cs professional programme group 1

8/3/2019 CS Professional Programme Group 1

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PBOFESSIONALROGRAMMEXAMINATIONJUNE201

COMPANY ECRETARTALRACTICETimeallowed:3hours Maximummarks 100NOTE 7. AnswerSIXquestionsncluding uestionNo.1whichs COMpLILSORy.2. All referencesosectionselate o theCompanies ct,1956unless tatedotherwise.Question

Draft..anyiveof thefottowing.n caseof resolution, entionhe typeof meetingand henatureof resolution,utno explanatory tatementeed obegiven(i) Resolutionoarter he name crausen thememorandumf associationuseappropriate ames).(ii) Duediligenceeftificateobe submittedo sEBl orpublic ssue f debentures(mentionheauthorityo issue).(iii) Resolutionpprovinge-issue f forleited hares.(iv) Notice to Rajan,a directorof XyZ Ltd., nforming im thata notice ndersection284 toremovehim romdirectorshiphasbeen eceivedromaneliaibleperson.(v) Notice romJolly,a shareholder fBrightLtd.,proposing henameof Viratasadtrector nder ection 57.(vi) Explanatory tatemento expand he objectscrausen thememorandumfassociation f a company ngagedn manufacture f computer omponentsunderlicencefrom a company n USA o includedevelopmentof computersoftwares. U marks ach)Answer (i)

Resolution : Special ResolutionTypeofMeeting : GeneralMeetingSPECIAL ESOLUTIONORALTERTNGHEMEMOBANDUMFASSOCIATION(NAME LAUSE) FTHECOMPANY^ RESOLVEDHAT ubjecto heapprovarf hecentrar overnmentnder ection21of heCompaniesct,1956, ndother pplicablerovisions,fany, f heCompaniesAct, hename f hecompany echanged om yz rimitedo ABbrimitedndaccoiorngty,thenamexYz Limited" herevertoccursn heMemorandumndArticresf Associationof hecompany esubstitutedy hename,ABcLimited,,.Answer ( i i )Authorityo issue : Debenture rusrce


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PP CSP-June 011 2DUEDILIGENCE EBTIFICATEO BE GIVENBY DEBENTURETRUSTEEALONGWITHDRAFTOFFERDOCUMENT

To,Secur i t iesndExchange oard f ndiaDearSi rs ,

Sub. :Publ icssue f . . . . . . . . Dy

follows:( 1 )(2)(3)

(c )

The ssuerhasobtainedhe permissionsconsents ecessaryor creatin-csecurityon the property s secondcharge/pari assucharge whereve'aDol icable)Th e issuerha s madeall he relevant isclosures bout he security/assecover

(d) The issuerhas made al l the relevant isc losures bout ts cont lnue(obligationsowardshe holders l convertibleebt nstruments(e) Al l disclosuresmade n the draflprospeclus/letterf offerwith respect (th e convertible ebt nstruments re true' air andadequateo enable heinvestors o make a well informeddecisionas to the investment n thDroDosedssue.

(4 ) We havesatisfied urselves bout he abil i tyot th e issuer o service he deLsecur l l les.DebentureTrustee o the ssu{with his Official Se a

(b)

(Nameot the ssueot h e d e b e n t u r e t r u s t e e s t o t h e a b o v e m e n t i o n e d f o r t h c o m i n g | s s u e , s t a l e a S

We haveexamired hedocumentser la in ingothesaid ssue

Wehavea|soeXaminedtherelevantdocUmentsperta in ingtothesecUri ty tobecrealed.On the basiso{ such examination nd of the discussions it h th e issuer' tsJirectors nd otherofficers, theragencies nd of independenterif ication jthevar ious elevanl ocuments, E CONFIRMhat:la ) The issuerha s madeadequateprovisionsor and/orha s takensteps c*'

"rouU"lo, ui;quate security/assetover or he secured onvertibleeb'

instrumentso be issued

: BoardMeeting

O a t e :P l a c e :

Answer1( i i i )Typeof MeetingNatureof Besolution BoardResolutionRe-issueof forfeitedShares

'RESOLVEDTHAT .. . . . equi tysharesof Rs each bear ingDist inct iv


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PP-CSP-June 01Nos. . . . . . . . .o . . . . . . . . . ,oth nc lus ive,rev iouslyegis teredn he nameof Shr i . . . . . . . . . . . . . .and or fe i ted n. . . . . . . . . . . . . . . . . . . . . . as perdeclarat ionulys igned y CompanySecretary laced n he able, e sold e- issuedo Shr i . . . . . . . . . . . . . . . .or Rs. . . . . . . . . . . . .ershare."

'FESOLVEDFURTHER hat he Secretary f the Company e and is herebyauthor izedo obtain he necessary ermiss ionrom he StockExchangeor the re-iss e."Answer1(iv)Notice o Raian,Direclor, nforming him of his removal rom DireclorshipToRa an,DirectorXYZLtd.NewDelhiDearS r ,

Sub : Noticeof removalWe write o inlorm ou hat he Companyhas eceived nolice roma shareholder

ol the Companyol a resolutionor your removal rom he officeof director' The saidr e s o l u t i o ns i n t e n d e d o b e m o v e d a t t h e - - - G e n e r a lM e e t i n gb e h e l dat ,.-_--on -2008 at , --* hours.A copy of the aforesaid esolutions enclosed or your perusal We draw yourallentiono theprovisions ontainedn sub-section3) of section 84oi the CompaniesAc1. 956 ursuanto whichyo uare entitledobe heardon heresolution t the meetingFurther n termsof sub-section4) hereof ou can makea representallonn writing othe Companyor notifcationo the Members f the Company.We alsoenclosehe agendaof the Meetingwith a request o attend he Meeting

Yours a i thfu l ly ,

Boardof DirectorsXYZLimi ted

Secretary

Piace :


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PP-CSP-June011Answer (v)To ,TheBoard f DirectorsBright td.DearSrrs,

Pursuanto section 57ol the Companiesct ,1956,, Jolly, member t BrightLtd.,holding_ shares ereby roposeMr .Virat, s a candidateor theoftice fdirectoro 5e appointeOt he orthcomingnnual eneralmeeting Also,a draftofBupees500isenc|osedaSadeposi tasrequiredundersection25T('1)o| thecompAct,1956.Yoursaithfully,

Jol lyShareholderf Bright td.Answer (vi)Explanatory tatement

YourBoard aswithaview ogarnerurther roMhandexpansionasconsideredaproposalo diversilynto relaledrea foperations'amely evelopmentlcomputersottware. heobjects lausewhichspresently estrictedn scope overingmanutaclureofcompulersomponenlsnly This requireso beexpandedoas o coverdevelopmenlof computeroftware lso. o enable ourcompanyo considermbarkingponnewactivities hich onsideredo be profitable,dvantageous,easible ndwhich anbeconvenientlyntegratedo the company'surrentineol business'he resolutionsbeing ropoied. ertainncidentalowers realsobeing ddedor heconveniencefthe dompany's perations.ourDirectorsecommendhat he specialesolutionepassed.NoneoftheDirectorsofthecompanyisinterestedorconcernedinthesaidresoexcept s membersl theComPanY.

Ouestion(a) Explainhe egalposition ndsuggested ctionor the ollowing

0 A company s readywiththe printedannualreporl for despatch o ashareionersand iere arises need o hold an extra-ordinaryeneralmeeting. The companywants o despatch oticeof the annualgeneralmeetini andthenoiice f extra-ordinaryeneralmeeting imultaneouslynthesameenveloqe.Thearticles f associationf aprivateimited ompany rovide hata directolshouldmakea fixeddeposit f '5,000for beingqualifiedo be a director'(4markseach)

(ii)


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5 PP-CSP-June 011(b) Write the most appropriate answer from the given options in respect of thefollowing :

(i) The maximum age limit for directors n case of private companies s -(a) 65years(b) 70years(c) 75years(d) None of the above.

(ii) Where title in sharcs of a company is in dispute, the mattet has to beresolvedby -(a) Courl(b) Arbitrator(c) CompanyLaw Board(d) CentralGovernment.

(iii) GlobalLtd. has thepaid-upequitycapitalstructure CentralGovernment:38%; State Government: 10%; Subsidiaryof a governmentcompany :17.5"/.;and retail shareholders: emainingsharcs. Which ot the following' classesof companieswould t belong to -(a) Government om\anY(b) Non-government ublic.company(c) DeemedpubliccompanY(d) DeemedprivatecomPanY.

(iv) Contractsmadealter ncorporation f a publiccompany,but befote issueofthe cerlificateof commencementof businessare -(a) Provisionalcontracts(b) Post-incorporationontracts(c) Preliminarycontracls(d) Contracts n the normal caurse of business. (1 mark each)

(c) Re-write he ollowing entencesafter illing-in he blankspaceswithappropriatevlord(s)/figure(s):(i) ln public issue, the facility ASBA'stands for(ii) The proceedingsof the meeting will beabsenceof a quorum.(iii) Onsatisfactiont complete harye,ntimations requiredo begiven o theRegistrarof Companiesnprescribed orm duly signedby thecompany and the concerned inancial nstitution/bank.(iv) lncrease n authorisedcapitalof the companypermittedby the atlicles otassociation equires esolution o be passedundersectionIhe CompaniesAct, 1956.

if conducted n the

of(1 mark each)


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irP-CSP-.iune 011,lnsrrer2(a)(i)

PL]rsrrant0Sect ion 71ol the Companies ct ,1956'a generalmeet ingmay b(.ill l irc b)/givrng 1 cleardays'notice.Cleardays means he daysmust be calculate(excludinghe dateon which he notice s served, 8 hours i.e.2 days) orpostaltransund L" 6ar1 n \,vhichhemeetings to be held. Thus,wherenotice ssentby post,20lear ays. \n/ i l ln ef fectmeans 5 days..r\ssrcir, or.re eeds to ensure imingsof the meetingsof the boardat whicii l l r t l ror izal iono ssue henot icesor heAnnualGeneral eet ingAGM) nd heExtr iC-\rCinaryeneralL4eetingEGlil)hasbeengivenby he boardS O C l i o n 1 7 ' 1 ( 2 ) o l t h e C o m p a n i e s A c t a | s o p r o v i d e s f o r g i v i n g s h o r t e r n o t i c e i l a |

r'f |nllorsg veconsentor he purpose f holdingAGM and f he 95'/.ot members iv '|on: ie t of i ic purpose fhold ing GMAnsn'r:r .l(aXii)

| l c g u I a t i o n 6 6 o f T a b t e A p r o v i d e s t h a t a d i r e c t o r m u s t h o | d a t | e a s t o n e s h a r e i n t hl.,.,,r,r-ran'.,.herever, harequalifications fixedby the Articles,Section270 of lh '{:onr|ranie.sct shallapply. Eachan deveryDirectorma ynot be required y articlesi rlr:t lr',:lifcation hares.Th earticlesma yprescribehata technical r f nance r oth


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PP_CSP_JUne011Quest ion

(a) State, with reasons n brief whether he followinqstatementsare true or false.Attemptany two :(i) The non-confirmation f minutesof themeetingby the Board of directors nthe next sub'equent meeting does not affect the validityof the decisiontaken n thepreviousBoard meeting.(ii) The doctrine of indoor management is not an exception to the rule ofconstructivenotice.(iii) Annual rcturn of a public company must necessarilybe filed annually.(2 marks each)

(b) Assumedata and draft he noticeof an annualgeneralmeetingof a listedpubliccampany ncluding hereinat leastone of the special busmess lems.(8 marks)'c) Duringa periodof aboutpast one and a halfdecades,a number of countries nthe world have engaged themselves n modernising heir respectivecompanylaws. Can you identify the motivating actors underlying this effotl ? Mentionlndian cene npafticular. (4 marks)Answer3(a)(i)True.

In ermsof Section193('1A),he Chairman f the meeting f the Boardol Directorsor heChairman l th e nextsucceedingmeeting f the Boardof Directorss requiredoinitial r signeachpageof everysuchbookand o date and sign he lastpageof therecordof the proceedings f the meeting. here s no provision s to confirmation fminutes.

Hence, t s ru e hatnon-confrmation f N4inutesouldnot affect he validity f theprevious oardMeeting.Answer3(a)(i i)False.

Th e doctrineof 'constructivenotice"seeks to protect he companyagainst heoutsidersOutsiders ealingwith ncorporated odiesare bound o take noticeof limitsmposedon the corporation y the memorandum r other documents f constitution.However,he principle t ndoormanagement perates o protecthe outsiders gainstth ecompanyand heyar eentitledo assumehat hedirectorsr otherpersons xercrsrngauthorityn behall l hecompany redoing o naccordance ith he nternalegulationsas set out n the Memorandum Articles f Association.

Thus doctrineof indoormanagements an exception o the rule ol constructive^ot ice.Answer3(a)(i i i)True.

As perSect ion 59(1), very ompany aving share api ta l i th in 0 days rom:- e ca)'on whicheachof he annual eneralmeetings repare nd ilewith he Registrar


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PP-CSP-June01a return ontaaninghespeciliedarticulars.owever,ncaseof default,hecompanvandevery ff cer l hecompanyhall epunishableith newhichmavextendo ivehundredupeesorevery ayduring hich.defaullontinues.

Hence, nnualeturns equiredobe ilecl otonlybypublic ompanyutbyever)companyaving share apital,Answer (b )

Ltd.NOTICE

Fegd.Otfice:To all heshareholders f the comoanv

Not ice sherebygiven that the _Annual GeneralMeet ing f the membersCompanyo t ransacthe ol lowingusiness:

ORDINARY USINESS1 To receive, onsider ndadopt heDirector's eport, uditedBalanceSheetasat 31stMarch, and he Profi l nd LossAccount or hevearendedon ha.date ogetherhe Auditor's leporthereon.2. To declare ividend n equity hares.3. Toappoint Directornpiace fShri ,- __ who retjres y rotation ndbein!e l ig ib le f fers imsel for eappointment.4. To appointAudj tors f the Companyand to l ix the i r remunerat ion.M/sChartered ccounts,he etiring uditors reeligibleor eappointmenl

SPECIAL USINESS:5. To consider nd f houghtit o passwithor withoutmodilcation(s)the o owincresolution s an OrdinaryResolution:,.RESOLVEDtI)atMr . whohasbeenappointeds an additional irectoon the Boardof the Company .e. f . and ceases o hold officeat thir

otof the Ltd.wi l l eheld n , he

annuai eneralmeet ing nd n respectreceived rom a memberproposing isDirector f the Company."

at _at the registeredffic

of whoma noticeunderSection257 has beercandidaturee and s hereby ppointed s:

By Orderof the Boardof Director:Ltc

CompanySecretarPlace NewDelhiDate :


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PP-CSP-June 011NOIFS:1. A Member ntitledo attend ndvoteat the meetings entitledo appointProxyo attend ndonpoll ovote nstead fhimsell/herselfProxy eed otbea member l heComPanY

2. Explanatorytatementursuanto Section73(2) f heCompaniesct '1956in respect f temno.s s annexed ereto'3. Paymentfdividendsdeclaredt heAGMwould emadeo he membersllhe ComPanYson daleof heAGM.4. Members reraquesredo intimateo theCompanyhanges,f any' n heirregisteredddress longwithIN ode umber'5. Membersntendingo requirenformationbout ccount'so beexplainedt hemeeting re eque;tedo write o heCompanyt east 0days n advance fthedateol AnnualGeneral eeting6. The register f membersandshare ransferbookswouldremainclosed romto-(both days nclusive).7. Nominationacil i ty s availableo all members or nominationn accordancewith he aw.

EXPLANATORY TATEMENT(purcuant o Section173(2)of the CompaniesAct' 1956)I temNo.5Shri who s a qualif ied ndexperiencedersonwa sco-opted s anadditionalDirectoron the Boardof the companyw e'f =-'- ln termso{ provisions3. section260 ol the companiesAct, 1956,shri-shall cease o holdsuchc- ce at the ensuingannualgeneralmeeting The Companyha s receiveda noticeJndersection257 of the Act froma memberproposing he candidature f shri--'--asa Drrector n he Boardof the Company.

Th eBoard ecommend assing l th eproposedOrdinaryResolution'Noneof he Directors consideredo be nterestedn or concerned it h heproposal'sJ rt on except o the extentof their espective hareholdingn the company'

Answer3(c)A n u m b e r o f c o u n t r i e s i n c l u d i n g l n d i a , A u s t r a l i a , C a n a d a , U K a n d H o n g K o n g h a v enitiated omprehensivelfort o m;dernize heir espective ompany aws The needtobecomemorecompetitive,echno awy, simpleo understandnd nterpreto acilitategreatercompliance,economic o operate,attractiveas a.worth while investmentdest inat ion o accelerate conomicgrowth, o emphasizeon corporatesocla l'esponsrbility.belter.egulation ndgreaier ransparencyn corporate overnance nd'eportingare someof the underlying bjectivesha tmotivatedhem'Precisely,n ndia heprocess asslartedo evolvehemodern'ransparent'nvestor1'rendly,ellgoverned ompanyaw .e .Companies ill, 009 Modernizationfcorporate


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PP-CSP-June011 toregutattonoverningetting,upnd unnrngt enterprises,overnancendaccountabiio th e investors nd otherstakeholdersnd structural n:angesn law commensur;it hgtobat tandards avebecome riricaloi irrlrial;;;;;r"; andenhancementrbranl orporale ector nd Lt'-" *o,r'o,J r ;;,'"'.il::,il:lJil,:'.J#',.:g,l?i:ffiln#est nternarionatracticesn a gtobal i_p"i itr" .r'"rl"it" "'Queslion 4

(a) Prepare directors' report for Anand Entertainment Ltd., ncluding inter aesponsetoa qualification.byauditorsofthe companyfornon_paymentocreditcfrom sm a scate industnes ,""to, arourtii{,J'i,'.Ooo. (State onty maheadingsof directors,report withoutgirrg iri azt"iiJri"pt torthe quatificatia(8 marh(b) Elucidate he relevanceof SecretarialStandard_4n registersand recordsstate its current status. (4 mat.(c) The case of Dilip pendse,y.l. SEBt s highty revealing the susceptibilitymisuse of the SEBI (prohibitionof tnsiaeririaiig) iigutations, tgg2. Brieive your views. -- r/ '"v H marltAnswer4(a)

AnandEntertainment td .Directors,Reportof a ListedCompanyTo .TheMembers,.. ^ I:rl Directorshave pleasure n presentinghetrFortiethAnnuatReporton Iusrness ndoperations f he companyand he accountsor he Financialea r end{1st ,4arch,010.

1. Performancef th eCompany2. Expansion nd Diversfjcaton3 .4 .5 .6 .7.8 .9.

1 0 .1 1 .

DividendTermDepositsParticulars f EmployeesConservationf Energy, echnologybsorptjonndForeign xchange arnin(andOutgoDirectorsl,4anagementiscussion nd AnalysisDirectors'Responsibility tatementAuditorsAudi tors ual i fcat ion


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veat lt

es

)I)))

11 pp_Csp_June20 1Fegardingudi torsual i f icat ions,heDirectorstate s ol lows:For i temscheduleN o . . . . . . . . . . . . . . . o fu d i t o r s l e p o r te a dw i t hn o t en o . . . . . . . . . . . . . . o fAs on date, hecompanyhas et t led 5%of theamount ue (Rs.5000)o thecreditors romsmallscale ndustries nd willmake he paymentof remainingamountat earl iest ossible.

12. AcknowledqementsForand on behalfol the

Boardof DirectorsChairman nd Managing irectorAnandEntertainmenttd.Pu eDated June2. 2010.

Answer4(b)SecretarialStandard on Registersan d Records(SS-4) Relevancean d CurrentStatus

Besides, he necessity 1ma ntaining roperand systematic ecordsof activities,operat ionsnd esul ts ,hegoverningaw .e. heCompaniesct ,1956 ave rescr ibedmaintenancef a numberof records n a mandatory asis.These ecords reopen oinspection y governmentaluthorities/members/creditorstc. and alsoextracts romsomeof hesecan be requisitionedy members.Thestandard rescribesheprinciplesunderlyingach ecord mphasizing ngoodpractices. t providesor maintenancendinspection f the records n l ightof the law and also n tunewith acil i ty l users,bothinternal nd external.The In{ormationechn0logy ct,2000permitshe maintenanceof the records n electronicmode. SS-4provides ha t apart rom mandatory ecords,companles aymaintain anyother ecordso acilitate orking.Someol hemandatoryrecords re register f members, egister or nvestmenln securities,egister or buy-backof securities,egisterorallolment f shares tc. Non-mandatoryegistersncludeemployee ttendanceegister, eglstero recorddailyprotection tc.The compliance ith he provisions f Secretarial t andardss recommendatorynnature.Certain ompanies revoluntary omplying ith hestandardsor hepurpose f

_ooodovernance.Answer4(c)

The case relates o Tata FinanceLtd.,a l istedpubliccompanyof one of the topirusiness roups n hecountry.TataFinance td.hada wholly wnedsubsidiaryn he.an.reof Nishkalpa. l ishkalpa ncurreda huge oss and it was bound o atlect he: l:1om ineol Tata Finance td. lt 'sN4D, riPondsepassed his nlormationo the wife.'. c n turnsoldoff herholdingsn TFL ncludingir eholdingsn sharesof hiscompany-: : : ' ' companescontrolled y heran dSr iPondse'satherat a signifcantgainbefore:- s r.lation ecamepublic.Therewas considerableall n he markeipriceol TFLs-a 'es. , thrs informat ionbecomingpubl ic .y h isprocess,ak ing dvantagef ns ider


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PP-CSP-June201.1 1)lill,iTil,il;5!lffil,TJii.H."lffi::f;:::"".. butnac,as adeonsiderabres:f",::::l-;[lry""#;l.""Tifif ff"[Hli::;ijo,"ill"T,.n"ocorp,,niffi en es.hesha ehJeandn es-rsp,oii';##rnr,"":#:*f ilfl JQuestion

'f:,"#;l:i:;:i,i,f"if,i!:y::,*cretaryinwhote-time

miii;:;::ll,i:::"irrwf;zit;*;nf*ii7:";"f,::,Jif;;-::ii::::;:;';:;:'xn:""'mi;:i(b) what sbonus ssue f sharesnan^., ,- , ^.... (6narks)""";;;;;;;;;;;;:;:;,:,y.:.,i,::,!r[,i;;,8:ii:Ti":Answer5(a) (10marks)

son/daughter/wifeof__=-=-do solemnly eclare sIunder:(i) Thar am

SlrX?:15t"il:::ffit:fi(inwhore-timeractice)n ndiahosensasedn het' ffiiJ:Xi:'":Tj?re.thathe articurarssivenbovererueo he est,my( i i i) Forms 18 and 32 ar e also bein.r rii6.r i_,.1- _(iv) | urrheronfr, ,n", "i-0..I'ngfiled imultaneousry.

tneparrcurarfeffi ;""1r#'j,:i::ilffi:f ;i,il:apprication;andrhatarlssubscribedy nesuoscrit r.li,;: ::"j111" In neArticles fAssociation(v) Alr,he equirementso, hl rs of hecompany.

fl"1[l"ff#fii*f :fl#,:^""'!ifi''"'"T'li:'j#hereunderinconscientiou",r,o,,o*,*lf;j""X#J,[;:?JffiJ' r;JT:ffiXt"i,:lTA(vi) Thecompany aspaid c(vii) rhanhe subscribers,"""':::::t::: tutv as perappricabrestampAct.:;*xillli,",#i{ilif,:!n:?ffi::1,:::::flffirHrman"g"r"nrorI;;';:;i:" in connectionitrrhepro-riotion,rormationi(viii)Thathe ubscribersaves:i*flffi Tl"#::l fi,{:tfrT"#ffz:n :ffi:ff:;ff::


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PP-CSP-June 011I J

"n,iilli **::,;H:nli:Hfi:?Jl";,"""ff"ilvor haresots xitin

rheredoesnotexstry."fi'giJ::iill$F1jl"JiiT;i;:i:trl,.*fii:"li:"'"HH::]qTl-"'ili:il"H*nllg.X.^;';'::i"uLnaurho.zea: *:hl';*, :1,'""H':,1i'"";""'lJ""'i' " o'1".J fl "' rh arce aro

:t:i:'.""il::J:il:::ir::"T,"':fu*:ttl;;ll3:i'i'"l#:illi$fithe Act.StePsnvolvedn ssueof BonusShares.,."ffT,P.?ff:::l::"'ltt'.,y-1';;"Ul'ft?'":"ffiiT'31}l:#:'n"oin"."nttf Regulations'009'Theprocedureor ssue lbonus hares ya isted ompany

senumeratedelow:'::;ffi::i:::i'[:Hsi',J[ii':i:T'fTlil"x^'1,:i":i:ffd;l'ih";*i: "r,1*:i:; :g ::::: ::""j"J"T:,;ffi

io ore ve2 En urehatss*tt ll';,":*nl["i":::tlilf"nterest orprinciparn espectol f ixed deposits or oeut 5vvur.^''- . ,.^^^^ ,^ n",'"r" that it ha s no t delaulted3 E ue,hth" ":f : ,T ij[i:$ ;:::T ;X'"",l'"nl&X"l,"il""onuiu,ininrespect { hePaYno'p''"Ju-iotntuno' ratuityndbonus;4 Ensureha t tnuO"'uU u'O"n"'""' fanyoutstanding

n hedateofallotment''Fil$iftiffi**r**i*s6'sE'ig[ff ':lHJ::Y""''il"ii'o'"'ii'";15"0s'';iJ*J":*iii'*'r#111fl{'1,1'ffi11'*T;:1'LE:iiinstrumentsn he'f ti*tr,iilfi"'Jii"H,lliil:lii[":"'"T":I1]1il$*i"::li:"lruff :ffi'"":iiilfi ::"*ii li ;;i ecaPitatisecbonus hares 'S The bonussnareshallno tbe

ssued n ieuol dividend


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PP*CSP-June 011 1a9. An ss er ,announcjngbonusssue f ter heapproval f tsboardof i rectorsand no trequiring harehorders'pprovarorcapitarisationt profits r reservesfor making hebonus ssue, hall mplementhebonus ssuewrtnin fteen aysfrom hedateofapprovar f the ssueby tsboardof directors. o*euer, *her"th e ssuer s requiredo seeksharehorders'pprovarfor apitarisationfprofitsor reserves or making he bonus ssue, hebonus ssueshallbe mplementedwithin womonths rom hedateof themeeting f tsboardof directors hereinthe decision o announcehe bonus ssuewa-'sakensubject o shareholders,approval.

10. Once hedecis iono makea bonus ssue s announced,he ssue annotbewithdrawn.Note : Candidatescan discussany ten conditions.Question6

Explain s tohow theprovisions f theCompaniesAct,1956 elatingoauditcommitteewill help n achieving ome of the objectives f good CorporateGovernance. (Smarks)Will he erm remuneration'coverESOS r ESOpordetermining anagertatremuneration (S marks)

F)

(b)

(c) whatare he equirementsnder he risting greementeratingopubticationfunaudi:ed uartey results (6 marks)Answer (a )Theconcept rAudit ommittee as ntroducedysection92A f hecompaniesAct,1956witha view o offerbetter orporate ou"rnan"e.Everypubljc"";;;;taving aidupcapitar f not esshanRs.5 roreimusthaveanaudit ommittee.heauditors,he nternaruditors,fany, nd heDirecloroncernedn inancehaIattendandparticipatet the meetings f AudjtCommittee. s per he provisionsf saidsection,he unctionsf the ommittee ncrude(i )periodicareviews boutnternarcontrorystem,i i ) eview f hal fyearly ndannualinancialtatementsnd i i i )compliancef nternalontrol ystems tc.

. . Theprovisionsf aw eratingopowers nd unctionsf heAudit ommitteeeratrngto financiar tatements i, herp n achieving omeof the objectives f corporat;governance.e .Accountabflitynd ntegrityf inanciareporting,earthyudit f inancialandoperationalecords,ransparencyf pol ic ies, etter- ' imptementat ion,imelyinterventionseadingobetter iskmanagement,tc.Answer (b). Asperexplanationb)ofSectionlggof heCompaniesct ,1956, nyexpenditureincurred ycompanynprovidrngny otherbenefit r amenrtfreeof change r at aconcessionarateo tsdirectorndmanager Ir ormpart f h; term remuneration,fordetermininghequantumf emunerationutgoormanager"nt ei.onnet.here eemsnodoubtha tsweat quity r ESop reeoiat rower oi t too,lectorsa ,benefit,.Thequestionswhether rovidingSoporESoScanbe ermed sexpendrturencurredythe ompany,scompanyoes ot ncur nyexpendituren hese eads.Expenditure,


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15 PP-CSP-June01is something aidou tor spent. lt is true hat as pe raccourlting olicyof ESOPas perSEBIguidel ines,he accounl lngalueof the opt ion ranteds treated s employeecomp;nsationn accounting.Flowever,ompanyha s nol paicl ut any anrount o th edirectors r othermanaging ersonnel nd herewa s no exoerrditure lence' legally'suchamountsnotconsidereds ' remunerat ior l ' ioheDirector nder heCompaniesAct ,1956.

Anotherview is thal consroeringhe legislalive ntentand consideringhat thedelinition f remunerations nctusivJ nc lnoi exhaustive' uc hsweatequityor ESOPmay be heldas remunerationo director'Answer 6(c)

.1. As perc lause 1 ol theLis t ing greement ' company. isequi redo submit lsquarterly, ear o datean dannual inancial esulls o the stockexcnange2. Thecompany asan opt ion i the/ o submit u6;1"6 1un2udi tcduarter lynd-

V"ui to ute tinancialesultso th estockexchangewithin orty-five ay sofendof eachquarter other han he astquarter)' ubiect o the ollowlng:( i ) Incase hecompany pts o subrni t naudi tedinancia lesul ts 'heyshal lbe subjectedo iimitLd eviewoy he statutory uditors t the company orin case of pubI icSectorL,ndi r tak ings, y any pract iCing harteredAccountant)nda copyot he imited eview eport hallbe urnishedo thestockexcl'angewithin orty-five ays rom end o. fhe quarter'(ii) In case he companyopts o submitaudited inancialesults'hey shallbe

accomPaniedY he audit ePort'3. In respectof th e last quarter, he company.has.n optionelther o submltu n a u d i t e d | i n a n c | a l r e s u | t s f o r t h e q u a r t e r w i t h i n f o r t y j i v e d a y s o f e n d o t t h ef inancia learor o submit udi tedinancia lesul tsor heent i re inancia lear*itnin .i*iy daysof end of the inancial ear'subject o th e following:

(i) In case heco,npany pts o submitun-audited nancialesultsor he as lquarter ,tshal l lso ubmit udi tedinarrc ia lesul tsor heent i re inancia lyear,as soonas heyar eapproved y he Board Suchun-auditedinancialresultsor the as tquarter hallalsobe sublectedo limited eviewby thestatutory udllors i th" "otpuuy (or ncaseol putilic ectorundertakings'by any practicing harteredAccountant) nd a copyof the imited eviewreport hallbe urnished o the stockexLrflangevithinofiy-l ivedays rornend of thequarter'

( i i ) Incaie thecompany pts o sLrbnl i tt tdr tec jlnancia lesul tsor heent i re' financialyear,t shall ni imatehe stockexchange nwritingwithin ortyJivedaysol end of the financial ear, jboutsuchexercise f optlon4. However, hena company pts o submit n-audi tednancia l esui ts for thelastquarter f the inanci ; lyear ' t shal l submita statemeni f assetsandliabilities s al th eend of th e nancial earonlyalongwith he audited nancialr e s u | t s f o r t h e e n t i r e f i n a n c i a | y e a r , a s s o on a S t h e y a r e a p p r o v e d b y t heBoard.


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l oPP-CSP-June 011Ouestion7;',,iy{filfii#"F,r:iillt:i-isx:x:a*iii"Liiii,n" timeimt..rorepavmentr'!i"2?,iil3i,iJ,i;l,"winswithrererencei:i,'J:;ff::: :;7[[":;;;;";;d 1 6(i) wha s author*"al n'[i "" "xtension asre,que-stedy thedirector0i )Draftnupp'opna'"ioti""or hemeetinghereuch"""nt'olUf,l!'X!'granteo' i:i:";;,rlit#iiff,rtffi*iii#iil[*ii"i le hebalancêh"?t-l't 6661. The petilioner en g ac'W:;:f:*f,-;;,,n!,i;i;";1gt;;i,,;!:!'rla'il'iini"v"!''!,""2?3"3i0ri,",'""!;T!î,!i?!,i!,'iJtni"omp"nvnar"otIZT:;,:!""i";::"J:t'Ji"i"7"i*"ti'reclorsorthecompanv*fi'7l^!'ll

,,,'î:#;###;ir'#-Ji;:;";r;;:g;rli::rtr:i::i;:;^,?i:i:i:i!;::::'::::#'^:"':;:::'iu'io;;,, ::::::;:::,,J2;:,':l:;:";::!7::,:fl1fl:,',Zl':,:"::;i:::;Answer (a ),oilT,Tt:i""ffi'Jfr?11!X:i,"J"'"'ffii{*[iHfiil[i:"::l':ill1::.jni:filf'#iliful;lil"'#:;txr;:'*:l*Jt"J:L"the director'

(ii) Notice'lorhemeetlngwheresuchextensionma ybe granleoNotlce I -- - -GeneralMeeting/Extraordinaryeneral

Meeting

XYZLimitedRegisteredOflice--.---.-------"';';;;;;rr'*;"tht-.;Jr-,,-no;:i["jfl"[T;:'ji'"1"j11Sll:"''.'":i'""'T?##JJJI;*"'-'***"'0"?3!1?!;fi"'--1o"t"i at - -(time)at{o l lowingusiness:

(address)o ransacthe


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PP-CSP-June011 7Special usiness:Jr"n,ing"rr"ntionol imeor he epaymentfdebtr. roconsioer"ld: 'l!l1s::-\ll,,ll,iX1l;J'L11,""1ithout

odifications'helollowingResolution s an uRE oLVD h tpusanroH5;:t,."J;o"j,t"?:l::.',Xtillt:#1,iKiiili,"i"' Act. 56.onsen',!ijil;i';i;'lT:.iTl,jl?lr::,],i,,::i::::'.?';::ii: ffii[:,#o';;i;;;f theompanvvJir"iiiontn"unoinon----(date)

2 .3 .ByOrder f heBoard tDirectorsPORComPanYecretarY

PlaceDate :

""-:r["J;*;ggfiqiHf*f;:r"ilTlliR*-ti,n'tliflt!ilftrii':",!,;#l'liii-i'",:il:r$*"*:flletc. I^"':::::).,*"speciarresorution^1"-':ll'.'?Tiill"x',H':::J$iff *:[l]ll::'i;ri*lk#Ji,"*{'"*4s;:i:l::lLu*?1.3'ifl}"jm,l3:*ln::::'ffi

Here,80 ember"'" p'"!"nt'ou t lwhich0have bstainedrom oting' o'60

;i#"f*'*ii*t*tltt;*t**"Ji:r::1'"':J:*H*"1 5 ) .


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PP-CSP-June011 18Answer7(d)Theadvantagesol SettingUp Business n Hong Kong

HongKong s an nternationallt ywithadvancednformation,nd he reestharborfor rading n heworld. t provideswonderful usiness ituationsorenlrepreneursndbusinessmen.he advantagesor settingup HongKongCompany re as ollows:(i) Free o Choose he Nameof theCompany:lheHongKonggovernment l lowsthe namesol the company o ncludehe wordssuchas international,hamberof commerce, nltedgroup, oundation, ssociationor promotion, tc..(it) Little Restriction of the Business Areas : )eweiy, treasury, sntpmenr,transportation,mportand export,houseestate,websile, esearch nstitution

an dotherhi-techndustry. l l hesecan be businesses.(iii) GreatDevelopment n Low TaxationEnvironment:Jhe taxation n Hong Kongis very ow.(iv) Fasy to Get the nternational redit ll is known o all that Hong Kong s th eeconomic nd inancial enter n Asia,everystreetof whjchha s banks.Creditis the basis o develop nternationalusinesses nd is easilyavailable.(v) DoingBest o Get he Inhabitant ight n HongKong. lf yourenterprises avedonecontributionso HongKong, ouba napply o thepeople,snbound ffairsofficeof HongKong o arrange he visa or doingbusinesses.f peoplehaveinhabitantedn HongKong or7 years, he yca nget he eternalnhabitationightinHon! Kong.f{ongKongCompanies reguidedby heHongKongCompaniesOrdinance.

QuestionWritenoteson any four of the following(i) Online nspectionof documents(ii) Corporatesocialresponsibility(iii) Resolution equiringspecialnotice(iv) Chinesewallpolicy n areasofpricesensitivenformation(v) Boardmeetinghrough ideo onferencing. (4markseach)

Answer (i )Onl inenspectionf documents

Thedocumentsiled nline, nce aken n ecord y ROCOffices reavailableor .public iewing npaymentf requisiteees. hese ocuments,hich re n domainpublic ocuments,ncludeocumentselatingo ncorporation,harges,nnualeturnsandbalanceheets nd hanggndirectors.certifiedopyof hedocumentsanalsobeobtainedyanyoneo nterested.or hispurposeheresalso noptionomentionthenumber l pagesn hedocumentorwhjch certifed opy s equiredswellas henumber fcooieseouired.


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PP-CSP-June 0111 9Answer (ii)Corporateocial esPonsibilitY

Thesubject f CorporateocialResponsibilityCSR) as^wolveduringhe ast{ewdecadesrom imptenlrantnroflcctivitieso ntegratinghe nterestf hebusrnesswith hatof hecommunities" ;; ; n;;;"s Alihough enaveseen'1 "t:1'::sustained conomic rowlh n in" ""i""'decade' we stillcontinueo lacema1or

chalrengesn henuman ioe,n.tniiaine prootemsike overty,Irteracy, arnutritronetc.have esultedn" r"'gu"""tioiJitne pipuration"tiiilg^1tun ncludedrom he

mainstream.We need o uooi"t' tn""" challengeshrough uitable flortsandinterventionnwhich ll nestare

ii io""tulu t"trJrs needopartnerogethero indand mplementnnovativeolutlons

TheCSBpolicy houldnvariablyover: areoral lstakehold-erslthicalunctioning;resoectorworkers,gntsanoweltal, r".p".it", f'u.an rights,espectorenvironment"i"il.iv-iti"" ro tsoci"alnd nclusiveevelopment'At present,heMinistrv l Corporatelt"l1:]y9l]i.1"^"lhs forwardomoreandmore usinessommunltlesomingorwardndadoptingheCS'R oluntaryuidelinesissued y t TheMCAhasalso iJtt''o"o a form or illing pof hesame nvolunlarybasisoreport nCSRAnswer (iii)Resolutionequiring pecial

oticA resolut ionequlr lngpecial ot ices notactual ly n, ndependentlassorresolutions ucharesolutronn"a"yi""-no'oin"tyot tpecial e^solutions

perprovislonsot the companies ct ,1956, '.p"i"i"",i"" maybe given n respect f followingrnaners:

(a) For heappointmentl anAuditor therhan he etiring udltors:(b) Fora resolut ionxpresslyrovidinghat he ret l r ing udi tor hal l ot tereaPoointed(c ) For emovingDireclor eforeheexpiry fhis erm (Section84)'(d ) Forappointlngnother erson sdirector'nplace f hedireclororemovedThearticlesfacompany ayalsoprovideorcircumstanceshere pecial oticeis equired. spersection go'";ih;l;i' notice hould otbelesshan14daysbelorethemeeling.n" "o'puny *""'iirnt"ii't"rv g*" itsmembrs

otice f he esolution'll rhat sno tpracticable,n" ""tp""V t"ttlive notice ither yadvertisement

n helocal ewspaperr,n neorne'"mJie

'attoweoiytnenrticlessuchadvertisementus tl" gi"""'"id"., z clear aysbelorehemeeting'Answer (iv)Chinesewall policy in areasof price sensitive nformation

Pricesensitivenlormations requiredo be dissemlnatedlohestockexchange nan mmediate nd continuous asisl-io preventnemisuseotconf dentialnformdtion'


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PP-CSP-June0'1 20theorganizations/frmsadopt "Chinese all" olicywhich eparaleshose reas lorganizations/frmswhich outinelyave ccessoconfidentialnformation,onsidered"inside reas" cjmhose reaswhich ealwith ales/marketing/nvestmentdvise rother epartmentsrovidingupport ervices,onsideredpublicareas'.Answer (v)Boardmeetinghrough ideoconferencing

With he rapidand remarkabledvancementn telecommunications,omputertechnologyndelectronics,onduct f boardmeetinghrough ideo onferencingasbecome ossible. ideo onferencingnables eople itting t a distance f housandof milesoeffectivelynteract itheach ther sal lol hem annotonly eeeach theronscreen utarealsoaudible. nUK,USAandother evelopedountries,onduct fboardmeetingshroughideo/telephoneonterenceasbeen ccordedegalecognition.In India,he nlormationechnologyct ,2000hasalsoprovidedegal ecognitionotransactionsarr ied n in electronicataexchange nd othermodes lectroniccommunication.owever,he Companiesct ,1956 oesnotcontain nyprovisionenablingompanieso hold lectronic/videoonlerencingeetings.n his ontext,heprocess asbeen nitiatedy heGovernmento examineheproposalndunder henewproposedmendmentill, uchprovisionasbeen uitablyncorporated.


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DRAFTING,APPEARANCES NDTimeal lowed:3hoursNOTE : Answer S X questionsncludingQuestionNo 1

(ii) Equitable mortgage tscreditorsas well as theadvantages.

PLEADINGSMaximumarks 100

which s COMPULSORY.Question

(a) tn ndia, heresno iaw nconveyancingr nterpretationf documentsExplainhowdisputedmbiguousormaldeeds anbe udicially ecidedhenlBmark")(b) What6 meant y'outsourcing'Draft specimenfanoutsourcingg(':"#il:,

b) Re-writehe ollowing entencesfteri ing-inheblankspaces ithappropriateword(s)/tigure(s)(i) ln the casewhere themoflgagorwithoutdelivering ossession f themotlgagedropenybindshimsetlersonaltyopay hemortgagedmoney'andagrees xpressty r mpliedlyhat f he aits o.payhedebtand nterestin terms t themongage eea, hepropertywillbe soldand hep.roceedsapbtied n paymeit of the mortgagedmoney'such a mortgage scalled_

by the tenders/banks/ol the nherentcommercial nterPrises ecause

lii Theterm 'deed'normally ef ers o all the nstrumentsby whtch wo or morepersons gree o effect nY(iv) Thegenerat equisitesfanarbitration wardmustbe-con":::::Y:"::?submission,ertain,air othepadies, and its mPlementationmustbePossible(v ) Thegeneratule,w n referenceoMrs OmPrabhaJainvs bnash hand' ' Jain:AIR1968 C 1083,s hatnopleadings'o - " - -i marx acn)

Answer (a )Relevantrinciplesf nterpretationfdeeds nddocumenls

re :Informal greements:n Interpretat ionl informalgreementshe rt l le o beapplieds hat t easonaDlexPectation;hats osay' heagreements o be nterpretedin hesensenwhichhepanywnousedhewordsnquestionhouldeasonablyave

"ppi"f]".l"O that heother artymayapprehendhem lfthe ntentionsmanifested

;i;br;r;iy, in " purrvmanifestinghesame n an ambiguous anr'rerughto r^avehad iason oknowhat hemani{eatationay easonablyearmorehanonemeanlngu"J tn" "tn"i p"rtybelievest o bear neol hosemeanings'aving oeasonoknow

that t bears nothermeaninghat sgiven o t21


22/42

PP-DAP-June011 22Formal Agreements : \tlhere tc agreementrulesof rnterpretationa)/be applind. is lormaland written, he following

(3)

(4\

(5)

(6)

(7)

(1) A deed constitutes he primarye\/idence t the termsof a contract,or ol agrant , r of anyother isposi l ionf propeny Sect jon 1 ol theEvidence ct) .fhe la w orbidsany contradictio nf,or any addition, ubtraction r variationna wnttendocumentby any extrinsjc vidence, houghsuch evidencewjll beadmiss ib leo explatn ny antbigui tySect ion 2 of the Evidence ct) .Thedocument hoLtld,herefore, ontain ll he ermsand conditions, receded vrecital f all relevant nd material acts.(2) In casesof uncertainty,he rulesembodiedn provisos an d6 of Section 2 ofthe Evidence ctcanbe nvokedorconslruing deed.Th esixthproviso nablesthe court o examine he facts an d surrounding jrcumstanceso which helanguage f the documentmay be related,while he secondprovisooermitsevidence l an)iseparate ralagreement n which he documents silentandwhich s not nconsis tenti th ts erms.

The cardinal u le s that ctearand unambjguous ords prevarr ver anyhypotheticalonsiderationsr supposeclntention. ut f he iiDrds se dare notc lear ndunambiguoushe ntent ion i l lhave o beascerta inedInc3sc the ernrsare not unambiguoust is egitimateo take nt oaccounl hesurrounCingi rcumstancesor ascerta in inghe ntent ion f the part ies. hesocialmil ieu,lr eactual ife ituationsnd heprevailingonditions l thecountryarealso e levantt rcumstances.Sometimes contract s cornpletedn wo parts.At tirstan executory ontractisexecuted nd ater n an executed ontract.ncaseof anydifferenceetweenthe preliminaryontract nd inalcontracthe termsof the attermustprevail.ll in a deed an earl ierclause s lollowedby a laler clause whjch destroysaltogetherheobligation reated y heearlier lause, he atter lause s o oerejecteds repugnanind heear l ier lause revai ls .Th ecourtmUst nterprethe words n heirpopular, atural ndordina,v ense,subject o certainexceptions s.(i) where he contract tfords n nterpretationifierentrom heordinarymeaningol thewords;or( i i ) where l re onvent ionaleanings renot hesamewith hei r egal ense.Hardshipo eitherparty s notan element o be considered nless tamountsoa degreeoi inconveniencer absurdity o greatas to aflord udicial roof hatsuch ould otbe hemeaning f hepart ies.A l lmercant i leocumentshould eceive l iberal onstruct jon.hogoverningpnnciplcmustbe oascertainhe ntention f hepartieshroughhewords he yhaveused.The Coudshould ot ookat echnicalulesof construction,tshouldIookat lhe wholedocument nd he subjectmatterwith which he partiesaredealing, ake he vords n theirnaturalan d ordinarymeaningand lookat thesubstancef hematter .

(8)

(e)


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23 PP-DAP- June2011(10) No clauseshouldbe regarded s superlluous, incemerchants re not n thehabitof inserting tipulationso which they do not attachsome value andimportance.heconstructiondopted,hould, s aras possible,iv ea meaningto everyword andeverypartof the document.(11) Construction iven o mercanti le ocuments ears ago, and accepted n themercanti le orldshouldno tbe departedrom,because ocumentsmay havebeendrafted n he aith hereof.(12) lf certainwordsemployed n business, r in a partlcularocality, ave beenused nparticular ense, heymustprima aciebe construedn echnicalsense'(13) The ordinary rammaticalnterpretations not o be ollowed,f t s repugnantothe general ontext.(14) Antecedentactsor correspondence,rwordsdeleted elore he conclusion fthe conlract annotbe consideredelevanlo ascertainhe meaning'(15) Evidence t actsdoneundera deedcan, n caseo{doubtas o ts ruemeaning,be a guide o the nlention f th eparties, articularly henactsare doneshortlyalter he dateof the nstrument(16) Unless he anguage f wo documentss dentical, nd nterpretationlaced ycourlson one document s no authorityor the propositionhat a documentdifferently rafted,houghusingpartial ly imilar anguage, houldbe similarlyinterpreted.i17) l l the mainclause s clearand he contingencymentionedn the provisodoesnot arise, he proviso s nol attracted t all and its languageshouldnot be

referredtoforconstrUingthemaincIaUseinamannercontradic toryto i tS import '(18) The tact that a c lause n the deed s not b inding n the ground hat t isunauthorisedannot ps o acto ender he wholedeedvoidunless t ormssuchan ntegral ar lol the ransaction s o render t mpossibleo severe he goodfrom he bad.(19) As a general uleol construction fdocuments,he recitals re not ooked nto'rf he termsof the deedare otherwise lear' f in a deed he operative art scIear,or theintent ionof thepart ies isc|ear |ymadeout,WhetherconSistentwi ththe recitals r not, he recitals av e o be disregarded( 2 0 ) S o m e t i m e s a s t a n d a r d f o r m i s U s e d , p a r t l c u | a r l y i n c o n t r a c t s w i t h g o v e r n m e n t

departments r big corporations.n these standardprinted orms,wordsnotaDpI icabIearedeIeledaccordingtotherequi rementsot iQdiVidUaIt ransact ions.Answer l(b )

Outsourcings hecontractingutof a company's on-core, on-revenueroouclngactivities o specialists.t differs rom contractingn that outsourcings a strateglcmanagementoo l ha t nvolveshe restructuringf an organizationroundwhatat oesbest- its corecompetencies.Two common ypesofoutsourcingre InformationechnologylT)outsourcingndBusiness rocessjutsourcing BPO) BPO ncludes utsourcingelatedo accounting'human esources, enefits, ayroll,and finance unctions nd activities. nowledgeProcess utsourcingKPO) ncludes utsourcingelated o legal,paralegal, nd otherhighlyskilledactivities.


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PP-DAP-June2o1l 24A Specimenof OutsourcingAgreement or ConvertingHardCopiesof a Book in aCompactDisc (CD)

ThisAgreementor he conversion f the book itled ntellectual roperty rotectionin ndia sexecutedn . . . . . . . . . . n . . . . . .201 by andbetweenThe Golden awPubl ishing o. Pvt Ltd.having hei rOff ceat . . . 'r e p r e s e n t e dy M r . . , . . . . . . . . . . . . . . . . . ,- n a g e r , o l d e n a w P u b l i s h i n go Pv t L t d(hereinaftereferredo as the GLP P\4.Lt d )ANDM/s BluetecWeb ServicesPvt Ltd,a Company egistered nder he CompaniesActhavinghei r f f ice t . . . . . . . . . . . . . . . .and epresentedy Mr ' Di rector '

M/s BluetecWeb ServicesPvt. Ltd, (hereinaftereferred o as the M/s BluetecPvt'Lrd.)WHEREAShe GLPP\,,1.td .haSpublishedhebook ntelIectuaIroperty rotectionin lndia t has decided o convert he hardcopiesof abovementioned ook nt oa softcopyVerSionbyget t ingthebookdig i t izedandthereal terput thecontentsol thebookinu io (corpa"t Disc)alongwitha searchEngine. he GLp pvt.Ltd. oated tender orthisbookvide enderdocumentwithclosing ate . . .. 2011an dafterevaluatinghebids of variousparties, he GLP Pvt Ltd has decided o award the prolect o M/sBluetecPvt.Ltd. on th e followingermsand conditions:(1)M/sBluetecP\4.Ltd.wou|dperformthejobotdig i t isat ]on(of there|evantport ionsmarkedor d ig i t izat ion)f thebook ncluding atapunching Scanning' CR

Validation, roof-readingatan accuracyevelof 99 9%),Tagging ccordingosearchparameters, inking, ndexing tc.M/ s BluetecPvt.Lld. wouldbe developing searchengineas per the GLP'srequirement.he searchenginewouldbe licensed o the GLP Pv t Ltd lor it soeipetual se.The GLPPVt. td.would urther e ree o use hi sSearchEngineior'"ny putpote and wouldnot be liable o pay to M/s BluetecPv t Lt d anyaddi t ionalmountorsuchusage.The copyright t the contentsof the CD, marketing ightsand all otherrightspertainingo the saidCD wouldsolelyvest with he GLP Pv t LtdM/s BluetecPvt.Ltd.undertakeso complete he assignment ithina periodof10 0days rom he dateof execution f thisagreementAfter he completion f he obM/s BluetecPvt.Ltd wouldgivesuflicientrainingincludingechnicalspects elatingo he eatures f hesearch ngine evelopedby th e Mis BluetecPvt. Ltd. o the peopledeputedby the GL P Pvt Ltd tof;cilitate o use he search ngine ndependently.he rainingmustbe up o th esatisfaction f the GLP Pvt. Ltd in all aspects.M/s BluetecPvt.Ltd.wouldhandover he digitized ontents f the booK o theGL P Pvt.Ltd.after he completion f the obThe totalproject ost o be paid o N,4/sluetecPvt.Lt d would be as follows(a) CostofdevelopingheSearchEngine 8s 50,0001 Rupeesiity housandonrv)

12)

(3)(4)

(s)

(6)n


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(b)(c)(d)

25 PP-DAP- une2011Digitizationos t or eachpage in hardcopy) Rs 12 l pe r

pageConversion ost or eachpage in soltcopy) Rs 10/-per pageT o t a l c o s t o t e a c h C D i n c l u d l n g t h e m a n u a l ' j e v J e l c a s e ' p a c k i n g ' p r i n t i n g""Jt"" r , ,v teatures Bs 85l Per

CD

Conversionos tof eachpage insott opy - Rs10/-perpageTotal os tol eachCD ncluding^theanual'ewel as"-p'iill?; printing ndsecurityeatures Rs8sr-per 'D 1s;;";l i; " minimumotof 1000CDs)Borhhpati se" : 9' :lliljl "?irXT,;.?iiff "]:::lf ::ffi:,:l'i;bv all emainingermsandconolltne GLP Pvt.Ltd lor tf'e saroJo nAn ynotice r request rcommuaicationlvenor requiredobe givenunder

hlscontract hallbe given1o:A. In case of M/s Bluetec o:

Mr. .. .. , Director'M/s BluetecWeb ServicesPv t Ltd(GiveAddress)

B. ln caseof GL P Pv t Lt d tcMr. . Manager'GoldenLawPublishing o Pv t Lld'(GiveAddress) '(3)Aus tes9,,i" i19.".,Tl|r:ff ffi lff i"tJilil"","Tf .:'il itl"'"t""#:"ff1"1ff [f |,1i""'"u*;'o-o"n"sole rbitratorhall e inarnd

It s o benoied ha t heonglnal D otwould eo{750CDsonlyFor hepurposefpage ount' 07o rmore overage'woulde reatecisonefullpage nd essnanSozwouiJOegnoredndwould otbe akenncountrng

(8 ) M/sBluetec vt Ltd would otbepaid nvadvanc-".l:l:lP' ""d"nakingtheiob.M/sBluetecWeoserv'ce"sitlltO *ourono*everbe aid 5o'of he otalDroiectostafrerhestage;;;;;;titt ol

theMaster D andsubjecto heiaiistaction f heGLPPvt Ltd'

(9) M/sBluetec vt Ltd agreeso keep he hard:9?t::.1.)f" bookgrvenordioitizationngood hape^ 6'"itl" Pv t Ltd hash9w'e'Yereenallowedomirk he elevantouiont"iui"o*ioi searcnaggings ith pecialmarks'110)ForupdatingheCD' heGLPPv l Ltd reserveshe ightto ither onduct

he' -' upo"ronp"r""q::.{}jjl':":ii1*i,Eii :?:Jil:li::1,$;BluetecPv l Ltd or any oIir]L"iii a'nnl. "'u"tecFv t Ltd thecostwould eas orrows:{a) content ssimiration,ofiware pgradationndAnnualMaintenancehargesRs.10,0001Pernnum(b)lc )

( 1 1 )

(12)


26/42

PP-DAP-June 011

Signed nd Delivered Y:On behalfof M/s BluetecWe b ServicesPv t Ltd'Name:Designation:Place:

ln the Presence l witnesses:1 .2 .

Answer1(c)

Ouestion(a) ExPlainhefollowing :

(i) Forcemajeure(ii) Debenturerustdeeds

On behalfof GL P Pvt.Lt dName:Designation:Place:

26bindingnboth hepanlesThearbitrationroceedingshall eheld nderheorovisionsf theArbitrationndConciliationct '1996as amendedil ldate'Theolace farbitrationhall e .'

(14) TheCourtsal .... (Mentionhename f heplace) lone hall ave urisdictionto adjudicatenydispute rising etweenheparties nderhisagreement'(15) Notwithstandingnythingontainedn hisagreement'heparties greeha tany ermsot tnrsagreelientmaybe varied y wayol.supplementaryeed/agieement.uch upplementarygreemenvdeedhall eellective nly f t siriwriting ndsigned ydulyauinorisedepresentalivestboth he parties'

lNWITNESSWHEREOFheparties ereto ave et heir.respectiveandso heaoreemenln heday,month nd heyearmentionederein bove'

(ii)( i i i )

(iv)

(v)

ln hecasewhere hemongagorwithout eliveringossession l themongageoprop"rtv ino" imselfeisonallyo pay heT9'ls"s:9 T",l:v'andagreesl".ro."trr.,r imoliedlvhat f he ails o pi y tne debtan d nterestn ermsof th e#;;#;;;J:*-e-prof "rtv itro" otoandheproceedsppliednpavmentrin" r.ioigug"ooney,such mortgagescalled !4P'!9!!91!9ase'EquitablemortgagesplelClte! by he enders banks creditors swellas hecommercial nterprisesecause f he nherent dvantagesThe term 'deed'normally efers o all th e instruments y which wo or morepersonsagree o elfectan y gh! or liabilityThe general equisites f an arbitration ward must be consistentwith the.rurlr.i"", certain, ai r to the parties, inal an d it s implementation ust bepossib le.The qeneral ule,with relerenceo Mrs Om PrabhaJainvs AbnashChandJain."ntR 968SC 1083, s thatno pleadings' o 9J!den9!'

(4markseacn)


27/42

27 PP-DAP- une 01(b) Discuss owsection ot theTransfer fPropedyAct'1882egardingperationof transfer assimplified arcelsclause'na deed (8 marks)

Answer (aXi)ForceMaiaure

Verymportantrovisionitnessednmodernommercialontractselateso orcemaiaure r excusesor non-p"nJitun"" Thisprovisionefines s owhatparticular:iffi;#;;;-"u"ttr" o"yono hecontrol f heseller ouldentitle im o derav rreluseheperlormancet hecontra;t, ithoutncurring.liability.for.damage.t susualtol ist he exact i rcumslances";; ; ; t i ; ' t i restr ixe 'ocxout 'i^t 'c iv i lcommol ion'Governmentrohibition,tc wn'chwoufO 'ou.id9.3!^1*:^u-teo.the ellero delay rrefusehepertormance.tmayoe urther iovidedhatevents l a similar

ature hicharebeyondhecontrol n" t"i"i "nJ ihich could othavebeenavoided ithdueJ"tioence ould lso urnishheaboveeliefAnswer (a)(ii)

Companiesn hecourse f heir ormal usinessorrowunds yvariousmooes'one uchmode eingn" ssue t'o"eO"niut"tn ttu" ol debenturessusuallyecuredbv a trustdeed,whereunder ovable nd mmovableropertiesf hecompany remortgagedn avour l tne rusrlellJrlne benefit f hedebentureoldersThe rustdeed ocreated,s n n" c"s" oJ rust' hould pecily ll hedetails hich ave eenmentionedarlier.ln additlon,heusualmportantonditions{debenturerustdeedsmaybestatedas ollows:1. The rustdeedusually ives legalmortSlSg l ?]Tk capital nda floatingsecurityn heother ss'ersl heiompanyn avour t he rustee nbehalf fthedebentureolders2. The rust eed ivesndetailheconditionsnderwhichhe oansadvanced'3. The rustdeed houlo pecifyn some etailhe emunerationayableo hetrustee,heir utiet"njffiintio'r'ties in relationo'therust

roperty ection119of he ompan,",qit, Sso p""ificallyrovidesha t nyprovisionontarnedin a trustOeeoor sec-uiingl" "' " ol debentures'hichhas he effect fexemptingtrustee iinJe"mnifyingimagainstny iabilityorbreach l rustshall evoid4. lt alsogives n delarl ighrs l debentur: ?111t]"^L"exercisedhroughhetrusteesincaseoldelaultbythecompanyinpaymento| interestandprincipalasagreed Pon.

Answer (b)Theparcel lausencludesords uch 3:Messuages'enements'ereditaments'Land,Wateretc Butuse t iitt"-** hasbeen enderednnecessaryn viewolS"iiio^ a ofTiansfer l Property ctgiven erein elow'"section . Operatlonl transler Unless dilferentntentions expressedr


28/42

PP-DAP-June 011 2anecessar i lvmpl ied, t ranster l propertyinterestwhich he ransferors thencapableincidentshereol.

oasses orthwith o th e transteree ll theof passingn th e property, nd n he egal

Suchinc idenls inc lude,wheretheproperty is Iand, theeasementsanneXedtherelo 'th e rentsand profits n"'"o'"t"i' in"git l!itie transter'an d al l hingsattached o th eearth;And, where he property s machinery ttached o the earth' he movablepartsthereol;And,where hepropertysahouse' heeasements nnexedhereto'he rent hereolaccruinqalter he transler,uno

''"nlio"k"' keys' bars' doors' windows'and al l othertn,ng;p-rovioeoorpermanenl se herewith:And,where he propertys a debtor otheractionable laim' he securitiesherefor(exceptwhere he y"' " atto to' oti'"i o""oitoi "r"imt

no t ransf rred o th e ransf ree)'tut notarrearsof nterest ccruedbefore he ranster;

And,wheretheproper ly lsmoneyolotherproperty 'y ie ld ingincome,theinterestorin"#""in"r"ot acciuingafter he transf r takeseffectQuestion3

@) h wnatrespect,t any' pleadingsn thememorandumo-t ppealsundersecttonssoto s, rder L' '*i)iirli"iio ii'bs' to-qc 10.6'rder Lttt' utesandand Appeatso sup'"iito'i"'io"i tiecoaeot'C^ivit.Procedure1908' ifferfrom thepteadings''^ii")rc iia"' Artictes

s2(1)' 3sand1s4of the)Constitutionf ndia?

(b) State,with reasonsn brief whetherhe ollowing tatementsre rueor false0 Draftings first hinkingndsecond ompostng'(ii) Registrationf partnership eans egistrationnder he ncomelaxAct'1961.(iii) tn practice'appt*ations' nd'petitions're nlerchangeableerms(iv) A rightof appeats nota natural r inherent ightbut a creatureof thestatute'(v) Dress odeprescribedy the nstitutef Company ecretariesf ndia or

itsmemberspp"iingT"tor"tibunatssabunch'n''o"l!"nlu7[!"""r,

Answer (a )TheCode fCivilProcedure'908 rovidesor ourkinds fappeals:(1) AppealsromoriginalecreesSections6to99andOrderXLl);1Z;SeconOppealsSections00 o103);(3 ) Appeals omOrdersSections104to 106'Order Llll'Rules and2) :and(4) APPealso heSupreme ourt'


29/42

29 PP-DAP-June2011

{1) ADoealsro moriginal ecreesmay be prelerredtorn:y:y':'""t"" oassedby

r,:'.:rumn:s;l,lltt#{:'r;*"ffii*ru;:lH:saraeeeas(2) econdppea''.':".:,i:Xlll 3:[]llfftlH:?i3?ii,1ii:i?J':'"::::"::1,::'""::iifill"".i""o" *underection00o he ode n pp"urTuI,11?lll^T':ff:fflfft:ffin'ffi ,ili#:.ilFi?trid#$["#1fffl ?t*ffi|:HliJil:i5J'J:"{J?ih*+T'#J:J::'"".^"'""**n::lcnqaPPeal, e allowedo arguernheecond"qo:"1,-lll^,l"nl.?3!1"fi;|li#33i3i,lJ'li""i*"''suff cient, etermine ny s.,[:,;X:ff,:ll"'.?:1":":.'ilff#l'^$:,ii,:'J;Jiteo:ourtorbothbvthe*'::$i;::""ilil"il1#":fiH:l?J"#13;iJs:ft1^"#Ji

(Section 03)l3\ Aooealsrom'OrdersunderSections

104to^1o'wouldieonly rom he ollowing't'AY#;;;;t;unds olderect

r rresuraritvt aw:(a) An OrderunderSection 5Aol the Codeallowing pecial osts;(b) An Orderuno"' S""' ' lon"gl'o' "o'on 92 refusingeave

o institute suit;(c ) An Orderunde'S""t'ongU o' tornpensalionorobtaining

rresl 'attachmenl'" ' o' i ' i lunttion n nsufticientroundi ^lioynno oernoe*l*::":ru:;'i"r"#:J'llllt the etentionrarrestof anyPerson xceP(e) Appealable rdersas se tout underOrderXLlll ' Rule

1'

(4) Appealso th e SupremeCourt' he highestCourtof Appeal'ie n the ollowing

cases:Section109of theCodeol CivilProcedrrre'90 8

provrdes:"subiect o th e provisionsn Chapter V ol PartV-ol he

Constitution nd such;l#r*t*$ln";Pg*111!$";;;':";;shall eo he.Supl.I:"""t r ,; ;si boJrt ertities:Proceedingta High(i ) that hecasenvolves substantialuestionf awof general

mportance;and

(ii) that n heopiniont heHighCourthesaid uestioneedsobedecidedy

' ' thesuPreme ourt"


30/42

PP-DAP-June 011 30Order45 o{ heCodeof CivilProcedure,908providesulesol proceduren appealslo the SupremeCourt.Articles132 o 135 ot the Constitution ea lwith ordinary pPeals o the SupremeCourt:(i) Appeals n Constitutional ases:

Clause 1 of th eArticle 32of th eConstitution rovidesha tan appeal hall ieto the SupremeCourt roman y udgement, ecree r finalorderot a HighCourtin the territory l India,whether n a civil,criminal r otherproceedings,f theHigh ourtcertifesunderArticle 34Athathecase nvolves substantialquestionof law as to interpretationt the ConstitutionADDealsn civ cases:Article133 dealswith appPalso the SupremeCourt rom decisions t HighCourt n civilproceedings. or an appeal o the SupremeCourt he conditionslaiddown n thisa'1iclemustbe fulf l led.Theseconditions re:(a) lhe decision ppealed gainstmustbea "judgement,ecree r inal rded' fa HighCourt n the errito{y l India,(b) such udgement, ecree r finalordershouldbegiven n a civilproceeding,and(c) a certificate t the High Court o the effect ha t (i) the case involvesasubstantialuestion f law,and (ii) n he opinion t the HighCourt he saidquestion eeds o bedecided y he SupremeCourt.Appeals n criminalcases:A limifed riminal ppellateurisdictions conferred pon he SupremeCourtbyArticle 34. t s imitedn hesense hat he SupremeCourtha sbeenconsti luteda Courtof criminalappeal n exceptional aseswhere he demandol justicerequiresnterlerencey he highestCourtof the and.Thereare wo modesbywhicha criminal ppealroman y ludgement,finalorderor sentence"n a criminal roceeding f a HighCourtca nbe brought elore heSupreme ourt:(1 ) Without certif icatef the HighCourt.(2 ) Witha certifcateol the HighCourt(3) Appealby Special eave.Inappeats, sa general ule, hepartieso an appeal renotentitledoproduceadditional vidence, hetheroralor documenlaly, ut he Appellate ourthasdiscretiono allowadditional videncen he ollowing ircumstances:(i) When he owerCourthas refused o admitevidencewhichought o havebeenadmitted:

(it)

(ii0


31/42

31 PP-DAP- June2011(ii)whenhe artv::?$i:1il?3:""#i:i:ii:ffilT *tabrisheshatecouldnot Producer(iii) TheAppellate ourt.requiresnydocumento be produced r anywitnessobe examinedo enaDlet o pronounceudgement; nd(iv) Fo ran yothersubstantialause'

However'nal lsuchcases heAppellate ourt hallrecordts easonsoradmissionofadditionalvidence.Theappellateudgemenlmust ncludehe ollowing ssentialactors:(a) the Pointsordetermination;(b) th edecisionhereon;(c) fhe reasonsor hedecision; nd(d ) where he decreeappealedro m s reversed r varied' he reliel o which heaDDellants entitledo'

Answer3(bxi)True

Draflingrocesss irsl onceptualnvolvinghinkingnd hen omposingnvolvlngwritingdictatingownAnswer3(bXii)False

Registrationf PartnershlpeansRegistrationhould e underhe PartnersnlpAct,1932.Answer (bXiii)False

Petitionsnormallyeslrrctedo seekinggmeOf lO3l,lll Applicationanbe orroutineequestsif " uoto"nrniit-fn"'e riatters repulely iscretionarynddo not

carry egal r uridicalightsAnswer3(bXiv)True

A right i appeals nota natural r nherentight.butsa cteature l a statute t isthe statute lone o which til"t rnuo look o-determine hether rightol appealexistsnaparticula'n'runt" o'-nii pl't]"t ""nnottt""te-a^right fappeal yagreementormutualonsent he ighri ;;;;i lt no t" tutt"' of orocedure'ut s asubstantiveughi;oun""!:tlyt""J*;i*::::,f f',n":iJ'J[lli"':;#'i,T]fJbv necessaryntendmenlnstatute ives right l appealo him'


32/42

PP-DAP-June01Answer (b)(v)True

lCSl 'sProfess ionalress odeof orCS aimsat brand ui ld ing, rofess ional ism,effectiveurn-outn Courts, nduniformity,houghpersuasivesdesirablen practice.Queslion4

Write notes on any four ol the following :(i) Underwritingcontracts(ii) Conpoundingof offencesunder he Companies Act, 1956(iii) Rejoinder(iv) An of pleadings(v) Ruleof adverse nference. (4 marks each)

Answer4(i)Underwriting ontracts

Underwritingsan nsuranceagainsf isk.Whenshares r debentures l a companyare ssued,he yare,byand arge, nderwrittenoensure hatallthe hares r debenturesissuedare akenup and hus he required apital s raised.Before nteringntoan underwritingrrangement it ha member f any ecognised

stockexchanqe,t s hedutyof th edireclors f theconcerned ompany o ensure hatth e underwriter as suflicient inancial esources o meet any obiigationwhich ma ydevolve ponhi rn n heevent f he ssue otbeing ul ly ubscr ibedy publ ic .Sect ion76 of the CompaniesAct . 1956 permi tsa company o pay certa incommissionsndprohib i tshepayment f a l lother ommissions,iscounts tc .

Answer4(i i)Compoundingof offencesunder he CompaniesAct, 1956

Section 21Aof heCompaniesct,1956hasgiven ower o heCentralGovernmentto compound ffencesha tdo not nvite mprjsonmentspenalty. he compounding il lbe doneonlyafterpayment rcredit, y he olfending ompany r he officer oncerned,as the casemay bc, to theCentralGovernment l such sumas may be prescribed ythe CentralGovernment. he sum shallnot exceed he maximumamountof the finethatmaybe mposed or heoffence. lso,any additionalee paidunderSection 11(2)shal l ave o be aken ntoaccountn speci fy inghesum.

Section 11 dealswith eespayableo the Registrar f Companies Schedule ofthe CompaniesAct) and additionalee payment n certaincasesenable he filingofdocument fter he expiryof the normalperiodof iling.Theadditionalee s subject oa ceiling f en imes henormalfee. owever,he acil i ty l compoundings notavajlableto a companyor a concerned fficer, l such companyor the otficerwa s allowed hi slac i l i ty i thrnhree ears recedinghepreseni l lence.The applicationor compoundings o be made o theRegistrar f Companies ho,

32


33/42

33 PP-DAP- une 011in urn,will orwardhesame o theCentral overnm:t ^"^S:]l"j ithhiscomments'mn#,li*t,li*s"ffin::*imilaqg;*'"*llr:i;;;;,1"iffi#;;;;",;q'lgi*,iilff:]lL,:LL"J;g1$fliffilll,i''J'1.?"1'llm:il:""X'*::H:1[l[:iti*$:m":":n'"U;;:,$fiii:::nT"J!iffti#:lex"'iiili.tlflfr::'r;'$*ir:+trnr;:Hi::J lfl"Xff[[",1l"1,'T:"'p"'v "{irer esister^the

#flTil:J;"'#:fflil;l;itiffHnr;l;ll;"""1ru:yr;:H?;[*i."*:lgf*i:"i*t'-**#*l"i.""lT#trtri'H"i:b"""J:i'imprisonmenl r mPrisonmenlAnswer4(iii)Awrittentatemen'':o',"l13fi!"llllilff::L?.::il,:',$:,H::i:.tl5,T:l{"i'is$trifiTp1ry311fl";it*ilii,ilffii**U**;,+#iiJ:'?iJxf,ilffixl:::ilil"ilill,i11'":[".;"":;;ffft"J"":Jil-,fiHJ:"ffili[,"#'|^l!ii,lil:]jftTl",l';tifi"J".,*il*m,t*:1S,;;:ii"H,:::::Il"]:ii"L:,""*t"*tru[*i*xii"lli"#;'.;;;";i,,r'ff.ffiI]il:llllli'ji",liXl;';''.isreadinss

Answer4(iv),-ln*lmll:[:ls;""'-un$""".:l#Hiiiln[:#'maybebornenmindwhl le__ euote rerevant rovlsionsn hepetition ndexcerpts f observations

na.e Dythe Courts elevanto th e Polnl'-- o.:i:ilx',T,,:iljjil::J1J;".#idmannerhichhoushppearobe

- Do no tsuppressactsi- Highlightmateriatacts' egalprovisions nd Courtdecisions'f

any;-- Statempodant *'""n" "tnt"t together it h e{erence

o relevant rovisions/judgements'

lf Vo uare oPPonent. - Fileyorlr eply o tlrepetit ion t the earliest pportunity;


34/42

PP-DAP-June011 34* Take llpossiblereliminaryontentionsogether ith eferenceo relevantawpoint nd udgements;- Submitour eply o each aragraphf hepetition.lf youare or hepetitioner- File our ejoinderpon eceivinghe eply t heearliestpportunity;* Meet learly ith hospecifcpointsaised y heopponentn he eply t f davit.

OralPleadingsE {ective ralpleadingsre elevantothat thestage f preparationf thecasebefore ctual resentationndalso t hestage factual resentingcasebefore LB/NCLT rother ribunals.ollowingspectsould e elevant tboth hese tages:* Preparationefore resentationt hecase-;- Carefullyead ourpetition,rovisionsf awand udgements;* Jot down elevantoints na separaleheet t paperogether ith elevantpages l thecompilation;- Keepcopiesol judgementso be relied eady or the Courtand or youropponenl(s).

Answer4(v)Ruleof Adversenference

It s ncumbentpon partynpossessionfbestevidencen he ssuenvolved,tc produce uchevidence nd f suchparty ails o producehe same,an adverseinferences iableo bedrawn gainstuchparty. heCourtwillbe ustifiedndrawinganadversenferencegainstha tpartyIt sequallyncumbentpon partyoproducevidencefsome xpert here herssue nvolveds a complex r difficult ne as for instance,ssuespertainingoengineering,edical,echnologyrscience lc .Sincehecourt annot onslitutetselfintoan expert odyand contradicthe claim/propositionn recordunlesshere ssomethingontrary n he ecord ywayof expert pinion r here s anysignificantly

acclaimedublicationr reatise nwhich elianceould ebased.Question

(a) Drafta specimen eedofguaranteeobeprovided y a bankonbehalfof itsclientcompanyor he execution f a contractn favourof Stategovernmenl'(10marks)(b) tn the ightof case aw on the subiect,distinguishn what espects houldaleasedeedbe differentrom eaveand icense greement. (6marks)

Answer (a)Specimeneed fGuaranteeya Bank nbehalf fa Companyor hePerformance

Jf a Contractn avour fSlateGovernment


35/42

35 PP_DAP- UNE 011T H I SD E E DO FG U A R A N T E Ea d e h i s . . . . . . . . . . d a y o t . . . ' - " " " T w oT h o u s a n d . . . . . . . . . . . . . . . . . . .e t w e e nh e B a n k ). . . . . . . . . . ( h e r e i n a t t e ra l l e d"theBank")of the one partand he Stateof. . ... .. . represented y th eGovernor,Shr i . . . . . . . . . . . . . . . . (hereinaf tercal led" theState")f lheotherpan.W H E R E A S b y A c c e p t a n c e o f T e n d e r N o . . . . . d a t e dmadebetween..... . Ltd a companyncorporatednderheCompaniesAct ,1956 av ingtsRegistered f f ceat . . . . . . . . . . . andwhereasi l isagreedby he C;mpant with he State or he supply f plant,machinery ndequipmentin accordancewith he terms,specilications nd conditions hereincontainedwhichinteral ia o. . . . . . . .. . . . . " /ot the otalvalueof the contract r ice, uchpayment o be

secured y a Bankguarantee;- AND WHEHEAS he bankhas' at the requestof th e Company,agreed o standsurety or and guaranlee elundof the saidadvance n case he plant,machinery ndequipment f the valueof Rs. . . . . . . . . . . . aforesaids not del iveredo heState inaccordancewi ththetermsandcondi t ionSotthesaidagreement,andtheStateagreed o make he saidadvance n suchbankguarantee s aloresaid:NOWTHISDEEDWITNESSES S FOLLOWS:

1. ln considerationf the Stateof. ... havingagreed o advancea s u mo f R s . . . . . . . . . . . . . . . . . . . . .. . t o h eC o m p a n y ,h r o u g hh e B a n k , o r h eDuroose ereinafterndicated,hebank,doeshereby uaranteeha t n case hebompanyshallfailand/or eglecto supply he State, heplant,machinery ndeouiDmentofhevalueof s. . . . . . . inaccordancei th heterms'specitications nd conditions ontained n the Acceptance l Tenderdatedt h e . . . . . . . . . . . . . . . . . . . . . . . . . . . .. s u b j e c t t o a n y a m e n d m e n t s o r m o d i l i c a t i o n s t h e r e o f 'i f any,when made, he bankshall epay o th e Statesuchamountor amountsas the bank may be cal ledupon o pay subject o the maximum imi totF s . . . . . . . .. . . . . . . . . . . . . . . . . . . . .

2. Thisguarantee f the Bankshallbe eflectivemmediately po n receipt f thesu mo 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . ' . .r o m h eS t a t eo ra n do nb e h a l f f h eC o m p a n yandshal lcont inueinforceunt i l thesupplyofp lant ,machineryandequipmentofthevalue f Rs. . . . . . . . . . . . . . . . . aforesaids u l ly t tected'3. The guarantee ereinbeloreontained hallnot be affected y any change nthe c;nstitution f the bankor of the Companynor n the evenlof any windingup beingmadeagainsthe ComPanY.INW|TNEssWHEREoFthepart iesheretohavesetandsubscr ibedthei r respect ivehandsand sears he day.monthand year irstabove-written

1 .2 .

Fo rand on behalfof the Stateof


36/42

PP-DAP-June 011Answer5(b)

The cardinal istinction etween leaseand a l icence s that n a lease here s atransfer f Interestn he premises, hereas n he caseof a l icence here s no ransferof nterest, l thoughhe icensee cquires right o occupy hepremises.Whenpremisesar e givenout on leaseor tenancybasis he egalpossession l the premisesn thesecases s alsodeemed o be translerredo the esseeand enant espectively.Whether n agreemento occupy he premises etween he andlord nd enant sallowed o occupywas an agreemento easeor an agreement t eavean d icense asbeena subject f manySupremeCourt& HighCourt ulings.In a numberof judgements ariousHighCourtsas well as the Apex Courthavedistinguishedhe easeand he icense.lnKhalitAhmed ashirAhmed v.TufelhusseinSamasbhai arangpurwala,l9SSCC 155, he SupremeCourthas held:"l norder o determine hether document reates license r a lease he real estis to ascertainhe ntention f theparties .e .whether hey ntended o createa licenseor a lease. f the document reates n nterestn he property ntitlinghe transfereeoenjoymenl, hen t s a lease;but l it onlypermits nother o make use of the propertywi thout xc lus ive ossession.hen t s a l icense."From he udgments f variousCourts, t appears hat the main ac tors o decidewhether heagreements a leaseor a license re (l) he ntention l the parties nd (ii)whether he agreement reates n nterestn he property.A licensees a licenseewhetherhe icense s or occupation f th e premises r forcasualvisitsor for any otherpurpose. he statusof a licensee an notchangeor varyaccordingo thepurpose f he icense. heprjncipleonce licensee lways licensee"wouldapply o all kindsof l icenses.l l the premises re givenunder he Leaveand LicenseAgreement,he samecan be terminated s per he ermsof the agreement r otherwise nd he icensorcan demandpossession, ack rom the l icensee. he terminat ions easy n theLeaveand LicenseAgreement nd herefore eaveand LicenseAgreements repreferred y he part ies.In decidingwhether o give out premiseson leave& licencebasis some of the

tactors o be considered reas ollows:- Possession- IncomeTax-- L4unicipalax

Ouestion6(a) A suit for specificperformancewas instituted n the civil courl at Dethi againstPositiveEnergy Ltd. The managingdirectorasked the CompanySecretary of le writtenstatementunder his own signatureas it he had impliedauthority odo so. This was done,but theplaintiftsought dismissalof the writtenstatement

lot wantof proper egalauthority orverityingwritten tatement. n thc meantime,

36


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97 PP-DAP- June20 11he company granted x post laclo sanctionand rali'fication t the authorilyofthe companv secretarylJi'iii"ii"Zaiigt on behatt t thecompanvYet' heciurt disi'missedhewritten tatementonwhatlegalgrounds,snouldtheaggrievedcompanypreteranaweatimpugningcivilcourl'sorder? Citecase aw'f any 6 marks)*,"h?#f:X::?;:::i;fy::":i:tr::1::.!T{1!;iXX^2'::::i;:,i:,Commen ,hgh gh"ng "i'" "i' Ju,l'i t nctiobew een c ompanySec et ryandAdvocates profe'ssiona/s (8 marKs)

Answer (a )ln Nrfro rd. . Nationat surance o Ltd:A11.].e^e]^?-ell:?2"^oashuvir aperMirts td.v.rndia securities td.;000corporate awcases 43-6-twasherdhal f heDlaint reply Written tatementili"i'ii 'iJ ot a dulyautnorised

erson'hepetitionwould e rableobedismrsseo

Buti^ |nited ank f tndia Naresh umar lR 1997SC-?:t *"t heldthatthencaseorsigningtiring ritten tate#nior pteaoingsya person otdulyauthorised'in"""r*"i ueiercisJd outo e atilredubsequentlyIn henstantase x ost.factoati{icationas een,acc?lgt"lliiB3:?ll1,3l:on hebasls tUni ted anK l Indraase ppealhoulde l le(groundshould lso ePleadedAnswer (b )

lnSectron(1 (a )of heAdvocatesct 1961 he e-rmAdvocate'asbeen efinedto meananyadvocate*"'"0'in il'" 'ofiunOerne?l""lt]:i': of the Advocatescl 'Section9of heAdvocates"' ti"i"t 'i"*'oject to heprovlsionsf heActandanyrulesmadehereunder'here"ilo" "t'V oneclass l person-sntitledopracticehe

profession{ aw,namelv'*";";; ;;ti"" jz "1t1"^l-1"1catesctprovidesha ti",*,ir,,l""or^g""'ll'ry.:::iklr:fff*rro:,";li'ii'liillffiTl{ilfi3$l3il'i""'i'."J;?il31il"""H;;^;ltuL'nut"*"ept13'::'Jfii13:HiJ.t:n. i ", i ".v ",n"r,law or he ;me elng

n orcenopersonnalldav.be entitledo practlce"' "iv tfJ'i "i o"loreanyauthorityrperson nless

e senrolledsanadvocate'

Thecombinedeading t Section 9' 3'zand. ?:f-lei:vocates Ac tshowshatwhire dvocatesre heonry ii"g;ir"j.1".. or persons-ntjtredo practiceaw,hecourts ave een ont"rr"OoiliJio-p"rm appearanc"tanyperson' otenrolleds

advocateberorei torniminanvJartrc"u 'rar lase'simitarry,sect ion-33ortheAdvocalesActprovicjeshalan, o""on ui#ul'*u"nln juo"ut" t "ntrtledlopracticenany ourtr

before nyauthorityrp"'*n t'Ui"tt toprovlsrgnsontlf:9 in anyotheraw orhe

tirne eingn orce ne'"ro" *iirlir."tuJ" or u* "y be he^soleomain fadvocatesonl\ ',' l heappea'unt" "'o'i'un"yiJu't t autf'otnyrpersonspermittedopersons

othel , il nadvocates'


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PP-DAP-June 011 38Quest ion

(a) Complying with theprovisionsof sedion 76 of the CompaniesAc' 1956,draftan underwritingagreement n a letter form betweenprosperityLtd. proposingpublic issue of one lakh equity shares of < 100 face value each, on the oneside,andDesireCompany hoare egisteredrokers.(b) Distinguishbetween he following(i)'Endorsements'nd'supplementaldeed'.(ii) 'Revision'and'review' pplicationsna HighCourt.

Answer (a )Specimen nderwriting greement

(8 marks)

(4 markseach)

Nameand address of the lirm of brokerswho agree to act as underwriters.(Lenerorm)

TheBoard f Directors(Name ndaddress f hecompanyforwhose ublicssuehe rmagreesoac tas underwriter)Dear i (s), Re Proposed ublic ssueof EquityShares

We,hereby ecordhe erms nwhichwe (hereinaftereferreds "underwriters,,)have greedounderwrite... . . .. ... Equity hares f heaggregateominalalue fRs . . . . . . . . . . . . . . . . . . ou to f the to ta lssuef . . . . . . . . . . . . . . . . . .qu i t yha resobeo f l e redo hepubl ic tRs...- . . /-ach orcash tpar.1 Theprospectuss approved y heunderwritersillbedeliveredo heRegistrarof Companies. on or bef re.. . for registrat ionnaccordance ith he provisionsf Section 0 of the Companiesct , 1956.Suflicientumber f copies f theprospectusndapplicationormsshallbeprinted ndmadeavailableo theunderwriters,rokers ndmembers f thepublic ho ntendoapplyor heEquity hares ssoon spossiblehereafter.2. Underwritershall eentitledoarrangeub-underwritingith especto heirrespectiveommitmentsor heir wnaccount n erms o bearranqedt heirdiscretionith heir ub-underwriters.3. lf by heclosing ateol thesubscriptionis tor suchearlier ateas maybeagreedo by heundeMriters,he Equity hares fleredo hepublic renotsubscribedn ullby he public nd heapplicationoney ayabten respecttheretosnot eceivedyyou, ouwillwithin 4daysor such xtendedimeasmaybeagreedoby heundeMriters,ottfyheunderwritersnwriting s o heamounvnumberf EquityShareswhichhavenotbeenso subscribed.heunderwritershallwithin 1daysalter he eceipt f such ntimationpplyorandsubscribeuchunsubscribedmounVnumberl Equity hares ndpayorprocureobepaid hemoney ayablenapplicat;onnrespect f suchEquity


39/42

39 PP-DAP- June2011

Sharesnproportionhatheamountunderwrittenyeachof hembears o ne

totalamountol the issue'o ino"i",*rnins,1",,i',:i11li"Tiffir'"H:i,:?i""'*f,:i::l up vheunderwritershe ollowinga(fu:i[:L:*::'l ll*:n*xtT;:; o '"'"kepEquitvhares'r",:n*j:"::;e*:*;m:[i#i,",r-:ff?;ill"['JJLi;tsrixjl1rn-il$?,ruxllffiHf :l'"#ll"'3ffi[:J'::fJ;l.,:;5J"il!,1##ffr*:["il'^'"""Tii+di{il:"#:':::iJ5notulfilledheir "t"' ii 'oi"o"ii" i-o1hemountnderwrittenveach

lthem..,hm:;;:""il".?#",',,:Tifti[:{tniftllil#"x'{i:iil[t:l#[*ru:::[fti'ru;*'T:l'"J'':l;l:"if#T]tiimiiairvnareoroportionatelyy heothers'5.subjecton"",'"-"t.tn"i::':::::l:+*Hl"i^:X"$ili'fi,jil3i:::8Ji[::",::[?Jr","'3i-11""fi';l;"harrorment'l;*d:"Jiffl"l;mrr:ff,""".:ili:l".p*H"'ff1iJ:T:i','i-'/ffiilft*,*rr"l"li"*im1;lamount/numberorTNorwthstandryq",ll,l',ili',iji::;?i!!."{.i:Hi:{i'HJil'?,"":iff;x'J.':;liiid;:l#"ut"si:,s,i'li:::,l;;.,;,;arke,:i[l':l",iJfi:i::ili,::',""":lil,:*"lil{*;:,TflJ-:,iff.!ir.l,#{i:?Til*tflirh?{tfii:","l",."'}il',r::if;gxl::#11""1""'i1undergoubstantialnange.rr'r^uare'-'i"i1*.r"nf ol underwritersxercising:[f i:ffiT;x'J"'#l' ff : :: "':

$ "f,""ii'$'il";sn o orhunderwritinggreement'

S.ouroffer lsva| idsubjecr loyoursubscr ipt ion| istopeningonorbefore..Please cknowledge""eiptot f i' teller nd ntimateousyouracceptance

t heterms nO onOitionsentionedbove'Thankrngou 'Yours aithfullY'


40/42

PP D A p - J u n e0 1 1 A^Answer7(b)(i)Endorsements nd SupplementalDeed

Endorsement eans o writeon th backor on th e aceof a documentwhereint secessary n retation o the^:^oltgnts. f tn"t jo"rrlni"or instrument.Th e termendorsement"is usedwith reference.to "gotiubf"-io"ur""nts trkecheques,bill ofxchange tc .Forexampte, n,thebackof rh J"h"q;"i;;;;"e.s nameas payeeto.rarncash sanendorsementn rnecheque.n;];;;;; l#""",s signatures n rheiffiY?,,tffiT;::i:n;""'nH:'":oryores"noo,""."nililninhemeaninsrhesrveesarisnirican."o"

o",illli-?':]l:1":'1: Act' ssl Endorsement. ;; i ;;rumi*n"mif,""t*i::[*y#*;"1,."1"J:ffiffiH:fili:""?j;Ton hedocument. ou.kno*tfyt or omake fferoanothery nscribingn",,nur"r:1,"*$:i[:":,,:,.ffi,1,:1*:""J:i':1,#T;ffiJiiff",,1:ru*::;"x*i,"n"p,oui"t,i;;.H;;'":3il:IflJffiJ::ilJ:1i",:i::n:"r"J"i.,g""'::lii:l"Jiifliio,i'"l"o,l'"'"nt whichsenterednto etweenhe artjesn heractsoreoctrm;;i;#;";$"11,::::fr:HJJ',J#,:l:U:::"J;*o"1]#Jl.fa_nnotedonebywayof endorsement..Thus,""ppr".""i"i o""o rsexecutedo gjve:Iff t[.,l[."ryJ:$;":1.'l;*d. wh n o,i,iJ","o".,,ents eq eoo'oarre*eiv,,,n"t.Jo,.l?,";;fi:"f;i,::!H:iif:ff,fl1";ffi:i,I":i:ll:rbyexe.ulrngseparateeed escrio"o. .rppl".""i", o""o,lF"r' "mple, if esseeJiJ".JlLlli.,r'nn,n he easeoanorhererson-"r"nli"..r_,"ybedone yway f

ln conveyancingru",i"", "ll:::."T_:nts whichar eotgenerat seand orwhichnoupplementarydeed is necessa,ry re those wfr icn efaie- to par t payment orcknowledgementof a debtby a oeoror.Answer7(b)(i i)Revision

Soclton 15 of theCodeof Civ,t rocedure.19Og eatswith everstonaryJurisdictjonl theHigtrCourts . heSect ionaysdown:'" ' ll;i';ti:ffi[?J#'lJ""n" recordr nvasehichas eenecidedvand fsuch ub-ora,""" :fiH;nlcourt and nwhich oappealies hereto,(a ) tohaveexercised urjsdictionno tvestedn t by aw;or(b ) to have ailedo exercise urisdictionso vested: r(c) to have acted n th etrregularity, exercise f its urisdictionillega or withmaterialth e HighCourtmay makesuchorder n the caseas it thinks it :


41/42

^1 PP-DAP- une201

:H$I1:1'J5T'}&?'J":[1U:l',J.'""J'H;:":ii;#11]jil"'li?,'?3'Proceeding xcePtwhere:,',lii,;.i"i;l,,XiiffiSli:lJXl?i,JJ'lf,:Jy#illni"o''"u''''' ii,:;;x;:l;i"J*;:ull:g:,ffi:ilff"';H::djus'ie r ause-,:u,lillnn*:lg[{i;!:m:ruu'Jilii:?i8,fl?i:ffithereto.

",*1*r,*,,ttt5xlxx?:1ff::lf:[::""'$]il]H!T:]":'"''"flJr;f"l':::tilii:'.:;"J::ru;:ru'3#:fiiil':'1"'::[xx""'1T::""XLVl l ,Rule1, namely:,',fl"'il:Hl'i,",i,1i5ilil";,.Hnid:,f:J#lfffHffiJ1}1',*ProducedYhimat he(2) onaccount fsomemistake rerror pparentn he aceof he

ecord; r

(3) foranyolher utiiclenleason;nd heCourtmaymakeuchorderhereon s

it thinks it 'Question

Examineandcommentonanytourofthefol towingstatements:(i) Whereheamendment hangeshecharacterl thesuit't cannot

eallowed'(i) Pteadingsannot e construedoo echnically'( i i i) Reiectionfptaintwillamountodecree'(iv) lnstitution f a suit naU) Where hedefendantleads et-otf'

courl fhighergrade shA will be in the positionof

plaintiffnv t t , t uv " ' . - r (4 m a rks each )

ontyan rregularitv

Answer (i)Underorderu"y,"ll"ll"i?tn";::il?:'l^iliil?"'"',"ffIi"'|li:",.i:'.i!:#l :*4iii::*,tfllfl1in#[illl+tffir*l*s".:i."jfT:$fffT[i:*"Jffli:i3l?xi[1;f:'Ti!:l::'f;;.;u,dno,have',:"*:;:ll,'ffi:lil?i,lilSlll;;icementrriar


42/42

PP-DAP-"rune 011 42ln hematterof amendment f a plajnt,he Courtsmustalways ak e enient iew ofi"":lll:Xl'Jli[:::li]::::tI1y1:!,t h""";i;;;, ii*iiinuu",o""onsideredn:l1re,:hl ;,il;:";i;l",fjiriiili,iff l::5,ffl l::?*"JJil:,,j:nd haracrerf he ame.CRp SH)No. por buii"itiin C*nlAnswer8(ii)ln thecaseof a civit itioalionln-"_9:y1. n India avebeenarwaysiberatn heaterof nterpretinghepr;adings nd echnicajitiesie nJipermitteoo restricthe;33!i?i'[Jr"i:,llno"orit""'i v' nagnuiiiii'iii,'i)i ,n","on4 anuary,

Answer8( i i i )^ , 'Rgect ion 'of p la intwl l lamounto a ,decree,wi thtnthem,civilP.chedispo""roru.r,to."n"ppearamountsto;;";;T:[Y."i"T.:tJ:[fl:lwhichonclusivetyetermines,theign,. f n" p"rtll ,iii?g"ro roa'or anyof hefj":i;il :"#1i;'ir'ir'li#5, '" pp;utfr" ;i"' ii)"noru,Mts eoion4Answer8(iv)

SectionsS to 20 of theC. p. C. regulatehe orum or the nstitutjonf suits,ection 5 equiresha tevery ui tshalt 6 r..titri"i', in " ioJn o'n" towest rade,::Tf:"-"1r" try t.Theobject f hesections iratne"oru o'iru:gn".rade houtd oteover rowded ith uits. his ules a rule fpi"."i"['*l'"", "t jurisdiction.Thenstiturionna courr rhiqhe,."r.",9_"-31yi t ,.^y;;J;;;;;,; ;:;; been nstitutedn hel?.yi .t^il"_*"I SlaOes6nty n irregularityfprocedire overed ySection 9ot herv r 'rocedureode'anddoes, otattecrne uriJictr". "iln" court. t s thereforerearhatwhere suitwhich ughtohave eerii".,nri"i ," " "iurt of a rower radesnstitutedn hecourt fa hiohei.gracie, tne atterannoib"";i-to nuu"no;urisdictiono try the sui*houghas a-marter r procedure, l;;l;;;ght to be returnedoril? l:'iTJ?'i:JH: #! ;',"",;Tg !Zl-;, ;| : ;;, v chnaA hAnswer 8(v). ^..l-t::"tt11. oflginalymerery defenceoanaction, nd thasbeen eld ha t hegn to pleadhisdefence risesbarred ubsequenryy he ",#:i,,tli:,",:';i. isbrousht'o hat tdoes otbecome^^^ tl: rign, asnowbecome re of attack swe as of derence,nd hedefendantccupiesheposiljonfa plaintiffn espect tany0"L"." "]"#o OVhim.lpanuganti;i,ii:!i;ri*^ndAnr. v.sreeraiahve||aniid,n;;i;;"..:';;;oMarch,1e1e1ers)

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