 6,000. Sumit is agitated with the defective and poor quality of the product. Sumit wants to claim Rs. 12,000 for medical bills, Rs. 6,000 for damage to his jacket and Rs. 1,100 that he had spent in buying the iron. Answer the following questions based on the above transactions. (a) What claims can Suniit make on R Ltd.? (b) What claims can Sumit make onAshoka Electricals? (c) What claims can Sumit make on Raman? (d) What claims can Raman make on R Ltd. and Ashoka Electricals? (20) 2. What are the contents of the memorandum of association of a company? Describe the grounds on which objects clause of the memorandum can be altered? Also point out the procedure of doing so. (20) 3. 'Property passes when intended to pass'. Explain the provisions and illustrate with a case. (20) 4. A found a lost bearer instrument and passes it on to a holder in due course, who received the payment. What is the liability of the payer? Does the true owner have any

rights? If yes, on whom? What are the rights of the holder in due course? Will your answer be different if the finder transfers an order instrument by making a forged endorsement? (20) 5. Elaborate the Cll recommendation on Corporate Governance. (20) 6. 7. (a) Distinguish essential features of the doctrine of ultra vires. What are the duties and liabilities of Directors? Are these applicable on (b) Discuss between unpaid seller's right oflien and right of stoppage in transit. (20) Independent Directors? (20) Case Study 8. I-jet Ltd. invited tenders for building a cellular phone network. Only the applicants who fulfilled a minimum criterion were eligible to apply. Towards this, the potential parties were to fIrst furnish their balance sheet for the past fIve years, and details of projects successfully completed. The successful parties were issued application fonn for a price ofRs. 20,000. illD Constructions Ltd. was one of the seven fInns which was successful in getting an application fonn. It made an application. I-jet infonned the seven parties ofthe value of each bid. IBD had bid the least. Thereafter, illD did not hear anything from I-jet. It worte to I-jet and was infonned that I-jet was facing difficulties raising funds for the project. But the real reason was that the I -jet was negotiating with a fInn which had not even bid for the project. The negotiations did not work out. A year later, illD saw that the same tender was being called again. IBD is aggrieved and contests that it has a right to be given the contract. Decide. (20)