JGU Id. No.

_____________

O.P. Jindal Global University

Jindal Global Law School
Re-sit Examination

Course Name : Company Law/Corporate Law/Company Law I

Course Code : L-CT-0009/ L-CT-0017
Programme : B.A., LL.B. & B.B.A., LL.B.
Time Allowed : 3 Hours
Maximum Marks : 50

This question paper has four (4) printed pages (including this page).

Instructions to students:

1. DO NOT write your Name and Student Id. No. anywhere on the answer book except on the space provided.
2. DO NOT write anything on the question paper except Student Id. No. on the space provided.
3. Start each question on a new page.
4. Use of mobile phone or any electronic storage and access system is prohibited.
5. Students undertaking the examination are requested to adhere to the University norms related to
examinations.

__________________________________________________________________________________________
This is a Closed Book examination. However, students are only allowed to bring the unannotated Bare Acts in
the Examination Hall. Case-list is annexed to the question paper.
Warning: Plagiarism in any form is prohibited. Anyone found using unfair means will be penalized
severely.

JGLS [Re-sit Examination – November-December’2018] Page 1

 SECTION I (2 x 7.5 = 15 Marks)

Write short notes on any two (2) of the following:

1) The principle of ‘delegated management’ in company law.

2) Doctrine of ‘ultra vires’.

3) Shareholders’ rights.

SECTION II (1 x 15 = 15 Marks)

Attempt any one (1) of the following questions:

1) ‘A company has no body to be injured or a soul to be damned’ – in light of this statement discuss in detail the
applicability of the concept of ‘lifting of corporate veil’ under the Indian law.

2) Differentiate between ‘private placement of shares’ and ‘public issue of shares’, elaborate upon the procedure
associated with both these options, citing relevant legal provisions.

SECTION III (2 x 10 = 20 Marks)

Attempt any two (2) of the following questions:

1) The Articles of Association of Westeros Arms & Ammunation Private Limited (Company), a company that
manufactures and sells valyrian-steel swords, specifies that “all contracts shall be executed by at least two
directors of the Company where the sum involved is in excess INR 10 Lacs.” On December 20, 2015, the
Managing Director of the Company entered into a contract with an interior decorator for the refurbishing of
his office, for a fee of INR 8 Lacs. In January 2016, the Company, with a view to restrict the transactions
undertaken outside the ordinary course of business, amended its Articles of Association. Accordingly,
pursuant to the amendment, any contract, which is not in the ordinary course of business, would require
execution by at least two directors of the Company to be valid. In February 2016, once the refurbishment was
complete, the interior designer sought payment of the agreed sum from the Company. However, in view of
the recent amendment the payment was refused on the ground that the contract was invalid as two directors
did not execute the same. The interior decorator claimed that the amendment to the Articles of Association
was invalid and demanded to be paid. Decide the dispute.

2) Mrs. Shiela Kejwani, in 2002, incorporated Capital Transport Ltd., which conducts the business of plying
taxis in New Delhi. In 2015, pursuant to the enforcement of the ‘odd-even’ rule in New Delhi, Mrs. Kejwani
realized that the demand of taxis would significantly increase in the Capital. Consequently, in order to expand
its business operations, Mrs. Kejwani decided to issue equity shares of Capital Transport Ltd. to the public.

JGLS [Re-sit Examination – November-December’2018] Page 2

 Accordingly, the prospectus of Capital Transport Ltd. included a statement to the effect that demand for taxis
would significantly increase in New Delhi for the next few years. Mr. Kanhaiya Azad, believing the
representation made in the prospectus to be true, subscribed to 20,000 equity shares @ INR 36/- each.

Subsequently, Mr. Azad sold 10,000 of these shares to another investor – Mr. Sharad Power @ INR 50/- each.
However, in 2016, the Delhi Government withdrew the ‘odd-even’ rule and hence, the demand for taxis in
the Capital did not increase at the same rate as anticipated by Mrs. Kejwani’s. As a result, the share prices of
Capital Transport Ltd. fell drastically.

Both Mr. Azad and Mr. Power have approached you for an advice with respect to their rights and whether a
claim against Capital Transport Ltd. would be maintainable.

3) In Query 2 above, Mrs. Kejwani wishes to reduce the share capital of Capital Transport Ltd. Please advise her
regarding the buy-back of Capital Transport Ltd.’s issued equity shares.

CASE LIST

1. Ashbury Railway Carriage and Iron Company Ltd. v. Richie, (1875) L.R. H.L. 653
2. Bajaj Auto Ltd v. Western Maharashtra Development, [2015] (order in respect of appeal no. 153 of 2010)
3. Benett Coleman & Co. v. Union of India, (1972) 2 SCC 788
4. Bharat Commerce & Industries Ltd. V. Registrar of Companies, (1973) 43 Comp Cas 275 (Cal)
5. Chandrakant Khare v. Shantaram Kale, (1989) 65 Comp Cas 121 SC 

6. Daimler Co. Ltd v. Continental Tyre & Rubber Co. (Great Britain) Ltd., (1916) 2 AC 307
7. Derry v. Peek, (1889) LR 14 AC 337
8. DLF Limited vs. SEBI, SAT Order in Appeal No. 331 of 2014
9. Dr. Lakshmanaswamy Mudliar and others v. LIC of India, 1963 SCR Supl. (2) 887
10. Erangler v. New Sombrero Phosphate Company, (1878) 3 AC 1218
11. Glukstein v. Barnes, (1900) AC 240
12. In re Dishaw Maneckjee Petit, AIR 1972 BOM 371
13. In re M.K. Sreenivasan, [1944] 14 Comp. Cas. 193 (Mad)
14. In re Paradise Plastic Enterprises Ltd., (1989) 3 Comp LJ 248 (CLB)
15. In re Usha Beltron Ltd., 27 SCL 124 (CLB)
16. In re The Kondoli Tea Co. Ltd., (1886) ILR 13 Cal. 43
17. Kelner v. Baxter, (1866) L.R. 2 C.P. 174
18. LIC of India v. Escorts Ltd., [1986] 59 Comp Cas 548
19. M.S. Madhusoodan v. Kerela Kaumudi (P.) Ltd., (2003) 46 SCL 695 (SC)
20. Macaura v. Northern Assurance Company, (1925) AC 619
21. Mahony v. East Holyford Mining Co., [1875] L.R. 7 H.L. 869
22. Messer Holdings Limited v. Shyam Madanmohan Ruia, [2010] 159 Comp Cas 29 

23. Needle Industries (India) Ltd. v. Needle Industries Newey (India) Holding Ltd., 1981 SCR (3) 698
24. Newborne v. Sensolid, [1954] 1 QB 45
25. Peek v. Gurney, (1873) LR 6 (HL) 377
JGLS [Re-sit Examination – November-December’2018] Page 3
26. Prest v Petrodel Resources Limited, [2013] UKSC 34
27. Progressive Aluminum Ltd. v. Registrar of Companies, [1997] 26 CLA 277 A.P.
28. R. Mathalone v. Bombay Life Insurance Company Pvt Ltd., AIR 1953 SC 385
29. R.C. Cooper v. Union of India, (1970) 1 SCC 248
30. In re Tenant v. Stanley, [1906] 1 Ch. 131
31. Rex v. Kylsant, [1932] 1 K.B. 422
32. Royal British Bank v. Turquand, (1856) 6 E&B 327
33. S.T Corporation of India Ltd. v. Commercial Tax Officer, AIR 1963 SC 1811
34. Sahara India Real Estate Corporation Ltd. v. SEBI, (2012) 10 SCC 603
35. Salomon v. A Salomon & Co. Ltd., [1897] AC 22
36. State of Rajasthan v. Gotan Lime Stone Khanji Udyog Pvt. Ltd.
37. State of Uttar Pradesh v. Renusagar Power Co., (1988) 4 SCC 59
38. Sundaram Finance Service & Ltd. v. Grandtrust Finance Ltd., (2003) 42 SCL 89 (Mad)
39. Tamil Nadu News Print and Papers Ltd. v. Registrar of Companies, [1995] 5 SCL 187 (Mad.)
40. Tomkinson v. South Eastern Railway, (1887) 35 Ch. D, 675
41. V.B. Rangaraj v. V.B. Gopalakrishnan, and others, AIR 1992 SC 453, 1992
42. Vodafone International Holdings BV v. Union of India, (2012) 6 SCC 613
43. World Phone India Pvt Ltd. v. WPI Group Inc., USA (2013) 178 Comp Cas 173

JGLS [Re-sit Examination – November-December’2018] Page 4