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Questions set at CA PE-II - The paper is 'Corporate & Other Laws'. The syllabus became effective from November, 2002. CA PE-II – November 2007 - Questions 1 and 7 are compulsory. Candidates are required to attempt four questions out of questions 2, 3, 4, 5 and 6 and two questions out of questions 8, 9 and 10. Q
1 Answer any four of the following : (a) ‘X’ agreed to become an
assistant for 5 years to ‘Y’ who was a Doctor practicing at Ludhiana.
It was also agreed that during the term of agreement ‘X’ will not
practice on his own account in Ludhiana. At the end of one year, ‘X’
left the assistantship of ‘Y’ and began to practice on his own
account. Referring to the provisions of the Indian Contract Act, 1872,
decide whether ‘X’ could be restrained from doing so? (b) Aman
contracted to erect machinery on Sapan’s premises on the condition
that the price shall be paid on completion of work. During the progress
of work the premises and machinery were destroyed by an accidental fire.
Referring to the provisions of the Sale of Goods Act, 1930, decide
whether the parties are bound to perform their promises and can Aman
recover the price of the work actually done? (c) Abhinav buys certain
goods worth Rs. 50,000 from an unregistered firm Ram & Sons. Ram
& Sons has to pay Rs. 60,000 to Abhinav for the goods purchased by
the firm in the past. Referring to the provisions of the Indian
Partnership Act, 1932 decide whether Ram & Sons can compel Abhinav
to accept Rs. 10,000 i.e. the difference between Rs. 60,000 and 50,000
as the final settlement? (d) What are the essential elements of
“Promissory note” under the Negotiable Instruments Act, 1881?
Whether the following notes may be considered as valid Promissory notes:
(i) “I promise to pay Rs. 5,000 or 7,000 to Mr. Ram.” (ii) I promise
to pay to Mohan Rs. 500, if he secures 60% marks in the examination
(iii) I promise to pay Rs. 3,000 to Ravi after 15 days of the death of A
(e) Decide with reasons in the light of the Payment of Bonus Act, 1965
whether the following persons are entitled for bonus. : (i) A University
teacher (ii) An employee of the ‘NABARD’ (iii) A reinstated employee
without wages for the period of dismissal (iv) A retrenched employee who
worked for 45 days in a year on a salary of Rs. 4,000 per month (v) An
apprentice (f) Is the payment of provident fund contribution a
preferential payment in case of the employer being insolvent under the
Employees Provident Funds and Miscellaneous Provisions Act, 1952? (5 x 4
= 20 marks) Q
2 (a) X transferred his house to his daughter M by way of gift. The gift
deed, executed by X, contained a direction that M shall pay a sum of Rs.
5,000 per month to N (the sister of the executant). Consequently M
executed an instrument in favour of N agreeing to pay the said sum.
Afterwards, M refused to pay the sum to N saying that she is not liable
to N because no consideration had moved from her. Decide with reasons
under the provisions of the Indian Contract Act, 1872 whether M is
liable to pay the said sum to N. (b) Decide, under the Cooperative
Societies Act, 1912, whether a society can transfer the share or
interest of a member on his death. If yes, to what extent? Whether the
estate of a deceased member can be appropriated to pay-off the debts of
the society? (5+5 = 10 marks) Q
3 (a) X,Y, and Z jointly borrowed Rs. 50,000 from A. The whole amount
was paid to A by Y. Decide in the light of the Indian Contract Act, 1872
whether : (i) Y can recover the contribution form X and Z, (ii) legal
representatives of X are liable in case of death of X (iii) Y can
recover the contribution from the assets, in case Z becomes insolvent
(b) “Implied authority of a partner can be extended or restricted.”
Discuss the above statement in the light of the provisions of the Indian
Partnership Act, 1932. How far are third parties affected by
restrictions placed on such implied authority? (5+5 = 10 marks) Q
4 (a) Under which circumstances can an unpaid seller exercise his right
of lien? Distinguish between right of lien and right of stoppage of
goods in transit, under the Sale of Goods Act, 1930. (b) Who appoints
the liquidator for winding up of a Multi-State Cooperative Society?
Referring the provisions of the Multi-State Cooperative Societies Act,
1984, point out any six powers of the liquidator (5+5 = 10 marks) Q
5 (a) What do you understand by “Material alteration” under the
Negotiable Instruments Act, 1881? State whether the following
alterations are material alterations under the Negotiable Instruments
Act, 1881: (i) The holder of the bill inserts the word “or order” in
the bill, (ii) The holder of the bearer cheque converts it into account
payee cheque (iii) A bill payable to ‘X’ is converted into a bill
payable to X and Y. (b) Explain the salient features of the
‘Employee’s Deposits Linked Insurance Scheme’ as provided under
the Employees’ Provident Fund and Miscellaneous
Provisions Act, 1952 (5+5
= 10 marks) Q
6 (a) A is an employee of a company. The amount of the bonus payable to
A during the year 2006-07 is Rs. 10,000, but the company paid him Rs.
7,000 only and a sum of Rs. 3,000 was deducted from bonus against the
loss suffered by the company due to misconduct of A during the same
accounting year. A files a suit against the company for recovery of the
deducted amount. Decide whether A would be given any relief by the court
under the provisions of the Payment of Bonus Act, 1956? What will be
your answer, if the losses are related to the accounting year 2005-06?
(b) An existing Multi-state Cooperative Society desires to change its
registered office from Mumbai to Bhopal. Advice as to what steps are
required to be taken for the said change under the Multi-state
Cooperative Societies Act, 2002? (5+5 = 10 marks) Q
7 Answer any four of the following : (a) A limited company is formed
with its Articles stating that one Mr. X shall be the solicitor for the
company, and that he shall not be removed except on the ground of
misconduct. Can the company remove Mr. X from the position of solicitor
even though he is not guilty of misconduct? (b) For a special resolution in Company’s general meeting,
10 voted in favour, 2 against and 4 abstained. The chairman declared the
resolution as passed. Is it a valid resolution as per the provisions of
the Companies Act, 1956? (c) While sanctioning working capital limit of
a company, the rate of interest has been fixed at a specified percentage
above the bank rate as notified by the Reserve Bank of India. There was
a change in the interest rate due to RBI notification issued later. The
bank insisted on filing a return of modification of charges. Is the
stand of the bank correct? Discuss this in the light of the provisions
of the Companies Act, 1956. (d) Under what circumstances a company can
reduce its share capital? (e) What is the concept of proxy in relation
to the meetings of a Company? Decide the appointment and rights of a
proxy, under the Companies Act, 1956 in the following cases : (i) When a
body corporate is a member in the company. (ii) When a foreign company
is member in the company (5 x 4 = 20 marks) Q
8 (a) X, a chemical manufacturing company distributed Rs. 20 lac (Rs.
Twenty Lac) to scientific institutions for furtherance of scientific
education and research. Referring to the provisions of the Companies
Act, 1956 decide whether the said distribution of money was “ultra
virus” the company? (b) How nomination facility shall operate in
case of transmission of shares under the provisions of the Companies
Act, 1956? (5+5 = 10 marks) Q
9 (a) Sunrise Limited submitted the documents for incorporation on 5th
October, 2006. It was incorporated and certificate of incorporation of
the company was issued by the Registrar on 20th October,
2006. The company on 14th October, 2006, entered into a contract which
created its contractual liabilities. The company denies the said
liability on the ground that company is not bound by the contract
entered into prior to issuing of certificate of incorporation. Decide
under the provisions of the Companies Act, 1956, whether the company can
be exempted from the said contractual liability. (b) P the secretary of
XYZ Limited issues a Share certificate in favour of A purporting to be
signed by the directors and the secretary and the seal of the company
affixed to it. In fact the secretary forged the signature of the
directors and has affixed the seal without authority. Can A hold the
company liable for the shares covered by the Share certificate, under
the provisions of the Companies Act, 1956? (5+5 = 10 marks) Q
10 (a) Examine the validity of the following with reference to the
relevant provisions of the Companies Act, 1956 : (i) The Board of
Directors of a company refuse to convene the extraordinary general
meeting of the members on the ground that the requisitionists have not
given reasons for the resolution proposed to be passed at the meeting
(ii) The Board of Directors refuse to convene the extraordinary general
meeting on the ground that the requisitions have not been signed by the
joint holder of the shares (ii) Adjournment of extraordinary general
meeting called upon the requisition of members on the ground that the
quorum was not present at the meeting (b) What are the differences
between “share certificate” and “Share warrant”? (5+5 = 10
marks) CA PE-II – May 2007 - Questions 1 and 7 are compulsory. Candidates are required to attempt four questions out of questions 2, 3, 4, 5 and 6 and two questions out of questions 8, 9 and 10. Q 1 Answer any four of the following: (a) Y holds agricultural land in Gujarat on a lease granted by X, the owner. The land revenue payable by X to the Government being in arrear, his land is advertised for sale by the Government. Under the Revenue law, the consequence of such sale will be termination of Y’s lease. Y, in order to prevent the sale and the consequent termination of his own lease, pays the Government, the sum due from X. Referring to the provisions of the Indian Contract Act, 1872 decide whether X is liable to make good to Y, the amount so paid? (b) A, an agent of a buyer, had obtained goods from the Railway organization and loaded the goods on his truck. In the meantime, the Railway organization received a notice from B, a seller, for stopping goods in transit as the buyer had become insolvent. Referring to the provisions of the Sale of Goods Act, 1930 decide whether the Railway organization can stop the goods in transit, as instructed by the seller? (c) A and B entered into an agreement to carry on a business of manufacturing and selling toys. Each one of them contributed Rs. 25 lacs as their capital with a condition that A and B will share the profits equally, but the loss, if any is to be borne by A alone. Referring to the provisions of the Indian Partnership Act, 1922 decide whether there exists a partnership between A and B. (d) A owes a certain sum of money to B. A does not know the exact amount and hence he makes out a blank cheque in favour of B, signs and delivers it to B with a request to fill up the amount due payable by him. B fills up fraudulently the amount larger than the amount due, payable by A and endorses the cheque to C in full payment of dues of B. Cheque of A is dishonoured. Referring to the provisions of the Negotiable Instruments Act, 1881, discuss the rights of B and C. (e) Examine whether the Payment of Bonus Act, 1965 be applicable to the following cases: (i) J, who is working in a social welfare organization. (ii) D, an employee employed by an establishment engaged in an industry carried on by a department of the Central Government. (f) While an employee may increase his contribution to Provident Fund, is an employer also liable to proportionately increase his contribution to the above under the Employees Provident Funds and Miscellaneous Provisions Act, 1952? Explain (5 x 4 = 20 marks) Q 2 (a) Examine whether the following constitute a contract of ‘Bailment’ under the provisions of the Indian Contract Act, 1872: (i) V parks his car at a parking lot, locks it, and keeps the keys with himself. (ii) Seizure of goods by customs authorities. (b) State the circumstances under which the Registrar of Societies may cancel the registration of a society registered under the Cooperative Societies Act, 1912. What is the effect of such cancellation? Explain (5+5 = 10 marks) Q 3 (a) A contracted with B to supply him (B) 500 tons of iron-steel @ Rs. 5,000 per ton, to be delivered at a specified time. Thereafter, A contracts with C for the purchase of 500 tons of iron-steel @ Rs. 4,800 per ton, and at the same time told ‘C’ that he did so for the purpose of performing his contract entered into with B. C failed to perform his contract in due course. Consequently, A could not procure any iron-steel and B rescinded the contract. What would be the amount of damages which A could claim from C in the circumstances? Explain with reference to the provisions of the Indian Contract, 1872. (b) A, B and C are partners in a firm called ABC Firm. A, with intention of deceiving D, a supplier of office stationery, buys certain stationery on behalf of the ABC Firm. The stationery is of use in the ordinary course of the firm’s business. A does not give the stationery to the firm, instead brings it to his own use. The supplier D, who is unaware of the private use of stationery by A, claims the price from the firm. The firm refuses to pay for the price, on the ground that the stationery was never received by it (firm). Referring to the provisions of the Indian Partnership Act, 1932 decide: (i) Whether the Firm’s contention shall be tenable? (ii) What would be your answer if a part of the stationery so purchased by A was delivered to the firm by him, and the rest of the stationery was used by him for private use, about which neither the firm nor the supplier D was aware? (5+5 = 10 marks) Q 4 (a) Mr. S agreed to purchase 100 bales of cotton from T, out of his large stock and sent his men to take delivery of the goods. They could pack only 60 bales. Later on, there was an accidental fire and the entire stock was destroyed including 60 bales that were already packed. Referring to the provisions of the Sale of Goods Act, 1930 explain as to who will bear the loss and to what extent? (b) Explain the meaning of the term ‘Basic Wages’ under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (5+5 = 10 marks) Q 5 (a) Referring to the provisions of the Negotiable Instruments Act, 1881, examine the validity of the following: (i) A Bill of Exchange originally drawn by M for a sum of Rs. 10,000, but accepted by R only for Rs. 7,000. (ii) A cheque marked ‘Not Negotiable’ is not transferable. (b) Explain the provisions of the Multi-State Cooperative Societies Act, 2002 relating to the appointment and removal of auditors of a society registered under the Act (5+5 = 10 marks) Q 6 (a) During the accounting year 2005-06, XYZ Limited to which the Payment of Bonus Act, 1965 applies, suffered heavy losses. The Board of Directors of the company decided not to pay any bonus to its employees. The employees moved the Court for relief. Referring to the provisions of the Act, decide whether the employees of the company would be given any relief by the court? (b) State the grounds on which a member of a society registered under the Multi-State Cooperative Societies Act, 2002 may be expelled from the membership of the Society (5+5 = 10 marks) Q 7 Answer any four of the following: (a) The object clause of the Memorandum of Association of LSR Private Limited, Lucknow, authorized to do trading in fruits and vegetables. The company, however, entered into a Partnership with Mr. J and traded in steel and incurred liabilities to Mr. J. The company, subsequently, refused to admit the liability to J on the ground that the deal was ‘Ultra Vires’ the company. Examine the validity of the company’s refusal to admit the liability to J. Give reasons in support of your answer. (b) VRS Company Limited is holding 45% of total Equity shares in SV Company Limited. The Board of Directors of SV Company Limited (incorporated on January 1, 2004) decided to raise the share capital by issuing further Equity shares. The Board of Directors resolved not to offer any shares to VRS Company Limited on the ground that it was already holding a high percentage of the total number of shares already issued, in SV Company Limited. The Articles of Association of SV Company Limited provide that the new shares be offered to the existing shareholders of the company. On March, 1, 2007 new shares were offered to all the shareholders except VRS Company Limited. Referring to the provisions of the Companies Act, 1956 examine the validity of the decision of the Board of Directors of SV Company Limited of not offering any further shares to VRS Company Limited. (c) X, a registered shareholder of Y Limited left his share certificates with his broker. A forged the transfer deed in favour of Z, accompanied by these share certificates lodged the transfer deed alongwith the share certificates with the company for registration. The Company Secretary, who had certain doubts, wrote to X informing him of the proposed transfer and in the absence of a reply from him (X) within the stipulated time, registered the transfer of shares in the name of Z. Subsequently, Z sold the shares to J and J’s name was placed in the register of shareholders. Later on, X discovered that forgery has taken place. Referring to the provisions of the Companies Act, 1956, state the remedy available to X and Z in the given case. Explain. (d) The paid-up Share Capital of AVS Private Limited is Rs. 1 crore, consisting of 8 lacs Equity Shares of Rs. 10 each, fully paid-up and 2 lacs Cumulative Preference Shares of Rs. 10 each, fully paid-up. XYZ Private Limited and BCL Private Limited are holding 3 lacs Equity Shares and 1,50,000 Equity Shares respectively in AVS Private Limited. XYZ Private Limited and BCL Private Limited are the subsidiaries of TSR Private Limited. With reference to the provisions of the Companies Act 1956, examine whether AVS Private Limited is a subsidiary of TSR Private Limited? Would your answer be different if TSR Private Limited has 8 out of total 10 directors on the Board of Directors of AVS Private Limited? (e) State the purposes for which the object clause of the Memorandum of Association of a public limited company, registered under the Companies Act, 1956, can be altered (5 x 4 = 20 marks) Q 8 (a) Explain the provisions of the Companies Act, 1956 relating to the ‘Service of Documents’ on a company and the members of the company. When is service of document deemed to be effective in case the document is sent by post? Explain. (b) State any six charges which are required to be registered under the provisions of the Companies Act, 1956. What is the effect of non-registration of a charge required to be registered under the Act? Explain (5+5 = 10 marks) Q 9 (a) Though six out of seven signatures to the Memorandum of Association of a company were forged, the company was registered and the Certificate of Incorporation issued. Can the registration of the company be challenged subsequently on the ground of forged signatures? (b) Who are the persons entitled to receive notice of a general meeting of a company, registered under the Companies Act, 1956? Shall the non-receipt of notice of the general meeting by any member invalidate the proceedings of the meeting? Explain (5+5 = 10 marks) Q 10 (a) ABC Limited served a notice of a general meeting upon its members. The notice stated that a resolution to increase the Share Capital of the company would be considered at the meeting. A member complains to the company that the amount of the proposed increase was not specified in the notice. In the light of the provisions of the Companies Act, 1956, examine the validity of the notice. (b) XYZ Limited held its Annual General Meeting on September 15, 2006. The meeting was presided over by Mr. V, the chairman of the company’s Board of Directors. On September 17, 2006, Mr. V, the Chairman, without signing the minutes of the meeting, left India to look after his father who fell sick in London. Referring to the provisions of the Companies Act, 1956, state the manner in which the minutes of the above meeting are to be signed in the absence of Mr. V and by whom? (5+5 = 10 marks) CA PE-II – November 2006 - Questions 1 and 7 are compulsory. Candidates are required to attempt four questions out of questions 2, 3, 4, 5 and 6 and two questions out of questions 8, 9 and 10. Q 1 Answer any four of the following: (a) X, a minor was studying in M.Com. in a college. On 1st July, 2005 he took a loan of Rs. 10,000 from B for payment of his college fees and to purchase books and agreed to repay by 31st December, 2005. X possesses assets worth Rs. 2 lakhs. On due date X fails to pay back the loan to B.B now wants to recover the loan from X out of his (X’s) assets. Referring to the provisions of the Indian Contract Act; 1872 decided whether B would succeed. (b) A contracts to sell B, by showing sample, certain quantity of rapeseed oil described as ‘foreign refined rapeseed oil’. The oil when delivered matches with the sample, but is not foreign refined rapeseed oil. Referring to the provisions of Sale of Goods Act, 1930; advise the remedy, if any, available to B. (c) Referring the provisions of the Payment of Bonus Act, 1965, state whether the following persons are entitled to bonus under the Act: (i) An apprentice (ii) An employee dismissed on the ground of misconduct (iii) A temporary workman (iv) A piece-rated worker. (d) A, B and C are partners in a firm. A introduces D to X as a partner in business. D, in fact, was not a partner in the firm’s business. D did not deny this statement. X advanced a loan of Rs. 20 lakhs to the firm. On firm’s failure to repay the loan, X wants to hold D responsible for the repayment of the above loan. Referring to the provisions of the Indian Partnership Act, 1932 decide whether X would succeed in recovering the loan from D. (e) J, a shareholder of a Company, purchased for his personal use certain goods from a Mall (Departmental Store) on credit. He sent a cheque drawn on the company’s account to the Mall (Departmental Store) towards the full payment of the bills. The cheque was dishonoured by the Company’s Bank. J, the shareholder of the company, was neither a Director nor a person in-charge of the company. Examining the provisions of the Negotiable Instruments Act, 1881 state whether J has committed an offence under Sec. 138 of the Act and decide whether he (J) can be held liable for the payment, for the goods purchased from the Mall (Departmental Store.) (f) Explain the provisions of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 relating to the liability of an employer in case of transfer of the establishment to another person (5 x 4 = 20 marks). Q 2 (a) “The relationship of principal and agent (i.e. Agency) may be constituted by subsequent ratification by the Principal.” Examine the validity of the statement and state the requisites of a valid ratification in the light of the provisions of the Indian Contract Act, 1872. (b) A society registered under the Multi-State Cooperative Societies Act, 2002 intends to issue non-convertible debentures to the general public. Referring to the provisions of the Multi-state Cooperative Societies Act, 2002 state whether a society registered under the Act is empowered to do so (5+5 = 10 marks) Q 3 (a) Explaining the provisions of the Indian Contract Act, 1872, answer the following: (i) A contracts with B for a fixed price to construct a house for B within a stipulated time. B would supply the necessary material to be used in the construction. C guarantees A’s performance of the contract. B does not supply the material as per the agreement. Is C discharged from his liability? (ii) C, the holder of an over due bill of exchange drawn by A as surety for B, and accepted by B, contracts with X to give time to B. Is A discharged from his liability? (b) “Sharing of profit is only a prima facie, not a conclusive evidence of the existence of partnership.” Examine the validity of the statement in the light of the provisions of the Indian Partnership Act, 1932 and state as to how would you determine whether a group of persons does or does not constitute partnership (5+5 = 10 marks) Q 4 (a) Distinguish between a ‘Condition’ and a ‘Warranty’ in a contract of sale. When shall a ‘breach of condition’ be treated as ‘breach of warranty’ under the provisions of the Sale of Goods Act, 1930? Explain. (b) Explain the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 relating to the following and state: (i) Whether the balance to the credit of Provident Fund account of an employee is attachable by the decree of a Court? (ii) Whether the payment of contribution to provident fund of an employee, to be made by his employer, who has become insolvent, a preferential payment? (5+5 = 10 marks) Q 5 (a) B obtains A’s acceptance to a bill of exchange by fraud. B endorses it to C who is a holder in due course. C endorses the bill to D who knows of the fraud. Referring to the provisions of the Negotiable Instruments Act, 1882, decide whether D can recover the money from A in the given case. (b) Explain the powers of the Board of Directors of a multi-state Cooperative Society, as conferred upon the Board under Multi-state Cooperative Societies Act, 2002 (5+5 = 10 marks). Q 6 (a) Explain the provisions of the Payment of Bonus Act, 1965 relating to ‘Minimum’ and ‘Maximum’ amount of bonus payable to an employee, for an accounting year. (b) In what way does the Cooperative Societies Act, 1912 restricts the powers of a society registered under the Act, to make loans to its members and to borrow money thereform? Can such borrowings be made by a Society from non-members also? Explain (5+5 = 10 marks). Q 7 Answer any four of the following: (a) The principal business of XYZ Company Ltd. was the acquisition of vacant plots of land and to erect the houses. In the course of transacting the business, the Chairman of the Company acquired the knowledge of arranging finance for the development of land. The XYZ Company introduced a financier to another company ABC Ltd. and received an agreed fee of Rs. 2 lakhs for arranging the finance. The Memorandum of Association of the company authorises the company to carry on any other trade or business which can in the opinion of the board of directors, be advantageously carried on by the company in connection with the company’s general business. Referring to the provisions of the Companies Act, 1956; examine the validity of the contract carried out by XYZ Company Ltd. with ABC Ltd. (b) Explain the Provisions of Companies Act, 1956 relating to the establishment of Investor Education and Protection Fund. (c) XY Ltd. has its registered office at Mumbai in the State of Maharashtra. For better administrative conveniences the company wants to shift its registered office from Mumbai to Pune (State of Maharashtra). What formalities the company has to comply with under the provisions of the Companies Act, 1956 for shifting its registered office as state above? Explain. (d) With a view to issue shares to the general public a prospectus containing some false information was issued by a company. Mr. X received a copy of the prospectus from the company, but did not apply for allotment of any shares. The allotment of shares to the general public was completed by the company within the stipulated period. A few months later, Mr. X bought 2000 shares through the stock exchange at higher price which later on fell sharply, X sold these shares at a heavy loss. Mr. X claims damages from the company for the loss suffered on the ground the prospectus issued by the company contained a false statement. Referring to the provisions of the Companies Act, 1956 examine whether X’s claim for damages is justified. (e) Explain the provisions of the Companies Act, 1956 relating to ‘Resolutions requiring Special Notice’. State the resolutions that required ‘Special Notice’ under the Act (5 x 4 = 20 marks) Q 8 (a) Distinguish between ‘Reduction of Share Capital’ and ‘Diminution of Share Capital’. (b) X had applied for the allotment of 1,000 shares in a company. No allotment of shares was made to him by the company. Later on, without any further application from X, the company transferred 1,000 partly-paid shares to him and placed his name in the Register of Members. X, knowing that his name was placed in the Register of Members, took no steps to get his name removed from the Register of Members. The company later on made final call. X refuses to pay for this call. Referring to the provisions of the Companies Act, 1956, examine whether his (X’s) refusal to pay for the call is tenable and whether he can escape himself from the liability as a member of the company (5+5 = 10 marks). Q 9 (a) DJA Company Ltd. has only 50 preference shareholders. A meeting of the preference shareholders was called by the company for amending the terms of these shares. Mr. A, was the only preference shareholder who attended the meeting. He, however, held proxies from all other shareholders. He took the Chair, conducted the meeting and passed a resolution for amending the terms of the issue of these shares. Referring to the provisions of the Companies Act, 1956, examine the validity of the meeting and the resolution passed thereat. (b) Who are entitled to get notice for the general meeting called by a Public Limited company registered under the Companies Act, 1956? Does the non-receipt of a notice of the meeting by any one entitled to such notice invalidate the meeting and the resolutions passed thereat? What would be your answer in case the omission to give notice to a member is only accidental omission? (5+5 = 10 marks) Q
10 (a) When is an expert not liable for untrue statements in the
prospectus issued by a company? (b)
Referring to the provisions of the Companies Act, 1956 state the matters
relating to ‘Ordinary Business’ which may be transacted at the
Annual General Meeting of a Company. What kinds of resolutions need to
be passed to transact the ‘Ordinary business’ and the ‘Special
Business’ at the Annual General Meeting of the Company? Explain (5+5 =
10 marks) C.A. PE-II – GROUP 1 - May – 2006 Questions 1 and 7 are compulsory. Candidates are required to attempt four questions out of questions 2, 3, 4 , 5 and 6 and two questions out of questions 8, 9 and 10. Q 1 Answer any four of the following: (a) Ramaswami proposed to sell his house to Ramanathan. Ramanathan sent his acceptance by post. Next day, Ramanathan sends a telegram withdrawing his acceptance. Examine the validity of the acceptance in the light of the following: (i) The telegram of revocation of acceptance was received by Ramaswami before the letter of acceptance (ii) The telegram of revocation and letter of acceptance both reached together (b) Suraj sold his car to Sohan for Rs. 75,000. After inspection and satisfaction, Sohan paid Rs. 25,000 and took possession of the car and promised to pay the remaining amount within a month. Later on Sohan refuses to give the remaining amount on the ground that the car was not in a good condition. Advise Suraj as to what remedy is available to him against Sohan (c) Prakash Chandra is working as a salesman in a company on salary basis. The following payments were made to him by the company during the previous financial year – (i) overtime allowance (ii) dearness allowance (iii) commission on sales (iv) employer’s contribution towards pension fund (v) value of free food. Examine as to which of the above payments form part of “salary” of Prakash Chandra under the provisions of the Payment of Bonus Act, 1965 (d) Ram, Mohan and Gopal were partners in a firm. During the course of partnership, the firm ordered Sunrise Ltd. to supply a machine to the firm. Before the machine was delivered, Ram expired. The machine, however, was later delivered to the firm. Thereafter, the remaining partners became insolvent and the firm failed to pay the price of machine to Sunrise Ltd. Explain with reasons: (i) Whether Ram’s private estate is liable for the price of the machine purchased by the firm? (ii) Against whom can the creditor obtain a decree for the recovery of the price? (e) Point out the differences between “transfer by negotiation” and “transfer by assignment” under the provisions of the Negotiable Instruments Act, 1881 (f) Explain the Law relating to extent of contribution by an employee to his Provident Fund under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952. Can the amount of contribution be increased by the employee? (5 x 4 = 20 marks) Q 2 (a) Explain the circumstances whereunder a party to a contract may be exempted from the performance of contract on the ground of ‘Supervening impossibility’ under the Indian Contract Act, 1872 (b) State the grounds on the basis of which a member of a Society registered under the Cooperative Societies Act, 1912 can be expelled? (5+5 = 10 marks). Q 3 (a) Ravi becomes guarantor for Ashok for the amount which may be given to him by Nalin within six months. The maximum limit of the said amount is Rs. 1 lakh. After two months Ravi withdraws his guarantee. Upto the time of revocation of guarantee, Nalin had given to Ashok Rs. 20,000. Referring to the provisions of the Indian Contract Act, 1872; decide – (i) Whether Ravi is discharged from his liabilities to Nalin for any subsequent loan (ii) Whether Ravi is liable if Ashok fails to pay the amount of Rs. 20,000 to Nalin? (b) When is the registration of a Partnership firm deemed to be complete under the Indian Partnership Act, 1932? What are the consequences when a partnership firm is not registered? (5+5 = 10 marks). Q 4 (a) Point out the differences between the transactions of “Sale” and “hire-purchase” in the light of the provisions of the Sale of Goods Act, 1930 (b) Explain the salient features of the “Employees Pension Scheme” as provided under Employees Provident Fund and Miscellaneous Provisions Act, 1952 (5+5 = 10 marks). Q 5 (a) When is an alteration in a negotiable instrument is deemed to be a “material alteration” under the Negotiable Instruments Act, 1881? What are the consequences of material alteration in a negotiable instrument? (b) The executive of a Cooperative Society is willing to convert the Society into a Multi-State Cooperative Society. Advise as to what steps are required to be taken for the said conversion under the Multi-State Cooperative Societies Act, 2002 (5+5 = 10 marks). Q 6 (a) Explain the procedure relating to computation of “Working days” for the purpose of payment of bonus under the Payment of Bonus Act, 1965. Can there be a deduction in the amount of bonus on the ground that the employee has not worked for all working days in an accounting year? (b) What qualifications and disqualifications have been laid down for appointment of a person on the post of auditor of a Multi-State Cooperative Society under the Multi-State Cooperative Societies Act, 2002? (5+5 = 10 marks) Q 7 Answer any four of the following: (a) Mars India Ltd. owed to Sunil Rs. 1,000. On becoming this debt payable, the company offered Sunil 10 shares of Rs. 100 each in full settlement of the debt. The said shares were fully paid and were allotted to Sunil. Examine the validity of this allotment in the light of the provisions of the Companies Act, 1956 (b) What is the meaning of “Certificate of Incorporation” under the provisions of the Companies Act, 1956? When may a Public Company commence business after issuing prospectus to subscribe its shares? (c) What are the provisions relating to “Information Memorandum” contained in Section 60B of the Companies Act, 1956 [inserted by the Companies (Amendment) Act, 2000]? (d) The Directors of “Sunrise Computers Ltd.” desire to change the Company’s name to “Royal Computers Ltd.” and seek your advice. Explain the procedure to be followed, for the said purpose, under the Companies Act, 1956 (e) Explain the meaning of “Transmission of Shares” under the Companies Act, 1956. In what ways is “transmission of shares” different from “Transfer of Shares”? (5x4 = 20 marks) Q 8 (a) The Registrar of Companies on examining the statutory report filed with him by M/s Jyothi Company Ltd., finds that the report has been certified as correct, by all the directors of the Company, except the Managing Director. The Registrar refuses to register the said document on the ground that it was not signed by the Managing Director of the Company. Answer the following in the light of the Companies Act 1956: (i) Whether the Registrar of Companies can hold the officers of the Company liable? (ii) What provisions of the Companies Act have not been complied with by the company and its officers? (iii) To what penalties are the Company and its officers liable? (b) To remove the Managing Director, 40% members of Global Ltd. submitted requisition for holding extra-ordinary general meeting. The company failed to call the said meeting and hence the requisitionists held the meeting. Since the Managing Director did not allow the holding of meeting at the registered office of the Company, the said meeting was held at some other place and a resolution for removal of the Managing Director was passed. Examine the validity of the said meeting and resolution passed therein in the light of the Companies Act, 1956 (5+5 = 10 marks). Q 9 (a) What do you understand by “Charge” under the Companies Act, 1956? Distinguish between “Fixed charge” and “Floating charge” (b) The Articles of Association of X Ltd. require the personal presence of 7 members to constitute quorum of General Meetings. The following persons were present in the extraordinary general meeting to consider the appointment of Managing Director: (i) A, the representative of Governor of Madhya Pradesh (ii) B and C, shareholders of preference shares, (iii) D, representing Y Ltd. and Z Ltd. (iv) E, F, G and H as proxies of shareholders. Can it be said that the quorum was present in the meeting? (5+5 = 10 marks). Q 10 (a) A Company served a notice of General Meeting upon its members. The notice stated that a resolution to increase the share capital of the Company would be considered at such meeting. A shareholder complains that the amount of the proposed increase was not specified in the notice. Is the notice valid? (b) Answer the following in relation to the provisions of the Companies Act, 1956: (i) Can the declaration of Board of Directors of interim dividend be revoked? (ii) Who is empowered to declare final dividend? (5+5 = 10 marks). C.A. PE-II – GROUP 1 - November – 2005 Questions 1 and 7 are compulsory. Q 1 Answer any six of the following : (a) Mr. Ahuja of Delhi engaged Mr. Singh as his agent to buy a house in West Extension area. Mr. Singh bought a house for Rs. 20 lakhs in the name of a nominee and then purchased it himself for Rs. 24 lakhs. He then sold the same house to Mr. Ahuja for Rs. 26 lakhs. Mr. Ahuja later comes to know the mischief of Mr. Singh and tries to recover the excess amount paid to Mr. Singh. Is he entitled to recover any amount from Mr. Singh? If so, how much? Explain. (b) Miss X, a film actress agreed to work exclusively for a period of two years, for a film production company. However, during the said period she enters into a contract to work for another film producer. Discuss the rights of the aggrieved film production company under the Indian Contract Act, 1872. (c) Explain the meaning of “Accounting Year” under the Payment of Bonus Act, 1965. (d) State the acts which are considered beyond the implied authority of a partner under the provisions of the Indian Partnership Act, 1932 (e) A, a major, and B, a minor, executed a Promissory Note in favour of C. Examine with reference to the provisions of the Negotiable Instruments Act, 1881 the validity of the Promissory Note and state whether it is binding on A and B. (f) State the establishments to which the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, applies (g) Explain the conditions of registration of a society under the Cooperative Societies Act, 1912. (h) What are the disqualifications for member of a multi-state cooperative society under the Multi-State Cooperative Societies Act, 2002? (4 x 6 = 24 marks) Q 2(a) “An agreement made without consideration is void.” With reference to provisions of the Indian Contract Act, 1872, examine the validity of the statement and explain the cases in which the statement does not apply (b) J, the owner of a Fiat car wants to sell his car. For this purpose he hands over the car to P, a mercantile agent for sale at a price not less than Rs. 50,000. The agent sells the car for Rs. 40,000 to A, who buys the car in good faith and without notice of any fraud. P misappropriated the money also. J sues A to recover the car. Decide giving reasons whether J would succeed (6+6 = 12 marks) Q 3 (a) Examine the validity of a contract when the acceptance from the offeree is obtained under ‘Coercion’ or under ‘undue influence’. Point out the distinction between ‘Coercion’ and ‘Undue influence’. (b) When does dissolution of a partnership firm take place under the provisions of the Indian Partnership Act, 1932? Explain (6+6 = 12 marks) Q 4(a) “Nemo Dat Quod Non Habet” – “None can give or transfer goods what he hoes not himself own.” Explain the rule and state the cases in which the rule does not apply under the provisions of the Sale of Goods Act, 1930 (b) Explain the manner in which the “Executive Committee” under the provisions of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 is constituted. State its composition (6+6 = 12 marks) Q 5(a) In what way does the Negotiable Instruments Act, 1881 regulate the determination of the ‘Date of maturity’ of a Bill of exchange. Ascertain the ‘Date of maturity’ of a bill payable 120 after the date. The Bill of exchange was drawn on 1st June, 2005. (b) Explain the provisions of the Payment of Bonus Act, 1965 relating to the following : (i) Adjustment of Customary Bonus against bonus payable under the Act (ii) What is the time limit within which payment of bonus due to an employee under the Act, be paid? (6+6 = 12 marks) Q 6 (a) Examine when shall a holder of a negotiable instrument be considered as a holder in due course under the provisions of the Negotiable Instruments Act, 1881 (b) Discuss the provisions relating to disposal of net profits of a society registered under the Multi-state Cooperative Societies Act, 2002 (6+6 = 12 marks) Q 7 Answer any four of the following: (a) Distinguish between ‘share warrant’ and ‘share certificate’. State whether a private company can issue share warrants (b) When is a company required to issue a ‘shelf prospectus’ under the provisions of the companies (Amendment) Act, 2000? Explain the provisions of the Act relating to the issue of ‘shelf prospectus’ and filing it with the Registrar of Companies (c) Dev Limited issued a notice for holding of its Annual General Meeting on 7th November, 2005. The notice was posted to the members on 16.10.2005. Some members of the company allege that the company had not complied with the provisions of the Companies Act, 1956 with regard to the period of notice and as such the meeting was not validly called. Referring to the provisions of the Act, decide (i) Whether the meeting has been validly called? (ii) If there is a shortfall in the number of days by which the notice falls short of the statutory requirement, state and explain by how many days does the notice fall short of the statutory requirement? (iii) Can the shortfall, if any, be condoned? (d) XYZ Limited realised on 3rd November, 2005 that particulars of charge created on 11th September, 2005 in favour of a bank were not filed with the Registrar of Companies for registration. What procedure should the company follow to get the charge registered with the Registrar of Companies? Would the procedure be different if the charge was created on 11th August, 2005 instead of 11th September, 2005? Explain with reference to the relevant provisions of the Companies Act, 1956 (e) “Every shareholder of a company is also known as a member, while every member may not be known as a shareholder.” Examine the validity of the statement and pint out the distinction between a ‘member’ and a ‘shareholder’ (5 x 4 = 20 marks) Q 8(a) M/s India Computers Ltd. was registered as a Public Company on 1st July, 2005 in the State of Maharashtra. Another company by name M/s All India Computers Ltd. was registered in Delhi on 15th July, 2005. The promoters of India Computers Ltd. have failed to persuade the management of All India Computers Ltd. to change the company’s name, as it closely resembles with the name of the first registered company. Advise the Management of India Computers Ltd. about the remedies available to them under the provisions of the Companies Act, 1956 (b) State the procedure for inspection of Minutes Book of General Meetings of a company, by the members (5+5 = 10 marks) Q 9(a) “Moonstar Ltd.” is authorised by its articles to accept the whole or any part of the amount of remaining unpaid calls from any member although no part of the amount has been called up. ‘A’, a shareholder of the Moonstar Ltd., deposits in advance the remaining amount due on his share without any calls made by “Moonstar Ltd.”. Referring to the provisions of the Companies Act, 1956, state the rights and liabilities of Mr. A, which will arise on the payment of calls made in advance. (b) C, a member of LS & Co. Ltd., holding some shares in his own name on which Final call money has not been paid, is denied by the company voting right at a general meeting on the ground that the articles of association do not permit a member to vote if he has not paid the calls on the shares held by him. With reference to the provisions of the Companies Act, 1956, examine the validity of Company’s denial to C of his voting right (5+5 = 10 marks) Q 10(a) In what way does the Companies Act, 1956 regulate the payment of ‘underwriting commission’? Explaining the provisions of the Act, state the conditions to be complied with before payment of such commission can be made to underwriters of the company (b) At a General meeting of a company, a matter was to be passed by a special resolution. Out of 40 members present, 20 voted in favour of the resolution, 5 voted against it and 5 votes were found invalid. The remaining 10 members abstained from voting. The Chairman of the meeting declared the resolution as passed. With reference to the provisions of the Companies Act, 1956, examine the validity of the Chairman’s declaration (5+5 = 10 marks)
C.A. PE-II – GROUP 1 - May – 2005 Questions 1 and 7 are compulsory. Q 1 Answer any six of the following: (a) Father promised to pay his son a sum of Rs. one lakh if the son passed C.A. 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. (b) A hires a carriage of B and agrees to pay Rs. 500 as hire charges. The carriage is unsafe, though B is unaware of it. A is injured and claims compensation for injuries suffered by him B refuses to pay. Discuss the liability of B. (c) Define an “Establishment in public sector”. What are the circumstances when the Payment of Bonus Act, 1965 becomes applicable to such an establishment? (d) Describe the procedure of registration of firm under the Indian Partnership Act. What is the rule of evidence with regard to entries in the register of firms? (e) A cheque payable to bearer is crossed generally and marked “not negotiable”. The cheque is lost or stolen and comes into possession of B who takes it in good faith and gives value for it. B deposits the cheque into his own bank and his banker presents it and obtains payment for his customer from the bank upon which it is drawn. The true owner of the cheque claims refund of the amount of the cheque from B. Discuss the liability of the banker collecting the cheque and the banker paying the cheque and B to the true owner of the cheque referring to the provisions of the Negotiable Instruments Act, 1881. (f) State the emoluments paid to employees which do not come within the purview of “basic wages” under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. (g) State the provisions relating to the conduct of audit applicable to a society registered under the Cooperative Societies Act, 1912 (h) State the restrictions on borrowings on a Multi-State Cooperative Society under the Multi-State Cooperative Societies Act. (4 x 6 = 24 marks). Q 2 (a) M. Ltd. contracts with Shanti Traders to make and deliver certain machinery to them by 30.06.2004 for Rs. 11.50 lakhs. Due to labour strike, M Ltd. could not manufacture and deliver the machinery to Shanti Traders. Later, Shanti Traders procured the machinery from another manufacturer for Rs. 12.75 lakhs. Shanti traders was also prevented from performing a contract which it had made with Zenith Trader at the time of their contract with M Ltd. and were compelled to pay compensation for breach of contract. Advise Shanti Traders the amount of compensation which it can claim from M Ltd., referring to the legal provisions of the Indian Contract Act. (b) When can an unpaid seller of goods exercise his right of lien over the goods under the Sale of Goods Act. Can he exercise his right of lien even if the property in goods has passed to the buyer? When such a right is terminated? Can he exercise his right even after he has obtained a decree for the price of goods from the court? (6+6 = 12 marks) Q 3 (a) State the circumstances when an agent is personally liable for the contracts entered into by him on behalf of his principal. (b) Ram & Co., a firm consists of three partners A, B and C having one-third share each in the firm. According to A and B, the activities of C are not in the interest of the partnership and thus want to expel C from the firm. Advise A and B whether they can do so quoting the relevant provisions of the Indian Partnership Act (6+6 = 12 marks) Q 4 (a) “_ _ _ _ _ there is no implied warranty or condition as to quality or fitness for any particular purpose of goods supplied under a contract of sale_ _ _ _ _”. Discuss the significance and state exceptions, if any. (b) State the powers of the Central Government to authorise certain employers to maintain provident fund accounts under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (6+6 = 12 marks). Q 5 (a) ‘A’ draws a cheque for Rs. 50,000. When the cheque ought to be presented to the drawee bank, the drawer has sufficient funds to make payment of the cheque. The bank fails before the cheque is presented. The payee demands payment from the drawer. What is the liability of the drawer? (b) Explain the rules of set on and set off of allocable surplus under the Payment of Bonus Act (6+6 = 12 marks). Q 6 (a) State the cases in which a banker is justified or bound to dishonour cheques. (b) PQR Cooperative Society Ltd., a Multistate Cooperative Society desires to change its bye-laws in respect of the following matters: (i) To increase the number of members of the board from existing 18 to 24. (ii) To increase the tenure of the directors from the present limit of 4 years to 6 years. (iii) To reduce the frequency of the Board meetings from existing figure of 6 to 4 meetings in the year. After completion of the required formalities, the society has made an application to the central registrar for registration of the amendments. Examine the powers of the registrar to register the amendments in the light of the provisions of the Multi-state Cooperative Societies Act (6+6 = 12 marks). Q 7 Answer any four of the following (a) The management of Ambitious Properties Ltd. has decided to take up the business of food processing activity because of the downward trend in real estate business. There is no provision in the object clauses of the Memorandum of Association to enable the company to carry on such business. State with reasons whether its object clause can be amended. State briefly the procedure to be adopted for change in the object clause. (b) Several small depositors of Overtrading Company Ltd. have made complaints about non-refund of the deposits after due date. Explain briefly (1) the meaning of small depositor and (2) the duty of the company after the default has taken place in the matter of repayment of the deposits. (c) Explain briefly the meaning of sweat equity shares and the steps that a company has to take for issue of such shares. (d) A company is required to pay dividend to its shareholders within 30 days of its declaration. State the circumstances when a company will not be deemed to have committed any offence even if it does not pay within 30 days. (e) The Articles of Association of a private limited company contain provisions restricting the right to transfer shares and limiting the number of members to fifty. What restrictions are generally incorporated in the articles in the articles in restricting the right to transfer shares? (5 x 4 = 20 marks) Q 8 (a) State briefly the provisions relating to minimum subscription and consequence of non-receipt of minimum subscription as per the Companies Act, 1956 and the provisions as per SEBI guidelines. (b) Write a note on the powers of the Central Government in regard to conversion of debentures and loans into shares of the company under the following heads: (i) When terms of issue of such debenture or terms of loan do not include term providing for an option of conversion; (ii) Matters considered in determining the terms and conditions of such conversion; (iii) Remedy available to the company if conversion or terms of conversion is not acceptable to it (5+5 = 10 marks). Q 9 (a) State the procedure for passing a resolution by Postal Ballot. (b) State what is meant by “Quorum” and when does quorum be considered immaterial under the provisions of the Companies Act, 1956 (5+5 = 10 marks) Q 10 (a) State the provisions of the Companies Act regarding calling and holding an extraordinary general meeting with respect to : (i) Number of members entitled to requisition a meeting. (ii) Power of the tribunal to order meeting to be called under Section 186. (b) The minutes of the meeting must contain fair and correct summary of the proceedings thereat. Can the Chairman direct exclusion of any matter from the minutes? Some of the shareholders insist on inclusion of certain matters which are regarded as defamatory of a Director of the company. The Chairman declines to do so. State how the matter can be resolved (5+5 = 10 marks). C.A. PE-II – GROUP 1 - November – 2004 Questions 1 and 7 are compulsory. Q 1 Answer any six of the following: (a) Mr. Seth an industrialist has been fighting a long drawn litigation with Mr. Raman another industrialist. To support his legal campaign, Mr. Seth enlists the services of Mr. X a legal expert stating that an amount of Rs. 5 lakhs would be paid, if Mr. X does not take up the brief of Mr. Raman. Mr. X agrees, but at the end of the litigation Mr. Seth refuses to pay. Decide whether Mr. X can recover the amount promised by Mr. Seth under the provisions of the Indian Contract Act, 1872 (b) With a view to boost the sales, Hanuman Automobiles sells a motor-car to Mr. A on trial basis for a period of three days with a condition that if Mr. A is not satisfied with the performance of the car, he can return back the car. However, the car was destroyed in a fire accident at the place of Mr. A before the expiry of three days. Decide whether Mr. A is liable for the loss suffered (c) Define the term ‘Cheque’ as given in the Negotiable Instruments Act, 1881 and amended by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002. (d) Explain the provisions of the Indian Partnership Act, 1932 relating to the creation of Partnership by holding out. Upto what extent such partner will be liable to the Partnership firm (e) Examine the powers of Government to grant exemption to an establishment from payment of bonus under the Payment of Bonus Act, 1965 (f) Manorama Group of Industries sold its textile unit to Giant Group of Industries. Manorama Group contributed 25% of total contribution in Pension scheme, which was due before sale under the provisions of Employees Provident Fund and Miscellaneous Provisions Act, 1952. The transferee company (Giant Group of Industries) refused to bear the remaining 75% contribution in the Pension Scheme. Decide, in the light 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? (g) State the restrictions imposed on a registered society under the Cooperative Societies Act, 1912 regarding investment or deposit of its surplus funds. (h) State the provisions of law relating to functions of Federal Cooperative Society under the Multi-state Cooperative Societies Act, 2002 (4 x 6 = 24 marks). Q 2 (a) What is meant by Anticipatory Breach of Contract? Mr. Dubious Textile enters into a contract with Retail Garments Show Room for supply of 1,000 pieces of Cotton shirts at Rs. 300 per shirt to be supplied on or before 31st December, 2004. However, on 1st November, 2004 Dubious Textiles informs the Retail Garments Show Room that he is not willing to supply the goods as the price of Cotton shirts in the meantime has gone upto Rs. 350 per shirt. Examine the rights of the Retail Garments Show Room in this regard (b) State briefly the essential element of a contract of sale under the Sale of Goods Act, 1930. Examine whether there should be an agreement between the parties in order to constitute a sale under the said Act (6+6 = 12 marks) Q 3 (a) Describe the provisions of Indian Partnership Act, 1932 regarding the admission of minor in the partnership firm. State the rights and liabilities of such minor before or after he attains majority. (b) Distinguish between Contract of Indemnity and Contract of Guarantee (6+6 = 12 marks). Q 4 (a) State the privileges of a “Holder in due course” under the Negotiable Instruments Act, 1881. A induced B by fraud to draw a cheque payable to C or order. A obtained the cheque, forged C’s indorsement and collected proceeds to the cheque through his Bankers. B the drawer wants to recover the amount from C’s Bankers. Decide in the light of the provisions of Negotiable Instruments Act, 1881 – (i) Whether B the drawer, can recover the amount of the cheque from C’s Bankers? (ii) Whether C is the Fictitious Payee? (iii) Would your answer be still the same in case C is a fictitious person? (b) On 1st January, 2002, Aryan Textiles Ltd. agreed with the employees for payment of an annual bonus linked with production or productivity instead of bonus based on profits subject to the limit of 30% of their salary/wages during the relevant accounting year. It was also agreed by the employees that they will not claim minimum bonus stated under Section 10 of the Payment of Bonus Act, 1965. As per the agreement, the employees of Aryan Textiles Ltd. Claimed annual bonus linked with production or productivity in the relevant accounting year. On refusal of the company the employees of the company moved to the court for relief. Decide in reference to the provisions of the Payment of Bonus Act, 1965 whether the employees will get the relief? Inspite of the aforesaid agreement, whether the employees are still entitled to receive minimum bonus ? (6+6 = 12 marks). Q 5 (a) Point out the classes of those establishments upon which the provisions of Employees Provident fund and Miscellaneous Provisions Act, 1952 does not apply (b) M/s Supreme Society Ltd., a Multi-state Cooperative Society, is contemplating to transfer some of its assets and liabilities to another Multi-State Cooperative Society. Advise the management of the society about the steps to be taken in this regard (6+6 = 12 marks) Q 6 (a) A group of people having common interest wish to form and register a society under the Cooperative Societies Act, 1912. Describe briefly - (i) the eligibility conditions to be fulfilled by the group for registration, and (ii) the power of Registrar to decide the eligibility conditions (b) A draws a bill on B. B accepts the bill without any consideration. The bill is transferred to C without consideration. C transferred it to D for value. Decide – (i) Whether D can sue the prior parties of the bill, and (ii) Whether the prior parties other than D have any right of action intense? Give your answer in reference to the Provisions of Negotiable Instruments Act, 1881 (6+6 = 12 marks). Q 7 Answer any four of the following : (a) Some of the creditors of M/s Get Rich Quick Ltd. have complained that the company was formed by the promoters only to defraud the creditors and circumvent the compliance of legal provisions of the Companies Act, 1956. In this context they seek your advice as to the meaning of corporate veil and when the promoters can be made personally liable for the debts of the company (b) M/s ABC Ltd. a company registered in the State of West Bengal desires to shift its registered office to the State of Maharashtra. Explain briefly the steps to be taken to achieve the purpose. Would it make a difference, if the Registered Office is transferred from the Jurisdiction of one Registrar of Companies to the jurisdiction of another Registrar of Companies within the same State? (c) M/s Honesh Cycles Ltd. has received an application for transfer of 1,000 equity shares of Rs. 10 each fully paid up in favour of Mr. Balak. On scrutiny of the application form it was found that the applicant is minor. Advise the company regarding the contractual liability of a minor and whether shares can be allotted to the Balak by way of transfer (d) Explain briefly the distinction between shares and debentures and state whether a company can issue debentures with voting rights (e) What is meant by “Abridged prospectus”. Under what circumstances a company issuing abridged prospectus need not accompany the prescribed details alongwith the application form for issue of shares? ( 5 x 4 = 20 marks) Q 8 (a) M/s Low Esteem Infotech Ltd. was incorporated on 1.4.2003. No General Meeting of the company has been held so far. Explain the provisions of the Companies Act, 1956 regarding the time for holding the first annual general meeting of the Company and the power of the Registrar to grant extension of time for the First Annual General Meeting. (b) Whether a Company can buy-back its own shares? Explain in brief the provisions of Companies Act, 1956 relating to the sources of funds and conditions for buy-back its own shares by the company (5+5 = 10 marks). Q 9 (a) Annual General Meeting of a Public Company was scheduled to be held on 15.12.2003. Mr. A, a shareholder, issued two Proxies in respect of the shares held by him in favour of Mr. ‘X’ and Mr. ‘Y’. The proxy in favour of Mr. ‘Y’ was lodged on 12.12.2003 and the one in favour of Mr. X was lodged on 15.12.2003. The company rejected the proxy in favour of Mr. Y as the proxy in favour of Mr. Y was of dated 12.12.2003 and that in favour of Mr. X was of dated 13.12.2003. Is the rejection by the company in order? (b) The Board of Directors of M/s Reckless Investments Ltd. have allotted shares to the investors of the company without issuing a prospectus or filling a statement in lieu of prospectus with the Registrar of Companies, Mumbai. Explain the remedies available to the investors in this regard (5+5 = 10 marks). Q 10 (a) What is meant by a Guarantee Company? State the similarities and dissimilarities between a Guarantee Company and a Company having Share Capital (b) The Board of Directors of M/s Optimistic Company Ltd. propose 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 (5+5 = 10 marks) C.A. PE-II – GROUP 1 - May – 2004 Questions 1 and 7 are compulsory. Q 1 Answer any six of the following : (a) Shambhu Dayal started “self service” system in his shop. Smt. Prakash entered the shop, took a basket and after taking articles of her choice into the basket reached the cashier for payments. The cashier refuses to accept the price. Can Shambhu Dayal be compelled to sell the said articles to Smt. Prakash? Decide. (b) For the purpose of making uniform for the employees, Bansi Bhaiya bought dark blue coloured cloth from Vivek, but did not disclose to the seller the purpose of said purchase. When uniforms were prepared and used by the employees, the cloth was found unfit. However, there was evidence that the cloth was fit for caps, boots and carriage lining. Advise Bansi Bhaiya whether he is entitled to have any remedy under the sale of Goods Act, 1930? (c) “Mere sharing in the profits of a business is not a conclusive proof of existence of partnership” – Comment. (d) Describe, in brief, the main amendments incorporated by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 in Sections 138, 141 and 142 of the Principal Act, i.e. the Negotiable Instruments Act, 1881(e) Decide whether the following persons are entitled to get bonus under the Payment of Bonus Act, 1965 : (i) An apprentice (ii) A retrenched employee (iii) A dismissed employee (iv) A piece-rated worker. (f) Is the amount standing to the credit of a member of the Provident Fund attachable in the execution of decree or order of the Court? Examine the law, on this point, laid down in the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. (g) Is the power to cancel registration of a society available to the Registrar under the provisions of the Cooperative Societies Act, 1912? If yes, explain the circumstances whereunder the said power can be exercised by the Registrar (h) Can a cooperative society be converted into a Multi-State Cooperative Society? If yes, state the procedure of the said conversion under the provisions of the Multi-State Cooperative Societies Act, 2002 [4 x 6 = 24 marks]. Q 2 (a) Akhilesh entered into an agreement with Shekhar to deliver him (Shekhar) 5,000 bags to be manufactured in his factory. The bags could not be manufactured because of strike by the workers and Akhilesh failed to supply the said bags to Shekhar. Decide whether Akhilesh can be exempted from liability under the provisions of the Indian Contract Act, 1872. (b) What do you understand by the term “unpaid seller” under the Sale of Goods Act, 1930? When can an unpaid seller exercise the right of stoppage of goods in transit? [6+6 = 12 marks] Q 3 (a) Point out the differences between conditions and warranties under the Sale of Goods Act, 1930. (b) Ram, Shyam and Gopal are partners in a firm. Ram retires. Shyam and Gopal continue to carry on firm’s business in the same ‘firm name”. Do you agree that in this situation change in the relationship between partners is involved, but this is not extinguishment of the existence of the firm itself? Give reasons. [6+6 = 12 marks] Q 4 (a) What is a “Promissory Note” and what are its elements? S writes “I promise to pay ‘B’ a sum of Rs. 500, seven days after my marriage with ‘C’ ”. Is this a promissory note? (b) What is the minimum and maximum amount of bonus payable to an employee under the Payment of Bonus Act, 1965? [6+6 = 12 marks] Q 5 (a) Explain the concept of “Basic Wages” under the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. (b) Describe the privileges available to a Multi-State Cooperative Society under the Multi-State Cooperative Societies Act, 2002 [6+6 = 12 marks]. Q 6 (a) Discuss the restrictions on the powers of a society registered under the Cooperative Societies Act, 1912 to make loans and to contribute to charitable purposes (b) Describe the circumstances whereunder notice of dishonour is excused under the Negotiable Instruments Act, 1881 [6+6 = 12 marks]. Q 7 Answer any four of the following : (a) What do you understand by Pre-incorporation Contracts? Distinguish between Pre-incorporation contracts and Provisional contracts. (b) What is the procedure laid down in the provisions of the Companies Act, 1956 for converting a private company into a public company? (c) Can a company issue shares at discount? What is the law, in this relation, laid down in the Companies Act, 1956? (d) The Articles of Association of a Limited Company provided that ‘X’ shall be the Law Officer of the company and he shall not be removed except on the ground of proved misconduct. The company removed him even though he was not guilty of misconduct. Decide, whether company’s action is valid? (e) “Diminution of capital does not constitute reduction of capital within the provisions of the Companies Act, 1956,” – Comment. [5 x 4 = 20 marks] Q 8 (a) A company issued a prospectus. All the statements contained therein were literally true. It also stated that the company had paid dividends for a number of years, but did not disclose the fact that the dividends were not paid out of trading profits, but out of capital profits. An allottee of shares wants to avoid the contract on the ground that the prospectus was false in material particulars. Decide (b) Which of the institutions are regarded as “Public Financial Institutions” under the Companies Act, 1956? [5+5 = 10 marks] Q 9 (a) What is the concept of “charge” under the provisions of the Companies Act, 1956? Point out the circumstances whereunder a floating charge becomes a fixed charge (b) Explain the provisions of the Companies Act, 1956 relating to registration of a non-profit organisation as a company. What procedure is required to be adopted for the said purpose? (5+5 = 10 marks) Q 10 (a) What are the purposes for which “objects” can be altered by a company under the Companies Act, 1956? Briefly explain the procedure to be applied to such matters (b) Explain the concept of “Deemed Prospectus” under the Companies Act, 1956. Point out the circumstances whereunder issuing of prospectus is not mandatory (5+5 = 10 marks). C.A. PE-II – GROUP 1 - November – 2003 Questions 1 and 7 are
compulsory. Q 1 Answer any six of the following : (a) Explain the concept of ‘misrepresentation’ in matters of contract. Sohan induced Suraj to buy his motorcycle saying that it was in a very good condition. After taking the motorcycle, Suraj complained that there were many defects in the motorcycle. Sohan proposed to get it repaired and promised to pay 40% cost of repairs. After a few days, the motorcycle did not work at all. Now Suraj wants to rescind the contract. Decide giving reasons. (b) What are the differences between “negotiability” and “assignability”? (c) In what ways does a “Sale” differ from “Hire-purchase”? (d) 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? (e) The employer is a banking company. Point out so as to what items are required to be added to the “Net Profit” by the employer for calculating the “Gross Profit” in accordance with the First Schedule of the Payment of Bonus Act, 1965 (f) State the purpose for which Net Profits of a Multi-State Cooperative Society may be utilized under the provisions of the Multi-State Cooperative Societies Act, 1984. (g) What are the power of an “Inspector” under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952? (h) Explain the provisions regarding regulation of contribution made by the societies registered under the Cooperative Societies Act, 1912. [6 x 4 = 24 marks] Q 2 (a) Sunil delivered his car to Mahesh for repairs. Mahesh completed the work, but did not return the car to Sunil within reasonable time, though Sunil repeatedly reminded Mahesh for the return of car. In the meantime a big fire occurred in the neighbourhood and the car was destroyed. Decide whether Mahesh can be held liable under the provisions of the Indian Contract Act, 1872. (b) What are the implied conditions in a contract of ‘sale by sample’ under the Sale of Goods Act, 1930? State also the implied warranties operative under the said Act. [6+6 = 12 marks] Q 3 (a) What do you understand by “Agency by Ratification”? What is the effect of ratification? Point out any four elements of a valid ratification. (b) What do you understand by “Implied Authority” of a partner? Is such authority subject to any condition? Which of the acts of a Partner come within the implied authority under the Indian Partnership Act, 1932? [6+6 = 12 marks] Q 4 (a) What do you understand by “crossing of cheques”? What is the object of crossing? State the implications of the following crossings: (i) Restrictive crossing (ii) Not-negotiable crossing. (b) Describe the procedure provided under the Payment of Bonus Act, 1965 for computing the number of days for determining the amount of minimum bonus payable to an employee. How is proportionate reduction in bonus made? [6+6 = 12 marks] Q 5 (a) An employee leaves the establishment in which he was employed and gets re-employment in another establishment. He desires that his Provident Fund Account be transferred to the establishment wherein he has been employed. Explain the procedure laid down in the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 in this relation. (b) Describe the procedure of registration of a Multi-State Cooperative Society laid down in the Multi-State Cooperative Societies Act, 1984. Which are the documents required to be filed at the time of registration of such a society? [6+6 = 12 marks] Q 6 (a) Mohan, a member of a cooperative society, registered with unlimited liability, desires to withdraw from the membership of the society. Advice in the light of the provisions of the Cooperative Societies Act, 1912, whether Mohan can do so. What will be the consequences of such withdrawal from the society? (b) State the grounds on the basis of which a cheque may be dishonoured by a banker, inspite of the fact that there is sufficient amount in the account of the drawer [6+6 = 12 marks] Q 7 Answer any four of the following: (a) State the conditions of restrictions with which a private company is incorporated under the Companies Act, 1956. (b) Briefly explain the doctrine of ‘ultra vires’ under the Companies Act, 1956. What are the consequences of ultra vires acts of the company? (c) The Articles of Association of Mars Company Ltd. provide that documents may be served upon the company only through Fax. Ramesh dispatches 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 Ramesh suffers loss. Examine with reference to the provisions of the Companies Act, 1956: (i) Whether refusal of document by the company is valid? (ii) Whether Ramesh can claim damages on this basis? (d) State the conditions which are required to be fulfilled before declaration of “Interim Dividend” under the Companies Act, 1956. (e) Explain the provisions of the Companies Act, 1956 relating to the procedure to be followed for transacting business of the general meeting of members of a company through postal ballot [5 x 4 = 20 marks] Q 8 (a) A company was incorporated on 6th October, 2003. The certificate of incorporation of the company was issued by the Registrar on 15th October, 2003. The company on 10th October, 2003 entered into a contract which created its contractual liability. The company denies from the said liability on the ground that company is not bound by the contract entered into prior to issuing of certificate of incorporation. Decide under the provisions of Companies Act, 1956 whether the company can be exempted from the said contractual liability. (b) Dinesh, a director in a company, gave in writing to the company that notice for any General Meeting and the Board of Directors’ Meeting be sent to him at his address in India only by Registered Mail and for which he paid sufficient money. The company sent two notices to him, of such meetings, by ordinary mail, under certificate of posting. Dinesh did not receive the said notices and could not attend the meetings wherein some important decisions were taken. Dinesh challenges the legality of the meetings and the proceedings thereof on the ground of improper notice. Decide in the light of the provisions of the Companies Act, 1956: (i) Whether the contention of Dinesh is valid? (ii) Would your answer be still the same in case Dinesh remained outside India for two months (when such notices were given and meetings held) [5+5 = 10 marks] Q 9 (a) Explain the provisions of the Companies Act, 1956 relating to holding of Annual General Meeting of the company with regard to the following: (i) Period within which the first and the subsequent Annual General Meetings must be held. (ii) Business which may be transacted at an Annual General Meeting. (b) Explain the meaning of the term “Sweet Equity”. What are the provisions of the Companies Act, 1956 relating to issue of “Sweet Equity”? [5 + 5 = 10 marks] Q 10 (a) What are the provisions of the Companies Act, 1956 relating to the appointment of “Debenture Trustee” by a company? Whether the following can be appointed as ‘Debenture Trustees’: (i) A shareholder who has no beneficial interest. (ii) A creditor whom the company owes Rs. 499 only. (iii) A person who has given a guarantee for repayment of amount of debentures issued by the company. (b) Examine the provisions of the Companies Act, 1956 regarding ‘nomination’ in case of transmission of shares. [5+5 = 10 marks] C.A. PE-II – GROUP 1 - May – 2003 Questions 1 and 7 are
compulsory. Q 1 Answer any six of the following: (a) What is the status of a “finder of goods” under the Indian Contract Act, 1872? What are his rights? (b) Which are the essentials elements of a valid acceptance of a Bill of Exchange? An acceptor accepts a “Bill of Exchange” but write on it “Accepted but payment will be made when goods delivered to me is sold.” Decide the validity. (c) What are the consequences of “destruction of goods” under the Sale of Goods Act, 1930, where the goods have been destroyed after the agreement to sell but there the sale is affected. (d) Is it possible for the partners in a firm having majority to expel a partner under the provisions of the Indian Partnership Act, 1932? Does the firm get dissolved if the expulsion of a partner is not valid? (e) Explain the meaning of “salary” and “wages” under the Payment of Bonus Act, 1965. (f) A Multi-State Cooperative Society is desirous of amending its bye-laws. Advise the society as to what procedure is required to be followed for the said purpose under the Multi-State Cooperative Societies Act, 2002? (g) How is the Central Board of Trustees constituted under the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952? Explain its composition. (h) What are the conditions of registration of a society under the provisions of the Cooperative Societies Act, 1912? [6 x 4 = 24 marks]. Q 2 (a) Explain the general rules of relating to ‘Acceptance’ under the Indian Contract Act, 1972. (b) What do you understand by “Caveat-emptor” under the sale of Goods Act, 1930? What are the exceptions to this rule? [6+6 = 12 marks] Q 3 (a) What tests can be applied in determining whether a person is an agent of another? State any five circumstances whereunder an agent is personally liable to a third party for the acts during the course of agency. (b) What is the procedure of registration of a partnership firm under the Indian Partnership Act, 1932? What are the consequences of non-registration? [6+6 = 12 marks] Q 4 (a) A issues a cheque for Rs 25,000/- in favour of B. A has sufficient amount in his account with the Bank. The cheques was not presented within reasonable time to the Bank for payment and the Bank, in the meantime, became bankrupt. Decide under the provisions of the Negotiable Instruments Act, 1881, whether B can recover the money from A? (b) In an accounting year, a company to which the payment of Bonus Act, 1965 applies, suffered heavy losses. The Board of Directors of the said company decided not to give bonus to the employees. The employees of the company move to the Court for relief. Decide in the light of the provisions of the said Act whether the employees will get relief? [6+6 = 12 marks] Q 5 (a) Describe the provisions relating to contribution by the employees and the employer under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952. (b) State the law relating to appointment and powers of the Central Registrar under the Multi-State Cooperative Societies Act, 2002. [6+6 = 12 marks] Q 6 (a) Sohan is a member of a cooperative society registered with the unlimited liability under the Cooperative Societies Act, 1912. Holding shares of the society for ten months, Sohan transfers his shares to Mohan. Decide whether transfer of shares in favour of Mohan is valid? (b) What do you mean by an acceptance of a negotiable instrument? Examine validity of the following in the light of the provisions of the Negotiable Instrument Act, 1881: (i) An oral acceptance (ii) An acceptance by mere signature without writing the word “accepted”. [6+6 = 12 marks] Q 7 Answer any four of the following (a) Briefly explain the doctrine of “Constructive Notice” under the Companies Act, 1956. Are there any exceptions to the said doctrine? (b) Explain the concept of “Shelf Prospectus” in the light of Companies (Amendment) Act, 2000. What is the law relating to issuing and filing of such prospectus? (c) Explain clearly the concept of “Perpetual Succession” and “Common Seal” in relation to a company incorporated under the Companies Act, 1956. (d) What are the conditions and procedure whereunder shares may be forfeited under the Companies Act, 1956? (e) What do you understand by “share-warrant’? How is a share-warrant different from “share certificate”? [5 x 4 = 20 marks] Q 8 (a) 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 voilative of the provisions of the Companies Act, 1956. Comment. (b) The Directors of a company registered and incorporated in the name “Mars Textile India Ltd.” desire to change the name of the company entitled “National Textiles and Industries Ltd.” Advise as to what procedure is required to be followed under the Companies Act, 1956? [5+5 = 10 marks] Q 9 (a) The Board of Directors of a company decide to pay 5% of issue price as underwriting commission to the underwriters. On the other hand the Articles of Association of the company permit only 3% commission. The Board of Directors further decide to pay the commission out of the proceeds of the share capital. Are the decisions taken by the Board of Directors valid under the Companies Act, 1956 ? (b) Explain the provisions of the Companies Act, 1956, relating to establishment of an investors education and protection fund. [5+5 = 10 marks] Q 10 (a) Advise the Board of Directors of a public limited company in relation to following matters, under the provisions of the Companies Act, 1956 : (i) Sources out of which the company can declare dividend. (ii) Transfer of profits to reserves before declaring dividend, for a particular financial year. (b) A, who holds one share certificate of 1000 Equity shares in a company, wants to transfer 300 shares in favour of B. Explain the procedure to be followed for executed the partial transfer under the provisions of the Companies Act, 1956. [5+5 = 10 marks] C.A. PE-II – GROUP 1 - November – 2002 Questions 1 and 7 are
compulsory. Q 1.Answer any six of the following (a) What is meant by ‘Undue Influence’? ‘A’ applies to a banker for a loan at a time where there is stringency in the money market. The banker declines to make the loan except at an unusually high rate of interest. A accepts the loan on these terms. Whether the contract is induced by undue influence? Decide. (b) Explain the meaning of ‘Holder’ and ‘Holder in due course’ of a negotiable instrument. The drawer, ‘D’ is induced by ‘A’ to draw a cheque in favour of P, who is an existing person. ‘A’ instead of sending the cheque to ‘P’, forges his name and pays the cheque into his own bank. Whether ‘D’ can recover the amount of the cheque from ‘A’s banker. Decide. (c) What are the implied warranties in a Contract of Sale under the Sale of Goods Act, 1930? (d) What acts do not fall within the implied authority of a partner under the Indian Partnership Act, 1932? (e) Explain the meaning of ‘Allocable Surplus’ and Available Surplus’ stated in the Payment of Bonus Act, 1965.(f) State the conditions which are essential for the registration of ‘Multi-State Cooperative Society’ under the Multi-State Cooperative Societies Act, 1984. (g) State the kinds of establishments which are not covered under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. (h) State the ways in which a society may invest its own funds under the Cooperative Societies Act, 1912. Whether such funds may be divided among the members of the Society? [6 x 4 = 24 marks]. Q 2. (a) ‘A’ stands surety for ‘B’ for any amount which ‘C’ may lend to B from time to time during the next three months subject to a maximum of Rs. 50,000. One month later A revokes the guarantee, when C had lent to B Rs. 5,000. Referring to the provisions of the Indian Contract Act, 1872 decide whether ‘A’ is discharged from all the liabilities to ‘C’ for any subsequent loan. What would be your answer in case ‘B’ makes a default in paying back to ‘C’ the money already borrowed i.e. Rs. 5,000? (b) Explain the provisions of law relating to unpaid seller’s ‘right of lien’ and distinguish it from the “right of stoppage the goods in transit”. [6+6 = 12 marks] Q 3. (a) State the grounds upon which a contract may be discharged under the provisions of Indian Contract Act, 1872. (b) Whether a minor may be admitted in the business of a partnership firm? Explain the rights of a minor in the partnership firm. [6+6 = 12 marks]. Q 4. (a) When a bill of exchange may be dishonoured by ‘non-acceptance’ and ‘non-payment’ under the provisions of Negotiable Instruments Act, 1881? (b) X, a temporary employee drawing a salary of Rs. 3,000 per month, in an establishment to which the Payment of Bonus Act, 1965 applies was prevented by the employers from working in the establishment for two months during the financial year 2001-2002, pending certain inquiry. Since there were no adverse findings ‘X’ was re-instated in service, later, when the bonus was to be paid to other employees, the employers refuse to pay bonus to ‘X’, even though he was worked for the remaining ten months in the year. Referring to the provisions of the Payment of Bonus Act, 1965 examine the validity of employer’s refusal to pay bonus to ‘X’. [6+6 = 12 marks] Q 5 (a) In what way is the “Employee’s Deposit-linked Insurance Scheme” regulated under the provisions of the Employee’s Provident Funds and Miscellaneous Provisions Act, 1952 ? Explain. (b) Explain the manner in which ‘Net Profits’ of a Multi-State Cooperative Society can be appropriated. Examine also the validity of the following acts of society during a particular year: (i) The society declares dividend 11% on its paid-up Share Capital. (ii) The society decides to donate a sum of Rs. 10 lakhs out of its ‘Net profits’. [6+6 = 12 marks]. Q 6. (a) A Cooperative Society with unlimited liability wants to expel its member, who prejudices the society by his misconduct. For this purpose the society wants to amend its bye-laws. State the grounds which should be included in the bye-laws of the society so as to expel such member from the membership of the society. (b) Referring to the provisions of the Negotiable Instruments Act, 1881, examine the validity of the following Promissory Notes: (i) I owe you a sum of Rs. 1,000. ‘A’ tells ‘B’. (ii) ‘X’ promises to pay ‘Y’ a sum of Rs. 10,000, six months after ‘Y’s marriage with ‘Z’. [6+6 = 12 marks]. Q 7. Answer any four of the following: (a) Explain clearly the meaning of a ‘Private’ and ‘Public’ Company after Companies (Amendment) Act, 2000. (b) Describe the ways to become a member of a company. A company issued 20 partly paid equity shares and registered them in the name of the minor describing him as minor. The father of the minor signed the application on the minor’s behalf. After some time company went into liquidation. The company filed a suit against father of the minor to recover the remaining amount on the shares. Whether the company will succeed? Advise. (c) Whether a company can issue shares at premium ? State the purposes for which the Securities Premium account can be used under the provisions of the Companies Act, 1956. (d) In what say does the Companies Act, 1956 regulate the holding of an Annual General Meeting by a public limited company ? Explain. (e) Explain the limitations relating to alternation of Articles of Association of a company. [5 x 4 = 20 marks]. Q 8. (a) Explain clearly the meaning of Lifting the Corporate Veil, as applicable in case of companies incorporated under the Companies Act, 1956. Under what circumstances the veil of a company can be lifted by the court? (b) Who is an ‘Expert’? When an expert is not liable for the mis-statement in the prospectus of a public company? [5+5 = 10 marks] Q 9. (a) ABC Company Limited at a general meeting of members of the company pass an ordinary resolution to buy-back 30% of its Equity Shares Capital. The Articles of the Company empower the company for buy-back of shares. The company further decide that the payment for buy-back be made out of the proceed of the company’s earlier issue of equity shares. Explaining the provisions of the Companies Act 1956, and stating the sources through which the buy-back of companies own shares be executed, Examine. (i) Whether company’s proposal is in order? (ii) Would your answer be still the same in case the company instead of 30%, decide to buy-back only 20% of its Equity Share Capital? (b) State the types of debentures which may be issued by a public company. [5+5 = 10 marks] Q 10. (a) Define the term ‘Small Depositors’. State the legal provisions relating to acceptance, repayment and further deposits of such small depositors under the Companies Amendment Act, 2000. (b) ‘A’ commits forgery and thereby obtains a certificate of transfer of shares from a company and transfers the shares to ‘B’ for value acting in good faith. Company refuses to transfer the shares to ‘B’. Whether the company can refuse? Decide the liability of ‘A’ and of the company towards ‘B’. [5+5 = 10 marks]. |