NATIONAL LAW SCHOOL OF INDIA UNIVERSITY, BANGALORE 

Master of Business Laws (MBL) I year  
Supplementary 2011 Examination  ‐ Key Answer : CONTRACT LAW‐30.12.11 
 
PART A: 
Answer all Questions. Each Question carries 20 marks                                    [3x20=60 marks] 
Q1. Sachin Navelkar is football Player. He has been playing for Mass Union [MU], the best football 
club in India, for the last 3 years. While he was a fantastic attacking player, his dedication to the 
team  was  suspect,  and  very  often  he  had  failed  to  help  out  MU’s  defenders.  This  had  led 
several  football  critics,  including  Mickey  Thomas,  MU’s  manager  to  criticise  Sachin,  but  to  no 
avail.  
 
South Warriors [SW], is the richest football club. It wished to buy Sachin, and promised to pay 
him  double  the  wages  that  MU  are  currently  paying.  As  a  result,  Sachin  requests  MU  to 
terminate his contract with them, and  sell him to SW. There is a contract subsisting between 
MU and Sachin, under which he is bound to play for MU for the next 3 years. Hence, MU rightly 
refuses  to  sell  him  to  SW.  This  upsets  Sachin  greatly,  and  he  looks  for  some  way  out  of  the 
situation. He consults his legal advisors, who inform him that MU is perfectly entitled to refuse 
to  sell  him.  Sachin,  desperate  to  find  some  way  out  of  the  situation,  speaks  to  Mickey,  the 
Manager  of  MU,  asking  that  MU  should  raise  his  salary  to  the  level  promised  by  SW,  failing 
which he would refuse to play for MU. In addition, Sachin also promised that he would play a 
more active defensive role too, and would show more dedication to the team. MU has a fairly 
strong team, and Sachin was far from essential for the team plans. However, there were some 
crucial  games  coming  up,  and  Mickey  thought  that  it  would  be  safer  to  have  the  option  of 
Sachin, even if he was not essential. As a result, he reluctantly agreed to double Sachin’s salary.  
 
The  football  season  continued,  and  MU  reached  the  finals  of  the  Champions  League,  India’s 
biggest  club  football  competition.  However,  MU  lost  the  finals,  partly  due  to  a  very  poor 
performance by Sachin. Mickey was very upset with the team, and, in particular with Sachin. He 
refused to pay him the raised salary, insisting on paying only the salary contained in the original 
contract. Sachin was deeply offended, and decides to go to Court.   
 
Advise MU on the grounds: 
 That Mickey agreed to raise the salary of Sachin without his free will and consent, hence the 
raise is not binding upon MU; 
 That  Sachin  has  committed  material  breach  of  the  contract  by  not  giving  his  100% 
commitment in the games played by MU; 
 Whether Sachin with the help of South Warriors attempted to induce breach of contract; 
 Whether such a conduct would make Sachin liable to pay damages for breach of contract; 
 Whether an action for specific performance of contract could be brought against Sachin. 
 
Key Answer:   ‐ Essential of Offer and Acceptance 
 Consideration for variation in contract 
 Specific performance of contracts and exception to this remedy 
 Variation in contractual terms: Liability 
 Damages for Breach of Contract: Types of Damages 
 Liability for inducing breach of contract: Are such agreement against Public policy 
 Wayne Rooney case 
 
Q2.  Mr.Camfield  was  a  partner  in  a  motor  business  firm  named  Camfield  Associates.  The  partners 
requested the Bank of South India to provide their business with an overdraft facility of Rs 30 
lakh.  The  Bank  agreed,  provided  the  partners  executed  a  charge  over  their  houses.  Mr.  and 
Mrs. Camfield jointly owned their matrimonial home. Mrs Camfield, duly agreed to execute the 
charge but did so under the impression, as the result of an innocent misrepresentation by the 
husband,  that  the  maximum  liability  under  the  charge  would  be  Rs  15  lakh  only.  That 
misapprehension was not corrected by the Bank Officials who were advising her, even though 
the  effect  of  the  legal  charge  was  to  charge  her  beneficial  interest  in  the  house  with  an 
unlimited liability to meet the debts of the partnership, in which she had no financial interest. 
Later on, after the overdraft was sanctioned, due to recession in the automobile industry, the 
business  of  Camfield  failed  and  the  Bank  of  India  commenced  proceedings  against  the 
Camfields. Mrs.Camfields wants to avoid her liability as not being a partner in the partnership 
firm; she should not be made liable for the debts of the firm. Further the overdraft granted by 
the  Bank  was  utilised  for  the  business  of  the  firm  and  not  the  matrimonial  home  hence  Mrs. 
Camfield  cannot  be  made  liable  under  the  same  contract.  Further  Ms.  Camfield  wants  to  set 
aside  her  liability  under  the  grounds  of  undue  influence,  misrepresentation  and  lack  of  legal 
advise. Advise Mr and Mrs. Camfield.  
 
Key Answer:     ‐ Sec. 126 ICA 
 Rights of surety 
 Doctrine of Subrogation 
 Discharge of surety: by variance 
 Husband and wife: Jointly liable or under contract of Guarantee 
 Wife Undue Influence: Liability of a surety 
 CIBC Mortgages v Pitt 
 Barclays’s Bank case 
 
Q3.  Mr.  Clarke  carried  on  business  in  photographic  goods  at  his  Home.  He  later  on  started  a 
partnership  with  Miles,  also  a  photographer.  The  partnership  was  registered  on  1/2/04.    The 
partnership deed stated that both the partner shall share profits and loss in the ratio of 50:50. 
In 2006, the partners had disagreement and decided to dissolve the partnership. There was a 
major disagreement on the division of property of the firm. Miles claimed that the place [home 
of Mr. Clarke] was also partnership property and hence the same must also be divided amongst 
partners. Clarke claimed that the property had not be transferred as partnership property and 
hence  the  same  cannot  be  a  subject  matter  of  dispute  between  the  partners.  In  light  of  the 
above facts discuss the following issues under the Partnership Act, 1932: 
a. What constitute a partnership property? 
b. What are the rights of partners on dissolution? 
c. What is the difference between dissolution of firm and dissolution of partnership? 
d. Can Miles claim division of the property in question? 

Key Answer:  ‐ Partners property and Firm’s property  
 Profit and sharing of the same by the partners 
 Miles v Clark 
 Dissolution  of  firma  and  dissolution  of  partnership:  Without  court/With  the 
permission of the Court  
 Rights after dissolution 
 
 
 
 Part B. 
Answer any four questions. Each question carries 10 marks.                    [4x10=40 marks]  
 
Q1. With the help of case law, highlight the different ‘authority’ of an Agent 
Key Answer: ‐ Sec. 182, 188, ICA, 
 Customary Authority 
 Actual authority: Expressed or Implied 
 Apparent or ostensible authority 
 Turquand rule 
 Authority by virtue of a position held 
 Authority to Sub‐Delegate 

Q2. ‘Enforceability of E‐contract in India is not solely governed by the Indian Contract Act’. Justify the 
statement  
 
Key Answer: ‐ Basic principle of Contract as applicable to E‐Contract 
 Sec. 11‐13 of the IT Act 2000 
 Originator and Addressee 
 Case law/click wrap and shrink wrap  

Q3. Examine the difference between Gratuitous bailment and bailment for reward 
Key Answer: ‐ Sec. 148, Essential for Bailment 
 Case law on Gratuitous bailment 
 Duty to disclose faulty‐Liability as different between the two.  

Q4. Examine the general principles applicable to ‘standard form of contract’ 
Key Answer: ‐ Reasonable notice 
 Difference between contract and  receipt 
 Theory of fundamental breach 
 Strict construction 
 Rule of contra proferentem  

Q5. Evaluate the ground of ‘coercion’ for setting aside the obligations in a contract 
Key Answer: ‐ Sec. 16 ICA 
 Chikkammaamiraju case 
 Ranganayakamma case 
 Duress/Economic Duress 
 Remedies 
 
Q6. Examine the ‘doctrine of frustration’ as applicable under the Indian Contract Act 
Key Answer: ‐ Sec. 56 ICA 
 Krell v Henry  
 Taylor v Caldwell 
 Limitation to the doctrine 
 
******** 
 M.B.L.PART - I SUPPLEMENTARY EXAMINATION (DEC.) 2011
BANKING LAW & PRACTICE
KEY ANSWER

1. "The Central Bank is an institution charged with the responsibility of managing

the expansion and contraction of the volume of money in the interest of the general
public welfare" [R.P. Kent, Money and Banking, p.351] - Explain the statement in
the context of RBI.

 Brief explanation as to why ‘credit control’ is essential in any economy – vis-à-

vis Central Banking institution and some reference to the RBI
b. Quantitative Credit Control Methods
i. Bank Rate etc.,
c. Selective Credit Control Methods
i. Sec. 21, Banking Regulation Act, 1949
ii. Fixation of margin requirements of secured loans
iii. ‘Credit rationing’
iv. Direct action
v. Moral suasion
d. Other methods like rediscounting etc.,

2. Write short notes on the following:

a. Holder and holder in due course

i. ‘Holder’ is one who is
1. Entitled in his own name to the possession of the instrument; and
2. Have the right to receive or recover the amount due thereon from the parties thereto.
ii. Otherwise a ‘holder’ means –
1. The payee; or
2. The bearer; or
3. The endorsee of an instrument
iii. Reference to Sec. 8 of the NI Act;
1. Holder must have taken the instrument for value [consideration]
2. Must have obtained the instrument before its maturity
3. Instrument must be complete and regular on its face; and
4. Must have taken the instrument in good faith and without notice of any defect either in
the instrument of the title of the person negotiating it to him
iv. Holder in due course
1. Holder in due course is a person – who takes an instrument in “good-faith and for
value”
2. And he becomes the true owner of the instrument and is known technically as ‘holder
in due course
v. Reference to sec. 9 of NI Act.

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b. The legal nature of the demand draft

1. The demand draft is basically a bill of exchange

2. Wherein one banker (i.e., the banker who draws the bill) draws the draft upon
another instructing him to make a certain sum of money to the person named in
the draft.
3. However, by practice the demand draft is not being accepted by the paying
banker.

3. Write short notes on the following:

a. Marking of the cheques and its validity

 Marking of cheques is a process where the cheque is handed over to the banker
(upon whom the same is intended to be drawn) and he would mark the same.
 This is an indication that the same will be honored certainly, if presented for
payment
 ‘marking’ of cheque is very much popular in US and certain parts of Europe.
However, today in India is not in vogue.
 Can ‘marking’ of cheque be taken as ‘acceptance’ for payment by the banker and
will that change the ‘cheque’ into ‘bill of exchange’? is an interesting question
 The answer is NO.
 The practical aspects of the marking of cheque may also be explained.

b. Crossing of cheques.

 ‘Crossing’ is a feature which is unique to cheques and distinguishes cheques from

other negotiable instruments
 Crossing is a usage born of commercial practice
 The objective – give direction to the banker that, he is not to pay the cheque
across the counter but to pay it only to another banker
 Crossing of a cheque accords a protection or safeguards the interest of the drawer
 If wrongful person seeks payment – it can be traced back (as he has acted through
another banker)
 Explaining ‘general crossing’ and ‘special crossing’
 Also little bit of explanation as to whether the crossed cheque can be endorsed?

4. Who is paying banker and what are his obligations and protection available
under the law?

 The banker who is expected to make the payment on the instrument (i.e., cheque)
or simply the person on whom the cheque is drawn is known as paying banker
 he is protection under the following section
o Ss. 10, 85 and 89
 Simple terms he is protected as long as he makes payment in due course
 Explaining the payment due course

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5. Write short notes on the following:
a. Banking ombudsman scheme in India;

i. The scheme prepared and implemented by the RBI

1. First with the active assistance of all banks
ii. –Now (in a sense) entirely by itself
1. Legislative power to introduce and implement the scheme
2. Sec. 35A, Banking Regulation Act, 1949
iii. the present scheme came into force from January 1, 2006
iv. First introduced in 1995
v. Revamped in the year 2002
vi. Enlargement of the process in 2006
1. “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…”
vii. Amendment in the year 2007 (May)
viii. The Scheme (as updated from time to time) provides
1. a forum to bank customers to seek redressal of their most common
complaints against banks, including those relating to
2. credit cards,
3. services charges,
4. promises given by the sales agents of the banks, but not kept by the banks,
5. delays in delivery of bank services.
ix. 15 Banking Ombudsmen have been appointed
1. offices located mostly in the State Capitals
x. Coverage of the Banks –
1. All Scheduled Commercial Banks,
2. Regional Rural Banks and
3. Scheduled Primary Cooperative Banks
xi. Appointment, qualifications of the ombudsman and general procedure of resolving the
complaint.

b. Banker's duty to maintain secrecy of customer's accounts.

i. ‘banker is a privileged creditor’ – in some special sense the customer is also privileged
in some sense
ii. The banker is obligated to maintain the secrecy of the customers accounts
iii. ‘…the duty to maintain secrecy is an added obligation or an exception to the general
rule that the relationship between a banker and the customer is that of a debtor and
creditor…’
iv. May be it has woven in to the banking tradition from time immemorial
v. All employees and officers of the bank have to sign and submit a declaration of fidelity
and secrecy at the time of their joining service
vi. The Exceptions

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1. Where the disclosure is under compulsion of law;
2. Where there is a duty to the public to disclose;
3. Where the interests of the bank require disclosure; and
4. Where the disclosure is made with the express or implied consent of the customer
vii. Some specific reference to the disclosure under the Banking Regulation Act.

6. Examine the nature and validity of the following documents with reasons:
a. 'Pay Rameshan amount of Rs.5000, sixty days after the arrival of the ship Victory
at Mumbai'
 Not a valid instrument as there is condition attached.
b. 'I promise to pay on demand a sum of Rs.20,OOO at my convenience'
 Not a valid instrument as there is no certainty with regard to the payment
c. 'I promise to pay the bearer a sum of Rs.5,OOOon demand'
 Not a valid instrument again, as there is acceptance to make payment, but no
acknowledgment of debt
d. 'Rs.10000 balance due to you and I am indebted to pay on demand'
 Not a valid instrument as the sum specified is not certain.
e. 'I promise to pay Anand Rs.10,OOOand all fines according to rules' .
 Again a case where, there is no certainty of sum.

7. Write brief note on 'Debt Recovery Tribunals' in the background of Non-

Performing Assets.

 General explanation regarding the non performing assets

 Why NPAs are considered to be big challenge to entire banking sector.
 How strategies are hatched to reduce the NPAs in India
 Then focusing upon the DRTs

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 NATIONAL LAW SCHOOL OF INDIA UNIVERSITY, BANGALORE 
Master of Business Laws (MBL) I year  
2011 Supplementary Examination  ‐ Key Answer : Corporate Law‐01.01.2012 

I a) i) Companies limited by shares

Liability arises, when the Company is a going concern or in the event of Winding up. The
quantum limited by the nominal value of the shares and the premium, if any, agreed at the
time of allotment.

ii) Companies limited by Guarantee and having a share capital

The quantum limited by the Guarantee clause in the MOA,(Details see Section 13(3)).Not
liable only in respect of debts incurred by the company after the person concerned ceased
to be a member.

iii) Unlimited Companies having a share capital

The nature of the liability –the same as that of a member of a Guarantee Company. But
there is limitation on the quantum of liability.

I. b) Private Company

See Section 3(1) (iii)-

Further the name clause of the private Co. shall have the last component of the
Company’s name Private Ltd/Ltd wherever the Company is one limited by shares or
guarantee. Exception Section 25 Company violation of the requirements of Section 3 (1)
(iii) - The Company is treated as if it is a Public Co. (See Section 43).

I. c) See Section 4: Yardsticks employed:-

(1) ‘H’ controlling the majority votes of ‘S’.
(2) ‘H’ controlling he composition of the Board of directors of ‘S’.
(3) ‘S’ is a subsidiary of ‘H’ and also the holding Company of ‘S1’. ‘S1’ is also a
subsidiary of ‘H’ (Sub subsidiary)
- For the meaning of ‘controlling the Composition of ‘S’ and also for the meaning of
controlling the voting powers in ‘S’ see Section 4.

I. d) Refer section 16

MOA overrides the provisions of AOA in case of conflict between the two. But a
harmonious construction to be adopted. The task of the court shall be to validate the
provisions of these two documents. (If possible).

Table ‘A’ articles can be read as part of the articles of the Company:-
(a) In respect of matters which are not dealt with by Table A articles.

1
(b) Also those provisions of Table ‘A’ which are not inconsistent with the provisions of
Table A But the Articles of a Company may provide that Table A articles shall not apply
to the Company . In such a case Table ‘A’ articles have no application to the articles of
the Company. See section 28.

II a) Refer Sections 12 to 15; 33 & 34.

Before preparation of MOA, Approval of ROC shall be obtained for the name of the
Company: Form I A application with the required fee to be made to ROC for approval of
the name of the Company.
The MOA and AOA have to be subscribed by a minimum of 2 persons who shall
undertake to take a minimum of 1 share each. This is to be stated in the Memorandum.

II b) i) The Partnership firm can institute a suit against the company asking the latter to
change its name. (Tort of ‘Passing off’) and also claim damages.

II b) ii) Yes, they have to comply with the requirements of sections 21 and 23.

II c) The Argument of AP Pvt Ltd. is not valid. Change of name does not affect the
personality of the company. Nor does it affect its rights and liabilities. An application can
be made to the court for change of name of the defendant.

II d) See section 3 (1) (iii) (d) read with section 43 and 45. The company is to be treated
as a public Company with less than 7 members. Hence the members may incur personal
liability for the debts of the company.

III a) i) See Section 36.

The AOA dealing with membership rights and liabilities are contractual terms between
the company and members and members interse. But they are not contractual terms
between the company and outsiders and also between the company and members in
respect of matters which are not dealing with membership rights.

III a) ii) Restrictions on alteration of AOA

See Sections 31, 38 and 106

Also no alteration of the ‘AOA’ which are inconsistent with the provisions in the
memorandum.

III a) iii) No, All that he can do is to claim damages for breach of Contract if the
alteration affects his accrued rights.

III b)
(1) If the third party has not performed his obligations under the Contract he can plead
that the contract is a nullity and he is not bound to perform such a contractual obligation.

2
(2) If the contract is executed by him he cannot sue the company for the discharge of its
obligations under it. But he has certain equitable remedies available against the
Company.
(i) Recovery of Property based on title.
(ii) He can invoke the doctrines of tracing and following
(iii) In certain cases he can invoke the equitable rule of subrogation.
(iv) He may sue those agents of the Company who contracted with him for breach of
Implied warranty of authority provided the doctrine of constructive notice cannot be
invoked against him.

III c) This rule in most cases operate as an exception to Constructive notice. The latter
doctrine imparts knowledge of the contents of the public documents to persons who deal
with the company .If the public documents negatives or imposes conditions on the
authority of the agents of the company, the knowledge of the contents of those documents
will be implied to persons dealing with the company.
But in many cases the public document may not negative the authority. But it may confer
concerned authority to an agent or put limitations on his authority. The question in those
cases is whether the agent has complied with those conditions in the exercise of the
powers conferred on him. The doctrine of mis-management (Turquand rule) provides that
he can assume so and bind the company even though the transaction is unauthorized.

Exceptions to the rule

(1) The other party to the transaction has actual knowledge of the irregularity.
(2) ‘Put on enquiry’ cases. The circumstances are such that the person dealing with the
agent of the company ought to have suspected that the transaction is without the authority
of the Company.
(3) Forgery

III d) Section 542

‘Fraudulent trading’- Directors and others who are parties to the ‘fraudulent trading’ may
be liable to the company liquidator such amount as may be directed by the court. The
liability arises only in the event of insolvent winding up of the company. The liability
under the section is not to the creditor who suffered the loss. The amount realised goes to
the general funds.

IV a) See Section 59(2) and 63

Criminal liability of expert-Refer Section 63

Expert’s liability confined only to those statements made by him in writing pertaining to
his opinion as an expert. Further he must have consented to the inclusion of his statement
to the prospectus. For the Available defense see section 63 (2).

IV b) Remedies available against the Company

(i) Rescission-provided the investor has not expressly or impliedly ratified the allotment.

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(ii) Damages
(iii) Negligent Misstatement
Against the directors etc:
(1) Damages for Fraud
(2) Section 62

IV c)
i) No, they cannot do. The maximum period shall only be 20 years. See section 80 (5A)
ii) Issue valid- See section 120. Consent of general meeting not required unless AOA
provide. But Board resolution at board meeting necessary. See section 292.
iii) Yes, provided the requirement of Section 81(1) & (1A) are complied with. But special
resolution of general meeting required.
iv) Yes, the Authority from the shareholders through a special resolution required
(Section 293).

IV d) See Section 108

The Transferor ‘T’ may pass on title to his title to his transferee T1 by delivery of the
instrument of Transfer deed (without his name being entered therein) along with the share
certificate. This may be repeated by T1 and subsequent transferees during the currency of
the blank transfer. For the currency of the blank transfer See section 108 (1A).The
instrument of transfer shall be attested by the authorized signatory before any entry is
made in it. See section 108(1A).

V a) See Section 175 and Table A articles

If the AOA of the company does not contain a contrary provision the members personally
present will elect the chairman of the meeting. But See Table A of schedule I Reg 50 &
51
-The function of the chairman is conduct the business of the company in an orderly and
impartial way giving an opportunity to get all view points aired at the meeting.
As regards the power of government, it is a discretionary power of the chairman. But it is
not an arbitrary power. AOA may specify the cases when the chairman may adjourn the
meeting but that does not mean that he cannot exercise his inherent power of adjournment
in other cases: But he has to act impartially and bonafide.

V b)
i) See Section 173(1) (a) & (b)
ii) The members and legal representatives of deceased or insolvent members, Auditors
Section 172 (2)
iii) See Section 166 (1) and Section 209(3) & (4)
iv) See sections 170 and 176

The statutory right of a member to appoint a proxy to attend and vote at a general
meeting can be modified by the AOA of private company which is not a subsidiary of a
public company.

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V c)
Personal rights are those rights enjoyed by a member which are not amenable to majority
decision. E.g. Right to speak at a general meeting, right to vote at general meeting, right
to receive the dividend, right to move resolution.
Corporate membership rights are those rights enjoyed by a member, in respect of which
he is bound by the majority decision. This is the area where the majority rule prevails.

V d) Rule in Foss v. Harbottle

Applies essentially to corporate membership rights. In this area the decisions of the
majority properly arrived at will be binding on the company and all the members
including the dissenting members.
Exceptions
(1) Ultravires
(2) Fraud on the Minority
(3) Matters requiring qualified majority decided by special majority.

VI a) ‘No Conflict rule’ is an area dealing with the fiduciary duty of directors and others.
The rule envisages that directors and others shall not place themselves in such a position
that there would be a actual or possible conflict of their personal interest and duty
towards the company. The question here is not whether they have abused their position
but whether there is a chance of abuse of their position. This may arise in the following
situations:-
(1) Contract with the Company
(2) Doing business in competition with the Company
(3) Use of corporate opportunity
Leading case: Regal Hastings v. Gulliver

VI b) i)
Statutory Auditor

(1) Government Co. - The controller and Auditor General of India See section 619.
(2) Private Co. - Members in general meeting at the AGM
- Statutory Auditor’s tenure-From the conclusion of one AGM to the conclusion of the
next AGM.

VI b) ii)
Yes, by the general meeting-See section 224 (7).Previous approval of C.G required for
this.

VI c)
-See section 274
- Additional ground of disqualification’
See S. 274 (3) - Only private Cos which are not subsidiaries of public Cos can prescribe
additional grounds of disqualification.

5
VI d) i)

Declaration of solvency
See Section 488.

VI d) ii)
Contributories

Consists of present and past members of a company being wound up. Past members (B
List Contributories) liability arises only in case the amount due on the shares held by
them cannot be realised by the respective ‘A’ list contributories (persons who are the
members of the company at the commencement of winding up). Further if a person was
not a member of the company within a period of 1 year before the commencement of
winding up he cannot be treated as a ‘B’ list contributory.

VI d) iii)
Persons having the locus standi as a member to file a petition for winding up
See Section 439(4).

6
 NATIONAL LAW SCHOOL OF INDIA UNIVERSITY, BANGALORE 

Master of Business Laws (MBL) I year  

2011 Supplementary Examination  ‐ Key Answer : INDUSTRIAL RELATIONS LAW‐
02.01.2012 

Answer ANY SIX out of the EIGHT questions: (6 x 15 = 90 marks) 
 
1. 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 Unions 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.  
 
2. Explain the reasons for weakening of Trade Union Movement in India. 
 
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 
 
3.  Explain  the  pre‐requisites  for  effective  collective  bargaining.  Also  examine  as  to  what 
extent they are present in the Indian scenario. 
 
Key Answer   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. 
1 
 
4.  Examine  the  immunities  available  to  a  registered  Trade  Union,  with  the  help  of  case 
law. 
 
Key Answer: The immunities are available only to registered Trade Unions. Section 17 of the 
Trade  Union  confers  immunity  from  criminal  conspiracy  to  registered  Trade 
Union. Section 18 confers immunity from civil liability in respect of acts done 
in furtherance of a trade dispute. The immunities are confined to the objects 
of  the  Trade  Union  mentioned  in  Section  15  of  the  Trade  Union  Act.  Under 
Section 17 the very act of the workers going on strike is a breach of contract of 
employment.  According  to  the  Section  43  of  the  Indian  Penal  Code  anything 
which furnishes a ground for a civil action is illegal. So workers going on strike 
i.e. breach of contract of employment gives rise to civil action for damages is 
illegal as per Section43. 
 
Two or more workers committing such an illegal act is criminal conspiracy. The 
Trade Union Act provides immunity for such conspiracy as long as no offence 
is committed. Section 18 is to be explained: by the candidate. 
 
Case Law: 1) Federation of Western Indian Cine Employees Vs. Filmaya Pvt. Ltd 
                 2. Chrandrana Bros vs. K. Venkata Rao 
 
5. Analyse the definition of 'workman' in the Industrial Disputes Act, 1947with 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. 
 
6.  Explain  what  an  Industrial  dispute  is  and  also  when  an  individual  dispute  becomes 
industrial dispute. 
 
Key Answer: Industrial dispute definition has to be explained. An Industrial dispute can be 
raised by plurality of workers. What is the number of workers required to raise 
an industrial dispute, it should be substantial numbers of workers or a Trade 
Union in the organization. The explanation given to substantial number given 
by  the  Supreme  Court  must  be  explained.  The  term  any  person  used  in  the 
definition has to be explained, using the case law, Workmen of the Dimakuchi 
Estate Vs. Dimakuchi. Also they have to refer to the Standard Vaccum Refining 
Co. of India Vs. Workmen.  

Individual  dispute  deemed  as  Industrial  dispute,  1965  amendment  is  to  be 
explained.  In  case  of  individual  dispute  not  covered  by  deemed  industrial 

2 
 
 dispute,  the  individual  dispute  has  to  be  exposed  by  substantial  number  of 
fellow workers. 

7. 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. 
 
8.  Explain  the  definition  of  'Strike'  under  the  Industrial  Disputes  Act.  Also  explain  how 
Strikes are regulated under the Industrial Disputes Act. 
 
Key Answer: Explain the definition of strike as cessation of work.  It may be partial or total.  
It is a concerted action of the workmen.  Strikes may be legal or illegal.  The 
legal strikes are further classified into justified and unjustified strikes. 
 
Regulation of strikes‐refer to sections 22, 23 and 24 of the Industrial Disputes 
Act, with brief explanation. 
 
Write short notes on the following (4 x 2½=10marks) 
 
a) Funds of a registered trade union: general fund & political fund ‐ nature of contribution 
towards these funds ‐ objects for which these funds may be spent effect upon rights of the 
members not contributing to the political funds. 
 
b)  Unfair  labour  practices:  Refer  to  schedule  V  of  the  Industrial  Disputes  Act  1947; 
punishment for unfair labour practices; permission before prosecution. 
 
c)  Outsiders  as  office  bearers  of  a  registered  Trade  Union:  Section  22  of  the  Industrial 
Disputes ⅓ of the office bearers in organised sector;  50% of the officer bearers in the unorganised 
sector;  the  purpose behind having outsiders; Historical reasons; How the rules of the trade union 
must provide for this. 
 
d)  Difference  between  lay‐off  and  lock‐out:  Lay  off  is  in  respect  to  the  circumstances 
beyond the control of the employer, under circumstances mentioned in the definition of lay‐
off.  Laid  of employees are entitled for lay‐off compensation.  Lay off  under the Industrial 
Disputes Act is contemplated in the Industrial Establishments. 
Lock‐out in a weaken of collective bargaining, available to the employer.  It can be total or 
partial.    It  is  regulated  under  the  Industrial  Disputes  Indian  Act,  Sections  22,  23,  24.    Lock 
outs and be legal or illegal.  Legal lock‐outs can be classified as justified and unjustified. 

3 
 
 NATIONAL LAW SCHOOL OF INDIA UNIVERSITY, BANGALORE 
Master of Business Laws (MBL) I year  
Supplementary 2011 Examination  ‐ Key Answer : ENVIRONMENTAL LAW‐03.01.12 
 
 
PART ‐ A 
Answer ANY FOUR of the following:             (4 x 12 = 48) 
 
1. Examine the Powers of the Pollution Control Authorities. Add a note on reforming the 
system. 
 
Powers  of  the  Pollution  Control  Authorities:  Powers  of  granting  consent;  launching 
prosecutions;  issuing  orders  for  closure;  giving  instructions  to  other  authorities; 
inspection,  investigation,  sampling,  analysis  and  acting  on  reports  and  on  individual 
complaints. 
Reforming  the  system:  De‐politicisation;  capacity‐building;  incentivising  better 
compliance;  restructuring  administration  by  making  central  authorities  policy  makers, 
state functionaries as technical advisors and local authorities as implementers etc. 
 
2. Analyse  the  law  for  management  of  Municipal  Wastes  and  Hazardous  Wastes  in  the 
Indian system. 
 
Background ‐ Basel convention; Almitra H Patel case. 
Salient  features:  conceptualization;  Nodal  Agency;  Process  &  procedures:  segregation, 
handling, packing, transport & disposal: problems in relation to each one of these. 
 
3. Discuss the principles of 'polluter pays' and' precaution'. 
 
Polluter pays & precaution: Highlight the following for each:  
Describe the principle; its legal status under International Environmental Law and Indian 
Law; its application through case law. 
 
4. Discuss the Indian Law on the Protection & Management of Coastal Areas. 
 
 International Legal Development: Law of the Sea. 
 CRZ  notifications  and  Amendments:  Activities  permitted,  restricted,  prohibited; 
classification: CRZI, CRZ II, CRZ III & CRZ IV 
 Case law 
 Add a note on CMZ notification. 
 
5. Examine the law dealing with the Environmental Liability of Corporate Managers 
 
 Discuss  Sec.16  (offences  by  companies)  and  Sec.17  (offences  by  Govt. 
Departments) of E.P.A, 1986– Refer to case law. 
 
 
6. Discuss  the  Constitutional  concerns  and  the  judicial  pronouncements  relating  to 
environmental protection. 
 
Constitutional  Concerns:  Art.21;  Art.48A;  Art.51  A(8)  –  Discuss  (refer  to  Public  Trust 
Doctrine: M.C.Mehta Case). 
Judicial  Pronouncements:  Discuss  cases  that  have  evolved:  environmental  principles; 
provided better tools for implementation; involved issuance of administrative directions; 
facilitated accommodation of expert opinions; created institutions of governance etc. 
 
 
PART ‐ B 
7. Write Evaluatory Notes on:             (2 x 10 = 20) 
 
a) Rio de Janiero Summit on Environment & Development, 1992; 
 
Discuss the following: 
 Background Developments from 1972‐1992; 
 Achievements:  Rio‐deceleration;  Non‐binding  Forestry  principles;  Treaties  on 
Biodiversity  &  Climate  change;  Agenda  21;  Commission  on  Sustainable 
Development. 
 
b) United Nations Environment Programme. 
 
Its genesis; its contributions: treaty –making; capacity‐building; convening conferences 
and working on their follow‐up; its current status –vis‐à‐vis CSD, GEF, WTO, UNDP etc. 
 
 
 
8. Write short notes on the following:           (4 x 8 = 32) 
 
a) Environment Impact Assessment Law; 
 
Application  of  the  principles  of  precaution  and  sustainable  Development;  Discuss  & 
compare  1994  &  2006  notifications‐highlighting  the  problems  as  to  the  process  & 
results. 
 
b) Individual's  Right  to  Initiate  Legal  Proceedings  against  polluters  under  the  Pollution 
Control Laws; 
 
Discuss Sec.49 of Water Act and the limitations of the Right. 
 
c) Trail Smelter Arbitration; 
 
Application  of  the  principles  of  good  neighbourliness  and  liability  for  trans‐boundary 
harm – discuss the facts of the case and the Arbitral Award. 
 
d) Polluter Pays Principle. 
 
Discuss the concept, legal status of the principle and case law. 
 
*********