Full Text Transcript
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FINAL
MAY20\0 GROUP-I PAPER-4
Roll No :..........................
CORPORATlMEVSAND~~;:RETARIAf.
PRACTICS
. 4
Total No. of Questions- 7] [Total No. of Printed Pages-5
Time Allowed-3 Hours Maximum Marks-100
KPM
Answers to questions are to be given only in English except in the 'case of candidates
who have opted for Hindi medium. If a candidate who has not opted for Hindi
me!iium, answ~rs in Hindi, his answers in Hindi will not be valued.
Answer all questions.
Marks
1. (a) MNC Limited whose shares are listed on a recognized Stock Exchange, are 5
delisted by the Stock Exchange. The company seeks your advise on the remedies
available to the company against the order of the Stock Exchange. ,Referring
to the provisions of the Securities Contracts (Regulation) Act, 1956, advise
the company.
(b) Referring' to the provisions of the Securities Contracts (Regulation) 5
Act, 1956 :
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(i) Examine the extent to which the Central Government is empowered to
suspend business of a recognized Stock Exchange.
(ii) The Central Government has granted recognition to a Stock Exchange.
To what conditions may such a recognition be subject to ?
2. (a) The Reserve Bank of India receives a complaint that an authorized person 7
has s~bmitted incorrect statements and information to the Reserve Bank of
India in respect of receipt and utilization of Foreign Exchange. Explain the
powers of the Reserve Bank of Il}dia with regard to inspection of records of
the above authorized person in respect of the above complaint.
Referring to the provisions of Foreign Exchange Management Act, 1999, stat~
the duties of the above authorized person.
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(b) Referringdio.tlie fJDtdvisions of the Foreign Exchange Management Act, 1999,
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state the kind of approval required for the following transactions:
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(i) M requires U.S. $ 5,000 for remittance towards hire charges oftransponders.
(ii) D requires U.S. $ 14,000 per annum for donation to Mr. White in U.S.A.
(iii) P requires U.S. $ 2,000 for paymenfrelated to call back services oftelephones.
(iv) XYZ Limited, a company incorporated in India under the Companies Act,
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1956, wants to withdraw U.S. $ 5,00,000, for short-term credit to its
overseas office situated in Australia.
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3. (a) Examining the provisions of the Securities and Exchange Board of India 8
Act, 1992, state the penalties to which the following shall be subject to :
(i) In case of default committed by a registered stock broker, in payment of
amount due to an investor.
(ii) In case of a registered broker communicating some unpublished prIce
sensitive information toa person on his request.
(iii) What factors shall the adjudicating officer take into account while adjudging
the qu~ntum of penalty under the Act?
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(b) (i) The competition commission has received a complaint f~om a State
G()vernment alleging that X Limited and Y Limited have entered into an
informal agreement, not enforceable at law, to limit or control production,
supply and market, to determine the sale price of their products. Such an
action of these companies has an appreciable effect on competition.
Examining the provisions of the Competition Act, 2002,:
,(A) Decide whether the above agreement has' appreciable effect on
competition.
(B) What factors shall the Competition Commission consider while taking
the above decision.
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(C) What orders can the"Competition Commission pass on completion of
the inquiry?
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(ii) Explain the provisions of the Competition Act, 2002 relating to the
constitution of benches of the commission under the Act.
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4. (a) (i) Explain the rules relating to interpretation of the terms 'Subject to' and - 4
'Not withstanding' as used in the different provisions of the Acts. What
is the effect of the term 'Not withstanding anything contained in this
Act' used in Section 408 of the Companies Act, 1956 empowering the
Central Government to prevent oppression and mismanagement?
(ii) In what way are the following terms considered as 'internal aid' in the 4
interpretation of statutes?
(A) Illustrati°!ls
(B) Explanation.
(b) The Central Government has appointed an Inspector under Sectipn 237 of the 7
Companies Act, 1956, to investigate into the affairs of ABC Limited. It is
alleged by the company that during the course o~ investigation, Mr. Z, an
Assistant Company Secretary has revealed' certain confidential information
relating to the affairs of the company. The Man~ging Director of the company,
therefore, decided to dispense with the services of Mr. Z.
The Managing Director of the company seeks your advise whether the proposed
action of the company is in order under the provisions of the Companies
Act, 1956.
5. (a) On 24th January, 2010, the Board of Directors BUI Limited appointed Mr. A 8
as the company's Sole Selling Agent for a period of 5 years. At the first
general meeting of the co"mpany, held after the Board meeting, on ~pril 10,
2010, the above appointment was disapproved. Referring to the provisions of
the Companies Act, 1956 :
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(i) State the date from which the above appointmen.t comes to an end.
(ii) What would be your answer in case a condition in the Ftboveappo~ntment
that "the appointment must be made by the company i:t;lGeneral Meeting"
was not attached thereto?
(b) The profits of MJR Company Limited for the financial year 2009-2010 fell 7
considerably due to recession. The Board of Directors ofthe company, therefore,
bonafide did not recommend any dividend for the year. At the Annual General
Meeting of the company, a group of shareholders/members objected to the
Board's decision and wanted the Board to make recommendation for dividend.'
On refusal by the Board, the members, who feel oppressed by the Board's
decision to skip the dividend, move to the Company Law Board/Tribunal and
co,mplain against the Board on the ground of oppression and mismanagement---
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Examining the provisions of the Companies Act, 1956, decide:
(1) Whether the members contention shall be tenable?
(2) Whether the act of Board of Directors not to recommend any dividend
shall amount to oppression and mismanagement?
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6. (a) Prince Ltd., desires to appoint an additional director on its board of directors.
The Articles of the company confer upon the board to exercise the power to
appoint such a director. As such M is appointed as an additional director. In
the light of the provisions of the Companies Act, 1956, examine:
(i) Whether M can continue as director. if the annual general meeting of the
COmpany is not held within the stipulated period and is adjourned to a
later date?
(ii) Can the power of appointing additional director be exercised by the Annual
General Meeting?
(iii) As the Secretary of the company what checks would you make after M is
appointed as an additional director? .
(b) DVJ Limited decide to appoint Mr. A, as its Managing Director for a period 7
of 5 y~ars with effect from 1st May, 2010. A, fulfils all 'the conditions as
specified in Part I and Part II of Schedule XIII of the Companies Act, 1956.
The terms of appointment are as under:
(i) Salary Rs. 1 lac per month.
(ii) Commission, as may be decided by the Board 'ofDirectors of the Company.
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(iii) Perquisites:
Free Housing
Medical reimbursement upto Rs. 10,000 per month.
Leave Travel concession for the family.
Club Membership Fee.
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Personal Accident Insurance Rs. 10 lacs.
Gratuity; and
Provident Fund as per company's policy.
You, being the Secretary of the company, are required to draft a resolution to
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give effect to the above, assuming that A is already the Managing Director of
a public limited company. . '
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7. (a) ADJ Company Limited has 10 directors on its board. Two of the directors 8
have retired by rotation at an Annual General Meeting. The place of retiring
directors is not so filled up and the meeting has also not expressly resolved
'not to fill the vacancy'. Since the AGM could not complete its business, it is
adjourned to a later date. At this adjourned meeting also the place of retiring
directors could not be filled up, and the meeting has also not expressly resolved
'not to fili the vacancy'.
Referring to the provisions of the Companies Act, 1956, decide:
(i) Whether in such a situation the retiring directors shall be deemed to
have been re-appointed at the adjourned meeting?
(ii) What will be your answer in case at the adjourned meeting, the resolutions
for re-appointment of these directors were lost?
(iii) Whether such directors can continue in case the directors do not call the
Annual General Meeting?
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(b) The Official Liquidator of a public company in liquidation instituted misfeasance
proceedings against the Managing Director ofthe company. During the pendency
of the proceedings in the High Court, the Managing Director died. The Official
Liquidator has applied to the court that the legal representatives ofthe Managing
Director be impleaded in the place of the deceased Managing Director and the
proceedings be continued. . .
Examining the provisions of the. Companies Act, 1956 decide whether the
contention of the Official Liquidator be tenable.
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