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Business Law Solved Question Paper 2021
Gauhati University B.Com 3rd Sem Hons.
Gauhati University Business Law Solved Question paper 2021 GU
Business Laws Solved Question Paper 2021
Gauhati University BCOM 3rd Sem FYUGP
Paper: COM-HC-2026 (Business Laws)
COMMERCE (Honours) Full Marks: 80
Figures in the margin indicate full mark for the Questions
1. Choose the correct answer: 1x10=10
a) An expression of interest to buy a showcase item from a shopkeeper is a / an
i. Offer.
ii. Request.
iii. Choice.
iv. Acceptance.
Ans: i. Offer
b) Who among the following appoints a sub-agent?
i. Principal.
ii. Third person.
iii. Agent.
iv. Both (i) and (iii).
Ans: iii. Agent.
c) In a contract of sale, if no price has been fixed by the parties, the buyer is required to pay
i. Lower market price.
ii. Average price of the year.
iii. Maximum market price.
iv. Reasonable price.
Ans: iv. Reasonable price.
d) The provisions regarding maximum number of members in a partnership are given in
i. The Partnership Act.
ii. The Contract Act.
iii. The Companies Act.
iv. The Societies Registration Act.
Ans: iii. The Companies Act.
e) The Right to Information Act, 2005 came into force on
i. 12th March, 2005.
ii. 12th July, 2005.
iii. 12th October, 2005.
iv. 12th November, 2005.
Ans: iii. 12th October, 2005.
f) The Indian Contract Act came into effect from 1st September, 1872. The statement is
i. Correct.
ii. Incorrect.
Ans: i. Correct.
g) An agent can work for more than one principal. The statement is
i. Correct.
ii. Incorrect.
Ans: i. Correct.
h) Sale is not an executed contract. The statement is
i. Correct.
ii. Incorrect.
Ans: ii. Incorrect.
i) A contract of partnership should always be in writing. The statement is
i. Correct.
ii. Incorrect.
Ans: i. Correct.
j) A promissory note needs acceptance. The statement is
i. Correct.
ii. Incorrect.
Ans: ii. Incorrect.
2. Answer the following questions in brief: 2x5=10
a) What is a contract?
Ans: Section 2(h) of the Indian Contract Act defines a contract as an agreement enforceable by law. The definition comprises two essential components:
An agreement between two or more persons to do or not to do something.
Enforceability of the agreement by law, meaning the rights and obligations created by the agreement must be legally recognized.
b) Write two elements of a contract of guarantee.
Ans: The two key elements of a contract of guarantee are:
Offer and Acceptance: The agreement must involve an offer by one party and its unconditional acceptance by another. The acceptance must align precisely with the terms of the offer and be communicated in the prescribed mode.
Consensus ad Idem: Both parties must agree to the same thing in the same sense at the same time.
c) Who is an unpaid seller?
Ans: Section 45 of the Sale of Goods Act defines an unpaid seller as a seller who:
Has not been paid or tendered the full price of the goods.
Has received a negotiable instrument (e.g., a bill of exchange) as conditional payment, which has been dishonored or remains unpaid.
Conditions for an unpaid seller:
(i) The seller must remain unpaid, and the price must still be due.
(ii) The seller must have an immediate right of action for the price.
(iii) If a negotiable instrument was received, it must have been dishonored.
d) Write two differences between partnership and co-ownership.
Ans: Difference between Partnership and Co-ownership
e) Who are the parties to a bill of exchange?
Ans: A bill of exchange has 3 parties:
a) the drawer, who draws the bill of exchange
b) the payee, who is entitled to the payment.
c) the drawee, who has to make the payment
3. Answer any four of the following questions: 5x4=20
Contracts can be classified based on validity, performance, obligations to perform, and formation. The various types of contracts are explained below:
1. On the Basis of Validity
a) Valid Contract:
A valid contract is enforceable by law, creating legal obligations between parties. Each party is legally responsible for fulfilling the terms. If one party fails, the other can seek legal enforcement.
b) Void Contract:
A void contract is an agreement that, although valid initially, becomes unenforceable due to certain circumstances. Neither party can enforce it, and any benefits gained must be returned.
c) Voidable Contract:
A voidable contract is enforceable at the discretion of one or more parties but not at the discretion of others.
d) Unenforceable Contract:
An unenforceable contract cannot be enforced in court due to technical defects such as lack of proper documentation or inadequate stamp duty.
e) Illegal Contract:
An illegal contract involves actions that are:
Fraudulent,
Against the law,
Harmful to individuals or property, or
Immoral or contrary to public policy.
2. On the Basis of Performance
a) Executed Contract:
In this contract, both parties have fully performed their obligations.
b) Executory Contract:
In an executory contract, obligations remain unfulfilled by one or both parties.
3. On the Basis of Obligations to Perform
a) Unilateral Contract:
A unilateral contract involves obligations for only one party.
b) Bilateral Contract:
In a bilateral contract, both parties are obligated to fulfill their respective promises.
4. On the Basis of Formation
a) Express Contract:
Terms of the agreement are explicitly stated, either in writing or orally.
b) Implied Contract:
Formed through the actions or conduct of the parties rather than written or spoken words (e.g., boarding a bus implies agreeing to pay the fare).
c) Quasi Contract:
Although not meeting the criteria of a traditional contract, a quasi-contract is imposed by law to prevent unjust enrichment.
d) Standard Form Contract:
A standard form contract has pre-determined terms set by one party. The other party must accept or reject the contract as is, with no alterations allowed.
b) Explain the duties of bailee.
Ans: Duties/Responsibilities of a Bailee
1. Duty to take reasonable care (151): The bailee is bound to take as much care of the goods bailed to him as a man of ordinary prudence would, under similar circumstances take, of his own goods of the same bulk, quality, and value as the goods bailed. The bailee must treat the goods as his own in terms of care. However, this does not mean that if the bailer is generally careless about his own goods, he can be careless about the bailed goods as well. He must take care of the goods as any person of ordinary prudence would of his things.
2. Duty not to make unauthorized use (Section 154): Section 154 says that if the bailee makes any use of the goods bailed which is not according to the conditions of the bailment; he is liable to make compensation to the bailer for any damage arising to the goods from or during such use of them.
3. Duty not to mix (Section 155-157): The bailee should maintain the separate identity of the bailer’s goods. He should not mix his goods with bailer’s good without bailer’s consent. If he does so, and if the goods are separable, he is responsible for separating them and if they are not separable, he will be liable to compensate the bailer for his loss.
4. Duty to return (Section 160): Section 160 - It is the duty of the bailee to return or deliver according to the bailer’s directions, the goods bailed, without demand, as soon as the time for which they were bailed has expired or the purpose for which they were bailed has been accomplished.
5. If the bailee keeps the goods after the expiry of the time for which they were bailed or after the purpose for which they were bailed has been accomplished, it will be at bailee's risk and he will be responsible for any loss or damage to the goods arising howsoever.
c) Explain different types of goods under the Sale of Goods Act, 1930.
Ans: Goods may be classified into various types as under:
1. Existing goods: These are goods which are owned and possessed by the seller at the time of sale. Only existing goods can be the subject-matter of a sale. The existing goods may be –
Specific goods: These are goods which are identified and agreed upon at the time of contract of sale is made. For e.g. a person visit s a Titan showroom and identifies a watch for purchase.
Ascertained goods: Though commonly used as similar in meaning to specific goods, these are the goods which become ascertained subsequent to the formation of contract of sale. For e.g. from say 10 Sony T.V. a person identifies the particular T.V.
Unascertained goods: These are the goods which are not identified and agreed upon at the time of the contract of sale. They are defined only by description and may form part of a lot. For e.g. a shopkeeper has a bag containing 50 kg of sugar. He agrees to sell 10 kg sugar to X out of that bag The 10 kg of sugar is unascertained goods as they are yet to be identified from the bag containing 50 kg.
2. Future Goods: These are goods which a seller does not possess at the time of the contract but which will be manufactured, or produced, or acquired by him after the making of the contract of sale. [Section 2(6)]. A contract of present sale of future goods, though expresses as an actual sale, purports to operate as an agreement to sell the goods and not a sale. This is because the ownership of a thing cannot be transferred before that thing comes into existence.
3. Contingent Goods: It is a type of future goods but these are goods the acquisition of which by the seller depends upon a contingency which may or may not happen.
d) State the salient features of limited liability partnership.
Ans: Features of LLP:
a) An LLP is a body corporate formed and incorporated under this Act and is legal entity separate from its partners.
b) It is an alternative corporate business from that gives the benefit of limited liability of a company and the flexibility of the partnership;
c) An LLP shall have perpetual succession.
d) Minimum number of members for a LLP is 2 and no limit for maximum numbers.
e) Individuals and Corporate body can be partners in an LLP.
f) It can continue its existence irrespective of changes in partners. Admission, retirement or death of a partner does not affect the existence, rights or liabilities of the LLP.
g) It is capable of entering into contracts and holding property in its own name;
h) The provisions of the Indian Partnership Act, 1932 shall not apply to an LLP.
e) Distinguish between bill of exchange and promissory note.
Ans: Difference between bill of exchange and Promissory Note
f) Briefly state the remedies available to an aggrieved party against breach of contract.
Ans: Remedies Available to the Buyer for Breach of Conditions
(a) Affected party may claim refund of price and reject the goods;
(b) Elect to treat breach of condition as breach of warranty and claim damages or compensation;
(c) When the affected party treat, breach of condition as breach of warranty he cannot repudiate the contract but claim damages only;
(d) No remedy is available when the fulfillment of condition is excused by law by means of impossibility or otherwise 13(3).
Consequences of Breach of Warranty:
(a) The breach of warranty gives right to a claim for damages but not to reject the goods and treat the contract as repudiated.
(b) Buyer may sue for damages.
(c) No remedy is available if the fulfillment of warranty becomes impossible by law.
4. How would you determine whether an agreement is a contract or not? Discuss. 10
Ans: To determine whether an agreement is a contract, it is necessary to check whether the agreement satisfies the legal requirements under the Indian Contract Act and fulfills the essential elements of a valid contract.
Definition of Contract and Agreement
Section 2(h) defines a contract as "an agreement enforceable by law," which has two key components:
An agreement between parties.
Enforceability by law.
Section 2(e) defines an agreement as "every promise and set of promises forming the consideration for each other."
While all contracts are agreements, not all agreements are contracts. An agreement becomes a contract only when it meets certain essential criteria.
Essentials of a Valid Contract
Offer and Acceptance: An agreement must have a clear offer from one party and unconditional acceptance by the other. Both parties must agree on the same terms.
Intention to Create Legal Relations: The parties must intend to create a legal obligation. Social or domestic agreements do not qualify as contracts.
Lawful Consideration: There must be a valid consideration, which means an exchange of something of value between the parties.
Capacity to Contract: Parties must be legally capable of entering into a contract, meaning they should be of sound mind, of the age of majority, and not disqualified by law.
Free Consent: Consent must be given freely without coercion, undue influence, fraud, misrepresentation, or mistake.
Lawful Object: The purpose of the agreement must be lawful and not against public policy, immoral, or illegal.
Agreement Not Declared Void: The agreement should not be one that is expressly declared void under the law, such as wagering agreements.
Possibility of Performance: The terms of the agreement must be clear, certain, and practically possible to perform.
Certainty of Terms: The agreement must have well-defined terms. Ambiguity or uncertainty makes it unenforceable.
Conclusion
An agreement becomes a contract only if it fulfills all the above elements and is enforceable by law. Therefore, while every contract is an agreement, not all agreements qualify as contracts. This distinction underscores the principle: "All contracts are agreements, but all agreements are not contracts."
Or
State the grounds on the basis of which a contract is discharged under the provisions of the Indian Contract Act, 1872. 10
Ans: Modes of discharge of a contract: A Contract is said to be discharged when the rights and obligations created by it come to an end. A contract may be discharged in the following modes:
1. Discharge by performance: Discharge by performance takes place when the parties to a contract fulfill their obligations arising under the contract within the time and in the manner prescribed. Performance may be actual performance or attempted performance.
2. Discharge by Agreement or Consent: A Contract comes into existence by an agreement and it may be discharged also by an agreement. The following are modes of discharge of a contract by an agreement:
a) By Waiver: Waiver takes place when the parties to a contract agree that they shall no longer be bound by the contract. For e.g. A an actor promised to make a guest performance in the film made by B. Later B forbids A from making the guest appearance. B is discharged of his obligation.
b) By Novation: Novation occurs when a we contract is substituted for an existing contract, either between the same parties or between different parties, the consideration being the discharge of old contract, mutually. E.g.: A is indebted to B & C to C. By mutual agreement B’s debt to C & B’s loan to A are cancelled & C accepts as his debtor.
c) By Rescission: Rescission of a contract takes place when all or some of the terms of the contract are cancelled. It may occur by mutual consent or where one party fails in the performance of his obligations, the other party may rescind the contract.
d) By alteration: Alteration of a contract may take place when one or more of the terms of the contract is/are altered by mutual consent of the parties to the contract.
e) By Remission: Remission means acceptance of a lesser fulfillment of the promise made, E.g. Acceptance of a lesser sum than what was contracted for, in discharge of the whole of the debt.
f) By Merger: Merger takes place when an inferior right accruing to a party under a contract merges into a superior right accruing to the same party under the same or some other contract. For e.g. P holds a property under a lease. He later buys the property. His rights as a lessee merge into his rights as an owner.
3. Discharge by impossibility of performance: If a contract contains an undertaking to perform impossibility, it is void ab initio. As per Section 56, impossibility of performance may fall into either of the following categories –
(i) Impossibility existing at the time formation of the contract: This is known as pre-contractual impossibility. The fact of impossibility may be:
a) Known to the parties: Both the parties are aware or know that the contract is to perform an impossible act. For e.g. A agrees with B to put life into dead wife of B, the agreement is void.
b) Unknown to the parties: Both the parties are unaware of the impossibility. The contract could be on the ground of mutual mistake of fact. For e.g. contract to sell his house at Andaman to B. Both the parties are in Mumbai and are unknown to the fact that the house is actually washed away due to Tsunami.
(ii) Impossibility arising subsequent to the formation of the contract: Where impossibility of performance of the contract is caused by circumstances beyond the control of the parties, the parties are discharged from further performance of the obligation arising under the contract.
4. Discharge by lapse of time: The Limitation Act, 1963 lays down certain specified periods within which different contracts are to be performed and be enforceable. If a party to a contract does not perform, action can be taken only within the time specified by the Act. Failing which the contract is terminated by lapse of time. For e.g. A sold a gold chain to B on credit without any period of credit, the payment must be made or the suit to recover it, must be instituted within three years from the date of delivery of the instrument.
5. Discharge by Operation of Law: A contract may be discharged independently of the wished of the parties i.e. by operation of law. This includes discharge:
a) By death: In contract involving personal skill or ability, the contract is terminated on the death of the promisor. In other contracts the rights and liabilities of a deceased person pass on to the legal representatives of the deceased person.
b) By insolvency: When a person is declared insolvent, he is discharged from all liabilities incurred prior to such declaration.
c) By unauthorized material alteration of the terms of a written agreement: Any material alteration made by a party to the contract, without the prior permission of the other party, the innocent party is discharged.
d) By rights and liabilities becoming vested in the same person: When the rights and liabilities under a contract vests in the same person.
6. Discharge by Breach of Contract: A breach of contract occurs when a party thereto without lawful excuse does not fulfill his contractual obligation or by his own act makes it impossible that he should perform his obligation under it. A breach to a contract occurs in two ways:
a) Actual Breach: When a party fails, or neglects or refuses or does not attempt to perform his obligation at the time fixed for performance, it results in actual breach of contract. For e.g. A promises to deliver 100 packs of ice-cream to B on his wedding day. A does not deliver the packs on that day. A has committed actual breach of the contract.
b) Anticipatory Breach: Anticipatory Breach is a breach before the time of the performance of the contract has arrived. This may take place either by the promisor doing an act which makes the performance of his promise impossible or by the promisor, in way showing his intention not to perform it.
5. (a) Briefly discuss the rights of an agent. 5
Ans: Rights of agent
a) Right to remuneration: Every agent has a right to receive remuneration from his principal for performing his duties. But, if an agent is guilty of misconduct in the business is not entitled to any remuneration in that part of the business which he has mis-conducted.
b) Right of retaining cash: Agent has the right to retain cash, received by selling goods of the principal, to the extent of amount spent and advances given to the principal by him in carrying out his business.
c) Right of lien: In the absence of any contract to the contrary, an agent is entitled to retain goods, papers and other property, whether movable or immovable, of the principal received by him, until the amount due to himself for commission, disbursements and services in respect of the same has been paid or accounted for to him.
d) Right to compensation: if any loss or injury caused to agent due to negligence or lack of skill of principal, then the agent has the right to claim compensation for the same.
e) Right to indemnity: The employer of an agent is bound to indemnify him against the consequences of all lawful acts done by such agent in exercise of the authority conferred upon him. Further, where one person employs another to do an act, and the agent does the act in good faith, the employer is liable to indemnify the agent against the consequences of that act.
(b) Distinguish between contract of guarantee and contract of indemnity. 5
Ans: Distinction between a contract of Indemnity and a contract of guarantee
The contract of indemnity differs from the contract of guarantee in the aspects shown in the following table:
Or
State the essential elements of a contract of sale. Also distinguish between sale and agreement to sell. 5+5=10
Ans: The essentials of a contract of sale are:
1. Numbers of parties: Since a contract of sale involves a change of ownership, it follows that the buyer and the seller must be different persons. A sale is a bilateral contract. A man cannot buy from or sell goods to himself. To this rule there is one exception provided for in section 4(1) of the Sale of Goods Act. A part-owner can sell goods to another part-owner. Therefore, a partner may sell goods to his firm and the firm may sell goods to a partner.
2. Goods: The subject-matter of the contract of sale must be ‘goods’. According to Section 2(7) “goods means every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale.” Goodwill, trademarks, copyrights, patents right, water, gas, electricity, decree of a court of law, are all regarded as goods. In the case of land, the grass which forms part of land have to be separated from the land. Thus where trees sold so that they could be cut out and separated from the land and then taken away by the buyer, it was held that there was a contract for sale of movable property or goods (Kursell vs Timber Operators & Contractors Ltd.). But contracts for sale of things ‘forming part of the land itself’ are not contracts for sale of goods.
3. Price: The consideration for a contract of sale is price. Price means money consideration. If it is anything other than money, it will not be sale. But if the exchange is made partly for goods and partly for price, it will still amount to sale. However, the price may be paid or promises to be paid.
4. Transfer of property: 'Property' here means ownership. Transfer of property in the goods is another essential of a contract of sale of goods. A mere transfer of possession of the goods cannot be termed as sale. To constitute a contract of sale the seller must either transfer or agree to transfer the property in the goods to the buyer. Further, the term 'property', as used in the Sale of Goods Act, means 'general property' in goods as distinguished from 'special property' [Sec. 2(11)]. If P, who owns certain goods, pledges them to R, he has general property in the goods, whereas R (the Pawnee) has special property or interest in the goods to the extent of the amount of advance he has made to the Pawnor. Similarly, in the case of bailment of goods for the purpose of repair, the bailee has special interest in goods bailed to the extent of his labour charges.
5. No formalities to be observed (Sec. 5): The sale of Goods Act does not prescribe any particular form to constitute a valid contract of sale. A contract of sale of goods can be made by mere offer and acceptance. The offer may be made either by the seller or the buyer and the same must be accepted by the other. Neither payment nor delivery is necessary at the time of making the contract of sale. Further, such a contract may be made either orally or in writing or partly orally and partly in writing or may be even implied from the conduct of the parties. Where articles are exhibited for sale and a customer picks up one and the sales assistant packs the same for him, there has resulted a contract of sale of goods by the conduct of the parties.
6. Includes both a ‘sale’ and ‘an agreement to sell’: The term ‘contract of sale’ is a generic term and includes both a ‘sale’ and an ‘agreement to sell’.
Sale: Where under a contract of sale, the property in the goods is immediately transferred at the time of making the contract from the seller to the buyer; the contract is called a 'sale' [Sec. 4(3)]. It refers to an absolute sale, e.g., an outright sale on a counter in a shop. There is immediate conveyance of the ownership and mostly of the subject-matter of the sale as well (delivery may also be given in future). It is an executed contract.
An agreement to sell: Where under a contract of sale, the transfer of property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called 'an agreement to sell' [Sec. 4(3)]. It is an Executory contract and refers to a conditional sale.
7. Other essential elements: A contract for the sale of goods must satisfy all the essential elements necessary for the formation of a valid contract, e.g., the parties must be component to contract, there must be free consent, there must be consideration, the object must be lawful etc.
6. (a) Explain the procedure of registration of partnership firm. 5
Ans: Procedure of Registration of partnership firms:
The registration of a partnership is not compulsory but to avoid future problems it is necessary for a firm to get itself registered under the Indian Partnership Act, 1932. Sec. 58 of the Indian Partnership Act lays down the provisions relating to the registration of a firm. If partners want to get their firm registered, they have to file statement in the prescribed form. The statement can be send by post or delivered to the registrar of the area in which the place of business is situated. The following points must be stated in the statement of registration:
a) The firm’s name
b) The principal place of business of the firm
c) The names of any other places of business
d) The date when each partner joined the firm
e) The name and address of the firm
f) The duration of the firm
The statement of registration shall be signed by the partners or their authorised agents. When the registrar is satisfied that the provisions of Sec. 58 have been duly complied with, he shall record an entry of this statement in the register of firms and shall file the statement.
(b) Distinguish between limited liability partnership and company. 5
Difference between LLP, Partnership and Company
Or
State the duties and rights of a partner under the Indian Partnership Act, 1932. 10
Ans: Rights and Duties of Partners of a Firm
The Rights of a partner are as under:
(i) To take active part in the business: Every partner has a right to take active part in the conduct and management of the business of the firm.
(ii) To share Profits: Every partner has a right to share profits earned and are liable to contribute to the losses incurred by the firm.
(iii) To be consulted: Every partner has a right to be consulted in all matters affecting the business of the partnership firm before any decision is been taken. In case of difference of opinion it may be settled by decision of majority of the partners.
(iv) To have access to the accounts: Every partner has a right to have access, inspect and copy the books of accounts of the firm.
(v) To be indemnified: Every partner has a right to be indemnified for the expenses incurred or payments made in the ordinary course of business.
(vi) To use the property of the firm: Every partner has a right to use the property of the firm for the purposes of the business of the firm. If the partner uses the firm’s property for private purpose, then he is liable to compensate the firm for the same.
(vii) Interest on capital: Every partner has a right to receive interest on capital at a certain rate as may be specified and agreed in the partnership agreement. Such interest is payable only out of profits, in any, earned by the firm.
(viii) Interest on loan: Every partner has a right to receive interest on loan at the rate of 6% p.a. on any loans or advance payments made by him beyond the capital. Such interest is payable not only out of the profits but also from the assets of the firm.
The duties of a partner are as under:
(i) To carry on the business to the common advantage: Every partner is bound to:
(a) Carry on the business of the firm to the greatest common advantage.
(b) To be just and faithful to each other in the mutual dealings.
(c) To use reasonable care and skill in the performance of his duties and
(d) Render true accounts and full information of all things, affecting the firm, to any partner or his legal representative.
(ii) To indemnify: Every partner is bound to indemnify the firm:
(a) For any loss cause to it by his fraud in the conduct of business of the firm.
(b) For any loss incurred due to his willful neglect in the conduct of the business of the firm.
(iii) To attend diligently to his duties: Every partner is bound to attend diligently to his duties in the conduct of the business of the firm. He must use his knowledge and skill for the benefit of the firm.
(iv) To account for private profits: If a partner derives any benefit, without the consent of the other partners from any transactions of the firm or from any use of the partnership property, name or business connection. He must account for it and compensate it to the firm. There exists a fiduciary relationship between partners and therefore no partner is entitled to make any personal profit.
(v) To account for profit in competing business: A partner must not carry a business as of competing nature with the firm. If he does that then he is bound to account for and compensate to the firm all the profits made by him in that competing business.
7. (a) Briefly state different types of endorsement. 5
Ans: Different kinds of endorsement with their respective significance are explained below:
a) Blank or General Endorsement: An endorsement is said to be blank or general, if the endorser sings on the back or on the face of the instrument without specifying the name of any endorsee. The effect of his endorsement makes the instrument payment to bearer even though originally it was payable to order. For example, a cheque payable to Mr. X or order and Mr. X endorse the cheque to Mr. Y by simply affixing his signature. The effect of this endorsement makes the instrument payable to bearer even though originally it was payable to order.
b) Full or Special Endorsement: If an endorser signs his name and adds a direction to pay the amount mentioned in the instrument to or to the order of a specified persons, such an endorsement is said to be a full or special endorsement. For example, “Pay to Mr. X or order” S/d Mr. Y is an example of full endorsement. Here Mr. Y is the endorser and he has mentioned the name of the endorsee – Mr. X.
c) Conditional Endorsement: An endorsement is conditional or qualified if it limits or neglects the liability of the endorser. For example, “Pay to Mr. X on his marriage” s/d Mr. Y is a conditional endorsement. In case of conditional endorsement, the liability of the endorser and the rights of the endorsee becomes conditional on the happening of a particular event.
d) Restrictive Endorsement: An endorsement is said to be Restrictive, when it prohibits or restrictive the future negotiability of the instrument, it merely entitles the holder of the instrument to receive the amount on the instrument for a specified purpose. For example, “Pay to Mr. X only” s/d Mr. Y. This endorsement confers all the rights of an endorser to the endorsee except the right of negotiation.
e) San Recourse endorsement and San frais endorsement: In San recourse endorsement, the endorser by his expressed words excludes his own liability and in San frais endorsement, the holders have no right against the endorser if the instrument is dishonoured. For example,” Pay to Mr. X or order – Notice of dishonour waived.” These types of endorsement are generally used to avoid personal liability.
f) Facultative endorsement: In such type of endorsement, the endorser by his express words increases his liability or give up some of his rights under the negotiable instruments Act.
g) Partial Endorsement: When the endorser intends to transfer to the endorsee only a part of the amount of instrument by endorsement, the endorsement is said to be partial. Such type of endorsement is legally invalid. For example, when a cheque of Rs. 10,000 is endorsed for Rs. 5000 is an example of partial endorsement.
h) Forged endorsement: When a negotiable instrument is endorsed with the forged signature of the endorser, the endorsement is called forged endorsement.
(b) State the privileges of holder in due course. 5
Ans: A Holder in Due Course (HDC) is entitled to several rights and privileges under the law of negotiable instruments, which are as follows:
Better Title Free from Defects
An HDC acquires a title superior to that of the transferor or any previous party. This ensures that even if the instrument has defects or irregularities in its prior transactions, the HDC holds it free from such flaws. The HDC can recover the full amount of the instrument from any prior party.Liability of All Prior Parties
Every party to the instrument, such as the maker, drawer, acceptor, or endorser, is liable to the HDC until the instrument is fully satisfied. The HDC has the right to sue these parties in their own name to claim payment.Validity Despite Conditional Delivery
If a negotiable instrument was delivered conditionally or for a specific purpose and later comes into the hands of an HDC, it is presumed to have been validly delivered. The HDC acquires an unquestionable title and the right to enforce the instrument.Protection in Case of Fictitious Bills
In situations where both the drawer and payee of a bill are fictitious, the acceptor is still liable to the HDC. The HDC's right to recover is not affected by the fictitious nature of these parties.Rights over Inchoate Instruments
If an instrument was initially incomplete and was later improperly completed for a higher sum than intended by the maker, the HDC's right to recover the full amount remains unaffected. The HDC is protected even if there was a wrongful completion of the instrument by a prior party.
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What are ‘Information’ and ‘Right to Information’ under the Right to Information Act, 2005? Discuss the formalities of making a request for obtaining information under the Act. 4+6=10
Ans:
Information under the Right to Information Act, 2005
According to Section 2(f) of the Right to Information Act, 2005, ‘Information’ refers to any material in any form, including records, documents, memos, e-mails, opinions, advice, press releases, circulars, orders, logbooks, contracts, reports, papers, samples, models, and data material held in electronic form. It also includes information related to private bodies that can be accessed by a public authority under any law.
Key aspects of information include that it is not confined to written records but also encompasses audio, video, or any other form of data. It pertains to activities, policies, and decisions of public authorities.
Right to Information under the Act
The Right to Information allows individuals to access information held by or under the control of public authorities. It includes the right to inspect documents and works, take certified copies of records, and obtain information in the form of diskettes, tapes, or any electronic format.
This right empowers citizens to obtain transparency in governance, hold public authorities accountable, and reduce corruption by enabling access to records and data.
Formalities of Making a Request for Information
Application Submission
An application can be submitted in writing or electronically in English, Hindi, or the official language of the area to the Public Information Officer (PIO) of the relevant public authority.Details Required in the Application
The application must include the applicant's name, address, and contact details, a clear description of the information sought, and payment details for the prescribed application fee.Application Fee
The general fee is ₹10/-, though it may vary in some states. Payment can be made via cash, demand draft, banker’s cheque, or other prescribed methods.Assistance for Applicants
If a person cannot write or needs help, the PIO is required to assist in drafting the application.Response Time
Within 30 days for general cases from the date of receipt of the application.
Within 48 hours if the information concerns the life or liberty of a person.
Within 40 days if the information relates to a third party and involves its consent.
Exemptions and Appeals
If information is denied, the applicant can file an appeal with the first appellate authority within 30 days. A second appeal can be made to the Central or State Information Commission.
By following these steps, citizens can effectively utilize their Right to Information to promote transparency and accountability in governance.
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