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Supplementary Law Material For CA Inter Nov 2023

The document discusses questions related to contracts under the Indian Contract Act, 1872 including indemnity contracts, guarantee contracts, bailment contracts, and pledge contracts. Multiple choice and short answer questions are provided related to key provisions around liability in these various contract types.

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0% found this document useful (0 votes)
46 views27 pages

Supplementary Law Material For CA Inter Nov 2023

The document discusses questions related to contracts under the Indian Contract Act, 1872 including indemnity contracts, guarantee contracts, bailment contracts, and pledge contracts. Multiple choice and short answer questions are provided related to key provisions around liability in these various contract types.

Uploaded by

N Aparna
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© © All Rights Reserved
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Supplementary Material to 4th Edition of Corporate & Other Laws

OTHER LAWS

INDIAN CONTRACT ACT, 1872 (SPECIAL CONTRACTS)


A. Indemnity Contracts
QUESTION 1 May 2023 MTP
X, a shareholder of a company lost his share certificate. He applied for the duplicate.
Company agreed to issue the same on the term that X will compensate the company
against the loss where any holder produces the original certificate. This is called:
(a) Contract of indemnity (b) Contract of Guarantee (c) Quasi Contract (d) Bailment
Answers:
1 a

B. Guarantee Contracts
QUESTION 1 May 2023 MTP
Masoom owns a residential property at Kailash Colony, Delhi. Masoom has given his
residential property on rent amounting to Rs 50,000 per month to Kamal. Pankaj
became the surety for payment of rent by Kamal. Subsequently, without Pankaj’s
consent, Kamal agreed to pay higher rent to Masoom. After a few months of this,
Kamal defaulted in paying the rent. Evaluate the position of Pankaj in this regard as
per the provisions of the Indian Contract Act, 1872
(Hints: Since, the variance made in the contract is without the surety’s consent in
the existing contract, as per the provision, surety is not liable on his guarantee after
this new arrangement. The reason for such a discharge is that the surety agreed to be
liable for a contract, which is no more there now, and he is not liable on the altered
contract because it is different from the contract made by him. Similar to question
on Page 7)

QUESTION 2 May 2023 MTP


Examine the validity of the following statements under the provisions of the Indian
Contract Act, 1872.
(i) Creditor should proceed legal action first against the Principal Debtor and later
against the surety.
(ii) A guarantee which extends to a single debt/ specific transaction is called continuing
Guarantee.
(Hints: Invalid, Invalid)

QUESTION 3 May 2023 MTP


Explain the following as per the provisions of the Indian Contract Act, 1872 (i) Specific
Guarantee (ii) General Guarantee.
(Hints: A guarantee which extends to a single debt/ specific transaction is called a
specific guarantee. A guarantee which extends to a series of transaction is called a
continuing guarantee or general guarantee)

QUESTION 4 May 2023 RTP


Mr. Salil purchased furniture of worth Rs 1,00,000 from Mr. Pooran on credit. Mr.
Raman entered in contract with Mr. Pooran for the guarantee of the payment by Mr.
Salil. On due date, Mr. Salil could not make the payment due to his financial crisis.
Mr. Pooran filed the suit against Mr. Raman for payment. Meanwhile father of Mr.
Salil paid Rs 20,000 to Mr. Pooran on behalf of his son. Mr. Raman, in ignorance of
above payment, paid Rs1,00,000 to Mr. Pooran as surety. Afterwards, when Mr.
Raman knew the facts, he asked Mr. Pooran for refund of Rs 20,000. Mr. Pooran
denied for refund with the words, that’s only Mr. Salil who can claim the amount of
Rs 20,000. Explain, with reference to Indian Contract Act 1872, whether Mr. Raman
(surety) can claim the refund of Rs 20,000 from Mr. Pooran?

CA Anu Shree Agrawal 1


CA Anu Shree Agrawal ~ M: +91 7708821751 ~ For updates, revision videos and notes:
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Supplementary Material to 4th Edition of Corporate & Other Laws
(Hints: The liability of Mr. Raman (surety) is co-extensive with that of Mr. Salil
(principal debtor). As the father of Mr. Salil made payment of Rs 20,000 on Salil’s
behalf, Mr. Raman is liable only for Rs 80,000 to Mr. Pooran (creditor). Mr. Raman
made the full payment without the knowledge of facts. Therefore, he can claim the
refund of Rs 20,000 from Mr. Pooran.)

QUESTION 5 May 2023 4 marks


'S' guarantees 'V' for the transactions to be done between 'V' & 'B' during the month
of March 2022. 'V' supplied goods of Rs 30000 on 1st March 2022 and of Rs 20000
on 3rd March 2022 to 'B'. On 5th March 2022, 'S' died in a road accident. On 10th
March 2022, being ignorant of the death of 'S', 'V' father supplied goods of Rs
40000. On default in payment by 'B' on due date, 'V' sued legal heirs of 'S' for
recovery of Rs 90000. Describe, whether legal heirs of 'S' are liable to pay Rs 90000
under the provisions of Indian Contract Act 1872.
What would be your answer, if the estate of 'S' is worth of Rs 45000 only?
(Hints: No. Surety and his estate are discharged for all future transactions after
Surety’s death, irrespective of whether the creditor was aware of his death or not.
Therefore, legal heirs will not be held liable for Rs 90000. They are liable for only Rs
50000. But, if the estate of ‘S’ was worth Rs 45000 only, the legal heirs will be
liable for Rs 45,000. Similar question on Page 6)

C. Bailment Contracts
QUESTION 1 May 2023 MTP
As per the provisions of the Indian Contract Act, 1872, the finder of lost goods:
(a) cannot sue and also cannot retain the goods so found
(b) can sue but cannot retain the goods so found
(c) cannot sue but retain the goods so found
(d) can sue and also retain the goods so found

QUESTION 2 May 2023 MTP


Prem found a Rado watch lying on the floor of Celebration Café. Prem tried to find
the owner of the watch but all his efforts went in vain. Prem got the watch repaired
from the showroom by paying Rs 9,500. Three days after Prem found the watch, he
came to know about the real owner of the watch, from the advertisement newspaper
stating the loss of a watch in Celebration Café, along with the reward of Rs 10,000
to the finder of the watch. Prem went to the owner to return the watch. Prem
demanded Rs 15,000 as he had paid Rs 9,500 for the repair of the watch. According
to the provision of the Indian Contract Act, 1872, choose the correct statement.
(a) Prem has a right to claim only the amount spent on repairing the watch.
(b) Prem has no right to claim the prize money.
(c) Prem can retain the watch till the owner pays him at least the prize money.
(d) The owner is not liable to pay anything to Prem. Rather, he can sue Prem for
stealing the watch.

QUESTION 3 May 2023 MTP


Which among the following statements is TRUE about the contract of Bailment?
(a) Hiring of bank locker is a contract of bailment
(b) Bailee has right of general lien
(c) Money deposited in fixed deposit with a bank is a contact of bailment
(d) Seizure of goods by custom authorities is bailment

Answers:
1 c
2 a
3 d
CA Anu Shree Agrawal 1
CA Anu Shree Agrawal ~ M: +91 7708821751 ~ For updates, revision videos and notes:
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Supplementary Material to 4th Edition of Corporate & Other Laws
QUESTION 4 May 2023 MTP
Examine whether the following constitute a contract of ‘Bailment’ under the provisions
of the Indian Contract Act, 1872:
(i) Golu parks his car at a parking lot, locks it, and keeps the keys with himself.
(ii) Seizure of goods by customs authorities.
(Hints: (i) not a bailment as possession is not transferred (ii) it is a bailment as
possession is transferred to customs authorities)

D. Pledge Contracts
QUESTION 1 May 2023 MTP
Rakshit borrowed a sum of Rs 50,000 from a Bank on the security of gold on
1.07.2022 under an agreement which contains a clause that the bank shall have a right
of particular lien on the gold pledged with it. Rakshit thereafter took an unsecured
loan of Rs 20,000 from the same bank on 1.08.2022 for three months. On
30.09.2022 he repaid entire secured loan of Rs 50,000 and requested the bank to
release the gold pledged with it. The Bank decided to continue the lien on the gold
until the unsecured loan is fully repaid by Rakshit. Decide whether the decision of the
Bank is valid within the provisions of the Indian Contract Act, 1872?
(Hints: The pledgee can exercise general lien only of it is specifically mentioned in the
contract. As it is not so specified in the given case, Bank’s decision to continue the
lien on the gold until the unsecured loan of Rs 20,000/- is repaid is not valid. Similar
question on Page 21)

QUESTION 2 May 2023 4 marks


It is the owner of the goods or any person authorised by him in that behalf who can
pledge the goods. But in order to facilitate mercantile transactions, the law has
recognised certain exceptions. Do you think bonafide pledge can be made by non-owners?
If yes, explain the circumstances with reference to provisions of the Indian Contract
Act 1872.
(Hints: Yes, bonafide pledge can be made by non-owners in some exceptional cases.
Refer Page 27)

E. Agency Contracts
QUESTION 1 May 2023 MTP
A substituted agent acts on behalf of …………
(a) Principal (b) Sub-agent (c) Agent (d) anyone, as decided by the agent only

QUESTION 2 May 2023 MTP


As per the provisions of the Indian Contract Act, 1872, a person employed to do any
act for another or to represent another in dealings with third person is called:
(a) Labour (b) Servant (c) Agent (d) Principal

Answers:
1 a
2 c

QUESTION 3 May 2023 MTP


Explain the following as per the provisions of the Indian Contract Act, 1872 (i) What
is the meaning of ‘Agent’ and ‘Principal’? (ii) Who can appoint an agent.
(Hints: Agent means a person employed to do any act for another or to represent
another in dealing with the third persons. Principal means a person for whom such act
is done or who is so represented. Any person who is major and of sound mind, may
appoint an agent)

CA Anu Shree Agrawal 1


CA Anu Shree Agrawal ~ M: +91 7708821751 ~ For updates, revision videos and notes:
TELEGRAM CHANNEL: https://t.me/caanushreeagrawal | INSTAGRAM: anushreeagrawal4
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Supplementary Material to 4th Edition of Corporate & Other Laws
QUESTION 4 May 2023 4 marks
Akashia Steels is a famous manufacturer of steel products. Proprietor of Akashia Steels,
Mr. S.K. Jain appointed Mr. Satish as his agent. Mr. Satish is interested with the
work of recovering money from various traders to whom from sells its products. Satish
has earned commission of Rs 1,15,000 for his work. He recovered money from clients
on behalf of Akashia Steels. During a particular month he collects Rs 4,00,000 but
deposited in the firm's account only Rs 2,85,000 after detecting his commission.
Examine with reference to relevant provisions of the Indian Contract Act 1872 whether
act of Mr Satish is valid?
(Hints: Yes. Agent is allowed to deduct his remuneration and remit the balance to the
principal)

NEGOTIABLE INSTRUMENTS ACT, 1881


QUESTION 1 May 2023 MTP, RTP
Which among the following will not be considered as a “Foreign Instrument” under the
provisions of the Negotiable Instruments Act, 1881?
(a) A bill drawn on a person residing outside India but payable in India or outside India
(b) A bill drawn on a person resident outside India but payable outside India
(c) A bill drawn on a person residing outside India but payable in India
(d) A bill drawn on a person resident in India but payable outside India

QUESTION 2 May 2023 MTP


An instrument which is vague and cannot be clearly identified either as a bill of
exchange, or as a promissory note……..
(a) is called an ambiguous instrument (b) can be classified only as a
promissory note
(c) can be classified only as a bill of exchange (d) is categorised as invalid instrument

QUESTION 3 May 2023 MTP


The Negotiable Instruments Act, 1881, extends to:
(a) Only to capital cities of States of India
(b) The whole of India except Union territories
(c) The whole of India except to the state of Jammu and Kashmir
(d) The whole of India

QUESTION 4 May 2023 MTP


When the day on which a promissory note or bill of exchange is at maturity is a public
holiday, the instrument shall be deemed to be due:
(a) On the same day (b) On the next preceding business day
(c) On the next business day (d) On the next succeeding business day

QUESTION 5 May 2023 MTP


When a promissory note or bill of exchange are payable, in which no time for payment
is specified:
(a) They are payable within 3 months (b) They are payable within 6 months
(c) They are payable on demand (d) They are payable within a
reasonable time

Answers:
1 d
2 a
3 d
4 b
5 c

CA Anu Shree Agrawal 1


CA Anu Shree Agrawal ~ M: +91 7708821751 ~ For updates, revision videos and notes:
TELEGRAM CHANNEL: https://t.me/caanushreeagrawal | INSTAGRAM: anushreeagrawal4
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Supplementary Material to 4th Edition of Corporate & Other Laws
QUESTION 6 May 2023 MTP
On a Bill of Exchange for Rs 1 lakh, X’s acceptance to the Bill is forged. ‘A’ takes the
Bill from his customer for value and in good faith before the Bill becomes payable.
State with reasons whether ‘A’ can be considered as a ‘Holder in due course’ and
whether he (A) can receive the amount of the Bill from ‘X’. Answer as per the
provisions of the Negotiable Instruments Act, 1881.
(Hints: A is HIDC. But, A cannot recover any amount on the bill as there is forgery.
Forgery amounts to nullity. All parties, including HIDC will have a bad title)

QUESTION 7 May 2023 MTP


What are the parties to promissory note and a bill of exchange
(Hints: PN: Maker, Payee. BoEx: Drawer, drawee, payee)

QUESTION 8 May 2023 MTP


A promissory note was made without mentioning any time for payment. The holder
added the words ‘on demand’ on the face of the instrument. Whether this may be
treated as material alteration in the instrument? Give answer referring to the provisions
of the Negotiable Instruments Act, 1881.
(Hints: No. If time of payment is not mentioned on a PN, it implies that the PN is
payable on demand. Hence, adding these words does not alter the effect of the
instrument. Similar question on Page 84)

QUESTION 9 May 2023 MTP


Calculate the date of maturity of bill of exchange drawn on 1.6.2022, payable 120
days after considering the relevant provisions of the Negotiable Instruments Act, 1881
(Hints: 29th Sept + 3 days of grace = 2nd Oct which is a public holiday. Therefore the
bill will fall due on 1st Oct (preceding business day)

QUESTION 10 May 2023 MTP


Give three example when the alterations to an instrument do not affect the liabilities
of parties thereto.
(Hints: If the alteration is unintentional and due to pure accident, alteration made to
correct a clerical error or a mistake, Alteration made to carry out common intention
of parties, alteration made before issue of negotiable Instrument, alteration which is
not material, etc)

QUESTION 11 May 2023 MTP


'A' draws a cheque for Rs 5,000 in favour of 'B'. 'A' had sufficient funds in his bank
account to meet it, when the cheque ought to be presented in the bank. The bank
fails before the cheque is presented. 'B' wants to claim it from 'A'. Decide, whether
'A' is liable as per the Negotiable Instruments Act, 1881.
(Hints: When the cheque ought to be presented, ‘A’ had sufficient funds at the bank
to meet it. The bank failed before the cheque was presented. Thus, the drawer (‘A’)
is discharged, but the holder (‘B’) can prove against the bank for the amount of the
cheque. Similar question on Page 82)

QUESTION 12 May 2023 RTP


A bill of exchange is drawn payable to ‘Amir’ or order. ‘Amir’ endorses it to ‘Rani’,
‘Rani’ to ‘Kajol’, ‘Kajol’ to ‘Sharukh’, ‘Sharukh’ to ‘Madhuri’ and ‘Madhuri’ to ‘Amir’.
State with reasons under the provisions of the Negotiable Instrument Act, 1881
whether ‘Amir’ can recover the amount of the bill from ‘Rani’, ‘Kajol’, ‘Sharukh’ and
‘Madhuri’, if he has originally endorsed the bill to ‘Rani’ by adding the words ‘Sans
Recourse’.

CA Anu Shree Agrawal 1


CA Anu Shree Agrawal ~ M: +91 7708821751 ~ For updates, revision videos and notes:
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Supplementary Material to 4th Edition of Corporate & Other Laws
(Hints: As ‘Amir’s original endorsement is ‘sans recourse’ and therefore, he is not liable
to ‘Rani’, ‘Kajol’, ‘Sharukh’ and ‘Madhuri’. But if the bill is negotiated back to ‘Amir’,
all of them are liable to him and he can recover the amount from all or any of them.)

QUESTION 13 May 2023 3 marks


'A' drew a cheque for Rs 20,000 payable to 'B' and delivered it to him. 'B' endorsed
the cheque in favour of 'R' but kept it in his table drawer. Subsequently, 'B' died, and
check was found by 'R' in 'B's table drawer. 'R' filed the suit for the recovery of
cheque. Whether 'R' can recover cheque under the provisions of the Negotiable
Instrument Act 1881?
(Hints: No. Cheque was endorsed properly but not delivered to endorsee ‘R’. Therefore,
‘R’ is not eligible to claim the payment of cheque. Similar question on Page 73)

QUESTION 14 May 2023 3 marks


Mr X draws a check in favour of Mr R for payment of his outstanding dues of Rs
5,00,000 on 26 July 2022 with date of 1 August 2022. At the time of issuing
cheque, he was having sufficient balance in his account, but on 29 July 2022 he made
payment for his taxes, now his bank account is left with only Rs 4,50,000. So Mr X
requested Mr R not to present the cheque for payment, but he did not accept his
request. So Mr X instructed the bank who stopped payment of cheque issued for dated
1 August 2022 in favour of Mr R.
Decide under the provisions of the Negotiable Instruments Act 1881 whether the said
acts of Mr X constitute and offence?
(Hints: Yes. Request of stop payment (countermanding payment) constitutes an
offence under the provisions of S. 138 of Negotiable Instruments Act, 1881. Similar
question on Page 91)

QUESTION 15 May 2023 4 marks


Discuss with reasons whether the following persons can be called as a holder under the
Negotiable Instruments Act 1881:
(i) X receives a promissory note drawn by his father by wave of gift
(ii) A received a cheque for full and final settlement of his dues from his client but,
he is prohibited by a court order from receiving the amount of the cheque.
(iii) B, agent of C, is entrusted with an instrument without endorsement by C, who
is the payee.
(iv) P works in a bank. He steals a blank cheque of A and forges A's signature.
(Hints: Holder, Not a holder, Not a holder, Not a holder. Similar question on Page
62)

GENERAL CLAUSES ACT, 1897

QUESTION 1 May 2023 MTP


A clause that begins with the words ‘Notwithstanding anything contained’ is called:
(a) An obstacle clause (b) A non- obstante clause
(c) An objectionable clause (d) A superior clause

QUESTION 2 May 2023 MTP


In all Central Acts and Regulations, unless there is anything repugnant in the subject
or context, words importing the masculine gender shall be taken:
(a) To exclude females (b) To exclude girl child
(c) To include females (d) To exclude boy child

QUESTION 3 May 2023 MTP


Calendar year starts from:
(a) January (b) April (c) June (d) September
CA Anu Shree Agrawal 1
CA Anu Shree Agrawal ~ M: +91 7708821751 ~ For updates, revision videos and notes:
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Answers:
1 b
2 c
3 a

QUESTION 4 May 2023 MTP


Yellow and Pink had a long dispute regarding the ownership of a land for which a legal
suit was pending in the court. The court fixed the date of hearing on 29.04.2022,
which was announced to be a holiday subsequently by the Government. What will be
the computation of time of the hearing in this case under the General Clauses Act,
1897?
(Hints: The hearing shall happen on the next day afterwards on which the Court is
open. Similar question on Page 104)

QUESTION 5 May 2023 MTP


Explain the following in context of use of definitional sections in Interpretation of
Statutes: (i) Definitions subject to a contrary context (ii) Ambiguous definitions
(Hints: Refer meaning on Page 96 and 97)

QUESTION 6 May 2023 MTP


The Income Tax Act, 1961 provides that the gratuity paid by the government to its
employees is fully exempt from tax. You are required to explain the scope of the term
'government' and clarify whether the exemption from gratuity income will be available
to the State Government Employees? Give your answer in accordance with the
provisions of the General Clauses Act, 1897
(Hints: Yes. Similar question on Page 100)

QUESTION 7 May 2023 MTP


"The act done negligently shall be deemed to be done in good faith." Comment with
the help of the provisions of the General Clauses Act, 1897.
(Hints: According to the General Clauses Act, 1897, a thing shall be deemed to be
done in “good faith” where it is in fact done honestly, whether it is done negligently
or not.
Therefore, the Act considers the honesty in doing the Act as a primary test to
constitute the thing done in good faith. The act done honestly but with negligence
may also be termed as done in good faith as per the General Clauses Act, 1897)

QUESTION 8 May 2023 MTP


Examine the validity of the following statements with reference to the General Clauses
Act, 1897: (i) Insurance Policies covering immovable property have been held to be
immovable property. (ii) The word "bullocks" could be interpreted to include "cows"
(Hints: Not Valid, Not Valid. Similar question on Page 101 and Page 103)

QUESTION 9 May 2023 RTP


M owned a land with fifty tamarind trees. He sold his land and the timber (obtained
after cutting the fifty trees) to N. M wants to know whether the sale of timber
tantamount to sale of immovable property. Advise him with reference to provisions of
the General Clauses Act, 1897.
(Hints: Land is immovable property; however, timber cannot be immovable property
since the same are not attached to the earth.)

QUESTION 10 May 2023 4 marks


Whenever an act is repealed, it must be considered as if it had never existed. Comment
and explain the effect of repeal under the General Clauses Act, 1897.
(Hints: Refer Page 102)

CA Anu Shree Agrawal 1


CA Anu Shree Agrawal ~ M: +91 7708821751 ~ For updates, revision videos and notes:
TELEGRAM CHANNEL: https://t.me/caanushreeagrawal | INSTAGRAM: anushreeagrawal4
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Supplementary Material to 4th Edition of Corporate & Other Laws
QUESTION 11 May 2023 3 marks
No person shall be prosecuted and punished for the same offence more than once.
Explain in the light of provisions of Section 26 of the General Clauses Act, 1897.
(Hints: The given statement is correct. If an act/ omission constitutes an offence
under two or more enactments, then the offender shall be liable to be punished under
any of those enactments, but shall not be punished twice for the same offence)

INTERPRETATION OF STATUTES, DEEDS AND DOCUMENTS


QUESTION 1 May 2023 MTP
As per Rule of Literal Construction, Technical words are to understood in:
(a) Normal sense (b) Ordinary sense (c) Technical sense (d) Legal sense

QUESTION 2 May 2023 MTP


Pick the odd one out of the following aids to interpretation—
(a) Preamble (b) Marginal Notes (c) Proviso (d) Usage

QUESTION 3 May 2023 MTP


Which among the following is an External Aid to interpretation:
(a) Illustrations (b) Dictionary (c) Proviso clause (d) Title

QUESTION 4 May 2023 MTP


Doctrine of Mischief Rule was given under:
(a) Foss vs. Harbottle (b) Thomson vs. Clan Morris
(c) Foster vs. DiphwysCasson (d) Heydon’s Case

QUESTION 5 May 2023 MTP


………………. means that when two or more words that are susceptible of analogous
meaning, are coupled together they are understood to be used in their cognate sense.
(a) Noscitur a Sociis (b) Contemporanea Expositio
(c) prima facie (d) absoluta sententia expositore non indiget

QUESTION 6 May 2023 RTP


______________ is the cardinal rule of construction that words, sentences and phrases
of a statute should be read in their ordinary, natural and grammatical meaning so that
they may have effect in their widest amplitude.
(a) Rule of Literal Construction (b) Rule of Harmonious Construction
(c) Rule of Beneficial Construction (d) Rule of Exceptional Construction

Answers:
1 c
2 d
3 b
4 d
5 a
6 a

QUESTION 7 May 2023 MTP


Viraj, a director of the company, not being personally concerned or interested, financially
or otherwise, in a matter of a proposed motion placed before the Board Meeting, did
not disclose his interest although he has knowledge that his sister is interested in that
proposal. He res trains from making any disclosure of his interest on the presumption
that he is not required by law to disclose any interest as he is not personally interested
or concerned in the proposal. He made his presumption relying on the 'Rule of Literal
Construction'. Explaining the scope of interpretation under this rule in the given
situation, decide whether the decision of Viraj is correct?
CA Anu Shree Agrawal 1
CA Anu Shree Agrawal ~ M: +91 7708821751 ~ For updates, revision videos and notes:
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(Hints: His decision is incorrect. The rule should be interpreted in a broader sense. A
restricted narrow interpretation would defeat the purpose of the rule. Full and frank
disclosure should be made, also when his sister is concerned in any contract or matter.
Shareholders should be informed and all material facts should be disclosed to them, so
that they can take a decision on the contract or matter. Similar to question on Page
110)

QUESTION 8 May 2023 MTP


Does an explanation added to a section widen the ambit of a section?
(Hints: Something may be added to or something may be excluded from the main
provision by insertion of an explanation. But the explanation should not be construed
to widen the ambit of the section)

QUESTION 9 May 2023 3 marks, MTP, RTP


When can the Preamble be used as an aid to interpretation of a statute?
(Hints: Refer Page 95)

QUESTION 10 May 2023 3 marks


Explain the doctrine of Contemporanea Expositio.
(Hints: Refer Page 115)

COMPANIES ACT, 2013

BASICS, KINDS OF COMPANIES


QUESTION 1 May 2023 MTP
“Associate company”, in relation to another company, means a company in which that
other company has a significant influence, but which is not a subsidiary company of the
company having such influence and includes a joint venture company. Here, the words
‘significant influence’ means:
(a) Control of at least 10% of total voting power
(b) Control of at least 15% of total voting power
(c) Control of at least 20% of total voting power
(d) Control of at least 25% of total voting power

QUESTION 2 May 2023 MTP


Today, it’s May 2023. Mr. Nilanjan Chattopadhyay a 24 years old Indian youngster,
who returned back to India in January month of 2023 after completing his education
in bio-nutrient and willing to form an OPC; but not sure about the requirements or
pre-conditions regarding eligibility. He read some articles on provisions related to OPC
and concluded;
(i) OPC can be formed by Indian Citizen only (ii) He can’t form OPC because in
immediate previous year he was not resident in India Choose the correct option:
(a) Both the conclusions are valid (b) None of the conclusion is valid
(c) First conclusion is invalid (d) Second conclusion is invalid

Answers:
1 c
2 d

QUESTION 3 May 2023 MTP


Virjesh Limited is a company in which Hrishkesh Limited is holding 60% of its paid up
share capital. One of the shareholders of Hrishkesh Limited made a charitable trust
and donated his 10% shares in Hrishkesh Limited and Rs 50 crores to the trust. He
appoints Virjesh Limited as the trustee. All the assets of the trust are held in the

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name of Virjesh Limited. Can a subsidiary company hold shares in its holding company
in this way?
(Hints: Virjesh Ltd (S Co) holds shares in Hrishkesh Ltd (H Co), but only in the
capacity of a trustee. Hence, this is not a violation of the law. Similar to example on
Page 133)

QUESTION 4 May 2023 5 marks


H Ltd is the holding company of S Pvt Ltd. As per the last profit and loss account
for the year ended 31st March 2022 of S Pvt Ltd, its turnover was Rs 1.80 crore,
and paid up share capital was Rs 80 lacs. The board of directors wants to avail the
status of a small company. The company secretary of the company advised the directors
that the company cannot be categorised as a small company. In the light of the above
facts and in accordance with the provisions of the Companies Act 2013 you are required
to examine whether the contention of practicing company secretary is correct.
(Hints: As S Pvt Ltd is a subsidiary of a Public Company, it is deemed to be a Public
Company. Therefore, it cannot be categorised as a Small Company)

INCORPORATION
QUESTION 1 May 2023 MTP
Mr. Ram along with his brothers got registered a company in the state of Telangana
by furnishing false information knowingly. What action may be taken against the
company and its promoters under the provisions of the companies act, 2013?
(Hints: Tribunal may on an application made to it, on being satisfied that the situation
so warrants:
(a) pass orders for regulation of the management of the company, or
(b) direct that liability of the members shall be unlimited, or
(c) direct removal of the name of the company from the register of companies, or
(d) pass an order for the winding up of the company, or
(e) pass such other orders as it may deem fit.
Also the promoters, first directors and persons making declaration at the time of
incorporation shall each be liable u/s 447.)

MOA AND AOA


QUESTION 1 May 2023 MTP
In case of an application for reservation of name or for change of its name by an
existing company, the Registrar may reserve the name for a period of ……………. from
the date of approval
(a) 90 days (b) 60 days (c) 30 days (d) 20 days

Answers:
1 b

QUESTION 2 May 2023 MTP


Examine the validity of the following different decisions/proposals regarding change of
office by A Limited under the provisions of the Companies Act, 2013:
(i) The Registered office is shifted from Thane (Local Limit of Thane District) to
Dadar (Local limit of Mumbai District), both places falling within the jurisdiction of
the Registrar of Mumbai, by passing a special resolution but without obtaining the
approval of the Regional Director.
(ii) The registered office situated in certain place of a city is proposed to be shifted
to another place within the local limits of the same city under the authority of Board
Resolution.
(Hints: Valid, Valid. Similar question on Page 156)

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QUESTION 3 May 2023 RTP
Aman an engineer has started a new company with the name of Nuts and Bolts Private
Limited. He got registered a company with the same name. However, Nuts and Bolts
is a registered trademark. After 5 years when the owner of trademark came to know
about the same, it filed an application with relevant authority. Can the company be
compelled to change its name by the owner of trademark? Can the owner of registered
trademark request the company and then company change its name at its discretion?
(Hints: In the given case, owner of registered trade- mark is filing objection after 5
years of registration of company with a wrong name. While it should have filed the
same within 3 years. Therefore, the company cannot be compelled to change its name.
Company can anytime change its name by passing SR and taking CG approval. Therefore,
if owner of registered trademark requests the company for change of its name and the
company accepts the same then it can change its name voluntarily by following the
above provisions. Similar question on Page 159)

PROSPECTUS
QUESTION 1 May 2023 MTP
Which of the following statement is contrary to the provisions of the Companies Act,
2013?
(a) A private company can make a private placement of its securities.
(b) The company has to pass a special resolution for private placement.
(c) Minimum offer per person should have Market Value of Rs 20,000.
(d) A public company can make a private placement of its securities.

Answers:
1 c

QUESTION 2 May 2023 MTP


Bheem Ltd. issued 1,00,000 equity shares of Rs 100 each at par to the public by
issuing a prospectus. The prospectus discloses the minimum subscription amount of Rs
15,00,000 required to be received on application of shares and share application money
shall be payable at Rs 20 per share. The prospectus further reveals that Bheem Ltd.
has applied for listing of shares in 3 recognized stock exchanges of which 1 application
has been rejected. The issue was fully subscribed and Bheem Ltd. received an amount
of Rs 20,00,000 on share application. Bheem Ltd., then proceeded for allotment of
shares. Examine the three disclosures in the above case study which are the deciding
factors in an allotment of shares and the consequences for violation, if any under the
provisions of the Companies Act, 2013.
(Hints: Since one of the three recognized stock exchanges, where the company has
applied for enlisting, has rejected the application and the company has proceeded with
making the offer of shares, it has violated the provisions of Companies Act, 2013. This
shall be deemed to be irregular allotment of shares. Bheem Ltd. shall refund the
application money to the applicants)

QUESTION 3 May 2023 5 marks


MBL Pharmaceutical Limited is committed to provide quality medicines at an affordable
cost through relentless pursuit of excellence in its operations, product quality,
documentation and services. The company is now focusing on Oncology therapeutics and
other generics with a vision to be a global leader in oncology. The prospectus issued by
the company contained some important extracts of the experts report on research by
oncology department. The report was found untrue. Mr Diwakar purchased the shares
of MBL Pharmaceutical Limited on the basis of the experts report published in the
prospectus. Will Mr Diwakar have any remedy against the company? State also the
circumstance where the expert is not liable under the Companies Act 2013.

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(Hints: If Mr Diwakar has suffered a loss because of subscribing to such shares, then,
he can claim remedy u/s 35, i.e. Civil Liability. For expert’s liability refer similar
question on Page 179)

SHARE CAPITAL
QUESTION 1 May 2023 MTP
Shilpi Developers India Limited owed to Sunil Rs 10,000. On becoming this debt
payable, the company offered Sunil 100 shares of Rs 100 each in full settlement of
the debt. The said shares were allotted to Sunil as fully paid-up in lieu of his debt.
Examine the validity of this allotment in the light of the provisions of the Companies
Act, 2013
(Hints: If a company proposes to issue shares for a consideration other than cash, it
requires a special resolution. Price of such shares shall be determined by the valuation
report of a registered valuer. Upon fulfilment of these conditions, the issue will be
valid. Similar question on Page 199)

QUESTION 2 May 2023 MTP


State the purposes for which the securities premium account can be utilized?
Hints: Issue of bonus shares, to write off preliminary expenses, to write off expenses
on issue of shares/ debentures, to provide for premium payable on redemption of
preference shares/ debentures of the company, for buy back of shares)

QUESTION 3 May 2023 MTP


Bhuj Cement Limited is engaged in the manufacture of different types of cements and
has got a good brand value. Over the years, it has built a good reputation and its
Balance Sheet as at March 31, 2023 showed the following position:
1. Authorized Share Capital (25,00,000 equity shares of Rs 10/- each) Rs
2,50,00,000
2. Issued, subscribed and paid-up Share Capital (10,00,000 equity shares of Rs 10/-
each, fully paid-up) Rs 1,00,00,000
3. Free Reserves Rs 3,00,00,000
The Board of Directors are proposing to declare a bonus issue of 1 share for every 2
shares held by the existing shareholders. The Board wants to know the conditions and
the manner of issuing bonus shares under the provisions of the Companies Act, 2013.
(Hints: For the conditions and manner for issuing bonus shares, refer Page 200. For
the issue of bonus shares Bhuj Cement Limited will require reserves of Rs 50,00,000,
which is readily available with the company. Hence, company may proceed with the
proposed bonus issue)

QUESTION 4 May 2023 6 marks


Innovative Limited, a Startup by a few qualified professionals, which was incorporated
in 2014. The company is booming and favouring the younger generation to work. The
capital structure of the company is as follows
Particulars INR (in crores)
Authorised share capital 100,00,000 equity shares Rs 10 each 10.00
Issued, subscribed and paid up share capital 50,00,000 equity 5.00
shares of Rs 10 each
Share premium 1.00
General Reserve 3.52
Profit & Loss Account 1.58
The company decided to issue 30% sweat equity shares to a class of directors and
permanent employees to keep them motivated and partner in growth. Lock-in period
for sweat equity shares will be 5 years. For this purpose, a resolution in General
Meeting of company was passed in this manner:

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“The resolution specifies 15 lacs sweat equity shares, current market price Rs 25 per
share with a consideration of Rs 5 per share to be issued to a class of directors and
employees”
The company seeks your advice with reference to the provision of issue of sweat equity
shares under the Companies Act 2013.
(i) Whether size of issue of sweat equity shares was appropriate?
(ii) Whether lock-in period was justifiable?
(Hints: (i) Company is a start-up. Size of issue (30%) does not exceed 50% of paid
up equity share capital. (ii) Lock-in period was not justified. Lock-in period prescribed
by the law is 3 years. Similar question on Page 196)

QUESTION 5 May 2023 5 marks


The board of directors are proposing to declared a bonus issue of one share for every
two shares held by the existing shareholders.
The balance sheet of Frontline Limited show the following positions as at 31st March
2022:
(i) Authorised Share Capital (50 lacs equity shares of Rs 10 each) Rs 5 crores
(ii) Issued, Subscribed and Paid-up share capital (20 lacs equity shares of Rs 10 each)
Rs 2 crores
(iii) Free Reserves Rs 50 lacs
(iv) Securities Premium Account Rs 25 lacs
(v) Capital Redemption Reserve Rs 25 lacs
The board wants to know the conditions of issuing bone shares under the provisions of
the Companies Act 2013. Also explain whether the company may proceed for a bonus
issue.
(Hints: For the conditions and manner for issuing bonus shares, refer Page 200. For
the issue of bonus shares Bhuj Cement Limited will require reserves of Rs 1 crore.
Reserves available = 50 lacs + 25 lacs + 25 lacs = Rs 100 lacs. Hence, company can
proceed with the proposed bonus issue)

DEPOSITS
QUESTION 1 May 2023 MTP
Every company shall pay a penal rate of interest of ----------------- per annum for
the overdue period in case of deposits, whether secured or unsecured, matured and
claimed but remaining unpaid:
(a) 9% (b) 14% (c) 18% (d) 24%

QUESTION 2 May 2023 MTP


Prem Limited decides to raise deposits of Rs 20.00 lacs from its members. However,
it proposes to secure such deposits partially by offering a security worth Rs 15.00
lacs. Which of the following options best describe such deposits:
(a) Fully secured deposits (except a small portion) (b) Unsecured deposits
(c) Partially secured deposits (d) These cannot be classified as
deposits

QUESTION 3 May 2023 MTP


As per the provisions of the Companies Act, 2013 and relevant rules thereunder, an
eligible company is not permitted to accept from public or renew the same deposits
(whether secured or unsecured) which is repayable on demand or in less than
______________ months. Further, the maximum period of acceptance of deposit cannot
exceed ________________ months. But, for the purpose of meeting any of its short -
term requirements of funds, a company may accept or renew deposits for repayment
earlier than ______________ months subject to certain conditions.
(a) six, thirty six, six (b) three, twenty four, three
(c) six, sixty, six (d)three, sixty, six
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Answers:
1 c
2 b
3 a

QUESTION 4 May 2023 MTP


Enumerate the amounts which when received by a company in the ordinary course of
business are not to be considered as deposits (any 3)
(Hints: Refer page 223)

QUESTION 5 May 2023 RTP


Answer the following citing relevant provisions of the Companies Act, 2013:
(a) Wire Electricals Limited having paid-up capital of Rs 1.00 crore availed a term loan
of Rs 10,00,000 from ABC Bank Limited to purchase electrical items. Mr. Taar, one
of the directors of the company, is of the opinion that it shall be considered as
‘deposit’. Is his contention correct?
(b) A Government Company, which is eligible to accept deposits under Section 76 of
the Companies Act, 2013, cannot accept deposits from public exceeding 25% of the
aggregate of its paid-up capital, free reserves and security premium account. Is this
correct?
(Hints: Incorrect, Incorrect)

QUESTION 6 May 2023 5 marks


Mr Raj is an employee of DSP Trading Pvt Ltd. As per his contract of employment,
his annual salary is Rs 5 lacs. Mr Raj paid to the company Rs 5,30,000 in the nature
of non-interest bearing security deposit. Referring to the provisions of the Companies
Act 2013 define deposit and decide whether this amount received from Mr Raj will be
considered as deposit?
(Hints: It is a deposit as the amount exceeds the employee’s annual salary)

CHARGES
QUESTION 1 May 2023 MTP
Shiv IT Solutions Ltd. is a company engaged in the business of providing customised
software to its clients. These software’s are usually related to the employee’s
attendance, leave management, salary preparation, tax calculation and other matters
incidental to HR.
The company is having its own building and other infrastructure in Bengaluru and also
at Brussels, Belgium. The company have patent rights over few of its software’s and
also have the trade mark right over the company’s logo.
The company got sanctioned term loan facility of Rs 10 crores from Best Bank Ltd on
1st January, 2022 by creating a charge on the assets of the company which includes
the company’s own buildings and intangible assets. The charge should have been created
by the company within the time prescribed under the Companies Act, 2013 with the
Registrar, however, the company could not get registration of charges within the
prescribed time line.
During the course of Secretarial Audit of the company, for the year ended March
2022, it came in the knowledge of the Company Secretary in Practice, that charge
was not registered with the Registrar. He mentioned it in the report and advised the
company to get it registered. However, the Action Taken Report (ATR) on the audit
objection made by the Company Secretary was not apprised to the Board and no follow
up was made by the company thereafter.
Bank’s concurrent auditor and statutory auditor also pointed out this issue and narrated
that since charge was not created by the company, hence this advance be treated as
clean advance and interest rate of clean / unsecured advance, which is 22% (as against
the normal rate of 11%) should be applied from the date of disbursement on the
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outstanding amount till date. Bank also asked a professional, whether it can get the
charge registered, at its own, to satisfy the audit objection.
The Bank applied for registration of charge which was considered by the Registrar and
registration of creation of charge was granted. The Bank in order to address the audit
objections, applied the interest @ 22% on the outstanding amount in the loan account
of the company. The company aggrieved with the decision of the Bank, managed to
liquidate the term loans account by raising funds from other sources and filed the
‘Satisfaction of Charge’ with the Registrar.
1. The company can create charge in favour of the lender on the assets which are:
(a) Tangible Assets and situated in India only
(b) Intangible Assets and situated in India only
(c) Assets that are tangible or otherwise and situated in India or Brussels (Belgium)
(d) Assets that are tangible or otherwise and situated in India only

2. Where the company fails to get the registration of charge, whether the Best Bank
Ltd, in whose favour the charge was to be created, can move the application for
creation of charge:
(a) No. It is the responsibility of the borrower company only to get the charge
registered in favour of the lender.
(b) If the company do not get the charge registered in favour of the lender, the
lender suo-moto cannot move application for registration of charge in its favour.
(c) The borrower company can be held liable to pay the penalty only.
(d) Yes. The lender company can move the application for registration of charge in its
favour, if the borrower do not get the charge registered with the prescribed time

QUESTION 2 May 2023 RTP


Who cannot inspect the register of charges and instrument of charges, during business
hours, without paying any fees:
(a) Any member of the company
(b) The Creditor of the company
(c) Persons other than member and creditor of the company
(d) No person is allowed to inspect the register of charges

Answers:
1 c, d
2 c

QUESTION 3 May 2023 MTP


Star Ltd. is having its establishment in Canada. It obtained a loan there creating a
charge on the assets of the foreign establishment. The company received a notice from
the Registrar of Companies for not filing the particulars of charge created by the
company on the property or assets situated outside India. The company wants to
defend the notice on the ground that it shall not be the duty of the company to
register the particulars of the charge created on the assets not located in India. Do
you agree with the stand taken by the Star Ltd.? Give your answer with respect to
the provisions of the Companies Act, 2013.
(Hints: it is the duty of the company creating a charge within or outside India, on its
property or assets or any of its undertakings, whether tangible or otherwise and
whether situated in or outside India, to register the particulars of the charge.
Hence, the stand taken by Star Ltd. not to register the particulars of charge created
on the assets located outside India is not correct)

QUESTION 4 May 2023 5 marks


City Bakers Limited obtained a term loan of Rs 1 crore from DNB Bank Ltd. The loan
was granted by the bank by creating a charge on one of its of its buildings and the

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charge was registered within 20 days from the date of creation of charge. Will such
registration of charge be deemed to be a notice of charge to any person who wishes
to lend money to the company against the security of such property? Also explain the
extension of time limit of registration with the provisions under the Companies Act
2013.
(Hints: Yes. Once the charge is registered, it is deemed to be notice of charge to any
person entering into a contract with the company. For provisions relating to extension
of time limit, refer Page 235)

MANAGEMENT & ADMINISTRATION (MEETINGS)


QUESTION 1 May 2023 MTP
Which among the following companies is not required to provide its members the facility
to exercise right to vote by electronic mode under the provisions of the Companies
Act, 2013?
(a) B Limited, whose equity shares (the company is having both equity as well as
preference shares) are listed on a recognised stock exchange.
(b) A Limited, whose equity shares (only type of share the company is having) are
listed on a recognised stock exchange
(c) C Limited, whose preference shares (the company is having both equity as well as
preference shares) are listed on a recognised stock exchange
(d) D Limited, whose equity shares as well as preference shares are listed on a
recognised stock exchange

QUESTION 2 May 2023 MTP


First annual general meeting of the company should be held within ……… from the
closing of the first financial year.
(a) 6 months (b) 9 months (c) 12 months (d) 18 months

QUESTION 3 May 2023 MTP


In case of a Private company, quorum of Annual General Meeting is:
(a) 1 member personally present (b) 2 members personally present
(c) 3 members personally present (d) 5 members personally present

QUESTION 4 May 2023 RTP


Modern Limited is a company limited by shares that manufactures furniture items
apart from material used in modular kitchens. Modern Limited is an unlisted company
with a registered office in Mumbai, Maharashtra. It has a corporate office in Delhi and
branch offices throughout the country. Following are facts regarding the 18th annual
general meeting (AGM) of Modern Limited.
Modern Limited is the lead sponsor of the furniture trade event India Furniture EXPO
2022 and a member of the Association of Furniture Manufacturers and Traders.
Modern Limited, on behalf of the Association, booked the Expo Hall in Mumbai for the
event and also decided to convene its 18th AGM at the same hall after the conclusion
of EXPO 2022.
But later, they found that the India Furniture Expo 2022, which was scheduled to be
held from September 16–19, 2022, had to be postponed as Bombay Municipal
Corporation (BMC) continued to occupy the hall as a vaccination centre. Therefore,
Modern Limited has to rethink its plan and now convene its 18th annual general meeting
on September 27, 2022, at the IMA Auditorium in Delhi, near its corporate office.
All the members consented to same. The notice of the said meeting was posted on
September 5, 2022, specifying place, date and day, in additions to business to be
transacted. In case of Mr. Ashok, who is declared insolvent but undischarged, notice
was sent to assignee, while a wilful omission was made in giving notice in case of Ms.
Anjum.

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At the meeting, Mr. Singh was elected as chairman of the meeting by a show of hands,
while Mr. Manohar registered his dissent on the appointment of Mr. Singh as chairman
of the meeting and sought a poll to elect the chairperson. Mr. Manohar has substantial
voting right of company being part of promoter group. A poll was held to elect the
chairman of the meeting, and Mr. Singh voted twice in his capacity as a member as
well as chairman while the poll was taking place. Mr. Singh was elected chairman through
the poll as well, by overwhelming majority.
Ms. Varnika, who is not a member of company, attended the meeting as Mr. Alok's
proxy, voted both times: when Mr. Singh was elected by show of hands and when he
was elected by poll. When she initially voted, she raised her hand in favour of electing
Mr. Singh as chairman of the meeting, while during the election through a poll, she
cast a vote against.
Mr. Manohar raises the question on a vote that is casted by Mr. Singh in his capacity
as chairman, hence he pass the remarks on him and his allies; which can be considered
defamatory in nature. Chairman at his opinion, instructed the company secretary to
exclude the remarks passed by Mr. Manohar while preparing the minutes; but some
members raised a voice against the discretion of Mr. Singh, because they find remarks
didn’t carry any matter which can be considered defamatory, while some other members
feel remarks are made with intent to defame chairman.

1. Regarding the notice of meeting given by Modern Limited, you are required to pick
the correct option in light of provisions of the Companies Act, 2013 and rules notified
thereunder.
I Modern Limited observe the length of notice, as required.
II Notice shall be given to member irrespective he is solvent, adjudged or declared
insolvent, or discharged insolvent; Modern Limited committed default
III Notice to be given to assignee of insolvent member, Modern Ltd correctly did so
IV Wilful omission in giving notice will invalidate the proceeding of the meeting in case
of Modern Limited
(a) Only I, II and IV are correct (b) Only III and IV are correct
(c) Only I is correct (d) Only IV is correct

2. Regarding the place of 18th AGM of Modern Limited, decide whether applicable
provisions violated or not; in light of provisions of the Companies Act, 2013 and rules
notified thereunder.
(a) Violation, because Modern Limited shall convene and conduct AGM only at its
registered office
(b) Violation, because AGM shall be held either at the registered office of the company
or at some other place within the city, town or village in which the registered office
of the company is situated
(c) No violation, because AGM shall be held either at the register or corporate office
of the company or even at some other place within the city, town or village in which
the registered or corporate office of the company is situated
(d) No violation, because AGM of the said company may be held at any place in India

3. Regarding vote casted by Ms Varnika, which of following statements hold truth; in


light of provisions of the Companies Act, 2013 and rules notified thereunder.
(a) Being proxy Ms. Varnika is not allowed to cast vote on a poll, while she can cast
vote by show of hand
(b) Being proxy Ms. Varnika is not allowed to cast vote by show of hand, while she
can cast vote on a poll
(c) Despite being non-member Ms. Varnika can be proxy, but can’t cast vote either
by show of hand or on a poll
(d) Ms. Varnika can cast vote in both the cases; by show of hand as well as on a poll

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4. Regarding the inclusion/exclusion of the remarks by Mr. Manohar, advice the company
secretary; which of the following statement hold truth, in light of provisions of the
Companies Act 2013 and rules notified thereunder.
(a) Mr. Manohar’s remark shall be included in minutes because minutes shall contain
fair summary of the proceedings.
(b) Mr. Manohar’s remark shall be excluded from minutes because remarks are made
with intent to defame chairman, the chairman’s opinion of inclusion and exclusion is
immaterial in such case.
(c) Mr. Manohar’s remark shall be excluded from minutes because chairman has absolute
discretion to exclude any matter which is defamatory in his opinion
(d) Mr. Manohar’s remark shall be included in minutes because many members challenge
the chairman’s opinion and feels remarks were not defamatory.

Answers:
1 c
2 b
3 b
4 b, d, b, c

QUESTION 5 May 2023 MTP


Happy Limited received a proxy form 54 hours before the time fixed for the start of
the meeting. The company refused to accept the proxy form on the ground that the
Articles of the company provided that a proxy form must be filed 60 hours before
the start of the meeting. Define proxy and decide under the provisions of the Companies
Act, 2013, whether the proxy holder can compel the company to admit the proxy in
this case?
(Hints: AoA cannot require the proxy form to be submitted more than 48 hours before
the time of the meeting. Provision in the AoA requiring proxy forms to be lodged 60
hours before the start of the meeting is invalid. Hence, proxy holder can compel the
company to admit the proxy. Similar to question on Page 267)

QUESTION 6 May 2023 MTP


With a view to transact some urgent business, Ratna, Rimpi and Ratnesh, the three
directors of Shilpkaar Constructions Limited are desirous of calling a general meeting of
shareholders by giving shorter notice than 21 days’ clear notice. The fourth director,
Nilesh is of the opinion that such an action will attract penalty provisions since there
is contravention. The paid-up share capital of the company is Rs 30 crores divided into
3 crores shares of Rs 10 each. Keeping in view the applicable provisions of the Companies
Act, 2013, discuss the possibility of calling a general meeting by giving shorter notice
(Hints: if the meeting is called after obtaining the consent from majority of members
holding at least 95% of paid-up share capital of the company, the meeting can be
validly called at shorter notice)

QUESTION 7 May 2023 MTP


Moon Light Ltd. held its Annual General Meeting on September 15, 2022. The meeting
was presided over by Mr. Shreeram, the Chairman of the Company's Board of Directors.
On September 17, 2022, Mr. Shreeram, the Chairman, without signing the minutes
of the meeting, left India to look after his father who fell sick in USA. Referring to
the provisions of the Companies Act, 2013, state the manner in which the minutes
of the above meeting are to be signed in the absence of Mr. Shreeram and by whom?
(Hints: the minutes of the meeting referred to in the case of Moon Light Ltd. can
be signed in the absence of Mr. Shreeram, by any director, authorized by the Board
in this respect. Similar question on Page 286)

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QUESTION 8 May 2023 MTP
Mr. Krish, a shareholder of ABC Ltd., has made a request to the company for providing
a copy of minutes book of general meeting. His name is already entered in the register
of members of the company. Whether the Mr. Krish is entitled to receive a copy of
minutes book? Explain, provisions of the Companies Act, 2013
(Hints: (i) As in given case, Mr. Laurel, in requirement with law, he can inspect the
minutes book and so to have soft copies of the same up to last three years.
(ii) As provision does not specify anything on authorizing anyone else to inspect the
minutes book. Therefore, Mr. Laurel cannot authorize his friend to inspect the minutes
book on behalf of him)

QUESTION 9 May 2023 MTP


Ganges Limited, a listed public company, conducted its Annual General Meeting on 31st
August, 2022. However, 10 days have passed since 31st August, 2022, but it has
still not filed report on Annual General Meeting. The Accountant of the company has
approached you to advise them whether Ganges Limited is required to file report on
Annual General Meeting?
(Hints: Since, Ganges Ltd. is a listed company, hence it has to file a copy of report
on annual general meeting with the Registrar within 30 days from 31st August, 2022)

QUESTION 10 May 2023 4 marks


A General Meeting of ABC Private Limited was scheduled to be held on 15th April
2022 at 3:00 p.m.. As per the notice, the members who will be unable to attend
the meeting in person can appoint a proxy, and the proxy forms duly filled should be
sent to the company, so that company can receive it within time. Mr. X a member
of the company appoints Mr. Y as his proxy and the proxy form dated 10 table 2022
was deposited by Mr. Y with the company at its registered office on 11th April 2022.
Similarly, another member Mr. W also gives two separate proxies to 2 individuals named
Mr. M and Mr. N. In the case of Mr. M, the proxy dated 12th April 2022 was
deposited with the company on the same day and the proxy form in favour of Mr. N
was deposited on 14th April 2022. All the proxies, viz Y, M and N were present
before the meeting.
According to the provisions of the Companies Act 2013, who would be the persons
allowed to represent as proxies for members X and W respectively?
(Hints: Y, M. Similar question on Page 269)

DECLARATION AND PAYMENT OF DIVIDEND


QUESTION 1 May 2023 MTP
Waste Papers Ltd. is company engaged in the business of collecting waste papers and
old newspapers and manufacture from these wastes the corrugated boxes which are
used in packing of the products by various suppliers.
The company is earning good profit margin and paying dividend consistently, which can
be seen by the following information:
(in lacs)
Year Payment of dividend Paid-up share capital Free Reserves
2012-13 to 2017-18 10 100 45
2018-19 15 100 60
2019-20 20 100 75
2020-21 22 100 95
2021-22 24 100 120
During 2022-23, company’s business was severally affected due to low demand of the
corrugated boxes on account of recession situation (slow- down of economy) prevailing
all over the country. The company showed a loss of Rs 20 lakh in the annual accounts.
However, the company wants to maintain its image of consistently dividend paying
company and for this year also, it also wants to declare dividend. The company have
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accumulated free reserves in its hand and want to declare dividend @ 26% (since there
is increasing trend of 2% from the preceding years).
During the year 2022-23, Somesh, a shareholder of the company died due to cardiac
arrest. He was having 10,000 shares in his D-mat account in which he has made
nomination in favour of his son Romesh. When Romesh applied for transmission of the
shares, his sister Sanjana, objected and filed a case in the court that she also has right
in the property of her father and mere making of nomination do not dilute the rights
of the legal heirs to claim share in the property. The matter is sub-judice in the court
of law awaiting decision.
The company has business dealing with Mahesh Kumar, who is also a shareholder of the
company. The company has supplied some goods to Mahesh Kumar worth Rs 10,000,
but he was not making payment to the company. The company while making payment
of the dividend to Mahesh Kumar deducted the due amount, and as a result, nothing
was payable to Mahesh Kumar towards the dividend. Mahesh Kumar threated to take
action against the company.
Based on the above facts, answer the following MCQs

1. Whether Waste Papers Ltd, who suffered losses in year 2022-23, can make payment
of dividend to the shareholders:
(a) In case of losses, the company can’t pay dividend
(b) Company may pay dividend out of profits of previous years (which are free
reserves), subject to the fulfilment of conditions prescribed for declaration of dividend
when there is inadequacy of profits in a particular year
(c) Company may dividend out of Asset Revaluation Reserve Account
(d) Company may dividend without any restriction as it has enough amount in its Free
reserves

2. Romesh (son of the deceased) made a complaint, that even after declaration of
dividend, the company has not posted the dividend warrant at the address given in his
transmission form. Which is the most correct statement in this regard:
(a) The company is not liable to pay dividend to a deceased person
(b) The company is not liable to pay dividend to the legal heirs of the deceased person
(c) The company should deposit the dividend in the court, where the matter is under
consideration
(d) The company is not liable where there is a dispute regarding the right to receive
the dividend.

3. In the given case, the amount due to be recovered from Mahesh Kumar was deducted
by the company and nothing was now payable to him on account of dividend. Is the
action of the company right:
(a) No, payment of dividend is a separate matter and should not be clubbed with any
other matter
(b) Yes, Mahesh Kumar can take action against the company for not paying any
dividend to him
(c) The company can adjust the any sum, due to it, from the shareholder
(d) The company should take into confidence and consent of Mahesh Kumar’s family
members to adjust its dues

QUESTION 2 May 2023 RTP


The amount accumulated in the Investor Education and Protection Fund shall not be
used for:
(a) refunds in respect of unclaimed dividends, matured deposits, matured debentures,
application money due for refund and interest thereon.
(b) reimbursement of legal expenses incurred in pursuing class action suits under section
37 and 245.

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(c) grants or donation to the Central Government for the purpose of investor’s
education and training.
(d) distribution of any disgorged amount among eligible and identifiable applicants who
have suffered losses.

Answers:
1 b, d, c
2 c

QUESTION 3 May 2023 MTP


The Annual General Meeting of Angels Limited held on 30th May, 2022, declared a
dividend at the rate of 30% payable on its paid-up equity share capital as recommended
by Board of Directors. However, the Company was unable to post the dividend warrant
to Mr. A, an equity shareholder, up to 25th July, 2022. Mr. A filed a suit against
the Company for the payment of dividend along with interest at the rate of 20
percent per annum for the period of default. Decide in the light of provisions of the
Companies Act, 2013, whether Mr. A would succeed? Also, state the directors’ liability
in this regard under the Act.
(Hints: Company was unable to post dividend warrant within 30 days from date of
declaration. Thus, directors will be punishable with imprisonment up to 2 years and
with fine of Rs 1000 per day of default. Also, company is liable to pay simple interest
@ 18% p.a. However, Mr. A will not succeed if he claims interest at 20% p.a.. Similar
question on Page 311)

QUESTION 4 May 2023 MTP


Mr. R, holder of 1000 equity shares of Rs 10 each of Vimal Ltd. approached the
company in the last week of September, 2022 with a claim for the payment of
dividend of Rs 2000 declared @ 20% by the Company at its Annual General Meeting
held on 31.08.2014 with respect to the financial year 2013-14. The Company refused
to accept the request of R and informed him that his shares on which dividend has
not been claimed till date, have also been transferred to the Investor Education and
Protection Fund.
Examine, in the light of the provisions of the Companies Act, 2013, the validity of
the decision of the Company and suggest the remedy, if available, to him for obtaining
the unclaimed amount of dividend and re-transfer of corresponding shares in his name.
(Hints: Decision of the company is correct. Upon expiry of 7 years from the date of
transferring money into the unpaid dividend account, money remaining unpaid shall be
transferred along with the respective shares to IEPF. But shareholder has a remedy.
He can now recover the dividend + shares from IEPF. Similar question on Page 308)

QUESTION 5 May 2023 6 marks


ESPN heavy engineering Limited is a listed entity engaged in the business of providing
engineering solutions to clients across the country. The company followed consistent
growth over the years. Rate of declaration of dividend in immediately preceding three
financial years were 15%, 20% and 25%.
Unfortunately, due to obsolescence of a special part of machinery, company incurred
losses in current financial year. Even though, during the financial year 2021-22, the
company declared interim dividend of 10% on the equity shares.
The board of directors of the company approved the financial result of the financial
year 2021-22 in its meeting held on 5th August 2022, and recommended a final
dividend of 15% in its board meeting.
The General Meeting of the shareholders was convened on 31st August 2022. The
shareholders of the company demanded that since interim dividend at 10% was declared
by the company, to the final dividend should not be less than 20%. It was also
submitted that rate of declaration of dividend in immediately preceding 3 years were

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15%, 20% and 25%. But the company secretary emphasized that final dividend cannot
be increased.
(i) Whether company can declare interim dividend, is company incurred losses during
the current financial year?
(ii) Do you think decision of Company Secretary is correct? What should be correct
rate of final dividend?
Justify your answer with reference to provisions of the Companies Act 2013
(Hints: (i) Yes. In such cases, maximum rate will be average rate of dividend declared
in 3 preceding FYs (20%)
(ii) As company has made losses in the current year, maximum rate allowed of final
dividend is average rate of dividend declared in 3 preceding FYs (20%). But if the BoD
has recommended 15%, shareholders cannot insist on increasing the dividend. Hence,
decision of the Company Secretary is correct)

ACCOUNTS OF COMPANIES
QUESTION 1 May 2023 MTP
Pratham Limited has decided to spend Rs 40 lakhs on project of CSR. The average
net profit of the company is Rs 10 crores. But due to some reasons, company was
able to spend only Rs 30 lakhs. Now what will be the option for the company for the
rest Rs 10 lakhs.
(a) Penal provision will be applicable for unspent amount of Rs 10 lakhs.
(b) No penal provision but explanation is required in Board report for not spending Rs
10 lakhs
(c) No penal provision
(d) The company is required to transfer the amount to separate fund.

QUESTION 2 May 2023 MTP


The company X plans to cover its skilled as well as semi-skilled workers of its units
under medical health insurance plan, for which the company X will bear the expenses.
Will this expenditure be permissible under CSR activities as per the provisions of the
Companies Act, 2013:
(a) only expenditure on skilled workers is allowed
(b) expenditure on both skilled and semi- skilled workers is allowed
(c) Resolution to be passed in board meeting before incurring this expenditure and in
the board report it must be mentioned, so that the same will be permissible under
CSR activities
(d) such expenditure is not permissible under eligible CSR activities

QUESTION 3 May 2023 MTP


The Corporate Social Responsibility Committee of the board shall consist of:
(a) Three or more directors out of which at two directors shall be Independent Director
(b) Three or more directors out of which at least one director shall be Independent
Director.
(c) Three or more directors and all should be Independent Directors
(d) Three or more directors with condition of not a single director should be
Independent Director

QUESTION 4 May 2023 MTP


Victory Limited was incorporated in January 2015. How much expenditure Victory
Limited shall ensure to spend in pursuance of its Corporate Social Responsibility Policy:
(a) The company shall ensure to spend in every financial year, at least 2% of the
average gross profits of the company made during the 2 immediately preceding FYs.
(b) The company shall ensure to spend in every financial year, at least 2% of the
average net profits of the company made during the 3 immediately preceding FYs.

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(c) The company shall ensure to spend in every financial year, at least 1% of the
average net profits of the company made during the 2 immediately preceding FYs.
(d) The company shall ensure to spend in every financial year, at least 1% of the
average net profits of the company made during the 3 immediately preceding FYs.

QUESTION 5 May 2023 MTP


New Ltd. is incorporated on 3rd January, 2022. As per the Companies Act, 2013,
what will be the financial year for the company:
(a) 31st March, 2022 (b) 31st December, 2022
(c) 31st March, 2023 (d) 30th September, 2023

QUESTION 6 May 2023 MTP


Which of the following is not mandatorily required to include cash flow as part of its
financial statement.
(a) Shiv Limited
(b) Shiv Private Limited (not a start- up company)
(c) Shiv (OPC) Private Limited
(d) Shiv Limited, having paid up share capital of 3 crore and turnover of 30 crore

QUESTION 7 May 2023 MTP


Compute the minimum amount the company (Natraj Limited) is required to spend on
account of Corporate Social responsibility year 2022-2023, if during the financial years
2019-2020, 2020-2021 and 2021-2022 net profits are Rs 30 crore, Rs 25 crore
and Rs 32 crore respectively.
(a) Rs 87 lac (b) Rs 1.14 crore (c) Rs 1.64 crore (d) Rs 58 lac

QUESTION 8 May 2023 RTP


ABC Limited has its shares listed on a recognized stock exchange in India. During the
current financial year ending on 31st March 2023, the Securities and Exchange Board
of India (SEBI) has found some irregularities in the filings made by the company.
Accordingly, SEBI proposes to make an application to the Tribunal for reopening of the
books of accounts of the Company. You, as an expert, are called upon by SEBI to
advise with which last financial year for reopening of books of accounts an application
can be made?
(a) 2018-2019 (b) 2016-2017 (c) 2013-2014 (d) 2014-2015

Answers:
1 c (within 2% of average net profits)
2 d
3 b
4 b
5 c
6 c
7 d
8 d

QUESTION 9 May 2023 MTP


Explain the following as per the provisions of the Companies Act, 2013: (i) Who shall
sign Board’s Report (ii) Filing of financial statements with the Registrar when AGM is
not held.
(Hints: Board’s report shall be signed by the director in OPC, and in other companies
by Chairman of the company (authorised by BoD), or 2 directors (1 shall be a MD).
If AGM is not held, the financial statements and other specified documents along with
the statement of facts and reasons for not holding the AGM shall be filed with the
ROC within 30 days of the last date before which the AGM should have been held)
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QUESTION 10 May 2023 MTP
The Income Tax Authorities in the current financial year 2022-23 observed, during
the assessment proceedings, a need to re-open the accounts of Sun Ltd. for the
financial year 2011-12 and, therefore, filed an application before the National Company
Law Tribunal (NCLT) to issue the order to Sun Ltd. for re-opening of its accounts
and recasting the financial statements for the financial year 2011-12. Examine the
validity of the application filed by the Income Tax Authorities to NCLT
(Hints: Though application filed by the Income Tax Authorities to NCLT is valid, its
recommendation for reopening and recasting of financial statements for the period
earlier than eight financial years immediately preceding the current financial year i.e.
2022-2023, is invalid. Similar question on Page 327)

QUESTION 11 May 2023 RTP


Hastprat Ltd. is an unlisted public company, having five directors in its board which
includes two independent directors.
Sankul (P) Ltd., is subsidiary company of Hastprat Ltd., actively carrying on its
business, having paid up capital of Rs 1.5 crore with 40 members and turnover of Rs
18 crore, respectively and the said company is not a start-up company.
In the context of aforesaid case-scenario, please answer to the following question(s):
Whether Sankul (P) Ltd. is mandatorily required to prepare cash flow statement for
the financial year as a part of its financial statements?
Provide your answer by analysing Sankul (P) Ltd. into following category of companies:
(i) One person company, (ii) Small company, (iii) Dormant company and (iv) Private
company, respectively.
(Hints: Sankul (P) Ltd. is mandatorily required to prepare cash flow statement for
the financial year as a part of its financial statements as it not an OPC, not a small
company (because a subsidiary cannot be a small company), not a dormant company
(as it is actively carrying on business) and not a private company recognised as a start-
up by DIPP)

QUESTION 12 May 2023 RTP


Yellow Ltd. received a communication from Central Government for preparation of
periodical financial results and complete audit or limited review of such periodical
financial results. The Board of Directors have raised an objection on the ground that
as it is an unlisted company, periodical financial results need not to be prepared.
Examine, referring the provisions of the Companies Act, 2013, in this regard
(Hints: Objection of BoD is not correct. Section 129A specifies that even unlisted
company has to prepare Periodical Financial Results. Similar question of Page 315)

QUESTION 13 May 2023 RTP


Red Limited (the Company) was incorporated on 01.04.2020. The balances extracted
from its audited financial statement are as given below:
FY Net Profit Before Tax Net Profit After Tax
2020-21 Rs 5 crores Rs 3.75 crores
2021-22 Rs 7 crores Rs 5.25 crores
The Company proposes to allocate the minimum required amount for CSR Activities to
be undertaken during FY 2022-23, if it is mandatory. You are requested to advice
the Company in this regard and compute the minimum amount to be allocated, if so
required, taking into account the relevant provisions of the Companies Act, 2013.
(Hints: Net Profit before tax of SKIP Limited for the FY 2020-21 is Rs 7 crore,
hence, SKIP Limited is required to constitute a CSR committee during FY 2021-22
as the Net profit before tax for the FY exceeds Rs 5 crore.
Minimum contribution towards CSR will be: 2% of average net profits since
incorporation (SKIP Limited was incorporated on 1.04.2019.) Average Net Profit since
incorporation: (Rs 5 crore + Rs 7 crore)/ 2 = Rs 6 crore Minimum contribution

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towards CSR will be: 2% of Rs 6 crore = Rs 0.12 crore or Rs 12 Lacs. Similar question
on Page 335)

QUESTION 14 May 2023 3 marks


A fraud was reported to SFIO by statutory auditors of PQ Ltd in the current financial
year 2021-22. A competent authority observed, during the investigation found that
there is a need to reopen the accounts of PQ Ltd for the financial year 2015-16 and
therefore, they filed an application before NCLT to issue the order against PQ Ltd for
reopening of its accounts and recasting the financial statements for the financial year
2015-16. Examine the validity of the application filed by the competent authority to
NCLT.
(Hints: Valid. Within 8 years. Similar question on Page 327)

QUESTION 15 May 2023 6 marks


The aggregate value of the paid up share capital of ABC Security Services was Rs 200
crores divided into 20 crore equity shares of Rs 10 each at the end of the Financial
Year 2021-22 having its registered office at Mumbai. This company had been registered
with an authorised share capital of Rs 300 crore dividend into 30 crore equity shares
of Rs 10 each. The extract of balance sheet of the company as on 31 March 2022
showed the following figures:
Particulars Amount (in crores)
Authorised Share Capital 300
Paid-up Share Capital 200
Free reserves created out of profits 200
Securities premium account 80
Credit balance of profit and loss account 50
Reserves created out of revaluation of assets 25
Miscellaneous expenditure not written off 10
Turnover of the company during the Financial Year 2021-22 was Rs 800 crore and
the net profit calculated in accordance with Section 198 of the Companies Act 2013
with other adjustments as per CSR rules was Rs 4 crore only.
Praveen, Company Secretary of the company advised that the company attracts the
provisions of Section 135 of the Companies Act 2013 and all the formalities have to
be complied with accordingly.
Thereafter, on 30 April 2022, CSR committee was formed to comply with the
provisions of Corporate Social Responsibility.
The board of directors of the company constituted of the following persons as its
directors
Mohan Singh Managing Director
Rohit and Bhavna Independent Directors
Venkatesh, Isha, Mohit and Muskaan Directors
On the basis of the above facts and by applying provisions of Companies Act 2013
answer the following:
(i) Is the contention of Praveen, Company Secretary of the company that the company
attracts the provisions of Section 135 of the Companies Act 2013 and is required to
form a CSR committee is correct? Support your answer with the applicable provision
and the required calculation.
(ii) It was decided that Mohan Singh, Venkatesh, Isha and Bhavna will be the members
of CSR committee. Is this decision correct?
(Hints: (i) Company’s net worth is 200 + 200 + 80 + 50 – 10 = 520 crores which
exceeds Rs 500 crores. Therefore, CSR is applicable, and CSR Committee is required.
(ii) Assuming the company is a public company, at least 3 directors (1 of whom is
independent director) are required in the CSR committee. Therefore, the decision is
correct.)

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AUDIT AND AUDITORS
QUESTION 1 May 2023 MTP
Birthday Card Limited, a listed company can appoint or re-appoint, Mishra & Associates
(a firm of Chartered Accountants), as their statutory auditors for:
(a) One year only (b) One term of 3 consecutive years only
(c) One term of 4 consecutive years only (d) Two terms of 5 consecutive years

QUESTION 2 May 2023 MTP


Which of the following is a prohibited service to be rendered by the auditor of a
company?
(a) Design and implementation of any financial information system
(b) Making report to the members of the company on the accounts examined by him
(c) Compliance with the auditing standards
(d) Reporting of fraud against the company by officers or employees to the Central
Government

Answers:
1 d
2 a

QUESTION 3 May 2023 MTP


The Board of Directors of Stamp Limited, a listed company appointed Mr. Chatterjee,
Chartered Accountant as its first auditor within 30 days of the date of registration
of the company to hold office from the date of incorporation to conclusion of the first
Annual General Meeting (AGM). At the first AGM, Mr. Chatterjee was re-appointed
to hold office from the conclusion of its first AGM till the conclusion of 6th AGM. In
the light of the provisions of the Companies Act, 2013, examine the validity of
appointment/ reappointment in the following cases:
(i) Appointment of Mr. Chatterjee by the Board of Directors.
(ii) Re-appointment of Mr. Chatterjee at the first AGM in the above situation.
(Hints: (i) Valid. Appointment of first auditor by BoD within 30 days is as per the
law. (ii) Valid. Appointment of first auditor is a separate appointment.
Similar question on Page 354)

QUESTION 4 May 2023 MTP


The Board of Directors of Prism Ltd. requested its Statutory Auditor to accept the
assignment of designing and implementation of suitable financial information system to
strengthen the internal control mechanism of the Company. How will you approach to
this proposal, as Statutory Auditor of Prism Ltd., taking into account the
consequences, if any, of accepting this proposal?
(Hints: In case the Statutory Auditor accepts the assignment, he will attract the
penal provisions. Similar question on Page 366)

QUESTION 5 May 2023 3 marks


SSR & Co (statutory auditors) while conducting audit for financial year 2021-22, find
out some manipulative entries in books of accounts of ASR Ltd. Auditors told the MD
that internal control system of company is not reliable. The board of directors of ASR
Ltd requested them to accept the assignment of designing and implementation of
suitable financial information system to strengthen the internal control mechanism of
the company. The company offered them a fee of Rs 10 lacs plus taxes for this
assignment for betterment of company. But statutory auditor refused to take the
assignment. What are the consequences if they accept this assignment?
(Hints: This is service prohibited under S. 144. If the auditor accepts this assignment,
he will attract a disqualification and will have to vacate his office. Similar question on
Page 366)
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QUESTION 6 May 2023 4 marks
L Ltd having 2000 members with paid up capital of Rs 1 crore, decided to hold its
AGM on 21st August 2022. On 2nd July 2022, 50 members holding paid up capital
of Rs 6 lacs in aggregate, has given notice of their intention for a resolution to be
passed at the AGM for appointing Dawar & Co as its statutory auditor from FY 2022-
23 onwards, instead of its existing statutory auditor SNS & Co which was originally
appointed for 5 years term and had completed only 3 years term.
When such notice was received by existing auditors, they sent a representation in
writing to the company along with a request for its notification to the members of
the company.
In the context of aforesaid facts, answer the following questions according to the
provisions of the Companies Act 2013
(i) whether the said notice was given by adequate number of members and within the
prescribed time limit to L Limited?
(ii) whether the company was bound to such a representation to its members made
by SNS & Co?
(Hints: The question is combination of removal of auditor and resolutions requiring
special notice (i) Yes, the notice was given by shareholders holding PUSC of at least
Rs 5 lacs or at least 1% of total voting power. It was also given at least 14 clear days
before the meeting, but not earlier than 3 months before the meeting. (ii) Yes,
company shall send the representation to the members. If the representation is received
too late from the auditor, copy of representation need not be sent. But should be
filed with ROC and read out at the meeting. Copy of representation need not be sent
and representation need not be read out at the meeting if application is made to
NCLT by the company or any aggrieved person and NCLT is satisfied that rights
conferred are being abused by the auditor)

SPACE FOR NOTES


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CA Anu Shree Agrawal 1


CA Anu Shree Agrawal ~ M: +91 7708821751 ~ For updates, revision videos and notes:
TELEGRAM CHANNEL: https://t.me/caanushreeagrawal | INSTAGRAM: anushreeagrawal4
YOUTUBE: https://www.youtube.com/c/CAANUSHREEBANSALAGRAWAL

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