NEW SCHEME – MAY 2022

CA INTER - GROUP 1

PAPER 2- CORPORATE AND OTHER LAWS

SYLLABUS 100A

QUESTION PAPER
Roll No. …
Total No. of Questions- 6 Total No. of Printed Pages – 14
Time Allowed –3 hours Maximum Marks – 100 marks

GENERAL INSTRUCTIONS TO CANDIDATES

1. The question paper comprises of two parts, Part I and Part II.

2. Part I comprises of Multiple-Choice Questions (MCQs).

3. Part II comprises questions which require descriptive type answers.

4. Ensure that you receive the question paper relating to both the parts. If you have not received
both, bring it to the notice of the invigilator.
5. Answers to Questions in Part-I are to be marked in OMR answer sheet only. Answers to
questions in Part II are to be written on the descriptive type answer book. Answers to MCQs,
if written in descriptive type answer book, will not be evaluated.
6. OMR Sheet given on the cover page will be in English only for all the candidates, includingfor
Hindi medium candidates
7. Duration of the examination is 1 hour and 30 mins.

LAW 100A
(Subject Name) (30%/50%/70%/100A/100B)
 PART – I
1. The Board of Directors of Emcure Pharmaceuticals Limited (hereinafter referred to as “company”)
were meeting again in the month of May 2020 for the discussion of two important agenda which
had a direct relation to the ensuing Annual General Meeting scheduled for 30th September 2020.
The first Agenda was related to the authentication of financial statements and the second one was
in connection with Dividend.
Although the first item in the agenda did not take much time and necessary Board resolution was
passed, the second agenda was a matter of concern for the directors. Ms. Sunita, one of the directors
proposed that since the company had not made any profits during the year, it would not be
appropriate to declare any dividend for the financial year 2019-20. However, all other directors felt
that last year’s rate of dividend of 5% should be maintained and the same should at least be paid
this year to keep the shareholders happy. Ms. Sunita again objected by saying that the legal
provisions as envisaged under Section 123 of the Companies Act, 2013 clearly states that dividend
by a company for any financial year can be paid or declared only out of the profits of the company
of that year and since there was no profit there was no legal compulsion to pay dividend. She
strongly contended that paying dividend was a matter of financial choice by the Board of Directors
and accordingly, the board should take an informed decision. The priority for the Board is to ensure
that cash flow is maintained first and then the “happiness” of the Shareholders is considered.
Another director, Mr. Ravi suggested that the company had made a substantial gain on revaluation
of assets and if that would be considered then there would be sufficient profits for declaration of
dividends out of such gain.
Finally, the Chairman-cum-Managing Director, Mr. Ramesh interfered and suggested that perhaps
there is a provision in the Companies Act, 2013 relating to payment of dividend in the absence of
profits and that the Company Secretary, Ms. Rukmani should work out the possibilities and all legal
aspects connected and then call for another Board Meeting for finalising the payment of Dividend.
The meeting then ended with a vote of thanks to the Chair.

LAW 100A
(Subject Name) (30%/50%/70%/100A/100B)
Multiple Choice Questions (2 marks each)

(i) Based on the discussions in the Board Meeting of the Company, which of the following is a
correct statement relating to the source for payment of Dividend by the Company:

(a) Profits of the Company of that year only arrived at after providing for depreciation.

(b) Profits of the Company of that year or for any previous year or years after providing for
depreciation and any reserves available.

(c) Profits of the Company of that year or for any previous year or years after providing for
depreciation and remaining undistributed i.e. free reserves.

(d) Profits of the Company of that year or previous year but not necessary to provide for
depreciation.

(ii) With reference to claim made by Ms. Sunita that Dividend could only be paid or declared out
of profits and no other source, which of the following would you completely agree or partly
agree?

(a) Completely agree with the contention of Ms. Sunita that only profits are the source for
payment of Dividend.

(b) Partly agree with Ms. Sunita but apart from Profits, a company can pay dividend out of
money provided by the Central or State Government in pursuance of the guarantee given
by them.

(c) Partly agree with Ms. Sunita that apart from profits (either current year or previous year),
even in the event of inadequacy or absence of profits, a company may declare dividend out
of free reserves, subject to fulfilling certain conditions.

(d) Partly agree with Ms. Sunita that company can pay dividends not only out of profits but
also out of money provided by Central Government or State Government in pursuance of
the guarantee given by them or out of money available in free reserves, and in each case
subject to fulfilment to conditions prescribed.

LAW 100A
(Subject Name) (30%/50%/70%/100A/100B)
(iii) Which of the option is correct with regard to the proposal made by Mr. Ravi?

(a) Gain made by a company in form of revaluation of assets is definitely available for
payment of Dividend.

(b) Gain made by a company in form of revaluation of assets is available only upon satisfaction
of terms and conditions prescribed.

(c) Gains made by a company in form of revaluation of assets in not available for computing
profits for declaration of dividends.

(d) Gains made by a company in form of revaluation of assets which are only buildings are
not available and in all other assets they are available.

(iv) As per the Chairman-cum-Managing Director, Mr. Ramesh, there is a provision in the
Companies Act, 2013 relating to payment of dividend in the absence of profits. Which of the
following is correct with respect to the rate of dividend in such cases?

(a) The rate of dividend declared shall not exceed the average of the rates at which dividend
was declared by it in the three years immediately preceding that year.

(b) The rate of dividend declared shall not exceed the average of the rates at which dividend
was declared by it in the two years immediately preceding that year.

(c) The rate of dividend declared shall be the average of the rates at which dividend was
declared by it in the five years immediately preceding that year.

(d) The rate of dividend declared shall not exceed the rate at which dividend was declared by
it in any of the three years immediately preceding that year.

(v) According to the Chairman-cum-Managing Director, Mr. Ramesh, there is a provision in the
Companies Act, 2013 relating to payment of dividend in the absence of profits, which of the
following is correct with respect to the amount that can be drawn from such accumulated profits
of the previous year(s)?

(a) The amount that can be drawn from such accumulated profits shall not exceed one fifth of
the sum of its paid-up share capital and free reserves as appearing in the latest audited
financial statement.

LAW 100A
(Subject Name) (30%/50%/70%/100A/100B)
 (b) The amount that can be drawn from such accumulated profits shall not exceed one tenth
of the sum of its paid- up share capital and free reserves as appearing in the latest audited
financial statement.

(c) The amount that can be drawn from such accumulated profits shall not exceed one tenth
of its paid-up share capital as appearing in the latest audited financial statement.

(d) The amount that can be drawn from such accumulated profits shall not exceed one tenth
of the average of its paid-up share capital and free reserves as appearing in the latest three
years audited financial statement.

2. Ramesh is a member in OPC-1 and became a member in another OPC-2 (on 2nd April, 2020) by
virtue of his being a nominee in that OPC-2. Ramesh shall, by what date, meet the eligibility criteria
that an individual can be a member in only one OPC:

(a) 17th May 2020

(b) 25th August 2020

(c) 26th August 2020

(d) 29th September 2020 (2 marks)

3. State out of the following who is not the holder under the Negotiable Instruments Act, 1881:
(i) X who obtains a cheque drawn by Y by way of gift.
(ii) A, the payee of the cheque, who is prohibited by a court order from receiving the amount of
the cheque.
(iii) M, who finds a cheque payable to bearer, on the road and retains it.
(iv) B, the agent of C, is entrusted with an instrument without endorsement by C, who is the
payee.
(v) B, who steals a blank cheque of A and forges A’s signature.
(a) (iii), (iv) (v)
(b) (ii), (iii), (iv), (v)
(c) All of the above are not the holder
(d) All of the above are the holder (2 marks)

LAW 100A
(Subject Name) (30%/50%/70%/100A/100B)
4. Bhide Publishers Limited has received application money of Rs 20,00,000 (2,00,000 equity shares
of Rs 10 each) on 10th October, 2020 from the applicants who applied for allotment of shares in
response to a private placement offer of securities made by the company to them. Select the latest
date by which the company must allot the shares against the application money so received.

(a) 9th November, 2020

(b) 24th November, 2020

(c) 9th December, 2020

(d) 8th January 2021 (1 mark)

5. Such shares which are issued by a company to its directors or employees at a discount or for a
consideration other than cash for working extraordinary hard and achieving desired output is
honoured with:

(a) Equity Shares

(b) Preference Shares

(c) Sweat Equity Shares

(d) Redeemable preference shares (1 mark)

6. Where in an enactment, there are two provisions which cannot be reconciled with each other; they
should be so interpreted that, if possible effect may be given to both. This is what known as the –

(a) Rule of harmonious construction

(b) Rule of reasonable construction

(c) Rule of ejusdem generis

(d) All of above (1 mark)

LAW 100A
(Subject Name) (30%/50%/70%/100A/100B)
7. According to the words, phrases, sentences of a statute are to be understood in their natural, ordinary
or popular and grammatical meaning, unless such a construction leads to an absurdity or contents
or object of the statute suggests a different meaning?

(a) Literal construction

(b) Mischief rule

(c) Strict rule of interpretation

(d) None of above (1 mark)

8. In any Central Act or regulation made after the commencement of this Act, it shall be sufficient,
for the purpose of __________ the first in a series of days or any other period of time, to use the
word ‘from’, and for the purpose of ___________ the last in a series of days or any other period of
time, to use the word ‘to’,

(a) Including, Excluding

(b) Excluding, Including

(c) Including, Including

(d) Excluding, Excluding (1 mark)

9. The preamble is most important in any legislation, it:

(a) Provides definitions in the Act.

(b) Expresses scope, object and purpose of the Act.

(c) Provides summary of the entire Act

(d) None of the above. (1 mark)

10. Statement (1): In all Central Acts and Regulations, any words which denote the masculine gender
shall also be taken to include females, and vice versa.
Statement (2): In all Central Acts and Regulations, words in the singular shall include the plural,
but not vice versa.

(a) Only statement (1) is correct

(b) Only statement (2) is correct

LAW 100A
(Subject Name) (30%/50%/70%/100A/100B)
 (c) Both the statements are correct

(d) None of the statement is correct (2 marks)

11. Where any Central Act or Regulation made after the commencement of this Act authorizes or
require any document to be served by the post, then, unless a different intention appears, the service
shall be deemed to have been effected ____________

(a) At the time at which the letter would be delivered in the ordinary course of post

(b) After 24 hours of posting of letter containing such document

(c) After 48 hours of posting of letter containing such document

(d) None of these (1 mark)

12. Which statement/s is/are correct for the crossing of the cheque

(1) Crossing affects the mode of payment of cheque

(2) Crossing does affect the transferability or negotiability of cheque

(3) where a cheque is crossed specially to more than one banker, the banker on whom it is drawn
shall refuse payment

(4) A cheque with crossing, not negotiable, still continues to be transferable as before.

(a) (1), (2) and (3)

(b) (1), (3) and (4)

(c) (1) , (2) and (4)

(d) All of the above statements are correct (2 marks)

LAW 100A
(Subject Name) (30%/50%/70%/100A/100B)
13. Llyod made an offer to MD of a company. MD accepted the offer though he had no authority to do
so. Subsequently Llyod withdrew the offer but the company ratified the MD’s acceptance. State
which of the statement given hereunder is correct:
(a) Llyod was bound with the offer
(b) An offer once accepted cannot be withdrawn
(c) Both option (a) & (b) is correct
(d) Llyod is not bound to an offer. (1 mark)

14. If any drawee banks made the payment on a cheque on which drawer signatures were forged then
such bank ___________________
(a) Shall be liable to payee
(b) Shall be liable to true owner
(c) Shall be liable to HDC
(d) Shall not be liable, as paying bank gets the protection from liability (1 mark)

15. A shelf prospectus filed with the ROC shall remain valid for a period of:

(a) one year from the date of registration

(b) one year from the date of closing of first issue

(c) one year from the date of opening of first issue

(d) Ninety days from the date on which a copy was delivered to ROC (1 mark)

16. A bailee has

(a) a right of particular lien over the goods bailed

(b) a right of generation

(c) a right of both particular and general lien

(d) no lien at all over the goods bailed (1 mark)

LAW 100A
(Subject Name) (30%/50%/70%/100A/100B)
17. Where a quantity of imported meat was stored with a warehouse-keeper, who by a general term of
the trade had a _______________ lien.

(a) General

(b) Particular

(c) Both (a) and (b)

(d) Either (a) or (b) (1 mark)

LAW 100A
(Subject Name) (30%/50%/70%/100A/100B)
 PART – II 70 marks
1 (a) The object clause of the Memorandum of Association of Ranbaxy Limited authorises it to 6
publish and sell text-books for students. The company, however, entered into an
agreement with Q to supply 100 laptops worth Rs. 5 lacs for resale purposes.
Subsequently, the company refused to make payment on the ground that the transaction
was ultravires the company. Examine the validity of the company's refusal of payment to
Q under the provisions of the Companies Act, 2013.
(b) An unregistered charge shall be void against the liquidator and other creditors of the 5
company
(c) State with reasons whether the following statements are correct or incorrect. 4
(i) If the pawnor makes a default in the payment of debt, or performance of duty, as
agreed, the pawnee has a right to sell the thing pledged for which no reasonable
notice of the sale is required.
(ii) An "agency coupled with interest" may be terminated, at the instance of the
principal at any time.
(d) Mr. Viraj drew a cheque in favour of Manoj who was sixteen years old. Manoj settled his 4
rental due by endorsing the cheque in favour of Mrs. Anandi the owner of the house in
which he stayed. The cheque was dishonoured when Mrs. Anandi presented it for payment
on grounds of inadequacy of funds. Advise Mrs. Anandi how she can proceed to collect
her dues.
Give your answer in reference to the Provisions of Negotiable Instruments Act, 1881

2 (a) The share capital of Rolon Ltd. is Rs 30 crore. ‘Rossi’ is appointed as the managing (1+1+2+2)
director of the company; the company wants to compensate him by issue of shares for
supplying technical know-how without any cost. In this context, answer the following:
(i) Whether the company is allowed to allot such shares?
(ii) Is approval of shareholders required for issuing such shares?
(iii) If found eligible to allot such shares, what will be the quantum (value) of shares
that can be allotted?
(iv) Can Rossi sell such allotted shares in the market?
(b) A is the holder of a bill of exchange made payable to the order of B, which contains the 4
following endorsements in blank
First endorsement, “B”

LAW 100A
(Subject Name) (30%/50%/70%/100A/100B)
 Second endorsement, “C”
Third endorsement, “D”
Fourth Endorsement, “E”
State the legal position in the following statement
This bill A puts in suit against E and strikes out, without E’s consent, the endorsements
by C and D.
(c) At the time of interpreting a statutes what will be the effect of 'Usage' or 'customs and 4
Practices'?
(d) Mr. Rohan has issued a promissory note of Rs 10,000 to Mr. Mohan on 17th May 2021 3
payable 3 months after date. After that, a sudden holiday was declared on 20th August
2021 due to “Eid”. As per the provisions of the General Clauses Act 1897, what should
be the date of presentment of promissory note for payment?

3 (a) Dilip, a director in a company, gave in writing to the company that notice for any General 5
Meeting and the Board of Directors’ Meeting, be sent to him at his address in India only
by Registered Mail and for which he paid sufficient money. The company sent two notices
to him, of such meetings, by ordinary mail, under certificate of posting. Dilip did not
receive the said notices and could not attend the meetings and the proceedings thereof on
the ground of improper notice. Decide in the light of the provisions of the Companies Act,
2013:
(i) Whether the contention of Dilip is valid?
(ii) Would you answer be still the same in case D remained outside India for two
months (when such notices were given and meetings held)
(b) Manav, the auditor of India Organic Ltd appointed by the company in its last general 4
meeting has resigned from the office of auditor of the company tor some personal reasons.
Referring to the provisions of the Companies Act, 2013, answer the following:
(i) Who is the competent authority to accept and approve the resignation?
(ii) State the manner in which the vacancy caused by Manav's resignation shall be
filled in.
(c) While adopting accounts for the year, the Board of directors of Prima Ltd. decided to 5
consider the interim dividend @ 12% as final dividend and did not consider transfer of
profit to reserves. Explain whether decisions of the Board were justified referring to
relevant provisions.

LAW 100A
(Subject Name) (30%/50%/70%/100A/100B)
 (d) Bonus issue may be viewed as a 'rights issue' except that money is paid by the company 3
on behalf of the investing shareholders from its reserves. Is this statement correct? In the
light of the statement also explain when right shares and bonus shares are issued

4 (a) Ram becomes guarantor for Amar for the amount which may be given to him by Sonam 4
within one year. The maximum limit of the said amount is Rs. 2 lakh. After two moths
Ram withdraws his guarantee. Upto the time of revocation of guarantee, Sonam had given
to Amar Rs. 50,000.
(i) Whether Ram is discharged from his liabilities to Sonam for any subsequent loan.
(ii) Whether Ram is liable if Amar fails to pay the amount of Rs. 50,000 to Sonam?
(b) Peculiar Ltd an unlisted company did not prepare its financial statements for the year 5
ended 31st March, 2021 In conformity with some of the mandatory accounting standards.
With reference to the provisions of the Companies Act, 2013, state the responsibilities of
the directors and statutory auditors of the company in this regard.
(c) ABC Ltd. was registered with Registrar with a capital of 2,00,00,000 where each share is 4
of 10.
In response to the advertisements made by the company to buy shares in the company,
applications have been received for 10,00,000 shares but company actually issued 700,000
shares where company has called for 8 per share.
All the calls have been met in full except three shareholders who still owe for their 6000
shares in total.
From above facts identify amount of various share capital
(d) Preamble does not override the plain provision of the act. Comment and also give suitable 4
example.

5 (a) Ajay owns a certain sum of money to Shilpa. Ajay does not know the exact amount and 4
hence he makes out a blank cheque in favour of Shilpa, signs and delivers it to Shilpa with
a request to fill up the amount due payable by him. Shilpa fills up fraudulently the amount
larger than the amount due, payable by Ajay and endorses the cheque to Jay in full
payment of dues of Shilpa. Cheque of Ajay is dishonoured. Referring to the provisions
of the Negotiable Instruments Act, 1881, discuss the rights of Shilpa and Jay.
(b) Red herring Prospectus and Shelf prospectus are two distinct concept – Comment 4
(c) Disclosure of the nature of concern or interest, financial or otherwise’ of a director or the 4

LAW 100A
(Subject Name) (30%/50%/70%/100A/100B)
 manager of a company in the subject matter of a proposed motion as referred to in section
102 of the Companies Act, 2013 – In the light of the statement explain briefly which rule
shall be applied while interpretation
(d) ABC Ltd. has accepted deposits from the public for three years with interest payable at 5
8% p.a annually or at the end of three years at 9% p.a. One depositor ‘‘D’’ has requested
the company for repayment of deposit after one year. Is the depositor eligible to get
repayment before maturity period? Answer with legal provisions

LAW 100A
(Subject Name) (30%/50%/70%/100A/100B)