Monday, September 20, 2010
MBA Term I -Submission date extended
The submission date for assignments has been extended upto 25.9.2010.
Sunday, September 19, 2010
100% attendance rewards... Announced!!!!!
MBA TERM I
Hardeep Kaur
Mohit Pharswan
MBA TERM III
Deepa Chauhan
Priyanka Goel
Moni Rana
Congragulations! students. Keep it up!
Hardeep Kaur
Mohit Pharswan
MBA TERM III
Deepa Chauhan
Priyanka Goel
Moni Rana
Congragulations! students. Keep it up!
Assignment MBA Term -I
MBA Term I – Business Law
Assignment No: - 2 (Problem Solving)
Note: Attempt all the questions
1. Varun sells and delivers goods to Deepak. Agnibesh afterwards, without consideration agrees to pay for them in default of Deepak. Is the agreement valid? Give reasons.
2. Dhruv agrees to sell to Rachit, “My white horse for rupees five hundred or rupees one thousand”. Is the agreement valid?
3. Nikita’s father promised her that he would pay Rs 2000/- per month as pocket money to her. He however did not honor his promise. Can Nikita enforce this promise against him?
4. Bhaskar offers to sell his car for Rs 8000/- to Ankit. Ankit says to Bhaskar that he will buy the car for Rs 6000/-. Is it an acceptance of the offer? Give reasons for your answer.
5. Rajesh offered by letter to buy Saurabh’s motorbike for Rs 50,000/, adding “If I hear no more from you. I shall consider the motorbike as mine”. No answer was given by Saurabh. Is there any contract?
6. Ruchi offered to sell an iPod for Rs 5000/- to Pallavi, but Pallavi was willing to pay only Rs 3000/- . Ruchi refused. Now Pallavi offered Rs 5000/- but Ruchi refused. Was it a valid contract?
7. Mr. Harsh advertises in a newspaper that he would pay Rs 1, 00,000 to anyone who traces his missing son. Bobby traced that boy and claimed the amount of reward. State whether Bobby is entitled to receive the amount of reward in the following cases
(1) If he knew about the reward
(2) If he did not know about the reward
Substantiate your answers using the relevant law and cases on the point
8. Shambu, a minor, borrowed a sum from Sethji by executing a mortgage of his property in favour of Sethji. Subsequently, Shambu sued for setting aside the mortgage. Is the mortgage valid? Can Sethji recover the sum advanced to Shambu? Substantiate your answers using the relevant law and cases on the point.
9. George intends to sell his horse to Richard. George’s horse is medically unfit. He prepares a false certificate of fitness said to be issued under the name of a veterinary doctor. He then pastes this certificate on the door of the stable. Richard without looking at the certificate enters the stable and purchases the horse. Later on Richard comes to know that the horse is medically unfit. Can Richard now cancel the contract on the basis of fraud of George? Give reasons
10. Maria, the mother of an illegitimate child, makes a contract with Stephen, the father of the child whereby he agrees to pay to Maria Rs 2000/- per month in consideration of maintaining the child. After, paying the promised amount for six months Stephen refuses to pay the same. He takes the defence that Maria was performing only the statutory duty to maintain the child, and therefore, there was no consideration for the promise. Decide giving reasons.
11. Sukdev without the request of anyone extinguishes the fire of Mr. Khan’s godown. Sukdev suffers severe burns thereby. Mr. Khan promises to compensate Sukdev for the whole amount that he has spent for his treatment. Can Sukdev enforce the promise of Mr. Khan and recover the amount?
12. Javed fraudulently informs Naved that Javed’s estate is free from encumbrances. Naved, thereupon buys the estate. Later he finds that Javed’s estate is subject to mortgage. Is it a void or voidable contract? State reasons.
13. Dinesh gave a loan to Laila, a married woman to enable her to obtain a divorce from her husband. Dinesh agreed to marry Laila after the divorce. Can Dinesh recover the loan from Laila?
14. Rahul is in need of financial assistance to enable him to file a suit for recovery of Rs.5000/- from Ishwar. Shashi agrees to provide funds to Rahul if Rahul agrees to pay him one-fourth of the amount recovered from Ishwar.
15. Alankrita picks up a packet of sugar with a label stating the price as Rs.30/- at Reliance Super store but the cashier tells her that the correct price for the packet of sugar is Rs.52/- and takes it back from Alankrita. Decide.
16. Laxman, an agent of Kunj&Co refused to hand over the account books to Hari, the new agent sent in his place, unless Kunj & Co released him from all his liabilities. Kunj &Co had to give a release deed as demanded. Is this a valid contract?
17. Mohit offered to sell 100 shares of a company to Pawan. In preparation Pawan sold off some of his own shares to get money to buy the shares. As the sale was hurried, Pawan did not get a good value. In the meanwhile, Mohit changed his mind and communicated to Pawan that he would not be selling the shares. Pawan is demanding damages and compensation. Would Pawan succeed?
18. Saman offered to sell Pradeep a pump set for Rs 8000/-. The payment had to be made by cheque. Pradeep turned it down and offered to buy the pump set for Rs 7000/-. Saman turned down this offer. Later, Pradeep sent a draft for Rs 8000/- saying that the pump set could be delivered. In the meantime, Saman sold off the pump set to Fahad. Saman returned the bank draft sent by Pradeep. A dispute arose between the parties. Decide.
19. Aditya applied to the Greater Noida Authority for license to build additional 2 storey’s in a building which has at present one storey. The permission was refused. Aditya had to dispose of the single storey building but later permission was granted by Greater Noida Authority to construct two more storeys. Aditya claims damages for the loss of excess money he could have got if such permission was given earlier. Decide.
20. Virender agrees to sell his Waganor to Arif two months after the date of the contract. But after 50 days of the contract, Virender sells the car to Hardeep. Thereupon, Arif sues Viender for the breach of contract. Virender contends that he could still perform the contract by repurchasing the car from Hardeep. Will Virender succeed? Give full reasons for your answer
Assignment No: - 2 (Problem Solving)
Note: Attempt all the questions
1. Varun sells and delivers goods to Deepak. Agnibesh afterwards, without consideration agrees to pay for them in default of Deepak. Is the agreement valid? Give reasons.
2. Dhruv agrees to sell to Rachit, “My white horse for rupees five hundred or rupees one thousand”. Is the agreement valid?
3. Nikita’s father promised her that he would pay Rs 2000/- per month as pocket money to her. He however did not honor his promise. Can Nikita enforce this promise against him?
4. Bhaskar offers to sell his car for Rs 8000/- to Ankit. Ankit says to Bhaskar that he will buy the car for Rs 6000/-. Is it an acceptance of the offer? Give reasons for your answer.
5. Rajesh offered by letter to buy Saurabh’s motorbike for Rs 50,000/, adding “If I hear no more from you. I shall consider the motorbike as mine”. No answer was given by Saurabh. Is there any contract?
6. Ruchi offered to sell an iPod for Rs 5000/- to Pallavi, but Pallavi was willing to pay only Rs 3000/- . Ruchi refused. Now Pallavi offered Rs 5000/- but Ruchi refused. Was it a valid contract?
7. Mr. Harsh advertises in a newspaper that he would pay Rs 1, 00,000 to anyone who traces his missing son. Bobby traced that boy and claimed the amount of reward. State whether Bobby is entitled to receive the amount of reward in the following cases
(1) If he knew about the reward
(2) If he did not know about the reward
Substantiate your answers using the relevant law and cases on the point
8. Shambu, a minor, borrowed a sum from Sethji by executing a mortgage of his property in favour of Sethji. Subsequently, Shambu sued for setting aside the mortgage. Is the mortgage valid? Can Sethji recover the sum advanced to Shambu? Substantiate your answers using the relevant law and cases on the point.
9. George intends to sell his horse to Richard. George’s horse is medically unfit. He prepares a false certificate of fitness said to be issued under the name of a veterinary doctor. He then pastes this certificate on the door of the stable. Richard without looking at the certificate enters the stable and purchases the horse. Later on Richard comes to know that the horse is medically unfit. Can Richard now cancel the contract on the basis of fraud of George? Give reasons
10. Maria, the mother of an illegitimate child, makes a contract with Stephen, the father of the child whereby he agrees to pay to Maria Rs 2000/- per month in consideration of maintaining the child. After, paying the promised amount for six months Stephen refuses to pay the same. He takes the defence that Maria was performing only the statutory duty to maintain the child, and therefore, there was no consideration for the promise. Decide giving reasons.
11. Sukdev without the request of anyone extinguishes the fire of Mr. Khan’s godown. Sukdev suffers severe burns thereby. Mr. Khan promises to compensate Sukdev for the whole amount that he has spent for his treatment. Can Sukdev enforce the promise of Mr. Khan and recover the amount?
12. Javed fraudulently informs Naved that Javed’s estate is free from encumbrances. Naved, thereupon buys the estate. Later he finds that Javed’s estate is subject to mortgage. Is it a void or voidable contract? State reasons.
13. Dinesh gave a loan to Laila, a married woman to enable her to obtain a divorce from her husband. Dinesh agreed to marry Laila after the divorce. Can Dinesh recover the loan from Laila?
14. Rahul is in need of financial assistance to enable him to file a suit for recovery of Rs.5000/- from Ishwar. Shashi agrees to provide funds to Rahul if Rahul agrees to pay him one-fourth of the amount recovered from Ishwar.
15. Alankrita picks up a packet of sugar with a label stating the price as Rs.30/- at Reliance Super store but the cashier tells her that the correct price for the packet of sugar is Rs.52/- and takes it back from Alankrita. Decide.
16. Laxman, an agent of Kunj&Co refused to hand over the account books to Hari, the new agent sent in his place, unless Kunj & Co released him from all his liabilities. Kunj &Co had to give a release deed as demanded. Is this a valid contract?
17. Mohit offered to sell 100 shares of a company to Pawan. In preparation Pawan sold off some of his own shares to get money to buy the shares. As the sale was hurried, Pawan did not get a good value. In the meanwhile, Mohit changed his mind and communicated to Pawan that he would not be selling the shares. Pawan is demanding damages and compensation. Would Pawan succeed?
18. Saman offered to sell Pradeep a pump set for Rs 8000/-. The payment had to be made by cheque. Pradeep turned it down and offered to buy the pump set for Rs 7000/-. Saman turned down this offer. Later, Pradeep sent a draft for Rs 8000/- saying that the pump set could be delivered. In the meantime, Saman sold off the pump set to Fahad. Saman returned the bank draft sent by Pradeep. A dispute arose between the parties. Decide.
19. Aditya applied to the Greater Noida Authority for license to build additional 2 storey’s in a building which has at present one storey. The permission was refused. Aditya had to dispose of the single storey building but later permission was granted by Greater Noida Authority to construct two more storeys. Aditya claims damages for the loss of excess money he could have got if such permission was given earlier. Decide.
20. Virender agrees to sell his Waganor to Arif two months after the date of the contract. But after 50 days of the contract, Virender sells the car to Hardeep. Thereupon, Arif sues Viender for the breach of contract. Virender contends that he could still perform the contract by repurchasing the car from Hardeep. Will Virender succeed? Give full reasons for your answer
Saturday, September 18, 2010
Industrial relations and Labour Laws- Syllabus -Term III
Industrial relations – An Overview
• Overview of Industrial Relations (IR)
• Meaning and Scope of IR
• Perspectives/Approaches to IR
• Major stake holders of IR
• Evolution of IR in India
• Changing Dimensions of IR in India
• Impact of globalization on IR
• ILO
Trade Unionism
• Concepts, Functions, Objectives , Structure
• Kinds of Trade Unions
• Problems of Trade Unions
• Trade union movement in India
• Trade Union Act, 1926
o Applicability
o Registration
o Recognition of Trade unions
o Immunities available to Trade union office bearers
Practical Overview*
Dealing with trade unions
Dispute resolution
• Causes of Industrial Disputes
• Standing Orders& Grievance Procedure
o The Industrial Employment (standing orders) Act, 1946
• Participative Management
• Collective Bargaining
• The Industrial Disputes Act, 1947
o Concept of Industry and workman
o Dispute Resolution Methods & Machinery
Conciliation
Arbitration
Adjudication
o Layoff
o Closure
o Retrenchment
o Strike
Labour Welfare
• Objectives, benefits to workers.
• Workers Education and Training
Labour
Legislations
(Only Main Provisions)
(Brief overview)
. Evolution and importance of Labour Legislation in India
• Protective Legislation
o The Factories Act, 1948
• Wage Legislation
o Minimum Wages Act, 1948
o Payment of Wages Act, 1936
o Equal remuneration Act,1976
o Payment of Bonus Act, 1965
o Payment of Gratuity Act, 1972
• Social Security Legislation
o Workmen’s Compensation Act, 1923
o Employees’ Provident Fund, 1952
o Employees State Insurance Act,1976
o The Maternity Benefit Act, 1961
o Unorganized Workers Social Security Act 2008
• Miscellaneous Legislations
Child Labour (Prohibition and Regulation) Act, 1986
Sexual harassment at workplace- A legal perspective
Practical Overview*
Compliances to be done before setting up a factory
•Filling of Provident fund form, Problems with Provident fund
• Overview of Industrial Relations (IR)
• Meaning and Scope of IR
• Perspectives/Approaches to IR
• Major stake holders of IR
• Evolution of IR in India
• Changing Dimensions of IR in India
• Impact of globalization on IR
• ILO
Trade Unionism
• Concepts, Functions, Objectives , Structure
• Kinds of Trade Unions
• Problems of Trade Unions
• Trade union movement in India
• Trade Union Act, 1926
o Applicability
o Registration
o Recognition of Trade unions
o Immunities available to Trade union office bearers
Practical Overview*
Dealing with trade unions
Dispute resolution
• Causes of Industrial Disputes
• Standing Orders& Grievance Procedure
o The Industrial Employment (standing orders) Act, 1946
• Participative Management
• Collective Bargaining
• The Industrial Disputes Act, 1947
o Concept of Industry and workman
o Dispute Resolution Methods & Machinery
Conciliation
Arbitration
Adjudication
o Layoff
o Closure
o Retrenchment
o Strike
Labour Welfare
• Objectives, benefits to workers.
• Workers Education and Training
Labour
Legislations
(Only Main Provisions)
(Brief overview)
. Evolution and importance of Labour Legislation in India
• Protective Legislation
o The Factories Act, 1948
• Wage Legislation
o Minimum Wages Act, 1948
o Payment of Wages Act, 1936
o Equal remuneration Act,1976
o Payment of Bonus Act, 1965
o Payment of Gratuity Act, 1972
• Social Security Legislation
o Workmen’s Compensation Act, 1923
o Employees’ Provident Fund, 1952
o Employees State Insurance Act,1976
o The Maternity Benefit Act, 1961
o Unorganized Workers Social Security Act 2008
• Miscellaneous Legislations
Child Labour (Prohibition and Regulation) Act, 1986
Sexual harassment at workplace- A legal perspective
Practical Overview*
Compliances to be done before setting up a factory
•Filling of Provident fund form, Problems with Provident fund
Syllabus for Business Law -Term I
Introduction to Indian Legal System
Introduction to Law, Legal Terminology, Different Legal systems of the world (Brief overview), Sources of law, Salient Features of Constitution of India, Judiciary, Hierarchy of courts
Indian Contract Act 1872
Definition, concept of contract, valid contract and its essential elements, Types of contract, Quasi Contract, Discharge of Contract; Breach of contract and its remedies, Agency, Contract of indemnity and guarantee, Bailment
Practical overview *
Employment contracts
Important Clauses in Corporate & Commercial Agreements
Alternate Dispute Resolution
Sale of Goods Act, 1930
Contract of sale, agreement to sell, Conditions and warranties, Hire-Purchase, Passing of property, transfer of property, remedies for breach; rights of unpaid sellers. Doctrine of caveat emptor
Practical overview*
Examination of Hire purchase agreements
Negotiable Instruments Act, 1881
Definition and characteristics, promissory notes, bills of exchange and cheque, parties to negotiable instrument; methods of negotiation of instrument Endorsement and delivery of a negotiable instrument, negotiation by unauthorized parties
Practical Overview*
Procedure to be followed in case of dishonour of cheques
Indian Partnership Act 1932
Definition of partnership, types of partnership, formation of partnership, registration of partnership, kinds of partners, rights and liabilities of partners, minor’s status in a partnership firm, dissolution of partnership firm.
Practical Overview *
Requirements in a partnership deed
Limited Liability Partnership Act 2008
Companies Act 1956
Definition, Characteristics, formation of company, memorandum and articles of associations of a company, types of companies, management of companies, Directors and meetings; Winding up of companies.
Practical overview*
How to form a company –Practical aspects
MCA 21
Consumer Protection Act 1986
Consumer, Rights of consumer, Definitions, Nature and scope of remedies available to the consumers
Practical overview*
Model form of a complaint
Introduction to Law, Legal Terminology, Different Legal systems of the world (Brief overview), Sources of law, Salient Features of Constitution of India, Judiciary, Hierarchy of courts
Indian Contract Act 1872
Definition, concept of contract, valid contract and its essential elements, Types of contract, Quasi Contract, Discharge of Contract; Breach of contract and its remedies, Agency, Contract of indemnity and guarantee, Bailment
Practical overview *
Employment contracts
Important Clauses in Corporate & Commercial Agreements
Alternate Dispute Resolution
Sale of Goods Act, 1930
Contract of sale, agreement to sell, Conditions and warranties, Hire-Purchase, Passing of property, transfer of property, remedies for breach; rights of unpaid sellers. Doctrine of caveat emptor
Practical overview*
Examination of Hire purchase agreements
Negotiable Instruments Act, 1881
Definition and characteristics, promissory notes, bills of exchange and cheque, parties to negotiable instrument; methods of negotiation of instrument Endorsement and delivery of a negotiable instrument, negotiation by unauthorized parties
Practical Overview*
Procedure to be followed in case of dishonour of cheques
Indian Partnership Act 1932
Definition of partnership, types of partnership, formation of partnership, registration of partnership, kinds of partners, rights and liabilities of partners, minor’s status in a partnership firm, dissolution of partnership firm.
Practical Overview *
Requirements in a partnership deed
Limited Liability Partnership Act 2008
Companies Act 1956
Definition, Characteristics, formation of company, memorandum and articles of associations of a company, types of companies, management of companies, Directors and meetings; Winding up of companies.
Practical overview*
How to form a company –Practical aspects
MCA 21
Consumer Protection Act 1986
Consumer, Rights of consumer, Definitions, Nature and scope of remedies available to the consumers
Practical overview*
Model form of a complaint
Friday, September 17, 2010
Welcome students!
Dear MBA Ist year students of sharda university, welcome to my blog. I hope this blog will be an interactive platform between us.
Thursday, November 26, 2009
Industrial Relations
Syllabus for Mid term exam
Meaning and importance of Industrial relations
Objectives of IR
Stakeholders in IR
Problems of IR
Impact of globalisation on IR
ILO
Meaning and importance of Industrial relations
Objectives of IR
Stakeholders in IR
Problems of IR
Impact of globalisation on IR
ILO
Saturday, October 10, 2009
Attention! PTU students
All PTU students are required to submit their assignment (given on the blog itself) on 22nd October 2009. The presentations shall be held after your exams. (1st week of November)
Wednesday, October 7, 2009
Presentation
All students are required to make two powerpoint presentations. (Individual)(Both are compulsory)
The presentations shall carry 5 marks each.
Topics
(1)Examine a contract (from the net, any contract sourced from friends, relatives or your own business) and check if the essential elements of a contract are present.
(2) One consumer complaint (Complaint-Decision)
Guidelines
-Both the powerpoint presentations must be send by soft copy. (santhiuk@rediffmail.com)
-A Hard copy printout of both the presentations also should be submitted on the day of the presentation.
-The student should come prepared with both the presentations on the day of the presentation.
-The presentations shall take place in the Last week of October (from 26/10/09).
-If presentations are found with similar content the presentation of those students is deemed to be cancelled and will get zero marks.
The presentations shall carry 5 marks each.
Topics
(1)Examine a contract (from the net, any contract sourced from friends, relatives or your own business) and check if the essential elements of a contract are present.
(2) One consumer complaint (Complaint-Decision)
Guidelines
-Both the powerpoint presentations must be send by soft copy. (santhiuk@rediffmail.com)
-A Hard copy printout of both the presentations also should be submitted on the day of the presentation.
-The student should come prepared with both the presentations on the day of the presentation.
-The presentations shall take place in the Last week of October (from 26/10/09).
-If presentations are found with similar content the presentation of those students is deemed to be cancelled and will get zero marks.
Monday, October 5, 2009
Note
Students who have not submitted their assignments on 1st October need not submit the assignemnt anymore. You will get zero (0) marksfor assignments.
All students who have below 50% attendannce will get zero (0) marks for the attendance component.
All students who have below 50% attendannce will get zero (0) marks for the attendance component.
Cases on Company Law
1. Separate Legal Entity
Salmon vs. Salmon & Co. Ltd., (1877)
Salmon was a leather merchant. He sold his business for a sum of £30,000 to a company formed by him along with his wife, a daughter and four sons. The purchase consideration was satisfied by allotment of 20,000 shares of £1 each and issue of debentures worth £10,000, secured by a floating charge on the company’s assets in favour of Mr. Salmon. All the share holders subscribed for one share of £1 each. Mr. Salmon was appointed the managing director of the company. The company almost immediately ran into difficulties and eventually become insolvent and winding up commenced. At the time of winding up, the total assets of the company amounted to £6,050; its liabilities were £10,000 secured by the debentures issued to Mr. Salmon and £8,000 owing to unsecured trade creditors. The unsecured sundry creditors claimed the whole of the company’s assets, viz. £6,050 on the ground that company was a mere alias or agent for Salmon.
Held: The contention of the trade creditors could not be maintained because the company, being by law a person quite distinct from its members, could not be regarded as an ‘alias’ or agent or trustee for Salmon. Also the company’s assets must be applied in payment of the debentures as a secured creditor is entitled to payment out of the assets on which his debt is secured, on priority to unsecured creditors.
It can be inferred from Salmon’s case that there need not be any equilibrium or equitable distribution of voting amongst the members of the company. Mr. Salmon had £20,000 shares, whereas all other members had one share of £1 each.
Lee vs. Lee Farming Limited (1960)
A company was formed for the purpose of manufacturing aerial top-dressing. Lee, a qualified pilot, held all but one of the shares in the company and by the articles was appointed governing director of the company and chief pilot. Lee was killed while piloting the company’s aircraft and his widow claimed compensation for his death under the Workmen Compensation Act. The company opposed the claim on the ground that Lee was not a ‘worker’ as the same person could not be employer and the employee.
Held: There was a valid contract of service between Lee and the company and Lee, was therefore, a worker. Mrs. Lee’s contention was upheld.
2. Separate Property
Bacha F. Guzdar vs. The Commissioner of Income-Tax, Bombay (1955)
The plaintiff (Mrs Guzdar) received certain amounts as dividend in respect of shares held by her in a tea company. Under the Indian Income-tax Act, agricultural income is exempted from payment of income-tax. As income of a tea company is partly agricultural, only 40 per cent of the company’s income is treated as income from manufacture and sale, and therefore, liable to tax. The plaintiff claimed that the dividend income in her hands should be treated as agricultural income up to 60 per cent, as in the case tea company, on the ground that dividends received by shareholders represented the income of the company.
Held: Though the income in the hands of the company was partly agricultural yet the same income when received by Mrs. Guzdar as dividend could not be regarded as agricultural income.
It can be referred from Mrs. Guzdar’s case that a shareholder of a company is not a part-owner or co-owner of the company or its property. He is only given certain rights by law, for example, to attend and vote at the meetings of the shareholders, to receive dividend. Thus the property of the company belongs to the company and not to its shareholders.
Macaure vs. Northern Insurance co. Ltd., (1925)
‘Macaure’ held all except one share of a timber company. He had also advanced substantial amount to the company. He got insured the company’s timber in his personal name. On timber being destroyed by fire his claim was rejected for want of insurable interest. The court, applying principle of separate legal entity, held that the insurance company was not liable.
3. For The Protection of Revenue
In re Sir Dinshaw Maneckjee Petit (1927)
D was a rich man having dividend and interest income. He wanted to avoid income-tax. For this purpose, he formed four private companies, in all of which he was the majority share holder. The companies made investments and whenever interest and dividend income were received by the companies, D applied to the companies for loans, which were immediately granted and he never repaid. In a legal proceeding the corporate veil of all the companies were lifted and the income of the companies treated as if they were of ‘D’.
4. Where a Company has been Formed by Certain Persons to Avoid their Own Valid Contractual Obligations
Gilford Motor Co. Vs. Horne (1933)
A sold his business to B and agreed not to compete with him for a given number of years within reasonable local limits. A, desirous of re-entering business, in violation of the contractual obligation, formed a private company with majority shareholdings. B filed a suit against A and the private company and the court granted an injunction restraining A and his company with going ahead in the competing business.
5. Where a Company has been Formed for Some Fraudulent Purpose or Is A ‘Sham’
Construction Company (P) Ltd., (1996)
The Skipper Construction Company failed to pay the full purchase price of a plot to DDA. Instead, construction was started and space sold to various persons. The two sons of the directors who had business in their own names claimed that they had separated from the father and the companies they were running had nothing to do with the properties of their parents. But no satisfactory proof in support of their claim could be produced.
Held: that the transfer of shareholding between the father and the sons must also be treated as a sham. The fact that the director and members of his family had created several corporate bodies, did not prevent to the court from treating all of them as one entity belonging to and controlled by the director and his family.
6. Where a Company Formed is Against Public Interest or Public Policy
Daimler Co. Ltd., vs. Continental Tyre and Rubber Co. (1916)
C company was floated in London for marketing tyres manufactured in Germany. The majority of the C’s shares were held by German nationals residing in Germany. During World War I, C company filed a suit against D company for the recovery of trade debt. The D company contented that C company was an alien enemy company (Germany being at war with England at that time) and that the payment of the debt would be trading with the enemy. The court agreed with the contention of the defendants.
Salmon vs. Salmon & Co. Ltd., (1877)
Salmon was a leather merchant. He sold his business for a sum of £30,000 to a company formed by him along with his wife, a daughter and four sons. The purchase consideration was satisfied by allotment of 20,000 shares of £1 each and issue of debentures worth £10,000, secured by a floating charge on the company’s assets in favour of Mr. Salmon. All the share holders subscribed for one share of £1 each. Mr. Salmon was appointed the managing director of the company. The company almost immediately ran into difficulties and eventually become insolvent and winding up commenced. At the time of winding up, the total assets of the company amounted to £6,050; its liabilities were £10,000 secured by the debentures issued to Mr. Salmon and £8,000 owing to unsecured trade creditors. The unsecured sundry creditors claimed the whole of the company’s assets, viz. £6,050 on the ground that company was a mere alias or agent for Salmon.
Held: The contention of the trade creditors could not be maintained because the company, being by law a person quite distinct from its members, could not be regarded as an ‘alias’ or agent or trustee for Salmon. Also the company’s assets must be applied in payment of the debentures as a secured creditor is entitled to payment out of the assets on which his debt is secured, on priority to unsecured creditors.
It can be inferred from Salmon’s case that there need not be any equilibrium or equitable distribution of voting amongst the members of the company. Mr. Salmon had £20,000 shares, whereas all other members had one share of £1 each.
Lee vs. Lee Farming Limited (1960)
A company was formed for the purpose of manufacturing aerial top-dressing. Lee, a qualified pilot, held all but one of the shares in the company and by the articles was appointed governing director of the company and chief pilot. Lee was killed while piloting the company’s aircraft and his widow claimed compensation for his death under the Workmen Compensation Act. The company opposed the claim on the ground that Lee was not a ‘worker’ as the same person could not be employer and the employee.
Held: There was a valid contract of service between Lee and the company and Lee, was therefore, a worker. Mrs. Lee’s contention was upheld.
2. Separate Property
Bacha F. Guzdar vs. The Commissioner of Income-Tax, Bombay (1955)
The plaintiff (Mrs Guzdar) received certain amounts as dividend in respect of shares held by her in a tea company. Under the Indian Income-tax Act, agricultural income is exempted from payment of income-tax. As income of a tea company is partly agricultural, only 40 per cent of the company’s income is treated as income from manufacture and sale, and therefore, liable to tax. The plaintiff claimed that the dividend income in her hands should be treated as agricultural income up to 60 per cent, as in the case tea company, on the ground that dividends received by shareholders represented the income of the company.
Held: Though the income in the hands of the company was partly agricultural yet the same income when received by Mrs. Guzdar as dividend could not be regarded as agricultural income.
It can be referred from Mrs. Guzdar’s case that a shareholder of a company is not a part-owner or co-owner of the company or its property. He is only given certain rights by law, for example, to attend and vote at the meetings of the shareholders, to receive dividend. Thus the property of the company belongs to the company and not to its shareholders.
Macaure vs. Northern Insurance co. Ltd., (1925)
‘Macaure’ held all except one share of a timber company. He had also advanced substantial amount to the company. He got insured the company’s timber in his personal name. On timber being destroyed by fire his claim was rejected for want of insurable interest. The court, applying principle of separate legal entity, held that the insurance company was not liable.
3. For The Protection of Revenue
In re Sir Dinshaw Maneckjee Petit (1927)
D was a rich man having dividend and interest income. He wanted to avoid income-tax. For this purpose, he formed four private companies, in all of which he was the majority share holder. The companies made investments and whenever interest and dividend income were received by the companies, D applied to the companies for loans, which were immediately granted and he never repaid. In a legal proceeding the corporate veil of all the companies were lifted and the income of the companies treated as if they were of ‘D’.
4. Where a Company has been Formed by Certain Persons to Avoid their Own Valid Contractual Obligations
Gilford Motor Co. Vs. Horne (1933)
A sold his business to B and agreed not to compete with him for a given number of years within reasonable local limits. A, desirous of re-entering business, in violation of the contractual obligation, formed a private company with majority shareholdings. B filed a suit against A and the private company and the court granted an injunction restraining A and his company with going ahead in the competing business.
5. Where a Company has been Formed for Some Fraudulent Purpose or Is A ‘Sham’
Construction Company (P) Ltd., (1996)
The Skipper Construction Company failed to pay the full purchase price of a plot to DDA. Instead, construction was started and space sold to various persons. The two sons of the directors who had business in their own names claimed that they had separated from the father and the companies they were running had nothing to do with the properties of their parents. But no satisfactory proof in support of their claim could be produced.
Held: that the transfer of shareholding between the father and the sons must also be treated as a sham. The fact that the director and members of his family had created several corporate bodies, did not prevent to the court from treating all of them as one entity belonging to and controlled by the director and his family.
6. Where a Company Formed is Against Public Interest or Public Policy
Daimler Co. Ltd., vs. Continental Tyre and Rubber Co. (1916)
C company was floated in London for marketing tyres manufactured in Germany. The majority of the C’s shares were held by German nationals residing in Germany. During World War I, C company filed a suit against D company for the recovery of trade debt. The D company contented that C company was an alien enemy company (Germany being at war with England at that time) and that the payment of the debt would be trading with the enemy. The court agreed with the contention of the defendants.
Wednesday, September 23, 2009
Cases on contract Act
Consideration
1.Abdul Aziz vs. Masum Ali, (1914).
The secretary of a Mosque Committee filed a suit to enforce a promise which the promisor had made to subscribe Rs. 500 to the re-building of a mosque.
Held: “the promise was not enforceable because there was no consideration in the sense of benefit”, as “the person who made the promise gained nothing in return for the promise made”, and the secretary of the Committee to whom the promise was made, suffered no detriment as nothing had been done to carry out the repairs. Hence the suit was dismissed.
2.Kedar Nath vs. Gauri Mohamed, (1886)
The facts of this case were almost similar to those of the above case, but the secretary in this case incurred a liability on the strength of the promise.
Held: The amount could be recovered, as the promise resulted in a sufficient detriment to the secretary. The promise could, however, be enforced only to the extent of the liability (detriment) incurred by the secretary. In this case, the promise, even though it was gratuitous, became enforceable because on the faith of the promise secretary had incurred a detriment.
3.Durga Prasad vs. Baldeo, (1880)
B spent some money on the improvement of a market at the desire of the Collector of the district. In consideration of this D who was using the market promised to pay some money to B.
Held: The agreement was void being without consideration as it had not moved at the desire of D.
4.Chinnaya vs. Ramayya, (1882)
An old lady, by a deed of gift, made over certain property to her daughter D, under the direction that she should pay her aunt, P (sister of the old lady), a certain sum of money annually. The same day D entered into an agreement with P to pay her the agreed amount. Later, D refused to pay the amount on the plea that no consideration had moved from P to D.
Held: P was entitled to maintain suit as consideration had moved from the old lady, sister of P, to the daughter, D.
5. Debi Radha Rani vs. Ram Dass, (1941)
D is ready to sue her husband for maintenance allowance. On husband’s agreeing to pay her a monthly allowance by way of maintenance, she forbears to sue.
Held: The wife’s forbearance to sue amount to consideration for the husband’s agreement for payment of maintenance allowance.
6. Ramchandra Chintaman vs. Kalu Raju, (1877)
There was a promise to pay to the Vakil an additional sum if the suit was successful.
Held: The promise was void for want of consideration. The Vakil was under a pre-existing contractual obligation to render the best of his services under the original contract.
7. Dunlop Pneumatic Tyres Co. Ltd. Vs. Selfridge & Co. Ltd., (1915)
S bought tyres from the Dunlop Rubber Co. & sold them to D, a sub-dealer, who agreed with S not to sell these tyres below Dunlop’s list price and to pay the Dunlop Co. £5 as damages on every tyre D undersold, D sold two tyres at less than the list price and thereupon the Dunlop Co. Sued him for the breach.
Held: The Dunlop Co. Could not maintain the suit as it was stranger to the contract.
Capacity to Contract
Mohiri Bibi vs. Dharmodas Ghose, (1903)
In this case, a minor mortgaged his house in favour of a money-lender to secure a loan of Rs. 20,000 out of which the mortgagee (the money-lender) paid the minor a sum of Rs. 8,000. Subsequently the minor sued for setting aside the mortgage, stating that he was underage when he executed the mortgage.
Held: The mortgage was void and, therefore, it was cancelled. Further the money-lender’s request for the repayment of the amount advanced to the minor as part of the consideration for the mortgage was also not accepted.
Mistake of Law
Solle vs. Butcher, (1950)
Ignorantia juris non excusat, i.e., ignorance of law is no excuse, is a well settled rule of law. A party cannot be allowed to get any relief on the ground that it had done a particular act in ignorance of law. A mistake of law is, therefore, no excuse, and the contract cannot be avoided.
Mistake as to the Subject-Matter
Couturier vs. Hastie, (1856)
A agreed to sell a cargo of corn supposed at the time of contract to be in transit from Salonica to the United Kingdom. Unknown to the parties, the corn had become fermented and had already been sold by the master of the ship at Tunis.
Held: The agreement was void and the buyer was not liable for the price.
Mistake as to the Identity of the Subject-Matter
Raffles vs. Wichelhaus, (1864)
W agreed to buy from R a cargo of cotton “to arrive ex-peerless from Bombay”. There were two ships of that name sailing from Bombay, one sailing in October and the other in December. W meant the former ship but R meant the latter contract.
Remedies for Breach of Contract
Hadley vs. Baxendale
X’s mill was stopped by the breakdown of a shaft. He delivered the shaft to Y, a common carrier, to be taken to a manufacturer to copy it make a new one. X did not make known to Y that delay would result in loss of profits. By some neglect on the part of Y the delivery of the shaft was delayed in transit beyond a reasonable time (so that the mill was idle for a longer period than otherwise would have been the case had there been no breach of the contract of carriage).
Held: Y was not liable for loss of profits during the period of delay as the circumstances communicated to Y did not show that a delay in the delivery of the shaft would entail loss of profits to the mill.
Alderson, B observed in this case as follows:
“Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both the parties at the time they made the contract, as the probable result of the breach of it.”
Quasi Contracts
Damodar Mudaliar vs. Secretary of State for India, (1894)
A village was irrigated by a tank. The Government effected certain repairs to the tank for its preservation and had no intention to do so gratuitously for the zamindars. The zamindars enjoyed the benefit thereof.
Held: They were liable to contribute.
Acknowledgements:
Mercantile law by ND Kapoor
Nimita Singh
1.Abdul Aziz vs. Masum Ali, (1914).
The secretary of a Mosque Committee filed a suit to enforce a promise which the promisor had made to subscribe Rs. 500 to the re-building of a mosque.
Held: “the promise was not enforceable because there was no consideration in the sense of benefit”, as “the person who made the promise gained nothing in return for the promise made”, and the secretary of the Committee to whom the promise was made, suffered no detriment as nothing had been done to carry out the repairs. Hence the suit was dismissed.
2.Kedar Nath vs. Gauri Mohamed, (1886)
The facts of this case were almost similar to those of the above case, but the secretary in this case incurred a liability on the strength of the promise.
Held: The amount could be recovered, as the promise resulted in a sufficient detriment to the secretary. The promise could, however, be enforced only to the extent of the liability (detriment) incurred by the secretary. In this case, the promise, even though it was gratuitous, became enforceable because on the faith of the promise secretary had incurred a detriment.
3.Durga Prasad vs. Baldeo, (1880)
B spent some money on the improvement of a market at the desire of the Collector of the district. In consideration of this D who was using the market promised to pay some money to B.
Held: The agreement was void being without consideration as it had not moved at the desire of D.
4.Chinnaya vs. Ramayya, (1882)
An old lady, by a deed of gift, made over certain property to her daughter D, under the direction that she should pay her aunt, P (sister of the old lady), a certain sum of money annually. The same day D entered into an agreement with P to pay her the agreed amount. Later, D refused to pay the amount on the plea that no consideration had moved from P to D.
Held: P was entitled to maintain suit as consideration had moved from the old lady, sister of P, to the daughter, D.
5. Debi Radha Rani vs. Ram Dass, (1941)
D is ready to sue her husband for maintenance allowance. On husband’s agreeing to pay her a monthly allowance by way of maintenance, she forbears to sue.
Held: The wife’s forbearance to sue amount to consideration for the husband’s agreement for payment of maintenance allowance.
6. Ramchandra Chintaman vs. Kalu Raju, (1877)
There was a promise to pay to the Vakil an additional sum if the suit was successful.
Held: The promise was void for want of consideration. The Vakil was under a pre-existing contractual obligation to render the best of his services under the original contract.
7. Dunlop Pneumatic Tyres Co. Ltd. Vs. Selfridge & Co. Ltd., (1915)
S bought tyres from the Dunlop Rubber Co. & sold them to D, a sub-dealer, who agreed with S not to sell these tyres below Dunlop’s list price and to pay the Dunlop Co. £5 as damages on every tyre D undersold, D sold two tyres at less than the list price and thereupon the Dunlop Co. Sued him for the breach.
Held: The Dunlop Co. Could not maintain the suit as it was stranger to the contract.
Capacity to Contract
Mohiri Bibi vs. Dharmodas Ghose, (1903)
In this case, a minor mortgaged his house in favour of a money-lender to secure a loan of Rs. 20,000 out of which the mortgagee (the money-lender) paid the minor a sum of Rs. 8,000. Subsequently the minor sued for setting aside the mortgage, stating that he was underage when he executed the mortgage.
Held: The mortgage was void and, therefore, it was cancelled. Further the money-lender’s request for the repayment of the amount advanced to the minor as part of the consideration for the mortgage was also not accepted.
Mistake of Law
Solle vs. Butcher, (1950)
Ignorantia juris non excusat, i.e., ignorance of law is no excuse, is a well settled rule of law. A party cannot be allowed to get any relief on the ground that it had done a particular act in ignorance of law. A mistake of law is, therefore, no excuse, and the contract cannot be avoided.
Mistake as to the Subject-Matter
Couturier vs. Hastie, (1856)
A agreed to sell a cargo of corn supposed at the time of contract to be in transit from Salonica to the United Kingdom. Unknown to the parties, the corn had become fermented and had already been sold by the master of the ship at Tunis.
Held: The agreement was void and the buyer was not liable for the price.
Mistake as to the Identity of the Subject-Matter
Raffles vs. Wichelhaus, (1864)
W agreed to buy from R a cargo of cotton “to arrive ex-peerless from Bombay”. There were two ships of that name sailing from Bombay, one sailing in October and the other in December. W meant the former ship but R meant the latter contract.
Remedies for Breach of Contract
Hadley vs. Baxendale
X’s mill was stopped by the breakdown of a shaft. He delivered the shaft to Y, a common carrier, to be taken to a manufacturer to copy it make a new one. X did not make known to Y that delay would result in loss of profits. By some neglect on the part of Y the delivery of the shaft was delayed in transit beyond a reasonable time (so that the mill was idle for a longer period than otherwise would have been the case had there been no breach of the contract of carriage).
Held: Y was not liable for loss of profits during the period of delay as the circumstances communicated to Y did not show that a delay in the delivery of the shaft would entail loss of profits to the mill.
Alderson, B observed in this case as follows:
“Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both the parties at the time they made the contract, as the probable result of the breach of it.”
Quasi Contracts
Damodar Mudaliar vs. Secretary of State for India, (1894)
A village was irrigated by a tank. The Government effected certain repairs to the tank for its preservation and had no intention to do so gratuitously for the zamindars. The zamindars enjoyed the benefit thereof.
Held: They were liable to contribute.
Acknowledgements:
Mercantile law by ND Kapoor
Nimita Singh
Tuesday, September 22, 2009
Assignment- 2
Note: Date of submission: 1.10.2009
Assignment
1. Describe the essentials of a valid contract with the help of relevant case law and examples.
2. What is quantum meruit? Explain the cases in which the claim of quantum meruit arises.
3. What are the remedies available to a seller in case of breach of contract of sale.
4. Discuss the various kinds of partners in a partnership firm.
5. What are the different modes through which a partnership firm may be dissolved.
6. Analyse the following cases and answer the questions with the help of statutory provisions and decided cases
Case Number 1
A representative from Eureka Forbes visits Andrew on the 1st February 2009. He informs Andrew that his company is prepared to install Aquaguard at a guaranteed price of Rs 5000. Andrew is hesitant and decides to think the matter over. The representative leaves, pointing out that the guaranteed price only remained open till 8th February 2009.
On the following day, Andrew sees an advertisement by Eureka forbes, which offers Aquaguard at a standard price of Rs 4500. He immediately telephones Eureka forbes in order to accept the terms of this advertisement. The company replies that owing to high demand, the advertised offer has been withdrawn.
On 7th February 2009, Andrew telephones Eureka Forbes again. He leaves a message with the answering service in which he accepts the offer of Rs 5000 made by the company representative. He also sends a letter confirming the order that afternoon. Andrew later goes to the pub for a drink where he meets a friend who informs him that he can obtain Aquaguard from another firm for Rs 4000. Andrew rushes home and telephones Eureka Forbes expressing his wish to cancel the order. The secretary, now on duty, points out that she has not yet had an opportunity of listening to the answering service tapes but that she will note down his wishes. Andrew’s letter of the 7th Feb 2009 arrives on the 9th Feb 2009 at Eureka Forbes Premises. The letter is received by the secretary of Eureka Forbes. Whether there is a valid contract between Andrew and Eureka Forbes.
Case Number 2
In Re McArdle 1951, a number of children were entitled to a house on the death of their mother. Whilst the mother was still alive, her son and daughter-in-law lived with her and the daughter-in-law made improvements to the property. The children later promised that they would pay the daughter-in-law for this work, but after her mother-in-law’s death, the children refused to pay. Was the daughter-in-law able to claim this payment?
Case Number 3
D bought tyres from Dunlop Co.and sold them to S a sub dealer, who agreed with D not
to sell below Dunlop’s list pirce and to pay Dunlop Co.Rs 75 as damages on every tyre he undersold. S sold two tyres at less than the list price and thereon Dunlop Co.sued him for the breach. Will Dunlop and Co succeed? Decide with the help of relevant law and cases.
Case Number 4
A contracts with B to build a house for B for RS 3,00,000/- After A has proceeded with the work for sometime and before the work is completed. B repudiates the contract and prevents A from proceeding with the work. What are the remedies available to A?
Assignment
1. Describe the essentials of a valid contract with the help of relevant case law and examples.
2. What is quantum meruit? Explain the cases in which the claim of quantum meruit arises.
3. What are the remedies available to a seller in case of breach of contract of sale.
4. Discuss the various kinds of partners in a partnership firm.
5. What are the different modes through which a partnership firm may be dissolved.
6. Analyse the following cases and answer the questions with the help of statutory provisions and decided cases
Case Number 1
A representative from Eureka Forbes visits Andrew on the 1st February 2009. He informs Andrew that his company is prepared to install Aquaguard at a guaranteed price of Rs 5000. Andrew is hesitant and decides to think the matter over. The representative leaves, pointing out that the guaranteed price only remained open till 8th February 2009.
On the following day, Andrew sees an advertisement by Eureka forbes, which offers Aquaguard at a standard price of Rs 4500. He immediately telephones Eureka forbes in order to accept the terms of this advertisement. The company replies that owing to high demand, the advertised offer has been withdrawn.
On 7th February 2009, Andrew telephones Eureka Forbes again. He leaves a message with the answering service in which he accepts the offer of Rs 5000 made by the company representative. He also sends a letter confirming the order that afternoon. Andrew later goes to the pub for a drink where he meets a friend who informs him that he can obtain Aquaguard from another firm for Rs 4000. Andrew rushes home and telephones Eureka Forbes expressing his wish to cancel the order. The secretary, now on duty, points out that she has not yet had an opportunity of listening to the answering service tapes but that she will note down his wishes. Andrew’s letter of the 7th Feb 2009 arrives on the 9th Feb 2009 at Eureka Forbes Premises. The letter is received by the secretary of Eureka Forbes. Whether there is a valid contract between Andrew and Eureka Forbes.
Case Number 2
In Re McArdle 1951, a number of children were entitled to a house on the death of their mother. Whilst the mother was still alive, her son and daughter-in-law lived with her and the daughter-in-law made improvements to the property. The children later promised that they would pay the daughter-in-law for this work, but after her mother-in-law’s death, the children refused to pay. Was the daughter-in-law able to claim this payment?
Case Number 3
D bought tyres from Dunlop Co.and sold them to S a sub dealer, who agreed with D not
to sell below Dunlop’s list pirce and to pay Dunlop Co.Rs 75 as damages on every tyre he undersold. S sold two tyres at less than the list price and thereon Dunlop Co.sued him for the breach. Will Dunlop and Co succeed? Decide with the help of relevant law and cases.
Case Number 4
A contracts with B to build a house for B for RS 3,00,000/- After A has proceeded with the work for sometime and before the work is completed. B repudiates the contract and prevents A from proceeding with the work. What are the remedies available to A?
Thursday, September 3, 2009
Thursday, August 27, 2009
Tips to improve learning
1. Read the lesson once thoroughly. Close the book, try recalling what you have read.
2. Take small breaks in between studying. A student cannot concentrate for more than 45 minutes at a stretch.
3. Read out loudly (even if it disturbs other people in the house), other noises will not bother you!
4.Prepare point wise notes on flash cards.it is easier for revising.
5.Revise regularly.
6. Teach somebody else a difficult concept, it will be much clearer to you.
2. Take small breaks in between studying. A student cannot concentrate for more than 45 minutes at a stretch.
3. Read out loudly (even if it disturbs other people in the house), other noises will not bother you!
4.Prepare point wise notes on flash cards.it is easier for revising.
5.Revise regularly.
6. Teach somebody else a difficult concept, it will be much clearer to you.
Tuesday, August 25, 2009
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