3rd SEMESTER MBA ASSIGNMENT

Qn. 1- Legal constraints tend to control or limit the discretion of businesses

on the grounds that absolute rights cannot be conferred in the modern society.
Comment.
Ans. 1- Law and business are complementary disciplines. Certain business
practices may amount to monopolistic, restrictive or unfair trade practices. Products
supplied may be defective or there may be deficiencies in the service provided by a
business. Laws are almost human need. No society can exist without legal order. We
need institutions and a framework of rules and regulations to provide concreteness
to our mutual relations. Without laws, there would be anarchy in society. For this
reason, rules of laws are essential to the modern civilised society. It also emphasises
equality before law and equal conformity to law by every person subject to it.
Law and business are complementary disciplines. Almost every aspect of business is
regulated by law. Even the installation of a business unit itself may involve
observance of some legal provisions. For instance, in the case of a company, the
various provisions of the Companies Act, 1956, and other allied laws are to be
complied with for the incorporation of a business. The contracts entered into by
businesses with others may be held to be void or may be against public policy.
Certain business practices may amount to monopolistic, restrictive or unfair trade
practices. Products supplied may be defective or there may be deficiencies in the
service provided by a business. The agreement between manufacturers and their
dealers may defeat the provisions of some law or the other.
Sometimes, the law may require businesses to provide certain facilities to its
employees, even when the contract does not provide for the same. For instance, the
provisions of labour welfare laws impose a legal obligation on employers to provide
certain benefits to their workers.
Thus, the legal environment of a business is a major factor regulating the conduct of
business. Some laws facilitate conducting business while other laws may be
regulatory in nature. All aspects of businesses are controlled by legal rules and
regulations. The various facets of any business need to be carried out according to
the legal framework. If a business indulges in illegal conduct, it has to be awarded
punishment in accordance with the laws of the land. In this manner, laws become the
foundation for regulation and conduct of business.

Qn. 2 What is a contract? What test would you apply to ascertain whether an
agreement is a contract?
Ans. 2. - According to Section 2 (h) of the Indian Contracts Act, 1872, a contract is
an agreement enforceable by law made between at least two parties as per which
rights and obligations are mutually created for both parties. If the party who had
agreed to do something fails to do that, then the other party has a remedy in law.
Example: D Airlines sells a ticket on 1 January to X for the journey from Mumbai to
Bangalore on 10 January. The airline is under an obligation or duty to take X from
Mumbai to Bangalore on 10 January. In case the airline fails to fulfill its promise, X
has the right to sue the airlines for breach of contract.

An agreement is a contract when it is enforceable by a court of Law. An agreement

satisfies this condition, i.e. it becomes enforceable by a Court of Law when it fulfils
the following conditions:-

Offer, Acceptance, and Mutual Consent- Every contract must include a

specific offer and acceptance of that specific offer. Both parties must consent of their
free will. Neither party can be coerced or forced to sign the contract, and both parties
must agree to the same terms. Implied in these three conditions is intent of the
parties to create a binding agreement. If one or both parties are not serious, there's
no contract.
Consideration. There must be something of value exchanged between the
parties. The thing of value may be money or services, but both parties must give
something (otherwise, it is a gift, not a contract).
Competence. Both parties must be of "sound mind" to comprehend the
seriousness of the situation and understand what is required. This definition requires
that neither party be a minor, both must be sober (not under the influence of drugs or
alcohol when signing the contract), and neither can be mentally deficient. If one party
is not competent the contract is not valid and the non-competent party can disavow
(ignore) the contract.
.
Legal Purpose.The contract must be for a legal purpose. It cannot be for
something illegal, like a selling drugs or prostitution.

Qn. 3.- Power of Attorney is considered as an important concept in Business

Law. Explain.
Ans 3. Meaning- Power of attorney is defined by Section 2(21) of the Stamp Act
as including any instrument not chargeable with a fee under the law relating to court
fees for the time being in force, that empowers a specified person to act for and in
the name of the person executing it. It is the Powers of Attorney Act, 1882, that
deals with the subject but does not define it. The person executing the deed is
known as the principal or donor and the one in whose favour it is executed is the
agent, or the power agent or the power of attorney agent.
Power of attorney may be special or general
If the deed conferring power by one to another relates to one single transaction, it is
known as special power of attorney. If the deed conferring power relates to several
transactions it is general power of attorney.
Registration
As a general rule, registration of power of attorney is not necessary. However, if it
authorises the donee to recover the rent of an immovable property of the donor for
the donees benefit, it would require a registration. Also, a power creating a charge in
favour of the donee upon an immovable property referred to therein will need a
registration.
Further, Section 32 (c) of the Registration Act, 1908, requires that where a document
is presented for registration by the agent of a person entitled to present it for
registration, such agent must be duly authorised by power of attorney executed and
authenticated in manner as mentioned in Section 33 of the Act.
Such a power of attorney is to be executed before and authenticated by a registrar or
sub-registrar. Unregistered power executed in a foreign country before a public
notary can be used by the agent for presentation of document for registration. The
power of attorney, however, executed before a public notary in India will not enable
the agent to present any document for registration under the Registration Act, 1908.
Power of attorney is required to be embossed on non-judicial stamp paper. The
amount of stamp duty varies with different types of powers as described in the
Stamp Act and varies in different states of India. Section 4 of the Power of Attorney
Act, 1882, provides that the original deed of power can be deposited in the High
Court in whose jurisdiction the principal resides. Moreover, a certified copy of the
deed can be obtained from the High Court. Such certified copies are equal to
originals and are binding on all.

Qn. 4 -A cheque is a bill of exchange drawn on a banker. Comment

Ans 4- A cheque is the usual method of withdrawing money from an account with a
banker. Savings bank account or current account holders are permitted to operate by
cheques provided, and a certain minimum balance is to be maintained.
The Amendment Act, 2002, has substituted a new section for Section 6. It provides
that a cheque is a bill of exchange drawn on a specified banker and not expressed
to be payable otherwise than on demand and it includes the electronic image of a
truncated cheque and a cheque in the electronic from. A cheque in the electronic
form means a cheque that contains the exact mirror image of a paper cheque, and is
generated, written and signed in a secure system ensuring the minimum safety
standards with the use of digital signature and asymmetric crypto system.
Requisites of a cheque- The requisites of cheques are: Written instrument A cheque must be an instrument in writing. Regarding
the writing materials to be used, the law does not lay down any restrictions.
Therefore, a cheque may be written either with pen, typewriter or may be
printed.
Unconditional order A cheque must contain an unconditional order. It is,
however, not necessary that the word order or its equivalent must be used to
make the document a cheque. Generally, the order to a bank is expressed by
the word pay. If the word please precedes pay the document will not be
regarded as invalid merely on this account.
On a specified banker only A cheque must be drawn on a specified
banker. To avoid any mistake, the name and address of the banker should be
specified.
A certain sum of money The order must be only for the payment of money
and that too must be specified. Thus, orders asking the banker to deliver
securities or certain other things cannot be regarded as cheques.
Payee to be certain For a cheque to be valid, it must be payable to a
certain person. Person should not be understood in a limited sense including
only human beings. The term in fact includes legal persons also.
Payable on demand A cheque to be valid must be payable on demand and
not otherwise. Use of the words on demand or their equivalent is not
necessary. When the drawer asks the banker to pay and does not specify the
time for its payment, the instrument is payable on demand (Section 19).
Dating of cheques The drawer of a cheque is expected to date it before it
leaves his/her hands. A cheque without a date is considered incomplete and is
returned unpaid by banks. A cheque bearing an earlier date is called antedated and the one bearing the later date is called post-dated.

Qn. 5 - Explain the nature and scope of complaints under the Consumer
Protection Act?
Ans. 5 - To provide simple, speedy and inexpensive redressal of consumer
grievances, the Act envisages three-tier quasi-judicial machinery at the district, state
and national levels.
Persons competent to file a complaint (Section 12)
Any of the following people may file a complaint under the Act: The consumer to whom such goods are sold or delivered or agreed to be sold
or delivered or such service provided or agreed to be provided.
Any recognised consumers association namely, any voluntary consumer
association registered under the Companies Act, 1956, or any other law for
the time being in force.
One or more consumers, where there are numerous consumers having the
same interest, with the permission of the District Forum, on behalf of, or for
the benefit of, all consumers so interested.
The Central or the State Government.
Place of complaint - The following are the three instances where a consumer can
lodge a complaint:
If the value of the goods or services and the compensation claimed does not
exceed Rs. 20 lakhs, then the complaint can be filed in the District
Forum within the local limits of whose jurisdiction the opposite party actually
resides or carries on business or has a branch office (Section 11).
If the value of the goods or services and compensation claimed exceeds Rs.
20 lakhs but does not exceed rupees one crore, the complaint can be filed
before the State Commission (Section 17).
If the value of goods or services and the compensation claimed exceeds Rs. 1
crore, the complaint can be filed before the National Commission (Section
21). The National Commission shall also have the jurisdiction to entertain
appeals against the orders of any State Commission (Section 21).
Procedure for filing a complaint
There is no fee for filing a complaint before any of the aforesaid bodies. The
complainants or their authorised agent can present the complaint in person. The
complaint can also be sent by post to the appropriate Forum/ Commission. The
complaint should be addressed to the President of the Forum/Commission. A
complaint should contain the following information:
Name, description and address of the complainant

 Name, description and address of the opposite party or parties, as the case
may be, as far as they can be ascertained
Facts relating to complaint and when and where it arose
Documents, if any, in support of the allegations contained in the complaint
Relief that the complaint is seeking.
Admission of complaint (Section 13)
Procedure in respect of goods where the defect requires no testing or
analysis: The District Forum should send a copy of admitted complaint to the
opposite party mentioned in the complaint within 21 days of admission. He should be
instructed to provide his version of the case within 30 days or may be granted a
further extension of 15 days, at the discretion of the Forum. If the opposite party
disputes the allegations or fails to take any action, the forum can settle the disputes
as specified in the Act.
Procedure in respect of goods where the defect requires analysis or testing:
With respect to goods which need to be tested or analysed for defects, the District
Forum should obtain a sample of goods from the complainant and should take steps
to seal and authenticate the sample and send it to the appropriate laboratory for
testing or analysis. Any disputes with respect to the laboratorys findings must be
countered by written objections from the concerned party. The Forum then provides
reasonable opportunity for both the complainant and the opposite party to be heard.
Power of the district forum [Section 13(4)]
District Forum shall have the same powers as are vested in a civil court under the
Code of Civil Procedure, 1908, while trying a suit in respect of the following matters,
namely: Summoning and enforcing the attendance of any defendant or witness and
examining the witness on oath
Discovery and production of any document or other material object producible
as evidence
Reception of evidence on affidavits
Requisitioning of the concerned analysis or test from the appropriate
laboratory or from any other relevant source
Issuing any commission (i.e., warrant conferring authority) for the examination
of any witness
Any other matter that may be prescribed.

Qn. 6 - Explain the need and types of meetings.

Ans.6 - Need for meetings- A company is an artificial person and therefore, must
act through some human intermediary. The various provisions of law empower
shareholders to do certain things. They are specifically reserved for them to be done
in companys general meetings. Section 291 empowers the Board of Directors to
manage the affairs of the company. In this context, meetings of shareholders and
directors become necessary. The Act has made provisions for following different
types of meetings of shareholders: (i) Statutory Meeting; (ii) Annual General Meeting;
(iii) Extraordinary General Meeting; and (iv) Class Meetings.
Statutory meetings (Section 165)
The most important legal provisions regarding statutory meetings are:
It is required to be held only by a public company having share capital. A
private company or a public company registered without share capital is under
no obligation to hold such a meeting.
It must be held within a period of not less than one month and not more than
six months from the date on which the company is entitled to commence
business.
At least 21 days before the day of meeting, a notice of the meeting is to be
sent to every member stating it to be a Statutory Meeting.
Annual general meeting (AGM) (Sections 166-168)
As the name signifies, this is an annual meeting of a company. The provisions
relating to this meeting are:
Every company, whether public or private, having a share capital or not,
limited or unlimited must hold this meeting.
The meeting must be held in each calendar year and not more than 15
months shall elapse between two meetings. The maximum gap between two
such meetings may be extended by three months by taking permission of the
Registrar, who may so allow for any special reason.
The meeting must be held
o On a day that is not a public holiday
o During business hours
o At the registered office of the company or at some other place within
the city, town or village in which the registered office is situated.
(Section 166 (2)).
Extraordinary Meeting (EGM) Section 169

Clause 47 of Table A (Schedule I) provides that all general meetings other than
AGMs shall be called the EGMs. The legal provisions as regards such meetings are:
EGM is convened for transacting some special or urgent business that may
arise in between two AGMs, for instance, change in the objects or shift of
registered office or alteration of capital.
An EGM may be called by:
o Directors of their own accord
o Directors on requisition
o Requisitionists themselves
o The Tribunal.
Class Meetings - company has two classes of shares equity shares and
preference shares. The class meetings are held for these different classes of
shareholders, as and when their rights are affected.