CA Intermediate Law

Total Marks – 50
Question 1 is compulsory.
Candidates are also required to answer any 4 questions from the remaining 5 question

Q 1) Multiple choice question (1 Mark for each question)

1) Aman contracts to indemnify Megha against the consequences of any proceedings which Chandar
may take against Megha in respect of a sum of Rs. 15000/- advanced by Chandar to Megha. Now,
Megha who is called upon to pay the sum of money to Chandar but she fails to do so. Now, as per
the provisions of the Indian Contract Act, 1872, advise the future course of action to be taken by
Chandar.
a) Chandar can recover the amount only from Megha
b) Chandar can recover the full amount from Aman
c) Chandar cannot recover the amount from Aman
d) Chandar can recover at least 10% of the total amount from Megha

2) In how many days from the date of declaration of interim dividend, it shall be deposited in a
separate bank account?
a) 5 days
b) 7 days
c) 15 days
d) 21 days

3) XP Ltd declared 12% dividend to its Equity Shareholders. However Company missed to transfer
unpaid dividend to bank account even after 40 days from declaration of Dividend. In such case how
much interest will be payable?
a) 8% p.a.
b) 16% p.a.
c) 10% p.a.
d) 12% p.a.

4) In order to issue DVR shares, the Company needs to obtain the approval of the shareholders in a
General Meeting by way of________
a) Ordinary Resolution
b) Special Resolution
c) Super majority Resolution
d) Unanimous Resolution

5) IFSC Private Company must deliver share certificate within _________ days from the date of receipt
of transmission application.
a) 15
b) 60

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 c) 30
d) 90

6) The position of a finder of lost goods is that of a

a) Bailor
b) Bailee
c) Surety
d) principal debtor

7) Shares which are issued by a company to its directors or employees at a discount or for a
consideration:
a) Equity Shares
b) Preference Shares
c) Sweat Equity Share
d) Redeemable preference shares

8) Which of the following amount is not credited to IEPF Account

a) Unpaid dividend account of company
b) Matured deposit with company
c) Profit on sale of asset
d) Matured debentures with companies.

9) The delivery of goods by one person to another as security for the payment of a debt is called
a) Bailment
b) Pledge
c) Mortgage
d) Hypothecation

10) The subscribed capital of a company is :

a) never more than the issued capital
b) never less than the issued capital
c) always equal to the issued capital
d) prescribed percentage of the issued capital

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. (6 Marks)

b) Explain the meaning of term ‘Proviso’. Give the distinction between proviso & exception. (4 Marks)

Q 3)
a) ABC Company Limited at a general meeting of members of the company passes an ordinary
resolution to buy-back 30% of its equity share capital. The articles of the company empower the

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 company for buy-back of shares. The company further decides that the payment for buy-back be
made out of the proceeds of the company’s earlier issue of equity shares. Explaining the
provisions of the Companies Act, 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 you answer be still the same in case the company, instead of 30%, decides to buy-back
only 20% of its equity share capital? (6 Marks)

b) Give four differences between Bailment and Pledge. (4 Marks)

Q 4)
a) XYZ Ltd is a manufacturing company & has proposed a dividend @ 10% for the year 2017-18 out of
the current year profits. The company has earned a profit of ₹ 910 crores during 2017-18. YZ Ltd.
does not intend to transfer any amount to the general reserves of the company out of current
year profit. Is YZ Ltd. allowed to do so? Comment. (6 Marks)
b) Explain the rule of ‘beneficial construction’ while interpreting the statutes quoting an example.
(4 Marks)

Q 5)
a) Star Ltd. declared and paid dividend in time to all its equity holders for the financial year
2015-16, except in the following two cases:
i) Mrs. Sheela, holding 250 shares had mandated the company to directly deposit the dividend
amount in her bank account. The company, accordingly remitted the dividend but the bank
returned the payment on the ground that there was difference in surname of the payee in the
bank records. The company, however, did not inform Mrs. Sheela about this discrepancy.
ii) Dividend amount of ₹ 50,000 was not paid to Mr. Mohan, deceased in view of court restraining
the payment due to family dispute about succession.
You are required to analyze these cases with reference to provisions of the companies Act, 2013
regarding failure to distribute dividends. (6 Marks)

b) Walnut Limited has an authorized share capital of 1,00,000 equity shares of ₹ 100 per share and
an amount of ₹ 3 crores in its Share Premium Account as on 31-3-2018. The Board of Directors
seeks your advice about the application of share premium account for its business purposes.
Please give your advice. (4 Marks)

Q 6)
a) Ramesh, who is a resident of New Delhi, sent a transfer deed, for registration of transfer of shares
to the company at the address of its Registered Office in Mumbai. He did not receive the shares
certificates even after the expiry of four months from the date of dispatch of transfer deed. He
lodged a criminal complaint in the Court at New Delhi. Decide, under the provisions of the
Companies Act, 2013, whether the Court at New Delhi is competent to take action in the said
matter? (6 Marks)

b) Define contract of indemnity and contract of guarantee and state the conditions when guarantee
is considered invalid? (4 Marks)

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