Answer-Key: Contract Law: MBL 1. 1.1 Answer the following: a.

Common Law, no general duty to speak- Caveat emptor will apply- Silence does not amount to fraud, unless: a) Contract of utmost good faith b) where there is legal duty to speak- Intention to deceive distinguish fraud and misrepresentation. Deerry v Peek . 1.2 1.3 Contract for necessities- valid- duty to pay for necessities supplied. Past consideration- when valid- act at instance of promisor- a time barred debt- an antecedent debt. 1.4 Instantaneous acceptance in case of telex or fax- it is against the postal rule in India- where acceptance is complete in respect of offeror. 2. i. Issues: 1. Whether the Offer was revoked? 2. Whether there was a Valid Acceptance? ii. There has been a valid acceptance, Butters has to perform the Contract in favour of Scotch. iii. Valid Condition of an Offer: 1. Communicated. 2. Must be distinguished from an Invitation to Treat. 3. Must be made to another person. 4. Counter-Offer Iv: Purchasing a option to keep the offer open. Unless Sctoch does the same, revocation before acceptance is valid. Sec. 6 Revocation of the offer: express and implied.

Butters revocation of offer is valid Acceptance of Sctoch is invalid. Acceptance must be communicated- On communication of Acceptance-Contract concludes-Suit of specific performance cannot be granted in contract of personal service or when the same requires constant monitoring by a court of law or too many minute details are to be worked out or when damages are sufficient remedy-Tweedel v Atinkson- purchase of option to keep offer open-if not- revocation of offer standsNo wrongful conversion of property-Implied revocation when property is sold to third party and the original offer stands cancelled.

3.

a. No Ravi cannot sue for damages. See, Krell v. Henry. b.Grounds of Frustration : 1. Destruction of subject matter 2. 3. Death, in case of Personal Service Occurrence or Non-occurance of particular state of things.

4. Intervention by Legislative Authority 5. 6. War. Frustration in case of Commercial Contracts.

PART B- Any Four 1. Free Consent: when vitiated (10 marks) Section 10: When Consent is Free. Consent is vitiated if: o Coercion: S.15 o Undue Influence: S.16

o Misrepresentation S. 17, 18 o Mistake of Fact & Law. Ss. 20,21, 22 2. Answer the following: a. Effect of Contract with a minor: i. No Estoppel ii. No Liability under Contract iii. No Ratification iv. Limited Application of Restitution. v. Liability only for Necessities b. Governemnt Contracts: i. Art. 299: 1. Expressed to be made by the President or Governor as the case may be. 2. Executed by authorised person 3. Executed on behalf of President or the Governor ii. State of West Bengal v. B.K. Mandel iii. Constitutional Limitations in Contractual Relations 3. Answer the Following (5x2= 10 marks) a. Shrink-Wrap Agreements: i. Shrink wrap packaging. ii. C.D.Rom of Softwares. iii. ProCD v. Zedeinberg b. Features of Pledge. i. Delivery of Possession. ii. Bailment by way of Security

iii. The Security is to be for the repayment of a debt. 4. Answer the Following (5x2= 10 marks) a. Discharge of Contract by Performance. i. Persons obliged to perform ii. Persons entitled to claim performance. iii. Time and Place of Performance. iv. Appropriation of Payment v. Tender of Performance. b. Breach Of Contract: i. Actual Breach and Anticipatory Breach. ii. Remedies to Breach: 1. Specific Performance 2. Damages 3. Restitution.

5. Answer the Following (5x2= 10 marks) a. Requisites of a valid Acceptance: i. Acceptance must not be in part. ii. It must be communicated iii. Acceptance by act/ conduct iv. Silence is no Acceptance: v. Carlil v. Smoke ball CO. b. Conditions of a valid Ratification: i. Only for acts Principal is capable of doing

ii. Full knowledge of acts done iii. Contract on behalf of ratifier. iv. Within reasonable time v. No illegal or void act can be ratified vi. Communication of Ratification.

NATIONAL LAW SCHOOL OF INDIA UNIVERSITY BANGALORE MASTERS IN BUSINESS LAW EXAMINATION Dec. 2013 BANKING LAW AND PRACTICE Total Marks 100 Time 3 hrs. Model Answers 1. What role the Reserve Bank of India can play in controlling the recession hit economy today. Discuss by referring to the statutory powers vested in the bank to take any such measures. a. Basic reference to the banking function of borrowing and lending b. How banker balances between liquidity and profitability c. If entire borrowed money is lent there will be greater profitability; but no liquidity. On the other hand, if entire money is retained there will be greater liquidity but no profitability therefore a banker would balance these two aspects; d. How one bank failing would spread to other banks as well as the entire banking business stands on depositors confidence therefore the regulating law would have immense provisions in this regard; e. In India both (i) Banking Regulation Act; and (ii) Reserve Bank of India would have immense provisions to ensure this factor; f. Reference to such provisions of law and explanation. 2. Write short notes on the following: a. The role and function of Central Banking Institution i. Stabilization of the financial markets in any economy is the most important among the functions of the Central Banking Institution; ii. Regulating the banking sector is also its function iii. Bank of issue iv. Banker to the government v. Bankers bank vi. Controller of credit vii. Custodian of foreign exchange reserves viii. Supervisory functions b. RBIs power to regulate foreign banks in India. i. All the provisions of the BR Act, and other provisions (applicable to the banks) are applicable to the foreign bank having its business in India. ii. These are in addition to the earlier considerations 1. Whether carrying on of banking business by the company in India will be in public interest; 2. Whether the government or the law of the country in which the company is incorporated discriminates in any way against banking companies registered in India; and

3. Whether the company complies with the provisions of the BR Act as applicable to foreign companies. 3. Explain the following a. Paying and collecting banker; including the protection envisaged under negotiable instruments act; i. Paying banker is one who is expected to pay under the cheque, either to the payee directly, or to the collecting banker; ii. There is protection envisaged under Negotiable Instruments Act, for paying banker under sec. 10, 85 and 89 Whereas S. 10 talks about the payment in due course S. 85 specifically deals with specific protection available to the paying banker iii. And it states that the banker is discharged from his duty when he makes payment in due course either to the holder in due course, if the cheque is order cheque or to the bearer of the instrument, if the cheque is a bearer cheque. Finally s. 89 deals with altered instruments and payment made there under. iv. Collecting banker is on who is causing the proceeds of the cheque collected from the paying banker on behalf of his customer v. If the cheque is crossed one then it is imperative that, the cheque must be collected through the intervention of the collecting banker; vi. He is also protected under the NI act. vii. Cases which may be cited in support of this answer 1. Bhatoria Trading Company v Allahabad Bank, AIR 1977 Cal. 363; 2. Madras Provincial Co-operative Bank Ltd., v Official Liquidator, South Indian match Factory Ltd., AIR 1945 Mad. 30; 3. Bank of Maharashtra v Automotive Engineering Ltd., (1993) 2 SCC97; 4. Canara Bank v Canara Sales Corporation & Others (1987) 2 SCC 666.

b. Holder and holder-in-due course. i. Explanation of the concept of holder and holder in due course u/ss. 8 and 9. ii. PRESUMPTIONS [S. 18] 1. The first privilege is that every holder is deemed prima facie to be a holder in due course 2. If the defendant intends to set up the defence that there was something wrong in the inception or subsequent negotiations of the bill the burden of proving that lies on him 3. Once it is shown that the history of a bill is tainted with fraud or illegality the burden is shifted to the holder to prove that he is a holder in due course iii. Suppose A signs his name on the blank but stamped instrument. He gives the paper to B with authority to fill it up as a promissory note for Rs. 250 only. But B fraudulently fills the paper for Rs.1000, the stamp put upon it being sufficient to cover the amount. He then hands it to H for Rs.1000, who takes it without notice of fraud iv. A will be bound to pay the full amount to H, because under this section it does not lie in the mouth of the signer to say that in filling the instrument his authority has been exceeded. v. PRIOR DEFECTS [S. 58] 1. The party liable to pay an instrument cannot, contend that 2. he had lost the instrument or 3. that it was obtained from him by means of an offence or fraud, or 4. for an unlawful consideration vi. PRIVILEGE AGAINST INCHOATE STAMPED INSTRUMENTS [S. 20] 1. the logical order of operations with regard to a bill is, 2. the bill should be first filled up, 3. then it should be signed by the drawer, 4. then it should be accepted, 5. then it should be negotiated, and 6. then it should be indorsed by the persons who become successively holders; 7. but it is common knowledge that parties very often vary, in a most substantial manner, the logical order of those proceedings, 8. Sec. 20 is intended to deal with those cases

4. What is bank guarantee? Explain leading judicial pronouncements regarding bank guarantee in India. a. A bank guarantee is a commercial instrument in the nature of a contract, intended between two parties, to secure compliance with the contract. It is an off-shoot of the main contract between two parties. b. A bank guarantee is a guarantee made by a bank on behalf of a customer (usually an established corporate customer) should it fail to deliver the payment, essentially making the bank a co-signer for one of its customer's purchases. c. Judicial pronouncements regarding bank guarantee in India 1. Tarapore and Co., Madras v. V.O Tractors Export Moscow, AIR 1970 SC 891 2. Hamzeh Walas and Sons v. British Imex Industries Ltd., 1958-2 QB 127. 3. Urquhart Lindsay and Co. Ltd. v. Eastern Bank Ltd., 1922-1 KB 318 4. United Commercial Bank vs- Bank of India, (1981) 2 SCC 766:AIR 1981 SC 1426 5. U.P. Coop. Federation vs- Singh Consultants & Engineers (P) Ltd., (1988) 1 SCC 174 6. Hindustan Steel Works Construction Ltd. vs- Tarapore & Co., AIR 1996 SC2268:(1996) 5 SCC 34 7. Dwarikesh Sugar Industries Ltd. vs- Prem Heavy Engineering Works (P) Ltd., (1997) 6 SCC 450 8. Federal Bank Limited vs- V.M. Jog Engineering Limited, (2001) 1 SCC 663 9. National Highways Authority of India vs- Ganga Enterprises, (2003) 7 SCC 410 5. What is Passbook? Explain the legal status of entries made in the Passbook. i. Pass book is issued to banks customer, who generally keeps savings account ii. In case of current accounts it is issued only upon demand by the customer iii. Pass book is replica of the ledger at the bank branch iv. In case of current accounts statement of their accounts are given to them periodically (daily, weekly, fortnightly etc.) v. Entries made in the pass-book 1. Two prominent thoughts Once the passbook entry is made and passed on the customer he shall verify and raise objection if any afterwards the entries made in the passbook shall be treated as final Passbook entries are for general convenience hence, the entries can be questioned any time by the parties

vi. Entries favouring the customer 1. the passbook belongs the customer and the entries made in it by the bank are statements on which the customer is entitled to act In Atlantic Mines Ltd., v Economic Bank [(1904) 2 KB 471] 2. If the position of the customer has not been adversely affected, by relying upon the passbook, the banker may rectify it (within reasonable time) 3. A fictitious entry made by a bank employee cannot be relied upon by a customer 4. Example State Bank of India v Shyma Devi, AIR 1978 SC 1263 vii. Entries favouring the bank 1. The proposition of law is extremely difficult to make in this regard 2. Therefore the following few points in this regard are to be taken into account (all these points arise out of decisional law from time to time) viii. Interesting point is when the customer has acted on the basis of a wrong entry (favouring the customer) and then shifted his position to his detriment then what would be the situation? 6. Solve the following problems a. A is the Chief Accountant at NAL Ltd., a software company, which banks with Axis Bank. A is generally responsible for almost all banking transactions of NAL Ltd. During the date of his retirement, he withdraw Rs.50,000 by forging the signature of his CEO. The NAL Ltd., wants to hold the bank responsible for this loss Decide. i. Here the NAL Ltd., would be able to recover the loss as the cheque was forged one. ii. The authority on the point is Canara Bank v Canara Sales Corporation where the SC has held that, if the cheque is forged there is no mandate on the banker to make the payment and the said situation is different from the protection which is envisaged under the statute for his favour. b. A makes a promissory note in a stamp paper sufficient for Rs.1,00,000 but without stipulating the amount and the date of making the note. However, A actually owes only Rs.75,000 under the instrument. The holder of the said note fill the promissory note for Rs.1,00,000 and endorsed the same to another person Mr. X. Does Mr. A obligated to pay Rs.1,00,000 to Mr. X. i. Here Mr. A is obligated to pay the entire amount of Rs.1,00,000 to Mr. X. ii. When there are blanks left unfilled they can be filled later on etc.,

7. Write short notes on the following a. Banking Ombudsman scheme in India; i. The scheme prepared and implemented by the RBI ii. First with the active assistance of all banks iii. Now (in a sense) entirely by itself iv. Legislative power to introduce and implement the scheme v. Sec. 35A, Banking Regulation Act, 1949 vi. the present scheme came into force from January 1, 2006 vii. First introduced in 1995 viii. Revamped in the year 2002 ix. Enlargement of the process in 2006 x. being satisfied that, it is necessary in public interest and in the interest of banking policy to enlarge the extent and scope of the authority and functions of Banking Ombudsman for redressal of grievances against deficiency in banking services, concerning loans and advances and other specified matters xi. Amendment in the year 2007 (May) xii. Type of complaints that can be taken to ombudsman 1. non-payment or inordinate delay in the payment or collection of cheques, drafts, bill etc., 2. non-acceptance, without sufficient cause, of small denomination notes tendered for any purposes, and for charging of commission for this service; 3. non-acceptance, without sufficient cause, of coins tendered and for charging of commission for this service; 4. non-payment of delay in payment of inward remittances; 5. failure to issue or delay in issue, of drafts, pay orders or bankers cheques; b. Non-performing assets and its implication upon banking stability. i. The explanation as to what are NPAs ii. Why they are to be regulated iii. Can NPAs be traded; and iv. The RBI guidelines for the same; v. Including the legal regime regarding the same. ********

NATIONAL LAW SCHOOL OF INDIA UNIVERSITY BANGALORE MBL PART 1 SUPPLIMENTARY EXAMINATION (DECEMBER) 2013 CORPORATE LAW Marks: 100 Time: 3 hours Instructions: 1. No Clarifications may be sought on the question paper. 2. Mobile phones or electronic devices strictly prohibited inside the examination hall. 3. NO books or Bare Acts allowed inside the examination hall.
PART- A Answer ANY THREE of the following: 1. a) Zorbol Ltd., a company incorporated with the sole purposes of manufacturing and selling Construction grade steel rods and other construction equipment and to perform the function of general contractors now gets into the business of buying and developing real estate. A considerable amount is invested and due to the downward market trend a huge amount of loss is incurred. Minority Shareholders bring an action against the directors claiming the actions are ultra vires the objects clause. Decide based on case law and determine the nature of liability, if any of the directors. Ultra Vires Acts or acts beyond the scope of the objects clause.
Ashbury Rly. Carriage & iron Company v. Riche Lakshmanaswami Mudaliar v. L.I.C Effects of Ultra Vires Transactions 1. The ultra vires transactions are null and void ab initio 2. Any member can get an order of Injunction from the court in case he finds that the company is about to undertake an ultra vires act. 3. It is the duty of the director to ensure that the corporate capital is used only for the legitimate business of the company, In case of such capital being diverted, the directors are personally liable to replace it.The directors and other officers are personally accountable to third parties in case of ultra vires transactions. 4. Where a companys money has been used ultra vires to acquire some property, the companys right over such property is held secured.

(3 x 20 = 60 marks)

Oppression and mismanagement-

Rule in Foss v. Harbottle: The conduct with which the defendants are charged is an injury not to
the plaintiff, exclusively; it is an injury to the whole corporation. In such cases the rule is that the corporation should sue in its own name and in its corporate character. It is not a matter of course for any individual member of a corporation thus to assume to themselves the right of suing in the name of the corporation. In law the corporation and the aggregate of members of the corporation are not the same thing for purposes like this.

b) Pending the above mentioned action, the company seeks to shift its registered office from Bangalore to Delhi. The majority of the shareholding is held by five individuals, three of whom are also directors. What would be the procedure to shift such office and would it be possible?
(a) A company can change its registered office from one place to another within the local limits by passing a resolution of the Board of directors. Notice of the change shall within 30 days, be filed with the ROC in Form No. 18.In case of change in the same city, town or village, alteration of memorandum is not necessary. (b) A company can change its registered office from one town or city or village to another town, city or village of the same state by a special resolution at the general meeting of the shareholders. In case of change in Jurisdiction of one ROC to the other, confirmation of the Regional director is to be obtained. Both the copy of the special resolution and the confirmation of regional director is to be filed with the ROC within 30 Days in Form 23. Within 30 days of the removal of the registered office, the notice of the new location has to be given to the Registrar. (c) A company can change the registered office from one state to another state by passing a special resolution and confirmation by the central government. Notice is to be given to every debenture holder and every other person whose interest may be affected by the alteration. The consent of every creditor who is entitled to object the change of the registered office must be obtained or his claim be secured to the satisfaction of Central government. The Central government shall cause notice of the petition for confirmation of alteration to be seen on the registrar who may also state his objections or suggestions. The Central government generally considers the following matters before approving the Change 1) the interest of the company and its members; 2) public interest; 3) interest of the creditors; and 4) Bonafides of the company in seeking the amendment . Minerva Mills Ltd. v. Govt. of Maharashtra [(1975 45 comp. cases 1] In this particular case, the intention of the company in shifting its registered office is also an important factor. Applied to the problem, this is a pertinent question for us to ask.

2. a) A bank wishes to bring a winding up petition against KingsBridge Ltd., a company that stood surety for loans taken by Kingsfly Airlines Pvt. Ltd., which was unable to repay its debt and subsequently filed for bankruptcy. Advice the bank as to how to proceed and where to file the action.

Where the petition is brought about by a contingent or prospective creditor, it can be admitted only with the leave of the Court; which is not generally granted unless the Court is satisfied that there is a prima facie case for winding up of the Company and reasonable security for costs has also been given. Some times a creditors petition is opposed by other creditors. In such cases, the Court may ascertain the wishes of the majority of the creditors, though their opinion wont be really binding on the Court. The decision ultimately depends upon the state of the Company. If the Company is commercially insolvent and the object of trading at a profit cannot be attained, winding up order would follow as a matter of course (ex debitio justitiae). A creditor may present a petition, while he is pursuing his ordinary remedy of a suit for the enforcement of his claim. The Court may order a stay of his suit but cannot disqualify a creditors petition on that ground; what is required under this section is that the creditors claim be enforceable at the time of the petition - even if it becomes unenforceable by the time of the order, such unenforceability shall have no effect. An application for winding up shall be in the form of petition u/Sec. 439, in Form 45, 46 or 47 as the case maybe, with required variations and shall be submitted in duplicate. The Registrar of he Court shall note on the petition the date of its presentation (Rule 95).

b) A group of minority shareholders of KingsBridge also want to file for winding up on grounds of oppression, advice them as to how to proceed. Oppression and mismanagementRule in Foss v. Harbottle: The conduct with which the defendants are charged is an injury not to
the plaintiff, exclusively; it is an injury to the whole corporation. In such cases the rule is that the corporation should sue in its own name and in its corporate character. It is not a matter of course for any individual member of a corporation thus to assume to themselves the right of suing in the name of the corporation. In law the corporation and the aggregate of members of the corporation are not the same thing for purposes like this.

Oppression not an immediate remedy for winding up however, It would also be just and
equitable to wind up a Company where the principal shareholders have adopted an aggressive or oppressive or squeezing policy towards the minority. In R. Sabhapaty Rao v. Sabapathi Press Ltd. [AIR 1925 Mad. 489], the Directors of a Company were able to exercise a dominating influence on the management of the Company and the Managing Director was able to outvote the minority of the shareholders and retain the profits of the business between members of the family and there were several complaints that the share holders did not receive a copy of the balance sheet, nor was the auditors report read at the general meeting, dividends were not regularly paid and the rate was diminishing, that constituted sufficient ground for winding.

3. a) Discuss in detail the kinds of meetings mandated for different companies under the Act and the mandated procedure to be followed before, during and after these meetings.
Statutory meeting, Quarterly Board of Directors meeting, annual shareholding meeting is mandatory for Public companies. Procedure of notice- time frame for notice- recording of minutes, submission of report to registrar.

b) X was appointed as a director in an EGM, for which no proof as to who requisitioned the EGM, when the notice was issued, was available. Minutes were recorded in shorthand and not in the minutes book. This appointment is challenged. Advice X as to how he may defend his appointment.

1. Appointment of a Director does not require a a special resolution. 2. An EGM can be requisitioned and no specific procedure for issue of notice laid down for an EGM. 3. If there was a board resolution to have an EGM, sufficient. 4. Minutes can be in shorthand, Section 193 does not lay down how they must be recorded. 5. Mintues can later be added to the minutes book and bound.

4.

Explain the difference between Articles of association and Memorandum of Association, detailing in particular how they affect the interests of an outsider.

1. Write as to what is MOA, AOA, Articles of Association are a subordinate document to the memorandum which is treated as the general constitution of the Company. The memorandum is fundamental and therefore can be altered as prescribed in the Act. Articles of Associations on the other hand regulates internal relations within the company as also distributes the power. It can be altered according to what the members think fit. The distinction between these two documents is highlighted by Lord Aciras in Ashbury Rly Carriage & Iron Company Ltd v. Riche [(1875) L.R. 7H.L.653] thus :I will ask your Lordships to observe the marked and entire difference between the two documents - I mean the memorandum of association on the one hand and articles of association, those articles play a part subsidiary to the memorandum of association. They accept the memorandum of association, as the charter of incorporation of the company, and so accepting it, the articles proceed to define the duties, the rights and the powers of the governing body as between themselves and the company at large, and the mode and form in which the business of the company is to be carried on. Thus the basic or fundamental provisions relating to the constitution of a company are set out in its memorandum of association. Being the fundamental document of the company which specifies its business activities and powers the early Companies Acts did not contain any provision for amendment of provisions in the memorandum. The articles on the other hand deal with matters of internal regulation, such as, the distribution of powers among the various agents of the company, conduct of meetings, appointment of Directors, etc. Any provisions in the articles of association is to be interpreted in consonance with all the provisions of the memorandum or in other words no part of the articles can be construed in such a way that it intervenes or contradicts any provision of the memorandum. Of course, the principle of construction does not apply where the words are clear and unambiguous, and are in consonance with the provisions of the memorandum. Memorandum delimits the boundary of the company. Every one entering into the contract with the company is bound to have constructive notice of the provisions of the memorandum. Articles on the other hand provides regulation for internal management. Any internal regulation of power application can be presumed to have been accomplished according to internal regulations. This principle of indoor management is discussed elsewhere along with the principle of constructive notice.

PART B Write an analytical note on any four of the following: 1. Gilford Motor Company v. Horne Fraud as a ground for lifting the corporate viel. (4 x 10 = 40)

Horne was appointed as MD of the plaintiff company on condition that he shall not at any time while he shall hold the office of MD or afterwards, solicit or entice away the customers of the company. His employment came to an end under an agreement. Shortly afterwards he started a company which solicited the plaintiffs customers. It was held that, the company was mere cloak or sham for the purpose of enabling the defendant to commit a breach of his covenant against solicitation. Evidence as to the formation of the company and as to the position of its shareholders and directors lead to that inference. The defendant company was a mere channel used by the defendant Horne for the purpose of enabling his own benefit, for the advantage of the customers of the plaintiff company and that the defendant company ought to be restrained along with the defendant Horne.

2. Statement in lieu of a Prospectus

In case the company decides not to approach the public for the necessary capital and obtains it privately, it can file a Statement in Lieu of Prospectus with the ROC. On fulfilment of these requirements, the ROC issues a Certificate of Commencement of Business to the public company. Statement in lieu of Prospectus (Sec 70): A Public Company is required to file a statement in lieu of prospectus with the Registrar of Companies at least 3 days before allotment, where it does not issue a prospectus. A private Company is exempted from this requirement. A statement in lieu of prospectus as specified in Sec.70 includes: i) nominal share capital of the company; ii) names, addresses, description and occupation of Director, Managing Director, Secretary and Manager; iii) Number and amount of shares, debentures agreed to be issued as fully or partly paid up; iv) amount payable to each vendor; v) amount to be paid to the promoter; vi) amount payable as commission; The statement is to be signed by the Directors or their agents authorized in writing

3. Company Secretary Section 2(45) of the Act states that, Secretary means a company secretary within the meaning of clause (c) of sub-section (1) of section 2 of the Company Secretary Act, 1980, and includes any other individual possessing the prescribed qualifications and appointed to perform the duties which may be performed by a secretary under this Act and any other ministerial or administrative duties.
The present definition specifies three things namely: 1. An individual alone can be appointed as a secretary of a company and a firm or a body corporate cannot be appointed as a secretary. 2. The company secretary should now possess prescribed qualifications. Under the previous Act no specific qualifications were laid down under the law. The Central Government now, under the Company (Secretary Qualification) Rules, 1975 has laid down that a person to be qualified as a Secretary should possess the membership of the Institute of Company Secretaries of India. 3. The duties of the secretary are purely ministerial or administrative duties. They are not executive or managerial though limited managerial duties may be delegated by the board.

4. Abuse of Dominant position in relation to The Competition Act.

Pre Requisites to measure Abuse of dominant position: The pre-requisites which the competition authorities must look into while inquiring abuse of dominant position against a particular enterprise in a given market are:

(a) Market Share of the Enterprise The share of the market of a company must be determined having regard to the strength and number of its competitors. For example, the market share of an airline could be measured on the basis of number of flights, number of aircrafts; number of passengers carrying capacity, the city pairs etc. and each parameter may give different results. In case, the products are heterogeneous, it is advisable to calculate market share in terms of value expressed in turnover and in case products are homogenous, the production capacities and reserves are believed to be better indicators of market share. (b) Size and Resources of the Enterprise Large size and superior financial position or resources may be a contributing factor to a dominant market position. In the case of United Brands Co v. Commission, a market share of 40-45 per cent was viewed to be dominant and other factors were considered to be significant. (c) Size and Importance of Competitors When looking at market share it is also relevant to look at the largest firms market share relative to its competitors; the smaller the shares of the competitors, it would be advisable to hold that the largest firm as dominant. Market share of one competitor in the market also determine the competition constraint on the another player. For example, both Pepsi and Coke enjoy over 40 per cent market share in soft drink market in India and again in the truck chassis market, there are only two players namely Ashok Leyland and Telco and both have almost equal market shares. This reflects that one has ability to exercise competitive pressure on another and therefore, neither of them ought to be determined as dominant in the relevant market. (d) Economic Power of the Enterprise Including Commercial Advantage over Competitors Superior market position or resources may be a contributing factor to a dominant market position. Abuse of dominant position may occur if an undertaking in a dominant position strengthens such a position in such a way that the degree of dominance reached substantially impedes competition. (e) Vertical Integration of the Enterprises or Sales or Service Network of Such Enterprises The vertical integration and the benefit of well established distribution system may act as barrier to entry as it can discourage or impede access for a potential entrant to the market. (f) Dependence of Consumers on the Enterprise There is always a likely reaction of buyers to anticompetitive practices namely price increase, hence it is necessary for the competition authorities to look into the relevant evidences while determining their impact. (g) Monopoly or Dominant Position: Whether Acquired as a Result of Any Statue or Virtue of being a Government Company or a Public Sector Undertaking or Otherwise This is widely prevalent in the Atomic energy sector, steel and nuclear energy. (h) Entry Barriers Including: Barriers Such as Regulatory Barriers etc. Barriers to entry, exit or expansion and durability to market power have been identified as very important factors in the assessment of dominance. If entry barriers faced by the rivals are low, the undertaking which has high market share may not be able to continue with significant market power for long. (i) Market Structure and Size of Market : The importance of relevant market in determination of abuse of Dominant position is Sine qua non and further classification of relevant market into relevant product market and relevant geographic market helps in maintaining effective competition and fostering consumers interest. (j) Relative Advantage by Way of Contribution to Economic Development, by the Enterprise Enjoying a Dominant Position having or Likely to Have Appreciable Adverse Effect on Competition. (k) Any other Factor which Commission may Consider Relevant for the Inquiry This residuary clause gives ample scope to the Commission to take into account any other factor which it may deem fit for the inquiry. This discretionary power can be used by them for restoring the healthy competition in the given market.

5. Amalgamation and subsidiary.

Amalgamation is the process of fusion of two or more companies into one. In Harikrishna Lohia v. Hoolungree T. Ltd. (Cal.) 1996, 4 CLJ 352, the court held that the power to amalgate any flow from the memorandum of Association or it being acquired by resorting to the provisions in the statute. Procedural requirements: The first step to be taken for the alteration of the object clause or registered office clause is the passing of a special resolution at a general meeting. Within 30 days of the passing of the special resolution a copy of the same has to be filed with the Registrar (Sec.192). The next step is to file a petition before the Central government for confirmation of the alteration. Atleast one month before the filing of the petition a general notice about the amendment shall be given by publication in two newspapers, one in English and the other in the principal language of the District where the registered office of the company is situated. Individual notice of the petition shall be given to all the debenture holders and other creditors of the company. The petition before the Central government shall be accompanied with copies of the memorandum, articles, notice calling the meeting, special resolution, etc. Wide power is given to the Central government either to confirm the alteration or to reject it. Alteration may be confirmed either wholly or in part and on such terms and conditions as it may think fit. Though the concerned Registrar shall be given a reasonable opportunity to be heard, the state where the registered office of the company is situated has no statutory right to be heard on a petition under section 17. But the Central government regulation provides that where the registered office is changed from one state to another, notice of the petition shall be served on the concerned states. If the Central government has confirmed the alteration, a certified copy of the order together with a printed copy of the memorandum as altered shall be filed with the Registrar. This shall be done by the company within a period of 3 months from the date of the order of the Central government. The Registrar will issue a fresh certificate within one month from the filing of the documents [S.18 (1)]. The certificate is conclusive evidence that all the requirements with respect to the alteration and confirmation thereto have been duly complied with. Holding subsidiary company Subsidiary company, is a separate legal entity and its creator and controller is not to be held liable for its acts merely because he is the creator and controller. Nor is the subsidiary to be held as an asset of the holding company. A subsidiary may however lose its separate identity to a certain extent in two cases; firstly due to legislative intervention and secondly by judicial intervention. Thus Secs. 212-214 contain provisions designed primarily to give better information of the accounts and financial position of the group as a whole to the creditors, shareholders and public. Similarly, the prohibition on financial assistance for the purchase of companys own shares extends to financial assistance by any of its subsidiaries. These provisions relating to group disclosures have in some respects made matters worse rather than better for they are calculated to lead those who had group annual reports to assume that there is a group liability which is not really true. So, people unaware of intricacies in company law are more likely to be misled by these disclosures. Though, we have given certain specific instances, there are many other miscellaneous provisions spread through out the Act, which make it possible for the courts to disregard the corporate identity and to fix the liability on the person(s) responsible for the breach of such statutory provisions.

NATIONAL LAW SCHOOL OF INDIA UNIVERSITY, BANGALORE M.B.L. PART I SUPPLEMENTARY EXAMINATION (DEC.)2013 INDUSTRIAL RELATIONS LAW Key Answers 1. Refer-S.2(k)-industrial dispute.IDA,1947.Cases whether individual dispute per se becomes industrial dispute, substantial no. of workmen concept etc. Central Province case, Bombay Journalists union case etc. Insertion of S.2-A- Significance etc. 2. Refer to Ss.17 and 18 Trade Unions Act, its implications, R.S.Ruikar Case, Jay Engineering case, Chandrama Bros., Rohtas Industries Case. Refer-Chapter 5 on Trade Unions.pp.52-54 3. Refer- S.2(s) of IDA, 1947, ingredients of definition, 7 categories of jobs mentioned etc, employees excluded-Dimakuchi Tea Estate case(any person interpretation), Burma shell case, Sundarambal Case , etc. 4. Refer to ingredients of collective bargaining, advantages and significance. 5. Refer Reading material-Industry-Most prominent being BWSSB Casetriple test involved-judicial interpretation for industry-different periods1952-1963,1963-78 and post 1978 onwards refer to Hospital Masdoor Sabha case, , Safdarjung hospital case, University of Delhi case, Cricket club case etc. 6. S.10 of IDA. Voluntary arbitration. Relevance and significance of arbitration agreement under the Industrial disputes Act- parties involved-the agreement between parties, the procedures involvedsignificance. 7. Legislative scheme interpretations and illustrations on the excluded items in the provision. Dichotomy of interpretation coming up in Sundara moneys case ending up with Mohanlals case. Factum of surplusage of labour is important. Explanation on retrenchment compensation when payable, amount, condition precedent, applicability of Chapter V A and V B. Last come first go rule-general rule- deviations if any to be recorded by employer-Preferential treatment for retrenched employee in case of reemployment-S.2(00) of Industries Act-definition, ingredients, cases like SBI V Sundaramoney, Suresh Gupta case, Barsey light Rly. Co,. Case, Hindustan Electrical case, Orissa Oil Mills case etc. need and significance. Bombay Union of Jounalists case. Conditions

precedent to retrenchment &procedure in brief. retrenchment.

Implications of

8. Refer- to ingredients of Strike, Buckingham Carnatic Millss case, element of combination involved, cessation of work etc. kinds of strikes, legality-Art.22 and 23 of IDA- Justifiability and unjustifiability issuesKelawala, umesh Nayaks case. No work no pay principle.

Write Short Notes on the following a) Objects for which general and political funds could be spent are to be referred. Not mandatory for a trade union member to pay towards political fund and not to be excluded from benefits. Refer pp.50-51 b) Lay off- continuous business-lock out- closure of business for time being; lay off S.21(KKK)-Reasons. Employer liable to pay compensation in lay off. Justified or not is the concept coming up in lock out. Provisions of lay off not applicable to lock out. Bargaining tactics by employer. c) Dharangdhara Chemicals case- contract of service and contract for service- distinction d) Two methods to prevent multiplicity of trade unions-Support of fee paying membership-financial viability concept, democratic process trend similar to choosing political representatives. ***********

NATIONAL LAW SCHOOL OF INDIA UNIVERSITY BANGALORE I YEAR MBL SUPPLEMENTARY EXAMINATION (JAN.) 2014 ENVIRONMENTAL LAW Marks : 100 Time : 3 hours

PART A : Answer any four of the following

(4 x 12 = 48 Marks)

1. Discuss the Constitutional Concerns for Environmental Protection.

Right to environment Derivative right of Right Life (Art.21) refer to case Law PILs; Doctrine of Public Trust and Directive Principles of state policy (Art.39(b) & (c); Art.48A duty of state towards environment: Kamalnath case); Duty of citizen (Art.51A(g)); Management of schedule Areas (V & VI schedules) Role of local selfgovernment in managing Environment (73rd 74th Amendements)
2. Discuss the Common Law and Criminal Law Provisions for Pollution Control.

Principle of liability strict liability & absolute liability (oleum Gas leak case); sic utere tho ut alienum loedas; Negligence; Public Nuisance (B.Gopala V KSPCB, 2000); IPC: Pollution of a public stream of water.
3. Give the salient Features of the Environment Protection Act, 1986.

(i). Umbrella Law; overarch; enabling Law S.24; (ii) Rules, Notification have the same status as the Act (Goa Foundation Case); (iii) Authorities under the Act & Notifications Scope for a wide variety of authorities State Pollution Control Board as a nodal agency; (iv) Standards floor level, states can make them more stringent; (v) personal liability of corporate managers; (vi) provision for citizens suit; (vii) Rules & Notifications deal with Environmental Impacts, Coastal Zone Management, Waste Management; (viii) Authorities specially created for Clean Development Mechanism, Sensitive eco-system management etc.
4. State the Principles of Precaution, Sustainable Development and Public Trust. Illustrate each of them with examples.

Sustainable Development, Precaution & Public Trust: Conceptualize each principle, refer to statutory/treaty law and case law to explain the principle.
5. What are the principle features of the Pollution Control Regime in India? Discuss.

(i). Objects of control, regulate and prevent pollution beides improve quality of water & air (ii) Primarily a two-tier administration: (PCB to give policy oversight & SPCB to implement; (iii) Consent provision: describe; (iv) Standards of Pollution describe; (v) Overriding effect (vi) powers of prosecution, issuing directions and fixing liability on corporate managers; (vii) Power of entry, inspection, taking samples and initiating action etc. support with case law.

6. Elucidate the various kinds of Forest and Wildlife Areas specified in the relevant Legislations.

Types of forests: Public Forest (Reserve Forest; Protected Forest; Village Forest) and Private Forests; Wild life Areas: Protected Areas (Sanctuaries, National Parks); Conservation Reserves & Community Reserves; Critical wildlife Habitats. PART-B
7. Evaluate: (a) (20 Marks)

Rio-Summit on Environment and Development,1992

Largest environmental congregation at the global level; a clear focus on environment & development resulting in a declaration (Rio-Declaration); an agenda (Agenda 21); Forestry Principles and two treaties (on Climate Change & Biodiversity) setting up of Commission on Sustainable Development by far the most productive & effective of all environmental summits.
(b) Coastal Regulation Zone Notifications

Describe primary features amendments galore that reduced the effectiveness of the law idea of CMZ law and Revision of CRZ notification support with case law CZMP and their value causes for ineffectiveness.
8. Write Short Notes on: (a) Forest Rights Act (4 x 8 = 32 Marks)

Historic injustice; Rights of Forest Dwellers and limits to them; procedural aspects of recognition of rights; Critical Wildlife Habitats
(b) Bio-Diversity Act, 2002

Law for conservation; protection; access & benefit sharing; ensure bio-safety & prevent bio-privacy; 3 tier of governance (NBA, SBB, LMC); conflict Resolution Mechanism; Bio-Diversity heritage sites etc.
(c) Hazardous Wastes Management Rules

Principles of precaution, polluter pays and generator having primary obligation of safe disposal duties & functions of State, Generator, transporter & Disposer description of Hazardous substances & exceptions.
(d) Corporate Environmental Responsibility

Person incharge or responsible for corporate decision & action exceptions case laws. ***********