INDIAN INSTITUTE OF MANAGEMENT LUCKNOW

POST-GRADUATE PROGRAMME IN MANAGEMENT

LEGAL ASPECTS IN MANAGEMENT

End Termn (1) Examination Year 2023

SECTION -DEFG

Time: 2 hours Max. Marks: 60

LEGAL ASPECTS IN MANAGEMENT

INSTRUCTIONS:
Start each question/problem from a new page. Handwriting must be legible.
AllQuestions should be answered precisely,clearly, and in the same sequence in which
they appear in this question paper.

Q.1. Discuss in brief the law relating to agreements expressly declared void under the Indian
Contract Act,

(6 Marks)

0.2. Discuss the role and legal status of promoters. Describe also the liabilities of a company
and promoters in relation to a Preincorporation contract.
(7 Marks).
Q.3. Elaborate on the procedure for registering a trademark in India. Discuss the remedies
available to the owner of a trademark in case others infringe his rights.
(10 Marks)

Q.4. Explain the Doctrine of Indoor Management.

(5 Marks)

Q. 5. Attempt the following problems. Responses must be given under four heads in the
following order:
(a) Decision: Start the response with Yes or No.
(b) Reasons: Give the reasons for the decision response.

Pare o1 e o
 (c) Principle: Explain the basic principle/concept involved in and;
(d) Act and Case Law: Mention related Acts and Court Cases, if any.

(4 x 8= 32 Marks)

1. OrwellMusic Corporation was, in the year 2001, the sole owner of the copyright ofa
musical record named Bon Bon'
The sole licensee of this musical record waç Russel & Cott.
The Charlesworth Record Manufacturing Co. Ltd were responsible for making
gramophone records and'sold them to Crystal Co Ltd for rs 150 for an advertisement
campaign to boost their sales.
Crystal Co Ltd started to display these records on cardboard, which contained the
advertising matter for the chocolate they produced.
Crystal Co Ltd nade a general offer to sell the musical record f 'Bon Bon' Jo every
person who brings two wrappers of their chocolate. The price of the chocolate is Rs
100.
However, as per the Copyright Act, the manufacturer had the duty to notify the owner
of the copyright of their intention to reproduce the records of their work for retail
Charlesworth Record Manufacturing Co duly filled this duty.
Moreover, the copyright owners were also entitled to 7 per cent of the cost of the
'ordinary selling price' of the record under the Act as royalty fees.
The royalty fees given by Crystal Co were considered by Russel & Co to be inadequate.
Since the consideration was not completely monetary as it also included two wrappers
of chocolate along with the money.
Russel & Co filed. suit for injunction and sued for damages, contending that Crystal

Co Ltd was not providing adequate consideration.

Crystal Co Ltd argued that the wrapper of the chocolate was not part of the
consideration as it was valueless for them and was thrown by the Company into the
dustbin as soon as it was received.

Under these circumstances, WillRussel & Co Ltd succeed?

2. On 15 February 2009, Ravi entered into a contract to purchase a motor vehicle from
Dev,an auto dealer, and paid rs 17lakh as a down payment. Ravi informed Dev that he
intended to use the vehicle in the race championship to be held on 27h April 2009. And
Ravi has paid Rs 3 lakhs as a fee for participation in the said race. As per the agreement,
 the vehicle was supposed to be delivered on 7h
March 2009, but no delivery was made
through 3rd of April2009. The said vehicle had to be imported from Russia, and
because
of the war between Russia and Ukraine, the
delivery of the same was delayed. However,
Dev had another option available to import the same vehicle from
Canada, but it would
cost him more and thus have to face loss. Therefore, Dev offered Ravi to
deliver the
vehicle on 6h April 2009 but at a much higher price than before.
Ravi seeks to cancel the contract and obtain a refund of rs 17 lakh. Will Ravi
succeed?
3. Raj Production Company (a company that produces films) engaged Katrina (a minor
girl)to act in the film titled Trial of John'. And for this, the company entered into an
agreement with her father. The company deposited the agreed money (Rs 70 Lakhs) for
her acting in the film well in advance in the joint bank account (Joint Bank Account
held by Katrina and her father). However, after one year, she obtained the age of
majority, and the film was still under production. Katrina signed another film and
declared that she would not work with Raj Production. The company sues Katrina for
the specific performance of the contract. Will the Raj Production Company succeed?
4. Dragon Tools Ltd (DT), a subsidiary of Dragon Pvt Lid, wished to build a new factory.
In order to fund this, DT borrowed Rs 20Million from Dragon Pvt Ltd, and this money
was used to purchase apiece of land upon which the factory willbe built. DT purchased
the land but then discovered that it did not have planning permission. Fortunately,
HouseBuild Ltd., a local property developer, has offered DT Rs 30 Million for the land,
and so DT and HouseBuildentered into a contract for the sale of the land. Afew days
later, however, Sajid (a director of Dragon Pvt Ltd. and a member of the local council)
indicated to the directors of DT that DT would certainly be granted planning
permission. Accordingly, before the sale of the land is completed,DT transfers the land
to Dragon Pvt Ltd. and argues that the contract with Housebuild is no longer valid as
DT does not own the land. DT obtains the planning permission and begins plans to
construct the factory. HouseBuild sues DT for breach of contract. Will HouseBuild
succeed.