CA Foundation

Paper 2 - Business
Laws
Case Studies Questions
By - CA Shantam Gupta
Question 1
ABC Limited was registered as a public company. There were 245 members in
the company. Their details are as follows:
Directors and their relatives 190
Employees 15
Ex-employees (shares were allotted when they were employees) 20
Others 20
(Including 10 joint holders holding shares jointly in the name of father and son)
The Board of directors of the company propose to convert it into a private
company. Advice whether reduction in the number of members is necessary
for conversion.
(4 Marks)

By - CA Shantam Gupta
Question 2
Ayush, who is a minor, purchased 10 fancy coats for the wedding
ceremony of his sister on credit from M/s Surjewala & sons. The
cost of all coats was Rs 80,000. Not even a single coat was a
necessity. Ayush has assets of worth of Rs.1,00,000. M/s Surjewala
& sons file a suit against Ayush for recovery of Rs.80,000 out of his
assets. Following the provisions of Indian Contract Act, 1872,
whether Ayush is liable to pay ` Rs.80,000 to M/s Surjewala & sons?
(6 Marks)

By - CA Shantam Gupta
Question 3
Samar was in search of a second-hand car. For this purpose, he
approached “Car Wala 007”, a dealer in pre-owned cars. The
sales manager of “Car Wala 007” showed him three cars which
were standing in the parking lane just outside the office. Samar
finalised red Wagon R car. After completing the documenting
formalities and receiving the price of car, sales manager of “Car
Wala 007” handed over the key of car to Samar. But when Samar
was coming to parking area for picking the car, the electric poll
fell on the car which badly damaged the car. Samar claimed that
repair expenses of the car should be borne by “Car Wala 007” as
car was not delivered to him. Referring to the provisions of the
Sales of Goods Act 1930, state who will be liable to get the car
repaired?
By - CA Shantam Gupta (6 Marks)
Question 4
Mr. Nikhil has decided to get interior work for his new office. For this purpose, he
entered into a contract with M/s Sherry Fine Interiors. It was agreed that M/s Sherry
Fine Interiors will complete the interior work latest by 31st January, 2023. On 31st
January, 2023, Mr. Nikhil observed that only 20% to 30% work has been completed.
He decided to cancel the contract with M/s Sherry Fine Interiors. On cancellation of
the contract, M/s Sherry Fine Interiors filed a suit against Mr. Nikhil for recovery of
the cost which it has incurred on the interior work. Mr. Nikhil argued that M/s Sherry
Fine Interiors did not complete the work within the time as per contract and further
the work done till 31st January, 2023 by M/s Sherry Fine Interiors was of no use for
him as he has to appoint a new interior designer. Explain, whether Mr. Nikhil is liable
to pay the cost of work done by M/s Sherry Fine Interiors under the provisions of
Indian Contract Act, 1872?
(4 Marks)

By - CA Shantam Gupta
Question 5
Mr. Samuel agreed to purchase 100 bales of cotton from Mr.
Varun, out of his large stock and sent his men to take delivery of
the goods. They could pack only 60 bales. Later on, there was an
accidental fire and the entire stock was destroyed including 60
bales that were already packed. Referring to the provisions of the
Sale of Goods Act, 1930 explain as to who will bear the loss and
to what extent?
(6 Marks)

By - CA Shantam Gupta
Question 6
Mr. G sold some goods to Mr. H for certain price by issue of an invoice, but
payment in respect of the same was not received on that day. The goods
were packed and lying in the godown of Mr. G. The goods were inspected by
H's agent and were found to be in order. Later on, the dues of the goods
were settled in cash. Just after receiving cash, Mr. G asked Mr. H that goods
should be taken away from his godown to enable him to store other goods
purchased by him. After one day, since Mr. H did not take delivery of the
goods, Mr. G kept the goods out of the godown in an open space. Due to
rain, some goods were damaged. Referring to the provisions of the Sale of
Goods Act, 1930, analyse the above situation and decide who will be held
responsible for the above damage. Will your answer be different, if the dues
were not settled in cash and are still pending?
(6 Marks)

By - CA Shantam Gupta
Question 7
M/s XYZ & Associates, a partnership firm with X, Y, Z as senior partners were
engaged in the business of carpet manufacturing and exporting to foreign
countries. On 25thAugust, 2016, they inducted Mr. G, an expert in the field of
carpet manufacturing as their partner. On 10th January 2018, Mr. G was
blamed for unauthorized activities and thus expelled from the partnership by
united approval of rest of the partners.
(i) Examine whether action by the partners was justified or not?
(ii) What should have the factors to be kept in mind prior expelling a partner
from the firm by other partners according to the provisions of the Indian
Partnership Act,1932?
(6 Marks)

By - CA Shantam Gupta
Question 8

Chhotu of 17 years has purchased a mobile of ` 25,000 for his

online classes from Mobile Sales Centre on credit. On due date, he
did not make the payment of mobile. Mobile Sales Centre sued
Chhotu and his parents for the price of mobile. Chhotu has `
Rs.15,000 as his cash balance but his father has enough money to
pay the price of mobile. Who will be liable to pay the price of mobile
under the provisions of Indian Contract Act, 1872?
(6 Marks)

By - CA Shantam Gupta
Question 9
A and B are partners in M/s Aee Bee & Company. Firm is doing business of
trading of plastic bottles. A is authorised to sell the stock of plastic
bottles. It was decided between them that A should sell the plastic bottles
at the minimum price which they have decided and if A sell at a price less
than minimum price, he should first take the permission of B. Due to
sudden change in government policy, the price of plastic bottles was
continuously declining. To save the loss of firm, A sold the stock at lower
price. Meanwhile, A tried to contact B but couldn’t do so as B was on
foreign trip. Afterwards when B came, he filed the suit to recover the
difference of sale price and minimum price to the firm. Whether B can do
so under the provisions of Indian Partnership Act ,1932?
(6 Marks)

By - CA Shantam Gupta
Question 10
Ram Bilas Yadav is a farmer. Anna Chips Company approached him and
entered in a contract to supply 100 quintals of potatoes which to be grown in
the fields belonging to Ram Bilas Yadav @ Rs1000/- per quintal. Anna Chips
Company made the payment of price but delivery to be made after six months.
Before the time of delivery, the whole crop of potatoes was destroyed due to
flood. Anna Chips Company demanded the payment of price which is already
made by it. Ram Bilas Yadav denied returning the price by saying that contract
of sale was already entered and hence crop belongs to Anna Chips Company.
Hence loss of crop must be borne by it. Referring to the provisions of the Sale
of Goods Act, 1930, whether Anna Chips Company recover amount from Ram
Bilas Yadav?
(6 Marks)

By - CA Shantam Gupta
Question 11
Seema was running a boutique in New Delhi. She was to deliver some cloth to
her friend Kiran who was putting up an exhibition at Mumbai. Seema
delivered the sewing machine and some cloth to a railway company to be
delivered at a place where the exhibition was to be held. Seema expected to
earn an exceptional profit from the sales made at this exhibition however she
did not bring this fact to the notice of the railway’s authorities. The goods
were delivered at the place after the conclusion of the exhibition. On account
of such breach of contract by railways authorities, can Seema recover the
loss of profits?
(6 Marks)

By - CA Shantam Gupta
Question 12
Ashwin goes to super market to buy a Air Conditioner. He selects a
branded Air Conditioner having a price tag of Rs.40,000 after a
discount of Rs.3000. Ashwin reaches at cash counter for making
the payment, but cashier says, “Sorry sir, the discount was upto
yesterday. There is no discount from today. Hence you have to pay
Rs.43,000.” Ashwin got angry and insists for Rs.40,000. State with
reasons whether under Indian Contract Act, 1872, Ashwin can
enforce the cashier to sell at discounted price i.e. ` Rs. 40,000.
(4 Marks)

By - CA Shantam Gupta
Question 13
Mrs. Geeta went to the local rice and wheat wholesale shop and asked for 100 kgs of
Basmati rice. The Shopkeeper quoted the price of the same as ₹125 per kg to which
she agreed. Mrs. Geeta insisted that she would like to see the sample of what will be
provided to her by the shopkeeper before she agreed upon such purchase. The
shopkeeper showed her a bowl of rice as sample. The sample exactly corresponded
to the entire lot. The buyer examined the sample casually without noticing the fact
that even though the sample was that of Basmati Rice but it contained a mix of long
and short grains. The cook on opening the bags complained that the dish if prepared
with the rice would not taste the same as the quality of rice was not as per
requirement of the dish. Now Mrs. Geeta wants to file a suit of fraud against the
seller alleging him of selling mix of good and cheap quality rice. Will she be
successful ? Explain the basic law on sale by sample under Sale of Goods Act
1930? Decide the fate of the case and options open to the buyer for grievance
redressal as per the provisions of Sale of Goods Act 1930? What would be your
answer in case Mrs. Geeta specified her exact requirement as to length of rice?
(6 Marks)
By - CA Shantam Gupta
Question 14
Ram consults Shyam, a motor-car dealer for a car suitable for
touring purposes to promote the sale of his product. Shyam
suggests ‘Maruti’ and Ram accordingly buys it from Shyam. The
car turns out to be unfit for touring purposes. What remedy Ram
is having now under the Sale of Goods Act, 1930?

By - CA Shantam Gupta
Question 15
Examine the validity of the following contracts as per the Indian
Contract Act, 1872 giving reasons.
(i) X aged 16 years borrowed a loan of Rs.50,000 for his personal
purposes. Few months later he had become major and could not
pay back the amount borrowed, on due date. The lender wants
to file a suit against X.
(ii) J contracts to take in cargo for K at a foreign port. J's
government afterwards declares war against the country in
which the port is situated and therefore the contract could not
be fulfilled. K wants to file a suit against J.
(6 Marks)

By - CA Shantam Gupta
Question 16
P sells by auction to Q a horse which P knows to be unsound. The horse
appears to be sound but P knows about the unsoundness of the horse. Is this
contract valid in the following circumstances under the Indian Contract Act,
1872:
(a) If P says nothing about the unsoundness of the horse to Q.
(b) If P says nothing about it to Q who is P’s daughter who has just come of
age.
(c) If Q says to P “If you do not deny it, I shall assume that the horse is
sound.” P says nothing.
(3 Marks)

By - CA Shantam Gupta
Question 17
Mr. M is one of the four partners in M/s XY Enterprises. He owes a sum of ₹6
crore to his friend Mr. Z which he is unable to pay on due time. So, he wants
to sell his share in the firm to Mr. Z for settling the amount. In the light of the
provisions of the Indian Partnership Act, 1932, discuss each of the following:
(i) Can Mr. M validly transfer his interest in the firm by way of sale?
(ii) What would be the rights of the transferee (Mr. Z) in case Mr. M wants to
retire from the firm after a period of 6 months from the date of transfer?
(6 Marks)

By - CA Shantam Gupta
Question 18
X, Y and Z are partners in a Partnership Firm. They were carrying their
business successfully for the past several years. Due to expansion of
business, they planned to hire another partner Mr. A. Now the firm has 4
partners X, Y, Z and A. The business was continuing at normal pace. In one of
formal business meeting, it was observed that Mr. Y misbehaved with Mrs. A
(wife of Mr. A).Mr. Y was badly drunk and also spoke rudely with Mrs. A. Mrs. A
felt very embarrassed and told her husband Mr. A about the entire incident. Mr.
A got angry on the incident and started arguing and fighting with Mr. Y in the
meeting place itself. Next day, in the office Mr. A convinced X and Z that they
should expel Y from their partnership firm. Y was expelled from partnership
without any notice from X, A and Z.
Considering the provisions of the Indian Partnership Act, 1932, state whether
they can expel a partner from the firm. What are the criteria for test of good
faith in such circumstances?
(6 Marks)
By - CA Shantam Gupta
Question 19
Rahul, a minor, falsely representing his age, enters into an agreement with
a shopkeeper for a loan amount for purchasing a laptop. He gave his
expensive watch as a security and took a loan of ₹ 40,000. He was very
happy to get ₹ 40,000 and quickly went to the market and purchased a
laptop worth ₹ 30,000. He happily spent the rest of the amount with his
friends on a pleasure trip. Later on, Rahul realized that his watch was an
expensive watch and he should not have given like this to the shopkeeper.
So, he went back to the shopkeeper and asked for his watch back. Also,
he refused to repay the loan amount. The shopkeeper disagrees to this
and files a case against minor for recovery of the loan amount. Can the
shopkeeper succeed in recovering the loan amount under the Indian
Contract Act, 1872?

By - CA Shantam Gupta
Question 20
X, Y and Z jointly borrowed ₹90,000 from L. Decide each of the following in the
light of the Indian Contract Act, 1872:
(i) Whether L can compel only Y to pay the entire loan of ₹90,000?
(ii) Whether L can compel only the legal representatives of Y to pay the loan of
₹90,000, if X, Y and Z died?
(iii) Whether Y and Z are released from their liability to L and X is released
from his liability to Y and Z for contribution, if L releases X from his liability
and sues Y and Z for payment?
(6 Marks)

By - CA Shantam Gupta
Question 21
Mr. L let out his residential house to Mr. M for ₹50,000 p.m. for 3 a
period of one year. According to the Rent agreement, electricity bill
will be paid by Mr. L. But Mr. L could not pay electricity dues up to 5
months, due to his financial hardships. The Electricity Board sent the
notice of disconnection, if it is not paid within a week’s time. To avoid
all this, Mr. M paid the electricity bill of ₹50,000 with penalty. Later on,
L refused to reimburse ₹50,000 and argued that he has paid bill
voluntarily because of his own interest. Decide with reference to
provisions of The Indian Contract Act, 1872 whether Mr. M is entitled
to be reimbursed by Mr. L ?

By - CA Shantam Gupta
Question 22
Mr. A offered to sell 25 chairs to Mr. B @ Rs. 1,500 per chair on 12.02.2024. A
promised B that he would keep the offer open till 15.02.2024. However, on
13.02.2024, he sold those chairs to Mr. C @ Rs. 1,700 per chair without the
knowledge of B. Mr. B communicated the acceptance of the above offer on
14.02.2024. Advise, with reference to provisions of The Indian Contract Act,
1872 whether Mr. B can claim damages from Mr. A ?

By - CA Shantam Gupta
Question 23
Mr. A was running an orphanage. His friend Mr. S, a philanthropist
agreed to donate Rs. 2 lakh for treatment of a child, who was suffering
from cancer. On emergency Mr. A incurred Rs. 1.5 lakh on treatment of
child. Now Mr. S refused to pay. Whether Mr. A can claim rupee 1.5
lakh from Mr. S with reference to provisions of The Indian Contract Act,
1872 ?

By - CA Shantam Gupta
Question 24
Referring to the provisions of the
Companies Act, 2013, advise Kamal
regarding eligibility of his short-listed
friends to be appointed nominee and the
procedure to be followed for changing the
name of the nominee as per the provisions
of The Companies Act, 2013.

By - CA Shantam Gupta
Question 25
XYZ Ltd. was incorporated to hold the patent for a new product. The company
is expecting to start its commercial production within the next two years. In
the meanwhile, for timely installation, the company has placed the purchase
order for plant and machinery with a down payment of Rs. 1 crore. Referring
to the provisions of The Companies Act, 2013 examine, whether the company
can go for acquiring the status of a dormant company ?

By - CA Shantam Gupta
Question 26
M/s RK Traders (Buyer) made a contract with M/s CK Traders (Seller) for purchase of 2000 kg
of basmati rice specifically grown in Chhattisgarh State should be packed in pink colour bags
of 25 kg each to identify the place of origin by specifying the mode of packing of basmati
rice. The seller agreed for specific packing of rice grown in Chhattisgarh State. However, by
misunderstanding staff of seller packed the quantity of 1800 kg of basmati rice grown in the
State of Maharashtra in white colour bags of 30 kg each and the remaining quantity of 200
kg, grown in Chhattisgarh State, in pink colour bags of 25 kg each. Referring to the provisions
of the Sale of Goods Act, 1930 analyse, whether the buyer has the right to reject the entire
quantity of basmati rice supplied by the seller. On the other hand what is the remedy
available to buyer if he has to accept the entire quantity to fulfil his other contracts with other
parties ?

By - CA Shantam Gupta
Question 27
Kartik agreed to sell his laptop to Vasant for a price to be fixed 3 by Kusum a
hardware engineer. However, before the delivery of the laptop, Kartik changed his
mind and did not share any particulars and configuration of the laptop with Kusum,
which made her unable to do the valuation. Kusum refused to do valuation. Vasant
needed laptop for his project, so he promised Kartik that, if the laptop is delivered to
him, he would pay a reasonable price for it. However, Kartik decided not to sell his
laptop to Vasant. Now, Vasant wants to know from you, being a legal expert, whether
Kartik is bound by his promise as he agreed earlier to deliver his laptop to him at a
reasonable price. If he does not agree to deliver what is the other remedy available to
Vasant ? Advise, referring to the provisions of the Sale of Goods Act, 1930.

By - CA Shantam Gupta
Question 28
Referring to the provisions of the Indian Partnership Act, 1932, answer the following : Ram
and Shyam are partners in a partnership firm styled as RS & Co. (the firm). Gopal, a
renowned businessman, is their common friend. Ram introduced Gopal to Sundar, a supplier
to the firm, as his newly joined partner, Gopal knowing that he is not a partner preferred to
keep quiet on such an introduction. This information about Gopal, being a partner of the firm,
was shared by Sundar with another businessman Madhav. Next day, Sundar supplied the raw
material on credit and Madhav lent Rs. 5 lakhs to the firm for a short period on the
understanding that Gopal is a partner of the firm. On due dates, the firm failed to discharge
its liability towards both. Advise Gopal, whether he is liable to Sundar and Madhav for the
aforesaid liability of the firm.

By - CA Shantam Gupta
Question 29
On admission as a new partner, Amar agreed to be liable for the existing
debts (referred to as the old debts) of the firm by an agreement signed by the
all partners including Amar. Examine, whether Amar will be liable in a suit
filed by the creditor against the firm and all existing partners for recovery of
the old debt of the firm.

By - CA Shantam Gupta
Question 30
Suman, having 10% share in the property of Rs. 200 lakh of a firm retires
from the firm on 31% March, 2023. The firm continues with the business
thereafter without final settlement of accounts between the existing and
retired partners and earned profits of Rs. 10 lakh during the financial year
ending 31% March, 2024. Suman, in her own interest and in the absence of
any provision in the partnership firm on this point, claimed Rs. 3 lakh from the
firm toward the use of her share in the property and profit of the firm which
was rejected by the partners. There is no contract between the partners
contrary to the provisions of the Act in this regard. Examine the validity of the
amount claimed by Suman under the provisions of The Indian Partnership
Act, 1932.

By - CA Shantam Gupta
Question 31
JV Limited borrowed a secured loan of Rs. 5 crore from Star Bank Limited (the bank) to meet
its working capital requirement. However, the borrowing powers of the company, under its
Memorandum of Association, were restricted to Rs. 1 crore. The bank released the loan
amount in two instalments of Rs. 1 crore and Rs. 4 crore. On the due date for repayment of
the loan, the company refused to accept the liability of Rs. 5 crore on the ground that the
borrowing was ultra vires the company. The company’s books of account show that the
company has utilised the loan amount of Rs. 3 crore for repayment of its lawful debts. The
utilisation of the remaining Rs. 2 crore cannot be traced. Referring to the doctrine of ultra-
vires under the Companies Act, 2013, examine the validity of the decision of the company
denying the repayment of the loan and explore the remedy, if any, available to the bank for
recovery of the loan.

By - CA Shantam Gupta
Question 32
After incorporation of Goodwill Private Limited (the company) on 15" May, 2024 the share
certificates were issued to Amit, Sumit and Sumati being subscribers to the Memorandum of
Association of the company without affixing the common seal thereon and under the
signature of Amit and Sumit, the directors of the company. The company has yet to appoint a
company secretary. On objection raised by Sumati, a director, about the validity of the share
certificate signed by other two directors, Amit and Sumit, clarified that since the company
has opted not to have the common seal for the company the share certificates (i.e. the
document) signed by two directors are valid. Referring to the provisions of the Companies
Act, 2013, examine the correctness of the objection raised by one of the directors and in
response, the clarification offered by other directors.

Would your answer be different, if the company had a company secretary ?

By - CA Shantam Gupta
Question 33

By - CA Shantam Gupta
Question 34
Woollen Garments Limited entered into a contract with a group of women in July,
2023 to supply various woollen clothes for men, women and kids like sweaters,
monkey caps, mufflers, woollen coats, hand gloves etc. before the commencement
of the winter season. The agreement expressly provides that the woollen clothes
shall be supplied by the end of October, 2023 before starting of winter season.
However, due to the prolonged strike, women group could tender the supplies in
March, 2024 when the winter season was almost over. Analysing the situation and
answer the following questions in light of the provisions of The Indian Contract
Act, 1872 :

A. Whether company can reject the total supply by women group ?

B. Whether company can accept the total supply on request of women group ?

By - CA Shantam Gupta
Question 35
Ashok, a trader, delivered a camera to Mangesh on ‘sale or return’ basis. Mangesh
delivers the camera to Rahul on the terms of “sale for cash only or return’.
Afterward, Rahul delivered it to Vishal on a ‘sale or return’ basis without paying
cash to Mangesh. The camera, which was in the possession of Vishal was lost by
theft though he exercised due care for its safety. Referring to the provisions of The
Sale of Goods Act, 1930, analyse the situation and advise, whether Mangesh, Rahul
or Vishal are, jointly or severally, liable to pay the price of the camera to Ashok.

By - CA Shantam Gupta
Question 36
Ansari of Jaipur sold 100 smart TV set @ Rs.50,000/- per set to Baburam of
Delhi. He delivered the TV sets to Chetan, a transport carrier for transmission to
Baburam. Baburam further sold these 100 TV sets to Shayamlal @ Rs. 60,000/-
per set. On reaching the goods at the destination, Baburam demanded the
delivery but Chetan, wrongfully, refused to deliver the goods to Baburam, That
is why; he failed to deliver TV sets to Shayamlal and suffered a huge loss on
account of non-delivery. Ansari came to know about this. He directed Chetan to
stop the delivery to Baburam and re-deliver the goods to him at Jaipur. Answer
the following questions under the provisions of the Sale of Goods Act, 1930 :

A. Whether Ansari has right to stop the goods in transit ?

B. Whether Baburam can claim loss suffered due to non delivery from Ansari ?

By - CA Shantam Gupta
Question 37
Referring to the provisions of the Negotiable Instruments Act, 1881, answer the
following in the given scenario :
Aman drew the bill of exchange (the bill) on Baban, who 4 accepted it, payable to
Magan or order. Magan indorsed the bill to Gagan. Gagan indorsed the bill to
Akash to be delivered to him on the next day. However, on the death of Gagan on
the same day, his only son Ankit delivered the bill to Akash on the next day as
intended by his deceased father. On presenting the bill on the due date, Baban
refused to pay. Explaining the importance of delivery in negotiation, decide,
whether Akash can enforce the payment of the bill against Baban or the previous
parties.

By - CA Shantam Gupta
Question 38
Referring to the provisions of the Negotiable Instruments Act, 1881, answer the following in the given scenario :

Reliable Limited, an Indian company, is a global leader in 3 Petrochemical products. For payment of the sale
price of machinery imported from Alex Manufacturing Limited, a USA based company (the exporter), the
Indian company drew a bill of exchange on Manish, a resident of Mumbai (India) who accepted the bill at
Mumbai payable to the exporter in Los Angeles, USA. Decide, whether the bill of exchange is an inland
instrument or a foreign instrument. Assume that the bill of exchange was signed by the authorised person for
the drawer company.

By - CA Shantam Gupta
Question 39
Mr. Sohan, a wealthy individual provided a loan of ₹ 80,000 to Mr. Mukesh on 26th February,
2023. The borrower, Mr. Mukesh asked for a further loan of ₹ 1,50,000. Mr. Sohan agreed but
provided the loan in parts on different dates. He provided ₹ 1,00,000 on 28th February, 2023 and
remaining ₹ 50,000 on 3rd March, 2023. On 10th March, 2023 Mr. Mukesh while paying off part
₹ 75,000 to Mr. Sohan insisted that the lender should adjust ₹ 50,000 towards the loan taken
on 3rd March, 2023 and balance as against the loan on 26th February, 2023. Mr. Sohan objected
to this arrangement and asked the borrower to adjust in the order of date of borrowal of funds.
Now you decide:
1. Whether the contention of Mr. Mukesh correct or otherwise as per the provisions of the
Indian Contract Act 1872?
2. What would be the answer in case the borrower does not insist on such order of adjustment
of repayment?
3. What would be the mode of adjustment/appropriation of such part payment in case neither
Mr. Sohan nor Mr. Mukesh insist on any order of adjustment on their part?

By - CA Shantam Gupta
Question 40
Rama directs Shyam to sell laptops for him and agrees to give Shyam eleven percent (11%)
commission on the sale price fixed by Rama for each laptop. As Government of India put
restrictions on import of Laptops, Rama thought that the prices of laptops might go up in near
future and he revokes Shyam's authority for any further sale. Shyam, before receiving the letter
at his end sold 5 laptops at the price fixed by Rama. Shyam asked for 11% commission on the
sale of 5 Laptops for ₹1 lakh each. Explain under the provisions of the Indian Contract Act, 1872:
1. Whether sale of laptops after revoking Shyam's authority is binding on Rama?
2. Whether Shyam will be able to recover his commission from Rama, if yes, what will be the
amount of such commission?

By - CA Shantam Gupta
Question 41
Paridhee, a minor, falsely representing her age, enters into an agreement with an authorised
Laptop dealer Mr. Mittal, owner of MP Laptops, for purchase of Laptop on credit amounting
60,000/- on 1 August 2022. She promised to pay back the outstanding amount with interest @ 16%
p.a. by 31st July 2023. She told him that in case she won't be able to pay the outstanding amount,
her father Mr. Ram will pay back on her behalf. After One year, when Paridhee was asked to pay
the outstanding amount with interest she refused to pay the amount and told the owner that she
is minor and now he can't recover a single penny from her. She will be a major on 1 January 2025
and only after that agreement can be ratified. Explain by which of the following ways, Mr. Mittal
will succeed in recovering the outstanding amount with reference to the Indian Contract Act, 1872.

(i) By filing a case against Paridhee, a minor for recovery of outstanding amount with interest?
(ii) By filing a case against Mr. Ram, father of Paridhee for recovery of outstanding amount?
(iii) By filing a case against Paridhee, a minor for recovery of outstanding amount after she
attains majority?

By - CA Shantam Gupta
Question 42
State with reason(s) whether the following agreements are valid or void as per the Indian
Contract Act, 1872:
1. Where two courts have jurisdiction to try a suit, an agreement between the parties that the
suit should be filed in one of those courts alone and not in the other.
2. X offers to sell his Maruti car to Y. Y believes that X has only Wagon R Car but agrees to buy
it.
3. X, a physician and surgeon, employs Y as an assistant on a salary of 75,000 per month for a
term of two years and Y agrees not to practice as a surgeon and physician during these two
years.

By - CA Shantam Gupta
Question 43
R owns an electronics store. P visited the store to buy a water purifier priced at 54,000/. He
specifically requested R for a purifier with a copper filter. As P wanted to buy the purifier on
credit, with the intention of paying in 9 equal monthly instalments, R demands a guarantor for
the transaction. S (a friend of P) came forward and gave the guarantee for payment of water
purifier. R sold P, a water purifier of a specific brand. P made payment for 4 monthly
instalments and after that became insolvent. Explain with reference to the Indian Contract Act,
1872, the liability of S as a guarantor to pay the balance price of water purifier to R.

What will be your answer, if R sold the water purifier misrepresenting it as having a copper
filter, while it actually has a normal filter? Neither P nor S was aware of this fact and upon
discovering the truth, P refused to pay the price. In response to P's refusal, R filed the suit
against S, the guarantor. Explain with reference to the Indian Contract Act, 1872, whether S is
liable to pay the balance price of water purifier to R?

By - CA Shantam Gupta
Question 44
Shubhangi went to a Jewellery shop and asked the salesgirl to show her diamond necklace with
Sapphire stones. The Jeweller told her that we have a lot of designs of diamond necklace but
with blue stones. If she chooses for herself any special design of diamond necklace with blue
stones, they will replace blue stones with Sapphire stones. But for the Sapphire stones they will
charge some extra cost. Shubhangi selected a beautiful designer necklace and paid for it. She
also paid the extra cost of Sapphire stones. The Jeweller requested her to come back a week
later for delivery of that necklace. When she came after a week to take delivery of necklace, she
noticed that due to Sapphire stones, the design of necklace had been completely disturbed.
Now, she wants to terminate the contract and thus, asked the manager to give her money back,
but he denied for the same. Answer the following questions as per the Sale of Goods Act, 1930.

1. State with reasons whether Shubhangi can recover the amount from the Jeweller.
2. What would be your answer if Jeweller says that he can change the design, but he will
charge extra cost for the same?

By - CA Shantam Gupta
Question 45
J, a wholesaler of premium Basmati rice delivered on approval 100 bags of rice of 10 kg each to
a local retailer, on sale or returnable basis within a month of delivery. The next day the retailer
sold 5 bags of rice to a regular customer K. A week later K informed the retailer that the quality
of rice was not as per the price.

The retailer now wants to return all the rice bags to J, including the 4 bags not used by K. Can
the retailer do so?

Also briefly describe the provisions underlying in this context of the Sale of Goods Act, 1930.

By - CA Shantam Gupta
Question 46
Mrs. Kanchan went to the local rice and wheat wholesale shop and asked for 100 kgs of Basmati rice. The
Shopkeeper quoted the price of the same as 125 per kg to which she agreed. Mrs. Kanchan insisted that she would
like to see the sample of what would be provided to her by the shopkeeper before she agreed upon such purchase.

The shopkeeper showed her a bowl of rice as sample. The sample exactly corresponded to the entire lot.

Mrs. Kanchan examined the sample casually without noticing the fact that ever though the sample was that of
Basmati Rice but it contained a mix of long and short grains.

The cook on opening the bags complained that the dish if prepared with the rice would not taste the same as the
quality of rice was not as per requirement of the dish.

Now Mrs. Kanchan wants to file a suit of fraud against the seller alleging him of selling a mix of good and cheap
quality rice. Will she be successful?

What would be your answer in case Mrs. Kanchan specified her exact requirement as to length of rice?

By - CA Shantam Gupta
Question 47
Ravi sold 500 bags of wheat to Tushar. Each bag contains 50 Kilograms of wheat. Ravi sent
450 bags by road transport and Tushar himself took remaining 50 bags. Before Tushar
receives delivery of 450 bags sent by road transport, he becomes bankrupt. Ravi being still
unpaid, stops the bags in transit. The official receiver, on Tushar's insolvency claims the bags.
Decide the case with reference to the provisions of the Sale of Goods Act, 1930.

By - CA Shantam Gupta
Question 48
P, Q and R formed a partnership agreement to operate motor buses along specific routes for a
duration of 12 years. After operating the business for four years, it was observed that the
business incurred losses each year. Despite this, P is determined to continue the business for
the remaining Period. Examine with reference to the Indian Partnership Act, 1932, can P insist
to continue the business? If so, what options are available to Q and R who are reluctant to
continue operating the business?

By - CA Shantam Gupta
Question 49
Ram and Shyam are partners in a partnership firm styled as RS & Co. (the firm). Gopal, a
renowned businessman, is their common friend. Ram introduced Gopal to Sundar, a supplier to
the firm, as his newly joined partner. Gopal knowing that he is not a partner preferred to keep
quiet on such an introduction. This information about Gopal, being a partner of the firm, was
shared by Sundar with another businessman Madhav. Next day, Sundar supplied the raw
material on credit and Madhav lent 5 lakhs to the firm for a short period on the understanding
that Gopal is a partner of the firm. On due dates, the firm failed to discharge its liability towards
both. Advise Gopal, whether he is liable to Sundar and Madhav for the aforesaid liability of the
firm.

By - CA Shantam Gupta
Question 50
Mr. Y issued a cheque for Rs. 10,000 to Mr. Z which was dishonoured by the Bank because Y did
not have enough funds in his account and has no authority to overdraw. Examine as per the
provisions of the Negotiable Instruments Act, 1881 whether –

i) Mr. Y is liable for dishonour of cheque, if yes, what are the consequences for such an
offence?
ii) What would be your answer if Y issued a cheque as a donation to Mr. Z?

By - CA Shantam Gupta
Question 51
Referring to the provisions of the Negotiable Instruments Act, 1881, answer the following in the
given scenario:

(i) Aman drew the bill of exchange (the bill) on Baban, who accepted it, payable to Magan or
order. Magan indorsed the bill to Gagan. Gagan indorsed the bill to Akash to be delivered to
him on the next day. However, on the death of Gagan on the same day, his only son Ankit
delivered the bill to Akash on the next day as intended by his deceased father. On
presenting the bill on the due date, Baban refused to pay. Explaining the importance of
delivery in negotiation, decide, whether Akash can enforce the payment of the bill against
Baban or the previous parties. (4 Marks)
(ii) Reliable Limited, an Indian company, is a global leader in Petrochemical products. For
payment of the sale price of machinery imported from Alex Manufacturing Limited, a USA
based company (the exporter), the Indian company drew a bill of exchange on Manish, a
resident of Mumbai (India) who accepted the bill at Mumbai payable to the exporter in Los
Angeles, USA. Decide,
By - CA Shantam Gupta
Question 52

By - CA Shantam Gupta
Question 53
Reliable Limited, an Indian company, is a global leader in Petrochemical products. For
payment of the sale price of machinery imported from Alex Manufacturing Limited, a USA
based company (the exporter), the Indian company drew a bill of exchange on Manish, a
resident of Mumbai (India) who accepted the bill at Mumbai payable to the exporter in Los
Angeles, USA. Decide whether the bill of exchange is an inland instrument or a foreign
instrument. Assume that the bill of exchange was signed by the authorised person for the
drawer company.

By - CA Shantam Gupta
Question 54

By - CA Shantam Gupta
Question 55
X, Y and Z jointly borrowed ₹90,000 from L. Decide each of the following in the light of the Indian
Contract Act, 1872:
(i) Whether L can compel only Y to pay the entire loan of ₹90,000?
(ii) Whether L can compel only the legal representatives of Y to pay the loan of₹90,000, if X, Y
and Z died?
(iii) Whether Y and Z are released from their liability to L and X is released from his liability to Y
and Z for contribution, if L releases X from his liability and sues Y and Z for payment?
(6 Marks)

By - CA Shantam Gupta
Question 56
Ajay, Vijay and Sanjay are partners of software business and jointly
promises to pay₹6,00, 000 to Kartik. Over a period of time Vijay became
insolvent, but his assets are sufficient to pay one-fourth of his debts.
Sanjay is compelled to pay the whole. Decide whether Sanjay is required
to pay whole amount himself to Kartik in discharging joint promise under
the Indian Contract Act, 1872.

By - CA Shantam Gupta
Question 57
Mr. Anil formed a One Person Company (OPC) on 16th April, 2018 for
manufacturing electric cars. The turnover of the OPC for the financial
year ended 31st March, 2019 was about ₹2.25 Crores. His friend Sunil
wanted to invest in his OPC, so they decided to convert it voluntarily into
a private limited company. Can Anil do so?
(4 Marks)

By - CA Shantam Gupta
Question 58
Krish, Kamya and Ketan are partners in a firm. They jointly promised to pay
₹6,00,000 to Dia. Kamya become insolvent and her private assets are sufficient
to pay 1/5 of her share of debts. Krish is compelled to pay the whole amount to
Dia. Examining the provisions of the Indian Contract Act, 1872, decide the extent
to which Krish can recover the amount from Ketan.
(4 Marks)

By - CA Shantam Gupta
Question 59
Mr. Dheeraj was running a shop selling good quality washing machines. Mr. Vishal
came to his shop and asked for washing machine which is suitable for washing
woollen clothes. Mr. Dheeraj showed him a particular machine which Mr. Vishal
liked and paid for it. Later on, when the machine was delivered at Mr. Vishal’s
house, it was found that it was wrong machine and also unfit for washing woollen
clothes. He immediately informed Mr. Dheeraj about the delivery of wrong
machine. Mr. Dheeraj refused to exchange the same, saying that the contract was
complete after the delivery of washing machine and payment of price. With
reference to the provisions of Sale of Goods Act, 1930, discuss whether Mr.
Dheeraj is right in refusing to exchange the washing machine?
(6 Marks)

By - CA Shantam Gupta
Question 60
Avyukt purchased 100 Kgs of wheat from Bhaskar at Rs. 30 per kg. Bhaskar says
that wheat is in his warehouse in the custody of Kishore, the warehouse keeper.
Kishore confirmed Avyukt that he can take the delivery of wheat from him and till
then he is holding wheat on Avyukt’s behalf. Before Avyukt picks the goods from
warehouse, the whole wheat in the warehouse has flowed in flood. Now Avyukt
wants his price on the contention that no delivery has been done by seller.
Whether Avyukt is right with his views under the Sale of Goods Act, 1930.
(6 Marks)

By - CA Shantam Gupta
Question 61
Sarthak is employed as a cashier on a monthly salary of Rs 50000 by
ABC Bank for a period of 3 years . Mohit gave surety for sarthak’s good
conduct . After 9 months the financial position of the bank deteriorates .
Then Sarthak agrees to accept a lower salary of Rs 40000 per month
from the bank . Two months later it was found that Sarthak has
misappropriated cash from the time of his appointment .

What is the liability of Mohit taking into account the provisions of the
Indian Contract Act 1872 ?

By - CA Shantam Gupta
Question 62
Sachin bought 1000 Kg rice from Saurabh for ₹1,50,000 on three months
credit. For this purpose, Sachin issued a promissory note to Saurabh on
the same date payable after 3 months. On the date of maturity, the
promissory note was dishonoured. Saurabh filed suit for the recovery of
the amount plus fees of advocate paid by him for defending the suit.

Referring to the provisions of the Negotiable instruments Act, 1881, what

amount could be recovered by Saurabh .

By - CA Shantam Gupta
Question 63
Priyansh purchased some goods from Sumit. He issued a cheque to
Sumit for the sale price on 14th June, 2023. Sumit presented the cheque
in his bank and his bank informed him on 19th June, 2023 that cheque
was returned unpaid due to insufficiency of funds in the account of
Priyansh. Sumit sued against Priyansh under section 138 of the
Negotiable Instruments Act, 1881.

State with reasons, whether this suit is maintainable?

By - CA Shantam Gupta
Question 64
Tycoon Private Limited is the holding company of Glassware Private Limited. As
per the last profit and loss account for the year ending 31st March, 2023 of
Glassware Private Limited, its turnover was ` 1.80 crore and paid-up share capital
was ` 80 lakh. The Board of Directors wants to avail the status of a small
company. The Company Secretary of the company advised the directors that
Glassware Private Limited cannot be categorized as a small company. In the light
of the above facts and in accordance with the provisions of the Companies Act,
2013,

You are required to examine whether the contention of Company Secretary is

correct, explaining the relevant provisions of the Act .

By - CA Shantam Gupta
Question 65
Mr. Ahuja of Delhi engaged Mr. Singh as his agent to buy a house in West
Extension area. Mr. Singh bought a house for 20 lakhs in the name of a nominee
and then purchased it himself for 24 lakhs. He then sold the same house to Mr.
Ahuja for 26 lakhs. Mr. Ahuja later comes to know the mischief of Mr. Singh and
tries to recover the excess amount paid to Mr. Singh. Is he entitled to recover
any amount from Mr. Singh?
If so , how much ? Explain .

By - CA Shantam Gupta
Question 66
Due to urgent need of money amounting to ₹3,00,000, Pawan approached Raman ana
asked him for the money. Raman lent the money on the guarantee of Suraj, Tarun and
Usha. Pawan makes default in payment and Suraj pays full amount to Raman. Suraj,
afterwards, claimed contribution from Tarun and Usha refused to contribute on the
basis that there is no contract between Suraj and him. Examine referring to the
provisions of the Indian Contract Act, 1872, whether Tarun can escape from his
liability.

By - CA Shantam Gupta
Question 67
Rahul was a Disk Jockey at a five-star hotel. As per the contract, he is supposed to perform
every weekend. (i.e. twice a week). Rahul will be paid ` 2,500 per day. However, after a month,
Rahul willfully absents himself from the performance. Taking into account the provisions of the
Indian Contract Act, 1872, answer the following:
(I) Does the hotel have the right to end the contract?
(II) If the hotel sends out a mail to Rahul that they are interested to continue the contract and
Rahul accepts, can the hotel rescind the contract after a month on this ground subsequently?
(III ) In which of the case – (termination of contract or continuance of contract) can the hotel
claim damages that it had suffered as a result of this breach?

By - CA Shantam Gupta
Question 68
Mr. G sold some goods to Mr. H for a certain price by issue of an invoice, but payment in respect
of the same was not received on that day. The goods were packed and lying in the godown of
Mr. G. The goods were inspected by H's agent and were found to be in order. Later on, the dues
of the goods were settled in cash. Just after receiving cash, Mr. G asked Mr. H that goods should
be taken away from his godown to enable him to store other goods purchased by him. After one
day, since Mr. H did not take delivery of the goods, Mr. G kept the goods out of the godown in an
open space. Due to rain, some goods were damaged.
Referring to the provisions of the Sale of Goods Act, 1930, analyse the above situation and
decide who will be held responsible for the above damage. Will your answer be different if the
dues were not settled in cash and are still pending?

By - CA Shantam Gupta
Question 69
M Ltd. contract with Shanti Traders to make and deliver certain machinery to them by 30th
June 2023 for ` 11.50 lakhs. Due to labour strike, M Ltd. could not manufacture and deliver the
machinery to Shanti Traders. Later, Shanti Traders procured the machinery from another
manufacturer for ` 12.75 lakhs. Due to this, Shanti Traders was also prevented from performing
a contract which it had made with Zenith Traders at the time of their contract with M Ltd. and
were compelled to pay compensation for breach of contract. Advise Shanti Traders the amount
of compensation which it can claim from M Ltd., referring to the legal provisions of the Indian
Contract Act, 1872.

By - CA Shantam Gupta
Question 70
Priyansh purchased some goods from Sumit. He issued a cheque to Sumit for the
sale price on 14th June, 2023. Sumit presented the cheque in his bank and his
bank informed him on 19th June, 2023 that cheque was returned unpaid due to
insufficiency of funds in the account of Priyansh. Sumit sued against Priyansh
under section 138 of the Negotiable Instruments Act, 1881. State with reasons,
whether this suit is maintainable?

By - CA Shantam Gupta
Question 71
Nolimit Private Company is incorporated as unlimited company having share
capital of Rs. 10,00,000. One of its creditors, Mr. Samuel filed a suit against a
shareholder Mr. Innocent for recovery of his debt against Nolimit Private
Company. Mr. Innocent has given his plea in the court that he is not liable as he
is just a shareholder.
Explain whether Mr. Samuel will be successful in recovering his dues from Mr.
Innocent?

By - CA Shantam Gupta
Question 72
MNP Private Ltd. is a company registered under the Companies Act, 2013 with
Paid Up Share Capital of ` 5 crores and turnover of ` 35 crores. Explain the
meaning of the "Small Company" and examine the following in accordance with
the provisions of the Companies Act, 2013:
(i) Whether the MNP Private Ltd. can avail the status of small company?
(ii) What will be your answer if the turnover of the company is ` 45 crores?

By - CA Shantam Gupta
Question 73
Kashish was running a business of artificial jewellery since long. He sold his
business to Naman and promises, not to carry on the business of artificial
jewellery and real diamond jewellery in that area for a period of next one year.
After two months, Kashish opened a show room for real diamond jewellery.
Naman filed a suit against Kashish for closing the business of real diamond
jewellery business as it was against the agreement.
Whether Kashish is liable to close his business of real diamond jewellery
following the provisions of Indian Contract Act, 1872?

By - CA Shantam Gupta
Question 74
Ram sells 200 bales of cloth to Shyam and sends 100 bales by lorry and 100 bales
by Railway. Shyam receives delivery of 100 bales sent by lorry, but before he
receives the delivery of the bales sent by railway, he becomes bankrupt. Ram
being still unpaid, stops the goods in transit. The official receiver, on Shyam’s
insolvency claims the goods. Decide the case with reference to the provisions of
the Sale of Goods Act, 1930.

By - CA Shantam Gupta
Question 75
AB sold 500 bags of wheat to CD. Each bag contains 50 Kilograms of wheat. AB
sent 450 bags by road transport and CD himself took remaining 50 bags. Before
CD receives delivery of 450 bags sent by road transport, he becomes bankrupt.
AB being still unpaid, stops the bags in transit. The official receiver, on CD's
insolvency claims the bags. Decide the case with reference to the provisions of
the Sale of Goods Act, 1930.

By - CA Shantam Gupta
Question 76
Mr. X draws a cheque in favour of Mr. R for payment of his outstanding dues of
5,00,000 on 26/07/2022 with date of 1/08/2022. At the time of issuing cheque, he
was having sufficient balance in his account, but on 29/07/2022 he made payment
for his taxes, now his bank account is left with only ` 4,50,000. So, Mr. X requested
Mr. R not to present the cheque for payment, but he did not accept his request. So,
Mr. X instructed the bank to stop payment of cheque issued for dated 01/08/2022 in
favour of Mr. R Decide, under the provisions of the Negotiable Instruments Act, 1881
whether the said acts of Mr. X constitute an offence?

By - CA Shantam Gupta
Question 77
A and B are partners in M/s Aee Bee & Company. Firm is doing business of trading of plastic
bottles. A is authorised to sell the stock of plastic bottles. It was decided between them that A
should sell the plastic bottles at the minimum price which they have decided and if A sells at a
price less than minimum price, he should first take the permission of B. Due to sudden change
in government policy, the price of plastic bottles were continuously declining. To save the loss
of firm, A sold the stock at lower price. Meanwhile, A tried to contact B but could not do so as B
was on foreign trip. Afterwards when B came, he filed the suit to recover the difference of sale
price and minimum price to the firm. Whether B can do so under the provisions of Indian
Partnership Act, 1932?

By - CA Shantam Gupta
Question 78
Nitesh Gupta is constructing his house. For this purpose, he entered in a contract
with M/s Baba Brick House to supply of 10,000 bricks on 12th August 2023. M/s
Baba Brick House has two Lorries of 5,000 brick capacity. On 12th August 2023,
one of the Lorries was not in working condition so M/s Baba Brick House supplied
only 5,000 bricks and promised Nitesh Gupta to supply rest 5,000 bricks on next
day. Nitesh Gupta wants to cancel the contract, as M/s Baba Brick House did not
supply the bricks as per the contract. M/s Baba Brick House gave the plea that no
fault has been made from its part, hence contract should not be cancelled. In this
situation, whether Nitesh Gupta can avoid the contract under Indian Contract Act,
1872?

By - CA Shantam Gupta
Question 79
Gargi was running a boutique in New Delhi. She has to deliver some cloth to her friend Kiran
who was putting up an exhibition at Mumbai. Gargi delivered the sewing machine and some
cloth to a railway company to be delivered at a place where the exhibition was to be held.
Gargi expected to earn an exceptional profit from the sales made at this exhibition however
she did not bring this fact to the notice of the railway’s authorities. The goods were delivered
at the place after the conclusion of the exhibition. On account of such breach of contract by
railways authorities, can Gargi recover the loss of profits under the Indian Contract Act, 1872?

By - CA Shantam Gupta
Question 80
Sonal went to a Jewellery shop and asked the sales girl to show her diamond bangles with
Ruby stones. The Jeweller told her that we have a lot of designs of diamond bangles but with
red stones if she chooses for herself any special design of diamond bangle with red stones,
they will replace red stones with Ruby stones. But for the Ruby stones they will charge some
extra cost. Sonal selected a beautiful set of designer bangles and paid for them. She also paid
the extra cost of Ruby stones. The Jeweller requested her to come back a week later for
delivery of those bangles. When she came after a week to take delivery of bangles, she noticed
that due to Ruby stones, the design of bangles has been completely disturbed. Now, she wants
to terminate the contract and thus, asked the manager to give her money back, but he denied
for the same. Answer the following questions as per the Sale of Goods Act, 1930.
(i) State with reasons whether Sonal can recover the amount from the Jeweller.
(ii) What would be your answer if Jeweller says that he can change the design, but he will
charge extra cost for the same?
(6 Marks)

By - CA Shantam Gupta
Question 81
X found a wallet in a restaurant. He enquired of all the customers present there
but the true owner could not be found. He handed over the same to the manager
of the restaurant to keep till the true owner is found. After a week he went back to
the restaurant to enquire about the wallet. The manager refused to return it back
to X, saying that it did not belong to him.
In the light of the Indian Contract Act, 1872, can X recover it from the Manager?
(4 Marks)

By - CA Shantam Gupta
Question 82
Rahul, a minor, falsely representing his age, enters into an agreement with a shopkeeper for a
loan amount for purchasing a laptop. He gave his expensive watch as a security and took a loan
of ₹ 40,000. He was very happy to get ₹ 40,000 and quickly went to the market and purchased a
laptop worth ₹ 30,000. He happily spent the rest of the amount with his friends on a pleasure
trip. Later on, Rahul realized that his watch was an expensive watch and he should not have
given like this to the shopkeeper. So, he went back to the shopkeeper and asked for his watch
back. Also, he refused to repay the loan amount. The shopkeeper disagrees to this and files a
case against minor for recovery of the loan amount. Can the shopkeeper succeed in recovering
the loan amount under the Indian Contract Act, 1872?

By - CA Shantam Gupta
Question 83
Jagannath Oils Limited is a public company and having 220 members. Of which 25 members
were employee in the company during the period 1st April 2006 to 28th June 2016. They were
allotted shares in Jagannath Oils Limited first time on 1st July 2007 which were sold by them
on 1 st August 2016. After some time, on 1st December 2016, each of those 25 members
acquired shares in Jagannath Oils Limited which they are holding till date. Now company wants
to convert itself into a private company. State with reasons:
(a) Whether Jagannath Oils Limited is required to reduce the number of members.
(b) Would your answer be different if above 25 members were the employee in Jagannath Oils
Limited for the period from 1st April 2006 to 28th June 2017?

By - CA Shantam Gupta
Question 84
Ankit needs a black pen for his exams. He went to a nearby stationery shop and
told the seller for a black pen. Seller gives him a pen saying that it is a black
pen but it was clearly mentioned on the packet of pen that “Blue Ink Pen”. Ankit
ignore that and takes the pen. After reaching his house, Ankit finds that the pen
is actually a blue pen. Now Ankit wants to return the pen with the words that
the seller has violated the implied
conditions of sale by description. Whether Ankit can do what he wants as per
the Sale of Goods Act, 1930.

By - CA Shantam Gupta
Question 85
Sohan, Rohan and Jay were partners in a firm. The firm is dealer in office furniture. They
have regular dealings with M/s AB and Co. for the supply of furniture for their business. On
30th June 2018, one of the partners, Mr. Jay died in a road accident. The firm has ordered
M/s AB and Co. to supply the furniture for their business on 25 May 2018, when Jay was also
alive. Now Sohan and Rohan continue the business in the firm’s name after Jay’s death. The
firm did not give any notice about Jay’s death to the public or the persons dealing with the
firm. M/s AB and Co. delivered the furniture to the firm on 25 July 2018. The fact about Jay’s
death was known to them at the time of delivery of goods. Afterwards the firm became
insolvent and failed to pay the price of furniture to M/s AB and Co. Now M/s AB and Co .
has filed a case against the firm for recovery of the price of furniture. With reference to the
provisions of Indian Partnership Act, 1932, explain whether Jay’s private estate is also liable
for the price of furniture purchased by the firm?

By - CA Shantam Gupta
Question 86
Certain goods were sold by sample by A to B, who in turn sold the
same goods by sample to C and C by sample sold the goods to D. The
goods were not according to the sample. Therefore, D who found the
deviation of the goods from the sample rejected the goods and gave a
notice to C. C sued B and B sued A. Advise B and C under the Sale of
Goods Act, 1930.

By - CA Shantam Gupta
Question 87
A went to B’s shop and selected some jewellery. He falsely represented himself to be a man of
credit and thereby persuaded B to take the payment by cheque. He further requested him to
hand over the particular type of ring immediately. On the due date, when the seller, B
presented the cheque for payment, the cheque was found to be dishonoured. Before B could
avoid the contract on the ground of fraud by A, he had sold the ring to C. C had taken the ring
in good faith and without any notice of the fact that the goods with A were under a voidable
contract. Discuss if such a sale made by non-owner is valid or not as per the provisions of
Sale of Goods Act, 1930?

By - CA Shantam Gupta
Question 88
Mr. Aseem is a learned advocate. His car was stolen from his house. He gave an
advertisement in newspaper that he will give the reward of ` 10,000 who will give
the information about his car. Mr. Vikram reads the advertisement and on making
some efforts got the stolen car and informed Mr. Aseem. Mr. Aseem found his car
but denied giving reward of ` 10,000 to Mr. Vikram with the words, “An
advertisement in newspaper is just an invitation to make offer and not an offer.
Hence, he is not liable to make the reward.” State with reasons whether under
Indian Contract Act, 1872, Mr. Vikram can claim the reward of ` 10,000.

By - CA Shantam Gupta
Question 89
Chandan was suffering from some disease and was in great pain. He went to Dr.
Jhunjhunwala whose consultation fee was ` 300. The doctor agreed to treat him but on the
condition that Chandan had to sign a promissory note of ` 5000 payable to doctor.
Chandan signed the promissory note and gave it to doctor. On recovering from the disease,
Chandan refused to honour the promissory note. State with reasons, can doctor recover the
amount of promissory note under the provisions of the Indian Contract Act, 1872?

By - CA Shantam Gupta
Question 90
ABC Limited has allotted equity shares with voting rights to XYZ Limited worth ₹15 Crores and
issued Non-Convertible Debentures worth ` 40 Crores during the Financial Year 2019-20. After
that total Paid-up Equity Share Capital of the company is ₹100 Crores and Non-Convertible
Debentures stands at ` 120 Crores.
Define the Meaning of Associate Company and comment on whether ABC Limited and
XYZ Limited would be called Associate Company as per the provisions of the Companies Act,
2013?

By - CA Shantam Gupta
Question 91
Naveen incorporated a “One Person Company” making his sister Navita as the
nominee. Navita is leaving India permanently due to her marriage abroad. Due to
this fact, she is withdrawing her consent of nomination in the said One Person
Company. Taking into considerations the provisions of the Companies Act, 2013
answer the questions given below.
(a) If Navita is leaving India permanently, is it mandatory for her to withdraw her
nomination in the said One Person Company?
(b) If Navita maintained the status of Resident of India after her marriage, then
can she continue her nomination in the said One Person Company?

By - CA Shantam Gupta
Question 92
ABC Limited has allotted equity shares with voting rights to XYZ Limited worth ₹15 Crores and
issued Non-Convertible Debentures worth ` 40 Crores during the Financial Year 2019-20. After
that total Paid-up Equity Share Capital of the company is ₹100 Crores and Non-Convertible
Debentures stands at ` 120 Crores.
Define the Meaning of Associate Company and comment on whether ABC Limited and
XYZ Limited would be called Associate Company as per the provisions of the Companies Act,
2013?

By - CA Shantam Gupta
Question 93
A went to B’s shop and selected some jewellery. He falsely represented himself to be a man of
credit and thereby persuaded B to take the payment by cheque. He further requested him to
hand over the particular type of ring immediately. On the due date, when the seller, B
presented the cheque for payment, the cheque was found to be dishonoured. Before B could
avoid the contract on the ground of fraud by A, he had sold the ring to C. C had taken the ring
in good faith and without any notice of the fact that the goods with A were under a voidable
contract. Discuss if such a sale made by non-owner is valid or not as per the provisions of
Sale of Goods Act, 1930?

By - CA Shantam Gupta
Question 94
A, B and C are partners in a firm. As per terms of the partnership deed, A is entitled to 20
percent of the partnership property and profits. A retires from the firm and dies after 15
days. B and C continue business of the firm without settling accounts. What are the rights of
A’s legal representatives against the firm under the Indian Partnership Act, 1932?

By - CA Shantam Gupta
Question 95
Some of the creditors of Pharmaceutical Appliances Ltd. have complained that the company
was formed by the promoters only to defraud the creditors and circumvent the compliance of
legal provisions of the Companies Act, 2013. In this context they seek your advice as to the
meaning of corporate veil and when the promoters can be made personally liable for the debts
of the company.

By - CA Shantam Gupta
Question 96
For the purpose of making uniform for the employees, Mr. Yadav bought dark blue coloured
cloth from Vivek, but did not disclose to the seller the purpose of said purchase. When uniforms
were prepared and used by the employees, the cloth was found unfit. However, there was
evidence that the cloth was fit for caps, boots and carriage lining. Advise Mr. Yadav whether he
is entitled to have any remedy under the sale of Goods Act, 1930?

By - CA Shantam Gupta
Question 97
A student was induced by his teacher to sell his brand new car to the later at less than the
purchase price to secure more marks in the examination. Accordingly, the car was sold.
However, the father of the student persuaded him to sue his teacher. State whether the
student can sue the teacher?

By - CA Shantam Gupta
Question 98
Sohan induced Suraj to buy his motorcycle saying that it was in a very good condition. After
taking the motorcycle, Suraj complained that there were many defects in the motorcycle.
Sohan proposed to get it repaired and promised to pay 40% cost of repairs. After a few days,
the motorcycle did not work at all. Now Suraj wants to rescind the contract. Decide giving
reasons.

By - CA Shantam Gupta
Question 99
Referring to the provisions of the Sale of Goods Act, 1930, state the circumstances under
which when goods are delivered to the buyer “on approval” or “on sale or return” or other
similar terms, the property therein passes to the buyer.
Ms. Preeti owned a motor car which she handed over to Mr. Joshi on sale or return basis.
After a week, Mr. Joshi pledged the motor car to Mr. Ganesh. Ms. Preeti now claims back the
motor car from Mr. Ganesh. Will she succeed? Referring to the provisions of the Sale of Goods
Act, 1930, decide and examine what recourse is available to Ms. Preeti.

By - CA Shantam Gupta
Question 100
Ajay, Vijay and Sanjay are partners of software business and jointly promises to pay ` 6,00, 000
to Kartik. Over a period of time Vijay became insolvent, but his assets are sufficient to pay
one-fourth of his debts. Sanjay is compelled to pay the whole. Decide whether Sanjay is
required to pay whole amount himself to Kartik in discharging joint promise under the Indian
Contract Act, 1872.

By - CA Shantam Gupta