Wednesday, January 28, 2009

Payment of Gratuity_Practical Problems_2

Rajesh was occupying service quarters of the company. After his retirement, he did not vacate the quarters. In retaliation, the company withheld the gratuity payable to him. Is the action of the company justified ?

Industrial Dispute Act_Practical Problems_3

Sameer died suddenly while working in a factory. The workmen refused to resume work to express solidarity with the deceased worker. Does the action of the workmen amount to strike under the Industrial Disputes Act, 1947 ?

Industrial Dispute Act_Practical Problems_2

Prem and Qureshi established a legal consultancy firm. They employed three law graduates, a stenographer and a typist to assist the firm. After five years, the services of the stenographer were terminated without assigning any reason. He raised a dispute before the Labour Court asking for reinstatement or retrenchment compensation as contemplated by the Industrial Disputes Act, 1947. Will he succeed ?

Monday, January 26, 2009

Right to Information Act_15

What are the penalty provisions?

Every PIO will be liable for fine of Rs. 250 per day, up to a maximum of Rs. 25,000/-, for -
i. not accepting an application;
ii. delaying information release without reasonable cause;
iii. malafidely denying information;
iv. knowingly giving incomplete, incorrect, misleading information;
v. destroying information that has been requested and
vi. obstructing furnishing of information in any manner.
The Information Commission (IC) at the Centre and the State levels will have the power to impose this penalty. The Information Commission can also recommend disciplinary action for violation of the law against an erring PIO. (S.20)

Right to Information Act_14

Who are the Appellate Authorities?
First Appeal: First appeal to the officer senior in rank to the PIO in the concerned Public Authority within 30 days from the expiry of the prescribed time limit or from the receipt of the decision (delay may be condoned by the Appellate Authority if sufficient cause is shown).
Second Appeal: Second appeal to the Central Information Commission or the State Information Commission as the case may be, within 90 days of the date on which the decision was given or should have been made by the First Appellate Authority. (delay may be condoned by the Commission if sufficient cause is shown).
Third Party appeal against PIO's decision must be filed within 30 days before first Appellate Authority; and, within 90 days of the decision on the first appeal, before the appropriate Information Commission which is the second appellate authority.
Burden of proving that denial of Information was justified lies with the PIO.
First Appeal shall be disposed of within 30 days from the date of its receipt. Period extendable by 15 days if necessary. (S.19)

Right to Information Act_13

What could be the ground for rejection?
If it is covered by exemption from disclosure. (S.8)
If it infringes copyright of any person other than the State. (S.9)

Right to Information Act_12

What is the time limit to get the information?
30 days from the date of application
48 hours for information concerning the life and liberty of a person
5 days shall be added to the above response time, in case the application for information is given to Assistant Public Information Officer.
If the interests of a third party are involved then time limit will be 40 days (maximum period + time given to the party to make representation).
Failure to provide information within the specified period is a deemed refusal.

Right to Information Act_11

What is the Application Procedure for requesting information?

Apply in writing or through electronic means in English or Hindi or in the official language of the area, to the PIO, specifying the particulars of the information sought for.
Reason for seeking information are not required to be given;
Pay fees as may be prescribed (if not belonging to the below poverty line category).

Right to Information Act_10

What are the duties of a PIO?
PIO shall deal with requests from persons seeking information and where the request cannot be made in writing, to render reasonable assistance to the person to reduce the same in writing.
If the information requested for is held by or its subject matter is closely connected with the function of another public authority, the PIO shall transfer, within 5 days, the request to that other public authority and inform the applicant immediately.
PIO may seek the assistance of any other officer for the proper discharge of his/her duties.
PIO, on receipt of a request, shall as expeditiously as possible, and in any case within 30 days of the receipt of the request, either provide the information on payment of such fee as may be prescribed or reject the request for any of the reasons specified in S.8 or S.9.
Where the information requested for concerns the life or liberty of a person, the same shall be provided within forty-eight hours of the receipt of the request.
If the PIO fails to give decision on the request within the period specified, he shall be deemed to have refused the request.
Where a request has been rejected, the PIO shall communicate to the requester - (i) the reasons for such rejection, (ii) the period within which an appeal against such rejection may be preferred, and (iii) the particulars of the Appellate Authority.
PIO shall provide information in the form in which it is sought unless it would disproportionately divert the resources of the Public Authority or would be detrimental to the safety or preservation of the record in question.
If allowing partial access, the PIO shall give a notice to the applicant, informing:

a. that only part of the record requested, after severance of the record containing information which is exempt from disclosure, is being provided;
b. the reasons for the decision, including any findings on any material question of fact, referring to the material on which those findings were based;
c. the name and designation of the person giving the decision;
d. the details of the fees calculated by him or her and the amount of fee which the applicant is required to deposit; and
e. his or her rights with respect to review of the decision regarding non-disclosure of part of the information, the amount of fee charged or the form of access provided.
· If information sought has been supplied by third party or is treated as confidential by that third party, the PIO shall give a written notice to the third party within 5 days from the receipt of the request and take its representation into consideration.
· Third party must be given a chance to make a representation before the PIO within 10 days from the date of receipt of such notice.

Right to Information Act_9

Who are Public Information Officers (PIOs)?

PIOs are officers designated by the public authorities in all administrative units or offices under it to provide information to the citizens requesting for information under the Act. Any officer, whose assistance has been sought by the PIO for the proper discharge of his or her duties, shall render all assistance and for the purpose of contraventions of the provisions of this Act, such other officer shall be treated as a PIO

Right to Information Act_8

Who are 'Third Parties'?

A third party means a person other than the citizen making a request for information and includes a public authority. Third parties have a right to be heard in respect of applications and appeals dealing with information submitted by them to the Government in confidence.

Right to Information Act_7

Who is excluded?

Central Intelligence and Security agencies specified in the Second Schedule like IB, R&AW, Directorate of Revenue Intelligence, Central Economic Intelligence Bureau, Directorate of Enforcement, Narcotics Control Bureau, Aviation Research Centre, Special Frontier Force, BSF, CRPF, ITBP, CISF, NSG, Assam Rifles, Special Service Bureau, Special Branch (CID), Andaman and Nicobar, The Crime Branch-CID-CB, Dadra and Nagar Haveli and Special Branch, Lakshadweep Police. Agencies specified by the State Governments through a Notification will also be excluded. The exclusion, however, is not absolute and these organizations have an obligation to provide information pertaining to allegations of corruption and human rights violations. Further, information relating to allegations of human rights valuations could be given but only with the approval of the Central or State Information Commission, as the case may be. [S.24)]

Right to Information Act_6

What does a "public authority" mean?
It means any authority or body or institution of self-government established or constituted: [S.2(h)]
· by or under the Constitution;
· by any other law made by Parliament;
· by any other law made by State Legislature;
· by notification issued or order made by the appropriate Government.and includes any-
a. body owned, controlled or substantially financed
b. non-Government organization substantially financed directly or indirectly by the appropriate Government.

Right to Information Act_5

Is partial disclosure allowed?
Only that part of the record which does not contain any information which is exempt from disclosure and which can reasonably be severed from any part that contains exempt information, may be provided. [S.10]

Right to Information Act_4

What is not open to disclosure?
information, disclosure of which would prejudicially affect the sovereignty and integrity of India, the security, strategic, scientific or economic interests of the State, relation with foreign State or lead to incitement of an offence
information which has been expressly forbidden to be published by any court of law or tribunal or the disclosure of which may constitute contempt of court;
information, the disclosure of which would cause a breach of privilege of Parliament or the State Legislature;
information including commercial confidence, trade secrets or intellectual property, the disclosure of which would harm the competitive position of a third party, unless the competent authority is satisfied that larger public interest warrants the disclosure of such information;
information available to a person in his fiduciary relationship, unless the competent authority is satisfied that the larger public interest warrants the disclosure of such information;
information received in confidence from foreign Government;
information, the disclosure of which would endanger the life or physical safety of any person or identify the source of information or assistance given in confidence for law enforcement or security purposes;
information which would impede the process of investigation or apprehension or prosecution of offenders;
cabinet papers including records of deliberations of the Council of Ministers, Secretaries and other officers;
information which relates to personal information the disclosure of which has no relationship to any public activity or interest, or which would cause unwarranted invasion of the privacy of the individual;
Notwithstanding any of the exemptions listed above, a public authority may allow access to information, if public interest in disclosure outweighs the harm to the protected interests.

Right to Information Act_3

What are the obligations of public authority?
It shall publish within one hundred and twenty days of the enactment:-
i. the particulars of its organization, functions and duties;
ii. the powers and duties of its officers and employees;
iii. the procedure followed in its decision making process, including channels of supervision and accountability;
iv. the norms set by it for the discharge of its functions;
v. the rules, regulations, instructions, manuals and records used by its employees for discharging its functions;
vi. a statement of the categories of the documents held by it or under its control;
vii. the particulars of any arrangement that exists for consultation with, or representation by the members of the public, in relation to the formulation of policy or implementation thereof;
viii. a statement of the boards, councils, committees and other bodies consisting of two or more persons constituted by it. Additionally, information as to whether the meetings of these are open to the public, or the minutes' of such meetings are accessible to the public;
ix. a directory of its officers and employees;
x. the monthly remuneration received by each of its officers and employees, including the system of compensation as provided in its regulations;
xi. the budget allocated to each of its agency, indicating the particulars of all plans, proposed expenditures and reports on disbursements made;
xii. the manner of execution of subsidy programmes, including the amounts allocated and the details and beneficiaries of such programmes;
xiii. particulars of recipients of concessions, permits or authorizations granted by it;
xiv. details of the information available to, or held by it, reduced in an electronic form;
xv. the particulars of facilities available to citizens for obtaining information, including the working hours of a library or reading room, if maintained for public use;
xvi. the names, designations and other particulars of the Public Information Officers.[S.4(1)(b)]

Right to Information Act_2

What does Right to Information mean?
It includes the right to -
inspect works, documents, records.
take notes, extracts or certified copies of documents or records.
take certified samples of material.
obtain information in form of printouts, diskettes, floppies, tapes, video cassettes or in any other electronic mode or through printouts.[S.2(j)]

Right to Information Act_1

What does information mean?
Information means any material in any form including records, documents, memos, e-mails, opinions, advices, press releases, circulars, orders, logbooks, contracts, reports, papers, samples, models, data material held in any electronic form and information relating to any private body which can be accessed by a public authority under any other law for the time being in force but does not include "file notings" [S.2(f)].

Saturday, January 24, 2009

Consumer Protection Act_Practical Problems_14

A newly-wedded couple Anand and his wife Anjali had gone to Kathmandu for their honeymoon. They could not return in time to attend the reception as the airline authorities failed to inform them about cancellation of their return flight. They lodged a complaint with the consumers’ forum for grant of compensation. However, the airlines authorities pleaded that the mistake was on the part of their agent whom the airlines authorities had informed about the cancellation of the flight. Will they succeed in getting compensation ? Give reasons in support of your answer.

Consumer Protection Act_Practical Problems_13

Chhote Lal, a customer of a bank, while waiting to deposit cash of Rs.45,000 at the bank counter was robbed of his bag containing cash by a person who confronted him with a revolver. The bank securityguard did not catch the person even when he was alerted by Chhote Lal. Chhote Lal filed a complaint with the District Forum against the bank for deficiency in service and sought relief. Will he succeed ?

FEMA_Practical Problems_11

With reference to the relevant provisions of the Foreign Exchange Management Act, 1999 and the Foreign Exchange Management Regulations, 2000, advise on
the following :
(i) Crescent Ltd. is interested in issuing shares under the Employees Stock Option Scheme to persons resident outside India.
(ii) Mozart Ltd., an Indian company, after winning the bid, intends to approach the authorised dealer for remittances towards acquisition of the foreign company.
(iii) A mutual fund, registered in India, is interested to invest in the rated bonds of a listed overseas company which has shareholding of 5% in a listed Indian company.

Competition Act_Practical Problems_3

A newspaper offered insurance cover to its existing and future subscribers without receiving any extra amount for newspaper or any premium.

Competition Act_Practical Problems_2

An advertisement in a leading newspaper stated that TV sets are being manufactured by the company in collaboration with a foreign company even though the government had not permitted any foreign collaboration for TV manufacture. Is it unfair trade practice ?

Competition Act_Practical Problems_1

A company engaged in the business of manufacture of electronic goods withholds supplies to one of its dealers for reason of delayed payments by the dealer for the goods supplied earlier. Is it unfair trade practice ?

Friday, January 23, 2009

Companies Act_Practical Problems_50

Lalit, a director of Rich Look Ltd., is seeking re-election at the company’s AGM. While the chairman puts the resolution for Lalit’s re-appointment, which has been duly proposed and seconded, to vote, two shareholders point out to the chairman that Lalit is disqualified to act as director since Padma Ltd., of which Lalit is also a director, has failed to repay its depositors for the past 3 years and the default continues.

Companies Act_Practical Problems_49

The minutes of the 6th AGM of Broad Band Ltd. are ready; however, the company’s chairman Brij is no more, he passed away 3 days after the AGM. Advise

Companies Act_Practical Problems_48

At the AGM of Azad Ltd., Raghav, the managing director, is to be re-appointed for a fresh term of 5 years; however, the managing director is not able to make it to the AGM as his flight is cancelled.

Companies Act_Practical Problems_47

A 100% subsidiary of a public company, having a paid-up capital of Rs.10 crore, is unable to get a qualified Company Secretary; however, the managing director of the subsidiary is a qualified Company Secretary and a fellow member of the Institute of Company Secretaries of India.

Monday, January 19, 2009

Companies Act_Practical Problems_46

Balance sheet of DEF Ltd. as at 31st March, 2005 shows among others the following information :
Paid-up share capital 20 crore
Reserves and surplus 35 crore
Reserve for redemption of debentures 15 crore
Capital reserves 5 crore
The company has already given following loans/stood guarantees for loans to other companies :
— Loan to GHI Ltd. : Rs.12 crore.
— Guarantee given on behalf of JKL Ltd. : Rs.11 crore.
MNO Ltd. has approached DEF Ltd. for loan of Rs.15 crore. Advise the management whether DEF Ltd. can give the loan of Rs.15 crore to MNO Ltd. and if yes, set out the procedure therefor.

Companies Act_Practical Problems_45

Give your opinion whether the Registrar of Companies can take balance sheet and profit and loss account on record even if it is not laid before annual general meeting or placed before the extra-ordinary general meeting.

Tuesday, January 13, 2009

Practical Problems_Factories Act_1

A licensed salt producer engaged workmen in open land in which work was done to convert sea water into crystals of salt. Whether the workmen working in open land are employed in the premises of the factory?

Consumer Protection Act_Practical Problems_12

Prudent Investments Ltd. was celebrating silver jubilee of its operations and in this connection sent invitations by post to 250 top businessmen for a special dinner at a 5-Star Hotel. Due to delay in delivery and/or non-delivery of invitation cards by the postal authorities, only 100 invitees attended the dinner. Advise the company whether it can make a complaint for compensation to the Consumer Disputes Redressal Forum against the postal authorities for deficiency in service

Consumer Protection Act_Practical Problems_11

Good Health Ltd., an Indian insurance company, did not settle a medical claim of Rs.2 lakh of Mohan towards open heart surgery on the ground that the assured (Mohan) had not disclosed material facts, viz., hypertension and angina, at the time of submitting his proposal form. Mohan pleaded with the insurance company that there was no suppression of material facts and it is the insurer who has to prove material suppression; but did not succeed in his repeated pleas. Will Mohan succeed if he makes a complaint for the non-payment of medical claim under the Consumer Protection Act, 1986? Give reasons in support of your answer.

Practical problems_Copy right Act_1

Do the following acts constitute infringement of copyright? Give brief reasons in support of your answer:

(i) Reproduction of a musical work by a teacher in the course of instructions to students.
(ii) Reproduction for research of an unpublished work kept in a public library.
(iii) Making a dozen copies of a book borrowed from a library when such book is available in the market.
(iv) Reproduction in a periodical of a write-up by an expert on a social subject of which the author has expressly retained his copyright.
(v) Making copies of a computer programme from a floppy disc bought from the market and using it for office work.

FEMA_Practical problems_10

With reference to the relevant provisions of the Foreign Exchange Management Act, 1999, advise on the following:

(i) Mehta Chemicals Ltd., a listed Indian company, is interested in investing in the shares of an overseas company.
(ii) Jai Capital Ltd. desires to export plant and machinery from India towards equity contribution in a joint-venture in Trinidad and Tobago.
(iii) Arora & Co., a proprietary concern in India, wants to apply to authorities concerned for permission to accept shares of a company outside India in lieu of fees due to it for professional services rendered to the said company.
(iv) Jolly Ltd. wants to borrow a term loan of £ 5 million @ 6% per annum from its foreign collaborators to be repaid in 7 years.

Friday, January 09, 2009

Companies Act_Practical Problems_44

The position of profitability and reserve of a company is as follows:
Profit during a year 20.0 lakh
Depreciation 7.5 lakh
Depreciation for previous year not provided 8.0 lakh
General reserve 10.0 lakh
Investment allowance reserve 5.0 lakh
Paid-up share capital 50.0 lakh Determine the maximum amount of dividend the company may declare.

Monday, January 05, 2009

Companies Act_Practical Problems_43

Following information is available from the audited balance sheet of Short Cut Ltd. as at 31st March, 2004 :

Paid-up share capital Rs. 500 lakh
Share premium account Rs. 100 lakh
General reserves Rs. 800 lakh
Secured loans Rs. 500 lakh
Unsecured loans Rs. 400 lakh
The company plans to buy-back its shares. Compute the maximum limit upto which the company can buy-back its shares.

Companies Act_Practical Problems_42

Balance sheet of ABC Ltd. as at 31st March, 2004 shows the following liabilities :
Paid-up capital Rs. 10 crore.
Reserves and surplus Rs. 20 crore.
Reserves for redemption of debentures Rs. 5 crore.
The company has already advanced to the following companies :
XYZ Ltd. — Rs. 6 crore.
MNO Ltd. — Rs. 2 crore.
ABC Ltd. has given corporate guarantee of Rs. 5 crore to STU Ltd.
PQR Ltd. has approached ABC Ltd. for inter-corporate loan of Rs. 8 crore.
As the Company Secretary of ABC Ltd., advise the management on the limits of making loans and inter-corporate investments.

Companies Act_Practical Problems_41

Clover Ltd. has received a notice from its shareholders holding in all 8% of the paid-up capital for the removal of one of the directors. Advise the company.

Companies Act_Practical Problems_40

Abhijeet is a shareholder of Kutumb Ltd. On receipt of notice of an annual general meeting to be held on 28th September, 2004, Abhijeet issued a proxy in favour of Baljeet on 25th September, 2004. Abhijeet again issued another proxy in favour of Charanjeet on 26th September, 2004. Both Baljeet and Charanjeet attended the meeting on 28th September, 2004. Decide who is entitled to vote on a poll.

Saturday, January 03, 2009

Practical Problems_Sales of goods Act_3

Asha delivers some furniture to Bipasha on ‘sale or return’ basis. Bipasha then delivers the same furniture to Chitra, and Chitra further delivers it to Divya on similar basis. Before Divya could give her acceptance, furniture is suddenly destroyed by fire. Who is to bear the loss of furniture ? Give reasons.

Practical Problems_Partnership Act_9

Ajit, Baljit and Charanjit are partners in a firm carrying on money lending business. Daljit, a customer, deposits his jewellery with the firm for safe custody. Ajit and Baljit sell this jewellery and misappropriate the money. Charanjit, being a sleeping partner, has no knowledge about this sale. Now, Daljit files a suit against all the three partners. Can Charanjit be held liable ? Give reasons.

Practical Problems_Sales of Goods Act_2

Ajoy finds a mobile phone lying on a table in a Coffee House. He hands over the mobile phone to Bijoy, the manager of the Coffee House, so that the true owner can claim it back. However, no one claims the mobile phone. After sometime, Ajoy goes to Bijoy, the manager, and requests him to return the mobile phone to him. On Bijoy’s refusal, Ajoy files a suit against him for recovery of the mobile phone. Will Ajoy succeed ? Give reasons.

Friday, January 02, 2009

Practical Problems_Contract Act_92

Ajay found a defective video camera lying in a park. He pledged it with Vijay for Rs.3,000. Mohan, the real owner, came to know about it. Mohan sued Vijay to recover his camera. Vijay had incurred Rs.500 on repair to make the camera
operational. Can Mohan recover his camera ?

NI Act_Practical Problems_57

On a bill of exchange for Rs.10,000 Sumit’s acceptance to the bill is forged. Amit takes the bill from his customer in good faith and for consideration before the bill becomes payable. State with reasons whether Amit can receive the amount of the bill from Sumit.

Practical Problems_Partnership Act_8

A, B, C, D and E are partners in a firm. They decided to dissolve the firm from 1st January, 2006 but failed to give a public notice of its dissolution and continued the business of the firm even after that date. D died on 5th January, 2006 and E was declared insolvent on 10th January, 2006. On 11th January, 2006, A borrowed in the firm’s name Rs.20,000 from R who was ignorant of the dissolution. Discuss the liability of partners.

Thursday, January 01, 2009

Companies Act_Practical Problems_39

Mr. X was appointed as the Managing Director of ABC Ltd. for a period of 5 years w.e.f, 1st January, 2006. Since his work was found unsatisfactory. His services were terminated from 15th August, 2007 by paying compensation for the loss of office as provided in the agreement entered into by the company. Later, the company discovered that during his tenure of office Mr. X was guilty of many corrupt practices and that he should have been removed without payment of compensation. Advise the company whether the services of the Managing Director can be terminated without payment of compensation as provided in the agreement and whether the company can recover the amount already paid to Mr. X filing a suit.

Companies Act_Practical Problems_38

M/s ABC Ltd. had power under its memorandum to sell its undertaking to another company having similar objects. The Articles of the company contained a provision by which directors were empowered to sell or otherwise deal with the property of the company. The Shareholders passed an ordinary resolution for the sale of its assets on certain terms and required the directors to carry out the sale. The Directors refused to comply with the wishes of the shareholders where upon it was contended on behalf of the shareholders that they were the principal and directors being their agents were bound to give effect to their decision. Based on the above facts, decide the following issues, having regard to the provisions of the Companies Act, 1956 and case laws.
(i) Whether the contention of shareholders against the non-compliance of their wishes by the directors is tenable.
(ii) Can shareholders usurp the powers which by the articles are vested in the directors by passing a resolution in the general meeting?