Master of Business Administration- MBA Semester 3 MB 0051: “Legal Aspects of Business” (Book ID: B1725) Assignment Set-1 Q1.

What are the sources of Indian law? Discuss any one important source of law and justify why it is important Answer: The main sources of modern Indian law may be divided into two broad categories: 1. Primary sources 2. Secondary sources Primary sources of Indian Law: The primary sources of Indian Law are:     Custom Judicial precedent (stare decisis) Statute Personal law

Custom: Customs have played an important role in making law and therefore are also known as customary laws. In simple words, it is a generally observed course of conduct by people on a particular matter. When a particular course of conduct is followed again and again, it becomes a custom. Judicial precedent: Judicial precedent is another important source of laws. It is based on the principle that a rule of law that has been settled by a series of decisions generally should be binding in court and followed in similar cases. The literal meaning of this phrase is “standing by the decision”. Statute: Statutory law or legislation is the main source of law. This law is created by legislation of bodies such as the Parliament. It is called statute law because it is the writ of the state and is in written form (jus scriptum). In India, the Constitution empowers the Parliament and state legislatures to promulgate law for the guidance or conduct of people to whom the statute is made applicable, either expressly or by implication. Personal Law: Many times, a point of issue between the parties to a dispute is not covered by any statute or custom. In such cases, courts are required to apply the personal law of the parties. Thus, in certain matters, we follow the personal laws of Hindus, Mohammedans and Christians. Importance of Law: Justice, equity and good conscience, Unlike in England, in India, we do not have separate courts administering equity. However, the equitable principles of law, i.e., justice, equity and good conscience are the guiding forces behind most of the statutes and courts decisions in our country. In instances where the law is silent on any point or there is some lacuna in a statute, the principles of equity are

Anil is the principal and Bharat is his agent. a broker. The relationship between Anil and Bharat is called an agency and is based on an agreement whereby one person acts for another in transaction with a third person. Answer: Agent & Agency: According to Section 182. Anil appoints Bharat. the person delivering the goods is called the ‘bailor’ and the person to whom the goods are delivered is called the ‘bailee’. to sell his Maruti car on his behalf. X has the right to sue the airlines for breach of contract. then the other party has a remedy in law. Delivery of the possession is not necessary where one person. an agent is a person who acts in place of another. If the party who had agreed to do something fails to do that. Agent and agency. For example. The person for whom or on whose behalf he acts is called the principal. Thus. Bailor and bailee. or in the condition in which they were bailed. a contract is an agreement enforceable by law made between at least two parties as per which rights and obligations are mutually created for both parties. Write short notes on: a. The frequent use of terms such as good faith. b. . Example: D Airlines sells a ticket on 1 January to X for the journey from Mumbai to Bangalore on 10 January. Which test would you apply to ascertain whether an agreement is a contract? Answer: Offer + Acceptances = contract + enforceability Q3. as soon as the time of use for. Bailor and bailee: According to Section 148 of the Contracts Act. 1872. an agent is defined as “a person employed to do any act for another or to represent another in dealings with a third person”. The airline is under an obligation or duty to take X from Mumbai to Bangalore on 10 January. Q2. contracts to hold them as the bailee. public interest and public policy in statutes and judgments is based on the principles of equity.handy for judges to exercise their discretion. has elapsed or has been performed. The bailee is under an obligation to re-deliver the goods in its original or altered form. In case the airline fails to fulfill its promise. already in possession of goods. What is a contract? Which test would you apply to ascertain whether an agreement is a contract? Answer: Contract: According to Section 2 (h) of the Indian Contracts Act.

This applies to all cases whether the firm is for a fixed period or otherwise. be dissolved with the consent of all the partners. Laws relating to negotiable instruments are contained in the Negotiable Instruments Act. if the partnership relates to more than one adventure. it is called dissolution of the firm. but dissolution of partnership need not lead to dissolution of firm. it leads to dissolution of the firm. if they satisfy certain conditions. the partnership is dissolved because trading with an alien enemy is against public policy. In such a case.  By the insolvency of all the partners but one – If all the partners or all the partners but one become insolvent. Is it different from dissolution of partnership :-> Section 39 provides that the dissolution of partnership between all the partners of a firm is called the “dissolution of the firm”. This Act deals exclusively with promissory notes. The term “negotiable instrument” refers to a written document transferable by mere delivery or by indorsement and delivery to enable the transferee to get a title in the instrument. Thus. An instrument may possess the characteristics of negotiability either by statute or usage. The contract providing for dissolution may have been incorporated in the partnership deed itself or in a separate agreement. However. cheques and bills of exchange. There are certain instruments that are recognised as negotiable . 1881. but it would nevertheless be “dissolution of partnership”. Section 41 calls this as compulsory dissolution. as defined under Section 13. at any time. There is no question of ‘reconstituted firm’ in such a case. A firm may be dissolved in any of the following ways:  By mutual consent – Section 40 provides that a firm may. It naturally involves closing down the business. What is the meaning of dissolution of firm? Is it different from dissolution of partnership? Answer: Dissolution of firm: When the relationship between all the partners of the firm comes to an end. Answer: Documents that are freely used in commercial transactions and monetary dealings are known as negotiable instruments. Dissolution of partnership may involve merely a change in the relation of the partners and not the dissolution of the firm. it would not amount to “dissolution of firm”.  By agreement – Section 40 also provides for the dissolution of a firm in accordance with a contract between the partners. the illegality of one or more of them does not prevent the lawful adventure from being carried on by the firm.  Partners becoming alien enemies – Section 41 also cover cases of partnership between persons who become alien enemies by a subsequent declaration of war.Q4. It follows that if the dissolution of partnership is not between all the partners. Q5. dissolution of firm always implies dissolution of partnership. What do you mean by negotiable instruments? Explain the difference between bill of exchange and promissory note.  By business becoming illegal – Section 41 provides that a firm is dissolved by the happening of any event that makes it unlawful for the business of the firm to be carried on or for the partners to carry it on in partnership.

Discuss the provisions of Right to information act. The main aim of this Act is to eradicate the existing practice of concealing facts and events and to empower every citizen to exercise their legal right in obtaining information under the RTI Act. Until 1976. which is meant to serve them. In the Indian democratic system. hesitated to disclose information and kept the general public in darkness about important decisions of the Government and other administrative bodies. A promissory note is an instrument in writing containing an unconditional undertaking. Thus. Officials. notwithstanding any defects in a previous holder’s title. Answer: RTI: Right to information is a part of fundamental rights of an Indian citizen under Article 19 (1) of the Constitution. dividend warrants. It does not include a bank or currency note whereas A ‘bill of exchange’ is defined by Section 5 as ‘an instrument in writing. bearer debentures. The transferee acquires a good title. bank drafts. Article 19 (1) states that every citizen has freedom of speech and expression. but that its holder in due course or a bonafide transferee is not affected by defect in title.. An instrument is called ‘negotiable’ if it possesses the following features:  Freely transferable – Transferability may be by either by delivery. in the name of administrative secrecy. signed by the maker to pay a certain sum of money to a specified person or to his order (Section 4). scripts and treasury bills are negotiable by usage. under the cloak of secrecy.instruments by usage. i. directing a certain person to pay a certain sum of money only to or to the order of.e. or to the bearer of the instrument’. 2005 and information technology act. A holder in due course is the one who receives the instrument for value and without any notice as to the defect in the title of the transferor. India is a democratic country where people are the masters and have the right to know the method of functioning of the Government of India. 2000. or endorsement and delivery. containing an unconditional order. a certain person. bank notes. in turn. led to the increase of corruption. the Supreme Court ruled that people cannot express themselves unless they know.  Presumptions – A negotiable instrument is subject to certain presumptions in law. signed by the maker. either of the transferor or any prior party.  Holder’s titles free from defects – The term ‘negotiability’ means that not only is the instrument transferable by endorsement and/or delivery. Q6. the right to information for every citizen is a revolutionary step. 2005.  Transfer infinitum – A negotiable instrument can be transferred infinitum. .  Holder can sue in own name – Another feature of a negotiable instrument is that its holder in due course can sue on the instrument in his/her own name and he/she need not give any notice to the transferor or third party liable for payment. Difference between bill of exchange and promissory note. This has. share warrants. it can be transferred any number of times till its maturity.

in May 2000 and became part of a select group of countries to have cyber laws. 2005 Right to Information Act. 2005. and the Reserve Bank of India Act.T ACT: At the height of the dotcom boom. District and Local Self Governing Bodies like Panchayat and Municipal bodies. This Act was enacted so as to provide legal infrastructure for e-commerce and alternatives to paper-based methods of information storage and communication. 2000.  NGOs that are financed substantially with public funds provided by Government. 1891. and  To provide for matters connected therewith or incidental thereto. Bankers’ Book Evidence Act and Reserve Bank of India Act. 1934. India enacted the Information Technology Act. commonly referred to as “electronic commerce”. The Act aims to provide legal sanctity to all electronic records and was instrumental in pioneering corresponding changes in other legislations such as the Indian Penal Code. Indian Evidence Act. which involves the use of alternatives to paper-based methods of communication and storage of information  To facilitate electronic filing of documents with the government agencies  To facilitate electronic storage of data in place of paper-based methods of storage of data  To amend the Indian Penal Code. empowers every citizen to:      Pose any questions to the Government or seek any information Obtain copies of any Government documents Inspect any Government’s documents Inspect any Government’s works Take samples of materials of any Government work Coverage of the Act: The RTI Act covers:  All levels of the Government – Centre. The objectives of the Act as reflected in the preamble to the Act are:  To provide legal recognition for transactions carried out by means of electronic data interchange and other means of electronic communication. State. 1872. the Banker’s Books Evidence Act.The ideal objectives of the RTI Act are to promote transparency and accountability in the working of public authority and to set up a practical regime for giving citizens access to information under the control of public authorities. A right under RTI Act. I. . the Indian Evidence Act.

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