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Q1. Discuss the sources Indian business laws? Answer.

Sources of Indian business laws The oldest business law which was applicable in India was the barter system. Business laws existed even under the monarchy systems prevailing in most of the princely states. However, we can trace the background of modern business laws in India to 1600 A.D. Most Indian laws in general and business laws in particular have their source in the British legal system. The foundation of the East India Company not only initiated a drastic shift in the Indian political scenario but also marked a major milestone in the legal history of India. The British Crowns charter of 1600, under which the company was set up, gave it sweeping juristic powers. The Company was legally empowered to make laws for its government and to impose such fines and penalties as might be necessary to impose these laws. It is interesting to note that till the early 1900s, most of the British law was not a written law. Only certain portions like the Magna Carta existed in writing. As Britain colonised most of the world, its trade and commerce grew. At times, disputes regarding trading issues occurred and were taken to the kings court. All such cases were decided according to the usage and custom of the community and the prevailing concept of equality and justice. Judges relied heavily on precedence in deciding cases. When a number of similar cases were decided alike, the reasoning and principle underlying the judgment acquired the force of an unwritten law. As more and more such laws emerged, they became part of what is called Common Law. As British trade and commerce flourished, its influence increased in the world. The increase in trade across the world raised newer issues and disputes for which the common law was not adequate. New laws were required to resolve them. That is when the practice of enactment of statutory laws to regulate trade and commerce started. The Contract Act, the Sale of Goods Act and the Negotiable Instruments Act are example of such enactments. As more and more enactments came into force, it was decided that the law be systematised and written down as Acts. By the early 1900s the British Government got the Common Law and the enactments written down as Acts. When the British colonised India, they needed a body of law to govern this vast and diverse nation. They borrowed, adapted and imposed many Acts existing and prevailing in Britain as Acts applicable in India. Some examples are The Indian Contract Act, 1872, the Indian Sale of Goods Act, 1930 and the Negotiable Instruments Act, 1881 and so on. Thus, most of the business laws of India have their roots in the British laws such as: 1. English mercantile law: Lex mercatoria is a Latin expression meaning law merchant. In business context it refers to a body of trading principles used by the merchants throughout Europe in the medieval ages. Evolving from a system of customs and best practice, it functioned as the international law of commerce. It was enforced through a system of merchant courts along the main trade routes. The English Mercantile Law constitutes the foundation on which the superstructure of the Indian Mercantile Law has been built. 2. Statutory Law: Statutory law is a written law enacted by the legislature or other authorised governing body such as the executive branch of the government. Statutory law contains all laws enacted to facilitate, regulate or clarify the process of governance, to improve civil order, codify or amend existing laws, or to grant special treatment to an individual or company. In the Indian context, all laws are statutory. When a Bill passed by the Parliament is signed by the President of India, it becomes an Act or a Statute. The bulk of Indian Mercantile Law is statutory law. 3. Judicial Decisions: The past judicial decisions or precedents of courts are important sources of law. Sometimes existing statutory provisions are not adequate enough to resolve an issue. In such cases the court adjudicates according to past precedents on similar matters. The precedents set by the higher courts have a More more info Please visit http://www.smustuff.com

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binding force on lower courts and the precedents set by the courts of the same status like High Courts of different states, exercise a persuasive power over each other. 4. Customs and usages: Like all other aspects of human activities, business and trade also rely heavily on customs and usages, practices and business dealings related to a particular trade. In many cases such practices acquire a binding and legal force on the parties. For example, as per the mercantile usage prevailing in the Delhi Iron Market among big merchants, no interest can be charged on the unpaid price for transactions before 1917. However, the custom or usage must be certain, reasonable and well known to have a binding force.

Q2. What are the principles underlying the laws of Agency? Give the essential elements of a Contract of Agency. Answer.
The law of agency is based on the following principles: 1. A person can get anything that he can do himself, done by another person authorised by him except when the act is of a personal nature e.g., he cannot ask someone else to get married on his behalf. By engaging an agent, he enters into a relationship which is considered a contract under agency 2. An act done by an authorised agent is deemed to have been done by the principal himself. The essentials of a contract of agency are: The Principal is bound by the acts of his authorised Agent. The Act performed by the Agent is deemed to have been performed by the Principal himself. The Principal is answerable to third parties for the acts of his Agent. Consideration is not necessary to create an agency. Principal must have the capacity to contract in order to employ an Agent.

Q3. What is meant by crossing of a cheque? What are the various types of crossing in common use? Answer.
A cross cheque is one on which two parallel transverse lines with or without the words & Co. are drawn. The payment of such a cheque can be obtained only through a banker. Thus, crossing is a direction to the drawee banker to pay the amount of money on a crossed cheque generally to a banker or a particular banker, so that the party who obtains the payment of the cheque can be easily traced. Types of crossing There are two types of crossing: 1. General crossing 2. Special crossing Another type of crossing known as restrictive crossing has developed out of business usage. 1. General crossing: A cheque is said to be crossed generally where its bears across its face an addition of : More more info Please visit http://www.smustuff.com

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i) The word and company or any abbreviation thereof, between two parallel transverse lines, either with or without the words not negotiable. ii) Two parallel transverse lines simply, either with or without the words not negotiable (Sec. 123). 2. Special crossing: Where a cheque bears the name of a banker across its face, either with or without the words not negotiable, the cheque is deemed to be crossed specially. Transverse lines are not necessary in case of special crossing. The payments of specially crossed cheques can be obtained only through the particular bankers whose name appears across the face of the cheque or between the transverse lines. 3. Restrictive crossing: In addition to the two statutory types of crossing, there is another type which has been adopted by commercial and banking usages. Here, the words A/c payee are added to the general or special crossing.

Q4. List the various restrictions on a private company. Answer.

Private company: A private company is one which by its Articles of Association, limits the right of members to transfer its shares and prohibits any invitation to the public to subscribe to its shares and debentures. In this, the number of its members is limited to fifty (excluding its past and present employees). The minimum paid up value of such a company is one lakh rupees (Rs. 100000). The minimum number of shareholders in such a company is two and the company is to add the words private limited at the end of its name. Private companies do not involve participation of public in general. Smaller resources: A private company cannot have more than fifty members. Its credit standing is lower than that of a public company. Therefore, the financial and managerial resources of a private company are comparatively limited. Lack of transferability of shares: There are restrictions on the transfer of shares in a private company. As a result a shareholder cannot leave a private company easily and quickly. Poor protection to members: A private company enjoys several exemptions from various provisions of the Companies Act. Minority members may suffer at the hands of the majority members. Dissatisfied members cannot cut off their connection with the company except at a loss. No valuation of investment: Shares of a private company are not listed on stock exchange. There are no regular dealings in these shares. A shareholder cannot, therefore, know the real value of his investment in a private company. Lack of public confidence: Public has little confidence in a private company because its affairs are unknown and it is not subject to strict control under the law.

Q5. What remedial or penal measures are stipulated for contravention of the provisions of the Competition Act, 2002?
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The Competition Act stipulates that if any person contravenes, without any reasonable ground, any order of the Competition Commission of India or any condition or restriction subject to which any approval, sanction, direction or exemption in relation to any matter has been accorded, given, made or granted under the Competition Act or fails to pay the penalty imposed under this Act, he shall be liable to be detained in civil prison. The CCI has the power to act as an adjudicator to resolve issues pertaining to competition. Any person, consumer or enterprise can approach the Commission if it feels adversely affected by unfair competition practices adopted by any enterprise. CCI has the mandate to receive and address complaints from all the following: any person, where person includes individual, company, firm, association, statutory corporation, government company, body corporate, legal authority etc. any consumer i.e., anyone who buys goods or avails some service for consideration association of persons or consumers or trade associations reference by central / state government or statutory authority Section 27 of the Competition Act provides various remedies for restoring competition and penalising the offenders in case of contravention of this law. They are: passing cease and desist order declaring agreements having appreciable adverse effect on competition in India as void declaring agreements having appreciable adverse effect on competition to be void imposing penalty up to 10 % of average turnover for the last three preceding financial years on defaulting enterprises in case of cartels, imposing penalty up to 10% of the turnover or three times of cartelised profit, whichever is higher awarding compensation or damages as per Section 34 of the Act directing or ordering modifications in agreements if they are deemed to have or are likely to have adverse effect on competition in case of combinations, they can be approved with or without modification or even be refused approval in case of dominant enterprise, order can recommend division of dominant enterprise as provided in Section 28 of the Act Section 18 has been provided whereby the Commission, with the prior approval of the Central Government, may enter into arrangements and memorandum of understanding with foreign agencies and enforce the law by way of effects doctrine. Other salutary features of the Act i. Jurisdiction of civil courts (including sectoral regulators when functioning as civil courts) to adjudicate issues relating to competition matters have been expressly excluded under section 61 of the Act. ii. Every order passed by the Commission is appealable. Writ jurisdiction of High Courts is available since the new Commission continues to be an instrumentality of the state. iii. Review and rectification of orders of Commission have been provided for under sections 37 and 38 respectively. iv. Under section 35 of the Act, chartered accountants, company secretaries, cost accountants and advocates have been made eligible to cause appearance for and on behalf of their respective clients. The Competition Act, 2002 is truly reflective of the changing economic scenario of India. The economic scenario of India can be best described as a mixed economy. It has not yet become a totally free economy. Therefore, the Competition Act has to addresses the ground realities that exist today. However, the Act has

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gone a long way in addressing the issues relating to the competition policy and boosting Indias position in international trade and business.

Q6. Why are Environmental Laboratories set up? What is the process of analysing a sample in such laboratories? Answer.
The Central Government may establish one or more environmental laboratories or institutes as environmental laboratories, so as to carry out the functions under this Act. It has the power to decide the rules for the functions of the laboratory, the procedure of submission of samples of air, water, soil or other substance for analysis or tests, the form of report and the requisite fees to be paid to conduct the required tests. It can appoint or recognise such persons according to certain prescribed qualifications to be Government Analysts for the purpose of analysis of sample of air, water, soil or other substance sent for analysis to any environmental laboratory. Any report generated by an analyst appointed by the government is said to be the final report providing an evidence of facts for the concerned industry. Any officer empowered shall have power to take for the purpose of analysis, samples of air, water, soil or other substance from any factory, premises or other place. The result of any analysis of a sample taken shall not be available for evidence in any legal proceeding unless it is rightly proved. It is to be noted that any person taking the sample shalla) Serve a notice to the occupier or the manager of the factory or premises of his/her intention to have it analysed. b) The sample should be collected in the presence of the occupier for analysis. c) The sample collected should be placed in a sealed container which shall be marked and sealed and signed both by the person taking the sample and the occupier. d) Sample collected should be sent without delay to the laboratory, recognised by the Central Government. If a notice was served beforehand for collection of sample and the occupier or the manager of the factory or premises is willfully absent, the sample collected by the authorised person for analysis is to be placed in a container which shall be marked and sealed and shall also be signed by the person taking the sample. If the occupier is present at the time of taking the sample but refuses to sign on the marked and sealed container, the container shall be sent without delay for analysis to the laboratory, recognised by the Central Government, by the person taking the sample. He/she shall inform he Government Analyst appointed, in writing, about the willful absence of the occupier or his/her refusal to sign the container or containers.

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