Business Law Case Study Analysis

Business LawCase Study AnalysisName:Banner Id:Divansu Dinesh Bansal@03165711Shashank Tambre@03164834Kunal Lal@03164821Syed Abdul Ahad@03174849Bharath Kalkur@03164813By-Team 01:Case study 1:Case: Sri Ganeshan was the director of a company. He was also one of the managing agents. The articles of the company authorized the directors to borrow money and further it provided a clause that the board of directors can delegate any one director or more also. Mr. Ganeshan borrowed Rs.10 lakhs from a bank. The bank did not verify whether any resolution had been passed authorizing Mr. Ganeshan to borrow money. Actually the resolution was not made. On this ground the company refused to be liable for the payment of this loan. Examine whether the company is bound or not.

Analysis and Interpretation:Scenario 1:The Company is bound to repay the loan. The company is bound to repay the loan as there is a clause in the articles of association giving power to the board of directors to borrow money and also delegate any one director or more. Since the company has mentioned this clause in its AOA and banker would be unaware of the resolution had actually been passed or not, they have right to collect the repayment of loan from the company. Moreover, the bank can prove that Ganesh had been delegated by the BOD members and he had the authority to take the loan on behalf of the company. Therefore, the organization is liable to pay to pay to the bank. The banker of any bank, nationalized or non-nationalized is expected to act and discharge their duties in accordance with the rules and regulations of the bank. Acting beyond ones authority is by itself a breach of discipline, trust and misconduct. In the above case we have already determined that Mr. Ganeshan had the power to take the loan Rule which forces the bank manager to sanction a loan to him. Since the banker has successfully performed his duties with utmost good faith and without any fraudulent intention. Hence, the company is liable to repay the loan taken.

Scenario 2: The Company is not bound to repay the loanThe company is not liable pay as any B.O.D member is not authorized to take a personal loan acting on behalf of the company for his own benefit irrespective of any resolution passed or not. The banker must always take special care with granting a loan with respective to the beneficiary of the amount. The banker has a duty to properly check with the company rules and policies before issuing any loan as well. Since we can clearly identify that the banker has failed to do so, he can be supremely held responsible and negligent of his duty. Hence it is the banks duty to verify the order or demand as the bank failed to do the same the company cannot be held responsible and with sufficient proof that no resolution was made the bank has no right to demand payment. Thus, the banker is liable and company has no liability related it the repayment of the loan.

.Another aspect to the case would be as follows:The company is not bound to repay the loan taken by Ganesh although there is a clause in the company that states that board of directors can take a loan. If Ganesh had submitted the documents for the loan in the name of the company and the company approved the loan, only then is the company liable to pay the loan. If it is the banks fault to have sanctioned the loan even though it was not sanctioned by the company then the company cannot be held responsible. As it is not clear as to what were the documents submitted by Mr. Ganeshan to the bank, it is difficult to come to a conclusion as to who is liable to pay the loan back. But most of the circumstances favors towards the companyConclusion:In the above scenario the company is bound to pay the liability of the loan to the bank. The justified act of the bank to grant loan to Mr. Ganeshan is right in all sense and authority, due to this the liability does not rest on the shoulders of the bank but on that of the company. In the court of law proving such an act will not be that big of a problem as Mr. Ganeshan would have signed off on behalf of the company making them unaware of the amendments and authorizing the loan towards the lateral. The basic law states that in the due course of the business any sort of changes or amendments have to be duly informed to the bank authorities. This further makes the company liable towards such an act.

Case study 2:Case: Mr. Ram was in a hurry to go the airport to catch a flight and he hired a taxi run by capital Taxi Company well known in that locality. Ram asked the driver to drive fast. In the city there was a speed limit of 60 Kilometers per hour and driver rather reluctantly drove quite fast at times 90 kilometers per hour to reach the airport in time. As a result the driver lost control and hit an obstacle and Ram was badly injured. Ram filed a suit against the Taxi Company.Analysis and Interpretation:Scenario 1: The Capital Taxi Company is liable to pay Ram.We think that it is the duty of the taxi driver to drop his client safety to the airport. In any given situation the taxi driver has a few responsibilities. Such as:Customer safetyNo over chargingGood performanceIf the driver fails to comply on any of these responsibilities then he is liable to pay compensation. Irrespective of what the customer has demanded i.e., drive fast. The driver should follow the traffic rules established by the law and he is bound to obey the law. Since the accident has occurred due to over speeding the driver should be held responsible. As the driver was negligent in performing his duty he is liable to compensate for the damages caused to the passenger in the taxi.Breach of DutyA defendant is liable for negligence when the defendant breaches the duty that the defendant owes to the plaintiff. A defendant breaches such a duty by failing to exercise reasonable care in fulfilling the duty. Unlike the question of whether a duty exists, the issue of whether a defendant breached a duty of care is decided by a jury as a question of fact. Thus, in the example above, a jury would decide whether the defendant exercised reasonable care while performing the act.

Scenario 2: The Capital Taxi Company is not liable to pay Ram.In the mist of the case they implied agreement states that the parties that have entered into the contract have three basis things to take care of: Offer Acceptance ConsiderationPerformanceEvery contract will have some implied rules and regulation, understanding this taxi driver will also be bound by some bylaws and certain rules would be implied on the passenger as well. The outcomes of some negligence cases depend on whether the defendant owed a duty to the plaintiff. Such a duty arises when the law recognizes a relationship between the defendant and the plaintiff, and due to this relationship, the defendant is obligated to act in a certain manner toward the plaintiff. A judge, rather than a jury, ordinarily determines whether a defendant owed a duty of care to a plaintiff. Where a reasonable person would find that a duty exists under a particular set of circumstances, the court will generally find that such a duty exists.

In the case involving the defendant driver of the taxi, and meeting with an accident and causing injuries to the passenger. The first question that must be resolved is whether the defendant owed a duty to the passenger. In other words, a court would need to decide whether the defendant and the passenger had a relationship such that the defendant was required to exercise reasonable care in handling the car and exercising his duty. If the driver accepts to safely drop the customer to the airport then he certainly owes a duty but since the passenger has implied undue influence of increasing the speed of the taxi to reach the airport fast as he was getting late. Then the court can consider this fact that the contract is invalid and would be less likely to find that the defendant owed a duty.Initial ram offered the taxi driver to be able to reach the airport on time. In spite of the driver knowing he will be unable to perform the task, he accepted the offer for a consideration. Since the agreement should be a valid agreement and must follow the laws established i.e. not to break rules and regulations in order to comply with the agreement .as said in the case, he broke the rule of exceeding the speed limit with the consent of the passenger hence this contract is an invalid contract. So the taxi driver is not under an obligation to pay any amount of compensation towards the passenger.

Conclusion

After analyzing all the facts in the given case its clear that the passenger exercised undue influence to perform in manner that is dangerous i.e., over speeding and impossibility to perform in a way that would make him reach the airport on time without breaking any traffic law. The driver should not have accepted the offer and should have performed in such a way that is safe and responsible. Nothing is greater than the law itself. Hence, the driver should have performed his duty diligently without being influenced by Mr. Ram. However, even Mr. Ram is responsible to some extent. Thus, the damages claimed by Mr. Ram should be negotiated in such a way that they both together share it.

References:

Findlaw, (2015). Elements of a Negligence Case - FindLaw. Retrieved 26 January 2015, from http://images.findlaw.com/optimost/accident-injury-law/elements-of-a-negligence-case-2.html#sthash.1MpGDVTz.dpuf 2.Reserve Bank of India (2015). Retrieved 26 January 2015, from http://rbidocs.rbi.org.in/rdocs/Publications/PDFs/62574.pdf