PAPER – 2 : CORPORATE & OTHER LAW

Question No. 1 is compulsory.

Question 1

(a) MNP Private Ltd. is a company registered under the Companies Act, 2013 with a,
Paid Up Share Capital of ` 45 lakh and turnover of ` 3 crores. Explain the meaning
of the "Small Company" and examine the following in accordance with the
provisions of the Companies Act, 2013:
(i) Whether the MNP Private Ltd. can avail the status of small company?
(ii) What will be your answer if the turnover of the company is ` 1.50 crore? (6
Marks)
(b) Rera Ltd., a company incorporated under the Companies Act, 2013 having turnover
of
` 100 crore, net profit ` 3 crore, accumulated loss of ` 50 crore and securities premium
` 300 crore as per the audited accounts of the company for the Financial Year 2016 -
17.
The CFO of the company informed the directors of the company that the
Corporate Social Responsibility (CSR) committee is required to be constituted as
per the Companies Act, 2013. The directors seek your advice as a professional
regarding the criteria required to constitute CSR committee and whether it is
applicable to Rera Ltd. or not. (6
Marks)
(c) ABC Ltd. sells its products through some agents and it is not the custom in their
business to sell the products on credit. Mr. Pintu, one of the agents sold goods of
ABC Ltd. to M/s. Parul Pvt. Ltd. (on credit) which was insolvent at the time of such
sale. ABC Ltd. sued Mr. Pintu for compensation towards the loss caused due to sale
of products to M/s. Parul Pvt. Ltd. Will A B C Ltd. succeed in its claim? (4
Marks)
(d) X owned a land with fifty tamarind trees. He sold his land and the (obtained after
cutting the fifty trees) to Y. X wants to know whether the sale of timber tantamounts
to sale of immovable property. Advise him with reference to provisions of "General
Clauses Act, 1897”. (4
Marks)

Question 2
(a) (i) PET Ltd., incurred loss in business upto current quarter of financial year 2017-
18. The company has declared dividend at the rate of 12%, 15% and 18%
respectively in the immediate preceding three years. Inspite of the loss, the
Board of Directors of the company have decided to declare interim dividend
@ 15% for the current financial year. Examine the decision of PET Ltd.
stating the provisions of declaration of interim dividend under the
Companies Act, 2013. (4 Marks)
(ii) Alpha Ltd., A Section 8 company is planning to declare dividend in the
Annual General Meeting for the Financial Year ended 31-03-2018. Mr. Chopra
is holding 800 equity shares as on date. State whether the act of the company
is according to the provisions of the Companies Act, 2013. (2
Marks)
 (b) As per the provisions of the Companies Act, 2013, every company is required to file
with the Registrar of Companies, the Annual Return as prescribed in section 92,
in Form MGT -7. Explain the particulars required to be contained in it. (6
Marks)

(c) Mr. V draws a cheque of ` 11,000 and gives to Mr. B by way of gift. State with
reason whether -
(1) Mr.B is a holder in due course as per the Negotiable Instrument Act, 1881?
(2) Mr.B is entitled to receive the amount of ` 11,000 from the bank? (4 Marks)
(d) Bholenath drew a cheque in favour of Surendar. After having issued the cheque;
Bholenath requested Surendar not to present the cheque for payment and gave a
stop payment request to the bank in respect of the cheque issued to Surendar.
Decide, under the provisions of the Negotiable Instruments Act, 1881 whether the
said acts of Bholenath constitute an offence? (4
Marks)

Question 3
(a) TDL Ltd., a public company is planning to bring a public issue of equity shares in
June, 2018. The company has appointed underwriters for getting its shares subscribed.
As a Chartered Accountant of the company appraise the Board of TDL Ltd. about the
provisions of payment of underwriter's commission as per Companies Act, 2013. (6
Marks)
(b) (i) Rupa Limited, a listed company appointed M/s. VG &ASSOCIATES an audit
firm as Company's auditor in the Annual General Meeting held on 30 -09-2017.
Explain the provisions of the Companies Act, 2013 relating to the appointment
or reappointment of an auditor in relation to the tenure of an auditor. (3
Marks)
(ii) PKC Ltd., wants to appoint Mr. Praveen Kumar, a practicing Chartered
Accountant as the statutory auditor of the company and asked the proposed
auditor to give a certificate in this regard. What are the contents of the certificate to
be issued in accordance with the Companies (Audit & Auditors Rules, 2014)?
(3 Marks)
(c) Explain briefly any four effects by repeal of an existing Act by central legislation
enumerated in Section-6 of The General Clauses Act, 1897. (4
Marks)
(d) Differentiate Mandatory Provision from a Directory Provision. What factors
decide whether a provision is directory or mandatory? (4
Marks)

Question 4
(a) Bazaar Limited called its AGM in order to lay down the financial statements for
Shareholders’ approval. Due to want of Quorum, the meeting was cancelled. The
directors did not file the annual returns with the Registrar. The directors were of the
idea that the time for filing of returns within 60 days from the date of AGM would
not apply, as AGM was cancelled. Has the company contravened the provisions of
Companies Act, 2013? If the company has contravened the provisions of the Act,
 how will it be penalized? (4
Marks)

(b) Benson Limited issued a notice with the agenda for nine businesses to be transacted
in the Annual General Meeting (two businesses were regarding appointment of
Mr. Sahu and Mr. Pranav as directors). The chairman decided to move the
resolutions for all the nine businesses together to save the time of the members
present. Examine the validity of the resolutions. (4 Marks)

(c) State any four contents of a Directors Responsibility Statement as required under
Section 134 of the Companies Act, 2013. (4
Marks)

(d) (i) Define Grammatical Interpretation. What are the exceptions to grammatical
interpretation? (4
Marks)
(ii) What is a Document as per the Indian Evidence Act, 1872? (2 Marks)
(e) What is the meaning of service by post as per provisions of The General
Clauses Act, 1897? (2
Marks)

Question 5
(a) (i) Harsh purchased 1000 shares of Singhania Ltd. from Pratik and sent those
shares to the company for transfer in his name. The company neither
transferred the shares nor sent any notice of refusal of transfer to any party
within the period stipulated in the Companies Act, 2013. What is the time
frame in which the company is supposed to reply to transferee? Does Harsh,
the transferee have any remedies against the company for not sending any
intimation in relation to transfer of shares to him? (4
Marks)

(ii) Xgen Limited has a paid-up equity capital and free reserves to the extent of
` 50,00,000. The company is planning to buy-back shares to the extent of
` 4,50,000. The company approaches you for advice with regard to the following
(i) Is special resolution required to be passed?
(ii) What is the time limit for completion of buy-back?
(iii) What should be ratio of aggregate debts to the paid-up capital-and free
reserves after buy-back? (3
Marks)

(b) M/s. Techno Ltd. maintains its Register of Members at its registered office in
Mumbai. A group of members residing in Kolkata want to keep the register of
members at Kolkata.
(i) Explain with provisions of Companies Act, 2013, whether the company can
keep the Registers and Returns at Kolkata.
 (ii) Does Mr. Ranjit, Director (but not a shareholder) of the company have the
right to inspect the Register of Members? (5
Marks)
(c) Give four differences between Bailment and Pledge. (4 Marks)
(d) Mr. D was in urgent need of money amounting ` 5,00,000. He asked Mr. K for
the money. Mr. K lent the money on the sureties of A, B and N without any contract
between them in case of default in repayment of money by D to K. D makes default
in payment. B refused to contribute, examine whether B can escape liability? (4
Marks)