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ML_1
Time Allowed: 3 Hours Total Marks: 100
Important instruction to candidates:
QUESTION NO. 1 is Compulsory. Answer any FOUR questions from the remaining FIVE questions.
Q. No. Questions Marks
1 (a) Mr. Ramesh sold 15 acres of his agricultural land to Mr. Amit on 10th October 4
2019 for ₹40 Lacs. The property papers mentioned a condition, amongst other
details, that whosoever purchases the land is free to use 13 acres as per his
choice, but the remaining 2 acre has to be allowed to be used by Mr. Rahul, son
of the seller, for carrying out farming or other activities of his choice. On 1 st
November 2019, Mr. Ramesh died, leaving behind his son and wife. On 4th
November 2019, the purchaser started construction of an auditorium on the
whole 15 acres of land and denied any land to the son.
Now, Mr. Rahul wants to file a case against the purchaser and get a suitable
redressed. Discuss the above in the light of provisions of the Indian
Contract Act, 1872 and decide upon Mr. Rahul’s plan of action?
(b) The paid-up share capital of Tata Sons Ltd. is ₹1.8 crores (18 lacs Equity Shares 4
of ₹10 each fully paid-up). Reliance Communication Ltd. and Reliance Petro-
Chemical Ltd. are holding 4 lacs Equity Shares and 60,000 Equity Shares,
respectively, in Tata Sons Ltd. Reliance Communication Ltd. and Reliance
Petro-Chemical Ltd. are the subsidiaries of RIL Ltd.
With reference to the provisions of the Companies Act, 2013, examine
whether Tata Sons Ltd. is a subsidiary of RIL Ltd.? Would your answer be
different if RIL Ltd. had 8 out of 9 Directors on the Board of Tata Sons Ltd.?
(c) Mr. Gupta purchased 250 bales of cotton from Mr. Verma and told Mr. Verma to 3
deliver those bales to his office after 2 days, to which Mr. Verma agreed. Mr.
Verma’s men could pack only 140 bales, and the delivery was delayed by 5 days.
On the 6th day, there was an accidental fire, and the entire stock was destroyed,
including 140 bales that were already packed. Referring to the provisions of
the Sale of Goods Act, 1930, explain who will bear the loss and to what
extent?
(d) Is the registration of a partnership firm compulsory? Explain. Discuss the 4
various disadvantages that a non-registered partnership firm can face in brief?
(e) What is structure of Indian Judicial system? 5
2 (a) Ram, Laxman and Bharat are partners of a partnership firm RLB Furnitures & 6
Co. The firm is a dealer in office furniture. Ram was incharge of purchase and
sale; Laxman was incharge of maintenance of accounts of the firm, and Bharat
was incharge of handling all legal matters. Recently through an agreement
among them, it was decided that Ram will be incharge of maintenance of
accounts and Laxman will be incharge of purchase and sale. Being ignorant
about such an agreement, Shyam, a supplier, supplied some furniture to Ram,
who ultimately sold them to a third party at a profit. Referring to the
provisions of the Partnership Act, 1932, advise whether Ram’s actions
were correct or not?
(b) State the grounds upon which a contract may be discharged under the 6
provisions of the Indian Contract Act, 1872.
(c) Rama executes a promissory note in the following form, ‘I promise to pay a sum 2
of ₹10,000 after three months.’ Decide whether the promissory note is a
valid promissory note.
(d) Sunny acquired a valuable diamond at a very low price by voidable contract 6
under the provisions of the Indian Contract Act, 1872. The voidable contract
was not rescinded. Sunny pledged the diamond with Manish. Is this a valid
pledge under the Indian Contract Act, 1872?
Whether a Pawnee has a right to retain the goods pledged?
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3 (a) Explain the essential elements to incorporate an LLP under the Limited Liability 6
Partnership Act, 2008.
(b) “Whether a group of persons is or is not a firm, or whether a person is or not a 4
partner in a firm”. Explain the mode of determining the existence of
partnership as per the Indian Partnership Act, 1932?
(c) Mr. Sunny sold his business of cotton production to a cotton production 6
company CPL Private Limited in which he held all the shares except one which
was held by his wife. He is also the creditor in the company for a certain amount.
He also got the insurance of the stock of cotton of CPL Private Limited but in his
own name not in the name of company. After one month, all the stocks of the
cotton of CPL Private Limited were destroyed by fire. Mr. Sunny filed the claim
for such loss with the Insurance company. State with reasons that whether
the insurance company is liable to pay the claim?
(d) Examining the provisions of the Negotiable Instruments Act, 1881, distinguish 4
between a 'Bill of Exchange' and a 'Promissory Note'.
4 (a) Mr. K visited M/s Makrana Marbles for the purchase of marble and tiles for his 7
newly built house. He asked the owner of the above shop Mr. J to visit his house
prior to supply so that he can clearly ascertain the correct mix and
measurements of marble and tiles. Mr. J agreed and visited the house on the
next day. He inspected the rooms in the first floor and the car parking space. Mr.
K insisted him to visit the second floor as well because the construction pattern
was different, Mr. J ignored the above suggestion.
Mr. J supplied 146 blocks of marble as per the size for the rooms and 16 boxes
of tiles with a word of caution that the tiles can bear only a reasonable weight.
Marble and Tiles were successfully laid except on second floor due to different
sizes of the marble. The tiles fitted in the parking space also got damaged due
to the weight of the vehicle came for unloading cement bags. Mr. K asked Mr. J
for the replacement of marble and tiles to which Mr. J refused, taking the plea
that the marble were as per the measurement and it was unsafe to fit tiles at
the parking area as it cannot take heavy load.
Discuss in the light of provisions of Sale of Goods Act, 1930:
(i) Can Mr. J refuse to replace the marble with reference to the doctrine of
Caveat Emptor? Enlist the duties of both Mr. K and Mr. J.
(ii) Whether the replacement of damaged tiles be imposed on M/s Makrana
Marbles? Explain.
(b) Explain the following as per the provisions of the Indian Contract Act, 3
1872:
(i) What is the meaning of ‘Agent’ and ‘Principal’?
(ii) Who can appoint an agent?
(c) Explain the term ‘Coercion’ along with the effects of coercion. 3
(d) Mrs. Shweta delivered her silver jewellery to Mr. Amit, a goldsmith, for the 4
purpose of making a new silver plate out of it. Every evening she used to receive
the unfinished good (silver plate) to put it into a box kept at Mr. Amit’s shop.
She kept the key of that box with herself. One night, the silver plate was stolen
from that box.
Whether the possession of the goods delivered constitute the contract of
bailment?
(e) Who is the competent authority to issue a promissory note ‘payable to bearer’? 3
5 (a) JSW Steel Ltd.’s articles of association empower the managing agents to borrow 6
both short and long-term loans on behalf of the company. Mr. Jindal, the director
of the company, approached India bulls Finance Ltd., a non-banking finance
company, for a loan of ₹10 Crores in the name of the company.
The lender agreed and provided the above-said loan. Later on, JSW Steel Ltd.
refused to repay the loan on the pretext that no resolution authorizing such a
loan had been actually passed by the company, and the lender should have

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enquired about the same prior to providing such a loan, hence, the company not
liable to pay such loan.
Analyse the above situation in terms of the provisions of Doctrine of
Indoor Management under the Companies Act, 2013 and examine
whether the contention of JSW Steel Ltd. is correct or not?
(b) State the exceptions to the rule “An agreement without consideration is void.” 6
(c) A went to B’s shop and selected some jewellery. He falsely represented himself 4
to be a man of credit and thereby persuaded B to take the payment by cheque.
He further requested him to hand over the particular type of ring immediately.
On the due date, when the seller, B presented the cheque for payment, the
cheque was found to be dishonoured. Before B could avoid the contract on the
ground of fraud by A, he had sold the ring to C. C had taken the ring in good faith
and without any notice of the fact that the goods with A were under a voidable
contract. Discuss if such a sale made by non-owner is valid or not as per the
provisions of Sale of Goods Act, 1930?
(d) Vikas borrowed a sum of ₹10 lakhs from Jyoti. Vikas appointed Jyoti as his agent 4
to sell his land and authorized him to appropriate the amount of loan out of the
sale proceeds. Afterwards, Vikas revoked the agency. Decide under the
provisions of the Indian Contract Act, 1872 whether the revocation of the
said agency by Vikas is lawful?
6 (a) What is the doctrine of “Caveat Emptor”? What are the exceptions to the 6
doctrine of “Caveat Emptor”?
(b) Mr. S Venkatesh drew a cheque in favour of M, who was sixteen year sold. M 4
settled his rental due by endorsing the cheque in favour of Mrs. A, the owner of
the house in which he stayed. The cheque was dishonoured when Mrs. A
presented it for the payment on the grounds of the inadequacy of funds.
Advise Mrs. A how she can proceed to collect her dues?
(c) What do you mean by the term capital? Describe its classification in the domain 4
of Company Law.
(d) Pradeep sells by auction to Rakesh a horse which Pradeep knows to be 4
unsound. The horse appears to be sound, but Pradeep knows about the
unsoundness of the horse.
Is this contract valid in the following circumstances:
(i) If Pradeep says nothing about the unsoundness of the horse to Rakesh.
(ii) If Pradeep says nothing about it to Rakesh who is Pradeep’s son.
(iii) If Rakesh says to Pradeep “If you do not deny it, I shall assume that the
horse is sound.”
(iv) Pradeep says nothing.
(e) Write short note on ‘Ministry of Corporate Affairs’. 2

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