NATIONAL LAW SCHOOL OF INDIA UNIVERSITY, BANGALORE Master of Business Laws (MBL) I year  

June 2012 Annual Examination  ‐ Key Answer : CONTRACT LAW‐22.06.12  

PART A: 

1. E Contract; Indian Contract Act, 1872, IT Act 2000 Sec. 11, 12 1,3 of the IT Act Essentials of E‐contracts a. Click Wrap: 

i. Hotmail Corp. v. Van $ Money ii. Clicking of “I Agree” icon. 

b. Shrink Wrap: i. Condition of warranty: acceptance by conduct. ii. ProCd case iii. Based on Sec. 16 of Sale of Goods Act. 

 2. Government Contract,  

a. Art 299 Contract by tender, essentials Principles of Equity, Fairness and Reasonableness. b. Judicial review, based on Art 14, 19 and 21 :  c. A Contract is not completed, he cannot sue for Breach of Contract, although he can sue 

for negligence. d. Course of Action: 

i. He can sue KPC  to re‐conduct the Tender Process in  a free, fair and reasonable manner: 

ii.  To prove liability: C K Achuten case  1. The Government has breached the promise or assurance and Robinson 

has suffered injury. 2. There is a violation of legal right. 

 3. Essential of Agency contract 

a. Sub Agency and liability i. K.Chetty v. R. Chetty ii. Section 213 iii. Fiduciary Duty and Capacity: Scherind Chemicals Case. iv. Conflicting Interest & Confidentiality: Brown v. IRC v. Duty to remit money. 

 Part B 

  

1. Short notes on: a. Doctrine of Frustration 

i. Section 56: Impossibility of Performance. ii. Paradine v.  Jane  :    Impossibility  to perform: no excuse  in Positive and Affirmative 

Contracts. iii. Grounds of Frustration: 

i. Destruction of Subject matter. 

ii. War iii. Legislative & Government Intervention iv. Death of Party to Contract. 

b. ‘Time’  as Essence of Performance: i. Section 55. ii. China Cotton Exporters v.B.R.C.Mills All Commercial Contracts, ordinarily Time is an 

essence and a question of law and fact. iii. Bhudra Chand v. Betts iv. Time  is  generally  considered  to  be  of  essence where  the  parties  have  expressly 

agreed so, or where delay operates as injury, or where the nature and necessity of the Contract requires it to be so construed. 

2. Short Notes: a. Right of lien of a Agent: 

i. Sec.221 Right of lien to be exercised only over moveable property or goods. Pestonji Bhicaji v. Raviji Javerchand:  essential Conditions of a lien 

i. Lawful possession. ii. Must belong to principal iii. Should  hold  such  goods  on  behalf  of  the  principal  and  not  any  third  party 

thereof. ii. General Lien: Sec.171. 

i. To retain belongings of another to recover general balance due. ii. It is available to bankers, attorneys, wharfingers etc. 

iii. Particular Lien i. The  right  is  to  retain  goods  belonging  to  another  for  recovery  of  all 

expenses incurred in respect of those goods. b. Right of lien of a Bailee: 

i. General Lien i. A  Bailee  has  general  Lien  only  in  cases  where  bailee  is  either  Banker, 

Wharfinger, Attorneys  ii. Particular Lien: A Bailee has a Particular Lien under Sec.170. 

i. The lien is confined to the goods in which skill and labour has been expended. ii. Conditions: iii. Bailee must act in accordance with purpose of Bailment. iv. Service must involve exercise of labour and skill. 

iii. Bombay saw Mills Case.  

3. Short Notes on : a. MINOR as a Partner: 

i. Sec.30.  ii. Minor  is  incompetent  to  a  Contract.  But  however  he  may  be  admitted  to  the 

Benefits of Partnership. iii. Lachmi Narain v. Beniram. iv. He  has  a  limited  liability  in  comaparision  to  other  partners who  have  Unlimited 

liability. v. He may elect not to continue in Partnership on attaining majority. vi. HE is not personally liable for acts of the Firm. 

 

b. Principles of AGENCY in Partnership: i. Partner as Agent: Bank of Australia v. Beillat ii. Section 4 of Partnership Act. iii. Partner’s Authority in Trading Firm iv. Single Partner appearing in Suits. 

 4. Short Notes on: 

a. Liability of Surety i. Erans v.Bremridge: Condition precedent is to be fulfilled. ii. General Liability: Sec. 128 iii. Liability under continuing Guarantee: Sec.129 iv. Liability under Bank Guarantee. 

b. Doctrine of Subrogation: i. Section 140 ii. A right of subrogation arises on payment of the amount due to the creditor. iii. A surety steps  into the shoes of the creditor and  is  invested with all the Rights the 

Creditor had before making any payments. iv. Hugenin v. Basetey 

 5. Short notes: 

a. Pledge by a non‐owner: i. Pledge by Mercantile Agent. S.178 ii. Pledge by a person having possession under voidable contract. S.178A iii. Pledge by a person having limited interest. .;179 

b. Sub‐Pledge: i. Pledgee can sub‐pledge to the extent of his interest in the pledged goods ii. Sub‐pledgee not valid beyond the validity of original pledge contract iii. Bailee  cannot  sub‐bail without  the  consent  of  the  bailor,  Pledgee  can  sub‐plede 

without the consent of the pledgor.  

NATIONAL LAW SCHOOL OF INDIA UNIVERSITY, BANGALORE Master of Business Laws (MBL) I year  

June 2012 Annual Examination  ‐ Key Answer : Corporate Law‐24.02.2012 PART-A

1. a) – Characteristic features of a Company – Limited Liability- Circumstances under

which a shareholder will have unlimited liability in a Limited Company

i) Statutory Minimum requirement of 7 in case of a Public Company and 2 in case of a

Private Company and the Company carries on the business for more than 6 months while

the members are so reduced, every person who is a member during the time that it so

carries on business after those 6 months and is aware of the fact that it is operating with

lesser number than the requisite number shall be personally liable- See Section 45 of the

Companies Act, 1956.

ii) Business of a Company has been carried on with an intent to defraud creditors during

the Course of Winding up. All persons who are knowingly parties to the transaction are

personally liable without limitation of liability for all or any of the debts or other

liabilities of the Company (Sec. 542).

In the above problem, all the remaining six members shall incur Personal liability for the

debts contracted by the Company under section 45 of the CA, Act 1956.Only those

members who knew of this fact shall be liable. The liability shall extend only to the debts

contracted after six months from the date of Auction of that member’s shares.

1. b) ‘Lifting the Corporate veil’- meaning- Refer to State of U.P v. Renusagar Power Co.

[1991] 70 Comp.Cas.127

Circumstances under which the Courts may lift the Corporate Veil

a) Statutory provisions- As per the provisions of the Companies Act, 1956

- Reduction of membership-See section 45

- Failure to return Application money- See Sec. 69 and SEBI Regulations,

2009

- Misrepresentation in the prospectus- Sections 62 and 63

- Misdescription of name- Section 147

- Fraudulent conduct of Business under Section 542

- Holding-subsidiary company-Section 212

b) Judicial Interpretations

- Protection of revenue- Refer to the case of Sir Dinshaw maneckjee petit

AIR 1927 Bom.371

- Prevention of fraud or improper conduct- See Gilford Motor Company v.

Horne[1933]1 CH 935

- Determination of the enemy character of a company- Daimler Company

Ltd.v. Continental Tyre & Rubber Co. (Great Britain) Ltd.[1916] 2 AC

307

- In case of economic offences

- Where company is used to avoid welfare legislation

- Where the company is used for some illegal or improper purpose

2. a) All major persons shall be counted as members and minors to be excluded in case of

two joint families combining to carry on business as joint owners or in a partnership.

- Explain Section 11 ( Illegal Association) of the Companies Act, 1956

- In the above problem, it is not indicated that they are engaged in banking

business , it may be assumed that they are not and since the total persons

in the two joint families is 22 including 2 minors. The total number comes

to 20 .Hence the Business is not illegal.

-

2. b) Definition of private Company- Section 3(1) (iii) by the Amendment Act, 2000-

Minimum paid –up capital of Rs One Lakh- Restriction on the right to transfer its shares-

limits the number of its members to 50- prohibits invitation to the public to subscribe for

any shares in or debentures of, the company- Prohibits any invitation or acceptance of

deposits from persons other than its members, directors or their relatives.

Privileges and exemptions Available to private companies

- A minimum of 2 persons may form a Private Company( Section12)

- It call allot shares without issuing prospectus or delivering a statement in

lieu of prospectus(Section 70)

- A certificate from commencement of business is not necessary.( Sec. 149)

- Need not hold a statutory meeting

- Need not have more than two directors

- A life director appointed by a private company on or before 1st April, 1952

cannot be removed by the Company in general meeting

- Quorum required for general meeting is two persons in a private company

- Notice for election as director not required in a Private Company

- No approval of the Central Government is required in case of such a

company either for appointment or for amending any provisions relating to

the appointment or re-appointment of a managing director or wholetime

director of the company.

- Provision of qualification shares not applicable to private company( Sec.

270-273)

- Paid up capital of Rs. 1 lakh

3. Who is a Promoter- as defined in Twycross v. Grant- the first persons who control or

influence the company’s affairs are its promoters. They conceive the idea of forming the

company and take necessary steps to incorporate it.

Legal Position of a Promoter- neither an agent nor a trustee of the proposed company. He

is not the agent because there is no company yet in existence and he is not a trustee

because there is no trust in existence. But he stands in a fiduciary position towards the

company about to be formed. Legal position of promoter stated in Erlanger v. New

Sombrero Phosphate Co.

4. The objects clause as defined in Section 13(1) (c) and (d) of the Companies Act, 1956.

- A brief on the Doctrine of ultra vires .

Alteration of Objects clause- Section 17of the Companies Act, 1956.Alteration can be

sought on any of the following grounds:

- To carry on its business more economically and more efficiently

- To attain its main purpose by new or improved means

- To enlarge or change the local area of its operation

- To carry on some business which under existing circumstances may

conveniently or advantageously be combined with the business of the

company

- To restrict any of the objects specified in the memorandum

- To sell or dispose of the whole or any part of the undertaking or any of

the undertakings

- To amalgamate with any other company or body of persons

Section 17 and 18 of the CA Act, 1956 provides that objects clause can be altered by the

company by passing a special resolution at a meeting of the shareholders.

PART-B

II.

a) Extraordinary General Meeting

Any general meeting other than the Annual General Meeting is an extraordinary general

meeting. It may be called.

1. By BOD Suo moto

2. By the Board on a requisition made by the requisite number of members specified

in section 169.

b) The Doctrine of Indoor Management

This doctrine allows all those who deal with the Company to assume that the provisions

of the articles have been observed by the officers of the company. Here the persons

dealing with the company are not bound to inquire into the regularity of internal

proceedings.- Laid down in the case of Royal British Bank v. Turquand

Exceptions to the Doctrine of Indoor Management

- Where the outsider had knowledge of irregularity

- No knowledge of articles

- Forgery and Negligence c) Blank Transfer An instrument of transfer, signed by the transferor, but not by the transferee accompanied

by the share certificate/certificates pertaining to the debenture, transfer may be affected

by the transferee by delivering these documents to another.

The currency of blank transfer

See section 108 A

d) Statement in Lieu of Prospectus Section 70 of the Companies Act, 1956- ‘Statement in lieu of prospectus’ to be filed with

the registrar in the following cases:

a) Where it does not issue a prospectus

b) Where it issues a prospectus but has not proceeded to allot any of the shares offered to

the public for subscription

Statement to be filed with the registrar at least three days before any allotment of shares

or debentures is made.

Penalty- imprisonment up to 2 years or fine upto Rs. 50,000 or with both.

NATIONAL LAW SCHOOL OF INDIA UNIVERSITY, BANGALORE Master of Business Laws (MBL) I year  

June 2012 Annual Examination  ‐ Key Answer : INDUSTRIAL RELATIONS LAW‐25.06.12 

 KEY ANSWER 

 1. Critically examine  the appropriate Government’s power of  reference  through       Case law.  Is  there  any  need  to  continue  with  such  power  in  the  era  of  liberalisation  and globalization?  Key Answer:  Definition of 'Appropriate Government' under section  2(a)‐ Analyze with the help  of  decided  cases  ‐  Critically  evaluate  the  role  of  'Appropriate  Government'  in maintaining  Industrial  peace with  reference  to  power  of  reference  of  Industrial Dispute, publication of award, regulation of strikes and lock outs and so on. In the era of globalization and liberalisation, judicious exercise of these may still be required.  2. Critically explain the definition of Industry with the help of case laws.  Key Answer:  Section  2  (j)  of  ID Act,  1947  ‐ Analysis‐Supreme  Court  cases  explaining  the definition. Important cases ‐  D.R.Baneerjea vs P.R.Mukherjea. ‐  Corporation of City of Nagpur Case. ‐  Hospital Mazdoor Sabha Case. ‐  Safdarjung Hospital Case. ‐  Solicitors Case. ‐  University of Delhi vs Ramnath. ‐  Harinagar Cane Sugar Farm vs State of Bihar. ‐  Madras Gymkhana Club Case. ‐  Bangalore Water Supply and Sewage Board vs A.Rajappa. ‐  Coirboard vs Indiradevi. ‐  Jalbir Singh Case.  Reference to Amended definition of 1982.  3. Explain  the pre‐requisites  for effective collective bargaining. Also examine as  to what extent they are present in the Indian Scenario.   Key Answer: Definition of Collective Bargaining by different scholars  ‐ Elaboration on  the following points: ‐   Strong Trade Unions including finances ‐   Compulsory recognition of Trade Unions ‐   No multiplicity ‐   Good faith negotiations ‐   Good Trade Union leadership ‐   No unfair labour practices 

‐   Willingness to give and take ‐   No politicization of Trade Union  Most of the above are absent in the Indian scenario.   4. Explain the procedure for forming Trade Unions and also the procedure for registration of Trade Unions.  Key Answer: Explanation of these sections in detail: Sections 4, 5 & 6 of the Trade Union Act, also the power of the registrar to call for additional information etc.  5. Explain how registration of Trade Unions is different from recognition of Trade Union.   Key  Answer:  Registration  of  the  Trade Unions  is  done  at  the  initiative  of  Trade Unions. Registrar of Trade Unions registers the Trade Unions and issues certification of recognition. Procedures prescribed  in Section 4, 5 and 6 of the Trade Unions and have to be complied (details  of  Section  4,  5,  and  6  is  to  be  contained  in  the  answer).  Registration  is  for  the purpose of mainly getting immunities under the Act and other facilities provided by the Act. Recognition  of  the  Trade  Union  is  done  by  the  employer  for  the  purpose  of  facilitating effective, collective bargaining. There  is no  law  requiring compulsory  recognition of Trade Unions. Generally,  the management  and  the  Trade Unions enter  into  an  agreement with respect of recognition of Trade Unions. They also agree on the procedures for recognition of Trade Unions.   6.  Explain in brief different methods of resolution of Industrial disputes as provided under the Industrial Disputes Act, 1947.  Key  Answer:  Trace  the  method  adopted  to  resolve  the  Industrial  disputes  ‐  show  the movement from voluntary settlement to compulsory adjudication of Industrial disputes. Make  reference  to  authorities  provided  under  the  ID  Act,  1947.  viz, Works  Committee, Conciliation  (Conciliation  Officer  and  Board  of  Conciliation)  Court  of  Inquiry,  Grievance Settlement  Authority,  Arbitration  and  Compulsory  Adjudication  (Labour  Court,  Industrial Tribunal and National Tribunal). Critical assessment and analysis of working of the system.  7. Analyse the definition of ‘workman’ in the Industrial Disputes Act, 1947 with the help of case laws.  Key Answer: The 'workman' definition consisting of meaning part, inclusive part and Exclusive  part  will  have  to  be  explained.  The  definition  does  not  differentiate  between permanent, temporary etc. Case Laws‐ H.R. Adyanthaya vs. Sandoz (India Ltd). ‐ Constitutional Bench decisions is to be explained. Also Sundarambal vs. Government of Goa case also is to be explained. There may be other decisions  in addition  to  these  two. Distinction between workman and contractor also to be explained.  

8. Explain the reasons for weakening of Trade Union Movement in India.  Key Answer: Challenges posed by Economic Liberalization • Voluntary Retirement Schemes • Informalisation of labour and sub‐contracting • Collectivism to Individualism • Productivity linked wages • Legislations covering all most all aspects of Employer‐Employee Relations • Opening of employment opportunities in new areas with liberalization • Weakening of Trade Unions  Write short notes on the following:  

a) Protected workman  Key  Answer:  A  protected  workman  in  relation  to  an  establishment  means  a workman who, being an office bearer or member of  the executive committee of a registered  trade union  connected with  the establishment,  is  recognised as  such  in accordance  with  rules  made  in  this  behalf.  Explain  Section  33  of  the  Industrial Disputes Act, 1947 and the rights of a protected workman focusing on Rule 61 (1) of the Industrial Disputes (Central) Rules, 1957.  

b) Picketing  Key Answer: Explain the Elements of Picketing with the help of Case Laws. 

 c) Strike as a weapon of Collective bargaining  Key Answer: Strike is a weapon of the workers. It can be an effective tool only when there is total  strike.  It  is difficult  to have  total  strike  in many  industries because of multiplicity of Trade  Unions.  Strike  is  required  to  be  totally  peaceful,  if  workers  have  to  avail  the immunities, even marginal violence or minor offences in the course of strike will take away the  immunities.  If  the  strike  is  legal  and  justified  then workers will be  entitled  to wages otherwise no wages.  d) Individual Dispute  Key Answer: Explain Section 2( k) and 2  (A) of the  Industrial Disputes Act, 1947.Individual dispute  deemed  as  Industrial  dispute,  1965  amendment  is  to  be  explained.  In  case  of individual dispute not covered by deemed industrial dispute, the individual dispute has to be exposed by  substantial number of  fellow workers. Also explain  the  remedies Available  to Individual Workman under the ID Act. 

NATIONAL LAW SCHOOL OF INDIA UNIVERSITY, BANGALORE

Master of Business Laws (MBL) I year

Annual 2012 Examination - Key Answer : ENVIRONMENTAL LAW-26.06.2012

PART- A

1. Overview: Development from being part of General Law (Tort Law; Criminal Law) to

Special Law

• Overarching Law ( Environment Protection Act, Rules, Notifications etc.); Pollution control Laws ( Water & Air Act); Waste Management Laws; Coastal Zone

Regulation; Environment impact Assessment; Green laws ( Forest Act, wildlife Law;

Forest Conservation, Biodiversity Law); Rights law ( Forest Rights Act);

Environmental Justice( Higher Judiciary, Environment Tribunal; Environment

Appellate Authority, National Green Tribunal).

2. Principles: (a) Polluter Pays: Concept and its application- International and domestic laws;

(b) Precaution: Concept & its application- International, Comparative and Domestic Laws.

3. Powers and functions & pollution Control Board: Consent; orders for closure; Instructions

to other Authorities; Prosecution; Advice to Government; Education etc. 4. Wildlife Areas : Classification under 1972 Act & 2002 Amendment; Critical Wildlife

Habitats under Forest Rights Act- Scientific, economic and legal Considerations for

classification and Management

5. Categories of Forests: Reserve, protected & Village Forests; Private Forests and all other

areas notified as Forests- description and dos and don’ts in each of the areas as prescribed

under the law- Case law. 6. Biodiversity Act: Conservation; Management; Biosafety; Access & Benefit sharing;

Hierarchy of Authorities & their Functions; Conflicts & their resolution

PART-B

7. a) Forest Rights Act, 2006- Background; List of Rights; processes & procedures;

Hierarchy of Authorities & their Functions; Critical wildlife Habitats. b) Rio- Summit: Participation of large no. of states and other entities; Rio- Declaration;

Forestry principles; Agenda 21; climate change & Bio- diversity Conventions; Commission

on Sustainable Development. 8. a) Citizen’s Right: Discuss S. 19 of EPA.

b) Pollution standards-Earlier position; Now under EPA- what are covered and what are left

out – Basis for Decision making. c) Coastal Regulation Zone Notification: Background; classification; permitted, restricted &

banned activities; enforcement

d) Corporate Environmental Responsibility: Discuss Ss. 16 & 17 of EPA.