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Xaviers Institute of Business Management Studies
MARKS: 80
SUB: CORPORATE LAW
N.B.: 1) Attempt any Ten Questions
2) Last two Questions are compulsory
Q.1. In the following statements only one is correct
statement. Explain Briefly?
i) An
invitation to negotiate is a good offer.
ii) A
quasi-contract is not a contract at all.
iii) An
agreement to agree is a valid contract.
Q.2. A ship-owner agreed to carry to cargo of sugar belonging to A
from Constanza to Busrah. He knew that
there was a sugar market in Busrah and that A was a sugar merchant, but did not
know that he intended to sell the cargo, immediately on its arrival. Owning to Shipment’s default, the voyage was
delayed and sugar fetched a lower price than it would have done had it arrived
on time. A claimed compensation for the
full loss suffered by him because of the delay.
Give your decision. Explain
Briefly?
Answer: In this case, the ship-owner agreed to carry cargo belonging
to A (a sugar merchant) from Constanza to Busrah, and the ship-owner knew that
there was a sugar market in Busrah and that A was a sugar merchant. However,
the ship-owner did not know that A intended to sell the cargo immediately upon
arrival. Due to a delay caused by the ship-owner’s default, the sugar arrived
late, and as a result, it fetched a lower price than it would have had the
shipment arrived on time. A is claiming compensation for the full loss
suffered due to the delay.
Legal Principles and Analysis
- Contract
of Carriage: The
ship-
Q.3. The proprietors of a medical preparation called the “Carbolic
Smoke Ball” published in several newspapers the following advertisement:-
“£ 1000 reward will be paid by the Carbolic Smoke
Ball Co. to any person who contracts the increasing epidemic influenza after
having used the Smoke Ball three times daily for two weeks according to printed
directions supplied with each ball. £ 1000 is deposited with the Alliance Bank
showing our sincerity in the matter.
On the faith in this advertisement, the plaintiff
bought a Smoke Ball and used it as directed. She was attacked by
influenza. She sued the company for the
reward. Will she succeed? Explain Briefly
Answer:
Q.4. Fazal consigned four cases of Chinese crackers at Kanpur to
be carried to Allahabad on the 30th May, 1987.
He intended to sell them at the Shabarat festival of 5th June 1987. The railway discovered that the consignment
could not be sent by passenger train and asked Fazal either to remove them or
authorize their dispatch by goods train.
He took no action and the goods arrived at Allahabad a month after they
were booked.
Fazal filed a suit against Railways for damages due
to late delivery of the goods which deprived him of the special profits at the
festival sale. Decide & explain
briefly ?
Answer: Case Summary:
Fazal consigned four cases of Chinese crackers from Kanpur to Allahabad,
intending to sell them at the Shab-e-Barat festival on 5th June 1987.
The consignment was booked on 30th May 1987, but due to the railway’s
decision to send the consignment by goods train rather than passenger train,
and Fazal’s failure to take any action, the goods were delivered a month
later than expected. Fazal filed a suit for damages against the
Q.5. ‘Lifeoy’ Soap company advertised that it would give a reward
of Rs. 2000 who contracted skin disease after using the ‘Lifeoy’ soap of the company
for a certain period according to the printed directions. Mrs. Jacob purchased the advertised ‘Lifeboy’
and contracted skin disease inspite of using this soap according to the printed
instructions. She claimed reward of Rs.
2000. The claim is resisted by the company on the ground that offer was not
made to her and that in any case she had not communicated her acceptance of the
offer. Decide whether Mrs. Jacob can
claim the reward or not. Give reasons.
Explain briefly?
Answer: Case Summary:
The company (Lifeoy Soap) made a public advertisement offering a
reward of Rs. 2000 to anyone who contracted a skin disease after using its soap
according to the printed instructions. Mrs. Jacob purchased the soap and used
it according to the instructions, but still contracted a skin disease. She now
claims the reward of Rs. 2000, which
Q.6. In each set of statements, only one is correct. State the correct statements & Explain
briefly?
a) i) A
bailee has a general lien on the goods bailed.
ii) The
ownership of goods pawned passes to the pawnee.
iii) A gratuitous bailment can be terminated by the bailor even
before the stated time.
b) i) A
substituted agent is as good an agent of the agent as a sub-
agent.
ii) An ostensible agency is as effective as an express
agency.
iii) A principal can always revoke an agent’s authority.
Answer:
Q.7. A, an unpaid seller, sends goods to B by railway. B becomes insolvent
And A sends a telegram to
Railway authorities not to deliver the goods to B. B. goes to the Parcel office
of Railway Yard and by presenting R. R.
(Railway Receipt) takes delivery of the goods and starts putting them in
the cart. Meanwhile the Station Master comes
running with the telegram in hand and takes possession of the goods from B. Discuss the rights of A and B to the goods in
possession of Railway authorities.
Answer: Case Summary:
- A, the unpaid seller, sends
goods to B via railway.
- B becomes insolvent and A,
concerned about the goods, sends a telegram to the railway authorities
instructing them not to deliver the goods to B.
- Despite
this, B goes to the Parcel office at the railway yard,
presents the Railway Receipt (R.R.), and takes delivery of
Q.8. X needs Rs. 10,000 but cannot raise this amount because his credit
is not good enough. Y whose credit is
good accommodates. X by giving him a
pronote made out in favour of X, though Y owes no money to X. X endorses the pronote to Z for value
received. Z who is holder in due
course demands payment from Y. Can Y
refuse and plead the arrangement between him and X Explain briefly?
Answer: Case Summary:
- X needs Rs. 10,000 but cannot raise
the amount due to poor credit.
- Y, whose credit is good, accommodates X
by making a promissory note in favor of X (though Y owes no
money to X).
- X endorses the promissory note
to Z for value received.
- Z, who is a holder in due course,
Q.9. Will C has the right of further negotiation in the following
cases: (B signs the endorsements) Explain
briefly?
i)‘Pay C for my use’
ii)‘Pay C’)
iii)‘Pay C or order for the
account of B’
Answer: In the context of negotiable instruments (such as
promissory notes, bills of exchange, etc.), the right to further negotiation
of the instrument depends on the endorsement made by the previous
holder. Let's analyze each of the three cases you provided to determine whether
C has the right to further negotiate the
Q.10. A promissory note was made without mentioning any time for
payment. The holder added the words’ on
demand on the face of the instrument.
State whether it amounted to material alteration and explain the effect
of such alteration. Explain briefly? Answer: Legal Question:
A promissory note was made without mentioning any time for
payment. The holder then added the words "on demand" on the
face of the instrument. The question is whether this alteration amounts to a material
alteration and what the effect of such an alteration is.
Key Legal Concepts:
- Material
Alteration:
- A material
alteration in the
Q.11. State whether the following instruments are valid promissory
notes:
i) I promise to pay Rs. 5000 to B on the dearth of ‘B’s
uncle provided that D in his will gives me a legacy sufficient for the promise
of payment of the said sum.
ii) I hereby acknowledge that I owe X Rs. 5,000 on account of
rent due and I agree that the said sum will be paid be me in regular
installments.
iii) I acknowledge myself indebted to B in Rs. 5000 to be paid
on demand for value received. Answer:
Q.12. A Payee holder of a
bill of exchange. He endorses it in
blank and delivers it to B. B endorses
in full to C or order. C without endorsement
transfers the bill to D. State giving
reasons whether D as bearer of the bill of exchange is entitled to recover the
payment from A or B or C. Explain
briefly?
Answer:
Q.13. Write a short note on the Doctrine of Indoor Management? Explain
briefly? Answer:
Q.14. The shareholders at an annual general meeting passed a
resolution for the payment of dividend at a rate higher than that recommended
by the Board of Directors. Examine the
validity of the resolution. Explain briefly?
Answer:
Q.15. In a prospectus issued by a company the
Managing Director stated that the company had paid dividend every year during
1921 – 27, which was a fact. However,
the company had sustained losses during the relevant period and had paid
dividends out of secret reserves accumulated in the past. Examine the consequences of the observation
made by the Managing Director. Explain briefly?
Answer:
Q.16. In a prospectus issued by a company the Managing Director stated
that the company had paid dividend every year during 1921-27, which was a
fact. However, the company had sustained
losses during the relevant period and had dividends out of secret reserves
accumulated in the past. Examine the
consequences of the observation made by the Managing Director. Explain briefly?
Answer:
Q.17. A buys from B 400 shares in a company on the
faith of a share certificate issued by the company. A tender to the company a transfer deed duly
executed together with B’s share certificate.
The company discovers that the certificate in the name of B has been
fraudulently obtained and refuses to register the transfer. Advise A. Explain
briefly?
Answer:
Q.18. A insured his house
against fire. Later while insure, A
killed his wife, severely injured his only son, set fire to the house and died
in the fire. The son survived and sued
the insurer for the fire loss, advice the insurer. Explain briefly?
Answer:
Q.19. a) Satrang Singh
admitted his only infant son in a private nursing home. As a result of strong dose of medicine
administered by the nursing attendant, the child has become mentally retarded.
Satrang Singh wants to make a complaint to the District Forum under the
Consumer Protection Act, 1986 seeking relief by way of compensation on the
ground that there was deficiency in service by the nursing home. Does his complaint give rise to a consumer
dispute? Who is the consumer in the
instant case? Explain briefly?
b) Smart booked a motor vehicle through one of the dealers. He was informed subsequently that the
procedure for purchasing the motor vehicle had changed and was called upon to
make further payment to continue the booking before delivery. On being aggrieved, Smart filed a complaint
with the State Commission under the Consumer Protection Act, 1986. Will he succeed? Explain briefly?
c) Brittle and Company, a small-scale industry, sought
nursing and financing facilities from its bankers by means of grant of further
advances and adequate margin money in anticipation of good demand for its
products. In failing to obtain this and
having become sick, it proceeds against its bankers under the Consumer
Protection Act, 1986, Will it succeed?
Explain briefly?
Q.20. X who was working as a
truck driver had taken a general insurance policy to cover the risk of injuries
for a period from 1.11.1998 to 30.11.1999.
He renewed the policy for a further period of one year on 10.11.1999. On the same day, he met with an accident and
suffered multiple injuries including fractures.
X submitted the claim along with documents to the insurance company. The
insurance company repudiated the claim on the ground that the premium for the
renewed policy was received in the office only at 2.30 p.m. on 10.11.1999,
while the accident had taken place at 10.00 a.m. on that day and hence there
was no policy at the time of accident.
Will X succeed if he files a complaint against the insurance company for
this claim? Explain briefly?
Q.21. Avinash booked his
goods with Superfast Freight Carriers at Delhi for being carried to
Ferozabad. The goods receipt note
mentioned that all the disputes would be subject to jurisdiction of the Mumbai
Court. Avinash lodged a complaint for certain deficiency in service against the
transporter in the District Forum at Delhi.
Superfast Carriers contested that District Forum at Delhi had no
jurisdiction to entertain the complaint as the head office of the transporter
was at Mumbai and the jurisdiction has been clearly stated in the goods receipt
not. Is the contention of the
transporter tenable? Explain briefly?
Q.22. With reference to the provisions of the Consumer Protection Act,
1986, decide the following giving reasons in support of your answer.
i) Sukh Dukh Ltd. dispatched certain consignments of goods
by road through Fastrack Roadways Ltd. The goods were unloaded and stored in a
godown enroute on the suggestion of consignee.
A fire broke out in the neighbouring godown spread to the godown and
goods were destroyed. The Fastrack
Roadways Ltd. claimed that there was neither negligence nor deficiency in
service on their part and goods were being carried at “Owner risk” and since no
special premium was paid, they were not responsible for the loss caused by
fire. Whether Fastrack Roadways Ltd. is
liable to pay damages to consignor?
ii) Life Insurance Corporation (LIC) formulated a scheme
called ‘salary saving scheme’ under which employees of an organisation could
buy an insurance policy. Premium due on
each policy was collected by the employer from the salary of the employees nor
did it issue any premium notice. When
the widow of the deceased employee made a claim to LIC on the death of her
husband, the LIC repudiated the claim on the ground that four installments of
premium had not been paid. The widow was
approached the consumer forum for redressal. Is the LIC liable for deficiency
in service? Explain?
iii) Raman booked a ticket from Delhi to New York by Lufthansa
Airlines. The airport authorities in New
Delhi did not find any fault in his visa and other documents. However, at Frankfurt airport authorities
instituted proceedings of verification because of which Raman missed his flight
to New York. After necessary
verification, Raman was able to reach New York by the next flight. The airline authorities’ tendered apology to
Raman for the inconvenience caused to him and also paid as goodwill gesture a
sum of Rs. 5,000. Raman intends to
institute proceedings under the Consumer Protection Act, 1986 against Lufthansa
Airlines for deficiency in service. Will
he succeed?
Answer : i) Sukh Dukh Ltd. vs. Fastrack Roadways Ltd.
Case Background:
Sukh Dukh Ltd. sent goods via Fastrack Roadways Ltd., and while enroute, the
goods were unloaded and stored in a godown on the suggestion of the consignee.
A fire broke out in the neighbouring godown, leading to the destruction of the
goods. Fastrack Roadways Ltd. claimed there was no negligence on their part and
stated that the goods were being carried at "Owner’s Risk," and thus
they were not liable for the loss.
Legal Issue: Is
Fastrack Roadways Ltd. liable to pay damages to Sukh Dukh Ltd. for the loss of
goods?
Analysis: Under
the Consumer Protection Act, 1986, a service provider like
Fastrack Roadways Ltd. is required to provide adequate care and diligence
while rendering their services. The key points to consider are:
- Liability
under Carriage of Goods:
When goods are carried by a transporter, they owe a duty of care to
deliver the goods in the same condition in which they were entrusted to
them unless there is an agreement that limits their responsibility.
- Terms
of the Contract (Owner's Risk Clause): The fact that Fastrack Roadways Ltd. claimed the goods were
carried at "Owner's Risk" is important. This clause, typically
found in many transport agreements, means that
Q.23. With reference to the provisions of the Consumer Protection Act,
1986, decide the following giving reasons in support of your answer.
i) Sohn sent all relevant documents in an envelope
regarding consignment of goods to a buyer in the USA through Fast Service
Couriers. The documents did not reach
the buyer as a consequence of which the buyer could not take delivery of the
goods. By the time the duplicate copies
of the document had been received by the buyer, the season of the goods was
over. He claimed that he had suffered a
loss of US $ 5,000 as a result of the negligence of the courier. The State Commission ordered the payment to
be made by the Fast Service Couriers, but the National Commission in appeal
reversed the order and ordered payment of US $ 100 only as per the receipt
issued by the Fast Service Courier to the consignor at the time of the dispatch
of the latter. Advise Sohan.
ii) Mahesh purchased a machine from Astute Ltd. to operate it
himself for earning his liverhood. He
took the assistance of a person to assist him in operating the machine. The machine developed fault during the
warranty period. He filed a claim in the consumer forum against the company for
deficiency in service. Astute Ltd.
alleged that Mahesh did not operate the machine himself but had appointed a
person exclusively to operate the machine.
Will Mahesh succeed?
iii) Pillai purchased a car by taking a loan from Kerala
cooperative Bank Ltd. and gave post-dated cheques to the bank not only in
respect of repayment of loan instalments but also of premium of insurance
policy for two succeeding years. On the expiry of the policy. Pillai’s car met with an accident. Will Pillai succeed in getting a claim
against the Bank ?
Answer: Analysis of each case in the context of the Consumer
Protection Act, 1986 to determine whether the claims are valid and whether
the parties can be held liable for deficiency in service or other
issues:
i) Sohan vs. Fast Service Couriers
Case Background:
Sohan sent documents related to a consignment of goods to a buyer in the USA
through Fast Service Couriers. The documents failed to reach the buyer on time,
causing the buyer to miss the delivery of goods and resulting in a financial
loss. By the time the duplicate copies of the documents arrived, the season for
the goods had passed, and the buyer claimed a loss of US $5,000 due to the
courier's negligence. The State Commission initially ordered Fast Service
Couriers to pay for the loss, but the National Commission, upon appeal,
reversed the order and limited the payment to US $100, based on the receipt issued
by the courier.
Legal Issue: Can
Sohan challenge the decision of the National Commission, and should Fast
Service Couriers be liable for the full loss?
Analysis:
- Deficiency
in Service: Under
the
Dear students, get fully solved assignments by professionals
Do send your query at :
or call us at : 08263069601
(Plagiarism proofed assignments available with 100% surety and refund)
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