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PCE
GROUP
I - PAPER3

IPce

MAY2010

GROUP-IPAPER.2
BUSINESSLAW. COMMUNICATION
AND ETHICS

LAW,ETHICSANDCOMMUNICATION
Roll

No...............................

Total No. of Questions-16]

[Total

No. of Printed

Pages-12
4

Time Allowed-3

Maximum

Hours

M2rrks-100

WWF
Answers to questions are to be given only in English except in the case of candidates
who have opted for Hindi medium. If a candidate who has not opted for Hindi
medium, answers in Hindi, his answers in Hindi will not be valued.
Marks

PART-I
Answer

all the questions.

1. (a) Z rent out his house situated

at Mumbai to W for a rent of Rs. 10,000 per

month. A sum of Rs. 5 lac, the house tax payable by Z to the Municipal
Corporation being in arrears, his house is advertised for sale by the corporation.

W pays the corporation,

the

sum

due

from

Z to avoid

legal

consequences.

Referring to the provisions of the Indian Contract Act, 1872 decide whether
W is entitled to get the reimbursement
of the said amount from Z.
(b)

State with reasons whether

(i) Employees
agreement
(ii) Ratification
defective.

(c)

the following

can relinguish
with employer.

their

right

statements
to receive

are correct or ~ncorrect : 2xl=2

minimum

of agency is valid even if knowledge of the principal

.

bonus by an
is materially

3x1=3

Pick out the correct answer from the following and give reasons:

"

(i) X sells the goodwill of his retail store to Y for R~. 5 lac, and promises not
to carryon the same business forever and anywhere in India. Is the
agreement:
1. valid

(E&H)

2.

void

3.

voidable

4.

illegal.

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p.T.a.

..

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(ii) A w}thoih B's. au.thority let" outs B's flat to C. Afterwards

of the flat , from C. It is an agency by : .
1.

holding

2.

estoppel

3..

ratification

4.

necessi ty.

(iii) P, obtains

2. (a)

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..

:\

('

Marks
B accepts rent
..

out

.a cheque drawn by M by way of gift. Here P is a :

1.

holder

2.

holder for value

3.

holder

4.

N one of the above.

in due course

UMC Limited has only 7 shareholders

having fully paid-up shares. On 30th
April, 2009, all the shares of X (a shareholder of the company) are sold to Y
(another shareholder of the company) in an auction by the order of the court.
Z, (a shareholder of the company) was in USA for a business trip from January
and thus he was not aware of the developments. The company continues to
carryon its business thereafter. In December, 2009, the company borrowed a

sum of Rs. 5 lac from the Unique Bank. Later, the company was wound up
and the Assets of the company were not sufficient for. the payment of its
Liabilities. The Bank filed a suit against Y and Z for recovery of the said loan
from them. Decide the Liabilities ofY and Z under the provisions of Companies
Act; 1956. Would your answer be the same, if the said: loan was taken in the
month of March, 2009 ?
(b)

State with reasons

whether

(i) Issue of debentures

(m A
. (E&H)

private

company

the following statements

are correct or incorrect:

with voting rights in not permissible.

is required

to hold the statutory

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meeting.

2x1=2

'""

(3 )

Marks

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(c) Pick out the correct answer
(i) Contracts

entered

into by a company

is entitled to commence

1. . provisional

pre- incorporation

3.

both 1 and 2

4.

N one

of the

J accepted
and

commission

of the issued

price of shares

2.

2.5 percent

of the issued

price of shares

3.

5.0 percent

of the issued

price of shares

4.

5.5 percent

of the issued

price of shares

of the following

2.

to alter the articles of association

3.

to reduce the share capital

4.

to declare dividends.

the name

a bill of exchange

and

over the proceeds

cancelled.

faith and

Negotiable

having

pieces with

the intention

to have
and

for value. Is J liable to pay

Act, 1881

\. .

the two

it and

the bill under

reached

threw

pieces together,

folded for safe custody,

it ultimately

the

L, who

the provisions

rather
took

it

of the

WWF

(E&H)

been

of cancelling

pasted

of getting it discounted

failed to discou.nt it returned

up the pieces and

put it into circulation

Instruments

resolution?

gave it to K for the purpose

that the bill seemed

K

not exceed:

of the company

to J. K

the pieces in the street. K picked

in good

ordinary

to change

bill to 'J.J tore the bill in two

than

required

1.

manner

before it
4

on shares must

2.0 percent

one

and

contracts

1.

handing

in such

after its incorporation

are called:

above.

(ii)The underwriting

3.

business

contracts

2.

(iii)Which

3x1=3

from the following and give reasons:

P.T.D.

,...

'---'

(4 )
WWF
,

Marks

'

4. In 2009, the Electronics Corporation, a Public

Sector
establishment
.
.
Department

of Science and Technology,

Government

of Rajasthan

under the

starts

to sell

mobile sets manufactured

by it, in addition to T.V. sets, so as to compete with
private sector establishments
of mobile sets in the market. The income from sale
of mobile sets is 30 percent

of the gross income of the Corporation.

The employees

of the Corporation went to strike for demand of Bonus. Decide, whether the demand
of the employees is tenable under the provisions
of the Payment of Bonus
Act; 1965. Would your answer
is only 10 percent
5. R, a 57 years
Presiding

be different

if the income from sale of mobile sets

of the gross income of the Corporation.

old district

judge

was appointed

Officer of the Employee's

Provident

by the Central
Funds

Government

Appellate

Tribunal

as

for a

period of five years. After three years, he (R) resigns from his office and ceases to
work with immediate
was not appointed

effect without

handing

by the Government

till that date. Examine

action to cease work under the provisions

Miscellaneous Provisions Act, 1952.
6. S is employed in Golden ice-cream
was in operation
in continuous
whether

of the Employee's

factory, a seasonal

during

this period. However,

to the provisions

S is entitled

to gratuity

of the pay~ent

the validity

Provident

establishment.

for four months only during the financial

service

days. Referring

over the charge to his successor, who

of R's

Funds

and

The factory

year 2009-10. S was not

he has worked only for sixty

of Gratuity

Act, 1972 decide

payable under the Act. Would you answer be the

sa,me in case S works for 100 days?

7. J held 100 partly paid up shares of LKM Limited. The company asked him to pay
the final call money on the shares. Due to some unavoidable circumstances he was
unable to pay the amount of call money to the company. At a general meeting of
the shareholders,
the chairman disallowed him to caste his vote on the ground
that the articles

do not permit

a shareholder

on the shares held by him. J contested

the provisions
valid.
(E&H)

of the Companies

to vote if he has not paid the calls

the decision of the Chairman.

Act, 1956 decide whether

WWF

Referring

the contention

to

of J is

-'
(5 )

Marks

WWF

8. The object clause of the MemoranduTI?- of Association of RST Limited authorises

it to publish and sell text-books for students. The company, however, entered into
an agreement with Q to supply 100 laptops of worth Rs. 5 lac for resale purposes.
Subsequently,
the company refused to make payment on the ground that the
transaction was ultravirus the company. Examine the validity of the company's
refusal for payment
9. K, a member
meeting

to Q under the provisions

of MNO Limited,

of the company.

Later

appoints

of the Companies

Act, 1956.

L as his proxy to attend

he (K) also attends

the meeting.

10. Explain the 'MCA 21 Program'

the general
Both K (the

member). and L (the 'proxy) voted on a particular resolution in the meeting.

vote was declared invalid by the chairman stating that since he has appointed
proxy and L's vote has been considered
Chairman. Decide, under the provisions
objection shall be taxable.

4
.,

..

K's
the

as valid. K objects to the decision of the

of the Companies Act, 1956 whether K's

introduced

by the Government

of India

to develop

computerized environment for company law. How does it serve the interest of all
the stakeholders
of a company, corporate professionals and the public at large?
PART-II
Answer all the questions.
11. (a)

(b)

What is meant by Corporate Governance?

Governance.
Explain

12. Explain

the concept of Green Accounting

the various

safeguards

faced by an accountirg
13. State with reasons

that

should be adopted

the following statements

(i) Corporate
Social Responsibility
substainable
development.

(E&H)

system.
for overcoming

threats

and finance professional.

whether

(ii) A good environmental

Explain the benefits of Good Corporate

practice

is closely

improves
WWF

are correct or incorrect:

linked

corporate

with

the principles

2.lx2=5
2
of

performance.
P.T.O.

.,

. ..
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(6 )
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Marks

PART-III
Answer
14. (a)
(b)

Explain

the functions

The statutory
registered

15. The Board

NaIDA
company.
prepare

of interpersonal

meeting

meeting

of Directors

As a secretary

of the shareholders

of RSP Limited

agrees

executive

16. State the contents

that are required

with X to hire his (X's) flat at

\ --

and tbeboard

office of the
asks you to

Draft a lease deed.

for drafting

WWF

(E&H)

of the company.

of the Board

the lease deed for the agreement.

2010 at its

of the company, draft the minutes

on lease' for ten years @ Rs. 20,000 per month for marketing
You are a senior

communication.

of PQR Limited was held on 20th January,

office at Kolkata.

of the statutory

all the questions.

an Annual Report of a Company.

.
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