Nirma University

Institute of Law

Semester End Examination (lR/RPR), May - 2014

Semester:IV
B.A./ B.Com./ B.B.A.LL.B.{Hons.),
(SpecificConttacts)
II
2BL404 Contract II / 2BL4l1 Contract

Roll/Exam No.

Supervisor'sInitial with
date
Max. Marks : 100

Time: 3 Hours
Instructlons:

1. Attempt all questions.

2. Figures to ri8ht indicate full marks
3. Use sectionwise separateanswer book
4. w te answe6 to the point and rclevant to the issue'

SECTION I
Q.1

ln June, 2013 Republlc of Attnenlo and Georgla enter in

'Armenlan - Geotglan Treaty oflnvstment a!!d CoEmerce" The
Treaty inter a-lia, obligated both the nations to secure favourable legal
and commercial environment for the foreign investors investing in
their domestic markets. Treaty enunciated bundle of rights which
each individual foreign investor would be entitle to enjoy. Along witi,
it also highlighted tl,e duties which the signatory nations has to
observetowards the foreign investors
In pursuaice of the aJoresaid heaty, Mr. Matletr Malasav, a
Georgian oil magnate and industrialist invested in Atmeulan Fet
The investment is done through a Contract
EaBt Oil Co6pany.
signed between Mr Marlen a.'Id the Board of Directors of oil
Company.
The contract provided for vaJious terms a'rld conditions and through
Clause it was linked up with The Treaty
an UEbtella
Subsequently, because of certain cohmercial constrains the
contract was breached by t]le Oil Company
Mr Marlen Manasav, being alr influential industrialist, persuaded the
Georgian Government to take actions against Alrnenian Government
under international treaty law, as the violation of the conbact has led
to the violation of the treaty obligations.
In reference to the legal implication of the Umbreua Clause,
ANSVTERANY TWO of t}Ie following questions:a. what is the relevance and lega.limplicatlon of Umbrella Clause
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[20]

(SPECIFIC
CONTRACT-II
2BL4l4l28l404 CONTRACT-II
CONTRACTSy
as the distinctive provision under a contract?
b . Wherher t}|e violation ofthe Contract, which is linked up with
t-lle treaty through umbrella clause, will lead to the violation of
treaty itsen
Whether Georgian Government has a right of action against
the Armenian counterpart under international law relating to
breach of treaty?
Q.2

On 1"tFebruary 2014, Mr. Sen Gupta draw a cheque in favour ofMr.

R K Jatn for Rs. 50,000, drarvee bank being Corporauolr Bank.
The cheque was presented by payee to Corporation Bank for
encashment on 1"tApril2014. The chequewas however,dishonoured
for the reason of insufficiencv of funds in the account of Mr. Sen
Gupta.
Aggrievedby the non-receipt of the money, on 12h April 2014, Mr. R
KJain approached the court oflaw pleading tie court to penaliseMr.
Sen Gupta for offence of dishonour of Cheque.

[5]

In the light of the above facts, decide whether Mr. gen Gupta could
be penalised under Chapter XVII of Negotlable lnstrument Act,
1881, Further, carr he successfullytake the plea of absenceof mens
rea as the defence in prcsecution?

Q.3

Mr. Fredrlck Fromm is the owner ofa small scale industry, which is
in deep financial crisis. On 19$ Aug. 2013 Mr. Fredrick Frcmm, with
the intention to revive his industry, took a loan of Rs. 2l la.khsfrom
Southern Industdal FlDanclera hrt Ltd (SIF| As the security for
the payment of the debt, Mr. F edrick Fromm pledged through
constructive delivery two heaw machineries worth Rs. 25 lakhs with
SIF.
Subsequently, the business of the Mr. Fredrick Fromm was declared
lnaolvent and order was passed by the court authorising the official
liquidator to seize all his property. In pursuance of the order, along
with other property the heavy machineries which were pledged with
the SIF were also seized.
Aggrieved by the order, SIF Pvt Ltd. approach the court of law,
challenging the legality of the seizure order in respect t}Ie pledged
machineiies on the ground that it is in violatiod of its Right Of
Retalner under Sec,l73/t74 of Indian Conhact Act,1872. Decide,
substantiating your alswer with judicial pronouncement ard logical
reasoning.

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[15]

(SPECtf
2BL1l4rBrl04 CONTRACT-U
tC CONTRACTS)/
CONTRAC]SESTION II
Q,4

Mr, Joseph Corror is the owner of small tratsportatiolr enterpdse

based in Munnar Kerala. In March, 2014, he hired the servicesof tie
Mr. Satrruel. Under the terms of the contract, which is tided as the
SERVICE CONTRACI, Mr. Samuel was given responsibility as to the
safekeeping, seculity and management of the enterprise.
H.e was given authority to take certain limited managerial decisions
regarding the conduct of the Uansportation business.
Remuneratlon ertltleEent of Mr. Samuel was Rs.4, 000 per month
plus 1.5 70 of the monthly profit of tlle enterprise.
The terms ofthe contract provided that 1.5 % profit sharing shall be ln
lleu of the loan which Mr. Sahuel had once granted to Mr. Joseph
Connor. And it was agreed that through the sharing of the profit t]le
part of the loan shall be paid back.
Considering above h5ryotheticalfacts, answer the following:a. Whether the relatloq subslstlng between Mr. Joseph Connor
alld Mr. Samuel could be termed as AGENCY within the
meaning of Sec. 182 of Indian Conbact Act, 1872 and judicial
pronouncement tltereof?
b. Whethe! Mr, Joseph Connor can unllate&lly tetmlnato o!
rcvoko the authority gfa'Ited to Mr. Samuel under the
SERVICE CONTRACT?

[20]

Q.5

Where possessionofpersonal property ofarother is acquired and held

under circumstances where the recipient, on principles ofjustice and
equity, ought to keep it saJely afld restore it to the o\'ener,...law
irrespective of meeting of minds...imposes on the recipieut the duties
a-nd obligation of a Bailee'. In the light statement briefly discuss
various duties which law impose on the Bailee of the soods under the
Contract of Bailment?

I1S]

Q.6
A.
B.
C.
D.
E.
F.

Write short notes on ANY THREE of tie folowing:Mutual Agency.

Essentia-l leatures of a partnership firm,
Doctrine of Strict Compliance.
Creation ofAgency.
Dillerence between bill of exchange and Cheque.
Offences by Company under Sec.l41 of Negotiable Instrument
Act,1881

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