| 1. | Answer any four of the following: | | |
| | (a) | State with reasons whether there can be an agency by ratification in the following cases: | 5 | |
| | | (i) | M, without authority, buys goods for N, afterwards N sells them to X on his own account. | | (0) |
| | | (ii) | X buys 20 bags of rice for himself and 20 bags for his friend Y. X informs Y of his act. The trader delivers the bags at Y’s house. Y consumes the rice. | | (0) |
| | | (iii) | X, without Y’s authority, lends Y’s money to Z. Afterwards; Y accepts interest on the money from Z. | | (0) |
| | | (iv) | A newly formed company adopts an act done in its name before its incorporation. | | (0) |
| | | (v) | X holds a lease from Y, terminable on three months’ notice. Z, an unauthorized person, gives a notice of termination to X. Subsequently, Y ratifies the notice given by Z. | | (0) |
| | (b) | There was a contract between X and Y for the sale of haystack on X’s (seller’s) land, on a certain day, the price to be paid by the same day of the next month. The hay was destroyed by fire. Decide in the light of the provisions of the Sale of Goods Act, 1930, as to who is liable for the loss. | 5 | (0) |
| | (c) | X, Y, and Z are partners in a business. Z is a sleeping partner. P lends Rs.20, 000 to the firm, after Z’s retirement from the firm without a public notice. X and Y become insolvent and pay only Rs.10, 000. Can P hold Z liable for the balance under the provisions of the Indian Partnership Act, 1932? | 5 | (0) |
| | (d) | M, the holder of a bill, endorses it "without recourse" to N. N endorses it to P, P to Q, Q to R and R endorses it again to M. Can M recover the amount of the bill from N, P, Q and R, or any of them? Discuss with reference to the provisions of the Negotiable Instruments Act, 1881. | 5 | (0) |
| | (e) | Ajit, who is casual employee of My Sugar Company, actually worked for 26 days in the year. However, he was absent due to temporary disablement caused by an accident arising out of and in the course of his employment, for 8 days and had been laid off for 3 days as per the service agreement. Is he eligible for bonus under the Payment of Bonus Act, 1965? | 5 | (0) |
| | (f) | Can a person apply for review of any order passed by the appropriate authority or any official under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952? If so, state the provisions. | 5 | (0) |
| 2. | (a) | X and Y were two organizations trading in wheat of ‘Popular brand’ in Uttar Pradesh. X realizes that the wheat business is high yielding. To expand his business X offered Y a sum of Rupees ten lac on the condition that Y shall not sell ‘popular brand’ wheat in Uttar Pradesh. Accordingly Y stopped selling ‘Popular brand’ wheat in Uttar Pradesh. X failed in making the promised payment to Y. Y filed a suit against X for the non–fulfillment of promise. Is the suit maintainable? Decide with reference to the provisions of the Indian Contract Act, 1872. | 5 | (0) |
| | (b) | A limited cooperative society earned a net profit of Rs.2, 00,000 in a year. The members want the profit to be divided among themselves equally. The society has also divisible profit for the past year amounting to Rs.20, 000. State, how the profit will be divided among the members. Decide with reference to the provisions of the Co–operative Societies Act, 1912. | 5 | (0) |
| 3. | (a) | M delivers to N, a carrier, some explosives in a case without disclosing this fact to N. N does not take any extraordinary care required for such type of goods. The case explodes and as a result, a porter is injured and some other goods are damageed. Discuss the liability of M in the light of the provisions of the Indian Contract Act, 1872. | 5 | (0) |
| | (b) | A Cheque is drawn "payable to N or order". It is stolen and N’s endorsement is forged. The banker pays the cheque in due course. Is the banker discharged from liability? Would it make any difference if the drawers’ signature were forged? Discuss with reference to the provisions of the Negotiable Instruments Act, 1881. | 5 | (0) |
| 4. | (a) | Goods are delivered by M to N on "sale or return". They are further delivered by N to P and then by P to Q on similar terms, but are stolen while in the custody of Q. Is N liable to M for the loss? If not, who shall suffer the loss? Decide referring to the provisions of the Sale of Goods Act, 1930. | 5 | (0) |
| | (b) | Karthik, a member of a Multi–state Cooperative Society, applied to the society for a loan on the security of his shares in the society. Explain with reference to the provisions of the Multi–state Cooperative Societies Act, 2002: | (i) | whether the Multi–State Cooperative Society can give him the loan; | | (ii) | instead of security of his own shares, if one of his relatives offers mortgage of his property; | | (iii) | if Karthik had been a depositor, would the Multi–state Cooperative Society provide him the loan on mortgage of such deposit? |
| 5 | (0) |
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| 5. | (a) | Ram, an employee of Steel Castings Ltd., destroyed some machines in the company premises while under the influence of liquor, due to which the company incurred substantial loss. He was found guilty and punished under the Industrial Disputes Act, 1947. When the company paid bonus in that year to the employees, it deducted the amount from the balance payable to Ram, and he did not get any bonus in that year. Did the company violate any provisions of the Payment of Bonus Act, 1965, in not paying bonus to Ram? | 5 | (0) |
| | (b) | M/s Hitech Ltd. has been regularly depositing the provident fund contributions to the government. Owing to adverse market conditions, the company suffered loss for the past two years. The management is considering the reduction of salary of the employees to reduce the company’s contribution to Provident Fund, and instead, to pay compensatory allowance, so that the employees’ pay packet remains the same. Explain in terms of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952, whether the company can effect such reduction. | 5 | (0) |
| 6. | (a) | X and Y are partners of a financial firm Trust Investments. Z pledged gold ornaments worth Rupees fifty thousand for securing a loan of Rupees thirty thousand to the firm. Y a partner of the firm disposed of the ornaments for construction of his house. Z demanded return of the jewellery on repayment of the loan. Is the firm liable to Z? Decide with reference to the provisions of the Indian Partnership Act, 1932. | 5 | (0) |
| | (b) | Examine the entitlement of the following persons to receive bonus under the Payment of Bonus Act, 1965: | 5 | |
| | | (i) | Alok, employed in a drug company, is dismissed from service but subsequently reinstated with back wages. | | (0) |
| | | (ii) | Vikram, who is dismissed from service for violent behaviour on the premises of the establishment, causing loss to his employer. | | (0) |
| | | (iii) | Shekhar, who is a part–time employee of Suraj Mills Ltd. | | (0) |
| | | (iv) | Krishna, who is an employee of the Reserve Bank of India. | | (0) |
| | | (v) | Kishan, who is an employee of the Life Insurance Corporation of India. | | (0) |
| 7. | Answer any four of the following. | | |
| | (a) | An association of thirteen members starts a banking business without being registered. Five members retire and thereafter a suit is instituted by one of the continuing members for the partition of assets of the business. Is the suit valid? Decide with reference to the provisions of the Companies Act, 1956. | 5 | (0) |
| | (b) | The objects clause of the memorandum of a company empowers it to carry on distillery business and any other business that is allied to it. The company wants to alter memorandum so as to include the cinema business in its objects clause. Advise the company. | 5 | (0) |
| | (c) | A limited company issued certain number of fully paid shares to a subscriber to the memorandum on the basis of a promissory note executed by him as consideration towards the shares. Since no money was paid towards the allotment, the company now (after 5 years from the date of allotment) wants to forfeit those shares and re-issue such forfeited shares. Can the company do so? Decide with reference to the provisions of the Companies Act, 1956. | 5 | (0) |
| | (d) | In a private limited company it is discovered that there are, in fact, 55 members. On an enquiry, it is ascertained that 7 of such members had 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? | 5 | (0) |
| | (e) | A company held its annual general meeting on 26th April, 2007. The next annual general meeting was held on 29th September, 2008. The registrar of companies raised objection to it as it violates the provisions of the Companies Act, 1956. The company contended that it held the annual general meeting within 6 months from the date of closing of the financial year in respect of which the annual accounts were adopted. Advise the company. | 5 | (0) |
| 8. | (a) | A, B and C are joint shareholders of 1,000 equity shares of Key Information Ltd. A and B died. C the surviving member received the notice for the annual general meeting of the company in the name of A on 4.7.2008 for the AGM to be held on 25.7.2008. He contends that the proceedings of AGM are invalid. Explain with reference to the provisions of the Companies Act, 1956, the defense s available to the Company. | 5 | (0) |
| | (b) | Alpha Co. Ltd. holds shares in Beta Co. Ltd. Alpha Co. Ltd. passed a resolution authorizing Mr. M and Mr. Q to jointly act as representatives of the Company at the annual general meeting of Beta Co Ltd., and to exercise all rights and powers including the right to vote on behalf of the Company as a member. Can a Company appoint two representatives to attend a annual general meeting under the Companies Act, 1956? Decide. | 5 | (0) |
| 9. | (a) | The Board of Directors of a Company recommended dividend @ 25% on the equity shares of the Company, but the shareholders, at the annual general meeting, considering the high profit margin, passed a resolution for payment of dividend @ 35% on the equity shares of the Company. Give your comments. | 5 | (0) |
| | (b) | A letter is received from a nominee of a sole shareholder for registering his name in the register of members. Explain the provisions of the Companies Act, 1956 regarding the steps to be taken by the nominee for getting himself registered as a shareholder. | 5 | (0) |
| 10. | (a) | State whether it is possible for a single member to constitute a meeting of the Company. | 5 | (0) |
| | (b) | Gamma Co. Ltd. was registered on 15.6.2008 and entered into a contract on 20.6.2008 with Fancy Furnitures for the supply of furniture worth Rupees three lac on credit. Accordingly, Fancy Furnitures supplied the goods on 22.6.2008. The Company went into liquidation on 25.6.2008. The certificate of commencement of business was issued on 30.6.2008. Whether the furniture supplier can recover the amount due? Decide with reference to the provisions of the Companies Act, 1956. | 5 | (0) |
