Business Law

Subject Code: IMT-54 Subject Name : BUSINESS

LAW

Notes: a. b. c. d.

Write answers in your own words as far as possible and refrain from copying from the text books/handouts. Answers of Ist Set (Part-A), IInd Set (Part-B), IIIrd Set (Part – C) and Set-IV (Case Study) must be sent together. Mail the answer sheets alongwith the copy of assignments for evaluation & return. Only hand written assignments shall be accepted.

A. First Set of Assignments: B. Second Set of Assignments: C. Third Set of Assignments: D.

Forth Set of Assignments:

5 Questions, each question carries 1 marks. 5 Questions, each question carries 1 marks. 5 Questions, each question carries 1 marks. Confine your answers to 150 to 200 Words. Two Case Studies : 5 Marks. Each case study carries 2.5 marks.

Objective: To gain an insight into the Indian Legal Process and legal provisions specifically with reference to business and corporate functioning. Contents NATURE AND KINDS OF CONTRACTS The Indian Contract Act; 1872; Definition of Contract; Essential Elements of a Valid Contract; Kinds of Contracts OFFER AND ACCEPTANCE The Proposal or Offer; The Acceptance; Contracts Over the Telephone CONSIDERATION Essentials of Valid Consideration; Exceptions to the Rule “No Consideration; No Contract” CAPACITY OF PARTIES Minor; Persons of Unsound Mind; Disqualified Persons FREE CONSENT Coercion; Undue Influence; Misrepresentation; Fraud; Mistake LEGALITY OF OBJECT AND CONSIDERATION What Considerations and Objects Are Unlawful? VOID AGREEMENTS Introduction; Expressly Declared Void Agreements PERFORMANCE OF CONTRACTS Who Can Demand Performance? By Whom Must Contracts Be Performed? QUASI-CONTRACTS Quasi-Contractual Obligations REMEDIES FOR BREACH OF CONTRACT Rescission of The Contract; Suit for Damages; Liquidated Damages and Penalty; Summary of the Rules Regarding the Measure of Damages; Suit for Specific; Performance; Suit for an Injunction INDEMNITY AND GUARANTEE Contracts of Indemnity; Contracts of Guarantee BAILMENT AND PLEDGE; Bailment; Finder of Lost Goods; Pledge or Pawn; AGENCY; Definitions of Agent and Principal; General Rules of Agency; Kinds of Agents; Creation of an Agency; Extent of Agent’s Authority; Delegation of Authority; Business Law ........................................................... Page 1 of 5 ............................................................................... IMT-54

Principal’s Liability for the Acts of the Agent; Termination of Agency; Irrevocable Agency CONTRACT OF SALE OF GOODS Definition and Essentials of a Contract of Sale; Kinds of Goods; The Price; Earnest or Deposit; Document of Title to Goods CONDITIONS AND WARRANTIES Condition Defined; Warranty Defined; Implied Conditions; Implied Warranties; Doctrine of Caveat Emptor; Test Questions; Practical Problems TRANSFER OF PROPERTY Essentials of Transfer of Property; Rules Regarding Transfer of Property PERFORMANCE OF CONTRACT OF SALE Delivery; Rules as to Delivery of Goods; Acceptance of Delivery by Buyer REMEDIAL MEASURES Rights of Unpaid Seller; Buyer’s Rights Against Seller; Auction Sale NEGOTIABLE INSTRUMENTS Promissory Note; Bill of Exchange; Cheques; Hundis PARTIES TO NEGOTIABLE INSTRUMENTS Holder; Capacity of Parties PRESENTMENT OF NEGOTIABLE INSTRUMENTS Presentment for Acceptance; Presentment for Sight; Presentment for Payment NEGOTIATION OF NEGOTIABLE INSTRUMENTS Negotiable Instruments; Negotiation by Unauthorised Parties DISHONOUR AND DISCHARGE OF NEGOTIABLE INSTRUMENTS Dishonour of Negotiable Instruments; Discharge of the Instrument and the Parties BANKER AND CUSTOMER Crossing of Cheques; Types of Crossing; Liability of Banker; Rights of Holder against Banker; Bouncing of Cheques CONSUMER PROTECTION ACT-1986 Definition of Consumer; Who can File a Complaint; Grounds on which a Complaint can be Made; Unfair Trade Practice; Restrictive Trade Practice; Consumer Protection Councils; Consumer Disputes Redressal Agencies; District Forum; State Commission; National Commission; Powers of the Consumer Forums THE COPYRIGHT ACT- 1957 Copyright; Ownership of Copyright; Assignment of Copyright; Term of Copyright; Licences; Copyright Societies; International Copyright; Registration of Copyrights; Infringement of Copyright; Certain Acts not to be Infringement of Copyright; Civil Remedies; Offences; Appeals THE PATENTS ACT:1970 Definition of Patent; Application for Patents; Opposition Proceedings to Grant of Patents; Grant of Patents and Rights Conferred; Patents of Addition; Amendment of Application and Specification; Restoration of Lapsed Patents; Surrender and Revocation of Patents; Register of Patents THE FOREIGN EXCHANGE MANAGEMENT ACT- 1999 Regulation and Management of Foreign Exchange; Authorised Person; Contravention and Penalties; Adjudication and Appeal; Directorate of Enforcement; Miscellaneous THE COMPETITION ACT-2002 Prohibition of Certain Agreements; Abuse of Dominant Position and Regulation of Combinations; Competition Commission of India; Duties; Powers and Functions of Commission; Appeal; Competition Advocacy INFORMATION TECHNOLOGY ACT-2000 Rationale behind the IT Act; 2000; Information Technology Act; 2000; Scheme of the IT Act; 2000; Digital Signature; Electronic Governance; Attribution; Acknowledgement and Despatch of Electronic Records; Secure Electronic Records and Secure Digital Signatures; Regulation of Certifying Authorities; Powers of Controller; Duties of Certifying Authority; Digital Signature Certificates; Duties of Subscribers; Penalties and Adjudication; The Cyber Regulations Appellate Tribunal; Offences THE COMPANY Companies Act and its Administration; Definition of Company and its Characteristics; Characteristics of Company; Illegal Associations; Incorporation of Company KINDS OF COMPANIES Kinds of Companies according to the Mode of Incorporation; Kinds of Registered Companies on The Basis of Number of Members; Kinds of Registered Companies on The Basis of Liability of Members; Other Kinds of Companies; Exemptions and Privileges of Private Companies; Distinction Between a Private and Public Business Law ........................................................... Page 2 of 5 ............................................................................... IMT-54

Company; Conversion of Companies MEMORANDUM OF ASSOCIATION Definition and Importance; Contents of Memoradum; Alteration of Memorandum; The Doctrine of Ultra Vires ARTICLES OF ASSOCIATION The Obligation to Register Articles; Contents of Articles; Alteration of Articles; Limitations Regarding Alteration of Articles ; Binding Force of Memorandum and Articles; The Doctrine of Indoor Management; Exceptions to The Doctrine of Indoor Management PROSPECTUS Introduction; Unit Objectives; Definition of Prospectus; Issue of Prospectus; Contents of a Prospectus; Misleading Prospectus and its Consequence; Remedies Against the Company; Remedies Against the Directors; Promoters and Experts; Shelf Prospectus; Information Memorandum SHAREHOLDERS OR MEMBERS Distinction between Shareholder and Member; Methods of Becoming a Member ; Who May Become a Member?; Termination of Membership; Rights of Members SHARES AND SHARE CAPITAL Legal Nature of a Share; Share Capital; Kinds of Shares; Variation of Rights of the Shareholders; Payment of Underwriting Commission and Brokerage; Further Issue of Share Capital; Issue of Bonus Shares BORROWING POWERS AND METHODS Borrowing Powers; Ultra Vires Borrowings; Security for Borrowings; Borrowing Methods; Debentures; Classes of Debentures; Protection of Interests of Debenture holders; Remedies of Debenture holders COMPANY MANAGEMENT AND ADMINISTRATION Directors; Director Identification Number (DIN) ; Appointment of Directors; Removal of Directors; Maximum and Minimum Managerial Remuneration; Powers of Directors ; Meetings of Board ; Duties of Directors; Liability of Directors; Managing Director; Manager; Company Secretary MEETINGS AND RESOLUTIONS Meetings; Statutory Meeting; Annual General Meeting; Extraordinary General Meeting; Requisites of a Valid Meeting; Voting; Resolutions; Minutes of Meetings ACCOUNTS AND AUDIT Accounts; Annual Return; Audit; Removal of Auditors; Duties of Auditors; Audit Committee PREVENTION OF OPPRESSION AND MISMANAGEMENT The Rule of Supremacy of the Majority; Protection of Minority ; Prevention of Oppression and Mismanagement COMPROMISE,ARRANGEMENT, RECONSTRUCTION ‘Compromise’ or ‘Arrangement’; ‘Reconstruction’ and ‘Amalgamation’ WINDING UP Meaning of Winding Up; Winding Up vs. Dissolution; Modes of Winding Up; Winding up by the Court (Sec. 433); Jurisdiction to Wind Up; Commencement of the Winding Up; Consequences of the Winding Up Order; Official Liquidator; Powers of the Court after Winding Up Order; Voluntary Winding Up; Voluntary Winding up Under Supervision of the Court; Provisions Applicable to every Mode of Winding Up; Defunct Companies Reference: 1. Kapoor, N.D., Elements of Merchantile Law- Vol. I & II, (25th Ed.), Sultan Chand. 2. Shukla M.C., N.K. Kapoor & M.C. Kuchhal, Student’s Guide to Corporate Laws, Taxmann. 3. Datey, V.S., Student’s Guide to Corporate Laws, Taxmann. 4. Puliani, Ravi., & Mahesh Puliani, Corporate Laws, Bharat Law House.

Business Law ........................................................... Page 3 of 5 ............................................................................... IMT-54

ASSIGNMENTS FIRST SET OF ASSIGNMENTS Marks

Assignment-I

=

5

PART– A

1. 'No consideration, no contract'. Discuss consideration in light of this phrase. 2. What do you understand by contracts of indemnity and contracts of guarantee? Compare and contrast the two. 3. What are the rights and duties of an agent? 4. Write a note on bailment. What are the duties of a bailee? 5. Distinguish between coercion and undue influence. How are they defined and what are their effects? SECOND SET OF ASSIGNMENTS

Assignment-II = 5 Marks

PART– B 1. You sold a shipment of goods to ABC Company and received a bill of exchange for it. But now you find that the bill has been dishonoured. Can you sue ABC Company? What would your rights be in a court of law in this scenario? 2. What is a promissory note? What essential requirements must it fulfill? 3. What are the grounds on which complaints can be made under Section 2(1) (C) of the Consumer Protection Act, 1986? Explain with examples. 4. Discuss the Copyright Act of 1957. 5. How is a patent defined according to the Indian Patents Act, 1970? What are the inventions that are not patentable?

THIRD SET OF ASSIGNMENTS

Assignment-III = 5 Marks

PART– C

1. How is foreign exchange regulated and managed according to FEMA, 1999? 2. Explain the meaning, relevance and features of the Competition Act, 2002. 3. What are shares and debentures? Discuss the different kinds of shares of a company and specify which of these you would prefer as an individual purchasing the shares of ITC limited. 4. Distinguish between private and public companies. 5. Discuss the circumstances under which a company may be wound up.


FOURTH SET OF ASSIGNMENTS

Assignment-IV = 2.5 Each Case Study

CASE STUDY - I Section 1 A invites his friend B to his house for a dinner. A spends Rs.2000 to arrange the dinner. B does not turn up to take dinner. Can A recover this amount from B due to his failure to attend the dinner? Had the situation been different if A had arranged contributory party to which B had given consent to participate and give his share of contribution for the dinner party?

Section 2 A enters into a contract on 1st September, 2007 to sell to B 1000 tons of mustard oil to be produced during the winter season and to be delivered on 20th February, 2008. Whether it is a valid contract of sale. If yes, tell whether it is a sale or an agreement to sell? Explain with reasoning.

CASE STUDY-II You are the judge. Decide the following with reasons: 1. Sameer admitted his only infant son in a private nursing home. As a result of strong dose of medicine administered by the nursing attendant, the child became mentally retarded. Sameer wants to make a compliant under the Consumer Protection Act seeking relief by way of compensation on the ground that there was deficiency in service by the nursing home. Does his complaint give rise to a consumer dispute? How is the consumer in this 2. The Memorandum and Articles of a company were delivered to the Registrar for registration on 8th March 2006. On 10th March, 2006 the Registrar issued a certificate of incorporation and dates it 8th March 2006. On 8th March 2006 before the certificate was issued, the company allotted shares to Vikas. Is the allotment valid?


Business Law

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