Mock Test Paper - Series II: December, 2024

Date of Paper: 10th December, 2024

Time of Paper: 2 P.M. to 5 P.M.

INTERMEDIATE COURSE: GROUP – I

PAPER – 2: CORPORATE AND OTHER LAWS
Time Allowed – 3 Hours Maximum Marks – 100
1. The question paper comprises two parts, Part I and Part II.
2. Part I comprises Case Scenario based Multiple Choice Questions (MCQs)
3. Part II comprises questions which require descriptive type answers.

PART I – Case Scenario based MCQs (30 Marks)

Part I is compulsory
Case Scenario 1
Mr. V started a new venture of on-line business of supply of grocery items at the
door- step of consumers. Initially it was having the area of operations of
Saharanpur city only. He employed some young boys having their own bikes and
allocated the areas which they were accustomed of it, for making delivery of the
grocery items as per their orders. He also got developed a website and Mobile App
to receive the orders on-line. His friend Sundaram who is a Chartered Accountant,
suggested him to corporatize this business form, from proprietorship business to a
One Person Company (OPC). Mr. V agreed and a OPC was incorporated in the
name of “Ask V Online Grocery (OPC) Pvt Ltd.” (for short OPC-1). In this OPC Mr.
V became the member and director and Sudha (the mother of Mr. V) was made as
nominee.
After a year Mr. V got married with Vani. Since the business of on-line supply of
grocery was on rising trend, day by day, he thought to start a new business of
supply of Milk and Milk Products and another OPC in the name of “Vani Milk
Products (OPC) Pvt Ltd” (for short OPC-2) was incorporated with the help of his
professional friend Sundaram. In this OPC-2, Vani (his wife) became the member
and director and Mr. V was named as Nominee.
To summarise the position, the information is tabulated as under:
Name of OPC Ask Mr. V4Online Vani Milk Products
Grocery (OPC) Pvt Ltd (OPC) Pvt Ltd [OPC-2]
[OPC-1]
Member and Mr. V Vani
Director
Nominee Sudha (Mother of Mr. V) Mr. V (Husband of Vani)

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After some time, Sudha (the mother of Mr. V) passed away. However, before the
death, Sudha had made a WILL, in which she mentioned that after her demise, her
another son Krishh be made nominee in the OPC-1. When Krishh came to know
this fact, he argued with Mr. V to fulfil the wish of Sudha as per her WILL (Mother
of Mr. V and Krishh), but Mr. V denied this and appointed Vani (his wife) as
nominee.
Aggrieved from the decision of Mr. V for not nominating him (Krishh), Krishh
threatened Mr. V to take appropriate legal action against him for not honouring the
WILL of Sudha and consulted his lawyer. Meanwhile due to continuous threatening
and unpleasant conversation between Krishh and Mr. V, Vani became mentally
upset and became insane, as certified by the medical doctor, so lost her capacity
to contract. In this situation, Mr. V being the nominee in OPC-2 became member
and director of this OPC-2.
One of the friends of Mr. V advised him to do some charitable work of providing
free education to the girl children of his native village near by Saharanpur. Mr. V
thought about this proposal and asked his professional friend Sundaram to convert
this OPC-2 into Section 8 company.
On the basis of above facts and by applying applicable provisions of the Companies
Act, 2013 and the applicable Rules therein, choose the correct answer (one out of
four) of the following Multiple Choice Questions (MCQs 1-5, of 2 marks each) given
herein under:
1. Since Vani, being insane, lost the capacity to contract, Mr. V (who was
nominee) became the member of OPC-2. Now who will make nomination for
this OPC:
(a) Mr. V in the capacity of husband of Vani can nominate any person as
Nominee of OPC-2
(b) Mr. V (who was nominee) of OPC-2 has now become member of this
OPC and now as a member of this OPC he can nominate any person as
per his choice as Nominee for this OPC.
(c) When no person is nominated, the Central Govt. will make nomination
of such OPC-2.
(d) When no person is nominated the Registrar shall order the company to
be wound up.
2. Whether conversion of OPC-2 into a company governed by Section 8 is
permissible?
(a) Yes, OPC can be converted into Section 8 company
(b) No, OPC cannot be converted into Section 8 company
(c) This OPC-2 can be converted into section 8 company, provided the
Central Govt give license
(d) Providing of free education to girl child do not come under the specified
objects mentioned for eligibility incorporation of section 8 company

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3. Mr. V is a member in OPC-1 and became a member in another OPC-2 (on 2nd
April, 2024) by virtue of his being a nominee in that OPC-2. Mr. V shall, by
what date, meet the eligibility criteria that an individual can be a member in
only one OPC:
(a) 17th May 2024
(b) 25th August 2024
(c) 26th August 2024
(d) 29th September 2024
4. After the demise of Sudha (the mother of Mr. V), Vani was nominated by
Mr. V for OPC-1 as Nominee. But now Vani has become insane, so what
recourse you will suggest to Mr. V:
(a) Mr. V is required to nominate another person as nominee
(b) Mr. V should wait till Vani becomes good of her health and able to have
the capacity to contract
(c) Although Vani has become insane, but if she is able to sign, her
nomination in OPC-1 may continue
(d) Sundaram (the Chartered Accountant) who helped in incorporation of
OPC-1, may act as legal consultant on behalf of Vani
5. Mr. V is preparing the financial statements for "Ask V Online Grocery (OPC)
Pvt Ltd" for the financial year. Which of the following statements is correct
regarding compliance with section 129 of the Companies Act, 2013?
(a) Financial statements of OPC-1 must include a cash flow statement.
(b) The financial statements must be presented and approved by a general
meeting of members.
(c) Mr. V, as the sole director, is responsible for approving the financial
statements before filing with the RoC.
(d) Consolidated financial statements must be prepared for OPC-1.
Case Scenario 2
DEF LLP is a well-established limited liability partnership engaged in providing
consulting services. It has four partners: A, B, C, and D, each contributing equally
to the capital and holding an equal share of the profits and losses, as detailed in
the LLP agreement. The partnership operates smoothly until Partner A encounters
significant financial difficulties due to personal business losses and decides to
transfer his entire share of profits and losses in the LLP to Mr. X, an external
investor, in exchange for financial assistance. The decision, although legal as per
the LLP agreement, creates a ripple of concerns among the other partners.
After the transfer:
• Partner B argues that the LLP must be dissolved because Partner A’s transfer
of rights effectively amounts to exiting the partnership, thus impacting the
continuity of the LLP.

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• Mr. X, being the transferee, demands active participation in DEF LLP’s
decision-making processes and insists on accessing financial records to
monitor his investment, citing the substantial stake he now holds in the LLP.
• Partner C voices concerns about the potential disruption in the LLP's
management structure and operations, questioning whether Mr. X’s
involvement aligns with the LLP’s existing framework and the provisions of the
Limited Liability Partnership Act, 2008.
• Partner D, on the other hand, adopts a neutral stance but raises the issue of
whether the LLP agreement sufficiently addresses such transfers to avoid
future disputes.
The situation creates a complex dynamic within DEF LLP, raising questions about
the rights of the transferee, the implications for the partnership's operations, and
the legal provisions governing such transfers under the Limited Liability Partnership
(LLP) Act, 2008.
On the basis of above facts and by applying applicable provisions of the Limited
Liability Partnership Act, 2008 and the applicable Rules therein, choose the correct
answer (one out of four) of the following Multiple Choice Questions (MCQs 6-8, of
2 marks each) given herein under:
6. Can Partner A legally transfer their share of profits and losses to Mr. X?
(a) No, Partner A cannot transfer their share without the consent of all other
partners.
(b) Yes, Partner A can transfer their share entirely in accordance with the
LLP agreement.
(c) No, such transfers are not allowed under the LLP Act.
(d) Yes, but only if Mr. X becomes a partner in the LLP.
7. Does the transfer of Partner A’s share to Mr. X result in the dissolution of DEF
LLP?
(a) Yes, because transferring all rights indicates Partner A’s disassociation.
(b) No, because the LLP Act, 2008 does not consider such transfers as
grounds for dissolution.
(c) Yes, because all partners must agree to such transfers to avoid
dissolution.
(d) No, unless it is explicitly stated in the LLP agreement.
8. Does Mr. X gain any right to participate in DEF LLP’s management or access
its financial records?
(a) Yes, as he now holds Partner A’s share in the LLP.
(b) No, unless expressly allowed by the LLP agreement.
(c) Yes, because it is essential to safeguard his investment.
(d) Yes, as external transferees are automatically included in LLP
management.
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Case Scenario 3
Sunrise Technologies Private Limited ("STPL") was in process of establishing its
new software development center in Pune. On 28th February, 2024, the Board of
Directors passed a resolution to purchase a property consisting of:

• A three-storey building
• 25 acres of agricultural land adjacent to the building
• 100 motor cars
• An orchard with 100 fruit-bearing trees
The company received a government notification dated 15th March, 2024, requiring
all new technology centers to obtain special clearance within 45 days of
establishment. The notification mentioned that existing orders under the previous
Technology Parks Act (which was repealed and replaced by new legislation) would
continue to remain valid. The notification was to be served to all concerned parties
through registered post.
The Managing Director has approached you to understand various legal aspects
under the General Clauses Act, 1897.
On the basis of above facts and by applying applicable provisions of the General
Clauses Act, 1897, choose the correct answer (one out of four) of the following
Multiple Choice Questions (MCQs 9-11, of 2 marks each) given herein under:
9. With respect to the property being purchased by STPL, which of the following
would not qualify as "immovable property" under the General Clauses Act,
1897?
(a) The orchard with fruit-bearing trees
(b) Motor Cars
(c) The three-storey building
(d) The agricultural land
10. The government notification requires clearance "within 45 days". If the
notification was received on 20th March, 2024, and the 45th day falls on
Sunday, May 4, 2024, what would be the last date for obtaining clearance?
(a) 3rd May, 2024
(b) 4th May, 2024
(c) 5th May, 2024
(d) 6th May, 2024
11. Concerning the previous orders under the repealed Technology Parks Act,
which statement is correct?
(a) All previous orders automatically become void
(b) Previous orders continue to be valid unless explicitly cancelled
(c) Previous orders require fresh validation under new law
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 (d) Previous orders are valid for only 6 months after repeal
Independent case scenarios
12. The Annual General Meeting (AGM) of Green Limited was held on 31.8.2024.
Suppose the Chairman of the company after two days of AGM went abroad
for next 31 days. Due to the unavailability of the Chairman, within time period
prescribed for submission of copy of report of AGM with the registrar, the
report as required was signed by two Directors of the company, of which one
was additional Director of the company. Comment on the signing of this report
of AGM.
(a) Yes, the signing is in order as the report can be signed by any director
in the absence of Chairman.
(b) No, the signing is not in order as only the Chairman is authorised to sign
the report
(c) Yes, the signing is in order, as in the absence of Chairman at least two
directors should sign the report.
(d) No, the signing is not in order, since in case the Chairman is unable to
sign, the report shall be signed by any two directors of the company, one
of whom shall be the Managing director, if there is one and company
secretary of the company. (2 Marks)
13. Sneha, a resident of India, wants to invest her savings. She considers buying
shares of a US-based company to benefit from the growing tech market. She
is unsure if such an investment is allowed under the Foreign Exchange
Management Act, 1999.
Advise whether Sneha can invest in shares of the US-based company?
(a) Yes, such investments are allowed.
(b) No, such investments are not allowed.
(c) Yes, but only if the investment is for US$ 5000.
(d) No, unless she is a non-resident Indian (NRI). (2 Marks)
14. Rahul, a resident of India and an avid horse-racing enthusiast, earns ₹ 5 lakh
as prize money from an international horse-racing event held in Dubai. He
wants to remit this amount to his personal foreign bank account for future
international race entries and training. He consults his banker to confirm if this
transaction is permissible under the Foreign Exchange Management Act
(FEMA), 1999.
Can Rahul remit his income from the international horse-racing event to his
foreign bank account under FEMA, 1999?
(a) Yes, as it is his earned income.
(b) No, as remittance of income from racing, riding, or any other hobby is
prohibited.
(c) Yes, but only with prior approval from the Reserve Bank of India (RBI).
(d) No, unless it is for charitable purposes. (2 Marks)
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15. Mr. Mudit works as an employee at ABC Private Limited with an annual salary
of ₹3,00,000, as specified in his employment contract. Mr. Mudit paid to the
company ₹ 3,50,000 in the nature of non-interest bearing security deposit.
Giving regard to the provisions of the Companies Act, 2013, choose the
correct option out of the following:
(a) The deposit is a valid transaction since it is a non-interest-bearing
security deposit provided under the terms of his employment.
(b) The deposit violates the Companies Act, 2013, because companies
cannot accept deposits from their employees.
(c) The deposit violates the Companies Act, 2013, as the amount exceeds
Mr. Mudit’s annual salary.
(d) The deposit is invalid unless approved by the company's shareholders
in a general meeting. (2 Marks)

PART – II Descriptive Questions (70 Marks)

Question No.1 is compulsory.
Attempt any Four questions out of the remaining Five questions.
1. (a) Nath Private Limited is a start-up company. Mr. P has been appointed
as Accounts Manager of Nath Private Limited. The Board meeting for
approval of accounts is to held be on 01.08.2024. For this he has to
prepare the financial statements for approval by the Board. Referring to
section 2(40) of the Companies Act, 2013, advise Mr. P about the
statements that are required to be prepared. (5 Marks)
(b) Mr. Ramchandra is a partner and in- charge (and certifies financial
statements) of A & Associates. The firm is appointed as an auditor firm
of Badri Limited (listed company). Mr. Ramchandra retires from A &
Associates and after some time join Gupta & Gupta firm as a partner, on
20/05/24. In the general meeting of Badri Limited held on 15/06/24, the
company appointed Gupta & Gupta firm as next auditor of the company.
Advise Badri Limited, whether the company has adhered to the provision
of the Company Act, 2013, by appointing Gupta & Gupta as auditor for
the company? (5 Marks)
(c) Referring to the provisions of the Foreign Exchange Management Act,
1999, state the kind of approval required for Payment of commission of
U.S. $ 20,000 on exports made towards equity investment in Joint
Ventures/Wholly Owned Subsidiaries abroad of Indian companies.
(4 Marks)
2. (a) Samay Publishing Limited facing acute cash crunch wants to utilise a
portion of ‘Deposit Repayment Reserve Account’ to pay off its short-
term creditors who are pressing hard for repayment of ` 20,00,000. Is it
justified to use funds lying in ‘Deposit Repayment Reserve Account’ in
this manner? Give your answer as per the provisions of the Companies
Act, 2013. (5 Marks)

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 (b) Mr. Kaushal is a Chartered and an MBA by profession, has been
appointed as an Executive Director on the Board of XYZ Limited. His job
profile includes advising the Board of Directors of the company on
various compliance matters, strategies, business plans, and risk matters
relating to the company. Keeping in view of above position whether Mr.
Kaushal can be classified as the Promoter of XYZ Limited? Examine the
same under the provisions of the Companies Act, 2013. (5 Marks)
(c) Explain the following with reference to the provisions of the General
Clauses Act, 1897:
(i) Person
(ii) Document (4 Marks)
3. (a) Trinity school started imparting education on 1st April, 2010, with the sole
objective of providing education to children of weaker society either free
of cost or at a very nominal fee depending upon the financial condition
of their parents. However, on 30th March 2024, it came to the knowledge
of the Central Government that the said school was operating by
violating the objects of its objective clause due to which it was granted
the status of a section 8 company under the Companies Act, 2013.
Describe what powers can be exercised by the Central Government
against the Trinity school, in such a case? (5 Marks)
(b) A General Meeting of ABC Private Ltd was scheduled to be held on
15thApril, 2024 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 10-04-2024 was deposited by Mr.
Y with the company at its registered office on 11-04-2024. Similarly,
another member Mr. W also gives two separate proxies to two individuals
named Mr. M and Mr. N. In the case of Mr. M, the proxy dated
12-04-2024 was deposited with the company on the same day and the
proxy form in favour of Mr. N was deposited on 14-04-2024. 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? (5 Marks)
(c) Write short notes on the following in understanding definitions while
interpreting statutes:
(i) Ambiguous definitions
(ii) Definitions subject to a contrary context (4 Marks)
4. (a) State the persons responsible for complying with the provisions
regarding maintenance of Books of Accounts of a company. Support with
the help of relevant provisions of the Companies Act, 2013. (5 Marks)

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 (b) Define the term ‘Small limited liability partnership’ as per the provisions
of the Limited Liability Partnership Act, 2008. (5 Marks)
(c) What are the differences between interpretation and construction in the
legal context, and how do these two concepts relate to each other as per
Interpretation of Statute? (4 Marks)
5. (a) Kedar Limited, an unlisted company, registered in the state of Haryana
with 100 shareholders want to organize the Annual General Meeting of
the company for the financial year 2023-2024 as under:
(i) The meeting shall be held on 28th September 2024 which happens
to be Rakshanda, a declared as holiday by the Haryana
Government.
(ii) The venue for the meeting shall be Lonavala, a hill resort in
Maharashtra. Out of 100 shareholders, 98 have given their consent
in writing for conducting the meeting in Lonavala.
Advise the company on the feasibility of the above with reference to the
provisions of the Companies Act, 2013. (5 Marks)
(b) Form Limited is engaged in the business of manufacturing shoes for kids.
It is required to hold its Annual General Meeting (AGM) for the financial
year ending 31st March 2024 by 30th September 2024. However, due to
internal disputes among the directors, the company was unable to
convene the AGM by the due date.
Explain the relevant provisions of the Companies Act, 2013, with respect
to the filing of the financial statements with the Registrar in this case.
(5 Marks)
(c) ABC Limited operates a factory situated near a river. As per a recent
Central Act, factories must be located at least 5 kilometers away from
any river. A dispute arises when an environmental agency claims that
ABC Limited's factory is only 4.5 kilometers away from the river, while
ABC Limited contends that the distance is 5.3 kilometers as per the road
distance measured along the winding path leading to the river.
Based on the provisions of the General Clauses Act, 1897, advise
whether the contention of ABC Limited is correct. (4 Marks)
6. (a) Mr. H acquired a property from PQR Limited which was mortgaged to
ABC Bank. He settled the dues to ABC Bank in full and the same was
registered with the sub-registrar who noted that the mortgage had been
settled. But neither the company nor ABC Bank filed particulars of
satisfaction of charge with the jurisdictional Registrar of Companies. Can
Mr. H approach the Registrar and seek any relief in this regard? Discuss
this matter in the light of provisions of the Companies Act, 2013.
(5 Marks)

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 OR
(a) Mr. Prakash purchased a commercial property in Mumbai belonging to
PQR Limited after entering into an agreement with the company. At the
time of registration, Mr. Prakash came to know that the title deed of the
company was not free and the company expressed its inability to get the
title deed transferred in Prakash’s name contending that he ought to
have the knowledge of charge created on the property of the company.
In line with the provisions of the Companies Act, 2013, advise whether
the contention of PQR Limited is correct? (5 Marks)
(b) XYZ Limited, a company incorporated outside India and to which
provisions of Chapter XXII of the Companies Act, 2013 are applicable,
entered into a contract with ABC Limited, an Indian company, for the
supply of machinery. After the machinery was delivered, ABC Limited
failed to make the payment citing defects in the machinery.
XYZ Limited discovered that it had failed to comply with certain
provisions of Chapter XXII of the Companies Act, 2013, relating to the
registration of foreign companies in India. Despite this, XYZ Limited
intends to file a suit against ABC Limited for payment.
Discuss whether XYZ Limited can initiate legal proceedings against ABC
Limited in light of the non-compliance with Chapter XXII of the
Companies Act, 2013.
Give your answer as per the provisions of the Companies Act, 2013 [read
along with the Companies (Registration of Foreign Companies) Rules,
2014]. (5 Marks)
(c) Explain the meaning of the followings terms as defined under the Foreign
Exchange Management Act, 1999:
(i) Authorised person
(ii) Currency (4 Marks)

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 Mock Test Paper - Series I: December, 2024
Date of Paper: 10th December, 2024
Time of Paper: 2 P.M. to 5 P.M.

INTERMEDIATE COURSE: GROUP – I

PAPER – 2: CORPORATE AND OTHER LAWS
ANSWER TO PART – I CASE SCENARIO BASED MCQS

1. (b)
2. (b)
3. (d)
4. (a)
5. (c)
6. (b)
7. (b)
8. (b)
9. (b)
10. (c)
11. (b)
12. (d)
13. (a)
14. (b)
15. (c)

ANSWERS OF PART – II DESCRIPTIVE QUESTIONS

1. (a) As per section 2(40) of the Companies Act, 2013, Financial Statement in
relation to a company, includes—
(i) a balance sheet as at the end of the financial year;
(ii) a profit and loss account, or in the case of a company carrying on
any activity not for profit, an income and expenditure account for
the financial year;
(iii) cash flow statement for the financial year;
(iv) a statement of changes in equity, if applicable; and
(v) any explanatory note annexed to, or forming part of, any document
referred to in sub-clause (i) to sub-clause (iv):

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 Exemption: As per the proviso to section 2(40), the financial statement,
with respect to one person company, small company, dormant company
and private company (if such private company is a start-up) may not
include the cash flow statement.
In the instant case, Mr. P has to prepare the prescribed financial
statements except Cash Flow Statement; since Nath Private Limited is
a start-up private company.
(b) According to section 139(2) of the Companies Act, 2013, no listed
company or a company belonging to such class or classes of companies
as may be prescribed, shall appoint or re-appoint—
(a) an individual as auditor for more than one term of five consecutive
years; and
(b) an audit firm as auditor for more than two terms of five consecutive
years.
Provided that –
(i) an individual auditor who has completed his term under clause (a)
shall not be eligible for re-appointment as auditor in the same
company for five years from the completion of his term;
(ii) an audit firm which has completed its term under clause (b), shall
not be eligible for re-appointment as auditor in the same company
for five years from the completion of such term.
Provided further that as on the date of appointment no audit firm having
a common partner or partners to the other audit firm, whose tenure has
expired in a company immediately preceding the financial year, shall be
appointed as auditor of the same company for a period of five years.
As per Explanation II in Rule 6(3) of the Companies (Audit and Auditors)
Rules, 2014, if a partner, who is in charge of an audit firm and also
certifies the financial statements of the company, retires from the said
firm and joins another firm of chartered accountants, such other firm shall
also be ineligible to be appointed for a period of five years.
Here, Mr. Ramchandra has retired from A & Associates and joined Gupta
& Gupta Firm. Mr. Ramchandra was a partner, in- charge Associates
(and certifies the financial statement of the company) in A & Associates.
He retires from A & Associates and joins Gupta & Gupta firm.
As per the facts of the question and provisions of law, Gupta & Gupta
Firm will also be ineligible, to be appointed as auditor of Badri Limited
(listed company) for a period of 5 years.
(c) Under provisions of section 5 of the Foreign Exchange Management Act,
1999 certain Rules have been made for drawal of Foreign Exchange for
Current Account transactions. As per these Rules, Foreign Exchange for
some of the Current Account transactions is prohibited. As regards some
other Current Account transactions, Foreign Exchange can be drawn
with prior permission of the Central Government while in case of some

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 Current Account transactions, prior permission of Reserve Bank of India
is required.
Accordingly, Payment of commission on exports made towards equity
investment in Joint Ventures/ Wholly Owned Subsidiaries abroad of
Indian companies, is a transactions for which drawal of foreign exchange
is prohibited.
In all the cases, where remittance of Foreign Exchange is allowed, either
by general or specific permission, the remitter has to obtain the Foreign
Exchange from an Authorised Person.
2. (a) Rule 13 of the Companies (Acceptance of Deposits) Rules, 2014, states
that the amount deposited in the ‘Deposit Repayment Reserve Account’
shall not be used by a company for any purpose other than repayment
of deposits.
In the given question, Samay Publishing Limited wants to utilise a portion
of ‘Deposit Repayment Reserve Account’ to pay off its short-term
creditors. Since there is a prohibition, Samay Publishing Limited is not
permitted to utilise its ‘Deposit Repayment Reserve Account’ to pay off
its short-term creditors.
(b) According to section 2(69) of the Companies Act, 2013, Promoter means
a person:-
(a) Who has been named as such in a prospectus or is identified by
the company in the annual return; or
(b) Who has control over the affairs of the company, directly or
indirectly whether as a shareholder, director or otherwise; or
(c) In accordance with whose advice, directions or instructions the
Board of Directors of the Company is accustomed to act.
Provided that nothing in sub-clause (c) shall apply to a person who is
acting merely in a professional capacity.
As the job profile of Mr. Kaushal is only limited to advise the Board of
Directors on various compliance matters, strategies, business plans and
risk matters relating to business of the company and that to only in a
professional capacity, he will not be classified as a Promoter of XYZ
Limited.
(c) (i) Person
According to section 3(42) of the General Clauses Act, 1897,
‘Person’ shall include any company or association or body of
individuals, whether incorporated or not.
(ii) Document
According to section 3(18) of the General Clauses Act, 1897,
‘Document’ shall include any matter written, expressed or
described upon any substance by means of letters, figures or marks
or by more than one of those means which is intended to be used
or which may be used, for the purpose or recording that matter.
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3. (a) Section 8 of the Companies Act, 2013 deals with the formation of
companies which are formed to promote the charitable objects of
commerce, art, science, education, sports etc. Such company intends to
apply its profit in promoting its objects. Section 8 companies are
registered by the Registrar only when a license is issued by the Central
Government to them. Since, Trinity school was a Section 8 company and
it had started violating the objects of its objective clause, hence in such
a situation the following powers can be exercised by the Central
Government:
(i) The Central Government may by order revoke the licence of the
company where the company contravenes any of the requirements
or the conditions of this sections subject to which a licence is issued
or where the affairs of the company are conducted fraudulently, or
violative of the objects of the company or prejudicial to public
interest, and on revocation the Registrar shall put ‘Limited’ or
‘Private Limited’ against the company’s name in the register. But
before such revocation, the Central Government must give it a
written notice of its intention to revoke the licence and opportunity
to be heard in the matter.
(ii) Where a licence is revoked, the Central Government may, by order,
if it is satisfied that it is essential in the public interest, direct that
the company be wound up under this Act or amalgamated with
another company registered under this section. However, no such
order shall be made unless the company is given a reasonable
opportunity of being heard.
(iii) Where a licence is revoked and where the Central Government is
satisfied that it is essential in the public interest that the company
registered under this section should be amalgamated with another
company registered under this section and having similar objects,
then, notwithstanding anything to the contrary contained in this Act,
the Central Government may, by order, provide for such
amalgamation to form a single company with such constitution,
properties, powers, rights, interest, authorities and privileges and
with such liabilities, duties and obligations as may be specified in
the order.
(b) Validity of Resolution passed in the EGM called by the
Requisitionists
A Proxy is an instrument in writing executed by a shareholder authorizing
another person to attend a meeting and to vote thereat on his behalf and
in his absence. As per the provisions of section 105 of the Companies
Act, 2013, every shareholder who is entitled to attend and vote has a
statutory right to appoint another person as his proxy. Section 105(4)
provides that a proxy received 48 hours before the meeting will be valid.
Further, any provision in the articles of association of the company
requiring instrument of proxy to be lodged with the company more than
48 hours before a meeting shall have effect as if 48 hours had been
specified therein.
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 Thus, in case of member X, the proxy Y will be permitted to represent as
proxy on his behalf as form for appointing proxy was submitted within
the permitted time.
However, in the case of member W, the proxy M will be permitted to
represent as the proxy. Whereas submission of form authorizing N to
represent as proxy was deposited in less than 48 hours before the
meeting, so N will not be allowed to represent W.
(c) (i) Ambiguous definitions: Sometime, we may find that the definition
section may itself be ambiguous, and so it may have to be
interpreted in the light of the other provisions of the Act and having
regard to the ordinary meaning of the word defined. Such type of
definition is not to be read in isolation. It must be read in the context
of the phrase which it defines, realising that the function of a
definition is to give accuracy and certainty to a word or phrase
which would otherwise be vague and uncertain but not to contradict
it or depose it altogether.
(ii) Definitions subject to a contrary context: When a word is
defined to bear a number of inclusive meanings, the sense in which
the word is used in a particular provision must be ascertained from
the context of the scheme of the Act, the language of the provision
and the object intended to be served thereby.
4. (a) Persons responsible to maintain books: As per section 128 (6) of the
Companies Act, 2013, the person responsible to take all reasonable
steps to secure compliance by the company with the requirement of
maintenance of books of account etc. shall be:
(a) Managing Director,
(b) Whole-Time Director, in charge of finance
(c) Chief Financial Officer
(d) Any other person of a company charged by the Board with duty of
complying with provisions of section 128.
(b) Small limited liability partnership
According to section 2(1)(ta) of the Limited Liability Partnership Act,
2008, small limited liability partnership means a limited liability
partnership:
(i) the contribution of which, does not exceed 25 lakh rupees or such
higher amount, not exceeding 5 crore rupees, as may be
prescribed; and
(ii) the turnover of which, as per the Statement of Accounts and
Solvency for the immediately preceding financial year, does not
exceed 40 lakh rupees or such higher amount, not exceeding 50
crore rupees, as may be prescribed; or
(iii) which meets such other requirements as may be prescribed, and
fulfils such terms and conditions as may be prescribed.

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 (c) Difference and Relationship between Interpretation and
Construction
The two terms- ‘Interpretation’ and ‘Construction’, are used
interchangeably to denote a process adopted by the courts to ascertain
the meaning of the legislature from the words with which it is expressed,
these two terms have different connotations.
Interpretation is the art of ascertaining the meaning of words and the true
sense in which the author intended that they should be understood.
Thus, where the Court adheres to the plain meaning of the language
used by the legislature, it would be ‘interpretation’ of the words, but
where the meaning is not plain, the court has to decide whether the
wording was meant to cover the situation before the court. Here, the
court would be resorting to ‘construction’. Conclusions drawn by means
of construction are within the spirit though not necessarily within the
letter of the law.
In practice construction includes interpretation and the terms are
frequently used synonymously.
5. (a) Section 96(2) of the Companies Act, 2013 states that every Annual
General Meeting (AGM) shall be called on any day that is not a National
Holiday and 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.
However, AGM of an unlisted company may be held at any place in India
if consent is given in writing or by electronic mode by all the members in
advance.
Explanation—For the purposes of this sub-section, "National Holiday"
means and includes a day declared as National Holiday by the Central
Government.
In the instant case,
(i) Kedar Limited, an unlisted company, can hold its AGM on 28 th
September, 2024 which happens to be a holiday declared by
Haryana Government because this is not a national holiday.
(ii) Kedar Limited cannot hold its AGM in Lonavala, a hill resort in
Maharashtra because consent for this has to be given by all the
members in advance and here only 98 members out of 100 have
given their consent for conducting the meeting in Lonavala.
(b) As per section 137 of the Companies Act, 2013, where the Annual
General Meeting of a company for any year has not been held, the
financial statements along with the documents required to be attached,
duly signed along with the statement of facts and reasons for not holding
the AGM shall be filed with the Registrar within 30 days of the last date
before which the AGM should have been held and in such manner, with
such fees or additional fees as may be prescribed.

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 (c) According to section 11 of the General Clauses Act, 1897, in the
measurement of any distance, for the purposes of any Central Act or
Regulation made after the commencement of this Act, that distance
shall, unless a different intention appears, be measured in a straight line
on a horizontal plane.
In this case, the distance between ABC Limited’s factory and the river
must be measured in a straight line on a horizontal plane, not based on
the road or path distance. The environmental agency's claim that the
factory is only 4.5 kilometers away in a straight line is correct. Since this
measurement is less than the required 5 kilometers, the factory does not
comply with the law.
Therefore, ABC Limited’s contention is not correct.
6. (a) Section 83 of the Companies Act, 2013 empowers the Registrar to make
entries with respect to the satisfaction and release of charge even if no
intimation has been received by him from the company. Accordingly, with
respect to any registered charge if an evidence is shown to the
satisfaction of Registrar that the debt secured by charge has been paid
or satisfied in whole or in part or that the part of the property or
undertaking charged has been released from the charge or has ceased
to form part of the company’s property or undertaking, then he may enter
in the register of charges a memorandum of satisfaction that:
 the debt has been satisfied in whole or in part; or
 the part of the property or undertaking has been released from the
charge or has ceased to form part of the company’s property or
undertaking.
This power can be exercised by the Registrar despite the fact that no
intimation has been received by him from the company.
The Registrar shall inform the affected parties within 30 days of making
the entry in the Register of Charges.
Issue of Certificate: As per Rule 8 (2), in case the Registrar enters a
memorandum of satisfaction of charge in full, he shall issue a certificate
of registration of satisfaction of charge in Form No. CHG-5.
Therefore, Mr. H can approach the Registrar and show evidence to his
satisfaction that the charge has been duly settled and satisfied and
request the Registrar to enter a memorandum of satisfaction noting the
release of charge.
OR
(a) According to section 80 of the Companies Act, 2013, where any charge
on any property or assets of a company or any of its undertakings is
registered under section 77 of the Companies Act, 2013, any person
acquiring such property, assets, undertakings or part thereof or any
share or interest therein shall be deemed to have notice of the charge
from the date of such registration.

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 Thus, section 80 clarifies that if any person acquires a property, assets
or undertaking in respect of which a charge is already registered, it would
be deemed that he has complete knowledge of charge from the date of
its registration. Mr. Prakash, therefore, ought to have been careful while
purchasing property and should have verified beforehand that PQR
Limited had already created a charge on the property.
In view of above, the contention of PQR Limited is correct.
(b) According to section 393 of the Companies Act, 2013, any failure by a
company to comply with the provisions of Chapter XXII of the Companies
Act, 2013, shall not affect the validity of any contract, dealing or
transaction entered into by the company or its liability to be sued in
respect thereof. However, the company shall not be entitled to bring any
suit, claim any set-off, make any counter-claim or institute any legal
proceeding in respect of any such contract, dealing or transaction, until
the company has complied with the provisions of the Companies Act,
2013, applicable to it.
In this given question, XYZ Limited, a company incorporated outside
India, has failed to comply with certain provisions of Chapter XXII of the
Companies Act, 2013, which governs the registration and compliance
requirements for foreign companies operating in India.
According to the Companies Act, 2013, non-compliance with Chapter
XXII does not affect the validity of any contract, dealing, or transaction
entered into by the company. Therefore, the contract between XYZ
Limited and ABC Limited remains valid, and ABC Limited is still legally
bound to fulfill its contractual obligations, including the payment for the
machinery supplied.
Further, XYZ Limited cannot bring a suit, claim any set-off, make any
counter-claim, or institute any legal proceeding related to the contract as
it has not complied with certain provisions of Chapter XXII.
(c) (i) Authorised person
According to section 2(c) of the Foreign Exchange Management
Act, 1999, Authorised person means an authorised dealer, money
changer, off- shore banking unit or any other person for the time
being authorised under section 10(1) to deal in foreign exchange
or foreign securities.
(ii) Currency
According to section 2(h) of the Foreign Exchange Management
Act, 1999, Currency includes all currency notes, postal notes,
postal orders, money orders, cheques, drafts, travelers’ cheques,
letters of credit, bills of exchange and promissory notes, credit
cards or such other similar instruments, as may be notified by the
Reserve Bank.