Ans.1 Introduction: - A company can raise capital by issuing shares and through borrowings.

A huge amount of capital is required to run a business. Debt and equity are the two ways
through which a company can fund its operation. The mix of debt and equity is a cost effective
way of corporate financing. Shares are used to raise the capital that is owned by the company’s
shareholders. On the other hand, debentures as a debt instrument are a secured way of raising
capital with a fixed rate of interest.

Explanation: - Raising of Capital through Shares:-

Share is the interest of a shareholder in a company. A share is a fractional part of the share
capital of the company. The share of a member is a movable property transferrable in a manner
mentioned in the Articles. Share Capital is of different types:-

 Authorised Capital: - It is the maximum amount of share capital that a company can
issue. It is known as registered or nominal capital that is mentioned in the MoA of the
company.
 Issued Capital: - It is the part of the authorized capital that is issued to the public for
subscription.
 Subscribed capital: - It is the portion of the issued capital that is subscribed or paid by
the public.

Types of Shares: - There are two types of shares through which a company can raise its capital:-

Equity Shares: - Equity shares are also known as ordinary shares. It gives owner the right to
vote during resolutions passé in company’s general meetings, thereby giving him/her right to
participate in the decision-making of the management. Owners of equity shares are entitled to
dividends out of profits as declared in an annual general meeting. Companies Act, 2013 allows
issuing of equity shares with differential rights with regard to dividend and voting rights.

Preference Shares: - These are those shares which carry a preference right as regards to the
payment of dividend and repayment of capital (in the event of winding up of company).
Preference shareholders are also entitled to a fixed amount of dividend. There are different
types of preference shares which are issued by company depending upon its requirements.
These are:-
  Cumulative and Non-Cumulative Preference shares: - Cumulative shares are those
shares that provide shareholders fixed dividend each year from company’s profits. If in
case dividend is not paid in any year, it will be paid in subsequent years as the unpaid
dividends are cumulated over years, In case of non-cumulative preference shares, if
dividend is not paid in any year then dividend cannot be claimed by shareholder in
future.
 Participating and Non-participating preference shares: - Participating preference
shareholders have a right to participate in the surplus profit after dividend has been
paid to equity shareholders. Non participative shareholders do not have such rights.
 Redeemable and irredeemable preference shares: - As per Section 55 of the Companies
Act, 2013, a company can issue redeemable preference shares if its AoA authrises it. A
company can not issue any irredeemable preference shares.

Raising of Capital Through Debentures:-

Debentures are the instruments of a company evidencing a debt whether constituting a charge
on the assets of the company or not. Examples of debentures are stock, bond or any other
instrument of a company evidencing a debt. Debentures can be secured or unsecured or it can
be convertible or non-convertible. Also they do not offer voting rights.

Features of Debentures:-

 Fixed rate of interest: - Debenture holders are prioritized over shareholders for the
payment of interest. They receive a fixed rate of interest.
 Maturity: - They offer long term funds to the company. The maturity of debentures
comes after a specific period.
 Claims on assets: - they have a right to claim on the assets of the company. They are
given preference to be paid first before paying back to preference or equity
shareholders at the time of liquidation.
 Call feature: - A call feature offers at the time of the issuance of dentures that entitles
company to redeem its debentures before the maturity date at a certain price.
 Control: - Debenture holders are considered as company’s creditors. They do not have
any control over the managerial operations and voting rights.
Conclusion: - To conclude we can say that there are mainly to ways of raising capital debt
financing or equity financing. A company can choose either of way to raise its capital depending
upon its requirements. If in Long Run Company wants to utilize profits for its own benefit then
it will be good company raise capital through shares. Because in debt financing there is a fixed
burden on company to pay interest on regular intervals. Also it will be shown as a liability of
company which can overall decrease company’s net worth.

Ans.2 Introduction: - There are about 60 laws concerning labour dealing with working
conditions, industrial relations, monetary benefits and social security issues in Indian ministries
and commercial establishments. The main objectives of these laws are to promote the welfare
of workers and employees and improve their social life.

Explanation: - There are some real life instances where people have got benefit of these
employee related laws. These have been explained as below:-

Benefit through Payment of Gratuity act, 1972:- The payment of Gratuity Act, 1972
consists of 15 sections. Its main objective is to reward the employee for his past meritorious
service on his leaving the job after 5 years or more or on retirement.

Gratuity is payable to employees who have rendered a continuous service of five years or more,
interrupted only on account of sickness, accident, leave, absence from duty without leave (not
amounting to break in service under the relevant standing orders) , lay off, strike, or lockout or
cessation of work not due to the fault of the concerned employee.

Below is the example through which it can be explained how an employee got benefit of
Gratuity Law.

Irel (India) Limited vs. P.N. Raghava Panicker (2020)

As on 21/05/2015 P.N. Raghava Panicker preferred an application under Section 7(4) of the
Gratuity Act with an averment that he was in the employment of Irel (India) Limited from
16/07/1991 t0 30/04/2015 and has rendered continuous service of 23 years 8 months and 15
days. He contended that company is liable to pay balance amount of Gratuity of Rs.41,293/- to
him.
The Irel (Indi) Ltd. Herein filed a counter statement before controlling authority admitting the
fact Mr. Raghava retired on attaining age of superannuation as on 30/04/2015. However, he
joined as a helper trainee as on 16/07/1991 and he ws on consolidated monthly stipend of
Rs.800/- during that training period. After successful completion of training he was appointed
as helper as on 16/07/1993. So for aforesaid period of 2 years cannot be counted as regular
employment and the trainee cannot be treated as employee.

Court Judgement: - In this case the court held that a trainee is not excluded from the definition
of term ‘employee’ under the gratuity act, but only an ‘apprentice’ is excluded. Section 2(e) of
the payment of gratuity act, 1972 defines an ‘’employee’’ which excludes only apprentice. The
act says ‘’ employee means any person (other than an apprentice)…’’

Thus court held that Mr. Raghava is entitled to get gratuity for the entire period of service
including the training period of 2 years.

Benefit through Maternity Benefit Act, 1961:- Indian law has made it mandatory for
certain commercial establishments to provide maternity benefits to women employees during
and after pregnancy and childbirth. The Maternity Benefit (Amendment) Act, 2017 has added
various benefits such as added paid leaves, work from home in the Maternity Benefit Act, 1961.

This Maternity Benefit Act, 1961 extends to the whole of India and it applies to commercial
establishments with 10 or more employees. A women employee needs to complete a period of
80 days in the establishment in order to get entitled to the maternity benefit.

Below is the example through which it can be explained how a women employee got benefit of
Maternity Benefit Act, 1961.

Rashita C.H. vs. State of Kerala & Anr

Women employees, regardless of whether their job is contractual or not, are entitled to
maternity leave, according to the Kerala High Court. ‘’ The maternity benefit is not merely a
statutory benefit or a benefit flowing out of an agreement,’’ Justice A Muhamed Mustaq wrote
in allowing a petition filed by Rashita, 35, who was denied maternity leave by the Calicut
University on the grounds that the terms of her contract did not envision the grant of such
leave. ‘’The maternity benefit is neither only a statutory benefit nor a benefit growing out of an
agreement;’’ Justice A Muhamed Mustaq wrote. This court has consistently found that it is
associated with a women dignity.
Court Judgement: - It was held that a women employee cannot be refused maternity benefits
only because her employment status is contractual. As a result, despite anything in the contract
agreement, the University is obligated to provide such benefits.’’ In light of these
considerations, the court granted Rashita’s petition and ordered Calicut University to pay
Rashita’s maternity benefits, which are the same as those paid to other University workers,
within two months.

Conclusion :- So to conclude we can say that employees laws have been designed to promote
the welfare of workers, improve industrial relations, provide various monetary benefits and
finally to ensure that they have some social security after completing their tenure.

Ans3 a) Introduction: - Whenever there are disputes between two or more parties an option
is to take the case t a court of law for the settlement of disputes. But this process is very time
consuming, expensive and burdensome. To overcome these problems jurists have developed
several alternative dispute settlement methods such as negotiation, mediation and conciliation.
Gavit and Vinayak can follow these methods for resolving their disputes without going to
conventional court of laws. These have been explained as below:-

1. Negotiation: - it is an informal technique of resolving a dispute where parties in dispute

try to communicate with each other and reach a conclusion. The process is akin to
bargaining between two or more parties having opposite interests to arrive at a
consensus to manage and ultimately resolve the dispute through a non binding process.
This is a preferred technique of dispute resolution when the parties want to maintain an
on-going relationship with each other.

2. Mediation: - It is a voluntary, non-binding, confidential and structured process wherein

a neutral third-party possessing special communication, negotiation, social and
interactive skills help the disputing parties arrive at a mutual settlement. Mediation is
centered on active and direct participation of the parties. It also involves a third party
called mediator. The function of mediator is of facilitator. The mediator cannot be called
to court or to be asked to testify any of the proceedings or reveal any discussion that
may have taken place during the mediation process. The entire mediation process is
carried out confidentially and without prejudice.
 3. Conciliation :- Conciliation is a method of resolving a conflict with the help of a third
party (conciliator) who intervenes in the dispute situation upon a request by either or
both the parties. The conciliator simply assists them in their negotiations and decision
making, resolves the impasse and removes bottlenecks. The main purpose of this
process is to bridge the gap that may arise and to reach a point of equilibrium so that a
mutual agreement is obtained.

b) Advantages of resolving differences without approaching conventional court

of laws:-
The basic thrust of resolving dispute without approaching court is to assist third parties to
resolve their disputes amicably, creatively and effectively. Moreover, the resolution of dispute
is achieved expeditiously and cost-effectively. Some other advantages have been explained as
below:-

i. Resolution of Multiparty Dispute: - It can competently resolve multi-party disputes.

ii. Flexibility: - It is a flexible procedure. The parties can decide when and how they want
the dispute to be resolved. Therefore, the process is controlled by the conflicting
parties.
iii. Time and Cost Effective: - It is less expensive than traditional court litigation. Also it
settles the dispute without too much delay.
iv. Less Complex: - Complexity involved is less because hard and fast rules of litigation and
court procedure do not strictly apply.
v. Unbiased decisions: - The parties involved in these processes happen to be neutral.
They mostly provide unbiased decisions. Also this third party is generally chosen by both
the disputing parties.
vi. Practical Solutions: - These processes provide practical solutions to parties that protect
their interests.
vii. Privacy: - It maintains privacy of the disputing parties.
viii. Maintenance of Long Term relations: - the process helps to maintain relationships and
reputations of the conflicting parties. This is best suited for businesses that would prefer
to continue doing business with each other in future.

Conclusion: - To conclude we can say that Gavit and Vinayak can use these methods if they
want an early settlement of their dispute with less use of time and resources. Also it will help
them to maintain long term relationship in case they want to continue their partnership.