MBA207 USN

Siddaganga Institute of Technology, Tumkur - 572 103

(An Autonomous Institution under Visvesvaraya Technological University, Belgaum)

Summer Semester M.B.A. Examination August 2009

Legal Environment of Business

Time: 3 Hrs
Note: 1. 2. Answer any Four questions from Q.No. 1 to Q.No. 7. Question No. 8 is compulsory.

Max. Marks: 100

1. a) Define bilateral contracts. b) Briefly explain the different kinds of agents. c) Enumerate the contents or clauses of memorandum of Association 2. a) What are the presumptions as to negotiable instruments? b) What are the essential requirements of a valid offer? c) What are the differences between a company and a partnership firm? 3. a) Who is promoter under Companies Act, 1956? b) Write a note on minor as partner. c) What is fraud? Briefly explain the requirements and consequences of fraud. 4. a) Explain briefly the terms Partners and firm. b) Decide giving reasons.

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i) A banker pays a cheque crossed generally over the counter. Is he liable to the drawer or to the payee of the cheque? ii) A draws a cheque payable to self or order. Before he could encash the cheque, one of his creditors, B approaches him for payment. A endorses the same cheque in Bs favour. The banker refuses payment to B on account of insufficiency of funds in the account. Can a be made liable to penalties for dishonour of cheque due to insufficiency of funds in the account under section 138? c) Explain the rights and duties of a partner. 5. a) Describe any three types of partners. 7 10 3

b) Pillai purchased a car by taking a loan from Kerala co-operative Bank Ltd. And gave post dated cheques to the bank not only in respect of repayment of loan installments, but also of premium of insurance policy for two succeeding years. On the expiry of the policy, Pillais car met with accident. Will Pillai succeed in getting a claim against the bank? 7 c) Who is an unpaid seller? Explain his rights. 10 7

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P.T.O.

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6. a) What are the qualifications of an auditor? b) What are the rights of agents? c) Give legal opinion on the following cases.

i) Pratham, a passenger deposited a bag in the clock room of Bangalore railway station. The acknowledgement receipt given to him bore, on the face of it, the words see back. One of the condition printed on the back limited the liability of the railways for any package to Rs. 5000/- the bag was lost and Pratham claimed Rs. 20,000/- as its value, pleading that he had not read the conditions on the back of the receipts. Is he eligible for compensation? ii) Arun draws a cheque for Rs. 100 and hands it over to Bharat by way of gift. Is Bharat a holder in due course? Explain the nature of his title, interest and rights to receive the proceeds of the cheques. 10 7. a) What is meant by the term negotiable instrument ? Give examples. 3

b) i) A company appoints an officer subject to the condition that after ceasing to be in service, he would not join the service of any other competing establishment in India for a period of 5 years. Can the company enforce this condition in the court of law? ii) Arun and Ravish enter into wagering agreement and deposit Rs. 10,000 each with Mohan instructing him to give the total sum to the winner. Arun wins. He sues Mohan for the stake amount. Ravish also sues Mohan for a return of the stake deposited by him with Mohan. Decide giving reasons. c) Will C have the right of further negotiation in the following cases : (B signs the endorsements) i) pay C for my use ii) pay C iii) pay C for order for the account of B. 8. 10 3+4

DSS Ltd has the following two issues on Memorandum of Association of the company. Read the paragraphs and answer the following questions. The memorandum of the company was presented to the Register of companies for registration and the Registrar issued the certificate of incorporation. The company after complying with all the prescribed legal formalities started a business. The company contends that the nature of the business cannot be gone into as the certificate of incorporation is conclusive. The Memorandum of Association of a company was signed by 2 adult members and by a guardian of the other 5 minor members, the guardian signing separately for each minor member. The Registrar registered the company and issued under his hand a certificate of incorporation. a) Can the nature of the business gone into? Give reasons. b) Can a guardian of a minor sign the Memorandum of Association. Discuss. 5 5

c) Are the conditions of registration fulfilled? d) How many members subscribed the Memorandum of Association?

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