INDIAN INSTITUTE OF MANAGEMENT KOZHIKODE

EPGP

END-TERM EXAMINATION

Name: Roll No.:

Course Title Business Laws

Instructor Deva Prasad M
Duration and Mode 1 hour 30 minutes (Open-book exam)
Maximum marks 50 marks
Term & Year EPGP -13 Quarter II-2021 (Section D )
Instructions

1. Mention your name and roll number clearly on the answer script.
2. This is an open-book exam. Answers have to be submitted in the word-document format
3. Marks will be awarded for the most appropriate answers. Clear and to-the-point answers
are appreciated.

All the best for the exam!

Question 1 (10 marks)

“The Board of Maruti Suzuki India at its meeting held on 28 January 2021 has approved the
amendment in the Objects Clause of the Memorandum of Association (MoA) of the Company
for inclusion of the following:

To carry on the business of (i) operating/maintaining/availing/providing web-based services,

information technology platforms and other IT-enabled services on digital and electronic
networks for facilitating sale and/or provision of goods and services, and to undertake all
activities that are incidental or ancillary thereto, including, but not limited to:

(a) partnering with third party operators and service providers for the
operation/maintenance/availing/provision of such platforms and ancillary services;

(b) levying fees/charges for providing such platforms;

(c) providing advertising space to third party sellers/service providers on such platforms;
and (d) facilitating payments by customers for purchase of such goods and/or availing of
such services; and

(ii) developing and selling / licensing software and relevant applications (including through
third party providers) for automobile / mobility management, including but not limited to
fleet management services.”
(Source: Business Standard)

Based on the above scenario, explain why is it important for the change mentioned in the
Memorandum of Association? Explain the relevance of the Memorandum of Association and
Article of Association of a company.

Question 2 (10 marks)

Examine the following situation:

Ravi wanted to form a private limited company for his start-up venture. Assuming Ravi has
sought your professional advice to understand the characteristics of a private limited
company, explain how it is different from a limited liability partnership and which is suited
for a start-up.

Question 3 (15 marks)

During the COVID- 19 situation, Mega Infrastructure Pvt Ltd. communicated to its home-
buyers awaiting the apartments to be handed over and informed that they would like to treat
the present situation as a ‘force majeure’ event and hence handing over of the apartments
cannot be assured. The home-buyers agreement mentioned 1st November 2020 as the date
within which the apartment would be handed over, failing which the Mega Infrastructure Pvt
Ltd would be liable for a penalty of Rs. 30,000/- per month. The Mega Infrastructure Pvt
Ltd. is not ready to commit to any particular date for handing over as they state that force
majeure event will apply till the COVID-19 pandemic is over.

Answer the following:

 Based on the above scenario, examine the concept of force majeure and validity of the
claim made by Mega Infrastructure Pvt Ltd.

 Explain the relevance of the liquated damages clause based on the above-discussed
situation. Also, examine whether a liquidated damages clause is used in this situation and
if used, whether it can be enforced.

 Assuming an objection raised by the apartment buyers is lack of specific mention of the
pandemic in the force-majeure clause on the contract, explain the validity of the claim
made by Mega Infrastructure Pvt Ltd.

Question 4 (15 marks)

Examine the following situation from a company law perspective:

The Managing Director of a public listed company has overseen an important decision
regarding renting a commercial building to function as the corporate office. Later, it was
found that the rent for the hired commercial building is exorbitantly higher than the existing
market rate. The Managing Director did not inform about his involvement in leasing or his
interest as owner of the building, to the board of directors. Can the Managing Director be
held responsible?
Assuming that in the board of directors meeting, one of the independent directors spoke in
favour of the Managing Director, can the shareholders remove the independent director in
this scenario. Explain the relevance of the position of independent director in a company.