Test Series: April, 2023

MOCK TEST PAPER 2

FINAL COURSE GROUP I
PAPER 4: CORPORATE AND ECONOMIC LAWS
Time Allowed: 3 Hours Maximum Marks: 100
DIVISION A: MULTIPLE CHOICE QUESTIONS (TOTAL OF 30 MARKS)
Instructions: All questions are compulsory
Case Scenario 1 (6 Marks)
Sahayata Foundation is a company registered under section 8 of the companies Act, 2013, mainly engaged
in the social activities of providing relief to poor people.
A Board Meeting was arranged on 30 th April, 2022, which was attended by all the 10 directors of the company,
to discuss on the formalities to be fulfilled with the respect to the amounts received or receivable by it, from
various sources as under:
(a) Jim Ltd. to contribute ` 10 lakhs, in which Government of US holds 50% and T-cap Ltd., an Indian
Company, holds 49%, respectively, of the nominal value of its share capital. The foreign investment by
US Government in Jim Ltd. was made beyond the limits specified under the FEMA, 1 999.
(b) Rasvil Ltd., in which Rasvil Inc., a UK company, holds more than 50% of nominal value of its share
capital, to contribute ` 15 lakhs. The foreign investment by Rasvil Inc. in Rasvil Ltd. was made beyond
the limits specified under the FEMA, 1999.
(c) A specialized agency of the United Nations, to contribute ` 6 lakhs.
(d) Mr. Christian, an Italian citizen, but a person resident in India, to contribute ` 9 lakhs. Also,
Mr. Christian, gifted a wrist watch worth ` 60,000 each to two directors of Sahayata Foundation, as an
acknowledgement to their efforts during the tough times of the pandemic Covid -19.
(e) Care-covid Foundation, a Singapore based trust, to contribute ` 4 lakhs.
(f) Saam Ltd., in which citizens of US and Canada, hold in aggregate 60% of nominal value of it s share
capital, to contribute ` 9 lakhs. The foreign investment by such citizens in Saam Ltd. was made within
the limits specified under the FEMA, 1999.
(g) Ksuit Inc., a French company, to contribute or pay ` 6 lakhs towards the cost of goods procured from
Sahayata Foundation, in the ordinary course of business.
(h) Interest of ` 3 lakhs has accrued on the earlier foreign contributions received by Sahayata Foundation,
so deposited in the FCRA account with SBI.
One director of Sahayata Foundation, Mr. Jayesh, resigned from his offices on 20 th May, 2022 and other
director Mr. Mahesh, resigned from his office on 29 th May, 2022, and the offices, both the directors, remained
vacated for the remaining financial year.
On 1st June, 2022, a second half yearly board meeting of directors of Sahayata Foundation was called for,
which was attended by 4 directors, with respect to discussion of the budget to be allocated for the expenses
to be incurred for the purpose of administration of the company, which was decided at 30% of the total
contributions received or receivable during the financial year 2022-23. The total contributions of ` 100 lakhs
were estimated to be received during the financial year.

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Multiple Choice Questions (3 questions of 2 Marks each):
1. Which of the aforementioned persons can be considered as a ‘Foreign source’?
(a) Jim Ltd., Rasvil Ltd., Mr. Christian, Care-covid Foundation, Saam Ltd. and Ksuit Inc.
(b) Jim Ltd., Rasvil Ltd., Mr. Christian, Care-covid Foundation and Ksuit Inc.
(c) Jim Ltd., Rasvil Ltd., Mr. Christian and Care-covid Foundation
(d) Jim Ltd., Rasvil Ltd., Care-covid Foundation and Ksuit Inc.
2. What shall be total amount of ‘Foreign contribution’ received or receivable by Sahayata Foundation
during F.Y. 2022-23?
(a) ` 41 lakhs
(b) ` 50 lakhs
(c) ` 38 lakhs
(d) ` 47 lakhs
3. How much administrative expenses can be defrayed by Sahayata Foundation of the foreign cont ributions
of ` 100 lakhs, received or receivable by it during F.Y. 2022-23, without prior approval and prior approval
of which authority shall be required to defray admin expenses above the specified limit?
(a) ` 50 lakhs and for defrayal of excess amount, prior approval of Central Government is necessary.
(b) ` 20 lakhs and for defrayal of excess amount, prior approval of RBI is necessary.
(c) ` 20 lakhs and for defrayal of excess amount, prior approval of Central Government is necessary.
(d) ` 30 lakhs and for defrayal of excess amount, prior approval of its authorised dealer (i.e. SBI) is
necessary.
Case Scenario 2 (10 Marks)
Mr. Raj, a director of Gem Ltd. (Transferor Company) prepared a circular, addressed to all the members of
Gem Ltd., disclosing the offer made by Diamond (Transferee Company) to the members of Gem Ltd.
The total members of Gem Ltd. are 40,000, holding total 3,00,000 shares of the company, with face value of
` 5 per share, out of which 25,000 shares are held by Diamond Ltd. and 5,000 shares are held by Silver Ltd.,
a subsidiary of Diamond Ltd.
The said circular was presented to the Registrar, Mr. Ramesh, for registration on 24th May, 2022, who refused
to register the said circular and he communicated such refusal at the registered address of both the
companies on 24 th June, 2022.
Mr. Raj filed an appeal with the NCLT against such refusal order of Mr. Ramesh on the grou nds that, in the
impugned order, the reasons for rejection were not mentioned and also the order was communicated to the
parties after the expiry of the prescribed time limit.
The Tribunal allowed the appeal and in its appellate order, it directed the Registrar, Mr. Ramesh, to register
the said circular. The said circular was then registered by Mr. Ramesh on 14 th July, 2022 and accordingly,
the said circular, containing the offer, was issued on 15 th July, 2022, to all the members of Gem Ltd., which
was kept open as per the statutory time limit. In response to the same, the responses of its members were
as follows:
1. 30,000 members, holding shares valued ` 12,50,000, agreed to the offer made by Diamond Ltd. The
consent was given by such members by 10 th November, 2022.
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2. 8,500 members, holding shares valued ` 70,000, did not give their assent on the said offer.
3. 1,000 members, holding shares valued ` 20,000, refused to transfer their shares to Diamond Ltd.
4. 500 members, holding shares valued ` 10,000, failed to transfer their shares to Diamond Ltd.
Diamond Ltd. gave notice of acquisition to the dissenting shareholders on 20 th November, 2022.
5000 of such dissenting shareholders made application to the Tribunal on 5 th December, 2022. However, the
other dissenting shareholders didn’t file an application with the Tribunal within the prescribed time limit.
The Tribunal dismissed the applications made by 2000 shareholders, holding total 4,500 shares, and allowed
the application made by 3000 shareholders, holding total 3000 shares.
Diamond Ltd. again issued notice of acquisition earlier send to the dissenting shareholders along with transfer
deed. The transfer deed was executed by Gem Ltd., on behalf of the dissenting shareholders, with the person
authorised by Diamond Ltd. to do so.
On execution of the aforesaid transfer deed, Diamond Ltd. paid to Gem Ltd., the consideration amount, in
respect of the shares of the dissenting shareholders acquired by it, on 5 th January, 2023. The said
consideration amount was deposited by Gem Ltd. in a separate bank account opening with a branch of State
Bank of India.
Gem Ltd. registered the shares of dissenting shareholders in the name of Diamond Ltd. on 8 th January, 2023
and it informed the same to the dissenting shareholders on 23 rd January, 2023. Also, the consideration
received from Diamond Ltd. was paid to such dissenting shareholders on 9 th February, 2023.
Multiple Choice Questions (5 questions of 2 Marks each):
4. On what grounds, Tribunal would have allowed the appeal filed Mr. Raj?
(a) For non-recording of reasons of such refusal, in writing, in the order. However, the said order was
communicated within the prescribed time limit i.e. on or before 24 th June, 2022.
(b) For non-recording of reasons of such refusal, in writing, in the order and also communicating the
same beyond the prescribed time limit i.e. after 23 rd June, 2022.
(c) For not giving an opportunity of being heard to the concerned parties before making such refusal.
(d) For communicating the said order beyond the prescribed time limit i.e. after 23 rd June, 2022.
Recording of reasons, in writing, is not necessary, in this case.
5. By what percentage, the offer would have been considered to be approved and what shall be th e total
number of dissenting shareholders?
(a) 92.59% and total number of dissenting shareholders shall be 9,500.
(b) 93.33% and total number of dissenting shareholders shall be 9,500.
(c) 92.59% and total number of dissenting shareholders shall be 10,000.
(d) 93.33% and total number of dissenting shareholders shall be 10,000.
6. What shall the last date available with Diamond Ltd. for giving notice of acquisition to the dissenting
shareholders and what shall be the last date for the dissenting shareholders to make an application with
the tribunal against the same?
(a) 15th November, 2022 and 20th December, 2022, respectively.
(b) 15th January, 2023 and 15th December, 2022, respectively.
(c) 15th November, 2022 and 15th December, 2022, respectively.
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 (d) 15th January, 2023 and 20th December, 2022, respectively.
7. What shall the last date available with Gem Ltd. to inform to the dissenting shareholders with the respect
to registration of their shares in the name of Diamond Ltd. as well as to pay consideration to the
dissenting shareholders received by it from Diamond Ltd.?
(a) 8th February, 2023 and 5th March, 2023, respectively.
(b) 7th February, 2023 and 5th March, 2023, respectively.
(c) 8th February, 2023 and 6th March, 2023, respectively.
(d) 7th February, 2023 and 4th February, 2023, respectively.
8. How many shares Diamond Ltd. shall be entitled to take and not entitled to take, respectively?
(a) Diamond Ltd. shall be entitled to take 2,67,000 shares and not entitled to take 7,500 shares,
respectively.
(b) Diamond Ltd. shall be entitled to take 2,72,000 shares and not entitled to take 3000 shares,
respectively.
(c) Diamond Ltd. shall be entitled to take 2,67,000 shares and not entitled to take 3000 shares,
respectively.
(d) Diamond Ltd. shall be entitled to take 2,72,000 shares and not entitled to take 7,500 shares,
respectively.
Independent MCQs (14 Marks)
9. Raman is a member and director of a pharmaceutical company. The company proposed to raise capital
for strengthening its structure and reputation in the market. Such matter came for approval before Board
for consideration. Specify the correct statement in the light of the above situation as per the provision
under the SEBI Act, 1992:
(a) Member shall participate in the meeting of the Board to protect its interest in the Company.
(b) Member shall not participate in the meeting of the Board being interested party.
(c) Member, shall only participate in the meeting of the Board being interested party, after disclosure
of his interest
(d) Member being a director with pecuniary interest, shall disclose his interest but shall not take any
part in any decision of the Board. (1 Mark)
10. Mr. Amar is holding the post of directorship in following Listed entities - LE 1, LE 2, LE 3, LE 4, LE 5 LE
6, and LE 7 as on January 2020. He received an offer of directorship from LE 8 in April , 2022. Whether
Amar can join the LE 8?
(a) Yes, as per the SEBI(LODR)Regulation, directorship is restricted to 8 listed entities. Hence Mr.
Amar can.
(b) Yes, as per the SEBI(LODR)Regulation read with the companies Act, 2013, Mr. Amar can accept
directorship in 10 listed companies.
(c) No, as per the SEBI(LODR)Regulation, directorship cannot be in more than seven listed entities,
Mr. Amar cannot.
(d) Yes, as no restriction is marked on holding of directorship in the Listed companies. (2 Marks)

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11. Mr. D holds directorship in 10 Public Companies and 11 Private Companies as on 31.05.2022. One of
the above Private Company is a dormant Company.Further on 30.06.2022 a Private Company has
become a subsidiary of a Public Company.
In the light of the provisions of the Companies Act, 2013 examine and decide the validi ty of holding
directorship of Mr.D with reference to number of directorship as on 31.05.2022 and as on 30.06.2022.
(a) Holding of directorship of Mr. D as on 31.05.2022 is invalid whereas holding of directorship of Mr.
D as on 30.06.2022 is valid
(b) Holding of directorship of Mr. D as on 31.05.2022 is valid whereas holding of directorship of Mr. D
as on 30.06.2022 is not valid
(c) Holding of directorship of Mr. D as on 31.05.2022 is valid whereas holding of directorship of Mr. D
as on 30.06.2022 is also valid
(d) Holding of directorship of Mr. D as on 31.05.2022 is invalid whereas holding of directorship of Mr.
D as on 30.06.2022 is also invalid. (2 Marks)
12. Out of the total strength of six Directors of SQ Transformers Limited, five are attending a Board Meeting
to consider the investment of funds of the company. The resolution relating to investment shall be taken
as passed in which of the following cases:
(a) When all the five Directors of SQ Transformers Limited attending the meeting consent to such
investment of funds.
(b) When any four Directors of SQ Transformers Limited out of five attending the meeting consent to
such investment of funds.
(c) When any three Directors of SQ Transformers Limited out of five attending the meeting co nsent to
such investment of funds.
(d) Investment proposal must be consented to by the total strength of six Directors of SQ Transformers
Limited. (1 Mark)
13. Mr. Ravi, an Inspector appointed under the Companies Act, 2013, started investigations into the affairs
of A Innovative Solutions Ltd. During the process of investigation, Mr. Ravi came across certain facts
and information regarding the transactions made by A Innovative Solutions Ltd. with its subsidiary
company B InfoTech Solutions Ltd. Based on the information so collected from the investigation, Mr.
Ravi wanted to investigate the affairs of B InfoTech Solutions Ltd. also . Find the correct answer from
the provided options, whether Mr. Ravi can proceed with the investigation of the affairs of subsidiary
company B InfoTech Solutions Ltd. in the light of the applicable provisions of the Companies Act, 2013.
(a) Mr. Ravi shall be able to proceed with the investigation of the affairs of B InfoTech Solutions Ltd.
after obtaining the prior approval of the Director, Serious Fraud Investigation Office (SFIO).
(b) Mr. Ravi shall not be able to proceed with the investigation of the affairs of B InfoTech Solutions
Ltd. since it is not within his powers to undertake investigation of any other entity.
(c) Mr. Ravi shall be able to proceed with the investigation of the affairs of B InfoTech Solutions Ltd.
after obtaining the prior approval of the National Company Law Tribunal in whose jurisdiction the
registered office of the subsidiary company is located.
(d) Mr. Ravi shall be able to proceed with the investigation of the affairs of B InfoTech Solutions Ltd.
after obtaining the prior approval of the Central Government. (2 Marks)

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14. Mr. X, a Director of a company, was appointed as Managing Director on 1st April 2021. One of the terms
of appointment was that in the absence of adequacy of profits or if the company had no profits in a
particular year, he will be paid remuneration in accordance with Schedule V. For the financial year ended
31st March 2023, the company suffered heavy losses. The company was not in a position to pay an y
remuneration but he was paid 100 lakhs for the year. The effective capital of the company is 150 crore.
Referring to the provisions of the Companies Act, 2013, as contained in Schedule V, examine the validity
of the above payment of remuneration to Mr. X.
(a) Payment of 100 lakhs being made to Mr. X is within the prescribed limit and can be validly made
to him.
(b) Payment of 100 lakhs being made to Mr. X is not within the prescribed limit and cannot be validly
made to him.
(c) Payment of 100 lakhs being made to Mr. X is less than the prescribed limit and so cannot be validly
made to him.
(d) Payment of 100 lakhs being made to Mr. X is not the prescribed limit and can be validly made to
him. (2 Marks)
15. Krishna Kant, Surya Kant and other persons known to them from close quarters formed Gopala Money
Nidhi Limited with a paid-up capital of Rs. 20,00,000 in Gujarat. Choose the correct option from those
given below that indicates the nature of activity in which Gopala Money Nidhi Limi ted would be involved
in:
(a) Gopala Money Nidhi Limited was formed with the object to deal with savings amongst its members
(b) Gopala Money Nidhi Limited was formed with the object of receiving deposits from its members
and others
(c) Gopala Money Nidhi Limited was formed with the object of lending money to its members only
(d) Gopala Money Nidhi Limited was not formed with the object to deal with savings amongst its
members but for deposit of money from others (2 Marks)
16. Neelima was an interested director when her company Sagar Suppliers Limited entered into a supply
contract worth Rs. 20,00,000 with Sriniwas Tubes and Pipes Limited under which the latter company
would supply requisite items for full one year to the former company. However, Neelima did not disclose
her interest at the time when Board Meeting of Sagar Suppliers Limited where the issue of supply
contract was discussed and even participated in the discussion. Which of the following options is
applicable in the given situation:
(a) Since Neelima did not disclose her interest, the contract is voidable at the option of Sriniwas Tubes
and Pipes Limited
(b) Since Neelima did not disclose her interest, the contract is voidable at the option of Sagar Suppliers
Limited
(c) Since Neelima did not disclose her interest, the contract can be enforced only upto 50% of its value
i.e. maximum upto Rs. 10,00,000
(d) Since Neelima did not disclose her interest, the whole contract is void and cannot be enforced
(2 Marks)

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 DIVISION B: Descriptive Questions (70 Marks)
Question No. 1 is compulsory. Attempt any four questions out of the remaining five questions.
1. (a) Mr. Aarav is a partner in GARUD LLP, a consulting firm. Following table depicts the percent of
gross turnover of GARUD LLP attributable to services rendered to one of its client “VIVAAN Ltd.”
during the last 3 Financial Years:-
Year % of gross turnover of GARUD LLP attributable
to services rendered to VIVAAN Ltd.

2021 4%
2022 3%
2023 6%

During the last F.Y., GARUD LLP had also rendered services to SATVIK Ltd., an associate
company of VIVAAN Ltd., amounting to 10.5% of its gross turnover. Further, Mr. Aarav had been
levied a penalty under section 271J of Income-tax Act, 1961, two years back, confirmed by Income-
tax Appellate Tribunal.
Besides, Ms. Avni, sister of Mr. Aarav, is holding security in the SATVIK Ltd. of value 51 Lakh
during the current year 2023-2024.
Examine in the light of the given situations as per the requirement of the Companies Act, 2013,
eligibility of Mr. Aarav to be appointed as an Independent Director of VIVAAN Ltd. and also to be
a Registered Valuer, assuming satisfaction of other conditions for the same. Also analyse the
situation and its impact on eligibility of Mr. Aarav to be appointed as Independent Director, in lieu
of security holding of Ms. Avni in SATVIK Ltd. (2+3+3 Marks)
(b) Examine the following situations in the light of the relevant provision of the Companies Act, 2013:
(1) The Board of Director of ABC Ltd. declared dividend for the financial year 2021-2022.
However, the company failed to pay the dividend to the shareholders within prescribed period.
Mr. future, a director on the board, had offer of appointment in PQR Ltd. He desires to take
up the post in the PQR Ltd. Discuss.
(2) Mr. Talented was a director in a holding company and also in its subsidiary company. He was
drawing his managerial remuneration from both the companies in his capacity as a director.
It was brought to the attention of the company that he cannot draw remuneration from both
the companies because of virtue of relationship as a holding and subsidiary company.
Discuss. (6 Marks)
2. (a) Necessity Limited was engaged in the manufacturing of various Household items. Two of the
directors along with the Chief Financial Officer, were engaged in a lot of malpractice and falsifying
accounts. Some of the employees who were also members of the company became suspicious
that serious fraud was perpetrated by the directors in collusion with the Chief Financial Officer.
They decided to file an application with the Central Government under Section 212 of the
Companies Act, 2013 for carrying out an investigation into the affairs of the company by Serious
Fraud Investigation Office. 1600 of the 2000 members passed a resolution for investigation by the
Central Government into the affairs of the company. The Central Government accepted their
application and assigned its investigation to SFIO.
The two of the directors believed that the application was not tenable since it was not filed by 90%
of the members of the company.

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 State the circumstances under which the Central Government can carry out an investigation into
the affairs of a company under Section 212 of the Companies Act, 2013. In the light of the said
provisions, state whether the application filed by the members is tenable. (4 Marks)
(b) Sangram Limited was in the process of liquidation. It had some correspondence with its auditor,
which was in the company's letter head. The auditor observed that the letter head was not in
compliance with Section 344, as it did not mention the fact that the company was being wound up.
He immediately called up one of the directors and advised him about the provisions of Section 344
and the consequences of non-compliance. State, the provisions and consequences regarding
which the auditor would have advised. (4 Marks)
(c) Hill Limited, an Indian company obtained an External Commercial Borrowing (‘ECB’) of USD 50,000
dated 30 th June 2021, from a foreign lender. On 2 nd July 2022, based on mutual consent of the
parties, ECB is fully converted into equity. The shares were issued to foreign lender at the par
value and not at fair value. You are required to provide the correct legal position regarding the
valuation of shares and state the reporting requirements by Hill Limited at the time of conversion
of ECB into equity in the light of the provisions of the Foreign Exchange Management Act, 1999
and the Rules made thereunder. (3 Marks)
(d) Mr. Vishwa, an Indian resident, working in Singapore for last ten years. He is currently holding
assets and bank balances in Singapore and planning to settle down in India. You being an expert
under the FEMA, Mr. Vishwa seeks your advice as to whether he can hold, own, transfer or invest
in a foreign currency, foreign security or any immovable property situated outside India as per the
Foreign Exchange Management Act, 1999. (3 Marks)
3. (a) Referring to the provisions of the Companies Act, 2013 and the Companies (Registered Valuer and
Valuation Rules), 2017 answer the following:
(i) Mr. Shah was convicted by Court in case of valuation report issued to X Limited for preferential
allotment to Outlook investors. The valuer made no due diligence, and methods adopted
while valuing the company intended to defraud its members. What will be the liability of
Mr. Shah in the above-mentioned conviction?
(ii) Mr. Ravish, a Chartered Accountant, was convicted by the Court to civil offence dated
31st December, 2013 for 10 years. On 1st January, 2023, he wants to registered himself as a
registered valuer. Can Mr. Ravish register himself as a registered valuer? (4 Marks)
(b) Sunshine Benefit Fund Limited, incorporated as a Nidhi Company under the Companies Act, 2013.
The Board of Directors have decided to provide Locker Facilities on rent to its members and have
estimated that rental income from such letting would be around 25% of the gross income of the
company. Examine the legal validity on the proposal of the Board of Directors to provide Locker
facilities on rent ? (4 Marks)
(c) Aman, a Chartered Accountant with his own independent practice, was appointed as an arbitrator
in an arbitration entered between A Ltd., and B Ltd.
Scenarios I - Prior to starting his practice, Aman had already worked for five years with A Ltd.
Scenarios II – During the proceedings before the arbitral tribunal, Aman would allow A Ltd take
many liberties, for instance taking as much time for making oral arguments, cross examining the
witnesses, for submitting documents, etc. Also the proceedings were adjourned (postponed)
whenever so requested by A Ltd when B Ltd wanted to take extra time they were not allowed. In
few instances when they were permitted, they are asked to pay heavy cost to A Ltd for delaying
the proceedings.

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 B Ltd on the basis of above scenarios wanted to challenge the appointment of Mr. A man. State
whether the appointment of Mr. Aman as an arbitrator can be challenged? State your answer in
the light relevant legal provision of the Arbitration and Conciliation Act, 1996. (6 Marks)
4. (a) Leading Ltd. filed an application to the registrar for removal of the name of company from the
register of companies after passing special resolution. On the complaint of certain members,
Registrar came to know that already an application is pending before the Tribunal for the approval
of proposed compromise or arrangement scheme. The application of compromise or arrangement
was filed two months prior to filing of this application to the Registrar.
Determine the given situations in the lights of the given facts as per relevant provisions of the
Companies Act, 2013:
(i) Legality of filing an application by Leading Ltd. before the Registrar.
(ii) Consequences if Leading Ltd. files an application in the above given situation.
(iii) In case Registrar notifies Leading Ltd. as dissolved under section 248 in compliances to the
required provisions, what remedy will be available to the aggrieved party? (8 Marks)
(b) (i) Crown Industrial Conveyors Limited had advanced a loan of ` 1 crore to M & Co. Private Limited
whose office was functioning in a rented house property belonged to Mr. M, the Managing Director.
The lending company intends to attach the property of Mr. M as liquidation asset and seeks your
advice with regard to its position in a Liquidation proceeding initiated under the Insolvency and
Bankruptcy Code 2016. (4 Marks)
(ii) Whether it is possible to go for a liquidation process before the submis sion of resolution plan.
(2 Marks)
5. (a) (i) Search & Find Pte. Ltd., incorporated in Singapore. The Company sells its goods through
electronic mode on the e-commerce platforms in India, however, it does not have any branch
or office in India. Is the Company required to submit the documents as required under Section
380 of the Companies Act, 2013. (3 Marks)
(ii) Arica is a Company Limited incorporated in Singapore desires to establish a branch office at
Mumbai. You being a practicing Chartered Accountant have been appointed by the company
as a liaison officer for compliance of legal formalities on behalf of the company. Examining
the provisions of the Companies Act, 2013, answer the following:
(1) Whether branch office will be considered as a company incorporated outside India.
(2) If yes, state the documents you are required to furnish on behalf of the company, on the
establishment of a branch office at Mumbai. (5 Marks)
(b) (i) The Special Court at Jaipur passed the final order that Mr. Rohit has committed the offences
of money laundering. The Special Court ordered to confiscate the property of Mr. Rohit.
However, his friend Mr. Mohit claimed that he is the beneficial owner of the property since he
has given finance against the property and have encumbrance on it. Based on the above
scenario, referring to provisions of the Prevention of Money Laundering Act, 2002, comment
whether Mr. Mohit has encumbrance on the property after the final order having been passed
by the special court and conclude who has the vested interest in the property? (3 Marks)
(ii) A Police officer arrested Mr. Radhe without any warrants for the offence committed under the
Prevention of Money Laundering Act, 2002(PMLA). State the validity of the act of the police
officer? When can the special court take cognizance of any offence under the PMLA, 2002?
(3 Marks)

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6. (a) The Securities and Exchange Board of India (SEBI) has undertaken inspection of books of
accounts and records of LR Ltd., a listed public company. Specify the measures which may be
taken by SEBI under the Securities and Exchange Board of India Act, 1992 to pro tect the interest
of investors and securities market, on completion of such inquiry. (4 Marks)
(b) Mr. Human is registered as an Intermediary fails to enter into an agreement with his client and
hence penalised by SEBI under the SEBI Act,1999. Advise Mr. Human as to what remedies are
available to him against the order of SEBI. (4 Marks)
(c) Pursuant to Section 33 of the Insolvency and Bankruptcy Code, 2016 (IBC, 2016) a liquidation
order was passed against Luci Soya Limited (LSL) (Corporate Debtor) by the Adjudicating Authority
(NCLT). Mr. Solanki was appointed as the liquidator by the NCLT. Upon resuming his mantle,
Mr. Solanki started collecting claims from all the creditors within the time frame as prescribed in
the IBC, 2016. While initiating the liquidation process as per provisions of the IBC, 2016,
Mr. Solanki proposed to include the equity shares of one of its subsidiary as part of the liquidation
estate in relation to the corporate debtor. Besides this, one of the unsecured financial creditor
demanded that, at the time of distribution of liquidation proceeds, his dues may be paid before the
government dues are paid. Mr. Solanki also observed that pending legal proceedings against the
corporate debtor, 'A' Ltd, an operational creditor, has filed a case with the Arbitral Tribunal praying
for an arbitral award against LSL.
On the basis of the above information and in the light of the Insolvency and Bankruptcy Code,
2016, answer the following:
(i) Whether the proposal of Mr. Solanki to include the equity shares of the subsidiary Company
of LSL as part of liquidation estate is tenable?
(ii) Whether 'A' Ltd will succeed in its prayer for an arbitral award against LSL? (3 Marks)
(d) The Adjudicating Authority under the Prevention of Money Laundering Act, 2002 (the Act) made an
order under Section 8(3), confirming the provisional attachment of property made under Section
5(1) of the said Act. Mr. Rana, owner of the attached property, aggrieved by the order, wanted to
make an appeal to the Appellate Tribunal. However, before making an appeal Mr. Rana is
adjudicated as an insolvent. Explain, with reference to the relevant provisions of the said Act,
whether appeal could be made to Appellate Tribunal in the present case? (3 Marks)

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