LAB Mid-Term Exam Paper

Sections C & D

Indian Institute of Management, Rohtak

Post Graduate Programme

LEGAL ASPECTS OF BUSINESS

Mid-term Exam Question Paper for Sections C & D
4th August, 2020

Instructor: Prof. Anil B. Suraj

absuraj@iimb.ac.in

Total Marks = 30 Duration = 2 hours Total No. of Pages = 5

Instructions:
1. All questions need to be attempted and they carry equal marks.
2. Please ensure that your answers suitably denote the respective Case and Question numbers.
For example, please specifically mark your response as Case-1, Q.1
3. Reference can be made to Acts, books, notes or any other textual source of information.
4. Candidates are strictly prohibited from sharing any materials with each other and such acts
would amount to exam malpractice.

CASE - 1

M/s. IT Processing Using Rare Expertise (IT-PURE), is a leading IT Service

provider in New Delhi, India. It has several clients in India and across the globe
and, for more than a decade, is known for its timely delivery of promised
services. IT-PURE has a full-fledged ‘Sales and Delivery’ division (SADD) that
negotiates the terms and conditions of various service level agreements that
form the basis for the services being provided and priced accordingly. There is

Prof. Anil B. Suraj

 LAB Mid-Term Exam Paper
Sections C & D

also a ‘Law and Governance’ division (LAG) that reviews such contracts as
negotiated and approved by the SADD.
IT-PURE has an internal ‘code of business conduct’ that prescribes a
rigorous internal discipline with respect to finalization of contracts. No contract
is said to be final unless there is a clear approval from LAG. However, while this
is the stated principle, in practice IT-PURE is known among the clients for not
waiting till the approval of LAG to begin the projects and delivery of services, as
being competitive is given priority over the review of finer details by LAG.
M/s. Theist AG, a renowned German listed firm, negotiated an IT project
with IT-PURE for the period 1st July, 2018 to 31st August, 2019. The project
involved development of a customer relationship management module, which
was to be based on an earlier project that IT-PURE has undertaken in the same
domain. IT-PURE had bid for this project with the assurance that there was a
blueprint to follow and they do not need to deploy any resources outside India
for customizing it to the specific requirements of the client. In May 2018, M/s.
Theist AG sent a final draft of the mutually negotiated contract terms and
conditions in hard copy to the Vice-President, SADD with a covering letter also
stating that – “Kindly ensure the prompt return of the same print copy with the
authorized signatures and the official seal of IT-PURE.” This print copy was duly
forwarded to LAG for review, while the SADD initiated the required activities to
undertake the project in right earnest.
In November 2018, LAG finally reported that the draft is fine, but for some
minor modifications. When the Vice-President, SADD communicated the same
to his counterpart in M/s. Theist AG, he was shocked to know their response. He
was informed that since there was no response from IT-PURE, M/s. Theist AG
had gone ahead and hired another IT firm for the said project.

Prof. Anil B. Suraj

 LAB Mid-Term Exam Paper
Sections C & D

IT-PURE has approached the New Delhi District Civil Court for an appropriate
remedy.

Case-1 Questions

Q1. Identify the relevant issues to legally resolve this matter.

Q2. What are the legal/contractual grounds for IT-PURE to claim its remedies?

Q3. What are the legal/contractual grounds for M/s. Theist AG to claim its remedies?

Q4. Argue for or against the upholding of the contested contract.

Q5. Suggest two feasible business practices as lessons from this dispute and decision.

=======================

CASE – 2

M/s. Bell Co. was nominated by the Government as the prime contractor
for realizing the modernization plan of Police forces across the nation. In this
regard, M/s. Bell floated a Request for Proposal (RFP) for procurement of Digital
Radio Trunking System, also popularly known as Terrestrial Trunked Radio (in
short `TETRA'). The RFP called upon the vendors to make technical and
commercial proposals, and in a pre-bid meeting it was also specified that the
commercial offers could be based on an estimate of a minimum of 100 systems.

Prof. Anil B. Suraj

 LAB Mid-Term Exam Paper
Sections C & D

This deal attracted considerable public/media attention, and in a press

conference the CEO of M/s. Bell announced that this is indeed a significant
country-wide project of modernization that shall involve commission and
installation of more than 1000 units of TETRA systems. Eventually, nine bidders
submitted their bids in response to the RFP and upon the technical bids being
considered, there were two bids that were finally shortlisted – those of M/s. Me-
Too and M/s. Y-Not, with the following pricing details:

NAME OF THE BIDDER UNIT PRICE QUOTE TOTAL QUANTITY

M/s. Y-Not Euros 150.00 Per requirement
M/s. Me-Too Euros 125.00 Minimum of 500 units

Based on the pricing information above, M/s. Bell finally chose M/s. Me-
Too as the L-1 (lowest bidder).
This decision was challenged by M/s. Y-Not on the ground that M/s. Me-
Too’s bid was invalid and should have been rejected by M/s. Bell. In the absence
of any constructive response from M/s. Bell, M/s. Y-Not has filed a petition
before the appropriate Court of India that this process needs to be invalidated
on various grounds, including, unreasonableness in evaluating its bid and
wrongful discrimination.

Case-2 Questions

Q1. Identify the relevant issues to legally resolve this matter.

Q2. What are the legal/contractual grounds in favour of M/s. Y-Not?

Q3. What are the legal/contractual grounds in favour of M/s. Me-Too?

Prof. Anil B. Suraj

 LAB Mid-Term Exam Paper
Sections C & D

Q4. Argue for or against the upholding of the identified L-1.

Q5. Suggest two feasible business practices as lessons from this dispute and decision.

===========End of Paper============

Prof. Anil B. Suraj