This Paper has 30 answerable questions with 0 answered.
| Roll No…………… | |
| Time allowed : 3 hours | Maximum marks : 100 |
| Total number of questions : 8 | Total number of printed pages : 4 |
| Part—A |
| (Answer Question No.1 which is compulsory and any two of the rest from this part.) |
| Marks |
| 1. | (a) | Honest had issued a cheque dated 1st July, 2003 for Rs. 10,000 to Grace & Co. for consideration received. The cheque was presented through the banker of Grace rd & Co. on February, 2004 and it was returned with nd remarks "A/c closed on July, 2003". The company secretary of Grace & Co. intends to initiate the process for filing criminal complaint against Honest under the Negotiable Instruments Act, 1881 (as amended) relating to bouncing of cheques.
After discussing the relevant provisions of law relating to bouncing of cheques and the steps required to be taken for filing criminal complaint under the provisions of the Negotiable Instruments Act, 1881 (as amended), decide whether Grace & Co. would be successful in criminal proceedings under the said Act for the recovery of cheque amount. Give reasons in support of your decision. | 8 | (0) |
| | (b) | A cheque drawn by Ajay on their joint account in the names of Ajay and Bijoy, operated by "Either or Survivor", is presented through clearing for payment. Simultaneously, a letter to stop payment issued by Bijoy is also received by the bank. Should the bank honour the cheque ? Give your decision with reasons. | 2 | (0) |
| | (c) | A bank disbursed a loan to its customer after obtaining a demand promissory note executed by its customer. It is later on noticed that the promissory note is not stamped. The bank considers two alternatives to remedy the situation.
First, to affix the necessary stamp duty on the note which has already been executed, and the second to get a fresh promissory note duly stamped. The bank is advised against the second alternative on the ground that as the loan has already been disbursed, there would be no consideration to support the fresh promissory note. Discuss both the alternatives with reference to relevant statutory provisions and advise as to which alternative should the bank adopt and why ? | 4 | (0) |
| | (d) | Ram & Co. sold goods for Rs.20 lakh to Shyam & Sons on 90–day D/A basis. The drawee accepted the bill and got it discounted by the drawer (Ram & Co.) with their bankers. One month after the date of acceptance of the bill, Shyam & Sons (the drawee) returned the entire goods to the drawer stating that they were of low quality and thought that they were no more liable on the accepted bill. When the bill remained unpaid, the bank demanded the bill amount from the drawee and filed a suit on the drawer and the drawee. In the light of above, answer the following : | 2each | |
| | | (i) | Was the bank justified in instituting a suit for recovery against the drawee since it is already aware about the return of goods ? | | (0) |
| | | (ii) | Will the defense of the drawee be acceptable to the court ? | | (0) |
| | | (iii) | What remedy lies in the hands of the drawee ? | | (0) |
| 2. | (a) | State the rationale of giving complete freedom to commercial banks to prescribe their own interest rates for deposits as well as loans and advances. | 8 | (0) |
| | (b) | "Development financial institutions would convert ultimately into banks." Comment. | 7 | (0) |
| 3. | (a) | Discuss the role of NABARD in rural credit. | 8 | (0) |
| | (b) | "Technology has changed the face of banking in India."Elucidate this statement and mention recent innovations in banking sector in India. | 7 | (0) |
| 4. | Attempt any three of the following : | 5each | |
| | (i) | "The effect of inclusion of words ‘not negotiable’ while crossing a cheque will not render the cheque non–transferable." Comment. | | (0) |
| | (ii) | "Crossed cheques are not paid in cash across the counter." Discuss. | | (0) |
| | (iii) | Distinguish between revocable and irrevocable letter of credit. | | (0) |
| | (iv) | "The banks can off–set debit balance in a partnership account against credit balance in partners’ individual accounts." Comment. | | (0) |
Part—B
(Answer Question No.5 which is compulsory and any two of the rest from this part.) |
| 5. | (a) | Fill in the blanks (Attempt any four) : | 1each | |
| | | (i) | Catastrophic losses are difficult to predict in advance because they occur so _________. | | (0) |
| | | (ii) | Uncertainty based on a person’s mental condition orstate of mind is termed as ________. | | (0) |
| | | (iii) | In the case of an insurance contract, the duty of _________ rests on both parties, the insured and the insurer. | | (0) |
| | | (iv) | When the insured pays the __________ and the insurer accepts the _________ the contract of insurance is conducted. | | (0) |
| | | (v) | A quality in goods that produces damagee to them by its own action without the assignment of an outside agency is termed as __________. | | (0) |
| | (b) | State the documents used in ‘life insurance’ transactions. | 6 | (0) |
| | (c) | State the basic principles of law of insurance. | 6 | (0) |
| | (d) | State with reasons whether the following statements are true or false (Attempt any two) : | 2each | |
| | | (i) | The term self–insurance is widely used by risk managers in their risk management programmes. | | (0) |
| | | (ii) | A policy can be mortgaged by just placing it with another person. | | (0) |
| | | (iii) | Fire insurance policies cannot be issued on reinstatement value basis. | | (0) |
| 6. | (a) | "Insurance plays a key role in the economic development of a country." Do you subscribe to this view ? Elaborate | 8 | (0) |
| | (b) | Explain the process of risk–management in an organisation | 7 | (0) |
| 7. | (a) | Describe the role of ‘insurance ombudsman’ in complaints redressal relating to claims. | 8 | (0) |
| | (b) | How does the Export Credit Guarantee Corporation of India (ECGC) help exporters ? What policies are available from ECGC ? . | 7 | (0) |
| 8. | (a) | Insurance sector in India has recently been opened up. Discuss its likely advantages to insurance business in India. | 8 | (0) |
| | (b) | Explain the licensing procedure for surveyorship. | 7 | (0) |
